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Lloyd's of London Syndicate No 2623 v. Navicent Health, Inc.

United States District Court, M.D. Georgia, Macon Division

October 3, 2019




         In the instant insurance dispute, Plaintiff Lloyd's of London Syndicate No. 26');">623 (“Lloyd's” or “Lloyd's of London”) seeks summary judgment on its breach of contract and declaratory judgment claims against Defendant Navicent Health, Inc. (“Navicent”) and on Navicent's counterclaim for bad faith. Navicent, in turn, seeks partial summary judgment on two of Plaintiff's claims. As explained below, Lloyd's of London's Motion for Summary Judgment [Doc. 55] is GRANTED IN PART, and Navicent's Partial Motion for Summary Judgment [Doc. 56');">6] is DENIED.


         On May 1, 2015, a Navicent employee filed a qui tam action on behalf of the United States and the State of Georgia, alleging that Navicent knowingly submitted “false or fraudulent claims” in violation of the federal False Claims Act and the Georgia False Medicaid Claims Act. [Doc. 6');">6, p. 1]. Specifically, the employee claimed Navicent illegally billed Medicare and Medicaid programs for emergency transportation of patients who did not require it and for emergency transportation that was not made “as quickly as possible.” [Id. at ¶¶ 20, 22].

         As part of its investigation, the United States government issued Navicent a civil investigative demand requesting information pertinent to the claims. [Doc. 7]; [Doc. 6');">61-1, ¶ 14');">4]. Upon receiving a copy of the qui tam complaint and the civil investigative demand, Navicent forwarded the documents to Lloyd's of London, who had previously agreed to insure Navicent against expenses incurred as a result of “wrongful acts” committed between September 30, 2015, and September 30, 2016');">6. [Doc. 4');">4, pp. 2');">p. 2, 17]. Such “wrongful acts” included actual or allegedly erroneous requests for government reimbursement for medical services rendered by Navicent, provided that Navicent had no knowledge of the acts prior to September 30, 2012. [Id. at pp. 13, 26');">6-27]; [Doc. 6');">61-1, ¶¶ 2, 3, 15]. Navicent, who had been accused in the qui tam complaint of committing such a wrongful act, requested coverage under its insurance policy (the “Policy”) with Lloyd's of London on September 16');">6, 2016');">6. [Doc. 6');">61-1, ¶ 15].

         Under the terms of the Policy, Navicent was required to “co-operate with [Lloyd's of London] in all investigations, including regarding the application and coverage under [the] Policy, . . . in all aspects of the conduct of suits and in enforcing any right of contribution or indemnity against any person or organization.” [Doc. 4');">4, p. 2');">p. 29');">p. 2');">p. 29]. Additionally, Lloyd's of London had the right to “effectively associate with [Navicent] in the investigation, defense and settlement of any Claim that appear[ed] reasonably likely to be covered” by the Policy and to “conduct any investigation [Lloyd's of London] deem[ed] necessary, including, without limitation, any investigation with respect to coverage.” [Id. at pp. 18, 19');">19].

         During settlement negotiations between Navicent and the Government, the Government made a PowerPoint presentation related to Navicent's alleged False Claims Act violations and provided it to Navicent on September 14');">4, 2016');">6. [Doc. 6');">61-1, ¶ 21]; [Doc. 55-4');">4, Plaintiff's Ex. 4');">42]. The Government's presentation focused on two issues: (1) Navicent's alleged improper billing for Medicare/Medicaid reimbursement of emergency transports to unauthorized locations, and (2) Navicent's alleged improper billing for Medicare/Medicaid reimbursement for transports billed as emergencies that were not, in fact, emergencies. [Doc. 6');">61-1, ¶ 22]; [Doc. 55-4');">4, Plaintiff's Ex. 4');">42, p. 22].[1] On December 7, 2016');">6, Navicent made its own presentation to the Government that focused solely on the first issue. [Doc. 6');">61-1, ¶ 31]; [Doc. 55-5, Plaintiff's Ex. 4');">44');">4]; [Doc. 55-25, Brennan Depo., pp. 107:19');">19-108:2, 108:24');">4-25]. Navicent based its presentation in part on an independent and limited analysis conducted by FTI Consulting on behalf of Navicent's counsel. [Doc. 6');">61-1, ¶ 31]; [Doc. 55-5, Plaintiff's Ex. 4');">44');">4, p. 6');">6]; [Doc. 55-25, Brennan Depo., pp. 108:24');">4-109:5].

         After exchanging presentations with the Government, Navicent called Lloyd's of London-who was not part of the settlement negotiations-on January 27, 2017, to discuss the qui tam complaint and Government investigation. [Doc. 6');">61-1, ¶ 32]. At the end of the call, Lloyd's of London requested that Navicent provide it with the Government's presentation, Navicent's presentation, and the FTI Consulting limited analysis underlying Navicent's presentation. [Id. at ¶¶ 34');">4, 36');">6]. Lloyd's of London further requested to be informed of any information Navicent would learn in an upcoming meeting with the Government at the United States Attorney's Office in Macon, Georgia, on February 6');">6, 2017. [Id.].

         After meeting with the Government on February 6');">6, Navicent sent a copy of both settlement presentations to Lloyd's of London and conducted a second telephone call with Lloyd's on February 14');">4, 2017, to discuss the meeting. [Id. at ¶¶ 21, 31, 39]; [Doc. 6');">63, ¶¶ 79, 80]. During the phone call, Lloyd's of London requested more documents from Navicent, including an overall analysis FTI Consulting performed of Navicent's emergency services line[2] and documents Navicent produced to the Government in 2016');">6 in response to the civil investigative demand. [Doc. 6');">61-1, ¶¶ 4');">43, 4');">44');">4]. A few days after its second phone call with Navicent, Lloyd's also inquired into the status of the other documents it previously requested during its first phone call. [Id. at ¶ 4');">45].

         Lloyd's of London also followed up with a complete list of items it sought, including the previously requested civil investigative demand documents, notes from internal interviews Navicent conducted with key emergency services staff, and a “[c]opy of relevant portion[s] of any investigations or analyses performed by . . . consultants relating to the subject matter of” the qui tam action and the Government's investigation. [Id. at ¶ 4');">47]; [Doc. 55-9, Plaintiff's Ex. 4');">49, Bates 000516');">61-6');">63]. In response, Navicent refused to submit certain civil investigative demand documents on the grounds that they were not provided to the Government in the underlying investigation. [Id. at Bates 0005159- 6');">60]. Navicent also explained that it would not transcribe handwritten notes of staff interviews because to do so would “take some time and expense” and be duplicative of summary interview memoranda already provided to Lloyd's. [Id. at Bates 000516');">60]. Navicent also refused to provide notes for its interviews of Kathleen Spears, a Navicent Compliance Department employee, on privilege grounds. [Id.]. Navicent acknowledged that the Government provided a memo regarding its own interviews of Navicent staff members, but without the Government's permission, Navicent could not distribute the memo to anyone but its own counsel. [Id.]. Finally, Navicent provided Lloyd's with three pages of FTI Consulting's findings presentation, including the cover page and the following heavily redacted “Call Objectives” slide.

         (Image Omitted)

         [Doc. 6');">61-1, ¶ 4');">48]; [Doc. 55-10, Plaintiff's Ex. 4');">49, Bates 000516');">64');">4-6');">66');">6].

         Navicent settled with the Government and the qui tam relator in August 2017. [Doc. 36');">6-4');">4]; [Doc. 6');">63, ¶ 6');">64');">4]. It then demanded to be indemnified by Lloyd's of London for the total settlement amount and attorney's fees and expenses incurred in handling the qui tam action and the Government's investigation. [Doc. 55-21, Plaintiff's Ex. 85]. Throughout the ensuing insurance coverage discussions, Lloyd's continued to request documents from Navicent, only some of which were produced. Namely, on February 1, 2018, Lloyd's requested “any Navicent documents or communications dated prior to the continuity date of September 30, 2012 that discuss either the federal Medicare ambulance billing requirements or the MedUSA billing parameters for ambulance billing.” [Doc. 55- 19');">19, p. 4');">4].[3] Navicent did not provide the requested information, arguing that it had already produced documents that were “more than sufficient to enable the Underwriters to conclude their investigation.” [Doc. 6');">61-1, ¶ 6');">68]; [Doc. 55-20, pp. 4');">4-5].

         Lloyd's of London filed this lawsuit against Navicent on April 20, 2018, seeking two declaratory judgments. [Doc. 1]; [Doc. 26');">6].[4');">4" name="FN4');">4" id="FN4');">4">4');">4] Lloyd's first requests a declaration that it has no obligation to cover Navicent's indemnification claim due to Navicent's alleged failure to provide the above-discussed documents. [Doc. 26');">6, pp. 18-19');">19]. Lloyd's also requests a declaration that it has no obligations under the Policy because Navicent allegedly breached the Policy's knowledge provision, which states, “[Lloyd's of London] will pay on behalf of the Insured Damages and Claims Expenses which the Insured shall become legally obligated to pay in respect of any Claim . . . [p]rovided always that the Insured had no knowledge of such Wrongful Act prior to the Continuity Date [September 30, 2012].” [Doc. 4');">4, p. 17]. The “Insured” for purposes of the Policy includes Navicent and “any past present or future employee, director, officer, trustee, review board or committee member, or volunteer of [Navicent], but only while acting within the scope of that person's duties or capacity as such.” [Id. at p. 2');">p. 26');">6].

         Lloyd's claims that Navicent's Clinical Educator, Kelly Joiner, who was responsible for training Navicent employees on how to code emergency services for Medicare and Medicaid purposes, sent an email evidencing knowledge in contravention of the Policy knowledge provision. [Doc. 55-27, Joiner Depo., pp. 17:10-18:1]; [Doc. 55-22, Plaintiff's Ex. 90]. In the email, dated February 1, 2012, Joiner indicated that she reviewed all ambulance transports spanning April 21 to November 23, 2011, which were all coded as emergencies because they originated from 9-1-1 calls, except a few that were not 9-1-1 calls but had an immediate ambulance dispatch. [Doc. 55-22, Plaintiff's Ex. 90]. Ten days later, Joiner requested to “meet again to discuss the coding process of the ambulance transports, ” given the “denials/redeterminations” the business department had received. [Id.]. This, according to Lloyd's, evidences “without question” Navicent's awareness before the Continuity Date “that its protocol of coding as emergenc[ies] all ambulance calls that were the result of a 911 call-the very Wrongful Acts alleged in [the qui tam complaint]-had been rejected by the Government . . . .” [Doc. 6');">68, p. 2');">p. 23');">p. 2');">p. 23].

         Both parties moved for summary judgment on these claims, and Lloyd's of London also moves for summary judgment on Navicent's counterclaim for bad faith under O.C.G.A. § 33-4');">4-6');">6,[5] claiming that it has reasonable grounds to contest Navicent's claim for indemnification under the Policy and therefore cannot have refused payment in bad faith. As discussed below, both parties' motions must be denied, with the exception of Lloyd's of London's motion on Navicent's bad faith claim.


         A. Standard of Review

         A party is entitled to summary judgment “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56');">6(c). As to issues for which the movant would bear the burden of proof at trial, the “movant must affirmatively show the absence of a genuine issue of material fact and support its motion with credible evidence demonstrating that no reasonable jury could find for the non-moving party on all of the essential elements of its case.” Landolfi v. City of Melbourne, 515 Fed.Appx. 832, 834');">4 (11th Cir. 2013) (citing Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115 (11th Cir. 19');">1993)). As to issues for which the non-movant would bear the burden of proof at trial, the movant may (1) simply point out an absence of evidence to support the non-moving party's case or (2) provide “affirmative evidence demonstrating that the [non-movant] will be unable to prove its case at trial.” United States v. Four Parcels of Real Prop. in Greene & Tuscaloosa Ctys., 4');">41 F.2d 14');">428');">94');">41 F.2d 14');">428, 14');">438 (11th Cir. 19');">1991) (citing Celotex Corp. v. Catrett, 4');">477 U.S. 317');">4');">477 U.S. 317, 325 (19');">1986');">6)).

         Once the movant satisfies its burden, the burden shifts to the non-movant, who must “go beyond the pleadings and present affirmative evidence to show that a genuine issue of material fact exists.” Porter v. Ray, 4');">46');">61 F.3d 1315, 1320 (11th Cir. 2006');">6) (citing Fitzpatrick, 2 F.3d at 1115-17). “A factual dispute is genuine ‘if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'” Four Parcels, 94');">41 F.2d at 14');">437 (quoting Anderson v. Liberty Lobby, Inc., 4');">477 U.S. 24');">42');">4');">477 U.S. 24');">42, 24');">48, (19');">1986');">6)).

         The standard of review for cross-motions for summary judgment does not differ from the standard applied when only one party files a motion. See American Bankers Ins. Grp. v. United States, 4');">408 F.3d 1328');">4');">408 F.3d 1328, 1331 (11th Cir. 2005). “Cross-motions for summary judgment will not, in themselves, warrant the court in granting summary judgment unless one of the parties is entitled to judgment as a matter of law on facts that are not genuinely disputed.” United States v. Oakley, 74');">44');">4 F.2d 1553');">74');">44');">4 F.2d 1553, 1555 (11th Cir. 19');">1984');">4) (internal quotation marks and citations omitted). The Court will consider each motion on its own merits, resolving all reasonable inferences against the party whose motion is under consideration. See American Bankers, 4');">408 F.3d at 1331. However, “[a] court need not permit a case to go to a jury . . . when ...

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