Case 5:13-cv-00322-R Document 16 Filed 05/28/13 Page 1 of 9

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA ) ) Plaintiff, ) ) v. ) ) (1) OCEAN DENTAL, P.C., and ) (2) ROBIN LOCKWOOD, D.D.S., ) ) Defendants. ) _________________________________ ) ) OCEAN DENTAL, PC. ) ) Third Party Plaintiff ) v. ) ) CONTINENTAL CASUALTY ) COMPANY, doing business as CNA, ) ) Third Party Defendant ) ) FORTRESS INSURANCE COMPANY,

Case No. CIV-13-0322-R

THIRD PARTY PLAINTIFF OCEAN DENTAL, P.C.S COMPLAINT FOR DECLARATORY RELIEF AGAINST CONTINENTAL CASUALTY COMPANY COMES NOW Third Party Plaintiff Ocean Dental, P.C. ("Ocean Dental") pursuant to 28 U.S.C. 2201(a), and Federal Rule of Civil Procedure 14, and brings this third party action for a declaratory judgment against Defendant Continental Casualty Company ("Continental" or "CNA") to resolve and adjudicate a real and justiciable controversy between Ocean Dental and CNA regarding the parties' respective rights and obligations under a certain insurance contract. PARTIES 1. Ocean Dental is a professional corporation organized and existing

under the laws of the state of Oklahoma with its principal place of business in Stillwater, Oklahoma.
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2.

Third

Party

Defendant

Continental

Casualty

Company

("Continental" or "CNA") is a corporation organized and existing under the laws of the State of Illinois, with its principal place of business and headquarters in Chicago, Illinois. On information and belief, Continental is an insurance company licensed to sell insurance in the State of Oklahoma and does business under the name CNA. JURISDICTION AND VENUE 3. This declaratory judgment action arises out of an actual and present

dispute and controversy that exceeds $75,000 in damages, exclusive of interest and costs. Further, there is complete diversity of citizenship between Ocean Dental and CNA, and therefore this Court has jurisdiction over this matter pursuant to 28 U.S.C. 2201 and 1332(A)(1). Moreover, the Court has additional supplemental jurisdiction over this

matter pursuant to 28 U.S.C. 1367. 4. Venue is proper in this Court pursuant to 28 U.S.C. 1391. FACTUAL ALLEGATIONS 5. Ocean Dental operates several dental clinics throughout Oklahoma.

One such clinic is located at I-240 and Pennsylvania Avenue in South Oklahoma City. 6. Plaintiff Fortress Insurance Company ("Fortress") issued a policy

of insurance to Ocean Dental with a policy period of October 22, 2010 through October 22, 2011, Policy No. 91214 (the "Fortress Policy"). The Fortress Policy is a "claims made" policy.

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7.

CNA issued a policy of insurance to Ocean Dental, Policy No.

DNC 428120750, with a policy period of October 22, 2011 through October 22, 2012 (the "CNA Policy"). Like the Fortress Policy, the CNA Policy is a claims made policy. 8. On or about March 16, 2011, a class action petition was filed in the

Oklahoma County District Court against Ocean Dental and an individual dentist, Dr. Robin Lockwood. The case, Anglar Robinson et al. v Ocean Dental, P.C. et al., Case No. CJ-2011-1791, is referred to as the "Underlying Class Action". The plaintiffs in the Underlying Class Action are hereinafter referred to as the Class Action Plaintiffs. 9. The Underlying Class Action alleges various claims against Ocean

Dental and Dr. Lockwood arising from alleged dental malpractice committed by Dr. Lockwood and for which Ocean Dental is allegedly vicariously liable. At the present time, the Underlying Class Action includes claims for dental malpractice, intentional or negligent infliction of emotional distress and fraud. The Underlying Class Action seeks damages in excess of $75,000 and also seeks punitive damages. Other claims originally alleged in the Underlying Class Action for civil conspiracy, violation of the Oklahoma Consumer Protection Act, and assault and battery were dismissed on summary judgment on January 3, 2013. 10. The Underlying Class Action was brought as a class action seeking

damages for dental malpractice and other claims against Ocean Dental not only for the named plaintiff (on behalf of her two children), but also for: "any client and/or the parents/guardians of any child who received medically unnecessary or excessive treatment at the Ocean Dental, I-240 location in Moore, Oklahoma." See Exhibit 1,
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Petition, 7. A motion to certify the class was denied without prejudice on or about July 6, 2012. 11. Upon the filing of the Underlying Class Action, Ocean Dental

immediately reported the lawsuit to Fortress. Fortress appointed counsel to defend Ocean Dental against the claims in the Underlying Class Action, but did so under a reservation of rights as to certain claims. 12. On or about December 6, 2011, Ocean Dental received a request

from Class Action Plaintiffs' counsel in the Underlying Class Action for the medical records of 31 additional members of the proposed/putative class. Ocean Dental

immediately provided notice of these requests to Fortress, who again appointed counsel to defend Ocean Dental with respect to these additional requests under a reservation of rights. 13. Ocean Dental also immediately reported these 31 requests to CNA.

At the present time, other than the separate Underlying Class Action, no actual lawsuits or petitions have been filed by Class Action Plaintiffs' counsel on behalf of these 31 patients whose records were requested. Class Action Plaintiffs' counsel in the Underlying Class Action retains the ability to seek certification of a class. 14. CNA initially accepted the defense of Ocean Dental, under a

reservation of rights, and appointed counsel to defend Ocean Dental with respect to these 31 specific patient requests. CNA agreed to share the costs of the counsel previously appointed by Fortress.

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15.

However, on or about March 5, 2012, CNA denied any further

obligation to either defend or indemnify Ocean Dental based on purported exclusions in the CNA policy. In sum, CNA claimed that because of the class allegations in the Underlying Class Action, Ocean Dental had knowledge of a "claim" prior to the inception of the CNA Policy and therefore there was no coverage. Specifically, CNA contended that there was no coverage for the class member claims because as of "the inception date of this policy, [Ocean Dental] knew or had been told that it would result in a claim." CNA has provided no defense or indemnity to Ocean Dental since March 5, 2012. 16. On or about April 4, 2013, Fortress filed the initial complaint in the

present case seeking a declaration of its obligations under the Fortress Policy. Fortress claims that the allegations in the Underlying Class Action were not sufficient to constitute a "claim" under the Fortress Policy for any unnamed class members. (Complaint, 22). 17. On or about April 26, 2013, Class Action Plaintiffs' counsel in the

Underlying Class Action sent a request for the patient records of an additional 7 patients who are also members of the class alleged in the Underlying Class Action. These requests have been reported to Fortress and to CNA through Ocean Dental's insurance broker. Fortress has agreed to defend Ocean Dental under a reservation of rights, but asserts that there is no coverage under the Fortress Policy for the same reasons set forth in its original complaint in this case and for the same reason that it denied coverage with respect to the 31 patient records requested in December 2011, discussed above. CNA has not yet responded to the reporting of these claims.
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DECLARATORY RELIEF REQUESTED 18. An actual justiciable controversy has arisen and now exists between

and among the parties regarding the rights and obligations of CNA to provide a defense and indemnity for the claims in the Underlying Class Action or for any judgment that may be rendered against Ocean Dental in the Underlying Class Action. 19. As set forth above, in the original complaint in this case, Fortress

has taken the position that the claims of unnamed members of the class (including the 31 specific patients whose records were requested in December 2011 and the 7 specific patients whose records were requested in April 2013) are not covered by the Fortress Policy because they do not constitute a "claim" as defined in the Fortress Policy. The Fortress Policy defines a "claim" to include, in part, "an incident of bodily injury that [Ocean Dental] reasonably believes may result in a demand for money or services as compensation, which is reported to us." Fortress claims that the information reported by Ocean Dental and its appointed counsel, James Secrest, prior to the expiration of the Fortress Policy was not sufficient to constitute a "claim" except with respect to the named plaintiffs in the Underlying Class Action. Ocean Dental reported all information of which it knew or was reasonably aware regarding the potential claims set forth in the Underlying Class Action prior to the expiration of the Fortress Policy. 20. CNA, on the other hand, contends that there is no coverage under

the CNA Policy because Ocean Dental had sufficient knowledge of a "claim" as of the inception date of the CNA policy. CNA relies, in part, on a nearly identical definition of

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"claim" in the CNA Policy which includes not only a demand for money or services, but also any "dental incident" which "might result in a claim." 21. Accordingly, Fortress and CNA have both asserted diametrically

opposed positions with respect to the proper definition of "claim" and whether the claims of unnamed class members in the Underlying Class Action were known and reported by Ocean Dental during the Fortress Policy or the CNA Policy. In sum, Fortress asserts that only the named plaintiff's causes of action constitute "claims" made during the Fortress Policy. CNA asserts, on the other hand, that any claim of any potential class member constitutes a "claim" that existed and was made prior to the inception date of the CNA Policy. 22. In light of the fact that there is no gap in coverage between the two

insurance policies at issue, then either Fortress owes a duty to defend and indemnify for the claims of unnamed class members or CNA does. There is no set of facts under which both Fortress and CNA can avoid defense and indemnity obligations for the claims of unnamed class members in the Underlying Class Action. Accordingly, either the facts reported to Fortress prior to the expiration of the Fortress Policy constitute a "claim" for the unnamed class members (including the 31 specific patients whose records were requested in December 2011 and the 7 specific patients whose records were requested in April 2013) in which case Fortress has both an obligation to defend and indemnify Ocean Dental for those claims, or, those facts reported do not constitute a "claim" and therefore CNA cannot avoid its defense and indemnity obligations with respect to Ocean Dental by

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asserting that Ocean Dental had prior knowledge of a "claim" as of the inception date of the CNA Policy. 23. In light of Fortress' Complaint for Declaratory Relief on file and the

previous coverage position taken by CNA, Ocean Dental has no adequate remedy at law and will suffer immediate and irreparable harm unless and until a final determination and declaration of these issues is made. WHEREFORE, Ocean Dental respectfully requests that this Court enter a declaratory judgment as follows: (a) That, if Fortress is successful in its original complaint in this case that the claims of unnamed members of the class pled in the Underlying Class Action do not constitute a "claim" under the Fortress Policy, that under the nearly identical definition of "claim" in the CNA Policy, Ocean Dental did not have knowledge of any "claim" as of the inception date of the CNA Policy; and (b) That, if Fortress is successful in its original complaint in this case that the claims of unnamed members of the class pled in the Underlying Class Action do not constitute a "claim" under the Fortress Policy, that CNA has both defense and indemnity obligations for the 31 patients whose records were requested in December 2011 and the 7 additional patients whose records were requested in April 2013.

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(c) For such other relief as the Court deems just and proper.

Dated: May 28, 2013

Respectfully submitted, s/Thomas B. Snyder Thomas B. Snyder, OBA #31428 Jessica L. Perry, OBA #22681 CROWE & DUNLEVY, P.C. 20 North Broadway, Suite 1800 Oklahoma City, OK 73102-8273 (405) 235-6609 (405) 272-5293 (Facsimile) thomas.snyder@crowedunlevy.com jessica.perry@crowedunlevy.com ATTORNEYS FOR DEFENDANT OCEAN DENTAL, P.C.

CERTIFICATE OF SERVICE I hereby certify that on this 28th day of May, 2013, I electronically transmitted the foregoing document to the Clerk of Court using the ECF System for filing and transmittal of a Notice of Electronic Filing to the following ECF registrants: Christian Huckaby CHuckaby@HallEstill.com ATTORNEY FOR PLAINTIFF/COUNTER-DEFENDANT Seth Day sday@HallEstill.com ATTORNEY FOR PLAINTIFF/COUNTER-DEFENDANT

s/ Thomas B. Snyder Thomas B. Snyder