MEDICAL ASSURANCE OF WEST VIRGINIA, INCORPORATED, a West Virginia Corporation v. United States of America

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 06-1156
MEDICAL ASSURANCE OF WEST VIRGINIA,
INCORPORATED, a West Virginia Corporation,
Plaintiff - Appellant,
versus
UNITED STATES OF AMERICA,
Defendant - Appellee.
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WEST VIRGINIA MUTUAL INSURANCE COMPANY,
INCORPORATED,
Amicus Supporting Appellant.
No. 06-1494
MEDICAL ASSURANCE OF WEST VIRGINIA,
INCORPORATED, a West Virginia Corporation,
Plaintiff - Appellant,
versus
UNITED STATES OF AMERICA,
Defendant - Appellee.
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WEST VIRGINIA MUTUAL INSURANCE COMPANY,
INCORPORATED,
Amicus Supporting Appellant.
Appeals from the United States District Court for the Southern
District of West Virginia, at Charleston. Joseph Robert Goodwin,
District Judge. (2:04-cv-0432)
Argued: January 30, 2007 Decided: April 24, 2007
Before WILKINS, Chief Judge, and NIEMEYER and MICHAEL, Circuit
Judges.
Reversed by unpublished per curiam opinion.
ARGUED: Douglas Warren Baruch, FRIED, FRANK, HARRIS, SHRIVER &
JACOBSON, L.L.P., Washington, D.C., for Appellant. Lawrence Eiser,
UNITED STATES DEPARTMENT OF JUSTICE, Torts Branch, Civil Division,
Washington, D.C., for Appellee. ON BRIEF: Eugene N. Hansen, FRIED,
FRANK, HARRIS, SHRIVER & JACOBSON, L.L.P., Washington, D.C., for
Appellant. Peter D. Keisler, Assistant Attorney General, Roger D.
Einerson, Assistant Director, UNITED STATES DEPARTMENT OF JUSTICE,
Torts Branch, Civil Division, Washington, D.C., for Appellee.
Michael J. Farrell, Charlotte A. Hoffman, Robert L. Hogan, FARRELL,
FARRELL & FARRELL, P.L.L.C., Huntington, West Virginia, for West
Virginia Mutual Insurance Company, Incorporated, Amicus Supporting
Appellant.
Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:
Medical Assurance of West Virginia, Inc. (MAWV) brought
a declaratory judgment action in federal court against the United
States, the subrogee of MAWV’s insured, Dr. Prakob Srichai, to
establish that it has no obligation to pay a medical malpractice
claim against the doctor. The case went to trial, and MAWV
contended that Dr. Srichai had breached the terms of his insurance
policy by failing to notify MAWV of the claim “as soon as
practicable.” The jury returned a verdict in favor of the United
States and against MAWV. The district court denied MAWV’s motion
for judgment as a matter of law and awarded attorney’s fees to the
United States as Dr. Srichai’s subrogee. We conclude that because
MAWV received no notice of the claim until four years after Dr.
Srichai first became aware of it, and Dr. Srichai offered no
reasonable explanation for the delay, the jury had no basis for
excusing Dr. Srichai’s breach of the policy’s notification
provision. MAWV was thus entitled to judgment as a matter of law.
The underlying medical malpractice claim arose from an
automobile accident caused by Terry Hoosier, one of Dr. Srichai’s
patients. At the time, Dr. Srichai was employed by the Community
Health Foundation of Man (CHF), a federally funded clinic covered
by the Federal Tort Claims Act (FTCA), 42 U.S.C. § 233. The
representative of the accident victims, Gorman Osbourne, sued
Hoosier in West Virginia state court. Osbourne also initiated an

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administrative proceeding with the United States Department of
Health and Human Services against Dr. Srichai and CHF in March
1999. Osbourne alleged that the accident occurred while Hoosier
was under the influence of drugs negligently prescribed by Dr.
Srichai. After Osborne exhausted the administrative process, he
was permitted to add Dr. Srichai and CHF as defendants in the suit
against Hoosier. Because Dr. Srichai and CHF qualified as federal
employees, the United States intervened in the suit, removed the
case to federal court, and had itself substituted for Dr. Srichai
as a defendant in accordance with the FTCA. In October 2002 the
parties settled the case with an agreement by the United States to
pay the plaintiffs $3.9 million.
The United States subsequently discovered that Dr.
Srichai held a $1 million private insurance policy with MAWV that
covered the malpractice incident. In June 2003 the United States
sent a letter to MAWV “making a subrogation demand in the amount of
$916,667" under the policy. MAWV refused to pay, claiming that Dr.
Srichai had breached the policy by failing to comply with the
requirement that the insured notify the company of covered claims
“as soon as practicable.” Prior to the United States’s letter,
MAWV had no notice of the malpractice claim against Dr. Srichai.
The United States argues that the delay does not bar
coverage because the United States mistakenly believed that the
policy had expired and Dr. Srichai may have been under the

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impression that the policy covered only surgical treatment. MAWV
argues that these explanations are insufficient as a matter of law.
We review de novo a district court’s denial of a motion for
judgment as a matter of law. ABT Bldg. Prods. Corp. v. Nat’l Union
Fire Ins. Co. of Pittsburgh, 472 F.3d 99, 113 (4th Cir. 2006). We
must assess whether the evidence, when viewed in the light most
favorable to the prevailing party, is sufficient for a reasonable
jury to find in that party’s favor. Id.
Under West Virginia law a violation of an insurance
policy’s notice provision does not always bar a claim against the
insurer. If the insured offers a reasonable explanation for the
delay, “the burden shifts to the insurance company to show that the
delay in notification prejudiced [its] investigation and defense of
the claim.” Dairyland Ins. Co. v. Voshel, 428 S.E. 2d 542, 546 (W.
Va. 1993). The reasonableness of a delay is generally a question
of fact. Colonial Ins. Co. v. Barrett, 542 S.E. 2d 869, 875 (W.
Va. 2000). However, when the insured offers no explanation, the
delay is considered unreasonable as a matter of law. See Ragland
v. Nationwide Mut. Ins. Co., 120 S.E. 2d 482, 490-91 (W. Va. 1961).
Dr. Srichai’s insurance policy requires him to notify
MAWV of any claim or potential claim “as soon as practicable” to
guarantee coverage. Dr. Srichai first had notice of a potential
malpractice claim when Osbourne commenced administrative
proceedings against him in 1999. However, MAWV did not receive

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notice of the claim until the United States demanded payment under
the policy (as Dr. Srichai’s subrogee) four years after the
proceedings against Dr. Srichai began. Under the policy Dr.
Srichai had a duty to report the claim to MAWV throughout this
period. Thus, we consider only whether a reasonable explanation
has been offered for his failure to notify MAWV as soon as he
became aware of the malpractice claim.
The United States attempts to explain Dr. Srichai’s
failure to notify MAWV by asserting that he mistakenly believed the
policy covered only his surgical practice. Although the policy
plainly covers all “medical incidents,” the United States points to
two letters to claim that Dr. Srichai was under the mistaken
impression that the policy did not cover the claim. The first
letter, from CHF’s insurance agent to MAWV, seeks to add CHF to Dr.
Srichai’s policy as an additional insured “because he is a general
surgeon and his specialty does not meet the federal guidelines” for
FTCA coverage. This may suggest some confusion on the part of CHF,
but it does not show that Dr. Srichai thought the policy was
limited to his surgical practice. The second letter, from CHF to
the federal officials handling the administrative claim, states
that the policy “was purchased to insure the surgical practice of
[Dr. Srichai].” Again, however, Dr. Srichai neither drafted the
letter nor is there any indication that he received a copy. Thus,
neither letter shows that Dr. Srichai had been mistaken or deceived

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as to the scope of the policy, and a jury could not reasonably
conclude that he had a valid reason for his failure to notify MAWV.
An unexplained, four-year delay in notice is unreasonable as a
matter of law. See Ragland, 120 S.E. 2d at 490-91 (unexplained
delay of more than five months unreasonable as a matter of law).
The district court thus erred in denying MAWV’s motion for judgment
as a matter of law. Similarly, because MAWV did not erroneously
disclaim liability under the policy, the United States is not
entitled to the award of attorney’s fees granted by the district
court. See Hayseeds, Inc. v. State Farm Fire & Cas., 352 S.E. 2d
73, 80 (W. Va. 1986).
The judgment entered in favor of the United States and
the order awarding attorney’s fees to the United States are
REVERSED.

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