The Tenth Circuit Court of Appeals published its opinion in Yousuf v. Cohlmia on Tuesday, January 21, 2014.
Dr. Ashard Yousuf sued Dr. George Cohlmia and Cardiovascular Surgical Specialists Corporation (CVSS) in Oklahoma state court for defamation, tortious interference with business relations/contract, intentional infliction of emotional distress/outrage, negligence, and breach of contract. Dr. Yousuf alleged that Dr. Cohlmia made a series of false statements to local media disparaging Dr. Yousuf’s professional reputation. Dr. Cohlmia denied that the statements he made were false.
CVSS held a professional liability policy with Physicians Liability Insurance Company (PLICO) and two identical general commercial liability policies with American National Property and Casualty Company (ANPAC) (one for each business location), each of which covered Dr. Cohlmia as an additional insured. Dr. Cohlmia demanded that both insurers provide for his defense, pursuant to their respective policies. PLICO agreed to defend the lawsuit under a reservation of rights and requested ANPAC to share in the defense. ANPAC refused, contending its policy did not cover the alleged wrongdoing and that it owed no duty to defend. ANPAC further claimed that even if it erred in refusing to defend Dr. Cohlmia, PLICO had no right to indemnification or contribution for the defense costs it incurred.
After various state proceedings, PLICO sought to recover its defense costs in federal district court. The court concluded the defense costs should be evenly divided between the insurers and granted summary judgment for PLICO. Once summary judgment for PLICO was granted, PLICO and ANPAC negotiated an agreement, stipulating that ANPAC’s portion was $206,698.78. PLICO then moved for prejudgment interest in the amount of $149,110.57, contending that the district court was required to include prejudgment interest of fifteen percent per year from the date of the judgment pursuant to title 36, section 3629(B) of the Oklahoma Statutes. The court denied prejudgment interest.
ANPAC appealed from the district court’s grant of summary judgment in favor of PLICO. PLICO cross-appealed the district court’s denial of its motion for prejudgment interest. The Tenth Circuit applied Oklahoma law in interpreting the insurance policies at issue and concluding ANPAC breached its duty to defend Dr. Cohlmia.
The court concluded that the provision in ANPAC’s policy providing coverage for “personal injury” resulting from “the publication or utterances of a libel or slander or of other defamatory or disparaging material” was broad enough to encompass the tort of intentional interference with business relations. It rejected ANPAC’s contention that such an interpretation is against public policy because it extends coverage to include intentional wrongdoing.
The court affirmed the district court’s grant of summary judgment requiring ANPAC to reimburse PLICO for one-half of its defense costs.
In response to PLICO’s cross-appeal on the district court’s failure to award prejudgment interest, ANPAC argued the district court was correct in concluding that prejudgment interest was barred under the Tenth Circuit’s decision in Regional Air because PLICO prevailed on a summary judgment rather than a jury verdict, and also because prejudgment interest is unavailable in Oklahoma where the damages are not certain, liquidated, or reasonably ascertainable. The Tenth Circuit overruled Regional Air on its interpretation of the Oklahoma statute providing for prejudgment interest. It held that PLICO’s claim for prejudgment interest was not defeated simply because the judgment was entered pursuant to summary judgment rather than a jury verdict. It did affirm the district court’s denial because the attorney fees were not liquidated under Oklahoma law as they were subject to a reasonableness determination.