Jorge I. Calzada, M.D. v. State Volunteer Mutual Insurance Company

11/18/2021
IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
August 18, 2021 Session

JORGE I. CALZADA, M.D. v. STATE VOLUNTEER MUTUAL
INSURANCE COMPANY

Appeal from the Chancery Court for Williamson County
No. 49527J Deanna B. Johnson, Judge
___________________________________

No. M2020-01697-COA-R3-CV
___________________________________

A doctor’s professional liability insurer refused to insure him against claims brought
against him by his former partners and investigations of him being conducted by state and
federal agencies. The trial court found that the insurer was not required to provide coverage
for the doctor against the claims or the investigations. For the reasons that follow, we vacate
the trial court’s judgment and remand for proceedings consistent with this Opinion.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Vacated
and Remanded

J. STEVEN STAFFORD, P.J., W.S., delivered the opinion of the court, in which ANDY D.
BENNETT and ARNOLD B. GOLDIN, JJ., joined.

John W. Peterson and Michael A. Malone, Nashville, Tennessee, and Jonathan Grant
Brinson (pro hac vice), Phoenix, Arizona, for the appellant, Jorge I. Calzada, M.D.

L. Webb Campbell, II and Lauren Z. Curry, Nashville, Tennessee, for the appellee, State
Volunteer Mutual Insurance Company.

OPINION

I. FACTUAL AND PROCEDURAL HISTORY

Jorge I. Calzada, M.D., (“Appellant”) is a retinal surgeon who was formerly a
shareholder of Charles Retina Institute, P.C. (“CRI”), along with Dr. Steven Charles and
Dr. Stephen Huddleston. State Volunteer Mutual Insurance Company (“Appellee”) has
been Appellant’s medical professional liability insurer since he began his medical practice
in Tennessee in 2006. Two insurance policies that ran consecutively are discussed by the
parties in this case. Because the terms and conditions of the two policies are the same for
the most part, the parties refer to them collectively as “the Policy,” as will this Opinion.
Specific portions of the Policy will be discussed as they become relevant in the Discussion
section below.

Appellant filed a complaint against CRI, Dr. Charles, and Dr. Huddleston (as well
as two LLCs not involved in this appeal) (together, the “CRI Defendants”) in Shelby
County Circuit Court, alleging, inter alia, fraud, breach of fiduciary duties, and tortious
interference. The CRI Defendants filed counterclaims against Appellant. Appellant filed
an amended complaint, and the CRI Defendants filed amended counterclaims (“the
counterclaims”),1 which included seven counts. The two counts at issue in this appeal are
Counts V and VI, as stated below:

V[.] Intentional and negligent damage to reputation

82. Defendants repeat their allegations in 1-82 above.

83. Dr. Charles is a world-renown retinal surgeon. He has performed
surgeries in 25 countries. He has lectured in 51 countries. He has
written a textbook for retinal ophthalmologists which is in five
editions and six languages. He has created over 100 patents that have
generated sales of medical devices in excess of $7 billion worldwide.
He saves people’s eyesight without regard to ability to pay. He is
known as a compassionate genius.

84. Dr. Charles was the sole owner of CRI for many years. [Appellant]
was the first co-shareholder Dr. Charles ever admitted.

85. [Appellant] was one of two shareholders, one of two directors, and
President of CRI. He was a highly visible representative of CRI.

86. [Appellant] committed serious billing fraud.

87. [Appellant] had inappropriate sexual relations with women he was
teaching and evaluating and with women in subordinate employment
positions.

88. [Appellant’s] many “protocol deviations” caused a
pharmaceutical company to suspend CRI and commence an audit,
which could result in the FDA publicly sanctioning CRI for
incompetence.

1
The parties agree that the amended counterclaims superseded the original counterclaims.
-2-
 89. [Appellant’s] intentionally-wrong and negligently-wrong conduct
has damaged CRI’s pristine reputation for world-class excellence.

90. The amount of damages will be proven at trial.

VI[.] Indemnification for malpractice and improper billing.

91. Defendants repeat their allegations in 1-91 above.

92. Since February 6, 2019, Defendants have discovered multiple
instances in which [Appellant] appears to have committed medical
malpractice before the termination of his employment, often with
infant victims.

93. Infant victims effectively have a three-year statute of limitations
in Tennessee and a 21-year statute of limitations in Mississippi.

94. CRI is at risk of being liable for some of this malpractice.

95. CRI is entitled to a judgment that it is entitled to indemnification
by [Appellant] if it is held liable for medical malpractice committed
by [Appellant].

96. Since February 6, 2019, Defendants have discovered multiple
instances in which [Appellant] appears to have committed billing
fraud when he performed services for [Hamilton Eye Institute] and
Rayner Clinic.

97. If it turns out that [Appellant] committed billing fraud for services
performed as an employee of CRI, or if his billing fraud for others
results in CRI having to repay any money it collected, then CRI is
entitled to a judgment that it is entitled to indemnification by
[Appellant].

The “Prayer for Relief” at the end of the counterclaims states, in relevant
part:

WHEREFORE, PREMISES CONSIDERED, the Defendants
respectfully pray and request the Court to:

* * *

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 5. Rule that Defendant CRI is entitled to damages, regarding
Counterclaim V, in an amount to be proven at trial.

6. Rule that Defendant CRI is entitled to damages, regarding
Counterclaim VI, in an amount as of May 31, 2019 to be proven at
trial.

Appellant answered the counterclaims and filed a motion to dismiss some of them.2
Appellant tendered defense of the counterclaims to Appellee. Appellant also sought
supplementary benefits from Appellee under a separate provision of the Policy for
investigations of him by the Tennessee Board of Medical Examiners, the Mississippi Board
of Medical Licensure, and the Centers for Medicare & Medicaid Services (“CMS”)3
(collectively, “the investigations”). The Tennessee and Mississippi investigations were
initiated from statements by the CRI Defendants to the investigating bodies. The specifics
of the investigations will be discussed infra. Appellee denied the requested coverage of
both the counterclaims and the Tennessee and Mississippi investigations. Appellant filed a
complaint against Appellee in the instant action, which was ultimately transferred by
agreement of the parties to the Chancery Court of Williamson County (“the trial court”).
Therein, Appellant alleged claims against Appellee of breach of contract, breach of the
duty of good faith and fair dealing, and punitive damages. Appellant also sought a
declaratory judgment that Appellee was required to provide the requested coverage.
Appellant filed a motion for judgment on the pleadings and Appellee filed a motion for
summary judgment. After a hearing in October 2020, the trial court granted Appellee’s
motion for summary judgment in an order entered November 23, 2020, concluding, inter
alia:

I. Coverage
* * *
No specific person was identified as being the victim of [Appellant’s] alleged
possible medical malpractice.
* * *

2
Appellee attaches an exhibit to its brief to support its averment that Count V was voluntarily
dismissed. Appellee asserts, without citation to any authority, that we can take judicial notice of this “public
record.” We cannot consider attachments to briefs, and therefore we will not consider the exhibit. See
Carney v. State, No. M2006-01740-CCA-R3-CO, 2007 WL 3038011, at *4 (Tenn. Crim. App. Oct. 17,
2007) (stating that “documents attached to an appellate brief but not included in the record on appeal cannot
be considered by this court as part of the record on appeal”) (internal citation omitted). And while it appears
that Appellant agrees that the claim was voluntarily “withdraw[n]” without prejudice, the parties do not
argue or explain the dismissal’s significance, so we will not address it. Moreover, it appears that the
dismissal or withdrawal of Count V occurred after the trial court entered its final judgment in this case.
There is a procedure for when a party wishes to bring to this Court’s attention such post-judgment facts.
See Tenn. R. App. P. 14(b). Despite this recourse being available, Appellee chose not to pursue it.
3
As will be discussed infra, Appellant sought coverage with respect to the CMS investigation later
on in the trial court proceedings, after Appellee filed its motion for summary judgment.
-4-
For the[] counter-claims to be covered under the insurance policy, they must
involve a “medical incident.” The counter-claims do not involve a “medical
incident.” Instead, they involve claims arising from [Appellant’s] business
and employment disputes with his former employer and former business
partners/shareholders. The closest [Appellant] can come to pointing to a
“medical incident” is the allegations by the counter-claimants that
[Appellant] “appears to have committed medical malpractice before the
termination of his employment, often with infant victims” and that
[Appellant] committed serious protocol deviations in the clinical trials that
resulted in “bad surgical outcomes.” However, even these claims are not
sufficient to trigger coverage. These claims are vague and do not allege a
specific victim of medical malpractice.

II. Exclusions

The types of claims made by the counter-claimants in the Shelby
County Shareholders Lawsuit are specifically excluded from coverage by the
Policy because [Appellant] would only be liable for those claims in his
capacity as a member, partner, officer, proprietor, owner, or shareholder of
CRI. Such liability is specifically excluded from the Policy. Also, pursuant
to the Policy, coverage does not apply to liability assumed by [Appellant]
under a contract or agreement, except a professional services contract. The
Policy also excludes intentional acts, which are alleged in the counter-claims.
The Policy excludes acts which would violate any statute, ordinance, law,
rule, or regulation as well. Finally, the Policy excludes coverage for sexual
conduct.

III. Supplementary Benefits

In his Complaint in this Court, [Appellant] has requested that
[Appellee] reimburse him for the costs he has and/or will incur in defending
himself in the licensure investigations brought by Tennessee and Mississippi.
These investigations were initiated by statements made by the [CRI
Defendants] to the respective licensure boards. However, [Appellee] has
demonstrated that the Policy “does not afford coverage or legal expense
benefit for licensure investigations.” Pursuant to Part IV, Section 14 of the
Policy, supplementary payments only extend to ten specific types of
investigations. Investigations of physicians by state medical licensure boards
is not one of the types of investigations listed.

IV. Conclusion

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 The Court finds that [Appellee] is entitled to summary judgment on
all of [Appellant’s] claims. The allegations made via the counter-claims. . .
are not covered under [Appellant’s] insurance policy with [Appellee]. In
addition, the claims made in that lawsuit are specifically excluded from
coverage from the Policy. Finally, the supplementary benefits [Appellant]
seeks in this Court are not available under the Policy. Accordingly, the
motion for summary judgment is GRANTED and this case is hereby
dismissed.

(internal citations omitted).

In a subsequent order entered on December 2, 2020, the trial court denied
Appellant’s motion for judgment on the pleadings, finding that it was rendered moot by
the prior grant of summary judgment.4 Appellant appealed.

II. ISSUES PRESENTED

The dispositive issues in this case are whether Appellee has a duty (1) to defend
Appellant against the counterclaims and (2) to provide supplementary benefits to Appellant
for the investigations. With respect to the first issue, the parties disagree over whether (a)
the counterclaims involve “damages resulting from a medical incident” under the Policy;
(b) any of the Policy’s exclusions apply to bar coverage; and (c) Appellant complied with
the Policy’s notice provisions. With respect to the second issue, the parties disagree over
whether (a) the investigations are “covered investigations” under the Policy; and (b) the
acts giving rise to the investigations and the request for coverage of the investigations meet
the necessary timing requirements.

III. STANDARD OF REVIEW

“[A] trial court’s decision to grant [a] motion[] for summary judgment is not
entitled to a presumption of correctness on appeal.” Standard Fire Ins. Co. v. Chester
O’Donley & Assocs., Inc., 972 S.W.2d 1, 6 (Tenn. Ct. App. 1998) (citations omitted).
Consequently, we “must make a fresh determination of whether the requirements of Rule
56 of the Tennessee Rules of Civil Procedure have been satisfied.” Bowers v. Estate of
Mounger, 542 S.W.3d 470, 477 (Tenn. Ct. App. 2017) (quoting Rye v. Women’s Care Ctr.
of Memphis, MPLLC, 477 S.W.3d 235, 250 (Tenn. 2015)). “Summary judgment is proper
where ‘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.’” Lemon v.
Williamson Cty. Sch., 618 S.W.3d 1, 12 (Tenn. 2021) (quoting Tenn. R. Civ. P. 56.04). In

4
Appellant does not appeal the trial court’s denial of his motion for judgment on the pleadings, so
we will not address it.
-6-
reviewing a summary judgment motion on appeal, “we are required to review the evidence
in the light most favorable to the nonmoving party and to draw all reasonable inferences
favoring the nonmoving party.” Shaw v. Metro. Gov’t of Nashville & Davidson Cty., 596
S.W.3d 726, 733 (Tenn. Ct. App. 2019) (citations and quotations omitted).

IV. DISCUSSION

Unfortunately, our ability to reach the merits of the issues the parties raise is
hindered by the inadequacies of the trial court’s order. Rule 56.04 of the Tennessee Rules
of Civil Procedure states that “[a] trial court shall state the legal grounds upon which the
court denies or grants the motion [for summary judgment], which shall be included in the
order reflecting the court’s order.” In Smith v. UHS of Lakeside, Inc., 439 S.W.3d 303
(Tenn. 2014), the Tennessee Supreme Court directed appellate courts to evaluate summary
judgment orders to ensure that two requirements are met: (1) that the trial court adequately
explains its ruling; and (2) that the ruling is “the product of the trial court’s independent
judgment.” Id. at 314. If those requirements are not met, an appellate court may vacate the
trial court’s order granting summary judgment and remand the case for entry of an order
that complies with Lakeside and Rule 56.04, rather than conduct “an archeological dig [to]
endeavor to reconstruct the probable basis for the [trial] court’s decision[.]” Lakeside, 439
S.W.3d at 314, 318 (quoting Church v. Perales, 39 S.W.3d 149, 157 (Tenn. Ct. App.
2000)); cf. Winn v. Welch Farm, LLC, No. M2009-01595-COA-R3-CV, 2010 WL
2265451, at *6 (Tenn. Ct. App. June 4, 2010) (“We cannot proceed with a review,
speculating on the legal theories upon which the trial court may have ruled and the legal
conclusions the trial court may have made.”). Thus, in considering “a trial court’s
compliance or lack of compliance with [Rule] 56.04,” we are to consider “the fundamental
importance” of the two mandatory requirements set forth above. Id. at 314.

Several courts have been called on to apply the holding in Lakeside. Many cases
involve orders in which there is doubt that the order was the product of the trial court’s
independent judgment, particularly where one party is directed to prepare an order in the
absence of a detailed oral ruling.5 See, e.g., Deberry v. Cumberland Elec. Membership
Corp., No. M2017-02399-COA-R3-CV, 2018 WL 4961527, at *2 (Tenn. Ct. App. Oct. 15,
2018); Battery All., Inc. v. Allegiant Power, LLC, No. W2015-02389-COA-R3-CV, 2017
WL 401349, at *8 (Tenn. Ct. App. Jan. 30, 2017); McEarl v. City of Brownsville, No.
W2015-00077-COA-R3-CV, 2015 WL 6773544, at *3 (Tenn. Ct. App. Nov. 6, 2015). Less
common, however, is the scenario where the trial court’s order is the product of its
independent judgment, but contains little explanation of the trial court’s legal reasoning—
in other words, the trial court’s order is not “adequately explained.” Lakeside, 439 S.W.3d
at 318. In some of these cases, the trial court gave little to no explanation in its order beyond
the determination that summary judgment was warranted. See, e.g., Bertuccelli v.
Haehner, No. E2017-02068-COA-R3-CV, 2018 WL 6199229, at *4 (Tenn. Ct. App. Nov.

5
It is entirely unclear from the record if the order at issue was prepared by a party.
-7-
28, 2018); Ray v. Petro, No. M2013-02694-COA-R3-CV, 2015 WL 137309, at *5 (Tenn.
Ct. App. Jan. 9, 2015).

In other cases, however, the trial courts entered orders containing some basis for the
ruling, but the ruling was nevertheless held insufficient because it was not adequately
explained. One such case is Shaw v. Gross, No. W2017-00441-COA-R3-CV, 2018 WL
801536 (Tenn. Ct. App. Feb. 9, 2018). In Shaw, one issue on appeal was the trial court’s
ruling that the plaintiff failed to comply with certain pre-suit notice requirements contained
in the Tennessee Health Care Liability Act, Tennessee Code Annotated section 29-26-
121(a)(3)(B). The trial court’s order granting summary judgment to the defendants ruled
that the notice letters were not timely mailed or were not mailed pursuant to the
requirements of section 29-26-121(a)(3). The trial court therefore ruled that the plaintiff
was not entitled to rely on the extension to the statute of limitations; as a result, the
complaint was untimely. Id. at *8.

We held, however, that this ruling was deficient. For one, the trial court did not
address the question of substantial compliance, even though compliance with section 29-
26-121(a)(3)(B) “can be achieved through substantial compliance.” Id. at *7, 8 (quoting
Arden v. Kozawa, 466 S.W.3d 758, 764 (Tenn. 2015)). The trial court also did not provide
“specificity as to the deviations that were made with regard to [the two defendants].” Id. at
*8. Finally, the order did not discuss prejudice or whether the defendants received actual
notice. Id. at *9. Importantly, although the notices that were sent were the central issue for
purposes of summary judgment, “the trial court’s written order fail[ed] to mention even a
single address, date, attempted or successful mailing, or defendant specifically. Rather, the
trial court’s order conclude[d] that the notices were not sent properly with no discussion of
the basis for that decision.” Id. at *9. We held that under these circumstances, the trial court
failed to adequately explain its ruling. Id. We therefore vacated the judgment of the trial
court and remanded for entry of an order that adequately explained its decision and applied
the appropriate standard. Id. at *10.

In another case, we likewise took issue with the trial court’s order where it contained
“many factual ‘findings,’ a detailed discussion of the general law surrounding premises
liability, [and] a thorough discussion of the proof presented, but very little discussion of
the trial court’s actual legal reasoning regarding its ultimate conclusion.” Vaughn v. DMC-
Memphis, LLC, No. W2019-00886-COA-R3-CV, 2021 WL 274761, at *11 (Tenn. Ct.
App. Jan. 27, 2021), no perm. app. filed (vacating the grant of summary judgment to the
defendant). Specifically, we held that the trial court had only addressed “the tip of the
iceburg” in determining the central dispute at issue for purposes of summary judgment. Id.

Turning to the case-at-bar, we note that Appellant somewhat raises the issue of
whether the trial court’s order contains sufficient explanations for its findings and
conclusions throughout his appellate brief. Appellee suggests that this issue is both waived
for failure to be designated as an issue and without merit because the trial court’s ruling
-8-
was “thoughtfully considered” and rendered in its independent judgment. We note,
however, that a trial court’s compliance with Rule 56.04 and Lakeside may be raised sua
sponte in this Court, even if neither party specifically designates it as an issue on appeal.
See, e.g., Bertuccelli v. Haehner, No. E2017-02068-COA-R3-CV, 2018 WL 6199229, at
*2, 4 (Tenn. Ct. App. Nov. 28, 2018) (vacating the trial court’s grant of summary judgment
based on a Lakeside violation, where the issue was not specifically raised on appeal);
Koczera v. Steele, No. E2015-02508-COA-R3-CV, 2017 WL 1534962, at *2–3, 7 (Tenn.
Ct. App. Apr. 28, 2017) (same); Potter’s Shopping Ctr., Inc. v. Szekely, 461 S.W.3d 68,
70-72 (Tenn. Ct. App. 2014) (same). Because we conclude that this issue is dispositive of
this appeal, we will consider the adequacy of the trial court’s order with regard to each of
the issues on appeal.

Again, there are two main issues in this case: (1) whether there is a duty to defend
against the counterclaims alleged by the CRI Defendants; and (2) whether the supplemental
policy benefit extends to the investigations. We begin with the question of the
investigations, as it is arguably the most deficient portion of the trial court’s order.

A.

The central question with regard to this issue is whether the Policy’s supplemental
benefit coverage extends to the Tennessee, Mississippi, and CMS investigations. The
Policy provides that Appellee “will pay the following expenses separate from any other
applicable limit of liability,” including:

2.2. reimbursement of legal expenses paid by named insured resulting from
a covered investigation, provided that:

(a) the acts giving rise to the covered investigation occurred on or
after the retroactive date;

(b) the covered investigation is first reported during the policy
period; and

(c) such legal expenses are limited to:

(i) a maximum of $50,000.00 for each named insured for all
covered investigations that are first reported during a policy
period regardless of the number of investigating agencies or
the number of claims brought . . . .[6]

6
The terms in bold appear as such in the Policy.
-9-
The Policy contains ten definitions of the term “covered investigation.” Of the ten
definitions, only two are at issue. Appellant contends that all three investigations are
covered by definition eight, which provides that “covered investigations” include:

an investigation or proceeding commenced by any . . . state or federal
regulatory agency, or by a contractor appointed by such organization or
agency, related to fraud or abuse, violation of reimbursement rules or
regulations, lack of a compliance plan or the presentation of any actual or
allegedly erroneous or false claim(s) for reimbursement for health care
services by named insured[.]

It is also undisputed that the conduct being investigated must have occurred on or after the
Policy’s February 14, 2019 Retroactive Date.

According to Appellant, the investigations all undisputedly involve allegations of
billing fraud or abuse, violations of reimbursement rules and regulations, and false or
erroneous claims for reimbursement. Further, Appellant notes that the investigations are
being conducted by either state or federal regulatory agencies. As a result, Appellant
contends that the investigations are covered under the above definition.

Appellant further contends that the CMS investigation falls within an additional
definition of “covered investigation” as

an investigation or proceeding commenced by any governmental or
regulatory agency charged with the enforcement of laws regulating Medicare
or Medicaid (or other federal or state health care program offered as an
alternative to Medicare or Medicaid) to determine whether named insured
provided professional services improperly to a patient covered by Medicare
or Medicaid (or other federal or state health care program offered as an
alternative to Medicare or Medicaid); . . . .

Finally, Appellant contends that the investigations include conduct that may have occurred
after the February 14, 2019 retroactive date.

Appellee obviously disagrees on all counts. As for the CMS investigation, Appellee
contends that this investigation was not raised properly at trial, as it was first raised in
Appellant’s response to Appellee’s motion for summary judgment. As for the other
investigations, Appellee’s argument is three-fold: (1) the acts that give rise to the
investigations occurred prior to the Policy’s retroactive date; (2) the timing of the requests
is outside the reporting period; and (3) the investigations do not meet any definition of a
“covered investigation,” as state licensure boards are not regulatory agencies “related to
fraud and abuse, violation of reimbursement rules or regulations, lack of a compliance plan
or the presentation of any actual or allegedly erroneous or false claim(s) for reimbursement
- 10 -
for health care services.” Thus, the parties disagree about (1) whether the CMS
investigation was properly raised; (2) whether Appellant met timing requirements
applicable to the investigations; and (3) how the language of the Policy should be construed
as applied to the investigations.

As to the final issue, the parties are engaged in a grammatical disagreement.
Appellant contends that the phrase “related to fraud and abuse, violation of reimbursement
rules or regulations, lack of a compliance plan or the presentation of any actual or allegedly
erroneous or false claim(s) for reimbursement for health care services” modifies “an
investigation or proceeding.” Because all three investigations involve allegations of this
kind, he argues they are covered by the supplemental policy benefit. Appellee, however,
contends that the subject phrase modifies the term “agency,” and that because the
Tennessee and Mississippi investigations are being conducted by licensure agencies, rather
than agencies specifically tasked with investigating fraud and the other named issues, the
Tennessee and Mississippi investigations are not “covered investigations.”

The entirety of the trial court’s legal basis for granting summary judgment as to the
question of covered investigations is as follows:

In his Complaint in this Court, [Appellant] has requested that
[Appellee] reimburse him for the costs he has and/or will incur in defending
himself in the licensure investigations brought by Tennessee and Mississippi.
These investigations were initiated by statements made by the [CRI
Defendants] to the respective licensure boards. However, [Appellee] has
demonstrated that the Policy “does not afford coverage or legal expense
benefit for licensure investigations.” Pursuant to Part IV, Section 14 of the
Policy, supplementary payments only extend to ten specific types of
investigations. Investigations of physicians by state medical licensure boards
is not one of the types of investigations listed.

. . . . Finally, the supplementary benefits [Appellant] seeks in this Court are
not available under the Policy.

Distilled to its essence, the trial court’s ruling amounts to a single sentence conclusion that
investigations performed by licensure boards do not fit within any of the ten definitions of
“covered investigations.” See Shaw, 2018 WL 801536, at *7 (quoting Beard v. Branson,
528 S.W.3d 487, 502 (Tenn. 2017)). The trial court’s ruling, however, provides no
illumination as to how the trial court reached this decision.

First, the trial court’s order does not mention the CMS investigation, but only the
state investigations. Although Appellee contends that this issue was not timely raised, there
can be no dispute that it was put into dispute prior to the summary judgment hearing. The

- 11 -
trial court’s order does not, however, address Appellee’s argument that it was not properly
raised or whether the CMS investigation was a covered investigation.

The trial court’s ruling also wholly fails to address any question of the timeliness of
Appellant’s request or whether the investigated conduct occurred on or after the Policy’s
retroactive date. In the trial court, these were significant areas of dispute among the parties,
particularly as to the question of whether conduct fell on or after the retroactive date;
Appellant even filed the declaration of one of his attorneys in support of his claim that the
Mississippi and Tennessee investigations involved conduct that took place after February
14, 2019.7 The trial court, however, does not address this dispute in its ruling. We recognize
that these issues would be pretermitted by a holding that the investigations are not covered
by the supplemental policy benefit, as the trial court ruled. But the trial court’s order gives
no indication that that is the reason for the omission of any discussion of this issue, leaving
this Court to guess that was its reasoning. This is particularly true given the trial court’s
decision to address whether there was coverage for a “medical incident” with respect to the
counterclaims, despite finding that coverage was nevertheless excluded by a multitude of
exceptions in the Policy, as discussed infra.

Moreover, the trial court’s legal basis for its conclusion that there was no coverage
for the Mississippi and Tennessee investigations is also lacking. Here, there is no dispute
that none of the ten definitions of “covered investigation” expressly applies to
investigations by state and federal “licensure boards.” The trial court’s conclusion that
medical licensure board investigations are not “listed” is therefore largely inapposite to the
dispute at issue. Instead, the parties presented to the trial court detailed and specific
arguments concerning the language of definition eight in particular. Clearly, the trial court
ultimately agreed with Appellee’s position that these investigations were not covered. But
the trial court did not reference definition eight, the language of that definition, or the
arguments of the parties in any fashion in merely holding that such investigations are not
“listed.” In our view, the parties’ dispute “involves questions of law that require analysis
and explanation.” Szekely, 461 S.W.3d at 72. The trial court’s single-sentence conclusion,
however, fails to provide that necessary information. Instead, in the absence of any
explanation whatsoever that is reflective of or responsive to the specific arguments raised
in this case, we are left to guess as to why the trial court reached its conclusion. Thus, we
cannot conclude that the trial court met its high judicial function of adequately explaining
its ruling with regard to the coverage of the investigations under the supplemental policy
benefit.

B.
7
Specifically, attorney Ross Burris stated in a declaration that he has “personally spoken with
individuals from the regulatory agencies involved with respect to the [Mississippi and Tennessee]
Investigations” and “[t]he [Mississippi and Tennessee] Investigations include alleged conduct that took
place after February 14, 2019.”

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 The next issue involves whether Appellee has a duty to defend Appellant against
the counterclaims. This dispute can be divided into three sub-issues: (1) whether the
counterclaims involve “damages resulting from a medical incident”; (2) whether any of the
Policy’s exclusions apply to bar coverage of the counterclaims; and (3) whether Appellant
complied with the Policy’s notice provisions.

As to the first component of this dispute, the Policy provides that Appellee “will
pay, on behalf of insured, all sums that insured becomes legally obligated to pay as
damages resulting from a medical incident . . . .” A few sections down, the Policy further
states that Appellee

shall have the right and duty. . . to defend any lawsuit brought against
insured . . . seeking damages resulting from a medical incident, whether
actual or alleged, and even if the any of the allegations are groundless, false
or fraudulent[.]

Thus, to trigger Appellee’s obligation to defend and insure Appellant, the counterclaims
must first involve a “medical incident,” which the Policy defines as

a single act or omission, or a series of related acts or omissions, by insured
. . . that results, or is likely to result, in damages caused by the rendering of,
or failure to render, professional services [medical services, including
medical treatment, making medical diagnosis, and rendering medical
opinions or medical advice] to any one person[.]

Both at trial and on appeal, Appellant argued, inter alia, that two of the counterclaims
allege medical incidents: (1) Count V alleges that Appellant committed, in part, negligence
and protocol deviations in his surgeries for a clinical trial, resulting in bad surgical
outcomes for patients and reputational damage to CRI; and (2) Count VI alleges that
Appellant appears to have committed medical malpractice, causing damages to infant
victims and CRI.

In contrast, Appellee argues that the counterclaims do not seek “damages resulting
from a medical incident” that are “caused by the rendering of, or failure to render,
professional services to any one person,” and that Appellant does not face “professional
liability resulting from a medical incident.” Instead, according to Appellee, the
counterclaims “seek to impose personal—not professional—liability on [Appellant], and
alleg[e] damages for his business obligations to his former employer (CRI) and fellow
shareholders that are not based on the rendering of ‘professional services to any one
person.’” In other words, Appellee argues that “[w]hat [the CRI Defendants] do not seek
from [Appellant], which is a threshold requirement for coverage to apply, are damages
caused by [Appellant’s] rendering of ‘professional services to any one person.’” (Internal
citation omitted).
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 The trial court’s ruling as to this specific dispute is as follows:

For the[] counter-claims to be covered under the insurance policy, they must
involve a “medical incident.” The counter-claims do not involve a “medical
incident.” Instead, they involve claims arising from [Appellant’s] business
and employment disputes with his former employer and former business
partners/shareholders. The closest [Appellant] can come to pointing to a
“medical incident” is the allegations by the counter-claimants that
[Appellant] “appears to have committed medical malpractice before the
termination of his employment, often with infant victims” and that
[Appellant] committed serious protocol deviations in the clinical trials that
resulted in “bad surgical outcomes.” However, even these claims are not
sufficient to trigger coverage. These claims are vague and do not allege a
specific victim of medical malpractice.

Thus, the trial court’s order as to this dispute is arguably more detailed than its decision
regarding the covered investigations. But as to the two counts relied upon by Appellant to
support a duty to defend, the trial court’s ruling amounts to nothing more than a conclusion
that these counts are “not sufficient to trigger coverage” because they are vague and do not
allege a specific victim. The trial court again does not cite the language of the Policy or the
arguments of the parties. Importantly, the trial court cites no legal authority in support of
its conclusion that vagueness is both present and fatal here, or that a specific victim of
malpractice must have been named in order for the duty to defend to be triggered. As a
result, we are again left to wonder at what specific facts and arguments the trial court relied
upon to reach its conclusion.

Despite its decision that no duty to defend was triggered, the trial court also went
on to consider whether coverage was nevertheless excluded by the Policy. In particular, the
parties focus on two separate types of exclusions, which they refer to as the “business
enterprise exclusions” and the “contractual liability exclusion.” The business enterprise
exclusions derive from the following language of the Policy:

The insurance . . . does not apply to:
2.1 . . . . liability of insured in his/her capacity as a member, partner, officer,
director . . . , owner or shareholder of any practice entity;[8]

2.2 Liability of insured in his/her capacity as an owner, shareholder,
proprietor, member, partner, director . . . , officer, trustee, superintendent or

8
The Policy defines “practice entity” as “a partnership, corporation, professional corporation,
limited liability company, professional limited liability company, limited liability partnership, professional
service association, or any similar entity organized to provide professional services.”
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 administrator, of any hospital, sanitarium, clinic with bed and board
facilities, nursing home, ambulatory surgery center, laboratory, managed
care organization, health maintenance organization, preferred provider
organization, exclusive provider organization or other similar health care
entity, or other business enterprise[.]

The contractual liability exclusion stems from the provision of the Policy stating that
coverage does not apply to “liability assumed by insured under a contract or agreement,
except a professional services contract.” The Policy defines a “professional services
contract” as “a written contract or written contractual provision in which insured agrees to
provide professional services and to indemnify any person or entity for losses or defense
costs caused, or allegedly caused, solely by the negligence of insured and resulting from
a medical incident.”

Both in the trial court and on appeal, Appellant contends that the business enterprise
exclusions are inapplicable because Counts V and VI stem from his practice of medicine
and his alleged medical malpractice, not solely his capacity as a business associate of CRI.
In contrast, Appellee argues, inter alia, that even if the counterclaims do fall within the
Policy’s coverage, coverage is nonetheless precluded under the business enterprise
exceptions, because “[t]he liability of [Appellant] sought by the [counterclaims], if any,
arises solely from his status as a member, partner, officer, proprietor, director, owner or
shareholder of CRI,” rather than “from his rendering of professional services to any one
person.” According to Appellee, “[n]ot everything a physician does is the practice of
medicine; not all liability flowing from a physician’s professional conduct is the result of
a medical incident.”

Appellee argues that the counterclaims are also excluded under the contractual
liability exclusion because they seek indemnification for claims that might be asserted
against the CRI Defendants by virtue of the CRI Defendants’ contractual relationship with
Appellant. Appellant responds that Appellee has failed to explain or demonstrate that the
basis for his possible liability to the CRI Defendants lies in contract, rather than some other
basis for liability. See Massachusetts Mut. Life Ins. Co. v. Jefferson, 104 S.W.3d 13, 22,
39 n.10 (Tenn. Ct. App. 2002) (citations omitted) (“[The] insurance company has the
burden of proving that an exclusion in its policy applies to a claim.”).

The trial court’s order as to the Policy exclusions is as follows:

The types of claims made by the counter-claim[]s . . . are specifically
excluded from coverage by the Policy because [Appellant] would only be
liable for those claims in his capacity as a member, partner, officer,
proprietor, owner, or shareholder of CRI. Such liability is specifically
excluded from the Policy. Also, pursuant to the Policy, coverage does not
apply to liability assumed by [Appellant] under a contract or agreement,
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 except a professional services contract. The Policy also excludes intentional
acts, which are alleged in the counter-claims. The Policy excludes acts which
would violate any statute, ordinance, law, rule, or regulation as well. Finally,
the Policy excludes coverage for sexual conduct.

As an initial matter, many of the trial court’s conclusions are not responsive to the
issues presented by the parties. To the extent that intentional acts may have been alleged
in the counterclaims, the trial court fails to point out which allegations in the counterclaims
allege intentional acts that would be excluded under this provision. Moreover, Counts V
and VI, the basis for Appellant’s contention that a duty to defend exists, clearly allege acts
of negligence. See Gunter v. Lab’y Corp. of Am., 121 S.W.3d 636, 639 (Tenn. 2003)
(citation omitted) (“Medical malpractice actions are specifically controlled by the medical
malpractice statute, Tennessee Code Annotated section 29–26–115, which essentially
codifies the common law elements of negligence.”). The fact that those and other counts
may also allege excluded acts is therefore largely irrelevant to the analysis. See Drexel
Chem. Co. v. Bituminous Ins. Co., 933 S.W.2d 471, 480 (Tenn. Ct. App. 1996) (“If even
one of the allegations [in a complaint against an insured] is covered by the policy, the
insurer has a duty to defend” the insured, regardless of how many allegations in the
complaint “may be excluded by the policy.”). The trial court’s order also parrots the Policy
language excluding coverage for violations of statutes, ordinances, laws, rules and
regulations, without pointing out what laws were alleged to have been violated or
indicating which counts in the counterclaims include allegations of this type. The same is
true of the trial court’s reference to allegations of sexual conduct.

The trial court’s findings as to the two exclusions that are centrally at issue in this
case are also deficient. Once again, the trial court’s order does not discuss the parties’ legal
arguments on this issue, the language of the Policy it is applying, or the analysis that was
used to reach its ultimate result. Instead, we are provided only with conclusory rulings. As
for the business enterprise exceptions, the trial court ruled that Appellant’s liability to the
CRI Defendants is based only on his capacity as “a member, partner, officer, proprietor,
owner, or shareholder of CRI”; the trial court does not, however, cite any portion of
Appellant’s contracts with the CRI Defendants to support this ruling. The trial court also
fails to point to any portion of the counterclaims that demonstrate or allege that liability is
only imposed on Appellant by virtue of these excluded relationships. See Travelers Indem.
Co. of Am. v. Moore & Assocs., Inc., 216 S.W.3d 302, 305 (Tenn. 2007) (citations omitted)
(“[W]hether a duty to defend arises depends solely on the allegations contained in the
underlying complaint. . . .”); St. Paul Fire & Marine Ins. Co. v. Torpoco, 879 S.W.2d 831,
835 (Tenn. 1994) (“[T]he pleading test for determination of the duty to defend is based
exclusively on the facts as alleged rather than on the facts as they actually are[.]”); Drexel
Chem. Co., 933 S.W.2d at 480 (quoting Glens Falls Ins. Co. v. Happy Day Laundry, Inc.,
19784 T.V., 1989 WL 91082 (Tenn. App. August 14, 1989)) (“An insurer may not properly
refuse to defend an action against its insured unless ‘it is plain from the face of the

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complaint that the allegations fail to state facts that bring the case within or potentially
within the policy’s coverage.’”).

As to the contractual liability exception, the trial court’s order states that “coverage
does not apply to liability assumed by [Appellant] under a contract or agreement, except a
professional services contract.” To the extent that this even constitutes a ruling that the
counterclaims allege liability that Appellant assumed under contract and thus is not covered
under the Policy, the trial court again does not cite which contracts or provisions thereof
Appellant assumed liability under. Nor does the trial court explain which of the
counterclaims allege that Appellant’s liability arises out of contract. See Moore & Assocs.,
Inc., 216 S.W.3d at 305; Torpoco, 879 S.W.2d at 835; Drexel Chem. Co., 933 S.W.2d at
480. Finally, the trial court’s reliance on the contractual liability exclusion specifically
mentions that the exclusion does not apply to “professional services contracts.” Yet the
trial court does not analyze whether this exception is present in this case, i.e., whether a
professional services contract is at issue.

Like the dispute concerning the supplemental policy benefit, the parties have also
raised a timing issue with regard to duty to defend issue—whether Appellant complied
with all notice provisions in the Policy. The parties raised this issue in the trial court and
spend considerable time addressing it on appeal. Appellant argues that he provided notice
within the applicable reporting period, and that an insurer cannot deny coverage or refuse
to defend an insured on the basis of late notice unless it experiences prejudice. Appellee
argues that Appellant provided late notice of the counterclaims to Appellee, which should
bar coverage, and that Appellee does not need to demonstrate prejudice, but it was
prejudiced in any event.

Despite Appellant’s insistence that this issue was decided in his favor, we have
doubt. Specifically, Appellant points to portions of the trial court’s factual recitation as
evidence that the trial court addressed this issue and ruled in his favor. From our review of
the trial court’s order, however, we conclude that this factual recitation contains no
conclusions concerning whether the notice was timely. Again, this issue may be
pretermitted by a ruling that the Policy provides no coverage. But the trial court chose to
address other alternative arguments about the coverage issue. As such, we are again unsure
if the trial court’s failure to address this issue was based on a determination that the issue
was pretermitted. The purpose of Rule 56.04 is to ensure that we need not guess as to basis
of the trial court’s ruling. Cf. Lakeside, 439 S.W.3d 303 at 313 (explaining that summary
judgment orders should contain an “explanation of the reasons for granting the summary
judgment” so as to avoid “complicating the ability of the appellate courts to review the trial
court’s decision”).

C.

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 In sum, the trial court’s order evinces varying degrees of compliance with Rule
56.04 and Lakeside. To be sure, the trial court’s order does provide more than a simple
notation that summary judgment is granted in Appellee’s favor. The trial court’s order here
is therefore not the most barren order that this Court has ever encountered, as it superficially
provides the legal grounds for its ruling. But Rule 56.04 and Lakeside require more—that
the decision be adequately explained. Cf. Black’s Law Dictionary 45 (9th ed. 2009)
(defining “adequate” as “[l]egally sufficient”). And the inadequacies in the trial court’s
ruling, while perhaps not amounting to the glaring errors present in other cases, are a
pervasive issue in this case. As a result, we cannot conclude that the trial court’s rather
conclusory recitation of the legal grounds upon which it based its decision meets the
mandate that its analysis be more than perfunctorily explained.

It is likely that we could solider on to review some of the issues in this case in light
of the fact that they involve issues of law. But all summary judgment motions involve
issues of law; that fact alone does not exempt the trial court from its duty to provide analysis
for this Court. Cf. Szekely, 461 S.W.3d at 72 (holding that the case involved “questions of
law that require analysis and explanation”). And the Tennessee Supreme Court has
cautioned us against this practice, as requiring explanations from the trial court “promote[s]
respect for and acceptance of not only the particular decision but also for the legal
system.” Lakeside, 439 S.W.3d at 313. Given the complexity of the issues presented in this
case, we cannot conclude that it would be appropriate for us to consider the merits of this
appeal without additional “analysis and explanation” from the trial court. Szekely, 461
S.W.3d at 72. We therefore vacate the judgment of the trial court and remand for the entry
of an order explaining the basis of its rulings on each issue raised by the parties.9

V. CONCLUSION

The judgment of the Chancery Court of Williamson County is vacated, and this case
is remanded to the trial court for further proceedings consistent with this Opinion. Costs of
this appeal are taxed to Appellee State Volunteer Mutual Insurance Company, for which
execution may issue if necessary.

S/ J. Steven Stafford
J. STEVEN STAFFORD, JUDGE

9
To the extent that one party has asserted there are post-judgment facts to be considered, this and
other matters can be raised in the trial court upon remand.
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