# CHUBB NATIONAL INSURANCE COMPANY v. D'CUNHA

> District Court, W.D. Pennsylvania · July 31, 2023

URL: https://www.frixlaw.com/law-library/cases/10418965

## Case

- **Court:** District Court, W.D. Pennsylvania
- **Decided:** July 31, 2023
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
CHUBB NATIONAL INSURANCE )
)
COMPANY, et al.,
)
)
Plaintiffs, )
)
)
v. )
)
JONATHAN D’CUNHA, M.D., Ph.D., )
)
)
Defendant. )
)
____________________________________ )
)

)
DR. JONATHAN D’CUNHA, )
)
)
Third-Party Plaintiff,
) 2:22-CV-1042-NR
)
v. )
)
TRI-CENTURY INSURANCE )
)
COMPANY, et al.,
)
)
Third-Party Defendants. )
)
)
____________________________________ )
)
)
CRESTBROOK INSURANCE )
)
COMPANY, )
)
Intervening Plaintiff, )
)
)
v. )
)
TRI-CENTURY INSURANCE )
)
COMPANY, et al.,
)
)
Third-Party Defendants. )
OPINION
J. Nicholas Ranjan, United States District Judge
This is an insurance-coverage case involving insurance policies issued by Tri-
Century, Chubb, and Federal. The parties asked and the Court agreed to stay
discovery and allow them to brief the question of whether the insurers have a duty to
defend two policyholders in an underlying state-court action. Now before the Court
are competing cross-motions on the issue of the duty to defend. For the following
reasons, the Court finds that Tri-Century owes its insureds a duty to defend the
underlying state-court action, but that extrinsic evidence is needed to assess Chubb’s
and Federal’s duty to defend based on an exception to an exclusion that may
potentially trigger a defense duty.
BACKGROUND
I. The underlying state-court third-party complaint.1
Dr. James Luketich, Dr. Jonathan D’Cunha, and Dr. Lara Schaheen all worked
together at UPMC. Dr. Luketich and Dr. D’Cunha were both cardiothoracic surgeons.
Dr. Luketich chaired the Cardiothoracic Surgery (“CT”) Department. ECF 70-3, ¶
237. Dr. D’Cunha was the chief of the CT Department’s Division of Lung
Transportation/Lung Failure, and he reported to Dr. Luketich. Id. at ¶ 243. Dr.
Schaheen was a surgical resident who worked with both men. Id. at ¶ 239.
Drs. D’Cunha and Schaheen began an inappropriate relationship at work, and
rumors spread about their affair. Id. at ¶¶ 244, 247, 249-250. Around that time, Dr.
D’Cunha also came under scrutiny for other reasons, including for charges of

1 The following facts derive from the third-party complaint Dr. Luketich filed against
Dr. D’Cunha and Dr. Schaheen in a state-court medical malpractice action. Drs.
D’Cunha and Schaheen are seeking insurance coverage in that case. Because the
underlying factual allegations in a complaint determine an insurer’s duty to defend,
the Court accepts them as true for present purposes. Erie Ins. Exch. v. Moore, 228
A.3d 258, 265 (Pa. 2020) (“The truth of the complaint’s allegations is not at issue
when determining whether there is a duty to defend; the allegations are to be taken
as true and liberally construed in favor of the insured.” (cleaned up)).
plagiarism and other academic misconduct. Id. at ¶¶247-258. As a result, Dr.
Luketich rotated Dr. Schaheen to a different team in order to separate her from Dr.
D’Cunha. Id. at ¶¶ 231, 254. Tension had already existed between Drs. Luketich
and D’Cunha. Id. at ¶ 252. But this transfer made the two paramours furious, and
they began conspiring to take revenge on Dr. Luketich. Id. at ¶ 255.
As part of their scheme, Drs. D’Cunha and Schaheen surreptitiously recorded
Dr. Luketich on at least two occasions, aiming to catch him engaging in inappropriate
or unlawful conduct and to use that evidence against him. Id. at ¶¶ 260-261. This
included placing a secret recording device that captured a conversation in an
operating room observation gallery. Id. at ¶ 262. That conversation was between Dr.
Luketich and his treating physician, and the two discussed Dr. Luketich’s personal
use of Suboxone. See id. at ¶ 232, 262. Drs. D’Cunha and Schaheen then
disseminated that confidential information. Id. at ¶ 266.
The conspiracy escalated when Dr. Luketich led an investigation into possible
research misconduct by Drs. D’Cunha and Schaheen. Id. at ¶¶ 269, 272. To that end,
they made multiple complaints to various authorities about Dr. Luketich. Id. at ¶
233. These included two anonymous complaints to UPMC, id. at ¶¶ 274-275; a
complaint to the Pennsylvania Board of Medicine, id. at ¶ 281; and the Accreditation
Council for Graduate Medical Education, id. at ¶ 282. They sent a complaint letter
and recording of Dr. Luketich’s O.R. conversation to a competing academic medical
center. Id. at ¶¶ 283, 288. They also encouraged law enforcement investigations. Id.
at ¶ 230. Dr. D’Cunha even brought a federal qui tam action against Dr. Luketich
and UPMC. Id. at ¶ 303; see United States ex rel. D’Cunha v. Luketich, No. 19-495,
2022 WL 2359417 (W.D. Pa. June 30, 2022).
Finally, Drs. D’Cunha and Schaheen misappropriated patient medical records
in order to encourage private lawsuits. ECF 70-3 at ¶¶ 269, 280, 292. As particularly
salient here, Drs. D’Cunha and Schaheen accessed Bernadette Fedorka’s medical
records and provided them to Dr. Schaheen’s stepfather (a lawyer). Id. at ¶¶ 290-92.
The goal was to “instigate” a malpractice suit against Dr. Luketich (and others). Id.
at ¶ 292.
It worked. Mr. and Mrs. Fedorka ended up bringing a medical malpractice
claim in state court against Dr. Luketich (and others). Id. at ¶ 296. The suit stemmed
from Mrs. Fedorka’s March 2018 botched lung transplant, which had been performed
by another doctor in the department. Id. at ¶ 289.
As part of that state-court action, Dr. Luketich sued Drs. D’Cunha and
Schaheen, alleging that the two conspired to “take [him] down and watch him die a
slow death.” Id. at ¶ 279. That third-party complaint is the one at issue here in
assessing the duty to defend, and includes ten counts, alleging:
A. Count I (Civil Conspiracy) – Drs. D’Cunha and Schaheen tried “to
persuade lawyers and government officials to initiate investigations and
bring lawsuits…for the unlawful purpose of causing injury to Dr.
Luketich, as well as to enrich themselves and others at his expense[.]”
Id. at ¶ 308.
B. Count II (Injunctive Relief).
C. Count III (Wiretapping) and Count V (Invasion of Privacy) – they
“knowingly and intentionally intercepted, caused to be intercepted,
and/or received confidential patient-physician communications.” Id. at
¶¶ 321, 333, 339.
D. Count IV (Defamation Per Se) and Count VII (Commercial
Disparagement) – they “repeatedly made false and defamatory
allegations verbally and in writing” “with willful intent to injure…Dr.
Luketich[.]” Id. at ¶¶ 327, 330 (cleaned up). This negatively affected
Dr. Luketich’s personal reputation as well as his business reputation.
Id. at ¶ 360.
E. Count VI (Tortious Interference) – they “used the unlawfully obtained
private information…to strategically target Luketich’s status” at
UPMC, aiming “to ruin his professional reputation, get him fired,
stripped of his license and therefore render him unemployable as a
physician[.]” Id. at ¶¶ 349-350.
F. Count VIII (Replevin) and Count IX (Conversion) – they “knowingly and
intentionally obtained and dispersed confidential, HIPAA-protected
patient medical records” illegally. Id. at ¶ 363.
G. Count X (Abuse of Process) – finally, they “conjured up a legal process
by recruiting the Fedorkas (and others) to bring a baseless lawsuit….”
Id. at ¶ 395.
II. Insurance policies.
A. Tri-Century
Tri-Century is UPMC’s “wholly owned self-insured subsidiary.” ECF 12, ¶ 2.
As UPMC employees, both Dr. D’Cunha and Dr. Schaheen carried personal liability
insurance issued by Tri-Century. The policy’s coverage for individual policyholders
includes:
damages due to an injury to which this insurance applies caused by a
medical incident which occurs during the policy period arising out of the
practice of the insured’s profession as a physician, surgeon or dentist.
ECF 12-1, p. 1.
Tri-Century so far has refused to defend either Dr. D’Cunha or Dr. Schaheen
against Dr. Luketich’s third-party claim in the Fedorka action, even though – as Dr.
D’Cunha points out – it is defending every other UPMC defendant in the Fedorka
case. ECF 87, p. 6; ECF 12-2.
B. Chubb/Federal
Chubb issued a Masterpiece homeowners’ insurance policy to Dr. D’Cunha,
including for personal liability. ECF 22, ¶¶ 17-20. Federal provided excess coverage
that follows form. Id. at ¶¶ 27-29. The Chubb policy covers damages:
for personal injury or property damage which takes place anytime
during the policy period and are caused by an occurrence, unless stated
otherwise or an exclusion applies.
ECF 30-1, p. 183.
The policy defines “occurrence” to include:
an accident which begins within the policy period resulting in bodily
injury, shock, mental anguish, mental injury, or property damage; or an
offense first committed within the policy period resulting in: false arrest,
false imprisonment, or wrongful detention; wrongful entry or eviction;
malicious prosecution or humiliation; or libel, slander, defamation of
character, or invasion of privacy, to which this insurance applies.
Id. Chubb initially declined to defend Dr. D’Cunha, but is now defending him subject
to reservation of rights. ECF 87, p. 9.
C. Crestbrook
Crestbrook provided a homeowners’ insurance policy, including for personal
liability, to William Wu – who Dr. Schaheen represented was her domestic partner
during the relevant timeframe. ECF 56, ¶¶ 6-8. Therefore, the policy also covers Dr.
Schaheen. Crestbrook’s policy states that it will pay damages:
due to an occurrence resulting from (a) Negligent personal acts or
negligence arising out of the ownership, maintenance or use of real or
personal property at an insured location; and (b) Other personal
activities anywhere in the world, unless stated otherwise or an exclusion
applies.
ECF 70-1, p. 47. Crestbrook initially denied coverage, but is now defending Dr.
Schaheen subject to reservation of rights. ECF 56, ¶¶ 23-24.
III. The instant federal case.
Chubb and Federal (together “Chubb”) filed a federal-court complaint against
Dr. D’Cunha on July 19, 2022, seeking a declaratory judgment that it had no duty
either to defend or to indemnify Dr. D’Cunha in the underlying state-court case. ECF
1. Dr. D’Cunha responded with his own request for declaratory judgment, and
claimed that Chubb breached its duties to him. ECF 8. Dr. D’Cunha then filed a
third-party complaint against Tri-Century, seeking a declaration that Tri-Century,
too, owed him a defense and indemnification. ECF 12.
Crestbrook later intervened and filed an intervenor complaint against Tri-
Century, with Dr. Schaheen as a nominal defendant, seeking equitable contribution,
equitable subrogation, and declaratory judgment as to Tri-Century’s duty to defend
and indemnify Dr. Schaheen. ECF 56. Dr. Schaheen, for her part, filed a
counterclaim against Crestbrook, stating that although Crestbrook acknowledged a
duty to defend her, it also owed her indemnification. ECF 70.
After convening a status conference, at the parties’ request, the Court agreed
to stay discovery and attempt to resolve the duty-to-defend issue first. ECF 72. To
that end, Chubb filed a motion for judgment on the pleadings, seeking a declaration
that it had no duty to defend Dr. D’Cunha. ECF 84. Dr. D’Cunha countered with a
motion for partial summary judgment asking the Court to declare precisely the
opposite. ECF 100. He also filed a motion for summary judgment regarding Tri-
Century’s duty to defend him, ECF 86, which Tri-Century countered with a cross-
motion for judgment on the pleadings. ECF 97. Crestbrook filed a motion for partial
summary judgment seeking a declaration that Tri-Century, rather than Crestbrook,
has the duty to defend Dr. Schaheen. ECF 82. Dr. Schaheen agrees; she filed her
own motion for partial summary judgment to that effect, and she joined in both
Crestbrook’s and Dr. D’Cunha’s. ECF 90. The Court held oral argument on the
matter on June 14, 2023. ECF 127; ECF 128. Each motion is now ready for
disposition.
DISCUSSION & ANALYSIS2
An insurer’s duty to defend is broader than its duty to indemnify. Kvaerner
Metals Div. of Kvaerner U.S., Inc. v. Commercial Union Ins. Co., 908 A.2d 888, 896
n.7 (Pa. 2006). So an insurer might have a duty to defend the insured even if it
ultimately has no duty to indemnify him. Frog, Switch & Mfg. Co. v. Travelers Ins.
Co., 193 F.3d 742, 746 (3d Cir. 1999).
In determining whether there is a duty to defend, “the Court must compare
coverage under the policy with the factual allegations contained in the four corners
of the complaint.” Mericle, 2010 WL 3505117, at *5-6 (citing Whole Enchilada, Inc.
v. Travelers Prop. Cas. Co. of Am., 581 F. Supp. 2d 677, 694 (W.D. Pa. 2008) (Fischer,
J.)). If the complaint “states a claim that potentially comes within the coverage of the
policy,” the duty to defend is triggered. Britamco Underwriters, Inc. v. Emerald
Abstract Co., 855 F. Supp. 793, 797-99 (E.D. Pa. 1994) (citing Cadwallader v. New
Amsterdam Cas. Co., 152 A.2d 484 (1959)). “If a single claim in a complaint
containing multiple claims is potentially covered, the duty to defend attaches until
the underlying plaintiff can no longer recover on a covered claim.” Mericle, 2010 WL
3505117, at *6 (citing Frog, Switch & Mfg., 193 F.3d at 746)). “[T]he complaint must
be construed liberally, the factual allegations must be accepted as true, and all doubts
as to coverage resolved in favor of the insured.” Id.
Notably, the question of coverage does not turn on the specific request for relief
or cause of action named in the complaint; instead, a court must examine the

2 The legal standard for summary judgment and for judgment on the pleadings is
similar. See Rosenberg v. Hudson Ins. Co., No. 22-137, 2022 WL 16553271, at *2
(W.D. Pa. Oct. 31, 2022) (Horan, J.) (“A motion for judgment on the pleadings may be
granted where the movant clearly establishes that no material issue of fact remains
to be resolved and that it is entitled to judgment as a matter of law.” (cleaned up)).
underlying factual allegations. Mut. Benefit Ins. Co. v. Haver, 725 A.2d 743, 745 (Pa.
1999). The “insurer must provide a defense even if such suit is groundless, false, or
fraudulent.” Young, 2009 WL 2170105, at *2 (cleaned up). But “[t]he overstatement
of a claim or the hyperbole of a pleader should not control whether an insured is
entitled to a defense.” Britamco, 855 F. Supp. at 799.
Drs. D’Cunha and Schaheen don’t contend that every claim in the state-court
third-party complaint against them is covered by their insurance. But they do argue
that at least certain claims are covered. Specifically, they point to the claims for
defamation and replevin as to Tri-Century. ECF 87, pp. 14, 18. And Dr. D’Cunha
points to claims of defamation, invasion of privacy, and abuse of process as to Chubb.
See ECF 101, pp. 22, 24, 25. If they are right as to any of those counts, the insurers
will have a duty to defend for as long as those counts remain part of the case. Mericle,
2010 WL 3505117, at *6.
I. Tri-Century has a duty to defend because at least Counts IV and VIII
of the third-party complaint are potentially covered.

A. The underlying claims were caused by the provision of medical
services because they involved the “exercise of medical skill
associated with specialized training.”
The Court first turns to the motions pertaining to the Tri-Century policy. Tri-
Century has disclaimed any duty to defend, contending that its policy – issued to both
Dr. D’Cunha and Dr. Schaheen – does not cover Dr. Luketich’s claims against them.
Tri-Century argues that Drs. D’Cunha and Schaheen have not met their burden to
show that Dr. Luketich’s allegations fall within the scope of the policy to trigger
coverage at all. Tri-Century argues, in essence, that its policy covers medical
malpractice, which has nothing to do with the claims here. The Court disagrees.
In a dispute over whether coverage is triggered in the first place, “the insured
bears the burden of proving facts that bring its claim within the policy’s affirmative
grant of coverage.” Koppers Co. v. Aetna Cas. & Sur. Co., 98 F. 3d 1440, 1446 (3d Cir.
1996) (citation omitted). Here, the policy’s “Coverage A” provides individual
professional liability coverage for:
[a]ll sums which the insured shall become legally obligated to pay as
damages due to an injury to which this insurance applies caused by a
medical incident which occurs during the policy period arising out of the
practice of the insured’s profession as a physician, surgeon or dentist.
ECF 12-1, p. 1.
The policy, in turn, defines a “medical incident” as:
any act or omission (a) under Coverage A – Individual Professional
Liability – (1) in the furnishing of professional medical or dental services
by the insured, an employee of the insured, or any person acting under
the personal direction, control or supervision of the insured, or (2) in the
service by the insured as a member of a formal accreditation, standards
review, ethics or similar professional board or committee, including non-
employed committee members[.]
Id. at 8.
Thus, the policy provides coverage where the underlying claims are caused by
the “furnishing of professional medical services.” Though the Tri-Century policy itself
does not expressly define “professional medical services,” the Supreme Court of
Pennsylvania has held that an act qualifies if it “is a medical skill associated with
specialized training.” Physicians Ins. Co. v. Pistone, 726 A.2d 339, 344 (Pa. 1999). In
doing so, the court “rejected alternative proposed definitions…turning upon whether
there was a ‘substantial nexus’ between the injurious actions and the professional
setting, or whether the harmful conduct was ‘intertwined with and inseparable from’
the medical services provided.” Strine v. Com., 894 A.2d 733, 739 n.5 (Pa. 2006).
Under this definition, the claims for defamation and replevin in the third-party
complaint against Drs. D’Cunha and Schaheen qualify.
Beginning with the defamation claim, certain of the allegedly defamatory
statements reflect an exercise in “medical skill associated with specialized training.”
Importantly, the practice of medicine, like the practice of law, entails certain ethical
duties. Dr. Luketich acknowledges that Dr. D’Cunha had an “independent
responsibility under…professional standards of practice to ensure that the surgeons
they operated with were oriented, alert, coherent, and capable to successfully”
perform surgery. ECF 1-1, ¶ 286. Dr. D’Cunha argues that several of his allegedly
defamatory reports arose from this responsibility and relied on his medical judgment.
Specifically, his “reporting of a fellow impaired surgeon involved a covered
professional medical judgment call that only a physician could make.” ECF 87, p. 2.
The Court agrees.
Many of Dr. D’Cunha’s statements about Dr. Luketich are medical in nature.
For instance, Dr. D’Cunha’s anonymous complaint to the Pennsylvania Board of
Medicine (referred to in paragraph 281 of the state-court third-party complaint)
included a section called “Medical Misconduct.” ECF 102-1, pp. 4-7. This section
included allegations such as:
prolonged OR times,” “disregard[ing] standard of care for thoracic
oncology patients,” “intentional delay of necessary and indicated patient
care,” “inability to practice medicine with reasonable skill and safety due
to impaired illness,” and “lack of sterile technique resulting in direct
complications.
Id. Assessing what falls below a medical standard of care certainly “raises questions
of medical judgment beyond the realm of common knowledge and experience.”
Grossman v. Barke, 868 A.2d 561, 570 (Pa. Super. Ct. 2005) (distinguishing regular
negligence claims from medical malpractice negligence claims) (citation omitted).
Thus, at least some of the allegedly defamatory statements concerned medical
incidents. This is enough to trigger coverage.
The replevin claim is also potentially covered. With respect to this claim, Dr.
Luketich’s third-party complaint alleges that Drs. D’Cunha and Schaheen
“knowingly and intentionally obtained and dispersed confidential, HIPAA-protected
patient medical records that are the sole property of UPMC, without authorization of
the patient or their lawful representative or guardian.” ECF 70-3, ¶ 363.
Management of patient medical records and privacy involves specialized training in
order to comply with extensive regulations. To that end, other courts, applying
Pennsylvania law, have recognized that management of patient medical information
is part of “professional medical services.” E.g., Princeton Ins. Co. v. LaHoda, No. 95-
5036, 1996 WL 11353, at *4 (E.D. Pa. Jan. 4 1996) (“Clearly, the allegations that Dr.
LaHoda improperly disclosed medical information about his patient…constitute a
‘professional medical’ act or omission[.]”); Nationwide Mut. Ins. Co. v. Garzone, No.
07-4767, 2009 WL 2996468, at *18-19 (E.D. Pa. Sept. 17, 2009) (holding that “failing
to properly obtain consent for organ donation, preparing or relying on faulty
documentation, and negligently entrusting the bodies” arose from “the exercise of
the…Defendants’ professional skills as cremators or undertakers,” which concerned
skills associated with specialized training). And Dr. Luketich himself acknowledges
that these obligations are a core part of the medical profession. ECF 70-3, ¶ 368
(describing the alleged misuse of patient records as violating the “standards and
practice of [the medical] profession everywhere”). Therefore, the claim for replevin is
also potentially covered.
B. Tri-Century’s counterarguments fail.
Tri-Century makes two primary arguments in response – neither of which is
persuasive.
First, it asserts that “professional medical services” means only “the provision
of medical treatment or the failure to provide such treatment.” ECF 98, p. 13 (quoting
Princeton Ins. Co. v. Kosoy, No. 98-4985, 1999 WL 79055, at *3 (E.D. Pa. Feb. 9, 1999),
aff’d without opinion 281 F.3d 223 (3d Cir. 2001)). The Court finds that such a
restrictive construction is not appropriate in light of the policy’s language; the policy
specifically labels itself as “professional liability insurance,” rather than “medical
malpractice insurance.” ECF 12-1, p. 2. Additionally, the Kosoy case, on which Tri-
Century relies, predated the controlling Pistone decision. And furthermore, it is
distinguishable. Kosoy involved “claims for negligence, fraud and breach of contract
arising solely out of the billing practices of Dr. Kosoy’s chiropractic business.” 1999
WL 79055, at *3. Unlike this case, the allegations there had nothing to do with
anything involving medical judgment.3
Second, Tri-Century argues that a broad reading of “professional medical
services” would effectively render a portion of the policy’s definition of “medical
incident” superfluous. Under the policy, a “medical incident” can include an act or
omission:
(2) in the service by the insured as a member of a formal accreditation,
standards review, ethics or similar professional board or committee,
including non-employed committee members
(“option 2”). ECF 12-1, p. 8. Those boards and committees often have a role in
reporting malpractice. So, Tri-Century argues, if reporting misconduct were part of
“professional medical services,” there would be no need for option 2. ECF 115, pp. 10-
11 (citing USX Corp. v. Liberty Mut. Ins. Co., 444 F.3d 192, 200 (3d Cir. 2006)).
But the two provisions do not completely overlap. Option 2 very clearly and
specifically addresses service on a board or committee; it operates no differently than
a form of Directors and Officers coverage, which has a distinct and separate purpose.

3 Tri-Century cites Central Dakota Radiologists v. Continental Casualty, in which the
district court, applying North Dakota law, found that a requirement that an injury
be “caused by” professional medical services is more restrictive than requiring that it
“arise out of” those services. 769 F. Supp. 323, 326-27 (D.N.D. 1991). The Court
doesn’t find Central Dakota Radiologists to be persuasive. First, the court’s analysis
there was not supported by any authority. Second, the court there was considering
whether an antitrust claim was covered – something wholly outside the scope of
coverage. Third, the causation standard doesn’t alter the result here, because the
underlying state action expressly alleges causation. See generally ECF 70-3
(repeatedly stating that third-party defendants’ actions “directly and proximately
caused separate and distinct harm and injury”).
Thus, the option 2 provision is not superfluous, and it does not change the Court’s
interpretation of “professional medical services.”
In short, the underlying third-party complaint very clearly asserts claims
caused by the provision of medical services by Drs. D’Cunha and Schaheen, and
therefore Tri-Century owes its insureds a duty to defend.4 5
C. The Court defers on ordering reimbursement or payment of any
attorneys’ fees.
As part of their motions, Drs. D’Cunha and Schaheen have submitted counsel
invoices from the underlying case and have requested payment of those fees by Tri-
Century, in the event that the Court finds the existence of a duty to defend. ECF 89;
ECF 118; ECF 126; ECF 130. Crestbrook also has sought equitable contribution in
its complaint from Tri-Century because Crestbrook would sit excess to any available
coverage provided by Tri-Century to Dr. Schaheen. ECF 56, Count I.
The Court finds that because Tri-Century owes Drs. D’Cunha and Schaheen a
defense, it also owes certain defense costs that have not yet been paid, and that
Crestbrook has a right to equitable contribution for the defense costs that it has paid
to Dr. Schaheen. Cont’l Cas. Co. v. Pennsylvania Nat’l Mut. Cas. Ins. Co., 390 F.
Supp. 3d 614, 621, 625 (E.D. Pa. 2019) (“To recover on a claim of equitable
contribution under Pennsylvania law, an insurer must show by a preponderance of

4 Tri-Century has alluded to other bases for denying coverage to Drs. D’Cunha and
Schaheen. E.g., ECF 12-20, p. 6 (reserving rights); ECF 62, ¶ 92 (citing an exception
for an injury “arising out of the performance by Dr. Schaheen of a criminal,
fraudulent, or malicious act”). But Tri-Century advances none of those arguments as
part of its motion or in response to the other parties’ cross-motion, though it has
“reserved its right” to do so. ECF 98, p. 10 n.2. The time for reserving rights has
passed, and so the Court finds that any additional bases for denying a defense by Tri-
Century are waived.

5 The Court does not and need not address Dr. D’Cunha’s other arguments for
coverage, such as the impact of blame-shifting allegations or the effect of
Pennsylvania Rule of Civil Procedure 2255.
the evidence that (1) it is one of several parties liable for a common debt or obligation;
and (2) it discharged the debt for the benefit of the other parties.…A claim for
equitable contribution calls upon the power of the court to design a remedy that is
fair.” (cleaned up)).
Rather than enter judgment on those amounts at this time, the Court will order
the parties to first confer on those issues to attempt to reach agreement.
II. Extrinsic evidence is necessary to determine Chubb’s duty to defend.
Chubb provides personal liability insurance coverage as part of Dr. D’Cunha’s
homeowner’s policy. Chubb doesn’t contest the grant or scope of coverage. Rather, it
argues that two exclusions in its policies apply, stripping Dr. D’Cunha of coverage.
Dr. D’Cunha disagrees, arguing that at least the counts in the underlying complaint
for defamation, invasion of privacy, and abuse of process are potentially covered, and
therefore Chubb must defend him against Dr. Luketich. Up to this point, Chubb has
provided a defense, subject to reservation of its rights.
When an “insurer relies on a policy exclusion as the basis for denying coverage,
it bears the burden of proving that the exclusion applies. Policy exclusions are strictly
construed against the insurer.” Mericle, 2010 WL 3505117, at *5-6 (cleaned up).
Chubb relies on two exclusions: one for intentional acts, and another for business
pursuits. But Dr. D’Cunha raises the possibility that an enumerated exception to an
exclusion might apply in this case. At this point, the Court finds that it does not
currently have a sufficient record to determine whether Dr. D’Cunha is right. So it
cannot conclude that either party is entitled to judgment as a matter of law.
A. Business pursuits exclusion.
The Court first turns to the business pursuits exclusion. Chubb argues that
because Dr. D’Cunha’s conduct alleged in the third-party complaint was connected to
his employment as a doctor at UPMC, this exclusion means that he is not covered.
ECF 85, pp. 15-19.
The exclusion states:
[w]e do not cover any damages arising out of a covered person’s business
pursuits, investment or other for-profit activities, any of which are
conducted on behalf of a covered person or others, or business property,
and
[w]e do not cover damages or consequences resulting from business or
professional care or services performed or not performed.
ECF 30-1, pp. 194-195.
At the outset, the Court disagrees with Dr. D’Cunha that the policy’s use of
“business pursuits” is ambiguous, and that the term must therefore be narrowly
construed to mean “outside business interests.” ECF 101, pp. 19-20. As the
Pennsylvania Superior Court has explained, “activity encompassed within a ‘business
pursuits’ exclusion in an insurance policy requires two elements: 1) continuity, and
2) a profit motive.” Nationwide Mut. Ins. Co. v. Arnold, 214 A.3d 688, 696 (Pa. Super.
Ct. 2019) (citation omitted). “A profit motive may be shown by such activity as a
means of livelihood, a means of earning a living, procuring subsistence or profit,
commercial transactions or engagements. Additionally, continuity has been
described by the Third Circuit as ‘customary engagement in the activity.’” Id. (citing
Sun Alliance Ins. Co. v. Soto, 836 F.2d 834, 836 (3d Cir. 1988)). If those tests are
satisfied, the question is whether “the occurrence resulting in personal injury arose
out of [the] business pursuit.” Id. at 700 (cleaned up).
Under that test, the Court finds that at least two claims against Dr. D’Cunha
were not “business pursuits” within the meaning of the exclusion. Specifically, as
part of the defamation claim, Dr. Luketich accused Dr. D’Cunha of defamation
directed to a rival medical center, and as part of the abuse of process claim, he accused
Dr. D’Cunha of “recruiting” plaintiffs to bring private lawsuits against him.6 These

6 See ECF 70-3, ¶ 233 (“D’Cunha and Schaheen then distorted and disseminated
information…to make false, defamatory allegations…to among others:…(iii) a
activities, on their face, do not evince a “profit motive” associated with being a doctor,
and otherwise fall outside the scope of Dr. D’Cunha’s professional duties as a doctor
at UPMC. Aetna Cas. & Sur. Co. v. Ericksen, 903 F. Supp. 836, 841 (M.D. Pa. 1995)
(a professor’s making “whistleblowing” statements to a newspaper was not a business
pursuit because she didn’t “have public relations responsibilities for the university....
Nor did the publication of the allegedly libelous statement arise in the context of a
class taught by [the insured].”).
As in Arnold and Ericksen, Dr. D’Cunha’s job as a doctor did not involve
outreach to potential plaintiffs to file lawsuits, or reporting alleged misconduct to a
rival medical center regarding Dr. Luketich. It’s not enough that Dr. D’Cunha merely
learned of supposedly objectionable behavior by virtue of working with Dr. Luketich
at UPMC. These allegedly defamatory statements and improper conduct did not arise
out of Dr. D’Cunha’s regular patient care interactions or other responsibilities as part
of his employment.
B. Intentional acts exclusion.
Having determined that at least certain aspects of some of the underlying
claims do not involve a business pursuit, the Court next turns to the Chubb policy’s
exclusion for intentional acts, which Chubb argues also bars coverage for Dr.
D’Cunha. ECF 85, pp. 10-15.
The exclusion states:
[w]e do not cover any damages arising out of a willful, malicious,
fraudulent or dishonest act or any act intended by any covered person
to cause personal injury or property damage, even if the injury or
damage is of a different degree or type than actually intended or
expected. But we do cover such damages if the act was intended to
protect people or property unless another exclusion applies. An
intentional act is one whose consequences could have been foreseen by
a reasonable person.

competing academic medical center”); id. at ¶ 292 (describing the effort to “instigate
the malpractice claims here”).
ECF 30, p. 194.
To begin with, this language is unambiguous. Dr. D’Cunha tries to suggest
otherwise, by pointing out how the policy’s coverage grant expressly covers
intentional torts as covered occurrences, such as, expressly, “malicious prosecution or
humiliation,” as well as “libel, slander, defamation of character, or invasion of
privacy.” ECF 30-1, p. 183. So, according to Dr. D’Cunha, the exclusion cannot strip
away these torts. ECF 101, pp. 2-3. But the Court doesn’t find that the enumeration
of covered intentional torts in the grant of coverage creates an ambiguity with the
intentional acts exclusion, for at least two reasons.
First, the coverage grant expressly states coverage is afforded “unless stated
otherwise or an exclusion applies.” ECF 70-1, p. 47. Exclusions, after all, take away
coverage grants, and this language says as much. 1 S.A.N.T., Inc. v. Berkshire
Hathaway, Inc., 513 F. Supp 3d 623, 626 (W.D. Pa. 2021) (Stickman, J.) (“Policy
exclusions…are enforced under their plain meaning. Exclusions from coverage
contained in an insurance policy will be effective against an insured if they are clearly
worded and conspicuously displayed[.]” (cleaned up)), aff’d sub nom. Wilson v. USI
Ins. Serv. LLC, 57 F.4th 131 (3d Cir. 2023).
Second, as the Third Circuit has noted, the interplay between enumerated
intentional torts in the coverage grant and the intentional acts exclusion can be read
consistently. For example, defamation can be established by recklessness, and such
a claim would not be barred by the intentional acts exclusion. Regent Ins. Co. v.
Strausser Enters., Inc, 814 F. App’x 703, 710 n.5 (3d Cir. 2020) (“[T]he unambiguous
‘Knowing Violation of Rights of Another’ exclusion is a specific component of Coverage
B and does not result in illusory coverage for all malicious prosecution claims because
it does not apply to claims based on alleged negligence.”).
Applying the unambiguous intentional acts exclusion, the third-party
complaint clearly pleads a specific intentional scheme “with willful intent to injure”
Dr. Luketich by “tak[ing] him down.” E.g., ECF 70-3, ¶ 330.
For example, considering the same claims that the Court considered in
analyzing the business pursuits exclusion above (defamation to a rival medical center
and abuse of process in recruiting plaintiffs to file lawsuits), these claims, as pled,
demonstrate Dr. D’Cunha’s intent to injure Dr. Luketich. Dr. Luketich avers that
“D’Cunha and Schaheen have conjured up a legal process by recruiting the Fedorkas
(and others) to bring a baseless lawsuit and therein have caused the intentional
publicization of irrelevant, false and defamatory allegations concerning Dr. Luketich
for the unlawful purpose of extorting money from him and UPMC[.]” ECF 70-3, ¶
395. And they sent “another academic medical center outside the Commonwealth of
Pennsylvania” “a letter that recited the False and Defamatory Allegations against
Dr. Luketich as well as a recording and transcript of what turned out to be
the…wiretap.” Id. at ¶ 283. Recall that the recording captured confidential, sensitive
information protected by doctor-patient privilege. ECF 70-3, ¶ 321. Ultimately, “a
reasonable person would have foreseen the consequences” of disseminating this
information. Fed. Ins. Co. v. Potamkin, 961 F. Supp. 109, 112 (E.D. Pa. 1997). So the
acts were “intentional” under both caselaw and the policy’s terms. Therefore,
considering only the four corners of the third-party complaint and the policy’s terms,
the intentional acts exclusion applies.7

7 Dr. D’Cunha also argues that the underlying complaint accuses him of defamation
by reckless and negligent conduct. But the Court finds that the allegations of
recklessness and negligence are passing legal characterizations, and so hold no
weight. First Liberty Ins. Corp. v. MM, 259 F. Supp. 3d 264, 269 (E.D. Pa. 2017) (“The
law is settled that the mere allegation of negligence through ‘artful pleading’ is not
sufficient to trigger an insurer’s duty to defend.” (citations omitted)), aff’d 745 F.
App’x 195 (3d Cir. 2018).
But the exclusion doesn’t stop there; it has an exception, which provides:
We do cover such damages if the act was intended to protect people or
property unless another exclusion applies.
ECF 30, p. 194.
In assessing an exception to an exclusion, the insured bears the burden of
proving an exception’s applicability. Air Prod. & Chemicals, Inc. v. Hartford Acc. &
Indem. Co., 25 F.3d 177, 180 (3d Cir. 1994) (citations omitted).
Dr. D’Cunha attempts to meet this burden by arguing that he was a
whistleblower, and much of the alleged defamatory statements were done to protect
others, including patients. For evidence, he points to some of the alleged defamatory
statements themselves. Chubb counters by arguing that the “four corners” of the
underlying complaint say nothing about Dr. D’Cunha’s intent to protect others, and
so cannot be raised now.
After careful consideration, the Court believes it needs extrinsic evidence to
determine whether this exception to the exclusion applies. Chubb is right that Dr.
Luketich very expressly pleads in his underlying complaint that the conduct was done
with the intent to harm him, not to protect others. ECF 70-3, ¶ 344 (alleging that
Drs. D’Cunha and Schaheen did not act for any legitimate public safety or patient
care interest”). But that is to be expected. In the Court’s estimation, plaintiffs would
rarely, if ever, concede an alternate benevolent purpose for actions that allegedly
caused them harm, as this might undermine their claims. Therefore, if a court were
only permitted to consider the four corners of the complaint, it could almost never
find that an exception to an exclusion applies, and any obligation to defend under
such an exception would effectively be illusory.
While the Court acknowledges that the “four corners” rule almost always
applies, this is the rare case where extrinsic evidence is necessary to discern whether
any of the underlying conduct was done with the intent to protect other parties. “[I]n
cases…where the insured bears the burden of showing that an exception to an
exclusion applies, the court may consider extrinsic evidence to determine whether
there is a duty to defend.” Foremost Inst. Co. v. Nosam, LLC, 343 F. Supp. 3d 448,
455 (E.D. Pa. 2018) (citing Air Products, 25 F.3d at 180); cf. Nat’l Fire Ins. Co. of
Hartford v. Robinson Fans Holdings, Inc., No. 10-1054, 2011 WL 2842303, at *7 (W.D.
Pa. July 18, 2011) (Ambrose, J.) (holding that the court should not consider extrinsic
evidence because the case “did not involve exclusions or exceptions thereto”). Though
this rule “appears to be one-sided[,] [t]his construction against the insurer and in
favor of the insured…is consistent with general insurance law principles and, in
particular, the Pennsylvania rule that requires only a ‘potential’ of coverage of the
allegations in the complaint for the duty to defend to be triggered.” Air Products, 25
F.3d at 180. Note, though, that the insurer, too, is permitted to use extrinsic evidence
in these circumstances; it may use it to prove that “no exception to the exclusion
applie[s],” though not “to support the application of the exclusion.” Haines v. State
Auto Prop. & Cas. Ins. Co., 417 F. App’x 151, 153 (3d Cir. 2011) (emphasis added).
This makes sense. Just as courts must look to a complaint’s underlying factual
allegations to ensure that parties don’t use “artful pleadings designed to avoid
exclusions in liability insurance policies,” Erie Ins. Exch. v. Moore, 228 A. 3d 258, 266
(Pa. 2020) (quoting Mut. Ben. Ins. Co. v. Haver, 725 A.2d 743, 745 (Pa. 1999)), so too
should courts be wary of “artful pleadings” designed to promote a public relations
narrative and potentially avoid exceptions to exclusions. See Unitrin Direct Ins. Co.
v. Esposito, 280 F. Supp. 3d 666, 671-72 (E.D. Pa. 2017) (“If a court could not look
beyond the complaint in the underlying allegation alleging that the insured assaulted
the plaintiff, an insured claiming self-defense could not invoke a duty to defend.”).8

8 In an unpublished, non-binding opinion, the Third Circuit reversed this case on
other grounds. 751 F. App’x 213 (3d Cir. 2018). But two panel members wrote in
dicta that the district court had also “erred by looking beyond the allegations of the
underlying complaint to consider Esposito’s claim that he acted in self-defense.” Id.
Dr. D’Cunha points to certain evidence outside of the record, arguing that he
acted with the intent to protect others. But the parties in this case had previously
agreed to proceed without taking discovery and by arguing that the “four corners”
rule applies. The Court finds that it would be inappropriate and unfair to go outside
of the “four corners” at this point, without giving both sides an opportunity to take
discovery or to otherwise supplement the record with appropriate extrinsic evidence.
For these reasons, the Court will deny the cross-motions on the duty to defend
under the Chubb policies, without prejudice to the parties refiling their motions after
conducting discovery and supplementing the record.

at 215-16. Esposito, however, is distinguishable from this one. This case falls
squarely within Air Products – that is, “potential coverage [is] a given and extrinsic
evidence [would be] considered only in connection with proffered exceptions to
exclusions, not the threshold question of whether there was coverage in the first
place.” Id. at 216 n.3 (cleaned up); accord Lupu v. Loan City, LLC, 903 F.3d 382, 392
(3d Cir. 2018) (“[W]e may not look for a covered claim beyond the four corners of [the]
complaint[.]” (emphasis added)); Burchick Const. Co. v. Harleyville Preferred Ins. Co.,
No. 1051 WDA 2012, 2014 WL 10965436, at *6 (Pa. Super. Mar. 10, 2014) (holding
that a court should not consider extrinsic evidence when “there is no dispute in this
case that, based solely upon the Underlying Complaint, [insurer] does not owe…
coverage”).
CONCLUSION
For the foregoing reasons, Dr. D’Cunha’s motion for partial summary judgment
against Tri-Century is GRANTED. Tri-Century’s cross-motion for judgment on the
pleadings is DENIED. Crestbrook’s and Dr. Schaheen’s motions for partial summary
judgment are both GRANTED.
Chubb’s motion for judgment on the pleadings is DENIED without prejudice.
Dr. D’Cunha’s motion for partial summary judgment as to the Chubb policies is also
DENIED without prejudice. An appropriate order follows.

DATE: July 31, 2023 BY THE COURT:

/s/ J. Nicholas Ranjan
United States District Judge

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10418965. Public record. Not legal advice.