A world-renowned metallurgy professor from the Massachusetts Institute of Technology (MIT) recently lost his appeal against Safety Insurance seeking a defense under his homeowners and umbrella policies for a bizarre attempt by a plaintiff’s attorney to have him render an expert opinion for free.
The professor, Thomas W. Eager (Dr. Eager), had refused to have his deposition taken in a product liability lawsuit where he was neither hired as an expert nor had any knowledge of the allegedly defective product. After the plaintiff’s attorney moved to compel his deposition and served him with a draft lawsuit seeking damages, Dr. Eager sought defense coverage under his homeowner and umbrella coverage from Safety for the $146,000 in legal fees he had to spend warding off the aggressive attorney’s attempts to depose him as a “percipient witness.”
After Safety denied coverage, Dr. Eager sued Safety unsuccessfully in the Superior Court for coverage. On appeal, the Appeals Court assuming, without deciding, that the subpoena and the draft complaint asserted claims, found that for purposes of homeowners coverage, the claims against Dr. Eager did not allege bodily injury as required. On the broader umbrella coverage, the Court found no coverage because while the umbrella policy covered any negligence claim, Dr. Eager’s justified refusal to be deposed was intentional, not negligent.
The Chicago product liability suit and Dr. Eager’s $146,000 in out-of-pocket legal fees
Dr. Eagar is a professional engineer and member of the faculty at MIT, where he has taught for more than 43 years. Dr. Eager is a member of the National Academy of Engineering and a world-recognized expert in the field of materials science.
In 2016, Kurtis M. Bailey (Mr. Bailey) filed a lawsuit against Worthington Cylinder Corporation (Worthington) in the Federal Court sitting in Chicago. According to the lawsuit, certain gas cylinders made by Worthington had metallurgical defects that caused Mr. Bailey to sustain bodily injury.
In July 2017, Mr. Bailey’s lawyer contacted Dr. Eager to testify, not as an expert but as a “percipient witness.”
When Mr. Bailey’s lawyer initially requested that Dr. Eagar make himself available while he was in Idaho with his family, Dr. Eagar was willing to comply. However, after disagreements arose between the parties’ attorneys regarding document production requests and the deposition’s scope, Dr. Eagar canceled the Idaho deposition.
Mr. Bailey’s lawyer responded to the cancellation by filing a motion to compel with the Court and serving Dr. Eager, on July 29, 2017, with a subpoena for his deposition in Boise, Idaho.
Dr. Eagar then hired a Boston attorney to help with this situation. In good faith, Dr. Eager’s Boston attorney tried to persuade Mr. Bailey’s lawyer to agree to a Boston deposition date for Dr. Eager.
Mr. Bailey’s lawyer’s response was to forward, on August 3, 2017, a supplementary complaint to Dr. Eagar’s lawyer, which falsely claimed that Dr. Eagar worked for Worthington.
The supplementary draft complaint had two causes of action alleged. The first cause of action erroneously claimed that Dr. Eager tested the gas cylinders for Worthington and asked for a ruling establishing that Eager’s acts were attributable to Worthington under a respondeat superior theory. The second cause of action sought damages for Dr. Eager’s alleged “obstruction” in canceling his deposition.
In response to the deposition notice and the draft supplementary complaint, Dr. Eager hired Chicago counsel to move to quash the deposition subpoena.
After a hearing and argument before the United States District Court for the Northern District of Illinois on August 17, 2017, the Court quashed the deposition subpoena for Dr. Eager.
Unfortunately for Dr. Eager, Mr. Bailey’s attorney still pursued, with over forty subsequent pleadings, briefs, and motions, the testimony of Dr. Eager in the Bailey lawsuit. Eventually, Dr. Eager filed for sanctions against Mr. Bailey’s attorney.
Finally, on June 6, 2022, after expending over $146,000 of his personal funds, Dr. Eagar agreed to a court order “to release his claim for sanctions…in exchange for which Mr. Shalaby [Mr. Bailey’s attorney] will agree not to have any further contact with Dr. Eagar, and further agrees not to disparage Dr. Eagar in any way.”
Safety denies coverage for no damage claim, no bodily injury, and the business pursuits exclusion
Dr. Eagar had an in-force homeowners and umbrella policy with Safety. He immediately informed Safety of the supplemental complaint designating him as a direct defendant in the Bailey case after his attorney received it.
With his notice of the supplementary complaint, he requested that Safety defend and indemnify him under the terms of his policies and reimburse him for his legal fees to date.
Safety denied Dr. Eager request for defense and reimbursement, stating that his claim did not come within either policy’s coverage as alleging a claim for damage or bodily injury. Also, Safety asserted that Dr. Eagar’s policies’ business pursuits exclusions applied because the claims “arise out of your business insofar as they are explicitly based on your alleged acts or omissions in your trade, profession, or occupation.”
Superior Court dismisses Dr. Eagers’ lawsuit, and he appeals
Dr. Eager sued Safety for coverage in the Superior Court. The Superior Court allowed Safety’s motion to dismiss, alleging that its policies provided no coverage for Dr. Eagers’ claims.
Dr. Eager appealed the Superior Court’s decision to the Appeals Court.
The Appeals Court’s decision
The Appeals Court dealt with Dr. Eager’s appeal in two parts: First, it analyzed his homeowner policy and then his umbrella policy.
For the purposes of rendering its decision, the Court presumed, without deciding, that one or both of the counts in the unfiled supplementary complaint and the deposition subpoena constituted claims for damages.
Dr. Eager’s claim for coverage under his homeowner policy with Safety
Dr. Eager’s homeowner policy afforded personal liability coverage “[i]f a claim [was] made or a suit [was] brought against an ‘insured’ for damages because of ‘bodily injury’ or ‘property damage’ caused by an ‘occurrence.’” Since Dr. Eager did not assert that there were any allegations of property damage, the only question for the Court was whether any of Mr. Bailey’s claims against Dr. Eager were for “bodily injury” arising from an “occurrence.”
On the first cause of action in the unfiled supplementary complaint where Mr. Bailey asserted that Worthington was liable for Dr. Eager’s activities to the extent they contributed to Mr. Bailey’s asserted injuries, there was, in the Court’s opinion, clearly no coverage. This count alleged liability against Worthington, claiming that it was liable for Dr. Eager’s alleged actions as an employee on a respondeat superior theory. Since this count alleged liability against Worthington, and not Dr. Eager, for Mr. Bailey’s alleged bodily injuries, this claim was not one against Dr. Eager.
Dr. Eager’s argument on the second cause of action in the supplemental complaint and the demand for a deposition was that the subpoena and the damage claim against him were directly tied to Mr. Bailey’s alleged bodily injury.
The Appeals Court, however, rejected that argument noting that there was no personal liability coverage under Dr. Eager’s homeowner policy for the deposition subpoena or the unfiled supplemental complaint if any claims against him were made because he refused to testify rather than due to bodily injury brought on by an accident or “occurrence.”
The Court found that any allegations made against Dr. Eager in the second count of the supplemental complaint arose from a completely unrelated source: His reluctance to testify.
To the Court, the bodily injury alleged and the claim for coverage had to have a “reasonably evident causal link.” Here, even if the Court broadly interpreted the term “because of” to imply “arising out of,” there was no causal connection between the Bailey case’s alleged bodily injuries and Dr. Eager’s refusal to testify in a deposition.
The ruling on Dr. Eager’s umbrella policy
After finding no coverage under Dr. Eager’s homeowner policy, the Court addressed Safety’s umbrella policy, insuring Dr. Eager.
The umbrella policy coverage provision stated:
This is a liability policy. It covers only somebody else’s claim against you or your family because you . . . were negligent.
Again, the Court assumed that the unfiled supplementary complaint and the deposition subpoena amounted to claims. However, in the case of the umbrella policy, the Court, in applying the policy, stated it had to determine if any allegations made against Dr. Eager in these putative claims were alleged negligent conduct by Dr. Eager that would trigger the umbrella policy’s coverage.
The Court, on the first count of the unfiled supplementary complaint, reiterated that there could be no coverage under either the homeowner or umbrella policy because Dr. Eager was not the subject of the first cause of action in the unfiled supplemental complaint.
As to the deposition subpoena, the Court noted that the attorney for Mr. Bailey issued the subpoena to Dr. Eager after he refused to testify in a case about which he had no knowledge.
While the Court agreed that Dr. Eager may have had a valid reason for his action in refusing to testify, Dr. Eager’s refusal to testify was an intentional act on his part and not an act that had any indication of negligence.
Likewise, the Court found that although the unfiled supplementary complaint’s second cause of action spoke of Dr. Eager’s “acts of negligence,” the source of the claimed liability clearly arose from the intentional act of Dr. Eager in canceling his noticed deposition and not from any negligence.
Accordingly, the Court concluded there was no personal liability coverage under the umbrella policy for the deposition subpoena or the unfiled supplemental complaint because none of the accusations made against Dr. Eager were based on negligence, as required by the umbrella policy.
Dr. Eager does not seek further appellate review
Dr. Eager had twenty days to file an application for further appellate review with the Supreme Judicial Court of the Appeals Court’s adverse decision. The twenty days have expired, and the decision in favor of Safety is final.
Reprints, or use of this article in any way on another website should include an attribute to Owen Gallagher and a link to Agency Checklists. Thank you.
Insurance Coverage Legal Expert/Co-Founder & Publisher of Agency Checklists
Over the course of my legal career, I have argued a number of cases in the Massachusetts Supreme Judicial Court as well as helped agents, insurance companies, and lawmakers alike with the complexities and idiosyncrasies of insurance law in the Commonwealth.
Connect with me directly, by calling me at 617-598-3801.