United States District Court, D. Colorado
FINDINGS OF FACT, CONCLUSIONS OF LAW, AND
RAYMOND P. MOORE UNITED STATES DISTRICT JUDGE
trial on this matter was held before the Court on January 8,
2019. Plaintiff Evanston Insurance Company tried its unjust
enrichment claim against Defendant Jonathan Lee, M.D. After
the trial, the Court took the matter under advisement and
ordered the parties to submit proposed findings of fact and
conclusions of law. The parties filed their proposals on
January 18, 2019. (ECF Nos. 297, 298.) Having reviewed the
evidence presented, the post-trial submissions, applicable
law, and arguments of counsel, the Court now enters its
Findings of Fact, Conclusions of Law, and Order.
litigation involves a coverage dispute between an insurance
carrier and those claiming benefits under an insurance policy
it had issued. Plaintiff Evanston Insurance Company
(“Plaintiff” or “Evanston”) filed the
operative amended complaint against defendants Aminokit
Laboratories, Inc. (“Aminokit”), Tamea Rae Sisco
(“Sisco”), and Jonathan Lee, M.D
(“Lee”) (collectively referred to as “the
Defendants”). (ECF No. 46.) This coverage action stems
from an earlier civil lawsuit in which the Defendants were
sued by a former patient. In the underlying lawsuit, Lee
sought benefits (defense and indemnity) under the policy.
case, Evanston alleges two claims for relief against Lee: (1)
declaratory judgment; and (2) unjust enrichment for $26,
407.36 paid in defense costs and $260, 000.00 paid for
settlement of the underlying lawsuit. Before trial, the Court
granted Evanston summary judgment against Lee on the
declaratory judgment claim, declaring that Evanston owed no
duty to defend or indemnify Lee in the underlying lawsuit.
(ECF No. 267.) The Court also granted Evanston summary
judgment as to the claim that Lee was unjustly enriched by
its payment of defense costs in the amount of $26, 407.36.
(Id. at 19.) Thus, only two issues remained for
trial to the Court: (1) whether Evanston could recover the
$260, 000 settlement payment from Lee under its unjust
enrichment claim; and (2) if so, whether Lee is jointly and
severally liable for the entire $260, 000. The Court now
turns to the resolution of these two remaining issues.
FINDINGS OF FACT
extent that any conclusions of law are deemed to be findings
of fact, they are incorporated herein by reference as
findings of fact.
Evanston issued policy no. SM903576 (the
“Policy”) to Aminokit for policy period October
19, 2014 to December 19, 2015. The Policy contained two
Coverage Parts: Specified Medical Professions Professional
Liability Insurance - Claims Made Coverage affording limits
of $1, 000, 000 Each Claim and $3, 000, 000 Aggregate; and
Specified Medical Professions General Liability (Including
Products and Completed Operations Liability) Insurance -
Claims Made Coverage affording limits of $1, 000, 000 Each
Claim, $3, 000, 000 Aggregate.
July 20, 2015, Brandon Lassley, and his mother, Julia Walker,
filed a lawsuit in the United States District Court for the
District of Colorado, Case No. 15-cv-1531
(“Lassley”). The Lassley
lawsuit named the following four defendants: Aminokit
Laboratories, Inc.; Tamea Rae Sisco, individually and as
beneficial owner of Aminokit; Jonathan Lee, MD; and White
Lodging Services Corporation.
Lassley complaint identified Lee as a medical
doctor, the medical director of Aminokit, and the only
employee who was medically trained. Defendant Lee is alleged
to have had knowledge of and participated in the fraudulent
scheme that was being perpetrated against Aminokit's
unsuspecting patients. Lassley and his mother alleged that
Aminokit was little more than an amalgamation of
misrepresentations, fraud, and unlicensed medical care in an
unsafe environment (treating patients at a Fairfield Inn) and
that its employees held themselves out as having medical
training and expertise when, in actuality, they did not.
initial Lassley complaint advanced three claims for
relief against Lee:
a. The first claim against Defendant Lee asserted violations
of the Racketeer Influenced Corrupt Organizations Act
(“RICO”), 18 U.S.C. § 1961, et seq.
The conduct that undergirds the RICO claim pertaining to
Defendant Lee was his participation in the submission of
fraudulent insurance claims via wire and mail;
b. The second claim against Lee accused him of being part of
a civil conspiracy with respect to his participation in the
fraudulent enterprise; and
c. The third claim alleged that Defendant Lee breached a
fiduciary duty he owed to the patients of Aminokit by failing
to provide adequate treatment by licensed professionals.
Lassley plaintiffs sought to hold the four named
defendants jointly and severally liable.
After being served with the Lassley complaint, Lee
requested defense coverage and indemnification from Evanston
under the Policy.
letter dated August 28, 2015, Evanston denied Lee coverage
for all claims advanced against him in the initial
October 15, 2015, the plaintiffs in the Lassley
lawsuit amended the complaint to add a fourth claim against
Lee (and other defendants) for negligence.
amended complaint in the Lassley case alleged that
Lee was negligent because, as a treating physician to the
patients at Aminokit, he owed his patients a duty to ensure
that they received adequate and appropriate medical care, but
breached this duty.
again requested coverage for the claims asserted against him
in the amended Lassley complaint.
response to the amended Lassley complaint, Evanston
supplemented its coverage position with a letter dated
December 8, 2015. In the supplemental coverage letter,
Evanston reiterated its position that no coverage existed,
but stated that it would provide a defense to Lee, subject to
a full reservation of its rights, specifically including the
right to withdraw the defense and the right to pursue
reimbursement. Lee requested that attorney Dick Waltz
represent and defend him in the Lassley case;
Evanston agreed to (and paid for) Mr. Waltz's
representation of Lee.
December 9, 2015, Evanston filed this declaratory judgment
action against Aminokit, Sisco, and Lee seeking a