KOLLI v. (And a Third-Party Action.) (2026)

MEMORANDUM:

The order of the Appellate Division should be affirmed, without costs, and the certified question not answered as unnecessary.

In 2011, decedent Dr. Venkateswara Kolli treated a patient as part of his duties pursuant to an on-call, per diem physician employment agreement with defendant Kaleida Health.  The patient subsequently commenced a medical malpractice action against Dr. Kolli and Kaleida.  Dr. Kolli filed an insurance claim with his primary medical malpractice insurer, MLMIC Insurance Company (MLMIC), as well as his excess insurer Healthcare Professionals Insurance Company (HPIC).  The underlying medical malpractice action settled after Dr. Kolli's death.  Kaleida, MLMIC, and HPIC agreed to fund the settlement while reserving their rights to determine insurance coverage and priority of coverage.  This declaratory judgment action to determine those coverage issues ensued.

We agree with the lower courts that Dr. Kolli is covered pursuant to the unambiguous terms of Kaleida's self-insurance plan (SIP) and Kaleida's employment agreement with Dr. Kolli.  Kaleida's SIP expressly stated that physicians employed by Kaleida for the purpose of providing patient care are “covered persons” while “acting on behalf of, or at the direction of” Kaleida.  And section 6(a) of Dr. Kolli's employment agreement with Kaleida unambiguously provided that he would be covered by Kaleida's SIP when acting pursuant to the employment agreement, as he was when he treated the patient at a Kaleida facility pursuant to his duties as a Kaleida on-call physician.  We agree with the lower courts that Kaleida's proposed reading of section 6(b)(ii) of the employment agreement is not reasonable because it would render other provisions of the employment agreement a nullity.  Specifically, Kaleida's proposed interpretation would mean that Dr. Kolli was never covered under the SIP, despite the unambiguous terms to the contrary in section 6(a) of the employment agreement.  Instead, we agree with the Appellate Division that the only reasonable interpretation of section 6(b)(ii) is that it applied when Dr. Kolli treated his private practice patients at a Kaleida facility, as opposed to patients he treated for the first time while performing his on-call duties for Kaleida.

With respect to priority of coverage, we reject Kaleida's contention that its SIP falls outside the “other insurance” clauses in the policies issued by MLMIC and HPIC. Kaleida's SIP was an insurance policy:  it protected physicians such as Dr. Kolli and others against risk, required reporting of claims, and contained terms regarding priority of coverage and coverage exclusions.  It was not merely a “self-insurance mechanism” for Kaleida to pay its own judgments (cf.  Guercio v. Hertz Corp., 40 N.Y.2d 680, 684, 389 N.Y.S.2d 568, 358 N.E.2d 261 [1976] ).  Moreover, the “other insurance” clauses contained within the MLMIC and HPIC policies expressly encompassed “insurance equivalent[s]” or “equivalent coverage.”  Even if the SIP was not “insurance,” it was at a minimum an “equivalent” thereto.

We further agree with the Appellate Division, for the reasons stated by that Court, that Kaleida's coverage is excess to MLMIC's coverage, and that Kaleida and HPIC are responsible for excess coverage on a pro rata basis (see Kolli v. Kaleida Health, 229 A.D.3d 1303, 1306-1307, 216 N.Y.S.3d 400 [4th Dept. 2024];  see generally Lumbermens Mut. Cas. Co. v. Allstate Ins. Co., 51 N.Y.2d 651, 655, 435 N.Y.S.2d 953, 417 N.E.2d 66 [1980] ).  The parties’ remaining arguments are without merit.  We do not address HPIC's contentions regarding MLMIC's or Kaleida's policy limits because HPIC is a non-appealing party (see generally Hecht v. City of New York, 60 N.Y.2d 57, 60, 467 N.Y.S.2d 187, 454 N.E.2d 527 [1983] ).

Order affirmed, without costs, and certified question not answered as unnecessary, in a memorandum.

 Chief Judge Wilson and Judges Rivera, Garcia, Singas, Cannataro, Troutman and Halligan concur.