The United States District Court for the Middle District of Florida denied a policyholder's motion to dismiss a declaratory judgment action for lack of ripeness. Executive Risk Specialty Ins. Co. v. Blue Cross & Blue Shield of Florida, 2007 WL 4206642 (M.D. Fla. Nov. 27, 2007).
The policyholder sought coverage under its Managed Care Errors & Omissions Liability Policy for three lawsuits brought against it for allegedly mishandled medical claims. At the time of the decision, the policyholder had settled one of the underlying actions, and the other two were still pending. The policyholder treated the three actions as related and did not segregate the costs of defense for each action as the insurer had requested. In response, the insurer filed the instant declaratory judgment action and sought a declaration that the policy afforded no coverage for the settlement or for unreasonable and unnecessary defense expenses. The policyholder moved to dismiss the declaratory judgment because "it is not ripe for adjudication." The policyholder also asserted that "information developed in the [coverage action] may have an adverse impact on its ability to defend [the pending underlying actions]."
The court denied the motion, holding that the case "is clearly ready for review as there is a concrete and immediate demand from [the policyholder] for defense expenses . . . and settlement . . . ." In so holding, the court noted that the policyholder "is the architect of its own angst" and could "obviate the need for this Declaratory Action immediately by providing [the insurer] with a detailed and action specific accounting of the defense expenses billed to date and by dropping its demand for immediate payment of those expenses under the Policy. The Court will not step in to aid [the policyholder], when it has not exercised the self-help available to it."