TAYLOR, JUDGE.
Healthcare Underwriters Group (Healthcare Group) brings this appeal from an October 18, 2012, Judgment of the Fayette Circuit Court upon a petition for declaration of rights to adjudicate entitlement to insurance coverage. We affirm.
In June 2006, Margaret Strange filed a complaint against, inter alios, Dr. Charles R. Combs (Action No. 06-CI-2585). Strange claimed that Dr. Combs breached the standard of care while operating upon her thumb on August 10, 2005. As a direct result of Dr. Combs' professional negligence, Strange alleged that she endured additional medical procedures, pain and suffering, lost wages, and permanent injury.
While the medical malpractice action was pending, Healthcare Group filed a Petition for Declaration of Rights (Action No. 08-CI-0332) and named, inter alios, Strange as a defendant. Healthcare Group had provided a professional liability insurance policy to Dr. Combs which coverage was effective during the time of his operation on Strange. In the petition, Healthcare Group maintained that an exclusion (Exclusion B) in the professional liability policy was triggered by Dr. Combs' violation of sundry medical licensure laws through his use of controlled substances during the operation. Consequently, Healthcare Group sought an adjudication that Exclusion B legally operated to bar coverage in connection with Dr. Combs' surgery on Strange.
By Opinion and Order entered September 26, 2012, in the declaratory judgment action, the circuit court determined that coverage under the professional liability policy was not excluded by Exclusion B:
Subsequently, the circuit court rendered a final judgment on October 18, 2012, thus precipitating this appeal.
Healthcare Group contends that the circuit court erred by denying its motion to dismiss Strange as a party to this declaratory judgment action. Specifically, Healthcare Group alleges that Strange was not a party to its contract of professional liability insurance with Dr. Combs and possesses no interest that would be affected by the petition for declaration of rights.
The record reveals that Healthcare Group filed its petition for declaration of rights on January 23, 2008, and specifically named Strange as a defendant. Over a year later, on May 15, 2009, Healthcare Group then filed a motion to dismiss Strange as a party due to lack of standing.
Our Supreme Court recently held that "the lack of standing is a defense which must be timely raised or else will be deemed waived." Harrison v. Leach, 323 S.W.3d 702, 708 (Ky. 2010). Considering the procedural facts herein, Healthcare Group did not timely raise the lack of standing issue. It is undisputed that Healthcare Group named Strange as a party in the complaint and, thereafter, waited for well over a year to file a motion seeking to dismiss her as a party. Considering the facts herein, we conclude that Healthcare Group waived the issue of standing and that the circuit court properly denied Healthcare Group's motion to dismiss Strange as a party.
Healthcare Group next argues that the circuit court improperly interpreted Exclusion B of the professional liability policy. In particular, Healthcare Group maintains:
Healthcare Group's Brief at 7-10.
It is well-established that the interpretation and construction of an insurance contract is generally an issue of law for the court. Stone v. Ky. Farm Bureau Mut. Ins. Co., 34 S.W.3d 809 (Ky. App. 2000). When the terms of an insurance contract are ambiguous, such terms should be interpreted against the drafter and in favor of effectuating coverage. Bituminous Cas. Corp. v. Kenway Contracting, Inc., 240 S.W.3d 633 (Ky. 2008); Ky. Farm Bureau Mut. Ins. Co. v. McKinney, 831 S.W.2d 164 (Ky. 1992).
Resolution of this issue revolves around the proper interpretation of Exclusion B. Exclusion B provides:
This policy does not cover:
We view Exclusion B to be ambiguous. Healthcare Group urges this Court to adopt a broad interpretation of Exclusion B. This broad interpretation would effectively exclude coverage for "medical negligence if that negligence also resulted in violation of professional licensure laws." Healthcare Group's Brief at 7. We decline to do so. Rather, we interpret Exclusion B as barring only "liability" directly resulting from violation of the professional licensure laws. We do not interpret Exclusion B as concomitantly barring "liability" resulting from the insured's commission of the tort of medical negligence even if a violation of professional licensure laws simultaneously occurred. In a medical malpractice action, liability results from the insured's negligence, not from the insured's violation of professional licensure laws. This distinction is pivotal. Therefore, we conclude that Exclusion B does not operate to exclude coverage for liability resulting from the tort of negligence allegedly committed by Dr. Combs during his operation upon Strange.
Healthcare Group also asserts that the circuit court erred by denying its motion to amend the declaratory complaint. On March 6, 2012, Healthcare Group filed a motion to amend its complaint and sought to additionally claim that the professional liability policy was subject to recission under the terms of the policy and under Kentucky Revised Statutes (KRS) 304.14-110.
Kentucky Rule of Civil Procedure (CR) 15.01 governs amendment of a pleading; it reads:
In this case, the record reflects that Healthcare Group filed the motion to amend the complaint only after Strange filed a responsive pleading. As a responsive pleading had been filed, the amendment of Healthcare Group's complaint was not automatic but was rather discretionary under CR 15.01. See Graves v. Winer, 351 S.W.2d 193 (Ky. 1961).
In determining whether to permit the amendment, the circuit court may consider factors such as "the failure to cure deficiencies by amendment . . ., the futility of the amendment, . . . prejudice [to] the opposing party or . . . injustice." Kenney v. Hanger Prosthetics & Orthotics, Inc., 269 S.W.3d 866, 869 (Ky. 2007) (citations omitted). And, it is ultimately within the discretion of the circuit court to allow an amendment to the pleading, and such ruling will not be disturbed on appeal absent an abuse of discretion. Id.
It must be pointed out that Healthcare Group's motion to amend was filed in 2012, some four years after it filed the original complaint in 2008. Moreover, the record reveals that the facts underlying the motion to amend were readily discernable and discoverable in 2008. And, Strange has set forth facts demonstrating prejudice:
Strange's Brief at 11-12. Upon consideration of the whole, we are unable to conclude that the circuit court abused its discretion by denying Healthcare Group's motion to amend the complaint.
For the foregoing reasons, the Judgment of the Fayette Circuit Court is affirmed.
ALL CONCUR.