James A. Hoffman, M.D., et al., Appellants,

This opinion is nonprecedential except as provided by
Minn. R. Civ. App. P. 136.01, subd. 1(c).

STATE OF MINNESOTA
IN COURT OF APPEALS
A24-0276

James A. Hoffman, M.D., et al.,
Appellants,

vs.

MMIC Insurance, Inc.,
Respondent.

Filed October 14, 2024
Affirmed
Larkin, Judge

Hennepin County District Court
File No. 27-CV-23-4970

Paul A. Sortland, Sortland Law Office, PLLC, Minneapolis, Minnesota (for appellants)

Mark D. Malloy, Meissner Tierney Fisher & Nichols, S.C., Milwaukee, Wisconsin; and

C. Todd Koebele, Lindsey A. Streicher, Haws -KM, P.A., St. Paul, Minnesota (for
respondent)

Mark R. Whitmore, Bassford Remele, P.A., Minneapolis, Minnesota (for amici Minnesota
Medical Association, American Medical Association, and Society of Aesthetic Plastic
Surgery)

Considered and decided by Larkin , Presiding Judge; Smith, Tracy M. , Judge; and
Harris, Judge.

2
NONPRECEDENTIAL OPINION
LARKIN, Judge
Appellant-surgeon challenges the district court’s summary dismissal of his claims
against respondent-insurer for breach of the contractual duty to defend and breach of the
implied covenant of good faith and fair dealing. Because insurer had no duty to def end
and because surgeon’s claim for breach of the covenant of good faith and fair dealing is
based on insurer’s alleged breach of the duty to defend, summary judgment was
appropriate. We therefore affirm.
FACTS
Appellant Dr. James A. Hoffman is a plastic surgeon who has worked in a solo
practice in Minnesota since 2000. 1 His wife, Veronica Hoffman, is the practice’s office
manager. Respondent MMIC Insurance , Inc. issued Dr. Hoffman and his practice a
“Medical Professional Liability Insurance Claims -Made and Reported” insurance policy.
The policy states, in relevant part:
• We will pay damages an insured is legally required to
pay as a result of a medical incident that happens on or
after the applicable prior acts date and before the
expiration date of this insurance.

• We will pay legal expenses we incur in the investigation
or defense of a claim covered by this insurance.

• We have the right to control the defense of and retain an
attorney to defend any claim covered by this insurance.

1 Both Dr. Hoffman and his practice were plaintiffs in the underlying matter and are
appellants in this appeal. For purposes of brevity, we generally refer to Dr. Hoffman
without also mentioning his practice.
3
The policy defines a “medical incident” as “ an adverse or unanticipated outcome
resulting from professional services that were, or should have been, provided by an insured
or by a person for whom the insured is liable.” The policy defines “professional services”
as “medica l care or treatment provided to a patient, a medical opinion rendered by an
insured, decisions made that require the specialized skill, training or judgment of a health
care professional, or peer review service.”
The policy contains coverage exclusions. A “criminal or knowingly wrongful acts”
(wrongful-acts) exclusion states, “This insurance does not apply to any claim arising out
of a criminal, willful, malicious, fraudulent, dishonest or knowingly wrongful act
committed by or with the knowledge of the insured.” A “violation of law” exclusion states,
“This insurance does not apply to any claim arising out of the violation of any local, state
or federal statute, rule or regulation.”
According to the underlying complaint, in July 2020, Christina Ginther, a
transgender woman, contacted Dr. Hoffman’s practice seeking information about a breast-
augmentation procedure. Ginther spoke to Veronica, who conducted an intake interview.
During the interview, Ginther revealed that she had previously scheduled an appointment
with Dr. Toby Meltzer. After the call, Veronica learned that Dr. Meltzer specializes in
gender-reassignment surgery. Veronica then sent the following email to Ginther referring
her to the University of Minnesota:
Thank you for calling, nice talking with you! I just wanted to
check with you, since you had mentioned your contact with Dr.
Meltzer in Arizona. Dr. Hoffman does not do any gender
reassignment surgery, including breast augmentation. If you
are looking for that service here we recommend the University
4
of Minnesota Department of Plastic Surgery. That is a much
more difficult operation and should be performed by those who
specialize in that procedure. Please confirm with me or let me
know if I was mistaken. We would like you to be connected to
the surgeon . . . that can do the best operation for you.

In early 2021, Ginther sued Dr. Hoffman and his practice , alleging two counts of
discrimination under the Minnesota Human Rights Act (MHRA) . Specifically, Ginther
alleged that Dr. Hoffman discriminated against her based on her sexual orientation by
refusing to perform her breast augmentation. Dr. Hoffman asserted a counterclaim against
Ginther for defamation.
Dr. Hoffman tendered Ginther’s discrimination claims to MMIC for defense.
MMIC refused to defend for two reasons: (1) there was no initial grant of coverage because
Ginther’s allegations did not constitute a “medical incident” or concern a “professional
service” and (2) coverage was excluded under the wrongful -acts and violation -of-law
policy exclusions.
The Ginther lawsuit resolved after the district court summarily dismissed Ginther’s
claims against Dr. Hoffman and Dr. Hoffman settled his defamation claim against Ginther.
After which, Dr. Hoffman sent MMIC another letter, again alleging that Ginther’s s uit
against Dr. Hoffman was covered under its policy. When MMIC continued to deny
coverage, Dr. Hoffman sued MMIC alleging breach of the contractual duty to defend and
breach of the implied covenant of good faith and fair dealing. 2

2 Another claim was dismissed by stipulation of the parties.
5
The parties filed cross-motions for summary judgment in Dr. Hoffman’s suit against
MMIC. In the summary-judgment proceedings, Dr. Hoffman argued that Ginther’s lawsuit
was based on a “medical incident,” that it was therefore covered under the policy, and that
no policy exclusion applied. Dr. Hoffman also argued that he presented MMIC with
evidence demonstrating that Ginther’s “underlying claims constituted a covered ‘medical
incident’ under the policy to which no exclusions applied ” and that MMIC acted in bad
faith “[b]y ignoring the evidence in order to refuse to defend its insureds.”
MMIC acknowledged that it “ contracted to defend and indemnify Dr. Hoffman
against claims brought by patients for injury compensation related to adverse or unforeseen
results of ‘medical incidents’ or ‘professional services.’” But MMIC argued that Ginther’s
discrimination lawsuit presented “ no such claim ” because there was no doctor -patient
relationship between Dr. Hoffman and Ginther and because Dr. Hoffman never treated
Ginther. Thus, MMIC asserted that Dr. Hoffman’s claim based on breach of the duty to
defend failed as a matter of law. MMIC also argued that the duty -to-defend claim failed
as a matter of law because Ginther’s lawsuit was excluded under the wrongful -acts and
violation-of-law policy exclusions and because Ginther was not seeking “damages.”
Finally, MMIC argued that Dr. Hoffman’s claim for breach of the implied covenant of
good faith and fair dealing failed as a matter of law because (1) there was no duty to defend
Dr. Hoffman against Ginther’s lawsuit, (2) the claim “v iolate[d] Minnesota c ourts’
prohibition against repackaging a ‘bad faith’ claim,” and (3) “MMIC’s coverage position
was, at a minimum, plausible and honest.”
6
The district court granted summary judgment for MMIC and denied Dr. Hoffman’s
motion for summary judgment, and the court administrator entered judgment. The district
court relied only on the policy exclusions 3 and concluded that Ginther’s lawsuit did not
trigger a duty to defend because it “arose out of alleged willful actions and violations of
law that are excluded by the plain language of MMIC’s policy.” The district court also
concluded that Dr. Hoffman’s claim for breach of the implied covenant of good faith and
fair dealing failed because there was insufficient evidence of bad faith and because the
claim was based on a purported duty to defend, and there was no such duty as a result of a
policy exclusion.4
Dr. Hoffman appeals.
DECISION
Summary judgment shall be granted if the moving party shows that there is no
genuine issue as to any material fact and that the moving party is entitled to judgment as a
matter of law. Minn. R. Civ. P. 56.01; Senogles v. Carlson , 902 N.W.2d 38, 42 (Minn.
2017). We review de novo a district court’s grant of summary judgment to determine
whether there are any genuine issues of material fact and whether the district court erred in
its application of the law. Senogles, 902 N.W.2d at 42; Henry v. Indep. Sch. Dist. No. 625,
988 N.W.2d 868, 880 (Minn. 2023). “We view the evidence in the light most favorable to
the party against whom summary judgment was granted.” Senogles, 902 N.W.2d at 42 .

3 The district court did not consider or determine whether Ginther’s lawsuit resulted from
a “medical incident” or whether Ginther’s suit alleged damages.
4 In denying the good-faith-and-fair-dealing claim, the district court referenced only the
violation-of-law exclusion.
7
We need not adopt the district court ’s reasoning and “may affirm a grant of summary
judgment if it can be sustained on any grounds.” Doe 76C v. Archdiocese of St. Paul, 817
N.W.2d 150, 163 (Minn. 2012).
I.
Dr. Hoffman contends that the district court erred by summarily dismissing his
claim that MMIC breached its contractual duty to defend Dr. Hoffman in Ginther’s lawsuit.
Dr. Hoffman argues that the district court erred in concluding that coverage was excluded
under the wrongful-acts and violation-of-law policy exclusions. The district court reached
its conclusion without first determining whether Ginther’s claims arose from a “medical
incident” and were therefore within the scope of coverage under MMIC’s policy.
Nonetheless, both parties fully address ed that issue in this appeal. Because the initial -
coverage issue is dispositive, we consider it in our de novo review. See id.
“An insurer’s duty to defend an insured is contractual.” Meadowbrook, Inc. v.
Tower Ins. Co. , 559 N.W.2d 411, 415 (Minn. 1997). “Such a duty to defend generally
covers those claims that arguably fall within the scope of the policy.” Id. “In determining
the existence of such a duty, a court will compare the allegations in the complaint in the
underlying action with the relevant language in the insurance policy .” Id. Under
Minnesota law, “if any part” of a cause of action asserted against the insured in the
underlying complaint “arguably falls within the scope of [the policy’s] coverage,” the
insurer has a duty to defend. Ross v. Briggs & Morgan, 540 N.W.2d 843, 847 (Minn. 1995)
(quotation omitted). The Minnesota Supreme Court “has consistently stated that where the
insurer has no knowledge to the contrary, it may make an initial determination of whether
8
or not it is obligated to defend from the facts alleged in the complaint against its insured.”
Garvis v. Emps. Mut. Cas. Co., 497 N.W.2d 254, 258 (Minn. 1993).
“The initial burden of demonstrating coverage rests with the insured . . . .” Domtar,
Inc. v. Niagara Fire Ins. Co., 563 N.W.2d 724, 736 (Minn. 1997). In determining whether
Dr. Hoffman met that burden, we compare the relevant language in MMIC’s policy to the
language in Ginther’s complaint. See Meadowbrook, Inc. , 559 N.W.2d at 415. In
determining whether an insurer has a duty to defend, a court must focus on the claim against
the insured and whether its elements fit within the policy. See Ross, 540 N.W.2d at 848.
A court errs by focusing on conduct asserted to support a claim, and not on the claim itself.
See Meadowbrook, Inc., 559 N.W.2d at 420 (“In this case, the court of appeals mistakenly
focused on some of the conduct being asserted to prove the claim.”).
The relevant policy language in this case provides:
• We will pay damages an insured is legally required to
pay as a result of a medical incident that happens on or
after the applicable prior acts date and before the
expiration date of this insurance.

The policy defines a “medical incident” as “ an adverse or unanticipated outcome
resulting from professional services that were, or should have been, provided by an insured
or by a person for whom the insured is liable.” And t he policy defines “professional
services” as “medical care or treatment provided to a patient, a medical opinion rendered
by an insured, decisions made that require the specialized skill, training or judgment of a
health care professional, or peer review service.”
9
Ginther’s complaint set forth claims under two sections of the MHRA: Minn. Stat.
§ 363A.11 (2020) and Minn. Stat. § 363A.17 (2020). These sections essentially prohibit a
business from discriminating based on gender identity. During the relevant period here,
the MHRA defined “sexual orientation” as “having or being perceived as having a self -
image or identity not traditionally associated with one’s biological maleness or
femaleness.”5 Minn. Stat. § 363A.03, subd. 44 (2020). Section 363A.11, subd ivision
1(a)(1), provided that it is an “unfair discriminatory practice . . . to deny any person the full
and equal enjoyment of the goods, services, facilities, privileges, advantages, and
accommodations of a place of public accommodation because of . . . sexual orientation.”
Similarly, section 363A. 17(3) provided that it is an “unfair discriminatory practice for a
person engaged in a trade or business or in the provision of a service . . . to intentionally
refuse to do business with, to refuse to contract with, or to discriminate in the basic terms,
conditions, or performance of the contract because of a person’s . . . sexual orientation.”
Ginther’s complaint alleged that:
[Dr. Hoffman’s] assertion that performing a breast
augmentation for a transgender patient “is a much more
difficult operation,” is untrue. [Ginther’s] primary care
provider advised her that she could consult with any surgeon
of her choosing. Moreover, [Ginther] consulted with two other
area plastic surgeons, neither of whom specialize or are
credentialed in treating transgender patients. Both of these
providers were willing and able to perform a breast
augmentation for [Ginther] after reviewing her medical history
and learning that she is transgender. Moreover, neither of these
providers told [Ginther] that performing a breast augmentation

5 The legislature has since added specific protections based on gender identity. See, e.g.,
Minn. Stat. § 363A.17 (Supp. 2023).
10
for her would be more difficult or require specialization due to
the fact that she is transgender.

Next, Ginther’s complaint set forth two claims: (1) business discrimination in
violation of the MHRA and (2) discrimination in the enjoyment of public accommodations
in violation of the MHRA.
Dr. Hoffman asserts that Ginther’s claims fall within the scope of the MMIC policy
because “referring a patient to a medical specialist constitutes a ‘medical incident’ within
the terms of the MMIC policy.” He correctly notes that a doctor has a duty to refer a patient
to a specialist if the patient’s ailment is beyond the doctor’s knowledge or technical skill.
Larsen v. Yelle, 246 N.W.2d 841, 845 (Minn. 1976) (discussing “duty to refer a patient to
a specialist for treatment”). He argues that Ginther’s complaint “was, in reality, a claim
based upon the medical decision of Dr. Hoffman’s office that the initial request for medical
services should be referred to another provider.” He also argues that the MHRA claims in
Ginther’s complaint are a “ruse” and that Ginther actually alleged a negligent medical
referral.
Dr. Hoffman’s brief acknowledges that “Ginther was complaining that Dr. Hoffman
should have provided her with the breast augmentation surgery.” We agree. But Ginther
did not claim that Dr. Hoffman failed to provide her with breast augmentation surgery
based on “ a medical opinion ” or based on a decision that required “the specialized skill,
training or judgment of a health care professional .” Indeed, the above -quoted language
from Ginther’s complaint expressly refutes such a claim, alleging instead that Dr. Hoffman
was competent to perform the surgery and refused to do so based solely on gender-identity-
11
based discrimination in violation of the MHRA. Nor does Ginther’s complaint allege that
Dr. Hoffman negligently referred Ginther to another provider, that is, breached a medical
or legal duty to refer Ginther to a specialist. Instead, Ginther’s complaint alleges that Dr.
Hoffman’s referral was a discriminatory act under the MHRA, because it was based on
Ginther’s transgender status.
“For purposes of determining arguable coverage, we will limit ourselves to the
causes of action alleged in the complaint.” Reinsurance Ass’n of Minn . v. Timmer, 641
N.W.2d 302, 311 (Minn. App. 2002), rev. denied (Minn. May 14, 2022). We do not
“determine coverage on the basis of claims that could have been made (for example, are
suggested by the fact pattern) but were not.” Id. Here, it is clear that the allegations and
claims in Ginther’s complaint were based on alleged discrimination in violation of the
MHRA, and not based on a medical incident.
The fact that Dr. Hoffman has cited his medical judgment and his duty to refer a
patient to a specialist as defenses to Ginther’s discrimination claims does not change the
nature of Ginther’s claims. Dr. Hoffman argues that his referral constitutes a “medical
incident” because it resulted from “professional services” such as “decisions made that
require the specialized skill, training or judgment of a health care professional .” That
argument inappropriately focuses on alleged conduct related to Ginther’s claims, and not
on the claims themselves. In determining initial coverage, we must focus on the claims
themselves, and not on related conduct. See Meadowbrook, Inc., 559 N.W.2d at 420 (“In
this case, the court of appeals mistakenly focused on some of the conduct being asserted to
prove the claim.”). Focusing only on the claims in Ginther’s complaint—as we must—we
12
conclude that Ginther’s claims did not allege a “medical incident” within the meaning of
MMIC’s policy. Instead, Ginther’s claims are based on gender -identity discrimination in
violation of the MHRA, and not on a covered medical incident.
Dr. Hoffman’s argument that MMIC breached its contractual duty to defend fails
for another reason: “the law obligates an insurer to defend only those types of claims for
which it arguably could be found liable.” Id. at 418. “When it can be concluded as a matter
of law that there is no basis upon which an insurer may be obligated to indemnify the
insured, the insurer is relieved of its duty to defend.” Woida v. N. Star Mut. Ins. Co., 306
N.W.2d 570, 574 (Minn. 1981).
As MMIC argues, the undisputed facts present no scenario in which MMIC may be
obligated to indemnify Dr. Hoffman. Again, the policy requires MMIC to indemnify Dr.
Hoffman for “damages [Dr. Hoffman] is legally required to pay as a result of a medical
incident.” In this case, there were two possible outcomes: (1) Dr. Hoffman would prevail
in Ginther’s lawsuit, such that Dr. Hoffman would not be “legally required to pay” damages
and MMIC would have no duty to indemnify, or (2) Ginther would prevail in her lawsuit.
In the latter scenario, coverage under MMIC’s policy would be excluded under the
violation-of-law exclusion. Again, that exclusion provides, “This insurance does not apply
to any claim arising out of the violation of any local, state or federal statute, rule or
regulation.” The MHRA is comprised of state statute s, and Ginther’s successful
prosecution of her lawsuit would establish a violation of the MHRA. Thus, MMIC had no
duty to defend because there was no basis on which MMIC may be obligated to indemnify
Dr. Hoffman.
13
In sum, based on our careful comparison of the claims in Ginther’s complaint and
the relevant MMIC policy language, and based on our determination—as a matter of law—
that there is no basis on which MMIC may be obligated to indemnify Dr. Hoffman for
damages resulting from Ginther’s lawsuit, we conclude that coverage is not available under
the MMIC policy and that MMIC did not have a duty to defend. Thus, MMIC is entitled
to summary judgment as a matter of law on Dr. Hoffman’s claim for breach of the duty to
defend.
II.
Dr. Hoffman contends that the district court erred by summarily dismissing his
claim that MMIC breached the implied covenant of good faith and fair dealing.
“Under Minnesota law, every contract includes an implied covenant of good faith
and fair dealing requiring that one party not unjustifiably hinder the other party ’s
performance of the contract ” or “take advantage of the failure of a condition prece dent
when the party itself has frustrated performance of that condition .” In re Hennepin Cnty.
1986 Recycling Bond Litig., 540 N.W.2d 494, 502 (Minn. 1995) (quotation omitted). “[I]t
is the duty of the insurance company to exercise good faith toward the insured, both in the
investigation under a liability policy and in the defense of the lawsuit and in the payment
of its obligations under the insurance contract.” Larson v. Anchor Cas. Co. , 82 N.W.2d
376, 383 (Minn. 1957). But “[a] party to a contract does not act in bad faith by asserting
or enforcing its legal and contractual rights.” Sterling Cap. Advisors, Inc. v. Herzog, 575
N.W.2d 121, 125 (Minn. App. 1998) (quotation omitted).
14
Dr. Hoffman asserts that “MMIC breached its duty to defend and indemnify [him],
and thus breached [the] covenant of good faith and fair dealing.” That assertion directly
links the two alleged breaches as follows: because MMIC breached its duty to defend, it
therefore breached the covenant of good faith and fair dealing. In deed, Dr. Hoffman
“concedes that if this [c]ourt affirms the district court’s decision on the duty to defend, it
must also do so for the good faith and fair dealing claim.” Because MMIC did not breach
its duty to de fend, MMIC is entitled to summary judgment as a matter of law on Dr.
Hoffman’s claim for breach of the implied covenant of good faith and fair dealing.
Affirmed.