Rhode Island Medical Malpractice Insurer Wants Court to Hold New Jersey Law Inapplicable
Attorneys for the Medical Malpractice Joint Underwriting Association of Rhode Island (JUA) have asked the New Jersey Supreme Court to overturn a New Jersey appellate court ruling, saying that the lower court inappropriately applied New Jersey law to a dispute the company had with a former medical malpractice insurance policyholder and an injured third party plaintiff.
The dispute arose after a patient of podiatrist Sean Robert Stoddard filed a lawsuit, claiming negligence in a surgical procedure performed in one of Stoddard’s New Jersey offices in 2010. At the time of the surgery, Stoddard had a policy of medical malpractice insurance issued by the JUA, an entity established by Rhode Island lawmakers to ensure that all physicians in the state have medical malpractice coverage.
After Stoddard asked the insurer to defend him, the JUA investigated the policy and denied coverage, claiming that Stoddard had made false statements on his application for the policy. According to court documents, the policy required that at least 51% of Stoddard’s patients be in Rhode Island. Though Stoddard claimed on his application that he met that requirement, the JUA investigation revealed that he had no patients in the state.
The JUA sought and obtained a ruling in a court in Rhode Island allowing rescission of the insurance contract. However, the injured party filed suit in New Jersey, and brought the JUA in as a third party when it became clear that Stoddard had no personal assets. The JUA filed a motion to dismiss the complaint against it, but the trial judged denied the motion. On appeal, the court sided with the plaintiff, applying New Jersey law to hold that, because the plaintiff was an innocent and injured third party, the insurer must provide at least minimum compulsory amount of benefits.
Both parties made oral arguments before the New Jersey Supreme Court on April 27. A decision is expected later this year.
Contact Our Office
For a free initial consultation, contact our office online or call us at 973-993-8787. We have office locations in Morristown and Newton, but will visit you in your home or the hospital, if necessary.