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Court to Decide if Medical Malpractice Policy Valid

New Jersey Supreme Court Looks at Malpractice Insurance Dispute

Gavel and law bookLast month, the New Jersey Supreme Court listened to arguments from attorneys on both sides of a medical malpractice coverage dispute. The issue—whether or not a medical malpractice insurance carrier must provide any coverage when a policyholder is sued, if the policyholder made false statements on the application for insurance.

In the case before the Supreme Court, a podiatrist with offices in Toms River and Lakewood was sued for malpractice by a patient who claimed negligence during a surgical procedure on his foot. The podiatrist had an insurance policy with the Medical Malpractice Joint Underwriting Association (JUA) of Rhode Island, with coverage in effect at the time of the surgery. On his application for coverage, the doctor stated that at least 51% of his patients were from Rhode Island, a requirement for coverage. That statement was false.

After the lawsuit was filed, the doctor sought coverage from JUA, but his claim was denied when the company learned that he had not been practicing in Rhode Island. A court in the state of Rhode Island granted JUA’s request to rescind the malpractice policies.

The doctor’s patient subsequently amended his complaint (in a New Jersey court) to add JUA as a defendant, asking that JUA indemnify the doctor. JUA sought to have the action dismissed, but Ocean County Superior Court judge Mark Troncone denied the motion and instructed JUA to provide coverage. JUA appealed, and the appellate court affirmed the lower court ruling.

In its opinion, the court of appeals found the plaintiff to be an “innocent third part[y]” to the doctor’s misrepresentations. Following established public policy, Appellate Division Judge Victor Ashrafi concluded that “at least the minimum compulsory amount should remain available for the benefit of innocent patients who suffered injuries when the policy was in effect”.

Contact Attorney Howard D. Popper

To learn your options when you have suffered a personal injury, contact our office online or call attorney Popper at 973-993-8787. We have offices in Morristown and Newton, but will come to your home or the hospital, if necessary. There is no charge for your first consultation.

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