A man suffered serious personal injury as the result of an automobile accident. He was taken to a Hospital where he was evaluated by several physicians, including a surgeon, an orthopedist, and a radiologist. These physicians misinterpreted the man’s x-rays and radiological studies and negligently concluded that he did not suffer a recent spinal injury. As a result, the attending surgeon and assistant encouraged him man to attempt to walk approximately a week after the accident. When he arose from the bed, he felt a shock and collapsed. He was transferred to a Medical Center where he underwent surgery on his spine. However, the surgery was unsuccessful in reversing the spinal column damage.
The Queens man retained a law firm to investigate and initiate a medical malpractice action against the various physicians. Although the man’s counsel considered joining the Staten Island Hospital physicians individually in the medical malpractice suit, for various reasons he decided not to join them and sent intent to sue only to the Hospital and Medical Center Regional and its physicians. When the complaint was filed, however, the Hospital was not named. During discovery, the man’s counsel realized that the Medical Center Regional’s defense was based upon the comparative fault of the Hospital and its physicians. At this point, the statute of limitations had expired, and the counsel realized the potential of a legal medical malpractice claim for failing to join them. The counsel contacted his insurance company. He also referred the man to a new counsel. The man settled with the Medical Center Regional and its physicians for $1,000,000, and then brought a legal medical malpractice action against his counsel and his firm, which the man’s insurance company agreed to settle for the policy limits. However, the parties disputed whether the “per claim” amount applied or whether the aggregate amount applied. Specifically, the parties disputed whether the attorney’s failure to name the Hospital and each individual physician constituted independent wrongful acts or a single claim.
The man filed a declaratory judgment action to determine the issue. He claimed that the policy provided $250,000 per wrongful act with a $500,000 aggregate for multiple wrongful acts. Because his counsel committed multiple wrongful acts, he claimed that he was entitled to the aggregate limits. The counsel’s insurance company argued that the policy was a claims-made policy and that the policy provided $250,000 per claim rather than per wrongful act. Since there was only one claim, the man was entitled to only $250,000 in coverage. The trial court agreed with the man and on its motion for summary judgment, the court entered a judgment in favor of the man for the aggregate limits. The counsel’s insurance company appeals this judgment.
The insurance policy in question is a claims-made policy which covers claims made against the insured during the policy period. Specifically, the policy provides that it will pay on behalf of an insured all sums an insured must legally pay as damages because of a wrongful act that results in a claim first made against an insured and which is reported to the insurance company in writing during the policy period.
Claim means a demand received by the insurance company or an insured for money or services while wrongful act means any negligent act, error or omission arising out of professional services rendered or that should have been rendered by an Insured.
The construction of an insurance policy is a question of law for the court. Such contracts are interpreted in accordance with the plain language of the policy, and any ambiguities are liberally construed in favor of the insured and strictly against the insurer as the drafter of the policy. A policy is ambiguous where it is susceptible to two or more reasonable interpretations. However, a policy is not ambiguous merely because it is complex and requires analysis to interpret it.
The man contends the aggregate policy limit should apply where his attorney committed multiple wrongful acts by failing to join several accused parties in his medical malpractice action. Because each of these accused had separate insurance coverage available to pay a damage award, the man argues he had multiple claims against his attorney. However, the counsel’s insurance company asserts that the man has only a single claim because he suffered one injury – he did not receive his full recovery because the attorney failed to join all the proper accused parties before the statute of limitations tolled. Even if the failure to sue each accused is considered a wrongful act, the counsel’s insurance company argues these wrongful acts are related to the man’s sole medical malpractice claim against his attorney.
The counsel’s insurance company’s interpretation of the policy is consistent with the policy language. A claim under the policy is a demand against the insured for money. In this case, there was but one demand for money, namely the lost recovery because of the failure to join various other accused parties and thus one claim. Even if the man had multiple claims against his attorney the “per claim” limit still applies where the claims arise out of the same or related wrongful acts.
The court considered whether two acts of negligence were related so that notice of the first act constituted timely notification of both alleged acts of negligence. The man’s first claim of insurance agency negligence was for the agency’s failure to procure primary insurance coverage. It then later claimed that the agency was negligent in failing to notify an excess carrier of a third party claim against the insured.
Courts have pronounced different analyses in determining what constitutes a related act. Under the analysis of the State Supreme Court, however, the question appears to be whether each of the claimed negligent acts contributes to, or causes, the same monetary loss. If the errors lead to the same injury, under the Supreme Court analysis, they are related. Under the analysis of the United States District Court, acts will not be related if they arise out of separate factual circumstances and give rise to separate causes of action.
In this case, the claim was for the entire amount of the man’s uncollected damages as a result of the failure to join several accused parties in the suit, and all of the acts of negligence caused or contributed to the inability of the man to collect the entire amount of his damages. Thus, the negligent acts were logically related in accordance with the policy definitions.
In a related case, the contractor attempted to argue that there were two claims because it had two sources of payment. Supreme Court rejected the argument and stated, that when, as in this case, a single client seeks to recover from a single attorney alleged damages based on a single debt collection matter for which the attorney was retained — there is a single claim under the attorney’s professional liability insurance policy. Applying that rationale to this case, the man retained an attorney to recover damages he incurred as a result of several physicians’ negligent conduct, but was unable to recover the full extent of his damages because of the attorney’s failure to include all the responsible accused parties in his action. The attorney’s negligent omission may be considered multiple wrongful acts, but the man suffered only one injury — an award that does not represent the full extent of his damages.
The Appellate Court agrees that the alleged wrongful acts of the attorney were related and resulted in a single claim. The Court therefore reverses and remands for entry of a declaratory judgment determining that the policy limit “per claim” and not the aggregate limit applies in this case.
When we aim for something bigger or larger than what should be, things can go wrong. In wanting for more, we sometimes end up with nothing. If you want a counsel to fight for you, consult a NYC Spinal Injury Attorney or a NY Spine Injury Lawyer. You can also be represented by a New York Medical Malpractice Attorney from Stephen Bilkis and Associates.