Plaintiffs’ Creative Arguments Did Not Overcome the Language of Insurance Policies That Precluded Coverage

Gil v. Clara Maass Medical Center, 450 N.J. Super. 368 (App. Div. 2017).  This was a medical malpractice case.  The appeal, however, resulted from the Law Division’s grant of summary judgment in favor of certain insurers, which threw out plaintiff’s claim that the allegedly negligent physician, Dr. Copur, was the covered hospital’s “employee” or a “leased worker,” or that the doctor’s limited liability company, FirstChoice OB/GYN LLC, was “affiliated or associated” with the hospital.  Judge Fisher’s opinion today evaluated the language of the governing insurance policies and concluded that those policy terms could not validly be read as plaintiffs wished.  Under the standards of Brill v. Guardian Life Ins. Co., 142 N.J. 520 (1995), summary judgment was properly granted to the insurers.

In arguing that Dr. Copur was an “employee” of the defendant hospital, plaintiffs had to overcome the language of the policies.  The policies defined “employee” as a person who is paid by the named insured (the hospital).  There was no dispute that the doctor did not fit that bill.

Plaintiffs argued, however, that because “other indicia of the relationship suggested that Dr. Copur was not an ‘independent contractor,’ which none of the policies defined,” he must therefore have been an “employee.”  Plaintiffs relied on the common law definitions in making this argument.

Judge Fisher did not agree, instead finding that plaintiffs had gotten things backward.  The proper approach was to see whether Dr. Copur met the policy definition of “employee” and then, if he did not, to determine whether he was an independent contractor.  “We should not, as plaintiffs argue, determine whether Dr. Copur is an independent contractor and, if not, conclude he must be an employee even if he does not possess the one attribute the contracting parties obviously viewed as controlling– whether he was paid by Clara Maass.”

Judge Fisher also rejected the premise that “we must look to definitions of ’employee’ or ‘independent contractor’ contained in the common law or as defined by or consonant with remedial legislation.”  The panel was “construing a contract created by sophisticated parties,” and the policies did not refer to the common law.  There was thus no basis to look to the common law as plaintiffs urged.  Despite that, and for completeness, Judge Fisher examined the issues from the perspective of the common law, employing its “control test” for determining whether Dr. Copur was an “employee.”  He concluded that plaintiffs were no better off.

In arguing that FirstChoice was an “associated or affiliated company” of the insured under the policies, plaintiffs contended that the language was ambiguous.  They based that argument on what they said was deposition testimony of an insurance company underwriter that the policy was ambiguous.  Judge Fisher found that doubly erroneous.  First, the underwriter’s testimony could not fairly be read as plaintiffs advocated.  Second, even if the underwriter thought the policy ambiguous, that “cannot convert the plain ordinary meaning of the policies’ words and phrases into something doubtful and ambiguous.”

In any event, plaintiffs offered no interpretation of the language that would make FirstChoice an “associated or affiliated company” of the hospital.  Applying familiar principles of contract interpretation, Judge Fisher found no basis to so characterize FirstChoice.

Finally, plaintiffs’ contention that Dr. Copur was a “leased employee” also failed.  The policy definition of “leased worker” was one who was leased “by a labor leasing firm.”  FirstChoice did “provide physicians to perform certain services on Clara Maass’s behalf for specific compensation,” but that was not FirstChoice’s “sole or chief reason for existing.”  Instead, FirstChoice was an entity through which its members practiced medicine.  It could not be considered a “labor leasing firm” for purposes of the insurance policies.

Plaintiffs here were creative, but that creativity did not defeat the language of the policies.  Summary judgment for the insurers was therefore affirmed.