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President v. Jenkins2/6/2003
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued January 8, 2003
In these consolidated appeals from an underlying medical malpractice action, we consider primarily whether the physician alleged to be negligent is covered under a "claims made" professional liability insurance policy issued by a successor insurer and, if not, whether the hospital where he enjoys admitting privileges has a duty to third parties to ensure that he is insured. We also consider whether the predecessor insurer has a duty to advise the hospital of the cancellation of the physician's insurance, the event that caused the gap in insurance coverage, and whether the insurance broker breached a professional duty of care in failing to bridge the gap. As did the trial judge, we answer these questions in the negative. Accordingly, we affirm the grant of summary judgment in favor of both insurers and the broker, as well as the denial of plaintiff's motion to amend her complaint to assert a claim against the hospital on the basis of such a perceived duty.
The material facts are not in dispute. Plaintiff Deborah President (plaintiff) experienced undiagnosed eclampsia during labor and delivery of her child, and as a result, sustained brain damage, partial paralysis and seizure disorder. She and her husband sued her attending obstetrician, Dr. Reginald Jenkins, the hospital where he had admitting privileges, St. Barnabas Medical Center (St. Barnabas), and two of its resident physicians, Drs. Lamberto Flores and Francine Hughes, alleging professional negligence in plaintiff's care and treatment on January 3 and 4, 1998. Eventually, the malpractice claims were dismissed against all defendants except Jenkins.
At the time of the incident giving rise to the medical malpractice claim, Jenkins was in the process of securing new insurance coverage, changing from "occurrence" to "claims made" protection. He had been insured by Princeton Insurance Company (Princeton) since 1987 under an "occurrence plus" malpractice insurance policy that was renewed for successive one-year periods through February 1998. However, Princeton canceled the most recent renewal policy, effective October 26, 1997, because Jenkins repeatedly failed to make his premium payment. In fact, throughout the fall of 1997, Jenkins received notices from Princeton advising that unless he paid his premium, the insurance policy would be canceled. Eventually, in a letter dated January 9, 1998, Princeton canceled Jenkins' insurance policy retroactive to October 26, 1997.
Despite these notices, Jenkins never advised St. Barnabas, whose by-laws require all admitting physicians to maintain professional liability coverage, of the cancellation of his insurance policy. Back in January 1996, he had advised the hospital's Risk Management department that he had medical malpractice insurance coverage with Princeton, and later in November 1996 provided St. Barnabas with the renewal certificate indicating coverage running from February 1, 1997 to February 1, 1998. However, Jenkins failed to notify the hospital of this latest development. Apparently, he was of the opinion that if he eventually paid the late premium, his insurance would be reinstated. Yet, despite this belief, Jenkins never paid the delinquent premium.
Instead, he negotiated with an insurance broker, C&R;Insurance Agency (C&R;, to obtain medical malpractice coverage under a "claims made" policy underwritten by the Zurich Insurance Company (Zurich). Jenkins advised C&R; both orally and in writing, that his policy with Princeton would expire on February 1, 1998 and, therefore, he needed coverage with Zurich commencing February 1, 1998. Ac
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