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Hamilton v. Cooperative of American Physicians Inc./Mutual Protection Trust6/9/2005
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.
Dr. Richard Hamilton appeals from a judgment denying his petition to vacate an arbitration award. Finding no basis for judicial review of the arbitration award, we affirm the judgment.
FACTUAL AND PROCEDURAL BACKGROUND
The Parties and Their Agreement
Since February 1, 1983, Hamilton, an obstetrician, was a member of Cooperative of American Physicians, Inc. Mutual Protection Trust (CAP/MPT), a trust "intended to qualify as an unincorporated interindemnity, reciprocal or interinsurance arrangement . . . ." Under the terms of his agreement with CAP/MPT, he was required to pay specified dues and assessments. In return, CAP/MPT provided liability protection coverage.
On September 4, 1997, CAP/MPT sent Hamilton a letter indicating that he would be given until September 30, 1997 to pay his past due dues and assessments. The letter stated "MPT is currently defending or investigating claims against you, involving the patient Kerry Dawson and Sean Tucker." On October 2, 1997, CAP/MPT wrote Hamilton indicating that it would grant him an extension to November 28, 1997 to pay the outstanding fees. On August 31, 1998, CAP/MPT sent Hamilton a letter indicating that his membership was terminated effective August 31, 1998. He was permitted to reinstate his membership by paying the amount then due in assessments and dues plus a $300 reinstatement fee by September 21, 1998. On September 22, 1998, CAP/MPT wrote Hamilton indicating that he did not reinstate his membership and as a result all professional liability coverage terminated August 31, 1998. According to Hamilton, the "validity and effectiveness of Dr. Hamilton's termination is not in dispute." (Boldface omitted.)
Lawsuit Against Hamilton
In August 1995, Sean Tucker and his parents sued Hamilton for, among other things negligence, wrongful life, and wrongful birth (Tucker lawsuit). The Tucker lawsuit was based on Hamilton's alleged failure to order an ultrasound which would have identified that Sean suffered from arthrogryposis. In September 1997, the Tuckers offered to settle the lawsuit for $995,000. CAP/MPT was at the time defending Hamilton, but it did not accept the settlement offer.
After Hamilton's membership was terminated, effective August 31, 1998, CAP/MPT refused to further defend him. A default judgment was entered finding Hamilton liable for damages exceeding $10 million.
Lawsuit Against CAP/MPT
Hamilton then sued CAP/MPT for breach of the implied covenant of good faith and fair dealing. The complaint alleged that, at the time Hamilton was named in the Tucker lawsuit, he was a member of CAP/MPT. When Hamilton was a member, the Tuckers demanded a settlement of $995,000. CAP/MPT allowed the claim to proceed knowing that Hamilton "was in an extremely difficult financial condition and was considering leaving the practice of medicine. CAP MPT also knew if the Tucker suit were not settled, Hamilton would be unable to make his assessment payments (the equivalent of premium payments) for the predictable duration of the Tucker suit. . . . CAP MPT decided to injure Dr. Hamilton, for its own advantage, by delaying settlement of the Tucker suit beyond clear opportunities for timely and reasonable settlement." (Capitalization altered.) The complaint alleged that CAP/MPT refused to enter into a reas
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