The New Jersey Civil Justice Institute has filed a motion to participate as amicus curiae in DeMarco v. Stoddard. The issue in the case is whether the rule for third party recovery that applies in the automobile context should be extended to medical malpractice absent statutory foundation, thereby requiring a malpractice insurer to underwrite a claim against a doctor who lied in order to get insurance coverage.
Thomas DeMarco was a patient of the defendant, Dr. Sean Stoddard, a podiatrist. In September 2010, Stoddard performed surgery on DeMarco. The surgery was unsuccessful and the plaintiff’s condition worsened, so he sued Stoddard for medical malpractice.
Stoddard sought indemnification from his insurer, the Medical Malpractice Joint Underwriting Association of Rhode Island (JUA). JUA denied the claim after discovering that Stoddard had lied on his application for insurance, which required him to certify that at least 51% of his practice was generated in Rhode Island. In fact, the vast majority of Stoddard’s practice was in New Jersey even though he was licensed in both New Jersey and Rhode Island.
DeMarco asked the court to require JUA to compensate him for his injuries despite the fact that the insurance policy it had issued was void due to Stoddard’s misrepresentations. The trial court granted DeMarco’s request and the appellate court affirmed, holding that medical malpractice insurers should be held to the same standard as auto-insurers in that public policy favors the compensation of innocent third parties.
The New Jersey Supreme Court is now considering the case, and it is that court that NJCJI hopes to persuade with its amicus brief. NJCJI argues that malpractice insurance is significantly different from automobile insurance, and thus New Jersey’s unique rules requiring automobile insurers to compensate innocent third parties even when the insurance policy held by the tortfeasor is void should not be extended to cases involving medical malpractice insurance. The statutory foundation the automobile rule is built on is simply inapplicable to any other type of insurance.
Thank you to Shalom D. Stone of Brown Moskowitz & Kallen for authoring our brief.