DeMarco v. Stoddard

Defendant Sean Stoddard, D.P.M. practiced podiatry at a clinic with offices in Toms River and Lakewood. In 2007, he applied to the Rhode Island Medical Malpractice Joint Underwriting Association (RIJUA) for medical malpractice liability insurance. Among other representations, the application indicated that at least fifty-one percent of Dr. Stoddard's practice was generated in Rhode Island; that answer was false. Dr. Stoddard submitted renewal applications from 2008 through 2011, each of which stated that at least fifty-one percent of Dr. Stoddard's practice was generated in Rhode Island. Dr. Stoddard performed three surgeries on plaintiff Thomas DeMarco, a New Jersey resident. In October 2011, DeMarco and his wife filed a medical malpractice complaint in New Jersey alleging that Dr. Stoddard negligently performed the third surgery. Dr. Stoddard forwarded the complaint to the RIJUA, which responded with a reservation of rights letter stating that the RIJUA only provided coverage for physicians who maintained fifty-one percent of their professional time and efforts in Rhode Island. The Appellate Division granted the RIJUA s motion for leave to appeal, and affirmed the trial court order. The panel determined that New Jersey law should have applied, and concluded that innocent third parties should be protected for a claim arising before rescission. The panel concluded that the RIJUA owed a duty to indemnify Dr. Stoddard up to $1 million, the amount of medical malpractice liability insurance that a physician licensed to practice medicine and performing medical services in New Jersey was required to maintain. The New Jersey Supreme Court reversed after review of the appellate court record, finding that RIJUA owed neither a duty to defend nor a duty to indemnify Dr. Stoddard, who misrepresented that a portion of his practice was generated in Rhode Island, which was a fact that formed the basis of his eligibility for insurance. View "DeMarco v. Stoddard" on Justia Law