This is a declaratory judgment action, brought pursuant to the Uniform Declaratory Judgment Act, N.J.S.A. 2A:16-50 et seq. , seeking a judicial determination of the rights and obligations of the respective parties under disparate policies of insurance. The case is derivative of a medical malpractice action wherein it was alleged that Flora Panicucci, R.N., an employee of Passaic General Hospital (hospital), failed to provide recovery room nursing care in accordance with the accepted standards of nursing practice to Frank Wade subsequent to a surgical procedure performed at the hospital. The malpractice action was settled for $375,000, and it is the apportionment of this recovery under the various insurance contracts which forms the basis of the present suit.
Nurse Panicucci was protected from malpractice liability via two separate avenues of insurance. First, Passaic General Hospital and the Insurance Company of North America (INA) entered into an agreement whereby the hospital's employees would be indemnified for any claims arising out of rendered professional services with $500,000 per claim and $600,000 aggregate limits. Under this agreement the hospital undertook the
responsibilities of investigating, defending and settling claims and lawsuits brought against it under the indemnity agreement with INA. The agreement further provided that the hospital would indemnify its employees up to the "self-insured sum" of $100,000, with INA being responsible for any indemnification "in excess of the self-insured's sum." In addition, the agreement claimed to provide only "excess" insurance. Section "D" of the agreement states:
If any employee, authorized volunteer worker or medical staff committee member has another policy or policies covering a loss insured hereunder, the insurance with respect to such loss under this policy shall be excess over the amount set forth as the limit of liability under such other policy or policies.
The second avenue of insurance covering Nurse Panicucci's malpractice liability arises through a policy obtained by the American Nurses' Association (ANA) issued by National Union Fire Insurance Co. National Union's policy provides malpractice coverage up to $200,000 per claim and $600,000 aggregate. This agreement also has an excess clause, contained in Part V, "Conditions," Section D, "Other Insurance," which states:
If a member has valid and collectible insurance for an occurrence covered by this agreement, the protection provided by this agreement shall apply only as excess of such insurance and then only when such insurance is exhausted by payment in settlement of a claim or payment of a judgment.
Note that the excess clauses of INA and National Union are substantially similar in their operation and effect.
The parties have moved for summary judgment, pursuant to R. 4:46-2, seeking the court's determination of the amount of contribution to be made by each of the parties towards the $375,000*fn1 settlement.
Plaintiffs seek a determination that the hospital is primarily liable for the self-insured sum and that National Union and INA
are both equally liable for the remaining balance.*fn2 Defendants, on the other hand, seek a determination that the National Union policy is primary with respect to the first $100,000 of the loss, and that thereafter the policies of National Union and INA share in the remaining loss on a pro rata basis.
Upon review of the record it is clear that the case is ripe for summary judgment. According to R. 4:46-2, summary judgment should be granted if it is shown to the court that "there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." There being no genuine issue of any material fact, it is for the court to decide this case on the applicable law. See Judson v. ...