On appeal from the Superior Court of New Jersey, Law Division, Passaic County.
Approved for Publication July 18, 1996.
Before Judges Pressler, Keefe and Kole t/a.
Plaintiff, Princeton Insurance Company (Princeton), appeals from the entry of summary judgment in favor of defendant, June Davis, in this declaratory judgment action, in which the Law Division found Princeton liable for the compensatory damages assessed against its insured, defendant Prasert Chunmuang, M.D., a gynecologist. The issue to be decided is whether Princeton must cover Dr. Chunmuang under its malpractice insurance policy and pay compensatory damages for the emotional distress sustained by Davis resulting from Dr. Chunmuang's sexual assault on Davis during the course of a gynecological examination. We conclude that the policy covers Dr. Chunmuang for such damages and that Princeton must make payment thereof to Davis. We affirm the judgment under review.
Davis instituted suit against Dr. Chunmuang alleging medical malpractice, negligent infliction of emotional distress, intentional infliction of emotional distress, sexual assault, and assault and battery, stemming from an examination conducted by Dr. Chunmuang in his office on an unspecified date in October 1992. *fn1 Davis sought compensatory and punitive damages.
Dr. Chunmuang was apparently served with the complaint but did not file an answer, and a default was entered against him. The Law Division also ordered substituted service on Dr. Chunmuang through his insurer Princeton. Princeton elected not to answer the complaint on his behalf. Instead, Princeton instituted this declaratory judgment action seeking a determination that it did not cover Dr. Chunmuang for the damages claimed by Davis. Davis was named as an interested party and answered the complaint. Dr. Chunmuang did not answer.
After this action was instituted, Davis arranged for a proof hearing on the default that she had taken against Dr. Chunmuang. Princeton received notice of the hearing and appeared solely for the purpose of having Davis accept service of its declaratory judgment complaint.
Princeton did not participate in the default hearing but agrees to be bound by the Law Division Judge's findings of fact and Conclusions of law. Davis concedes that she is also bound by those findings. At the default proof hearing, Davis testified that, on an unspecified date in November 1992, she visited Dr. Chunmuang's office. *fn2
The purpose of the visit was to have a gynecological examination, since she was experiencing cramping and had not had a menstrual cycle. Davis, who was seventeen years old at the time, had never had a gynecological examination. She said that Dr. Chunmuang started the examination of her vaginal area with an instrument but then began using his fingers and twisting his hand as he did so. During the examination, the doctor asked her whether she had a boy friend and whether she had sex. When Davis said that she had not had sex, the doctor asked her why she did not. Davis developed a feeling that the doctor was going beyond what was necessary to examine her. Consequently, she attempted to withdraw from his touch, but he kept pulling her down on the table toward him. This happened three times over the course of five to ten minutes. When the vaginal examination was completed, Dr. Chunmuang examined her breasts. In doing so, the doctor kept rubbing her breasts. Davis knew from what she had read about breast examinations that the type of rubbing the doctor was doing was not normal. She became "very upset" during the examination.
Although Dr. Chunmuang wanted Davis to return for another examination in a few weeks, Davis knew that she would never return. She said that the examination made her "feel dirty" and "kind of ashamed." She testified that she currently felt "depressed or whatever" when she thinks about having another gynecological examination, and, consequently, has not been examined again. At the time of the proof hearing, Davis was almost twenty-one years old.
The record of the proof hearing also revealed that, shortly after the examination, Davis gave a statement to the county prosecutor. Other patients of Dr. Chunmuang apparently had similar experiences and also reported their experiences to the prosecutor. Dr. Chunmuang was indicted on several counts, including the complaint lodged by Davis. Thereafter, Dr. Chunmuang entered into a plea agreement, wherein he agreed to plead guilty to several counts of the indictment. The count involving Davis, however, was not one of the counts to which he pled guilty.
The Board of Medical Examiners also presented a verified complaint against Dr. Chunmuang based upon five specific incidents in which he performed gynecological examinations on five different patients, including Davis, for the purpose of "personal gratification." As a result of the administrative hearing concerning the revocation of Dr. Chunmuang's license, at which Dr. Chunmuang testified, the Board revoked his license to practice medicine in New Jersey. In doing so, the Board adopted the administrative law Judge's finding that "Dr. Chunmuang touched and rubbed the vaginas and breasts of four adult female patients in a sexual manner or for sexual purposes, without medical purpose[.]" Although Davis did not testify at the license suspension hearing, she offered the findings of the Board at the default hearing to prove Dr. Chunmuang's liability as to her.
Judge Mandak, who presided over the proof hearing, made the following finding:
The Court has considered the testimony of Ms. Davis with respect to the incident with Dr. Chunmuang and is satisfied that that testimony reflects activity and action on the part of the doctor, which were not only a deviation from accepted standards but clearly a criminal act in the sense of amounting to a sexual assault.
Although "at a loss a little bit as to what the compensatory damages should be," apparently in light of the sparse testimony on the subject, the Judge awarded compensatory damages of $50,000 and punitive damages in the same amount.
The summary judgment motion in this declaratory judgment action was heard by another Law Division Judge, Judge McVeigh. She had before her the transcript of the proof hearing, the Princeton insurance policy, and the briefs of the parties. She noted that Judge Mandak had found both an act of medical malpractice and a criminal act resulting from the examination of Davis. Judge McVeigh found it significant, in the context of the coverage issue, that Judge Mandak had awarded compensatory damages for the malpractice and punitive damages for the criminal act. Consequently, she concluded that there was coverage for the compensatory damages under the terms of the Princeton policy. Princeton has appealed from that determination.
The question of coverage must necessarily begin with an analysis of the terms of the policy. In the indemnity section of the policy Princeton agreed, in pertinent part, to:
pay all amounts up to the limit of liability which you become legally obligated to pay as a result of injury . . . caused by a "medical incident" arising out of your supplying . . . professional services.
The exclusion section of the policy, however, provided that the
insurance does not apply for:
(a) injury resulting from your performance of a ...