On appeal from Superior Court of New Jersey, Law Division, Essex County, Docket No. L-3352-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued telephonically February 18, 2010
Before Judges Cuff, Payne and Miniman.
Plaintiff, Falguni Patel, M.D., appeals from that portion of an order of summary judgment, dated March 14, 2009, dismissing her claims of entitlement to "tail" medical malpractice insurance or to a fund to be established for the purpose of procuring such coverage. We affirm.
The record indicates that on March 22, 2002, Dr. Patel signed a written agreement for employment as a physician by a professional corporation known as Associates in Obstetrics and Gynecology, P.A. (AOG). Pursuant to paragraph 8 of the agreement, Dr. Patel's initial term of employment was to commence on July 1, 2002 and continue for three years to June 30, 2005. Pursuant to paragraphs 7 and 12, at the end of that initial term, Dr. Patel would be given the option of signing a continuation of employment agreement, at which time she would be obligated to purchase capital stock and sign a shareholder agreement.
Paragraph 3 of the agreement provided that Dr. Patel would be included in the various employee benefit programs provided to all employees, and that the employer would "provide and pay the premium for malpractice insurance coverage covering Employee." Paragraph 4 contained an indemnification agreement by which Dr. Patel agreed to indemnify AOG for damages and costs arising from Dr. Patel's negligence to the extent that those damages and costs were not covered by insurance. Additionally, that paragraph provided:
Employee will have the same malpractice coverage as the other physician employees of the Employer. Currently, such coverage includes an extended reporting rider.
Additionally, paragraph 16 of the agreement contained an integration clause that provided: "No amendment or variation of the terms of this Agreement shall be valid unless made in writing and signed by Employee and a duly authorized representative of Employer."
Dr. Patel testified in her deposition that she remained employed through June 30, 2005, at which point her employment agreement expired. Although she was offered an opportunity to purchase a share of the practice, the parties could not agree on terms. As a consequence, Dr. Patel remained a salaried employee until her resignation on December 27, 2006.
At the time Dr. Patel joined the practice, AOG and its six physicians were covered by occurrence-based medical malpractice coverage written by Zurich Insurance Company. However, in February 2004, Zurich notified AOG that it was withdrawing from the New Jersey market. Thereafter, AOG obtained claims-made coverage from MIIX Advantage Insurance Company of New Jersey in the period from March 1, 2004 to March 1, 2005 and claims-made coverage from MDAdvantage Insurance Company of New Jersey thereafter. Occurrence-based coverage affords coverage for occurrences taking place in the policy period, regardless of when reported. Claims-made coverage, as the name suggests, only affords coverage for those claims that are made in the coverage period. To obtain extended coverage for occurrences taking place in a coverage period but not reported until later, one must obtain "tail" coverage providing insurance during an extended reporting period.
The MIIX policy in effect in 2004 and 2005 contained several provisions governing tail coverage. It stated:
L. Extended Reporting Period
1. If this policy is cancelled or non-renewed for any reason, the named insured (or any insured identified on the Declarations or on a Schedule of Insureds, if that insured's insurance is cancelled or non-renewed) will have the right to obtain an unlimited extended reporting period by giving written notice to the Company within ...