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Gil v. Clara Maass Medical Center

Superior Court of New Jersey, Appellate Division

June 19, 2017

KEYKO GIL, Individually and as Guardian ad Litem for the infant KENNETH GIL, Plaintiffs-Appellants,

          Argued December 6, 2016

          On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-8434-11.

          David A. Mazie argued the cause for appellants (Mazie Slater Katz & Freeman, LLC, attorneys; Mr. Mazie and David M. Estes, on the brief).

          Lauren M. Strollo argued the cause for respondent, Clara Maass Medical Center (Vasios, Kelly & Strollo, P.A., attorneys; Ms. Strollo, of counsel; Douglas M. Singleterry, on the brief).

          Katherine E. Tammaro argued the cause for respondent Executive Risk Specialty Insurance Company (Tressler LLP, attorneys; Ms. Tammaro, of counsel; Ms. Tammaro and Kevin Sullivan, on the brief).

          Michael J. Rossignol argued the cause for respondents Lexington Insurance Company, Endurance Specialty Insurance, LTD., First Specialty Insurance Company and Steadfast Insurance Company (Riker Danzig Scherer Hyland & Perretti LLP, attorneys; Mr. Rossignol, of counsel and on the brief; Brooks H. Leonard, on the brief). [1]

          John T. Coyne argued the cause for respondents Endurance Specialty Insurance, Ltd., and First Specialty Insurance Corporation (McElroy, Deutsch, Mulvaney & Carpenter, LLP, attorneys; Mr. Coyne, of counsel and on the brief).

          Kevin T. Coughlin argued the cause for respondent Steadfast Insurance Company (Coughlin Duffy, LLP, attorneys; Julia C. Talarick, of counsel and on the brief).

          Before Judges Fisher, Ostrer and Vernoia (Judge Ostrer concurring).


          FISHER, P.J.A.D.

         In this appeal, we examine clauses contained in insurance policies covering a hospital to determine, among other things, whether the trial judge erred in rejecting plaintiffs' arguments that an allegedly negligent physician was also covered because he was the hospital's "employee" or a "leased worker, " or because his limited liability company was "affiliated or associated" with the hospital. We conclude the policy language could not be plausibly interpreted to provide coverage to the physician or his limited liability company, and affirm.


         In 2011, plaintiff Keyko Gil, on her own behalf and for her infant child, Kenneth, commenced this medical malpractice action against Huseyin Copur, M.D., FirstChoice OB/GYN LLC, and Clara Maass Medical Center, alleging that Kenneth's birth defects were caused by an emergency Caesarian section performed by Dr. Copur at Clara Maass in 2004. At the time of the procedure, Dr. Copur was purportedly acting in accordance with a services agreement between Clara Maass and FirstChoice; the latter was an entity formed by Dr. Copur and another physician.

         By motion, the trial judge capped Clara Maass's exposure at $250, 000, pursuant to the Charitable Immunities Act, N.J.S.A. 2A:53A-1 to -11, and denied without prejudice plaintiffs' motion to declare Dr. Copur an employee of Clara Maass. The judge, however, granted plaintiffs leave to file an amended complaint and later permitted another amendment by which plaintiffs sought relief on their own behalf, and as assignees of Dr. Copur and FirstChoice, [2] against defendant Executive Risk Specialty Insurance Company, which issued a policy to Saint Barnabas Health Care System[3] covering its "employees, " and against defendants Lexington Insurance Company, Endurance Specialty Insurance, Ltd., First Specialty Insurance Company, and Steadfast Insurance Company, which provided excess insurance.[4] The trial judge later severed the coverage claims from the medical negligence claim, pending disposition of the former.[5]

         Following the entry of summary judgment on the coverage issues in the insurers' favor, plaintiffs filed this appeal, posing issues about the interpretation of the relevant policies. Because summary judgment was entered, we employ the familiar Brill[6] standard which the trial judge was also required to apply. See Townsend v. Pierre, 221 N.J. 36, 59 (2015).


         In ascertaining whether the policies provided coverage for either Dr. Copur or FirstChoice or both, we first consider that the policies expressly covered "named insured[s]." FirstChoice and Dr. Copur, however, were not specifically listed in any of the policies as "named insureds."[7]

         The Executive Risk policy, however, also defined "insured" as including not only those expressly "named" but also "any [e]mployee or [v]olunteer." Since it has not been argued that Dr. Copur was a volunteer, we turn to that part of the policy that defined an "employee" as

any person who has an assigned work schedule for and is on the regular payroll of the Named Insured, with federal and state taxes withheld. Independent contractors are not Employees. An Employee's status as an Insured shall be determined as of the date of the Occurrence or Wrongful Act upon which a Claim involving the Employee is based.

         The Lexington policy - which was followed, as to its form, by the other excess insurers - also included coverage for Clara Maass's "employees" "but only for acts within the scope of their employment . . . or while performing duties related to the conduct of [Clara Maass's] business." The word "employee" is defined in that policy as "a person paid by [Clara Maass] in connection with [its] business." The word "employee" does not include "a temporary worker[8] or independent contractor, [9]" but does include "a leased worker, " which was described as "a person leased to [the named insured] by a labor leasing firm, under an agreement between [the named insured] and the labor leasing firm, to perform duties related to the operations as described in the Declarations and which are at [the named insured's] direction."


         In granting summary judgment in favor of the insurers through his reading of the policy provisions quoted above, the trial judge rejected plaintiffs' arguments: (a) that Dr. Copur was an "employee, " (b) that either Dr. Copur or FirstChoice fell within the terms of the "catch-all" provisions, or (c) that Dr. Copur was a "leased worker." We separately consider these arguments. But, before that, we observe that although, as summary-judgment movants, the insurers were required to demonstrate the absence of a genuine dispute of all material facts, Brill, supra, 142 N.J. at 540, the ultimate burden of persuasion rested with plaintiffs, who stood in the shoes of Dr. Copur and FirstChoice on these issues, [10] to show the policies provided coverage. See Wakefern Food Corp. v. Liberty Mut. Fire Ins. Co., 406 N.J.Super. 524, 538 (App. Div.), certif. denied, 200 N.J. 209 (2009); Polarome Int'l, Inc. v. Greenwich Ins. Co., 404 N.J.Super. 241, 258 (App. Div. 2008), certif. denied, 199 N.J. 133 (2009).


         The parties' debate goes so far as to question how we should determine whether Dr. Copur was an employee for purposes of the insurance policies in question. Plaintiffs invite us to look to common-law principles regarding what it means to be an employee or independent contractor. The insurers urge that we stick to the plain meaning of the words and phrases employed without straying into other areas where societal policies require an alternate view. In this circumstance, we agree with the insurers but will nevertheless discuss both approaches.


         The policies expressly defined an "employee" as a person who is paid by the named insured, here Clara Maass. The Executive Risk policy is very explicit in this regard, defining an employee within the meaning of that policy as "any person who has an assigned work schedule for and is on the regular payroll of the Named Insured, with federal and state taxes withheld." Dr. Copur testified at his deposition that he was not an employee, and it is undisputed that he was not on Clara Maass's "regular payroll."

         The other policies do not define the term "employee" by insisting upon that person being on the named insured's "regular payroll" but nevertheless require that the purported "employee" be "a person paid by [Clara Maass] in connection with [its] business." Again, there is no dispute that Dr. Copur was not paid by Clara Maass; FirstChoice was compensated by Clara Maass, [11] and Dr. Copur was paid by FirstChoice.

         Undaunted, plaintiffs argue that even in the absence of evidence that Dr. Copur was paid by Clara Maass, other indicia of the relationship suggested that Dr. Copur was not an "independent contractor, " which none of the policies defined. In other words, because "independent contractor" was not defined, plaintiffs argue that evidence tending to show Dr. Copur did not fit the common-law understanding of an "independent contractor" would, a fortiori, demonstrate his status as an "employee." We are not persuaded. Because the word "employee" is defined by reference to specific attributes and "independent contractor" is not defined at all, we reject plaintiffs' syllogism.

         General rules of interpretation require that, so long as it leads to a result in harmony with the contracting parties' overall objective, a specific, defined term controls a general, undefined term. See Bauman v. Royal Indem. Co., 36 N.J. 12, 22 (1961); George M. Brewster & Son, Inc. v. Catalytic Constr. Co., 17 N.J. 20, 35 (1954); Burley v. Prudential Ins. Co., 251 N.J.Super. 493, 500 (App. Div. 1991). "Specific language in a contract controls over general language, and where specific and general provisions conflict, the specific provision ordinarily qualifies the meaning of the general." DCV Holdings, Inc. v. ConAgra, Inc., 889 A.2d 954, 961 (Del. 2005). "Even absent a true conflict, specific words will limit the meaning of general words if it appears from the whole agreement that the parties' purpose was directed solely toward the matter to which the specific words or clause relate." 11 Williston on Contracts § 32.10, at 744 (4th ed. 2012).

         Contrary to plaintiffs' contentions, we must first ascertain whether Dr. Copur meets the policy's specific definition of what it means to be an "employee" for purposes of insurance coverage. If he does not meet that definition, we may then conclude he was an independent contractor.[12] We should not, as plaintiffs argue, determine whether Dr. Copur is an independent contractor and, if not, conclude he must be an employee even if he does not ...

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