PHYSICIANS' RECIPROCAL INSURERS v. ABRAHAM

Wednesday, February 13, 2002

Supreme Court

Nassau County

Justice Winslow

PHYSICIANS’ RECIPROCAL INSURERS v. ABRAHAM“This is a declaratory judgment action in which PRI, a professional liability insurer, moves pursuant to CPLR 3212 for summary judgment relieving it of any further obligation to defend and indemnify Akiva D. Abraham, M.D. in an underlying medical malpractice action captioned Erin Plumley and Ernest Plumley vs. Akiva Abraham, M.D. Ob/Gyn Health Center Associates, L.P. and Samaritan Hospital (pending in the Supreme Court, Rensselear County, Index No. 197528/99).

Plaintiffs in the underlying action filed suit on August 9, 1999, claiming that at the Samaritann Hospital on August 29, 1997, Dr. Abraham, while utilizing forceps during the course of attempting to deliver Erin Plumley’s child, negligently caused her to sustain a fourth degree laceration of her perineum resulting in a permanent disability. Dr. Abraham was an employee of Ob/Gyn Health Center Associates, L.L.P. at the time of the alleged malpractice, but had left their employ in July, 1998.

PRI insured Dr. Abraham as named insured under a claims-made policy (number 21686-09-00) effective July 21, 1997. The policy was cancelled by written request of Dr. Abraham, effective July 1, 1998, who advised PRI in a letter of July 2, 1998 of his belief (now known to have been mistaken) that he was covered as of July 1 under a policy held by his new employer. In this letter, Dr. Abraham requested a bill for “tail coverage” which “covers, for an unlimited period, CLAIMS within its coverage which arise from your rendering or failing to render professional services during the policy period and which you or your representative reports to the Exchange during the extended reporting policy period.” [Part 7B]. A premium notice was mailed to Dr. Abraham on September 16, 1998, advising him that he could purchase tail coverage for the period 7/21/97″7/1/98 for a premium of $15,938.00, one third of which was payable by 10/16/98. By letter of December 2, 1998, PRI advised Dr. Abraham that since no payment had been received, he had no tail coverage for the period 7/21/97″7/1/98. Dr. Abraham states in his affidavit of June 5, 2001 that the premium had not been paid due to a dispute he was having with his new employer but that upon receipt of PRI’s December letter, he contacted PRI by phone and was told by someone that tail coverage would be afforded upon receipt of payment, whereupon he sent PRI a check. No copy of a cancelled check has been provided to the court and Dr. Abraham offers no other proof that payment was actually received or accepted by PRI.

PRI first learned of the underlying claim on September 7, 1999, upon receipt of correspondennce with the summons and complaint from counsel for the Plumleys. By letter of September 9, 1999, PRI advised Dr. Abraham that, notwithstanding the fact that the underlying claim was received over one year after his policy was cancelled and that he had no tail coverage, PRI would undertake his defense in the underlying action under the aforesaid policy because a hospital had been named as a co-defendant. Dr. Abraham was reminded in that letter that Section I, Part 7G of his cancelled policy provided (in pertinent part) as follows: