The New Jersey Supreme Court has agreed to decide whether a doctor can be sued for deceit and battery for performing a procedure not covered by his malpractice insurance.
The justices, in Jarrell v. Kaul, will also determine whether similar claims can be brought against the medical facility that permitted the uninsured practice.
Two lower courts refused to allow the claims to go forward before the high court accepted the appeal on Nov. 22.
The suit was brought in Morris County against Richard Kaul, a board-certified anesthesiologist who owns the New Jersey Spine and Rehabilitation Center in Pompton Lakes.
Plaintiff James Jarrell went to Kaul in September 2005 about back and right-leg pain he had been suffering for more than 20 years, for which chiropractic care had not brought relief.
Kaul diagnosed a herniated lumbar disc, lumbar radiculopathy and discogenic back pain. On Oct. 11, 2006, at Market Street Surgical Center in Saddle Brook, he performed lumbar fusion surgery at L4-L5 and L5-S1, inserting two mesh cages screwed into place.
Right afterward, Jarrell began complaining about pain in his left leg. The pain allegedly worsened to the point where he could not lift his left foot and he fell more than once.
Two other doctors removed the implanted material after concluding that it was pinching a nerve. Jarrell claimed he felt much better as a result and was able to cut back on his pain medication but he still had left foot drop, allegedly caused by injury to the L4-L5 nerve.
The ensuing malpractice suit claimed deceit, misrepresentation and outrageous conduct by Kaul for concealing that he was not insured to perform spinal surgery, as required by law.
Kaul’s malpractice policy with Professional Underwriters Liability Ins. Co. contains a specific exclusion for spinal surgery, says Jarrell’s lawyer, Lewis Stein of Nusbaum, Stein, Goldstein, Bronstein & Kron in Succasunna. Kaul attempted to obtain coverage for such surgery but was rejected, Stein adds.
Jarrell claimed that because he was not told Kaul lacked insurance, he did not give informed consent to the surgery, which thus amounted to a battery.
The suit also named Market Street Surgical for allegedly facilitating Kaul’s performance of the surgery despite his lack of qualifications and insurance.
Superior Court Judge Rosemary Ramsay denied Jarrell’s motion for summary judgment on the fraud claim based on Kaul’s assertion that he had sufficient liquid assets to pay the judgment.
On pretrial motions, Judge Donald Coburn, serving on recall, dismissed the coverage-related claims against Kaul and the related claims against Market Street Surgical—the latter because Jarrell did not have an expert who could testify it breached the standard of care by allowing Kaul to operate without coverage.
The jury awarded Jarrell $1.14 million, comprised of $500,000 in compensatory damages, $250,000 on his wife’s per quod claim, medical expenses of nearly $190,000 and interest.
On March 1, Appellate Division Judges Joseph Yannotti, Jonathan Harris and Richard Hoffman affirmed the judgment and dismissal of the coverage-related claims.
They noted that a New Jersey statute which requires doctors to carry malpractice liability coverage of at least $1 million per occurrence and $3 million per policy year and, to the extent insurance is not available, a $500,000 letter of credit, does not recognize a direct action against a noncomplying physician. It is for the Board of Medical Examiners to take disciplinary action or impose civil penalties, they said.
Jarrell’s petition for certification urged the court to take the case “to deter conduct which leaves patients unprotected from gross negligence or unscrupulous practitioners.”
Stein says the advantage of winning a judgment based on fraud or deception is that Kaul would not be able to discharge it if he files for personal bankruptcy, which is a real concern. His company filed a Chapter 11 petition in June of this year. Kaul’s medical license has been suspended since June 2012 for performing spinal surgeries despite lack of adequate training.
Another advantage is the possibility of recovering punitive damages, which are not available for medical malpractice.
Kaul’s counsel, Glen Rock solo Jeffrey Randolph, did not return a call.
Far Hills solo Peter Rhatican, who represents Market Street Surgical, says he is surprised the court took the issue regarding his client since no one has ever placed a mandate on a hospital or offsite surgical center to enforce the mandate on malpractice liability coverage. ■