Ruiz-Requena v. Clinic Mutual Insurance Company Risk Retention Group
Published: Jul. 29, 2000 | Result Date: Mar. 3, 2000 | Filing Date: Jan. 1, 1900 |Case number: BC203811 Bench Decision – $0
Judge
Court
L.A. Superior Central
Attorneys
Plaintiff
Defendant
Experts
Defendant
Sheila Callison
(technical)
Facts
In 1991, William Merritt was hired to be medical doctor of T.H.E. Clinic for
Women in Los Angeles, a non-profit health care. Merritt was paid a salary for the services he provided to
T.H.E. Clinic as he also billed Medi-Cal separately for medical services he provided to T.H.E. Clinic patients.
As part of his employment package, Merritt was provided with medical malpractice coverage for the
professional services he provided on behalf of T.H.E. Clinic.
T.H.E. Clinic had a policy of insurance in force when Merritt was hired and he was added to the policy for his
professional services "rendered for the named insured that are within the course and scope" of the physicianÆs
duties to T.H.E. Clinic. Neither of the plaintiffs in this action were ever patients of T.H.E. Clinic.
Sometime during 1994 and 1995, while still employed with T.H.E. Clinic, Merritt entered into a contract with
Daniel Freeman Memorial Hospital.
The agreement provided that Merritt would work approximately one 24-hour shift per week. Merritt was paid a
flat rate by the hospital for each shift he covered and billed Medi-Cal for any medical services he provided to
patients.
Plaintiff the defendant contended that Merritt was not working on behalf of T.H.E. Clinic while he was at
Daniel Freeman. All monies he received for his activities at Daniel Freeman under the Daniel Freeman contract
belonged exclusively to Merritt and no portion was provided to the clinic. T.H.E. Clinic derived no benefit from
MerrittÆs contract activities at Daniel Freeman. In fact, T.H.E. Clinic advised Merritt that his outside or
"moonlighting" activities were interfering with T.H.E. ClinicÆs ability to ensure adequate coverage for its own
patients. On Feb. 14, 1996, plaintiff Cecilia Ruiz-Requena presented to Daniel Freeman Memorial Hospital
showing signs of premature labor and was assigned to MerrittÆs care. She alleged that he negligently managed
her labor, resulting in the death of her unborn fetus.
On May 6, 1997, she filed suit against Merritt and the hospital claiming negligence, wrongful death and
negligent infliction of emotional distress.
Merritt tendered his defense in the action of CMIC, which ultimately denied coverage based upon the fact that
the care provided to plaintiffs did not arise out MerrittÆs activities on behalf of T.H.E. Clinic and were,
therefore, not performed "on behalf of the Named Insured." CMIC contended that since as the care provided to
plaintiffs was not within the course and scope of MerrittÆs employment with T.H.E. Clinic, as required by the
policy, there was no coverage for the claim.
Shortly before that trial, the malpractice action resulted in a settlement whereby the hospital paid plaintiffs
$88,000 and Merritt stipulated to liability and judgment in the amount of $162,000.
As part of the settlement agreement between Merritt and plaintiffs, the latter agreed in writing that they would
not execute on the judgment against Merritt personally. In exchange for the covenant not to execute, Merritt
agreed to assign his rights under the CMIC policy, if any, to plaintiffs.
Thereafter, on Jan. 15, 1999, plaintiffs filed the instant action against numerous defendants for breach of
insurance contract, professional negligence, misrepresentation and declaratory relief.
Other Information
At the time of trial, all defendants, except CMIC were voluntarily dismissed or were granted summary judgment. The remaining claim was against CMIC for breach of insurance contract and declaratory relief. T.H.E. Clinic and its insurance carrier asserted that the insurance contract only covered the physician for his professional activities that arose out of the course and scope of his employment with T.H.E. Clinic. Prior to trial and upon motion for summary judgment, defendant Norcal Mutual Insurance Company was dismissed. The plaintiffs alleged that the policy should be interpreted to include coverage for the physicianÆs activities which were performed while the physician was on duty and at an under private contract to Daniel Freeman Memorial Hospital. This case was originally filed on Nov. 4, 1998, in Los Angeles Superior Court, Torrance, as case number YC029424. It was refiled in the above jurisdiction on Jan. 15, 1999.
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