Jarrell v. Kaul

• Decision Date: 29 September 2015
• Citation: 123 A.3d 1022,223 N.J. 294
• Parties: James R. JARRELL and Sheila G. Jarrell, his wife, Plaintiffs–Appellants, v. Richard A. KAUL, M.D. and Market Street Surgical Center, Defendants–Respondents, John T. Ford, Sussex County Total Health Center, Inc., Defendants.
• Court: New Jersey Supreme Court

223 N.J. 294
123 A.3d 1022

James R. JARRELL and Sheila G. Jarrell, his wife, Plaintiffs–Appellants,
v.
Richard A. KAUL, M.D. and Market Street Surgical Center, Defendants–Respondents,
John T. Ford, Sussex County Total Health Center, Inc., Defendants.

Supreme Court of New Jersey.

Argued Oct. 20, 2014.
Decided Sept. 29, 2015.

123 A.3d 1023

Lewis Stein, Succasunna, argued the cause for appellants (Nusbaum, Stein, Goldstein, Bronstein & Kron).

Jeffrey B. Randolph, Montvale, argued the cause for respondent Richard A. Kaul, M.D.

Peter E. Rhaticanargued the cause for respondent Market Street Surgical Center.

Abbott S. Brown, West Orange, argued the cause for amicus curiae New Jersey Association for Justice (Lomurro, Davison, Eastman and Munoz, attorneys; Mr. Brown and Christina Vassiliou Harvey, Freehold, on the brief).

Opinion

Judge CUFF(temporarily assigned) delivered the opinion of the Court.

223 N.J. 297

In this appeal, we examine three issues related to the statutory requirement that physicians licensed to practice medicine in New Jersey and providing medical care in this State must obtain and maintain medical malpractice liability insurance. The first issue presented in this appeal is whether an injured patient may bring a direct action against a negligent, uninsured physician. The second issue is whether a physician has a duty to advise a prospective patient that he is in compliance with the statutory medical malpractice liability

123 A.3d 1024

insurance requirement and whether the failure to obtain such insurance gives rise to a lack of informed consent claim. The third issue is whether a health care facility that grants privileges to a physician to use its facilities to treat patients has a continuing duty to ascertain a physician's compliance with the insurance requirement.

Plaintiff James R. Jarrell sought treatment for persistent pain in his back from defendant Dr. Richard A. Kaul, a board certified anesthesiologist. The doctor performed a spinal fusionprocedure at a surgical center. At the time of the operation, Dr. Kaul was required to have medical malpractice liability insurance or to have posted a letter of credit. The medical malpractice liability insurance issued to him expressly excluded spinal surgical procedures.

223 N.J. 298

Dr. Kaul instead maintains that he produced a suitable letter of credit.

The surgery performed by Dr. Kaul actually increased Jarrell's discomfort, so he sought treatment from another physician. Another surgeon performed a surgical revision of the procedure performed by Dr. Kaul.

Jarrell and his wife, Sheila, filed a complaint alleging that Dr. Kaul negligently performed the initial spinal procedure, and they sought compensatory damages for pain and suffering and economic losses caused by the physician's negligence. They also asserted a direct claim against Dr. Kaul based on his status as an uninsured physician at the time he treated Jarrell. Based on Dr. Kaul's lack of liability insurance, plaintiffs also asserted claims seeking damages for misrepresentation, fraud, deceit, and lack of informed consent. They also asserted a negligent hiring claim against the facility where Dr. Kaul performed the surgery. Jarrell's wife asserted a loss of consortium claim. Only the negligence claim proceeded to trial. A jury awarded $500,000 to Jarrell and $250,000 to his wife. All of the other claims were dismissed prior to trial.

Although it is undisputed that Dr. Kaul was uninsured for the procedure he performed on Jarrell, we affirm the dismissal of Jarrell's direct claim against the physician for his failure to maintain insurance. The statute imposing the medical malpractice liability insurance requirement does not expressly authorize a direct action against a noncompliant physician and neither the language nor the purpose of the statute supports such a claim.

Although a reasonably prudent patient may consider a physician's compliance with the statutorily imposed liability insurance requirement material information, lack of compliance or failure to disclose compliance does not necessarily provide the predicate for an informed consent claim. Indeed, using the informed consent doctrine to address the financial insecurity of a physician and the inability of a patient to satisfy a judgment or to fund a settlement

223 N.J. 299

would represent a marked departure from our prior informed consent jurisprudence. We decline to follow that course.

Finally, we hold that a health care facility that grants privileges to physicians has a continuing duty to ensure that those physicians have and maintain the required medical malpractice liability insurance or have posted a suitable letter of credit that conforms with the statutory requirement.

I.

Jarrell suffered from chronic back pain for many years. His chiropractor referred him to Dr. Kaul, a board certified anesthesiologist, in September 2005. Dr. Kaul's practice focused on pain management and minimally invasive spinal procedures. In 2005, Dr. Kaul saw patients and performed procedures at Market Street Surgical Center (MSSC) in Saddle Brook several times

123 A.3d 1025

a week. Dr. Kaul also served as the Medical Director of MSSC until 2007.

Dr. Kaul diagnosed Jarrell with a herniated lumbar disc, lumbar radiculopathy, and discogenic back pain. On October 11, 2005, Dr. Kaul performed a spinal fusionprocedure in which he fused the L4, L5, and S1 vertebrae using two mesh cages attached by rods and pedicle screws. Immediately following the surgery, Jarrell experienced new pain in his left side that worsened over time and eventually led to a “drop foot,”¹causing him to fall.

A friend referred Jarrell to Dr. Alfred Steinberger, a board certified neurosurgeon, in January 2006. Following an examination and diagnostic tests, Dr. Steinberger concluded that Dr. Kaul improperly placed some screws that pinched a nerve causing the pain and drop foot. On January 31, 2006, Dr. Steinberger removed and replaced the fixation devicesimplanted by Dr. Kaul in

223 N.J. 300

October 2005. Jarrell's pain decreased immediately following the second procedure; however, at the time of his January 2012 trial, he still required pain medication, including fentanylpatches, and his physical activity was limited.

Dr. Kaul was educated in England, where he practiced as a dental anesthesiologist. He relocated to New Jersey and obtained a license to practice medicine in 1995. Thereafter, he commenced a pain management practice and performed various spinal procedures, including the spinal fusionprocedure he conducted on Jarrell.

At the time of the October 2005 spinal procedure, Dr. Kaul had a malpractice insurance policy that specifically excluded spinal surgery. He claimed to have $500,000 in liquid assets but did not have a letter of credit from a bank or other financial institution. Dr. Kaul did not discuss his insurance coverage, or lack thereof, with Jarrell or his wife. Neither Jarrell nor his wife inquired about Dr. Kaul's insurance coverage.

The Board of Medical Examiners (BME)²revoked Dr. Kaul's license to practice medicine in 2012.

II.

Jarrell and his wife filed a nine-count complaint in the Superior Court against Dr. Kaul and MSSC. Jarrell asserted a claim against Dr. Kaul for medical negligence alleging that he departed from accepted standards of medical care in his choice of procedure and his selection of medical devices for use in the surgery. (Count One). Jarrell further alleged that Dr. Kaul misrepresented his qualifications and training, thereby wrongfully obtaining his informed consent for the surgery. (Count Two). Jarrell also claimed that MSSC negligently and unreasonably facilitated performance of an unauthorized surgical procedure by an unqualified

223 N.J. 301

physician. (Count Five). His wife asserted a loss of consortium claim. (Count Seven).

Jarrell also alleged that Dr. Kaul performed the October 2005 surgical procedure without the statutorily required malpractice insurance or letter of credit and withheld this information from him. He alleged that Dr. Kaul's noncompliance formed the basis for a claim sounding in deceit, fraudulent misrepresentation, and lack of informed consent (Count Eight), as

123 A.3d 1026

well as a battery claim (Count Nine). Plaintiffs also asserted claims against John T. Ford and Sussex County Total Health Center, Inc. (Counts Three and Four), which were dismissed.

Plaintiffs' motion for summary judgment based on Dr. Kaul's failure to carry medical malpractice insurance that covered the spinal procedure performed on Jarrell was denied. The motion judge reasoned that Dr. Kaul had informed the BME that he had substantially complied with the statutory requirement, and the BME had not placed any limits on his license to practice medicine. Plaintiffs renewed this motion immediately prior to trial and Dr. Kaul filed a cross-motion for summary judgment. The trial court granted Dr. Kaul's...