Princeton Ins. Co. v. Chunmuang

Citation151 N.J. 80,698 A.2d 9
Parties, 60 A.L.R.5th 861 PRINCETON INSURANCE COMPANY, Plaintiff-Appellant, v. Prasert CHUNMUANG, M.D., Defendant, and June Davis, Defendant-Respondent.
Decision Date08 August 1997
CourtUnited States State Supreme Court (New Jersey)

Joseph P. La Sala, Morristown, for plaintiff-appellant (McElroy, Deutsch & Mulvaney, attorneys; Mr. La Sala, Thomas P. Scrivo, and John T. Coyne, on the briefs).

Donald A. Caminiti, Hackensack, for defendant-respondent (Breslin and Breslin, attorneys; Karen Boe Gatlin and Lawrence Z. Farber, on the brief).

Michael A. Ferrara, Jr. and Jennifer A. Deiter, Cherry Hill, submitted a brief on behalf of amicus curiae Association of Trial Lawyers of America.-New Jersey (Ferrara & Rossetti, attorneys).

Joseph R. McDonough, Morristown, submitted a brief on behalf of amicus curiae American Insurance Association (Graham, Curtin & Sheridan, attorneys).

The opinion of the Court was delivered by

STEIN, J.

The critical issue posed by this appeal is whether an exclusion from coverage in a medical malpractice insurance policy for "injury resulting from [the physician's] performance of a criminal act" insulates the insurer from liability for compensatory damages awarded to the insured's patient in an action based on a sexual assault by the insured physician in the course of a gynecological examination. In a published opinion, 292 N.J.Super. 349, 678 A.2d 1143 (1996), a divided panel of the Appellate Division affirmed the Law Division's determination that the insurer was liable for the compensatory damages award notwithstanding the criminal-acts exclusion in its medical malpractice policy. The insurer, Princeton Insurance Company (Princeton), appeals to this Court as of right. R. 2:2-1(a)(2).

I

This declaratory judgment action filed by Princeton to determine its liability under the medical-malpractice policy at issue was preceded by a civil action instituted in 1994 by June Davis against Dr. Prasert Chunmuang, Princeton's insured. In that action Davis sought compensatory and punitive damages against Chunmuang for medical malpractice, negligent and intentional infliction of emotional distress, sexual assault, and assault and battery. Chunmuang failed to answer the complaint, and Princeton, on whom the complaint was also served by order of the Law Division, declined to answer or provide a defense for Chunmuang. The Law Division entered a default judgment against Chunmuang.

At the proof hearing, attended by an attorney for Princeton who did not participate, Davis testified that she had made an appointment to see Chunmuang in the fall of 1992 because she was experiencing monthly cramping but had not yet menstruated. Davis was seventeen years old at the time. Davis stated that the first thing that had made her feel uncomfortable was that when Chunmuang arrived in the examination room he told her to undress, but he did not immediately leave the room. She waited until he left to undress and then closed the door after him when he left it ajar.

In the course of the examination, during which Davis was in the stirrups, Chunmuang twisted his hand inside of her in a way that she perceived to be wrong. She tried to move away and he repeatedly moved her back down on the table and told her "Don't worry about it." This went on for five or ten minutes. During that time he asked her whether she was sexually active, and then why not. Afterwards, he examined her breasts. Again, Davis perceived that his actions were not appropriate to a breast exam which she had read about in pamphlets. She became very upset. When Davis was ready to leave the office, Chunmuang prescribed some pills and told her to come back in ten days.

Davis did not go back because Chunmuang had made her "feel dirty." At the time of the proof hearing, although she continued to experience cramping and had not yet menstruated, Davis had not been able to seek medical assistance from another gynecologist because of the emotional distress that resulted from her examination by Chunmuang. She did not present any expert medical testimony at the proof hearing.

Davis did present, however, an administrative complaint against Chunmuang by the Attorney General's office on behalf of the Board of Medical Examiners dated March 4, 1993; an order of temporary suspension dated March 16, 1993; and an order revoking Chunmuang's license dated June 17, 1993. The complaint outlined charges of misconduct under similar circumstances brought independently by five women, including Davis. Davis was the only minor. The other four women were longterm patients of Chunmuang's.

Davis's attorney also informed the court, and the court took judicial notice, that Davis and several other women had made criminal complaints against Chunmuang, who was subsequently indicted. Chunmuang pled guilty to several charges, although apparently the charge concerning Davis was dismissed as part of the plea bargain.

The court found that Davis's "testimony reflects activity and actions on the part of the doctor, which were not only a deviation from accepted standards but clearly a criminal act in the sense of amounting to a sexual assault." The court indicated that it found confirmation of the sexual assault in the Attorney General's complaint and the indictments of Chunmuang. Overall, the court was satisfied "that the doctor has departed from accepted standards and that the plaintiff has established a case of medical malpractice." The court noted that the plaintiff was caught in a "catch-22" situation regarding the proof of compensatory damages because part of her injury was her continuing inability to visit a gynecologist for further diagnosis and treatment. Confessing that it was "at a loss a little bit as to what the compensatory damages should be," the court nevertheless awarded Davis $50,000 in compensatory damages as well as $50,000 in punitive damages. The court made no finding that any portion of the compensatory damages was attributable to acts of medical malpractice distinct and separate from the sexual assault, nor did Davis offer any evidence that would support such a finding.

Prior to the final disposition of Davis's suit against Chunmuang, Princeton instituted this declaratory judgment action against Chunmuang and Davis seeking a determination that it had no duty either to defend Chunmuang in Davis's civil action or to satisfy any portion of the judgment against Chunmuang. In support of its motion for summary judgment, Princeton submitted the complaint in Davis's action against Chunmuang, the transcript of the proof hearing, the final judgment in favor of Davis, and a copy of the medical-malpractice policy issued to Chunmuang.

The policy declaration page states that it provides professional liability coverage. Under "Coverage," the policy states in relevant part:

We will pay all amounts up to the limit of liability which you become legally obligated to pay as a result of injury to which this insurance applies. The injury must be caused by a "medical incident" arising out of your supplying or failure to supply professional services.

"Medical Incident" is further defined, in relevant part, as: "any act or failure to act ... in the furnishing of the professional medical ... services by you...."

Under "Exclusions," the policy states in relevant part:

This insurance does not apply for:

(a) injury resulting from your performance of a criminal act.

The Law Division determined that the punitive damages portion of the judgment recovered by Davis was based solely on Chunmuang's criminal conduct, granting summary judgment to Princeton concerning its obligation to satisfy that portion of Davis's judgment. Concluding that the compensatory damages portion of the judgment was based on both medical malpractice and criminal conduct, the Law Division granted summary judgment to Davis concerning Princeton's obligation to satisfy the compensatory damages portion of her judgment against Chunmuang.

In affirming the Law Division, the Appellate Division majority "construe[d] the Princeton policy to mean that there will be coverage for 'injury' resulting from 'professional services' unless the 'injury' results from a 'criminal act.' " 292 N.J.Super. at 354, 678 A.2d 1143. The majority agreed with Davis that in this case, the "services performed and the assault are intertwined and inseparable." Ibid. Indicating that its view may represent a minority position; the majority nevertheless cited with approval St. Paul Fire & Marine Insurance Co. v. Asbury, 149 Ariz. 565, 720 P.2d 540, 542 (App.1986), which held that claims based on a physician's intentionally-improper manipulations during a gynecological examination were covered by his professional liability policy, because the abuse was "intertwined with and inseparable from the services provided." 292 N.J.Super. at 355, 678 A.2d 1143. The majority acknowledged, however, that the policy at issue in Asbury did not contain an exclusion for criminal acts. Id. at 356, 678 A.2d 1143. The majority also cited with approval language in Asbury stating that public policy favored protecting the interests of innocent victims. Id. at 355, 678 A.2d 1143.

Dissenting, Judge Keefe stressed that Davis did not dispute that Chunmuang's actions were criminal, and reasoned that "but for Dr. Chunmuang's criminal act, Davis would have suffered no compensable injury." Id. at 362, 678 A.2d 1143. Judge Keefe distinguished this case from Asbury because the medical-malpractice policy in Asbury contained no exclusion for criminal acts. Judge Keefe stated that the "intertwined and inseparable" nature of the services and the assault would be relevant only to the decision whether the injuries were covered as the result of a "medical incident," asserting that the nature of the services is irrelevant in this case because of the express exclusion for criminal acts. Id. at 362-63, 678 A.2d 1143.

II

Before the Appellate Division, Princeton contends that it...

To continue reading

Request your trial
118 cases
  • AT&T Corp. v. Clarendon America Insurance Co., C.A. No. 04C-11-167 (JRJ) (Del. 4/13/2006)
    • United States
    • United States State Supreme Court of Delaware
    • April 13, 2006
    ...275 (N.Y. 1984); Oot, 676 N.Y.S.2d 715, 720 (N.Y. App. Div. 1998); Nav-Its, Inc., 869 A.2d 929, 934 (N.J. 2005); Princeton Ins. Co. v. Chunmuang, 698 A.2d 9, 16-17 (N.J. 1997); Hampton Med. Group, P.A., 840 A.2d 915, 920 (N.J. Super. Ct. App. Div. 2004). Accord Church Mut. Ins. Co., 347 F.S......
  • AT&T Corp. v. Clarendon America Insurance Co., C.A. No. 04C-11-167 (JRJ) (DE 4/13/2006)
    • United States
    • United States State Supreme Court of Delaware
    • April 13, 2006
    ...275 (N.Y. 1984); Oot, 676 N.Y.S.2d 715, 720 (N.Y. App. Div. 1998); Nav-Its, Inc., 869 A.2d 929, 9 34 (N.J. 2005); Princeton Ins. Co. v. Chunmuang, 698 A.2d 9, 16-17 (N.J. 1997); Hampton Med. Group, P.A., 840 A.2d 915, 920 (N.J. Super. Ct. App. Div. 2004). Accord Church Mut. Ins. Co., 347 F.......
  • Mendoza v. Rivera-Chavez
    • United States
    • United States State Supreme Court of Washington
    • May 18, 2000
    ...to [an] exclusion, it must be interpreted to exclude something that would otherwise be covered." Princeton Ins. Co. v. Chunmuang, 151 N.J. 80, 698 A.2d 9, 18, 60 A.L.R. 5th 861 (1997). But an exclusion must still be evaluated to determine if it properly addresses only unusually risky behavi......
  • Mac Prop. Grp. LLC v. Selective Fire & Cas. Ins. Co.
    • United States
    • New Jersey Superior Court – Appellate Division
    • June 20, 2022
    ...valid and will be given effect if ‘specific, plain, clear, prominent, and not contrary to public policy.’ " Princeton Ins. Co. v. Chunmuang, 151 N.J. 80, 95, 698 A.2d 9 (1997) (quoting Doto v. Russo, 140 N.J. 544, 559, 659 A.2d 1371 (1995) ). However, they "must be narrowly construed," and ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT