By: Thomas Paschos, Esq.
Thomas Paschos & Associates, P.C.
Haddonfield, New Jersey
In Jarrell v. Kaul, (A-42-13) (072363), (N.J. Sup. Ct. September 29, 2015), plaintiff James Jarrell, who suffered from chronic back pain, was referred to defendant Dr. Richard A. Kaul, a board certified anesthesiologist who practiced at defendant Market Street Surgical Center (MSSC). In October 2005, Dr. Kaul performed a spinal fusion procedure on Jarrell. Following the surgery, Jarrell experienced new pain in his left side that worsened over time and led to a “drop foot.” In January 2006, Jarrell was examined by a board certified neurosurgeon, who concluded that the pain and drop foot were caused by Dr. Kaul’s improper placement of some screws that pinched a nerve. At the time of the October 2005 procedure, Dr. Kaul had a malpractice insurance policy that specifically excluded spinal surgery. Although he claimed to have $500,000 in liquid assets, he did not have a letter of credit in that amount. The Board of Medical Examiners (BME) revoked Dr. Kaul’s license to practice medicine in 2012.
Jarrell and his wife filed a complaint against Dr. Kaul and MSSC. On summary judgment, the court found that there was no cause of action against Dr. Kaul for deceit, misrepresentation, lack of informed consent, or battery based on his failure to maintain insurance. The trial court also dismissed plaintiffs’ claims against MSSC. Trial proceeded against Dr. Kaul limited to the issue of medical negligence, and the jury found that Dr. Kaul negligently performed the spinal fusion, which proximately caused Jarrell’s injury. Dr. Kaul appealed. The Appellate Division affirmed. The panel held that the trial court properly dismissed all claims against Dr. Kaul based on his lack of insurance because N.J.S.A. 45:9-19.17 does not provide a private cause of action for injured parties.
The<< Supreme Court granted Plaintiffs’ cross petition for certification. The Court was faced with determining whether N.J.S.A. 45:9-19.17 provides an implicit private cause of action exists against a physician who does not obtain or maintain statutorily required medical malpractice insurance. The Court noted that the express terms of N.J.S.A. 45:9-19.17 provide that a physician who obtains neither a policy of medical malpractice insurance nor a letter of credit is subject to disciplinary action by the BME and civil penalties. Neither the statute nor the implementing regulations expressly provide that an injured patient has a direct cause of action against a treating physician who does not comply with the statutory financial responsibility provisions.
The Court considered the legislative history and statutory language of N.J.S.A. 45:9-19.17 and found that the underlying purpose of the legislation is predominately proactive. “The legislative intent is to create a source of compensation for a patient injured by negligent medical care. A post-injury direct claim against a noncompliant and negligent physician is reactive and does little to further the articulated goal.”
Therefore the Court concluded that under N.J.S.A. 45:9-19.17, an injured patient does not have a direct cause of action against a physician who does not possess medical malpractice liability insurance or a suitable letter of credit. The Court also held that failure to comply with the statutory liability insurance mandate does not give rise to an informed consent claim.
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