Thomas J. O'Leary, a newly appointed partner at Connell Foley LLP, recently prevailed in a wrongful death case brought against Transportation Insurance Company (TIC), a subsidiary of the seventh largest commercial insurer in the U.S. The case was decided after six years of litigation.
In Basil v. Wolf, ___ N.J. ___, 2007 WL 4302777 (N.J.), the Estate of John Basil brought a wrongful death action against TIC claiming that the insurer was liable for the alleged medical malpractice of a physician in failing to diagnose a malignant tumor during an independent medical examination of an injured worker.
The physician, who did not maintain any medical malpractice insurance coverage, had been engaged by TIC to perform an independent medical examina- tion of the injured worker in connection with a worker's compensation claim. The Estate sought to hold TIC liable for the alleged malpractice of the physician claiming that the insurer's pre-authorization requirements amounted to the direct provision of medical care, a position which would have vastly extended vicarious liability for medical malpractice to insurance companies.
In November 2002, at the close of discovery and on the eve of trial, the trial court granted Connell Foley's motion for summary judgment dismissing all claims against TIC with prejudice.
On December 11, 2007, the New Jersey Supreme Court issued an opinion affirming the dismissal of the claims against TIC holding that the insurer was entitled to statutory immunity under New Jersey's Workers' Compensation Act. The Court held that "it is well settled in this State that there is no direct action available to an injured employee against the employer, or against the employer's insurer when the insurer takes no action beyond that which is required under the Act and the carrier's insurance policyExceptions to the no-direction action rule are few and narrow." The Court's ruling substantially limits the circumstances upon which a direct action at law can be maintained against workers' compensation carriers.