Complaint For Bad Faith—Carrier’s Refusal to Provide Independent Counsel
SUPERIOR COURT FOR THE COUNTY OF ________________
PLAINTIFF :
:
vs. : C.A. No. ___________
:
DEFENDANT :

COMPLAINT

PARTIES
1. Plaintiff who was involved in a West Palm Beach Florida Accident is a duly licensed doctor whose practice is in the Town of Kalamazoo, State of Rhode Island.

2. Defendant is an unincorporated association whose function is to issue policies of liability insurance to health care providers in Rhode Island.
JURISDICTION
3. Jurisdiction is conferred upon this Court pursuant to R.I.G.L. §9-30-1 et seq., the Uniform Declaratory Judgment Act, this being an action wherein this Court is asked to declare the rights and obligations of the parties pursuant to the terms of a contract of insurance issued by Defendant.

GENERAL ALLEGATIONS
4. At all times material hereto, Plaintiff who was involved in a West Palm Beach Florida Accident was a physician acting in his capacity as Chief of Surgery at The Hospital of Kalamazoo (the “Hospital”) and was insured under a liability policy, Policy No. JUA0017265 issued by Defendant (the “Policy”). A copy of the Policy is annexed hereto as Exhibit A and made a part hereof.

5. At all times material hereto, the Hospital staff was comprised of two categories of physicians: (1) those physicians who had been appointed to active status and were accorded full privileges to practice within the Hospital’s bylaws and rules and regulations; and (2) those physicians who were members of the associate staff of the Hospital and whose privileges were limited in certain respects by the Hospital’s bylaws, rules and regulations. The latter category of physicians was comprised of those who were, from time to time, being considered for advancement to the active staff .

6. Included among Plaintiff who was involved in a West Palm Beach Florida Accident s duties as Chief of Surgery was the requirement that he review every surgical case of those physicians on the associate staff who were practicing within the Department of Surgery.

7. As part of his duties in reviewing surgical cases of the associate staff, Plaintiff who was involved in a West Palm Beach Florida Accident was called upon to review the charts of a particular surgeon who was a member of the associate staff from March 1995 to September 1997.

8. As a result of certain concerns which developed prior to and during Plaintiff who was involved in a West Palm Beach Florida Accident ’s review of the associate staff member referenced to above, peer review proceedings were commenced which ultimately resulted in the associate staff member’s resignation from the Hospital.

9. On or about April 29, 1998, the associate staff member referred to above commenced legal proceedings in the United States District Court for the District of Connecticut against Plaintiff who was involved in a West Palm Beach Florida Accident , the Hospital and other physician defendants alleging, inter alia, that the defendants:
a. wrongfully conspired to prevent or otherwise restrict the associate staff physician’s practice of his profession, in violation of Federal law;
b. wrongfully defamed the associate staff physician; and
c. tortiously interfered with the associate staff physician’s contractual relations. The associate staff physician has sought in the Connecticut action compensatory and treble damages under federal law, as well as compensatory and punitive damages under state law.

10. Plaintiff who was involved in a West Palm Beach Florida Accident sought coverage and a legal defense under the Policy.

11. In response to Plaintiff who was involved in a West Palm Beach Florida Accident ’s request for coverage and a defense, Defendant sent a letter to Plaintiff who was involved in a West Palm Beach Florida Accident of May 29, 1998 wherein it: (1) gave notice of its selection of defense counsel; (2) declined to provide a defense and expressly reserved its rights to deny coverage for treble damages, punitive damages and injunctive relief; and (3) advised Plaintiff who was involved in a West Palm Beach Florida Accident to consider obtaining private counsel at his own expense with regard to these claims for relief and damages.

12. In response to Defendant’s May 29, 1998 letter, Plaintiff who was involved in a West Palm Beach Florida Accident ultimately retained the undersigned private counsel to represent his interests with regard to the claims for relief and damages upon which Defendant had reserved its rights.

13. After certain preliminary discussions and meetings, Plaintiff who was involved in a West Palm Beach Florida Accident , through his counsel, notified Defendant of a perceived conflict of interest between Defendant and Plaintiff who was involved in a West Palm Beach Florida Accident presented by the claims raised in the Connecticut action and, accordingly, requested that Defendant agree to bear the cost of private counsel under the well-settled law of Rhode Island as more specifically articulated in the case of Employer’s Fire Ins. Co. v. Beals, 103 R.I. 623 (1968). A copy of counsel’s letter is annexed hereto as Exhibit B and made a part hereof.

14. In response, Defendant sent Plaintiff who was involved in a West Palm Beach Florida Accident a letter of November 12, 1998 in which it declined to bear the cost of Plaintiff who was involved in a West Palm Beach Florida Accident ’s private counsel. In so doing, Defendant has attempted to distinguish the law embodied in the Beals decision.

15. The Connecticut litigation in which Plaintiff who was involved in a West Palm Beach Florida Accident is a defendant is expected to require significant defense efforts during the months of December 1998 and January 1999 as the parties in that action seek to comply with the Court’s current Pretrial Order Pursuant to which discovery closes on March 2, 1999. As a consequence, Plaintiff who was involved in a West Palm Beach Florida Accident respectfully submits that the issues presented in this action are pressing and call for a prompt declaration of the parties’ rights and obligations so as to permit an appropriate representation of Plaintiff who was involved in a West Palm Beach Florida Accident ’s interests in the Connecticut litigation.
WHEREFORE, Plaintiff respectfully requests that this Court:
A. Declare the rights and obligations of the parties pursuant to the Policy by requiring Defendant to reimburse Plaintiff for the costs of private counsel in the Connecticut action incurred to date and to cover such costs in the future.
B. Order such other and further relief as this Court deems appropriate in the circumstances.

Plaintiff
By His Attorneys,