Friedman Professional Management Co. v. Norcal Mutual Insurance

I. Overview

In 1994, a lawsuit was brought against a surgery center and its owner, an oral surgeon, by a patient of the center for medical malpractice when, the year before, her surgery went horribly wrong, resulting in, among other things, vaginal bleeding. The patient’s bleeding was the result of the center’s having supplied the wrong pump and the wrong fluids for an operation to remove a polyp from her uterus. The center’s medical malpractice insurer defended that claim under a medical malpractice policy issued in 1993 and eventually paid the policy limits after litigation of the claim.

In 1996, another lawsuit was filed by the patient against the same surgery center and its owner for sexual battery arising out of the fact that the owner of the center had attempted to tamponade the patient’s vaginal bleeding during the operation that went awry. The medical malpractice insurer defended that claim too, but under the policy issued in 1993 and under which it had also defended the medical malpractice claim. The insurer continued to defend the claim until the limits of the 1993 policy were exhausted. However, it did not continue to defend the claim under the limits of a…