Safian v. Ætna Life Insurance

Dore, J. On this appeal appellant contends that a physician’s liability policy indemnifying him against loss from claims for damages “ on account of any malpractice, error or mistake com [766] mitted ” by the assured covers liability in an action for breach of contract to remove facial blemishes. On the material and relevant facts that are not in dispute, we think the Special Term properly denied the plaintiff’s motion for summary judgment and granted defendant’s motion, and that the judgment in defendant’s favor should be affirmed. The policy was issued in February, 1934. In November, 1935, one Kirsch, a patient of the insured, sued him for damages, alleging in his complaint an express agreement by the physician to remove certain markings from the patient’s face and restore it to normal in consideration of the payment of $100, that after several operations, the abnormality was worse, and that “ by reason of the violation of the agreement ” on the doctor’s part, the plaintiff therein was disfigured to his damage in the sum of $15,000. The insurance company notified the doctor it would not indemnify him for any recovery in the action if it was based upon any contract, guaranty or specific agreement in connection with the treatment of the patient. But as the doctor denied any contract to cure, the insurance company stated it would defend without waiving its rights. The company pointed out to the doctor that one of the statements in connection with the issuance of the policy was the representation made by him that he did not have in force and would not “ enter into any special contract or agreement * * * guaranteeing the result of any operation or treatment.” In the course of the trial of that action, the plaintiff therein moved to amend, adding an additional cause of action based on malpractice. The motion was granted but on defendant’s motion that cause of action was dismissed on the ground that it was barred by the Statute of Limitations. The court charged the jury there was but one cause of action presented, namely, an action for breach of an alleged contract, pointing out that the plaintiff claimed the defendant promised, agreed and guaranteed to remove the scars. The jury rendered a verdict in plaintiff’s favor for $4,000. For an error in the court’s charge, the judgment entered on that verdict was reversed by this court and a new trial ordered (Hirsch v. Safian, 257 App. Div. 212) in an opinion in which Mr. Justice Cohn, writing for the unanimous court, stated: “ Plaintiff, a salesman, sued defendant, a physician and surgeon, for damages arising out of a breach of contract,” and said that the rule regarding the burden of proof showing a causal relation between the act of the defendant and the injury “ must necessarily apply to a case such as this one involving a claim for damages for a breach of contract to cure. Plaintiff is permitted to recover only for damages which naturally and directly flow from the breach of the contract made between the parties.” (Citing cases.) [767] The insurance company then pointed out to the insured that the action again tendered for its defense was characterized by this court as one involving a claim for damages for breach of a contract to cure, and refused to indemnify or defend. Thereafter, during a second trial of the case, the doctor settled for $1,250. He here sues the insurance company for this sum and an additional sum of $2,006 for expenses for counsel fees and services in prosecuting the appeal and defending the retrial. In Berman v. Ætna Life Ins. Co. (256 App. Div. 916 [Feb. 1939]) this court, without opinion, affirmed a determination of the Appellate Term denying plaintiff’s motion for summary judgment based upon the same group insurance policy. In that case, the doctor, who was covered by the same clause in the same policy, was sued in our Supreme Court by a patient to recover damages for malpractice; the action was dismissed without prejudice; and thereafter the same plaintiff sued in the United States District Court for the Southern District of New York for breach of contract, under the terms of which the doctor in consideration of $400 agreed and warranted that he would by operation remove plaintiff’s facial disfigurements. The insurance company on receiving the Federal court summons and complaint denied coverage, reserved its rights, but furnished the defense. The jury brought a verdict in favor of the plaintiff against the doctor for $1,000. When the plaintiff failed to collect this from the doctor, he sued defendant in the City Court under section 109 of the Insurance Law. That court denied plaintiff’s motion for summary judgment on the authority of McGee v. United States Fidelity & Guaranty Co. (53 F. [2d] 953) on the ground that the plaintiff’s judgment against the insured was founded solely upon a claim of breach of an express contract which was not within the coverage of the policy. The determination of the Appellate Term affirming that ruling was affirmed by this court. (Berman v. Ætna Life Ins. Co., 256 App. Div. 916.) Thereafter, defendant moved for summary judgment and its motion was granted, the Appellate Term affirmed (N. Y. L. J. Feb. 29, 1940, p. 939), and leave to appeal was denied. We think that case indicates the rule that is here applicable. The case of Sutherland v. Fidelity & Casualty Co. of N. Y. (103 Wash. 583; 175 P. 187) is not controlling. In the McGee case (supra) the Circuit Court of Appeals for the First Circuit on similar facts held that the defendant’s policy did not cover “ liability under a special contract * * * to cure.” In this case no facts or circumstances establishing waiver or estoppel were established. Here, as in the Berman case, the basis of non-liability is not that the coverage was voidable by reason [768] of any breach of condition but that no insurance was ever issued or in existence covering a cause of action based upon a breach of contract to cure. On reason as well as on authority, we think the orders appealed from should be affirmed. It should be obvious that insurance coverage for claims arising out of “ malpractice, error or mistake,” is clearly legally distinguishable from coverage for breach of contract. The legal duty, the breach of which is covered, is wholly different. If a doctor makes a contract to effect a cure and fails to do so, he is liable for breach of contract even though he use the highest possible professional skill. Insurance of such a contract could protect only medical charlatans. The honorable member of the medical profession is more keenly conscious than the rest of us that medicine is not an exact science, and he undertakes only to give his best judgment and skill. He knows he cannot warrant a cure. The appellant seems to rely upon fragments of evidence in the first trial regarding errors or mistakes which the plaintiff said the doctor made or admitted that he made. What the evidence was and what the jury found in the first trial is not determinative of the issue here presented. The judgment entered on that verdict was reversed and the case remanded for a trial de novo. Defendant, the doctor, preferred to settle the case without submitting the issues to a second jury. That settlement was made on the plaintiff’s claim that the doctor had breached his contract to cure. The insurance company gave no coverage for such a claim and is not answerable for any damages suffered by reason of a breach thereof. The judgment and orders appealed from should in all respects be affirmed, with costs. Martin, P. J., Townley and Untermyer, JJ., concur; Cohn, J., dissents, and votes to reverse.