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EPL coverage not triggered by anesthesiologist’s bias claim

EPL coverage not triggered by anesthesiologist’s bias claim

An anesthesiologist who filed a discrimination claim against an orthopedic surgeon was an independent contractor, not an employee, and is therefore not entitled to coverage under the surgeon’s employment practices liability coverage, says a federal appeals court in upholding a lower court ruling.

Jonathan M. Isom, an anesthesiologist who was a contract employee with a medical center in Hattiesburg, Mississippi, said Thomas B. Baylis, an orthopedic surgeon and CEO of Premier Orthopedic & Sports Medicine in Hattiesburg, refused to work with him solely because he is black and instead required him to arrange for a white anesthesiologist to assist him during surgery, according to the Dec. 29 ruling by the 5th U.S. Circuit Court of Appeals in New Orleans in Doctor Jonathan M. Isom v. Valley Forge Insurance Co.; Transportation Insurance Co. et al.

Dr. Isom said also Dr. Baylis was openly hostile and made derogatory remarks about him.

Dr. Baylis and his practice had two general liability policies with Valley Forge and Transportation Insurance, which are units of Chicago-based CNA Financial Corp., according to the ruling.

The policies provide coverage when there is a demand made on behalf of an “employee,” and expressly excludes independent contractors, according to the ruling,

Dr. Isom filed a lawsuit against Dr. Baylis and his practice, charging racial discrimination, which was settled for $4 million. The insureds then “sold” to Dr. Isom their right to recover under various insurance policies in exchange for Dr. Isom’s promise not to pursue any of their other assets, said the ruling. The insurers denied coverage in part on the basis Dr. Isom was not an employee.

Dr. Isom filed suit in U.S. District Court in Hattiesburg, charging the insurers with breach of contract and breach of the covenant of good faith and fair dealing, seeking the $4 million plus punitive damages. The District Court granted the insurers summary judgment.

A three-judge appeals court panel unanimously upheld the lower court ruling. It “was clear based on the complaint alone that Isom was not an employee of Baylis or Premier,” said the ruling.

“There is no indication in the complaint that the Insureds paid Isom or controlled his performance,” it said. “Rather, on the face of the complaint it appears that Isom and Baylis were independent specialists performing different functions during the surgery.

“Absent further detail, the complaint did not contain ‘reasonable, plausible allegations’” that Dr. Isom “was even arguably the Insureds’ leased or loaned employee,” the ruling said, in quoting an earlier decision, and upholding the District Court’s decision. 


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