CAMC's insurer files federal suit over $25 million verdict

CHARLESTON -- Charleston Area Medical Center and its insurers have been named in a lawsuit following a recent $25 million verdict against the hospital.

On Feb. 7, a Kanawha County jury returned a verdict of $5 million in compensatory damages and $20 million in punitive damages against CAMC in the case of R.E. Hamrick, who sought damages for defamation, invasion of privacy, compensatory and punitive damages, tortious interference with contractual relations and bad faith when CAMC revoked his privileges as a result of his malpractice insurance lapsing.

The jury found that CAMC had "engaged in fraudulent, malicious, oppressive, wanton, willful, or reckless conduct" and had "acted in bad faith, vexiously, wantonly, or for oppressive reasons."

In a suit filed on June 4, Executive Risk Indemnity Inc., a CAMC insurer, is now suing CAMC as it only provides insurance for claims that are not a result of a "wrongful act" or "brought about or contributed to in fact (1) by any dishonest or fraudulent act or omission or any willful violation of any statute, rule, or law by any insured." Because of the jury's verdict and finding, Executive Risk Indemnity Inc. believes it should not be responsible for the $25M that CAMC now owes. It has, however, offered to pay for the litigation costs.

Filed by Jill Sinatra, Dennis Mulvihill, and Daniel Rivetti of the Pittsburgh firm of Robb Leonard Mulvihill, the suit also asks that in the event the court cannot grant declaratory relief or decides that coverage does exist under Executive Risk Indemnity Inc.'s policy that it grants equitable contribution, requiring CAMC's other insurers, Vandalia Insurance Company, Employers Reinsurance Corporation, and Westport Insurance Corporation, to help cover the $25 million bill.

The suit was filed in the United States District Court for the Southern District of West Virginia because of the $25 million sum and diversity of citizenship. Executive Risk Indemnity Inc. is seeking a judgment declaring that it has no duty to indemnify CAMC or equitable contribution by Vandalia Insurance Company, Employers Reinsurance Corporation, and Westport Insurance Corporation as well as attorney fees.