Recht shouldn't have prevented insurance hearing, Justices rule
Steve Korris Nov. 27, 2009, 2:37pm
CHARLESTON -– Circuit Judge Arthur Recht of Wheeling prevented a hearing he should have held on a doctor's malpractice insurance policy, the Supreme Court of Appeals has ruled.
The Justices on Nov. 17 rebuked Recht for failing to carry out a previous Supreme Court order that required a hearing for orthopedic surgeon Robert Zaleski of Wheeling.
Zaleski challenges a decision of West Virginia Mutual Insurance, denying renewal of his malpractice policy.
Two years ago the Supreme Court defined West Virginia Mutual as a "state actor," owing Zaleski the same due process he would receive from a state agency.
The Justices sent the case back to Recht, who ordered West Virginia Mutual to submit procedures for a hearing.
The insurer complied but Recht found bias in the procedures and rejected them.
He adopted procedures Zaleski proposed, sparking another appeal.
This time the Court split three ways.
Chief Justice Brent Benjamin and Justices Robin Davis and Thomas McHugh ruled that Recht's actions exceeded his jurisdiction.
"The delay occasioned by such actions is apparent," their unsigned opinion declared. "Well over two years after our decision in Zaleski I, there still has been no hearing."
They told Recht to follow West Virginia Mutual's procedures at the hearing, and they offered to hear a third appeal afterwards if the procedures don't satisfy Zaleski.
Their offer disturbed Justice Margaret Workman.
"How the majority can possibly reason that the issue of the proper procedures for a hearing are not ripe until that hearing is completed is beyond nonsensical," she wrote.
"All too often, this and other courts fail to recognize the expense it puts all parties to when unnecessary hearings are required," she wrote.
She wrote that Recht acted prudently within the bounds of the first decision.
Justice Menis Ketchum unhappily concurred with the majority, complaining that the first decision forced him to act against his judgment.
He pronounced the Court "plainly wrong" in defining West Virginia Mutual as a state actor, and he urged other Justices to consider overruling the decision.
Legislators created West Virginia Mutual, loaned it money, and temporarily exercised control over it, he wrote, but the state gave up all control over the company in 2004.
Doctors challenging policy terminations can obtain due process through state law that regulates private insurers, he wrote.
When West Virginia Mutual decided not to renew Zaleski's policy, he carried 19 malpractice claims on his record with a total cost exceeding $2 million.
James Companion and Yolanda Lambert of Schrader, Byrd and Companion in Wheeling represent Zaleski.
D.C. Offutt Jr., Perry Oxley and David Rich of Offutt, Fisher and Nord in Huntington represent West Virginia Mutual.