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Med Mal-Appellate Team Win Appeal with Valid Unearthed Release

February 10, 2014

Alan B. Friedberg (Partner-White Plains), and Emily Fernandez (Associate-White Plains) won dismissal on appeal in the Appellate Division, Second Department, on behalf of a hospital, in a high-exposure case involving seriously injured twins. The case also had a complex procedural history.

In 2004, the twins’ parents commenced a medical malpractice action in the Supreme Court, Kings County, claiming that the negligent labor and delivery of their twins at another medical center, a third-party plaintiff, had resulted in severe injury. Our client had supplied the OBGYN doctors pursuant to an agreement between the hospitals. The medical center where the twins were delivered was a defendant in the main action, but later commenced a third-party action against our client for contractual and common law indemnification and contribution, alleging our client was responsible for the negligence of the OBGYN defendants who rendered treatment.

Wilson Elser moved to dismiss the third-party action based on a general release that the medical center had given our client in 1997. At that time, our client had sued the medical center for non-payment of fees in connection with the agreement by which OBGYN doctors were supplied. Our client agreed to discontinue the contract action in exchange for payment of $400,000 and a release of any claims that the medical center might have arising from or relating to the agreement. Alan Friedberg had located that release while handling an unrelated case and recalled its existence and relevance to this matter. 

On the motion to dismiss, Wilson Elser argued that the 1997 general release barred the medical center from third-party claims because the plain language of the release recited that the medical center released our client from any and all actions that the medical center ever had, now has, can or may have or claim to have arising from or relating to the hospitals’ agreement. In opposition, the medical center argued that the release was never intended to release then unknown claims of indemnification and contribution for medical malpractice. The Supreme Court agreed with the medical center and denied Wilson Elser’s motion.

Wilson Elser moved to renew and reargue its motion on the basis that the Supreme Court misinterpreted the release and relevant case law, including two recent Court of Appeals cases decided two days prior to the Supreme Court’s order. Renewal and reargument was granted, but the Court adhered to its prior decision.

Wilson Elser appealed to the Appellate Division, Second Department. Robert Spolzino, a former Second Department Appellate Division Justice, argued that the firm’s interpretation of the release and the case law mandated dismissal contrary to the lower courts’ two rulings against our client. The Appellate Division unanimously reversed and dismissed the action against, with costs, holding that the broad, unambiguous language of the release applied to the medical center’s claims, even if those claims were unknown when the release was executed. The Court took note of the fact that our client had bargained for the release in settling the underlying contract action for only $400,000. 

This is a significant victory as the potential exposure was in the millions and would have included a substantial Medicaid lien.

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