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CHICAGO INS. CO. v. PACIFIC INDEM. CO.

October 20, 1982

CHICAGO INSURANCE COMPANY
v.
PACIFIC INDEMNITY COMPANY and CHUBB & SON, INC.



The opinion of the court was delivered by: FULLAM

 FULLAM, J.

 Plaintiff, insurer under an excess policy, claims that the defendant Pacific Indemnity Company, the primary carrier, did not contribute its full policy limits to the settlement of a medical malpractice case, with the result that plaintiff paid more than its share.

 A patient and her husband, Mr. and Mrs. Karl Pfeifer, sued the two gynecologists who had, in succession, treated Mrs. Pfeifer: Dr. Vallow, who had treated her from 1968 through 1971, and Dr. Gerstley, who had treated her from 1972 until May 1975. The Pfeifers contended that both physicians were negligent in failing to perform or obtain a biopsy of certain suspicious vaginal lesions. When a biopsy was finally performed on May 6, 1975, it was discovered that Mrs. Pfeifer suffered from a cancer which, by that time, had progressed to the incurable stage.

 The two physicians practiced independently but, as it happened, had identical insurance coverages: a $100,000/$300,000 primary liability policy with the defendant Pacific, and a $1 million excess policy with plaintiff Chicago. Each of the policies covered a one-year period, and each was renewed annually.

 It was and is the position of the defendant Pacific that its maximum exposure was $100,000 on behalf of each of the insured physicians. Accordingly, before the Pfeifer case was called for trial, Pacific tendered $200,000 toward settlement of the case. In the course of the trial, a total, lump-sum settlement of $850,000 was agreed upon. Of that amount, plaintiff, Chicago, paid $650,000, and the defendant Pacific paid $200,000.

 Plaintiff makes two basic claims: (1) that, since the alleged failure to obtain a biopsy was a continuing tort, each of Pacific's one-year policies rendered Pacific liable for at least $100,000 (i.e., that Pacific's maximum liability should be calculated on a cumulative basis); and (2) that, in any event, the claims of Mrs. Pfeifer were separate from the claims of her husband, so that Pacific should have paid at least $200,000 on behalf of each physician, for a total of $400,000, rather than $100,000 per physician for a total of $200,000.

 Before discussing these claims, it is necessary to address plaintiff's motion to disqualify defendants' counsel. In its initial response to plaintiff's Motion for Summary Judgment, defendant included an affidavit executed by Adrian R. King, Esq., a member of the law firm which represents defendant Pacific in this action. Mr. King had represented Dr. Gerstley in the malpractice case, and his affidavit discusses the chronology of the settlement of the malpractice action. All concerned recognize that, if Mr. King were to be called as a witness at the trial of this case, disqualification of his law firm would be appropriate. Apparently, it did not occur to defense counsel that DR 5-101(B) and DR 5-102(A) might also be implicated if Mr. King were to "testify" in affidavit form in connection with the summary judgment motions. Mr. King's affidavit merely corroborates the affidavit of the attorney (from another law firm) who represented Dr. Vallow in the malpractice case. The facts set forth in both affidavits are neither controverted nor controversial. Moreover, in the view I take of this case, both affidavits are immaterial. But in any event, in response to the disqualification motion, defense counsel promptly sought leave to withdraw the King affidavit from consideration, and I have not considered it in disposing of the pending summary judgment motions. An order will be entered striking the King affidavit from the record. The Motion for Disqualification will be denied.

 I.

 Plaintiff's contention that the coverages under Pacific's successive annual policies should be "stacked" before plaintiff's excess policy is called into play must be rejected, for each of two fundamental reasons. The first is that, under the plain terms of the primary policies issued by defendant Pacific, the maximum amount which defendant could become obligated to pay on behalf of the insured was $100,000 per claim or $300,000 in the aggregate. The fact that the physician's alleged failure to make a proper diagnosis may have extended over several years does not mean that the failure gave rise to more than one claim of malpractice. Pacific obligated itself

 
". . . To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of injury arising out of:
 
(a) malpractice, error or mistake of the insured . . . in rendering or failing to render professional services . . . ."

 The limits of Pacific's liability are clearly expressed. The declaration page contains the following:

 
"LIMITS OF LIABILITY
 
$100,000 each ...

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