A case discussing medical battery.

Rice went in for surgery for pain in his right leg and came out of it with pain in his left leg. Later he discovered that the surgeon had a drug problem and had been stealing drugs from patients. He sued for battery, negligence, and breach of contract. The trial court granted the defendants summary judgment; the Court of Appeals affirms.

On the battery claim, the court interprets Duncan (2008) to mean that there is battery only when the surgeon performs an operation to which the patient did not consent. Rice, who consented to the operation, argued that his consent was not valid because he did not have full disclosure. But informed consent is a negligence issue.

On that issue Rice apparently did not present evidence that he would have declined the surgery had he known that his surgeon was a drug addict. And he couldn’t prove that the actual performance of the surgery fell below the standard.

Rice sued the clinic for negligent supervision, arguing that it had constructive knowledge of the surgeon’s problem because he was a partner in it. But that is not true for acts hostile to the employer’s interests (presumably kept it secret so that he could steal drugs).

Finally, Rice argued the doctrine of good faith and fair dealing. It isn’t entirely clear what the argument was or why the court declines to consider it; his briefs seem to have been defective.

.(link to opinion)

The court holds, we think, that Arizona does not have a “categorical” policy preventing an insurance policy from covering restitution.

Employees of a Massachusetts resort sued in a class action for tips illegally withheld from them. The resort was broke so these plaintiffs, its Massachusetts officers/directors, had to pay a large settlement out of their own pocket. They then sued their insurance agent, an Arizona firm, for not telling them that their D&O policy didn’t cover that kind of case and for not selling them one that did. Lovitt contended that it can’t be liable because the settlement was restitution and restitution can’t, as a matter of public policy, be covered by insurance. The  trial court agreed and gave Lovitt summary judgment. Plaintiff appealed.

The Court of Appeals suggests that the issue – “whether restitutionary payments are potentially insurable under Arizona law” – is of first, or at least early, impression in Arizona. In that event it would have been nice to know why Arizona law applies. We can, by guessing about some facts that aren’t in the opinion, think of reasons why it would but also of arguments why it wouldn’t. The court doesn’t mention the issues; perhaps the parties didn’t raise it. In any event, the court reverses.

You know where the opinion is going when it starts by saying that the Restatement (Second Contracts 178) lists factors to be weighted in deciding whether a contract is unenforceable on public-policy grounds. The trial court had relied instead on cases on point, albeit from other jurisdictions. They all held restitution uninsurable. The court distinguishes them, for two reasons.

First, they held that not keeping money you aren’t entitled to in the first place isn’t a “loss.” That, the court tells us, is not really a public-policy analysis but is instead “anchor[ed]  . . . in the traditional insurance policy language triggering coverage.” You might call that splitting hairs but we don’t because we don’t see the hair to begin with; maybe we just need our reading glasses. But what are we to conclude? That restitution isn’t a loss but that public policy allows people to recover for losses that aren’t losses? Having characterized the cases as policy-language cases the court suggests that they can’t apply because in other cases the language might agree to cover restitution. But that’s apparently what these plaintiffs say theirs did (they also sued the insurance company); the question Lovitt raises is whether that’s even allowed.

Next the court says that under those other cases “one may not insure against the risk of being ordered to return money or property that has been wrongfully acquired.” (The court now lumps those cases together as “Level 3 [one of the case names] and its progeny”; since some of them predate Level 3 we don’t know what the court thinks “progeny” means.) The court says that can’t be right because “variation in contractual language . . . could . . . mitigate or even eliminate any public policy concerns.” How? What policy language? What public policy concerns? The court doesn’t say. It does say that such a “categorical” rule can’t apply here since Arizona law “mandate[s]  an exacting analysis of of the impact of public policy on the enforceability of specific contract agreements.” But how can you do that when instead of analyzing the specific contract agreement before the court you focus instead on hypothetical contracts that you think might be drafted differently? And even if you can draft your way around public policy, how can the possibility of doing that save a contract that wasn’t drafted that way?

So the court rejects the cases in favor of the factors.

It also believes that 1800 Ocotillo (2008) requires it to do so. Simply saying that – “Supreme Court precedent requires that we base our analysis on the Restatement: – rather than trying to distinguish cases the court is purportedly not supposed to consider anyway would have made for a better opinion. But that’s not how courts do things. It doesn’t look correct, for one thing (and maybe it isn’t). It doesn’t give the court a chance to influence the Supreme Court’s thinking on Level 3, et al. should that court take review. And it might cause people to wonder why the public policy of Arizona is controlled by the Restatement.

The factor analysis takes one paragraph (no. 13). Well, actually, it isn’t entirely clear how that paragraph analyzes he factors but the next one begins with “For these reasons, the factors” favor the plaintiffs so we assume that 13 intends to pass as the analysis. But that isn’t unusual; factor analysis is often shorter than case analysis in the same way that ideology is often pithier than logic.

(link to opinion)