State Appeals to Court for Cash

Attorney Kevin Fitzgerald has filed dozens of pages worth of briefs on behalf of his clients- the JUA policy holders.

But he boiled all his legal arguments into one plain sentence.

TAPE: you can’t take things that don’t belong to you.

That’s how Fitzgerald began his argument in front of the state Supreme Court.

Fitzgerald says his case is straightforward.

Doctors and other medical providers pay the JUA for malpractice insurance.

He says money left over goes into a surplus fund that the JUA can use for only two things; keep premiums low or...

TAPE: give it to policyholders.

Fitzgerald explained that doctors and others sign a contract that says they shall receive money if there is a surplus.

As far as Fitzgerald is concerned the state is trying to take money they have absolutely no claim to.

Lawyers for both sides agree the key legal question is whether JUA policyholders have a so-called vested right to money in the surplus fund.

A vested right, is a right that is so completely and definitely belongs to a person that it can’t be taken away without that person’s consent.

Arguing for the state, David Leslie told the court medical providers do have vested rights, just not to the money.

TAPE: the policyholders have a contractual right to the coverage, there is a contract and they have a vested right for coverage.

Leslie says the JUA policy holders have a ‘contingent’ or what Chief Justice John Broderick called an expectant right to the money.

That is, doctors and others can get surplus money only if the JUA board and the state Insurance Commissioner sign off.

The Chief Justice and Leslie went back on forth on that claim.

TAPE: my question is...you say all they have is an expectancy, not vested. I would argue perhaps they have a vested right in this sense, if the board decides there is a surplus and the commissioner approves a distribution, they are the sole beneficiaries under the regulations....if the board had declared the dividend, if the Commissioner had approved it, and then the Legislature had then acted by all means they would have a vested right....my concern is that someone, the state in this case, has rushed in, swept those funds out so the dividends they are entitled is now impossible.

After the hearing attorney Kevin Fitzgerald laughed at the suggestion that his clients- JUA policyholders- don’t have a vested right in surplus money until the board and insurance commissioner say so.

TAPE: we paid for this policy which says we get coverage, we pay premiums, if the premiums are more than required for the coverage, we get the difference back.

TAPE: that is not what the law says. I understand Kevin has his point of view, but that’s not what the law says.

Associate Attorney General Ann Edwards.

TAPE: a contract itself does not create a vested right...So in this case, the argument the state has made is there has never been a dividend declared so while this money is there it’s there and possibly available. But until a dividend is declared and approved by the commissioner it doesn’t exist as a vested property right.

Fitzgerald says the state’s interpretation of the law sets a dangerous precedent.

TAPE: if you can do the legal gymnastics that the state is engaged in here, justify taking $110 million dollars of other people’s money, that was not paid in at a time when they understood that the state could take it....I think that would be a very significant constriction of the state and federal guarantees against the taking of public property.

The Attorney General’s Office says its expecting a decision relatively soon.

The AG has notified the Court that the state faces certain bond deadlines by the end of November.

For NHPR News, I’m DG.