MRI Machine Explodes

No Coverage if Injuries not Related to Use of MRI

In John Fitzpatrick and Colleen Fitzpatrick v. Oradell Animal Hospital, Inc., et. al, No. A-3442-20, Superior Court of New Jersey, Appellate Division (November 1, 2022) Plaintiffs John Fitzpatrick and Colleen Fitzpatrick appealed from a June 17, 2021 order granting summary judgment in favor of defendant Continental Casualty Company (Continental).

Plaintiff sustained injuries on March 6, 2015, when a magnetic resonance imaging (MRI) machine installed at defendant Oradell Animal Hospital (Oradell) exploded. Oradell leased the MRI machine from defendant Advanced Veterinary Technologies, Inc. (AVT). On December 17 Oradell and AVT signed an agreement to lease the MRI machine (lease agreement), with a five-year renewal option, beginning on April 1, 2004.

The lease agreement required AVT to install the MRI machine at Oradell's facility. At the end of the term, the lease agreement provided "AVT shall deinstall, inspect, test, pack, remove and ship the [MRI machine] at AVT's expense." The lease agreement also stated AVT was responsible for "the repair of any damage to [Oradell's premises] on account of the removal of the [MRI machine] . . . ." Additionally, the lease agreement required Oradell to maintain insurance for "loss or theft of, or damage to, the [MRI machine] in the amount of $550,000, naming AVT as an additional insured and a loss payee . . . ."

Oradell complied with this provision by purchasing insurance from Continental. Continental issued a commercial insurance policy (Policy) to Oradell, covering the period September 21, 2014 to September 21, 2015. Under the "Coverages" section of the Policy, Continental agreed to "pay those sums that [Oradell] becomes legally obligated to pay as damages because of 'bodily injury,' 'property damage' or 'personal and advertising injury' to which this insurance applies."

While decommissioning the MRI machine, Hogan testified he "pick[ed] something up off the ground" and was surrounded by a "white cloud of helium." A split second later, the MRI machine exploded. The next thing Hogan remembered was "waking up on the ground." Plaintiff and Hogan suffered injuries from the explosion.

On August 31, 2017, plaintiffs filed a third amended complaint against Oradell, Helpern, AVT, Hogan, and others. On February 22, 2018, Hogan filed a crossclaim against Continental, seeking insurance coverage under the Policy.

After completing discovery, including depositions, Hogan moved for summary judgment, asserting Continental had an obligation to provide him with insurance coverage for plaintiffs' claims. Plaintiffs joined Hogan's motion.

Decisions on Summary Judgment

The motion judge heard oral argument on November 9, 2018. In an eight-page written decision, the judge found Hogan's "actions did not arise out of Oradell's maintenance, operation or use of the MRI machine," because Hogan was decommissioning the MRI machine on the date of the explosion. Additionally, the judge found "no substantial nexus between the plaintiff's injuries/Hogan's conduct and any negligent maintenance, operation or use of the MRI machine by Oradell." To the contrary, the judge concluded the decommissioning of the MRI machine was "the antithesis of the maintenance, operations and/or use of the MRI."

After a proof hearing, the judge entered a June 14, 2021 judgment in favor of plaintiffs and against AVT, awarding damages in the amount of $1,383,555.67 to John Fitzpatrick and $115,296.31 to Colleen Fitzpatrick.

Analysis

The court concluded that here is no ambiguity regarding the phrase "written contract or agreement" as used in the Policy. The fact that litigants offer conflicting interpretations of policy language does not render the policy language ambiguous. A genuine ambiguity arises only when the phrasing of the policy is so confusing that the average policy holder cannot make out the boundaries of coverage.

Moreover, equipment is only decommissioned upon the expiration of the lease term. As stated in the lease agreement, "[a]t the scheduled conclusion of this [lease], . . . AVT shall deinstall, . . . remove, and ship the [MRI machine] . . . ." Under the express terms of the lease agreement, the lease must terminate before decommissioning begins.

For Hogan to be eligible for coverage under the Policy, there had to be a substantial nexus between plaintiffs' injuries and Oradell's maintenance, operation, or use of the MRI machine. The uncontroverted evidence demonstrated no Oradell employee was in the room when the MRI machine exploded. Nor had any Oradell employees participated in the two-day decommissioning process prior to the explosion.

On this record, there is no evidence Oradell maintained, operated, or used the MRI machine after March 4, 2015. Thus, the judge properly granted summary judgment to Continental.

ZALMA OPINION

It is always interesting to see a court opinion where the court read every word of the insurance policy, noted that for coverage to apply the entity seeking insurance must maintain, operate or use the exploding MRI machine. Since they were nowhere near the machine, had nothing to do with it being decommissioned, they were not insured at the time of the explosion since it was in the control of the lessor who was working to decommission of the MRI.

(c) 2022 Barry Zalma & ClaimSchool, Inc.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe.Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome.

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