Med. Staff of Doctors Med. Ctr. in Modesto v. Kamil

Arbitration Clause/Insurance Contract

Med. Staff
of Doctors Med. Ctr. in Modesto v. Kamil, 2d Civil No. B179237 (Cal. Ct.
App. Sept. 8, 2005)

A hospital, its medical staff, and a physician group brought suit against
an insurance company for defamation. The insurance company responded by moving
to compel arbitration on the matter pursuant to an arbitration clause in an
insurance contract between the hospital and the insurance company. The California
Court of Appeal held that the matter was not covered by the insurance contract
because the contract provided for the hospital to provide medical care to the
insurance company’s beneficiaries and in no way touched on issues of defamation.
Furthermore, the court held that the medical staff was not bound by the insurance
contract because it was a separate legal entity from the hospital and did not
qualify as a third party beneficiary under the contract.