Attorney General slapped on the wrist for defying court order not to represent JUA

CONCORD — The Complaint Screening Committee, a branch of the attorney discipline system under the aegis of the New Hampshire Supreme Court, last week slapped Attorney General Michael Delaney and Associate Attorney General Anne Edwards on their respective wrists for ignoring an order of Belknap County Superior Court in the New Hampshire Medical Malpractice Joint Underwriting Association (JUA) case.

Contrary to the court's order, the attorney general's office continued to represent two opposing parties in the prolonged litigation over the disposition of $110-million in surplus funds accumulated by the JUA. Although the committee found no professional misconduct, it reminded the pair of their obligation to comply with court orders.

In 2009, when policyholders of the JUA, including LRGHealthcare, challenged the state's claim to the funds , they also sought to disqualify the Attorney General from representing both the state and the JUA. They argued that the interest of the state in transferring the JUA's surplus to the general fund was at odds with the fiduciary duty of the JUA's board of directors to its policyholders. Moreover, the policyholders told the court that since the attorney general's office was one of the architects of the scheme to transfer the funds and provided a legal opinion justifying the maneuver, for it to represent both the state, in the form of the Insurance Department, and the JUA would be "an irreconcilable conflict of interest."

The attorney general countered that the JUA is an agency of state government, created and supervised by the insurance commissioner by authority granted in statute and described its board of directors and administrator as officials of the Insurance Department.

Justice Kathleen McGuire ruled for the policyholders, first that by finding that the JUA is not a part of state government and second by disqualifying the attorney general's office from representing the JUA. A week later McGuire denied the state's claim to the surplus funds.

The state appealed McGuire's decision rejecting its claim to the money, but her rulings on the status of the JUA or the disqualification of the attorney general's office. After the New Hampshire Supreme Court upheld McGuire's order, attorneys for the policyholders approached the JUA about the disposition of the surplus funds. Edwards replied, explaining that she was writing "responding on behalf of our clients, (Insurance) Commissioner (Roger) Sevigny and the JUA board."

With that the policyholders, in the names of Georgia Tuttle, a dermatologist of Lebanon, and lead plaintiff in the litigation, Henry Lipman senior vice-president and Chief Financial Officer of LRGHealthcare and Thomas Buchanan of the Derry Medical Center, filed a grievance with the Judicial Conduct Committee.

The complaint screening committee found no professional misconduct on the part of Delaney or Edwards. But, the committee noted that the order of the Superior Court, which the state did not appeal. The two, the committee, wrote "have been warned that in the future, if they have received such an Order from a Court, they are required to cease giving legal advice or directives to a party that is the subject of that Order, in that or any related matter."