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Insurer denies legal coverage to 1-800-GET-THIN advertiser

National Fire & Marine Insurance is refusing to pay to defend the company marketing Lap-Band surgeries and two of its affiliates in a false-advertising lawsuit, according to a case filed by the companies against the insurer.

June 11, 2011|By Stuart Pfeifer, Los Angeles Times
  • Marketing company 1-800-GET-THIN has promoted Lap-Band surgery for more than a year in Southern California. Above, billboards in 2010.
Marketing company 1-800-GET-THIN has promoted Lap-Band surgery for more… (Glenn Koenig, Los Angeles…)

Companies affiliated with the 1-800-GET-THIN advertising campaign are having trouble getting an insurer to cover their legal expenses in Lap-Band related litigation, according to a recent lawsuit.

National Fire & Marine Insurance Co. has refused to pay to defend 1-800-GET-THIN and two affiliated companies, Top Surgeons and Beverly Hills Surgery Center, in a false-advertising case, according to a lawsuit that the companies filed against the insurer.

The false-advertising case, which seeks class-action status, was brought by relatives of two Southern California women who died within days of undergoing Lap-Band surgeries at clinics linked to the 1-800-GET-THIN marketing effort. Robert Silverman, an attorney who represents 1-800-GET-THIN, previously said the lawsuit is without merit.

The 1-800-GET-THIN lawsuit says that National Fire & Marine denied coverage March 18 after suggesting that the companies falsely stated in an application that no affiliated physician had been "restricted, suspended or revoked within the last five years."

In addition to denying coverage for the false-advertising lawsuit, the insurer has said it may decline to pay legal bills to defend some of the companies in two pending medical malpractice cases, court records show.

Edward Susolik, who filed the insurance lawsuit on behalf of 1-800-GET-THIN and its affiliates, said the case is a "routine, run-of-the-mill coverage lawsuit."

"I've got meritless lawsuits filed against my client and I'm entitled to insurance coverage for those," he said.

The weight-loss companies' lawsuit, filed May 25 in Orange County Superior Court, did not identify any physicians singled out by National Fire & Marine as having disciplinary records. Officials with National Fire & Marine did not return telephone calls from The Times seeking comment.

At least five physicians currently or formerly affiliated with some of the companies suing the insurer have been disciplined by the Medical Board of California, according to medical board records.

They include Dr. Michael Omidi, who was chief of staff at Beverly Hills Surgery Center, according to the false-advertising lawsuit. In 2008, the medical board revoked Omidi's license but stayed the action and placed him on probation for three years after he acknowledged that he violated state law by performing liposuction surgeries on three patients at an unaccredited surgical facility, according to medical board records.

Omidi did not respond to a request for comment. Omidi has sued the Los Angeles Times over its reporting on the disciplinary action taken against him by the California Medical Board. The Times' motion to dismiss his complaint is scheduled to be heard later this month.

The lawsuit that 1-800-GET-THIN and its affiliates filed against National Fire & Marine said that the insurer had indicated it was permissible to answer "no" to the question about whether a physician had been disciplined "if the physician was merely placed on probation."

National Fire & Marine informed the weight-loss companies in a May 3 letter that its case for rescinding the policy was so strong that it would be in their best interests to accept a refund and have their liability coverage terminated, the companies' lawsuit said.

The policy cost $116,000, according to a copy of the policy filed along with the lawsuit.

California courts tend to favor policyholders in disputes with insurance companies, said Martin S. Checov, an attorney with O'Melveny & Myers in San Francisco who has practiced insurance law for 30 years. He said carriers typically are cautious about yanking coverage in California.

"I've seen very few examples of insurance companies rescinding where it wasn't the case of a policyholder being caught red-handed in a lie," Checov said. "Sometimes insurance companies are too aggressive, but that doesn't pay in California."

The Lap-Band, manufactured by Irvine-based Allergan Inc., is an inflatable silicone device that is surgically implanted around the stomach to discourage overeating. The surgeries have been promoted on freeway billboards, radio and television for more than one year in Southern California by 1-800-GET-THIN, a marketing company not affiliated with Allergan that refers eligible patients to clinics at which the surgeries are performed.

In 15 months, the advertising led to more than 100,000 telephone calls from potential patients and more than 10,000 scheduled surgeries, the marketing company said in a lawsuit it filed against the attorney who filed the false-advertising case.

Since 2009, four Southern California patients have died within days after undergoing surgeries at centers affiliated with the 1-800-GET-THIN ads, according to lawsuits, interviews with surviving family members and autopsy reports.

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