Schoch v. Lake Champlain OB-GYN, P.C.
Kim E. Schoch, a certified nurse midwife, was employed by Lake Champlain OB-GYN, P.C. and covered by a professional liability insurance policy from Medical Liability Mutual Insurance Company (MLMIC), with the employer paying all premiums. Following MLMIC's conversion to a stock insurance company, a cash consideration was to be distributed to eligible policyholders. Schoch, as the named insured, was deemed the policyholder, but Lake Champlain OB-GYN objected, claiming entitlement due to its premium payments, a claim upheld by the Supreme Court based on unjust enrichment. The Appellate Division reversed, ruling that Schoch, as the policyholder, was legally entitled to the consideration per statute and MLMIC's conversion plan. The court found that the demutualization proceeds were an unexpected windfall not explicitly covered by the employment agreement, and that Lake Champlain OB-GYN's unjust enrichment claim failed because Schoch's entitlement was based on law, not mistake or fraudulent conduct. Consequently, Schoch was declared solely entitled to the $74,747.03 cash consideration.