Tennessee Doc Pleads Guilty Then Sues Insurer After Clinic Burns Down

A Tennessee doctor who pleaded guilty to running a pill mill has now filed suit against his property insurance carrier for failing to pay after a suspicious fire destroyed his clinic.

Dr. David Bruce Coffey of Oneida, in northeast Tennessee, struck an agreement with federal prosecutors last fall, pleading guilty to illegally distributing oxycodone pills and money laundering, according to a local news report and his plea agreement. He is awaiting sentencing.

In 2019, U.S. Drug Enforcement Agency investigators charged that Coffey was at the center of an illegal operation that had distributed almost 5 million of the addictive pills. Then, in January 2020, the Oneida clinic burned to the ground, shortly after the federal charges were made public. The fire is still under investigation and officials have said it is suspicious in nature.

Coffey had a $2.8 million policy on the property with Grange Insurance, court records show. Grange declined to pay, citing fraud and dishonesty provisions in the policy. The carrier also declined to pay on a business-interruption policy on a second clinic that Coffey said lost patients during the COVID-19 shutdown.

Now, Coffey, who could soon face up to 20 years in prison, is suing Grange for breach of contract. The physician is asking for $3.4 million in damages, plus a bad-faith penalty. Grange has refuted the claims.

Topics Lawsuits Carriers Tennessee