In the limit of zero capillary pressure, solutions to the equations governing three-phase flow, obtained using common empirical relative permeability models, exhibit complex wavespeeds for certain saturation values (elliptic regions) that result in unstable and non-unique solutions. We analyze a simple but physically realizable pore-scale model: a bundle of cylindrical capillary tubes, to investigate whether the presence of these elliptic regions is an artifact of using unphysical relative permeabilities. Without gravity, the model does not yield elliptic regions unless the most non-wetting phase is the most viscous and the most wetting phase is the least viscous. With gravity, the model yields elliptic regions for any combination of viscosities, and these regions occupy a significant fraction of the saturation space. We then present converged, stable numerical solutions for one-dimensional flow, which include capillary pressure. These demonstrate that, even when capillary forces are small relative to viscous forces, they have a significant effect on solutions which cross or enter the elliptic region. We conclude that elliptic regions can occur for a physically realizable model of a porous medium, and that capillary pressure should be included explicitly in three-phase numerical simulators to obtain stable, physically meaningful solutions which reproduce the correct sequence of saturation changes.