Massachusetts Appellate Court Reviews Radiologist’s Dispute with Liability Insurer Following Insurer’s Post-Verdict Settlement with Injured Patient

In most Cape Cod medical malpractice lawsuits, the defendant health care provider has a policy of professional negligence liability coverage in place to protect his or her personal assets in the event of a judgment against him or her. Typically, the medical professional is only personally liable to the extent that a judgment is awarded by a jury in excess of the policy limits.

A recent case raised the issue of whether a medical malpractice insurance company must obtain permission from its insured before settling a claim within the policy limits.

Facts of the Case

In an unreported case from the Commonwealth of Massachusetts Appeals Court, the plaintiff was a radiologist who appealed a lower court’s summary judgment in favor of the defendant, who was the plaintiff’s professional liability insurance company. The plaintiff’s lawsuit had alleged that the defendant acted in bad faith when it settled a medical malpractice case that had been filed against her.

According to the appellate court’s opinion, the underlying malpractice action had resulted in a $5 million verdict in favor of a patient who had alleged that the radiologist had failed to diagnose a stroke. The defendant insurance company allegedly settled the case for $3.75 million – despite the radiologist’s objection – in order to avoid an appeal. Since the radiologist’s liability insurance limit was $4 million, the insurance company’s settlement of the case left her owing no additional money to her former patient.

The trial court granted summary judgment in favor of the insurance company on the two counts of the radiologist’s complaint alleging claims for negligence and breach of contract. The radiologist appealed.

What the Higher Court Decided

The appellate court affirmed. The court first noted that the gravamen of the radiologist’s complaint was that, although the settlement at issue was to her financial advantage in that it released her from liability for the amount of the jury’s verdict that was in excess of her liability coverage, the radiologist nevertheless claimed that the settlement harmed her professional reputation and future career prospects, as well as caused her emotional distress.

According to the court, the insurance company’s duties of good faith and fair dealing did not require it to pursue an appeal of the verdict under the circumstances. (Had the insurance company’s actions exposed the radiologist to personal liability, the court noted that, potentially, the outcome of the case could have been different.)

Have You Been Hurt by an Act of Medical Malpractice?

Those who have been injured due to the negligence of a medical provider, such as a doctor, nurse, or radiologist, may be able to collect substantial money damages if they are able to prove that the defendant violated the applicable standard of care and that they were injured as a proximate result. To contact a helpful Cape Cod medical malpractice attorney who can help you determine whether you have a case, call the Law Offices of John C. Manoog, III, at 888-262-6664. We will be happy to schedule an appointment so that you can come in and discuss the details of your claim. Nos falamos Portugues!

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