Massachusetts Appeals Court Affirms Post-Trial Settlement Decision for Multi-Million Medical Malpractice Verdict

It is vital to have aggressive, knowledgable Massachusetts personal injury counsel at your side after an accident. To obtain the damages you deserve, an attorney has to remain vigilant from the beginning of the lawsuit, throughout the discovery process, during trial, and even after a successful verdict. A recent medical malpractice case from the Commonwealth’s Appeals Court illustrates the need for assertive attorneys at your side for every part of the litigation process.

The injured patient in this lawsuit won a multi-million dollar verdict in a medical malpractice case against her physician, who failed to timely diagnose her stroke. The jury awarded $5 million, which was reduced to $4.05 million, since a co-defendant had previously provided a $950,000 settlement payment. Following the trial, the physician’s malpractice insurer chose to forgo post-trial motions and an appeal, settling the case for $3.75 million.

This amount was under the $4 million coverage limit of the policy, thus releasing the doctor from personal liability. However, the doctor was unsatisfied. The doctor claimed the insurer acted in bad faith when it settled without her permission. If the insurer had appealed the verdict, the injured person might not have been paid.

In the bad faith case between the doctor and her insurer, the trial court granted the insurer’s motion for summary judgment on the negligence and breach of contract claims. Even though the settlement released her from being personally responsible, the doctor claimed it hurt her professional reputation and future job prospects, and it caused emotional distress. The physician argued the insurer did not have an absolute right to settle the post-verdict claim. The trial judge disagreed, ruling misconduct by an insurer only occurs if the insurer exposes the doctor to personal liability. If the insurer agreed to a settlement without the doctor’s consent that was over the policy limits, resulting in the doctor’s financial liability, a question of misconduct would be present. However, in this case, the settlement eliminated the physician’s liability, which then eliminated a claim against the insurer for a breach of its duty to negotiate in good faith and fair dealing.

Insurers do step in to handle lawsuits on behalf of their insureds and are bound by law to offer settlements in good faith and fair dealing. The appellate court pointed out that the duty does not require an insurance company to pursue an appeal for an excessive verdict while leaving a settlement within policy limits on the table. The case law cited by the physician all involved cases by insureds who were exposed to personal financial liability as a result of the insurance company’s settlement. The summary judgment against the physician was upheld.

Defendants will use all available tools to limit or remove their obligation to pay monetary damages. Negotiations and settlement offers are usually handled prior to a lawsuit, but they can occur after a successful verdict for the injured person, as seen in the case above. Any party can appeal an outcome, which can potentially delay payments that the injured person needs. To avoid the waiting period an appeal would generate, parties often negotiate a post-trial settlement in relation to the verdict awarded that provides immediate funds to the injured person while removing a large portion of financial liability for the defendant.

The Massachusetts personal injury attorneys at the Law Office of James K. Meehan have many years of combined litigation experience that they can use to assist you with your claim. Our lawyers and staff understand the tactics employed by insurance companies and defendants to delay or minimize payment, and we will aggressively pursue all available avenues of legal relief. We know the financial strain a serious injury can cause and are here to help.  For a free, confidential consultation, call our office today at 508.822.6600.

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