Patient Wins Doctor’s Case Against Insurance Company

This doctor got hit for an excess verdict in a medical malpractice case. He assigned the patient his bad faith claim against his insurer, alleging that it refused to settle the case within the policy limits and assigned him a lawyer with a conflict. The patient won compensatory and punitive damages. The case is Jurinko v. The Medical Protective Company, No. 03-CV-4053 (E.D. Pa. March 29, 2006).

The trial judge affirmed entry of judgment and issued the opinion including the following remarks:

“[Defendant] Medical Protective employee James Alff admitted that he knew that [the original defendant] Dr. Marcincin’s exposure was in excess of $50,000, and yet he never offered more than $50,000.9 The jury also heard testimony that the [excess] CAT/MCARE fund had informed Medical Protective that their failure to tender was in bad faith and was undermining the settlement of the case. Alff admitted that Dr. Marcincin could not negotiate with funds from his $1 million secondary line of coverage (the CAT/MCARE fund) without tender of the full policy limits. Alff also admitted to unfair gamesmanship in his negotiating tactics, and attempting to get the CAT/MCARE fund to cover Dr. Marcincin’s liability from Dr. Edelman’s line of coverage in order to save Medical Protective money. The evidence demonstrated that both Alff and Jacqueline Busterna, who was negotiating for the CAT/MCARE fund, believed the case would settle for around $1 million. From the evidence presented, it was also possible for the jury to conclude that the Jurinkos would have been offered approximately $1 million had Medical Protective tendered its policy, even if the CAT/MCARE fund had not offered any money from Dr. Marcincin’s $1 million line of secondary insurance. Overall, the Court finds sufficient evidence for the jury to find bad faith.

The jury also received sufficient evidence to find that Medical Protective acted in bad faith when it assigned Kilcoyne to defend both Dr. Marcincin and Dr. Edelman, thereby creating a conflict of interest that would affect and undermine Kilcoyne’s representation of Dr. Marcincin throughout the malpractice litigation. Alff testified that Medical Protective made this assignment fully aware that it was unethical and would create a conflict of interest, and that it did so to save money. There was also sufficient evidence for the jury to find that this bad faith action deprived Dr. Marcincin of his ability to vigorously assert his best defense (the liability of Dr. Edelman) and thereby caused the excess jury verdict against Dr. Marcincin alone in the underlying litigation.” [Footnotes omitted.]

On the issue of punitive damages:

“Third, the Court finds that the harm was the result of intentional conduct, and not mere accident. Alff testified that he knowingly appointed a single lawyer to represent Drs. Marcincin and Edelman, although hewas aware that this posed a conflict of interest, for the financial benefit of his employer. Alff also testified that he intentionally failed to tender Dr. Marcincin’s policy during settlement negotiations, because he wanted the CAT/MCARE fund to paymore from Dr. Edelman’s policy. He testified that he knew that such negotiating tactics were unfair, but engaged in them nevertheless, in an attempt to save his employer money. In other words, he was “intentionally stonewalling” during the negotiating process.”

A very interesting opinion, especially given the fact that our supreme court is looking at the issue of defining the tort of bad faith as we speak.