On November 10, 2015, an Illinois jury determined that Illinois’ largest medical malpractice insurance company, ISMIE Mutual Insurance Company (“ISMIE”), is liable to the plaintiffs in the amount of $1.35 million in compensatory damages and $13 million in punitive damages for its alleged bad faith in failing to settle a medical malpractice claim the plaintiffs had filed against two Illinois obstetricians (ISMIE insureds) who were named as defendants in their earlier Illinois birth injury medical malpractice case that resulted in a medical malpractice jury verdict against the two obstetricians in the amount of $6.17 million.
The plaintiffs alleged in their bad faith failure to settle medical malpractice case that ISMIE could have, and should have, settled the underlying medical malpractice claims against the defendant obstetricians for $5 million (the obstetricians had purchased medical malpractice insurance coverage through ISMIE with total policy limits applicable to the medical malpractice plaintiffs’ claims in the amount of $5 million).
The Underlying Medical Malpractice Case
The medical malpractice plaintiffs were the parents of a baby born in 2004 with a severe brain injury, allegedly due to medical negligence at birth that caused deprivation of oxygen to her brain and resulted in the child’s death three years later.
The medical malpractice plaintiffs filed their Illinois medical malpractice case against the two defendant obstetricians, emergency room physicians, and the hospital where the birth injury occurred. All of the medical malpractice defendants, except the two obstetricians, settled with the medical malpractice plaintiffs for a total of $1.5 million.
An Illinois medical malpractice jury subsequently returned its verdict in favor of the plaintiffs in the amount of $6.17 million, in 2009. ISMIE paid $3.3 million on behalf of the defendant obstetricians to the medical malpractice plaintiffs, which left a shortfall in the amount of $1.3 million. The obstetricians assigned their bad faith claim against ISMIE to the medical malpractice plaintiffs after the medical malpractice verdict was rendered against them.
The Bad Faith Claim
The plaintiffs alleged in their bad faith failure to settle lawsuit that ISMIE owed a duty to the obstetricians to protect their financial interests with regard to the underlying medical malpractice claims against them but failed to do so, that ISMIE misled their insureds with regard to the amount of insurance coverage applicable to the medical malpractice plaintiffs’ claims, and that ISMIE concealed from their insureds a settlement offer from the plaintiffs that would have limited their financial exposure.
The bad faith jury took less than one hour after a trial lasting one week before returning its verdict against ISMIE.
It has been reported that ISMIE has been involved in 25 bad faith failure to settle claims over the past ten years.
If you or a loved one were harmed due to a birth injury that may have resulted from medical negligence in Illinois or in another U.S. state, you should promptly consult with an Illinois birth injury medical malpractice attorney, or a birth injury malpractice attorney in your state, who may investigate your birth injury medical malpractice claim for you and represent you in a birth injury case, if appropriate.
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