QUESTION OF FACT WHETHER INSURERS FAILED TO SETTLE A MULTI-MILLION DOLLAR MEDICAL MALPRACTICE ACTION IN BAD FAITH, SUPREME COURT REVERSED (THIRD DEPT).
The Third Department, reversing Supreme Court, over a concurrence, determined there was a question of fact whether the insurers failed to settle a multi-million dollar medical malpractice claim in bad faith. The facts are interesting but too detailed to fairly summarize here:
To establish bad faith in failing to settle a liability claim, the insured must show that “the insurer’s conduct constituted a ‘gross disregard’ of the insured’s interests — that is, a deliberate or reckless failure to place on equal footing the interests of its insured with its own interests when considering a settlement offer”… . Stated otherwise, the “plaintiff must establish that the defendant insurer engaged in a pattern of behavior evincing a conscious or knowing indifference to the probability than an insured would be held personally accountable for a large judgment if a settlement offer within the policy limits were not accepted” … . It must be shown that “the insured lost an actual opportunity to settle the claim at a time when all serious doubts about the insured’s liability were removed” … . …[I]t is necessary to consider all the facts and circumstances in gauging whether an insurer acted in bad faith in addressing settlement. Key factors include the plaintiff’s likelihood of success, the potential magnitude of a verdict and the corresponding financial burden on the insured and the information available to the insurer at the time the settlement demand was made … . In reviewing these factors in the procedural context of a motion for summary judgment, we review the evidence in a light most favorable to the nonmoving party … . * * *
It was clear from the inception of this case that if a jury held [the doctor] accountable, the verdict would exceed the total coverage — and that, indeed, was the [plaintiffs’] settlement position throughout. As such, it was incumbent upon [the insurers] to be fully engaged and attentive to the case, particularly after the jury highlighted question No. 6 (re: cost of future care) on the verdict sheet. To suggest that there was not enough time to respond is unpersuasive. This was crunch time, the stakes were unquestionably high and [the insurers] had a contractual responsibility to fulfill. Healthcare Professionals Ins. Co. v Parentis, 2018 NY Slip Op 07224, Third Dept 10-25-18
INSURANCE LAW (QUESTION OF FACT WHETHER INSURERS FAILED TO SETTLE A MULTI-MILLION DOLLAR MEDICAL MALPRACTICE ACTION IN BAD FAITH, SUPREME COURT REVERSED (THIRD DEPT))/BAD FAITH (INSURANCE LAW, QUESTION OF FACT WHETHER INSURERS FAILED TO SETTLE A MULTI-MILLION DOLLAR MEDICAL MALPRACTICE ACTION IN BAD FAITH, SUPREME COURT REVERSED (THIRD DEPT))/SETTLEMENTS (INSURANCE LAW, BAD FAITH, QUESTION OF FACT WHETHER INSURERS FAILED TO SETTLE A MULTI-MILLION DOLLAR MEDICAL MALPRACTICE ACTION IN BAD FAITH, SUPREME COURT REVERSED (THIRD DEPT))