Connecticut Supreme Court: ‘High-Low’ Agreements Must Be Revealed

Lawyers for a Connecticut psychiatrist who was sued for malpractice in the death of a 17-year-old girl should have revealed to her doctor co-defendant a secret settlement with a payout that hinged on the outcome of the trial, the state’s Supreme Court has ruled.

The case centered on the death of 17-year-old Audrey Monti of Ellington, who collapsed outside the office door of her psychiatrist, Naomi E. Wenkert, one day after being discharged from the intensive care unit of a local hospital. Despite Monti’s having bluish lips when she recovered — a sign of a lack of oxygen — Wenkert wrongly diagnosed the girl as having a psychological reaction to having been in the intensive care unit and prescribed her a sedative, Ativan. Monti died later that night, Nov. 21, 1996, from what medical officials ultimately concluded was a respiratory viral infection that went undiscovered by her doctor, Mark J. Decker.

Monti’s parents sued Decker and Wenkert, and in 2005 the case went to trial.

In the midst of the trial, unbeknownst to the court and her co-defendant, Wenkert secretly entered into a so-called “high-low” agreement with Monti’s parents. The agreement was essentially a verdict-contingent settlement that would pay the parents a minimum of $300,000 or a maximum of $1 million, depending on the outcome of the trial.

The agreement acknowledged that Wenkert’s liability insurer was in liquidation, and that a Pennsylvania court had barred it from paying any claims. The agreement relinquished personal claims against Wenkert and the plaintiffs agreed they would ultimately recover the sum from a reinsurer — if Wenkert could find one — or the Connecticut Guaranty Fund.

The high-low agreement differs from a so-called “Mary Carter” agreement — a secret contract by which a defendant in a multi-party case secretly aligns himself with the plaintiff and works to reduce his own liability in a case by increasing the liability of his co-defendants.

Monti’s parents eventually won the case against Wenkert and Decker, who was ordered to pay a total of $1.75 million to the plaintiffs. It was at that point that the existence of the high-low settlement with Wenkert was revealed.

Decker appealed to the Supreme Court, alleging among other things, that the existence of the agreement hindered his defense by depriving him of the chance to challenge some evidence at the trial and impeach Wenkert’s expert witness.

The Supreme Court upheld the verdict of the trial court. However, it also concluded that the agreement should have been revealed to Decker, but ultimately that non-disclosure did not affect the outcome of the trial.

As a result, the court has adopted a new rule for the state: All verdict contingent settlement — such as high-low agreements — must now be promptly disclosed to the court and any non-settling defendants.