$3.4M Jury Verdict in Texas Case Against Medical Malpractice Insurer

A doctor was awarded $3.4 million after jurors found that a Texas-based medical malpractice insurer committed unfair and deceptive practices when it wrongly denied insurance coverage after the doctor was sued by a former patient.

In the verdict, issued Aug. 17, 2011, a Dallas County jury found that Medicus Insurance Company misrepresented the quality and standards of its indemnification practices.

Dr. Richard Torres was the treating physician of Thomas Colombrito for a sixteen hour period in January 2008. Torres, who was covering for the patient’s attending physician, testified that his only involvement consisted of two phone calls regarding the patient’s care during an overnight hospital shift. He testified he was unaware that Colombrito suffered permanent paralysis.

Medicus argued that Torres should have notified the company about the possibility of a lawsuit.

Due to continued complications as a result of the permanent paralysis, Colombrito filed a medical malpractice lawsuit against Dr. Torres, the hospital and two other doctors.

Upon receipt of the lawsuit Torres notified Medicus which hired defense counsel to defend Torres. Despite receiving a Stowers demand in early 2009, Medicus refused to negotiate because it could not indemnify Torres for any damages pursuant to its policy. During a later mediation and trial, Medicus maintained its stance, refusing to offer any settlement monies.

The October 2009 trial resulted in a verdict in excess of $22,500,000. The jury found that Torres was negligent and responsible for 4 percent of Colombrito’s damages. In January 2010, a final verdict was issued, taking into consideration the settlement credit and other applicable caps under Texas law, judgment was entered against Torres in the amount of $754,291.94.

“The doctor’s practice group had purchased a Medicus ‘claims-made’ policy, meaning that a malpractice claim made during the policy period would be covered by Medicus,” says Stephen Barnes, a lawyer with McGehee, Chang, Barnes who is also a doctor. “Our physicians need insurance companies to keep their word.”

In its amended answer, Medicus argued the claims were not within the scope of risks insured by the insuring agreement in that Torres “should have known or reasonably foreseen that the professional services would result in a claim or potentially compensable event.”

The case is Colombrito v Medicus Insurance Company, No. DC-10-02691. The verdict was issued in the 14th District Court in Dallas County.

Mike Huddleston, attorney for Medicus, a partner with Shannon, Gracey, Ratliff & Miller, LLP declined to comment on the case.