In a recent verdict announced on August 17, 2011, a Dallas County jury awarded a doctor $3.4 million against his malpractice insurer for unfair and deceptive insurance practices. Medicus Insurance Company was found to have wrongfully denied insurance coverage to Dr. Richard Torres after the doctor was sued by a former patient. Claims Journal reporter, Denise Johnson, covered the trial and reported on the pertinent facts.

According the evidence at trial, Dr. Torres had some limited involvement in the treatment of a patient that ultimately suffered permanent paralysis. In a prior suit, the paralyzed patient sued Dr. Torres and other healthcare providers for medical negligence or medical malpractice. After receiving those suit papers, Dr. Torres notified Medicus Insurance Company, his malpractice insurer, who in turn hired defense counsel to defend Dr. Torres. During that litigation, the paralyzed patient offered to settle with Dr. Torres in exchange for the limits of his malpractice insurance, which would have allowed the doctor to settle and receive a complete release agreement without the doctor having to pay any of the settlement from his personal assets. This offer from the paralyzed patient would have only required the insurance money. Medicus refused the offer and refused to try to negotiate at all.

In the underlying litigation, Dr. Torres was found to be 4% responsible for causing the paralyzed patient’s injuries and damages. This was the result of an October 2009 trial where the total verdict on damages was in excess of $22 million. After taking into account settlement credits, and after applying the draconian damages caps found in Texas law regarding medical negligence claims, the final judgment against Dr. Torres amounted to $754,291.94. Medicus did not cover the judgment against Dr. Torres, which led to Dr. Torres’ suit against Medicus and the $3.4 million verdict against Medicus for unfair and deceptive insurance practices. Not only did Medicus expose its insured (Dr. Torres) to an excess verdict that could have been avoided, but Medicus also refused to indemnify Dr. Torres for any of the verdict.