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Breach of Contract
Insurance Bad Faith
Fraud and Negligent Misrepresentation

Robert Mosier, Interim Bankruptcy Trustee for the Estate of Neil Jouvenat, M.D., v. S.C.P.I.E.

Published: Aug. 27, 1994 | Result Date: Aug. 11, 1994 | Filing Date: Jan. 1, 1900 |

Case number: BC059047 –  $65,000,000

Judge

Aurelio N. Muñoz

Court

L.A. Superior Central


Attorneys

Plaintiff

Bruce G. Fagel
(Law Offices of Bruce G. Fagel & Associates)


Defendant

Graham E. Berry

Robert K. Wrede
(Offices of Robert K. Wrede)


Experts

Plaintiff

John H. Menkes
(medical)

Erwin Chemerinsky
(UC Berkeley School of Law) (technical)

Stephen D. Prater
(technical)

Andrew J. Moosa
(medical)

Defendant

Joseph E. Thielen
(technical)

Joanne Hodgman
(medical)

Perry R. Lubens M.D.
(medical)

Ian Ross Donald
(medical)

Facts

Plaintiff Robert Mosier is the Bankruptcy Trustee for Neil Jouvenat, M.D., who filed for bankruptcy in September 1991 following a judgment entered against him in the approximate amount of $9,800,000 in the case of Hughes v. PVCH, et al. which was tried to a jury verdict of $19,800,000 (present value) in July 1991. The judgment against Dr. Jouvenat was based on a jury finding of 70% comparative fault, after offsets for earlier settlements. The jury found 30% fault against Dr. Andrew Hsu and Dr. Yu Shend Wu, who were insured by the Southern California Physicians Insurance Exchange (SCPIE). Dr. Hsu and Dr. Wu, through SCPIE, settled their liability after the verdict and before the judgment was entered against Dr. Jouvenat. The Bankruptcy Trustee then filed this action in July 1992 for fraud and conspiracy based on the actions of SCPIE involved in providing an attorney for Dr. Jouvenat just prior to the trial in the underlying case. Dr. Jouvenat, although previously insured by SCPIE, was not covered for this claim, and SCPIE consistently maintained that they owed Dr. Jouvenat no duty to defend or indemnify. Judge Munoz ruled that there was no insurance contract between SCPIE and Dr. Jouvenat, but allowed the case to proceed on the fraud and conspiracy allegations. The underlying case involved a child (Ashley Hughes) who was delivered by Dr. Jouvenat on March 31, 1987, by forceps. The baby was taken to the NICU with paralysis below the neck Dr. Hsu and Dr. Wu were neonatologists who treated the baby for asphyxia, but failed to consider or diagnose a spinal cord injury. Later, after a neurology consult, they told the family that the child had a congenital neuromuscular disease and would probably die within a year. Six weeks after delivery, a CT scan of the neck demonstrated partial atrophy of the spinal cord. The baby spent the first 2 1/2 years in various hospitals before going home with 24-hour nursing care as a ventilator-dependent quadriplegic.

Settlement Discussions

Plaintiff contends that their demand was $10,000,000 at the close of evidence and Defendant offered $250,000 on the day before trial, then withdrawn at trial.

Damages

Bankruptcy which included $9,800,000 judgment plus approximately $400,000 in other liabilities. Plaintiff's attorney asked the jury for $69,000,000 in punitive damages (10% of the gross assets).

Other Information

Cross-defendant attorney previously settled with Plaintiff for $70,000.

Deliberation

3 days, 3 hours

Poll

Varied

Length

8 weeks


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