Facts

An orthopedic surgeon was sued after his patient's right leg had to be amputated at the knee the day after the surgeon had performed a total knee replacement. When the patient lost his pulse in the leg at approximately midnight, the surgeon did not come into the hospital, but spoke by telephone to his assistant and sent the assistant text messages with information to discuss with the hospital's emergency room doctor. The surgeon then spoke by telephone with the emergency physician. The emergency physician was occupied with trauma cases, and could not immediately attend to the patient and told the surgeon to come in. After some delay, the surgeon called his brother, a plastic surgeon, and asked him to go to the hospital. Ultimately, the leg had to be amputated at the knee. The surgeon claimed that he had been unable to come to the hospital because he had been driving to Los Angeles from San Diego in the middle of the night.

The patient sued the surgeon, his assistant, and Scripps Memorial Hospital in San Diego for malpractice. Fairway Physicians Risk Insurance Co. insured the surgeon and his assistant and appointed one lawyer to defend both.

After nine months, the assistant tended his defense to The Medical Protective Co. (MedPro), which appointed its own lawyer to defend the assistant. Fairway's appointed lawyer continued to defend the assistant as well, along with the surgeon.

The patient claimed that the surgeon was drinking in the nightclub after midnight instead of attending to his patient and had failed to designate a surgeon to attend to the patient.

The patient's lawyer finally obtained a redacted receipt from the nightclub showing it had been charged for something at 1:45 a.m. (around the time the emergency room doctor was trying to tend to the surgeon's patient), and threatened to seek punitive damages against the surgeon.

After the hospital settled for approximately $1.4 million, the patient submitted two CCP 998 settlement offers, one to the surgeon and one to the assistant, each for $250,000, and each providing that if one were accepted, the entire case would be dismissed.

Fairway, the insurer for the surgeon and his assistant settled the claim by accepting the CCP 998 offer for the assistant. Then it demanded equitable contribution from MedPro, the insurer for the assistant, for all of Fairway's defense fees and the settlement amount.

Fairway claimed that the CCP 998 offer had only been accepted for the assistant, and had been only because the assistant had been negligent. Fairway claimed that since MedPro insured the assistant, MedPro should pay all the fees and settlement or about $463,000.

MedPro declined to pay any of Fairway's fees, pointing out it had appointed defense counsel for the assistant and had been defending him and was ready to try the case. MedPro also claimed that the settlement was only for the surgeon's benefit and that Fairway's acceptance of the CCP 998 to the assistant was a ploy by Fairway to seek contribution. Since the surgeon was responsible for the amputation and was insured by Fairway, it alone was responsible for the settlement.

It was stipulated at this bench trial that the surgeon was under investigation by the California Medical Board and being sued for malpractice in another case at the time Fairway accepted the CCP 998 offer.

PLAINTIFF'S CONTENTIONS:
Fairway contended that the defense and settlement was due to the negligence of the surgeon's assistant, who was insured by Fairway along with the surgeon, but who was also insured by MedPro. The assistant allegedly failed to call the surgeon to the hospital before midnight when nurses' records show he was determined to have a "weak" pulse at 11 p.m.

Fairway defended the assistant and settled the case, and claimed it was entitled to contribution. Fairway contended that MedPro should equitably contribute the entire amount of the defense fees, about $170,000, and the entire settlement of $250,000.

DEFENDANT'S CONTENTIONS:
MedPro contended that Fairway was not entitled to its pre-tender fees of $140,000. It defended the surgeon and the assistant for nine months before the assistant tendered the defense to MedPro. MedPro claimed Fairway was not entitled to the pre-tender fees as a matter of law, since it provided no notice of the claim to MedPro before the tender. Nor was Fairway entitled to post-tender fees. MedPro had appointed its own lawyer for the assistant who was defending the assistant when Fairway decided on its own to settle the entire case. The entire $250,000 settlement was Fairway's sole obligation because Fairway settled to benefit its sole insured, the surgeon.

The patient had claimed that the surgeon had abandoned him to drink in the nightclub and not provided any other doctor to attend to him. The assistant was also faultless. Fairway's claim that the assistant had failed to call the surgeon about the patient's weak pulse before midnight was disproven by the hospital's "neurovascular extremity assessment report" showing that the patient had been listed as having a weak pulse since surgery and the doctor knew that.

Finally, Fairway had not proved that it had paid more than its "fair share" of the fees, costs, and expenses. Nor was equitable contribution appropriate since it was intended only as a remedy against a carrier that failed to defend its insured.

Settlement Discussions

MedPro refused to pay anything to Fairway and offered nothing to settle.

Damages

$170,000 (fees)

Result

Judgment for MedPro.

Other Information

FILING DATE: Aug. 4, 2010.