Ashley Renteria, Tammy Renteria and Vincent Renteria v. NorCal Mutual Insurance Company
Published: May 22, 1999 | Result Date: Oct. 20, 1998 | Filing Date: Jan. 1, 1900 |Case number: - Arbitration – $1,883,210
Arbitrator
Court
Case Not Filed
Attorneys
Claimant
Defendant
Respondent
Experts
Claimant
Jack Mumme
(technical)
Respondent
Daniel A. Saunders
(Kasowitz Benson Torres LLP)
(technical)
Facts
In August 1996, claimants sued Dr. Paul Buzad and defendant hospital for medical malpractice after the infant claimant Ashley Renteria suffered brain damage during delivery on Oct. 2, 1995. The Renterias claimed Dr. Buzad and defendant hospital failed to properly assess and react to exhibited signs of fetal compromise during labor and delivery, including the misreading of fetal heart monitor strips. Dr. Buzad was insured by NorCal Mutual Insurance Company with policy limits of $1 million. On June 9, 1997, claimants made a C.C.P. º998 $1 million policy limits demand against Dr. Buzad which expired as a matter of law on July 14, 1997. At the time of claimants' settlement demand, NorCal had the opinions of three board certified obstetricians, Dr. Steven Rabin, Dr. Gene Parks and Dr. Roger Freeman, indicating that Dr. Buzad's care for Ashley during delivery fell below the standard of care. In addition, prior to the expiration of the settlement demand, NorCal had the causation opinions of Dr. Roger Freeman and Dr. Harriet Cokely indicating that Dr. Buzad's failure to comply with the standard of care in not delivering Ashley earlier was probably the cause of Ashley's damages which included quadriplegia, microcephaly, cerebral palsy and developmental delays. As of June 1997, NorCal, through its counsel, Tom McAndrews, of Reback, Hulbert, McAndrews & Kjar, had hired damage experts, Gene Bruno and Theodore Vavoulis who had not yet completed their evaluations. NorCal did not have a company policy setting forth procedures to follow when receiving a demand from a claimant. After claimants' settlement demand was received, defense counsel wrote a letter to plaintiff's counsel indicating the offer was premature. Immediatatey after receiving the demand, NorCal decided to place the case on calendar for a Claims Management Committee to be held in September 1997. NorCal's claim handling policy is to not request the consent of a defendant doctor unless NorCal wishes to settle. NorCal did not request Dr. Buzad's consent to settle after receiving the June 9, 1997 settlement demand made by claimants. An independent medical examination was requested after the demand expired and was conducted by Dr. Harriet Cokely in August 1997. In September 1997, NorCal's Claims Management Committee met and authorized settlement of the case up to the $1 million policy limits. After authority to settle was obtained, Dr. Buzad's consent to settle was requested and received. NorCal first offered the policy limits after a voluntary settlement conference in November 1997 at which time claimants refused the policy limits offer. Trial was set for December 1997. In early December, co-defendant hospital settled for $1.75 million. On the eve of trial, NorCal, on behalf of Dr. Buzad agreed to pay the policy limits of $1 million and agreed to a stipulated judgment of $4.5 million against Dr. Buzad. The judgment was reduced by the $1 million paid by NorCal and $1.75 million paid by defendant hospital leaving an unsatisfied judgment of $1.75 million. Claimants agreed not to execute personally against Dr. Buzad and instead agreed to arbitrate with NorCal the issue whether NorCal breached the covenant of good faith and fair dealing it owed Dr. Buzad by failing to accept the June 9, 1997 settlement offer. Dr. Buzad assigned his right against NorCal to claimants. The claimants brought this action claiming respondents breach the covenant of good faith and fair dealing, which respondents owed Dr. Buzad by virtue of the insurance contract. The insurance contract between Dr. Buzad and NorCal required arbitration of all disputes.
Settlement Discussions
The claimants requested $1.5 million to settle the case short of arbitration. The respondents offered $1 million.
Other Information
The award was reached approximately nine months after the request for arbitration was made. The respondents filed a motion to correct the award, contending the arbitrators erred in awarding any interest on the judgment. That motion was denied by Hon. Soussan Bruguera on Jan. 11, 1999. The judgment with interest has been paid.
Length
two days
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