Doctor’s Reputation Considerations Don’t Trump Policy Language
A radiologist sued her professional liability insurer alleging bad faith when it settled an underlying medical malpractice suit without her consent. Following a trial that resulted in a $5 million verdict for the plaintiff, the defendant’s insurer opted to skip post-trial motions and an appeal, and settled the case for $3.75 million. This amount was just under the $4 million policy limit and released her from all liability. The physician objected based on damage to her reputation and potential job prospects. The trial court granted the professional liability insurer summary judgment on claims for negligence and breach of contract. The Massachusetts Appeals Court, applying New Hampshire law, held the insurer did not breach the implied covenant of good faith and fair dealing by settling over its insured’s objection. The express terms of the policy permitted the insurer to settle without the insured’s consent after a jury verdict or judgment establishing the insured’s liability regardless of the availability of further review.