Insurance Claim – Malpractice

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7^th Circuit Court of Appeals

Case Name: The Medical Protective Company of Fort Wayne, Indiana v. American International Specialty Lines Insurance Company

Case No.: 18-1737

Officials: FLAUM, MANION, and ST. EVE, Circuit Judges.

Focus: Insurance Claim – Malpractice

In 2002, thirty-six-year-old Vicki Bramlett died from complications following routine surgery. Mrs. Bramlett’s family sued Dr. Benny Phillips, her treating physician. Dr. Phillips’s malpractice insurer, the Medical Protective Company of Fort Wayne, Indiana (“MedPro”), twice refused to settle the case for $200,000, Dr. Phillips’s insurance policy limit. At trial, a jury awarded a $14 million verdict against Dr. Phillips and other defendants. The Supreme Court of Texas later capped Dr. Phillips’s liability, and Mrs. Bramlett’s family sued MedPro for the excess verdict. MedPro eventually settled with the family.

MedPro was insured by American International Specialty Lines Insurance Company, now known as AIG Specialty Insurance Company (“AISLIC”), for claims made against it. AISLIC declined to cover MedPro’s settlement with Mrs. Bramlett’s family. When MedPro sued, the parties ultimately cross-moved for summary judgment. The district court granted summary judgment for AISLIC, concluding that coverage was excluded under the AISLIC policy because MedPro should have foreseen the Bramlett family’s claim before contracting with AISLIC. Because there is a genuine issue of material fact regarding whether MedPro should have settled with the Bramletts for $200,000, we affirm in part and reverse in part.

Affirmed

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Derek A Hawkins is trademark corporate counsel for Harley-Davidson. Derek oversees the prosecution and maintenance of the Harley-Davidson’s international trademark portfolio in emerging markets.