As we discussed in yesterday’s blog posting, an Iowa birth injury medical malpractice jury’s record-setting $97 million verdict against an Iowa medical clinic has led to the filing of two, competing lawsuits against the clinic’s medical malpractice insurer, MMIC. One of the bad faith lawsuits was filed on behalf of the Plaintiffs in the underlying Iowa medical malpractice birth injury case (the Plaintiffs are still owed $65 million from the judgment), and the other was filed by an attorney representing the defendant medical clinic, which was forced to file for bankruptcy after the judgment was entered against it.
In July 2023, sheriff’s deputies were directed pursuant to court filings to take legal possession of the clinic’s potential causes of action against MMIC, which allegedly resulted in the birth injury judgment Plaintiffs/creditors having the right to pursue bad faith claims against MMIC arising from its dealings with the clinic: “(We will) intervene in the (clinic’s) case and have the issues/cases consolidated for the judge to rule who is prosecuting the cause of the action, which we believe will be ruled on in our favor.”
The clinic’s bad faith lawsuit filed against MMIC, one week earlier, includes bad faith claims not only on behalf of the clinic but also on behalf of three physician-owners of the clinic. An attorney for the clinic’s bad faith action believes that the claims by the physician-owners are not owned by the other Plaintiffs, and therefore the plaintiffs in both bad faith lawsuits will need to cooperate with each other in their bad faith claims against MMIC: “The practical effect is that the (clinic) and the Kromphardt estate will have to work jointly to prosecute the case against MMIC under the law.”
In addition to suing MMIC, the clinic’s lawsuit also alleges legal malpractice claims against Shuttleworth & Ingersoll, the law firm that defended the clinic during the birth injury medical malpractice trial. Shuttleworth & Ingersoll subsequently withdrew from that case over the resulting conflict of interest (two weeks before the clinic’s appeal was to be argued before the Iowa Supreme Court).
The clinic’s lawyer sought and obtained a 60-day stay in the Iowa Supreme Court, after which MMIC challenged the stay, arguing that the clinic had no right to postpone the case, conduct settlement negotiations, or do anything else about the case because the clinic’s insurance policy gives MMIC the full right to control its legal defense: “MMIC believes in the propriety of Dr. (Jill) Goodman’s care and has merely sought to have her conduct reviewed by this court. It is telling that attorney Rowley is set on avoiding such review.”
MMIC filed an action in federal court in June 2023, after the clinic’s lawyer was first hired by the clinic and began threatening to negotiate a settlement, seeking an order that MMIC had the exclusive right to manage the clinic’s legal defense, and that if the clinic were to dismiss or otherwise interfere with the appeal, it would void its malpractice insurance and abandon any bad faith legal claim against MMIC by doing so.
We intend to report on the ultimate results of the bad faith lawsuits and related matters.
If you or a loved one may have been harmed as a result of medical negligence during labor and delivery in Iowa or in another U.S. state, you should promptly find an Iowa medical malpractice lawyer or a medical malpractice lawyer in your state who may investigate your birth injury medical malpractice claim for you and represent you or your loved one in a labor and delivery medical malpractice case, if appropriate.
Click on the “Contact Us Now” tab to the right, visit our website, or call us toll-free in the United States at 800-295-3959 to find medical malpractice attorneys in your state who may assist you.
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