For The Defense, July 2010 - DRI Today

M E D I C A L L I A B I L I T Y A N D H E A LT H C A R E L A WThe case of Teague v. St. Paul, 10 So. 3d806 (La. App. 1 Cir. 2009) provides a cautionarytale. In Teague, a plastic surgeonwas alleged to have performed a procedurewithout informed consent. His carrierassigned the case to an attorney, whopromptly met with the surgeon, examinedthe available evidence and “expressed confidencein mounting a successful defense”Health care practitioners’interest in the preservation oftheir professional reputationsis directly threatenedby NPDB reporting ofsettlement payment.34 n For The Defense n July 2010to the surgeon. 10 So. 3d at 812. The attorneythereafter assigned handling of the caseto another attorney at his firm. After fouryears of discovery, the case was set for trialand a deadline was set for the defendant tofile a jury bond. The surgeon’s attorneys didnot file the bond timely and waived the rightto trial by jury. Thereafter, the attorneys increasedtheir assessment of the likelihoodof a plaintiff verdict and the likely verdictamount, based in part upon the observationthat the judge who would decide thecase was “notoriously plaintiff- oriented.” Id.The case was mediated and settled at mediation.The missed deadline, revised caseassessment, mediation and settlement werecommunicated to the surgeon for the firsttime on the afternoon after completion ofmediation. Id. at 813–14.The surgeon subsequently sued his attorneys,the law firm, and the insurance carrier.For reasons that were not clear fromthe reported decision, the insurance carrierwas dismissed before trial. The surgeonclaimed his lawyers had committed professionalmalpractice by failing to properlyinvestigate and defend the claim; failing tokeep him informed of significant developmentsaffecting his interests; negligentlyforfeiting his right to a jury trial; and conspiringto conceal the negligence by settlingthe claim without his involvement orapproval. The surgeon testified that he discoveredthe details surrounding these allegationsupon reviewing the NPDB reportregarding the payment and seeking to correcterrors in that reporting. Id. at 814, 827.The surgeon alleged that his primary injurywas “loss of reputation” as a result of thesettlement and data bank reporting. Id. Thedata bank report was the surgeon’s primaryevidence of damage to his reputation. Id.at 827. Nearly 10 years after the underlyingsuit was filed, the surgeon’s legal malpracticecase was tried to a jury. It resulted in averdict of $138,000. Id. at 815.After review by the Louisiana Court ofAppeals and the Louisiana Supreme Courtregarding whether the suit was timely filed,the merits of the case were finally reviewedand, nearly 14 years after the underlyingsuit was filed, the Louisiana Court ofAppeals issued its substantive opinion. Itreversed the judgment and rendered a verdictin favor of the defendant attorneys,holding that the insurance carrier had theexclusive contractual right to settle theclaim, irrespective of the acts or omissionsof the defense attorneys (which were in partacknowledged to have been not entirelyadequate); that the surgeon did not provethat the case was settled as a result of theattorneys’ failure to investigate the claim,communicate with the surgeon, or preservethe right to jury trial; and that under Louisianalaw and the facts of the case, therewas no basis for awarding general nonpecuniarydamages in the absence of actualout- of- pocket losses. Id., generally.If Teague provides a lesson to attorneysin circumstances in which the lawyers wereultimately cleared from legal liability (if notentirely exonerated), another recent decisionis more alarming for defense counsel.In the unreported decision Steinberg v.Grasso, 2007 WL 701689 (N.J. Super. A.D.2007), the Superior Court of New Jersey, AppellateDivision, reviewed summary judgmentin a legal malpractice action filed byan obstetrician against the attorney who defendedhim in a medical malpractice action.While preparing the obstetrician to testifyat trial, the defense attorney also had himexecute a consent- to- settle form, the termsof which acknowledged that any settlementwould be reported to the NPDB. The obstetriciantestified that the attorney told himthat the parties were discussing settlementvia a “high-low” agreement, and that if suchan agreement were executed and the obstetricianprevailed at trial, there would be noNPDB reporting obligation. According tothe obstetrician, the attorney did not informhim of the possibility of a straightforwardsettlement. Id. at 2. The day after theobstetrician executed the consent- to- settle,the case settled for a sum certain, and paymentwas reported to the NPDB. Id.The obstetrician sued his lawyer forfraud and legal malpractice, alleging thatthe lawyer had duped him into executingthe consent form by discussing a high-lowagreement, when the intention all alonghad been to settle for a sum certain. Thetrial court granted summary judgment, inpart based on the conclusion that becausethe obstetrician admitted that he could notprovide special compensatory damages,there was no basis for an award of any otherdamages. The appellate court reversedsummary judgment and remanded thecase for trial. It held that general damagesfor injury to reputation were permitted ina legal malpractice claim, and that on thefraud claim, the lack of evidence of “actualdamage” would not preclude the claimwhere the obstetrician can show “someloss, detriment or injury.” Id. at 9. The courtagreed that the reporting of the settlementto the NPDB in a case in which he shouldhave been provided a defense damaged theobstetrician’s reputation, noting:If a person falsely reported in a publicationthat [the obstetrician] committedmalpractice in treating a patient, thataccusation would constitute libel per sethat would entitle [the obstetrician] atleast to general damages in the absenceof proof of economic loss…. “[A] slanderwhich ascribes to another conduct…incompatible with the proper conduct ofhis lawful… profession is liable for slanderper se.” [citations omitted]. No differentresult should obtain where thedamage to [the obstetrician’s] reputationgrew out of a legal fraud by his attorney.We are satisfied that, if there was nomalpractice, the inclusion of his namein the National Practitioner Data Banka proximate result of the fraud damagedhis reputation and will continue to do soin the future.Id.