MARCH 2006 BAD FAITH CASES EVIDENCE SUFFICIENT TO SUPPORT JURY’S BAD FAITH VERDICT BECAUSE OF FAILURE TO SETTLE AND APPOINTMENT OF SINGLE COUNSEL WITH CONFLICT OF INTEREST (Philadelphia Federal)

In Jurinko v. Medical Protective Company, a dermatologist and pathologist had failed to diagnose Jurinko’s skin cancer.  Jurinko brought suit in the Philadelphia Court of Common Pleas.  The same carrier provided a single lawyer to represent both doctors, even though there were potential cross claims and a conflict of interest in that representation.  The pathologist had no liability, but the dermatologist was found liable for $2.5 Million by the jury, far in excess of his available insurance.  He assigned his bad faith claim to Jurinko, and the bad faith suit proceeded to trial in federal court.  The federal jury awarded over $1.6 Million in compensatory damages and $6.25 Million in punitive damages.  The trial judge refused to grant the carrier’s post trial motions.  The federal judge found there was sufficient evidence for the federal jury to have found bad faith because (1) of a failure to offer any more than $50,000 to settle, where the policy limit was $200,000 and where two experienced judges had put 7 figure sums on the settlement value of the case; and (2) where the carrier knowingly appointed a lawyer with a conflict of interest. Among other things, the carrier’s employee testified that the carrier was “fully aware that it was unethical [to assign one lawyer] and [that] would create a conflict of interest, [but] that it did so to save money.”

Date of decision:  March 29, 2006

Jurinko v. Medical Protective Co., United States District Court for the Eastern District of PA, No. 03-CV-4053, 2006 U.S. Dist. LEXIS 13601 (E.D. Pa. Mar. 24, 2006) (Rufe, J.)