Kentucky Insurer Must Pay Med Mal Victim $3.8M For Ignoring Claim

A Kentucky jury recently awarded a victim of medical malpractice $3.8 million after she was left permanently disabled and the surgeon's insurance company refused to address her case. The bad faith insurance verdict is just one of many in Kentucky and other states – and legal experts say that this may be a growing trend as insurers pay fewer claims in a down-turned economy.

Gross medical malpractice

There are medical malpractice claims and then there are gross medical malpractice claims. What follows is the latter. According to an article in the Courier Journal, then 39 year old Debbie Daniels had a hysterectomy in 2003. Her surgeon, Dr. David Lee Grimes, convinced Daniels to have a tummy tuck at the same time. She agreed and the surgeries were done together. However, only two days later, she realized that something had gone terribly wrong. Her wound had burst and left a large hole in her stomach. She had to undergo several emergency surgeries and was left permanently disabled.

Unknown to Daniels at the time, Grimes had never been trained to do tummy tucks and had actually been kicked off the staff at another hospital for performing them on other patients without training. She sued Grimes for medical malpractice, but soon realized that she had another battle in front of her.

Bad faith insurance practices

Grime's medical malpractice insurance company, American Physicians Assurance Corporation (APAC), simply ignored Daniel's claim. Two years later, and with her medical bills piling up, the insurer offered her $75,000 – even though it new its liability was much, much higher.

Desperate, Daniels – a single mother of two who was now permanently disabled – eventually settled the matter with APAC for $650,000, but retained the right to sue the insurer for the settlement delay. The latter turned out to be a very smart move on her bad faith insurance attorney's part as she did sue APAC and a Kentucky jury awarded her $3.8 million. Nearly $3.5 million of that award was for punitive damages.

Injured Kentucky victims may have better chance at damages

Kentucky is only one of a few states where juries, instead of insurance commissioners, decide how much of a penalty to impose on insurers who engage in unfair claims settlement practices where a patient sues their doctor's insurance company.

Delaying tactics such as APAC's are common – especially in this economic climate. Kentucky policyholders can fight back if, according to Kentucky's unfair claims settlement practices act, their insurer fails to attempt “in good faith to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear."