Ga. jury returns $12M verdict against insurer for 'missteps'

'Failed to assign defense counsel'

Ichter and Hawkins teamed to represent a vascular surgeon sued for malpractice in Augusta in 2018 over the death of an 82-year-old patient who suffered from multiple comorbidities, per plaintiff counsel.

Contending the defendant had "complied with the standard of care in connection with his treatment of the patient," Ichter said the defendant "fully expected that MagMutual would provide him with the robust defense it promises all its insureds."

"[B]ut MagMutual failed to do so," Ichter said. "Nearly four months after MagMutual first learned of the complaint against our client, and two months after the complaint was served on our client, MagMutual had still failed to assign defense counsel to our client. Because of a cascading series of MagMutual's missteps and errors, the plaintiff in the malpractice claim filed a motion for — and obtained — a default judgment against our client."

Following the entry of the default judgment in Richmond County Superior Court, Ichter said MagMutual settled the claim for $1.7 million.
Upon the settlement being reported to the National Practitioner Data Bank and the Georgia Composite Board of Medical Examiners, as required by law, Ichter said his client began to face a variety of setbacks.

In addition to his existing work contract not being renewed, plaintiff counsel said the surgeon struggled to obtain new employment following the public acknowledgment of the settlement.

"Before this situation arose, our client, who served a fellowship at the prestigious Cleveland Clinic after his residency, had never applied for a job that did not result in an offer of employment," Ichter said. "After the settlement, our client applied for roughly 30 jobs and did not get an offer of employment from any of them. He declined to apply for other positions because the notices announcing the openings made plain that any malpractice history would be disqualifying. Ultimately, our client determined that the only way he could survive would be to open his own practice, which he did."

Contending their client endured "professional setbacks, loss of employment opportunities and significant financial damages" as a result of MagMutual's "failure to properly defend its policyholder," Ichter and Hawkins sued the insurer for breach of contract on their client's behalf in October 2020.

The action filed in Fulton County Superior Court alleged that under the plaintiff's insurance policy, MagMutual had been obligated to assign the policyholder "defense counsel on a timely basis and to provide him a defense to the complaint in the Richmond County lawsuit."

"MagMutual breached its obligations to assign Dr. [Ganesha] Perera defense counsel on a timely basis and to provide him a defense to the Complaint in the Richmond County lawsuit," the complaint read. "As a result of MagMutual's breaches of its duties under the policy, Dr. Perera went into default and, due to a failure to respond to plaintiff's request for admissions, admitted fault for the patient’s death."

Stephen J. Rapp and John Bonnie of Weinberg Wheeler Hudgins Gunn & Dial in Atlanta defended MagMutual against the breach-of-contract claim. In a consolidated pre-trial order, the defense duo countered that the damages sought by the plaintiff had been ineligible "for breach of the duty to defend."

"Dr. Perera cannot establish that his alleged lost wages flow solely from the breach of contract, as required by Georgia law," defense counsel briefed. "Dr. Perera has no admissible evidence of the reason why he was not offered any specific job. Dr. Perera cannot provide an exact computation of his purported lost wages to a degree of 'reasonable certainty.'"

Defense counsel also argued that the plaintiff could not recover litigation expenses under O.C.G.A. § 13-6-11 because his sole basis for the claim had been MagMutual's alleged breach of contract. Contending the plaintiff lacked evidence that MagMutual acted in bad faith, the defense duo briefed that "the bona fide controversy with respect to Dr. Perera’s alleged damages preclude[d] expenses for alleged stubborn litigiousness or purportedly causing unnecessary trouble and expense."

'Might influence the jury'

With both parties remaining at odds and unable to reach a resolution, the dispute advanced to trial before Fulton County Superior Court Senior Judge Gail Tusan on Jan. 28. Gathered before jurors, Ichter said plaintiff counsel centered their trial strategy on remaining relatable and easy to understand in hopes of overcoming an ill-timed obstacle.

"[A]lthough this was a contract case, in the background, Georgia politicians were bloviating about big damages cases in connection with tort reform legislation," Ichter said. "We were concerned that might influence the jury."

Ichter said he and Hawkins had also been concerned opposing counsel's ability to be "quite skilled and very likeable" might also influence the jury. To tilt the jury's esteem in their favor, plaintiff counsel honed in on their client's presentation in court.

"Our client's testimony was sincere and compelling," Ichter said. "Our client’s explanation of the medicine involved was detailed and technical, but he made the subject understandable and approachable. And his manner made him very credible and sympathetic."

$12.2 million verdict

After four days of trial and less than four hours of deliberations, the Fulton County Superior Court jury returned a $12.2 million verdict in favor of the plaintiff. Jurors awarded $9.1 million in compensatory damages and $3.1 million in attorneys' fees.

When reached for comment about the verdict, defense counsel focused on the defendant's public reputation.

"Our client’s dedication to protecting and supporting healthcare providers remains beyond question, as it has for over 40 years," Rapp told the Daily Report Wednesday. "As a mutual company, they are owned by the 40,000 doctors and hospitals they serve, and every decision they make is focused on keeping those lifesaving individuals’ best interests top of mind. They handle thousands of claims each year, with a focus and commitment to fairness and integrity, and will continue to do so."

This article first published in Law.com's Daily Report.

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