Professional Liability Insurance: Liability For Bad Faith Refusal To Settle
Evans v. Mutual Assurance, Inc., 7 ALW 35-10 (1970786), 1999 WL 7026 (Alabama Supreme Court, January 8, 1999): Owen B. Evans, M.D. was sued in a separate wrongful death action in Mobile County after an eighteen-year-old girl hemorrhaged and died following an abortion Evans performed on her. Evans forwarded the lawsuit to Mutual Assurance, Inc., his malpractice insurance carrier. Mutual Assurance did not settle the case, and the case proceeded to trial, where the jury held Evans liable and assessed $10 million in punitive damages. While the case was on appeal, Mutual Assurance settled the case for $5 million, agreein g to pay the entire settlement amount, even though Evan's policy had policy limits of $1 million. Evans filed a suit in the Circuit Court of Jefferson County, alleging causes of action for bad faith refusal to settle a claim and outrage against Mutual Assurance. The trial court entered a judgment on the pleadings as to both counts. The Alabama Supreme Court affirmed the trial court's judgment, holding that Evans had been absolved of liability and was never subject to a final judgment exceeding the limits of his policy with Mutual Assurance.