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A federal judge refused to overturn a $7.9 million verdict in an insurance bad faith case brought on behalf of a doctor who claimed that his insurer’s failure to offer the limits of his policy led to a $2.5 million malpractice verdict against him. In her 16-page opinion in Jurinko v. The Medical Protective Co., U.S. District Judge Cynthia M. Rufe rejected the insurer’s argument that the jury’s award of $6.25 million in punitive damages was unjustified and excessive. The jury had two valid reasons for finding MedPro acted in bad faith, Rufe said, because there was evidence that it not only failed to settle the case when it had the chance, but also that it provided only one lawyer for both doctors named in the case – a decision that created a conflict since each of the doctors’ best defense would be to cast all blame on the other. At trial, Rufe noted that James Alff – the MedPro employee who assigned just one lawyer for both doctors – “testified that he did so despite knowing that appointing them the same lawyer created a conflict of interest for the lawyer in violation of legal rules of ethics.” The ruling upholds what appears to be the largest insurance bad faith verdict ever handed up in Pennsylvania, and is a victory for attorneys Mark W. Tanner and Peter M. Newman of Feldman Shepherd Wohlgelernter Tanner & Weinstock, and Mark Frost and Gregg L. Zeff of Frost & Zeff. Frost had represented plaintiffs Stephen and Cynthia Jurinko in a medical malpractice suit against Paul G. Marcincin, a dermatologist, for allegedly failing to diagnose Stephen Jurinko’s skin cancer. After Marcincin was hit with a $2.5 million verdict in April 2002, he assigned his rights to the Jurinkos to pursue his bad faith claim against MedPro, as well as his rights to pursue a legal malpractice claim against his attorney, James P. Kilcoyne of Plymouth Meeting. The Jurinkos filed both cases, and the case against MedPro went to trial first. During a six-day trial in October, Tanner told the jury that MedPro engaged in bad faith by refusing to offer any more than $50,000 – instead of the full $200,000 of Marcincin’s policy – to settle the case. In his closing argument, Tanner told the jury that the insurer’s refusal to offer Marcincin’s policy limit was “unreasonable” and that the company was “gambling with Dr. Marcincin’s life savings.” The Jurinkos, Tanner said, decided not to pursue Marcincin’s home and assets, but instead to accept an assignment of his claims against his insurer. In its verdict, the jury awarded the Jurinkos more than $1.66 million in compensatory damages – the difference between Marcincin’s policy limit and the “excess” verdict, including interest, against him, minus $1 million contributed by the CAT Fund – and $6.25 million in punitive damages. The trial was a complicated one in which the jury heard conflicting testimony about settlement discussions at various stages in the Jurinkos’ medical malpractice case. The Jurinkos had sued Marcincin as well as SmithKline Beecham Clinical Laboratories and one of its doctors, Andrew S. Edelman. Stephen Jurinko blamed both doctors for failing to diagnose his skin cancer at a time when it could have been cured easily. Instead, he said, the cancer metastasized and spread and required extensive surgery to remove lymph glands, as well as a year of interferon treatments. Evidence at the trial showed that Edelman, who performed the laboratory tests on a biopsy from a lesion on Jurinko’s nose, had reported that he found no cancer. But the report also said that the biopsy sample was insufficient. Frost contended that Edelman should have found the cancer in the first biopsy test, and that his error was compounded by Marcincin’s failure to order a second biopsy. Prior to the trial, Philadelphia Common Pleas Judge Sandra Mazer Moss held a settlement conference in which she placed a value of between $1.5 and $2 million on the case, and recommended that each defendant – Marcincin, Edelman and SmithKline – each pay a one-third contribution. According to court papers, SmithKline settled during the trial for $525,000, and Common Pleas Judge Alfred J. DiBona, who presided over the trial of the two doctors, recommended during the trial that the case should settle for $1.6 million. Frost testified that he had originally demanded $1.6 million, but later won approval from the Jurinkos to accept a total of $1 million. With SmithKline’s $525,000 already in hand, Frost said the case could have settled for another $475,000. Since the CAT Fund had already agreed to contribute $300,000, Frost said the settlement could have been reached if MedPro had offered the full $200,000 of Marcincin’s policy. Frost also said that, during jury deliberations, when the jury had a question about damages, DiBona told the defense lawyers that it was not too late to settle. But no settlement was reached, Frost said, and the jury returned a $2.5 million verdict in which it exonerated Edelman and found Marcincin 100 percent responsible for the missed diagnosis. Frost’s testimony apparently persuaded the jury because it hit MedPro with $6.25 million in punitive damages on top of a stipulated compensatory award of $1.66 million. MedPro’s lawyers – Jeffrey R. Lerman, Glenn F. Rosenblum and Albert L. Piccerilli of Montgomery McCracken Walker & Rhoads – filed post-trial motions that raised four main arguments: The plaintiffs had no “non-speculative” evidence that the case would have settled if MedPro had tendered the policy limit. Evidence of MedPro’s assignment of one lawyer for both doctors was improperly admitted and extremely prejudicial. The punitive damages award was excessive and violated constitutional due process standards. Jury instructions on the issue of punitive damages were flawed. Now Rufe has rejected every one of the defense arguments. The defense team, she said, accused the jury of engaging in speculation when it found that the case didn’t settle due to MedPro’s failure to tender its policy limits. But Rufe said there was no way to tell from the jury’s verdict form whether such a finding was essential since the jury could have found bad faith solely on the basis of MedPro’s decision to provide only one lawyer for both doctors. Evidence that Marcincin was provided a conflicted lawyer was enough, Rufe said, because “this bad faith action deprived Dr. Marcincin of his ability to vigorously assert his best defense – the liability of Dr. Edelman.” Viewing the entire trial, Rufe found there was sufficient evidence to support both of the plaintiffs’ bad faith theories. For both theories, Rufe said, the jury was instructed that it would not only have to find the conduct amounted to bad faith, but also that it was the cause of the excess verdict against Marcincin. (Copies of the 16-page opinion in Jurinko v. The Medical Protective Co. , PICS No. 06-0442, are available from The Legal Intelligencer . Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information. Some cases are not available until 1 p.m.)

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