Published on:

Case Law Update: Insurance Payouts in Medical Malpractice

Stevens v. County Mutual Insurance Company, No. 4-08-0216 (12-31-08) decided that an attorney, who collected limits of liability from liability insurer of driver of vehicle involved in collision with his client, is entitled to attorney’s fees from his client’s insurer pursuant to common fund doctrine for the collection of the medical payments it made on behalf of its insured; because insurer did not intend to file its own action, authorized settlement with other driver, and benefitted from attorney’s efforts. However, trial court erred when it entered summary judgment imposing Section 155 sanctions; because there is bona fide dispute whether common fund doctrine does not apply because medical payments were reimbursed through provisions of underinsured coverage. This will have a great impact on medical malpractice settlements.