Law School Case Brief
McGee v. United States Fid. & Guar. Co. - 53 F.2d 953 (1st Cir. 1931)
Expenses sought to be recovered resulting from the findings that there was a special contract not because of 'malpractice, error or mistake' in treatment are not recoverable.
Plaintiff insured, a physician, purchased a policy from defendant insurer for coverage against liability for malpractice, error or mistake. The insured was sued by a patient in state court for negligently performing an operation to remove scar tissue from the patient's hand and for breach of a special contract to produce a "perfect hand." At the malpractice trial, the jury found that such a special contract was made and that the insured had failed to perform. The patient and the insured reached a settlement for $1,400, which the insured paid. He then filed this action against the insurer to recover the amount of the settlement and costs incurred in the medical malpractice lawsuit. The District Court granted the company's motion for a directed verdict on the negligence count, and the insurer disclaimed any liability on the assumpsit count. The insured sought review.
In plaintiff insured physician's suit to recover under a liability insurance policy, was defendant insurer required to reimburse plaintiff for the amount of the settlement in an underlying medical malpractice claim?
The court of appeals affirmed the judgment in favor of the insurer. The Court held that the policy did not cover the insured's liability under a special contract and that the assumption of the insured's defense did not estop the insurer from denying liability under the special contract. The expenses sought to be recovered resulted from the findings of a jury that there was a special contract between the the physician and his patient and not because of 'malpractice, error or mistake' in treatment.
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