Maxer v. Security Ins. Group, 368 F. Supp. 418 (E.D.Pa. 1973)

Underlying PA Medical Malpractice Action

Student Contributor: Colleen Gaedcke

Facts: The plaintiff brought a medical malpractice action against a doctor who was insured by the defendant insurance company. At the time of the alleged medical malpractice the doctor had two insurance polices, one being with the defendant with a limit of liability for each claim in the amount of $40,000 and imposed upon the insurance company the duty to defend the doctor in medical malpractice suits. At time the underlying action was filed against the doctor, both carriers appointed attorneys to represent the doctor. The other carrier’s attorney entered into a settlement agreement with the victim’s estate and but did not notify the defendants. At this point, the attorney the defendant’s appointed to represent the doctor in the underlying action withdrew his appearance. No one ever filed a motion to join the hospital as a third-party defendant and under the local law, joinder of third-party defendants had to be within 6 months from the date when the defendant’s answer was filed. After the 6 months passed the doctor made a motion to join the hospital, which was denied. The jury set plaintiff’s damages at $89,318, $39,318 of which was not covered by the doctors insurance.

Issue: Whether the defendant is liable for legal malpractice for failing to join the hosptial?

Ruling: No.
1) An attorney is not negligent “merely because he fails to join all persons whom a jury could find to have been joint tortfeasors.”
2) “An informed judgment, even if subsequently proven to be erroneous, is not negligence.”
3) Tthere is no evidence that either the defendant insurance company or its attorney knew of the settlement. Therefore, the theory of negligence cannot stand.

Lesson:  Failure to join a party as first blush seems to be negligence, but not if a party is omitted because of a reasoned and informed professional judgment.