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Risk retention group must pay med mal judgment despite AWOL doctor

Posted On: May. 9, 2019 1:02 PM CST

Medical malpractice

A risk retention group is on the hook for an award of more than $1 million in a medical malpractice case involving a policyholder physician who is no longer in the country and unreachable, says a federal appeals court in upholding a lower court ruling.

In January 2015, Dr. Ishtiag Malik treated Juan Castillo for his complaints of chest pains and shortness of breath, according to Tuesday’s ruling by the 4th U.S. Circuit Court of Appeals in Richmond, Virginia, in Claudia M. Mora et al. v. Lancet Indemnity Risk Retention Group Inc.

After administering a treadmill stress test and an EKG, Dr. Malik prescribed a beta blocker but did not refer Mr. Castillo to a cardiologist or instruct him to seek any other immediate medical attention, according to the ruling. Mr. Castillo died from a cardiac “event” eight days later, the ruling said.

Mr. Castillo’s wife, Ms. Mora, and children filed suit against Dr. Malik and others, including other physicians.

The attorney for Lancet, a Nevada-domiciled risk retention group that is now in receivership, according to its website, made multiple unsuccessful attempts to contact the physician. But he never responded, and the risk retention group learned he had moved to Pakistan with no plans to return to the United States.

After Lancet’s attorney advised Lancet he believed he was “ethically barred from appearing on Dr. Malik’s behalf, Lancet elected not to participate in the malpractice action — it did not investigate the malpractice claim, it did not obtain Castillo’s medical records, and it did not answer Plaintiffs’ complaint,” said the ruling.

 A state court eventually entered a judgment in favor of Mr. Castillo’s family for $2.56 million.

The plaintiffs then filed suit against Lancet, seeking a declaration it owed coverage under its policy. The U.S. District Court in Greenbelt, Maryland, awarded plaintiffs $996,841 and post-judgment interest. Another physician in the case had settled for the remaining half of the state court award.

The ruling was unanimously affirmed by a three-judge appeals court panel. The attorney’s contention “that he lacked the ability to enter an appearance without the consent of Dr. Malik finds no support in the Policy, in Maryland law, or in the expert testimony presented to and credited by the district court,” said the panel.

It also agreed with the lower court that Lancet failed to meet its burden of showing it was prejudiced by Dr. Malik’s refusal to cooperate in the malpractice claim’s defense.

An expert testified “it would have been possible for Lancet to mount a defense that Dr. Malik’s conduct met the standard of care primarily, if not exclusively, from his consultation notes,” said the ruling, in affirming the lower court’s ruling.

Plaintiff attorney Matthew P. Maloney, of Maloney Law Office LLC in Kensington, Maryland, said in a statement, “We felt that the trial court’s judgment was very thorough, and well-reasoned. We’re pleased that the 4th Circuit affirmed that judgment in its entirety.”

Lancet’s attorney did not respond to a request for comment.

The medical professional liability insurer segment continues to produce favorable overall earnings, but insurers in this space still face significant challenges, including an ongoing migration of physicians away from independent practices to hospital or large group health care providers and a lack of investment in technological innovation, according to a new report by A.M. Best Co. Inc. issued Tuesday.