In Stumacher v Medical Liab. Mut. Ins. Co. 2025 NY Slip Op 31014(U) March 31, 2025 Supreme Court, New York County Docket Number: Index No. 157477/2024 Judge: Judith N. McMahon, one of three physicians sues for bad faith by his insurance carrier and legal malpractice by his defense attorney.

Three physicians are represented by one law firm in a medical malpractice case, with MLMIC as the sole insurer. The case could have been settled within the policy limits, but the law firm and MLMIC refused to settle. Instead of settling within the policy limits, a verdict for 105 Million ensued. Is there a bad faith or legal malpractice claim here?

“Upon the foregoing documents, the defendants’ pre-answer CPLR 3211 (a) motions to dismiss portions’ of plaintiff’s complaint, as made by the defendant MLMIC Insurance Company, formerly known and sued herein as Medical Liability Mutual Insurance Company (hereinafter “MLMIC”) (Motion Seq. No. 001) and the defendants, Marshall Dennehey Warner Coleman & Goggin a/k/a Marshall Dennehey, P.C. (hereinafter “Marshall Dennehey”) and Kevin Ryan (hereinafter “Attorney Ryan”), are denied.”

“In his 29-page four count Complaint (see NYSCEF Doc. No. 6) Dr. Richard Stumacher, (one of several defendant physicians in an underlying medical malpractice case entitleKeimoneia Redish v. Darryl Adler, et., al., Supreme Court, Bronx County, Index No: 310294/2011 ), sets forth causes of action against his medical malpractice liability carrier, MLMIC, for: (1) acting in bad faith by, inter alia, assigning a single law firm to represent Dr. Stumacher and two other physicians–with competing interests–and failing to settle the underlying Redish case within Dr. Stumacher’s policy limits (“First” Cause of Action); (2) breaching its contractual covenant of good faith and fair dealing (“Second” Cause of Action); (3) punitive damages in the amount of$20,000,000.00 (TWENTY MILLION DOLLARS) for “placing its own business and financial interests in conducting bad faith insurance claims practices over and above the financial and business interests of millions of claimants injured by MLMIC insureds nationwide … “(“Third” Cause of Action; see NYSCEF Doc. No. 6 para 103) and, as against the remaining defendants Marshall Dennehy and Attorney Ryan, for (4) legal malpractice in their representation of Dr. Stumacher during the Redish trial (“Fourth” Cause of Action). It is undisputed that the plaintiff, Keimonieia Redish, was hospitalized at St. Barnabas Hospital from December 4, 2010, through January 25, 2011, for treatment of severe asthma. During her stay, where she received care from several physicians including MLMIC insureds Darryl Adler, M.D., Ronald Ciubotaru, M.D., and Dr. Stumacher2, Mrs. Redish suffered a neurological insult resulting in brain damage, confinement to a wheelchair, and difficulty speaking and communicating. On April 12, 2019, a jury returned a verdict in Redish’s favor for $60 MILLION dollars for past pain and suffering, $30 MILLION dollars for future pain and suffering, and $15,100,000.00 in economic damages. The pain and suffering award was reduced to $10 MILLION on appeal, and the present value of the judgment, as of the date of entry, is $22,926,519.82 with statutory interest running from January 23, 2020. The jury held Dr. Stumacher 25% at fault for Mrs. Redish’s injuries.”

“Dr. Stumacher alleges that, unbeknownst to him, on or about April 3, 2019, Redish’s counsel submitted a written demand to MLMIC and Marshall Dennehy offering to settle all claims against Dr. Stumacher for his $2.3 million dollar policy limits, that MLMIC failed to offer its $1 .3 million primary policy limits (and accordingly, did not trigger the excess carrier’s obligation), and that as a result, Dr. Stumacher was exposed to a judgment far in excess of his policy limits, for which he remains jointly and severally liable.”

“In support of the CPLR 321 l(a)(l) branch of its motion, movants [Attorneys] argue that “undisputed documentary evidence” demonstrates that Marshall Dem1ehey repeatedly provided Dr. Stumacher with timely and comprehensive reporting on exposure risks, settlement developments, and analysis of the strategic decision to proceed with joint representation. These unauthenticated documents, entitled “Memo to File,” are attached as exhibits F through H to the motion. Movants further maintain, in support of dismissal under CPLR 3211 (a)(7), that plaintiffs theory of proximate causation is impermissibly speculative and fails as a matter of law, since a potential for settlement within policy limits depended on the uncontrolled conduct of the codefendant physicians and St. Barnabas Hospital. In opposition, plaintiff is emphatic that he has set forth a cognizable cause of action sounding in legal malpractice against Marshall and Dennehey and Attorney Ryan by alleging, inter alia, (1) that Marshall and Dennehey improperly represented Dr. Stumacher and the other MLMIC insured physicians, who were not united in interest, for the firm’s own financial gain; (2) that Marshall and Dennehey failed to inform Dr. Stumacher that he had the right to retain independent counsel at MLMIC’s expense, and (3) that the firm failed to inform Dr. Stumacher of and failed to respond to the bad faith statement tendered by Mrs. Redish’s counsel toward the end of the underlying trial. Motion Seq. No. 002 is likewise denied. Here, there is no documentary evidence such as a general release or an agreement to arbitrate that would be evidence to dismiss the complaint under CPLR 3211 (a) (1). Evidence recognized under the law. must be in admissible form and properly authenticated (Doe v. Intercontinental Hotels Group, P LLC 193 AD3d 410 [1 st Dept. 2021 ]). Plaintiffs may amplify these allegations in a bill of paiticulars (see JG v. Goldfinger, 161 AD3d 640, 641 [1st Dept. 2018]). Plaintiff argues that defendants are attempting to improperly and prematurely move for summary judgment before issue has joined and before discovery has ensued, when all that is necessary at this pre-discovery stage to defeat a 3211 a motion is for the plaintiff to state a cognizable cause of action Movants’ attempt to have the complaint dismissed at this stage for failure to prove proximate cause is not ripe for discussion at this juncture.”