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Keywords

lawsuitsettlementdamagesattorneyappealsummary judgmentmalpractice
contractsettlementplaintiffdefendantattorneydiscoverynegligenceliabilitytrialsummary judgmentmalpracticewill

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Rogers v. Robson, Masters, Ryan, Brumund and Belom, 74 Ill.App.3d 467, 392 N.E.2d 1365, 30 Ill.Dec. 320

Facts

Dr. James Rogers was insured by Employer's Fire Insurance Company when a medical malpractice suit was filed against him. The insurance company retained the law firm Robson, Masters, Ryan, Brumund & Belom to defend him. Despite Rogers' explicit instructions not to settle the case, the law firm settled the action without his knowledge or consent for $1,250, leading Rogers to file a lawsuit against the attorneys for wrongful settlement.

On February 4, 1972, a complaint was filed against Dr. Rogers, alleging negligence in the care and treatment of one of his patients (named Quilico). Dr. Rogers' insurance carrier, Employer's Fire Insurance Company, a member of Commercial Union Assurance Companies, retained the defendant law firm to represent Dr. Rogers in the malpractice action instituted by Quilico.

Issue

Did the attorneys have the authority to settle the malpractice action without Dr. Rogers' consent, and did they breach their duty to inform him of the settlement?

First, does a question of fact exist as to defendant's authority to settle the malpractice action without Rogers' consent; second, does public policy prohibit settlement without Rogers' consent; third, did the trial court err in awarding summary judgment prior to discovery; fourth, by settling without the express consent of the plaintiff, did the defendant breach a duty to plaintiff that existed independent of the contract of insurance and finally, was Rogers damaged as a result of the defendant's actions.

Rule

The insurance policy allowed the insurer to settle claims without the consent of a former insured, but attorneys owe a duty to their clients to inform them of significant developments, including settlement offers.

The company shall not be obligated to defend any suit after the applicable limits of the company's liability has been exhausted * * * nor shall the written consent of a former insured be required before the company may make any settlement of any claim or suit even if such claim or suit was made, proffered or alleged while such former insured was an insured under this policy.

Analysis

The court found that the insurance policy's language clearly permitted the insurer to settle without Rogers' consent, categorizing him as a 'former insured.' However, the court also determined that the attorneys had a duty to disclose the imminent settlement to Rogers, especially after he had expressed his desire not to settle. By failing to do so, the attorneys breached their professional duty to Rogers.

Well in advance of the settlement, defendant was informed by its client, the plaintiff, that no settlement should be made. According to plaintiff, defendant responded that the action would be defended. Despite the plaintiff's demands that the case not be settled, settlement negotiations took place culminating in settlement in September of 1974.

Conclusion

The court reversed the summary judgment in favor of the attorneys and remanded the case for further proceedings, emphasizing the need to address the breach of duty and potential damages.

Accordingly, the judgment of the circuit court of Will County is reversed and the cause remanded for further proceedings consistent with the views expressed herein.

Who won?

Dr. James Rogers prevailed in the appeal because the court found that while the insurance policy allowed for settlement without consent, the attorneys breached their duty to inform him of the settlement.

The court found that the insurance policy's language clearly permitted the insurer to settle without Rogers' consent, categorizing him as a 'former insured.' However, the court also determined that the attorneys had a duty to disclose the imminent settlement to Rogers, especially after he had expressed his desire not to settle.

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