Family awarded $76 million in damages against Iowa clinic following child's birth injury; clinic sues malpractice insurance company for bringing the case to trial

By Stephanie Srakocic | Fact-checked by Davi Sherman
Published December 13, 2023

Key Takeaways

  • An Iowa clinic is suing major insurance company MMIC, alleging that the company prevented them from settling a malpractice case and forced it to go to trial.

  • The clinic claims that MMIC acted in bad faith and used its case to boost its argument for caps on non-economic damages.

Iowa Clinic Obstetrics and Gynecological Associates of Iowa City and Coralville has sued malpractice insurance company MMIC. The suit comes after a 2022 malpractice trial and a record-setting $97 million damages verdict for the family of an infant who developed severe brain injuries during delivery. The judgment was later reduced to $76 million.[] 

The clinic had a $12 million malpractice insurance policy with MMIC. During the trial, the insurance company led the legal defense strategy and hired law firm Shuttleworth & Ingersoll. In the suit filed against MMIC on November 21, 2023, the clinic alleges that MMIC forced the case to trial.[]

The complaint states that physicians wished to settle with the family before a trial, but MMIC prevented this. Additionally, the complaint alleges that Shuttleworth & Ingersoll ignored the clinic’s requests for settlement negotiation and instead pushed forward with a trial to serve MMIC’s interests.[]

Court filings from both the plaintiff and defense show that the clinic, doctors, and family expressed interest in settling the case out of court for an amount the clinic’s insurance policy would have covered (closer to $12 million). MMIC appears to have resisted settlement negotiations. The lawsuit contends that MMIC acted in bad faith based on political motivations.[]

Last February, Iowa Governor Kim Reynolds signed a malpractice damages cap into law. Allegedly, MMIC helped campaign for this cap by painting a picture of out-of-control lawsuits and greedy trial lawyers out to harm doctors and clinics. The company used large damage awards like the one against Obstetrics and Gynecological Associates of Iowa City and Coralville to build their argument. The complaint alleges that MMIC forced the malpractice case against the clinic to trial by refusing settlement negotiation. The company then used its large award to strengthen its case on the need for economic damages caps in Iowa.[]

The clinic is now represented by Nicholas Rowley of Trial Lawyers For Justice. Rowley has stated that MMIC’s actions were “‘deceitful and fraudulent,’” not only in relation to the clinic and the family of the injured child but also to the people of Iowa. []

Reportedly, Mr. Rowley told the Iowa Supreme Court that his clients are not looking to appeal the verdict through the court but are instead trying to reach a settlement with the family of the injured child. The family’s legal team has not commented on the lawsuit or on current settlement talks.[] 

MMIC called the statements in the lawsuit “‘simply untrue.’” The insurer said that it expected the suit to be thrown out. MMIC has moved forward in federal court to prevent settlement talks. If settlement talks move forward, the company has stated it should pay back the $12 million it provided to the clinic, and its insurance policy should be considered void.[] 

This isn’t the first highly publicized lawsuit against MMIC in recent years. Retired clinical pathologist Joy Lovegood, MD, sued MMIC for allegedly pressuring her to admit fault in a 2019 malpractice suit despite knowing she was not at fault. Dr. Lovegood sued MMIC in Minnesota and again in Iowa after her Minnesota case was dismissed. 

Iowa’s 2023 malpractice law changes

Iowa House File 161 was signed into law in February 2023, joining a handful of other new laws and regulations surrounding medical malpractice. House File 161 set the cap on non-economic damages against doctors and clinics at $1 million and the cap on non-economic damages against hospitals at $2 million. The cap affects cases of death, permanent injury, and other severe harm. Iowa previously had a cap of $250,000 on non-economic damages in cases where patient injuries were not permanent, severe, or fatal.[]

Many states have caps on award amounts for malpractice cases, but they’ve proven controversial. Proponents argue that these caps keep malpractice premiums low, prevent frivolous lawsuits, and make it easier for physicians to practice in that state. Others argue that they punish people harmed by malpractice and prevent them from receiving fair trials and compensation.  

The conversations surrounding caps are ongoing. Lawmakers nationwide will likely continue the discussion next year—and for years. In fact, Nevada has a new malpractice damages cap policy that will go into effect on January 1, 2024. the state’s $350,000 damages cap will increase by $80,000 every five years, increasing at a flat rate of 2.1% per year.[] 

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