Seventy Nine Year Old Woman Dies Due To Nursing Home Neglect

Type of Case: Seventy Nine Year Old Woman Dies Due to Nursing Home Neglect: Case Settles for $5,000,000 Subject to Binding Arbitration on Issue of Insurance Coverage – On December 6, 1999, Plaintiffs and Defendants entered into a settlement for five million dollars ($5,000,000) in a nursing home death case of a 79 year-old nursing home resident. The unique aspect of this settlement is that Defendant’s insurance company took the position that the facts in the case were so egregious as to constitute “habitual neglect” by the nursing home.
Interstate Insurance Group provided coverage to Heartway Corporation, Sage Health Services, Inc. and individual defendants which totaled six million dollars ($6,000,000.00). During depositions taken in the case, Plaintiffs’ attorneys obtained admission to repeated neglect committed by individual defendants and managerial agents. Interstate Insurance Group contended that such repeated neglect amounted to “habitual neglect” so as to void coverage.
Interstate Insurance Group took the position that regardless of the outcome of trial and any subsequent appeals, Interstate Insurance Group would refuse to pay the affirmed judgment. In order to avoid the necessity of two trials, Plaintiffs’ attorney proposed binding arbitration on the issue of coverage after the parties had agreed that five million dollars ($5,000,000.00) was a reasonable settlement, given the facts of the case.
Under the terms of the arbitration agreement proposed by Plaintiff’s attorneys, the winner takes all – iIf Defendants prevail on the coverage issue, Plaintiffs will receive nothing; if Plaintiffs prevail on the coverage issue, Plaintiff will receive five million dollars ($5,000,000.00).

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