Circuit Lifts Stay in Medical Malpractice Case

(CN) - The stay placed on a medical malpractice case involving Medical Assurance Co. will be lifted, the 7th Circuit ruled.

Defendant Dr. Mark S. Weinberger maintained an ear, nose, and throat practice in Merrillville, Ind. He is facing more than 350 medical malpractice claims.

In 2004, Weinberger was vacationing in Greece when he disappeared, allegedly to evade $5.7 million in creditor claims and 22 criminal counts of billing fraud. An international warrant resulted in his arrest in Italy in 2009 and subsequent extradition to the United States.

Weinberger's insurance provider, Medical Assurance Co., has been conducting his defense against the malpractice claims.

Due to Weinberger's absence, the company petitioned The Northern Illinois District Court for an injunction relieving its responsibilities to defend Weinberger or to pay any damages in his cases. The company alleges a breach of the insurance policy's cooperation clause, which explicitly denies coverage in cases where the insured fails to comply with legal proceedings.

A stay on the proceedings was issued until the malpractice suits were resolved. The District Court stated the concern that "such a declaration would intrude too severely on the state medical malpractice actions."

The 7th Circuit ordered a removal of the stay, saying that the lower court exceeded its legal discretion.

"Although district courts enjoy some discretion over requests for declaratory judgments, that digression is not unlimited," appellate Judge Diane Wood explained.

The case was remanded to the District Court, where Medical Assurance Co. will have to demonstrate that Weinberg's absence from malpractice hearings resulted in actual prejudice.

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