US 4th circuit appellate court rules agency nurse is hospital employee for malpractice

[RiskManager]

http://www.ca4.uscourts.gov/Opinions/Published/151801.P.pdf

This is a very interesting decision that applies to the states within the US 4th Circuit. The court ruled that an agency nurse, covered by the agency's insurance, should have been considered a hospital employee and covered by the hospital's insurance.

In a nutshell, this decision is based upon a screwup of whomever wrote the hospital's insurance policy. In one section pertaining to general liability, agency staff were specifically excluded from coverage. In the section pertaining to healthcare professional liability, that language was omitted. The Court felt it was a deliberate omission, but I bet the drafters of the policy language just screwed up. This error was interpreted against the hospital's insurance company, the agency nurse was deemed a hospital employee covered by the hospital's insurance coverage and they had to reimburse the agency's insurance company about $ 3 million dollars.

I imagine the hospital's insurance company will be modifying the policy language immediately to prevent similar cases in the future. ​

[RiskManager]

The unspoken question I have after reading the opinion is: what did Nurse Cryer do to incur a $ 2.5 million dollar indemnity payout? I Googled her name and found this: https://center.mdmalpracticeattorney.com/files/2014/01/SOC2011-566R.pdf. This was a bad baby case: failed Pitocin induction, attempts at vacuum, C-section and resulting in a child born with neonatal asphyxia. It appears as if the allegations against Nurse Cryer had to do with patient monitoring and informing the OB of problems. So I am guessing that things started to go south during the induction, probably there were some alarming tracings on the fetal heart monitor, and plaintiff counsel alleged that the nursing staff failed to summon the OB in a timely manner and/or failed to appreciate fetal distress and provide appropriate treatment.

Note also that Nurse Cryer's employer was held vicariously liable for her actions and the employer's insurance company paid up. Clearly there was concern over her nursing care, since the insurance company paid $ 2.5 million in indemnity and almost $ 500,000 in legal expenses, which likely means they could not have successfully defended her care in court. If they incurred that much in legal defense costs, I bet this was a last minute settlement right before trial started. They must have been concerned over a higher verdict if the case went to trial.