Birth Injury Lawsuit Can’t Proceed Against Successor Following Settlement

A mother suing for wrongful death of her newborn son, alleging negligence of the obstetrician and the midwife, will not be allowed to pursue a case against the new owner of the hospital in the wake of a settlement reached with other defendants. silouetteofpregnantwoman

In the case of Robbins v. Physicians for Women’s Health, LLC, the Connecticut Supreme Court rejected the plaintiff’s assertion she was entitled to press on with action against the hospital’s successor, despite a settlement that included two covenants not to sue.

Cape Coral birth injury lawyers recognize that while this is an out-of-state case, the general principle is an important one that is applicable for Florida claimants. The primary lesson is that plaintiffs need to fully understand the implications of signing a settlement agreement. Usually, it means giving up the right to continue with the action in court, even though you may have been legally entitled to do so.

For most people, this is a fair trade-off. They circumvent the time, energy and expense of a trial, while still receiving compensation for their loss. However, in most cases, defendants in settlement agreements don’t admit wrongdoing and the damages paid are typically less than what they would otherwise be had the plaintiff been victorious at trial.

There are some instances wherein multiple defendants are named and plaintiffs reach settlement agreements with some parties. In a lot of these cases, the pending action against those unsettled is usually allowed to proceed.

The issue here was that the covenants not to sue, signed by the plaintiff, indicated she would not sue the hospital, but made no mention of the facility’s new owner. The plaintiff claimed she still had a right to pursue action against the new owners as successors. However, the high court disagreed.

In Florida, the issue of successor liability is a tougher one because we follow the traditional corporate law rule. This holds that liabilities of the selling predecessor are not imposed on the buying successor unless:

  • The transaction was a fraudulent effort to avoid those liabilities;
  • The successor is simply a continuation of the predecessor;
  • The transaction is in fact a de facto merger;
  • The successor has either impliedly or expressly assumed the obligations of the predecessor.

This creates a higher burden of proof for plaintiffs seeking to hold successors accountable for the actions of the companies they purchase.

Still, it has been done. Look at the long-running asbestos litigation. In those cases, the original defendant companies are now defunct, having been purchased sometimes several times over by the time litigation was brought. Courts have allowed cases against those successors to proceed in most situations.

What the Connecticut Supreme Court ruled in this case was that even when successor liability is established, it doesn’t create the basis for a new cause of action or additional claim. Rather, it provides for the transfer of liability from one corporation tot he other. So in this instance, a plaintiff who agrees not to sue the predecessor can not then continue with a liability lawsuit against the successor.

Medical malpractice claims in particular result in highly complex issues of law and medicine. It’s important that plaintiffs fully understand the potential outcomes when pursuing a claim and further when agreeing to a settlement.

If you have been a victim of medical malpractice in Lehigh Acres, contact the Hollander Law Firm at 888-751-7770 for a free and confidential consultation. There is no fee unless we win.

Additional Resources:

Robbins v. Physicians for Women’s Health, LLC, May 27, 2014, Connecticut Supreme Court

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