In a case that sheds light on disputes that can divide malpractice insurers and physician clients, a South Carolina ob/gyn has accused his insurance company of refusing to settle a doomed malpractice case — ultimately costing him millions of dollars beyond his policy’s limit.

In a federal lawsuit filed on August 24, Gregory A. Miller, MD, alleges that MagMutual, a large physician-owned malpractice insurer, botched his defense in a 2009 case and failed to settle despite multiple opportunities — even after the physician himself told the company to make a deal.

Miller ultimately lost the case, which involved injuries to a newborn during a 2007 delivery, and he was ordered to pay $4.68 million, $2.68 million over his policy limit of $2 million.

The case “gets at the inherent conflicts of interest between insured and insurer. What may be best for an insurance carrier isn’t necessarily what’s best for their insured,” said Michael J. Sacopulos, JD, a malpractice attorney in Terre Haute, Indiana. He is not involved in the case.

Nearly Two Decades of Legal Wrangling

The malpractice saga began in 2007 when a woman named Angela Patton gave birth to a daughter at a hospital in York County. In her 2009 malpractice lawsuit, Patton accused Miller of failing to recognize and appropriately treat signs of shoulder dystocia during delivery.

The lawsuit claimed the delivery permanently injured the baby’s nerves, causing Erb palsy. This condition, often caused by shoulder dystocia during birth, causes paralysis and weakness in the arm.

Miller and co-defendants denied the allegations. Legal wrangling and the COVID pandemic delayed the lawsuit for years, but the case eventually went to trial in 2022. A jury found in favor of Patton, who sued on her daughter’s behalf, and awarded $1.5 million in economic damages and $1 million in noneconomic damages.

The judge in the case lowered the damages slightly but brought the total amount to nearly $4.7 million by adding more than 11 years of interest at 8% per year.

MagMutual and attorneys for Miller didn’t return requests for comment. Miller continues to practice ob/gyn and is affiliated with the Medical University of South Carolina, Charleston.

‘Nuclear Verdicts’ Are Rare — but On the Rise

According to Miller’s new lawsuit in federal court, his MagMutual policy had a limit of $2 million. Despite an “obvious risk of an excess verdict,” Miller alleges, “MagMutual was given an opportunity to settle the case and protect its insured, but made no settlement offer before trial.”

Verdict amounts in malpractice cases have jumped in recent years beyond the increase attributed to inflation. “Nuclear” verdicts over $2 million remain rare, but they accounted for 3.2% of claims in 2023 vs 1.9% in 2013, according to one analysis.

Meanwhile, several such verdicts have drawn intense attention, including several regarding injuries sustained to babies during birth:

• In 2025, a Pennsylvania appeals court upheld a $207 million verdict against the Hospital of the University of Pennsylvania over a delayed cesarean section that was alleged to cause a child to develop cerebral palsy and other impairments.
• Also in 2025, a Utah judge ordered a health system to pay $951 million over an allegedly botched delivery that caused permanent and severe brain damage to a baby girl.
• This year, the Pennsylvania jury returned a $108.6 million verdict in another birth injury lawsuit.

Insurer Allegedly Refused to Settle Despite Risk

In the lawsuit, Miller alleged that “even during trial…MagMutual refused to settle even after Dr Miller expressly requested that MagMutual settle the case up to his available policy limit.”

Miller also claims that MagMutual “refused to authorize or meaningfully consider a high-low agreement during trial, even though a high-low agreement could have protected Dr Miller from personal exposure above policy limits.”

Attorneys on opposing sides in a malpractice case can privately agree to a “high-low agreement” that supersedes the ultimate verdict. The idea is to protect the plaintiff from going home with nothing and the defendant from getting socked in the wallet, according to a 2007 report in Family Practice Management, now called FPM.

For example, while a jury is deliberating, attorneys from both sides could agree on a settlement paying $1 million to the plaintiff if the verdict favors the plaintiff and $200,000 if the verdict favors the defendant. Some middle amount would be negotiated for hung juries, the report said, using a hypothetical scenario.

Can Physicians Make Calls on Settlements?

Sacopulos, the Indiana malpractice attorney, said the insurer may be on the hook here if it could have settled the case within the policy limits. If the insurer wants to take a risk beyond the policy limits, he said, “they can’t offload that onto somebody else” — such as the insured physician. “That’s the general rule.”

What about Miller’s claim that the insurer refused his request that it settle the case? “I know of no insurance policy where the defendant can directly say that the amount demanded be paid if it’s insurance company money,” Sacopulos said.

However, he said some malpractice policies work in reverse: They include clauses that allow physicians to order the insurer to not settle a case.

“In an effort to reduce premiums, some carriers have taken that out, and some health systems have waived that. It’s become far more common now than it used to be to have that clause removed, and so they can settle without the physician's approval.”

Sacopulos added that the fact that the case has dragged on for so long “should make everyone’s blood run cold.”

“It’s not good for either party,” he said. “What we have is just protracted litigation, which really only benefits the people who charge by the hour. It’s pretty hideous that 2 decades after the alleged incident of malpractice, the case goes on.”

One Option for Physicians: Get Your Own Attorney

In a 2024 Medscape Medical News article, Ann W. Latner, JD, writes that physicians and attorneys hired by their malpractice insurers can disagree over many other matters in a case beyond settlement, including tactical decisions, choices of witnesses, and admissions of liability.

How can physicians protect themselves?

Philadelphia malpractice attorney James Beasley, Jr, MD, JD, LLM, who was not involved in the Miller case, said he recommends that physicians hire independent counsel if they face the prospect of losing their own money in a malpractice case.

In an interview, he noted that insurers typically hire attorneys to represent physicians in malpractice cases, meaning that the insurance company calls the shots. “They all do their best most of the time to take care of the doctor, but they are working for the insurance company.”

If there’s a conflict between an insured physician and a malpractice insurer, he said, the personal lawyer can “run interference” for the doctor with the insurance company.

“They can write to the insurance company and say, ‘Listen, you guys are screwing this up. You’ve got to do right by my doctor. Settle this because if you don’t, my client’s going to be in big trouble.’”

If an insurance company insists on not settling, Beasley said, the personal attorney could help in another way by laying the groundwork for the insurer to be sued because it acted in bad faith.

The experts cited in this article had no relevant disclosures.