Doctor’s Appeal Not Moot Despite Assignment And Forbearance Agreement

Marsha Dienstag sued her doctor, Lawrence Margolies, for medical malpractice. She claimed that Margolies did not timely diagnose her cancer. A jury agreed, and gave her a verdict for more than$5.9 million.

Margolies had an “assignment and forbearance” contract with Dienstag. Dienstag agreed not to seek payment of the judgment in excess of Margolies’s malpractice policy limits directly from Margolies. In return, Margolies assigned his claim against his malpractice insurer for “bad faith refusal to settle” within Margolies’s policy limits to Dienstag.

Margolies appealed the judgment. Dienstag pointed to the “forbearance and assignment” agreement and asked the court to dismiss the appeal. She argued that the agreement “renders the instant appeal moot because there is no longer a ‘live controversy’ between the parties.”

The First District Illinois Appellate Court disagreed with Dienstag. The court ruled that Margolies still could be liable to his insurer for an amount in excess of his policy limits, so his appeal was not moot. Here is what the court said:

… [I]t is in Dr. Margolies’ interest to seek reversal or reduction of the judgment. Although the terms of the assignment and forbearance agreement would preclude the Dienstags from seeking payment of the excess judgment from Dr. Margolies, he could face financial liability from his insurance carrier if it is required to pay the entire judgment. Moreover, there is nothing contained in the assignment and forbearance agreement that requires Dr. Margolies to drop this appeal. Therefore, we conclude that the present appeal is not moot.

The appellate court ultimately affirmed Dienstag’s judgment. The whole case, Dienstag v. Margolies, No. 1-06-1558 (9/30/09), is available by clicking here.