Background
Former spinal surgeon Abubakar Atiq Durrani performed medically unnecessary and harmful surgeries after exaggerating patients’ conditions and minimizing surgical risks. Ohio juries found him liable for negligence and fraudulent misrepresentation, among other claims, and awarded substantial compensatory damages. Durrani fled to Pakistan, however, and the patients were unable to collect their judgments from him.
Four patients sought to enforce their judgments against Durrani’s malpractice insurer, the Medical Protective Company. MedPro relied on a policy provision excluding damages “in consequence of” a willful tort. Separately, more than 250 former patients sued MedPro and its vice president of claims, alleging that MedPro colluded with Durrani’s defense counsel, misrepresented Durrani’s availability for depositions, manufactured a noncooperation defense, and improperly refused to settle or pay claims. The district court dismissed the enforcement actions and nearly all claims in the direct action.
The Court’s Holding
The Sixth Circuit affirmed. Applying Ohio law, it held that the policy exclusion applies when damages directly stem from and are inseparable from intentional fraud. Mere but-for causation or tort-law proximate causation is not necessarily enough. Adams’s and Bender’s damages arose from unnecessary surgeries fraudulently induced by Durrani and were not independent of his fraud. Potts forfeited any argument that complications from the execution of his surgery constituted separate negligence damages. Although McCann’s jury allocated half her damages to negligence, a hospital-settlement offset had already reduced that portion to zero, leaving only damages allocated to fraud.
The court also affirmed dismissal of the patients’ direct claims. Under Ohio law, an insurer’s good-faith duty runs to its insured, not third-party claimants such as Durrani’s patients. The plaintiffs could not evade that rule by relabeling bad-faith allegations as fraud, and they failed to plead the reliance, injury, fiduciary relationship, underlying tort, criminal conduct, or other elements required for their asserted causes of action. Claim preclusion barred claims that were or could have been litigated in an earlier action, and the district court properly denied a proposed amendment as futile and committed no reversible discovery error.
Key Takeaways
- Under Ohio law, a policy exclusion for damages “in consequence of” a willful tort reaches damages that directly stem from and are inseparable from intentional misconduct, but not necessarily every loss for which intentional misconduct is merely a but-for or tort-law proximate cause.
- Judgment creditors proceeding against an insurer under Ohio Revised Code § 3929.06 possess no greater coverage rights than the insured.
- Third-party claimants cannot recast an insurer’s allegedly unreasonable refusal to settle or pay as fraud without pleading a freestanding tort, including particularized facts showing a material misrepresentation, justifiable reliance, and resulting injury.
Why It Matters
The decision distinguishes between negligence damages that are genuinely independent of an insured’s intentional misconduct and damages that merely receive both negligence and fraud labels but arise from one indivisible injury. That distinction can determine whether a malpractice judgment falls within an intentional-tort exclusion.
The opinion also reinforces Ohio’s limitation of insurer bad-faith claims to insured parties. Even serious allegations about an insurer’s litigation and settlement conduct will not support recovery by third-party claimants unless the facts satisfy an independently recognized cause of action.