Negligence – Settlement agreement – Medical malpractice

Where a plaintiff has moved to enforce a settlement agreement in a medical malpractice suit, the motion should be allowed despite the defendant’s contention that he never signed any agreement approving the settlement or promising to pay the settlement amount personally.

“This case concerns a medical malpractice claim brought by the plaintiff against the defendant, Dr. Michael Steller. The trial was scheduled for October 21, 2024. On or about October 16, 2024, the plaintiff reduced her demand to $250,000.00 to settle. The next day, defendant, through his counsel, offered that amount to settle. On October 18, 2024, both parties reported to this court that they had reached a settlement agreement and thus, the trial was cancelled. …

“Dr. Steller states that he was employed with St. Elizabeth’s Medical Center and Steward Health Care at the time of the alleged medical malpractice. Dr. Steller was provided professional liability insurance through Tailored Risk Assurance Company (TRACO). The Court makes judicial notice of the fact that Steward Health Care System LLC filed for Chapter 11 bankruptcy in May 2024. TRACO is an insurance company who has not currently filed for bankruptcy and is an insurance company that is still solvent. TRACO indicated to Dr. Steller that there were no funds available to pay the settlement. It has not provided any further explanation as to the nonpayment. Dr. Steller states that he himself did not settle the matter but that TRACO settled the case with the plaintiff. TRACO has now refused to pay $250,000.00 to the Plaintiff. Dr. Steller contends that he never signed any agreement approving the settlement or promising to pay the settlement amount personally. He seeks this court to vacate the settlement agreement and to place this case back on the trial list. …

“First, the Court finds that Dr. Steller gave TRACO and his attorney an actual authority to act on his behalf during the settlement negotiation period. The conversations between the lawyers where they negotiated an amount to settle is clear that they were both bound by their demand and offer numbers between them. Dr. Steller gave actual authority to TRACO and his attorney, and the plaintiff and her attorney relied on it. … Given the representation to the court by both parties that a settlement has been reached, this Court finds that there was an actual authority given to TRACO and to Dr. Steller’s attorney, up to the demand amount of $250K.

“Second, there was also clear apparent authority to settle the claim. … Apparent authority exists only to the extent that it is reasonable for the plaintiff and her attorney dealing with the Dr. Steller’s attorney and TRACO to believe they are authorized. Here, it is reasonable as a general matter, for all parties to negotiate in good faith. …

“As for actual and apparent authority, all parties agree that in medical malpractices cases, the physician’s insurance company agrees to pay for the physician’s attorney and agrees to pay any settlement amount. TRACO agreed to settle and agreed to pay $250,000.00. Although Dr. Steller argues that he himself did not agree to the settlement offer and the amount, it is important and crucial to note that Dr. Steller gave the apparent and actual authority to TRACO and his attorney to settle the litigation matter, and that they are therefore bound by settlement agreement on his behalf. … No parties presented evidence of TRACO’s contract with Dr. Steller. However, it is apparently, clear, and Dr. Steller cannot deny that Dr. Steller’ s right to settle or to litigate was given entirely to TRACO within their contract.

“Third, the only material term that mattered — the amount of money to be settled at $250,000.00 — was clear and there were no other terms to consider. The only significant, material term to be negotiated and settled was the amount of money. Even though ‘the presence of undefined or unspecified terms will not necessarily preclude the formation of a binding contract,’ here, nothing was undefined nor unspecified. Situation Mgmt. Sys., Inc. v. Malouf, Inc., 430 Mass. 875, 878 (2000). There were no essential terms that remained to be negotiated. …

“Fourth, to enforce the terms of the agreement, the parties demonstrated a present intent of the parties at the time of formation to be bound by those terms. The parties must have had the intention to be bound by their agreement at the moment of its formation. … gave assurance to the plaintiff that it would agree to the settlement amount. The Court credits that all parties truly believed that there was a settlement.

“Of course, it is entirely unfortunate for Dr. Steller that TRACO, without an explanation, has refused to pay the settlement amount which it has agreed to pay. The Court understands the predicament that Dr. Steller is place in, especially when he has diligently paid his insurance premiums and has expected TRACO to indemnify him for any allegation of negligent medical care. However, Dr. Steller’s contract with TRACO is not what is before this Court, and Dr. Steller has his own litigation rights against TRACO. …

“For the foregoing reasons, the plaintiff’s motion to vacate dismissal nisi and to enforce the settlement agreement is allowed.”

Barrett v. Steller (Lawyers Weekly No. 12-055-25) (5 pages) (Ham, J.) (Suffolk Superior Court) (Civil Action No. 1784CV00524) (Dec. 13, 2025).

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