Opinion ID: 1133601
Heading Depth: 1
Heading Rank: 4

Heading: negligence claims against government defendants

Text: On June 22, 1995, the trial court dismissed the case against the State of Kansas, the Fund, and the Fund's director, Robert Hayes, based on governmental immunity. The court found that the State and government defendants were immune from Miller's claim of negligent settlement of the malpractice claim. Miller contends that the trial court erred because the Kansas Tort Claims Act (KTCA), K.S.A. 75-6101 et seq., provides statutory consent to sue the government and government employees. The KTCA states that unless a statutory exception to liability applies, a governmental entity shall be liable for damages caused by the negligent or wrongful act or omission of any of its employees while acting within the scope of their employment under circumstances where the governmental entity, if a private person, would be liable under the laws of this state. K.S.A. 75-6103(a); P.W. v. Kansas Dept. of SRS, 255 Kan. 827, Syl. ¶ 1, 877 P.2d 430 (1994). To prevail on the negligence and fraud claims against the government defendants, Miller must prove that the Fund owed him a duty, the Fund breached that duty, and Miller sustained damages caused by the breach. On September 18, 1997, the district court dismissed all of Miller's negligence claims, finding that Miller had failed to prove damages. Miller asserts that the Fund has a duty to settle malpractice claims only when reasonable to do so. We observe that in third-party claims, a private insurance company, in defending and settling claims against its insured, owes a duty to the insured not only to act in good faith but also to act without negligence. Farmers Ins. Exchange v. Schropp, 222 Kan. 612. However, the Fund is not a private insurance company and is not analogous in all respects to a private insurance company. For instance, unlike a private insurance company, the Fund, under the Act, is immune from bad faith liability. K.S.A. 40-3412(c). See Aves v. Shah, 258 Kan. 506, 519, 906 P.2d 642 (1995) (holding bad faith on the part of the Fund in refusing to settle a claim merely to avoid paying a large settlement does not give rise to an action against the Fund by the health care provider for damages). With certain exceptions not applicable to this case, the Act provides that it is the Fund, not the provider, which is responsible for paying any difference above the coverage of the liability insurance. See K.S.A. 40-3403(c). It is, therefore, implicit in the Act that where claims are settled within the Fund's liability limits, providers relinquish their right to prevent a settlement. To allow physicians to control the defense of malpractice claims against them and reach their own decisions to continue or to settle the action would undermine the whole purpose and the financial structure of the Act. Harrison, 241 Kan. at 181. Because the Fund had no duty under the KTCA to Miller and the settlement created no liability in excess of that provided by the Act for negligent failure to settle a claim or failure to settle a claim in good faith, Miller's negligence and fraud claims against the Fund cannot succeed. The trial court did not err in granting summary judgment in favor of the Fund.