Conn. Supreme Court Rules ‘High-Low’ Pacts Must Be Revealed

Lawyers for a Connecticut psychiatrist who was sued for malpractice should have revealed to her doctor co-defendant a secret settlement that hinged on the outcome of the trial, the state’s Supreme Court ruled.

The case centered on the death of 17-year-old Audrey Monti of Ellington, who collapsed outside the office of her psychiatrist, Naomi E. Wenkert, one day after being discharged from the intensive care unit of a local hospital. Despite Monti’s having bluish lips when she recovered — a sign of a lack of oxygen — Wenkert wrongly diagnosed the girl as having a psychological reaction to being in the intensive care unit and prescribed her a sedative, Ativan. Monti died later that night, Nov. 21, 1996, from what medical officials said was a respiratory viral infection that went undiscovered by her doctor, Mark J. Decker.

Monti’s parents sued Decker and Wenkert, and in 2005 the case went to trial.

In the midst of the trial, unbeknownst to the court and her co-defendant, Wenkert secretly entered into a so-called “high-low” agreement with Monti’s parents. The agreement was essentially a verdict-contingent settlement that would pay the parents a minimum of $300,000 or a maximum of $1 million, depending on the outcome of the trial.

The agreement acknowledged that Wenkert’s liability insurer was in liquidation in Pennsylvania and barred from paying any claims. The agreement relinquished personal claims against Wenkert and the plaintiffs agreed they would ultimately recover the sum from a reinsurer or the Connecticut Guaranty Fund.

The high-low agreement differs from a so-called “Mary Carter” agreement in which a defendant in a multi-party case secretly aligns himself with the plaintiff and works to reduce his own liability by increasing that of his co-defendants.

Monti’s parents eventually won the case against Wenkert and Decker, who was ordered to pay a total of $1.75 million. It was at that point that the existence of the high-low settlement was revealed.

Decker appealed to the Supreme Court, alleging that the agreement hindered his defense by depriving him of the chance to challenge evidence at the trial and impeach Wenkert’s expert witness.

The Supreme Court upheld the verdict of the trial court. However, it also concluded that the agreement should have been revealed to Decker, but ultimately that non-disclosure did not affect the outcome of the trial.

As a result, the court has adopted a new rule for the state: All verdict contingent settlement — such as high-low agreements — must now be promptly disclosed to the court and any non-settling defendants.

Topics Legislation Connecticut