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AANS Neurosurgeon | Volume 28, Number 1, 2019


A Hairy Problem

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Medical malpractice law evolves from legal principles and jurisprudence present in the mid-19th century. Originally,  malpractice cases were brought under contract law theory. In such a contract dispute, the plaintiff was said to have employed a physician to cure a specific ailment. The physician’s inability or failure to successfully affect a cure (good outcome) was considered tantamount to breach of contract and therefore would entitle those injured (plaintiff) to damages. The transition to tort and negligence theories of liability began in the closing decades of the century and continues to evolve today.  Understanding pivotal cases can illuminate how we got to where we are today.

In the infamously renowned “Case of the Hairy Hand (Hawkins v. McGee (1)),” Dr. McGee asserted that with the skin graft procedure he would perform, “I will guarantee to make the hand a hundred percent perfect hand or a hundred percent good hand.” Dr. McGee’s operation consisted of removing scar tissue from the palm of Hawkins’s hand, the result of a severe burn caused by contact with electric wire. The plaintiff sued McGee alleging breach of contract and in an additional count alleged that Dr. McGee failed to perform the procedure in a proper and skillful manner, the traditional tort theory of medical negligence. Dr. McGee grafted skin from the patient’s chest and as a result of, “… his unskillfulness and negligence, the new tissue grafted upon said hand became matted, unsightly and so healed and attached to said hand as to practically fill the hand with an unsightly growth restricting the motion of the plaintiff’s hand so that said hand had become useless to the patient [.]”

A trial was commenced and Dr. McGee, with his attorney, presented their defense. Guaranty Company, Dr. McGee’s insurer, also provided counsel. At the initial trial, a jury was unable to come to agreement and a second trial was ordered. Recognizing the conflicting issues in the case, Guaranty Company issued a disclaimer that:

“…this is to notify you that in the event that a nonsuit is ordered…Guaranty Company, the insurer of Dr. McGee, disclaims any liability to reimburse the said Dr. McGee for any damages or costs awarded…based on a finding that Dr. McGee guaranteed the results of the operation [.]”

At the conclusion of testimony in the second trial, the jury found in favor of the “hairy hand” (plaintiff) on the theory that Dr. McGee’s statement, as to the outcome of surgery taken at face value, constituted a guarantee or warranty. Dr. McGee was found in breach of contract and the jury awarded $3000 to the plaintiff for damages. Regarding the second count of negligence, a nonsuit was ordered. The trial judge then found that damages were excessive and that unless the plaintiff agreed to remit all damages in excess of $500, the verdict would be set aside. The plaintiff refused and the verdict was set aside.

The plaintiff then appealed to the New Hampshire Supreme Court (2) and the jury’s verdict as regards the breach of contract count was affirmed. In general, the court recognized that physicians often form implied contracts with their patients but under the facts of this case, Dr. McGee’s assertion was a “special contract”.  A new trial was ordered to determine appropriate damages since the trial judge’s remittitur was also found to be in error. Just prior to the start of a third trial Dr. McGee notified his insurance carrier that he would settle the suit for $1400 and that he expected payment from his insurer for the amount of settlement plus his expenses. The trial court had determined that, if entitled to recovery, Dr. McGee would be entitled to receive $4,248.48 (the settlement amount plus attorney’s fees). Dr. McGee settled the suit however Guaranty Company refused to pay under the theory that the damages awarded were for breach of contract and not malpractice.

Dr. McGee then sued Guaranty Company in federal court for damages (3). Dr. McGee asserted that since the insurance company agreed to assist with his defense it essentially agreed to indemnify him against all claims. The court however held that Dr. McGee was on notice after the first trial that he may have formed a “special contract” with his patient, that he may have violated this contract and that he may NOT be liable for malpractice. The results of the second trial clearly established the foundation for Dr. McGee’s liability in contract and not negligence. As a consequence, Guaranty Company’s disclaimer was valid. Furthermore the terms of the original insurance contract clearly stated that Guaranty would indemnify its insured, “…for damages on account of bodily injury or death suffered, or alleged to have been suffered by any person or persons in consequence of any MALPRACTICE, ERROR OR MISTAKE (emphasis added) [.]” Having waived a jury trial, verdict was entered for the defendant, Guaranty Company, by the federal judge. Appeal was then made to the Federal Court of Appeals (4) where the trial court’s judgment was affirmed.

How are we to interpret the events chronicled in these cases? Although many of the factual details can be found in the court reports, they are silent as to procedural details. It is “smart lawyering” to include as many causes of action in a complaint in order to obtain a verdict. Here, the plaintiff’s lawyer pled for actions in contract and tort. Considering the circumstances of the 1920’s, more often than not, the standard of care was determined by “local standards” and required testimony by “local physicians.” According to the reported facts, the count of malpractice was nonsuited most likely because an expert physician was not able to found who would testify locally against a fellow physician. The plaintiff attorney nevertheless was astute enough to recognize the defendant’s “guarantee” as actionable and was able to show cause that a breach of contract had occurred and prevailed to the extent that the defendant settled on those grounds. What otherwise would have been considered a non-starter malpractice claim resulted in the attorney obtaining at least some reward for his client, $1400.00 or $19,766.36 in current value.  Incidentally, the attorney’s fees in 1929 of $2,848.48 when adjusted for inflation to today’s value equal $40,217.21, “smart lawyering” indeed!

Outside of historical interest, the story of Dr. McGee does not apply to physicians today but it does demonstrate the inexorable evolution of legal principles and theory. No longer are contract theories used as a basis for liability as their potential for recovery is limited. Now physicians are sued for malpractice under tort theories since subsequent legislation and tort law precedent have significantly expanded damage recoveries based on considerations of:

  • Loss of future economic earnings;
  • Future medical costs;
  • Pain and suffering; and
  • Loss of consortium, wrongful death, etc.

Not to mention the plethora of readily available plaintiff expert witnesses.

For the past fifty years, physicians have found themselves in a “bad place” and we should probably expect things to continue to worsen if the current legal process remains unchanged. Recent developments in medical practice such as clinical guidelines, clinical protocols, practice guidelines, quality assurances, electronic medical records, telemedicine, employed physicians, and the quasi corporate practice of medicine by hospitals, healthcare systems and insurers can only be expected to geometrically complicate future medico-legal considerations. Ironically, the “hairy” odyssey of Dr. McGee may not be as “hairy” as the one neurosurgeons are about to face.

1. Hawkins v. McGee 84 N.H. 114, 146 A. 641 (1929).

2. Supra footnote 1.

3. McGee v. United States Fidelity & Guaranty Co. 53 F. 2nd 953 (First Cir. 1931).

4. McGee v. United States Fidelity & Guaranty Co. U.S. Court of Appeals for the First Circuit. 53 F.2d 953 No. 2562. (Nov. 28, 1931).

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