After a record price for malpractice, the Coralville clinic files for bankruptcy

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An Iowa medical clinic facing a multimillion-dollar malpractice judgment has filed for bankruptcy.

In March, a Johnson County jury awarded more than $97.4 million to the family of a boy who suffered severe brain damage during birth at an Iowa City hospital.

The boy’s parents, Kathleen and Andrew Kromphardt, had sued Mercy Hospital of Iowa City and Obstetric and Gynecologic Associates of Iowa City and Coralville as defendants, along with Dr. Jill Goodman, one of the clinic’s directors. Coralville.

The Kromphardts claimed their son’s brain damage was caused by the failure of medical staff to respond properly to signs that the baby had been deprived of oxygen in the hours before he was born in August 2018.

The boy, now 4, is unable to walk on his own and is largely unable to speak. At trial, the family’s attorney argued that the child will likely need 24-hour care for the rest of his life.

The jury award in the case is believed to be the largest medical malpractice judgment in Iowa history.

Court records indicate that the jury found that Mercy Hospital and the Coralville Clinic were each 50% responsible for the case.

But following a pretrial agreement between Mercy Hospital and the Kromphardts, the hospital’s liability was capped at $7 million, which the hospital paid shortly after the trial ended.

This left the Coralville clinic liable for the rest of the compensation – although there is a dispute over how much this liability should be.

Under Iowa law, if defendants are found to be 50% or more liable in a civil case, their share of the total liability for economic damages and non-economic damages is treated differently.

Kromphardts’ attorney took the position that the Coralville Clinic’s total liability in this case is now $75 million, while the clinic’s attorneys took the position that the clinic is liable for approximately $45 million, or half of the hospital’s once $97 million. The $7 million payment is subtracted.

On Monday, the clinic filed for bankruptcy, citing the $97.4 million total judgment in the case as a claim against the company.

Court records suggest the jury’s decision is the sole reason for the bankruptcy: Only six other creditors of the clinic are listed in the bankruptcy filing, and their claims are minimal, ranging from $243 to $37,043.

The clinic’s three directors and shareholders are Dr. Goodman, Dr. Lori Wenzel and Dr. Jami Shepard.

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