A federal judge in Georgia has ruled that Ironshore Specialty Insurance Co. is not required to pay a $2 million personal injury judgment obtained against a nursing home, concluding that the plaintiff’s family relinquished their claims when they accepted a settlement during the facility’s bankruptcy proceedings.
In a decision granting summary judgment to the insurer, U.S. District Judge Marc T. Treadwell determined that the family of Mary Francis Logan could not pursue payment from Ironshore after agreeing to a $5,000 settlement tied to the nursing home’s Chapter 11 reorganization. The court found that the release signed as part of that settlement barred further recovery efforts connected to the same claims.
The dispute traces back to a 2014 incident at Macon Rehabilitation and Healthcare Center LLC, where Logan fractured her hip. She died two years later. Although her death certificate listed multiple medical conditions, her family alleged that negligence at the facility contributed to her decline and shortened her life expectancy. They filed suit in 2016, asserting claims including negligence and battery.
At the time of the lawsuit, the nursing home was insured by Ironshore, which retained defense counsel on the facility’s behalf. In 2018, during the ongoing litigation, Macon Rehab entered Chapter 11 bankruptcy. As part of the reorganization plan, creditors established a $2 million fund to resolve outstanding tort liabilities. The Logan family accepted $5,000 from that fund in exchange for releasing their claims.
Despite the settlement, the family continued to pursue the injury lawsuit. According to court records, the case proceeded without the nursing home’s participation. Defense counsel withdrew after payments ceased, and the insurer said it was not notified of subsequent developments. The court ultimately entered a default judgment of approximately $2.1 million in favor of the family.
The Logans then sought to collect $1.1 million of that judgment from Ironshore, prompting the insurer to file a declaratory judgment action in the U.S. District Court for the Middle District of Georgia. Ironshore argued that the settlement and release extinguished any obligation under the policy and that the default judgment did not represent a covered loss.
Judge Treadwell had previously indicated that the judgment was not covered under the policy but stopped short of issuing final judgment. In the latest ruling, the court made that determination official, concluding that the release was clear and enforceable. The judge stated that the family voluntarily chose to settle their claims during the bankruptcy and could not later attempt to recover additional sums from the insurer tied to the same allegations.
The court also rejected arguments that Ironshore had forfeited its ability to rely on the release because the nursing home did not assert it as a defense in the personal injury case. The judge distinguished between the facility’s litigation strategy and the insurer’s separate contractual defense under the policy.
Counsel for the Logan family said they were disappointed with the decision and are evaluating next steps. Representatives for Ironshore did not immediately comment.
The ruling ends Ironshore’s involvement in a prolonged legal battle that combined elements of personal injury, bankruptcy, and insurance coverage law. The case is Ironshore Specialty Insurance Co. v. Logan et al., pending in the Middle District of Georgia.
