Dr. Mohan Papudesu was a defendant in a wrongful-death lawsuit. His insurer, Medical Malpractice Joint Underwriting Association of Rhode Island (MMJUA), settled the case for $500,000. Dr. Papudesu objected to the settlement because he believed he would win at trial, because the settlement adversely affected his reputation and caused his malpractice insurance premiums to rise. MMJUA asserted that it had unfettered discretion to settle the case and pointed to the following policy language as support for its position: “[t]he company may make such investigation and settlement of any claim or suit as it deems expedient.”

Dr. Papudesu filed suit against MMJUA, and the trial court in Rhode Island agreed with MMJUA that its actions were proper. The Rhode Island Supreme Court, in Papudesu v. Medical Malpractice Joint Underwriting Association of Rhode Island, concluded that the above-referenced language is: “of pellucid clarity; it vests full discretion in the insurer with respect to the issue of settlement.”