The insurer of a now-bankrupt Georgia nursing home is not required to pay $2.1 million in damages to the family of a woman who died at the facility, a federal judge has ruled.

US District Judge Mark T. Treadwell ruled Friday that Ironshore Specialty Insurance Co. is not responsible for a 2023 state-court verdict, which ordered the insurance company to pay damages to the family of Mary Francis Logan. 

In October 2014, Logan was a resident of Macon Rehab, a long-term care facility in Macon, GA, when her family alleged she fell and fractured her hip as an employee of the facility was moving her to the shower. 

Logan died two years later, and her children filed a personal injury lawsuit against the nursing home and its parent company, 4 West. In March 2018, both 4 West and Macon Rehab filed for bankruptcy in federal court. Ironshore was the liability insurance company for 4 West and the nursing home at the time of the alleged incident. 

In his ruling, Treadwell, of the US District Court for the Middle District of Georgia, noted that the family agreed to settle their claims with 4 West and the nursing home. Despite this settlement, the family continued to pursue a trial against Ironshore and won a $2.1 million verdict in state court against the insurance company.

The judge ruled the insurance company was not responsible for the damages because the family had released the insured parties from liability when it reached the settlement agreement three years earlier, the insurance policy did not cover fines or penalties such as default judgments, and Ironshore was not informed of the state court trial, thereby “substantially prejudicing Ironshore.”

“Under the plain language of the policy, Ironshore is not contractually obligated to pay unless 4 West has a legal obligation to pay a covered claim,” the judge wrote in his ruling. 

“Because the Logans released 4 West from any and all manner of actions, cause and causes of action … 4 West is not legally obligated to pay the judgment,” he continued.. “Because 4 West is not legally obligated to pay the state court judgment, neither is Ironshore.”