Fresno Co. monitoring for disruptions after massive malpractice judgment vs. American Ambulance

FRESNO, Calif. (KFSN) -- A judge has reduced by more than 65% the massive medical malpractice jury award to a Kingsburg family for life-changing injuries suffered by a father of two while being transported by American Ambulance.

California's Medical Injury Compensation Reform Act forced the judge's hand as she cut the judgment from $49.8 million to about $17.3 million.

But even with the limits on medical malpractice judgments set by a 1975 law, there's concern this judgment could impact emergency medical services in Fresno County.

Nicholas Merlo has lived in a persistent vegetative state since March 2018.

A jury decided American Ambulance was to blame because a paramedic removed a breathing tube and couldn't replace it while transporting Merlo.

He could still live for decades, but doctors believe he's badly brain-damaged and he'll never regain consciousness.

"The goal is to get Nick Merlo into a better care facility so he gets better care for the rest of his life," said plaintiff's attorney Warren Paboojian, whose firm represented the Merlos.

The jury awarded almost $50 million to Merlo and his wife, who was 8 1/2 months pregnant when her husband lost consciousness.

A judge reduced it to about $17.3 million Thursday, mostly because of the Medical Injury Compensation Reform Act.

But even at that amount, the Merlos' attorney says American Ambulance may be in a financial bind.

"American Ambulance's insurance company has abandoned them and is forcing American Ambulance to make some serious decisions," Paboojian said.

He fears bankruptcy could be one of those decisions.

American Ambulance chief administrative officer Erik Peterson confirms there's a disagreement with their insurance company over coverage, but says the company will continue serving the community.

"This process is far from over," Peterson said in an email. "American Ambulance has no plans to seek bankruptcy and many options are available to us as we proceed, including the appeal. We will continue serving this community as we have for almost 50 years."

The ambulance company's insurer is Coverys.

"It is company policy to not comment on active litigation or disputes that may result in litigation (including appeals), but that we honor our commitments to our insureds that are made via the terms of our insurance policies," a Coverys spokesperson told us in an email.

Fresno County emergency medical services director Dan Lynch told Action News county administrators are monitoring the case, but they don't anticipate any disruption to ambulance services.

"County EMS has been aware of and monitoring this case as it has progressed," Lynch said in an email. "These kinds of personal injury cases often involve a great deal of negotiations after a judgment is handed down as to exactly how payment is made assuming no appeal from the judgment is taken. American Ambulance has provided assurances that this judgment will not affect its ambulance operations. The County is closely monitoring this situation and will be prepared for any eventuality, but at present, County EMS does not anticipate any disruption to ambulance services."

Paboojian is also frustrated by the 46-year-old law -- the Medical Injury Compensation Reform Act -- limiting pain and suffering awards to $250,000 in medical malpractice cases, costing the Merlos $29.5 million in this case.

"If your legs are mistakenly amputated, both of them, it's $250,000," he said. "If you're blinded, it's $250,000. That has not changed since 1975."

California voters will have the option to change that so-called MICRA law on the November 2022 ballot, but a similar ballot measure failed in 2014.