David Zeller was worth more alive than dead. Sounds like a bad plotline, but that’s essentially the city’s argument in what was a disappearing malpractice settlement.

Zeller was rendered paraplegic at age 53 after seeking treatment at San Francisco General Hospital in 2012. He sued, alleged malpractice and eventually agreed to settle the lawsuit for $1.5 million — with $900,000 coming from the city and $600,000 from the University of California system, which employs the doctors at San Francisco General.

That should have been the end of a horrific saga, but Zeller committed suicide in March — four years after being paralyzed — and as a result, the city says it won’t honor the proposed settlement.

On Thursday, the Board of Supervisors’ Government Audit & Oversight Committee voted to reject it on the advice of the city attorney’s office.

Zeller’s attorney accused the city of reneging on a good-faith settlement. The city, though, argued that Zeller’s death fundamentally changed the case. Namely, the bulk of the settlement money was to pay for Zeller’s long-term medical care. And now that he’s dead, those future medical costs go away.

Zeller was taken to San Francisco General Hospital in an ambulance on March 16, 2012, because of severe back pain and weakness and numbness in his legs.

In his lawsuit, he alleged that he was “pushed and shoved” from a gurney to the MRI table, instead of staff using a slider board, “causing disk material to be pushed into his spinal canal” and leading to paraplegia. It also says his doctors didn’t order neurological monitoring and spine precautions as they should have.

Legally speaking, plaintiffs in medical malpractice cases can’t be awarded more than $250,000 for pain, suffering and emotional distress under a 1975 state law.

The proposed $1.5 million settlement with Zeller doesn’t detail what the money is for. Zeller’s attorney, Carter Zinn, said his client is owed that money, even if he’s dead.

Zinn said he would have gone to trial if he had thought the city would renege on the settlement agreement.

And, he added, “This settlement brought peace to David. He felt they were taking accountability for what happened. He’s not here physically to feel cheated by this, but spiritually this has to do with letting him rest.”

Closest relative

If paid, the bulk of the settlement money would go to Zeller’s closest living relative, a nephew, Michael McCowan, 54, who lives in San Diego and hadn’t heard from Zeller in the 38 years before his death. Zinn tracked McCowan down after Zeller committed suicide.

McCowan said he will use the money to create a scholarship fund at Zeller’s alma mater, Indiana University. “I’ll never know David,” McCowan said. “The best I can do is try to do something that would have meaning to him.”

Zinn, as the attorney, stands to receive a percentage of the settlement, meaning he has a financial stake in the dispute. He rejected the image of him as money-hungry. He said he owns a small legal firm and budgeted believing the money from the settlement would be paid.

Matt Dorsey, a spokesman for the city attorney’s office, said its lawyers “have a fiduciary duty to San Francisco taxpayers to recommend settlements that reflect the law and that appropriately compensate the appropriate party.”

In emails provided by Zinn, Mark Lipton, a deputy city attorney, was more caustic.

“The city owes no contractual obligation to decedent, his heirs, if any, or your firm,” Lipton wrote. “As we have advised you, it appears that this will be a circumstance where the proposed settlement will not be approved. In sum, there is no settlement to enforce.”

New negotiations

This isn’t the last chapter. The city and McCowan, with Zinn as his attorney, will enter into new settlement negotiations in July. If they fail to come to an agreement, Zinn said he would sue the city for breach of contract.

Emily Green is a San Francisco Chronicle staff writer. Email: egreen@sfchronicle.com Twitter: emilytgreen