Lesko v. Frankford Hospital-Bucks County
15 A.3d 337
| Pa. | 2011Background
- 2004: Bernath sues for medical malpractice against Frankford Hospital entities.
- 2005: Parties execute settlement totaling $6.3 million under Section 1.4.
- Sections 2.1-2.2: lump sums of $400,000 and $4,239,890 to Bernath.
- Section 2.3: $20,000 monthly payments for life, 4% annual compounding, ceasing at death.
- Section 5.0 and 4.1: Frankford reserved right to fund via annuity with New York Life.
- Bernath dies before annuity contract is executed; $1.6 million to fund annuity is questioned.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the total consideration actually unconditional? | Estate: total $6.3M is unconditional. | Agreement ties total to payment provisions; not unconditional. | Not unconditional; specific provisions govern. |
| Did Frankford have a binding obligation to fund the annuity? | Obligation to fund annuity existed via assignment option. | No obligation to purchase; option only, not duty. | No compelled funding obligation. |
| Does Bernath’s death discharge or alter the obligation? | Death should not negate the $5.9M settlement obligation. | Death ends annuity funding; payments cease and obligation adjusts. | Death ends reliance on unexecuted annuity; no $1.6M owed. |
| Can the lower courts enforce a payment term not in the agreement? | Court should enforce the promised total consideration. | Court cannot enforce term not actually in contract. | Enforcement rejected; contract interpreted from four corners. |
Key Cases Cited
- Shovel Transfer and Storage, Inc. v. Pennsylvania Liquor Control Board, 559 Pa. 56 (1999) (specific provisions govern general provisions)
- Baltic Development Co. v. Jiffy Enterprises, Inc., 435 Pa. 411 (1969) (specific provisions govern general provisions)
- Insurance Adjustment Bureau, Inc. v. Allstate Insurance Company, 588 Pa. 470 (2006) (intent of parties determined from contract language)
- LJL Transportation, Inc. v. Pilot Air Freight Corporation, 599 Pa. 546 (2009) (intent of contracting parties; contracts construed as a whole)
- Steuart v. McChesney, 498 Pa. 45 (1982) (unambiguous contract meaning determined by writing)