*1 citing vanee of two eases that do not inter- temporary lieve that a moratorium is one pret provisions tool, of the MPC.12 Kline has such I respectfully dissent. made clear that the Third City Class Law
did not imply authority. such The two
cases Majority references do not at-
tempt to do what do today, interpret we the text of the MPC and ascertain the Panea, Doina PANEA and John intent of legislature to determine Wife, Appellants Husband and whether township planning boards (at 3677), use temporary moratoria to accomplish v. development coordinated promote and safety of its residents via up-to-date com- ISDANER, M.D., Neil Isdaner, Neil prehensive plans. M.D., P.C., Hospital, and Jeanes Appellees.
Finally, the Board in the instant case
argues that if it
possess
does not
the im
Shirley L.
Bell,
Bell and
P.
Thomas
plied
power
or inherent
tempo
to enact a
Husband, Appellees,
her
rary moratorium suspending subdivision
v.
development,
and
developers and landown
expedite
ers
filing
Joseph
Slezak, M.D.,
will
applica
Joseph
of their
A.
A. Sle
tions
gain approval
zak,
Ltd.,
Egleston,
before the
M.D.
L.
enact
Alan
M.D.
ment
comprehensive
Community
of the new
plan.
and Frick
Health Center.
response,
Kline,
Majority
cites to
Appeal
Joseph
Slezak,
A.
M.D.
stated, “although
which
argument
Joseph
Slezak,
A.
M.D.
entirely
merit,
not
without
it is one which
(at 2174)
Ltd.
must be directed to the legislature and not
If
legislature
courts.
wishes to
(at
Baker, Appellant
642),
Robert
authorize the
“temporary”
enactment of a
v.
or “interim” ordinance to maintain the sta
Myers, M.D.,
Donald
Sanford
tus quo
provide
it can so
by legislation!!]”
Davne, M.D., and Acromed
—
Majority Opinion,
Pa.
p. -,
Corporation, Appellees.
pp.
Kline,
A.2d at
citing
775-76
also them necessary tools to
carry objectives. out such I Because be- construction,
12. I do find it relevant that both limiting municipal Kline power to its published prior Boron Oil were to the enact- express provisions, favors the individual land Statutory ment of the construction, Construction Act of making owner. A liberal it easi 1501-1991, §§ requires Pa.C.S. made, imply power expressly er to fa liberally give us to construe statutes effect Hostettler, municipality.” Naylor vors the purpose promote justice. to their and to Township Validity Hellam: The Morato particularly considering, Development 1 find it ria on Land Pennsylva relevant Under "[cjourts Constitution, have municipal enabling construed nia 8 Widener J. Pub.L. strictly (1999). liberally. statutes both A strict *4 Axelred, Philadelphia, for Pa- Barbara nea, appellants. Smith-Delach, Washington, for
Kathleen Slezak, appellant. Kahn, Plymouth Meeting, for
Jeffrey S. Baker, appellant. Bell, Zolfaghari, Blue for Isdaner
Mark Davne, appellees. Castelli, Egle- Pittsburgh, Gregory ston, appellee. Bell, Messer, Pittsburgh, for F.
Howard appellees. Meeting, for Ryan, Plymouth F.
Daniel Myers, appellee. McEWEN, Judge, Del President
Before EAKIN, JOYCE, HUDOCK, SOLE, MUSMANNO, STEVENS, ORIE TODD, JJ. MELVIN MELVIN, pursuant ORIE J.: claimed an of this sum offset 991.1817(a) the Act. The Paneas appeals present 1 The instant common were balance settlement questions concerning proper applica- 65,578.00. totaling Septem- On $ 991.1817(a), tion non-duplication 25, 1998, ber Paneas filed Petition to recovery provision of the Pennsylvania Settlement, Enforce and PPCIGA moved Property Casualty Insurance Guaran- 10, 1998, to intervene. On November (the Act). ty Association Act 40 P.S. Honorable I. Bernstein an Mark entered §§ In the 991.1801-1820.1 first two cases denying Order the Petition to Enforce Set- parties prior reached settlement tlement, and thus the motion to intervene trial, and the insurer defendants’ was sub- Judge was deemed moot. Bernstein de- sequently liquidation into ordered before unambiguously permitted termined the Act funds were disbursed. the offset Isdaner person- and Dr. was not the third case defendants’ insurer was ally the amount ordered liable for of the offset. liquidation following into timely This plaintiff appeal verdict favor followed. granted offset was on motions post- SLEZAK, M.D., BELL No. V.
trial relief. The relevant facts of each case Pittsburgh, briefly. shall be set forth *5 ¶3 In this case the Bells instituted ISDANER, M.D., PANEA v. No. malpractice against medical action Philadelphia, Dr. Jo- 1998 seph professional his corpo- A. Slezak and ¶ 2 In appeal, the Paneas instituted ration, others, Egleston Dr. L. Alan among a civil action alleging malpractice medical alleging in negligence failing diagnose to Isdaner, against Neil M.D. and Neil Isdan- Mrs. Bell’s mechanical bowel obstruction. er, M.D., (the defendants). Isdaner P.C. supervised After court settlement negotia- Ultimately parties reached a the settle- tions, 15, 1998, January parties on the agreement ment the wherein Isdaner de- agreement reached an wherein the Bells $75,000.00. pay fendants agreed to On $200,000.00 sum of would receive the from 23, 1997, a release December was executed Slezak, limits, Dr. representing his discharging the Paneas the Isdaner $300,000.00 and Pennsylvania insurer, defendants Physi- and their Liability Medical Catastrophe Professional (PIC) Company cians Insurance from fur- (CAT Fund) Loss Fund to the extent the 21, 1998, liability. January ther prior On payments fund on of was hable for behalf funds, of payment any to of the settlement both doctors. for Dr. Counsel Slezak sent Pennsylvania Commonwealth Court of agreement to counsel for the liquidation ordered PIC into due its to Bells. The Bells executed and Pennsylvania returned insolvency.2 Property The Shortly the document. thereafter and be- Casualty and Guaranty Insurance Associa- (PPCIGA) fore tion in the insurer made disbursement stepped as to successor funds, PIC, PIC, carrier, insurer. See Dr. insurance Slezak’s insolvent P.S. placed determining 991.1803. was declared insolvent After the Paneas $9,422.00 in liquidation by received benefits the Commonwealth under their Court. Act, coverage, health Pursuant PPCIGA PPCIGA assumed 14, 2000, January Group By 2. v. PIC order dated we direct- See M. Diane Koken Insurance (filed Pa.Cmwlth.). appeals Inc., ed that these three listed consecu- 44 M.D.1998 1/21/98 tively argument for before the Court en banc. delay damages, petition Dr. Baker filed a primary insurer to PIC position him an addi- professional association. the trial court awarded his Slezak $18,162.91, judg- in a resulting total tional ¶ to PPCIGA refused $65,662.91 Myers. against ment of $200,000.00, claiming under 40 P.S. 991.1817(a) offset it was entitled 1998, PIC, Myers’ January insur- expenses paid by Bells’ medical er, the Common- insolvent and became health health insurance. Since the Bells’ placed Pennsylvania PIC Court of wealth $200,000.00to insurer had excess Myers’ de- Consequently, liquidation. Bell, it was entitled Mrs. PPCIGA claimed After the PPCIGA. fense was assumed complete offset the amount mo- verdict, post-trial jury’s Myers filed agreed pay. The filed Slezak Bells tions, he asserted entitlement wherein agree- petition enforce the settlement Act. trial provided the setoff appeal followed the trial ment. This agreed determined that Baker court provision that the offset court’s conclusion from other insur- had recovered benefits apply this case and that did ance, compensation including workers’ as written. agreement was enforceable for several sub- and medical costs benefits exceeding in an amount sequent surgeries, MYERS, M.D., BAKER V. the judgment amount of entered No. 642 EDA 1999 trial Myers. Consequently, malpractice 5 This action was medical applied the offset court 1990; instituted in March of Baker sued light to zero in Act and molded the verdict Davne, Myers Drs. Donald L. and Sanford payments made on Bak- of the insurance alleging they perfor- were negligent trial further held er’s behalf. The court spinal surgery mance of fusion and each judgment di- Baker could not enforce the *6 had failed to obtain Baker’s informed con- timely appeal rectly against Myers. This alleged Drs. Complaint sent. Baker’s followed. him Myers and Davne had failed advise experimental the new and nature of by questions presented 7 The common plates and used the sur- bone screws Panea, may Bell Baker be cases of thus, they gery, and had not obtained Bak- as follows: restated pro- er’s consent to the surgical informed (1) agreement, Should a settlement 1995, 1, cedures. December the first On unpaid at the time which remains granting trial ended with the trial court becomes insol- tortfeasor’s insurer Myers nonsuit in favor of and Davne. vent, fully without re- be enforceable appealed, Baker and this Court vacated of 40 provision the offset gard to judgment the trial court’s entered 991.1817(a), must the set- § P.S. or Myers’ Davne’s favor remanded recognize the molded to tlement be Following re- the case for a new trial. statutory offset? 1998, mand, jury on November (2) of 40 P.S. provision Should the offset Myers and Dav- finding returned a verdict 991.1817(a) applied § be a cause informed consent ne liable on Baker’s prior to its of action that accrued $47,500.00 in Baker claim and awarded effective date? trial court deter- damages. However the (3) is to the PPCI- If offset available responsi- Myers party was the sole mined GA, preclude personal it should also con- obtaining informed for Baker’s ble for payment therefore, liability of insureds sent, court molded the trial amount? of the offset that determination. the verdict to reflect Additionally, the Baker case asks us to 9 At applicability issue here is the decide: the so-called offset of the Act
(1) “Non-duplication entitled recovery,” Whether a Plaintiff who obtains a provides: damages verdict for is entitled entry judgment on the ver- Any person having a claim under an dict, notwithstanding any right of policy insurance required shall be to ex- setoff which ultimately as- haust first policy. his under such by serted PPCIGA? section, For purposes of this a claim (2) applicable, Even if whether a defen- under an policy shall include
dant who defends a claim insurance, claim under kind of estopped should asserting whether it is a first-party third-party statutory offset? claim, include, and shall without limita- (3) Whether statutory PPCIGA’s setoff tion, insurance, accident and health to payments by
extends other insur- worker’s compensation, Blue Cross and proven ance have not been to be Blue Shield and all other coverages ex- related to culpable defendant’s con- cept policies of an insolvent insurer. duct? Any payable on a covered (4) Whether claim under this act the trial court shall be reduced erred
molding recovery the amount of the verdict in favor of Dr. other upon Davne based insurance. finding its Myers responsible 991.1817(a) added). 40 P.S. (emphasis A obtaining Baker’s informed consent? defined, “covered claim” in pertinent
¶ Initially,
scope
we note our
of part,
at 40 P.S.
991.1802as:
review of a trial court’s construction of a
(1)
claim,
An unpaid
including one for
statute is plenary. Wojdak v. Greater
premiums,
unearned
submitted
Cablevision, Inc.,
Phila.
Pa.
claimant, which arises out of and is with-
(1998). Further,
A.2d 214
as this matter
in the coverage
subject
and is
only questions
law,
involves
our stan
applicable
limits of an insurance
dard of review is limited
determining
to which this
applies
article
issued
whether the trial court committed an error
insurer
such insurer becomes an insol-
*7
of law. Stone &
Ins.
Edwards
v. Com
vent insurer after the effective date of
monwealth,
Ins.,
Dep’t
276,
538 Pa.
281
of
this article and:
2,
304,
(1994).
n.
648 A.2d
307 n. 2
When
(i) the claimant or insured is a resi-
statute,
interpreting a
a court must at
dent of this Commonwealth at
the
tempt to ascertain the
Legis
intent of the
time of the insured
....
event
lature,
which can
by
be derived
read
all
ing
sections of the
together
¶
statute
and
10 The Paneas and Bells first as
conjunction
with each other and con
sert the Act
applied
should not be
to set
strued with reference to the entire statute.
prior
insolvency
tlements reached
be
Housing Auth.
County
Chester v.
application
cause its
was not within the
of
of
Com’n,
Pennsylvania State Civil Service
contemplation
parties. Specifically,
of the
(1999).
621,
556 Pa.
730
they
A.2d 935
The
argue
payment
the source of
legislative intent behind the
agreement
statute’s en
the settlement
speci
was not
meaning
applica
actment controls its
fied and not made contingent upon solven
W.C.A.B.,
tion.
Palsy
United Cerebral
cy. Consequently, application of the Act
(1996).
544,
543 Pa.
789
liability
of
the defendants’
is
preclude
parties’
reformation of the
fact whether
any showing
unliquidated
at the time of
agreement
liquidated
the absence
or
fraud,
or mutual mistake.
accident
We
no
The
Act’s
is of moment.
application
the
by this
persuaded
argument.
are not
of whether or
the
key determinant
the Act is whether
claim is covered under
argument
11
This
asks us
time
liability
unpaid
remains
ignore
litigation
the economic realities of
supra, 40
triggered.
Act
is
See
P.S.
interplay
coverage
of insurance
claim).
(definition
§
of covered
991.1802
process.
disputes
the settlement
No one
agreements
the fact that
the settlement
Statutory
12 Reference to the
liability;
how
established
defendants’
statutory
Act
a
illustrates
Construction
ever,
liability
to the extent the defendants’
remedy is
the common law.
favored over
by
is
insurer is ulti
covered
insurance the
provides:
1504
Specifically, Pa.C.S.A.
mately obligated
pay.
logical
It cannot
ly
parties anticipated
be
that all the
denied
remedy
provided
In all
is
cases where
payment
that insurance would cover
enjoined
anything
or
duty
or a
is
is
amounts.
all
The defendants
statute,
to be done
directed
paid premiums
malpractice
for their
insur
strictly
of the statute shall
directions
expected
coverage in
ance and
to have
pursued,
penalty
and no
shall be inflict-
Thus,
event of a claim.
the defendant
ed,
anything
agreeably
done
doctors are also victims of the insurers’
law,
cases,
than
common
such
further
insolvency.
recognition of the harm
necessary
carrying
such
shall be
companies
occasioned
becom
statute into effect.
ing
legislature
insolvent the
saw fit to fash
The
of this Commonwealth have
courts
remedy
by enacting
ion
this Act. The
“[wjhere remedy
is
consistently held that
provisions
triggered
of the Act are
when
assembly,
an act of
di
provided
“an
liquidation
finding
order of
legislation
strictly
must
rections
insolvency”
entered
an insurer
remedy
pursued and such
is exclusive.”
after the
date of the Act.
effective
See
Alliance,
61,
412 Pa.
Republican
Lurie v.
(definition
P.S.
in
991.1802
of insolvent
367,
(1963).
63, 192 A.2d
See also
surer).
Consequently,
triggering
Co.,
General Accident Ins.
Harcourt v.
event occurs before the
insolvent in
now
(1992),
appeal
Pa.Super.
§ (emphasis claim under the poli- defendants’ insurance cy, unpaid which remains at the time of clearly attempts 13 The Act insolvency, is considered having as “cov- protect policyholders both and those with § ered claim” under 991.1802 (defining against policyholders claims from the con claim), covered and thus falls within the sequences of insolvency of the insurer parameters (Non-duplication of 991.1817 by association, establishing an the sole recovery). purpose of is compensate which those who have claims which have not been ¶ Next, argue the Paneas also company because the insurance is insol “Non-duplication the current version of the by vent. The association is funded assess recovery” provision inapplicable is be ing against insurers, a fee all member and cause it was enacted after their cause of every required insurer is to be a member action accrued. disagree. origi We as a condition of authority its to write 1970, nal version of the Act was created in property casualty and policies. 40 P.S. under the Pennsylvania name Insurance 991.1803(a), (b)(3), §§ and 991.1808. (PIGA). Guaranty Association Penn See manner, this the risk of loss due to the sylvania Guaranty Insurance Association insolvency spread one insurer is out Act, §§ 40 P.S. 1701.101-603. The current all companies over member insurance repealed replaced version the 1970Act policyholders. their Id. at 991.1810. In 10, February became effective as of effect, every claim, pays time PPCIGA 1995.4 The Paneas assert their cause of every member company pay insurance is 3, 1993, action accrued on December ing part of the claim. The Act therefore prior therefore the version of the act must seeks to lessen the financial burden on the However, applied. the time of the un industry by preventing duplica derlying injury upon brought is suit recovery. tion of Zappala As Justice stat is not the previ determinative As event. ed in prior reference to the version of the stated, ously provisions of the Act non-duplication instant provision: “This applicable become upon liqui an order of legislature’s reflects the intent finding dation with a that an insurer is fiscally insurers, solvent which are insolvent after the effective date of the contractually obligated claim, Here, Act. PIC was declared insolvent primary payment.” source of Bethea 21, liquidation January and ordered into on Forbes, 422, 428, 1215, v. 519 Pa. 548 A.2d clearly after the effective date of the (1988). legislative Given the Hence, intent of current version of the Act. scheme, statutory plain we find the upon Paneas’ reliance interpreting cases tiffs’ repealed entitlement to the disbursement legislation misplaced, is settlement funds controlled com these longer controlling. cases are no See Rather, mon law contract principles. McCarthy Bainbridge, the extent there was insurance coverage, (Pa.Super.1999) (stating n. fact “[t]he payment nothing appellees’ constitutes prior cause action arose more than a claim against an insolvent to [the effective date of the is irrele Act] having insurer virtue of a claim exempt appellees vant and does not statute.”). tortfeasor who was insured that in- applicability of the amended *9 12, 1994, 1005, 79, 15, 19, 1996, § 4. Act of December February P.L. No. No. effective 40 137, 1, 10, 1995, February § effective as §§ P.S. 991.1801-1820. 21, 1995, by amended the Act December of
791
subrogee-”).
It
paid by
claim
the
presented
15
are next
with
We
eq-
subrogation
that
is an
light
of
well
question of whether
the
established
the
991.1817(a)
involving
legal
the
of
§
insured
uitable doctrine
of
the
of
application
or
place
take
person
may
substitution
insolvent insurer
be held
the
agreement between
responsible
the
offset. without contractual
ally
amounts
Republic Ins.
parties. Kaiser v. Old
the
of the Act
the
legislative
find
intent
We
Co.,
(Pa.Super.1999).
A.2d
result. The
precludes such an anomalous
the
granted
placing
as a
of
argue
the
are not
“It is
means
plaintiffs
that if
insureds
upon
of
the one
ultimate burden
a debt
plaintiffs
then the
will
personally liable
it,
ought
loss,
conscience
good
the
and as
an innocent who
bear
between
pays
applicable
and is
when one
generally
tortfeasor
the risk of loss
victim
obligation
or
placed
the
out of
own funds a debt
on
tortfeasor. De
his
should
the
of
argument,
payable
of
that is
from
funds
spite
appeal
primarily
the facial
the
(citations omitted).
closer
of how the Act
another.”
Id.
Since
examination
serves
recovering
plaintiffs’
precluded
the
are
from
spread
the loss belies the
Paneas
non-duplication of
plaintiffs by application
In
it is
the
contention.
fact
not
rather,
loss,
have
any
recovery provision, they
loss can
not recov-
who bear the
occurred,
paid by
the
said to
it is the solvent
ered relative
the claim
have
therefore,
subrogee;
health insurer
paid plaintiffs’
insurers who
claims under
the
insurance,
from Paneas.
the other sources of
which the
cannot recover
the
requires
Act
to be exhausted first.
¶ 17 Nor can the health insurance
each of
three cases under consider
from
carrier recover
sum
PPCIGA
plaintiffs
ation
will receive the full
because such a claim does not constitute
of
either their settlements or
pursuant
covered claim
to the Act. See
verdict,
just
necessarily
it
will
come
(definition
991.1802,
§
of “covered
P.S.
from PPCIGA the
or
doctors.
(2)
claim”),
“The term
(stating:
shall
reinsurer,
example
16 For
the case of
include
amount ... due
Paneas,
insurer,
pool
underwriting as
the settlement amount was
$75,000.00.
$9,422.00,
subrogation recoveries or oth
PPCIGA offset
sociation as
also,
paid by
erwise.”),
in
American States Ins.
Paneas’ health
see
Co.,
56, 62
Paneas
v.
Auto
721 A.2d
surance carrier
the Co. State
Ins.
$65,578.00.
similarly
(Pa.Super.1998) (interpreting
of
balance
The health insur
of
subrogation
predecessor
ance carrier cannot
stat
assert a
worded definition
1701.103(5)(b),
$9,422.00 ute,
prohibiting
against
Paneas
claim
for the
P.S.
by
Act’s
a claim an insurer
PIGA
application
because
non-
subrogation). Any other result
duplication
recovery provision
equitable
the Pa
the intention of the non-
never
under the would subvert
neas
received
sum
provision of
duplication
recovery
subrogee,
As
the Paneas’
settlement.
991.1817(a).
greater
no
Contrast this scenario with
health insurance carrier has
if PIC had re
than
held
Paneas.
would have occurred
rights
those
See what
Clarke,
have
mained
Paneas would
Pa.Super.
Ins.
solvent. The
Allstate
Co.
PIC;
(1987)
$75,000.00
1021, 1024
(stating
received the entire
"as
however,
recovery
have been
precise position
would
subrogee stands
subject
health,
subrogation
insurer’s
subrogor
subrogee
be limit
should
recovery
rights
reducing
their
recovering
subrogation
the amount
ed
$65,578.00.
Consequently,
application
subrogor relative to the
received
*10
the Act
of
the Paneas are
same not recover
offset amount from the
they
had
In
position
concluding
would have been
there
defendants.
the tortfeasor
no insolvency.
been
same scenario
of
protection
This
also could invoke the
holds true for the Bells and Mr. Baker.
of
provision,
purpose
offset
we noted the
find
personally
protect
To
the doctors
hable for
people
the Act was
had
who
the offset amount
one of
would contravene
for insurance but who did
have the
Act,
purposes
the stated
protection
of the
is “to
for which
to their
they paid due
policyholders
insolvency.
avoid financial loss to ...
insurer’s
Our Court reasoned
result of
insolvency
insurer.”
as follows:
991.1801(1).
P.S.
PIGA’s release from all finan-
Given
responsibility
cial
as a direct result of
¶ 18 Our decision
is consonant
today
unin-
appellant’s failure to exhaust his
Lines,
holding
Valley
our
with
Burke v.
appel-
policy rights,
sured
we hold that
Inc.,
421 Pa.Super.
793
paid by
If
other insur
the amount
jury
or
award exceeds
known.
damage
admitted,
or
not
established
policy
insolvent
insurer’s
limits
ance has
been
the
cap.6 Thus,
readily
evidentiary
we
can
liability
hearing
will
a
PPCIGA’s
short
necessary
the
of
a defen-
Mr. Baker
question whether
the
facts.
address
determine
personally
for the
authority
prohibits
dant can be held
liable
that
offers no
limits
exceeding
the
or stat-
mo
post-trial
in
related considerations
cap.7
utory
are com
In fact insurance issues
tions.
in
motions to add
monly
post-trial
involved
the
¶ 20
next turn to
addition
We
damages
to Pa.R.C.P. 238.
delay
pursuant
ap
the Baker
questions presented
al
in
Hellman,
Pa.Super.
See Miller
he
Baker first
is enti
peal. Mr.
contends
denied,
(1994), appeal
Pa.
against
entry
judgment
to the
of
both
tled
(1995)
(stating “[this
practice action. panel The concluded whether accidental or from natural it did not and reasoned as follows: causes, designated beneficiaries. The reading reasonable of the off- Medical malpractice liability insurance set require is to that the claim provides coverage for in- amounts the to be offset must the same loss as (i.e., doctor) sured is legally held the claim asserted against PIC. In oth- liable to others because of the doc- words, er the claim must insur- negligence tor’s own and the harm it sought protect ance that the insured caused. the same risk as was covered McCarthy, at 203. To the extent McCar- the now insurer insolvent whom thy proposition stands for the that the loss providing coverage. PIGA is That is not must be culpable attributable to conduct of the situation with present- which we are party third and the “other insurance” is Here, ed in this case. the medical mal- paying the capacity loss its of a second- practice provided by the now ary obligor, we concur with this rationale. insurance,
insolvent insurer
casualty
generally
In Daley-Sand
defined as:
v. West
Co.,
Pa.Super.
American Ins.
type
primari-
That
of insurance that is
(1989),
A.2d 965
explained
Court
ly
concerned
losses caused
interplay
subrogation
between
and insur
injuries
persons
legal liability
ance as follows:
imposed upon the insured for such
injury
damage
or for
property
to the
an
pays
When
insurer
[Blue Cross]
of others.
claim under a policy,
actually paying
it is
(5th
Dictionary,
Black’s Law
at 721
debt
the tortfeasor [Defendants].
ed.1979).
liable;
only secondarily
The insurer is
it
Here,
was re-
á verdict
the tortfeasor.
liable.
primarily
tortfeasor who is
is the
$47,500.00,and the
Baker
awarding
turned
paid
insurer has
a claim
Once the
additional
[Plaintiffs],
included
it
then stand
trial
court
insured
The Honor-
$18,162.91 delay damages.
and assert the
the shoes of the insured
DiNubile,
molded
against the tortfeasor.
Jr. then
rights
insured’s
able
J.
Victor
shoes
the offset
by applying
to stand
the insured’s
to zero
the verdict
it
and to collect from the tortfeasor once
that “it is without
provision on- the basis
repre-
insured an amount
has
received insurance
dispute that
[Baker]
*13
called the
senting
Compensa-
the tortfeasor’s debt is
under [Workers’]
benefits both
right
subrogation.
to
insurer’s
which far
surgeries
and for certain
tion
judgment
of the
en-
exceeded the amount
contrast,
In
a
insur
Id. at 969.
when life
Opin-
in
....” Trial Court
tered
this case
company pays
beneficiary
ance
ion, 2/9/99,
the offset
at 3. Baker asserts
proceeds
under a life
those
proceeds
other insurance
improper
was
because
debt.
represent
do not
tortfeasor’s
regard-
have
made
payments would
been
Rather,
the life
proceeds represent
Myers.
fault of Dr.
He notes
less of the
company’s primary obligation
insurance
injuries
any inter-
predated
that his back
Accordingly,
contract.
a life
under the
defendants and therefore
vention
insurance carrier does not obtain
compensation carrier
argues his workers’
subrogate against
recovery
in the
to
pay regardless of
obligated
was
to
malpractice
paying
action
virtue of its
par-
conduct
third
intervening tortious
pursuant
policy.
claim
to the life insurance
be correct
argument
life
ties. Baker’s
would
This is true because the
insurance
asserted included insur-
pay
being
carrier was not caused to make its
the offsets
injuries
party’s negligence;
prior
to a third
whether
payments
ment due
ance
rather,
solely
due
indem-
obligated
expenses
it was
to
in
of medical
the form
(death),
However,
happening
to the
of an event
re
the record re-
nity benefits.
gardless
Conversely,
of fault.
when an
medi-
sought recovery for the
flects Baker
second,
employer
subrogation
seeks
his
expenses
cal
associated with
Act,
Compensation
or for that
Workers’
surgeries
third and fourth
carrier, recovery
$71,000.00.9
matter a health insurance
These
totaling approximately
establishing
it was
dependant upon
is
that
alleged
in deed
to have
damages were
payments
caused to make its
due
tortious con-
resulted from the defendants’
Manu
negligence
party.
of a third
Dale
in-
Baker’s
failing
to obtain Mr.
duct
Bressi,
facturing Co. v.
491 Pa.
the trial
Consequently,
formed consent.
(1980). Consequently,
it cannot
A.2d
to
molding
the verdict
did not err
court
said that the failure to offset where
be
of the fact the other
light
zero
proceeds
of life insurance
payment consists
expenses
for medical
payments were made
recovery.
in duplicative
results
result of the defendants’
incurred as the
conduct,
payments
and these
culpable
holding
we now turn
Given this
damages awarded not-
alone exceeded
in Baker to determine
presented
the facts
indemnity
also
withstanding the
benefits
offsets were caused
whether the asserted
carrier.
compensation
paid by the workers’
culpable conduct of
paid
due to the
$3,472.90
surgery and
paid
for the fourth
post-trial motion to mold
Specifically, in the
further
counsel
treatment. Defense
averred that
related
defense counsel
the verdict
evidentiary hearing if these as-
requested an
Company
Insurance
NorthBrook
Baker
Mr.
$67,611.21
payments were contested.
third
serted
Baker’s second and
for Mr.
made.
deny
payments were
Company
did not
these
surgeries and Allstate Insurance
¶27
molding
Accordingly,
reverse the order
Finally, Baker contends the
we
Myers
only
Dr.
jury
verdict
hold
molding
the verdict
trial court erred
informed
responsible
obtaining
Baker’s
upon
finding
its
favor of Dr. Davne based
against both
consent and the
verdict
Myers
responsible for
be reinstated. None-
defendants should
obtaining
informed consent. Baker ar
his
theless,
insured
since Dr. Davne was also
delegation
duty
gues Dr. Davne’s
ap-
equally
by PIC the offset
physi
informed consent to another
obtain
liability,
to Dr. Davne’s
plicable
liability
him of
cian does not absolve
properly
of zero should
molded verdict
information not be
required
should the
entered as to both defendants.
conveyed.
agree.
We
¶29
summation,
case of
law,
Pennsylvania
28 Under
M.D.,
Isdaner,
Phila
No. 3677
Panea v.
patient’s
physician
if a
fails to obtain a
ap
trial court’s
delphia
affirm the
we
he
surgery
informed
for a
consent
991.1817(a)
and the Order
plication of
any inju
performs, that doctor is hable for
petition
Paneas’
to enforce
denying the
*14
resulting
surgery, regardless
from the
ries
Slezak,
In the case of Bell v.
settlement.
physician
negligent.
of whether
M.D,.
1998, we re
Pittsburgh
No. 2174
Zemel,
18,
Pa.Super.
R.
420
Foflygen v.
enforcing the settlement.
verse the Order
(1992),
1345,
appeal
1352-1353
M.D.,
EDA
Myers,
No. 642
Baker v.
denied,
619,
(1993);
535 Pa.
agreement which restricts the source of payment the to the insurer’s funds. Even TODD, J., dissenting. in professional liability policies certain approve an where insured must settlement ¶ respectfully Majority 1 I dissent. The terms, reality is that settlements with- cases that concludes the Panea and Bell in policy limits are assumed to be the application non-duplication of the of recov- responsibility suggest of the insurer. To Property ery provision Pennsylvania language limiting an insured must insist on Casualty Guaranty Associa- Insurance payment of source to the insurer’s (“the Act”)10 Act does not violate ba- tion would, believe, place funds I an unneces- principles. (Majority sic contract law Further, sary on the insured. to burden 788.) Similarly, in the Baker Opinion, at permit recovery of a settlement sum case, that Majority implicitly concludes in- an insured where the insurer becomes molding the verdict to reflect the offset settlement, following before solvent but a lawful- improper an interference with purposes payment, frustrates one disagree As I ly-rendered verdict. the Act. conclusions, I must each of these with dissent. McEWEN, Judge, concurring President dissenting. ¶ agreed to resolve their 2 The Paneas
¶ in return for claims Dr. Isdaner join 1 I to in the results hasten $75,000. the amount by perceptive analysis pre- achieved §§ 10. 40P.S. 991.1801-1820.
release which that ‘the effect of a release must was intended memorialize be deter agreement apparently by ordinary meaning was drafted mined from the of its ” Dr. Isdaner’s counsel and submitted to the language.’ (quoting Id. Buttermore v. signature. It 325, 328-29, Paneas’ counsel for their Aliquippa Hospital, 522 Pa. contingency provision contains neither a (1989)). of, regarding, nor discussion ¶5 cases, In these a review of each source of those funds. The release does plain language nothing releases’ reveals an integration stating contain regarding the source of the funds to be represents that the written document “the paid by physicians. Nor does it con- complete agreement.” Although release tain any contingency based on insurance PIC, insurer, physician’s as the was named Moreover, no coverage. there has been release, among numerous others any contingency regarding allegation counsel, including Dr. Isdaner’s PIC was pay the source of funds defen- not a action. party physicians’ obligations part dant was a ¶ Similarly, the Bells settled with Dr. explicit agreement parties between Slezak and the CAT fund return for a by parties and was intended to be $500,000, $200,000 payment total Thus, included the release. there are $300,000 paid by to be Slezak fraud, mutual no claims of accident or mis- by joint the CAT fund.11 The tortfea- take these cases. sor release executed the Bells contains Majority 6 The that “defen- reasons integration providing, clause “it is fur- merely asserting statutory dants are agreed ther understood and that there are extinguish to either limit or their understanding no written or oral or [sic] obligations (Majori- on the claims.” agreements, directly indirectly, connect- 789.) ty Opinion, If there is such settlement, ed with this release and however, statutory right, it is held not (Bell incorporated are not herein.” Re- physicians, the defendant but the Penn- R.85a). lease, setting Aside from sylvania Property Casualty Insurance apportionment forth the of settlement *16 (“PPCIGA”) and, Guaranty Association
funds and the CAT between Slezak above, noted neither PIC nor PPCIGA was fund, the release is silent as to the ulti- party to either of these actions or settle- paid. mate the to The source of funds ments. only contingency in the Bell release re- approval, required. ferred to court PIC ¶ Majority despite that 7 The concludes party not a to the action and
was was clause, presence integration the of an we specifically mentioned within the release. must find an unwritten term of the settle- ¶ i.e., agree agreement, parties’ 4 It is axiomatic that settlement ment the mutual understanding coverage that insurance parties ments are contracts between the paid by physician general and are to be enforced under con the amount to be fraud, principles, necessarily contemplated par- accident was tract law absent 789.) I ac- Philadelphia (Majority Opinion, mutual ties. at mistake. Clark Medicine, plaintiffs may below have College Osteopathic knowledge that physicians had insurance (Pa.Super.1997). Fundamental been aware may among principles coverage, those “is the directive even have known agreement argues prior Slezak in his brief that reached settlement 11. While Dr. (See insolvency. Ap- signed until after PIC was declaration of Brief for the release was not Slezak, insolvent, 5.) parties pellant at it is clear that the declared 5-6.) (Bell Judge Opinion, However, Trial Court coverage. I do not limits of that explain: on to went therefore conclude Caruso agree we that the insur- plaintiffs these considered that both the pattern here is The factual pay failure to would result er’s Slezak, defendant, and the plaintiffs their set- any shortage deduction arriving at were, time of at receipts. Nor can I conclude that tlement represented agreement, settlement any plaintiffs considered that such these mal- medical attorneys experienced responsi- payments not the ultimate were counsel Certainly each cases. practice physician who was bility of the defendant law, that, present be- understood Thus, agreement. whatever party to the participate fund fore the C.A.T. would expec- physicians’ unilateral the defendant settlement, must physician regarding payment by their insur- tations $200,000.00 of promise pay to the first er, simply is no evidence that there plaintiffs’ amount. the settlement understanding part of the mutual such was extracting was successful counsel parties to these agreement between promise counsel Slezak’s from defense Instead, I agreements. believe $200,000.00. pri- pay This was in- to conclude the it is more reasonable policy. limit mary of Slezak’s insurance jured they re- plaintiffs understood would fully intended that Certainly, Slezak physician’s ceive the full amount of the would be promised amount he paid di- share of the settlement whether would not be his paid by his insurer and his rectly by him or an insurer on However, this personal responsibility. physicians behalf. Had the wished plaintiffs. not the concern contingent upon make these settlements an to receive Their concern was insurer, payment by they full their certain- $200,000.00in order payment of offer of They ly could have done so. did not. fund for additional to the C.A.T. look Their concern was monies. thorough his and well-reasoned $200,000.00 only the but source of case, Opinion the Bell the Honorable payment. promise itsof Gary P. Caruso concluded: added)). (Id. (emphasis at 7 beyond reason to ask the Court [I]t the assertion Majority 9 The dismisses ignore parties, the fact that both applica- Bells that by the Paneas and the negotiated, time the settlement was against their settlement in- tion of the offset aware that Slezak was [Dr.] were reforma- represents improper primary pay- proceeds limits sured and that the *17 by $200,000.00. agreements tion of their settlement by able the insurer was awareness, sought to party that neither has However, stating nei- even with this agreements. the re- reform or to rescind party made reference to the ther 789.) view, my the at $200,000.00 Opinion, (Majority that the quirement obligations fulfilled their $500,000.00 Paneas and Bells settlement amount was to be and agreements the settlement insolvent insurer paid by Slezak’s now sought then, understandably, desired and provide that Sle- and further it did by their agreements their enforcement of relieved of obli- zak would be his/its in law for If was a basis terms. there insolvent gation the insurer became recission,12 onus was on or reformation made. payment before was out, However, point Bells instead as the opinion to whether these express I no as remedy, has relied seeking Dr. Slezak such a appropriate these cases. remedies party ther nor was a to this physicians, parties the defendant who PIC PPCIGA sought obligations to avoid their after represents action. I believe that it in- agreement had been reached and the intrusion unprecedented and unwarranted fulfilled jured plaintiffs had their obli- by judiciary inquire into a defen- thereunder, gations remedy. to seek such a in- expectations regarding possible dant’s In the absence of reformation or rescis- satisfy judgment coverage surance a sion, I physician believe the defendants accordingly if ex- and to mold a verdict full amount of the remain liable for the forthcoming. pected funds are they the in- agreed settlements sum, holding of contrary 11 In would, therefore, jured I plaintiffs. re- Majority, find that each of Philadelphia I would verse the Order Coun- ty cases, injured plaintiffs Court of Common Pleas which denied these three Appellants/Plaintiffs Petition to Paneas’ full amount of their should receive the against Enforce settlement Defen- judgment against the defen- Isdaner, dants/Appellees’ Neil M.D. and physicians. dant Isdaner, M.D., P.C., and affirm the Neil ¶ 12 Majority, Judge Orie Mel- County Order of the Westmoreland Court that Opinion, vin’s exhaustive holds granted Appel- Pleas Common already Act mandates that amounts re- to Enforce Bells’ Petition lees/Plaintiffs by injured plaintiffs ceived as health against Appellants/Defendants Settlement insurance benefits be deducted from the Slezak, Joseph Joseph A. A. M.D. The Ma- amount to be PPCIGA. Slezak, M.D., Ltd. in its jority’s prevails conclusion because case, I respect to the Baker With view, plaintiffs must viewed as these that Bak- similarly would conclude Robert Act.13 I cannot “claimants” under judgment against a er is entitled to enforce that agree Majority’s with the conclusion full amount of Myers, Donald M.D. for the provides instant Act clear “[t]he verdict, jury’s and I reverse the would remedy a loss due to the adequate Philadelphia Order of the. Court of Com- in- insolvency property casualty of a jury mon verdict Pleas which molded 789.) Opinion, at I fur- (Majority surer.” against Myers Dr. favor of Baker Majority’s implicit disagree ther with the $65,662.91 (including delay the amount of policyhold- that as conclusion between damages) to zero. Baker’s to recov- injured Act man- plaintiff, er and an adjudicated Myers er at any plain- borne dates loss be trial which rendered verdict ' presented. Nei- tiff. upon based the evidence above, validity As discussed neither the insurer upon the of the settlement in subse- PIC. quent filings any court and otherwise party acted of these nor PPCIGA was though agreement val- the settlement remains by Judge the Bell actions. As noted Caruso in respects. in all other id and enforceable case, "claimant” is not defined. the term Bell, 16.) (Brief Appellees plaintiffs did not have contractual These PIC, relationship upon nor basis Majority plaintiffs below 13. The assumes *18 against they have made a claim which could Act. are to be deemed claimants under the against only of action exists PIC. cause Their contrary, record does not reveal To the Thus, plaintiffs the tortfeasor. injured plaintiffs made claim for that the Instead, type of claimant referred to in the directly they even be the payment to PPCIGA. brought against defendant purpose have actions would and to which the Act's Act indemnity sought physicians who defense apply. insurer, coverage from their now-insolvent upon ¶ settlement reaching agreed Majority, one of by the 13 As noted amounts, successful obtain- counsel was fi- purposes is “to avoid the Act’s stated of subro- or even waivers ing compromises policyholders nancial loss to claimants interests, such a com- or whether gation insolvency of insurer.” of the an result added). in the 991.1801(1) might be reached promise or waiver (emphasis 40 P.S. the net Act, future, dramatically impacting thus of the offset The so-called actually to plaintiffs were recovery,” amounts these “Non-duplication of entitled agreements. the settlement alia, receive under “[a]ny payable amount inter provides, Indeed, statutory offset the entire this act shall be on a claim under covered waived, leading plain- thus any recovery may have been by the amount of reduced receiving the en- anticipated tiffs to have insurance.” 40 P.S. other subroga- 991.1817(a). no tire settlement amount with application of the Strict above, the As discussed Act, Majority’s rejection of tion to follow.14 mandating the may have Majority acknowledges there injured appeal, on plaintiffs’ claims settlement, rescind the us to act in contravention been basis requires thus of a possibility perhaps alluding purposes Act’s stated because one of the lien, effect, subrogation are, compromised or waived ignoring goal doing so we chose not to do so. plaintiffs below “avoid[ing] financial loss to claim- but ” Majority’s application of the Act Majority’s Again, the Certainly, .... under the ants plain- on placing Act’s in our the burden analysis, fulfilling part are results we a settlement to seek to enforce application statutory for the of its tiffs below purpose, statutory now inherent risk finan- with the “avoid[ance] [of] terms results begin i.e., forego the settlement ... setoff or policyholders,” cial loss to recovery legally anew their efforts to obtain physicians. Despite entering into directly from the doctors. agreements with the binding settlement insolvency of injured plaintiffs, due to the analysis, ap- Majority’s 15 Under the insurer, physicians the defendant are their to its terms pursuant of the Act plication now “off the hook” for the amounts parties it one of the requires penalize us to they agreed. i.e., claimants.15 Sure- purports protect, to immunize Act not intended Majority ly concludes that 14 The also physicians, cases in these policyholders, amount of re- applying a set-off liability. any personal completely from health insurance has no effect on ceived However, application the Act’s through proceeds actual of the settlement immunity has been today, such injured plaintiffs our Court realized because injured victim As between proceeds otherwise would achieved. the settlement tortfeasor, is to suffer when one subroga- and a subject to the health insurer’s I this conclusion, penalty, do believe I must a financial tion lien. With long have cases, proper one. We to be the and Bell result disagree. the Panea par- innocent between two recognized, “as negotiated prior to PIC’s settlements were by the be borne liability ... should ties insolvency. do not know whether We analysis Likewise, assuming purposes of this possibili- 15. I am we rale out the cannot injured plain- subrogation that the ty Majority could be asserted is correct that such proceeds than those other viewed as claimants. tiffs are to be here. at issue *19 possible.” standing public policy ... who of this Common- one made loss 72, Pa.Super. v. Dillabough, 448 wealth. Triffin (1996) (citation 684, omitted),
670 A.2d
550,
(1998).
552 Pa.
aff'd Fillette,
Accord v. 503 Pa. Rothman (1983); Rykaczewski Kerry
Homes, Inc., Pa.Super. (1960). public policy It is not sound negligent
make the victim of conduct
for the tortfeasor’s unfortunate choice of public
insurance carrier.16 I believe the supports of this Commonwealth by that the risk of
conclusion loss caused physicians’ company by injured physicians, by borne Gwendolyn PHILLIPS, Administratrix negligence. victims of their Robyn Jorjean of the ESTATE OF ¶ Finally, I note that the result Gwendolyn WILLIAMS, Deceased, Majority may reached lead to ab- Phillips, Administratrix of the Estate results, plaintiffs Deceased, surd who suffer more Campbell, of Jerome I. physical injuries, serious and who there- Gwendolyn Phillips, Administratrix of fore receive more extensive medical treat- Alphonso Crawford, De the Estate of greater ceased, Williams, ment and thus medical insurance Neil A Curtis Minor benefits, By Friend, may ultimately receive less cash His Guardian and Next Gwendolyn compensation agreed upon Phillips, Appellants, from their set- physicians plaintiffs than tlements with physical injuries. with less severe This is result anomalous could have LIGHTERS, Match, CRICKET Swedish legislature.
been intended S.A., Company, Pinkerton Tobacco Group, Inc., Pinkerton Pinkerton reasons, 17 For these additional I re- Group, Inc., USA, Cricket t/a d/b/a spectfully dissent. S.A., B.V., Poppell, Cricket Wilkinson Majority Sword, 18 As the has concluded that Inc., Cricket Wilkinson Sword/ Inc., today Corporation the result reached it is the one And NDC National Act, required legisla- Development Corporation I urge under the Shenan t/a Associates, go Man ture to revisit the mandates of the Act Park DNC Asset Inc., agement Inc., Regional light purposes long- of its stated Sales Indeed, claim, by Majority event of a the insured retains sav- the result reached encourages possi- cheapest the choice of the ings premiums passes the loss to PPCI- premium regard ble without to an insurance injured party. GAand the since, company's financial soundness