*1 BORDLEMAY, Delores Executrix of Bordlemay,

the Estate of Wanda

Deceased, Appellant PLANS, HEALTH

KEYSTONE

INC., Appellee.

Appeal Bordlemay. of: Delores

Superior Pennsylvania. Sept.

Submitted 2001.

Filed Dec.

JOHNSON, J. (Executrix), ex- Bordlemay 1 Delores Bordlemay of the Estate of Wanda ecutrix (Decedent), grant- from the order appeals summary judgment ing (Keystone). Plans Health holding that the trial court erred claims collaterally estopped that she was as a result of against Keystone proceeding action and treating physicians. her verdict favor of trial court claims that the Executrix also for granting Keystone’s motion erred negli- her claims of summary judgment on Key- misrepresentation against gence trial court conclude that the stone. We in grant- did not err or abuse its discretion motions. For summary judgment reasons, trial following we affirm the summary judgment granting order court’s Keystone. favor ¶2 1985, Decedent en- In November plan through Keystone’s rolled in February employer. her From saw her January Decedent through increasing for primary physicians right leg in her lower swelling pain misdiagnosed physicians Her and ankle. finally ailments and variety her orthopedic specialist referred her to ordered a January specialist 1987. The a soft imaging test that revealed diagnostic found to be that was later tissue mass Unfortunately, amputation cancerous. proved to be leg chemotherapy unsuccessful, May and Decedent died twenty-eight. age 1989 at ¶3 filed a August In Decedent Harrisburg, ap- for Angina, Richard C. treating physicians. against her complaint pellant. January In Decedent commenced Yaninek, Snyder, D. F. Steven John reim- against a number of HMO Yaninek, Mette, Evans & Doyle Kathleen agreed who later systems bursement Woodside, Harrisburg, appellee. defen- appropriate Keystone would be In after Decedent’s SOLE, May dant. Judge, DEL Before President death, cases named both JOHNSON, CERCONE, JJ. changed to THE IN Executrix. October ISSUES EACH CASE complaint against Executrix filed a DIFFER- WERE MARKEDLY that contained the five ENT? (I) (II) liability; counts: vicarious direct DID THE ERR TRIAL COURT IN (III) (IV) negligence; corporate liability; *3 GRANTING SUMMARY JUDG- (V) fraud/misrepresentation; breach MENT TO PLAINTIFF’S CLAIMS 1992, In September of contract. Executrix OF NEGLIGENCE AND MISRP- filed a motion to consolidate the two cases RESENTATION, WHERE THE Keystone objected. to which trial The DEFENDANT HEALTH PLAN court denied consolidation. A re- WAS NEGLIGENT INDEPEN- treating turned a verdict in favor of the DENT OF THE CONDUCT OF physicians, which was affirmed THE PHYSICIANS AND WHERE Pennsylvania Supreme Court. The THERE A THE WAS DUTY ON petition appeal. denied the for allowance of PART THE OF HMO TO DIS- ¶ 1995, CLOSE FINANCIAL INCEN- 4 In against while the case TIVES? appeal, Key- was on summary judg- stone filed a motion for Appellant Brief for at 4. ment. The trial judgment court deferred ¶ reviewing questions When pending the mal- appeal of medical summary judgment, our standard of re practice against treating claim physi- view is well settled: In September Keystone cians. filed light We view record most summary judgment. a motion for The tri- non-moving party, favorable to the granted summary al court judgment as to genu- to the existence of a doubts as liability, liability, the vicarious ine issue of material fact must be re- and breach of contract counts based on against moving party. Only solved estoppel arising collateral from the medi- genuine as to where there is no issue cal In malpractice case. November fact and it clear that the material Keystone summary filed motion for moving party judgment is entitled to a

judgment regarding remaining counts summary judg- as a matter of law will fraud/misrepre- of direct scope ment be entered. Our of review granted sentation. The trial court the mo- granting deny- of a trial court’s order tion based on the lack of a causal connec- ing summary judgment plenary, tion between and actions of our standard of review is clear: the trial Keystone and the harm suffered Dece- only court’s order will reversed dent. appeals. Executrix now it is the court where established presents 5 Executrix is- committed an error of law or abused its for our sues review: discretion. 1. DID THE TRIAL ERR COURT IN Pappas v. Asbel 564 GRANTING SUMMARY JUDG- (2001) (citations omitted). 1089, 1095 THE MENT ON BASIS OF COL- ESTOPPEL, issue,

LATERAL WHERE her first Executrix THE in apply THE DEFENDANT IN IN- claims that the trial court erred estoppel Keystone ACTION collateral in favor of STANT VIGOROUSLY based on the verdict in favor of the treat OPPOSED CONSOLIDATION mal ing physicians THE CASE AGAINST THE WITH practice AND case. Brief for at 13. TREATING PHYSICIANS the ben- against may him be refused claim specifically claims Executrix arising from a determi- may apply preclusion to her claims preclusion efits trial in the in the plaintiff because the issues nation adverse differ and because two cases the other defendant.” involving with the medi- Note Reporter’s contested the consolidation (quoting (Second) cal case. Brief for Judgments to Restatement e). at 16. ignores comment the rest of the comment e and language of 29 of the 8 Executrix relies on Section restricting which focus on Reporter’s Note (Second) Judgments Restatement than a defendant rather claiming Keystone fought her because conclude estoppel. We asserting collateral actions, Key- attempt to consolidate the *4 29, that, Keystone may under Section even from stone should not be able to benefit if estoppel, applicable, from still benefit estoppel. at collateral Keystone was never a co-defen- because notes, Keystone aptly Executrix 15. As action, as malpractice dant in the medical any Pennsylvania ap- not cite cases does to Reporter’s the Note required under Appellee 29. Brief for at plying Section e, merely objected to comment but instead regulates the use of collat- Section of the cases. consolidation estoppel subsequent litigation that eral parties does not involve only estoppel applies ¶ 9 Collateral original litigation: are met: if the five conditions Subsequent § 29 Issue Preclusion (1) prior decided in the case the issue Litigation with Others presented to one was identical A party precluded relitigating an case; later opposing an in accor- party, issue with (2) judgment a final there was § pre- dance with 27 and also is merits; doing per- cluded from so with another (3) plea whom the party against son unless the fact that he lacked full privity or in party asserted was litigate fair opportunity and the issue case; prior party with a to the in the first action or other circumstances (4) doc- ... whom the him justify affording opportunity full and has had a trine asserted circumstances relitigate issue. The the issue opportunity litigate fair given to which considerations should be prior proceedings and §in include those enumerated prior pro- in the the determination also whether: judg- to the

ceeding was essential ment. (3)The person seeking to invoke favor- Zoning Adjustment, Bd. Pittsburgh v. avoid preclusion, able or to unfavora- (1989). 896, 901 could have effected preclusion, ble joinder in the action between first does not contest elements 10 Executrix adversary. present himself and his necessary estoppel 3 and 5 collateral (Second) Instead, Executrix claims apply. § 29. Judgments Restatement present in the would be raised following language many issues relies on the Executrix in the medical litigated not case that were Note to Section com- Reporter’s of the at case. Brief for analysis, ment a similar a co-defen- e: “On provided not claims that she was 16. She dant in the first action who has succeeded quali- litigate the overall opportunity of the trial of obtaining severance ty argüe Key- of her medical care or trial court on the issue of HMO’s decisions). stone’s structure and incentives caused based on its treatment Execu- Decedent’s harm. Brief for trix on v. Health relies McClellan Mainte- 17-18. Organization Pennsylvania, nance Pa.Super. 604 A.2d 1053 ¶ However, we are unable to discern (Pa.Su- McNulty, Shannon v. 718 A.2d 828 from Executrix’s brief reasonable ar- per.1998) applicability to assert the of Sec- gument relating (Second) tion 323 of the Restatement necessarily depend HMO that would not However, Torts to HMOs. McClellan and finding physicians’ care to be sub- easily distinguished are both Shannon standard. We conclude the issue of McClellan, from the case at hand. the treating physicians’ negligence was grant of a demurrer Court reversed the fully litigated by raised and alleged that the plaintiff where the medical malpractice action and reasonable “duty breached its use physicians’ negligence pre- is a retaining primary selecting requisite Keystone’s to consideration of physicians” result “was negligence and contract. breach of Addi- treated, timely diagnosed resulting tionally, Keystone appropriately avoided in her death.” 604 A.2d at 1059. Howev- *5 consolidation with the medical er, case, present negligence unlike the case to which it had not been named as a at issue in doctors was still McClel- Therefore, defendant. we conclude that lan and thus whether the HMO used rea- the trial court did not err or abuse dis- its selecting physicians sonable care in its was cretion when it estopped found Executrix Shannon, also at In this Court issue. granted summary judgment on counts (vicarious reversing remanded for a trial after a new I liability), (corporate III liabili- (breach contract). on grant of non-suit to the HMO based ty) and V HMO, allegation through that the its tria- ¶ issue, 12 In her second Executrix line, ge nurse had failed to exercise rea- claims that the trial court erred in grant Executrix plaintiff. sonable care to the (direct ing summary judgment to counts II by any comparable does not assert negligence) (fraud/misconception) and IV Keystone. II, complaint. of her Executrix count that alleges Keystone is liable because De ¶ case, present 14 In Executrix plan cedent was enrolled its health that allege any by fails to treatment decision placed patients opposi the health of its Keystone that resulted in her harm. In tion to the financial benefit of physi stead, Keystone that Executrix claims (referenc cians. Brief for at 20 care in the failed to exercise reasonable ing Paragraphs Complaint). 93-110 of the formulation of its re rules sys gard physician to its reimbursement recently that 13 We note the United tem, result, risk and that as a Decedent’s Supreme Pennsylva and our States Court at of harm increased. Brief for Supreme spoken nia have is, essence, attacking Pegram v. 20. Executrix liability. HMO See Herdrich, 2143, 147 system, attempts provide 530 U.S. 120 S.Ct. HMO which to reduce (holding physicians L.Ed.2d 164 that treatment financial incentives by by decreasing care preempted decisions of HMOs are not the costs of health Asbel, ERISA); Pe Pappas see also 564 Pa. utilization of health care services. See (reversing grant gram, 530 at 120 S.Ct. 768 A.2d 1089 U.S. Court, is summary judgment remanding legislature, to The rather than this merely requires that social, methodologies and to debate the venue appropriate written provided upon information be raised such and moral considerations ethical 991.2136(b)(8). 40 Pa.S. system. request. See id. See the HMO incentive McClellan, Decedent 2143; allege see also does not 120 S.Ct. Additionally, Exec- request. conclude that A.2d at n. 6. We such a ever made act any negligent require claimed utrix has not does specifically the section beyond provides the fact that or the contracts of “individual disclosure pro- arrange- to ration the physicians incentives for financial specific details incen- care. Because such a vision of health managed plan between ment recognized structures have not been tive conclude Id. We provider.” health Penn- under as a basis as to an spoken has legislature that the law, the trial we conclude sylvania of their duty to disclose details HMO’s summary granting court did not err In view of physicians. contracts with direct judgment on Executrix’s request disclosure failure to Decedent’s (b)(8), count. we conclude to clause pursuant to disclose not have a Keystone did IV, Executrix asserts 15 In Count Executrix bases information on which committed fraud as a result Therefore, conclude we her fraud claim. information con of its failure to disclose in granting did not err that the trial court phy Decedent’s cerning its contracts with Keystone on Execu- summary judgment to at 21-22. Ex sicians. fraud/misrepresentation count. trix’s following language ecutrix asserts that the reasons, af- material we Keystone’s promotional foregoing For granting incentives misrepresentation light of the of the trial court firm the order physician con all counts. summary judgment to ration care under the *6 Keystone: your “with doctor tracts with ¶ AFFIRMED. 18 Order receiving prepayment manage your Plan to health care Health ¶ CERCONE, Concurring a J. files services, delay a ser there is no need to Statement. afford it. It frees you vice because can not Emeritus, CERCONE, Judge President financial you your and doctor of all these Concurring. R. 28a. Executrix claims concerns.” a to disclose all materi Keystone had ¶ my reasoning of join 1 I in the erudite person making to a important al facts colleagues with distinguished learned and enroll regarding informed decision HMO analysis of the issues to their respect at 22. She Appellant ment. Brief for in all re- by Appellant/Executrix raised includes de that such information asserts my col- agree I one. spects but financial incentives. the doctors’ tails of the claims of leagues at 21-22. are for vicarious against Keystone jury’s ¶ virtue of the collaterally estopped correctly notes that 16 Executrix Appellant’s prior verdict enumerate specifically Act does not HMO It negligence. for Brief for her required disclosures. possible course, a cannot is, axiomatic 40 Pa.S. quoting its the acts of vicariously hable for 991.2136(a). held However, appar- agents or when its (b)(8) employees agents to note that clause ently failed have been found not to were employees is- addresses the specifically same section Appellant’s agree I also negligent. reimbursement the disclosure of sue of treating physicians] claim contract removed properly [the for breach of have expressly physicians; dismissed since was founded as HMO allegation that the decedent’s treat- (d) truthfulness of faffing verify ing physicians provided incompe- her with treating physi- information which [the care in tent and substandard breach of the in their provided to the HMO cians] terms of contract between decedent as applications for enrollment HMO Keystone. Appellant’s Complaint, and See physicians; and 10/19/1990, jury’s prior filed at 163. The (e) enrolling, marketing, and hiring, treating physi- that the finding decedent’s as using treating physicians] [the negligent were not therefore bind- cians inci- physicians despite repeated prior ing on this as well. professional malpractice dents of part physicians. of the aforesaid however, 2 I agree, cannot that Count (f) Appellant’s complaint against Key- III of promulgating implementing stone, theory corpo- which is based on procedures which dis- negligence, entirety courage adequate testing, rate was barred its estoppel. the doctrine of collateral consultation, and evaluation to Appellant’s complaint provid- count of This detriment of its enrollees.

ed in relevant part: 10/19/1990, at Appellant’s Complaint, filed ¶ 136(a)-(f) supplied). [Appellee] Keystone (emphasis Health Plans, Inc. corporately liable to the Supreme 3 Our Court has summarized injuries alleged for the above theory corporate negligence as fol- negligence, gross negligence, lows: conduct, misconduct, outrageous

wanton Thompson Hospital, Nason [v. and reckless intentional disre- and/or 591 A.2d 703 this Court ] gard being safety for the well theory that a adopted corpora- first [Appellant] in: tion, can be held specifically hospital,

(a) enrolling, marketing using directly negligence. ex- liable for We physi- treating physicians] [the as HMO plained concept corporate negli- having compe- cians without verified the gence follows: physicians through tence of the an ade- *7 un- Corporate negligence is a doctrine education, quate investigation into their it hospital der which the is liable if training, experience, prior acts of uphold proper fails to the standard of professional malpractice; patient, care owed the which is to (b) patient’s safety ensure the and well- failing to have instituted effective being hospital. while at the This the- procedures compe- for the selection of a ory nondelegable of creates as qualified tent and doctors HMO duty hospital directly the owes which physicians, procedures minimally such a patient. to investigation an into the edu- requiring cation, training, experience, 339, 527 Pa. at 591 A.2d at Thompson, professional malpractice acts of has Thompson, hospital 707. Under a physicians; the duties:

(c) duty an a use reasonable care failing to have instituted effec- to adequate designed to the maintenance of safe and quality program tive control (2) duty to equipment; facilities and a periodically review and assess com- phy- only competent so to select and retain petence physicians, of HMO as 755 sicians; (3) ardship Specifically, of care. while duty per- a to oversee all their practice not medi- providers who these do practice sons medicine within cine, daily care; they as a do involve themselves patient walls to formulate, affecting their subscriber’s duty adopt to enforce decisions may, These decisions adequate rules and to ensure medical care. others, length hospi- of among limit quality patients. care for the of specialists, restrict the use stays, tal (citations 339-40, at Id. 591 A.2d 707 care, re- hospital or limit prohibit post omitted). prevent ren- therapy, access or strict to duty uphold proper Because the room While dering emergency of care. directly standard care runs laudatory these are for the all of efforts hospital injured party patient, costs, containing health care purpose a rely negligence need on made to limit a sub- when decisions are nurse, third-party, as a doctor such or treatment, that deci- scriber’s access a corporate establish cause of action in rea- pass must the test of medical sion Heistand, Pa. negligence. Moser v. To hold otherwise would sonableness. (1996). A.2d deny effect of the provid- be to the true Instead, negligence is based corporate actions, namely, and di- dictating er’s institution. acts of negligent medical care. recting the subscriber’s A 'corporate Moser. cause of action for policies, arises from ac- providing health HMO Where tions inaction the institution itself provid- than merely care services rather specific rather than the acts of individual money to for their con- pay services Thus, hospital Id. employees. under subject scrutiny. We duct should be theory, directly corporation a held applicable no reason why see duties hable, hable, as opposed vicariously ap- hospitals equally should not for its own acts. neghgent when HMO is plied to the same or similar functions performing Bulger, v. Welsh 698 A.2d (1997). hospital. provider, a a When benefits a care managed be it an insurer or ¶ 4 In McNulty, Shannon interjects organization, itself into (Pa.Super.1998) our explicitly affecting rendering of medical decisions theory negli- extended the of corporate it must in a a do so subscriber’s gence Organiza- to Health Maintenance medically manner. reasonable provide tions which undertake simply providing treatment rather than Here, phone provided [the HMO] money payment for or reimbursement for emergency staffed service medical services. Our Court said: Hence, under triage nurses. dispensing that the adopting the doctrine of to oversee *8 by per- recognized the advice those nurses would be Thompson court medically in a man- in the total reasonable corporate hospital’s

‘the role formed Accordingly, ex- we now make Thompson, care ner. patients.’ health of its Likewise, plicit implicit was the cen- that which recognize at 708. we Or- [v. Health Maintenance role in the total McClellan played tral HMOs Pennsylvania, 413 ganization great A of health of subscribers. (1992)7 Pa.Super. A.2d today’s of healthcare is channeled deal may, the fínd HMOs under the be- and that through HMOs with subscribers circumstances, corpo- right be held given say no in the stew- httle or so rately any liable the treating physicians negligent. for breach of of were C.f. Thompson (“Because Welsh, duties duty which causes harm supra uphold the to to its directly subscribers. proper the standard of care runs injured hospital patient, from the Id. 718 A.2d at (emphasis supplied). rely negligence need not of a (a)-(e) subparagraphs 5 Since of Count nurse, third-party, a doctor such as III of Appellant’s complaint allege that establish a cause of action in Keystone theory was liable under a of negligence.”) Consequently, I believe that corporate negligence for failing develop, precluded the was not from pro- implement, and adequate policies enforce ceeding part complaint of her un- this hiring supervision for the of par- der the doctrine of estoppel, collateral ticular doctors who treated Appellant’s de- solely jury’s because of the verdict in favor cedent, I agree would that portions these treating physicians. of the her case Since of Count III are the jury’s barred against Keystone was not consolidated finding prior proceeding that her action her decedent’s decedent’s were not treating physicians, Keystone’s request, negligent. finding by Such a Appellant did not have the opportunity prior proceeding in effect established prior proceeding litigate specific Keystone did not breach the second issue. v. Strassburger, See Muhammad “Thompson duty,” which is to select and 541, 546, 526 Pa. However, competent physicians. retain (1991) (a “party against plea whom a of Shannon, recognized our Court supra estoppel collateral must have is asserted that an such Keystone may, un- full fair opportunity litigate had a circumstances, der certain be held liable action.”) question the issue in in a breaching Thompson duties causing harm to its subscribers. Nevertheless, majori- I concur in the ty’s of grant affirmance the Trial Court’s (f) 6 Subparagraph of Count III of summary judgment of I feel that because Appellant’s complaint an allegation it was warranted under the evi- particular Keystone corporately liable its own dentiary circumstances of this case. As right based on promul- its formulation and majority uphold notes in its decision to gation policies discouraging testing, con- Trial Court’s dismissal of Count II of sultation and evaluation of its enrollees. Appellant’s complaint, which alleges This an allegation Keystone breach- negligence Keystone, Appellant direct ed the fourth “Thompson duty” which is specific has claimed no treatment decision formulate, adopt adequate “to and enforce Keystone which caused the decedent quality rules and to ensure Moreover, dismissing harm. Count II patients.” Thompson, for the supra. For complaint, of the Appellant’s which was negligent to be found under this entirely theory Keystone’s on a based theory corporate negligence required right, direct in its own the Trial Appellant to show that breached Court found as follows: duty directly Appellant’s of care owed formulate, adopt, decedent to and enforce To [Appellant’s] find claims trial, adequate testing diagnostic policies, proceed [Appellant] should thereby and that it breached this would proof have offer some to estab- *9 causing decedent harm. Appellant’s [Appellee’s] liability indepen- This lish that is is, Appellant suggests, entirely an dent of the of the who sepa- actions doctors dependent attempt rate issue not on whether the treated An ar- [Appellant.] discourage procedures policies her were gue evalua- consultation and adequate testing, their can be negligent and that actions necessarily enrollees. must tion of its imputed already deter- fail because a has [Appel- contrary to be true.

mined prove would

lant] instead have relationship causal between

some harm

policies of and the the HMO decedent]. There [the

suffered evidence in this case of such

causal connection. 4/30/2001, at 3 Opinion, Trial filed Court Pennsylvania, of COMMONWEALTH (emphasis supplied). Appellee ¶ Thus, I for these reasons v. summary was judgment would hold that (f) of proper respect subparagraph with BESS, Appellant. Charles complaint III of since Appellant’s Count Superior Pennsylvania. of produce has failed to evidence interjected into had itself Aug. Submitted 2001. specific treatment decisions made with decedent, that its respect Appellant’s or Filed Jan. test- respect discouraging consultation, Ap- or evaluation caused

ing, summary harm.

pellant’s decedent Hence

judgment proper on this basis. See

Campanaro Pennsylvania Electric (Pa.Su-

Company A.2d 475-476 denied, appeal

per.1999), 1035.2) (2000) (citing

A.2d 183 Pa.R.C.P.

(“Summary may properly be en- judgment only genuine there

tered where is no necessary of material fact as to a of action could

element cause which discovery established additional or expert report, completion after of re-

discovery production expert of who will bear

ports, adverse proof pro- at trial has failed to

burden evidence facts essential

duce action.”)

cause join holding I Consequently, respects majority in other but con- the dis- respect in the result with

cur

missal of cause of against Keystone which was alleged implementation

predicated