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MARTIN HELLER v. ARTHUR S. FRANKSTON (08/11/83)

decided: August 11, 1983.

MARTIN HELLER, ESQUIRE AND ROBERT F. SIMONE, ESQUIRE, PETITIONERS
v.
ARTHUR S. FRANKSTON, ADMINISTRATOR OF THE ARBITRATION PANELS FOR HEALTH CARE AND ARBITRATION PANELS FOR HEALTH CARE, RESPONDENTS



Appeal from the Order of the Administrator of the Arbitration Panels for Health Care in case of Carmello Marquez, a minor, by Dionisia Marquez, his guardian v. Hahnemann Medical College and Hospital of Philadelphia et al., No. M76-00009.

COUNSEL

Harry Lore, for petitioners.

Gwendolyn T. Mosley, Deputy Attorney General, with her, LeRoy S. Zimmerman, Attorney General, for respondents.

Judges Blatt, Williams, Jr. and Craig, sitting as a panel of three. Opinion by Judge Williams, Jr.

Author: Williams

[ 76 Pa. Commw. Page 295]

This case comes before the Court on appeal by the attorney-petitioners from an order of the Administrator for Arbitration Panels for Health Care (Administrator) directing the said attorneys to relinquish certain disputed funds relating to the settlement of a medical malpractice action. This Court must now determine the constitutionality of Section 604(a) of the Health Care Services Malpractice Act (Act),*fn1 which regulates the fees received by plaintiffs' attorneys in such actions.

[ 76 Pa. Commw. Page 296]

Background

In 1977, petitioners commenced a medical malpractice action*fn2 before the Administrator on behalf of a minor through his guardian. Before a panel was selected, the litigants settled. Pursuant to a properly promulgated regulation*fn3 then in effect, petitioners applied to the Court of Common Pleas for leave to compromise the action for the amount of one million dollars ($1,000,000), and for approval of attorneys' fees of one-third of that settlement figure. Pa. R.C.P. 2039(a)*fn4 mandates court approval of agreements entered into by the guardian for counsel fees. By approving the settlement and the agreements between petitioners and the guardian for counsel fees, the court of common pleas permitted recovery of counsel fees in excess of that authorized by Section 604(a) of the Act.

In addition to the approval of the court of common pleas, the petitioners were required by Section 307(b)

[ 76 Pa. Commw. Page 297]

*fn5 of the Act, 40 P.S. ยง 1301.307(b), to seek the approbation of the Administrator, who initially declined to approve the settlement as proposed because the attorneys' fees were in excess of those permitted under Section 604(a). The Administrator subsequently approved that portion of the fee allowed by the Act, contingent upon counsel's placing in escrow, pending final resolution of the matter, the disputed portion of the fee, a sum of one hundred ten thousand six hundred ten dollars and seventy-seven cents ($110,610.77).

The Attorney General then filed a petition on behalf of the Administrator, by which he sought to modify the common pleas court order granting distribution of the settlement funds, and requesting that the sum in the escrow account plus the interest thereon be paid to the guardian of the estate of the injured minor. The common pleas court denied that petition, concluding that Sections 604(a) and 307(b) of the Act were inconsistent with Pa. R.C.P. ...


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