Original jurisdiction in the case of Thomas J. Judge, Sr., as Director of the Medical Professional Liability Catastrophe Loss Fund of the Commonwealth of Pennsylvania v. Allentown and Sacred Heart Hospital Center and The Hartford Insurance Group.
Harvey Bartle, III, Dechert, Price & Rhoads, with him, Robert W. Waeger and Don A. Leatherman, for plaintiff.
Frank A. Baker, III, Butz, Hudders, Tallman, Stevens & Johnson, with him, James B. Martin, for defendant, Allentown and Sacred Heart Hospital Center.
Robert H. Holland, with him, Barbara L. Hollenbach and Gary S. Figore, Holland, Taylor and Sorrentino, for defendant, Hartford Insurance Group.
Judges Rogers and Doyle, and Senior Judge Blatt, sitting as a panel of three. Opinion by Judge Rogers. Judge Palladino did not participate in the decision in this case.
[ 90 Pa. Commw. Page 522]
This is a suit in assumpsit brought in this Court by Thomas J. Judge, Director of the Medical Professional Liability Catastrophe Loss Fund (Fund), seeking judgment against the Allentown and Sacred Heart Hospital Center (Hospital Center or defendant) and the Hartford Insurance Group (Hartford or defendant), its insurance carrier, for money paid by the plaintiff Fund which the defendants allegedly should have paid in settlement of a medical malpractice claim. The defendants filed preliminary objections in the nature of demurrers, one of which was to the point that the Fund, an executive agency of the Commonwealth, had not been given the statutory power to bring a suit of this nature. In Judge v. Allentown and Sacred Heart Hospital Center, 78 Pa. Commonwealth Ct. 373, 467 A.2d 899 (1983), we sustained the demurrers based exclusively on the conclusion that the Fund had no statutory authority to sue. The Pennsylvania Supreme Court in Judge v. Allentown and Sacred Heart Hospital Center, Pa. , A.2d (1985), held that the Fund did have the power to sue, reversed our order and remanded for further proceedings consistent with its opinion. Neither we nor the Supreme Court addressed the defendants' other demurrer to the effect that (1) the Fund had not alleged facts constituting a cause of action for recovery on the theorization of indemnity or equitable subrogation and (2) that the Fund, as a matter of law, was not entitled to recover the delay damages it claimed.*fn1 The Fund urges that the Supreme Court ruled on the merits of the remaining preliminary objections
[ 90 Pa. Commw. Page 523]
in the nature of demurrers in their favor by the last sentence of the opinion of that Court: "We find that the Commonwealth Court erred in holding that the appellant's complaint failed to state a cause of action." Since the remaining preliminary objections were not subjects considered in the Court's opinion, we believe it to be our duty to consider and dispose of them.
The Fund is an executive agency of the Commonwealth of Pennsylvania established pursuant to Article VII of the Health Care Services Malpractice Act, Act of October 15, 1975, P.L. 390, as amended, 40 P.S. §§ 1301.101-1301.1006. It is designed to provide excess liability coverage for health care providers by satisfying all awards, judgments and settlements arising from malpractice actions to the extent that the provider's liability exceeds the provider's basic coverage insurance. Basic coverage insurance for a health care provider other than a hospital is $100,000 per occurrence and $300,000 per annual aggregate; for hospitals the basic coverage insurance is $100,000 per occurrence and $1,000,000 per annual aggregate.*fn2
We learn from the amended complaint that in February, 1977, Eugene Issermoyer entered the Hospital Center for minor surgery. Mr. Issermoyer suffered adverse effects from anesthesia administered at the Hospital Center and sustained permanent paralysis of both legs and his left arm. Mr. and Mrs. Issermoyer thereafter filed a malpractice claim with the Arbitration Panels for Health Care naming as defendants the Hospital Center and two of its staff physicians. After lengthy discovery proceedings and settlement negotiations the Issermoyers' claim was settled on behalf of the Fund and the doctors for $1,503,935.
[ 90 Pa. Commw. Page 524]
The doctors' basic coverage insurance carrier contributed $200,000 to the settlement for its insureds. As part of the settlement agreement releases were executed in favor of all defendants including the Hospital Center. The Hospital Center and its carrier Hartford, however, declined to concede any liability in the matter and made no contribution ...