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11/06/97 LEGAL CAPITAL v. MEDICAL PROFESSIONAL

November 6, 1997

LEGAL CAPITAL, LLC AND CHARLES I. ARTZ, PETITIONERS
v.
MEDICAL PROFESSIONAL LIABILITY CATASTROPHE LOSS FUND, RESPONDENT



Appealed From Decision dated July 1, 1997. State Agency Right to Know Act.

Before: Honorable Doris A. Smith, Judge, Honorable Rochelle S. Friedman, Judge, Honorable Charles P. Mirarchi, Jr., Senior Judge. Opinion BY Judge Smith. Judge Friedman concurs in the result only.

The opinion of the court was delivered by: Smith

OPINION BY JUDGE SMITH

FILED: November 6, 1997

Legal Capital, LLC, and Charles I. Artz, Esquire (Legal Capital) petition for review from the Medical Professional Liability Catastrophic Loss Fund's (CAT Fund) denial of a request made by Legal Capital pursuant to the Act commonly known as the Right-to-Know Act, Act of June 21, P.L. 390, as amended, 65 P.S. "66.1 - 66.4, for access to certain records relating to the settlement of medical malpractice claims. Legal Capital questions whether the CAT Fund lacked just cause when it refused Legal Capital's request to inspect and to copy certain records in the possession of the CAT Fund limited to settlements of malpractice claims through the CAT Fund. The Court affirms the decision of the CAT Fund to deny Legal Capital's request. The CAT Fund serves as a secondary insurer in medical malpractice cases to pay the excess, up to prescribed limits, over required basic insurance coverage for awards, judgments and settlements in professional liability actions against health care providers. Legal Capital states that under the former version of Section 701(e)(2) of the Health Care Services Malpractice Act (CAT Fund Act), Act of October 15, 1975, P.L. 390, as amended, 40 P.S. '1301.701(e)(2), the CAT Fund made payment on or about December 31 of a given year for settlements arrived at by August 31. For settlements arrived at after August 31, the CAT Fund was not required to pay and in practice did not pay until December 31 of the following year, resulting in delays of up to 16 months.

Legal Capital states that it approaches successful plaintiffs and their attorneys and offers to negotiate to purchase the plaintiffs' and/or counsels' rights to payment in the future, at a discount, which can provide money for plaintiffs or counsel who have immediate financial needs. Legal Capital avers also that previously the CAT Fund routinely provided access to the information it requested here. *fn1 Legal Capital requested the right to inspect and to make copies of documents relating to plaintiffs who have settled malpractice actions. The information it sought was the names and addresses of all plaintiffs who have settled or compromised claims, the names and addresses of their attorneys, the dates the cases settled, the amounts of the settlements and the docket numbers of the cases.

The request specified that Legal Capital did not seek the name or other information relating to any defendant physician, hospital or other health care provider or any pre-litigation information forwarded to the CAT Fund by any basic care insurance carrier or self-insured provider concerning notice that the value of any claim exceeded the basic insurer's coverage. Legal Capital would be satisfied with redacted records. The CAT Fund denied the request, relying principally upon the provisions of Section 702(c) of the CAT Fund Act, 40 P.S. '1301.702(c), and the "investigation" exception to the definition of "public record" in the Right-to-Know Act.

Legal Capital first quotes the definition of "public record" in Section 1(2) of the Right-to-Know Act, 65 P.S. '66.1(2):

Any account, voucher or contract dealing with the receipt or disbursement of funds by an agency or its acquisition, use or disposal of services or of supplies, materials, equipment or other property and any minute, order or decision by an agency fixing the personal or property rights, privileges, immunities, duties or obligations of any person or group of persons: Provided, That the term 'public records' shall not mean any report, communication or other paper, the publication of which would disclose the institution, progress or result of an investigation undertaken by an agency in the performance of its official duties, except those reports filed by agencies pertaining to safety and health in industrial plants; it shall not include any record, document, material, exhibit, pleading, report, memorandum or other paper, access to or the publication of which is prohibited, restricted or forbidden by statute law or order or decree of court....

Legal Capital notes the principle that a broad construction is to be given to the initial determination of whether a document is a public record, to be tempered as an opposing party brings into play the enumerated exceptions. Travaglia v. Department of Corrections, A.2d ( No. 2473 C.D. 1996, filed July 29, 1997). It contends that the materials it seeks fall within the "minute, order or decision" category of the Section 1(2) definition.

This Court has broadly construed the phrase "decision by an agency fixing the personal or property rights, privileges, immunities, duties or obligations" of persons or groups to include "decisions which establish, alter, abolish or deny rights, privileges, immunities or obligations; in short, decisions which affect them." Lamolinara v. Barger, 30 Pa. Commw. 307, 373 A.2d 788, 790 (Pa. Commw. 1977). The Court agrees that where the purpose of the CAT Fund is to resolve claims properly filed with it and to make payments pursuant to statute, the decisions of the agency to approve settlements constitute decisions establishing the property rights of persons. Therefore, settlement records are within the general definition of public records unless one or more exceptions apply.

Legal Capital next turns to the effect of Section 702(c) of the CAT Fund Act. As amended in 1976, Section 702(c) formerly provided in part:

The basic coverage insurance carrier or self-insured provider shall promptly notify the director of any case where it reasonably believes that the value of the claim exceeds the basic insurer's coverage or self-insured plan.... Such information shall be confidential, notwithstanding the ... act of June 21, 1957 (P.L. 390, No. 212) referred to as the Right To Know Law.

Section 4 of the Act of November 26, 1996, P.L. 776, amended the second sentence of Section 702(c) so that it now provides: "Such information, including the fund's claim file, shall be confidential, notwithstanding the act of June 21, 1957 (P.L. 390, No. 212) referred to as the Right To Know Law ...


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