Appeal from the Judgment Entered November 3, 2004, in the Court of Common Pleas, Philadelphia County, Civil Division, at No. 4056 January Term, 2001.
The opinion of the court was delivered by: Bowes, J.
Petition for Reargument Filed April 7, 2009
BEFORE: BOWES, SHOGAN and FITZGERALD*fn1, JJ.
¶ 1 Dr. Brad S. Friedman, Dr. Mark Schweitzer, and Jefferson Imaging have filed separate appeals from the judgment entered on a jury award in favor of Jeffrey and Silvia Tindall, and the Tindalls have appealed the trial court's post-trial entry of judgment notwithstanding the verdict ("n.o.v.") in favor of Jefferson Imaging. We reverse the entry of judgment n.o.v. in favor of Jefferson Imaging and remand for reinstatement of the judgment against that company. We affirm the jury award in favor of the Tindalls, but remand for recalculation of delay damages imposed on that verdict.*fn2
¶ 2 The facts underlying the present cause of action, viewed in the light most favorable to the Tindalls as verdict winners, are as follows. In early 1997, when he was twenty-eight years old, Mr. Tindall occasionally began to experience problems with his left knee in that when he stood, the knee failed to bend easily, and when it did bend, it would apparently dislocate and then return to its natural position. On April 15, 1997, he was weeding his yard on a four-foot retaining wall and attempted to stand when his knee locked, and he fell from the wall onto grass. Mr. Tindall experienced pain in his knee and scheduled an appointment for the following day with his family doctor, Dr. Friedman.
¶ 3 Dr. Friedman diagnosed Mr. Tindall with a strain or sprain but sent him for an x-ray for confirmation. The radiologist who read the x-ray stated that the x-ray was consistent with a diagnosis of a strain or sprain resulting from the fall, but he also indicated that the x-ray revealed the existence of an abnormality on the outside of the left knee that was unrelated to the fall. The radiologist concluded that the abnormality could be classified as either a hematoma, which is a completely benign condition, or a neoplasm, which is an abnormal growth of cells. A neoplasm can consist of cancerous cells. In his written report, the radiologist recommended that Mr. Tindall undergo an MRI solely to eliminate the possibility that the abnormality was malignant, and he also telephoned Dr. Friedman's office to ensure that the MRI would be conducted due to the possibility that the abnormality was cancer.
¶ 4 Dr. Friedman ordered the recommended MRI from Jefferson Imaging. In written instructions regarding the purpose for the MRI, Dr. Friedman specifically noted that the MRI was to be conducted to determine whether the abnormality on Mr. Tindall's knee was a calcified hematoma or a neoplasm. The record establishes that to a physician, those instructions would be interpreted as a direction to perform the MRI to eliminate the possibility that the abnormality on Mr. Tindall's knee was a cancer. Mr. Tindall underwent his MRI at Jefferson Imaging on April 23, 1997, and Dr. Schweitzer interpreted it in a report issued on April 25, 1997.
¶ 5 Dr. Schweitzer stated at trial that he did not receive Dr. Friedman's written instructions regarding the reason the MRI had been requested and that he was under the impression that he was interpreting the MRI to determine the nature of a twisting injury that Mr. Tindall had sustained to the left knee. Thus, Dr. Schweitzer read the MRI in accordance with the protocol for determining the type of twisting injury the left knee had sustained. Dr. Schweitzer also testified that if he had received Dr. Friedman's written instructions, he would have told Mr. Tindall to return to Jefferson Imaging for performance of a different set of MRI studies that were necessary for Dr. Schweitzer to properly diagnose the abnormality. Those studies would have been conducted and interpreted under the tumor protocol, which would apply for determining if the abnormality on the left knee was a cancerous growth. Dr. Schweitzer said that if the MRI had been performed and evaluated in accordance with the tumor protocol, the abnormality would have been diagnosed as malignant in April 1997. Since the incorrect protocol was utilized, Dr. Schweitzer did not determine if the abnormality on the left knee, which was unrelated to Mr. Tindall's April 15, 1997 fall, was malignant.
¶ 6 The April 25, 1997 report issued by Dr. Schweitzer and sent to Dr. Friedman provided as follows (emphasis added):
There is edema at the insertion site of the gastrocnemus muscle consistent with muscle injury. On the clinical data form, it is noted that the patient had an abnormal outside radiograph that apparently noted a calcific density along the lateral border of the distal femur. The edema at the insertion of the gastrocnemus may suggest the possibility of a cortical desmoid accounting for the radiographic abnormality. Follow up radiographs could be performed if clinically indicated to further characterize this finding.
¶ 7 Thus, the report noted that the edema suggested the possibility of a cortical desmoid, which would account for the abnormality. Cancer was not discussed in the report.
¶ 8 On March 16, 1998, Mr. Tindall, who never was informed about the abnormality on his knee or that it possibly was malignant, returned to Dr. Friedman complaining that his knee was still causing him problems. Mr. Tindall reported that the knee continued to lock and then momentarily dislocate and that it was also painful. On April 13, 1999, Mr. Tindall presented to Dr. Friedman with more frequent and severe pain in the knee as well as continued locking and swelling. He complained of imbalance and also displayed unexplained weight loss.
¶ 9 On June 2, 1999, Mr. Tindall, who continued to have his April 1999 symptoms, complained to Dr. Friedman of the additional symptom of energy loss. Later that month, Mr. Tindall asked for a referral, and Dr. Friedman sent him to an orthopedic specialist, Dr. George Stollsteimer. Dr. Stollsteimer saw Mr. Tindall in July 1999, and immediately ordered radiological studies. Following receipt of those studies, Dr. Stollsteimer promptly referred Mr. Tindall to an orthopedic oncologist, a doctor specializing in treatment of bone cancer. In August 1999, two and one-half years after the April 23, 1997 MRI, Mr. Tindall's bone cancer was diagnosed.
¶ 10 Due to the delay in diagnosis, Mr. Tindall's cancer increased in size and dedifferentiated from a low-grade cancer to a more aggressive, high-grade cancer. Expert testimony presented by the Tindalls indicated that the cancer had probably dedifferentiated in the year prior to its diagnosis. Since his cancer was high-grade rather than low-grade, Mr. Tindall's treatment, because it included chemotherapy, was significantly more debilitating. Although he is now cancer-free, he runs a significantly increased risk of reoccurrence, metastasis, and death than he would have had if the condition had been diagnosed in 1997. High-grade cancers have a ninety percent chance of recurrence within a twelve-year period and of causing death. Thus, Mr. Tindall must undergo cancer surveillance for the remainder of his life and cannot secure life insurance.
¶ 11 Mr. Tindall was rendered sterile due to the chemotherapy. He placed his sperm in a sperm bank, but in order to conceive, Mrs. Tindall, who was pregnant at trial, underwent in vitro fertilization, which is costly and medically burdensome. She will have to do so again in order to have another child. If Mr. Tindall had been diagnosed in April 1997, he would have been treated with surgery alone, had an excellent prognosis for a cure, and had an extremely low chance of recurrence or metastasis.
¶ 12 The Tindalls instituted this medical malpractice action against Dr. Friedman, Dr. Schweitzer, Jefferson Imaging, Jefferson University Hospital, and Jefferson Health System alleging that they were negligent for failing to promptly diagnose the cancerous tumor on Mr. Tindall's left knee. The trial court granted summary judgment to Jefferson University Hospital and Jefferson Health System. As to Jefferson Imaging, the Tindalls had pleaded a claim of corporate negligence and also averred that it was liable because Dr. Schweitzer was operating as its agent when he interpreted the MRI. Jefferson Imaging subsequently was granted summary judgment on the corporate negligence cause of action, and at trial, its liability was predicated solely on its status as principal to Dr. Schweitzer.
¶ 13 The case proceeded to a jury trial on April 26, 2004, and on May 5, 2004, the jury returned a verdict finding that Dr. Schweitzer and Dr. Friedman were equally liable for the Tindalls' injuries and that Dr. Schweitzer was Jefferson Imaging's agent when he read the April 23, 1997 MRI. It awarded Mr. Tindall $2,500,000 and Mrs. Tindall $1,000,000 in damages. The verdict was molded to reflect the imposition of delay damages, and on November 3, 2004, judgment in the amount of $3,801,097 was entered in favor of the Tindalls and against Dr. Schweitzer, Dr. Friedman, and Jefferson Imaging.
¶ 14 Those three defendants filed the appeals at 3390 EDA 2004, 3391 EDA 2004, and 3433 EDA 2004 from the November 3, 2004 judgment entered on the verdict. Following the filing of those appeals, the trial court issued an opinion and therein concluded that Jefferson Imaging was entitled to judgment n.o.v. because its agent, Dr. Schweitzer, had been released during the course of trial. Since appeals had been filed, the trial court did not have jurisdiction to enter judgment in favor of Jefferson Imaging. 42 Pa.C.S. § 5505. Therefore, on November 17, 2005, we granted Jefferson Imaging's motion for remand for grant of judgment n.o.v. in its favor, without prejudice to the Tindalls' right to appeal from that judgment. Judgment n.o.v. was entered in favor of Jefferson Imaging, and the Tindalls then filed the appeal at 3494 EDA 2005. The four appeals were consolidated for purposes of disposition.
¶ 15 We first address the issue presented by the Tindalls at 3494 EDA 2005. They claim that judgment n.o.v. was improperly entered in favor of Jefferson Imaging. As noted, judgment n.o.v. was premised upon a finding by the trial court that Dr. Schweitzer had been released during the course of trial. Since Dr. Schweitzer had been released, the trial court held that Jefferson Imaging, as his principal, also was released. See Mamalis v. Atlas Van Lines, Inc.,560 A.2d 1380 (Pa. 1989).
¶ 16 The following facts are pertinent to our resolution of this issue. Prior to submission of the case to the jury, in exchange for the $400,000 limit of Dr. Schweitzer's primary medical malpractice insurance, the Tindalls agreed not to execute against Dr. Schweitzer's personal assets. The agreement was entered on the record:
[Tindalls' Counsel:] We have come to an understanding that $400,000 will be paid to my clients by Dr. Schweitzer's primary carrier, PMSLIC. That payment will be made within 30 days irrespective of the outcome of the trial.
In exchange my clients agree to withdraw their motion to amend the complaint to allege punitive damage.
They further agree not to go after or pursue Dr. Schweitzer's personal assets in the event of an excess verdict.
They agree further not to pursue bad faith claims against Dr. Schweitzer's primary carrier, PMSLIC.
My clients are not releasing Dr. Schweitzer nor are they agreeing to indemnify or hold him harmless with respect to any claims that may be pursued against him by the other defendants.
My clients are not waiving any right to continue this case against any defendant in this case or to collect any primary policies, excess policies of any defendant in this case.
N.T. Trial, 5/3/04, at 99-100 (emphasis added). Even though Dr. Schweitzer's personal assets were immune, Dr. Schweitzer still had an additional $800,000 in coverage pursuant to the Medical Care Availability and Reduction of Error Act ("MCARE"), 40 P.S. §§ 1303.101-1105, that was not subject to the stipulation.
¶ 17 It is "well-established that a release is the giving up or the abandoning of a claim or right to the person against whom the claim exists or the right is to be enforced or exercised[.]" Complaint of Bankers Trust Co., 752 F.2d 874, 883 (3rd Cir. 1984); see also Blanchard v. Wilt, 188 A.2d 722, 724 (Pa. 1963) (agreement to hold party harmless "from any further liability in connection with damages" caused by fire that was subject matter of the lawsuit was construed as a release since it was received in exchange for consideration and discharged party from liability in action). Case law is also clear that the release of an agent will absolve the agent's principal from vicarious liability for the actions of the agent. Mamalis, supra.
¶ 18 The operative inquiry in this case is whether the stipulation in question served to release the agent, Dr. Schweitzer, which would, in turn, release the principal, Jefferson Imaging, from its vicarious liability.
The Pennsylvania rule on stipulations is long-settled: parties may bind themselves, even by a statement made in court, on matters relating to individual rights and obligations, so long as their stipulations do not affect the court's jurisdiction or due order of business . . . .
The courts employ a contracts-law analysis to interpret stipulations, so that the intent of the parties is controlling.
Tyler v. King, 496 A.2d 16, 21 (Pa.Super. 1985).
¶ 19 The proper construction of a contract is a question of law, and our standard of review is plenary. Patriot Commercial Leasing Co., Inc. v. Kremer Restaurant, 915 A.2d 647 (Pa.Super. 2006). A cornerstone principle of contract interpretation provides that where the words of the document are clear and unambiguous, we must "give effect" to the language. Standard Venetian Blind Co. v. American Empire Ins. Co.,469 A.2d 563, 566 (Pa. 1983); see also Mace v. Atlantic Refining Marketing Corp.,785 A.2d 491, 496 (Pa. 2001).
¶ 20 In this case, the contract clearly and unambiguously provided that it was not a full release; it was an agreement not to execute against the personal assets of Dr. Schweitzer. Thus, it was a partial release as to Dr. Schweitzer's personal assets. However, since Dr. Schweitzer continued to possess MCARE coverage that remained subject to liability in this action, the Tindalls did not give up or abandon their claim against Dr. Schweitzer.
¶ 21 The actions of both parties following entry of the stipulation substantiate that Dr. Schweitzer was not released. The Tindalls actively pursued their negligence claim against Dr. Schweitzer in order to collect the MCARE coverage that remained subject to liability, and Dr. Schweitzer defended himself at trial and continues to contest the verdict on appeal. It is an established principle of contract construction that "subsequent conduct of the parties, course of performance, is an aid to interpretation." Herzog v. Herzog,887 A.2d 313, 316 (Pa.Super. 2005). Thus, when contracting parties perform under the contract, "their performance manifests a common manifestation of their understanding of the prior expression of agreement, [and] this evidence will be given great weight in determining the meaning attributed to their expressions." Id. (quoting Murray on Contracts, 3rd Ed., § 88A, at 424).
¶ 22 Jefferson Imaging contends that the stipulation operated as a total release, despite the parties' characterization to the contrary. Undoubtedly, the "proper construction of a contract is not dependent upon any name given it by the parties, or upon any one provision, but upon the entire body of the contract and its legal effect as a whole." Kenney v. Jeanes Hospital, 769 A.2d 492, 496 (Pa.Super. 2001). Thus, courts are not to give effect to form over substance when interpreting a contract. Id.
¶ 23 Herein, the primary objective of and entire legal accomplishment of the stipulation was to prevent the Tindalls from seeking satisfaction from Dr. Schweitzer's personal assets in exchange for his primary policy limits. Coverage applicable to this lawsuit in the amount of $800,000 from the Pennsylvania MCARE fund remained subject to liability following entry of the stipulation. This latter fact is conceded by Jefferson Imaging itself. Brief of Cross-Appellee, Jefferson Imaging, at 14 n.2.
¶ 24 In this case, the trial court construed the stipulation as a release for the following reasons:
When they brought this case, the plaintiffs had two potential sources of recovery from Dr. Schweitzer himself: his insurance coverage and his personal assets. The agreement between the Plaintiffs and Dr. Schweitzer exhausted the insurance coverage, and once the plaintiffs agreed not to pursue Dr. Schweitzer's personal assets, they no longer had a claim against him in any meaningful sense.
Trial Court Opinion, 8/11/05, at 4-5. Since Dr. Schweitzer's insurance coverage clearly was not exhausted by the stipulation and instead, $800,000 in MCARE coverage remained in play, we cannot concur with the trial court's conclusion that the Tindalls no longer had a meaningful claim against Dr. Schweitzer merely by foregoing collection against his personal belongings.
¶ 25 MCARE was created to ensure reasonable compensation for persons injured due to medical negligence. The fund pays claims against participating health care providers for losses or damages awarded in medical professional liability actions in excess of basic insurance coverage. Critical herein is the fact that physicians, among other providers, are required to participate in the MCARE program if more than fifty percent of their health care business is conducted within Pennsylvania. Each participating health care provider, including physicians, must pay a certain percentage of the prevailing primary premium charged by the Pennsylvania Professional Liability Joint Underwriting Association to MCARE. This amount fluctuates each year based upon, among other items, payments made and expenses incurred by MCARE during the previous year. MCARE is the functional equivalent of an insurance provider, to which Dr. Schweitzer personally paid the functional equivalent of a premium each year. MCARE coverage operates similarly to excess insurance.
¶ 26 If Dr. Schweitzer had purchased a policy from an insurance company that provided excess coverage in this action, there would be no question that the release did not operate to fully absolve him from liability in this action. The fact that this case involves MCARE coverage, which Dr. Schweitzer obtained through involuntary payments into the fund, does not warrant a different legal result. The agreement did not "effectively terminate" the claim against Dr. Schweitzer because MCARE coverage was still available to the Tindalls if they established Dr. Schweitzer's culpability at trial.
¶ 27 Brown v. Cooke, 707 A.2d 231 (Pa.Super. 1998), is instructive. Therein, the plaintiff was injured when his van was struck by a vehicle operated by a driver in the course of his business. The driver held a primary insurance policy and a secondary insurance policy that provided for excess coverage. In exchange for payment of $279,481.97 from the driver's primary insurance policy, the plaintiff agreed to release all claims against the driver individually and his business, but retained the right to pursue a claim against the secondary insurance provider. When the plaintiff sought recovery against the secondary insurance provider, the trial court entered judgment in the insurer's favor, holding that the plaintiff had executed a general release. On appeal, we reversed, holding that the agreement could not be interpreted as a general release due to the clause reserving the plaintiff's claims against the driver's secondary insurance provider. This Court noted that although the clause was inartfully drafted, the parties' clear intent was to permit the plaintiff to pursue his cause of action against the driver to the extent that the driver's actions were covered by the excess insurance policy. We observed that if the parties had intended their agreement to operate as a general release, it would have been illogical to include such a reservation clause.
¶ 28 The case at bar is analogous. Dr. Schweitzer held an insurance policy through his primary carrier, PMSLIC, and obtained coverage through MCARE pursuant to his mandatory payments into that fund. In return for the exhaustion of the primary policy, the Tindalls agreed not to pursue Dr. Schweitzer's personal assets in the event of an excess verdict. That agreement, however, specifically stated that Dr. Schweitzer was not released and included a reservation of the Tindalls' right to pursue MCARE coverage.
¶ 29 Moreover, this scenario does not create a joint tortfeasor relationship in violation of the holding of Mamalis. The issue herein is whether the agent was fully released, in which case Mamalis would apply. Since Dr. Schweitzer was not completely released, Mamalis is not offended.
¶ 30 We also reject Jefferson Imaging's position that the grant of judgment n.o.v. in its favor should be affirmed on the basis that there was insufficient evidence to support the jury's determination that Dr. Schweitzer was its ostensible agent.
"[T]he entry of judgment notwithstanding a jury verdict is a drastic remedy. A court cannot lightly ignore the findings of a duly selected jury." Neal by Neal v. Lu, 530 A.2d 103, 110 (Pa.Super. 1987).
There are two bases upon which a court may enter a judgment n.o.v.: (1) the movant is entitled to judgment as a matter of law, or (2), the evidence was such that no two reasonable minds could disagree that the outcome should have been rendered in favor of the movant. With the first, a court reviews the record and concludes that even with all factual inferences decided adversely to the movant, the law nonetheless requires a verdict in his favor; whereas with the second, the court reviews the evidentiary record and concludes that the evidence was such that a verdict for the movant was beyond peradventure.
Bugosh v. Allen Refractories Co., 932 A.2d 901, 907-08 (Pa.Super. 2007).
¶ 31 Two elements must be satisfied to establish the liability of a health care provider under the theory of ostensible agent: 1) the patient must look to the principal rather than the agent for medical care; and 2) the principal must hold out the agent as his employee. See Parker v. Freilich, 803 A.2d 738 (Pa.Super. 2002).
¶ 32 In this case, Mr. Tindall's primary care physician, Dr. Friedman, ordered an MRI in order to confirm a diagnosis of his patient's condition. Regardless of the fact that Mr. Tindall's appointment for that MRI was made by Dr. Friedman's office, Mr. Tindall went to Jefferson Imaging for the diagnostic medical care necessary to confirm his diagnosis. Mr. Tindall ...