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Aria Health v. Medical Care Availability & Reduction of Error Fund

Commonwealth Court of Pennsylvania

March 31, 2014

Aria Health and Aria Health Physician Services, Petitioners
v.
Medical Care Availability and Reduction of Error Fund, Respondent

Submitted: November 27, 2013.

Page 337

Mark J. Schwemler, Blue Bell, for petitioners.

Elit R. Felix, II, Philadelphia, for respondent.

BEFORE: HONORABLE BERNARD L. McGINLEY, Judge, HONORABLE P. KEVIN BROBSON, Judge, HONORABLE JAMES GARDNER COLINS, Senior Judge. OPINION BY SENIOR JUDGE COLINS.

OPINION

Page 338

JAMES GARDNER COLINS, Senior Judge

 

This case is a Petition for Review filed by Aria Health (Hospital), a hospital formerly known as Frankford Hospital, and Aria Health Physician Services (AHPS) (collectively, Petitioners) seeking reversal of a decision of the Medical Care Availability and Reduction of Error Fund (the Fund) that denied their request for coverage under the Medical Care Availability and Reduction of Error Act (MCARE Act)[1] in two personal injury actions filed in 2011 that are pending in the Philadelphia County Court of Common Pleas. Before this Court is Petitioners' motion for partial summary judgment seeking a ruling that the Fund is required to defend both Petitioners in both of those actions. For the reasons set forth below, we deny the motion in its entirety as to AHPS and deny the motion in part and grant it in part as to Hospital.

The underlying actions arise out of sexual assaults committed by Dr. Earl B. Bradley on two of his pediatric patients, plaintiffs G.H. and A.H.,[2] in the 1990s, when he provided medical care to them. (Petition for Review ¶ ¶ 5-6; G.H. and A.H. Amended Complaints, Exhibits 1 and 2 to Petition for Review.) The G.H. action, June Term, 2011 No. 2852, and the A.H. action, June Term, 2011 No. 2854, both assert claims that Hospital and AHPS are vicariously

Page 339

liable for Dr. Bradley's assaults on the basis of respondeat superior and agency (G.H. Amended Complaint Counts I-II ¶ ¶ 51-86; A.H. Amended Complaint Counts I-II ¶ ¶ 50-85), and that Hospital and AHPS allegedly breached duties to report his misconduct to third parties. (G.H. Amended Complaint Counts IX-XI ¶ ¶ 163-210; A.H. Amended Complaint Counts IX-XI ¶ ¶ 162-209.) The G.H. and A.H. actions also assert negligence claims that Hospital and AHPS allegedly violated duties to their patients in credentialing and retaining Dr. Bradley (G.H. Amended Complaint ¶ ¶ 18, 27, 90, 94(a), 105(a), 118(a); A.H. Amended Complaint ¶ ¶ 18, 27, 89, 93(a), 104(a), 117(a)), failed to supervise and monitor the medical care he was providing (G.H. Amended Complaint ¶ ¶ 19, 28, 91, 94(b), 103, 105(b), 116, 118(b); A.H. Amended Complaint ¶ ¶ 19, 28, 90, 93(b), 102, 104(b), 115, 117(b)), failed to maintain safe and adequate facilities (G.H. Amended Complaint ¶ ¶ 89, 94(c); A.H. Amended Complaint ¶ ¶ 88, 93(c)), and violated duties to " promulgate standards, procedures and rules to ensure quality care and safety for patients." (G.H. Amended Complaint ¶ ¶ 20, 29, 93, 104, 117; A.H. Amended Complaint ¶ ¶ 20, 29, 91, 103, 116.)

Hospital and AHPS submitted written requests to the Fund for defense and indemnification for the G.H. and A.H. actions pursuant to Section 715 of the MCARE Act, 40 P.S. § 1303.715, which provides coverage to participating health care providers for medical professional liability claims asserted more than four years after the alleged malpractice. (Petition for Review ¶ 8.) The Fund denied coverage to AHPS on the ground that it is not an entity entitled to coverage under the MCARE Act and denied coverage to Hospital because it concluded that the claims in the G.H. and A.H. actions do not constitute medical professional liability claims. (Fund Letters of April 6, 2012 and October 12, 2012, Exhibits 3 and 5 to Petition for Review.)

On November 9, 2012, Hospital and AHPS filed this Petition for Review in this Court's original jurisdiction seeking reversal of the denial of coverage and an order directing the Fund to provide defense and indemnification coverage to them for the G.H. and A.H. actions. On January 9, 2013, the Fund filed a preliminary objection in the nature of a demurrer, contending that the claims in the G.H. and A.H. actions are not medical professional liability claims. Although the Fund accepted for purposes of its preliminary objection that both Petitioners were entitled to coverage for medical professional liability claims under the MCARE Act, it specifically noted that it did not admit that AHPS was covered by the MCARE Act and reserved the right to challenge whether AHPS was an entity to which MCARE Act coverage applies in the event that its preliminary objection was overruled. (Respondent's Preliminary Objection at 2 n.1.)

On April 15, 2013, this Court issued a single-judge opinion and order overruling the Fund's preliminary objection. In this ruling, the Court held that for a claim to constitute a medical professional liability claim covered by the Fund under Section 715 of the MCARE Act, it must arise directly from the provision of health care services and must allege conduct by the defendant that involved some exercise of medically related specialized training. (April 15, 2013 Opinion at 4-5.) Because Dr. Bradley's sexual assaults on G.H. and A.H. during the course of his medical care do not constitute the furnishing of health care services and claims of failure to report misconduct to parties outside the health care provider's facility do not arise directly out of the furnishing of medical services, the Court held that the claims

Page 340

against Petitioners in the G.H. and A.H. actions for vicarious liability and failure to report do not constitute medical professional liability claims and are not covered by the Fund. ( Id. at 5-6.) However, it was unclear whether other allegations in the G.H. and A.H. complaints, concerning misuse of anesthesia and sedative medications and Petitioners' credentialing and supervision of Dr. Bradley, asserted claims that Hospital or AHPS failed to exercise medical skill in providing treatment to them. ( Id. at 9-11.) Because the Court was required to resolve all doubts in Petitioners' favor on preliminary objections, the Court overruled the Fund's preliminary objection.

Following the overruling of its preliminary objection, the Fund filed an answer and new matter to the Petition for Review in which it asserted that the G.H. and A.H. actions do not plead any claim against Hospital or AHPS for failure to exercise medical skill in furnishing health care services to them and specifically disputed that AHPS is a health care provider covered under the MCARE Act. (Response to Petition for Review, Answer ¶ ¶ 1, 3 and New Matter ¶ ¶ 9-12, 18-19.) On October 2, 2013, after some discovery between Petitioners and the Fund in this case, Petitioners filed the instant motion for partial summary judgment on the issue of defense coverage, seeking a judgment that the Fund is required to pay all past and future legal fees and expenses incurred by them in the defense of both the G.H. and A.H. actions and vacatur of the Fund's denial of coverage in its entirety. Although discovery was not complete and Petitioners were ordered on December 2, 2013, to provide additional interrogatory answers and produce additional documents, the Fund has not sought to submit any material from that additional discovery.

It is well settled that summary judgment may be granted only where the record demonstrates that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Summers v. Certainteed Corp ., 606 Pa. 294, 307, 997 A.2d 1152, 1159 (2010). Unlike the situation before the Court on the Fund's preliminary objection, the burden here is on Petitioners to demonstrate that under the undisputed facts they satisfy all requirements for coverage under Section 715 of the MCARE Act for their defense in the underlying actions.

Section 715 of the MCARE Act provides in relevant part:

(a) General rule.

--If a medical professional liability claim against a health care provider who was required to participate in the Medical Professional Liability Catastrophe Loss Fund under section 701(d) of the act of October 15, 1975 (P.L. 390, No. 111), known as the Health Care Services Malpractice Act, is made more than four years after the breach of contract or tort occurred and if the claim is filed within the applicable statute of limitations, the claim shall be defended by the department if the department received a written request for indemnity and ...


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