Title: Patients Compensation Fund v. Lutheran Hospital-LaCrosse, Inc.
Citation: N/A
Docket Number: 1996AP001344
State: Wisconsin
Issuer: Wisconsin Supreme Court
Date: January 26, 1999

SUPREME COURT OF WISCONSIN 
 
 
Case No.: 
96-1344 
 
 
Complete Title 
of Case: 
 
 
Patients Compensation Fund,  
 
Plaintiff-Respondent-Petitioner, 
 
v. 
Lutheran Hospital-LaCrosse, Inc., Wisconsin 
Hospital Association Optional Segregated 
Account, Nancy Bowell, R.N., ABC Insurance 
Company, Carol Cowell, R.N., American Family 
Mutual Insurance Company, Darlene Denstad, 
L.P.N., DEF Insurance Company, Trudy Pierick, 
R.N., GHI Insurance Company, Sharon Wiebke,  
R.N. and JKL Insurance Company,  
 
Defendants-Appellants.  
 
ON REVIEW OF A DECISION OF THE COURT OF APPEALS 
Reported at:  216 Wis. 2d 49, 573 N.W.2d 572 
 
 
 
(Ct. App. 1997-Published) 
 
 
Opinion Filed: 
January 26, 1999 
Submitted on Briefs: 
 
Oral Argument: 
November 10, 1998 
 
 
Source of APPEAL 
 
COURT: 
Circuit 
 
COUNTY: 
LaCrosse 
 
JUDGE: 
Dennis G. Montabon 
 
 
JUSTICES: 
 
Concurred: 
 
 
Dissented: 
 
 
Not Participating:  
 
 
ATTORNEYS: 
For the plaintiff-respondent-petitioner there 
were briefs by Paul J. Kelly and Schellinger & Doyle, S.C., 
Brookfield and oral argument by Paul J. Kelly. 
 
 
For the defendants-appellants there was a brief 
by W.A. Kirkpatrick and Hale, Skemp, Hanson, Skemp & Sleik, 
LaCrosse and oral argument by W.A. Kirkpatrick. 
 
 
No.  96-1344 
 
1 
 
NOTICE 
This opinion is subject to further editing and 
modification.  The final version will appear in 
the bound volume of the official reports. 
 
 
No. 96-1344 
 
STATE OF WISCONSIN               :        
        
 
 
 
 
IN SUPREME COURT 
 
 
Patients Compensation Fund,  
 
          Plaintiff-Respondent-Petitioner, 
 
     v. 
 
Lutheran Hospital-LaCrosse, Inc.,  
Wisconsin Hospital Association Optional  
Segregated Account, Nancy Bowell, R.N.,  
ABC Insurance Company, Carol Cowell,  
R.N., American Family Mutual Insurance  
Company, Darlene Denstad, L.P.N., DEF  
Insurance Company, Trudy Pierick, R.N.,  
GHI Insurance Company, Sharon Wiebke,  
R.N. and JKL Insurance Company,  
 
          Defendants-Appellants.  
FILED 
 
JAN 26, 1999 
 
Marilyn L. Graves 
Clerk of Supreme Court 
Madison, WI 
 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Affirmed. 
¶1 
N. 
PATRICK 
CROOKS, 
J. 
 
The 
Wisconsin 
Patients 
Compensation Fund ("the Fund") appeals a published decision of 
the court of appeals1 reversing an order of the La Crosse County 
Circuit Court.  The circuit court, Judge Dennis G. Montabon 
presiding, held that the Fund could seek contribution for its 
payment 
in 
settlement 
of 
a 
malpractice 
claim 
from 
the 
professional liability insurer of a registered nurse, as long as 
it established that the nurse was negligent.  The court of 
appeals reversed, holding that the Fund could not sue the 
                     
1 Patients Compensation Fund v. Lutheran Hosp., 216 Wis. 2d 
49, 573 N.W.2d 572 (Ct. App. 1997).  
No.  96-1344 
 
2 
registered nurse because the Fund's subrogation rights are 
restricted to claims against Wis. Stat. ch. 6552 “health care 
providers” and/or their insurers.  
¶2 
The 
issue 
presented 
is 
whether 
the 
Fund 
has 
subrogation rights which would allow it to bring a claim for 
contribution against an allegedly negligent employee of a health 
care provider and/or the employee's insurer, following the 
Fund's settlement of a malpractice claim against the health care 
provider.  We conclude that the Fund does not have such 
subrogation rights which would permit it to pursue a claim for 
contribution against one whose alleged negligence arose while he 
or she was conducting a health care provider's business, when 
that person is not a Wis. Stat. ch. 655 health care provider or 
a health care provider's insurer.3  Accordingly, we affirm the 
decision of the court of appeals. 
I.      
                     
2 See Wis. Stat. ch. 655 (1995-96).  Unless otherwise noted, 
all future references to the Wisconsin Statutes will be to the 
1995-96 version.  
3 Each health care provider is required by Wis. Stat. ch. 
655 to have a minimum amount of primary insurance coverage.  See 
Wis. Stat. § 655.23(4).  A health care provider is liable for 
medical malpractice up to the minimum amount of coverage or the 
amount for which the provider is actually insured, whichever is 
greater.  § 655.23(5).  Consequently, the liability of a health 
care provider conducting the business of another health care 
provider, such as a doctor employed by a hospital, would be 
limited to the amount of his or her own coverage amount plus the 
coverage amount of the health care provider whose business he or 
she is conducting.  See, e.g., Erickson v. Gundersen, 183 
Wis. 2d 106, 113 & n.2, 515 N.W.2d 293 (Ct. App. 1994).      
No.  96-1344 
 
3 
¶3 
The facts of this case are not in dispute.  The Fund's 
action for contribution originated as a result of a settlement 
in a medical malpractice case, Stach v. Lawnicki, No. 92-CV-418 
(La Crosse County Cir. Ct. filed May 29, 1992).  Plaintiff 
Zachary Stach was admitted to Lutheran Hospital - La Crosse 
("Lutheran Hospital") for surgical correction of a ureteral 
stenosis.  Clyde C. Lawnicki, M.D., performed the surgery on 
September 17, 1991.  Afterward, Dr. Lawnicki prescribed two 
medications for Zachary:  Belladonna suppositories for bladder 
spasms and morphine sulphate for pain.  
¶4 
At 
6:40 
a.m. 
the 
next 
day, 
Zachary 
went 
into 
cardiopulmonary arrest.  Although medical personnel were able to 
resuscitate 
Zachary, 
he 
suffered 
considerable 
neurological 
damage 
as 
a 
consequence 
of 
the 
cardiopulmonary 
arrest.          
       
¶5 
In May 1992, Zachary and his parents, James and Angel 
Stach, filed their complaint in the Stach medical malpractice 
action.  The Staches named Dr. Lawnicki, Lutheran Hospital, 
Gundersen Clinic, Ltd. (Dr. Lawnicki's employer), Wisconsin 
Hospital 
Association 
Optional 
Segregated 
Account 
(Lutheran 
Hospital's 
insurer, 
hereinafter 
"WHA"), 
and 
the 
Patients 
Compensation Fund as defendants in the suit.  
¶6 
The Staches alleged that Zachary's cardiopulmonary 
arrest was caused by an excessive amount of morphine within his 
system.  According to the Staches, this morphine surplus 
resulted from the combination of the morphine sulfate and 
Belladonna suppositories, which also contained morphine.  The 
No.  96-1344 
 
4 
Staches asserted that Dr. Lawnicki negligently prescribed the 
medications and that Lutheran Hospital's pharmacy and the nurses 
who administered the medications negligently failed to notice 
the error in regard to the prescribed medications.  The Staches 
further alleged that Lutheran Hospital's nurses failed to assess 
properly Zachary's condition.  
¶7 
The parties in Stach entered into mediation.  On 
February 8, 1994, the Fund agreed to pay $10 million in 
settlement of the case.  Lutheran Hospital contributed $200,000 
of its $400,000 liability insurance policy limits toward the 
settlement.4  
¶8 
The Fund filed the present action on January 26, 1995, 
seeking contribution for the settlement in Stach from Lutheran 
Hospital, WHA, the nurses at Lutheran Hospital that treated 
Zachary, and the nurses' insurers.  The Fund sought $200,000 
from Lutheran Hospital, representing the remaining portion of 
the hospital's liability insurance policy limits of $400,000.  
In addition, the Fund claimed that it was entitled to recover up 
                     
4 Under 
the 
settlement 
agreement, 
$6,267,000 
of 
the 
$10,000,000 was to be placed in a trust fund for Zachary's 
future medical expenses.  Upon Zachary's death, the balance of 
the trust fund, if any, is to revert to the Fund.  The 
defendants in this case argue that the Fund's contribution claim 
is not ripe for review.  The defendants reason that because the 
rate of return on the trust, Zachary's life span, and Zachary's 
future medical expenses are all unknown, the Fund may receive 
much of its $10 million settlement payment back upon Zachary's 
death and may therefore not be entitled to contribution.  The 
Fund countered by arguing that it had already paid the $10 
million settlement.  As the court of appeals did not address the 
issue of ripeness and it does not in any way affect our 
decision, we do not address the issue any further. 
No.  96-1344 
 
5 
to the limits of the nurses’ professional liability insurance 
policies.   
¶9 
Carol Cowell, R.N. ("Nurse Cowell") was the only nurse 
named as a defendant who had professional liability coverage.  
Nurse Cowell's professional liability insurance was contained in 
a rider to her American Family Mutual Insurance Company 
("American Family") homeowner's insurance policy.5  The Fund 
asserted that it was entitled to contribution from Nurse Cowell 
of $300,000, the limit of her professional liability coverage.  
¶10 The Fund moved for a declaratory judgment pursuant to 
Wis. Stat. § 806.04(1).  The Fund asked the court to declare 
that Lutheran Hospital and Nurse Cowell had $500,000 of 
liability insurance available to satisfy its contribution claim. 
 The Fund arrived at the amount of $500,000 by adding $200,000 
(Lutheran Hospital's $400,000 insurance policy limits less the 
$200,000 the hospital voluntarily paid in the settlement) to 
                     
5 The rider to Nurse Cowell's American Family homeowner's 
policy states in relevant part: 
 
Personal Liability is extended to provide Professional 
Liability Coverage.  We will pay up to our limit, all 
sums for which any insured is legally liable for 
compensatory damages for an occurrence during the 
policy period, arising out of: 
 
1. 
rendering 
or 
failing 
to 
render 
professional 
services personally administered by the individual 
insured in the practice of the covered profession, . . 
. .  
 
Kelly Aff., Exh. F, p. 2 (emphasis in original omitted). 
No.  96-1344 
 
6 
$300,000 (the limits of Nurse Cowell's professional liability 
insurance policy).6  
¶11 In an order issued February 28, 1996, the circuit 
court ruled that Lutheran Hospital was liable for the additional 
$200,000, which Lutheran Hospital apparently conceded.  As to 
Nurse Cowell, however, the court stated, "Nurse Cowell's 
American Family liability policy is not subject to the Fund's 
contribution claim."  Memorandum Decision and Order, Feb. 28, 
1996 at 9.  The court reasoned that the issue of Nurse Cowell's 
negligence was not ripe for judicial determination because the 
case had been settled in the mediation stage.  Finding that the 
Fund was bound by Wis. Stat. ch. 655 and that Nurse Cowell was 
not a ch. 655 "health care provider," the court ruled that Nurse 
Cowell was covered under her employer's liability insurance 
policy pursuant to Wis. Stat. § 655.005(2).   
¶12 The Fund filed a motion with the circuit court, asking 
for reconsideration of the portion of the February 28, 1996, 
order which involved Nurse Cowell's insurance policy.  The Fund 
contended that the only reason it had filed the motion for a 
declaratory judgment was to obtain a determination of the amount 
of insurance available to satisfy its contribution claim.  
According to the Fund, it had not intended to request a 
                     
6 The Fund did not pursue its claims against the other 
nurses named in the original complaint in this action.  We 
assume that the reason is that none of the other nurses 
possessed professional liability insurance.  
No.  96-1344 
 
7 
determination of the amount of insurance coverage actually owed 
by the defendants.     
¶13 The circuit court responded by issuing a new order on 
April 29, 1996.  In its new order, the court replaced its 
previous order as to Nurse Cowell with the statement, "Nurse 
Cowell's American Family liability policy is subject to the 
Fund's contribution claim, if it is demonstrated in this action 
that Nurse Cowell was negligent."  Order, Apr. 29, 1996 at 2.  
In the order, the court stated that it had intended to rule this 
way "based upon the previous submissions of the parties."  
Order, Apr. 29, 1996 at 2.  
¶14 The court of appeals granted the defendants leave to 
appeal and reversed the circuit court's April 29, 1996, order.  
The court of appeals began by holding that any authority of the 
Fund to sue must arise from Wis. Stat. ch. 655.  Patients 
Compensation Fund v. Lutheran Hosp., 216 Wis. 2d 49, 54-55, 573 
N.W.2d 572 (Ct. App. 1997).  The court held that since Nurse 
Cowell was not a “health care provider” as defined by ch. 655, 
ch. 655 precluded the Fund from suing Nurse Cowell or her 
insurer.  Id. at 57-59.  Instead, the court ruled that the 
Fund's subrogation claims against Lutheran Hospital and Nurse 
Cowell are limited by ch. 655 to a total amount of $400,000.  
Id. at 51, 58-59.  The court concluded that "the Fund's 
subrogation rights are limited to claims against one who is a 
health care provider or a health care provider's insurer, as 
those terms are defined for purposes of ch. 655, after the Fund 
No.  96-1344 
 
8 
has become obligated to pay an amount for which another is 
responsible."  Id. at 60.  
II.            
¶15 This court granted the Fund’s petition to review the 
court of appeals’ decision, and we now affirm the court of 
appeals.  We begin by examining the nature of the Fund’s claim. 
 The Fund seeks a determination from this court that it may 
pursue a claim for contribution against Nurse Cowell and/or her 
insurer following the Fund’s payment in settlement of a case in 
which the plaintiffs alleged that Nurse Cowell and her employer, 
Lutheran Hospital, were negligent.  As we shall explain, the 
Fund's ability to pursue its contribution claim depends upon 
whether the Fund possesses subrogation rights in this scenario. 
  
¶16 A contribution claim lies when joint tortfeasors, due 
to their concurring negligence, share a common liability to a 
third party, but one of the tortfeasors has shouldered more than 
his or her fair share of the common burden.  See General 
Accident Ins. Co. v. Schoendorf & Sorgi, 202 Wis. 2d 98, 103, 
549 N.W.2d 429 (1996).  The joint tortfeasor who has borne a 
disproportionate amount of the common liability may then bring 
an action for contribution against the other joint tortfeasors 
to force them to contribute their fair shares of the loss.  See 
id.; see also Swanigan v. State Farm Ins. Co., 99 Wis. 2d 179, 
196, 299 N.W.2d 234, 242 (1980).    
¶17 The Fund’s contribution action stems from the Stach 
malpractice action.  The injured third parties in the present 
No.  96-1344 
 
9 
situation are the Staches.  The Staches’ injuries allegedly 
resulted from the negligence of several joint tortfeasors, 
including Dr. Lawnicki, Lutheran Hospital, and Nurse Cowell.  
The Fund’s role here is not that of a joint tortfeasor, since 
there have been no allegations of negligence on the Fund’s part. 
 Rather, the Fund was joined in the Stach case as the insurer of 
excess liability for some of the alleged joint tortfeasors.  See 
Wis. Stat. § 655.27(1).  In this action for contribution, the 
Fund essentially alleges that it paid more than its fair share 
of the Stach settlement on behalf of the tortfeasors whom it 
insures because Nurse Cowell, who was also one of the joint 
tortfeasors, did not pay her proportionate share of the 
settlement.   
¶18 Because the Fund is not itself an alleged joint 
tortfeasor, the Fund may not bring its contribution claim unless 
it is subrogated to the rights of one of the alleged joint 
tortfeasors whom it insures.  Subrogation rights arise by 
operation of law “when a person other than a mere volunteer pays 
a debt which in equity and good conscience should be satisfied 
by another.”  Wisconsin Patients Compensation Fund v. Wisconsin 
Health Care Liab. Ins. Plan, 200 Wis. 2d 599, 620, 547 N.W.2d 
578 (1996) (quoting American Ins. Co. v. Milwaukee, 51 Wis. 2d 
346, 351, 187 N.W.2d 142 (1971)) [hereinafter, "WHCLIP"].  See 
also D’Angelo v. Cornell Paperboard Prods. Co., 19 Wis. 2d 390, 
399-400, 120 N.W.2d 70 (1963); Arnold P. Anderson, Wisconsin 
Insurance Law §§ 12.1, 12.2, at 12-5, 12-9, 12-13 (4th ed. 
1998).  A party who is subrogated to a second party’s rights 
No.  96-1344 
 
10
against a third party “steps into the shoes” of the second party 
and may bring all claims which the second party could have 
brought against the third party.  Arnold P. Anderson, Wisconsin 
Insurance Law § 12.3, at 12-18 (4th ed. 1998).   
¶19 The issue in this case, then, is whether the Fund has 
subrogation rights which would allow it to "step into the shoes" 
of the alleged joint tortfeasors whom it insures.  Only if such 
subrogation rights exist may the Fund bring its contribution 
action against Nurse Cowell and/or her insurance company. 
III.     
¶20 We now turn to the question at the heart of this 
appeal:  whether the Fund has subrogation rights which would 
allow it to commence an action for contribution against an 
allegedly negligent employee of a health care provider and/or 
the employee's insurer, following the Fund's settlement of a 
malpractice claim against the health care provider.  We conclude 
that the Fund does not have subrogation rights which would 
permit it to pursue a claim for contribution against one whose 
alleged negligence arose while he or she was conducting a health 
care provider's business, when that person is not a Wis. Stat. 
ch. 655 health care provider or a health care provider's 
insurer. 
A. 
¶21 Chapter 655 was enacted by the legislature during the 
perceived medical malpractice crisis of the 1970s.  See WHCLIP, 
200 Wis. 2d at 607.  Chapter 655 created the Fund to curb the 
rising costs of health care by financing part of the liability 
No.  96-1344 
 
11
incurred by health care providers as a result of medical 
malpractice claims.  See id.   
¶22 Under the statutory scheme, health care providers must 
maintain a particular amount of liability insurance to protect 
themselves 
from medical 
malpractice 
claims.7 
 
Wis. 
Stat. 
§ 655.23(3)(a), (4).  In 1991, when the injury in this case 
occurred, the required amount of coverage was $400,000 per 
occurrence and $1,000,000 for all occurrences in a policy year. 
 See Wis. Stat. § 655.23(4).8   
¶23 In addition to maintaining the mandatory amount of 
primary insurance coverage, health care providers must pay 
yearly assessments to the Fund.  Wis. Stat. § 655.27(3).  In 
return, the Fund essentially serves as an excess liability 
insurance carrier for health care providers.  When a malpractice 
claim against a health care provider succeeds, the Fund pays the 
part of the claim which is in excess of either the amount of 
primary insurance coverage required by the statute or the amount 
of primary insurance coverage actually carried by the health 
                     
7 Health care providers can meet this requirement either by 
buying health 
care 
liability 
insurance, self-insuring, or 
furnishing 
a 
cash 
or 
surety 
bond. 
 
See 
Wis. 
Stat. 
§ 655.23(3)(d), (4).  
8 Wis. Stat. § 655.23(4) provides that the health care 
provider's coverage "shall be in amounts of at least . . . 
$400,000 for each occurrence and $1,000,000 for all occurrences 
in any one policy year for occurrences on or after July 1, 
1988."  We note that the language of the 1995-96 version of 
§ 655.23(4) is identical to the language of the 1991-92 version. 
      
No.  96-1344 
 
12
care provider, whichever is greater.  Wis. Stat. § 655.27(1); 
see also WHCLIP, 200 Wis. 2d at 607.      
¶24 The Fund argues that the court of appeals erred when 
it held that the Fund’s ability to sue in the present context is 
controlled by Wis. Stat. ch. 655.  The Fund contends that ch. 
655 
addresses 
only 
patients’ 
claims 
against 
health 
care 
providers, not the Fund’s claims for contribution.  In addition, 
the Fund argues that since it is endowed with the power of a 
common law trustee, it has the power under the common law of 
trusts to bring suit to protect its assets.  See Wis. Stat. 
§ 655.27(6); WHCLIP, 200 Wis. 2d at 615.     
¶25 We disagree with the Fund’s position.  First, this 
court has already decided that Wis. Stat. ch. 655 governs 
contribution actions brought by the Fund.  See Wisconsin 
Patients Compensation Fund v. Continental Cas. Co., 122 Wis. 2d 
144, 156, 361 N.W.2d 666 (1985).  Although the Fund urges us to 
revisit Continental Casualty because it was based on an earlier 
version of ch. 655, we find that its reasoning remains helpful 
in interpreting the newer version of the chapter.9 
                     
9 The court in Wisconsin Patients Compensation Fund v. 
Continental Cas. Co., 122 Wis. 2d 144, 146 n.2, 361 N.W.2d 666 
(1985), construed the language of the 1981-82 version of Wis. 
Stat. ch. 655.  Nevertheless, the Fund's argument in that case 
that its contribution claim was not governed by ch. 655 was 
almost identical to its argument in this one.  See Continental, 
122 Wis. 2d at 153.  The Fund contended in Continental that ch. 
655 did not control its contribution claim because the Fund is 
not a "patient," "patient's representative," or "health care 
provider."  See id.  We rejected this argument in Continental as 
contrary to the underlying purpose of ch. 655 and we reject it 
in this case as well.  See id. at 156.     
No.  96-1344 
 
13
¶26 Second, we indicated in WHCLIP that we must look to 
Wis. Stat. ch. 655 in order to determine whether the Fund has 
the authority to bring a suit.  See WHCLIP, 200 Wis. 2d at 606. 
 We stated that the Fund, as an agency created by the 
legislature,  
 
has those powers which are, by necessity, to be 
implied from the four corners of the statute under 
which it operates. . . . The power to sue may be 
implied when the power is necessary to carry out an 
express power or to perform an express duty, or [when] 
the action arises out of the performance of statutory 
powers or obligations. . . .  
 
Id. at 611-12 (internal quotations omitted).  Consequently, we 
agree with the court of appeals that the question of whether the 
Fund 
has 
subrogation rights 
which 
allow it 
to bring a 
contribution claim against a non-health care provider whose 
liability arose while conducting a health care provider’s 
business is governed by ch. 655.  
B. 
¶27 Since the Fund was created by Wis. Stat. ch. 655, we 
must interpret ch. 655 in order to determine the Fund's 
authority to bring a claim.  See WHCLIP, 200 Wis. 2d at 606.  
Statutory interpretation is a question of law which this court 
reviews de novo.  Hartman v. Winnebago County, 216 Wis. 2d 418, 
430, 574 N.W.2d 222 (1998); WHCLIP, 200 Wis. 2d at 606.  In our 
review, we benefit from the analyses of the circuit court and 
court of appeals.  Hartman, 216 Wis. 2d at 430; WHCLIP, 200 
Wis. 2d at 606. 
No.  96-1344 
 
14
¶28 At the outset, we note that Nurse Cowell is not a Wis. 
Stat. ch. 655 “health care provider.”  A “health care provider” 
is defined in ch. 655 as “a person to whom this chapter applies 
under s. 655.002(1) or a person who elects to be subject to this 
chapter under s. 655.002(2).”  Wis. Stat. § 655.001(8). Under 
§ 655.002(1) and (2), however, the only individuals to whom ch. 
655 applies or who may elect to be subject to the chapter are 
“physicians” 
and 
“nurse 
anesthetists.” 
 
See 
Wis. 
Stat. 
§ 655.002(1)(a)-(c), (2).  Therefore, there is no question, and 
the parties do not dispute, that a registered nurse such as 
Nurse Cowell does not qualify as a ch. 655 “health care 
provider.”   
¶29 Lutheran Hospital, on the other hand, is a Wis. Stat. 
ch. 655 “health care provider.”  See Wis. Stat. § 655.002(1)(h). 
 For this reason, respondents acknowledge that $400,000 of the 
respondents' insurance is available to the Fund pursuant to Wis. 
Stat. § 655.23(4) and (5).   
¶30 Respondents argue, however, that neither Nurse Cowell 
nor her individual professional liability insurer, American 
Family, is responsible for any portion of the $400,000.  They 
reason that because Nurse Cowell is not herself a Wis. Stat. ch. 
655 health care provider and because her alleged negligence 
arose within the scope of her employment for a ch. 655 health 
care provider, ch. 655 limits Nurse Cowell’s malpractice 
liability to the $400,000 amount covered by Lutheran Hospital’s 
primary liability insurance policy.  For the following reasons, 
we agree. 
No.  96-1344 
 
15
¶31 Our principal goal in statutory interpretation is to 
determine and give effect to the intent of the legislature.  
Clark v. American Family Mut. Ins. Co., 218 Wis. 2d 169, 173, 
577 N.W.2d 790 (1998); Hartman, 216 Wis. 2d at 430-31; State v. 
Corey J.G., 215 Wis. 2d 394, 411, 572 N.W.2d 845 (1998).  As a 
threshold question, we must decide whether or not the language 
of the statute is ambiguous.  Corey J.G., 215 Wis. 2d at 411.  
As this court stated in Corey J.G.: 
 
Statutory language is ambiguous if reasonable minds 
could differ as to its meaning. . . . If the plain 
language of the statute is ambiguous, we must look 
beyond the statute's language and examine the scope, 
history, context, subject matter, and object of the 
statute to discern legislative intent. . . . We will 
resolve 
any 
statutory 
ambiguity 
to 
advance 
the 
legislature's purpose in enacting the statute. 
 
Corey J.G., 215 Wis. 2d at 411-12 (internal quotations and 
citations omitted).   
¶32 Chapter 655 does not expressly state whether the Fund 
has subrogation rights to bring an action for contribution 
against one conducting a health care provider’s business who 
does not independently qualify as a health care provider, or his 
or her insurer.  Because reasonable persons could differ as to 
the meaning and interrelationship of the various provisions in 
ch. 655 as they apply to the question before us, ch. 655 is 
ambiguous in regard to this issue.  Consequently, we must 
"examine the scope, history, context, subject matter, and 
object" of ch. 655.  Id.             
No.  96-1344 
 
16
¶33 As we explained in WHCLIP, Wis. Stat. ch. 655 and the 
Fund were designed by the legislature to help limit "the 
increasing cost and possible decreasing availability of health 
care in Wisconsin."  WHCLIP, 200 Wis. 2d at 607.  We conclude 
that one of the ways in which ch. 655 accomplishes this 
objective is by including any malpractice liability on the part 
of a non-health care provider conducting the business of a 
health care provider within the insurance limit of the health 
care provider.10  In this way, each person conducting the health 
care provider's business is not required to go out and buy his 
or her own malpractice insurance.  A holding that the liability 
of those conducting a health care provider's business is not 
covered under the health care provider's primary insurance cap 
would encourage each of those persons to protect himself or 
herself by obtaining his or her own professional liability 
insurance coverage.  This scenario would likely increase the 
cost of health care and decrease its availability, as those who 
could not afford to purchase insurance to protect themselves 
might choose to exit the health care field or to charge more for 
                     
10 During oral argument, the Fund indicated its agreement 
with this statement of the legislature's intent.  Specifically, 
the attorney for the Fund made the following comment:  
[Y]ou can garner . . . from the statute itself that 
there was an intent for the hospital and those 
carrying on its business to be subject to one limit, 
in terms of the x-ray techs, the laboratory, the 
pharmacists [and so on], so that these people would 
not have to go out, or the hospital have to go out, 
and buy insurance, which, in the middle seventies, was 
apparently difficult to obtain in what was perceived 
as the malpractice crisis.  
No.  96-1344 
 
17
the services provided.  Such a result would be contrary to the 
underlying purpose of ch. 655.    
¶34 Several provisions of Wis. Stat. ch. 655 lend support 
to our conclusion that the legislature intended to include the 
malpractice 
liability 
of 
those 
conducting 
a 
health 
care 
provider’s business with the limit which applies to the 
malpractice liability of the health care provider.  Wisconsin 
Stat. § 655.23(5) is perhaps the provision which most obviously 
supports our holding.  Section 655.23(5) provides: 
 
While health care liability insurance, self-insurance 
or a cash or surety bond . . . remains in force, the 
health care provider, the health care provider’s 
estate, 
and 
those 
conducting 
the 
health 
care 
provider’s 
business, 
including 
the 
health 
care 
provider’s health care liability insurance carrier, 
are liable for malpractice for no more than the limits 
expressed in sub. (4) or the maximum liability limit 
for which the health care provider is insured, 
whichever is higher, if the health care provider has 
met the requirements of this chapter. 
 
(Emphasis added).  Under this subsection, the liability of those 
conducting the health care provider’s business may be restricted 
to the limits set forth in Wis. Stat. § 655.23(4), which, when 
read together with the other subsections of § 655.23, clearly 
apply only to health care providers.11  Alternatively, liability 
for those conducting the health care provider’s business is 
                     
11 See, e.g., 
Wis. Stat. 
§ 655.23(3)(a)(requiring 
that 
“every health care provider . . . shall insure . . . by a policy 
of health care liability insurance . . . or shall qualify as a 
self-insurer.")    
No.  96-1344 
 
18
limited by this subsection to “the maximum liability limit for 
which the health care provider is insured.”  Wis. Stat. 
§ 655.23(5)(emphasis 
added). 
 
Notably, 
nowhere 
does 
the 
subsection even mention the amount for which the one conducting 
the health care provider’s business is insured, let alone 
include it in calculating the liability cap.  
¶35 Other provisions also support the conclusion that the 
liability of those conducting a health care provider’s business 
is included within the limit of the health care provider.  
Wisconsin Stat. § 655.005(2) provides, in relevant part, that 
“[t]he [F]und shall provide coverage, under s. 655.27, for 
claims against the health care provider or the employe of the 
health care provider due to the acts or omissions of the employe 
acting within the scope of his or her employment and providing 
health care services. . . .” (Emphasis added).  Similarly, Wis. 
Stat. § 655.27(1) states: 
 
There is created [the Fund] for the purpose of paying 
that portion of a medical malpractice claim which is 
in excess of the limits expressed in s. 655.23(4) or 
the maximum liability limit for which the health care 
provider is insured, whichever limit is greater. . . . 
The [F]und shall provide occurrence coverage for 
claims 
against 
health 
care 
providers 
that 
have 
complied with this chapter, and against employes of 
those health care providers . . . .  
 
(Emphasis added).  Finally, Wis. Stat. § 655.27(5)3(d) provides: 
 
A person who has recovered a final judgment or a 
settlement approved by the board of governors [of the 
Fund] against a health care provider, or an employe of 
a health care provider, that has coverage under the 
[F]und may file a claim with the board of governors to 
No.  96-1344 
 
19
recover that portion of such judgment or settlement 
which is in excess of the limits in s. 655.23(4) or 
the maximum liability limit for which the health care 
provider is insured, whichever limit is greater. . . .  
 
(Emphasis added). 
¶36 These 
three 
provisions 
seem 
to 
demonstrate 
the 
legislature’s intention that the Fund cover claims which exceed 
the health care provider’s Wis. Stat. ch. 655 liability limit, 
whether those claims are against the health care provider or one 
of its employees.  None of the three provisions suggest that the 
assets or insurance of the employee of the health care provider 
are relevant in determining the limit on the employee’s 
liability or the amount of excess coverage which the Fund must 
provide.  Indeed, all three provisions address claims against 
the employee without even referring to the employee’s personal 
assets.  Wisconsin Stat. § 655.27(5)3(d) goes so far as to allow 
a person with a malpractice judgment or settlement to file a 
claim against the Fund without looking to the employee’s assets 
or liability insurance. We conclude that all three provisions 
evince the legislature’s intent that the Fund cover the 
employee’s liability to the extent that it exceeds the limits of 
the health care provider’s primary insurance policy. 
¶37 Based on our analysis of the legislative intent 
underlying Wis. Stat. ch. 655, we hold that any liability of a 
non-health care provider which arises while he or she is 
conducting a health care provider’s business, together with the 
liability of the health care provider itself, is limited to the 
amount of primary coverage mandated by Wis. Stat. § 655.23(4) or 
No.  96-1344 
 
20
the amount of coverage actually carried by the health care 
provider, whichever is greater.  See § 655.23(5).  Since the 
Fund is required by Wis. Stat. § 655.27(1) to pay any amounts in 
excess of this limit, the Fund does not have subrogation rights 
to bring an action for contribution against one conducting a 
health care provider’s business who does not independently 
qualify as a health care provider, or his or her insurer. 
¶38 The Fund argues that under this court’s decision in 
WHCLIP, it has an implied power under Wis. Stat. ch. 655 to sue 
the insurer of any responsible party that refuses to contribute 
to a malpractice settlement.  WHCLIP, however, involved a 
situation distinct from the situation presented by this case.   
¶39 In WHCLIP, the primary insurer of a Wis. Stat. ch. 655 
health care provider refused to pay part of the settlement in a 
malpractice claim against the health care provider.  WHCLIP, 200 
Wis. 2d at 605, 608.  This court held that the Fund, in its 
capacity as the health care provider’s excess liability insurer, 
was subrogated to the rights of its insured to sue the primary 
liability insurer for the amount of the policy limits.  Id. at 
604, 618.  We reasoned that if the Fund did not have the 
authority to sue the primary insurer, the Fund would be forced 
to pay the statutorily mandated insurance limit of the primary 
insurer as well as the excess liability amount.  Id. at 613.  
Since such a payment by the Fund would contravene the express 
language of Wis. Stat. § 655.27(1), we concluded that there was 
“no reasonable doubt” that the legislature intended that the 
No.  96-1344 
 
21
Fund be able to sue the primary insurance carrier for the 
statutorily mandated coverage amount.  Id. at 612.        
¶40 Unlike WHCLIP, this case does not involve a claim that 
the Fund is subrogated to the rights of its insured to sue the 
insured’s primary liability insurer.  In contrast, this case 
involves the Fund’s claim that it is subrogated to the rights of 
its 
insured 
to 
seek 
contribution 
from 
another 
potential 
tortfeasor who is not a Wis. Stat. ch. 655 health care 
provider.12  The payment by the Fund of Nurse Cowell’s alleged 
fair share of the settlement amount does not contravene any 
provision of ch. 655.  Rather, as we have already pointed out, 
Nurse Cowell’s alleged liability is covered under Lutheran 
Hospital’s liability insurance, and the Fund is required by ch. 
655 to pay the rest.  Therefore, not only is there “reasonable 
doubt” as to whether the legislature intended the Fund to have 
the subrogation rights it asserts in this case, but the purpose 
underlying ch. 655 and ch. 655 itself strongly suggest that the 
legislature did not intend the Fund to have such rights.  
¶41 The Fund also argues that this court's ruling in 
Wisconsin Patients Compensation Fund v. St. Paul Fire & Marine 
Ins. Co., 116 Wis. 2d 537, 342 N.W.2d 693 (1984), requires that 
we allow the Fund to bring its contribution claim.  In St. Paul, 
we held that the $1.1 million total limit of a physician's 
insurance policies must be exhausted before the Fund's liability 
                     
12 In WHCLIP, this court specifically declined to address 
the Fund’s ability to bring a claim for contribution under the 
facts of that case.  See WHCLIP, 200 Wis. 2d at 619 n.16.    
No.  96-1344 
 
22
began under Wis. Stat. ch. 655.  St. Paul, 116 Wis. 2d at 538.  
We reasoned that we should not relieve the physician's insurers 
of their contractual burdens when neither the language nor the 
purpose of ch. 655 would support our doing so.  See id. at 548. 
  
¶42 Although the Fund urges us to apply the St. Paul  
rationale in this case and to require American Family to pay the 
$300,000 limit on Nurse Cowell's insurance policy, we decline to 
do so.  There is a fundamental difference between the St. Paul 
case and this one:  in St. Paul, we were dealing with the 
insurer of a Wis. Stat. ch. 655 health care provider, and in 
this case, we are not.  Since the Fund does not have subrogation 
rights which would allow it to reach the assets of one 
conducting a health care provider's business who is not himself 
or herself a health care provider, the Fund cannot reach the 
insurer of such a person.   
C. 
¶43 Applying our conclusion to the facts of this case, we 
hold that Nurse Cowell, as an employee of Lutheran Hospital, was 
one conducting the hospital’s business at the time of her 
alleged negligence in the Stach case.  As we have already 
established that Nurse Cowell is not a Wis. Stat. ch. 655 health 
care provider, her liability is restricted to the amount of 
Lutheran Hospital’s limit and is covered by Lutheran Hospital’s 
primary 
insurance 
coverage. 
 
Lutheran 
Hospital 
possesses 
$400,000 of coverage, which is the minimum amount of coverage 
required by Wis. Stat. § 655.23(4).  Therefore, the defendants 
No.  96-1344 
 
23
have $400,000 in total coverage which is subject to the Fund’s 
contribution claim.13  The Fund may not bring a contribution 
claim against Nurse Cowell or American Family for her $300,000 
policy, since Nurse Cowell is not herself a health care 
provider. 
D. 
¶44 Finally, we note that the parties in this case agree 
that the decision of the court of appeals should be modified to 
the extent that it limits the Fund’s subrogation rights to suits 
against health care providers or their insurers.  In this 
opinion, we hold only that the Fund does not have subrogation 
rights which would permit it to pursue a claim for contribution 
against one whose alleged negligence arose while he or she was 
conducting a health care providers' business, when that person 
is not a Wis. Stat. ch. 655 health care provider or a health 
care provider's insurer.  We express no opinion on the Fund’s 
ability to sue those who do not fall under ch. 655 by virtue of 
the facts that they are not health care providers and their 
alleged negligence did not arise while they were conducting a 
health care provider's business.     
IV. 
¶45 We conclude that the Fund does not have subrogation 
rights which would allow it to bring a claim for contribution 
                     
13 We note that Lutheran Hospital has already paid $200,000 
toward the Stach settlement.  Based on statements made during 
oral argument, Lutheran Hospital apparently does not contest 
that the other $200,000 of its policy limit is subject to the 
Fund’s contribution claim.  
No.  96-1344 
 
24
against one whose alleged negligence arose while he or she was 
conducting a health care provider's business, when that person 
is not a Wis. Stat. ch. 655 health care provider or a health 
care provider's insurer.   Any alleged negligence of those 
conducting a health care provider’s business is included in the 
limit imposed by ch. 655 on the liability of the health care 
provider.  See Wis. Stat. § 655.23(4), (5).   
¶46 Pursuant to Wis. Stat. § 655.27(1), the Fund is 
required to pay the part of a successful claim against one 
conducting a health care provider’s business which exceeds the 
amount of the health care provider’s statutorily mandated 
insurance coverage or the amount for which the health care 
provider 
is 
actually 
insured, 
whichever 
is 
greater.  
Consequently, in this case, the Fund may not sue Nurse Cowell or 
her insurer for contribution toward the settlement in the Stach 
case. 
By the Court.—The decision of the court of appeals is 
affirmed. 
Case No. 96-1344 
 
1