Opinion ID: 1969926
Heading Depth: 1
Heading Rank: 6

Heading: Remaining Claims of HMC

Text: As we previously noted, in addition to the request for declaratory relief, HMC asserted the following causes of action: violation of the Act, indemnification, subrogation, estoppel, quasi contract, denial of due process and equal protection, and bad faith. Based upon our review of the complaint and the Opinion of the Commonwealth Court, it is clear that the determination that the Fund properly declined to make payment until the exhaustion of the insurance of the primarily liable physicians established that the Fund did not wrongfully withhold payment. HMC's causes of action based on the Act as well as its indemnification, subrogation, constitutional [10] and bad faith claims were predicated explicitly or implicitly on its allegation that the Fund violated the Act by wrongfully withholding payment. Because our statutory analysis establishes that the Act permitted the Fund to withhold payment, we agree with the determination of the Commonwealth Court that its decision to grant declaratory judgment permitted the dismissal of HMC's claim that the Fund violated the Act as well as HMC's indemnification, subrogation, constitutional and bad faith claims. However, we are unable to affirm the dismissal of the estoppel and quasi contract causes of action because the Commonwealth Court did not fully explain why the grant of declaratory relief requires their dismissal. In those causes of action, HMC averred that the Fund's policy of declining to pay vicarious liability claims until the insurance of the primarily liable physician was exhausted was recently asserted and that it had reasonably relied upon the agency's prior conduct when it made its excess insurance decisions. The Commonwealth Court deemed these claims legally sufficient to overcome preliminary objections asserted by the Fund. See Hershey Med. Ctr. v. Commonwealth, Med. Prof'l Liab. Catastrophe Loss Fund, 763 A.2d 945, 950-51 (Pa.Cmwlth.2000). Moreover, the Fund's denials, addressed to the relevant averments of the complaint, appear to have implicated factual questions, because the Fund specifically denied that its policy was recently asserted, and instead contended that its position is and always has been that all available coverage on a directly liable health care provider must be exhausted before the Fund will contribute toward settlement on behalf of a health care provider who is solely vicariously liable. HMC II, 788 A.2d at 1077. The Commonwealth Court did not explain how affirmation of the validity of the Fund's present approach to the payment of claims based on vicarious liability awards eliminates the estoppel claim or the quasi contract claim predicated on asserted, previous conduct. Indeed, this Court has explained that there are some circumstances in which an agency's previous actions may serve as the basis for estoppel, even where such actions violated positive law. See Chester Extended Care Ctr. v. Commonwealth, Dep't of Pub. Welfare, 526 Pa. 350, 586 A.2d 379, 383 (1990). Because we are unable to resolve the estoppel and quasi contract claims, we remand those claims to the Commonwealth Court with instructions to either: explain why it believes the claims should be dismissed or conduct further proceedings. The remainder of the Order of the Commonwealth Court is affirmed. As a result, declaratory relief is granted in favor of the Fund and HMC's causes of action based on the Act as well as its indemnification, subrogation, constitutional, and bad faith claims are dismissed. Former Chief Justice ZAPPALA did not participate in the decision of this case.