Opinion ID: 2395541
Heading Depth: 1
Heading Rank: 1

Heading: Statutory Framework For Payment Priority

Text: We find the Commonwealth Court declined to accept the facts as pled by appellants and misapplied the principles surrounding global settlements in medical malpractice cases involving multiple insurers. The court failed to apply § 1301.705(a) of the Act, 40 P.S. §§ 1301.101-1301.1006, which provides for the order of payment in medical malpractice actions involving multiple insurers. Specifically, § 1301.705(a) provides: No insurer providing excess liability insurance to any health care provider eligible for coverage under the Medical Professional Liability Catastrophe Loss Fund shall be liable for payment of any claim against a health care provider for any loss or damages except those in excess of the limits of liability provided by the Medical Professional Liability Catastrophe Loss Fund. Further, in American Casualty Co. of Reading Pa. v. PHICO Insurance Co., 537 Pa. 295, 643 A.2d 91 (1994), we indicated that the order of payment of insurance proceeds must be determined by reference to § 1307.705(a); the first $200,000 of liability must be borne by the primary carriers, the CAT Fund is obligated to pay the next $1 million and the excess carrier is responsible for the amount of the judgment that exceeds the underlying limits. Id. at 301-03, 643 A.2d at 95. In the case sub judice, the Commonwealth Court rejected appellants' allegations that the CAT Fund had exclusive authority and control over settlement negotiations and owed the next $1 million of any settlement involving the Hospital or Dr. Willet after receipt of the tenders of the parties' basic liability coverage. Amended Complaints: Dr. Willet at ¶ 11, Hospital at ¶ 24. In rejecting the allegations that the CAT Fund was the entity that owed the next share of the settlement claim and had exclusive authority over settlement negotiations during the period for which indemnity is sought, the lower court misapplied the standards established in The County of Allegheny, supra, and the statutory framework in 40 P.S. § 1301.705(a) and American Casualty Co., supra .