Court Opinion

ID: 9718728
Source: CourtListenerOpinion
Date Created: 2023-08-26 07:32:05.457869+00
Date Added: 2024-06-11T18:24:02.034311
License: Public Domain

Concurring and Dissenting OPINION BY
SHOGAN, J.:
¶ 1 I concur in the result reached by the Majority with the exception of the reversal of the judgment notwithstanding the verdict (“JNOV”). For the reasons set forth below, I respectfully dissent from the Majority’s conclusion as it pertains to the JNOV and the release entered into by the Tindalls and Dr. Schweitzer.
¶ 2 As noted in the Majority Opinion, Jefferson Imaging moved for a JNOV and argued that an agreement between the Tindalls and Dr. Schweitzer, the ostensible agent of Jefferson Imaging, relieved Jefferson Imaging of any liability. The agreement in question was that Dr. Schweitzer would pay to the Tindalls $400,000, the limits of his primary professional policy of insurance. This agreement was entered into, regardless of the verdict, in exchange for the Tindalls’ agreement not to execute on Dr. Schweitzer’s person*1179al assets if the verdict was in excess of Dr. Schweitzer’s professional insurance limits and any amount paid from the Medical Care Availability and Reduction of Error Act (“MCARE”), 40 P.S. § 1303.101-1105, fund.1 Ultimately, the trial court concluded that Jefferson Imaging was entitled to JNOV.
¶ 3 Initially, I note that
a JNOV can be entered upon two bases: (1) where the movant is entitled to judgment as a matter of law; and/or, (2) the evidence was such that no two reasonable minds could disagree that the verdict should have been rendered for the movant. When reviewing a trial court’s denial of a motion for JNOV, we must consider all of the evidence admitted to decide if there was sufficient competent evidence to sustain the verdict ... Concerning any questions of law, our scope of review is plenary. Concerning questions of credibility and weight accorded the evidence at trial, we will not substitute our judgment for that of the finder of fact ... A JNOV should be entered only in a clear case.
Parker v. Freilich, 803 A.2d 738, 744 (Pa.Super.2002) (citation omitted), appeal denied, 573 Pa. 659, 820 A.2d 162 (2003).
¶4 In its post-trial motion, Jefferson Imaging argued that it was entitled to JNOV because all claims against it had been released under the terms of an agreement that was made between the Tindalls and Dr. Schweitzer. The trial court concluded that the agreement released Jefferson Imaging from liability. The trial court relied on Mamalis v. Atlas Van Lines, Inc., 522 Pa. 214, 560 A.2d 1380 (1989), wherein the Pennsylvania Supreme Court held that the termination of a claim against the agent extinguishes the derivative claim against the principal. I conclude there was no error in the trial court’s decision to grant the motion for JNOV in favor of Jefferson Imaging as the ostensible principal.
¶ 5 The record reflects that the Tindalls agreed to accept from Dr. Schweitzer $400,000, the limits of his primary professional policy, in exchange for the Tindalls’ promise not to execute against Dr. Schweitzer’s personal assets in the event of a verdict in excess of Dr. Schweitzer’s professional liability insurance. See Letter Memorializing Agreement, 6/8/04. The operative effect of the agreement was to release Dr. Schweitzer from further liability. Pursuant to Mamalis, the agreement also extinguished the derivative claim against Jefferson Imaging, as a matter of law, because Dr. Schweitzer was the agent of Jefferson Imaging. While the language of a letter executed after trial reflects that the Tindalls and Dr. Schweitzer (with no participation by Jefferson Imaging) stipulated the agreement was not a release (see Letter Memorializing Agreement, 6/8/04, at 1-2), such stipulation does not alter the legal result of the agreement. The agreement effectively terminated the claim against Dr. Schweitzer and, therefore, extinguished the Tindalls’ only remaining claim against the principal, Jefferson Imaging. See Mamalis, 522 Pa. at 221, 560 A.2d at 1383 (holding that an agent and its principal are not joint tortfeasors under Pennsylvania law where liability of the principal is vicarious, and that termination of the claim against the agent extinguishes the derivative claim against the principal; a claim of vicarious liability is indivisible and inseparable from the claim against the agent since any cause of action is based on the acts of only one tortfeasor).
¶ 6 The Majority posits that the agreement should not be construed as a release because MCARE was still involved and remained an insurance policy and personal asset of Dr. Schweitzer. I cannot agree.
*1180¶ 7 Pursuant to MCARE, health care providers have the ability to enter into release agreements with claimants. In this respect, MCARE provides as follows:
§ 1303.714. Medical professional liability claims
* * *
(e) Releases. — In the event that a basic coverage insurer or self-insured participating health care provider enters into a settlement with a claimant to the full extent of its liability as provided in this chapter, it may obtain a release from the claimant to the extent of its payment, which payment shall have no effect upon any claim against the fund or its duty to continue the defense of the claim.
40 P.S. § 1303.714(e). Thus, Section 1303.714(e) provides for an unqualified release in this situation, despite the fact that a claim remains against the fund and the basic coverage insurer has a duty to continue to defend that claim.
¶ 8 I agree with the Tindalls that the agreement between them and Dr. Schweitzer had no effect on any coverage under MCARE. However, that issue is of no moment as the disposition in this case is controlled by Mamalis and compelled by the legislature’s enactment of Section 1303.714. Jefferson Imaging was released as a matter of law pursuant to Mamalis and Section 1303.714 because the claim against Jefferson Imaging was indivisible and inseparable from the claim against Dr. Schweitzer.
¶ 9 I reiterate, as a matter of law, plaintiffs and agents/health care providers cannot unilaterally contract around the protections provided principals under Mamalis and Section 1303.714. As stated by the trial court, the Mamalis holding “cannot be altered by the terms of an agreement in which the ostensible principal did not join, no matter how artfully drafted.” Supplemental Trial Court Opinion, 8/11/05, at 5 (emphasis in original).
¶ 10 The Majority, while presenting a thoughtful rationale, comes to a conclusion on this issue with which I respectfully cannot agree. In the Majority, it is asserted that MCARE is an asset of Dr. Schweitzer’s that remained subject to liability. However, MCARE is not a personal asset; it is a statutorily mandated public fund. It is inaccurate to refer to the fund as an asset of the physician. This mis-characterization is further evidenced by the agreement between Dr. Schweitzer and the Tindalls themselves. The agreement released Dr. Schweitzer’s personal assets. Therefore, under the Majority’s rationale, if the fund were an asset, it was released with Dr. Schweitzer’s other assets. However, MCARE remains liable in this matter, and the fund cannot be considered an asset because Dr. Schweitzer’s assets were released.2
*1181¶ 11 Additionally, the Majority states that Brown v. Cooke, 707 A.2d 231 (Pa.Super.1998) is instructive and that it illustrates how the terms of a release prevented a claim from being extinguished against a secondary policy of insurance. However, it is undisputed that the Tindalls reserved the right to recover against the MCARE fund in this case. Furthermore, Brown is factually distinguishable and does not address, no less answer, the specific question presented by this case.
¶ 12 Brown was not an agency case and did not involve or discuss the principle of law enunciated in Mamalis. Brown concerned a claim against a secondary policy of privately purchased insurance. All other claims were released by the agreement in that case. In addition, the facts in Broim were markedly different as the excess insurer, Allstate Insurance Company, was clearly not a principal of either the primary automobile insurance carrier, Travelers Insurance Company, or the driver/defendant. Moreover, Brown did not involve or discuss MCARE, or the rationale underpinning the holding in Mamalis.
¶ 13 As noted above, the Supreme Court made clear that parties cannot contract around Mamalis by holding, as a matter of law, that the release of an agent extinguishes any claim against a vicariously liable principal. Mamalis, 522 Pa. at 221, 560 A.2d at 1383. Furthermore, the legislature has spoken in this area and reinforced the Mamalis principle in the MCARE context by the enactment of 40 P.S. 1303.714(e).
¶ 14 Finally, there is a clear public policy consideration behind the rationale posited in Mamalis and reinforced within the MCARE context by Section 1303.714(e). An obvious concern is that if the agreement in question in the instant case does not extinguish the claim against Jefferson Imaging, and Jefferson Imaging is liable for the excess verdict solely as Dr. Schweitzer’s principal, Jefferson Imaging may seek to recover against Dr. Schweitzer. Such a scenario would nullify the agreement and arguably conflict with 40 P.S. § 1303.714(e) (releases under MCARE). That is precisely the situation our Supreme Court sought to avoid when it held in Mamalis that vicariously liable principals and agents are not joint tortfea-sors under the Uniform Contribution Among Joint Tortfeasors Act (UCATA). From a public policy perspective, a circuitry of litigation, including indemnification claims between principals and agents, would be created which would only act to discourage settlements in this area. I discern no error in the trial court’s conclusion on this issue, and I, therefore, respectfully dissent.

. Jefferson Imaging was not a party to the agreement.

. The Majority appears to also mischaracterize the facts of the case on this narrow issue. The Majority states that the Tindalls did not “give up" or "abandon" their claims against Dr. Schweitzer and hence did not release him. Majority Op., at 1166. Aside from the fact that it is undisputed that the MCARE fund remained a viable source of recovery and that Section 1303.714(e) requires a basic coverage insurer to continue to defend when a claim against MCARE remains, a review of the record reflects that the Tindalls did effectively release Dr. Schweitzer. By agreeing to settle against Dr. Schweitzer for the full amount of his insurance policy, in conjunction with their promise not to execute against his personal assets, they released Dr. Schweitzer from liability. Any language indicating otherwise in the letter memorializing and defining the terms of their agreement, which was executed after the verdict, is of no moment as a matter of law pursuant to Mamalis and Section 1303.714(e). As stated in the Majority, 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 *1181legal effect as a whole[.]” Majority Op., at 1166 (quoting Kenney v. Jeanes Hospital, 769 A.2d 492, 496 (Pa.Super.2001)). Thus, even if construed as a limitation on the Tindalls’ pool of recovery, the agreement similarly limited recovery against Jefferson Imaging because the claim was indivisible and inseparable.