|Money paid by insurance company can be deducted from total settlement
To obtain a free copy of the opinion in Price v. PPCIGA, contact Kristy Mitchell ([email protected])
Payments made by a health insurance company to the plaintiffs may be deducted from the total settlement award from a doctor�s insurer, the Pennsylvania Superior Court ruled on March 19 in Price v. Pennsylvania Property and Casualty Insurance Guaranty Association.
According to the opinion, the appeal arose from a medical malpractice suit filed by the Prices against three doctors. The Prices won settlement against the physicians for negligent prenatal care of the mother, causing permanent injury to their daughter, Megan. The Prices were reimbursed $545,924 of nearly $800,000 in bills from their health insurer for Megan�s medical expenses.
The opinion stated that each doctor was covered with a policy limit of $200,000. During trial, the Prices agreed to a $3.1 million settlement in return for releasing the physicians from further litigation, except on the issue of whether PPCIGA was entitled to an offset. The CAT Fund agreed to pay $2.5 million and PPCIGA took responsibility for the remaining $600,000. PPCIGA then paid $54,076 of the $600,000 settlement to the Prices, assuming it was entitled to an offset. PPCIGA was granted summary judgment by the trial court after the Prices filed a complaint to compel PPCIGA to pay the entire settlement.
The Prices then appealed to the Superior Court. In their first argument, the Prices stated that Megan�s claims were separate from her parents�. They stated that Pennsylvania law says the parents may be compensated for their child�s injuries while she is a minor, but the child may be compensated for pain and suffering after minority. The Prices went on to say that Megan did not receive payments from other insurers because she was not legally entitled to them.
The court noted that, �as a result of the Prices� demand for personal compensation in the negligence action, the medical expenses sought were also covered in the settlement agreement.� The court went on to say �Whether daughter could have personally received medical payments is immaterial where her parents sought individually compensation for medical expenses incurred for daughter�s treatment and subsequently settled their claims.� The court concluded that the trial court did not err by determining that PPCIGA was entitled to an offset.
In the Prices� second argument, they state that if PPCIGA is entitled to an offset, it should be applied proportionally. The Superior Court wrote with regard to that argument, �Initially, we note that the cases on which the Prices rely, namely Strickler, Storms, and Panea, do not remotely support the imposition of a proportionate offset. The central question in all three cases was whether PPCIGA could obtain any offset not how that offset was to be calculated.� The court therefore found the second argument invalid.
The court then looked at the statutory language to determine whether PPCIGA was entitled to an offset. The court determined that the plain language of Section 991.1817 of Title 40 states that �PPCIGA may deduct from its liability under the settlement agreement, whatever the Prices recovered under their health insurance policies attributable to daughter�s medical expenses. The Prices fail to demonstrate, and we do not discern, any ambiguity as to how PPCIGA�s offset is to be calculated. Therefore, we need look no further than the plain meaning of Section 991.1817 to understand its application. Based on that plain meaning, we conclude that the Prices� contention that PPCIGA is entitled to a proportionate offset is without merit.�
The order of the trial court was affirmed.
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