author: BERNSTEIN, J.,

text:
    General Refractories Co. v. Fireman’s Fund Insurance Co.

      Andrew Butz and John N. Ellison, for plaintiff.

      Richard L. McMonigle Jr., David F. Abemethy, David R Bruton, Wilson M. Brown III and Susan Kennedy, for defendant.
    April 20, 2000
   BERNSTEIN, J.,

For five years, case management in Philadelphia County has been conducted pursuant to General Court Regulation 95-01. This coordinated progression of cases from filing to trial has eliminated a case backlog which had achieved epic proportions. Cases are now brought to trial in Philadelphia County within American Bar Association recommended standards for trial courts.

The clear and enforced deadlines for discovery and motion practice initially caused difficulty for many practicing members of the bar. Due to excellence in skill and cooperation in spirit, the trial bar adjusted. Philadelphia lawyers have devoted countless hours of pro bono work resolving cases as trial judges pro temp and settlement masters. The local bar has adjusted to a new and very different case management system, managing unanticipated problems with grace and cooperation, while treating opposing counsel with honesty, candor and civility. In stark contrast to the vast number of attorneys in our court, a few lawyers have seized upon enforced deadlines as an opportunity to take unfair advantage of the reasonableness and civility of opposing. Under the guise of negotiation and compromise those few who employ “slash and bum” litigation, delay legitimate discovery requests, pretend to be cooperative, dissuade recourse to discovery court, blame their client for failings and make repeated promises, all the while keeping one eye vigilantly on the clock, awaiting the moment when they can pounce upon unsuspecting prey to claim unjustified protection by the passage of a deadline. Unfortunately, in the matter before the court, Fireman’s Fund Insurance Company through the action of their pro hac vice counsel has adopted this dysfunctional approach.

This is a claim for breach of contract, breach of fiduciary duty and bad faith pursuant to 42 Pa.C.S. §8371, brought by an insured, General Refractories, against its insurance carrier, Fireman’s Fund, seeking declaratory relief and monetary damages. Plaintiffs are corporations which over many years manufactured heat resistant products used in the construction of high temperature facilities. Plaintiff is a defendant in thousands of cases seeking damages for bodily injuries resulting from exposure to asbestos contained in plaintiff’s products. Defendant, an insurance company, provided plaintiff with excess liability coverage applicable to these asbestos insurance claims.

Prior to suit, plaintiff made demand upon defendant for coverage pursuant to their policy of insurance, requesting indemnification and costs of defense. After providing defendant with all reasonably requested documentation to document their claim and after attempting to resolve these coverage questions amicably, plaintiff filed suit. This suit seeks a judgment directing defendant to fulfill its obligations under the liability policy, requests compensatory damages for breach of contract, punitive damages, costs, and attorney’s fees pursuant to the bad faith statute.

This motion was brought by plaintiff seeking the ultimate sanction of judgment against defendant because Mr. West, the central representative of defendant before this lawsuit was filed, lied under oath at his deposition when he said documents did not exist. Plaintiff claims that pro hac vice litigation counsel for defendant knew that the testimony was perjurious when offered, did not correct the testimony, and actively concealed the documents. At his deposition, Mr. West testified that no notes of conversations with plaintiffs existed and nothing other than billing information was on his computer. In fact, computer notes of conversations and numerous computer generated e-mail messages existed. These records, which were then, and are now, on defendant’s computers, had been independently requested of defendant in discovery prior to the deposition and were also covered by the subpoena issued to Mr. West directing him to bring records to the deposition. These records were not produced.

Despite the denial at Mr. West’s deposition, defendant’s same litigation counsel used these hidden documents during a subsequent deposition of plaintiff’s principle, Barry Katz. Following Mr. Katz’ deposition, Mr. West’s deposition resumed. Mr. West then acknowledged the existence of notes. Defendant’s counsel, Mr. Butz, still alleged he did not know of their existence, and continued to refuse to produce them, claiming a need to review.

Initially presented along with a hundred other motions on other cases in discovery court, this court heard oral argument over a four-day period, reviewed voluminous filings, memoranda, appendices and exhibits and has determined that the defendant’s conduct in concealing the West computer records and numerous other highly significant documents was intentional, inexcusable, and warrants severe sanctions. Indeed, defendant’s conduct throughout discovery and evidenced by disingenuous behavior during this very motion, calls into question the accuracy and completeness of all discovery to date. While actively hiding highly probative documents, defendant filed a motion for summary judgment which has providently been denied.

Unfortunately the case has a torturous discovery history. Numerous discovery orders have been entered against the defendant. On July 28, 1998, plaintiff submitted to the defendant a first set of documents requests. On June 14, 1999, 11 months later, the defendant was ordered by Administrative Judge Herron to provide full and complete answers within 20 days. After this court-ordered deadline had passed, Mr. Andrew Butz of the law firm of Gilberg and Kieman, inaccurately claimed “Fireman’s Fund has produced all relevant non-privileged documents and communications relating to this case, including all communications with plaintiffs and all non-privilege internal communications relating to plaintiffs’ coverage of insurance from Fireman’s Fund.” Six months later by letter dated December 3,1999, Mr. Butz inaccurately stated: “We can now report that we have checked the paper and electronic files kept by all persons at Fireman’s Fund ... and have determined the following: Messrs. Preisman, Forsman, Pevey and Ibello have not retained any such electronic or paper documents outside the regular claims file for GRX.” Counsel repeatedly made other assurances of compliance.

Months later, during the several days of argument on this motion, it became clear that the discovery previously ordered by the court and overdue by 18 months had not yet been produced. On December 23, 1999, this court entered another discovery order. Following the court’s December 23, 1999 directive, hundreds of documents that should have been previously produced pursuant to Judge Herron’s order entered six months earlier, were “found.” Numerous additional documents were then “voluntarily” produced to plaintiff. Also following this court’s order, scores of documents were added to a previously submitted “privilege log.” The log of documents which defendant claims is privileged has continually expanded as new documents are “found.” Pursuant to this court’s order, a box of documents was produced for “in camera” review. So many new documents were produced, that defendant Fireman’s Fund filed a motion to appoint a special master claiming that actually reviewing the documents would place an undue burden on the court. That motion was denied. This court has reviewed the contents.

The sad history of defendant’s discovery responses in this case reveals a clear pattern of delay, stonewalling, deception, obfuscation and pretense. Defendant intentionally withheld critical documents, ignored court orders, permitted false testimony at depositions and misrepresented facts to opposing counsel and the court. The defendant, through its employees, its house counsel and its engaged litigation counsel participated in an intentional campaign to hide critical facts and documents. At every stage of discovery, reasonable and relevant requests have been met by incomplete responses, unreasonable objections, unfounded claims of privilege and intentionally incomplete “privilege” logs. Whenever plaintiff .sought court intervention additional documents were “found,” “voluntarily produced” and the privilege log expanded. Finally, defendant found hundreds of additional documents and submitted a box of documents entitled “J. Richard West, attorney file submitted under seal for review in camera with privilege log pursuant to court order dated December 23, 1999.” It is conspicuously odd in character.

Contained in the box are obviously not privileged letters to the plaintiff in this case concerning the weather forecast for San Francisco, and letters and e-mails to reschedule meetings, and teleconferences. The cover sheets of faxes are found but incomplete documents or no documents are attached. The box includes numerous letters from the plaintiff, numerous duplicate copies, and a map sent to the plaintiff. Submitted to the court as privileged are docket entries from the U.S. District Court, correspondence from the deputy clerk from the United States District Court of the Eastern District of Pennsylvania requesting $2.40 payable to the clerk of the U.S. District Court and a copy of a check in the amount of $2.40. Memos found in the box make reference to attachments without attachments. Full copies of other insurance companies insurance policies and underwriting files are enclosed as are 302 pages marked “quarterly status reports” which identify numerous e-mails that are blank except for identification from who sent, date sent and subject matter.

Amidst hundreds of such insignificant, nonsensical or unintelligible pages, are material and significant submissions that demonstrate that the defendant engaged in an intentional effort to obstruct legitimate discovery by using the claim of privilege. Defendant has attempted to hide discoverable documents, in an attorney’s file, and have used an overly broad, clearly untenable, theory of “privilege” to conceal the knowledge, activity and intent which form the very basis of this bad faith lawsuit. The purportedly privileged material demonstrates a strategy antagonistic to their insured including discussion of bad faith, delaying payment, and admissions of fiduciary obligations.

An insurance company owes any insured a duty of good faith dealings. Indeed this is a fiduciary relationship. A complete picture of the defendant’s dealings with its insured in this case including what is revealed in the hidden documents, reveals a carrier which used captive counsel as an integral part of its claims department, engaging in a common strategy of claims handling which kept its own financial interests paramount, to the detriment of the insured. Concerned with protecting its own funds, to the detriment of its insured, in a conscious effort to avoid this very claim of bad faith, defendant attempted to use counsel to construct a “privilege” wall against discovery of the true nature of their decision-making. This was no client-attorney relationship. Mr. West is an employee of the defendant acting not as counsel but as an adjuster with a law degree. There is no privileged relationship.

Numerous important documents have been hidden in Mr. West’s files. Contained among the purportedly privileged material is a highly significant memo dated March 12, 1998, from David E. Forsman, a claims representative with defendant, to Leonard Preisman another claims representative with defendant, neither of whom is an attorney. There is no colorable claim of attorney-client privilege or work product privilege applicable to this memo. The only reason the court can imagine that it has not been long ago turned over is that the contents of this internal memo from one employee of the defendant insurance company to another employee of the defendant company is that it is extremely damaging to any defense to a claim of bad faith. To create a pretense that this memo is protected, it is attached, in the copy submitted in the box for in camera review, to another memo from Richard West to Leonard Preisman. This is a blatant and transparent attempt to bury a discoverable document in an attorney’s file. Other internal memoranda on which a privilege is claimed have no privilege and yet are attached to memos from Mr. West. Other documents on which a purported claim of privilege is being made are nothing other than memos of Mr. Preisman. A claim of privilege is asserted for notes made by Mr. Preisman, shared with no one. Numerous other documents identified on the privilege log have yet to be submitted to the court for in camera review.

The attorney work product privilege is grounded in Rule 4003.3 of the Rules of Civil Procedure which define the scope of discovery. This insulates from discovery “disclosure of the mental impressions of a party’s attorney or his conclusions, opinions, memoranda, notes, or summaries, legal research, or legal theories.” In effect since April of 1979, the rule restricted the previously broader attorney work product privilege. The rule must be read literally and not expanded. Otherwise, discoverable documents cannot be hidden by providing them to an attorney or by maintaining them in an attorney’s file. The rule immunizes only mental impressions, conclusions, opinions, memoranda, notes, summaries, legal research and legal theories of the attorney, nothing more. The defendant claims privilege for documents hidden in an attorney file, that claim is overruled and all such documents are to be provided to plaintiff.

The attorney work product privilege is inapplicable where the legal opinion of an attorney is directly relevant to a cause of action. In a case such as malicious prosecution, or abuse of process, legal malpractice, bad faith, or any other action where the opinion of counsel is in question, there is no work product protection. Where the legal opinion of a party’s attorney is relevant in an action, it is discoverable. (See for example: Nedrow v. Pennsylvania National Mutual Casualty Insurance Company, 31 D.&C.3d 456 (1981), an action for common-law bad faith.) The Superior Court has unambiguously ruled that such documents are discoverable in a statutory bad faith action. See The Birth Center v. St. Paul Companies Inc., 727 A.2d 1144 (Pa. Super. 1999), where the court said:

“Moreover, where the legal opinions, conclusions, memoranda, notes or summaries, legal research or legal theories become a relevant issue in a case, the law of Pennsylvania is that the party seeking discovery need not show substantial need and undue hardship to obtain discovery of such materials.” Id. at 1165.

Where the actions of counsel are placed directly in question by the substantive claim there is no privilege. Where, as here, counsel is integrally involved in claims handling, the facts of the insurance company’s dealing with its insured cannot be insulated from discovery. An insurance company may not ignore the advice of counsel concerning its obligations to an insured, cannot seek advice concerning bad faith and thereafter hide their knowledge and the documentation of intent behind a claim of privilege when sued for bad faith. An insurance company may not hide knowledge that a claim must be paid or strategies for delay by hiding documents in an attorney’s file. As to documents that demonstrate the knowledge and pre-litigation activities of defendant there is no valid claim of privilege or work product protection and all such documents are to be provided to plaintiff.

In addition to compliance with plaintiff’s proper discovery requests, plaintiff seeks sanctions for defendant’s conduct. Defendant’s conduct is sanctionable.

Plaintiff seeks judgment. Plaintiff rightly claims that bad faith in the conduct of discovery is itself actionable under 42 P.S. 9271. (See for example: Rottmund v. Continental, 813 F. Supp. 1104 (1992).) Although directly actionable, under the bad faith statute, discovery abuses are not actionable in the same case in which they occur. Judgment is the extreme sanction and may be excessive punishment for even outrageous conduct where the prejudice, however severe, is capable of being cured. The proper sanction may be the minimum sanction that accomplishes the goal of correcting the discovery abuses, restores the case to a proper discovery course, appropriately punishes recalcitrant behavior and deters future obstreperous conduct by this defendant in this case.

The court has determined that no privileged attorney-client relationship existed and accordingly there is no privilege. The court further finds that the activities and advice of Mr. West in the pre-litigation claims handling of the demand for indemnification and defense which forms the basis of this claim constitutes the essence of the issue and is thereby discoverable. The court further finds defendant’s obdurate conduct, including actions demonstrating an intent to obstruct the discovery process, constitutes a waiver of any and all right to assert the attorney-client or work product privileges as it relates to Mr. West. The court further finds that numerous probative documents, on which no good faith claim of privilege can reasonably be asserted, are still hidden in Mr. West’s files and are discoverable.

In accord with these findings and principles the following sanction order is entered.

ORDER

(1) The requested sanction of judgment in favor of plaintiff and against defendant is denied.

(2) Mr. Andrew Butz and the law firm of Gilberg and Kieman, previously admitted pro hac vice, are removed as counsel in this matter and shall not participate further in this litigation in Pennsylvania.

(3) In accordance with the affidavit of plaintiff’s counsel, defendant shall pay plaintiff the sum of $126,897.81 for time and costs expended. Said payment shall be tendered within 31 days. A certification of payment shall be filed with the prothonotary.

(4) Plaintiff may conduct additional discovery for a period of 120 days including any redepositions deemed necessary.

(5) If requested by counsel for plaintiff, all redepositions shall be conducted under direct court supervision in City Hall.

(6) The claim of privilege is overruled; all previously withheld responses to written discovery are to be provided to plaintiff within 31 days.

(7) Defendant is sanctioned in the amount of $126,897.81 payable to the City of Philadelphia for unwarranted, obstreperous and deceptive conduct in discovery. Said payment shall be tendered within 31 days. A certification of payment shall be filed with the prothonotary. If not timely paid as ordered an additional sanction of $500.00 per day shall be added and accrue until payment is made.

(8) Defendant is directed to review all previously filed discovery responses for thoroughness and accuracy and shall submit all additions and corrections within 31 days. Defendant shall review all answers to interrogatories and correct any previous answers determined to be inaccurate or incomplete within 31 days. An affidavit of compliance with this paragraph shall be filed of record within 35 days.

(9) Defendant is cautioned against a continuation of its previous course of conduct in discovery.

      . Counsel admitted to practice law in another jurisdiction have no right to practice in Pennsylvania. Upon representing that the bar of another state has found an individual of good character and adequate learning to practice law, counsel are routinely admitted pro hac vice without any investigation. Usually pro hac vice counsel comport themselves honorably and professionally. Unfortunately, the pro hac vice counsel can engage in practices not generally accepted by the legal culture of the admitting jurisdiction, secure in the knowledge that “slash and bum” tactics will not draw the loss of credibility and reputation which usually accompany such an approach. Pro hac vice counsel can engage in reprehensible conduct with the expectation of impunity because they foresee no need to ever deal with either opposing counsel or the local court on any second occasion in the future.

      . Despite 18 inches of briefs and memoranda, three “appendices” and boxes of documents, defendant has presented no statement by any person with direct knowledge, explaining either Mr. West’s testimony that no documents existed or Mr. Butz’ behavior in sitting silently at the deposition knowing that the documents did exist.

      . After having initially refused, without justification, to produce purportedly privileged documents for in camera review, defendant determined compliance was required. Nonetheless, Fireman’s Fund continues a practice of “redacting” information even in documents submitted to the court for in camera review.

      . This box has been resealed for transmission to the appellate court at such time as this order may be reviewed.


source: Caselaw Access Project

author: LEWIS, J.,

license: Public Domain

text:
    Dowhouer v. Judson

      C.P. of Dauphin County,
    no. 2548 S 1997.

      Charles W Wasilefski, for plaintiff.

      Joseph P. Hafer, for defendants Polyclinic and Pinnacle Health.

      Katherine B. Kravitz, for defendants Judson, Wisman, Travisano and Cardiovascular Surgical Institute.

      Sharon M. O’Donnell, for defendant Rubbo.
    March 10, 2000
    BEFORE: LEWIS, EVANS AND HOOVER, JJ.

   LEWIS, J.,

Presently before this court is a medical negligence action that arises as a re-suit of treatment given to plaintiff Alice M. Dowhouer by defendants from June 1995 through August 1995. Plaintiff became a patient of defendant Cardiovascular Surgical Institute on October 22,1993 on a referral from her family physician for diagnosis and treatment of peripheral vascular disease in her legs.

In April 1995, plaintiff claims that she began to experience worsening symptoms related to the disease in her legs, causing increased limping. She also contends that she began having sternal discomfort (chest pains) at times radiating into her jaw with a sense of heavy salivation and associated shortness of breath. Due to the indigestion-like symptoms and the increasing pain in her right leg, plaintiff was admitted to defendant Polyclinic Hospital for outpatient testing on April 11, 1995. Defendant Dr. Judson was asked to consult and provide recommendations for her treatment. Plaintiff asserts that Dr. Judson examined her and suggested that surgery could aid the circulation in plaintiff’s legs. He indicated that he would discuss with her his recommendation for surgical treatment of her legs at a later date in his office. Dr. Judson next saw plaintiff on May 5, 1995 as a follow-up to her April 11, 1995 consultation. He noted that her angina had become worse at this point. Plaintiff alleges that defendant Judson did not discuss leg surgery as he had suggested to her during the prior consultation. Instead, he scheduled her for coronary artery bypass surgery on a non-emergent basis. On June 20,1995, plaintiff was admitted under the care of Dr. Judson to Polyclinic Hospital for open-heart surgery. In plaintiff’s admission history, it was noted that she had increased problems in her right leg. Further, medical records indicated that pulses were not palpable below plaintiff’s groin.

Plaintiff further alleges in her complaint that no special precautions were followed to protect the right leg during or after surgery from further circulatory insult to the already compromised circulatory system. The morning after surgery, plaintiff complained of pain in her right leg to Dr. Travisano, who plaintiff alleges visited her while making his routine rounds at Polyclinic for CSI, his medical group. He diagnosed a compartment syndrome and recommended a consult with an orthopedic surgeon. Dr. Rubbo, also a physician employed at CSI, examined plaintiff later that day. Plaintiff contends that Dr. Rubbo did not order anything additional to be done to her with regard to the circulatory problems in her right leg, although he noted her symptoms. Surgery was again performed on plaintiff that evening and, in fact, between June 21, 1995 and July 6, 1995, plaintiff contends that she underwent six surgeries on her right leg that eventually resulted in an above-the-knee amputation.

Plaintiff contends that as a result of the careless and negligent manner in which defendants provided medical care and treatment, she has suffered permanent and irreparable injury, increased risk of harm, substantial medical expense, extensive physical therapy, loss of income and earning capacity, embarrassment, humiliation and loss of life’s pleasures and enjoyment.

Plaintiffs filed a complaint on December 18, 1998, and on September 8, 1999, defendants Judson, Travisano and CSI filed preliminary objections to plaintiffs’ complaint and a brief in support of their preliminary objections. Plaintiffs filed their brief in opposition to the preliminary objections on October 5, 1999.

Defendants argue three points in their preliminary objections. First, defendants allege that the facts set forth in plaintiffs’ complaint fail to set forth a cause of action for which punitive damages may be recovered. Second, defendants allege that plaintiffs have failed to state a claim based on corporate negligence against CSI. Third, defendants allege that a negligence claim which contains only allegations of a lack of informed consent does not set forth a viable cause of action, failing to state a claim upon which relief may be granted.

PUNITIVE DAMAGES

Initially, defendants contend that in paragraphs 39 and 56 of their complaint, plaintiffs allege the “gross negligence and willful and wanton careless conduct” of Drs. Judson and Travisano. Defendants claim that this language appears to be setting forth a claim for punitive damages; however, they maintain that plaintiffs’ complaint fails to set forth a cause of action for which punitive damages may be recovered.

The law in Pennsylvania regarding punitive damages is that they are only available in extremely limited circumstances. The Pennsylvania Supreme Court has held that punitive damages may not be awarded for misconduct which constitutes ordinary negligence, such as inadvertence, mistakes or errors in judgment. Martin v. Johns-Manville Corp., 508 Pa. 154, 170, 494 A.2d 1088, 1097 (1985); McDaniel v. Merck, Sharp and Dohme, 367 Pa. Super. 600, 622, 533 A.2d 436, 447 (1987), appeal denied, 520 Pa. 589, 551 A.2d 215 (1988). Since punitive damages are meant as a deterrent, they are only proper for outrageous conduct, done with bad motive or reckless indifference to the interest of others. Martin, supra at 170-71, 494 A.2d at 1097. In determining whether punitive damages are appropriate, the defendant’s state of mind is vital, and there must be an appreciation of the risk, and the failure to act must be intentional, reckless or malicious. Feld v. Merriam, 506 Pa. 383, 396, 485 A.2d 742, 748 (1984).

The Pennsylvania Supreme Court has adopted section 908(2) of the Restatement (Second) of Torts. Martin, in discussing that section, states that “[p]unitive damages may be awarded for conduct that is outrageous, because of defendant’s evil motive or reckless indifference to the rights of others.” Martin, supra at 169, 494 A.2d at 1096. Therefore, in order to establish a claim for punitive damages, a plaintiff must show that the conduct of the defendant was outrageous because of the defendant’s evil motive or his reckless indifference to the rights of others. The act, or failure to act, must be “malicious, willful, reckless or oppressive.” Id. Relying on this standard and reasoning, Pennsylvania courts have limited the availability of punitive damages only to “punish the ‘rare instances’ of ‘extreme behavior,’ ” not where facts demonstrate only “errors of judgment.” Chambers v. Domino’s Pizza, 110 Dauphin 1 (1989). (citations omitted)

This court finds that the facts of this case do not support a claim for punitive damages. Plaintiffs present no evidence of malicious, wanton, willful, reckless or oppressive conduct on the part of Drs. Judson and Travisano. Plaintiffs’ complaint is that Drs. Judson and Travisano negligently failed to treat plaintiff Alice Dowhouer’s circulatory problems properly. These allegations do not support a finding that the doctors’ state of mind was intentional, reckless or malicious. Rather, this type of activity is expressly excluded from the circumstances that would support punitive damages in Pennsylvania. Therefore, plaintiffs’ claim for punitive damages is dismissed.

CORPORATE NEGLIGENCE

Next, this court grants defendants’ second preliminary objection regarding plaintiffs’ corporate negligence claim. This court finds that corporate negligence does not apply to the circumstance presented in this case. In Thompson v. Nason Hospital, 527 Pa. 330, 591 A.2d 703 (1991), the Pennsylvania Supreme Court, in establishing the doctrine of corporate negligence as it relates to hospital liability, identified four factors that a plaintiff must establish to show that a hospital breached its duty. The factors are: (1) the hospital’s duty to use reasonable care in the maintenance of safe and adequate facilities and equipment; (2) the hospital’s duty to select and retain only competent physicians; (3) the hospital’s duty to oversee all persons who practice medicine within its walls as to patient care; and (4) the hospital’s duty to formally adopt and enforce adequate rules and policies to ensure quality care for its patients. Id. at 339-40, 591 A.2d at 707. The Thompson court held that “the corporate hospital’s role in the total health care of its patients” required that hospitals be held to a standard of care separate and apart from the standard of care imposed upon physicians. Id. at 341, 591 A.2d at 708. The Thompson court also noted that for a hospital to be directly liable to a patient, the hospital must have actual or constructive knowledge of the defect or procedure that caused the harm. Id.

However, this court finds that corporate negligence does not apply to the corporate entity in this case. The case of Remshifski v. Kraus, 1845 Civil 1992, Monroe County, September 8, 1995, is the only published Pennsylvania court opinion to address the issue. The Remshifski court, in interpreting Thompson on a summary judgment motion, found that the corporate negligence doctrine has not been extended to entities other than hospitals. Remshifski at 145. This court agrees with the Monroe County court and holds that this doctrine applies only to hospitals and not to physician practices like CSI.

Federal courts have addressed an issue similar to the one discussed in Remshifski and the one presently before this court. The United States District Court for the Eastern District of Pennsylvania in Milan v. American Vision Center, 34 F. Supp.2d 279 (E.D. Pa. 1998), was asked to decide whether the doctrine of corporate liability applied to optometrists’ offices. In its analysis, the court reviewed Thompson and Shannon v. McNulty, 718 A.2d 828 (Pa. Super. 1998). The court in Shannon was faced with applying the corporate negligence doctrine to health maintenance organizations and held that because HMOs “involve themselves daily in decisions affecting their subscriber’s medical care,” Thompson’s corporate liability duties should “be equally applied to an HMO when that HMO is performing the same or similar functions as a hospital.” Shannon, 718 A.2d at 835, 836.

In Milan, the court examined both cases in its determination that the doctrine of corporate negligence should not be extended to optometrists’ offices. The court stated:

“Thompson sets a standard of care for hospitals, not necessarily for all health care organizations.... The use of language throughout Thompson similarly suggests that the Supreme Court believed itself to be crafting a rule of hospital liability, not health care organization liability generally....
“That Thompson concerned hospitals does not necessarily mean that the Pennsylvania Supreme Court will not in the future extend the doctrine of corporate liability to other health care organizations [.]... The Pennsylvania Supreme Court has not yet spoken to that question, however. In the absence of such an authoritative determination, this federal trial court must undertake to predict what rule Pennsylvania’s appellate courts will ultimately fashion....
“No published case in the Commonwealth has considered the corporate negligence of an optometrist’s office, or more generally of any sort of medical practice. However, the Superior Court has recently considered whether corporate negligence extends to [HMOs].” Milan, 34 F. Supp.2d at 280-81.

The court in Milan went on to discuss the effect of Shannon:

“The relevant question is, then, whether the Pennsylvania Supreme Court is likely to extend Thompson beyond Shannon; i.e., whether the court will hold that corporate liability extends to doctors’ practices in general or to optometrists’ offices in particular.
“An HMO may legally constrain a subscriber’s choice of medical care (or, more properly, her choice of covered medical care), and a hospital practically constrains a patient’s choice by inducing her to rely on its comprehensive services in times when her ability to make choices will be compromised. An optometrist’s office has no such effect.” Milan at 281-82.

This court agrees with Milan’s analysis. The court found that optometrists’ offices, like doctors’ offices in general, are distinguishable from hospitals and HMOs in a corporate negligence claim because they do not play a gate-keeping role in the total health care of their patients. The court concluded that, unlike the emergent medical situations in Thompson, “a visit to an optometrist’s office generally does not require a patient to com-mi t. to a single corporate health care provider as a matter of medical necessity.” Milan at 282.

Similarly, the facts in the instant case do not indicate that plaintiff was required to commit to a single health care provider for treatment of her heart or the circulation in her legs. Plaintiff was free at any time to choose another vascular surgeon, either for a second opinion or to perform her surgery. Additionally, CSI did not play the central role in the total health care of plaintiff. CSI dealt strictly with plaintiff’s cardiovascular health. Therefore, defendants’ preliminary objection regarding corporate negligence is granted. CSI is a physician practice group devoted exclusively to the practice of cardiovascular surgery. Each of plaintiffs’ claims, alleging corporate negligence, attempts to impose a corporate negligence-type duty upon CSI. In doing so, plaintiffs are attempting to extend the doctrine of corporate negligence to include specialty physician practices. As stated above, the basis for the creation of such a doctrine was due to the corporate entity’s role in the delivery of total health care to the patient. A physician’s group which is exclusively devoted to the practice of cardiovascular surgery does not deliver total health care to its patients. Therefore, this court finds that a specialty physicians’ practice like CSI is not the type of corporate entity for which the Pennsylvania Supreme Court intended to be created in Thompson.

INFORMED CONSENT

Finally, defendants’ third preliminary objection regarding the negligent failure to obtain informed consent is granted. The requisite elements of a negligence cause of action are: duty, a breach of that duty, a causal relationship between the breach of the duty and the resulting injury, and an actual loss or damages caused by the breach. Casey v. Geiger, 346 Pa. Super. 279, 289-90, 499 A.2d 606, 612 (1985). Paragraph 39(c) of plaintiffs’ complaint is devoid of any allegations which would prove each of these requirements in order to state a negligence cause of action. Plaintiffs have alleged that defendant Judson was negligent for not obtaining informed consent prior to the bypass surgery. However, it is undisputed in Pennsylvania law that the doctrine of informed consent is based on a battery theory, not on negligence. Kelly v. Methodist Hospital, 444 Pa. Super. 427, 431, 664 A.2d 148, 150 (1995). In this case, this court finds that the plain reading of plaintiffs’ complaint indicates that plaintiffs are attempting to assert an informed consent cause of action based on negligence. This theory does not constitute a viable cause of action in Pennsylvania. However, this court will grant plaintiffs leave to amend their complaint regarding this issue.

Accordingly, the following is entered:

ORDER

And now, March 10, 2000, it is hereby ordered that defendants’ preliminary objections are granted. Plaintiffs are granted 20 days leave to amend their complaint consistent with this opinion.


author: MINORA, J.,

text:
    Torres v. Gillick

      C.P. of Lackawanna County,
    no. 95-CV-1786.

      Randolph T. Borden, for plaintiff.

      Mark T Perry, and Paul J. Wylam, for defendant Gillick.

      Michael P. Perry and Joseph T. Healey, for defendant CMC.
    December 21, 1999
   MINORA, J.,

FACTS

This matter comes before the court by way of the defendants’ motions for summary judgment, and arises out of a medical malpractice claim instituted by Mr. Patrick Torres against both defendants on April 17, 1999. The plaintiff alleges that defendant Dr. Alan Gillick, working as an agent of defendant Community Health Center, negligently implanted “pedicle screws” in the plaintiff’s spine during a procedure called an “L5-S1 instrumented fusion with iliac crest bone graft.” The pedicle screws were implanted to act as an internal brace to support the plaintiff’s spinal column. The plaintiff claims that the screws have not properly performed their task, and, consequently, interfered with the proper bone graft taking hold.

More pertinent to the subject matter of this opinion, a pretrial conference before Judge Terrance Nealon was held on July 27, 1997. Pursuant thereto, Judge Nealon issued an order requiring all discovery to be completed by December 31, 1998, and plaintiff’s expert reports were to be submitted to opposing counsel by March 1, 1999. To date, the plaintiff has never produced the expert reports. The defendants argue that because the deadline for the plaintiff’s expert reports has passed, the plaintiff is time barred from using said expert reports at trial. Furthermore, because this is a medical malpractice case, without the expert reports, the plaintiff cannot make his case, leaving no genuine issue of material fact to be determined. This is the basis for the defendants’ motion for summary judgment.

STANDARD OF REVIEW

A party may move for summary judgment after pleadings are closed in two situations. First, when there is no genuine issue of material fact that could be established by additional discovery, and second, after discovery, if an adverse party bearing the burden of proof has failed to produce evidence of essential facts so as to warrant the submission of the issue to a jury. Pa.R.C.P. 1035.2; Fazio v. Fegley Oil Co. Inc., 714 A.2d 510, 512 (Pa. Commw. 1998). Further, under the revised rules, a court may grant summary judgment where it is clear and free from doubt that the moving party is entitled to judgment as a matter of law. Boyer v. Walker, 714 A.2d 458, 459 (Pa. Super. 1998); Cappelli v. York Operating Co. Inc., 711 A.2d 481, 483 (Pa. Super. 1998) (en banc). When making this determination, the trial court must consider the evidence in a light most favorable to the non-moving party. Pa.R.C.P 1035.1-1035.4; Harman on Behalf of Harman v. Borah, 720 A.2d 1058, 1061 (Pa. Super. 1998); Sebelin v. Yamaha Motor Corp. USA, 705 A.2d 904, 907 (Pa. Super. 1998).

Rule 1035.3(a) requires that the adverse party file a response setting forth the facts in dispute within 30 days after the service of the motion for summary judgment. Pa.R.C.P. 1035.3(a); Henninger v. State Farm Insurance Co., 719 A.2d 1074, 1076 (Pa. Super. 1998); Stilp v. Hafer, 701 A.2d 1387, 1390 (Pa. Commw. 1997). Where a motion for summary judgment has been properly supported with corroborating documentation, the adverse party must demonstrate by specific facts contained within their depositions, answers to interrogatories, admissions or affidavits that there is a genuine issue of material fact for trial. Sovich v. Shaughnessy, 705 A.2d 942, 944 (Pa. Commw. 1998), citing Marks v. Tasman, 527 Pa. 132, 135, 589 A.2d 205, 206 (1991).

DISCUSSION

Judge Nealon’s order dated July 27,1998 reads in pertinent part, “it is hereby ordered and decreed that discovery shall be completed on or before December 31, 1998; plaintiff’s experts [sic] reports are due on or before March 1, 1999; defendants have 60 days after receipt of plaintiff’s expert reports in which to provide expert reports to plaintiff’s counsel.” It is undisputed that the plaintiff has not provided his expert reports within the time frame of the order. The defendants argue that this would preclude the plaintiff from using expert testimony at trial. We do not agree, because to do so would divest Judge Nealon of his discretion to reconsider, extend or reschedule the time limit.

The Pennsylvania Rules of Civil Procedure govern the discovery of expert testimony. Rule 4003.5 reads in pertinent part:

“An expert witness whose identity is not disclosed in compliance with subdivision (a)(1) of this rule shall not be permitted to testify on behalf of the defaulting party at the trial of the action. However, if the failure to disclose the identity of the witness is the result of extenuating circumstances beyond the control of the defaulting party, the court may grant a continuance or other appropriate relief.” Pa.R.C.P. 4003.5(b) (1999).

The rules also provide that “[t]he court may, on motion, make an appropriate order if... a party or person otherwise fails to make discovery or to obey an order of court respecting discovery.” Pa.R.C.P. 4019(a)(1)(viii) (1999). The rules provide for the following applicable sanctions.

“(1) an order that the matters regarding which the questions were asked, ... or any other designated fact shall be taken to be established for the purposes of the action in accordance with the claim of the party obtaining the order;
“(2) an order refusing to allow the disobedient party to support or oppose designated claims or defenses, or prohibiting such party from introducing in evidence designated documents, things or testimony ...;
“(3) an order striking out pleadings or parts thereof, or staying further proceedings until the order is obeyed, or entering a judgment of non pros or by default against the disobedient party or party advising the disobedience;
“(4) an order imposing punishment for contempt...;
“(5) such order with regard to the failure to make discovery as is just.” Pa.R.C.P. 4019(c)(1-5) (1999).

These rules do not require the trial court to preclude testimony. Instead, the trial court must balance the facts and circumstances of each case to determine the prejudice to each party. Werner by Werner v. Commonwealth, Department of Public Welfare, 109 Pa. Commw. 134, 139, 530 A.2d 1004, 1007 (1987), citing Feingold v. SEPTA, 512 Pa. 567, 573, 517 A.2d 1270, 1273 (1986). This is in contravention to the defendants’ assumption that the plaintiff is automatically precluded from using his expert testimony for failing to comply with Judge Nealon’s court order. To automatically assume the defendants’ position in this and other instances could lead to draconian results for an injured plaintiff.

Furthermore, when a discovery sanction is imposed, the sanction must be appropriate when compared to the violation of the discovery rules. Steinfurth v. LaManna, 404 Pa. Super. 384, 388, 590 A.2d 1286, 1288 (1991), citing Pride Contracting Inc. v. Biehn Construction Inc., 381 Pa. Super. 155, 553 A.2d 82 (1989). To determine whether a sanction is appropriate, the Superior Court in Steinfurth looked to the following factors. First, the court examined the party’s failure in light of the prejudice caused to the opposing party and whether the prejudice could be cured. Second, the court examined the defaulting party’s willfulness or bad faith in failing to comply with the discovery order. Third, the court considered the number of discovery violations. Finally, the court considered the importance of the precluded evidence in light of the failure.

In the present case, the defendants have made no arguments as to whether they will be prejudiced by the plaintiff’s late presentation of their expert reports. Nor have the defendants accused the plaintiff of bad faith. Furthermore, this is the first discovery violation made by the plaintiff. Finally, because this is a medical malpractice case, to preclude the plaintiff’s expert testimony would be severely damaging, if not fatal, to the plaintiff’s case. All of these factors mitigate against precluding the plaintiff from using expert testimony. Therefore, this court feels that a less harsh sanction is warranted.

The defendants’ motion for summary judgment hinges upon the faulty and ill-advised assumption that the plaintiff’s expert testimony has been automatically precluded. This decision is for Judge Nealon to decide. As discussed above, this court believes this would be too harsh of a sanction under the present facts of this case. As such, the defendants’ motion for summary judgment is denied. However, because the plaintiff has violated an order of the court he shall be ordered to appear before the court (per Judge Nealon) to show cause why he should not be held in contempt for his failure to meet the temporal deadline. At that time a new schedule may be established to provide the plaintiff with additional time to provide his expert reports, if the court so chooses in the exercise of its discretion.

An appropriate order will follow this opinion.

ORDER

And now, to wit, December 21, 1999, it is hereby ordered and decreed that the defendants’ motion for summary judgment is denied. It is further ordered that the plaintiff shall appear before the court (per Judge Nealon) to give cause why he should not be held in contempt for violating the July 27, 1997 court order. At the time of this hearing, the court may choose to set a new schedule to provide the plaintiff with additional time to produce his expert reports.


author: BERNSTEIN,

text:
    Jakobi v. Ager

      Carol N. Shepherd, for plaintiff.

      John S. Bagby Jr., for defendants.
    March 7, 2000
   BERNSTEIN,

This is a claim for psychiatric malpractice deriving from the suicide of plaintiff’s decedent shortly after beginning psychiatric treatment with defendant doctors. Discovery in this matter has been contentious; resort to discovery court for enforcement of discovery has resulted in nine orders being issued.

Through discovery, the defense learned that Dr. Arthur V. Stein, a plastic surgeon and a personal friend of the decedent, had prescribed anti-anxiety medication to plaintiff’s decedent prior to his visits with defendant doctors. Defendants further learned that Dr. Stein had previously performed hair loss surgery on plaintiff’s decedent. Counsel for defendant, Dr. Ager, contends that Dr. Stein’s prior medical treatment of plaintiff’s decedent is crucial to the defense of this matter. Dr. Ager and Ager Medical Associates are represented by John S. Bagby Jr. of Bagby and Associates. The Lawyer Stress Center and David L. Rackow M.D. have different counsel, Mr. Joseph Goldberg, of the law firm of Margolis, Edelstein.

Before the court is plaintiff’s petition for a protective order precluding the deposition of Dr. Stein and seeking disqualification of counsel because of communications, in violation of Pennsylvania Rule of Civil Procedure 4003.6.

There has been only one appellate decision under Pa.R.C.P. 4003.6. The historical development of Pennsylvania law has direct bearing on the proper ruling under Pa.R.C.P. 4003.6.

Thirty-eight years ago, in the case of Alexander v. Knight, the trial court ruled that a treating physician’s “confidential or fiduciary” obligation to the patient “includes a duty to refuse affirmative assistance to patient’s antagonists in litigation.” The Superior Court affirmed, based upon the trial court’s opinion.

In Moses v. McWilliams, a treating physician agreed to serve as an expert witness for the defendants in a medical malpractice lawsuit brought by his patient against other doctors. The trial court, Judge Stanley Greenberg, entered an order that permitted the treating physician to testify only as a “fact” witness, but precluded testimony as defendant’s expert. The precise issue, as articulated by the appellate court in that case, was “Whether a treating physician’s unauthorized and judicially unsupervised communications with his patient’s adversary in a medical malpractice action are actionable as breach of physician/patient confidentiality.” The appellate court held there was no such cause of action, holding that a patient’s right to privacy in medical records is a qualified right which is, itself, reduced whenever a civil suit for personal injuries is filed. Further, holding that a witness’ absolute immunity from civil liability extended to pretrial communications, the appellate court barred any claim against the testifying treating physician. The Superior Court noted, however: “Allowing ex parte interviews with treating physicians does not open the door to any and every disclosure by a doctor concerning a plaintiff’s medical condition. Rather, disclosure should be limited to that which is pertinent and material to the underlying litigation. If disclosures are neither pertinent nor material, they will be inadmissible at trial. Moreover, by issuing protective orders, a court can place restrictions on the scope of medical discovery, without actually prohibiting ex parte interviews.” The Superior Court implicitly approved Judge Greenberg’s order limiting a treating physician’s testimony to the medical care and treatment rendered to the plaintiff.

In addition to Pennsylvania decisions which clearly expressed a public policy discouraging ex parte communications between defense counsel and treating physicians, Rule 4003.6 was specifically anticipated by Chief Judge William J. Nealon. In 1987, in Manion v. N.P.W. Medical Center of N.E. Pennsylvania Inc. counsel for a defendant doctor spoke to plaintiff’s treating physician without telling opposing counsel. The court said: “The public policy favoring confidentiality between a physician and his patient compels this court to preclude defense counsel from calling Drs. Ambruso and Kao as expert witnesses at trial.” Chief Judge Nealon explained this decision: “In view of (1) the Alexander line of cases, (2) decisions from outside Pennsylvania such as Petrillo v. Syntex Laboratories Inc., supra, and Stempler v. Speidell, supra, and (3) the rationale supporting the prohibition against unauthorized ex parte contacts, this court believes that the Pennsylvania Supreme Court, if confronted with the issue, would at least require reasonable notice to a plaintiff or his counsel before defense counsel may communicate with plaintiff’s treating physician.” (emphasis added)

Pa.R.C.P. 4003.6, approved by the Pennsylvania Supreme Court for effect on July 1, 1991, was specifically designed to codify, in the Rules of Civil Procedure, reasonable limitations upon defense communication with a treating physician. This is accomplished by strictly limiting defense communications to filed discovery, which, of course, requires advance notice. The dual purpose behind the policy and rule is to preclude a treating physician from acting in any adverse capacity to a patient in court, while protecting the right of the defense and the court to obtain full access to truthful testimony concerning past medical care.

In this case, the defense subpoenaed records from Parvin’s Pharmacy. Records received on December 21, 1999 revealed that prescriptions for Valium, Tamazepam and Restoril, had been prescribed for plaintiff’s decedent’s anxiety by Dr. Stein. Upon obtaining these records, the defense subpoenaed Dr. Stein’s records directly. When these records were not readily forthcoming, a paralegal from the defense firm of Bagby and Associates contacted Dr. Stein’s office, and attempted to arrange a mutually convenient date for his deposition. When these reasonable requests were ignored, Dr. Stein was personally subpoenaed to a deposition. On January 27, an associate in the firm of Bagby and Associates called Dr. Stein’s office. Shortly thereafter, Dr. Stein returned the call. Knowing he was a treating physician whose testimony may be critical, the associate engaged Dr. Stein in a conversation which lasted almost an hour.

At oral argument, counsel for Dr. Ager conceded that the associate knew Dr. Stein was a treating physician and knew of the prohibition against communications with a treating physician other than through properly noticed discovery. Conceding that a violation of the rule has occurred, defense counsel claims no sanction should be imposed because only a “brief’ substantive discussion took place; and a “Chinese wall” has been established eliminating the associate from further participation in the matter.

Based upon the affidavits of Dr. Stein presented in this motion, the court concludes that a more extensive substantive conversation occurred in knowing violation of the rule. A significant violation occurred; thus, the question for resolution is, what is the fair and equitable remedy for a violation of this rule? Plaintiff asks for preclusion.

Sanctioning a violation of this rule presents a delicate balance between plaintiff’s right to maintain the confidentiality of the medical relationship, on the one hand, and the sanctity-of-truth finding at trial, including the rights of co-defendants who have not violated the rule.

If Dr. Stein’s testimony is as important as counsel for Dr. Ager represents, preclusion of his testimony at trial cannot be a proper remedy. Even if precluded as to Dr. Ager, it is likely that Dr. Stein will be called to testify by Dr. Rackow. Dr. Rackow’s defense should not and cannot be punished or even hampered by the activities of co-counsel. Neither preclusion of Dr. Stein’s deposition or trial testimony is appropriate. That request is denied. Dr. Stein’s testimony, on behalf of the defense, must be permitted at trial; and a properly noticed deposition must go forward, pretrial.

Nonetheless, counsel for Dr. Ager, and Dr. Ager himself, may not be permitted to benefit from their violation. If benefit has been obtained, as it now has, and no functional sanction is imposed, there is, effectively, no rule.

A proper sanction order must fully protect the legitimate rights of the plaintiff to the confidentiality of the treating physician’s relationship, must protect the rights of co-counsel to vital defense testimony, and still be an effective punishment, precluding Dr. Ager from receiving any benefit from the violative behavior of his counsel. A proper sanction order will deter future similarly situated counsel from ex parte communications with treating physicians.

Accordingly, the law firm of Bagby and Associates is disqualified as defense counsel in this case; and no attorney who has spoken to Dr. Stein, nor any documents generated as a result of that conversation, shall be involved in the transmission of the defense file to subsequent counsel. All matters are stayed for 45 days to permit Dr. Ager to retain other counsel.

In rejecting plaintiff’s suggested sanction of preclusion in favor of the significantly lesser sanction imposed, this court is aware that in Marek v. Ketyer, the Superior Court granted a new trial because the trial judge failed to preclude. Nonetheless, this court, under these circumstances, believes the sanction imposed is adequate and hopes that, unlike the quarterback who throws long because he knows a flag has been thrown against the defense, the plaintiff herein has not, by this court’s leniency, been given one free jury verdict.

ORDER

And now March 7, 2000, it is hereby ordered and decreed that:

(1) The law firm of Bagby and Associates is disqualified from the above-captioned matter in the representation of defendants Steven A. Ager M.D. and Ager Medical Associates P.C., d/b/a The Lawyer Stress Center, and defendants are permitted 45 days to arrange for new counsel; all proceedings are stayed for a period of 45 days.

(2) Information obtained from the improper conversation between counsel for defendant Ager and Arthur Stein M.D. shall not be transmitted to successor counsel or any other person.

      . 197 Pa. Super. 79, 177 A.2d 142 (1962).

      . 379 Pa. Super. 150, 549 A.2d 950 (1988).

      . 676 F. Supp. 585 (M.D. Pa. 1987).

      . 148 Ill.App.3d 581, 102 Ill.Dec. 172, 499 N.E.2d 952 (1986).

      . 100 N.J. 368, 495 A.2d 857 (1985).

      . 733 A.2d 1268 (Pa. Super. 1999).


author: BLACK, J.,

text:
    Prudential Property and Casualty Insurance Company v. Ziatyk
    C.P. of Lehigh County,
    no. 98-C-1678.

      Howard Wishnoff, for plaintiff.

      Jeffrey P. Fritz, for defendant.
    December 27, 1999
   BLACK, J.,

Plaintiff, Prudential Property and Casualty Insurance Company, seeks an order from this court declaring that defendant, Helen S. Ziatyk, is barred from recovering underinsured motorist benefits as a result of a motor vehicle accident that occurred on August 26, 1996. The action has been brought pursuant to the Uniform Declaratory Judgment Act, 42 Pa.C.S. §7531 et seq.

At a non-jury trial, the parties submitted a joint stipulation of facts and requested the court to decide the issue on the basis of that stipulation. The stipulated facts are as follows:

Prudential issued an automobile liability insurance policy to Donald Ziatyk Sr., the husband of defendant, Helen S. Ziatyk. The policy included UIM benefits under conditions set forth in the policy. The policy form had been submitted to and approved by the insurance commissioner of the Commonwealth of Pennsylvania.

On August 26, 1996, Mrs. Ziatyk suffered personal injuries as a result of a motor vehicle accident while she was a passenger in a U-Haul truck operated by her husband. The truck had a load capacity in excess of one ton. Mr. Ziatyk had rented the truck from U-Haul. The rental agreement provided that the lessor would be responsible for motor vehicle liability insurance in the amount required by the minimum financial responsibility law of the state where an accident occurs, in this case $15,000. The rental agreement did not permit Mr. Ziatyk to purchase uninsured or underinsured motorist coverage. It specifically provided: “Uninsured and/or underinsured motorist coverage is not provided, except where required bylaw.”

Mrs. Ziatyk made a claim against the tort-feasor, her husband. This claim was settled for $15,000, representing the limit of the liability insurance coverage provided by U-Haul. Mrs. Ziatyk then presented a claim to Prudential for UIM benefits under the motor vehicle insuranee policy issued by Prudential to her husband on his automobiles. Prudential has denied UIM coverage.

Prudential contends that its policy provided UIM benefits to Mrs. Ziatyk only where she was a passenger in a “car” or where she was a pedestrian struck by a motor vehicle. Mrs. Ziatyk claims that the policy language is broad enough to cover her while a passenger in the U-Haul truck; and if not, that the insurance policy violates the public policy of this Commonwealth as expressed in the Pennsylvania Motor Vehicle Financial Responsibility Law, 75 Pa.C.S. §1701 et seq.

For the reasons stated below, we conclude that Mrs. Ziatyk is not entitled to UIM benefits under the terms of the Prudential insurance policy. We also find that the preclusion of such benefits in the circumstances of this case does not violate the public policy of this Comm on - wealth. Therefore, we find in favor of Prudential on its claim for declaratory relief.

I. THE TERMS OF THE PRUDENTIAL POLICY

In determining whether a claim falls within the coverage of an insurance policy, we must focus on the language of the policy and ascertain the reasonable expectations of the insured based on this policy language. See Lebanon Coach Co. v. Carolina Casualty Insurance Co., 450 Pa. Super. 1, 9, 675 A.2d 279, 283 (1996), allocatur denied, 546 Pa. 695, 687 A.2d 378 (1997); Koenig v. The Progressive Insurance Co., 410 Pa. Super. 232, 236, 599 A.2d 690, 691-92 (1991). The insurance policy is to be read as a whole; individual parts of the policy are not to be read in isolation. See Curbee Ltd. v. Rhubart, 406 Pa. Super. 505, 509, 594 A.2d 733, 735 (1991), allocatur denied, 529 A.2d 649, 602 A.2d 859 (1992) (exclusionary language of insurance contract must be construed in the context of the whole contract). When the policy language is clear and unambiguous, the court should give effect to the language of the contract. Id. On the other hand, where a policy provision is ambiguous, the court must construe the language in favor of the insured and against the insurer, which drafted the document. See Warner v. Continental/CNA Insurance Companies, 455 Pa. Super. 295, 688 A.2d 177 (1996), allocatur denied, 548 Pa. 660, 698 A.2d 68 (1997).

In the present case, it is undisputed that Mrs. Ziatyk was an insured person under the insurance policy in question. The dispute arises from the fact that she was a passenger in a rented U-Haul truck when she was injured. The portion of the policy that deals with UIM benefits provides that an insured may obtain such benefits only in the following circumstances:

“In Your Car (includes a substitute car)
“You and a resident relative are insured while using your.car or a substitute car covered under this part...
“In A Non-Owned Car
“You and a resident relative are insured while using a non-owned car. The owner must give permission to use it. It must be used in the way intended by the owner.
“Hit By A Motor Vehicle
“You and a resident relative are insured if hit by an underinsured motor vehicle while a pedestrian....”

The policy defines a “car” in this manner:

“A car is a private passenger motor automobile, station wagon, jeep-type, or van with four wheels which is designed for use mainly on public roads. A pickup truck with four or six wheels and a load capacity of one ton or less is also a car.

Clearly, a U-Haul truck with a load capacity exceeding one ton is not a “car” as that term is defined in the insurance policy. Nor can it be said that an insured would have a reasonable expectation that such a vehicle would be considered a “car.” Therefore, Mrs. Ziatyk is not eligible for UIM benefits under the terms of the Prudential policy.

Mrs. Ziatyk argues that the introductory language in part 5 of the policy, which is the part dealing with UIM benefits, suggests that there might be such coverage and creates an ambiguity. The specific language Mrs. Ziatyk refers to, which appears at the very beginning of part 5 of the policy, is as follows:

“If you have coverage (see the declarations), we will pay up to our limit of liability for bodily injury that is covered under this part when an insured (whether or not occupying a car) is struck by an underinsured motor vehicle.” (parentheses in original)

Mrs. Ziatyk focuses on the parenthetical phrase “whether or not occupying a car” as indicative of an intent to provide coverage even if the insured was occupying a truck. However, the preceding language of this introductory sentence provides that Prudential will pay for bodily injury “that is covered under this part.” The policy then continues to explain what injuries are “covered under this part.” These injuries include only those incurred while the insured is occupying an insured car, a substitute car, or a non-owned car with the permission of the owner, or while the insured is a pedestrian struck by a motor vehicle. Part 5 of the policy must be read as a whole, and any reasonable insured doing so would have to conclude that there is no UIM coverage provided when the insured is occupying a truck. The sentence focused on by Mrs. Ziatyk obviously is not intended to expand coverage, but is merely a general introductory statement to the coverage that is then specifically described.

Given the unambiguous language of part 5 of the policy, we must conclude that Mrs. Ziatyk is not covered for UIM benefits under the terms of the Prudential policy for injuries sustained while a passenger in a truck. “[A]n insured may not complain that his or her reasonable expectations were frustrated by policy limitations which are clear and unambiguous.” St. Paul Mercury Insurance Co. v. Corbett, 428 Pa. Super. 54, 59, 630 A.2d 28, 30 (1993). (citation omitted)

II. PUBLIC POLICY

Mrs. Ziatyk also argues that the provisions in the Prudential insurance policy precluding UIM coverage for her should be declared invalid as contrary to public policy. Even a clear and unambiguous contract provision cannot be given its plain meaning if to do so would be contrary to a clearly expressed public policy. Antanovich v. Allstate Insurance Co., 507 Pa. 68, 76, 488 A.2d 571, 575 (1985). However, it is only in the rarest of cases that public policy notions will be allowed to defeat the effect of clearly worded contract language. The public policy must be a “dominant public policy,” not merely a vague goal, if the plain meaning of insurance policy is to be circumvented. See Hall v. Amica Mutual Insurance Co., 538 Pa. 337, 347, 648 A.2d 755, 760 (1994).

“It is only when a given public policy is so obviously for or against the public health, safety, morals or welfare that there is a virtual unanimity of opinion in regard to it, that a court may constitute itself the voice of the community in so declaring [that the contract is against public policy].” Eichelman v. Nationwide Insurance Co., 551 Pa. 558, 563, 711 A.2d 1006, 1008 (1998) (citing Mamlin v. Genoe, 340 Pa. 320, 325, 17 A.2d 407, 409 (1941)); accord Windrim v. Nationwide Insurance Co., 537 Pa. 129, 135-36, 641 A.2d 1154, 1157 (1994). Only a “dominant public policy” justifies “the invalidation of a contract as contrary to that policy.” Eichelman, 551 Pa. at 563, 711 A.2d at 1008.

Unfortunately, public policy, like beauty, is often in the eye of the beholder. This is illustrated by the recent Superior Court decision in Burstein v. Prudential Property and Casualty Co., 742 A.2d 684 (Pa. Super. 1999), involving the “regularly used non-owned vehicle” exclusion. The nine judges of the Superior Court who heard that case en banc issued three separate opinions, each of which was supported by only three members of the court. The lead opinion invalidated the exclusion as violative of public policy, holding that there were several competing policies to be weighed and balanced against each other, with the policies in favor of coverage prevailing. The dissenting opinion found the exclusion valid, stating that there was only a single relevant public policy, namely legislative concern for the increasing cost of insurance. A third opinion, concurring and dissenting, rejected the reasoning in both of the other opinions; it invalidated the exclusion on the ground that the purpose of the exclusion, which was to prevent an insured from regularly driving two or more vehicles for the price of one policy, did not apply to the specific facts of that case. All this is very confusing to a mere trial judge.

Obviously, much if not most legislation is a compromise that takes into account a number of competing goals and considerations. The original impetus for UM/UIM coverage was a policy favoring protection for persons injured by uninsured or underinsured motorists. This coverage was later made optional because of concern over the increasing cost of automobile insurance. As stated in Paylor v. Hartford Insurance Co., 536 Pa. 583, 587, 640 A.2d 1234, 1235 (1994):

“The repeal of the No-Fault Act and the enactment of the MVFRL reflected a legislative concern for the spiraling consumer cost of automobile insurance and the resultant increase in the number of uninsured motorists driving on public highways. The legislative concern for the increasing cost of insurance is the public policy that is to be advanced by statutory interpretation of the MVFRL. This reflects the General Assembly’s departure from the principle of ‘maximum feasible restoration’ embodied in the now defunct No-Fault Act.” See also, Donnelley v. Bauer, 553 Pa. 596, 606, 720 A.2d 447, 452 (1998); Rump v. Aetna Casualty & Surety Co., 551 Pa. 339, 345, 710 A.2d 1093, 1096 (1998).

The shift from the concept of “maximum feasible restoration” to the Supreme Court’s current focus on the need for controlling insurance costs has been recognized in many court decisions. The Pennsylvania appellate courts have frequently upheld insurance policy provisions limiting uninsured motorist and UIM coverage. See e.g., Eichelman v. Nationwide Insurance Co., 551 Pa. 558, 711 A.2d 1006 (1998) (approving exclusion for family member in household with uninsured vehicle); Hall v. Amica Mutual Insurance Co., 538 Pa. 337, 648 A.2d 755 (1994) (approving territorial limitation); Paylor v. Hartford Insurance Co., 536 Pa. 583, 640 A.2d 1234 (1994) (approving exclusion for non-insured vehicles owned or furnished for regular use of insured or family member); Caron v. Reliance Insurance Co., 703 A.2d 63 (Pa. Super. 1997) (approving exclusion limiting employer’s UIM coverage to specific cars owned by employer); St. Paul Mercury Insurance Co. v. Corbett, 428 Pa. Super. 54, 630 A.2d 28 (1993) (approving “used for hire” exclusion limiting UM coverage to specific antique automobile); Frazier v. State Farm Mutual Automobile Insurance Co., 445 Pa. Super. 218, 665 A.2d 1 (1995) (approving “non-permissive use” exclusion to deny UM benefits to uninsured pedestrian from insurer of stolen vehicle being driven by the thief); Nationwide Mutual Insurance Co. v. Cummings, 438 Pa. Super. 586, 652 A.2d 1338 (1994) (approving “non-permissive use” exclusion, thereby preventing passenger from recovering UM benefits from the insurer of stolen vehicle being driven by the thief, even though the passenger was innocent and unaware of the theft); Marino v. General Accident Insurance Co., 416 Pa. Super. 1, 610 A.2d 477 (1992) (approving exclusion of UM/UIM benefits where insured vehicle used to transport persons or goods for a fee).

We also note that the Pennsylvania insurance commissioner approved the form of the insurance policy at issue. Although this approval “does not per se establish the validity of the policy,” it is to be considered a “significant factor” in assessing the validity of the contract language. See Hall v. Amica Mutual Insurance Co., 538 Pa. 337, 347, 648 A.2d 755, 760 (1994); Insurance Co. of North America v. Hippert, 354 Pa. Super. 333, 338, 511 A.2d 1365, 1367 (1986).

To summarize, the plain meaning of an insurance policy may be circumvented only by a “dominant public policy;” in interpreting the MVFRL, the Supreme Court has placed primary emphasis on the public policy of containing insurance costs; numerous appellate court decisions have applied this policy of cost containment to uphold UM/UIM coverage limitations; and the Pennsylvania insurance commissioner has approved the form of the insurance policy at issue. For all of these reasons, we hold that Prudential’s failure to provide UIM coverage for Mrs. Ziatyk while she was a passenger in a U-Haul truck does not contravene public policy.

ORDER

Now, December 27,1999, after non-jury trial, the court finds in favor of plaintiff, Prudential Property and Casualty Insurance Company, against the defendant, Helen S. Ziatyk, and declares that plaintiff is not responsible for providing underinsured motorist benefits to defendant for injuries sustained by her on August 26, 1996, while a passenger in a U-Haul truck.

      . Rental agreement, exhibit B to joint stipulation of facts.

      . The opinion identifies the policies favoring coverage as these: (1) the MVFRL was to provide a liberal compensation scheme of UM/ UIM benefits with the greatest possible protection to injured claimants, (2) it is in the public’s best interest for insurance companies to provide UM/UIM coverage, and (3) UM/UIM coverage is first-party coverage and therefore follows the person, not the vehicle.

      . An insurance company must obtain approval of the policy form from the insurance commissioner prior to selling the policy. 40 P.S. §477(b).


author: BRADLEY, J.,

text:
    Solum v. Slater

      C.P. of Delaware County,
    no. 98-11209.

      Albert A. Citro III, for plaintiff.

      Peter F. X. Callahan, for defendants Chester Co. Med. Assoc, and Leonard C. Guinta D.O.

      Nancy Noon Powell, for defendant Bruce A. Colley D.O.

      Charles T. Roessing, for defendant Bryn Mawr Rehab. Inc.

      James S. Sell, for defendants Robert Slater M.D., Horst A. Agerty M.D. and David F. Long M.D.
    February 14, 2000
   BRADLEY, J.,

Plaintiff appeals from the orders entered November 19, 1999 and December 16, 1999, granting defendants’ preliminary objections and dismissing all claims against all defendants.

On August 7, 1996, plaintiff’s decedent, Alison Leah Solum, was driving southbound on Baltimore Pike, Route 1, in the Borough of Chester Heights, Delaware County, Pennsylvania. At the same time, Anthony Cifelli was driving northbound on Baltimore Pike. Anthony Cifelli lost control of his automobile, crossed the median strip separating the northbound and southbound lanes of Baltimore Pike and entered opposing lanes of traffic. Cifelli crashed into plaintiff’s decedent’s vehicle. Ms. Solum died as a result of the injuries she sustained.

Plaintiff, Hans Edward Solum Jr., was appointed administrator of the estate of his daughter, Alison Leah Solum, deceased, on September 5, 1996 by the Delaware County Register of Wills. Plaintiff commenced this wrongful death and survival action by filing a complaint on July 31, 1998 against various health care providers of Anthony Cifelli alleging negligence on their part by their failure to report Cifelli’s alleged seizure disorder to the Pennsylvania Department of Transportation. Plaintiff alleges that Cifelli’s diminished mental and physical ability from a previous brain injury and associated seizure disorders caused him to lose control of his automobile which then collided with plaintiff’s decedent’s vehicle resulting in her fatal injuries.

In this action, plaintiff has filed a complaint, and five amended complaints in response to preliminary objections filed by all defendants. To avoid delay and prolonged pleading practice, all parties sought court intervention and resolution of defendants’ preliminary objections to plaintiff’s fifth amended complaint. After oral argument and opportunity for additional briefing of the legal issues, the preliminary objections of all defendants were granted and all claims against defendants were dismissed. This appeal followed.

Defendants challenge plaintiff’s fifth amended complaint for legal insufficiency pursuant to Pa.R.C.P. 1028(a)(4).

Plaintiff has alleged that Doctors Robert Slater M.D., David F. Long M.D., Leonard C. Giunta D.O., Bruce Colley D.O. and Horst Agerty M.D. and two facilities, Bryn Mawr Rehab and Chester County Medical Associates (vicariously liable for defendants-employees Long and Giunta, respectively), were negligent per se by failing to report Anthony Cifelli’s alleged seizure disorder to PennDOT. Their alleged failure to report Cifelli’s condition to PennDOT enabled him to obtain a driver’s permit and license which, according to plaintiff, never would have been issued had PennDOT been made aware of Cifelli’s medical condition by defendants. Specifically, plaintiff alleges that defendants breached their statutory duty as set forth in the Pennsylvania Motor Vehicle Code, 75 Pa.C.S. §83.1 et seq., by failing to report Anthony Cifelli’s medical condition to PennDOT.

The court must “accept as true all well-pleaded material facts set forth in the complaint as well as all inferences reasonably deducible therefrom.” Dercoli v. Pennsylvania National Mutual Insurance Co., 520 Pa. 471, 476, 554 A.2d 906, 908 (1989). In the complaint, plaintiff alleged that defendants provided medical care to Anthony Cifelli and knew that his medical condition threatened Cifelli’s ability to drive and was within the statutory mandate of the Motor Vehicle Code requiring that it be reported to PennDOT. Plaintiff also alleged that defendants failed to caution Cifelli and his family that his medical condition effectively prevented him from driving.

Accepting as true the factual allegations of the fifth amended complaint, the case law is nonetheless clear that there is no duty to third parties from the failure of a health care provider to report a patient’s physical condition to PennDOT. Estate of Witthoeft v. Kiskaddon, 557 Pa. 340, 733 A.2d 623 (1999). In Estate ofWitthoeft, the Supreme Court decided that an ophthalmologist’s failure to report his patient’s visual acuity of less than 20/70 to PennDOT did not create a duty on the part of the ophthalmologist to a bicyclist killed by his driver-patient.

The Supreme Court analyzed section 1518(b) of the Motor Vehicle Code requiring physicians and certain others to report to PennDOT the name, date of birth and address of each person diagnosed as having a specific disorder or disability, using the three-prong analysis set forth in Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975). This analysis assists in determining whether a private remedy is implicit in a statute not expressly providing one. The Pennsylvania Supreme Court in Estate of Witthoeft refused to find a private cause of action based on the reporting requirements under the Motor Vehicle Code because the General Assembly did not expressly provide for one and because there is no statutory basis to imply one. 557 Pa. at 347, 733 A.2d at 627-28. As the Pennsylvania Supreme Court has held there is no private cause of action under section 1518(b) of the Motor Vehicle Code, plaintiff’s fifth amended complaint was stricken for legal insufficiency.

As in Estate of Witthoeft, plaintiff herein alleges that defendants owed a duty to plaintiff’s decedent as a foreseeable victim. They breached this duty by their failure to inform Cifelli and his family of his alleged seizure disorder and its implications for driving. This failure to notify directly and proximately caused Ms. Solum’s death. Plaintiff cites to DiMarco v. Lynch Homes—Chester County Inc., 525 Pa. 558, 583 A.2d 422 (1990), as support for this argument. The plaintiff in Estate of Witthoeft likewise relied on DiMarco but this reliance was misplaced according to the Supreme Court. Estate of Witthoeft, supra at 349, 733 A.2d at 628-30.

In DiMarco, a doctor misinformed his patient, a blood technician who had been accidentally exposed to hepatitis B, a communicable disease, that if she remained symptom free for six weeks she was not infected with the disease. The doctor also told her to refrain from sexual relations with her boyfriend for that same period of time. After being symptom free for eight weeks, the patient resumed sexual relations with her partner. She and her boyfriend were diagnosed with hepatitis B soon thereafter. The patient’s boyfriend brought suit against the doctors alleging they were negligent in failing to warn the patient that having sexual relations within six months could expose her sexual partner to hepatitis B. The Supreme Court found that under the particular facts of DiMarco the doctor’s duty extended to third parties whose health could be threatened by contact with the diseased patient. The fact that the injury involved was communicable, not an obvious condition of which the patient should have been well aware and involved a doctor giving erroneous medical advice upon which the boyfriend relied, were all sound policy reasons which enabled the Supreme Court to decide that the boyfriend-plaintiff was within the foreseeable orbit of risk of harm.

In Estate of Witthoeft, the Supreme Court found that the policy reasons present in DiMarco were notably absent, thus they found DiMarco inapposite. Estate of Witthoeft, 557 Pa. 340, 349, 733 A.2d 623, 629. As the matter sub judice is more akin to Estate of Witthoeft and likewise possesses none of the policy reasons found in DiMarco, we do not believe Miss Solum fell within the foreseeable risk of harm when defendants failed to inform Mr. Cifelli and his family of his seizure disorder.

Plaintiff also asserts liability pursuant to Restatement (Second) of Torts §324(A)(C) to recover for defendants’ allegedly negligent performance of services owed to Anthony Cifelli. This section states:

“One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of a third person or his things, is subject to liability to the third person for physical harm resulting from his failure to exercise reasonable care to protect his undertaking, if
“(a) his failure to exercise reasonable care increases the risk of such harm, or
“(b) he has undertaken to perform a duty owed by the other to the third person, or
“(c) the harm is suffered because of reliance of the other or the third person upon the undertaking.” Id.

Pennsylvania courts have interpreted the legal requirement that defendant has undertaken “to render services to another which he should recognize as necessary for the protection of a third person,” as requiring the allegation of sufficient facts to establish foreseeability. Cantwell v. Allegheny County, 506 Pa. 35, 41, 483 A.2d 1350, 1353 (1984); Crosby by Crosby v. Sultz, 405 Pa. Super. 527, 543, 592 A.2d 1337, 1345 (1991); Waddell v. Bowers, 415 Pa. Super. 469, 609 A.2d 847 (1992). This issue of foreseeability was definitively answered in Estate of Witthoeft, supra, when the Supreme Court held under similar facts that the decedent-bicyclist injured by the visually impaired driver-patient was not a foreseeable victim of the physician’s failure to notify PennDOT. Accordingly, we find that because plaintiff’s decedent was owed no duty of care by defendants because she was not a foreseeable victim of defendants’ inactions, no cause of action will lie for “negligent performance of undertaking” under section 324(A) of the Restatement (Second) of Torts.

Plaintiff is correct that the decision in Estate of Witthoeft specifically excludes the issue of liability based upon Restatement (Second) of Torts §324(A)(a). 557 Pa. at 353 n.8, 733 A.2d at 630 n.8. This issue was waived by plaintiff’s failure to raise it on appeal. We believe however that the court’s decision in Estate of Witthoeft on the lack of the element of foreseeability effectively disposes of plaintiff’s section 324(A)(a) claim in the matter sub judice because foreseeability is the basis to impose liability under section 324. To hold otherwise on plaintiff’s section 324 claim would be “to extend liability limitlessly to treating physicians vis-a-vis third-party victims.” Estate of Witthoeft, supra, at 353, 733 A.2d at 629, citing Crosby, supra, 405 Pa. Super. at 543, 592 A.2d at 1345.

In an attempt to distinguish Estate of Witthoeft from the present case, plaintiff asserts that the active steps taken by defendants in facilitating Cifelli’s acquisition of a driver’s license goes beyond the factual setting in Estate of Witthoeft where the defendant-doctor simply did not report his patient’s vision problem to PennDOT. From a review of the fifth amended complaint, it appears that plaintiff makes this assertion of “active” negligence as opposed to omission only against Doctors Slater, Giunta and Colley. By filing preliminary objections in the nature of a demurrer, these defendants have admitted these factual allegations of the complaint.

We discern no sound reason to treat negligently reporting a medical condition as fit, to drive differently than negligently failing to report a medical condition statutorily required to be reported. The effect is the same; PennDOT makes the decision on a driver’s license with erroneous information. There is simply no private remedy available to plaintiff in this situation.

Defendants have also challenged plaintiff’s fifth amended complaint for legal insufficiency on the grounds that plaintiff is prevented from bringing this wrongful death action pursuant to 42 Pa.C.S. §8301 because plaintiff settled a prior wrongful death action pursuant to 42 Pa.C.S. §8301 against Cifelli and others. Defendants contend that to allow plaintiff to proceed with this instant action would amount to allowing a double recovery to plaintiff in violation of 42 Pa.C.S. §8301.

This allegation of legal insufficiency is without merit. While plaintiff did file a previous wrongful death and survival action, Del. C.C.P. civil action no. 96-17755, plaintiff has represented that that action was settled only with respect to the Survival Act claims. Although we have concluded that plaintiff cannot sustain this cause of action for other reasons, plaintiff is not prevented from bringing this wrongful death action on the basis it constitutes a duplicate recovery.

It is for all the above reasons that defendants’ preliminary objections to plaintiff’s fifth amended complaint were granted and all claims were dismissed against defendants.

      . One defendant, Bryn Mawr Rehabilitation Hospital, has demurred to plaintiff’s complaint on the basis that section 1518 of the Motor Vehicle Code, 75 Pa.C.S., which the plaintiff looks to for the imposition of a duty in this case, does not apply to physical rehabilitation hospitals. It is unnecessary to decide this issue as we have held that under Pennsylvania case law no duty arises to third parties from the failure of a health care provider to report a patient’s physical condition to PennDOT.