Meier v. Maleski

• Citation: 670 A.2d 755
• Parties: Louis A. MEIER, M.D., Alphonse DiGiovanni, M.D., Robert Driscoll, M.D., Arthur Martella, M.D., Petitioners, v. Cynthia MALESKI, Acting in her Official capacity as Insurance Commissioner of the Commonwealth of Pennsylvania and Joseph Pulcini, Director of the Medical Prob. Liability Catastrophe Fund, Respondents. Martin BRENNAN, M.D., Gordon Clement, M.D., George R. Homa, D.O., Ronald A. Leonard, M.D., William Davie Smith, M.D., Elizabeth Sun, M.D., individually and as members and representatives of that class of Commonwealth of Pennsylvania "health care providers" as defined by 40 Pa.C.S. 1301.701 of the Health Care Services Malpractice Act (hereinafter "the Act") who were required to insure their professional liability in compliance with the Act by participating in the Commonwealth of Pennsylvania Medical Professional Liability Catastrophe Fund (hereinafter "CAT Fund") and who suffered illegal overcharges at the hands of the CAT Fund which was created by the Act and administered by the Defendants for surcharges applicable to any or all of the years 1987-94, Petitioners, v. Thomas CALLAHAN, Bruce Daley, Joseph Pulcini, Thomas Judge (in their official capacities while acting as Directors of the Medical Professional Liability Catastrophe Fund of the Commonwealth of Pennsylvania 1986-94), Cynthia Maleski, Constance Foster, George Grode (in their official capacities while acting as Insurance Commissioners for the Commonwealth of Pennsylvania 1986-94), Respondents.
• Decision Date: 25 January 1996
• Court: Commonwealth Court of Pennsylvania

Page 755

670 A.2d 755

Louis A. MEIER, M.D., Alphonse DiGiovanni, M.D., Robert

Driscoll, M.D., Arthur Martella, M.D., Petitioners, v. Cynthia MALESKI, Acting in her Official capacity as

Insurance Commissioner of the Commonwealth of Pennsylvania

and Joseph Pulcini, Director of the Medical Prob. Liability

Catastrophe Fund, Respondents.

Martin BRENNAN, M.D., Gordon Clement, M.D., George R. Homa,

D.O., Ronald A. Leonard, M.D., William Davie Smith, M.D.,

Elizabeth Sun, M.D., individually and as members and

representatives of that class of Commonwealth of

Pennsylvania "health care providers" as defined by 40

Pa.C.S. 1301.701 of the Health Care Services Malpractice Act

(hereinafter "the Act") who were required to insure their

professional liability in compliance with the Act by

participating in the Commonwealth of Pennsylvania Medical

Professional Liability Catastrophe Fund (hereinafter "CAT

Fund") and who suffered illegal overcharges at the hands of

the CAT Fund which was created by the Act and administered

by the Defendants for surcharges applicable to any or all of

the years 1987-94, Petitioners, v. Thomas CALLAHAN, Bruce Daley, Joseph Pulcini, Thomas Judge

(in their official capacities while acting as Directors of

the Medical Professional Liability Catastrophe Fund of the

Commonwealth of Pennsylvania 1986-94), Cynthia Maleski,

Constance Foster, George Grode (in their official capacities

while acting as Insurance Commissioners for the Commonwealth

of Pennsylvania 1986-94), Respondents.

Commonwealth Court of Pennsylvania.

Argued Sept. 12, 1995.

Decided Jan. 25, 1996.

Daniel Gray, for Petitioners.

Marybeth Christiansen, for Respondents Thomas Callahan, Bruce Daley, Joseph Puccini and Thomas Judge.

Before SMITH, FRIEDMAN, JJ., and SILVESTRI, Senior Judge.

FRIEDMAN, Judge.

Presently before this court are cross-motions for summary judgment from consolidated actions addressed to this court's original jurisdiction. At the heart of this case is the proper interpretation to be given the $15,000,000 surplus maintenance provision in section 701(e)(1) of the Health Care Services Malpractice Act (Act), ¹ a key element in determining the annual surcharge which health care providers must pay into the Medical Professional Liability Catastrophe Fund (CAT Fund). ² Section 701(e)(1) of the Act provides The fund shall be funded by the levying of an annual surcharge on or after January 1 of every year on all health care providers entitled to participate in the fund. The surcharge shall be determined by the director appointed pursuant to section 702 and subject to the prior approval of the commissioner. The surcharge shall be based on the cost to each health care provider for maintenance of the professional liability insurance and shall be the appropriate percentage thereof, necessary to produce an amount sufficient to reimburse the fund for the payment of all claims paid and expenses incurred during the preceding calendar year and to provide an amount necessary to maintain an additional $15,000,000.

40 P.S. § 1301.701(e)(1). (Emphases added.)

This case continues the dispute first dealt with by this court on preliminary objections in Meier v. Maleski, 167 Pa.Cmwlth. 458, 648 A.2d 595 (1994). In Meier, Louis A. Meier, M.D., Alphonse DiGiovanni, M.D., Robert Driscoll, D.O., and Arthur Martella, M.D. (Meier Petitioners), Pennsylvania health care providers who had been paying the annual surcharge into the CAT Fund, filed an Amended Petition for Review in the Nature of a Complaint in Equity (Petition) against Cynthia Maleski, acting in her official capacity as Insurance Commissioner of the Commonwealth of Pennsylvania, and Joseph Pulcini, Director of the CAT Fund (Meier Respondents). Meier Petitioners maintained that, because of the $15,000,000 surplus maintenance provision in section 701(e)(1) of the Act, any CAT Fund amounts exceeding this $15,000,000 cap must be applied to reduce the surcharge for the upcoming year. ³ However, as a result of Meier Respondents' alleged failure to compute the surcharge amount in accordance with the statutory mandate of section 701(e)(1) of the Act, Meier Petitioners claimed that they were assessed excessive surcharge amounts during 1987, 1988, 1990 and 1991. Accordingly, through the Petition, Meier Petitioners sought recomputation of the surcharge amounts to reflect their interpretation of the Act with credit for any overcharges, and asked for an accounting of all CAT Fund surcharge determinations assessed on health care providers during the years 1987-1993. We overruled Meier Respondents' preliminary objections to this Petition, following which Meier Respondents filed an answer to the Petition.

In October 1994, with discovery underway in the Meier action, Martin Brennan, M.D., ⁴ William Davie Smith, M.D., Gordon Clement, M.D., George R. Homa, D.O., Ronald A. Leonard, M.D., and Elizabeth Sun, M.D. (Smith Petitioners), filed a proposed Class Action Complaint against Thomas Callahan, Bruce Daley, Joseph Pulcini and Thomas Judge (Directors), current and prior Directors of the CAT Fund, and Cynthia Maleski, Constance Foster, and George Grode (Commissioners), current and former Insurance Commissioners of the Commonwealth of Pennsylvania (collectively, Smith Respondents). In the Class Action Complaint, Smith Petitioners asserted the identical arguments raised by Meier Petitioners in their Petition ⁵ and, like that Petition, the Class Action Complaint included a demand for an accounting. ⁶ Upon Smith Respondents' motion, this court consolidated the Smith and Meier cases, and Respondents ⁷ filed a Motion for Summary Judgment on the controlling legal question which is dispositive in both actions; that is, whether, as Respondents contend, the $15,000,000 surplus maintenance provision represents a "floor" rather than a "ceiling" for purposes of calculating the surcharge amount.

Petitioners ⁸ have filed a cross-motion for partial summary judgment, seeking to have this court require Respondents to provide an accounting of all CAT Fund surcharge determinations levied on Petitioners for years 1987-94. Contending that the plain language of the Act requires the CAT Fund to collect only enough to pay claims and expenses and maintain $15,000,000, Petitioners argue that Respondents clearly violated the Act in treating the $15,000,000 as a floor. Petitioners assert that an accounting is needed to identify and confirm amounts they have been overcharged due to Respondents' continued Act violations so that they may be afforded relief. Moreover, Petitioners seek injunctive relief to prevent future Act violations by Respondents.

Initially, we note that summary judgment is proper where the pleadings, depositions, answers to interrogatories, admissions and affidavits, show that there exists no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Pa.R.C.P. No. 1035(b); Giddings v. Tartler, 130 Pa.Cmwlth. 175, 567 A.2d 766 (1989). Here, Respondents contend that this case presents no genuine issue of material fact, but, instead, involves a pure legal question concerning statutory construction and legislative intent. ⁹ Matters of statutory construction are for the court's determination, giving appropriate weight to the judgment of those administering the questioned statute. Higher Education Assistance Agency v. Abington Memorial Hospital, 478 Pa. 514, 387 A.2d 440 (1978). With this standard in mind, we first consider Respondents' motion for summary judgment.

Our aim in statutory construction is to ascertain and effectuate the intent of the legislature. Statutory Construction Act of 1972, 1 Pa.C.S. § 1921(a). When the language of a statute is clear and free from all ambiguity, any further deliberation as to its meaning is unwarranted. 1 Pa.C.S. § 1921(b); American Trucking Associations, Inc. v. Scheiner, 510 Pa. 430, 509 A.2d 838 (1986), rev'd on other grounds, 483 U.S. 266, 107 S.Ct. 2829, 97 L.Ed.2d 226 (1987). However, to the extent that the words are not explicit, we may consider, among other matters, the occasion and necessity for the statute, the circumstances under which it was enacted, the mischief to be remedied, the object to be attained, the former law, if any, including other statutes upon the same or similar subjects, the consequences of a particular interpretation, the contemporaneous legislative history and the legislative and administrative interpretations of the statute. 1 Pa.C.S. § 1921(c)(1-8).

Contrary to Petitioners' claim, we do not find the language of section 701(e)(1) of the Act free of ambiguity. ¹⁰ The provision never explicitly states whether the statutory buffer amount is to be treated as a minimum or as a maximum and, indeed, the $15,000,000 figure in that section could be interpreted either as a floor or as a cap. Therefore, we may properly resort to other considerations in order to ascertain the legislative intent behind this section of the Act.

To this end, Respondents direct us to the Act's legislative history, specifically to the Act's original version and to a General Assembly committee report issued prior to the amendment of section 701 of the Act in 1980. As originally enacted, section 701 provided:

If the total fund exceeds the sum of $15,000,000 at the end of any calendar year after the payment of all claims and expenses, including the expenses of operation of the office of the director, the director shall reduce the surcharge provided in this section in order to maintain the fund at an approximate level of $15,000,000.

Act of October 15, 1975, P.L. 390 (amended 1980). Thus, as originally enacted in 1975, section 701 clearly imposed a $15,000,000 limit on the CAT Fund's closing balance by specifically requiring that any monies in excess of this amount be applied to reduce the surcharge for the upcoming year. The Act also made provision for any shortfall in the Fund's closing balance by providing that:

If the fund would be...