Wisconsin Patients Compensation Fund v. Wisconsin Health Care Liability Ins. Plan

Decision Date08 May 1996
Docket NumberNo. 95-0865,95-0865
Citation200 Wis.2d 599,547 N.W.2d 578
PartiesWISCONSIN PATIENTS COMPENSATION FUND, Plaintiff-Appellant, v. WISCONSIN HEALTH CARE LIABILITY INSURANCE PLAN, Defendant-Respondent. On Bypass from the Court of Appeals.
CourtWisconsin Supreme Court

Appeal from an order of the Circuit Court for Milwaukee County, Frank T. Crivello, Judge.

For the plaintiff-appellant there were briefs (in the court of appeals) by Timothy J. Muldowney, James A. Friedman and LaFollette & Sinykin, Madison and James M. Fergal, Linda Vogt Meagher and Schellinger & Doyle, S.C., Brookfield and oral argument by Timothy J. Muldowney.

For the defendant-respondent there was a brief (in the court of appeals) by Mary K. Wolverton, Peter F. Mullaney and Peterson, Johnson & Murray, S.C., Milwaukee and oral argument by Mary K. Wolverton.

Amicus curiae brief was filed by David M. Skoglind, Edward E. Robinson and Wisconsin Academy of Trial Lawyers, Milwaukee, for Wisconsin Patients Compensation Fund.

SHIRLEY S. ABRAHAMSON, Justice.

This case is before the court on appeal from an order of the Circuit Court for Milwaukee County, Frank T. Crivello, Judge, granting summary judgment to the defendant, the Wisconsin Health Care Liability Insurance Plan (WHCLIP), and dismissing the complaint of the Wisconsin Patients Compensation Fund (the Fund). The court granted the Fund's petition to bypass the court of appeals. Wis.Stat. § (Rule) 809.60(4) (1993-94). 1 We reverse the order granting summary judgment in favor of WHCLIP and remand the cause to the circuit court.

The primary issue presented is the Fund's authority to sue a health care provider's insurer (here WHCLIP) when the Fund settles a malpractice action against the provider and the provider's insurer refuses to pay any sum toward the settlement. Should we conclude that the Fund has the authority to sue the provider's insurer, we must also address WHCLIP's contention that the complaint in this case should be dismissed on one of three alternative grounds: (1) the Fund fails to state a claim upon which relief can be granted for contribution, indemnification or legal subrogation; (2) the Fund's claim for contribution is barred by the statute of limitations; and (3) the Fund's board of governors has a conflict of interest which bars it from suing WHCLIP.

The circuit court concluded that the Fund has no authority to initiate the suit. In contrast, two Dane County circuit courts have held that the Fund does have authority to initiate an action against a provider's insurer in circumstances similar to those presented by this case. 2

We conclude (1) that the Fund has the authority to sue a health care provider's insurer and (2) that the complaint states a claim for legal subrogation when the Fund settles a malpractice action against a health care provider and the provider's insurer refuses to make payment toward the settlement.

I.

For purposes of this appeal the facts are not in dispute. On January 3, 1991, Andrea Singer, by her guardian ad litem and her parents, filed a medical malpractice action against Dr. John J. Massart, Dr. Thomas Mahoney and their respective insurers, Physicians Insurance of Wisconsin, Inc. and WHCLIP, as well as the Fund. The Singers claimed that the negligence of doctors Mahoney and Massart caused serious physical injury to Andrea during her birth.

The Singers' initial $5 million settlement offer was rejected. Prior to trial the Fund negotiated a settlement with the Singers for $1.9 million. In return, the Singers executed a general release and indemnification agreement releasing all of their claims against all of the defendants. The agreement included a provision preserving any claims that the Fund might have for contribution or indemnification against the other defendants. In the order dismissing the Singers' claim, the parties stipulated to the Fund's preservation of any claims for contribution or indemnification which it might have. Neither WHCLIP nor Dr. Mahoney objected to any of the terms of the agreement or stipulation. Together with the other defendants, they signed the stipulation in May 1993 and the circuit court signed the dismissal order in June 1993.

While Physicians Insurance contributed $300,000--representing Dr. Massart's policy limit--toward the settlement, WHCLIP refused to make any monetary contribution on behalf of Dr. Mahoney. On June 3, 1993, the Singers received a total of $1.9 million from the settling defendants: $300,000 from Physicians Insurance and $1.6 million from the Fund. The Fund filed this action on May 31, 1994, seeking $300,000 from WHCLIP. The circuit court entered an order granting WHCLIP's motion for summary judgment and dismissing the Fund's action on its merits.

II.

We first set forth the standard of review in this appeal. In reviewing an order granting summary judgment, an appellate court applies the same standards set forth in Wis.Stat. § 802.08 as does a circuit court. Swatek v. County of Dane, 192 Wis.2d 47, 61, 531 N.W.2d 45 (1995).

The issues presented on summary judgment in this case are the nature and scope of the Fund's authority and whether the complaint states a claim upon which relief may be granted. Both are issues of law. Because the Fund is a legislatively created entity, determining the nature and scope of its authority requires an interpretation of the statute conferring that authority. Interpretation of statutes is ordinarily a question of law which this court reviews de novo, benefitting from the analyses of the circuit court and court of appeals. 3 Determining whether the complaint states a claim upon which relief may be granted is also a question of law for this court.

III.

Before turning to the issues presented, we briefly examine the statutes creating the Fund and WHCLIP.

The Fund was created by the legislature in 1975 in response to a perceived medical malpractice crisis. 4 Concerned about what it viewed as the increasing cost and possible decreasing availability of health care in Wisconsin, the legislature promulgated a new system for processing medical malpractice claims. § 1, ch. 37, Laws of 1975.

As part of this statutory scheme, the legislature established the Fund with the intention that it would finance a portion of the liability incurred by health care providers in medical malpractice actions. Health care providers are required to assume financial responsibility for a limited portion 5 of any malpractice claim filed against them, either by purchasing liability insurance, self-insuring, or posting a cash or surety bond. Wis.Stat. § 655.23(3).

Health care providers must also pay annual assessments to the Fund. Wis.Stat. § 655.27(3). From these assessments the Fund pays the portion of a successful claim against a health care provider in excess of either the amount of coverage mandated by the statute or the coverage which a provider actually carries, whichever is greater. Wis.Stat. § 655.27(1).

WHCLIP was established as Wis.Stat. § 619.04 (1975) by the same law that created the Fund. § 9, ch. 37, Laws of 1975. WHCLIP is a mandatory risk-sharing plan providing insurance to health care providers who are unable to obtain coverage in the voluntary market. The statute creates a board of governors charged with oversight of WHCLIP.

Malpractice claimants seeking damages in excess of the amount for which the health care provider is responsible must name the Fund as a defendant, and the Fund "may appear and actively defend itself" in the ensuing litigation. Wis.Stat. § 655.27(5)(a)3. The Fund is "held in trust," Wis.Stat. § 655.27(6), and the same board of governors charged with overseeing WHCLIP is charged with the Fund's management.

In 1985 the legislature amended chapter 655 6, requiring that insurers and health care providers "shall act in good faith and in a fiduciary relationship with respect to any claim affecting the fund." Wis.Stat. § 655.27(5)(b) and (c). At the same time the legislature expressly authorized the board of governors of the Fund to "bring an action against an insurer, self-insurer or health care provider for failure to act in good faith or breach of fiduciary responsibility under sub. (5)(b) or (c)." Wis.Stat. § 655.27(7).

IV.

Chapter 655 does not expressly authorize the Fund to initiate an action against an insurer when the Fund settles an action against a health care provider and the provider's insurer refuses to pay any sum toward the settlement. WHCLIP argues that the 1985 statutory grant of power allowing the Fund to initiate an action against an insurer is limited by its express terms to those occasions when the Fund states a claim that an insurer has acted in bad faith or breached its fiduciary responsibility toward the Fund.

The circuit court concluded that the Fund's authority to sue an insurer is limited to the two types of actions specifically enumerated in Wis.Stat. § 655.27(7). The circuit court reached its conclusion by relying upon the canon of statutory construction expressio unius est exclusio alterius, which instructs that when a statute expressly mentions one matter, all matters not mentioned in the statute are thereby excluded. 7 Because the Fund's claim in this case alleges neither cause of action specified in Wis.Stat. § 655.27(7), the circuit court concluded that the Fund does not have the authority to initiate an action in this case.

Both this court and the court of appeals have in several cases used the expressio unius canon of construction as a guide to interpreting statutes. 8 But in numerous other cases, the court has warned that the expressio unius canon "requires caution in its application." See, e.g., Whitaker v. State, 83 Wis.2d 368, 374, 265 N.W.2d 575 (1978).

Before the canon is deployed, the court has stated, "[t]here must be some factual evidence that the legislature intended the application of the expressio unius rule." State v. Engler, 80 Wis.2d 402, 408, 259 N.W.2d 97 (1977)....

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