Wisniewski v. Bennett

• Court: Indiana Supreme Court
• Writing for the Court: BOEHM, Justice.
• Citation: Wisniewski v. Bennett, 716 N.E.2d 892 (Ind. 1999)
• Decision Date: 24 September 1999
• Docket Number: No. 45S05-9909-CV-497.,45S05-9909-CV-497.
• Parties: Michael J. WISNIEWSKI, Appellant (Plaintiff Below), v. Donna BENNETT, Commissioner of Insurance, Appellee (Defendant Below).

716 N.E.2d 892

Michael J. WISNIEWSKI, Appellant (Plaintiff Below), v. Donna BENNETT, Commissioner of Insurance, Appellee (Defendant Below).

No. 45S05-9909-CV-497.

Supreme Court of Indiana.

September 24, 1999.

Marshall P. Whalley, April L. Board, Merrillville, Indiana, Attorneys for Appellant.

Mary J. Hoeller, John C. Trimble, Indianapolis, Indiana, Attorneys for Appellee.

ON PETITION TO TRANSFER

BOEHM, Justice.

This case deals with a plaintiff's ability to access the Patient's Compensation Fund under the Medical Malpractice Act where an agreement to settle and payment of the settlement amount were made by an insurance company that had not qualified its provider under the Act and was not authorized to write malpractice insurance in Indiana. We hold that the Fund cannot be accessed to cover excess liabilities of entities who have not paid into the Fund.

Factual and Procedural Background

From 1986 to 1990, Michael J. Wisniewski was treated by Dr. Kishan Chand at Southeastern Medical Centers for injuries to his leg resulting from an automobile accident. Throughout the period of treatment, Chand and Southeastern were insured under separate policies by the Illinois State Medical Insurance Exchange (ISMIE), each with a one million dollar limit. Neither Chand nor Southeastern was a "qualified health care provider" as a result of this insurance because neither they nor ISMIE filed proof of financial responsibility with the Insurance Commissioner or paid the required surcharge. Chand carried no other relevant insurance, but in 1988, Southeastern also had a $100,000 policy issued by the Physicians Insurance Company of Indiana (PICI). PICI paid the surcharge and qualified Southeastern for 1988 only.

In 1990, Wisniewski filed suit in the Lake Superior Court against Chand, Southeastern and several others alleging medical malpractice resulting in permanent damage to his leg. He also filed a proposed complaint with the Department of Insurance and initiated the Medical Review Panel proceedings required by the Medical Malpractice Act before a claim may be pursued against a qualified health care provider. The Medical Review Panel issued an opinion finding that Southeastern failed to meet the applicable standard of care and that its liability was based on the care provided by Chand as an employee or officer of Southeastern. The panel found that the other defendants did meet the standard of care. Because Chand was not a qualified provider, he was not required to be, and was not, named in the panel proceedings.

The lawsuit was then settled for $112,500. Wisniewski executed separate releases of Chand and Southeastern. These two documents, which were not signed by anyone other than Wisniewski, recited that they reserved Wisniewski's right to proceed against the Fund. ISMIE paid Wisniewski with two checks, for $12,500 and $100,000, both through Chand's policy. Wisniewski then filed a petition in the trial court to access the Fund for damages in excess of the settlement amount.

The Commissioner of the Department of Insurance, who administers the Fund, responded by a motion for summary judgment on the ground that Wisniewski had failed to satisfy the conditions precedent to petition the Fund. The trial court granted the Commissioner's motion for summary judgment, but the Court of Appeals reversed and remanded, holding that (1) a genuine issue of material fact existed as to whether Southeastern agreed to settle Wisniewski's claim; and (2) if Southeastern had agreed to settle, the trial court must determine whether Wisniewski's damages occurred during the time Southeastern was a qualified provider and whether those damages meet the $100,000 threshold requirement to permit access to the Fund. Wisniewski v. Bennett, 693 N.E.2d 1341 (Ind.Ct.App.1998). The Commissioner and Wisniewski both petitioned for transfer. We grant both petitions.

It is unclear from this record why Wisniewski sought recovery from the Fund rather than pursuing a conventional claim against Chand or Southeastern in view of the million dollar policies ISMIE issued to Southeastern and Chand for the relevant period. Whatever the reason, we are left with the issue of whether this arrangement permits Wisniewski to access the Fund.

Standard of Review

Summary judgment is appropriate when the designated evidence shows that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Ind. Trial Rule 56(C); see Meridian Mut. Ins. Co. v. Auto-Owners Ins. Co., 698 N.E.2d 770, 773 (Ind.1998). Although Wisniewski has the burden of persuading us that the grant of summary judgment was erroneous, we carefully assess the trial court's decision to ensure that he was not improperly denied his day in court. Erie Ins. Co. v. George, 681 N.E.2d 183, 186 (Ind.1997); Mullin v. Mun. City of South Bend, 639 N.E.2d 278, 280-81 (Ind.1994). All facts and reasonable inferences drawn from those facts are construed in favor of Wisniewski. Foster v. Auto-Owners Ins. Co., 703 N.E.2d 657, 659 (Ind.1998); Wright v. Carter, 622 N.E.2d 170, 171 (Ind.1993).

Access to the Patient's Compensation Fund

Wisniewski argues that the trial court erred in granting summary judgment in favor of the Commissioner because his settlement with Southeastern meets the provisions of the Act and entitles him to access the Fund. The Commissioner contends that Wisniewski's unilateral release of Southeastern and Chand does not amount to an "agreement" with a qualified provider as required by the statute to access the Fund. The Commissioner further argues that even if Southeastern had agreed to settle, payment by ISMIE, who is not an insurer of a qualified provider under the Act, does not meet the Act's requirement that a "qualified provider or its insurer" have settled a liability "by payment."

The Act is explicit that "[a] health care provider who fails to qualify under this article is not covered by this article and is subject to liability under the law without regard to this article. If a health care provider does not qualify, the patient's remedy is not affected by this article." IND.CODE § 34-18-3-1 (1998).¹ In addition, "[o]nly while malpractice liability insurance remains in force are the health care provider and the health care provider's insurer liable to a patient or the patient's representative for malpractice to the extent and in the manner specified in this article." Id. § 34-18-13-1.

The Act permits a plaintiff to access the Fund for damages in excess of $100,000 up to $750,000 "[i]f a health care provider or its insurer has agreed to settle its liability on a claim by payment of its policy limits of one hundred thousand dollars ($100,000)." Id. § 34-18-15-3. Section 34-18-3-1 makes clear that the health care provider must be qualified. Accordingly, access requires an "agreement to settle" in which payment of "its policy limits"² is made by a qualified health care provider or the "insurer" of a qualified provider. "Insurer" and "qualified health care provider" are both defined terms. See id. §§ 34-18-2-17 & 34-18-2-24.5. Although Southeastern and Chand were insured by ISMIE, neither was a qualified health care provider by reason of the ISMIE policy during Wisniewski's treatment. To qualify as a provider under the Act, "the health care provider or the health care provider's insurance carrier shall: (1) cause to be filed with the commissioner proof of financial responsibility established under IC 34-18-4; and (2) pay the surcharge assessed on all health care providers under IC 34-18-5." Id. § 34-18-3-2. It is undisputed that ISMIE and its insured did neither with respect to the ISMIE policy.

Wisniewski argues that his settlements meet the Act's requirements because Southeastern was also insured by PICI for one year and was a qualified provider for that time. Wisniewski contends that all the Act requires is an agreement with a qualified health care provider, and his agreement with Southeastern, although not expressed in the written documents, is sufficient to access the Fund. In addition to the release documents, Wisniewski also designated the affidavit of his attorney, Marshall Whalley, as evidence of Southeastern's agreement to settle. Whalley's affidavit states:

5. That I negotiated the instant settlement with qualified health care provider Southeastern and non qualified health care provider Kishan Chand, M.D., personally through my contacts with the attorney for both parties, William Satterlee.

6. That the settlement with qualified health care provider Southeastern was entered into with the specific intent that said settlement would be done as a vehicle to allow access to the Patient's Compensation Fund.

We have recently addressed the requirement of an agreement with a qualified health care provider. See Smith v. Pancner, 679 N.E.2d 893, 896 (Ind.1997). In Smith, the agreement in question purported to settle the plaintiff's claim by payment from the insurer of the doctor's wholly-owned, non-qualified corporation. Because parties are not precluded from "agreeing to settle orally or only partially in writing," we held that a question of fact remained as to whether the qualified doctor had agreed to the settlement, and reversed summary judgment. Id. at 895. The Commissioner urges us to reconsider whether an oral agreement can meet this requirement, pointing out that allowing an oral agreement to qualify permits disputes over precisely who agreed to what. That may be a problem, but if so, it is one for the legislature to address. The Act does not by its terms require any formality to an agreement to settle and we are not prepared to import one.

Whalley's affidavit and the release documents in concert with the payment of $112,500, are sufficient for the trier of fact to infer an agreement by Chand and Southeastern to settle their dispute with Wisniewski. In short, we agree with the Court of Appeals that a material issue of fact exists on the...