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Northumberland County Judge Holds Settlement Agreement Discoverable Pending Jury Determination of Liability

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In an issue of first impression, Northumberland County Judge Charles H. Saylor has ruled that a physician being sued for malpractice may see the confidential settlement agreement between a plaintiff and a defendant hospital, if the physician is ultimately found liable to the plaintiff as a joint tortfeasor.  As a joint tortfeasor, Judge Saylor held that the physician may be entitled to a set-off of any amount the plaintiff had already recovered in the settlement with the hospital.

In the underlying case, plaintiff’s decedent was treated by the defendant physician at the defendant hospital.  According to plaintiff’s complaint, the physician allegedly failed to diagnose an infection which ultimately contributed to the decedent’s death.  The administratrix of the decedent’s estate then brought suit against the hospital and subsequently against the physician.  In June 2011, the hospital settled with the estate.  Thereafter, disclosure of the settlement agreement was requested by the physician, apparently to assist the physician’s counsel and insurer in evaluating a settlement offer on behalf of the physician.

To address the physician’s request, Judge Saylor first took account of how similar requests had been handled in other jurisdictions.  Noting these approaches to range from full disclosure of settlement agreements “as of right” to a per se denial of discoverability, Saylor opted for the middle ground, holding that the discoverability of the agreement would be determined by balancing the interests of all parties involved, i.e. the physician, the hospital, and the estate.

As part of this balancing test, Judge Saylor sought guidance from the Uniform Contribution Among Tortfeasors Act, 42 Pa.C.S.A. 8321-8327, which addresses the effects of a tortfeasor’s release, along with the method for determining a set-off.  According to Judge Saylor, the UCATA “put the wording of the agreement between [the estate] and [the hospital] in issue.”  While noting that the language and terms of the settlement agreement could ultimately be discoverable under the UCATA, Judge Saylor nonetheless stated that first, “a jury must find [the defendant physician] liable before the wording of the confidential settlement agreement becomes significant for the purposes of [the statute].”  Prior to this determination of the physician’s liability, Judge Saylor opined that any interest on the part of the physician in assessing the value of plaintiff’s case (based on the settlement agreement struck with the hospital) would “not [be] sufficient to override the privacy interest embodied in the confidential settlement agreement involving a third party.” 

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