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Supreme Court Holds that Praecipe for Writ of Summons Not Sufficient to Establish Notice of a “Claim” Under MCARE Section 517

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In an opinion issued May 30, 2012, the Supreme Court of Pennsylvania held that in the absence of other notice or communication of a demand, the filing of a praecipe for a writ of summons does not suffice to establish a “claim” pursuant to Section 715 of the MCARE Act.

In the underlying case of Ziv v. Yussen, M.D., et al., the patient plaintiff filed a praecipe for a writ of summons naming her physician, along with other medical providers, as defendants, on June 4, 2007. On August 2, 2007, a complaint was filed, wherein the patient plaintiff alleged medical negligence, which had apparently occurred up to July 7, 2003.

Notably, the defendant physician’s primary insurer did not receive notice of the plaintiff’s writ of summons until July 23, 2007. As such, upon receipt the insurer issued a request to the State Department of Insurance that the claim be given Section 715 status under the MCARE Act. The provisions of Section 715 require the Insurance Department, through the MCARE Fund, to “assume central obligations to the primary insurer,” if a medical negligence “claim” is made more than four years after the treatment at issue. As noted by our Supreme Court,

    the apparent purpose underlying [Section 715] is to afford private insurance companies providing the basic coverage greater certainty in terms of fixing reserves against possible claims, particularly in light of Pennsylvania’s discovery rule exception to statutory periods of limitations pertaining to the commencement of civil actions.

See Pa. Med. Soc’y Liab. Ins. Co. v. Commonwealth, 577 Pa. 87, 90 n.2 (2005).

Ultimately, the Department denied the insurer’s request, stating that under Section 715, the claim had been made less than four years after the alleged malpractice. In this regard, the Department pinpointed the operative date of the “claim” to the date on which the plaintiff’s praecipe for writ of summons was filed, June 4, 2007. The insurer subsequently challenged the Department’s decision and an administrative hearing was held. However, before the Insurance Commissioner could issue a decision, the case was transferred to the Commonwealth Court and a new hearing examiner was appointed.

Following arguments, the examiner recommended that the Department’s denial of Section 715 status be reversed. According to the examiner, while the terms “claim” and “made” were ambiguous within the statutory language of Section 715, the legislative purpose of the statute, as enumerated by the Supreme Court in Pa. Med. Soc’y, could not be achieved without the appropriate notice. While the examiner further supported his position with analysis of legislative history, statutory construction, and recent adjudications by the Insurance Commissioner, the Commonwealth Court ultimately disagreed and upheld the denial of Section 715 status, holding that under the same adjudication referenced by the examiner, the position of the Insurance Commissioner was that a claim was effectively “made” on the date a writ of summons is filed.

On appeal, the Supreme Court similarly found ambiguity in the operative terms of Section 715, and like the Commonwealth Court examiner, turned its focus to principles of statutory construction and legislative history. Noting the purpose of Section 715 to afford insurers greater certainty in calculating reserves, the Court found such a purpose to be “most consonant” with a construction “encompassing some notice to the insured.” Accordingly, the Court held that a “claim” under Section 715 of the MCARE Act could not be established simply by the filing of a praecipe for a writ of summons, and that some form of notice or communication, e.g. a demand letter forwarded by defense counsel or the insured themselves, would be required before the operative time period could be established.

To read the full opinion, CLICK HERE.

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