Cope v. Insurance Commissioner of the Commonwealth

DISSENTING OPINION BY

Judge SIMPSON.

I join in the dissenting opinion of Judge Pellegrini. I write separately to offer alternative analysis of the dispositive statutory language.

This case centers on an interpretation of Section 715(a) of the MCARE Act,¹ which requires the Medical Care Availability and Reduction of Error Fund (Fund) to act as a medical provider’s primary insurer and provide first-dollar indemnity and costs of defense in certain limited situations. That Section states, as pertinent:

If a medical professional liability claim against a health care provider is made more than four years after the breach of contract or tort occurred and if the claim is filed within the applicable statute of limitations, the claim shall be defended by the department if the department received a written request for indemnity and defense within 180 days of the date on which notice of the claim is first given to the participating health care provider or its insurer.

40 P.S. § 1303.715(a) (emphasis added).

Interpreting this provision, the majority holds Section 715(a)’s 180-day reporting requirement does not begin to run where a medical provider receives a writ of summons in a medical malpractice suit because a writ is insufficient to notify the provider he is eligible for Section 715(a) coverage. In reaching this result, the majority focuses on the phrase “the claim” as used in Section 715(a). Because I believe the proper focus in interpreting Section 715(a) should be on the phrase when “notice of the claim is first given,” I respectfully dissent.

“Notice” is generally defined as “[Regal notification required by law or agreement, or imparted by operation of law as a result of some fact_” BlacK’s Law DictionaRY 1090 (8th ed. 2004). There are many different types of notice; indeed, Black’s Law Dictionary enumerates over 20 types of notice.

Despite the various types of notice, Section 715(a) is very specific in terms of the type of notice that triggers the 180-day reporting period. That Section states the reporting period begins to run from “the date on which notice of the claim is first given” to a provider or its insurer. Thus, the plain language of Section 715(a) makes it clear that the legislature intended that the earliest or first notice to a provider or its insurer start the 180-day reporting period.²

The type of notice contemplated by Section 715(a) is properly characterized as inquiry notice. Black’s Law Dictionary defines “inquiry notice” as “[njotice attributed to a person when the information would lead an ordinarily prudent person to investigate the matter further .... ” Black’s Law Dictionary 1091 (8th ed. 2004). This is consistent with our Supreme Courts explanation: “whatever puts a party upon inquiry amounts in judgment of law to notice, provided the inquiry becomes a duty ... and would lead to the knowledge of the requisite fact by the exercise of ordinary diligence and understanding....” Pa. Range Boiler Co. v. City of Phila., 344 Pa. 34, 38, 23 A.2d 723, 725 (1942) (emphasis added) (citation omitted).

Because Section 715(a) states the 180-day reporting period begins to run when notice of a claim is first given, I believe the type of notice contemplated in Section 715(a) is “inquiry notice.” Therefore, I believe the 180-day reporting period begins to run when a provider first receives information that would lead a reasonable person to investigate the matter further.

A writ of summons is an official court document in a form prescribed by law which informs a defendant that named plaintiffs have commenced an action against him in a specified court. Pa. R.C.P. No. 1351. Because it is original process, special rules govern service of the writ. Pa. R.C.P. Nos. 400-430. The basic purpose of the rules for service of original process is “to assure that a defendant will receive actual notice of the commencement of an action against him and of his duty to defend.” Castel v. Mitchell, 56 Pa.Cmwlth. 64, 423 A.2d 1375, 1377 (1981) (citation omitted).

In this case, the record adequately supports the Insurance Commissioners determination that Dr. Cope was served with the amended writ of summons in June 2004 and, in fact, knew it involved a claim for medical malpractice by a former patient. This knowledge is inferred from several circumstances, including his subsequent conduct: he forwarded the writ to his medical malpractice carrier.

Formal service upon a physician of a writ of summons from a former patient would certainly cause an ordinarily prudent provider to investigate the matter further. Therefore, as of the time he was served with original process, Dr. Cope was placed on “inquiry notice” sufficient to trigger the running of the 180-day reporting requirement.

Unfortunately, neither Dr. Cope nor his professional practice notified the Fund within 180 days of the date on which he first received notice of the claim against him by virtue of service of the writ; rather, Dr. Cope did not notify the Fund of the claim until February 2006, when he received the complaint. Because Dr. Cope did not notify the Fund within 180 days of when he was first upon inquiry of the claim, I would uphold the Insurance Commissioner’s decision that denied his claim as untimely. Cf. Greater New York Mut. Ins. Co. v. Farrauto, 158 A.D.2d 514, 551 N.Y.S.2d 277 (1990) (in jurisdiction not requiring proof of insurer prejudice, where insurance policy directed insured to give notice of occurrence “as soon as practicable,” delay in notifying insurer until receipt of complaint was not excusable where reasonable and prudent insured would have concluded a strong possibility existed that a liability claim would arise prior to actual filing of complaint).

Judge PELLEGRINI joins in this dissent.

1 . The Medical Care Availability and Reduction of Error Act, Act of March 20, 2002, P.L. 154, as amended, 40 P.S. § 1303.715(a).

2 . Further support for this interpretation of Section 715(a)'s notice provision is found in the legislative history to Section 715(a). More particularly, the predecessor to Section 715(a), former Section 605 of the Health Care Services Malpractice Act, Act of October 15, 1975, P.L. 290, as amended, 40 P.S. § 1301.605, repealed by the Act of March 20, 2002, P.L. 154, required the Fund to provide indemnification and defense costs "if the fund ... received a written request for indemnity and defense within 180 days of the date on which notice of the claim is given to the health care provider or his insurer." With the enactment of the MCARE Act in 2002, the legislature modified this statutory language by requiring the Fund to provide indemnification and defense costs where it receives "a written request ... within 180 days of the date on which notice of the claim is first given to the participating health care provider or its insurer ....” 40 P.S. § 1303.715(a) (emphasis added). As stated by the Insurance Commissioner here, “Adding the word 'first' to qualify 'notice of the claim’ in the 2002 legislation even more strongly evidences that the clock starts at the earliest juncture.” Insurance Commissioner’s Adj. and Order of 11/5/07 at 11.