Tuesday, January 3, 2012

Judge Nealon of Lackawanna County Addresses Alleged Release in Medical Malpractice Case

Judge Terrence R. Nealon of the Lackawanna County Court of Common Pleas recently addressed a declaratory judgment action, filed in relationship to a medical malpractice suit, in which certain defendants and their primary liability insurance carrier sought a judicial declaration that the factual stipulations contained in bankruptcy court motions filed by the tort plaintiff effectively released the emergency room physician from malpractice liability, extinguish the alleged vicarious liability of the defendant hospital, and also reduced the liability of the other alleged joint tortfeasor defendants in the case of Moses Taylor Hospital v. Carnevale, No. 11-Civil-3999 (C.P. Lacka. Dec. 8, 2011 Nealon, J.).

By way of background, a defendant physician in this medical malpractice suit filed for bankruptcy thereby triggering an automatic stay. In an effort to secure relief from the automatic stay to allow the tort case to proceed, the plaintiff filed a motion with the bankruptcy court seeking relief from the automatic stay in which motion the plaintiff noted an agreement not to execute any malpractice judgment against the debtor physician’s personal assets and, instead, to only pursue the physician’s liability insurance coverage (primary and MCare).

In response, the physician’s hospital-employer filed a declaratory judgment action in the Lackawanna County Court of Common Pleas seeking a declaration that the plaintiff's agreement not to execute against the doctor’s personal assets constituted a release of the physician, extinguished the vicarious liability claim against the hospital-employer based upon the conduct of that physician, and also resulted in a pro rata or a pro tanto reduction of the other defendant physicians’ tort liability.

According to Judge Nealon’s opinion, the bankruptcy court denied the Motion for Relief from the automatic stay until the state court decided this declaratory judgment action. The case came before Judge Nealon by way of a demurrer filed by the plaintiff to the declaratory judgment Complaint.

The underlying tort plaintiff sought to dismiss the declaratory judgment action on the grounds that his bankruptcy motion specifically stated that the motion should not be considered to be a release of the bankrupt tortfeasor or any other malpractice Defendant and, to the contrary, the motion reflected a clear intent to pursue, rather than abandon, his malpractice claim against the various defendants.

After reviewing the underlying matters and the applicable law, Judge Nealon ruled that the unambiguous language of the claimant’s agreement not to execute against the debtor doctor’s personal assets could not possibly be construed as a release of that tortfeasor or any other malpractice defendant or result in a reduction of their joint tortfeasor exposure.

Judge Nealon sustained the tort claimant’s demurrer after finding that it was “clear and free from doubt” under the governing law that the parties pursuing the declaratory judgment could not obtain their requested relief based upon the facts set forth in the bankruptcy motion.

In so ruling, the court provided a detailed review of the pertinent law relevant to the effects of alleged releases.

Anyone desiring a copy of this decision in the case of Moses Taylor v. Carnevale by Judge Nealon may contact me at dancummins@comcast.net.

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