Article: Remedies for Late Payment of Settlement Funds

The below article of mine recently appeared in the June 18, 2026 edition of the Pennsylvania Law Weekly and is republished here with permission.

Remedies for Late Payment of Settlement Funds

June 18, 2026

By

Daniel E. Cummins


In most instances, once a civil litigation matter is settled, the defendant’s liability insurance carrier promptly issues payment. In this regard, the carrier has an interest in both protecting its insured in this regard and in closing out another file. However, in rare instances, a settlement payment may be delayed for an inordinate period of time for one reason or another.

When a settlement payment is delayed, plaintiffs have options to compel the production of the settlement payment or to secure sanctions against the defendant relative to the delay. Most settlement agreements themselves outline when payment is due. And, whether or not there is such a provision in a release regarding the timing of a payment, plaintiffs also have the benefit of the mandate under Pa.R.C.P. 229.1, which requires that the settlement payment be “delivered … within 20 calendar days from the defendant’s receipt of an executed release.”

In terms of the status of Pennsylvania law in this regard, it is often said by many that, if one needs a thorough overview of the current status of a particular area of the law, one should look for a decision on the issue written by Judge Terrence R. Nealon of the Lackawanna County Court of Common Pleas. This advice holds true with Nealon’s recent opinion in the case of Hill v. Riverside Healthcare and Rehabilitation Center, No. 2023-CV-3399 (C.P. Lacka. Co. May 22, 2026 Nealon, J.), in which Nealon addressed the topic of remedies available to a plaintiff under Pa.R.C.P. 229.1 where a defendant fails to produce a settlement payment in a timely fashion after the receipt of an executed release.

According to the opinion, this matter involved a professional liability action against the health care and rehab center. The plaintiff’s decedent’s had been a patient at the defendant’s facility. The defendant facility owner at issue in this case eventually became insolvent and filed for bankruptcy.

During the course of this litigation, the parties agreed to participate in a settlement conference with a private mediator. Prior to the mediation, the defendant’s attorney confirmed in writing that the parent and affiliate entities of the defendant were insolvent and in bankruptcy proceedings. Defense counsel also confirmed that, as such, the defendant would not be able to satisfy the first $75,000 of any settlement as that represented the amount of the defendant’s deductible, but that any obligation above that amount would be covered by the defendant’s liability insurance policy.

As a result of the mediation, the parties reached a settlement agreement for a net payment of $175,000. The total amount of the party’s settlement was actually $250,000 but the plaintiff agreed to waive the defendant’s payment of its $75,000 deductible. The net settlement payment of $175,000 was to be paid entirely by the defendant’s liability insurance carrier.

The court’s opinion emphasized that the insurance company’s adjuster had agreed to the settlement without any indication of any coverage issues existing between the defendant and its insurance company.

After the settlement, the plaintiff proceeded to court on a petition for court approval of the settlement in this death case. The court granted the Plaintiff’s petition and approved the settlement. The parties then executed the settlement agreement.

Plaintiff’s counsel then sent the signed release, the court order approving the settlement and other closing documents to the defendant’s counsel and requested the settlement payment.

In his opinion in this Hill case, Nealon emphasized that noticeably absent from the settlement agreement was any indication or even a suggestion that a coverage issue may exist between the defendant and its insurance company. Nor was there any reference that any such coverage issue needed to be resolved before the plaintiff would receive the settlement payment.

Thereafter, when plaintiff’s counsel wrote for the status of the settlement check, defense counsel indicated that there was some issue that the adjuster had to work out. Again, there was no reference made to any insurance coverage issues.

The opinion of the court noted facts that showed that the plaintiff’s attorney showed great patience and was more than accommodating in his repeated efforts to secure the production of the settlement check over the next several months. After several months then went by with no production of the settlement check, counsel for the plaintiff filed a motion under Pa.R.C.P. 229.1 relative to the defendant’s failure to produce the settlement check in a timely fashion after the production of the executed release.

Judge Nealon reviewed Pennsylvania Rule of Civil Procedure 229.1 which governs the prompt delivery of settlement funds within 20 days of the receipt of an executed release by the defendant.

The rule otherwise provides that, if court approval of the settlement is required, the mandated 20-day time period under Rule 229.1 does not become operative until the settlement is so approved.

Nealon noted that, under Rule 229.1, if a defendant fails to timely deliver settlement funds, a plaintiff has the right to seek either of two remedies. First, a plaintiff can seek to invalidate the settlement agreement and request that the matter return to the trial list. Second, a plaintiff can seek certain sanctions against the defendant.

The court in Hill noted that, if the plaintiff opt to pursue sanctions against the defendant, Rule 229.1(e) directs the plaintiff to file an affidavit “attesting to nonpayment,” and to submit six items for the court’s review with the affidavit. Among the documents to be submitted with the affidavit are a copy of “any document evidencing the terms of the settlement agreement,” a copy of “the executed release,” a copy of “a receipt reflecting delivery of the executed release,” a certification by counsel “the applicable interest rate,” and “that the affidavit and accompanying documents have been served on the attorneys for all interested parties.” Lastly, also attached to the affidavit should be “the form of order prescribed by subdivision (h)” of Pa.R.C.P. 229.1 for execution by the court.

Nealon additionally noted that the type of sanctions allowed in this instance are spelled out under Pa.R.C.P. 229.1. More specifically, under Rule 229.1(g), if the court determines that a defendant has failed to deliver the settlement funds within 20 days and there is no material dispute as to the terms of the settlement or the terms of the release, the court “shall impose sanctions in the form of interests calculated at the rate equal to the prime rate as listed in the First Edition of the Wall Street Journal published for each calendar year for which interest is awarded, plus 1%, not compounded, running from the 21st day to the date of delivery of the settlement funds, together with reasonable attorney fees incurred in the preparation of the affidavit.”

Nealon otherwise ruled in the Hill case that the fact that the insurance company’s noncompliance with the payment requirement may be attributable to a post-settlement assertion of a potential coverage issue did not warrant the denial of the plaintiff’s request for sanctions relative to the failure of the carrier to produce the settlement check within 20 days of the production of the executed release.
Conclusion

The Hill decision written by Judge Nealon provides thorough guidance on the steps to take in securing sanctions relative to a late payment of settlement funds required by an executed release.

As evidenced by plaintiff’s counsel’s actions in the Hill case, it is advisable for the plaintiff to show some patience while repeatedly requesting, in writing, the settlement payment once the mandated 20-day time period has expired for the timely production of the check. By showing some patience and creating a written record of repeated requests for the production of the check, the plaintiff will be able to bolster their request for sanctions as opposed to the case where a plaintiff runs to the courthouse on a motion for sanctions on the 21st day after the release was received by the defense counsel.

Daniel E. Cummins is the managing partner at Cummins Law in Clarks Summit, Pennsylvania. Contact him at dancummins@cumminslaw.net.




Reprinted with permission from the June 18, 2026 edition of the "The Pennsylvania Law Weekly © 2026 ALM Global Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-256-2472 or asset-and-logo-licensing@alm.com.

Court Gives Detailed Opinion on Sanctions Applicable to Late Payment of Settlement Funds

In the case of Hill v. Riverside Healthcare and Rehabilitation Center, No. 2023-CV-3399 (C.P. Lacka. Co. May 22, 2026 Nealon, J.), the Lackawanna County Court of Common Pleas addressed a Petition filed by a Plaintiff seeking to impose sanctions against a Defendant under Pa. R.C.P. 229.1 for failing to deliver settlement funds in a timely fashion after an executed Release was produced by the Plaintiff.

According to the Opinion, this matter involved a professional liability action against a healthcare and rehab center.

In this matter, the Defendant facility owner at issue in this case eventually became insolvent and filed for bankruptcy.

During the course of this litigation, the parties agreed to participate in a settlement conference with a private mediator. Prior to the mediation, the Defendant’s attorney confirmed in writing that the parent and affiliate entities of the Defendant were insolvent and/or in bankruptcy proceedings and confirmed that the Defendant would not be able to satisfy the first $75,000.00 of any settlement but that any obligation thereafter would be covered by insurance.

After a mediation, the parties reached a settlement agreement for a net payment of $175,000.00. The total amount of the party’s settlement was actually $250,000.00 but the Plaintiff agreed to waive the Defendant’s payment of its $75,000.00 deductible with a net settlement payment of $175,000.00 to be funded entirely by the Defendant's insurance carrier.

The court’s Opinion in this matter emphasized that the insurance company’s adjuster agreed to the settlement without any indication of any coverage issue between the actual Defendant and its insurance company.

Thereafter, in this death case, the court granted the Plaintiff’s Petition for Court Approval of the Settlement. 

The Plaintiff then executed the settlement agreement and sent the signed Release, the court Order approving the settlement, and other closing documents to the Defendant’s counsel and requested payment.

The court point out that noticeably absent from the settlement agreement was any indication, or even a suggestion, that a coverage issue may exist between the Defendant and its insurance company or that any such coverage issue needed to be resolved before the Plaintiff would receive the settlement payment. 

After the closing documents were produced and the settlement check was not forthcoming, Plaintiff’s counsel wrote for the status of the settlement check.  Defense counsel indicated that there was some issue that the adjuster had to work out. There was no reference made to any insurance coverage issue during that interaction.

After several months then went by with no production of the settlement check, counsel for the Plaintiff filed the Motion at issue.

Judge Terrence R. Nealon of the Lackawanna County Court of Common Pleas reviewed Pennsylvania Rule of Civil Procedure 229.1 which governs the prompt delivery of settlement funds within twenty (20) days of the receipt of an executed Release by the Defendant. 

The Rule otherwise provides that, if court approval of the settlement is required, then the 20 day deadline under Rule 229.1 does not begin to run until the settlement is so approved.

Judge Nealon noted that, under Rule 229.1, if the Defendant fails to timely deliver settlement funds, the Plaintiff has the right to seek one of two possible remedies. First, a Plaintiff can seek to invalidate the settlement agreement and allow the matter to return to the trial list. Second, the Plaintiff can seek sanctions against the Defendant.

The court noted that, if a plaintiff opts to pursue sanctions against a defendant, Rule 229.1(e) directs the Plaintiff to (1) file an affidavit “attesting to non-payment,” to submit copies of “any document evidencing the terms of the settlement agreement,” and/or “the executed Release,” and “a receipt reflecting delivery of the executed Release,” (2) file certifications by counsel “of the applicable interest rate,” and “that the affidavit and accompanying documents have been served on the attorneys for all interested parties,” and (3) file “the form of order prescribed by subdivision (h)” for execution by the court.

The court also noted that under Rule 229.1(g), if the court determines that the Defendant has failed to deliver the settlement funds within twenty (20) days and there is no material dispute as to the terms of the settlement or the terms of the Release, the court “shall impose sanctions in the form of interests calculated at the rate equal to the prime rate as listed in the first edition of the Wall Street Journal published for each calendar year for which interest is awarded, plus one (1) percent, not compounded, running from the 21st day after the production of the executed Release to the date of delivery of the settlement funds, together with reasonable attorneys’ fees incurred in the preparation of the affidavit.

The court otherwise ruled that the fact that the insurance company’s noncompliance with the payment requirement may be attributable to a post-settlement assertion of a potential coverage issue did not warrant the denial of the Plaintiff’s request for sanctions.  Accordingly, the court granted the Plaintiff’s Motion and awarded sanctions pursuant to Rule 229.1.

Anyone wishing to review a copy of this decision may click this LINK.

Source of image:  Photo by kaboom pics on www.pexels.com.

Court Rules Plaintiff Cannot Insert Into Written Settlement Agreement a Term That Was Not Contemplated in Previous Oral Settlement Agreement

In the case of Liberty Prop. Ltd. P’ship v. Kendall Heaton Assocs., Inc., No. 2947 EDA 2024 (Pa. Super. Feb. 27, 2026 Olson, J., Dubow, J. and Beck, J.) (Op. by Olson, J.), the Superior Court upheld and affirmed a trial court’s enforcement of a oral settlement agreement reached by the parties in a civil litigation matter.  

In this case, the Plaintiff sought to insert an additional term in an effort to restrict the scope of the written release after the oral settlement contemplated releasing all known and unknown claims.

According to the Opinion, this matter arose out of construction litigation.

The Plaintiff was a developer that had contracted with several parties, including the Defendant, for construction services.  During construction, the Plaintiff discovered design defects that lead to additional costs. After attempts to resolve these issues through a Mediation failed, the Plaintiff filed a lawsuit for breach of contract and professional negligence.

During the course of the litigation, the parties reached a settlement during negotiations participated in by the Plaintiff’s in-house representatives, including an attorney, as well as outside counsel for the Plaintiff. Once that oral agreement to settlement was reached, the Defendant’s attorney confirmed the terms of that settlement via an email.  Plaintiff’s counsel acknowledged the email as representing the Plaintiff's understanding of the agreement as well.

However, the Plaintiff later sought to exclude latent defects from the final written settlement agreement, which was a term that was not part of the original oral settlement agreement.

Thereafter, when the parties could not resolve their dispute over the terms of the settlement agreement, the Defendant filed a Motion to Enforce the original settlement agreement. The Plaintiff filed a cross-Motion requesting the court’s enforcement of the different version of the settlement that the Plaintiff desired. 

The trial court granted the Defendant’s Motion relative to the original oral settlement agreement and denied the Plaintiff’s Motion to seeking to change that agreement under a written settlement agreement.

The Superior Court found that the trial court had properly ruled that the parties had reached an enforceable oral settlement agreement, which was not contingent upon the confirmation of the terms in a written document. The court additionally found that the agreement included a mutual release of all known and unknown claims related to the construction project in exchange for the monetary settlement payment.

The appellate court otherwise determined that the Plaintiff’s attempt to alter the agreement in the written settlement agreement to exclude latent defects was an additional term that was not part of the original settlement agreement.

Anyone wishing to review a copy of the Majority decision may click this LINK.  The dissenting Opinion by Judge Dubow can be viewed HERE.


Source: The Legal Intelligencer State Appellate Case Alert, www.Law.com (March 17, 2026).

Source of image:  Photo by Radisson US on www.unsplash.com.

Court Reviews Whether Attorney Had Client's Authority to Settle For a Particular Amount

In the case of Hwang v. Camagna, No. 2023-01338-PL (C.P. Chester Co. Aug. 23, 2024 Binder, J.), the court denied a Defendant’s Motion to Enforce a Settlement and for Sanctions relative to an alleged settlement of a dental malpractice case for $1,500.00.

According to the Opinion, counsel for the Plaintiff believed he had authority to settle a dental malpractice claim based upon email communications.

After the Defendant filed a Motion to Enforce the Settlement, Plaintiff’s counsel submitted to the court, for in camera review, the purported letter from the client authorizing him to enter into a settlement.

After reviewing the correspondence, the court found that, while the document implied that the Plaintiff verbally authorized counsel for the Plaintiff to settle for some amount, the document reviewed by the court did not show any expressed authority to settle for a particular amount.

Accordingly, the court ruled that it could not find that the Plaintiff had expressly authorized counsel for the Plaintiff to settle the Plaintiff’s claims for $1,500.00. The court reiterated the general rule that attorneys cannot settle a case without the express authorization from a client.

Anyone wishing to review a copy of this decision may click this LINK


Source: The Legal Intelligencer Common Pleas Case Alert, www.Law.com (Aug. 14, 2025).

Source of image:  Photo by Sora Shimazaki on www.pexels.com.

Court Rules that Plaintiff's Claim Barred By Prior Settlement Agreement

UPDATE:  On November 7, 2025, the Pennsylvania Superior Court withdrew its below summarized decision and granted an en banc argument.

In the case of West v. Abington Memorial Hospital, No. 1723 EDA 2023 (Pa. Super. Aug. 28, 2025 Bowes, J., Olson, J., and McLaughlin, J.) (Op. by Bowes, J.) (dissenting Opinion by McLaughlin, J.), the Superior Court affirmed a trial court’s granting of a medical malpractice Defendant’s Motion for Judgment on the Pleadings based on a conclusion that the Plaintiff’s lawsuit was barred by a Release executed in the parties’ previous settlement.

According to the Opinion, the Plaintiffs had previously filed a medical malpractice action against certain Defendants alleging that the Defendants were negligent during the Plaintiff’s labor and delivery that resulted in injuries to the Plaintiff’s child.

In the midst of the malpractice trial in the previous matter, the parties reached a settlement for the full insurance policy limits.

The Plaintiffs executed a Settlement and a Release that was approved by the trial court.

Several years later, the Plaintiffs filed the present lawsuit, alleging that they were fraudulently induced to enter into the settlement due to the hospital’s failure to produce a memo from one of the Defendant doctors that was responsive to the Plaintiff’s discovery requests in the previous case and which addressed one of the primary issues in the malpractice trial.

The Plaintiffs have discovered the memo when the hospital produced it in an unrelated case involving the Plaintiff’s attorney.

The Plaintiffs claimed in the new lawsuit that, had the memo been produced in their previous malpractice action, they would have obtained a settlement or jury verdict above the settlement that they actually negotiated.

In this new case, the Defendants filed a Motion for Judgment on the Pleadings based upon the Release previously entered into between the parties.

The Superior Court affirmed the trial court’s granting of the judgment on the pleadings. The appellate court agreed that the Release covered all claims arising from or connected to the Plaintiff’s malpractice action. The court found that the new lawsuit fell within the scope of the Release given that the new lawsuit sought to recover the difference between the parties’ settlement in the amount of compensation the Plaintiffs claimed that they could have obtained had the Defendants produced the memo at issue.

The appellate court ruled that the Plaintiffs were unable to avoid the effect of the integration clause in the Release, which precluded the Plaintiffs from introducing parol evidence to prove fraud in the inducement.

Anyone wishing to review a copy of the Majority Opinion for this decision may click this LINK.  The Dissenting Opinion may be reviewed HERE.

Source of image:  Photo by Solange Brenis on www.unsplash.com.

Court Refuses To Enforce Settlement Where Plaintiff Asserts She Did Not Agree to the Settlement

In the case of Vangjelli v. Banks, No. 19-CV-1635 (E.D. Pa. April 6, 2023 Bratter, J.), the court denied a Defendant’s Motion to Enforce a Settlement after finding that the Plaintiff asserted that she never agreed to the settlement and that the Plaintiff’s attorney had no express authority from the client to accept the proposed settlement.

The case arose out of issues related to the Plaintiff’s attempts to enter a Social Security Card Center and allegedly encountering trouble with a security guard. This led to the Plaintiff, at one point, being tackled by the security guard. The Plaintiff asserted various claims for personal injury as a result.

After the state court case was removed to federal court, the parties were referred to a magistrate judge for a Settlement Conference.

The magistrate judge was informed that the parties had settled the case. As such, the court dismissed the case with prejudice.

The Plaintiff then sent a letter to the court two (2) days later stating that she did not agree to settle and that her attorneys knew that. The Defendants filed the Motion to Enforce the Settlement at issue.

The court found a conflict of interests between the Plaintiff and her attorneys and granted the attorneys’ Motion to Withdraw. The Plaintiff did not secure new counsel.

The court construed the Plaintiff’s attorney’s letter to the court as a pro se Motion to Set Aside the Order of Dismissal.

Applying Pennsylvania law, the federal courts noted that counsel needed the express authority of the client to settle the case. The court stated that, express authority would not be found where, as here, the client had repudiated the attorney’s authority in a timely manner after the settlement.

Given that the evidence in this case showed a lack of clarity regarding the attorney’s express authority to settle the claims, the court denied the Defendant's Motion to Enforce the Settlement.

More specifically, the court saw and heard notable material gaps and inconsistencies in the testimony of the Plaintiff and her attorneys on the issues presented. The court also noted that none of the witnesses presented any documentary evidence.

It was indicated that there were two Settlement Conferences that were conducted via telephone. The record indicated that the Plaintiff was in the attorney’s office listening to the first conference but was not present for the second conference. While she was not present at the second conference, she had agreed to be available by telephone to discuss any settlement offers and to possibly authorize her attorneys to accept any offers.

The Plaintiff’s attorney testified that he conveyed the settlement offer to the Plaintiff, asked her if she wanted to settle, and that the Plaintiff had responded in the affirmative.

The attorney also testified that, when he called the Plaintiff back to tell her that the case had settled, the Plaintiff stated that she had changed her mind and no longer wanted to accept the offer.

During her testimony, the Plaintiff stated that she did not remember ever saying she wanted to accept the offer and that she had, instead, told her attorney to “go higher.”

Based upon the record before it, the court found that it could not conclude that the attorney for the Plaintiff ever had any expressed authority to accept the settlement agreement. Given that the contradictory testimonial evidence showed that there was not a meeting of the minds between the Plaintiff and her attorney as to what was said, let alone what was meant, the court denied the Petition to Enforce the Settlement.

Anyone wishing to review a copy of this decision may click this LINK.  The Court's Order on the case can be viewed HERE.


Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (April 27, 2023).

Source of image:  Photo by Cottonbro Studio on www.pexels.com.

Court Addresses Ability of Non-Settled Defendant To Have Settled Defendants On the Verdict Slip

In the case of Williams v. Glenmaura Senior Living at Montage, LLC, No. 21-CV-1494 (C.P. Lacka. Co. Nov. 7, 2022 Nealon, J.), the court considered a motion filed by a Defendant doctor for reconsideration of the court’s previous Orders which discontinued the case as to other named Defendants which previous dismissal from the case of those Defendants was based upon those Defendants entering into earlier joint tortfeasor settlement agreements with the Plaintiff.

According to the Opinion, this case arose out of a medical professional liability action against numerous Defendants related to a slip and fall event that occurred on the premises after which the alleged negligent treatment by the medical Defendants allegedly resulted in the death of the Plaintiff.

After reviewing Pennsylvania Rules of Civil Procedure 229 regarding the Discontinuance of actions, the court rejected the moving medical Defendant’s argument that the settled Defendants must remain in the case and on the Verdict Slip.

In this regard, the court found no evidence presented by the moving Defendant that warranted keeping the settling Defendants in the case. Of note, the court stated that there was no valid expert evidence that would be presented by the moving Defendants to keep the settled Defendants in the case. 

The court also noted that the moving Defendants reference to certain standard of care and causation opinions of one of the experts in the case was not admissible as such testimony constituted hearsay. The court reiterated the rule of law that one expert may not act as mere conduit or transmitter of the content of an admissible evidence or other expert opinion where the testifying expert does not bring to bear on it his own expertise or judgment.

Anyone wishing to review a copy of this decision may click this LINK.

Judge Nealon of Lackawanna County Rejects Request to Have Settled Defendants on Verdict Slip

In the case of Williams v. Glenmaura Senior Living at Montage, LLC, No. 21-CV-1494 (C.P. Lacka. Co. Nov. 7, 2022 Nealon, J.), the court addressed a motion by certain Defendants in a medical malpractice case for reconsideration of the court’s previous Order granting certain settling Defendants’ Motion for Discontinuance from the case by virtue of the settling Defendants’ Joint Tortfeasor Agreements.

One of the non-settling Defendants wished to keep the settling Defendants in the case for purposes of the trial.

Judge Terrence R. Nealon
Lackawanna County

In his Opinion, Judge Terrence R. Nealon of the Lackawanna County Court of Common Pleas confirmed that, in Pennsylvania, there is no absolute right to have settling Co-Defendants placed on a verdict slip.

Rather, under the applicable standard of review, the trial court is required to determine whether any evidence of a settling Co-Defendant’s liability exists before deciding whether to put that Co-Defendant on the verdict slip.

In terms of a medical malpractice action, Judge Nealon noted that expert testimony is required to establish the elements of a duty, breach, and causation and that, if expert testimony will not be presented at trial to establish a settling Defendant’s potential liability, then that settling Defendant should not be included on the verdict slip.

Judge Nealon noted that he had previously granted the voluntary Discontinuance of the settling Defendants in this matter in the absence of admissible expert testimony against those Defendants. The court also noted that any efforts by the Plaintiff to introduce expert testimony on the standard of care and causation would amount to hearsay in this case.

As such, the court found that it had previously properly granted the settling Defendants’ Motions for Discontinuance. The Motion for Reconsideration at issue here was, therefore, also denied.

Anyone wishing to review a copy of this decision may click this LINK.

Post-Injury Waiver of Liability Agreement Allowed to Stand (For the Most Part)

In the case of Pavlak v. Coolican, No. 21-CV-3060 (C.P. Lacka. Co. May 25, 2022 Nealon, J.), Judge Terrence R. Nealon of the Lackawanna County Court of Common Pleas addressed issues related to a post-injury Release/Settlement as compared to a pre-injury exculpatory agreement.

By way of background, the Plaintiff in this matter, who had dental implants inserted and later removed by the Defendant dentist, executed a “refund of money and release of liability” agreement under which the dentist refunded the Plaintiff’s earlier payment for the implant procedures in exchange for a General Release from liability or any claim related to those dental services.

In this matter, the Plaintiff commenced a declaratory judgment action asserting that the refund/release Agreement was unenforceable as being in violation of Pennsylvania public policy and due to the lack of supporting consideration.

The Plaintiff’s public policy argument was based upon the provision in the agreement which prohibited the Plaintiff from filing an administrative complaint with the State Board of Dentistry.

The court found that this provision barring the Plaintiff from filing a Complaint or providing additional information to the State Board of Dentistry was void as being against clearly expressed public policy as set forth under The Dental Law found at 63 P.S. §122,123.1, and the corresponding regulations which are intended to protect the health, safety, and welfare of the public.

However, Judge Nealon found that the invalid provision of this agreement was not an essential part or primary purpose of the Refund and Release Agreement and that, as such, that invalid provision could be severed from the remaining terms.

The court then found that the remaining terms of the agreement, including the Release from liability in exchange for the refund of the money, were indeed enforceable. The court found that, since the dentist was not legally obligated to refund the Plaintiff’s prior payment, the dentist experienced the required detriment in order to provide consideration to support this agreement.

As such, the court granted the Motion for Judgment on the Pleadings to the extent that it sought a judicial determination that the provision barring the Plaintiff from filing an administrative complaint was unenforceable on public policy grounds. However, the Motion for Judgment on the Pleadings was denied in all other respects and the agreement was otherwise allowed to stand.

Anyone wishing to review a copy of this decision may click this LINK.

Source of Image:  Photo by Nick Fewings on www.unsplash.com.

Corrected Link for case of M.M. a Minor v. The County of Carbon Highlighted on Tort Talk Yesterday

 Yesterday's Tort Talk post covered the case of M.M., a Minor v. The County of Carbon, No. 18-CV-2341 (C.P. Carbon Co. Dec. 29, 2021 Nanovic, J.).

Below is the corrrect Link for the decision.  I apologize for any confusion that may have been caused by the faulty Link.

In this decision, Judge Roger N. Nanovic addressed the issue of whether a minor Plaintiff was liable to pay a Department of Human Services/Medicaid lien arising out of a motor vehicle accident case in a matter where the Defendant had obtained a favorable ruling prior to trial on a Motion In Limine to exclude evidence at trial of all medical bills because it appeared that those medical bills were covered by a policy of insurance.

In the Opinion, Judge Nanovic found that the Medicaid payments were not paid under any policy of insurance and that, therefore, the lien must be paid back out of the Plaintiff’s settlement proceeds.

Anyone wishing to review a copy of this decision may click this LINK.

Court Rules on Court Approval of Settlement that Minor Plaintiff Must Satisfy Medicaid Lien

In the case of M.M., a Minor v. The County of Carbon, No. 18-CV-2341 (C.P. Carbon Co. Dec. 29, 2021 Nanovic, J.), Judge Roger N. Nanovic addressed the issue of whether a minor Plaintiff was liable to pay a Department of Human Services/Medicaid lien arising out of a motor vehicle accident case in a matter where the Defendant had obtained a favorable ruling prior to trial on a Motion In Limine to exclude evidence at trial of all medical bills because it appeared that those medical bills were covered by a policy of insurance.

According to the Opinion, the case ultimately settled and the Plaintiffs then pursued court approval of the settlement.

In that Petition for Court Approval of the Settlement, the Plaintiff asserted that, given the Motion In Limine result, which confirmed that the Plaintiff allegedly could not introduce the Medicaid payments at trial and recover on the same, the Plaintiff was not liable to pay the Medicaid lien following the court’s approval of the settlement.  The Plaintiff argued that, as such, the Medicaid lien did not have to be considered in terms of the settlement of the case.

In the Opinion, Judge Nanovic disagreed with the Plaintiff’s position and found that the Medicaid payments were not paid under any policy of insurance and that, therefore, the lien must be paid back out of the Plaintiff’s settlement proceeds.

Anyone wishing to review a copy of this decision may click this LINK.


I send thanks to Attorney Gerard J. Geiger of the Stroudsburg, PA law firm of Neuman Williams, P.C. for bringing this case to my attention.

Source of image:  Photo by Fabian Blank on www.unsplash.com.

Non-Settling Defendants Precluded From Referencing Joint Tortfeasor Settlement with Another Med Mal Defendant

In the case of Snyder v. North American Partners in Anesthesia, No. 19-CV-83 (C.P. Lacka. Co. Nov. 12, 2021 Nealon, J.), the court granted a Plaintiff’s Motion In Limine in a medical malpractice case and precluded a non-settling Defendant and an Additional Defendant from referencing a joint tortfeasor settlement that the Plaintiff had entered into with a non-party.  The Court also precluded any reference to the Plaintiffs’ previous assertion of a malpractice claim against that former party.

The court noted that the former Defendant, who had secured a joint tortfeasor settlement had previously secured a Discontinuance relative to this action and a removal as a named Defendant.

In so ruling, the court referred to 42 Pa. C.S.A. §6141(c) which provides that, “[e]xcept in an action in which final settlement and release has been pleaded as a complete defense, any settlement or payment…shall not be admissible in evidence on the trial of any matter.” 

Judge Nealon noted that, based upon the plain language of this provision, evidence of any prior settlements is inadmissible at any trial on any matter.

The court additionally noted that Pennsylvania Rule of Evidence 408(a)(1) similarly prohibited the admissibility or use of any offer or acceptance of valuable consideration in compromising or attempting to compromise a claim. The court noted that, under the comment of that Rule of Evidence, it is indicated that “Pa.R.E. 408 is consistent with 42 Pa.C.S. §6141 in excluding any evidence of a joint tortfeasor settlement.”

On the basis of this law, the court granted the Plaintiff’s Motion In Limine.

The court additionally granted the Plaintiff’s Motion seeking to prohibit the non-settling Defendants from mentioning the fact that the Plaintiff’s originally asserted a malpractice claim against the settling Defendant. In this regard, the court made a distinction between factual allegations, which could be deemed to be judicial admissions, and allegations of legal conclusions, which could not be deemed to be judicial admissions.

As such, the court noted that certain factual allegations regarding specific documentation created by the relevant medical witnesses and parties may be offered as judicial admissions but any allegations by the Plaintiffs concerning the causal negligence by the settling Defendant or its agents would not be allowed to be introduced into evidence.

Anyone wishing to review a copy of this decision may click this LINK.

Is It An Arbitration Award or Not?

In the case of Martinez v. Nationwide Ins. Co., No. 18-2972 (E.D. Pa. Feb. 18, 2020 Perkin, U.S.M.J.), the court denied a carrier’s Motion for Summary Judgment in a UIM claim where there were issues of fact over whether the ADR proceedings resulted in a settlement recommendation or a binding arbitration award for less than the tortfeasor’s limits.

According to the Opinion, the Plaintiff proceeded in the third party auto accident matter to an alternative dispute resolution proceeding which resulted in an arbitrator entering a finding in favor of the Plaintiff for $22,500.00 after which the Plaintiff’s lawsuit was subsequently marked as settled, discontinued and ended.

Thereafter, the Plaintiff’s attorney responded to the carrier’s inquiries about the status of the arbitration of the third party matter. After receiving the arbitrator’s award, the Plaintiff’s counsel notified the carrier of the “settlement” via a Dailey-Sands letter with a request that the UIM carrier either approve the “settlement” or tender the amount of the “settlement” to preserve its subrogation rights.

The carrier filed a Motion for Summary Judgment in this matter asserting that the Plaintiff had received a binding arbitration award for less than the third party tortfeasor’s limits such that there was no valid UIM claim.

In this matter, the Federal Magistrate Judge found that there were issues to be resolved that prevented the entry of summary judgment.

The court agreed with the Plaintiff that the ADR proceedings merely resulted in a non-binding settlement recommendation from an arbitrator. The court noted that the arbitrator’s document used terms such as “recommendation” and “recommend” rather than language indicating that the arbitration award document was meant to be a binding arbitration award on the Plaintiff. 

The court additionally noted that, if the document was determined to be a settlement recommendation, then there would be no final judgment that would preclude the Plaintiff from litigating her damages under the doctrine of collateral estoppel.

Anyone wishing to review a copy of this decision may click this LINK.  The Order related to this Opinion can be found HERE.

Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (March 3, 2020).

Court Finds That Email Exchange Evidencing Basic Terms of Demand, Offer, Acceptance Supports Settlement of Claims

In the case of Hatchigan v. Kaplin Stewart, No. 3040 EDA 2018 (C.P. Phila. Co. Oct. 25, 2018 Anders, J.), the court found that the Defendants were entitled to enforce a settlement agreement of the parties reached by way of emails containing the essential terms of the Defendants’ settlement offer, the Plaintiff’s acceptance of the same, and the required consideration necessary to make a contract enforceable.

According to the Opinion, the Plaintiff also executed a Release that referred back to the email exchanges.  Issues arose in this matter between the parties thereafter and the defense filed a motion to enforce the settlement.

In this Rule 1925 Opinion issued by the trial court, that court recommended that the Superior Court affirm its decision enforcing the party’s settlement agreement.

Anyone wishing to review a copy of this decision may click this LINK.

Source: “Digest of Recent Opinions,” Pennsylvania Law Weekly (Dec. 4, 2018)

Standards Applicable to Motion to Seal Court Documents Pertaining to a Settlement

In the case of Hughes v. Wilkes-Barre Hospital, No. 16-CV-6463 (C.P. Lacka. Co. Aug. 9, 2018 Nealon, J.), Judge Terrence R. Nealon addressed the standards applicable to a defense motion to seal informatio pertaining to a settlement in a medical malpractice case.

In general, a defendant must establish that its interest in secrecy outweighs the well-settled presumption in favor of public access to the records of the taxpayer-supported judicial system.

After weighing various factors, the Court denied the Defendants' motion to seal the record of the settlement in this matter was denied with respect to the Plaintiffs' filed petition for court approval of a minor's settlement.

Anyone wishing to review this decision may click this LINK.

Petition to Enforce Settlement Granted in Monroe County Case

In his recent decision in the case of Wise v. Hyundai Motor Company, No. 3777 Civil 2011 (C.P. Monroe Co. Dec. 16, 2016 Williamson, J.), Judge David J. Williamson addressed a Motion to Enforce Settlement and, after reviewing the law of whether a valid contract of settlement had been reached between the parties, granted the same.  

Anyone wishing to review this decision may click this LINK.

 

Source: “Digest of Recent Decisions” Pennsylvania Law Weekly (May 30, 2017).  

Petition to Enforce Medical Malpractice Settlement Granted in Lackawanna County

In his recent decision in the medical malpractice case of Brink v. Mallik, No. 2013-CV-1314 (C.P. Lacka. Co. June 9, 2017 Nealon, J.), Judge Terrence R. Nealon reviewed the current status of the law of settlements in his assessment of a Petition to Enforce a settlement.  In the end, the court granted the Petition and found that an apparent unilateral mistake by one party as to the scope of the terms of the settlement did not support a denial of the Petition.

Anyone wishing to review this case may click this LINK.

Court Addresses Ability of One Plaintiff's Estate to Intervene in a Petition for Court Approval of Another Plaintiff's Estate's Settlement in a Consolidated Matter

In a recent Opinion issued in the case of Coleman v. Bachert, No. S-890-2011 (C.P. Schuylkill Co. April 11, 2017 Goodman, J.), Judge James P. Goodman addressed an emergency motion filed by one estate of a deceased Plaintiff to challenge the settlement secured by the estate of another deceased Plaintiff in a consolidated personal injury civil litigation matter. 

This matter arose out of a motorcycle accident during which one Plaintiff’s decedent was operating the motorcycle and the other, separate Plaintiff’s decedent was a passenger on the motorcycle.   

Judge James P. Goodman
Schuylkill County

After the estate for the decedent passenger secured a settlement from the liability carrier under a single limit liability policy, the estate for the decedent driver requested permission of court to participate in the court approval proceedings relative to the wrongful death settlement in favor of the passenger decedent, asserting that the settlement of that claim could negatively affect the minor Plaintiffs associated with the estate for the decedent driver. 

The estate for the decedent passenger challenged the standing of the estate for the decedent driver to participate in the court’s proceedings for the approval of the settlement in favor of the decedent passenger.  

In part, the estate for the decedent driver asserted that the substantial proposed settlement in favor of the decedent passenger was unfair to the minors represented by the estate for the decedent driver in that it depleted the single liability limits available under the carrier’s policy.   The estate for the decedent driver requested the court to conduct an adjudication on the merits based upon an evidentiary record to review the appropriateness of the proposed settlement in favor of the decedent passenger and to consider the interests of the estate of decedent driver.  The estate of the decedent driver also requested permission for it to fully participate in the court approval of settlement proceedings relative to the settlement in favor of the plaintiff passenger.

In the alternative, the estate of the decedent driver contended that it had standing as a third party beneficiary to the liability carrier’s policy allegedly entitling that estate to participate in the hearing to approve the proposed settlement in favor of the other decedent’s estate.  

In his Opinion, Judge Goodman of the Schuylkill County Court of Common Pleas denied the emergency petition filed by the estate of the decedent driver.   In so ruling, the court found that the estate of the decedent driver was unable to provide the court with any legal interest or authority that the estate of the decedent driver had in the settlement between the settling Defendants (and that Defendant’s carrier), and the estate of the Plaintiff-passenger.  

The court noted that no case law or any other authority had been produced “that would prevent an insurance company from settling a case with one Plaintiff to the detriment of another Plaintiff or that would require the settlement to protect insurance funds for the non-settling Plaintiff.”  

Judge Goodman went on to state that “the case law supports that the insurance company is entitled to determine how to settle cases for policy limits, albeit, it must exercise good faith to its insured.” 

The court noted that the purpose of Rule 2206 is to ensure a fair settlement to a settling party.  Here, the estate of the decedent driver was not the settling party and was also noted to have interests that were adverse to the estate of the decedent passenger.   Accordingly, the court found that the estate of the decedent driver lacked standing under the rule to participate in the settlement approval proceedings between the settling Defendants and the estate of the Plaintiff passenger. 

The court also rejected the third party beneficiary argument presented by the estate of the decedent driver.   The court noted that there was no language in the insurance policy covering the Defendant that identified any injured party at a third party beneficiary to that contract.   As such, the court found that there was no support for the assertion that the estate of the decedent driver was a third party beneficiary of the liability policy.  

Judge Goodman otherwise also noted that “it is well-settled that under Pennsylvania law, an injured party has no right to directly sue the insurer of an alleged tortfeasor unless a provision of the policy or a statute creates such a right.”   [citations omitted].  

Anyone wishing to review a copy of this Opinion may click this LINK.

Enforceability of Written Waiver of Right to Seek Pa.R.C.P. 229.1 Damages Addressed

In the recent case of Markiewicz v. CVS Care Mart, Corp., No. 2014-CV-4043 (C.P. Lacka. Co. March 10, 2017 Nealon, J.), Judge Terrance R. Nealon of the Lackawanna County Court of Common Pleas addressed a Plaintiff’s Motion for Sanctions under Pa. R.C.P. 229.1 relative to a Defendant’s alleged failure to pay settlement funds within the twenty (20) day period required by that Rule.  

According to the Opinion, after the Defendant in this personal injury action failed to pay the settlement funds to the Plaintiff within twenty (20) days of the Defendant’s receipt of the executed Release, the Plaintiff filed a motion under Pa. R.C.P. 229.1 seeking to recover interest and counsel fees from the Defendant.  

The defense asserted that the Plaintiff had agreed in writing to waive the right to seek such additional damages or interest under Rule 229.1.   

However, the Plaintiff asserted that the Defendant subsequently breached the terms of the parties’ settlement agreement by deducting the full amount of the Medicare lien from the Plaintiff’s gross settlement and forwarding those funds directly to the Center for Medicare and Medicaid Services, thereby depriving the Plaintiff of her ability to negotiate the Medicare lien down.  

Judge Nealon confirmed that the Plaintiff expressly waived any claim for additional damages or interests under Pa. R.C.P. 229.1 in the settlement agreement that the Plaintiff executed.   Accordingly, the court ruled that, based upon that clear and unambiguous language, the Plaintiff was unable to recover any such damages available under that rule.  

However, Judge Nealon went on to rule that, if the Defendant’s alleged actions violated the terms of the settlement agreement relative to the Medicare lien, the Plaintiff’s proper remedy was to file a Petition to Enforce the Settlement Agreement to recover any consequential damages for the Defendant’s alleged breach of that agreement. 

Accordingly, the Plaintiff’s Motion for Sanctions under Pa. R.C.P. 229.1 was denied without prejudice to the Plaintiff’s right to file a Petition to Enforce the Settlement Agreement.  

Anyone wishing to review Judge Nealon's decision in this case may click this LINK.

Judge Mariani Remands Issue Regarding Carrier's Demand for Final Medicare Lien Letter Before Payment of Settlement Funds

In a decision handed down in the Federal Middle District Court of Pennsylvania case of Mikiewicz v. Hamorski and Erie Insurance Exchange, No. 3:15-CV-02426 (M.D.Pa. May 3, 2016 Mariani, J.), Judge Robert D. Mariani granted a Plaintiff's Motion for Remand in a case involving a carrier's demand that the Plaintiff secure and produce a final lien letter from Medicare prior to any need by the carrier to issue a settlement payment following a motor vehicle accident.

This matter was originally filed by the Plaintiff in the Lackawanna County Court of Common Pleas as a Petition assterting that the carrier's requirement that the Plaintiff satisfy certain conditions as part of the settlement, i.e. produce a final lien letter from Medicare, violated Pa.R.C.P. 229.1 which requires that settlement proceeds be paid within twenty days of the execution of a Release.

The Plaintiff followed that Petition with a Motion to Enforce the Settlement in the state court.  The same day that Motion was argued, the carrier filed an Answer to the Motion and also filed paperwork to remove the case to federal court.

The carrier asserted that removal was proper given that Plaintiff's claim involved a federal statute, the Medicare Secondary Payer Act ("MSPA"), thereby giving rise to federal question jurisdiction.  The carrier also asserted that removal was appropriate because the MSPA is an extraordinary statute that completely pre-empted state law.

The Plaintiff responded by filing the federal court Motion to Remand at issue.  As noted, the court granted the Plaintiff's Motion.

Judge Robert D. Mariani
M.D. Pa.
 

In so ruling, Judge Mariani found that the Plaintiff's claims did not arise under Federal law as asserted by the carrier.  Rather, the court found, the carrier raised federal law as a defense to the Plaintiff's claims.  The court noted that a defendant can not transform a matter into a federal question case by injecting a federal law defense into the matter for purposes of the removal issue.

Judge Mariani also rejected the carrier's contention that the MSPA completely preempted State law.  The court reviewed the "complete pre-emption doctrine" and found that the elements of that doctrine had not been met under circumstances presented in this matter.  Judge Mariani cited to several Third Circuit decisions holding that a state law cause of action that references or involves the MSPA or the Medicare statute is not removable to federal court because it does not raise a federal question.

Accordingly, the court granted the Plaintiff's Motion for Remand and sent the case back to state court.  In so ruling, the court also granted attorney's fees, costs and expenses after finding that the carrier lacked an objectively reasonable basis for the removal.  The court noted that not only had the carrier failed to cite case law in support of the removal, the court also pointed out that the carrier had been repeatedly sanctioned in the past for making similar unsuccessful arguments regarding the MSPA.

Anyone wishing to review Judge Mariani's opinion in Mikiewicz may click this LINK.

I send thanks to the prevailing Plaintiff's attorney Paul Oven of the Moosic, PA office of Dougherty, Leventhal & Price for bringing this case to my attention.