Beasley Estate Can't Collect Malpractice Deductible of $75K
In 2010, NUF paid an undisclosed amount to settle the suit on behalf of all four attorneys. In 2012, NUF and PPCIGA settled their dispute over which insurer was obligated to indemnify the four attorneys and NUF was dismissed from the case by stipulation, according to Bender.
The attorneys then filed a counterclaim against PPCIGA seeking reimbursement of the $75,000, but Bucks County Court of Common Pleas Judge Robert J. Mellon found that PPCIGA had no obligation to reimburse them because the settlement payment NUF made did not exhaust the NUF policy, Bender said.
Bender said the act also prohibits claimants from making duplicative recoveries from the PPCIGA for claims that were paid by a solvent insurer.
On appeal, the Beasley estate argued that because the attorneys paid a higher deductible under the NUF policy than they would have paid under the Home policy, its demand for reimbursement of the difference between the two deductibles was not duplicative, according to Bender.
The estate further argued that its demand for reimbursement of the deductible payment was not duplicative because it constituted a separate claim from the one NUF paid—one that could not have been covered by insurance, Bender said.
But Bender said the only insurance claim was the one NUF paid and, therefore, PPCIGA had no obligation to reimburse the estate.
"Because that claim has been paid and because it is the only insurance claim at issue, no unpaid claim remains," Bender said. "In the absence of an unpaid claim, there is no 'covered claim.'"
The estate also argued that because it cannot recover any more money from NUF, the policy is exhausted and PPCIGA is required to provide coverage, according to Bender.
But Bender said the estate's interpretation of the term "'exhausted'" was "in conflict with the statute itself, which defines 'exhaust' as the obtaining of the maximum limit under the policy."
"The trial court found that the policy limit was not reached," Bender said. "Resultantly, the policy was not exhausted."