Judge lifts veil of secrecy on malpractice settlement
Court rules that public is paying damages, so it has a right to know.
By John M.R. Bull
Of The Morning Call
September 30, 2004
HARRISBURG | Doctors can't keep malpractice lawsuit settlements a secret
anymore because the public is footing the bill, a Lackawanna County judge has
ruled in a groundbreaking legal opinion.
''This is huge,'' said Dan Fee, spokesman for Pennsylvania Citizens for
Fairness, a consumer group that sides with lawyers against doctors on
malpractice issues. ''The judge has correctly said it's time to rip the veil of
secrecy off this issue.''
Common Pleas Judge Terrance R. Nealon last week refused to seal the settlement
in the case of an obstetrician-gynecologist sued for misdiagnosis in the case of
a Lackawanna County woman who subsequently died.
While the single-county case doesn't set a statewide precedent, the ruling could
set the stage for further court decisions to prohibit sealed settlements in
malpractice cases paid from a $230 million fund established by the Legislature
last year to benefit doctors complaining of high insurance rates.
According to Nealon's ruling, Lucille M. Korczakowski died of an ovarian cyst in
1999 that went undetected for at least three years. She was 47. Her husband,
James, sued her doctor, Jung Jang Hwan of Clarks Green, 15 miles north of
Scranton.
Three weeks ago, the doctor's insurance company — the Pennsylvania Medical
Society Liability Insurance Co. — offered to settle the case for $725,000
after court-ordered mediation.
As a condition of settlement, the insurance company insisted on a
confidentiality clause that prohibited anyone involved in the case from
discussing it publicly.
Except in rare cases doctors or their insurers' insist such cases be sealed from
the public.
When that was agreed to earlier this month, the judge then was asked to seal the
terms of the settlement, as has been customary in medical malpractice cases for
the last 20 years.
Hwan's privacy needs to be protected, the insurance company's lawyer contended.
The judge refused, in an order obtained Wednesday by The Morning Call.
Judge Nealon ruled that the settlement of this, and possibly any, medical
malpractice case in Pennsylvania is a matter of public interest because the
medical community has made a big issue over the past few years out of rising
malpractice insurance premiums.
In fact, the medical community claimed doctors have been fleeing the state in
large numbers because of rising premiums and frivolous malpractice lawsuits, and
demanded the state Legislature enact court reforms and appropriate money for
doctors.
Lawmakers in December increased the state tax on cigarettes and allocated that
$180 million a year to a state fund to help doctors pay insurance claims not
covered by their primary insurance carrier. An additional $40 million a year in
surcharges on moving vehicle violations also goes for that purpose.
Because 70 percent of the settlement in the death of Lucille Korczakowski is
being paid from that state fund — more than $500,000 of taxpayer money — the
terms of payment can't be allowed to remain secret, the judge ruled.
''Since the … funds which will be used to pay the majority of the plaintiff's
settlement with Dr. Hwan are derived from public taxes or surcharges, any
documents relating to disbursement of those settlement proceeds are clearly
public records under the Right to Know Act,'' according to the court ruling.
The state agency that administers that fund, the MCare fund, declined to
comment. Nor would it reveal whether Dr. Hwan has lost or settled other
malpractice lawsuits, something that is not a matter of public record in
Pennsylvania.
A spokesman for the Pennsylvania Medical Society, a lobbying group for state
doctors, said he didn't know if Judge Nealon's ruling would be appealed, and had
no further comment.
The husband of the woman who died also wouldn't comment because he had signed a
confidentiality agreement.
Because of that agreement, his attorney wouldn't say how old Lucille
Korczakowski was when she died, or reveal what was alleged to have caused her
death — details revealed in the judge's order.
''We have a confidentiality agreement that prevents me from discussing the case
or disclosing anything about the case to the media,'' said attorney Ezra
Wohlgelernter of Philadelphia.
Dr. Hwan's attorney did not return a phone call seeking comment.
If the judge had allowed the settlement to be sealed, no one would know that a
half-million dollars of public money is being spent on a doctor's mistake, said
Fee.
Court-sealed settlement of malpractice cases became commonplace over the past 20
years because doctors didn't want their mistakes publicized and because people
injured — or their survivors — preferred a settlement to a public fight,
said Clifford Rieders, former head of the Pennsylvania Trial Lawyers
Association.
''People couldn't get valid claims resolved without agreeing to the extortion of
silence,'' he said. ''You can't talk about the case. You can't e-mail about it.
Doctors just don't want their dirty laundry aired in public.''
Judge Nealon's ruling is unlikely to be appealed because that could pave the way
for a statewide precedent if a higher court agrees with it, Rieders said.
''It's what we lawyers call persuasive authority. It's well researched and
likely will be used by other judges in the future,'' he said. ''He basically
said: 'You doctors wanted public money … the public's right to know comes with
that.' I would say it is groundbreaking by that standard.''
