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COURT OF APPEALS DECISION DATED AND RELEASED September 28, 1995 |
NOTICE |
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A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See § 808.10 and
Rule 809.62, Stats. |
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports. |
No. 95-0968
STATE
OF WISCONSIN IN COURT OF
APPEALS
DISTRICT IV
WILLIAM J. FABER,
D.O.,
Petitioner-Respondent,
v.
JOSEPHINE W. MUSSER,
COMMISSIONER OF
INSURANCE
AND BOARD OF
GOVERNORS,
WISCONSIN HEALTH CARE
LIABILITY INSURANCE
PLAN,
Respondents-Appellants.
APPEAL from an order of
the circuit court for Dane County: PAUL
B. HIGGINBOTHAM, Judge. Reversed and
cause remanded with instructions.
Before Eich, C.J.,
Gartzke, P.J., and Sundby, J.
PER CURIAM. The Board of Governors of the Wisconsin
Health Care Liability Insurance Plan and Board Chair Josephine W. Musser
(collectively, WHCLIP) appeal from an order by which the circuit court
effectively reversed and remanded this ch. 227 appeal to WHCLIP. Under that order, WHCLIP has been instructed
to reverse its administrative-level decision and process the application of
respondent William J. Faber, D.O., for retroactive health care liability
coverage and for "gap" insurance. Because we hold that WHCLIP is not
obligated to provide insurance coverage of the type here at issue, we reverse.
ISSUE
This
case involves the interaction of three statutory back-up insurance[1]
schemes. The first, WHCLIP, exists to
"provide health care liability insurance and liability coverage normally
incident to health care liability for risks in this state which are equitably
entitled to but otherwise unable to obtain such coverage." Wis.
Adm. Code § Ins 17.25; see
§ 619.04, Stats.
The second, Wisconsin
Insurance Security Fund (WISF), exists to "maintain public confidence in
the promises of insurers by providing a mechanism for protecting insureds from
excessive delay and loss in the event of liquidation of insurers and by
assessing the cost of such protection among insurers ...." Section 646.01(2)(a), Stats.
WISF, however, provides coverage only to a maximum of $300,000. Section 646.31(4), Stats.
The third, Patients
Compensation Fund (PCF), provides coverage for health care malpractice awards
that exceed $400,000. Section
655.27(1), Stats.
Thus, the statutory
scheme may be summarized as follows: WHCLIP provides an insurance plan of last
resort for those health care providers entitled to but unable to obtain
liability coverage; WISF exists to fill the breach left when a liability
insurer goes into liquidation by providing coverage up to $300,000; and PCF
provides coverage when a medical malpractice award exceeds $400,000. As is apparent, when WISF and PCF are
harnessed in tandem, they do not provide full coverage but leave a $100,000
"gap."
The issue in this appeal
is which scheme, WHCLIP or WISF/PCF, is correctly invoked where an insurer has
gone into liquidation leaving a health care practitioner without liability
coverage and facing malpractice claims which may result in judgments of over $300,000.
FACTS
For
the period between January 1988 and December 1992, Faber, an osteopath and
surgeon, obtained health care provider's liability insurance from Professional
Medical Insurance Company of Kansas City, Missouri (Pro-Med). In October 1988, Pro-Med informed Faber that
his policy would not be renewed.
However, Pro-Med offered Faber extended noncancelable reporting coverage
insurance (tail insurance), which Faber purchased.
In April 1994, as part
of Pro-Med's subsequent bankruptcy, its deputy receiver informed Faber that his
tail insurance policy was canceled. At
that time, several outstanding claims were pending against Faber. Under § 646.31, Stats., defense of these cases was assumed by the Wisconsin
Insurance Security Fund, to a statutory maximum of $300,000 per claim. As noted above, under § 655.27(1), Stats., claims over $400,000 are
covered by the Patients Compensation Fund.
As a result of Pro-Med's
bankruptcy, Faber requested WHCLIP to:
(1) replace the canceled tail coverage policy; and (2) cover the
$100,000 "gap." Faber
reasoned that his canceled Pro-Med policy would have provided both tail
coverage and "gap coverage," and that because Pro-Med had gone into
liquidation, he was "unable to obtain" either type of insurance. He argued that the statutory insurance
scheme embodied in WHCLIP was properly invoked because he would be "unable
to obtain" retroactive tail insurance, and because the $100,000 gap left
by the WISF/PCF scheme was otherwise uninsurable.
The circuit court agreed
with Faber, and WHCLIP appeals. We
reverse.
ANALYSIS
Faber's
argument is facially attractive: WHCLIP
exists to provide coverage where an eligible health care provider is otherwise
"unable to obtain" coverage, and Faber is an eligible health care
provider who is "unable to obtain coverage" because of Pro-Med's
liquidation. As a result, according to
Faber, WHCLIP should provide insurance.
We reject the argument because it does violence to the overall statutory
back-up insurance scheme under which WISF was created to provide coverage in
situations where, as here, health care providers' liability insurers undergo
liquidation.
It is a longstanding
Wisconsin rule that where several different statutes might apply, they must be
construed in a manner that will harmonize them, if possible. City of Elroy v. LIRC, 152
Wis.2d 320, 327, 448 N.W.2d 438, 441 (Ct. App. 1989). Were WHCLIP the only scheme embodying state-affiliated back-up
insurance for health care providers, we might agree with Faber's and the
circuit court's analysis. However, WISF
exists specifically for the situation here presented, insurer liquidation, and
PCF works in tandem with WISF where the now-uninsured health care provider
faces possible exposure on pending claims that exceed WISF's statutory $300,000
maximum.
We agree with Faber and
the circuit court that WHCLIP provides much more complete coverage than
WISF/PCF. Specifically, we acknowledge
the $100,000 "gap" between WISF and PCF. However, defects in the WISF/PCF scheme are irrelevant to the
question of which scheme applies. The
gap was created by the legislature, and it is for that body to remove it should
it see fit to do so.
By the Court.—Order
reversed and remanded for further proceedings consistent with this opinion.
This opinion will not be
published. See Rule 809.23(1)(b)5, Stats.