The Herald, Sharon, Pa.

Local News

April 16, 2014

15-year-old legal battle returning to county court

HERMITAGE — State Supreme Court has let stand a Superior Court decision sending a landmark medical malpractice case back to Mercer County Common Pleas Court.

The Supreme Court on Tuesday denied an appeal by Sharon Regional Health System, which had hoped for affirmation of a local judge’s opinion that Sharon Regional had paid all that was due to resolve the case of Mary Anne and Joseph Louis Viola.

On May 21, 1999, the Violas sued Mrs. Viola’s gynecologist, Dr. John P. Gallagher; his employer, Shenango Valley OB/Gyn Association; her radiologist, Dr. John C. Garriott; Garriott’s employer, Radiology Associates PC; and Sharon Regional Health System.

The Violas alleged Gallagher and Garriott failed to diagnose Mrs. Viola’s breast cancer.

A jury on April 20, 2001, awarded Mrs. Viola $12,344,000 for malpractice and her husband $500,000 for loss of consortium.

The judgment is the largest ever awarded in Mercer County, said Court Administrator Peter Morrin, noting the second largest award was about $1.5 million.

The Violas also were awarded delay damages making a total award of $13,935,730.

Mrs. Viola retired as a second-grade teacher with Hermitage schools in 2002, and died the next year at age 49.

The defendants had malpractice insurance and Sharon Regional’s excess insurance carrier, National Union Fire Insurance Co. of Pittsburgh, denied coverage, claiming Sharon Regional did not give timely notice of the Violas’ claims.

This led to a separate legal battle in Allegheny County Common Pleas Court. While the beginning stages of this suit were playing out, Sharon Regional and the Violas tried to settle their case, but failed. The Violas attempted to execute the court judgment by having the sheriff attach and garnish all of Sharon Regional’s bank accounts.

The sides eventually reached an agreement – called an agreement regarding judgment – calling for Sharon Regional to pay the Violas $5 million. The agreement also addressed the disposition of any funds Sharon Regional won in its battle with National Union.

Sharon Regional was awarded nearly $14 million as a result of the suit. After getting the money, Sharon Regional proposed giving the Violas more than $1.1 million to satisfy what was owed them. The Violas demanded more than $5.2 million. Both sides tendered amounts they said they were entitled to under the ARJ.

Sharon Regional asked the court to order that the Violas accept $1.1 million as full payment and prohibit the Violas from executing judgment by having the sheriff attach and garnish Sharon Regional’s bank accounts.

Judge Thomas R. Dobson on Dec. 5, 2011, prohibited the Violas from executing judgment until Sharon Regional’s claims were resolved, ordered Sharon Regional to pay the $1.1 million it acknowledged owning, and directed Sharon Regional to post money into an escrow account through the court, an amount later agreed upon to be the balance between what the Violas said they were owed and what Sharon Regional claimed it owed.

Further discussions resulted in the Violas receiving more than $1.8 million, leaving in dispute $1.8 million Sharon Regional received from Nichols & Associates Inc., Sharon Regional’s risk loss coordinator, as part of the National Union suit.

With interest on the $1.8 million, the amount to be resolved was $2,208,092.

Judge John C. Reed determined that, under the terms of the ARJ, the Violas had been paid everything they were entitled to receive.

A three-judge panel of Superior Court said in August that Reed’s decision “overreaches in its conclusion that the ARJ is not ambiguous.” The ARJ is “inconsistent” as to what “recovery” is, the court said, and as to what steps should be taken to “make whole” Sharon Regional.

Reed heard testimony as to the parties’ intentions in signing the ARJ but did not use it to make a decision because he thought the ARJ was evidence enough. Superior Court ordered Reed to reexamine the case using the evidence of the parties’ intentions, and to seek additional evidence, if he believes it is warranted.

Since Reed has retired, it was not immediately clear if Reed would take up the case in his role as a senior judge or whether a new judge would be assigned.

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