Patients Compensation Fund v. Lutheran Hospital-LaCrosse, Inc.

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SUPREME COURT OF WISCONSIN Case No.: 96-1344 Complete Title of Case: Patients Compensation Fund, Plaintiff-Respondent-Petitioner, v. Lutheran Hospital-LaCrosse, Inc., Wisconsin Hospital Association Optional Segregated Account, Nancy Bowell, R.N., ABC Insurance Company, Carol Cowell, R.N., American Family Mutual Insurance Company, Darlene Denstad, L.P.N., DEF Insurance Company, Trudy Pierick, R.N., GHI Insurance Company, Sharon Wiebke, R.N. and JKL Insurance Company, Defendants-Appellants. ON REVIEW OF A DECISION OF THE COURT OF APPEALS Reported at: 216 Wis. 2d 49, 573 N.W.2d 572 (Ct. App. 1997-Published) Opinion Filed: Submitted on Briefs: Oral Argument: Source of APPEAL COURT: COUNTY: JUDGE: January 26, 1999 November 10, 1998 Circuit LaCrosse Dennis G. Montabon JUSTICES: Concurred: Dissented: Not Participating: ATTORNEYS: For the plaintiff-respondent-petitioner there were briefs by Paul J. Kelly and Schellinger & Doyle, S.C., Brookfield and oral argument by Paul J. Kelly. For the defendants-appellants there was a brief by W.A. Kirkpatrick and Hale, Skemp, Hanson, Skemp & Sleik, LaCrosse and oral argument by W.A. Kirkpatrick. No. 96-1344 NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. No. 96-1344 STATE OF WISCONSIN : IN SUPREME COURT FILED Patients Compensation Fund, JAN 26, 1999 Plaintiff-Respondent-Petitioner, v. Marilyn L. Graves Clerk of Supreme Court Madison, WI Lutheran Hospital-LaCrosse, Inc., Wisconsin Hospital Association Optional Segregated Account, Nancy Bowell, R.N., ABC Insurance Company, Carol Cowell, R.N., American Family Mutual Insurance Company, Darlene Denstad, L.P.N., DEF Insurance Company, Trudy Pierick, R.N., GHI Insurance Company, Sharon Wiebke, R.N. and JKL Insurance Company, Defendants-Appellants. REVIEW of a decision of the Court of Appeals. ¶1 N. PATRICK CROOKS, J. The Affirmed. Wisconsin Patients Compensation Fund ("the Fund") appeals a published decision of the court of appeals1 reversing an order of the La Crosse County Circuit Court. The circuit court, Judge Dennis G. Montabon presiding, held that the Fund could seek contribution for its payment in settlement of a malpractice claim from the professional liability insurer of a registered nurse, as long as it established appeals that reversed, the holding nurse was that 1 the negligent. Fund could The not court of sue the Patients Compensation Fund v. Lutheran Hosp., 216 Wis. 2d 49, 573 N.W.2d 572 (Ct. App. 1997). 1 No. registered nurse because the Fund's subrogation 96-1344 rights are restricted to claims against Wis. Stat. ch. 6552 health care providers and/or their insurers. ¶2 The issue presented is whether the Fund has subrogation rights which would allow it to bring a claim for contribution against an allegedly negligent employee of a health care provider and/or the employee's insurer, following the Fund's settlement of a malpractice claim against the health care provider. We conclude that the Fund does not have such subrogation rights which would permit it to pursue a claim for contribution against one whose alleged negligence arose while he or she was conducting a health care provider's business, when that person is not a Wis. Stat. ch. 655 health care provider or a health care provider's insurer.3 Accordingly, we affirm the decision of the court of appeals. I. 2 See Wis. Stat. ch. 655 (1995-96). Unless otherwise noted, all future references to the Wisconsin Statutes will be to the 1995-96 version. 3 Each health care provider is required by Wis. Stat. ch. 655 to have a minimum amount of primary insurance coverage. See Wis. Stat. § 655.23(4). A health care provider is liable for medical malpractice up to the minimum amount of coverage or the amount for which the provider is actually insured, whichever is greater. § 655.23(5). Consequently, the liability of a health care provider conducting the business of another health care provider, such as a doctor employed by a hospital, would be limited to the amount of his or her own coverage amount plus the coverage amount of the health care provider whose business he or she is conducting. See, e.g., Erickson v. Gundersen, 183 Wis. 2d 106, 113 & n.2, 515 N.W.2d 293 (Ct. App. 1994). 2 No. ¶3 The facts of this case are not in dispute. 96-1344 The Fund's action for contribution originated as a result of a settlement in a medical malpractice case, Stach v. Lawnicki, No. 92-CV-418 (La Crosse Zachary County Cir. Ct. Stach was admitted to May 29, Lutheran Hospital - medications for Zachary: Dr. Lawnicki a Crosse Clyde C. Lawnicki, M.D., performed the surgery on Afterward, of La stenosis. 1991. correction Plaintiff Hospital") 17, surgical 1992). ("Lutheran September for filed ureteral prescribed two Belladonna suppositories for bladder spasms and morphine sulphate for pain. ¶4 At 6:40 a.m. cardiopulmonary arrest. resuscitate Zachary, damage a as ¶5 the next day, Zachary went into Although medical personnel were able to he suffered consequence of considerable the neurological cardiopulmonary arrest. In May 1992, Zachary and his parents, James and Angel Stach, filed their complaint in the Stach medical malpractice action. The Gundersen Clinic, Hospital Staches Ltd. Association Hospital's named insurer, Dr. (Dr. Lawnicki, Optional Hospital, employer), Lawnicki's Lutheran Wisconsin Segregated hereinafter "WHA"), Account and the (Lutheran Patients Compensation Fund as defendants in the suit. ¶6 The Staches alleged that Zachary's cardiopulmonary arrest was caused by an excessive amount of morphine within his system. resulted According from the to the Staches, combination of the this morphine morphine surplus sulfate Belladonna suppositories, which also contained morphine. 3 and The No. 96-1344 Staches asserted that Dr. Lawnicki negligently prescribed the medications and that Lutheran Hospital's pharmacy and the nurses who administered the medications negligently failed to notice the error in regard to the prescribed medications. The Staches further alleged that Lutheran Hospital's nurses failed to assess properly Zachary's condition. ¶7 February The 8, parties 1994, in the settlement of the case. Stach Fund entered agreed to into pay mediation. On $10 in million Lutheran Hospital contributed $200,000 of its $400,000 liability insurance policy limits toward the settlement.4 ¶8 The Fund filed the present action on January 26, 1995, seeking contribution for the settlement in Stach from Lutheran Hospital, WHA, the nurses at Lutheran Zachary, and the nurses' insurers. Hospital that treated The Fund sought $200,000 from Lutheran Hospital, representing the remaining portion of the hospital's liability insurance policy limits of $400,000. In addition, the Fund claimed that it was entitled to recover up 4 Under the settlement agreement, $6,267,000 of the $10,000,000 was to be placed in a trust fund for Zachary's future medical expenses. Upon Zachary's death, the balance of the trust fund, if any, is to revert to the Fund. The defendants in this case argue that the Fund's contribution claim is not ripe for review. The defendants reason that because the rate of return on the trust, Zachary's life span, and Zachary's future medical expenses are all unknown, the Fund may receive much of its $10 million settlement payment back upon Zachary's death and may therefore not be entitled to contribution. The Fund countered by arguing that it had already paid the $10 million settlement. As the court of appeals did not address the issue of ripeness and it does not in any way affect our decision, we do not address the issue any further. 4 No. 96-1344 to the limits of the nurses professional liability insurance policies. ¶9 Carol Cowell, R.N. ("Nurse Cowell") was the only nurse named as a defendant who had professional liability coverage. Nurse Cowell's professional liability insurance was contained in a rider to ("American her Family") American Family homeowner's Mutual insurance Insurance policy.5 Company The Fund asserted that it was entitled to contribution from Nurse Cowell of $300,000, the limit of her professional liability coverage. ¶10 The Fund moved for a declaratory judgment pursuant to Wis. Stat. § 806.04(1). The Fund asked the court to declare that and Lutheran Hospital Nurse Cowell had $500,000 of liability insurance available to satisfy its contribution claim. The Fund arrived at the amount of $500,000 by adding $200,000 (Lutheran Hospital's $400,000 insurance policy limits less the $200,000 the hospital voluntarily paid in the settlement) to 5 The rider to Nurse Cowell's American Family homeowner's policy states in relevant part: Personal Liability is extended to provide Professional Liability Coverage. We will pay up to our limit, all sums for which any insured is legally liable for compensatory damages for an occurrence during the policy period, arising out of: 1. rendering or failing to render professional services personally administered by the individual insured in the practice of the covered profession, . . . . Kelly Aff., Exh. F, p. 2 (emphasis in original omitted). 5 No. 96-1344 $300,000 (the limits of Nurse Cowell's professional liability insurance policy).6 ¶11 In an order issued February 28, 1996, the circuit court ruled that Lutheran Hospital was liable for the additional $200,000, which Lutheran Hospital apparently conceded. Nurse Cowell, however, the court stated, As to "Nurse Cowell's American Family liability policy is not subject to the Fund's contribution claim." 1996 at 9. Memorandum Decision and Order, Feb. 28, The court reasoned that the issue of Nurse Cowell's negligence was not ripe for judicial determination because the case had been settled in the mediation stage. Finding that the Fund was bound by Wis. Stat. ch. 655 and that Nurse Cowell was not a ch. 655 "health care provider," the court ruled that Nurse Cowell was covered under her employer's liability insurance policy pursuant to Wis. Stat. § 655.005(2). ¶12 The Fund filed a motion with the circuit court, asking for reconsideration of the portion of the February 28, 1996, order which involved Nurse Cowell's insurance policy. The Fund contended that the only reason it had filed the motion for a declaratory judgment was to obtain a determination of the amount of insurance According to available the Fund, to it satisfy had 6 not its contribution intended to claim. request a The Fund did not pursue its claims against the other nurses named in the original complaint in this action. We assume that the reason is that none of the other nurses possessed professional liability insurance. 6 No. 96-1344 determination of the amount of insurance coverage actually owed by the defendants. ¶13 April The circuit court responded by issuing a new order on 29, 1996. In its new order, the court replaced its previous order as to Nurse Cowell with the statement, "Nurse Cowell's American Family liability policy is subject to the Fund's contribution claim, if it is demonstrated in this action that Nurse Cowell was negligent." Order, Apr. 29, 1996 at 2. In the order, the court stated that it had intended to rule this way "based upon the previous submissions of the parties." Order, Apr. 29, 1996 at 2. ¶14 The court of appeals granted the defendants leave to appeal and reversed the circuit court's April 29, 1996, order. The court of appeals began by holding that any authority of the Fund to sue must arise from Wis. Stat. ch. 655. Patients Compensation Fund v. Lutheran Hosp., 216 Wis. 2d 49, 54-55, 573 N.W.2d 572 (Ct. App. 1997). The court held that since Nurse Cowell was not a health care provider as defined by ch. 655, ch. 655 insurer. precluded the Fund Id. at 57-59. from suing Nurse Cowell or her Instead, the court ruled that the Fund's subrogation claims against Lutheran Hospital and Nurse Cowell are limited by ch. 655 to a total amount of $400,000. Id. at 51, 58-59. The court concluded that "the Fund's subrogation rights are limited to claims against one who is a health care provider or a health care provider's insurer, as those terms are defined for purposes of ch. 655, after the Fund 7 No. has become obligated responsible." to pay an amount for which 96-1344 another is Id. at 60. II. ¶15 court This court granted the Fund s petition to review the of appeals. appeals decision, and we now affirm the court of We begin by examining the nature of the Fund s claim. The Fund seeks a determination from this court that it may pursue a claim for contribution against Nurse Cowell and/or her insurer following the Fund s payment in settlement of a case in which the plaintiffs alleged that Nurse Cowell and her employer, Lutheran Hospital, were negligent. As we shall explain, the Fund's ability to pursue its contribution claim depends upon whether the Fund possesses subrogation rights in this scenario. ¶16 A contribution claim lies when joint tortfeasors, due to their concurring negligence, share a common liability to a third party, but one of the tortfeasors has shouldered more than his or her fair share of the common burden. See General Accident Ins. Co. v. Schoendorf & Sorgi, 202 Wis. 2d 98, 103, 549 N.W.2d 429 (1996). The joint tortfeasor who has borne a disproportionate amount of the common liability may then bring an action for contribution against the other joint tortfeasors to force them to contribute their fair shares of the loss. See id.; see also Swanigan v. State Farm Ins. Co., 99 Wis. 2d 179, 196, 299 N.W.2d 234, 242 (1980). ¶17 The Fund s contribution action stems from the Stach malpractice action. The injured third parties in the present 8 No. situation are the resulted from the including Dr. Staches. The Staches injuries of several joint Hospital, and negligence Lawnicki, Lutheran 96-1344 allegedly tortfeasors, Nurse Cowell. The Fund s role here is not that of a joint tortfeasor, since there have been no allegations of negligence on the Fund s part. Rather, the Fund was joined in the Stach case as the insurer of excess liability for some of the alleged joint tortfeasors. Wis. Stat. § 655.27(1). See In this action for contribution, the Fund essentially alleges that it paid more than its fair share of the Stach settlement on behalf of the tortfeasors whom it insures because Nurse Cowell, who was also one of the joint tortfeasors, did not pay her Because the Fund is proportionate share of the settlement. ¶18 not itself an alleged joint tortfeasor, the Fund may not bring its contribution claim unless it is subrogated to the rights of one of the alleged joint tortfeasors whom it insures. Subrogation rights arise by operation of law when a person other than a mere volunteer pays a debt which in equity and good conscience should be satisfied by another. Wisconsin Patients Compensation Fund v. Wisconsin Health Care Liab. Ins. Plan, 200 Wis. 2d 599, 620, 547 N.W.2d 578 (1996) (quoting American Ins. Co. v. Milwaukee, 51 Wis. 2d 346, 351, 187 N.W.2d 142 (1971)) [hereinafter, "WHCLIP"]. See also D Angelo v. Cornell Paperboard Prods. Co., 19 Wis. 2d 390, 399-400, 120 N.W.2d 70 (1963); Arnold P. Anderson, Wisconsin Insurance 1998). Law §§ 12.1, 12.2, at 12-5, 12-9, 12-13 (4th ed. A party who is subrogated to a second party s rights 9 No. 96-1344 against a third party steps into the shoes of the second party and may bring all claims which the brought against the third party. second party could have Arnold P. Anderson, Wisconsin Insurance Law § 12.3, at 12-18 (4th ed. 1998). ¶19 The issue in this case, then, is whether the Fund has subrogation rights which would allow it to "step into the shoes" of the alleged joint tortfeasors whom it insures. Only if such subrogation rights exist may the Fund bring its contribution action against Nurse Cowell and/or her insurance company. III. ¶20 We now turn to the question at the heart of this appeal: whether the Fund has subrogation rights which would allow to it commence an action for contribution against an allegedly negligent employee of a health care provider and/or the employee's insurer, following the Fund's settlement of a malpractice claim against the health care provider. that the Fund does not have subrogation rights We conclude which would permit it to pursue a claim for contribution against one whose alleged negligence arose while he or she was conducting a health care provider's business, when that person is not a Wis. Stat. ch. 655 health care provider or a health care provider's insurer. A. ¶21 Chapter 655 was enacted by the legislature during the perceived medical malpractice crisis of the 1970s. 200 Wis. 2d at 607. See WHCLIP, Chapter 655 created the Fund to curb the rising costs of health care by financing part of the liability 10 No. incurred by health malpractice claims. ¶22 care providers as a result of 96-1344 medical See id. Under the statutory scheme, health care providers must maintain a particular amount of liability insurance to protect themselves from medical § 655.23(3)(a), (4). occurred, the malpractice claims.7 Wis. Stat. In 1991, when the injury in this case required amount of coverage was $400,000 per occurrence and $1,000,000 for all occurrences in a policy year. See Wis. Stat. § 655.23(4).8 ¶23 primary In addition insurance to maintaining coverage, the Fund essentially mandatory amount of care providers must pay Wis. Stat. § 655.27(3). In health yearly assessments to the Fund. return, the serves as an insurance carrier for health care providers. excess liability When a malpractice claim against a health care provider succeeds, the Fund pays the part of the claim which is in excess of either the amount of primary insurance coverage required by the statute or the amount of primary insurance coverage actually carried by the health 7 Health care providers can meet this requirement either by buying health care liability insurance, self-insuring, or furnishing a cash or surety bond. See Wis. Stat. § 655.23(3)(d), (4). 8 Wis. Stat. § 655.23(4) provides that the health care provider's coverage "shall be in amounts of at least . . . $400,000 for each occurrence and $1,000,000 for all occurrences in any one policy year for occurrences on or after July 1, 1988." We note that the language of the 1995-96 version of § 655.23(4) is identical to the language of the 1991-92 version. 11 No. care provider, whichever is greater. 96-1344 Wis. Stat. § 655.27(1); see also WHCLIP, 200 Wis. 2d at 607. ¶24 The Fund argues that the court of appeals erred when it held that the Fund s ability to sue in the present context is controlled by Wis. Stat. ch. 655. 655 addresses only patients The Fund contends that ch. claims against health providers, not the Fund s claims for contribution. care In addition, the Fund argues that since it is endowed with the power of a common law trustee, it has the power under the common law of See Wis. Stat. trusts to bring suit to protect its assets. § 655.27(6); WHCLIP, 200 Wis. 2d at 615. ¶25 court has We disagree with the Fund s position. already contribution decided actions that brought by Wis. Stat. the Fund. First, this ch. 655 See governs Wisconsin Patients Compensation Fund v. Continental Cas. Co., 122 Wis. 2d 144, 156, 361 N.W.2d 666 (1985). Although the Fund urges us to revisit Continental Casualty because it was based on an earlier version of ch. 655, we find that its reasoning remains helpful in interpreting the newer version of the chapter.9 9 The court in Wisconsin Patients Compensation Fund v. Continental Cas. Co., 122 Wis. 2d 144, 146 n.2, 361 N.W.2d 666 (1985), construed the language of the 1981-82 version of Wis. Stat. ch. 655. Nevertheless, the Fund's argument in that case that its contribution claim was not governed by ch. 655 was almost identical to its argument in this one. See Continental, 122 Wis. 2d at 153. The Fund contended in Continental that ch. 655 did not control its contribution claim because the Fund is not a "patient," "patient's representative," or "health care provider." See id. We rejected this argument in Continental as contrary to the underlying purpose of ch. 655 and we reject it in this case as well. See id. at 156. 12 No. ¶26 96-1344 Second, we indicated in WHCLIP that we must look to Wis. Stat. ch. 655 in order to determine whether the Fund has the authority to bring a suit. We stated that the See WHCLIP, 200 Wis. 2d at 606. Fund, as an agency created by the legislature, has those powers which are, by necessity, to be implied from the four corners of the statute under which it operates. . . . The power to sue may be implied when the power is necessary to carry out an express power or to perform an express duty, or [when] the action arises out of the performance of statutory powers or obligations. . . . Id. at 611-12 (internal quotations omitted). Consequently, we agree with the court of appeals that the question of whether the Fund has subrogation contribution liability claim arose rights against while which a allow non-health conducting a it care health to bring provider care a whose provider s business is governed by ch. 655. B. ¶27 must Since the Fund was created by Wis. Stat. ch. 655, we interpret ch. 655 in authority to bring a claim. order to determine the Fund's See WHCLIP, 200 Wis. 2d at 606. Statutory interpretation is a question of law which this court reviews de novo. Hartman v. Winnebago County, 216 Wis. 2d 418, 430, 574 N.W.2d 222 (1998); WHCLIP, 200 Wis. 2d at 606. In our review, we benefit from the analyses of the circuit court and court of appeals. Hartman, 216 Wis. 2d at 430; WHCLIP, 200 Wis. 2d at 606. 13 No. ¶28 96-1344 At the outset, we note that Nurse Cowell is not a Wis. Stat. ch. 655 health care provider. A health care provider is defined in ch. 655 as a person to whom this chapter applies under s. 655.002(1) or a person who elects to be subject to this chapter under s. 655.002(2). Wis. Stat. § 655.001(8). Under § 655.002(1) and (2), however, the only individuals to whom ch. 655 applies or who may elect to be subject to the chapter are physicians and nurse § 655.002(1)(a)-(c), (2). anesthetists. See Wis. Stat. Therefore, there is no question, and the parties do not dispute, that a registered nurse such as Nurse Cowell does not qualify as a ch. 655 health care provider. ¶29 Lutheran Hospital, on the other hand, is a Wis. Stat. See Wis. Stat. § 655.002(1)(h). ch. 655 health care provider. For this reason, respondents acknowledge that $400,000 of the respondents' insurance is available to the Fund pursuant to Wis. Stat. § 655.23(4) and (5). ¶30 nor Respondents argue, however, that neither Nurse Cowell her individual professional liability insurer, American Family, is responsible for any portion of the $400,000. They reason that because Nurse Cowell is not herself a Wis. Stat. ch. 655 health care provider and because her alleged negligence arose within the scope of her employment for a ch. 655 health care provider, ch. 655 limits Nurse Cowell s malpractice liability to the $400,000 amount covered by Lutheran Hospital s primary liability insurance policy. we agree. 14 For the following reasons, No. ¶31 determine 96-1344 Our principal goal in statutory interpretation is to and give effect to the intent of the legislature. Clark v. American Family Mut. Ins. Co., 218 Wis. 2d 169, 173, 577 N.W.2d 790 (1998); Hartman, 216 Wis. 2d at 430-31; State v. Corey J.G., 215 Wis. 2d 394, 411, 572 N.W.2d 845 (1998). As a threshold question, we must decide whether or not the language of the statute is ambiguous. Corey J.G., 215 Wis. 2d at 411. As this court stated in Corey J.G.: Statutory language is ambiguous if reasonable minds could differ as to its meaning. . . . If the plain language of the statute is ambiguous, we must look beyond the statute's language and examine the scope, history, context, subject matter, and object of the statute to discern legislative intent. . . . We will resolve any statutory ambiguity to advance the legislature's purpose in enacting the statute. Corey J.G., 215 Wis. 2d at 411-12 (internal quotations and citations omitted). ¶32 has Chapter 655 does not expressly state whether the Fund subrogation rights to bring an action for contribution against one conducting a health care provider s business who does not independently qualify as a health care provider, or his or her insurer. Because reasonable persons could differ as to the meaning and interrelationship of the various provisions in ch. 655 as they apply to the question before us, ch. 655 is ambiguous in regard "examine the scope, object" of ch. 655. to this issue. history, context, Id. 15 Consequently, subject we matter, must and No. ¶33 Fund 96-1344 As we explained in WHCLIP, Wis. Stat. ch. 655 and the were designed by the legislature to help limit "the increasing cost and possible decreasing availability of health care in Wisconsin." that one of the WHCLIP, 200 Wis. 2d at 607. ways in which ch. 655 We conclude accomplishes this objective is by including any malpractice liability on the part of a non-health care provider conducting the business of a health care provider within the insurance limit of the health care provider.10 In this way, each person conducting the health care provider's business is not required to go out and buy his or her own malpractice insurance. A holding that the liability of those conducting a health care provider's business is not covered under the health care provider's primary insurance cap would encourage each of herself by obtaining insurance coverage. his those or persons her own to protect professional himself or liability This scenario would likely increase the cost of health care and decrease its availability, as those who could not afford to purchase insurance to protect themselves might choose to exit the health care field or to charge more for 10 During oral argument, the Fund indicated its agreement with this statement of the legislature's intent. Specifically, the attorney for the Fund made the following comment: [Y]ou can garner . . . from the statute itself that there was an intent for the hospital and those carrying on its business to be subject to one limit, in terms of the x-ray techs, the laboratory, the pharmacists [and so on], so that these people would not have to go out, or the hospital have to go out, and buy insurance, which, in the middle seventies, was apparently difficult to obtain in what was perceived as the malpractice crisis. 16 No. the services provided. 96-1344 Such a result would be contrary to the underlying purpose of ch. 655. ¶34 Several provisions of Wis. Stat. ch. 655 lend support to our conclusion that the legislature intended to include the malpractice provider s liability business of with those the conducting limit which a health applies malpractice liability of the health care provider. care to the Wisconsin Stat. § 655.23(5) is perhaps the provision which most obviously supports our holding. Section 655.23(5) provides: While health care liability insurance, self-insurance or a cash or surety bond . . . remains in force, the health care provider, the health care provider s estate, and those conducting the health care provider s business, including the health care provider s health care liability insurance carrier, are liable for malpractice for no more than the limits expressed in sub. (4) or the maximum liability limit for which the health care provider is insured, whichever is higher, if the health care provider has met the requirements of this chapter. (Emphasis added). Under this subsection, the liability of those conducting the health care provider s business may be restricted to the limits set forth in Wis. Stat. § 655.23(4), which, when read together with the other subsections of § 655.23, clearly apply only to health care providers.11 for those conducting the health 11 care Alternatively, liability provider s business is See, e.g., Wis. Stat. § 655.23(3)(a)(requiring that every health care provider . . . shall insure . . . by a policy of health care liability insurance . . . or shall qualify as a self-insurer.") 17 No. 96-1344 limited by this subsection to the maximum liability limit for which the health care § 655.23(5)(emphasis provider added). is insured. Notably, Wis. nowhere Stat. does the subsection even mention the amount for which the one conducting the health care provider s business is insured, let alone include it in calculating the liability cap. ¶35 Other provisions also support the conclusion that the liability of those conducting a health care provider s business is included within the limit of the health care provider. Wisconsin Stat. § 655.005(2) provides, in relevant part, that [t]he [F]und shall provide coverage, under s. 655.27, for claims against the health care provider or the employe of the health care provider due to the acts or omissions of the employe acting within the scope of his or her employment and providing health care services. . . . (Emphasis added). Similarly, Wis. Stat. § 655.27(1) states: There is created [the Fund] for the purpose of paying that portion of a medical malpractice claim which is in excess of the limits expressed in s. 655.23(4) or the maximum liability limit for which the health care provider is insured, whichever limit is greater. . . . The [F]und shall provide occurrence coverage for claims against health care providers that have complied with this chapter, and against employes of those health care providers . . . . (Emphasis added). Finally, Wis. Stat. § 655.27(5)3(d) provides: A person who has recovered a final judgment or a settlement approved by the board of governors [of the Fund] against a health care provider, or an employe of a health care provider, that has coverage under the [F]und may file a claim with the board of governors to 18 No. 96-1344 recover that portion of such judgment or settlement which is in excess of the limits in s. 655.23(4) or the maximum liability limit for which the health care provider is insured, whichever limit is greater. . . . (Emphasis added). ¶36 These three provisions seem to demonstrate the legislature s intention that the Fund cover claims which exceed the health care provider s Wis. Stat. ch. 655 liability limit, whether those claims are against the health care provider or one of its employees. None of the three provisions suggest that the assets or insurance of the employee of the health care provider are relevant in determining the limit on the employee s liability or the amount of excess coverage which the Fund must provide. Indeed, all three provisions address claims against the employee without even referring to the employee s personal assets. Wisconsin Stat. § 655.27(5)3(d) goes so far as to allow a person with a malpractice judgment or settlement to file a claim against the Fund without looking to the employee s assets or liability insurance. We conclude that all three provisions evince the legislature s intent that the Fund cover the employee s liability to the extent that it exceeds the limits of the health care provider s primary insurance policy. ¶37 Based on our analysis of the legislative intent underlying Wis. Stat. ch. 655, we hold that any liability of a non-health care provider which arises while he or she is conducting a health care provider s business, together with the liability of the health care provider itself, is limited to the amount of primary coverage mandated by Wis. Stat. § 655.23(4) or 19 No. the amount of coverage actually provider, whichever is greater. carried by the 96-1344 health See § 655.23(5). care Since the Fund is required by Wis. Stat. § 655.27(1) to pay any amounts in excess of this limit, the Fund does not have subrogation rights to bring an action for contribution against one conducting a health care provider s business who does not independently qualify as a health care provider, or his or her insurer. ¶38 The Fund argues that under this court s decision in WHCLIP, it has an implied power under Wis. Stat. ch. 655 to sue the insurer of any responsible party that refuses to contribute to a malpractice settlement. WHCLIP, however, involved a situation distinct from the situation presented by this case. ¶39 In WHCLIP, the primary insurer of a Wis. Stat. ch. 655 health care provider refused to pay part of the settlement in a malpractice claim against the health care provider. Wis. 2d at 605, 608. WHCLIP, 200 This court held that the Fund, in its capacity as the health care provider s excess liability insurer, was subrogated to the rights of its insured to sue the primary liability insurer for the amount of the policy limits. 604, 618. We reasoned that if the Fund did not Id. at have the authority to sue the primary insurer, the Fund would be forced to pay the statutorily mandated insurance limit of the primary insurer as well as the excess liability amount. Id. at 613. Since such a payment by the Fund would contravene the express language of Wis. Stat. § 655.27(1), we concluded that there was no reasonable doubt that the legislature intended that the 20 No. Fund be able to sue the primary insurance statutorily mandated coverage amount. ¶40 carrier 96-1344 for the Id. at 612. Unlike WHCLIP, this case does not involve a claim that the Fund is subrogated to the rights of its insured to sue the insured s primary liability insurer. In contrast, this case involves the Fund s claim that it is subrogated to the rights of its insured tortfeasor who provider.12 fair share to seek is contribution not Wis. Stat. another ch. 655 potential health care The payment by the Fund of Nurse Cowell s alleged of the settlement provision of ch. 655. Nurse a from Cowell s amount does not contravene any Rather, as we have already pointed out, alleged liability is covered under Lutheran Hospital s liability insurance, and the Fund is required by ch. 655 to pay the rest. Therefore, not only is there reasonable doubt as to whether the legislature intended the Fund to have the subrogation rights it asserts in this case, but the purpose underlying ch. 655 and ch. 655 itself strongly suggest that the legislature did not intend the Fund to have such rights. ¶41 The Fund also argues that this court's ruling in Wisconsin Patients Compensation Fund v. St. Paul Fire & Marine Ins. Co., 116 Wis. 2d 537, 342 N.W.2d 693 (1984), requires that we allow the Fund to bring its contribution claim. we held that the $1.1 million total limit of In St. Paul, a physician's insurance policies must be exhausted before the Fund's liability 12 In WHCLIP, this court specifically declined to address the Fund s ability to bring a claim for contribution under the facts of that case. See WHCLIP, 200 Wis. 2d at 619 n.16. 21 No. began under Wis. Stat. ch. 655. 96-1344 St. Paul, 116 Wis. 2d at 538. We reasoned that we should not relieve the physician's insurers of their contractual burdens when neither the language nor the purpose of ch. 655 would support our doing so. ¶42 Although the Fund urges us to See id. at 548. apply the St. Paul rationale in this case and to require American Family to pay the $300,000 limit on Nurse Cowell's insurance policy, we decline to do so. There is a fundamental difference between the St. Paul case and this one: in St. Paul, we were dealing with the insurer of a Wis. Stat. ch. 655 health care provider, and in this case, we are not. rights which would Since the Fund does not have subrogation allow it to reach the assets of one conducting a health care provider's business who is not himself or herself a health care provider, the Fund cannot reach the insurer of such a person. C. ¶43 Applying our conclusion to the facts of this case, we hold that Nurse Cowell, as an employee of Lutheran Hospital, was one conducting alleged the negligence hospital s in the business Stach case. at the As time of her we have already established that Nurse Cowell is not a Wis. Stat. ch. 655 health care provider, her liability is restricted to the amount of Lutheran Hospital s limit and is covered by Lutheran Hospital s primary insurance coverage. Lutheran Hospital possesses $400,000 of coverage, which is the minimum amount of coverage required by Wis. Stat. § 655.23(4). 22 Therefore, the defendants No. 96-1344 have $400,000 in total coverage which is subject to the Fund s contribution claim.13 The Fund may not bring a contribution claim against Nurse Cowell or American Family for her $300,000 policy, since Nurse Cowell is not herself a health care provider. D. ¶44 Finally, we note that the parties in this case agree that the decision of the court of appeals should be modified to the extent that it limits the Fund s subrogation rights to suits against health care providers or their insurers. In this opinion, we hold only that the Fund does not have subrogation rights which would permit it to pursue a claim for contribution against one whose alleged negligence arose while he or she was conducting a health care providers' business, when that person is not a Wis. Stat. ch. 655 health care provider or a health care provider's insurer. We express no opinion on the Fund s ability to sue those who do not fall under ch. 655 by virtue of the facts that they are not health care providers and their alleged negligence did not arise while they were conducting a health care provider's business. IV. ¶45 We conclude that the Fund does not have subrogation rights which would allow it to bring a claim for contribution 13 We note that Lutheran Hospital has already paid $200,000 toward the Stach settlement. Based on statements made during oral argument, Lutheran Hospital apparently does not contest that the other $200,000 of its policy limit is subject to the Fund s contribution claim. 23 No. 96-1344 against one whose alleged negligence arose while he or she was conducting a health care provider's business, when that person is not a Wis. Stat. ch. 655 health care provider or a health care provider's insurer. Any alleged negligence of those conducting a health care provider s business is included in the limit imposed by ch. 655 on the liability of the health care provider. ¶46 See Wis. Stat. § 655.23(4), (5). Pursuant required to pay to the Wis. part Stat. of a § 655.27(1), successful the is against claim Fund one conducting a health care provider s business which exceeds the amount of the health insurance coverage provider is or care the actually provider s amount for insured, statutorily which the whichever mandated health is care greater. Consequently, in this case, the Fund may not sue Nurse Cowell or her insurer for contribution toward the settlement in the Stach case. By the Court. The decision affirmed. 24 of the court of appeals is Case No. 96-1344 1

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