Insurer must pay $13.6M after hospital death

Hospital settles medical malpractice suits with two families for $5M

By Erin L. Nissley

Attorneys, victim's family to split the settlement.

A supplemental insurer who reneged on a 2007 settlement in a wrongful death suit must now pay the victim's family $13.6 million.

The award is the result of a protracted legal battle over the 2002 death of 44-year-old Donna M. Kapacs. The Archbald woman's family filed suit against Moses Taylor Hospital and others after she died at the hospital three days after undergoing cardiac catheterization, a procedure used to test the heart's ability to pump blood.

Mrs. Kapacs bled to death after her femoral artery was perforated during the procedure, and doctors and hospital staff should have recognized and responded to the bleeding, the lawsuit claimed. Attorney Joseph A. Quinn Jr., who represented the family, said a settlement of $4.5 million was reached with Moses Taylor Hospital in January 2007. But the hospital's excess insurance carrier, Lexington Insurance Co., declined to cover the settlement.

Excess insurance is used to supplement primary insurance, although the excess provider usually reserves the right to become involved with claims.

"Based on my conversations with (the hospital's attorneys), I thought that something didn't sound right," Mr. Quinn said. "At the time, Moses Taylor Hospital was in a perilous financial situation. We decided to defer collection of settlement from them."

Instead, Mr. Quinn was given permission to represent Moses Taylor in an existing lawsuit against Lexington Insurance Co. and other insurance brokers affiliated with it, claiming breach of contract, negligence and bad faith.

The case was scheduled to go to trial in front of Judge Carmen Minora in March, but was put on hold while the settlement was reached. It was approved by Judge Minora last month.

"You don't see this kind of situation every day," Mr. Quinn said. "Moses Taylor recognized this was a valid claim, and they had paid the premium for the insurance coverage."

Lexington Insurance will pay a total of $5.44 million to Hourigan Kluger & Quinn and Lenahan & Dempsey, the two law firms handling the cases. The remainder of the $13.6 million settlement will go to Mrs. Kapacs' husband, John K. Kapacs, and her four children: Dawn Schuster, Tracy Kapacs, Ann Marie Kapacs and John Kapacs, Jr.