Judge refuses to seal bad faith lawsuit filed by hospital

May 19--A Lackawanna County judge refused to seal a bad-faith lawsuit Moses Taylor Hospital filed against an insurance company that refused its request to settle a lawsuit involving a brain-damaged baby.

Judge Terrence Nealon said the public's right to know outweighs concerns the hospital raised that the suit and related documents contain confidential information regarding its negotiating strategy. The ruling is among several decisions Nealon handed down in recent years in which he refused to seal settlements of lawsuits involving deaths or serious injuries to minors.

The bad-faith lawsuit, filed last year against Coverys insurance, centers on a $19.25 million judgment involving a 2017 lawsuit David and Michelle Kellock filed against Moses Taylor, Wilkes-Barre obstetrician John Frye, Wilkes-Barre General Hospital and related entities.

That lawsuit, filed by attorney Matthew Casey of Philadelphia, alleged Frye failed to properly interpret fetal heart tracings that indicated the Kellocks' daughter, Sophia, was in distress in the womb. That led to a delay in the child's Sept. 5, 2011, delivery at General Hospital, causing catastrophic injuries that left her with cerebral palsy and other serious medical conditions. Moses Taylor was faulted for care the infant received after being transferred there.

The insurance carrier for Frye and General Hospital agreed to an $11.5 million settlement. Moses Taylor agreed to submit the case to an arbitrator, who awarded the Kellocks $7.75 million. Coverys paid $6.75 million of the total. The other $1 million was covered by other insurance.

The lawsuit alleges the judgment against the hospital would have been less, but an attorney for Coverys refused a settlement offer made during a recess in the arbitration hearing. Although Coverys paid the bulk of the judgment, the hospital still was harmed because the amount counts against its policy limits. That leaves less money available to pay other pending claims should the plaintiffs prevail, putting the hospital at risk to pay out of pocket.

The hospital sought to seal its lawsuit as well as documents relating to the Kellock case. It argued, in part, that the arbitration agreement included a confidentiality clause that would be violated if the case was not sealed. Coverys opposed the motion.

In rejecting the hospital's argument, Nealon said judicial records are considered open unless a party can provide a compelling reason to seal. The hospital's concerns regarding the confidentiality provision do not meet that standard.

"The secrecy interests cited by the hospital ... do not supersede the presumption in favor of open access to judicial records so as to justify court-sanctioned closure of the record," Nealon said.

Contact the writer:

tbesecker

@timesshamrock.com;

570-348-9137;

@tmbeseckerTT on Twitter

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