Nazario v. Washington Adventist Hospital, Inc.

Thompson, J., delivered the opinion of the Court. The issue presented by this appeal is to what extent an insurance carrier, who has paid Workmen’s Compensation benefits, has a claim on proceeds from an employee’s medical malpractice settlement which arose out of the same injury. On May 25, 1972, Joaquim F. Nazario, the appellant, injured his eye in the course of his employment. He was treated for the injury at Washington Adventist Hospital by Dr. A. J. Martin; a few days later he lost his eye by enucleation at Holy Cross Hospital.

Nazario filed a Workmen’s Compensation claim in August, 1972 from which he received $25,605 to cover temporary total disability and permanent partial disability and $3,318.75 for medical expenses. These sums were paid by the insurer of his employer, the appellee, the American Casualty Company. Appellant brought an action for malpractice against Dr. Martin and the Washington Adventist Hospital. On August 3, 1977, judgments nisi were entered by consent of the parties in favor of appellant for Twenty-Five Thousand Dollars ($25,000) and jointly in favor of appellant and his wife for Twenty-Five Thousand Dollars ($25,000) for loss of consortium.

In late July, 1977, the attorney for Washington Adventist Hospital called the American Casualty Company’s claim office in order to ascertain the amount of its compensation claim. On September 1, 1977, American Casualty Company filed a motion to intervene in the proceeding. Thereafter, the hospital’s insurer filed a bill of interpleader in the Circuit Court for Prince George’s County and deposited $25,000 in the registry of the court. At the interpleader hearing, Nazario testified that he had received no notice from American Casualty that he would have to reimburse them, and that he would not have accepted the $50,000 settlement had he known that American Casualty Company would take part of it.

He said that he settled his suit because of the uncertainty of what a jury might do in ²⁴⁵ this case. He admitted that his counsel in the malpractice case knew of his Workmen’s Compensation claim but did not represent him for that claim. He also said that he had no idea that the insurance company might have an interest in his malpractice case. Neither Nazario nor his counsel had notified American Casualty of the malpractice proceedings.

American Casualty Company made no attempt to exercise its right pursuant to Art. 101, § 58 1 to sue the doctor or the hospital. The trial court, (Fisher, J.) found that American Casualty Company was entitled to recover $25,000, less attorney’s fees, court costs, and expenses. The parties have agreed as to these expense items and also that American Casualty Company is entitled to no part of the $25,000 settlement for the loss of consortium. The appellant argues here that the insurance company is estopped from claiming any part of the proceeds of his suit because it did not intervene in the action until the settlement was already effectuated, and it failed to notify the appellant of its claim.

Appellant claims that the settlement demand would have been higher to include the carrier’s claim if he had known of the claim. Equitable estoppel is applicable only where there is a duty imposed upon the party remaining silent to speak. Mason v. Dulaney, 144 Md. 108, 114 , 124 A. 390 (1923). The statute imposes no duty on the insurance company to