NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P

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1 NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P MARIE ANNE VIOLA AND JOSEPH LOUIS VIOLA, HER HUSBAND, IN THE SUPERIOR COURT OF PENNSYLVANIA Appellants JOHN P. GALLAGHER, M.D., SHENANGO VALLEY OB/GYN, JOHN C. GARRIOTT, M.D., HOLT ALLEN AND GARRIOT MDS RADIOLOGY ASSOCIATES, P.C., AND SHARON REGIONAL HEALTH SYSTEM, v. Appellees No WDA 2012 Appeal from the Order Entered July 17, 2012 In the Court of Common Pleas of Mercer County Civil Division at No(s): BEFORE: BENDER, J., GANTMAN, J., and OLSON, J. MEMORANDUM BY BENDER, J. FILED: August 2, 2013 Marie Anne Viola and Joseph Louis Viola, her husband, appeal the trial court s order of July 17, 2010, which purported to enforce the terms of a post-trial settlement of the underlying medical malpractice claim. 1 The Violas contend that the trial court erred in concluding that the controlling provision of the settlement agreement was clear and unambiguous, thereby 1 During the pendency of these proceedings, Marie Anne Viola died and Joseph Louis Viola continued this action as the Executor of her estate. Nevertheless, because the Estate has not been substituted as a party to this action, we shall refer to the plaintiff husband and wife collectively as the Violas.

2 limiting their share of proceeds of the litigation that exceeded the amount of the judgment entered in their favor. After careful study of the court s very thorough Opinion and Order, we are constrained to agree with the Violas and must therefore vacate the trial court s order and remand this case for consideration of parol evidence to determine the parties respective intentions as expressed in Paragraph 6.B. of the settlement agreement. The trial court ably summarized the extended history of these proceedings as follows: On May 21, 1999, Plaintiffs Marie Anne Viola and her husband Joseph Louis Viola ("the Violas") filed a medical malpractice action against Marie Viola's gynecologist, John P. Gallagher, M.D. ("Gallagher"); Gallagher's employer, Shenango Valley OB/GYN Association ("SVA"); Marie Viola's radiologist, John C. Garriott, M.D. ("Garriott"); and Garriott's employer, Radiology Associates, P.C. ("RA"). The basis of the lawsuit was the failure of Gallagher and Garriott to diagnose Marie Viola's breast cancer. The Violas also included as a defendant the Sharon Regional Health System ("Sharon") on the theory of ostensible agency because Sharon provided the facilities used by Garriott and RA. On April 20, 2001, a jury rendered a verdict for damages in favor of Marie Viola for $12,344,000 and in favor of Joseph Viola for $500,000 for loss of consortium the total verdict being $12,844,000 (the "Verdict"). [2] Pursuant to Court Orders entered on July 5, 2001 and August 22, 2001, delay damages were awarded in the amount of $1,091, (the "Delay Damages") the total Verdict and Delay Damages amounting to $13,935, Pursuant to the Court's Order entered on August 22, 2001, the Prothonotary entered judgment on August 23, 2001 in favor of the Violas and jointly and severally against Gallagher, SVA, Garriott, RA, and Sharon (the "Defendants") in 2 The jury's verdict allocated the total negligence 28% to Gallagher and 72% to Garriott

3 the amount of $13,935, (the "Violas Judgment" or the "Judgment"). All of the Defendants carried medical-malpractice insurance. Gallagher and SVA's insurance carrier apparently became insolvent and therefore a claim was made to the Pennsylvania Property and Casualty Insurance Guaranty Association ("PP&CIGA"), [3] which had a statutory liability limit of $300,000 per claim. Garriott and RA were insured by Medical Protective Insurance Company ("MPIC"), having policy limits of $400,000. Sharon was insured by PHICO Insurance Company, with policy limits of $300,000. Sharon's excess insurance carrier was the National Union Fire Insurance Company of Pittsburgh ("National Union"). In July 2001 and after the Verdict was rendered but before the Violas Judgment was entered, National Union informed Sharon that it was denying coverage and, on July 18, 2001, instituted a Declaratory Judgment Action in the Court of Common Pleas of Allegheny County, Pennsylvania (the "Declaratory Judgment Action"). It was National Union's position that Sharon failed to give it timely notice of the Violas' claims, and, therefore, in its Declaratory Judgment Action, National Union sought to be excused from providing excess liability insurance coverage to Sharon. In the Declaratory Judgment Action, Sharon filed a Counterclaim against National Union on August 31, 2001, seeking to have National Union indemnify Sharon for its liability on the Violas' Judgment (the "Indemnity Counterclaim"). Sharon also filed a cross-claim Bad Faith Action against National Union (the "Bad Faith Claim") seeking damages from National Union for breaching the covenant of good faith and fair dealing implied in its excess liability insurance policy. 3 PP&CIGA is an unincorporated association created by statute for the purpose of providing means for payment of covered claims when the insurance company responsible for those claims has become insolvent, and for avoiding financial loss to claimants and policy holders. See 40 P.S , et seq

4 On September 7, 2001, Sharon also filed a Complaint to Join an Additional Defendant, seeking to include Nichols & Associates, Inc. ("Nichols") as an additional defendant, claiming that Nichols was Sharon s risk loss coordinator, that Nichols was aware of the Violas' claims, and if Nichols did not timely notify National Union of the Violas' claims, Nichols may be liable for breach of contract damages (the "Nichols Claim"). All of these actions were filed in the Court of Common Pleas of Allegheny County, Pennsylvania, Civil Division, at Case No. GD , the case being assigned to the Honorable R. Stanton Wettick, Jr. (all of these actions being collectively called the "Allegheny County Actions," and Sharon's Indemnity Counterclaim, Bad Faith Claim, and the Nichols Claim being collectively the "Allegheny County Claims. "). Because the primary liability coverages for Gallagher, SVA, Garriott, and RA were insufficient to cover the Violas' Judgment and since Sharon's excess liability coverage was in dispute due to National Union's denial of coverage, the default excess insurance provider for all of the Defendants became the Medical Professional Liability Catastrophe Loss Fund ("the CAT Fund"). * * * * After crediting the Violas' Judgment for [$1,060, paid by the defendants primary insurance coverage], the Violas Judgment balance amounted to $12,875, It was anticipated that a portion of the Violas' Judgment would be paid by the CAT Fund on behalf of all of the Defendants; however, no payments were forthcoming. Over the next several months, the parties, primarily the Violas and Sharon, attempted to reach an accommodation; however, the Violas became impatient and Sharon became intractable. As a result, on December 28, 2001, the Violas initiated execution proceedings on their Judgment [instructing] the Sheriff of Mercer County to attach and garnish all of Sharon's bank accounts in local banks. Faced with a potential financial collapse, Sharon offered, and the Violas accepted, many concessions and the Violas, Sharon, and all of the other Defendants entered into an Agreement Regarding Judgment (the "Agreement" or "ARJ"). The Agreement was dated December 28, 2001 and signed by the various parties over the next several - 4 -

5 weeks. A review of the entire Agreement reflects that its purpose was to postpone any executions on the Violas' Judgment pending resolutions of the Allegheny County Actions and assure the Violas that they would receive payment on the unsatisfied portion of their Judgment and accrued interest. Upon execution of the Agreement, Sharon immediately paid the Violas $5,000,000 and, according to paragraph 4 on page 6 of the Agreement, agreed to pay the Violas the lesser of either $100,000 or the difference between $5,000,000 and the amount to be eventually paid by the CAT Fund. Any moneys received by Sharon in the Allegheny County Claims, were termed "the Recovery" (the "Recovery" or the "Recovery Funds"). [4] The Agreement divided the disposition of the Recovery Funds into two separate categories, those funds received from the Bad Faith Claim, and those funds received from the Indemnity Counterclaim and the Nichols Claim. If Sharon recovered damages in its Bad Faith Claim against National Union, the Agreement provided in paragraph 17 on page 14: 17. Bad Faith Action. The net proceeds of any bad faith claim made by Sharon against National Union, after reimbursement of Sharon's legal fees and case expenses, will be allocated 60% to Sharon and 40% to the Violas. If Sharon recovered damages either in its Indemnity Counterclaim against National Union or in its Nichols Claim,... Recovery: 4 Paragraph 1.C. on page 5 of the Agreement defines the term Within thirty (30) days after Sharon recovers funds (hereinafter referred to as the "Recovery") from National Union or Nichols in the Declaratory Judgment Action, whether under the National Union excess liability coverage or under the Counterclaim or Complaint to Join, by way of settlement or final judgment, Sharon shall pay to the Violas that portion of the Recovery to which the Violas are entitled pursuant to Section 6(B) of this Agreement

6 the Agreement provided for the treatment of these portions of the Recovery as follows: 6.B. The Recovery. The Recovery shall be divided between Sharon and the Violas as follows: (i) The Violas shall be entitled to retain the first One Million Eight Hundred Thousand ($1,800,000.00) Dollars. (ii) The remainder shall be allocated between Sharon and the Violas so as to maximize the Recovery and, to the fullest extent possible, so as to make Sharon whole and to pay the Violas the outstanding delay damages and interest on the verdict. Litigation on the Allegheny County Actions proceeded over the next several years, and in February 2008, Sharon settled the Nichols Claim for $1,950,000 (the "Nichols Settlement"). Pursuant to paragraph 6.B.(i) on page 8 of the Agreement, on/or about April 1, 2008, Sharon paid the Violas $1,800,000 and retained the balance of $150,000. Sharon's litigation against National Union involved two jury trials, each trial resulting in verdicts in favor of Sharon and against National Union on Sharon's Indemnity Counterclaim. Following these trials, Judge Wettick: (a) rendered a decision in favor of Sharon on the Indemnity Counterclaim; (b) dismissed National Union's Declaratory Judgment against Sharon; and, (c) dismissed Sharon's Bad Faith Claim against National Union. Judge Wettick determined that National Union would be assessed damages on the Indemnity Counterclaim equal to that which it would have had to pay on behalf of Sharon's share of the Violas Judgment plus accrued interest less a credit of $326,533 paid by PHICO, Sharon's primary liability carrier. National Union objected to this formula because it failed to recognize a credit for the $1,950,000 Nichols Settlement previously received by Sharon. On July 22, 2008, Judge Wettick issued a Memorandum Opinion ("J. Wettick's Memorandum")," - 6 -

7 wherein [he] determined that National Union was not entitled to and should not receive any credit for the Nichols Settlement. * * * * Judge Wettick also found merit to Sharon's position that if its consequential damages exceeded $1,950,000 it was not receiving a double recovery because Sharon could pursue claims against Nichols.... * * * * Therefore, by Order dated July 22, 2008 accompanying J. Wettick's Memorandum ("J. Wettick's July Order"), Judge Wettick directed National Union and Sharon to submit to him their respective computations of the financial liability incurred by Sharon due to National Union's breach, that being "the amount of the [Violas] Judgment as of August 31, 2008 and the daily interest accruing, beginning September 1, 2008." (i.e. the Violas' Judgment plus accrued interest). Based upon the information provided by the Parties (via Violas' counsel's affidavit and spreadsheets), Judge Wettick, by Order dated October 14, 2008 ("J. Wettick's October Order"), determined that National Union caused Sharon to incur damages of $11,760,324.50, and entered an award for that amount plus interest from September 30, Following the resolution of post-trial motions, Judge Wettick entered a final Order on May 28, 2009 ("J. Wettick 's Final Order") wherein he: (a) (b) directed that judgment be entered in favor of Sharon and against National Union in the amount of $11,760, plus interest from September 30, 2008; and, ordered dismissal of Sharon's Bad Faith Claim against National Union. Both National Union and Sharon filed appeals from J. Wettick's Final Order. After these appeals were resolved and J. Wettick's Final Order was affirmed, National Union paid Sharon damages and interest of $13,944, plus record costs of $1,500.00, the total payment amounting to $13,946, ("the National Union Payment") and on November 4, 2011, Sharon's judgment against National Union was satisfied of record

8 THE PRESENT CONTROVERSY After receipt of the National Union Payment, based upon its calculations pursuant to paragraph 6.B. on pages 8 and 9 of the Agreement, Sharon proposed to pay the Violas $1,135, in full satisfaction of the balance owed on the Violas Judgment. The Violas rejected this offer and, based upon their calculations pursuant to paragraph 6.B. on pages 8 and 9 of the Agreement, demanded payment of $5,227, in full settlement of their Judgment[;] [t]hus, the present controversy. This matter now comes before this Court on Sharon's Motion to Enforce Settlement asking this Court to: (a) compel the Violas to execute and deliver a full satisfaction of [their] Judgment upon payment of the $1,135,729.63; (b) prohibit the Violas from executing upon [their] Judgment; and, (c) grant such other relief as appropriate. Contemporaneously with its Motion to Enforce Settlement, Sharon filed an Emergency Petition for Ex Parte Stay of Execution due to Sharon's fear that the Violas would again attempt to execute upon [their] Judgment by having the Sheriff of Mercer County once more attach and garnish all of Sharon's bank accounts... thereby again exposing Sharon to a possible financial collapse. On December 5, 2011, the Court, per Judge Thomas R. Dobson, entered an Order: (a) staying any execution upon the Violas' Judgment; (b) directing that Sharon post a supersedeas of $1,903, with the Prothonotary; and, (c) scheduling a hearing before this Court on December 7, At that hearing and with the consent of the Parties, this Court directed that Sharon pay the Violas $1,135, and place with the Prothonotary an additional supersedeas of $1,136,400, thus making the total supersedeas $4,910, This Order - 8 -

9 also directed that the pleadings be timely completed and that a pre-trial status conference be held on February 7, Prior to the scheduled pre-trial status conference, Sharon filed a Motion for Partial Distribution and, following a hearing on January 23, 2012, this Court memorialized a stipulation entered into between Sharon and the Violas (the "Stipulation") and directed the Prothonotary to distribute from the supersedeas funds $1,800, to Joseph Viola, individually, and as executor of his deceased wife's estate and to distribute the balance to Sharon (the "January 2012 Order"). This Court further directed that from the funds obtained from the Prothonotary, Sharon deposit $2,208, from the Recovery Funds in escrow pending further Order of Court or agreement of the Parties, and that the remainder of the Recovery Funds be distributed to Sharon, free and clear of any claims by the Violas. Paragraph 4 of the Stipulation attached to the January 2012 Order provided: 4. The parties have not resolved their dispute regarding the treatment of the $1,800,000 from the Nichols' settlement that was paid by Sharon to plaintiffs on April 1, 2008 and interest thereon as set forth in the Parties' pleadings in this matter. Calculating interest on that $1,800,000 through the date Sharon paid funds into this Court makes the remaining amount at issue between the Parties a total of $2,208,092. On February 7, 2012, a pre-trial status conference was held and because the parties were unable to reach an agreement, a trial was scheduled for February 14 and 15, Immediately prior to trial, Sharon filed two Motions in Limine: (a) (b) The first Motion in Limine sought to exclude any evidence occurring prior to execution of the Agreement pursuant to the Parol Evidence Rule; and, The second Motion in Limine sought to prevent the Violas from attempting to relitigate the issues previously decided by Judge Wettick in the Allegheny County Claims. This Court reserved ruling on these two Motions in Limine and permitted the Violas to submit post-trial briefs in opposition to Sharon's Motions in Limine. Rather than delay the trial, this Court permitted [the] Violas to introduce documents and - 9 -

10 testimony from [the] Violas counsel, Neil R. Rosen, Esq., subject to this Court excluding the objectionable evidence from its consideration after review of the Violas post-trial briefs. Revised and Amended Decision of the Court, 7/17/12, at 1-14 (footnotes omitted, emphasis altered). In the absence of a formal ruling on the motions in limine, the trial court admitted parol evidence of the parties intent in entering into the Agreement, but declined to consider it in disposing of the parties claims under paragraph 6.B. The court reasoned that, pursuant to paragraph 11, the Agreement was a fully integrated document, thus dispensing with any need for consideration of the evidence concerning the meaning of its provisions generally. Id. at 27, 32 ( The agreement is a fully integrated contract. Therefore, any evidence presented at trial of prior or contemporaneous oral or written agreements, negotiations or understandings, which vary or contradict the written contract is not admissible. ). In addition, the court held more specifically that the language of paragraph 6.B. was not ambiguous either on its face or in application and that the direction of paragraph 6.B.(ii), directing that sums in excess of those payable to the Violas be allocated so as to make Sharon whole[,] compelled payment to Sharon of all sums exceeding the Violas Judgment. Id. at 28. The court noted expressly, that said amount included both Sharon s counsel fees and the amount of the Nichols Settlement. Id. at 36. Thus, the court summarized its findings and conclusions as follows:

11 1. The Violas have received full and complete satisfaction of the Judgment and they are entitled to nothing more. 2. The excess Recovery Funds of $2,208,092 shall be awarded to Sharon for the reasons that Sharon is entitled to be made whole and reimbursed for: (a) (b) all of the expenses it incurred in litigating the Allegheny County Actions; and, all funds Sharon paid on the Violas Judgment, including the $1,800,000 from the Nichols Settlement. Id. (emphasis in original). The Violas then filed this appeal, raising the following questions for our consideration: I. Did the trial court commit an error of law when it concluded that the ARJ unambiguously provided that Plaintiffs were entitled to be paid only the amount of their judgment and all post-judgment interest from the Recovery? II. III. Given that the ARJ was ambiguous, was the trial court required to consider the Parol Evidence presented at trial, offered only by Plaintiffs, establishing that the parties intended that any excess funds were to be divided equally between Sharon and Plaintiffs? If, in fact, the ARJ was unambiguous, were Plaintiffs entitled to the interest on the $1.8 million? Brief for Appellants at 2. Agreements that assign the rights of one party to another and settle or release related claims are both contractual in nature. Accordingly, those agreements must be interpreted in accordance with principles of contract law. See Crawford Cent. Sch. Dist. v Commonwealth of Pa., 888 A.2d

12 616, 623 (Pa. 2005); Davis v. Gov t Employees Ins. Co., 775 A.2d 871, 975 (Pa. Super. 2001). As a general rule, interpretation of contracts is a matter of law for the court. See Bowersox Truck Sales and Service, Inc. v. Harco Nat. Ins. Co., 209 F.3d 273, 277 (3d Cir. 2000) (recognizing that contractual interpretation poses a question of law for the trial court s disposition unless the contract is ambiguous and thus raises a question of fact). In construing a contract, the intention of the parties is paramount and the court will adopt an interpretation which under all circumstances ascribes the most reasonable, probable, and natural conduct of the parties, bearing in mind the objects manifestly to be accomplished. Charles D. Stein Revocable Trust v. Gen Felt Indus., Inc., 749 A.2d 978, 980 (Pa. Super. 2000). Nevertheless, courts do not assume a contract s language was chosen carelessly, nor do they assume the parties were ignorant of the meaning of the language employed. Crawford Cent. Sch. Dist., 888 A.2d at 622. Consequently, if the language appearing in the written agreement is clear and unambiguous, the parties intent must be discerned solely from the plain meaning of the words used. Stein Revocable Trust, 749 A.2d at 980. The language of a contract is ambiguous if, on its face, it is subject to more than one reasonable interpretation. See Madison Const. Co. v. Harleysville Mut. Ins. Co., 735 A.2d 100, 106 (Pa. 1999). Correspondingly, language is unambiguous if it can be construed in only one

13 reasonable manner. See id. A contract may not be deemed ambiguous, however, merely because the parties disagree on the meaning of its terms. See County of Delaware v. J.P. Mascaro & Sons, Inc., 830 A.2d 587 (Pa. Super. 2003). Ambiguity may appear either patent, [as] arises from the defective, obscure, or insensible language used[,] or latent. Steuart v. McChesney, 444 A.2d 659, (Pa. 1982) (quoting Black's Law Dictionary 105 (rev. 4th ed. 1968)). Unlike the evident lingual dysfunction apparent when ambiguity is patent, latent ambiguity arises from extraneous or collateral facts which make the meaning of a written agreement uncertain although the language thereof, on its face, appears clear and unambiguous. Id. A contract may be deemed subject to clarification through consideration of parol evidence in the presence of either form of ambiguity. Releases, like all contracts, must be interpreted to maintain internal consistency and give meaning to all the terms as written. See Brown v. Cooke, 707 A.2d 231, 234 (Pa. Super 1998). Accordingly, the clauses of a release may not be read as independent agreements thrown together without any consideration of their combined effect. Id. (quoting Flatley v. Penman, 632 A.2d 1342, 1344 (Pa. Super. 1993)). Terms in one section of the contract should not be interpreted in a manner that nullifies other terms. Id. Rather, the document must be read as a whole and clauses seemingly in conflict construed, if possible, to give effect to each. See id. See also Stein Revocable Trust, 749 A.2d at

14 In this instance, the trial court found paragraph 6.B. of the Agreement unambiguous notwithstanding the parties assertion of competing interpretations and the minimal nature of the controlling language. Paragraph 6.B. attempts to establish a priority and manner of distribution for The Recovery which contemplates sums to be paid by Nichols and National Union in the declaratory judgment action, or under the Coutnerclaim or Complaint to Join. See ARJ at 5, 1.C. That provision states, in its entirety, as follows: 6.B. The Recovery. The Recovery shall be divided between Sharon and the Violas as follows: (i) The Violas shall be entitled to retain the first One Million Eight Hundred Thousand ($1,800,000.00) Dollars. ARJ, at 8, 6.B. (ii) The remainder shall be allocated between Sharon and the Violas so as to maximize the Recovery and, to the fullest extent possible, so as to make Sharon whole and to pay the Violas the outstanding delay damages and interest on the verdict. In support of their challenge on appeal, the Violas argue that at the non-jury trial, Sharon expressly admitted that the ARJ failed to speak to how excess funds should be distributed and that the document, in fact, said nothing about excess amounts. This concession shows either that the ARJ was ambiguous or that the ARJ did not cover the distribution of excess funds. That being so, the trial court was left with only two options. First, the court could have concluded that no meeting of the minds occurred on the question of excess funds and that the ARJ simply was not applicable. Second, the court could have concluded that the ARJ is indeed ambiguous with regard to the distribution of excess funds; in that instance, the trial court was

15 required to resort to parol evidence as the only method to resolve this ambiguity. Brief for Appellant at 15. Although the trial court received a substantial quantity of parol evidence at the non-jury trial in the form of competing testimony from the parties counsel, the court declined to consider that testimony on the conclusion that the ARJ was not ambiguous and that its interpretation is therefore confined to the language of the document. Inasmuch as the parties stipulated that the Violas had been paid the entire judgment entered in [the trial court] in August 2001 and all post-judgment interest[,] see Trial Court Opinion at 25 (citing ARJ, at 8, 6.B.(ii)), the court concluded that the sole remaining issue to be decided... is the meaning of the phrase so as to make Sharon whole as set forth in paragraph 6.B.(ii) of the [ARJ][,] see id. at 26. After providing definitions of the word whole from multiple authoritative sources, the court assessed the issue as follows: The term make whole is not an esoteric phrase it is used in everyday English to indicate restoration or return to a former position, to make complete. The Violas have failed to suggest any other meaning or definition for the word whole or the phrase make whole. [5] Therefore, there can be no confusion as to the meaning of the phrase. 5 We might postulate that the Violas omission to offer another interpretation for the phrase make whole arises from their focus on the ambiguity of provisions of the ARJ that require and prioritize payments made to the them, which the language of the document suggests take priority over any payment to Sharon. See discussion, supra

16 There being no confusion of the meaning of the phrase make whole, a proponent of admitting parol evidence is left to argue that there exists an ambiguity in the context that the phrase was used in the [ARJ]. A contract is not ambiguous if the court can determine its meaning without any guide other than the knowledge of the facts on which (from the nature of the language in general) its meaning depends. Trial Court Opinion at 29. The court determined further that, in view of the parties stipulation that the Violas had been paid the entire judgment entered in this Court in August 2001 and all post-judgment interest[,] the Violas could be entitled to nothing more and all funds in excess of those amounts should be paid to Sharon to defray the counsel fees it incurred in pursuit of its action against Nichols. Id. at We conclude that the court s decision, although thorough in its consideration of the record, overreaches in its conclusion that the ARJ is not ambiguous. Initially, given the tortuous course of the underlying litigation and the expansive level of forbearance and cooperation the Violas provided during the post-verdict period, we cannot conclude that the parties necessarily intended the Violas should receive only satisfaction of their monetary judgment, as the trial court concluded. Trial Court Opinion at 36 ( The Violas have received full and complete satisfaction of their judgment and they are entitled to nothing more. ). No provision of the ARJ so limits the Violas recovery, either on its face or by construction in light of the facts of record. Indeed, paragraph 6.B.(i) requires payment to the Violas of only the first $1,800,000, while paragraph 6.B.(ii) appears to prioritize the award

17 of additional sums to the Violas, requiring first that the parties maximize the Recovery and that the remainder shall be allocated... to the fullest extent possible, so as to make Sharon whole and pay to the Violas the outstanding delay damages and interest on the verdict. ARJ, at 8-9 (emphasis added). Contrary to the trial court s disposition, this language fails to define precisely what sums constitute the recovery payable to the Violas. Thus, the language of paragraph 6 appears ambiguous in view of other provisions of the ARJ. Whereas the trial court concluded that the recovery as referenced in that paragraph is limited to the Violas judgment, the language of the ARJ makes no such assumption. In fact, the Recovery is designated by the ARJ s paragraph 1.C. to encompass funds from National Union or Nichols in the Declaratory Judgment Action, whether under the National Union excess liability coverage or under the Counterclaim or Complaint to Join, by way of settlement or final judgment... Id. at 5. Therefore, the Recovery appears to include all available sums save those previously paid by the insurance carriers and the CAT Fund, and is not limited to the amounts of either the verdict or the judgment. Paragraph 1.C. then refers the reader back to paragraph 6.B. to determine the priority of payment of those available funds, but it too makes no mention of either the verdict or the judgment and does not appear to limit payment to those amounts. Thus, we are constrained to conclude that nothing in the applicable provisions of the ARJ limits the payment of funds to the Violas as the trial

18 court concludes. Instead, the ARJ emphasizes maximizing the recovery for the benefit of the Violas, allowing payment to make Sharon whole to the fullest extent possible only as a subordinate priority. In so concluding, however, we do not find the foregoing construction of the ARJ to embody the only reasonable interpretation. One equally viable alternative suggests that the term recovery, although otherwise defined by paragraph 1.C. relative to the source of payment, really refers only to the amount of the verdict. Indeed, if it referred to more than that, i.e., to the judgment, there would appear no need for paragraph 6.B.(ii) to recognize the need to pay to the Violas the outstanding delay damages and interest on the verdict, as those components of any damages award would have been incorporated into the judgment. Id. at 9. Thus paragraph 1.C. and 6.B.(ii) appear to contemplate a different measure of what the Recovery is to begin with. The inconsistencies, which appear to confuse the source from which payment is collected, the legal obligation it may be deemed to satisfy, and the manner in which it is distributed, spawn a level of ambiguity themselves that extends far beyond the construction of the term to make whole, around which the trial court constructed its analysis. To be sure, that phrase too leaves substantial room for disagreement over precisely what expenses the parties contemplated as items of expense Sharon might claim in seeking payment from excess funds. The attendant debate need not indeed, cannot be resolved, however, until the provisions of the

19 agreement that specify precisely what sums are payable to the Violas have been resolved. Because we conclude that the ARJ allows substantial room for interpretation on that issue, we are constrained similarly to recognize that the trial court erred in finding as a matter of law that the controlling provisions of the ARJ are not ambiguous. Inasmuch as the trial court has already compiled a record of parol evidence on which to discern the parties true intent in the ARJ, the court erred in not considering that evidence to resolve the conundrum now before us. In accordance with the foregoing analysis, we vacate the trial court s determination and remand this matter with instructions to determine the true intent of the parties as a matter of fact either on the basis of the evidence adduced thus far or with the aid of additional evidence as the trial court may deem appropriate. Order VACATED. Case REMANDED for proceedings consistent with this Memorandum. Jurisdiction RELINQUISHED. Judgment Entered Deputy Prothonotary Date: 8/2/