Willet v. Pennsylvania Medical Catastrophe Loss Fund

In Willet v. Pennsylvania Medical Catastrophe Loss Fund, 549 Pa. 613, 702 A.2d 850 (1997), our supreme court held that the Pennsylvania Medical Catastrophe Loss Fund (CAT Fund) could be liable to an insured on an equitable indemnification claim for delay damages that exceed the amount of its statutory coverage where: (1) the CAT Fund exercised exclusive control over settlement negotiations; (2) the CAT Fund refused to tender its policy limit; (3) that refusal was the reason that the case did not settle. See Walsh v. Medical Professional Liability Catastrophe Loss Fund, 576 Pa. 72, 838 A.2d 692 (2003). The court explained that indemnity is a common law remedy that shifts an entire loss from one who has been compelled by reason of some legal obligation to pay a judgment occasioned by the initial negligence of another who should bear it.