Sharon Regional Health System along with two doctors reached a settlement Wednesday with a Hermitage couple in the largest jury award ever given in Mercer County.

Terms of the deal were not disclosed.

Last April Marie Anne Viola and her husband, Joseph, were awarded $12.8 million in a malpractice case involving Sharon Regional along with Dr. John P. Gallagher of Shenango Valley Obstetrics/Gynecology Associates, and Dr. John C. Garriott of Holt, Allen and Garriott Radiology Associates. The award reached nearly $14 million after applying interest.

However, Neal Rosen, the Pittsburgh attorney representing the Violas, acknowledged the settlement was in the "seven figures.'' When pressed for a more specific figure and when asked if the settlement was for $5 million Rosen responded, "Do you think I would settle at $5 million for a $12.8 million award?''

This was a high profile case in part due to the potential liability facing Sharon Regional. The jury found Garriott and the hospital 72 percent negligent in misdiagnosing Mrs. Violas breast cancer in 1996 and Gallagher 28 percent responsible. The jury found Sharon Regional was responsible as an "ostensible agency.''

In July one of Sharon Regional's insurers balked at paying the health care providers portion of the award and filed suit in Allegheny County Common Pleas Court. The suit claims National Union Fire Insurance Co., Pittsburgh, wasn't properly notified by the hospital that it was being sued in a malpractice case as required under terms of the insurance policy. As a result, the suit says the company has no obligation to pay any claims in the case.

However, Sharon Regional hotly contends it correctly informed the insurer and expects the company to pay up. Sharon Regional has a $25 million liability policy with the insurer. The policy protects Sharon Regional beyond what its primary carrier covers. In this case its other carrier covers up to $1.2 million.

Sharon Regional deferred all comments to its attorney Bob Lackey, who likewise declined to reveal terms of the settlement except to say that all of the appeals in the Violas case were being dropped. He said Sharon Regional didn't have to liquidate any assets as part of the deal but said he was not at liberty to comment if the non-profit health care provider had to get a loan to pay off its portion of the settlement.

Lackey noted insurance funds from the two doctors also came into play as part of the settlement but declined to give figures. A message left at Gallagher's Hermitage office on Thursday was not returned. In September Gallagher and his practice filed for Chapter 11 bankruptcy. At the time his attorney acknowledged the primary reason for the bankruptcy was to forestall proceedings against Gallagher's assets as a result of the April jury award. But Gallagher's insurance carrier also filing for bankruptcy, an inability to reach an out-of-court settlement with the Violas and other factors were also blamed.

Garriott is no longer with Garriott, Holt and Allen. A message left at his office at St. Francis Hospital in New Castle on Thursday was not returned.

Terms of the settlement will not harm Sharon Regional or change the way it provides service, Lackey said.

"The hospital remains financially sound,'' Lackey said. "Operations are continuing without interruption.''

He declined to say whether Sharon Regional was required as part of the settlement to pay the Violas immediately and then seek to recoup the funds from its insurers.

He also said Sharon Regional was confident it would prevail in its case against National Union. Depositions are now underway in that case but no trial date has been set. Lackey said there have been no discussions of settling this case.

Rosen said he believed Sharon Regional will win that case.

"My prediction would be they would not be out of pocket anything,'' Rosen said. "Marie's (Viola) entire settlement, in my opinion, will be paid for out of insurance proceeds. I think they've (Sharon Regional) have been treated very shabbily by their insurance company. When that happens justice ultimately prevails.''

A message left at National Union's Pittsburgh office and their attorney's office on Thursday was not returned.

The Violas were also named as defendants in National Union's suit but Rosen said that has no impact on the settlement. He added if Sharon Regional wins the case it would mean the Violas would collect additional money under the settlement accord.

Reaching the agreement took a number of twists and turns amid a flurry of legal maneuvers by the Violas last week. On Friday the Violas filed writs of execution at the Mercer County courthouse seeking to find out from banks how much money Sharon Regional had in accounts at the institutions.

By Friday afternoon the writs were taken to the Mercer County Sheriff's Department for servicing, but by then a settlement was in hand. Rosen said he took the action to let Sharon Regional, the two doctors and all the insurers in the case to be aware the Violas wanted the case resolved. Parties in the case had been negotiating terms of a settlement for months.

"It was a message it's time to settle,'' Rosen said. "They got the message and we settled,'' Rosen said. He complimented Sharon Regional for "stepping up to the plate.''

After reaching a verbal agreement on Friday a final written agreement was hammered out on Wednesday.

But Lackey discounted the legal action taken Friday by the Violas created resulted in the deal. Negotiations before then were already "at top speed'' and that the parties in the case met the previous afternoon in the Pittsburgh judge's chamber overseeing the National Union case.

"I would say Sharon (Regional) had approached them (the Violas) a couple weeks before Christmas on a significant proposal,'' Lackey said. "They responded, National Union was involved and things were at a feverish pitch even before Friday.''

Lackey added that Friday was legally the first day the Violas were entitled to file the writs.

"The (Sharon Regional) board's executive committee met Friday morning and approved the settlement even before the writs were issued,'' Lackey said.

In the end, Sharon Regional's thoughts go with Mrs. Viola, Lackey said

"I don't think we should overlook our sympathy for Mrs. Viola,'' Lackey said. "At the heart of this you have a woman with a very serious situation that doesn't go away. It's truly unfortunate with what happened.''

Mrs. Viola has "untreatable'' advanced cancer and Rosen said she declined to comment.