The below article of mine appeared in the November 19, 2013 edition of the Pennsylvania Law Weekly and his republished here with permission from the publisher, American Law Media:
Superior Court Leaves Big Post-Koken Question UnansweredBy
Pennsylvania Law Weekly
November 19, 2011
To date, the issues have been compounded by the lack of opportunities for the appellate courts to weigh in and offer much desired guidance and predictability.
Now, post-Koken cases are finally are climbing up the appellate ladder. On Oct. 15, the Superior Court handed down its much anticipated decision in the automobile accident case of Stepanovich v. McGraw and State Farm, PICS Case No. 13-2987 (Pa.Super. Oct. 15, 2013 Ford Elliott, P.J.E., Ott, J., Musmanno, J.)(Opinion by Ott, J.)(Concurring and Dissenting Op. by Ford Elliott, P.J.E.).
In Stepanovich, the Pennsylvania Superior Court finally had a chance to weigh in on a post-Koken issue of importance: whether or not it was a denial of due process to a plaintiff in a post-Koken case not to identify the underinsured motorist carrier as a party defendant to the jury and yet allow that defendant's attorney to participate in the trial along with the third-party tortfeasor's defense attorney.
While the Stepanovich decision serves to answer some novel post-Koken questions, it unfortunately leaves hanging open the all-important question of how trial court judges should handle the issue of references to "insurance" at trial.
Double-Team DefenseThe Superior Court in Stepanovich held that there was no violation of the plaintiff's due process rights by the trial court's decision to allow the tortfeasor's counsel and the UIM carrier's counsel to "double-team" the plaintiff in the defense of a post-Koken jury trial.
More specifically, at the trial of this third-party UIM matter, the case was identified to the jury as Stepanovich v. McGraw—without reference to State Farm as a UIM carrier defendant. Nevertheless, the defense counsel for the third-party tortfeasor and the attorney for the defendant UIM carrier were both permitted to participate in all aspects of the trial from jury selection to closing arguments.
The trial court allowed both defense attorneys to participate as long as there was no duplication in the questioning of the witnesses. It is also important to note that, according to the opinion, the plaintiff elected to proceed in this fashion rather than agreeing to a bifurcation of the claims into two separate trials.
The jury returned a 10-2 defense verdict in favor of the tortfeasor defendant, McGraw, after a finding that the tortfeasor was not negligent. The verdict was molded to reflect a verdict in State Farm's favor as the UIM carrier defendant.
At the post-trial motions stage, Allegheny County Court of Common Pleas Judge Timothy P. O'Reilly, upon further reflection of the matter, took the rare step of overturning his own decision. O'Reilly granted the plaintiff a new trial after finding that the failure to identify State Farm as a party defendant while allowing two defense counsel to participate in the matter, in hindsight, had resulted in a violation of the plaintiff's due process rights to a fair trial.
As noted, on appeal, the Superior Court in Stepanovich reversed the trial court's decision allowing for a new trial. The case was remanded with the direction that judgment be entered in favor of all defendants.
Reliance Upon Pa.R.E. 411 MisplacedIn its appellate opinion, the Stepanovich court noted that references to Pa.R.E. 411's prohibition against the mentioning of insurance at trial in this case was misplaced. The Superior Court stated that the rule specifically refers only to the preclusion of any mentioning of the available "liability" insurance, and does not reference UIM insurance as was at issue in this case. Accordingly, the court noted that a course of action identifying State Farm as the UIM carrier would not "run afoul" of Rule 411.
Notably, the Superior Court was not presented with, or did not address, the long-standing Pennsylvania common-law prohibition against the mentioning of any forms of insurance at a civil trial. It has been repeatedly held that the adoption of Rule 411 did not serve to affect the pre-existing and still valid rule of law generally prohibiting the mentioning of insurance in any regard during civil trials, including at motor vehicle accident trials, as in Henery v. Shadle, 661 A.2d 439 (Pa.Super. 1995).
Under this common-law prohibition, references to other forms of insurance at trial, including first-party insurance, have been precluded as being prejudicial to the defendant since such references may distract the jury from the central issues of liability and damages to be decided based upon the evidence presented in the courtroom, as in Henery; Price v. Guy, 735 A.2d 668, 671-72 (Pa. 1999); DeVita v. Durst, 167 Pa.Cmwlth. 105, 647 A.2d 636 (1994); Bonavitacola v. Cluver, 619 A.2d 1363, 1370 (Pa.Super. 1993); and Greenwood v. Hildebrand, 515 A.2d 963, 968 (Pa.Super. 1986).
This common-law principle that the mention or evidence of insurance is impermissible has been held to apply regardless of whether the proposed evidence concerns liability insurance coverage of a defendant or insurance coverage that may instead apply to a plaintiff, as in Bonavitacola and Greenwood.
Moreover, separate and apart from Rule 411's preclusion of any reference to liability insurance, under Rules 402 and 403, a defendant remains capable of arguing that evidence of insurance should be precluded given that any alleged probative value of evidence of insurance is outweighed by the danger of unfair prejudice or may confuse the jury, as in Nigra v. Walsh, 797 A.2d 353, 360 (Pa. Super. 2002).
Due Process Claim RejectedThe Superior Court in Stepanovich ultimately ruled that, even accepting for purposes of argument that the plaintiff may have been entitled to inform the jury of State Farm's participation in the trial, the plaintiff was still not entitled to a new trial, as neither the plaintiff nor the trial court provided any legal support for the finding of a due process violation in this regard was per se prejudicial.
Accordingly, it was held that the failure to identify State Farm as a defendant at trial, in and of itself, was not reversible error that would require the granting of a new trial.
In her concurring and dissenting opinion in Stepanovich, President Judge Kate Ford Elliott joined in the majority's reasoning that Rule 411's prohibition against the mentioning of liability insurance was inapplicable in this UIM context.
However, Ford Elliott reasoned that it was the trial court judge who was the one who sat through and witnessed the trial proceedings firsthand and who had thereby determined that the double-teaming of the plaintiff by the defense counsel was prejudicial. Ford Elliott felt that this exercise of discretion by the trial court judge should not be disturbed and that his decision to allow for a new trial should have, therefore, been affirmed.
An Unclear PrecedentAt least two things can be gleaned from a reading of the decision in Stepanovich.
First, Stepanovich clearly supports the proposition that Rule 411, which precludes the referencing of liability insurance at trial, cannot be relied upon to support an argument that references to UIM insurance should be precluded.
Secondly, the Stepanovich decision stands for the proposition that the failure to identify a UIM carrier as a defendant at trial is not, in and of itself, prejudicial or reversible error that would require the granting of a new trial. As such, the issue of how to handle the UIM carrier defendant at a post-Koken trial still, unfortunately, remains somewhat unclear.
The Other End of the PendulumA recent decision at the opposite end of the spectrum finding that essentially any and all insurance information should be allowed in a post-Koken case on all of the issues presented is U.S. District Judge James M. Munley for the Middle District of Pennsylvania's decision in the case of Noone v. Progressive Direct Insurance, PICS No. 13-1220 (M.D.Pa. May 28, 2013 Munley, J.).
In Noone, the court denied an insurance carrier's motion to preclude at trial evidence of (1) the amount of premiums paid by the plaintiff for the UIM policy, (2) the amount of the limits of UIM coverage available, (3) the amount of the tortfeasor's third-party liability coverage and (4) the amount received by the plaintiff from the tortfeasor.
Munley felt that such evidence was not "overly prejudicial" and, even as mere background information, should be allowed to assist the jury in evaluating the breach-of-contract claim against the UIM carrier defendant in a post-Koken trial.
More Appellate Guidance DesiredThus, the central issue of a post-Koken trial—how to handle the mentioning or silence on insurance issues and parties—unfortunately remains somewhat unsettled. While the Stepanovich decision appears to answer some questions, it still leaves others open, and fails to provide the concrete guidance that the trial court bench and bar craves in the brave new world of Pennsylvania automobile law litigation.
Daniel E. Cummins is a partner and civil litigator with the Scranton, Pa., law firm of Foley Comerford & Cummins. His civil litigation blog, Tort Talk, may be viewed at www.TortTalk.com.