Lancaster County Court of Common Pleas Applies Gallagher v. GEICO Retroactively

In the Court of Common Pleas of Lancaster County case of Rutt v. Donegal, No. CI-19-02544 (C.P. Lanc. Co. Sept. 16, 2019 Brown, J.), the court addressed the application of the Pennsylvania Supreme Court’s decision in Gallagher v. GEICO, which addressed the validity of the Household Exclusion in automobile insurance policies. 

According to the Opinion, the Plaintiff was involved in a motor vehicle accident while riding on a motorcycle that was covered by a carrier other than Donegal.

The Plaintiff recovered damages from the liability policy possessed by the tortfeasor as well as under the policy that covered his own motorcycle.  The Plaintiff then turned to Donegal for additional UIM coverage under a Donegal policy that covered another vehicle in the Plaintiff’s household. 

Donegal denied the claim under its Household Exclusion contained in its policy.

The Plaintiff responded by filing suit.  Donegal filed Preliminary Objections in the nature of a demurrer, asserting that the Gallagher decision could not be applied retroactively to apply to this case. 

The court in Rutt ruled that the Gallagher decision applied retroactively and applied a rationale similar to that voiced by the Eastern District Court in its decision in Butta v. GEICO.  In so ruling, the Rutt court also read the Gallagher decision in an expansive fashion, rejecting the effort by Donegal to limit Gallagher to its facts involving separate policies that were issued by the same carrier.

Anyone wising to review this decision may click this LINK.

I send thanks to Attorney Scott Cooper of the Harrisburg, PA law firm of Schmidt Kramer for bringing this case to my attention.

UIM Bad Faith Claim Denied Due To Conclusory Allegations

In the case of Peters v. Geico, No. 19-CV-1119 (M.D. Pa. Aug. 14, 2019 Caputo, J.), the court dismissed a Plaintiff’s UIM bad faith claim after finding numerous allegations in support of this theory of recovery to be conclusory.  

In completing his analysis, the court stripped away the conclusory allegations in the Complaint to determine whether the bad faith claim was plausible under federal pleadings standards.   Once the court stripped away the conclusory allegations, the bad faith claim was simply based upon the facts that there was an accident, a tortfeasor’s willingness to pay the policy limits, and insured’s written demand for UIM benefits supported by a medical report, followed by a UIM carrier’s failure to settle.  

The court noted that these facts, alone, did not support a claim for bad faith which requires proof of an unreasonable denial of benefits in a knowing or reckless fashion by the carrier with the knowledge that its denial of benefits was unreasonable.  

The court did allow the Plaintiff to amend the Complaint but cautioned that the Amended Complaint would be required to set forth facts and not merely conclusory allegations in support of the bad faith claim.

Anyone wishing to review a copy of this decision by Judge Caputo in the Middle District may click this LINK.

I send thanks to Attorney Lee Applebaum of the Philadelphia law firm of Fineman, Krekstein, & Harris for bringing this decision to my attention.   Check out Attorney Applebaum's Pennsylvania and New Jersey Insurance Bad Faith Blog for the latest notable bad faith cases.

Preliminary Objections Sustained Where Only Conclusory Allegations Set Forth in Dram Shop Action

In the case of Shultz v. Barnes, No. 18-CV-1308 (C.P. Lyc. Co. July 19, 2019 Linhardt, J.), the court sustained several Preliminary Objections filed by a Defendant in a liquor liability motor vehicle accident case given that the Plaintiff failed to allege sufficient facts to support various claims. 

According to the Opinion, the Plaintiff was the administrator of the estate of a decedent who was killed in a motor vehicle accident caused by a tortfeasor driver. The Plaintiff alleged that the tortfeasor driver was driving a motor vehicle under the influence of alcohol. 

In addition to suing the driver, the Complaint also identified the company that operated the bar where the tortfeasor driver was drinking prior to the accident as a defendant in this case. The owner and president of that bar was also listed as a defendant.  

 The Defendants filed various Preliminary Objections to the Complaint.  

The court sustained the Defendants’ Preliminary Objections to the count in the Complaint alleging a violation of the Dram Shop Act.  

The defense had argued that the Plaintiff had only provided conclusory allegations that the Defendants knew that the tortfeasor driver was visibly intoxicated while he was at the bar.   The court granted these Preliminary Objections and noted that it was not sufficient for a Plaintiff to simply allege that alcoholic beverages were served to patrons in order to support a Dram Shop action.  

The court noted that the Plaintiff failed to assert any facts regarding the physical appearance of the tortfeasor Defendant driver in terms of whether he was visibly intoxicated or not while he was served at the bar.   Although this Preliminary Objection was sustained, the Plaintiff was granted an opportunity to file an Amended Complaint.  

Relative to the Preliminary Objections filed by the individual Defendant, the court found that the Plaintiff failed to allege sufficient facts to pierce the corporate veil.   Again, the Plaintiff was granted an opportunity to file an Amended Complaint in this regard.  

The court also sustained Preliminary Objections to the Plaintiff’s wrongful death claim given that that claim was brought not only on the Plaintiff’s behalf but also on behalf of entities who were allegedly entitled to damages for reasonable hospital, nursing, and medical expenses, as well as funeral expenses, burial expenses and other losses.  The court noted that, under the Rules of Civil Procedure, such allegations were improper in a wrongful death claim.  As such, the Preliminary Objections in this regard were sustained.   Again, the Plaintiff was granted leave to file an Amended Complaint.

Lastly, the court also sustained Preliminary Objections to the allegations of recklessness and the claims for punitive damages under a finding that the Plaintiff failed to allege sufficient facts to support these allegations.   The court noted that, should discovery later reveal facts supporting an award of punitive damages on separate claims, the Plaintiff would be allowed to seek an amendment at that time.   

Anyone wishing to review a copy of this decision may click this LINK.

Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (August 27, 2019).    

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Seeing Accident of Loved One on IPhone App Map Does Not Support Negligent Infliction of Emotional Distress Claim

In the case of Jenson v. St. Louis, No. 3:19-cv-00515 (M.D. Pa. Aug. 9, 2019 Munley, J.), the court granted in part and denied in part a Motion to Dismiss a Plaintiff’s negligent infliction of emotional distress claim in a fatal trucking accident matter.  

According to the Opinion, prior to the day of the accident, the decedent would always call his fiance when he arrived at work.  On the day of the accident, when the decedent did not call, his fiance used a smartphone application to locate the decedent's cellular phone.  The application displayed a map that indicated that the phone, and therefore, the decedent, were located at the scene of a crash.

The Plaintiff-fiance alleged in the Complaint that she suffered a direct and immediate shock by this contemporaneous and sensory observance of the fatal collision through her iPhone.

Judge James M. Munley of the Federal Middle District Court found that these facts did not support an allegation of the required contemporaneous perception element of a cause of action for negligent infliction of emotional distress. 

The Court emphasized that the Plaintiff did not witness the accident but only saw a reporting of the accident on her phone after the fact.  This was found to be insufficient to support the element of contemporaneous observance of an accident necessary to support a claim for negligent infliction of emotional distress.  

The court analogized this case to those cases in which this type of claim was dismissed where a plaintiff received a phone call from a hospital indicating that a loved one had been in an accident.

Given his ruling on this aspect of the claim, Judge Munley did not reach the issue of whether this Plaintiff's status as the fiance of the decedent was a close enough relationship to support the requirement under the claim of negligent infliction of emotional distress that one suffer from a contemporaneous observance of an injury to a close relative in order to present such a claim.

The court allowed the remaining claims by other Plaintiffs to proceed, including a claim of punitive damages in a case where a trucker attempted to merge back onto the Northeast Extension of the Pennsylvania Turnpike under dark conditions and with no lights illuminating the sides of the trailer portion of the tractor trailer at the time of the accident.

Anyone wishing to review a copy of this decision may click this LINK.  Here is a LINK to the companion Order.

I send thanks to Attorney James A. Beck of the Philadelphia office of the Reed Smith law firm for bringing this case to my attention. 

Third Circuit Holds: No Coverage, No Bad Faith

In the case of 631 M. Broad St. v. Commonwealth Land Title Ins. Co., No. 18-3094 (3d Cir. July 26, 2019 Fuentes, J., McKee, J., and Schwartz, J.), the court affirmed a district court’s entry of summary judgment in favor of a carrier in a title insurance bad faith case.

Notably, after agreeing that there was no coverage obligation and, therefore, no duty to defend under the policy, the third circuit stated, “…since the [D]istrict Court correctly concluded that [the carrier] had no duty to defend, there could be no bad faith claim against [the carrier].”  

Anyone wishing to review a copy of this decision may click this LINK.

I send thanks to Attorney Lee Applebaum, the writer of the Pennsylvania and New Jersey Insurance Bad Faith Case Law blog and from the Philadelphia law firm of Fineman, Krekstein & Harris for bringing this case to my attention.  

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