Wednesday, May 13, 2009

Superior Court Quashes Chance to Review its first Post-Koken case

In its recent April 15, 2009 opinion in Gunn v. Auotomobile Ins. Co. of Hartford, 2009 WL 1001029 (Pa.Super. 2009), the Superior Court refused an opportunity to address a post-Koken UIM case for the first time on the grounds that the appeal before them had to be quashed given that the trial court order appealed from was not a collateral order that was subject to a permissible appeal.

In the underlying case, the Plaintiff was pursuing a combined UIM claim and bad faith claim under a single caption in a post-Koken case where the Plaintiff's UIM policy called for a lawsuit to pursue that claim as opposed to an arbitration.

Allegheny Court of Common Pleas Judge R. Stanton Wettick Jr. implicitly held in his related trial court opinion in this matter that underinsured motorist coverage and separate bad faith claims may be consolidated under one caption but that courts faced with such joined claims should have the UIM case decided first by a jury followed by a bench trial on the bad faith claim. In the trial court's opinion, found at Gunn v. Automobile Insurance Co. of Hartford, PICS Case No. 08-1266 (C.P. Allegheny July 25, 2008), Wettick denied Hartford's motion to stay discovery related to the bad faith claim until the plaintiff's UIM claim could be decided.

In essence, the court ruled that a piecemeal approach of the various claims arising out of a single motor vehicle accident would not be tolerated by the already overburdened state trial court system.

In quashing the appeal, the Superior Court in Gunn acknowledge the carrier's argument that the appeal should be heard in light of the fact that "the insurance industry is pervasively dropping the mandatory arbitration clause from the standard insurance policy" and, as a result, "the courts in the Commonwealth of Pennsylvania are very likely to be inundated with cases in which insureds who have yet to demonstrate any entitlement to [UIM] benefits, will join their UIM claim with statutory bad faith claims."

Yet, in weighing this public policy argument against the cost to the Superior Court in having to undertake piecemeal reviews of non-final orders from the trial courts, the Court felt that the public policy argument was not sufficiently compelling enough to tip the balance in favor of allowing this appeal to go forward. As such, the Court entered an Order quashing the appeal for this reasons and for various other related reasons noted in the opinion.

It therefore appears that the trial courts will have to continue to work, without appellate guidance, in their efforts to address the novel issues arising in these post-Koken cases currently working their way through the system.

For a more detailed discussion of the issues faced by the trial courts in this regard, please see my Pennsylvania Law Weekly article from October of 2008 entitled "Here Comes Hurricane Koken" and my follow-up November of 2008 Pennsylvania Law Weekly article "Nothing to Fear But Fear Itself: Prior decisions in consolidated cases provide guidance for post-Koken issues."

Other articles of mine may also be found by clicking on their title in the JDSupra box on the right side of this blog or by visiting my profile at http://www.jdsupra.com/profile/danielcummins.

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