Monday, May 17, 2010

Tactic of "Offensive" Collateral Estoppel Rejected by Pennsylvania Superior Court

In its May 14, 2010 decision in the case of Catroppa v. Carlton, 2010 WL 1932422, 2010 PA Super 85 (Pa.Super. 2010, Bender, J.), the Superior Court shot down the tactic of "offensive" collateral estoppel under which plaintiffs would secure a UIM award by arbitration in a clear liability rear-end accident case and then attempt to argue that the third party tortfeasor was thereafter collaterally estopped from arguing the issue of damages.

In Catroppa, State Farm provided the $50,000 in liability coverage to the tortfeasor defendant and was also coincidentally the UIM carrier that covered the injured party. There were also $50,000 in UIM benefits available. The trial court stayed the third party action so that the Plaintiff would be afforded the opportunity to complete her UIM hearing before a jury trial in the case.

The UIM arbitration hearing was held and the award was for $100,000. After the $50,000 third party credit was applied, the net award to the Claimant was $50,000.

The Defendant tortfeasor then sought to lift the stay in the third party matter to move forward with her case. However, the Plaintiff countered with a motion for summary judgment arguing that since both parties were State Farm insureds and since the Defendant tortfeasor was in privity with State Farm through the liability policy issued to her, the Defendant tortfeasor should be considered to have participated in the UIM hearing. Accordingly, the Plaintiff argued that the Defendant tortfeasor should be bound in the third party action by the UIM award since the State Farm arbitrator did not dissent and State Farm had assigned counsel to represent its interests.

Through the use of this tactic of "offensive" collateral estoppel by the Plaintiff, the trial court in Beaver County ruled that the State Farm insured tortfeasor was bound by the Plaintiff's State Farm UIM award. Summary judgment was entered against the Defendant tortfeasor for $50,000, her liability policy limit. Carlton appealed and briefs were filed including an amicus brief by the Pennsylvania Defense Institute.

The Superior Court reversed and remanded the case on the estoppel issue. The Superior Court noted that the element of collateral estoppel that the parties be the same in both actions was not met as the Defendant tortfeasor obviously was not a party to the UIM proceedings.

The Plaintiff attempted to get around this issue by arguing that, nevertheless, the tortfeasor was in privity with State Farm and, by virtue of this relationship, could be deemed to have been a participant in both proceedings. The Superior Court noted that, although the Defendant tortfeasor was in privity with State Farm by virtue of her liability policy with State Farm, she was not in privity with State Farm on the entirely separate UIM policy or contract of insurance State Farm had with the injured party.

The Superior Court was also influenced by the fact that the Defendant tortfeasor otherwise had no right to intervene in the UIM proceedings to protect herself from any award that might be entered in that matter.

Accordingly, the court in Catroppa held that the Defendant tortfeasor could not be bound by a determination from a proceeding to which she was not a party and to which she could not intervene or participate in to protect and defend her own interests.

As such the tactic of "offensive" collateral estoppel was rejected and the summary judgment entered in favor of the injured party was reversed.


A copy of this Opinion by the Superior Court can be viewed HERE.


Thanks to the Pennsylvania Defense Institute for bringing this case to my attention.

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