Monday, July 5, 2010

Latest Article - Consolidation vs. Severance Issue in Post-Koken Cases

The below article of mine originally appeared in the June 29, 2010 edition of the Pennsylvania Law Weekly, a statewide legal news publication.(c) 2010 Incisive Media US Properties, LLC. Further duplication without permission is prohibited. All rights reserved. Please contact the author for permission to reprint or duplicate.

A Growing Need for Guidance
Trial courts struggle with consolidation vs. severance issue in post-Koken cases


Daniel E. Cummins
Pennsylvania Law Weekly/The Legal Intelligencer
June 29, 2010

The gale-force winds of change brought on by "Hurricane Koken" continue to wreak havoc in the common pleas courts across the state as trial court judges struggle, without any appellate guidance, to determine whether a variety of post- Koken automobile accident litigation claims should proceed in a consolidated fashion under one caption.

This first part of a two-part column will review those "ordinary" post- Koken cases involving the issue of whether the third party claims against the responsible party defendant may proceed to a jury in a consolidated fashion with the companion underinsured or uninsured motorists benefits claims against the injured party's own automobile insurance carrier.

In next month's column, the trial courts' struggles over the same issue in post- Koken cases that involve bad faith claims will be analyzed.

In all scenarios involving this consolidation versus severance issue, there is a growing split of authority in Pennsylvania trial courts that is creating an increasing need for appellate guidance.

In fact, as noted below, there are even splits of authority within some county common pleas courts. This lack of a consistent common law on the issue leaves the bar and trial court judges with great uncertainty on the issue.

The Initial Preference

It has been about five years since the automobile accident litigation landscape was changed by a 2005 state Supreme Court case, Insurance Federation of Pennsylvania v. Commonwealth, Department of Insurance (Koken).

In Koken , the high court ruled for the first time that automobile insurance carriers were not required to include arbitration clauses in their policies for the resolution of disputed uninsured and underinsured motorist benefits claims.

Thereafter, many carriers got rid of the arbitration clauses in their policies, leaving UIM and UM claims to be litigated by way of lawsuits filed in the trial courts.

One of the first issues that repeatedly came to the attention of the trial courts, typically by way of preliminary objections, was whether these new UIM or UM claims could be pursued in the same lawsuits and under the same captions as the third party claims against the defendant tortfeasors who caused the accidents.

As noted in my November 2009 article on this topic, "Two Roads Diverged," the first number of trial court judges to address this issue ruled in favor of allowing for the consolidation of these UIM and third party claims. By November 2009, there were at least 15 trial court decisions addressing the issue, all of which had ruled, or suggested they would rule, in favor of keeping these claims together under one caption to proceed to a jury trial in a consolidated fashion.

Concisely, these initial decisions were handed down in Lackawanna, Luzerne, Pike, Lehigh, Dauphin, Beaver, Allegheny and Philadelphia counties.

Among those judges who were the first to hand down opinions on this issue were Lackawanna County Common Pleas Court Judge Carmen Minora and Allegheny County Common Pleas Court Judge R. Stanton Wettick.

The common and overriding rationale of the consolidation decisions is that the claims arising out of the same "transaction or occurrence," i.e the same motor vehicle accident, should be tried together as a means of furthering the interests of judicial economy for the already overburdened trial courts. Another factor noted is the avoidance of piecemeal litigation with the possibility of inconsistent verdicts.

These post- Koken claims arising out of a single accident have been allowed to stay together under the permissive joinder of actions provision found in the Pennsylvania Rules of Civil Procedure at Rule 2229 or, in the alternative, under Rule 213(a) which allows for the consolidation of actions arising out of the same occurrence.

The judges in favor of consolidation seem unfazed by the fact that keeping the third party liability claims together with the UM/UIM claims will bring the topic of "insurance" in front of the jury at trial.

Although Pennsylvania Rule of Evidence 411 and its supporting caselaw precludes the mentioning of any form of insurance at personal injury trials, these judges have generally noted that the statute precluding a mention of "insurance" at trial expressly provides that insurance issues may be mentioned at trial where that topic may be relevant. Here, the mentioning of "insurance" is relevant to the litigation of the uninsured or underinsured motorist claim, the judges ruled.

Since those initial decisions, however, the storm has shifted course.

Other trial court judges, some of whom are even members of the bench in the aforementioned counties, have ruled in favor of severing the third party liability claims from the UM/UIM claims.

A Run The Other Way

Led by two Butler County Common Pleas judges, S. Michael Yeager and Marilyn J. Horan, judges who support the severing third party liability claims from UM/UIM claims have created run of decisions in favor of their rulings.

Yeager and Horan appear to have written the first opinions in favor of severance. Other judges, from York and Adams counties, have followed suit.

The main rationale put forth in those severance decisions is primarily that evidence of "insurance" is not admissible in personal injury civil litigation matters under Pa.R.E. 411. These courts have also referred to Pa.R.E. 403, which allows a trial court to preclude relevant evidence "if its probative value is outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury…."

The fact that the third party tortfeasor defendant may be unduly prejudice by having the UM/UIM insurance company as a co-defendant in front of a jury in violation of the Rules of Evidence seems to be the main reasoning of the courts in favor of severing the claims for the protection of the tortfeasor's right to a fair trial.

Some of the courts in favor of severance have also noted that the act of severing and staying the UM/UIM claim pending the resolution of the third party liability claim furthers the interest of judicial economy.

For example, in those cases where the jury comes back with a verdict in the liability lawsuit that is less than the tortfeasor's liability policy limits, there would be no need to litigate the UIM claim.

In total, there have been at least 16 decisions in favor of severance and at least 22 decisions in favor of consolidation.

This split of authority on the consolidation versus severance of post- Koken cases cries out for appellate guidance to bring certainty on the issue to the bench and bar.

Further compounding the need for appellate guidance on this issue is the fact that there are now splits of authority in a few counties. In both Lackawanna County and Philadelphia, for example, there have been decisions handed down on both sides of the issue.

A Little Help Here?

While the need for appellate guidance on this issue is great, the likelihood that such appellate guidance may be forthcoming anytime soon is not so great.

In order to get to the Superior Court to address the consolidation versus severance issue, which is typically raised by way of preliminary objections, permission to appeal on an interlocutory basis must be secured by the litigants from the trial court.

Understandably, most plaintiffs attorneys will not want to delay their client's claim for a year or more in order to take the case to the appellate arena. Similarly, defense counsel seeking permission to pursue such an appeal have an uphill battle in securing permission from trial court judges who do not want to delay an injured party's recovery or want cases languishing on their docket.

The only other way this issue might go up the appellate ladder is on the merits after a trial and on an appeal from post-trial motions. With many post- Koken cases still only in discovery, the chances for this type of review on appeal remains far off.

Therefore, until appellate guidance on this issue is secured, members of both sides of the motor vehicle accident bar will have to weather the storm on a county by county basis.

To reiterate, there are currently at least 22 decisions in favor of the consolidation of these claims with those decisions coming out of Lackawanna, Luzerne, Pike, Lehigh, Dauphin, Beaver, Allegheny, Philadelphia and Northampton counties. There are now at least 16 decisions in favor of the severance of claims with those decisions coming out of Butler, York, Adams, Lackawanna and Philadelphia counties.

Hopefully, one wise trial court judge will soon grant a party permission to file an interlocutory appeal on the consolidation versus severance issue in post- Koken cases so that this important issue can be addressed and settled by the Superior Court and, perhaps, even the Pennsylvania Supreme Court, once and for all.

Daniel E. Cummins is a partner and civil litigator with the Scranton law firm of Foley, Cognetti, Comerford, Cimini & Cummins. He handles insurance defense matters all across Northeastern Pennsylvania as far west as Williamsport, PA, as far north as the New York border, as far east as the New Jersey border, and as far south as the Easton - Allentown - Jim Thorpe line of towns (i.e. Northampton, Lehigh, and Carbon Counties). His civil litigation blog, "Tort Talk," may be viewed at It features a "Post-Koken Scorecard," which provides a synopsis of trial court post-Koken decisions uncovered to date.

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