Pennsylvania Law Weekly Articles on Consolidation vs. Severance of Post-Koken Cases by Daniel E. Cummins, Esquire

Over the past two months, I published a two-part article on the consolidation vs. severance issue in Post-Koken cases in the Pennsylvania Law Weekly, a statewide legal publication. Here is a republication of those articles together for your future reference.

These articles are reprinted here with permission from the Pennsylvania Law Weekly.(c) 2010 Incisive Media US Properties, LLC.


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


Daniel E. Cummins
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. His civil litigation blog, "Tort Talk," may be viewed at www.torttalk.com. It features a "Post-Koken Scorecard," which provides a synopsis of trial court post-Koken decisions uncovered to date.


__________________________________________________________


Insurance


Not Unlike the Other
Post-Koken decisions on consolidation vs. severance issue reach same conclusion


Daniel E. Cummins
The Legal Intelligencer
July 27, 2010


In last month's column, I reviewed the ongoing struggles of trial court judges from across the state in weathering the onslaught of "Hurricane Koken" and the novel issue of whether third party liability claims and the UM/UIM claims should be allowed to proceed in a consolidated fashion. With this article, I address those post-Koken cases that involve bad faith claims.


Since the publication of last month's column, however, at least two more trial court decisions on the issue were handed down — one in favor of severance and one in favor of consolidation of post-Koken claims. The statewide numbers now stand at 22 trial court decisions in favor of consolidation and 18 in favor of the severance of claims.


In the most recently noted consolidation decision, Firoozifard v. Krome, Northampton County Common Pleas Court Judge Anthony S. Beltrami issued a well-written opinion in which he provided what appears to be an appropriate and workable framework for handling the "insurance" at the trial of a consolidated third party negligence/UIM case.


Essentially, Beltrami noted that the identity of insurance parties could be kept out of the caption when it is displayed or described to the jury. He also noted that the post-Koken trial should proceed as an ordinary civil trial, the recognized purpose of which, under Pennsylvania law, is to seek a determination of the truth of the liability and damages claims.


That is, there should be no reference to "insurance" issues that have no bearing on the truth of the underlying claims presented by the plaintiff and disputed by the defendant. Beltrami also seemed to recognize that the inclusion of the insurance issues would also only serve to needlessly and hopelessly confuse a jury comprised of lay people yanked from their daily lives and reluctantly sitting in the jury box.


Rather, Beltrami noted that the extraneous issues pertaining to the applicable insurance policy limits of the third party liability carrier and the UIM carrier should be handled separately by a learned trial court judge in a post-verdict proceeding to mold the jury's verdict as may be necessary. In other words, after the jury is thanked and sent home, the trial court judge could simply "do the math" of applying the amount of the third party defendant's liability limits to the verdict to determine whether or not any UIM benefits are due from the UIM carrier.


It remains to be seen whether other trial courts across Pennsylvania will adopt this manner of running a consolidated post-Koken trial.


Now, onto the second part of this column.


Almost Down the Middle


Similar to the "ordinary" post-Koken cases involving only third party liability claims and the companion UIM claims, there is an equally increasing need for appellate guidance on various issues pertinent to the bad faith cases as well.


A serious split of authority among the trial courts has developed on the question of whether post-Koken claims involving bad faith claims should be allowed to proceed in a consolidated fashion under one caption or be severed into two separate matters.
There are, to date, at least five decisions that have been uncovered across the state in favor of consolidation and seven decisions in favor of the severance of the bad faith claim from the UIM claim.


The decisions in favor of the consolidation have been written by Allegheny County Common Please Court Judge R. Stanton Wettick Jr., Clinton County Common Pleas Court Judge J. Michael Williamson, Montgomery County Common Pleas Court Judge Arthur R. Tilson and Lackawanna County Common Pleas Court Judge Carmen D. Minora.


On the other side of the matter, the decisions favoring the severance have been handed down by Butler County Common Pleas Court Judge Marilyn J. Horan, Bucks County Common Pleas Court Judge Clyde W. Waite, Delaware County Common Pleas Court Judge George A. Pagano and Lackawanna County Common Pleas Court Judge Robert A. Mazzoni.


There are also decisions in favor of severance in Allegheny County, but those cases appear to involve unique facts that take them out of the ordinary analysis.


Also, while there appears to be a split in the authority out of Lackawanna County, the end results may be the same.


Minora's decision to allow the claims to remain consolidated in Decker v. Nationwide involved the slightly different context of a declaratory judgment action combined with a bad faith claim against the same carrier.


Mazzoni's decision in Augustine v. Erie Insurance involved a more typical post-Koken case in which the bad faith claim was allowed to remain consolidated for discovery purposes but would be severed for trial purposes.


Consistent in Reasoning


The decisions on both sides of the consolidation vs. severance issue are ultimately consistent in their overall reasoning. They just have different methods on how to approach and resolve the issue of pre-trial discovery on the bad faith portion of a post-Koken suit.


In the case of Gunn v. Auto. Insurance Co. of Hartford and again in Wutz v. Smith and State Farm Insurance Co., Wettick set up a discovery timetable in cases where UIM breach of contract claims were allowed to remain consolidated with bad faith claims. The timetable called for the UIM claim to proceed first to a jury trial with no discovery on the bad faith claim until the UIM claim was concluded by jury verdict.


In Wutz, State Farm's attorney, Daniel L. Rivetti of Robb Leonard Mulvihill in Pittsburgh, argued that the carrier would obviously be prejudiced in terms of the negotiations and the trial on the UIM side, if the carrier were required to preliminarily produce its UIM claims file for review by the plaintiff. In a great analogy, Rivetti argued that allowing for such discovery "would be akin to requiring the defense in a football game to furnish its defensive formation for the upcoming play to the plaintiff before the plaintiff selected the play that it would call."


Wettick agreed with the carrier's argument and held that the UIM claim's file need not be produced in these types of bad faith cases until after the UIM portion of the claim is submitted to the jury.


Under Gunn and Wutz, once the UIM portion of the jury trial was concluded by a verdict, the UIM carrier was required to turn over its discoverable information to the court for an in camera review with the discoverable portions being finalized and then turned over to the plaintiff.


At that point, the case would then immediately proceed to a bench trial on the bad faith claim. The same judge who just presided over the jury trial on the UIM claim would handle the bench trial.


Wettick's rationale was that the trial court judge who presided over the UIM jury trial would have the evidence of the case fresh in his or her mind to then turn to and address the bad faith trial issues.


This is sensible.


Wettick also created a mechanism whereby the plaintiff, instead of going right to the bad faith trial, could request a continuance in order to review the discovery produced from the UIM carrier's file, conduct any other discovery deemed necessary and plan out her or her case-in-chief.


Those trial court decisions that have ruled in favor of severing the bad faith claim from the UIM claim, such as Horan's ruling in Marburger v. Erie Insurance Exchange, appear to have done so primarily on the same basis that the bad faith claim should be stayed and no discovery in that regard should be allowed until the UIM claim is resolved.


Thus, the severance decisions appear to be following the same discovery timetable called for by Wettick in the consolidated cases. They just accomplish the identical result by severing the cases and formally staying the bad faith claim until the conclusion of the UIM claim.


Similar to the split of authority on the consolidation vs. severance issue in the "ordinary" post-Koken cases, it does not appear that the same interlocutory issue in the bad faith context will be able to proceed up the appellate ladder anytime soon.


As such, both the bench and bar at the trial court level will have to litigate these issues on a county-by-county basis for the indefinite future. For this reason, it remains important that these trial court decisions in post-Koken cases continue to be publicized whenever and wherever possible. •


Daniel E. Cummins is a partner and civil litigator with the Scranton law firm of Foley, Cognetti, Comerford, Cimini & Cummins. His civil litigation blog, "Tort Talk," may be viewed at www.torttalk.com. It features a "Post-Koken Scorecard," which provides a synopsis of trial court post-Koken decisions uncovered to date.