A Slightly Different Scenario Post-Koken Decision from Judge Hertzberg Out of Allegheny County

I was recently advised of another post-Koken decision out of Allegheny County. This decision was actually handed down by Judge Alan Hertzberg back on February 17, 2010 in the case of Richner v. McCance and Erie Insurance Group, GD 09-2578, 2045 WDA 2009(Alleg. Co. Feb. 17, 2010, Hertzberg J.). This case was only just brought to my attention after the publication of my recent post-Koken article in The Pennsylvania Law Weekly in which I emphasized that these types of cases should be publicized benefit of the Bench and the Bar as a whole.

The Richner case originally involved the post-Koken scenario of a Plaintiff who sued both the third party tortfeasors and Erie as the UIM carrier under a single caption in the Allegheny County Court of Common Pleas.

Erie Insurance responded to the Complaint by filing Preliminary Objections arguing that, under the terms of the insurance policy, the Plaintiff was required to bring the UIM claim before an arbitration panel.

Separately, Erie, acting as a Plaintiff, filed a declaration judgment action in nearby Butler County against the injured party seeking a finding that Erie did not owe any duty to provide UIM benefits under the regular use exclusion.

Erie asserted that UIM coverage should be precluded under the non-owned vehicle regular use exclusion in the policy given that the Plaintiff regularly used his employer’s vehicle, which he was driving at the time of the subject accident. The injured party filed an Answer to Erie’s declaratory judgment action in Butler County asserting that the Butler County action should be dismissed or stayed under the doctrine of lis pendens.

Meanwhile, in the original Allegheny County action, the injured party filed an Amended Complaint in response to Erie’s First Set of Preliminary Objections. In the Amended Complaint, the Plaintiff reasserted the third party claims against the tortfeasors but also raised the same coverage dispute asserted by Erie in the Butler County action and sought a declaratory judgment from the Allegheny Court of Common Pleas on the issue. By this time, the injured party had agreed that the UIM claim should be resolved by way of an arbitration, assuming the regular use exclusion was found not to apply. As such, there was no UIM claim asserted in the Amended Complaint.

Erie responded to the injured party’s Amended Complaint in Allegheny County with the filing of a Second Set of Preliminary Objections. Those Preliminary Objections essentially argued that the pending litigation in Butler County was filed first and should therefore be the action that resolves the coverage dispute. Erie also asserted that the Plaintiff had misjoined Erie in this action against the third party tortfeasors.

On October 30, 2009, Judge Hertzberg issued an Order overruling Erie’s Preliminary Objections. Thereafter, Erie filed a Notice of Appeal along with a concise statement of errors complained of on appeal. Erie again raised the same two arguments noted in the second set of Preliminary Objections noted above.

On February 17, 2010, Judge Hertzberg issued this Rule 1925 Opinion on the issues presented.

In his Opinion, Judge Hertzberg initially asserted that the appeal was improper as the Order overruling the Preliminary Objections was not an appealable Order.

Turning to the merits of the arguments raised, Judge Hertzberg reviewed the doctrine of lis pendens and the 3-pronged test for successfully pleading lis pendens as a defense to a cause of action. Applying that test, Judge Hertzberg held that he did not err in overruling the Preliminary Objections of Erie on the theory of lis pendens.

With respect to Erie’s argument that the injured party’s claim should be dismissed because Erie was misjoined in the Plaintiff’s tort action, Judge Hertzberg noted that Pa. R.C.P. 2229(b) allows for the joinder of Defendants involved in matters arising out of the same transaction, occurrence, or series of transactions or occurrences and involving common questions or law or fact.

Significantly, in reviewing this issue, Judge Hertzberg cited in his Opinion my Pennsylvania Law Weekly article “Two Roads Diverged,” 32 PLW 1355 (No. 30, 2009), and noted that there were two schools of thought on this issue of consolidation versus severance of post-Koken matters.

After reviewing the Post-Koken cases in existence at the time of this decision, Judge Hertzberg decided to allow the claims and issues presented to proceed in a consolidated fashion under a single lawsuit. However, he also noted that, should the third party negligence claim not resolve prior to trial, there would still exist the opportunity to bifurcate and postpone the trial on the UIM exclusion/coverage declaratory judgment issue while awaiting the outcome of trial on the negligence issue.

It appears from the Opinion that Judge Hertzberg was influenced to rule in this fashion by the issue of whether or not “insurance” should be allowed in the negligence claim against the third party tortfeasor. By asserting that the insurance coverage question could be bifurcated from the third party negligence trial at the last moment, Judge Hertzberg recognized the general rule that evidence of insurance coverage is not admissible in negligence cases pursuant to Pa. R.E. 411.

I thank the Honorable Alan Hertzberg for forwarding this case to my attention for publication.

Anyone desiring a copy of this Opinion may contact me at dancummins@comcast.net.