Monday, April 11, 2011

Judge Terrence Nealon Thoroughly Weighs In on Joinder and Venue Issues in Post-Koken Matters

On April 8, 2011, in the case of Bingham v. Poswistilo, Ritz, and Erie Ins., No. 10 - CV - 6020 (Lacka. Co., April 8, 2011, Nealon, J.)(32 pages), Judge Terrence R. Nealon of the Lackawanna County Court of Common Pleas issued the most thorough Opinion to date on the issues of venue and the consolidation vs. severance of third party claims and UIM claims in post-Koken Matters.

I proudly note that, in his Opinion, Judge Nealon actually cited to Tort Talk, with its compilation of cases in the Post-Koken Scorecard, as being part of his research on the issues presented.

Concisely, Judge Nealon held in Bingham that tort and UIM claims can be joined under Rule 2229(b) since (1) the tortfeasor and UIM insurer may be "separately" liable to the plaintiff, that is, the tortfeasor up to the liability coverage limits and the UIM carrier for any amount in excess of the liability coverage, (2) both claims arise out of the same occurrence, and (3) both claims involve common questions of fact or law affecting the liabilities of the tortfeasor and UIM insurer.

In so ruling, Judge Nealon emphasized that Rule 2229(b) does not require the tortfeasor and UIM carrier to be jointly and severally liable in that it uses the disjunctive "or" in the phrase "right to relief jointly, severally, separately or in the alternative...." [Emphasis added here].

After reviewing the split of authority on the issue of consolidation vs. severance of claims from around the Commonwealth, as well as the split of authority on the issue in his own County of Lackawanna, Judge Nealon came down on the side of allowing for the consolidation of such claims.

As for the evidentiary issue(s) involving insurance that may come into play when a consolidated case of a third party claim and a UIM claim reaches trial, Judge Nealon concluded that that issue was a matter for the presiding trial judge rather than a matter to be decided at the preliminary objections stage in the case before him.

Judge Nealon nevertheless went on to provide a thorough analysis of how the evidentiary issue has been discussed and/or handled by other courts, both in the Commonwealth of Pennsylvania and in other jurisdictions.  The Judge reviewed the different approaches adopted by other states i.e., trying the case as a tort case with the UIM insurer removed from the caption, but bound by the verdict, and insurance not referenced vs. allowing UIM insurance to be mentioned, but not on the issue of whether the tortfeasor "acted negligently or otherwise wrongfully," and considering such evidence as being "offered for another purpose" as permitted by Rule 411.

Ultimately, Judge Nealon decided that it should be the trial judge who could revisit the evidence of insurance issue closer to the time of trial and determine, again, at that time, whether the cases should remain consolidated for trial purposes. 

At this preliminary objections stage of the matter, the Bingham court felt that the better approach was to leave the cases consolidated for at least discovery purposes as a matter of judicial economy and to lessen the burden and expenses on the parties and the court.

While Judge Nealon ruled that the claims could be consolidated under one caption, he ultimately ruled that the cases should be severed under the venue issue presented in this matter.

Under the facts of the Bingham case, the accident occurred in Lehigh County and the tortfeasors were not residents of Lackawanna County and could not be served in Lackawanna County.

The Plaintiff filed the Complaint in Lackawanna County on account of the fact that the Plaintiff's UIM policy with Erie Insurance Exchange had a forum selection clause that required the lawsuit to be pursued in the county of the insured's domicile or residence (which was Lackawanna County). 

Judge Nealon noted that Erie's forum selection clause had been previously upheld as valid by the Pennsylvania Superior Court in the separate case of O'Hara v. First Liberty Ins. Corp., 984 A.2d 938 (Pa.Super. 2009) appeal denied, 995 A.2d 354 (Pa. 2010).

The Plaintiff argued that all of the claims could be pursued in Lackawanna County under the venue Rules of Civil Procedure (Pa.R.C.P. 1006(c)(1)) which essentially states that, where venue was good for one of the defendants, the other defendants could also be brought to suit in that same county.

However, Judge Nealon noted that Pa.R.C.P. 1006(c)(1) only applies in actions "to enforce a joint or joint and several liability," and because the UIM insurer could never be responsible for the full amount of the jury award, it could not be considered to ever be potentially jointly and severally liable with the tortfeasor(s).

Accordingly, the Judge sustained the venue preliminary objection asserted by the tortfeasor defendants, severed the tort and UIM claims, and transferred the tort action to Lehigh County and kept the UIM claim in Lackawanna County as per the forum selection clause.

In his Opinion, Judge Nealon went on to note that the court took no position as to whether the Plaintiff may thereafter attempt to coordinate his UIM claim in Lackawanna County with the tort claims in Lehigh County under the different standard applicable under Pa.R.C.P. 213.1(a) and (c).


Anyone desiring a copy of this thorough Opinion by Judge Nealon in the Bingham case may contact me at dancummins@comcast.net.

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