Wednesday, November 16, 2011

Pennsylvania Supreme Court to Address Delay Damages Issue From Post-Koken Case

Tort Talkers may recall that I previously reported on the Pennsylvania Superior Court decision in the post-Koken case of Marlette v. State Farm Mut. Automobile Ins. Co. and Jordan in which the issue was whether the delay damages calculation should be based upon the higher jury verdict or the lower figure that resulted after the verdict was molded down by the court to the amount of the available UIM limits.  That post can be viewed here.

In this case, the jury entered an award of $550,000 in favor of the injured party plaintiff and $150,000 in favor of the plaintiff's spouse on the loss of consortium claim.  In a post-verdict ruling the trial court molded the award downward to the available UIM policy limits of $250,000.

The Allegheny County trial court had also molded the verdict downward even further to $233,306.98, reflecting a credit due to State Farm by virtue of a previous payment made by the carrier in the amount of $16,693.02.

The plaintiffs requested delay damages on the $550,000 portion of the jury's verdict (the parties agreed that delay damages are not permitted with respect to loss of consortium claims under Pennsylvania law).  State Farm argued that the plaintiffs were not entitled to any delay damages because State Farm was only responsible to pay up to the UIM limits under the provision of the policy.

The trial court disagreed with both parties and awarded delay damages on the reduced figure of $233,30698.  The delay damages that were awarded did push the final verdict amount up to a number that was above the $250,000 UIM policy limits number.

On appeal, the Pennsylvania Superior Court held that the delay damages should have been calculated on the jury's verdict amount, i.e., $550,000.  The appellate court also ruled that the Plaintiffs could recover monies from the carrier over and above the UIM policy limits number.

The Superior Court's decision in Marlette v. State Farm and Jordan may be viewed online by clicking this link:

Now, under an Order dated November 7, 2011, the Pennsylvania Supreme Court has agreed to accept the appeal and will decide this issue after oral argument which still remains to be scheduled.  I will keep an eye out on this important case and will post any updates I come across.

Source:  "Justices Take Up Case on Molded Verdict Delay Damages" by Gina Passarella Pennsylvania Law Weekly (34 PLW 1043)(Nov. 15, 2011).

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