Thursday, December 27, 2012

The 2012 TORT TALK TOP 10


As another year winds down to an end, here's a look back at some of the top cases and trends of the year in the 2012 TORT TALK TOP 10:

10.  Recklessness Not Covered by Exculpatory Clauses

In its decision in Tayar v. Camelback Ski, 47 A.3d 1190 (Pa. 2012), the Pennsylvania Supreme Court held that it was against public policy to release reckless behavior in a pre-injury exculpatory clause. The court more specifically found that a ski resort's release form attempting to release the resort and its employees for liability for reckless conduct was invalid  Click HERE for more info on that case.

9.  Error in Judgment Defense Under Fire

The Pennsylvania Supreme Court agreed to review the case of Passarello v. Grumbine, 29 A.3d 1159 (Pa.Super. 2011), appeal granted, 44 A.3d 654 (Pa. 2012), to address whether medical malpractice defendants may continue to rely upon an "error in judgment" defense at trial.

Under an application of the "error in judgment" defense, the trial courts instruct jurors at trial that "physicians who exercise the skill, knowledge and care customarily exercised in their profession are not liable for a mere mistake in judgment."

This defense was first found to be invalid in the Superior Court case of Pringle v. Rapaport, 980 A.2d 159 (Pa.Super. 2009). In its more recent decision in Passarello, the Superior Court held that its previous ruling in Pringle could be applied retroactively.

Now, the issue is proceeding up to the Pennsylvania Supreme Court in Passarello for further review. The Supreme Court's decision in this regard could have a substantial impact on the defense of medical malpractice cases in the future.

  8.  Regular Use Exclusion Upheld (Again)

Over the past year, the Superior Court rebuffed several attempts by the plaintiffs bar to overturn the regular use exclusion, which upholds the all-American principle that "you can't get something for nothing."

The regular use exclusion typically comes into play where an injured party is injured in an accident while operating a vehicle that was not covered under the insurance policy that the injured party has made a claim against. The exclusion basically works to prevent an insurance company from being subjected to an additional risk of coverage for a vehicle for which the insurance company did not receive a premium or intend to insure.

Earlier this year, the Superior Court upheld a non-owned, regularly used vehicles exclusion in its nonprecedential decision in the case of Erie Insurance v. Soroka, No. 1086 M.D.A. 2011 (Pa. Super. March 8, 2012 Gantman, Allen, and Mundy, J.J.) (Memorandum by Mundy, J.).

In a September decision in the case of Adamitis v. Erie Insurance Exchange, No. 893 EDA 2010 (Pa. Super. Sept. 25, 2012 Stevens, P.J., Lazarus, J. and Colville, J.) (Opinion by Stevens, P.J.), the Superior Court revisited the regular use exclusion issue and again affirmed the validity and enforceability of that exclusion in an underinsured motorist coverage benefits case involving alleged injuries sustained by the claimant while driving at work.

In its more recent October 18 decision in the case of Rother v. Erie Insurance Exchange, No. 1770 MDA 2011, 2012 Pa. Super. 228 (Pa. Super. Oct. 18, 2012 Bowes, Ott, and Straussburger, JJ.) (Opinion by Bowes, J.), the Superior Court again upheld the validity of the regularly used, non-owned vehicle exclusion. 

The essential question in this case was whether the plaintiff was "regularly" using the subject vehicle in a way contemplated by the exclusion. The Pennsylvania Superior Court thoroughly reviewed the law pertaining to the test for regular use, i.e., "whether the use is regular or habitual," and found that the use of the vehicle was indeed regular under the facts of this case.

The court in Rother further stated that the application of the regular use exclusion to these facts did not violate any public policy grounds. To the contrary, the court found that the regular use exclusion has been repeatedly upheld on policy grounds, as that exclusion generally promotes the cost-containment policy under the MVFRL.

7.  UM/UIM Rejection Forms

Several decisions from the past year confirmed that, when it comes to rejection of UM/UIM forms, "the t's have to be crossed and thi i's have to be dotted."

The specific requirements for the language of a rejection of underinsured motorist benefits form are set forth under 75 Pa. C.S. §1731.

In its recent decision in the case of Jones v. Unitrin Auto and Home Insurance, No. 397 W.D.A. 2011 (Pa. Super. Feb. 6, 2012 Musmanno, Alan and Mundy J.J.), (Opinion by Mundy, J.) (Alan J. dissenting), the Superior Court held that insurance carriers must strictly comply with the mandates for the form utilized for an insured's rejection of UIM benefits during an application for automobile insurance.

Noting that the other prior analogous decisions have required that the subject form "specifically comply" with the requirements of §1731(c), the Superior Court in Jones found that, by adding a sentence to the form between the required language and the signature line, the Unitrin UIM rejection form did not "specifically comply" with §1731(c) as required by §1731 (c.1) and was, therefore, void.

It is noted that U.S. District Senior Judge Edmund V. Ludwig of the Eastern District of Pennsylvania relied upon Jones in ruling in Robinson v. Travelers Indemnity Co. of America, 2012 WL 677007 (E.D. Pa. Feb. 29, 2012), that the addition of even a single word to the mandated language rendered the rejection form void. In Robinson, the carrier had changed the waiver by simply adding the word "motorists" into the phrase "underinsured coverage" in the mandated language.

Thus, there can be no question that strict compliance with the statutory mandates for UM/UIM rejection forms is required.

6.  Negligent Infliction of Emotional Distress

In a decision that was actually handed down at the end of 2011, the Pennsylvania Supreme Court addressed the expanding parameters of the cause of action for negligent infliction of emotional distress (NIED).

By was of a Supreme Court split decision in the case of Toney v. Chester County Hospital, 36 A.3d 83 (Pa. 2011), the Superior Court's decision found at 961 A.2d 192 (Pa.Super. 2008), recognizing a new variation of the tort, was allowed to stand.

According to previous precedent on this issue, the courts initially required the tortfeasor to impact the victim physically to justify recovery for NIED (impact rule). Thereafter, the requirements to state an NIED claim expanded to allow the victim to be in close proximity of physical impact (zone of impact liability). The tort was then further extended to permit recovery if the victim personally witnessed a tortfeasor physically impact a close relative (bystander liability).  Now, with Toney, comes a fourth variation.

Under Toney, the Superior Court recognized a cause of action for negligent infliction of emotional distress exists where the emotional distress results from a "negligent breach of a contractual or fiduciary duty," absent physical impact or injury.

The Toney case involved a medical malpractice claim in which the plaintiff alleged that her medical providers had read an ultrasound during the plaintiff's pregnancy as being normal.

Unfortunately, the plaintiff's child was later born with several profound abnormalities. The plaintiff alleged that the defendants' negligence prevented her from preparing herself for the shock of witnessing her child's birth with such deformities. The Supreme Court's split decision on the case allowed the Superior Court's extension of the tort of NIED to stand.

5. Social Media Discovery

This a carry-over hot topic from last year's Tort Talk Top 10 list.  A slew of trial court opinions continue to come down on the issue of Social Media Discovery, particularly on the topic of whether personal injury defendants are entitled to view the private pages of a plaintiff's Facebook pages.

A split of authority has continued and, hopefully, an appellate court will be given an opportunity in 2013 to address the issue of whether such disclosures should be allowed under the liberal Rules of Civil Procedure pertaining to discovery. To review Social Media Discovery posts from over the past year, scroll through the Facebook Discovery Scorecard HERE.

Overall, the Pennsylvania trial court decisions handed down to date can be read as standing for the proposition that, where there is an initial threshold showing that discovery of the opposing party's private Facebook pages is likely to lead to the discovery of information pertinent to the claims or defenses presented, such discovery will ordinarily be allowed. 

This threshold showing may be made through admissions by the party at a deposition that the private pages may reveal pertinent information.  Another way to possibly make this threshold showing is by establishing that there is relevant information depicted on the public pages of the party's social media sites.

4. Barrick v. Holy Spirit Hospital

This is another carry-over from the 2011 Tort Talk Top Ten list.  In 2012, the Pennsylvania Supreme Court accepted the appeal in the case of  Barrick v. Holy Spirit Hospital  to address the issue of whether communications by an attorney to an expert retained by that attorney are discoverable.

By way of background, the Dauphin County trial court ruled in Barrick that these types of communications were indeed discoverable, particularly where an in camera review by the court of the written communications by the plaintiff's counsel with the plaintiff's medical expert confirmed that this contact from the attorney could have, in the words of the trial court judge, "materially impacted" the expert's formulation of his opinion.

On appeal, an original three-member panel of the Superior Court affirmed the trial court's decision that these types of communications by an attorney to an expert were discoverable. Then, on reargument, an en banc panel of the Pennsylvania Superior Court reversed and held that these communications were not discoverable.

In a one-page order filed by the Pennsylvania Supreme Court on August 31 granting allocatur, the Supreme Court noted that it will review the issue of "whether the Superior Court's interpretation of Pa.R.C.P. No. 4003.3 improperly provides absolute work-product protection to all communications between a party's counsel and their trial expert."

The Supreme Court's decision will be closely watched by civil litigators, as it could substantially impact how attorneys confer with their experts from this point forward.

3. Settlements and Medicare Liens

Here's another carry-over from the 2011 Tort Talk Top 10 list.  The issue of impact on Medicare Liens and settlements continued to come into play in 2012.

In 2011, both the Cambria County case of Vincent v. Buck, No. 2011-CV-456 (Cambria Co., April 4, 2011, Swope, S.J.), and the Monroe County case of Dailey-Console v. Barnwell, PICS Case No. 11-1115 (Monroe Co. May 18, 2011, Zulick, J.), the trial court judges relied upon the Zaleppa v. Seiwell, 9 A.3d 632 (Pa. Super. 2010)  decision to support a granting of a plaintiff’s motion to compel a defendant to pay a settlement over the Defendants’ objection that Medicare lien issues were not yet resolved.

In both decisions, the trial courts emphasized that there was nothing in the releases entered into between the parties that entitled the defense to insist that certain measures be taken by the plaintiff to ensure that the Medicare lien was addressed prior to the issuance of the settlement check. 

A similar trial court result from 2012 with an excellent analysis on the issue can also be found in Wimberly v. Katruska, PICS Case No. 12-1060 (C.P. Allegheny 2012).

In 2012, federal courts also jumped into the mix on the issue. In Carty v. Clark, 2012 U.S. Dist. LEXIS 98314 (E.D.Pa. 2012), U.S. District Judge Eduardo C. Robreno of the Eastern District of Pennsylvania granted a plaintiff's motion to enforce settlement after citing the clear terms of the release, which stated that, once the final demand letter was produced by the plaintiff from Medicare, as was accomplished in this matter, the settlement proceeds were to be released to the plaintiff.

Pennsylvania civil litigators have also been pointing to the District Court of New Jersey's unpublished decision in Sipler v. Trans Am Trucking, 2012 U.S. Dist. LEXIS 109278 (D.N.J. 2012), in which that court also ruled, in no uncertain terms, that a plaintiff's settlement could not be held up by Medicare lien or set-aside issues.

It seems that litigators on both the plaintiffs side and the defense side of the bar have welcomed these decisions clarifying the ability of parties to conclude personal injury matters despite existing Medicare liens.

2.  Pusl Overturned

Without a doubt, the most talked-about auto law opinion to come down over the past year was the Pennsylvania Superior Court's September 28 decision in the case of Smith v. Rohrbaugh, No. 91 MDA 2010, 2012 Pa. Super. 208 (Pa.Super. Sept. 28, 2012 Stevens, P.J., Bender, J., Panella, J., Donohue, J., Allen, J., Mundy, J., Olsen, J., Ott, J., and Wecht, J.) (Opinion by Ott, J.), in which that court took the rare step of reversing one of its notable earlier holdings.

In Smith v. Rohrbaugh, the Superior Court held that its previous decision in the case of Pusl v. Means, 982 A.2d 550 (Pa.Super. 2009), was wrongly decided and therefore overruled.

In Pusl, the Superior Court held that, where a plaintiff first obtained an underinsured (UIM) benefits recovery in a motor vehicle accident case from his or her own automobile insurance company, the defendant tortfeasor in the third-party liability lawsuit was entitled to a credit against the verdict up to the UIM amounts already received by the plaintiff.

The rationale behind this ruling was to prevent a double recovery by the plaintiff in violation of Pennsylvania's Motor Vehicle Financial Responsibility Law.

When the prior Pusl decision came down in 2009, it caused quite a stir and many litigators on both sides of the bar questioned the validity of the decision. As the auto litigation bar was anxiously awaiting a review of the Pusl case by the Pennsylvania Supreme Court, that court surprised many by denying allocatur, thereby leaving the Superior Court's decision as the rule of the land.

In the recent Smith v. Rohrbaugh case, the trial court applied a Pusl UIM credit against a jury's verdict entered against the tortfeasor defendant driver.

The plaintiff objected to this credit and appealed.

On appeal, the Superior Court in Smith noted that Pusl had been based, in part, upon the Superior Court's prior decision in the case of Tannenbaum v. Nationwide Ins., 919 A.2d 267 (Pa.Super. 2007), which pertained to the recovery of first-party benefits. However, the Superior Court decision in Tannenbaum had since been overruled by the Pennsylvania Supreme Court. Thus, a rationale underpinning the Superior Court's separate ruling in Pusl was eradicated.

In Smith, the Superior Court stated that the court in Pusl had correctly decided that a section of the Motor Vehicle Financial Responsibility Law, i.e., 75 Pa.C.S.A. Section 1722, prevented a double recovery of first-party benefits in motor vehicle accident matters. The court noted that UIM benefits are generally and colloquially considered to be first-party benefits because they come from the first-party carrier.

However, the Smith court found that the Pusl decision incorrectly equated UIM benefits with the type of first-party benefits that are specifically defined in the MVFRL by the legislature. Based upon a finding that the reasoning in Pusl was incorrect, it was held in Smith that the Pusl court had also incorrectly concluded that the Section 1722 prohibition against a double recovery of first-party benefits applied to UIM payments. The court found that to rule otherwise would represent an impermissible rewriting of the MVFRL.

As such, the Pusl credit no longer exists and it appears that a plaintiff may now, if desired, secure UIM benefits prior to proceeding on a claim against the third-party tortfeasor on the liability side.

It remains to be seen whether this case will be appealed up to the Pennsylvania Supreme Court and, if so, whether that court will grant allocatur to hear the appeal this time.

1.  Split on Proper Standard of Review for Products Cases

One of the most important, recurring issues over the past year has been whether the standard found in the Restatement (Second) of Torts or the different standard adopted in the Restatement (Third) of Torts should be utilized in products liability cases.

To date, the Pennsylvania Supreme Court has not squarely ruled upon this issue.  The Pennsylvania Federal Courts have issued conflicting decisions.

While the Restatement (Second) calls for a more narrow application of negligence principles in the products liability context, the Restatement (Third) decreases the emphasis upon the concepts of "intended use" and "intended user," along with placing a greater emphasis on the doctrine of "reasonable foreseeability," all of which changes arguably allow for a wider class of injured parties to recover against a manufacturer of a defective product.

It appears that litigators and the lower courts will have to continue to struggle with this issue until it reaches the Pennsylvania Supreme Court again.

For more information on the cases surrounding this issue, click HERE.

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