Tuesday, August 13, 2013

Another Decision in Favor of Severance of UIM and Bad Faith Post-Koken Claims in York County

In his recent decision in the case of Forry v. Erie Insurance Exchange, No. 2013-SU-1162-89 (C.P. York Co. July 15, 2013 Linebaugh, P.J.), President Judge Stephen P. Linebaugh of the York County Court of Common Pleas granted a Motion to Sever and Stay the bad faith claim filed Defendant, Erie Insurance Exchange in a combined UIM/bad faith litigation.  

The Court further ordered that all further pleadings, discovery, and trial of the bad faith claim was severed and stayed until after the Plaintiff’s claims for UIM benefits have been concluded by settlement or final verdict.  

In support of its argument, the carrier argued that severance was required to advance the interest of judicial economy and to prevent prejudice to the Defendant.  The carrier argued that, in terms of its prejudice argument, discovery in the bad faith claim may involve matters related to claims valuation, strategy, and analysis, none of which matters were germane or relevant to the underlying claim for UIM benefits.  

The Plaintiffs countered by arguing that discovery of all claims presented, in the presentation of evidence of all claims at the same time, was economical, convenient, and would prevent undue delay.  

The trial court noted that, while UIM claims are decided by a jury, bad faith claims in Pennsylvania state courts must be decided by a judge at a bench trial. 

In this matter, the Defendant wanted to ensure that the presentation of evidence of the bad faith claim would be separate from the presentation of the evidence of the UIM claim, as opposed to all of the evidence being presented during a jury trial with the trial judge disposing of the bad faith claim immediately following the jury reaching its verdict.  

Judge Linebaugh noted that the fact alone that the bad faith claim must be decided by the judge while the UIM claim would be decided by the jury did not convince the court that severance and a stay was appropriate.  

Rather, utilizing the discretion of the court and applying Pa. R.C.P. 213(b), the court felt that severance was appropriate.   In his Opinion, Judge Linebaugh reviewed a number of decisions on the same issues from around the Commonwealth, including decisions by Judge Wettick out of Allegheny County.  

In the end, Judge Linebaugh of York County sided on the split of authority in favor of severance of these types of claims.  

Anyone wishing to review the detailed opinion of Judge Linebaugh on this particular issue may contact me at dancummins@comcast.net.  I send thanks to Attorney John A. Statler of the Lemoyne, Pennsylvania law office of Johnson, Duffie, Stewart & Weidner.  

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