Monday, March 18, 2019

Scope of Allowable Bad Faith Discovery Limited by Western District Federal Court of Pennsylvania


In the case of Horvath v. Globe Life & Accident Ins. Co., No. 3:18-CV-84 (W.D. Pa. Feb. 28, 2019 Gibson, J.), the court denied a Plaintiff’s Motion to Compel a Defendant carrier in a bad faith claim to identify all bad faith suits in which it was involved over the preceding ten (10) years.  

In denying this Motion to Compel by the Plaintiff, the court essentially ruled that the other, prior bad faith claims were irrelevant to the case at hand.   Judge Gibson found that there was no close “connection between other bad faith claims against Defendant and the issue of materiality here, particularly considering the myriad of potential factual differences between other claims and the present claim, including different types of policies, unique policy language, the application of different states’ law, [and] varying circumstances surrounding the bad faith allegations…..” 

Judge Gibson additionally noted that “the general rule [is] that courts in the Third Circuit ‘disfavor the discovery of similar claims evidenced in bad faith cases.’”  

The court additionally denied this Motion to Compel evidence of ten (10) years of prior bad faith actions as overbroad and unduly burdensome given that there was no geographic limit, no limit to the type of insurance policy at issue, no valid explanation as to why a ten (10) year period was required or why a shorter period would be inadequate.  

Anyone wishing to review this decision may click this LINK.  


I send thanks to Attorney Lee Applebaum of the Fineman, Krekstein & Harris law firm in Philadelphia for bringing this case to my attention.   Check out Attorney Applebaum’s excellent blog entitled Pennsylvania and New Jersey Insurance Bad Faith Case Law blog.   

Lehigh County Trial Court Refuses to Open Default Judgment


In the case of Cruz v. The Midwives & Assoc., Inc., No. 2017-C-3103 (C.P. Leh. Co. Dec. 3, 2018 Johnson, J.), the court ruled that the Defendants were not entitled to open a default judgment where their failure to timely file a responsive pleading was not excusable.   

In this matter, after the filing and service of a Writ of Summons and a Complaint, the Defendants failed to file a responsive pleading.   The Plaintiff then issued a 10-Day Notice of Intent to Enter a Default and, when the Defendant did not file any pleading, the Plaintiff entered a default judgment.  

The court noted that the Defendant did not file a Petition to Open a Default Judgment until twelve (12) days later.  

The court noted that, under Pa.R.C.P. 237.3(b)(2), if a Petition to Open a Default Judgment is filed within ten (10) days after the entry of the default judgment, the court “shall” open the judgment if the proposed Answer states a meritorious defense. 

Where, as here, a Petition to Open a Default Judgment is filed more than ten (10) days after the entry of a default judgment, the court will only exercise its discretion to open the judgment if (1) the petition has been promptly filed, (2) a meritorious defense has been shown, and (3) the failure to appear or respond can be excused.   

Here, the court found that Defendants’ Petition to Open the Judgment was promptly filed and that a meritorious defense had been stated.  

However, the court determined that the Defendants’ failure to file an Answer could be not excused under the circumstances presented.   Here, the Defendant admitted that they were aware that they were not covered by insurance at the time of the subject incident such that the Defendant knew that no insurance company would provide it with an attorney.   The court also noted that the Defendant did not take any action even after receiving the 10-Day Notice.   It was indicated that the Defendants only sought out legal counsel after the default was entered.  

As such, the court found that the circumstances of this case did not amount to any mere oversight or an unintentional omission to act.   Rather, the Defendants were found to have received multiple notices informing them of their obligation to participate in the case and the consequences for failing to do so.  Despite these notices, the Defendants did not act or file an Answer to the Complaint.  

As there was no reasonable excuse or explanation provided by the Defendants for failing to respond to the Complaint, the court denied the Defendants’ Petition to Open the Default Judgment.  

Anyone wishing to review a copy of this case may click this LINK.

Source:  “Digest of Recent Opinions.”  Pennsylvania Law Weekly (Feb. 26, 2019).  

Thursday, March 14, 2019

Judge A. Richard Caputo of Federal Middle District Court of Pennsylvania Addresses Proper Pleading of Bad Faith Claims in Two Separate Decisions

In the cases of Clarke v. Liberty Mutual Insurance Company, No. 3:18-CV-1925 (M.D. Pa. Feb. 11, 2019 Caputo, J.), and Moran v. USAA, No. 3:18-CV-2085 (M.D. Pa. Feb. 14, 2019 Caputo, J.), the court again addressed refiled Motions to Dismiss Bad Faith Claims and granted the same, thereby dismissing these cases with prejudice.  It is noted that the Complaints in these two (2) cases were previously dismissed by Judge Caputo without prejudice and the Plaintiff was granted leave to amend.   In these most recent decisions, the cases were both ended by the court’s decision in favor of dismissal.  

In the case of Clarke v. Liberty Mutual Insurance Company, the court confirmed that a discrepancy between the alleged damages and the carrier’s evaluation alone does not amount to bad faith.   

More specifically, the Plaintiffs alleged that, since the Plaintiff’s medical bills totaled over $39,000.00 and given that the Plaintiff may require additional injections in the future, the Defendant carrier was alleged to have engaged in bad faith in concluding that the claim fell within the $15,000.00 third party settlement.  

The court followed previous decisions in which it had been held that alleged “low-ball” offers alone cannot support a claim for bad faith.  Rather, a Plaintiff must allege factual allegations to show why the alleged “low-ball” offer was actually unreasonable and how the carrier knew or recklessly disregarded the fact that it was unreasonable.  

Finding that such claims were not made in the Clarke case, the court granted the Motion to Dismiss.  

A similar ruling was entered by Judge Caputo in the Moran v. USAA case where he again found that a discrepancy in the evaluation of the claim alone does not get around the issue of the Plaintiff pleading a bad faith claim in a conclusory fashion.  

Anyone wishing to review a copy of the Clarke decisions may click this LINK.\

The Moran decision can be viewed HERE.

I send thanks to Attorney Brigid Q. Alford of the Camp Hill, Pennsylvania office of Marshall, Dennehey, Warner, Coleman and Goggin for bringing this case to my attention.  

Wednesday, March 13, 2019

Negligent Entrustment and Punitive Damages Claims In Case of Driver With Only a Learner's Permit (Cell Phone Use Also Alleged)


In the case of Robinson v. Marett, No. 10672 of 2018, C.A. (C.P. Lawrence Co. Dec. 20, 2018 Motto, P.J.), the court overruled the Defendants’ Preliminary Objections regarding issues of negligent entrustment and punitive damages in a motor vehicle accident case.  

The Defendants’ preliminarily objected to the Plaintiff’s Complaint asserting that the claim for negligent entrustment was legally insufficient because there was no evidence to establish that the driver was incompetent to operate the vehicle when it was entrusted to him by the owner of the vehicle.   

The Plaintiffs had alleged that the owner had allowed the driver to operate the vehicle when the driver only had a learner’s permit and was not supervised by an adult family member.   The Complaint additionally asserted that the driver was distracted by his use of a cell phone or other electronic device, was operating the vehicle at a high rate of speed, and was following the vehicle ahead too closely.  

The court ruled that these allegations were sufficient to support a claim for negligent entrustment because, under these circumstances alleged, the owner should have known the risk to others by allowing an unlicensed and unsupervised driver to operate the vehicle.  

The Defendant driver and owner had asserted that the driver had a driver’s license at the time of the accident such that the negligent entrustment claims should be rejected.  However, the court noted that this argument required the court to consider facts that were not contained within the Complaint, which was impermissible when deciding Preliminary Objections. The court noted that the Defendants could make this argument again by way of a summary judgment motion but reiterated that such an argument could not be the basis for allowing a Preliminary Objection.  

The Defendants additionally asserted that the Plaintiff’s allegations of recklessness should be stricken as scandalous or impertinent, because the Plaintiffs had no basis for recovering punitive damages under the facts alleged.  

The court rejected this argument after finding that the Plaintiffs had alleged sufficient facts from which a jury could conclude that the driver acted outrageously. These allegations indicated that the driver was not properly licensed and was not being attentive to other vehicles on the roadway at the time of the accident.  

As such, the Defendants’ Preliminary Objections were overruled and the Plaintiff's negligent entrustment claims were allowed to proceed.  

Anyone wishing to review a copy of this decision may click this LINK.

Source:  “Digest of Recent Opinions.”  Pennsylvania Law Weekly (Feb. 26, 2019).

Tuesday, March 12, 2019

Additional Cases for Facebook Discovery Scorecard


I was recently made aware of the below older Facebook Discovery/Admissibility cases

These cases have been added to the Facebook Discovery Scorecard on the Tort Talk Blog and which can always be freely accessed by going to www.TortTalk.com, scrolling down the right hand column and clicking on the date below the title "Facebook Discovery Scorecard."

One of the benefits of the Facebook Discovery Scorecard is that you can click on the case names on the Scorecard to be linked to the actual Opinions or Orders.  I have set up the below cases in the same regard, i.e., you can click on the case name to go to the decision online.

The cases are, as follows:

Hanna v. Giant Eagle, Inc.2016 U.S. Dist. LEXIS 107253 (W.D. Pa. 2016 Mitchell, J.)(Court precludes unfettered access to Plaintiff's social medial account).


Bryant v. Wilkes-Barre Hosp. Co., LLC, 2016 LEXIS 87103 (M.D. Pa. 2016 Mannion, J)(Court allows admission of Facebook posts to challenge Plaintiff's credibility at trial).


I send thanks to Attorney Brian J. Murren of the Camp Hill,  PA office of Marshall, Dennehey, Warner, Coleman & Goggin for bringing these cases to my attention.

Monday, March 11, 2019

Mere Registration by a Business in Pennsylvania Sufficient to Establish Jurisdiction


In the case of Youse v. Johnson & Johnson, No. 18-3578 (E.D. Pa. Jan. 16, 2019 Baylson, J.), the court denied a Motion to Remand and denied a Motion to Dismiss filed by a Defendant on jurisdictional grounds.  

The court ruled that general jurisdiction by consent may be established where a Defendant’s only contact with Pennsylvania is the Defendant's registration within the state to do business.  

Judge Baylson noted that, until the United States Supreme Court or the Third Circuit Court of Appeals addresses the issues of general jurisdiction by consent or registration, he was bound by existing Third Circuit precedent to deny the motions at issue.  

Anyone wishing to review a copy of this case may click this LINK.

I send thanks to Attorney James M. Beck of the Philadelphia office of the Reed Smith law firm for bringing this case to my attention.  Attorney Beck is also the writer of the excellent Drug and Device Law blog.  


Thursday, March 7, 2019

Call For Mock Trial Jurors for the Regional Finals - To be Held March 12th 6 pm in Monroe County Courthouse


The Mock Trial Competition in northeastern Pennsylvania is looking for volunteers for the Mock Trial Regional Competition being held on Tuesday March 12, 2019 at 6:00 PM in the Monroe County Courthouse in Stroudsburg, PA.

The winner of the Lackawanna County Mock Trial Competition will take on the winner of the Poconos Mock Trial Competition.

The Finals of the Lackawanna Mock Trial Competition is tonight at the Federal Courthouse in Scranton, PA.  Contact the Lackawanna Bar Association if you wish to serve as a juror.

If you would like to volunteer for the Regional Final at the Monroe County Court house set for next Tuesday, March 12th, please confirm with Ms. Perkins below no later than Monday March 11, 2019 at 2:00 PM:

Mecca Perkins
Event Coordinator/Administration Assistant
Monroe County Bar Association
913 Main Street
Stroudsburg PA 18360
570.424.7288
Fax: 570.424.8234

Plaintiff Found to "Occupy" Motorcycle Even After Ejected From It During Accident (Non-Precedential Decision)



In the case of Petra v. Pennsylvania Nat’l Mut. Ins. Co., No. 505 MDA 2018 (Pa. Super. Jan. 16, 2019 Ott, J., McLaughlin, J., Ford Elliot, P.J.E.) (Non-precedential Op. by McLaughlin, J.), the court ruled that an exclusion in an auto insurance policy precluded coverage of a motorcyclist’s claims for injuries he suffered when he collided with another driver’s motorcycle.   The court found that the motorcyclist was “occupying” the motorcycle even after colliding with the car and becoming separated from his motorcycle.  

According to the Opinion, the Plaintiff was operating his motorcycle when he was involved in an accident with another car and was ejected from the motorcycle and hit the ground. No other vehicles were involved in the accident.  

The Plaintiff insured his motorcycle under a policy under which he had rejected uninsured and underinsured motorist coverage.

At the time of the accident, the Plaintiff motorcyclist also owned a minivan that was insured with Penn National Insurance Company.  

The Plaintiff sued Penn National to recover UIM benefits under that policy that separately covered the Plaintiff's minivan.  

The case came before the court by way of a Motion for Summary Judgment. 

Under the Penn National policy issued to the Plaintiff’s minivan, it was provided that the policy would not provide UIM coverage for bodily injury sustained by the Plaintiff while “occupying,” or when struck by, any motor vehicle you owned which is not insured for this coverage under this policy.   The policy defined “occupying” to mean “in, upon, getting in, on, out or off.”  

The Plaintiff argued that the exclusion in the Penn National policy did not preclude coverage because he was not “occupying” a non-insured motor vehicle, i.e., his motorcycle, at the time he was injured.   Rather, the Plaintiff asserted that some of his injuries were sustained while he was in physical contact with the motorcycle and some other injuries occurred after he became separated from the motorcycle, i.e., when he was not occupying the motorcycle.

The court rejected the argument that the Plaintiff was not occupying his motorcycle at the time he was injured.  The Superior Court noted that “[s]egmenting the accident under [the Plaintiff’s] analysis would create an absurd result.”   The court additionally found that the argument put forth by the Plaintiff was “not persuasive.”  

Pointing out that the Plaintiff had stipulated that this matter involved a single accident and that there were no intervening or superseding accidents, the Superior Court ruled that, construing the “unambiguous terms” of the exclusion in the Penn National policy supported a conclusion that the Plaintiff suffered bodily injury while occupying his motorcycle, a vehicle not covered by the policy.   The court concluded that the Plaintiff occupied his motorcycle from the moment of impact with the tortfeasor’s vehicle, through the ejection, and until his body came to a rest on the ground.  

As such, the Plaintiff was determined not to be entitled to recover UIM benefits.  

As a parenthetical, it is noted that this decision was decided before the Pennsylvania Supreme’s Court’s decision invalidating the household exclusion in the case of Gallagher v. Geico.   It remains to be seen what, if any impact the Gallagher decision will have upon this case or the court's decision.  

Anyone wishing to review a copy of decision in the case of Petra may click this LINK. 


Source: “Court: Motorcyclist as ‘Occupying’ Motorcycle Even After Colliding with Car” by Steven A. Meyerowitz, The Legal Intelligencer (Feb. 1, 2019). 

Tuesday, March 5, 2019

Welcome News Regarding Citation to Unpublished Decisions Marked As Non-Precedential By Pennsylvania Superior Court


Pursuant to amendments to Pa.R.A.P. 126, effective May 1, 2019 and going forward, judges and litigators will be permitted to cite to all Pennsylvania Superior Court memorandum opinions as persuasive precedent on the issues presented. 

As the amendments to Pa.R.A.P. 126 are not retroactive, previous memoranda opinions issued by the Pennsylvania Superior Court still cannot be cited as precedential. 

As such it is important to remember to look at the date of any unpublished Superior Court opinions and to make sure that the date of the opinion is on or after May 1, 2019 in order to determine if it can be cited as a supporting legal authority.

The Rule provides that, if such an unpublished, non-precedential decision is cited, the litigator “shall” include a parenthetical immediately following the citation indicating the value of the decision, i.e., that it was an unpublished decision that was marked non-precedential.  See Pa.R.A.P. 126(a).

The exact language for that parenthetical was not provided in the amended Rule but elsewhere in the Rule it is indicated that non-precedential decisions “may be cited for their persuasive value.”  See Pa.R.A.P. 126(b)(2).

The Rule also mandates that litigators “shall” attach to the filing a copy of any unpublished, non-precedential decisions cited within the filing.  Pa.R.A.P. 126(a).

Under the Commentary to the Rule, it is indicated that litigators are encouraged to also cite to the Westlaw and/or Lexis citation for any unpublished opinions that are cited. 

The Commentary additionally notes that opinions of the appellate courts are all posted online at http://www.pacourts.us.   That website has search and filtering options to utilize in searching for relevant decisions of the appellate courts.

Commonwealth Court rules regarding citation to its unpublished opinions, which has been allowed by that court since as far back as 2008, were also formally adopted in these amendments and were not changed in any way.

The Commentary to the amended Pa.R.A.P. 126 also offers some interesting points.

For example, the Commentary confirms that litigators and courts need only to cite to the national reporters and that parallel citations to local reporters are not required.  That is, litigators need only to list the A., A.2d or A.3d citations and not the parallel Pa. or Pa. Super. citations as well.

Also, the Commentary notes that litigators are encouraged to cite to the specific pages in any decisions cited that are relevant to the legal point put forth.

Anyone wishing to review the amended Pa.R.A.P. 126 may click this LINK.


I send thanks to Attorney Jim Beck of the Philadelphia office of the Reed Smith law firm for bringing this notable development to my attention. 


Standards For Meeting $75,000 Requirement To Remove Case to Federal Court



In the case of Hutchinson v. State Farm Fire & Cas. Co., No. 18-CV-2588 (E.D. Pa. Jan. 28, 2019 Goldberg, J.), Judge Mitchell S. Goldberg set out useful examples and principles regarding the removal of statutory bad faith claims to the federal court.  

Essential issue in this regard is the degree of certainty required to measure claims made against the federal court jurisdictional requirement that a case has a value of at least $75,000.00.   What follows are some of the examples and principles identified by the court:

1. The sum at issue is determined relative the time the Petition to Remove the Matter Federal Court is filed.

2.  The courts do not look at the low end of an open-ended claim. To the contrary, the test is “a reasonable reading of the value of the rights being litigated.” 

3.  Punitive damages and attorneys’ fees may be considered in statutory bad faith cases.

4. There is no recovery cap on the punitive damages that attorneys’ fees available under the bad faith statute. (However, the attorneys’ fees must reasonable and the U.S. Supreme has placed limits on punitive damages to conform to due process of law requirements).

5.  In a bad faith case, the “amount in controversy exceeds the $75,000.00 threshold where a Plaintiff is able to recover a specified amount of damages, plus punitive damages and attorneys’ fees…”

In this case, where the Plaintiff’s claim was for specified damages of $24,711.11 plus punitive damages was found to meet the $75,000.00 jurisdictional threshold.  

The court otherwise noted that, in contrast, a failure of a Plaintiff to plead specified unpaid benefit amounts in a bad faith claim works against a decision to allow for the removal of the case to federal court.  

The court noted as examples two (2) cases in which the action was remanded where a Plaintiff pled lost benefits in “an amount not in excess of $50,000.00” and punitive damages “not in excess of $50,000.00.”

It is noted that, in this Hutchinson case, although the $75,000.00 jurisdictional threshold was found to have been met, the court still remanded the action back to state court because the removal was untimely.  As such, the carrier’s efforts to remove the case to federal court were denied.   

Anyone wishing to review a copy of this case may click this LINK.

I send thanks to Attorney Lee Applebaum of the Philadelphia law offices of Fineman, Krekstein & Harris for bringing this case to my attention.  Please be sure to check out Attorney Applebaum’s excellent blog entitled the Pennsylvania and New Jersey Insurance Bad Faith Case Law blog. 


Monday, March 4, 2019

Can You Help By Serving as a Mock Trial Juror?



Below are the dates for the Mock Trial Competition in LACKAWANNA COUNTY and information on how to register to serve as a Juror.  Many attorneys are needed to fill many Jury Boxes on these last few dates for the Competition in Lackawanna County.  Can you help?


Trial Dates:
Semi-Finals
Tuesday, March 5, 2019 at 6:00 p.m.

Finals
Thursday, March 7, 2019 at 6:00 p.m.

Locations to be determined 
Either Lackawanna County Court of Common Pleas 
or
William J. Nealon Federal Courthouse in Scranton

Please contact Ryan Campbell, Esq. at
hrlaw04@gmail.com
or
Katie Munley, Esq. at knealon@munley.com 



To Volunteer or for more information.

Friday, March 1, 2019

Mock Trial Jurors Needed For Final Rounds of Competition



Below are the dates for the Mock Trial Competition in LACKAWANNA COUNTY and information on how to register to serve as a Juror.  Many attorneys are needed to fill many Jury Boxes on these last few dates for the Competition in Lackawanna County.  Can you help?


Trial Dates:
Semi-Finals
Tuesday, March 5, 2019 at 6:00 p.m.

Finals
Thursday, March 7, 2019 at 6:00 p.m.

Locations to be determined 
Either Lackawanna County Court of Common Pleas 
or
William J. Nealon Federal Courthouse in Scranton

Please contact Ryan Campbell, Esq. at
hrlaw04@gmail.com
or
Katie Munley, Esq. at knealon@munley.com 



To Volunteer or for more information.

Third Circuit Court of Appeals Affirms Judgment in Favor of Ski Resort (Not Precedential)



In the case of Vu v. Ski Liberty Operating Corp., No. 18-1769 (3d Cir. Feb. 12, 2019 Chagares, Bibas, Sanchez, JJ.) (Op. by Chagares, J.)(Listed as "Not Precedential"), the court entered judgment in favor of a Defendant in a skiing accident case. 

The court ruled that, under the Skier’s Responsibility Act, ski resorts have no duty to protect skiers from the inherent risk of the sport.   The court noted that losing control and skiing off the side of a trail is an inherent risk of skiing.  Under the law, inherent risk need not be natural conditions on the ski slope.  

The court otherwise found that the Plaintiff failed to identify any particular industry standard that the Defendants violated.

As such, the court affirmed the entry of judgment in favor of the defense.  

Anyone wishing to review a copy of this case may click this LINK.

I send thanks to Attorney James M. Beck of the Philadelphia office of the Reed Smith law firm for bringing this case to my attention.  Attorney Beck is also the writer of the excellent Drug and Device Law blog which can be viewed HERE,

Thursday, February 28, 2019

Reckless Allegations and Punitive Damages Claims Allowed to Proceed Against Tractor Trailer Defendant


In the case of Kuehner v. Abdulqader, No. 2018-CV-4215 (C.P. Lacka. Co. Feb. 15, 2019 Nealon, J.), the court addressed Preliminary Objections filed by a trucking Defendant seeking the dismissal of allegations of “gross, wanton, and reckless conduct” along with the accompanying claims for punitive damages as set forth in the Plaintiff’s Complaint.  

After reviewing the standard of review for a demurrer, the court ruled that the Defendant’s Preliminary Objections were overruled.

The court noted that the Plaintiff asserted that she was operating a vehicle and making a left hand turn when the Defendant tractor trailer driver drove his vehicle into the Plaintiff’s lane of travel and caused the injury and allegedly serious personal injuries to the Plaintiff.   

Among the more specific allegations asserted by the Plaintiff in support of claims of gross, wanton, and reckless conduct included allegations that the tractor trailer driver was operating his vehicle when he was so fatigued so as to make it unsafe for him to operate his vehicle in violation of federal code provisions, operating his vehicle in excess of the applicable hours of service allowed under the federal code, and operating his vehicle in conscious disregard of his fatigued condition.

The Plaintiff also alleged that the tractor trailer driver was reckless by failing to document his travel in daily logs as required by law, including the Federal Motor Carrier Safety Regulations, and failure to observe proper rest and driving intervals as required by the same law.   

Reviewing the Complaint as a whole and in the light most favorable to the Plaintiff, the court overruled the Preliminary Objection asserted in the nature of a demurrer.   

The court noted that the defense retained the right to revisit the issue after the conclusion of discovery by way of a Motion for Summary Judgment.  

Anyone wishing to review a copy of this decision may click this LINK.

I send thanks to Attorney Kevin Conaboy for bringing this decision to my attention.  

Reckless Conduct Allegations and Punitive Damages Claims Allowed to Proceed in DUI Civil Litigation


In the case of Santiago v. Yates, No. 2018-CV-4504 (C.P. Lacka. Co. Feb. 14, 2019 Nealon, J.), the court reviewed various Preliminary Objections filed by a Defendant in a motor vehicle accident case.  

In particular, the Defendant filed Preliminary Objections against the Plaintiff’s allegations of the Defendant’s alleged reckless operation of his vehicle while under the influence of alcohol and a controlled substance along with the Plaintiff’s request for punitive damages.   

The Plaintiff additionally alleged that she was not bound by her Limited Tort selection and instead was entitled to Full Tort coverage under an exception to the rule pertaining to a conviction of the defendant driver for driving under the influence of alcohol and/or a controlled substance.  

The Defendant demurred to the claim for punitive damages on the grounds of legal insufficiency.   The Defendant also requested a dismissal of the Plaintiff’s allegations of recklessness due to an alleged lack of factual support for those allegations. 

The Defendant also moved to strike any references to the Defendant’s driving under the influence of alcohol and a controlled substance on the basis that those allegations allegedly contained “scandalous and impertinent matter.”

Judge Terrence R. Nealon
Lackawanna County

In denying these Preliminary Objections, Judge Nealon noted that the Pennsylvania appellate and trial courts have “uniformly recognized the viability of a punitive damages claim against a motorist who causes an accident and personal injury while driving under the influence of alcohol or a controlled substance.   Reviewing and accepting the Plaintiff’s allegations as true in this matter as required by the standard of review, the court denied the Defendant’s various Preliminary Objections.  

The court also noted that the allegations of driving under the influence assumed a greater significance in this case given that the Defendant’s conviction in the criminal courts transformed the Plaintiff’s Limited Tort status to Full Tort status under the applicable law.  

As such, the court additionally rejected the claim that the allegations at issue amounted to scandalous and impertinent allegations.   To the contrary, the court found that the allegations pertaining to the Defendant’s driving under the influence were sufficient to support the Plaintiff’s claims for punitive damages based upon the Defendant’s alleged reckless conduct.  

As stated, the Defendant’s Preliminary Objections were overruled in their entirety. 

Anyone wishing to review a copy of this decision may click this LINK.

Wednesday, February 27, 2019

Denial of Benefits Must Be Alleged to Pursue Section 8371 UIM Bad Faith Claim

In the case of Buck v. Geico, No. 18-5148 (E.D. Pa. Jan. 23, 2019 DuBois, J.), the court granted the carrier’s 12(b)(6) Motion to Dismiss the Plaintiff’s Bad Faith Claim but granted the Plaintiff leave to file an Amended Complaint.  

This case arose out of a motor vehicle accident and a UIM claim.  

In this case, the carrier disagreed with the Plaintiff’s contention as to the liability issues.   The carrier initially concluded that the collision was 100% the insured’s fault, but thereafter, after receiving some surveillance information, altered the liability assessment to agree that the Plaintiff was comparatively negligent but not in the majority.  

The carrier contended the Plaintiff’s Complaint should be dismissed for failure to state a claim upon which relief may be granted because the Plaintiff did not allege a denial of benefits under an insurance policy as required by the bad faith statute found at 42 Pa. C.S.A. §8371. 

In response, the Plaintiff presented two (2) arguments. First, the Plaintiff asserted that he did not need to allege a denial of benefits to state a cause of action for insurance bad faith under §8371.   More specifically, in addition to asserting that §8371 does not require a denial of benefits in order for a Plaintiff to state a cause of action for bad faith, the Plaintiff also contended that the carrier’s investigative practices and faulty conclusions based upon egregious investigative inaction supported a cause of action under §8371 in any event.  

As a second basis, the Plaintiff asserted that he was indeed denied benefits of purchasing an insurance policy.  More specifically, the Plaintiff asserted that, after the subject accident, the carrier significantly increased the insurance premiums on the Plaintiff’s vehicles and that, as a result, the Plaintiff was forced to seek alternative insurance from another company in an attempt to offset the increase premium. 

The court rejected both of the arguments set forth by the Plaintiff.  

The court rejected the first argument of the Plaintiff noted above.   The court stated that “the essence of a bad faith claim must be the unreasonable and intentional (or reckless) denial of benefits.”  See Op. at 4.   The court reiterated that Pennsylvania law makes clear that a claimed denial is essential to a bad faith claim.  Accordingly, the court concluded that the Plaintiff must allege a denial of benefits in order to proceed on the claim under §8371.   

In terms of the other types of alleged “benefits” that the Plaintiff asserted that he Defendant allegedly denied the Plaintiff, the court noted that none of those other concerns involved a refusal to pay proceeds under an insurance policy, which is also required to support a claim for bad faith.   

As such, the court dismissed the Plaintiff’s Complaint for failure to state a valid claim of bad faith.  As noted, however, the Plaintiff was granted the right to amend.  

Anyone wishing to review a copy of this decision may click this LINK.

I send thanks to Attorney Lee Applebaum of Fineman, Krekstein & Harris in Philadelphia for bringing this case to my attention.  Be sure to check out Attorney Applebaum's excellent Pennsylvnaia and New Jersey Insurance Bad Faith Case Law Blog.

Repeated Denials of the Same Insurance Claim Do Not Serve to Extend the Statute of Limitations in a Bad Faith Case

In the case of Feingold v. Brooks, No. 19-CV-0291, 2019 WL 415575 (E.D. Pa. Feb. 1, 2019 Tucker, J.), the court addressed the issue of the statute of limitations period in a bad faith claim.  

The court noted that the statute of limitations for a bad faith claim is two (2) years and that such a claim accrues with the initial coverage denial.  

Significantly, the court noted that repeated denials of the same claim are merely continuations of an already existing harm, and do not constitute new actionable events triggering a new statute of limitations period. 

The court noted that, only if the subsequent alleged act of bad faith is a separate, distinct, and unrelated incident as compared to the original bad faith denial can a new statute of limitations period begin to run.  

In this Feingold case, the alleged bad faith conduct occurred back in 2011.   The lawsuit in this matter was filed in 2019.  

In response to the Defendant’s Motion to Dismiss, this court did not accept the bald allegations by the Plaintiff that events had taken place and continued over a period of years up to the present day as a way around the statute of limitations.   The court otherwise noted that there were no facts alleged suggesting a basis for the claims falling within the limitations period.  

As such, the Complaint was dismissed without leave to amend.  

Anyone wishing to review a copy of this case may click this LINK..   

I send thanks to Attorney Lee Applebaum of the Philadelphia law firm of Fineman, Krekstein, & Harris, and also the writer of the excellent Pennsylvania and New Jersey Insurance Bad Faith Case Law blog, for bringing this case to my attention.  


Commentary:  

Some have suggested the Pennsylvania Supreme Court case of Erie Ins. Exch. v. Bristol, 174 A.3d 578 (Pa. 2017), in which it was held that the statute of limitations in an uninsured (UM) motorist case does not begin to run until there is an alleged breach of the insurance contract, i.e., the denial of a claim or a refusal to arbitrate, supports an argument that the UM/UIM statute of limitations is extended every time a UM or UIM settlement demand is rejected or denied.  Click HERE to view the Tort Talk post on the case and to secure a Link to that decision.

The law of this Feingold decision may come in handy to counter arguments that the statute of limitations in a UM or UIM claim can be continually extended by repeated denials by the carrier to meet the Plaintiff's settlement demands.  The Feingold case arguably supports the argument that the subsequent denials of payment could be viewed as extensions of the original denial of the UM or UIM claim.