Thursday, December 30, 2021
Link to Compilation of COVID-19 Business Interruption Coverage Cases Nationwide
The University of Pennsylvania School of Law has been tracking COVID-19 Business Interruption Coverage cases on a nationwide basis. That compilation can be found at this Link:
Motion To Remand Denied in COVID-19 Business Interruption Coverage Case
According to the Opinion, the Plaintiff had initially filed the matter in a state court seeking a judicial declaration that their insurers were required to insure losses sustained by the Plaintiff as a result of the COVID-19 pandemic. The carrier removed the case to federal court and the Plaintiff moved to remand the case back.
The court noted that it was denying the motion in light of recent guidance from the Third Circuit Court of Appeals on the standard of review applicable to motions to remand as set forth in the case of DiAnoia’s Eatery, LLC v. Motorists Mut. Ins. Co., 10 F.4th 192 (3d Cir. 2021).
After reviewing the recent decision by the Third Circuit Court of Appeals, the federal trial court in this Greenwood declined to remand this declaratory judgment coverage action back to the state court where the federal court found that the case did not involve any novel issues of state law and where there was no parallel state proceeding pending. As such, the Plaintiff’s Motion to Remand was denied.
Anyone wishing to review a copy of this October 20, 2021 decision on the motion to remand may click this LINK.
Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (Nov. 18, 2021).
COVID-19 Business Interruption Coverage Claims by Medical Practice Dismissed by Pennsylvania Federal Court
In the case of Delaware Mgmt., LLC v. Continental Cas. Co., No. 2:20-CV-4309 (E.D. Pa. Nov. 11, 2021 Goldberg, J.), the court ruled that the insureds were not entitled to business interruption coverage for economic losses allegedly sustained due to COVID-19 Executive Orders where the coverage under the policy was only triggered by physical damage or loss of covered property. The court found that the Plaintiff had not pled any such damages or losses.
The court noted that the Plaintiffs’ facilities remained opened during the duration of the Executive Orders, although the operations of the business were limited. The court rejected the Plaintiffs’ interpretation of “loss” to include a partial loss of use of their facilities.
The court also rejected the Plaintiffs’ argument that the public fear of indoor establishments due to COVID-19 caused a “physical loss of or damage to” the property in order to trigger coverage. Rather, the court held that the physical loss of damage language in the policy required a tangible physical alteration of the property itself.
The court additionally ruled that the civil authority endorsement did not provide the Plaintiff with coverage as the endorsement required that the civil action be taken in response to any physical loss or physical damage. Because the Plaintiff had not alleged any such loss or damage to their property or to any nearby properties the court ruled that the Plaintiff could not rely upon the civil authority endorsement in this case.
Also, in footnote 1 of the Opinion, the court notably indicated that the University of Pennsylvania School of Law has been tracking these cases on a nationwide basis. That compilation can be found at this Link: https://cclt.law.upenn.edu/.
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Wednesday, December 29, 2021
Pennsylvania Supreme Court Limits the Reach of the Jurisdictional Long-Arm Statute Over Foreign Corporations
Pennsylvania State Capitol Building Home of the Pennsylvania Supreme Court |
In this matter, a Virginia resident filed an action in Pennsylvania against a Virginia corporation, under an allegation of injuries sustained in Virginia and Ohio.
The Plaintiff asserted that the Pennsylvania courts have general personal jurisdiction over the case based exclusively upon the fact that the foreign corporation registered to do business in Pennsylvania.
Anyone wishing to review a copy of the Majority Opinion of this decision may click this LINK. The Concurring Opinion by Justice Mundy can be viewed HERE.
Judge Robert D. Mariani of Federal Middle District Court Addresses Motion for Remand
In the case of Miller v. State Farm Mut. Auto. Ins. Co., No. 3:21-CV-1433-RDM (M.D. Pa. Dec. 14, 2021 Mariani, J.), the court granted a Plaintiff’s Motion to Remand a UIM breach of contract case back to the Lackawanna County Court of Common Pleas.
In this matter, the Plaintiff had UIM coverage with State Farm in the amount of $25,000.00 per person. In her Complaint, the Plaintiff demanded judgment against State Farm in an amount in excess of $50,000.00 plus interest, costs, and other such relief the court may deem appropriate.
Judge Mariani reviewed the removal statute and noted that this statute was required to be strictly construed, with all doubts to be resolved in favor of a remand.
The court additionally noted that the test for determining whether a case involved the requisite federal jurisdictional amount is whether, from the allegations in the pleadings, it is apparent, “to a legal certainty” that the Plaintiff cannot recover the amount claimed, or if, from the proofs, the court is satisfied to a like certainty that the Plaintiff never was entitled to recover that amount. See Op. at 3-4.
Judge Mariani also noted that the United States Supreme Court has long held that Plaintiffs may limit their claims in order to avoid federal subject matter jurisdiction.
The court also noted that, where a Complaint does not limit its request for damages to a precise monetary amount, the District Court must make an independent appraisal of the potential value of the claim.
Judge Robert D. Mariani M.D.Pa. |
Judge Mariani noted that it was alleged in the Complaint that the Plaintiff’s UIM policy provided UIM benefits in the amount of $25,000.00 per person. The court also emphasized that there was no companion claim for bad faith or punitive damages asserted in the Complaint. It was additionally noted that, relative to this Motion for Remand, the Plaintiff conceded that the Defendant’s only exposure was to $25,000.00 UIM policy limits.
The court rejected the defense argument that federal court jurisdiction had been met under the analysis that the tortfeasor had $100,000.00 in liability coverage which required the Plaintiff to prove her damages were in excess of that liability coverage in order to gain access to the UIM benefits, which necessarily placed the amount in controversy above the $75,000.00 jurisdictional requirement.
Judge Mariani stated that there was no case law in support of this argument. The court reiterated that the Plaintiff’s breach of contract recovery was restricted to the $25,000.00 limits set forth in her State Farm policy.
As such, where the court deemed that it appeared to a “legal certainty” that the Plaintiff could not recover the jurisdictional amount necessary to confer subject matter jurisdiction on this federal court, and given that the federal court is required to strictly construe removal statutes with all doubts to be resolved in favor of a remand, the decision was made to remand the case to the Lackawanna County Court of Common Pleas.
In a footnote at the end of his decision, Judge Mariani again emphasized “the importance of the fact that Plaintiff’s Complaint only alleges a claim for underinsured motorist benefits/breach of contract.” See Op. at p. 7, fn.3. In that same footnote, Judge Mariani stated that, “[i]f Plaintiff had included a claim for bad faith, the Court would find that remand was not appropriate.” Id.
Anyone wishing to review a copy of this decision may click this LINK.
Judge Mariani Remands Another Case Back to State Court
Making a U-Turn Back to State Court |
In the case of Blizman v. Travelers Home and Marine Ins. Co., No. 3:21-CV-1546-RDM (M.D. Pa. Dec. 9, 2021 Mariani, J.), the court granted a Plaintiff’s Motion to Remand a breach of contract and bad faith claim back to the state court.
According to the Opinion, the Plaintiff filed a Writ and served it upon the carrier.
The Complaint was then filed and sent to the defense lawyer. The Complaint was mailed to the insurance company.
Judge Mariani found that the Complaint had been served and that the timeline for removal was triggered on the date that the defense lawyer was served since the Writ was previously properly served and the defense attorney had previously entered his appearance.
In so ruling, the court reviewed the removal procedure set forth under 28 U.S.C. §1446 and noted that the removal statutes are required to be strictly construed with all doubts to be resolved in favor of a remand where appropriate.
Applying that law to the case before him, Judge Mariani ruled that the case should be remanded.
Anyone wishing to read this decision may click this LINK. The Court's companion Order can be viewed HERE.
Source of image: Photo by Patrick Doyle on Unsplash.
Tuesday, December 28, 2021
Appeal Dismissed Where Trial Court Order Did Not Dispose of All Claims or All Parties
The court dismissed the Plaintiffs’ appeal from an Order granting one Defendant's Motion for Summary Judgment as premature. The appeal was dismissed because the subject Order was found not to be a final Order where that Order did not dispose of all claims and/or all parties, and did not otherwise constitute an Order that was appealable under any of the other applicable exceptions or on an interlocutory basis.
The trial court requested that the Superior Court affirmed its decision in this regard.
Anyone wishing to review a copy of this decision may click this LINK.
Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (Dec.1, 2021).
Monday, December 27, 2021
THE 2021 TORT TALK TOP TEN
10. Regular Use Exclusion
In a case of appellate first impression of Rush v. Erie Insurance Exchange, No. 1443 EDA 2020 (Pa. Super. Oct. 22, 2021), the Pennsylvania Superior Court affirmed a Northampton County Common Pleas Court decision in a declaratory judgment action and held that the regular use exclusion found in motor vehicle policies is unenforceable because it violates the Motor Vehicle Financial Responsibility Law (MVFRL). This issue appears to be on its way up to the Pennsylvania Supreme Court.
Click HERE to view the Tort Talk Blog post on this case.
9. Attorney Malpractice
In the case of Clark v. Stover, 242 A.3d 1253 (Pa. Dec. 20, 2020), the Pennsylvania Supreme Court adopted the "occurrence rule" for attorney malpractice cases and held that the statute of limitations in a legal malpractice claim begins to run when the alleged malpractice occurs.
The court rejected the "continuous representation rule" which holds that the statute of limitations in a legal malpractice claim would begin to run when the legal representation was concluded.
Please click HERE to view the Tort Talk Blog post on this case.
8. COVID-19 Business Interruption Coverage Cases
Over the past year, many state and federal trial court judges grappled with coverage actions concerning whether the COVID-19 related governmental orders requiring businesses to close their doors supported Business Interruption coverage claims. There were mixed results, but a majority of the court decisions favored the insurance carriers with findings that the coverage provisions were not implicated and/or that exclusionary language within the policies were implicated.
To review Tort Talk Blog posts on these types of cases, please click HERE.
7. Sudden Emergency Doctrine Still Valid in PA
In the case of Graham v. Check, 243 A.3d 153 (Pa. Dec. 22, 2020)(Op. By Wecht, J.), the Pennsylvania Supreme Court reaffirmed the continuing validity of the sudden emergency doctrine for motor vehicle accident matters in Pennsylvania. However, the Supreme Court cautioned that the application should not be automatic and depends on appropriate facts being present for the doctrine to apply.
The Tort Talk Blog post on this decision can be viewed at this LINK.
My Pennsylvania Law Weekly article analyzing the impact of the Graham v. Check decision can be viewed HERE.
6. Medical Malpractice
In the case of Leadbitter v. Keystone Anesthesia Consultants, 256 A.3d 1164 (Pa. 2021), much to the surprise of many, the Pennsylvania Supreme Court issued a defense-favorable decision and held that Peer review "proceedings" or "records" were not discoverable under the Pennsylvania Peer Review Protection Act.
To view the Tort Talk Blog post on this case, please click this LINK.
5. Internet-Based Defamation Claims Can Be Filed Anywhere
In the case of Fox v. Smith, No. 39 EAP 2019 (Pa. Nov. 17, 2021) (Op. by Saylor, J.), the Pennsylvania Supreme Court addressed whether the standards governing the selection of an appropriate venue of litigating libel or defamation claims grounded on newspaper publications should also be applied to causes of action premised upon internet-based publications.
The Court ultimately ruled that internet-based defamation claims can be filed anywhere the defamatory statements were viewed and understood as defamatory.
The Tort Talk Blog post on this case can be viewed LINK.
4. Allegations of Recklessness
Over the past year, trial court judges across Pennsylvania, and some even in the same county, have split over the types of factual allegations that may or may not be necessary to support an allegation that a tortfeasor defendant acted recklessly during the course of a personal injury-causing event.
Some more liberal trial court judges allow for allegations of recklessness to be pled with reckless abandon and allow such allegations in any case whatsoever, regardless of the underlying facts involved. These judges rely upon dicta from one appellate court decision along with a tortured reading of the law to conclude that, since an allegation of recklessness is an allegation as to a defendant's state of mind and since allegations as to a party's state of mind may be generally pled under Pa.R.C.P. 1019, then it must be that allegations of recklessness may also be generally pled.
A majority of other trial court judges follow the long-standing maxim espoused in numerous Pennsylvania appellate court decisions that Pennsylvania is a fact-pleading state and that, therefore, allegations of outrageous facts are necessary to state a claim of recklessness to thereby potentially open the door to a punitive damages claim.
Look for my article in the upcoming January edition of the Pennsylvania Bar Quarterly outlining both sides of this issue and noting that further appellate guidance is needed to put the issue to rest.
To view at least 63 Tort Talk Blog posts on cases involving allegations of recklessness, please click this LINK.
3. Household Exclusion Finally Dead?
In 2020 and 2021, there remained questions as to whether the Household Exclusion was still a valid exclusion after the Pennsylvania Supreme Court's decision in Gallagher v. GEICO.
Then in the 2021 case of Donovan v. State Farm Mutual Automobile Insurance, 256 A.3d 1145 (Pa. Aug. 17, 2021), the Pennsylvania Supreme Court again answered questions on issues surrounding inter-policy stacking and the household exclusion.
After finding that the stacking waiver form at issue in this case was invalid as applied to inter-policy stacking claims, the Pennsylvania Supreme Court went on to rule that the policy’s household exclusion was also unenforceable absent a valid written waiver of inter-policy stacking, because the language of that exclusion was incompatible with stacking. In this regard, the court cited to its previous decision in the case of Craley v. State Farm Fire and Casualty, 895 A.2d 530 (Pa. 2006).
The court in Donovan also reiterated its previous decision in Gallagher v. GEICO and again ruled that the household exclusion provision is invalid since it acted as a de facto waiver of stacking, when Pennsylvania law requires the carrier to secure a written waiver of stacked coverage to be secured from an insured.
2. Spencer v. Johnson (The Fair Share Act)
The Fair Share Act was passed ten years ago in 2011 and changed the law of Pennsylvania to hold that each Defendant should only have to pay its own percentage of responsibility for causing an injury (unless a Defendant is found to be 60% or more responsible, in which case that Defendant could be made to pay the entire verdict).
For the last decade, there has not been any significant dispute or litigation over the application of that Act.
Then comes along the decision in Spencer v. Johnson, 249 A.3d 529 (Pa. Super. 2021), in which the Pennsylvania Superior Court raised the question of whether the Fair Share Act applies to those cases where there is an innocent Plaintiff who bears no percentage of responsibility for the happening of the accident.
Here is a LINK to the Tort Talk post on this case.
Here is a LINK to my Pennsylvania Law Weekly article on this case.
The question has become whether, under the wording of the Fair Share Act, should an innocent Plaintiff be allowed to argue that the Fair Share Act does not apply such that he or she should therefore be able to recover the entire verdict against any Defendant, even if that Defendant is found to only be 1% responsible.
The analysis of this question in Spencer v. Johnson appears to be dicta and the result of an Advisory Opinion (only 2 of 3 Superior Court Judges on the panel participated in the decision) and, as such, this important question appears to remain to be finally answered by another appellate court. But the tone has been set.
1. The Continuing Impact of the COVID-19 Pandemic on the court system and practice of law
While the hope in 2021 was that the COVID-19 Pandemic would wane, it unfortunately did not. As such, Zoom depositions and court arguments remained the norm and trials proceeded under social distancing safety protocols.
Court officials at all levels have begun to talk about amending the various Rules of Court to address the ongoing use of Advanced Communication Technology (ACT) going forward and even after the Pandemic ends.
Trends to Watch in 2022:
-Continuing use of Advanced Communication Technology to keep civil litigation matters moving forward.
-Continuing disputes over the application of the Fair Share Act in cases where there is an innocent Plaintiff (i.e., a guest passenger plaintiff, a plaintiff hit in a crosswalk, a plaintiff under anesthesia).
-Continuing split of authority over whether outrageous factual allegations are required to state a claim of recklessness in a personal injury Complaint.
-Continuing use of alternative dispute resolution services to resolve matters outside of the courtroom, including by way of Zoom Arbitrations and Zoom Mediations.
Friday, December 24, 2021
Case Arising Out of Slip and Fall Caused by Toy in a Store Aisle Dismissed
In so ruling, the court primarily accepted the defense that the incident involved an open or obvious danger. More specifically, the court found that the presence of an easily visible fallen object in a well-lit aisle in the store is an obvious as a matter of law.
Judge Malachy E. Mannion M.D.Pa. |
Judge Mannion also ruled that, in a slip and fall case, the fact that a type of incident allegedly occurred frequently cannot be generally utilized to establish actual notice of a particular condition allegedly involved in a particular accident.
The court additionally rejected, as a circumlocution, the argument that the Defendant did not adequately monitor an area of the store because, if it had, the accident would not have occurred.
The court otherwise rejected the argument of constructive notice by confirming that the Plaintiff did not offer any evidence as to how long the object at issue was on the floor.
Anyone wishing to review a copy of this decision may click this LINK. The Court's companion Order can be viewed HERE.
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.
Wednesday, December 22, 2021
Lessons on Compelling Parties and Witnesses to Attend Trial (Note That There Are Different Rules to Follow) [CORRECTED LINK TO DECISION]
In his Order, Judge Nealon emphasized that the Defendant had served a Notice to Attend under Pa.R.C.P. 234.3, and not under Pa.R.C.P. 234.1, to the Plaintiff’s brother-in-law and the Plaintiff’s adult daughter to testify as witnesses at trial regarding issues related to the medical history of the Plaintiff and work issues.
The Plaintiffs objected and the issue came before the court.
Judge Nealon noted that the “Pennsylvania Rules of Civil Procedure contain straightforward provisions governing the practice to be followed in compelling the attendance of parties and non-party witnesses to testify at trial.
The Notice to Attend addressed to the non-party witnesses in this case was presented by the defense under Pa. R.C.P. 234.3.
Judge Nealon noted that non-party witnesses can be compelled to attend trial under a “Subpoena to Attend and Testify” as provided by Pa. R.C.P. 234.1.
The court additionally noted that, when sending a Subpoena to Attend and Testify at trial to a non-party witness, the rule requires that the subpoena be served reasonably in advance of the date upon which attendance was required.
Based upon these errors, the court granted the Plaintiff’s Motion to Quash the Notice to Attend sent by the Defendants.
Anyone wishing to review a copy of this decision may click this LINK.
Lessons On Compelling Parties and Witnesses to Attend Trial (Note That There Are Different Rules to Follow)
In his Order, Judge Nealon emphasized that the Defendant had served a Notice to Attend under Pa.R.C.P. 234.3, and not under Pa.R.C.P. 234.1, to the Plaintiff’s brother-in-law and the Plaintiff’s adult daughter to testify as witnesses at trial regarding issues related to the medical history of the Plaintiff and work issues.
The Plaintiffs objected and the issue came before the court.
Judge Nealon noted that the “Pennsylvania Rules of Civil Procedure contain straightforward provisions governing the practice to be followed in compelling the attendance of parties and non-party witnesses to testify at trial.
The Notice to Attend addressed to the non-party witnesses in this case was presented by the defense under Pa. R.C.P. 234.3.
Judge Nealon noted that non-party witnesses can be compelled to attend trial under a “Subpoena to Attend and Testify” as provided by Pa. R.C.P. 234.1.
The court additionally noted that, when sending a Subpoena to Attend and Testify at trial to a non-party witness, the rule requires that the subpoena be served reasonably in advance of the date upon which attendance was required.
Based upon these errors, the court granted the Plaintiff’s Motion to Quash the Notice to Attend sent by the Defendants.
Anyone wishing to review a copy of this decision may click this LINK.
Tuesday, December 21, 2021
ARTICLE: Plaintiffs Have Another Banner Year in Civil Litigation, Part 2: General Civil Litigation
Below is a copy of an article of mine that was recently published in the Pennsylvania Law Weekly. It is republished here with permission.
Plaintiffs Have Another Banner Year in Civil Litigation, Part 2: General Civil Litigation
By Daniel E. Cummins | December 16, 2021
Daniel E. Cummins, Clarks Summit firm Cummins Law. Courtesy photo
The year 2021 proved to be another banner year for the plaintiffs bar in terms of securing important civil litigation court decisions that favor plaintiffs’ causes, some of which overturned decades of precedent going the other way. The concerted, and admirable, effort of the plaintiffs bar in continually fighting their good fight and in banding together to support certain judicial candidates to ensure that they make it up onto the bench continues to pay off in spades and in settlements. In essence, as confirmed by the decisions reviewed below, where there is a will, there is indeed a way.
This first part of the article, which previously appeared in this paper, reviewed the important decisions and trends in the automobile insurance law arena over the past year. This second part of the article will review the notable decisions in the area of general civil litigation law.
Fair Share Act
The Pennsylvania Superior Court recently issued another notable plaintiff-friendly decision in 2021, this one with respect to the Fair Share Act. Although wordy and filled with dicta, the decision foreshadows ongoing litigation on the parameters of the act after a decade of relative quiet since the Fair Share Act was passed.
In the case of Spencer v. Johnson, 2021 Pa. Super. 48 (Pa. Super. March 18, 2021), a plaintiff pedestrian alleged personal injuries as a result of being struck by a vehicle operated by an individual who was driving his wife’s company car while allegedly under the influence of alcohol.
The jury handed down a verdict in favor of the plaintiff in the amount that was just shy of $13 million dollars. The jury assessed comparative negligence among three defendants and found that the plaintiff-pedestrian was innocent.
The appellate court accepted the plaintiff’s argument that the wife’s negligence should be imputed to the company’s negligence because the wife-employee was acting within the scope and course of her employment with the company relative to the accident. The Superior Court reversed and remanded the case to the trial court for further proceedings with regard to a molding of the verdict with regards to adding the percentage of responsibility assessed to the wife with that assessed to the defendant company, the sum of which amounted to a figure of more than 60%. Under the Fair Share Act, the plaintiff was therefore permitted to secure the entire verdict from the deep pocket defendant company.
The Superior Court also went on to note that, “assuming arguendo,” the company was not vicariously liable for the action of the wife and those defendants were instead required to be treated separately, the Fair Share Act would not have applied because the act only applies to cases in which comparative negligence has also been assessed to the plaintiff as well.
The plaintiffs bar has read this portion of the opinion to suggest that, where there is no finding of comparative negligence on a plaintiff, the Fair Share Act does not apply and the case reverts back to the old joint and several law under which a plaintiff could recover the entire verdict against any defendant even if that defendant was only found to be 1% responsible.
In contrast, the defense bar has asserted that this part of the Spencer v. Johnson Opinion appears to be dicta and should only be considered to be more in the form of an advisory opinion by the Superior Court on the scope and reach of the Fair Share Act given that one judge on the Superior Court panel sat out of the decision.
Look for the applicability of the Fair Share Act to remain a hot issue in the years to come.
Attorney Malpractice
In addition to being plaintiff-friendly in 2021, the Pennsylvania Supreme Court was also attorney-friendly over the past year or so. In the attorney malpractice case of Clark v. Stover, 242 A.3d 1253 (Pa. Dec. 22, 2020), the Pennsylvania Supreme Court was requested by the plaintiff to adopt the continuous representation rule, which is applicable in a number of other jurisdictions, to toll the statute of limitations.
Under the continuous representation rule, the applicable statute of limitations would not begin to run until the date on which the defendants’ representation was terminated.
In a decision that benefits attorneys, the court refused to adopt the continuous representation rule and instead held that the occurrence rule would be followed in Pennsylvania. The “occurrence rule,” holds that the statutory period commences upon the happening of the alleged breach of duty by the attorney.
As such, the statute of limitations may begin to run earlier in the underlying case, depending upon when the breach occurs. This may lead to some malpractice plaintiffs finding that their malpractice claims against their attorneys have become time barred by the time the plaintiff decides to take action.
Medical Malpractice
In addition to issuing a notable decision in the arena of attorney malpractice claims, the Pennsylvania Supreme Court also weighed in on issues arising in medical malpractice matters over the past year.
The pendulum has shifted so far to the plaintiffs’ side in terms of their recent successes in the courts on important civil litigation questions of law that a decision by the Pennsylvania Supreme Court that went against the wishes of the plaintiffs bar came as a surprise to many.
In the case of Leadbitter v. Keystone Anesthesia Consultants, No. 19 WAP 2020 (Pa. Aug. 17, 2021), the Pennsylvania Supreme Court issued a long-awaited decision relative to the scope of the Peer Review Protection Act in medical malpractice matters. The central question before the court was the extent to which a defendant doctor’s credentialing file was subject to discovery.
The court in Leadbitter noted that the privilege from discovery afforded by the Peer Review Protection Act only applies to a “review committee,” which is a committee engaging in peer review. However, the Pennsylvania Supreme Court agreed with the hospital’s argument that a credentials committee is a “review committee” for purposes of the Peer Review Protection Act to the extent that it reviewed the quality and efficiency of care provided by a healthcare practitioner.
The Pennsylvania Supreme Court additionally held that the Federal Healthcare Quality and Improvement Act of 1986 protected from disclosure the responses provided by the National Practitioner Data Bank to queries submitted to it.
On the basis of this ruling, the court held that the hospital’s credentialing file for one of the defendant doctors was protected from discovery by the above two acts. This decision has been viewed as a win for medical malpractice defendants and hospitals conducting credentialing activities as it allows those parties to secure candid feedback from physician peers on their colleague’s performance, quality and safety without fear that such feedback would have to be produced in discovery.
Covid-19 Business Interruption Coverage Claims
Over the past two years there has continued to be a number of business interruption coverage actions being pursued by businesses that were forced to close due to governmental COVID-19 pandemic orders.
Most of the court decisions in this regard have found that no coverage is warranted under the applicable business insurance policies as such policies only provided coverage for losses incurred for a direct physical loss or damage to the covered property, and the pandemic had caused no such specific physical damages. See e.g., Penn Asian Senior Services v. Selective Insurance, No. 20-4919 (E.D. Pa. Sept. 30, 2021 Pratter, J.).
The courts have also routinely rejected arguments for coverage based upon the civil authority coverage provisions under the policies. The courts have generally noted that, although the COVID-19 shutdown orders were issued by a civil authority, those shutdown orders were motivated by the pandemic, meaning that the plaintiff’s loss of income was at least indirectly caused by a virus for which coverage was otherwise excluded. See Star Buick v. Sentry Insurance, No. 5:20-CV-03023 (E.D. Pa. May 26, 2021 Leeson, J.).
More specifically, a number of state and federal courts have also found that business interruption coverage was precluded by the application of virus exclusions contained in the policies. See Infinity Real Estate v. Travelers Excess & Surplus Lines, No. 2:20-CV-06398-CMR (E.D. Pa. Sept. 13, 2021 Rufe, J.)
Isolated successes have been realized in this area of the law by businesses whose policies do not have a virus exclusion. In Brown’s Gym v. The Cincinnati Insurance, No. 20-CV-3113 (C.P. Lacka. Co. July 13, 2021 Nealon, J.), the court noted that the policy at issue did not have a virus exclusion that would serve to preclude coverage.
The court in Brown’s Gym also found that the business in this case had alleged that the COVID-19 virus was actually found to be present on its premises. Judge Terrence R. Nealon of the Lackawanna County Common Pleas Court noted that, under a “physical contamination” theory recognized in Pennsylvania, invisible sources such as ammonia fumes, e-coli bacteria, carbon monoxide, gas vapors, lead intrusion, odor from cat urine, or methamphetamine cooking, which made a covered premises unusable, unsafe, or unfit for its intended use have been found to be conditions that could constitute “physical loss of damage” under the terms of a commercial insurance policy.
Nealon went on to opine that, in the wake of the coronavirus pandemic and the related government closure orders, “better reasoned decisions” from across the country have applied the physical contamination theory to implicate business interruption insurance coverage where the insured asserts that the COVID-19 virus was actually present on the covered property, and thereby caused the insured premises to become uninhabitable, inaccessible, or unduly dangerous to use as a result.
Accordingly, based upon the plaintiff’s allegations in the Brown’s Gym case asserting the continuous presence of the COVID-19 virus on its property that allegedly rendered the property unsafe, inaccessible and unfit for its intended use, the court found that the business had sufficiently alleged a “direct physical loss of damage” to its property under the “physical contamination” theory to proceed forward on its business interruption coverage claim.
Nealon also ruled in a similar fashion in his more recent decision in the case of SWB Yankees v. CNA Financial, No. 20-CV-0155 (C.P. Lacka. Co. Aug. 4, 2021 Nealon, J.).
It is anticipated that the COVID-19 virus will continue to make its presence known in these types of coverage disputes in the years ahead with varying results, depending upon the policy language at issue in any given case.
Conclusion
As the above review of the highlights (and lowlights) from the past year in civil litigation shows, the pendulum has certainly swung in favor of the plaintiffs bar in terms of court decisions. Plaintiffs attorneys will likely continue to push their important issues up the appellate ladder in the hopes of continued success in these plaintiff-friendly times. On the defense side, in addition to continuing to litigate many of these important issues, the defense bar may be wise to also increase efforts to effectuate changes in the law through the Legislature as a means to counter the adverse rulings in the court system.
Daniel E. Cummins is the managing partner of the Clarks Summit law firm of Cummins Law, a civil litigation practice. He also conducts mediations of civil litigation matters through Cummins Mediation Services. Cummins is also the sole creator and writer of the Tort Talk Blog (www.TortTalk.com), which is designed to provide continuing updates on important cases and trends in Pennsylvania civil litigation law. He can be reached at dancummins@CumminsLaw.net.
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Non-Settling Defendants Precluded From Referencing Joint Tortfeasor Settlement with Another Med Mal Defendant
The court noted that the former Defendant, who had secured a joint tortfeasor settlement had previously secured a Discontinuance relative to this action and a removal as a named Defendant.
In so ruling, the court referred to 42 Pa. C.S.A. §6141(c) which provides that, “[e]xcept in an action in which final settlement and release has been pleaded as a complete defense, any settlement or payment…shall not be admissible in evidence on the trial of any matter.”
The court additionally noted that Pennsylvania Rule of Evidence 408(a)(1) similarly prohibited the admissibility or use of any offer or acceptance of valuable consideration in compromising or attempting to compromise a claim. The court noted that, under the comment of that Rule of Evidence, it is indicated that “Pa.R.E. 408 is consistent with 42 Pa.C.S. §6141 in excluding any evidence of a joint tortfeasor settlement.”
On the basis of this law, the court granted the Plaintiff’s Motion In Limine.
The court additionally granted the Plaintiff’s Motion seeking to prohibit the non-settling Defendants from mentioning the fact that the Plaintiff’s originally asserted a malpractice claim against the settling Defendant. In this regard, the court made a distinction between factual allegations, which could be deemed to be judicial admissions, and allegations of legal conclusions, which could not be deemed to be judicial admissions.
As such, the court noted that certain factual allegations regarding specific documentation created by the relevant medical witnesses and parties may be offered as judicial admissions but any allegations by the Plaintiffs concerning the causal negligence by the settling Defendant or its agents would not be allowed to be introduced into evidence.
Anyone wishing to review a copy of this decision may click this LINK.
Pennsylvania Supreme Court Addresses Proper Venue for Defamation Claims Based Upon Internet Publications
The court reviewed the prior cases indicating that the applicable law of venue under Pa. R.C.P. 1006 and 2179 provides that an action against an individual or corporation may be commenced in a county in which the cause of action arose. Under prior Pennsylvania Supreme Court precedent, relative to defamation and libel actions, a cause of action in this regard has been deemed to arise in locations where the publication of the statements had occurred.
In this case, a democratic candidate for Mayor of the Borough of Chester Heights in Delaware County was defeated in an election and, thereafter, brought a defamation action against her political opponent and certain other organizations, alleging defamation and other claims. The Complaint asserted that, during the campaign, the Defendant published information on the internet and on social media websites falsely accusing the Plaintiff of having been charged, in another state, with criminal conduct in the form of allegedly engaging in a fraudulent banking transaction.
The Pennsylvania Supreme Court ruled, on the facts before it, that venue in a defamation action arising from internet communications and/or publications is proper in any jurisdiction where comments were read by individuals who understood such comments to be defamatory. As such, the Pennsylvania Supreme Court affirmed the lower court rulings that overruled the Defendant’s Preliminary Objections to venue.
The court stated that, when a person is defamed on the internet, which has worldwide reach, a defamation cause of action can arise in multiple venues. The court further held that an allegedly defamed Plaintiff could choose any venue in which publication and the injury occurred, even if the publications occurred in many different venues.
Anyone wishing to review a copy of this decision may click this LINK.
Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (Dec. 7, 2021).
Monday, December 20, 2021
Request For Attorney Fees Rejected Relative to Declaratory Judgment Action
The court noted that, under the Declaratory Judgment Act, an insured was compelled to bring a declaratory judgment action to establish the carrier’s duty to defend an action brought by a third party may recover attorney’s fees incurred in the declaratory judgment action if the carrier has refused to defend the action in bad faith.
The court, based upon the record before it, did not find that the carrier’s initial denial of coverage was in bad faith or was otherwise frivolous. As such, the request for the payment of fees and costs in this action in which it appeared to the court that the carrier had properly sought declaratory relief, was denied.
Anyone wishing to review a copy of this decision may click this LINK.
I send thanks to Attorney Lee Applebaum of the Philadelphia office of Fineman, Krekstein & Harris for bringing this case to my attention. Attorney Applebaum is the writer of the excellent Pennsylvania and New Jersey Insurance Bad Faith Case Law blog which can viewed HERE.
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Sunday, December 19, 2021
Fayette County Court of Common Pleas Sides With Majority of Courts Requiring Outrageous Facts in Support of Claims of Recklessness
In the case of Guziak v. Blystone, No. 1883 of 2020 G.D. (C.P. Fayette Co. July 20, 2021 Wagner, J.), the court overruled a Defendant’s Preliminary Objections to Plaintiff’s allegations of recklessness in a Complaint filed in a motor vehicle accident case after finding that the Plaintiff had alleged outrageous facts in support of such allegations.
The court emphasized in its Opinion that “an essential fact needed to support a claim for punitive damages is that the Defendant’s conduct be outrageous.”
The court noted that outrageous conduct is defined as an act done with reckless indifference to the interests of others. Reckless indifference to the interests of others is defined as wanton misconduct meaning an intentional act done in disregard of a risk known to him or her or so obvious that he or she must be taken to have been aware of this.
Turning to the facts before him, Judge John F. Wagner, Jr. of the Fayette County Court of Common Pleas noted that, where the Plaintiff alleged that a Defendant deliberately turned into on-coming traffic, with the drivers in that other traffic having the right-of-way at that intersection, and with no traffic control device or turning lane located in the area, the Defendant’s actions could be considered to have been done in disregard of a known risk and could therefore be considered to have been reckless. As such, the court overruled the Defendant’s Preliminary Objections to the claims of recklessness.
In so ruling, Judge Wagner and the Fayette County Court of Common Pleas joined the majority of those trial courts across the Commonwealth of Pennsylvania who have held that allegations of recklessness must be supported by factual allegations of outrageous conduct.
Anyone wishing to review a copy of this decision may click this LINK.
Source: “Court Summaries” by Timothy L. Clawegs. Pennsylvania Bar News (Dec. 6, 2021).
Saturday, December 18, 2021
Court Says No to Philadelphia Venue (CORRECTED LINK)
City Hall - Philadelphia |
Friday, December 17, 2021
Court Says No To Philadelphia County Venue (LINK Provided Here)
City Hall - Philadelphia |
Court Says No to Philadelphia County Venue
City Hall - Philadelphia |
Anyone wishing to review a copy of this non-precedential Opinion may click this LINK.
I send thanks to Attorney John G. Devlin of Devlin Associates, P.C. in Philadelphia for bringing this case to my attention.
Pennsylvania Superior Court To Hear Class Action COVID-19 Business Interruption Claims in En Banc Fashion
Here is a LINK to the Order issued by the Pennsylvania Superior Court directing that, going forward, it will hear the issues raised in the COVID-19 Business Interruption Coverage class action cases in en banc fashion.
I send thanks to Attorney Scott Cooper of the Harrisburg, PA office of Schmidt Kramer for bringing this Order to my attention.
Source of image: Photo by Fusion Medical Animation on www.unsplash.com.
Traveling Employee Doctrine Reviewed by Pennsylvania Supreme Court
Commentators have noted that this decision may apply to the personal injury litigation context when issues arise requiring a determination of whether an employer is a potential Defendant in a given matter.
In this decision, the Pennsylvania Supreme Court reviewed the contours of a traveling employee’s scope and course of employment. The Court provided factors to consider whether such an employee could be considered to be within the scope and course of his employment at the time of an injury.
Anyone wishing to review a copy of this decision may click this LINK.
I send thanks to Attorney Bruce S. Zero of Powell Law in Scranton, PA for bringing this case to my attention.
Thursday, December 16, 2021
Plaintiff Found To have Asserted Valid Cause of Action Against Insurance Agency and Agents for Faulty Advice on Coverage
In their Complaint, the cosmetic’s company maintained that the insurance agency failed to exercise the required professional care by recommending and securing readily available liability coverages under a manufacturer’s errors and omissions policy that would cover the claims being asserted by L’Oreal.
The Plaintiffs additionally asserted breach of contract claim against two (2) of the insurance agencies based upon an alleged oral agreement to assess the cosmetic company’s insurance needs on a semi-annual basis, to advise of any gaps in the insurance coverage, to recommend appropriate coverages for its business risk, and to obtain proper coverage for those risks.
Two (2) of the Defendant insurance agencies filed preliminary objections in the form of demurrers to the breach of contract claim on the grounds that there was no consideration to support the allegation of the creation of an enforceable contract. The Defendants also asserted that any contract claim was barred by the “gist of the action” doctrine. One insurance agency additionally challenged the legal sufficiency of the negligence claims against them and asserted that they cannot be liable individually absent an allegation that any of the insurance agents acting outside of the scope of their agency or employment.
Judge Nealon ruled that since the brokers and the agencies received a portion of these insurance premiums that the cosmetic company paid to the insurance company’s procured by the insurance agencies, the cosmetic company was found to have asserted an adequate consideration to sustain its claim of a valid oral contract with the insurance agencies.
Relative to the arguments under the gist of the action doctrine, Judge Nealon noted that that doctrine precludes a party from recasting an ordinary breach of contract claim as a tort claim, not vice-versa. Here, the court ruled that the insurance brokers or agencies could be sued in tort for failing to exercise the ordinary skill and knowledge required in their license profession. These Defendants could also be separately sued in contract for breaching their duty to provide professional services in compliance with the standards of the industry.
In his decision, Judge Nealon additionally held that the agents or employees may be liable for their own torts, even if they were acting within the scope of their employment when they engaged in the tortious conduct, and regardless of whether their principal or employer also may be vicariously liable for that conduct.
As such, Judge Nealon overruled all of the Preliminary Objections in the nature of a demurrer that were asserted and allowed the case to proceed.
Anyone wishing to review a copy of this decision may click this LINK.
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