ARTICLE: POST-KOKEN UPDATE

Here is a copy of an article of mine that was published in the January, 2020 edition of Counterpoint, the official publication of the Pennsylvania Defense Institute. 

A copy of any of the opinions noted can be secured by typing the case name into the Search Box in the upper right hand corner of the Tort Talk Blog at www.TortTalk.com.  This will take you to the Tort Talk post(s) that review the case searched in which you will find a Link to the Opinion.

POST-KOKEN UPDATE

By

Daniel E. Cummins

Daniel E. Cummins is the managing partner of the Clarks Summit, PA law firm of Cummins Law. He is also the writer of the Tort Talk Blog and provides mediation services through Cummins Mediation.


Bifurcation of Trial

In the Post-Koken case of Pena v. Van Blargen and State Farm, No. 10185-CV-2016 (C.P. Luz. Co. Oct. 1, 2019 Gartley, J.), Judge Tina Polachek Gartley of the Luzerne County Court of Common Pleas denied a tortfeasor Defendant's Motion to Bifurcate the Trial of third party negligence claims from the breach of contract and bad faith claims asserted against the UIM carrier. The decision was issued by Order only.

Effect of Third Party Release

In the case of Bonk v. American States Ins. Co., No. 3:18-CV-2417 (M.D. Pa. Oct. 1, 2019 Caputo, J.), the court declined to preclude a Plaintiff from pursuing a UIM claim based upon the language of the Release that the Plaintiff executed in the companion third party case.

The UIM carrier in this case argued that, because the third party Release referred to a release of liability in favor of “any and all persons” that Release amounted to a blanket barring of all claims given that the UIM claim was not exempted out.

More specifically, the Release at issue confirmed that the Plaintiff “release[d] and forever discharge[d] [the tortfeasor] and any other person, firm, or corporation charged or chargeable with responsibility of liability” from any and all claims and causes of actions arising out of the subject incident.

While the court agreed that the UIM carrier was indeed a firm or corporation, the court felt that the UIM carrier had not established how it had been “charged or chargeable with responsibility of liability” with respect to the third party matter. The court emphasized that the UIM carrier did not cover the tortfeasor. The language in the Release was read by the court as applying only to those parties that would be held accountable for causing the accident.

Notably, Judge Caputo declined to follow the Philadelphia County Court of Common Pleas decision in the case of Crisp v. Ace American Ins. Co., No. 150902953 (C.P. Phila. Co. 2017).

The court in this Bonk case noted that the language in the Release in the Crisp case released “any and all persons or entities whatsoever,” making that Release distinguishable in the court’s eyes from the Release in the Bonk case before it.

Effect of Third Party Release

In the case of Lane v. USAA General Indem. Co., NO. 18-537 (E.D. Pa. Oct. 18, 2019 Surrick, J.), the UIM carrier argued that a general release signed in a third party claim can be used by the underinsured motorist carrier to release an underinsured motorist claim, even when the UIM carrier paid no consideration.

The Plaintiff executed a release in the third party action which included language releasing “any other person, firms or corporations liable or who might be claimed to be liable.” The Court noted that the Release did not identify the UIM insurer directly.

In rejecting the carrier's position , the District Court relied, in part, upon the Pennsylvania Superior Court's decision in Sparler v. Fireman’s Ins. Co. of Newark, N.J., 521 A.2d 433 (Pa. Super. 1987), allocator denied, 540 A.2d 535 (Pa. 1988). The District Court noted that, “[u]nder Sparler, Plaintiff’s general release…..will not preclude Plaintiff from pursuing the present action against Defendant for UIM benefits because the executed release did not contain language unequivocally discharging Defendant from its contractual obligation to provide UIM benefits to Plaintiff.”

The District Court finds that the carrier's reliance on Buttermore v. Aliquippa Hosp., 561 A.2d 733 (Pa. 1989) to be distinguishable because Buttermore did not involve UIM benefits.

The Court also rejected the UIM carrier's reliance on the Philadelphia Court of Common Pleas case of Crisp v. ACE Am. Ins. Co., 2017 Phila Ct. Com. Pl. LEXIS 125 (Phila. Cnty. C.C.P. 2017) is because that case was not binding precedent.

Household Exclusion

The Pennsylvania Supreme Court's decision in Gallagher v. Geico, 201 A.3d 131 (Pa. 2019), which served to invalidate the Household Exclusion in automobile insurance policies, was relied upon in a recent Lebanon County case to deny a Defendant carrier's Preliminary Objections.

In the case of Loose v. Pennsylvania National Mutual Insurance, No. 2019-00664 (C.P. Leb. Co., Oct. 23, 2019 Kline, J.), the court denied Penn National’s Preliminary Objection in a case in which a Plaintiff sought to a ruling to find the household exclusion invalid under the Gallagher decision.

In the Loose case, the Plaintiff was injured after being in an accident while on her husband’s Geico insured motorcycle. The Plaintiff received the underinsured motorist (UIM) coverage on the motorcycle.

The Plaintiff then made a claim on her personal UIM policy with Penn National that had stacked coverage.

Penn National attempted to limit Gallagher to the facts of the case, i.e., efforts to recover UIM coverage under two separate policies that had been issued by the same carrier. The trial court in Loose rejected the carrier's efforts to limit the scope of the Gallagher case.

Rather , the trial court in Loose held “that Gallagher's conclusion invalidating the Household Vehicle Exclusion as violative of the Motor Vehicle Financial Responsibility Law shall be permissibly extended and applied as precedent to the issue at bar.”

It therefore appears, at least in Lebanon County where the Loose case was handed down, that having different companies providing UIM coverage under a given set of facts does not change the result that the Household Exclusion is invalid as a being violative exclusion is not valid. The trial court is now following the federal courts on this issue.

Household Exclusion

The Superior Court’s recent decision in the case of Kline v. Travelers, No. 104 MDA 2019 (Pa. Super. 2019 McLaughlin, J., Ford Elliott, P.J.E., Gantman, P.J.E.)(Op. By Gantman, P.J.E.), involved both the Sackett stacking issue as well as the issue of the retroactive effect of the Pennsylvania’s eradication of the household exclusion in the Gallagher v. GEICO decision.

The trial court had ruled in favor of the insured on the Sackett issue but against the insured on the household exclusion issue.  Travelers appealed the Sackett issue, and the insured appealed the household exclusion issue.

In this Kline case, the Superior Court found in favor of the insured on both issues, vacated the lower court's decision and remanded the case for further proceedings.

The case involved issues surrounding whether the Plaintiff-insured was entitled to stack his UIM coverage on two vehicles that had been added to his policy prior to the accident where the carrier did not secure new waiver of stacking forms from him. Another issue was whether the Plaintiff-insured was able to further stack coverage under a policy separately issued to his mother. As such, there were inter-policy and intra-policy stacking questions at issue in this case.

With regards to the Plaintiff-insured's own policy, the Court in Kline ruled that prior precedent under the Bumbarger supported its decision that the Plaintiff should be permitted to stack the coverages under his own policy.

Relative to the Household Exclusion and the retroactive effect of the Gallagher decision, the Court in Kline ruled that, as a general rule, appellate courts are required to apply the law as it exists as of the time of appellate review before the court. After applying the law of Gallagher, the court in Kline ruled that the Gallagher case rendered the Household Exclusion invalid such that the Plaintiff-insured could pursue stacked coverage that included the coverage under his mother's policy.

Future Medical Expenses

For the first time in a precedential Opinion, the Pennsylvania Superior Court addressed, in the case of Farese v. Robinson, 2019 Pa. Super. 336 (Pa. Super. Nov. 8, 2019 Lazarus, J., Kunselman, J., and Colins, J.)(Op. by Colins, J.), the somewhat recurring issue of whether a claim for future medical expenses in an automobile accident case must be reduced in accordance with the cost containment provisions under Act 6 (75 Pa.C.S.A. Section 1797) of Pennsylvania's Motor Vehicle Financial Responsibility Law (MVFRL).

In this motor vehicle accident case, the jury entered a verdict in excess of $2.5 million dollars, of which $900,000 was an award for future medical expenses.

In the end, the Court in Farese held that future medical expenses did not need to be reduced in accordance with Act 6 before being presented to the jury. See p. 21-26 of Opinion.

Overall, the Court is Farese concluded that the limitations placed upon medical providers in terms of what they could charge for treatment of motor vehicle accident injuries (i.e., Act 6 reduced amounts) simply did not apply to claims for future medical expenses.

It is noted that this decision did not affect the rule of law that past medical expenses have to be reduced in accordance with Act 6 before being presented to a jury.

ARTICLE: Auto Decisions in 2019 Show That the Plaintiff's Day Has Come

This article of mine was recently published in The Pennsylvania Law Weekly and is republished here with permission:

Auto Decisions in 2019 Show That the Plaintiff’s Day Has Come

By Daniel E. Cummins | January 30, 2020

The past year was a banner year for the plaintiffs bar in terms of decisions from the Pennsylvania Supreme Court allowing for greater avenues of recovery. As a consequence, the past year will also turn out to be a boon for the auto accident defense bar in terms of more business with the need for further litigation going forward on recurring issues of note. In the end, with the decisions handed down over the past year by the appellate courts in this context, the days of cost containment are fading in the rear view mirror to the detriment of all Pennsylvania drivers who face the prospect of increased automobile insurance premiums down the road ahead.

The plaintiffs bar’s organized effort in past years to get their favored judicial candidates onto the Pennsylvania Supreme Court’s bench is paying off in spades. The now more liberal, judicially activist court has been tossing the doctrine of stare decisis out the window and is instead relying upon soft, amorphous public policy rationales to cut down long-standing precedent and create new law with abandon, and at times, even with a vengeance. With several decisions over the past year, the Supreme Court has rewritten parts of the General Assembly’s Motor Vehicle Financial Responsibility Law (MVFRL) with little regard for the checks and balances put in place by the Pennsylvania Constitution that places the law-making duties solely with the legislature.

The Pennsylvania Supreme Court’s penchant for rewriting Pennsylvania law in the place of the legislature’s duty to do so has advanced so far to the point that even Justice David Wecht has strongly cautioned his counterparts in his increasingly frequent dissenting opinions that the majority’s “freewheeling and unwarranted invocation of ‘public policy,’” particularly in motor vehicle accident cases, “risks an appearance of jurisprudence that is arbitrary, unprincipled and ultimately illegitimate.” See Sayles v. Allstate, No. 58 MAP 2018 (Pa. Nov. 20, 2019).

Indeed, a new era of plaintiff-favorable jurisprudence is emerging in Pennsylvania that will alter how many important aspects of automobile accident claims will be handled in the future.

Seismic Changes in Motor Vehicle Accident Law

The year started off the Pennsylvania Supreme Court’s earthquake of a decision in the case of Gallagher v. Geico, 201 A.3d 131 (Pa. Jan. 23, 2019), in which the court shook up the motor vehicle accident litigation world and held that the household exclusion contained in a Geico policy violated the MVFRL because it served as a “de facto waiver” of stacked coverage. In a stunning example of its judicial activism in favor of plaintiffs causes, the court noted that its decision in Gallagher not only applied to that case, but should also be read to eradicate the household exclusion across the board.

Over the course of the year, the scope of the Gallagher decision was expanded further by other federal and state courts in Pennsylvania. Just recently, in the case of Kline v. Travelers, No. 104 MDA 2019 (Pa. Super. Nov. 19, 2019), the Pennsylvania Superior Court ruled that the Pennsylvania Supreme Court decision in Gallagher should be read to apply retroactively. This decision is important to the plaintiffs bar as it confirms that the already filed class action lawsuit, in which plaintiffs have asserted that they have been wrongfully denied coverage by the application of the household exclusion in prior claims, may proceed forward.

The plaintiffs bar scored yet another victory at the Pennsylvania Supreme Court level with in Sayles. The Sayles case involved the long-standing practice of automobile insurance companies periodically requesting its insureds to attend a medical exam in first party (PIP) medical benefits claims as required by the terms of the insurance policy.

The court, relying in part on alleged public policy concerns, accepted the plaintiffs’ argument in Sayles that such policy terms requiring insureds to submit to an exam or exams at the request of the carrier irreconcilably conflicted with 75 Pa.C.S.A. Section 1796 of the MVFRL, which is titled “mental or physical examination of a person.”

The Pennsylvania Supreme Court, rejected the current practice of PIP insurers requesting its insureds to attend a medical examinations as per the provisions of the insurance policy agreed to by the parties and ruled that insurers must, instead, file a motion with a trial court judge and demonstrate good cause to support the request for the exam. Under this ruling, it will now be a trial court judge who will select the medical examiner and who will also set the parameters of the exam.

In light of the Sayles decision, motor vehicle accident litigators and trial court judges can unfortunately now expect a flood of motions followed by petty litigation over the selection of an appropriate doctor and the parameters of the exam. Unfortunately, in its haste to effectuate this change in the law, the Supreme Court in Sayles failed to provide trial court judges with any guidance on how to decide these more specific issues.

Over the past year, the Pennsylvania Supreme Court did rule in favor of an auto accident law defense position put forth in at least the case of Safe Auto Insurance v. Oriental-Guillermo, 26 MAP 2018 (Pa. Aug. 20, 2019). In this case, the Supreme Court affirmed the Superior Court’s decision upholding the validity of Safe Auto’s unlisted resident driver exclusion.

Under this exclusion, Safe Auto excluded from coverage under its policy those individuals who resided with the Safe Auto insured, but who was not related to the insured and who were not listed on the Safe Auto policy as additional drivers.

The Supreme Court agreed that this insurance contract provision was not ambiguous, did not violate Pennsylvania’s Motor Vehicle Financial Responsibility Law, and did not violate Pennsylvania’s public policy.

Future Medical Expenses Claims in Auto Cases

Another notable appellate decision under Pennsylvania’s Motor Vehicle Financial Responsibility Law was the case of Farese v. Robinson, 2019 Pa. Super. 336 (Pa. Super. Nov. 8, 2019).

In Farese, the Superior Court addressed the somewhat recurring issue of whether a claim for future medical expenses in an automobile accident case must be reduced in accordance with the cost containment provisions found under Act 6, 75 Pa.C.S.A. Section 1797, of the MVFRL.

In this motor vehicle accident case, the jury entered a verdict in excess of $2.5 million, of which $900,000 was an award for future medical expenses. The defendant had objected at trial to the plaintiff being permitted to argue to the jury the total amount of alleged future medical expenses anticipated as a result of the accident, as opposed to the plaintiff being limited to only asserting an Act 6 reduced amount of such expenses.

On appeal, the court in Farese held, in what appears to be the first appellate decision of its kind, that future medical expenses need not be reduced in accordance with Act 6 before being presented to the jury at trial.

As such, in motor vehicle accident cases, plaintiffs will now be allowed to put into evidence the full amount of future medical expenses their experts claim that the plaintiff will allegedly incur if they continue to treat after the litigation is concluded or settled, as opposed to the reduced amounts. This decision did not alter the rule under Act 6 requiring that past medical expenses be reduced.

Intoxication Evidence

In 2019, the Pennsylvania Superior Court provided its latest pronouncement on the admissibility of intoxication evidence in motor vehicle accident cases. In Livingston v. Greyhound Lines, No. 318 EDA 2017 (Pa. Super. April 29, 2019 Colins, J., Lazarus, J., Kunselman, J.) (Op. by Colins, J.), the Superior Court reiterated the rule of law that evidence of alcohol or drug consumption by a person involved in an accident is admissible only where there is evidence that reasonably shows intoxication and unfitness to engage in the activity at issue at the time of the accident.

The Superior Court noted that even an admission by the tortfeasor of admitted alcohol or drug use is subject to being excluded from evidence where the plaintiff fails to present evidence of chemical testing sufficient to show intoxication, or where the Plaintiff fails to present any other evidence of impairment. 

Trends in Auto Law Cases Over the Past Year

It has been over a decade since the Koken decision was handed down and there is still no body of appellate decisions to provide guidance to the trial courts and the bar on how to handle the variety of issues that arise from the pleadings stage to trial in motor vehicle accident cases involving both a tortfeasor defendant and an insurance company co-defendant. The lack of appellate decisions may be due, in large part, to the fact that most of these cases are being resolved through ADR proceedings at the trial level.

A continuing trend to watch in post-Koken matters is whether the trial courts will allow these types of cases that are heading to trial to proceed as a single trial of all claims, or will instead bifurcate these cases into separate trials, with one the trial proceeding against the tortfeasor and a separate trial with a separate jury proceeding against the insurance company providing the UIM benefits. The primary rationale in favor of bifurcation is that the third-party tortfeasor defendant would be protected from having to sit before the jury with an insurance company as a co-defendant and face the inherent prejudice created by such a scenario.

In the absence of any concrete appellate guidance, the trial courts continue to struggle with this issue so much so that the answer to whether any given case will be bifurcated may depend upon in which county court the case is pending, and possibly even which county court judge is deciding the issue.

In one example of a bifurcation decision from the past year, Judge Tina Polachek Gartley of the Luzerne County Court of Common Pleas denied a tortfeasor defendant’s motion to bifurcate the trial of third-party negligence claims from the breach of contract and bad-faith claims asserted against the UIM carrier the post-Koken case of Pena v. Van Blargen and State Farm, No. 10185-CV-2016 (C.P. Luz. Co. Oct. 1, 2019).

A listing of some of the various county court decisions on this issue and other notable post-Koken issues can always be freely accessed on the post-Koken scorecard on the Tort Talk blog, which can be found at www.TortTalk.com.

Allegations of Recklessness/Punitive Damages

It has been long held under Pennsylvania law that punitive damages may only be pursued in motor vehicle accident cases involving outrageous facts. In Pennsylvania auto accident cases, punitive damages claims have largely been limited to cases involving DUI drivers, tractor trailer drivers, and, at times, to cases involving drivers who were using a cellphone at the time of an accident. For a recent decision of note in this regard from last year, see Santiago v. Yates, No. 2018-CV-4504 (C.P. Lacka. Co. Feb. 14, 2019 Nealon, J.).

There has recently developed two lines of decisions in Pennsylvania on whether allegations of recklessness should be stricken from complaints filed in ordinary motor vehicle accident cases. One line of Pennsylvania trial courts have ruled that, if there are not sufficient facts pleaded in the complaint to establish the outrageous conduct to support a punitive damages claim, then the allegations of recklessness should be stricken by way of preliminary objections.

The second line of cases, as evidenced in the decision in Nebesky v. Pagnotti, No. 2019-CV-3170 (C.P. Lacka. Co. Aug. 15, 2019 Gibbons, J.), hold that averments of recklessness are allegations pertaining to the state of mind of a defendant that, under the Rules of Civil Procedure, are permitted to be pleaded in a more liberal fashion. Courts ruling in this fashion will typically deny preliminary objections in this regard but also rule that the issue can be revisited at the summary judgment stage.

How a given court will rule on these types of preliminary objections will depend upon in which county the case is pending and how the judges in that county have ruled in the past.

Auto Law Cases to Watch

This article ends where it began. Just as they went after the household exclusion in the Gallagher line of cases, the plaintiffs bar has its sights set on cutting down the validity of the regular use exclusion. That exclusion holds that a carrier need not provide coverage when an insured was involved in an accident while operating a vehicle that was regularly available for the insured’s use but which was not covered under the insurance policy at issue.

The plaintiffs bar has been arguing, in part, that the application of the regular use exclusion also violates the statutory mandates requiring that the carrier secure executed forms for the rejection of stacked UM/UIM coverage from its insureds. Another argument has been made under the same public policy references that have proved successful with the Supreme Court in the past.

The defense bar rebuffed these arguments in the case of Barnhart v. Travelers, No. 2:19-CV-00523-MJH (W.D. Pa. Oct. 28, 2019 Horan, J.). Yet, in the case of Rush v. Erie Insurance Exchange, No. C-48-CV-2019-1979 (C.P. Northampt. Co. Oct. 1, 2019 Baratta, J.), the court accepted the plaintiff’s argument and denied a motion for judgment on the pleadings filed by the carrier with respect to a regular use exclusion.

It is anticipated that the plaintiffs bar may try to push either of these cases (and any other plaintiffs’ causes) up the appellate ladder to secure their desired ruling from the liberal and judicially activist Pennsylvania Supreme Court. It is anticipated that the plaintiffs bar will rely upon public policy arguments given that there are decades of precedent already on the books upholding the regular use exclusion. It remains to be seen in this regard whether the battered and beaten down doctrine of stare decisis will make a comeback or not.



Daniel E. Cummins is a partner in the Scranton law firm of Cummins Law where he focuses his practice in automobile accident litigation matters.

Motion to Bifurcate Post-Koken Trial Denied in Luzerne County

In the Post-Koken case of Pena v. Van Blargen and State Farm, No. 10185-CV-2016 (C.P. Luz. Co. Oct. 1, 2019 Gartley, J.), Judge Tina Polachek Gartley of the Luzerne County Court of Common Pleas denied a tortfeasor Defendant's Motion to Bifurcate the Trial of third party negligence claims from the breach of contract and bad faith claims asserted against the UIM carrier.

The Court's Order only without Opinion can be viewed HERE.

Allegations of Recklessness and Punitive Damages Claims Stricken from Run-of-the-Mill Auto Accident Case

In her recent decision in the case of Walker v. John H. Helsel Agency, No. 2016-CV-09969 (C.P. Luz. Co. Feb. 22, 2017 Polachek-Gartley, J.), Judge Tina Polachek-Gartley of the Luzerne County Court of Common Pleas sustained Preliminary Objections filed by a Defendant in the nature of a Motion to Strike punitive damages claims and allegations of reckless conduct in a Plaintiff’s Complaint filed in a motor vehicle accident matter.  

The Defendant asserted that the allegations contained in the Plaintiff’s Complaint pertained to a “run-of-the-mill” motor vehicle accident and did not rise to the level of outrageous conduct required under Pennsylvania law to support a claim for reckless conduct or punitive damages.  

After reviewing the current status of Pennsylvania law on punitive damages against the allegations of the Complaint, the court agreed and found a lack of facts to support of allegations of recklessness or reckless conduct as pled in the Complaint.  This matter involved an intersectional motor vehicle accident. 

The court sustained the Defendant’s Preliminary Objections and dismissed the Plaintiff’s punitive damages claims without prejudice.  The court noted that, if additional information was obtained during discovery to support such claims, the Plaintiff would be granted a right to include punitive damages at that time. 
 
The court otherwise denied other Preliminary Objections filed by the Defendant seeking the removal of allegations in the Complaint pertaining to information from the police report, traffic citations, and insurance coverage.

Anyone wishing to review this decision may click this LINK.

The defense counsel in this matter was Attorney Stephen T. Kopko of the Scranton, PA insurance defense law firm of Foley, Comerford & Cummins.

Judge Gartley of Luzerne County Addresses Service of Process Issues

In her recent decision in the case of Nicholas v. Zolner, No. 2013-CV-9828 (C.P. Luz. Co. Dec. 29, 2016 Gartley, J.), Judge Tina Polachek Gartley of the Luzerne County Court of Common Pleas issued a Pa. R.A.P. 1925 Opinion in support of her previous Order sustaining the Defendant’s Preliminary Objections which asserted that the Plaintiff’s case should be dismissed for failing to serve the Defendant with original process.  

The court sustained the Defendant’s Preliminary Objections after finding that the Plaintiff failed to file the Writ of Summons upon the Defendant as required by the Pennsylvania Rules of Civil Procedure and Lamp v. Heyman, 366 A.2d 882 (Pa. 1976) and its progeny. 

The Plaintiff filed an appeal from that decision and Judge Gartley issued this Pa. R.A.P 1925 Opinion to outline her reasoning to the Pennsylvania Superior Court.  In her Opinion, Judge Gartley provides a detailed analysis of the rules surrounding proper service of process.  

Judge Tina Polachek Gartley
Luzerne County

The court not only found that the Plaintiff failed to complete service but also rejected the Plaintiff’s argument that the party Defendant was put on notice of the lawsuit because the Plaintiff was in contact with the Defendant’s insurance company prior to the lawsuit being filed.    

Judge Gartley noted that the Superior Court has held that notice to an insurance company or its attorney of the filing of a lawsuit is insufficient to toll the statute of limitations when there has been no good faith effort to serve the actual Defendants.  

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

The prevailing defense attorney in this matter was Attorney Stephen T. Kopko of the Foley, Comerford & Cummins insurance defense law firm in Scranton, Pennsylvania.