Federal Court Addresses Viability of Products Liability Claims Involving Medical Devices

In the case of Douglas v. Atrium Medical Corp., No. 3:23-CV-747-JKM (M.D. Pa. Sept. 30, 2024 Munley, J.), the court granted in part and denied in part a Motion to Dismiss after finding that settled Pennsylvania law did not allow for strict liability claims in a products liability litigation relative to claims involving prescription drugs and medical devices.

The case arose out of issues regarding the use of a hernia mesh as treatment.   

Judge Munley also denied the request for a certification of the strict liability issues for an interlocutory appeal because there was no substantial ground for a difference of opinion on this decision.

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

I send thanks to Attorney James M. Beck of the Philadelphia office of Reed Smith law firm for bringing this case to my attention.

Souce of image:  Photo by Vidatl Balielo, Jr. on www.pexels.com.

Covid-19 Related Claims Against College Allowed to Proceed

In the case of Dantone v. Kings College, No. 3:23-CV-1365 (M.D. Pa. Aug. 29, 2024 Munley, J.), the court ruled that Pennsylvania’s prohibition against claims for educational malpractice did not bar the Plaintiff’s COVID-related claims against the Defendant university for converting from in-person to on-line education to the alleged detriment to the Plaintiff.

The court noted that the Plaintiff did not claim that the education was inadequate, but that an in-person college experience was essential to the enrollment bargain.

The court also allowed the Plaintiff to plead unjust enrichment claims at this initial stage of the litigation even though Pennsylvania precludes unjust enrichment claims between parties whose relationship is governed by either an express or implied contract.  The court noted that, under the Rules of Civil Procedure, a Plaintiff is entitled to plead in the alternative.

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.

Judge James M. Munley of Federal Middle District Court Rules on Statute of Limitations for UIM Case

In a case in which he addressed the applicable statute of limitations for an underinsured (UIM) motorists claim, Judge James M. Munley of the Federal Middle District Court of Pennsylvania denied the carrier’s Motion for Summary Judgment in the case of Legos v. Travelers Cas. Ins. Co., No. 3:16-CV-1917 (M.D. Pa. Oct. 11, 2018 Munley, J.).

Notably, the court held that the statute of limitations for a UIM is four (4) years from the date of the breach of the contract and not the date of the third party settlement.  

According to the Opinion, the third party case in this matter settled back in March of 2012.   

Over four (4) years later, Travelers sent correspondence to its insured indicating that it believed that the statute of limitations on the UIM claim had expired and that it was, therefore, closing its file.  

The insured nevertheless filed a breach of contract Complaint.   Travelers eventually responded with a Motion for Summary Judgment asserting that the four (4) years statute of limitations had expired once four (4) years from the March of 2012 settlement of the case had run.  

The Plaintiff countered with the Pennsylvania Supreme Court case of Erie Ins. Exch. v. Bristol, 174 A.3d 578 (Pa. 2017), and asserted that the four (4) year statute of limitations actually commenced in 2016 when the carrier indicated that it was closing its file as that would have been the date of the alleged breach of contract.  

Travelers responded by asserting that the Bristol case only applied to uninsured (UM) motorists claims.  Judge Munley disagreed and held that the Bristol case applied to both UM and UIM cases.  

In a footnote, Judge Munley acknowledged the Third Circuit's 2007 prediction in 

State Farm Mut. Auto. Ins. Co. v. Rosenthal, 484 F.3d 251, 253 (3rd Cir. 2007), that the Pennsylvania Supreme Court would hold that the limitations period on a UIM claim begins to run when the insured party settles with an adverse party for less than the value of the insured's damages. However, Judge Munley ruled that the 2017 Pennsylvania Supreme Court decision in Erie Ins. Exch. v. Bristol, 151 A.3d 1161 (Pa. Super. Ct. 2016), rev'd, 174 A.3d 578 (Pa. 2017) served to clarify state law in the manner held by Judge Munley in this Legos case.

As such, the court found that the UIM breach of contract claim in this matter was not barred by the statute of limitations.   Consequently, the carrier’s Motion for Summary Judgment was denied.

Anyone wishing to review a copy of this case may click this LINK. The Court's companion Order can be viewed HERE.

I send thanks to Attorney Scott B. Cooper of the Harrisburg, PA law firm of Schmidt Kramer P.C. for bringing this case to my attention.  

Commentary:  One troubling aspect of this decision for carriers is that Plaintiffs attorneys are already arguing that this decision basically eradicates any statute of limitations for a UIM claims.  The argument is that, under this decision, the statute of limitation never begins to run until the Plaintiff advises the carrier of a desire to pursue a UIM claim and the carrier denies the claim or indicates it is not going to pay the Plaintiff's initial demand.

Does such an argument further the goal of the statute of limitations to prevent the pursuit of overly stale claims?  Does that seem like a correct application of the statute of limitations to you?  What do you think?

Detailed Bad Faith Complaint Survives Motion to Disimiss in Federal Middle District Court Case

In his recent decision in the case of King v. Travelers Companies, No. 3:18-cv-1549 (M.D. Pa. Oct. 11, 2018 Munley, J.), the court denied a carrier’s Motion to Dismiss a UIM bad faith Complaint.
According to the Opinion, this UIM bad faith claim involved injuries to three (3) family members as  a result of a motor vehicle accident.  The Plaintiffs claimed that their damages far exceeded the tortfeasors’ coverage and that their own carrier acted with reckless disregard with respect to the Plaintiffs’ requests for the payment of UIM benefits.  

The carrier moved to dismiss, asserting that the Plaintiffs had merely stated a claim of a dispute over the evaluation and failed to allege any specific facts beyond that to support any claims of bad faith.

Judge James M. Munley of the Federal Middle District Court of Pennsylvania denied the Defendant’s Motion to Dismiss indicating that, in one particular paragraph of the Complaint, the Plaintiffs had set forth twenty (20) alleged acts and/or omissions by the Defendant carrier that were specific to the bad faith claims.   

The court found that, based upon the Plaintiffs’ allegations, it was plausible that the carrier had acted in bad faith when it allegedly failed to conduct an investigation before denying the UIM claim.   The court found that the Plaintiff had raised an issue as to whether or not the carrier had denied the Plaintiff’s benefits with reckless disregard and alsi raised a question of whether or not the carrier’s decisions had a reasonable basis.  

The court additionally found that the Plaintiff pled enough facts to raise a reasonable expectation that discovery may reveal evidence to support the claims of bad faith presented.  

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 the Pennsylvania and New Jersey Insurance Bad Faith Case Law blog for bringing this case to my attention.

Presence of Wet Floor Signs Does Not Establish That Floor Was Wet

In the case of Rubes v. Kohl’s Department Stores, Inc., 3:17-CV-1842 (M.D. Pa. June 29, 2018 Munley, J.), the court granted summary judgment in a slip and fall case.   In his decision, Judge James M. Munley of the Federal Middle District Court of Pennsylvania confirmed the well-established law that the mere occurrence of an accident does not establish negligent conduct on the part of another.  

In his Opinion, Judge Munley provides a detailed description of the current status of Pennsylvania law on a plaintiff's burden of proof in slip and fall matters.

The court noted that, at a minimum, a slip-and-fall plaintiff must produce some evidence either that the possessor of land had a hand in creating the allegedly dangerous condition, or that he or she had actual or constructive notice of that condition.  

In this matter, the court found that the Plaintiff presented no evidence of the condition of the floor where she slipped.  The evidence revealed that the Plaintiff walked into the store from the inclement weather outside, took three or four steps into the store, and slipped and fell.

The court otherwise noted that the presence of wet floor signs in the area of the Plaintiff’s alleged fall do not establish that the floor was actually wet, since wet floor signs can be set out on a precautionary basis.  

Anyone wishing to review a copy of this decision may click this LINK.  The companion Order dismissing this case can be viewed HERE.

I send thanks to Attorney James M. Beck of the Reed Smith law firm in Philadelphia for bringing this case to my attention.   

Minnesota Claims Rep Ordered by Federal Court To Come to Pennsylvania for Deposition in Post-Koken Auto Case

In his recent decision in the case of Centini v. MetLife Auto & Home, No. 3:17-cv-02144 (M.D. Pa. April 3, 2018 Munley, J.), Judge James M. Munley of the Federal Middle District Court of Pennsylvania granted a Plaintiff’s Motion to Compel the deposition of the carrier’s claims professional.  

The court additionally ordered that the claims representative’s deposition would be conducted in Pennsylvania and not in Minnesota where the claims representative was apparently located.  

The court additionally noted that the claims representative would be subjected to a complete deposition concerning the subject uninsured motorist claim at issue. 

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

Pennsylvania Unfair Trade Practices Act and Consumer Protection Law Does Not Apply to the Handling of Insurance Claims

In his recent decision in the case of Machado v. Safeco Ins. Co., No. 3:16-CV-1685 (M.D. Pa. April 7, 2017 (Munley, J.), Judge James M. Munley addressed a Plaintiff’s claims under consumer protection law for allegedly abusive claims handling practices by the carrier of her insurance claim.  

The court noted that, in the insurance context, Pennsylvania’s Unfair Trade Practices and Consumer Protection law “applies only to conduct related to the sale of an insurance policy, not to the handling of the insurance claims.”  

However, in a footnote, the court noted that, under the case of Berg v. Nationwide Mut. Ins. Co. Inc., 44 A.3d 1164 (Pa. Super. 2012) the Superior Court found that a violation under the Unfair Trade Practices and Consumer Protection law could serve as evidence to support a bad faith claim.

In the end, the court granted in part and denied in part the Defendant's Motion to Dismiss. 

 Anyone wishing to review this decision may click this LINK..

I send thanks to Attorney Lee Applebaum of the Philadelphia law firm of Fineman, Krekstein and Harris.  Please be sure to check out Attorney Applebaum’s excellent Pennsylvania and New Jersey Insurance Bad Faith Case Law blog which you review HERE.  

Federal Middle District Court Judge James M. Munley Grants Offensive Motion for Summary Judgment Filed by Plaintiff on Liability in Car Accident Case

In the case of Broe v. Manns, No. 3:15-cv-985 (M.D. Pa. Sept. 27, 2016 Munley, J.), Judge James M. Munley of the United States District Court for the Middle District of Pennsylvania granted an offensive Motion for Summary Judgment filed by the Plaintiffs on the issue of liability in a motor vehicle accident case.  

According to the Opinion, this case arose out of a rear-end motor vehicle accident.  

The Plaintiff filed a Complaint alleging negligence and loss of consortium. Thereafter, the Plaintiff moved for partial summary judgment on the issue of liability.  

After reviewing the summary judgment standard of review, the court granted the Plaintiff’s Motion for Partial Summary Judgment on liability.  

The Plaintiff main contention was that the Defendant’s admission that he failed to brake to avoid the Plaintiff’s vehicle constituted negligence per se.  

The Defendant countered with an argument that his admission, given during a deposition, was an insufficient basis upon which to grant summary judgment.   The Defendant also asserted that the sudden emergency doctrine relieved him from liability. 

The court stated that it is well-settled that a violation of the Pennsylvania Motor Vehicle Code constitutes negligence per se.   Relying upon Pennsylvania Motor Vehicle Code provisions, including the assured clear distance ahead statute at 75 Pa. C.S.A. §3361, and noting that the police cited for violating that statute, the court found that the Defendant’s admission in this regard eliminated any genuine issue of material fact.   The court found that the Defendant’s admissions, coupled with the citations for violating the assured clear distance ahead statute, sufficiently established negligence per se.   Since the Defendant had not identified any genuine issues of material fact, the court found that there was no sufficient evidentiary basis upon which a reasonable jury could find in the Defendant’s favor on the liability issue.  

The court also rejected the Defendant’s reliance upon the sudden emergency doctrine noting that, under the applicable law, a person cannot avail himself of the protections of that doctrine if that person was himself driving carelessly.   The court stated that, based upon the Defendant’s citation for violating the motor vehicle code, along with his admissions on the issue of liability, the undisputed evidence before the court was found to establish, at the very least, that the Defendant was driving carelessly.  As such, the court found that the Defendant could not rely upon the sudden emergency doctrine to relieve him from liability.  

As stated, overall, the court granted Plaintiff’s Motion for Partial Summary Judgment on the issue of liability.

 

Anyone wishing to review a copy of this decision may contact me at dancummins@comcast.net.

 

I send thanks to Attorney Michael J. Foley of The Foley Law Firm of Scranton, Pennsylvania for bringing this case to my attention.  

 

 

Several Products Liability Issues Addressed by Judge Munley of Pennsylvania Federal Middle District Court

In his recent products liability decision in the case of Bailey v. B.S. Quarries, Inc., No. 3:13-CV-3006 (M.D. Pa. March 31, 2016 Munley, J.), Judge James M. Munley of the Middle District Federal Court of Pennsylvania addressed cross  Motions for Summary Judgment filed in a products liability case.  

On one of the issues presented, the court found that, due to the actions of one of the Defendants, the Defendant was equitably estopped from claiming that it was the Plaintiff’s employer and, therefore, immune from suit under worker's compensation immunity laws.   The Court stated that defendants may not manipulate the seal of immunity in an effort to shelter whichever of their entities may be at greatest risk.  

The court also noted that, under Pennsylvania law, the fact that an accident was not witnessed does not make proof of causation impossible.   Here, the court found that the Plaintiff’s accident reconstruction expert provided sufficient causation testimony to allow the case to proceed towards a jury.  

Judge Munley also noted that sufficient evidence presented of a disregard of a known safety risk also supported allowing the plaintiff's claim for punitive damages to proceed.   Judge Munley found that the evidence presented that the product manufacturer allegedly omitted a known safer method of maintenance from its operator’s manual permitted the claim for punitive damages to go forward.  

Judge Munley also reaffirmed the current status of products liability law holding that, under the Pennsylvania Supreme Court decision in Tincher, the prior decisions of Azzarello and its progeny were no longer good law.  

Rather, the Plaintiff must prove a risk-utility analysis supporting claims that harm was caused by a defective condition or, in the alternative, must prove evidence of an ordinary consumer’s expectations as to the risk presented by the product.   The Plaintiff was found to have failed in this regard in this case and, as such, her motion for summary judgment on that particular issue was denied.



Judge Munley's Opinion can be viewed HERE and his corresponding Orders can be viewed HERE.
 

I send thanks to Attorney James Beck of the Philadelphia office of Reid Smith and the writer of the notable legal blog, The Drug and Device Law Blog.    

 

Judge Munley of Federal Middle District Allows Claim for Negligent Infliction of Emotional Distress to Proceed

In his recent decision of Caple v. Sears Dept. Stores, No. 3: 15 - CV - 1666 (M.D. Pa. April 15, 2016 Munley, J.), Judge James M. Munley of the Middle District of Pennsylvania denied a Defendant’s partial Motion to Dismiss filed against a negligent infliction of emotional distress claim.  

In so ruling, Judge Munley found that an allegation of “severe emotional distress” in the Complaint was enough, under federal pleadings law, to plead the type of debilitation and extended emotional distress necessary to support a claim for negligent infliction of emotional distress.  

Judge Munley's Opinion can be viewed HERE  , and his corresponding Order HERE.

I send thanks to Attorney James Beck of the Philadelphia office of Reid Smith and the writer of the notable legal blog, The Drug and Device Law Blog for bringing this case to my attention.    

 

A Split of Authority Develops on Admissibility of Bad Faith Expert Testimony

In his recent decision in the case of Monaghan v. Travelers, No. 3:12CV1285 (M.D.Pa. July 16, 2014 Munley, J.), Judge James Munley bucked the recent trend of Pennsylvania court decisions holding that expert testimony is unnecessary in insurance bad faith cases by ruling that, under F.R.E. 702, each bad faith case should be decided on its own merits in determining whether such expert testimony would be beneficial in assisting a jury of lay people in understanding the issues presented.

In denying the defense motion in limine to preclude the Plaintiff's bad faith expert, the court deferred its decision on whether the Plaintiff's proposed bad faith expert testimony impermissibly addresses the ultimate issues presented.  The court granted the defense the right to raise this objection at trial if necessary.

Anyone wishing to review this decision of Judge Munley in the Monaghan case may click HERE.

I send thanks to Attorneys Scott Cooper and Michale E. Kosik, both of the Harrisburg law firm of Schmidt Kramer, for bringing this case to my attention.

For decisions going the other way, click HERE to review a post on the Federal Western District of Pennsylvania case of Schifino v. GEICO case,  and HERE to go to the Federal Western District Court decision in the case of Smith v. Allstate.

Click HERE to read a post the prior Federal Middle District of Pennsylvania decision issued by Judge Malachy E. Mannion in Scott v. GEICO in which Judge Mannion ruled that bad faith testimony was not necessary in this context.

Federal Judge James M. Munley Allows Insurance Evidence in Post-Koken Case

In his May 28, 2013 decision in the Post-Koken case of Noone v. Progressive Direct Ins. Co., No. 3:12cv1675 (M.D.Pa. May 28, 2013 Munley, J.), Judge James M. Munley of the Federal Middle District Court of Pennsylvania addressed a motion in limine filed by the defendant UIM carrier seeking to preclude evidence of (1) the amount of premiums paid by the Plaintiff for the UIM policy, (2) the amount of the limits of UIM coverage available, and (3) the amount of the tortfeasor's third party liability coverage along with the amount received by the  plaintiff from the tortfeaser.

The defendant UIM carrier asserted that such information was irrelevant to the issues presented.  The defense also argued that to admit such evidence would serve to suggest to the jury an amount to award the Plaintiff.

The Plaintiff countered by asserting that the evidence at issue should be admitted to enable the jury to fully understand and evaluate the case before reaching a verdict.

Judge Munley sided with the Plaintiff's position, denied the motion in limine and ruled that all of the evidence at issue was admissible.  The court felt that the evidence was relevant and not unfairly prejudicial, confusing, or misleading. 

In its Opinion, the court noted that the case before it involved a breach of contract claim based upon a UIM contract and given that UIM benefits are designed to compensate an injured party plaintiff when the plaintiff's damages exceed the amount of the tortfeasor's liability limits.  Accordingly, Judge Munley ruled that it was important that the jury not only be made aware of the amount of the tortfeasor's liability limits but also the amount that the Plaintiff recovered from the tortfeasor's liability policy.

The court also stated that the insurance policy the Plaintiff purchased from Progressive was the contract at issue.  Accordingly, Judge Munley ruled that it was "not overly prejudicial" for the defendant for the jury to know the amount of UIM coverage the Plaintiff purchased or what the premium for that policy that was paid by the Plaintiff.  The court stated that this information, "even if it is merely background information, will assist the jury in completely understanding and evaluating the case."

Anyone wishing to review this decision by Federal Middle District Court Judge James M. Munley in the Noone case may click this LINK.

I send thanks to Attorney Bruce Zero of the Scranton, PA Powell Law Firm for bringing this case to my attention.

Federal Middle District Allows Bad Faith Claim to Proceed on Basis of Invalid Rejection of UM Form

In the case of Grassetti v. Property & Casualty Insurance Company of Hartford et al., No. 3:10-cv-2068, 2011 WL 1522326 (M.D. Pa. Apr. 20, 2011), Judge James M. Munley held that a policyholder who signed a form rejecting uninsured motorist coverage could move forward with his bad faith claim because the insurer failed to use language specified by state law on the UM rejection form.

The Plaintiff was allegedly injured as a result of a May of 2007 motor vehicle accident.  As the driver of the other vehicle was never identified, an uninsured motorist claim was pursued by the injured party.  Coverage was denied by the UM carrier on the grounds that the injured party had rejected UM coverage during the application process.

In his bad faith action against the carrier, the injured party argued that the carrier had acted unreasonably in denying coverage.  The injured party essentially asserted that the UM rejection form was invalid because it did not strictly comply with the requirements of Pennsylvania's Motor Vehicle Financial Responsibility Law, 75 Pa.C.S. § 1731(b), pertaining to the content of the rejection of coverage form.

Citing the rejection form signed by the injured party, the carrier moved to dismiss the bad-faith claim. Generally speaking, under Pennsylvania law, although uninsured motorist coverage is optional, an insured must sign a rejection form that uses language specified in the statute in order to waive such coverage.

The carrier’s form was found to deviate from the statutorily required language in one respect.  The carrier's form referred to “Uninsured Motorists Coverage,” while the statutory language referred only to “Uninsured Coverage.”

The court noted that 75 Pa.C.S. Section 1731(c)(1) states, in pertinent part, that "[a]ny rejection form that does not specifically comply with this section is void."

The court accepted the Plaintiff's citation of American Int'l Ins. Co. v. Vaxmonsky, 916 A.2d 1106 (Pa.Super.2006), in which the Pennsylvania Superior Court held that an insurer's underinsured motorist (“UIM”) coverage waiver was null and void for failure to comply with Section 1731(c) of the MVFRL.

For purposes of motion to dismiss standard of review at issue in this Grassetti case, the court found Vaxmonsky persuasive on the issue of interpreting the specific compliance requirements of Section 1731(c)(1). 

Judge Munley held that, in reading the Complaint in a light most favorable to the Plaintiff, it appeared that the Plaintiff had adequately pled a cause of action under Pennsylvania's Bad Faith Statute, 42 Pa.C.S. § 8371 given that Section 1731(c)(1) of the MVFRL requires strict compliance waiver language of section 1731(b) and given that the Plaintiff had adequately asserted in the Complaint that the Defendants withheld payment upon a claim without a reasonable basis and that Defendants did so knowing they did not have a reasonable basis.

I send thanks to Attorney Brian Bevan of the Pittsburgh law firm of DiBella, Geer, McAllister & Best, P.C. for advising me of this recent decision.

Unsettled Issues Regarding Future Medical Expenses in Motor Vehicle Accident Matters

In a recent April 11, 2011 Memorandum Opinion, Judge James Munley of the District Court for the Middle District of Pennsylvania decided several issues in response to various pre-trial motions in limine filed by both parties in the case of Kansky v. Showman, 3:09cv1863 (M.D. Pa. April 11, 2011, Munley, J.).  As part of his decision, Judge Munley found that a plaintiff may plead, prove and recover future medical expenses as those expenses were not shown to be "paid or payable."

In Kansky, the Plaintiff was prepared to present his medical expert's opinion at trial that included that expert's prediction on the extent of substantial future medical expenses the Plaintiff would incur due to his accident-related injuries.

The Defendant filed a motion in limine in which it was asserted that the Pennsylvania Motor Vehicle Financial Responsibility Law precluded the Plaintiff from recovering future medical benefits which may be covered by the Plaintiff's health insurance.  More specifically, 75 Pa.C.S.A. Section 1720 and/or 1722 precluded the Plaintiff from introducing into evidence any medical expenses that were "paid or payable" by applicable forms of insurance.

Judge Munley denied the Defendant's motion in limine under the rationale that the future medical expenses evidence at issue could not deemed be "payable" under the law because there was no guarantee that the Plaintiff would still have such health insurance in place at the time the bills were incurred in the future to pay for those medical expenses.

More specifically, Judge Munley wrote:

"The word “payable” in Act 6 can have many meanings, such as “owed, to be paid, due”. Future medical payments are not currently due and outstanding. The defendants cannot guarantee that any future expenses will in fact be paid. It is merely speculation. For instance, plaintiff's insurer could become bankrupt, or deny future medical bills for a variety of reasons. We agree with the plaintiffs. Because the insurance benefits are not necessarily due and owing at this time and nothing could compel the insurer to pay a lump sum for future expenses, plaintiffs future medical bills are not “payable” under Act 6. Fairness and public policy dictate that the burden of any risk or speculation should fall on the defendants, not plaintiffs."

Judge Munley therefore found that, since the future medical expenses were not "payable" under any form of applicable insurance, the future medical expenses could be pled, proven, and recovered by the Plaintiff at trial.

Judge Munley's decision can be contrasted by the opposite decision reached on the same issue by Judge Terrence R. Nealon of the Lackawanna County Court of Common Pleas case of Orzel v. Morgan, No. 03-CV-4929 (Lacka. Co. 2008 Nealon, J.), an automobile accident case in which I was the defense counsel.

In Orzel, a pre-trial motion in limine was filed on behalf of the defense seeking to limit the Plaintiff's introduction of evidence of substantial future medical expenses that the defense asserted were "payable" under the Plaintiff's remaining first party medical benefits coverage and/or the Plaintiff's available health insurance.  This issue was raised again in post-trial motions filings as well.

The Plaintiff in Orzel argued that future medical expenses could not be regarded as "payable" under 75 Pa.C.S.A. Section 1722 as her first party benefits carrier, Erie Insurance Exchange, "could become bankrupt" or may deny payment of future medical bills through a peer review process.  The Plaintiff also asserted that there was no statute or case law applying the "paid or payable" language to future medical expenses claims.

As noted in his Opinion on the post-trial issues presented, Judge Nealon had granted the Defendant's pre-trial motion in limine in this regard and also ruled in the same fashion when the issue was revisited in the post-trial motions stage.

More specifically, Judge Nealon found that the alleged future medical expenses were indeed "payable" under the Plaintiff's remaining first party medical benefits coverage.  Citing a series of cases, Judge Nealon noted that the word "payable" is generally defined as capable of being paid, or suitable to be paid, or legally enforceable.

Judge Nealon also noted that, in the case of Schroeder v. Schrader, 682 A.2d 1305, 1310 (Pa.Super. 1996), the Pennsylvania Superior Court  held that "[a]bsent a statutory or judicial definition to the contrary, the word 'payable' plainly refers to a claimant's entitlement to future payments, until such time as the payments are modified or terminated."

As such, Judge Nealon noted that the Plaintiff had failed to offer any proof in support of the contention that the medical expenses would not be paid in the future by the available first party benefits coverage and he therefore found that the Plaintiff's alleged future medical expenses were indeed "payable."  Accordingly, the portion of alleged future medical expenses that could be covered by the remaining PIP medical benefits were not recoverable under the Motor Vehicle Financial Responsibility Law.

As such, Judge Nealon's decision in Orzel supports a contention that future medical expenses can be deemed to be "payable" under appropriate insurance coverages possessed by a plaintiff at the time of a trial.

It is noted parenthetically that the Orzel opinion arguably also stands for the proposition that the burden of proving that medical expenses are not "paid or payable" rests with the Plaintiff.  See also Grant v. Baggott, 36 Pa.D.&C.4th 298, 310, 723 A.2d 240 (Pa.Super. 1998), appeal denied 734 A.2d 394 (Pa. 1998)("Plaintiffs have failed to meet their burden of demonstrating that these benefits were not either paid or payable pursuant to Section 1722 of the Act.").

In Orzel, Judge Nealon was faced with the additional dilemma of how to handle the situation where the Plaintiff was offering evidence of the alleged potential of substantial future medical expenses in a dollar amount that exceeded any available  insurance coverage that such expenses would be "payable" under. 

More specifically, the Plaintiff in Orzel had about $85,000 in PIP medical benefits coverage remaining but was offering evidence through a medical expert that the future medical expenses would amount to hundreds of thousands of dollars.

As noted, the defense in Orzel argued that those future medical expenses that remained "payable" should not be admitted into evidence as they were not recoverable under Pennsylvania law.  The defense also asserted, in reliance upon the case of Pittsburgh Neurosurgy Assoc., Inc. v. Danner, 733 A.2d 1279 (Pa.Super. 1999) appeal denied, 751 A.2d 192 (Pa. 2000), that before any other recoverable future medical expenses are presented to a jury, they should first be reduced in accordance with Act 6 of the Pennsylvania MVFRL (75 Pa.C.S.A. 1797).

The Plaintiff asserted that the case of Moorehead v. Crozer Chester Medical Center, 765 A.2d 786 (Pa. 2001) supported her contention that the full amount of any and all future medical expenses should be admitted, without reference to any Act 6 reduction.  The Plaintiff also asserted that, since there was no legal authority on point to the contrary, the Plaintiff should be allowed to recover the full or entire amount of future medical expenses awarded by the jury without an offset or credit to the defense in the amount of any remaining policy limits of any policy those future medical expenses remained "payable" under.

Although Judge Nealon had ruled that future medical expenses could be "payable" under applicable available insurance and, therefore, not recoverable, in this scenario set forth in Orzel where the Plaintiff had potential future medical expenses well in excess of the available insurance coverage, Judge Nealon allowed the Plaintiff to put before the jury all of the evidence of future medical expenses subject to a post-verdict molding proceeding. 

He also noted that, if the Plaintiff's expert did not testify that this evidence of future medical expenses had not been reduced in accordance with Act 6, the defense could cross-examine the Plaintiff's medical expert concerning the statutory requirement under 75 Pa.C.S.A. Section 1797 that the medical care provider accept a reduced sum as full payment for the medical services provided.

Under Judge Nealon's framework, the future medical expenses awarded by the jury could be made the subject of a post-verdict molding proceeding whereby the defense could request that the full amount of medical expenses awarded by the jury be reduced by Act 6 and then offset by any amounts of PIP coverage or applicable health insurance coverage under which those future medical expenses remained "payable."

Judge Nealon rejected the argument of the defense in Orzel that one potential problem with this framework is that the Act 6 reduction of future medical expenses may not be possible because there are no actual medical bills incurred yet to apply to the very specific formula set forth under Act 6 for the determination of the reduced amount of the medical bills that are recoverable.  Apparently, that issue can be resolved by the presentation of expert testimony from each side by a medical expert or life care planning expert, "to a reasonable degree of certainty," as to what the Act 6 reduced amount of medical expenses would be.

Orzel was settled by the parties prior to the case going up on appeal. This issue therefore remains a tricky one and, to date, there does not appear to be any appellate guidance on point with regards to how to handle the presentation of future medical expenses at an automobile accident trial, including the issues of the Act 6 reduction and the mandate that any medical expenses that remain "paid or payable" are not recoverable by the plaintiff.


I thank Attorney Paul Oven of the Moosic, Pennsylvania office of the law firm of Dougherty, Leventhal & Price for bringing the case of Kansky v. Showman to my attention.

Anyone desiring a copy of Federal Middle District Court Judge James Munley's opinion in Kansky or Judge Terrence R. Nealon's opinion in the case of Orzel v. Morgan may contact me at dancummins@comcast.net.

Another Decision Setting Parameters for Bad Faith Claim in First Party Medical Benefits Context

On June 25, 2010, Judge James M. Munley of the Federal District Court for the Middle District Court of Pennsylvania issued an Opinion in the case of Hickey v. Allstate Prop. and Cas. Ins. Co., No. 3:10cv00907 (M.D.Pa. June 25, 2010, Munley, J.) in which he granted the carrier's F.R.C.P. 12(b)(6) Motion to Dismiss the Plaintiff's bad faith claim in a first party medical benefits case.

In Hickey, he Plaintiff was injured in a car accident and began to recieve first party medical benefits under his own policy with Allstate for the payment of his medical treatment. Allstate paid the benefits for about two years and then stopped the payments on the basis of an independent medical examination which led the examining doctor to conclude that the Plaintiff had reached maximum medical improvement.

In response, the Plaintiff sued Allstate in state court for breach of the insurance contract and bad faith under 42 Pa.C.S.A. Section 8371. Allstate removed the matter to Federal Court and filed a Motion to Dismiss primarily asserting that the Motor Vehicle Financial Responsibility Law, i.e. 75 Pa.C.S.A. Section 1797, provided for the exclusive remedies for the type of claim brought by the Plaintiff, thereby pre-empting any claim under the bad faith statute found at Section 8371. Judge Munley agreed with the carrier's position.

The Judge noted that, since there was no Pennsylvania Supreme Court precedent on the issue, he had to predict how that court would address this issue. Reviewing the case law from other Pennsylvania federal court decisions, Judge Munley held that "section 8371 is preempted by section 1797 where an insured alleges only that an insurer wrongly denied payment of first-party medical benefits based on a determination of the propriety of treatment and associated charges."

The Judge further explained that "[c]laims based on allegations outside this narrow scope, such as a claim involving contract interpretation, a claim of abuse of the PRO process, or a claim disputing the cause of the injury, go beyond the scope of section 1797 and may be pursued under section 8371." Citing Perkins v. State Farm, 589 F.Supp. 559 (M.D.Pa. 2008).

Reviewing the Plaintiff's allegations in this matter, Judge Munley determined that the bad faith allegations were preempted by section 1797 because the dispute over the findings of the IME doctor revolved around a dispute over whether the Plaintiff's treatment was reasonable or necesary. As such, the Plaintiff's claim was found to trigger the remedies and procedures found under section 1797 of the Motor Vehicle Financial Responsibility Law.

However, Judge Munley did allow a portion of the Plaintiff's section 8371 bad faith claim to stand. The court found that the Plaintiff's claims that the Defendant carrier "had and has a practice of attempting to terminate medical treatment by 'independent medical examination' without reasonable cause to do so," were claims that alleged an abuse of the PRO process. Judge Munley found that those types of claims stated a cause of action for bad faith under section 8371 that were not preempted by section 1797.


I note that Judge Munley decision in Hickey, i.e. that where a Complaint specifically alleges culpable misconduct both within and beyond the coverage of the specific statutes of the MVFRL, then the remedies under the general bad faith statute at §8371 (i.e., punitive damages, costs and interest) may additionally apply as well, is consistent with two recent decisions out of the Lackawanna County Court of Common Pleas by Senior Judge Harold A. Thomson, Jr. and Judge Carmen D. Minora. See Skiro v. Erie Ins. Exchange, No. 09-CV-7077 (Lacka Co. May 19, 2010 Thomson, S.J.); Veltri v. Travelers Commercial Insurance Company, 08-CIVIL-8534 (Lacka. Co. September 2, 2009 Minora, J.)

Click on this link to go to my June 11, 2010 synopsis of those Lackawanna County decisions
on Tort Talk: http://www.torttalk.com/2010/06/bad-faith-claim-allowed-to-proceed-in.html.

Federal Middle District Court Judge Munley Allows Nurse to Testify on Causation in Trucking Accident Case

In a recent May 28, 2010 Memorandum and Order in the case of Earls v. Sexton and Landstar Ranger, Inc., No. 3:09cv950 (M.D.Pa. 2010 Munley, J.), Judge James M. Munley of the United States District Court for the Middle District of Pennsylvania ruled that a nurse would be allowed to testify on causation at trial in a trucking accident case.

The Plaintiff in this matter allegedly sustained physical and psychiatric damages as a result of an accident with a tractor trailer. The Plaintiff identified a psychiatric nurse practitioner as a witness in support of her claims for psychological damages. The nurse had treated the Plaintiff both before and after the accident and was prepared to testify that the accident had worsened the Plaintiff's condition.

Judge Munley denied the defense motion in limine to preclude the nurse's testimony at trial. In doing so, rejected the defense's reliance upon the Pennsylvania Professional Nursing Law, 63 Pa.C.S. 211, and noted that the Pennsylvania Supreme Court had previously rejected the same argument and ruled in the case of Freed v. Geisinger Medical Center, 971 A.2d 1202, 1208 (Pa. 2009) that nurses could testify as experts where properly qualified to do so. As such, Judge Munley denied the defense motion in limine.

An analysis of the Freed opinion here on Tort Talk can be found at this link: http://www.torttalk.com/2009/06/pennsylvania-supreme-court-reverses.html

The prevailing Plaintiff's attorney in this Earls decision by Judge Munley was Attorney James Conaboy of the Scranton, Pennsylvania law firm of Abrahamsen, Conaboy & Abrahamsen.

Anyone desiring a copy of this Opinion and Order may contact me at dancummins@comcast.net.

Thanks to Attorney Paul Oven of the Moosic, Pennsylvania law firm of Dougherty, Leventhal & Price for bringing this case to my attention.

Federal Middle District Court of Pennsylvania Addresses Post-Koken Issue

In Bukofski v. USAA Casualty Ins. Co., 2009 WL 1609402, No. 3:08-CV-1779 (M.D.Pa. 2009, Munley, J.) a decision handed down three days ago on June 9, 2009, Federal Middle District Judge James M. Munley held in a post-Koken case that a plaintiff may proceed on a bad faith claim against an insurance company who issued a new insurance policy without an arbitration clause without notifying the insured-plaintiff of the removal of the arbitration clause from the policy.

The Bukofski case arose out of a motor vehicle accident that occurred on October 11, 2007. The plaintiff eventually filed a lawsuit against her own carrier USAA alleging that, among other things, the carrier purposefully withheld first party benefits and UIM benefits with respect to the accident. The case was filed in Luzerne County, removed to the Middle District Federal Court and came before Judge Munley on the defendant carrier's Motion to Dismiss.

With respect to the allegation that the carrier had acted in bad faith by unilaterally removing the arbitration clause from the UIM portion of the policy without notice to the insured-plaintiff, the plaintiff complained that the carrier took such actions to delay the payment of UIM benefits and to attempt to secure leverage in settlement discussions by exposing the plaintiff to a protracted lawsuit as opposed to a quicker arbitration. The plaintiff was also upset that the carrier had removed the clause without explaining the ramifications of such removal on the plaintiff's ability to recover UIM benefits under the policy.

The carrier defended by arguing that the mere removal of the arbitration clause was not bad faith, particularly since the removal of the clause had happened months before the accident. The carrier also asserted that, in any event, it was within the rights of the carrier to remove the clause in light of the decision in Insurance Federation of Pennsylvania, Inc. v. Koken, 889 A.2d 550 (Pa. 2005), which held that automobile insurance policies in Pennsylvania are no longer required to include arbitration clauses.

Judge Munley noted that, after his review of the issue, he believed "it would be inappropriate to dismiss this part of the complaint at this time." The Judge was "not convinced" that the bad faith statute did not apply to the carrier's act of removing an arbitration clause from an insurance policy.

Judge Munley further noted that the "presence of an arbitration clause deals directly with the defendant's contractual obligations and clearly arise from the insurance policy." As such, the Judge ruled that "[i]f, as plaintiff asserts, the defendant removed the clause without notification to the plaintiff in order to force favorable settlements of UIM claims, then a statutory bad faith claim might be established." Accordingly, the carrier's Motion to Dismiss in this regard was denied.

Elsewhere in the opinion, Judge Munley also rejected the carrier's Motion to Dismiss the bad faith claim under a preemption argument. That is, the carrier argued that the plaintiff's bad faith claim was based primarily upon allegations of improper conduct by the carrier with respect to the carrier's handling of the plaintiff's separate first party medical benefits claim.

More specifically, the defendant carrier asserted that the plaintiff's statutory Section 1783 bad faith claim was thereby preempted by the remedies provided by statutes related to first party medical benefits claims, such as Section 1797 of the Motor Vehicle Financial Responsibility Law.

Judge Munley disagreed with this assessment and found that, based upon the allegations of the Complaint, it was clear that the plaintiff was making a bad faith claim based upon the carrier's handling of the UIM claim and not the carrier's handling of the first party medical benefits claim. The Judge noted that "[m]erely because some of the bad faith evidence alleged by the plaintiff relates to first-party medical benefits claim does not mean that the bad faith claim with regard to the handling of the UIM claim is preempted." Accordingly, the carrier's Motion to Dismiss based upon MVFRL preemption was denied.

In his opinion, Judge Munley did grant some portions of USAA's Motion to Dismiss. The Court agreed with the carrier that the plaintiff's count in the Complaint of an alleged failure of the Defendant to comply with the duties of good faith and fair dealing in handling the plaintiff's insurance claims should be dismissed as Pennsylvania law does not recognize a separate common law remedy to an insured for a violation of an implied duty of good faith and fair dealing with respect to the breach of an insurance contract. Rather, this type of claim was found to merge with, and be a part of, the plaintiff's separately asserted breach of contract claim.

Similarly, the Court also granted the Defendant's Motion to Dismiss the plaintiff's claim of a breach of a fiduciary duty with regards to the facts alleged. While the Court rejected the carrier's contention that there was no fiduciary duty between the carrier and its insured, the Court did dismiss this count of the Complaint finding that the breach of fiduciary duty claim was redundant of the breach of contract claim.

Judge Munley also dismissed the plaintiff's claim that the Defendant carrier had acted negligently towards her as that claim was subsumed by the breach of fiduciary duty claim. Also, as the parties' relationship was by contract, the separate tort action was barred by the "gist of the action" doctrine under Pennsylvania law. Judge Munley also rejected the plaintiff's claim of negligent infliction of emotional distress claim in this bad faith claim.

The remainder of the opinion addresses procedural issues with respect to the wording of the Complaint.

It remains to be seen whether this case will be (or even can be at this stage) appealed to the Third Circuit. Plaintiff's counsel is Tim Lenahan of the Scranton law firm of Lenahan & Dempsey, and John Nardone, Esquire. USAA was represented by Attorneys Bryon Kaster and Charles E. Haddick, Jr. both of the Camp Hill law firm of Dickie, McCamey & Chilcote, P.C.

Thanks to Paul Oven, Esquire of the Moosic law firm of Dougherty, Leventhal & Price for bringing this case to my attention.