TRENDING: Judge Legg of Susquehanna County Rules Extraneous Insurance Information Inadmissible in a Post-Koken Trial

As recently promised, here is the Tort Talk blog post on the Susquehanna County Court of Common Pleas decision in the Phillips case on the admission of evidence of insurance issues in a Post-Koken matter.

In the case of Phillips v. National General Assurance Company, No. 2016-959 (C.P. Susq. Co. Nov. 16, 2018 Legg, P.J.), President Judge Jason J. Legg of the Susquehanna County Court of Common Pleas granted a UIM carrier’s Motion In Limine to exclude extraneous evidence relating to insurance.  

In this detailed Order, the court additionally directed the parties to prepare Proposed Jury Instructions explaining the nature of the litigation to the jury that avoids referencing the extent of the coverage limits.   In this regard, the judge cited with the signal “c.f.” (which is a "compare" signal) Judge Terrence R. Nealon’s decision in the case of Kujawski v. Fogmeg, 2015 WL 1726534 (C.P. Lacka. Co. 2015) (providing a jury instructions explaining the nature of UIM coverage and the insurance company’s potential liability).  

In rendering his decision, President Judge Legg, noting that there was no Pennsylvania state appellate court decisions on the issue of admissibility of insurance evidence at Post-Koken trials. 

The Judge pointed to recent Pennsylvania federal court decisions and, after a review of those cases, found that “there is very little, if any, probative value to the extraneous insurance contract evidence” in the Phillips case before him where there was no dispute regarding the existence of an insurance contract between the parties or the obligation of the carrier to provide UIM benefits, both of which issues had been conceded by the carrier.  

Accordingly, Judge Legg agreed with the reasoning that the extent of the coverage limits has no probative value as to the damages suffered by the Plaintiffs and the prejudice to the Defendant will be substantial as [such evidence would] provide the jury with an “anchor number” that may unduly influence the damage award.   In this regard, the court cited, among other decisions, the following:

Lucca v. GEICO Insurance Company, 2016 WL 3632717 (E.D. Pa. 2016).  The Order in Lucca can be viewed at this LINK and the Opinion at this LINK.
 

Schmerling v. LM General Insurance Company, Inc., 2018 WL 5848981 (E.D. Pa. Nov. 8, 2018).  The Order in Schmerling can be viewed HERE and the Opinion at this LINK.
 

Ridolfi v. State Farm Mutual Automobile Insurance Company, 2017 WL 3198062 (M.D. Pa. 2017 Mag. J.) (Excluding evidence of premium payments in breach of contract action between insured and insurer).  The Opinion by the Federal Magistrate Judge can be viewed at this LINK.
 

Anyone wishing to review a copy of the Phillips Order issued by President Judge Legg of the Susquehanna County Court of Common Pleas may click this LINK.

I send thanks to Attorney Gerald Connor of the Scranton, Pennsylvania office of Margolis Edelstein for bringing this decision to my attention.  
 

Sample Post-Koken UIM Trial Jury Instructions From Judge James A. Gibbons of Lackawanna County

My associate attorney, Stephen T. Kopko, ran the defense at a straight Post-Koken UIM jury trial last week in the Lackawanna County County Court of Common Pleas in the case of Singer v. State Farm, No. 15-CV-2859.

Here is a LINK to a copy of the printout of the UIM jury instruction Judge James A. Gibbons presented to the jury over our objection on behalf of the defense.

Judge Gibbons noted that this jury instruction was based on the instruction that Judge Terrence R. Nealon utilized in the case of Moritz v. Horace Mann Ins. Co. which is written up HERE on Tort Talk.

Judge Nealon Rules in Favor of Consolidation for Post-Koken Trials (And Also Rules on Appropriate Jury Instructions)

In his April 15, 2015 decision in the case of Kujawski v. Fogmeg and Allstate, No. 2012-CV-3395 (C.P. Lacka. Co. April 15, 2015, Nealon, J.), Judge Terrence R. Nealon of the Lackawanna County Court of Common Pleas issued another notable post-Koken decision in which he became one of the first few judges from across the Commonwealth of Pennsylvania to address the issue of whether or not a post-Koken third party/UIM matter should proceed to trial in a consolidated or bifurcated fashion - - Judge Nealon came down on the side of the consolidation and against bifurcation.  

However, Judge Nealon did rule that separate coverage issues presented with respect to the UIM claim should and would be bifurcated from the liability and damages claims presented in the negligence and UIM matters.  

According to the Opinion, the issue before the court revolved around whether a Plaintiff’s third party liability claim and underinsured motorists (UIM) claim may be tried in a single proceeding before the same jury, and if so, what jury instructions should be provided regarding the named parties and the questions to be decided by the jury.

In this matter, the tortfeasor Defendant was objecting to a consolidated trial with an insurance company as a Co-Defendant.  According to the Opinion, the UIM carrier did not object to a consolidated trial. 

Judge Terrence R. Nealon
Lackawanna County

Judge Nealon ruled that, since the potential liabilities of the tortfeasor and the UIM carrier for damages arose out of the same factual background and involved common questions of law in fact, the Plaintiff’s liability and UIM claims would be consolidated for a single trial pursuant to Pa. R.C.P. 2229(b).  

The court also ruled that, given that the identification of the UIM carrier as a real party in interest and as a potential provider of UIM coverage did not introduce evidence of the tortfeasor’s liability insurance in violation of Pa. R.E. 411, the UIM carrier would be identified to the jury as a named Defendant who was furnishing prospective UIM coverage.  Judge Nealon noted that this identification of the UIM carrier by name as well as the reason as to why that carrier was in the case was necessary so that the jury would understand the participating UIM insurance carrier’s status as an adverse party to the Plaintiff.  

As noted above, Judge Nealon separately ruled that the UIM coverage dispute involving the Plaintiff’s residency and her entitlement to UIM benefits from the UIM carrier did not arise out of the same occurrence or involve common questions of law or fact as the parties’ liability and damages disputes.  Accordingly, the court ruled that the trial would be bifurcated on that separate issue pursuant to Pa. R.C.P. 213(b).  The court noted that the jury would first address the merits of the Plaintiff’s personal injury claims and render a verdict on the liability and damages issues.  

Judge Nealon went on to note that, if the jury awarded damages in excess of the tortfeasor’s liability insurance policy limits, such that UIM coverage was triggered, the second phase of trial would be conducted on the coverage issue to determine whether the Plaintiff was a resident of her grandparents’ home at the time of the accident so as to be entitled to UIM benefits under that UIM policy at issue.

Judge Nealon further noted that, in the event a jury awards damages in an amount less than the tortfeasor’s liability insurance limits, the issue of the Plaintiff’s residency and the applicability of her grandparents’ UIM coverage would be rendered moot.

In his thorough Opinion on the issue of joinder or bifurcation of post-Koken claims at trial, Judge Nealon confirmed that he had reviewed the law of other jurisdictions in this case as well as in his prior decision in the case of Bingham v. Poswistilo, 24 Pa. D. & C. 5^th 17 (C.P. Lacka. Co. 2011 Nealon, J.), which research revealed that of the decisions on the separate, but similar, issue of consolidation/severance at the commencement of the case arising out of 33 other states, 27 jurisdictions allowed for the joinder of UM/UIM claims with civil actions against tortfeasors, while six (6) states favored severance of UM/UIM claims from tort actions.  

In ruling that liability in UIM claims may be joined for a single trial, Judge Nealon relied in part on the Pennsylvania Superior Court decision in Stepanovich v. McGraw and State Farm, 78 A.3d 1147 (Pa. Super. 2013), appeal denied, 89 A.3d 1286 (Pa. 2014).

 

On the separate issue of the content of the jury instructions for a Post-Koken trial, the Plaintiff requested the court to utilize those instructions Judge Nealon had crafted in his prior decision in the case of Moritz v. Horace Mann Property and Casualty Insurance Company, 2014 W.L. 5817681 (C.P. Lacka. Co. 2014 Nealon, J.).  The court noted that Allstate objected to certain portions of those jury instructions set forth in the Moritz case.  

The tortfeasor Defendant was additionally arguing that neither the identity of the UIM carrier as a party, nor the question of the Plaintiff’s UIM claims, should be disclosed to the jury in the jury instructions.  

Judge Nealon agreed that the entirety of his proposed jury instructions as crafted in the Moritz case should not be read to the jury in this matter as the jury instructions drafted in the Moritz case were “appropriate only a case in which the Plaintiff has sued the UIM insurer alone after having secured payment of the tortfeasor’s insurance policy limits.”  

For this reason, Judge Nealon agreed to somewhat limit the extent of his jury instructions in this case involving both a negligence claim against the third party tortfeasor and a UIM claim against the Plaintiff’s own carrier.  The court also tailored its jury instructions in this matter in light of the separate coverage dispute that was still pending with regards to the potential UIM claim.  

Overall, Judge Nealon agreed that the jury instructions in this matter should not reference the existence or amount of the tortfeasor’s liability insurance coverage as that would prejudice the tortfeasor in violation of the mandate under Pa. R.E. 411 prohibiting any reference to a tortfeasor's liability coverage at trial.  

In this Kujawski case, Judge Nealon stated that he would instruct the jury that the Plaintiff was required by law to establish by a preponderance of the evidence that the tortfeasor was negligent, that the tortfeasor’s negligence caused harm to the Plaintiff, and that the Plaintiff suffered damages as a result of her injuries.  

The court noted that the jury would also be informed in this Post-Koken matter that the policy of the UIM carrier (referenced by name in the instructions) provided underinsured motorists coverage, which may be available to pay some of the damages that may be awarded. 

Judge Nealon also planned to instruct the jury that the UIM carrier (again, referenced by name) should not be treated “any differently than any other Defendant in a civil action simply because [name of the UIM carrier] is an insurance company.”  

Judge Nealon also ruled that, given his ruling in favor of bifurcation on the separate coverage issue, the jury would also be advised that, depending upon its verdict at the conclusion of the liability and damages portion of the trial, the jury may be required to hear additional evidence and render a second verdict with regards to the Plaintiff’s residency at the time of the accident.    

Anyone wishing to review this Opinion may click this LINK. 

I send thanks to Attorneys Chad DeFelice and Joseph Pulcini, Jr. of the Bethlehem, PA office of the Thomas, Thomas & Hafer law firm for bringing this case to my attention.

Monumental Opinion on Post-Koken Trial Jury Instructions From Judge Terrence R. Nealon of Lackawanna County

In his recent decision in the case of Moritz v. Hora ce Mann Insurance, 2014 WL 5817681, No. 2013-CV-544 (C.P. Lacka. Co. Nov. 10, 2014 Nealon, J.), Judge Terrence R. Nealon addressed important issues with respect to a post-Koken automobile accident matter that is headed towards trial.  

In what appears to be the first reported decision on the issue, Judge Nealon set forth the instructions that he would provide to the jury in a UIM jury trial.  

According to the Opinion, the defense wanted minimalist instructions to the jury that this matter involved an admitted liability accident for which the jurors were to decide the amount of damages recoverable.   In contrast, the Plaintiff was requesting some explanation of the UIM coverage and claims presented.  

Judge Nealon noted that there are no standard jury instructions for UIM trials that have been promulgated to date.  Accordingly, he reviewed jury instructions from other states and then formulated his own instructions.  

Judge Terrence R. Nealon
Lackawanna County

In so ruling, Judge Nealon referred to his prior decision in the case of Bingham v. Poswistilo, 24 Pa. D. & C. 5^th 17, 44 (C.P. Lacka. Co. 2011, Nealon, J.) for the proposition that not only made Pennsylvania trial courts join and try tort UIM claims in a single action without running afoul of Pa. R.E. 411, pertaining to “Liability Insurance,” and that a trial court may consider evidence of insurance as being offered for another purpose under Rule 411 such that a UIM carrier was allowed to be identified to the jury and the tort and UIM issues could be tried jointly as guided by “carefully crafted instructions to the jury.”  

Judge Nealon noted that the Pennsylvania Superior Court more recently addressed the application of Pa. R.E. 411 in a jury trial where a liability and UIM claim are joined for a single trial and held that “a course of action identifying [the UIM insurer] as a party would not necessarily run afoul of…. Rule 411” in such a trial.  Moritz, citing  Stepanovich v. McGraw, 78 A.3d 1147, 1150 (Pa. 2013), appeal denied, 89 A.3d 1286 (Pa. 2014).  

In Moritz, Judge Nealon stated that he would instruct the jury, as follows:

(1)  Plaintiffs have brought this action against their own insurance company under coverage known as underinsured motorist coverage, which served to provide compensation to a Plaintiff for damages that would have been recoverable if the underinsured motorist had maintained an insurance policy which adequately covered the Plaintiff’s damages from an accident;

(2) To recover against the Defendant, the Plaintiff must prove that the other driver was negligent, that the negligence caused harm to the Plaintiff, and that the other driver did not have adequate liability insurance;

(3) The Defendant had stipulated that the Plaintiffs’ insurance policy provides underinsured motorist coverage and that the policy was in effect at the time of the accident, such that the jurors need not concern themselves with the specifics of the policy;

(4) The Defendant has also agreed that the other driver was negligent and caused the accident, such that the jury need only determine whether the Plaintiff suffered harm as a result of the accident and, if so, what amount of money damages will fairly and adequately compensate the Plaintiff;

(5)  The fact that the Plaintiffs are suing the Defendant for underinsured motorist benefits suggests that the other driver had some insurance which was recovered by the Plaintiff;

(6) The Plaintiffs will not receive compensation twice for the same damages since any jury award of damages in this case will be reduced by any amount that the Plaintiffs have already received from the other driver and her insurer;  and,

(7)  The jury should determine an amount of money damages that will fairly and adequately compensate the Plaintiff for all the physical and financial injuries they have sustained as a result of the accident, without consideration of any amount that the Plaintiff may have received from the other driver or her insurer, since any such amount will be deducted by the court from the total sum that the jury may award.  

 

In his Opinion, Judge Nealon went on to more specifically apply the above to the facts of the case presented in terms of the jury instructions to be provided.  

 

The Moritz decision by Judge Nealon is also notable with respect to a Motion In Limine filed by the Plaintiff seeking to introduce evidence that the same insurance company paid for the  Plaintiff’s total treatment and surgery under the first party medical benefits coverage as a means of rebutting the carrier’s argument, as a UIM Defendant, that the Plaintiff’s shoulder injury and surgery were not accident related.

The court sustained the UIM carrier’s objections to that evidence and ruled it inadmissible.   In support of this ruling, Judge Nealon relied upon the case of Pantelis v. Erie Insurance Exchange, 890 A.2d 1063 (Pa. Super. 2006).  

In Pantelis, the same argument was raised by the Plaintiff.  However, the Superior Court noted that “[t]he statutory framework and applicable case law establishes that payment of UM/UIM claims is subject to a different analysis then payment of first party benefits.”  Pantelis, 890 A.2d at 1068.  

Accordingly, the Pantelis court ruled that “the trial court directly determined that  payment of first party benefits does not preclude an insurer and later denying third party UM/UIM benefits” since “an insurer’s payment of first party benefits does not, without more, constitute a binding admission of causation under either the statute or case law.”  Id. at 1067-68.   Judge Nealon cited a number of other federal courts reaching the same conclusion.  

Judge Nealon also ruled that, even if this evidence is found to arguably be relevant, its probative value was outweighed by the danger of unfair prejudice since the admission of that evidence could sway the jury to render a verdict on an improper basis.   The court noted that the admission of the fact that the insurance company had paid medical expense benefits could be equally prejudicial to both the injured party Plaintiff and the insurance company Defendant.  For example, the jury could conclude that those medical expense payments, like the payment that the Plaintiff already received from the liability carrier, should likewise be deducted from its award of damages and thereby reduce its verdict without prompting or suggesting by the court.  

As such, Judge Nealon denied the Plaintiff’s request to utilize the evidence at issue. 

Anyone wishing to review this decision of first impression in Pennsylvania by Judge Terrence R. Nealon in Moritz may utilize the above Westlaw citation or click this LINK.

It is noted that the prevailing Plaintiff's attorney in this Moritz case is Attorney John Mulcahey of the Scranton office of the Munley Law Firm.