Arbitration Clause Under an App Ruled Unenforceable

In the case of Pierce v. Floatme Corp., No. GD 24-2169 (C.P. Allegh. Co. Dec. 19, 2024 Hertzberg, J.), the trial court overruled preliminary objections filed by a loan provider called Floatme Corp. in which the loan provider sought to have the class action filed against it dismissed pursuant to an arbitration clause contained within the provisions noted in the smartphone app when customers downloaded the app. 

In so ruling, Judge Hertzberg found that the arbitration provisions were not conspicuous enough for the users of the app so as to uphold any alleged arbitration agreement.  More specifically, the court found that  a "meeting of the minds" on the issue of arbitration was lacking in the case presented.  There was no unambiguous assent to arbitration by the customers in this case.

In his decision, Judge Hertzberg referred to a split Superior Court ruling in the case of Chilutti v. Uber Technologies.  In that Chilutti case, the Superior Court ruled that a binding arbitration agreement found in the Uber app failed to provide sufficient notice to customers that they were, in fact, agreeing to arbitration in the event of disputes and thereby waiving their right to a trial.  That Chilutti case is currently up before the Pennsylvania Supreme Court on appeal.

The Tort Talk post on the Chilutti case can be viewed HERE.

A copy of the Pierce v. Floatme Corp. case summarized in this Tort Talk blog post can be viewed at this LINK.

I send thanks to Thomas J. Foley, III if the Foley Law Firm in Scranton, PA for bringing this decision to my attention.

Court Dismisses Claims of Negligent Hiring and Supervision, as well as Negligent Entrustment, Against Lyft

In the case of Henry v. Marcelin, No. 24-1891 (E.D. Pa. Sept. 25, 2024 Arteaga, J.), a judge in the Eastern District Federal Court of Pennsylvania granted the Defendant rideshare company’s Motion for Partial Judgment on the Pleadings in a personal injury case arising out of a motor vehicle collision.

According to the Opinion, the Plaintiff was a passenger that was involved in a motor vehicle accident that involved a rideshare vehicle.

Among her claims, the Plaintiff alleged that the Defendant, rideshare company (Lyft), was responsible on theories of negligent hiring and negligent entrustment. The Defendant rideshare company sought a partial judgment on the pleadings, arguing that the Plaintiff’s claim alleging negligent hiring, retention, training, and supervision, along with a claim for negligent entrustment, failed to state a claim within relief could be granted.

The court granted the rideshare defendant’s motion after finding that the Plaintiff failed to identify any past misconduct by the driver of the rideshare vehicle that would have put a reasonable employer on notice of an employee’s propensity for dangerous activities. The court also noted that there were no allegations offered by the Plaintiff to support an inference that the Defendant rideshare company knew that its driver was allegedly unqualified.

The court declined to recognize a genuine duty to investigate on the rideshare company’s part.

Accordingly, the court dismissed the Plaintiff’s claims of negligent hiring and related claims. 

The court also dismissed the claims for negligent entrustment. These claims were dismissed without prejudice and with leave granted to the Plaintiff to amend on the chance that the Plaintiff might be able to allege facts sufficient to state a claim upon which relief could be granted.

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


Source “Digest of Recent Opinions.” www.Law.com (Pennsylvania Law Weekly) (Oct. 11, 2024).

Motion To Dismiss Personal Injury Claims Against Lyft Denied

In the case of Doe v. Lyft, Inc., No. 2:23-cv-03990-KSM (E.D. Pa. July 19, 2024 Marston, J.), the court addressed a Motion to Dismiss filed by a transportation network company, Lyft, Inc., and its former driver in connection with an alleged sexual assault committed by the driver.  The court granted the Motion to Dismiss but allowed the Plaintiff the right to amend.  

In part, the court held that the Plaintiff failed to allege an actionable claim for negligent supervision where she alleged, for the first time in opposition to the Defendant’s Motion to Dismiss, that its driver was the subject of four prior passenger complaints.  The court allowed the Plaintiff leave to file an Amended Complaint to more specifically plead the negligent supervision claim.  

The court also found that the Plaintiff’s negligent undertaking claim failed for two reasons. First, the court found that the Plaintiff failed to allege that the Defendant undertook to protect her from its ride share driver.  While the Plaintiff seemed to link the Defendant’s provision of ride share services with a duty to protect her from harm as a rider, the Plaintiff did not allege a “specific undertaking” by the Defendant in that regard.  

Additionally, the court found that, even if the Defendant allegedly undertook a duty to protect the Plaintiff, the Plaintiff failed to state a claim for negligent undertaking because she asserted only that the Defendant should have provided additional safety features on its platform, not that it implemented its existing scheme negligently.  

Accordingly, the court dismissed the Plaintiff’s negligent undertaking claim.  However, this claim was dismissed without prejudice to the Plaintiff’s right to file an Amended Complaint.

The Plaintiff’s separate negligent misrepresentation claim broadly alleged that the Defendant falsely advertised itself as a safe rideshare option.  The court dismissed this part of the claim after finding that, to the extent the Plaintiff did allegedly identify actionable statements by the Defendant in its marketing materials, the Plaintiff still failed to plead facts suggesting that these statements were false and, as such, the Plaintiff had not stated a valid claim of negligent misrepresentation.  Although the court dismissed this claim as well, the Plaintiff was again allowed an opportunity to file an Amended Complaint.

The court also dismissed the Plaintiff’s claim for punitive damages, without prejudice.  The court allowed the Plaintiff the opportunity to replead those allegations should she have facts to support the same. 

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

Source “The Legal Intelligencer Federal Case Alert,” www.Law.com (Aug. 9, 2024). 

Source of above image: Photo by Thought Catalog on www.unsplash.com.

Is Uber's Arbitration Clause Enforceable?

In the case of Chilutti v. Uber Technologies, Inc., No. 1023 EDA 2021 (Pa. Super. July 19, 2023 en banc) (Op. by McCaffery, J.)(Stabile, J., Dissenting), a split Pennsylvania Superior Court ruled that the Plaintiffs were not bound by arbitration agreement that was contained within a set of hyper linked “terms and conditions” on a website or a smart phone application that they never clicked upon, viewed, or read.  

Such "terms and conditions" contained an arbitration clause relative to any personal injury claims.

In ruling that a plaintiff is not bound by the arbitration clause under the facts and circumstances at issue in this case, a majority of the Pennsylvania Superior Court en banc panel upheld a Plaintiff’s constitutional right to a jury trial in a personal injury matter. 

This case is the first before a Pennsylvania appellate court to examine the waiver of a right to a jury trial in an online agreement.

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


Source: Article - “Split Pa. Superior Court Rules Uber’s Arbitration Clause is Unenforceable” by Aleeza Furman Pennsylvania Law Weekly (July 21, 2023).

Source of image:  Photo by Austin Distel from www.unsplash.com.

Arbitration Clause From Uber Not Enforceable Where Plaintiff Did Not Click On It -- Right to Jury Trial Upheld

In the case of Chilutti v. Uber Technologies, Inc., No. 1023 EDA 2021 (Pa. Super. Oct. 12, 2022 Stabile, J., Dubow, J., McCaffery, J.)(Maj. Op. by McCaffery, J.(Dissenting Op. by Stabile, J.), the Court held that an arbitration agreement offered by the Defendant via a set of hyperlinked “terms and conditions” on a website or smartphone app that was never clicked on, viewed or read by the Plaintiff was not enforceable against the Plaintiff.

The Plaintiff was wheelchair bound and injured while riding in a car provided by Uber on his way home from a medical appointment.

The Plaintiff filed a negligence claim in the court of common pleas but Uber argued that the case was subject to a mandatory arbitration agreement found in the hyperlinked terms and conditions.

The trial court upheld the arbitration agreement as being applicable and granted Uber’s motion to compel arbitration.

Emphasizing the importance of the constitutional right to a jury trial, the Superior Court reversed and held that the arbitration agreement could not be asserted against the Plaintiff as the Plaintiff had not affirmatively agreed to the arbitration clause. The appellate court instead found that the injured party could invoke his constitutional right to a jury trial.

In so, ruling the Superior Court also issued a new standard of review to be applied to the question of whether or not a party had unambiguously manifested an intent to assent to an arbitration clause. See Op. at p. 30-31.

Anyone wishing to review this interesting decision and the dissent may click this LINK.


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

ARTICLE: The Wheels Stopped Turning: An Unsettled Year All Around in MVA Law

This Year-End review article of mine on Motor Vehicle Accident Law in Pennsyvania was published by the Pennsylvania Law Weekly on December 17, 2020 and is republished here with permission.


The Wheels Stopped Turning: An Unsettled Year All Around in MVA Law

By Daniel E. Cummins | December 17, 2020

Daniel E. Cummins of Cummins Law.

While the wheels of motor vehicles stopped in large part for a time in 2020 as Americans cooped up at home and waited (and still wait) for the pandemic to subside, the wheels of justice kept turning in the form of notable decisions and developments in Pennsylvania motor vehicle accident law over the past year.

People Stopped Driving

Obviously, the rise of the COVID-19 pandemic was the news story of the year. In March and April of this year, the roads were mostly empty as people huddled up at home under unprecedented stay-at-home orders from the government.

Based on this drastic decrease in driving activity and the consequent dip in motor vehicle accidents, it is expected that there may be a reduction in auto accident claims in the future. However, the prospect of a downturn in auto accident claims and suits may be tempered by the fact that more limited tort claims may be pursued as a result as practitioners try to keep their numbers up. Whether the courts apply the serious injury threshold of the limited tort option to these cases will remain to be seen.

Law of Household Exclusion Unsettled

Back in 2019, the Pennsylvania Supreme Court handed down its decision in Gallagher v. Geico, 201 A.3d 131 (Pa. 2019), which represented a seismic shift in auto accident law as that court attempted to eradicate the household exclusion for the benefit of plaintiffs. In 2020, disagreement flowed out of the lower courts as to the application of that decision outside of the facts of the Gallagher case. Some courts followed the Gallagher v. Geico decision as eradicating the household exclusion and others did not, instead choosing to rule that that decision should be limited to its facts.

In the Pennsylvania federal courts, several judges followed the Gallagher v. Geico decision in opinions they handed down in 2020. In the Eastern District Court case of LM General Insurance v. LeBrum, No. 19-2144-KSM (E.D. Pa. July 1, 2020 Marston, J.) (Mem. Op.), the court followed the decision issued in Gallagher v. Geico in denying a motion to dismiss a declaratory judgment issue pertaining to whether the injured the plaintiff’s claims for UIM benefits were barred by a household exclusion.

The court in LeBrum reviewed a number of trial court decisions indicating that the Gallagher v. Geico decision by the Pennsylvania Superior Court should be viewed broadly as well as those other decisions that have indicated that the decision should be interpreted narrowly. The court in this case indicated that, at the motion to dismiss stage, it was not inclined to interpret Gallagher’s holding narrowly.

In addition to following Gallagher’s eradication of the household exclusion, the court in LeBrum also held that the Gallagher decision could be applied retroactively. With regards to a statute of limitations defense asserted by the carrier on the Gallagher v. Geico issue, the court agreed that a four-year statute of limitations would apply on any retroactive claims.

In another household exclusion case from this year, National General Insurance v. Sheldon, No. 1:19-CV-212 (W.D. Pa. Sept. 29, 2020 Bissoon, J.), the carrier argued that the Pennsylvania Supreme Court’s decision in the case of Gallagher v. Geico was distinguishable from the issues presented in this case in that Gallagher involved the same insurance company on both insurance policies at issue and this case did not.

After reviewing the cases which have been decided since Gallagher, the judge in this Sheldon case out of the Western District Court of Pennsylvania found that this distinction was of no consequence. The court held ultimately that the household exclusion was not valid in this case under essentially the same analysis as in the Gallagher decision, i.e., that the household exclusion is invalid as a de facto waiver of stacked coverage where Pennsylvania’s MVFRL requires that an insured provide a written waiver of such coverage.

The district court’s decision in the Sheldon case contradicted a household exclusion decision that had been handed down by the same court earlier in the year. In the case of Dunleavy v. Mid-Century Insurance, No. 2:19-CV-1304 (W.D. Pa. May 19, 2020 Ranjan, J.), Judge J. Nicholas Ranjan of the Pennsylvania Western Federal District Court held that the Pennsylvania Supreme Court’s decision in Gallagher v. Geico did not apply to invalidate a household exclusion in this case where the insured had expressly waived UIM coverage on a motorcycle insured with another carrier.

The above review confirms that there is a split of authority in the federal courts on the ongoing validity of the household exclusion. Meanwhile, in the state court system, several trial court judges limited Gallagher v. Geico to its facts and decided to uphold the household exclusion as a valid exclusion to support a denial of UIM coverage.

For example, in the Lehigh County case of Erie Insurance Exchange v. Mione, No. 2019-CV-2395 (C.P. Lehigh Co. June 26, 2020 Varricchio, J.), Judge Michele A. Varrichio of the Lehigh County Court of Common Pleas granted summary judgment in favor of the carrier and denied the injured party’s motion for judgment on the pleadings in a declaratory judgment action regarding the household exclusion. The court ruled that Erie Insurance did not need to provide underinsured motorist coverage to the plaintiff given the application of the exclusion.

The court in the Mione case analogized the facts before it to be more consistent with the facts in issue in the Pennsylvania Supreme Court decision in Eichelman v. Nationwide Insurance, 711 A.2d 1006 (Pa. 1999). Following Eichelman the court in this matter ruled that, in the absence of a clearly expressed public policy, the clear and unambiguous language of the still valid household exclusion in the auto insurance policy must be given its plain meaning and application.

The court in Mione also emphasized that, giving effect to the household exclusion would further legislative policy behind Pennsylvania’s Motor Vehicle Financial Responsibility Law [MVFRL] by holding the plaintiff to his voluntary choice of not purchasing UIM coverage under a separate motorcycle policy for the motorcycle involved in the accident.

The ongoing application of the household exclusion to preclude coverage was also found to be valid by Judge David J. Williamson in the Monroe County case of Erie Insurance Exchange v. King, No. 6937-CV-2019 (C.P. Monroe Co. Jan. 27, 2020 Williamson, J.). In the King case, the court applied a household exclusion despite the Gallagher case and ruled that the insurance company did not have to provide uninsured motorist benefits as a result.

In his opinion, Judge Williamson noted that, when one of the plaintiffs had purchased the policy with Erie Insurance, he had executed a waiver of stacked benefits and received a reduction in the premiums as a result. As such, the record confirmed to the court that the plaintiff had expressly waived the ability to stack his coverage over two or more separate policies.

Yet, there have been county court decisions in 2020 in which the court instead applied the Gallagher v. Geico decision and ruled that the household exclusion was invalid.

In the Lancaster County Court of Common Pleas case of Donegal Mutual Insurance v. Krautsack, No. CI-19-04904 (C.P. Lanc. Co. Aug. 28, 2020 Ashworth, J.), the court granted the plaintiff’s motion for summary judgment and denied the carrier’s cross-motion for summary judgment relative to issues surrounding the application of a household exclusion.

Lancaster County Court Judge David L. Ashworth applied the Gallagher v. Geico decision literally and noted that the Pennsylvania Supreme Court “unequivocally” held that household exclusions are unenforceable as a matter of law as the exclusion violated the requirements set forth in Pennsylvania’s MVFRL that a carrier secure a written waiver or rejection of stacked UIM coverage for such waiver or rejection to be valid.

In the separate case of Donegal Insurance v. Ricci-Lombardo, No. C-48-CV-2019-11724 (C.P. Northamt. Co. Oct. 22, 2020 Morganelli, J.), Judge John M. Morganelli of the Northampton County Common Pleas Court also ruled in favor of the insured in response to cross-motions for judgment on the pleadings in a declaratory judgment action brought by the carrier relative to the application of the household exclusion. The court followed the Gallagher decision and ruled that household exclusion could not be utilized by the carrier to act as a de facto waiver of stacked coverage.

It is anticipated that the lower courts will continue to see this issue again and again in the years ahead.

Regular Use Exclusion Is Under Attack

With their successes in their attack against the household exclusion through the Gallagher v. Geico decision, plaintiffs attorneys have been energized and have turned their sharp focus toward utilizing the rationale of the Gallagher decision to attack the regular use exclusion, i.e., that the regular use exclusion should be ruled invalid as a de facto waiver of stacked coverage when the MVFRL requires carriers to secure a written waiver of such coverage.

One such attack on this exclusion was rebuffed earlier this year in the case of Nationwide Affinity Insurance Company of America v. Fong, No. 2:19-CV-02119-CFK (E.D. Pa. April 28, 2020 Kenney, J.), in which that court upheld the carrier’s reliance upon the regular use exclusion.

In Nationwide v. Fong, Eastern Federal District Court Judge Chad F. Kenney held that the clear language of the regular use exclusion was not ambiguous and that the plain language of that exclusion clearly applied to bar coverage for any UIM coverage under the case presented.

The court in Nationwide v. Fong also noted that the claimants did not present any argument that the regular use exclusion was unenforceable on policy grounds. The court noted that the regular use exclusion had been previously upheld as valid by the Pennsylvania Supreme Court in its holding in the case of Williams v. Geico, 32 A.3d 1195, 1209 (Pa. 2011), in which it was held, in part, that the regular use exclusion was not void as against public policy.

Judge Kenney also made a point in Nationwide v. Fong to emphasize that the current Pennsylvania Supreme Court’s separate decision with respect to the household exclusion in the case of Gallagher v. Geico “does not affect Williams’s precedent, as the facts of Gallagher are wholly distinguishable to the facts in the [Nationwide v. Fong] matter, as conceded by the [injured party].”

In essence, in his decision in Nationwide v. Fong, Kenney followed decades of precedent under which the regular use exclusion had been repeatedly upheld as valid.

Then came chink in the armor of the regular use exclusion. In June of this year, Judge Stephen G. Baratta of the Northampton County Common Pleas Court case of Rush v. Erie Insurance Exchange, No. C-48-CV–2919-01979 (C.P. Northampt. Co. June 29, 2019 Baratta, J.). granted partial summary judgment to the injured party plaintiffs after holding, as a matter of first impression by any court in Pennsylvania, that the carrier’s regular use exclusion was invalid under the MVFRL.

According to the opinion, the plaintiff in Rush was a police officer who was injured while driving a police vehicle that was regularly available for his use at work. After securing a recovery from the tortfeasor, the plaintiff was seeking a further recovery under his own UIM coverage under his personal automobile insurance policy. The carrier that issued that policy denied coverage in reliance upon the regular use exclusion contained in the personal policy. A declaratory judgment action was filed and the parties eventually filed cross-motions for summary judgment.

In Rush, Judge Baratta emphasized that the plaintiff had not executed any written UIM coverage or stacking waivers. The court went on to accept the plaintiffs’ de facto waiver of coverage argument, that is, the same argument raised in the Gallagher v. Geico context, and held the the regular use exclusion was similarly invalid.

The court in Rush also found that the regular use exclusion violated 75 Pa.C.S.A. Section 1734, which mandated the carrier to provide UIM coverage equal to the bodily injury coverage available absent a written waiver secured from the insured.

The Rush v. Erie Insurance decision is on its way up the appellate ladder for review by the Pennsylvania Superior Court. Whether that decision is a blip on the radar or the beginning of a split of authority on the regular use exclusion remains to be seen.

Another Notable Split of Authority

Another notable split of authority that dominated the court decisions in 2020 in Pennsylvania revolved around the extent to which recklessness could be pleaded in state court personal injury complaints.

In some more liberal decisions, such as those arising this year out of Philadelphia, Franklin, Northampton and Lackawanna counties, the trial court judges have relied upon dicta from the summary judgment decision in the case of Archibald v. Kemble, 971 A.2d 513 (Pa. Super. 2008), to rule, at the preliminary objections stage, that claims of recklessness, or reckless conduct, can be pleaded with reckless abandon in any personal injury case whatsoever regardless of the underlying facts at issue. Those trial court judges believe that a claim of recklessness is an allegation that pertains to the state of the mind of the tortfeasor and that such claims are permitted to be pled generally under Pa.R.C.P. 1019.

Over the past year, other trial court judges, such as those in Monroe and Susquehanna counties, have instead adhered to the long-established principle that Pennsylvania is a fact-pleading state and have required that plaintiffs to instead allege sufficient facts in support of claims of reckless conduct, i.e., those same types of outrageous facts necessary to support a claim for punitive damages.

In his decision in the case of Seber v. Kline, No. CI-20-03109 (C.P. Lanc. Co. July 1, 2020 Brown, J.) Judge Leonard G. Brown III of the Lancaster County Court of Common Pleas took a middle ground on the issue in a rear end accident case.

In Seber, Brown referred to the Archibald v. Kemble decision for the proposition that, under Pennsylvania tort law, recklessness is subsumed by and sounds in negligence. Brown noted that the Superior Court in Archibald stated that, “even though we hold [the plaintiff] must prove [the defendant] acted recklessly, the cause of action remains, sounding in negligence.”

Brown also separately acknowledged in his decision in the Seber case that recklessness may be pled generally under Pa. R.C.P. 1019(b) as a condition of the mind in some cases. However, Brown went on to note that there are “Two distinct types of recklessness. The first allows for punitive damages, and the second does not.”

The court noted that the first type of recklessness, which may support claims of punitive damages, involve cases where the actor knows, or has reason to know of facts which create a high degree of risk of harm to another, and the actor still deliberately proceeds to act, or fails to act, in conscious disregard of, or indifference in that that risk.

Brown noted that the second type of recklessness is “where the actor has such knowledge or reason to know the facts, but does not realize or appreciate the high degree of risk involved, although a reasonable man in his position would do so.”

Brown ruled that in this matter that the facts alleged by the plaintiff in a matter involving a standard rear-end accident were “legally insufficient to support a demand for punitive damages” and that simply pleading words such as ‘reckless,’ ‘wanton,’ or ‘willful’ did not change the result. More specifically, Brown ruled that “even when read in the light most favorable to the plaintiffs, no facts averred in the complaint point to this being a case of more than mere negligence.”

Rather, the court found that the facts pled in this simple rear-end accident case are the same types of facts used to support a showing of mere negligence only. As such, the court granted the defendant’s preliminary objections to the claims of recklessness, gross negligence, and for punitive damages and struck them from the complaint without leave to amend.

It should be interesting to see how this pleadings issue continues to play out in the year ahead.

Uber Deemed to Be an Employer of Its Drivers

In the case of first impression of Lowman v. Unemployment Compensation Board of Review, 235 A.3d 278 (Pa. July 24, 2020), the Pennsylvania Supreme Court held, as a matter of first impression, that Uber “controlled and directed the performance of Lowman’s services as a driver-for-hire” and that Donald Lowman was not engaged in an independently established business.

As such, the Pennsylvania Supreme Court essentially found that the driver’s work for Uber was completed within employment with Uber and not as an independent contractor. Uber’s argument that the driver was acting in self-employment was rejected.

Some commentators note that this decision may have an impact in personal injury litigation in terms of whether a ride-sharing company can be sued in a motor vehicle accident case as an employer of the defendant driver.

Still Waiting for Post-’Koken’ Appellate Guidance

It has been 15 years since the Insurance Federation of Pennsylvania v. Koken, 889 A.2d 550 (Pa. 2005), decision was handed down and, to date, the only appellate decision handed down has been the Pennsylvania Superior Court’s decision seven years ago in Stepanovich v. McGraw and State Farm, 78 A.3d 1147 (Pa. Super. 2013), appeal denied 78 A.3d 1147 (Pa. 2014). In that case, the Superior Court suggested that, in some circumstances, it would not be improper to have a post-Koken trial involving both the third party defendant and a UIM carrier defendant in front of the same jury. Regrettably and inexplicably, the Pennsylvania Supreme Court denied allocatur in that case and missed an opportunity to present much needed appellate guidance in this area of law.

Meanwhile, there remains an equal split of authority amongst county trial courts on the issue of whether post-Koken cases involving combined cases against third party defendants and UIM carrier defendants should remain consolidated or severed. According to the ‘Post-Koken Scorecard’ found on the Tort Talk Blog (www.TortTalk.com), at least 24 county courts have ruled in favor of the continued consolidation of these types of cases through discovery and at least 24 county courts have ruled in favor of the severance of such claims.

The Post-Koken Scorecard also confirms that, in those combined post-Koken cases that also include bad faith claims against the UIM carrier, at least 10 county courts have ruled in favor of the continued consolidation of these cases up to the time of trial, and at least 22 county courts have ruled in favor of severing out the bad faith claims. Of those courts that have followed the majority rule in favor of severing out the bad faith claims there remains a split of authority as to whether bad faith discovery should still be allowed to proceed while the underlying UIM claim is pending.

There is also a split of authority across Pennsylvania on the issue of whether a post-Koken trial involving both a third party tortfeasor defendant and a UIM carrier should be allowed to proceed in a consolidated fashion or instead be bifurcated. Moreover, the trial court judges continue to craft their own jury instructions for these types of cases.

The hope remains that some of these post-Koken cases that proceed to verdict will thereafter head up the appellate ladder and generate some much needed appellate guidance in 2021.

Here’s to also hoping that appellate guidance is forthcoming in the year ahead on all of the other issues reviewed above as well.

Daniel E. Cummins is the managing partner of the Clarks Summit law firm of Cummins Law, a civil litigation practice. He also conducts mediations of civil litigation matters through Cummins Mediation Services. Cummins is also the sole creator and writer of the Tort Talk Blog (www.TortTalk.com), which is designed to provide continuing updates on important cases and trends in Pennsylvania civil litigation law. He can be reached at dancummins@CumminsLaw.net.

Is Uber An Employer of Uber Drivers?

In the case of Lowman v. Unemployment Comp Bd. of Review, 41 EAP 2018 (Pa. July 24, 2020)(Op. by Donohue, J.) (Saylor, C.J. and Mundy, J., Dissenting), the Pennsylvania Supreme Court held, as a matter of first impression, that Uber “controlled and directed the performance of Lowman’s services as a driver-for-hire” and that Mr. Lowman was not engaged in an independently established business.

Essentially, the Court found that the driver's work for Uber was completed within employment with Uber and not as an independent contractor. Uber's argument that the driver was acting in self-employment was rejected.

Some commentators note that this decision may have an impact in personal injury litigation in terms of whether a ride-sharing company can be sued in a motor vehicle accident case as an employer of the defendant driver.

Anyone wishing to review the majority Opinon of the Pennsylvania Supreme Court may click this LINK.

The dissenting Opinion can be viewed HERE.

I send thanks to Attorney Dale Larrimore of the Philadelphia law firm of Larrimore & Farnish, LLP for bringing this case to my attention.

Trial Court Judge Rejects Uber's Effort To Enforce Binding Arbitration Clause Against Plaintiff Injured While In Uber Vehicle Accident

As the public’s use of Uber vehicles increasingly becomes the norm, cases pertaining to accidents involving Uber vehicles are on the rise.

Notably, when a customer downloads Uber’s app, the customer agrees that the customer is older than 18 and that the customer will not use a stolen credit card to pay your driver. One other possible provision of the agreement entered into with Uber when the app is downloaded is that the customer will agree to arbitrate all claims asserted against Uber.

That issue came to a head in the case of Kemenosh v. Uber Technologies, No. 181102703(C.P. Phila. Co. Jan. 3, 2020 Fletman, J.), which involved a Plaintiff who was injured as a passenger in an Uber vehicle when the Uber driver allegedly ran a red light and was involved in an accident in Center City Philadelphia.

After the Plaintiff filed suit against Uber and others, Uber filed preliminary objections asserting that the Plaintiff had agreed to resolved all claims by way of arbitration.

Uber argued that, by approving the ride-share’s “terms and conditions” when she downloaded the app prior to the accident, the Plaintiff had forfeited her right to a jury trial and had agreed, instead, to resolve any legal disputes only through binding arbitration.

Judge Abbe F. Fletman of Philadelphia Common Pleas Court disagreed and ruled that, because Uber was not able to prove that the Plaintiff actually read the company’s terms and conditions as she downloaded the app or before she rode in the Uber car that ran a red light, she cannot be forced to proceed to arbitration instead of her chosen forum of a jury trial.

The court found that, because the app makes it possible to register for Uber’s services without clicking on a hyperlink to review the company’s terms of service, “the registration process did not properly communicate an offer to arbitrate under Pennsylvania law.”

Judge Fletman did note that if the Plaintiff had been required to click the hyperlink to the binding arbitration clause language, and had checked a box confirming that she read and agreed to Uber’s terms and conditions, or received email notice of the company’s policies, Uber’s arbitration-only rule would perhaps be valid.

Anyone wishing to review this decision may click this LINK.

I send thanks to Attorney Ken O'Neill of the Law Offices of Kenneth S. O'Neill for bringing this case to my attention.


UPDATE: On February 10, 2020, the trial court judge granted Uber's Motion for Reconsideration of this decision and vacated this decision.  

ARTICLE: Quandary on Whether Limited Tort or Full Tort Applies to Uber Drivers

The below article of mine was published in the July 2, 2019 edition of the Pennsylvania Law Weekly and is republished here with permission:

Quandary on Whether Limited Tort or Full Tort Applies to Uber Drivers

By Daniel E. Cummins | June 27, 2019

Pennsylvania Law Weekly

As the use of Uber and Lyft rideshares become more prevalent in Pennsylvania, it is more likely that motor vehicle accidents involving such drivers will increase and thereby give rise to novel issues of law.

One such issue is whether an Uber or Lyft driver who has elected the limited tort option under his own personal automobile insurance policy will be deemed to be a full tort plaintiff if he is involved in an accident while driving as an Uber or Lyft driver. The quandary in this regard is whether the Uber or Lyft driver’s use of his own personal vehicle for business purposes triggers an exception to the limited tort option.

Limited Tort

Under the tort option statute found at 75 Pa.C.S.A. Section 1705, carriers are required to secure from their customers a written election of either full tort coverage or limited tort coverage whenever a personal automobile insurance policy is sold.

Full tort coverage, sold at a higher premium, allows an insured to pursue a claim for noneconomic damages, otherwise known as pain and suffering damages, without regard for the types of injury sustained by the plaintiff.

On the other hand, with limited tort coverage, an insured will pay a lower premium but, in exchange, agrees that he cannot recover pain and suffering damages unless and until the injured insured shows that he has sustained a serious injury as a result of the accident. A serious injury in this context is a injury that results in a substantial impairment of a body function, serious permanent disfigurement or death.

The grey area for Uber and Lyft drivers is this—where person has chosen the limited tort alternative, there is an exception to the rule where that driver is operating a commercial vehicle as opposed to a “private passenger vehicle.” The question as to whether the use of a personal vehicle as an Uber or Lyft vehicle changes that private vehicle into a commercial vehicle has not been answered by the statutory law or the courts of Pennsylvania to date.

Status of Uber or Lyft Drivers

The legal issue of the tort option coverage applicable to Uber and Lyft drivers is complicated by the fact that such drivers use their personal vehicles in different capacities at different times. The lingo in the field is that Uber and Lyft drivers have different periods, or types, of driving statuses.

Period 1 is considered to be when the driver is driving their vehicle only in a personal capacity and without regard to the fact that they, at other times, are “on the app” and looking for fares to pick up as Uber or Lyft drivers.

Period 2 is when an Uber or Lyft driver is “on the app” and ready and willing to pick up a fare to drive somewhere but has not yet been summoned and when the driver has been summoned and is on the way to pick up the fare.

Period 3 is considered to be when the Uber or Lyft has a customer in the car as a passenger.

Statutes on Uber/Lyft Insurance

The statutory law pertaining to the mandatory requirements for insurance coverages for Uber and Lyft drivers can be found at both 66 Pa.C.S.A. Section 2601, et al., and 53 Pa.C.S.A. Section 57A01, et al., and is titled “Transportation Network Companies.”

The new law defines what a transportation network company is and identifies the relevant driver(s) included under the ambit of the statute. This new law also outlines a list of qualifications and standards that the company must meet before being permitted to operate in the commonwealth of Pennsylvania.

In addition, the law provides for the mandated minimums for liability insurance coverages and first-party benefits coverages depending on which scenario applies.

These scenarios include where the driver of the vehicle does not have passengers and is logged into the transportation network company network (presumably applying to the situation where the driver is on the way to pick up a fare), and where the driver of the vehicle does have passengers.

It is suggested that automobile accident litigators should review these statutes to become aware of these mandatory minimum liability coverages and first-party insurance coverages. These coverages were reviewed in a Nov. 16, 2017, Pennsylvania Law Weekly article titled “New Law: Mandated Coverages for Uber and Lyft Vehicles” by Daniel E. Cummins and Stephen T. Kopko.

According to Uber’s website, companies that are issuing these types of insurance policies include, at a minimum, James River Insurance Co., Progressive, Allstate and Farmers Insurance.

What the new law does not cover is the limited tort vs. full tort question for the separate insurance policies that are issued specifically for Uber and Lyft drivers over and above the personal automobile insurance such drivers may already have on their vehicles.

As such, there may be certain Uber and Lyft drivers who have elected the limited tort option under their personal automobile insurance policy and who have additional insurance Uber or Lyft-type policies for their commercial or business use of their vehicle that are silent on the tort option question.

A Requirement of Statutory Construction

Given that there is no statutory law or case law on point to answer the question presented, it appears that, if faced with the issue of whether an Uber or Lyft driver who has elected the limited tort option should nevertheless be considered a full tort plaintiff, the courts will have to engage in a construction of the statutes in place as compared to the insurance policies in question.

To the extent that a review of this question of law requires the court to interpret Pennsylvania’s Motor Vehicle Financial Responsibility Law, the courts can be guided by the Statutory Construction Act, 1 Pa.C.S. Sections 1501-1991.

Pursuant to the Statutory Construction Act, the object of all statutory construction is to ascertain and effectuate the General Assembly’s intention. When the words of a statute are clear and free from ambiguity, the letter of the statute is not to be disregarded under the pretext of pursuing its spirit.

Turning to the applicable statutes, under 75 Pa.C.S.A. Section 1705(d)(3), it is provided that “an individual otherwise bound by the limited tort election shall retain full tort rights if injured while an occupant of a motor vehicle other than a private passenger motor vehicle.”

Under 75 Pa.C.S.A. Section 1702, a ‘private passenger motor vehicle’ is defined as a “four-wheel motor vehicle, except recreational vehicles not intended for highway use, which is insured by a natural person and … is a passenger car neither used as a public or livery conveyance nor rented to others …”

Under these statutory provisions, it is likely that a court would rule that a car or truck used by an Uber or Lyft driver is obviously a “four-wheel motor vehicle” that is “insured by a natural person” by virtue of the driver’s personal automobile insurance coverage. See 75 Pa.C.S.A. Section 1702.

However, according to the same statutory language, the vehicle would fall out of the scope of the definition of a private passenger vehicle whenever that vehicle is “used as a public or livery conveyance.” A livery is otherwise known as a vehicle for hire.

Therefore, it would appear that, if faced with the issue, the courts could find that, although an Uber or Lyft driver had selected the limited tort option under their own personal policy, such a driver would nevertheless be deemed to be a full tort plaintiff if involved in an accident while the driver had a passenger in the car as a paying fare on a particular trip.

However, a wrinkle in this regard is that it could also be argued that, once the car is being used as a livery or a hired car, then that vehicle would fall within a business use exception under the personal automobile insurance policy such that that personal policy would not be applicable to the accident.

This would leave the plaintiff with only the Uber or Lyft liability policy in place under which no tort option election is apparently required. Such a plaintiff driver may then arguably have no tort option election in place and may, as a result, be found to be covered by the full tort option.

It also appears that, if a limited tort Uber or Lyft driver, was not “on the app” and was driving their vehicle solely for personal reasons, that driver would still be a limited tort plaintiff if involved in an accident on that particular trip.

Other grey areas in this regard involve those cases where the Uber or Lyft driver is driving around while “on the app” waiting for a fare to contact them for a ride as well as when the Uber or Lyft driver has received a message from a fare and is on the way to pick up that person for a ride. The courts may struggle with these scenarios in determining whether that Uber or Lyft driver should be deemed a limited tort or full tort plaintiff where that driver had previously elected the limited tort option.

In the end, it will surely be interesting to see how these novel areas of law pertaining to motor vehicle accidents involving Uber and Lyft drivers begin to play out in the courts across the commonwealth.

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

Copyright 2019. ALM Media Properties, LLC. All rights reserved.

THE FUTURE IS NOW: PA Federal Court Addresses Personal Injury Liability Claims Against Uber

In the case of Fusco v. Uber Technologies, Inc.,  No. 17 - 00036 (E.D. Pa. July 27, 2018 Goldberg, J.)(Mem. Op.), the court granted Uber’s Motion for Summary Judgment as to negligent hiring, retention and supervision claims in a case of an Uber driver who allegedly attacked the Plaintiff customer.  

The court granted the Motion given that there was no record of any alleged instances of past misconduct by the offending driver.  

The court noted, however, that, after the Plaintiff filed his Complaint, news outlets in the area reported that the driver involved in the incident had a prior criminal conviction.  As such, the court granted the Plaintiff leave to amend his Complaint as to these claims and deferred consideration of the driver’s past conviction until a later date in the proceedings.  

By way of background, the Plaintiff attended a party in the University City neighborhood of Philadelphia. Given that the Plaintiff had alcohol at the party, he contacted Uber for a ride to his home in Cherry Hill, New Jersey.  

According to the Opinion, the Uber app conceals the customer’s destination until the start of a booked trip.   Accordingly, when a driver arises to pick up the Plaintiff, he does not know the Plaintiff’s destination.  The app is apparently set up in this way so as to the prevent drivers from declining routes they deem to be less profitable.   According to the Opinion, Uber does not allow drivers to refuse a trip after learning of a customer’s destination.  

In this matter, when the Uber driver arrived, he refused to take the Plaintiff to his home in southern New Jersey.  The Plaintiff remained seated in the car and repeated his request to be brought home.  

At that point, the driver dragged the Plaintiff out of the car, kicked him and beat him, leaving the Plaintiff unconscious and bleeding. The Plaintiff later filed this suit against Uber asserting a negligent hire claim, fraud and related misrepresentation claims, and vicarious liability claims.  

The court reviewed the law requiring the Plaintiff to show that the employer was on notice of an employee’s propensity for misconduct.  As there was no such information pled in the Complaint or otherwise found in the record, the court granted Uber’s Motion to Dismiss.  However, as noted, the Plaintiff was allowed to amend the Complaint given the recent news that had come out that the driver in the incident had a prior criminal conviction.

Anyone wishing to review this memorandum decision may click this LINK.  The companion Order can be viewed HERE

Source: “Digest of Recent Opinion” Pennsylvania Law Weekly (Aug. 14, 2018).

ARTICLE: Mandated Coverages for Uber and Lyft Vehicles

The below article written by my associate attorney, Stephen T. Kopko, and myself appeared in the November 16, 2017 edition of the Pennsylvania Law Weekly.  It is republished here with permission.

New Law:  Mandated Coverages for Uber and Lyft Vehicles

By Daniel E. Cummins and Stephen T. Kopko | November 16, 2017

Pennsylvania Law Weekly

Recent news stories have emphasized the emerging trend of transportation network companies, such as Uber and Lyft, around the world. These types of ride-sharing companies are continuing to develop across the commonwealth of Pennsylvania as well.

This increasing use of transportation network companies by the public led the Pennsylvania General Assembly to pass legislation last to regulate such businesses. Of note are the statutory requirements for insurance coverages mandated for transportation network companies, such as Uber and Lyft, and their drivers.

A New Law

Senate Bill 984 was signed by Gov. Tom Wolf on Nov. 4, 2016. This law relates to the operation of ride-sharing companies in the commonwealth of Pennsylvania. Under this bill, certain sections of Pennsylvania statutes were amended to include provisions and regulations related to these ride-sharing companies.

The new law can be found at both 66 Pa.C.S.A. Section 2601, et al., and 53 Pa.C.S.A.  §57A01, et al., and is titled “Transportation Network Companies.”

The new law defines what a transportation network company is and identifies the relevant driver(s) included under the ambit of the statute. This new law also outlines a list of qualifications and standards that the company must meet before being permitted to operate in the commonwealth of Pennsylvania.

Insurance Coverage Requirements

The new law also outlines the insurance coverage that either the driver of a ride-sharing vehicle must possess, or that the transportation network company must provide, to cover both the driver of the vehicle and any passengers that may use the service.

The “financial responsibility requirements” and the “Insurance requirements” mandated under this new law can be found at both 66 Pa.C.S.A. Section 2603.1 and at 53 Pa.C.S.A. Section 57A07. The language of each statute is essentially identical.

According to the provisions under 53 Pa.C.S.A. 57a07 (a), a “transportation network company driver or transportation network company on the driver’s behalf shall maintain primary automobile insurance that recognizes that the driver is a transportation network company driver or otherwise uses a vehicle to transport passengers for compensation.”

The new legislation then breaks down different scenarios and identifies what insurance mandates apply to each situation. These scenarios include where the driver of the vehicle does not have passengers and is logged into the transportation network company network (presumably applying to the situation where the driver is on the way to pick up a fare), and where the driver of the vehicle does have passengers.

Under the statutory language found at 53 Pa.C.S.A. 57a07(b) or 66 Pa.C.S.A. Section 2603.1(a)(2), where an Lyft or Uber driver is logged onto the digital network and is able to receive transportation requests but is not yet actually engaged in a prearranged ride, that driver must be covered by a policy providing bodily injury liability coverage of $50,000 per person/$100,000 per accident, along with $25,000 in property damage coverage. The insurance policy covering this scenario is also required to offer first party medical benefits coverage of at least $5,000 for the driver and $25,000 for any pedestrians injured.

Under the separate scenario where a Lyft or Uber driver has been engaged in a prearranged ride and does have a passenger in the vehicle, the statutory language found at 53. Pa.C.S.A. 57a07(c) and 66 Pa.C.S.A. Section 2603.1(a)(3)  requires that the applicable liability policy contain coverage of at least $500,000 for death, bodily injury and property damages claims. The policy must also provide for first party medical benefits coverage of at least $5,000 for the driver and $25,000 for any passengers or pedestrians injured.

These coverages, separate from the driver’s inapplicable personal automobile insurance coverage, may be secured or supplied either by the driver of the car, the transportation network company, or any combination of the two, see 53 Pa.C.S.A 57a07 (d); 66 Pa.C.S.A. Section 2603.1(a)(2)(iii);  66 Pa.C.S.A. Section 2603.1(a)(3)(iii).   

Priority of Coverages

One issue that has arisen with companies such as Uber and Lyft is the extent to which an insurance carrier providing personal automobile insurance coverage to a person who chooses to use a personal vehicle in a ride-sharing business capacity may deny coverage under that policy.

Importantly, 53 Pa.C.S.A57a07 (f) and 66 Pa.C.S.A. Section 2603.1(a)(4)  both provide, as follows: “Primary insurance. Coverage under an automobile insurance policy maintained under this section shall be primary and not be dependent on a personal automobile insurer first denying a claim nor shall a personal automobile insurance policy be required to first deny a claim.”

As such, the statutory framework confirms that a Lyft or Uber driver’s separate personal automobile insurance coverage typically will not come into play if the driver is involved in an accident resulting in personal injuries or property damages.

This Pennsylvania law specifically provides that carriers that write personal automobile insurance in the commonwealth may exclude coverage, including liability coverage, property damage coverage, along with UM/UIM benefits and first party medical benefits coverage, for accidents involving an Uber or Lyft driver involved in an accident that occurs while its insured driver is logged into the transportation network company’s network and seeking customers or is engaged in a prearranged ride with a customer. See  53 Pa.C.S.A 57a07 (l)  and 66 Pa.C.S.A. Section 2603.1(a)(2). The law also upholds the right of a carrier who has excluded coverage to also assert that it has no duty to defend any claims arising out of an accident involving a Lyft or Uber vehicle as well.

Accordingly, the right of personal automobile insurance carriers to deny coverage in cases involving accidents arising out of the use of personal vehicles for transportation network companies has been upheld in the regulatory scheme passed by the Pennsylvania Legislature.

The law does otherwise also confirm that nothing in its provisions prevents a personal automobile insurance carrier from providing coverage for drivers engaged in Uber or Lyft activities should the carrier wish to sell that type of coverage.

As a protective measure for the public at large, the law additionally imposes duties upon the transportation network company to ensure that the mandated insurance coverage is in place prior to allowing a driver to drive for the company.

The statutes also otherwise provide that where the insurance that may have been secured by a driver for Uber or Lyft rides has lapsed or is inadequate, then the insurance coverage maintained by the transportation network company shall provide the coverage required by this law and the transportation network company’s carrier would have the duty to defend the claim.

Other Notable Provisions

In other notable provisions under the statute, it is provided that a transportation network company or a driver may not request or require a passenger to sign a waiver of potential liability for personal injury or property damage claims.

Nor can the transportation network company require any of its drivers to sign any waivers for potential liability for personal injury or property damage claims as a condition for entering into a lease agreement,  see 53 Pa.C.S.A. Section 57A07(m).

It is noted that, as of this time, there has been no case law handed down interpreting this statute since it was passed almost a year ago in November 2016. However, it can be anticipated that, as the use of Uber and Lyft continues to rise in Pennsylvania, insurance coverage decisions are likely to be generated in the unfortunate situation of an accident involving such a ride-sharing vehicle.

Daniel E. Cummins is a partner and civil litigator with the Scranton law firm of Foley Comerford & Cummins. His civil litigation blog, Tort Talk, can be viewed at www.TortTalk.com. Cummins also provides Mediation Services at Cummins Mediation Services.  

Stephen T. Kopko is an associate with the firm who focuses on the defense of auto accident and premises liability matters.