Eastern District Federal Court Rules that Delay Damages are Recoverable Under UIM Policy

I have previously reported on how the courts have grappled with the issue of how to handle delay damages in post-Koken cases.

Almost a year ago, in December of 2010, the Pennsylvania Superior Court ruled (1) that delay damages should be calculated based upon the jury’s full verdict, as opposed to the molded downward amount after the application of credits due to the UIM carrier, and (2) that a Plaintiff could recover delay damages against a UIM carrier, even if the addition of the delay damages brought the verdict amount to a number higher than the available policy limits. See Marlette v. State Farm and Jordan, 10 A.3d 347 (Pa.Super. Dec. 10, 2010, Musmanno, Bender, Bowes, J.J.)(Opinion by Musmanno, J.).

Click here to view the Tort Talk post on the Marlette v. State Farm case.

This issue of delay damages in post-Koken cases was recently addressed again by the Federal District Court for the Eastern District of Pennsylvania in the case of Heebner v. Nationwide Ins. Enterprise, No. 10-2381 (E.D. Pa. Sept. 28, 2011).

In Heebner, the court reviewed the question of whether delay damages are to be included as a component of the compensatory damages to be paid under a UIM insurance policy.

The plaintiff in Heebner secured a verdict of $85,000.00. Delay damages in the amount of $48,201.96 were tacked on, resulting in a total award of $133,201.96. Nationwide paid the $85,000 under the terms of plaintiff's policy but refused to pay the delay damages under an argument that that delay damages were not damages for which it was liable under the terms of its UM/UIM policy.
After finding that delay damages were "merely an extension of the compensatory damages necessary to make a plaintiff whole" Judge Goldberg of the Eastern District ruled that Nationwide was required to pay the full amount of the award, delay damages and all.

In so ruling, the court noted that the Nationwide policy was ambiguous in its failure to fully define the term “compensatory damages.” Citing Pennsylvania Supreme Court cases from the 1980’s, it was also noted that delay damages are generally considered under Pennsylvania law to be a part of compensatory damages in any event. The Heebner court did not cite to the Marlette v. State Farm decision noted above.

Judge Goldberg concluded his Opinion by finding that Nationwide did not act in bad faith by taking the position it did on the delay damages issue. The court noted that neither party cited any case on point so as to render Nationwide’s position so unreasonable at the time as to constitute bad faith.


Anyone desiring a copy of this case may contact me at dancummins@comcast.net.

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



Source of image:


Image: digitalart / FreeDigitalPhotos.net

Superior Court Finds Bystander Emotional Distress Claim to be Covered Under Auto Policy Definition of "Bodily Injury"

According to an August 27, 2011 article in The Legal Intelligencer by reporter, Gina Passarella, the Pennsylvania Superior Court recently ruled in a memorandum opinion that a bystander negligent infliction of emotional distress claim fell under the automobile insurance policy definition of a “bodily injury” even though there was no physical injury sustained by the injured party.

In the case of Lipsky v. State Farm Mutual Automobile Insurance Company, PICS Case No. 11-4128 (Pa. Super. September 1, 2011) (unpublished Opinion by Stevens, J.) (Donahue J. concurring; Ford Elliot, P.J. dissenting), a split three (3) judge Pennsylvania Superior Court panel upheld a Philadelphia County trial court decision that the definition of “bodily injury” in State Farm’s automobile insurance policy was broad enough to allow for a negligent infliction of emotional distress claim to be considered as a "bodily injury."

It is noted that the Superior Court did not find that the definition of “bodily injury” in the policy was ambiguous. Rather, the Court found that the definition was wide enough to include claims of emotional harm without physical injury.

The Superior Court also ruled that the two brothers and the father of the victim each had their own separate bodily injury claims rather then all having a single claim based upon the victim’s injuries.  Thus, they were each entitled to pursue the per person limits under the policy separately.

This matter arises out of an incident during which an allegedly intoxicated tortfeasor struck and killed a 17 year old pedestrian in the presence of the pedestrian’s father and two brothers. A lawsuit was brought on behalf of the decedent’s estate, as well as separate claims on behalf of the father and the brothers of the decedent who witnessed the accident. The separate claims of the father and the brothers were based upon a negligent infliction of emotional distress claim.

The Claimants also filed a separate Complaint for a declaratory judgment seeking a declaration that the emotional distress of each Plaintiff constituted a separate “bodily injury” under the State Farm policy allowing that person to recover his own $100,000.00 “each person” liability limits.  As noted above, the Claimants eventually prevailed on appeal in this case before the Superior Court.

I send thanks to Attorney Christine Lezinski of the Scranton law firm of Lenahan & Dempsey for bringing this case to my attention.

Anyone desiring a copy of this Opinion in Lipsky v. State Farm may click this LINK.

Judge Burke of Luzerne County Dismisses Cross-Claim by UIM Defendant Against Tortfeasor Defendant in Post-Koken Case

Judge Thomas F. Burke, Jr. of the Luzerne County Court of Common Pleas recently sustained a tortfeasor defendant’s preliminary objections (filed by me) and dismissed a cross-claim for contribution and/or indemnification filed by the underinsured motorist (UIM) carrier defendant against the tortfeasor defendant in the post-Koken case of Emery v. Culver and Nationwide, No. 6764 – CIVIL – 2010 (C.P. Luz. Co. Sept. 28, 2011 Burke, J.).

Regular readers of Tort Talk may recall that I previously reported on the Post-Koken issue of whether or not the underinsured motorist (UIM) carrier defendant could assert a cross-claim against the tortfeasor defendant seeking the recovery on the UIM carrier’s potential subrogation rights (i.e., if the UIM carrier pays out money to the injured party, the UIM carrier has a right to recover the amount of that payment from the tortfeasor who caused the plaintiff’s injuries).

Judge Linda Wallach Miller of the Monroe County Court of Common Pleas addressed this issue her post-Koken decision of Bridgeman v. Cruz and Nationwide,, PICS Case No. 11-0238 (Monroe Co., Jan. 7, 2011, Wallach, Miller, J.). In Bridgeman, the court sustained the tortfeasor Defendant’s Preliminary Objections and struck the Co-Defendant UIM carrier’s cross-claim for contribution or indemnification after finding that such claim was not yet ripe for judicial review.

Judge Wallach Miller concluded that under the UM/UIM policy, the carrier did not have to pay the injured party until a determination was made that the Plaintiff’s damages exceeded the liability policy limits. The Court also noted that, under the UM/UIM policy, Nationwide retained the right to recover any amounts it had to pay to its injured party insured only after Nationwide had actually compensated the insured for damages in excess for the tortfeasors’ applicable liability limits.

The Court found that the UIM carrier may not recover on any claim for contribution or indemnification until the Plaintiff was awarded damages in excess of the liability policy and, therefore, Nationwide’s cross-claim was found to be procedurally and substantively improper because it was not ripe for judicial review under the ripeness doctrine.

In addition to citing Judge Miller’s on point decision in Bridgeman in support of the preliminary objections filed in the Emery case before Judge Burke, I also cited cases asserting that the cross-claim was improper because the UIM carrier and the tortfeasor defendants could not be considered to be joint tortfeasors (the claim against the UIM carrier is in contract, and the claim against the tortfeasor sounds in negligence). See Sehl v. Neff and State Farm, No. 3438 EDA 2009, 2011 WL 2990902 (Pa.Super. July 25, 2011 Olson, Freedburg, Colville, JJ.)(opinion by Freedburg); Bingham v. Poswistilo, Ritz, and Erie Ins., No. 10 - CV - 6020 (Lacka. Co., April 8, 2011, Nealon, J.).

Anyone desiring a copy of Judge Burke’s Order without Opinion and/or my preliminary objections and supporting brief in the Emery v. Culver case may contact me at dancummins@comcast.net.


Disclaimer: Past results by Foley, Cognetti, Comerford, Cimini & Cummins are no guarantee of future results and each case must be handled on its own merits.

U.S. Supreme Court Declines to Hear Appeal of Former Luzerne County Judge Ann Lokuta

Here's a link to an article in today's Times Leader out of Wilkes-Barre, PA regarding the United States Supreme Court issuing an Order denying certiorari on the appeal of former Luzerne County Judge Ann Lokuta on the issues surrounding her removal from the bench:

http://www.timesleader.com/news/Lokuta-petition-denied-by-US-Supreme-Court.html

Nationwide and Harleysville Insurance Companies to Merge

Nationwide Mutual Insurance Co. and Harleysville Insurance announced on Thursday, September 29th that they have agreed to a merger.

Nationwide Mutual will acquire the Harleysville Group for $760 million. Harleysville Mutual policyholders will become policyholders and members of Nationwide Mutual.

Here's a link to an online article in the insurance journal on the topic:

http://www.insurancejournal.com/news/national/2011/09/29/217906.htm

Schnader Print Media Awards for Excellence in Legal Writing

On Friday, I was notified by the Pennsylvania Bar Association that my article “To Friend or Not To Friend” has been selected as the First Place winner and that my article “Defense-Oriented Decisions Dominated 2010’s Biggest Non-Automotive Cases” has been selected as the Second Place winner in the Weekly Newspapers category of the 32nd annual William A. Schnader Print Media Awards.  Both articles appeared in The Pennsylvania Law Weekly over the past year.

This competition, honoring excellence in legal writing, is sponsored by the Pennsylvania Bar Association and the national law firm of Schnader Harrison Segal & Lewis, LLP.  This the fifth and sixth time articles of mine have been selected for Schnader Print Media Awards over the past five years.

There will be an awards ceremony on November 11th at the Pennsylvania Newspaper Association Annual Convention which will be held at the Bedford Springs Resort in Bedford, Pennsylvania.

The article “To Friend or Not to Friend,” which analyzes the emerging common law in Pennsylvania on the discoverability of information on social media sites, can be viewed here:

http://www.torttalk.com/2011/06/article-on-discovery-of-social-media.html


The article “Defense-Oriented Decisions Dominated 2010’s Biggest Non-Automotive Cases” can be viewed here:

http://www.jdsupra.com/post/documentViewer.aspx?fid=a65be9e8-7286-42fa-9a9d-3285807ba210


I send thanks to Hal Cohen, the publisher, and Hank Grezlak, the Editor-in-Chief, of the Pennsylvania Law Weekly for allowing me the privilege of writing for the paper and putting my English Degree from Villanova University to good use.

Source of image of figure at computer: http://www.freedigitalphotos.net/images/view_photog.php?photogid=1152

Recklessness Allegations in a Premises Liability Case

In his recent September 27, 2011 Memorandum and Order in the case of Maloney v. Fidelity Deposit and Discount Bank, No. 11-Civil-2033 (C.P. Lacka. Co. Sept. 27, 2011, Nealon, J.), Judge Terrence R. Nealon of the Lackawanna County Court of Common Pleas again addressed the propriety of allegations of gross, wanton, and reckless conduct in personal injury Complaints.

Tort Talkers may recall that I recently summarized an Opinion by Judge Nealon on this issue in the context of automobile accident matters in the case of Freethy v. Goike, No. 2011 - CV - 530 (C.P. Lacka. Co. Sept. 9, 2011 Nealon, J).

This Maloney case concerned a trip and fall and a lawsuit by a tenant against a property owner.

The Maloney case more specifically arose out of a trip and fall that occurred on May 29, 2009 in an unlit interior stairway leading to the second floor of a commercial building owned by the Defendants, Fidelity Deposit and Discount Bank, and Fidelity D&D Bancorp, Inc. [“Fidelity”]. The Plaintiff alleges that he was injured when he was caused to fall while walking down the dark stairway.

The Plaintiff alleged that he formerly owned the subject building but that the bank had pursued mortgage foreclosure litigation against him. The bank prevailed and, at one point, directed the Plaintiff to remove his remaining property from the premises.

The Plaintiff contended that the only way he could access his property was by way of a darkened staircase. Prior to the incident, Fidelity had allegedly caused the utilities, including the electricity, to be terminated at the premises, which left the stairway dark and not lit by either natural or artificial lighting.

The Plaintiff asserted in his Complaint that, although Fidelity was aware of the darkened condition of the stairway, the bank did not provide the Plaintiff with any means of lighting the stairway in order to safely use the stairway to remove his property from the premises.

As such, the Plaintiff alleged in his Complaint that Fidelity had acted with gross, wanton, recklessness, careless, and negligent conduct by requiring the Plaintiff to use the subject stairway when Fidelity knew it was in a dangerous and darkened condition.

Fidelity filed Preliminary Objections in the nature of a demurrer to the Complaint seeking to strike the Plaintiff’s references to gross, wanton, and reckless conduct. Fidelity asserted that the Complaint filed to allege specific facts in support of these allegations. The Plaintiff responded by asserting that allegations of wanton conduct, reckless conduct, and gross negligence involved conditions of the mind which could be asserted generally in the Complaint.

After reviewing the case law on the issues presented, including again relying upon (as he did in the Freethy decision) the Superior Court Opinion in the case of Archibald v. Kemble, 971 A.2d 513 (Pa. Super. 2009), app. denied, 989 A.2d 914 (Pa. 2010), and after accepting as true the allegations and reasonable inferences from the facts in the Complaint as required by the standard of review, Judge Nealon held that the allegations of the Plaintiff’s Complaint were sufficient to allow the claims of gross, wanton, and reckless conduct to proceed on into discovery.

Judge Nealon noted that whether or not the Plaintiff would be able to produce sufficient evidence to support those allegations could be determined during the course of discovery.

The Court also noted that, in the event that discovery failed to yield sufficient factual support for these allegations, Fidelity had the right to move to strike the allegations from the action or attempt to secure a stipulation from the Plaintiff to remove such allegations later in the proceedings.

As such, the Court denied the Defendant’s demurrer to the allegations of wanton and reckless conduct in the Maloney case.

While it appears that these types of general allegations may now be allowed to proceed, at least in Lackawannna County, it may be advisable for the parties to focus at least a portion of their discovery efforts on any facts to support any claim of recklessness on the part of the defendant.  If a plaintiff is unwilling to stipulate such allegations out at the conclusion of discovery, a motion for summary judgment may prove necessary in order to close the door on any effort by the plaintiff to make a claim for punitive damages at trial based upon these allegations.

Legal research for law in support of such a summary judgment motion could begin here on Tort Talk with a review of decision by Judge William Amesbury of the Luzerne County Court of Common Pleas outlining the necessity of facts to support such claims of wanton and reckless conduct.  That Tort Talk post can be viewed here.


Anyone desiring a copy of Judge Nealon’s Opinion in the case of Maloney v. Fidelity Deposit and Discount Bank (premises liability case) or Freethy v. Goike (auto accident case) may conduct me at dancummins@comcast.net.