ARTICLE: A Year of Changes in Civil Litigation

This article of mine appeared in the December 15, 2015 edition of the Pennsylvania Law Weekly and is republished here with permission:

A Year of Changes in Civil Litigation

Daniel E. Cummins, The Legal Intelligencer/Pennsylvania Law Weekly         
December 15, 2015            

               

There were a number of notable developments in Pennsylvania civil litigation law over the past year in terms of decisions and at least one rule change. Here's a look back at some of those changes in 2015.

Jurors and Social Media

Earlier this year, the Pennsylvania Supreme Court, in keeping up with the changing times, amended Rule 220.1, pertaining to "Preliminary Instructions to Prospective and Selected Jurors," by expanding the need to instruct jurors to refrain from researching the case at hand through social media.

Previously, these types of instructions were generally reserved for those jurors actually selected and sitting in the jury box at trial. The new amendments require the trial court judge to also provide such instructions to persons in the general jury pool even before they reach a particular courtroom for jury selection.

The amendments place emphasis on advising such jurors of the prohibitions against using computer or mobile devices in a manner that may violate the instructions of the court during trial, including instructions on not discussing or researching the case presented.

Statute of Limitations in Limited Tort Cases

In an interesting opinion in the case of Varner-Mort v. Kapfhammer, 109 A.3d 244 (Pa. Super. 2015), the Superior Court addressed the proper application of the statute of limitations and the discovery rule in the context of limited tort cases.

In Varner-Mort, the limited tort plaintiff filed suit after the expiration of the statute of limitation but argued, under the discovery rule, that she did not "discover" that she had a serious injury until some point in time after the accident such that the lawsuit was timely filed under an application of the discovery rule.

Despite noting that precedent in this regard was just "plain wrong," this panel of the Superior Court nevertheless reluctantly agreed to apply the discovery rule and reversed the entry of summary judgment in favor of the defendant on the statute of limitations issue.

Independent Medical Examinations

A number of trial court decisions were handed down over the past year pertaining to the permissible parameters of independent medical examinations (IMEs).

In the Lebanon County Court of Common Pleas case of Shearer v. Hafer, No. 2012-01286 (C.P. Leb. Co. March 17, 2015 Charles, J.), Judge Bradford Charles ruled in favor of a defense discovery motion to compel a neuropsychological IME, with the parameters being that the plaintiff's attorney would be allowed to be present during the preliminary interview phase by the doctor of the plaintiff but not thereafter.

In the case of Trojanowicz v. Ford Motor, No. 2013 - CV - 223 (C.P. Lacka. Co. Feb. 10, 2015 Minora, J.), Judge Carmen D. Minora, citing Pa.R.C.P. 4010, noted that whether or not to allow multiple examinations by an IME expert was a decision left to the broad discretion of the trial court. Given that the psychiatric IME doctor wrote in his initial report that he was able to come to accurate conclusions and opinions based upon the review he had completed to date, Minora found that additional testing would not be allowed.

In the case of Feld v. Primus Technologies, 2015 U.S. Dist. Lexis 55270 (M.D. Pa. April 28, 2015 Brann, J.), U. S. District Judge Matthew W. Brann of the Middle District Court of Pennsylvania relied upon Fed.R.E. 703 in ruling that defendants in tort litigation may rely upon, and refer to, independent medical examinations of the plaintiff prepared in separate worker's compensation proceedings. The court denied a plaintiff's motion in limine in this regard reasoning that, even though the previous IME reports may be arguably biased, those reports were the kind of records that a medical expert would typically and legitimately rely upon, i.e, the records of other doctors, in formulating their own opinions on the case presented.

Cross-Examination of Witnesses

In 2015, decisions were handed down clarifying the extent to which expert and lay witnesses could be impeached on cross-examination at trial.

In Flenke v. Huntington, 111 A.3d 1197 (Pa. Super. 2015), the Superior Court ruled that, while expert witnesses may be impeached for bias, including frequent work for the same side in litigation or for insurance carriers, there are limits to such cross-examination.

More specifically, the court limited the cross-examination of the expert to those issues germane to the case at hand and evidence of bias related thereto. As such, the court place certain limits on the extent to which an expert could be cross-examined on compensation earned in litigation matters.

With respect to lay witnesses, in a detailed order issued in the case of Detrick v. Burrus, No. 2011 CV 1333 (C.P. Lacka. Co. Feb. 23, 2015 Nealon, J.), Judge Terrence R. Nealon addressed a motion in limine filed by the plaintiff in an automobile accident suit seeking to preclude evidence of a post-accident drug screen ordered by the plaintiff's treating doctor that contained a positive result for marijuana use.

In his opinion, Nealon noted that questions which concerned the admissibility of evidence lie within with sound discretion of the trial court and would not be disturbed on appeal absent a clear abuse of that discretion. Nealon also held that evidence utilized to impeach the credibility of a witness is admissible so long as it is relevant to that purpose and not otherwise barred. The court relied upon the law that a witness may not be impeached or contradicted on a "collateral" matter.

In automobile accident personal injury case, the plaintiff denied, during her deposition testimony, that she used marijuana. The court precluded the defense efforts to cross-examine the plaintiff at trial with the plaintiff's drug screen that was positive for marijuana use.

In so ruling, Nealon noted that the Pennsylvania appellate courts have repeatedly held that "no witness can be contradicted on everything he testifies to in order to 'test his credibility.' The pivotal issues in a trial cannot be 'sidetracked' for the determination of whether or not a witness lied in making a statement about something that has no relationship to the case on trial."

Obamacare and the Collateral Source Rule

A recent trend in Pennsylvania personal injury matters involves defense counsel pointing to the Affordable Care Act to support an argument against any recovery of alleged medical expenses claimed by the plaintiff. The argument is that such expenses are or will be covered by insurance under the Affordable Care Act and therefore, they need not be awarded by a jury.

Plaintiffs argue that the well-settled collateral source rule should preclude any mention of any benefits from a collateral source in an effort to preclude or diminish the recovery of compensation from the alleged wrongdoer.

The issue of whether the defense in a personal injury litigation may refer to the Affordable Care Act during the course of a jury trial was addressed in the case of Deeds v. University of Pennsylvania, 110 A.3d 1009(Pa. Super. 2015). On appeal, the plaintiff argued, in part, that she was "entitled to a new trial because the trial court violated the collateral source rule when it 'improperly allowed [the defendants] to inform the jury that [the plaintiffs'] substantial medical needs were all being attended to at little to no cost to [the plaintiffs'] legal guardian due to the existence of state and federal education and medical benefits programs." The defense referred to Medicaid as well as to how Obama's Affordable Care Act would impact the future care costs in the case.

The Superior Court found these references at trial to be a patent violation of the long-standing collateral source rule, the purpose of which is to "avoid the preclusion or diminution of the damages otherwise recoverable from the wrongdoer based on compensation recovered from a collateral source," and, as such, remanded the case for a new trial.

Notable Shift in Bad Faith Cases

Representing a monumental shift in thinking in bad faith cases, in the case of Wolfe v. Allstate Property & Casualty Insurance, 790 F.3d 487 (3d Cir. 2015), the U.S. Court of Appeals for the Third Circuit ruled that it was not bad faith for a third party liability carrier not to include its insured's exposure to punitive damages in a settlement.

In Wolfe, the Third Circuit remanded an excess verdict bad faith case back for a new trial after ruling that the jury was impermissibly allowed to consider, in this subsequent bad faith claim, the amount of the punitive damages awarded against the tortfeasor at the trial of the underlying third party lawsuit.

In her opinion, Judge Marjorie O. Rendell wrote, "We predict that the Pennsylvania Supreme Court would conclude that, in an action by an insured against his insurer for bad faith, the insured may not collect as compensatory damages the punitive damages awarded against it in the underlying lawsuit. Therefore, the punitive damages award was not relevant in the later [bad faith] suit and should not have been admitted."

The Third Circuit in Wolfe notably stated that "[i]t follows from our reasoning that [a liability] insurer has no duty to consider the potential for a jury to return a verdict for punitive damages when it is negotiating a settlement of a case. To impose that duty would be tantamount to making the insurer responsible for those damages, which, as we have discussed, is against public policy."

A Look Ahead in Post-'Koken' Matters

Another year has passed without an opportunity for the appellate courts to address any of the novel procedural and substantive legal issues that challenge the commonwealth's trial court judges. Hopefully, the next year will be the one where these issues begin to go up the appellate ladder and result in appellate guidance that will serve to assist both the bench and the bar. •


Special to the Law Weekly 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.  Attorney Cummins can be reached at dancummins@comcast.net.

Judge Gibbons of Lackawanna County Reaffirms That MVFRL Does Not Apply to Excess or Umbrella Policies

In his recent Opinion in the case of Ranocchia v. Erie Insurance Exchange, No. 2014-CV-4555 (C.P. Lacka. Co. Nov. 25, 2015 Gibbons, J.), Judge James A. Gibbons of the Lackawanna County Court of Common Pleas granted summary judgment in favor of Erie Insurance in a declaratory judgment matter on the issue of whether the Pennsylvania Motor Vehicle Financial Responsibility Law applies to and provides underinsured motorists benefits under and excess insurance policy containing both and expressed exclusion of such UIM benefits and legally deficient waivers of UIM benefits.  

In this matter, the Defendant carrier asserted that the MVFRL simply does not apply to excess insurance policies.   The Defendant carrier also asserted that, even if the Pennsylvania law does allow for UIM benefits under an excess liability policy, a provision in the excess policy expressly excluding UIM benefits prevents the Plaintiff from recovering any UIM benefits under that policy.  

The Plaintiffs countered with an argument that the waivers of UIM coverage provided by the Defendant relative to the excess liability policy created and ambiguity thereby requiring a reformation of the policy.  Stated otherwise, the Plaintiffs asserted that UIM benefits should be considered to be a part of the excess liability policy until waivers of UIM coverage were secured.  The Plaintiffs asserted that, because the waivers in this matter were invalid, the Plaintiffs were entitled to recover UIM benefits under the excess liability policy.  

In his decision, Judge Gibbons ruled that, while this precise issue “[w]hile this precise issue has never been addressed by our appellate courts, we are persuaded by existing case law regarding the MVFRL’s inapplicability to excess insurance policies that Defendants are entitled to summary as a matter of law.”  

In his Opinion, Judge Gibbons primarily rested his decision on the settled law that the MVFRL does not apply to excess or umbrella policies.  As such, there are no UIM requirements applicable to excess or umbrella policies.  

Where the excess policy, as here, clearly provided that it did not apply to UIM coverage, the inclusion of UIM rejection forms, although inconsistent with the expressed language of the policy indicating that there was no UIM coverage, did not create an ambiguity.   Accordingly, the court granted the Defendant carrier’s Motion for Summary Judgment.  

Anyone desiring a copy of Judge Gibbons' decision may click this LINK.

The Plaintiff has filed a Notice of Appeal from this decision.



 

Pennsylvania Supreme Court Rules on Propriety of Attorney's Fees in First Party Benefits Litigation Matters

Tort Talkers may recall that previous summaries of the various court decisions in the case of Doctor’s Choice Physical Medicine and Rehabilitation Center, P.C. v. Travelers Personal Insurance Company, addressing attorney’s fees awarded in a first party benefits peer review process litigation, had been repeatedly reviewed here.

Update: In a December 21, 2015 decision by the Pennsylvania Supreme Court at 146 MAP 2014, the Court addressed the issue of the availability of attorney’s fee awards against insurance companies that have revoked peer review provisions of the Motor Vehicle Financial Responsibility Law.

By way of background, after a bench trial at the trial court level, the Court of Common Pleas entered a verdict in favor of the medical provider, which, initially included an award of attorney’s fees of approximately $39,000.00.  On a later motion, the trial court struck the award of attorney's fees in this context.

On appeal, the Pennsylvania Superior Court reversed the trial court's decision to strike the fee award.

In the latest decision in the case, the Pennsylvania Supreme Court has reversed the Superior Court. In so ruling, the Supreme Court noted that it "remains cognizant of the short comings of the peer-review regime." However, the court left changes to the peer review process to be considered by the Legislature and declined to deviate from the court’s conventional statutory interpretation of the peer review statute at issue.  

Anyone wishing to secure more detail on this decision may click this LINK.


I send thanks to Attorney Tom McDonnell of the Pittsburgh law firm of Summers McDonnell for bringing this decision to my attention.

To review the Tort Talk blog posts on the Superior Court's earlier decision and the trial court's initial decision in this case, please go to Tort Talk at www.TortTalk.com and type in "Doctor's Choice" in the Search Box in the upper right hand column of the blog.

Pennsylvania Superior Court Reaffirms Insurance Bad Faith Test and Addresses Statute of Limitations

In one of its latest decisions in the area of insurance bad faith, the Pennsylvania Superior Court in the case of Rancosky v. Washington National Insurance Company, No. 1282 WDA 2014 (Pa. Super. Dec. 16, 2015, Bender, P.J.E., Jenkins and Musmanno, J.J.) (Opinion by Musmanno, J.), The court affirmed in part and vacated in part the entry of judgment in favor of the Defendant on the Plaintiff’s bad faith claim and remanded the case for a new trial.

This matter arose out of issues pertaining to a Cancer Policy issued by Conseco Health.   The Plaintiff paid premiums for a Cancer Policy under which the Plaintiff would be granted certain benefits if diagnosed with internal cancer while the policy was in effect.

In a lengthy 50 page Opinion, the Pennsylvania Superior Court outlined the current status of Pennsylvania law in bad faith litigation pertaining to insurance contracts.  

The Rancosky court reiterated that, in order to prove bad faith, an insured must present clear and convincing evidence that (1) the carrier did not have a reasonable basis for denying benefits under the policy, and (2) the carrier knew of or recklessly disregarded its lack of reasonable basis in denying the claim.

The significance of this Rancosky decision is that the court agreed with the Plaintiff’s argument that the trial court improperly applied the burden of proof upon the Plaintiff by erroneously requiring the Plaintiff to show a “dishonest purpose” or “motive of self-interest or ill will” on the part of the carrier under the first part of the two-part test.   Rather, the court stated that these elements should only be considered in determining whether the second prong of the bad faith test, i.e., whether a carrier knowingly or recklessly disregarded its lack of a reasonable basis for denying the claim.  

The Superior Court stated that the trial court could not have considered whether the carrier had a dishonest purpose or a motive of self-interest or ill will until it had first determined that the carrier lacked reasonable basis for denying benefits to the insured under the Cancer Policy.   The Superior Court more specifically found that the trial court improperly erred as a matter of law by using standards applicable to the second prong of the bad faith test in its determination of whether or not the Plaintiff had satisfied the first prong of the bad faith test.  

The Superior Court otherwise concluded that the evidence did not support the trial court’s determination that the carrier had a reasonable basis for denying the benefits to the insured.  

In its Opinion, the Superior Court also addressed the other allegations of the Plaintiff regarding a delay in the evaluation of the claim presented by the carrier.  

With respect to the coverage issues presented in this matter, the Superior Court noted that, when a carrier is presented with conflicting facts that are material of the issue of coverage, the carrier may not merely select or, as here, passively, “accept,” a singular disputed fact, to provide the carrier as a basis to deny coverage.   Rather, the carrier is required under the law to undertake a meaningful investigation to obtain accurate information that pertains to the coverage question.   Here the court found that the carrier failed to do so under the circumstances presented.

On a statute of limitations issue, the court rejected the carrier’s claim that the Plaintiff’s suit was barred by the statute of limitations applicable to bad faith actions.  

In so ruling, the Superior Court noted that, in the context of an insurance claim, a continuing or repeated denial of coverage is merely a continuation of the injury caused by the initial denial of coverage and does not constitute a new injury that triggers the beginning of a new statute of limitations period.  

However, the court stated that, when a Plaintiff alleges a subsequent, separate and distinct act of bad faith on the part of the carrier that is distinct from and unrelated to the initial denial of coverage, a new limitation period begins to run from the later active alleged bad faith.   In this regard, the court found that an alleged inadequate investigation can be a separate and independent injury to the insured.  

The Rancosky court also found that a refusal to reconsider a denial of coverage based upon new evidence is another example of a separate and independent injury to an insured. 

In such scenarios, the statute of limitations for such injuries begins to run when the insurer communicates to the insured the results of its inadequate investigation, or in the second instance, when the carrier communicates to the insured its refusal to consider new evidence that discredits the insurer’s basis for its denial of the claim.  

Anyone wishing to review the majority Opinion by the Pennsylvania Superior Court on the above bad faith issues may click this LINK.

The Concurring and Dissenting Opinion by Judge Jenkins can be viewed HERE.


UPDATE:  The Tort Talk blog post on the more recent Pennsylvania Supreme Court decision in this case can be viewed HERE.

Pennsylvania Superior Court Affirms Entry of Summary Judgment On Basis of Assumption of Risk Defense (Non-Precedential)

In its recent non-precedential decision in the case of Denzel v. Federal Cleaning Contractors, et.al., No. 3307 EDA 2014 (Pa. Super. Oct. 9, 2015 Bowes, J., Mundy, J., and Fitzgerald, J.) (Memorandum Opinion by Mundy, J.), the Pennsylvania Superior Court confirmed that a trial court may enter summary judgment based upon an assumption of risk defense.

Although this decision is non-precedential, the court relied upon the precedential Supreme Court case of Carrender v. Fitterer, 469 A.2d 120 (Pa. 1983), in support of its decision.

Both the Denzel and Carrender cases involved slip and fall matters. In this non-precedential Denzel Opinion, the Pennsylvania Superior Court affirmed the trial court’s entry of summary judgment in favor of Defendant after finding that a Plaintiff business invitee assumed the risk of injury by walking through ice and snow at an outdoor shopping center despite knowledge of the dangerous conditions. 


Anyone wishing to review this non-precedential decision may click this LINK.


Commentary:  Although non-precedential, the Denzel decision not only reaffirms that the assumption of risk defense is alive and well in Pennsylvania but also that summary judgment may be granted on the basis of this defense when supported by the record before the court, i.e., when no reasonable minds on a jury could disagree on a conclusion that the Plaintiff assumed the risk of injury such that he or she is barred from a recovery.

Quoted in Pennsylvania Law Weekly Article on Latest Trends in Post-Koken Auto Litigation in PA

Here's a LINK to a recent December 15, 2015 Pennsylvania Law Weekly front page article by Ben Seal entitled "Lawyers Await Appellate Guidance on UIM Bifurcation" in which I was quoted (along with Attorneys Scott Cooper and Michael Pisanchyn) on the current notable trends in Post-Koken Auto Accident litigation.

If you cannot access the article via the Link provided please let me know and I will email a copy.

Federal Court Rules on Propriety of Financial Wealth Discovery in Punitive Damages Cases

In the case of N’Jai v. Bentz, Civil Action No. 13-1212 (W.D. Pa. Nov. 24, 2015 Fischer, J.), the court denied a Plaintiff’s Motion to Compel relative to a punitive damages claim.

In so ruling, the federal court asserted that a Plaintiff is not automatically entitled to discovery of a Defendant’s financial wealth simply by successful pleading a punitive damages claim.  Rather, the court noted that a Plaintiff must go beyond the pleadings and produce prima facie evidence to show a right to recover punitive damages before a court would permit such financial wealth discovery.  

Stated otherwise, the court found that financial wealth discovery is not appropriate in a civil litigation matter until there is a reasonable evidentiary basis to show that a Plaintiff’s punitive damages claims can be submitted a jury.  

Anyone wishing to review this case online may click this LINK.

 

I thank Attorney James M. Beck of the Philadelphia office of Reid Smith for bringing this case to my attention.