Eastern District Court Applies Gallagher Household Exclusion Decision

In the case of Stockdale v. Allstate Fire and Casualty Insurance Company, No. 2:19-cv-00845-WB (E.D. Pa. Feb. 27, 2020 Beetlestone, J.), the Court followed the Pennsylvania Supreme Court's sweeping decision in Gallagher and likewise held that the household exclusion was eradicated across the board.

The court in Stockdale rejected the insurance company's argument that the Pennsylvania Supreme Court Opinion in Gallagher v. GEICO, 201 A.3d 131 (Pa. 2019) should limited to its facts. The additional argument by the insurance company that the exclusion is valid when an insured rejected stacking was not accepted by the Court.

In this decision, the Eastern District Federal Court held that Gallagher applies in all household exclusion cases.

The Court also noted that the focus on the rejection of stacking question is not based upon actions of the insured, but instead based upon the policy under which coverage is sought.

The Court in Stockdale also ruled that the Gallagher decision applied to cases even where different insurance companies are involved.

In the end, Judge Beetlestone granted the insured's Motion for Partial Summary Judgment and denied Allstate’s Motion for Summary Judgment.

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

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

UPDATE:  In an Opinion and Order dated April 8, 2020, the same Court denied a F.R.C.P. 54 Motion by the carrier seeking to have the issue presented certified as a final judgment so as to allow for an appeal of the issue to the Third Circuit.  As this Motion was denied, the plaintiffs were able to continue with their plan to certify a class action suit based upon the Household Exclusion issue.

Anyone wishing to review the Court's April 8, 2020 Opinion may click this LINK.  The companion Order denying the Motion can be viewed HERE. 

NOTE CONTACT INFO FOR NEW CUMMINS LAW OFFICE

WE’RE OPEN!

CUMMINS LAW

610 Morgan Highway

Clarks Summit, PA 18411

www.CumminsLaw.net

P: (570) 319-5899

F: (570) 319-5898

E: info@cumminslaw.net

Daniel E. Cummins, Partner

dancummins@cumminslaw.net

Stephen T. Kopko, Associate

stephenkopko@cumminslaw.net

Timothy E. Foley, Of Counsel

timfoley@cumminslaw.net

A NEW LAW OFFICE OPENS -- CUMMINS LAW

Managing Partner, Daniel E. Cummins, Esq., has announced that CUMMINS LAW, (www.CumminsLaw.net) a civil litigation law firm has opened its doors for business at 610 Morgan Highway, Clarks Summit, Pennsylvania 18411. The phone number for the firm is 570-319-5899.

The new law office is located at the old Man, Levy & Nogy Insurance Agency building and has been renovated to accommodate its new use. The building is owned by Cherry Hill Partners, Inc. and Cummins Law is the only tenant in the building as a stand-alone law firm.

The lawyers at Cummins Law defend insurance companies and their insureds, along with private businesses, who become involved in civil lawsuits arising out of motor vehicle and trucking accidents, slip or trip and fall matters, products liability matters, construction litigation, as well as in medical malpractice matters.  Cummins Law will also be defending municipalities in personal injury matters and in Section 1983 civil rights litigation matters.

The attorneys at Cummins Law will also provide a wide variety of other litigation services to the public.

Also continuing at the same location will be CUMMINS MEDIATION SERVICES.  Please contact me it you wish to attempt to bring your case to a close by way of a mediation.

And, of course, Tort Talk will continue going forward as a resource for continuing updates on important cases and trends in Pennsylvania Civil Litigation Law.

I thank those who have mentored me along the way in my career, including but not limited to, Professor Gary S. Gildin at the Dickinson School of Law - Carlisle who taught me how to analyze a case and trial advocacy skills, retired President Judge Harold A. Thomson, Jr. of the Pike County Court of Common Pleas who gave me my first job as a law clerk, the late Attorney William ("Bill") G. Rice who I served with as law clerk, and Timothy E. Foley who taught me the ins and outs of  engaging in proper insurance defense litigation with integrity.  But most of all, I thank my wife, Anne Cummins, for being my greatest supporter both at work and at home.

Municipality Secures Summary Judgment Under PSTCA in Trip and Fall Case

In the case of Reaves v. Akken, No. 180404796, No. 2244 EDA 2019 (C.P. Phila. Co. Dec. 16, 2019 Butchart, J.), the court granted the City of Philadelphia’s Motion for Summary Judgment in a trip and fall case.

According to the Opinion, the Plaintiff fell while she was walking on a handicap ramp. The Plaintiff claimed that her fall was caused by a dangerous or defective condition of the sidewalk. The street near where the ramp was located was designated as a state highway.

The owners of the abutting property had reached a settlement and entered into a Release with the Plaintiff.

The remaining Defendant, the City of Philadelphia, moved for summary judgment.

The court noted that the Political Subdivision Tort Claims Act generally granted immunity to municipalities for negligence. However, an injured party is able to overcome this immunity if one of the exceptions under 42 Pa.C.S.A. §8542 applied. The court in this case noted that the appellate courts of Pennsylvania have narrowly construed the exceptions.

In this matter, the Plaintiff was attempting to rely upon the sidewalks exception and the streets exception, neither of which the court found applicable to allow the case to proceed.

The court also noted that, where there is abutting owner at issue, the municipality can only be secondarily liable.

The court also noted that, in this case, the release of the primarily liable party extinguished any claim against the secondarily liable party. Because the Plaintiff had settled the claims with the abutting property owners, i.e., the parties who were primarily liable, the claims against the city, which was only secondarily liable, were found to be extinguished.

The court also found the street exception inapplicable given that the nearby street was owned by the state and not the municipality at issue.

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

Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (Jan. 28, 2020).

Court Rules That Plaintiff Need Not Plead Clear and Convincing Evidence In Order to Proceed with Bad Faith Claim

In the case of Solano-Sanchez v. State Farm Mut. Auto. Ins. Co., No. 5:19-CV-04016 (E.D. Pa. Jan. 24, 2020 Leeson, J.), the court denied a carrier’s Motion to Dismiss a Plaintiff’s breach of contract and bad faith claims in a UIM case. 

The Plaintiff alleged that the carrier had failed to pay her UIM benefits or to provide an explanation for its failure to do so. 

In his decision, Judge Joseph Leeson rejected the carrier’s argument that the Plaintiff had to “establish” bad faith by “clear and convincing evidence” in her pleading itself. The court noted that, while presenting clear and convincing evidence might be the Plaintiff’s burden of proof at trial, it was not her burden at the pleadings stage of the litigation to present such evidence. 

 Rather, the Court found that the Plaintiff only had to plausibly plead facts to assert that the carrier allegedly unreasonably denied benefits or declined to take action on her claim and that the carrier knew or should have known that its conduct was unreasonable.

Judge Leeson also rejected the carrier’s efforts to dismiss the Plaintiff’s claim for attorney’s fees. The court noted that such damages were permitted under the bad faith statute. 

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

Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (Feb. 11, 2020).

Expert Allowed To Testify Regarding Bad Faith, But With Limitations

In the case of Three Rivers Hydroponics, LLC v. Florists’ Mut. Ins. Co., No. 2:15-CV-809 (W.D. Pa. Jan. 27, 2020 Hornak, J.), the court allowed a Plaintiff’s bad faith expert to testify with certain limitations.

The case arose out of a first party property loss from fire damage to a commercial greenhouse sterilization system.

The Plaintiff alleged that the carrier had wrongly denied coverage and that, as a result, the Plaintiff was forced out of business due to the carrier’s conduct. The Plaintiff sued for breach of contract and bad faith.

One of the experts the Plaintiff sought to use at trial was a bad faith expert. That bad faith expert was an attorney who also had over twenty (20) years of experience as a claims adjuster. That expert was offered by the Plaintiff to present opinions regarding insurance industry standards and practices, regarding the carrier’s handling of the claim at issue, regarding the carrier’s compliance with insurance statutes and regulations, and with respect to an interpretation of the carrier’s policy that was issued to the Plaintiff.

The carrier brought a Daubert Motion to Preclude the Plaintiff’s bad faith expert’s testimony. The defense asserted that the expert attorney’s legal conclusions would not help a jury. The carrier more specifically sought to preclude the expert from testifying on whether or not the carrier violated statutes or regulations and with respect to the expert’s interpretation of the Plaintiff’s insurance policy.

The federal district court ruled that “the admissibility of expert testimony hinges on a ‘trilogy of restrictions’: qualification, reliability and fit.”

In this matter the admissibility of the testimony rested on the restrictions pertaining to 'fit.'   In that regard, the court noted that, under Federal Rule of Evidence 702, the expert testimony must help the jury to understand the evidence or to determine a fact in issue.

The court noted that the “standard for fit is ‘not that high,’ although the standard was noted to be is higher than mere relevance.

In the end, the court ruled that, with certain limitations, the bad faith expert’s testimony would assist the jury in determining what constituted reasonable conduct when handling an insurance claim. The court noted that the expert’s twenty-six (26) years of experience as a claims adjuster would also be helpful in providing the jury with guideposts as to what constitutes reasonable adjusting and claims handling conduct.

As such, the expert was permitted to testify as to best practices in handling insurance claims of the type at issue in this case.

The expert was prohibited from testifying on whether or not the carrier violated any statutes or regulations.

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


I send thanks to Attorney Lee Applebaum, the writer of the excellent Pennsylvania and New Jersey Insurance Bad Faith Case Law blog and of the Philadelphia law firm of Fineman, Krekstein & Harris for bringing this case to my attention.

Dead Man's Rule Applied to Affirm Entry of Judgment in Favor of Deceased Defendant

In its latest application of the Dead Man’s Rule, the Pennsylvania Superior Court in the case of Jones v. Plumer, 2020 Pa. Super. 7 (Pa. Super. Jan. 15, 2020) ruled that a Plaintiff would not be able to testify in a case against her landlord in a trip and fall matter, where the landlord died before he could provide any counter testimony. 

The court also ruled that, given that the Plaintiff was not able to testify in the matter, the other evidence did not sufficiently support a finding of causation.

As such, the Superior Court affirmed the entry of summary judgment in favor of the Defendant by the trial court. 

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