Federal Court Addresses Collateral Estoppel Issues In UIM Case Where Plaintiff Secured Less Than Liability Limits At Third Party Arbitration

In the case of Holland v. Progressive Spec. Ins. Co., No. 23-0910-KSM (E.D. Pa. April 10, 2023 Marston, J.), the court granted in part and denied in part a Defendant carrier’s Motion to Dismiss portions of a Plaintiff’s bad faith claim in a UIM case.

The court denied the Motion to Dismiss the Plaintiff’s breach of contract action.

According to the Opinion, the carrier moved to dismiss the Complaint which was based upon the carrier’s denial of the Plaintiff’s UIM claim.

In this matter, the Plaintiff had previously arbitrated his claims against the tortfeasor and secured an Arbitration Award.

The Plaintiff then signed a Release in which the Plantiff released all of his claims against the tortfeasor, the tortfeasor’s insurance company and “any other person, firm, or corporation” chargeable with responsibility for the accident.

The Plaintiff had included a handwritten clause on the Release reserving his right to bring a UM/UIM claim against his own insurance carrier.

The Plaintiff had additionally sent a request to his own insurance carrier for consent to settle before he signs the Release.

The UIM carrier also noted the arbitrator had found that the Plaintiff’s damages did not exceed the tortfeasor credit and, as such, the UIM carrier denied the claim presented.  More specifically, in the third party arbitration the Plaintiff had been awarded $58,029.85 in a case where the tortfeasor had $100,000 in liability coverage.

The Plaintiff sued the UIM carrier in state court for breach of contract and bad faith. The carrier removed the action to the federal court.

In its Motion to Dismiss the carrier primarily argued that the Plaintiff’s breach of contract claim was barred by collateral estoppel. The carrier also noted that the Plaintiff failed to allege sufficient facts to support a bad faith claim.

Relative to the bad faith claim, the court found that the Plaintiff’s Complaint consisted of conclusory statements unsupported by facts. There were no details provided describing what was allegedly unfair about the UIM carrier’s settlement negotiations and the Complaint also failed to explain what alleged misrepresentation the UIM carrier may have made.

In its decision, the court noted that, relative to the bad faith claim, the UIM carrier’s argument that the other driver was not driving an underinsured motor vehicle was reasonable and was supported by the case law and the facts and circumstances of this case.

The court also found that the Plaintiff did not allege any fact to suggest that the UIM carrier denied the Plaintiff’s claim with “ill will” or under a “dishonest purpose.” It was also noted that the Plaintiff did not assert that the UIM carrier’s decision to deny coverage was made with undue delay.

Relative to the breach of contract action and the argument that the same was barred by the collateral estoppel doctrine, the federal court found that it needed additional information as to the scope of the Arbitration in order to determine if the carrier had satisfied its burden of establishing that the doctrine of collateral estoppel applied. In this regard, it was indicated that neither party to the action had submitted to the court a copy of the Arbitration Agreement, the Arbitration record, or the Arbitrator’s findings. As such, the Motion to Dismiss the breach of contract action was denied.

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


Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (April 27, 2023).

Court Addresses A Number of Notable Trial Issues in a Shooting Case That May Apply In Many Other Types of Civil Litigation Trials

In the case of Rogers v. Thomas, No. 1915 MDA 2018 (Pa. Super. March 2, 2023)(en banc) (Op. by Stabile, J.)(Concurring Op. by Kunselman, J.), the court addressed a number of post-trial issues following a multi-day wrongful death and survival action jury trial arising out of a fatal shooting incident.

Of note, the Pennsylvania Superior Court addressed whether the doctrine of collateral estoppel applied to the shooter’s criminal conviction arising out of the same incident so as to conclusively establish the shooter’s liability in this civil litigation. In the end, the court found that, under the doctrine of collateral estoppel, the shooter’s conviction for voluntary manslaughter conclusively established the facts that were determined in his criminal trial relative to the shootings.  

However, the appellate court in this civil litigation confirmed that the results of the criminal trial did not answer the questions of causation or comparative fault in this personal injury matter.  Rather, those questions remained to be determined in this civil trial before a jury could consider whether or not to award damages. See Op. at 11-12.

In so ruling, the Pennsylvania Superior Court provided a detailed recitation of Pennsylvania precedent on the effect of collateral estoppel upon civil proceedings following a previous criminal conviction.

The court also addressed the issue of whether the concept of comparative negligence applies in cases where a Defendant has engaged in intentional or reckless conduct as was alleged in this matter.

The Pennsylvania Superior Court noted that, “[a]lthough our Supreme Court has not addressed the issue, both this Court and our sister court, the Commonwealth court, have held that the Comparative and Negligence Act does not apply in a situation where a Plaintiff may be guilty of negligence, but a Defendant has acted recklessly.”  See Op. at 22 [citations omitted].

Here, the shooter argued that the Plaintiffs were wrong in arguing that the doctrine of comparative negligence should not have been applied. The shooter argued that there had never been any determination in any court that the conduct of the shooter was found to be “willful, wanton, or reckless.” 

The Superior Court noted that the plain language of the criminal statute pertaining to voluntary manslaughter did not contain any requirement of a finding that a person acted recklessly to be guilty of that crime.

The court went on to note that, even though the shooter may have acted intentionally, there still remained a question as to whether or not the shooter was justified in believing that his actions were in self-defense and, as such, potentially not reckless. 

The court confirmed that a person may have been found to have acted intentionally, but that does not necessarily mean that they also acted recklessly. 

As such, the Superior Court in this Rogers case found that the Plaintiffs were incorrect in asserting that intentional conduct necessarily covers reckless conduct.  See Op. at 23-24.

This decision is also notable in that the court found that the Plaintiffs had waived a number of issues by failing to follow the appellate rules establishing the procedures necessary to preserve issues for appeal.

In one instance, the court found that the Plaintiffs had waived their challenge to the trial court’s previous coordination order in which a Lackawanna County lawsuit was coordinated with a Susquehanna County lawsuit.  In this regard, the Pennsylvania Superior Court noted that the Pennsylvania Rules of Appellate Procedure 311(c) allows a party in a civil action to take an interlocutory appeal as of right from an Order changing venue and/or transferring a case to another court of coordinated jurisdiction, or declining to proceed in the matter on the basis of forum non conveniens.

The court noted that a failure to lodge an interlocutory appeal in this scenario constitutes a waiver in any subsequent appeal of related challenges to decisions by the court.

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

The Concurring Opinion by Judge Kunselman can be viewed HERE.


I send thanks to Attorney Gary Weber of the Williamsport, Pa law firm of Mitchell Gallagher, P.C. for bringing this case to my attention.

Pennsylvania Superior Court Addresses Collateral Estoppel With Respect to Prior Criminal Conviction

In the case of Rogers v. Thomas, No. 2021 Pa. Super. 93 (Pa. Super. May 11, 2021) (Op. by McLaughlin, J.) (Stabile, J., concurring and dissenting), the court found that, in a wrongful death shooting civil litigation that took place after the shooter was previously convicted in a criminal case, that the trial court erred in permitting a jury to determine whether or not the shooter Defendant was negligent since had already been criminally convicted of voluntary manslaughter.

The court ruled that the shooter Defendant was collaterally estopped from re-litigating his liability where there was a criminal conviction in place from a prior criminal trial. The court ruled that the previous criminal conviction prevented the Defendant from denying, in a subsequent civil case, things that were necessarily proven in the criminal case, absent extraordinary circumstances.

However, the court disagreed with the Plaintiff’s argument that the Defendant’s criminal conviction also established that Co-Defendants that were related to the shooter were also negligent. Rather, the court found that the Plaintiff were required to prove additional facts beyond the shooter Defendant’s negligence to show that the other Co-Defendants were potentially liable.

The court also disagreed with the Plaintiff’s argument that the trial court had erred in allowing the jury to determine comparative negligence in terms of the shooting victim. The court agreed with the trial court that these issues had not been litigated in the criminal trial.

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

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



Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (June 1, 2021).

Source of image:  Tingley Injury Law Firm via Unsplash.

Pennsylvania Supreme Court Addresses Doctrines of Res Judicata As Well As Collateral Estoppel

In the case of In Re: Appeal of the Coatesville Area School District, No. 7 MAP 2020 (Pa. Jan. 20, 2021) (Op. by Saylor, C.J.), the court addressed the current status of the law in Pennsylvania regarding res judicata and the collateral estoppel doctrine in a case involving a tax appeal. 

Although this case involved a tax appeal, it is likely that the court’s pronouncement on the current status of the law regarding these doctrines would apply in all civil matters.

Under this decision, the court ruled that the Coatesville Areas School District should not have been barred from a merits resolution of its appeal of a tax assessment on the bases of res judicata (claim preclusion) and collateral estoppel (issue preclusion).  

In its decision, the court again confirmed that the doctrine of collateral estoppel focuses on issues rather than claims, whereas the res judicata doctrine more appropriately applies to the preclusion against relitigating entire claims a second time.   In the end, the Majority felt that the application of the doctrines was not warranted in this case.

Anyone wishing to review a copy of the Majority's decision may click this LINK. Justice Wecht's Dissenting Opinion can be viewed HERE. (The Dissenting Opinion also sets out the law nicely with respect to these doctrines).

Source: Article – “Pa Justices Define Contours of Res Judicata and Collateral Estoppel Doctrines, “ by P.J. D’Annunzio Pennsylvania Law Weekly (Jan. 22, 2021). 

Is It An Arbitration Award or Not?

In the case of Martinez v. Nationwide Ins. Co., No. 18-2972 (E.D. Pa. Feb. 18, 2020 Perkin, U.S.M.J.), the court denied a carrier’s Motion for Summary Judgment in a UIM claim where there were issues of fact over whether the ADR proceedings resulted in a settlement recommendation or a binding arbitration award for less than the tortfeasor’s limits.

According to the Opinion, the Plaintiff proceeded in the third party auto accident matter to an alternative dispute resolution proceeding which resulted in an arbitrator entering a finding in favor of the Plaintiff for $22,500.00 after which the Plaintiff’s lawsuit was subsequently marked as settled, discontinued and ended.

Thereafter, the Plaintiff’s attorney responded to the carrier’s inquiries about the status of the arbitration of the third party matter. After receiving the arbitrator’s award, the Plaintiff’s counsel notified the carrier of the “settlement” via a Dailey-Sands letter with a request that the UIM carrier either approve the “settlement” or tender the amount of the “settlement” to preserve its subrogation rights.

The carrier filed a Motion for Summary Judgment in this matter asserting that the Plaintiff had received a binding arbitration award for less than the third party tortfeasor’s limits such that there was no valid UIM claim.

In this matter, the Federal Magistrate Judge found that there were issues to be resolved that prevented the entry of summary judgment.

The court agreed with the Plaintiff that the ADR proceedings merely resulted in a non-binding settlement recommendation from an arbitrator. The court noted that the arbitrator’s document used terms such as “recommendation” and “recommend” rather than language indicating that the arbitration award document was meant to be a binding arbitration award on the Plaintiff. 

The court additionally noted that, if the document was determined to be a settlement recommendation, then there would be no final judgment that would preclude the Plaintiff from litigating her damages under the doctrine of collateral estoppel.

Anyone wishing to review a copy of this decision may click this LINK.  The Order related to this Opinion can be found HERE.

Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (March 3, 2020).

Binding Arbitration Award Less Than Tortfeasor's Limits Collaterally Estops UIM Claim

In the federal Post-Koken case of Shiffer v. Liberty Mutual Fire Ins. Co., No. 3:17-CV-978 (M.D. Pa. July 22, 2019 Mariani, J.), Judge Robert D. Mariani of the Federal Middle District Court of Pennsylvania applied the collateral estoppel doctrine to support the entry of summary judgment in favor of an automobile insurance carrier on a UIM claim where the Plaintiff had previously concluded the third party claim by way of a binding high/low arbitration at which an award was entered below the amount of the tortfeasor's liability limits.

According to the Opinion, during the course of the prior third party litigation, the parties in that matter agreed to proceed to a binding high/low arbitration at which the high parameter was set at the tortfeasor's liability limits. 

In the Binding Arbitration Agreement to relative to the third party claim, the Plaintiff expressly reserved the right to pursue a UIM claim.  The UIM carrier was not a party to that Arbitration Agreement.

As noted, the arbitrator in the third party claim entered an award in favor of the Plaintiff that was less than the tortfeasor's liability limits.

After the Arbitration, the Plaintiff signed a Release requested by the tortfeasor's carrier which confirmed a settlement of the third party liability case in the same amount as the Arbitration Award.

Thereafter, the Plaintiff commenced this UIM Post-Koken lawsuit.  After discovery, the UIM carrier filed a Motion for Summary Judgment asserting the collateral estoppel doctrine and asserted that the Plaintiff was collaterally estopped from pursuing the UIM claim as the matter had been previously fully litigated and the tortfeasor had essentially been determined not to have been underinsured.

The Plaintiff responded with the argument that the criteria for the application of the collateral estoppel doctrine had not been met by the defense.  The Plaintiff additionally asserted that the Court should honor the language in the Arbitration Agreement under which the Plaintiff preserved the right to pursue a UIM claim following the Arbitration.

Judge Robert D. Mariani
M.D. Pa.

After providing a thorough and detailed analysis of the collateral estoppel doctrine in general as well as in this particular context of the impact of a third party award less than the tortfeasor's limits on a UIM claim, the Court granted summary judgment in favor of the carrier on the UIM claim.

The Court found that the Plaintif had been provided with a full and fair opportunity to litigate the claim at the Arbitration and that a final determination had been made at the Arbitration relative to the amount of damages that the Plaintiff was entitled to as a result of the accident.  Given that the Arbitration Award was less than the tortfeasor's liability limits, the Plaintiff was found to be collaterally estopped from pursuing an underinsured motorist claim against the Plaintiff's own automobile insurance policy.

The Court additionally held that the language in the Binding Arbitration Agreement under which the Plaintiff had attempted to preserve the right to pursue a UIM claim did not serve to alter the result.

Anyone wishing to review Judge Mariani's Opinion in Shiffer may click this LINK

The Court's companion Order can be viewed HERE.


For other Tort Talk Blog posts on the effect of the collateral estoppel doctrine in UIM cases, click HERE (be sure to continue scrolling down to additional posts below the long Post-Koken Scorecard post in order to see more write-ups on cases in this context).

Judgment on the Pleadings Entered in UIM Case After Plaintiff Secured Liability Limits From Tortfeasor in Binding Arbitration of Third Party Claim

In the case of Tenbus v. Progressive Direct Ins. Co., No. 548-CV-2016 (C.P. Wayne Co. Nov. 22, 2017 Hamill, J.), Judge Raymond L. Hamill entered a Judgment on the Pleadings in favor of a UIM carrier after finding that the Plaintiff failed to state a valid UIM claim under Pennsylvania's Motor Vehicle Financial Responsibility Law and the policy definition of an "underinsured motor vehicle" where the Plaintiff was awarded the full liability limits of the tortfeasor in a related binding arbitration of the third party claims.

In dicta, the court also noted that the Plaintiff's UIM claim was barred by the collateral estoppel doctrine as well.

Anyone wishing to review this decision may click this LINK.

I send thanks to Attorney David Friedman of the King of Prussia office of the Forry Ullman law firm for bringing this case to my attention.

Superior Court Addresses Whether UIM Claim is Collaterally Estopped By Prior Third Party Binding Arbitration Award (Maybe)

In a "non-precedential" Memorandum decision in the case of Fernandez v. Erie  Insurance Group, No. 1002 EDA 2016 (Pa. Super. 2017 Moulton, Ransom, Fitzgerald, J.J.)(mem. op. by Fitzgerald, J.), the Pennsylvania Superior Court held that a UIM claim was not estopped by a previous arbitration award entered on the third party portion of the case.

According to the Opinion, the tortfeasor Defendant had a liability policy with a $50,000.00 limit.   The parties in the underlying third party matter proceeded to a binding arbitration at which the arbitrator found in favor of the Plaintiff for $87,000.00 and then molded the verdict down to the $50,000.00 liability limits.  

The Plaintiff later signed a Release and included a handwritten note indicating that she expressly reserved the right to pursue her UIM claims against the UIM carrier. 

Thereafter, the Plaintiff filed a breach of contract and bad faith claim against the UIM carrier.   The UIM carrier responded with a summary judgment motion asserting that the arbitration award in the third party matter collaterally estopped the Plaintiff from pursuing UIM benefits.   The UIM carrier also asked the court to grant the Plaintiff a total of $37,000.00 of UIM benefits, i.e., the difference between the arbitration finding and the molded award.  

After the trial court granted the UIM carrier’s Motion for Summary Judgment, the Plaintiff appealed.  

On appeal, the Superior Court agreed that, under collateral estoppel principles, the arbitration award was binding on the Plaintiff to the extent of the arbitrator’s jurisdiction.   However, the court stated that it could not tell whether the parties in the third party case had imposed any limit on the arbitrator’s jurisdiction.  Accordingly, the court found that the case should have been allowed to proceed to a jury to settle the jurisdictional ambiguity.  

As such, the Superior Court reversed the trial court’s ruling and remanded the case for further proceedings.  

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

Source: Article: “UIM Claim Not Estopped by Arbitration Award, Superior Court Rules,” By: Ben Seal of the Pennsylvania Law Weekly (May 2, 2017).  


To view other Tort Talk posts on the collateral estoppel issue, click HERE.

Another UIM Case Defeated By Collateral Estoppel Doctrine

In a recent Post-Koken collateral estoppel decision of note, Judge David Williamson of the Monroe County Court of Common Pleas ruled in the case of DeHoyos v. GEICO, No. 10532-CV-2013 (C.P. Monroe Co. April 20, 2015 Willamson, J.) that a Plaintiff was barred from pursuing a UIM claim where the award the Plaintiff received from the third party tortfeasor after an application of a high/low agreement to the jury's verdict was less than the tortfeasor's liability limits.

In this matter, the tortfeasor's liability limits were $500,000.  The jury awarded $581,000 at trial but that verdict was molded downward to $450,000 pursuant to the high/low agreement entered into by the parties prior to the entry of the verdict.

Applying the language of the GEICO policy, as well as Pennsylvania law, the court noted that there could be no claim for UIM coverage when the amount of damages the plaintiff was legally entitled to recover from the tortfeasor did not exceed the available liability policy limits covering the tortfeasor.

Judge David J. Williamson
Monroe County

The court rejected the argument by the Plaintiff that the amount of the jury's original verdict that was entered  constituted the actual award to be considered with respect to the collateral estoppel issue.   Judge Williamson instead viewed the high/low agreement as a settlement agreement that placed limits of a maximum and a minimum for potential awards by the jury.  Accordingly, the high/low agreement was found to be a valid and enforceable contract that capped the plaintiff's recovery at a number below the available liability limits.  Thus, the actual award for collateral estoppel analysis in this matter was the high parameter of the high/low agreement.

Since the high parameter was less than the tortfeasor's liability limits, the court found no legal basis for the plaintiff to pursue the companion UIM claim.  As such, the carrier's motion for partial summary judgment was granted.


Anyone wishing to review a copy of this decision, may contact me at dancummins@comcast.net.

To review other Tort Talk blog posts on similar collateral estoppel issues, click HERE.

Prior Verdict Against Tortfeasor Can Serve to Collaterally Estop Companion UIM Claim

In its recent June 5, 2015 decision in the case of Mason v. Progressive Direct Ins. Co., No. 1650 EDA 2014 (Pa. Super. 2015 Panella, Ott, Jenkins, J.J.)(Op. by Panella, J.), the Pennsylvania Superior Court affirmed a trial court's entry of summary judgment in favor of a UIM carrier on collateral estoppel grounds, holding that a verdict in the third party case against the tortfeasor can serve to collaterally estopped the Plaintiff from pursuing a companion UIM claim even where the verdict was in excess of the third party tortfeasor's limits.

In this case the tortfeasor had liability limits of $25,000.  The jury entered a verdict of $100,000 in favor of the Plaintiff.

In applying collateral estoppel, the trial and appellate courts in this matter emphasized that not only did the tortfeasor's liability carrier pay the entire verdict but the Plaintiff accepted the payment and had the judgment marked satisfied.

When the Plaintiff thereafter sued the UIM carrier, the UIM carrier sought and secured summary judgment, arguing that the issue of liability and damages had already been fully litigated with the Plaintiff having been paid in full and the verdict/judgment having been marked satisfied. 

The Superior Court affirmed and ruled that, under such circumstances, the issues of liability and damages could not be relitigated by the Plaintiff against the UIM carrier on a UIM claim.

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

Third Circuit Affirms Summary Judgment for UIM Carrier Due to Lack of Evidence That Tortfeasor Was "Underinsured" (DECISION IS "NOT PRECEDENTIAL")

Tort Talkers may recall that I previously reported on the Pennsylvania Eastern District Federal Court decision of Gallagher v. Ohio Casualty Insurance Company HERE in which the federal trial court ruled that a Plaintiff was barred from pursuing a UIM claim after participating in a non-binding mediation that resulted in a settlement of the third party claim at an amount less than the third party tortfeasor's liability limits.

UPDATE

On January 29, 2015, the Third Circuit Court of Appeals issued its "Not Precedential" decision in the case with the citation being Gallagher v. Ohio Casualty Ins. Co., No. 14-2687 (3d Cir. Jan. 29, 2015 Hardiman, Scirica, and Barry, Circuit Judges)(Op. by Barry, Circuit Judge).

The Opinion notes that the decision in this case by the Third Circuit is not an opinion of the full court and, pursuant to I.O.P. 5.7, "does not constitute binding precedent."

The third party tortfeasor was covered by a liability policy with $100,000 in liability limits.

In the third party matter, the Plaintiff agreed to a "private, non-binding arbitration" at which the arbitrator evaluated the case as having a value of $41,715.  The Plaintiff initially rejected that assessment, but later agreed to settle the third party matter for that exact same amount.

Thereafter, when the Plaintiff filed suit against the UIM carrier, the UIM carrier eventually filed a motion for summary judgment arguing collateral estoppel. 

The trial court rejected the collateral estoppel argument but found that the UIM carrier was entitled to summary judgment given the lack of evidence produced by the Plaintiff to show that the tortfeasor defendant was underinsured.  In other words, the Plaintiff failed to present evidence that her damages met or exceeded the amount of the tortfeasor's liability limits.

The Third Circuit rejected the Plaintiff's assertion that the trial court concluded that the Plaintiff was not entitled to UIM benefits because she accepted a settlement less than the liability limits--the Third Circuit found this assertion to be a mischaracterization of the trial court's reasoning.

Rather, the Third Circuit agreed with the trial court's actual finding and reasoning that the Plaintiff had failed to produce any evidence that the third party tortfeasor was "underinsured" so as to support the Plaintiff's effort to pursue UIM benefits in this matter after having settled with the tortfeasor at an amount substantially less than the available liability limits.

The court noted that the Plaintiff's allegations of "serious" or "permanent" injuries as well as economic damages, without more, only amounted to "unsupported allegations in the pleadings" which, as a matter of law, were insufficient to establish any genuine issue of material fact.  Accordingly, the UIM carrier's summary judgment motion was granted.


It is reiterated that the Third Circuit marked its decision as "Not Precedential."  Anyone wishing to review a copy of the Third Circuit's Opinion may contact me at dancummins@comcast.net.

The trial court Opinion in Gallagher may be viewed at this LINK.  The related Court Order can be viewed HERE.


To review Tort Talk blog posts on cases that do apply the application of the Collateral Estoppel Doctrine in the context of Post-Koken third party liability/UIM auto accident cases, click this LINK.


Source of image: www.commons.wikimedia.org

Updates, Trends and Thoughts Regarding Pennsylvania Civil Litigation Law by

Northeastern Pennsylvania Insurance Defense Attorney, Daniel E. Cummins

Year-End Pennsylvania Civil Litigation Reveiw Article

The below article of mine is an updated version of a year-end review article (with its original title) that was published in the November 25, 2014 edition of the Pennsylvania Law Weekly and is republished here with permission from the Publisher, American Law Media:

THE MORE THINGS CHANGE, THE MORE THEY REMAIN THE SAME:

A Review of Important Civil Litigation Cases and Trends in 2014

By

Daniel E. Cummins

 

As another year of Pennsylvania jurisprudence comes to an end, a look back reveals a number of the same issues and trends that have dominated the headlines in recent years.  As some say, the more things change, the more they remain the same.

 Right to a Fair Jury

Among the more notable cases from the past year is the Pennsylvania Superior Court’s decision in the  medical malpractice case of Cordes v. Associates of Internal Medicine, 87 A.3d 829 (Pa. Super. March 12, 2014) (en banc) appeal denied, 192 WAL 2014 (Pa. 2014), in which that court addressed the issue of the trial court's denial of the plaintiff’s strikes for cause during jury selection after the exhaustion of that party’s peremptory challenges.

 

According to the Opinion, the jury that resulted in the Cordes case included a husband of a patient of the defendant doctor, the daughter of a patient of the defendant doctor, and an employee of the parent medical corporation whose subsidiary employed the defendant doctor.  

 

The Opinions issued by the Cordes court all essentially agree with the notion that an important goal of jury selection is ensure not only a jury that is impartial in fact, but one that also appears to be free from the taint of partiality to a disinterested observer.  

 

In the end, it was held that the trial court erred in refusing, after the exhaustion of a party’s peremptory challenges, to strike for cause those jurors who had a close relationship to a Defendant doctor and/or were employed by the same company as that doctor despite those jurors’ assurances of impartiality.   As such, the defense verdict in this medical malpractice case was vacated and the case was remanded for a new trial.  As noted above, the Pennsylvania Supreme Court curiously denied allocatur.

Jury Instructions in Post-Koken Matters

Continuing on the topic of jury issues, Judge Terrence R. Nealon of the Lackawanna County Court of Common Pleas issued the first detailed opinion in Pennsylvania outlining the type of jury instructions he would provide to a jury in a Post-Koken automobile accident matter involving an insurance company defendant.

 

In the case of Moritz v. Horace Mann Ins. Co.,  No. 2013-CV-544 (C.P. Lacka. Co. Nov. 10, 2014), Judge Nealon reviewed cases from within and without Pennsylvania to formulate even-handed jury instructions informing the jury as to the involvement of the insurance company in the matter, explaining the absence of the tortfeasor driver in the context of this matter, and emphasizing that the jury’s focus should be upon an evaluation of the claims presented as opposed to the type of parties involved.

Expert Discovery

In 2014, the Pennsylvania Supreme Court's much-anticipated, but short-handed, decision on the issue of whether an attorney's communications with an expert are discoverable was handed down in the form of a 3-3 decision in the case of Barrick v. Holy Spirit Hospital, 91 A.3d 680 (Pa. April 29, 2014).  This split decision allowed the previous en banc Superior Court decision (8-1), found at 32 A.2d 600 (Pa. Super. 2011), to stand which held that communications between a lawyer and an expert witness are not discoverable.

 

On a related note, in August of this year, the amendments to Pa.R.C.P. 4003.5(a)(4) became effective.  These amendments to this expert discovery Rule incorporated the law of Barrick v. Holy Spirit Hospital by providing that such communications, as well as draft reports by experts,  need not be disclosed "except in circumstances that would warrant the disclosure of privileged communications under Pennsylvania law."

 Delay Damages

In a case of first impression, the Pennsylvania Superior Court ruled in Roth v. Ross and Erie Insurance Group, 85 A.2d 590 (Pa. Super. Feb. 7, 2014), that an award of future medical expenses in a personal injury case should be included in the calculation of delay damages after a verdict.

 

The Superior Court ruled that the wording of Rule 238 was clear and unambiguous in requiring the addition of delay damages to the verdict in all civil cases where a plaintiff seeks monetary relief for bodily injury.  Future medical expenses were, "by definition," part of the monetary relief for bodily injuries caused by the subject accident and, as such, should be included in the delay damages calculation.

 

Federal Court Jurisdiction Over Insurance Coverage Questions

The Pennsylvania and New Jersey Insurance Bad Faith Case Law Blog has described the case of Reifer v. Westport Insurance Corporation, 751 F.3d 129 (3d Cir. April 29, 2014 Van Antwerpen, J.), as being the Third Circuit Court of Appeal’s most important decisions on the exercise of federal jurisdiction in insurance coverage declaratory actions in recent times.

While the Third Circuit in the Reifer decision sympathized with the District Court’s “apparent frustration over the volume of such cases,” the Third Circuit stated that it was not aware of any authority to support a proposition that an insurance company was barred from bringing declaratory judgment actions on the issue of coverage in federal court. 

 

Rather, the Third Circuit Court stated that there is no bright line rule permitting the district courts to automatically abstain from hearing such cases unless there was a total absence of any federal legal question presented.  In this Reifer Opinion, the Third Circuit went on to clarify the factors that a district court should consider in determining whether or not to exercise jurisdiction.  As such, an upward trend of federal court declaratory judgment actions on the issue of insurance coverage can be anticipated. 

Another Short-Handed High Court

Another year ends with the Pennsylvania Supreme Court at less than a full complement of Justices again, which is an obscene situation in more ways than one.

Hopefully, the unfortunate recurrence of this situation of a short-handed court may serve as an impetus for the Court to adopt a plan whereby, whenever the Court has less than seven Justices, a randomly selected Commonwealth Court Judge could be selected to sit on an appeal of a Superior Court decision before the Supreme Court, and vice versa. 

 

Perhaps the time has also come to revisit the notion of a merit selection of Pennsylvania state court judges similar to the method utilized to select federal court judges.

 

In the meantime, Chief Justice Castille and the Supreme Court are going out with a bang with the Chief Justice’s important opinions issued in November in the case of Tincher v. Omega Flex, Inc., in which the court did not adopt the Restatement (Third) of Torts analysis for products liability cases but did alter the required analysis, and in the case of Zauflik v. Pennsbury School District, in which the Court upheld the constitutionality of the statutory caps protecting local governmental agencies in personal injury tort claims.

Cell Phone Use

The year 2014 brought forth a number of decisions on the viability of a punitive damages claim based upon a distracted  defendant driver’s use of a cell phone at the time of an accident.  The decisions show that this issue will be decided on a case-by-case basis.

 

In the case of Pietrulewicz v. Gil, No. 2014 - C - 0826 (C.P. Lehigh Co., June 6, 2014 Reichley, J.), Judge Douglas G. Reichley of the Lehigh County Court of Common Pleas sustained a defendant's preliminary objections and struck a plaintiff's claims for recklessness and punitive damages based upon a plaintiff's allegations that the defendant driver was using a cell phone at the time of the accident.  The court reviewed essentially ruled that allegations of the mere use of a cell phone while driving, without more, does not amount to factual support sufficient to sustain claims of recklessness or for punitive damages. 

 

In contrast, in a recent Luzerne County decision in the case of Gugliotti v. O'Rourke, No. 2012-CV-15133 (C.P. Luzerne Co. 2014 Burke, P.J.), President Judge Thomas F. Burke, Jr., by Order only, denied a defendant's preliminary objections and allowed the plaintiff’s punitive damages claim to proceed in a cell phone/auto accident case.

 

According to the briefs filed in the matter, the police report indicated that the defendant driver allegedly admitted that he rear-ended the plaintiff's car while in the process of attempting to answer not one but two ringing cell phones in his possession.

 

Also, according to a June 13, 2014 article by Zack Needles in The Legal Intelligencer entitled "Judge OKs Punitives Claim for Cellphone Use in  Crash Case," Judge Mark I. Bernstein of the Philadelphia County Court of Common Pleas granted an unopposed motion to amend a Complaint filed by a plaintiff in the case of Simmons v. Lantry to add punitive damages claims in a case involving a tractor trailer driver who was allegedly distracted by his cell phone use at the time of an accident.

Collateral Estoppel Against UIM Claim After Third Party Resolution

 Another hot issue in the past year that troubled litigators was the repeated application of  the doctrine of collateral estoppel by Pennsylvania courts preclude a plaintiff from proceeding on additional claims arising out of the same accident.

 

In his January 15, 2014 Opinion in the case of Borrelli v. AIU North Americam, Inc., No. 0430, Control No. 13110820 (C.P. Phila. Jan. 15, 2014 Bernstein, J.),  Judge Mark I. Bernstein of the Philadelphia County Court of Common Pleas granted a UIM carrier's motion for summary judgment based upon the collateral estoppel doctrine.  In this case, the plaintiff proceeded through an agreed upon high/low arbitration with the tortfeasor defendant first and the arbitrator entered an award that was less than the tortfeasor’s liability limits.

 

Similarly, in USAA v. Hudson, 101 Del. 154 (C.P. Del. Co. Feb. 21, 2014), the Delaware County Court of Common Pleas ruled that the collateral estoppel doctrine precluded a subsequent UIM claim for the same accident when the same issue was previously litigated and an award was entered for less than the tortfeasor’s liability limits.

 

In his decision in the Federal District Court for the Eastern District of Pennsylvania case of Harvey v. Liberty Mut. Ins. Group, 8 F. Supp. 3d 666 (E.D. Pa. March 26, 2014 Joyner, J.), Judge J. Curtis Joyner ruled that an injured party was barred by the doctrine of collateral estoppel from proceeding on a UIM claim after having agreed to a high/low arbitration on the third party side where the agreed upon high parameter was below the third party liability limits and where the arbitration award was entered below that high parameter.

 

In her decision in the Post-Koken case of Gallagher v. Ohio Casualty Ins. Co., No. 13-0168 (E.D. Pa. April 9, 2014), Judge Nitza I. Quinones Alejandro of the Federal District Court for the Eastern District went even further and found that, while a non-binding ADR result did not amount to collateral estoppel, the first settlement nevertheless served to preclude a follow-up UIM claim for the same accident.

 

In a slightly different collateral estoppel context raised in the case of McConnell v. Delprincipe, PICS Case No. 14-1674 (C.P. Lawrence Co. Oct. 2, 2014 Cox, J.), Judge J. Craig Cox of the Lawrence County Court of Common Pleas ruled that the judicial findings reached in a Plaintiff’s previous workers’ compensation case arising out of the same accident precluded the re-litigation of identical issues in a collateral civil lawsuit.   More specifically, the plaintiff was precluded from seeking a recovery for additional injuries in a lawsuit where it was judicially determined in the prior worker’s compensation matter arising out of the same accident that he only sustained cervical spine injuries.

 A Look Ahead

Several important decisions are anticipated in the year ahead.  First, litigators await a decision from the Pennsylvania Supreme Court in the criminal court case of Commonweath v. Koch on the proper authentication and admissibility of text messages may serve as the seminal case on the admissibility of other forms of digital and/or social media evidence.

 

The auto law bar is also anxiously awaiting the Pennsylvania Supreme Court’s decision in the case of  Allstate Prop. and Cas. Co. v. Wolfe, No. 23 MM 2014 (Pa. April 24, 2014) on the issue of whether “[u]nder Pennsylvania law, can an insured tortfeasor assign his or her bad faith claim against an insurer, under 42 Pa.C.S. § 8371, to an injured third party?"

 

These anticipated decisions, as well as expected lower court decisions in Post-Koken auto accident matters and social media discovery issues should keep matters interesting for litigators in the year ahead.

 

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

ARTICLE: Collateral Estoppel Doctrine Precludes Additional UIM Recovery

The below article of mine was recently published in the October 7, 2014 edition of the Pennsylvania Law Weekly and is republished here with permission from the publisher American Law Media.

 

 

 

Civil Litigation

Collateral Estoppel Doctrine Precludes Additional UIM Recovery

Daniel E. Cummins, The Legal Intelligencer October 7, 2014                       

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Spurred by a number of state and federal court decisions over the past year, the issue of whether a previous award secured by an injured plaintiff can serve to preclude the plaintiff from seeking additional coverage from an underinsured motorist carrier on the same claims has become a hot topic in post-Koken auto accident litigation.

The cases show that a previous recovery by a plaintiff can serve as a roadblock on the road to additional recoveries following a motor vehicle accident.

Binding Arbitration Implicates Collateral Estoppel

In auto accident matters, a plaintiff will often proceed to a binding arbitration by agreement to resolve the claims against the defendant driver before proceeding to the related UIM claim. Such a plan of attack could prove troublesome.

In his Jan. 15 opinion in Borrelli v. AIU North America, No. 0430, Control No. 13110820 (C.P. Phila. 2014), Philadelphia Court of Common Pleas Judge Mark I. Bernstein granted a UIM carrier's motion for summary judgment based upon the collateral estoppel doctrine in a case where the plaintiff proceeded through an agreed-upon high/low arbitration with the tortfeasor defendant first.

In Borrelli, the plaintiff, with consent of his own UIM carrier, resolved the third-party claim by way of a binding arbitration. At the arbitration, the arbitrator entered an award that was less than the defendant driver's policy limits. This award below the liability limits, by definition, raised the question of whether the plaintiff had indeed been injured by a tortfeasor who was underinsured so as to enable the plaintiff to pursue UIM benefits from the plaintiff's own automobile insurance carrier.

After the arbitration, the plaintiff then filed a UIM lawsuit in Philadelphia against the UIM carrier. The UIM carrier eventually filed a motion for summary judgment based upon the application of the collateral estoppel doctrine in light of the prior arbitration award. The argument was that the doctrine precluded the plaintiff from relitigating the amount of her damages.

Bernstein granted the carrier's motion after finding that all of the elements of the collateral estoppel doctrine were met. The court more specifically ruled that the issue of the full amount of damages to which the plaintiff was entitled had been previously litigated and determined to be less than the tortfeasor's liability limits.

The court noted that it therefore followed that the arbitration award precluded any UIM recovery as the defendant driver was not underinsured. Stated otherwise, the plaintiff was found to have been fully compensated for the alleged injuries by the award entered on the third-party side of the case.

A similar result was also handed down by the U.S. District Court for the Eastern District of Pennsylvania. In his decision in Harvey v. Liberty Mutual Group, No. 130-CV-04693 (E.D. Pa. 2014), Judge J. Curtis Joyner ruled that an injured party was barred by the doctrine of collateral estoppel from proceeding on a UIM claim after having agreed to a high/low arbitration on the third-party side with a high parameter being a number below the third-party liability limits and where the arbitration award was entered at a number even below that high parameter.

The court ruled in this fashion even though there was an express agreement between the parties in the third-party liability case that the binding arbitration was not intended to preclude any subsequent proceedings.

In Harvey, the liability limits on the third-party side were $2.25 million. The high parameter agreed to between the parties for the binding arbitration of the third-party case was $1.35 million. The arbitrator entered an award in the amount of $680,000.

The third-party proceedings and the award entered implicated the collateral estoppel doctrine, as the damages claims were fully litigated and the award entered was below the agreed-upon high parameter (which was also well below the available liability limits).

Joyner noted that to avoid the effects of the collateral estoppel doctrine, the parties easily could have written into the binding high/low agreement an express provision to the effect that "the binding high figure is not intended to have any preclusive effect."

Multiple Levels of UIM Coverage

The application of the collateral estoppel doctrine to UIM claims has also been held to apply where a plaintiff first recovers a primary level of UIM coverage and then proceeds to attempt to obtain an additional recovery from a second-level UIM carrier.

This scenario arises when a plaintiff is injured in a car accident while a passenger in someone else's vehicle. The UIM coverage on the vehicle represents the primary, or first-level, UIM coverage available to the plaintiff. If that plaintiff also has their own UIM coverage on their own vehicle, that other UIM coverage would apply as a second level of possible benefits for the plaintiff, assuming no exclusions to coverage apply.

In a recent nonprecedential memorandum opinion in the case of United Services Automobile Association v. Hudson, No. 224 EDA 2014 (Pa. Super. 2014), the Pennsylvania Superior Court addressed a matter involving a claim for second-level UIM benefits after an arbitration award was previously entered for UIM benefits under a primary UIM policy.

In this auto accident matter, the plaintiff initially secured the tortfeasor's $15,000 in liability limits by settlement and then proceeded to her UIM claims.

The primary UIM coverage on the vehicle in which the plaintiff was located as a passenger at the time of the accident provided for $100,000 in UIM limits. An arbitration award of $75,000 was eventually entered on that claim.

After a credit for the third-party coverage of $15,000 was applied to that initial UIM arbitration award, the plaintiff received $60,000 of the primary UIM carrier's $100,000 UIM policy limit.
The plaintiff then sought to recover a second level of UIM benefits under her own personal UIM policy. That second-level UIM carrier denied the claim by arguing that the issue of damages had already been fully litigated, with the result being a number that was below the first-level UIM carrier's policy limits, thereby precluding the claim for second-level benefits.

The trial court upheld the insurance company's collateral estoppel argument and the plaintiff appealed. The Superior Court affirmed by ruling that the insured was estopped from relitigating the claim as the issue of damages had already been litigated. Since the UIM award was less than the amount of the UIM limit on the first policy, the court ruled that the plaintiff could not recover under the second-level UIM policy.

Nonbinding ADR

In addition to being found to apply to binding arbitration, Pennsylvania courts have also found that the doctrine of collateral estoppel may apply to looser forms of alternative dispute resolution proceedings.

In her decision earlier this year in the post-Koken case of Gallagher v. Ohio Casualty Insurance, No. 13-0168 (E.D. Pa. 2014), U.S. District Judge Nitza I. Quinones Alejandro of the Eastern District of Pennsylvania found that while a nonbinding ADR award did not technically implicate the collateral estoppel doctrine, the award nevertheless served to preclude a UIM claim.

According to the opinion, the third-party portion of this case settled after a nonbinding ADR proceeding was held and the arbitrator entered a settlement value that was approximately $59,000 less than the third-party liability limit.

The insured plaintiff initially declined to accept the evaluation issued by the arbitrator and proceeded with the litigation of the third-party case. However, after the completion of some further discovery, the third-party case settled for the same amount as the nonbinding arbitrator's evaluation.

Despite settling the third-party claim for substantially less than the tortfeasor's liability limits, the plaintiff nevertheless commenced a UIM claim against the plaintiff's own automobile insurance carrier.

The UIM carrier denied a UIM claim even existed given the nonbinding arbitration value placed upon the case was below the tortfeasor's liability limits.

The carrier argued that the UIM case could not proceed because the third party could not be considered to be underinsured, because the third-party coverage was not exhausted and because the claim was allegedly barred by the collateral estoppel doctrine.

The court in Gallagher noted that the UIM claim would not be barred by the collateral estoppel doctrine because the nonbinding arbitration did not result in a final judgment as required for that doctrine to apply.

However, the court found that the defendant driver was not a UIM motorist as defined by the policy or Pennsylvania law. The only evidence to consider of the other driver being underinsured were the policy limits, the arbitrator's evaluation and the eventual settlement amount. Under that evidence, the court found that the third-party defendant could not be considered to be underinsured and that, therefore, the injured plaintiff could not present a UIM claim.

In light of the above string of cases, both sides of the bar should activate their high beams to keep a cautious eye out for roadblocks in the road to a UIM recovery. 

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

Collateral Estoppel of a UIM Claim Upheld in a Slightly Different Context

In the recent past, several cases have been summarized here in which a variety of courts have held that where a third party arbitration in an auto accident case results in an award that is less than the tortfeasor's liability limits, the plaintiff is collaterally estopped from proceeding onto a UIM claim.  

The rationale is that, as there had already been a determination as to the value of the claim and that value did not exceed the liability limits, then the tortfeasor was not "undersinsured" and no UIM recovery could be had by the Plaintiff.

To view those prior Tort Talk Posts, click HERE.

This collateral estoppel issue has reared its head again, but in the slightly different context of a case involving multiple levels of UIM coverage. In its recent "non-precedential" Memorandum Opinion in the case of USAA v. Hudson, No. 224 EDA 2014 (Pa. Super. Sept. 24, 2014 Lazarus, J., Ott, J., Strassburger, J.) (Memorandum by Ott, J.), the Pennsylvania Superior Court addressed a matter involving a claim for second level Underinsured Motorist (UIM) benefits after an arbitration award was entered for UIM benefits under a primary policy. 

In this matter, the Plaintiff secured the tortfeasor's $15,000 in liability limits by settlement and then proceeded onto her UIM claims.

The primary UIM coverage on the vehicle in which the Plaintiff was located as a passenger at the time of the accident was with Allstate.  An arbitration award of $75,000 was eventually entered on that claim. 

After a credit for the third party coverage of $15,000, the insured received $60,000 of the Allstate $100,000 UIM policy limits.

The Plaintiff then sought second level UIM coverage under her personal UIM policy with USAA.  That second level UIM carrier denied the claim by arguing that the issue of damages had already been fully litigated with the result being a number that was below the first level UIM carrier's policy limits. 

The trial court found in favor of the insurance company and Hudson appealed. The Superior Court affirmed and held that the insured is estopped from re-litigating the claim and that the “issue” of damages had already been litigated. 

Since the award of the UIM was less than the amount of the UIM coverage on the primary policy, the Plaintiff could not recover under the second level USAA UIM policy.

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

nyone wishing to review this Memorandum Opinion by the Superior Court in the USAA v. Hudson matter may click this LINK.