2003 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit
5-20-2003 

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utl P r e c e de n t i al or N on-P r e c e de n t i al : N on-P r e c e de n t i al D ocke t 02-2145

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Thi s de c i sion i s br ou gh t t o you for f r e e a nd ope n a c c e s s b y the O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit at V i l l a no va U nive r sit y S choo l of L a

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w . v i l l a no va . e du/thir dc ir c uit_2003/548NOT PRE CEDENT IAL UNITED STATES COURT OF APPEALS FO R T HE TH IRD CIR CU IT

No: 02-2145
W ILL OW IN N, I NC ., A Pennsylva nia Corporat ion

v. PUBLI C SERV ICE MUTUAL I NSURANCE COMPANY,

A New York Corporati on Appellant
On A ppeal from the Un ited States District Co urt for the Easte rn D istrict of P enns ylvania Distri ct Court J udge: The Honorable Berle M. Schil ler

(D.C. Civi l No. 00-cv- 05481)
Argued on April 10, 2003 Be for e: A LIT O, F UE NT ES , Circuit Judges , and PISANO* Distri ct Judge (Opinion Fi led: May 20, 2003)

__________________ *Honorable JoelA. Pisano, United States District J udge for the Distri ct of New Jersey , si tti ng by des ignati on.2 Edward M. Koch [A rgued] Lou is J. Bro wn Whit e andWill ia ms LLP One LibertyPlace Suite 1800 Philadelphia, PA 19103 Counsel for

Appellant Howard G. Silverman [Argued] Kane & Sil verman, P. C. 2401 Pennsyl vania Avenue Suite 1C-44, The Philadelphian Philadelphia, PA 19130 Counsel for

Appellee

OPINI ON OF THE COURT

PER CU RIA M : Willow Inn, Inc. ( “Willow Inn”) , a res taurant , bar, and resi dence in Will ow Grove, Pen nsylvan ia and an ins ured of P ublic S ervice M utual In suran ce C om pany (“P SM ”) at all releva nt time s, com men ced th is brea ch of contra ct and bad f aith ac tion, 42 Pa. C ons. S tat. § 8371 (2001), to chal lenge PSM’s adjust ment of it s propert

y damage cl aim ari sing fr om a winds torm on June 1, 1998. After a two day

bench t ria l, the Di strict

Courtfound PSM liable to W illow In n fo r breac h of contra ct and bad f aith, and aw arded $2,00 0 in compensatory

damages and $150,000 i n puniti ve damages. The Dist rict Court granted1 Alth oug h W illow In n attem pted to untim ely file a cro ss-app eal, it ultima tely

withdrew it

after the Dist rict Court denie d a motion t o extend time to fi le a notice of appe al und er Ru le 4(a)(5 )(A)(i) o f the F edera l Rule s of A ppella te Pro cedu re and after th is Co urt re que sted brie fs o n th e issu e of time lines s. 3 Willow Inn’s post-t

rialmotion for attorney’ s fees and cos ts, but denie d all ot her post -trial
mo tions. P SM then f iled this a ppea l. 1 On appeal, PSM raises four is sues: ( 1) Did the Dis tri ct Court e rr i n finding t hat PSM breached the contr act of i nsurance between Willow Inn and PSM?; (2) Did the Distric t Cou rt err in fin ding that PS M acted in bad faith u nder the P enns ylvania B ad F aith Statute?; (3) Is the Distri ct Court’ s punitive damages award i n the amount of $150, 000 consti tuti onally

excessi ve?; and (4) Did the Dist rict Court abuse i ts di scretion in awardi ng attorney’ s fees and cos ts? This Court granted or al argument , but, after notice to the par ties, lim ited t he a rgu me nt to the p uni tive d am age s issu e. Onl y day s be for e or al ar gume ntwas h el d i n t hi s ma tter , t he Un ited S ta te s Su pr eme Court fil ed an opini on in State Farm Mutual Automobile Insurance Company v. Ca mp bell , ___ U .S. ___ __, 20 03 W L 17 912 06, *1 (Ap ril 7, 200 3), in w hich th e Co urt, reinforcing the parti cular gui deposts i t enunci ated i n BMW of North America, Inc. v. Gore , 517 U .S. 559 (199 6), articulated the principles that co urts shall strictlyapply before imposing upon a def

endant i n a civi l case a

puniti ve damages award. I n short, the three guidepost s are: (1) “the degree of r eprehensi bili ty of the defendant ’s misconduc t; ( 2) the disparity between the ac tual or

potenti al harm suff

ered bythe plainti ff and the puni tive4

dama ges aw ard; and (3) the difference betwe en the pu nitive dama ges aw arded by the jury and the ci vil pena lti es authorized or i mposed in comparabl e cases. ” Ca mp bell , ____U.S. at ____, 2003 WL 1791206, at *7 (ci tati on omitt ed). The Dist rict Court’s wri tten memorandum opinion, however , does not explic itl y appl y the Gore / Ca mp bell guideposts, and simply

concludes t

hat a $150, 000 puniti ve damages award is appropri ate “[b] ased on the evi dence prese nted at tri al and i n light

of the afor ementioned fa ctors [,“the character of a defendant’ s conduct, the nature and ext ent of the harm int ended or cause d to the plaint iff, and the wealt

h of the defendant]. Whil e our revi ew is de novo in determining whether suffi cient

evidence i n the rec ord exis ts t o support a puniti ve damages award, Alexander v. Riga , 208 F.3d 419, 430 (3d Cir. 2000) (ci tati on omitt ed), we rec ognize
neve rtheless that the Distric t Cou rt is in the b est po sition to f irst determ ine w hethe r to allow a puni tive damages award, and, if so, the quantum of those damages. To be sure, the Dist rict Judge presi ded over a t wo day bench trial , observed the demeanor of witnesse s, l ist ened to witness te sti mony, a nd gained an over all s ense of the case. Because the Dis tri ct Court di d not have the benefit of the Ca mp bell decisi on when it imp ose d up on P SM a pu nitiv e da ma ges aw ard , see, e. g. , Casey v. Planned Pare nthood of So uthea stern P enns ylvan ia , 14 F .3d 84 8, 856 -57 (3 d C ir. 1994 ) (discu ssing g enera lly the mandate r

ule and the Supreme Court’s mandate to l ower courts ), we vacat e the Distri ct Court’ s Memorandum and Order filed J anuary4, 2002 and remand t o the Dist rict Court f ora de te rmi natio n on th e pu ni ti ve d amag es is sue in acc or dan ce wi th th e Su pr eme5

Court’s di ctat es in Gore / Ca mp bell . On all remaini ng issues , we affirm without furt her discuss ion. Accordingly , for t

he reasons stat ed above, we affi rm in part and revers e in part

the judg men t of the Distric t Cou rt.