Source: http://www.torttalk.com/2011/01/2010-year-end-review-article-on.html
Timestamp: 2019-04-18 20:46:14+00:00

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The dominating topic in Pennsylvania automobile litigation continues to be the evolution of the new common law associated with the Post-Koken cases in which negligence claims against third-party tortfeasors are joined with the contractual claims against UM/UIM carriers under one caption.
Trial courts across the state are nearly split down the middle in terms of whether these claims should be allowed to proceed through trial in a consolidated fashion or whether they should be severed into separate matters.
Currently, 31 trial court decisions across 11 different counties have ruled in favor of consolidation, while 20 trial court decisions from 12 different counties have ruled in favor of severance of claims.
Courts in Philadelphia, Allegheny and Lackawanna counties arguably have developed a split authority on the issue.
To date, there have been no appellate decisions on the issue.
However, the Superior Court will have a chance to address this issue next year in Thomas v. Titan Auto Insurance, a case out of Philadelphia that is at the briefing stage.
One of the main divisive issues the courts face is how to handle the issue of evidence of "insurance" at trial.
While Rule 411 generally mandates that evidence of insurance is not admissible, there is an exception in the rule to allow the admission of evidence where it may be relevant to the claims presented.
Plaintiffs have argued that the amount of the tortfeasor's liability insurance in these cases is relevant to the determination of whether the tortfeasor is "underinsured" such that the plaintiff is entitled to UIM benefits.
The defense has typically argued that insurance is not admissible and that the jury should review only the merits of the case. Any insurance issues could be handled by the court in post-verdict molding proceedings after the jury has been sent home.
This procedure was recommended by various trial courts this year, including the Northampton County Common Pleas Court in a June decision in Firoozifard v. Krome.
Another early, recurring issue in these types of cases is proper venue.
Late in 2009, the Superior Court in O'Hara v. The First Liberty Insurance Corp . upheld a UIM carrier's forum selection clause that required a lawsuit be filed in the county in which the insured resided at the time of the accident.
However, there have been a variety of common pleas court decisions across the state on how to handle the issue of proper venue of a post- Koken case where the UIM carrier's policy does not contain a forum selection clause.
In 2011, the Superior Court will get a chance to weigh in on the issue.
Appeals from a trio of separate cases, including the Philadelphia cases Sehl v. Neff and the aforementioned Thomas, as well as the Luzerne County case Wissinger v. Brady, are before the court.
A couple of 2009's biggest auto law decisions carried over to 2010.
In late 2009, for instance, the Superior Court handed down a monumental UIM decision in Pusl v. Means, which held that where a plaintiff first obtains a UIM recovery prior to the conclusion of her suit against the third-party defendant tortfeasor, the third-party defendant is entitled to have any verdict entered against him reduced by a credit or set-off in the amount of the UIM benefits already secured by the plaintiff.
Surprisingly, the state Supreme Court denied allocatur on the issue in March, leaving the Superior Court's decision the law of the land and drastically changing how auto law matters are litigated.
As a result of the Pusl decision, many plaintiffs' litigators are reverting to the practice of resolving third-party claims before moving to UIM claims.
Another 2009 case that was reaffirmed in 2010 is Sackett III .
In Sackett v. Nationwide Mutual Insurance Company, the Superior Court held a trial court correctly decided on remand that a vehicle was not added under a newly/after acquired vehicle clause in an insurance policy and the insurer should have therefore had the insured sign a new rejection-of-stacking form in order for non-stacking to apply.
While traveling up and down the appellate ladder, it was asserted by the insured's attorneys that he should be deemed to have stacked limits because he never formally rejected stacking.
In Sackett III, the Superior Court agreed that the insured should be considered to have stacked UIM coverage.
In an April decision from the Superior Court, D'Adamo v. Erie Insurance Exchange, it was decided that a tortfeasor's automobile insurance liability coverage as well as his separate personal umbrella or excess policy should be considered in determining the total credit due to a UIM carrier.
In D'Adamo, a consolidated case involving two injured couples traveling in the same vehicle, a UIM arbitration panel determined each couple was entitled to a gross award of $850,000.
However, the panel also determined the carrier was entitled to a credit in the amount of the policy limits of the tortfeasor's automobile insurance policy and his umbrella or excess policy.
Each couple had already received the $250,000 limit under the tortfeasor's automobile policy and $500,000 limit from the tortfeasor's personal umbrella policy.
Relying upon an exhaustion clause in Erie's policy, the court rejected the couples' argument that the offset or credit due to the UIM carrier should not include the tortfeasor's coverage from non-automobile insurance policies, such as the umbrella policy owned by the tortfeasor. Therefore, each couple was left with a net award of $100,000.
In July, the Supreme Court ruled in Vanderhoff v. Harleysville Insurance Co. that an insurance company was required to prove prejudice relative to a late reporting to a carrier in order to support a denial of uninsured motorists benefits to its insured.
In Vanderhoff, the subject accident was allegedly reported to law enforcement officials within 30 days of the accident, as required. However, the insurance company did not receive notice until about eight months after the accident.
The Supreme Court handed down another long-awaited decision in April.
In Tannenbaum v. Nationwide, a doctor severely injured in an accident was able to secure Social Security disability benefits, along with disability benefits from a group plan offered by his former employer-hospital, and additional benefits under two personal disability policies.
He then sued the tortfeasor, settled and turned to his insurer, Nationwide, for UIM benefits. A dispute arose between the parties as to whether Nationwide was entitled to an offset on the disability benefits.
In an opinion authored by Justice Thomas G. Saylor, the court held that §1722 of the Motor Vehicle Financial Responsibility Law precluded the plaintiff from pleading, proving and recovering as damages in an underinsured motorist claim any items of income loss otherwise paid by the disability insurer.
A case of first impression, the court confirmed that the MVFRL was designed to eliminate the collateral source rule in auto cases, thus preventing the plaintiff from receiving a double recovery with respect to income loss.
As such, the court overruled a Superior Court ruling and held that Nationwide was indeed entitled to an offset in the amount of the disability benefits previously received by the injured party.
In a May decision, the Superior Court shot down a plaintiff's tactic of securing a UIM arbitration award in a clear liability rear-end accident case and then attempting to argue that the tortfeasor was thereafter collaterally estopped from arguing the issue of damages on the lawsuit side of the case.
In Catroppa v. Carlton, State Farm provided $50,000 in liability coverage to the tortfeasor defendant and was also coincidentally the UIM carrier for the injured party. There were $50,000 in UIM benefits available.
The UIM arbitration hearing was held and the award entered was $100,000. After the $50,000 third-party credit was applied, the net award to the claimant was $50,000.
Thereafter, on the lawsuit side of the case, the plaintiff filed a motion for summary judgment, arguing that since both parties were State Farm insureds and since the tortfeasor was in privity with State Farm through that carrier's liability policy issued to her, the tortfeasor should be considered to have participated in the UIM hearing.
The plaintiff argued that the tortfeasor should be bound in the third-party action by the previous UIM award, because State Farm had assigned counsel to represent its interests in that matter and the State Farm arbitrator did not dissent from the UIM panel's decision.
The Superior Court rejected the argument and noted that the crucial element of collateral estoppel — that the parties be the same in both actions — was not met, as the tortfeasor obviously did not participate in the UIM proceedings.
The Superior Court also stated that, although the tortfeasor was in privity with State Farm by virtue of her liability policy with the insurance company, she was not in privity with the carrier in terms of the entirely separate UIM policy it had with the injured party.
Accordingly, the court held that the tortfeasor could not be bound by a determination from a proceeding to which she was not a party and to which she could not intervene or participate in to protect and defend her own interests.
As such, the so-called tactic of "offensive" collateral estoppel was rejected.
A line of cases came down in 2010, holding that where a single vehicle accident is caused by debris in the roadway from an unknown or unidentified source, an uninsured motorist carrier does not need to provide UM benefits when its policy requires an injured party to show the accident was caused by the maintenance or use of another vehicle.
In the somewhat novel Pike County Common Pleas Court case Adragna v. State Farm, summary judgment was secured in favor of the carrier in a declaratory judgment action. It is noted that the author of this article and his partner, Timothy E. Foley, handled this matter for State Farm.
In Adragna, the claimant was pursuing an uninsured motorist claim under a State Farm policy based upon a single car motor vehicle accident allegedly caused when the claimant swerved and lost control of her vehicle while trying to avoid debris on the roadway. No proof was produced as to how the debris came to be on the road.
The State Farm policy allowed coverage for injuries caused to an insured "by an accident that involves the ownership, maintenance, or use of an uninsured motor vehicle as a motor vehicle."
The judge in the case, however, ruled that even if the injured party's presumption in Adragna that the debris in the form of insulation bundles must have come from a vehicle was accepted as true, it did not matter. The injuries would still be deemed to have been caused by the debris — not another vehicle, as required by the policy.
In another case on the same issue, the Montgomery County Common Pleas Court also entered summary judgment in favor of a carrier where a claimant was injured after striking a dead deer on the Pennsylvania Turnpike.
In Erie Insurance Co. v. Chong, summary judgment was entered in favor of the carrier after the plaintiff failed to produce any competent evidence showing how the carcass ended up on the road.
A similar result was reached in yet another debris case out of Bucks County, Erie Insurance v. Sciss.
In that case, which was decided in May, the judge ruled that a motorcyclist injured as a result of debris was not entitled to UM benefits.
In one of the most recent notable cases of 2010, the Pennsylvania Superior Court handed down a decision on Dec. 10, holding that a plaintiff may secure delay damages in a post- Koken case against a UM carrier even though the amount of such damages goes above the UM limits available under the policy.
In the case of Marlette v. State Farm, the plaintiffs obtained a jury verdict against the UM carrier for $550,000 along with loss of consortium damages for the plaintiff's spouse. The available UM policy limits were only $250,000.
The trial court then molded the verdict to reflect the policy limits of and other credits due, resulting in a verdict of $233,306.98 for the husband. The court then calculated delay damages by applying the appropriate interest rates to the molded verdict. The plaintiffs and State Farm both appealed.
The Superior Court rejected State Farm's contention that its exposure was set by its policy limits. In so ruling, the court pointed to analogous decisions, which did not involve the policy limits issue, supporting the awarding of delay damages beyond agreed upon caps on a defendant's exposure. The Marlette court also noted that State Farm's current policy language arguably allowed for delay damages beyond the policy limits in the UM context.
Looking at the language of Rule 238 and noting the policy considerations behind the rule, including the encouragement of settlements, the Superior Court also agreed with the plaintiff's contention that the calculation of the delay damages award should have been based on the jury's original verdict and not the lower, molded verdict.
As such, the Superior Court remanded the case back to the trial court for a proper calculation of the delay damages based on the jury's original verdict.
There are a number of cases under advisement, or scheduled to be heard, by the Supreme Court that auto law litigators should keep an eye on.
In April, for instance, the court heard arguments regarding two important issues in separate UIM cases.
In Heller v. Pennsylvania League of Cities and Municipalities, the justices are reviewing whether a person receiving workers' compensation benefits may be subject to an insurance exclusion and thereby be precluded from also recovering UIM benefits.
The second matter pending before the court, Williams v. GEICO, involved a state police trooper who was injured in an on-the-job accident and filed a UIM claim with his personal insurance carrier, GEICO, because his employer did not carry UM/UIM coverage on its vehicles. GEICO applied the "regular use" exclusion under its policy to deny coverage. The trooper is challenging that exclusion and GEICO's denial.
The court's decision in Williams could have a major impact on first responders, who may be without UIM coverage under the current law.
Litigators are also anxious to see how the high court will rule in GEICO v. Ayers, a case the court accepted in July to address whether an insurance company can deny inter-policy stacking to an insured who has all his or her vehicles insured through the company and has not waived stacking.
By way of background, GEICO insured two motorcycles and two pickup trucks on separate policies.
The plaintiff, who had elected stacking and was involved in an accident while on one of the motorcycles, was denied UIM benefits under the policy insuring the pickup trucks. GEICO cited the household exclusion.
The household exclusion basically states that the insurance company that issued the policy does not have to provide coverage for accidents involving another vehicle in the insured's household that is covered by another, different insurance company.
The plaintiff has argued that the exclusion was invalid since, although GEICO insured all the vehicles, the carrier made him put the motorcycles on a separate policy. The trial court agreed with that argument and invalidated the exclusion. The Superior Court reversed in a memorandum decision. Now, the Supreme Court has the case.
The household exclusion has, to date, withstood many attacks. The distinctive fact in this case is that the same carrier issued all of the policies in the household. It remains to be seen how the high court will address the matter this time around.
Daniel E. Cummins is a partner and civil litigator with the Scranton law firm of Foley Cognetti Comerford Cimini & Cummins. A summary of a number of Post-Koken decisions on the above issues can be found on his blog, www.torttalk.com . To access them, click the 'Post-Koken Scorecard' on the right-hand column.

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