Client Advisory
The Importance of Electronic Discovery (eDiscovery)
An ever-increasing concern in litigation is electronic discovery (also known as “e-discovery.”). Despite the monumental importance (and potentially monumental expense) of e-discovery, our courts have not offered substantial guidance on this issue. While this is likely to change as attorneys, insurers, and businesses begin to learn about the significance of e-discovery, it is essential that everyone involved in the litigation process (attorneys, insurers, and clients) understand the duties and obligations imposed by the discovery rules, especially because these rules apply even before a lawsuit is commenced. Read More
PENNSYLVANIA - RECENT SIGNIFICANT COURT DECISIONS
Pusl v. Means
2009 Pa. Super. 192
Decided September 23, 2009
The Pennsylvania Superior Court held that, where a Plaintiff 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 or molded by the amount of the UIM benefits previously secured by the Plaintiff.
Background: Pusl had recovered $75,000.00 in UIM policy limits under his own automobile insurance policy from State Farm prior to the completion of the trial against the tortfeasor defendant. The opinion indicated that the UIM recovery was by settlement.
At the later trial against the Defendant tortfeasor, the jury entered a verdict in favor of the Plaintiff in the amount of $100,000.00. In post-trial motions, the defense requested a molding down of the verdict to $25,000.00 in light of the $75,000.00 in UIM benefits previously received by the Plaintiff. The trial court granted the Defendant's request and Plaintiff appealed.
Holding: On appeal, the Superior Court weighed two conflicting public policies in reaching its decision -- one against permitting double recoveries by plaintiffs versus the policy in favor of holding a tortfeasor liable for the all of damages he caused. In so doing, the Court ruled that the trial court properly molded (or reduced) the amount of the verdict by the amount of UIM monies received by the Plaintiff prior to the trial.
The Court in Pusl noted that the first public policy, against double recoveries, was essentially codified in 75 Pa.C.S.A. Section 1722, "Preclusion of recovering required benefits." This statute provides that "[i]n any action for damages against a tortfeasor...arising out of the maintenance or use of a motor vehicle, a person who is eligible to receive benefits under the coverages set forth in this subchapter....shall be precluded from recovering the amount of benefits paid or payable under this subchapter...."
The Court went on to note that Section 1722 "was obviously designed" to refer to first party benefits under the Motor Vehicle Financial Responsibility Law (MVFRL). The Plaintiff's UIM benefits were found to "fall within Section 1722's first-party benefits because the UIM benefit was paid to her from her personal insurance policy with State Farm." Therefore, according to the Court, the Plaintiff's receipt of both the full jury award from the Defendants and the pre-trial UIM settlement with State Farm would constitute a "double recovery" that the MVFRL was specifically designed to prevent. As such, the trial court's molding of the verdict was found to comport with Section 1722 and the public policy of preventing double recoveries by plaintiffs for the same injuries.
The Court disagreed with the Plaintiff's argument that the reduction of the verdict amount violated the second noted public policy requiring that a tortfeasor defendant to pay for all of the damages he or she caused. Also rejected was the Plaintiff's argument that the Defendant was not entitled to a "set-off" of the UIM benefits previously received under the collateral source rule because the UIM benefits were collateral source benefits.
Judge Popovich wrote that by molding the verdict down by the $75,000.00 previously received in UIM benefits, "it appears, at first glance, that the public policy underlying the collateral source rule was ignored in favor of Section 1722 by lessening the amount of damages that the jury attributed" to the defendants. However, the Court went on to reason that the tortfeasor's liability was not lessened or reduced at all because, State Farm, the carrier that paid the UIM benefits, still had the right to pursue a subrogation claim against the defendants to recover the $75,000.00 in UIM benefits back from the defendants.
It is noted that amicus curiae briefs were submitted by the Pennsylvania Association for Justice on the Plaintiff's side as well as by the Pennsylvania Defense Institute on the Defendant’s side. An appeal to the Supreme Court of Pennsylvania is likely.
Practice Tips:
Although the Pusl opinion specifically holds that defense counsel is not required to do so, it is wise in automobile accident matters to include a standard paragraph in the New Matter portion of an Answer that asserts a right to a credit or set-off in the amount of any previous UIM benefits secured by a plaintiff against any jury verdict that may be entered against the defendant.
Also, the Pusl opinion teaches that the inclusion of a motion to mold the verdict in post-trial motions is a proper vehicle to bring this issue before the court. It would also be wise to raise this matter with the court pre-trial, possibly in a trial brief or other filing.
Plaintiffs have filed a Petition for Allowance of Appeal to the Supreme Court.
Any questions regarding this case may be directed to Brooks Foland at 717-255-7626 or bfoland@tthlaw.com.
Barnish v. KWI Building Company
2009 Pa. LEXIS 2106
Decided October 2, 2009
The Pennsylvania Supreme Court holds that in a products liability case where the Plaintiff was proceeding on a malfunction theory, that prior successful use of a product undermines, but is not necessarily fatal to, a plaintiff’s ability to withstand a defense motion for summary judgment.
Background: Allegheny Particle Board purchased a spark detection system from GreCon Electronics to detect sparks on a conveyor belt system carrying combustible raw materials. A spark entered the system but was not detected by the sensors, resulting in a fire that injured and killed employees of Allegheny. The employees brought an action in strict liability against GreCon and, because the allegedly defective sensors were destroyed in the fire, proceeded under a malfunction theory. Defendants moved for summary judgment, arguing that the Plaintiffs could not prove that the sensors had left the manufacturer in a defective condition because they were successfully used at GreCon for approximately 10 years. The trial court granted summary judgment which was affirmed by the Superior Court. The Pennsylvania Supreme Court granted review in order to determine the significance of a product’s prior successful use on a plaintiff’s ability to withstand summary judgment in a malfunction theory case.
Holding: The Pennsylvania Supreme Court affirmed the decisions of the courts below holding that Plaintiffs did not present any evidence that raised an issue of material fact contradicting defense’s evidence that the sensors had been used for 10 years and were therefore not likely in a defective condition when they left the manufacturer. The Court recognized, however, that a product can perform successfully for years and still be defective. The Court stated that to survive summary judgment, a plaintiff who admits that the product functioned properly in the past, must present some evidence explaining how the product could be defective when it left the manufacturer’s control and yet still function properly for a period of time. The Court noted the example of a product that has a life span of 20 years but fails after three years of successful use because of shoddy parts. In that case, a plaintiff may still be able to prove that the product was defective when it left the manufacturer’s control, despite several subsequent years of successful use.
Any questions regarding this case can be directed to Gordon Einhorn at 717‑441‑7054 or geinhorn@tthlaw.com.
Stimmler v. Chestnut Hill Hospital
2009 Pa. LEXIS 2037
Decided September 30, 2009
The Supreme Court reversed the Trial Court and Superior Court rulings that granted summary judgment, finding it was improper to rely on “deemed admissions”.
Background: In 1965, Plaintiff underwent a cut-down procedure, due to circulatory failure, with the insertion of a catheter. In 1999, an echocardiogram revealed an embolized catheter fragment. Defendant served Requests for Admissions seeking Plaintiff to admit that she had undergone16 subsequent procedures involving catheters or if denied, explain how medications were administered and the procedures were performed. Plaintiff filed a late response which failed to fully answer the requests. Because the response was untimely, the Trial Court “deemed admitted” the requests and then determined Plaintiff’s expert reports were speculative and lacked certainty.
Holding: The Supreme Court frowned upon the use of “deemed admissions” to support summary judgment, noting disputes should be resolved on the merits not by affidavit or deposition. The opinion suggests that improper or untimely responses should be challenged by preliminary objection rather than be deemed admitted. The purpose of admissions and Rule 4014 is to clarify issues, expedite the litigation process and authenticate evidence that is uncontroverted.
Even if the deemed admissions were not rejected, the Court examined Plaintiff’s expert reports for the requisite degree of specificity and medical certainty. The trial court determined that Plaintiff could not show that the catheter came from the 1965 cutdown. The Supreme Court concluded that there were genuine issues of fact raised by the expert reports, all other sources of the fragment did not need to be eliminated, and the size and condition of the fragment supported the experts’ opinion that it “most likely” originated from that procedure.
NEW JERSEY - RECENT SIGNFICANT COURT DECISIONS
New Jersey Manufactures Ins. Co. v Bergen Ambulatory Surgery Center
A-0307-07
New Jersey Manufacturers Inc. Co. (NJM) requested from Bergen Ambulatory Surgery Center (Bergen Ambulatory) a complete schedule of charges submitted to and payments received from public and private sources. The request was made for the purpose of determining usual, customary, and reasonable rates.
A three-judge panel of the Appellate Division upheld the Superior Court’s decision and determined that NJM was not entitled to that information prior to arbitration. An advantage to arbitration is that discovery is abbreviated and parties can avoid the expense involved in litigation. If NJM believes that Bergen Ambulatory is overbilling, NJM must pursue its theory on a case-by-case basis.
Zabilowicz v. Kelsey
A-87-08
The Supreme Court of New Jersey heard argument on October 14, 2009, in Zabilowicz v Kelsey. The question before the Court is which state law controls when two Pennsylvania drivers have a collision in New Jersey, and the driver who sues is subject to Pennsylvania’s limited tort option for car insurance. Zabilowicz selected the limited tort option in Pennsylvania; however, his carrier also writes policies in New Jersey. New Jersey’s Deemer statute, N.J.S.A. 17:28-1, provides that an out-of-state plaintiff who is insured by a company authorized to do business in New Jersey is subject to the New Jersey verbal threshold.
During oral argument before the Supreme Court, Zabilowicz’s attorney argued that the Defendant should be unable to assert the verbal threshold, because the Defendant’s carrier is not authorized to do business in New Jersey; the verbal threshold does not exist for a carrier who does not conduct business in New Jersey. Both the Superior Court and Appellate Court disagreed with Zabilowicz and have held that Zabilowicz should be bound by the Deemer statute because Pennsylvania’s limited tort option is the equivalent of verbal threshold in New Jersey. The Supreme Court has not yet ruled, but stay-tuned.
New Jersey Courts Heading to Paperless System
N.J.’s Special Supreme Court Committee on Electronic Filing announced in a report that it would like to see implementation of a mandatory, system-wide, electronic filing system for all New Jersey state courts. The system would be paid for with increased filing fees. The Court Committee envisions a system modeled after the system used by Federal Courts. A timeline was not provided, but the Committee indicated that the speed of implementation will depend in part on competition among vendors.
New Jersey’s Special Civil Part already uses JEFIS, the Judiciary’s Electronic Filing and Imaging System. JEFIS is not mandatory, but will become mandatory for high-volume filers in by May 2010.