A Change of Habit

A Change of Habit

A post-Koken body of law is developing as new UM/UIM claims go to court

By Daniel E. Cummins

Special to the Law Weekly

Since the state Supreme Court handed down its decision holding that automobile insurance carriers were not required to include arbitration clauses in their policies for the resolution of uninsured and under insured motorists claims in Insurance Federation of Pennsylvania v. Commonwealth, Department of Insurance (Koken), 889 A.2d 550 (Pa. 2005), nearly four years ago, most auto carriers have dropped the clauses like a bad habit.

Carriers that have altered the language of their arbitration clauses to require the consent of both parties to submit the case to arbitration include AMICA, GEICO, Allstate, Harleysville and Progressive. Carriers that appear to have totally eliminated the arbitration clause altogether include Nationwide, Erie, Liberty Mutual, Donegal, Keystone and USAA, requiring claims against those carriers to be resolved by way of a lawsuit. State Farm has changed its arbitration clause to specifically mandate that all under insured and uninsured motorist claims be resolved by way of a lawsuit filed in the court of common pleas.

As these cases begin to flood the trial courts, it seems that both the plaintiffs bar and the defense bar are gently coasting along and not trying to unnecessarily rock their rudderless boats as each side attempts to navigate the uncharted waters without capsizing. This cautious cooperation appears to exist, in part, because of the great uncertainty as to how the courts will handle the novel issues that arise with these seminal lawsuits now proceeding through the system.

At least one issue has been clarified. Based on numerous decisions by various courts of common pleas in different counties, it can be safely stated that the trial courts will favor, and allow to stand, the consolidation of UIM claims with bad faith claims and the third-party claims against the tortfeasor defendants under one caption.

In my earlier columns "Here Comes Hurricane Koken," 31 PLW 1165 (Oct. 27, 2008), and the 2008 year-end review of auto cases in "Negligence is in the Air … and on the Road," 31 PLW 1380 (Dec. 22, 2008), the applicability of Pa.R.C.P. 2229(b) ("Permissive joinder") was anticipated in terms of the joinder of these separate claims under one caption, and several cases were reviewed wherein the courts simply followed Pa.R.C.P. 213 ("Consolidation …") as an additional rationale allowing for the consolidation of cases arising out of the same "occurrence," i.e., a single motor vehicle accident. These columns emphasized that it appeared that the overriding principle of judicial economy, i.e., how the already overburdened trial courts would need to handle the impending glut of these new types of claims, would be the driving force supporting the decisions in the post-Koken cases.

A number of those prior cases have come out of the Lackawanna County and Allegheny County Courts Court of Common Pleas. In Lackawanna County, Judge Carmen Minora allowed for the consolidation of a Koken-type case under Rule 213 in Decker v. Nationwide Insurance Co., 83 Pa.D.&C.4th 375 (2007). Senior Judge Harold A. Thomson, Jr., then sitting in Lackawanna County, offered a similar opinion in the case of Moyer v. Harrigan, No. 1684-CV-2008 (2008). Judge Robert Mazzoni also allowed for a UIM claim to proceed in a consolidated fashion with a bad faith claim in Augustine v. Erie Insurance Exchange, 2006-CV-416 (2008).

Similarly, in Allegheny County, consolidation of various first-party and third-party claims has been approved by Judge Eugene B. Strassburger in Collins v. Zieler, No. G.D. 08-014817 (2008) and Judge R. Stanton Wettick in the case of Gunn v. Automobile Insurance Co. of Hartford, PICS No. 08-1266 (2008).

Consolidation Rule Reaffirmed

More recently, on April 1, Judge Gregory H. Chelak of the Pike County Court of Common Pleas, issued a three-page order that reads like an opinion in the case of Jannone v. McCooey, 2320-2008-Civil, in which he joined the growing fleet of decisions allowing for the consolidation of the multiple claims available in a post-Koken automobile accident case.

In Jannone, the plaintiff was involved in a motor vehicle accident in a school parking lot Feb. 15, 2008. At the time, the plaintiff was covered by a post-Koken automobile insurance policy issued by State Farm. As noted above, that carrier had done away with the UIM arbitration clause and instead required the filing of a lawsuit for the pursuit of a UIM claim.

As such, the plaintiff filed suit against the third-party tortfeasor and State Farm as the UIM carrier under as single caption in the Pike County Court of Common Pleas. The third-party tortfeasor, not wanting to be lumped in the same case with an insurance company in front of a jury, filed preliminary objections.

Chelak quickly dismissed the defendant tortfeasor's first assertion that the claims asserted against her should be dismissed in that they were "misjoined" with those claims asserted against the UIM carrier. Chelak noted that Pa.R.C.P. 2229(b) allowed the plaintiff to "join as defendants persons against whom the plaintiff asserts any right to relief jointly, severally, separately or in the alternative, in respect of or arising out of the same … occurrence … if any common questions of law or fact affecting the liabilities of all such persons will arise in the action."

Noting that there did "not appear to be any controlling appellate case law specifically addressing whether claims against a tortfeasor and UIM insurer may be joined in the same cause of action pursuant to Rule 2229(b)," Chelak stated that the joinder of the claims would be allowed to stand under that rule as the court was satisfied that the causes of actions against the defendant tortfeasor and State Farm arose out of the same occurrence of a single motor vehicle accident and involved similar factual questions. In denying this preliminary objection of the complaining defendant tortfeasor, the Jannone court also alluded to the overriding principle of judicial economy and noted that "the joinder of these claims will save significant judicial resources and avoid unnecessary delay and expense to the parties."

Chelak also rejected the alternative argument of the defendant tortfeasor that the claims against her should be dismissed because trying them along with the plaintiff's claims against State Farm would be unduly prejudicial as it would require the introduction into evidence of her own insurance policy.

In support of her argument, the defendant tortfeasor cited to Pennsylvania Rule of Evidence 411 which provides that "[e]vidence that a person was or was not insured against liability is not admissible upon the issue whether the person acted negligently or otherwise wrongfully. This rule does not require the exclusion of evidence of insurance against liability when offered for another purpose, such as proof of agency, ownership, or control, or bias or prejudice of a witness."

Chelak turned the tables on the defendant tortfeasor by also citing to Pa.R.E. 411 as support for his denial of this preliminary objection. The judge noted that, pursuant to the terms of evidentiary Rule 411, evidence of the defendant tortfeasor's insurance policy was admissible so long as it was relevant to some issue other than whether the defendant tortfeasor acted negligently.

Chelak found that, under the scenario presented in this Koken case, the defendant tortfeasor's insurance policy would be relevant to State Farm's liability, since State Farm's UIM liability was dependent upon the amount of the defendant tortfeasor's liability coverage. Under Pennsylvania law, the UIM carrier is entitled to a credit in the amount of the tortfeasor's liability policy before the UIM carrier has to pay out under its own policy.

According to Chelak, it therefore followed that the defendant tortfeasor's policy was "not inadmissible pursuant to Pa.R.E. 411" and, as such, the defendant tortfeasor's preliminary objection on the basis that it was unduly prejudicial to allow for this joinder of the claims was denied.

One lesson from these cases reviewed is that the courts are also sailing along with counsel in these unchartered waters. The post-Koken decisions handed down to date by the trial courts confirm that, when faced with an issue as to which way to proceed into the unknown, the courts are going to fall back on what they know and will simply rely upon the map created by the doctrine of stare decisis, while at the same time, keeping in mind their own self-preservation through the application of principles of judicial economy.

Surely, there have been other similar orders and opinions addressing important post-Koken issues handed down by other courts of common pleas across Pennsylvania that have gone unpublished or have not been otherwise publicized for the benefit of the bar. Hopefully, the courts and the litigating attorneys in such cases will take steps to bring these cases to the attention of the entire bar, perhaps by submitting copies of the opinions to statewide organizations such as the Pennsylvania Bar Association, the Pennsylvania Association for the Advancement of Justice, and the Pennsylvania Defense Institute. In this manner, the map created by the doctrine of stare decisis can be further clarified and the common law of post-Koken cases will be developed in a uniform fashion across the state. •

Daniel E. Cummins is a partner and civil litigator with the Scranton law firm of Foley, Cognetti, Comerford, Cimini & Cummins. Attorney Cummins' civil litigation blog, "Tort Talk," may be viewed at www.torttalk.com.