Pennsylvania Court Orders Plaintiff to Narrow the Complaint to Specify Cause of Plaintiff’s Fall

Plaintiffs often use the broadest possible language in a complaint to describe conditions that allegedly caused their premises liability accident in order to preserve their causation arguments as discovery unfolds. This often leaves defendants scratching their heads as to what the plaintiff is actually claiming until the issues are clarified in written discovery or depositions. This commonality in Pennsylvania premises liability litigation might change. Recently, in Fenstermacher v. Sands Bethlehem Retail, et. al.., a Northampton County judge cracked down on broad pleading language by granting a defendant’s preliminary objections, thereby striking various terms from a plaintiff’s slip and fall complaint and essentially forcing plaintiff to narrow the scope of issues to be litigated.

First, the judge struck the phrase “dangerous conditions, including but not limited to” from the plaintiff’s complaint, in the context of the defendant failing to inspect the subject area for “dangerous conditions, including but not limited to slippery surfaces.”  The judge found that this language did not properly set forth the concise facts upon which plaintiff’s slip and fall claim is based in accordance with Pennsylvania fact pleading requirements. The judge clarified that the term “dangerous condition” may be properly used if it was being used to refer to a specific condition the plaintiff claimed he fell upon, such as a wet soapy substance, but that the “including but not limited to” language indicated that the plaintiff was using “dangerous conditions” as an impermissible catch-all.

The judge also struck the term “similar medical expenses” in the context of the plaintiff claiming he was forced to incur liability for medical treatments, medications, physical therapy and “similar medical expenses.” The judge viewed this as an impermissible catch-all allegation that was unnecessary since plaintiff specified at least some of the treatment he did undergo. The judge’s ruling essentially narrowed the breadth of damages to be litigated.

This ruling is positive for defendants in that it puts pressure on plaintiffs to clearly articulate their claims from the get-go. This will serve to narrow the scope of liability and damages issues for a defendant to litigate, and may help eliminate the element of surprise at depositions.

Thanks to Rachel Freedman for her contribution to this post.

 

 

 

Late Joinder No Reason to Dismiss (PA)

In Pennsylvania, joinder of additional defendants to a lawsuit is governed by Pennsylvania Rule of Civil Procedure 2252.  A Pennsylvania trial court rejected an  additional defendant’s objections joinder on the grounds that it was untimely in Lemoncelli v. Newell Rubbermaid, Inc.

Lemoncelli involved a products liability claim for a defective propane cylinder.  The plaintiff allegedly sustained second-degree burns to his lower extremities.  As a result of the accident, the plaintiff sued Newell Rubbermaid as the manufacturer and seller of the propane cylinder.  Plaintiff and Newell’s initial discovery revealed, however, that a valve manufactured by Schrader-Bridgeport, Inc. may have been the cause of the product’s malfunction.

As a result of this revelation, Newell, with the cooperation and assistance of Schrader, conducted various tests on the valve in an effort to re-create the plaintiff’s accident.  After the testing procedures, on December 3, 2015, Newell learned of the likelihood that Schrader’s valve did, in fact, malfunction and cause the accident.

Nearly six months after the testing, Newell filed a motion for leave to join Schrader to the lawsuit as an additional defendant.  Newell’s motion was granted, and it filed its joinder complaint.  Schrader objected to the joinder complaint, arguing (1) it was untimely filed and Newell did not provide a “reasonable justification or excuse” for the untimely filing of the joinder; and (2) it would be prejudiced by the untimely joinder.

First, the court outright rejected Schrader’s first argument regarding the lack of “reasonable justification or excuse” because the plaintiff did not oppose the joinder and this argument is reserved exclusively for plaintiffs under the Pennsylvania Rules of Civil Procedure.  In support of Schrader’s second argument, Schrader merely posited that it would be prejudiced by the joinder because of its inability to conduct a prompt post-accident investigation.  The court, however, noted that discovery was still ongoing and the initial testing that was done on the valve was done in the presence of Schrader.  As such, the court concluded that Schrader did not provide any evidence of actual, real prejudice to Schrader as a result of being joined to the lawsuit.  Accordingly, the court rejected Schrader’s objections to the joinder complaint.

Thanks to Erin Connolly for her contribution.

For more information, contact Denise Fontana Ricci at dricci@wcmlaw.com.

A “Snapshot” of a Case Can Determine Venue (PA)

On February 3, the Superior Court of Pennsylvania overruled the lower court’s decision to transfer venue in Burgess v. Clark Electrical Contractors, Inc., et al. The case arises out of a worksite accident.  On December 12, 2012, James Burgess (“Burgess”) was working on a drill rig when a light fixture fell from the rig and struck him, rendering him a quadriplegic.  The accident occurred in Susquehanna County, Pennsylvania.

In December 2014, Burgess commenced a lawsuit in Philadelphia and brought claims for negligence, recklessness, and loss of consortium.  Several defendants and companies were named as defendants and third-party defendants.  The incident spawned several different lawsuits, which were later consolidated by the court.  A few of the defendant companies were located in Philadelphia.

On August 27, 2015, the Philadelphia County Court of Common Pleas issued an order granting the defendants’ preliminary objections as to improper venue and to transfer the case to Susquehanna County.  In July and October 2015, the Philadelphia defendants were dismissed from the case.  Burgess then filed an appeal of the trial court’s decision.

In Pennsylvania, the decision to transfer venue is within the discretion of the trial court, and presumption is in favor of the plaintiff’s original forum choice.  Under the Pennsylvania Rules of Civil Procedure, an action against two or more defendants may be brought against all defendants in a county where venue may be laid against any one of the defendants.

The Superior Court reasoned that a question of improper venue is answered by taking a snapshot of the case at the time it is initiated.  If it is proper at the time of the snapshot, then it remains proper throughout.  At the snapshot of the instant case at its initiation, there were several defendant companies located in Philadelphia, and thus, venue was proper in Philadelphia when the suit was filed.

This case demonstrates the interplay of rules of civil procedure with the desire to remove cases from plaintiff-friendly jurisdictions, like Philadelphia.  Though it is always good to look at issues like federal removal, improper venue, or forum non-conveniens, local rules and other rules of civil procedure can, in some instances, disallow removal, rendering the ensuing motion practice an exercise in futility.  Thanks to Peter Cardwell for his contribution to this post.  Please email Brian Gibbons with any questions.

Authority to Bind (in Arbitration) comes Unbound (PA)

The Superior Court recently issued a decision that tells a cautionary tale regarding authority to bind, through arbitration.  In the matter of Mary P. Petersen, by and through her attorney-in-fact, Kathleen F. Morrison v. Kindred Healthcare, Inc., and Personcare of Reading, Inc., d/b/a Kindred Transitional Care and Rehabilitation-Wyomissing, and Kindred Nursing Centers East, LLC, and Kindred Healthcare Operating, Inc., and Monique Cole, 2017 Pa Super 26 (Feb. 1, 2017), the Court found that a successor agent does not possess the requisite authority to render an arbitration agreement binding.

In this matter, Petersen sued Kindred for negligent care it rendered to Peterson during her stay as a patient a Kindred Facility.  In response to Petersen’s complaint, Kindred filed preliminary objections, seeking to enforce an arbitration agreement signed by Petersen’s daughter, Darlene Uriate, pursuant to a power of attorney (“POA”).  The POA appointed Uriarte as successor agent in the event her sister, Kathleen Morrison, was “unwilling or unable” to act.  However, there is no indication that Kindred confirmed whether Morrison was “unwilling or unable” to act, as required by the arbitration agreement.

Petersen argued that the agreement was “unenforceable, void, unconscionable, and/or a contract of adhesion,” and sought to litigate the matter in state court, rather than through arbitration. Following oral argument, the trial court directed Kindred to answer Petersen’s complaint, thereby denying the arbitration demand.  Kindred appealed.

On appeal, the Superior Court was asked to determine whether Uriarte possessed the authority to act on Petersen’s behalf under the POA.  The Court reasoned that the POA appointed Uriarte as agent only upon the occurrence of a specific contingency, i.e., if Kathleen Morrison was unwilling or unable to act.  Thus Uriarte’s authority to bind her mother did not arise until her sister, Kathleen Morrison, became “unwilling or unable” to act.  Having received a copy of Petersen’s POA, Kindred had actual notice that Uriarte had authority to act only based on the occurrence of certain conditions.  The Court further observed that Kindred demonstrated no attempt to ascertain whether Morrison was “unwilling or unable” to act..  Rather, Kindred simply accepted Uriarte’s representation that she possessed the requisite authority to act on behalf of her mother, even though she was named in the document only as successor agent.

In the endt, the Court concluded that Kindred failed in its obligation to take notice of the nature and extent of the authority conferred upon Uriarte by Petersen’s POA.  To view this issue another way, Morrison’s being “unwilling or unable” to act was, essentially, a condition prcedent to arbitration.  And Kindred never satisfied this condition.  Hence, no arbitration.  Thanks to Hillary Ladov for her contribution to this post.  Please email Brian Gibbons with any questions.

 

Standing Taking a Seat in Cyber Claims.

The standard defense to a data breach lawsuit has been — there was no actual injury (only the fear of a potential injury), so the plaintiffs lack standing and the case must be dismissed. This defense has historically resulted in the dismissal of data breach lawsuits. But this standing defense is under siege and the Third Circuit might have given it a permanent seat.

In re: Horizon Data Breach Litigation, Horizon, a large health insurer, had two laptops stolen. The laptops contained the PII (or personally identifiable information) of hundreds of thousands of people. A class action lawsuit was filed in which the plaintiffs alleged that because Horizon did not take reasonable steps to secure its data, the plaintiffs were exposed to a potential vulnerability to identity theft. The district court dismissed the action, on the basis of standing, as none of the putative class members could show that the breached information was used to their detriment. The Third Circuit, in a published and precedential decision that was the first of its kind, reversed and found that, even without evidence that the information was used improperly, the plaintiffs had standing to proceed with their claims.

This decision is big news as it comes from a federal circuit court and means that the standing defense is losing its hold as a viable defense. Standing, in short, is taking a seat.

Special thanks to Matt Care for his contribution to this post. For more information, please e-mail Bob Cosgrove.

Pennsylvania Superior Court Finds Employers Have No Duty to Protect Electronically Stored Personal Information

In Dittman v. UPMC,  breach of contract and negligence actions were brought against an employer when employees’ personal information was stolen from the employer’s computer system and used to file fraudulent tax returns and steal tax refunds.  Particularly, the names, birth dates, social security numbers, tax information, addresses, salaries, and bank information of approximately 62,000 UPMC employees and former employees were accessed and stolen from UPMC’s computer system.  The information stolen was personal information that UPMC required employees to provide as a condition of employment.

The employees filed a class action lawsuit, arguing that UPMC had a legal duty to protect their personal and financial information and that UPMC failed to properly encrypt the data and establish adequate firewalls to protect the information in its network.  UPMC filed preliminary objections to the complaint, arguing that the employees lacked standing to assert these claims on behalf of an individual who had not yet been injured and that the negligence and breach of contract claims failed as a matter of law.  The trial court sustained the preliminary objections and dismissed the claims.

On appeal, the Superior Court agreed with the trial court that UPMC did not owe a duty of reasonable care in its collection and storage of the employees’ data.  In coming to that conclusion, the Superior Court weighed five factors.  First, the Superior Court found that the relationship between the parties, that of employer and employee, weighed in favor of imposing a duty on the employer.  Second, the Court reasoned that employers have an obvious need to collect and electronically store the personal information of their employees.  Although the foreseeability of a data breach is a substantial risk, the utility of electronically storing information outweighs the risk.  Next, the Court reasoned that it was unnecessary to have a judicially imposed duty requiring employers to incur significant costs to increase security when there is not true way to prevent security breaches altogether.  Finally, the Court found that it was not in the public interest to impose a duty and expend judicial resources, as there was already legislature to  address the issue.

Thanks to Alexandra Perry for her contribution to this post and please write to Mike Bono if you would like more information.

Pennsylvania Court Finds Underinsured Motorist Rejection Void

In John Bielec v. American Int’l Group Inc., et al., the Pennsylvania Court of Common Pleas, Philadelphia County, addressed the validity of an insurer’s rejection of underinsured motorist (“UIM”) coverage.  In brief, the plaintiff was an employee of Verizon Communications, Inc. (“Verizon”), who was involved in an automobile accident during the course of his employment.  At all times relevant, Verizon was insured by National Union Fire Ins. Co. (“National Union”).  Following the accident, the plaintiff attempted to claim UIM coverage under Verizon’s National Union policy.  National Union rejected the plaintiff’s UIM claim contending there was no UIM coverage provided under its policy.  The plaintiff commenced the instant declaratory judgment action seeking UIM coverage under the National Union policy.

In determining whether the plaintiff was entitled to UIM coverage, the court first looked to the requirements of the relevant Pennsylvania statute, i.e. the Motor Vehicle Financial Responsibility Law (“MVFRL”).   Under the MVFRL, Verizon was required to insure its fleet of commercial vehicles under a commercial insurance policy.  However, before obtaining such a policy, its insurer needed to provide Verizon the option of obtaining UIM coverage.  Upon receipt of this offer, Verizon was required to either accept or decline such coverage.  Under the MVFRL, the rejection of such coverage required specific steps to be taken or else the rejection would be deemed void.  Ultimately, Verizon opted to reject UIM coverage.  However, although Verizon opted to reject such coverage, the Verizon representative did not sign and date the UIM Rejection Form in the space immediately below the UIM rejection language.  Conversely, the representative placed a signature and date and the very bottom of the document leaving multiple paragraphs of text in between the UIM rejection language and her signature.

Ultimately, the court concluded that the UIM Rejection Form was void.  Looking to the specific facts of this case, the court noted that although the Rejection Form was signed, the form allowed for at least three paragraphs to intervene between the specific UIM rejection language and Verizon’s signature and date.  Specifically, the court noted that one of the intervening paragraphs allowed for the rejection of stacked limits of UIM coverage, which the court stated voided the validity of Verizon’s attempt to reject UIM coverage.  Moreover, notwithstanding the foregoing, the court also reasoned that Verizon’s failure to notify its employees that it was rejecting UIM coverage also gave rise to a public policy argument as to why Verizon’s rejection was void.  Thus, the court concluded that Verizon’s rejection of UIM coverage was void and not a basis to deny the plaintiff’s claim for coverage.

Consequently, this case illustrates that courts will strictly interpret Pennsylvania statute when it comes to rejecting UIM coverage.  Thus, an insurer needs to be cognizant of the statute’s requirements or else it may find itself providing coverage where it did not intend to do so.

Thanks to Colleen Hayes for her contribution to this post.

 

 

Choice of Ways Doctrine Supports Defense Summary Judgment (PA)

Defendants in Philadelphia County successfully asserted a choice of ways doctrine defense to earn a defense summary judgment in a recent slip and fall case.  The choice of ways doctrine bars recovery in a negligence context, when a plaintiff chooses to confront a patently obvious danger.   In Spady v. Acme Mkts., PICS Case No. 16-1530 (C.P. Philadelphia Sept. 8, 2016), Plaintiff brought suit against Acme Markets, FHG Companies, LLC, and DeMasi Landscaping seeking recovery for injuries he suffered as a result of a fall on a pile of snow and ice in an Acme parking lot.  The trial court granted summary judgment for defendants, which Plaintiff appealed on the grounds that, inter alia, there was a genuine issue of material fact as to his contributory negligence, and the court’s application of the choice of ways doctrine.

In February 2014, Plaintiff slipped and fell on a pile of snow and ice while walking in the parking lot of Acme supermarket.  Plaintiff brought a negligence claim against defendants alleging that they failed to remove the snow and warn of dangerous conditions.  However, video surveillance footage showed that the parking lot was clear of snow except for a mound of snow at the end of each row of parked cars.  The footage also showed that Plaintiff parked his car in an area completely clear of snow and that the most direct route from Plaintiff’s car to the entrance of the store was entirely clear of snow.  Despite the presence of a direct and clear route, Plaintiff chose a longer, indirect route in which he walked around another row of parked cars and then climbed over a mound of snow which he would not have encountered had he simply taken the shortest, most direct route from his car.   In his deposition, Plaintiff could not explain why he chose the longer, less direct route, other than that he saw a handicapped parking sign and thought that the route would be clear.  Plaintiff acknowledged that he did not really know why he chose the longer route, and also that, other than the mound at the end of each row of cars, the parking lot was clear of snow.

In its opinion recommending affirmation of the trial court’s decision, the court pointed out that the choice of ways doctrine is defined as:  “where a person, having a choice of two ways, one of which is perfectly safe, and the other of which is subject to risks and dangers, voluntarily chooses the latter and is injured, he is guilty of contributory negligence and cannot recover.”  The court may rule on the choice of ways doctrine as a matter of law and preclude Plaintiff’s recovery if no reasonable minds could disagree that there was:  (1) a safe course; (2) a dangerous course; and (3) facts which would put a reasonable person on notice of the danger or actual knowledge of the danger.

The court concluded that the choice of ways doctrine barred Plaintiff’s recovery because no reasonable minds could disagree that Plaintiff was aware of the safe and clear path that was the shortest and most direct from his car to the store, and he voluntarily assumed the risk of an obvious and known danger by deciding to take a longer, less direct path that encountered a mound of snow.  Thus, the court recommended the affirmation of the trial court’s granting of summary judgment for Defendants.  The court further noted that, although originally established within the framework of a contributory negligence system, the choice of ways doctrine still exists despite Pennsylvania’s shift to a comparative negligence system.  Thanks to Greg Herrold for his contribution to this post.  Please email Brian Gibbons with any questions.

 

 

Insured’s Declaratory Judgment Goes Up In Flames (PA)

The Eastern District of PA recently awarded summary judgment to an insurer, as well as $25,000 in damages, for an insured’s material misrepresentation in his insurance application in the case Payne v. Allstate Insurance Co..

On December 31, 2009, the insured, Payne, entered into a homeowner’s insurance agreement with Allstate Insurance Company (“Allstate”) to insure his home located in Philadelphia, PA.  As a prerequisite to obtaining the insurance agreement, Payne had to fill out an insurance application.  On the application, Allstate specifically asked Payne whether he used any alternative or supplemental heating source in his home.  Payne answered “no.”

Unsurprisingly, on February 9, 2010, Payne’s home caught fire.  Thereafter, Payne filed a claim with Allstate.  As part of its claim investigation, Allstate requested that Payne submit to an examination under oath.  During the examination, Payne admitted to using kerosene heaters in the home and that the kerosene heaters may have started the fire.  After the examination, Allstate denied Payne’s claim leading to a declaratory judgment action.  Allstate counterclaimed, suing Payne for breach of contract, breach of common law duty of good faith, and insurance fraud.  Both parties filed motions for summary judgment on the issues.

Upon review, the court found that Payne made a material misrepresentation when he failed to disclose that he used kerosene heaters, an alternative or supplemental heating source, on his insurance application.  Specifically, the court stated that the misrepresentation was material because whether Payne used alternative sources of heat was pertinent to the risk at issue in this case: fire.  Because of Payne’s material misrepresentation regarding the use of an alternative heat source in the house, the court granted summary judgment as to Allstate’s claims for breach of contract, breach of common law duty of good faith, and insurance fraud.  The court also awarded Allstate $25,000 in damages.  Likewise, because of Payne’s material misrepresentation, the court dismissed Payne’s breach of contract claim against Allstate with prejudice.

Thanks to Erin Connolly for her contribution.

For more information, contact Denise Fontana Ricci at dricci@wcmlaw.com.

 

“Hyper-technical” Deviations in Waiver Language are Negligible in PA UIM Case

The Superior Court of Pennsylvania recently affirmed the decision of the Erie County Court of Common Pleas in an underinsured motorist (“UIM”) case on December 14.  The case of Petty v. Federated Mutual Insurance arises out of a car accident that occurred on September 1, 2012.  The plaintiffs were passengers in a car owned by McQuillen Chevrolet-Buick-Pontiac-GMC Truck, Inc. (“McQuillen”) when they were hit by another vehicle driven by Kelley Cooley (“Cooley”).  Cooley was insured by State Farm and settled the resulting suit for the limit of her policy.

The plaintiffs then sought UIM coverage from McQuillen’s auto policy which Federated Mutual Insurance (“Federated”) denied.  Federated asserted that McQuillen had rejected UIM coverage by signing a waiver form.  The plaintiffs then filed a declaratory judgment action against Federated asserting that the waiver form language did not comply with the statutory requirements of 75 Pa.C.S. § 1731(c).  Federated moved for judgment on the pleadings and prevailed.

75 Pa.C.S. § 1731 of Pennsylvania’s Motor Vehicle Financial Responsibility Law requires that any UIM coverage rejection form must state:

REJECTION OF UNDERINSURED MOTORIST PROTECTION

By signing this waiver I am rejecting underinsured motorist coverage under this policy, for myself and all relatives residing in my household. Underinsured coverage protects me and relatives living in my household for losses and damages suffered if injury is caused by the negligence of a driver who does not have enough insurance to pay for all losses and damages. I knowingly and voluntarily reject this coverage.

 

(c.1) Form of waiver.–Insurers shall print the rejection forms required by subsections (b) and (c) on separate sheets in prominent type and location. The forms must be signed by the first named insured and dated to be valid. The signatures on the forms may be witnessed by an insurance agent or broker. Any rejection form that does not specifically comply [emphasis added] with this section is void. If the insurer fails to produce a valid rejection form, uninsured or underinsured coverage, or both, as the case may be, under that policy shall be equal to the bodily injury liability limits. On policies in which either uninsured or underinsured coverage has been rejected, the policy renewals must contain notice in prominent type that the policy does not provide protection against damages caused by uninsured or underinsured motorists. Any person who executes a waiver under subsection (b) or (c) shall be precluded from claiming liability of any person based upon inadequate information.       

Federated’s form was identical to the statute, except the heading was slightly different:

Option 2. Rejection of Underinsured Motorists Coverage

On appeal, the plaintiffs raised whether Federated’s waiver form complied with statutory requirements when it added the phrase “Option 2”, replaced the term “protection” with “coverage”, added an “s” to the end of “motorist”, and boxed a portion of the form.  In addition, they raised whether the court erred in holding that “specific compliance” allowed Federated to deviate from the statutory form, whether the court erred in conducting a substantive analysis of the deviations, and did it err when it considered contract principles.

Thankfully, the Superior Court found that the Federated waiver’s language was a verbatim recitation of the statute.  They also agreed with the lower court’s evaluation that any differences in the heading were “hyper-technical” and do not cause any confusion or an uninformed waiver.  In other words, nice try plaintiffs, but no dice.

This case demonstrates the importance of policy and contractual language when interpreted by a court.  It shows that some courts allow flexibility when interpreting a policy.  That said, underwriters would be well served by adhering to specific statute language to the greatest degree possible.  Thanks to Peter Cardwell for his contribution to this post.  Please email Brian Gibbons with any question.