Plaintiffs May Name Insurance Carriers as Defendants in UIM Cases (PA)

The Pennsylvania Superior Court recently held in Stepanovich v. McGraw that co-defendants in underinsured motorist cases are not prejudiced under the Rules of Civil Procedure where the plaintiff names his own insurance carrier as a defendant.

In Stepanovich, the underlying action arose out of motor vehicle accident wherein defendant McGraw allegedly ran a red light and struck the plaintiff while he was crossing the street. In addition to suing McGraw, the plaintiff also named State Farm as a defendant for failure to pay underinsured motorist benefits. Despite the plaintiff’s foresight, however, the trial court sustained McGraw’s preliminary objections to the suit and bifurcated the claims so as to insulate the individual defendant from inadmissible evidence of (inadequate) insurance under Pa.R.C.P. 411. Still, the trial court allowed State Farm to participate in the case on the condition that it did not allude to insurance coverage or payments. Ultimately, an Allegheny County jury returned a complete defense verdict in McGraw’s favor and denied the plaintiff recovery for his injuries.

Dissatisfied with the outcome below, the plaintiff appealed to the Pennsylvania Superior Court where he argued that the trial court unnecessarily confused the jury by refusing to identify State Farm as a defendant in the case. Moreover, the plaintiff contended that he was unfairly prejudiced by having both defendants contest liability while only one remained available on the verdict sheet.

Interestingly, the Superior Court agreed with the plaintiff’s articulation of the law but nonetheless denied his request for a new trial. Specifically, the Superior Court explained that while Pa.R.C.P. 411 generally prohibits the introduction of liability insurance into evidence because it invites the jury to overvalue damages, allusions to underinsured motorist coverage are unlikely to prejudice the defendant where such benefits do not by their nature indemnify third-party tortfeasors. Nevertheless, the plaintiff in Stepanovich failed to demonstrate actual prejudice insofar as State Farm’s absence from the verdict sheet did not bear directly on the question of McGraw’s negligence. As a result, the plaintiff could not demonstrate reversible error and the trial verdict was affirmed in favor of the defense.

Given the nature of the Superior Court’s decision, Stepanovich serves as a reminder that the prohibition against evidence of insurance is not absolute, but rather depends on the specific relationship between the type of insurance and the defendants in the case.

Thank to law clerk Adam Gomez for his contribution to this post.  If you have any questions, please email Paul at pclark@wcmlaw.com