Plaintiff’s Attorney Deposed in Bad Faith Action

In the matter Adeniyi-Jones v. State Farm, 2016 U.S. Dist. LEXIS 85053 (E.D. Pa. 2016), plaintiff brought suit against State Farm alleging breach of contract and bad faith in negotiating plaintiff’s claim for underinsured motorist benefits.  The issue raised sua sponte by the court was whether plaintiff’s attorney was disqualified in this matter since she would be a fact witness.  Plaintiff’s counsel communicated with the insurer’s adjustor over a course of several years regarding the UIM claim.

Per Rule 3.7 of the Pennsylvania Rules of Professional Conduct (which rules were adopted by the federal court), a lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness.  Judge Bartle opined that if an attorney has inserted herself into the situation from which the disputed facts in the case arise, her continued representation is akin to participation by an unsworn witness.  If the attorney will not excuse herself, the court has the authority to disqualify counsel.

Although there is a hardship exception, Judge Bartle found that equities plainly weigh in favor of disqualification, since there is a real danger that the fact finder would be unable to discern when counsel was acting in her role as an attorney and when she is testifying as a fact witness.  The court found the hardship to the plaintiff in finding new trial counsel was minimal in comparison, and thus disqualified plaintiff’s counsel from further representing plaintiffs.

Attorney-Client Privilege Does Not Extend to Third-Party Claims Administrator

The underlying matter in Brown v. Greyhound, 2016 Pa. Super. 108, involved a collision between a Greyhound bus and tractor-trailer, wherein dozens of passengers on the bus were injured.  Upon the motions of plaintiffs, the trial court in Philadelphia ordered the production of certain discovery, and defendants appealed.  The primary issue on appeal is whether communications between counsel for a party and the party’s claims administrator are protected by the attorney-client privilege.

Greyhound conducted a mock deposition of the bus driver, which the plaintiffs argued was akin to taking a statement at the scene.  Greyhound asserted that the mock deposition was privileged.  However, the exercise was to elicit information that was intended to be disclosed to other parties.  The Superior Court agreed that the information conveyed by the bus driver was never intended to be confidential, and that Greyhound failed to meet its burden of proving the asserted attorney-client privilege.

Greyhound’s parent company, FirstGroup, argued that communications with Gallagher Bassett, the third-party adjustment company, would be privileged.  Per FirstGroup, because Greyhound is self-insured and directs its own litigation defense, risk management has been contractually outsourced to Gallagher.  Thus, FirstGroup argued that Gallagher was defense counsel’s “client representative,” and that information relayed between counsel and Gallagher were subject to the same protections as if it had been communicated directly to Greyhound.

The Superior Court found defendant’s claim improper that any investigation and statements contained in Gallagher’s files in privileged.  Instead, the Superior Court echoed the trial court’s finding that defendants improperly claimed privilege to thwart proper discovery.

Incidentally, this case was tried to verdict on July 22, 2016.  The jury awarded $5.05 million in damages (including $2 million in punitive damages), and apportioned liability 55% to the bus driver and 45% to Greyhound.

Credit for Third-Party Carrier’s Tender is Computed After Comparative Negligence Deduct

In Pusey v. Allstate, 2016 Pa. Super. Unpub. LEXIS 1768, the plaintiff was struck by a vehicle while riding his bicycle.  The driver’s carrier tendered its $25,000 liability limits, and plaintiff brought suit against its carrier to recover underinsured motorist benefits.  The jury computed a total award of $58,600, but attributed 41% comparative negligence to the plaintiff.  Defendant then filed a motion to mold the verdict, which resulted in a damages award of $34,574.  Defendant also sought credit for the $25,000 previously received from the third-party carrier, thus reducing the verdict to $9,574.

Neither party disputes that Allstate should receive credit for the $25,000 previously tendered.  The issue was whether that credit should be applied before or after the deduction for comparative negligence.

The Superior Court did not find the language of the Allstate policy ambiguous.  It is clear that the amount plaintiff is “legally entitled to recover” is only reasonably interpreted as the amount entitled to collect per the jury’s verdict.  Thus, plaintiff recovers $58,600, less a deduction for 41% comparative negligence, less the $25,000 previously received.  To compute it otherwise would frustrate the intent of the jury.

Superior Court Overturns a Zero Pain and Suffering Verdict

Plaintiff suffered soft tissue injuries when she was rear-ended in a chain-reaction collision.  The jury awarded plaintiff $16,233.40 for medical bills, $900 for wage loss, and zero damages for pain and suffering.  The evidence was uncontested that defendant’s negligence caused plaintiff’s injuries, for which plaintiff received epidural injections and underwent physical therapy.  The Superior Court (Hernandez-Lerch v. Gray, 2016 Pa. Super. Unpub. LEXIS 1706) found that the jury’s award of zero damages for pain and suffering was not reasonably related to the evidence presented at trial.  Thus, the verdict was against the weight of the evidence.

Even though not every act of negligence results in compensable pain, the Superior Court found that plaintiff presented sufficient evidence (e.g. cervical and lumbosacral strain and sprain, post-concussive syndrome, headaches, and unremitting low back pain) to have proven compensable pain that amount to more than a mere transient rub of life.

Coverage Denied in Bar Fight

Terrence Williams was a patron at Bridge & Pratt Café, when a fight ensued and he was allegedly struck by an employee of the business.  Penn-Patriot, the restaurant’s insurer, denied coverage because the policy excludes coverage for liability that arises out of an assault, battery, or physical altercation.  In the underlying complaint, Williams’ allegations regarding the altercation unequivocally establish that his bodily injury arose from an assault and battery and not from negligence.

In the declaratory judgment action, Penn-Patriot v. Williams, 2016 Phila. Ct. Com. Pl. LEXIS 146, the trial court found that the underlying complaint did not trigger coverage under the Penn-Patriot policy and therefore there is no duty for Penn-Patriot to defend defendants.

Court Precludes Evidence of UIM Limits and Premiums Paid

Plaintiff was involved in a motor vehicle accident caused by a third-party driver, who had $100,000 in coverage.  Plaintiff sought consent from his insurer, GEICO, to settle with the other motorist’s carrier for $75,000, and also sought from GEICO UIM benefits.  GEICO denied his claim based on the allegation that the motorist received the $75,000 as an award in binding arbitration, not in settlement, and therefore the third-party driver was not underinsured.

GEICO sought in limine to preclude evidence of the UIM limits and the amounts of premiums paid by plaintiff.  In the alternative, GEICO asked that if such evidence were permitted, then it should be permitted to introduce evidence regarding the third-party tortfeasor’s limits.

In Lucca v. GEICO, 2016 U.S. Dist. LEXIS 87868, Judge Pratter explained that although the bar for relevance is low, the amounts of the policy limits and paid premiums (which facts are undisputed) do not even reach that low bar.  The only issue for the jury is to decide the extent of plaintiff’s injuries.  The policy limits and paid premiums do not have any tendency to make any fact more or less probable than it would be without the evidence.  Moreover, the court found that the introduction of such evidence would be prejudicial.  Consequently, the court granted GEICO’s motion in limine.