author: GRAY, J.,

text:
    AAA Life Insurance Co. v. Walker
    C.P. of Lycoming County,
    No. 13-01,744

      J Michael Wiley, for petitioner.

      Marc S. Drier, for claimant/interpleader.
    October 10, 2013-
   GRAY, J.,

ORDER

And now, this 10th day of October, 2013, following oral argument on petitioner’s petition for interpleader and claimant Walker’s motion for judgment on the pleadings held October 2,2013, it is hereby ordered and directed that petitioner AAA’s petition is granted and claimant Farr’s motion is granted in part and denied in part. Specifically, it is ordered and the court finds the following.

1. As the court finds that there are competing claims to the insurance proceeds, claimants John Earl Walker and Wayne A. Farr are interpleaded into this case and a final order shall be subsequently entered in this matter.

2. Petitioner AAALife Insurance Company shall deposit with the Lycoming County prothonotary the proceeds of the Group Life Insurance Certificate No. 0002487079 pending disposition of the claimants’ competing claims and the determination of the amount of attorney’s fees and costs awarded to petitioner AAALife Insurance Company.

3. Petitioner AAA Life Insurance Company is hereby awarded its reasonable attorney’s fees pursuant to 42 Pa.C.S.A. §2503(4) in an amount to be determined at the final hearing in this matter.

4. Claimant Wayne A. Farr moved for a judgment on the pleadings pursuant to Pa. R.C.P. 1034 on the grounds that the decedent properly and fully changed the beneficiary on the policy by complying with the policy’s only requirement when decedent signed the instruction on AAA’s form and sent it back to them.

5. Claimant Wayne A. Farr further asserted that a judgment on the pleadings is appropriate because “no legally recognizable reason for disregarding the change of beneficiary is alleged in the letter” and because no answer or other responsive pleading had been filed with the court as required by Pa. R.C.P. 1034.

6. However, on July 25, 2013, claimant John E. Walker filed a response with the court, and therefore his lack of response cannot provide grounds for entering a judgment on the pleadings.

7. Claimant Walker’s response asserted that Walker is the legal beneficiary and has been since 1999 and that no change of beneficiary occurred. At argument, claimant Walker conceded that the form bears the decedent’s signature but asserted that the change of beneficiary was not effective because decedent failed to complete the form properly.

8. Claimant John E. Walker further asserted that decedent’s mental health, including her alleged suicidal history and drug and alcohol abuse, essentially rendered her incompetent to effectuate a change in the beneficiary and requested forty-five (45) days to gather records in support of that claim.

9. Claimant John E. Walker also asserted that the proceeds of the life insurance should be paid toward two mortgages held by both him and the decedent.

10. Petitioner AAA Life Insurance Company averred that on April 12, 2013, it “received a telephone call from the decedent insured to add or change beneficiaiy(ies) and a Request for Change Beneficiary/Name form was sent to the decedent[.]” See, petition for interpleader, ¶9. This averment was uncontested in the pleadings/responses.

11. Petitioner AAA Life Insurance Company also averred that a request for change beneficiary/name form was received from decedent on April 25,2013. See, petition for interpleader, ¶10. This averment was uncontested in the pleadings/responses.

12. The request for change beneficiaiy/name form that was received by AAA Life Insurance on April 25, 2013 contains written notice of a change in beneficiary and is signed “Melody L. Walker” and dated April 18,2013. See, petition for interpleader, exhibit “C.”

13. Decedent, Melody L. Walker, died on April 30, 2013. See, petition for interpleader, ¶12. This averment was uncontested in the pleadings/responses.

14. Petitioner also averred that on May 1,2013, a letter was sent to decedent advising her that her request for change beneficiary/name form could not be processed and requesting additional information be submitted in order to complete the requested change of beneficiary. This averment was uncontested in the pleadings/responses.

15. The AAA group life insurance policy allows a change of beneficiary at any time and provides a method for changing a beneficiary. The policy states as follows: “Unless restricted by law, the Insured Person may change the beneficiary at any time. To name or change a beneficiary, the Insured Person must give AAA Life notice in writing which is signed by the Insured Person. The change of beneficiaiy is effective the date it is received by AAA Life.” See, petition for interpleader, exhibit A, page 6, Part VI, beneficiary and benefit proceeds options.

Legal Standard

16. Pa. R.C.P. 1034 provides that “[a]fter the relevant pleadings are closed, but within such time as not to unreasonably delay the trial, any party may move for judgment on the pleadings.”

17. A motion for judgment on the pleadings may be entered by this court “when there are no disputed issues of fact and the moving party is entitled to judgment as a matter of law,” similar to a demurrer. Mellon Bank, N.A., v. Nat’l Union Inc., 768 A.2d 865, 868 (Pa.Super. Ct. 2001) (citations omitted).

18. The general rule is that a “change of beneficiary requires strict or literal compliance with policy terms,” but “our case law has recognized an exception where an insured makes reasonable but unsuccessful efforts to send notice. This exception will recognize a change in beneficiary designation, even though notice is received after the death of the annuitant, if the annuitant made every reasonable effort to comply with the notice requirements of the policy.” Fatin Alkhafaji v. TIAA-CREF Individual & Institutional Servs., LLC, 69 A.3d 219, 222 (Pa. 2013) (citations omitted).

19. 42 Pa.C.S.A. §2503(4) provides that “[t]he following participants shall be entitled to a reasonable counsel fee as part of the taxable costs of the matter: *** (4) A possessor of property claimed by two or more other persons, if the possessor interpleads the rival claimants, disclaims all interest in the property and disposes of the property as the court may direct.” Id.

Conclusions of Law

a. Compliance with Policy Requirements to Change Beneficiary

20. Claimant Walker has not raised an issue of disputed fact as to whether the decedent completed the form sufficiently to effectuate the change of beneficiary because at argument claimant Walker conceded that the form bears decedent’s signature.

21. Since claimant Walker conceded that the form bears the decedent’s signature, as a matter of law, the request for change beneficiary/name form, which was received by petitioner AAA Life Insurance Company, complied with the requirements provided in the AAA group life insurance policy. See, petition for interpleader, exhibit A, page 6, Part VI, beneficiary and benefit proceeds options, and exhibit C.

22. Therefore claimant Farr’s motion for judgment on the pleadings is granted as to the issue of compliance with the requirements of the AAA Life Insurance Company for changing a beneficiary.

b. Competency to Change Beneficiary

23. Claimant John E. Walker asserted that decedent’s mental health, including her alleged long history of suicide attempts, psychiatric hospitalizations and drug and alcohol abuse, essentially rendered her incompetent or lacking the capacity to effectuate a change in the beneficiary and requested forty-five (45) days to gather records in support of that claim. See, claimant’s response, filed July 25,2013.

24. Since claimant Walker raised an issue of disputed fact as to the competency or capacity of the decedent to effectuate a change in the beneficiary, the motion for judgment on the pleadings is denied solely as to the issue of competency to change the beneficiary.

25. Claimant Walker’s request for forty-five (45) days to gather records in support of his claim on the issue of the competency of the decedent to effectuate a change in the beneficiary is granted. Claimant Walker shall provide an opportunity for claimant Farr, through his attorney, to view and/or copy such records not later than November 17, 2013.

c. Attorney Fees

26. A possessor of insurance proceeds claimed by two rival people is entitled to an award of attorney fees pursuant to 42 Pa.C.S.A. §2503(4).

27. As the court finds that there are competing claims to the insurance proceeds in this matter and ordered AAA Life Insurance Company to deposit such funds with the court, AAA Life Insurance Company is entitled to an award of reasonable attorney fees pursuant to 42 Pa.C.S.A. §2503(4).

28. Counselor for petitioner AAA Life Insurance Company shall provide detailed time sheets, including time spent, tasks performed and hourly rates, in a supplemental affidavit on or before November 1, 2013. The original shall be filed with the court, with copies to Mr. Drier and Mr. Walker.

29. Afinal hearing on the competency issue is scheduled for the 20th day of November, 2013 in Courtroom # 3 at 3:00 P.M. The parties may provide testimony, evidence, and arguments. The court will hear arguments on the amount of attorney’s fees to be awarded.


source: Caselaw Access Project

author: KOURY, /.,

license: Public Domain

text:
    Smith v. Smith

      C.P. of Northampton County,
    No. C-48-CV-2011-11875

      Michael A. Snover, for plaintiff.

      Christopher Parrish and Jennifer Le Van, for defendant.
    October 11, 2013-
   KOURY, /.,

OPINION OF THE COURT

This matter is before the court on plaintiff Christine Smith’s (“Christine” or “Christine Smith”) “Motion for Partial Summary Judgment on Tort Status.” In order to rule upon Christine Smith’s motion, the court must decide whether she was a resident relative in her mother’s household at the time of the accident at issue in the case and was therefore an insured under her mother’s automobile insurance policy and bound by her mother’s election of the limited tort option in the policy. For the reasons set forth below, we hold that Christine Smith was not a resident relative of her mother’s household at the time of the accident and that her motion for summary judgment is granted.

BACKGROUND

I. Christine Smith’s Complaint

This action arises out of a car accident that occurred on December 28, 2009 on Route 191 in Stroud Township, Monroe County, Pennsylvania. See compl. ¶ 3, Smith v. Smith, C-48-CV-2011-11875 (C.P. Northampton Co. Apr. 4, 2012) (“compl.”). Christine Smith was a passenger in the car. See id. The car was driven by Christine’s sister, Barbara Smith (“Barbara” or “Barbara Smith”), and owned by defendant June Smith (“June” or “June” Smith”), mother of Christine and Barbara Smith. See id. As a result of the accident, Barbara Smith died. See id. ¶ 2. Christine Smith has asserted claims against her mother, June Smith, individually and as administrator of the estate of Barbara Smith, for personal injuries that Christine Smith allegedly sustained in the accident. See id. ¶¶ 6-18.

The parties agree that the car involved in the accident was insured by June Smith under a motor vehicle insurance policy issued by State Farm Mutual Automobile Insurance Company and that June Smith had elected the limited tort alternative under the Pennsylvania Motor Vehicle Financial Responsibility Law (“MVFRL”), 75 Pa.C.S.A. § 1705(d), which limits an insured’s ability to recover for noneconomic loss, including pain and suffering. See plaintiff’s brief in support of motion for partial summary judgment on tort status at 2, Smith v. Smith, C-48CV-2011-11875 (C.P. Northampton Co. May 17, 2013) (“PI. Br.”); defendant’s brief in opposition to plaintiff’s motion for partial summary judgment on tort status at 5, Smith v. Smith, C-48-CV-2011-11875 (C.P. Northampton Co. Aug. 30, 2013) (“def. br.”). As an affirmative defense, June Smith has asserted that Christine Smith’s claims are barred or reduced, because she was allegedly a resident relative in her mother’s household at the time of the accident and was therefore an insured under her mother’s policy and bound by her mother’s election of the limited tort alternative. See new matter ¶ 4; def. br. at 4-5.

II. Christine Smith’s Residence

Prior to December 2009, Christine and Barbara Smith lived at their mother’s house at 3 Greenwood Way in East Bangor, Pennsylvania. See transcript of deposition of Christine Smith at 21-22, 46, Smith v. Smith, C-48-CV-2011-11875 (C.P. Northampton Co. Feb. 14, 2013) (“Christine Smith dep.”); transcript of deposition of June Smith at 5-6, Smith v. Smith, C-48-CV-2011-11875 (C.P. Northampton Co. Feb. 14, 2013) (“June Smith dep.”). In early December 2009, Christine had an argument with her mother. See Christine Smith dep. at 125; June Smith dep. at 6-7. June Smith told Christine Smith that if she wanted to live in her house, she had to follow her rules. See June Smith dep. at 7. At that time, Christine was eighteen years old. See Christine Smith dep. at 7. Christine told her mother that she wanted to be independent. See June Smith dep. at 8-9. Christine moved out of her mother’s house and moved in with her friend Katie Geary, who lived in a basement apartment in her parents’ home with a separate entrance. See Christine Smith dep. at 21, 54, 124. Although Christine left some of her personal possessions at her mother’s home, she moved “quite a few clothes” to Katie’s house. See June Smith dep. at 32.

Christine, Barbara, and Katie decided they wanted to live together in a place of their own and began looking for an apartment. See Christine Smith dep. at 129; June Smith dep. at 7. Barbara was a year and a half older than Christine and worked at Wal-Mart. See Christine Smith dep. at 42. Katie worked at the Red Robin restaurant. See id. at 53. At that time, Christine was not working. See id. at 14,45-46. However, she began looking for ajob so that she would be able to support herself and pay her share of the rent for an apartment. See id. at 125.

Christine testified that before December 2009, she had never before “moved out” of her mother’s house. See id. at 121. She had occasionally spent the night away from home, but on those occasions, she had returned after a day or two. See id. at 23-24, 122; June Smith dep. at 6.

June Smith testified that after Christine moved out of her house in December 2009, she believed that this move might be different from previous occasions when Christine had stayed with friends overnight. See June Smith dep. at 7. On this occasion, unlike the others, even after the argument ended, Christine did not return home. See id. June Smith dep. at 8. She remained away longer than she had ever been away before. See id. at 6. She returned to her mother’s house periodically to pick up her mail but did not move back in. See id. at 8. Although June Smith told her daughters that they were “nuts” for planning to live on their own, they persisted in their search for an apartment. See id. at 7. June Smith testified that she was “hoping” that Christine would move back to her house. See id. at 33. However, she said there was no particular time when she expected Christine to return home, “[e] specially when she didn’t come home for Christmas.” Id. at 6.

Christine testified that when she first moved to Katie’s house, she did not intend to live there permanently but intended to move back to her mother’s house at some point. See Christine Smith dep. at 23-24. However, she testified that there was no specific date when she planned on returning to her mother’s house. See id. at 122. She said she never filled out a form to change the address on her driver’s license and never went to the post office to change her mailing address. See id. at 127. She said, “I wasn’t going to stay at Katie’s.... I was going to go back to my mom’s or get an apartment.” Id. at 128-29. On December 29,2009, after she left the hospital, Christine moved back to her mother’s house. See id. at 22, 49.

DISCUSSION

I. Summary Judgment Standard

The court may enter summary judgment on a claim or defense when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. See Pa.R.C.P. 1035.2.

After the relevant pleadings are closed, but within such time as not to unreasonably delay trial, any party may move for summary judgment in whole or in part as a matter of law.
(1) whenever there is no genuine issue of any material fact as to a necessary element of the cause of action or defense which could be established by additional discovery or expert report, or
(2) if, after the completion of discovery relevant to the motion, including the production of expert reports, an adverse party who will bear the burden of proof at trial has failed to produce evidence of facts essential to the cause of action or defense which in a jury trial would require the issues to be submitted to a jury.

Id.; accord J.P Morgan Chase Bank, N.A. v. Murray, 63 A.3d 1258, 1261-62 (Pa. Super. 2013). The court views the record in the light most favorable to the non-moving party, and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party. See id.

“The moving party bears the burden of proving that no genuine issues of material fact exist.” Wittrien v. Burkholder, 965 A.2d 1229, 1232 (Pa. Super. 2009) (quoting Wright v. Allied Signal, Inc., 963 A.2d 511, 514 (Pa. Super. 2008)). However, where the non-moving party bears the burden of proof on an issue at trial, in order to defeat summary judgment, the non-moving party must adduce sufficient evidence to establish a genuine issue of material fact as to that issue. See J.P. Morgan, 63 A.3d at 1260.

Where the non-moving party bears the burden of proof on an issue, he may not merely rely on his pleadings or answers in order to survive summary judgment. Failure of a non-moving party to adduce sufficient evidence on an issue essential to his case and on which it bears the burden of proof establishes the entitlement of the moving party to judgment as a matter of law.

Id.

A party asserting an affirmative defense bears the burden of proof on that defense. See Speight v. Mahalis, 2008 WL 6581343, at *58 (C.P. Philadelphia Co. May 28, 2008) (“Generally, a defendant has the burden of proof on affirmative defenses and counterclaims. Because the Estate did not present evidence of the insurance, it failed to satisfy its affirmative burden that recovery was restricted to a limited tort election on the applicable automobile policy.”).

Here, June Smith has asserted the affirmative defense that Christine Smith is bound by the limited tort option in June Smith’s insurance policy and is therefore precluded from seeking full tort relief. Thus, June Smith will bear the burden of proof at trial on that affirmative defense. Accordingly, the court may grant summary judgment against June Smith on this affirmative defense if she has failed to adduce evidence of facts “which would require the issue to be submitted to a jury.” Pa.R.C.P. 1035.2(2). The court must now determine whether June Smith has established the existence of a genuine issue of material fact as to whether Christine Smith is bound by the limited tort election in June Smith’s policy.

II. The Right to Pursue Full Tort Relief

The interpretation of the MVFRL is a question of law for the court. See L.S. v. David Eschbach, Jr., Inc., 874 A.2d 1150, 1154 (Pa. 2005). When there is a dispute as to whether the full tort or limited tort alternative applies, doubts are resolved in favor of the full tort alternative. See id. at 1156-57. In addition, “[t]he interpretation of an insurance contract regarding the existence or nonexistence of coverage is ‘generally performed by the Court.’” Donegal Mut. Ins. Co. v. Baumhammers, 938 A.2d 286, 290 (Pa. 2007) (quoting Minnesota Fire & Cas. Co. v. Greenfield, 855 A.2d 854, 861 (Pa. 2004)).

“The tort option elected by a named insured shall apply to all insureds under the private passenger motor vehicle policy who are not named insureds under another private passenger motor vehicle policy.” MVFRL, 75 Pa.C.S.A. § 1705(b)(2). Because June Smith was the “named insured” on her own policy, her election of the limited tort option in her policy applies to all “insureds” under that policy who are not “named insureds” under another policy. See id. The parties agree that at the time of the accident, Christine Smith did not own a vehicle and was not a “named insured” under any policy. See pi. br. at 8-9. Thus, if Christine Smith was an “insured” under her mother’s policy, she is bound by her mother’s election of the limited tort option. See MVFRL, 75 Pa.C.S.A. § 1705(b)(2). Conversely, if Christine Smith was not an “insured” under her mother’s policy, then she is not bound by her mother’s election of the limited tort option and is entitled to seek full tort relief. See MVFRL, 75 Pa.C.S.A. § 1705(b)(3).

An individual who is not an owner of a currently registered private passenger motor vehicle and who is not a named insured or insured under any private passenger motor vehicle policy shall not be precluded from maintaining an action for noneconomic loss or economic loss sustained in a motor vehicle accident as the consequence of the fault of another person pursuant to applicable tort law.

Id.

The court must look to the definition of “insured” to determine whether Christine Smith was an “insured” under her mother’s policy.

The MVFRL provides the following definition of “insured”:

“Insured” — Any individual residing in the household of the named insured who is:
(1) a spouse or other relative of the named insured; or
(2) a minor in the custody of either the named insured or relative of the named insured.

MVFRL § 1705(f). Christine Smith was a relative of June Smith, the named insured. However, in order to be deemed an “insured,” and thus bound by the limited tort selection in her mother’s policy, Christine Smith must have been “residing in the household” of her mother. See id. The MVFRL does not provide a definition for “residing” or “resident.” However, June Smith’s policy defines “resident relative” as a relative who “resides primarily” with the named insured. See def. br. at 5. Because the MVFRL provides no statutory definition of “resident,” the court must apply the common law definition of resident as applied to interpreting that term in an automobile insurance policy. As more fully set forth below, the court concludes that June Smith has failed to adduce evidence sufficient to demonstrate the existence of a genuine issue of material fact as to whether Christine Smith resided in the household of June Smith at the time of the accident and was therefore bound by the limited tort election in her mother’s policy.

III. Determination of Residency

A. Relevant Time

The common-law definition of “resident,” as the word is used in automobile insurance contracts, depends on where the person physically resides at the time of the accident, not where the person has resided in the past or intends to reside in the future. See Amica Mut. Ins. Co. v. Donegal Mut. Ins. Co., 545 A.2d 343, 346 (Pa. Super. 1988).

“The Courts of this Commonwealth have historically recognized the classical definitions of the words domicile and residence. Domicile being that place where a man has his true, fixed and permanent home and principal establishment, and to which whenever he is absent he has the intention of returning. Residence being a factual place of abode. Living in a particular place, requiring only physical presence.”

Id. (quoting Krager v. Foremost Ins. Co., 450 A.2d 736, 737-38 (Pa. Super. 1982)) (insurance policy covering “residents” of the named insured’s household did not cover his daughter, although she had lived with her father in the past and intended to move back in with him in the immediate future, because, at the time of the accident, she had lived with her mother for the previous ten months and had spent only occasional nights during that time at her father’s house); accord St. Paul Fire & Marine Ins. Co. v. Lewis, 935 F.3d 1428, 1431-32 (3d Cir. 1991) (insurance policy covering relatives “living with” the named insured did not cover his adult son, even though the son had lived with his parents until one month before the accident and still considered their home to be “his home,” because, at the time of the accident, the son had moved into his own apartment and was no longer living at his parents’ home). The St. Paul court stated, “While it is true that the insurance policy does not explicitly state that a party must live with the insured at the time of the accident, we cannot interpret it to mean otherwise.” 935 F.2d at 1433.

Based on these authorities, the court must determine Christine Smith’s residency based on where she was physically residing at the time of her accident. The court may not consider the facts that she had lived in her mother’s home for many years of her life or that she believed she might move back in with her mother at some time in the future.

B. Nature of Contact with Named Insured’s Household

Under the common law definition of residency, a person is a “resident” of a named insured’s household only if the person has spent a significant amount of time at the named insured’s home on a regular basis during the time leading up to the accident; occasional and “sporadic” visits are insufficient to establish residency. See Arnica Mut. Ins. Co. v. Donegal Mut. Ins. Co., 545 A.2d 343, 345-49 (Pa. Super. 1988) (insurance policy covering “residents” of the named insured’s household did not cover his daughter, because she had lived with her mother for ten months prior to the accident and, during that time, had spent only occasional nights at her father’s home); accord St. Paul Fire & Marine Ins. Co. v. Lewis, 935 F.3d 1428, 1435 (3d Cir. 1991) (insurance policy covering relatives “living with” the named insured did not cover his adult son, because the son had moved into his own apartment one month before the accident and, during that time, had not slept at his parents’ home for a significant amount of time or on a regular basis).

Here, it is undisputed that Christine Smith moved out of her mother’s home one month before the accident and moved in with her friend Katie. There was no evidence that Christine was merely visiting Katie. Both parties testified that Christine moved out because she had argued with her mother and that she was looking for a job and an apartment so that she could live on her own. It is undisputed that after Christine moved out, she did not sleep at her mother’s house again before her accident. The evidence conclusively established that during the period leading up to the accident, Christine was living with Katie and not sleeping at her mother’s home at all, let alone for a significant amount of time or on a regular basis. Thus, based on the authorities cited above, Christine was not a resident of her mother’s home for purposes of her mother’s automobile insurance policy.

C. Less Personal Contacts as Basis for Residence

June Smith argues that a finding of residency could be based on Christine’s less personal contacts with her mother’s home after she moved out, specifically, the facts that (1) she kept some personal belongings in the bedroom at her mother’s home where she had previously slept; (2) she periodically stopped by her mother’s house to pick up her mail; (3) she did not change her mailing address with the Post Office; (4) she did not change the address appearing on her driver’s license; and (5) her mother’s address was listed as her address in the hospital records documenting her admission to the emergency room on the night of the accident. See def. br. at 9-12. We disagree.

The cases cited above expressly held that contacts such as these are insufficient to confer residency status. See Amica, 545 A.2d at 345 (daughter was not a resident of her father’s home, even though she received mail there and kept personal possessions there, including one or two closets full of clothes, approximately forty pairs of shoes, cosmetics, books, stuffed animals, tennis equipment, and a pet rabbit); accord St. Paul, 935 F.2d at 1430 (son was not a resident of his parents’ home, even though he regularly visited their home to eat meals and celebrate the holidays, kept a room and personal belongings there, received mail there, and listed his parents’ address as his address on his driver’s license, pilot’s license, banking records, tax returns, and the hospital admission forms on the night of the accident). The St. Paul court stated, “[The named insured’s son] did not sleep at his parents’ or take his meals there with any regularity. The fact that [he] stored personal possessions at his parents’ condominium and used their address for certain purposes does not replace personal contact.” 935 F.2d at 1433. The Amica court stated: “The fact that [the named insured’s daughter] kept numerous personal items at her father’s house does not compel a conclusion that she resided there as a matter of physical fact. Rather, it lends support to the conclusion that she had lived there and that she intended to live there again.”) (emphasis added)).

The above-cited authorities make clear that continuing contacts such as those present here are insufficient, as a matter of law, to support a finding of residency. Thus, the court holds that June Smith has failed to adduce facts sufficient to demonstrate the existence of a genuine issue of material fact as to whether Christine was a resident of her mother’s home at the time of the accident. Because such a finding is essential to June Smith’s affirmative defense that Christine Smith is bound by her mother’s election of the limited tort option in her insurance policy, Christine Smith is entitled to judgment as a matter of law on the affirmative defense.

Wherefore, we enter the following:

ORDER OF COURT

And now, this 11th day of October, 2013, having considered plaintiff Christine Smith’s “Motion for Partial Summary Judgment on Tort Status,” the response thereto of defendant June Smith, and the briefs and arguments thereon, it is hereby ordered that plaintiff’s motion is granted. It is further decreed that Christine Smith is not an insured under June Smith’s automobile insurance policy and therefore is not bound by June Smith’s election of the limited tort option in the policy.

      . Although this court is not bound by federal court opinions interpreting Pennsylvania law, we may consider federal cases as persuasive authority. See Cambria-Stoltz Enter. v. TNT Invs., 747 A.2d 947, 952 (Pa. Super. 2000).

      . June Smith relies on a case in which the court held that a husband was a resident of his estranged wife’s home even though he had moved out of the home six weeks prior to the accident. See def. br. at 6 (citing State Farm Automobile Ins. Co. v. Hill, 151 P.L.J. 24 (C.P. Allegheny Co. 2003)). However, the Hill case is not binding on this court and is inapposite to the facts presented here. June Smith acknowledges that the Hill court determined that the husband, who presumably shared ownership of the home, was in the process of reconciling with his wife and was remaining absent only for the purpose of treating his depression. See id. at 7. By contrast, Christine Smith did not leave her mother’s home for a specific purpose but moved out. We note that the St. Paul court held that cases involving married couples turn on special facts intrinsic to the marital relationship and therefore do not apply to other types of relatives. See 935 F.2d at 1432 (“Whether or not two individuals live together as husband and wife focuses on factors that are completely irrelevant to determining whether other relatives live together.”).

      . June Smith argues that because the policy defines “resident relative” as a person “residing primarily” with the named insured, the word “primarily” is a “word of refinement” that expands the definition of residency from the time of the accident to the entire course of Christine’s life and therefore compels the court to view Christine’s mother’s home as her “primary” home, because she had spent more time there and possibly intended to move back there. See def. br. at 10-11. There is no legal or factual basis for this expansive reading of the definition. June Smith has cited no authority in support of such a reading, and the common understanding of the words is consistent with the cases cited above. Christine Smith was “residing primarily” at Katie’s house at the time of the accident, because she was sleeping at Katie’s house on a daily basis and not sleeping at her mother’s house for á significant amount of time or on a regular basis. The cases cited by June Smith merely suggest only that if the policy definition includes a word of refinement such as “permanent” or “legal,” a court might determine that a military person or college student who was living far away but deemed to be a “permanent” or “legal” resident of his or her parent’s home might still be deemed a resident for purposes of the policy. See Amica, 545 A.2d at 346-47; St. Paul, 935 F.2d at 1432. No such facts are present here. In addition, to the extent that June Smith’s interpretation broadens the policy definition beyond the common-law definition of residence presupposed by the MVFRL and thereby restricts the full tort coverage rights provided in the MVFRL, it must be deemed contrary to the statute and unenforceable. See Prudential Prop. & Cas. Inc. Co. v. Colbert, 813 A.2d 747, 751 (Pa. 2002) (where policy purported to narrow the definition of “insured” by defining “resident relative” to include only relatives driving vehicles insured under the policy, the contractual definition impermissibly conflicted with the MVFRL and was unenforceable).


author: BARATIA., J.,

text:
    Doyle v. Doyle
    C.P. of Northampton County,
    No. C-48-CV-2013-810

      James L. Pfeiffer, for plaintiffs.

      Leticia J. Santiago, for defendant.
    October 4, 2013
   BARATIA., J.,

ORDER OF COURT

And now, this 4th day of October, 2013, upon consideration of the defendant, Andreas Emerick Dianna’s, preliminary objections to the complaint and plaintiffs, Mark Doyle and Laura Doyle’s, response thereto, it is hereby ordered that said preliminary objections are overruled.

STATEMENT OF REASONS

Facts and Procedural Flistory

On January 23, 2011, the defendant, Andreas Emerick Dianna, and plaintiff Mark Doyle (“Mr. Doyle”) were skiing at Blue Mountain Ski Area, Carbon County, Pennsylvania. According to the plaintiffs’ complaint, Mr. Doyle stopped on a ski slope called “challenge” in an area known as “falls,” which is allegedly an area highly congested with other skiers, to provide “aide and assistance to his son skiing with him.” Complaint at ¶¶ 6-7. The defendant was allegedly skiing abnormally fast, out-of-control, recklessly, and became airborne, “not allowing him to slow down, stop, and/or avoid impact with the plaintiff, Mark Doyle.” Id. at ¶¶ 8-9. As a result, Mr. Doyle allegedly suffered severe and disabling injuries.

On January 22, 2013, the plaintiffs filed a praecipe for a writ of summons. The defendant filed a rule to file complaint on June 7, 2013. On June 22, 2013, the plaintiffs filed their complaint. On August 27, 2013, the defendant filed preliminary objections to the plaintiffs’ complaint, seeking to strike portions of the complaint pursuant to Pa.R.C.P. 1028(a)(3) and 1028(a)(4) in order to eliminate all references to “recklessness” and punitive damages against the defendant. The defendant attached a supporting brief to these preliminary objections. On September 18, 2013, the plaintiffs filed an answer and new matter to the defendant’s preliminary objections, and a supporting brief.

This matter was placed on the September 24, 2013 argument list for a determination based on the briefs.

Legal Standard

In ruling on preliminary objections in the nature of a demurrer, the trial court may consider no testimony or evidence outside of the complaint. Mellon Bank, N.A. v. Fabinyi, 650 A.2d 895, 899 (Pa. Super. Ct. 1994) (citation omitted). In ruling upon a demurrer, we must accept as true all well-pleaded allegations and material facts averred in the complaint as well as all reasonable inferences deducible therefrom. Wurth v. City of Phila., 584 A.2d 403, 407 (Pa. Commw. Ct. 1990) (citation omitted). However, when ruling on preliminary objections, although a court must accept as true all clearly-pled facts, there is no such requirement as to a pleader’s legal conclusions or mere averments of law. Santiago v. Pa. Nat’l Mut. Cas. Ins. Co., 613 A.2d 1235, 1238-39 (Pa. Super. Ct. 1992) (citations omitted).

In the face of a demurrer, a complaint should only be dismissed in cases that are free and clear from doubt. Id. at 123 8. If any theory of law will support a claim, preliminary objections should not be sustained as any doubt should be resolved against the objecting party. Foster v. Peat Marwick Main & Co., 587 A.2d 382, 384 (Pa. Commw. Ct. 1991); Ambrose v. Cross Creek Condos., 602 A.2d 864, 869 (Pa. Super. Ct. 1992). In order to grant a demurrer, it must be certain from the face of the complaint that the claims will not support recovery under any legal theory. Mellon Bank, 650 A.2d at 899; Eckell v. Wilson, 597 A.2d 696, 698 (Pa. Super. Ct. 1991), appeal denied, 607 A.2d 253 (Pa. 1992) (citations omitted).

Discussion

Recklessness generally does not give rise to a separate tort, but rather is thought to be subsumed into negligence under the Restatement (Second) of Torts § 500. See Archibald v. Kemble, 971 A.2d 513, 518-19 (Pa. Super. Ct. 2009). In Archibald, our Superior Court found:

Recklessness, or willfulness, or wantonness refers to a degree of care prosser describes as “aggravated negligence.” Nevertheless, they apply to conduct which is still, at essence, negligent, rather than actually intended to do harm, but which is so far from a proper state of mind that it is to be treated in many respects as if it were so intended.

Id. at 519 (citing W. Page Keeton et al., Prosser and Keeton on Torts § 34 (5th ed. 1984)).

Pennsylvania Rule of Civil Procedure 1019(b) provides: “Malice, intent, knowledge, and other conditions of the mind may be averred generally.” Pa.R.C.P. 1019(b). In Archibald, the Superior Court of Pennsylvania determined that wanton conduct may be averred generally. 971 A.2d at 519. Accordingly, “[b]ecause recklessness is also known as ‘wanton and willful misconduct,’ ‘recklessness’ is a condition of the mind that may be averred generally.” Id.

Here, the defendant argues in his preliminary objections that the plaintiffs lacked specificity in their complaint with regard to their use of the words “reckless” and “recklessness.” InPennsylvania, recklessness is acondition of the mind that may be averred generally. See Archibald, supra, at 519. We find these pleadings both sufficiently specific and legally sufficient under Rule 1028(a)(3) and 1028(a)(4) of the Pennsylvania Rules of Civil Procedure. As a result, the defendant’s preliminary objection to the use of the words “reckless” and recklessness” must be overruled, and we decline to strike those words from the complaint.

With regard to whether the plaintiffs have established a cause of action for the assessment of punitive damages against the defendant, we will generally discuss the analysis for punitive damages in Pennsylvania. The function of punitive damages in Pennsylvania is to deter. See Martin v. Johns-Manville Corp., 494 A.2d 1088, 1096 (Pa. 1985). Section 908(2) of the Restatement (Second) of Torts states: “Punitive damages may be awarded for conduct that is outrageous, because of the defendant’s evil motive or his reckless indifference to the rights of others.” See Chambers v. Montgomery, 192 A.2d 355, 358 (Pa. 1963). The Pennsylvania Supreme Court embraced this guideline in Feld v. Merriam, and found that “punitive damages must be based on conduct which is malicious, wanton, reckless, willful, or oppressive.” 485 A.2d 742, 747-48 (Pa. 1984).

In determining whether to impose punitive damages, a court should evaluate the state of mind of the actor. Id. at 748. Punitive damages “may not be awarded for misconduct which constitutes ordinary negligence such as inadvertence, mistake and errors of judgment.” McDaniel v. Merck, Sharp & Dohme, 533 A.2d 436, 447 (Pa. Super. Ct. 1987). Instead, the outrageous conduct “must show the actor’s evil motive or reckless indifference to the rights of others.” Hess v. Hess, 580 A.2d 357 (Pa. Super. Ct. 1990). As a result, “in deciding whether punitive damages should be assessed, the nature of the tortfeasor’s act itself, together with his motive, the relationship between the parties and all other attendant circumstances should be taken into account.” Martin, 494 A.2d at 1096.

In Martin, supra, a plurality opinion, the Pennsylvania Supreme Court analyzed Section 500 of the Restatement of Torts (Second) in determining which type of reckless conduct would justify the imposition of punitive damage. See id. at 1097;

Comment a to Section 500 describes two distinct types of reckless conduct which represent very different mental states: (1) where the actor knows, or has reason to know...of facts which create a high degree of risk of physical harm to another, and deliberately proceeds to act, or to fail to act, in conscious disregard of, or indifference to, that risk; and (2) where the actor has such knowledge, or reason to know of the facts, but does not realize or appreciate the high degree of risk involved, although a reasonable man in his position would do so.

Id.; see also SHV Coal, Inc. v. Continental Grain Co., 587 A.2d 702, 704 (Pa. 1991).

This distinction is important in determining what facts justify punitive damages. See Martin, 494 A.2d at 1097. Because the first type of reckless conduct described in Section 500 “demonstrates a higher degree of culpability than the second on the continuum of mental states which range from specific intent to ordinary negligence,” only the first type of reckless conduct described is sufficient to create a jury question on the issue of punitive damages under Pennsylvania law. Id. As a result, “an appreciation of the risk is a necessary element of the mental state required for the imposition of [punitive] damages.” Hutchison ex rel. Hutchison v. Luddy, 870 A.2d 766, 772 (Pa. 2005).

In Pennsylvania, therefore, “[a] punitive damages claim must be supported by evidence sufficient to establish that (1) a defendant had a subjective appreciation of the risk of harm to which the plaintiff was exposed and that (2) he acted, or failed to act, as the case may be, in conscious disregard of that risk.” Id. (citing Martin, supra, at 1097-98); see also Daniel v. Wyeth Pharm., Inc., 15 A.3d 909 (Pa. Super. Ct. 2011). Moreover, punitive damages “are not justified where the defendant’s mental state rises to no more than gross negligence.” SHV Coal, Inc., 587 A.2d at 705.

In Hughes v. Seven Springs Farm, Inc., the Supreme Court of Pennsylvania held that the plaintiff skier had assumed the risk of skiing when she was injured while moving toward the ski lift at the bottom of the ski slope. 762 A.2d 339, 345. The court found that “the risk of colliding with another skier is one of the common, frequent and expected risks inherent in downhill skiing.” Id. at 344. The court also referred to the Skier’s Responsibility Code, which was promulgated by the National Ski Area Association, in determining whether the plaintiff skier had assumed the risk. Id. at 345.

In the instant case, the plaintiffs have averred facts in their complaint that, if true, are sufficient to justify the imposition of punitive damages. The plaintiffs allege that the defendant knew he was skiing in an area that “is generally highly congested...with other skiers.” Complaint at ¶ 3. The plaintiffs further aver that the defendant was (a) skiing at an abnormally high rate of speed, (b) jumping and/ or becoming airborne “rendering himself completely out-of-control and unable to change his course of direction,” and (c) that he knew that he would not be able to stop in an emergency situation due to the conditions of the area. Id. at ¶ 9.

These allegations suggest that the defendant knew, or should have known, of facts that create an abnormally high degree of risk of physical harm to others. See Martin, supra, at 1097-98. Further, knowledge of the National Ski Patrol’s Responsibility Code arguably increases the degree of appreciation of the risks involved. See Hughes, supra, at 345; see also complaint at ¶ 9(h). As these alleged facts demonstrate a higher degree of culpability for recklessness, they are sufficient to create a question of fact as to punitive damages under Pennsylvania law. We decline to strike references to punitive damages against the defendant in the complaint, as we find the plaintiffs’ pleadings both sufficiently specific and legally sufficient.

Therefore, the defendant’s preliminary objections are hereby overruled.


author: BARATIA, J.,

text:
    Street v. First Student, Inc.

      C.P. of Northampton County,
    NO C-48-CV-2011-8897

      Joseph P. Lenahan, for plaintiffs.

      Paul Troy and Ralph J. Bellafatto, for defendants.
    October 8, 2013
   BARATIA, J.,

ORDER OF COURT

And now, this day of October, 2013, upon consideration of defendants, First Student, Inc. and David R Quier, Jr. as administrator of the estate of Kelly A. Quier, deceased’s, preliminary objections to the amended complaint, it is hereby ordered the defendants’ preliminary objections in the nature of a demurrer with regard to allegations of punitive damages are sustained in part and overruled in part. As the plaintiffs have failed to allege sufficient facts in their amended complaint to justify the imposition of punitive damages against defendant First Student, any demands for punitive damages against defendant First Student in count III A of the amended complaint are hereby dismissed with prejudice.

It is further ordered that the defendants’ preliminary objections in the nature of a demurrer with regard to count III B of the amended complaint are overruled.

STATEMENT OF REASONS

Facts and Procedural History

The instant matter arose as a result of a severe motor vehicle collision that occurred on May 31, 2011. Kelly A. Quier drove a school van for defendant First Student, Inc. Kelly A. Quier had only one passenger on the day of the collision: a child, the daughter of plaintiffs Patricia Wetzel and John Wetzel. Kelly A. Quier’s van collided with plaintiff Richard Street’s vehicle, which was traveling in the opposite direction, when she crossed the double yellow lines into the opposing traffic’s lane. Kelly A. Quier died as a result of this collision. All of the plaintiffs allegedly sustained bodily and/or pecuniary injuries as a result of the vehicle collision.

Plaintiffs Richard Street and Mercedes Street commenced this action by filing a praecipe for writ of summons on September 14, 2011, naming defendant First Student, Inc. (“First Student”) as the sole defendant. On February 3, 2012, plaintiffs Richard Street and Mercedes Street filed a complaint against defendant First Student and defendant David P. Quier, Jr. as administrator of the estate of Kelly A. Quier (hereinafter collectively referred to as “decedent/defendant Quier”). The defendant filed preliminary objections to the complaint on February 20, 2012, seeking to strike all allegations of recklessness as well as count III of the complaint. In response to the preliminary objections, the plaintiffs agreed to a stipulation and tolling agreement, whereby the plaintiffs withdrew their claims for punitive damages and for negligent hiring/supervision without prejudice, subject to subsequent discovery. On April 23, 2012, we approved of this stipulation and tolling agreement.

On January 14, 2013, plaintiffs Patricia Wetzel and John Wetzel, individually and as natural parents of R.W., a minor, filed a complaint against defendant First Student and decedent/defendant Quier. On January 25, 2013, the above-captioned actions were consolidated for the purposes of discovery only.

On May 15, 2013, this court granted plaintiffs Richard Street and Mercedes Street’s motion to amend complaint. On May 17, 2013, this court approved of the parties’ stipulation to file amended complaint under Seal. Plaintiffs Richard Street and Mercedes Street subsequently filed their amended complaint under seal.

On June 10, 2013, the defendants filed preliminary objections to the plaintiff’s amended complaint, and an accompanying brief. The defendants made three objections: (1) motion to strike all allegations related to improperly obtained medical records; (2) motion to strike all allegations of recklessness; and (3) motion to strike count III B from the amended complaint (negligent hiring/ supervision). On August 22, 2013, plaintiffs Richard Street and Mercedes Street filed a memorandum of law in opposition to defendants’ preliminary objections to plaintiffs’ amended complaint, On September 12, 2013, plaintiffs Patricia Wetzel and John Wetzel filed plaintiffs’ brief in opposition to defendants ’ preliminary obj ections to plaintiffs’ amended complaint, in which they adopted the Street plaintiffs’ brief and joined in all of their arguments.

This matter was placed on the September 3, 2013 argument list for a determination based on oral argument and briefs. At the oral argument, the defendants stated their intention to withdraw their first preliminary objection; as such, we decline to rule on the defendants’ motion to strike all allegations related to improperly obtained medical records. The plaintiffs also agreed to voluntarily strike any reference to decedent/defendant Quier’s alleged cellphone usage in their amended complaint, as that theory was debunked during discovery.

Legal Standard

In ruling on preliminary objections in the nature of a demurrer, the trial court may consider no testimony or evidence outside of the complaint. Mellon Bank, N.A. v. Fabinyi, 650 A.2d 895, 899 (Pa. Super. Ct. 1994) (citation omitted). In ruling upon a demurrer, we must accept as true all well-pleaded allegations and material facts averred in the complaint as well as all reasonable inferences deducibletherefrom. Wurth v. City of Phila., 584 A.2d 403, 407 (Pa. Commw. Ct. 1990) (citation omitted). However, when ruling on preliminary objections, although a court must accept as true all clearly-pled facts, there is no such requirement as to a pleader’s legal conclusions or mere averments of law. Santiago v. Pa. Nat’l Mut. Cas. Ins. Co., 613 A.2d 1235, 1238-39 (Pa. Super. Ct.1992) (citations omitted).

In the face of a demurrer, a complaint should only be dismissed in cases that are free and clear from doubt. Id. at 1238. If any theory of law will support a claim, preliminary objections should not be sustained as any doubt should be resolved against the objecting party. Foster v. Peat Marwick Main & Co., 587 A.2d 382, 384 (Pa. Commw. Ct. 1991); Ambrose v. Cross Creek Condos., 602 A.2d 864, 869 (Pa. Super. Ct. 1992). In order to grant a demurrer, it must be certain from the face of the complaint that the claims will not support recovery under any legal theory. Mellon Bank, 650 A.2d at 899; Eckell v. Wilson, 597 A.2d 696, 698 (Pa. Super. Ct. 1991), appeal denied, 607 A.2d 253 (Pa. 1992) (citations omitted).

Discussion

A. Motion to Strike All Allegations of Recklessness

This preliminary objection is actually an attack on count II, in which the plaintiffs seek punitive damages against decedent/defendant Quier, alleging reckless, willful and wanton conduct.

The function of punitive damages in Pennsylvania is to deter and punish extreme behavior that is outrageous because of a defendant’s evil motive or reckless indifference to the rights of others. See Chambers v. Montgomery, 192 A.2d 355, 358 (Pa. 1963); Martin v. Johns-Manville Corp., 494 A.2d 1088, 1096 (Pa. 1985); Section 908(2) of the Restatement (Second) of Torts. The Pennsylvania Supreme Court embraced this guideline in Feld v. Merriam, and found that “punitive damages must be based on conduct which is malicious, wanton, reckless, willful, or oppressive.” 485 A.2d 742, 747-48 (Pa. 1984).

In determining whether to impose punitive damages, a court should evaluate the state of mind of the actor. Id. at 748. Punitive damages “may not be awarded for misconduct which constitutes ordinary negligence such as inadvertence, mistake and errors of judgment.” McDaniel v. Merck, Sharp & Dohme, 533 A.2d 436, 447 (Pa. Super. Ct. 1987). Instead, the outrageous conduct “must show the actor’s evil motive or reckless indifference to the rights of others.” Hess v. Hess, 580 A.2d 357 (Pa. Super. Ct. 1990). As a result, “in deciding whether punitive damages should be assessed, the nature of the tortfeasor’s act itself, together with his motive, the relationship between the parties and all other attendant circumstances should be taken into account.” Martin, 494 A.2d at 1096.

In Martin, supra, the Pennsylvania Supreme Court analyzed Section 500 of the Restatement of Torts (Second) in determining which type of reckless conduct would justify the imposition of punitive damage:

Comment a to Section 500 describes two distinct types of reckless conduct which represent very different mental states: (1) where the actor knows, or has reason to know...of facts which create a high degree of risk of physical harm to another, and deliberately proceeds to act, or to fail to act, in conscious disregard of, or indifference to, that risk; and (2) where the actor has such knowledge or reason to know of the facts, but does not realize or appreciate the high degree of risk involved, although a reasonable man in his position would do so.

Id. at 1097.

The distinction between the first and second type of reckless conduct is critical in determining what facts justify punitive damages, because the first type of reckless conduct described in Section 500 “demonstrates a higher degree of culpability than the second on the continuum of mental states which range from specific intent to ordinary negligence,” only the first type of reckless conduct described is sufficient to create a jury question on the issue of punitive damages under Pennsylvania law. Id. As a result, “an appreciation of the risk is a necessary element of the mental state required for the imposition of [punitive] damages.” Hutchison ex rel. Hutchison v. Luddy, 870 A.2d 766, 772 (Pa. 2005).

In Pennsylvania, therefore, “[a] punitive damages claim must be supported by evidence sufficient to establish that (1) a defendant had a subjective appreciation of the risk of harm to which the plaintiff was exposed and that (2) he acted, or failed to act, as the case may be, in conscious disregard of that risk.” Id. (citing Martin, supra, at 1097-98). Moreover, punitive damages “are not justified where the defendant’s mental state rises to no more than gross negligence.” SHV Coal, Inc. v. Continental Grain Co., 587 A.2d 702 (Pa. 1991). Finally, “there is no per se prohibition against imposing such punitive damages against an estate.” G.J.D. by G.J.D. v. Johnson, 713 A.2d 1127 (Pa. 1998).

The plaintiffs seek punitive damages against both of the defendants, separately, in their amended complaint. In paragraph 48, the plaintiffs aver that decedent/defendant Quier “manifested reckless indifference to the safety of her student passengers and other motorists” by “using medications which impaired her physically and mentally, and which likely accounted for her sudden action of leaving her own lane of travel and driving directly into the path of oncoming traffic” and failing to disclose health conditions that would have disqualified her from driving. This averment meets the standard for reckless indifference because the plaintiffs allege that decedent/defendant Quier knew, or should have known, of the dangers of driving with certain health conditions or on certain medications, but acted in conscious disregard of this knowledge by allegedly failing to disclose disqualifying health conditions and medications. With regard to claims against decedent/ defendant Quier, therefore, the plaintiffs aver sufficient facts to justify punitive damages.

The plaintiffs separately seek punitive damages against defendant First Student in paragraph 56 of their amended complaint, which alleges vicarious liability, where plaintiffs allege that “Defendant First [Student] is also vicariously liable for all punitive damages assessed against its employee, Decedent/Defendant Quier, for the reasons set forth above, by operation of Shiner v. Moriarty, 706 A.2d 1228 (Pa. Super. Ct. 1998).” As such, the plaintiffs suggest that they are entitled to punitive damages against defendant First Student solely on the basis of vicarious liability. In fact, plaintiffs did not allege separate facts supporting punitive damages against defendant First Student.

The Shiner case relied upon by plaintiffs to support its claim against both defendants involved a business relationship between marital couples which disintegrated and spawned significant litigation. The Shiners eventually prevailed in the underlying litigation brought by their co-partners, Mr. and Mrs. Moriarty. Apparently, the Moriartys pursued several baseless and wholly unreasonable legal theories against the Shiners. After the Shiners prevailed, they brought claims for abuse of process and punitive damages against Mr. and Mrs. Moriarty and their legal counsel. Apparently, based on the record, Mr. Moriarty controlled and made the decisions related to the litigation for both he and his wife.

The Shiner court found it possible that “punitive damages may be awarded on the basis of vicarious liability.” Id. Further, the court noted that there is no requirement in Pennsylvania “that an agent commit a tortious act at the direction of his principal, nor must the principal ratify the act, in order for punitive damages to be imposed on him.” Id. However, the court tempered its holding by stating “not every agency relationship...can form the basis of vicarious liability of the principal for the acts of the agent.” Id. Interestingly, the court held that the defendant-wife was not vicariously liable for punitive damages because she did not exercise control over her husband’s activities. Id. As such, Shiner stands for the legal proposition that where an agency relationship exists, vicarious liability for punitive damages is not automatic, and the type of agency relationship and the control exercised by the principal over the agent are critical factors in determining whether vicarious liability for punitive damages follows.

In Fitzgerald v. McCutcheon, the Superior Court of Pennsylvania discussed vicarious liability in the employment context. 410 A.2d 1270 (Pa. Super. Ct. 1979). In the employment context, “a master is liable for the acts of his servant which are committed during the course of and within the scope of the servant’s employment.” Id. at 1271. The court cited Section 228 of the Restatement (Second) of Agency, which defines conduct within the scope of employment as follows:

(1) Conduct of a servant is within the scope of employment if, but only if:
(a) it is of the kind he is employed to perform;
(b) it occurs substantially within the authorized time and space limits;
(c) it is actuated, at least in part, by a purpose to serve the master, and
(d) if force is intentionally used by the servant against another, the use of force is not unexpectable [sic] by the master.
(2) Conduct of a servant is not within the scope of employment if it is different in kind from that authorized, far beyond the authorized time or space limits, or too little actuated by a purpose to serve the master.

Id. at 1272; Restatement (Second) of Agency § 228.

Here, plaintiffs allege that the reckless actions of the agent-decedent/defendant Quier — is that she falsified and/or left out information regarding her health and medications in her employment forms given to the principal — her employer, defendant First Student. As such, plaintiffs aver that defendant Quier lied or misrepresented her condition to defendant First Student and failed to comply with defendant First Student’s policies. See amended complaint at ¶ 60. Clearly plaintiffs allegations of reckless, willful, wanton and outrageous conduct were committed outside of Kelly Quier’s scope of employment, unknown to the employer and not within the control of the employer. As such, defendant First Student should not be held vicariously liable for punitive damages based upon the conduct of decedent/defendant Quier.

Finally, we also note that defendant First Student lacked the requisite mental state to independently justify punitive damages. In paragraph 30 of the amended complaint, the plaintiffs allege that “Decedent/Defendant Quier willfully failed to disclose her health conditions to her employer. She also, in violation of company policy, failed to notify First Student of the prescription and non-prescription medications she was regularly using on or before the date of this collision.” Defendant First Student cannot be found have acted with “reckless indifference,” because it acted in accordance with the information provided to it by decedent/defendant Quier in implementing its policies and lacked the requisite mental state to justify punitive damages.

Therefore, the defendants’ preliminary objections in the nature of a demurrer with regard to allegations punitive damages are sustained in part and overruled in part. As the plaintiffs have failed to allege sufficient facts in their amended complaint to justify the imposition of punitive damages against defendant First Student, any demands for punitive damages against defendant First Student in count III A of the amended complaint are hereby dismissed with prejudice. The claim for punitive damages brought against decedent/defendant Quier remains viable.

B. Direct Corporate Liability: Count III B of the Amended Complaint

The defendants argue in their preliminary objections that count III B of the amended complaint regarding negligent hiring/supervision should be dismissed with prejudice because defendant First Student already acknowledged that it would be liable for any damages proven at trial that are determined to be caused by the negligence of its employee, defendant Quier, under the doctrine of respondeat superior. The defendants seem to assert that claims under respondeat superior and direct corporate negligence cannot be brought together due to a high danger of prejudice, under Holben v. Midwest Emery Freight System, Inc. and its progeny. 525 F. Supp. 1224 (W.D. Pa. 1981). In opposition, the plaintiffs argue that (1) they asserted the two causes of action against defendant First Student in the alternative, and (2) the holding in Holben is clearly distinguishable from the case at hand.

Pennsylvania case law supports presenting direct and vicarious theories of liability in a complaint in the alternative. In Scampone v. Highland Park Care Center, the Pennsylvania Supreme Court found that the theories of direct liability and vicarious liability “are grounded in distinct policies and serve complementary purposes in the law of torts, with the goal of fully compensating a victim of negligence in an appropriate case.” 57 A.3d 582, 593 (Pa. 2012). Accordingly, direct liability is “when the plaintiff seeks to hold the defendant responsible for harm the defendant caused by the breach of a duty owing directly to the plaintiff,” while “vicarious liability is a policy-based allocation of risk.” Id. at 597. Further, the Pennsylvania Supreme Court “has also recognized that a corporation may also owe duties of care directly to a plaintiff, separate from those of its individual agents, such as duties to maintain safe facilities, and to hire and oversee competent staff.” Id.

Generally, “to state a cause of action for negligence, a plaintiff must allege facts which establish the breach of a legally recognized duty or obligation of the defendant that is causally connected to actual damages suffered by the plaintiff.” Id. at 596. Pennsylvania has adopted section 213 of the Restatement of Agency (Second), which states:

A person conducting an activity through servants or other agents is subject to liability for harm resulting from his conduct if he is negligent or reckless:
(b) in the employment of improper persons or instrumentalities in work involving risk of harm to others; or
(c) in the supervision of the activity; or
(d) in permitting, or failing to prevent, negligent or other tortious conduct by persons, whether or not his servants or agents, upon premises or with instrumentalities under his control.

Restatement (Second) of Agency § 213; see also Dempsey v. Walso Bureau, Inc., 246 A.2d 418, 421 (Pa. 1968); see also Heller v. Patwil Homes, Inc., 713 A.2d 105, 107 (Pa. Super. Ct. 1998).

Additionally, holding an employer liable directly for the wrongful acts of its negligently-hired employee “comports with the general tort principles of negligence long recognized in this jurisdiction.” Heller, 713 A.2d at 107. Unlike the doctrine of respondeat superior, “where the wrongful conduct of the employee is attributable to the master vicariously,” direct liability provides “a remedy to injured third parties who would otherwise be foreclosed from recovery under the master-servant doctrine because the wrongful acts of employees in these cases are likely to be outside the scope of employment or not in furtherance of the master’s business.” Id. As a result, a plaintiff can include causes of action under the theories of both vicarious liability and direct liability in the alternative.

Defendant First Student relies upon Holben and its federal progeny to support its claim that plaintiffs should be precluded from advancing claims for vicarious liability and direct liability under two, separate and independent theories: respondent superior and negligent hiring/ supervision/entrustment. However, the federal cases cited by the defendant are easily distinguishable on the facts and, more importantly, do not support the legal theory advanced by the defendant. Finally, the theory advanced by the defendant is at odds with recent holdings by the Pennsylvania Supreme Court, which has specifically held that the plaintiffs may bring these alternative causes of action, pleading both vicarious liability and direct liability in the alternative.

Therefore, the defendants’ preliminary objections in the nature of a demurrer with regard to count III B of the amended complaint are overruled.

      . During the oral arguments, the plaintiffs seemed to suggest that defendant First Student should have known that decedent/defendant Quier had health problems, especially sleep apnea, due to her weight. The plaintiffs failed to allege, however, that defendant First Student’s policies fell short of state standards. As such, this allegation does not rise to the level of recklessness required to justify punitive damages.

      . For instance, the Holben court denied the defendant’s motion for summary judgment to preclude alternative theories of negligence against the corporate defendant, and instead bifurcated the factual issues to avoid any prejudice at trial that might result from the contemporaneous introduction evidence for the alternative theories. See 525 F. Supp. at 1225.


author: TUNNELL, J.,

text:
    Baranowske v. J.D. Wood & Sons

      C.P. of Chester County,
    No. 2012-04925-TT

      Thaddeus J. Bartkowski, for plaintiff.

      James D. Palmer, for defendants.
    October 21, 2013
   TUNNELL, J.,

Plaintiff has filed a motion for delay damages pursuant to Pa. R.C.P. 238 requesting an award of prejudgment interest in the amount of $682.56 for the period from March 14, 2012 (one year after the service of original process upon defendant) to September 26, 2013 (the date of verdict). Plaintiff seeks to have the verdict molded to the aggregate sum of $14,915.24 to include those delay damages. (Plaintiff’s Motion for Delay Damages, at ¶7). Defendants oppose plaintiff’s motion and argue that plaintiff is not entitled to the requested delay damages because (1) defendants made a settlement offer in excess of 125% of the final verdict pursuant to Pa. R.C. P. 238(b)(l)(i) prior to any accrual of delay damages and (2) any delay damages must exclude the period of time during which plaintiff delayed the trial pursuant to Pa. R.C.P. 238(b)(l)(ii). This court finds that plaintiff is entitled to delay damages only in the amount of $282.20.

I. FACTUAL BACKGROUND

Plaintiff initiated this personal injury action in the Philadelphia Court of Common Pleas (the “Philadelphia Action”) and served defendants with the complaint on March 14, 2011. Thereafter, defendants filed preliminary objections alleging that venue was improper. On June 30, 2011, the Philadelphia trial court sustained defendants’ preliminary objections and ordered the matter to be transferred to Chester County upon payment of costs by plaintiff. See order, dated June 30, 2011 (Phila. Ct. Com. PI. docket no. 2011-04390). On April 29, 2012 plaintiff filed a Praecipe to Transfer the Philadelphia Action and paid the required transfer fee. The case was docketed in Chester County on May 15,2012. At the outset of the case and up until the trial date, defendants made four settlement offers to plaintiff, which he rejected. The case went to trial on September 24, 2013. On September 26, 2013, a jury rendered a verdict in favor of plaintiff in the amount of $14,232.68. On October 4,2013, plaintiff filed the present motion. Defendants filed their response in opposition on October 11, 2013.

II. LEGAL ANALYSIS

A. Delay Damages Are Permitted in Pennsylvania Pursuant to Pa. R.C.P. 238.

A prevailing plaintiff in a personal injury action may recover prejudgment interest from one year after the date that original process was first served up to the date of the jury award. Pa. R.C.P. 238(a)( 1 )-(2); see also Kameroski v. Pennsylvania Power & Light Co., 2005 WL 4685052 at *5 (Lacka. Co. 2005), aff’d., 905 A.2d 1054 (Pa. Super. 2006). Delay damages are calculated at a rate of interest “equal to the prime rate as listed in the first edition of The Wall Street Journal published for each calendar year for which the damages are awarded, plus one percent, not compounded.” Pa. R.C.P. 238(a)(3). The period of time for which delay damages may be calculated excludes any time period after which the defendant has made a written offer of settlement that otherwise meets the requirements of Rule 238(b). See Pa. R.C.P. 238(b)(1)-(3).

Rule 238 is designed to compensate the plaintiff for the delay in receiving money to which he is entitled, and to prevent a defendant from being unjustly enriched by retaining interest earned during the litigation process on what is essentially the plaintiff’s money. Costa v. Lauderdale Beach Hotel, 626 A.2d 566, 569 (Pa. 1993); Marlette v. State Farm Mut. Auto. Ins. Co., 10 A.3d 347, 351 (Pa. Super. 2010). Rule 23 8 also is intended to alleviate congestion in the courts by encouraging defendants to settle claims as soon as reasonably possible. Thompson v. T.G. Whipple Constr. Co., 985 A.2d 221, 223-224 (Pa. Super. 2009), app. denied, 986 A.2d 152 (Pa. 2009). Defendants may protect themselves from exposure to prejudgment interest by making a timely and reasonable offer of settlement in good faith. Marlette, supra; Thompson, 985 A.2d at 224. A defendant who opposes a motion for delay damages bears the burden of proving either that (1) the requisite written settlement offer has been made or (2) the plaintiff was responsible for specified periods during which the trial was delayed. Sopko v. Murray, 947 A.2d 1256, 1258 (Pa. Super. 2008); Shay v. Flight C Helicopter Servs., Inc., 822 A.2d 1, 20-21 (Pa. Super. 2003).

B. The Period for Calculating Plaintiff’s Delay Damages Began on March 14, 2012, One Year after the Date Original Process was Served.

Plaintiff initiated this personal injury action in the Philadelphia Court of Common Pleas and served defendants with the complaint on March 14,2011. After the Philadelphia trial court sustained defendants’ preliminary objections, plaintiff, though much delayed, transferred the action to Chester County and it was docketed on or about May 15, 2012. Plaintiff asserts that the period for delay damages began on March 14,2012, one year after service of the complaint in the Philadelphia Action. Defendants argue that the one year time period does not begin until May 15, 2012, when the action finally was docketed in Chester County.

Although plaintiff’s failure to timely transfer the Philadelphia Action impacts his right to delay damages as discussed below, this court finds that the proper starting point for delay damages is one year from the date original process was served upon defendants — March 14, 2012. The plain language of Rule 238 states “ [d] amages for delay shall be awarded for the period of time from a date one year after the date original process was first served....” Pa. R.C.P. 238(a)(2). The transfer of the Philadelphia Action to this court and the docketing thereof is not original process as contemplated by the plain language of the rule. Therefore, March 14, 2012 marks the period at which delay damages could begin to accrue in this case.

C. Plaintiffs’ Delay in Transferring the Action to Chester County Precludes the Imposition of Delay Damages for that Period of Time.

Defendants submit that months of pretrial delay were attributable solely to plaintiff’s improper filing of this matter in Philadelphia County and the subsequent delay in transferring the action and that this time should be excluded from the delay damages calculation. A defendant successfully opposes a motion for delay damages by demonstrating that the plaintiff was responsible for certain periods of time during which the trial was delayed. Pa. R.C.P. 238(b)(1)(ii). Rule 238(b)(1) states that “[t] he period of time for which damages for delay shall be calculated...shall exclude the period of time...(ii) during which the plaintiff caused delay of the trial.” See Tindall v. Friedman, 970 A.2d 1159, 1178 (Pa. Super. 2009)(holding under Rule 238, the reason for the delay is not pertinent, the sole issue is whether plaintiff caused the delay); see also Sopko v. Murray, 947 A.2d 1256, 1260 (noting under Rule 238 not every procedural delay is relevant... only occurrences as actually caused delay of trial). After a review of the procedural history of this case, the court agrees with defendants in part and finds that plaintiff is precluded from recovering delay damages for the period of time he failed to transfer this case to Chester County.

The time this case spent on the docket in Philadelphia County must be divided into two periods in order to properly analyze what delay damages, if any, are appropriate. The first relevant period is the time from when the action was initiated and original process made (March 14, 2011) to the date of the order sustaining defendants’ preliminary objections (June 30,2011). The court finds that this period is relevant to the calculation of delay damages. Although a court ultimately determined venue to be improper, this court does not find that the issue of venue created the type of delay contemplated by Rule 238(b)(1)(ii). See Kennedy v. Bentley, 2010 Pa. D & C DEC. LEXIS 533(2010) (holding improper venue does not prevent imposition of delay damages). During this time, the matter did not remain stagnant and the parties certainly were assessing the merits of their cases, as evidenced by defendants’ early settlement offer of March, 2011, which plaintiff rejected. Therefore, the court’s conclusion that the proper start date for accrual of delay damages to begin is one year from March 14, 2011 stands.

The time period following the decision on defendants’ preliminary objections is a different story. Defendants are protected from the assessment of delay damages “where they can show that the conduct of the plaintiff through the course of litigation has delayed trial.” Schrock v. Albert Einstein Med. Ctr., Daroff Div., 589 A.2d 1103 (Pa. 1991). Here, plaintiff’s failure to transfer this action to Chester County certainly delayed the trial because it prevented the matter from being assigned to a judge and ultimately a trial schedule. It was the plaintiff’s burden alone to transfer the Philadelphia Action and he chose not to act for almost 10 months. Notably, defendants did not sit idly by and are now heard to complain. Rather, defendants filed a motion for non pros on April 23, 2012 and it was only with that threat did plaintiff finally chose to act. Defendants should not be penalized for plaintiff’s decision to sit by and let time run on while they chose not to prosecute their case and thus delayed the trial of this matter. Without the case being docketed and assigned to a judge, a trial could not be held. Therefore, the 46 days after the accrual period began that plaintiff waited to transfer the Philadelphia Action to this court is excluded from delay damages.

D. Defendants’ Settlement Offer of October 16, 2012 Precludes the Entry of Delay Damages After That Time Period Pursuant to Pa. R.C.P. 238(b)(l)(i).

Delay damages are recoverable for the period of time “one year after the date original process was first served in the action up to the date of the award,” excluding those periods of time after which a defendant made a written offer that complies with the requirements of Pa. R.C.P. 238. See e.g., Potochnick v. Perry, 861 A.2d 277, 286 (Pa. Super. 2004). Rule 238 (b)(1)(i) states:

(b)(1) The period of time for which damages for delay shall be calculated under subdivision (a)(2) shall exclude the period of time, if any,
(1) after the defendant made a written offer which complied with the requirements of subdivision (b)(2), provided that the plaintiff obtained a recovery which did not exceed the amount described in subdivision (b)(3),...

In describing the type of offer that qualifies to toll the imposition of delay damages, Pa. R.C.P. 238 provides:

(2) The written offer of settlement required by subdivision (b)(l)(i) shall contain an express clause continuing the offer in effect for at least ninety days or until commencement of trial, whichever occurs first, and shall either
(i) be in a specified sum with prompt cash payment, or
(3) The plaintiff’s recovery required by subdivision (b)(l)(i), whether by award, verdict or decision, exclusive of damages for delay, shall not be more than 125 percent of either the specified sum or the cost of the structured settlement plus any cash payment to the plaintiff.

The plaintiff received a verdict in his favor in the amount of $14,232.68. On October 16, 2012, defendants made a settlement offer of $12,500, which complied with the requirements of Pa. R.C.P. 238 (b)(2). The offer was (1) written, (2) contained an express clause continuing the offer for at least 90 days or until commencement of trial and (3) was for a specified sum. See plaintiff’s motion at ¶2, defendants’ response, at Ex. B. The verdict was not more than 125% of the October, 2012 settlement offer and thus the limitation on delay damages is appropriate. Pa. R.C.P. 238 (b)(3). After October 16,2012 the running of delay damages was tolled and any delay damages thereafter are excluded in this case. See Pa. R.C.P. 238, Explanatory Comment 2002, Subdivision b.

Therefore, plaintiff’s request to mold the verdict to include delay damages will be granted as follows:

Time Period Rule 238 Calculation Amount
March 14,2012-April 29, 2012 Excluded due to plaintiff’s delay $0
April 29, 2012-October 16, 2012 170 days x $1.66 ($14,232.68 x 4.25% = $604.89/365 days = $1.66/day) $282.20

Based upon the foregoing, the verdict of $14,232.68 will be molded to the sum of $14,514.88 to reflect delay damages totaling $282.20.

An appropriate order follows.

ORDER

And now, this 21st day of October, 2013, upon consideration of plaintiff’s Motion for Delay Damages and to Amend the Verdict Pursuant to Rule 238, and defendants’ opposition thereto, it is hereby ordered that the verdict in this matter in the amount of $14,232.68 be molded to the sum of $14,514.88 to reflect delay damages totaling $282.20.