author: MINORA, J.,

text:
    Davis v. Fidelity National Insurance Company

      Carl J. Gugliardo, for plaintiffs

      Lawrence A. Durkin, for defendant
    August, 15, 2013
   MINORA, J.,

I. INTRODUCTION AND PROCEDURAL POSTURE

Before the court is an insurance bad faith and breach of contract action arising out of a title insurance policy that was issued by defendant, Fidelity National Insurance Company, to plaintiffs, Richard and Maria Davis, on October 29, 2004. The insurance policy insured a parcel of property upon which plaintiffs proposed to build a residential development consisting of twelve townhouses comprised of three, four-unit townhouse buildings and 32 single family homes. The townhouses were to be built on a 1.86 acre triangular portion of the property. It was the ownership of this 1.86 acre piece of property that came into dispute and for which the title insurance claim was made.

The parties proceeded to a bench trial before this court on January 29, 30 and 31,2013. Both parties waived their right to a jury trial on the contract action and agreed that this court would serve as the fact-finder for both the bad faith and contract counts. The factual findings set forth below have been established by clear and convincing evidence and are based upon the testimony and evidence, which this court has found to be competent, credible, relevant and admissible in this case.

II. GENERAL FINDINGS OF FACT

(1) The defendant, through its authorized agent, Daniel Penetar, Esq., issued a title insurance policy to plaintiffs on October 29, 2004. Stip. Fact 1.

(2) The policy insured an approximate 15 acre parcel of land in Carbondale Twp., Lackawanna County, Pennsylvania. Stip. Fact 2.

(3) Daniel L. Penetar, Jr., Esquire, counter-signed the policy as the authorized agent of defendant and also served as counsel for plaintiffs with respect to the subject purchase of land. Stip. Fact 4.

(4) Plaintiffs planned to develop the 15 acre parcel of land for residential housing, in the nature of both one-half acre parcels for individual homes and a “garden section” containing three, four-unit townhouses all of which would be offered for sale to the public. Stip. Fact 3.

(5) The “garden section” containing the townhouses was to be developed on a 1.86 acre portion of the property. Stip. Fact 5.

(6) Prior to 2007, Mr. Davis purchased non-sealed construction plans for the townhouses and hired an engineering firm to draft plans and drawings for the subdivision of the development. Stip. Fact 6; Pltf. Exh. 25 — “HICKORY PLANS.”

(7) The size of each of the twelve townhouses was to be approximately 1,100 square feet, not including an indoor, single-car garage. N. T. Vol. I, p. 37-38.

(8) In 2007, plaintiff, Rick Davis, attended a Carbondale Twp. Zoning board meeting to request a zoning special exception that would accommodate the townhouse development. Stip. Fact 7.

(9) At the zoning hearing, a neighboring property owner, Louis Norella, objected on the basis that he was the proper owner of record of the 1.86 acre parcel. Stip. Fact. 8.

(10) At that time, the zoning board could not approve plaintiff’s request until it was determined who actually owned the disputed portion of the land. N.T. Vol. I, p.42.

(11) On October 15, 2007, Mr. Davis filed a title insurance claim with defendant as related to a possible defect in the title to the 1.86 acre parcel of land. Stip. Fact 9.

(12) Receipt of Mr. Davis’ claim was acknowledged by defendant by letter dated October 24, 2007. Pltf. Exh. 2, doc. No. 336.

(13) On November 8, 2007 defendant’s title agent, Daniel Penetar, Esquire, notified defendant that although he did perform a title search prior to issuing the Davis title policy, he did not include a search of the Norella chain of title. Once the dispute was brought to his attention he searched the Norella deed and it did appear to include the disputed piece of property. Pltf. Exh. 2, doc. No. 251.

(14) By letter dated December 13, 2007, defendant notified Mr. Davis that it was in the process of evaluating his claim and hoped to get back to him “shortly.” Pltf. Exh. 2, doc. No. 334.

(15) On December 10, 2008, Attorney Penetar again wrote to defendant and explained that he and the surveyor the defendant hired concluded that the disputed area is, and always has been, included in the Norella title. The same letter explained that the Davis’ source of title traced back to a 1963 quiet title action, which was defective due to lack of proper service upon the rightful land owner. Pltf. Exh. 2, doc. No. 253-254.

(16) On January 10, 2009, defendant claims representative, Joseph Rejent, noted that the surveyor concluded that the insured did not own all the land he thought he owned and that one of the parcels purchased by the insured “came out of a Quiet Title Action which now appears to be faulty.” Pltf. Exh. 2, doc. No. Oil.

(17) On June 18,2009, defendant completed its coverage investigation of the Davis claim. Defendant notified plaintiff that there were no relevant policy exceptions or exclusions; that it was accepting the Davis claim; and that they would contact Mr. Davis shortly about resolution of the claim. N. T. Vol. I, p. 45 and Pltf. Exh. 2, doc. No. 265.

(18) On September 15, 2009, defendant hired Michael Coughlin, Esquire to evaluate the merits of filing a quiet title Action. Discovery docs. 297-298; 220-221; 300; and 280-281.

(19) On Januaiy 20, 2010, defendant obtained a legal research memo related to its options to resolve the claim as well as the merits of a quiet title action. Stip. Fact 13.

(20) From March 2010 through October 2010, Mr. Davis repeatedly inquired into the status of his claim, however he did not receive a response from defendant. N.T. Vol. I, p. 51-56.

(21) Defendant obtained DIV appraisals on March 20, 2010. Defendant DIV appraisals.

(22) In July 2010, the defendant attempted to “negotiate a settlement” with the neighbor for the purchase of the 1.86 acres. Stip. Fact 15.

(23) Regarding the option to file a quiet title action to resolve the claim, defendant knew (and documented on April 28, 2010) that such an action would likely be defeated if defended because there existed a notice/service defect in an earlier 1963 quiet title action for the subject property. Stip. Fact 16.

(24) On August 27, 2010 defendant’s retained counsel, Michael Coughlin, Esquire, wrote the following to defendant claims attorney Benjamin Bartek:

“Ben, any word on this? The insured called me once again to find out how we intend to proceed. This claim has been hanging around for an extremely long time and I am concerned that the insured may opt to sue us for bad faith if we don’t take some action relatively soon.”

Stip. Fact 18.

(25) Mr. Davis hired David J. Tomaine, Esquire, and instructed Mr. Tomaine to give defendant a deadline for resolution of the claim. N.T. Vol. I., p. 57.

(26) On November 22, 2010, Mr. Tomaine called defendant’s retained counsel, Mr. Coughlin, to discuss status of the Davis claim. Stip. Fact 22.

(27) Mr. Coughlin had contact with defendant’s “operations” attorney, Keith Weller, on December 9,2010. Stip. Fact 23.

(28) The present suit was commenced on December 14, 2010. Stip. Fact 20.

(29) On December 13, 2010, the defendant placed the first payment authority for settlement or resolution of this claim. Stip. Fact 19.

(30) Mr. Weller contacted Raymond Abrams of defendant’s Omaha, Nebraska claims center on or about December 13, 2010. Stip. Fact 24.

(31) Mr. Abrams testified that the litigation that was attempting to be avoided was the quiet title action against Mr. Norella. Stip. Fact 25.

(32) On December 13, 2010 Mr. Abrams granted $25,000 settlement authority on this claim without a case assessment report (CAR) having been done. Stip. Fact 26.

(33) Generally, though not always, a CAR is required to be done before settlement authority may be placed on a file. Stip. Fact 27.

(34) Prior to December 13, 2010, no amount of settlement authority had been placed on the Davis claim. Stip. Fact 28.

(35) Defendant’s claims manual provides the following:
“Insurer’sResponsetoTenderofClaim;Investigation..
“Response by the insurer to the claimant should be timely. The claims administrator should follow the requirements of the applicable statutes and regulations regarding acknowledgment of receipt of an insured’s claim; completion of investigation; and notification of the title company’s decision regarding coverage. Some state regulatory schemes provide specific timelines, while others simply require that the insurer’s response occur in a reasonable time."

Stip. Fact 29.

(36) Defendant’s first written settlement offer to Mr. Norella (the property owner of record) was made on December 14,2010. Dec. 14,2010 letter from M. Coughlin to L. Norella.

(37) On December 14, 2010, plaintiff commenced the subject breach of contract and bad faith lawsuit. N.T. Vol. I, p. 59 and Complaint.

(38) On January 6, 2011, defendant tendered payment to plaintiffs in an amount equal to the $20,000 DIV; however, plaintiffs did not accept the payment as this suit had already been filed. Pltf. Exh. 5; D.T. 59:12 to 59:21.

(39) Plaintiffs’ claim was resolved with defendant agreeing to pay the owner of the disputed property $50,000.00 (fifty thousand dollars) and transfer title in plaintiffs’ names in August 2012. N.T. Vol. I, p. 64-65. Defendant also hired counsel to effectuate a subdivision approval of the property and a surveyor to prepare the necessary plans. R.T. 153:21 to 154:1; D.T. 64:18 to 65:3; testimony of George Broseman (“G.T.”) 102:7 to 102:18; 106:6 to 106:14.

(40) On November 7, 2012, the Carbondale Twp. Zoning Board granted plaintiffs’ request for special exception, in accordance with Carbondale Twp. zoning law, to construct three, four-unit townhouses on the parcel of property that is the basis of this lawsuit. Stip. Fact 35.

(41) No appeal of the November 7, 2012 special exception has been filed. Stip. Fact 36.

(42) Defendant’s title insurance policy provides that claims are resolved either by paying, or otherwise settling with, other parties for or in the name of an insured claimant, or by paying the loss to, or otherwise settling with, the insured claimant. Policy, Pltf. Exh. 1, ¶<5.

(43) Pursuant to the policy, defendant therefore had the option to (a) attempt to cure the title defect by filing a quiet title action, or negotiate with the Norellas to convey the 1.86 acre disputed parcel to the plaintiffs, or (b) pay the loss as defined by the policy, which is the lesser of the policy limits or the diminution in value (DIV) of the property as a result of the title defect. Policy, Pltf. Exh. 1, ¶6.

(44) Under the policy, “The liability of the Company shall not exceed the least of: (i) The Amount of Insurance stated in Schedule A; or, (ii) the difference between the value of the insured estate or interest as insured and the value of the insured estate or interest subject to the defect, lien or encumbrance insured against by [the Policy].” Policy, Pltf. Exh. 1, \7(a).

III. GENERAL CONCLUSIONS OF LAW

(A) LIABILITY

(1) In the present case, there were several known legal duties and fiduciary obligations recklessly disregarded by Fidelity, namely unreasonable delay in adjusting and resolving the claim, repeated violations of the Unfair Insurance Practices Act and Unfair Claims Practices Act, failure to adequately train and supervise its employees, failure to follow its own claims handling guidelines, failure to make a timely offer of settlement, and elevating its own interest above the interest of its insured, among other duties.

(2) As defined by Black’s Law Dictionary, bad faith occurs through an insurance company’s unfounded (though not necessarily fraudulent) refusal to provide coverage in violation of the duties of good faith and fair dealing owed to an insured. Terletsky v. Prudential Property and Cas. Ins. Co., 437 Pa. Super. 108, 124, 649 A.2d 680, 688 (1994); Black’s Law Dictionary (9th ed. 2009).

(3) In atypical §8371 bad faith action against an insurer, plaintiffs must be able to demonstrate both elements of a two-part test by “clear and convincing” evidence. The test is: (1) the insurer lacked a reasonable basis for denying coverage; and (2) the insurer knew or recklessly disregarded its lack of a reasonable basis. Adamski, 738 A.2d at 1036.

(4) It is this court’s conclusion of law that the defendant, insurer, acted in bad faith and its conduct embodies reckless disregard toward its insured from the time the claim was filed on October 15,2007 until the time that the claim was finally resolved in August of 2012.

(5) It is the further conclusion of law of this court that punitive damages are appropriate given the reckless disregard to the rights of the plaintiffs, its own first party insured, by defendant Fidelity.

(6) Section 8371 of the Judicial Code governs bad faith actions against an insurer by its insured, and provides:

“In an action arising under an insurance policy, if the court finds that the insurer has acted in bad faith toward the insured, the court may take all of the following actions:
“(1) Award interest on the amount of the claim from the date the claim was made by the insured in an amount equal to the prime rate of interest plus 3 percent.”
“(2) Award punitive damages against the insurer.”
“(3) Assess court costs and attorneys’ fees against the insurer.”

42 Pa. C.S. §8371.

(7) The bad faith statute “authorizes courts, which find that an insurer has acted in bad faith toward its insured, to award punitive damages, attorneys’ fees, interest and costs.” Birth Center v. St. Paul Companies Inc., 567 Pa. 386, 403, 787 A.2d 376, 386 (2001).

(8) Section 8371 does not define what conduct constitutes bad faith and the appellate courts have cautioned that “the breach of the obligation to act in good faith cannot be precisely defined in all circumstances.” Zimmerman v. Harleysville Mutual Insurance Co., 860 A.2d 167 (Pa. Super. 2004).

(9) Rather, bad faith claims “are fact-specific and depend on the conduct of the insurer vis-i-vis its insured.” Williams v. Nationwide Mutual Insurance Co., 750 A.2d 881, 887 (Pa. Super. 2000).

(10) Decisional precedent has described bad faith conduct by an insurer as including “any frivolous or unfounded refusal to pay proceeds of a policy.” Bonenberger v. Nationwide Mutual Insurance Co., 791 A.2d 378, 380 (Pa. Super. 2002); Adamski v. Allstate Insurance Co., 738 A.2d 1033, 1036 (Pa. Super. 1999), appeal denied, 563 Pa. 655, 759 A.2d 381 (2000); Williams, supra.

(11) Since the insurer’s conduct in failing to pay a claim must import a dishonest purpose in order to be deemed bad faith, the insured is required to prove that the insurer breached its duty of good faith and fair dealing through some motive of self-interest or ill will. Brown v. Progressive Insurance Co., 2004 WL 2002477, *7, ¶34 (Pa. Super. 2004); O’Donnell v. Allstate Insurance Co., 734 A.2d 901, 905 (Pa. Super. 1999).

(12) Although mere negligence or bad judgment is insufficient to establish bad faith, it is not necessary for the insurer’s refusal to be fraudulent. Bonenberger, supra-, Adamski, supra. For that reason, “bad faith encompasses a wide variety of objectionable conduct.” Brown, supra at *6,¶31.

(13) By way of illustration, actions by the insurer which are violations of the Unfair Insurance Practices Act are considered to be bad faith conduct under Section 8371. O’Donnell, 734 A.2d at 906. Therefore, an insurer may be liable for bad faith if it fails to conduct a good faith investigation and neglects to communicate promptly with the insured. Brown, supra at *6, ¶31 (quoting Romano v. Nationwide Mutual Fire Insurance Co., 435 Pa. Super. 545, 553-54, 646 A.2d 1228, 1232 (1994)).

(14) As the Superior Court of Pennsylvania has remarked:

“Individuals expect that their insurers will treat them fairly and properly evaluate any claim they may make. A claim must be evaluated on its merits alone, by examining the particular situation and the injury for which recovery is sought. An insurance company may not look to its own economic considerations, seek to limit its potential liability, and operate in a fashion designed to ‘send a message.’ Rather, it has a duty to compensate its insureds for the fair value of their injuries. Individuals make payments to insurance carriers to be insured in the event coverage is needed. It is the responsibility of insurers to treat their insureds fairly and provide just compensation for covered claims based on the actual damages suffered. Insurers do a terrible disservice to their insureds when they fail to evaluate each individual case in terms of the situation presented and the individual affected.”

Bonenberger, 791 A.2d at 382.

(15) When considering the merits of a bad faith claim, “one must look at the behavior of the insurer toward the insured and measure its reasonableness... to see whether it is perhaps more than mere negligence or bad judgment....” Ash v. Continental Insurance Co., 593 Pa. 523, 932 A.2d 877 (2007).

(16) With respect to the present case, the evidence clearly shows that Fidelity did not have a reasonable basis for taking almost five (5) years to resolve plaintiffs’ claim. At virtually every stage of defendant’s claims review and adjustment there is a disturbing pattern of chronic delay. See, Findings of Fact, ¶11-38.

(17) Defendant recognizes and readily acknowledges that it should have resolved plaintiffs’ title insurance claim more quickly. However, defendant argues that its delay does not give rise to a claim for bad faith liability under 42 Pa. C.S. §8371 because plaintiffs presented no evidence of any ill will, improper motive, or dishonest purpose as the cause of the delay. Defendant instead asserts that its actions merely amount to simple neglect of the claim and bad judgment, which they claim is not enough to trigger liability under §8371.

(18) An insurer can, in good faith, delay payment based upon information that it does not yet have. It is only if the delay was due to an evil motive or a reckless indifference to the rights of the insured that bad faith can be present. Younis Bros. & Co., Inc. v. Cigna Worldwide Ins. Co., 882 F. Supp. 1468, 1470 (E.D. Pa. 1994).

(19) However, the presentidle insurance case is factually unique because Fidelity did not deny coverage. Instead, Fidelity took 20 months to complete its investigation and notify plaintiffs that the claim was covered under their policy. See, Findings of Fact, ¶11, 13. Defendant then delayed payment for almost three years, only finally tendering an inadequate offer once suit was filed. See, Findings of Fact, ¶18, 30.

(20) This court concludes that such an extreme delay can certainly constitute bad faith under 42 Pa. C.S. §8371.

(21) Fidelity knew of and consciously disregarded its lack of a reasonable basis for failing to resolve the Davis’ claim during the nearly five (5) year period in question. Such conscious disregard can be seen though Fidelity’s repeated failure to respond to Davis’ constant inquiries regarding the status of his claim. This conscious disregard is also illustrated in the correspondence between the defendant claims attorney, Shawn Grimsley, Esq., and the claims manager, Malachay Sullivan, on September 2, 2009, in which Mr. Grimsley conveyed his concerns regarding the extreme and unnecessary delay involved with the handling of the Davis’ claim as well as the possibility that the insured “may opt to sue us for bad faith if we don’t take some action relatively soon.” Pltf. Exh. 2, doc. No. 297-298; Pltf. Exh. 2, doc. No. 053. This communication marks the earliest definitive date when defendant knew that it had no reasonable basis to continue to deny, by delay, the resolution of plaintiffs’ claim.

(22) Fidelity also displayed improper purpose in its delay such as ill will, improper motive, dishonesty or self-interest through its dealings with adjoining property owner Mr. Norella by knowingly threatening a meritless quiet title suit, and investigating his finances to determine whether he could afford to defend the quiet title action instead of settling the claim and making the insured whole. Pltf. Exh. 14, Bartekdep. P. 43, In 10-18.

(23) A lengthy delay in payment owed by an insurer does not automatically constitute bad faith, since the delay could be due to negligence. El Bor Corp. v. Fireman’s Fund Ins. Co., 787 F. Supp. 2d 341, 349 (E.D. Pa. 2011). In El Bor Corp. v. Fireman’s Fund Ins. Co., delay in the processing of the claim, because the claim had “fallen through the cracks,” did not constitute bad faith because the delay was not knowing or reckless, only negligent. Therefore, a seven-month delay in the processing of the insured’s claim after receipt of the expert report did not constitute bad faith. Id.

(24) The length of Fidelity’s delay in the present case greatly exceeds the seven-month delay in El Bor Corp. v. Fireman’s Fund Ins. Co. Further, Fidelity was repeatedly reminded by Davis’ numerous inquiries that his claim continued to remain outstanding and unresolved.

(25) There is sufficient credible evidence showing that the insurer’s scheme and conscious disregard in turning a blind eye to Davis’ claim hoping that it would somehow resolve itself backfired. Fidelity’s self-serving, self-created position in retaining policy proceeds rightfully belonging to their insured, our plaintiff, presents a gross and reckless indifference to the rights of the insured with whom they had a contractual relationship and arguably, a fiduciary relationship as well. Hollock v. Erie Ins. Exchange, 54 Pa. D & C. 4th 449, 518 (Pa. Com. Pl. 2002). Fidelity’s delay was not only due to negligence, but also because of reckless disregard of the plaintiffs’ rights, through its repeated attempts over nearly five years to find a cheaper way of escaping their liability to settle settling the claim, while the Davis’ waited and watched their proposed subdivision languish.

(B) COMPENSATORY DAMAGES TO INSURED

(1) “Consequential damages are generally understood to be other damages which naturally and proximately flow from the breach and include three types of lost profit damages: (1) lost primary profits; (2) lost secondary profits; and (3) loss of prospective profits, also commonly referred to as good will damages.” AM/PM Franchise Association v. Atlantic Richfield Co., 536 Pa. 110, 119, 584 A.2d 915 (Pa. 1990).

(2) However, statutorily, plaintiffs cannot recover under 42 Pa. C.S. §8371 for any compensatory or consequential damages. Birth Center, 787 A.2d at 403. Courts applying §8371 have uniformly held that a successful plaintiff may only recover the damages that are expressly provided by the statute: interest, court costs, punitive damages, and attorney’s fees. Id. at 402-403.

(3) Compensatoiy damages may be awarded under Pennsylvania common law, which has historically recognized the implied covenant of good faith and fair dealing in the context of insurance law. Zaloga v. Provident Life and Acc. Inc. Co. Of America, 671 F. Supp. 2d 623, 630 (M.D. Pa. 2009).

(4) The general rule is that consequential damages are recoverable in contract and tort actions where (1) there is evidence to establish them with reasonable certainty; (2) there is evidence to show that they were the proximate consequence of the wrong; and (3) in contract actions, they were reasonably foreseeable. Delahanty v. First Pennsylvania Bank, N.A., 318 Pa. Super. 90, 464 A.2d 1243, 1257 (1983).

(5) Plaintiffs’ claims for compensatory damages are not limited solely to statutory bad faith claims under section 8371. They also include a bad faith claim arising from defendant’s breach of the implied covenant of good faith and fair dealing, and therefore their claim for compensatoiy damages is proper. Zaloga v. Provident Life and Acc. Inc. Co. of America, at 631.

(6) To prevail on a breach of contract cause of action under Pennsylvania law, a plaintiff has the burden of showing the following: the existence of a contract, including its essential terms; a breach of a duty imposed by the contract; and damages to the plaintiff as a result of the breach. Core-States Bank v. Cutillo, 723 A.2d 1053, 1058 (Pa. Super. 1999).

(7) Pennsylvania law implies a duty of good faith into an insurance contract and the breach of such a duty constitutes a breach of the insurance contract. Berg v. Nationwide, 2012 Pa. Super. 88, 44 A.3d 1164, 1170 (2012), citing Gray v. Nationwide, 422 Pa. 500, 508, 223 A.2d 8, 11 (1966).

(8) Here, the plaintiffs assert that the defendant breached the title insurance contract entered into between the parties in at least three respects: (1) In failing to fulfill its contractual obligations in a reasonably diligent manner due to taking almost five years to resolve the claim; (2) By failing to pay the loss within 30 days of fixing the amount thereof, as required by the terms of the contract (Pltf. Exh. 1, ¶ 12(a)); and, (3) By breaching their implied duty of good faith and faith dealing with its insureds, by, among other things: delaying resolution of the claim for nearly five years; repeatedly failing to communicate with its insureds about the claim, despite repeated requests for information; and by committing multiple violations of the Pennsylvania Unfair Insurance Practices Act and Unfair Claims Settlement Practices Regulations.

(9) In addition to violation of Pennsylvania’s bad faith statute, 42 Pa. C.S. §8371, this court finds clear and convincing evidence of bad faith conduct by defendant in the following:

(10) Through defendant’s failure to make a timely offer of settlement. Hollock v. Erie Ins. Exchange, 54 Pa. D. &C.4th (Luzerne 2002), aff’d 842 A.2d 409 (Pa. Super. 2004) (the court held that bad faith conduct by an insurer may include the failure to make a reasonable offer of settlement). See also, Klinger v. State Farm, 115 F.3d 230 (3d. Cir. 1997).

(11) Through defendant’s failure to manage and supervise the handling of the Davis claim. An insurer’s failure to “efficiently, effectively, and professionally manage” its insured’s claim may serve as a basis for bad faith. See, Liberty Mutual Ins. Co. v. Paper Manufacturing Co., 753 F. Supp. 156, 159-160 (E.D. Pa. 1990) and Adamski, supra.

(12) Through defendant’s elevating its own interest above that of its insured. An insurer must give the interests of its insured the same faithful consideration that it gives its own interests. Hollock, supra.

(13) Through the defendant’s failure to follow its own internal claims handling guidelines (the failure of an insurance company to follow its own internal claims handling guidelines may be evidence of not having a reasonable basis for denying insurance benefits). Galko v. Harleysville Penn Land Insurance Co., 2005 Pa. D. &C.4th 236 (Lacka. 2005).

(14) It has also been held that an insurer can be held liable for bad faith where the insurer’s assessment of a claim is “less than honest, intelligent and objective.” Puritan Ins. Co. v. Canadian Ins. Co., 775 F.2d 76 (3d Cir. 1985).

(15) We must also look to the Hollock trial court’s rendition of what constitutes bad faith where it adopts the guidelines set forth in the Unfair Insurance Practices Act, 40 P.S. §1171 et seq. and the Pennsylvania Code regulations for insurance practices, 31 Pa. Code §146.1 et seq. Those segments that we find most applicable are set forth below:

(16) Defendant violated 31 Pa. Code 146.6 — Standards for prompt investigation of claims, which requires an insurer to complete its investigation of a claim within 30 days after notification of claim, unless the investigation cannot reasonably be completed within the time. If the investigation cannot be completed within 30 days, and every 45 days thereafter, the insurer shall provide the claimant with a reasonable written explanation for the delay and state when a decision on the claim may be expected. Here defendant took 20 months to complete its investigation, without the legally required communication and justification for such a delay. Despite plaintiffs’ constant efforts, defendant did not communicate any explanation for the delay to its insured.

(17) Defendant repeatedly violated 40P.S.1171.5(a)(10) (ii) (failing to acknowledge and act promptly upon written or oral communication with respect to claims arising under insurance policies), and 31 Pa. Code § 146.5(c) (Failure to acknowledge pertinent communications, requiring that that an appropriate rely shall be made within 10 working days on other pertinent communications from a claimant which reasonably suggest that a response is expected). Here defendant routinely ignored plaintiffs, who initiated repeated communications, with his insurer over a period of years.

(18) Defendant violated 40 P.S. 1171.5(a)(10)(v) — Failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed and communicated to the company or its representative. In support of this conclusion the court adopts, by reference thereto, those conclusions of law related to defendant’s unreasonable basis to delay/deny plaintiffs’ claim, supra, as it fully set forth herein at length. See, findings of fact, 20, 24, 27, 37, etc.

(19) Defendant violated 40 P.S. 1171.5(a)(10)(vi) — “Not attempting in good faith to effectuate prompt, fair and equitable settlements of claims in which the company’s liability under the policy has become reasonably clear.” In the present case, the testimony established that defendant’s liability under the policy was clear within months of the claim being filed. However, at no time prior to this lawsuit being filed on December 14, 2010, was a settlement offer made to Mr. Norella, the true owner of the land, or to the insureds, Mr. and Mrs. Davis.

(20) The unreasonable delay of nearly five years, along with multiple, and often repeated, violations of Pennsylvania law by defendant leads the court to conclude that the defendant’s conduct extended well beyond mere negligence or misjudgment and instead demonstrated bad faith and reckless indifference towards its insureds. This is especially so when it is noted as above, that it took the filing of this lawsuit to finally motivate defendant to authorize monetary authority on this claim and to resolve the dispute.

(21) The plaintiffs have provided estimates for the increased costs of construction between 2007 and 2013, and the depreciation in market value of the townhouses. These numbers amount to $89,760.00 and $272,400.00 respectively. N.T. Vol. I, p. 163; N. T. vol. I, p. 232, 239-240 and Pltf. Exh. 39.

(22) However, the court finds that the futuristic appraisal numbers lack credibility and are therefore unpersuasive. The timeline for construction and the rollout and readiness of the units for market are not based upon any fixed construction schedule, nor is their completion and entry into the marketplace clearly determined. We therefore exercise our discretion as fact finder and allow $135, 000.00 for depreciation as well as $89,760.00 for plaintiffs’ increased construction costs.

(C) PUNITIVE DAMAGES

(1) Pennsylvania courts have established that a finding of bad faith against an insurer toward its insured was the only statutory prerequisite to punitive damages award in an action arising under an insurance policy pursuant to 42 Pa. C.S.A. §8371. Hollock, supra at 418.

(2) It is well recognized that a determination of bad faith does not necessitate an award of punitive damages, but it does allow for an award of punitive damages without additional proof, subject to the trial court’s exercise of discretion. Id., at 419.

(3) For the reasons set forth above, we find thatFidelity’s bad faith conduct was clearly proven to be outrageous and egregious and displayed a reckless disregard toward the right and interests of the Davis’. Therefore, the Davis’ are entitled to an award of punitive damages under 42 Pa. C.S. §8371 (a). Adamski, supra.

(4) The Pennsylvania Superior Court concluded “the size of a punitive damages award must be reasonably related to the state’s interest in punishing and deterring the particular behavior of the defendant and not the product of arbitrariness or exceeding a single-digit ratio will satisfy due process.” Id. at 425; Hollock, supra at 421.

(11) In analyzing the proportionality between the compensatory damages and the punitive damages, the amount of counsel fees and costs awarded is to be included in the compensatory damages figure. Id. at 421-422. Therefore, the total compensatory damages figure for the purpose of calculating punitive damages is:

$89,760.00 — Increased Construction Costs
$135,000.00 — Depreciation
$158,450.00 —Attorney’s Fees
$10,017.31 — Litigation Costs and Expenses
Total Compensatory Damages: $393,227.31

(12) Given Fidelity’s net worth (averaging $454,557,975.67 from 2009 through 2011, based on stipulation of the parties), a significant punitive damage award is necessaiy in order to deter Fidelity from engaging in similar misconduct towards other policy holders.

(13) The significant harm caused to Plaintiffs in essentially stopping their business investment and development for years while Fidelity refused to act must also be considered in calculating punitive damages.

(14) Taking all of the above factors into consideration we find that an appropriate multiplier is an award of four times the compensatory damages as rendered by this court as $393,227.31. The total punitive damages award equals $1,572,909.24. unfettered discretion.” Shiner v. Moriarty, 706 A.2d 1128, 1241 (Pa. Super. 1998).

(5) Punitive damages are directed towards deterrence and retribution. State Farm v. Campbell, 538 U.S. 408, 419 (2003).

(6) In assessing punitive damages, the trier of fact should consider the character of the defendant’s act, the nature and extent of the harm to the plaintiff that the defendant caused or intended to cause, and the wealth of the defendant. SHV Coal Inc. v. Continental Grain Co., 526 Pa. 489, 493-94, 587 A.2d 702, 704 (1991).

(7) A defendant’s net worth has been recognized “as a valid measure of its wealth” for purposes of punitive damages. See Sprague v. Walter, 441 Pa. Super. 1, 61-63, 656 A.2d 890, 920 (1995).

(8) Davis and Fidelity have stipulated through the admission of plaintiff exhibits 20, 21 and 22, that the defendant’s net worth between 2009 and 2011 ranged between $363, 555, 922.00 and $528,567,433.00.

(9) However, the Fourteenth Amendment prohibits the imposition of grossly excessive or arbitrary punishments, and mandates that the proportionality between the actual or potential harm suffered and the size of the punitive damages award is relevant. State Farm v. Campbell, at 424-426.

(10) Although there is no “bright-line” test that a court can apply to ensure that the size of an award of punitive damages complies with due process, several factors are called into question, the Supreme Court has noted that “in practice, few awards

(15) This approach is significant in terms of the insurer’s wealth while it accounts for defendant’s continuing financial stability and will not destroy its operations. Such an amount operates as a deterrent to the defendant, as well as other insurers in the future. Shiner, supra.

(D) INTEREST

(1) A separate issue the court is called to confront is the subject matter of interest as applied to compensatory damages as applicable under 42 Pa. C.S.A. §8371.

(2) 42 Pa. C.S.A. §8371 prescribes that upon a finding of bad faith, by an insurer, a court may award interest on the amount of the claim from the date the claim was made by the insured in an amount equal to the prime rate of interest plus 3%.

(3) The statute plainly states that interest should be applied to the amount of the claim from the date the claim was made. See 42 Pa. C.S.A. §8371(1).

(4) The date we shall assess as the date the claim was made is October 15, 2007 {See, Findings of Fact ¶11). This date marks the day that Richard and Maria Davis had a legitimate claim arising from their insurance policy. Therefore, we shall apply 3 percent above the prime rate of interest to the verdict in the underlying action payable by Fidelity National Insurance Company pursuant to 42 Pa. C.S.A. §8371(1).

(5) Pa. R.C.P. 238 lists the prime rates of interest for each year as set forth in the first edition of the Wall Street Journal for the purposes of damages. Under Pa. R.C.P. 238, the prime rate of interest for the applicable years was 8.25 percent for 2007, 7.25 percent for 2008, and 3.25 percent for 2009 through 2013.

(6) Therefore, calculating this interest rate plus 3 percent, the amount of interest due is to equal $92,735.12, which represents the period of October 15, 2007 through August 15, 2013.

(E) ATTORNEY’S FEES

(1) Pa. C.S. §8371 provides for the recovery of counsel fees and expenses “to compensate the plaintiff for having to pay an attorney to get that to which they were contractually entitled” and punitive damages “to punish the defendant for its bad faith in failing to do that which it was contractually obligated to do.” Klinger, supra at 236.

(2) In the present case, attorney’s fees and costs were admitted through stipulation of the parties in plaintiffs’ exhibit 17 and plaintiffs’ exhibit 18 respectively. N.T January 31, 2013, p. 97.

(3) Plaintiffs’ exhibit 17 indicates that the reasonable value of said legal services is $158,450.00. pltf. exh. 17.

(4) This amount includes 633.8 service hours at $250.00 an hour. Id. The court finds the amount of these legal fees to be reasonable and customary for our area.

(5) Plaintiffs’ exhibit 18 indicates that plaintiffs’ litigation costs and expenses from trial through the beginning of trial totaled $7, 392.31 and that plaintiffs’ litigation cost and expenses from trial through the current date totaled an additional $2,625. Therefore plaintiffs’ total litigation costs and expenses are $10,017.31. As they are well documented the court accepts these costs and expenses as offered.

(6) This court therefore finds the amount assessed for both attorney’s fees to be a reasonable and acceptable fee, and the amount measured for litigation costs and expenses to be reasonable and acceptable.

(7) Therefore, our assessment of attorney’s fees and cost will include an award to Richard Davis and Maria Davis in the amount of $ 168,467.31.

An appropriate order follows.

ORDER

And now, this 15th day of August 2013, upon consideration of the parties’ verbal and written arguments of counsel and all testimony and evidence presented to the court on January 29, 30 and 31, 2013 and in accordance with the preceding memorandum it is hereby ordered and decreed as follows:

(1) A verdict is entered in favor of the plaintiffs, Richard Davis and Maria Davis, and against the defendant, Fidelity National Insurance Co., pursuant to 42 Pa. C.S. §8371 based upon clear and convincing evidence that the defendant, Fidelity National Insurance Co., acted in bad faith toward its insureds, Richard Davis and Maria Davis, and pursuant to plaintiffs’ bad faith claim based upon clear and convincing evidence that defendant breached its implied covenant of good faith and fair dealing towards the insured.
(2) The court finds that the defendant, Fidelity National Insurance Company is liable for the entire amount of the verdict rendered, totaling $1,966,136.55, in the underlying action, plus interest at the rate of 3 percent above the prime rate of interest from the date of October 15,2007, the claim was made through August 15,2013 equal to $92,735.12.
(3) The court awards punitive damages against the defendant, Fidelity National Insurance Company, in an amount of four times the compensatory damages awarded by this court equaling $1,572,909.24.
(4) The court awards compensatory damages to the insured, Richard Davis and Maria Davis, in the amount of $224,760.00.

(5) The court awards attorney’s fees and costs to Richard Davis and Maria Davis in the amount of $ 168,467.31.

$92,735.12 simple interest 10/15/07 — 8/15/13 $1,572,909.24 punitive award (4 x compensatory damages verdict)

$224,760.00 compensatory damages

$168,467.31 Davis’ attorney’s fees and costs

$2,058,871.67 Total verdict

(6) Judgment is entered in the amount of $2,058,871.67 for the plaintiffs.


source: Caselaw Access Project

author: ROGERS, J.,

license: Public Domain

text:
    Rawdin v. Real

      Robert F. Morris and Seth D. Wilson, for plaintiffs

      Charles A. Fitzpatrick, for defendants
    August 21, 2013
   ROGERS, J.,

I. INTRODUCTION

Appellants Myma Rawdin (“Mrs. Rawdin”) and Martin Rawdin (jointly “appellants”) have appealed to the Superior Court of Pennsylvania (“Superior Court”) from this court’s order denying their motion for post-trial relief dated and docketed on February 27, 2013, and entered as a final judgment on March 11, 2013, following a five (5) day jury trial and verdict in favor of Appellees Mark B. Real, M.D. (“Dr. Real”) and PMA Medical Specialists, LLC (jointly “appellees”) and against appellants. For the reasons set forth below, judgment should be affirmed.

II. FACTUAL AND PROCEDURAL HISTORY

The relevant facts and procedural history underlying this appeal are as follows. In 2001, Mrs. Rawdin began treating with Dr. Real, board certified in internal medicine and geriatrics, at PMA Medical Specialists. (Notes of Testimony (“N.T.”) 9/10/12, at 43; N.T. 9/12/12, at 124-125). She attended her first office visit with Dr. Real on July 5, 2001, just prior to her sixty-third (63rd) birthday. (N.T. 9/10/12, at 40, 43; trial exhibit P-2). Mrs. Rawdin next saw Dr. Real on April 10,2002, for an annual routine visit. (N.T. 9/10/12, at 49).

On June 17,2003, Mrs. Rawdin experienced an episode of severe dizziness, which led her to call 911. (N.T. 9/10/12, at 52; N.T. 9/12/12, at 128; trial exhibit P-2, at ■ 31-32). The ambulance transported her to the Pottstown Memorial Hospital Emergency Room (“ER”), where the medical staff ordered laboratoiy studies, an X-ray and a CAT scan of her brain. (N.T. 9/10/12, at 52; N.T. 9/12/12, at 128; trial exhibit P-2, at 31-32). The ER physician diagnosed labyrinthitis, prescribed Anti vert and told Mrs. Rawdin to follow up with her family doctor. (N.T. 9/10/12, at 53, 59; N.T. 9/12/12, at 128). Mrs. Rawdin saw Dr. Real on June 23, 2003. (N.T. 9/10/12, at 57-58; N.T. 9/12/12, at 128). Based on her presentation and what Mrs. Rawdin had told him about her episode of vertigo, Dr. Real ordered an MRI of her brain. (N.T. 9/12/12, at 128-29). Mrs. Rawdin obtained the MRI on July 2, 2003. (N.T. 9/10/12, at 61; trial exhibit P-2, at 29-30). The MRI revealed small vessel ischemic disease, which Dr. Real considered a common finding in individuals over the age of sixty (60). (N.T. 9/12/12, at 144, 146). A nurse from Dr. Real’s office reported to Mrs. Rawdin that the results of her MRI were within normal limits. (N.T. 9/10/12, at 61; N.T. 9/12/12, at 147-48). Her symptoms of dizziness resolved within a couple of weeks after the MRI. (N.T. 9/10/12, at 64).

Mrs. Rawdin next saw Dr. Real on April 29, 2004, for her annual routine checkup. (Id. at 63). On November 1, 2004, Mrs. Rawdin again presented to Dr. Real. (Id. at 64). At this visit, she related an episode at her synagogue on October 29, 2004, when she experienced the sensation that her voice did not sound normal to her, although no one else noticed anything different. (Id. at 65, 67, 108). She also reported a little headache and dizziness, but that the speech problem, noticed only by her, had gone away almost immediately. (Id. at 67). As part of his examination, Dr. Real checked Mrs. Rawdin’s ears and had a nurse remove a large amount of earwax from her left ear. (Id. at 68-69; N.T. 9/12/12, at 130-31). Dr. Real prescribed Meclizine for the dizziness, which resolved within a few days. (N.T. 9/10/12, at 69-70). Mrs. Rawdin did not see Dr. Real again after the November 1, 2004 visit. During the evening hours of Sunday, November 28, 2004, Mrs. Rawdin suffered an ischemic stroke involving the right side of her brain. (N.T. 9/10/12, at 70; N.T. 9/11/12, at 59, 61-62; trial exhibit P-1, P-2).

Appellants filed a medical professional liability complaint against appellees on January 10, 2006, alleging, inter alia, Dr. Real’s failure to diagnose and treat a transient ischemic attack, (complaint filed January 10, 2006, Montgomery County No. 2006-00386, at 4-5). On October 23, 2006, appellants filed a second medical professional liability complaint against Van Duy Nguyen, M.D. and PMA Medical Specialists, LLC. (Montgomery County No. 2006-26593). The Honorable Bernard A. Moore consolidated the two matters on November 13, 2008. On December 1, 2009, the parties stipulated to the dismissal of Dr. Nguyen with prejudice and the case ultimately proceeded to trial with jury selection on Friday, September 7, 2012.

On August 29, 2012, the undersigned heard argument on the parties motions in limine. The court subsequently denied appellees’ motion to preclude Nancy Futrell, M.D. from offering any testimony on the issue of negligence based on 40 P.S. §1303.512. (Trial court order: motion in limine of defendants, Mark B. Real, M.D. and PMA Medical Specialists, LLC to preclude plaintiffs’ proposed expert, Nancy Futrell, M.D., from offering any testimony on the issue of negligence, entered August 31, 2012). However, the court granted appellees’ motion to preclude the testimony of two experts on the standard of care as cumulative and directed appellants’ counsel to notify appellees’ counsel whether appellants would present Nancy Futrell, M.D. or Paul Genecin, M.D. as their expert on the standard of care. (Id). Appellants’ counsel notified appellees’ counsel by letter that they would present the testimony of Dr. Genecin on the standard of care and Dr. Futrell on causation. (Appellants’ memorandum of law in support of post-trial motions, filed November 19, 2012, at 4). During jury selection on Friday, September 7, 2012, appellants made an oral motion for reconsideration of the court’s order precluding the testimony of two experts on the standard of care as cumulative, which the court denied on the same day. (Trial court order: plaintiffs’ motion to reconsider the court’s order precluding the testimony of two experts on the standard of care as cumulative, entered September 7,2012). Testimony and evidence commenced on Monday, September 10, 2012.

Appellants presented the expert testimony of Paul Genecin, M.D. on September 11, 2012. (N.T. 9/11/12, at 25-100). Dr. Genecin testified extensively on the appropriate standard of care and his opinion that Dr. Real violated that standard of care. (Id.). In addition, Dr. Genecin testified regarding causation of Mrs. Rawdin’s stroke, both physiologically as well as the increased risk of harm incurred by Dr. Real’s failure to order certain studies and perform a neurological workup. (Id. at 63-70). Outside the presence of the jury, the undersigned heard counsels’ objections and responses to the causation testimony and the cumulative nature of Dr. Futrell’s proffered testimony. (Id. at 72-75). The court then reiterated to counsel, “Dr. Futrell will not be permitted to testify about those — anything that’s cumulative to what Dr. Genecin testified to. That was my order.” (N.T. 9/11/12, at 75). After additional argument the following morning, the court sustained appellees’ objections and limited the testimony of Dr. Futrell on direct to damages. (N.T. 9/12/12, at 3-25). Dr. Futrell also testified concerning the applicable standard of care and causation in rebuttal to defendant’s expert, Christopher Loftus. (Id. at 50-68).

Before testimony resumed on the morning of September 13, 2012, the undersigned memorialized the charging conference with counsel. The court explained that it would be making a slight change to suggested jury instruction 14.120 by omitting one sentence. (N.T. 9/13/12, at 5, 7-8). The deleted sentence states: “Nor does your verdict involve the defendant’s reputation, his medical practice, or his rights as a licensed physician.” (Id.). Appellants’ counsel took an exception to the deletion of that sentence from the jury instruction. (Id. at 7). That afternoon, the jury returned its unanimous verdict in favor of appellees. Specifically, in answer to the first question, “Do you find that the conduct of [Dr. Real] fell below the applicable standard of medical care? In other words, was [Dr. Real] negligent?”, the jury answered, “no”. (Id. at 137-38; verdict sheet).

Appellants timely filed post-trial motions on September 24, 2012 and the court heard argument on February 6, 2013. The undersigned issued an order denying appellants’ post-trial motions on February 27,2013. The prothonotaiy entered final judgment and the Rule 236 notice on March 11,2013. Appellants filed a notice of appeal on March 19, 2013. On March 21,2013, the undersigned issued an order directing appellants to file and serve a concise statement of the errors complained of on appeal (“concise statement”). Appellants filed a concise statement on April 8, 2013.

III. ISSUES

Appellants raise the following four (4) issues on appeal:

1. A new trial should be granted because the trial court erred and abused its discretion in granting defendants’ motion in limine to preclude plaintiffs’ expert, Nancy Futrell, M.D. from testifying as to any opinions on the standard of care.
2. A new trial should be granted because the trial court erred and abused its discretion in sustaining defendant’s objections to the testimony of Nancy Futrell, M.D. and precluding Nancy Futrell, M.D. from testifying as to any issues other than the damages sustained by Mrs. Rawdin and the rebuttal of the testimony of defendants’ expert, Christopher Loftus, M.D.
3. A new trial should be granted because the trial court erred and abused its discretion in failing to sustain plaintiffs’ objection, which was raised during defense counsel’s closing argument, that Nancy Futrell, M.D. failed to testify on the issues of negligence and causation, because earlier rulings made by the court precluded Dr. Futrell’s testimony in these areas.
4. A new trial should be granted because the trial court erred in failing to instruct the jury in accordance with Pennsylvania Suggested Standard Jury Instruction 14.120.

(Appellants’ concise statement filed April 8, 2013).

IV. DISCUSSION

In their first two issues on appeal, appellants assert that this court erred as a matter of law and abused its discretion regarding rulings it made concerning one of appellants’ experts, Nancy Futrell, M.D. before she testified at trial. We will address them together.

First, appellants posit that the court erred in granting appellees’ motion in limine to preclude Dr. Futrell from testifying as to any opinions on the standard of care. At the outset, this court notes that appellants mischaracterize the court’s order. In actuality, the court denied appellees’ motion to preclude Nancy Futrell, M.D. from offering any testimony on the issue of negligence. (Trial court order, entered 8/31/12). Rather, the court granted appellees’ motion to preclude the testimony of two experts on the standard of care as cumulative and directed appellants to notify appellees which of their two proposed experts would testify on the standard of care before the completion of jury selection more than one week later. (Id). Appellants’ counsel notified appellees’ counsel on September 5, 2012 (Plaintiff’s memorandum of law in support of post-trial motions, p. 4), and the undersigned on September 10, 2012, that they would present Paul Genecin, M.D. on the standard of care and Nancy Futrell, M.D. on causation and damages. (N.T. 9/12/12, at 24).

Second, appellants assert that the court erred and abused its discretion in sustaining appellees’ objections to Dr. Futrell’s potentially cumulative testimony following the testimony appellants’ counsel elicited from Dr. Genecin and, consequently, limiting Dr. Futrell’s testimony to damages and the rebuttal of appellees’ expert. Appellants insist that they are entitled to a new trial. No relief is due.

To prevail in an action asserting professional negligence, a plaintiff must plead and prove four elements:

(1) the physician owed a duty to the patient; (2) the physician breached that duty; (3) the breach of duty was the proximate cause of, or a substantial factor in, bringing about the harm suffered by the patient; and (4) the damages suffered by the patient were a direct result of that harm. Corvado v. Thomas Jefferson University Hospital, 790 A.2d 1022, 1030 (Pa.Super. 2001) (citation omitted).

Hatwood v. Hospital of the University of Pennsylvania, 55 A.3d 1229, 1241 (Pa.Super. 2012). Accord Carrozza v. Greenbaum, 866 A.2d 369, 379 (Pa.Super. 2004) (citations omitted). “[T]he most distinguishing feature of professional malpractice is the need for expert testimony to clarify complex issues for a jury of laypersons.” Merlini v. Gallitzin Water Authority, 602 Pa. 346, 354, 980 A.2d 502, 506 (2009) (citing Toogood v. OwenJ. Rogal, D.D.S., PC., 573 Pa. 245, 824 A.2d 1140, 1145 (2003)); accord Carrozza, supra.

Pennsylvania law provides a trial court with broad power and discretion to limit the number of witnesses whose testimony is similar or cumulative as well as any cumulative evidence presented to a jury. See Pa.R.C.P. 223(1); Pa.R.E. 403. An appellate court’s standard of review for evidentiary rulings is a narrow one. Hatwood, supra at 1239 (citation omitted). “The admission of expert testimony is within the trial court’s sound discretion and [the appellate courts] will not disturb that decision without a showing of manifest abuse of discretion.” Whitaker v. Frankford Hospital of City of Philadelphia, 984 A.2d 512, 522 (Pa.Super. 2009) (citation omitted); accord Jacobs v. Chatwani, 922 A.2d 950, 956 (Pa. Super. 2007) (citing Smith v. Paoli Memorial Hospital, 885 A.2d 1012, 1016 (Pa.Super. 2005)). As the Superior Court has previously explained:

“Evidentiary rulings are committed to the sound discretion of the trial court, and will not be overruled absent an abuse of discretion or error of law.” Takes v. Metropolitan Edison Co., 440 Pa.Super. 101, 655 A.2d 138, 145 (1995) (en banc), reversed in part on other grounds, 548 Pa. 92, 695 A.2d 397 (1997). “In order to find that the trial court’s evidentiary rulings constituted reversible error, such rulings must not only have been erroneous but must also have been harmful to the complaining party.” Collins [v. Cooper], 746 A.2d [615,] 619 [ (Pa.Super. 2000) ] citing Romeo v. Manuel, 703 A.2d 530, 532 (Pa.Super. 1997). “’Appellant must therefore show error in the evidentiary ruling and resulting prejudice, thus constituting an abuse of discretion by the lower court.’” Id. at 620[.]
Oxford Presbyterian Church v. Weil-McLain Co., Inc., 815 A.2d 1094, 1099-1100 (Pa.Super. 2003).

Whitaker, supra. “An abuse of discretion may not be found merely because an appellate court might have reached a different conclusion, but requires a result of manifest unreasonableness, or partiality, prejudice, bias, or ill-will, or such lack of support so as to be clearly erroneous.” Jacobs, supra (citing Freed v. Geisinger Medical Center, 910 A.2d 68, 72 (Pa.Super. 2006)).

In the case sub judice, at argument of the motion in limine to preclude Nancy Futrell, M.D. from testifying as to any opinions on standard of care and the oral motion to reconsider, at trial and at argument on appellants’ post trial motion, counsel has repeatedly asserted the same reasons why appellants proffered Dr. Futrell’s opinion testimony on the standard of care as well as causation. For example, counsel argued as follows:

[H]er qualifications are very different from Dr. Genecin’s qualifications, particularly on a causation issue, because she treats lots and lots of stroke victims, always has through her career. She’s widely published in this area as to what the treatments are to treat stroke victims, what the tests are that are done by stroke doctors to rule out TIAs and strokes. And because her qualifications are very different from Dr. Genecin’s on that point, I would request that she be allowed to bolster his opinion with her own credentials.
* * * *
[A]n internist doesn’t treat as many stroke patients as a stroke expert does. A stroke expert, when she says that I treat these patients, I offer these treatments to them, I follow them up after they’re referred to me by internists, and we could have prevented this stroke, it carries different weight than the internist who’s referring to it because of her qualifications. And therefore I want her to be able to back up this testimony with her particular qualifications in treating strokes.

(N.T. 9/12/12, at 5-7).

There was only one defendant doctor in this case. More than a week before trial, the court issued its order limiting each party to one expert on the standard of care and one expert on causation. Appellants could have presented Dr. Futrell as their expert on both the standard of care as well as causation, but did not. Appellants could have sought leave to amend Dr. Genecin’s expert report on the standard of care, but did not. (N.T. post trial motions 2/6/13, at 7-9). Appellants could have presented Dr. Genecin’s expert opinion only on the standard of care and Dr. Futrell’s expert opinion on causation, but did not. Not only did appellants’ chosen expert on the standard of care, Dr. Genecin, also testify on causation, counsel specifically asked him for clarification of his opinion on causation to a reasonable degree of medical certainty. (N.T. 9/11/12, at 66-70). Finally, although not controlling, the undersigned notes on review that the jury never reached the issue of causation, determining first and foremost that Dr. Real did not violate the standard of care in his diagnosis and treatment of Mrs. Rawdin and, therefore, was not negligent. (Jury verdict, entered September 13, 2012). This court did not abuse its discretion in limiting the testimony of Dr. Futrell.

In appellants’ third issue on appeal, they claim that they are also entitled to a new trial because this court erred and abused its discretion by not sustaining counsel’s objection to appellees’ closing argument wherein counsel argued that Nancy Futrell, M.D. failed to testify on the issues of negligence and causation. Again, counsel mischaracterizes the circumstances and the court’s ruling.

Preliminarily, appellees argue that appellants have waived this issue by failing to request a mistrial at the close of the charge of the court. (N.T. 9/13/13, at 129). See McMillen v. 84 Lumber, Inc., 538 Pa. 567, 649 A.2d 932 (1994). See also Gbur v. Golio, 600 Pa. 57, 75, 963 A.2d 443, 454 (2009) (stating long-settled axiom that trial counsel is required to make a timely and specific objection during trial to preserve an issue for appeal). Regardless, the undersigned would not have granted a mistrial had one been requested, nor is a new trial warranted now.

It is long settled “that not every intemperate remark by an attorney requires a mistrial.” Dillow v. Myers, 916 A.2d 698, 701 (Pa.Super. 2007) (citation omitted). Comments which do not mislead or confuse the jury do not deprive a party of a fair trial. Id. at 702 (citation omitted).

“Regarding statements during opening and closing arguments, our Supreme Court has held that ‘[s]o long as no liberties are taken with the evidence, a lawyer is free to draw such inferences as he wishes from the testimony and to present his case in the light most suited to advance his cause and win a verdict in the jury box.’” Wagner v. Anzon, Inc., 453 Pa. Super. 619, 684 A.2d 570, 578 (1996) (citation omitted). “However, this latitude does not include discussion of facts not in evidence which are prejudicial to the opposing party.” Id. “In general, any prejudicial remarks made by counsel during argument can be handled ‘within the broad powers and discretion of the trial judge and his actions will not be disturbed on appeal unless there is an obvious abuse of discretion.’” Id.

Hyrcza v. West Penn Allegheny Health System, Inc., 978 A.2d 961, 977 (Pa.Super. 2009).

Instantly, appellants’ counsel objected to the following statement by appellees’ counsel in closing: “Dr. Futrell never expressed an opinion — the stroke expert never expressed an opinion about whether or not the signs and symptoms on that day were suspicious for a TIA.” (N.T. 9/13/12, at 92). At the conference at sidebar, the undersigned instructed appellees’ counsel to segue out of that argument and permitted appellants’ counsel to respond to the statement if he so desired. (Id.) On rebuttal, appellants’ counsel explained to the jury “[i]t was decided before trial that Dr. Futrell would testify only on the issues that she did testify about and that Dr. Genecin would cover that, rather than have multiple experts testify on the same thing.” {Id. at 98-99). The jury was not misled or confused into believing that Dr. Futrell would not have opined that the symptoms on that day were suspicious for a TIA had she been given the opportunity. Appellants’ counsel cured any potential for prejudice with his explanation. Accordingly, appellants’ third claim on appeal is unavailing.

In their final issue, appellants posit that the court erred and abused its discretion by not reading one sentence from one of many requested standard jury instructions. Appellants’ claim is devoid of merit.

When reviewing a challenge to a jury instruction, an appellate court is limited to determining “whether the trial court committed a clear abuse of discretion or error of law controlling the outcome of the case.” Cooper v. Lankenau Hospital, _ Pa. 51 A.3d 183, 187 (2012) (citation omitted). On examination, “the entire charge is considered, as opposed to merely discrete portions thereof.” Id. (citation omitted).

A jury charge is erroneous if the charge as a whole is inadequate, unclear, or has a tendency to mislead or confuse the jury rather than clarify a material issue. Therefore, a charge will be found adequate unless the issues are not made clear to the jury or the jury was palpably misled by what the trial judge said.

Hyrcza, supra at 974 (citation omitted); accord Hatwood, supra at 1241. “[T]he law has long been that the trial court need not use specific language to instruct the jury, so long as it accurately explains the law. After all, they are only suggested instructions.” Schaaf v. Kaufman, 850 A.2d 655, 663 (Pa.Super. 2004) (citation omitted).

Instantly, after instructing the jury on professional negligence and factual cause, the undersigned read the following instruction on irrelevant considerations:

A professional medical negligence or medical malpractice case is a civil action for damages and nothing more. You must decide only the issue of whether the plaintiff, Dr. Real, has — I’m sorry — whether the plaintiff, Mrs. Rawdin, has suffered injuries as a result of Dr. Real’s negligence and is thus entitled to monetary compensation for those injuries. Your verdict does not involve the punishment of the defendant or even criticism of his professional abilities beyond the facts of this case. You should not concern yourselves with any other matter, such as social or political issues related to medicine. No thought should be given to these irrelevant considerations in reaching your verdict.

(N.T. 9/13/12, at 116). These instructions followed the court’s charge on evidence, credibility, conflicts in testimony and experts. (Id. at 103-115). The court went on to instruct on damages, the verdict sheet and the concluding jury charge. (Id. at 116-135). The court declined to read one sentence from suggested jury instruction §14.120 because of the undersigned’s belief that the instruction as written is inaccurate. (Id. at 5, 7-8). The deleted sentence states: “Nor does your verdict involve the defendant’s reputation, his medical practice, or his rights as a licensed physician.” See Pennsylvania Suggested Standard Jury Instruction (Civil) §14.120 (2011).

This court notes that the Superior Court has affirmed both a trial court’s reading of the entire “irrelevant considerations” instruction as well as atrial court’s reading of the majority of the charge as long as the “basic thrust” of the charge is conveyed. Compare Hyrcza, supra at 975 (affirming Judge Eaton’s reading of the entire charge); and Schaaf, supra at 663-64 (affirming Judge Glazer’s deletion of almost identical language from Pa. SSJI (Civ) §10.07). As the Honorable Richard B. Klein explained in Schaaf, supra, “some of the jurors may know about the reporting requirement and know that an adverse verdict might affect the doctor.” Id. at 663.

In this case, the court conveyed the essential thrust of the instruction, which was to inform the jury “that the only issue was whether [Dr. Real] was negligent, and that the jury had to disregard other, irrelevant considerations.” See Schaaf, supra. As a result, the instruction was proper as given and appellants’ final issue merits no relief.

V. CONCLUSION

Based upon the reasoning set forth herein, the undersigned respectfully requests that the judgment be affirmed.

      . Labyrinthitis is an inflammation of the inner ear that can cause a loss of balance, vertigo and vomiting. Steadman’s Medical Dictionary 2006.

        . One implication of counsel’s statement would be that Dr. Futrell would have so testified if Dr. Futrell actually believed that was the case. The court is confident that appellants’ counsel successfully refuted such an implication.


author: RIZZO, J.,

text:
    Remmert v. EDA Contractors, Inc.

      John Jacob Hare, John Carleton Farrell and Elizabeth Ann Underwood, for appellants

      John Thomas Dooley and Sean Michael McMonagle,
      for appellees
    July 19, 2013
   RIZZO, J.,

The appellants, EDA Contractors, Inc. a/k/a EDA Roofing Corp. and William J. Diaz, from the court’s order and decision of February 23,2013

FACTS AND PROCEDURAL HISTORY

Appellee-plaintiffs Gerald and Kathy Remmert commenced this action on March 1,2011 against appellant-defendants EDA Contractors, Inc. a/k/a EDA Roofing Corp. (“EDA Contractors”) and William J. Diaz (“Diaz”) for injuries suffered by Gerald Remmert (“Remmert”) on the morning of March 27, 2009. when Diaz’s vehicle struck appellees’ vehicle (being driven by Remmert) at the intersection of East Somerset Street and Memphis Street in the Port Richmond section of Philadelphia.

On August 2, 2012, after a five-day trial, a jury found appellee Remmert fifty-one percent (51%) liable for the accident and the injuries he himself sustained, and appellants liable for the remaining forty-nine percent (49%), which therefore barred appellees from any recovery. On September 7, 2012, appellees moved for post-trial relief in the form of either a judgment notwithstanding the verdict, or a new trial, pursuant to Pennsylvania Rule of Civil Procedure 227.1. Several grounds were raised including; that the trial court erred in allowing the testimony of an accident reconstructionist, that the trial court erred in certain aspects of its charge to the jury, that the jury was improperly presented with the issue of comparative negligence, that defense counsel made improper remarks during opening and closing arguments, and finally that damages were inadequate because of an inadequate verdict.

After reviewing said motion, the responses, the trial transcript, applicable law, and receiving oral argument, this court granted appellees’ motion for post-trial relief in the form of a new trial on February 23, 2013. On March 22,2013, appellants timely appealed said order granting a new trial, pursuant to Pa.R.A.P. 311 (a)(6).

The facts of the case are as follows:

This accident occurred at the intersection of Memphis Street and East Somerset Street in Philadelphia, Pennsylvania. Memphis Street runs perpendicular to East Somerset Street, forming a “T-shaped” intersection. When traveling on Memphis Street as it meets East Somerset Street, a driver must first observe a stop sign, and then turn either left or right onto East Somerset Street, which is a two-lane street. Traffic proceeding along East Somerset Street is not controlled by a stop sign, and cannot turn onto Memphis Street as it is a one-way street.

At trial, Remmert gave undisputed testimony that at the time of the incident he was traveling along East Somerset Street at a speed of approximately 15-20 miles per hour, approached Memphis Street, and observed a large parked truck “sticking out” and obstructing his view of oncoming traffic from Memphis Street. Because Remmert had the right-of-way, he did not stop or slow down his speed as he proceeded straight along East Somerset Street. At trial, Diaz, driver for EDA Contractors, testified that he drove along Memphis Street and as he approached the intersection of Memphis Street and East Somerset Street, stopped at the stop sign, observed the same truck parked at the comer obstmcting his view of the oncoming traffic from East Somerset Street, and then “inched” out into the intersection.

It is undisputed that the vehicle driven by Diaz stmck Remmert’s vehicle after Diaz made a left turn onto East Somerset Street from Memphis Street. The front left bumper of the Chevrolet Silverado driven by Diaz contacted the passenger-side headlight area of Remmert’s Nissan Altima. Remmert testified that the impact cracked his engine in half, pushed the vehicle’s hood up to the windshield, and totaled his vehicle. The impact also jolted Remmert forward and against the side of the door. When questioned about the impact, Diaz stated that his truck “went...right over the top of [appellee’s car].” Photographs introduced into evidence by Diaz showed minor damage to the truck’s front bumper. Diaz also introduced the testimony of an accident reconstmction expert who corroborated the testimony of both parties.

The jury returned a verdict finding Remmert fifty-one percent (51%) causally negligent and the appellants forty-nine percent (49%) causally negligent, barring both appellees from all recovery. Within thirty days of the recording of the verdict, appellees filed a timely motion for post-trial relief requesting one of the following forms of relief: judgment notwithstanding the verdict, a new trial, or a new trial on the issue of damages only. In response, a briefing schedule was put forward for the filing of post-trial briefing by the parties, setting a date for oral argument of October 9, 2012.

Both trial counsel and the court believed review of the trial transcript was essential to resolving the outstanding post-trial motion. Considerable delay in the provision of the trial transcript following oral argument on said motion resulted in several extensions afforded counsel for post-trial briefing. Each extension was requested by counsel and reviewed by this court as communication with counsel was on regular basis during this time. The unforeseen delay in the production of the trial transcript as well resulted in a delay of review and ultimate analysis by the court for decision after oral argument. Counsel knew of these delays and both expressed a need to review the trial transcript to support their own post-trial supplemental memoranda after oral argument. Both took said opportunity afforded them by the court to supplement their original post-trial filings.

On February 23, 2013, the court granted appellees’ request for relief in the form of a new trial. Due to consistent communications between the court and trial counsel regarding a delay in receipt of the trial transcript, it was anticipated by the court that counsel would await the court’s ruling. Defense counsel moved to enter judgment pursuant to Rule Rule 227.4(1 )(b), resulting in said Judgment pre-dating this court’s grant of relief on appelles’ post-trial motion for a new trial. Though entry of judgment was timely, it was done without (by courtesy) any prior notice to the court. The subsequent order of February 23,2013 entered by the court was in turn subject to challenge by the appellants and now forms the basis of the instant appeal.

Notwithstanding the unusual procedural chronology in the case, it is this court’s request that full appellate review be given the bases upon which the lower court granted the aforesaid relief — such significant relief only being granted upon a thorough review of the transcript, applicable statutory law and case law.

ISSUES ON APPEAL

In their post-trial motion, appellees raised several grounds for review: that the trial court erred in allowing the testimony of an accident reconstructionist and admission into evidence of photographs of the vehicle driven by Diaz, that the trial court erred in certain aspects of its charge to the jury, that the jury was improperly presented with the issue of comparative negligence, that defense counsel made improper remarks during opening and closing arguments, that the trial court erred in failing to overrule late objections by defense counsel to the trial testimony of Dr. James Brady, and that damages were inadequate because of an inadequate verdict. In their supplemental filing to their post-trial motion. Appellees added a new basis claiming that the trial court erred in referring to a statutory excerpt from the Pennsylvania Motor Vehicle Code 75 PA C.S. §3361, titled “Driving vehicle at safe speed,” during the charge to the jury, and in not referring to excerpts from 75 PA C.S. §3322, titled “Vehicle turning left” and 3323(b), titled “Duties at stop signs.”

This court’s post-trial review of the case determined that the various evidentiary rulings made within the court’s discretion, the scope of the charge to the jury, the extent of curative instruction given to the jury as a result of remarks raised by appellants’ counsel in opening and closing arguments, and the court’s decision to charge the jury on relevant portions of the Motor Vehicle Code, were proper and therefore not bases for post- trial relief. As the jury never reached the issue of damages, the appellees’ claim that damages were inadequate is beyond the scope of any review.

In turn, the following issues form the bases upon which this court granted post-trial relief:

1. The trial testimony of Michael Berko vitz did not form an adequate basis on which this jury could determine that appellee Gerald Remmert was more causally negligent than appellant Diaz in bringing about the accident and ultimate injury to appellee Remmert.
2. The jury’s verdict finding appellee Gerard Remmert more causally negligent than appellants EDA Contractors and William J. Diaz is not supported by the weight of the evidence.

LEGAL DISCUSSION

I. THE TRIAL COURT DID NOT COMMIT AN ERROR OF LAW IN ADMITING THE TESTIMONY OF APPELLANT’S EXPERT WITNESS MICHAEL BERKO VITZ. SAID TESTIMONY HOWEVER DID NOT PROVIDE AN ADEQUATE BASIS FROM WHICH TO DETERMINE THAT REMMERT WAS MORE CAUSALLY NEGLIGENT THAN DIAZ.

The admissibility of expert witness testimony is governed by Pennsylvania Rule of Evidence 702. The qualification of a witness as an expert and the admission of expert testimony lie within the sound discretion of the trial court. Com. v. Petroll, 696 A.2d 817, 834 (Pa. Super. Ct. 1997) aff’d, 558 Pa. 565, 738 A.2d 993 (1999). The Pennsylvania Supreme Court has noted that an individual who does not personally witness an accident is not competent to testify as to the cause of the accident because such an opinion would invade the jury’s prerogative. McManamon v. Washko, 906 A.2d 1259, 1279 (Pa. Super. Ct. 2006). However, under Pa. R. Evid. 704, a person who did not observe the accident but is qualified as an expert in such matters may provide testimony on the ultimate issue of fault. Id. at 1278.

Admission of appellants’ expert witness was proper. At trial the appellants offered Michael Berkovitz of MB2 Expert Services as an expert in traffic accident reconstruction. During voir dire, Mr. Berkovitz described his experience and qualifications. After a brief cross-examination, the court accepted Mr. Berkovitz as an expert, over plaintiff’s objection. Mr. Berkovitz described how he conducted his review of the accident: he reviewed the police accident report, reviewed photographs of the vehicles, and reviewed photographs of the intersection. He also visited the accident side and measured the roadways.

Although qualified as an expert, appellants’ expert witness did not provide an adequate basis for the jury to find Remmert more causally negligent than Diaz. Mr. Berkovitz testified that Diaz’s 2006 Chevrolet Silverado impacted Remmet’s 1999 Nissan causing approximately two feet of direct contact with the Remmert’s vehicle. He opined that the damage patterns to the Remmert’s vehicle indicate a “classic vehicle-under ride” where there was contact between the front bumper of that vehicle with the front bumper of Diaz’s vehicle, crushing the front hood of Remmert’s vehicle. Mr. Berkovitz opined that this occurred as a result of Remmert applying his breaks at the moment of impact and because Diaz’s vehicle was situated much higher than Remmert’s vehicle. He also opined that the accident was a low-speed collision, corroborating Remmert’s testimony that he drove at a speed of approximately 15-20 miles per hour. Mr. Berkovitz concluded that speed was not a factor in this type of accident.

Mr. Berkovitz described the characteristics of the intersection where the accident occurred. He noted that there were no parking restrictions on the comer where the accident occurred. He opined that, based on his survey and investigation, a vehicle parked on Memphis Street, as described by both Diaz and Remmert, would obstmct Diaz’s view of oncoming traffic from East Somerset Street.

Notably, Mr. Berkovitz did not testify as to fault. Although Pennsylvania law permits his expert opinion on the ultimate issue, Mr. Berkovitz did not make any conclusions as to whom caused the accident, or in what proportion. Most of Mr. Berkovitz’s testimony merely corroborated Diaz’s and Remmert’s already consistent descriptions of the accident. His testimony added very little to what the jury already heard from Remmert and Diaz. Thus, appellants’ expert witness did not provide competent evidence for the jury to find appellee Remmert causally negligent to a degree greater than Diaz.

II. THE JURY’S VERDICT FINDING APPELLEE REMMERT MORE NEGLIGENT THAN APPELLANT DIAZ IS NOT SUPPORTED BY THE WEIGHT OF THE EVIDENCE.

A new trial should be granted where the verdict is so contrary to the evidence that it “shocks one’s sense of justice.” Henery v. Shadle, 661 A.2d 439, 441, allocator denied, 668 A.2d 1133 (1005) and an appellate court should not set aside a trial court’s decision unless the trial court abused its discretion. Davis v. Mullen, 565 Pa. 386, 390,773 A.2d 764, 766 (2001). There are a limited number of circumstances for granting a new trial. Hallowell v. Wuestkamp, 24 Pa. D. & C.4th 99, 101 (Com. Pl. 1995) aff’d. 449 Pa. Super. 706, 673 A.2d 409 (1995). A court may not grant a new trial merely because it would have reached a different result. Nudelman v. Gilbride, 647 A.2d 233, 236 (Pa. Super. 1994). Pennsylvania courts have repeatedly emphasized, however, that where the verdict results in a miscarriage of justice, it is this court’s duty to grant a new trial. Com. v. Murray. 597 A.2d 111, 113 (1991). The same standard for granting a new trial applies to reapportion liability. Thompson v. City of Philadelphia, 507 Pa. 592, 598, 493 A.2d 669, 672 (1985)

The jury found Remmert more causally negligent than Diaz. Under Pennsylvania’s Comparative Negligence Act, a jury may apportion liability between the plaintiff and the defendant where there has been damage to property or personal injury. Keller v. Re/Max Ctr. Realty, 719 A.2d 369, 371 (Pa. Super. Ct. 1998). A plaintiff whose negligence is found to be greater than 50% cannot recover from a defendant. 42 Pa.C.S.A. §7102; Elder v. Orluck, 515A.2d 517 (1986).

Even though the court did not specifically mention plaintiff’s duty of care, it explained the law concerning negligence and causation and then properly instructed the juiy to determine appellant’s causal negligence, if any, appellee’s causal negligence, if any, and then to apportion the combined causal negligence between the parties. This instruction was certainly adequate.

Fish v. Gosnell, 316 Pa. Super. 565, 580, 463 A.2d 1042, 1050 (1983)

Here, the jury’s finding that Remmert was more negligent than Diaz is against the weight of evidence. Benchmarking the relevant statutes and requirements of the Motor Vehicle Code against the facts and testimony presented at trial, there are no bases upon which the jury could have found Remmert more negligent than Diaz; thus the jury verdict indeed “shocks one’s sense of conscience.” A new trial should not be granted where the evidence is conflicting and the juiy may have found for either party. Peair v. Home Ass’n of Enola Legion No. 751, 287 Pa. Super. 400, 410, 430 A.2d 665, 670 (1981) But here, the evidence did not conflict. Testimony from Remmert, Diaz, and Diaz’s own expert witness were consistent as to how the accident occurred; Remmert proceeded along East Somerset Street at a speed of 15-20 mph, approached Memphis Street, noticed that a parked truck blocked his view of Memphis Street, and continued along East Somerset Street at the same speed because he had the right-of-way. Diaz drove along Memphis Street, stopped at the stop sign, and then proceeded to move into the intersection while making a left turn onto East Somerset Street. The visibility of the intersection was blocked, however, as Diaz was making his left turn, he struck Remmert’s vehicle. Nothing in the record supports Remmert being more causally negligent than Diaz. The verdict of the jury was therefore against the weight of the evidence and post-trial relief in the form a new trial was appropriate.

CONCLUSION

Appellees, Gerald and Kathy Remmert, are entitled to a new trial. The ruling by this court of February 23, 2013 should be upheld.

      . Appellee Kathy Remmert was barred from recovery for her loss of consortium claim.

      . The court did not require the filing of a formal statement of matters complained of pursuant to Pa.R.C.P. 1925(b), as counsel had aptly articulated the relevant issues at the post-trial motion phase.