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The state Supreme Court’s session in Philadelphia this week will include arguments on a city casino owner’s right to build on state-owned river lands, as well as arguments on three automobile insurance cases.

During the April 14-17 session, the justices will also hear arguments on the forfeiture of property unrelated to a crime by a criminal defendant, and whether Philadelphia is liable under the Tort Claims Act for mismanaging a deferred compensation plan for more than 12,000 city employees.

The session will be the second since former Chief Justice Ralph J. Cappy’s resignation in which the court will hear arguments with less than a full complement of justices. Gov. Edward G. Rendell’s nomination of former Commonwealth Court Judge James Gardner Colins as Cappy’s interim replacement is stalled in the state Senate.

Gaming

In the ongoing fight over gaming in Philadelphia, state lawmakers and City Council filed petitions for review of former Mayor John F. Street’s decision to grant HSP Gaming rights to build its SugarHouse Casino on submerged land in the Delaware River.

Even though Philadelphia Mayor Michael A. Nutter countermanded Street’s decision when he took office in January, it remains the subject of litigation initiated by state Sen. Vincent J. Fumo, D-Phila., and members of City Council. HSP Gaming is appealing Nutter’s decision in a separate case.

The court limited the arguments to two main issues.

It will look at whether the state or the city of Philadelphia has the right to authorize construction on the submerged lands under the Delaware River and whether the city of Philadelphia may revoke a validly issued license while the appeal of the issuance of the license is before the Supreme Court, according to the court’s orders granting the petitions.

HSP Gaming is an intervenor and successfully applied to have the arguments moved ahead to April 15 from the court’s May session. In its application, HSP Gaming said a purchase agreement for the land near the old Jack Frost sugar refinery site where the company plans to build SugarHouse is scheduled to be executed on May 12, the same day as the oral arguments. At that time, the company would owe approximately $70 million, according to the application.

Because the court, in its order, closed the pleadings and said it would take all other ancillary matters under advisement, HSP Gaming argued in its application none of the parties would be adversely affected by holding the arguments earlier.

City Employees

In McShea v. the City of Philadelphia, the court will consider the Commonwealth Court’s reversal of a Philadelphia Common Pleas judge’s judgment entered against the city of Philadelphia in the management of the deferred compensation plan of over 12,000 Philadelphia city employees.

At the trial level, the $3.76 million judgment was granted in favor of the class of city employees who claimed that city officials had mismanaged the deferred compensation plan they belonged to. Senior Judge Stephen E. Levin, citing statutory immunity, dismissed the plaintiffs’ claims against the city for breach of fiduciary duty and request for an accounting, but kept alive the claim that the city committed gross negligence in managing the plan.

The Supreme Court will consider if the Commonwealth Court misapplied state law when deciding that the city was immune under the state’s Tort Claims Act from the plaintiff’s gross negligence claim. The Supreme Court will also consider if the Commonwealth Court misapplied the pleading requirements of Pennsylvania Rule of Civil Procedure 1019 for the plaintiffs to identify specific legal theories in their complaint when the Commonwealth Court decided that the plaintiffs were asserting a tort claim, instead of a contract claim.

Forfeiture

In Ex Rel John Singleton v. Johnson, the Supreme Court will hear the case of a Philadelphia burglary defendant who sought the return of jewelry he was wearing when arrested and that authorities couldn’t directly connect to any crime.

The specific issue before the court is if city of Philadelphia prosecutors can prevail in a forfeiture proceeding when prosecutors did not present evidence that a forfeited Gucci watch and gold-colored bracelet were linked to the burglary crimes that petitioner John Singleton was convicted of.

A split en banc Commonwealth Court panel ruled that Singleton wasn’t entitled to the return of the items without the provision of receipts and because a “nexus” had been established by authorities between the jewelry and criminal activity by Singleton. Judge Dan Pellegrini wrote for the five-strong majority.

In a two-judge dissent, Judge Rochelle S. Friedman said that inference of criminal activity was not the same thing as proven facts, so forfeiture of the jewelry was not reasonable.

Auto Insurance

In Vanderhoff v. Harleysville Insurance Co., the court will consider whether an insurance company must prove prejudice when an insured reports the involvement of an unidentified vehicle in an accident to police, but does not immediately report it to his insurer.

The Superior Court reversed a trial court ruling that the insured Forrest Vanderhoff did timely report the unidentified vehicle, ruling that under Section 1702(3) of the MVFRL, Vanderhoff could not make a claim for uninsured insurance benefits. The court also ruled that Harleysville did not have to prove prejudice as a result of the late report to deny the claim.

Vanderhoff argues that the Supreme Court’s 1977 opinion in Brakeman v. Potomac Ins. Co. requires the insurer to prove prejudice because an insurance policy is a contract of adhesion and the burden of proof falls to the writer. Further, he argues that because he was covered by an employer’s insurance policy, he would not be aware of the policy’s reporting requirements until he realized a serious claim exists.

In Nationwide Insurance Co. v. Schneider, the court will consider whether credits can be given to an insurer in order to trigger UIM benefits.

Nationwide is appealing the decision of an en banc Superior Court panel allowing Paul P. Schneider, an Upper Darby Township, Pa., police officer injured in a crash on duty, to collect under insured motorist benefits from a secondary insurer although he had not exhausted his benefits from a primary insurer.

After he was rear-ended by another motorist, the officer collected the $15,000 limit of the motorist’s policy, and settled for $750,000 of the township’s $1 million limit. He then approached Nationwide, his personal insurer for UIM coverage.

Nationwide argues that because Schneider did not seek consent from Nationwide to settle with the primary UIM insurer and he failed to exhaust its coverage, he is barred from collecting additional benefits.

In Tannenbaum v. Nationwide Insurance Co., the court will consider whether the recovery of UIM benefits is barred by Section 1722 of the MVFRL when an insured has already collected benefits from a disability policy.

Nationwide argues that the Superior Court overlooked the cost containment goals of the law when it allowed Dr. Alan Tannenbaum to collect UIM benefits under his wife’s insurance policy. The Superior Court affirmed a Bucks County Common Pleas judge who vacated an arbitration award of UIM benefits less than the available policy limit.

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