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A person does not have a right to demand a jury trial in a bad faith case, the Superior Court has ruled in a case on remand from the Pennsylvania Supreme Court. The Superior Court had originally afforded such a right under Section 8371 of the Judicial Code the first time it heard Mishoe v. Erie Ins. Co. Then, the state supreme court, in a June per curiam order, both granted allocatur and remanded the case so the Superior Court could re-examine the trial by jury issue in light of the high court’s ruling in Wertz v. Chapman Township. In Wertz, the justices held there is no right to a jury trial in employment discrimination cases brought under the Pennsylvania Human Relations Act. The Mishoe court on remand relied heavily on Wertz in rendering its decision in the case of first impression. “As in Wertz, the Legislature [in drafting Section 8371] chose to use the term ‘court’ rather than include the word ‘jury,’ ” Judge John G. Brosky wrote. “ Use of this term provides evidence that ‘it is a tribunal, rather than a jury’ which is to make the determination.” “This strong indication which the Supreme Court found significant in Wertz, coupled with a lack of legislative history on the issue of a jury trial, as well as the presumption that the absence of an express grant of a jury trial means that the Legislature did not intend to so provide, constrains us to conclude that a claimant seeking relief pursuant to Section 8371 is not entitled to a jury trial under the provisions of the statute.” The middle appeals court also shot down the argument that Article I, Section 6, of the state constitution provides a trial by jury in bad faith cases. The court said that such a right to a jury trial is allowed only for the types of cases that existed at the time the state Constitution was adopted in 1790. Brosky was joined in the unanimous opinion by Judges Joan Orie Melvin and Zoran Popovich. The court was careful, however, to preserve prior rulings dealing with evidence issues in bad faith cases. The court said the Mishoe ruling does not ignore prior rulings in O’Donnell v. Allstate Insurance or The Birth Center v. St. Paul Cos. Inc., but rather the court was not “presented squarely” with the jury trial issue in those cases. Mishoe was presented to the court as a consolidated appeal with companion case, Hamer v. Federal Kemper Ins. Co. The superior court’s original unpublished memorandum opinion reversed trial courts in Lancaster and Blair counties, which had denied plaintiffs’ demands for jury trials. In both county court cases, the plaintiffs had sought jury trials in the bad faith suits that they filed after arbitration panels awarded them 10 times or more the sum they had been offered by their insurance companies to settle uninsured motorist claims stemming from motor vehicle accidents. The defendants in the 1998 bad faith actions were Erie Insurance Co. and Federal Kemper Insurance Co. STATUTORY CONSTRUCTION The bad faith statute is silent on the right to a jury trial. The statute, found in the Judicial Code, reads as follows: “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 attorney fees against the insurer.” On remand, the court first used a statutory construction analysis in addressing the jury trial issue. Mishoe and Hamer argued that under such an analysis, the word “court” as used in the statute did not limit the determination to a judge and that the Legislature’s intent was to allow a jury to decide such cases. The court turned to the high court’s statutory construction analysis in Wertz. In Wertz, the supreme court said that the Legislature’s use of the word “court” was “strong evidence” that “it is a tribunal, rather than a jury, that is to make findings and provide relief.” Unlike Wertz, however, the court in Mishoe had the privilege of a definitional section in the statute defining the terms “court” and “judge.” The term “court” under the statute “includes any one or more of the judges of the court who are authorized by general rule or rule of court, or by law or usage, to exercise the powers of the court in the name of the court.” The insurers argued that a strict interpretation of the word “court” means only “trial judge,” not jury. The plaintiffs, on the other hand, argued that “court” is “unduly restrictive” and should include both a judge and a jury. The court said although it had the definitions to rely on, the definitions did not “concretely define” the terms but merely provided an “exemplary guidance.” The court then turned to analyzing the case under the guidelines set forth in Wertz. “While appellants are correct that the Legislature could have used the term ‘judge’ in place of the word ‘court’ in Section 8371 if it did not intend a jury trial to be available thereunder, close examination of the statute under the principles in Wertz leads us to reject their argument,” Brosky wrote. “As in Wertz, the Legislature chose to use the term ‘court’ rather than include the word ‘jury.’ “ The court then said that under Wertz, persons seeking remedy under the bad faith statute do not have a right to a jury trial. Mishoe and Hamer further argued that allowing a trial by jury in bad faith cases would “favor public interest.” The court, however, said even if it believed it to be in the public’s best interest, the court was bound by the statutory analysis. CONSTITUTIONAL ISSUES After rendering its opinion based on a statutory analysis, the court then turned to the constitutional issues. Mishoe and Hamer argued that the state constitution provided a common law right to a trial by jury. The court said that because the cause of action under 8371 did not exist in 1790, there is therefore no common law right to a jury trial in bad faith cases. The plaintiffs urged the court to look at the nature of the relief requested by the bad faith statute, i.e. punitive damages, but the court said the supreme court clearly rejected such an approach in Wertz. “The underlying cases in this appeal are not simply actions on an insurance policy,” Brosky wrote. “Rather, these are actions filed pursuant to the statutorily created remedy set forth in Section 8371 of the Judicial Code, which was not cognizable until its 1990 enactment.” The middle appeals court also rejected a similar argument under the Seventh Amendment to the U.S. Constitution. REACTION Thomas B. Schmidt of the Harrisburg, Pa., office of Pepper Hamilton represented Erie, Pa., and said the decision is a significant one because “it establishes clearly that the present law in Pennsylvania does not provide for a jury trial in actions brought pursuant to Section 8371.” Dara A. DeCourcy of Zimmer Kuntz represented Federal Kemper and agreed on the significance of the decision. Lancaster, Pa., attorney Joseph F. Roda represents Edward Mishoe, and Altoona, Pa., attorney Joseph P. Nypaver represents Nancy Hamer. Both said Friday they will appeal the superior court’s decision to the supreme court. “We believe that one could reasonably adopt a different position on both the statutory construction and the constitutional issues,” Roda said. Roda said he believes there are significant differences between the instant case and Wertz. Nypaver agrees and said that he thinks if the high court intended the decision to follow Wertz so closely, the supreme court would have simply reversed in the original order rather than remand for reanalysis. Nypaver said the fact that Section 8371 contains definitions as guidelines is one thing that differentiates the case from Wertz. The attorney also said he hopes he and Roda get a chance to argue the constitutional issues to the high court. Specifically, Nypaver said the issue of punitive damages provides a common law right to a jury trial because the remedy of punitive damages from a contract claim has been around since before 1790. Nypaver said it is also in the public’s best interest to have bad faith cases heard by a jury. Schmidt said he didn’t want to speculate on whether the supreme court would agree to hear the case but he did say, “I think that the supreme court’s order remanding the case in light of Wertz predicts its likely response to a petition for allocatur.”

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