Roughly eight years after the state Supreme Court reshaped how underinsured and uninsured motorist claims are resolved by allowing them to go to trial, the first wave of those cases are beginning to be tried to juries.
According to attorneys who spoke with the Law Weekly, the delay can be traced to the complex nature of the cases, cost concerns and trepidation on behalf of attorneys to be the first to wade into untested waters in front of a jury. However, while the first wave of these cases to hit the trial stage has been slow in coming, most attorneys agree that more and more UM and UIM trials are soon to follow.
Parties in UM and UIM cases were first allowed the option to take their cases before a jury after the state Supreme Court’s December 2005 ruling in Insurance Federation of Pennsylvania v. Koken, which held that carriers were no longer required to include mandatory arbitration clauses in UM and UIM policies.
According to personal injury attorney Scott B. Cooper of SchmidtKramer in Harrisburg, the cases are now lining up for trial after years of disputes at the discovery phase.
“From an overall perspective, this is the first big wave that’s starting to happen,” Cooper said. “There were tons of cases where there were discovery disputes. By now they’ve worked through the system and we are seeing more and more coming to fruition.”
Scranton, Pa.-based defense attorney Daniel E. Cummins, who has been closely following post-Koken litigation development, said the cases have only started going before juries in the past two years and that he had heard of fewer than 10 cases that went before a jury in the past year. Too few verdicts have come down to see how juries will view the cases, Cummins said.
“Some people think people are pissed at insurance companies and want to whack them, and some see the system as a way for people to make easy money,” said Cummins, who is a Law Weekly contributor. “There have been a whole smattering of different kinds of results in the handful of cases I’ve heard about.”
The main reason cases have been so slow to come to trial is that the majority of cases are still going to arbitration, attorneys who spoke with the Law Weekly agreed. By arbitrating, parties can avoid the uncertainty of trial and also save on litigation costs.
“You see more and more get to the eve of trial with motions in limine, and once the judge makes a decision, the cases settle,” Cooper said. “It’s more inexpensive and more expeditious. You don’t need live witnesses, and the lawyers know all the issues.”
Attorneys agreed that the one thing they have consistently seen with post-Koken UM and UIM cases is an increase in the number of high-low agreements the parties make before arbitration.
According to Cummins, the expectation following Koken was that the ruling would spark an uptick in claims that would slam juries across the state.
“It’s certainly been overrun with more cases, but the way it’s played out is that it’s not going to trial,” Cummins said. “You never know what’s going to happen when you go to a jury, therefore people keep moving toward binding high-low arbitration.”
Proceeding Without Guidance?
So far, parties in UM and UIM cases have mostly been battling out discovery and pretrial issues, such as joinder, consolidation and venue. Without much guidance from the appellate courts, different trial courts have come down on different sides of the various issues, attorneys agreed.
Last year, the state Supreme Court made its first ruling on issues relating to whether attorneys representing the tortfeasor and the insurance carrier should participate at trial, effectively doubling up against a plaintiff at trial. In Stepanovich v. McGraw, the high court found that the plaintiff’s due process rights were not violated when a trial court allowed separate counsel for the driver and the insurance carrier to participate in the trial without any mention of the UIM carrier as a defendant.
However, months before the Stepanovich holding, U.S. District Judge James M. Munley of the Middle District of Pennsylvania decided in Noone v. Progressive Direct Insurance that information regarding the amount of the insurance premiums and the policy limits was admissible.
Additional issues that remain to be resolved include whether the case should be bifurcated, the way in which different defense attorneys should be able to examine witnesses, and whether the carrier should be listed on the jury slip or if the judge should simply mold the verdict afterward.
According to Cooper, the federal courts, particularly the U.S. District Court for the Western District of Pennsylvania, have largely been leading the way in post-Koken decisions. However, attorneys agreed that the more cases come to trial, the faster these issues will be resolved.
Push to Trial
While attorneys agreed that the vast majority of cases are being arbitrated, some attorneys prefer trial.
Philadelphia personal injury attorney Marc Simon of Simon & Simon and defense attorney J. Michael Flanagan of Flanagan and DiBernardo both said they are eager to take their UM and UIM cases before juries.
“As we begin to bring in more cases where clients have UIM or UM cases, we’re always going to opt to file in the court systems instead of going to an arbitration process,” Simon said. “We want to get these cases in the trial court. We want them as jury cases. We want juries to decide these issues and judges to decide these issues. We want juries to see the insurance companies’ names on the verdict slip and we don’t get that effect by demanding arbitration.”
Last month, a Philadelphia jury awarded one of Simon’s clients $100,000 in a UIM case, and in September 2013 Flanagan got a defense verdict in a phantom vehicle case for his insurance carrier client in Lancaster County.
Flanagan, who typically works in the middle of the state, said the juries he has seen have been sympathetic to insurance carriers.
“Out here in Central Pennsylvania, I’m very happy that we now have our juries back,” Flanagan said. “I’ve got several [cases] that I’m lining up to get to trial, and I’m looking forward to doing it.”
According to Flanagan, having a carrier listed as a defendant before the jury has added to the voir dire questioning, but he has found mid-state juries are more likely than arbitration panels to award a modest figure.
“There’s something of a bias against insurance companies. That can’t be denied,” Flanagan said. “But it’s not, in my view, as heavy a bias as existed under the old arbitration system.”
Flanagan also noted that bad-faith actions had been tossed into nearly all of the UM and UIM cases he has handled. However, the actions have been overwhelmingly stayed pending the outcome of the trial, he said, and as a result, fewer and fewer plaintiffs attorneys are pursuing the bad-faith angle.
Attorneys who spoke with the Law Weekly projected that within the next year appellate courts will begin dealing more with unresolved questions now being fought out at the trial level, and within five years the case law will begin firming up.
“Hopefully we’ll see more cases going to verdict and climbing up the appeal ladder to get some much-needed appellate guidance to see how to handle the trials,” Cummins said. “Once there’s more certainty to see how trials will be held, depending on what those rules are, you might see an uptick in the trial, instead of the arbitration.”
Max Mitchell can be contacted at 215-557-2354 or firstname.lastname@example.org. Follow him on Twitter @MMitchellTLI. •