March 12, 2008

Casualty
Litigation
Digest
March 2008

Nationwide Mutual Insurance Co. v. Yungwirth, 1260 WDA 2006 (Pa. Super. 2008)

Novitski v. Rusak, 431 MDA 2007 (Pa. Super. 2008)

Brink v. Erie Insurance Group, 1958 MDA 2006 (Pa. Super. 2008)

Erie Insurance Exchange v. E.L , 569 WDA 2007 (Pa. Super. 2008)

Nationwide Mutual Insurance Co. v. Yungwirth,
1260 WDA 2006 (Pa. Super. 2008)

Exclusion of ATV from coverage did not impermissibly narrow UM coverage under the Motor Vehicle Financial Responsibility Act.

Superior Court affirmed the decision of the Allegheny County court, which granted defendant-insurer’s petition for declaratory judgment. Plaintiff-father’s son was injured while riding as a passenger on an all-terrain vehicle (ATV) while it was being driven off-road. Plaintiff sought coverage under the UM portion of his insurance. Defendant denied coverage, citing the exception in the policy for accidents occurring on off-road vehicles, except while on public roads.

Plaintiff contended that the policy impermissibly narrowed the UM coverage as provided by the Motor Vehicle Financial Responsibility Law (MVFRL). Defendant filed a declaratory judgment petition with the trial court, and plaintiff counterclaimed. After cross-motions for summary judgment and a trial on stipulated facts, the trial court found that the exclusions were contrary to the law and ruled in plaintiff’s favor.

On appeal, defendant argued that the UM provisions of the MVFRL did not extend to ATV”s, and that the enactment of the Snowmobile All-Terrain Vehicle Law (SATVL) created a special class of vehicles which were distinct from the vehicles contemplated by the MVFRL. The Court determined that the snowmobile law plainly created separate and specific requirements that applied only to such vehicles.

Using principles of statutory construction, the Court held that reading the statutes together, the specific provisions of the SATVL superseded the general definition of a motor vehicle contained in the Motor Vehicle Code. The Court concluded that the insurance policy’s exclusion did not impermissibly narrow the MVFRL. The Court noted that this finding was consistent with the public policy behind the MVFRL, as well as the determination of Commonwealth Court on a similar question.

Accordingly, the decision of the trial court was reversed and the matter was remanded for entry of a judgment in favor of defendant.

Novitski v. Rusak,
431 MDA 2007 (Pa. Super. 2008)

Testimony as to plaintiff’s lost future earnings was admissible, despite an the absence of an explicit recommendation by plaintiff’s doctors that his workday be reduced on account of injuries suffered.

Superior Court affirmed the decision of the Luzerne County court, which entered a judgment in favor of plaintiffs for $443, 040.14. Defendant caused a car accident and plaintiff filed suit alleging, among other things, loss of future earnings capacity. Before trial, the parties stipulated to liability, and defendant sought to exclude the testimony of plaintiff’s experts on vocational rehabilitation and economic loss. The trial court denied this motion and the matter proceeded to trial.

At trial, plaintiff testified to soreness in his neck and right arm. Shortly after the accident, plaintiff lost his job due to downsizing. Defendant received unemployment compensation and found other employment five months later. Defendant’s doctor testified that defendant suffered two herniated discs that had continued to worsen and were the cause of defendant’s pain, his inability to work after his layoff, and his deteriorating ability to function. A second doctor testified on plaintiff’s behalf and also confirmed plaintiff’s reduced ability to function.

Plaintiff’s vocational rehabilitation consultant testified that plaintiff was realistically able to only work three-quarter time, given the physical nature of his line of work, and the pain he continued to suffer. This loss was estimated at $10,000.00 to $16,000.00 annually. Plaintiff’s economic expert calculated plaintiff’s future lost earnings at $449,000.00 to $1,065,000.00 over his expected lifetime. At no time did any of the medical experts make the recommendation that plaintiff limit his work duties.

The jury returned a verdict of $300,000.00 on the non-economic charges and $100,000.00 for future lost earning capacity. Defendant filed a post-trial motion arguing, among other things, error in the admission of the expert testimony of the vocational rehabilitation consultant and the economist as to future lost earning capacity. All post-trial motions were denied and plaintiff was awarded delay damages.

On appeal, defendant contended that admission of the rehabilitation consultant was improper, since there was no competent medical evidence to support the opinion that the accident had impacted on plaintiff’s ability to work. For the same reason, defendant asserted error in the admission of the economist’s testimony. The Court noted the liberal standard for the qualification of an expert witness and found that the experts in question were qualified to render an opinion on the areas in which they were questioned.

The Court further concluded that there was sufficient testimony linking all of plaintiff’s injuries to the motor vehicle accident such that the medical testimony unquestionably indicated that plaintiff’s injuries would likely impact on his ability to work. The Court declined to find that any one of the doctors was required to explicitly state that plaintiff’s work activities had to be restricted.

Since all the assumptions made by the experts were based on solid medical testimony, the Court could find no error in the admissions of the experts’ testimony and the verdict below was affirmed.

Brink v. Erie Insurance Group,
1958 MDA 2006 (Pa. Super. 2008)

Plaintiff’s use of a police vehicle in the regular course of his employment was sufficient to allow Insurer to employ the “regular use” exclusion in the UIM portion of plaintiff’s coverage, when plaintiff was injured while driving his police car.

Superior Court affirmed the decision of the Dauphin County court, which granted defendant-insurance company’s motion for judgment of the pleadings filed by plaintiffs. Plaintiffs had purchased personal automobile insurance with a provision for UIM coverage. Plaintiff-husband was injured in the course of his employment as a police officer while driving a department vehicle. The other motorist did not have sufficient coverage to compensate plaintiff for his injuries, prompting plaintiff to make a claim to recover UIM benefits under his policy.

Defendant denied the claim, relying on the exclusion in the policy that prohibited compensation when the insured was driving a non-owned vehicle that was regularly by plaintiff but not insured under the policy. Plaintiffs filed a breach of contract action, alleging that defendant had acted in bad faith. Defendant filed a petition seeking declaratory judgment and ultimately the instant motion for judgment on the pleadings. Plaintiffs argued that the exclusion provision was ambiguous and did not apply because plaintiff’s use of the car was not “regular.”

In analyzing the contract provision, the Court found that the language used was not ambiguous. Plaintiff argued that his use was not regular because the car in question was a part of a fleet, and had not been particularly assigned to him in the course of his employment. The Court looked to a federal court interpretation of this provision and agreed that it did not matter that plaintiff did not use the same car each time he drove on the job, but since vehicles in the fleet were available for plaintiff to drive during work, and he routinely used the fleet vehicles, the regular use clause barred recovery.

Secondly, the Court dismissed plaintiffs’ argument that they had a reasonable expectation of coverage. Where the language of the “regular use” provision was clear and unambiguous, plaintiffs’ reasonable expectations were not controlling. Finally, the Court dismissed the contention that the “regular use” provision violated public policy, as that issue had been ruled on by the Pennsylvania Supreme Court and had been resolved in defendant’s favor. Accordingly, the decision was affirmed. Judge Daniels concurred in the result.

Erie Insurance Exchange v. E.L ,
569 WDA 2007 (Pa. Super. 2008)

Insurer’s failure to define the term “use” in motor vehicle policy required ambiguous UIM provision exclusion to be resolved in insured’s favor.

Superior Court reversed the decision of the Somerset County court, which granted plaintiff-insurer’s motion for judgment on the pleadings. Defendant-minor had been injured in a motor vehicle accident while her brother was driving their mother’s car. As a result of her injuries, the minor used the entire amount of coverage available on her mother’s policy. Her father had coverage through plaintiff and had $100,000.00 in UIM protection stacked on five vehicles. Father filed a claim and was denied based on the “regularly used non-owned vehicle exclusion.”

Plaintiff filed a motion for declaratory judgment and then a motion for judgment on the pleadings, which was granted. The insurance policy did not provide a definition for the term “use” but did define the term “occupy”. The trial court relied on precedent to determine that exclusionary clause was properly applied, if defendant could be said to be using the car. Defendant argued that she could not be said to be using the car, therefore the exclusion did not apply. The trial court reasoned that, since benefits were not available to the brother as a driver, defendant as a passenger should not be entitled to benefits either. The trial court concluded that the terms “use” and “occupying” could be applied interchangeably. On appeal, defendant argued that the terms were not interchangeable and that she was not using a motor vehicle at the time of her injury.

On appeal, the Court agreed with defendant’s argument, noting that “use” did not appear in the policy’s definition of “occupying.” The Court then turned to defining the term “use” and acknowledged that both parties presented compelling arguments for a definition.

In light of this, the Court concluded that the contractual language was ambiguous and must be construed in favor of defendant. Plaintiff was obligated to use a more precise definition for such a common word when writing its policy if it intended to prevail under the facts of this case. Since the court below was determined to have committed an error of law, the matter was remanded and the trial court was directed to enter summary judgment in favor of defendant.

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