A Summary Of Recent Pennsylvania Appellate Decisions
PENNSYLVANIA STATE COURT DECISIONSIt seems as though the Pennsylvania Supreme Court ends everycalendar year by issuing numerous Opinions, with the volumeincreasing any year in which a Justice is leaving the bench.With Justice Nigro's unceremonious removal from the bench at thebehest of voters irate because the legislature decided to awarda large pay raise to itself and the judiciary, 2005 was noexception. Consequently, the decisions reviewed in this issueare grouped by Court rather than by topic.1. SUPREME COURT OF PENNSYLVANIA1.1. AUTOMOBILE INSURANCE► Uninsured & Underinsured Motorist Claims♦ Insurance Federation of Pennsylvania, Inc. v.Commonwealth, Department of Insurance No. 2007 MAP 2003(December 30, 2005)Holding: The Insurance Department overstepped its legislativemandate and does not have the authority to require mandatorybinding arbitration in uninsured and underinsured motoristdisputes. Consequently, insurance carriers may require that UMand UIM claims be resolved in the courts or, presumably, byother means specified under the insurance contract. JusticeSaylor filed a dissenting opinion, joined by Justice Castille.This decision will likely portend the demise of arbitration asthe preferred method for deciding uninsured and underinsuredmotorist claims. It seems ironic, however, that carriers wouldseek to avoid arbitration when insurers, credit card companies,and businesses of all types, are including arbitration clausesin their agreements. Of course, these anti-consumer provisionsgenerally preclude appeals, limit punitive damages, andotherwise restrict the nature of allowable claims. It is safe toassume that auto insurers will likely propose similar provisionsfor approval by the Insurance Department. With this SupremeCourt Opinion, the question arises whether the InsuranceDepartment can prohibit such provisions. Time will tell.♦ State Farm Mutual Automobile Insurance Co. v. Foster No.2007 MAP 2003 (December 30, 2005)Holding: An insurer may deny uninsured motorist benefits to aninsured claimant who fails to report the accident to the policeor other governmental authority as required by the policy andthe Motor Vehicle Financial Responsibility Law, 75 Pa.C.S. §§1701-1799.7. Justice Saylor filed a concurring opinion,concluding that regardless of the language of the MVFRL, acarrier may include a police notification provision in the termsof an auto insurance policy. Justice Baer filed a dissentingopinion, joined by Justice Castille, in which he characterizedthe provision at issue as a "technical escape hatch by which todeny coverage in the absence of prejudice." Justice Nigro didnot participate in the decision of the case.1.2. CIVIL PROCEDURE► Service of Process♦ McCreesh v. City of Philadelphia No. 31 EAP 2005(December 28, 2005)Holding: After an action has been commenced, a plaintiff mustprovide notice of the action to the defendant in order for thepurpose of the statute of limitation to be fulfilled. Acomplaint should, therefore, only be dismissed in those cases inwhich the plaintiff has demonstrated an intent to stall thejudicial machinery or when plaintiff's failure to comply withthe Rules of Civil Procedure has prejudiced the defendant.Justice Newman filed a dissenting opinion. Justice Eakin alsofiled a dissenting opinion, joined by Justice Nigro.The Supreme Court has yet again revisited its decision in Lampv. Heyman, 366 A.2d 882 (Pa. 1976). In McCreesh, the Court nowholds that a plaintiff need not strictly comply with the Rulesby repeatedly reissuing a writ of summons; instead, the Courtlooks to the good faith efforts of a plaintiff to effectuateservice, including considering whether a defendant has actualnotice of the litigation and is not prejudiced by the lack ofstrict compliance with the Rules of Civil Procedure. The factshere - in which plaintiff attempted to serve the writ bycertified mail in clear violation of the Rules - are certain togenerate further litigation. The true food for thought - andfurther litigation - appears in Justice Eakin's dissent, inwhich he states:The "majority has developed a new rule holding a trial court mayonly dismiss a case where there is ineffective service in twodistinct situations: (1) where the plaintiff's actions evidencean intent to stall the judicial machinery, or (2) where theplaintiff's failure to comply with the Rules of Civil Procedurehas actually prejudiced the defendant. . . .The majority goes sofar as to suggest that without prejudice, actual notice itself,much less proper service, may be unnecessary."1.3. WORKERS' COMPENSATION►Impairment Rating Evaluations (IREs)♦ Gardner v. Workers' Compensation Appeal Board No. 14 EAP2004 (December 28, 2005)Holding: An employer/workers' compensation carrier must requestthat a workers' compensation claimant submit to an ImpairmentRating Evaluation within sixty (60) days from the date that theclaimant receives, or comes into possession of 104 weeks oftotal disability benefits in order to obtain the automaticrelief under 77 P.S. § 511.2(2). If an employer fails to requestan IRE within this time period, it may still request an IRE at alater date pursuant to 77 P.S. § 511.2(6), but must utilize thetraditional administrative process in order to modify aclaimant's disability status. Justice Nigro filed a concurringopinion, and Justice Newman filed a dissenting opinion.Workers' compensation practitioners who had been awaiting thedecision in Gardner now know that an employer/insurer canrequest an IRE up to two times within any twelve-month period.The only limitation on an employer's right to an IRE is that theemployer cannot avail itself of the automatic relief under theAct if the exam is not requested within 60 days of theemployee's receipt of 104 weeks of benefits. In reality, thismeans that a workers' compensation carrier is now able to reducevirtually every claimant to partial disability status at anytime after the claimant has received two years of benefits.Although a claimant can try to defend against a modificationpetition based upon an IRE, the fact that literally no claimantcan meet the statute's requirement that he or she have a 50percent impairment means that any defenses will, at best, delaythe inevitable.►Physical Versus Mental Injuries♦ Panyko v. Workers' Compensation Appeal Board No. 37 WAP2004 (December 28, 2005)Holding: A claimant who suffers a purely physical injury, suchas a heart attack, because of a psychic reaction to a workingcondition, is not required to establish that the workingcondition was abnormal. Thus, claimants allegedly suffering fromphysical injuries are not required to show that their injuriesare the result of abnormal working conditions. Rather, they needonly show that (1) they are suffering from an objectivelyverifiable physical injury, and (2) the injury arose in thecourse of employment and was related thereto. Justice Saylorfiled a concurring opinion, and Justice Newman filed adissenting opinion.►Supersedeas Fund Reimbursement♦ Comm., Dept. of Labor & Industry v. Workers'Compensation Appeal Board (Exel Logistics) No. 37 WAP 2004(December 28, 2005)Holding: An employer is not entitled to Supersedeas Fundreimbursement for compensation and medical bills paid while aPetition for Forfeiture is pending because the petition forforfeiture was pursuant to § 306(f.1)(8), and not § 413 or § 430of the Act. Justice Newman filed a dissenting opinion, in whichJustices Castille and Baer joined.1.4. NEW RULES OF CIVIL PROCEDURE►Disclosure of Legal Malpractice Insurance Coverage ♦ Rule of Professional Conduct 1.4(c)Effective July 1, 2006, lawyers in private practice are requiredto notify their clients if they do not have professionalliability insurance of at least $100,000 per occurrence and$300,000 in the aggregate per year, subject to commerciallyreasonable deductibles. The Rule also specifies the language ofthe required disclosures, and mandates that attorneys maintain arecord of the disclosures for six years after termination of therepresentation of a client.►Consumer Credit Transactions♦ New Rules of Civil Procedure 1326 to 1331Effective February 1, 2006, the Court has promulgated Rules ofCivil Procedure governing proceedings to compel arbitration andto confirm an arbitration award in a claim arising from aconsumer credit transaction.2. SUPERIOR COURT OF PENNSYLVANIA2.1. ►Defamation - Conditional Privilege♦ Moore v. Cobb-Nettleton 2005 PA Super 426 (December 21,2005) Holding: A social worker, who makes professionaldisclosures required by Pennsylvania law, is entitled to aconditional privilege in a defamation lawsuit.2.2. ►Learned Intermediary Doctrine♦ Lineberger v. Wyeth 2005 Westlaw 3547682 (Pa. Super.,December 21, 2005) Holding: In a pharmaceutical failure to warncase, the plaintiff must establish both a duty to warn and afailure to warn. The plaintiff must also show that, had thedefendant issued a proper warning to the physician (the learnedintermediary), the learned intermediary would have altered hisor her behavior, i.e., would not have prescribed the drug, andthe injury would have been avoided.This is an unpublished opinion, although counsel for Wyeth hasstated that he will request that the Court publish the opinion.3. COMMONWEALTH COURT OF PENNSYLVANIA3.1. ►Workers' Compensation - Hepatitis C ♦ City ofPhiladelphia v. Workers' Compensation Appeal Board (Sites) No.1410 C.D. 2005 (December 21, 2005)Holding: Hepatitis C may be deemed an occupational disease evenif the condition was not specifically identified as anoccupational disease until after the claimant's diagnosis.3.2. ►Workers' Compensation - Suspension/Bad Faith♦ Virgo v. Workers' Compensation Appeal Board (County ofLehigh-Cedarbrook) No. 1167 C.D. 2005 (December 22, 2005)Holding: An employer is entitled to a suspension of benefitswhen an employee is discharged from employment because of "badfaith" in carrying out her job responsibilities. This is aclassic example of bad facts making bad law (at least forworkers' compensation claimants). One of the most commonquestions raised by injured workers is what happens if theyreturn to work at light duty and are then fired because ofallegedly unsatisfactory job performance. This case answers thequestions, holding that workers' compensation benefits may besuspended under those circumstances. Of course, in this case,the employee did not have a "clean" record, and it was easy forthe Court to uphold the suspension. What happens, however, whenthe unsatisfactory performance occurs only after the employee isat light duty and, as employees frequently claim, their firingis a pretext because the employer only wants them to work atfull duty? Time will tell.SUPERIOR COURT OF NEW JERSEY, APPELLATE DIVISION OPINION► Doe v. XYC Corp. No. A-2909-04T2 (December 27, 2005)Holding: An employer on notice that one of its employees isusing a workplace computer to access pornography, possibly childpornography, has a duty to investigate the employee's activitiesand to take prompt and effective action to stop the unauthorizedactivity, lest it result in harm to innocent third parties. Noprivacy interest of the employee stands in the way of the dutyon the part of the employer.Remember, visit the new Pennsylvania Legal Research Links, andmake www.palegallinks.com yourhome page for Pennsylvania research.
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