Kang Haggerty NewsThe Supreme Court of Pennsylvania has clarified the question of whether, under Pennsylvania law, an insured may transfer the right to recover damages against his or her insurance company in an insurance bad faith claim to a third party. In a recent decision in AllState Property and Casualty Insurance Company v. Jared Wolfe, No. 39 MAP 2014, 2014 WL 7088147 (December 15, 2014), the Supreme Court ultimately decided that yes, an insured may assign their rights to pursue an insurance bad faith action to a third party.
Articles Tagged with Pennsylvania
Shareholders, not the Corporation, Holds Attorney-Client Privilege for Communications Between the Shareholders and Counsel
On August 7, 2014, the Western District of Pennsylvania’s Judge Maurice B. Cohill, Jr. entered an order preliminary denying plaintiff’s motion to compel compliance with subpoena on counsel. In the case of Gary Miller Imports, Inc. v. Carter Dolittle, et al., plaintiff sought to compel the law firm of Macdonad Illig Jones & Britton, LLP to produce eight documents they felt did not fall under attorney-client privilege. Continue reading ›
Insurance Bad Faith Practice leads to $18 million Punitive Damage Award
A Pennsylvania state court has found Nationwide Insurance Co. engaged in bad faith in handling its insured’s first party auto insurance claim and in its litigation tactics when the dispute led to a lawsuit. The court’s forty page opinion catalogues the types of specific conduct that evidences bad faith in violation of Pennsylvania Insurance Bad Faith Statute ( 42 Pa. C. S. A. § 8371), which warrants an imposition of punitive damages to deter insurers from engaging in such conduct.
Superior Court Clarifies Pennsylvania Law on Non-Compete Agreements
On May 13, 2014, the Superior Court of Pennsylvania, in Socko v. Mid-Atlantic Systems, clarified the requirement of new consideration when an employer and employee enter into an employment agreement containing a non-competition restrictive covenant after commencement of employment. As an appellate decision, this new clarification leaves a lasting and binding effect on the trial courts.
When Mid-Atlantic hired Socko as a salesman in March 2007, Socko signed an employment agreement with a two-year covenant not to compete. He resigned in February 2009, but was rehired in June 2009 and signed a new employment agreement with a similar two-year covenant not to compete. Subsequently, he signed a third employment agreement on December 28, 2010 containing a two year non-compete covering eight named states, including Pennsylvania, and anywhere else that Mid-Atlantic did business. In January 2012, Socko resigned and took a position with a competitor basement waterproofing company located in Camp Hill, Pennsylvania. Mid-Atlantic wrote the new employer enclosing the third employment letter and threatening litigation. The new employer terminated Socko, who sued for declaratory judgment seeking a determination that the non-compete provision of the employment agreement was unenforceable for lack of sufficient consideration.
Follow the Bright-Line Road!
In the Supreme Court of Pennsylvania
No. 76 MAP 2012
On Appeal from Superior Court 11/23/2011 Docket
Carl J. Barrick and Brenda L. Barrick v. Holy Spirit Hospital of the Sisters of Christian Charity Individually and d/b/a Holy Spirit Hospital, Sodexho Management, Inc., Sodexho Operations, LLC and Linda J. Lawrence
Affirming the en banc decision of the Superior Court, the Pennsylvania Supreme Court created a bright-line rule denying discovery of communications between attorneys and expert witnesses.
It is well known the attorney-client privilege afforded to attorney-client communications gives an attorney the ability to develop theories and legal strategies with the aid of information given to him from his client. Equally as important to the ability for an attorney to strategize includes communication between the attorney and an expert witness. Pa.R.C.P. 4003 provides clear directives on what is covered as “privileged” between an attorney and her clients and witness to ensure attorneys have every ability to strategize and devise legal strategies without fear of compromising confidential information or of exposure.
The Walls Come Tumbling Down: The Economic Loss Doctrine Uncovered
The economic loss doctrine prevents a plaintiff from recovering purely economic losses via a tort action (i.e., a negligence claim) in the absence of personal injury or damage to “other property.” One court has described the economic loss doctrine as “prohibit[ing] plaintiffs from recovering in tort economic losses to which their entitlement flows only from a contract.” Duquesne Light Co. v. Westinghouse Elec. Corp., 66 F.3d 604, 618 (3d Cir. 1995). In other words, a plaintiff should be limited to a contract claim “when loss of the benefit of a bargain is the plaintiff’s sole loss.” Id.
To illustrate, if a property owner hires a contractor to build a wall, which subsequently collapses due to the contractor’s negligence in constructing the wall, the property owner cannot sue the contractor for negligence. The property owner’s redress is confined to the terms of the contract. Given that the wall collapsed, it is likely that the contractor breached the contract with the property owner, who presumably bargained for a wall that should not collapse. Since nothing other than the wall was damaged, and no one was injured, however, the property owner’s relief is restricted to what was specifically bargained for – the wall. Thus, the property owner will only be able to recover the cost of the wall, or the cost of repairing the wall (i.e., he should only get what he bargained for: a wall).
Pit Stop: Crashing into Bad Faith Practices as Insurer Neglects Insured
Reversing the trial court’s order granting summary judgment in favor of the insurer in a declaratory judgment action brought by the insured, the Superior Court in Lanigan v. T.H.E. Insurance Company, No. 646 WDA 2013, (Pa. Super. March 14, 2014) held that the insurer breached its duty to defend the insured in a claim arising from an accident during a race.
On March 31, 2007, in a dramatic and fatal twist of events, Lanigan was racing at the Mercer Raceway Park in Mercer, Pennsylvania when his throttle stuck and he lost control of his car while turning. Crashing into the catch-fence near the pit, his car struck Steven Guthrie, Jr. and Samuel Ketcham, who were standing behind the fence. Mr. Guthrie died as a result of the injuries incurred, and Mr. Ketcham was seriously injured.
Coordinate Jurisdiction and Law of the Case
by Edward Kang
A vital thing people need to know and understand when dealing with the court system is all the laws and options in operation on a daily basis. One such law is the “Law of the Case” doctrine. When a judge determines the outcome of a question in a lawsuit… Continue reading ›
Getting Lost in the Woods: The PA Superior Court Decision Regarding Unrecorded Timber Contracts
by Daniel D. Haggerty, Esquire
In Zitney v. Appalachian Timber Products, Inc., decided July 3, 2103, the PA Superior Court considered a claim for damages by bona fide purchaser of real estate against the holder of an unrecorded timber contract, who commenced harvesting timber on the purchaser’s property after the purchaser entered into an agreement of sale to purchase the property. Continue reading ›
Discovery to be Coordinated in Massive $11 Billion Whistleblower Suit
by Edward Kang
Discovery to be Coordinated in Massive $11 Billion Whistleblower Suit
Discovery should be coordinated in two qui tam cases filed against Education Management Corp., or EDMC, an education company…
U.S. District Judge Terrence McVerry of the Western District of Pennsylvania has ruled that discovery should be coordinated in two qui tam cases filed against Education Management Corp., or EDMC, an education company based out of Pittsburgh. Two former recruiters of the massive campus manager which runs over 100 campuses nationwide allege that EDMC violated the Higher Education Act in using incentives to college recruiters based upon how many students they were able to draw. Continue reading ›