Trigger Date for Statute of Limitations for Declaratory Judgment Action Depends on Facts of Case
The PA Superior Court recently decided in Selective Way Ins. Co. vs. Hospitality Grp Servs., 2015 Pa.Super. LEXIS 398, 2015 Pa. Super 146 that the 4 year statute of limitations for an insurance company to file a declaratory judment action is not triggered by the date of the filing of the Complaint.
In Selective, the incident occurred in February 2006 and a complaint was filed against the Defendant Hospitality in August 2007. Selective, Hospitality's insurance carrier provided defense for Hospitality and sent a reservation letter in 2007. Selective filed Declaratory Judgment Complaint in June 2012 seeking determination of no coverage. Summary judgment for Hospitality was granted by teh trial court in Westmoreland County, PA on the basis that Selective’s DJ Complaint fell outside the 4 yr statute, and should have been filed by August 2011. Selective argued that did not have sufficient facts to file the DJ Complaint until after Plaintiff’s co-worker's deposition in 2009.
Judge Christine Donohue wrote the Superior Court opinion, and found that the determination of when statute runs is factual question for lower court, and is not necessarily triggered the date that the Complaint is filed. Rather, when the insurance company has sufficient factual basis to present the averments in its complaint for declaratory judgment that the policy does not provide coverage. This can be at time complaint is filed, during discovery of the underlying case or not until there is a recovery that the carrier does not believe is covered.
The decision was 5-3 with Judges Ford Elliott, Panella and Shogan dissenting, and Judge Mundy concurring but concluding that the appeal was moot due to a settlement between the parties.
Practical point from this case - although the insurance company is getting a break so to speak in that there is no strict requirement to file a DJ action 4 years after receipt of the complaint, it’s always better to err on the side of filing and amending the Complaint later, rather than leaving the determination to the trial judge. The other side of this is that there is no requirement for a carrier to even file a DJ action to support its denial. However, most do to avoid a later breach of contract/bad faith action.
Can you Depose the Claims Adjuster in a Koken Case? Courts are Split
A recent decision by Magistrate Judge Lynne A. Sitarski of the Eastern District Federal Court of Pennsylvania denied Plaintiff the opportunity to depose Defendant’s claims representative and claims manager in a post – Koken UIM case. See, Wagner v. State Farm Mut. Automobile Ins. Co., No. 5:13 - CV - 06645 (E.D. Pa. Feb. 20, 2014 Sitarski, M.J.). Plaintiff claimed that the deposition was necessary to prove its breach of contract case at trial. Defendant countered that the deposition was not relevant to the breach of contract claim, and no bad faith claim was alleged. Further, the redacted claims log had already been produced. The Court agreed and granted the Motion for Protective Order in favor of Defendant State Farm.
Click here for a link to the opinion.
Two decisions on the same day by President Judge Thomas F. Burke, Jr. of the Luzerne County Court of Common Pleas denied Plaintiff’s request to depose the Defendant’s claims representative in two separate Post- Koken UIM cases. See, Garrett v. Griffin and Erie Ins. Exchange, No. 17274 of 2012 (C.P. Luz. Co. Oct. 4, 2013 Burke, J.); Krznefski v. Bish and State Farm, No. 16643 of 2012 (C.P. Luz. Co. Oct. 4, 2013 Burke, J.).
Other Courts have held that a deposition can be taken in limited circumstances. See Paulewicz v. Fronczkewicz, Bryan, and State Farm, 10655-CIVIL-2009 (Luz. Co. Feb. 1, 2010, Amesbury, J.). In a combined tortfeasor and UIM claim against State Farm, the Plaintiff requested the deposition of the State Farm claims representatives. No bad faith was alleged and Defendant State Farm objected to the depositions. The Court allowed the deposition to go forward but restricted the Plaintiff from deposing the claims representative on his “mental impressions, conclusions, or opinions respecting the value or merit of the claim, defenses to the claim, or respecting the strategy or tactics in defense of claims by State Farm....".
Bad Faith Case Remanded to State Court for Failure To Meet Threshold Requirements of $75,000
By: Sheila M. Burke, Esquire
The Honorable Judge Nora Barry Fischer of the Western District of Pennsylvania remanded the matter of Brewer vs GEICO (No. 13-1809 (W.D.Pa Jan. 22, 2014 Fischer, J.) (mem.), back to state court due to the Defendant’s failure to establish that the amount in controversy was greater than $75,000. The Defendant removed the case on the basis that the Plaintiff’s bad faith claim could exceed $75,000. However, the Plaintiff offered to stipulate the all the claims would not exceed $75,000, but Defendant refused to accept Plaintiff’s proposed stipulation.
Ultimately, the Court decided that the Defendant’s averment that the amount in controversy exceeded $75,000 was not enough. The Judge decided that the Defendant failed to establish that the case was worth $60,000, let alone $75,000. Therefore, removal was ruled improper and the case remanded. For a link to the opinion, click here.