Legal Alerts

The New Jersey Supreme Court recently handed down its decision in the case of Haines v. Taft, an important decision that affects a Plaintiff’s ability to plead, prove and recover for outstanding medical expenses in New Jersey. In order to fully understand the Court’s decision, we first need to briefly review the legal history that led up to this landmark decision.

The passage of the Automobile Cost Reduction Act (AICRA) of 1999 afforded Plaintiffs in New Jersey their first opportunity to choose to reduce their PIP limits below $250,000.00 (before AICRA, that was the standard no-fault benefits amount available to everyone). AICRA allowed for PIP limits as low as $15,000.00 for payment of medical bills. This resulted in a substantially increased number of plaintiffs who incurred medical bills above their reduced PIP limits, i.e., they exhausted their PIP policies. The issue became whether or not the medical bills incurred BEYOND PIP exhaustion were allowed to be claimed by plaintiffs as economic damages at Trial in a third party setting.

The most recent prior precedent – Wise v. Marienski (Appellate Division) – indicated that Plaintiffs who chose reduced limits, and then exhausted those reduced PIP limits, WERE allowed to plead, prove and recover at trial the medical bills that exceeded their exhausted limits. For example, a plaintiff with a $15,000.00 PIP policy, who exhausted those PIP benefits, and then incurred an additional $50,000.00 in medical bills above and beyond their PIP exhaustion, would be allowed to claim that $50,000.00 as economic damages, and were allowed to present evidence of those amounts “on the Board” at the time of Trial. This added significant value to the claims of plaintiffs who had reduced PIP limits. In the example above, a case that might potentially have a pain and suffering value of $10,000.00 could become a case that had a value of $60,000.00 if the $50,000.00 in economic damages were added for outstanding medical bills above and beyond the PIP exhaustion.

The Wise case essentially turned PIP into a partial FAULT system (as opposed to the “No Fault” system that PIP was intended to be). Furthermore, the Wise case allowed plaintiffs to circumvent AICRA’s procedural design to monitor plaintiffs’ treatment (with the intent to prevent excessive treatment) by requiring pre-Certification of all treatment, and providing Statutory Fee Schedules to keep medical providers from over-charging. Put another way, once plaintiffs exhausted their reduced PIP limits, the insurance companies could no longer control plaintiffs’ treatment, i.e., plaintiff’s did not need to pre-certify, and argued that the statutory Fee Schedules no longer applied (although we have been able to negotiate with SOME plaintiffs’ attorneys to reduce the bills pursuant to the Fee Schedule).

This Supreme Court’s decision in the Haines case changes the situation. In Haines, the New Jersey Supreme Court has now ruled that plaintiffs cannot recover economic damages from a tortfeasor for medical bills incurred between their reduced PIP limits (such as $15,000.00) and $250,000.00. The most logical interpretation of the Court’s ruling is that outstanding medical bills are NO LONGER boardable at Trial as economic damages, at least until a plaintiff exhausts a their full $250,000.00 PIP policy. PIP has, again, become a “No Fault” system.

Given the immediate reaction by most in the legal community, including some in the defense bar, that this ruling is particularly harsh on plaintiffs of lower socioeconomic means, and represents too much of a swing of the pendulum from what Wise represented, it should be anticipated that the plaintiffs’ Bar/Lobby will take immediate action in attempts to force the New Jersey legislature to respond to this ruling.

In the meantime, this Supreme Court case should benefit the defendants. There should now be a disincentive for plaintiffs’ attorneys to have their clients with reduced PIP coverage over-treat. Consequently, we expect that Haines should also curb the valuation of cases, because, plaintiffs, by law, can no longer claim the excess medical/economic loss portion of their cases presentation previously available to them under Wise.

For any further discussion or if you have questions about this, please contact Marc Deitch at (732) 781-1309, or Mdeitch@kentmcbride.com

Electronically stored information has become the dominant form of discovery in the litigation process. The duty to preserve and produce evidence that is discoverable in pending or anticipated litigation has led to unique problems in electronic discovery. Electronically stored information is more voluminous than paper discovery and can be stored or produced in a variety of formats. These issues have contributed to increased litigation costs. Additionally, electronic discovery has contributed to an increase in the unintentional disclosure of privileged information, which can have significant consequences to litigants.

With seemingly unlimited ways to retrieve data, Congress and the Judiciary have responded to these issues by making changes to both the Federal Rules of Evidence (FRE) and Federal Rules of Civil Procedure (F.R.C.P). These changes addressed the prevalence and scope of electronically stored information and its impact on the discovery process. The Amendments’ design could work to control and allocate costs, address issues unique to electronic data, and protect against accidental waiver of the attorney-client privilege in electronically stored information. The ubiquitous nature of electronically stored information has increased the complexity and cost of compliance.

This article examines the differences between hard copy and electronic discovery and how electronic discovery has complicated the litigation process. It analyzes the issues that surround electronic discovery, including the preservation and production of electronic documents, whether production of metadata is required, ethical issues of metadata, the allocation of discovery costs, privilege, waiver of privilege, and spoliation. Further, this article reviews the history of electronic discovery, leading to the 2006 amendments to the F.R.C.P., and the 2008 amendment to the FRE 502.

http://www.bu.edu/law/central/jd/organizations/journals/scitech/volume181/documents/Ward_web.pdf

A three judge panel of the PA Superior Court recently disallowed collection of underinsured motorist (“UIM”) coverage against a bus driver’s personal auto insurance; the injuries stemmed from a crash while he was driving a Berks Area Reading Transit Authority (“BARTA”) bus. BARTA did not carry UIM coverage for it’s drivers, but the driver had such coverage under his own personal auto insurance. The Superior Court relied on a Pennsylvania Supreme Court decision which disallowed similar claims by a police officer injured on the job.

In Adamitis v. Erie Insurance Exchange, the three judge panel found that such claims were excluded under the “regular-use” exception in Adamitis’s personal insurance policy. The court also found that such an exclusion was valid under the Motor Vehicle Financial Responsibility Law (“MVFRL”), section 1731. The regular use exclusion bars coverage for accidents in vehicles regularly used by the insured, but not insured under the policy. The reasoning behind disallowing such claims focuses on the goal of the MVFRL, which includes correlating the scope of coverage and setting reasonable premiums for the insured. Allowing such claims, according to the court, would force an insurer to “underwrite unknown risks for which he has paid no premium.” This ruling was handed down even though there was evidence that the insurer did know of the plaintiff’s regular use of the bus, making the use of the bus not necessarily “unknown” to the insurance company.

The regular-use exclusion was added to the plaintiff’s policy in 2004 and his accident occurred in 2005, disproving his argument of insufficient notice of the exclusion. This ruling will ultimately disallow many claims by motorists with UIM protection whose employers do not carry UIM policies for their employees.

For more information about this decision, or about UM/UIM coverage generally, please contact Jay Branderbit at Jbranderbit@kentmcbride.com or 267-702-1713.

A federal judge has interpreted how Pennsylvania law would address the impact of limitations periods in common law bad-faith cases. In the case of Katzenmoyer v. Allstate, Judge Norma Shapiro determined that under Pennsylvania law, the four (4) year statute of limitations period for bad-faith claims does not begin to toll until an insurer has been exposed to damages.

The Katzenmoyer case stems from an ATV personal injury claim in 2004, where Katzenmoyer was injured on the property of Dronal Drumheller, who was insured by Allstate. Allstate refused to settle for the policy limit of $100,000.00 after the accident in 2004, and a jury verdict of $1.5 million was ultimately rendered in 2009. After all claims against Allstate had been assigned to him, Katzenmoyer brought a bad-faith claim against Allstate for refusing to settle in 2004.

Allstate argued that the four (4) year statute of limitations had run, and therefore the claim could not be heard. Judge Shapiro opined that the clock began to toll in terms of the statute of limitations when the jury returned its verdict, not when Allstate arguably acted in bad faith. The Court reasoned that Drumheller had not yet suffered damages in 2004, and therefore, Allstate did not yet know its status as a litigant in the case. It was unclear until 2009 if Allstate had any duty at all in this case, therefore, the statute of limitations clock should not have started until that duty was clear. Such duty could only be made clear by the jury verdict.

Even though the court sided with Katzenmoyer on the statute of limitations argument, the court ultimately found in Allstate’s favor. The court found that Katzenmoyer did not put forth sufficient evidence to support a common law bad-faith claim. Ultimately, this case makes it clear that plaintiffs must be exposed to an excess verdict before they may file a common law bad-faith claim.

If you would like additional information concerning this matter, or bad faith matters in general, please contact Jay Branderbit at Jbranderbit@kentmcbride.com or at 267-702-1713.

On May 26, 2015 the Pennsylvania Supreme Court in School District of Philadelphia v. WCAB (Hilton) clarified when an employer must use a Notice of Ability to Return to Work form (LIBC-757) by holding that it is not required in the claim petition setting where no liability has been acknowledged for the injury alleged. This is in contrast to other settings where an injury has been acknowledged and the employer seeks to modify or change the status of benefits. Previously the Commonwealth Court had suggested that the use of the notice was mandatory in Allegis Group v. WCAB (Henry) and Hoover v. WCAB (Harris Masonry, Inc.). Claimant’s attorneys had often used the absence of the Notice of Ability to Return to Work form to defeat employer’s efforts to limit wage loss exposure in the claim petition setting.

Many proactive employers would quickly act upon restrictions from a panel physician in an attempt to keep employees working. Offers of restricted employment were made the day the restrictions were received. The scenario suggested by the claimant’s bar would require that the Notice of Ability to Return to Work form be issued each time restrictions changed and that any discussions of continued employment would have to wait until it had been confirmed that the notice was received.

This is simply illogical and ignores the fact that the notice came in to being where earning power assessments were involved and were designed to give the employee notice that attempts were being made to modify an existing entitlement.

It is still a good idea to provide as much documentation as possible including job offers even if they are confirmations of direct conversations which had previously taken place and medical reports documenting restrictions. It is best to provide as much detail as possible to the employee in the anticipation of future litigation.

The Pennsylvania House of Representatives is presently considering a Senate Bill (SB 928) which was passed this summer which would raise the minimum liability limits of PA motor auto insurance policies from $15,000.00/30,000.00/5,000.00 (one person/aggregate/Property Damage) to $25,000.00/50,000.00/15,000.00.

The Senate Bill is presently in the Insurance subcommittee, and there is no known timeline on when the bill will be presented to Governor Wolf for signature. It is anticipated the change will be made, however.

For further information concerning this, or other issues having to do with auto insurance in PA, please contact Jay Branderbit at 267-702-1713, or Jbranderbit@kentmcbride.com

The Pennsylvania Supreme Court has granted allocatur in two asbestos cases, Amato v. Crane Co.and Vinciguerra v. Crane Co., to answer the question of whether a jury should decide if a product is unreasonably dangerous. The question as framed by the PA Supreme Court is whether under the recent Pennsylvania decision of Tincher, a Defendant in a strict liability claim based on failure to warn has a right to have the jury determine whether its product was unreasonably dangerous. The Tincher matter, which was decided by the Court in 2014, announced a new standard of proof for strict liability claims. The Court in that matter held that the issue of whether a product is unreasonably dangerous is one for the fact finder. Plaintiffs’ counsel have continually argued that Tincher decision is only applicable to design defect claims, not failure to warn claims. The Tincher decision has changed the landscape in product liability actions. We are hopeful the Court will provide clarity and a framework for jury instructions in a failure to warn case with its ruling in these cases.

We will continue to monitor this appeal and provide an update once the Court renders its decision. If you would like additional information concerning this matter, please contact Theresa M. Mullaney at tmullaney@kentmcbride.com.

On June 20, 2017 the Pennsylvania Supreme Court, in Protz v. WCAB (Derry Area School District) No. 6 WAP 2016 and No. 7 WAP 2017, effectively threw out the Impairment Rating Examination (“IRE”) scheme of Act 57 which had been in place since June 24, 1996. The IRE process partially brought Pennsylvania Workers’ Compensation claims out of the cave by attempting to curtail the “cradle to grave” course that had pervaded practice under The Act since its inception. The original legislation regarding the IRE process was passed when the 4th Edition of the AMA Guides was in place and it instructed that future examinations be completed pursuant to the most recent Guidelines in place. Protz involved a challenge as to whether the “most recent addition” could be used or whether all examinations had to be completed pursuant to the 4th Edition which was in place.

The Legislature’s response to Protz was introduced in October of 2017 in House Bill 1840 (HB1840). HB 1840 passed both the House and Senate and it was signed into law by Governor Wolf on October 24, 2018. Unlike its predecessor this Bill mandates use of the 6th Edition of the AMA’s Guides. Also unlike it’s predecessor this Bill indicates that the threshold for total disability is now 35% or more as opposed to 50% or more. This was obviously a concession to guarantee passage of the Bill. Following the passage of HB 1840 The Bureau of Workers’ Compensation has announced the IRE function is active immediately. The introduction and passage of this Bill was a direct response to the reverse course of workers’ compensation premiums, which had been declining since the 1996 enactment. The impact of Protz forced the PA Compensation Rating Bureau to file for an increase of loss costs of 6.06% in the middle of a policy year.

This Bill is without question good news to employers and insurers, but it only addressed the subsection invalidated by the court. Claimants will still need to be on benefits for 104 weeks and the 60 day window to schedule the exam. Additionally, per the 2017 Supreme Court ruling in Duffy v. WCAB, an IRE opinion may be invalidated if it does not take into account “fairly attributable” injuries despite their not being accepted or recognized by employer. Nothing is perfect but this is certainly a step in the right direction as the prospect of setting lifetime reserves without doubt saddles employers with extreme financial burdens.

For further information about this matter, please contact Kyle F. Colin at 267-702-1790, or kcolin@kentmcbride.com