HomeMy WebLinkAbout86-1569LAW OFFICES
xOYLE, MORRIS BC KERR
ONE LIBERTY PLACE
SUITE 4900
1650 MARKET STREET
PHILADELPHIA, PA 19103
(215) 981-5700
TELECOPIER (215) 851-0436
DIRECT DIAL: (215) 981-5715
September 13, 1989
VIA FEDERAL EXPRESS
The Honorable George E. Hoffer
Cumberland County Courthouse
Hanover Street
Carlisle, Pennsylvania 17013
Re: Coleman v. Harleysville Mutual Insurance
Com an Civil Action No. 1569 1986
Dear Judge Hoffer:
I have been discussing settlement of this class action
with plaintiffs' counsel.
These discussions have been based on the preliminary
rulings made by four Honor on August 2nd. However, Your Honor
deferred ruling on, or agreed to take another look, at several
factual or legal issues involving nineteen claims. Theseerha s
nineteen claims involve a considerable amount of money, p P
as much as $400,000. The issues and claims being considered
further by Your Honor are:
Estates of Bastian, - whether Patterson v.Nation-
Dempsey and Koenig wide supports the
proposition that decedents'
minor children toll the
running of the statute of
limitations
HOYLE, MORRIS & KE$a
The Honorable George E. Hoffer
Page 2
Estate of Cron - whether the decedent was
employed or employable at
the time of his death and
whether claimant is entitled
to work loss benefits
Estate of Gibson - whether Harleysville
received notice of this
claim and whether the
decedent's estate is
entitled to recover work
loss benefits
Estate of Groff - whether Harleysville's
denial of this claim was
reasonable or unreasonable
Estate of Hilpert - whether the decedent was
insured under a "live"
Harleysville policy at time
of decedent's accident
Estate of Kiser - whether this claim is
barred by the statute of
limitations based on date
of accrual of full work loss
benefits
Estates of Matusky, - whether the bar of the
Evans, Kiser and statute of limitations
Sluck was waived by
Harleysville's payment of
benefits
Estate of Meussner - whether decedent's lost
income was such that this
claim is barred by the
statue of limitations
Estate of Nuyianes - whether Harleysville's delay
in paying benefits was
reasonable
HOYLE, MOBBIS 8c KEBB
The Honorable George E. Hoffer
Estate of Patterson
Estate of Richie
Estate of Saoud
Estate of Talasky
Estate of Thomas
Estate of Tiller
Page 3
- whether decedent's wages
were such that this claim
is barred by the statute
of limitations
- whether Harleysville's
delay in paying this claim
was reasonable and whether
18$ interest is owed
whether Harleysville was
provided with reasonable
proof of lost income
- whether Harleysville had
paid full benefits or
whether Harleysville's
settlement of this claim
was approved in prior
litigation
- whether additional 18$
interest is owed
- whether this claimant is
entitled to recover under
Harleysville's policy and
whether this claim should
be dismissed from this
action as it is currently
being litigated in another
jurisdiction
A preliminary ruling for the Estate of Sterling was not made on
August 2. We would appreciate it if Your Honor could advise us
of your decision on that claim as well.
A preliminary or informal ruling on the claims
discussed above would greatly facilitate the parties' settlement
discussions and may lead to a settlement of some or all of the
claims of the plaintiff class. This would eliminate the need for
Your Honor to write a formal opinion on those settled claims.
RICHARD C. ANGINO
NEIL J. ROVNER
JOSEPH M. MELILI.O
TERRY 9. H:YMAN
DAVID L LUTZ
MICHAEL E. KOSIK
PAMELA G. SHUMAN
CATHERINE M. MAHADY-SMITH
RICHARD A. SADLOCK
PATRICIA A. PACIFICO
LAW OFFICES
ANGINO ~L ROVNER, P.C.
4509 NORTH FRONT STREET
HARRffiBURG. PENNA. 17110
17171 298-8791
FAR 17171 238-5810
January 18, 1990
Honorable George E. Hoffer
Court of Common Pleas of
Cumberland County
Cumberland County Courthouse
South Hanover Street
Carlisle, PA 17013
In Re: Coleman v. Harleysville Mutual
Insurance Co. No. 1569 S 1986
Dear Judge Hoffer:
SOLOMON HURWITZ
1198519491
HURWITZ. KI,EIN, MEYERS do BENJAMIN
Q949.19871
HURWITZ. KLEIN. BENJAMIN do ANGINO
11987.19781
BENJAMIN do ANGINO
1197519831
COUNSEL
D2WIN BENJAMIN
MACEY E. KLEIN
Enclosed please find the very recent Opinion and Order of
the Honorable Donald W. VanArtsdalen in the post-mortem work loss
class action captioned Kromnick v. State Farm. In his 8pinion,
Judge VanArtsdalen deals with many of the issues that are present
in the Coleman class action that is currently before you. As you
will recall, the Coleman case was tried in June, 1989, and
preliminary decisions were reviewed with counsel at argument in
August, 1989.
In his Opinion, Judge VanArtsdalen concludes that interest
commences to run from thirty days after the insurer received t e
completed application for no-fault benefits. He deemed receipt
of that document adequate proof of the fact and amount of loss
sustained. In your__ liminary decisions rendered orally from
th ch our` also used the date of e cling o~-the
application its as the date of notice or purposes o
commencement of interest. ec , °u --~~ne
of the claims of the nine representative test cases to be barred
by the statute of limitations even thought the earliest occurred
in 1975, more than six years before the first class action was
brought against State Farm. Judge VanArtsdalen held that because
the insurer breached its fiduciary duty to the ins_ u~ rea by keeping
silent on a avai a i i o wor oss a e s a of
limita i s as o ed until commencement of the first c~lal~
action aw sui a ains at insurer. Third, Judge Van r s a e
conc u es at as to the issue of attorney's fees, §107(1) of the
No-Fault Act:
Page Two January 18, 1990
Honorable George E. Hoffer
"appears to make the award of attorney's fees mandatory
where there are 'overdue payments' that are paid and the
insurer has received notice that the claimant is represented
by counsel. This section makes no mention as to the type of
notice required, nor whether there can be class
representation. Where, as here, a class action law suit is
filed to assert claims for work loss benefits that have not
been paid, I conclude that the serving of the complaint
provides State Farm notice of representation of all class
members for purposes of §107(1) of the No-fault Act...
Reasonable attorney's fees, based on actual time expended is
therefore to be paid by State Farm to Plaintiffs'
attorneys."
Judge VanArtsdalen also found that "At least after Freeze, State
Farm had no reasonable foundation to deny class Plaintiffs'
claims for work loss benefits together with statutory interest
thereon. Consequently, attorney's fees should be awarded under
§107(3) as well as under §107(1), the measure of such fees, under
both Sections being the same; that is 'a reasonable fee based on
actual time expended."' See, pages 60 and 61.
Since this Opinion was only recently issued, having been
filed on January 10, 1990, it was not available at the time trial
or argument in the instant case. The Plaintiffs respectfully
submit this Opinion as additional authority in support of their
claims for basic work loss benefits, interest, and attorney's
fees.
Copies of this letter and enclosures are being forwarded to
Alexander Kerr, Esquire, Counsel for Harleysville.
Very truly yours,
~Gurn.t:QA. ~ . D l~rv~.ac~
Pamela G. Shuman
PGS/j ks
Enclosures
cc: Alexander Kerr, Esq.
w/enclosures
~.
v
xen~te C~~~x# ~#~ ~e~~~~X~~~t~
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~'~t~~~P ~tS~Xt~~
MILDRED E. WILLIAMSON
DEPUTY PROTHONOTARY
October 30, 1989
Richard C. Angino, Esquire
4503 North Front Street
Harrisburg, PA 17110
RE: Hugh J. Coleman, et al v. Harleysville Plutual
Insurance Company
No . 52 N . D . ALI,OCA4'UR DOCICBT 1989
Dear Mr. Angino:
434 Main Capitol Building
P.O. Box 624
Harrisburg, Pennsylvania 17108
(717) 787.6181
This is to advise that the following Order has been
entered for the Petition for Allowance of Appeal for the above-
captioned matter:
"October 25, 1989, Petition Denied
Per Curiam"
Very truly yours, ~
Mildred E. Williamson
Deputy Prothonotary
MEW/pam
xc: Honorable George E. Hoffer
Honorable Edgar B. Bayley, Jr
Alexander Kerr, Esquire
Prothonotary - Cumberland County
(No. 1569 Civil 1986]
~ RICHARD C. ANGINO
NEIL J. ROVNER
JOSEPH M. MELILLO
TERRY S. HYMAN
DAViD L. LUTZ
MICHAEL E. KOSIK
PAMELA G. SHUMAN
DANTE J. P[CCIANO
CATHERINE M. MAHADY-SMITH
RICHARD A. SADLOCK
e
.~....-~
ANGINO 8c ROVNER.
4603 NORTH FRONT STREE
HARRISBURG. PENNA. 1 7 t t
(7 1 7l 238-6791
MON HURWIT~~
(~; ct9a6-ISasl
P. v • HUR Z. KLEIN. MEYERS & BENJAMIN
(1949-19671
T HURWITZ. KLE(N. BENJAMIN &~NOINO
O c1967-19781 ~
NIN & ANOINO.
11978-19831 /V// I/~~IIVV
February 19, 198'
The Honorable George E. Hoffer
Court of Common Pleas
Cumberland County Courthouse
Carlisle, Pennsylvania 17013
Re: Coleman v. Harleysville Mutual Insurance Co.,
In the Court of Common Pleas of Cumberland
County, Civil Action - Law, No. 1569 S 1986
Dear Judge Hoffer:
wIN E
\CEY
Enclosed please find the Stipulation and Settlement Agree-
ment reached with regard to the no-fault post-mortem work loss
class action captioned Gregory v. Harleysville, No. GD83-05012
(C.P. Allegheny). The settlement reached involves only the class
members whose names are attached to the Stipulation as Exhibit
"A." The only decedents included are those identified by
Harleysville as suffering their fatal accidents from March 25,
1979, to October 1, 1984.
At the present time, the issue of plaintiffs' attorney's
fees is pending before the Court in Allegheny County, as is
plaintiffs' Petition for Preliminary Approval of the Settlement.
Those decedents whose deaths occurred before March 25, 1979,
after October 1, 1984, and between March 25, 1979, and October 1,
1984, who were not identified by Harleysville are not included in
the settlement in Gregory.
Thank you for your consideration in this matter.
Very truly yours,
~QnrnsQ.a..~. ~3~'Lt„t..hnan~~
Pamela G. Shuman
LAW OFFICES
PGS:tld
Enclosure: Stipulation and Settlement Agreement
cc: Alexander Kerr, Esquire (w/o enclosure)
~ MSH/Gregory.S-1
IN THE COURT OF COMMON PLEAS OF ALLEGHENY COUNTY, PENNSYLVANIA
CYNTHIA GREGORY, Administra-
trix of the Estate of Charles
Gregory, Deceased, and
CYNTHIA GREGORY, individually,
on behalf of herself and all
other persons similarly
situated,
CIVIL DIVISION
No. GD 83-05012
CLASS ACTION
Issue No.
Plaintiffs,
STIPULATION AND SETTLEMENT
AGREEMENT
vs.
HARLEYSVILLE MUTUAL INSURANCE
CO.,
Defendant
Code - Civil Action
Filed on behalf of Plaintiffs
Counsel of Record for these
Parties:
Martha S. Helmreich, Esquire
Pa. I.D. No. 37181
Litman Litman Harris Brown
and Watzman, P.C.
Firm #006
1701 Grant Building
Pittsburgh, PA 15219
(412)456-2000
Richard C. Angino, Esquire
Pamela Shuman, Esquire
Angino and Rovner, P.C.
4503 North Front Street
Harrisburg, PA 17110
(717)238-6791
STIPOLATION AND SETTLEMENT AGREEMENT
Made, this ~~ day of January, 1987 by and between counsel
for the individual plaintiff and the plaintiff class and counsel
for the defendant, Harleysville Mutual Insurance Company ("Har-
leysville"). "Plaintiff class" as used herein shall mean and
include all and be limited to only those decedents identified on
Exhibit A hereto, and their heirs, executors, administrators,
successors, survivors, dependents, assigns, agents, and anyone
purporting to act on their behalf. "Harleysville", as herein,
shall mean the Harleysville Mutual Insurance Company, a company
licensed in the Commonwealth of Pennsylvania to write and sell
automobile insurance, with its principal place of business in
Harleysville, Pennsylvania, and each and every of its prede-
cessors, successors (by merger or otherwise), parents, subsid-
iaries, affiliates, assigns, directors, officers, employees, and
agents.
WHEREAS, the Complaint and Amended Complaint in this civil
action include allegations that defendant violated the Pennsyl-
vania No-Fault Motor Vehicle Insurance Act, Act of July 19, 1974,
P.L. 489, No. 176, Pa. Stat. Ann. tit. 40 §§1009.101 - 1009.701
(hereinafter referred to as "No-fault Act") by failing to pay
full work loss benefits, as defined in §103 of the No-Fault Act
(40 P.S. §1009.103), on behalf of certain "deceased victims"
whose death resulted from injury arising out of the maintenance
or use of a motor vehicle (40 P.S. §1009.103) as required by
Sections 106, 201, 202 and 205 of the No-Fault Act. (40 P.S.
51009.106, 1009.201, 1009.202 and 1009.205); and
WHEREAS, defendant Harleysville in its answer specifically
denied that it improperly and unreasonably denied full payment of
benefits, pleading that its policies of payment of no-fault
benefits were developed in good faith, based on the existing law
at the time of payment; and
WHEREAS, by Order of July 30, 1986, the Court certified a
plaintiff class in this action to consist of:
Those deceased victims, who were residents of
Pennsylvania, or their estates, where the
death of the deceased victims occurred within
or without Pennsylvania in the use and
maintenance of a motor vehicle, who were
entitled to work loss benefits under an
insurance policy issued by Harleysville
Mutual Insurance Company or under an assign-
ment of said Company as the security for a
deceased victim's work loss benefits whereby
the said Company did not pay the entire
amount due for work loss benefits.
The aforesaid class shall embrace only those
(a) Deceased victims, who by reason of
their earnings being in such amount
per month that they would receive
the full amount of $15,000.00 in a
period of fifteen months, and,
prior to death, did not receive No-
Fault benefits and their death took
place no longer than 39 months
prior to March 24, 1983.
(b) Deceased victims who, by reason of
their earnings being in such amount
per month that they would receive
the full amount of $15,000.00 in a
period in excess of fifteen months,
2
but in no event longer than 24
months, and prior to death did not
receive No-Fault benefits, and
death occurred no longer than 48
months prior to March 24, 1983.
(c) Deceased victims who died on or
after March 24, 1983, but before
October 1, 1984.
WHEREAS, the plaintiffs have engaged in comprehensive
discovery relating to the payment and non-payment of benefits to
putative members of the certified class; and
WHEREAS, Harleysville filed a Motion to Revoke Class
Certification, which motion was denied by the Court on December
8, 1986; and
WHEREAS, contested issues of law and fact exist, concerning
the matters settled, including issues both heard and unheard; and
WHEREAS, the defendant is entering into the Stipulation and
Settlement Agreement to terminate the controversy between the
individual plaintiff, the members of plaintiff class, as identi-
fied on Exhibit A hereto, and the defendant concerning the
matters settled, and to avoid the expense, inconvenience and
distraction of further litigation; and
WHEREAS, the execution of this stipulation and settlement
Agreement does not constitute an admission by defendant Harleys-
ville of liability for principal or interest with respect to the
claims that were made or could have been made by the individual
plaintiff and the members of the plaintiff class; and
WHEREAS, the individual plaintiff and the members of
plaintiff class as identified on Exhibit A hereto, enter into
3
this Stipulation and Settlement Agreement to terminate all
controversy concerning. the matters settled with the defendant
with the full understanding of the terms of such settlement and
in recognition of (1) the existence of contested issues of law
and fact, (2) the risks of litigation, including likely appeals,
and (3) their determination that the compromise and settlement
upon the terms agreed upon are in the best interests of and will
substantially benefit the representative plaintiff and the
plaintiff class and any beneficiaries of the settlement;
NOW, THEREFORE, it is hereby agreed by and between the
parties to Civil Action No. GD 83-5012 that all claims for relief
which are or could have been asserted in this action by the named
plaintiff and the members of the class, as identified on Exhibit
A hereto, be settled and compromised, upon entry of an Order by
the Court finally approving this Stipulation and Settlement
Agreement, as follows:
1. Harleysville shall deliver to counsel for the plain-
tiffs, on or before December 31, 1986, an amount representing the
agreed amount of damages in compromise of all claims, including
principal and accumulated interest, of the individual plaintiff
and the plaintiff class identified on Exhibit A hereto, that
amount being $2,176,500; which amount, together with the interest
accruing thereon, shall constitute the Settlement Fund;
2. This Settlement Fund shall be held in escrow in an
interest-bearing account pending the Court's approval of distri-
bution thereof.
4
3. The amount to be distributed to each class member from
the Settlement Fund shall be determined by the plaintiffs,
subject to Court approval.
4. The issue of plaintiffs' attorney fees and expenses,
both as to amount and as to responsible party, shall be deter-
mined by the court in the event the parties are unable to reach
agreement with respect thereto.
5. For and in consideration of the Settlement Fund of
$2,176,500, the individual plaintiff and members of the plaintiff
class, as identified on Exhibit A hereto, remise, release and
forever discharge defendant Harleysville from any and all manner
of actions, causes of action, suits, debts, dues, sums of money,
accounts, reckonings, bonds, bills, specialties, covenants,
contracts, controversies, agreements, promises, variances,
trespasses, damages, judgments, extents, executions, claims and
demands of whatsoever nature, in law or in equity, direct or
indirect, known or unknown, matured or not matured, including for
contribution and/or indemnity, that the individual plaintiff and
members of the plaintiff class ever had, now have, or hereafter
can, shall, or may have against defendant Harleysville, and its
past or present officers, directors, supervisors, and the assigns
of any such person or corporation with respect to any and all
matters which could have been alleged by the individual plaintiff
and members of the plaintiff class in this action, subject only
to the express limitations of paragraph 6 hereafter.
5
6. The foregoing general release by plaintiffs and members
of the plaintiff class, as identified on Exhibit A hereto, and
the execution of this agreement by the undersigned do not
constitute a release by plaintiff and members of the plaintiff
class, as identified on Exhibit A hereto, of any claims by them
for attorney fees and expenses against Harleysville.
7. Each of the parties reserves the right to withdraw from
this Stipulation and Settlement Agreement if it or any portion of
it is disapproved by the Court or disapproved pursuant to an
appeal.
8. This Stipulation and Settlement Agreement supersedes
any and all other previous negotiations, communications, offers,
representations or agreements, either verbal or written, between
the parties hereto and contains the entire agreement of the
parties with respect to the subject matter hereof. Any modifi-
cation of this Agreement shall be null and void unless approved
by written agreement executed by counsel for all parties which
are signatory hereto.
9. This agreement is to be construed in accordance with
the laws of the Commonwealth of Pennsylvania.
10. The undersigned each represent that he or she is
authorized to execute the agreement and take all steps to
effectuate this settlement on behalf of the party each repre-
sents, and that he or she will -take all steps on behalf of such
party that the Agreement contemplates.
6
IN WITNESS WHEREOF, counsel for the aforesaid parties;
intending to be legally bound hereby, have caused this Stipula-
tion and Settlement Agreement to be executed as of the day and
year aforesaid.
Dated: °~~ «~~
LITMAN LITMAN HARRIS BROWN HOYLE, MORRIS AND RERR
AND WATZMAN, P.C.
ANGINO AND ROVNER, P.C.
By.
Attorneys for
and Plaintiff
plaintiff
s
~C~_
By
Cynthia G eg y McCann
WEIS AND WEIS
.~
By '
Attorneys for Defendant,
Harleysville Mutual Insurance
Company
7
MSH/Gregory.ExA
Gregory v. Harleysville Mutual Insurance Co.
S_TIPDLATION AND SBTTLEMENT AGREEMENT
EXHIBIT A
Class/Members Claimants Included in Settlement - Listed by Name
of Decedent
Allanson, Lars E.
Allen, Robert L.
Allenbaugh, Gregory
Angstadt, Julia
Armstrong, Gordon
Bailey, Lincoln
Beck, Richard A.
Beeman, Elwin
Beeman, John
Belin, Robert
Bensinger, Woodrow
Benton, Jeffrey R.
Bodnar, Frank
Brinkley, Michael, A.
Britt, Gary
Brodar, Elise
Browne, Barbara
Buck, William
Burns, Michelle
EXHIBIT A
Campbell, Marissa D.
Carson, Susan
Coleman, Gary T.
Connor, William
Covell, Constance E.
Crammer, Laura S.
Daubenspeck, Charlotte
Dienner, Susan Ada
Dietrich, Bruce
Dunkelberger, Scott
Durkoske, Jane
Dushko, Margaret Ann
Eberly, Marion
Eger, Rim Joy
Egger, George
English, Raymond
Eshelman, James F.
Figley, David E.
Fisher, John J.
Frantz, Nancy
Fritz, Ralph F.
Gannon, Timothy
Gehman, Robert
Genovese, Pamela Sue
Gregory, Charles L.
Grundusky, Thomas
2
Hadden, Jeanette
Hall, William B.
Hamm, Michael L.
Hazlett, Viola
Henderson, Curtis
Hershey, Brian G.
Hinton, Russel
Hoffman, Jeffrey
Horsman, Stephen
Horst, Ammon B.
Housel, Kenneth
Hovis, R. Basil
Hurst III, Oliver R.
Irwin, John L.
Jackson, Barbara
Johnson, Charles G.
Johnson, Willie F.
Joyce, Thomas
Kauffman, Dorothy
Kauffman, Homer
Kauffman, Louis
Kelly, Karen Jean
Riester, John W.
Rile, Stephen
Kinner, Debra L.
Ritzmiller, Janet M.
3
Rnowlan, Martha L.
Rroboth, Randy F.
Ruklis, Joseph
Lane, Robert
Latieri, David
Leibig, Debrene
Leonzi, Stella
Levan, Judith E.
Lileck, Aelen M.
Lilly, Randy L.
Lissfelt, Evelyn
Mackall, Paul C.
Malinovsky, Bernard
Markey, John C.
Maye, Martin
McGorry, John M.
McNair, Douglas
Meredith, Norman
Miller, Bruce
Miller, Desmond
Miller, Janice E.
Miller, Rim
Miller, Thomas
Mitchell, Andrew
Nekusa, Margaret
Nieder, Michael L.
4
Nolan, Rara
Nowland, Carrie
O'Neill, Grace
Pappa, Jennifer
Parisano, John
Philips, Joseph A.
Pomerantz, David
Portas, David
Quinn, James
Ranck, Clifton
Reese, William
Reinhard, David J.
Reinhard, Mary Lou
Rhoad, Cindy M.
Rhodes, Steven
Rossi, Anthony
Rowland, June R.
Rumberger, Annabel
Ruscillo, Michael
Sass, Joseph J. II
Saunders, Barbara
Schuler, J. David
Shaffer, Judith L.
Shaul, Revin Andrew
Shellhamer, David
Shellhamer, Patricia
5
Sigler, Lisa R.
,Skipper, Richard C.
Smart, Raren T.
Snarler, Joseph W.
Snyder, Teri
Sprout, Josephine
Stephens, Harry P.
Taylor, Grace
Thomas, Dennis
Tirjan, Tamara
Tobias, Pearl
Tokack, Nicholas
Tully, Norma A.
Turner, Robert H.
Urban, Bertha
Vandyne, Olive
Vandyne, Robert J.
Wallace, Donald
Warcholak, Pamela R.
Warner, Revin C.
Watts, Laura Lee
Weitzel, Cheryl
White, James F.
Wilson, Shirley
Wirick, Richard E.
6
M • r ~
Woodell, Eric
Yewdall, Raymond B.
RICHARD C. ANOINO
NEIL J. ROVNER
JOSEPH M. MELILLO
TERRY S. HYMAN
DAVID L. LUTZ
MICHAEL E. KOSIK
PAMELA O. SHUMAN
DANTE J. PICCIANO
CATHERINE M. MAHADY-SMITH
RICHARD A. SADLOCK
LAW OFFICES
ANGINO 8c ROVNER, P,G
4803 NORTH FRONT STREET
HARRISBURG, PENNA. 17 i I p
(7I 7) 238-6791
June 30, 1987
The Honorable Judge George E. Hoffer
Court of Common Pleas
Cumberland County Courthouse
Carlisle, Pennsylvania 17013
SOLOMON HURWITZ
(19E6-19491
HURWITZ, KLEIN. MEYERS & BENJAMIN
(1949-19871
HURWITZ, KLEIN, BENJAMIN & ANOINO
11987-1978)
BENJAMIN & ANOINO, P,C.
(1976-1983Y
COUNSEL
IRWIN BENJAMIN
MACEY E. KLEIN
Re: Coleman v. Harleysville Mutual Insurance Com any
No. 1569 S 1986 (C.P. Cumberland)
Dear Judge Hoffer:
The instant class action seeking to recover no-f ult post-
mortem work loss benefits was commenced on May 24, 198~t There-
after, on June 16, 1986, defendant filed Preliminary Objections
alleging the pendency of a prior action captioned Gregory v.
Harleysville Mutual Insurance Co , No. GD 83-05012 (C.P.
Allegheny). On October 8,.1986, argument was held on defendant's
Preliminary Objection. No decision has been rendered to date.
Settlement in Gregory v. Harleysville was reached in Decem-
ber, 1986, but only as to decedents who were identified by
Harleysville and whose deaths occurred from March 24, 1979, to
September 30, 1984. That settlement does not include decedents
whose deaths occurred before March 24, 1979, or after September
30, 1984, nor does it include decedents not identified by
Harleysville whose deaths occurred from March 24, 1979, to
September 30, 1984. On January 26, 1987, plaintiffs filed an
Amended Answer to defendant's Preliminary, Objection stating these
facts. Further, at your request, by cover letter dated February
19, 1987, we forwarded to you a copy of the Stipulation and
Settlement Agreement.
The Honorable Silvestri Silvestri recently decided the issue
of plaintiffs' attorney's fees. A copy of Judge Silvestri's May
20, 1987, Opinion and Order is enclosed for your information,
ordering Harleysville to pay all of plaintiffs' attorney's fees
because of its lack^of a reasonable foundation to deny the claims
of class members.
Petition for Approval of the Settlement is being filed in
Gregory to~cover only the claimants enumerated in the Stipulation
and Settlement Agreement. We are hopeful of resolving the rest
of the post-mortem work loss claims against Harleysville through
the instant action.
The Honorable Judge George E. Hoffer
Cumberland County Courthouse
Re: Coleman v. Harleysville
No. 1569 S 1986
June 30, 1987
Page 2
If there is additional information that you desire, please
do not hesitate to contact us. Thank you for your consideration
in this matter.
Very truly yours,
T ~R/YYZL~t.~ ~ - ~5-~uyYlC~.~~
Pamela G. Shuman
PGS:tld
Enclosure
cc: Alexander
Kerr, Esquire (w/o enclosure)
~.
IN THE COURT OF COMMON PLEAS OF ALLEGHENY COUNTY, PENNSYLVANIA
CYNTHIA GREGORY, Administratrix
of the Estate of Charles
Gregory, Deceased, and
CYNTHIA GREGORY, individually
and on behalf of herself and all
other persons similarly situated,
Plaintiff,
v.
HARLEYSVILLE MUTUAL INSURANCE
COMPANY,
Defendant.
CIVIL DIVISION
CLASS ACTION
No.GD83-5012
Issue No.
Code
OPINION AND
ORDER OF COURT
Filed by
HONORABLE SILVESTRI SILVESTRI
JUDGE
i
May 20, 1987
Copies to
Martha Helmreich, Esq.
Richard C. Angino, Esq. (Hbg)
Richard J. Federowicz, Esq.
Alexander Kerr, Esq. (Phila)
f ~ -
' +~ ~ OPINION
SILVESTRI, J.
We have before us plaintiff's counsel's petition for award of
attorney's fees in a class action brought pursuant to the former
1
Pennsylvania No-fault Motar Vehicle Insurance Act (hereinafter the
No-fault Act.) Plaintiff, Cynthia Gregory, filed a complaint in
assumpsit as a class action on March 24, 1983, against Harleysville
Mutual Insurance Company, seeking maximum wage loss and survivors'
loss benefits, as those terms are defined by the No-fault Act, under
2
a policy issued by Harleysville.
It was plaintiff's position that defendant Harleysville engaged
in the practice of denying maximum work loss benefits available
under the No-fault Act to its insureds by "setting off" the maximum
available "survivor's loss" benefits against the "work loss"
benefits. Plaintiff sought to represent all those insureds of ~
Harleysville who had been "denied the maximum monetary amounts of
work loss benefits and/or survivor's loss benefits" by
Harleysville's practice. Plaintiff maintained that this was a
violation of the No-fault Act and was without reasonable foundation;
she sought declaratory, injunctive and monetary relief in addition
to 18~ interest on the sum owed, reasonable attorneys' fees, and
costs.
1
40 P.S. §1009.101 et seq.; 1974, July 19, P.L. 489, No. 176,
effective in 12 months; repealed 1984, Feb. 12, P.L. 26, No. 11,
§8(a) effective Oct. 1, 1984.
2
Harleysville filed preliminary objections to plaintiff's
complaint which were sustained in part. Plaintiff then filed an
amended complaint in June 1983 to which Harleysville filed an answer
and new matter.
~/ K
~~
Harleysville admitted that it engaged in the "set-off" practice
but denied that its policy was without reasonable foundation. On
the contrary, Harleysville maintained that, for a period of time
prior to November 1982, it complied with the law as set forth in
Pontius v. U.S. Fidelity & Guaranty Co., No. 2702-S-1977 (Dauphin
Co., April 27,'1981), which case, according to Harleysville,
approved of the "set-off" policy. Harleysville then allegedly
abandoned the "set-off" policy in November of 1982 in light of
decisions being handed down by the appellate courts.
After the pleadings were closed, but before a motion for class
certification had been presented, Harleysville petitioned this court
to dismiss or, in the alternative, stay this action pending the
outcome of a class action captioned Keylor v. Harleysville Mutual
3
Insurance Co. filed in Dauphin County involving a similar class and
relief. On December 21, 1983, this court entered an order staying
this action. In January 1985, the court of common pleas of Dauphin
County denied certification in the Keylor action; in May 1986, the
Superior Court affirmed the trial court's ruling. Thereafter, on
June 1, 1986, this court issued an order setting the date for the
4
hearing on class certification.
3
Keylor v. Harleysville Mutual Insurance Co., No. 2189 S 1982
(Dauphin Co.).
4
No activity is apparent from the docket after the stay was
entered in this case until the court's June 1, 1986 order, except
for the withdrawal and re-entry of appearance of Harleysville's
counsel and the entry of appearance of plaintiff's co-counsel.
2
tr 1,
r
~~ .. The hearing was held. on class certification and this court
subsequently entered an order on July 30, 1986 certifying the action
as a class action. The class included all insureds of Harleysville
who were residents of Pennsylvania and who were entitled to and had
5
been denied maximum work loss benefits under the No-fault Act; the
relief was limited to money damages only. Harleysville filed a
motion to revoke class certification which was heard and denied
immediately prior to trial on December 8, 1986. At trial, plaintiff
presented one witness; after a half day of testimony, the parties
settled the action for a sum in excess of two million dollars,
representing payment of the full amount for work loss benefits to
each member of the class, with the 18% interest payable thereon
being compromised at 60$ of the amount then due.
The No-fault Act, as well as the class action rules of the
Pennsylvania Rules of Civil Procedure, provide that the court may
award attorney's fees under certain circumstances. Since the
parties involved herein could agree neither on the source of the
fees to be awarded nor the amount thereof, this court held a hearing
on plaintiff's counsel's petition for award of attorney's fees. It
is based upon the evidence presented at this hearing that we now
determine the amount of the fee to be awarded plaintiff's counsel,
and the source of the payment of the fee.
5
The class consisted of three subclasses, which were delineated
by date of death and monthly income earned.
3
T
r
` I Rule 1716 of the Pennsylvania Rules of Civil Procedure, which
governs counsel fees in class action cases, provides that "where the
court is authorized under applicable law to fix the amount of
counsel fees..." it must consider several factors when so doing.
The class action rules themselves do not authorize counsel fees to
be awarded as ~ matter of law, but rather guide the court in
determining the amount of the fee where there is authority
therefor.
It is well-established that counsel fees may not be awarded by
the court unless there is statutory authority or an agreement
between the parties so providing.
6
202, 421 A.2d 1219 (1980).
See Paul v. Paul, 218 Pa. Super.
6
It has also been a generally recognized exception to this rule
in Pennsylvania that counsel may recover a fee when his effort in
the litigation has resulted in the creation of a "common fund" for
those he represents. See Estate of Wanamaker, 314 Pa. Super. 77,
460 A.2d 824 (1983); see also _Nagle v. Pennsylvania Insurance Dept.,
46 Pa. Cmwlth. 621, 406 A.2d 1229 (1979), rev'd on other grounds,
499 Pa. 139, 452.A.2d 230 (1982). However, this exception is not
applicable in the instant case. Our Supreme Court has stated:
"...the 'common fund' exception is narrowly applied and is usually
invoked to protect the administration of estates or corporate
property from illegal or fraudulent waste or dissipation when the
'fund' itself is before the court." International Organization of
Master, Mates and Pilots of America, Local No. 2 v. International
Organization of Master, Mates and Pilots of America, Inc., 497 Pa.
102, 439 A.2d 621, 627 (1981). In the case before us the No-fault
Act provided for recovery of specific benefits by each class
member; the action was brought to force Harleysville to comply with
the Act.. A common fund has not been created; rather, the class
members have recovered on their individual claims which have already
been determined by statute. We therefore need not consider this
exception.
4
~' '`
,, ~ This action was brought pursuant to the No-fault Act; that
statute does provide for the award of attorney's fees in certain
situations. The applicable section provides:
1009.107 Attorney's fees and costs
Fees of claimant's attorney.--
(3) If, in any action by a claimant to recover no-fault
benefits from an obligor, the court determines that
the obligor has denied the claim or any significant
part thereof without reasonable foundation, the court
may award the claimant's attorney a reasonable fee
based upon actual time expended.
We must, then, determine from the evidence presented whether
Harleysville denied the various claims of the plaintiff class
members without reasonable foundation for doing so. The evidence
not only establishes that Harleysville acted without reasonable
foundation in denying these claims, it also demonstrates
Harleysville's complete and total disregard for the provisions of
the No-fault Act and for certain appellate court decisions rendered
by the Superior and Supreme Courts. For the reasons set forth
below, we determine that all counsel fees are to be assessed against
defendant Harleysville pursuant to §1009.107{3) of the No-fault Act.
The No-fault Act became effective July 1975 and was passed for
the purpose of establishing "at reasonable cost to the purchaser of
insurance, a Statewide system of prompt and adequate basic loss
benefits for motor vehicle accident victims and to survivors of
deceased victims." 40 P.S. §1009.102(b). The insurance regulations
found at 31 Pa. Code 66.121 required the insurance carrier to notify
its insureds by letter or brochure of the extent and conditions of
5
~ h
S
~ 7
~, r coverage imposed by the No-fault Act upon its adoption. The
regulations included a sample form letter which the insurance
department had concluded satisfied the minimum requirements for such
notice. Included in the sample letter is the following language:
C. You will not need a lawyer to collect your No-Fault
benefits. If you are injured, (contact your insurance
company or your insurance agent] to get claims forms. You
should be paid within 30 days after the company receives
completed forms from all related parties....
The No-fault Act itself provides that:
...No-fault benefits are overdue if not paid within 30
days after the receipt by the obligor of each submission
of reasonable proof of the fact and amount of loss
sustained....
40 P.S. §1009.106 (a) (2) .
Basic loss benefits under the No-fault Act include work loss
benefits and survivors loss benefits. 40 P.S. §1009.202(b) and (d)
set forth the limits of the benefits:
§1009.202 Basic loss benefits
(b) Work loss limits.--Work loss, as defined in section
103, shall be provided:
(1) up to a monthly maximum of:
(A) one thousand dollars ($1,000) multiplied by
a fraction whose numerator is the average
per capita income in this Commonwealth and
whose denominator is the average per capita
income in the United States, according to
the latest available United States
Department of Commerce figures; or
(B) the disclosed amount, in the case of a
7
Insurers were required to send said notices no less than 30
days before the effective date of the Act.
6
,.
named insured who, prior to the accident
~, - resulting in injury, voluntarily discloses
his actual monthly earnings to his
obligor and agrees in writing with such
obligor that such sum shall measure work
loss; and
(2) up to a total amount of fifteen thousand dollars
($15,000).
(d) Survivors losses.--Survivors loss, as defined in
section 103 shall be provided in an amount not to exceed
five thousand dollars ($5,000).
Said benefits are defined in Section 103 of the No-fault Act as
follows:
"Survivors loss" means the
(A) loss of income of a deceased victim which would
probably have been contributed to a survivor or
survivors, if such victim had not sustained the
fatal injury; and
(B) expenses reasonably incurred by a survivor or
survivors, after a victim's death resulting from
injury, in obtaining ordinary and necessary
services in lieu of those which the victim would
have performed, not for income but for their
benefit, if he had not sustained the fatal
injury.
"Work loss" means
(A) loss of gross income of a victim as calculated
pursuant to the provisions of section 205 of
this act; and
(B) reasonable expenses of a victim for hiring a
substitute to perform self-employment services,
thereby mitigating loss of income, or for hiring
special help; thereby enabling a victim to work
and mitigate loss of income.
Section 205 of the No-fault Act provides detailed instructions
for calculation of work loss benefits. The section sets forth three
methods of determining the amount due based upon the employment
history of the victim; that is, whether they were "regularly
7
• i
r
~, employed" (~205(a)), "seasonably employed" (~205(b)) or "not
employed" (~205(c)). Section 205(d), Definitions, provides further
specific directions for calculation of benefits based upon "probable
annual income"; ~205(d)(C) delineates the method for calculating the
"probable annual income" of "a victim who has not previously earned
income from work." Section 205 has, like the balance of the
No-fault Act, been in effect since July of 1975.
In April of 1979, the Superior Court handed down the decision
of Heffner v. Allstate Insurance Co., 265 Pa. Super. 181, 401 A.2d
1160 (1979), wherein it concluded that the insured's spouse was
"entitled to recover work loss benefits as the survivor of a
deceased victim under the No-fault Motor Vehicle Insurance Act...."
401 A.2d at 1166. At the same time, the Superior Court also ruled
(unreported opinion - 80 March Term, 1978) based upon its Heffner
decision, that the trial court in the case of Pontius v. United
States Fidelity and Guaranty Company, No. 2702-S-1977 (Dauphin
County), was in error in ruling that the administrator of the estate
of a deceased victim could not maintain an action for work loss
benefits under the No-fault Act.
Thus, after April of 1979, the law in Pennsylvania was that
survivors of deceased victims were entitled to receive work loss
benefits as that term was defined under the No-fault Act. It is
fundamental that "until (a Superior Court] decision should be
overruled by the Superior Court itself or over-ruled by the Supreme
Court, it is still the law of this Commonwealth...." Townsend
Trust, 349 Pa. 162, 168, 36 A.2d 438, 441 (1944); see also Baker v.
Aetna Cas. & Sur. Co., 309 Pa. Super. 81, 454 A.2d 1092 (1982).
8
,,
However, the testimony at the hearing on attorneys' fees establishes
that Harleysville had a different understanding of this rule. -.
Prior to the Superior Court's Heffner decision in 1979
Harleysville did not pay wage loss benefits in fatality cases at
all. The testimony of Carl Maio, assistant vice-president for
Harleysville and former assistant general counsel of Harleysville,
established that Harleysville did not abide by the Superior Court's
opinion in Heffner, which required such payment after April 12,
1979. When asked to explain Harleysville's practice, Maio stated:
A. At that posture it was our information that the
Superior Court decision was going up on appeal.
Part of our policy was that if a case was going
on appeal, we would not do anything to disturb
the existing policy. If the case is not going
up on appeal, then we would follow that Court's
decision.
Tr. 482.
Additionally, plaintiff's exhibit 8C, a memorandum dated May 3,
r
1979, from Harleysville's vice-president of claims, A. Andrew
Tignanelli, to "All Pennsylvania District Claim Officers," further
illustrates Harleysville's position: It states, inter alia,
...We should therefore take the position in all cases
involving this question [payment for "lost income
benefits"] that we will not voluntarily pay the
additional $15,000 until such time as the Supreme
Court has resolved the issue....
The Heffner case did go up on appeal; it was consolidated with
Pontius v. United States Fidelity & Guaranty Co., supra, and the
Supreme Court, 491 Pa. 447, 421 A.2d 629 (1980) affirmed the
decisions of the Superior Court in both cases, thus requiring
payment of work loss benefits to survivors of deceased victims
(Heffner) and their estates (Pontius). Maio testified that after
9
M
Y •
' the Supreme Court Heffner decision in September of 1980, and prior
to the decision of the Dauphin County Court for the remanded Pontius
case in April 1981, it was the policy of Harleysville to pay a total
of $20,000 to survivors of deceased victims, which sum represented
$5,000 in survivor's loss benefits and $15,000 in work loss
benefits. (Tr. p. 486).
8
Plaintiff's exhibit 9 supports Maio's claim that, in part,
Harleysville abided by the law. Harleysville's official policy
after the Supreme Court's Heffner decision conceded that survivors
of the insureds were entitled to some work loss benefits, as the
memo entitled "Pennsylvania No-fault - Work Loss Benefits to
Deceased Victim's Survivors" indicates. The November 5, 1980 memo
states in part:
On September 26, 1980 the Pennsylvania Supreme Court
ruled in the matters of Heffner v. Allstate and
Pontius v. U.S.F.& G. that survivors of deceased
victims are entitled to work loss benefits....
* * * *
Whom do we pay?
We pay to survivors as defined in the Act. The
spouse of the deceased victim is presumed to be a
survivor...*
*emphasis added.
8
Plaintiff's Exhibit 9 is a memorandum dated November 5, 1980
from David Kennedy, "unit manager" of Harleysville, to "All District
Claim Managers."
• 10
.,
However, less than two weeks after the date of this memo, David
Kennedy sent another letter, Plaintiff's Exhibit 8B, to district
claim manager Clarence Bechtel concerning Kevin Warner, an insured
of Harleysville who was fatally injured in May 1979 and for whom a
9
PIP application had been filed. The letter stated, inter alias
Do not make wage payments on this claim until you
have a demand for same from the widow or her
attorney. She is presently residing in Florida and
we do not have to abide by the Pennsylvania Unfair
Claims Practices Acts for nonresidents of the
state....
As we have already noted, the No-fault Act and the applicable
insurance regulations require only that an insured provide the
insurer with reasonable proof of the loss and verify the information
in order to be eligible for benefits pursuant to the No-fault Act.
There is no requirement that survivors make "demands" for the
benefits which accrue to them as a matter of law. Harleysville's
position as manifested by the above quoted letter was in direct
conflict with the No-fault Act and the Heffner decision.
Harleysville's unique interpretation and application of the
No-fault Act does not confine itself to the Warner claim, however.
Kennedy's same November 5, 1980 memo to "All District Claim
Managers", in addition to admitting that wage loss benefits are due
to survivors of deceased insureds, also stated:
...There shall be no payment of work loss benefits to
an estate of the deceased. The one exception is when
the survivor(s) is a minor. In such instances, the
benefits shall be paid to the personal representative
9
Warner was a resident of Pennsylvania who was employed at the
time of his accident and was survived b~ his spouse.
11
of the estate as a wage loss benefit under the
no-fault coverage of our. policy. (Emphasis ours.)
There is no language in the No-fault Act concerning work loss
benefits which differentiates between decedents which have been
survived by minors and those which have not. The Supreme Court in
Heffner, as we have already noted, consolidated for argument and
heard Pontius V. United States Fidelity & Guaranty Co.;based upon
its rationale the Supreme Court affirmed the order of the Superior
Court in Pontius which had ruled that the trial court was in error
in holding that there was no cause of action for work loss benefits
in a claim made by the administrator of the estate of a decedent.
Thus, after the Supreme Court's Heffner decision, it was likewise
the law in Pennsylvania that estates of insured decedents were
entitled to and could maintain a cause of action for work loss
benefits under the No-fault Act. Harleysville's position that only
estates with minor survivors could receive said benefits is again
without any foundation in either the No-fault Act or the Heffner
10
decision.
In the November 5, 1980 memo, Harleysville also advised that
it would pay no "survivor's loss" benefits unless "the deceased had
been producing income and if the survivor qualifies as defined in
10
It is interesting to note that in spite of the Supreme
Court's Heffner decision, the Dauphin County court, upon remand,
concluded that the estate was not a survivor, but nevertheless,
because the administrator of the estate was also the spouse, it
would permit the administrator to recover work loss benefits even
though "he elected to claim on behalf of the estate." Thus, while
the Supreme Court acknowledged implicitly the existence of a cause
of action for work loss benefits brought on behalf of an estate, the
trial court, sua sponte, ruled otherwise.
12
' the Act." (emphasis in original) There is no mention in the memo as
to the necessity that decedents be producing income in order to
qualify their survivors for work loss benefits. Nor is there any
mention in the Heffner Supreme Court decision itself that requires
the decedent to have been employed at the time of the accident in
order to qualify any survivors for either survivor's loss or work
loss benefits. But, more importantly, as we pointed out at the
beginning of this opinion, the No-fault Act has specific provisions
for calculation of work loss benefits when "a victim...is not
employed when the accident resulting in injury occurs...." (Section
205 (c) of the No-fault Act). Nevertheless, Harleysville's Kennedy
generated a series of memorandums in November of 1980 which advised
various district claim managers to deny, based upon the Supreme
Court's Heffner decision, any claims in which the decedent was
unemployed at the time of the accident. Plaintiff's exhibit 11D,
dated November 13, 1980, states
Suffix #1 - Raymond English - PIP
Resist any claim for loss of wages due to the recent
decision by the Supreme Court in the matter of Heffner vs.
Allstate. Mr. English was not employed at the time of his
death and therefore earned no wages...
Plaintiff's exhibit 13, dated November 18, 1980, states, inter alia
Suffix #2 Martha L. Knowlan PIP
Since Mrs. Knowlan was unemployed at the time of her
death, a claim for wage loss benefits should be
denied....
Plaintiff's exhibit 11-E-1, dated November 24, 1980, states:
Suffix #3 Laura Crammer PIP
Mrs. Crammer was unemployed at the time of her death.
We should not honor any claim for loss [sic] wages
based on the premise that she was unemployed....
13
There was no reason, in light of the explicit language of the
No-fault Act, to take a position such as Harleysville did in regard
11
to the above claims.
The Supreme Court's Heffner decision makes no reference to any
"set-off". The decision, however, remanded the Pontius case back to
the Court of Common Pleas of Dauphin County for further proceedings.
The trial court thereafter issued an opinion (hereinafter Pontius
II) wherein it concluded that 1) an administrator of an estate could
not maintain an action for work loss benefits since an estate was
not a survivor as defined in the No-fault Act, 2) 18$ interest is
due on any overdue claims regardless of the "good faith" or
"reasonableness" of the insurer's position, 3) counsel fees will be
awarded in the action for that period during which the insurer's
position was without reasonable foundation, 4) punitive damages are
not recoverable under the No-fault Act, 5) the case could not
proceed as a class action, and 6) the court would not permit the
stacking of the insured's policies to enable greater recovery. The
court makes no mention in its opinion regarding the rationale for
the deduction of survivor's loss benefits from work loss benefits;
nor does it refer to any authority including the Supreme Court's
Heffner decision, which would provide the basis for such a
calculation. The court, in its order, merely states:
AND NOW, April 27, 1981, plaintiff is hereby awarded ...
$10,000 (maximum work loss less maximum survivor's loss
already paid) with interest at a rate of 18$ per annum....
11
There were a total of eight class members who were denied
work loss benefits solely for the reason that they were unemployed
at the time the accident occurred.
1.4
Based upon the Dauphin County court's unexplained and
unsupported order, Harleysville immediately adopted its "set-off"-,
policy by which it would pay a maximum of $5,000 in survivor's loss
benefits and $10,000 in work loss benefits. Kennedy sent out a
memorandum dated May 26, 1981, to district claim managers stating
that Harleysville would "follow the order of the Court in our own
cases. Maximum Work Loss Benefits shall be reduced by Survivor's
Benefits."
There was also testimony by Maio that Harleysville relied upon
"part of the Heffner decision" in promulgating the above "set-off"
policy. When asked by this Court to quote the Heffner language
supposedly supporting the "set-off" policy, Maio quoted 421 A.2d at
636, which states:
It must be kept in mind that the Act sets monetary limits
of $15,000 for the recovery of work loss benefits and
$5,000 of survivor's loss benefits. If actual losses do
not reach or exceed these limits, the full amounts of /
these basic loss benefits need not be paid.
Tr. 516-517.
It is obvious that no reasonable interpretation of this
language could result in the formulation of Harleysville's "set-off"
policy. No doubt realizing this, counsel for Harleysville in his
redirect examination of Maio quoted additional language from that
same page of Heffner:
Q ...There is the following language. "As we view the
Act, the decedent's contribution of income under
survivor's loss recovery shall be excluded from the
amount recovered under work loss. In this manner
both basic loss benefits will complement rather than
duplicate each other."
Q Was that also part of the language of this opinion in
15
,.
which Harleysville relied in establishing its setoff
policy?
A Yes, exactly.
Tr. 552.
We consider Harleysville's interpretation of this language of
the Heffner decision to be completely without merit. The above
quoted language appears at the end of an opinion wherein the court
considers the possibility of "double recovery" and points out, by
12
way of quotation from a treatise on the No-fault Act, that:
In the case of work loss...the Act is simply providing a
certain measure of Survival Act damage, on a no-fault
basis... Similarly, with respect to so much of survivor's
loss recovery as represents contributions to survivors,
this is simply no-fault wrongful death recovery. There is
in fact no duplication of recovery in the same sense that
third-party recovery in a wrongful death and survival
claim involve different economic loss claims. They do not
overlap.
The Supreme Court then goes on to say:
"...we believe that in practice, recovery of survivor's ~
loss and work loss benefits by survivors of deceased
victims, will no more constitute double recovery under the
Act than does recovery under analogous wrongful death and
survival actions in tort law.
421 A.2d at 635-636. Survivor's loss benefits are not to be
included in the calculation of work loss benefits as they are
separate and distinct amounts for separate and distinct losses. As
the Court points out:
"...the decedent's contribution of income under survivor's
loss recovery shall be excluded from the amount recovered
under work loss...."
12
D. Shrager, ed., The Pennsylvania No-Fault Motor Vehicle
Insurance Act, 112 (1979).
16
• "Excluded" means "...to bar from ... consideration, or inclusion
• 13
...." The decedent's contribution of income (up to $5,000) "-
recoverable under survivor's loss benefits is thus "barred from
consideration or inclusion" when calculating the work loss benefits
available (up to $15,000). There is nothing confusing or ambivalent
about this language which could indicate to Harleysville that a
"set-off" of these benefits was in order.
However, we do not merely rely upon Harleysville's contorted
interpretation of the Heffner language taken out of context, and its
reliance upon an isolated common pleas court order, to arrive at our
conclusion that Harleysville acted unreasonably in regard to its
insureds.
The evidence establishes that Harleysville chose to follow only
that part of Pontius II which was to its pecuniary advantage. As we
noted above, Pontius II held that 18$ interest was due on all
14 ~
overdue payments of No-fault benefits, regardless of the "good
faith" or "reasonable cause" of the delay. The official policy of
Harleysville prior to February 5, 1981 was to pay only 6~ interest,
as is apparent from Kennedy's November 5,1980 memo:
T r.~r.r~o+-
Add 6~ interest to wage loss for each month payment was
overdue.
Do not pay 18~ interest. The rationale for this lies with
13
Webster's 3d New International Dictionary, 1971 ed.
14
Relying upon the February 5, 1981 opinion in Hayes v. Erie
Insurance Exchange, 493 Pa. 150, 425 A.2d 419 (1981).
'17
r
~. 15
the Hayes v. Erie decision in which the Superior Court
rules this factual situation a matter of first impression.
in which payment was not unreasonably withheld.
The Hayes Superior Court decision on which Harleysville relied
was reversed in part by the Supreme Court which ruled that
Where a payment is overdue as defined by X106, 18~
interest is owed on that payment regardless of the "good
faith" of~the insurer or the "reasonable cause" of the
delay.
425 A.2d at 421. The Pontius II case, which Harleysville
interpreted to permit the "set-off" policy, clearly set forth in the
text of the opinion that this was the law it must follow. Yet
Harleysville ignored both the Supreme Court Hayes decision and the
text of Pontius II, and continued to apply its 6~ interest policy
16
until August 17, 1982, nearly 18 months after the clear language
of the No-fault Act had been interpreted by the Pennsylvania Supreme
Court to require payment of 18$ interest on all overdue No-fault
payments. However, even after it became official policy of
Harleysville to abide by the provisions of the No-fault Act and
the Supreme Court's interpretation thereof by paying 18$ interest, a
review of the class members and their claims establishes that
Harleysville continued to pay less than 18~, and often paid no
15
Hayes v. Erie Insurance Exchange, 276 Pa. Super. 424, 419
A.2d 531 (1979).
16
Plaintiff's Exhibit 10-A-1, a memo from Kennedy-on that date
to All District Claim Managers, states "Due to recent appellate
court decisions, we are obliged to pay 18$ simple interest on all
late payments."
18
~ A
' interest at all, on claims made after August 17, 1982 and prior to
the commencement of this action. Such a flagrant disregard of•the-
law is inexcusable.
Harleysville did not limit its selective indifference to the
law merely to questions concerning its set-off policy and interest.
In July of 1982 the Superior Court, in the case of Freeze v. Donegal
Mutual Insurance Co., 301 Pa. Super. 344, 447 A.2d 999 (1982),
established unequivocally that the No-fault Act required work loss
benefits to be paid to the estate of a deceased victim who had no
employment history. The Superior Court stated:
We hold today that the estate of a deceased victim is
entitled to recover work loss benefits under the No-fault
Act....
[A]lthough the "deceased victim" in the instant case is a
minor child who had never worked, we see no difficulty in
calculating his work loss....
447 A.2d 999, 1004 (footnotes omitted). The court went on to refer
to §205(c)(1) and (2) which sets forth the method used to calculate
work loss when the victim is not employed at the time of the
accident. In spite of the clear pronouncement of the law, however,
Harleysville refused to pay work loss benefits to estates wherein
there were no survivors as defined under the Act and/or where the
decedent had not been employed at the time the accident occurred.
As we have already noted, when the Superior Court rules on an
17
issue, that ruling is the law until the Supreme Court or the
17
The Superior Court in Freeze noted that the Heffner decision
by the Supreme Court in 1980 had technically decided the issue of
availability of work loss benefits to an estate of the deceased when
it upheld the Superior Court's Heffner and Pontius orders. The
Court also noted that for some reason the trial court in Pontius II
(Footnote Continued)
19
Superior Court itself overturns the Superior Court's position. As
of July 1982 Harleysville was required as a matter of law to provide
No-fault work loss benefits to the estates of decedents without
regard to survivors and without regard to the employment status of
the decedent on the date of death, but nevertheless refused to do
so. Refusal to pay in these circumstances is clear evidence of bad
18
faith on behalf of Harleysville.
In December of 1982, the Superior Court decided the case of
Minier v. State Farm Mutual Automobile Ins. Co., 309 Pa. Super. 53,
454 A.2d 1078 (1982). The court concluded that work loss benefits
were due in claims wherein the decedent was retired. Said the
court:
The No-fault Act...does not require questions to be asked
as to the reason why a victim is not employed at the time
of the accident. Nor does it make any distinction, other
than in the method of calculation, between those who have
been laid off, those who have quit, or those who have
retired. It provides for some recovery of work loss ~
benefits for those who were not employed at the time of
the accident, notwithstanding the reason for their lack of
employment, depending on some probability of income
forthcoming had the accident not happened....
...The true issue in such a situation is whether the
individual retired person had any "probable" income or
reasonable expectation thereof. It is a matter of proof
in each case.
(Footnote Continued)
ignored the Heffner decision and ruled that the estate could not
recover those benefits.
18
There were at least nine class members whose decedents died
after the Superior court's Freeze decision and who were denied
payment because there were no survivors or because decedent had been
unemployed.
20
• V
'. 454 A.2d at 1079, 1080. Therefore, as of December 1982,
Harleysville was obligated to pay work loss benefits in all claims;
subject to verification in which the decedent was employed,
unemployed, retired, or a minor; such payment was required to be
made whether or not there was a "survivor" as that term is defined
in the No-fault Act.
However, we find that after the Minier decision, and as late as
April of 1984, Harleysville was refusing to pay work loss benefits
to claimants based upon the decedent's status as unemployed, as a
minor, or on a pension and based upon their having left no survivors
as defined in the No-fault Act. In view of the fact that
Harleysville wasted no time in adopting the Pontius II court's
"set-off" order (the policy became effective at Harleysville
approximately 30 days after the Pontius II decision), we conclude
that Harleysville's refusal to comply with the Superior Court ~
decisions that we have discussed above for a time as long as three
to four years after the decisions were rendered, is clear evidence
of bad faith and a willful violation of the No-fault Act.
Not only did Harleysville deliberately ignore appellate court
decisions in addressing claims which arose subsequent thereto, but
it also refused to go back and make payments which it had previously
denied based upon its erroneous interpretation of the No-fault Act.
Although there is no question that Harleysville was not required to
make payments on claims in which the statute of limitations had
21
• 19
run, it was obligated to make payments on those claims in which an
action for No-fault benefits could still be brought. Each Superior
Court and Supreme Court decision, which provided for payments to be
made to a class of insureds to which Harleysville had previously
denied payment, was authority requiring Harleysville to review its
files and make payment in compliance with the law.
However, Harleysville made it clear, through the testimony of
Maio, that it did not "reopen" files which it had "closed" even
though the statute of limitations on a cause of action for the claim
had not expired and the law had been clarified so that payment would
be required on such a claim. When asked why Harleysville did not
make retroactive payments to insureds, Maio stated,
We knew of no judicial authority that required any, that
required Harleysville to go back and retrieve or revive
any of those files and pay them....
Tr. 490. Harleysville's internal policy of refusing to "retrieve or
revive" files in which claims had been previously denied is an
unequivocal violation of the law. If an insured had made a claim
19
The Supreme Court in Sachritz v. Pennsylvania Nat. Mut. Cas.
Ins. Co., 500 Pa. 167, 455 A.2d 101 (1982) ruled that the two-year
limitations period set forth in §1009.106(c) (1) applied to actions
for work loss benefits whether or not the victim was deceased. In
Kamperis v. Nationwide Ins. Co., 503 Pa. 536, 469 A.2d 1382 (1983),
the Supreme Court ruled that an action for work loss benefits may be
brought
(a) within two years from any time the victim suffers
work loss as a result of the accident...
(b) within two years after the victim's accrued work
loss equals ... $15,000 ... and
(c) not later than four years after the accident.
469 A.2d at 1384.
22
for benefits within the applicable limitations period which had been
denied, and the law had subsequently been clarified to require
payment on that claim, Harleysville was obligated to pay benefits if
a cause of action could still be brought for recovery of those
benefits. In Baker v. Aetna Casualty and Surety Co., 309 Pa. Super.
81, 454 A.2d 1092 (1982), the Superior Court set forth the general
rule regarding applicability of court decisions to statutory
construction. It stated:
In Pennsylvania, judicial decisions are normally retro-
active, and the construction placed by the court upon
a statute becomes part of the act from the very beginning.
August v. Stasak, 492 Pa. 550, 424 A.2d 1328 (1981);
Buradus v. General Cement Products Co., 159 Pa. Super.
501, 48 A.2d 883 (1946), aff'd 356 Pa. 349, 52 A.2d 205
(1947). A court's interpretation will be applied to cases
arising from the time of the enactment of the statute
unless vested rights are affected....
454 A.2d at 1094-1095. It was Harleysville's duty, after each
appellate court decision concerning the No-fault Act, to determine
which of its insureds were affected by the decision and to
distribute the benefits due in accordance with the law. Yet
Harleysville instead took an adversarial position to its insureds,
aware that there were insureds entitled to work loss benefits but
remaining silent in the hope that claims would not be presented
until the limitations period had run.
The evidence established that Harleysvile, in one case, had
denied coverage on a claim filed in April 1982 for work loss
benefits on behalf of decedent Constance Covell, for the reason that
Covell was unemployed and had left no dependants. In July 1982, the
Superior Court in Freeze ruled that work loss benefits were due in
23
~. ~ claims brought by estates of decedents and could be recovered even
though the decedent was unemployed and had no work history. In
December 1982, the Superior Court reiterated in Minier that, no
matter what the decedent's work history, work loss benefits were
due. Harleysville, in a memo dated April 11, 1984 regarding Covell,
written by Ralph J. Palmiero, ignored both rulings; that memo
stated:
We previously had determined in this file that there was
no other coverage available for this deceased claimant.
We have had no further word and no complaint of any type
has been served at the present time. It should be noted
that the two year statute will run on 4/15/84....
Plaintiff's exhibit 43. For over one year, the law had required
payment of work loss benefits to estates of unemployed decedents,
yet Harleysville refused to pay on the claim of Covell. Review of
the claims of the plaintiff class members as well as Maio's
testimony regarding Harleysville's practice of not "reopening ~
files", shows clearly that Harleysville refused to pay work loss
benefits in cases where they were due and that that refusal was
without reasonable foundation.
In addition to their refusal to pay benefits as we have
outlined above, Harleysville engaged in other activities which
violated the No-fault Act and which render them liable for
plaintiff's counsel's fees. The No-fault Act requires that an
insurer notify the insured within 30 days if it is rejecting a
claim:
§1009.106 Payment of claims for no-fault benefits
(a) In general.--
24
~~ (5) An obligor who rejects a claim for basic loss
benefits shall give to the claimant written
notice of the rejection promptly, but in no
event more than 30 days after the receipt of
reasonable proof of the loss. Such notice shall
specify the reason for such rejection and inform
the claimant of the terms and conditions of his
right to obtain an attorney.
The evidence established that there was not one letter of
rejection sent out to any of the plaintiff class members, many of
whom received no work loss benefits at all, at any time. In fact,
the evidence showed that Harleysville, rather than rejecting claims
and specifically stating any reason for rejection, sent out
deceptive letters to claimants indicating that they were entitled to
receive some benefits under the No-fault Act, although the letters
did not disclose the actual extent of the benefits. In the case of
deceased insured Frank Bodnar, Harleysville, through claim
representative Candice Evans, sent out a letter dated June 7, 1A 83,
which stated, inter alia,
We have been advised that you are the party with whom we
should deal regarding any claim and benefits which your
father is entitled to as a result of the accident in which
he was involved.
The benefits to which he is entitled include the
reimbursement of any medical expenses as a result of this
accident and up to $1500.00 for funeral expenses....
Plaintiff's exhibit 47(2).
• On that same date Evans authored a "memo to the file"
concerning Bodnar, which stated:
...We have been in contact with the family and have
forwarded a No-fault Application along with a letter
detailing the necessary documents which we need in order
to begin processing the claim. Mr. Bodnar was 63 years
old and hence, we would have an exposure for the full
amount of wage loss of $15,000.00. He was retired at the
time of the accident. We also do have an exposure for
25
Survivor's Benefits as he is survived by his wife with
whom he was living. We will proceed to process claims for
wage loss and survivors benefits as they are presented to~
us.
An insurer is obligated by the No-fault Act to pay benefits
when the insured is entitled thereto and can verify the amount
thereof, and has provided the insurer with "reasonable proof of the
loss." In the case of Mr. Bodnar, Harleysville had received
reasonable proof of the loss as is evidenced by the above quoted
letter and memo. It took no action in regard to payment of work
loss benefits even though it knew they were due; sending a letter to
the representatives of the decedent, which implied that only medical
and funeral expense reimbursements were recoverable, is clear
evidence of bad faith. The purpose of the No-fault Act was to
provide "prompt and adequate basic loss benefits" to victims of
motor vehicle accidents. Purposely misleading the insured or his
representative to believe that he is entitled to receive far less
than the law provides is certainly not in keeping with the
philosophy of the No-fault Act. Harleysville's conduct, as the
genesis of this case has shown, has resulted instead in extensive
litigation and the attendant expenses.
Harleysville, through several of its own exhibits, has
supported plaintiff's position that it acted in an unreasonable
manner. Defendant's exhibit 17, which is a letter from claim
manager Donald Gimmell directed to the attorney of an insured dated
February 25, 1981, stated in a "blind P.S.":
Dave [Kennedy], I [Gimmell] had briefly discussed this
with you and we both felt that getting out of the total
claim of almost $20,000 for $14,000 was opportune at this
time. I think that this settlement, not only saves the
26
~ r
company money right now, but in the long run, it saves a
considerable expense in paying out benefits over a
long-term basis...
No doubt it would save the company money to refuse to honor its
contract of insurance and to ignore the law requiring it to make
payments which are due; however, "saving money" is not a reasonable
basis for refusing to pay a claim under the No-fault Act.
Harleysville has also submitted a number of exhibits (see
defendant's exhibits 14 through 65) which purportedly evidence their
"reasonableness" in settling claims with insureds for less than what
the statutory scheme provides. It has offered letters from various
counsel representing decedents' estates or survivors indicating the
willingness to settle or abandon claims, apparently believing that
such representation by an attorney absolves Harleysville from its
duty to provide No-fault benefits in accordance with the law unless
the attorney so requests. Regretfully for Harleysville, however,
representation of Harleysville's insureds by counsel who were not
knowledgeable as to the No-fault Act and the case law thereunder,
does not relieve Harleysville of its legal obligation to provide
benefits which are due and owing.
This may be elementary, but Harleysville seems to have lost
sight of a very fundamental section of the No-fault Act, which
states:
§1009.111 Rights and duties of obligors
(b) Duty to pay basic loss benefits.-- An obligor
providing security for the payment of basic loss
benefits shall pay or otherwise provide such benefits
without regard to fault to each individual entitled
thereto, pursuant to the terms and conditions of this
act.
27
'~ When it has been determined by Harleysville that its insureds
are entitled to No-fault benefits, Harleysville is obliged to pay
them all the benefits due despite the willingness of insureds'
counsel to take less. Harleysville's reluctance to pay work201oss
benefits owed without additional "formal claims" being made,
21 22
"requests by attorneys", "complaints being served" upon it is a
clear violation of its duty under the No-fault Act. Settling claims
for less than the No-fault Act provides is likewise evidence of
Harleysville's less than candid approach to dealing with its
insureds. We have found no reasonable basis whatsoever for
Harleysville's deliberate misconstruction of the provisions of the
No-fault Act nor can we determine the rationale for its selective
disregard of the Superior and Supreme Court decisions which we have
discussed above.
The testimony of Maio indicates that Harleysville's policy
regarding the "set-off", utilized to pay less than $15,000 in wage
loss benefits, was officially terminated prospectively in November
20
See plaintiff's exhibit 40; a Harleysville memo dated Feb. 1,
1982 regarding insured Earl Kiester states: "...in view of the
latest court decision on work loss and survivor benefits...counsel
representing (Kiester] still has not presented any formal claim. It
is too much to hope that this will escape the attention of Attorney
David Keller...." No work loss benefits were ever paid to Kiester
or his survivors.
21
See plaintiff's exhibit 46(2); a Harleysville memo dated July
8, 1983 regarding insured David Pomerantz states: "...We have had
no correspondence from the attorney representing the Pomerantz
family requesting us to pay survivor's benefits and wage loss
benefits to the estate of the deceased...." No such benefits were
ever paid to the estate of David Pomerantz.
22
See plaintiff's exhibit 43, quoted in the text of this
opinion at page 24.
28
~• 1982. The majority of the testimony and evidence shows, however,
that Harleysville continued to refuse payment in a myriad of other-
instances wherein payment was required by the No-fault Act and
appellate court decisions, and did not go back to those claimants
against whom the set-off had already been applied to remedy that
injustice. The evidence shows that Harleysville ignored the clear
provisions of the No-fault Act in failing in all instances to notify
the plaintiff class members of its refusal to pay claims and the
reasons therefor. The evidence also shows that Harleysville, in
violation of the No-fault Act, failed to pay 18$ interest as
required on all claims which were overdue. The company deliberately
misrepresented to its claimants the extent of the benefits available
to them, and negotiated for less than full payment in settlements
wherein maximum benefits were due.
There is no question that Harleysville, since the Supreme
i
Court's Heffner decision in September 1980, has violated the
provisions of the No-fault Act and has ignored appellate court
decisions in order to avoid making payment on claims which were due.
The exhibits and testimony presented at the hearing on the petition
for counsel fees establishes beyond any doubt that Harleysville
acted in bad faith and without any reasonable foundation in denying
many of the claims of the plaintiff class members. We do not
hesitate, therefore, in requiring Harleysville to pay all reasonable
attorney 's fees, in accordance with §1009.107(3) of the No-fault Act.
We now address the amount of the fee to be awarded.
We note that plaintiff has been represented by two law firms;
Litman, Litman, Harris, Brown and Watzman, P.C. (hereinafter the
29
• f
Litman firm) was original counsel in this action and Angino &
Rovner, P.C. (hereinafter the Angino firm) became co-counsel with
the Litman firm in November 1984. Both firms have submitted
separate petitions for counsel fees; the two petitions seek a total
counsel fee of approximately $650,000-$750,000, excluding costs and
expenses. Both firms have agreed that the court should apportion
the fee it awards between the two firms, as they could not agree to
do so themselves. We will consider the work done by both firms to
have been a combined effort aimed at a common objective and will
accordingly scrutinize their work as a whole rather than as two
23
distinct claims for compensation. After our determination as to
the proper amount of the fee, we will then consider the firms'
individual contribution to the action in distributing that fee.
It is well-established that the common law does not permit the
court to award attorneys' fees absent statutory authority or /
agreement between the parties. See Paul v. Paul, supra; see also
Sha iro v. Magazines, 418 Pa. 278, 210 A.2d 890 (1965). The action
before us was brought pursuant to the No-fault Act; that statute has
specific provisions which address attorney's fees.
Section 1009.107 provides, in part:
Fees of claimant's attorney.--
(1) If any overdue no-fault benefits are paid by the
obligor after receipt by the obligor of notice of
representation of a claimant in connection with a claim or
action for the payment of no-fault benefits, a reasonable
attorney's fee (based on actual time expended) shall be
23
Only one fee will be awarded regardless of the number of
attorneys or law firms involved and regardless of the number of
petitions presented by them for compensation.
30
paid by the obligor to such attorney. No part of the
attorney's fee for representing the claimant in connection
with such clam or action for no-fault benefits shall be
charged or deducted from benefits otherwise due to such
claimant and no part of such benefits may be applied to
such fee.
(3) If, in any action by a claimant to recover no-fault
benefits from an obligor, the court determines that the
obligor has denied the claim or any significant part
thereof without reasonable foundation, the court may award
the claimaint's attorney a reasonable fee based upon
actual time expended.
In addition to being brought pursuant to the No-fault Act, this
case has been certified as a class action. The class action rules
provide guidance to the court when the law permits counsel fees to
be awarded. Rule 1716 provides
Rule 1716. Counsel Fees
In all cases where the court is authorized under
applicable law to fix the amount of counsel fees it shall ~
consider, among other things, the following factors:
(1) the time and effort reasonably expended by the
attorney in the litigation;
(2) the quality of the services rendered;
(3) the results achieved and benefits conferred upon the
class or upon the public;
(4) the magnitude, complexity and uniqueness of the
litigation; and
(5) whether the receipt of a fee was contingent on
success.
The rule does not authorize the award of counsel fees in itself,
however. The statute which enables the court to award the
attorney's fee limits the scope of the fee, and rule 1716 must be
read in conjunction with the applicable provisions of the law
authorizing the award of a fee. Although Rule 1716 states that
several different factors "shall" be considered when awarding
31
• y
counsel fees in class action cases, we may only consider those which
do not broaden, diminish or otherwise conflict with the specific
mandates of the No-fault Act. The Rules of Civil Procedure 24 their
very nature can neither expand nor abrogate substantive law; we
must therefore disregard those provisions of Rule 1716 directing us
to address additional considerations other than those which the
statutory language of the No-fault Act has authorized.
The No-fault Act permits a "reasonable fee" to be awarded
"based upon actual time expended." Rule 1716(1) provides that we
consider the "time and effort reasonably expended by the attorney in
the litigation." Prior to considering what fee may be reasonable,
we must first determine from the record how much time has been
claimed by the attorney.
There is no dispute but that "[t)he applicant for counsel fees
has the burden of proving his/her entitlement thereto..." (cita~ions
omitted), Jones v. Muir, Pa. 515, A.2d 855, 859 (1986).
And, in actions brought pursuant to the No-•fault Act, which requires
that fees be based upon "actual time expended", the petitioning
party must also establish that the time spent was reasonable in
light of the task performed. As the Superior Court has held in
considering a petition for counsel fees under §1009.107(3) of the
No-fault Act,
24
Pa. Const. Art. V, §10(c) provides:
The Supreme Court shall have the power to prescribe general
rules governing practice, procedure and the conduct of all
courts...if such rules are consistent with this Constitution
and neither abridge, enlarge nor modify the substantive rights
of any litigant....
32
...the statutory language 'a reasonable fee based. on
actual time expended' clearly mandates that the fee
awarded be a reasonable one, taking all relevant factors
into consideration, as well as that it be limited to a
reasonable hourly rate for actual time expended.
...[I]t is important that the hours claimed by counsel be
reviewed to determine that the time actually spent was
reasonably necessary and appropriate to the case. The
courts of this state, in awarding attorney's fees
generally have held that reimbursement must be for time
appropriately spent by counsel on the particular case....
(Citations omitted, emphasis in original), Danks v. Government
Employers Insurance Co., 307 Pa. Super. 421, 453 A.2d 655 (1982).
Counsel may prove the "reasonableness" and "appropriateness" of
the hours actually spent by whatever means they choose; however,
the court must have on the record sufficient evidence from which it
can infer that the time claimed by the attorneys was related to the
litigation in question, that it was reasonable to expend that thme
to perform the task for which the time is claimed, and that the task
performed was necessary to further the litigation. The evidence
must be clear enough to permit the trial court or any reviewing
court to identify the activity and its relation to the litigation;
if the court need only refer to the file or the docket entries in
order to associate the time claimed with the task alleged to have
been performed, then the evidence is sufficient to support a claim
that the work performed cvas related to the litigation. In those
cases wherein the fee is to be awarded against an adversary party
and the parties cannot agree as to the amount of the fee, the party
seeking the fee must subject itself and its records, skill,
competency and knowledge to the scrutiny of the court, the adversary
party and the public.
33
In the instant case, plaintiff's counsel has introduced into the
record photocopies of "time slips" or "time records", purporting to
reflect the actual time expended by them in this action, summaries
of the photocopied records, a "chronology" of activity and time
spent in the litigation, and certain affidavits or portions thereof
in support of their claim. There was testimony concerning these
exhibits by attorneys Angino, Shuman and Helmreich, by paralegals
from both the Angino and Litman firms, and by administrative
personnel from the Angino firm. The testimony and exhibits show
that counsel have logged 1352.88 hours in pursuit of this litigation
prior to January 18, 1987; this time includes 426.27 hours spent,
after settlement, on the petition for counsel fees and settlement
matters.
We have reviewed the time entries and chronologies filed by
counsel in order to determine the time spent on particular task sr as
well as to insure that the time spent was reasonable for the task
performed and that the task was reasonably necessary. We have
disregarded time spent in other actions and time spent in activities
which fail to promote the interests of the class. We have refused
to allow counsel credit for what we consider excessive time spent on
25
activities which clearly do not require that time, and we have
deducted time when two attorneys from the same office have appeared
25
One of the firms, for example, seeks compensation for 2.2
hours spent composing and redrafting a fee letter to the class
representative; the letter is short and uncomplicated and we are
generous in allowing 1 hour for its drafting. Insofar as the
pleadings themselves are concerned, we were very surprised at the
amount of time spent upon the drafting of the one-count complaint
(over 26 hours). As is apparent from the fact that preliminary
objections were filed and partially sustained, that complaint was
(Footnote Continued)
34
before this court for argument on motions when only one attorney
26
argued. Additionally, time spent by attorneys on Gregory's
individual claim (such as inheritance tax matters) has been
27
disallowed. We have also refused to compensate counsel for time
spent on tasks which were required as a result of the Angino firm
and the Litman firm striking up their "co-counsel" relationship;
these activities include the exchange of various letters and
telephone calls, the entering of appearances, and the review of
matters preceding the co-counsel arrangement. As we have already
noted, we are considering the time spent on this litigation as
having been expended by one firm; any time spent communicating
information between the two firms, which would otherwise be
unnecessary were this litigation conducted by a single firm, will not
be allowed. We are aware that it was the purported expertise of the
Angino firm which resulted in its inclusion as co-counsel in th~s
(Footnote Continued)
inadequate and failed to conform with the applicable law governing
class actions and the Rules of Civil Procedure; counsel spent, in
addition, 14.5 hours responding to the preliminary objections. A
total of 45 hours was expended by plaintiff's counsel before a
viable complaint was forthcoming; this time does not include
discovery, discussions among lawyers or conferences with the client.
We conclude that 45 hours to draft a complaint such as the one in
this lawsuit, and defend it from successful attack, is unreasonable
and we therefore allow only 20 hours for that project. Counsel also
spent 7 hours researching and drafting a reply to new matter; said
reply should not require more than 4 hours to research and draft; we
therefore exclude an additional 3 hours from our calculations.
26
We have disallowed 1.8 hours for this reason for the court
appearance on 9-1-83 of Mr. Portnoy since we have allowed 2.1 hours
for the appearance of Ms. Laing; we have refused to allow 1.5 hours
for the appearance of Ms. Laing on 5-26-83 at argument on
preliminary objections which was attended by Mr. Schubert.
27
1.7 hours have been deducted for these non-class related
activities.
35
action; however, this arrangement has generated additional time
charged by both firms which is not essential to the interests of the
class. Thus, we have refused to allow any time for the "review" of
one attorney's work by another attorney, and we have also disallowed
time for dictation of letters enclosing copies of opinions or copies
of letters directed toward third parties, or for review of those
28
letters.
In addition, we have found several time entries for which there
are no explanations, and entries which provide no clue as to their
purpose even when compared with the docket entries and the papers
29
filed with the court. We did not permit recovery for this time.
Finally, we note that considerable time was spent immediately
prior to the scheduled trial date in this action which has been
recorded as "trial preparation", "discussion between RCA and PGS",
and "review for trial." Although these entries are vague and dQ not
relate to any particular tasks performed, it is clear to this court,
in light of the quantity of information which was required in order
to prove plaintiff's claim, that the time was reasonably and
necessarily expended on behalf of the class. We therefore will not
penalize counsel for these several vague entries.
We conclude that, of the 926.61 hours spent on this litigation
by the attorneys prior to its settlement in December 1986, they have
established that 875.01 hours were actually spent in pursuance of
28
A total of 13.E hours have been disallowed on this basis.
29
4.1 hours have been disallowed for this reason.
36
, plaintiff's claim. In regard to the 426.27 hoursspent after
settlement, both to. administer the settlement and distribution of
the class members' awards, and in preparation of the fe30petition,
we have concluded that 22.47 hours are not compensable. The
remaining 403.8 hours expended by counsel after the settlement on
31
December 9, 1986 has been properly charged. In total, then, we
find that the plaintiff's attorneys have actually expended 1,278.81
hours in pursuit of this class action claim under the No-fault Act.
The No-fault Act provides that the court fix a "reasonable fee"
based upon actual time expended. The statute does not define
"reasonable fee"; nor does it set forth any other guidelines to
assist the court in arriving at a reasonable fee. Turning to the
class action rules, we find that Rule 1716 supplies additional
direction.
30
These hours include preparation and drafting of an affidavit
concerning prior experience of attorney Angino in regard to other
work loss cases (9.77 hours), examination of settlement petitions in
other cases (2 hours), computation of average hours spent in other
cases (3.25 hours), attendance at fee hearing by attorney Harris who
did not take part, except as a witness (7 hours), and preparation of
several letters which do not appear to advance the interests of the
class (.45 hours).
31
While at first glance this sum appears to be an excessive
amount of time to prepare and present a petition for counsel fees,
we note that Harleysville's conduct in this action required
plaintiffs~to essentially prove Harleysville's liability to the
class at the hearing on counsel fees. In order to establish that
Harleysville was responsible for counsel fees, plaintiff was
required to show that Harleysville violated the No-fault Act by its
refusal to pay benefits and that said refusals were unreasonable.
In three days of testimony Harleysville did not present any credible
evidence to rebut plaintiff's allegations that its refusals to pay
were unreasonable. It was partly Harleysville's own obstinance
which has resulted in the necessity of plaintiff's counsels' request
for over 400 hours to prepare for and attend the fee hearings.
37
Rule 1716(2) directs the court to consider "the quality of the
services rendered" when calculating the amount of the fee. As the
"Explanatory Note-1977" states in regard to this provision:
...Counsel who possess or are reputed to possess more
experience, knowledge and legal talent are entitled to
and generally command compensation superior to counsel who
are less endowed....
The testimony at the hearing established that the Angino firm
possesses considerable litigation experience in the area of No-fault
work loss claims. We are aware that the firm's prior experience in
this type of litigation enabled it to keep to a minimum the time
expended in researching this area of the law. No doubt such
experience also reduced the time necessary to prepare for trial and
the fee hearing in that less time was required by counsel to become
familiar with the evolution of the case law under the No-fault Act
than would have been needed by less knowledgeable counsel. The/
testimony also established that counsel had undertaken class action
cases prior to this one, and the evidence showed that the management
of such cases, including the instant one, was efficient and
comprehensive. We find no fault with counsel's work in the
pursuit of this action and indeed conclude that it was of superior
32
quality.
32
We must point out that the superior quality of counsel's
services is made evident more from inferences drawn from the
testimony and our knowledge of the litigation and its progression
than from the papers filed with the court. There is nothing
extraordinary about any of the pleadings, motions or briefs filed by
plaintiff which arouses our interest. In fact, the majority of the
pleadings are routine. However, we are impressed by counsel's
processing of the vast amount of information, despite Harleysville's
total lack of cooperation, within the time constraints imposed by
this court.
38
We are also to consider, by Rule 1716(3), the "results achieved
and benefits conferred upon the class..." when establishing a
"reasonable fee". In this action the class members received the
full extent of their benefits, a sum exceeding two million dollars,
as mandated by the No-fault Act, without the necessity of trial and3
without the attendant delay resulting from the inevitable appeals.
Although the parties agreed to an award reflecting less than the
statutory 18$ interest which is due on overdue no-fault payments, we
nevertheless consider the settlement to be most expedient and
conclude that this should be reflected in the award of the fee. In
addition, by establishing at the hearing on the petition for
attorney's fees that Harleysville refused, in violation of the
No-fault Act and without reasonable foundation, to pay benefits when
due, counsel has visited upon Harleysville additional damages in
terms of the fee award which Harleysville would not otherwise hive
been liable for had it followed the laws of this Commonwealth from
the outset. Such additional damages may prompt Harleysville to
re-evaluate its internal policies concerning both its insureds and
its compliance with the laws of Pennsylvania, benefiting those
persons who may hereafter make valid claims for monies due them
pursuant to contracts of insurance with Harleysville.
We must also look to Rule 1716(4), which requires the court to
consider "the magnitude, complexity and uniqueness of. the
33
The court, however, must take some credit for this in view of
the fact that it informed the parties that it would not approve a
settlement for less than the full amount of the underlying claims of
the class members.
39
litigation" when arriving at a fee. The "magnitude" and
"complexity" of the litigation receive some consideration under
1716(1), since the hours expended by the attorneys in the litigation
will almost assuredly be greater in an action of greater complexity
than in one which is relatively simple. And these factors are also
considered within 1716(2), since the court must consider the
complexity, uniqueness and size of the lawsuit when considering the
quality of the services rendered by counsel in that lawsuit.
However, we believe that the provision of Rule 1716(4) has
application in this action beyond merely the hours logged and
counsel's capability. The evidence at the hearing on counsel fees,
as well as our own perception of the position taken by Harleysville
from the commencement of this lawsuit, has established that
Harleysville, through its own unyielding stance, has caused this
litigation to become unnecessarily protracted. Harleysville ~
persisted for a considerable time after the class was certified as a
class action to insist that many of its insureds in fact did not
belong in the class. This court was required to entertain a motion
to compel discovery less than one month prior to trial because
Harleysville refused to turn over to plaintiff's counsel the files
of 38 claimants, based upon its position that said claimants were
not included in the class definition; 27 of those claimants were in
fact members of the class. Harleysville did not agree to settle the
action until one-half day of testimony was taken at trial. There
was no surprising or previously unknown information which was
brought out during that half-day which would suddenly make
Harleysville aware that it owed payment on these class members'
40
claims. Although the basis of this action was simply the violation
of certain statutory provisions of the No-fault Act, Harleysville
parlayed the litigation into a needlessly extended affair which did
nothing but add hours to plaintiff's counsel's time sheets. Had
Harleysville provided a legitimate defense or even conducted a
tolerable cross-examination of plaintiff's case at the hearing on
counsel fees, we might conclude that there was more to
Harleysville's position than obfuscation and obstruction. Yet
Harleysville presented no evidence to persuade this court that its
position regarding the claims of the class members were legitimate
nor did Harleysville bring out any evidence to contradict the claims
of plaintiff's counsel that the time spent on this litigation was
34
not reasonable or necessary. Harleysville's conduct throughout
this litigation has been the cause of whatever magnitude and
complexity can be attributed to the action, which in itself wash
based on a simple and straightforward claim. We will therefore
34
Harleysville did present testimony concerning its Exhibit 66;
this exhibit was allegedly a review of plaintiff's counsel's time
records attempting to establish the inadequacy thereof. Although we
are flattered that Harleysville undertook this review based upon our
Janicik v. Prudential Ins. Co. of America, 134 PLJ 10 (1986)
opinion, we must point out that a literal reading of any time
records would result in denial of most time recorded. The court
must consider the progress of the ligitation, its own knowledge of
the work produced by counsel and the papers filed with the court in
determining whether the time records are adequate. Defendant's
exhibit 66 is nothing but photocopies of time records and
"chronologies" already put in evidence by plaintiff's counsel and
does nothing to establish either that such time was not spent doing
the task as stated, or that such time was unrelated to the class
interests, or that such time was excessive. We must draw our own
conclusions from the evidence; however Harleysville added no facts
to the record by this exhibit or the testimony concerning it which
would compel us to make a determination that plaintiff's counsel's
hours should be further diminished.
41
consider Harleysville's manner of proceeding and the subsequent
complications created thereby to reflect Favorably upon plaintiff's
counsel's petition for counsel fees.
In arriving at a reasonable fee, we are guided by the
provisions of Rule 1716 which are in harmony with §1009.107(3) of
the No-fault Act.
Rule 1716(5) advises the court to consider whether the receipt
of a fee was contingent on success when calculating the fee award.
In Janicik v. Prudential Ins. Co. of America, 134 PLJ 10 (198635we
considered the meaning of the various provisions of Rule 1716,
including 1716(5). We stated:
...Where counsel depends for compensation for services
upon a monetary recovery by the class, then the court
should consider the degree of risk of (a) no recovery, (b)
partial recovery and (c) full recovery. In addition,
where there is no question that there is liability, and
only the amount of damages need be fixed, then the inquiry
must be made as to (a) the amount admitted to be due or
the amount which can be determined to be due and (b) the ~
risk as set forth above for any recovery of any excess
beyond the amount admitted to be due.
The reality and degree of the risk must also be viewed,
not only from the nature of the claim and the probability
of recovery, but also from the experience, skill and
ability of counsel to increase the probability of recovery
and decrease the risk of failure. The court must evaluate
the risk, not with hindsight from the point in time of the
resolution of the controversy, but from the viewpoint of
counsel at the time the litigation was commenced.
134 PLJ at 20.
Consideration of this factor in light of the limiting language
of the No-fault Act, however, requires us to conclude that we cannot
35
No Pennsylvania appellate court as of this date has addressed
the factors set forth in Rule 1716 or their application.
42
• utilize it in our determination of the fee award. As we have
previously noted, the Rules of Civil Procedure are not substantive
in nature, and as such cannot alter or amend substantive rules of
law. The No-fault Act allows that a "reasonable fee" may be awarded
based upon "actual time expended." The contingency or inevitability
of recovery in any action bears no relation to the actual time
expended in the litigation; it reflects only the risk taken by
counsel in assuming his client's case. Whether the fee is
"reasonable" likewise does not depend upon the likelihood of
recovery in any given case; the reasonableness of the fee is a
reflection of the services performed in light of the litigation as
it has unfolded. "Contingency" of the recovery of the fee is
neither mentioned in the No-fault Act nor can it be inferred to be
included in the parameters set forth by the Act. We therefore will
not consider Rule 1716(5) when arriving at a reasonable fee award.
We note that plaintiff's counsel have cited to us numerous
federal court decisions to support their position that they are
entitled to an "enhancement" of the fee award based upon a number of
factors, including counsel's litigation experience, the risks
inherent in the litigation, the services provided by counsel and the
benefits attained for the class through the litigation. In Janicik,
supra, we considered and rejected the notion of "enhancement" or use
of a "multiplier" of the fee award as has been sugge36ed and
utilized by the federal courts in the third circuit.
36
In particular we rejected the cases of Lindy Brothers
Builders v. American Radiator and Standard Sanitary Corp., 487 F.2d
(Footnote Continued)
43
In that opinion, we stated:
In considering the guidelines for fee awards in federal
cases...we must keep in mind that the federal class action
rule, rule 23, does not refer in any way to counsel fees.
Since many federal statutes provide that counsel fees may
properly be awarded thereunder, the federal courts by
necessity were required to develop their own criteria
absent any guidance from the rules themselves. The
federal courts, therefore, within the confines of the
Constitution and applicable statutes, were free to adopt
and apply such standards as suited the particular type of
action before them including class actions.... In
contrast, however, our own class action rules specifically
address the award of counsel fees in Rule 1716. Since
rule 1716 advises us of those factors which we must
consider in fixing counsel fees, we, unlike the federal
courts, cannot adopt our own formulations for doing so but
rather must apply those provided for by the rule.
134 PLJ at 17.
Rule 1716 makes no reference to an "enhancement" of the fee.
37
It merely provides guidance to enable the court to arrive at a fee
which fairly and adequately compensates counsel for the work done
and the results achieved. More importantly in this action, however,
(Footnote Continued)
161 (3rd Cir. 1973)(Lindy I), Merola v. Atlantic Richfield Co, 493
F.2d 292 (3rd Cir. 1974) and Lindy Brothers Builders v. American
Radiator and Standard Sanitary Corp., 340 F.2d 102 (3rd Cir.
1976) (Lindy II) .
37
And, as we noted in Janicik, supra at 17,
The current Pennsylvania rules governing class actions
were adopted and became effective in 1977. In the
formulation of the rules, the rules committee had the
benefit of the aforementioned federal cases relating to
the award of counsel fees in class actions. The
guidelines set forth in rule 1716 are in part an adoption
of some of the guidelines articulated by the federal
courts. It is noteworthy, however, that nowhere in rule
1716 itself, as adopted by our Supreme Court, or in the
explanatory comments of the rules committee to rule 1716,
is the term "multiplier" mentioned; nor is the concept of
enhancing the basic fee by an across-the-board
amplification ever suggested.
44
the No-fault Act specifically confines the court to a calculation of
the fee award based upon actual time expended. And even more
indicative of the intent of the Act is that provision which renders
the charging or collection of an excessive fee under the provisions
of the statute a misdemeanor punishable by fine and/or
imprisonment. Section 1009.602 provides, inter alia,
1009.602. Excessive charges
Any person who charges, demands, receives or collects
for...legal services rendered in connection with a claim
for basic loss benefits, any amount in excess of that
authorized by this act with awareness that the charge is in
excess of that authorized is guilty of a misdemeanor and
upon conviction may be fined not less than one hundred
dollars t$100) or more than five hundred dollars ($500) or
may be imprisoned for not more than six months or both.
Such language clearly evidences the intent of the No-fault Act
to restrict the awarding of a "reasonable fee" to the "actual time
expended." This court does not have the authority to entertain any
other considerations in awarding a fee beyond the hours spent b~ the
attorneys and those sections of Rule 1716 which do not contradict or
expand the No-fault Act's provisions concerning attorney's fees.
The fee award is based upon the work done in this case alone.
We are not compensating counsel for the work done in other actions.
Nor is our fee award a recognition of the propriety of counsel's
past fee recoveries or an endorsement for future ones. We are
addressing only counsel's effort in this action for these class
members, and consider only the results obtained in this action for
these class members. Although counsel's experience and knowledge is
taken into account when considering what fee is reasonable, we will
not take into account the actual time or resources expended in any
litigation other than that before us when arriving at the fee.
45
Counsel's normal fee recovery, either on an hourly basis or on a
contingent basis, does not control; however, we may consider it as
evidence when arriving at a fair and reasonable fee in this action.
In light of the above, then, we must arrive at an hourly rate
which we deem to be "reasonable" so that a "reasonable fee" can be
38
calculated "based upon actual time expended." A witness for
Harleysville testified that attorneys in the position of plaintiff's
counsel in both Pittsburgh and Harrisburg earned no more than $75
per hour. Litman presented testimony that its billing rates varied
between $90 and $150 depending upon the experience of the attorney.
Shuman, of the Angino firm, testified that in the only case in which
she was involved wherein the Angino firm billed her time at an
hourly rate, she was billed at $150 per hour. She also testified
that, although Angino's firm did not bill by the hour, Angino's
contingent fee recovery, when divided by the number of hours sp~nt
to effect such recovery, resulted in a fee of approximately $1300
per hour.
We are well aware that the hourly rate at which attorneys are
billed varies greatly, depending on a number of factors. We are
also aware, from other claims made before this court for counsel
fees, that counsel routinely seek compensation based upon
rates ranging from $100 to $150 per hour, in spite of the fact
38
Although counsel has requested an award based upon a
percentage of the overall recovery herein, the language of §107(3)
clearly prohibits such a calculation. We have no other alternative
than to calculate the fee by determining an hourly rate which is
"reasonable" and multiplying it by the actual number of hours spent
litigating the claim.
46
r ~ ~.
' of the term from a statutory source or from the judicial
interpretation thereof.
There being no definition of "costs" in the No-fault Act, we
40
turn to the Judicial Code in order to determine what costs are and
which costs, if any, may be recovered by a party. Section 102 of
the Judicial Code is entitled "Definitions" but, like §103 of the
No-fault Act, provides no definition of the term "costs". However,
§1726 of the Judicial Code addresses itself to costs. That section
provides, inter alia,
§1726. Establishment of taxable costs
The governing authority shall prescribe by general rule
the standards governing the imposition and taxation of
costs, including the items which constitute taxable costs,
the litigants who shall bear such costs, and the
discretion vested in the courts to modify the amount and
responsibility for costs in specific matters....
41
The governing authority has promulgated several rules ~
regarding costs which are applicable to civil actions in general.
40
42 Pa. C.S.A.' §101, et seq.; 1976, July 9 P.L. 586, No.
142, §2, effective June 27, 1978.
41
42 Pa. C.S.A. §102 defines "governing authority." as
(1) The Supreme Court; or
(2) any agency or unit of the unified judicial system
exercising a power or performing a duty pursuant to
section 1721 (relating to delegation of powers).
50
r
42 43 44. 45
These include Pa. R.C.P. 217 - 219 1006 (e) ,~ 1035 (f) as well
46~ 47
as several equity and discovery rules Several of thes48rules
specifically set forth those items to be included as costs;
however, plaintiff does not seek compensation for the costs which
have been addressed by the "governing authority" in the rules. Nor
do any of the rules which refer only to "costs", without further
elaboration, apply to those items for which plaintiff seeks
reimbursement.
42
Rule 217 addresses liability for costs when an action is/
continued.
43 view of "premises
Rule 219 considers costs incurred in a jury
involved in ... litigation."
44 laintiff if an action is
Rule 1006 (e) imposes costs on p
dismissed or transferred for lack of venue.
45 udgment proceedings if
Rule 1035(f) allows costs in summary j
a party has acted in bad faith or for purposes of delay only.
46
Rules 1523, 1533 and 1574.
47
Rules 4008 and 4019.
48
For example, Rule 1523 states in part that "Costs shal
include fees of the examiner, master, auditor, accountant or expert
apponted by the court....
51
f ~
Since the Judicial Code refers only to the power of the
governing authority to promulgate general rules concerning costs,
and the governing authority has issued rules addressing only a few
limited circumstances, we must consider other statutory sources in
order to determine whether the items for which plaintiff seeks
reimbursement are compensable by law as costs. There being no
currently enacted statute which addresses costs in general other
than that which we have outlined above, we turn next to those
statutes which, having been repealed by the Judiciary Act Repealer
49
Act (hereinafter JARA), have been made a part of the common law of
50
Pennsylvania.
Costs, in civil actions brought prior to the effective date of
the Judicial Code, were authorized by, inter alia, applicable
provisions of 12 P.S. §1, et seq., Civil and Equitable Remedies and
Procedure. Review of Title 12 establishes that costs were awarded
in some of the same instances as they are under the Judicial Code
49
42 P.S. §20001 et seq.; 1978, April 28, P.L. 202, No. 53, ~1,
effective June 27, 1978.
50
Section 20003 of JARA provides, in part:
The specific repeals effected by [JARA) are intended to
eliminate obsolete, unnecessary or suspended statutory
provisions. General rules promulgated pursuant to the
Constitution of Pennsylvania and the Judicial Code in
effect on the effective date of the repeal of a statute,
shall prescribe and provide the practice and procedure
with respect to the enforcement of any right, remedy or
immunity where the practice and procedure had been
governed by the repealed statute on the date of its
repeal. If no such general rules are in effect the
practice and procedure provided in the repealed statute
shall continue in full force and effect, as part of the
common law of the Commonwealth, until such general rules
are promulgated...." (emphasis added)
52
51
today; there were also a number of statutory provisions which
allowed for the award of costs under prior law which have not been
specifically addressed by the 'governing authority' in the Rules of
Civil Procedure. However, we find no authority in the prior
statutes, which would now be a part of the common law, which allows
for the reimbursement of those items of expense requested by
plaintiff.
Judicial interpretation of the term provides us with little
guidance. "'The term costs is a comprehensive one, including in its
ordinary acceptation, officer's fees, as well as the party's own
charges for witnesses, where witnesses can legally be called and
examined': Penna. R.R. Co. v. Keiffer, 22 Pa. 356, 358." Sivak
Estate, 161 Pa. Super. 323, 327-328 (1947); aff'd. 359 Pa. 194, 58
A.2d 456 (1948). "In cases docketed with the prothonotary there are
two distinct types of costs incurred, i.e., those docketed by the
prothonotary and paid to him and those incurred by counsel
independent of the prothonotary." Olsen v. Volpe, 213 Pa. Super.
498, 249 A.2d 835 (1968).
We have no problem with the award of the prothonotary's costs
in this action, since those are the costs which the prothonotary is
52
authorized to collect by statute and which have always been
awarded in actions at law where damages were recovered by the
plaintiff. This rule was established by the Statute of Gloucester,
51
Such as in equitable proceedings and changes of venue.
52
42 P.S. §21042, et seq.; 1982, April 8, P.L. 303, No. 85, §2,-
imd. effective.
53
E .
r
an English statute dating from the thirteenth century. In regard to
this rule of law, our Supreme Court has stated:
By the statute of Gloucester, 6 Edw. 1, chap. 1, in force
in this state, it is provided, "That the demandants may
recover against the tenant the costs of his writ
purchased, together with the damages aforesaid. And this
Act shall hold in all cases where the party is to recover
damages:" Robert's Digest, 107. Though the statute only
mentioned the costs of the writ, the construction has been
that it extends to all the costs of the suit....
Pennsylvania Railroad Company v. Keiffer, 22 Pa. 356, 358 (1853}.
Said another early Supreme Court decision,
...costs, and costs of suit, are generic terms, including
the fees due officers of the court, and so generally
understood and applied, both in the language of the books,
and that of the profession. In our own acts of Assembly,
they are used in that sense in many cases....
Fleming v. Pennsylvania Insurance Co., 4 Barr 475, 577 (1846).
Beyond the record costs of the prothonotary, sheriff and other
officers of the court entitled to so charge, however, costs must be
specifically allowed by statute in order to be recovered by a party
in an action at law. We find no authority whatsoever, either within
the No-fault Act, the class action 'rules, the Rules of Civil
Procedure, or the common law, which authorize as costs to a party
the expenses for photocopies, telephone calls, express mail
delivery, supplies, meals, or computer or paralegal charges herein
sought by the plaintiff. There is no statutory authority which
authorizes the recovery of those items nor which allows a party to
be compensated generally for the expenses of investigation and
preparation for trial. We therefore conclude that those items of
expense for which plaintiff seeks reimbursement are not recoverable
as costs or expenses in an action under the No-fault Act, and so
54
~ ~
deny them. However, we will direct that all taxable costs incurred
by the parties in this action be paid by Harleysville.
Having determined the amount of the fee to be paid by
Harleysville and reviewed the reasonable hours spent on the tasks
performed by each law firm, and in light of the fact that the
majority of the substantive matters were performed by the Angino
firm, which also served as lead counsel, we divide the fee as
follows: the Litman firm is to receive 30$ of the total award, or
$115,092.90; the Angino firm is to receive 70$ of the total award,
or $268,550.10.
55
„~~ ,~
ORDER
SILVESTRI, J.
~~
AND NOW, this ~~~'day of May, 1987, it is hereby ORDERED as
follows:
1. Defendant, Harleysville Mutual Insurance Company, is liable
to the Plaintiff's counsel for reasonable attorney's fees.
2. The attorney's fee is fixed in the amount of $383,643.00.
3. Defendant is directed to pay to the law firms of Litman,
Litman, Harris, Brown, and Watzman, P.C. and Angino & Rovner, P.C.,
separately, the portion of the aforesaid fee as set forth in paragraph
4 hereof.
4. The law firm of Litman, Litman, Harris, Brown, and Watzm~n,
P.C. is to receive 30$ of the total fee award of $383,643.00, or
$115.092.90; the law firm of Angino & Rovner, P.C. is to receive 70~
of the total fee award of $383,643.00, or $268,550.10.
5. Defendant is directed to pay all taxable costs of the
proceeding, which costs shall be made payable to the law firms
incurring said costs.
6. The request of plaintiff for reimbursement of expenses other
than taxable costs is denied. ~ j'
%~ %
BY THE COU T,
,`
t ~
HUGH J. COLEMAN, Administrator: IN THE COURT OF COMMON PLEAS OF
of the Estate of Garv Thomas : CUMBERLAND COUNTY, PENNSYLVANIA
Coleman,~Deceased; G. C. .
SKIPPER, Administrator of the CIVIL A~TI011.- LAW
Estate of Richard C. Skipper,
Deceased; JAMES M. LAU, N0. 1569 1986
Administrator of the Estate of:
James V. Lau, Deceased, and .
others similarly situated, CLASS ACTION
Plaintiffs
V. .
HARLEYSVILLE MUTUAL JURY TRIAL DEMANDED
INSURANCE COMPANY, .
Defendant
IN RE: NON-JURY TRIAL
Proceedings held before the Honorable GEORGE E.
HOPPER, J., Cumberland County Courthouse, Carlisle,
Pennsylvania, on Wednesday, June 14, 1989, commencing
at 9:30 a.m. in Courtroom Number Three.
APPEARANCES:
PAMELA G. SHUMAN, Esquire
For the Plaintiff
ALEXANDER KERR, Esquire
DENNIS R. BARTHOLOMEW, Esquire
For the Defendant
~ •
FOR THE PLAINTIFF
1 - Harleysville Pa.
No-Fault application 9 17
2 - Internal memo dated 7/7/75 9 17
3 - Internal memo dated 5/3/79 10 17
4 - Internal memo dated 12/17/79 10 17
5 - Manual on No-Fault claims 10 17
6 - Internal memo dated 10/20/80 11 17
7 - Internal memo dated,ll/5/80 11 17
8 - Internal memo dated 8/17/82 12 17
9 - Internal memo dated 10/1/82 12 17
10- Internal memo dated 11/24/82 12 17
11- Internal memo dated 3/29/83 12 17
12- David L. Kennedy testimony 13 17
13- Deposition of Carl Maio 13 17
14- Testimony of Carl Maio 13 17
14A - Testimony of Carl Maio 13 17
15- Examples of claims 108 182
16- Life Tables 1978 to 1983 160 181
17- Summary of 123 claimants 161 182
18- Summary of 123 claimants 162 182
19- Separate trial file on
each of the 123 claimants 19 181
2-B
1- Winifred Foley 17 29 33 -
2- Clifford A, Long 34 41 44 -
3- Donald Jenkins 45 51 - -
4- Steven A. Smith 51 55 - -
5- John Seiber, Jr. 57 61 - -
6- Charles S. Rickenbach 62 65 - -
7- Deanna Kauffman 66 69 - -
8- Julian S, Hagin 71 - - -
9- Kimberly Guise 151 164 - -
FOR
1- THE DEFENDANT
Ernest R. Gaugler
193
198
202 -
2- Julian S. Hagin 204 265 294 297
2-A
~ •
FOR THE DEFE NDANT ID ENTIFIED
5 - Internal memo 218
6 - Copy of letter to Mrs. Ailes 219
8 - Acord form dated 1/2/81
on Timothy W. Anderson
9 - Barrett pay stubs dated
7/12/78 and 7/26/78
11- Instructions for setting up
new files
12- Internal memo dated 11/12/84
13- Internal memo dated 5/23/85
14- Letter re: Funeral benefits
15- Letter re: Wage verification
3/85
16- 1978 Pa. Income tax return
Bastian
19- Acord form on Isabelle
Griffith
23- Internal memo dated 10/9/78
24- Memo from Lancaster claim rep
25- Letter from Attorney Homsher
27- Letter dated 2/6/84
28- Letter from Bank of Lancaster
re Bowman
29- Internal memo
30- Letter dated 4/11/83
34- Internal memo dated 7/2/82
221
168
224
225
225
225
225
226
227
228
228
231
230
229
231
231
232
ADMITTED
240
240
240
240
240
240
240
240
240
240
240
240
240
240
240
240
240
240
240
2-C
• •
INDEX TO EXHIBITS (_COntinuer l)
FOR THE DEFENDANT
ID ENTIFIED ADMITTED
35- .
Internal memo 233 240
36- Home Office Schedule of
Payments 233 240
37- Acord Loss notice dated
2/16/81 233 240
38- Internal memo 234 240
39- Internal memo dated 5/26/83 235 240
40- Copy of Covell settlement
draft 236 240
41- Letter dated 10/14/83 236 240
42- Document in Leach vs
Harleysville 236 240
43- Covell No-fault application 234 240
44- Internal memo dated 6/24/81 235 240
45- Internal memo re: Covell 235 240
46- Internal memo dated 7/20/81 235 240
47- Letter dated 7/22/81 235 240
54- Computer printout on
Leon Cron's policy 255 240
162- Policy printout on Stanley 262 240
185- Internal coding removing
Hilpert premium 197 203
186- Home office copy of Hilpert
auto policy 195 203
188- Policy refection by
policyholder 197 203
2-D
• •
INDEX TO EXHIBITS(Cnntinueri)
FOR THE DEFENDANT IDENTIFIED
189- Notice of premium due
Hilpert 196
201- Printout on Elwood Houser 262
227- Printout on Katona 263
265- Multi-page document
459- Document re: Smith claim
460- Harleysville's file on Smith
574- Harleysville's file on Woods
601- List of categories of
claimants
602- List of categories of
claimants with decedents
603- List of categories of
claimants
604- List of decedents
606- Printout of S. Esposito file
42
55
57
69
211
211
212
212
255
203
240
240
240
240
240
240
240
240
240
240
240
Defendant's Exhibits 1 through 575 were admitted on page 240,
Defendant's Exhibits 576 through 609 were admitted on page 252.
Defendant Exhibit 599 was admitted on page 252.
Defendant Exhibits 608 and 609 were admitted on page 251.
2-E
•
1 June 14, 1989
2 Carlisle, Pa.
3
4 THE COURT; Ma'am.
5 MS. SHUMAN: I would like to present an
6 opening to the cou rt to set a framework for the testimony
7 and exhibits that will be introduced in this case.
8 THE COURT: This is the non-jury trial of
9 Coleman, et al. vs Harleysville.
10 MS. SHUMAN; That is correct.
11 THE COURT: And appearing for the
12 plaintiffs is Pamela G. Shuman, Esquire. Appearing for
13 the defendants will be --
14 MR. KERB: Alexander Kerr, your Honor, and
15 with me at counsel table i s Dennis J. Bartholomew.
16 THE COURT; All right. Are you ready,
17 gentlemen?
18 MR. KERR: Yes, we are, your Honor.
19 THE COURT; Ms. Shuman?
20 MS. SHUMAN: Yes, your Honor.
21 THE COURT: You wanted to say something,
22 MS. SHUMAN: I want to give an opening.
23 THE COURT: Well --
24 MS. SHUMAN: In an abbreviated fashion, if
25 that would be all right, t o set the stage for what is
3
~ •
1 going to be presented to the court.
2 THE COURT: Just very short, ma'am.
3 MR. KERR: Your Honor, before Ms. Shuman
4 begins, we have one outstanding motion which was a motion
5 about statute of limitations. There were several
6 claimants which Harleysville contends are not properly
7 part of the class because their claims are barred by the
8 statute of limitations.
9 That has been fully briefed and all the
10 submissions have been presented to the court. I didn't
11 know if your Honor wanted to have argument or you wanted
12 to consider that before the hearing began.
13 MS. SHUMAN: Your Honor, I disagree with
14 Mr. Kerr's assertion that all evidence has been put before
15 the court.
16 The motion to which Mr. Kerr refers is a
17 motion that was filed in late May alleging, among other
18 things, that the plaintiffs had not produced sufficient
19 evidenc e and therefore the court should find the claims
20 barred by the statute of limitations.
21 The whole purpose of having a trial in this
22 matter is to put before the court all evidence relevant, to
23 these i ssues. We believe that it is appropriate to go
24 forward with the trial at this time.
25 You, as the fact finder, can then make a
4
•
•
1 determination on these claims ,lust as on all the other
2 claims.
3 THE COURT: If I have a motion outstanding,
4 Mr. Kerr, we will take it under advisement and give you an
5 opportunity to argue it at the appropriate time.
6 MR. KERR: Thank you very much, your Honor.
7 MS. SHUMAN: We are here this morning with
8 regard to post mortem work loss claims pursuant to the
9 Pennsylvania No-Fault Motor Veh icle Insurance Act. That
10 Act was enacted and went into effect in 1975. It was
11 repealed in 1984. We are here in 1989 asking the court to
12 determine the entitlement of decedents to work loss.
13 Probably few issues have been more fully
14 litigated than post mortem work loss benefits. Our
15 appellate courts have spoken at length and with frequency.
16 THE COURT: Well, ma'am, you don't have to
17 argue the law on this now.
18 MS. SHUMAN: Presented in this case are 123
19 claims. They involve 41 unpaid claims where Harleysville
20 paid no work loss benefits. They involve seven partially
21 paid claims where Harleysville paid some post mortem work
22 loss benefits, but not the statutory amount of $15,000.00.
23 And they involve 64 claims where Harleysville paid basic
24 work loss benefits, but under the No-Fault Act owed
25 interest because those benefits were not paid within 30
5
•
1 days and therefore were overdue.
2 Additionally, there are 11 claims where
3 Harleysville has paid money into court admitting its
4 responsibility to pay basic work loss benefits. It has
5 not, however, agreed on the amount of interest owed on
6 those claims. And therefore, that, the decision as to
7 interest, is before your court as well.
8 We are prepared to present this morning a
9 number of memorandums from Harleysville's files that
10 establish their policies and procedures with re gard to
11 payment of post mortem work loss benefits.
12 We are also prepared to put into evidence
13 the deposition testimony and trial transcript t estimony
14 from a prior class action captioned Gregory vs
15 Harleysville, in which testimony was taken with regard to
16 Harleysville's policies and practices. This is an attempt
17 to make this trial as compact as possible yet still get
18 before the court the factual background against which
19 these claims must be decided.
20 Additionally, we are prepared to put on
21 seven class members as examples or representatives of the
22 claims that your court is asked to decide. Two involve
23 unpaid claims, two involve partially paid claims and three
24 involve claims where interest is due.
25 We have taken depositions with regard to a
6
•
1 number of claimants as to whom Harleysville either denied
2 information or disputed a material fact necessary to the
3 plaintiffs to establish their cause of action. Those
4 depositions are being submitted to the court in this
5 matter in lieu of live testimony on those claims.
6 On most of the claims there is no factual
7 dispute. It simply becomes an issue for the court to
8 decide when interest commences to run, whether the estate
9 is entitled to recover the benefits, those sorts of
10 decisions.
11 We also plan to put on Mr. Hagan, who is an
12 employee of Harleysville, the person who signed the
13 pleadings in this case, with regard to the claims that are
14 part of this class.
15 We are also prepared to put on a paralegal
16 from the law firm of Angino and Rovner who was involved in
17 reviewing Harleysville's files and in lathering additional
18 information.
19 We believe that the entitlement in this
20 matter is clear. We regret that in 1989 we have to be
21 litigating this issue.
22 We request additionally that the court
23 determine whether Harleysville is responsible to pay
24 plaintiffs' counsel fees and expenses. We are not
25 requesting that the court determine the amount of those
7
•
1 counsel fees and expenses at this time. Only whether
2 Harleysville.is obligated under the No-Fault Act to pay
3 them. Either because the claims have been paid after
4 notice of representation or because Harleysville had no
5 reasonable foundation to deny these claims.
6 Thank you.
7 THE COURT; Would you like to say a few
8 words?
9 MR. KERR; Your Honor, if I might, I would
10 like to reserve a few words for the opening of
11 Harleysville's case, direct case.
12 THE COURT: Now, Ms. Shuman, you are going
13 to present some individual witnesses.
14 MS. SHUMAN: Yes, your Honor.
15 THE COURT; And as you present a witness, I
16 would like to have the proposed Findings of Fact and
17 Conclusions of Law in front of me on each witness. And I
18 would like to have plaintiffs' findings and defendant's
19 findings.
20 The
21 feet thick. And I
22 a second's notice.
23 MS.
24 done, your Honor,
25 THE
file in this case is approximately two
can't lay my hand on these documents at
SHUMAN: We will arrange for that to be
okay.
COURT: All right.
8
•
1 MS. SHUMAN: We will provide you with a
2 copy of the documents opened to the page that deals with
3 that claimant, your Honor.
4 I would like, your Honor, to place on the
5 record some exhibits from Harleysville's files preparatory
6 to calling class members to testify. I have pre-marked
7 these exhibits. I hove provided a copy of them to counsel
8 for Harleysville and a copy for the court's use as well.
9 As Plaintiffs' Exhibit Number 1 is a copy
10 of the Harleysville Pennsylvania No-Fault Motor Vehicle
11 Insurance Act application for benefits. Under the title
12 of the document it states, to enable us to determine if
13 you are entitled to benefits under the Pennsylvania
14 No-Fault Motor Vehicle Insurance Act, please complete this
15 form and return it promptly.
16 Attached to the bottom of the form are
17 authorizations for release of work or other loss
18 information as well as an authorization for release of
19 health service or treatment information.
20 Plaintiffs' Exhibit Number 2 is an internal
21 memorandum from Harleysville insurance companies to all
22 Pennsylvania District Claims Offices dated July 7, 1975.
23 The subJect of the memorandum is denial letter No-Fault.
24 In part this states that a denial letter --
25 THE COURT: Well, you needn't recite that,
9
• •
1 ma'am.
2 MS. SHUMAN: Fine. Plaintiffs' Exhibit
3 Number 3 --
4 THE COURT: Wait a second, ma'am.
5 MS. SHUMAN: Plaintiffs' Exhibit Number 3
6 is an internal memorandum from Harleysville Insurance
7 Companies to all Pennsylvania District Claim Offices. It
8 is dated May 3, 1979, and the subJect is noted as Heffner
9 vs Allstate, decision involving lost income.
10 Plaintiffs' Exhibit Number 4 is an internal
11 Harleysville memorandum. It is adressed to all
12 Pennsylvania District Claim Managers, and it is dated
13 December 17, 1979. The subJect of that memorandum is
14 noted as work loss benefits for survivors of deceased
15 victims.
16 THE COURT: You furnished this same exhibit
17 to Mr. Kerr, have you not?
18 MS. SHUMAN: Yes, your Honor, a complete
19 set of these documents have been provided to defense
20 counsel.
21 THE COURT; All right.
22 MS. SHUMAN; Plaintiffs' Exhibit Number 5
23 is a Harleysville manual on No-Fault claims. The manual
24 sets forth Harleysville's policy with regard to payment of
25 No-Fault claims. The relevant section, your Honor, is
10
i •
1 pages -- at the top of each page there is a -- it says Pa.
2 N. F., Pennsylvania No-Fault --
3 THE COURT: What is the first page of this
4 document?
5 MS. SHUMAN. Well, there is a serial number
6 printed on it. The first page of the document is 03005.
7 We included the whole document, your Honor, so that it was
8 clear what the source was. The applicable pages that we
9 are actually concerned about commence on page 14, noted as
10 2.14 up in the corner. And the serial number on that is
11 03023.
12 THE COURT: And what is this called?
13 MS. SHUMAN: This is a manual devised by
14 Harleysville with regard to Pennsylvania No-Fault benefits
15 and how claims for No-Fault benefits should be handled.
16 Some of the document was de vised in 1975. Some portions
17 of it were revised and they are coded as 1979.
18 Plaintiffs' Exhibit Number 6 is an internal
19 Harleysville memorandum dated October 20, 1980. It is
20 addressed to all District Claim Managers and its subJect
21 is noted as Pennsylvania No-Fault wage lo ss.
22 Plaintiffs' Exhibit Number 7 is an internal
23 Harleysville memorandum dated November 5, 1980, addressed
24 to all District Claims Managers, and the subject is
25 Pennsylvania No-Fault work loss benefits to deceased
11
1 victims survivors.
2 Plaintiffs' Exhibit Number 8 is an internal
3 Harleysville memorandum dated August 17, 1982, addressed
4 to all Pennsylvania District Claim Managers. And the
5 subject is Pennsylvania No-Fault late payments.
6 Plaintiffs' Exhibit Number 9 is an internal
7 Harleysville memorandum dated October 1, 1982. It is
8 addressed to all Pennsylvania District Claim Managers.
9 And its subJect is noted as Pennsylvania No-Fault -
10 fatalities.
11 The next exhibit is Plaintiffs' Exhibit
12 Number 10. It is dated November 24, 1982. It is a
13 Harleysville internal memorandum addressed to all
14 Pennsylvania District Claims Managers. And its subject is
15 Pennsylvania No-Fault - fatalities.
16 Plaintiffs' Exhibit Number 11 is dated
17 March 29, 1983. It is an internal Harleysville memorandum
18 addressed to all Pennsylvania District Claim Managers.
19 And its subJect is Pennsylvania No-Fault - work loss
20 benefits.
21 Plaintiffs' Exhibit Number 11 is a
22 transcript --
23 THE COURT: Excuse me, ma'am. I already
24 have a number 11.
25 MS. SHUMAN: Plaintiffs' Exhibit Number
12
1 12 --
2 THE COURT: That is what I am on. Is that
3 right, Mr. Kerr?
4 MR. KERR: That is -- we gust got these
5 this morning as well. But I Just had an 11 so whatever
6 Ms. Shuman wants to do as numbering, we can make it 11-A
7 or 12 or however she wants to do it.
8 MS. SHUMAN: Fine. 12 is the transcript of
9 testimony of David L. Kennedy, the former unit manager of
10 Harleysville responsible for No-Fault claims. This is
11 testimony that was taken in the case captioned Gregory vs
12 Harleysville which was a case in Allegheny County. Mr.
13 Kennedy is the person who authored many of the memos that
14 are the prior exhibits.
15 Plaintiffs' Exhibit Number 13 is the
16 transcript of testimony -- I am sorry, transcript of the
17 deposition of Carl Maio, Assistant Vice President of
18 Harleysville Mutual Insurance Company. This deposition
19 was taken in Gregory vs Harleysville.
20 Exhibit Number 14 is the transcript of the
21 testimony of Carl A. Maio, Assistant Vice President of
22 Harleysville Mutual Insurance Company. Exhibit 14 is the
23 transcript of his testimony given in the plaintiffs'
24 case-in-chief in Gregory vs Harleysville.
25 If we can make the next exhibit, Exhibit
13
~ ~
1 14-A, that is the transcript of testimony of Carl A. Maio
2 taken in Gregory. That was in the defendant's --
3 THE COURT: That is more of his testimony.
4 MS. SHUMAN: In the same trial, your Honor,
5 that is more of his testimony. They are Just divided as
6 into plaintiffs' ca se and defen dant's case. He was called
7 by both parties.
8 I would like to move for the admission of
9 those Exhibits 1 through 14-A at this time.
10 THE COURT: Mr. Kerr.
11 MR. KERR: Your Honor, I Just received
12 these this morning. I would like to make the following
13 comments.
14 We certainly admit the authentication of
15 documents or Exhibits P-1 through P-11. I think it should
16 be noted for the record that P-6 bears a handwritten note
17 on it, never sent out. It is presented as a memorandum
18 sent to all District Claims Managers.
19 With respect to the transcript of Mr.
20 Kennedy's testimony in Gregory --
21 THE COURT: Wait a minute.
22 MR. KERR: That is P-12, I think.
23 THE COURT: You are admitting the
24 authentication of Plaintiffs' 1 through 11.
25 MR. KERR: Yes. They are Harleysville
14
~ ~
1 records.
2 THE COURT: All right.
3 MR. KERR: With respect to the transcript
4 of Mr. Kennedy's testimony, I have not had an opportunity
5 to review it in detail. I would note the following
6 obJection: insofar -- and this is Just going from my
7 recollection of that testimony -- insofar as it concerns
8 Harleysville's general policies, I think it has some
9 relevance here. But my recollection is that much of Mr.
10 Kennedy's testimony concerned individual files or claims
11 in the Gregory proceeding. And I don't think that has any
12 relevance to this proceeding.
13 So I would obJect to Mr. Kennedy's
14 testimony and the transcript of his testimony insofar as
15 it relates to specific exhibits and claims from claimants
16 in the Gregory class action who are not before the court
17 here, and it is not relevant to this proceeding.
18 MS. SHUMAN: May I comment on that, your
19 Honor?
20 THE COURT: We will --
21 MS. SHUMAN: Since you are the finder of
22 fact in this matter, you a re going to determine what is
23 relevant in any event. I don't be lieve Mr. Kennedy's
24 testimony is directed, at least in any significant way, to
25 individual claims. He was called as the author of many of
15
1 the memos that are Exhibits 1 through 11 with regard to
2 Harleysville's policies and practices.
3 MR. KERR: We would be happy to provide --
4 if we have, in fact, specific objections to specific pages
5 of that testimony, I would be happy to try to supplement,
6 make my objections more specific. I am just reserving the
7 broad nature of my objection.
8 THE COURT: Well, you want to object to
9 relevancy and you have no other objection other than to
10 that?
11 MR. KERR: That is correct.
12 THE COURT; So we will argue relevancy on a
13 case by case basis as it comes up.
14 MR. KERR: Right. And with respect to Mr.
15 Maio, Ms. Shuman and I had stipulated that Mr. Maio's
16 testimony would be admissible here in lieu of having Mr.
17 Maio here personally. So we have no objection to that
18 testimony.
19 THE COURT; All right. Plaintiffs' --
20 MR. KERR: I assume you have it all. In
21 other word s, this is all the direct and the cross.
22 MS. SHUMAN: That is correct. I didn't
23 redact or eliminate anything. I simply had reproduced all
24 the pages of that witness' testimony.
25 MR. KERR: Fine. On that representation,
16
i •
1 we have no obJection to Exhibits 13, 14 and 14-A.
2 THE COURT: Plaintiffs' 1 through 11 are
3 admitted. Plaintiffs' 13, 14 and 14-A are admitted.
4 Plaintiffs' 12 is admitted subject to objections as to
5 relevancy on an individual case by case basis.
6 MS. SHUMAN: Thank you, your Honor.
7 THE COURT; Are you done with your
8 exhibits, ma'am?
9 MS. SHUMAN: Yes, I am, your Honor. I
10 would like to call a witness, a member of the class,
11 Winifred Foley.
12
13 Whereupon,
14 WINIFRED FOLEY
15 having been duly sworn, testified as follows;
16
17 THE COURT: What is your name, ma'am?
18 THE WITNESS: Winifred Foley.
19 THE COURT; Spell it, please.
20 THE WITNESS; F-o-1-e-y.
21 THE COURT: We will go off the record a
22 second while counsel help m e find the appropriate spots.
23 (Discussion held off the record.)
24
25 DIRECT EXAMINATION
17
1 BY MS. SHUMAN;
2 Q State your name, please?
3 A Winifred Foley.
4 Q And what is your address, Mrs. Foley?
5 A R.D. 3, Titusville, Pennsylvania.
6 Q And are you a representative plaintiff in
7 this action Coleman vs Harleysville?
8 A Yes, I am.
9 Q Did you testify before the court in the
10 certification hearing in December of 1987?
11 A Yes, I did.
12 Q Did you lose a relative as a result of a
13 motor vehicl e accident?
14 A Yes.
15 Q Who was that?
16 A My son, Timothy.
17 Q And when was Timothy's accident?
18 A It was in August of 1979.
19 Q And did Timothy or anyone in this household
20 have automobile insurance at the time of that accident?
21 A Yes, Harleysville.
22 Q And who was the named insured on that
23 Harleysville policy?
24 A I was.
25 Q Was Timothy listed as a driver and operator
18
•
1 on that policy?
2 A Yes.
3 Q Was Harleysville notified of Timothy's
4 fatal accident?
5 A Yes.
6 Q Do you know the circumstances of how it was
7 notified?
8 A The driver of the other automobile notified
9 them. His insurance company, I believe it was.
10 MS. SHUMAN: Your Honor, we have prepared a
11 file on each claimant. Knowing no other way to present
12 123 claims to the court, we have marked them as
13 Plaintiffs' Exhibit 19, which will be our last exhibit.
14 It will be necessary, however, throughout the testimony
15 here to refer to these documents.
16 We have provided a set of them to defense
17 counsel. We also have a copy for the use of the court.
18 However the logistics are going to work easiest on us,
19 since it is a little different than the average trial.
20 This is the court's copy of the Foley file
21 that is prepared, as with all the files listed as
22 Plaintiffs' Exhibit 19, rather than individually listed,
23 if that is agreeable to the court.
24 THE COURT: It is fine with me.
25 BY MS. SHUMAN:
19
•
1 Q Mrs. Foley, I am going to be showing you
2 the Foley file from Plaintiffs' Exhibit 19.
3 A Okay.
4 Q Do you have any personal knowledge of the
5 first document in that file?
6 A No.
7 THE COURT; Pardon me? I can't hear you,
8 ma'am.
9 THE WITNESS: No.
10 BY MS. SHUMAN;
11 Q What about the second document, headed
12 accord?
13 A Yes.
14 MR. KERR: Your Honor, just for those of us
15 trying to follow along, when you say the first document in
16 the file, I wasn't sure, is that the claim for the estate
17 of Timothy Kevin Foley?
18 MS. SHUMAN; No. The first doc ument is a
19 document provided by Harleysville called home office claim
20 index. That was the only document provided by
21 Harleysville on this claim.
22 The second document in the file is a copy
23 of an accord form.
24 MR. KERR: Fine. I didn't know what this
25 other document was that I had.
20
1 BY MS. SHUMAN:
2 Q Can you identify that document headed
3 accord?
4 A Yes.
5 Q And did you acquire that document?
6 A Yes, I did. This and several other ones.
7 Q And how did you get those documents, Mrs.
8 Foley?
9 A I got it from my insurance agent.
10 Q And your insurance agent was?
11 A (No audible response.)
12 Q And your insurance agent was a Harleysville
13 agent, is that correct?
14 A Yes.
15 Q And your insurance agent, your Harleysville
16 agent, had doc uments with regard to your son's fatal
17 accident, is t hat right?
18 A Yes.
19 Q Now, when you testified at the
20 certification hearing, did Harleysville say it had any
21 record of your son's accident?
22 A Not to my knowledge. They said they
23 didn't.
24 MR. KERR: Your Honor, I obJect to Mrs.
25 Foley test ifyi ng about what Harleysville testified about
21
• •
1 at a certification hearing. I think that is clear from
2 the record.
3 THE COURT; Isn't there a record on that,
4 ma'am?
5 MS. SHUMAN: Yes, there is, your Honor.
6 THE COURT; Why do we need somebody to
7 testify about it then?
8 THE COURT; What is your next question?
9 BY MS. SHUMAN:
10 Q With regard to the accord, Mrs. Foley, does
11 it indicate th e agent's name?
12 A Yes, it does.
13 Q And what was the Harleysville agent with
14 whom you dealt ?
15 A Associated Agencies, and they are in Reno,
16 Pennsylvania.
17 Q And what is the date of that form?
18 A 8/22/79.
19 Q When was Timothy's accident?
20 A It was on 8/20 of '79.
21 Q Does it indicate who the insured -- who the
22 insured was?
23 A Yes.
24 Q And who is indicated there?
25 A Winifred Foley.
22
• ~
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Q And that is you, is that correct?
A Righ t.
Q And does it indicate the company name?
A Yes, it d oes, Harleysville.
Q And under driver, who does it indicate?
A Tim.
Q And does it indicate Tim's relationship to
you?
A Yes, it says son.
Q Does it have Tim's age?
A Yes.
Q How old --
A 18.
Q Under remarks, what does it say?
A It says our insured driver was killed.
Q Can you identify the next document in the
file?
A Yes.
Q What is that?
A It is the front -- top page of the
insurance policy.
Q And is that a policy with Harleysville?
A Yes.
Q Was this -- is this the top page of the
policy that was in effect at the time of Tim's accident?
23
• •
1 A Yes.
2 Q Does it indicate on that sheet when that
3 policy went into effect?
4 A Yes, 9/78.
5 Q Can you identify the next document?
6 A Yes.
7 Q What is that?
8 A I am not exactly sure. It is Just --
9 Q Let me step back a second. Is this a
10 document tha t was provided to you by your Harleysville
11 agent?
12 A Yes.
13 Q Let me ask my question so the court
14 reporter can take it down.
15 Is this a document provided by your
16 Harleysville agent?
17 A Not, not by the Harleysville agent, by my
18 insurance ag ent.
19 Q Okay.
20 A Associated Agencies.
21 Q Not by Harleysville Insurance Company, but
22 by your Harleysville agent?
23 A Right, right.
24 Q And does it indicate fatal, Tim Foley?
25 A Right.
24
• •
1 Q And does it say here, type on reserve, and
2 then they ha ve something written under there that says
3 P-1?
4 A P-1.
5 Q Does it indicate the policy period for the
6 insurance po licy?
7 A Yes, it does.
8 Q Does it indicate you as the insured?
9 A Right.
10 Q Now, what about the next document?
11 A Yes, I recognize that.
12 Q What is that?
13 A It is my notice of cancellation. That was
14 a termination notice.
15 Q And that was sent to you from Harleysville?
16 A Yes.
17 Q And this was some time after Tim's
18 accident?
19 A Yes.
20 THE COURT: What? I have a document in the
21 Foley file with a tab on the outside called income. Does
22 that consist of more than one page?
23 MS. SHUMAN: Yes, it does, your Honor.
24 THE COURT: Are you now asking her to
25 identify the second page?
25
• •
1 MS. SHUMAN. No, your Honor. Under the tab
2 called documents from plaintiff's file. We are not as far
3 as income.
4 THE COURT: Oh. Excuse me, ma'am.
5 MS. SHUMAN: We are several sheets -- we
6 have looked at the accord form; we have looked at the
7 Harleysville declaration sheet; we have looked at a
8 reserve sheet from Harleysville. And now we are looking
9 at a notice of termination.
10 THE COURT: Oh, I see.
11 MR. KERR: If I just might interject, I am
12 a little lost because I don't have any tabs on my folder.
13 I have the notice of termination, but I
14 don't have any income or some other whatever document the
15 reference was to.
16 THE COURT: Ma'am.
17 MS. SHUMAN: Well, the Judge had apparently
18 gotten a little bit ahead of where we were in the file.
19 There are several other documents, and then we come to a
20 letter that Mrs. Foley wrote to me and some letters that
21 were forwarded to you in discovery concerning Tim's
22 income.
23 MR. KERR: I will wait until we get to
24 those.
25 BY MS. SHUMAN:
26
•
1 Q And after the notice of termination, can
2 you identify the exhibits that follow that?
3 A Yes. They are checks that I sent to
4 Harleysville.
5 Q And you provided these to establish that
6 you had Harleys ville Insurance at the time?
7 A Yes.
8 Q And there are three pages of those, is that
9 correct?
10 A Yes.
11 Q What about the next page?
12 A It is my son's death certificate and also
13 the piece that was in the paper, the notice, the doctor.
14 Q What does it indicate as Tim's --
15 A It says subJect as driver struck another
16 automobile.
17 Q What is the next document, Mrs. Foley?
18 A This is the Copy of the other driver's
19 payment for the loss of his vehicle, the claim against --
20 it went to this State Farm Mutual.
21 Q Is this a check drawn on Harleysville?
22 A Yes, it is.
23 Q And it is made payable to State Farm Mutual
24 Automobile Insu rance Company?
25 A Yes.
27
• •
1 Q As subrogee of James Mover?
2 A Yes.
3 Q Who was James Mover?
4 A James Mover was the driver of the other
5 vehicle.
6 Q Under -- over to the right hand side, does
7 it indica te what the payment is made for?
8 A Yes, property damage claim against Winifred
9 Foley and Ti m Foley, deceased.
10 Q And what is the date on that check?
11 A 6/30/1980.
12 Q Did Harleysville ever inform you that you
13 might be ent itled to No-Fault benefits arising out of
14 Tim's acc ide nt?
15 A No.
16 Q Did your agent ever notify you of that
17 fact?
18 A No.
19 Q When was the first time that you learned
20 you might be entitled to some No-Fault benefits?
21 A I don't know the exact date.
22 Q Was it a long time after your son's
23 accident?
24 A Yes, quite a long time. Years to be exact.
25 Q I believe You indicated earlier that Tim
28
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1 was 18 at the time of the accident?
2 A Yes, he was.
3 Q Had he earned income from work prior to his
4 accident?
5 A Yes, he worked every summer and he worked
6 after schools.
7 Q And when had he finished school?
8 A He had finished school that Year. He
9 graduated in ' 79.
10 Q So he graduated in June of 1979?
11 A Yes.
12 Q And his accident was in August of 1979?
13 A Yes.
14 Q Was Tim in good health prior to the
15 accident?
16 A Yes, he was.
17 MS. SHUMAN: I have no further questions.
18 MR. KERR: May I proceed, your Honor?
19 THE COURT: Yes.
20
21 CROSS-EXAMINATION
22 BY MR. KERR:
23 Q Mrs. Foley, as you know, my name is
24 Alexander Kerr and I represent Harleysville Insurance
25 Company in these proceedings.
29
• •
1 I believe you testified that You knew
2 somehow that somebody had notified Harleysville about your
3 son's death. I would like to explore that a little bit
4 with you.
5 Who told you that somebody had notified
6 Harleysville?
7 A It was the driver of the other car.
8 Q Did you -- you didn't personally notify
9 Harleysville, did you?
10 A No, I did not.
11 Q Have You ever seen an application for
12 No-Fault bene fits?
13 A No.
14 Q Did You personally ever submit an
15 application f or No-Fault benefits --
16 A No, I did not.
17 Q -- to Harleysville?
18 A No.
19 Q Did you ever ask your agent for one?
20 A No.
21 Q And Just to make sure that I understand,
22 you never -- you personally or, to Your knowledge, no one
23 in Your famil y wrote a letter to Harleysville or informed
24 them in some other way --
25 A No.
30
1 Q -- of Tim's death?
2 A No.
3 Q Now, you say that after Tim graduated he
4 worked in the summer?
5 A He worked that summer. He was planning
6 on -- all my s ons had gone to college.
7 Q What sort of work did he do?
8 A That -- the different summers do you want
9 to know or tha t particular summer?
10 Q Let's start with 1979 summer.
11 A That summer he did odd Jobs that summer and
12 he worked for Tom Huillier as caretaker for Noel Poux
13 Estates.
14 Q Do you recall how many months in the summer
15 he worked prio r to his accident?
16 A He started right after school was out and
17 was still empl oyed there when he was killed.
18 Q Do you recall how many hours a day he would
19 work?
20 A I don't recall, but it seems like I am
21 almost cer tain it was an eight hour day.
22 Q Do you recall how much he was paid per
23 hour?
24 A Not for that particular Job, no.
25 Q Had he worked the previous summer?
31
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1 A Yes.
2 Q And what did he do in 1978, if you recall?
3 A He and another boy cleaned machinery for
4 the old Titu sville Forge that has been later purchased by
5 the Earnst C ompany. And they cleaned the machines and
6 they made $$ 85.00 a week.
7 Q Do you recall how many weeks they worked
8 during the s ummer of 1978?
9 A It was -- that was about -- in that
10 particular J ob, he worked three or four weeks. And then
11 he also did grass mowing and odd Jobs for other people.
12 Q Do you know if he ever filed income tax
13 returns?
14 A Not to my knowledge, he never did.
15 Q You have looked for those and you never
16 found them?
17 A Yes, I did.
18 Q And did he work prior to 1978?
19 A Yes. He worked I think in '77, he worked
20 that summer. It was Just mowing grass and odd Jabs.
21 Q So that would not be an eight hour workday
22 then?
23 A No.
24 Q Would your best estimate that he forked one
25 or two days a week?
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A Usually Saturday and after school. After
school.
Q Was that the first time he worked, 1977?
A He had a paper route when he was -- I think
when he was 14, 15.
MR. KERB; I have no further questions,
your Honor.
REDIRECT EXAMINATION
BY MS. SHUMAN:
Q Mrs. Foley, Mr. Kerr asked you if you ever
filled out qn application for benefits. Do you recall
Harleysville ever sending you an application to fill out?
A No, they never sent one.
MS. SHUMAN: Thank You. No further
questions.
THE COURT: Do you have another witness
then ready?
MS. SHUMAN:
THE COURT:
take a very short recess.
(Whereupon,
MS. SHUMAN:
to the witness stand.
THE COURT:
Yes, your Honor.
All right. We are going to
a recess was taken.)
I would like to call Mr. Long
This is obviously not Patricia
33
•
•
1 Long. Is there another Long?
2 MS. SHUMAN: Patricia Long is the decedent.
3 Mr. Lo ng is he r son.
4 THE COURT: Pardon me.
5
6 Whereupon,
7 CLIFFORD A. LONG
8 havi ng been duly sworn, testified as follows:
9 DIRECT EXAMINATION
10 BY MS. SHUMAN:
11 Q Would you state your name, please?
12 A Clifford A. Long.
13 THE COURT: Clifford?
14 THE WITNESS: Right.
15 BY MS. SHUMAN:
16 Q What is your address, Mr. Long?
17 A R. D. 1, Latrobe, Pennsylvania.
18 Q Did you lose a relative as a result of a
19 motor vehicle accident?
20 A Yes.
21 Q Who was that?
22 A My mother, Patricia Long.
23 Q When was your mother's accident?
24 A September 16, 1978.
25 THE COURT: Louder, please.
34
a •
1 THE WITNESS: September 16, 1978.
2 BY MS. SHUMAN:
3 Q Now, at the time of the accident, did your
4 mother have au tomobile insurance?
5 A Yes.
6 Q And with what company, sir?
7 A Harleysville.
8 Q Was Harleysville notified of the accident?
9 A Yes.
10 Q And do you know how it was notified?
11 A The one agent, that was our insurance
12 agent, her nam e was Ann.
13 Q And it is your understanding that she
14 notified Harle ysville, is that correct?
15 A She told me. Because I had -- I had --
16 MR. KERR: Objection as to hearsay, your
17 Honor.
18 THE COURT: Ma'am? You have an objection.
19 MS, SHUMAN: I can put a document before
ZO Mr. Long which is a copy of a Harleysville document that
21 indicates that notice was provided by Ann of the agency to
22 Harleysville, if Mr. Kerr is challenging that information.
23 THE COURT: Go ahead.
24 BY MS. SHUMAN:
25 Q Mr. Long, I am showing you a document that
35
•
1 is part of the Patricia Long trial file which is labeled
2 as Plaintiffs' Exhibit 19. Is this document headed acord?
3 A Yes.
4 Q And as far as producer, what does it say
5 there?
6 A Queer Agency.
7 Q And is the Donald Queer Agency the agency
8 with whom your mother dealt for insurance?
g A Right.
10 Q And at the bottom -- at the bottom of the
11 acord, does it have a date?
12 A 9/18/78.
13 Q How long is that after your mother's
14 accident?
15 A That was on a Monday. The accident was on
16 a Saturday.
17 Q So two days after the accident?
18 A Right.
19 Q It says reported by, and what name is
20 written there?
21 A Ann.
22 Q And as far as the named insured, who does
23 it have listed there?
24 A Patricia M. Long.
25 Q Under insured, what does it say next to
36
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1 Your mother's name?
2 A Fatal.
3 Q Does it have her age there as well?
4 A 47.
5 Q Did Harleysville subsequently send You an
6 application for benefits to fill out?
7 A Yes.
g Q And did You fill that out?
g A Yes.
10 Q And did You return it to Harleysville?
11 A Yes.
12 Q Did Harleysville pay a funeral benefit
13 arising out of your mother's fatal accident?
14 A Yes.
15 Q And do you know the amount?
16 A $1500.00.
17 Q And did Harleysville also pay, in addition
18 to that, $12,500.00 partially for uninsured motorist and
1g partially for survivors benefit?
20 A Yes.
Z1 MR. KERB: ObJection, Your Honor.
22 Certainly with background, I don't object to leading. But
23 when we are getting to an important point of the case as
24 to what payments were for and that sort of thing, I do
25 object to leading questions.
37
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1 THE COURT: I guess the way to resolve it,
2 ma'am, would be to ask him if he got a check for 12,500
3 and identify it some way.
4 MS. SHUMAN: I don't know if HarleYSVille's
5 file has a copy of the check, your Honor. That is part of
6 the problem.
7 BY MS. SHUMAN;
g Q I am showing You the third page of the Long
9 trial file. This is a document dated October 1, 1979. Is
10 that correct, Mr. Long?
11 A Yes.
12 Q I am sorry, fourth page, Your Honor.
13 And under the caption it says suffix to
14 Patricia Long, PIP, is that correct?
15 A Yes.
16 Q And then it says, "We allotted $5000.00 in
17 survivors bene fits and $1500.00 for funeral expenses, for
18 a total draft of $6500.00." Does it say that?
19 A Yes.
20 Q And it says suffix 5, Patricia Long, UI?
21 A Correct.
22 Q And then it states, "We allotted $7500.00
23 for the UI which closes both suffixes." Did I read that
24 accurately?
25 A Yes.
38
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1 Q Okay. And is it Your understanding that
2 You did recei ve a total of $14,000.00 from Harleysville?
3 A Yes.
4 Q At the time of Your mother's accident, was
5 Your dad livi ng?
6 A No.
7 Q So your mother was a widow?
g A Yes.
g Q Did she have any minor children?
10 A One.
11 Q And who was that?
12 A My brother, Paul Long.
13 Q And how old was Paul at the time of Your
14 mother's accident?
15 A He Just turned 16.
16 Q Did Harleysville pay any work loss benefits
17 arising out of Your mother's accident?
18 A No.
19 Q Did Harleysville tell you that your mother
20 might have a claim for work loss benefits?
21 A No.
22 Q I am showing you the fifth page in the Long
23 trial file. This is a memo dated November 13, 1980, is
24 that correct?
25 A Yes.
39
1 Q And the memo is headed suffix 2 Patricia M.
2 Long - PIP, is that correct?
3 A Yes.
4 Q And the memo says, "Apparently we settled
5 the no-fault portion of this claim with an attorney and he
6 made no demand for wage loss. Inasmuch as the last
7 survivor's benefit was paid on September 26, 1979, the
8 time limitation for filing suit does not expire until
9 September 26, 1981. We should play this one by ear and
10 await any further activity on the part of the attorney for
11 a claim for wage loss." Did I read that accurately. Mr.
12 Long?
13 A Yes.
14 Q Did you ever have any contact after the
15 date of this memo in 1980 with Harleysville about work
16 loss?
17 A Not that I know of, no.
18 Q I believe you indicated that your mother
19 was 47 at the time of the accident?
20 A Yes.
21 Q What kind of health was she in at that
22 time?
23 A Good health.
24 Q Had she been employed before her accident?
25 A Yes.
40
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1 Q Had she had any educational background that
2 would allow her to be employed?
3 A She Just finished a secretarial school.
4 She Just finished a secretarial school with VCI in
5 Greensburg in MaY or June of that same Year.
6 Q And had she been employed during that Year
7 at all?
g A She took a part-time Job through the Tempo
9 Employment Agency to get whatever Jobs she could get until
10 something permanent came along.
11 Q When did You first learn that Your mother
12 might have a claim for work loss benefits, Mr. Long?
13 A Your office called.
14 MS. SHUMAN: I have no further questions.
15
16 CROSS-EXAMINATION
17 BY MR. KERR:
18 Q Mr. Long, mY name is Alexander Kerr and I
19 represent Harleysville in this proceeding.
20 You say prior to her accident Your mother
21 was employed. That was a part-time employment, is that
22 correct?
Z3 A She worked for the agency which sent her
24 out on different Jobs.
25 Q Isn't it true that her approximate income
41
•
1 around the time of her death was about forty dollars a
2 month?
3 A Assuming she only worked maybe three or
4 four months after getting out of school. You would have
5 to take a Job basically whenever it was available. Which
6 is what she did. You Just don't get a Job. It is usually
7 difficult to go through school and go into a Job.
g Q And isn't it true that she only earned
9 approximately forty dollars a month for those three
10 months?
11 A Yes.
12 Q Was your mother's estate represented by
13 counsel?
14 A Yes.
15 MR. KERR: Your Honor, May I approach the
16 witness?
17 THE COURT: Yes.
18 BY MR. KERB:
19 Q I would like to place in front of you, sir,
20 a document which has previously been marked for purposes
21 of identification as Defendant's Exhibit Number 265.
22 I have a copy for for Your Honor as well.
23 This document has several pages. I am
24 going to specifically direct your attention to the second
25 page of the document which has a number at the bottom,
42
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1 22011. Do You have that in front of you, sir?
2 A Yes.
3 Q And that is an authorization, is it not?
4 A Yes.
5 Q Does Your signature appear anywhere on that
6 page?
7 A Yes.
g Q Where is that, sir?
g A The second signature on the right.
10 Q Over the typewritten Clifford A. Long?
11 A Right.
12 Q And what was your understanding of what
13 this authorization was?
14 A That everything has been paid by Your
15 insurance company, Harleysville. That whatever was due
16 coming, we received.
17 Q And was Mr. Driscoll Your counsel -- when I
18 say your counsel, counsel for Your mother's estate?
19 A Yes.
20 Q I would like to ask You to turn over to the
21 next page, which is an order from the Court of Common
22 Pleas of Westmoreland County -- this page bears the date
23 stamp number at the bottom 22012 -- and ask you whether
24 You have ever seen that order before, sir?
25 A Probably have. I don't remember.
43
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THE COURT:
Use that mike, please?
THE WITNESS:
What? I can't hear you sir.
I probably did. I can`t
remember.
BY MR. KERR:
Q And turning over to the last page of this
exhibit, 22014, that is a release, is it not?
A Yes.
Q And that release bears your signature, is
that true?
A Yes.
Q And it is dated September 20, 1979?
A Yes.
Q And did you understand that document to be
a release of Harleysville Insurance Company?
A Yes.
MR. KERR: I have no further questions.
REDIRECT EXAMINATION
BY MS. SHUMAN:
Q Mr. Long, Mr. Kerr showed you a document
that is stamped 22012 and he asked You some questions
about it. That document is headed Order, is that correct?
A Yes.
Q And it says "And now, to wit" -- and I
44
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1 can't read the dates --
2 THE COURT: Is that necessary, ma'am?
3 MS. SHUMAN: Well, Your Honor, I think it
4 is because it says settled --
5 THE COURT: Is it necessary to read it?
6 MS. SHUMAN: Does it indicate here that it
7 is to settle claims for Un insured Motorists --
g MR. KERR: I obJect. I think the order
9 speaks for itself. And I obJect to this witness
10 testifying as to what an o rder says.
11 THE COURT: It does, ma'am.
12 MS. SHUMAN: Your Honor, I think the
13 indication here is that somehow --
14 THE COURT: Ma'am, the witness is not going
15 to read th is document. You can argue what it means to me
16 until You are blue in the face, both of you. We will do
17 that off t he record.
18 MS. SHUMAN: Yes, Your Honor. No further
19 questions. I would like to call Mr. Jenkins to the
20 witness stand.
21 Whereupon,
22 DONALD JENKINS
23 having been duly sworn, testified as follows:
24 DIRECT EXAMINATION
25 BY MS. SHUMAN:
45
• •
1 Q Would you state Your name, please?
2 A Donald Jenkins.
3 Q And what is your address, Mr. Jenkins?
4 A Box 14, MarkleYsburg, Pennsylvania.
5 Q Did you lose a relative as a result of a
6 motor vehicle accident?
7 A Yes, mY wife.
g Q And what was Your wife's name?
g A Alice Jenkins.
10 Q When was Mrs. Jenkins' accident?
11 A On March 12, 1980.
12 Q At the time of the accident, did You or
13 Mrs. Jenkins have automobile insurance?
14 A Yes, ma'am, through Harleysville.
15 Q Was Harleysville notified of the accident?
16 A Yes, ma'am.
17 Q And do you know how, Mr. Jenkins?
18 A Through Ron Myers, mY insurance agency.
19 Q Who notified Your insurance agency?
20 A I did.
21 Q And do You know approximately when you
22 notified the agency of Your wife's accident?
23 A It was a few days after the accident.
24 Q Did Harleysville send you an application
25 for benefits to complete?
46
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1 A Yes, ma'am.
2 Q And did you complete that and return it?
3 A Yes, ma'am.
4 Q Had Your wife been employed prior to the
5 time of her accident?
6 A Yes, she was employed through Faymore
7 Manufacturing.
g THE COURT: Spell it, sir.
g THE WITNESS: F-a-y-m-o-r-e, I think.
10 BY MS. SHUMAN:
11 Q And how old was Mrs. Jenkins?
12 A 41.
13 Q Was she in good health?
14 A Yes, ma'am.
15 Q Did Harleysville pay survivor loss benefits
16 of $5,000.00?
17 A Yes, ma'am.
18 MR. KERR: I am going to ob~ect, your
19 Honor, I think he can talk about amounts, but I think a
20 foundation needs to be laid as to this witness'
21 understanding of what payments were for.
22 THE COURT: That is true. He got
23 $5,000.00. Is that right?
24 THE WITNESS: Yes.
25 BY MS. SHUMAN:
47
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1 Q How is that money paid, Mr. Jenkins?
2 A It was paid in a couple years in payments.
3 Q You got so much per month, is that right?
4 A Right.
5 Q Did Harleysville pay work loss benefits?
6 A Some, but I don't remember how much.
7 THE COURT: I can't understand you, sir.
g THE WITNESS: They paid some, but I am not
9 sure of how much it was.
10 THE COURT: Use that mike.
11 THE WITNESS: Okay.
12 BY MS. SHUMAN:
13 Q I am showing You a document from the
14 Jenkins trial file. It is a letter dated July 20, 1982,
15 or a memo dated July 20, 1982.
16 THE COURT: Page?
17 MS. SHUMAN: Tenth page.
1g MR. KERR: If I am on the right document, I
19 am going to object to any questions to this witness about
20 this letter because it doesn't appear -- if we are talking
21 about something that says Donald J. Jenkins at the top and
22 David L. Kennedy, Unit Manager, at the bottom, dated July
23 20, 1982, it doesn't appear that this witness ever has
24 seen this document or wrote it or it was sent to him or
25 anything.
48
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1 MS. SHUMAN. I can ask my questions of Mr.
2 Hagin. He will be the witness after the class members.
3 So I can ask my question o f Mr. Hagin.
4 THE COURT: You have -- are You still on a
5 document in this file date d July 20, 1982?
6 MS. SHUMAN: Yes, your Honor.
7 THE COURT: It is a short note, three lines
8 in one paragrpah, is that what you are on, ma'am?
g MS. SHUMAN: Yes.
10 THE COURT: Okay.
11 MR. KERR; Your Honor, can I --
12 THE COURT: Well, let's have a question and
13 then see what this is all about.
14 MR. KERR: Fine, your Honor.
15 BY MS. SHUMAN;
16 Q There is a stamp on the bottom of that that
17 indicates it is 05735.
18 THE COURT: That is what we will use for
19 reference numbers in these things.
20 MS. SHUMAN : Yes, that should make things a
21 little easier.
22 BY MS. SHUMAN:
23 Q Does this memo indicate that, "According to
24 the calculations, we have paid $13,826.78 which leaves a
25 balance of $1,173.22 to b e paid."
49
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1 MR. KERR: I obJect, Your Honor, on the
2 same basis that I obJected to before. The document speaks
3 for itself. It is from a Mr. Kennedy to a Mr. Mulvihill.
4 It does not appear, and I don't think any foundation has
5 been laid, that this witness ever saw the document, that
6 it was sent to him or that he is familiar with its
7 contents.
g THE COURT: Isn't that true, ma'am?
g MS. SHUMAN: Yes, sir.
10 THE COURT: Well, I don't know why you are
11 doing this then. You know it is not proper to do this
12 through the witness. And I don't want witnesses reading
13 any more documents, unless there is some overriding reason
14 to do that.
15 BY MS. SHUMAN:
16 q Do you remember approximately when You
17 received your last payment from Harleysville?
18 A No, ma'am, I don't.
lg q How long had your wife been working prior
20 to the accident?
21 A Oh, I couldn't say for sure. She worked
22 for FaYmore Manufacturing and Michael Berkowitz before
23 that probably seven or eight Years. I wouldn't say for
24 sure.
25 MS. SHUMAN: I have no further questions.
50
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1
2 CROSS-EXAMINATION
3 BY MR. KERR:
4 Q Mr. Jenkins, isn't it true that You
5 received in total $15,000.00 from Harleysville Insurance
6 Company?
7 A I am not sure what the total figures was.
g Q And you don't know what the payments were
9 for, do you?
10 A One was survivors benefits and the other
11 one was suppo sed to be work loss.
12 Q But You don't know how much you received in
13 work loss?
14 A No.
15 MR. KERR: I have no further questions.
16 MS. SHUMAN: Thank You, Mr. Jenkins.
17 Next, we would call Mr. Smith.
lg Whereupon,
lg STEVEN A. SMITH
20 having been duly sworn, testified as follows:
21
22 DIRECT EXAMINATION
23 BY MS. SHUMAN:
24 Q Would You state your name, please?
25 A Steven A. Smith.
51
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1 Q And what is Your address, Mr. Smith?
2 A R. D. 1, Box 81, Annville.
3 Q In what town?
4 A Annville.
5 Q Keep Your voice up.
6 Did you lose a relative as a result of a
7 motor vehicle accident?
g A Yes, my wife.
g Q And what was your wife's name?
10 A Betty Smith.
11 Q And when was Mrs. Smith's accident?
12 A March, '80, 11th.
13 Q March 11 of 1980, is that right?
14 A Yes.
15 Q Did You or your wife have automobile
16 insurance at the time of the accident?
17 A Yes, we did, with Harleysville.
18 Q Was Harleysville notified of the loss of
19 your wife's accident?
20 A Yes.
21 Q Did Harleysville send You an application
22 for benefits to fill out?
23 A Yes, ma'am.
24 Q Did you fill that out?
25 A Yes.
52
1 Q And did you return it to Harleysville?
2 A Yes.
3 Q I am going to show you a document that is
4 numbered 088 93. It is the second document in the Smith
5 trial file.
6 It is headed application -- it is headed
7 application for benefits. Is this your signature at the
8 bottom, Mr. Smith?
g A Yes.
10 Q And is it -- what is the date that is
11 written on it?
12 A 18 March, '80.
13 Q Did you indicate on this application
14 whether your wife was employed at the time of her
15 accident?
16 A Yes.
17 Q And what did you -- what is written there?
18 A Veterans Administration, VA Hospital.
19 Q Is that where your wife was employed at the
20 time of her accident?
21 A Yes.
22 Q Did Harleysville pay fun eral benefits
23 arising out of your wife's death?
24 A Yes, ma'am.
25 Q Did they pay survivor loss benefits?
53
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A Yes.
Q Did they pay work loss benefits?
A Yes.
Q Do you know the amount?
A No, ma'am.
Q How were these payments made, Mr. Smith?
A Semi-weekly.
Q So every -- is that every two weeks you got
a check?
A Every two weeks.
Q And do You remember about how long those
checks continued every two weeks?
A No.
Q Did Harleysville ever tell you that you
might be entitled to additional work loss benefits?
A No, ma'am.
Q Did they ever tell you that you might be
entitled to interest?
A No.
Q What kind of health was your wife in prior
to her accident?
A Good health.
Q And how old was she?
A 26.
Q Did you and she have any children?
54
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A A son.
Q And how old was he at the time of the
accident?
A Two.
MS. SHUMAN:
Thank you, Mr. Smith.
MR. KERB:
I have no further Questions.
May I approach the witness, your
Honor?
THE COURT: Yes.
CROSS-EXAMINATION
BY MR. KERR:
Q Mr. Smith, I am placing in front of you a
document which was previously marked for purposes of
identification in these proceedings as Defendant Exhibit
Number 459.
I have a copy here for the court.
Can You identify --
THE COURT: Does that indicate that you are
going to be -- that you are going to be giving to me at
least 459 exhibits, sir?
MR. KERR: I hope it is not that many. But
we are -- I believe I will confess to you that the number
goes higher than that.
THE COURT: All right.
55
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11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
MR. KERR: We have them all --
THE COURT: Go ahead.
BY MR. KERR:
Q Do you recall ever seeing that document
before, sir?
A Yes. -
Q Do you recall receiving that on or about
August 11, 1981?
A Yes.
Q And did that document accurately set forth,
as you understood it, the payments that were being sent to
you by Harleysville and the reason for those payments?
MS. SHUMAN: I am going to obJect to that
question. I don't know how this witness can testify that
this letter accurately reflected what this man was
entitled to.
MR. KERR: That wasn't my question.
THE COURT: Sir, you are doing the same
thing that --
MR. KERR: I will withdraw the question,
your Honor.
THE COURT: All right.
BY MR. KERR:
Q Mr. Smith, I would like to show you a
second document which has previously been marked for
56
• •
1 purposes of identification as Defendant Exhibit Number
2 460. Do you recall receiving a copy of that document on
3 or about April 7, 1983?
4 A Yes, sir.
5 Q Does Defendant Exhibit Number 459 refresh
6 your recollection that you received $10,000.00 in wage
7 loss benefits from Harleysville?
8 A Yes.
9 MR. KERR: I have no further questions.
10 MS. SHUMAN: Thank you, Mr. Smith.
11 I would like to call Mr. Seiber to the
12 witness stand.
13 Whereupon,
14 JOHN SEIBER, Jr.
15 having been duly sworn, testified as follows:
16
17 DIRECT EXAMINATION
18 BY MS. SHUMAN:
19 Q What is your name, please?
20 A John Seiber, Jr.
21 Q What is your address, Mr. Seiber?
22 A R. D. 1, Liverpool, Pennsylvania.
23 Q I am going to move a little closer, your
24 Honor. Mr. Seiber can hear me better that way, all right?
25 Did you lose a relative as a result of a
57
• •
1 motor vehicle accident?
2 A Yes, I did.
3 Q And who was that?
4 A My son.
5 Q And what was your son's name?
6 A Douglas Nelson Seiber.
7 Q And when was Douglas' accident?
8 A April 8, 1982.
g Q At the time of the accident, did Douglas
10 have his own automobile insurance policy?
11 A No, he was covered under my insurance.
12 Q Did Douglas live in your house?
13 A Yes, he did.
14 Q And with whom did you have automobile
15 insurance?
16 A Harleysville.
17 Q Was Harleysville notified of Douglas'
18 accident?
19 A Yes, I notified them.
20 Q And do you remember how You took care of
21 that?
22 A I called them on the phone.
23 Q And did You call Harleysville Insurance
24 Company or d id you call your agent?
25 A I called Sausman Agency in Thompsontown.
58
• •
1 Q And is that the agency with which You
2 usually did business on Your policy?
3 A Yes.
4 Q Did Harleysville pay funeral benefits
5 arising out of Douglas' accident?
6 A Yes, they did.
7 Q Did they send You an application for
8 benefits to complete?
g A I believe they did.
10 Q All right. Looking at the Seiber trial
11 file, page 2, numbered 04966, this is a document headed
12 application for benefits. Is that correct?
13 A Right.
14 Q Is this Your signature at the bottom, Mr.
15 Seiber?
16 A Yes, it is.
17 Q What date is next to that?
18 A 7/22/82.
lg Q Did Harleysville pay $15,000.00 in work
20 loss benefits arising out of Douglas' accident?
21 A Yes, they did.
22 Q Do You know approximately when that payment
23 was made?
24 A It was November of '83.
25 Q So that would be over a Year and a half
59
• •
1 after the accident, is that correct?
2 A Right.
3 Q Do you remember what Harleysville told you
4 at that time a bout why they were making a payment of work
5 loss benefits?
6 A The adJuster Just said it was their policy
7 that they had to do this now.
8 Q Did their adJuster tell You that You might
9 be entitled to interest?
10 A No.
11 Q How old was Douglas at the time of his
12 accident?
13 A 19.
14 Q Was he employed at that time?
15 A No, he was a student.
16 Q How much more time did he -- was he going
17 to be in school?
18 A Two months.
19 Q And then he would have graduated, is that
20 correct?
21 A Right.
22 Q What kind of health was Douglas in prior to
23 the accident?
24 A Good health.
25 MS. SHUMAN; I have no further questions.
60
• •
1 Thank you, Mr. Seiber.
2
3 CROSS-EXAMINATION
4 BY MR. KERR:
5 Q Mr. Seiber, I am placing in front of you
6 the same document that Your counsel had in front of You
7 before. It has on the bottom the number 04966 which you
8 said you signed.
9 A Right.
10 Q About two inches above your signature there
11 is a portion of that document which has got a number 2 on
12 the left. A nd it says the question, Did you lose wages or
13 salary as a result of your inJurY? And there is a box
14 checked. Do you see that portion of it, the page?
15 A Yeah.
16 Q And did you app1Y the check there under the
17 box no?
18 A I didn't fill it out. I gust signed it.
19 Q Did You -- did you watch it being filled
20 out?
21 A I believe so. I don't recollect.
22 Q It is true that your son was not earning
23 any wages or salary at the time of his accident?
24 A Not at the time, no.
25 MR. KERR: No further questions, your
61
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2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
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22
23
24
25
•
Honor.
•
MS. SHUMAN: Thank you, Mr. Seiber.
Mr. Rickenbach.
Whereupon,
CHARLES S. RICKENBACH
having been duly sworn, testified as follows:
DIRECT EXAMINATION
BY MS. SHUMAN:
Q State Your name, please?
A Charles S. Rickenbach.
Q What is your address?
A 215 Washington Avenue, Ephrata.
Q Did you lose a relative as a result of a
motor vehicle accident?
A I did.
Q Who was that?
A My wife .
Q What was Your wife's name?
A Barbara.
Q When was Mrs. Rickenbach's accident?
A September 1, 1981.
Q Did You or your wife have automobile
insurance at the time of her accident?
A I did.
62
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1 Q With what company, sir?
2 A Harleysville.
3 Q Was Harleysville notified of the accident?
4 A I think so.
5 Q You personally did not notify them t-hough,
6 is that correct?
7 A I called them a couple days later, but I am
8 not sure tha t was considered or not.
g Q Did Harleysville send you an application
10 for benefits to complete?
11 A Yes, they did.
12 Q I am showing You the second document in the
13 Rickenbach t rial file, with a stamp of 06045. That
14 document is headed application for benefits, is that
15 correct, Mr. Rickenbach?
16 A Yes.
17 Q And at the bottom of the form, is that your
18 signature?
19 A That is.
20 Q And what is the date next to it?
21 A 11 September, '81.
22 Q With regard to the portion of the
23 application that asked about employers, is that portion
24 filled out?
25 A Yes.
63
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3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
•
•
Q Had your wife been employed at the time of
her accident?
A Yes, she was.
Q And where was she working at that time?
A The Living Word Academy. She was a
secretary there.
THE COURT:
THE WITNESS:
a Christian school.
MS. SHUMAN:
THE WITNESS:
THE COURT:
The what?
Living Word Academy. It was
The Living Word?
Living Word.
Oh, all right.
BY MS. SHUMAN:
Q Did Harleysville pay funeral benefits
arising out of your wife's accident?
A Yes.
Q Did it pay survivor loss benefits?
A Yes.
Q Did it pay $15,000.00 in work loss
benefits?
A Yes, ma'am.
Q And how were those payments made?
A Every two weeks after they started to pay
them.
Q Do you remember approximately how long you
64
• •
1 received checks from Harleysville?
2 A About three Years, I think. I am not sure.
3 Q How old was Your wife at the time of the
4 accident?
5 A 38.
6 Q Was she in good health?
7 A Yes.
8 MS. SHUMAN; I have no furth er questions.
9 Thank You, Mr. Rickenbach.
10
11 CROSS-EXAMINATION
12 BY MR. KERR;
13 Q Mr. Rickenbach, do You have that same page
14 in front of You?
15 A Not right now.
16 Q Now?
17 A Yes.
18 Q Under employer, it says The Worship Center,
19 is that correct?
20 A That is correct.
21 Q Is that the same as the employer that You
22 identified in Your testimony?
23 A Yes.
24 Q That is the -- the --
25 A This was the church that we go to, The
65
•
1 Worship Center, and they named it, the other, the school
2 The Living Word.
3 Q And is it true that Your wife was earning
4 approximately $170.00 a week there?
5 A At this time, I can't really say. I think
6 that is what it was.
7 Q Do you have any idea of when The Worship
8 Center notified Harleysville of how much it was that Your
9 wife earned per week?
10 A No, I have no idea.
11 MR. KERR: I have no additional questions
12 of this witness, Your Honor.
13 MS. SHUMAN: Thank You, Mr. Rickenbach.
14 Mrs. Kauffman.
15 Whereupon,
16 DEANNA KAUFFMAN
17 having been duly sworn, testified as follows:
18 DIRECT EXAMINATION
19 BY MS. SHUMAN:
20 Q Would You state Your name, please?
21 A Deanna Kauffman.
22 Q And what is Your address, Mrs. Kauffman?
23 A 2904 Derry Street, Harrisburg,
24 Pennsylvania.
25 Q Did You lose a relative as a result of a
66
•
1 motor vehicle accident?
2 A I did.
3 Q And who was that?
4 A My husband.
5 Q What was your husband's name?
6 A Eugene Ralph Woods.
7 Q And when was Mr. Woods' accident?
8 A The accident was on•the 2nd of August,
9 1979. He passed away on August 4, 1979.
10 Q At the time of the accident, did Mr. Woods
11 have automobil e insurance?
12 A Yes, he did.
13 Q With what company?
14 A Harleysville.
15 Q And was Harleysville notified of the
16 accident?
17 A To the best of my knowledge, my husband's
18 best friend wo rked for our agent in Sausman Agency in
19 Thompsontown, and I assumed that the word got to them
20 through him.
21 Q Did Harleysville pay $15,000.00 in work
22 loss benefits?
23 A Yes.
24 Q Do You know when those benefits were paid?
25 A I do not remember.
67
~ ~
1 Q Mrs. Kauffman, I am showing you a document
2 that is the sixth document in the Woods trial file. It is
3 numbered 01269 -- really the fifth -- the document begins
4 on the fifth page, 01268, and this document is headed
5 release, is that correct?
6 A Yes.
7 Q Take a minute to look at that and see if
8 this refreshes your recollection as to when Harleysville
9 paid work loss benefits. (Handed to witness.)
10 This is the 8th of April, 1982.
11 And the release recites payment of
12 $20,000.00. Was $5,000.00 of that for survivor Ioss
13 benefits?
14 A Yes.
15 Q Did Harleysville pay any interest on the
16 work loss bene fits?
17 A No.
18 Q And their payment was made approximately
19 two and a half Years after your husband's accident, is
20 that correct?
21 A Correct.
22 MS. SHUMAN: Thank you. I have no further
23 questions.
24
25
68
1 CROSS-EXAMINATION
2 BY MR. KERR:
3 Q Mrs. Kauffman, that is your signature that
4 appears on the release-which your counsel was showing to
5 you on page 1269, is that correct?
6 A Yes, sir.
7 Q And directing your attention to the first
8 paragraph on page 1269, the last sentence of that
9 paragraph, it is true, isn't it, that you had had the
10 opportunity to consult with independent counsel of Your
11 choosing prior to signing this release?
12 A Yes, sir.
13 Q I am going to show you a document which has
14 previously been marked for purposes of identification as
15 Defendant's Exhibit Number 574. Have you ever seen that
16 document before?
17 A Yes.
18 Q How did you come to see that document?
19 A In the office this morning, prior to coming
20 here.
21 Q Your counsel who had represented you at the
22 time of the release, he had not forwarded this to you
23 before?
24 A I do not remember it.
25 Q At the time of your husband's death, do You
69
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2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
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22
23
24
25
recall, was he employed?
A Yes, sir.
Q For whom was he employed again?
A Shaull Equipment in Lemoyne.
Q And at the time that he was killed, was he
on business for the company?
A He was on his way home from-work.
Q Do you know whether or not a Workmans
Compensation claim was ever made on behalf of your
deceased husband?
A I don't remember.
Q Do you recall whether you ever received any
benefits as a result of a Workmans Compensation claim?
A I believe I did, but I~don't remember right
now.
Q
much?
A
your Honor.
You don't remember from whom or for how
No.
MR. KERR: I have no further questions,
MS. SHUMAN: Thank you, Mrs. Kauffman.
Your Honor, that concludes the testimony of
the class members. I would ask on their behalf if they
could be excused at this time, if their presence at trial
is no longer necessary.
70
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1 MR. KERR: I have no obJection, your Honor.
2 THE COURT: Those folks that have Just
3 testified are welco me to be excused if they care to leave
4 at this time.
5 What is next , Ms. Shuman?
6 MS. SHUMAN: I would like to call Julian
7 Hagin to the witnes s stand.
g THE COURT: And who is this?
g MS. SHUMAN: This is an employee of
10 Harleysville.
11 THE COURT: Pardon me?
12 MS. SHUMAN: This is an employee of
13 Harleysville.
14 THE COURT: And how long will this witness
15 last?
16 MS. SHUMAN: I would anticipate his
17 testimony of about an hour, your Honor.
18 THE COURT: All right. Let's take a short
19 recess before we start.
20 (Whereupon, a recess was taken.)
21 MS. SHUMAN: Mr. Hagin.
22
23 Whereupon,
24 JULIAN S. HAGIN
25 having duly affirmed, testified as follows:
71
• •
1
2 DIRECT EXAMINATION
3 BY MS. SHUMAN:
4 Q State your name, please?
5 A Julian Hagin.
6 Q By whom are you employed, Mr. Hagin?
7 A Harleysville Insurance Company.
g Q And what is your current position with
9 Harleysville?
10 A Assistant secretary Claims, in charge of
11 No-fault and other areas.
12 Q And how long have you been in that
13 position?
14 A Since 1983.
15 Q When did you first become involved with the
16 No-Fault Act?
17 A I was -- in 1975 when the No-Fault Act
18 first came in , I was manager of our Philadelphia office.
19 Q And by manager of our Philadelphia office,
20 you mean of t he Harleysville Philadelphia office?
21 A Yes.
22 Q Now, you testified to Harleysville's
23 policies and practices with regard to payment of post
24 mortem work loss benefits?
25 A At what point?
72
•
1 Q Throughout the time that the No-Fault Act
2 was in effect.
3 A No, I don't believe I can.
4 Q You were in the courtroom during the
5 testimony of some representative claimants this morning,
6 is that correct?
7 A Yes.
g Q I am going to ask you some questions about
g those various claims and about Harleysville's handling of
10 No-fault claims.
11 Have you been the person at Harleysville
12 primarily responsible for identifying class members,
13 finding documents, et cetera, with regard to this class
14 action?
15 A Yes.
16 Q And did You fulfill that yob as well with
17 regard to the earlier Gregory vs Harleysville class
18 action?
19 A Yes.
20 Q Can You identify the first page of the
21 Foley trial file?
22 A Yes.
23 Q And what is that?
24 A It is a home office claim index.
25 THE COURT: Can we go back to --
73
• •
1 MS. SHUMAN: Sure, Your Honor.
2 BY MS. SHUMAN:
3 Q And this document has a serial number on
4 it. Can we assume based on that that it is a document
5 that was provided by Harleysville?
6 A I would say Yes.
7 Q Did Harleysville produce any other
8 documents in this case with regard to the Foley claim
9 other than this page, if You know?
10 A I don't know.
11 THE COURT; And this is numbered 030887
12 MS. SHUMAN: Yes, your Honor. I am sorry,
13 BY MS. SHUMAN:
14 Q Now, when is a -- when is a home office
15 claim index prepared?
16 A Upon receipt of a claim in the office,
17 notice of a claim.
18 Q And is this one of the first documents that
19 is made up when there has been notice of a claim?
20 A Yes.
21 Q And this document indicates the date of
22 loss as August 2, 1979, is that correct?
23 A August 20th.
24 Q I am sorry, August 20th. I am reading it
25 upside down. My error.
74
• •
1 And it was reported to the company on
2 August 24, 1979, is that correct?
3 A Yes.
4 Q Now, with regard to the Foley claim, did
5 you or anyone on your behalf contact the agent to see if
6 he had any documents with regard to this claim?
7 A When? You mean when it came in or --
g Q Well, let's take during the pendency of
9 this lawsuit.
10 A No.
11 Q Did you contact agents on other claims
12 subJect to this lawsuit?
13 A No.
14 Q Do you know whether Harleysville produced a
15 claim file on this claim?
16 A I think this is one where we had no file.
17 Q Was there a reason why you didn't go back
18 to the agent and find out what information he had?
19 A No, we didn't go back to the agent on any
20 files. We were interested in finding what we had.
21 Q Was there a reason why you did not go back
22 to the agents?
23 A No.
24 Q I am showing you the second document in the
25 Foley trial file that does not have a time -- a time stamp
75
• •
1 on it because it is not a document produced by
2 Harleysville. You were here when Mrs. Foley testified
3 that this is a document that was -- that her agent had in
4 his file, is that correct?
5 A Yes.
6 Q Now, this document is headed acord. What
7 is the significance of an acord?
g A It is usually the notice of an accident.
g Q And it is usually the first notice?
10 A Yes.
11 Q And does notice frequently come through the
12 local agent?
13 A Yes.
14 Q And upon receipt of an acord, would a home
15 office index, like the first exhibit, be prepared?
16 A Yes.
17 Q At the bottom of the acord it indicates our
18 insured driver was killed.
19 A Yes.
20 Q Do You have any knowledge beyond that on
21 this -- you say you -- the only document you have been
22 able to prod uce is the home office index, is that correct?
23 A I think so.
24 Q You didn't find a copy of this acord file?
25 A No.
76
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1 Q Let's look at the fourth page. It is
2 numbered -- it is not numbered because, again, it is a
3 document, as Mrs. Foley testified, she got from her agent.
4 It has a title of it on claim change notice, is that
5 correct?
6 A Yes.
7 Q What does that mean?
g A It means a change in the -- when the
9 initial claim comes in, that index is prepared. And there
10 is an indication somewhere in the file as to what we
11 anticipate in the way of future claims being made.
12 I don't know what the original said, but
13 this would indicate that a change is made from the initial
14 set up of the claim. And in this situation, it states
15 that suffix 2 is being closed without any payment.
16 Q You say suffix 2, is suffix 2 the one that
17 says fatal, Tim Foley?
18 A Yes.
19 Q What does DIC mean after his name?
20 A Driver of the insured vehicle. Driver of
21 the insured car.xxx
22 Q And is that to key you into the policy of
23 insurance that covers the accident?
24 A No, it is to key us into how this person
25 relates in the accident,
77
•
1 Q Then it says type of reserve -- and correct
2 me if it is w rong -- but it says P 1, is that correct?
3 A Yes.
4 Q What kind of a reserve is that?
5 A It is a No-fault --
6 Q What we would call a PIP --
7 A Yes.
g Q And that would be a reserve for funeral
9 benefits, is that correct?
10 A Yes.
11 Q That would be a reserve in the appropriate
12 case for survivor loss benefits, is that correct?
13 A Yes.
14 Q That would be a reserve for work loss
15 benefits, is that correct?
16 A Yes.
17 Q Now, over on the far right hand side of the
18 form it says CNP, is that correct?xxx
19 A Yes.
20 Q What does CNP mean?
21 A Closed, no payment.
22 Q So a reserve was set up with regard to Tim
23 Foley"s deat h benefits, is that Your understanding of this
24 form, and wi th this form it was closed?
25 A Yes.
78
•
1 Q Now, is it common for an insurance company
2 like Harleysville -- we will use Harleysville as our case
3 in point here -- to have its agent report an accident
4 because the agent has become aware of it?
5 MR. KERR: Object, your Honor. As I heard
6 the question, the question was something about is it
7 proper. I think Mr. --
g MS. SHUMAN: I didn't say proper. I
9 thought I said common.
10 MR. KERR: Well, common. I don't think Mr.
11 Hagin is here to testify about what other insurance
12 companies do. He has not been qualified as an expert.
13 MS. SHUMAN: I will be glad to rephrase my
14 question.
15 BY MS. SHUMAN:
16 Q Is it common for Harleysville agents to see
17 a newspaper article and file an acord indicating that an
18 accident has occurred?
19 A It is common for the agent to report it. I
20 don't know whether it is common that he reports from a
21 newspaper. I don't know where an agent gets his
22 information.
23 Q And when you get an acord form, what is
24 Harleysville's procedure with regard to it after a home
25 office index is set up?
79
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1 A Well, the first thing You try tp do is
2 determine the coverage, to see if the policy applies to
3 that particular accident.
,4 Q With regard to Tim Foley, is th~,ere any
5 issue as to the policy applying to him?
6 A I don't know. You can't tell by the index.
7 Q Can you tell from the other documents?
8 A Well --
g Q Our insured driver was killed?
10 A Well, yes, it says he was killed. But in
11 order for a person to be covered, there are several things
12 to be considered. Such as does he have his own policy,
13 was he under Workers Comp, various other reasons.
14 Q Well, you heard Mrs. FoleY's testimony
15 today with regard to --
16 A Yes.
17 Q -- the fact that Tim did not have his own
18 policy, is that correct?
19 A Yes.
Z0 Q And in light of that fact, is there any
21 dispute that Harleysville is the applicable insurer?
22 A Well, I can't tell because we don't have a
23 file.
24 Q Let's look at another document. The tenth
25 document in the Foley trial file. Can you identify that
80
1 document?
2 A Yes.
3 Q What is that?
4 A It is a copy of a claim draft.
5 Q And who issued the claim draft?
6 A Well --
7 Q I don't mean the person's name. What
8 company?
9 A Harleysville.
10 THE COURT: And does this draft have a
11 number?
12 MS. SHUMAN: No, it does not.
13 BY MS. SHUMAN:
14 Q Is this another document that was produced
15 by Mrs. Foley, as she testified, from her agent's file?
16 A Apparently. xxx
17 THE COURT: Well, I have a draft number on
18 the draft of 2 391839. Is that what you are looking at?
19 THE WITNESS: Yes, your Honor.
20 THE COURT: Counsel, what is your question?
21 BY MS. SHUMAN:
22 Q Now, this payment is for what benefit, sir?
23 A This payment is payable to State Farm.
24 Apparently to reimburse them for the damage they had paid
25 to their insur ed's vehicle. So it would be called
81
1 property damage claim.
2 Q Now, before Harleysville pays a property
3 damage claim, does it do an investigation?
4 A Usually, Yes.
5 Q And what would be the elements involved in
6 that investigation?
7 A Again, coverage, and then liability
8 investigation and then damage.
9 Q Who are listed as the people on whose
10 behalf that money is being paid?
11 A It is being paid on behalf of Winifred
12 Foley and Tim Foley, deceased.
13 Q Based on that draft, is there any doubt
14 that Harleysville was the applicable insurer here?
15 A Well, based on this draft, you can't
16 determine because under liability the policy covering the
17 vehicle involved is the policy that is usually primary for
18 payment of property damage. But under No-fault, under
19 PIP, that is not necessarily true. So the payment of a
20 property damage claim is not indicative of liability for a
21 PIP claim.
22 Q All right. On this check, is it indicative
23 of the fact that Harleysville knew that Tim Foley was
24 dead?
25 A Yes.
82
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1 Q Let's look at the Long file. You were
2 present in court this morning when Mr. Long testified with
3 regard to the fatal accident of his mother, Patricia Long,
4 is that correct, Mr. Hagin?
5 A Yes.
6 Q I am showing you a document from the Long
7 trial file that has a number 21988. It is the fifth
8 document in the file. And it is a memo apparently from
9 Mr. Kennedy. Who was Mr. Kennedy?
10 A Mr. Kennedy at that time was Unit Manager
11 in our home office responsible for PIP No-fault and
12 material damage.
13 Q The last sentence of that memo says "We
14 should play this one by ear and await any further activity
15 on the part of the attorney for claim for wage loss." Is
16 that correct?
17 A Yes.
18 Q And this memo is dated November 18, 1980.
19 A 13th.
20 Q I am sorry, November 13, 1980, is that
21 right?
22 A Yes.
23 Q Were work loss benefits paid to that
24 estate?
25 A I don't know.
83
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1 Q Do You have any document, like all the
2 files that are here today, that would allow you to
3 determine that fact?
4 A I don't know. Do we have this file?
5 MR. KERR. We certainly have -- we have
6 files on the Long file. We would be happy to place it in
7 front of You.
g MS. SHUMAN: Are You willing to stipulate
9 that work loss benefits were not paid on this claim?
10 MR. KERR: We are willing to stipulate that
11 no work loss benefits were paid on this claim.
12 MS. SHUMAN: All right.
13 BY MS. SHUMAN:
14 Q How would You interpret the sentence that
15 says "We should play this one by ear"?
16 A Apparently he is --
17 MR. KERR: I obJect. I don't know how this
18 witness can be interpreting -- I don't see the relevance
19 of what this witness is saying about what somebody else
20 wrote.
21 THE COURT: Well, he attempted to place
22 some interpretation on it, I will give him a chance to do
23 it, if he can.
24 THE WITNESS: To me it says that we should
25 wait for the attorney to file his claim.
84
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1 BY MS. SHUMAN:
2 Q Does the memo also indicate that the
3 statute of limitations has not expired on the claim?
4 A Yes.
5 Q You were here this morning when Mr. Long
6 testified that Mrs. long left a minor child, age 16.
7 Under the law as it was in 1980, in December of 1980,
8 would the Long estate have been entitled to work loss
9 benefits?
10 MR. KERR: ObJection.
11 THE COURT: I can't hear you, ma'am.
12 MS. SHUMAN: I am asking Mr. Hagin under
13 the law as it had been pronounced in 1980, December of
14 1980, was this estate entitled to work loss benefits.
15 MR. KERR: ObJection, your Honor. This
16 gentleman is not an attorney, and I don't see how he can
17 be asked to testify about what the law in 1980 required.
lg THE COURT: Ma'am?
lg MS. SHUMAN: I could rephrase my question
20 to ask him under Harleysville's policy, whether this
21 estate would be entitled to --
22 THE COURT: All right. Just rephrase it
23 rather than argue about it.
24 BY MS. SHUMAN:
25 Q Under Harleysville's policy in effect in
85
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1 December of 1980, was this estate entitled to recover work
2 loss benefits?
3 A I don't remember. I don't know.
4 Q I am going to ask you some questions about
5 the Jenkins file now. I am showing you a document from
6 the Jenkins trial file that is stamped 05739. It is the
7 eighth document in the Jenkins trial file.
g Is this an internal memorandum, sir?
g ~ A Internal meaning within the company?
10 Q Yes.
11 A Yes.
12 Q What is the date on that?
13 A June 1, '81.-
14 Q And does that memo indicate a change in
15 Harleysville's policy at that time?
16 A The memo seems to indicate that we are
17 allowed to take credit for survivors benefits paid against
18 the work lo ss benefits.
19 Q And what does that mean?
20 A That means we would pay a total of
21 $15,000.00, $5000.00 of which would be survivors and
22 $10,000.00 would be work loss,
23 Q And does that memo indicate on what basis
24 this change in policy is being made?
25 A Yes.
86
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1 THE COURT: This was a change in policy
2 then, is that it?
3 THE WITNESS: I don't know whether it was a
4 change in poli cy. According to the memo, it states that
5 the April 27th ruling allows us to do it. I would assume
6 from that that we were not allowed to do it before. I am
7 not sure what that would mean.
8 BY MS. SHUMAN:
9 Q Does this memo indicate that a set off is
10 going to be ta ken then of $5,000.00 against the $15,000.00
11 work loss, so that a total of $15,000.00 would be paid
12 rather than $2 0,000.00?
13 A Yes.
14 Q According to the payment sheet from
15 Harleysville's file, number 05785, which is about four or
16 five pages bey ond the other exhibit, is there an
17 indication of how much in No-Fault benefits was paid by
18 Harleysville?
19 A On that page it looks like $16,500.00.
20 Q Was that paid on that page or on all the
21 pages, sir?
22 A No, I Just say on that page it is a
23 total -- and I would assume -- yes, it looks like that,
24 that is all cu mulative total.
25 Q Let's look at the various codes on these
87
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1 payments.
2 THE COURT: What page?
3 MS. SHUMAN: We are looking at pages 05787,
4 05786 and 05785.
5 BY MS. SHUMAN:
6 Q Are these documents headed home office
7 schedule of payments?
8 A Yes.
9 Q On the first payment here is a $1500.00
10 payment. What is that benefit for?
11 A Funeral.
12 Q And then there is a column headed P 4.
13 What is P 4?
14 A I think P 4 was survivors.
15 Q And then down that page, there is a whole
16 series of payments, is that correct?
17 A Yes.
18 Q And as of 12/12/80, is there a change on
19 the sheet?
20 A Yes.
21 Q What is that?
22 A Increased reserve by $15,000.00.
23 Q And payments are then made after that point
24 as well, isn't that correct?
25 A Yes.
88
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1 Q How are all of those payments coded, with
2 subsequent p ages?
3 A Well, the next page doesn't appear to be
4 coded.
5 Q It doesn't say P 4 above the column of
6 payments?
7 A Oh, I am sorry. I am looking over here.
8 Yes, Yes, P 4,
9 Q And P 4 you said before was survivors
10 benefits?
11 A Yes,
12 Q And the next page, is that still headed
13 P 4?
14 A Yes.
15 Q Naw, what is the maximum available under
16 the standard No-fault policy for survivor loss?
17 A $5000,00,
18 Q Do miscodings occur in documents?
19 A Yes, indeed.
20 Q So the total payment is $16,500.00, is that
21 correct?
22 A Yes.
23 Q We said $1500.00 of it was funeral
24 benefits?
25 A Yes.
89
• •
1 Q There was survivor loss benefits paid so
2 we -- can we assume that $5,000.00 of it was survivor
3 loss?
4 A Yes.
5 Q Would that leave $10,000.00 in work loss
6 having been paid on the Jenkins estate?
7 A Yes.
8 Q Next to the total of $16,500.00, what is
9 stamped?
10 A Closed.
11 Q And what is the date of that?
12 A 10/6/82.
13 THE COURT: So the balance after --
14 $5000.00 and $1500.00 was paid for what, sir?
15 THE WITNESS: $5000.00 was paid apparently
16 for survivor s benefits and 1500.00 was paid for funeral
17 benefits.
18 BY MS. SHUMAN:
19 Q And then the $10,000.00 for work loss, is
20 that correct ?
21 A Yes.
22 Q Now, you referred earlier to a memo saying
23 about being able to subtract survivor loss from work loss?
24 A Yes.
25 Q Did there come a time when Harleysville
90
• •
1 abandoned that policy of subtracting one benefit from the
2 other?
3 A Yes.
4 Q Do You know approximately when that was?
S A No.
6 Q Did Harleysville go back and pay this
7 estate and other estates the remaining $5,000.00 that it
8 owed them?
9 A Apparently not.
10 Q Can you explain why?
11 A No.
12 Q Mr. Hagin, you were here when Mr. Smith
13 testified with regard to his wife, Betty, is that correct?
14 A Yes.
15 THE COURT: We are now on-the Smith file.
16 MS. SHUMAN: That is correct, Your Honor.
17 BY MS. SHUMAN:
18 Q Let's look at this acord for a moment. I
19 had asked You earlier if agents sometimes spontaneously,
20 so to speak, r eported accidents to Harleysville.
21 THE COURT: Is that page 1?
22 MS. SHUMAN: That is page 1.
23 BY MS. SHUMAN:
24 Q On the acord, does that appear to be what
25 happened here?
91
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4
5
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7
8
9
10
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12
13
14
15
16
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19
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21
22
23
24
25
A Well, somebody reported it. I don't know
whether it was the agents.
Q And the agent is listed as Raymond Shenk,
is that correct?
A Yes.
Q The person who reported it is listed as Mel
Shenk, is that correct?
A Yes.
Q And the date of the notice of the acord is
dated 3/13/80, is that correct?
A Yes.
Q Naw, the next document which is number
05893 is an application for benefits, is that correct?
A Yes.
Q On the top of the application for benefits,
the typing is done by whom?
A Usually the office -- our office would do
that before they mailed it out.
Q Would this suggest that the application was
mailed out on 3/17/80, which is the date up here in the
upper left hand corner?
A Yes.
Q So it was mailed out by Harleysville on
that date?
A Yes. Well, it was obviously prepared on
92
•
1 that date and we can assume it was mailed maybe that day
2 or the ne xt day.
3 Q Well, reasonably, at least by the 18th of
4 March?
5 A Yes.
6 Q Now, is there any indication on the acord
7 that Mr. Smit h reported this accident?
8 A No, I don't think so.
9 Q Was it Harleysville's policy when it was
10 notified of a claim to send out an application for
11 benefits?
12 A Yes.
13 Q Regardless of whom made the notice?
14 A Yes, if coverage was confirmed.
15 Q Now, on Mr. Smith's application that he
16 completed for his wife was an indication that she was
17 employed, is that correct?
18 A Yes.
19 Q And what is the date when Mr. Smith signed
20 that appl icat ion?
21 A March 18th.
22 Q Of 1980, is that correct?
23 A '80, yes.
24 Q And the accident date was March 11 of 1980,
25 right?
93
• •
1 A Yes.
2 Q Can you tell from this form when this
3 document was received by Harleysville?
4 A Looks like March 20, 1980,
5 Q Now, attached to the bottom of the
6 application for benefits, are there any documents that
7 Harleysville uses with regard to wage information?
8 A Some of the cases, yes.
9 Q And what are the documents that are
10 attached to the bottom of the application?
11 A They are authorizations, two of them, I
12 believe. On e is an authorization for medical information
13 and I believ e the other is for employment information.
14 Q So if Harleysville believes that a benefit
15 arising out of work is due, then it would send out that
16 verification , that authorization, is that correct?
17 A Yes.
18 Q Now, on the PIP application, is there any
19 place where a person specifies the benefit for which he is
20 making a cla im?
21 THE COURT: You are still looking at the
22 application?
23 MS. SHUMAN: That is correct, your Honor.
24 THE WITNESS: I don't think so, per se.
25 BY MS. SHUMA N:
94
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4
5
6
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8
9
10
11
12
13
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15
16
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18
19
20
21
22
23
24
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•
Q Well, No-Fault benefits are funeral, is
that correct?
A Medical, funeral, wage and survivors.
Q Now, is there any place on this application
where a person indicates the benefits for which he is
applying?
A I don't think so.
Q And who is it who determines the benefits
to which the person is entitled?
A The claim representative.
Q And that is an employee of Harleysville?
A Yes.
MS. SHUMAN: Mr. Kerr, will you stipulate
that estate was paid $10,000.00 in work loss benefits?
MR. KERB: Yes. Our records may indicate
$10,000.38.
MS. SHUMAN:
$10,000.00 in work loss.
MR. KERR:
Let's round it off to
That is fine.
BY MS. SHUMAN;
Q Why was the remaining $5,000.00 in work
loss not paid to this Smith estate?
A Probably it was considered a setoff.
Q And when the policy changed, and
Harleysville no longer took a setoff, it didn't go back
95
• •
1 and pay the additional money due?
2 A Right.
3 MR. KERB: ObJection.
4 THE COURT: What?
5 MR. KERR. I Just want to make sure I heard
6 the question, additional payment due.
7 MS. SHUMAN: He answered it. You can
8 obJect to it.
9 MR. KERR: I obJect to the question because
10 I don't think this witness can testify about what the
11 legal requirements were. I don't --
12 THE COURT: She simply meant was the
13 additional $5,000.00 paid.
14 MR. KERR: We certainly stipulate that
15 the -- Harleysville did not go back and pay the additional
16 $5,000.00.
17 THE COURT: All right. I would like both
18 counsel to not get into these battles of semantics. There
19 will be plenty of time to argue the whole law to me.
20 BY MS. SHUMAN:
21 Q I am going to ask you some questions on the
22 Seiber claim now, Mr. Hagin.
23 You were here when Mr. Seiber testified
24 this morning, is that correct?
25 A Yes.
96
1 Q Now, looking at the Seiber trial file, the
2 acord, which is stamped 04996, who provided notice of the
3 accident?
4 A Apparently it came from the agent.
5 Q And who informed the agent of the accident?
6 A John Seiber, Jr.
7 Q And is that the Harleysville named insured?
8 A Yes.
9 Q And what was the date of the notice to the
10 agent?
11 A 4/12/82.
12 Q When was this document received by
13 Harleysville?
14 A 4/13/82.
15 Q The second document in the trial file,
16 04966, is an application for benefits. When was this
17 document sent out by Harleysville, approximately when?
18 A 7/6/82. Excuse me. I question whether
19 that was sent by Harleysville because there is no
20 identificatio n of the company on the form or an addressee.
21 Q Who else would have provided an application
22 for benefits to Mr. Seiber if not Harleysville?
23 A I don't know. They get them from agents,
24 attorneys, an y people.
25 Q And this application has been completed, is
97
• ~
1 that correct?
2 A Yes.
3 Q And now, You were here when Mr. Seiber
4 testified that his son was unemployed at the time of the
5 accident, correct? He was a student, you recall, had two
6 more months of school. Were You here during that?
7 A Okay, I remember that.
g Q So where it said did You lose wages or
9 salary as a result of your inJury, what box did he check?
10 A No.
11 Q Now, we said that the application for
12 benefits was dated July of 1982, is that correct?
13 A Yes.
1y. Q When did Harleysville make its first
15 payment of No-fault benefits?
16 A June 4, '82.
17 Q So Harleysville paid what benefit at that
18 time?
19 A Funeral.
20 Q And it paid a funeral benefit without
21 having at least received this application for benefits, is
22 that correct?
23 A Yes.
24 Q Are there cases where Harleysville has paid
25 a funeral benefit upon receipt of a funeral bill and death
98
• •
1 an application you mean?
2 Q Yes, sir.
3 A There shouldn't be.
4 Q Have you reviewed the files in this case?
5 A Yes.
6 Q Have you found such files?
7 A I don't recall looking for that.
8 Q So you -- is your answer that you don't
9 know?
10 A Right, I don't know.
11 Q Now, according to document 04997, which is
12 the sixth document -- or fifth document in the file, was
13 this claim reopened?
14 A Yes.
15 Q What changes were made at that time?
16 A On July 12, '82, the file was reopened from
17 a closed condition and a reserve established in the amount
18 of $15,000.00.
19 Q Showing you a very poor Copy, numbered
20 04855 --
21 THE COURT: That is the next page?
22 MS. SHUMAN: The next or two pages, your
23 Honor.
24 THE COURT: Pardon me? You ,lust looked
25 at --
99
• •
1 MS. SHUMAN: I am sorry, it is the next
2 page, your Honor.
3 BY MS. SHUMAN:
4 Q Before I ask you specifics, can you
5 identi fy what the document is?
6 A Let me see if I can read it.
7 Could we ask our counsel to give me a
8 better copy?
9 Q Absolutely. I would certainly appreciate
10 it.
11 (Handed another copy to witness.)
12 Q Showing you the best there is, I suppose,
13 anothe r copy of that document, 04855?
14 A Okay.
15 Q Can you identify what that is?
16 A It is a microfiche print of claim record
17 for -- appare ntly for Seiber.
18 Q Does it indicate a payment on it?
19 A Yes.
20 Q And what was the date of the payment?
21 A There are two payments listed.
22 Q Okay.
23 A Let me see if I can get this -- yes, all
24 right, there are two payments listed. One is to Edward A.
25 Myers for --
100
• •
1 Q Excuse me, that is a bodily inJury claim,
2 is that correct?
3 A Yes.
4 Q That is not anything that has anything to
5 do with this action.
6 A Okay. There is another payment listed for
7 15,000.00 payable to John Seiber, Jr, and Mary Seiber,
8 administrators of the estate of Douglas Seiber, deceased,
9 for wage loss under PIP coverage. And that was paid
10 11/9/83.
11 Q And the amount of the payment was?
12 A 15,000.00.
13 Q Why did Harleysville not pay work loss
14 benefits on this claim until November of 1983?
15 A I don't know.
16 THE COURT: Ma'am, I am working out of the
17 files that you gave me. Are all these exhibits entered
18 separately and are you just giving me working copies?
19 MS. SHUMAN: I am sorry, sir, I don't
20 understand your question.
21 THE COURT; The files that I have in front
22 of me in regard to each case --
23 MS. SHUMAN; Yes, sir,
24 THE COURT: -- is that my working copy or
25 is that the original exhibit?
101
• •
1 MS. SHUMAN. There is a copy for you to
2 work with, your Honor, and there is a copy to put in as an
3 exhibit.
4 THE COURT: All right. You gust marked one
5 of these documents. My copy is illegible in the file. So
6 I will need two, one for the original exhibit and one for
7 my working file.
$ MR. KERB: Your Honor.
9 MS. SHUMAN: I don't know how much better
10 it is going to be, but we can try it again. That is the
11 problem with it. That is what it looks like.
12 THE COURT: All right. Ken, make two
13 copies of that.
14 MR. KERR: Your Honor, maybe I could ,lust
15 interpose one comment at this time.
16 Ms. Shuman asks Mr. Hagin, you know, if he
17 knows why Harleysville didn't pay a particular claim We
18 have about 130 claims here.
19 Mr. Hagin has spent considerable amount of
20 time reviewing these claims, but it is not obviously --
21 has not committed all of the files to memory.
22 We have prepared, as part of our case, some
23 charts and summaries of these-claims which are, we hope,
24 going to be exhibits in this case and will be of material
25 assistance to the court as we work through these claims.
102
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1 I don't want this to be a memory test for
2 Mr. Hagin and I don't -- I guess I would request if I
3 could place either this chart in front of him now or have
4 the opportunity to later on go back over some of these
5 files with him.
6 Ms. Shuman is obviously placing particular
7 documents in front of him, but it is hard to have -- keep
8 all of the different files in one's mind at one time.
9 THE COURT: I don't place any great
10 significance on the fact that he didn't remember why
11 something wasn't paid.
12 MR. KERR: That is fine. Thank You.
13 MS. SHUMAN: And, Your Honor, from mY
14 perspective, he is clearly free to use whatever documents
15 he cares to use to answer mY questions.
16 BY MS. SHUMAN:
17 Q Mr. Hagin, I am going to ask You about the
18 Rickenbach file. You were here when Mr. Rickenbach
19 testified. Is that correct?
20 A Yes.
21 Q Now, it was his testimony that the payments
22 of work loss benefits were made to him periodically. In
23 other words, month by month or every couple of weeks.
24 Was that consistent with Harleysville's
25 policy on payment of work loss benefits in death cases?
103
•
1 A It was for a time, yes.
2 Q Did that policy change?
3 A Yes.
4 Q Do you know when it changed?
5 A No.
6 Q And what did it change to?
7 A A lump sum.
8 Q Now, did Harleysville use a pattern of
9 payments with regard to both -- where both survivor loss
10 and work loss benefits were going to be paid?
11 MR. KERB: Your Honor, I don't understand
12 the question. By pattern, do you mean periodic?
13 MS. SHUMAN. I will rephrase my question.
14 BY MS. SHUMAN:
15 Q In the case where both survivor loss and
16 work loss are going to be paid, were both benefits paid at
17 the same time on all death cases?
18 A Not always.
19 Q What was the alternative payment schedule?
20 A Sometimes they were paid periodically every
21 two weeks. Th ey were put on a computer to be paid every
22 two weeks, and it would be for the full amount.
23 And sometimes the first payments were
24 charged to sur vivor, and when they were paid, then the
25 charge -- the rest were charged to work loss.
104
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1 Q So if I understand Your testimony, survivor
2 loss benefits would be paid periodically until $5,000.00
3 was paid and then work loss benefits would begin, is that
4 your testimony, on some files?
5 A Yes.
6 MR. KERR; Your Honor, at this pause, let
7 me hand up the two Seiber pages.
8 THE COURT: One is an original exhibit and
9 one is mY working copy.
10 MS. SHUMAN: If you will give one of the --
11 if you give the copies to me, I will put them in --
12 THE COURT: You don't have that file
13 anymore. I will put them in the appropriate files for
14 you. Oh, You do have those files.
15 Here is the original exhibit. (Handed to
16 Ms. Shuman.)
17 BY MS. SHUMAN:
18 Q Mr. Hagin, I am looking at the fourth
19 document in the Rickenbach file numbered 06067. Is that
20 ~ocU. _ ;~eaded schedule of payments?
21 A Yes.
22 Q You said on some claims survivor loss was
23 paid first periodically and then work loss was paid
24 periodically. Does that appear to be what was done on
25 this claim?
105
• •
1 A Yes.
2 Q Now, Mrs. Rickenbach's accident was?
3 A 9/1/81.
4 Q When was the first payment of work loss
5 benefits made?
6 A Looks like 7/7/82.
7 Q Showing you the document numbered 06070,
8 which is the third document behind what. we were looking at
9 before, can you identify what that is?
10 A Yes. It is an automatic draft payment,
11 Copy of one of the payments.
12 Q And does it indicate on there that it is
13 the last aut omatic payment?
14 A Yes.
15 Q And does it indicate on there the total of
16 $15,000. 00 h ad been paid?
17 A Yes.
18 Q And what is the date of the payment?
19 A 4/4/84.
20 Q Was any interest paid on this claim?
21 A No,
22 Q Mr. Hagin, I am going to ask you about the
23 Woods file. You were here when Mrs. Kauffman, who is the
24 widow of Mr. Woods, testified this morning.
25 A Yes.
106
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1 Q And Mr. Woods' accident was?
2 A 8/2/79.
3 Q And based on the release signed, it appears
4 that the work loss and survivor loss benefits were paid on
5 April 8 of 198. Is that correct?
6 A That is when the release was signed. Are
7 You asking when was it paid?
8 Q I am asking if in light of the release
9 having that date, if it was paid in approximately that
10 same time period?
11 A On or before, yes.
12 Q And that payment was approximately two and
13 a half years after the accident in August of '79, is that
14 right?
15 A When was that date? '82? I am sorry, yes.
16 Q Mr. Hagan, showing you what we have marked
17 as Plaintiffs' Exhibit Number 15, and it is headed
18 examples of claims -- and any documents that you have that
19 will assist you in evaluating the accuracy of the
20 information on this exhibit should be consulted.
21 MR. KERR; At this time, your Honor, I am
22 placing in front of the witness a copy of a document which
23 has previously been marked as Defendant Number 604 and as
24 well as Defendant's Findings of Fact.
25 And obviously, Mr. Hagan, if you can think
107
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1 of some other document that You would like to consult,
2 please, let me know.
3 MS. SHUMAN: MY only reason for saying this
4 is I don't want to quibble over things that are not
5 significant. I want to try to hone in on what may be some
6 issues here.
7 BY MS. SHUMAN:
8 Q With regard to the Ailes claim --
9 THE COURT: And this is a document prepared
10 by your office?
11 MS. SHUMAN; That is prepared by our
12 office, your Honor.
13 MR. KERR: May I add one thing?
14 THE COURT: And it is entitled Examples of
15 Claims, and on the first page it starts with Williams
16 Ailes.
17 MS. SHUMAN: That is correct.
18 MR. KERR: One thing I am confused about --
19 and perhaps there has been some misunderstanding -- I
20 thought Ms, Shuman's office had withdrawn their claim for
21 Ailes, except as to interest, is that correct?
22 MS. SHUMAN: That is the only claim that is
23 being pursued, sir. That is why it says interest paid,
24 zero.
25 MR. KERR: Fine.
108
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1 MS. SHUMAN: Work loss paid, $15,000.00, it
2 says.
3 BY MS. SHUMAN:
4 Q What I am going to ask you about, Mr.
5 Hagin, is really some memos that are from Harleysville's
6 files. The summaries on the first page are summaries that
7 we made up as far as the facts of the claim, who the
8 person was, how old he was, those kind of things, and what
9 the disposition of it was.
10 My questions to you concern the memos from
11 the Harleysville's files and basically what they mean on
12 these various claims.
13 MR. KERR: I would like permission to also
14 put the Ailes file in front of the witness.
15 MS. SHUMAN: Absolutely.
16 BY MS. SHUMAN:
17 Q Now, with regard to this Ailes claim, it is
18 a memo dated March 3, 1983, from Harleysville's file and
19 that is page 2 of that first -- of that exhibit.
20 And part of that memo says "We are able to
21 now pay wage loss and survivor benefits in a sump sum
22 settlement and not on an incurred basis. It is our
23 position that we will not solicit these claims. However,
24 if we are approached for payment, under either the wage
25 loss or survivors, we will make payment in full."
109
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1 New paragraph under that, "There is no
2 question at that time that we would pay the full 55,000.00
3 in survivor benefits and 515,000.00 in wage benefits when
4 asked." Now, can you explain to me what that means?
5 THE COURT: While he is examining that,
6 ma'am, how many claims do you have in the Ailes mode?
~ MS. SHUMAN: More than I intend to use,
8 your Honor. I think mY testimony with him is probably
9 going to go on another half hour. I misJudged --
10 THE COURT: Ma'am, just how many claims?
11 MS. SHUMAN: How many claims do I have? I
12 don't know, 10 or 12.
13 THE COURT: Thank you.
14 THE WITNESS: Are You saying this came from
15 this page? tIndicating)
16 This is a memorandum from a supervisor in
17 our Philadelphia office to one of the claim
18 representatives in the Philadelphia office. And the
19 supervisor apparently is telling the adJuster that if you
20 are approached, pay it. If you are not approached, don't.
21 BY MS. SHUMAN:
22 Q Now, by approached, you mean what, sir?
23 A Well, it says we will not solicit, if we
24 are approached for payment. I am ,lust reading what it
25 says, I guess if someone asks.
110
•
1 Q If someone asks specifically for survivors
2 loss?
3 A Wage or survivors.
4 It says if we are approached for payment
5 under either the wage loss or survivors we will make
6 payment in full.
7 Q What is the date on that memo?
8 A March 3, '83.
9 Q Do your records indicate whether payment
10 was made, whether a specific -- whether payment was made?
11 We will leave it at that right now.
12 A The file indicates they were paid 15,000.00
13 in work loss on July 7, '84.
14 Q Why?
15 A There was a coverage dispute involving
16 whether this death was caused by the accident or a heart
17 attack.
18 Q But now, sir, that wasn't why you didn't
19 pay the benefits until June of 1984, is it? July of 1984.
20 A My notes -- the Findings of Fact indicate
21 that it was not fully determined until June 29, 1983. So
22 I don't know why it wasn't paid until October -- or July
23 of ' 84 .
24 Q So any dispute was resolved a year before
25 there was payment, is that correct?
111
• •
1 A It appears to have been.
2 Q Perhaps this will refresh your
3 recollection. I am showing you from the Ailes trial file
4 a document stamped 10646, about the fifth or sixth
5 document in the file.
6 THE COURT: Wait a minute, Number?
7 MS. SHUMAN: 10646. And 10647. Apparently
8 it is like stamped at the top. It has been stamped twice.
9 BY MS. SHUMAN:
10 Q Is there not a copy of an envelope at the
11 top of it, sir?
12 A It appears to be.
13 Q A copy of an envelope addressed to
14 Harleysville Insurance Company?
15 A Yes.
16 Q And below that then is there a letter dated
17 June 21, 1984?
18 A Yes.
19 THE COURT: I can't find this, ma'am.
20 BY MS. SHUMAN:
21 Q Now, the first memo said, we owe this claim
22 and we will pay it, but we won't solicit it. We will pay
23 if we are asked. You say it was paid in July of 1984.
24 A Yes.
25 Q Do you have ~a copy -- looking at this
112
1 letter dated June 21, 1984 --
2 A Yes.
3 Q From whom is that letter?
4 A Constance Ailes.
5 Q And would you read the substance of the
6 letter?
7 A (Reading) I request my husband's lost wage
8 benefits to be paid to me in full. I know I am due
9 15,000.00 in work loss benefits in reference to my
10 husband's acc idental death on January 14, 1983.
11 (End of reading.)
12 Q And then a month later the benefits were
13 paid, is that correct?
14 A Approximately.
15 Q Let's look at the next example.
16 THE COURT: Still on the Ailes case?
17 MS. SHUMAN: No, your Honor, we are going
18 to the next. Covell.
19 THE COURT: What?
20 MS. SHUMAN: The next file.
21 THE COURT; Can I give you back the Ailes
22 working file?
23 MS. SHUMAN: Yes, sir.
24 THE COURT: Can I give you back the Woods
25 working file?
113
• •
1 MS. SHUMAN:
2 THE COURT:
3 MS. SHUMAN:
4 THE COURT:
5 MS. SHUMAN:
6 THE COURT;
7 in recess until 2 o'clock.
8 (Whereupon,
Yes, sir.
Should I keep Exhibit 15?
Yes, sir.
You have a half hour left?
I think so.
Let's take a recess. Let's be
a lunch recess was taken at
9 12:50 p.m. and reconvened at 2:10 p.m.)
10 (Witness resumes the stand.)
11 THE COURT: Ms. Shuman, you have never so
12 stated for the record, but have you called this man as on
13 cross-examination?
14 MS.
15 THE
16 BY MS. SHUMAN:
17 Q Mr.
18 marked as Plaintif
19 had already talked
20 William Ailes.
SHUMAN: No, your Honor.
COURT: All right.
Hagin, I am showing you what have been
fs Exhibit 15, examples of claims. We
about the first claim with regard to
21 I would now like you to turn your attention
22 to the claim of the estate of Cheryl Covell. I believe
23 that it is undisputed that Mrs. Covell died as a result of
24 a motor vehicle accident on February 15, 1981.
25 A It was a coverage dispute.
114
~ ~
1 Q I am trying to establish when her accident
2 occurred and when she died, sir.
3 A The accident was 2/15/81.
4 Q I am looking at a Harleysville memo dated
5 May 19, 1983, and numbered 03022. Do you see that memo?
6 A No. Yes.
7 Q Now, the --
8 THE COURT: Wait a minute.
9 MS. SHUMAN: This would be the third
10 page -- fourth page of the Exhibit 15, your Honor.
11 THE COURT: Oh.
12 BY MS. SHUMAN:
13 Q And that memo indicates that "Based upon
14 the present co urt decisions, we not only owe $15,000.00
15 wage benefits, but also the $5,000.00 survivors benefit."
16 Is that correct.
17 A Yes.
18 Q And it goes on to say, "Under these
19 circumstances, I would suggest that you contact Attorney
20 Lewis and advise him we will pay the $20,000.00 in total
21 and attempt to get out of this matter without paying any
22 interest." Did I read that accurately?
23 A Yes.
24 Q Do your records indicate how much in work
25 loss benefits and survivors benefits were paid to this
115
~~
1 estate?
2 THE WITNESS: Your Honor, may I stand once
3 in awhile?
4 THE COURT: Certainly.
5 THE WITNESS: The problem is this is so
6 close to my eyes.
7 THE COURT: All right.
8 THE WITNESS: It shows we paid the wage
9 loss on May 25, 1983.
10 THE COURT: In the amount of what?
11 THE WITNESS: 15,000.00. And do you want
12 to know when we paid the survivors?
13 BY MS. SHUMAN:
14 Q Yes.
15 A Could I have that file, please?
16 (Handed to the witness.)
11 It appears we did not pay survivors.
18 Q Now, the payment of wage loss benefit was
19 made more than two years after the accident, is that
20 correct? You s aid it was made on 5/25/83,
21 A Yes.
22 Q Was any interest paid?
23 A No.
24 Q Now, you started to mention a dispute as to
25 coverage. What were you referring to there?
116
~ •
1 A I don't see, unless they were referring to
2 the fact that she was unemployed, and at that time there
3 was a lot of questions -- court cases had not come down on
4 a lot of these files pertaining to unemployed people,
S people without dependents.
6 Q And you would characterize that as a
7 dispute as to coverage, sir?
8 A No, I wouldn't characterize it as a
9 coverage dispute. I would characterize it as to
10 eligibility for benefits.
11 Q And Harleysville paid the basic benefit, is
12 that correct?
13 A Yes.
14 Q And paid no interest though?
15 A Right.
16 Q Looking at this memo, the same memo we were
17 looking at before, how would you interpret the sentence to
18 contact the attorney and attempt to get out of this matter
19 without paying any interest?
20 A That, I would interpret that as meaning to
21 see if he would settle for the basic benefit, without
22 interest.
23 Q Under your understanding of the No-Fault
24 Act, is interest due on this claim.
25 MR. KERR; Objection.
117
•
1 THE COURT: Legal conclusion, isn't it,
2 ma'am?
3 MS. SHUMAN: In one sense it is, your
4 Honor. In the other sense, this is a person whose
S familiarity with the claims is such that it is a decision
6 that he would have to deal with every day in handling
7 claims, whether the No-Fault Act required interest or not.
8 THE COURT; Well, I will let him answer it,
9 although it may not have any weight. Go ahead.
10 THE WITNESS: I would answer it this way,
11 that interest apparently would be due if the benefits are
12 not paid within 30 days after proper proof that the claim
13 was owed.
14 BY MS. SHUMAN:
15 Q For a person who was not employed at the
16 time of the accident, what is proper proof?
17 A For what?
18 Q We are talking here about wage loss, sir.
19 A Oh, wages. I believe of that time, in '81,
20 I am not sure if that fell in the time period when we were
21 not paying unemployed people. It could have been. I am
22 not sure of that time frame.
23 Q So, in reality, would there be any proof
24 that an unemployed person could have provided to
25 Harleysville in 1981 that would have been adequate for a
118
• •
1 payment of work loss benefits?
2 A I am not sure of the time period. But if
3 that were the time period, then, no.
4 Q Let's look at another claim.
5 MS. SHUMAN: Can we go off the record?
6 (Discussion held off the record.)
7 BY MS. SHUMAN:
8 Q With regard to the claim of Ruth Vitale,
9 Mrs. Vitale died as a result of a fatal motor vehicle
10 accident on March 8, 1982, is that correct?
11 A Yes.
12 Q The document 15428 is a memo dated May 16,
13 1983. It could be May 12 -- May of 1983. Is that
14 correct?
15 A Yes.
16 Q And that memo says "Since we no longer need
17 a release, why not again call Attorney Giangrieco and if
18 it is agreeable, send him our $15,000.00 wages at this
19 time. Maybe if the estate gets $15,000.00, they will not
20 be so anxious to pursue the $5,000.00 survivors benefit."
21 Did I read that accurately?
22 A Yes.
23 Q Was the $15,000.00 basic work loss benefit
24 paid on the Vitale estate?
25 A Yes.
119
• •
1 Q And when was that paid?
2 A June 6, '83.
3 Q Was any interest paid on that claim?
4 A Could I have that file? (Handed to
5 witness.),
6 Q Perhaps we can move this matter on a little
7 bit, Mr. Hagin. I am showing you Harleysville's
8 request -- response to our request for admissions. These
9 are documents that you verified, are they not?
10 A Yes.
11 Q And you have signed them as a
12 representative for Harleysville, is that correct?
13 A Yes.
14 Q At number 11, the request for admission
15 was, Harleysville Insurance Company paid no interest on
16 the work loss benefits. What was Harleysville's answer?
17 A Admitted.
18 THE COURT: Sir, what is this document
19 marked 15428?
20 THE WITNESS: That is an internal
21 memorandum from Mr. Wilbert Thomas, who at that time was
22 manager of our Bloomsburg office, addressed to Ralph
23 Palmiero, who was a supervisor -- well, I don't know., he
24 was an employee anyhow -- might have been a claim rep at
25 the time.
120
•
•
1 THE COURT: Internal memo of Harleysville?
2 THE WITNESS: Yes.
3 BY MS. SHUMAN:
'~ Q The next example of a claim on our exhibit,
5 Plaintiffs' Exhibit Number 15, had to do with the Jenkins
6 claim. This is a matter that I had asked you about
7 through your direct testimony earlier.
8 A Yes.
9 Q So I am going to skip over that one.
10 Moving on to the claim of Earl Bowman --
11 A Okay.
12 Q Mr, Bowman died as a result of a motor
13 vehicle accident on January 3, 1983, is that correct?
14 A Yes.
15 Q I am showing you a document numbered 08355
16 headed Harley sville Insurance Companies, to a Donald
17 Gemmill from C. Blough. Who are those people?
18 A C. Blough would be Cindy Blough. She is a
19 claim - - was a claim rep at that time in our Lancaster
20 office. Addr essing a memorandum to the manager of that
21 office, Donal d E. Gemmill.
22 Q And this memorandum is dated January 13 of
23 1984, is that correct?
24 A Yes.
25 Q And it states "After conferring with you, I
121
• •
1 decided to close this fatal PIP claim since the deceased
2 was an 85 year old widower and had -- I believe that
3 should say -- no dependents to pay a survivor or wage loss
4 claim. I am therefore closing number 3, no poy, and since
5 numbers 1 and 2 and 4 are closed, this will close the file
6 and conclude my handling." Did I read that accurately?
7 A Yes.
8 Q Was that file then closed?
9 A I don't believe so.
10 Q The next document in the exhibit is
11 numbered 08354. It is dated February 1, 1984, is that
12 correct?
13 A Yes.
14 Q And it appears to be a letter from an
15 Attorney David Homsher to Harleysville Insurance Company,
16 is that correct?
17 A Yes.
18 Q Regarding the W. Earl Bowman claim?
19 A Yes.
20 Q Does this letter represent a demand for
21 work loss benefits?
22 A Yes.
23 Q Looking at the next document, February 6,
24 1984, number 08353. What is this document?
25 A This is apparently a response to the
122
•
•
1 previous document you referred to, a letter from our claim
2 rep to the attorney, date of 2/6/84. At which time she
3 sent him a draft for 15,000.00 for wage loss.
4 Q And this is about -- the accident was in
5 January of 1983, this is February of 1984, is that
6 correct?
7 A Yes.
8 Q Was a notice that work loss benefits were
9 not going to be paid to this estate ever sent out on this
10 file?
11 A Apparently not.
12 Q Was any interest paid on this claim?
13 I can show you the answer to the request
14 for admissions.
15 A No.
16 Q If the attorney had not made a demand to
17 Harleysville, specifically for work loss benefits, would
18 it have paid $15,000.00 in work loss on this claim?
19 MR. KERR: ObJection.
20 THE COURT: On what basis?
21 MR. KERR: I think it calls for a
22 hypothetical answer.
23 THE COURT: Well, I will let him answer if
24 he can.
25 THE WITNESS: I can't answer that. I don't
123
• .
1 know the answer,
2 BY MS. SHUMAN:
3 Q With regard to the Mertz claim, the date of
4 Donna Mertz's accident was December 20, 1982, is that
5 correct?
6 A Yes.
7 THE COURT: Is that when she died?
8 MS. SHUMAN: Yes, sir,
9 BY MS. SHUMAN:
10 Q And how much in work loss benefits was paid
11 on that estate ?
12 A 15,000.00.
13 Q How were those payments made?
14 A Periodic payments, apparently from June '83
15 to September '84,
16 Q Earlier you testified about a change in
17 policy where Harleysville made lump sum payments --
18 A Yes.
19 Q -- from some point in time. Have you been
20 able to ascertain when that point in time was?
21 A No.
22 Q But as of August of 1984, Harleysville was
23 still making periodic payments, is that correct, according
24 to this file?
25 A Yes, but they would have begun in June '83,
124
• •
1 Q How much interest was paid on this claim?
2 A No interest.
3 Q Let's look at the estate of Mark Barth.
4 Mr. Barth d ied as a result of a fatal, motor vehicle
5 accident on October 2, 1984, is that correct?
6 A Yes.
7 Q At the time of his accident, even though
8 that was af ter the No-fault Act had been repealed, his
9 No-fault Ha rleysville policy was still in effect, is that
10 correct?
11 A Apparently,
12 Q So we are not here faced with an issue of
13 whether his No-fault policy was or was not in effect at
14 the time of his accident?
15 A No.
16 Q I am showing you a document number 15130,
17 It is dated May 23, 1985, is that correct?
18 A Yes,
19 Q And the memo says, "As you can see, I am
20 issuing --
21 THE COURT: What is this? What is it, sir?
22 Do you know what it is?
23 THE WITNESS: This is a memo from John R.
24 Brown, who w as -- he was either a claim rep or a
25 supervisor, he is a supervisor now -- to Robert W. Noon,
125
•
1 who at that time was the manager of our Pittsburgh office.
2 THE COURT: This is an internal
3 Harleysville memo?
4 THE WITNESS: Yes.
5 BY MS, SHUMAN:
6 Q And that memo states, "As you can see, I am
7 issuing a check to the estate of Mark Barth in the amount
8 of $15,000.00, which represents the lost wage benefits
9 under his No-fault policy, I have verified that Mark
10 Barth was employed up to the date of the accident with
11 Marley Continental Homes of Virginia. Due to his age, 21
12 years of age, it would not be necessary that he be
13 employed at all as there would be a presumption of his
14 having earning capacity." Did I accurately read that
15 memo?
16 A Yes,
17 4 Why was the payment on this estate delayed
18 from October of 1984 until May of 1985?
19 A Apparently we didn't have the proof
20 necessary to make a decision to pay until May 23, '85.
21 Q How do you interpret that portion of this
22 memo that says "due to his age being 21 years of age it
23 would not be necessary that he be employed at all as there
24 would be a presumption of his having earning capacity?
25 A Well, he is apparently saying there is no
126
1 need to investigate whether he was employed.
2 Q By 1985 was there a requirement, under your
3 uKderstanding of the No-Fault Act, that a person be
4 employed to recover work loss benefits?
5 MR. KERR: ObJection.
6 THE COURT: I will allow him to testify, if
7 he can.
8 THE WITNESS: Would you repeat the
9 question?
10 BY MS. SHUMAN:
11 Q Under your understanding of the law in
12 1985, was there a requirement that a person be employed in
13 order to recover work loss benefits?
14 A No.
15 Q Was any interest paid on the Barth claim?
16 A No.
17 THE COURT: Moving on to a new one?
18 MS. SHUMAN: Yes, your Honor.
19 THE COURT: We are going to take a short
20 recess. I have to talk to somebody.
21 MS. SHUMAN: Yes, sir.
22 (Whereupon, a recess was taken.)
23 BY MS. SHUMAN:
24 Q Mr. Hagin, I would like to direct your
25 attention to the claim of the estate of J. Wilson Hutton.
127
•
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
MR. KERR: Your Honor, if I might
interpose, I have no obJection to Ms. Shuman asking
questions about this file.
On further examination -- and this has
happened on both sides -- on further examination into this
file, Harleysville is willing to stipulate that it owes
the benefits that the plaintiffs are claiming.
THE COURT: Pardon me.
MR. KERR: It owes the benefits that
plaintiffs pre claiming with respect to principal and with
respect to interest. There is the basic underlying
dispute as to whether interest should be owed on a lump
sum payment or on a periodic basis, This is one of the
fundamental differences between us. But aside from that
issue --
17
18
19
20 benefits.
THE COURT: The stipulation is?
MR. KERR: We owe Hutton.
THE COURT: What?
MR. KERB: $15,000.00 in work loss
21 THE COURT: Is that the extent of it?
22 MR. KERR: Plus that Harleysville received
23 notice on October 29, 1984, I believe.
24 MS. SHUMAN: Th at is correct.
25 MR. KERR: Now, there has got to be some
128
•
1 determination as to when interest may be due plaintiffs,
2 and we have a difference of opinion on that. But we
3 stipulate that we received notice of the claim on October
4 26, 1984.
5 THE COURT: Is that all you need on that,
6 Ms. Shuman?
7 MS. SHUMAN: One second, your Honor.
8 MR. KERR: This was a file that came up
9 during Mr. Hagin's recent deposition, and we were able to
10 do some additional checking and are now able to make this
11 stipulation.
12 THE COURT: Good.
13 BY MS. SHUMAN:
14 Q Mr. Hagan, I would like to ask you a couple
15 of questions with regard to the issue of interest on this
16 claim.
17 When is it Harleysville's contention that
18 it had sufficient proof to pay work loss benefits?
19 A I think during the -- during this
20 litigation we acquired that information.
21 Q And what information did you get during
22 this litigation that was necessary in order to determine
23 that this estate was entitled to work loss benefits?
24 A I guess I stand corrected. I don't see
25 anything we got during the litigation. We have no more
129
1 information now than we had in '84.
2 MR. KERR: Perhaps I could speed matters
3 along. Part of this stipulation, I would suggest to Ms.
4 Shuman, is that Mr. Hutton, at the time he died, was a
5 retired person and I believe was receiving Social Security
6 at $504.00 a month. That is what our records show, I
7 think. And I think that information was provided by your
8 office.
9 MS. SHUMAN: All I am trying to do is pin
10 down the date on which Harleysville contends that interest
11 commences to run on this claim.
12 THE COURT: I understand.
13 MR. KERR: I am Just saying that I assumed
14 that you and I could agree -- the parties could stipulate
15 to that as well.
16 THE COURT: Unless I am mistaken, the
17 answer to the question of when Harleysville had sufficient
18 proof to pay the work loss benefits would be that they had
19 that information certainly by the end of 1984. Is that
20 true?
21 MR. KERR; There are two positions, your
22 Honor.
23 THE COURT; Well, first -- wait. The
24 witness says he has no more information now on the claim
25 that you are willing to pay than you had in 1984. Now, it
130
1 is hard for me to see it any other way than that. But go
2 ahead, sir.
3 MR. KERR; I believe -- and I may be in
4 error because I don't have the file in front of me at the
5 moment -- that the actual income wage information, the
6 Social Security information, was provided by Ms. Shuman's
7 office sometime during the course of this litigation.
8 Harleysville admits that notice of the death of this
9 claimant was received on October 29, 1984.
10 THE COURT: All right. Go ahead with your
11 questions, Ms. Shuman.
12 BY MS. SHUMAN.
13 Q All right. I am going to pass up the
14, Plaintiffs' Exhibit 19 as to the Hutton claim.
15 Mr. Hagin, showing you a memo dated
16 November 28, 1984, can you identify that document?
17 A Yes, that is a --
18 THE COURT: Are we on a new claim?
19 MS. SHUMAN: We are on the J. Wilson Hutton
20 claim, your Honor, the same claim.
21 THE COURT: All right.
22 THE WITNESS: The memorandum from -- looks
23 like from John E. Molyneaux --
24 THE COURT: Now, ma'am, this document is
25 not in Exhibit 15. Is it to be found somewhere else?
131
• •
1 MS. SHUMAN; Yes, your Honor. This
2 document is in Plaintiffs' Exhibit 19 with regard to the
3 Hutton trial file. It has an accompanying number of 18792
4 on it. And it is the fourth document in the Hutton trial
5 file as part of Exhibit 19.
6 THE COURT: And it is numbered 18732? Or
7 18792?
8 MS. SHUMAN: I thought it was 92.
9 BY MS. SHUMAN;
10 Q Is this an internal Harleysville
11 memorandum, Mr. Hagin?
12 A Yes.
13 Q Does it have to do with Mr. Hutton's claim?
14 A Yes.
15 Q And what is the date on the memorandum?
16 A November 28, '84.
17 Q And the memorandum states "The named
18 insured was fatally insured in this accident of 10/26/84.
19 He was born in --
20 THE COURT: Well, ma'am, don't be reading
21 me these things. If you want the witness to comment --
22 BY MS. SHUMAN;
23 Q Did Harleysville know haw old this man was
24 based on this memorandum?
25 THE COURT: Ma'am, you start talking while
132
• •
1 I am still talking. If you want the witness to comment on
2 the document, have him read it and then ask the question
3 to him.
4 MS. SHUMAN: All right.
5 BY MS. SHUMAN:
6 q
7 q
8 q
9 death?
10 A
11 q
12 q
13
Would you review that document, Mr. Hagin?
Okay.
How old was Mr, Hutton at the time of his
Apparently 77.
What were his sources of income from work?
That he was retired.
Q And did he have any sources of income,
14 according to this memorandum?
15 A Pension and Social Security.
16 Q Does your file reflect whether Harleysville
17 attempted to ascertain how much Social Security and
18 pension Mr, Wilson -- Mr. Hutton was receiving?
19 A Apparently not.
20 Q Now, I would like to direct your attention
21 back to Plaintiffs' Exhibit Number 15, the examples of
22 claims, having to do with the claim of J. Wilson Hutton at
23 page 8 in that exhibit and at page 9. Can you identify
24 the exhibit?
25 A I am sorry --
133
1 Q Can you identify the document labeled
2 13208?
3 A That is a memorandum from David Kennedy,
4 Unit Manager Home Office, to all Pennsylvania District
5 Claim Managers dated March 29, '83.
6 Q And this is a Harleysville memorandum?
~ A Yes.
8 Q And what is the sub,~ect of the memorandum?
9 A Pennsylvania No-Fault work loss benefits.
10 Q And have you reviewed that memorandum?
11 A Yes.
12 Q And what instructions are being given in
13 it?
14 A Instructions are to the managers that in
15 view of Minnier vs State Farm, whether or not they
16 suffered a loss they would be entitled to benefits.
17 Q And does it talk about how to calculate
18 work loss for an elderly person?
19 A Apparently based on life expectancy tables.
20 Q Does this memo indicate that it shall be
21 our position to pay work loss benefits to the survivors of
22 deceased victims no matter what the work history is?
23 A Yes.
24 Q Let's look at the claim of the estate of
25 Terrylee Talasky. Terry's accident occurred -- fatal
134
• •
1 accident occurred on March 18, 1980, is that correct?
2 A March --
3 Q I am sorry, February 18, 1980.
4 A Yes.
5 Q Were work loss benefits paid on this claim?
6 A Yes.
7 Q When?
8 A November 3, '83.
9 Q How much in work loss benefits was paid?
10 A I would assume 15,000.00.
11 Q Was any interest paid?
12 A Yes.
13 Q How much interest was paid, Mr. Hagin?
14 A A payment of I believe twenty-seven five
15 was made, inclusive of work loss, interest and attorneys
16 fees.
17 THE COURT: $27,500.00.
18 BY MS. SHUMAN:
19 Q May I see the document to which you are
20 referring?
21 A The case was in suit, and there was an
22 agreement to settle for twenty-seven five, including
23 everything.
24 Q And did that include survivor loss
25 benefits, Mr. Hagin?
135
• •
1 MR. KERB; Your Honor, I am going to
2 ob,iect. This case really isn't about survivors loss. It
3 doesn't concern survivors loss.
4 MS. SHUMAN: It may not. But if we are
5 being told X27,000.00 was the amount paid, then I think we
6 are entitled to know what it was paid for.
7 THE COURT; Go ahead. The record should
8 reflect that we are having two to three minute pauses
9 between questions and answers while the witness looks
10 through these various records,
11 THE WITNESS; Was your question did we pay
12 survivors benefits?
13 BY MS. SHUMAN:
14 Q Yes, sir.
15 h The survivors benefits was included in that
16 twenty-seven five. This suit -- there was a suit and the
17 suit claimed survivors and work loss, interest and
18 attorneys fees. And that was in the settlement.
19 Q How much was paid on attorneys fees on that
20 claim?
21 A I can't find the breakdown.
22 Q Is that your final answer, Mr. Hagin? I
23 don't want to waste time, but if you are continuing to
24 look and you have some hopes of finding it --
25 A I don't see any breakdown. This is an all
136
• •
1 inclusive settlement,
2 Q So you have no breakdown on the amount for
3 attorneys fees, you have no breakdown on the amount for
4 interest, is that correct?
5 A Correct.
6 Q Going to Plaintiffs' Exhibit Number 15,
7 page 10, the estate of Denise Sluck, this fatal accident
8 occurred on October 31, 1978, is that correct?
9 A October 31, '78?
10 Q Yes.
11 A Yes.
12 Q Can you identify the document behind page
13 10 doted November 17, 1980?
14 THE COURT: And that is numbered 19235.
15 THE WITNESS: Yes.
16 This is an internal company memorandum,
17 Harleysville memo, from Home Office, Mr. Kennedy, to Mr.
18 Lewis, manager of our Bloomsburg Office, dated November
19 17, 1980.
20 BY MS. SHUMAN:
21 Q And does that memo indicate why
22 Harleysville did not pay work loss benefits on that
23 estate?
24 A Yes. Apparently because of a dependency
25 question.
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1 Q Does the memo indicate that the child was a
2 minor?
3 A Said she was a student.
4 Q Did Harleysville at any time go back and
5 pay that claim work loss benefits?
6 A No.
~ Q Why?
8 A We were not aware that the law as it
9 changed was retroactive to closed files.
10 Q So you didn't know that the decisions that
11 came down and said that decedents were entitled to work
12 loss were retroactive?
13 A Correct.
14 Q Do you know that fact now, Mr. Hagin?
15 A No, I am not sure that I have ever seen
16 that.
17 Q So based on that answer, was it
18 Harleysville's position not to pay work loss benefits to
19 anyone whose death occurred before a decision from our
20 appellate courts that would have addressed that decedent?
21 MR. KERB: Oblection. I am not sure -- it
22 is a very broad question. I am certainly not sure I
23 understand it.
24 THE COURT; I don't.
25 BY MS. SHUMAN:
138
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1 Q Mr, Haain, you indicated that you didn't
2 pay this claim because the death occurred before what? If
3 You will restate your answer, why wasn't this claim paid?
4 A According to that memo, that is what I was
5 referring to. The memo states that because the decedent
6 was a minor, her parents not dependent upon her, we would
7 not pay the wages.
8 Q And did the law change after November of
9 1980 when this memo was written?
10 MR. KERR: I again obJect, Your Honor. I
11 think --
12 THE COURT: I will let him answer that if
13 he can.
14 THE WITNESS: Oh, I'm not sure, But I
15 think there were so many decisions coming down, I Just
16 can't recall what they were or when.
17 BY MS. SHUMAN:
18 Q And was this claim not paid because the
19 file had been closed before those decisions?
20 A I don't know. I would -- well, I shouldn't
21 assume. I don't know.
22 Q Do you know why the claim hasn't been paid?
23 A Apparently at that time we were not paying
24 those -- in that category because of the unsettled law at
25 the time. And apparently it was closed and we do not --
139
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1 did nat go back and look for old, closed files.
2 Q Let's look at the estate of Daniel Rause.
3 Mr. Rouse died as a result of a fatal motor vehicle
4 accident on May 2, 1979, is that correct, Mr. Hagan?
5 A Give me a second. Yes.
6 Q Did Harleysville pay work loss benefits on
7 this claim?
8 A Yes.
9 Q When?
10 A On my notes, I have November 15, '82. And
11 then again 12/22/82.
12 Q How much work loss was paid?
13 A 15,000.00.
14 Q How much interest was paid?
15 A None.
16 Q There is a document behind page 11 with
17 number 02518, can you identify that document?
18 A It is an internal company memorandum from
19 Patrick Bachtell addressed to Home Office, David Kennedy,
20 dated 12/22/82.
21 Q And does it explain the basis of the two
22 payments that you noted in November and December of 1982?
23 A Well, it indicates a payment was made for
24 $13,000.00 and apparently an additional payment for two.
25 But it doesn't say why.
140
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1 Q Doesn't it say ", and when told the
2 statute ran he would not settle for $13,000,00"?
3 A Yes.
4 Q "We conclude for the additional wage loss
5 of $2,000.00 without attorney fees." Is that what it
6 says?
7 A Yes.
8 Q Now, if You will look at the claim of the
9 estate of Reuben Groff, Mr. Groff died as a result of a
10 fatal motor vehicle accident on November 6, 1978, is that
11 correct?
12 A Yes.
13 Q Did Harleysville pay any work loss benefits
14 arising out of his fatal accident?
15 A No.
16 Q Showing you a memo after page 12 in
17 Plaintiffs' Exhibit 15 that bears the number 20711, can
18 You identify that?
19 A Company internal memo from Home Office
20 to -- Home Office, David Kennedy, to Donald Gemmill,
21 Manager in Lancaster office, dated November 13, '80.
22 Q And what is the substance of that memo, Mr.
23 Hagin?
24 A Home Office is advising Lancaster that if
25 there is a claim for wages presented, it should be denied
141
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1 because the decedent was unemployed and left no survivor.
2 Q Does your file indicate whether Mr. Groff
3 was married at the time of the accident?
4 A Apparently he was married to -- I am not
5 sure I can read it, Doris Groff. Dora maybe. Anyway, the
6 PIP application refers to him as her husband.
7 Q So how do you interpret the portion of this
8 memo that says there was no survivor?
9 A I don't know, unless he didn't have it in
10 his file at the time.
11 Q But it is in your file today, isn't it?
12 A Yes,
13 Q Let's look at the estate of George Evans.
14 Mr. Evans died as a result of a fatal motor vehicle
15 accident on March 11, 1979, is that correct?
16 A Yes.
17 Q There is a error on Plaintiffs' Exhibit
18 Number 15, a typographical error. The date of the
19 accident should be listed as 3/11/79 and not 3/11/80.
20 There is a document behind page 13 of
21 Plaintiffs' Exhibit 15 that has an accompanying number of
22 19064, can you identify that document?
23 A An internal memo, company memo, from
24 Philadelphia office, Janice Highley, to David Kennedy,
25 Home Office, dated 8/26/80.
142
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1 Q Does a portion of that memo deal with
2 George Evans?
3 A Yes,
4 Q And what does it indicate?
5 A It indicates they established a reserve of
6 $20,000,00 for George Evans to cover wages and interest
7 and attorneys fees which may be included in any award,
8 Q And that memo indicates interest at the
9 rate of 18 percent per year, is that correct?
10 A Yes.
11 Q I am showing you the next document attached
12 to Plaintiffs Exhibit 15, which is number 189062. It is
13 dated November 17, 1980. Can you identify that?
14 A A memo from Home Office, David Kennedy, to
15 me as manager in Philadelphia, Julian Hagin, dated
16 November 17, 1980.
17 Q And what does that -- is that a memo about
18 George Evans as well?
19 A Yes,
20 Q What does that memo indicate?
21 A If -- it says wage loss benefits should be
22 paid and if interest is demanded, it should be paid at the
23 rate of six percent, No attorney fees should be paid.
24 Q Was work loss benefits paid on the Evans
25 estate?
143
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A Yes,
Q And how much in work loss benefits?
A 15,000.00.
Q Was any interest paid?
A No.
Q So whether six or 18 percent, none was
paid?
A Right.
Q And the work loss payment on the Evans
estate was made when, Mr. Hagin?
A The work loss claims was made when?
Q The payment was made when?
A November 17, 1980.
Q I would like to look at the Kathleen Nauss
file next. Mrs. Nauss died as a result of a fatal motor
vehicle accident on June 27, 1978, is that correct?
A Yes.
Q Now, what benefits were paid arising out of
her accident in 1978? Let me rephrase the question, were
any No-Fault benefits paid in 1978 arising out of her
death?
A Yes.
Q What benefits?
A Apparently funeral expense of 1500.00 and
some survivors benefits.
144
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1 Q Were survivors benefits paid in a lump sum
2 payment or periodically?
3 A Periodically.
4 Q And during what period of time did they
5 continue?
6 A September 27, '78, to July 30, '79.
7 Q To whom were those payments made?
8 A Apparently to Donald E. Nauss, Jr.
9 Q And these were survivor loss payments.
10 Would Mr. Nau ss have been the husband?
11 A Did you ask was he the husband?
12 Q Yes.
13 A Yes.
14 Q Did Harleysville ever indicate to Mr. Nauss
15 that he might have a claim for work loss benefits on
16 behalf of his wife?
17 A Could you rephrase that, restate the
18 question?
19 Q Did Harleysville ever inform Mr. Nauss that
20 he might have a claim for work loss benefits on behalf of
21 his wife?
22 A No,
23 Q I am showing you a document with a number
24 of 20801, whic h is the page after page 14 in Plaintiffs
25 Exhibit Number 15, can you identify that document?
145
• •
1 A A letter from David Kennedy, Home Office,
2 to Mr. Nauss dated March 16, '82.
3 Q If you would review that letter, please?
4 Does that letter indicate that Mr. Nauss
S made a specif ic demand for work loss benefits in 1982?
6 A Well, it refers to a letter, 2/1/82, from
7 him.
8 Q And do you have a copy of that letter in
9 Your file the n?
10 A Yes.
11 Q Did you read that? This is a letter from
12 Mr. Nauss, is that correct?
13 A From Mr. Nauss to Cindy Blough.
14 Q And she is with Harleysville?
15 A Harleysville in the Lancaster Office.
16 Q And what does that letter indicate?
17 A He is asking for wage benefits.
18 Q Does it say "I believe I maY be due
19 additional settlement for wage loss benefits under
20 Pennsylvania No-Fault"?
21 A Yes.
22 Q And does it say regarding the Heffner
23 decision?
24 A Yes.
25 Q Then this document 20801 that we looked at
146
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1 before is Mr. Kennedy's response to that letter, is that
2 correct?
3 A Yes.
4 Q And what is Mr. Kennedy's response?
5 A He is informing Mr. Nauss that there is a
6 two year statu te of limitations for making claims, two
7 years from the last payment.
8 Q Were any work loss benefits paid on this
9 estate?
10 A No.
11 MS. SHUMAN: I have no further questions
12 for Mr. Hagan.
13 THE COURT: We are going to take a short
14 recess. Step down.
15 (Whereupon, a recess was taken.)
16 (Discussion held off the record.)
17 THE COURT: In view of the lateness of the
18 hour and the lengthy testi mony yet to be completed in the
19 case, we are now going to adJourn the testimony until 9:00
20 a.m. tom orrow morning. Co urt is adJourned.
21 MR. KERR: Let me put this on the record --
22 I had a mental lapse -- we are expecting one other
23 witness, who I would not e xpect would be more than ten
24 minutes on one file. And I had forgotten that we were
25 planning to call him. So that will ,lust be one witness on
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1 one file.
2 THE COURT: All right.
3 (Whereupon, court adJourned for the day at
4 4:20 p.m.)
5
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HUGH J. COLEMAN, Administrator:
of the Estate of Gary Thomas .
Coleman, Deceased; G. C.
SKIPPER, Administrator of the
Estate of Richard C. Skipper,
Deceased; JAMES M. LAU,
Administrator of the Estate of:
James V. Lau, Deceased, and .
others similarly situated, .
Plaintiffs
V. •
HARLEYSVILLE MUTUAL •
INSURANCE COMPANY,
Defendant
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION - LAW
N0. 1569 1986
CLASS ACTION
JURY TRIAL DEMANDED
Proceedings held before the Honorable GEORGE E,
HOPPER, J., Cumberland County Courthouse, Carlisle.
Pennsylvania, on Thursday. June 14, 1989, commencing
' , at 9:00 a.m. in Courtroom Number Three.
VOLUME II
APPEARANCES:
PAMELA G. SHUMAN, Esquire
For the Plaintiff
ALEXANDER KERR, Esquire
DENNIS R. BARTHOLOMEW, Esquire
For the Defendant
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Thursday, June 15, 1989
Carlisle, Pennsylvania
THE COURT: Good morning.
MR. KERR: Good morning.
MS. SHUMAN: Good morning, Your Honor.
I would like to call Kim Guise to the
witness stand.
Whereupon,
KIMBERLY GUISE
having been duly sworn, testified as follows:
DIRECT EXAMINATION
BY MS. SHUMAN:
Q State your name, please?
A Kimberly Guise.
Q And where are You employed?
A Angino and Rovner.
Q And what is Your position there?
A I am a paralegal.
Q How long have you been with Angino and
Rovner as a paralegal?
A Since December 1, 1984.
Q Have you spent time on post mortem work
loss class actions?
A Yes, I have.
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1 Q Approximately what percentage of your time
2 has been spent on those actions, we will say within the
3 last couple of years?
4 A About 95 percent of my time.
5 Q Are you the paralegal primarily responsible
6 in the Coleman vs Harleysville action?
7 A Yes, I am the head of the department which
8 has three othe r paralegals now and a computer operator.
9 Q Were you involved in review of files at
10 Harleysville's attorney's office?
11 A Yes, I was.
12 Q And what did that review consist of, what
13 was done at th at time?
14 A We reviewed -- the department did -- a
15 number of file s that were produced by Harleysville. We
16 did summaries of the files for our own records. We also
17 tabbed documen ts that we wanted to have back at our
18 office.
19 Q And what was done with the tabbed documents
20 after that?
21 A We --
22 Q Let me ask my question another way, were
23 those tabbed d ocuments copied and then supplied to us?
24 A Yes, they were.
25 Q Were there files of potential class members
151
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1 that were not reviewed by the Paralegal Department?
2 A Right, there were files that Harleysville
3 said they cou ld not provide to us from our PennDOT study.
4 Q With regard to the claims where
5 Harleysville did not produce a claims file, what efforts
6 were made on those claims to gather additional
7 information?
8 A What we did was to -- first of all, we had
9 to find a rel ative, find somebody that had knowledge of
10 the accident. We advised them that Harleysville could not
11 come up with a file so that they had nothing that showed
12 that they wer e insured by Harleysville.
13 We advised them to contact their local
14 agents, look through their old papers, find anything that
15 they would have from their own sources to show that they
16 were insured with Harleysville.
17 Q And when was that effort begun?
18 A It was begun -- starting in 1987, when we
19 were involved in the Gregory vs Harleysville action.
20 Q Was it intensified within this action?
21 A Yes, it was.
22 Q Now, there are files that we have marked as
23 Plaintiffs' Exhibit Number 19, can you explain the general
24 pattern of those files?
25 A What those files contain are documents that
152
• •
1 have been produced by Harleysville, in sort of a
2 chronological order, where the right hand side there would
3 be the first notice to Harleysville, would be the first
4 document.
5 If a PIP application was filed, that
6 document is included next.
7 The other internal memorandum are included
8 by chronological date from the earliest date to the latest
9 date.
10 There are also documents that have been
11 drafted due to discovery; the request for admissions,
12 Harleysville's response to our request for admissions,
13 Answers to Interrogatories.
14 And the last document is a verification
15 where a person would have been unpaid or partially paid,
16 we had actually drafted the verification for them to sign.
17 That would be the last document.
18 On the left hand side is q summary of the
19 claims. Sort of Just goes through everything that we feel
20 is important as far as who the decedent was, their date of
21 accident, what notice was given to Harleysville, what
22 employment information we have, and what the calculation
23 of interest is.
24 Q Now, we hav e been referring throughout this
25 trial to serial number s on documents,
153
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1 A Right.
2 Q Will we see those on some of the documents
3 in the trial files?
4 A Right. Those serial numbers are something
5 that Harleysv ille has put on their documents to show
6 that -- well, if there is something on there with a serial
7 number, that means it was produced by Harley sville.
8 Q And if there is not a serial number on the
9 document?
10 A Then that would be something that has been
11 produced through our efforts.
12 Q On the claims where Harleysville produced
13 no claim file, what is the organization of those files?
14 A Those files would contain the documents
15 that were produced by the relatives of these people that
16 have been killed. In much the same order as the documents
17 where -- as the files where Harleysville has produced a
18 file.
19 Basically it would include their policies,
20 a declara tion sheet, if we were able to obtain that from
21 relatives , their income information, any copies of checks
22 that they would have from benefits received. That sort of
23 thing.
24 Q Now, in some of the files there is a
25 depositio n, Can you explain a little bit about what those
154
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1 depositions are?
2 A At some point in time, probably around late
3 April, we were informed that there were going to be some
4 depositions taken of some claims where Harleysville needed
5 additional information.
6 So there are depositions in some files
7 where there was additional information needed, either
8 where Harleysville thought there was additional
9 information needed or where we thought there was
10 additional information needed.
11 Q And copies of those depositions then are in
12 the trial fi les of the claimants whose relatives were
13 deposed, is that correct?
14 A Right, right.
15 Q Now, in the trial files is there income
16 information?
17 A Yes, there is.
18 Q With regard to the sources of that
19 information now, if you would give us a little background
20 on that?
21 A Okay. A lot of the files where
22 Harleysville did produce a file, there was income
23 information in those files, that information was in those
24 trial files.
25 Where there was not specific information on
155
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1 employment, what we did was contact the relatives and see
2 what information they would have. Did they have an income
3 tax return, did they have a W-2 form, did they have old
4 pay stubs?
5 We asked them to go through their records
6 and, in addition to that, we also called employers of
7 these people and tried to get the information ourselves.
8 Where the relative Just threw their
9 documents away and didn't have anything, that is what we
10 did.
11 We also had relatives for people who were
12 retired, to try to find us any information on their Social
13 Security numbers, earnings per month of their relative.
14 When that didn't work, we had them call the Social
15 Security or we called the Social Security office and
16 obtained that information.
17 There are also people who may not have been
18 16, but did have some prior work history as far as
19 babysitting or paper route. And we asked relatives to
20 supply us with letters from either people who they had
21 worked for or letters from the relative themselves saying
22 that they did have some sort of Job before they turned 16
23 or 18.
24 Q Now, one of the claims in which
25 Harleysville has taken the position that it didn't have
156
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1 sufficient income information was on the. claim of Mr.
2 Saoud. Using that as an example, what efforts were made
3 to obtain income information with regard to that decedent?
4 A We11, Mr. Saoud's claim was real tough
5 because we Just had our PennDOT information, which had
6 where he lived at the time that he died, his date of death
7 and where his accident happened.
8 We attempted to locate some relatives of
9 his and we weren't successful at first. We had contacted
10 the place where he had lived and was told that --
11 MR. KERR: ObJection, your Honor. I have
12 no p roblem with Miss Guise describing procedures and how
13 the files were assembled and that sort of thing. But if
14 she is going to talk about a specific file and describe
15 what during the course of her investigation people told
16 her, I think we are in hearsay evidence.
17 THE COURT: Ma'am?
18 MS. SHUMAN: Your Honor, this is one of the
19 claims that the defendant has requested be dismissed for
20 lack of sufficient information. And the only point of
21 these questions is to show the route by which we came up
22 with Mr. Saoud's earnings in this case.
23 THE COURT; Well, that st ill doesn't answer
24 the obJection to the hearsay.
25 MS. SHUMAN; I think she can testify as to
157
1 what his -- where the sources of information were.
2 Perhaps she can't testify as to what a particular person
3 told her, but she can testify to the areas that were
4 investigated to try to determine his earnings.
5 THE COURT: Well, I suppose that is all
6 right. Is it, Mr, Kerr?
7 MR. KERR: I don't have a problem with her
8 testifying as to who she contacted. I have a problem with
9 her testifying as to what they told her.
10 MS. SHUMAN: Well, let's confine your
11 testimony then, Mrs. Guise, to who was contacted.
12 THE WITNESS: Okay. We contacted the
13 people where Mr. Saoud last lived. We were informed --
14 well, we were then referred to a friend of his that he
15 knew. We found out that Mr. Saoud's parents were in
16 Lebanon. And we had some contact with his parents before
17 there was some bombing over in Lebanon, We have lost
18 contact with them.
19 We did find a cousin -- we were able to
20 find a cousin in California. And it was our understanding
21 that Mr. Saoud did have a Jo b -- he was in school, he did
22 have a Job and that was what at Lehigh Valley Farms.
23 We contacted Lehigh Valley Farms for them
24 to go through their records to see if they would have some
25 earni ngs on Mr . Saoud. And while we were doing that, we
158
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1 then got additional information from Harleysville which
2 didn't give us much more than what we had, but it was
3 something that said that they did have notice of his
4 accident.
5 We kept at it and finally got a death
6 certificate for Mr. Saoud. And he did have a Social
7 Security number. We contacted the Social Security Office
8 and we were able to obtain his wages from 1971, I believe,
9 to 1978.
10 Q And is that information contained -- the
11 information fr om Social Security contained in Mr. Saoud's
12 trial file?
13 A Yes, it is.
14 Q In addition to employment, was he also a
15 student?
16 A Yes, and he was a student. We also
17 contacted the colleges where he was a student and got
18 three letters from three different places where he had
19 been a student , the last of which was Temple University
20 where he was a full-time student pursuing his MBA.
21 Q I am going to s-how you what has been marked
22 as Plaintiffs' Exhibit Number 16. Can you identify this
23 document?
24 A Yes, these are Life Tables put out by the
25 Department of Health and Human Services. They cover the
159
1 years 1978 to 1983. And these tables were used to
2 determine the life expectancy -- a natural life
3 expectancy, so to speak, of these people that were killed.
4 Q Do you know if they are the life tables
5 that are used with the standard Jury instructions in
6 Pennsylvania?
7 A Yes, they are.
8 Q I am going to show you what has been marked
9 Plaintiffs' Exhibit Number 17. Can you identify that?
10 A This is a summary of the entire class of
11 people involved in this action, 123 claimants. It is
12 grouped by categories; people that have been unpaid,
13 people that have been paid some principal and no interest,
14 people who have been paid principal, but no interest, and
15 then the final category is a category of 11 claims where
16 Harleysville does not dispute the amount of basic
17 principal owed, but disputes the amount of interest.
18 Q And looking at the first page of that
19 document, headed Class 1 claimants, can you -- using the
20 first claim as an example -- go through and explain what
21 each of those --
22 A What this contains is an alphabetical
23 listing of the people in each individual class. It
24 contains the person's date of accident, the date of notice
25 to Harleysville, the date that a PIP application was filed
160
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1 or a funeral benefit paid. It also includes the amount of
2 work loss due, principal plus interest. It also contains
3 information on employment history and what their earnings
4 were per month or year.
5 Q And is the pattern basically the same for
6 each?
7 A The pattern is the same throughout, but
8 would have different figures for the different categories,
9 of course.
10 Q I am showing you what has been marked
11 Plaintiffs' Exhibit Number 18. Can you identify that
12 document?
13 A Yes. This is a summary, again, of the
14 entire group of class members. This is the calculations
15 based on what we figured these people to be owed. It is
16 grouped by categories, again, unpaid claims, partially
17 paid claims, interest claims and what we called the
18 undisputed claims. But that is as to interest and not as
19 to principal.
20 Q Another first page of that document, what
21 information is contained?
22 A This would be the totals for each group,
23 And a total for the entire class of people.
24 It explains that the interest was
25 calculated for the unpaid claims and the partially paid
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1 claims to the date that this, this trial started, June 14,
2 1989. And for the claims where there was a dispute as to
3 interest on the 11, that interest was calculated to the
4 date that the money was paid into court, 4/14/89.
5 Q And what is the total due to the members of
6 the class based on those calculations?
7 A $2,221,635.90.
8 Q Did you personally complete those
9 calculations?
10 A Yes, I did. I have a computer program that
11 I use. But I did these calculations.
12 Q Now, on the calculations where interest is
13 requested, you can use an unpaid claim as an example, when
14 is interest calculated from?
15 A What I used as the date that interest
16 begins is 30 days after what I found to be notice that
17 Harleysville had. In the ma~oritY of the cases, these
18 numbers -- I mean these dates are the date that the PIP
19 application was filed with Harleysville. That is for
20 about 90 percent of these starting dates. And it is 30
21 days after that date where the interest would begin.
22 There are some files that Harleysville
23 produced or that we have where we don't know that a PIP
24 application was filed. And for those particular claims, I
25 would use a date that the funeral was paid. And it would
162
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1 be 30 days after that date.
2 There are some other miscellaneous
3 catagories where we don't know if a PIP was filed and we
4 don't know whether or not the funeral was paid or the
5 exact date of that payment. And for the most part, those
6 dates are 60 days after the date of the person's accident,
7 and would start 30 days after that 60 days. So it is
8 actually like a 90 day period.
9 MS. SHUMAN: I have no further questions.
10
11 CROSS-EXAMINATION
12 BY MR. KERR:
13 Q Miss Guise, as I understand it, in these
14 files that consist of Plaintiffs' Exhibit 19, that is not
15 the complete Harleysville file that you and your staff
16 reviewed, is it?
17 A No, it is not. It is a shortened version
18 of it.
19 Q In other words, you would select particular
20 documents and those are what have been placed in the trial
21 file?
22 A That is right, we selected documents when
23 we were at your office and then some or all of those
24 documents were used.
25 Q I want to review again how interest was
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1 calculated. You calculated it, for those claims where no
2 work loss benefits had been paid, you calculated it on a
3 full $15,000.00 lump sum payment to begin 30 days after
4 Harleysville received notice, as you determined it. Is
5' that correct?
6 A That is correct.
7 Q You did not take any account of a periodic
8 payment by Harleysville?
9 A No, I didn't.
10 Q And if, in fact, work loss benefits had
11 been paid in a claim on a periodic basis, you went back
12 and calculated interest based upon a lump sum payment 30
13 days after you contend that Harleysville received notice,
14 is that correct?
15 A In the cases where the people were paid
16 periodically, the interest is calculated only from the
17 date prior to -- at the beginning it is calculated from
18 the date of notice to the date that it is first paid.
19 And if there are benefits overdue, that is what is shown
20 in the interest column.
21 After that it is on a month by month basis,
22 not on a lump sum, 15,000.00. It is on a month by month
23 basis.
24 Q Taking into account what Harleysville has
25 already paid?
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1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
A Exactly. As the principal decreases., the
amount of interest also decreases on that month by month
payment,
Q Correct. And if Harleysville was paying --
I believe some cases were explored yesterday when Ms.
Shuman was questioning Mr. Hagin where Harleysville paid
survivors and wage loss benefits?
A Right.
Q And if the survivors benefits were paid
first, before the wage loss benefits, how was interest
calculated?
A Interest was calculated from 30 days after
Harleysville had notice to the date that the first payment
of wage loss was made. And then on a month by month
basis.
Q Now, if it was a case where there were
settlement discussions going on between Harleysville and
counsel for the claimant, did you still calculate your
interest calculations 30 days after Harleysville received
notice, as you reviewed the file and determined --
A Yes, I did.
Q -- determined when Harleysville received
notice?
A Yes, I did. It is calculated to the date
that it was paid.
165
•
1 Q Ms. Shuman asked you about Mr. Barrett on
2 Plaintiffs' Exhibit 17?
3 A Right.
4 Q Just as an example, when you have down your
5 earnings of $628.00 per month, do you have any
6 recollection of what the basis for that $628.00 per month
7 figure is?
8 A The 628 a month figure was provided to us
9 by Mr. Barrett's brother,
10 Q Do you recall whether Mr. Barrett's brother
11 provided you that figure or Just gave you a pay stub or an
12 hourly figure?
13 A He provided us with pay stubs and his --
14 from what I remember, his hourly wage was around $4.00 per
15 hour.
16 Q And then did you make certain assumptions
17 concerning how long per week or per month Mr, Barrett
18 worked?
19 A Well, we know that he did work, based on
20 his pay stubs. And that is how this figure was arrived
21 at.
22 Q Well, did you assume in that case that he
23 worked a 40 hour week?
24 A Well, I would have to look back at the file
25 to see how exactly it was. But I know it is based on the
166
• •
1 information
2 provided.
3 Q
4 pay stub in
5 had to make
6
7 Honor. The
that Gary Barrett, Mr. Barrett's brother,
Isn't it true that there was only Just one
that case which showed $4.00 an hour and you
various assumptions concerning --
MS. SHUMAN: I am going to obJect, your
re are documents available. If Mr. Kerr wants
8 to question Mrs. Guise on the documents, that might be
9 appropriate. But he has asked her from her recollection,
10 and I think she has answered with regard to what her
11 independent recollection is.
12 THE COURT; Well, if she wants help, she
13 can ask for it. But this is cross-examination, ma'am.
14 THE WITNESS: Can I look at the file?
15 BY MR. KERR:
16 Q Miss Guise, I am going to place in front of
17 you a document which has been marked previously for
18 purposes of identification as Defendant Exhibit D-9. Your
19 counsel I believe has also placed in front of you your
20 Guise -- your Barrett file.
21 A Right.
22 Q Now, defendant -- what is Defendant Exhibit
23 Number 9?
24 A It consists of two pay stubs, one from
25 7/12/78 and one from 7/26/78.
167
• •
1 Q And those pay stubs show that Mr. Barrett
2 earned $4.00 a n hour, is that correct?
3 A Approximately they do, yes.
4 Q And how is it that you come up with the
5 monthly figure that is contained in Defend ant -- in
6 Plaintiffs' Ex hibit 17?
7 A I need a pen.
8 Q You have made assumptions, haven't you, or
9 calculations?
10 A This figure here, $628.00 a month, is
11 approximately $4.00 an hour based on what Mr. Barrett was
12 earning.
13 Q And what is your assumption concerning how
14 many hours per week he worked?
15 A That would have been a five day week, eight
16 hour day.
17 Q So under your calculations --
18 A Approximately.
19 Q When you say approximately, did you do it
20 by 40 hour wor k week?
21 A Yes.
22 Q So that is $160.00 a week?
23 A Right.
24 Q And for a 52 week year?
25 A And it comes out to $628.00 a month.
168
• •
1 Q I am Just trying to understand how --
2 A Okay.
3 Q -- what assumptions you made. So that is
4 the assumpti on you made in that case, you did a
5 calculation based upon a check stub, is that correct?
6 A No, not on Just a check stub. We had a
7 number of check stubs. I had five in front of me plus a
8 1976 wage an d tax statement. So not Just on a pay stub,
9 no.
10 Q Well, based on check stubs?
11 A Right,
12 Q Is that the procedure you would follow in
13 other cases where you would have check stubs available?
14 You assumed a -- if it Just showed an hourly wage, you
15 would assume a 40 hour workweek?
16 A No. There were cases where there were
17 children tha t had only been employed for a period of three
18 months. And I don't think that they were employed for a
19 40 hour week . So we used what we had. I used what I had.
20 I used whatever information was available
21 to me. And that included Social Security per month, that
22 included pay stubs, that included income tax returns, that
23 included W-2 forms. Whatever I had, I used.
24 There were cases where we used an average
25 of a three y ear period before these people died. So that
169
•
1 we could come up with something that was fair as far as
2 what the -- as far as with what the law had required in
3 the three year period before these people died.
4 We used what we had. If we could get the
5 three year period, we would use it. If we only had a
6 couple months of paychecks, that is what we used. These
7 are records that are 10, 11 years old in most cases. And,
8 you know, we used what these people could provide to us.
9 Q Ma'am, going back to Mr. Barrett, I am not
10 very good at math, but I Just want to make sure I
11 understand your calculation. If we do $160.00 a week and
12 we multiply that times four, don't you come up with
13 $640.00 a month?
14 A Yes.
15 Q Not $628.00 a month?
16 A Right. But like I said, it may not have
17 been Just on that $4.00 per hour.
18 The basis of putting this here, the
19 earnings per year, is to show that a person would have
ZO earned 15,000.00 over the course of their lifetime, This
21 has nothing to do with the -- with their calculations.
22 Q Is there --
23 A Because their calculations were based on a
24 lump sum.
25 Q Is there anywhere in the Plaintiffs'
170
• •
1 Exhibit 19 where whatever assumptions that you have made
2 concerning income or whatever procedures you have made are
3 set forth?
4 A The actual income documents are in there
5 and that is what we used.
6 Q No, I mean the calculations. When you have
7 made calculations such as the Barrett case?
8 A No, those I would have Just done at my
9 desk. And there was nothing to show the actual -- this is
10 what he made per month, you know, times 12 equals what he
11 made per year, no.
12 Q So looking at Plaintiffs' Exhibit 17 -- and
13 again Just looking at Mr. Barrett which is the first one
14 there -- earnings -- there is nothing in either
15 Plaintiffs' Exhibit 17 or Plaintiffs' Exhibit 19 which
16 would help us to understand the calculations you have gone
17 through other than what You have told us here this
18 morning? In other words, there is no explanation or list
19 of assumptions that are set forth with respect to each of
20 the files?
21 A Well, I don't -- as far as calculations go,
22 I told You how I did the calculations. As far as the
23 wages per month, I said that it comes directly from the
24 information that has been provided by the relatives.
25 So how did I come up with a certain figure,
171
• •
1 that would Just have to be on a case by case basis. But
2 it has nothing to do with the calculation of what we feel
3 was owed in principal and interest.
4 Q Now, how, in cases where you had not
5 received a PIP form, and in those claims files --
6 A Right.
7 Q -- how did you determine the date of notice
8 to Harleysville?
9 A I would have used the date that the funeral
10 was paid, if a funeral benefit was paid. And I would use
11 30 days after that date. Seeing that if Harleysville paid
12 the funeral, they had notice to pay the other benefits.
13 Q Now, so --
14 A But I give them an additional 30 days on
15 top of the date that they did pay the funeral.
16 Q I understand that. The -- so You made no
17 determination or no analysis of whether or not
18 Harleysville had received a fully completed PIP form
19 for -- properly completed PIP form, is that correct?
20 A There were some cases where we did not find
21 a PIP application in HarleYSVille's original files.
22 Either because it wasn't there or maybe it was overlooked.
23 And our summary sheets is where we had actually the
24 information that a PIP application was filed. And where
25 there was one filed, we got one copied.
172
•
1 Q I am probably not making myself clear. My
2 question is in your putting down a date on Plaintiffs'
3 Exhibit 17, and for purposes of calculating interest and
4 that sort of thing, your analysis didn't go into whether
5 or not it was a properly completed PIP application, is
6 that correct.
7 MS. SHUMAN: I am --
8 THE WITNESS: I don't --
9 MS. SHUMAN: I am going to obJect to what
10 properly completed means. I am not sure I know the answer
11 to that, your Honor.
12 THE COURT: How do we know that?
13 MR. KERB; Excuse me, your Honor.
14 THE COURT: How does the witness know?
15 MR. KERR; Well, that is my precise point.
16 She Just took a date on a form. I am trying to ascertain
17 that they made no analysis of whether or not the PIP form
18 was properly completed.
19 THE COURT: Well, how does she know whether
20 it is properly completed? That may be a matter that your
21 company officials disagree about. Well, anyway -- we know
22 what date she took, so let's move on.
23 BY MR. KERR:
24 Q Is it fair to say, Miss Guise, you don't
25 know if a PIP form or when a PIP form was properly
173
• •
1 completed?
2 A I used the date that the people had signed
3 their PIP application. They signed it, they dated it.
4 That is the date I used.
5 Q And you, in your determining the date that
6 the interest would run, you made no efforts to determine
7 whether or not there were proper letters of administration
8 in the file, did you?
9 A In some cases, there were. In some cases,
10 there may not have been. That is not what I was looking
11 for. I was looking for the PIP application, if it had
12 been signed and filed, and if another benefit had been
13 paid.
14 Q So you Just disregarded the letters of
15 administration?
16 A It didn't have anything to do with what I
17 was doing.
18 MR. KERR: I don't think I have any further
19 questions of this witness.
20 MS. SHUMAN: I would like to move for the
21 admission of Plaintiffs' Exhibits 15 through 19. Exhibits
22 1 through 14-A have already been admitted into evidence,
23 THE COURT: Sir?
24 MR. KERR: Your Honor, let me start with
25 Plaintiffs' Exhibit 19. I believe --
174
• .
1 THE COURT: I have none of these in front
2 of me. Is it necessary that I have them in front of me?
3 MS. SHUMAN. Well, they are in -- we had
4 given you a folder, your Honor. May --
5 THE COURT: Oh, pardon me. I do.
6 MS. SHUMAN: And I believe the last --
7 Exhibits 15, 16, 17 and 18 are the last four in that
8 folder.
9 THE COURT: I have copies of 15, 16, 17 and
10 18. What is next?
11 MS. SHUMAN; Exhibit 19 are the trial files
12 that are over to the side of --
13 THE COURT: All right.
14 MR. KERR: My obJection --
15 THE COURT: Louder, sir. I am having
16 trouble hearing you.
17 MR. KERR; I am sorry. My obJection, your
18 Honor, is in the nature of a general one. I am not quite
19 sure how best to proceed, but let me state my general
20 ob.iections.
21 Exhibits 19 consists of, as your Honor can
22 see, of two boxes of documents which purports to have a
23 trial file for each one of -- and there is a disagreement
24 between -- we have numbered things a little differently,
25 but for each of the 123 claimants that are part of the
175
•
•
1 C1aSS,
2 In those files, as we have heard, are not
3 only Harleysville documents, but other documents as well.
4 Documents which have been obtained from, as part of an
5 investigation, from either relatives or Social Security
6 Administration. We have heard from brothers and a variety
7 of different things.
8 I have no obJection to the Exhibit insofar
9 as it contains Harleysville's documents. I do have a
10 problem with the Exhibit with respect to these other
11 documents because we haven't had, except in a few cases,
12 we have not had the opportunity to, you know,
13 cross-examine anybody about those exhibits, I'm not sure
14 they have been authenticated.
15 Now, there are cases where there have been
16 depositions taken. And in those situations, we have had
17 the opportunity to cross-examine someone about whatever
18 documents were produced by plaintiff.
19 And what I would like to do, I guess, is
20 reserve -- make a blanket hearsay obJection. I am
21 happy -- we got these things yesterday, we have not been
22 able to go through them all. I would like to reserve my
23 right to submit specific ob,lections on the grounds of both
24 relevance and hearsay to the non-Harleysville documents.
25 Certainly we would concede and accept Plaintiffs counsel's
176
~ ~
1 representations that the Harleysville documents came from
2 our files, And I think they are entitled to us e those.
3 It also sounds like there are a variety of
4 different affidavits or verifications in these files. I
S think that was an issue discussed at a pretrial conference
6 before your Nonor, And it is the whole reason that we
7 went -- had over 30 depositions, I believe, in the last
8 two weeks in this case, because of our concerns over the
9 nature of these verifications. And some of the m seem to
10 be inaccurate. We haven't had an opportunity t o look at
11 the witness and so on. So I would again object to the
12 verifications.
13 Insofar as their summary information, it is
14 difficult to comment on that. If it has satisfied the
15 Pennsylvania Rules with respect to summaries, I don't have
16 a problem with it. I think this is a case that both or
17 all parties are trying very hard to summarize things.
18 So I have those general objections to
19 Exhibit 19 and would love to establish some sort of
20 calendar or schedule wherein we could get our specific
21 objections before the court.
22 With respect to Exhibits --
23 THE COURT; Well, let's take them one at a
24 time. The substance of your objection to 19 is that it
25 contains some hearsay and you haven't had a chance to
177
•
1 cross-examine on it. Is that the essence of it?
2 MR. KERR: And possibly relevance. But
3 those are the essence of it, yes.
4 THE COURT: At least one reference was made
5 to Social Security documents in a file. Are you obJectiog
6 to the admission of such documents as those?
7 MR. KERR: If they come from the Social
8 Security Administration, I think they are probably
9 admissible under the government records hearsay obJection,
10 and I would concede that they would have relevance.
11 But if it is a note from the mother saying
12 I believe -- or a note from a wife saying I believe my
13 husband was earning $139.00 in Social Security, then I do
14 obJect to it. So I don't know what the nature of the
15 Social Security information was.
16 THE COURT: Well, I am Just trying to
17 determine if you obJect to any government documents that
18 are in these files.
19 MR. KERR: I do not, your Honor. I believe
20 they are entitled to be in there under our government
21 records exception to the hearsay rule.
22 THE COURT: Okay. Do you want to respond
23 to his obJection?
24 MS. SHUMAN: Please, your Honor, every one
25 of these documents have previously been provided to
178
1 Harleysville through discovery. There is no document here
2 that Harleysville has not had before.
3 We have taken 30 depositions. Harleysville
4 identified every claimant that it wished a deposition to
5 be taken on. Those depositions were scheduled and held.
6 The documents in these files concerning
7 wage information are precisely the kind of document on
8 which Harleysville regularly relied in making its
9 determinations with regard to work loss payment.
10 In a technical sense, your Honor, there is
11 no question that there is an issue of hearsay. But these
12 are the kinds of documents that Harleysville has regularly
13 accepted.
14 They have had an opportunity to depose
15 anyone, any claimant, any employer, anyone they wished in
16 this action. We don't believe that there is a real issue
17 as to the relevancy of these documents, because they deal
18 with precisely the information that Harleysville said it
19 never knew and was ,lust the basis for why they didn't pay
20 wage loss benefits in the first place.
21 The case of Campanas vs Nationwide was a
22 post mortem work loss class action law suit. In that
23 case, the Superior Court held that in class actions such
24 as this, the evidence is largely documentary because that
25 is the nature of these kind of claims.
179
• •
1 And it is our belief that all of those
2 documents are relevant with regard to the issue of the
3 verifications. All of those verifications were provided
4 to Harleysville.
5 When depositions were taken, Harleysville
6 introduced in each deposition the verification signed by
7 the relative, asked the relative if he signed it, the
8 relative said yes. Harleysville attached it as an exhibit
9 to the deposition --
10 THE COURT: Well --
11 MS. SHUMAN; I don't see what their
12 obJection is at this point.
13 THE COURT: All right. If the case you
14 Just cited me has eased the evidentiary rules in some
15 fashion, I will certainly be looking at that. But it does
16 me little good to argue generally the documents right now
17 when I will receive the most benefit of arguments on a
18 case by case basis. So subJect to valid hearsay
19 obJections, and subJect to relevancy on a case by case
20 basis, Exhibit 19 is admitted.
21 Next.
22 MR. KERR: Thank You, your Honor. With
23 respect to -- we have no obJection to Plaintiffs' Exhibit
24 16.
25 THE COURT: That is admitted.
180
• •
1 MR. KERR: With respect to -- and we have
2 no obJection to Plaintiffs' Exhibit 15, which was --
3 THE COURT: That is admitted.
4 MR. KERR: With respect to Exhibits 17 and
5 18, with the understanding that they are summaries -- and
6 I think we have explored some of the problems with the
7 summaries and the weight that they are entitled to -- we
8 have no obJection to 17 and 18.
9 THE COURT; 17 and 18 are admitted.
10 MS. SHUMAN: The plaintiffs rest their
11 case-in-chief, reserving the right to call rebuttal
12 witnesses, if necessary.
13 THE COURT: Pardon me? I couldn't hear
14 you, ma'am.
15 MS. SHUMAN: No, I am sorry, your Honor.
16 The plaintiffs rest their case-in-chief reserving the
17 right to call rebuttal witnesses if that should prove
18 necessary,
19 THE COURT: You don't have to reserve that.
20 MS. SHUMAN: All right.
21 MR. KERR: One point I forgot to make, your
22 Honor, and I have trouble grappling with the omnibus
23 nature of Exhibit 19, I ga ther the transcripts of the
24 depositions are in there. There are certain portions of
25 those transcripts -- and w e can wait to go through it on a
181
•
•
1 specific case by case basis -- that we believe are
2 obJectionable because they contain hearsay evidence.
3 Now, I can either read those obJections now
4 or wait until we go through on a case by case basis and
5 make those ob.lections at that time. But there are
6 portions of those transcripts which we contend are
7 obJectionable in certain of the t~~~iscripts, I would Just
8 like to reserve the right to ob,iect to those at whatever
9 the appropriate time is.
10 THE COURT: Well, I had considered you had
11 reserved the right to obJect to hearsay and relevance.
12 And we will cover this case by case.
13 We will take a short recess.
14 (Whereupon, a recess was taken.)
15 THE COURT: Sir.
16 MR. KERR: May it please the court, I
17 wanted to take a brief opportunity to provide the court
18 with a road map of Harleysville's case.
19 This action has been brought against
20 Harleysville by a class of the estates consisting of
21 approximately 135 of Harleysville's insureds who were
22 fatally inJured in automobile accidents.
23 Approximately half of the class members are
24 alleging that they have not been paid the full work loss
25 benefits of $15,000.00 provided them under the No-Fault
182
• •
1 obJections at that time. But there are portions of those
2 transcripts which we contend are obJectionable in certain
3 of the transcripts. I would Just like to reserve the
4 right to obJect to those at whatever the appropriate time
5 is.
6 THE COURT: Well, I had considered you had
7 reserved the right to obJect to hearsay and relevance.
8 And we will cover this case by case.
9 We will take a short recess.
10 (Whereupon, a recess was taken.)
11 THE COURT: Sir.
12 MR. KERB: May it please the court, I
13 wanted to take a brief opportunity to provide the court
14 with a road map of Harleysville's case.
15 This action has been brought against
16 Harleysville by a class of the estates consisting of
17 approximately 135 of Harleysville's insureds who were
18 fatally inJured in automobile accidents.
19 Approximately half of the class members are
20 alleging that they have not been paid the full work loss
21 benefits of $15,000.00 provided them under the No-Fault
22 Act. They are seeking to recover those work loss benefits
23 or a portion of them allegedly due as well as 18 percent
24 interest and attorneys fees.
25 The other half of the class received the
183
• •
•
1 full 15,000.00, but are claiming that it was not paid in a
2 timely fashion. And they are seeking interest and
3 attorney fees.
4 The class action is based on the theory
5 that there is a class of similarly situated claimants who
6 have not been paid full benefits due to a conscious policy
7 of Harleysville of avoiding payment of work loss benefits.
8 Harleysville will demonstrate that the
9 class of unpaid claimants is not a group of similarly
10 situated persons who have the same legal and factual
11 questions at issue. Rather while they can be grouped into
12 approximately 19 different categories, within each
13 category each case must be considered on both its
14 individual factual and legal bases.
15 More importantly, as a result of the end of
16 the testimony and evidence, Harleysville will have shown
17 that it never had a deliberate policy of avoiding payment
18 to work loss claimants or to any other group of insureds.
19 It is readily apparent that the No-Fault
20 Act has been interpreted in many different ways by the
21 various Pennsylvania courts over the past several Years.
22 Often a trial court, or even in the
23 Superior Court, the court would interpret the statute one
24 way only to be reversed later on by a higher court.
25 Therefore the insurance companies had to constantly adJust
184
• •
1 their payment policies to keep up with the current status
2 of the law.
3 Although Harleysville did revise its
4 policies in response to the various decisions that were
5 coming down, the unavoidable result was that from time to
6 time a practice which had been correct and proper one
7 month was incorrect the following month.
8 The evolution of Harleysville's payment
9 policies is described in the testimony of Carl Anthony
10 Maio in his direct testimony in the Gregory case. And
11 that transcript has already been made a part of the record
12 of this case.
13 Mr. Maio described, for example, how
14 Harleysville initially did not pay No-fault work loss
15 benefits to survivors of deceased insureds. That policy
16 was upheld by five trial courts initially.
17 Eventually on April 12, 1979, the Superior
18 Court in Heffner reversed the trial court and held that
19 survivors could receive work loss benefits as well as
20 survivors benefits. Harleysville di,d not alter its policy
21 at that time, but rather waited to see what the Supreme
22 Court of Pennsylvania would do.
23 And on September 22, 1980, the Supreme
24 Court affirmed the Superior Court in Heffner. At that
25 time, Harleysville in good faith altered its policy to
185
• •
1 reflect its understanding of the Heffner decision and
2 began paying work loss benefits in appropriate cases.
3 Then there was the Pontius court which had
4 been part of the Heffner decision, and on remand in late
5 April 1981, that trial court interpreted the Heffner
6 decision to mean that a setoff of survivors benefits was
7 permitted against the work loss benefits. In other words,
8 q credit of $5,000.00 could be taken.
9 Accordingly, Harleysville subsequently
10 altered its policies to take advantage of the setoff
11 decision, believing in good faith that this was now the
12 proper and correct way to pay work loss benefits.
13 I won't summarize all of Mr. Maio's
14 testimony, but one will see upon examining that testimony
15 that eventually he goes through the various court
16 decisions that came through.
17 And eventually in November of 1982,
18 Harleysville dropped its setoff policy and resumed paying
19 the full $15,000.00 work loss benefits whenever maximum
20 benefits had been earned, even though there was no
21 appellote court decision at that time requiring that.
22 There are numerous other examples of that
23 and I won't go through them all,
24 One possibility is obviously the lump sum
25 payment issue. Initially the statute certainly seems to
186
•
1 provide that payments for work loss be made on a monthly
2 basis, That is how Harleysville did it. Several Superior
3 Court decisions upheld that.
4 Later the Superior Court began to talk
5 about lump sum payment amounts. Eventually the Supreme
6 Court in Campanas seemed to say that monthly periodic
7 payments were correct again.
8 The point to be drawn from Mr. Maio's
9 testimony is that the law was in flux and Harleysville
10 attempted throughout the respond to that flux.
11 Now, while the changes of the law were
12 greatly affecting HarleYsville's policies in paying
13 No-fault claims, an equally important factor was obviously
14 the requirement that each claimant factually prove his or
15 her other claim. In other words, what were the facts of
16 each of the claims. And that is what we are here to hear
17 evidence about today in the Coleman case.
18 Aside from Mr. Maio's testimony,
19 HarleYSVille's case-in-chief will consist of its response
20 to request for admissions, which are already part of the
21 record, various summary charts of the claims, documents
22 from the claims files and the testimony of two
23 individuals.
24 First will be Mr. Ernest Gaugler, who is
25 Assistant Secretary of Underwriting from Harleysville.
187
• •
1 And he will be talking about only one claim, the Hilpert
2 claim, which is a claim that Harleysville contends is a
3 situation where the policy was not in effect at the time
4 the death occurred.
5 Mr. Julian 'Hagan, who the court has already
6 heard as part of plaintiffs case, will be Harleysville's
7 other live witness. And he, as the court already knows,
8 is the Assistant Secretary of Claims.
9 He has spent time trying to become familiar
10 with these claims files. And he will testify as to
11 various documents and the reasons for why Harleysville
12 took the action that it did with respect to these claims
13 as best as can be determined from the files.
14 Now, the reasons will be numerous. As I
15 stated, Harleysville has tried to break them down into
16 several different categories.
17 With respect to the nonpayment, the ones
18 where full payment has not been made, Harleysville has
19 nine separate categories. First is paid in full, where
20 Harleysville will demonstrate from the claims file and Mr.
21 Hagin's testimony that the case or the claim has been paid
22 in full, either under another state's No-fault law or in
23 Pennsylvania.
24 The second category are claims that have
25 been settled. Now, the vast majority of those cases are
188
• •
1 claims where the claimant was represented by counsel and a
2 negotiation occurred between Harleysville and that
3 counsel, a release was signed, but in most cases, not
4 approved by the court.
5 The third category are cases where
6 Harleysville will contend that the claimant is not covered
7 by work loss. Either a workmans -- in other words, one of
8 them is a Workmans' Comp case, in our view. Another one
9 would be the Hilpert case that I mentioned, where the
10 policy has been canceled.
11 The fourth category is where the claimant
12 is insured by another carrier.
13 The fifth category is where the death was
14 not caused by use of an automobile.
15 The sixth category is there is no claims
16 file and Harleysville cannot verify the accuracy of the
17 claim. If the claim was ever made, no PIP form was ever
18 filed, no verification of wages.
19 A seventh category is cases where the
20 claimant decedent would not have earned $15,000.00. There
21 are a couple of those where we feel the earning capacity
22 is really at issue, or someone was so elderly that even
23 under the Life Tables that have been introduced, they
24 would not have lived long enough to earn the full
25 $15,000.00.
189
• •
1 The eighth category are cases where we
2 believe the claim is barred by the statute of limitations.
3 And the ninth category are the setoff
4 claims that I have already mentioned.
5 Now, the tenth category has got a lot of
6 subcategories. And the ten categories refers to all of
7 the claims where full work loss benefits have been paid
8 with respect to the $15,000.00, but there is a dispute to
9 whether or not interest is owed.
10 And so in this tenth category we have many
11 different aspects of that category. Again, they break
12 down to either we believe we have paid the full interest,
13 we believe that no interest is owed because it was -- work
14 loss was paid in periodic payments, or no interest was
15 owed because work loss and survivors benefits were paid in
16 periodic payments, no interest is owed because we paid
17 promptly upon receipt of the amount of the loss. We
18 couldn't start paying until we had the wage verification,
19 or we hadn't had reasonable proof of claim.
20 The next category would be we didn't have
21 any notice to whom to pay the claim. And as soon as we
22 finally received the notice, we paid it then, and
23 therefore no interest was due.
24 In some of the interest cases, we believe
25 the claim for interest was settled. Some of the interest
190
• •
1 claims we believe are barred by the statute of
2 limitations.
3 And some of them we believe the interest
4 isn't owed because the claimant is a child, not earning
5 income. And, finally, some of them we believe interest is
6 not owed because there is some sort of coverage dispute.
~ We believe once the court has examined
8 those cases, that the preponderance of the evidence will
9 show that Harleysville's denials of these claims were
10 properly made at the time, that Harleysville throughout
11 acted in good faith in its processing of these No-fault
12 claims, and that Judgment should be entered for
13 Harleysville.
14 THE COURT: Let me ask you, sir, does
15 Harleysville admit to owing any money?
16 MR. KERR: Yes, your Honor.
17 THE COURT: And will I find out as we go
18 along or is there some ma,ior exhibit which outlines --
19 MR. KERR; There is an exhibit which
20 outlines -- and perhaps I didn't understand the court's
21 question -- we certainly have paid into court -- there are
22 11 claims where we have paid into court work loss benefits
23 which we concede are owed.
24 We said yesterday that we conceded the -- I
25 believe it was the Hutton case. And the remaining cases,
191
•
1 I believe it is Harleysville's position -- and if I am in
2 error, it will be reflected on a summary chart -- I
3 believe we are contesting the other claims.
4 THE COURT: All right, sir. Go ahead.
5 MR. KERR: Mr. Gaugler.
6 MR. KERR: Your Honor, I obviously have the
7 same logistical concerns, and I want to provide whatever
8 is easiest for the court.
9 We have Harleysville's potential exhibits
10 in five notebooks here, which I would like to present to
11 the court so that I am not handing, taking unnecessary
12 time handing up an exhibit at each -- when each exhibit is
13 presented, if that would be convenient with the court.
14 THE COURT: And these have all been given
15 to plaintiffs' counsel?
16 MR. KERR: Yes, they have, your Honor.
17 Whereupon,
18 ERNEST R. GAUGLER
19 having been duly sworn, testified as follows:
20
21 THE COURT: Are they in any particular
22 order?
23 MR. KERR: They are in numerical order. In
24 other words, the first book would be 1 through D-50. And
25 the number is marked on each one so that as we are
192
• •
1 referring to a particular numbered exhibit, hopefully the
2 court will be able to find it within a minimum amount of
3 inconvenience.
4
5 DIRECT EXAMINATION
6 BY MR. KERR:
7 Q Mr. Gaugler, by whom are you employed?
8 A Harleysville Mutual Insurance Company
9 group.
10 THE COURT: What is your full name, sir?
11 THE WITNESS: Ernest, E-r-n-a-s-t, middle
12 initial R, Gaugler, G-a-u-g-l-e-r.
13 BY MR. KERR:
14 Q What is your position with Harleysville,
15 sir?
16 A Assistant Secretary Underwriting.
17 Q Would you briefly describe for the court
18 what your duties and responsibilities are as Assistant
19 Secretary Underwriting?
20 A My duties mainly consist of making
21 underwriting policy for the commercial lines of
22 Harleysville that we, we make available to our agents --
23 to our policyholders.
24 Q How long have you been with the company?
25 A Since 1956.
193
•
1 Q How long have you been in the underwriting
2 aspect of the company?
3 A Most of my entire career.
4 Q How long have you been Assistant Secretary
5 of Underwriting?
6 A Since 1980.
7 Q As Assistant Secretary, were you an officer
8 of the company?
9 A Sir?
10 Q As Assistant Secretary, are you an officer
11 of the company?
12 A Yes, sir.
13 Q Have you had occasion to review a file
14 related to Ludwig Hilpert?
15 A Very generally.
16 Q Placing in front of you a document which
17 has been marked as Defendant Exhibit Number 186 for
'18 purposes of identification, can you describe that
19 document, sir?
20 A This is the Home Office copy of a business
21 automobile policy issued to Ludwig Hilpert and Eli
22 Construction Company as their interest may appear,
23 produced by our agent, Lewis Brothers of Havertown,
24 Pennsylvania.
25 Q Now, you said it was a business automobile
194
• .
1 policy. Are there different sorts of automobile policies?
2 A Yes. Automobile policies can be personal
3 automobiles, which policies which would be for
4 non-businesses, and then business automobile for various
5 types of businesses.
6 Q As Assistant Secretary of Underwriting, are
7 you familiar with the renewal policies of Harleysville
8 with respect to commercial line or business automobile
9 policies as they existed in 1979 and 1980?
10 A Yes, sir.
11 Q Could you please briefly describe what
12 those renewal policies were for the court?
13 A In the instance at hand, this policy was
14 issued on September 19th by our general agency in Trappe,
15 Pennsylvania. And the policy then would have been mailed
16 to the producing agent, which is Lewis Brothers, and Lewis
17 brothers would have been responsible for collection of the
18 premium from the policyholder.
19 Q What was the policy period of this policy?
20 A The policy period as protected here is
21 October 10, 1979, to October 10, 1980, with a premium due
22 due of $928.00.
23 Q What would your -- in September or October
24 of 1980, would Harleysville do anything with respect to
25 the renewal of that policy?
195
•
1 A Well, the billing of the policy would be
2 made through our general agency who then would bill the
3 producing agency or the agent who had the contact with the
4 policyholder, Lewis Brothers. And the agent would be
5 billed the amount of this premium by Harleysville.
6 Q At this time I am placing in front of you a
7 document which has been marked for purposes of
8 identification as Defendant Exhibit Number 189. Can you
9 identify that document, sir?
10 A This appears to be the notice of the
11 premium due from the agent, Lewis Brothers, to the
12 policyholder, Ludwig Hilpert, specifying that the renewal
13 policy has been sent with a bill due in the amount of
14 $928.00. It also states that the premium is to be paid
15 prior to November 1, 1979.
16 Q I'm now placing in front of you a document
17 which has previously been marked for purposes of
18 identification as Defendant Exhibit Number 188. Can you
19 descriu~ w~~at that document is, sir?
20 A This would seem to appear that the policy
21 was reJected by the policyholder and returned to the
22 company by the agent. And the indication here that it was
23 not accepted for various reasons. So that the pO11Cy was
24 never in force, according to this.
25 Q Finally, I am placing in front of you a
196
1 document which has previously been marked for purposes of
2 identification as Defendant's Exhibit Number 185.
3 A All right, as I indicated earlier,
4 Harleysville would have billed the agent the amount of the
5 premium of $928.00. And this is an internal coding
6 mechanism which would have removed the billing of $928.00
7 from the agent's account.
8 Q In that box that says return premium, what
9 does that mean?
10 A Where are you --
11 Q Near the upper portion of the document.
12 A Return premium would be the amount that
13 would be returned or credited to the agent's account,
14 which is the full amount of the policy or $928.00. Which
15 would indicate there was no coverage extended. Otherwise,
16 a portion of the premium would have been retained by
17 Harleysville.
18 Q Directing your attention again to the first
19 exhibit we looked at, which was Defendant Exhibit Number
20 186, based upon your review of the file, was that policy
21 in effect on November 2, 1979?
22 A From the documents that I have before me,
23 the answer would have to be no, there was no premium or
24 consideration paid on the policy.
25 MR. KERR; I have no further questions of
197
~ •
1 this witness.
2
3 CROSS-EXAMINATION
4 BY MS. SHUMAN:
5 Q Mr. Gaugler, did you ever contact the Lewis
6 Brothers agenc y, the Harleysville agent, on this file?
7 A No, ma'am.
8 Q To the best of your knowledge, did anyone
9 at Harleysvill e ever contact Lewis Brothers?
10 A Back in 1979?
11 Q At any time, sir.
12 A I couldn't testify to that.
13 Q But you know you haven't prior to coming to
14 testify here?
15 A I have not contacted Lewis Brothers, no,
16 ma'am.
17 Q Are you aware of the regulations that
18 govern keeping policies in force beyond deadlines?
19 A I am not sure specifically what you are
20 addressing.
21 Q Well, are you aware that there are
22 regulations as to notice that must be provided before a
23 policy can be canceled for nonpayment, for instance?
24 A There has been some recent regulations
25 promulgated by the Insurance Department on notice prior to
198
• •
1 renewal and change of premium and things like that. But
2 back in 1979, those regulations were not in effect.
3 Q Are you aware of the regulations that were
4 in effect at that time, sir?
5 A I believe so. I don't know specifically
6 what you are driving to though.
7 Q In the regulations that were in effect in
8 1979, isn't it true that a claimant had 30 days -- what
9 has been cal led a grace period -- in which to make payment
10 on his polic y and if it wasn't paid during that time it
11 would be can celed?
12 A I don't think there is any regulation to
13 that effect. The agent may extend credit for a period of
14 time beyond the effective date if the agent so chooses.
15 Q All right --
16 A But the premium is due, or at least a
17 portion of t he premium is due as of the effective date.
18 Q Let's deal with that issue. Mr. Kerr
19 showed you a letter dated October 23, from the agent to
20 Mr. Hilpert, is that correct?
21 A Yes.
22 Q And that letter, as he indicated in his
23 question to you and you indicated in your answer, provided
24 that payment should be made by November 1, is that
25 correct?
199
1 A That is correct.
2 Q I am showing you a document contained in
3 the Hilpert trial f ile as the second document.
4 MR. KERR: Your Honor, could we have a
5 pause for a minute so we can find what the second document
6 is in our fi le? .
7 THE COURT: Yes.
8 MR. KERB: I have it, Your Honor.
9 BY MS. SHUMA N:
10 Q And that is a letter dated November 1,
11 1979, isn't it, Mr. Gaugler?
12 A The letter I am looking at is dated October
13 23, 1979.
14 Q Okay, I am asking You to look at the second
15 document in the tri al file, it is a letter dated November
16 1, 1979, isn't it?
17 A It i s dated November 1, 1979, that is
18 correct.
19 Q And it is a letter addressed to Mr. Hilpert
20 from Ellwood Lewis, is that correct?
21 A Yes, it is.
22 Q And Ellwood Lewis is with the Lewis
23 Brothers Agency in Havertown, is that correct?
24 A I am not sure about that. But I am not
25 sure of the agency make up. We have many, many agents. I
200
1 am not sure of the make up of the agency,
2 Q And the letter is -- this is regarding an
3 auto policy and then it has a number. Is this Mr.
4 Hiipert's policy number?
5 A Yes.
6 Q And the effective date of the policy,
7 10/10/79, is t hat correct?
8 A Yes, that is correct,
9 Q You indicated earlier an agent could extend
10 the effective date of the policy by an agreement with the
11 insured, is th at correct?
12 A Well, not extending the effective date.
13 Q Extend the time in which to pay a premium?
14 A But the premium is due as of the effective
15 date, in this case October 10, 1979.
16 Q Did you indicate earlier that an agent
17 could extend a date for receipt of the premium on that
18 policy?
19 A An agent may extend credit if he so
20 desires, that is correct.
21 Q And in the lest paragraph of this letter,
22 does it say if you wish to continue coverage, we must have
23 the check in this office prior to November 9, 1979?
24 A That is correct.
25 MS. SHUMAN: Mr. Kerr, will you stipulate
201
~ •
1 that Mr. Hilpert died as a result of a motor vehicle
2 accident on November 2, 1979?
3 MR. KERR. I will,
4 MS. SHUMAN: I have no further questions,
5 thank you,
6 MR. KERB; One question, sir.
7
8 REDIRECT EXAMINATION
9 BY MR. KERR.
10 Q To your knowledge, did Harleysville ever
11 receive a check with regard to this renewal policy?
12 A Well, the policy is billed through the
13 agency and the agency would collect a premium from the
14 policyholder, Mr. Hilpert. But from what I see here,
15 there was never any premium paid apparently by Mr.
16 Hilpert. And that is why we were crediting or did credit
17 the agent the full amount of 928. It would be indicative
18 that there was never any premium paid and no coverage
19 granted,
20 MR. KERR: No further questions.
21 Your Honor, at this time I would like to
22 move the admission of Exhibits 185, 186, 188 and 189 so
23 that this witness could be excused.
24 THE COURT: Ma'am?
25 MS. SHUMAN: I have no obJection,
202
•
1 THE COURT: Defendant Exhibits 185, 186,
2 188 and 189 are admitted.
3 You are not offering 187?
4 MR. KERR: We are not, Your Honor.
5 THE COURT: All right. May the witness be
6 excused?
7 MS. SHUMAN: That is fine.
8 THE COURT: Thank you, sir. You may be
9 excused.
10 THE WITNESS: Thank you.
11 MR. KERR: Harleysville calls Mr. Julian
12 Hagin.
13 THE COURT; Just a moment.
14 Whereupon,
15 JULIAN S. HAGIN
16 having previously affirmed, testified as follows:
17 DIRECT EXAMINATION
18 BY MR. KERR:
19 Q Mr. Hagin, I believe yesterday you already
20 ~ identified your position with the company for the court,
21 but I would like you to briefly describe what your duties
22 and responsibilities as Assistant Secretary of Claims are.
23 A My duties are basically in charge of
24 No-fault throughout the company, life insurance claims
25 throughout the company, and New Jersey, also liability.
203
• •
1 Q How long have you held that position with
2 the company?
3 A Assistant Secretary?
4 Q Yes.
S A Since April '84.
6 Q I believe you testified yesterday that
7 prior to that time you were with the Philadelphia office?
8 A I was -- I was with the Philadelphia office
9 until January of '82. And in January of '82, I became
10 manager of the Harleysville office, Harleysville branch
11 office. And t hen in July '83 I went to the home office as
12 a unit manager .
13 Q How long have you been with the
14 Philadelphia o ffice?
15 A 19 years.
16 Q When you left the Philadelphia office, what
17 were your duti es and responsibilities, what was your
18 position?
19 A In Philadelphia?
20 Q Yes.
21 A District claim manager.
22 Q What are the duties and responsibilities of
23 the District Claims Manager?
24 A Generally supervise the processing of
25 claims in that particular area, which also includes a lot
204
• •
1 of other things, budgeting, performance of the people.
2 Q Could you also give the court a brief
3 history of your educational background?
4 A I have a business administration degree
5 from Lansdale Business School.
6 Q And did you -- when did you obtain that
7 degree?
8 A 1952,
9 Q How long have you been with the
10 Harleysville Insurance Company in some capacity or
11 another?
12 A Since June of 1954,
13 Q Let's begin, I would like to have you
14 describe for the court in general terms Your understanding
15 of how a No-fault claim should be processed and was
16 processed at Harleysville in a death case?
17 A An acord form, or what we call an accident
18 report, generally is submitted by the agent. There are
19 various other ways to get a report, could be by telephone,
20 a letter, very rarely in person. But --
21 Q Let me interrupt one second, when You said
22 an agent, could you describe, is an agent an employee of
23 Harleysville? What is an agent?
24 A An agent is an independent contractor
25 who -- with our company an agent is an independent
205
• •
1 contractor who represents -- well, he could represent many
2 companies. I have no way of knowing how many. But they
3 are not sales agents exclusively for our company. So they
4 sell for many companies.
5 Q I apologize for the interruption. You were
6 describing this acord form which was submitted by the
7 agent, please continue.
8 A An agent would submit an acord form. The
9 acord form would be reviewed by someone in the office of
10 some responsibility. It could be the manager himself. It
11 could be a supervisor or some designee who was trained to
12 know what to look for and how to process it.
13 So the form would be reviewed basically to
14 determine what kind of a claim it would be, and then he
15 would -- he or she would assign that to some individual in
16 the office, some claim representative to ionvestigate and
17 handle, as it were.
18 Q What would be the purpose of the
19 investigation?
20 A Well, the important -- I will try to do it
21 in chronological sequence. The first thing the
22 investigator would do would be to verify coverage to
23 verify the dates of the policy to see that it was a -- we
24 refer to it as a live policy, which means it is in effect
25 and not canceled or whatever.
206
• •
1 He would investigate the facts. This could
2 be done in person, by phone, again correspondence.
3 However he determines the most expedient way.
4 If it were a No-fault claim, the clerks
5 automatically -- well, I am not sure it would be
6 automatic, but I think the claims people, the claims
7 person, the investigator, would indicate to the clerks the
8 forms that they should process.
9 Maybe depending on what kind of claim he
10 thought it might be from reviewing the acord form. He
11 might instruct the clerical people to send a PIP form. A
12 PIP form we refer to as an application for No-Fault
13 benefits.
14 He might instruct -- depends on what is on
15 the acord form. And then when the application comes in,
16 he would look at that to determine whether there was
17 additional investigation to be done.
18 Depending on what is on the application, he
19 might ask the clerical staff to forward wage verification
20 forms to the employer if the employer is indicated. Or if
21 there is no indication of employment, he might ask that a
22 medical form be sent to a doctor and/or a hospital. Or he
23 might proceed with whatever investigation he felt was
24 necessary, based on the information on the PIP form.
25 Q Would he review the PIP form to see whether
207
• •
1 it was complete?
2 A Certainly.
3 Q And what would he do if it wasn't complete?
4 A Depending on the type of claim, he might
5 write a letter to the individual that completed it or if
6 he doesn't -- sometimes it comes in unsigned so You don't
7 know who completed it.
8 But he would take whatever action was
9 necessary to obtain additional information. It could be
10 correspondence, it could be telephone. Or he might return
11 the PIP form to whomever and ask them to complete it.
12 Q Then what would happen after the PIP form
13 was completed?
14 A If the forms were completed properly -- and
15 we are talking about wages here -- so if there is an
16 indication on the form that the person that -- maybe there
17 was an inJury or a fatality, then he would look to see if
18 there was an indication on the form of who the employer
19 was, the wages, the hourly or however. Then he would
20 forward a wage verification form to the employer.
21 Q Would Harleysville paY under its policy, as
22 You understood it, pay work loss benefits before it had
23 received the wage verification?
24 A No.
25 Q Were there other documents that were
208
• •
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
necessary for the completion of an application for wage
loss benefits in a death case?
A There would be -- the next is a death
certificate, letters of administration, so we would know
who to pay, if you determine that the person was covered.
Q Then what would happen once all of those
various forms have been assembled?
A Depending on when, you know, as you stated
earlier, the flux of the law, sometime we would pay in
periodic payments, we would begin those payments and if it
were a lump sum, we would pay a lump sum.
Q Would a file have been established, a
claims file?
A Oh, yes, initially.
Q When would the claims file be established?
A When the acord form would come in.
Q And who made the determination as to
whether or not a particular claim should be paid?
A Well, each claim representative or adjuster
had a certain amount of authority, In fact, all claims
employees -- well, all claims technical employees have a
certain amount of authority. That authority is generally
described as draft and settlement authority, meaning that
that person has the authority to make a determination
whether or not the claim should be paid. And if so, if it
209
•
1 is within his authority dollarwise, he can go ahead and
2 make the payment.
3 Q And if it is not within his or her
4 authority, is there somewhere he or she can go to obtain
5 the next authority?
6 A They go to the next level of authority
7 which generally is the supervisor, and if it is above a
8 supervisor's authority, it would go to the assistant
9 manager and then to the manager and then to home office.
10 Q Now, in connection with your
11 responsibilities as Assistant Secretary of Claims, have
12 you had occasion to review Harleysville's claims files for
13 the claimants in this litigation?
14 A Yes.
15 Q I am going to place in front of you copies
16 of four exhibits, which have been marked previously for
17 purposes of identification as Defendant's Exhibits Number
18 601, 602, 603, and 604.
19 Q Starting with Defendant Exhibit Number 601,
20 could you identify what that is?
21 A It is a list of the categories of -- we
22 placed each claim in a category. We tried to categorize
23 each one into -- some of them are in more than one
24 category, but we tried to place it in -- well, all right,
25 it is a list of claimants or rather a list of categories
210
• •
1 used to identify the various reasons why a claim is not
2 paid or whether it was-paid or settled or whatever.
3 Q Very briefly, Just running down, could you
4 identify what the categories are?
5 THE COURT; I don't think that is
6 necessary. Is it?
7 MR. KERR: I guess that is fine.
8 BY MR. KERR:
9 Q What is Defendant's Exhibit Number 602?
10 A The -- this is a category of claimants.
11 And each person is named -- each decedent is named under
12 the category. The category being underlined. And some of
13 these decedent s are listed in more than one category.
14 Q And Defendant Exhibit Number 603, what is
15 that?
16 A 603 is a 11~t ~f all the claimants by
17 category. Now , as an example, the first one, ALS 01.0 and
18 10.9.
19 A So the categories that are listed in -- is
20 the first one listed there, in this case 01.0.
21 Q By category, you mean the first number that
22 comes first?
23 A Exactly. And they are only listed once on
24 this sheet -- or on this exhibit, rather.
25 Q And what is Defendant Exhibit Number 604?
211
1 THE COURT: They are not in any particular
2 alphabetical order, are they, sir?
3 THE WITNESS: Not in 603. They are in
4 alphabetical order in each category.
5 Look ing at 603 --
6 THE COURT: Well, excuse me. I see -- and
7 you start with the loss category, although each person may
8 be listed in severa l categories --
9 THE WITNESS: Right.
10 THE COURT: All right.
11 BY MR. KERR:
12 Q And Number 604?
13 A 604 is a list of each decedent and various
14 information pertain ing to this exhibit. And these are in
15 alphabetical order throughout.
16 Q Now, taking Defendant Exhibit Number 604,
17 could you lust take the first claimant that is listed,
18 Charles Ackley?
19 MS. SHUMAN; Your Honor, I have been
20 sitting here lookin g at these exhibits. And there are, as
21 Mr. Kerr well knows , a number of claims as to whom -- who
22 are not members of this class who are listed on these
23 exhibits -- the def ense has known are not members of this
24 class.
25 With regard to the Ackley claim, your court
a
212
•
1 entered an order back in May based on our agreement that
2 this claimant was not a member of the class, And yet we
3 are here with Mr, Kerr spending our time hearing about the
4 Ackley claim.
5 THE COURT: Well, the long and short of it
6 is, sir, you picked the wrong one to start with.
7 MS. SHUMAN: Well, there are a number on
8 all these exhibits, your Honor.
9 THE COURT: Aren't they superfluous?
10 MR. KERR: Your Honor, we have indicated
11 the ones that are withdrawn in Defendant Exhibit Number
12 602. We were unable to get them all out.
13 When we think they are withdrawn -- and
14 there has been a lot of question -- there are Mr.
15 Ackley -- I think there is a court order dealing with Mr.
16 Ackley. There have been a lot of letters --
17 THE COURT: Now, wait a minute. We are
18 getting entirely too many words in this record. If Ackley
19 is out, and somebody else is out, let's Just draw same
20 lines through this exhibit.
21 MR. KERR: We would be happy to draw those
22 lines, your Honor. We have tried to indicate it through
23 Defendant Exhibit Number 602. We would be happy -- I am
24 not going to spend any time putting any documents in on
25 Ackley. I am Just trying to explain -- have Mr. Hagin
213
•
1 explain what the categories are. But we left Mr.
2 Ackley --
3 THE COURT: Let's use a live claim.
4 MR. KERR. Fine.
5 BY MR. KERR:
6 Q Let's take, on Defendant Exhibit Number
7 604, let's take the second one, Mr. Ailes, Just going
8 across, sir, could you explain what the various columns
9 are?
10 A Okay. First column, of course, is the name
11 of the decedent. And the next line under that -- under
12 that column would be in parentheses, if known and if
13 available, would be the claim number that our company
14 assigned to that particular individual, when it originated
15 first.
16 The second and third line under that would
17 simply be the documents and those serial numbers that we
18 talked about earlier, that we placed on each document.
19 The next column, occupation and earnings,
20 if known. We tried to list the occupation of each person
21 and how much his earnings were.
22 Date of accident and death. Generally
23 the -- on the first page there at least, there is only one
24 date. But if you look at page 2, there are two dates,
25 which would mean the first date would be the date of
214
1 accident and the second date would be the date of death.
2 Q Are you referring, for example, to -- is
3 that Brian Boltz?
4 A Yes. THE COURT; These are basically work
5 sheets prepared by you and/or counsel in an effort to help
6 the court? Is that it?
~ THE WITNESS; Yes, sir.
8 THE COURT: All right.
9 THE COURT: Much in the same way plaintiff
10 has prepared work sheets.
11 THE WITNESS; Yes,
12 THE COURT: All right.
13 THE WITNESS: The next column, notice to
14 Harleysville, is the date we received notice initially of
15 this claim of the accident,
16 Date PIP application filed is the date
17 signed by the decedent, if there was a signature. And if
18 there were an application found. And in some places, it
19 will say none. And some it will say undated. Some it
20 will say illegible signatures, and that sort of thing.
21 Proof of loss date would be the date -- we
22 tried to identify the date on which we had the information
23 necessary to make a payment, if a payment were due.
24 Date interest due, we left that blank
25 except on a very few cases where it was clear. And then
215
• •
1 the category pertains and refers back to the earlier 601.
2 Amount paid is the amount paid according to
3 the file. And the next column would be the date those
4 amounts were paid.
5 And then some cases you will notice, if you
6 go to page 2, you will notice two dates. And that would
7 indicate periodic payments. And the first date would be
8 the date they started and the last date would be the last
9 payment.
10 And the last two columns were figures
11 provided by the plaintiffs.
12 MR. KERB; I should ,lust represent to the
13 court that the last two columns were based upon figures
14 that were provided during the course of the litigation.
15 They do not purport to be plaintiffs' final figures as
16 were represented this morning in, I believe it is
17 Plaintiffs' Exhibit 17. But this is -- we thought it
18 would be useful Just to have it all in one place. And
19 that was the claim as we best understood it at the start
20 of the --
21 THE COURT: What is the last number, sir?
22 MR. KERR; Under plaintiffs --
23 THE COURT: You have 66 at the end of the
24 Ailes line. What is that?
25 MR. KERR: Sir, I can represent that that
216
~ •
1 is a dated number -- that is a computer generated number,
2 it is a record number for each of these items.
3 THE COURT: I don't need to know it, do I?
4 MR. KERR; You don't need to know it. It
5 is a record number generated by the computer. For
6 example --
7 THE COURT; Okay.
8 MR. KERB: For the convenience of the
9 court, we wrestled for awhile with how to present this,
10 and we finally concluded that the best way to do it is
11 alphabetically. So that we are going to be going through
12 the claims about which we have exhibits and about which we
13 wish to offer testimony alphabetically. So that the
14 Defendant's Exhibit Number 604 will sort of be the road
15 map of where we are going.
16 As Ms. Shuman has already said, the Ackley
17 claim, as we understand it, has been withdrawn. So we can
18 properly draw a line through the Ackley claim.
19 BY MR. KERR:
20 Q I have placed in front of you a document,
21 sir, which has been marked as Plaintiffs Exhibit D -•-
22 MS. SHUMAN: You are the defendant.
23 BY MR. KERR:
24 Q I apologize, Defendant Exhibit D-5 for
25 purposes of identification.
217
• •
1 THE COURT: Let's take a recess as she has
2 to change her paper.
3 (Whereupon, a recess was taken.)
4 BY MR. KERR:
5 Q Mr. Hagin, what is Defendant Exhibit Number
6 5?
~ A It is an internal company memorandum from
8 the claim rep in our Philadelphia office to the supervisor
9 indicating that she had discussed the question of cause of
10 death with the Medical Examiners Office who confirmed that
11 the death was a result of the in,luries.
12 Q Was there any indication that the claim was
13 now ready for processing?
14 A Yes. She, to quote, she says I do believe
15 that we have a valid death claim and will begin to process
16 same.
17 Q Placing in front of you a document which
18 has previously been marked for purposes of identification
19 as Defendant Exhibit Number 6, what is that, sir?
20 A It is a copy of a letter from the claim
21 rep, claim representative, to Mrs. Constance Ailes,
22 inquiring whether Mrs. Ailes would be making a claim for
23 wage loss and asking for her request in writing,
24 Q And did Harleysville pay wage loss benefits
25 then to Mrs. Ailes to the estate?
218
• •
1 A Yes.
2 Q Of how much?
3 A 15,000.00.
4 Q And when was that paid?
5 A July 20, 1984.
6 Q When should that payment have been made?
~ Let me ask it another way, is it
8 Harleysville's position that any interest is owed --
9 MS. SHUMAN: I am going to --
10 BY MR. KERR;
11 Q -- is owed on this claim? '
12 MS. SHUMAN: I think you are leading.
13 THE COURT: Pardon me?
14 MS. SHUMAN; I am obJecting to the question
15 as leading. He started out is Harleysville's position,
16 that I think that is a leading question.
17 MR. KERR; I was asking what is
18 Harleysville' s position. I am trying to save some time.
19 THE COURT; All right.
20 THE WITNESS: Now, what, what is the
21 question?
22 BY MR. KERR:
23 Q The question is what is Harleysville's
24 position with respect to whether or not any interest is
25 owed to the Ailes estate?
219
• •
1 A Well, it appears that a decision was made
2 on June 29, '83, that it was a valid claim. And it was a
3 matter of getting whatever information was necessary after
4 that time. And it should have been done immediately.
5 Apparently it wasn't.
6 So apparently interest would probably be
7 due -- or the claim should have been paid June 29, '83, or
8 soon after. So interest apparently should be due 30 days
9 after that.
10 Q Placing in front of you a document which
11 has been previously marked for purposes of identification
12 as Defendant Exhibit Number 8 --
13 A Excuse me, when you are finished with one,
14 do you want me to keep it separate? I see this is a
15 different claim.
16 Q What -- Do you have Defendant's Exhibit
17 Number 8 in front of you, sir?
18 A Yes.
19 Q Do you have Defendant Exhibit Number 8 in
20 front of you, sir?
21 A Yes.
22 Q What is Defendant Exhibit Number 8?
23 A It is an accord form of an accident
24 involving Timothy Wayne Anderson, dated 1/2/81 indicating
25 that Mr. Anderson was killed in an accident on January 1,
220
• •
1 '82.
2 Q Does the form indicate anything about Mr.
3 Anderson's residence?
4 A It indicates he is a resident of
5 Smithsburg, Maryland,
6 Q What was Harleysville's policy with respect
7 to out of state residents and the payment of wage loss
8 benefits at the time Defendant Exhibit Number 8 was
9 received?
10 A I believe the No-Fault Act provided that a
11 decedent -- or rather a claimant for No-Fault benefits
12 should collect from the state in which he was a resident
13 if that state had No-fault -- had a No-Fault Act, So it
14 would have been our position that he would not have been
15 entitled to Pennsylvania benefits.
16 Q And was --
17 THE COURT: You are saying you apply
18 Maryland law --
19 THE WITNESS; Maryland --
20 THE COURT: -- to your policy --
21 THE WITNESS; Sure.
22 THE COURT; -- if the decedent is a
23 Maryland resident?
24 THE WITNESS: No, sir. He would -- if he
25 were covered in Maryland, then he would have to collect
221
n
u
1 under his own policy in Maryland.
2 THE COURT: I am not following this,
3 counselor.
4 MR. KERR: Your Honor, I think some of this
5 is obviously going to be a legal argument, which we will
6 be making at the time that it is appropriate to make a
7 legal argument. There was a decision in 1985, the
8 Rockford decision, which I don't mean to go into now. I
9 was Just trying to elicit, for in terms of evidence, Mr.
10 Hagin's understanding of what Harleysville's policy was
11 with respect to out of state residents in 1982.
12 THE COURT: When the Maryland resident died
13 in this case, Anderson, he was covered only by a
14 Harleysville policy, was he not?
15 THE WITNESS; Yes, your Honor. And in
16 response to your earlier comment on that, I was thinking
17 about him being an insured under Maryland policy with
18 someone else. He is an insured under our policy as a
19 Maryland resident and, yes, to your earlier question, he
20 would recover only the Maryland benefits provided under
21 the Maryland Act.
22 BY MR. KERR:
23 Q Was Mr. Anderson paid any No-Fault benefits
24 by Harleysville?
25 A He was paid -- or this is one -- oh,
222
•
1 Anderson, yeah, Timothy, this is one we paid the 15,000.00
2 into court.
3 Q On what date?
4 A April 14, 1989.
5 Q Placing in front of you two documents which
6 have previously been marked for purposes of identification
7 as Defendant Exhibits Number 9 and Defendant Exhibit
8 Number 10.
9 Directing your attention to Defendant
10 Exhibit Number 9, can you determine how much per hour Mr.
11 Barrett was earning?
12 A $4.00 an hour.
13 Q Placing in front of you a document which
14 has previously been marked for purposes of identification
15 as Defendant Exhibit Number 11 --
16 MS. SHUMAN: Excuse me, your Honor, I
17 believe Mr. Kerr placed in front of him Exhibit 9 and
18 Exhibit 10 before. My copies of those documents are that
19 they are the same document, Number 9 and Number 10.
20 MR. KERR: It is an error, your Honor, and
21 I am happy to withdraw Number 10. They are the identical
22 document. I Just noticed that.
23 MS. SHUMAN: I Just want to make sure I
24 wasn't missing anything.
25 MR. KERB: It is my error and I apologize.
223
•
1 That is why I only asked about 9,
2 BY MR. KERR:
3 Q Do you have Defendant Exhibit Number 11 in
4 front of you, sir?
5 A Yes.
6 Q What is Defendant Exhibit Number 11?
~ A It is entitled instructions for set up of
8 new file. I testified earlier about the processing of the
9 claim when it comes into the office, how a claim rep would
10 review it and give it to a clerk. And this is the form
11 that the claim rep completes and gives to a clerk
12 instructing the clerk how to establish this file.
13 Q Placing in front of you a document which
14 has previously been marked for purposes of identification
15 as Defendant Exhibit Number 12 --
16 THE COURT; Sir, why don't you Just saY I
17 give you D-12?
18 BY MR. KERR;
19 Q What is D-12, sir?
20 A It is an internal company memorandum from
21 the claim rep in our Pittsburgh office addressed to his
22 manager dated November 12, 1984,
23 Q Con you ascertain from D-12 as to whether
24 or not the estate was represented by counsel?
25 A Yes, he was, Attorney John H. Stetts, looks
224
• •
1 like S-t-e-t-t-s.
2 Q I give you D-14. What is D-14, sir?
3 A It is a -- it is a letter from the claim
4 rep in Pittsburgh to the attorney, Mr. Stetts, in which he
5 set payment for funeral benefits and requested additional
6 information on employment.
~ Q I give you D-15. What is D-15?
8 A A letter from the claim rep in Pittsburgh
9 to the attorney dated in March of 1985 still requesting
10 information on the wage verification.
11 Q Finally I give you D-13. What is D-13?
12 A An internal memorandum, company memorandum
13 from the claim rep to the manager dated May 23, '85,
14 indicating that he had verified that the decedent was
15 employed and that he was paying the claim, 15,000.00 wage
16 loss.
17 Q What is the date of D-13?
18 A May 23, 1985.
19 Q And was the estate of Mark Barth paid
20 $15,000.00 wage loss benefits?
21 A Yes.
22 Q When was that payment made?
23 A 5/23/85.
24 Q Placing in front of you a document which
25 has -- excuse me, I give you D-16. What is D-16?
225
•
1 A Appears to be a 1978 Pennsylvania income
2 tax return.
3 MR. KERR: I want to make a representation
4 to the court because there has been some testimony on this
5 issue.
6 With respect to numbers that appear on
7 documents, Harleysville numbered all of its documents that
8 it produced. When documents were produced to it by
9 plaintiffs, it also numbered them, but it placed a P in
10 front of the number in order to keep track of the
11 documents and to also incic~~e the source of it. I saY
12 that for clarity of the record, because there was some
13 testimony earlier that plaintiffs documents had no numbers
14 on them. Insofar as they appear in defendant exhibits,
15 they will have numbers on them, date stamp numbers, but
16 there will be an introductory P.
17 BY MR. KERR:
18 Q From D-16 . rnn vn~~ ncrartr,i n Whn+ +~„
19 annual wages were of Mr. Bastian?
20 A In 1978, apparently was $18,762.00.
21 Q I give you D-19 and D-20. Did Harleysville
22 ever have a claim file for Florence Bicht?
23 A Yes.
24 Q Did Harleysville ever receive a PIP form
25 with respect to Florence Bicht?
226
1 A No.
2 Q What is D-19?
3 A D-19 is an acord accident report form for
4 the insured DeHaven and Isabelle Griffith regarding an
5 accident of 1/1/78.
6 MR. KERR. I believe, your Honor, that the
7 Binns -- William Bi nns, Jr, claim has been withdrawn.
g MS. SHUMAN: No, there has been an order
9 entered.
10 THE COURT: Can't hear You, ma'am.
11 MS. SHUMAN: It was dismissed by an order
12 of your court, Your Honor, in MaY.
13 THE COURT: So --
14 MR. KERB: We can draw a line through that
15 one, Your Honor.
16 THE COURT: I am going to D-604 and taking
17 out Binns. Are You still on Exhibit D-19 and D-20?
18 MR. KERR: No, Your Honor, I am moving on
19 moving on to Defendant Exhibit Number 23.
20 THE COURT: I didn't hear anything about
21 20.
22 MR. KERB: I didn't ask anY questions about
23 20.
24 THE COURT: All right.
25 BY MR. KERR:
227
! •
1 Q What is D-23, sir?
2 A It is an inter-company memorandum from the
3 claim rep in Lancaster to the home office dated 10/9/78,
4 indicating that she had received a phone call from a
5 Patricia Boltz, the insured, stating that her son had
6 died -- her son, Brian, had died on 9/30/78, apparently
7 from blood clots on the brain.
g Q I give You D-24. What is D-24?
9 A A memorandum from the claim rep in
10 Lancaster to the manager in Lancaster, Mr. Gemmill.
11 Q From that memorandum, did You learn
12 anything about the age of the claimant or the claimant's
13 condition at the time that he died?
14 A It indicates he was 11 Years old and that
15 he was blind and receiving Social Security benefits at the
16 time.
17 Q With respect to Mr. Brian Boltz, what was
18 the date of the accident?
1g A July 13, '78.
20 Q And the date of death?
21 A September 30, '78.
22 Q Did Harleysville ever pay any wage loss
23 benefits?
24 A No.
25 THE COURT: Actually it was what date?
228
1 THE WITNESS: The actual date was 7/13/78.
2 THE COURT: Where do you see that?
3 THE WITNESS: It is on the chart, Your
4 Honor, on this third column.
5 THE COURT: Oh, it is not on D-24, but it
6 is on the chart.
7 THE WITNESS: Right.
g THE COURT: All right.
9 BY MR. KERR:
10 Q I give You D-28. What is D-28?
11 A It is a letter from the Bank of Lancaster
12 to our claim rep in Lancaster enclosing an application for
13 benefits for W. Earl Bowman, and a death certificate and a
14 funeral bill.
15 Q Is the second page of that exhibit the
16 application for personal benefit -- for PIP benefits?
17 A Yes.
18 Q Does it say anywhere on that application
19 whether or not the person making the claim for benefits
20 lost any wages?
21 A No, it says he was retired and lost no
22 wages.
23 Q Where is that on the form?
24 A About 75 percent of the way down, number 2,
25 it says did You lose wages or salary as a result -- and it
229
• •
1 says no. And on the extreme right, it says what is your
2 average net weekly rate. It says here retired.
3 Q You determined from Defendant Exhibit
4 Number 28 how old the deceased was when he died?
5 A The date of birth was 6/25/97, and this
6 happened in January '83, so he must have been
7 approximately 83, 86.
g Q Placing in front of You a document, D-27,
9 what is D-27?
10 A It is a letter from the claim rep in
11 Lancaster to an attorney dated February 6, '84.
12 Apparently she had had a telephone conversation with this
13 attorney on February 2 and she was enclosing payment. for
14 15,000.00 wage loss benefits.
15 Q Placing in front of you D-25, what is D-25?
16 A It is a letter from Attorney Homsher in
17 Lancaster addressed to our Lancaster office in which he is
18 making a claim for work loss benefits.
19 Q Did the estate of Mr, Bowman receive any
20 work loss benefits from Harleysville?
21 A Yes, he was paid 15,000.00 on 2/6/84.
22 Q I give You D-29.
23 THE COURT; The record should reflect that
24 we are having significant pauses between these questions.
25 BY MR. KERR;
230
•
1 Q Sir?
2 A I am sorry, did you ask what this was?
3 Q Yes, what is D-29?
4 A It is an inter-office memo from the
5 adjuster in Bloomsburg addressed to the manager indicating
6 that he had had a discussion with an attorney, apparently
7 the attorney for Mr. Joseph Burke, and that the attorney
8 agreed and said the family agreed that they would accept
9 15,000.00 wage loss benefits at that time.
10 Q I give you D-30.
11 A A letter dated April 11, '$3, from the
12 adJuster to the attorney enclosing a check for the wage
13 loss as well as -- no, the payment for the funeral.
14 Q And did the estate receive -- the estate of
15 Mr. Burke receive any wage loss benefits from
16 Harleysville?
17 A Yes, 15,483.00.
lg Q With respect to Edith Bergman, did
19 Harleysville ever receive notice of to whom it claimed
20 should be paid?
21 A Apparently we got it during this
22 litigation.
23 Q Has Harleysville paid any wage loss
24 benefits to the estate of Edith Bergman?
25 A Yes, we paid 15,000.00 into court on April
231
•
•
1 14, 1989.
2 Q When did Harleysville first receive notice
3 of a claim for work loss on behalf of the estate of Edith
4 Bergman?
5 A Apparently during the litigation. I don't
6 have a date.
7 Q I give you D-34?
8 A It is a memo, inter-office, from the claim
9 rep in Bloomsburg to the manager in Bloomsburg dated
10 7/2/82.
11 Q Was the estate to receive wage loss
12 benefits? The James G. Comitz estate.
13 A 15,000.00 was paid in periodic payments,
14 beginning November 9, '82 and ending January 25 of 1984.
15 Q I give you D-35. What is D-35?
16 A It is an inter-office memo from the manager
17 in Blooms burg to the claim adJuster instructing him to pay
18 the wages ever y two weeks,
19 Q Okay. And you ascertained whether
20 survivors were paid survivors benefits as well?
21 A Yes, apparently they were paid $5,000.00.
22 Q Can you ascertain whether survivors
23 benefits were paid prior to the wage loss benefits?
24 A I believe they were, yes.
25 Q D-36, what is D-36?
232
C~
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
•
A It is a form entitled Home Office Schedule
of Payments. And it indicates periodic payments of
survivors beginning in July '82 and wages beginning in
November of '82 and ending in June 1, '83.
Q Who prepares a document like D-36?
A Usually the clerks that process the
payments.
MR. KERR: With the court's permission,
maybe it will go quicker if I don't walk back and forth
and I will stand over here.
BY MR. KERR:
Q I give You D-37. What is D-37?
A An acord loss notice dated 2/16/81 on
Cheryl Covell indicating that she was killed in the
accident of 2/15/81.
Q I give You D-43.
18 benefits.
19
20
A Pennsylvania No-Fault application for
It looks like 2/25 or 2/28/81.
Q And for what claimant or what estate?
A For Cheryl Covell.
21 Q I give you D-38. First, going back to
22 D-43 -- I apologize -- is there any indication there about
23 wages or whether or not the claimant was employed?
24 A Did you lose time from work? No. What are
25 Your average weekly earnings? It looks like 125 a week.
233
C~
•
1 I can't make out the next word. I am not sure what that
2 says.
3 Q D-38, what is D-38?
4 A That is a inter-office memo from the claim
5 rep in Bloomsburg to the manager.
6 Q From this memo, can You determine whether
7 or not Harleysville had all of the necessary wage
8 information as of June 15 -- excuse me, June 11, 1981?
g A It looks like June 11, '81, it was not
10 cleared up because he indicates hopefully we will have the
11 wage picture cleared up along with the cause of death very
12 shortly.
13 Q I give you D-44. What is D-44?
14 A An inter-company memo from home office, Mr.
15 Kennedy, to the manager of Bloomsburg dated June 24, '81,
16 concerning Cheryl Covell.
17 Q Can You determine whether or not there was
18 an attorney representing the claimant, Covell, or her
19 estate?
20
21 see that
22
23
24 his mana
25
A Yeah, there apparently was one. I don't
he is identified in this memo though.
Q I give You D-45. What is D-45?
A The memo from the adJuster in Bloomsburg to
ger -- or supervisor, sorry.
Q And what action is being reported there?
234
• •
1 A He is indicating that she was unemployed,
2 Although she had the time for a Job, she was at that time
3 unemployed, And he phoned the attorney and denied any
4 benefits or wages.
5 Q I give You D-46. What is D-46?
6 A A memo, inter-office, from the claim rep in
7 Lewisburg to his manager, dated 7/20/81.
g Q And I give you D-47.
g A A letter addressed to the attorney for
10 Covell dated 7/22/81 from the adJuster at Lewisburg and
11 explaining our reasons for not paying wage benefits.
12 Q I give You D-39.
13 A An inter-office memo from the adJuster in
14 Bloomsburg to the supervisor in Bloomsburg dated 5/26/83,
15 Q What is being described in this memorandum?
16 A In effect, payment, said he was going to
17 send a draft. And he completed it and sent the attorney
18 the $15,000.00 wage.
1g Q And I give You D-40. What is D-40?
20 A A copy of a settlement draft dated 5/25/83
21 for $15,000,00 payable to the administrator of the estate
22 of Cheryl Covell.
23 Q Does it state what it is in satisfaction
24 of?
25 A Yeah, 15,000.00 for wage benefits.
235
• •
1 Q I give You D-41. What is D-41?
2 A A letter from the attorney -- from an
3 attorney dated 10/14/83 and enclosing a release signed by
4 the administrator of the estate dated June 6, '83 for the
5 $15,000.00 payment.
6 Q I give you D-42. What is D-42?
7 A It is an order -- not an order, a document
8 from the court, Prothonotary apparently, indicating that
9 the case of Leach vs Harleysville was satisfied with a
10 settlement dated October 11, '83.
11 THE COURT: We are coming up on a recess
12 shortly.
13 MR. KERR: Whenever it is convenient for
14 You, Your Honor.
15 THE COURT: All right. Well, if you are
16 through on the Covell --
17 MR. KERR; I am at a convenient stopping
18 point. I am going to move on to the next claimant.
1g THE COURT; All right. I have a
20 suggestion. You are picking and choosing in the exhibits
21 that You are going to be offering to me, and it is obvious
22 that you are not going to be offering everything in the
23 work books that You have given me.
24 It may be helpful to me to have this
25 witness identify an exhibit such as Defense 36, which is a
236
~ i
1 payment schedule, but it is absolutely no help to me for
2 the witness to identify a document such as D-42, which is
3 a prothonotarY's release piece.
4 Is there going to be, to this point, Ms.
5 Shuman, any obJection to the exhibits that Mr. Kerr has
6 identified and presumably is going to offer in evidence?
7 MS. SHUMAN: No, Your Honor.
g THE COURT: I wonder then, can You present
9 me a total list of exhibits that You want to enter and
10 have Ms. Shuman identify any that she obJects to? And we
11 will deal with those separately with this witness. And
12 otherwise, I will Just accept the exhibits en masse and I
13 can determine the meaning of each document myself.
14 MR. KERR: Your Honor --
15 THE COURT: Is there any merit to this?
16 MR. KERR: I think there might be great
17 merit to that, your Honor. MY only concern is the timing
18 of it .
19 I would be happy to sit down with Ms.
20 Shuman and go through that exercise. In light of the
21 court's expressed concerns Yesterday, we have -- I spent a
22 lot of time trying to go through and streamline the
23 presentation on each of these claims, which is why the
24 exhibits I am not going -- I am not using all of them,
25 I am trying to focus on absolutely the key
237
~ i
1 exhibits for the position -- to represent the position
2 that Harleysville is taki ng on each of the claims.
3 I think, i n many ways, the procedure that
4 Your Honor has suggested -- and I wouldn't obJect at all
5 to having an adJournment of this, because I think if I did
6 that and had Ms. Shuman's agreement as to the documents, I
7 could probably reduce Mr. Hagin's testimon y to a very,
8 very brief time. And we could reconvene a t the court's
9 convenience. But --
10 THE COURT: Well, would two hours or two
11 and a half hours be sufficient?
12 MR. KERR: There is a vast number of
13 exhibits and I would be surprised if we could do it in two
14 hours.
15 MS. SHUMAN: MaY I speak to that issue,
16 your Honor?
17 THE COURT: Yes.
18 MS. SHUMAN: I personally have reviewed all
19 the exhibits that were given to me yesterday. And I am
20 willing to sit down and agree to the admissibility on, you
21 know, the exhibits. I'm willing to agree to all the
22 documents. They all came from Harleysville's file and I
23 don't have any difficulty with agreeing to their
24 admissibility.
25 THE COURT: So we have Defense Exhibits 1
238
1 through 575, and you agree that they all can come in,
2 ma'am?
3 MS. SHUMAN: 1 through 575, yes.
4 THE COURT: Voila. Now, what is next, sir?
5 I'm now going to admit Defense Exhibits 1 through 575.
6 And I instruct Mr. Kerr to provide me a list of the
7 documents that he truly wants me to exam. And otherwise I
8 will not examine any of these documents unless instructed
9 by Mr. Kerr.
10 MR. KERR: I would also --
11 THE COURT: Understood?
12 MR. KERR: Yes. I would also ask whether
13 Ms. Shuman would agree to the admission of Exhibits 601
14 through 604?
15 MS. SHUMAN: I have some problems with
16 those exhibits, your Honor.
17 THE COURT: All right. Well, I will -- you
18 will have a few minutes, I suggest you see if you can iron
19 out any problems with those.
20 Are you all right, Mr. Kerr?
21 MR. KERR: I am ,lust trying to think. I
22 think the court's proposal of a recess would be very
23 useful and let me decide, trying to ascertain over the
24 luncheon break what additional testimony, if any, I need
25 from Mr. Hagin that would be of benefit to the court.
239
•
1 That is a tough order over the next hour. I guess -- I
2 will do my very best.
3 The other way to proceed would be if all
4 those exhibits are in, at the time of the -- You know, if
5 we Just had an adJournment and whenever we reassembled for
6 purposes of argument and that sort of thing, if I could
7 have the opportunity, if I notice something that I felt in
8 Mr. Hagin's testimony would be necessary to complete., I
9 had the right to recall him. That may be a much more
10 expeditious and efficient use of the court's time and Ms.
11 Shuman's time.
12 THE COURT: Well, I agree. And if I
13 haven't officially done it, Defense Exhibits 1 through 575
14 are admitted.
15 MR. KERR: And perhaps Ms. Shuman and I in
16 the meantime can work out whatever our problems are on 601
17 to 604. If not, we can then come and argue them to the
18 court at that time.
19 THE COURT: We will deal with that offer on
20 those final exhibits when we come back. And I urge
21 counsel to re-examine your position on those documents and
22 be prepared to succinctly tell me Your arguments when we
23 come back.
24 We we will be in recess, give you a little
25 extra time, Mr. Kerr, to put Your list of what documents
240
~ ~
1 are crucial for you that you want me to examine together.
2 So --
3 MR. KERR: Again, I am not sure I can
4 complete that today, your Honor.
5 THE COURT: Oh, all r ~r~'t .
6 MR. KERR: I would like Just a period of
7 time. I ca n have it for you next week.
8 THE COURT: Well, we will deal with that
9 then later this afternoon. We will be in recess. 2
10 o'clock?
11 MR. KERR: That would be fine. Thank you,
12 Your Honor.
13 THE COURT: Court's in recess.
14 - (Whereupon, a lunch recess was taken at
15 12:15 p.m. and reconvened at 2:30 p.m.
16 (Witness resumes the stand.)
17 THE COURT: Mr. Kerr.
18 MR. KERR: Thank you, your Honor.
19 MR. KERR: During the recess, we had the
20 opportunity to assess various situations, and let me try
21 to review t hem one by one.
22 First, with respect to Plaintiffs
23 Exhibits -- Defendant's Exhibits, I apologize -- I
24 understand the court has admitted into evidence
25 Defendant's Exhibits 1 through 575.
241
1 Defendants have in the notebooks before You
2 exhibits going up to 609. I think the last book went from
3 575 to end. And that actually goes up to 609.
4 So I would ask at this time, of Ms.
5 Shuman -- and I understand that she ob.iects to Exhibits
6 601 through 604 -- if she has obJections to any of those
7 other exhibits, namely Defendant's Exhibits 576 through
8 609, that they be identified now.
9 THE COURT: Ma'am.
10 MS. SHUMAN. Your Honor, I obJect to
11 Defendant's Exhibit Number 599.
12 THE COURT: 599.
13 MS. SHUMAN: On relevancy grounds.
14 THE COURT: What else?
15 MS. SHUMAN: Exhibit 600, D-600, Mr. Kerr
16 has indicated was an exhibit to Mr. Maio's transcript in
17 the earlier Gregory action. And if it is attached to the
18 transcript that has been entered in the record here for
19 that purpose, then I have no obJection.
20 If it is put in the record as a separate
21 exhibit without explanation or how it applies, I think --
22 THE COURT: You say it applies to what?
23 MS. SHUMAN: It was an exhibit to the
24 testimony given in the Gregory vs Harleysville class
25 action by Carl Maio, who was from the Office of General
242
• •
1 Counsel of Harleysville, who testified in that action.
2 The trans cript of that trial has been
3 entered in to evidence in this case, in lieu of Mr. Maio's
4 testimony, as Plaintiffs Exhibit 14 and 14-A, I believe.
5 If Mr. Ke rr wants to attach this document,
6 which was an exhibit in the Gregory matter, and relate it
7 to Mr. Mai o's testimony -- to the transcript of that
8 testimony, then I have n o obJection.
9 MR. KERR: That would be our purpose for
10 offering it, your Honor, because as I recall Mr. Maio's
11 testimony, he was using this document. And I think it
12 would be helpful to have the document.
13 THE COURT: Then there is no obJection, is
14 there, ma'am?
15 MR. KERR: Not as long as it is relevant to
16 the action having to do with Mr. Maio's testimony.
17 THE COURT: Well, he says it goes with
18 Maio's testimony. And that is certainly the way we will
19 receive it. So th en You have no obJecti on?
20 MS. SHUMAN: No. I don't know what Exhibit
21 601 is.
22 MR. KERR: 601, 2, 3 and 4 are what I would
23 call finding tools or summary documents. Exhibit 601 was
24 the list of catego ries. Exhibit 602 --
25 MS. SHUMAN: I have the o thers. I don't
243
• •
1 have an obJection to 601. I suppose the court can
2 consider that for whatever value it might have.
3 I have an objection to D-602.
4 THE COURT: Just a second. Are Defendants
5 Exhibits 1 through let's say 600, as an example, going to
6 be introduced into the record in the same form in which I
7 have these working notebooks given to me by counsel, or
8 are they going to be introduced piecemeal? Are they
9 loose, in other words?
10 MR. KERB: They are at the moment loose,
11 your Honor. And we will do whatever is most convenient
12 for the court. I have them separately. I will put them
13 all together and deliver them to whoever you instruct me
14 to deliver them to.
15 THE COURT: Well, it is my intention to
16 consider the working notebooks given to me by defense
17 counsel as the exhibits in question and primary source of
18 those exhibits.
19 I suspect that either party who considers
20 they have lost this case will be appealing it. And I
21 suspect that the working notebooks would be the easiest
22 method to use these exhibits and have them examined by a
23 higher court in the same fashion that I am using them.
24 So unless there is some obJections from
25 counsel, make it known to me now, I am going to consider
244
•
1 the notebooks given to me as the primary source of the
2 exhibits.
3 MR. KERR: That is absolutely satisfactory
4 to Harleysville, Yo ur Honor.
5 MS. SHUMAN: That is fine, your Honor.
6 THE COURT: So I am now marking Defendant's
7 600. And I want to put a reference on this that I should
8 use these exhibits in conJunction with the transcribed
9 testimony of --
10 MS. SHUMAN: Carl Maio.
11 THE COURT: Which is found in Plaintiffs
12 Exhibit --
13 MS. SHUMAN: 14 and 14-A.
14 THE COURT; -- 14 and 14-A.
15 Your next obJection, ma'am?
16 MS. SHUMAN: Is with regard to D-602.
17 There are inaccuracies in the information containing --
18 THE COURT: These are work sheets?
19 MS. SHUMAN: They are -- the heading on it
20 is categories of claimants.
21 MS. SHUMAN: On the first page of that,
22 many of the claims on this first page are not members of
23 the plaintiff class in this action.
24 THE COURT: Is that true, Mr. Kerr?
25 MR. KERR: Your Honor, we may be involved
245
• •
1 in a semantic problem here. We have indicated where there
2 was someone who was a claim and it has been withdrawn, or
3 it has been withdrawn in some way except for interest.
4 This -- there have been correspondence back and forth. It
5 was an order of this court involving three claimants.
6 As we kept track of the claimants for
7 purposes of this proceeding, we had 135 of them. And
8 some, over the last couple of weeks, even a little
9 earlier, plaintiffs have withdrawn.
10 THE COURT; All right. These are your work
it sheets?
12 MR. KERB; These -- this is a summary, a
13 work sheet, yes, of how we broke down the claimants into
14 the various categories.
15 THE COURT: All right. Ms. Shuman, I look
16 at the first one, Ailes.
17 MS. SHUMAN; It says withdrawn except for
18 interest. It is an interest claim. And it hasn't been
19 withdrawn. It is simply an interest claim.
20 Gatta hasn't been withdrawn by plaintiffs.
21 It was the subJect of a court-approved settlement,
22 therefore it does not fit within the class as defined by
23 Your court in this action. Which includes people who are
24 not the subJect of a court-approved settlement. So it is
25 not a class member.
246
•
1 THE COURT: So in essence I read withdrawn
2 by plaintiffs as "not for decision by this court". Isn't
3 that the way I read it?
4 MS. SHUMAN: It could be read that way,
5 your Honor.
6 THE COURT: That is the way I will read it.
7 All right. And so forth and so on with the rest of them.
8 I am not worried about that,
9 What is your next obJection?
10 MS. SHUMAN: We think there are some
11 inaccuracies as to the assertions, factual assertions that
12 there has been payment of $15,000.00.
13 THE COURT: Well, you will certainly be
14 able to point those things out to me where there are
15 factual errors on D-602, and you will have the opportunity
16 to do that then.
17 MS. SHUMAN: On page 6, it indicates the
18 LaDue claim has been withdrawn by plaintiffs. That is not
19 accurate.
20 THE COURT: I don't want to cover them now,
21 but you certainly will have the opportunity to question
22 any inaccuracies.
23 MS. SHUMAN: That is the basis of my
24 obJection is it is inaccurate information.
25 THE COURT: All right. Anything else,
247
•
1 ma'am?
2 MS. SHUMAN: With regard to 603 and 604,
3 which as I see them are the same information in different
4 order, I obJect to the admission of these documents on the
5 basis that the information that is in them is already in
6 other exhibits the defendant has put in.
7 THE COURT: Well, these are -- they are
8 work sheets given to me by defen se the same as You have
9 given me work sheets, and they a re accepted in that
10 fashion. They are not proof of anything in and of
11 themselves. But they are Just aids to the court where the
12 information is accurate.
13 MS. SHUMAN: We would ask that the columns
14 headed plaintiffs claim, either for principal or for
15 interest, be deleted from those exhibits. None of those
16 numbers are accurate. This was information that was given
17 to the defendant several months ago. We have included the
18 calculations within our own calculation sheets that are an
19 exhibit in this case.
20 THE COURT: Well, where interest is
21 ongoing, it is always subJect to being corrected. I don't
22 worry about things like that.
23 MR. KERR: We cer tainly would have no
24 obJection to deleting -- or the court not considering
25 that. As I think I explained at the time that I offered
248
• •
1 those two exhibits, certainly we do not mean to be
2 characterizing plaintiffs claim. And plaintiffs have
3 submitted their own summary sheets and Exhibit 17. We
4 included it initially because we thought it would be
5 helpful. If it is out of date, we are happy to withdraw
6 it.
7 THE COURT: So You are withdrawing the
8 plaintiffs claim for interest, which is the last column on
9 the page J.
10 MR. KERR: And plaintiffs claim for
11 principal. I think plaintiff should be allowed to make
12 whatever statements their claim is. So if it satisfies
13 the obJections to delete those two columns of that
14 exhibit, we could either rerun it without those two
15 columns or Just cross it out, whichever is easier.
16 THE COURT: So merely mark the first page
17 of D-603 in pencil by saying withdrawn by defendants. See
18 plaintiffs figures. Next, ma'am.
19 MR. KERB: That is applicable, your Honor,
20 to the final two columns on the right hand side.
21 THE COURT: Yes, sir.
22 MR. KERR: And we are happy to have the
23 same on 604.
24 MS. SHUMAN: We have the same obJection
25 with regard to claims that are not part of this action,
249
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
•
they are included here.
within this action.
THE COURT:
bother with it.
•
There is no claim made for them
That is superfluous. I needn't
MS. SHUMAN: That is the basis of our
obJection on those two.
I have no obJection on 605, 606, or 607.
Exhibit 608 and 609 --
THE COURT: Exhibit 607, 608, 609.
MS. SHUMAN: On 608 and 609 I obJect to the
admission of those two documents on a relevance basis.
The verdicts --
THE COURT: Pardon me. 607?
MS. SHUMAN: No, I am sorry, your Honor,
607, I have no obJection to.
THE COURT: All right.
MS. SHUMAN: It is only 608 and 609.
THE COURT: And your obJection?
MS. SHUMAN: The obJection is that they are
verdicts entered in third party actions brought against
the bar that served the driver involved and responsible
for the accident. I don't know what relevance they would
have to this action for No-Fault benefits.
THE COURT: The relevance, sir?
MR. KERR: The relevance, your Honor, is
250
• •
1 that we believe those verdicts included an award for
2 potential earnings during working life.
3 MS. SHUMAN: Your Honor, beginning in 1979
4 our courts held that first party benefits were not
5 recoverable in third party actions. That has always been
6 the law in Pennsylvania and we Just don't understand how
7 these documents could have any relevance to these estate
8 claims for work loss.
9 THE COURT: I will admit 608 and 609. And
10 we will entertain a deeper argument on the relevancy at
11 the argument of this case later on.
12 MS. SHUMAN: And, your Honor, with regard
13 to Exhibit 599, I had ob,Jected to that. My obJection is
14 the same basis, that is an order for approval of a
15 compromise of a wrongful death a nd survival action.
16 THE COURT: Same ruling on 599 as I have
17 given on 608 and 609.
18 Anything else, ma 'am?
19 MS. SHUMAN: No, your Honor.
20 MR. KERR: I thin k that covers everything
21 with respect to exhibits.
22 THE COURT: Well, except for me to say that
23 Defendant's Exhibits 576 through 609 are admitted, sub,lect
24 to mY remarks Just a moment ago.
25 MR. KERR: Thank you, Your Honor.
251
•
1 Next, we go to the issue -- in light of the
2 procedures that we are adopting here, we undertook, that
3 is the defendant, Harleysville, has undertaken to provide
4 the court with a list of those exhibits that it believes
5 the court should review with respect to making
6 determinations of Findings of Fact in this matter. And we
7 will do that very promptly. We will undertake to provide
8 the court that list by, if it is satisfactory to the
9 court, by the middle of next week. That is June 21st, if
10 that would be acceptable.
11 THE COURT: That is fine.
12 MR. KERR: We also discussed and have
13 offered to present to the court with respect to the
14 Findings of Fact that have already been submitted, what I
15 would call annotations to the Findings of Fact. That is
16 tying them to the specific exhibits of both plaintiffs and
17 defendant that have been admitted into the record in this
18 matter. And as well to the transcript notes of testimony,
19 if they are available.
20 And whatever schedule would be of
21 conveni ence to the court, if the -- we think we could do
22 it in a couple of weeks or certainly within a week of
23 having the notes of testimony.
24 THE COURT: The notes of testimony are
25 another matter. Are you requesting that right now?
252
1 MR. KERR: We could certainly annotate it
2 to the exhibits without the notes of testimony. If it
3 would be of help to have the notes of testimony, yes, we
4 are going to request the notes of testimony in this
5 matter. If the court would like --
6 THE COURT: For the argument?
7 MR. KERR: I would think it would be of
8 assistance to the court, if possible. If there is a
9 logistical problem here, we can try to do without it.
10 THE COURT: Let's go off the record a
11 minute.
12 (Discussion held off the record.)
13 THE COURT: We have questioned the
14 stenographer, and along with her other trials that she has
15 to transcribe, she suggests she may have the transcript by
16 July 15th. Counsel are directed to make their appropriate
17 arrangements today with the stenographer for the payment
18 of this matter.
1g With that representation, I would expect to
20 receive Your annotated comments by July 21st, Mr. Kerr.
21 MR. KERR: That is fine, your Honor.
22 THE COURT: What else did you want to say,
23 sir?
24 MR. KERR: I have nothing else on my list,
25 your Honor, other than we are prepared to proceed with --
253
1 we have eight files about which we want to inquire of Mr.
2 Hagin today. And reserve the right -- hopefully it will
3 not be necessary -- but perhaps to call him very, very
4 briefly on August 2nd, if necessary.
5 THE COURT: All right.
g Remind me, counsel, to mop up with an order
7 concerning August 2nd and also remind me to mention the
8 briefing schedule in that. Go ahead now, Mr. Kerr.
g (Witness resumes the stand.)
10 BY MR. KERR:
11 Q Mr. Hagin, I am turning to the claim of
12 Leon Cron, and I am placing before You D-54, sir. Could
13 You explain what D-54 is?
14 A It is a computer printout of the policy
15 information on file for policy 712359, prefix is FAC,
16 effective 7/8/80 to 7/8/81.
17 Q Does -- did a review of Harleysville's
18 files disclose any claims filed on Leon Cron?
19 A No.
20 Q Was a claim for wage loss ever made on
21 behalf of Leon Cron?
22 A No.
23 Q Was an application for PIP, or, in other
24 words, was a PIP application for work loss benefits ever
25 filed?
254
~ ~
1 A No.
2 Q How is Defendant Exhibit 54 prepared?
3 A It is -- it is prepared, I assume, by
4 the -- I am not sure -- one of the departments in the
5 company. But this is simply a printout from the computer
6 of that policy.
7 Q Turning now to the claim of Samuel
8 Esposito, I am placing in front of you a document which
9 has been marked -- I am placing in front of you D-606.
10 What is D-606?
11 A This is a printout from the claims
12 microfiche. After a file is closed, it goes on to the
13 microfiche. And this is simply a print of the microfiche
14 on record of this particular claim.
15 Q Did Harleysville ever receive a PIP
16 application for work loss benefits on behalf of Samuel
17 Esposito?
18 MS. SHUMAN: I am going to obJect to the
19 form of that question. The PIP application is a PIP
20 application. You are asking -- are you asking whether he
21 received a PIP application?
22 BY MR. KERR:
23 Q Did Harleysville ever receive a PIP
24 application?
25 A We don't know. We don't have a file. Oh,
255
1 on Esposito, no. It says no, no number -- none was ever
2 filed.
3 Q Is there anything in Defendant's 606 which
4 gives you any information of whether or not Harleysville
5 ever received any notice of the death of Samuel Esposito?
6 A We paid -- whether a claim was paid, is
7 that your question?
8 Q Did you ever receive any notice of the
9 death of Samuel Esposito?
10 A We apparently did because we made payment.
11 Q Payment of what?
12 A A payment was made on 12/2/85 for 20,000 --
13 it looks like 864.30 -- and it says payee is Margaret
14 Esposito, surviving parent of Samuel James Esposito, in
15 satisfaction of concerning claim for death less any costs
16 payable for representing the estate of Samuel James
17 Esposito for court.
18 THE COURT: Sir, Just to square it away,
19 earlier you had asked the witness was there any indication
20 of notice of the claimant's death in any way in that. I
21 understood him to say no. But now that has been modified.
22 THE WITNESS: No, I am saying that we
23 obviously got a notice or we wouldn't have paid it. But I
24 don't have any indication of getting the notice or of what
25 notice was given.
256
1 THE COURT: Or when it was given?
2 THE WITNESS: Or when, Yes.
3 THE COURT: All right. I look at this, and
4 payment was made when, sir?
5 THE WITNESS: On page 2, the left document,
6 Your Honor, it is dated 12/2/85.
7 BY MR. KERR:
g Q Now, turning to the claim of Timothy Foley.
9 does Harleysville have a claims file on Timothy Foley?
10 A No.
11 Q I am going to show you a document which has
12 not been received as or marked as an exhibit. It is a
13 document which bears a stamp at the bottom 030887. I gust
14 would ask You to identify what that document is?
15 A I testified earlier this morning the
16 procedures, what happens when a new claim comes in. This
17 is an index that is typed when a new acord loss notice is
18 received in the office.
19 Q And is there anything -- what is this
20 particular document? Can you say who the claim is for or
21 what the date was or can You tell us anything about a
22 claim?
23 A This index simply gives us the name of the
24 insured, the address, the claimant. And the claimant
25 listed here is a James Moyer. Date of loss, 8/20/79.
257
• •
1 There is no indication of what kind of a claim it is.
2 THE COURT: I take it I am not going to
3 receive this document.
4 MR. KERR: No, your Honor. I am happy to
5 provide it to the court. I was ,lust --
6 THE COURT: All right.
7 MR. KERR: Perhaps I should have it marked
8 as an exhibit and introduce it, your Honor. I apologize,
9 I don't have copies, but we will provide copies -- I think
10 plaintiffs' counsel has a copy of this.
11 MS. SHUMAN: Yes, your Honor, we already
12 have it as an exhibit attached to the Foley file, if that
13 is acceptable. Plaintiffs' Exhibit 19, the Foley file, it
14 is the first document in there.
15 THE COURT: It is already in.
16 MR. KERR: It is already in. I had
17 forgotten that, your Honor.
18 BY MR. KERR:
19 Q From that document, 30887, which is the
20 first document in the Foley trial file, Plaintiffs'
21 Exhibit 19, which I will place in front of you again, or
22 from any other information, can you tell if Harleysville
23 ever received notice of a claim for work loss benefits on
24 behalf of Timothy Foley?
25 A No.
258
• •
1 THE COURT: You can't tell or they didn't?
2 A No, I can't tell from this document that
3 there was ever a notice received or a claim for wages or
4 death.
5 BY MR. KERR.
6 Q From Your investigation of the files in
7 this matter related to this case, are you aware of
8 Harleysville ever having received notice of a claim for
9 wages prior to -- wage loss benefits under the No-Fault
10 Act prior to this commencement of this litigation?
11 A No, I am not aware.
12 Q Was, to your knowledge, a PIP form filed
13 for Timothy Foley?
14 A No.
15 Q Now, there was testimony by Mrs. Foley
16 about agents . I don't want to go over what you testified
17 about earlie r. But are agents employees of Harleysville?
18 A No.
19 Q Turning now to the Handschin claim, John
20 Handschin, I give you Defendant Exhibit Number 162.
21 A This is a --
22 THE COURT: Just a second.
23 THE WITNESS: -- policy --
24 THE COURT: Just a second.
25 BY MR. KERR:
259
• •
1 Q Wait one minute until we all find it.
2 A Okay.
3 Q First, does Harleysville have a claims file
4 for --
5 THE COURT: Just a second. I am still --
6 MR. KERR: I am sorry, Your Honor. I have
7 an extra copy --
8 THE COURT: No, no.
g MR. KERR: Okay.
10 THE COURT: Sir.
11 BY MR. KERR:
12 Q First, Mr. Haain, does Harleysville have a
13 claims file for John Handschin?
14 A No.
15 Q What is Defendant's Exhibit Number 162?
16 A D-162 is again a printout from a policy
17 fiche, policy microfiche for a Stanley W. Benfield for a
18 policy effective 8/27/80 to 8/27/81. And that indicates
19 there was a claim reported with a date of 11/11/79,
20 vehicl e being operated by Stanley W. Benfield.
21 BY MR. KERR:
22 Q Was John Handschin a named Harleysville
23 insure d?
24 A No.
25 Q To Your knowledge, was a PIP application
260
• •
1 ever filed on behalf of John Handschin?
2 A No.
3 Q To Your knowledge, was a claim for work
4 loss benefits ever made on behalf of Jahn Handschin prior
5 to this litigation?
6 A No.
7 Q Turning now to the claim of Elwood Houser,
8 I give You Defendant Exhibit Number 201.
9 A This is a printout, it is a policy
10 printout. Notice the different format. This is an
11 updated computer printout of policy information which
12 gives us a lot more information than did the printouts in
13 the previous cases. But this is a printout of the policy
14 for an Elwood G. and Mary Lou Houser -- Edward G. Houser,
15 Jr. and Mary Lou Houser for a policy effective 3/12/79 to
16 9/12/79.
17 Q Does Harleysville have a claims file for
18 Elwood Houser?
19 A No.
20 Q Did Harleysville ever receive notice of a
21 claim for work loss benefits under the No-Fault Act on
22 behalf of Elwood Houser prior to the commencement of this
23 litigation?
24 A No.
25 Q Did Harleysville ever receive a PIP
261
• •
1 application on behalf of Elwood Houser?
2 A No.
3 Q Turning now to the claim of Denise Katona,
4 I give You Defendant Exhibit Number 227.
5 A This is a printout of two claims. The
6 first is for a claim Ioss date of 9/1/78 for Steven P.
7 Katona as the named insured. And the second one is a
8 claim index indicating a claim was reported with a loss
9 date of October '78, without an individual date in there.
10 And that is under a different policy for Steven P. Katona
11 trading as Katona Fence Company.
12 Q Does Harleysville have a claims file for
13 Denise Katona?
14 A No.
15 Q Did Harleysville ever receive a PIP
16 application on behalf of Denise Katona?
17 A Well, I stated earlier no, we did not
18 receive -- we don't have a file so I have to assume we
19 didn't receive it. Or if we did, I don't know when. We
20 don't have a PIP file.
21 Q Turning to the claim of Henry W. Lineman,
22 does Harleysville have a claims file for Henry W. Lineman?
23 A No.
24 Q Did Harleysville ever receive a PIP
25 application, to your knowledge, for Henry W. Lineman?
262
•
1 A No.
2 Q Did Harleysville receive notice of the
3 death of Henry W. Lineman, to your knowledge, prior to the
4 commencement of this litigation?
5 A No.
6 Q Turning to the claim of Ann Marie Rago,
7 does Harleysvil le have a claims file for Ann Marie Rago?
8 A No.
9 Q To your knowledge, did Harleysville ever
10 receive a PIP application on behalf of Ann Marie Rago?
11 A No,
12 Q To your knowledge, did Harleysville ever
13 receive notice of a claim for work loss benefits prior to
14 the commencemen t of this litigation for Ann Marie Rago?
15 A No.
16 MR. KERR: At this time, your Honor,
17 subJect to our discussion on the record at the beginning
18 of this afterno on's session, I have no additional
19 questions of Mr . Hagin. Reserving the right to reopen and
20 perhaps put him on for a very brief time on the morning of
21 August 2nd, if necessary. And we will make every effort
22 not to have it necessary.
23 THE COURT: Ms. Shuman.
24
25 CROSS-EXAMINATION
263
•
1 BY MS. SHUMAN:
2 Q Now, Mr. Hagin, Mr. Kerr has asked you a
3 number of questions about whether Harleysville was able to
4 locate a file, et cetera. You indicated that on some
5 claims it was unable to locate a file, is that correct?
6 A Yes.
7 Q Does that mean You never had an file, sir?
8 A No.
9 Q Is it possible that the file got lost? Do
10 those things happen?
11 A No, not lost.
12 Q Is it possible it was destroyed?
13 A Yes.
14 Q So the mere fact that you don't have a
15 claim file is not proof that there was never a claim file,
16 is that correct?
17 A Yes.
18 Q And although you indicated that you don't
19 have a PIP application on those files where you can't
20 locate a file, you don't know if there was a PIP
21 application in that file?
22 A Right.
23 Q I want to ask you a few questions on a few
24 specific files. Early on in your testimony -- let me make
25 sure I quote you correctly -- you indicated that if an
264
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1 application for benefits or a PIP application was not
2 complete, it wa s the claims representative's Job to
3 acquire the add itional information, is that correct?
4 A Yes.
5 Q So Harleysville, or its claims
6 representative, had the burden, had the duty of gathering
7 the additional information necessary?
8 A Yes.
9 Q And I believe you indicated that
10 Harleysville wo uld not pay work loss benefits without a
11 wage authorizat ion -- I am sorry, without a wage
12 verification. Was that your testimony?
13 A No, I don't think I said that. I think
14 what I said was that -- in answer to I believe the
15 question what w as the policy, how did we handle the file,
16 and I said that they were to get it. No, I wouldn't say
17 that we have ne ver paid without one.
18 Q So that a wage verification was not
19 essential to a payment of work loss benefits, is that
20 correct?
21 A It was essential.
22 Q But you would --
23 A It was required, but I -- in reviewing some
24 of the files, I have seen files where there was not one in
25 there and they did make the payment. So -- so I don't
265
• •
1 know if they got it and lost it or never got it.
2 Q Earlier Mr. Kerr was going over with You
3 some particu lar files, earlier before lunch. I am looking
4 at -- do You have Exhibit 603 in front of you, or near
5 You?
6 A Is that the categories?
7 Q Yes.
8 A I have -- yes, I do.
9 Q I am sorry, I guess 604 was what Mr. Kerr
10 was using wi th you. I am Just trying to be a little
11 consistent, I am sorry.
12 On the second page of that exhibit, with
13 regard to th e Bowman claim, under the column that is
14 headed full proof of loss date, it says not provided. Is
15 that right?
16 A Yes.
17 Q But work loss benefits were paid to this
18 estate, weren't they?
19 A Yes.
20 Q Under the heading Joseph Burke, the next
21 claim down, full proof of loss date, it says not provided.
22 Correct?
23 A Yes.
24 Q But work loss benefits were paid to this
25 estate, weren't they?
266
•
C7
1 A Yes.
2 Q Two down from that, Comitz, under the
3 heading full proof of loss date, it says not provided.
4 Correct?
5 A Yes.
6 Q But $15,000.00 in work loss benefits were
7 paid on this claim, weren't they?
8 A Yes.
9 Q Now, with regard to the Burton estate, you
10 indicated th at you were provided during this litigation
11 with informa tion that you needed to pay this claim, is
12 that right?
13 A Well, that column heading has a two-fold
14 purpose. It is full proof of loss date. Yeah, I guess
15 that is righ t, yes.
16 Q What information were you provided with
17 during this litigation?
18 A I am not sure in looking qt this exhibit.
19 Q So you don't know what information it was?
20 A No.
21 Q At least on one of the claims, you said
22 that you did n't know who to pay because you hadn't been
23 informed the re was a estate raised, is that right?
24 A I don't recall. I might have.
25 Q Well, if we look at, for instance, Florence
267
•
1 Bicht, one of the defenses there says interest not due
2 until Harleysville had notice of person to whom claim was
3 to be paid. What does that mean, Mr. Hagin?
4 A That means apparently that we didn't know
5 who the admin istrator or executor was, Yes, or who to pay.
6 Q And Harleysville has been waiting eleven
7 years for tha t information, is that right?
8 A Well, I don't know. We don't have a file
9 on that.
10 Q Now, you earlier testified that you did
11 have a claim file on that file?
12 A I did?
13 Q In response to Mr. Kerr's question. Gould
14 a check have been made payable to the estate of Florence
15 Bicht?
16 A They are not supposed to. The instructions
17 are that you pay the administrator or executor, not to the
18 estate.
19 Q And is there a legal reason for that?
20 A I don't know. I know that that was the
21 policy dictat ed by the company several years ago.
22 Q Are you indicating that work loss benefits
23 have not been paid other than to estates?
24 A No, I am not:
25 Q In what other -- in what circumstances have
268
1 they been paid to other than estates?
2 A To other than administrators You mean?
3 Q Yes.
4 A I have seen in reviewing these files where
5 payments were made to the estate of.
6 Q So some checks were written that way. isn't
7 that right?
8 A Yes.
9 Q And some checks were written directly to
10 survivors, spo uses, isn't that right?
11 A I think so.
12 Q Now, with regard to the claim of Richard
13 Place, Defenda nt Exhibit Number 604 indicates no claims
14 file. Is that correct?
15 A Yes.
16 Q And it says notice to Harleysville. What
17 is under that column?
18 A No record.
19 Q Do the documents that Harleysville have
20 indicate anything about benefits paid on that claim?
21 A I don't know without looking at the file.
22 Q Well, let me show you Plaintiffs' Exhibit
23 19, the trial file.
24 As far as notice to Harleysville, your
25 chart indicates no record, is that right?
269
1 A Yes.
2 Q Looking at the first document in the Place
3 trial file, 030879, what is that document?
4 A That is a claim index established when the
5 loss notice initially came in.
6 Q And who was identified as the named
7 insured?
8 A Richard Place.
9 Q Who was identified as the claimant?
10 A Richard Place.
11 Q Now, on your chart, you have the date of
12 the accident 3/31/79, is that right?
13 A Yes.
14 Q What is located on the first page of the
15 trial file as the date of loss?
16 A Same date.
17 Q So Harleysville was notified of this
18 accident and of a claim on behalf of Richard Place, is
19 that correct?
20 A Yes. It doesn't say a PIP claim. It Just
21 says a claim.
22 Q All right. Let's look at some other
23 documents tha t Harleysville provided in this action.
24 On the fifth page of that trial file, with
25 a serial numb er 030909, what is this document, Mr. Hagin?
270
• •
1 A This is a computer printout of the policy
2 information on Richard Place.
3 Q And does it show a loss date of 3/31/79?
4 A Yes.
5 Q Does it show Richard Place as the claimant
6 or person involved in the accident?
7 A Operator, yes.
g Q And then on the bottom set of numbers, if I
9 understand, You give a suffix number like 03 in this case
10 to the operator in this accident, is that right?
11 A Right.
12 Q So if we go to 03 at the bottom, the last
13 series of numbers across, what is PD?
14 A Property damage.
15 Q $750.00 was paid on that, is that correct?
16 A Yes.
17 Q We come across here to PIP, there are
18 No-Fault benefits, is that correct?
lg A Yes.
20 Q How much was paid on that?
21 A 6,543.
22 Q To ga back --
23 THE COURT: Just a second.
24 BY MS. SHUMAN:
25 Q Let's go back, turn two more pages in
271
• •
1 there, this is the file on which Harleysville claims no
2 claims file, is that correct?
3 A Yes.
4 Q And we come to No-fault Motor Vehicle
5 Insurance Act Application for Benefits, is that correct?
6 A Yes.
7 Q And it says Harleysville at the top,
8 correct?
g A Yes.
10 Q And it is dated 4/5/79, is that right?
11 A Yes.
12 Q And that is the date I think you have
13 testified before about when it was sent out to be filled
14 out, is that correct?
15 A Yes.
16 Q And the accident date 3/31/79?
17 A Yes.
18 Q And the application for benefits is brought
19 in the name of Richard Place, is that correct?
20 A Yes.
21 Q And it indicates that a car hit a tree, is
22 that right?
23 A Yes.
24 Q And it is signed here down at the bottom by
25 Tina A. Place?
272
• •
1 A Okay -- Yes.
2 Q And it has a date of April -- it is
3 difficult -- April something, 1979, is that correct?
4 A Yes.
5 Q Next document is a copy of a death
6 certificate?
7 A Yes.
g Q Down in the lower -- this is a death
9 certificate for Richard Place, is that correct?
10 A Yes.
11 Q It gives the date of death as March 31,
12 1979, is that right?
13 A Yes.
14 Q Down in the lower right hand corner it says
15 describe how in~urY occurs -- occurred, and it says
16 operator one car accident, is that right?
17 A Yes.
18 Q We go on to the next document that does not
19 have numbers on it, none of these do -- these were
20 documents supplied by the claimant -- we have copies of
21 two checks here, is that right?
22 A Yes.
23 Q These are checks drawn by Harleysville
24 Insurance Company, correct?
25 A Yes, '
273
• •
1 Q Both checks are made payable to Tina Place,
2 is that right?
3 A Yes.
4 Q The first one is for -- says $1500.00?
5 A Yes.
6 Q And it is coded PIP medical services?
7 A Yes.
g Q Is it possible that that could be a funeral
9 benefit?
10 A Possibly.
11 Q Then we come to the bottom check, draft
12 number 2225369, that is dated May 2, 1979?
13 A Yes.
14 Q And it is for the amount of $300,00, is
15 that right?
16 A Yes.
17 Q And it is coded as PIP-survivors benefits
18 4/1-14/79, is that right?
19 A Yes.
20 Q And it is made payable to Tina Place?
21 A Yes,
22 Q But Harleysville doesn't have a claims file
23 on this decedent?
24 A No.
25 Q Is that right?
274
• •
1 A It was apparently destroyed.
2 Q On the next page, two more drafts, another
3 check for sur vivor loss benefits made payable to Tina
4 Place, isn't that right?
5 A Yes.
6 Q And the check for medical services, is that
7 correct, and that is made payable to Sacred Heart
8 Hospital?
9 A Yes.
10 Q Then we have several more pages of checks,
11 all written by Harleysville?
12 A Yes.
13 Q One is a property damage claim, is that
14 right?
15 A Yes.
16 Q Some of them are survivor loss benefits
17 being paid t o Mrs. Place?
18 A Yes.
1g Q Now, in order to pay survivor loss
20 benefits, wh at information did Harleysville need?
21 A It needed information on dependents, death
22 certificate, and I guess wage information.
23 Q So in order to have paid Mrs. Place
24 survivor benefits, You had that information, correct?
25 A Supposedly. Should have been.
275
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18
19
20
21
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Q And did You need any other additional
information to pay Mrs. Place work loss benefits?
A I don't believe so.
Q And were any work loss benefits paid on
this estate?
A No.
Q Does Harleysville have a claim file on
Timothy Weaver?
A No.
Q But that doesn't mean, as You indicated
before, that it didn't have a claim file at some time, is
that right?
A I don't recall indicating that. But, no,
it doesn't.
Q Didn't You say that files were destroyed,
that they were put on a diary for destruction?
A Yes.
Q And that on some of the claims where there
was no claim file, there might have been one at an earlier
time?
A Yes.
THE COURT:
How much more do You have,
ma'am?
MS. SHUMAN:
THE COURT:
Pardon me?
How much more do You have?
276
•
1 MS. SHUMAN: 15 minutes, your Honor. Not
2 very much.
3 THE COURT: It has been aver an hour.
4 Let's take a recess.
5 (Whereupon, a recess was taken.)
6 THE COURT: Court's in session.
7 (Witness resumes the stand.)
8 BY MS. SHUMA N:
9 Q Now, Mr. Hagin, with regard to the claim of
10 Timothy Weav er, am I correct that Harleysville claims it
11 does not hav e a file on that decedent?
12 A Yes.
13 Q I am showing You the Weaver trial file from
14 Plaintiffs' Exhibit 19. Harleysville was notified of the
15 accident by the West Penn Power Company at least by
16 February 5, 1979, isn't that correct?
17 A I don't know that we were notified by West
18 Penn Power. We were notified by someone.
19 Q And who was listed as the claimant there?
20 A West Penn Power Company.
21 Q Who was listed as the insured?
22 A Wayne A. Weaver.
23 Q And what was the date of the accident?
24 A 2/2/79. And date reported 2/5/79.
25 Q And then there are some additional
277
•
1 documents that are computer printouts, these are generated
2 by Harleysville, are they not?
3 A Yes. That is a policy --
4 Q And then there is a third page that is a
5 printout as well, is that right?
6 A Yes.
7 Q And the fourth page and the fifth page,
8 coming over to the sixth page, is this a claim page?
9 A Yes.
10 Q It indicates claims made on this policy, is
11 that right?
12 A Yes.
13 Q And it indicates benefits paid on this
14 policy, that c orrect?
15 A Yes.
16 THE COURT: Does this have a number?
17 MS. SHUMAN. I am sorry, 030905.
18 BY MS. SHUMAN:
19 Q And with a loss date of February 2, 1979,
20 next to that i s listed Timothy Weaver, is that correct?
21 A Yes.
22 Q If we come down to E suffix, number 5, is
23 that right?
24 A Yes.
25 Q If we go down to the bottom of the page to
278
•
1 suffix number 5, two categories down, this is the payment
2 portion, is that right?
3 A Paid amounts, yes.
4 Q If we come over to the PIP section, in
5 about the middle of the page, it shows $6,512.00 PIP
6 benefits paid arising out of this February 2, 1979,
7 accident, is that correct?
g A Yes.
g Q Now, the next document I am showing you
10 doesn't have a number because this was not provided by
11 Harleysville. It is a letter dated February 5, 1979, is
12 that correct?
13 A Yes.
14 Q And it is written by Timothy F. Healy,
15 District Claims Manager of Harleysville Insurance Company,
16 is that right?
17 A In the Altoona office.
18 Q And it is addressed to Mr. Weaver, Wayne
19 Weaver, is that correct?
20 A Yes.
21 Q And does it begin, Accept our condolences
22 on the recent tragedy which has resulted --
23 A Yes.
24 Q You don't have a claim file on this claim?
25 A Right.
279
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8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
•
Q And you indicated before that you didn't
know if you had ever been notified about it, is that
right?
MR. KERB: I object, your Honor, I don't
think he had testified at all about the Weaver file.
THE COURT: I don't recollect any such
testimony.
MS. SHUMAN:
misspoken myself.
THE COURT:
THE WITNESS:
All right. I may have
Okay.
Chart says we did have
notice.
BY MS. SHUMAN:
Q It ,lust says notice after 2/5/79, is that
correct?
A Yes.
Q And this letter dated 2/5/79, by that date
you had notice, isn't that right?
A Yes.
Q Now, let's look at the substance of what
Mr. Weaver was told. What benefits are indicated may be
payable as a result of Timothy's accident?
A It indicates that he would have coverage
for funeral, up to $1500.00 medical expenses incurred, and
survivors loss up to $5,000.00.
280
~ ~
1 Q Any mention of work loss in there?
2 A No.
3 Q Now, the next document is headed claim
4 acknowledgment, is that right?
5 A Yes.
6 Q And what is this document?
7 A This is a -- simply a -- if you will go
8 back to your fi rst document, it is a claim index. And
9 this is simply a -- I don't know -- third, fourth or fifth
10 copy from that, whi ch is mailed to the insured as a
11 acknowledgment that we received his claim.
12 Q And this was being mailed to Wayne Weaver?
13 A Yes.
14 Q And dated 2/5/79?
15 A Yes.
16 Q Now, the next document is a copy of a death
17 certificate for Way ne Weaver, is that right?
18 A Yes.
19 Q And in the portion where it says how did
20 injury occur?
21 A Car accident.
22 Q And his date of accident was February 2,
23 1979, is that r ight ?
24 A The date of death, yes.
25 Q Date of death. And as far as his marital
281
• •
1 status, he was married, is that right?
2 A Yes.
3 Q Now, on the payment sheet that we looked at
4 earlier, it showed payment of $6,512.00, is that right?
5 A Yes.
6 Q The next document in the file is a copy of
7 a funeral bill, is that right?
8 A Yes.
9 Q Does that funeral bill indicate a payment
10 by Harleysville?
11 A Yes, $1500.00 on 2/16/79.
12 Q So that is within two weeks of the
13 accident, is that right?
14 A Yes,
15 Q Now, Mr. Weaver was married, according to
16 the information in here?
17 A Yes.
18 Q And 6500 and a little bit over was paid?
19 A Yes.
20 Q 1500 of it was a funeral benefit?
21 A Yes.
22 Q That would leave a little over $5,000.00.
23 Would that $5,000.00 be an appropriate amount for payment
24 of survivor loss benefits?
25 A Yes.
282
• •
1 Q And where you have a spouse who is
2 dependent upon the decedent, that would be an appropriate
3 benefit to pay, wouldn't it?
4 A Yes.
5 Q If the $5,000.00 on this claim was paid for
6 survivor loss benefits, was there any additional
7 information you needed to pay work loss?
8 A Letters of administration.
9 Q Didn't You indicate earlier that work loss
10 was paid directly to spouses?
11 A No,
12 Q It was never paid directly to spouses?
13 A No, I didn't say it was never. I said it
14 should not have been,
15 Q But it was, wasn't it?
lfi A I saw where it had been on occasion, yes.
17 Q Another file Mr. Kerr asked you about was
18 the file of Ann Marie Rago. Is this another file on which
19 Harleysville says it has no claim file?
20 A Yes.
21 Q I am showing you the Rago file which is
22 Plaintiffs' Exhibit 19. The first document in that is
23 another home office index, isn't it?
24 A Yes.
25 Q And the claimant is listed as Ann Marie
283
• •
1 Rago, is that right?
2 A Yes.
3 Q And Ernest Rago is listed as the insured?
4 A Yes.
5 Q And the date of the loss is October 8,
6 1978, is that correct?
7 A Yes.
8 Q Reported to the company?
9 A 10/16/78.
10 Q Now, the second sheet is another claim
11 record, is th at right, computer claim record? It is this
12 document 0309 29?
13 A Yes.
14 Q It indicates an accident on 10/8/78, is
15 that right?
16 A Yes.
17 Q With Ernest Rago as the driver?
18 A Right.
19 Q And if we come down again to suffix 3, down
20 below, come a cross to what has been paid under the PIP
21 coverage, it says $1500.00, is that right?
22 A Yes.
23 Q And that is the amount of the maximum
24 amount of a f uneral benefit, isn't that correct?
25 A Yes.
284
• •
1 Q Two documents later we come to a death
2 certificate. This is for Ann Marie Rago, is that right?
3 A Yes.
4 Q It shows the date of death as October 10,
5 1978, is that right?
6 A October 8th.
7 Q I am sorry, October 8, 1978. Down in the
8 lower right hand corner, describe how inJury occurred,
9 does it say d ecedent fell from rear door of moving motor
10 vehicle?
11 A Yes.
12 Q And as far as Ann Marie's age, Mr. Kerr
13 asked you if any claim for work loss benefits had been
14 made on behal f of Ann Marie Rago. Her date of birth is
15 given as 10/2 7/74, is that correct?
16 A Yes.
17 Q And her accident is October of 1978. So
18 she would be three years old, is that correct?
19 A Well, Yes, about.
20 Q Now, what proof of loss would you have
21 needed to pay work loss benefits to Ann Marie Rago?
22 A What was the date of that? '78? We
23 wouldn't have paid in '78. We were not required to pay
24 wages for a minor.
25 Q And have you paid it since 1978?
285
•
1 A No.
2 Q Now, Mr. Hagin, there are claims of
3 sisters, the O'Neil sisters, Deborah and Laurie. I am
4 Just going t o show you one of the files. We can look at
5 both of them if you like, although I think the
6 documentatio n provi ded on them was the same. Daes
7 Harleysville have a claim file on the O'Neil sisters?
8 A No.
9 Q The first document in Deborah O'Neal's
10 trial file, Plainti ffs' Exhibit 19, is another home office
11 claim index with a number 030881, is that correct?
12 A Yes.
13 Q And this identifies the named insured as
14 Deborah O'Ne il, is that correct?
15 A Yes.
16 Q And the claimant as the insured, it Just
17 says insured ?
18 A Yes.
19 Q And the accident loss date is down at
20 3/2/79, is that right?
21 A Yes,
22 Q And reported to the company 3/5/79?
23 A Yes.
24 Q And then the next document that bears a
25 number of 030898, what is this document?
286
• •
1 A This is a policy -- a microfiche printout
2 of a policy re cord.
3 Q Does it show an accident on -- I mean does
4 it show Debora h's date of birth as 10/8/60?
5 A Yes.
6 Q And her profession as a waitress?
7 A Yes.
8 Q What is the third document with the number
9 of 030899?
10 A That is a policy printout for a Joseph and
11 Stephanie O'Neil.
12 Q Okay. We come down to the bottom line on
13 that printout. Is there an accident -- or a loss date
14 noted?
15 A 3/2/79, yes.
16 Q And the driver is noted as whom?
17 A Deborah O'Neil.
18 Q And then this is the document from her
19 parents, from Stephanie and Joseph O'Neil's policy, is
20 that right?
21 A Right.
22 Q Okay. If we come over to under the PIP
23 coverage, was there $1500.00 paid in PIP benefits?
24 A Yes.
25 Q Was there also collision paid?
287
• •
1 A Yes.
2 Q If we go back in the file, about 13 or 14
3 pages, we will come to a letter from Harleysville, is that
4 right?
5 A Yes.
6 Q And it is the letter dated March 13, 1979?
7 A Yes.
8 Q And Mr. Kerr -- or, Mr. Hagin, you agree
9 that both Debo rah and Laurie O'Neil were killed as a
10 result of that accident? That is not an issue in dispute
11 here, is it?
12 MR. KERR: Not an issue.
13 BY MS. SH UMAN:
14 Q This letter indicates the insurance
15 coverage that we have on Deborah O'Neil and Laurie O'Neil
16 covering funer al and burial expenses up to $1500.00 each
17 person. Enclo sed are our drafts in the amount of $1500.00
18 each whic h wil l cover $3,000.00 of the total you have on
19 these peo ple. And who signed that letter?
20 A Frank Delaney, manager of our Erie,
21 Pennsylva nia, office.
22 Q And to whom were these checks sent?
23 A To the funeral home, Bowers Funeral Home.
24 Q Now, what information did Harleysville have
25 to gather befo re it would have paid funeral benefits?
288
• •
1 A Funeral benefits? Probably Just the death
2 certificate and coverage verification.
3 Q So You might not have sent a PIP
4 application out on this claim, is that right?
5 A Well, they should have. That, that is on
6 every PIP cl aim, a PIP form, yes. Application for
7 benefits is required on every PIP claim.
8 Q But you Just indicated that in light of the
9 fact that funeral was being paid and only funeral, all You
10 needed was a funeral bill and a death certificate?
11 A I am sorry, in addition to the PIP
12 application.
13 Q So there must have been a PIP application
14 in these claims, is that right?
15 A There should have been.
16 Q And it must have been returned to
17 Harleysville, is that right?
18 A It should have been.
19 Q And that information, if these girls had
20 been employed -- which they were -- would have been on the
21 PIP application, is that right?
22 A It should have been.
23 Q And if it wasn't complete, then it went
24 back to the Harleysville adJuster, is that correct?
25 A Yes.
289
• •
1 Q And it was his yob to get that information,
2 correct?
3 A Yes.
4 Q And it was Harleysville's responsibility to
5 decide the benefits that were due to these people, is that
6 right?
7 A Yes.
8 Q Was any work loss benefit paid on either of
8 these clai ms?
10 A No.
11 Q One final claim we will talk about, Mr.
12 Hagin.
13 Q Mr. Hagin, does Harleysville have a file
14 David Barr ett?
15 A No.
16 Q I am showing you the Barrett trial file.
17 This is a document provided by Harleysville, serial number
18 030874, is that right?
19 A Yes.
20 Q Another home office claim index, correct?
21 A Yes.
22 Q It identifies the insured as David Barrett,
23 correct?
24 A Yes.
25 Q And the claimant as Daniel Shade?
290
• •
1 A Yes.
2 Q And the loss date is?
3 A 7/22/78, reported 7/24/78.
4 Q And does Harleysville have any information
5 beyond this h ome office claim index on this claim?
6 A There are no documents in there from --
7 MR. KERR: No.
8 THE WITNESS: Apparently not.
9 BY MS. SHUMAN :.
10 Q All right. I am showing You a document
11 dated August 29, 1978. It is under a section of documents
12 headed docume nts from plaintiff's file, in other words,
13 documents sup plied by the claimant. And it is headed Helt
14 Funeral Home, is that right?
15 A Yes.
16 Q And that funeral home was in Lock Haven,
17 Pennsylvania, is that correct?
18 A Yes.
19 Q And the letter says Dear Gordon, we
20 received the Social Security and the Harleysville
21 Insurance Company allowance. The balance comes out as
22 listed below. And then it says our services, $1935.00,
23 Social Security $255.00, Harleysville $1500.00. Balance
24 $180.00. Is that correct?
25 A Yes.
291
• •
1 Q So it would appear Harleysville paid a
2 funeral benef it on this claim, wouldn't it?
3 A Yes.
4 Q And You indicated earlier that in order to
5 pay a funeral benefit, you would have needed a PIP
6 application, wouldn't You?
7 A Yes.
8 Q And if that application had been filled out
9 properly, it would have indicated Mr. Barrett's
10 employment, i s that correct?
11 A Should have.
12 Q And if it wasn't filled out properly, it
13 was Harleysvi lle's responsibility to get that information,
14 correct?
15 A Yes.
16 Q Make sure it was filled out?
17 A Yes.
18 Q It has was Harleysville's responsibilities
19 to pay the be nefits due, correct?
20 A Yes.
21 Q Were any work loss benefits paid with
22 regard to the estate of David Barrett?
23 A No.
24 MS. SHUMAN: I have no further questions.
25 MR. KERB: Your Honor, I have very few
292
•
1 questions.
2 THE COURT; All right. Go ahead.
3
4 REDIRECT EXAMINATION
5 BY MR. KERR:
6 Q Going back to the Leon Cron claim, I show
7 You Defendant Exhibit 54. I believe you have already
8 identified tha t. Is there any information there
9 concerning any PIP benefit s having ever been paid for a
10 claim of Leon Cron by PIP benefits? I mean funeral,
11 survivors, any thing.
12 THE COURT: That is C-r-o-n?
13 MR. KERR: Yes.
14 THE COURT; And Defendant 54.
15 MR. KERR: Defendant Exhibit 54.
16 THE WITNESS: No,
17 BY MR. KERR:
18 Q Turning to the file of --
19 THE COURT: Just a minute.
20 BY MR. KERR:
21 Q If there had been a claim or benefits paid
22 for funeral --
23 THE COURT: Just a second.
24 MR, KERR: I am sorry, Your Honor,
25 THE COURT: What was the question about
293
• •
1 D-54?
2 MR. KERB: The question was is there any
3 record there of any benefits having been paid on the
4 No-Fault Act for survivors, funeral or wage loss.
5 THE WITNESS: No.
6 I should explain that D-54 is a policy
7 printout from the microfiche. And if there were an
8 accident reported for Mr. Cron on 3/25/80, it should be on
9 this policy. And it is not listed at all.
10 BY MR. KERR:
11 Q Turning to the claim of John Handschin, I
12 show you Defe ndant Exhibit Number 162.
13 THE COURT: 162?
14 MR. KERR: 162.
15 THE COURT: Sir.
16 BY MR. KERR;
17 Q Is there any evidence on Defendant's 162 of
18 any benefits, work loss benefits, having been -- excuse
19 me, No-Fault Act benefits having been paid, that is
20 survivors benefits, funeral benefits or work loss
21 benefits, on behalf of John Handschin?
22 A No, no indication.
23 Q If such benefits had been paid, where would
24 it appear on D-162, if anywhere?
25 A Under the letters PIP.
294
•
1 Q And is that in the lower right hand corner?
2 A Lower right hand corner, bottom line.
3 Q And turning finally to the claim of Elwood
4 Houser, and Defendant Exhibit 201. Again I believe you
5 have al ready identified this document.
6 Is there any evidence in Defendant Exhibit
7 201 of any benefits, funeral benefits, survivors benefits
8 or wage loss benefits, having been paid at any time on
9 behalf of Elwood Houser under the No-Fault Act?
10 A You are talking about the particular claim
11 of Nove mber '83?
12 Q Yes.
13 A No, no indication. In fact, that claim
14 isn't i ndicated on here. It is not listed on the policy
15 record at all.
16 MR. KERR: No further questions.
17 MS. SHUMAN: One recross, if I may, your
18 Honor.
19
20 RECROSS-EXAMINATION
21 BY MS. SHUMAN:
22 Q On the Defendant's Exhibit 162 --
23 A He didn't leave those with me.
24 MR. KERR: I am sorry.
25 BY MS. SHUMAN:
295
• •
1 Q Let's use mine. Now, Harleysville's
2 insured is Mr . Benfield, is that correct?
3 A Yes.
4 Q Mr. Benfield, you know the history of this
5 accident, is that right?
6 A Well --
7 Q Mr. Benfield was driving a vehicle and
8 struck and ki lled a pedestrian named Mr. Handschin, is
9 that correct?
10 A I am not sure.
11 Q Well, then you had better get whatever file
12 you have that would allow you to at least identify that
13 much.
14 THE COURT: Stipulate, counsel?
15 MR. KERR. Who are we talking about?
16 THE WITNESS; Benfield.
17 MR. KERR: I am sorry, your Honor, I didn't
18 hear the ques tion. I was getting another document.
19 THE COURT: Ask for your stipulation.
20 MS. SHUMAN; Will you stipulate that Mr.
21 Handschin was a pedestrian struck and killed by
22 Harleysville insured Benfield?
23 MR. KERR: I will stipulate that Mr.
24 Handschin was a pedestrian who died on November 11, 1979,
25 and was -- and that Harleysville insured, Stanley W.
296
~ ~
1 Benfield, yes, under policy of AC390371.
2 THE COURT: And that Benfield was the
3 driver that killed Handschin, is that it?
4 MS. SHUMAN: Yes.
5 THE COURT; Is that what you want, ma'am?
6 MS. SHUMAN: Yes, sir.
7 THE COURT; Do you agree?
8 MR. KERB; Yes.
9 BY MS. SHUMAN:
10 Q Looking at this D-162, Harleysville was
11 notified of this accident, correct?
12 A Yes.
13 Q And indeed --
14 A Excuse me, we were notified of an accident
15 on November 11, '79.
16 Q And that is the accident that we are
17 speaking abo ut involving Mr. Handschin, is that correct?
18 A The same date, yes.
19 THE COURT: Well, where does that show?
20 MS. SHUMAN; On the last line, your Honor,
21 it has claim number and then it has date. The very last
22 line of the exhibit. It has a long claim number and then
23 it says date 11/11/79.
24 THE COURT: Oh, those numbers all run
25 together.
297
• •
1 MS. SHUMAN: That is correct,
2 BY MS. SHUMAN:
3 ~ Q Isn't that right, Mr. Hagin? Isn't that
4 where we shoul d be looking?
5 A Yes.
6 Q And the operator number then is Stanley
7 Benfield?
8 A Yes,
9 Q If we come across under bodily inJury, BI,
10 there is a pay ment of $7,000,00, is that correct?
11 A Yes.
12 Q And since there has been a stipulation that
13 this accident involved Mr. Handschin, then that $7,000.00
14 bodily injury claim was paid on behalf of Mr. Handschin,
15 is that right?
16 A It is not -- this is not proof of that
17 because there could be more than one person involved.
18 There was a BI payment made of $7,000.00,
19 MS. SHUMAN: Mr. Kerr, will you stipulate
20 there was only Mr. Handschin struck and killed by Mr.
21 Benfield? That there was not another pedestrian struck at
22 the same time?
23 THE WITNESS: That is all right. I guess
24 if it was a pedestrian we can say --
25 MR. KERR: That we have no file. The only
298
• •
1 thing I can stipulate to is whatever, you now, Mr. Hagin
2 can deduce from D-162.
3 BY MS . SHUMAN:
4 Q Mr. Hagin, did you look for a liability
5 file?
6 A No, there is only one file.
7 Q And there clearly was a liability claim,
8 isn't that cor rect?
9 A Yes.
10 Q And any No-fault claim would be in that
11 same file, is that correct?
12 A Yes.
13 Q And you can't find the liability file?
14 A Either file, right.
15 MS. SHUMAN: No further questions.
16 MR. KERR. I have no further questions,
17 your Honor.
18 THE COURT: You may step down.
19 THE WITNESS: Thank you.
20 THE COURT: Anything else?
21 MR. KERR: No, nothing else at this time,
22 Your Honor.
23 THE COURT: We have set the argument aside
24 for 9:00 a.m. on A ugust 2, 1989. And we have reserved a
25 full day to a rgue the facts and the law.
299
• •
1 Ms. Shuman, when can You give me a brief?
2 MS. SHUMAN. I -- I can give You a brief in
3 two weeks.
4 THE COURT: That is fine. I don't have to
5 push You that much.
6 MS. SHUMAN: I didn't know what kind of a
7 deadline You were looking for -- what kind of a time table
8 You were looking for.
g THE COURT; Well, take as much as You want.
10 But I want to get Yours first and then I'm going to give
11 the defense a little time to respond. Basically they can
12 write their brief now. But I will give them a~little
13 response time. And then I want both briefs before the
14 argument so that I can review these documents in the
15 meantime and review the briefs before the argument.
16 With that in mind, ma'am?
17 MS. SHUMAN: Three weeks?
18 THE COURT: This is the 15th. So You will
19 give me Your brief July 10th, is that right?
20 MS. SHUMAN: Fine.
21 THE COURT: I take it that you have no
22 rebuttal to put in on this.
23 MS. SHUMAN: No, your Honor.
24 THE COURT: I would like to have your brief
25 by the 21st, Mr. Kerr.
300
• •
1 MR. KERR: That is fine, Your Honor.
2 THE COURT: Anything else to mop up?
3 MR. KERR: The only other thing I can think
4 of, Your Honor, is I had undertaken to notify everybody
5 promptly if we had any hearsay obJections to Plaintiffs'
6 Exhibit 19. I don't anticipate any, but if we do, why
7 don't we -- if it would be acceptable, we will SUpp1Y that
8 at the same time as the list of exhibits next Wednesday.
g THE COURT: That is fine.
10 MR. KERR: June 21st.
11 THE COURT: All right.
12 {Whereupon, the following Order was
13 entered.)
14 AND NOW, June 15, 1989, 4:35 p.m., both
15 sides having rested their cases, with the possible
16 exception of some short period of testimony from defense
17 witness Hagin, we fix argument of the suggested Findings
18 of Fact and suggested Conclusions of Law for Wednesday.
19 August 2, 1989, at 9:00 a.m. We direct plaintiffs'
ZO counsel to furnish us with an argument brief by July 10,
21 1989, (and also a brief to defense counsel at that time)
22 and we direct defense counsel to furnish the court and
23 plaintiffs' counsel with a brief by July 21, 1989, so that
24 the court can properly review applicable exhibits and
25 briefs prior to oral argument in the case.
301
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1 BY the Court,
2 7s/ Georoe F. Hoffer
3
4 THE COURT: Is there anything else that You
5 would like me to put in there, Ms. Shuman?
6 MS. SHUMAN. No, Your Honor.
7 THE COURT: Mr, Kerr?
g MR. KERR: No, Your Honor.
g THE COURT: Thank You, counsel.
10 MR. KERR: Thank You very much.
11 MS. SHUMAN: Thank You.
12 THE COURT: Let the record reflect that the
13 court will c onsider as plaintiffs' official exhibits the
14 working file handed to the court by Plaintiffs' counsel,
15 much in the same manner that we have taken defense
16 notebooks. That would constitute the record of exhibits
17 in the case.
1g (Whereupon, the proceeding was concluded
19 at 4:40 p.m.)
20
21
22
23
24
25
302
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CERTIFICATION
I hereby certify that the proceedings are contained
fully and accurately in the notes taken by me on the above cause
and that this is a correct transcript of same.
1989
Gt~-c. ~.
Mar T. Farley
Official Reporter
The foregoing record of the proceedings upon the above
cause is hereby approved and directed to be filed.
1989
e e E. offer, J•
e=
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HOYLE, MORRIS & KERB
By: Alexander Kerr
Wagner D. Jackson, Jr.
Dennis R. Bartholomew ,.._
I.D. Nos. 00634,'54933, 38856
One Liberty Place
1650 Market Street
Suite 4900
Philadelphia, PA 19103
HUGH J. COLEMAN,
G.C. SKIPPER, and _
JAMES M. LAU, et al., -
Plaintiffs,
v.
HARLEYSVILLE MUTUAL =
INSURANCE COMPANY,
Defendant. -
..
V ~~ ~'/I
~ ~I ~\
~r~ ~ c~~
IN THE COURT OF
COMMON PLEAS
CUMBERLAND COUNTY, PA
CIVIL ACTION - LAW
NO. 1569 1986
CLASS ACTION
OBJECTIONS OF HARLEYSVILLE
MUTUAL INSURANCE COMPANY TO
PLAINTIFFS' TRIAL EXHIBIT 19
To the extent that they are offered as aids to the
Court, Defendant Harleysville Mutual Insurance Company
("Harleysville") does not object to plaintiffs' summary sheets or
work sheets cantained within plaintiffs' Exhibit 19 "trial files"
of individual plaintiffs, and they can be admitted on the same
basis as other summaries previously admitted. Harleysville does
object to such summary sheets or work sheets as hearsay if
offered as substantive evidence in this action.
Harleysville objects to the admission of the following
documents contained within Exhibit 19 as hearsay:
Verification of Patricia Ailes
(the last document in the William Ailes
trial file).
. Page five, line fifteen to line twenty-five
of the deposition of June Bastian (contained
within the William Bastian, Jr. trial file).
Verification of Patricia Ailes (the last
document of the Brian Boltz trial file).
Letter of April 13, 1989 from Allan Horwitz
to Richard Angino (contained within the
Teresa Dale trial file).
Verification of Brenda Dempsey (the last _
document within the Will Dempsey trial file).
Verification of Howard Dupras (the last
document within the Helen Dupras trial file).
Undated letter
April 15, 1989
April 17, 1989
Undated letter
documents cont.
trial file).
from Mrs. Foley to Ms. Shuman;
letter from Mrs. Arthur Stokes;
letter from Thomas J. L. Huillier;
from Edward A. Tenza (all four
3ined within the Timothy Foley
Verification of Ann Marie Gibson (the last
document of the Richard Gibson trial file).
Verification of DeHaven Griffith (the last
document of the Isabelle Griffith trial file).
Verification of Norman E. Groff (the last
document of the Reuben Groff trial file).
Verification of Marguerite Johnson (the last
document of the Irene Hertz trial file).
Verification of Emmeline Bauer (the last
document of the Ludwig Hilpert trial file).
. Page five, line twenty-one to page six, line
five of the deposition of Elwood Guy Houser, Jr.
(contained within the Elwood Guy Houser, III
trial file).
Verification of Alice Hutton (contained
within the trial file of J. Wilson Hutton).
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i
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1
Verification of Donald J. Jenkins (the last
document in the Alice Jenkins trial file).
Page thirteen, line nineteen to page fourteen,
line eight of the Patricia Katona deposition
(contained within the Denise Katona trial file).
Verification of Walter and Clifford Long (the
last document in the Patricia Long trial file).
Verification of William Lyons (the last document
in the Leamon Lyons trial file).
Verification of Carol A. DeMayo; Letter of
April 14, 1989 from Carol A. DeMayo to Angino &
Rovner; Page four, lines twelve to fifteen of the
deposition of Peter Pataro, Jr. and Josephine
Malvarose (all contained within the Quedo
Malvarose trial file).
Verification of Genevieve Carson (the last
document in the Eugene McDonald trial file).
Verification of Donald E. Nauss, Jr. (the last
document in the Kathleen Nauss trial file).
Verification of Darlene Peachy (the last document
in the Arthur Peachy trial file).
Verification of Tina Place (the last document
in the Richard Place trial file).
Verification of Ernest Kardas (the last document
in the Temi Ritter trial file).
Verification of Nabeel Saoud~(the last document
in the Ghassam Saoud trial file).
Verification of Geraldine Scanlon (the last
document in the James Scanlon trial file).
-3-
Verification of Aaron H. Shenk (the last
document in the Robert Shenk trial file).
Verification of Mrs. John M. Sluck (the last
~documeht ~in the Denise Sluck trial file).
. Verification of Steve A. Smith (the last
document in the Betty Smith trial file).
. Verification of Kathleen J. Smoll (the last
document in the Walter Smoll trial file).
. Page five, lines seventeen to nineteen of the
deposition of Melvin Sterling (contained within
the Jacob Sterling trial file).
Verification of Elma A. Arnold; April 17, 1989
letter from Elma A. Arnold re: decedent's income
form; (both documents contained in the Carla
Vanessa Payne Tiller trial file).
trial file).
Verification of Antoinette Seig (the last
document in the Arthur Woodruff trial file).
The foregoing verifications are the affidavits
originally objected to by Harleysville and disapproved by the
Court in the discovery conference of May 10, 1989. The
verifications listed above were signed by persons who were not
deposed in this action, and hence Harleysville had no opportunity
to cross-examine the affiant. The letters and other documents to
which Harleysville objects are not Harleysville business records,
and are not part of any other exception to the hearsay rule.
Since Harleysville has not had the opportunity to cross-examine
plaintiffs as to the origin, condition, or circumstances
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surrounding the creation of the documents, they are objected to
as hearsay.
Respectfully submitted,
Alexander Kerr
Dennis R. Bartholomew
Wagner D. Jackson, Jr.
HOYLE, MORRIS & KERB
One Liberty Place
Suite 4900
1650 Market Street
Philadelphia, PA 19103
(215) 981-5715
Attorneys for Defendant
HARLEYSVILLE MUTUAL
INSURANCE COMPANY
Dated : June Tai, 19 8 9 .
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