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HomeMy WebLinkAbout89-2885 CivilROBERT F. NEALY and MARYL1N NEALY, Administrators: of the Estate of TROY ROBERT NEALY, deceased, Plaintiffs VS. STATE FARM AUTOMOBILE INSURANCE COMPANY and H. DAVID MILLER, JR., Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW 89-2885 CIVIL IN RE: PLAINTIFFS' MOTION FOR NEW TRIAL~ BEFORE BAYLEY, HESS AND OLER, J.J. OPINION AND ORDER The complaint in this case recites that Troy Robert Nealy, the son of the plaintiffs/administrators, died in a motor vehicle accident on February 6, 1988. The policy limits of $300,000 were tendered by the tortfeasor whose negligence caused Troy's death. The estate turned to underinsurance motorist coverage which it has with the defendant, State Farm Mutual Automobile Insurance Company. According to its written terms, while the liability limits of the Nealys' automobile insurance police are $250,000/$500,000, their uninsured and underinsured motorists' bodily injury limits are only $25,000/$50,000. The Nealys brought suit against State Farm contending that their election of $25,000/$50,000 ofuninsured/underinsured motorists' (UM/UIM) benefits was not valid and that their policy should be reformed to reflect UIM coverage in amounts equal to their bodily injury liability limits. In their complaint, the plaintiffs also brought a claim against Mr. Miller, While styled as a motion for new trial, the plaintiff seeks, primarily, to remove a nonsuit. 89-2885 CIVIL their State Farm Insurance Agent, alleging that Mr. Miller (1) failed to properly advise them regarding the level of UIM benefits they should elect or (2) failed to implement their specific instructions. Plaintiffs filed a Complaint on August 10, 1989, resulting from a motor vehicle accident which occurred on February 6, 1989 resulting in the death of the Nealys' son. In 1989, State Farm and Mr. Miller moved for judgment on the pleadings on the basis that Plaintiffs' signatures on the Important Notice form mandated by Section 1791 of the FRL meant that their election was voluntary because their signatures constituted evidence of the Plaintiffs' "actual knowledge and understanding of the availability of [higher] limits as well as the benefits and limits [they] selected." 75 Pa. C.S.A. 1791. This Court denied this Motion on March 22, 1990, and permitted discovery to be pursued to see if the Plaintiffs could rebut the otherwise applicable presumption. Next, the Plaintiffs moved to sever their claim against State Farm from that against Mr. Miller and to compel arbitration of the claim against State Farm. On October 19, 1991, this Court granted that motion and stayed all proceedings against Mr. Miller pending resolution of the arbitration proceedings between Plaintiffs and State Farm. On January 16, 1995, the arbitrators issued an award in favor of State Farm holding that the aggregate amount of UIM benefits under the Plaintiffs' State Farm policies was limited to $50,000 - $25,000 from each of the two policies. On January 25, 1995, the Plaintiffs filed an application to vacate, modify, and/or correct the award of the arbitrators. On July 22, 1996, this Court denied the Nealys' application. On August 14, 1996, the Nealys filed an appeal from that decision with the Pennsylvania Superior Court. 2 89-2885 CIVIL On May 8, 1997, the Pennsylvania Superior Court denied the Nealys appeal and affirmed this court's decision. On July 18, 1997, the Pennsylvania Superior Court denied the Nealys request for reargument or reconsideration. On August 13, 1997, the Nealys petitioned the Pennsylvania Supreme Court for allowance of appeal of the Superior Court's decision. The Supreme Court denied the Nealys' petition for allowance of appeal by order on March 3, 1998. In September 1997, the Nealys filed an action against State Farm in the United States District Court for the Middle District of Pennsylvania. The Nealys asserted that State Farm's decision to limit the Nealys' claim for UIM benefits to $50,000 was made in bad faith in violation of 42 Pa. C.S.A. 8371 (1998). The district court dismissed the complaint on August 5, 1998 and the Nealys appealed to the Court of Appeals for the Third Circuit. The court of appeals affirmed the district court on December 15, 1999 and denied the Nealys' petition for rehearing on January 12, 2000. After the Pennsylvania Supreme Court's denial of the Nealys' petition for allowance of appeal in their action against State Farm, the stay in this matter originally ordered in the October 9, 1991 order was lifted with respect to the Nealys' negligence claim against Mr. Miller. The case proceeded to trial in March of 2002. At the conclusion of the plaintiffs' case, the undersigned granted the defendant's motion We continue to believe that the grant of a compulsory nonsuit was for a compulsory nonsuit. proper. The plaintiffs argue, inter alia, that the grant of a nonsuit violated the coordinate jurisdiction or "law of the case" doctrine. A closer examination of this court's prior rulings, however, belie this contention. When State Farm and Mr. Miller first moved for judgment on the 3 89-2885 CIVIL pleadings in 1989, this court's ruling on the motion was based on whether the signatures on the Section 1791 "Important Notice" forms were voluntary. We cited Prudential Property and Cas. Ins. Co. v. Pendleton, 858 F.2d 930 (3rd Cir. 1988) (reargument denied), to suggest that "the signature on the waiver form must be voluntary, and the insured must have read or at least had the reasonable opportunity to read the form and understand its contents." We noted that "the plaintiffs make certain factual allegations concerning a lack of this opportunity." Opinion and Order, p. 5, March 22, 1990. Accordingly, we denied the defendant's motion for judgment on the pleadings to give the plaintiffs the opportunity to present testimony at trial to prove that the forms were not signed voluntarily. In 1996, the Superior Court of Pennsylvania issued its decision in Breuninger v. Pendleton Insurance Co., 675 A2.d 353 (Pa. Super. 1996). The Breuninger court held that when the insured was provided with the "important notice" form, a conclusive presumption arose that the insured had notice of the UM/UIM limits and coverages available. Id. at 357. In the instant case, suit was brought against the insurance agent for failing to provide certain information to the insured. In light of the holding in Breuninger, however, there is conclusive presumption that the Nealys had notice of the limits and coverages available. Mr. Nealy's testimony was also a factor in determining whether he had voluntarily The testimony elicited from Mr. Nealy on this matter is accepted the UIM limits on his policy. as follows: Q: Now, let's to back to the Important Notice at the bottom of the page, and again I'll show you where I'm asking you to read. Just look at the last paragraph under 6. Do you see that where it says under Important Notice under 6? If you could read just the last paragraph of that -the last sentence of that paragraph. 4 89-2885 CIVIL A: The last sentence? Q: Right. It says your signature? A: Your signature on this notice or your payment of any renewal premium evidences your actual knowledge and understanding of the availability of these benefits and limits as well as the benefits and limits you have selected. Q: And you had a chance to read that before you signed the document? A: Probably did. Q: Well, did anybody prevent you from reading it? A: No. Q: So you did have the opportunity to read it? A: Probably did, yeah. Q: So when you left Mr. Miller's office in June of 1986, you knew what coverage limits you had at that time, right? A: I'm not sure ifI did or not. Q: Well, you knew that you had been there to purchase insurance from State Farm through Mr. Miller, correct? A: Right Q: And you knew that you had signed this application that had identified the coverages on the lower left side of the page, right? That's page 1, tab 5. A: Right. Q: And you signed the Important Notice form indicating that you had selected certain un and uninsured coverages; is that right? A: Right. (Jury Trial Proceedings, pg. 160-162). 89-2885 CIVIL Q: And so from 1986 through 1990, when you told us you changed your U selection limits, your un and underinsured selection limits, you were receiving renewal notices like this which indicated the coverages you had; is that correct? A: Right. Q: And if you look on the upper right of this document, it says uninsured and underinsured motorist, bodily injury, $25,000, $50,000? A: Right. (Jury Trial Proceedings, pg. 202) Q: In fact, in 1986 you understood that there's a relation between the amount of premium you pay and the amount of coverage you receive; is that right? A: Right. Q: In other words, if you pay less premium, you get less coverage. If you pay more premium, you get more coverage? A: Right. (Jury Trial Proceedings, pg. 206) Q: Do you agree, Mr. Nealy, that when you signed the application on June 30 and signed the Important Notice on June 30 that there was no - no one put pressure on you to sign either document? A: No. Q: Is that correct? A: Correct. Q: No one put pressure on you? A: No. 6 89-2885 CIVIL Q: That is a correct statement? A: That' s correct. Q: Okay. And you agree that you could have left Mr. Miller's office at any time without signing the documents if you felt uncomfortable for any reason? A: Yeah. Q: And you could have left Mr. Miller office at any time if you did not understand anything, and could not get an adequate answer; is that right? A: Yeah. Q: But when you left Mr. Miller's office on June 30, 1986, you knew that the coverage limits you had for your uninsured and underinsured were $25,000 and $50,000 and not the hundred thousand, 300,000 you had with Erie; is that correct? A: It could have been yeah. Q: Isn't that what you told us in your deposition? A: Probably. Q: And isn't that what you told me yesterday? (Jury Trial Proceedings, pg. 207-208). By this point in the proceeding, it had become clear that Mr. Nealy had signed the "Important Notice" form and that he had done so voluntarily. This was not the state of the factual record when the court ruled on the defendant's motion for judgment on the pleadings some ten years ago. This left the court in the position of charging the jury to the effect that the defendant could be negligent (1) in failing to explain something which the plaintiffs were conclusively presumed to understand or (2) in failing to provide insurance coverage which the plaintiffs did not want. Faced with the prospect of having to give such 7 89-2885 CIVIL oxymoronic instructions, the court indicated to the defendant that we were now prepared to agree with the point he had been attempting to make all along. The plaintiff also seeks a new trial on the basis that we should have recused. Prior to the trial it was made clear that the court was acquainted with Mr. Miller as a fellow member of the board of a large charity. No request for recusal was made nor, in all candor, would it have been granted had it been made. My acquaintance with Mr. Miller is at best passing and the handful of words which we have exchanged over the years has consisted entirely of pleasantries. This matter was, in any event, heard by a jury. The ultimate decision was set to be made by twelve people who, presumably, would have no acquaintance with Mr. Miller whatsoever. ORDER AND NOW, this day of January, 2004, following argument thereon, the motion of the plaintiffs for a new trial is DENIED. BY THE COURT, Richard C. Angino, Esquire For the Plaintiffs Robert E. Kelly, Jr., Esquire For the Defendant H. David Miller :rlm Kevin A. Hess, J. ROBERT F. NEALY and MARYL1N NEALY, Administrators of the Estate of TROY ROBERT NEALY, deceased, Plaintiffs VS. STATE FARM AUTOMOBILE INSURANCE COMPANY and H. DAVID MILLER, JR., Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW 89-2885 CIVIL IN RE: PLAINTIFFS' MOTION FOR NEW TRIAL BEFORE BAYLEY, HESS AND OLER, J.J. ORDER AND NOW, this day of January, 2004, following argument thereon, the motion of the plaintiffs for a new trial is DENIED. BY THE COURT, Richard C. Angino, Esquire For the Plaintiffs Robert E. Kelly, Jr., Esquire For the Defendant H. David Miller :rlm Kevin A. Hess, J.