by Mark Bauman | Dec 24, 2021 | General Liability and Casualty, Legal News
In Brown v. Greyhound Lines, Inc., 2016 PA Super 108 (Pa. Super. Ct. May 24, 2016), the Pennsylvania Superior Court reviewed issues concerning the attorney-client privilege and the work product doctrine in the context of attorney and third-party administrator communications.
The lawsuit commenced when 42 plaintiffs filed personal injury actions against Greyhound for injuries sustained in a bus accident. FirstGroup owns, operates, and/or controls Greyhound. Appellants Greyhound Lines and FirstGroup America appealed the trial court’s order to produce discovery requests.
One discovery request at issue concerned a mock deposition of the bus driver created for appellants’ counsel in preparation of a deposition in another case. Greyhound contended the trial court erred in concluding, “a recorded statement, videoed by a third party, transcribed by a Court Reporter is clearly within [the definition of a] discoverable statement identified by Rule 4003.4,” and argued that the mock deposition should be afforded protection under the attorney-client privilege.
Greyhound asserted two issues for review regarding the mock deposition. First, “whether communications between counsel for a party and the party’s claim administrator, which hired counsel, are protected by the attorney-client privilege.” (emphasis added). Second, in the alternative, “whether communications between counsel for a party and the party’s claim administrator, who is investigating on counsel’s behalf, are protected by the attorney-client privilege.” (emphasis added). The court waived both issues on the basis that Greyhound’s brief failed to sufficiently develop an argument and merely cited case law without applying it to the case at hand.
Even if Greyhound’s brief did sufficiently develop the issue to avoid waiver, the court explained, Greyhound failed to satisfy its initial burden of proof producing adequate facts to show privilege is applicable to the mock deposition. The court noted that the mock deposition was “never intended to be confidential.” Although it was unclear whether the videotape was actually shared, the trial court and Superior Court both noted it was clear that a court reporter and videographer were present while taking the bus driver’s statement. Therefore, the court concluded, “in the absence of an affidavit, statement, or testimony in support of the circumstance, Greyhound has not demonstrated a reasonable expectation that the videotaped statement would remain confidential.”
FirstGroup’s assertion that the trial court erred in ordering the production of the mock deposition was also waived. The court concluded that the issue was not before it, as FirstGroup failed to file a notice of appeal from the specific mock deposition order. The court also noted that FirstGroup’s brief adopted the arguments made by Greyhound, which it found insufficient. Therefore, the trial court’s order to produce the mock deposition was affirmed.
The second discovery request at issue was for the “contents of claim files, correspondence, and emails discussing the bus accident that were sent to or from any individual employed by Gallagher Bassett,” a third-party adjustment company which hired counsel and contractually handled claims and investigations for Appellants Greyhound and First Group. Greyhound and FirstGroup argued the information should have been afforded protection under the work-product doctrine. FirstGroup contended that although the information may have appeared at first to be a “recitation of investigative efforts of Gallagher,” it is clear after closer inspection that the documents “contain the mental impressions and/or legal theories that Gallagher Bassett intends to utilize in defending claims made by those injured in the bus accident.” The court found this argument to be conclusory, as FirstGroup failed to describe how or why the documents contained mental impressions.
Additionally, FirstGroup argued that the communications between counsel and Gallagher should have been afforded the protection of the attorney-client privilege because “unlike an insurance company, Gallagher is in a unique position and serves as a direct arm of Greyhound.” Gallagher was defense counsel “client representative,” and information relayed between Gallagher and its counsel should be afforded the same protection as if it were relayed directly to Greyhound. The court asserted, however, that FirstGroup cites no case law to support its contention. The issue was waived.
The court criticized appellants’ claim that any and all information contained in Gallagher’s file is privileged. Quoting the trial court, “Appellants have unreasonably and improperly claimed attorney-client privilege and mental impression privilege of Greyhound claims representatives [in order] to thwart proper discovery.” The trial court individually reviewed the hundreds of documents. Appellants, however, did not review the trial court’s decision “document by document,” and merely asserted the trial court erred in its ruling. Therefore, the court concluded, appellants failed to carry their burden of proof to claim privilege as to the second discovery request, and the trial court’s order was affirmed.
by Mark Bauman | Dec 23, 2021 | General Liability and Casualty, Legal News
In an opinion issued April 23, 2013, U.S. District Chief Judge J. Curtis Joyner denied a plaintiff’s motion to enforce settlement, while at the same time, admonishing defense counsel for their role in delaying the same.
The underlying case of Mackrides v. Marshalls, et al. involved an 86 year-old woman who suffered a hip fracture after falling on defendant’s property in 2009. Suit was subsequently filed in the United States District Court for the Eastern District of Pennsylvania, and the parties ultimately agreed to settle the case in July 2012. By April 2013, defense counsel had yet to provide plaintiff with a disbursement of funds or a draft release. Plaintiff’s counsel therefore filed a motion to enforce the settlement.
In response, defense counsel argued that because the plaintiff was a Medicare beneficiary, documentation from the Centers for Medicare and Medicaid Services (CMS) was required to confirm the amount of any lien on the settlement. According to the Medicare Secondary Payer Act and the Medicare Recovery Act, when a plaintiff’s medical expenses are paid by Medicare, Medicare is entitled to reimburse itself from any settlement reached in a pending lawsuit. While plaintiff’s counsel had previously produced an “interim” letter from CMS stating that no expenses had been paid by Medicare, defense counsel maintained that a “final demand letter” (issued after agreement on settlement terms) would be necessary before the submission of a draft release or disbursement of settlement funds.
Concurring with defense counsel’s analysis, Judge Joyner acknowledged that Medicare did indeed have a right to reimbursement based on the settlement reached between the plaintiff and defendant. However, he noted that given the time which had passed since the plaintiff’s injury, the statute of limitations for Medicare’s claim had nearly expired. As plaintiff’s counsel had already provided a letter from CMS stating that no Medicare payments had been made, Judge Joyner was “hard pressed to understand why defendants . . . failed to even tender a proposed release or settlement agreement to the plaintiff,” particularly in light of the plaintiff’s “advanced age.” By failing to provide a draft release, the court found such “non-action [on behalf of defense counsel] to be clearly dilatory, unreasonable and bordering on sanctionable conduct.”
The conduct of defense counsel notwithstanding, Judge Joyner held that without a draft release or written settlement agreement, the terms of the settlement had not been established on the record and thus, could not be enforced. While plaintiff’s motion was ultimately denied, the delay tactics of defense counsel did not go unpunished, as Judge Joyner ordered counsel to show cause as to why “appropriate trial and/or monetary sanctions” should not be imposed. Additionally, taking into account the proximity to which Medicare’s claim for reimbursement would be time-barred, both parties were ordered to show cause as to why immediate re-listing for trial should not be affected.
by Mark Bauman | Dec 22, 2021 | General Liability and Casualty, Legal News
In a three judge panel’s decision filed on November 17, 2010, the Superior Court in Zaleppa v. Seiwell affirmed an order of the trial court entered on October 26, 2009, which refused to allow the Appellant to pay the underlying verdict either (1) by naming Medicare, along with Appellee and her attorneys, as payees on the draft satisfying the verdict or (2) by paying the verdict into court pending notification from Medicare that all outstanding Medicare liens had been satisfied.
The underlying case at issue involved an automobile accident where Appellant admitted liability and a trial was held on damages only. After a judgment was rendered against Appellant, Appellant filed a post-trial motion arguing that because the Medicare Secondary Payer Act (MSPA) required all parties to protect Medicare’s interest when resolving conditional payments made by Medicare, the trial court should have allowed her to either name Medicare as a payee on the draft satisfying the verdict or alternatively, to pay the verdict into court pending notification from Medicare that all outstanding Medicare liens had been satisfied.
In ruling on the validity of the trial court’s order, the Superior Court first examined the relevant terns of the MSPA, noting that Medicare “may make payment [. . .] with respect to an item or service if a primary plan . . . has not made or cannot reasonably be expected to make payment with respect to such an item or service promptly[.]” 42 U.S.C.A. 1395y(b)(2)(B)(i). However, it was also noted that under the MSPA, the primary responsibility of payment for Medicare recipients falls on any primary, or private, insurance the recipient may have, i.e. the “primary payer,” with the remainder of payment of bills not covered by private insurance falling on Medicare, i.e. the “secondary payer.” Thus, the court concluded that a duty existed on behalf of the primary plan, as “an entity that receives payment from the primary plan,” to reimburse Medicare if the primary payer is ultimately responsible to pay for the medical treatment provided.
Notwithstanding the duty imposed on primary plans to reimburse Medicare, the court drew on 42 C.F.R. 411.22(c), stating that such recovery could only be sought by the government after the issuance of a recovery demand letter to the primary plan. More importantly, despite the establishment of a “private cause of action for damages” noted in the MSPA, the court further held that the MSPA did not allow a “private party to bring suit on behalf of the United States government for the reimbursement of conditional Medicare benefits,” either in a post-trial motion or at any other phase of litigation.
Thus, because they were the only parties involved in the underlying action, the judgment entered by the trial court determined the rights and obligations of Appellant and Appellee only. As such, according to the court, not only were the obligations owed to Medicare irrelevant, but the rights of Appellee would ultimately be subjected if Appellant was allowed to add Medicare as a payee. Therefore, because neither the MSPA nor Pennsylvania law authorized Appellant as a private entity to assert the interests of the federal government viz. Medicare, the court refused to allow Appellant to add Medicare as a payee to the draft satisfying the verdict.
by Mark Bauman | Dec 22, 2021 | General Liability and Casualty, Legal News
In an opinion issued on July 12, 2011, the United States Court of Appeals for the Third Circuit held that a defendant in a products liability case can rely on evidence that a product satisfied the standards of the U.S. Consumer Product Safety Commission. In so holding, the court reaffirmed its ruling in Berrier v. Simplicity Manufacturing, Inc., 563 F.3d 38 (3d Cir. 2009), cert. denied, 130 S.Ct. 553 (2009), stating that federal district courts applying Pennsylvania law to products liability cases should look to sections 1 and 2 of the Third Restatement of Torts, as opposed to section 402A of the Second Restatement Torts.
In Covell v. Bell Sports, the plaintiffs’ son was riding his bike to work in January 2007 when he was struck by an automobile entering a parking lot at Cardinal O’Hara High School. After settling a suit against the Archdiocese of Philadelphia, the plaintiffs filed a second suit against Bell, the manufacturer of the bike helmet, alleging that it failed to minimize their son’s injuries.
At trial, the District Court looked to Berrier, wherein the Third Circuit Court of Appeals held that while the Supreme Court of Pennsylvania had not yet answered whether bystanders could recover on design defect claims, the Supreme Court would adopt the Restatement (Third) of Torts if confronted on the issue. Applying the Third Restatement, the District Court then permitted Bell to introduce expert testimony that was based in part upon the United States Consumer Product Safety Commission’s Safety Standard for Bicycle Helmets (the “CPSC Standard”), an administrative regulation which provides guidelines for various helmet specifications. After experts offered by both parties agreed that the CPSC Standard was satisfied by Bell’s helmet, the District Court instructed the jury, pursuant to the Third Restatement of Torts, that evidence of bicycle helmet industry standards such as the CPSC Standard, could be considered in the determination of whether the helmet was ultimately defective.
On appeal, the Covells argued that the Third Restatement of Torts should not have been applied by the District Court when instructing the jury and admitting evidence of the CPSC Standard, stating that the Second Restatement was actually the applicable Pennsylvania law.
Addressing the Covells’ appeal, the court considered its recent holding in Berrier, wherein it decided that if confronted with the question, the Supreme Court of Pennsylvania would apply sections 1 and 2 of the Third Restatement of Torts to products liability cases. In accordance with this holding, the court noted that in products liability cases, Pennsylvania courts have traditionally looked to section 402A of the Second Restatement of Torts, which holds sellers strictly liable for harm caused to consumers by unreasonably dangerous products, irrespective of any negligence on the part of the seller, i.e. whether the seller exercised reasonable care. Despite this apparent segregation of strict liability and negligence analysis in Pennsylvania products liability cases, the court identified a longstanding and recurrent conflict within the Second Restatement, noting that often times “it is difficult or impossible to determine whether a product is ‘unreasonably dangerous’ to consumers without reference to evidence that the seller did or did not exercise ‘care in the preparation’ of the product.” See Schmidt v. Boardman Co., 11 A.3d 924, 940 (Pa. 2011). According to the court, this conflict was addressed in the drafting of the Restatement (Third) of Torts §§ 1-2, which rejected the “no negligence in products liability” regime and instead held sellers liable only for the sale of products determined to be “defective” per three sets of criteria. Notably, this criteria incorporated concepts sounding in negligence, such as “foreseeable risk” and “care.”
Notwithstanding the holding in Berrier, the Covells cited Bugosh v. I.U. North America, Inc., 942 A.2d 897 (Pa. 2008), wherein the petitioner sought a holding from the Supreme Court of Pennsylvania declaring the Third Restatement to be the law of Pennsylvania. The Court ultimately denied the appeal, and the Covells thereby argued that the Second Restatement was indeed the law in Pennsylvania. However, the Third Circuit rejected this contention, holding that because the appeal was denied on the grounds that it was improvidently granted, Bugosh appeal was not an intervening “authority” sufficient to revisit the holding in Berrier.
Noting Bugosh to be of “no consequence,” the Third Circuit Court of Appeals held that absent a change in Pennsylvania law, there was no reason to upset the precedent established in Berrier. Thus, in upholding Berrier, the Covell District Court did not err in using the Third Restatement of Torts to both guide its decisions to admit evidence, and frame its jury instructions.
by Mark Bauman | Dec 21, 2021 | General Liability and Casualty, Legal News
In an April 26, 2010 opinion authored by the Honorable Mary Jane Bowes on behalf of a three-judge panel, the Pennsylvania Superior Court unanimously ruled that pre-accident mental health records are discoverable when plaintiffs claim they have suffered anxiety as a result of the accident.
In Gormley v. Edgar, 2010 Pa Super 71 (April 26, 2010), Plaintiff commenced a personal injury action against Defendant to recover for injuries she sustained as a result of a motor vehicle accident in Philadelphia. At arbitration, an award was entered in favor of Plaintiff, but Defendant appealed to the court of common pleas for a trial de novo. During the course of pre-trial discovery, Defendant sought, among other things, the production of Plaintiff’s medical records. Because Plaintiff refused to produce pre-accident emergency records, Defendant moved to compel special consent for release. At the hearing on the motion, the discovery court conducted an in camera examination of the records at issue and granted Defendant’s motion. Plaintiff appealed to the Superior Court arguing that the trial court erred and abused its discretion in allowing the disclosure of her mental health records because they were privileged and irrelevant to her claim.
More specifically, Plaintiff argued that the records were protected from disclosure by the Mental Health Procedures Act, the Mental Health and Retardation Act of 1966, the Pennsylvania Drug and Alcohol Act, and the statutory psychiatrist-psychologist/patient-client privilege.
However, the Superior Court held that the Mental Health Procedures Act, the Mental Health and Retardation Act of 1966, and the Pennsylvania Drug and Alcohol Act did not apply. According to the Superior Court, because the treatment at issue “was voluntary and provided on an outpatient basis,” it did not fall within the provisions of the Mental Health Procedures Act which “establishes rights and procedures for all involuntary treatment of mentally ill person, whether inpatient or outpatient, and for all voluntary inpatient treatment of mentally ill persons.” Also according to the Court, the protections afforded by the Mental Health and Mental Retardation Act were not available to Plaintiff because she was not “admitted, committed, or detained” as required by the Act. And because drugs and alcohol were not at issue, the provisions of the Pennsylvania Drug and Alcohol Abuse Control Act did not protect Plaintiff’s mental health records.
The Superior Court did, however, agree that the statutory psychiatrist-psychologist/patient-client privilege protected her mental health records from disclosure, but further held that Plaintiff waived that privilege by putting her mental health at issue.
Although Plaintiff argued that her mental health was not at issue, in her complaint, she averred that as a result of Defendant’s negligence, she was caused to suffer, among other things, “great loss, frustration and anxiety.” She further refused to withdraw such allegations. After reviewing medical literature, the Superior Court found that anxiety is “a recognized mental condition,” and thus held that Plaintiff put her mental health at issue.
In further support of its decision requiring disclosure of the pre-accident mental health records, the Superior Court opined that, “It would clearly be unfair for a party to seek recovery for anxiety if that mental health issue predated the accident. Moreover, where a party seeks for recovery for aggravation of a pre-existing mental health condition, records of prior treatment for that condition are discoverable.”
by Mark Bauman | Dec 20, 2021 | General Liability and Casualty, Legal News
A Philadelphia judge has ruled that the attorney-client privilege protects communications between parties in a civil case who are engaged in a joint defense effort. Executive Risk Indemnity, Inc. v. CIGNA Corp., 2006 Phil. Ct. Com. Pl. Lexis 328 (2006).
This case stemmed from a series of federal and state class actions concerning policies in approving and denying health care coverage. The cases were consolidated and placed under the auspices of a panel of federal judges in Southern Florida. The underlying litigation was resolved without trial. Executive Risk thereafter filed a declaratory judgment action seeking a determination that there is no coverage and Cigna counterclaimed seeking indemnification for defense and settlement costs incurred in the underlying actions.
In anticipation of Cigna’s claim for coverage, the multiple excess insurers, including Executive Risk, entered into a joint defense agreement in March of 2002. In a meeting with some of the excess insurers, Cigna and a handful of first layer excess insurers agreed to mediation. Executive Risk was not consulted about the mediation and in September of 2004, it expressed its reservation about participating. When the mediation occurred in November of 2004, Executive Risk appeared and was asked to leave. Executive Risk thereafter filed a lawsuit against Cigna for breach of contract and bad faith. In the course of discovery, Cigna sought disclosure of documents evidencing communications between the excess insurance carriers concerning the denial of coverage for the underlying litigation. Executive Risk sought to protect the materials from disclosure based on the attorney-client privilege and the attorney work product doctrine which it alleged arose as a result of the joint defense agreement.
The matter was heard before Judge Bernstein of Philadelphia’s Commerce Case management Program. In upholding the rule against disclosure as between the parties to the agreement, Judge Bernstein wrote, “The attorney-client privilege is not waived where the third party shares a common interest in developing a legal strategy against identical claims.” In support of the decision, Judge Bernstein cited to the Superior Court’s decision in Commonwealth v. Scarfo, 416 Pa. Super. 329, 611 A.2d 242 (1993), a criminal case, in which the court held that the prosecution could not become privy to the substance of conversations held during a joint-defense meeting of murder defendants, despite the fact that one of the defendants eventually agreed to testify for the Commonwealth. However, as a caveat, Judge Bernstein also held that any communication between the parties that occurred after September 2004, when Executive Risk signaled a divergence from other co-defendants by expressing reservations about taking part in mediation, was discoverable.
