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Defense Digest

On the Pulse…Marshall Dennehey Is Happy to Celebrate Our Recent Appellate Victories*

Defense Digest, Vol. 27, No. 3, June 2021

June 1, 2021

*Results do not guarantee a similar result.

 

Kimberly Berman (Fort Lauderdale, FL) and Janice Merrill (Orlando, FL) succeeded in obtaining an affirmance by the Second District Court of Appeal of a directed verdict entered at trial in an action to hold Marshall Dennehey’s client, a welfare agency, vicariously liable for an alleged assault and battery by an employee who was terminated for forgery of the victim’s signature. The Second District rejected the plaintiff’s arguments that a new trial was warranted and affirmed the final judgment in favor of the defendant. Fields v. The Devereux Foundation, Inc., 2021 WL 49952 (Fla. 2d DCA Jan. 6, 2021).

Kimberly Berman and Jonathan Kanov (Fort Lauderdale, FL) succeeded in obtaining an affirmance by the Fourth District Court of Appeal of the dismissal with prejudice of Marshall Dennehey clients, a listing real estate agent and his broker, in an alleged negligence and fraud case. The Fourth District rejected the plaintiffs’ arguments that the trial court abused its discretion in dismissing their pleadings due to their attorney’s conduct and detailed how the plaintiff’s attorney dropped the ball in litigating the case, in a separate opinion reversing the plaintiffs’ attorney’s contempt conviction. Arnoul v. Perlstein, 310 So.3d 408 (Fla. 4th DCA Feb. 3, 2021).

Kimberly also succeeded in obtaining a dismissal by the Fourth District Court of Appeal of an appeal of an order denying emergency relief in Marshall Dennehey’s client’s action to foreclose a claim of lien and for damages and breach of contract against a former unit owner. The appellant attempted to revive an untimely appeal of a prior order by obtaining a new order to the same effect as the original and then filing the notice of appeal within 30 days of that most recent order. The Fourth District dismissed the appeal and granted entitlement to appellate attorney’s fees. Sawyers v. Lakeside Manor North Association, No. 4D21-225 (Fla. 4th DCA Apr. 7, 2021).

Audrey Copeland (King of Prussia, PA) persuaded the Commonwealth Court, sitting en banc, to affirm the trial court’s grant of summary judgment in favor of the defendant Borough, dismissing its former police chief’s claims for breach of contract and wrongful termination. The court held that civil service status is not conveyed to a police chief who is hired outside of the procedures in the Borough Code, and that the protections in Borough Code Section 1190 against removal are only available to a chief hired through the civil service noncompetitive examination and certification process in Section 1184(d). The Borough did not breach its employment contract with the chief when it eliminated the chief of police position, which effectively terminated him for other than “just cause,” because it was allowed by the contract, which provided a remedy of severance pay. Romutis v. Borough of Ellwood City, 246 A.3d 361 (Pa. Cmwlth. Feb. 10, 2021).

In another Commonwealth Court case, Audrey obtained an affirmance of the decisions of the Workers’ Compensation Appeal Board and judge that Section 440 of the Act only entitled the claimant to a partial reimbursement of costs incurred in litigating an expansion of his work injury. Since the judge’s decision was based solely on the employer’s credible expert witness and not the claimant’s own experts, the claimant could only recover reimbursement for the cost of employer’s expert’s deposition transcript. Pacheco v. WCAB (Nordstrom, Inc.), 2021 WL 1081434 (Pa. Cmwlth. Mar. 22, 2021).

Audrey also convinced the Superior Court to affirm the trial court’s order granting judgment on the pleadings to a co-defendant construction company and dismissing as moot its joinder complaint against Marshall Dennehey’s client. The church alleged water and moisture penetration into its building for over 20 years after the construction project was completed, and that it retained a contractor and engineering firm to investigate and repair the issues. The Superior Court panel concluded the church failed to timely commence its lawsuit within 12 years of the project’s completion in accordance with the Statute of Repose, and that the statute applied because the occupancy permit constituted record evidence indicating that the defendants lawfully performed the construction. The dismissal of the church’s UTPCPL claims was also affirmed. The Evangelical Lutheran Church Of The Atonement At Wyomissing, PA Appellant v. Horst Construction, Horst Construction Company and Horst Construction Management Company, 2021 WL 870734 (Pa. Super. Mar. 9, 2021).

Audrey was also successful in obtaining the Third Circuit’s affirmance of the district court’s decision that Gallagher v. Geico (Pa. 2019) did not apply to allow a UIM claimant who waived UIM coverage on his motorcycle (insured with Progressive), to obtain UIM coverage through the back door from his automobile insurer (Mid-Century Insurance Company). The auto policy excluded UIM coverage because the motorcycle policy did not have UIM coverage. The Third Circuit explained that this case was about waiver, not stacking, and also rejected the plaintiff’s argument that the number of vehicles on a policy has nothing to do with the rates. Dunleavy v Mid-Century Insurance Company, 2021 WL 1042981 (3d. Cir. Apr. 9, 2021).

 

Defense Digest, Vol. 27, No. 3, June 2021 is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2021 Marshall Dennehey Warner Coleman & Goggin. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.

 

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Thought Leadership

WCJ Improperly Refused to Conduct C&R Hearing and Erroneously Required Settlement of All Pending Petitions

In this case, the claimant sustained injuries in the course and scope of her employment as a registered nurse. The employer acknowledged the injury by a Notice of Compensation Payable (NCP).  Subsequently, a Workers’ Compensation Judge (WCJ) expanded the description of injury. The employer then filed a Termination Petition, alleging the claimant was fully recovered from the injuries. Providers filed Utilization Review (UR) Petitions, challenging UR determinations finding their chiropractic treatment to be not reasonable and necessary. A settlement of the claim was eventually reached, and the employer filed a Petition to Seek Approval of a Compromise and Release (C&R) Agreement. The C&R outlined that the agreement fully resolved all future workers’ compensation claims except for the termination and UR Petitions. Briefs were filed and one day later, the WCJ issued an Interlocutory Order which stated if instructions were not followed regarding filing of a C&R, a settlement hearing date would not be given. The employer complied with the order, and filed the C&R. Subsequently, the WCJ notified the parties that the C&R must resolve all issues in the petitions, or would not be entertained. A settlement hearing was never held, and the WCJ then issued a decision, granting the Termination Petition and dismissing the UR Petitions. The WCJ also said that the Petition for Approval of a C&R was dismissed without prejudice, as the issues in the Termination and UR Petitions went to a decision. The claimant appealed to the Workers’ Compensation Appeal Board (Board). The Board granted the claimant’s appeal, finding that the WCJ violated the requirement of Section 449 that an expedited hearing be held when a Petition for Approval of a C&R is filed.  The Board further held that it was legally incorrect for the WCJ to insist that the C&R resolve all issues raised by the pending Petitions. The Board remanded the case to a new WCJ, and Employer appealed to the Commonwealth Court. The court affirmed the Board and held that the WCJ erred, as a matter of law, by refusing to hold an expedited hearing within 30 days, once the Petition for Approval of a C&R was filed.  The court noted that the language of Section 449(b) is mandatory, and a settlement hearing is not discretionary or dependent on a party’s separate request for a stay, or whether the record has been closed. The court further rejected Employer’s argument that the case should not be remanded to a new WCJ for a new decision on the termination and and UR Petitions, as the Board passed no judgment on whether the C&R Agreement resolved the termination and UR Petitions, and left it for the WCJ to decide in connection with the Petition for Approval of a C&R.

Defense Victory Obtained in Workers’ Compensation Case

Result

Defense Victory Obtained in Workers’ Compensation Case

business meeting photo

Result

Summary Judgment Obtained in Insurance Coverage Case

Thought Leadership

Commonwealth Court Reaffirms the Constitutionality of Act 111's IRE Provisions

In this case, the claimant sustained a work injury of January 6, 1994, which was acknowledged by Notice of Compensation Payable (NCP). After the claimant’s receipt of 104 weeks of temporary total disability benefits, the employer filed a Request for an Impairment Rating Examination (IRE). The IRE was performed in May 2023 and the IRE physician found that the claimant had a 5% whole person impairment, under the AMA Guides. The employer filed a Petition based on the IRE results, and the Petition was granted by the WCJ. During litigation, the claimant argued that the IRE provisions of Act 111 (Section 306(a.3) of the Act) were not applicable to her injury, since it predated June 24, 1996, the date Act 57 went into effect, and that the IRE provisions were unconstitutional. The Workers’ Compensation Judge (WCJ)) granted the Petition and the Board affirmed. On appeal to the Commonwealth Court, the claimant argued that Act 111 violated the nondelegation doctrine and that its retroactive application to the claimant’s injury was unconstitutional. The court rejected the arguments on the basis that they had already found the same arguments without merit in multiple, prior cases. The court also addressed an argument made by the claimant that Act 111 was procedurally defective under the Pennsylvania Constitution because it was only considered on two days in each House after having undergone amendments and reassignments. The court noted that the Pennsylvania Constitution requires every bill to be considered on three different days in each House. The claimant maintained that, according to the legislative history, the bill did not receive three separate days of consideration from each House when it was assigned a new bill number. The court pointed out, however, that the bill number, H.B. 1840 remained constant and was considered on three occasions by the House. Further, the court concluded that minor amendments to the bill were germane to its original subject, which was to modify the Act’s IRE process, in accordance with Protz II.

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Complete Victory Obtained in a Workers’ Compensation Matter

Result

Complete Victory Obtained in a Workers’ Compensation Matter

Event

CLM 2026 Focus Conference

Allison joins three insurance industry leaders to discuss how cyber coverage disputes, the growing impact of social inflation on bodily injury claim valuation, and the use of artificial intelligence are reshaping the bad faith landscape. The panel will examine emerging sources of extra-contractual exposure, including evolving cyber insurance coverage issues and the challenges of accurately valuing bodily injury claims. Practical approaches to claim evaluation using AI, along with defense strategies designed to help prevent or successfully defend against bad faith litigation, will also be addressed. 

Thought Leadership

Florida Supreme Court Rules Florida Statute §627.70152 Does not Apply Retroactively

In a decision that resolves years of appellate uncertainty and confirms that insurers and insureds alike can rely on the legal framework in place when a policy is issued, the Supreme Court of Florida last week found that Florida Statute §627.70152, which involves an insured’s requirement to provide an insurer with pre-suit notice before filing a suit, cannot be applied retroactively. In Universal Property & Casualty Insurance Company v. Hughes, the Court was presented with the issue of whether the statutory pre-suit notice requirement applied retroactively and whether it would apply to a breach of contract of an insurance policy that was issued before the statute went into effect. Before the Court was an appeal from a homeowner, Ms. Hughes, who sued her insurance carrier, Universal Property & Casualty Insurance Company (Universal) for breach of contract under an insurance policy that was in effect from April 24, 2019 through April 24, 2020. During the policy period, Ms. Hughes suffered a loss and, on May 29, 2019, made a claim for water damage. The carrier investigated the loss and issued payment; Ms. Hughes disputed the payment, finding the amount insufficient for repairs. On July 1, 2021, Florida Statute §627.70152 went into effect, which required insureds to provide notice of intent to initiate litigation against the carrier prior to filing a lawsuit; if an insured filed the lawsuit without complying with §627.70152, a court must dismiss the case without prejudice. On August 4, 2021, Ms. Hughes filed her lawsuit against Universal for breach of contract. Universal moved to dismiss based on her failure to comply with §627.70152. Ms. Hughes contended the notice requirement could not be applied retroactively. The trial court disagreed and dismissed the lawsuit without prejudice, and Ms. Hughes appealed. During the appeal, the Fourth District Court of Appeal, in Cole v. Universal Property & Casualty, 363 So. 3d 1089 (Fla. 4th DCA 2023), ruled that Florida Statute §627.70152 did apply retroactively to policies issued before the effective date of §627.70152. However, the Sixth District Court agreed with Ms. Hughes and overturned the trial court’s ruling, finding the statute could not retroactively apply to policies issued prior to the statute effective date. Thereafter, the other district courts weighed in, with the Third District Court agreeing with the Fourth District Court, and the First, Second and Fifth District Courts agreeing with the Sixth District Court. In resolving the conflict amongst the district courts, the Supreme Court advised “as a general rule, ‘the statute in effect at the time an insurance contract is executed governs substantive issues arising in connection with that contract.’ Hassen v. State Farm Mut. Auto. Ins. Co., 674 So. 2d 106, 108 (Fla. 1996). The Court applied the two-step test when deciding whether a statute has retroactive application: “First, the Court must ascertain whether the Legislature intended for the statute to apply retroactively. Second, if such an intent is clearly expressed, the Court must determine whether retroactive application would violate any constitutional principles.” Menendez v. Progressive Exp. Ins. Co., 35 So. 3d 873, 877 (Fla. 2010). In analyzing the Legislature’s intent, the Court must determine whether the Legislature has manifested a clear command for retroactivity in the statutory text.  In review of the statutory text, the Court found nothing in the language of the statute to indicate that the phrase “all suits” was serving another purpose of expanding its reach to suits based on policies that both predate and postdate the enactment of the statute. Buis v. Universal Prop. & Cas. Ins. Co., 394 So. 3d 738, 741 (Fla. 2d DCA 2024). Further, the Court noted the statute has an effective date, which has long been considered to be evidence against retroactive application of a statute. The Court concluded that, on its face, no provision of §627.70152 speaks to application of the statute to insurance policies issued before the statute’s effective date and therefore, the Legislature did not clearly command retroactivity of the statute to include insurance policies issued prior to the enactment of the statute. The Court briefly reviewed Universal’s argument that the presuit notice requirement was procedural, not substantive, and therefore should be applied retroactively; however, the Court agreed with the Sixth District Court’s finding that, in its entirety, §627.70152 transformed an insured’s ability to sue an insurance company under a property insurance policy and an insurer’s obligations to respond to and pay insurance claims, thus making the requirement a substantive change. The Court thereby upheld the decision of the Sixth District and disapproved the decision of the Fourth District in Cole.