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Posted by on Sep 29, 2017 in Civil, Insurance | 0 comments

Rancosky v. Washington Nat’l Ins. Co: Terletsky standard prevails for bad faith claims

The Pennsylvania Supreme Court adopted the Superior Court’s Terletsky v. Prudential Property & Cas. Ins. Co. standard for determining bad faith, ruling that no evidence of ill-will is required, nor is there a heightened leval of malice necessary for a finding of punitive damages under the 42 Pa.C.S. § 8371.

LeAnn Rancosky purchased a cancer treatment insurance policy from Washington National Insurance Company (which presumably has no connection to the baseball team that shares its name). A provision of the policy provided that, if she ever became disabled due to cancer, she could cease paying premiums on the policy and still collect the benefits of the policy, provided she submitted several documents. She did become so disabled, and submitted the documents, and stopped paying premiums (as permitted by the policy). Unbeknownst to Rancosky, her doctor made an error on a form, erroneously setting her disabled date to several months after she was disabled and ceased paying premiums.

Months went by, and Washington National failed to respond to multiple inquiries on her claim status. Rancosky gave Washington National multiple opportunities to speak with her doctor, employer and any other third party necessary to confirm her status. Finally, Washington National simply denied her ongoing treatment on the basis that she had ceased paying premiums, despite the policy language allowing her to take this course of action. Rancosky filed a “bad faith” claim under § 8371, which reads as follows:

Actions on insurance policies

In an action arising under an insurance policy, if the court finds that the insurer has acted in bad faith toward the insured, the court may take all of the following actions:

(1) Award interest on the amount of the claim from the date the claim was made by the insured in an amount equal to the prime rate of interest plus 3%.

(2) Award punitive damages against the insurer.

(3) Assess court costs and attorney fees against the insurer.

Id. A major dispute in this case is a major point of contention in most bad faith claims: must a plaintiff prove the insurance company had a motive of self-interest or ill-will to prevail in her claim, or is a showing of disregard of a duty under the contract sufficient?

 Majority by Baer: Terletsky Standard Prevails

The majority, speaking by Justice Max Baer, finds that the plain language of the statute had precious little to say about the standard of ill-will required. Relying on a past SCOPA case that ruled that the bad faith statute was a “delayed legislative response to this Court’s 1981 decision in D’Ambrosio v. Pennsylvania Nat’l Mut. Cas. Ins. Co., 494 Pa. 501 (1981),” the Court reiterated that the best way to divine legislative intent in regards to the bad faith statute was to look at the Supreme Court case that declined to recognize bad faith under Pennsylvania law.

The majority opinion is written as a comprehensive examination of bad faith law, taking lengthy detours through the first opinions to recognize bad faith as a right of action in tort under California law, and the subsequent refinements of the standards of proof in a Wisconsin case. Ultimately, however, Justice Baer points back to SCOPA’s own caselaw, examining the denial of a common law right of action in D’Ambrosio, and the calls in that case for the legislature to consider passing a right of action where SCOPA felt it unwise to act.

Ultimately, the statute passed, and was interpreted by the Superior Court as early as 1992 to include a two part test. In order to recover in a bad faith action, the plaintiff must present clear and convincing evidence 1) that the insurer did not have a reasonable basis for denying benefits under the policy, and 2) that the insurer knew of or recklessly disregarded its lack of a reasonable basis. Thus, the proof of an insurance company’s motive of self-interest or ill-will, which the Defendant in this case demanded, is not a prerequisite to prevailing in a bad faith claim under § 8371, but may be relevant to satisfying the second prong. Furthermore, the Court ruled, evidence of the insurer’s knowledge or recklessness as to its lack of a reasonable basis in denying policy benefits is sufficient to prove this second prong.

Secondly, the Court turned to the question of punitive damages, which usually require a heightened level of proof of recklessness under Pennsylvania law. Recognizing that the statute placed the three remedies on par with one another, the Court ruled that the General Assembly intended punitive damages to be equally available as a remedy. Indeed, though the majority does not mention it, even the positioning of punitive damages between the other two remedies demonstrates that the legislature did not view it as an extraordinary remedy.

Concurrence by Wecht: Evidence of Ill-will is rare

Justice Kevin Wecht concurs in the result, but notes that the inability to find evidence of ill-will will be common. “[S]uch strains of overt malfeasance often will be lacking and, in any event, will seldom be susceptible to establishment by competent proof of record.”

Concurrence by CJ Saylor: But direct evidence is always rare

Chief Justice Thomas Saylor writes the second concurrence, which is unusual in itself as the concurrences are normally placed in order of seniority. Presumably because the Chief Justice did not join the opinion in full, his thoughts come last. Noting his general approval of the holding, the Chief Justice adds two helpful insights. Observing that “inferences regarding intent are legitimately and regularly drawn from circumstantial evidence (including actions and inaction) in other contexts, including in the criminal law,” the Chief Justice would find that circumstantial evidence can be used, but that a finding of some sort of ill-will and recklessness should be required for a finding of bad faith. His second observation is that punitives generally require a proof of “malice,” and that federal constitutional jurisprudence under the due process clause is implicated where punitive damages come into play.

Conclusion: Bad Faith is a two-part test

The law doesn’t change in this area, but it is confirmed. For a quarter century, Pennsylvania has lived under a two-part analysis of bad faith, and that analysis remains. But the test is now confirmed by the Commonwealth’s highest court, and there will be no further concerns that the law could change tomorrow. If any fault is to be found in this opinion, it is the excessive reliance on other sources. Incorporating by reference an opinion from Wisconsin (but not all of it), and insistently attributing to the General Assembly the motive of responding to a Supreme Court case from ten years earlier without any supporting documentation, the Court takes a fairly straight-forward statutory analysis case and imbues it with a load of scholarly references that make this area of law a bit muddy. Regardless, the test for bad faith is now clear, and overall, this opinion is a welcome clarification.

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Posted by on Aug 23, 2017 in Elections | 0 comments

Green Party v. Department of State Bureau of Commission, Elections and Legislation: A long name for a nothing-burger

The Supreme Court of Pennsylvania rules that filing late for a special election cannot be excused.

25 P.S. § 2779 requires that a political party putting forth a candidate for a special election must file its “Certificate of Nomination,” “not later than fifty (50) days prior to the date of the special election.”

The Green Party filed its Certificate of Nomination on January 31, 2017, one day late for the March 2017 special election in Philadelphia County (home to more than a few election disputes). The deadline for the submission of its nomination form is in the statute, which states that the deadline is 50 days prior to election day. In addition to this statutory notice, the Green Party was informed by mail and email of the deadline, but still missed it.

The Green Party’s excuses are less than stellar. The official responsible for submitting the nomination certificate wasn’t in the habit of checking the party email (that was someone else’s job), and she only checked the PO Box once a week (and missed the mailing). She called the day of the deadline and spoke to someone on the phone about their campaign finance report, and asked a general, “Anything else we should be doing” question, which naturally was misunderstood by the campaign finance person on the phone.

The Green Party went to the courts for relief, starting in the Commonwealth Court (election disputes being one of the few matters over which the Commonwealth Court enjoys original jurisdiction), and requesting a writ of mandamus against the Department of State. The Commonwealth Court denied the relief, and the Green Party appealed to the Supreme Court of Pennsylvania.

Majority by Mundy: There’s really nothing we can do here

Justice Mundy, speaking for the 5-2 majority, holds that there’s nothing the courts can do here. For one thing, the General Assembly, though bound itself by certain restrictions on what it can legislate regarding elections, is given plenty of room to set the rules by which elections are done. Absent a clear abuse of discretion, or an unreasonable interpretation by an executive official, the acts of the General Assembly should generally be left undisturbed.

Without meaning to sound disrespectful, the majority opinion seems to almost stutter, casting about for an argument from the Appellants as to why they should be excused in their late filing. “Essentially, Appellants seek to have this Court exercise its equitable powers to excuse their late filing of the nomination certificate,” Mundy writes. And then the damn breaks:

Appellants failed to consult the relevant statutes, did not check the Department’s website, did not read the e-mail and attachments sent to the Green Party, and did not check the Green Party’s post office box in a timely manner. Furthermore, rather than seeking critical information about the filing of a nomination certificate from someone in the elections division, [Green Party officials] chose to consult with someone in the campaign finance division.

Because the Green Party failed to demonstrate a clear right to relief, their application for writ of mandamus was denied.

A few other notes on the majority opinion: the Green Party argued it had First Amendment rights that had been trampled by the Department of State declining to put them on the ballot. This argument was rejected. Furthermore, the Green Party advanced some sort of explanation where the deadline was actually January 31, and that they filed on time. This lead us to the concurring and dissenting opinions.

Concurrence by Todd: I count it differently, but end up at the same result

The majority counts the day of the election as day one, but excludes the final day landed on (as the statute’s “day-counting” rules seems to require). Justice Todd insists that the day before the election is day one, as the statute itself seems to require. No matter, both calculations end up at the same result. (I know this sounds impossible, and while I went into law to avoid math, I have double-checked and they do both end up at the same result). Regardless, Justice Todd agrees with where the counting ends up, and the Green Party was late.

Dissent by Donohue: Count should expand rather than contract number of days to timely file

But Justice Donohue begs to differ, and argues that the day of the election should be day 1, and that the final day must be included for the final count, which leads to a deadline of January 31, and makes the Green Party’s application timely. She calls this a “common sense” reading of the statute, although Justice Todd retorts that there’s nothing common sense about calling the day of the election the first day prior to the day of the election. Justice Donohue argues that, where there is ambiguity, the tie should go to the democratic process, allowing parties and citizens to more fully participate in the process.

Conclusion: A late filing is not excused just because it’s an election

The basic conclusion of this case is that you should file on time if you’re a political party seeking to nominate a candidate for an upcoming election. The Green Party’s arguments feel undeveloped, or at least, the Court never got a grasp of what they were arguing if they did make developed arguments. It’s obviously a tough situation to see a candidate who was properly nominated by a political party denied the chance to be on the ballot, but deadlines are deadlines. The Supreme Court’s ruling in this case comports with its overall views expressed in Sprague v. Cortes, where the Court held that the legislature and executive should be allowed to handle elections as they see fit without the intervention of courts. In Pennsylvania, the policy of the courts is one of non-interventionism when it comes to election.

 

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Posted by on Aug 23, 2017 in Sentencing | 0 comments

Com v. Aikens: Trial Court’s Instruction Gives Insight into Jury’s Findings

18 Pa.C.S. § 6318 criminalizes “Unlawful Contact with a Minor.” One might think of this statute as an inchoate for the entire child-sexual-victimizing portion of the criminal code. If a defendant contacts a child for the purpose of sexual victimization, that contact is sufficient to support a conviction under this statute.

The statute is graded as a 3rd degree felony—unless the crime which the defendant contacted the victim to lure her into is graded worse, in which case that grading controls. So when Markeith Aikens was convicted of contacting a minor for the purpose of securing Involuntary Sexual Deviate Intercourse—a 1st degree felony—Aikens’s conviction was graded as a 1st degree felony.

Aikens’s counsel ultimately appealed this determination on the basis that it could not be clear what Aikens was convicted by the jury of. He was charged with a third-degree crime, a first-degree crime, and Unlawful Contact under § 6318. But the trial court had instructed the jury that the Unlawful Contact required two elements: “First, that [Appellant] was intentionally in contact with a minor—the victim in this case—second, that that contact was for the purpose of engaging in an unlawful act—and in this case, that unlawful act is alleged to be [IDSI], the crime that we just discussed.”

The jury found Aikens not guilty of IDSI, but found him guilty of Unlawful Contact.

Majority by Baer: Trial Court’s Instruction to the Jury Makes it Clear which Substantive Crime Jury Verdict found Defendant was Contacting the Minor to Commit

Justice Max Baer, writing for the 6-0 majority (Justice Mundy did not participate), ruled that the trial court’s (apparently erroneous) instruction made clear what Aikens was actually convicted of. The law presumes that juries follow instructions, no matter how silly this presumption may be in reality, and the jury was instructed that Unlawful Contact could only be satisfied if they found that Aikens had contacted the minor to commit IDSI. Thus, unlike in prior cases which Aikens was relying on, the court did not have to guess at which crime the jury believed Aikens was attempting to commit when he contacted the minor.

Significantly, these concerns about not guessing at the defendant’s underlying crime are not merely statutory, but are constitutional. The Supreme Court of the United States’s Apprendi v. New Jersey held that a jury must find, beyond a reasonable doubt, any aggravating factors necessary to enhance a defendant’s sentence. Thus, unless it can be proved that a jury found the
“aggravating factor” of a heightened underlying crime, the lower standard of grading (and punishment) must prevail.

Here, the trial court’s instructions made clear the underlying crime for which defendant was being convicted. Our Supreme Court rejected defendant’s arguments (and the Commonwealth’s responses) regarding inconsistent verdicts in this case. There was no inconsistent verdict, the Court found. “Rather, the jury’s verdicts merely indicate that Appellant did not actually commit IDSI with respect to the minor victim, but did unlawfully contact the minor victim for purposes of engaging in IDSI.”

Conclusion: Clear case, but quandary for defense counsel

This case appears to be straight-forward, and correctly decided. But it presents an interesting quandary for a defense attorney in a case like this. The trial court’s jury instruction favored the defendant initially. After all, the trial court should have thrown a wider net: “You can convict the defendant of Unlawful Contact if you think he contacted the victim for the third-degree crime or the first-degree crime.” But the narrower net comes back to bite in this case, because it is clear the Defendant contacted the minor for the worse crime, and thus, that he must face the higher penalties of first-degree grading. Defense counsel in future cases may have to strategically navigate between accepting the narrower net of the trial’s instructions or the higher likelihood of ambiguity that would help avoid higher grading for Unlawful Contact.

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Posted by on Aug 23, 2017 in Criminal, Mens Rea, Murder | 0 comments

Com v. Packer: DUI on immediate and debilitating intoxicants satisfies mens rea for third-degree murder

In Commonwealth v. Packer, the Pennsylvania Supreme Court rules that the choice to drive immediately after and while huffing difluoroethane (DFE) intoxicants that are known to render the user unconscious satisfies the high standard of malice necessary for a finding of third-degree murder.

Danielle Packer went to a Walmart late one night with her fiancé, Julian Shutak, and bought aerosol cans, which they both “huffed” before getting back into the car. Packer and Shutak engaged in self-aware ironic dialogue about the likelihood that Packer would kill them both while driving intoxicated. After getting on the road, Packer huffed again at a red light, and continued driving, ultimately losing consciousness, as she had before when “huffing.”

Her car crossed the dividing lines while Shutak yelled to get her attention and struck another oncoming car, killing the driver. Packer emerged from the vehicle with very little concern over the victim of her acts, but extremely concerned about her own future. Frantically asking several witnesses if she was going to jail, and smoothly asking the EMTs if the police would be able to detect DFE in her system, Packer demonstrated to every witness involved that night that she had been well aware of the likelihood that DFE would knock her out while driving.

A jury convicted Packer of third-degree murder, and Packer appealed all the way to the Supreme Court of Pennsylvania. Packer appealed to several prior cases of the Court which ruled that the malice required for murder is generally not found in a run-of-the-mill DUI.

Majority by Donohue: Packer’s knowledge of DFE’s effects on her led to virtual certainty that someone would be killed on the road

Writing for the unanimous Court, Justice Donohue explicated the various levels of murder in Pennsylvania’s common law tradition, now codified by statute. First-degree murder is the premeditated variety; second-degree murder, the felony murder kind; and third-degree murder is the catchall of “any other” type of murder, but which still requires legal malice.

Drawing on the wealth of ancient caselaw available to a Pennsylvania Supreme Court justice, Donohue quotes from an 1868 case for the proposition that malice is more than just standard ill-will, but rather a “wickedness of disposition, hardness of heart, cruelty, recklessness of consequences, and a mind regardless of social duty, although a particular person may not be intended to be injured.” (quoting Com v. Drum, 58 Pa. 9 (1868)).

The Court proceeds to lay out the textbook examples of “depraved heart” murder—a defendant who fires a gun into a crowd may not intend to kill anyone, but his depraved heart is sufficient for a finding of malice; playing reverse Russian roulette where the player aims at his friend is still guilty of murder, even if he really was hoping this wasn’t the loaded chamber. In the present case, getting behind the wheel of the car after intentionally huffing a substance you know typically knocks you out—and then huffing it again while driving—is sufficient to prove the malice of your depraved heart, even if you didn’t “mean” to kill anyone.

There is a long line of Pennsylvania caselaw equating the mens rea necessary for third-degree murder with that of aggravated assault. The difference between these two substantive crimes is essentially what results from the actions of the defendant. If the victim dies, it’s third-degree murder; if the victim lives, it’s aggravated assault. In both cases, however, the malice of the defendant is the same. Drawing favorably on comparable situations in the aggravated assault setting, the Court shows how a Defendant’s inexcusable recklessness can rise to a level indistinguishable from intentional action, and how this level of malice is sufficient for a conviction under either statute, depending only on the victim’s life or death.

The Court distinguishes its prior DUI caselaw, stating “There is a significant difference between deciding to drive while intoxicated and deciding to drive with knowledge that there is a strong likelihood of becoming unconscious.” This case, Donohue explains, is more like playing Russian roulette: “the defendant is virtually guaranteeing some manner of accident will occur through the intentional doing of an uncalled-for act in callous disregard of its likely harmful effects on others.”

Conclusion: DUIs are still not murder

The strong and thorough analysis in this case leaves little doubt that the Court is not trending toward treating DUIs as murder. Nonetheless, there are situations where an individual’s inexcusably reckless behavior could rise to the level of malice required for aggravated assault or “depraved heart,” third-degree murder. For now, such situations are limited to “immediate intoxicants” such as DFE; however, it is not beyond the pale to expect that prosecutors may soon be pushing the envelope in other cases.

This case’s language is narrowly-tailored to the facts, and it approves an appropriate punishment for someone who intentionally and willfully put lives at risk, and predictably killed another motorist. Hopefully the heightened consequences of such actions will cause some people to think before getting behind the wheel.

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Posted by on Jul 25, 2017 in Civil, Statutory Construction | 0 comments

Blake v. State Civil Service Commission: “Soldier” under state hiring preference law may not mean the same thing as it does to the Department of Defense

In Blake v. State Civil Service Commission, the Pennsylvania Supreme Court ruled that a West Point cadet who did not complete his training is not a “soldier” entitled to hiring preference under Pennsylvania’s Veterans’ Preference Act.

Scott Blake spent a year and a half as a cadet at West Point. He took an oath of service, had the rank of cadet, went through basic training, but ultimately transferred his credits to another school before the two-year mark, after which a West Point cadet who does not complete his service must pay back his tuition and serve as an enlisted man.

When applying for civil service jobs, Blake checked the box saying he was a veteran. The Civil Service Commission denied his eligibility because he never served in active duty. Blake appealed this decision, arguing that he had “honorable discharge” papers from the Department of Defense, and that he was ranked a “cadet” by the US Army.

Majority by Donohue: Purpose of Pennsylvania’s Veterans’ Preference Act is to aid those who served their country in military service

Justice Donohue, writing for the unanimous Court, rebukes Scott Blake for attempting to obtain a benefit reserved for those who have served in the military. The Court dismisses, out of hand, Blake’s references to federal statutes variously defining him as a service member, pointing out that the federal government’s statutes do not give the key to the Pennsylvania General Assembly’s legislative intent. Pennsylvania law may consider, but is not bound by federal government designations of veteran and “soldier” status.

The difference in terminology and purpose of the federal and state statutes demonstrates that a determination under one does not necessarily mean the same thing under the other.

The Court goes on to consider the legislative history of the statute, showing that the General Assembly was concerned about situations where national guardsmen returned from tours of active duty in Afghanistan, but were not eligible for the benefits of veterans under the Act. The General Assembly added clearer qualifications showing that those released from “active duty” under “honorable conditions” qualified under the Act for preferential treatment.

But a trainee who never even completed his training was not qualified under the Act. Blake’s time at West Point was not military service on behalf of his country qualifying him for preference. “Because he left before a service obligation accrued, Blake never obligated himself to serve his country, either as a commissioned officer or at an enlisted rank.” Quoting the words of the statute back at Blake, the Court concludes:

In fact, “for the preservation of his country,” he never undertook to perform any military service following his eighteen months of training at West Point. . . . Blake went to college. He did not serve in the armed forces of the United States, and thus he is not a “soldier” as that term is defined in 51 Pa.C.S. § 7101. He is not entitled to receive a veterans’ preference when applying for civil service jobs in this Commonwealth.

Conclusion

The Court is rarely this openly antagonistic toward a party. Blake’s suit simply rubbed them wrong, perhaps coming off as a form of stolen valor. The case is interesting for its unaddressed constitutional implications. Blake is a former service member under federal definitions (there is some dispute as to what he is under federal statutes, but it does appear that his year and a half are “military service” at least in some respects to the federal government). Yet, the Commonwealth of Pennsylvania does not reward this type of service, while it does reward others.

Since the United States Constitution in Article I, § 8 grants Congress and the states differing spheres of influence when it comes to organizing and training state militias, it seems the state’s preference rules for its own national guardsmen would withstand scrutiny. But what if the Commonwealth decided tomorrow that members of the Army could have preferential status, but not members of the Navy? Would this survive constitutional scrutiny? Would federal statutes control then? Could Congress “occupy the field” of veteran benefit regulations such that states could not restrict to whom they give preferential status? These questions are not vexing in this case, as Blake is clearly on the “low end” of military experience. But future cases may test the limits of state power in offering benefits to some but not all veterans.

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