Since late 2005, the Insurance Commissioner no longer has authority to require mandatory arbitration of UM and UIM claims in Pennsylvania. Insurance Federation of Pennsylvania v. Koken, 899 A.2d 550 (Pa. 2005). Post Koken, many insurers modified their automobile policies and eliminated the Pennsylvania arbitration clause. That significant change has raised many opportunities and challenges for practitioners, including issues related to joinder, severance, venue, trial procedures, evidence, and discovery.
In post-Koken cases, plaintiffs should consider conducting the depositions of professional claims handlers in auto cases. Numerous trial courts have determined Pennsylvania Rules of Civil Procedure authorize such depositions under Rule 4003.3.
The Luzerne County Court of Common Pleas initially addressed this topic, and on February 1, 2010, denied State Farm’s Motion for Protective Order and compelled the deposition of the State Farm UIM claims handler. Paulewicz v. State Farm, No. 10655 of 2009 (2/1/10) (Amesbury, J.). Other courts have adopted similar reasoning and allowed the adjusters’ depositions, including the Dauphin County Court of Common Pleas (Welcomer v. Donegal Mutual, No. 2011-CV-474 (6/7/11) (Lewis, J.); (Pike County Court of Common Pleas, Liszka v. Geico, No. 109-2010) (Chelak, J.) (3/10/11)); and in the Lackawanna County Court of Common Pleas (Culkin v. Sciandra (May 4, 2015) (Burke, Special Trial Master).
The focus of the claims handler’s deposition should be on the carrier’s “investigation” in conjunction with your client’s UM/UIM claim. The most effective of these depositions start with the claims log, and that may require a Motion to Compel. Courts in Northeastern Pennsylvania have compelled the production of the claims log from the UM/UIM carrier. See, e.g., Peterson v. USAA, (Luzerne County CCP, Judge Pierantoni, 8/19/15); Carlson v. Liberty Mutual Insurance Company, (Lackawanna Cty. CCP, Discovery Master Burke, July 30, 2015); McTague v. Progressive, (Discovery Master Burke, Lackawanna Cty. CCP, 11/2/15).
During the course of the deposition, counsel should inquire extensively about investigative notations contained in the claims log, comparing those notations to the materials submitted by the Plaintiff and the investigation conducted to date. Inevitably, significant dividends will be paid which will enure to the benefit of the injured party when these depositions are conducted. It happens every time.
Finally, under the Unfair Insurance Practices Act, it is a violation where the carrier “fail[s] to promptly provide a reasonably explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement. . .”.
Injured victims are entitled to know as to the basis for settlement offers — and that will be the subject of a future blog.