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SZARMACK v. WELCH (03/24/72)

decided: March 24, 1972.

SZARMACK
v.
WELCH, APPELLANT



Appeal from order of Court of Common Pleas, Civil Division, of Allegheny County, July T., 1970, No. 1292, in case of Joseph Szarmack v. Wilbert C. Welch, Jr.

COUNSEL

Robert S. Grigsby, with him Janet N. Valentine, and Thomson, Rhodes & Grigsby, for appellant.

Clyde T. MacVay, and Evans, Ivory & Evans, submitted a brief for appellee.

Wright, P. J., Watkins, Montgomery, Jacobs, Hoffman, and Cercone, JJ. (Spaulding, J., absent). Opinion by Hoffman, J.

Author: Hoffman

[ 220 Pa. Super. Page 408]

The basic issue in this appeal is whether, under the applicable Pennsylvania Rules of Civil Procedure, the appellee is entitled to pre-trial discovery of the amount of available liability insurance coverage. This is a question of first impression in the appellate courts of Pennsylvania. The lower courts have split, some requiring disclosure and others construing the Rule of Civil Procedure to prevent compulsory disclosure.*fn1

[ 220 Pa. Super. Page 409]

Pennsylvania Rule of Civil Procedure 4007(a) provides in relevant part that ". . . the deponent may . . . be examined regarding any matter, not privileged, which is relevant to the subject matter involved in the action and will substantially aid in the preparation of the pleadings or the preparation or trial of the case". Pennsylvania Rule of Civil Procedure 4007, adopted November 20, 1950, as amended April 12, 1954.

The construction of Rule 4007 should be in accordance with the Rules of Construction contained within the Pennsylvania Rules of Civil Procedure. Those rules of construction provide that [t]he rules shall be liberally construed to secure the just, speedy and inexpensive determination of every action or proceeding to which they are applicable. . . ." Pennsylvania Rule of Civil Procedure 126, adopted May 1, 1939.

"When the words of a rule are not explicit, the intention of the Supreme Court may be ascertained by considering, among other matters (1) the occasion and necessity for the rule; (2) the circumstances under which it was promulgated; (3) the mischief to be remedied; (4) the object to be attained; (5) the prior practice, if any, including other rules and Acts of Assembly upon the same or similar subjects; (6) the consequences of a particular interpretation; (7) the contemporaneous history of the rule; and (8) the practice followed under the rule." Pennsylvania Rule of Civil Procedure 127(c), adopted May 1, 1939.

Appellee contends that the disclosure of insurance policy limits would aid in settlement negotiations, and necessarily reduce the backlog of cases. The argument is that many plaintiffs who would otherwise settle at or near the policy limits are encouraged to

[ 220 Pa. Super. Page 410]

    proceed to trial in the hope of obtaining an enforceable judgment for much more than they could possibly collect. Appellant answers that where policy limits are high, rather than low, the discovery of those limits will encourage protracted litigation and increase court congestion. In Slomberg v. Pennabaker, 42 F.R.D. 8 (M.D. Pa. 1967), Judge Follmer answered appellant's argument that disclosure of high limits would retard settlements: "[i]t is my opinion that in the balance, disclosure would assist amicable settlement without a trial, much more than nondisclosure does. I am in agreement with Judge Holtzhoff's view that discovery of coverage and its extent is conducive to fair negotiations and to just settlement. Cook v. Welty, 253 F. Supp. 875 (D.C. 1966) at 877. The whole purpose of litigation is to produce results fair to both sides, not to play ...


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