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Gunn v. Automobile Insurance Company of Hartford

April 15, 2009


Appeal from the Order entered July 25, 2008, in the Court of Common Pleas of Allegheny County, Civil at No. GD-07-002888.

The opinion of the court was delivered by: Allen, J.



¶ 1 Appellant, the Automobile Insurance Company of Hartford, Connecticut ("Appellant") appeals from the judgment entered in favor of Appellee, Barbara Gunn ("Gunn") following the trial court's denial of Appellant's motion to sever and stay a statutory bad faith claim. The instant matter arises out of a two-count complaint filed by Gunn against Appellant. Gunn's first count is a breach of contract claim ("UIM claim") against Appellant, her insurance carrier, for failure to pay underinsurance motorist (UIM) benefits. The second count is a bad faith claim alleging that Appellant failed to act on Gunn's claim for underinsured motorist benefits in good faith, in violation of 42 Pa.C.S. § 8371.

¶ 2 The facts of this case have been comprehensively set forth by the trial court as follows:

[Gunn] was involved in a motor vehicle accident while operating a vehicle insured under [Appellant's] policy which provides UIM [underinsured motorist] coverage of $100,000 to [Gunn]. The other driver's vehicle was insured by a policy issued by another insurance company which provided coverage of $100,000. On September 24, 2003, [Gunn] sued the other driver. In April, 2005, [Gunn] settled her claim against this driver for $88,000. [Gunn] recognizes that under Pennsylvania law, any UIM benefits to which [Gunn] is entitled will be offset by the $100,000 limits. [Appellant] offered $30,000 to settle the UIM claim. [Gunn] rejected the offer. Thereafter, Gunn instituted the present action. The complaint alleges that [Appellant] breached its contract of insurance in failing to pay [Gunn's] claim for UIM benefits of $100,000 and also acted in bad faith by failing to properly investigate and/or offer a reasonable payment of [Gunn's] underinsured motorist claim. [Gunn's] complaint includes a demand for a jury trial.

According to the Summary of Facts set forth in [Gunn's] Brief in Opposition to [Appellant's] Motion to Sever and stay [Gunn's] Bad Faith Claim, the accident occurred when the other driver failed to yield to [Gunn's] right-of-way. Because of the accident, [Gunn] was unable to return to work. According to the Report of [Gunn's] Expert Witness in Matters of Employability, Lost Earnings, and Diminished Earning Capacity, [Gunn's] total lost earnings, past and future, and other reduced benefits exceed $400,000.

Trial Court Opinion, 07/25/2008, at 2-4.

¶ 3 On January 25, 2008, Appellant filed a Motion to Sever and Stay a Statutory Bad Faith claim, requesting the trial court to sever and stay all proceedings as to Gunn's bad faith claim, until the UIM claim was resolved following jury trial. R. 66a. In its motion, Appellant asserted that under the setoff requirements of Pennsylvania law, in order to be entitled to any UIM benefits, Gunn would have to prove damages in excess of the $100,000 liability limits. SeeBoyle v. Erie Ins. Co., 656 A.2d 941, 944 (Pa. Super. 1995). In its motion and subsequent amended answer to the complaint, Appellant disputed Gunn's allegations as to the extent of her injuries, and asserted that Gunn was not entitled to recover UIM benefits. R. 78a; Trial Court Opinion, 07/25/2008, at 4.

¶ 4 In its motion to sever and stay the bad faith claim, Appellant sought to preclude the consolidation of Gunn's breach of contract and bad faith claims, and to preclude discovery from proceeding in the bad faith case while the underlying UIM claim was at issue. Appellant asserted in its motion that Gunn's bad faith claim was dependent on the outcome of her UIM claim, and that considerations of judicial economy, prevention of unnecessary expense to the parties, and prejudice to Appellant, required the bad faith claim to be stayed pending the outcome of the UIM claim. R. 66a.

¶ 5 On July 25, 2008, the trial court entered an opinion and order denying Appellant's motion to stay all proceedings and preclude discovery pertaining only to the bad faith claim until resolution of the UIM claim. In its opinion, the trial court explained that "obviously, [Gunn's] bad faith claim will be severed because [Gunn's] UIM claim will be resolved through a jury trial while bad faith claims are tried non-jury." citing Mishoe v. Erie Ins. Co., 824 A.2d 1153 (Pa. 2003) (no right to a jury trial in a bad faith action pursuant to 42 Pa.C.S. § 8371). Therefore, the trial court reasoned that "the dispute between the parties is over whether to stay all proceedings as to the bad faith claim pending resolution of the UIM claim." Trial Court Opinion, 07/25/2008, at 3. The trial court then denied Appellant's motion to preclude discovery relevant only the bad faith claim until resolution of the UIM claim, reasoning that it would be more convenient for the parties and the court if the same judge who presided over the UIM jury trial tried the bad faith claim immediately after the completion of the UIM trial. Trial Court Opinion, 07/25/2008, at 5. The trial court further explained that Appellant had failed to adequately demonstrate any prejudicial effect from permitting discovery on the bad faith claim to proceed. Trial Court Opinion, 07/25/2008, at 7, 9.*fn1

¶ 6 On August 14, 2008, Appellant filed a notice of appeal from the July 25, 2008 order, asserting that the order constituted an appealable collateral order. The trial court neither directed Appellant to file a Pa.R.C.P.1925(b) statement of matters complained of on appeal, nor filed a Pa.R.C.P.1925(a) opinion.

¶ 7 Before addressing the merits of Appellant's appeal, we must determine whether we have jurisdiction. "[S]ince we lack jurisdiction over an unappealable order it is incumbent on us to determine, sua sponte when necessary, whether the appeal is taken from an appealable order." Kulp v. Hrivnak, 765 A.2d 796, 798 (Pa. Super. 2000).

ΒΆ 8 Appellant asserts that the trial court's order constitutes an appealable collateral order pursuant to Pa.R.A.P.313. Appellant's Brief at 5, 12. Pa.R.A.P.313(a) provides that an appeal may be taken from a collateral order. Pa.R.A.P.313(b) explains that "a collateral order is an order separable from and collateral to the main cause of action where the right involved is too important to be denied review and the question ...

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