The Phantom Insurance Company

By: Roger D. Horgan

We all know that one must have insurance to drive the car. However, when you get in an accident, the other guy might only have minimal insurance. Therefore, Pennsylvania residents have the option of purchasing under-insured motorist coverage (UIM coverage). This coverage is designed to permit you to recover more than the limit of the other guy’s insurance. Frequently an accident victim pursues two claims at once: one against the responsible driver and another against his own insurance company for UIM coverage.

This allows the courts to address those suits together. It also creates certain complications which arise from judicial tradition and Rule 411 of the Rules of Civil Procedure, prohibiting the mention of liability insurance to a jury. This prohibition requires the jury to focus on the facts of the case rather than upon the amount of insurance coverage available to satisfy the claim.

This creates an inherent difficulty when the case is tried in front of a jury. The insurance companies have successfully argued that the jury considering the case should not be told that one of the defendants is an insurance company. Nevertheless, because the insurance company is a party to the lawsuit it is permitted to have its attorney participate fully in the trial. So, the jury does not know who the second defense attorney is  representing, but the victim’s attorney is required to contend with two attorneys. Two attorneys are better than one, and the plaintiff has a harder case. 

In one recent case, the judge decided this was unfair and ordered a new trial following a defense verdict. In that case, the jury was not told that State Farm insurance Company was a party to the case or that the second defense attorney who participated in the trial represented State Farm. The jury eventually found that the driver was not negligent, and the jury returned a defense verdict. After the trial, Judge O’Reilly concluded  that the procedure designed to hide the identity of the insurance company denied the plaintiff due process of law, and ordered a new trial. In doing so, he concluded that Rule 411 did not  require that the identity of the insurance company in an UIM case be hidden. He stated in his opinion that the practice of not identifying insurance carriers in motor vehicle cases was the perpetuation of a myth that had outlived its usefulness. He concluded that it was fundamentally unfair to permit the double-teaming of the plaintiff in the name of serving this outmoded principle. 

Not surprisingly, the defendants appealed. The Superior Court reversed the judge’s order, and remanded the case to the trial court with instructions to enter judgment in favor of the defendants. What is most interesting about the Superior Court’s decision is that it did not definitively rule whether the procedure of hiding the identity of the UIM carrier resulted in a denial of due process. Rather, it focused on the jury’s decision that the defendant driver was not negligent. Since the driver was found to be not negligent there could be no judgment against either that driver or the UIM carrier. The Superior Court relied upon the rule of law that a violation of due process does not necessarily lead to a remedy. A party who demonstrates a violation of due process is entitled to a remedy only if that party can also show that the violation resulted in prejudice to him. The Superior Court concluded that the plaintiff could not show prejudice since the identity of the insurance company had no bearing on whether or not the defendant driver was negligent. 

It is anticipated that UIM carrier’s will rely upon this case to argue that their identities should never be disclosed in these circumstances. However, plaintiffs will respond that this is a case that is very much limited to the fact that the defendant driver was not negligent. Plaintiffs’ counsel can be expected to continue to fight for the right to have cases tried on the reality of the parties, and not on the basis of myths and phantoms.

“Idiopathic” Falls Are Compensable in PA

“Idiopathic” in medical terms means “unknown cause.”  But in the workers’ compensation field, “idiopathic” means “unique to the individual.”

Pennsylvania is one of the few states that find an employee who suffers an “idiopathic fall” while on the job, can collect PA workers’ compensation benefits.   The two leading cases in PA that granted benefits for an “idiopathic fall” did not have similar fact patterns. 

In one case, the employee fell while on duty at her work station.  She sustained a serious head injury when her head struck the linoleum floor.  As a result of the fall,  she suffered frequent seizures and underwent two brain surgeries.  It was unclear how the fall occurred: if the employee had tripped or if she had fainted.  The Court held that it did not matter.  The Court accepted the conclusion that the employee’s head injury, resulting from her fall at work, caused uncontrollable seizures that rendered her disabled.  Workers’ compensation benefits were properly granted. 

In another leading case, the employee had an epileptic seizure while driving his car in his employer’s parking lot prior to the start of his workday.  The employee lost control of his car and crashed into a few cars before hitting a concrete abutment on employer’s premises.  He was killed in this tragic accident.  The PA Court found this accident compensable and the employee’s widow was awarded workers’ compensation benefits.  

Pennsylvania is in the minority in granting workers’ compensation benefits for idiopathic falls.  A majority of the states hold that if a employee has a personal condition that causes the employee to lose consciousness and faint or fall, the resulting injuries are compensable only if the work conditions contributed to the injuries sustained.  

The Bunkhouse Rule

In Pennsylvania, “the bunkhouse rule” provides that an employee’s hours of employment are not necessarily limited to the hours actually worked. Travelling back to 1924, the Pennsylvania Commonwealth Court has revived the rule.

In the 1924 case, scabs were replacing striking workers. As it was impractical for the employees to obtain lodging elsewhere, they were lodged in a “bunkhouse.” It was necessary for the employer to keep them on the premises to keep the business operating. While the employees were sleeping in the bunkhouse, someone tossed a bomb into the bunkhouse and three employees were killed. The courts of the time ruled the injuries and loss of life were compensable and the “bunkhouse rule” was born.

Fast forward to 2014 and a new case revives the “bunkhouse rule.” A mother was employed as a health care worker for her adult son under a state funded program. The mother provided attendant care for her son at her residence in exchange for hourly wages. The son needed care due to significant medical issues, including the amputation of his leg. The mother worked 40 hours Monday thru Friday and 12 hours per day on Saturday and Sundays. While the mother was sleeping one evening, the son came into her bedroom and attacked her with a kitchen knife. She suffered physical injuries and post-traumatic stress disorder as a result of the attack.

The mother sought workers’ compensation benefits for these injuries. The workers’ compensation judge ruled that there was an employment relationship. The workers’ compensation judge found that based upon the evidence, she demonstrated that her employment for her son required her to be on the premises at the time she sustained her injuries, thus invoking the “bunkhouse rule.” The Commonwealth Court agreed keeping the “bunkhouse rule” alive 90 years after its birth.

The Going and Coming Rule

Not all injuries suffered while commuting to work are exempt from Workers’ Compensation. A recent Commonwealth Court case argued by Abes Baumann  reversed the decisions of the Workers’ Compensation Appeal Board and the Workers’ Compensation Judge and found that a Claimant injured on his way to work suffered a work related injury. 

The Claimant was employed as a cable technician responsible for installing cable and network services for his employer at customers’ homes and businesses. Claimant reported to work each day at Employer’s facility where he clocked in and picked up his assignments and equipment for the day. He then spent the rest of the work day traveling to and working at various customer locations. The Employer allowed Claimant to take the company vehicle home each night and use it to report to work in the mornings. Claimant was not allowed to have passengers in the vehicle, and he was not permitted to use the vehicle for any other purpose besides work. 

Claimant was injured while driving the company vehicle to Employer’s facility to get his work assignments for the day. He was injured in a single car accident which resulted in significant injuries and required life-flight transportation to the hospital.

Claimant filed a Claim Petition. Employer objected to the Claim Petition asserting that Claimant was not in the course of his employment at the time of his injury.

The Court noted that pursuant to the “going and coming rule,” injuries sustained while an employee is traveling to and from his place of employment are outside the course of employment; therefore, not compensable under the PA Workers’ Compensation Act. However, there are exceptions to the “going and coming rule.” The exceptions include:  1) the claimant’s employment contract includes transportation; 2) the claimant has no fixed place of work; 3) the claimant was on a special mission for the employer; and 4) the special circumstances are such that the claimant was furthering the business of the employer.

In a prior case, the Court stated that a cable technician is a traveling employee. Like our case, that claimant was a cable technician who was given a company van to drive to and from work, and he was prohibited from using for the vehicle for non-work purposes. That claimant also reported to office each day to pick up his paperwork, then traveled to customer’s locations, returning to the office to drop off paperwork. He was injured in an auto accident on the way to work. The Court determined he was a traveling employee as he was not in the office for more than 15 minutes a day. 

The Court stated our case was “factually indistinguishable” from the prior case. Therefore, the Court adopted reasoning in the prior case and found that our Claimant was a traveling employee with no fixed place of work, thus exempt from the going and coming rule. Our Claimant was entitled to the presumption that he was working for Defendant when driving from his house to office. The Commonwealth Court concluded our Claimant’s injury occurred during the course and scope of employment and was compensable under the Act.    

Pennsylvania Supreme Court: “A job must be open and available to count in a Labor Market Survey.”

The Pennsylvania Supreme Court has recently issued a ruling that will help injured workers who are faced with labor market surveys by a vocational expert hired by the workers compensation carrier. In Phoenixville Hosp. v. Workers’ Comp. Appeal Bd., 81 A.3d 830 (Pa. 2013), the court concluded that a job must be actually open and available in order for it to be used to stop or reduce a claimant’s benefits.

Under the Worker’s Compensation act, the carrier has the right to hire a vocational expert and compel the injured worker to meet with that expert. The expert gathers information about the worker’s employment history, educational background, interest and skills. The expert then analyzes the skills the worker has that could be transferred to another job. Then, a review is made of the local job market to identify positions which the injured worker has the physical ability to perform, along with the vocational ability to qualify for the job. Insurance companies often file petitions to stop or lower and injured worker’s compensation based on the opinion of the vocational expert that work exists that the worker is capable of performing.

Claimant’s attorneys have often recommended to their clients to apply for the jobs which are found by the insurance company vocational expert. Not every vocational expert has been willing to notify the injured worker about the jobs as they become available. However, when our firm has been able to get the expert to agree to notify our clients about the job, we have urged them to apply. We felt this was often the best test of whether the job actually existed for our clients and also demonstrated good faith by our clients. The Supreme Court, in Phoenixville Hospital, has now essentially adopted our position. The court has concluded that an injured worker’s application for the job is relevant evidence that has to be considered by the workers compensation judge in a modification petition based on a labor market survey. If the worker applies for the position and is not hired, this can be evidence sufficient for a workers compensation judge to find that the work does not exist such that benefit should be lowered or stopped. This case also clarifies that a job has to not just exist in an abstract sense in that someone is working such a position. The position actually has to be open such that an injured worker could actually get hired for the job. As a result, this case has a favorable outcome for injured workers in the state of Pennsylvania.


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