TA v. Allen

868 A.2d 594

T.A., Individually and B.A. and H.A., Minors by Their Guardian Merle S. Kramer, Appellants, v. Eugene R. ALLEN and Elizabeth Ann Allen, His Wife, v. Debbie Allen v. General Accident Insurance Company of America, National City Bank of Pennsylvania and PNC Bank.

General Accident Insurance Company of America v. Eugene R. Allen, Elizabeth Allen, T.A., B.A., H.A. and Merle S. Kramer, Guardian Ad Litem for B.A. and H.A., Minors.

Superior Court of Pennsylvania.

Argued October 27, 2004.

Filed February 8, 2005.

Dennis St. J. Mulvihill, Pittsburgh, for appellants.

Ronald F. O'Brien, Jr., Philadelphia, for General Accident, appellee.

BEFORE: PANELLA, POPOVICH and JOHNSON, JJ.

OPINION BY POPOVICH, J.:

¶ 1 At 327 WDA 2004, Appellant T.A., individually, and Appellants B.A. and H.A.,¹ through their guardian ad litem, appeal the entry of summary judgment in favor of Appellee General Accident Insurance Company of America, entered on January 28, 2004, in the Court of Common Pleas of Allegheny County. At 407 WDA 2004, Cross-Appellant General Accident Insurance Company of America appeals the order entered September 3, 2003, that ordered Cross-Appellees' bad faith claims to proceed to a jury trial.² At 327 WDA 2004, we affirm the trial court's entry of summary judgment. At 407 WDA 2004, we dismiss the appeal as moot.

¶ 2 The relevant facts and procedural history of this case are set forth fully in the trial court's opinion of January 28, 2004, as follows:

In February 1989, Eugene R. Allen [(the deceased)] was convicted of criminal offenses involving the sexual abuse of [Appellants,] his grandchildren, who were born in 1973, 1979, and 1980. The offenses were committed between 1986 and 1988 in a residence in Wilkinsburg and a cottage in Crawford County owned by [the deceased] and his Wife, Elizabeth Ann Allen [(Grandmother)].

In these proceedings [docketed at] GD89-13380, [Appellants] commenced an action against both grandparents. The claims against [Grandmother] were based on her alleged failure to exercise due care to protect [Appellants] from the misconduct of [the deceased]. ([the deceased] named [Appellants'] mother as an additional defendant).

On September 1992, a jury entered a verdict in favor of [Appellants] against [the deceased, Grandmother, and Appellants' mother]. The jury awarded compensatory damages [to each Appellant; the aggregate compensatory damage award was $5.1 million dollars]. Punitive damages were awarded against [the deceased] in the amount of $10 million for each [Appellant] and against [Grandmother] in the amount of $230,000.00 for each [Appellant].

[The deceased and Grandmother filed separate appeals to this Court]. In an unpublished memorandum [filed] November 28, 1994, [this Court affirmed the trial court's judgment]. [Allen v. Allen, 657 A.2d 45 (Pa.Super. filed 11/28/1994) (unpublished memorandum), allocatur denied, 544 Pa. 641, 664 A.2d 971 (1995)]. [The deceased's] application for writ of certiorari to the United States Supreme Court was denied on January 16, 1996. Allen v. Allen, 516 U.S. 1074[, 116 S.Ct. 777, 133 L.Ed.2d] 729 (1996).

[In T.A. v. Allen, 669 A.2d 360 (Pa.Super.1995), allocatur denied, 544 Pa. 661, 676 A.2d 1201 (1996), this Court reversed the judgment of the trial court against Grandmother] and entered judgment n.o.v. in her favor.

DECLARATORY JUDGMENT PROCEEDINGS AT GD90-14002

[Appellee] issued homeowners' insurance policies for three consecutive years beginning December 3, 1985, to [the deceased and Grandmother as husband and wife]. The policies contained language specifically excluding claims for bodily injury which are expected or intended by the insured. [Appellee] undertook the legal defense of the civil action at GD89-13380, subject to a reservation of rights.

On August 15, 1990, [Appellee] filed [a declaratory judgment action at GD90-14002] seeking a determination of its duties under the [homeowners' policy]. [Appellee named as defendants on the complaint the deceased, Grandmother, and Appellants.] [Appellee] sought a declaration that it had no duty to defend [or] indemnify either [the deceased or Grandmother]. On December 1, 1992, [Appellants] filed an amended answer and new matter to [Appellee's] complaint[. The deceased did not respond to Appellee's complaint].

[Both Appellants and Appellee] filed motions for summary judgment on the issues raised in [Appellee's] complaint[.] On August 15, 1994, [the trial court] partially granted the summary judgment motions of [the parties].

In General Accident Insurance Co. of America v. Allen, 708 A.2d 828 (Pa.Super.1998), [this Court held] that [the deceased's conduct] was of an intentional nature. Consequently, [Appellee] did not have any duty to defend [the deceased]. However, [because Grandmother's] behavior was not of an intentional nature, [this Court held] that [Appellee] had a duty to defend [Grandmother].

Neither the [trial court] nor [this Court] considered the claims which [Appellants] raised in their amended new matter filed in [the proceedings at GD90-14002]. This new matter, filed only on behalf of [Appellants], raise[d] statutory and contractual bad faith claims arising out of [Appellee's] conduct during the settlement negotiations and involving [Appellee's] strategies. On December 22, 1992, [Appellee] filed preliminary objections to the amended new matter. The defenses raised to the new matter [included] the failure of [Appellants] to state a cause of action[. Appellee asserted] that [Appellants] [could not] bring statutory or contractual bad faith claims against [Appellee] because they [were] not parties to the insurance agreement.

On December 23, 1992, [the trial court] entered an order which severed and stayed all claims for bad faith for purposes of the trial [on] the declaratory judgment action, subject to the right of counsel to request the lifting of the stay should a change of circumstances [warrant such an action]. The stay [entered by the trial court] was lifted on May 22, 2002.

GARNISHMENT PROCEEDINGS AT GD89-13380

On April 2, 1997, in the proceedings at GD89-13380, [Appellants] commenced a garnishment action against [Appellee] by filing a praecipe for a writ of execution. These garnishment proceedings, [that seek] an amount in excess of $46 million [dollars], are based on the claim that [the deceased] owes a debt to [Appellants] and that [Appellee] holds money which it owes to [the deceased] because it breached its contractual and statutory obligations of good faith.

On June 6, 1997, [Appellee] filed preliminary objections to the garnishment interrogatories. These preliminary objections include[d] the defense that a judgment creditor cannot bring a bad faith action against a judgment debtor's insurance company because the insurance company does not have any obligations to the judgment creditor in the absence of [a] contractual relationship. On September 4, 1997, [the trial court] overruled the preliminary objections and, pursuant to an agreement of the parties, stayed the garnishment proceedings until resolution of the declaratory judgment action in [this Court]. Subsequently, the parties stipulated that the May 22, 2002 court order lifting the stay in the declaratory judgment action also applied to the [garnishment] proceedings.

APRIL 4, 2002 ASSIGNMENT

* * *

At the time [Appellants] filed their amended answer and new matter to [Appellee's declaratory judgment action at GD90-14002, Appellants] did not plead that [the deceased] had executed [to them] an assignment [of] his rights [to sue Appellee for statutory and contractual bad faith]. Furthermore, they could not do so, because, at the time the garnishment action was commenced on April 2, 1997, [the deceased] had never assigned any bad faith claims that he [may have] had against [Appellees] to [Appellants]. According to [Appellants,] their counsel sent a letter to [the deceased] requesting an assignment of his rights. [The deceased] wrote back [and stated] that he could not sign the assignment.

[The deceased] died on August 25, 1999. An estate was opened for him. On April 4, 2002, [Appellants] obtained assignments of rights from the Administratrix of [the deceased's estate], [these assignments included] all rights that the estate may have [had] against [Appellees] arising out of the 1989 litigation and insurance claims associated with the incidents [that] are the subject of this litigation.

Trial court memorandum, 1/28/2004, at 1-7 (footnotes omitted).

¶ 3 Appellee filed a motion to consolidate the cases at GD89-13380 and GD90-14002, and, on November 25 2002, the trial court consolidated the cases. The consolidated cases continued through discovery and pre-trial pleadings, and, on September 28, 2003, Appellee filed a motion for summary judgment based on the statute of limitations. The trial court entered summary judgment in Appellee's favor on January 28, 2004, and dismissed the cases against Appellee at GD89-13380 and GD90-14002.³

¶ 4 Appellants filed a timely notice of appeal from the trial court's order. The trial court did not order Appellants to file a concise statement of matters complained of on appeal, and it did not author a second memorandum in this case.

¶ 5 Appellants present the following issues for our review:

1. Whether a third party claimant must have an express assignment from the insured tortfeasor to bring a bad faith action against the tortfeasor's insurer where there has been an excess verdict rendered against the insured tortfeasor?

2. Whether [Appellants'] bad faith claims are barred by the statute of limitations where they did not need an express assignment when they first asserted their bad faith claims against [Appellee]?

3. Whether [Appellants'] bad faith claims based on an express assignment from the [e]state of [the deceased] constitute new causes of action so that any amendment to the pleadings to assert these claims would not relate back to the original pleadings?

Appellants' brief, at 4.⁴

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