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September 2013 Archives

Pennsylvania Superior Court Interprets Forfeiture Clause in Oil and Gas Lease

In McCausland v. Wagner, the Pennsylvania Superior Court was confronted with the question of whether the lessor under an oil and gas lease was entitled to terminate the lease due to the lessee's failure to pay royalties under the lease. 2013 PA Super 256 (Pa. Super. Sept. 20, 2013). The lessor argued that the forfeiture clause in the lease entitled him to terminate the lease, even though he had accepted payments for the belated royalties under a separate settlement reached with the lessee. The Superior Court disagreed.

District Court for the Western District of Pennsylvania Allows Punitive Damages Claim for Alleged Cell Phone Use in Trucking Accident

Western Federal District Court Judge Mark R. Hornak recently granted a Plaintiff's Motion for Leave to File an Amended Complaint to add punitive damages in Scott v. Burke, et. al., 2013 U.S. Dist. LEXIS 123432 (W.D. Pa. Aug. 29, 2013 Hornak, J.) The facts of the case involve a traffic accident in Fayette County where Plaintiff-decedent's car became disabled on a two-lane roadway. Plaintiff-decedent exited the car and was located near the trunk of her vehicle. Defendant Thomas Burke was operating a tractor with two attached trailers for his employer United Parcel Services, Inc. ("UPS"), who admit that Burke was acting within the scope and course of his employment. The tractor trailer driven by Defendant collided with Plaintiff-decedent and her vehicle, killing her and severely injuring one of her children. The surviving spouse brought this action on behalf of Plaintiff-decedent.

No Implied Employment Contract Where Employee Left Former Job, Forewent Full Severance Benefits, on Employer's Assurances of Future Employment with Company

In a recent decision, the U.S. District Court for the Western District of Pennsylvania considered whether an employee who had left his former position of employment to join a competitor and forewent full severance benefits was able to establish an implied employment contract with his new employer, who had terminated him after only three months of employment despite having given him assurances of future employment. Morini v. Civil Castle Cheese, No. 10-1739, 2013 U.S. Dist. LEXIS 139032 (W.D. Pa. Sept. 27, 2013). The court resolved this issue in the negative.

Pennsylvania's Middle District Chooses to Apply Restatement Third to Faulty Ladder Case

The "state of flux"[1] continued in the landscape of Pennsylvania products liability law, with the U.S. District Court for the Middle District of Pennsylvania choosing to apply the Restatement Third of Torts to a Plaintiff's strict liability claims in a matter involving an allegedly defective ladder. This is significant, as almost one year ago the Middle District chose to apply the Restatement Second in a products liability action. [2] The volatile nature of the applicable substantive law in Pennsylvania product liability actions figures to continue until the Pennsylvania Supreme Court renders an Opinion on the applicable substantive law in Tincher v. Omega Flex, 64 A.2d 626.

Pennsylvania Supreme Court to Finally Tackle Restatement Second vs. Restatement Third Issue

In Tincher v. Omega Flex, 64 A.2d 626, the Pennsylvania Supreme Court granted a Petition for Allowance of Appeal to address the issue of :

Safe Harbor Provision of Procurement Code May Not Protect Surety, Depending on Bond Language

In an opinion dated July 11, 2013, The Pennsylvania Commonwealth Court affirmed a lower court ruling finding that a surety may waive its protections under the Safe Harbor Provision of the Procurement Code language in its form Surety Bond. In Berks Products Corp. v. Arch Ins. Co., No 1457 C.D. 2012, Judge Patricia McCullough of the Pennsylvania Commonwealth Court upheld a finding that Arch Insurance remained liable to a materialman on a public project, even though the general contractor had paid its subcontractors in full.Jeff web photo.jpg

Pennsylvania Insurance Law 101--Insurance Company's Responsibilities Under a Liability Insurance Policy: Duty to Defend and Duty to Indemnify

An insurance company's responsibilities to its insureds are defined by the insurance contract, statutes and regulations. Case law further refines an insurer's duties. The primary responsibilities of the insurer defined by the insurance contract are the duty to defend and the duty to indemnify.BrandonMcCullough--Insurance Blog Photo 2.jpg

Pennsylvania Superior Court Issues Significant Ruling Regarding Insurer's Duty To Indemify Unauthorized Settlement Made By Insured Being Defended Under A Reservation Of Rights

In what is certainly going to prove to be a significant decision that affects the landscape for insurers and insureds alike, the Pennsylvania Superior Court recently issued an opinion addressing the legal standard to be applied when evaluating an insurer's duty to indemnify an insured for an unauthorized settlement made by the insured while being defended under a reservation of rights. In Babcock & Wilcox Co. v. Am. Nuclear Insurers & Mut. Atomic Energy Liab. Underwriters, 2013 Pa. Super. LEXIS 1630 at *6-7 (Pa. Super. June 10, 2013), the court was called on to decide whether the settlement should be evaluated under the "bad faith" standard articulated in Cowden v. Aetna Casualty and Surety Co., 134 A.2d 223 (Pa. 1957), or the "fair and reasonable" standard formulated in Alfiero v. Berks Mutual Leasing Co., 500 A.2d 169 (Pa. Super. 1985).

Surety not subject to claims for bad faith or breach of fiduciary duty

In a case of first impression, Judge Mark Hornak of the U.S. District Court of the Western District of Pennsylvania has determined, in an "Erie guess" that the Jeff web photo.jpgPennsylvania Supreme Court would not allow a principal to sue its surety on a construction job for either breach of fiduciary duty or for bad faith. The full opinion can be found at Reginella Construction v. Travelers Casualty and Surety Co. of America, 2013 WL 2404140 (W.D.Pa. May 31, 2013).

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