Mishoe v. Erie Insurance Co.

762 A.2d 369, 2000 Pa. Super. 327, 2000 Pa. Super. LEXIS 3040
CourtSuperior Court of Pennsylvania
DecidedOctober 31, 2000
StatusPublished
Cited by12 cases

This text of 762 A.2d 369 (Mishoe v. Erie Insurance Co.) is published on Counsel Stack Legal Research, covering Superior Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mishoe v. Erie Insurance Co., 762 A.2d 369, 2000 Pa. Super. 327, 2000 Pa. Super. LEXIS 3040 (Pa. Ct. App. 2000).

Opinion

BROSKY, J.

¶ 1 These consolidated appeals have been remanded to this Court from the Pennsylvania Supreme Court 1 for a determination of a single narrow issue: whether a party is entitled to demand a jury trial in an action for bad faith against an insurer pursuant to 42 Pa.C.S.A. § 8371.

¶ 2 In our previous disposition, we briefly recounted the relevant facts as follows.

In the Lebanon County case, appellant Mishoe suffered significant injuries in an automobile accident in 1990. He recovered the full policy limits from the other driver’s insurance company, and then made a claim for underinsurance benefits with appellee Erie Insurance Co., with whom he had his own insurance policy. Mishoe rejected Erie’s settlement offer, and the parties proceeded to arbitration. The arbitrators entered an award in Mishoe’s favor in an amount which was nearly ten times Erie’s highest offer. Mishoe thereafter commenced an action in the trial court claiming, inter alia, bad faith on the part of Erie pursuant to Section 8371. In ruling on Erie’s motion for partial summary judgment, the trial court entered an order striking Mishoe’s jury trial demand.
The facts in the Blair County case are similar. Appellant Hamer was also involved in an automobile accident, was injured, and did recover the full policy limits from the other driver’s insurance company. Thereafter Hamer made a claim for underinsurance benefits from appellee Federal Kemper Insurance Co., with whom she had her own automobile insurance policy. Hamer rejected Federal Kemper’s offer of settlement, and also received an arbitration award in an amount which was more than thirteen times the offer made by Federal Kem-per. An action pursuant to Section 8371 was subsequently filed, wherein Hamer requested a jury trial. The trial court determined that no right to a jury trial existed under that section.

Mishoe v. Erie Insurance Co., 747 A.2d 426, 1578 HBG 1998 (unpublished memorandum filed August 20, 1999) at 2-3. Concluding that such a right does exist under the statute, we reversed the orders of the respective trial courts and remanded for further proceedings. On appeal to the Pennsylvania Supreme Court, the matter was remanded to this Court for reconsideration of our disposition in light of the recent Supreme Court decision in Wertz v. Chapman Township, 559 Pa. 630, 741 A.2d 1272 (1999). 2

¶ 3 Both actions were filed pursuant to Section 8371 of the Judicial Code, which provides as follows.

§ 8371. Actions on insurance policies
In an action arising under an insurance policy, if the court finds that the insurer has acted in bad faith toward the insured, the court may take all of the following actions:
(1) Award interest on the amount of the claim from the date the claim was made by the insured in an amount equal to the prime rate of interest plus 3%.
(2) Award punitive damages against the insurer.
(3) Assess court costs and attorney fees against the insurer.

42 Pa.C.S.A. § 8371.

¶4 On its face, this section is clearly silent on the right to a jury trial. Appel *371 lants have presented essentially the same arguments in support of their contention that a party does, nonetheless, have such a right in an action pursuant to Section 8371. We restate Appellants’ arguments as follows.

1. Using principles of statutory construction the use of the word “court” in Section 8371 does not limit the determination to a judge rather than a jury.
2. The legislative intent is clearly to permit a jury determination in an action on an insurance policy claiming bad faith.
3. A contract action for money damages arises from common law and has typically been determined by a jury.
4. The public interest in deterring bad faith is served by permitting the determination of bad faith to be made by a jury.
5. Article I, Section 6 of the Pennsylvania Constitution mandates a jury trial where a common law right is at issue.
6. The Seventh Amendment of the United States Constitution provides for a jury trial in civil cases.

¶ 5 We note that no state appellate court in this Commonwealth has addressed the specific issue before us, although several common pleas courts have done so. 3 In addition, several federal courts have been presented with the question of whether a party has a right to a jury trial in a Section 8371 claim in federal court. In Younis Brothers & Co., Inc. v. CIGNA Worldwide Insurance Co., 882 F.Supp. 1468 (E.D.Pa.1994), the district court concluded that no right to a jury trial was created by Section 8371, but that the Seventh Amendment of the U.S. Constitution does afford a trial by jury in federal court. Accord, Fahy v. Nationwide Mutual Fire Insurance Co., 885 F.Supp. 678 (M.D.Pa.1995); Klinger v. State Farm Mutual Automobile Insurance Co., 115 F.3d 230 (3rd Cir.1997). However, those cases addressed the issue of the right to a jury trial on a state statutory claim as a matter of federal law. As the Fahy court recognized, it is possible that a state law claim might entitle the parties to a jury trial in federal court, but not confer the same right if the issue were litigated in state court. See also Wertz, supra, 559 Pa. at 643 n. 5, 741 A.2d at 1279 n. 5 (noting that it is possible that a case which joins a PHRA claim with a federal claim would be heard by a jury, but that same case heard in state court would be heard only by a judge; but “such is one of the peculiarities of our system of federalism.”) In addition, we also note that an interpretation of Pennsylvania law by a federal court may be persuasive where our own Supreme Court has not addressed the issue, but the same is not binding precedent. Hoy v. Angelone, 554 Pa. 134, 720 A.2d 745 (1998).

¶ 6 Our Supreme Court has, however, provided guidance for our analysis in Wertz, supra. There, the appellant sought relief for alleged discrimination pursuant to the Pennsylvania Human Relations Act (PHRA), 4 and demanded a jury trial. The court of common pleas denied the motion, and after trial entered a judgment in favor of the appellees. The Commonwealth Court vacated and remanded for a new trial, but affirmed the trial court’s denial of a trial by jury under the PHRA. Our Supreme Court affirmed, concluding that a plaintiff does not have the right to a jury trial in a claim made pursuant to the PHRA, under either the Act or the Pennsylvania Constitution.

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Bluebook (online)
762 A.2d 369, 2000 Pa. Super. 327, 2000 Pa. Super. LEXIS 3040, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mishoe-v-erie-insurance-co-pasuperct-2000.