Mohney, T. v. American General Life

• Court: Superior Court of Pennsylvania
• Decided: October 10, 2019
• Docket: 760 WDA 2018
• Status: Unpublished

Opinion

J-A08011-19

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

TIMOTHY A. MOHNEY : IN THE SUPERIOR COURT OF : PENNSYLVANIA Appellant : : : v. : : : AMERICAN GENERAL LIFE : No. 760 WDA 2018 INSURANCE COMPANY, AS : SUCCESSOR BY MERGER TO : AMERICAN GENERAL ASSURANCE : COMPANY, AS SUCCESSOR IN : INTEREST TO U.S. LIFE CREDIT : INSURANCE COMPANY :

Appeal from the Judgment Entered May 14, 2018 In the Court of Common Pleas of Armstrong County Civil Division at No(s): 1995-0764-Civil

BEFORE: PANELLA, P.J., STABILE, J., and McLAUGHLIN, J.

MEMORANDUM BY PANELLA, P.J.: FILED OCTOBER 10, 2019

Timothy A. Mohney, appeals from the judgment entered after the trial

court entered a non-jury verdict against Mohney’s insurance bad faith claims

against Appellee, American General Life Insurance Company (“American”).

Mohney had sued American as a successor company to U.S. Life Credit

Insurance Company (“U.S. Life”), based upon allegations of insurance bad

faith against U.S. Life. The trial court ruled that Mohney had failed to carry his

burden of proving the claims by clear and convincing evidence. Mohney raises

six issues on appeal, which can be loosely grouped into two categories: (1)

challenges to the trial court’s decisions on discovery matters, and (2) J-A08011-19

challenges to the trial court’s evidentiary rulings. After careful review, we

affirm.

The torturous course of the proceedings before the trial court were

protracted and problematical. Mohney’s original complaint involved multiple

claims based upon numerous theories and was dismissed after U.S. Life filed

preliminary objections. After the trial court granted, in part, U.S. Life’s

preliminary objections to Mohney’s first amended complaint, Mohney filed a

second amended complaint, which forms the basis for the proceedings

currently under review.

After this Court twice remanded this case to the trial court for further

proceedings, the only remaining issue is based upon Mohney’s claim that U.S.

Life exercised bad faith in denying his claim for total disability benefits under

his insurance policy with U.S. Life. This claim had been twice dismissed by the

trial court, once pre-trial and another after trial. In both instances, this Court

reversed and remanded for further proceedings

A second bench trial was held in September 2017, presided over by then

Senior Judge William J. Ober (retired). Senior Judge Ober entered a verdict

following the trial, finding that Mohney did not prove that U.S. Life, American’s

predecessor, had knowingly or recklessly “disregarded the lack of a reasonable

basis for its” denial and termination of the payment of credit disability benefits.

Adjudication and Verdict, 12/20/17 at 2-3.

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After Mohney’s filed post-trial motions, the case was reassigned to the

Honorable Chase G. McClister of the Court of Common Pleas of Armstrong

County, Pennsylvania, because Senior Judge Ober had retired. On May 4,

2018, Judge McClister denied the post-trial motions. Later, Judge McClister

filed a comprehensive Memorandum Opinion, comprised of 16 pages, on July

20, 2018, fully explaining the reasons supporting Senior Judge Ober’s verdict.

Appellant raises six issues on appeal:

1. Reversal of discovery sanctions tends to make it more advantageous for the offending party to withhold information. Instantly, long after expert witness disclosures were required, just before trial, Defendant disclosed its insurance expert. The first trial judge found Defendant's offending conduct was willful, intentional and ongoing, striking Defendant's insurance expert. After appeal and remand, Defendant sought reversal of the discovery sanctions, which the third trial judge granted. Was it error for the third trial judge to reverse the sanctions entered by the first trial judge?

2. An insurer must have a reasonable basis to terminate disability benefits. This Court previously determined that Defendant unreasonably relied upon an equivocal medical opinion to terminate Mohney's [d]isability [b]enefits. Defendant's expert rejected this finding by opining that reliance on the equivocal medical opinion was proper according to industry standards. The [t]rial [c]ourt accepted this testimony and found that Defendant did not act recklessly or with a knowing disregard of its lack of a reasonable basis. Did the trial court err in finding that Defendant's reliance upon the equivocal medical opinion complied with industry standards?

3. During claims handling, if an insurer makes misrepresentations to the insured, the insurer violates industry standards. The misrepresentations are evidence

-3- J-A08011-19

that the investigation of the claim was neither honest nor objective. This Court determined that Defendant made misrepresentations to the insured during the investigation. The trial court determined that Defendant's claims handling complied with industry standards and therefore Defendant's conduct could neither be reckless nor knowing. Did the trial court err?

4. Expert Opinions must be supported by credible facts and not be based upon speculation. Defendant's expert opined that Defendant met industry standards by providing adequate training on legal interpretations of policy terms, and by providing the adjusters with direction as to when they should seek guidance (i.e., legal research) from the available staff attorneys. Defendant's expert relied upon the adjuster's testimony. The adjuster's testimony about training was vague and superficial. Did the trial court err by relying upon the unsupported opinion of Defendant's expert?

5. The analysis of an insurer bad faith claim is dependent on the conduct of the insurer, not its insured. Instantly, this Court held: "on remand, evidence of Mohney's post-denial conduct should not be admitted." During the second bad faith trial, Defendant was permitted, over Plaintiff's objection, to introduce evidence of post-denial conduct of the Plaintiff. Did the trial court err by admitting evidence which this court previously determined to be inadmissable?

6. A reasonable investigation to determine whether a claim should be paid requires the insurer to review all available information whenever it is received. Bad faith conduct can occur before, during, and after litigation. Plaintiff sought discovery to learn what investigation Defendant conducted on the disability claim based upon information the insurer received after the breach of contract claim was filed, litigated, and appealed. The trial court refused to compel Defendant to respond to this requested discovery. Did the trial court err?

Appellant’s Brief, at 5-6 (footnote omitted).

-4- J-A08011-19

In reviewing the outcome of a nonjury trial, we are limited to

determining whether the trial court's factual findings are supported by

competent evidence, and whether the court properly applied the pertinent

law. See Prestige Bank v. Investment Properties Group, Inc., 825 A.2d

698, 700 (Pa. Super. 2003). “[A]bsent an abuse of discretion, the reviewing

court is bound by the trial court's credibility determinations.” De Lage

Landen Financial Services, Inc. v. M.B. Management Co., Inc., 888 A.2d

895, 898 (Pa. Super. 2005). Those findings must be afforded the same weight

and effect as a jury verdict and will not be disturbed on appeal absent an error

of law or an abuse of discretion. See Prestige Bank, 825 A.2d at 700.

After a thorough and meticulous examination of the record, and a careful

review of the briefs, we find that the Adjudication and Verdict of December

20, 2017, the Order of May 4, 2018, and the Memorandum Opinion of July 20,

2018, adequately address all of the issues raised by the Appellant, and are

more than sufficiently supported in the record. Therefore, we affirm on the

basis of the aforesaid decisions by the trial court.

Judgment Affirmed. Jurisdiction relinquished.

Judgment Entered.

Joseph D. Seletyn, Esq. Prothonotary

Date: 10/10/2019

-5- J-A08011-19

-6- v:J�· Received 6/18/2018 2:38:52Circulated PM Superior Court Western 09/18/2019 District 11:27 AM

Filed 6/18/2018 2:38:00 PM Superior Court Western District IN THE COURT OF COMMON PLEAS OF ARMSTRONG COUNTY, PENNSYLVANIA60WDA2018

TIMOTHY A. MOHNEY, Plaintiff,

vs. No. 1995-0764-CIVIL AMERICAN GENERAL LIFE INSURANCE COMPANY, as successor by merger to AMERICAN GENERAL ASSURANCE COMPANY, as successor in interest to U.S. LIFE CREDIT INSURANCE COMPANY, C)� ::::_; . Defendant. .. -r1 '..: _(} ::::.: .. .,.. r:"'j ADJUDICATION and VERDICT -- -�-- ,,,·..-

AND NOW, this �;I� day of December, 2017,

jury trial of Count VI of Plaintiff's Second Amended Complaint

claiming bad faith under 42 Pa. Cons. Stat. Ann. § 8371, as

remanded by the Superior Court of Pennsylvania, I find as

follows:

1) The legal standard for bad faith has been set forth by

our Supreme Court in Rancosky v. Washington Nat'l Ins. Co., 170

A.3d 364, 365 (Pa. 2017) {citing Terletsky v. Prudential Property

& Cas. Ins. Co., 649 A.2d 680 (Pa. Super. Ct. 1994)). In order

to recover in a bad faith action, the plaintiff must present

clear and convincing evidence 1) that the insurer did not have a

reasonable basis for denying benefits under the policy, and 2)

that the insurer knew of or recklessly disregarded its lack of a

reasonable basis for denying benefits under the policy. 2) The parties have stipulated that the first element of

that standard has been satisfied as a matter of law.1

3) I considered all of the evidence and testimony

presented at trial. I reviewed this in light of each of the

parties' suggested findings of fact and conclusions of law.

4) At the remanded bad faith trial, unlike at the

previous bad faith trial, each party presented expert testimony

regarding knowing or reckless disregard of a reasonable basis to

terminate benefits. I find that U.S. Life's expert, Barbara J.

Sciotti, was well-qualified in insurance claims management and

offered more credible testimony than that of the Plaintiff's

expert witness, John A. McCandless, Esq. She opined, inter

alia, as follows:

a. U.S. Life had provided Mr. Carroll with adequate

training and support with regard to claims adjusting

practices;

b. Mr. Carroll complied with industry practice; and

c. U.S. Life did not place its own interests ahead

of those of Plaintiff.

NOW THEREFORE, the Court finds that Plaintiff has failed to

prove, by clear and convincing evidence, that U.S. Life knew of

1 Although the Superior Court of Pennsylvania appears to have concluded, and the parties have stipulated, that the first prong of the bad faith standard has been satisfied, it would otherwise be the appropriate responsibility of this Court to make the factual determination of whether a reasonable basis existed for U.S. Life's denial of benefits. See Rancosky, 170 A.3d at 377. or recklessly disregarded the lack of a reasonable basis for its

determination. The Court hereby DIRECTS the Prothonotary to

enter judgment in favor of Defendant, and against Plaintiff, on

Count VI of the Second Amended Complaint. It further is ORDERED

that Plaintiff's requests for punitive damages and attorneys'

fees be and hereby are DISMISSED, as moot.

By the Court:

���/:! William J. Ober, S.J. IN THE COURT OF COMM:ON PLEAS OF ARMSTRONG COUNTY, PENNSYLVANIA

TIMOTHY A. MOHNEY, ) Plaintiff, ) ) vs. )

AMERICAN GENERAL LIFE ) ) No. 1995-0764-CIVIL - � c::o ::lt INSURANCE COMPANY, as successor) � by merger to AMERICAN GENERAL ) I sr ASSURANCE COMPANY, as successor) -0 in interest to U.S. LIFE CREDIT ) :x INSURANCE COMPANY, ) ca Defendant. ) c» N

ORDER AND NOW, this id:&. day of May, 2018, upon consideration of Plaintiffs

Motion for Post-trial Relief, Defendant's response in opposition thereto, and the

briefs and argument of the parties, and having reviewed the entire record in this

matter, including the proposed findings of the parties and the trial transcript, the

Court makes the following conclusions:

1. There was no error or abuse of discretion in the Court's

permitting Defendant's expert, Barbara J. Sciotti, to testify regarding whether U.S.

Life knowingly or recklessly disregarded the lack of a reasonable basis for

terminating benefits.

2. There was no error or abuse of discretion in the Court's finding

Ms. Sciotti's testimony more credible than Plaintiffs expert, John A. McCandless,

Esq., on the issue of whether U.S. Life knowingly or recklessly disregarded the lack

of a reasonable basis for terminating benefits. 3. There was no error or abuse of discretion in the Court's finding

that Plaintiff did not present clear and convincing evidence that U.S. Life

knowingly or recklessly disregarded the lack of a reasonable basis for terminating

benefits. The Court considered all of the evidence presented, including the de nova

testimony of the claims handler, Mr. Carroll, and made credibility determinations.

There was evidence in the record indicating, and the Superior Court previously

held, that U.S. Life lacked a reasonable basis for terminating benefits, and its

communications with both Dr. Miller and Plaintiff contained certain omissions and

inaccurate statements of fact. This evidence, if considered alone, would be

suggestive of a knowing or reckless disregard. When considered in light of the

entire record, including the testimony of Ms. Sciotti and Mr. Carroll, it fell short of

clear and convincing evidence, i.e., evidence that is so clear, direct, weighty, and

convincing as to enable the trier of fact to come to a clear conviction, without

hesitancy of the truth of the precise facts in issue. See Berg v. Nationwide Mutual

Ins. Co., __ A.3d __ , 2018 WL 1705274, at *4 (Pa. Super. Ct. April 9,

2018)(citing Grossi v. Travelers Pers. Ins. Co., 79 A.3d 1141, 1165 (Pa. Super. Ct.

2013)). Thus, there was no error or abuse of discretion in the Court's finding that

Plaintiff had failed to carry this high burden of proof.

NOW THEREFORE, on these bases, it is ORDERED that Plaintiffs Motion

for Post·trial Relief be and hereby is DENIED.

Oit/w(dkUL tL.bi Chase G. McClister, J. Circulated 09/18/2019 11:27 AM

IN THE COURT OF CO:Ml\10N PLEAS OF ARMSTRONG COUNTY, PENNSYLVANIA

TIMOTHY A. MOHNEY, ) Plaintiff, ) ) vs. ) ) AMERICAN GENERAL LIFE ) No. 1995-0764-CIVIL INSURANCE COMPANY as successor ) by merger to AMERICAN GENERAL ) ASSURANCE COMP ANY, as successor) in interest to U.S. LIFE CREDIT ) INSURANCE COMPANY, ) Defendant. )

1925(a) MEMORANDUM

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-.. _,._ rq ; ) -- .- / N \.0 -< IN THE COURT OF CO:Ml\10N PLEAS OF ARMSTRONG COUNTY, PENNSYLVANIA

TIMOTHY A. MOHNEY, ) Plaintiff, ) ) vs. ) ) AMERICAN GENERAL LIFE ) No. 1995-0764-CIVIL INSURANCE COMP ANY as successor ) by merger to AMERICAN GENERAL ) ASSURANCE COMPANY, as successor) in interest to U.S. LIFE CREDIT ) INSURANCE COMPANY, ) Defendant. )

1925(a) MEMORANDUM McClister, J.

Plaintiff Timothy A. Mohney ("Mohney") appeals from the judgment on the

verdict entered on May 14, 2018, in favor of Defendant American General Life

Insurance Company, as successor by merger to American General Assurance

Company, as successor in interest to U.S. Lue Credit Insurance Company ("U.S.

Life"). On December 28, 2017, Senior Judge William J. Ober entered an

Adjudication and Verdict, after non-jury trial, on Mohney's claim for insurance bad

faith, finding that he had failed to carry his burden of proving the claim by clear

and convincing evidence. Mohney thereafter filed a motion for post-trial relief on

January 5, 2018, which this Court denied on May 4, 2018. Mohney then praeciped

for entry of final judgment, which was accomplished on May 14, 2018. Mohney filed

his notice of appeal on May 21, 2018, after which the Court directed him to file a

Rule 1925(b) Concise Statement within 21 days. He timely complied on June 13,

1 2018. Given the protracted history of this case, its procedural posture, and the

several opinions authored in this Court and the Pennsylvania Superior Court, the

Court herein will review only those facts and procedural history that are material to

the issues raised in the instant appeal.

A. Procedural History

This case involves an insurance dispute. I am the fourth trial court judge to

consider the merits of the bad faith claim. The case originally involved multiple

claims sounding in various theories. All counts of Mohney's Second Amended (and

still operative) Complaint, filed October 28, 1998, were dismissed except for the

breach of contract (Count III) and bad faith (Count VI) claims. Then-President

Judge Kenneth G. Valasek found in Mohney's favor on the breach of contract claim

by adjudication filed December 27, 2006, and judgment in the amount of $20,772.58

was entered on April 2, 2007. Judge Valasek previously had entered summary

judgment on the bad faith claim, which determination was reversed by the Superior

Court. See Nonprecedential Decision, filed July 1, 2008. U.S. Life's subsequent

petition for allowance of appeal to the Pennsylvania Supreme Court was denied on

December 10, 2008.

After remand, the parties engaged in discovery on the bad faith claim. The

first bad faith trial, before Senior Judge Joseph A Nickleach, occurred in April

2013. Judge Nickleach found in favor of U.S. Life on the bad faith claim, which

decision was reversed, and a new bad faith trial ordered, by the Superior Court on

May 8, 2015. U.S. Life's subsequent petition for allowance· of appeal to the

2 Pennsylvania Supreme Court was denied on December 8, 2015. Approximately five

months later, no action on the case having been taken by the parties, specially-

assigned Senior Judge William J. Ober scheduled a status conference. After the

conference and with the consent of the parties, Judge Ober ordered the case to

mediation. The case did not resolve at mediation. Thereafter, the parties engaged

in discovery. A case management order was entered on December 21, 2016, setting

the dates for trial, the completion of discovery, and additional pre-trial conferences.

The case proceeded to trial in September 2017, after which Judge Ober entered his

adjudication finding that Mohney had not carried its burden to prove, by clear and

convincing evidence, that U.S. Life had knowingly or recklessly disregarded a lack

of a reasonable basis for terminating the payment of credit disability benefits.

Judge Ober's judicial commission expired on December 31, 2017, after which this

Court was assigned to the case. After my disposition of Mohney's post-trial

motions, this appeal followed.

B. Errors Complained of on Appeal

Mohney asserts seven assignments of error on appeal, each of which the

Court will address separately."

1. Compliance with Industry Standards

Mohney argues in his first issue that Judge Ober "erred by finding Defendant

met industry standards, when [the Superior Court] previously determined

1 Several ofMohney's issues challenge specific evidentiary and discovery rulings by Judge Ober without identifying the particular testimony or ruling being challenged. The Court has reviewed the entire record and has identified what it believes to be the issues raised on appeal.

3 Defendant unreasonably relied upon an equivocal medical opinion to terminate

benefits." First, Judge Ober did not anywhere in his findings determine that the

medical opinion provided by Dr. Miller and relied upon by U.S. Life's claims

adjuster, Lawrence Carroll, was not unequivocal. Nor did Judge Ober determine

anywhere in his findings that U.S. Life's basis for terminating benefits was

reasonable. Rather, Judge Ober had before him a narrow and discrete issue,

namely, whether Mohney had proven, by clear and convincing evidence, that U.S.

Life knowingly or recklessly disregarded a lack of a reasonable basis for its

termination decision. Judge Ober expressly acknowledged that the first prong of

the bad faith standard already had been met. See Adjudication and Verdict, at ,r 2 n. 1. Thus, at the outset, Mohney's construction of Judge Ober's findings is not

accurate.

Judge Ober's express finding was that U.S. Life's expert, Barbara Sciotti, was

both well-qualified in insurance claims management and offered credible testimony.

Judge Ober did not rely on the opinion of Mohney's proffered expert, John A.

McCandless, Esq., which he found to be less credible. Mohney has not challenged

that credibility determination on appeal. Even were he to challenge that credibility

finding, it was sound in any event. Mr. McCandless has no firsthand experience in

first party claims handling, of credit disability claims or otherwise. He has never

himself made, in the first instance, a first-party claim determination. All of his

experience working directly in the insurance industry amounts to three years with

Nationwide Insurance Company, which experience pre-dated the enactment of the

4 bad faith statute and only involved claims that had escalated to litigation. Mr.

McCandless has been actively engaged in plaintiffs·side bad faith litigation,

although he does, at times, serve as "coverage counsel." Since this case has been

filed, and particularly since the prior bad faith trial, Mr. McCandless has instituted

new bad faith lawsuits on behalf of plaintiffs. He advertises his practice to include

a "special interest in representing people who are the victims of insurance bad

faith." He has testified in court as an expert on bad faith in only one other case, in

which he was engaged by Mohney's counsel in this case, Thus, Judge Ober's

finding that Mr. McCandless's testimony was less credible is both amply supported

by the record and not at issue on appeal.

Judge Ober's finding that Ms. Sciotti was qualified and credible also is amply

supported by the record. Ms. Sciotti worked directly in the insurance industry as a

claims adjuster for many years. She then began a consulting business in which she

performs reviews of claims to determine the propriety of insurer conduct. She has

maintained this business for approximately 23 years and has reviewed at least 450

cases. She maintains a consistently objective approach to her reviews, having

rejected approximately one· half of the cases presented to her, from both insureds

and insurers, because she did not believe their position had any merit. She has

been qualified as an expert in insurance practices 18 times, and her testimony has

never been excluded. She also has been invited by the Pennsylvania Bar Institute

to be a presenter and faculty member in presentations and trainings on insurance

practices. Ms. Sciotti's business overall has involved more plaintiffs'·side work

5 than defendants'

appeal, her knowledge of insurance practices, or her articulation of the standards

that apply to determining whether bad faith conduct has occurred.

With regard to compliance with industry standards, Ms. Sciotti reviewed the

applicable industry standards at length in her testimony. She explained how a

disability claim generally would be reviewed by an adjuster, including the reliance

upon a medical opinion. See T.T., at 673:25-676:22. She further testified at length

why she opined that U.S. Life did not recklessly disregard a lack of a reasonable

basis for its termination decision. See id. at 678:6-700:20. Nowhere did Ms. Sciotti

testify that, in her opinion, Mr. Carroll's reliance on Dr. Miller's most recent report

was "reasonable." She specifically declined to answer such a question when it was

posed to her by Mohney's counsel. Id. at 711:17-22. Rather, she testified that the

best information available to an adjuster is that of the insured's treating physician,

whose determination is the final and controlling factor in the adjuster's decision as

to whether the insured continues to be totally disabled. Ms. Sciotti was cross-

examined extensively on this point, including with regard to Mr. Carroll's

interpretation of Dr. Miller's opinion. See id. at 738:10-747:22. Judge Ober did not

err in relying on Ms. Sciotti's testimony that, as of the time he was adjusting

Mohney's claim, and based on the information he had available, Mr. Carroll did not

act with a knowing or reckless disregard of the fact that his basis for terminating

benefits was, as has been determined by the Superior Court, unreasonable.

6 2. Superior Court's Determination

Mohney next argues that Judge Ober "erred by relying upon Defendant's

expert" because she "rejected the Superior Court's finding" that the medical opinion

of Dr. Miller relied upon by Mr. Carroll was equivocal. As already has been

discussed, Ms. Sciotti was careful to state that she understood and acknowledged

the Superior Court's prior legal determination that Dr. Miller's opinion was

equivocal regarding whether Mohney could return to work. Id. at 701:1-702:s;

733:10-746:23. Ms. Sciotti did not conclude that the Superior Court had erred or

opine regarding the first prong of the bad faith standard. She instead limited her

testimony to opining as to whether, considering the applicable industry standards

when the benefits decision was made together with the available information about

Mohney's disability, U.S. Life, acted knowingly or recklessly. She did not conclude

that U.S. Life "could neither be reckless nor have a knowing lack of a reasonable

basis" because Dr. Miller's medical opinion was "unequivocal," as Mohney suggests

in his concise statement. Instead, she opined that she saw no evidence in the record

to suggest that U.S. Life's conduct was knowing or reckless. Judge Ober found that

opinion to be credible and relied upon it in finding that Mohney had failed to carry

his burden of proof. Judge Ober did not err in relying on this testimony.

3. Misrepresentations

Mohney next argues that the court erred in determining that U.S. Life's

conduct "complied with industry standards and therefore ... could neither be

reckless nor knowing." Judge Ober did not so conclude. He was well aware of the

7 Superior Court's determination that Mr. Carroll, in his correspondence with

Mohney, omitted certain facts or did not include full of explanations of Dr. Miller's

opinion. As Mohney has stated in his concise statement, these misrepresentations,

which could be innocent, negligent, reckless, or intentional, are evidence that the

claim investigation performed by U.S. Life was not honest or objective, especially if

they are considered alone. But they are not compelling evidence of that fact. This

Court noted this distinction in its May 4, 2018, order denying Mohney's post-trial

motions. Judge Ober appropriately considered the remainder of the testimony from

Mr. Carroll and Ms. Sciotti and determined that U.S. Life did not act knowingly or

recklessly in this regard. See especiallyT.T. at 749:17-751:10; 768:22-770:8. The

record amply supports those conclusions and Judge Ober did not err in relying on

Ms. Sciotti's testimony.

4. Mr. Carroll's Training

Mohney argues in his fourth issue that Judge Ober erred in "relying upon the

unsupported opinion of Defendant's expert" that Mr. Carroll was adequately trained

by U.S. Life because that opinion was not supported by credible facts but, rather,

was based on "speculation." Mohney argues that Mr. Carroll's testimony in this

regard was "vague and superficial." The Court disagrees.

Ms. Sciotti reviewed three separate pieces of testimony from Mr. Carroll: a

deposition prior to the first bad faith trial, his testimony at the first bad faith trial,

and his testimony at the second bad faith trial. SeeT.T., at 677:15-21. Mohney has

not identified which portions of these pieces of testimony were "vague and

8 superficial." Ms. Sciotti summarized at length the testimony she reviewed and why

she believed that Mr. Carroll had received sufficient training, both in writing and

orally, regarding how to adjust claims, how to investigate whether there is coverage,

and how to go about getting a legal opinion if necessary. See id. at 669:2-671:17.

She also testified why, in her opinion, a further legal opinion regarding coverage

was not necessary in this matter. Id. at 681:2-683:23; 706:10-709:3; 710:3-711:10;

754:9-763:16.

Mr. Carroll's testimony regarding his training was clear and direct. See T.T.,

at 382:24-397:6. That training including written memos and other correspondence,

seminars, and training on medical terminology. With regard to the availability of

legal opinions on policy language or coverage, Mr. Carroll testified that such

assistance was available in house at U.S. Life. Judge Ober did not find this

testimony to be vague and superficial and further did not find Ms. Sciotti's reliance

upon it to be erroneous. The Court discerns no error or abuse of discretion in those

findings.

5. Discovery Sanctions

Mohney next contends that Judge Ober erred in reversing the discovery

sanctions imposed in Judge Valasek's March 6, 2013, order. Judge Ober set forth

the reasons for lifting the sanctions in his order of March 1, 2017, which were

reasonable and valid. He did not err in lifting the discovery sanctions and

permitting the presentation of expert testimony by U.S. Life in the second bad faith

trial.

9 6. Evidence of Post· Denial Conduct of the Insured

In this assertion of error, Mohney contends, without citation to the record,

that the Court erred in admitting into evidence certain facts regarding his post·

denial conduct. Mohney filed a pre·trial motion in Iimine on August 31, 2017, in

which he sought to preclude this evidence from trial, relying on the Superior Court's

prior determination that such evidence was not relevant to the bad faith question

and should not be admitted. Judge Ober ruled on this motion prior to Mohney's

testimony, denying it as presented but reserving the right to rule upon objections to

as the testimony progressed. T.T., at 508:4·10. To the extent that Mohney's appeal

refers to this ruling, it clearly was not an abuse of discretion. A blanket ruling at

that point, with no context as to the manner in which the evidence was actually

presented, was not an abuse of discretion.

To the extent Mohney challenges specific rulings by Judge Ober, Mohney's

post-denial conduct was referenced only in passing at certain points of his

testimony. Previously, Mr. Carroll had testified as to the purpose of his denial

letter, the six·week window he left open to receive more information, if any, and his

intentions had he received information contradicting Dr. Miller's opinion. T.T., at

479:1·23. Not only was this testimony of Mr. Carroll relevant to Judge Ober's

understanding of reckless or intentional behavior, but it was not objected to by

Mohney's counsel. In fact, counsel followed up with additional questions on the

matter. Id. at 479:25-480:21. Thus, the Court discerns no error in this portion of

the testimony.

10 During Mohney's testimony, he was questioned as to what he remembered

regarding the letter sent by Mr. Carroll on February 7, 1995. Id. at 582:6-588:16.

U.S. Life's counsel then asked whether Mohney had submitted any further

information to Mr. Carroll, to which he responded, "no." Id. at 588:17-23. After

that, counsel asked Mohney why he did not send any further information, to which

question Mohney's counsel objected. Id. at 588:24-591:4. Judge Ober overruled the

objection and Mohney responded, "I don't know." U.S. Life's counsel continued for a

period to question Mohney about his contact with his counsel after the benefits had

been terminated, to which questioning Mohney's counsel again objected. Id. at

591:7-594:21. Judge Ober did not sustain the objection and permitted the question.

To the extent that Mohney's issue on appeal refers to these rulings by Judge

Ober, the rulings were not an abuse of discretion and, even if they were, resulted in

no prejudice to Plaintiff. Judge Ober heard extensive testimony regarding the

circumstances surrounding Mr. Carroll's communication to Mohney that his credit

disability benefits would be terminated after a grace period of six weeks, within

which Mohney could submit further information in support of his claim. Judge

Ober did not focus on and did not consider Mohney's conduct at all, other than to

determine what information U.S. Life had available to it prior to the final payment.

There are no indications that Judge Ober placed any burden on Mohney or

considered his conduct in determining whether U.S. Life acted in knowing or

reckless disregard of a lack of a reasonable basis. Thus, the Court concludes that

these rulings were not erroneous and, to the extent they were, were harmless.

11 7. Discovery

Mohney finally asserts that the Judge Ober erred when he "refused to compel

Defendant to respond" to certain document requests that Mohney propounded

regarding U.S. Life's conduct before, during, and after the litigation of the breach of

contract claim. Mohney cites to no particular sets of discovery requests, subpoenas,

or orders of Judge Ober that are challenged in this assertion of error. Thus, the

Court again is left to peruse the record and reconstruct the issues that Mohney will

present on appeal.

To understand Judge Ober's discovery rulings between the date of remand

back to this Court (December 8, 2015), and the second bad faith trial (commencing

September 5, 2017), the Court first must review some relevant procedural history.

Mohney filed his operative, Second Amended Complaint on October 28, 1998. After

extensive litigation of the claims asserted in that complaint over the next

approximately eight years, including two appeals to the Superior Court, only the

bad faith claim (Count VI) remained. Judgment was entered Mohney's favor on the

breach of contract claim (Count III) and the remaining claims were dismissed.

After remand to this Court after the second appeal, Mohney's counsel filed, on

February 19, 2009, a "Motion for Leave to Conduct Discovery in Support of the Bad

Faith Claim," which had been reinstated by the Superior Court.2 Judge Valasek

granted Mohney 120 days' leave to conduct discovery on the bad faith claim by order

entered September 4, 2009. Mohney then served written discovery requests, in the

2Judge Valasek previously had granted U.S. Life summary judgment on this claim on March 28, 2002. 12 form of interrogatories and requests for production of documents, on U.S. Life on

September 14, 2009. After an extended period during which Mohney did not receive

responses to the discovery requests, he filed a series of motions to compel on

November 6, 2009, November 20, 2009, and March 24, 2010, the first two of which

Judge Valasek granted. After argument on the third, Judge Valasek entered an

order on May 28, 2010, in which he determined that a decision on the motion could

not be made until Mr. Carroll's deposition was taken. No further record activity

occurred in the case for more than two years thereafter, until Mohney praeciped the

case to the pre·trial list on July 31, 2012. Nothing further was presented to the

Court regarding written discovery on the bad faith claim.

On April 9, 2013, U.S. Life filed a "Motion in Limine to Preclude or Limit the

Testimony of John A. McCandless, or in the Alternative for Leave for Defendant to

Submit Rebuttal Expert Testimony," in which it sought in part to exclude testimony

from Mr. McCandless on litigation-related bad faith that allegedly occurred years

prior. Judge Valasek granted the motion for several reasons, including the fact that

litigation·related bad faith had never been pled. See Order, 4/10/2013. Mohney

then presented, the day before testimony was to begin in the first bad faith trial, a

motion to amend his Second Amended Complaint to add allegations of litigation·

related bad faith. See Proposed Third Amended Complaint, ,i 95, attached to

Motion presented April 12, 2013, and filed April 22, 2013. Judge Valasek denied

the motion on April 12, 2013, concluding that the last·minute amendments would

add new theories of liability to the case, prejudice U.S. Life, and otherwise be futile.

13 That determination subsequently was not reversed by the Superior Court, and

Mohney did not again seek to amend his complaint to add any allegations of

litigation ·related bad faith.

After remand from the Superior Court, which vacated Judge Nickleach's

adjudication on the bad faith claim, Judge Ober set a discovery schedule. Mohney

then issued a subpoena to produce documents or things on U.S. Life's former

counsel, Stanley A. Winikoff, Esq., in which he sought production of Mr. Winiko:ffs

entire file, including all attorney-client communications, attorney work product, and

communications among several involved law firms. U.S. Life filed objections to the

subpoena on several grounds, which objections Judge Ober overruled due to U.S.

Life's lack of standing. Mr. Winikoff later filed a "certificate of compliance" on

March 16, 2017, in which he indicated that his entire file had been turned over to

U.S. Life's current counsel and that he objected to the subpoena on the grounds

previously asserted by U.S. Life.

In the interim, Mohney also served on U.S. Life a second set of document

requests, seeking documents related to U.S. Life's handling of Plaintiffs claim

before, during and after litigation of the breach of contract action. U.S. Life

produced certain documents in response, lodged objections, and moved for a

protective order. Mohney filed a motion to compel on March 20, 2017. Mr.

Wini.ko:ffs former firm, Dell, Moser, Lane & Loughney, LLC, also filed a motion for

protective order. On April 3, 2013, the Court entered three orders that 1) granted

U.S. Life's motion for protective order, 2) precluded enforcement of the subpoena

14 issued to Mr. Winikoff and Dell, Moser, Lane & Loughney, LLC, 3) denied Mohney's

motion to compel, and 4) dismissed the remaining motion for protective order as

moot. See Orders, 4/3/2017.3

Judge Ober set forth his reasons for denying Mohney's Motion to Compel

responses to the second set of document requests in his order entered April 3, 2017.

On appeal, Mohney argues that Judge Ober erred when he did not compel U.S. Life

to produce additional documents regarding "what investigation [it] conducted on the

disability claim based upon information the insurer received after the breach of

contract claim was filed, litigated, and appealed." First, as has been set forth above,

Mohney had ample opportunity to take discovery on this issue after remand from

the Superior Court in 2009. Judge Valasek granted two of Mohney's motions to

compel discovery and stayed resolution of the third motion pending Mr. Carroll's

deposition. Two years of inactivity then followed, after which Mohney placed the

case at issue. He could have sought this exact discovery before the first bad faith

trial, and he did not.

Further, to the extent that Mohney argues on appeal that Judge Ober erred

in permitting discovery on the issue of litigation bad faith, Mohney has never pled

any facts asserting such conduct, except for in the motion to amend that was filed

the day before the first bad faith trial. Judge Valasek denied that request and the

3 The Court assumes that Mohney's issue no. 7 does not refer to Judge Ober's ruling on his Motion to Compel Responses to Plaintiffs May 1, 2017, and May 2, 2017, interrogatories. In those interrogatories, Mohney sought discovery of :financial information from U.S. Life, including its net worth and the amount of attorneys' fees it had paid to date. See Motion to Compel and Order, June 15, 2017.

15 Superior Court did not reverse that ruling. Thus, as of 2017, any additional

discovery regarding bad faith conduct during litigation was beyond the scope of the

issues raised by Mohney, and Judge Ober appropriately denied the motion to

compel. Although Mohney does not indicate the particular document requests to

which this issue relates, several of the thirty document requests served on U.S. Life

on October 21, 2016, contain duplicative requests for documents already produced

years earlier as well requests for the entirety or large portions of defense counsel

files. See Motion to Compel, 3/20/2017. Given that the issue had not been raised,

the overly-broad and generalized document requests, and the fact that Mohney had

ample opportunity to seek such discovery many years ago, Judge Ober

appropriately denied the motion to compel and precluded the enforcement of the

subpoena.

For all of these reasons, I recommend a:ffirmance of the judgment entered

May 14, 2018, in all respects.

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·

Chase G. McClister

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