Rosen v. Rucker

905 F.2d 702, 17 Fed. R. Serv. 3d 115, 1990 U.S. App. LEXIS 9666
CourtCourt of Appeals for the Third Circuit
DecidedJune 18, 1990
DocketNos. 89-1583, 89-1798, 89-1765 and 89-1818
StatusPublished
Cited by16 cases

This text of 905 F.2d 702 (Rosen v. Rucker) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rosen v. Rucker, 905 F.2d 702, 17 Fed. R. Serv. 3d 115, 1990 U.S. App. LEXIS 9666 (3d Cir. 1990).

Opinion

OPINION OF THE COURT

SLOVITER, Circuit Judge.

I.

Introduction

On this appeal, the defendants challenge the district court’s award to the successful plaintiff of delay damages pursuant to Pennsylvania Rule of Civil Procedure 238. Defendants claim the award was improper because they made an oral settlement offer, the plaintiffs’ settlement demand was unreasonably high, the plaintiffs did not disclose the full extent of their claims before trial, and the plaintiffs allegedly delayed the trial. The issues presented require us to delve into the effect of the revisions to Rule 238.

II.

Facts and Procedural History

On June 19, 1986, a truck owned by defendant Huss, Inc. and operated by defendant Jesse Rucker hit plaintiffs’ automobile, injuring Eleanor and Michelle Ro-sen. Plaintiffs brought this diversity action on April 29, 1988, alleging negligence and numerous violations of city and state law. Eleanor and Michelle Rosen demanded damages for bodily injuries, disfigurement, mental anguish, medical expenses, lost earnings and lost earning capacity while Henry Rosen demanded damages for medical expenses and loss of consortium. Service on defendants was made approximately one month later.

Throughout the pretrial phases plaintiffs demanded a settlement of $1,200,000, which the district court characterized as “unreasonably excessive.” Supp.App. at 8. At trial, plaintiffs lowered their demand to $750,000. Defendants orally proffered $300,000 but made no written settlement offer. On May 16, 1989, following a jury trial, a judgment of $151,000 was entered in favor of Eleanor Rosen, of $189,000 in favor of Michelle Rosen, and of $25,000 in favor of Henry Rosen, for a total judgment for plaintiffs of $365,000. Two days later, plaintiffs moved to amend the judgment to allow for an award of delay damages under Pennsylvania’s Rule 238. The district court denied the motion on June 15, 1989 and five days later, on June 20, 1989, plaintiffs filed a motion for reconsideration of the denial of delay damages.

[704]*704On July 12, 1989, while their motion for reconsideration was pending, plaintiffs filed a notice of appeal of the June 15, 1989 order denying their motion for delay damages. The appeal was docketed in this court at No. 89-1583.

The district court then granted the motion for reconsideration on August 24, 1989, and awarded delay damages of $27,-713. It explained that while the earlier denial had been based on the fact that the verdict had been within 125% of defendants’ oral settlement offer, reexamination of Pennsylvania law disclosed that Rule 238 required a written settlement offer. On September 1, 1989, the court increased the award to $39,622 to correct for a computational error.

On September 8, 1989, defendants filed a notice of appeal of the August 24, 1989 order granting delay damages, which was docketed in this court at No. 89-1765. Thereafter, on September 20, 1989, plaintiffs filed their second notice of appeal from the court's June 15 order, even though the court had thereafter awarded them delay damages. That appeal was docketed at No. 89-1798. Finally, on September 22, 1989, defendants appealed from the district court’s September 1, 1989 order increasing the award, which was docketed at No. 89-1818.

III.

Statutory Background

Pennsylvania Rule of Civil Procedure 238 provides for delay damages in actions for bodily injury, death, or property damages. Delay damages are, in essence, prejudgment interest awarded to a successful plaintiff. The Rule has a checkered history. The original version, adopted in 1978, required the award of delay damages for the entire period between the filing of an action and the eventual judgment whenever the defendant failed to make a written settlement offer or plaintiff recovered more than 125% of any such offer. The Rule was promulgated by the Pennsylvania Supreme Court as an “experiment” with several aims: compensating plaintiffs for the inability to use funds rightfully due them; alleviating congested court dockets; and encouraging settlement of meritorious claims. See Craig v. Magee Memorial Rehabilitation Center, 512 Pa. 60, 64, 515 A.2d 1350, 1352 (Pa.1986); see also Laudenberger v. Port Auth. of Allegheny County, 496 Pa. 52, 59-60, 436 A.2d 147, 150-51 (Pa.1981).

The Pennsylvania Supreme Court rejected a constitutional challenge to the rule in Laudenberger, but then in Craig, when faced with a defendant’s claim that the delay was not due to it but to plaintiff, it held that Rule 238 violated defendant’s due process rights because it “has become an uncontestable presumption that all fault lies with a defendant.” Craig, 512 Pa. at 65, 515 A.2d at 1353. Accordingly, the Court suspended the rule and established guidelines for courts to follow until a constitutional version of the rule could be promulgated. 512 Pa. at 66, 515 A.2d at 1353. It informed trial courts that in awarding delay damages they should consider not merely the time elapsed but also “the parties’ respective responsibilities in requesting continuances, the parties’ compliance with rules of discovery; the respective responsibilities for delay necessitated by the joinder of additional parties; and other pertinent factors.” Id.

The current version of Rule 238, promulgated by the Pennsylvania Supreme Court on November 7, 1988, revised the rule “in light of the Craig decision.” Pa.R.Civ.P. 238 (Explanatory Comment).1 As in the prior version of the rule, the period of time for which delay is calculated excludes the period of time after which the defendant made a written settlement offer if the plaintiff was not awarded more than 125% [705]*705of the offered amount. Pa.R.Civ.P. 238(b)(1). The principal post-Craig change is the exclusion of the period of time during which plaintiff caused delay of the trial. Pa.R.Civ.P. 238(b)(2). Although there has been much debate in the Pennsylvania courts over the constitutionality of the new rule, see, e.g., Dietrich v. J.I. Case Co., 390 Pa.Super. 475, 568 A.2d 1272, 1280 (Pa.Super.1990) (Cirillo, P.J., concurring and dissenting) (rule exceeds rulemaking authority of state supreme court because it “does not consider the fault of both the defendant and the plaintiff”); Schrock v. Albert Einstein Medical Center, 386 Pa.Super. 215, 235-36, 562 A.2d 875, 885 (1989) (Cirillo, P.J., dissenting) (rule unconstitutionally punishes defendant in the absence of fault); Craig, 512 Pa. at 66-67, 515 A.2d at 1354 (Hutchinson, J., concurring) (rule addresses substantive issues outside court’s rule-making power), the Pennsylvania courts have thus far rejected constitutional attacks. See, e.g., Shellhamer v. Grey, 390 Pa.Super. 122, 568 A.2d 224, 228 (1989); Dietrich, 568 A.2d at 1279. The constitutionality of the rule is not at issue in this appeal.

This court has determined that for purposes of the Erie doctrine the rule is substantive and thus applies in federal courts sitting in diversity.

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United States Court of Appeals, Third Circuit
905 F.2d 702 (Third Circuit, 1990)

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Bluebook (online)
905 F.2d 702, 17 Fed. R. Serv. 3d 115, 1990 U.S. App. LEXIS 9666, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rosen-v-rucker-ca3-1990.