eNotes: Liability – March 2022 – Federal

FEDERAL CASE SUMMARIES

Mears v. Connolly
United States Third Circuit Court of Appeals
No. 21-1148, ___ F.4th ____

Decided: February 3, 2022

Nurse assigned to supervise visit at state psychiatric hospital who failed to protect visitor from violent actions of psychiatric patient is not immune from suit under the New Jersey’s Tort Claims Act

Background

The son of Plaintiff June-Lori Mears was involuntarily committed to a state psychiatric hospital due to a bipolar disorder that made him prone to violent outbursts and other anti-social behavior. While admitted, Plaintiff’s son’s mental condition worsened, leading to an incident in which he attacked and injured a fellow patient, who required intensive care. Plaintiff continued to visit her son, which was encouraged by hospital staff, as part of the treatment. After her son’s attack on the other patient, Plaintiff inquired whether it was safe for her to visit, and she was assured by the treating psychiatrist that it was safe. However, no one was assigned to monitor Plaintiff’s visit, despite hospital policy requiring supervision of all patient meetings.

When Plaintiff was left alone with her son, he attacked her, inflicting brain injuries and broken ribs and leaving Plaintiff with PTSD. Plaintiff filed suit against hospital staff and state officials. The U. S. District Court for the District of New Jersey dismissed the complaint, ruling that sovereign immunity barred Plaintiff’s claims and further holding that state officials did not have a duty to protect others from private violence, where the facts did not support finding a state-created danger.

Holding

On appeal, the U.S. Third Circuit Court of Appeals reversed in part. The Circuit Court held that Plaintiff’s claims against the treating psychologist failed because he merely encouraged Plaintiff to visit with her son. On the other hand, Plaintiff could pursue her claims against the nurse who was assigned to supervise Plaintiff’s visit. The Circuit Court ruled that by leaving Plaintiff alone with her son who had a history of violence, the nurse may have facilitated the assault. The Court found that it was foreseeable that leaving Plaintiff alone with her son might result in injury to the Plaintiff.

Questions about this case can be directed to Mark Sander at (856) 334-0415 ext. 8915 or msander@tthlaw.com.

Devine v. GEICO Gen. Ins. Co.
United States District Court for the Eastern District of Pennsylvania
No. 5:21-cv-02679-JMG, 2022 U.S. Dist. LEXIS 3304

Decided: January 6, 2022

UIM carrier not under duty to advise Plaintiff of change in the law regarding household exclusion.

Background

Plaintiff was involved in a motorcycle accident on September 5, 2015. Plaintiff advised their insurance company, GEICO, to open an underinsured claim (“UIM”) on September 29, 2015. GEICO denied the UIM claim. Plaintiff did not file suit or take any other action on the UIM denial until November 4, 2019 when his attorney contacted GEICO demanding UIM benefits in light of the Gallagher decision. GEICO denied the claim as time barred. The insured filed suit arguing breach of contract and bad faith. GEICO filed a Motion to dismiss.

The Court found that the Complaint was barred by the statute of limitations – the Complaint was not filed until May of 2021. Plaintiff argued that the statute started to run when he ultimately demanded payment in 2019. Plaintiff also argued that GEICO did not have a reasonable basis to deny coverage without citing to specific facts in support thereof.

Holding

Plaintiff’s breach of contract and bad faith claims were barred by the statute of limitations and his claim for violation of the UTPCPL failed because GEICO had no affirmative duty to notify the insured of the change in law.

Questions about this case can be directed to Hannah Molitoris at (267) 861-7589 or hmolitoris@tthlaw.com.

Moses Taylor Found. v. Converys & Proselect Ins. Co.
United States District Court for the Middle District of Pennsylvania
No. 3:20-CV-00990, 2021 U.S. Dist. LEXIS 225185

Decided: November 22, 2021

A viable bad faith claim under Section 8371 does not exist in the absence of a valid, predicate, contract claim.

Background

This breach of contract action arose from 2019 settlement proceedings in a prior professional negligence lawsuit. Defendant was Plaintiff’s medical professional liability insurer during times material to this prior settlement. Plaintiff claimed they informed Defendant of the need to settle their case with the injured minor in February of 2019. Plaintiff allegedly made several attempts to direct Defendant to settle the matter, but Defendant entered a “high-low” arbitration with limits of $2,500,000 and $7,750,000. The injured minor made a final demand pre-arbitration of $6,000,000 which Plaintiff directed Defendant to settle. Defendant did not settle. The arbitrator ultimately awarded the injured minor the $7,750,000 limit. Plaintiff filed the instant suit alleging claims for breach of contract, bad faith and vicarious liability seeking the $1,750,000 difference as damages.

Defendant filed a Motion to dismiss for lack of non-speculative damage. It was further argued that because Plaintiff did not allege any non-speculative damages, their breach of contract, bad faith and vicarious liability claims must fail. Further, Defendant argued that bad faith under 42 Pa.C.S. § 8371 may not be brought as an independent action. The Court agreed with Defendant and dismissed without prejudice to amend their pleadings. Plaintiff in response filed a near identical Amended Complaint. Defendant then filed a second Motion to dismiss on identical grounds to the first.

Holding

The Court again held that Plaintiff failed to properly plead a breach of contract claim and dismissed the claims with prejudice. Plaintiff did not identify any non-speculative damages, and the Court held that without damages this was not a proper pleading. The Court further held that bad faith under Section 8371 was not a separate cause of action, and there must be a predicate contract claim for the bad faith claim to proceed. The bad faith does not need to be tied together with the predicate claim, but the predicate cause of action “must be ripe for a § 8371 claim to be recognized.” The vicarious liability claim was similarly dismissed in the absence of valid breach of contract and bad faith claims.

Questions about this case can be directed to Logan Nagle at (717) 255-7234 or lnagle@tthlaw.com.