Epstein v. State Farm Mutual Insurance
Epstein v. State Farm Mutual Insurance
Opinion of the Court
This is an appeal from an order dismissing appellant’s complaint with prejudice on the ground that the claim raised is the same as the one that has already been asserted in a prior action. Appellant argues that we should reverse the order because dismissal was not justified under the doctrines of res judicata or lis pendens. We affirm.
In July 1978, Michael Epstein, appellant, was injured in a motor vehicle accident. Appellant was insured by State Farm Mutual Insurance Company, appellee, under a policy that included uninsured motorist benefits. The driver, Terrell Moore, was insured by Concord Mutual Insurance Company.
In February 1980, appellant sought to obtain uninsured motorist benefits from appellee. The claim was arbitrated and coverage was denied. Exceptions were denied on the grounds that appellant had not established his entitlement to uninsured motorist’s benefits, and that in any event, his exceptions had not been timely filed. The order denying appellant’s exceptions was appealed to this court on January 8, 1981. That appeal has not yet been decided.
On March 2, 1981, appellant filed a complaint against appellee seeking general and punitive damages for appellee’s refusal to provide appellant with uninsured motorist coverage for the July 1978 accident. The complaint was dismissed on the ground that it raised the same claim as had already been asserted in the prior action. This appeal is from that dismissal.
Appellant’s argument that this action—the second action—should not have been dismissed lacks merit. Both the
. The dissent argues that Pa.R.Civ.P. 1020(d)(1) does not apply because appellee, rather than appellant, petitioned for the appointment of an arbitrator in the first action. Dissenting op. at 356. But the fact that appellee petitioned for the appointment of an arbitrator does not undermine the fact that it was appellant’s claim for insurance proceeds that was the subject of the arbitration. Appellee had no reason to petition the court for the appointment of an arbitrator except to facilitate the resolution of appellant’s claim. Thus the lower court found that “[t]his case was the second claim filed by plaintiff. The first claim was heard by an arbitrator appointed by the Court under the Pennsylvania Arbitration Act of 1927.” Slip op. at 1. The lower court’s denial of appellant’s exceptions to the arbitrator’s award in the first action was based on the fact that appellant "utterly failed to carry his burden of proof." Slip op. at 3. The lower court was thus entirely correct in concluding that the first claim, as well as the second, was brought by appellant.
The dissent also argues that we should not dispose of this appeal on the basis of Rule 1020 because the parties have not argued the rule. Dissenting op. at 356. Although neither the parties nor the lower court referred specifically to Rule 1020, the policy that the rule promotes—that appellant should not be permitted to waste judicial resources by presenting a dispute involving one transaction in two separate actions—was the basis of appellee’s objection to the second action both in the lower court and on appeal: "This lawsuit arises out
. See note 2 on page 545.
2. Even if the dissent were correct that the cause of action now asserted before us is distinct from that asserted by appellant in his first action, we should disagree with its suggested disposition of the case. The underlying issue in the first action is whether appellant is entitled to receive uninsured motorist benefits from appellee. The first action is now on appeal to this court. If on that appeal we uphold the lower court, either on the ground that appellant did not timely file exceptions or on the merits, the conclusion will follow that appellant is not entitled to uninsured motorist benefits. That conclusion will be binding on appellant in his second action—the action before us in this case. This will be true by virtue of the doctrine of .collateral estoppel. See generally Lebeau v. Lebeau, 258 Pa.Super. 519, 393 A.2d 480 (1978). Consequently, the action before us would then have to be dismissed. If, on the other hand, the lower court’s decision in the first action is reversed on appeal, the conclusion will follow that appellant is entitled to uninsured motorist benefits. That conclusion will be binding on appellee. Therefore, if the dissent were correct that appellant has not waived but may maintain his second action, the only issue that the lower court would need to decide in that action would be whether appellant was entitled to punitive damages. See generally, Lebeau v. Lebeau, supra. It follows that, on its view of the case, the dissent should not argue for reversal of the lower court’s order but for a stay, pending disposition of the appeal in the first action. Instead, the dissent recommends that not this action but the first action be stayed. Wc think, however, that “the interest of justice and judicial economy,” dissenting op. at 357, will be better served if we dispose of this action now.
Dissenting Opinion
dissenting:
I respectfully dissent. The majority decides this case on the basis of an issue not presented by the parties. Conclud
Had the issue of mandatory joinder of causes of action been raised by the parties, I would not find it dispositive under the circumstances of this case. Preliminarily, I disagree with the majority’s conclusion that the causes of action in the instant case and the cause of action in the first case arise out of the same occurrence: State Farm’s refusal to provide uninsured motorist benefits to compensate appellant for injuries suffered in the July accident. Only the instant action arises out of State Farm’s refusal to provide uninsured motorist benefits. The first action arises not out of State Fárm’s refusal to pay benefits, but out of the July accident itself. The first action involves appellant’s claim under the uninsured motorist provisions of the insurance policy for injuries suffered in the July accident. The causes of action involved in the instant case arise not from the July accident but from State Farm’s alleged wrongful conduct occurring after the accident and in the course of processing and litigating the uninsured motorist claim.
Nor is dismissal justified on the grounds of res judicata or lis pendens. Res judicata is an affirmative defense which, under Pa.R.C.P. 1030, must be raised in a responsive pleading as new matter and which, if not pled, is waived pursuant to Pa.R.C.P. 1032. State Farm did not plead the defense of res judicata in the trial court and thus it has been waived. Callery v. Municipal Authority of Blythe Township, 432 Pa. 307, 243 A.2d 385 (1968); Lang v. Recht, 171 Pa.Super. 605, 91 A.2d 313 (1952); Margolis v. Miller, 170 Pa.Super. 148, 84 A.2d 213 (1951). State Farm raised res judicata for the first time on appeal. However, issues not raised in the lower court are waived and cannot be raised for the first time on appeal. Pa.R.A.P. 302(a). Thus, dismissal cannot be based on res judicata.
In the first action appellant seeks recovery and asserts rights under the uninsured motorists provision of the State Farm insurance policy for injuries sustained in the July accident. In the instant action, appellant asserts in assumpsit that appellee has breached its contract and seeks damages for the breach. In trespass appellant seeks punitive damages, alleging appellee acted with malice for the purposes of harassing and frustrating appellant and with the intent of inflicting emotional distress upon him. The cause of action in the instant case arises not from the July accident but from State Farm’s alleged wrongful conduct occurring after the accident. Appellant contends that this conduct constitutes a breach of contract and a tort. Since the cause of action, rights asserted and relief requested in the two actions are not the same, the doctrine of lis pendens is inapplicable.
However, in D Ambrosio v. Pennsylvania National Mutual Insurance Co., 494 Pa. 501, 431 A.2d 966 (1981), our Supreme Court held that under Pennsylvania law there is no cause of action for punitive damages or damages for emotional distress because of an insurer’s alleged bad faith in denying a claim. In refusing to create such a cause of action in trespass, the Supreme Court recognized that an adequate remedy existed in assumpsit. Thus, in the instant
Finally, in the interest of justice and judicial economy, I would stay the appeal in the first action, which is presently pending in our Court at No. 102 Philadelphia 1981, and since both that action and the instant action involve the common underlying question of Concord Mutual’s solvency pursuant to Pa.R.A.P. 513,1 would direct that the Order issued in the instant case on remand be consolidated with the pending appeal in the first case.
Reference
- Full Case Name
- Michael EPSTEIN, Appellant, v. STATE FARM MUTUAL INSURANCE COMPANY
- Cited By
- 8 cases
- Status
- Published