J-A11021-19
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
KERRY ODGERS : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellant :
:
:
v. :
:
:
RODRIGO SOLERA AND : No. 1687 MDA 2018
PROGRESSIVE NORTHERN :
INSURANCE COMPANY :
Appeal from the Order Entered September 24, 2018
In the Court of Common Pleas of Lancaster County Civil Division at
No(s): CI-14-01086
BEFORE: BOWES, J., OLSON, J., and STABILE, J.
MEMORANDUM BY OLSON, J.: FILED SEPTEMBER 06, 2019
Appellant, Kerry Odgers, appeals from the order entered on September
24, 2018, granting the motion for declaratory judgment made by Appellee,
Progressive Northern Insurance Company (“Progressive”). We affirm.
On January 18, 2013, Appellant sustained severe injuries when she was
struck by a vehicle operated by Rodrigo Solera and insured by Progressive.
At the time, Appellant did not own a motor vehicle, was not a named insured
on any motor vehicle policy, and did not qualify as an insured under a motor
vehicle policy held by anyone with whom she resided. As such, Appellant
looked to Solera’s Progressive automobile insurance policy for first-party
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benefits. It would be an understatement to say that Appellant’s efforts have
resulted in a lengthy and tortured process.1
To recover for her injuries and losses, Appellant filed a complaint against
Solera2 and Progressive. Appellant’s complaint made a claim for first-party
benefits from Progressive pursuant to 75 Pa.C.S.A. § 1713(a)(4).3 Appellant
also alleged that Progressive unreasonably refused her claim for first-party
benefits and, therefore, she demanded attorney’s fees and interest pursuant
to 75 Pa.C.S.A § 1716.4
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1 As the trial court noted, “[t]his case began with a motor vehicle and
pedestrian accident on January 18, 2013, and has developed over time into a
seemingly interminable dispute over the payment of interest and attorneys’
fees pursuant to 75 Pa.C.S. § 1716.” Trial Court Opinion, 9/24/2018, at 1.
2 Solera is no longer involved in this case, as he has since passed away and
there has been no substitution of a personal representative as a defendant.
3 The statute provides, in relevant part, the following:
(a) General rule.--Except as provided in section 1714 (relating to
ineligible claimants), a person who suffers injury arising out of the
maintenance or use of a motor vehicle shall recover first party
benefits against applicable insurance coverage in the following
order of priority:
...
(4) For a person who is not the occupant of a motor vehicle, the
policy on any motor vehicle involved in the accident.
75 Pa.C.S.A. § 1713(a)(4).
4 The statute provides, in relevant part, the following:
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Discovery ensued and, eventually, the trial court ordered Progressive to
produce its claim investigation notes, together with its claim-handling and
processing manuals. Rather than produce these materials, Progressive agreed
to pay first-party benefits to Appellant in addition to interest and reasonable
attorney’s fees.5 The trial court then vacated its order compelling discovery.
In resolving Appellant’s request for attorney’s fees, the trial court determined
that Progressive owed reasonable attorney’s fees for the period extending
from March 11, 2013, when Progressive received notice of Appellant’s claim
for first-party benefits, until April 22, 2014, when Progressive provided
coverage. The trial court also concluded that Appellant’s entitlement to
attorney’s fees after April 22, 2014 could not be determined from the record.
The trial court summarized the succeeding procedural developments as
follows.
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Overdue benefits shall bear interest at the rate of 12% per annum
from the date the benefits become due. In the event the insurer
is found to have acted in an unreasonable manner in refusing to
pay the benefits when due, the insurer shall pay, in addition to
the benefits owed and the interest thereon, a reasonable attorney
fee based upon actual time expended.
75 Pa.C.S.A. § 1716.
5 After Progressive agreed to pay first-party benefits, as well as reasonable
attorney’s fees, Appellant filed a complaint against Progressive alleging breach
of contract, bad faith, breach of fiduciary duty, negligence, and negligence per
se. Progressive removed the case to federal court, where it was stayed
pending resolution of the instant matter.
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The history of this dispute is laid out in the Court’s order of June
16, 2016, and its opinion and order of November 30, 2017.
In the former, the [trial c]ourt determined that [Appellant] was
entitled to payment of attorneys’ fees incurred between March 11,
2013, and April 22, 2014, but that, on the state of the record, it
could not be determined whether [Appellant] was entitled to any
attorneys’ fees incurred after April 22, 2014. In the latter, after
Progressive had agreed to pay an additional $1,435.00 for 4.1
hours of legal work after April 22, 2014, relating to interest on a
wage loss check, reimbursement and interest to [the Department
of Public Welfare] and interest on Family Medical Leave Act
(FMLA)1 paperwork, the dispute focused on attorneys’ fees
associated with a letter on November 3, 2015, by which
[Appellant]’s counsel sought to confirm insurance coverage for an
additional surgery on [Appellant]’s foot, without which [Appellant]
was unable to even schedule a medical appointment at the
Rothman Institute. The Court’s order provided
3. Upon proof that confirmation of insurance coverage was
a prerequisite for scheduling an appointment for medical
treatment, [Progressive] is to pay reasonable attorneys’
fees for the November 3, 2015, confirmation of medical
coverage with the amount to be determined based on
[Appellant]’s itemized bills already in [Progressive’s]
possession.
[Appellant] is granted 20 days from the entry of this order
on the docket to determine whether there are any other
medical benefits outstanding for more than 30 days for
which interest and attorneys’ fees would be payable and to
file such information with the court with a copy to
[Progressive]. [Appellant] will also file with the [c]ourt a
copy of [Appellant]’s counsel’s itemized billing statements
setting forth the dates on which work was performed, a
description of the work performed, the amount of time
expended for the work and the hourly rate for the work
performed for each billable event. [Progressive] will have
15 days from the filing of [Appellant]’s statement to notify
the [c]ourt whether it intends to pay all, part or none of the
amounts claimed as due.
In the event of any dispute, a hearing will be scheduled
limited solely to the amount of disputed attorneys’ fees.
Trial Court Order, 11/30/17, at para. 3.2
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_____________________________
1
29 U.S.C. §§ 2601, 2611-19.
2
Item 1 of the order denied Progressive’s motion for summary
judgment. Item 2 granted Progressive’s motion for declaratory
judgment “with respect to the amounts [Progressive] has agreed to
pay.”
On December 26, 2017, [Appellant] filed a motion for
reconsideration and/or clarification of the November 30, 2017
order. The [c]ourt denied this motion by an order dated March
19, 2018, and granted [Appellant] 15 days from the entry of the
order on the docket to comply with the order of November 30,
2017. Progressive filed the current motion [for sanctions and
motion for summary judgment/declaratory judgment] on May 29,
2018. [Appellant] alleged that, in response to the [c]ourt’s March
19, 2018 order, by correspondence dated April 3, 2018,
[Appellant] provided [a] notarized affidavit which related to the
November 3, 2015, confirmation of coverage and which identified
five dates on which attorney work was done on this issue:
November 3 and 19, December 3, 11 and 21, 2015. Based on this
affidavit and [Appellant]’s itemized billing statements, Progressive
identified five items of legal work, totaling one hour of time, and
agreed to pay for two: the November 3, 2015, letter requesting
confirmation of coverage and a November 19, 2015, letter which,
among other things reiterated that Progressive had yet to confirm
coverage, totaling 0.4 hours. Progressive indicated that it
confirmed coverage by a letter dated November 27, 2015[;
therefore, it declined to pay for billing entries made on December
3, 11, and 21, 2015]. [Appellant contends that the entries
Progressive refused to cover were related to confirmation of the
amount of coverage and should have been included in the
calculation of fees.]
Trial Court Opinion, 9/24/18, at 1-3 (footnotes in original).
By order entered on September 24, 2018, the trial court denied
Progressive’s motion for sanctions but granted its motion for declaratory
judgment/summary judgment, “subject to [Appellant’s] right to institute
appropriate litigation in the event that [Appellant] can demonstrate the
existence of any medical benefits, outstanding more than thirty days, for
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which attorney’s fees and interest could be collected.” Trial Court Order,
9/24/18, at para. 2. Specifically, the trial court determined that Progressive
was obligated to pay the additional attorney’s fees detailed in billing
statements entered on December 3, 11, and 21 2015. The court also held
that Appellant was barred from asserting her entitlement to additional
attorney’s fees since she did not submit proof of further fees due and owing
pursuant to the November 30, 2017 order. Accordingly, the court granted
Progressive’s motion for declaratory judgment and/or summary judgment and
ordered it to pay Appellant $21,320.00 within 20 days. On October 10, 2018,
Progressive tendered full payment to Appellant. This appeal followed.
Appellant presents the following issues on appeal:
1. Did the trial court commit an error of law when it interpreted 75
Pa.C.S. § 1716 by disregarding explicit language in the statute
which requires a finding of “unreasonable” conduct on the part of
the insurer as a pre-requisite to an award of attorney’s fees?
2. Should a defendant be allowed to moot a live controversy under
75 Pa.C.S. § 1716 with an unaccepted offer of settlement?
3. Did the trial court commit an error of law in precluding Appellant
from obtaining discovery relevant and necessary to sustain her
burden of proving a required element of her cause of action,
specifically the reasonableness of the defendant insurer’s conduct
under 75 Pa.C.S. § 1716?
4. Did the trial court commit an error of law when it limited
Appellant’s attorney’s fees under 75 Pa.C.S. § 1716 to the time
spent recovering only the interest on overdue benefits instead of
the actual time expended in proving the defendant insurer acted
in an unreasonable manner?
Appellant’s Brief at 5.
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Before we address Appellant’s issues we must determine whether this
Court has jurisdiction to entertain this appeal. On December 12, 2018, this
Court issued an order directing Appellant to show cause, within ten days, why
the appeal should not be quashed as taken from an interlocutory order.
Appellant timely responded to our show cause order.
Generally, an appeal may be taken as of right from a final order.
Pa.R.A.P 341(a). A final order disposes of all claims and of all parties.
Pa.R.A.P. 341(b)(1). Notwithstanding this rule, an appeal may also be taken
as of right from an order made final by statute, even though the order does
not dispose of all claims and all parties. Pa.R.A.P. 311(a)(8). The Declaratory
Judgments Act, 42 Pa.C.S.A. § 7532, provides that a declaration of rights,
status, and other legal relations, whether affirmative or negative “have the
full force and effect of a final judgment[.]”
It is unclear whether the order challenged on appeal disposed of all
claims against all parties since the status of Appellant’s case against the
deceased driver of the vehicle is not immediately apparent. However, the
order sub judice disposed of all claims against Progressive,6 and therefore, is
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6 The order in question grants Progressive’s motion “subject to [Appellant’s
right to institute appropriate litigation in the event [Appellant] can
demonstrate the existence of any additional medical benefits, outstanding
more than thirty days, for which attorney’s fees and interest could be
collected.” Trial Court Order, 9/24/2018, at para. 2. We do not find this
language to indicate a lack of finality in the order. Appellant has had since
June 2016 to provide proof of any outstanding bills for which interest and
attorney’s fees could be collected and has not done so. Moreover, the trial
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a final order. See Nationwide Mutual Insurance Company v. Wickett,
763 A.2d 813 (Pa. 2000) (order granting declaratory relief and dismissing
some but not all defendants is a final order). Thus, we turn to the merits of
Appellant’s issues.
First, we note that Appellant’s second issue was not included in her
concise statement, thus, it is waived. See Pa.R.A.P. 1925(b)(vii). Appellant’s
first and third issues relate to her contention that the trial court erred by
determining the amount of attorney’s fees to which Appellant is entitled under
75 Pa.C.S.A. § 1716 without first making an explicit finding that Progressive’s
refusal to pay benefits was unreasonable. Appellant contends that the
declaration should not have been entered without such an explicit finding and
that she was entitled to continue discovery as to the reasonableness of
Progressive’s actions. Progressive analogizes Appellant’s position to a
negligence action in which the tortfeasor agrees not to contest liability and
proceed to damages and yet the plaintiff insists that a jury trial be held on
liability. Progressive’s Brief at 16. We agree with Progressive that this issue
is moot.
“[T]he mootness doctrine requires an actual case or controversy to be
extant at all stages of a proceeding[.]” Pilchesky v. Lackawanna County,
88 A.3d 954, 964 (Pa. 2014). An issue may become moot due to an
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court specifically stated that it was unlikely that Appellant could make such a
demonstration or institute litigation aimed at such a recovery. Hence, the
present litigation is terminated by the order challenged on appeal.
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intervening change in the facts of the case. Id. Here, the reasonableness of
Progressive’s conduct under § 1716 was only an issue up to the point that
Progressive agreed to provide all of the relief available under the statute.
In its entirety, 75 Pa.C.S.A. § 1716 provides,
[b]enefits are overdue if not paid within 30 days after the insurer
receives reasonable proof of the amount of the benefits. If
reasonable proof is not supplied as to all benefits, the portion
supported by reasonable proof is overdue if not paid within 30
days after the proof is received by the insurer. Overdue benefits
shall bear interest at the rate of 12% per annum from the date
the benefits become due. In the event the insurer is found
to have acted in an unreasonable manner in refusing to pay
the benefits when due, the insurer shall pay, in addition to
the benefits owed and the interest thereon, a reasonable
attorney fee based upon actual time expended.
75 Pa.C.S.A. § 1716 (emphasis added).
Appellant’s complaint sought first-party benefits, interest on overdue
benefits, and reasonable attorney’s fees from Progressive. Appellant’s
Complaint, 4/18/13, at para. 51. Progressive paid the benefits together with
interest at a rate of 12% on overdue benefits. Moreover, the trial court
ordered Progressive to pay attorney’s fees for time expended in seeking
overdue benefits and interest thereon. Progressive has provided or been
ordered to provide all of the relief available to Appellant under the law. Thus,
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there is no longer a controversy regarding the reasonableness of Progressive’s
conduct.7 Appellant is not entitled to relief on these issues.
Appellant’s final, and only, justiciable issue relates to the amount of
attorney’s fees to which she is entitled. This presents a question of statutory
interpretation, therefore, our standard of review is de novo and our scope of
review is plenary. Schappell v. Motorists Mut. Ins. Co., 934 A.2d 1184,
1187 (Pa. 2007). Appellant contends that she is entitled to payment of all of
her attorney’s fees that relate to proving that Progressive’s conduct was
unreasonable. Appellant argues that this includes fees incurred prior to
notifying Progressive of her claim. We find this position untenable. Section
1716 expressly authorizes payment of attorney’s fees when there has been
an unreasonable delay in payment of benefits. Progressive cannot be
considered to have delayed payment of benefits before it received notice that
benefits were due. This is especially true where, as in the instant case, the
claimant is not an insured of Progressive. The trial court ordered Progressive
to pay Appellant’s attorney’s fees from the date it received notice of her claim
to the date it accepted the claim, as well as fees incurred after the claim was
accepted, which related to payment of overdue benefits as well as interest
thereon. We perceive no error in this ruling.
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7The issue of reasonableness and the discovery requested by Appellant is
more relevant to Appellant’s bad faith claim which is pending in federal
court.
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The trial court’s determination is in line with our Supreme Court’s
holding in Schappell, supra. In that case, the plaintiff sought interest on
overdue benefits as well as attorney’s fees. The Court found that where the
insurer unreasonably failed to make a timely payment, the plaintiff was
entitled to “the attorney fees expended in seeking the interest.” Id. at 1190.
Under § 1716, a reasonable attorney’s fee may be imposed if the insurer acts
unreasonably in refusing to pay benefits when due (or interest on benefits that
are past due). The provision does not authorize compensation for the time
counsel expends in proving that an insurer acted unreasonably after benefits
and interest have been paid. Appellant is not entitled to relief.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 9/6/2019
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