MARCH 2013 BAD FAITH CASES: COURT AFFIRMS TRIAL COURT’S COORDINATION OF COVERAGE AND DECLARATORY JUDGMENT ACTIONS IN PHILADELPHIA COUNTY (Superior Court)

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In Pa. Manufacturers’ Ass’n Ins. Co. v. Pa. State Univ., the insured appealed an order of the trial court that coordinated two simultaneous coverage actions taking place in different Pennsylvania counties. (See this blog). The first suit was a declaratory judgment action in Philadelphia and the second was a breach of contract suit in Centre County. The trial judge coordinated the actions, which were both collateral to an ongoing civil suit also located in Philadelphia.

On appeal, the court recognized that there was no dispute as to the presence of a common question of law or fact, meaning that the only issue in need of a resolution concerned the proper venue. The court affirmed the trial court’s coordination, reasoning that the convenience of the parties should not be the controlling factor, despite the insured’s contention to the contrary. Convenience is only one factor among many that influence the venue of a coordinated suit.

One judge issued a concurring opinion, agreeing in judgment but noting that the coverage action will not settle unless the underlying civil action settles as well. This will be more likely if all of the parties in both actions can “sit around the same table and negotiate” in the same venue.

Date of Decision: February 21, 2013

Pa. Manufacturers’ Ass’n Ins. Co. v. Pa. State Univ., 2013 PA Super 29 (Pa. Super. Ct. 2013) (Lazarus, J., Ott, J., Strassburger, J.)

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