Overdorf v. Fonner
| Decision Date | 14 February 2000 |
| Citation | 748 A.2d 682 |
| Parties | David H. OVERDORF, Administrator of the Estate of Kristin R. Overdorf, Deceased, Appellee, v. Sharon FONNER, Appellant. |
| Court | Pennsylvania Superior Court |
John D. Newborg, Pittsburgh, for appellant.
Edward J. Balzarini, Pittsburgh, for appellee.
Before KELLY, JOHNSON, and TAMILIA, JJ.
¶ 1 In this appeal, we address whether delay damages are properly assessed where the defendant tenders primary insurance policy limits through her personal automobile insurance carrier, coupled with a full release contingency that would defeat recovery of excess liability coverage on the same accident. We conclude that a settlement offer that is tendered in exchange for the plaintiff's complete release of all parties, where there exist other assets through other insurance policies, does not constitute an offer of the full amount available for payment of a plaintiff's claim. Accordingly, we affirm the order that awarded delay damages.
¶ 2 On April 7, 1991, Kristen R. Overdorf, age 27, was killed after being struck while bicycle riding on a public street in the city of Washington, Pennsylvania. Sharon Fonner was operating the motor vehicle that struck and killed Overdorf. The motor vehicle was owned by Tomsic Motor Company, Inc. (Tomsic) and was rented by Fonner's husband while Fonner's automobile was in the Tomsic dealership for repairs. To recover damages arising from Overdorf's untimely death, her estate (the Estate) sued Sharon Fonner, the Commonwealth of Pennsylvania Department of Transportation (PennDOT), the City of Washington, Fonner's husband, and Tomsic.
¶ 3 The Fonners had personal automobile coverage with Travelers Insurance Company (Travelers) with liability limits of $50,000.00. In addition, excess liability coverage was available through Tomsic's carriers in the sum of $15,000.00 through Allstate Insurance Company (Allstate) and $1,000,000.00 through Motorists Mutual Insurance Company (Motorists Mutual). The Fonners' personal insurance coverage with Travelers was primary to these excess insurance policies. While this matter was pending, Allstate consistently indicated its willingness to pay the limits of its excess liability coverage ($15,000.00) as soon as Travelers's coverage ($50,000.00) had been paid. Motorists Mutual refused to tender any payment on its coverage, claiming Fonner was not entitled to coverage because her husband, rather than herself, had signed the rental agreement for the covered vehicle.
¶ 4 On November 4, 1991, Travelers confirmed in writing its October 31, 1991 oral offer to pay the policy limit of $50,000.00 to the Overdorf's Estate "in exchange for a complete release of our insured [Fonner]." The Estate did not accept this offer, but rather commenced this civil action on March 11, 1993. The sheriff served Fonner with original process on March 24, 1993. On August 5, 1993, Travelers wrote to counsel for the Estate, indicating that its "offer of policy limits, in the amount of $50,000.00[,] remains in effect on behalf of our policyholder." Then, on October 19, 1994, counsel for Travelers wrote to counsel for the Estate, indicating its willingness to draft a joint tortfeasors release that would release Travelers and Sharon Fonner "for any potential personal liability." The record does not reflect that any such release was ever prepared or tendered to the Estate.
¶ 5 On October 10, 1995, Fonner and her husband filed a joint Petition for Debt Relief, under Chapter 7 of the Bankruptcy Act, in the United States District Court for the Western District of Pennsylvania. The Fonners were released from all dischargeable debts on February 23, 1996. The Estate petitioned the bankruptcy court, informing it that the Fonners' original petition for relief in bankruptcy did not include the Overdorf civil action as a potential claim. The bankruptcy court modified the discharge order, preserving the Estate's right to pursue any claims involving liability insurance coverage.
¶ 6 On December 2, 1998, following a trial in the case now before us, a jury awarded the Estate damages of $862,500.00 against Fonner. The Estate filed a petition for delay damages pursuant to Pa.R.C.P. 238, which Fonner opposed. Following a hearing, the Honorable David L. Gilmore awarded delay damages, finding that "Travelers Insurance Company's offer to pay its policy limits, provided the Plaintiff execute a Joint Tortfeasors Release, did not constitute a tender of the entire policy limits as contemplated by Rule 238." Order, 5/19/99. In his order denying Fonner's petition for reconsideration, Judge Gilmore again found that Order, 6/21/99. On July 6, 1999, upon the Estate's praecipe, the prothonotary entered judgment on the verdict in the amount of $862,500.00, and on Judge Gilmore's order of June 21, 1999, assessing delay damages, in the amount of $377,140.59, with interest from December 2, 1998.
¶ 7 Fonner filed this appeal on July 14, 1999, from the order awarding delay damages. Although an appeal from an order awarding or denying delay damages is interlocutory, here, judgment was entered prior to the notice of appeal being filed, and our authority to review the merits of the appeal has been perfected. See Johnston the Florist, Inc. v. TEDCO Constr. Corp., 441 Pa.Super. 281, 657 A.2d 511, 513-16 (1995)
.
¶ 8 Fonner frames the issue for our consideration as follows:
WHETHER DELAY DAMAGES MAY BE AWARDED WHERE THE DEFENDANT IS BANKRUPT AND THE INSURER FOR THE DEFENDANT HAS OFFERED ITS FULL POLICY LIMITS TO THE PLAINTIFF IN SETTLEMENT?
¶ 9 In reviewing a claim that the trial court erred in awarding delay damages, our scope of review is plenary. This court, sitting en banc, has set forth our standard of review in these cases as follows:
[A] defendant must offer all assets that he has available for payment in order to escape liability for delay damages. Whether defendant has tendered all that he has available is determined by the trial judge at an evidentiary hearing. Since the trial court's findings are inherently factual, we will only reverse if we find an abuse of discretion. Furthermore, a defendant opposing the imposition of delay damages has the burden of showing that he is entitled to relief.
Krysmalski by Krysmalski v. Tarasovich, 424 Pa.Super. 121, 622 A.2d 298, 307 (1993)
(citations omitted). Accord Krichten v. Wolpert, 431 Pa.Super. 194, 636 A.2d 196, 198 (1994). Here, Judge Gilmore found that Fonner had not tendered all of her assets available through insurance coverage on the accident because she had conditioned the payment of a portion of that total coverage upon the Estate's execution of a joint tortfeasors release. Fonner bears the burden of establishing that she is entitled to relief on this appeal. See Krysmalski, 622 A.2d at 307.
¶ 10 With respect to the issue on this appeal, Rule 238 provides in pertinent part:
Rule 238. Damages for Delay in Actions for Bodily Injury, Death or Property Damage
* * *
(2) during which the plaintiff caused delay of the trial.
Pa.R.C.P. 238, 42 Pa.C.S.
¶ 11 Under Rule 238(b), the defendant, who bears the burden of proof, has two bases upon which to oppose a motion for delay damages: (1) establishing that the requisite offer has been made and (2) establishing that the plaintiff was responsible for specified periods of time during which the trial was delayed. We have modified the first basis found in Rule 238(b)(1) by declaring that a plaintiff shall not be awarded damages for delay after the date of the defendant's offer when the court determines that, because of the defendant's indigence, the offer was the full amount available for payment of the plaintiff's claim and it was impossible for the defendant to have offered more. See Berry v. Anderson, 348 Pa.Super. 618, 502 A.2d 717, 722 (1986) (en banc)
. In this case, Fonner argues only that she is bankrupt and that her insurer has tendered to the Plaintiff the offer required by Rule 238(b)(1)(i). The parties do not dispute that Fonner's offer of settlement was made and continued for a period of at least ninety days. Nor is there any dispute that the jury's verdict of $862,500.00 was more than 125 percent of Fonner's settlement offer. We must consider only whether the initial tender of the $50,000.00 proceeds in Fonner's personal insurance policy, coupled with a demand for the execution of a general release prior to making any prompt cash payment, satisfies the requirements of Rule 238(b)(1)(i), thereby resulting in an exclusion of any delay damages.
¶ 12 Fonner contends that the facts of record do not support the imposition of delay damages in this case. She relies on Sun Pipe Line Co. v. Tri-State Telecomm., Inc., 440 Pa.Super. 47, 655 A.2d 112 (1994), in contending that delay damages are not warranted. Fonner argues that in Sun Pipe Line, this Court considered "the exact same issue raised in the instant appeal," and that delay damages are tolled where a defendant is bankrupt and the defendant's insurer has offered a settlement of full policy limits. Brief of...
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