Legal Updates for Insurance Agents & Brokers
When Being in “The 1%” Is a Financial Detriment: PA Superior Court Affirms Application of Contributory Negligence in Professional Negligence Action Seeking Purely Monetary Damages
Edited By Timothy G. Ventura, Esq.
In Pennsylvania professional negligence actions, the doctrine of contributory negligence is an important defense tool in any trial lawyer’s arsenal. Where the alleged damages in a negligence claim are neither death nor injury to person or property, Pennsylvania courts apply the doctrine of contributory negligence as a complete bar to recovery where the plaintiff’s own negligence contributed to his loss. See 42 Pa. C.S.A. § 7102(a); Gorski v. Smith, 812 A.2d 683, 703 (Pa.Super. 2002); Columbia Med. Group, Inc. v. Herring & Roll, P.C., 829 A.2d 1184, 1191-92 (Pa.Super. 2003). A finding of even 1% contributory fault acts as a complete bar to recovery. See Gorski, 812 A.2d at 703; Columbia Med. Group, Inc., 829 A.2d at 1190-91.
“Contributory negligence is conduct on the part of a plaintiff which falls below the standard [of care] to which he should conform for his own protection and which is a legally contributing cause…in bringing about the plaintiff’s harm.” Thompson v. Goldman, 14 A.2d 160, 162 (Pa. 1955). Specifically, in the context of a professional negligence action against an insurance broker, federal courts applying Pennsylvania law have held that an insurance customer’s own “failure to exercise care of a reasonably prudent businessman for the protection of his own property and business which contributes to the happening of the loss” bars his recovery for such financial harm. Industrial Valley Bank and Trust Co. v. The Dilks Agency, 751 F.2d 637, 639 (3d Cir. 1985) (citing Consol. Sun Ray, Inc. v. Lea, 401 F.2d 650, 656 (3d Cir. 1968)).
The application of contributory negligence, as opposed to comparative negligence, hinges on the source of damages sought. In Westcoat v. Northwest Sav. Assoc., 548 A.2d 619 (Pa.Super. 1988), the Pennsylvania Superior Court applied contributory negligence to a professional negligence action arising out of an alleged failure to procure insurance, finding that monetary damages did not constitute damage to tangible property under Section 7102(a).
In Kane v. Atl. States Ins. Co., 2018 Pa. Super. Unpub. LEXIS 4094 at *10 (Pa.Super. 2018), the Pennsylvania Superior Court recently affirmed the Westcoat court’s application of contributory negligence in the context of an insurance broker negligence claim, stating, “monetary damage does not constitute damage to tangible property, which is necessary to invoke the Comparative Negligence Act…”
Kane concerned an appeal from a trial court decision applying contributory negligence as a complete bar to the plaintiffs’ negligent misrepresentation claim against their insurance agent. The plaintiffs sued for monetary losses arising out of a coverage denial for fire loss to their garage, which they contended their insurance agent assured them was covered under their homeowners’ insurance policy. The insurance agent denied liability and pursued a contributory negligence defense. The jury found that the insurance agent was negligent and this negligence was a substantial factor in causing the plaintiffs’ purported loss. The jury also found that the plaintiffs were contributorily negligent, but their negligence was not a substantial factor in causing their loss. The jury apportioned 75% of the negligence to the defendants and 25% to the plaintiffs, and the trial court molded the verdict and entered a defense verdict. The plaintiffs appealed, stating that (a) comparative negligence should apply and the trial court improperly relied upon Westcoat and (b) their apportioned negligence did not exceed 50% and was not a substantial factor in causing their damages.
The plaintiffs sought to differentiate their claims from the facts in Westcoat, contending their lawsuit involved a misrepresentation, rather than lack of coverage, and that the parties stipulated to the amount of damages. The Pennsylvania Superior Court rejected this argument, stating that contributory negligence applied in Westcoat because of the type of damages sought, not based on the nature of the agent’s purported negligence or the unfixed amount of damages. The Superior Court upheld the trial court’s application of contributory negligence.
The Kane decision solidifies and reinforces the application of contributory negligence in Pennsylvania as a valid bar to a plaintiff’s claim for professional negligence where his own negligence contributes to his alleged monetary damages.
Though Kane is an unpublished decision, and, thus, non-precedential, it affirms that pure monetary damages are not damages to tangible property; therefore, the doctrine of contributory negligence should apply in professional negligence actions. This decision is favorable for the defense of insurance brokers/agents in Pennsylvania, and it underscores the importance of developing and identifying potential bases for a contributory negligence jury charge at trial through written discovery and deposition.
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