John J. Hare Presents Oral Arguments Before PA Supreme Court in UIM Case

John J. Hare, Shareholder and Chair of the Appellate Advocacy and Post Trial Practice Group, presented oral arguments earlier this month in Vanderhoff v. Harleysville Insurance in the Pennsylvania Supreme Court. This is the second time that Vanderhoff has been considered by the Supreme Court. R. Bruce Morrison, Shareholder in the firm's Insurance Coverage and Bad Faith Practice Group, wrote the brief for Harleysville and John argued the case, which arises from a minor traffic accident in Luzerne County that occurred when the plaintiff, who was driving his employer's vehicle, rear-ended another vehicle. Both vehicles were driven from the scene, the plaintiff returned to work, and his vehicle continued to be used by his employer without any repairs. 

Although the plaintiff admitted to the police officer who responded to the accident that he simply took his eyes off the road, he then retained an attorney and, eight months after the accident, he claimed for the first time that an unidentified vehicle had cut-off the car in front of him, causing plaintiff to rear-end that car. This "phantom vehicle" claim allowed the plaintiff to seek uninsured motorist coverage under his employer's automobile insurance, which was written by defendant Harleysville. 

By a 2-1 vote of a Luzerne County arbitration panel, the plaintiff received an award of $562,500. Harleysville denied coverage based upon a Pennsylvania statute, 75 Pa.C.S.A. 1702, requiring that unidentified vehicles be reported to both police and the insurer within 30 days after the accident or as soon as practical. The Luzerne County trial court rejected that coverage defense by finding that the plaintiff reported the phantom vehicle as soon as practical.

On appeal, the Superior Court reversed the trial court and entered judgment for Harleysville on the basis that the plaintiff had not timely reported the phantom vehicle claim. However, on further appeal, the Pennsylvania Supreme Court held that, under the relevant statute, Harleysville must show not only late notice but prejudice. It then remanded for a determination of whether Harleysville was prejudiced by plaintiff's eight month delay in reporting the alleged phantom vehicle. Following a hearing, the Luzerne County trial court again held for the plaintiff and found no prejudice. The Superior Court again reversed the trial court and found that Harleysville had clearly demonstrated prejudice. The Pennsylvania Supreme Court granted an appeal to define the proper standard of prejudice in the uninsured motorist context and to determine whether Harleysville had met that standard. A decision is expected in approximately six months.