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PA Supreme Court Auto Insurance Ruling

The Pennsylvania Supreme Court has reinstated a ruling that had been issued by a judge in one of the state's lower courts to decide whether a monetary award in a certain underinsured motorist case should be restored. The case was originally tried in the courtroom of former Luzerne County judge Michael Conahan, someone who has since lost his job over allegations of corruption behind the judicial bench. That original ruling called for arbitration to decide on the merits of the underinsured motorist insurance payout in the case.  This is another example similar to the NICB Florida insurance fraud study of state governments attempting to ensure the fairness and legitimacy of insurance law.

Forester Vanderhoff v. Harleysville Insurance

The ruling by the Pennsylvania Supreme Court was returned in the Forester Vanderhoff v. Harleysville Insurance case. The decision of the state appellate court reinstates the ruling originally returned in the case by Conahan allowing the case to go to arbitration. Outside of the significance of the case to the immediate parties involved, this particular case is also a part of a larger investigation into the corruption probe ongoing in Pennsylvania's Luzerne County where Conahan presided as judge. Federal authorities have been involved in the investigation, seizing numerous documents from the court as part of its examination of evidence in the accusations against the deposed judge. Harleysville Insurance had also been asked to provide additional public records for this case.

From its outset the Vanderhoff v. Harleysville Pennsylvania auto insurance case centered on claims of the existence of a so called "phantom vehicle" being the root cause of a car accident that occurred in the fall of 2001 between Vanderhoff and another driver. In that accident, Vanderhoff rear ended another car while driving on a parkway. According to the plaintiff, he was driving a company truck down the road when he rear ended a vehicle being driven by Ryan Piotkowski at an intersection in the road. According to testimony provided by Vanderhoff, he took his eyes off the road only for a moment after he started driving when the light at that intersection turned green. He saw that the car ahead of him had come to a complete stop and he tried to stop his truck but was unable to prevent it from hitting Piokowski's vehicle.

According to reports, Vanderhoff believed that the car in front of him had come to a stop in order to avoid hitting a car in front of him. But Piotkowski testified that no such car existed. A police officer who responded to the accident and investigated the scene of the collision at the time also testified that at the time, there was no mention of any such vehicle causing the crash. Vanderhoff actually never mentioned the "phantom vehicle" until several months after the accident had occurred when he looked at a police report of the collision and noticed that it did not contain any mention of such a vehicle.

Original Court Ruling Favored Vanderhoff

In the original court ruling, Conahan found Vanderhoff's version of the story more credible, and even went so far as to rule that the driver had proven that the phantom vehicle did exist. This ruling allowed the case to be brought before an arbitration panel comprised of three people, who ended up awarding Vanderhoff with $500,000. But the appellate court back in 2006 had overturned that award because the plaintiff did not report to authorities about the existence of the phantom vehicle within 30 days of the accident, as state law requires.

In an interesting twist, both parties see the latest Supreme Court ruling as a victory. Vanderhoff is glad the decision gives him a chance to see the overturned arbitration panel judgment restored. And Harleysville Insurance points out that the next phase of the process allows them to share evidence that shows they were harmed by Vanderhoff's delay in reporting the existence of the unidentified vehicle in the wake of the accident.

Ruling Implications for Insurance Policyholders

For auto insurance policyholders, the Supreme Court Vanderhoff v. Harleysville Insurance ruling demonstrates that an insurance company in a case like this must prove that the carrier had suffered harm as a result of a driver's delay in reporting details of a claim to a carrier. Cases like these often have implications that spread far beyond the tenets of the specific decision or the parties involved in the ruling - for example, it could result in insurers having to offer fewer auto insurance discounts. Insurance companies and lawyers who regularly represent policyholders in auto insurance cases typically keep a very close eye on cases like these for the purpose of identifying precedent for future court battles.

The Pennsylvania Supreme Court ruling in this case does not mean that it is over, of course. It only allows the case to proceed to arbitration. The same groups could end up back in court a third time for one reason or another, so interested parties should continue paying attention.

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