Pa. Superior Court panel affirms Philly judge's decision to coordinate and transfer Penn State's suit with insurer to Phila.

By Jon Campisi | Feb 26, 2013

A three-judge state Superior Court panel has affirmed a decision by a Philadelphia judge

to coordinate and transfer litigation between Penn State University and its insurance company to the Philadelphia Court of Common Pleas.

The university gave its insurer, Pennsylvania Manufacturers’ Association Insurance Company, notice early last year of a suit in which the school was named as a defendant that was initiated by a victim of Jerry Sandusky, the since-convicted child molester doing time in state prison for sexually abusing 10 underage boys.

Penn State made a claim for coverage under its general liability policy with PMA, but in late January the insurer fired back by filing for declaratory judgment in Philadelphia County seeking to have a judge declare that PMA has no duty to indemnify Penn State in the underlying action.

Penn State subsequently filed a countersuit in the Centre County Court of Common Pleas claiming breach of contract and bad faith.

Then, in late February 2012, PMA filed a motion to coordinate and transfer the two cases to Philadelphia.

The university, however, sought to keep the litigation in Centre County because it asserted the case had little connection to Philadelphia.

In April of last year, Philadelphia Common Pleas Court Judge Arnold New ruled in favor of the insurance company and ordered the litigation to play out in Philadelphia.

Penn State then appealed New’s decision to the Superior Court.

In their ruling, the appellate judges wrote that the trial court was correct to determine that Philadelphia is the proper venue for the case to play out because the city’s Commerce Court Program specializes in these types of cases, and thus would be a more “efficient venue than the Centre County courts.”

The trial court has also determined that while there was some hardship presented for Penn State concerning witnesses traveling to Philadelphia, the city venue wouldn’t be too inconvenient because PMA is located in the Philadelphia suburbs and attorneys working for the defense hail from Chicago and Los Angeles, and it would be easier for them to travel to a larger airport such as Philadelphia International.

Citing case law, the Superior Court panel wrote that the trial court’s primary task is not to balance the relative convenience of the parties, but to decide if the proposed coordination would provide a “fair and efficient method of adjudicating the controversy.”

The case the judges cited was the 2010 Superior Court decision of Washington v. FedEx Ground Package System.

“Convenience is relevant to this analysis, but not dispositive,” the Superior Court ruling states. “Accordingly, the trial court did not abuse its discretion in finding the Philadelphia County Court of Common Pleas as being a ‘fair and efficient’ forum for settling this controversy.”

The opinion was written by Superior Court Senior Judge Eugene B. Strassburger.

He was joined in the decision by Judges Paula Francisco Ott and Anne E. Lazarus.

Strassburger also wrote a concurring opinion in which he notes that case law doesn’t dictate that the appellate court must review the matter with an abuse of discretion standard because it is a case of first impression.

The judge wrote that while there are many similar cases holding that a court’s ruling on whether to coordinate an action is reviewed on an abuse of discretion standard, “to my knowledge there are no appellate cases dealing with where to coordinate.”

Strassburger stated that he agrees with the majority that the issue of “where” as opposed to “whether” should be reviewed by the same standard.

The judge went on to write that he agrees with the majority’s analysis regarding the number of factors to consider with regard to affirming a transfer to Philadelphia County, “although I am loathe to place much reliance on the first-to-file argument.

“The locus of suit should not be determined by a race to the courthouse,” Strassburger wrote.

Sandusky, a former assistant football coach at Penn State, was convicted on 45 counts of child sex-abuse following a trial in Centre County last June.

In October, he was sentenced to between 30 and 60 years in state prison.

Sandusky’s attorneys are in the process of appealing the conviction to the Superior Court.

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