SNIDER et al v. STERLING AIRWAYS, INC. et al

Filing 455

MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE J. CURTIS JOYNER ON 9/7/2017. 9/8/2017 ENTERED AND COPIES E-MAILED.(sg, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA

ELIZABETH C. SNIDER, Individually
and as Executrix of the Estate of
DANIEL A. SNIDER, and
LEE W. SNIDER, a minor, by his
mother, ELIZABETH C. SNIDER
Plaintiffs
vs.
STERLING AIRWAYS, INC., and
CONTINENTAL MOTORS, INC.,
Defendants

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: CIVIL ACTION
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: NO. 13-CV-2949
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MEMORANDUM AND ORDER

JOYNER, J.

September 7, 2017

This wrongful death/products liability action is once again
before the Court on Motion of the Plaintiffs for Delay Damages
(Doc. No. 429).

In accordance with the following rationale, the

motion shall be granted.
Factual Background
Following a nearly four-week trial, a jury found in favor of
the Plaintiffs, the wife and young son of decedent Daniel Snider,
and against Defendant Continental Motors, Inc. (“CMI”) finding
CMI solely liable for Mr. Snider’s wrongful death in a 2010 plane
crash.

Damages in the amount of $2,753,048.49 were awarded to

Plaintiffs.

Post-trial, CMI moved for a new trial and/or to

alter or amend the judgment and renewed its previously-filed
motion for entry of judgment in its favor as a matter of law.
Finding no merit in either motion, this Court denied both.

By

the motion now before us, Plaintiffs move for the entry of delay
damages pursuant to Pa. R. C.P. 238.

Defendant CMI opposes this

motion and submits that it should either be denied in its
entirety or alternatively, that a significantly lesser amount of
such damages should be awarded.
Principles Underlying Rule 238
It is by now well-settled that Rule 238 is deemed to be a
substantive rule of Pennsylvania law which must be followed by
federal courts sitting in diversity cases.

Kirk v. Raymark

Industries, Inc., 61 F.3d 147, 168 (3d Cir. 1995)(citing Fauber
v. KEM Transportation and Equipment Co., 876 F.2d 327, 328 (3d
Cir. 1989)); Barnes v. Wal-Mart Stores, Inc., Civ. A. No. 061356, 2009 U.S. Dist. LEXIS 44356 at * 3 (E.D. Pa. March 26,
2009); Lancenese v. Vanderlans & Sons, Civ. A. No. 05-5951, 2009
U.S. Dist. LEXIS 3568 at *2 (E.D. Pa. Jan. 13, 2009).

“Rule 238

permits a successful plaintiff in certain civil actions to
recover damages for delay, i.e., interest on the amount of his or
her award.”

Arthur v. Kuchar, 546 Pa. 12, 682 A.2d 1250, 1253

(1996).
“The purpose of Rule 238 is twofold: ‘(1) to alleviate delay
in the courts, and (2) to encourage defendants to settle

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meritorious claims as soon as reasonably possible.’” Id.(citing
Pa. R. C. P. 238, 1988 Explanatory Comment, Laudenberger v. Port
Authority of Allegheny County, 496 Pa. 52, 436 A.2d 147 (1981),
and Craig v. Magee Memorial Rehabilitation Center, 512 Pa. 60,
515 A.2d 1350 (1986)); Krebs v. United Refining Co., 2006 PA
Super. 31, 46, 893 A.2d 776, 795 (Pa. Super. Ct. 2006).

“Delay

damages do not penalize a defendant that chooses to go to court;
they simply do not permit a defendant to profit from holding
money that belongs to the plaintiff by requiring the defendant to
compensate the plaintiff for the loss of the use of that money
during the time the defendant held it.”

Shamnoski v. PG Energy,

2000 PA Super 367, 765 A.2d 297, 305-306 (Pa. Super. Ct.
2000)(quoting Costa v. Lauderdale Beach Hotel, 534 Pa. 154, 626
A.2d 566, 570 (1993)).
Specifically, Rule 238 reads as follows in pertinent part:
Rule 238. Damages for Delay in Actions for Bodily Injury,
Death or Property Damage
(a)(1) At the request of the plaintiff in a civil action
seeking monetary relief for bodily injury, death or property
damage, damages for delay shall be added to the amount of
compensatory damages awarded against each defendant or
additional defendant found to be liable to the plaintiff in
the verdict of a jury, in the decision of the court in a
nonjury trial or in the award of arbitrators appointed under
section 7361 of the Judicial Code, 42 Pa. C. S. §7361, and
shall become part of the verdict, decision or award.
(2) Damages for delay shall be awarded for the period of
time from a date one year after the date original process
was first served in the action up to the date of the award,
verdict or decision.

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(3) Damages for delay shall be calculated at the rate equal
to the prime rate as listed in the first edition of the Wall
Street Journal published for each calendar year for which
the damages are awarded, plus one percent, not compounded.
(b)(1) The period of time for which damages for delay shall
be calculated under subdivision (a)(2) shall exclude the
period of time, if any,
(i) after the defendant made a written offer which
complied with the requirements of subdivision (b)(2),
provided that the plaintiff obtained a recovery which
did not exceed the amount described in subdivision
(b)(3), or
(ii) during which the plaintiff caused delay of the
trial.
(2) The written
(b)(1)(i) shall
offer in effect
commencement of
either

offer of settlement required by subdivision
contain an express clause continuing the
for at least ninety days or until
trial, whichever occurs first, and shall

(i) be in a specified sum with prompt cash payment, or
(ii) contain a structured settlement plus any cash
payment. An offer that includes a structured
settlement shall disclose the terms of payment
underwritten by a financially responsible entity, the
identity of the underwriter and the cost.
(3) The plaintiff’s recovery required by subdivision
(b)(1)(i) shall not be more than 125 percent of either the
specified sum or the cost of the structured settlement plus
any cash payment to the plaintiff.
...
In summary then, under Rule 238, delay damages may be
assessed after one year has elapsed from the filing of the
complaint through the date on which the jury returned its
verdict, excluding: (1) the time period following which a

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settlement offer in conformance with subdivision (b)(2)1 has been
made and, (2) those time periods during which the plaintiff
caused delay of the trial.

The reason a plaintiff cannot collect

for periods during which he or she caused delay of trial is that
those are periods for which the plaintiff is the party
responsible for prolonging the time during which he or she is
denied use of his or her money.

Costa, supra.

“In making a decision on a plaintiff’s entitlement to delay
damages the mere length of time between the starting date and the
verdict is not to be the sole criterion.”

Babich v. Pittsburgh &

New England Trucking Co., 386 Pa. Super. 482, 563 A.2d 168, 171
(1989)(quoting Craig, 512 Pa. at 66, 515 A.2d at 1353).
Additionally, “[t]he fact finder shall consider: the parties’
respective responsibilities in requesting continuances, the
parties’ compliance with rules of discovery; the respective
responsibilities for delay necessitated by the joinder of
additional parties; and other pertinent factors.”

Id.

Among the other pertinent factors for consideration is the
reasonableness of the parties.

Kuchak v. Lancaster General

Hospital, 377 Pa. Super. 288, 547 A.2d 372, 375-376 (1988).

In

determining whether a party’s decision regarding settlement of a
case is unreasonable or in bad faith, the following additional

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Provided that the plaintiff is awarded a sum in excess of 125% of
the amount offered.

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factors are also appropriate for consideration: (1) the strengths
and weaknesses of all the evidence, including evidence of
liability to be presented on both sides; (2) the anticipated
range of the verdict; (3) the relative appearance, persuasiveness
and appeal of the plaintiff, defendant and various witnesses; (4)
whether the plaintiff has engaged in reasonable negotiations; and
(5) the amount of any offers compared to the jury award.
A.2d at 376.

Id, 547

Generally, a plaintiff’s unreasonable settlement

demands are not relevant because while excessive demands may slow
the settlement process, they have little impact upon the speed of
the litigation process.

Schrock v. Albert Einstein Medical

Center, 527 Pa. 191, 194, n.1, 589 A.2d 1103, 1105, n.1 (1991).
And, nothing prevents a defendant from protecting him or herself
against the assessment of delay damages by extending a prompt,
reasonable settlement offer.

Costa, supra,(citing Schrock, 527

Pa. at 195-197, 589 A. 2d at 1106, and Laudenberger, 496 Pa. at
69-70, 436 A.2d at 156).
Discussion
In this case, Plaintiffs filed their complaint against
Defendants initially in the Court of Common Pleas of Philadelphia
County on May 31, 2012 and CMI promptly removed the case to this
Court on June 1, 2012, prior to service of process. (See, Docket
in Civil Action No. 2:12-CV-3054).

For purposes of this motion,

Plaintiffs allege and CMI agrees that June 1, 2012 may properly

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be considered the date upon which process was originally served
such that the time for commencing accrual of delay damages is
June 1, 2013.2

It is undisputed that no offers of settlement

were ever made and the jury returned its verdict on February 16,
2017.

Thus, for purposes of Rule 238, the period of time for

which delay damages may be assessed is the nearly four-years
between June 1, 2013 and February 16, 2017, with the exception of
any periods of time for which delay may properly be attributed to
the plaintiffs.
On this point, Plaintiffs assert that there are no periods
of time during which the accumulation of delay damages may be
tolled.

Defendant CMI, on the other hand, contends that because

the plaintiffs’ settlement demand was unreasonable, they should
be limited to collecting delay damages for the time frame between
the date of service (June 1, 2013) and the date on which they
ostensibly articulated their settlement posture at the first
mediation on December 8, 2014.

Putting aside the irrelevancy of

plaintiffs’ allegedly unreasonable settlement demand for the
moment, CMI offers no proof or any details whatsoever as to what

2
As noted by Plaintiffs, following removal, they filed a motion for
remand to the Philadelphia County Court of Common Pleas which was granted on
January 15, 2013. Thereafter, Continental Motors joined the United States as
a party to this action and again removed it to the Eastern District. At that
time, a new docket number – the current one: 2:13-CV-2949 was assigned. (Pls’
Motion for Delay Damages, p. 2, n.1). Continental notes that while Plaintiffs
never perfected service of process upon it and it never accepted service, June
1, 2012 may be properly deemed to be the date upon which original process was
served. (CMI’s Brief in Opposition to Plaintiffs’ Motion for Delay Damages,
p. 9, n.8).

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the demand or settlement “posture” was or why it found that
posture to be unreasonable.

On the other hand, the following

appears from the exhibits attached to Plaintiffs’ Reply in
Support of an Award of Delay Damages: (1) that CMI sought
mediation in late November, 2014 suggesting Carl Greenberg of
Budd Larner as a mediator and that the mediation could be held in
Philadelphia. (2) Plaintiffs’ and Sterling’s counsel indicated
they were willing to participate and agreed to Mr. Greenberg as
the mediator.

In so doing, Plaintiffs’ counsel stated that since

he had previously written what his perception was of the range
that the mediation should focus on, he did not want to waste time
and effort unless CMI’s counsel did not intend to engage in
serious discussions. (3) The mediation was held in Mr.
Greenberg’s office in Short Hills, NJ on December 8, 2014.
Plaintiff and her attorneys traveled from West Virginia to attend
and subsequently paid $2,107.50 for their portion of the
mediator’s fees.

Also in attendance were Defendant Sterling’s

counsel and counsel for then-defendant United States. (Exhibits
“A” and “B” to Pls’ Reply in Support of Delay Damages).

It

further appears that the mediation was adjourned without any
settlement demand or offers having been made.

A little more than

one year later in January 2016, CMI again asked if Plaintiffs
would be interested in mediating, but this time Plaintiffs’
counsel conditioned his and his client’s attendance on

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Defendants’ making of a pre-mediation offer in order that they
might evaluate the sincerity of the defendants toward settlement.
At that time, Plaintiffs’ counsel made a pre-mediation demand of
$15 million.

(Exhibit “A” to CMI’s Brief in Opposition to

Plaintiffs’ Motion for Delay Damages).
While this Court certainly agrees with Defendant that a $15
million demand was unreasonable, we do not find it so outrageous
as to have stopped CMI from all further settlement conversations.
Clearly, it was intended to be a starting point for discussion.
Indeed, in our experience it is not at all unusual for a
plaintiff to make an unrealistic demand at the outset of
settlement discussions given that all negotiations going forward
would naturally compel the plaintiffs to consider a lesser sum never does a defendant offer an amount which is more than an
initial demand.

As the Pennsylvania Supreme Court noted in

Costa, there is nothing to prevent a defendant from protecting
itself against the assessment of delay damages by extending a
prompt, reasonable settlement offer in response.
570.

626 A.2d at

Hence, in electing to refrain from so doing, CMI proceeded

at its own risk and this decision cannot now be ascribed to the
fault of the plaintiffs.
We therefore turn now to examine what delays, if any, over
the course of the litigation may have been attributable to the
Plaintiffs.

In reviewing the docket and history of this case, we

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simply cannot find any instances in which the plaintiffs may
properly be charged with delaying the trial of this matter.

To

be sure, this was a somewhat complex matter involving extensive
discovery, including several inspections of the aircraft,
extensive written discovery, and multiple depositions of fact and
expert witnesses who were located throughout the country.

At

various points, this matter had been consolidated with one of the
other of the three lawsuits arising out of this tragic accident,
necessitating the coordination of the schedules of additional
attorneys.

Three people were killed with the result that the

damages sought were considerable.

For its part, CMI strenuously

defended against the production of some of the discovery sought
from it which required that Plaintiffs file several motions to
compel against it and on multiple occasions, even after this
Court had ruled on those motions, CMI thereafter sought
reconsideration and/or clarification and filed motions for
protective order.

While CMI is correct that Plaintiffs sought

and were granted leave rather late in the game to amend their
complaint, the amendment sought was to conform the pleadings to
the evidence which was uncovered in the discovery process.

The

Scheduling Orders in this action were amended and the time for
discovery was enlarged several times, but it appears that these
extensions were nearly all joint requests by all of the parties
involved.

Consequently, we can reach no other conclusion but

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that based upon the record, there are no periods of delay which
may be ascribed to the plaintiffs.
Calculation of Delay Damages
Pursuant to the mandate of Rule 238, “[d]amages for delay
shall be calculated at the rate equal to the prime rate as listed
in the first edition of the Wall Street Journal published for
each calendar year for which the damages are awarded, plus one
percent, not compounded.”

Pa. R. C. P. 238(a)(3).

For the years

beginning in January 2013, 2014 and 2015, the Wall Street
Journal’s published prime rate was 3 1/4%.

For 2016, the prime

rate was 3 ½% and for 2017, the rate is 3 3/4%.

We therefore now

compute the delay damages as follows:
For 2013: $2,753,048.49 X 4.25% (.0425) X .589 (215 days of
365)
2013 Total: $68,915.68
For 2014: $2,753,048.49 X 4.25% (.0425) X 1 (365 days of
365)
2014 Total: $117,004.56
For 2015: $2,753,048.49 X 4.25% (.0425) X 1 (365 days of
365)
2015 Total: $117,004.56
For 2016: $2,753,048.49 X 4.50% (.0450) X 1 (365 days of
365)
2016 Total: $123,887.18
For 2017: $2,753,048.49 X 4.75% (.0475) X .128 (47 days of
365)
2017 Total: $16,738.53
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Accordingly, we find and shall award to Plaintiffs delay
damages in the aggregate amount of $443,550.51.
follows.

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An order