July 23, 2009

Earlier this month, in a case of first impression, the Pennsylvania Superior Court held that a plaintiff in a personal injury action may unilaterally withdraw a stipulation filed under Pennsylvania Rule of Civil Procedure 1311.1. Rule 1311.1 permits a plaintiff to proceed to trial relying solely upon medical reports in exchange for an agreement that plaintiff’s damages will be limited to $25,000. In Dolan v. Fissell, the Superior Court held that a plaintiff may unilaterally withdraw this stipulation so long as he or she can demonstrate good cause and the defendant will not be prejudiced as a result.

In Dolan, plaintiff had filed a Rule 1311.1 stipulation after appealing a $28,220 arbitration award. Thereafter, plaintiff sought leave from the trial court to withdraw the stipulation after learning that $8,200 in property damage had not been considered when she filed the stipulation and agreed to limit her total damages to $25,000. The trial court permitted plaintiff to withdraw the stipulation, and at trial, the jury awarded plaintiff $410,000. Defendant took an appeal to the Superior Court of Pennsylvania, and, on appeal, the Superior Court was presented with the novel issues of 1) whether a plaintiff could unilaterally withdraw a stipulation filed under Rule 1311.1, and 2) the proper standard to be utilized in making such a determination. Ultimately, the Superior Court concluded that the trial court had properly permitted withdrawal of Dolan’s stipulation because she had demonstrated both good cause for seeking withdrawal (an error in the calculation of the damages sought) and Fissell would not suffer any prejudice as a result of the withdrawal.

In coming to this conclusion, the Superior Court reasoned that the term “stipulation” as used in Rule 1311.1 is a misnomer because the decision to proceed only upon medical reports by limiting damages is one made unilaterally by a plaintiff regardless of the position of defendant. Further, the Superior Court recognized that in some cases, a plaintiff’s injuries may discovered to be more severe at some point in time after the plaintiff has filed a Rule 1311.1 stipulation, or, as in the Dolan case, there is a mistake as to the calculation of the damages sought. Thus, in crafting the “good cause/no prejudice” standard for withdrawal of a Rule 1311.1 stipulation, the Superior Court balanced the underling purposes of the Rule - to speed up trials and prevent defendants from essentially precluding plaintiffs from appealing arbitration awards by forcing them to expend large sums on expert testimony - against the unwanted effect of eliminating a plaintiff’s right to adequate compensation.

Denise M. Bowman is an associate of Hill Wallack LLP in the Yardley office where she is a member of the Business & Commercial Practice Group and the Litigation Division. Ms. Bowman concentrates her practice in the representation of corporate entities and partnerships, buying and selling businesses and real estate and also the representation of individuals and businesses in insurance, commercial litigation, bankruptcy and general business matters.