By Charlotte E. Thomas
Special to the Legal
This summer, the Commonwealth Court of Pennsylvania adopted Rules 3771 through 3784 (Chapter 367) of the Pennsylvania Rules of Appellate Procedure, effective July 30, 2012. Some of the rules reflect changes to summary and formal proceedings in insurance rehabilitations and liquidations, while others merely memorialize current practice.
One change is to the organization of the dockets for insurance rehabilitation and insolvency proceedings, which now resembles the organization of dockets in federal bankruptcies. Previously, all insurance rehabilitation or liquidation proceedings (except certain affirmative actions) were docketed under one omnibus docket. New Rule 3777 establishes an “administrative docket,” initiated by the filing of a rehabilitation or liquidation petition and, similar to bankruptcies, an “ancillary docket” for adversary proceedings and objections to proof of claim determinations.
Intervention under new Rule 3775 is another area of departure. Because the Appellate Rules previously addressed intervention in only limited contexts, the prior practice was to apply the intervention standards in Pa. R. Civ. P. 2326-30, under which the intervener had “all of the rights and liabilities of a party to the litigation.” Intervention by leave of court under new Rule 3775 is permitted where the party shows a “direct and substantial interest in a proceeding.” Rule 3775 anticipates two types of intervention: (1) “general intervention,” permitted on a showing of an ongoing interest in the administration of the insurer’s business or estate; and (2) “limited intervention,” where the applicant’s interest involves a discrete controversy relating to the administration of the insurer’s estate. Rule 3775 also enumerates reasons for intervention, including relief from the stay of litigation in 40 Pa. Stat. §221.26.
Proof of claim procedures have also undergone change. Objections to a claim determination that previously were submitted to the liquidator are now filed with the prothonotary by the claimant, which commences an ancillary docket proceeding. The liquidator then attempts settlement of the claim and files a response if settlement efforts are unsuccessful. Rule 3781 continues to anticipate the appointment of referees and a recommended decision by the referee after consideration of the record submitted, as was the prior practice. The rule also further prescribes exceptions within 30 days should any party disagree with the referee’s recommended decision.
Rule 2776, which expressly addresses response times for motion-type relief, is a welcome addition. It clarifies that motion-type relief shall be sought by application under Appellate Rule 123. Previously, many practitioners believed that motions or requests for relief were due within 14 days after service, as prescribed by Rule 123(b). The response time for applications under Rule 2776 is 30 days. Rule 2776 adds that applications and responses must be accompanied by memoranda of law.
Charlotte E. Thomas is a partner with Duane Morris, where she practices in the area of complex business litigation. She represents parties in securities actions, broker-dealer and financial adviser arbitrations, lender liability actions, directors and officers actions, intellectual property lawsuits, environmental and toxic tort actions, actions under 42 U.S.C. § 1983 and the defense of class actions. She can be contacted by emailing email@example.com.