author: MONTEMURO, Judge:

text:
    599 A.2d 208
    COMMONWEALTH of Pennsylvania v. Francis FERRI, Appellant.
    Superior Court of Pennsylvania.
    Argued Sept. 11, 1991.
    Filed Oct. 9, 1991.

      Stanley W. Greenfield, Pittsburgh, for appellant.
    Kevin F. McCarthy, Asst. Dist. Atty., Pittsburgh, for Com., appellee.
    Before OLSZEWSKI, MONTEMURO and HOFFMAN, JJ.
   MONTEMURO, Judge:

This is an appeal from a judgment of sentence entered following appellant’s jury conviction on charges of first degree murder and conspiracy to commit murder. On April 28, 1983, the appellant, Francis Richard “Rick” Ferri was indicted with Anthony LaRocca for the August 2, 1982 slaying of their drug distribution partner John “Jocko” Heatherington. Heatherington, at the time of his murder, was under a federal grand jury indictment for drug distribution charges. Ferri and LaRocca discussed killing Heatherington to prevent the potential disclosure of their drug distribution network.

On August 2,1982, Ferri met Heatherington at the Quality Inn Motel on Route 30, North Versailles, Pennsylvania. Ferri and Heatherington were seen together between 10:15 and 10:50 pm. Heatherington was shot in the hotel parking lot at approximately 11:00 p.m. He died one month later from multiple gunshot wounds to the head. Ferri was charged with one count of criminal homicide 18 Pa.C.S. § 2501(a); one count of criminal conspiracy to commit homicide, 18 Pa.C.S. § 903(a)(1); and one count of conspiracy to distribute cocaine 18 Pa.C.S. § 903(a)(1). On April 9, 1984, the trial court granted defendant’s motion to sever the drug conspiracy charges as to each defendant from the homicide charges. The Commonwealth appealed this decision to the superior court which affirmed, and denied a hearing en banc. On May 6, 1986, the Commonwealth petitioned the Supreme Court for allocator. This petition was denied on December 30, 1986. On January 16, 1987, the record was remanded to the Court of Common Pleas.

The Commonwealth requested and was granted its motion to sever the trials of LaRocca and Ferri. Ferri, after a trial by jury, was found guilty of first degree homicide and conspiracy to commit homicide. The sentence imposed was five to ten years for the conspiracy charge, and life imprisonment for the homicide conviction. Thirty-one post trial motions were timely filed and subsequently denied on July 28, 1989. Five issues raised by post-verdict motion are the subject of this appeal from the judgment entered. Ferri also raises five additional issues pro se. This court, however, is precluded from considering a pro se brief where a separate brief has been filed by counsel. Commonwealth v. Ellis, 398 Pa.Super. 538, 581 A.2d 595 (1990). Accordingly, Ferri’s additional contentions are not discussed in this Opinion.

The first issue properly raised on appeal is whether the four year delay incident to the Commonwealth’s interlocutory appeal and subsequent petition for allocator violated Pa.R.Crim.P. 1100. In addition, Ferri asserts that the delay prejudiced his ability to call certain alibi witnesses. The trial court correctly determined that the appeal was proper, and that the time during this permissible interlocutory appeal is excludable time.

Furthermore, the trial court properly held that the four year delay did not prejudice the defendant’s rights. (T.C.O. at 15). An “interlocutory appeal by the Commonwealth tolls Rule 1100, compels the conclusion that defendant was timely tried.” Commonwealth v. Coleman, 341 Pa.Super. 160, 163, 491 A.2d 200, 201 (1985). The court in Coleman, also noted that the Supreme Court in Jones v. Commonwealth, 495 Pa. 490, 434 A.2d 1197 (1981) “held that the defendant’s dubious claim of prejudice to his defense could not outweigh the Commonwealth’s entitlement ‘to seek appellate review of what it considered to be the improper suppression of important evidence in a first degree murder trial.’ ” Coleman, 341 Pa.Super. at 160, 491 A.2d at 203 quoting Jones, 495 Pa. at 500-01, 434 A.2d at 1202. Thus, Ferri’s first contention is without merit.

The second issue raised on appeal is whether the trial court erred in admitting the testimony of Ferri’s former counsel over the objection that the testimony was privileged.

This issue arises from the following facts: The day after the victim was killed, attorney Leonard Sharon notified Ferri that Heatherington had been shot the night before. The Appellant immediately took the clothes he had been wearing the night of the shooting to Sharon’s office. Claudia Sharon, Leonard’s wife and law partner, received the clothing and gave them to Leonard Sharon. Mr. Sharon, upon termination of his representation of Ferri, turned the clothing over to Dianne Bar Quinlin, former member of the Allegheny County Public Defender’s office. Ms. Quinlin submitted the clothing for testing to Dr. Levine of the Allegheny County Crime Lab.

The prosecutor, Leo Dillon, learned of the existence and location of the clothing through reviewing a taped conversation between Ferri and one Gordon Bennett. After the murder of Heatherington, agents of the Drug Enforcement Administration had approached Bennett, who was suspected of being involved with Ferri’s drug distribution network, seeking his cooperation in their investigation. At DEA’s behest, Bennett consented to wear a wire.

References to the clothing were also made public in a letter from Ferri to federal district court responding to Sharon’s motion to withdrawal as counsel in an unrelated federal case. Statements in the letter included, “you have a set of clothing that I gave you the day after Jocko was shot.” (T.C.O. at 21).

Through discovery, the prosecution obtained both the clothing and Dr. Levine’s report. Ferri concedes that the clothing itself is not privileged, and does not contest the propriety of its discovery. See Commonwealth v. Stenhach, 356 Pa.Super 5, 514 A.2d 114 (1986) (discusses defense counsel’s duty to disclose incriminating physical evidence). He does, however, contest the trial court’s decision permitting Sharon and Quinlin to testify. The admissibility of the scientific tests of clothing conducted in 1985 and 1987 required the Commonwealth to establish a chain of custody dating back to the day after the shooting. Commonwealth v. Alarie, 378 Pa.Super. 11, 547 A.2d 1252 (1988). Without Sharon and Quinlin’s testimony, the prosecution would be unable to admit the clothing into evidence. Ferri asserts that attorney-client privilege prevents this testimony.

In Stenhach, this court dealt with the defense attorney’s duty to disclose incriminating physical evidence. This court struck a balance between the right of the prosecutor to discover the evidence and the attorney-client privilege, holding that, “the prosecution is entitled to use the physical evidence as well as information pertaining to its condition, location and discovery but may not disclose to a fact-finder the source of the evidence.” 356 Pa.Super at 24, 514 A.2d at 123. Ferri claims that permitting his former attorneys to testify as to their possession of the clothing improperly discloses to the finder of fact the source of the evidence, thus violating the privilege. The trial court relying on federal case law, held that any voluntary disclosure by the holder of the privilege that is inconsistent with the confidential nature of the relationship thereby waives the privilege. U.S. v. Fisher, 692 F.Supp. 488, 494 (E.D.Pa.1988). The court thus found that Ferri effectively waived any attorney client privilege with his disclosure of his delivery of clothing to third persons, and concluded that due to the waiver of the attorney-client privilege, the Stenhach rationale is not applicable to the present case.

Whether Ferri’s disclosure to Bennett waived his attorney-client privilege is an issue of first impression in Pennsylvania. However, our Court’s resolution of this precise issue with respect to marital privilege guides our discussion. Commonwealth v. Clark, 347 Pa.Super. 128, 500 A.2d 440 (1985). The Clark court held that the marital privilege survives subsequent disclosures because it is “the relationship that existed at the moment of the communication which society seeks to protect by the privilege, not the substance of the message itself.” 347 Pa.Super. at 133, 500 A.2d at 443.

The attorney-client privilege, likewise, seeks to protect a relationship by fostering “a confidence between client and advocate that will lead to a trusting and open attorney-client dialogue.” Estate of Kofsky, 487 Pa. 473, 482, 409 A.2d 1358, 1362 (1979). The result of a violation of the attorney-client privilege is “damage to the administration of justice.” Id. Analogous to the marital privilege, it is the relationship between the attorney and client at the moment of the communication that society seeks to protect. Thus, the holding in Clark is equally applicable to prevent waiver of the attorney-client privilege. Ferri argues that without waiver of the privilege, the Stenhach holding effectively blocks the Commonwealth from eliciting testimony from either Sharon or Quinlin.

Contrary to Ferri’s argument, the underlying rationale of Stenhach supports rather than undermines the admissibility of Sharon and Quinlin’s testimony. The facts in Stenhach were limited to the attorney’s duty and subsequent criminal liability for failing to disclose incriminating physical evidence. The case, while discussing questions of admissibility of the attorney’s testimony, did not specifically deal with the waiver issue.

Rather, the court in Stenhach balanced the prosecution’s right to use the physical evidence with the defendant’s right to protect the privileged circumstances surrounding the attorney’s possession. In discussing the duty to disclose, the court declined to restrict the Commonwealth’s efforts to obtain seizable evidence, “ ‘merely because it has been placed in the hands of an attorney. To hold otherwise would mean that a criminal suspect could shield evidence from discovery by the simple and expedient delivery to an attorney, a result we deem patently unreasonable.’ ” Commonwealth v. Stenhach, 356 Pa.Super. at 16-17, 514 A.2d at 120 quoting In re Gartley, 341 Pa.Super. 350, 367, 491 A.2d 851, 860 (1985). Permitting the use of the attorney-client privilege effectively to block the admissibility of non-privileged physical evidence, merely because it is placed in an attorney’s hands, is a result equally unreasonable.

In People v. Meredith, 29 Cal.3d 682, 175 Cal.Rptr. 612, 631 P.2d 46 (1981), the California supreme court dealt specifically with the situation in which it was proper to permit an attorney’s testimony. The court held that when an attorney retrieved abandoned physical evidence, “ 'he necessarily deprives the prosecution of the opportunity to observe the evidence in its original condition or location. To extend the attorney-client privilege to a case in which the defense removed evidence might encourage defense counsel to race police to seize critical evidence.’ ” Stenhach, 356 Pa.Super. at 19, 514 A.2d at 121, quoting Meredith, 175 Cal.Rptr. at 612, 631 P.2d at 46. To prevent this unwanted result, the Meredith court permitted the limited testimony of the defendant’s attorney as to the evidence’s location and condition. Similarly extending the attorney-client privilege to prevent the admissibility of physical evidence might encourage the use of the attorney’s office as an evidence depository. This is not the type of exchange between attorney and client that the privilege seeks to foster or protect.

By requiring disclosure but denying testimony as to its source, Stenhach balances the right of the Commonwealth to obtain non-privileged evidence, while respecting privileged communications. In the present case, denying the foundation testimony does not properly balance the respective rights of the parties. Instead, the Commonwealth is effectively denied use of the evidence and non-privileged evidence remains protected. The source of the evidence should be protected, but not at the cost of denying admission of otherwise admissible evidence.

An appropriate balance consistent with Stenhach is to limit the testimony to establishing chain of custody. The defense can eliminate the need to call an attorney by stipulating to the authenticity of the physical evidence. See e.g., People v. Meredith, 29 Cal.3d 682, 175 Cal.Rptr. 612, 631 P.2d 46 (1981). In the present case, a stipulation was offered, but not accepted by defense counsel. The questioning of both Sharon and Quinlin was carefully limited to establishing the chain of custody and authentication of the clothing. The privileged communications remained protected to the extent possible, while the Commonwealth was permitted to use the non-privileged physical evidence. The trial court, therefore, properly admitted the testimony of Sharon and Quinlin.

The next issue on appeal also pertains to the clothing, that is, whether permitting the infrared testing of the clothing for gunpowder during the cross-examination of Ferri’s expert witness constituted an unfair surprise and prejudicial error. Dr. Levine testified for the prosecution and opined that the clothes that Ferri wore the night of the murder contained gunpowder. Defense’s expert Fassnacht was questioned on direct examination as to the methods used to determine the presence of gunpowder. Mr. Fassnacht testified as to the tests employed, and that opined that the tests relied upon by Levine were not dispositive. “You might find something that appears to be gunpowder, but there are other things that might appear to be gunpowder which are not.” (N.T June 2-18 at 1599).

On cross-examination the prosecutor questioned Fassnacht on possible alternative methods of testing for gunpowder. The witness agreed that infrared testing would be determinative of whether gunpowder was the particle in question. The prosecutor then asked the expert if he would be willing to participate in such a test with Dr. Levine. Fassnacht agreed and the test results conclusively demonstrated that the particle was gunpowder.

Ferri asserts that the tests should have been done prior to trial pursuant to a stipulation between the parties, and that permitting the testing during the defendant’s case constituted an unfair surprise. The trial court held that the tests should have been run prior to trial, “but I think we are at the point now where [the] jury ... [would] want to know. They are the fact-finders.” (N.T. June 2-18 at 1637). Although a stipulation is mentioned in both counsels’ briefs, it is not a fact of record. Accordingly, this court cannot assess whether the stipulation was breached. Commonwealth v. Marchesano, 348 Pa.Super 387, 502 A.2d 597 (1985).

“It is axiomatic that a trial judge has broad powers concerning the conduct of a trial and, particularly with regard to the admission or exclusion of evidence. Controlling cross-examination is likewise within the sound discretion of the trial judge.” Commonwealth v. Niemetz, 282 Pa.Super. 431, 444-45, 422 A.2d 1369, 1376 (1980). Under the present facts, the Commonwealth laid a proper foundation for the admissibility of the test. Commonwealth v. McGinnis, 511 Pa. 520, 515 A.2d 847 (1986). Furthermore, the test is dispositive, and would assist the finder of fact. There is nothing of record to indicate that the trial court abused its discretion in permitting the test or admitting its result.

The fourth issue raised on appeal is whether the trial court erred in holding that Ferri waived his attorney client privilege so as to permit the testimony of David Arthur Jones. Jones, Ferri’s former attorney on several unrelated matters, testified that Ferri directed him to send a letter dictated by Ferri to Pasquale DeStephano in care of the Federal Witness Protection program. Jones refused to comply with Ferri’s request as he interpreted the letter as threatening. The trial court permitted this testimony, after first finding that Ferri waived his right to assert attorney-client privilege.

In determining that there was waiver, the court heard conflicting testimony concerning Ferri’s response to a subpoena ordering Jones to appear before the Allegheny County Grand Jury. Jones testified at trial that Ferri instructed him to, “go in and tell the truth, tell them the whole truth. I am absolutely innocent of any wrongdoing here, you tell them whatever they want to hear.” (N.T. June 2-18, 1987 at 881). Jones also stated that, “I asked him specifically if he authorized me to divulge the entire communication we had, and he said yes.” (N.T. June 2-18 at 863). Ferri testified at trial that he told Jones, “I'm not waiving anything.” (N.T. June 2-18 at 1332). The trial court resolved this credibility issue in favor of Jones.

It is not this court’s function to weigh evidence or pass on the credibility of witnesses. Commonwealth v. Jackson, 506 Pa. 469, 485 A.2d 1102 (1984). After a careful review of the record and the trial court opinion, this court is satisfied that there was neither manifest error, nor a decision that was arbitrary and capricious. Therefore, we are bound by the trial court’s determination that, even assuming an attorney-client relationship existed, Ferri waived his privilege.

The final issue raised on appeal is whether the trial court erred in admitting a taped conversation between Pasquale DeStephano and Michael Romano. DeStephano testified at trial that prior to the murder, LaRocca solicited him to murder Heatherington. DeStephano told his acquaintance Romano about LaRocca’s offer, and requested that Romano watch his back when he met with LaRocca. Romano informed the DEA of this conversation. After the murder, DEA contacted Romano and requested that he meet with DeStephano, this time wearing a wire to record their conversation. The substance of the conversation included references to the prior solicitation and speculation as to how the murder occurred. Ferri asserts that the contents of the tape are hearsay, and cumulative, and that its probative value does not outweigh its prejudicial effect.

The Commonwealth admitted the tape to corroborate DeStephano’s testimony, and to rebut any implication that DeStephano fabricated LaRocca’s solicitation. The statements, therefore, were not admitted for the truth of the matter asserted, and are not hearsay. Commonwealth v. Cohen, 371 Pa.Super. 558, 538 A.2d 582 (1988). Ferri contends that the evidence is cumulative since the contents of the conversation were elicited from Romano during his direct examination. , The trial court’s determination that the evidence was not cumulative will not be disturbed absent abuse of discretion. Commonwealth v. Stetler, 494 Pa. 551, 431 A.2d 992 (1981).

Ferri also contends that the tape recording contained references that did not pertain to the existence of the LaRocca solicitation and had no probative value. Appellant further argues that the prejudicial value of the statements speculating as to Ferri’s involvement outweighed its minimal probative effect. It is the trial court’s function to balance prejudicial effect of evidence against its probative value. The trial court’s ruling as to admissibility will not be disturbed absent abuse of discretion. Commonwealth v. Foy, 394 Pa.Super. 442, 576 A.2d 366 (1990). This court finds no such error.

Accordingly, for the foregoing reasons the judgment of sentence is affirmed.

      . Ferri’s conspiracy to distribute cocaine charge is the subject of a separate appeal.

      . The trial court also permitted the transcript of the tape recording to be read after finding that the recording was, at times, inaudible.


source: Caselaw Access Project

author: ROWLEY, President Judge:

license: Public Domain

text:
    599 A.2d 214
    COMMONWEALTH of Pennsylvania v. George ROBINSON, Appellant.
    Superior Court of Pennsylvania.
    Argued Aug. 14, 1991.
    Filed Oct. 16, 1991.
    Reargument Denied Dec. 18, 1991.

      Stuart Lev, Ardmore, for appellant.
    Anthony J. Baratta, Asst. Dist. Atty., Philadelphia, for the Com., appellee.
    Before ROWLEY, President Judge, and BECK and HESTER, JJ.
   ROWLEY, President Judge:

The Municipal Court of Philadelphia dismissed charges against appellant George Robinson pursuant to Pa. R.Crim.P. 6013. The Commonwealth of Pennsylvania filed an appeal in the Court of Common Pleas from the order of the Municipal Court. The Court of Common Pleas reversed the order of the Municipal Court. Appellant has filed this appeal raising the following issue: whether dismissal under Rule 6013 was proper where the Commonwealth did not provide routine and required discovery until the applicable time period had expired. After reviewing the record, we reverse the order of the Court of Common Pleas and reinstate the order of the Municipal Court. Accordingly, appellant is discharged.

Appellant was arraigned on charges of theft and receiving stolen property on August 6, 1988. Therefore, the automatic run date under Rule 6013 was December 5,1988. Pursuant to Municipal Court procedure, the case was listed for status on August 17, 1988. Because discovery was not complete, the case was again listed for status on October 5, 1988. On October 5, 1988, the Commonwealth still had not provided discovery; therefore, the case was continued again. The case was listed for trial on November 1, 1988. On November 1, 1988, the Commonwealth still failed to provide discovery and the complaining witness failed to appear. Therefore, the case was continued to December 12, 1988. On December 12, the Commonwealth provided appellant with the requested discovery. At this time, appellant made a motion to dismiss the charges pursuant to Rule 6013. The Honorable Eric Lilian of the Municipal Court granted the motion. The Commonwealth filed an appeal to the Court of Common Pleas which reversed Judge Lilian’s order and remanded the record for trial. Appellant then filed this timely appeal.

Appellant contends that his trial was delayed due to the Commonwealth’s failure to provide mandatory discovery. In addressing this issue, the Court of Common Pleas determined that, under Commonwealth v. Woodell, 344 Pa.Super. 487, 496 A.2d 1210 (1985), “an order dismissing prosecution with prejudice under the speedy trial Rule is an inappropriate penalty for tardy delivery of discovery by the Commonwealth.” Court of Common Pleas Opinion 3/22/91 at 4. However, the trial court’s reliance on Woodell is misplaced.

In Woodell, a panel of this Court reversed the trial court’s order dismissing charges against the defendant because of the Commonwealth’s failure to provide discovery. As the Court of Common Pleas in the present case stated, this Court held that dismissal of the charges was an inappropriate penalty in that case. However, Woodell involved only the failure on the part of the Commonwealth to provide discovery; there was no claim in Woodell that the Commonwealth’s failure to provide discovery caused a delay in the defendant’s trial beyond the applicable time period. The holding in Woodell does not stand for the proposition that, in the context of a Rule 6013 or Rule 1100 claim, dismissal of charges is inappropriate when the delay is caused by the failure of the Commonwealth to provide discovery material. Unquestionably, dismissal is an appropriate action when the Commonwealth fails to bring a defendant to trial within the time period prescribed in Rule 6013. That does not change merely because the Commonwealth’s failure to provide mandatory discovery causes the delay.

Furthermore, our Supreme Court recently stated that where, as here, a defendant’s discovery request is not contested and the request is not made for purposes of trial strategy, a request for discovery does not toll the running of Rule 1100 (the Court of Common Pleas counterpart to Rule 6013). Commonwealth v. Edwards, 528 Pa. 103, 595 A.2d 52 (1991).

In addition, the Court of Common Pleas determined that “[tjhe Commonwealth had been duly diligent in requesting the discovery materials on several occasions and presented evidence to this effect to the lower court at the 6013 hearing. The Commonwealth could not provide the defendant with materials not in its possession and clearly an extension of time was warranted.” Court of Common Pleas Opinion at 6. Obviously, the Commonwealth cannot provide defendants with discovery materials which they do not possess. However, the Commonwealth must exercise due diligence in acquiring those materials.

At the hearing, the assistant district attorney who was handling appellant’s case during the pre-trial stage testified that he had requested the discovery materials from the police department through the usual procedure followed by the District Attorney’s office, that is, filing discovery request forms. The assistant district attorney testified that he filed these forms twice. The Municipal Court judge did not conclude that the individual assistant district attorney had not been diligent in requesting the material. See Transcript 12/12/88 at 17-18. However, the Municipal Court did conclude that the Commonwealth failed to show due diligence in providing the materials to defense counsel, and “[s]omewhere in the office there is a snag and I consider that a lack of due diligence.” Id. at 18. For the following reasons, we agree.

The Commonwealth merely showed that the assistant district attorney had requested the materials through the usual procedure followed by the District Attorney’s office. Rule 6013, however, obligates the District Attorney’s office itself to act with due diligence. In Commonwealth v. Browne, 526 Pa. 83, 584 A.2d 902 (1990), the Supreme Court opined that

[The District Attorney’s office] ... must, to be diligent, have simple systems in place to carry out the routine duties of the office. ... Practicing lawyers must maintain docket books to make sure that they appear in court on the right date, file pleadings on time, complete discovery in a timely fashion, and do not run afoul of statutes of limitations. No less is required of a properly administered district attorney’s office.

Id,., 526 Pa. at 90, 584 A.2d at 906. Apparently, the procedure which the District Attorney’s office utilizes in order to obtain discovery materials from the police department is not adequate as these materials are not being provided to defendants in a timely fashion. Due diligence is not shown merely because the assistant district attorney, on two occasions, filed a discovery request form. Accordingly, the Municipal Court did not err in finding a lack of due diligence on the part of the Commonwealth.

Finally, we address the Court of Common Pleas’ reliance on the procedure of the Municipal Court in which cases are listed for status before being listed for trial. The court stated that the period in which trial was delayed because of this procedure was in effect a continuance agreed upon by appellant and extendable time due to judicial delay. See Court of Common Pleas Opinion at 5-6. We find this conclusion to be unjustified. This is not a situation where crowded court dockets have made it impossible for the Commonwealth to try a defendant within the applicable time period. The “listing for status” procedure is apparently a routine occurrence in the Municipal Court system and cannot be relied upon to defeat a valid Rule 6013 claim.

For the above reasons, we conclude that the Court of Common Pleas erred in reversing the order of the Municipal Court. We therefore reverse the order of the Court of Common Pleas and discharge appellant.

The order is reversed and appellant is discharged.

      . Appellant also asserts that no evidence was presented to show that the Commonwealth exercised due diligence in securing the presence of the complaining witness. However, this issue was not raised in the Municipal Court and we will not address it.

      . Rule 6013 provides that “[tjrial in a Municipal Court case ... shall commence no later than one hundred twenty (120) days from the date on which the preliminary arraignment is held.”


author: KELLY, Judge:

text:
    599 A.2d 217
    Richard J. DAHAR, Appellee, v. Timothy GRZANDZIEL and Sanford A. Middleman, d/b/a Middleman & Middleman. Appeal of Sanford A. MIDDLEMAN, d/b/a Middleman & Middleman, Appellant.
    Superior Court of Pennsylvania.
    Argued Sept. 11, 1991.
    Filed Nov. 14, 1991.

      Sanford A. Middleman, Pittsburgh, appellant.
    Maureen D. Harvey, Pittsburgh, for appellee.
    Before CAVANAUGH, BECK and KELLY, JJ.
   KELLY, Judge:

In this case we are called upon to determine whether the trial court properly held the appellant-attorney, Middleman, personally liable for his client’s dental costs based on its finding that an enforceable contract to protect the appelleedentist’s, Dr. Dahar’s, fees out of the client’s settlement funds existed between appellant-attorney and appellee-dentist. We find that the appellee-dentist furnished sufficient consideration, by providing information that was instrumental in creating the settlement fund from which appellant-attorney collected his fee, to support appellant-attorney’s promise to protect appellee-dentist’s fees. We also find that appellant-attorney breached this agreement by distributing the settlement funds without protecting appelleedentist’s fee. Therefore, we affirm.

The relevant facts and procedural history of this case are as follows. The client, Grzandziel, sustained injuries to his jaw and teeth in an auto accident and retained the appellant-attorney to represent him in a personal injury action arising from that accident. On June 27, 1986, the client sought the appellee-dentist’s services to treat his injuries. After examination, the appellee-dentist informed the client that alignment and preparation for surgery were needed at an estimated cost of $2,850.00 plus additional costs for invisible braces elected by the client. At that time, the client instructed the appellee-dentist to forward all bills to the appellant-attorney to be paid out of any settlement obtained in the personal injury action. The appellee-dentist’s bookkeeper telephoned the appellant-attorney’s office and received confirmation that the appellee-dentist’s fees would be protected. Further, appellant-attorney’s office issued a letter, dated July 14, 1986, providing appellee-dentist with written confirmation, stating in relevant part: “be advised that I represent ... Grzandziel ... be advised that I will protect your bill out of any settlement claim.”

Upon receiving oral confirmation that his fees would be protected, the appellee-dentist began treating the client. On August 23, 1986, the appellee-dentist received a second letter, dated August 12, 1986, from appellant-attorney. In it, the appellant-attorney requested that the appellee-dentist furnish reports regarding the client’s treatment. He also advised the appellee-dentist not to release information to anyone regarding client without the appellant-attorney’s approval. The second letter also stated: “my client has authorized me in writing to retain for you from any settlement made in this case any part of your fees for professional services which are unpaid.” The appellee-dentist complied with attorney’s requests for reports and notified the appellant-attorney when contacted by representatives of the other party to the personal injury action regarding the client’s treatment.

After treating the client for eighteen months and receiving no information of settlement, the appellee-dentist asked the client to begin to pay the bill. The client paid $1,475.00 of the $2,850.00 bill. The appellee-dentist later learned from the dental surgeon who had treated the client that the client had received a settlement in his personal injury action and had paid the dental surgeon in full. The appellant-attorney confirmed the $44,000.00 settlement over the telephone and sent a copy of the settlement statement to the appellee-dentist. The settlement statement failed to mention the appellee-dentist’s fees, save a note on the bottom, signed by the client, stating that the appellant-attorney was not authorized to pay the appellee-dentist and releasing the appellant-attorney from liability for non-payment of appellee-dentist’s fees. According to the settlement statement, the appellant-attorney distributed the settlement fund to the third parties listed thereon and paid the balance over to the client.

The appellee-dentist instituted this lawsuit against the client (appellee’s patient) and the appellant-attorney (patient’s lawyer) to recover the remaining dental and orthodontic fees. The trial court, sitting without a jury, found that the appellant-attorney was personally liable to the dentist for the fees and issued a verdict for the appelleedentist and against both the appellant-attorney and the client. The attorney’s Motion for Post-Trial Relief was denied, and judgment was entered against him for the amount awarded the dentist, $1375.00, plus interest from November 30, 1989. The client, Grzandziel, took no further action. This timely appeal followed.

On appeal, the appellant-attorney raises three issues for our consideration.

1. WHETHER THE TRIAL COURT ERRED IN THAT APPELLANT MIDDLEMAN DID NOT ENTER INTO A CONTRACTUAL RELATIONSHIP WITH APPELLEE DAHAR.

2. WHETHER THE TRIAL COURT ERRED IN THAT, ASSUMING A CONTRACT, APPELLANT MIDDLEMAN IS NOT LIABLE DUE TO BREACH.

3. WHETHER THE TRIAL COURT ERRED IN THAT, ASSUMING A CONTRACT, APPELLANT MIDDLEMAN’S ACTIONS WERE THOSE OF AN AGENT, AND APPELLANT MIDDLEMAN IS NOT PERSONALLY LIABLE FOR DEFENDANT GRZANDZIEL’S FAILURE TO PAY.

(Appellant’s Brief at 3).

The appellant first contends that the trial court erred in finding that a contract existed between appellant-attorney and appellee-dentist. The appellant argues that his promise to protect appellee-dentist’s fee out of the settlement claim was not supported by consideration. The appellant further argues that the agreement is unenforceable because it lacks specificity. Particularly, the appellant asserts that there was no bargained-for exchange because the parties failed to expressly address what the appellee-dentist would do in exchange for the appellant-attorney’s promise to protect the dentist’s fees. In the alternative, appellant asserts that there was no detrimental reliance by the appellee-dentist on the appellant-attorney’s promise to protect the fees because the dentist’s reliance on the uncertain event of settlement was not reasonable, and the dentist did not in fact rely on the attorney’s promise, but demanded partial payment from the patient. We do not agree.

It is well established that consideration confers a benefit upon the promisor or causes a detriment to the promisee. Cobaugh v. Klick-Lewis, Inc., 385 Pa.Super. 587, 591-92, 561 A.2d 1248, 1250 (1989); Cardamone v. Univ. of Pittsburgh, 253 Pa.Super. 65, 72 n. 6, 384 A.2d 1228, 1232 n. 6 (1978). Here, the appellant-attorney promised to make certain that the appellee-dentist’s fees were paid out of any settlement received by the appellant-attorney in the client’s personal injury case. The appelleedentist began treating the client, provided reports regarding the client’s injuries, and cooperated with the appellant-attorney’s request that he (the appellee-dentist) not discuss the client’s condition with attorneys for the other party in the personal injury action without his (the appellant-attorney’s) approval. The trial court found that the appellant-attorney’s promise to protect the dentist’s fee was supported by adequate consideration, specifically concluding that the appellee-dentist had furnished information important in obtaining the settlement and had helped create the settlement fund. (Tr.Ct.Op. of 2/12/91 at 4). Clearly, the appellant-attorney who derived his fee out of the settlement funds benefitted from the appellee-dentist’s contribution toward obtaining that settlement: providing treatment cost-estimates and furnishing initial and follow-up reports regarding the client’s treatment.

The appellant-attorney further argues that the agreement between the parties is void because it lacks specificity. We disagree.

In order to create an enforceable contract, the parties must set out the terms of the agreement with sufficient specificity. Greene v. Oliver Realty, Inc., 363 Pa.Super. 534, 539, 526 A.2d 1192, 1194 (1987); Linnet v. Hitchcock, 324 Pa.Super. 209, 214, 471 A.2d 537, 540 (1984). An agreement is sufficiently definite and will not fail for vagueness if the parties intended to make a contract and the terms provide a reasonably certain basis for a court to give an appropriate remedy. Jeannette Paper v. Longview Fibre, 378 Pa.Super. 148, 158, 548 A.2d 319, 324 (1988), cert. denied in 493 U.S. 821, 110 S.Ct. 78, 107 L.Ed.2d 44 (1989) alloc. denied, 522 Pa. 577, 559 A.2d 38 (1989); Greene v. Oliver Realty, supra; cf. Linnet v. Hitchcock, supra (terms of oral contract too uncertain to permit enforcement where parties’ testimony regarding terms contradict). Also, the terms of a contract may become definite as a result of partial performance; what was previously unclear may be made definite by performance by one or more parties. Greene v. Oliver Realty, supra.

The terms of the agreement at issue here are sufficiently definite. The appellant-attorney promised in his first letter that he would protect the appellee-dentist’s fee out of any settlement obtained in the client’s case. Admittedly, the letter fails to mention what the appellee-dentist was to do in exchange. However, the appellee-dentist treated the client, provided the appellant-attorney with reports regarding the client’s injuries, and complied with the attorney’s request that the appellee-dentist not discuss the client’s condition without the attorney’s approval. The appellee-dentist’s performance makes clear what may have been unclear at the time the appellant-attorney offered to protect the appellee-dentist’s. fee: the protection was offered in exchange for the appellee-dentist’s cooperation with the attorney’s effort to obtain a settlement in the client’s case. The trial court had a reasonably certain basis upon which to fashion an appropriate remedy. When the appellee-dentist cooperated with the appellant-attorney’s requests, and the attorney obtained a settlement, but failed to protect the unpaid portion of the appellee-dentist’s fee, a breach occurred. The remedy, as fashioned by the trial court, gave the appellee the benefit of the appellant’s performance — payment of the dental fee.

The appellant-attorney’s second contention is that, assuming that a contract existed between the appellee-dentist and the appellant-attorney, the appellant-attorney is not liable to the appellee for breaching the contract. The appellant-attorney supports his argument with several theories. First, the appellant-attorney asserts that the consideration owing from the appellee-dentist failed when the appelleedentist requested that the client begin to make payments before a settlement was reached in the client’s case, and therefore, the appellant-attorney’s subsequent failure to protect the appellee-dentist’s fee was not a breach of the contract. Second, the appellant-attorney contends that the client, a third party, prevented the appellant-attorney from performing as promised by withdrawing the appellant-attorney’s authority to pay the appellee-dentist’s fee out of the settlement fund. Lastly, the appellant-attorney argues that he is not personally liable for the non-payment because, rather than acting as a surety on a debt owed by the client to the appellee-dentist, he was acting as the client’s agent and merely promised, on the client’s behalf, to pay the appellee-dentist’s fees out of the settlement proceeds. In reaching our conclusion that the appellant-attorney is personally liable for breaching the contract with the appelleedentist, we address these arguments seriatim.

A “failure of consideration occurs when the consideration bargained for does not pass, in whole or part, to the promisor.” McGuire v. Schneider, Inc., 368 Pa.Super. 344, 350, 534 A.2d 115 (1987), appeal granted 518 Pa. 619, 541 A.2d 746, affirmed 519 Pa. 439, 548 A.2d 1223 (1988); Necho Coal Co. v. Denise Coal Co., 387 Pa. 567, 569, 128 A.2d 771, 772 (1957). One asserting failure of consideration must show that the consideration contemplated was never received. See In re Levine’s Estate, 383 Pa. 354, 358-59, 118 A.2d 741, 742 (1955) (emphasis added); Killeen’s Estate, 310 Pa. 182, 187, 165 A. 34, 35 (1932).

The appellant-attorney argues that the parties agreed that the appellee-dentist would not attempt to collect any part of his fee for treating the client until a settlement was obtained. However, in a letter from appellant-attorney to appellee-dentist, dated August 12, 1986, the appellant-attorney reaffirms that he would retain for the appellee-dentist “from any settlement made in this case, any part of your fees for professional services which are unpaid.” The appellee-dentist treated the client for eighteen months, from June of 1986 until about December of 1987, before requesting that the client begin to pay a portion of the $2,850.00 bill. In light of the appellant-attorney’s own reference to “unpaid” portions of the appellee-dentist’s bill in the letter of August 12, 1986, appellant-attorney’s argument that the appellee-dentist’s request constituted a failure of the consideration contemplated by the parties is without merit. This reference evinced the parties’ understanding that a portion of the bill might be paid prior to settlement, and thus, the consideration owing to the appellant-attorney did not include the appellee-dentist’s abstention from beginning to collect the fee.

The appellant-attorney’s performance was not rendered impossible by the client’s withdrawing the appellant-attorney’s authority to pay the appellee-dentist’s fee out of the settlement fund. The record indicates that the client had expressly authorized the appellant-attorney to withhold from any settlement sufficient funds to pay unpaid portions of the appellee-dentist’s fees. Later, when it came time to distribute the settlement fund, the client withdrew this authorization. Rule 1.15 of the Pennsylvania Rules of Professional Conduct, 42 Pa.C.S., addresses what an attorney should do when a dispute arises regarding distribution of funds in which a client or third person has an interest. An attorney may refuse to surrender the property to the client until the dispute is resolved. Id. Thus, contrary to the appellant-attorney’s argument that he could not have protected the appellee-dentist’s fee because ethics would not permit him to disperse the client’s money without authorization, the ethical guidelines expressly permit the appellant-attorney to retain sufficient funds to protect the appelleedentist’s fee before distributing the settlement proceeds to the client.

Finally, the appellant-attorney was not merely acting as his client’s agent in agreeing to protect the appelleedentist's fees out of the settlement fund. An attorney may act as his client’s agent and enter into contractual relationships on the client’s behalf. See Smith-Edwards-Dunlap v. Artists, U.S.A., 9 Pa. D & C 3d 764, aff'd per curiam, 263 Pa.Super. 598, 400 A.2d 625 (1978). The burden of establishing an agency lies with the party asserting it. Girard Trust Bank v. Sweeney, 426 Pa. 324, 231 A.2d 407 (1967). There are three elements that need be proved to show that an agency existed: “the manifestation by the principal that the agent shall act for him, the agent’s acceptance of the undertaking, and the understanding of the parties that the principal is to be in control of the undertaking.” Scott v. Purcell, 490 Pa. 109, 117, 415 A.2d 56, 60 (1980).

In the instant case, the client instructed the appelleedentist to forward his bills to the appellant-attorney. The appellant-attorney promised the appellee-dentist that if a settlement was obtained in the client’s personal injury action, that he (the attorney) would protect the appelleedentist’s fee out of the settlement fund. In practice, while the client is the equitable owner, the attorney maintains physical custody over settlement funds, distributes the fund according to the settlement statement, and gives the remainder to the client. The appellee-dentist contracted with the appellant-attorney, as the appellant-attorney had physical control over the settlement fund, to protect the appelleedentist’s fee out of the settlement fund. Thus, the parties did not have an understanding that the client (the alleged principal) was to be in control of protecting the appelleedentist’s fee.

For the reasons stated above, we affirm the judgment entered in the trial court.

Judgment Affirmed.

      . Because we find that the trial court properly found that the appellant’s promise to protect appellee’s fees was supported by consideration, we need not address appellant’s argument that promissory estoppel, or detrimental reliance, does not apply here. Had we concluded that the agreement was not supported by consideration, we could have enforced the contract under a theory of detrimental reliance, as all the requirements are met. First, the appellee-dentist’s reliance on the appellant-attorney’s protection letter was reasonable given the appellant-attorney’s own testimony that such letters were "routinely sent" to treating physicians. Second, the appellee-dentist testified at trial that he would not have treated the client without the appellant-attorney’s assurance of fee protection. Thus, the appellee-dentist did in fact rely on the appellant-attorney’s protection letter in agreeing to treat the client and in foregoing payment for treatment for eighteen months.


author: FORD ELLIOTT, Judge:

text:
    599 A.2d 222
    CITY OF PHILADELPHIA for the Use of ALLIED ROOFERS SUPPLY CORPORATION and Allied Roofers Supply Corporation, Appellants, v. JOSEPH S. SMITH ROOFING INC., Joseph S. Smith, James F. Sunday, Fireman’s Fund Insurance Company, J.J. White Incorporated, John S. McQuade Co., Foster Schermerhorn Barnes Inc., and Kelso Construction Company Inc., Individually and as Partners t/a FSB/Kelso and KSB/Kelso Joint Venture.
    Superior Court of Pennsylvania.
    Argued Dec. 6, 1990.
    Filed Nov. 18, 1991.

      Daniel M. Replogle, Camden, N.J., for appellants.
    Patrick T. Henigan, Philadelphia, for appellees.

      Before CAVANAUGH, OLSZEWSKI and FORD ELLIOTT, JJ.
   FORD ELLIOTT, Judge:

This is an appeal from the June 4,1990 order in the Court of Common Pleas of Philadelphia County denying appellants’ post-trial motions and affirming the judgment entered on March 17, 1990 following a non-jury trial before the Honorable Nelson A. Diaz. Appellant, a supplier of roofing materials, initiated the underlying breach of contract action in an attempt to recover monies owed by appellees, the general contractor and its surety, pursuant to joint payment agreements on two separate construction projects.

Appellee, J.J. White, (hereafter referred to as “White”), was a general contractor for two construction projects for the city of Philadelphia: the Queen Lane project and the Divine Providence Village project. White engaged Fireman’s Fund Insurance Company, (hereafter referred to as “Fireman’s Fund”), to act as surety on the Queen Lane Project for the City of Philadelphia. Thereafter, White entered into a subcontract with Joseph Smith Roofing Company, (hereafter referred to as “Smith”), whereby Smith would perform roofing work on both construction projects. Subsequently, Smith entered into a supply contract with appellant, Allied Roofers Supply Corporation, (hereafter referred to as “Allied”), whereby Allied would supply materials to Smith for the two projects.

As a requirement for supplying material to Smith, Allied required the execution of joint payment agreements. Smith and Allied entered into separate but identical joint payment agreements with White on both projects which provided:

(A) All checks drawn in payment for materials shipped by [Allied] to the [project sites], are to be drawn jointly to [Allied] and [Smith].
(B) Payments for the material are to be made in accordance with terms and conditions of [the subcontracts) ].
(C) Payments for the material to [Allied] according to Paragraphs “A” and “B” above are contingent upon Allied’s delivery of the material to the [site] and subcontract noted in “B” above.
(D) Payment is to be mailed to [Allied], 2430 East Tioga Street, Phila, PA 19134.

As set out above, under the language of paragraphs (A) and (B) of the agreement, all checks drawn in payment for materials shipped by Allied to the site were to be drawn jointly to Allied and Smith, and payments for the materials were to be made in accordance with the terms and conditions of the subcontract(s) between Smith and White.

Provision 13 of the subcontracts between Smith and White defined the terms and conditions of payments for work performed as follows:

The Subcontractor, unless otherwise directed by the Contractor, shall submit to the Contractor at the end of each month a requisition containing an itemized estimate of the Subcontract Work done and materials furnished and incorporated into the Project which shall be in such form and be supported by such information, certificates and documents as the Contractor shall require. The amount to which the Subcontractor shall be entitled upon any such monthly estimate shall be the amount approved by the Architect/Engineer and/or Owner and Contractor. The Contractor shall pay to the Subcontractor, on or about the twenty-fifth day of the following month 90% of the amount approved by the Architect/Engineer and/or Owner and Contractor.
The balance due or final payment to the Subcontractor shall be paid, by the Contractor to the Subcontractor, upon the expiration of thirty (30) days from the date of the completion of the Project, when accepted and certified by the Architect/Engineer and/or Owner and Contractor whichever the case may be.
Should it appear at any time that the Subcontractor, or anyone performing any part of the Subcontract Work, has not paid any amount due for labor, materials, equipment, or services supplied in connection with the performance of the Subcontract Work, the Contractor shall have the right, but not the obligation, to retain out of any payment then due or thereafter to become due the Subcontractor, monies sufficient to pay such amount. If all payments due hereunder have been made to the Subcontractor, the Subcontractor shall refund such amount to the Contractor.

In accordance with this provision, at the end of each month Smith would submit to White a requisition for payment. The requisitions would request that checks be made payable solely to Smith or that checks be made payable jointly to Smith and Allied evidencing materials used and incorporated into the project. Each payment requisition contained a form certification, signed by the president of Smith, that all amounts due and owing for materials had been paid in full except as noted. Each time a joint check was issued, it was mailed to Allied and Allied retained all the proceeds and credited the amount toward Smith’s account.

As a result of this invoicing procedure, Smith submitted a total of six applications for payment on the Queen Lane Project, five of which followed the execution of the joint payment agreement for amounts totalling $25,572.24. At the instruction of Smith, White paid only two of these applications with jointly payable checks for a sum total of $4,817.34. Smith did not complete the work on the Queen Lane Project and White was required to secure another subcontractor for completion of the project. The substitute contractor testified that there were no materials at the job site when he took over the work. Allied claims that it supplied materials in the amount of $19,994.36 on the Queen Lane Project. Having retained all the proceeds of the joint checks issued in the amount of $4,817.34, Allied claims it is still owed $15,177.02.

On the Divine Providence Project, Smith submitted seven invoices for payments, only four of which requested the issuance of jointly payable checks. The sum total of the seven invoices was $74,788.44. Allied claims that it has received $37,364.16 through joint checks for materials supplied on the Divine Providence Project but is still owed $25,143.72. The estimated cost for materials submitted by Smith to White for the project was $33,000. No final payment has ever been issued on the Divine Providence Project.

Allied first argues that White unilaterally modified the joint payment agreement by failing to issue all checks on both projects payable jointly to Smith and Allied and that this breach includes the failure to issue a final payment on the Divine Providence Project made jointly payable to Smith and Allied.

Based on the language of the joint payment agreements, the language of the subcontracts incorporated therein, and the business dealings of the parties, we find no merit to Allied’s argument that White was required to issue all checks on the projects jointly payable to itself and Smith. Rather, we find the conduct of White to be in compliance with the terms of the joint payment agreement, rather than a modification thereof.

The joint payment agreement between the parties herein represented nothing more than a joint check arrangement. As used in the construction industry, such arrangements provide that the general contractor will issue the progress payments to the subcontractor in the form of jointly payable checks to the subcontractor and its materials supplier. As noted by one commentator:

Joint check arrangements may be initiated by parties at the top or bottom of the contract claim. For example, the general contractor may wish to insure that the party receiving the check (e.g., the subcontractor) will properly disburse the proceeds of the check to his supplier or subcontractors. In this manner the general contractor reduces the chances that his subcontractor will pocket the money and leave the supplier unpaid, thus provoking the supplier to file mechanic’s liens or make claims against the general contractor’s payment bond.
Similarly, the supplier or sub-subcontractor may initiate the joint check arrangement to make sure that the subcontractor won’t run off with the progress payments and leave him out in the cold. The supplier may desire this arrangement because the subcontractor is in financial trouble or lacks assets, or because he has never done business with the subcontractor before. Sometimes, the supplier will request a joint check arrangement out of simple mistrust of him.

Barrett, Joint Check Arrangements: A Release for the General Contractor and Its Surety, 8 Constr.Law. 7, 7 (1988).

While no Pennsylvania court has yet addressed the legal ramifications of joint payment agreements, they have been approved in numerous other jurisdictions. See Brown Wholesale Electric v. Beztak, 163 Ariz. 340, 788 P.2d 73 (1990); Medford School Dist. v. Peterson, 76 Or.App. 99, 708 P.2d 623 (1985); Anchor Concrete Co. v. Victor Savings & Loan, 664 P.2d 396 (Okla., 1983); Post Brothers Constr. Co. v. Yoder, 20 Cal.3d 1, 141 Cal.Rptr. 28, 569 P.2d 133 (1977); F & C Engineering Co. v. Moore, 300 S.W.2d 323 (Tex.Civ.App.1957).

In interpreting such agreements, courts have relied upon the intent and language of the agreements as well as industry practice to determine the rights and liabilities of the parties. Instantly, looking to the joint payment agreement between the parties and the payment terms of the subcontract, we determine that the agreement, as prepared by Allied, did not require all checks to Smith to be payable jointly but rather only those checks drawn for materials. Allied specifically conditioned payment by joint check on the terms of the subcontract which left complete control in the hands of Smith. This was so even though Allied was fully cognizant of Smith’s ongoing financial difficulties which had led to Allied’s policy that Smith could only place orders on joint payment accounts. Under the terms of the subcontract, it was Smith who would invoice White and it was Smith who would identify when and what materials were furnished and incorporated into the projects. We agree with the trial court’s determination that Allied failed to protect its rights under the contract by endorsing each of the joint checks without insuring that it was receiving sufficient payment for the materials delivered.

By endorsing the joint check, a presumption arises in favor of the contractor, that the materialman has received all sums then owed to him even though, in actuality, this may not be the case. The justification for this presumption is twofold: first, the contractor has contracted with the subcontractor, not the materialman, and therefore the contractor is usually unaware of the nature and amount of the materialman’s claim; and second, the materialman may protect himself by simply ensuring that with each endorsement proper payment has been received. In joint checks issued by the contractor, inclusion of the material-man as payee represents that the contractor intends to discharge any obligation owed to the materialman.

‘ “If it may reasonably be said ... that a material dealer ... could be so naive as to fail to understand the purpose and intention of an owner in making checks jointly to it and his subcontractor, [the materialman] was at least under the duty of inquiring ... as to his intention with respect to the application of the funds represented by the checks. This [the materialman] failed to do, and it may not now be heard to say that respondent should bear the loss which it sustained as a result of its own imprudence.” ’ (Re-Bar Contractors, Inc. v. City of Los Angeles [1963], supra, 219 Cal.App.2d 134, 136, 32 Cal.Rptr. 607, 608.)

Post Bros. Constr. Co. v. Yoder, supra, 141 Cal.Rptr. 28 at 30, 569 P.2d 133 at 135.

We find that until White was notified that Allied was not being paid for all the materials shipped, it was under no obligation under the joint payment agreement to issue all checks jointly payable to Smith and Allied. Each time a joint check was issued under the terms of the subcontract, Smith certified that all monies due and owing for materials were being invoiced. Without notice to the contrary from Allied, White had no reason to doubt the certification. Additionally, the estimate for materials given to White by Smith for the Divine Providence Project was consistent with the joint check amounts issued by White. Under the principles governing joint check arrangements, any loss resulting from the failure to issue the joint checks in the proper amounts must be borne by Allied which did nothing to protect its rights under the agreement by assuring that White was being properly and timely charged for materials supplied. However, the question of whether White had any obligation to issue a final payment on the Divine Providence Project jointly payable is subject to a different analysis which does rely on White’s assumed obligations under the joint payment agreement.

In October 1984 Allied notified White that it was not being paid fully for the materials supplied on the Project. White’s controller, Thomas Nolan, then notified Smith to take care of the problem. However, based on the notification from Allied of the deficiencies, White issued all checks thereafter jointly payable to Smith and Allied. This amounted to one additional check on the Queen Lane Project and two remaining checks on the Divine Providence Project. No further checks were issued on either project after November 1984. Thereafter, in January 1985 Smith sent a letter to Allied with a copy to White which stated that

Joseph S. Smith Roofing has agreed that all monies due them from the Divine Providence Project will be sent to allied Roofers Supply (approximately $16,000.00). The J.J. White Company will pay this money upon acceptance of the project by the owner.

Allied’s Exhibit, p. 21. It is this letter upon which Allied relies to require White to issue a joint check final payment on the Divine Providence Project. However, what is not clear from the record before this court is whether any application was ever made for final payment for the amounts of retainage on the project. Under Provision 13 of the subcontract between White and Smith, final payment to the subcontractor was to be paid thirty days following completion when the project has been accepted and certified by the appropriate party. Testimony at trial indicated that the Divine Providence Project was completed. Further, it would appear that White has paid $112,152.00 with a retain-age of $12,461.40 on the subcontract price. White argues that the right to final payment, if any, enures only for the benefit of Smith and that Smith may not assign its rights under the contract to Allied without White’s approval. While we agree with the fundamentals of the legal argument, we are troubled by White’s attempt to selectively apply the terms of the subcontract to its benefit.

Following the section of Provision 16 which provides for final payment is another section which reads as follows:

Should it appear at any time that the Subcontractor, or anyone performing any part of the Subcontract Work, has not paid any amount due for labor, materials, equipment, or services supplied in connection with the performance of the Subcontract Work, the Contractor shall have the right, but not the obligation, to retain out of any payment then due or thereafter to become due the Subcontractor, monies sufficient to pay such amount. If all payments due hereunder have been made to the Subcontractor, the Subcontractor shall refund such amount to the Contractor.

Although this section makes it clear that White had the right but not the obligation, to satisfy a debt owed by the subcontractor, this section read in conjunction with the joint payment agreement clearly evidences an intent on the part of White to provide that the materialman be paid. Once White was on notice that Allied was not being paid in full for materials supplied, it decided on its own to issue any remaining checks jointly to Smith and Allied. If, in fact, an additional check is owed to Smith as final payment of the retainage under the subcontract, then White can hardly complain that the check should be issued jointly.

As the trial court made no finding with regard to whether Allied was entitled to a final payment on the Divine Providence Project, we remand for this determination.

Allied next argues that Fireman’s Fund, as surety on the Queen Lane Project, became liable when White, the principal obligor, failed to make joint payments to Allied for materials furnished in connection with this project. Allied argues that the trial court incorrectly concluded that Smith, not White, was the primary obligor under the bond. The trial court further erred, according to Allied, in concluding that its claim against Fireman’s Fund must fail because of its agreement reached with Smith.

Subsequent to Smith’s default on the Queen Lane Project, Smith and Allied entered into a Compromise and Settlement Agreement. The agreement specifically provided that Allied agreed to accept partial payment from Smith as full satisfaction of any and all debts presently owed to Allied by Smith. The testimony of Allied’s credit manager established that at the time this agreement was entered into, there was only one account maintained for Smith. The agreement set forth a payment schedule which amounted to a repayment of twenty-five cents on the dollar to satisfy the debt.

Fireman’s Fund maintains that once the trial court found, as a matter of fact, that Allied had extinguished Smith’s debt by accepting a compromised payment, then it correctly concluded that Allied could not attempt to collect that debt under the materialman’s bond.

We agree with Allied that the trial court incorrectly identified Smith as the principal obligor under the payment bond. Clearly, the language of the introductory paragraph in the bond leaves no doubt that White is the principal obligor under the bond.

KNOW ALL MEN BY THESE PRESENTS, that we, J.J. White, Inc., 550 Bingham Street, Philadelphia, PA 19120, Principal (hereinafter called the Principal Obligor), and Fireman’s Fund Insurance Company, ... Surety, are jointly and severally held and firmly bound unto the City of Philadelphia for the use of any and every person, co-partnership, association or corporation interested, in the sum of six million eighteen thousand hundred dollars ($6,018,000.00) ...

However, because we agree with Allied that the trial court erred in incorrectly identifying the principal obligor under the bond, does not mean that we agree that the trial court also erred in concluding that Allied was precluded from seeking recovery under the bond due to its agreement

with Smith extinguishing Smith’s debt. To the contrary, we hold that the trial court was correct in reaching such a conclusion.

Allied, as a supplier of materials to the Queen Lane Project, is an intended third-party beneficiary of the surety bond. The weight of authority in Pennsylvania provides that suppliers, such as Allied, are third-party beneficiaries under the contractors’ surety bonds, whether or not they are specified as such under the language of the bond. As third-party beneficiaries, these suppliers are entitled to bring a direct action against the surety to recover whenever there has been a default in payment. Concrete Products Co. v. U.S. Fid. and Guar. Co., 310 Pa. 158, 165 A. 492 (1933); Commonwealth v. Great American Indemnity Co., 312 Pa. 183, 167 A. 793 (1933).

However, the rights of a third-party beneficiary to a contract may rise no higher than the rights of the parties to the contract and are subject to the same defenses and limitations which may be asserted between the promisor and promisee. Jewelcor Jewelers and Distributors, Inc. v. Corr, 373 Pa.Super. 536, 542 A.2d 72 (1988), appeal denied 524 Pa. 608, 569 A.2d 1367 (1989); Zimnisky v. Zimnisky, 210 Pa.Super. 266, 231 A.2d 904 (1967).

Furthermore, any independent acts taken by the third-party beneficiary, in an attempt to secure a debt can often jeopardize its ability to recover against the surety.

But while the acts of the public agency or the contractor cannot diminish the rights of the supplier as established by the bond, he might by his own acts destroy his right of protection. ... the supplier’s primary consideration should be avoidance of any act that might jeopardize that protection; for despite all the precautions taken, and the availability of a bond, the supplier may find that he is not being paid. There may be some understandable hesitancy in giving notice of default; an effort may be made by the supplier to work things out with the contractor____ Should there be a default in payment subsequently, and a claim then made upon the surety, aside from the possible loss of protection because of failure to give timely notice, there is also the probability of a defense to such demand that changes in the time or manner of payment operate to discharge the surety when made without its consent.

Ashe, Law of Public Improvement Contractors’ Bonds, Commercial Publishing Co., Inc. (1966), at p. 42-43.

Indeed, Allied did fail to protect its own interests with regard to its claim against Fireman’s Fund. Clearly, under section 194(b) of the Pennsylvania Bond Law, Allied’s steps for recourse against Fireman’s Fund were well plotted.

Any claimant who has a direct contractual relationship with any subcontractor of the prime contractor who gave such payment bond but has no contractual relationship, express or implied, with such prime contractor may bring an action on the payment bond only if he has given written notice to such contractor within 90 days from the date on which the claimant performed the last of the labor or furnished the last of the materials for which he claims payment, stating with substantial accuracy the amount claimed and the name of the person for whom the work was performed or to whom the material was furnished.

Public Works Contractor’s Bond Law of 1967, 8 P.S. § 194(b).

Instead of adhering to its statutory remedy, Allied chose instead to first compromise and settle its debt with Smith, and then seek recovery for the same debt — materials supplied to Smith for the project — under the surety bond. Unfortunately, once the debt was extinguished, so were any rights that Allied had as a third-party beneficiary under the bond agreement.

Thus, while Allied may have had a right to bring a direct action against Fireman’s Fund under the surety bond, that right only existed to the extent that Allied was owed money for materials which it had supplied to the Queen Lane Project. Once that debt ceased to exist, so did Allied’s rights as a third-party beneficiary. In other words, Fireman’s Fund is entitled to raise, as a defense to Allied’s claim, the fact that Allied has compromised and settled its debt with Smith. Not only has the debt been satisfied, but under the terms of the compromise agreement, all guarantors or sureties of the debt were released from liability. In pertinent part, the compromise agreement states:

The undersigned creditor, [Allied], further agrees to accept the payment of twenty-five percent (25%) of the claim scheduled below in full satisfaction of the scheduled debt listed by Smith, and agrees that upon receipt of the final installment, creditor will release and discharge Smith, its officers, directors, agents, successors, assigns and any guarantors or sureties of Smith’s debt.

By the terms of the compromise agreement, the debt owed to Allied, for materials supplied to the Queen Lane Project, was fully satisfied and discharged. Allied agreed to accept twenty-five cents on the dollar as full satisfaction of the debt. Thus, there no longer exists any debt for which Allied may seek recovery from Fireman’s Fund. Fireman’s Fund is entitled to raise this compromise and settlement of the debt as a complete defense to any action by Allied. See Jewelcor Jewelers, supra.

Finally, Allied attempts to circumvent the application of the compromise and settlement agreement by arguing that White undertook an independent obligation under the joint payment agreement which is enforceable by Allied against Fireman’s Fund, as White’s surety. As we have previously discussed in this opinion, Allied is estopped from asserting a claim against White under the joint payment agreement for the Queen Lane Project since Allied failed to protect its own interests under that arrangement. Since Allied is estopped from asserting such a claim against White, it is equally estopped from asserting one against White’s surety, Fireman’s Fund.

The judgment of the trial court in favor of appellees is affirmed as to all matters except that involving whether a final payment is due on the Divine Providence Project. As to that issue, the case is remanded for the trial court’s determination and entry of an appropriate order.

Judgment affirmed in part and reversed in part, and case remanded for proceedings consistent with the opinion.

Jurisdiction relinquished.

      . Allied argues that there is another basis for finding liability on behalf of White, and refers this court to Washington Steel Form Company v. North City Trust Co., 308 Pa. 351, 162 A. 829 (1932). However, Washington Steel, supra, is inapplicable factually to the instant case, as it involved the assignment of a builder’s contract to a trust company as collateral security for a loan. Under the terms of the assignment, the trust company assumed the obligation of paying all debts owed by the builder on the contract. The instant agreement cannot be construed for any purpose as an assignment.

      . The trial court relies on the intermediate appeals court decision in Brown, found at 160 Ariz. 582, 774 P.2d 1372 (1989). In that decision, the Arizona court of appeals, held that in the absence of an agreement to the contrary, where a materialman is paid an amount equal to what is owed by way of contractor issued joint checks, and the materialman endorses the joint checks but fails to retain amounts sufficient to satisfy the entire debt of the subcontractor, it thereafter cannot proceed against the general contractor for any amounts left owing. This holding illustrates what is known as the joint check rule and has been applied by courts in various jurisdictions on the basis of estoppel or accord and satisfaction. However, on appeal to the Arizona Supreme Court, this application of the joint check rule was reversed. While adopting the rule in principle for Arizona, the court determined that under the facts of that case, absent any agreement on allocation of proceeds, the materialman’s endorsement of joint checks issued as progress payments, and the retainage of only that portion of the check which represented the amount owed to date, would not preclude a materialman’s lien for monies still owed in excess of check amounts actually retained. We find the specific rationale in the appeals court decision, which is relied upon by Judge Diaz, to be unaffected by the reversal.

      . The trial court, in what may have been a misunderstanding, discusses whether a final payment was due on the Queen Lane Project. As this project was defaulted on by Smith, there was never any issue regarding final payment with respect to this project.