author: ROWLEY, Judge:

text:
    517 A. 2d 547
    John T. GARBISH and Diane Garbish v. MALVERN FEDERAL SAVINGS AND LOAN ASSOCIATION, Appellant.
    Superior Court of Pennsylvania.
    Argued Jan. 13, 1986.
    Filed Sept. 29, 1986.
    Reargument Denied Nov. 25, 1986.

      Robert J. Shenkin, West Chester, for appellant.
    Jerome R. Balka, Philadelphia, for appellees.
    Before ROWLEY, MONTEMURO and KELLY, JJ.
   OPINION OF THE COURT

ROWLEY, Judge:

This is an appeal from a judgment entered in appellees’ favor following denial of appellant’s post-trial motions for a new trial or judgment n.o.v. Appellant argues that it is entitled to a judgment n.o.v. because it owed no duty to appellees. Appellant also argues that it is entitled to a new trial because of a plethora of erroneous evidentiary rulings and the conduct of counsel. Appellant’s final argument is that the judgment should be stricken because it does not conform to the order of court authorizing the entry of judgment. We affirm the judgment.

On review of a decision denying a motion for judgment n.o.v., an appellate court must consider the evidence in the light most favorable to the verdict winner. Elder v. Orluck, 334 Pa.Super. 329, 483 A.2d 474 (1984); Hargrove v. Frommeyer, 229 Pa.Super. 298, 323 A.2d 300 (1974). Considering the evidence by this standard, the facts are as follows.

In early 1977, Appellee, John Garbish, was transferred by his employer to work in or near Chester County, Pennsylvania. Thereafter in April, 1977, he and his wife sought to purchase a piece of real estate near his new place of employment and to build a home on it. They entered into an agreement of sale for several acres of land and they contacted Eastern Regional Builders which provided them with preliminary plans for a house and with which they contracted for construction of the house. To finance the construction, which was to cost $55,000, appellees needed to borrow $39,000. Appellant agreed to provide appellees with a mortgage for this amount.

At the settlement held on May 24, 1977, appellees and Edward Donovan, one of the principals of Eastern Regional Builders, were required by appellant to execute a building agreement on a form apparently supplied by appellant. Schedule “B” of the building agreement recited that the consideration for the labor and materials itemized in Schedule “A” was to be $55,000 to be paid “by voucher to materialmen, contractor and subcontractor as work progressed.” Schedule “A” of the building agreement was blank. However, at the same time that the building agreement was executed, appellant presented to appellees for the first time a “schedule of operations” which it had required the builder to execute and appellees to initial and date. This schedule was a detailed and itemized breakdown of materials and labor costs used to arrive at the contract price of $55,000, e.g., lumber was to cost $7,000, excavation was to cost $180, and footings and foundation were to cost $350. The total on the schedule of operations equalled the contract price of $55,000. Also at the settlement, appellees were required to initial a detailed Description of Materials executed by Donovan and to provide appellant with a check for $16,000, the difference between the total contract price for the house and the $39,000 which appellant was loaning appellees, so that appellant would have a building fund equal to the total contract price which it could administer.

In negotiating the mortgage, appellees were informed that for construction contracts appellant utilized a voucher system to administer the building fund. Appellees requested that they be permitted to participate in the payment system and be required to co-sign the vouchers with appellant to ensure their authorization for payment and to ensure notice of when payments were being made and for how much. Appellant, however, told appellees that such a procedure was contrary to the appellant’s policy and that appellant was expert in the disbursement of construction fund money.

After construction of the house began, the contractor submitted to the appellant and received payment for approximately fifty vouchers of which appellant allowed appellees to approve only four. Under the voucher system utilized by appellant, the vouchers, submitted by the contractor, indicated what work was performed or materials purchased, where the work was performed and to whom the check was to be made payable. The vouchers also showed the total contract price, the amount paid to date, the amount requested by the vouchers and the balance remaining on the contract price. The invoices of materialmen and subcontractors were attached to only seven of the vouchers. Each of the vouchers indicated that the work had been inspected and approved. But appellant’s inspectors, one of whom was on appellant’s Board of Directors, at best only inspected the site to see if the work claimed was done. The inspectors never saw the schedule of operations, and were unaware of whether the amount on the voucher was within the amount used to arrive at the total contract price, or whether the labor listed on the voucher was an item even included on the schedule of operations and therefore contemplated by the parties in reaching the total contract price. Furthermore, before checks were issued by appellant, no one employed by appellant verified the vouchers with the schedule of operations and no one compared the vouchers to the invoices which were attached to them.

The evidence shows that amounts were disbursed under this voucher system for labor or materials in excess of the amounts listed on the schedule of operations which was used to calculate the total contract price. For example, the appellant paid $11,096.28 for lumber which is listed on the schedule of operations as costing $7,000; appellant paid $1,030 for excavation which is listed on the schedule of operations as costing $180; and appellant paid $790 for concrete footers which are listed on the schedule of operations as costing $350. The record also shows that payments were made for labor and materials which were not included at all on the schedule of operations such as aluminum windows ($1,780) and a fiberglass shower ($150). Finally, the record shows that some of the work for which payment was made was done on another job. Attached to voucher # 13 which authorized payment of $688 for grading and backfill was an invoice from the subcontractor showing that at least $112 of the $688 was for work performed at the contractor’s own house which was being constructed nearby; voucher # 8 which requested payment of $4,600 for a sewer system ($1,600 over the cost listed on the schedule of operations) had an invoice from a subcontractor attached to it which indicated that $1,620 of the amount vouchered was for an old bill to the contractor; and voucher #28 which was paid in full ($1,620) had an invoice attached to it which specifically stated that at least $450 of the total bill was for work done at the contractor’s own house.

By the time appellees considered the contractor to be in breach of the contract due to failure to complete the house timely and requested that appellant stop making any payments to the contractor whom appellees were discharging, the house was only 40% completed. Appellees learned, however, that approximately 90% of the funds in appellant’s possession had been disbursed. ($50,000 of the $55,000.) Therefore, appellees sued appellant, in both assumpsit and trespass, claiming that money had been paid by appellant for work which was never performed at their house, for materials not used at their house, and for work and materials which were not included on the schedule of operations and which were in excess of the amounts listed on the schedule of operations.

The jury returned a verdict for appellees in the amount of $23,283.67, which sum was reduced by the trial court to $20,928.56 (which included interest in the amount of $5,191.56). The trial court computed this figure by remitting the verdict to allow as damages only those sums which appellant had disbursed in excess of the amount provided on the schedule of operations, for items not included on the schedule of operations, or for labor or materials which the evidence showed were not provided for the construction of appellees’ house but for some other project. Appellees praeciped for judgment in the amount of $23,916.72 which was entered. Appellant filed a petition to strike the judgment, but before disposition of the petition, it filed the instant appeal.

I.

The primary issue raised in this case is one of first impression in this Commonwealth: what is the duty of the mortgagee to the mortgagor with regard to disbursement of a construction fund comprised of both the proceeds of a mortgage and cash belonging to the mortgagor when the mortgagee exercises exclusive control over the fund. Appellant argues that it owed the mortgagor no duty with regard to the disbursement of the funds, that the agreement among the parties included a clause specifically relieving appellant from all liability to either the mortgagor or the contractor, and that even if it did owe appellees a duty, there was no evidence indicating the standard of care by which it was required to exercise that duty. Appellant also disputes that it had exclusive control of the construction fund.

A.

Initially, we must address appellant’s contention that it did not exercise exclusive control over the disbursement of the funds. The evidence demonstrates that appellant denied appellees’ request to have the right to co-sign all vouchers submitted by the contractor. The evidence also shows that of approximately fifty vouchers paid by appellant, all but four were paid without any notice to appellees of the materials or labor covered by the vouchers or the amount being disbursed. The mere fact that appellant contacted appellees with regard to payment of four of the vouchers and agreed to cease all payments after the contractor had allegedly breached the agreement, does not disturb the exclusivity of appellant’s control of disbursement of the fund. At all times appellant had absolute authority to decide who would sign the vouchers, and appellant never believed itself to be legally obligated to obtain the mortgagors’ signatures on the vouchers. Appellant chose to let appellees sign four of the vouchers. The appellant’s power to choose which vouchers it wanted appellees to approve before payment evidences the absolute control appellant had. Appellant was the party who disbursed the money, appellant was the party who decided which vouchers it would allow appellees to co-sign, and appellant was the party who determined when and how much information it would provide appellees about the vouchers. Therefore, appellant exercised exclusive control.

B.

No court of this Commonwealth has addressed the issue of the duty of a mortgagee who exercises exclusive control of a construction fund toward the mortgagor. When the consideration for a mortgage is a loan by the mortgagee to the mortgagor, the loan funds must actually come into the hands of the mortgagor or his agent absent some other arrangement between the parties. 59 C.J.S. § 297. Thus where the mortgagee retains possession of the mortgage funds, courts in other jurisdictions have found the mortgagee liable for improper disbursement either on the theory that there was an express contractual agreement governing the distribution of the proceeds or, where there is no express agreement, on the theory that the mortgagee became the agent of the mortgagor.

In Goodner v. Lawson, 33 Tenn.App. 676, 232 S.W.2d 587 (1950), the court considered the relationship between a mortgagee and a mortgagor where the mortgagee retained the loan proceeds and assumed the responsibility for disbursing them. The court held that the relationship of the parties remained that of a borrower and a lender and did not become that of a principal and agent because each party had independent and distinct interests. Therefore, in the absence of an express agreement by which the lender undertook certain obligations, there would be no liability. The only responsibility on the lender which arose out of the relationship between the parties was that the mortgagee had to account to the mortgagor for the distribution of the proceeds.

In Falls Lumber Company v. Heman, 114 Ohio App. 262, 181 N.E.2d 713 (1961) and Prudential Insurance Company of America v. Executive Estates, 174 Ind.App. 674, 369 N.E.2d 1117 (1977), the courts discussed the responsibility of a mortgagee to a mortgagor as stemming from both an express agreement and a principal/agent relationship. In Falls Lumber, the mortgagee agreed to loan the mortgagors part of the money to purchase some land and to have a house constructed on it. The construction company required the mortgagors to secure an additional sum to insure payment for the house and the mortgagee required the mortgagors to deposit this additional security with it in escrow. The mortgagee told the mortgagors that they “would take care of things.” After the house was completed and all the money had been disbursed by the mortgagee, mechanics liens were filed against the property. The court concluded that there was an oral agency contract: “the advance of funds by the Bank was a construction mortgage loan, and such Bank assured Mr. and Mrs. Heman that they would take care of all matters respecting the proper disbursement of the funds, so as to protect Mr. and Mrs. Heman from any claims which would cause them to pay more for their home than the amount agreed upon by the parties.” Id., at 715. The court compared the duty of the Bank in Falls Lumber to that of a trustee who is to hold and disburse funds of the trust estate. It held that the Bank had a duty to use reasonable care to see that material-men and sub-contractors were paid by the contractor. The failure to do so resulted in the Bank subjecting itself to an action in tort for the loss which was sustained.

In Prudential, the court found the mortgagee liable to the mortgagors for mechanics liens because of an express agreement and the principal/agent relationship of the parties. The court stated, “If the mortgagor is denied actual possession of the mortgage proceeds, it would appear the mortgagee has kept them to disburse himself under a special agreement, or has placed himself in a position of trust in the absence of an agreement.” Prudential Insurance Company of America v. Executive Estates, 369 N.E.2d at 1124. The court found an express agreement that the mortgagee would be the mortgagors’ agent based on the fact that when the mortgagors expressed concern about mechanics liens which had been filed, the mortgagee reassured them that “everything would be taken care of” at the closing and the mortgagee provided further assurances that it would get the performance bond release. The court also found that the mere relationship of the parties as mortgagors and mortgagee created a duty:

“a mortgagee-lender who insists on controlling disbursement of the loan proceeds in order to protect its own interests (mortgage lien), deprives the mortgagor of possession of the loan proceeds for which he has bargained, and in doing so must equitably be considered as the mortgagor’s agent saddled with a duty to use reasonable care to protect the principal’s interests.” Id., at 1128. Two other courts have found a duty on the mortgagee

arising solely out of the principal/agent relationship of the parties. In M.S.M. Corporation v. Knutson Company, 283 Minn. 527, 167 N.W.2d 66 (1969) the court stated, “When a mortgagee undertakes to disburse funds for a mortgagor under a construction contract, a fiduciary relationship arises.” Id., at 68. And in Bollinger v. Livingston State Bank and Trust Co., La.App. 187 So.2d 784, 787 (1966) the court stated:

Unquestionably the bank owed plaintiff a duty in this case. The legal relations existing between plaintiff and the bank were created by the delivery of the collateral mortgage note and building contract to the bank and by the bank’s undertaking to advance money and supervise construction as to quality and quantity as the agent of plaintiff. The duty which the bank owed to plaintiff was that of a fiduciary and agent, for this is the nature of the relationship created between them.

Considering the instant case in light of the analysis adopted by the courts in the aforementioned cases, we conclude that the relationship between the appellant and appellees was more than just that of a. lender and borrower. Appellant not only retained the proceeds of the construction loan to distribute, but, as in Falls Lumber, also demanded that appellees provide it with the balance of the total contract price. Furthermore, appellant not only refused to allow appellees any control over the distribution or even to provide any notice of how the money was being distributed, but also claimed it was expert in distributing construction funds. Under Pennsylvania law, an agency relationship arises whenever a person authorizes another expressly or by implication to act as his agent. Falconer v. Mazess, 403 Pa. 165, 168 A.2d 558 (1961). On the facts of this case, we find that appellant’s insistence that appellees rely on its experience in disbursing construction funds by retaining the loan proceeds and demanding appellees’ additional $16,000 contribution to the construction fund equitably requires us to hold that the parties’ relationship, which was imposed by appellant, was an implied agency. Therefore, appellant owed appellees the duty of an agent in disbursing the construction fund.

The duty which appellant owed appellees in this case and the circumstances for imposing that duty are distinguishable from the facts in the cases relied upon by appellant and the duties sought to be imposed in those cases. The appellant relies on Henry v. First Federal Savings and Loan Association of Greene County, 313 Pa.Super. 128, 459 A.2d 772 (1983), DiAndrea v. Reliance Savings and Loan Association, 310 Pa.Super. 537, 456 A.2d 1066 (1983), Goodman v. Pate Construction, Inc., 305 Pa.Super. 147, 451 A.2d 464 (1982) and Federal Land Bank of Baltimore v. Fetner, 269 Pa.Super. 455, 410 A.2d 344 (1979). In none of these cases did the mortgagee have exclusive control of the construction funds, in none did the mortgagee hold itself out to be an expert, and in none was the duty sought to be imposed the same as the duty in this case.

In Henry, DiAndrea and Goodman, the mortgagors and the mortgagees (who did not claim to be experts in disbursement of construction funds) jointly participated in disbursement of the construction fund. Also in these three cases, the duty sought to be imposed was the duty to inspect for quality of workmanship because after some of the construction was completed, the owners, in each case, allegedly found defects in the construction. In the case before us, however, appellees did not claim that the quality of work was inferior. Rather they claimed that payments were made for work or materials specifically itemized on the vouchers as not relating to appellee’s construction project and for work and materials not contemplated by the construction contract and in excess of the amount anticipated by the parties. Therefore, appellees in this case are not attempting to impose on the mortgagee the duty to inspect for the quality of work performed. Rather, they seek to impose on the mortgagee, who alone knew for what the funds were being distributed, the duty to ascertain prior to disbursing the contract funds that the labor and materials included on the vouchers were items the obligation for payment of which appellees had contracted and established the construction fund. This duty is also entirely different from the duty to inspect the title which the court refused to impose on the mortgagee in Fetner. Because of the multiple differences between the cases relied upon by appellant and the facts in this case, we find the cases cited by appellant not to be controlling or persuasive as to the mortgagee’s duty arising out of the agency relationship existing in this case.

Under Pennsylvania law, the duty of an agent to his principal is one of loyalty in all matters affecting the subject of his agency, and “the agent must act with the utmost good faith in the furtherance and advancement of the interests of his principal.” Sylvester v. Beck, 406 Pa. 607, 178 A.2d 755 (1962). This duty is the same as that of a fiduciary which has been described as the duty to act for the benefit of another as to matters within the scope of the relation. Restatement of Trusts, 2d, § 2. Fiduciary relations include, among others, principal and agent. Id., comment (b). Because the relationship between the parties in this case was an agency relationship, appellant owed appellees a fiduciary duty and its conduct must be measured against the standard of care owed by a fiduciary.

The standard of care imposed on the fiduciary depends on whether or not the fiduciary is or claims to be an expert in the area to which his fiduciary duty relates. When the fiduciary either has or procures his appointment by asserting that he has skill beyond that of the ordinary prudent person, he will be judged by the level of skill that he has or that he claims to have, whichever is higher. In re Estate of Killey 457 Pa. 474, 326 A.2d 372 (1974); Estate of Stetson, 463 Pa. 64, 345 A.2d 679 (1975); In re Estate of Lychos, 323 Pa.Super. 74, 470 A.2d 136 (1983).

In this case, appellant represented to appellees that it was expert in the disbursement of construction funds, and by virtue of this assertion it obtained exclusive control over not only the mortgaged funds, but also over appellees cash savings which were to be used to pay for the construction. We hold that where the mortgagee obtains exclusive control of the mortgage fund as well as other funds of the mortgagors which funds are to be distributed for payment of labor and material used in the construction of the building for which the mortgage was obtained, and when the exclusive control of the fund is obtained because the mortgagee represents itself to be expert in the distribution of such funds, the mortgagee will be held to the standard of care of an expert.

Although the appellant was not judged by the standard of care of an expert, appellant’s conduct was found to be wanting even when judged by a lesser standard. The trial court charged the jury that appellee had the duty to “use due care to see that the disbursements [were] carried out in a reasonable and prudent manner. This obligation carries with it the burden of taking reasonable steps to assure that such payments as are made to the contractor are warranted.” (T.T. at 760.) Therefore the jury was instructed to apply only the reasonable person standard to appellant’s conduct. However, even though the trial court did not instruct the jury to apply the higher standard of an expert, the higher standard encompasses the reasonable person standard which was applied by the jury. Because we find that the evidence was sufficient to support the jury’s finding that appellant failed to meet the reasonable person standard, the evidence was necessarily more than sufficient to establish appellant’s breach of the higher expert fiduciary’s standard of care which is the standard by which appellant’s conduct must be judged.

C.

The fiduciary duty imposed by the trial court was that appellant was to disburse funds only according to the schedule of operations. Although the trial court relied strictly on the schedule of operations as establishing the standard by which appellant was to make disbursements, we do not agree. The schedule of operations was a part of the contract in this case and must be construed as a guideline for the progress payments which should have been made. Where as here appellant repeatedly disbursed funds greatly in excess of the amounts listed in the schedule of operations and for items not included on the schedule, the payments contrary to the schedule of operations are indicative of a breach of appellant’s fiduciary duty. Appellant should have become increasingly aware that the payments unrelated to the schedule of operations were going to result in the house not being completed when the full contract price had been paid. However, because some small deviation from the schedule of operations or one which is counterbalanced could have occurred without affecting the completion of the house for the contract price, we are reluctant to determine that the standard of appellant’s duty was to disburse funds solely in amounts precisely equal to those on the schedule of operations in the absence of an express agreement to do so. Because the parties did not expressly agree to disburse funds in strict compliance with the schedule of operations but only as work progressed, the schedule of operations is not the appropriate standard of appellant’s duty.

To determine the extent of appellant’s fiduciary duty in this case, we must determine what the rights and responsibilities of appellees were. Appellees contracted to pay a total of $55,000 for a completed house, and they further agreed to pay out the $55,000 as work progressed. The vague phrase “as work progressed” must be interpreted consistently with the other provisions in the contract, including the schedule of operations and the total contract price. Thus periodic payments for partial completion had to be proportional to the full payment for final completion. Appellant therefore, had the duty to disburse funds as work progressed but only in proportion to the total contract price. This duty is comparable to that imposed by the court in Falls Lumber to protect the mortgagors from having to pay more for their house than the amount agreed upon by the parties.

It is clear that appellant breached this duty. At the time the contractor was discharged, appellant had disbursed approximately 90% of the building fund. Appellees testified that at that time the house was only 40% completed, and the evidence shows that nearly $16,000 had been disbursed by appellant for work which was not performed on appellees’ house and in amounts in excess of those included on the schedule of operations. Appellant did not disburse funds as work contractually agreed upon by appellees progressed because if it had, the house would have been close to 90% completed when 90% of the building fund had been disbursed.

Because appellant’s duty was to make disbursements only as work contractually agreed upon progressed, and to pay a total of only $55,000 for the completed house, the measure of the maximum damages for appellant’s breach of its fiduciary duty is the difference between the sum actually disbursed and the value of the house at the time disbursements ceased. The value of the partially completed house, however, must be calculated in terms of the total price contractually agreed upon, taking into consideration any extra work authorized by the mortgagors.

In this case, appellees testified that the house was 40% completed when disbursements ceased. Therefore, the value of the house at that time must be computed by multiplying 40% by the total contract price of $55,000. This sum, $22,000, represents the total amount which the appellant was authorized to disburse. Therefore, the measure of the damages from appellant’s breach can be ascertained by subtracting the dollar value of the partially completed house from the total actually disbursed. In this case, because appellant disbursed $50,000 for a partially completed house whose value is only $22,000, the maximum damages sustained is $28,000, a sum which encompasses both the verdict of the jury and the verdict as remitted by the trial court and accepted by the appellees.

D.

Appellant argues that it was contractually relieved from any liability with regard to disbursing the funds because of the clauses in the building agreement executed by Eastern Regional Builders and the mortgagors at the settlement which recited:

It is expressly covenanted and agreed that Malvern Federal Savings and Loan Asociation may exercise all rights, powers, privileges and discretions conferred upon the owner by the provisions of this agreement or otherwise, without liability to the owner or the contractor for actions so authorized and taken in good faith.
[Schedule “B”] It is distinctly understood and agreed by and between the parties to this contract (said owner and said contractor) ... that the said Association (which is lending money on the faith and credit of this contract) may, in its discretion, when and as the same may be deemed advisable by it, change or alter the method or basis of the payments as hereinabove mentioned and set forth, and that by reason of its so doing, the said Association shall not incur liability of any kind whatsoever to the said owner, contractor and/or surety or sureties; nor shall said owner, contractor and/or sureties be relieved or discharged from any liability, duty or responsibility, owed to Association or any other party in interest.

These exculpatory clauses are unenforceable by appellant in this case because appellant was not a party to the building contract which contains the exculpatory clauses and no consideration was given for the exculpatory clauses, and because the building contract which contains the exculpatory clauses was not the contract under which the parties were proceeding.

The building agreement which contains the exculpatory clauses, although drafted on a form provided by appellant, does not list appellant as a party to the contract and was not executed by appellant. The building agreement was not the contract by which appellant promised appellees that it would disburse the construction funds, but rather it was a contract in which the builder promised to construct a house, and, in exchange for the builder’s promise, appellees promised to pay $55,000. Not only was appellant not a party to the building agreement, but no consideration was given by appellant nor by either party to the contract (under a third party beneficiary theory) for the exculpatory clauses. Yet consideration is an essential ingredient of a contract, and a promise unsupported by consideration is unenforceable. Stelmack v. Glen Alden Coal Co., 339 Pa. 410, 14 A.2d 127 (1940); 17 Am.Jur.2d Contract § 86. Because appellant was not a party to the building agreement and because there was no consideration for the exculpatory clauses, the clauses are unenforceable.

The exculpatory clauses are also unenforceable because they are contained in a contract under which there was never any performance. The building contract containing the exculpatory clauses was made between appellees and Eastern Regional Builders, and it is pursuant to appellees’ rights under that particular contract that appellant purportedly obtained the right to exercise all the rights of appellees and to alter the method or basis of payment without incurring any liability. However, Eastern Regional Builders performed no work under the contract, and inasmuch as appellant paid money to Donovan individually and to subcontractors or materialmen for work performed or materials supplied under the replacement contract between Donovan and appellees, which replacement contract was maintained in appellant’s file and which was admitted into evidence in this case, any steps taken by appellant with regard to disbursement of the funds for work performed by a builder was done pursuant to appellees obligations under the replacement contract. The building contract between Eastern Regional Builders and appellees was not the contract under which the parties were acting, and therefore, because appellant disbursed the construction funds on behalf of appellees as was their obligation under the replacement contract and not pursuant to the first building contract with the exculpatory clauses, it is clear that the terms of the first building agreement are inapplicable. Therefore, the exculpatory clauses contained in that agreement are not available as a defense.

Even if we were to find that the exculpatory clauses were applicable in this case and if there were consideration for the clauses, we would nevertheless find them to be invalid. To be valid an exculpatory clause must first satisfy three conditions: 1) it must not contravene any policy of the law (i.e., it cannot be a matter of interest to the public or the state); 2) the contract must relate solely to the private affairs of the parties, and 3) each party must be a free bargaining agent (i.e., it cannot be a contract of adhesion). Employers Liability Assurance Corporation, Ltd. v. Greenville Business Men’s Association, 423 Pa. 288, 224 A.2d 620 (1966). If the clause satisfies these conditions, before it will be given effect it must meet certain standards: 1) the contract must be construed strictly; 2) the contract must deliniate the intention of the parties with the greatest particularity, and must be written in clear, direct, and unmistakeable language; 3) the contract must be construed against the party seeking to be protected by it; and 4) the burden to establish immunity from liability rests on the party asserting the immunity. Id., 423 Pa. at 292, 224 A.2d at 623; Richard’s 5 & 10, Inc. v. Brooks Harvey Realty Investors, 264 Pa.Super. 384, 399 A.2d 1103 (1979); Loyal Christian Benefit Assoc. v. Bender, 342 Pa.Super. 614, 493 A.2d 760 (1985).

The exculpatory clauses in this case were a contract of adhesion and therefore failed to satisfy one of the three requirements for establishing the validity of an exculpatory clause. Appellees were first presented with the contract containing the exculpatory clauses at the settlement in May, and they needed to close on the property as soon as possible so that the house could be built and occupied before school started in the fall. Although there were other lending institutions in the area from whom appellees may have been able to obtain a mortgage and who may not have attempted to preclude themselves from all liability by requiring the builder and the mortgagees to include in their contract a clause exculpating the mortgagee, there was no evidence that appellees would have been given a mortgage by any other financial institution or that exculpatory clauses would not have been demanded by other financial institutions. Therefore, appellees were in a position of accepting the building agreement with the exculpatory clauses or else not closing the transaction. Because rejecting the transaction entirely was the only option available to appellees other than accepting the contract with the exculpatory clauses, the contract was one of adhesion, and under Employers Liability Assurance Corp. Ltd. v. Greenville Business Men’s Association, 423 Pa. 288, 224 A.2d 620 (1966) the clauses are invalid.

The clauses also failed to satisfy the specificity requirement necessary for giving effect to exculpatory clauses. The exculpatory clauses in this case do not use language which clearly and unmistakably expresses the intention that appellant would be relieved of the liability of an expert construction fund disburser. Paragraph 4 of the building agreement simply purports to give appellant the right to act as the owner of the property but without liability to the owner. This language is general and vague and does not explicitly describe which rights, powers, and privileges of the owner it may exercise nor from what specific duties it is being relieved of liability. Schedule “B” is equally indirect. Although it purports to relieve the appellant from liability for changing the method or basis of payment, it does not specify the type of liability from which it is being relieved, but purports to relieve appellant from liability of “any kind whatsoever.” Although such language leaves little doubt that appellant intended to be excluded from liability, neither appellees nor the contractor were provided with notice of the specific nature of the liability and therefore, they could not appreciate the extent of the appellant’s exclusion from liability to which, by signing the contract, they purportedly agreed. This is one of the reasons that exculpatory clauses must be written with the greatest particularity. When they are not particular, as here, they cannot be given effect. Employers Liability, Id. Therefore, the exculpatory clauses in this case are ineffective.

II.

Appellant argues that “the trial was so infested with erroneous evidentiary rulings and prejudicial conduct by counsel for the plaintiffs that a fair trial was wholely lacking and the defendant is entitled to a new trial.” Appellant’s brief at 33. To support this argument, appellant sets forth a potpourri of complaints about the behavior of counsel, statements of the trial court, and evidentiary rulings. For example, appellant complains about the order of proof, the admission of subcontractor’s bills, the implication of appellant’s post-loan changes in administrative procedures for its construction loans, the implication of other similar law suits against appellant, various improprieties in the closing remarks of appellees’ counsel, the court’s ruling on the use of pre-trial depositions, lodging appellant’s file with the clerk of courts, admonishment and chastisement of counsel by the court, admission of plaintiffs’ exhibits after defendant rested, the evidence sent out with the jury, the manner of reviewing the points for charge, denial of appellant’s request for special interrogatories, the court’s statement referring to one of its prior experiences, the implication of numerous complaints about its voucher system, authentication of invoices attached to the vouchers, the court’s refusal to allow a letter from appellees’ former counsel to be read, testimony regarding direct payments to an architect, and testimony concerning appellees’ referral to appellant by the real estate agent.

The trial court has addressed the issues related to the chastisement of counsel and the authenticity of the invoices and has properly decided them. (Trial court opinion, March 28, 1985, pp. 15-18.) We have carefully reviewed the record with regard to each of the other errors alleged and find no prejudicial error. We are mindful that the trial, which was vigorously contested by both parties, lasted an entire week and produced over 800 pages of testimony. Although not every comment, tactic or ruling made by both counsel and the court may have been prudent, not every unwise comment requires a new trial. As stated by the Pennsylvania Supreme Court, “if a slight deviation from technical procedure occurred, the deviation did not take the trial off course to such an extent as to warrant a new trial.” Barb-Lee Mobile Frame Company v. Hoot, 416 Pa. 222, 226, 206 A.2d 59, 61 (1965). Viewed individually and collectively, the errors alleged in this case do not necessitate a new trial.

III.

Appellant’s final argument is that the judgment should be stricken because it is not in conformity with the order of court which remitted the verdict. This issue was not raised in post-trial motions because the judgment had not yet been entered. Prior to taking the instant appeal, appellant did file with the trial court a motion to strike the judgment. Before the court ruled on the motion, however, the instant appeal was filed. Therefore, the trial court has not yet ruled on the motion. Although we could remand for the trial court’s consideration of this issue, we find it unnecessary to do so.

The trial court’s order disposing of the post-trial motions remitted the jury’s verdict to $15,737.00 with six per cent interest from February 1, 1978 to the date of the verdict, September 19, 1983 for a total verdict of $20,928.56. The computation of the interest was commensurate with that which the court had charged the jury it could include in its verdict. When judgment was entered on the verdict, interest from the date of verdict was added in the amount of $1,988.16 for a total judgment of $22,916.72. The general rule is that a party is entitled to interest on a judgment from the date of verdict. 42 Pa.C.S. § 8101; Incollingo v. Ewing, 474 Pa. 527, 379 A.2d 79 (1977); Sands v. Pennsylvania Insurance Guaranty Association, 283 Pa.Super. 217, 423 A.2d 1224 (1980). Therefore, even though the judgment appears to be for an amount exceeding that which the trial court authorized by its remittitur, it actually is for the amount authorized by the trial court plus lawfully calculated interest thereon. Therefore, there is no merit to appellant’s motion to strike.

Judgment affirmed.

KELLY, J., concurs in the result.

      . Between the date of settlement and mid-July, 1977, Eastern Regional Builders suffered business difficulties and dissolved. Edward Donovan, individually, then contracted with appellees to perform the same construction for the same price. Before construction was commenced in mid to late July, Donovan and appellees executed a new building contract, a copy of which was placed in appellant’s file and labelled "replacement contract.” Unlike the building agreement prepared on appellant’s form and executed at the settlement, the replacement contract, drafted by Donovan, made no references to appellant and included no clauses purporting to limit appellant’s liability.

      . Although appellant challenged the propriety of the computation of interest in its post-trial motions, it has not further pursued the issue either in the motion to strike or on appeal.


source: Caselaw Access Project

author: WIEAND, Judge: BECK, Judge,

license: Public Domain

text:
    517 A.2d 559
    COMMONWEALTH of Pennsylvania, Appellant, v. Michael William HENRY, Appellee.
    Superior Court of Pennsylvania.
    Argued June 25, 1986.
    Filed Nov. 3, 1986.

      James M. Schall, Assistant District Attorney, McConnellsburg, for Com., appellant.
    Jill A. McCracken, Chambersburg, for appellee.

      Before WIEAND, BECK and WATKINS, JJ.
   WIEAND, Judge:

Where a police officer has stopped a vehicle for speeding and has observed marijuana in a box which he has seized and opened upon suspicion that the motorist was attempting to remove a gun, does the right to examine the contents of the box continue after the police officer has arrested the motorist and placed him securely in the police vehicle? The trial court held that the right to conduct a warrantless examination of the contents of the box terminated with the motorist’s arrest and, therefore, suppressed additional contraband discovered during a warrantless examination of the contents conducted by the arresting officer immediately after the arrestee had been secured. The Commonwealth appealed. We reverse.

On June 25, 1985, Trooper Daryl Heckman stopped a vehicle being driven by Michael William Henry, a California resident, at an excessive speed on Interstate Route 70 in Fulton County. After a citation had been issued, Henry offered to pay the fine in the manner permitted by 75 Pa.C.S. § 6305. Henry exited his vehicle, walked around to the right rear door and retrieved a metal box from the rear floor of the car. Heckman initially assumed that Henry intended to open the box for the purpose of obtaining money with which to pay the fine. Henry placed the box on the rear seat of the car, where he opened it while using his body to shield it from Heckman’s view. Heckman moved several times in order to obtain a view of Henry’s hands and the box, but Henry continuously moved to place his body between Heckman and the box. Heckman became suspicious. He could see neither Henry’s hands nor the box when he heard a metallic sound. Fearing that Henry might have a gun, Heckman grabbed Henry, pulled him from the car and pushed him against the open door of the car. At this point, while Heckman was still within arm’s reach of the box, he asked Henry if he had a gun. When Henry gave a negative response, Heckman flipped open the lid of the box. There he observed a baggie containing what appeared to be marijuana, a plastic bottle containing capsules, and money. Heckman thereupon handcuffed Henry and took him to the police vehicle. He then returned to Henry’s vehicle, retrieved the metal box, returned to the police vehicle, and there examined the contents of the box. He found numerous controlled substances and various drug paraphernalia. The money in the box was in excess of Five Thousand ($5,000.00) Dollars. A search warrant was obtained, and a search was made of the vehicle. The search of the vehicle disclosed a marijuana cigarette and additional drug paraphernalia.

Henry was charged with various drug offenses. He filed an omnibus pre-trial motion to suppress evidence, contending that Heckman’s opening of the box and the subsequent search of his vehicle had been in violation of the Fourth Amendment of the Constitution of the United States and Article I, Section 8 of the Pennsylvania Constitution. Following an evidentiary hearing, the court entered an order which suppressed all evidence seized by Trooper Heckman except the marijuana, capsules and money observed by Heckman when he initially flipped open the lid of the metal box in order to protect himself lest a gun be concealed therein. Heckman’s later examination of the box, the court held, was illegal because a warrant should have been obtained before further examination took place.

Appellee appears to concede that the initial opening of the box by Trooper Heckman was authorized as a self-protective frisk under Terry v. Ohio, 392 U.S. 1, 88 S.Ct. 1868, 20 L.Ed.2d 889 (1968). See also: Commonwealth v. Carter, 334 Pa.Super. 369, 483 A.2d 495 (1984). At that time, Heckman had reason to believe that a gun might be concealed in the box, the box was within Henry’s reach, and the search was limited to the extent necessary to discover dangerous weapons which constituted a potential threat to the trooper’s safety. As such, we have no reason to question the suppression court’s conclusion that Trooper Heck-man’s initial observation of contraband did not violate any constitutionally protected right of privacy. Because the box had been lawfully opened and found to contain illegal drugs, appellee no longer had a protected privacy interest with respect to the contraband initially observed by the officer. Therefore, Trooper Heckman could lawfully seize the same after appellant had been restrained. “[0]nce a container has been found to a certainty to contain illicit drugs, the contraband becomes like objects physically within the plain view of the police, and the claim to privacy is lost.” Illinois v. Andreas, 463 U.S. 765, 771-772, 103 S.Ct. 3319, 3324, 77 L.Ed.2d 1003, 1010 (1983) (footnote omitted).

However, we disagree with the trial court’s conclusion that the arresting officer, even though his initial opening of the box had been lawful, was precluded on constitutional grounds from making further examination of the box and its contents after the arrestee had been handcuffed and placed in the police vehicle. Our disagreement is compelled by the opinion of the United States Supreme Court in New York v. Belton, 453 U.S. 454, 101 S.Ct. 2860, 69 L.Ed.2d 768 (1981). There, a vehicle with four occupants had been stopped for speeding. After the vehicle had been stopped, the arresting officer discovered that none of the occupants owned the vehicle or were related to the owner. The officer also smelled burned marijuana and observed an envelope marked “Supergold” which he believed to be associated with marijuana. He directed the occupants to get out of the vehicle, placed them under arrest, patted them down and “split them up ... so they would not be in physical touching area of each other.” The officer then picked up from the floor of the car and opened the envelope which was suspected of containing marijuana. After his suspicions had been confirmed, the officer also searched the passenger area of the car, where he found a black leather jacket belonging to Belton. He unzipped a pocket of the jacket and there found cocaine. Belton was charged, tried and convicted for criminal possession of cocaine. The New York Court of Appeals reversed, holding that “[a] warrant-less search of the zippered pockets of an unaccessible jacket may not be upheld as a search incident to a lawful arrest where there is no longer any danger that the arrestee or a confederate might gain access to the article.” Id. at 456, 101 S.Ct. at 2862, 69 L.Ed.2d at 772. The Supreme Court of the United States granted certiorari to consider “the question of the proper scope of a search of the interior of an automobile incident to a lawful custodial arrest of its occupants.” Id. at 459, 101 S.Ct. at 2863, 69 L.Ed.2d at 774.

The Court held:

[W]hen a policeman has made a lawful custodial arrest of the occupant of an automobile, he may, as a contemporaneous incident of that arrest, search the passenger compartment of that automobile.
It follows from this conclusion that the police may also examine the contents of any containers found within the passenger compartment, for if the passenger compartment is within reach of the arrestee, so also will containers in it be within his reach. United States v. Robinson, supra. Draper v. United States, 358 U.S. 307, 3 L.Ed.2d 327, 79 S.Ct. 329 [(1959)]. Such a container may, of course, be searched whether it is open or closed, since the justification for the search is not that the arrestee has no privacy interest in the container, but that the lawful custodial arrest justifies the infringement of any privacy interest the arrestee may have.
____“A custodial arrest of a suspect based on probable cause is a reasonable intrusion under the Fourth Amendment: that intrusion being lawful, a search incident to the arrest requires no additional justification.” 414 U.S. 218 at 235, 94 S.Ct. 467, 476, 38 L.Ed.2d 427, 66 Ohio Ops 2d 202.

Id. at 460-461, 101 S.Ct. at 2864, 69 L.Ed.2d at 775-776.

Because Belton is factually similar to the instant case, we would normally deem it sufficient to cite the decision of the Supreme Court and rest there. However, the trial court’s suppression order was based on, and appellee relies upon, the decision of the Pennsylvania Supreme Court in Com monwealth v. Timko, 491 Pa. 32, 417 A.2d 620 (1980). Therefore, our analysis would not be complete without a review of Timko and its continuing effect, if any, on the law pertaining to searches and seizures involving automobiles and containers found therein.

In Timko, a policeman had stopped a motorist intending to cite him for reckless driving. When the officer approached the vehicle, the driver rolled up the window, locked the door and, using an obscenity, refused to exhibit his license and owner’s card. Additional officers were called to the scene and as one of them began to pry open the door with a tire iron, the defendant reached for a zippered brown valise in the back seat. Having observed boxes marked “shotgun shells” in the vehicle and suspecting that the defendant was reaching for a weapon, the officer smashed the vehicle’s window and unlocked the door. The defendant was then pulled from the vehicle and restrained. While this was transpiring, another officer retrieved the valise and searched it, discovering two packages of marijuana and a loaded revolver. The defendant filed a motion to suppress the contents of the valise. The motion was denied, and the defendant was convicted. On direct appeal from the judgment of sentence, the Supreme Court reversed and granted a new trial on grounds that the evidence found in the valise should have been suppressed. The court concluded that because the defendant had been handcuffed, and the bag had been under the exclusive control of the police at the time it was searched, the search could not be justified as incident to an arrest. The Court said:

A police officer may conduct a search of an arrestee’s person and the area within an arrestee’s immediate control as a matter of course because of the ever-present risk in an arrest situation that an arrestee may seek to use a weapon or to conceal or destroy evidence. United States v. Chadwick, 433 U.S. 1, 97 S.Ct. 2476, 53 L.Ed.2d 538 (1977); Chimel v. California, [395 U.S. 752, 89 S.Ct. 2034, 23 L.Ed.2d 685 (1969) ]. However,
“[o]nce law enforcement officers have reduced luggage or other personal property not immediately associated with the person of the arrestee to their exclusive control, and there is no longer any danger that the arrestee might gain access to the property to seize a weapon or destroy evidence, a search of that property is no longer an incident of the arrest.”
United States v. Chadwick, supra, 433 U.S. at 15, 97 S.Ct. at 2485[, 53 L.Ed.2d at 551]. In such a situation, absent exigent circumstances, a warrantless search of luggage or other personal property in which a person has a reasonable expectation of privacy is not permissible.

Commonwealth v. Timko, supra, 491 Pa. at 37-38, 417 A.2d at 622-623.

Timko was decided in 1980, a year before the decision of the United States Supreme Court in Belton. It was decided solely on the basis of the Fourth and Fourteenth Amendments of the United States Constitution. Article I, Section 8 of the Pennsylvania Constitution was neither referred to nor discussed. Even more specifically, the Pennsylvania Supreme Court’s decision was based upon an earlier decision of the United States Supreme Court in United States v. Chadwick, 433 U.S. 1, 97 S.Ct. 2476, 53 L.Ed.2d 538 (1977). Chadwick, however, was distinguished and severely limited to its own facts by the Supreme Court in Belton, where the Court said:

But [that decision did not involve] an arguably valid search incident to a lawful custodial arrest. As the Court pointed out in the Chadwick case: “Here the search was conducted more than an hour after federal agents had gained exclusive control of the footlocker and long after respondents were securely in custody; the search therefore cannot be viewed as incidental to the arrest or as justified by any other exigency.” 433 U.S. at 15, 97 S.Ct. 2476, 53 L.Ed.2d 538.

New York v. Belton, supra 453 U.S. at 461-462, 101 S.Ct. at 2865, 69 L.Ed.2d at 776. See also: Commonwealth v. Baker, 347 Pa.Super. 213, 500 A.2d 483 (1985) (questioning continued validity of Timko).

In the instant case, there is no question but that appellee was the subject of a lawful custodial arrest. The trooper’s search of the box, begun prior to arrest, was continued immediately after the custodial arrest had been completed and the arrestee detained. Under these circumstances, Belton teaches that the entire search of the box was an incident of the arrest. To the extent that the decision in Timko suggests otherwise, it is in conflict with Belton. Therefore, Timko can no longer be said to represent an accurate statement of federal constitutional principles.

Appellee argues that Timko should nevertheless be followed as determinative of the interpretation to be placed upon Article I, Section 8 of the Pennsylvania Constitution. We reject this argument. As we have already observed, the Timko court based its decision exclusively on federal constitutional grounds and did not attempt to apply state constitutional guarantees. Thus, Timko is not determinative of the state constitution’s applicability to searches which are incident to lawful arrest and are physically conducted or completed after an arrestee has been placed securely in police custody. It follows that the application of the Pennsylvania Constitution to such circumstances is still an open question. Therefore, we are free to conclude, as we do, that the preferable course is to follow the “bright line” test announced by the United States Supreme Court in New York v. Belton, supra. We adopt the Belton standard in the firm conviction that “ ‘[a] single, familiar standard is essential to guide police officers, who have only limited time and expertise to reflect on and balance the social and individual interests involved in the specific circumstances they confront.’ ” New York v. Belton, supra 453 U.S. at 458, 101 S.Ct. at 2863, 69 L.Ed.2d at 774, quoting Dunaway v. New York, 442 U.S. 200, 213-214, 99 S.Ct. 2248, 2257, 60 L.Ed.2d 824, 836 (1979) (footnotes omitted). “ 'A highly sophisticated set of rules, qualified by all sorts of ifs, ands, and buts and requiring the drawing of subtle nuances and hairline distinctions, may be the sort of heady stuff upon which the facile minds of lawyers and judges feed, but they may be “literally impossible of application by the officer in the field.” ’ ” New York v. Belton, supra at 458, 101 S.Ct. at 2863, 69 L.Ed.2d at 773-774, quoting LaFave, “Case by Case Adjudication” Versus “Standardized Procedures”: The Robinson Dilemma, 1974 S.Ct.Rev. 127, 141.

The importance of the Supreme Court’s admonition is vividly illustrated by the facts of the instant case. To hold, as appellee would have us do, that an initially valid warrant-less examination of the interior of the box seized from appellee’s vehicle could not be lawfully continued after appellee had been placed under arrest and restrained, is the type of legal legerdemain which frustrates law enforcement without correspondingly protecting any constitutionally guaranteed privacy interest of the arrestee. Therefore, we decline appellee’s invitation to depart from the “bright line” test adopted by the United States Supreme Court in New York v. Belton, supra, and to interpret the Pennsylvania Constitution in a more sophisticated manner with “subtle nuances and hairline distinctions” which are difficult, if not impossible, of application by the police officer in the field. We hold, rather, that a search incident to a lawful arrest requires no other justification in order to be valid under Article I, Section 8 of the Pennsylvania Constitution.

Reversed and remanded for further proceedings. Jurisdiction is not retained.

BECK, J., files a concurring opinion.

BECK, Judge,

concurring:

I concur. While the result is correct, this court is not the proper forum to reject a principle of law established by the Pennsylvania Supreme Court.

The majority correctly notes that Timko was decided on federal constitutional grounds. However, it is inescapable that our state Supreme Court decided Timko. If a retreat is to be sounded from Timko, the proper staging ground is in the state Supreme Court, even if Timko was decided solely on federal grounds.

I concur, nevertheless, because the search can be upheld on a plain view theory. See Commonwealth v. Fleck, 324 Pa.Super. 227, 233, 471 A.2d 547, 550 (1984); Commonwealth v. Martin, 252 Pa.Super. 265, 268, 381 A.2d 491, 492 (1977).

Accordingly, I concur.

      . 414 U.S. 218, 94 S.Ct. 467, 38 L.Ed.2d 427 (1973).

      . United States v. Robinson.


author: DEL SOLE, Judge:

text:
    517 A.2d 564
    John D. PAVLEK and Billie D. Pavlek, His Wife, Appellants, v. FORBES STEEL AND WIRE CORPORATION.
    Superior Court of Pennsylvania.
    Argued June 5, 1986.
    Filed Nov. 3, 1986.

      Patrick J. Shannon, Pittsburgh, for appellants.
    Charles Kirshner, Pittsburgh, for appellee.
    Before ROWLEY, DEL SOLE and CERCONE, JJ.
   DEL SOLE, Judge:

This is an appeal from an order of the trial court granting summary judgment in favor of the Appellee, Forbes Steel and Wire.

The Appellant was injured on the job at Forbes Steel and Wire plant in Canonsburg. His injury was sustained as a result of working on a defective machine which was manufactured by his employer, Forbes Steel and Wire. Mr. Pavlek applied for, and received, workers compensation benefits.

The instant case is a products liability action in which Mr. Pavlek has sought to recover damages from his employer who is also the manufacturer of the machine which caused his injury. The employer was granted summary judgment on the grounds of exclusivity of the workers compensation remedy. Mr. Pavlek filed this appeal, arguing that summary judgment was improper as a matter of law. He urges us to find that he has a cause of action against his employer in products liability, basing his argument on the dual capacity doctrine.

Under the dual capacity doctrine, an employer who is normally shielded from tort liability by the exclusive remedy of the workers compensation law may become liable in tort to his employee if he occupies, in addition to his capacity as employer, a second capacity that confers on him obligations independent of those imposed on him as employer. LARSON WORKMAN’S COMPENSATION LAW, § 72.80 (1976). As the Appellant points out in his brief, in some jurisdictions an employee is permitted to take a products liability action against his employer under the dual capacity doctrine. See, Annot., 23 A.L.R. 4th, 1151 (1983).

The Appellant cites Tatrai v. Presbyterian University Hospital, 497 Pa. 247, 439 A.2d 1162 (1982) for the proposition that he is entitled to recover in a tort action against his employer. In that case, Mrs. Tatrai was an operating room technician employed by Presbyterian Hospital. While on duty she became ill and was sent by her supervisor to the hospital’s emergency room where she suffered injuries when the x-ray table she was on collapsed. The Pennsylvania Supreme Court in that case found that workers compensation was not Mrs. Tatrai’s exclusive remedy because her presence in the emergency room was not in furtherance of the affairs of her employer and was not required by reason of her employment. The Court noted that there was no reason to distinguish Tatrai from any other member of the general public injured in the course of treatment. Tatrai, 497 Pa. at 255, 439 A.2d at 1166.

We would distinguish the facts in the instant appeal from the circumstances which allowed a tort action in the Tatrai case. Here, Mr. Pavlek was injured while operating a machine in furtherance of the affairs of his employer and there is no dispute that this activity was required by reason of his employment. See: Shelly v. Johns-Manville Corp., 798 F.2d 93 (3rd Cir.1986).

In the recent case of Budzichowski v. Bell Telephone Co., 503 Pa. 160, 469 A.2d 111 (1983), the Pennsylvania Supreme Court found workers compensation was the exclusive remedy for a worker who was injured on the job, and who subsequently attempted to recover from the Bell Telephone Dispensary physicians who negligently diagnosed and treated his work-related injuries. The Budzichowski Court applied a “but for” test in finding that workers compensation was Budzichowski’s exclusive remedy. That Court stated, “The treatment received by Appellant at the Bell dispensary was not available to the general public and would not have been available to Appellant but for his relationship with Bell.” Budzichowski, 503 Pa. at 168, 469 A.2d at 115.

Applying this test to the case before us, it is clear that but for his relationship with Forbes Steel and Wire, Mr. Pavlek would not have been injured. We find that workers compensation is Mr. Pavlek’s exclusive remedy and that summary judgment was properly granted in favor of Forbes Steel and Wire.

Order affirmed.


author: WICKERSHAM, Judge: WIEAND, Judge,

text:
    517 A.2d 960
    Linda R. SIPOWICZ, Appellant, v. Carl P. SIPOWICZ.
    Superior Court of Pennsylvania.
    Argued March 13, 1986.
    Filed Sept. 22, 1986.
    Reargument Denied Nov. 25, 1986.

      Justin K. McCarthy, Bethlehem, for appellant.
    Donald F. Spry, II, Bangor, for appellee.
    Before WICKERSHAM, WIEAND and POPOVICH, JJ.
   WICKERSHAM, Judge:

Linda R. Sipowicz appeals from the order of the Court of Common Pleas of Monroe County accepting the Master’s report, granting a divorce to appellant, dividing the marital property, and directing the payment of alimony and partial payment of counsel fees.

Appellant commenced this divorce action against appellee, Carl P. Sipowicz, on September 8, 1981. The matter was referred to a Master for the purpose of taking testimony and obtaining his recommendations concerning the divorce, and the equitable distribution, alimony, and other related claims. Following a series of hearings over the course of the following year, the Master filed his report and recommendations, to which both parties filed exceptions.

On July 24, 1985, the lower court granted the divorce, accepted the Master’s recommendations regarding the division of marital property, and directed that appellee pay appellant $220 per week in alimony for three years and $2500 towards appellant’s counsel fees. This order was vacated on August 23, 1985, and a new order entered which essentially restated the earlier order, with the exception that the alimony award of $220 per week was to be paid to appellant for three years or until her death, whichever occurred first. Judgment was entered on the latter order and this appeal timely followed.

Appellant raises the following ten issues for our consideration:

A. Whether the order directing the defendant to pay the plaintiff alimony in the amount of $220 per week for a period of three years was adequate in the light of her proven needs and the defendant’s ability to pay.
B. Whether the lower court erred in structuring its order of alimony so as to make it taxable to the plaintiff and deductible by the defendant, thus substantially reducing the amount thereof.
C. Whether the lower court erred in failing to consider and afford appropriate weight to the testimony of plaintiff’s expert witness, as to the value of her services as a homemaker over a period of twenty years in formulating its order regarding equitable distribution of marital property.
D. Whether the lower court properly considered and applied all of the criteria of Section 401 of the Divorce Code in formulating its order of equitable distribution which effectively awarded 32% of the marital estate to the plaintiff and 68% to the defendant.
E. Whether the lower court erred in assigning as the primary consideration in formulating its order of equitable distribution the defendant’s contribution in the acquisition of the marital property under Section 401(d)(7) of the Divorce Code and in failing to apply all relevant factors contained therein.
F. Whether the value of defendant’s medical degree and specialty as a Board certified orthopedic surgeon specifically fixed by the plaintiff’s expert constitutes “marital property” available for equitable distribution and in an award of alimony.
G. Whether the lower court erred in formulating the value of the defendant’s professional corporation, pension and profit sharing plans and in rejecting the testimony of plaintiff’s witnesses as not credible.
H. Whether the sum of $15,000.00 transferred by the defendant to his parents and sister in August, 1981, without actual consideration, constituted “marital property” available for equitable distribution.
I. Whether the lower court erred in failing to value the marital property at a date closest to the actual distribution thereof.
J. Whether the order of the lower court directing the defendant to pay the sum of $2,500 on account of plaintiff’s counsel fees and expenses which are presently in excess of $13,000 was adequate.

Brief for Appellant at 3-4.

Before we can address the merits of appellant's issues, however, “we note that it is incumbent upon this Court to determine whether an appeal is properly before it.” Parker v. MacDonald, 344 Pa.Super. 552, 557, 496 A.2d 1244, 1247 (1985); Huber v. Huber, 323 Pa.Super. 530, 470 A.2d 1385 (1984). Although not questioned by any party to the proceeding, our court may address issues of appealability and jurisdiction sua sponte. Wertz v. Anderson, 352 Pa.Super. 572, 508 A.2d 1218 (1986).

A review of the record reveals that the Master’s report was filed on January 2, 1985. While appellee’s exceptions were filed within the ten day limit specified by Pa.R.C.P. No. 1920.55, appellant’s exceptions were not filed until January 23, 1985, twenty-one (21) days after the Master’s report was filed.

Rule 1920.55 states, in pertinent part:

(a) Within ten days after notice of the filing of the master’s report has been mailed, exceptions may be filed by any party to the report or any part thereof, to rulings on objections to evidence, to statements or findings of fact, to conclusions of law, or to any other matters occurring during the hearing. Each exception shall set forth a separate objection precisely and without discussion. Matters not covered by exceptions are deemed waived unless, prior to entry of the final decree, leave is granted to file exceptions raising those matters.

From our examination of the record, it appears that permission for the late filing was neither requested nor granted by the lower court. While appellant made various statements concerning the late filing of the exceptions during oral argument to this court, the record does not reflect that a request was made to file exceptions later than the specified ten days. It is axiomatic that we, as an appellate court, cannot consider anything which is not part of the record. Spain v. Vicente, 315 Pa.Super. 135, 461 A.2d 833 (1983).

Despite the violation of Rule 1920.55(a), the lower court proceeded to address the issues raised by the exceptions on their merits. The question is, can we also ignore the untimeliness of the exceptions? Whether a waiver results when exceptions are untimely under Rule 1920.55(a) appears to be a question previously unanswered by our court. After careful consideration, we have concluded that such a waiver does result; otherwise the procedural time requirement of Rule 1920.55 would be rendered a functional nullity. Cf. Gainer v. Jones, 347 Pa.Super. 462, 500 A.2d 1148 (1985) (where motion for post-trial relief pursuant to Pa.R. C.P. No. 227.1 was filed more than ten days after finding of paternity, no claims of error were preserved for review).

Therefore, while the trial court saw fit to address appellant's exceptions on their merits, we conclude that appellant’s failure to file timely exceptions within ten days of the filing of the Master’s report resulted in a waiver of her claims of error in our court. See Commonwealth v. Gregory, 309 Pa.Super. 529, 455 A.2d 1210 (1983) (although untimely post-verdict motions were acted upon by the trial court on their merits, the issues raised in such motions were not preserved for appeal but were waived). Since no issues have been preserved for our review, we must affirm the order of the lower court.

Order affirmed.

WIEAND, J., files a concurring and dissenting opinion.

WIEAND, Judge,

concurring and dissenting:

I respectfully disagree with the majority’s holding that no issues have been preserved for appellate review. Although Pa.R.C.P. 1920.55, as the majority has observed, requires the filing of exceptions within ten days after notice has been mailed of the filing of the Master’s report, the rule also provides:

Matters not covered by exceptions are deemed waived unless, prior to entry of the final decree, leave is granted to file exceptions raising those matters.

In the instant case, appellant did file exceptions, but they were filed more than ten days after notice of the filing of the Master’s report had been mailed. Although appellant did not request and the trial court did not enter a written order allowing the late filing of exceptions, the fact is that the trial court accepted the exceptions, considered them, and resolved them before entering a decree distributing the parties’ marital property. For all practical purposes, therefore, the trial court did allow the late filing of appellant’s exceptions, albeit not expressly. The trial court thus had an opportunity to consider the issues raised in appellant’s

exceptions, and our ability to conduct a meaningful appellate review has not been impaired in any way. Under these circumstances, I would hold that compliance with the rule has been achieved and that the issues raised in appellant’s tardy exceptions have not been waived.

This Court has recently held that the recommendations of the Master are advisory only. Reed v. Reed, 354 Pa.Super. 284, 287, 511 A.2d 874, 876 (1986); McBride v. McBride, 335 Pa.Super. 296, 298, 484 A.2d 141, 142 (1984). A final decree must be entered by the trial court. Reed v. Reed, supra. In this case, the appeal was properly taken from the trial court’s final decree, and that decree is now before this Court for review. The issue raised sua sponte by the majority, therefore, is not jurisdictional. As such, it can be waived. In this case it has been waived, for appellee has failed to raise the issue in this Court. Therefore, I would conduct a review of the decree entered by the trial court and would consider the issues raised by the appellant in her exceptions and in the brief which she has filed in this Court.

Those issues, however, have been adequately discussed and correctly resolved in the opinion of the trial court. Because I find no abuse of discretion in the decree of the trial court, I would affirm.

      . During the course of the instant litigation, various orders were entered by the lower court requiring appellee to pay certain sums for alimony pendente lite, support for the parties three children, counsel fees and costs, as well as certain utility expenses.

      . This modification was made in response to a request by appellee in order to make the alimony payments deductible by him and taxable to appellant.


author: HOFFMAN, Judge:

text:
    517 A.2d 963
    PRINCETON SPORTSWEAR CORPORATION v. H & M ASSOCIATES, Sidney Becker and Leonard Becker, Appellants.
    Superior Court of Pennsylvania.
    Argued Feb. 1, 1984.
    Filed Sept. 29, 1986.
    Reargument Denied Dec. 8, 1986.

      Robert H. Malis, Philadelphia, for appellants.
    Lewis Kates, Philadelphia, for appellee.
    Before SPAETH, President Judge , and BECK and HOFFMAN, JJ.

       President Judge Spaeth did not participate in this decision as it was reached following his retirement.

   HOFFMAN, Judge:

This case is before us on remand from our Supreme Court for consideration of appellant-lessors’ remaining contentions. In our earlier decision, we held that an exculpatory clause in the parties’ lease agreement was valid and enforceable and, accordingly, reversed the trial court’s order entering judgment in favor of appellee-lessee and against appellants in the amount of $600,000.00. 335 Pa.Superior Ct. 381, 484 A.2d 185 (1984). In a plurality opinion, our Supreme Court reversed. 510 Pa. 189, 507 A.2d 339 (1985).

In the opinion announcing the judgment of the court, Justice Larsen, joined by Justices Flaherty and Zappala, agreed that the exculpatory clause was valid and enforceable, but found that we had disregarded the trial court’s findings that appellants’ conduct negligently caused appellee’s injury, findings making the clause inapplicable pursuant to an addendum to the lease. Chief Justice Nix, in a concurring opinion joined by Justice McDermott, found the exculpatory clause, which provided for a release from liability for damages or injury caused by fire, inapplicable on the basis that the fire was not the cause of appellee’s injury, but rather appellants’ refusal to respond after the fire. Justice Hutchinson, also concurring and joined by Justice Papadakos, found the exculpatory clause inapplicable on the ground that it referred only to the demised premises in which the fire did not occur. All the justices agreed, however, that we should consider the remaining contentions advanced by appellants.

The relevant procedural history and facts have already been set forth by both our Supreme Court and this Court, and we will not restate them here. See 510 Pa. at 190, 507 A.2d at 340 (opinion announcing the judgment of the court); 335 Pa.Superior Ct. at 383-85, 484 A.2d at 186-87. We will proceed, then, to address those of appellants’ remaining contentions that are properly before us. For the following reasons, we affirm in part and reverse in part the trial court’s order and remand this case for further proceedings consistent with this memorandum.

Appellants first contend that they are not proper parties to this action as agents of the lessor, Man-Tex Clothes, because they affirmatively disclosed its status as lessor to appellee. The trial court had “conclude[d] that under a theory of undisclosed agency [appellants] should be the parties held in the event that liability is established.” Lower Court Opinion at 6. We find it unnecessary to consider the court’s rationale in so ruling because we believe that the court’s result is correct on another ground. See Green v. Juneja, 337 Pa.Superior Ct. 460, 464 n. 5, 487 A.2d 36, 39 n. 5 (1985) (a reviewing court may affirm a decision of the trial court if the result is correct on any ground).

Appellee alleged in its complaint that appellants “were successors in interest to and assignees of any entity known as Man-Tex Clothes.” Appellee’s Complaint in Equity ¶ 4. Appellants contend that there is no evidence in the record of this fact. Brief for Appellants at 10-11; Supplemental Brief for Appellants at 11. We need only look to the lease itself, however, for such evidence. The December 20, 1977 rider to the lease states that it is “by and between H & M Associates (formerly Man-Tex Clothes), Lessor and [appellee].” (Emphasis added). This contention is, therefore, meritless.

Appellants next contend that, as a result of the damage to the complex caused by the March 30, 1978 fire, they had the option under paragraph 12(c) of the lease to terminate it or repair the premises. This claim is without merit. By its terms, paragraph 12 applies to destruction or damage of the demised premises. As Justice Hutchinson noted in his concurring opinion in this case, “[t]he lease seems to define the demised premises as ‘third floor in building No. 12, as outlined in the attached plan.’ ” 510 Pa. at 200, 507 A.2d at 344 (HUTCHINSON, J., concurring). After carefully reviewing the lease, we agree and, thus, because the fire did not occur in building No. 12, find that paragraph 12 is inapplicable to the instant case.

Appellants next contend that the trial court’s award of damages was erroneous as a matter of law, unsupported by credible evidence, and precluded by the terms of the lease. Specifically, appellants argue that appellee failed to prove the following elements of the award with reasonable certainty: (a) additional rent, (b) relocation expenses, and (c) lost profits. We find the award proper except to the extent that it includes $420,000.00 in damages for lost profits.

Appellants first argue that the trial court’s award of damages for additional rent ($127,470.60) and relocation expenses ($27,816.00) was improper because appellee would have incurred these expenses even if the breach of the lease had not occurred. They argue that appellee’s failure to exercise timely its three-year option, which term ran from July 1, 1975 to June 30, 1978, voided the subsequent five-year option and such failure converted appellee’s occupancy into a year-to-year tenancy. Appellants then conclude that, even if the fire had never taken place, appellee would have had to depart from the complex on June 20, 1978. Appellee, which had timely exercised the five-year option, contends, on the other hand, that the lease would have terminated on June 30, 1983, the end date of the five-year option.

We find appellee’s exercise of the five-year option valid. Appellants cite Young Men’s Christian Association v. Harbeson, 407 Pa. 489, 180 A.2d 916 (1962), for the proposition that the failure to exercise timely an earlier option terminates all subsequent options dependent upon the lessee’s tenancy under the prior option. Appellants read Harbeson too broadly. There, the plaintiff-lessee had the option to renew for two additional five-year terms, provided it gave at least ninety-days notice before the expiration of the term in question, and an option to purchase the let property for $6,500 at the end of the last additional term, provided it gave at least thirty days notice.

The lessee timely exercised the first option, but not the second. It later sought and was denied specific performance of the option to purchase. Our Supreme Court affirmed:

Thus, ... when the plaintiff failed to properly renew the lease, the defendant could have regarded it ended completely. Or he could have imposed any terms he saw fit to the plaintiff’s continuing possession. By remaining on the premises and paying rent after being informed by the defendant that he could no longer sell at $6500 and that this price was to be re-negotiated, the plaintiff impliedly accepted the indicated modification.

Id., 407 Pa. at 493, 180 A.2d at 918. The Court therefore reached “the inevitable conclusion that there came into being a mutually agreed-to modification of the original lease agreement, the modification being the elimination of the option to purchase at $6500.” Id., 407 Pa. at 494, 180 A.2d at 919.

Here, there was no modification or elimination of the five-year option contained in the original lease agreement. It is true that appellants informed appellee by letter dated April 30, 1975, that its rent would be increased by $250.00 per month. That increase, however, which brought appellee’s rent to $1250.00 per month, was consistent with the terms of the three-year option, which provided for a “minimum annual rental of $15,000.00 [$1,250 X 12].” Indeed, the letter itself contained the following language: “All other terms and conditions of the lease will remain the same.” N.T. May 7, 1981 at 12 (emphasis added). Furthermore, the option paragraph (30) gave appellee the right to “exercise either or both of the options____” (Emphasis added). Accordingly, we do not find that appellee’s untimely exercise of its first option prevented it from exercising the second.

Even if, as appellants argue, appellee’s untimely exercise of the three-year option meant that the parties were proceeding under paragraph 24 of the lease, which provided for a year-to-year tenancy that could be terminated by either party upon at least sixty days notice before the expiration of the then current term, see Brief for Appellants at 30, appellee’s exercise of the later option would remain unaffected. First, when appellants terminated the lease on April 4, 1978, they attempted to do so pursuant to paragraph 12(c), not paragraph 24. Second, the option was granted by appellants “[notwithstanding anything to the contrary” and provided that appellee could exercise it “by giving ... written notice thereof at least sixty days prior to the expiration of the term of the lease then in force.” (Emphasis added). Therefore, appellants’ rights under paragraph 24 could not supersede appellee’s right to exercise the five-year option; the option would otherwise be worthless.

Accordingly, when appellee was forced to relocate in October, 1978, its lease with appellant was still in effect, and would be in effect, until June 30, 1983. We therefore find that the trial court’s award of damages to appellee for additional rent and relocation expenses was proper under these well-established principles of law:

[A] lease is a contract. With some exceptions not material here, the usual contract measure of damages applies. Pugh v. Holmes, 253 Pa.Super. 76, 384 A.2d 1234 (1978), affirmed 486 Pa. 272, 405 A.2d 897 (1979). The damages recoverable for breach of contract are those which will, as nearly as possible, put the injured party in the same position it would have been in had the contract been fully performed. Maxwell v. Schaefer, 381 Pa. 13, 112 A.2d 69 (1955). They are measured by the difference between the rental in the breached lease and the rental the lessee would have to pay at current market for equivalent alternate premises during the remaining term of the lease, plus reasonable relocation expenses____

Princeton Sportswear Corp. v. H & M Associates, 510 Pa. at 201, 507 A.2d at 345 (1985) (HUTCHINSON, J., concurring).

Appellants also argue that the trial court erred in awarding appellee $420,000.00 in damages for lost profits because there was no evidence upon which the court could base its finding.

Appellee is entitled to recover “demonstrable profits lost because of business interruption resulting from the necessity of relocating.” Id., 510 Pa. at 201, 507 A.2d at 345. “It is well settled that lost income or profit is recoverable in an action for the destruction or interruption of an established business, whenever they are not merely speculative or conjectural.” Delahanty v. First Pennsylvania Bank, N.A., 318 Pa.Superior Ct. 90, 126, 464 A.2d 1243, 1261 (1983). Gross earnings or sales, of course, do not equal net income or lost profits. See, e.g., Longden v. Conestoga Transportation Co., 313 Pa. 561, 564-65, 169 A. 884, 885-86 (1934). Here, the testimony of appellee’s certified public accountant (CPA), upon which the trial court based its award of lost profits, allegedly established lost sales, not lost income. See, e.g., N.T. May 4, 1981 at 17, 27, 30. We must, therefore, reverse the trial court order to the extent that it includes $420,000.00 in damages for lost profits.

Appellee argues that “the additional $400,000.00 or more in sales would not have been offset by additional expenses.” Supplemental Brief for Appellee at 9. Such a claim is clearly erroneous in light of the testimony of appellee’s own witness, the CPA, who testified to lost profits of $74,000.00, see, e.g., N.T! May 4, 1981 at 17, 29, 36, testimony regrettably ignored by both parties in their briefs to this Court. Appellants argue that the projected lost sales figure is anomalous when compared with appellee’s sales in other years and that, in any event, viewing appellee’s profits on a historical basis, its lost profits could be no more than $7,248.32. Brief for Appellants at 30-39; Supplemental Brief for Appellants at 26-31. A plaintiff’s prior and subsequent years’ profits are admissible to estimate lost profits. Delahanty v. First Pennsylvania Bank, N.A., supra, 318 Pa.Superior Ct. at 126-27, 464 A.2d at 1261-62. Appellee’s witness, however, testified as to reasons why 1978 would have been a more profitable year for it if the breach of the lease had not occurred. See, e.g., N.T. May 4,1981 at 29-31, 52-55. Accordingly, because the trial court erred in awarding appellee damages for lost sales and the parties base their widely varying estimates of lost profits on the testimony of appellee’s accountant, testimony heard by the court sitting without a jury, we remand this case for the trial court to determine, based on the record before it and the parties’ arguments, the amount of appellee’s lost sales, additional expenses, and consequent lost profits. Cf. Steinhauer v. Wilson, 336 Pa.Superior Ct. 155, 159, 485 A.2d 477, 479 (1984) (this Court corrects a judgment for damages where the only error disclosed by the record is in sustaining a verdict for a larger amount than the plaintiff has proven). The court shall then enter an appropriate order.

For the foregoing reasons, the order of the trial court is reversed to the extent that it awards appellee $420,000.00 in damages for lost profits, and this case is remanded for further proceedings consistent with this memorandum.

Order reversed in part and affirmed in part. Case remanded for further proceedings consistent with this memorandum. Jurisdiction is relinquished.

      . We note, also, that our Supreme Court and this Court, in our previous decision, implicitly rejected this contention. 510 Pa. at 190, 507 A.2d at 340 (opinion announcing the judgment of the court) (stating that the complex was owned by appellant H & M Associates, a partnership formed by appellants Leonard and Sidney Becker); 335 Pa.Superior Ct. at 383, 484 A.2d at 186 (same; also referring to Man-Tex Clothes as the predecessor-in-interest to appellant H & M Associates).

      . Appellants have abandoned this contention in their supplemental brief and now allege that paragraph 12(d) of the lease precludes appellee from recovery of damages resulting from an interruption of its business activities. Supplemental Brief for Appellants at 15-17. We decline to consider this new contention; in our June 3, 1986 order granting appellants the right to file a reply to appellee’s supplemental brief, we did not grant appellants leave to raise additional questions on appeal. For the sake of completeness, we will address the contention originally raised.

      . Again, appellants have raised new contentions in their supplemental brief that were not included in their original appellate brief. They allege that the damages were unforeseeable and not within the contemplation of the parties at the time that the lease was executed and that the award for interest expenses was improper. We decline to consider these arguments. See supra note 2. Furthermore, we note that neither of these additional claims was raised in appellant’s brief in support of their exceptions below. See Pa.R.A.P. 302(a) (issues not raised in the trial court are waived on appeal).

      . The parties do not dispute that the first option was untimely exercised and the second timely exercised.

      . Moreover, the amount of lost sales testified to by appellee’s witness was $400,000.00, not $420,000.0. See, e.g., N.T. May 4, 1981 at 17.