author: TAMILIA, Judge:

text:
    617 A.2d 333
    ALLSTATE INSURANCE COMPANY, Appellant, v. John McNICHOL and Linda McNichol. ALLSTATE INSURANCE COMPANY v. John McNICHOL and Linda McNichol, Appellants.
    Superior Court of Pennsylvania.
    Argued Oct. 20, 1992.
    Filed Nov. 18, 1992.

      D. Selaine Belver, Philadelphia, for Allstate Ins. Co.
    Lee Garber, Philadelphia, for John and Linda McNichol.
    Before CIRILLO, MONTEMURO and TAMILIA, JJ.
   TAMILIA, Judge:

John and Linda McNichol appeal from the Orders entered December 19, 1991 directing them to submit to independent medical examiners for complete medical examinations.

On December 25, 1989, appellants allegedly sustained injuries as a result of an automobile accident in New Jersey. Appellants filed a claim for first party benefits under their policy with Allstate Insurance Company. Appellee paid appellants first party benefits in the amount of $10,000 each, the minimum required under the Pennsylvania Motor Vehicle Financial Responsibility Law (MVFRL). Thereafter, appellee continued to pay appellants’ medical bills pursuant to the policy of unlimited medical coverage under New Jersey law. Appellee requested and appellants refused to submit to independent medical examinations for the purpose of enabling appellee to determine whether the appellants’ injuries were reasonably related to the accident in question. On June 13, 1991, counsel for appellee filed petitions to compel appellants to submit to the examinations and served a copy of said petitions through the mail on appellants’ counsel, who received said notice. The trial court granted appellee’s petitions and ordered the examinations pursuant to 75 Pa.C.S. § 1796, which states as follows:

§ 1796. Mental or physical examination of person
(a) General rule. — Whenever the mental or physical condition of a person is material to any claim for medical, income loss or catastrophic loss benefits, a court of competent jurisdiction or the administrator of the Catastrophic Loss Trust Fund for catastrophic loss claims may order the person to submit to a mental or physical examination by a physician. The order may only be made upon motion for good cause shown. The order shall give the person to be examined adequate notice of the time and date of the examination and shall state the manner, conditions and scope of the examination and the physician by whom it is to be performed. If a person fails to comply with an order to be examined, the court or the administrator may order that the person be denied benefits until compliance.

The court found appellee made a good faith effort to obtain the information it needed to conduct its investigation and showed good cause to justify compelling appellants to submit to the examinations. (Slip Op., Maier, J., 4/2/92, pp. 4-5.)

Appellants argue the court erred in granting appellee’s petition since they were never served with proper notice as required under Pennsylvania Rules of Civil Procedure 400-405. Specifically, appellants contend appellee erred by serving notice to appellants’ attorney instead of directly to the parties themselves.

We find since appellee had been corresponding with appellants’ counsel on a regular basis since the initiation of appellants’ claim, appellants had implied if not actual notice of appellee’s petition. “[Wjhere no substantial rights of appellant were in jeopardy and appellant had received actual notice of litigation, the trial court could properly disregard procedural defects in service of process.” Cross v. 50th Ward Comm. Ambulance Co., 365 Pa.Super. 74, 81, 528 A.2d 1369, 1372 (1987), citing Miller v. Carr, 221 Pa.Super. 306, 292 A.2d 423 (1972). Furthermore, appellants have cited no authority nor has our research disclosed any cases indicating it is improper for an attorney to accept service of process on behalf of his or her client(s).

Next, appellants contend the independent medical examinations are no longer necessary since appellee already exhausted its obligation to appellants by providing first party benefits to the policy limits. In other words, appellants assert the court erred in entering its Order because, at the time of the petitions, appellee no longer had a duty to provide medical coverage to appellants. We disagree.

Appellee had an obligation and continues to have an obligation under New Jersey law to provide medical benefits to appellants over and above the $10,000 limit under the MVFRL. Since the accident occurred in New Jersey, appellee had to adhere to the following New Jersey statutes. N.J.S.A. 17:28-1.4 states in pertinent part:

17:28-1.4. Automobile or motor vehicle liability policy; mandatory coverages; construction of policy; written certification of compliance; “automobile” defined Any insurer authorized to transact or transacting automobile or motor vehicle insurance business in this state ... which sells a policy providing automobile or motor vehicle liability insurance coverage, or any similar coverage, in any other state ... shall include in each policy coverage to satisfy at least the ... personal injury protection benefits coverage pursuant to § 4 of P.L.1972, c. 70(C. 39:6A-4) ..., whenever the automobile or motor vehicle insured under the policy is used or operated in this state.

The version of N.J.S.A. 39:6A-4 in effect at the time of the accident states in pertinent part:

“Personal injury coverage” means and includes: a. Medical expense benefits. Payment of all reasonable medical expenses incurred as a result of personal injury sustained in an automobile accident....

In Smith v. Firemens Ins. Co. of Newark, 404 Pa.Super. 93, 590 A.2d 24 (1991), alloc. denied, 529 Pa. 669, 605 A.2d 334 (1992), Smith had a Pennsylvania insurance policy with defendant and sustained injuries from an accident in New Jersey from which she required continued medical care. The trial court held that under 75 Pa.C.S. § 1711, defendant only owed Smith the $10,000 in first party benefits. In reversing, this Court exercised judicial comity and found the same New Jersey statutes set forth above applied to hold defendant accountable for all of Smith’s medical expenses. The Court reasoned as follows:

Applying the New Jersey provisions in no way defeats Pennsylvania’s interest reflected in § 1711, because with the application of the New Jersey statute, the insured will receive more than the $10,000 minimum coverage; thus, application of the New Jersey statute in this case furthers Pennsylvania’s interest in assuring that its citizens receive a certain minimal level of coverage. In addition, application of the New Jersey law furthers several of New Jersey’s interests, that is, the interest in having out-of-state residents who are injured while travelling on New Jersey highways receive coverage for their reasonable medical expenses; the interest in having the rights of insurance companies authorized to do business in New Jersey governed by New Jersey law; and the interest in having sister states give full faith and credit to its insurance law.

Id., at 98, 590 A.2d at 27.

Since appellee has an ongoing responsibility to continue payments of appellants’ medical expenses if the injuries were reasonably related to the accident, appellants in turn still must submit to independent medical examinations.

Orders affirmed.

Decision rendered prior to Montemuro, J. leaving the Bench.

      . Even if we found the service was defective, the final result would remain unchanged. "Where service of process is defective, the Supreme Court has held, the remedy is to set aside the service. The action, however, remains; and, if plaintiff can properly bring defendant on the record, the original action may be pursued.” Frycklund v. Way, 410 Pa.Super. 347, 353, 599 A.2d 1332, 1335 (1991), citing Nicolosi v. Fittin, 434 Pa. 133, 135-136, 252 A.2d 700, 701 (1969). In their brief, appellants admit on April 8, 1992 appellee reinstated its petition and effectuated proper service upon appellants. If we were to remand the case, the trial court would once again grant appellee’s petition and we would again be entertaining an appeal based upon the substantive issue of whether the court erred in entering the Order. Therefore, in the interest of judicial economy, we dismiss appellant’s argument regarding improper service.


source: Caselaw Access Project

author: CIRILLO, Judge:

license: Public Domain

text:
    617 A.2d 336
    Garry L. DEETER and Allen R. Kramer, Appellants, v. DULL CORPORATION, INC.
    Superior Court of Pennsylvania.
    Argued Oct. 22, 1992.
    Filed Nov. 30, 1992.

      Stanley J. Brassington, Schuylkill, for appellants.
    Robert L. Goodman, Pottsville, for appellee.
    Before CIRILLO, MONTEMURO and TAMILIA, JJ.
   CIRILLO, Judge:

This is an appeal from an order of the Court of Common Pleas of Schuylkill County sustaining appellee Dull Corporation, Inc.’s (“Dull”) preliminary objections in the nature of a demurrer and dismissing appellants’ Gary L. Deeter (“Deet er”) and Allen R. Kramer (“Kramer”) amended complaint for failure to state a cause of action. We affirm.

On February 13, 1991, Deeter and Kramer filed a complaint against Dull to recover damages they allegedly sustained while in the course of their employment. Deeter and Kramer alleged that Dull was liable for their injuries by breaching its duty to protect them as business invitees. Deeter and Kramer also alleged that Dull/lessor had breached its affirmative duty under a lease provision to ensure that the employer/lessee obtained workmen’s compensation insurance and that Deeter and Kramer were intended third party beneficiaries of that lease provision. Further, Deeter and Kramer alleged that Dull undertook the obligation to perform the duty of enforcing the lease provision which required the employer to obtain workmen’s compensation insurance and, as a result, Dull’s undertaking created either an obligation of primary liability as a surety or secondary liability as a guarantor for the benefit of third party benefactors, Deeter and Kramer.

Dull filed preliminary objections in the nature of a demurrer to each claim. On September 19, 1991 the trial court sustained the preliminary objections and granted Deeter and Kramer leave to amend their complaint. Deeter and Kramer then filed their amended complaint, which was virtually identical to the original complaint. Dull again preliminarily objected and demurred to each claim asserting that Deeter and Kramer had failed to state a cause of action. On April 10, 1992 the trial court sustained Dull’s preliminary objections and dismissed the amended complaint. This timely appeal followed.

In an appeal from an order sustaining preliminary objections in the nature of a demurrer we take all material facts set forth in the complaint as well as all inferences reasonably deduced therefrom as true. Where any doubt exists as to whether a demurrer should be sustained, it should be resolved in favor of overruling the demurrer. Kyle v. McNamara & Criste, 506 Pa. 631, 634, 487 A.2d 814, 816 (1985) (citations omitted); Baker v. Magnetic Analysis Corp., 347 Pa.Super. 188, 192, 500 A.2d 470, 472 (1985) (citations omitted).

' This case arises out of work related injuries sustained by Deeter and Kramer while in the employ of Horsehead. Dull owns lands in Schuylkill County, collectively known as the John Filbert Tract. In November, 1987 Dull leased the property to Horsehead for a term of five years for the purpose of mining the property. In February, 1989 Deeter was injured during the course of his employment with Horsehead while attempting to lift a railroad car. In May, 1989 Kramer became totally and permanently disabled as a result of having contacted anthracosilicosis. Deeter and Kramer seek to recover an amount equal to their workmen’s compensation benefits from Dull as lessor of the property.

Pennsylvania law follows the general rule that a lessor of land is not liable to the lessee or to others, including business invitees, for the physical harm caused by either natural or artificial conditions on the land which existed when the land was transferred or which arise after the transfer of possession. Dinio v. Goshorn, 437 Pa. 224, 228-229, 270 A.2d 203, 206 (1969); Pierce v. Philadelphia Housing Authority, 337 Pa.Super. 254, 257, 486 A.2d 1004, 1005 (1985) (citations omitted); Craig v. Ryan, 201 Pa.Super. 307, 191 A.2d 711 (1963); Restatement (Second) of Torts §§ 355-356 (1965). This principle is based upon the theory that when the lessor leases the land, the law regards the lease transaction as the equivalent to the sale of the land for the term of the lease. Restatement (Second) of Torts § 356, Comment a.

There are several exceptions to this general rule: where the lessor contracts to repair; where the lessor fails to disclose dangerous conditions to the lessee; where the land is leased for the purpose of inviting the public; where the lessor retains a portion of the land but allows the lessee to use it; where the lessor retains a portion of the land that is necessary to maintain the leased part in a safe condition; and, where the lessor negligently makes repairs on the land while it is in the possession of the lessee. Smith v. M.P.W. Realty Company, Inc., 423 Pa. 536, 225 A.2d 227 (1967); Miller v. Atlantic Refining Co., 12 D & C.2d 713, (1957) aff'd, 393 Pa. 466, 143 A.2d 380 (1958); Pierce, supra; Yarkosky v. The Caldwell Store, Inc., 189 Pa.Super. 475, 151 A.2d 839 (1959); Coradi v. Sterling Oil Co., 378 Pa. 68, 105 A.2d 98 (1954); Goodman v. Corn Exchange National Bank and Trust Co., 331 Pa. 587, 200 A. 642 (1938); Restatement (Second) of Torts §§ 357-362 (1965). Initially, we note that Restatement sections 355-362 specifically deal with the liability of lessors of land to persons on the land. A review of these sections evidences that liability is premised primarily on possession and control, and not merely ownership. See Smith v. King’s Grant Condominium, 418 Pa.Super. 260, 614 A.2d 261 (1992) (while ownership may be a factor under Restatement (Second) of Torts, § 364(c) liability is premised on possession and control); Juarbe v. City of Philadelphia, 288 Pa.Super. 330, 431 A.2d 1073 (1981) (lessor may be held liable for injuries sustained on his property if he maintains possession and control over the property).

After a thorough review of the record, particularly the provisions contained in the lease, we find no evidence that establishes the existence of one or more of these exceptions. Thus, the trial court acted properly in sustaining Dull’s preliminary objection to the Deeter’s and Kramer’s first claim. Kyle, supra.

We also find no merit to Deeter’s and Kramer’s claims that they were intended third party beneficiaries of the lease agreement and that Dull had undertaken the role of surety or guarantor when it failed to enforce the lease provision which required the employer to obtain the necessary workmen’s compensation insurance. We recognize that the exclusivity provision of the Workmen’s Compensation Act does not preclude an employee from pursuing a common law claim against a third party tortfeasor for injury suffered while in the course of employment. 77 P.S. §§ 481, 501, 671; Wagner v. National Indemnity Co., 492 Pa. 154, 422 A.2d 1061 (1980); Brunelli v. Farelly Brothers, 266 Pa.Super. 23, 402 A.2d 1058 (1979). However, as noted above, the lease effectuated a complete transfer of the land during the period of the leasehold during which time the lessor neither possessed nor controlled the leased premises. As Dull did not have sufficient control over the premises as landowner, possessor, or in any way maintain control vicariously, it cannot be said that Dull’s actions or inactions were the proximate cause of the injuries suffered by Deeter and Kramer. We find that Deeter and Kramer would be precluded from bringing a third party tortfeasor claim against Dull. See Jamison v. Westinghouse Electric Corp., 375 F.2d 465 (3d Cir.1967) (third party action by employee against landowner/lessor, permissible where property owner retained control, supervision, or possession over the property).

Instead, Deeter and Kramer seek to invoke contract principles to hold Dull liable. Deeter and Kramer initially contend that they were intended beneficiaries of the lease provision which required their employer to obtain the necessary workmen’s compensation insurance. The Pennsylvania Supreme Court recently reexamined the rule for identifying the existence of a third party beneficiary in Pennsylvania. Scarpitti v. Weborg, 530 Pa. 366, 609 A.2d 147 (1992). In Scarpitti, the court reiterated the general rule articulated in Spires v. Hanover Fire Ins. Co., 364 Pa. 52, 70 A.2d 828 (1950). There, the court held that in order to have standing as a designated third party beneficiary, the contracting parties must expressly have intended that the third party be a beneficiary and that the express intention of the contracting parties affirmatively appear in the contract itself. Spires, 364 Pa. at 57, 70 A.2d at 830-31. However, an exception to the rule in Spires was formulated in the case of Guy v. Liederbach, 501 Pa. 47, 459 A.2d 744 (1983), which overruled the Spires holding to the extent that it stated the exclusive test for third party beneficiaries in Pennsylvania. In Guy, the Pennsylvania Supreme Court expressly adopted Restatement (Second) of Contracts, § 302 (1979), as a guide for further designating third party beneficiary claims. The Restatement (Second) of Contracts, § 302 states:

Intended and Incidental beneficiaries
(1) Unless otherwise agreed between the promisor and promisee, a beneficiary of a promise is an intended beneficiary if recognition of a right to performance in the beneficiary is appropriate to effectuate the intentions of the parties and either
(a) the performance of the promise will satisfy an obligation of the promisee to pay money to the beneficiary; or
(b) the circumstances indicate that the promisee intends to give the beneficiary the benefit of the promised performance.
(2) An incidental beneficiary is a beneficiary who is not an intended beneficiary

Restatement (Second) of Contracts, § 302. Section (1) “sets forth a standing requirement which leaves discretion with the court to determine whether recognition of third party beneficiary status would be appropriate.” Guy, 501 Pa. at 60, 459 A.2d at 751. Subsections (a) and (b) “define[ ] the two types of claimants who may be intended as third party beneficiaries.” Id. A party must satisfy both the standing and definition sections to maintain a claim under the contract. Id.

Thus, to state the appropriate rule in light of Spires, supra, and Guy, supra, we adhere to the following guideline:

a party becomes a third party beneficiary only where both parties to the contract express an intention to benefit the third party in the contract itself, ... unless, the circumstances are so compelling that recognition of the beneficiary’s right is appropriate to effectuate the intention of the parties, and the performance satisfies an obligation of the promisee to pay money to the beneficiary or the circumstances indicate that the promisee intends to give the beneficiary the benefit of the promised performance.

Scarpitti, 530 Pa. 366, 609 A.2d at 150-51 (citations omitted) (emphasis in original). Applying these principles to the instant case, we find that Deeter and Kramer were not intended third party beneficiaries.

Deeter and Kramer contend that the language contained on page 17, section 18 of the lease agreement evidenced that the parties intended that the workmen were intended beneficiaries of the contract. Section 18 provides:

LESSEE agrees that it shall maintain workmen’s compensation, as well as unemployment insurance, for all employees of LESSEE, and shall make or pay and maintain any insurance required by any governmental body for the benefit of the LESSEE’S employees ... LESSEE shall supply to LESSOR ... proof of all insurance.

To ascertain whether such an intention exists we examine the lease agreement and specifically the language noted above. Section 18 is entitled INDEMNIFICATION AND INSURANCE. In the paragraph dealing with insurance, the lessee, as promisor, agreed to obtain all necessary workmen’s compensation, unemployment and general liability insurance. These separate types of insurance were grouped together to spell out the duties of the lessee. The benefit of the lessee’s promise ran directly to Dull, as promisee.

Assuming arguendo that recognition of the Deeter’s and Kramer’s right was appropriate to effectuate the intention of the parties, there was neither an intent on behalf of Dull to give the benefit of the lessee’s promise of obtaining insurance to any beneficiary nor did the lessee’s promise of obtaining insurance satisfy any obligation owed by Dull to pay money to any beneficiary. Obviously, the intent of the the insurance section was to protect Dull from potential lawsuits and create an obligation on behalf of the lessee to indemnify Dull, notwithstanding the employer’s statutory immunity under the Workmen’s Compensation Act.

The third party beneficiary relationship was not contemplated by the parties. The language states that the lessee was to perform to protect its own employees; at most, Deeter and Kramer were incidental beneficiaries and as such were unprotected and have no enforceable rights under either the principles of Restatement (Second) of Contracts § 302, or Guy. Scarpitti, supra.

Deeter and Kramer next contend that the language of Section 18 created a suretyship relationship between the lessee and Dull. We have held that a contract of suretyship is solely between the principal debtor and the surety/obligor. See Trident Corp. v. Reliance Ins. Co., 350 Pa.Super. 142, 504 A.2d 285 (1986); First National Bank & Trust Co. of Ford City v. Stolar, 130 Pa.Super. 480, 197 A. 499 (1938). A suretyship is a direct and original undertaking, under which the obligor is primarily and jointly liable with the principal. Wurlitzer Co. v. Oliver, 334 F.Supp. 1009 (W.D.Pa.1971). Here, the lessee’s promise to obtain insurance was a single undertaking. Dull made no promise to pay money or perform other acts in the event that the lessee failed to perform. There was neither a request, nor assent on the part of the lessee as principal, which would indicate the parties’ intent to create a suretyship. Evidence of these two factors is essential to Deeter’s and Kramer’s claim. Trident, supra (citation omitted). The contract, specifically Section 18, is completely devoid of evidence of the existence of a surety relationship; rather, the lessee’s promise was separate and distinct from any performance owed by Dull. There is no evidence of a joint promise by the lessee and Dull to provide the insurance; moral obligation is insufficient to support a promise of a surety. Paul v. Stackhouse, 38 Pa. 302 (1861).

Assuming arguendo, that a suretyship was ever considered by the parties, under the instant facts it could not be enforced by Deeter and Kramer. A suretyship may only be enforced by an obligee against a surety where the obligee affirmatively accepts the suretyship contract within a reasonable time inasmuch as such notice enables the surety to know the nature and extent of its liability. See Acme Manufacturing Co. v. Reed, 197 Pa. 359, 47 A. 205 (1900). The record is devoid of any evidence that Deeter and Kramer ever had notice of a suretyship contract. Thus, there could be no acceptance. Further, the lease entered into between Dull and the employer was executed in 1987. Deeter and Kramer were injured in 1989, and filed suit in 1991. Acceptance is unreasonable under such a time frame.

We find that as there was no promise by the lessee as principal and Dull as surety, Dull cannot be said to be directly, immediately, primarily and jointly liable for the debt for which the lessee has defaulted on. Wurlitzer, supra.

In the same light, the record does not establish any evidence of a collateral promise or guarantee made by Dull. The language simply states that the lessee had an affirmative duty to obtain and show proof of insurance. There is no separate contract given by Dull warranting that should the lessee default after due prosecution, Dull would perform the lessee’s duty on behalf of any beneficiary and obtain insurance. Atalanta Corp. v. Ohio Valley Provision Co., 263 Pa.Super. 374, 398 A.2d 183 (1979), aff'd, 489 Pa. 389, 414 A.2d 123 (1980). Without establishing these factors, we decline to hold Dull liable as a guarantor. As in a suretyship relationship, a moral obligation does not support a contract of guarantee. Appeal of Willis, 131 Pa. 638, 18 A. 987 (1890).

The trial court properly granted Dull’s preliminary objections to Deeter’s and Kramer’s second and third claims. Deeter and Kramer failed to state a cause of action, Spires, supra, Guy, supra, and the trial court properly sustained Dull’s demurrer. Kyle, supra.

Order affirmed.

Decision rendered prior to MONTEMURO, J., leaving the bench.

      . Deeter and Kramer were employed by Horsehead Coal Company (“employer or lessee”) which had leased the land from Dull for the purpose of excavating coal. Both Deeter and Kramer had filed meritorious workmen’s compensation claims with their employer. Suit was initiated against Dull when it was discovered that the employer failed to obtain necessary workmen's compensation insurance, was uninsured and undergoing bankruptcy.

      . In their appellant brief, Deeter and Kramer contend that they did not claim that Dull was responsible for their injuries which occurred as business invitees, rather, that as a result of Dull's failure to enforce the workmen's compensation insurance obligation of the employer, Dull was liable. We disagree. The trial court, in its 1925(b) opinion addressed the business invitee issue as it believed it formed the basis of counts I and IV of the amended complaint. After a review of counts I and IV we agree with the trial court's finding and we will address the issue of Deeter’s and Kramer’s remedy as business invitees. Thus, the issue that Dull is liable to Deeter and Kramer for its failure to enforce the insurance provision in counts I and IV is waived on appeal. See Pa.R.A.P. 302; Morgan v. Sbarbaro, 307 Pa.Super. 308, 453 A.2d 598 (1982) (on appeal, new or different theory of recovery may not be advanced for the first time).

      . Instead of amending the complaint, Deeter and Kramer filed a notice of appeal of the September order. We note that an order sustaining preliminary objections without dismissal or contemporaneously granting the plaintiff leave to amend the complaint is interlocutory. See Sullivan v. Philadelphia, 378 Pa. 648, 107 A.2d 854 (1954); Leach v. Hough, 352 Pa.Super. 213, 507 A.2d 848 (1986).
      While the appeal was extant, however, Deeter and Kramer filed an untimely amended complaint which the trial court accepted, ruled upon and then entered the instant order. We find the trial court acted appropriately in disposing of the amended complaint as the court may proceed "in any matter in which a nonappealable interlocutory order has been entered, notwithstanding the filing of a notice of appeal or a petition for review of the order.” Pa.R.A.P. 1701(b)(6).

      . Deeter and Kramer contend thint Dull/lessor was liable under the following lease provision:
      LESSEE agrees that it shall maintain workmen's compensation, as well as unemployment insurance, for all employees of LESSEE, and shall make or pay and maintain any insurance required by any governmental body for the benefit of the LESSEE’S employees ... LESSEE shall supply to LESSOR ... proof of all insurance.
      For the reasons discussed infra, we find reliance on this language by Deeter and Kramer to be misplaced and their contentions to be without merit.

      . The disparity between ownership and actual possession and control is ascertainable when reviewing the exceptions to the general rule promulgated in sections §§ 355-356. Under the exceptions stated in sections 357-362 a lessor may be held liable only when some indicia of control or possession through separate contract to repair — § 357; where part of the leased land is retained in the lessor’s control which the lessee is entitled to use — § 360; and, where part of the leased land is retained in the lessor’s control and the part retained is necessary for the safe use of the part leased by the lessee — § 361.

      . Section 303 of the Workmen’s Compensation Act provides;
      "The liability of an employer under this act shall be exclusive and in place of any and all other liability to such employes, ... or anyone otherwise entitled to damages in .any action at law or otherwise on account of any injury or death....”

        77 P.S. § 481(a).


author: HOFFMAN, Judge: CIRILLO, Judge,

text:
    617 A.2d 342
    COMMONWEALTH of Pennsylvania v. Luis MERCADO, Appellant.
    Superior Court of Pennsylvania.
    Argued Sept. 1, 1992.
    Filed Dec. 1, 1992.

      Patrick J. Connors, Media, for appellant.
    Anthony Pomeranz, Asst. Dist. Atty., Philadelphia, for Com.
    Before CIRILLO, POPOVICH and HOFFMAN, JJ.
   HOFFMAN, Judge:

Appeal is taken from the judgment of sentence entered on May 24, 1991 for possession of controlled substances with intent to deliver and for criminal conspiracy. Appellant contends the following: the evidence was insufficient to support the convictions; the police officers who executed the search warrant violated the “knock and announce” rule, Pa. R.Crim.P. 2007; the search warrant was defective; and the lower court incorrectly utilized the mandatory minimum sentencing provisions of 18 Pa.C.S.A. § 7508. For the reasons set forth below, we agree that the Commonwealth’s evidence was insufficient to support the convictions and therefore reverse and vacate the judgment of sentence.

On April 5, 1989, an officer from the Philadelphia Police Department went to 707 West Berks Street in Philadelphia, a three story brick row house, to investigate a report that controlled substances were being sold at that location. The officer was met at the door by Alex Colon, appellant’s alleged co-conspirator. Colon asked the officer “what he needed” and the officer replied “two caps”. Colon handed the officer two vials later determined to contain crack cocaine, and in exchange, the officer gave Colon a pre-recorded ten dollar bill. During this transaction, the officer viewed appellant leaning his head and shoulders out of the third floor window immediately above. At this time there was no verbal communication between appellant and Colon.

The officer returned to 707 West Berks Street twice the same evening within a span of fifteen minutes. On each occasion, the officer observed Colon at the front door, and appellant leaning out the window. However, the officer wi1> nessed no evidence of criminal dealing on these occasions.

On April 7, 1990, a search warrant for the premises was issued. Upon execution of the search warrant, officers encountered appellant between the first and second floor. The officers proceeded past appellant to the third floor. The door to the third floor apartment was open and unlocked. From that room, the officers confiscated a clear plastic bag containing 23.7 grams of cocaine, two plastic packets each containing 20 vials of crack cocaine, numerous clear plastic vials, caps, and packets, and a spoon and a razor, each with a white residue all lying in plain view on a table. In addition, a further search of the room disclosed a brown paper bag containing two baggies with a total of 56.5 grams of cocaine, and $3,128 in U.S. currency, including the pre-recorded ten dollar bill the officer used to buy cocaine from Colon.

On November 9, 1990, a bench trial was held and appellant was convicted of possession of controlled substances with intent to deliver and criminal conspiracy. Appellant’s post trial motions were denied on January 14, 1991. Thereafter, appellant was sentenced to three-to-six years incarceration and a fine of fifteen thousand dollars ($15,000.00) for possession with intent to deliver cocaine, and a concurrent term of one-to-five years for criminal conspiracy. This timely appeal followed.

Appellant first argues that the evidence presented at trial was insufficient to support a conviction of possession with intent to deliver. Initially, we point out that our standard of review for challenges to the sufficiency of evidence is limited.

We must determine whether, viewing all the evidence at trial, as well as all reasonable inferences to be drawn therefrom, in the light most favorable to the Commonwealth, the trier of fact could have found that each element of the offense was proven beyond a reasonable doubt. Both direct and circumstantial evidence receive equal weight when assessing the sufficiency of the evidence. Commonwealth v. Carson, 405 Pa.Super. 492, 592 A.2d 1318, 1320 (1991); Commonwealth v. French, 396 Pa.Super. 436, 578 A.2d 1292 (1990). All reasonable inferences, consistent with the evidence, must be viewed in the Commonwealth’s favor as verdict winner.

Commonwealth v. Grekis, 411 Pa.Super. 494, 504-05, 601 A.2d 1275, 1280 (1992). Mindful of our narrow standard of review, we proceed with appellant’s claims.

The record is clear that after the police searched the premises located at 707 West Berks Street and arrested appellant, no drugs were found in appellant’s possession. Hence, the drug possession charge against appellant required a showing of constructive possession. Commonwealth v. Frometa, 398 Pa.Super. 110, 113, 580 A.2d 865, 867 (1990) (“ ‘When drugs are not found on the defendant’s person, the Commonwealth is required to prove constructive possession.’ ”) (citations omitted).

Constructive possession has been defined as “the ability to exercise a conscious dominion over the illegal substance: the power to control the contraband and the intent to exercise that control.” Commonwealth v. Valette, 531 Pa. 384, 613 A.2d 548, 550 (1992) (citing Commonwealth v. Macolino, 503 Pa. 201, 206, 469 A.2d 132, 134 (1983)). Intent to maintain a conscious dominion, moreover, may be inferred from the totality of circumstances, and from circumstantial evidence. Id. 613 A.2d at 550.

In the present case, the Commonwealth’s evidence consisted of the following: the police observation of appellant, leaning out the third floor window of the house where a planned “buy” was made, watching a drug transaction transpire between police and appellant’s alleged co-conspirator; the observation of appellant and his alleged co-conspirator in the same position fifteen minutes later, at which time there was no sight of criminal dealing; and the presence of appellant between the first and second floor of the house at the time police uncovered contraband in the third floor apartment. We find this evidence insufficient to support a finding of constructive possession.

Although appellant was observed leaning out the window of the third floor apartment two days prior to the search, and was subsequently present in the house the day the search warrant was executed, the Commonwealth failed to show that appellant had exclusive access to the third floor apartment. Appellant testified that this was not his residence, and there were no pictures, personal items, or documents of identification presented as evidence which indicated appellant’s prolonged presence or dominion and control over the apartment. Moreover, the police found the door to the third floor apartment open and without a lock. The apartment, therefore, was clearly accessible to several persons. This court has stated that “where more than one person has equal access to where drugs are stored, presence alone in conjunction with such access will not prove conscious dominion over the contraband.” Commonwealth v. Davis, 331 Pa.Super. 285, 305, 480 A.2d 1035, 1045 (1984) (citing Commonwealth v. Keblitis, 500 Pa. 321, 456 A.2d 149 (1983); Commonwealth v. Chenet, 473 Pa. 181, 373 A.2d 1107 (1977); Commonwealth v. Luddy, 281 Pa.Super. 541, 422 A.2d 601 (1980)). Therefore, something beyond appellant’s mere presence is required to show appellant’s constructive possession over the drugs found within the third floor apartment.

The lower court held that appellant’s presence at the third floor window was characteristic of a “lookout,” and that the subsequent finding of appellant in the house during the search substantiated appellant’s involvement and control over the drugs found within the third floor apartment. In essence, the trial court found that appellant’s observation from the third floor apartment window of the drug transaction between police and Colon coupled with appellant’s presence in the house at the time of the search was sufficient to find that appellant exercised control over the drugs. We disagree.

In the case at bar, appellant’s silent observation of a previous drug transaction is not enough to transform his presence in the house at the time of the search into an exercise of conscious dominion over the drugs confiscated by the police. Our Supreme Court has recently stated that “[i]t is well settled that facts giving rise to mere ‘association,’ ‘suspicion’ or ‘conjecture,’ will not make out a case of constructive possession.” Valette, 613 A.2d at 551 (1992) (citing Commonwealth v. Chenet, 473 Pa. 181, 373 A.2d 1107 (1977); Commonwealth v. Fortune, 456 Pa. 365, 318 A.2d 327 (1974); Commonwealth v. Tirpak et al., 441 Pa. 534, 272 A.2d 476 (1971)).

In Valette, the Court reversed appellant’s conviction for possession of a controlled substance under facts similar to those in the case at bar. In Valette the only link between the narcotics confiscated from the premises and appellant was his presence and apparent acquaintanceship with the co-defendants. Id. The court found this insufficient for a showing of constructive possession. Likewise, we find the evidence present insufficient to support a finding of constructive possession.

Appellant next argues that the evidence was insufficient to support his conviction for criminal conspiracy. Once again, we note that our review of a sufficiency of evidence claim is limited, and with this in mind we address appellant’s second claim.

Criminal conspiracy requires an agreement to commit an unlawful act. Commonwealth v. Eddowes, 397 Pa.Super. 551, 558, 580 A.2d 769, 773 (1990) (“The essence of a criminal conspiracy is the agreement to perform an unlawful act.”) (citing Commonwealth v. Savage, 388 Pa.Super. 561, 569-71, 566 A.2d 272, 276 (1989); 18 Pa.C.S.A. § 903). The existence of an agreement, moreover, need not be express, but rather may be inferred from the surrounding circumstances.

An agreement can be inferred from a variety of circumstances including, but not limited to, the relation between the parties, knowledge of and participation in the crime, and the circumstances and conduct of the parties surrounding the criminal episode. These factors may coalesce to establish a conspiratorial agreement beyond a reasonable doubt where one factor alone might fail.

Commonwealth v. French, 396 Pa.Super. 436, 441, 578 A.2d 1292, 1294 (1990) (citing Commonwealth v. Lamb, 309 Pa.Super. 415, 429, 455 A.2d 678, 685-86 (1983)).

The Commonwealth’s charge of criminal conspiracy is based upon the police noticing appellant leaning out the third floor apartment window watching the drug transaction between appellant’s alleged co-conspirator and police. The Commonwealth contends that although there was no oral communication between appellant and his alleged co-conspirator at this time, nor on the two subsequent occasions in which appellant was observed in a similar position, the presence of drugs, two days later, in the third floor apartment, gives rise to the inference that appellant was in fact a “lookout”. It is from these facts that an agreement to engage in an unlawful activity is inferred. We disagree.

A bright line test to distinguish between cases which give rise to an inference of conspiratorial agreement and those which present merely conjecture does not exist. See Commonwealth v. Lore, 338 Pa.Super 42, 62, 487 A.2d 841, 852 (1984) (“It is well established that a criminal conspiracy is a common understanding, either tacit or express, which may be proven inferentially but not by mere suspicion or conjecture.”) (citations omitted). This case, however, is analogous to Commonwealth v. Anderson, 265 Pa.Super. 494, 402 A.2d 546 (1979) wherein this court found an agreement lacking.

In Anderson, appellant, while in his wife’s presence, directed an undercover officer to give money to appellant’s wife while appellant went inside and retrieved the drugs. While still in his wife’s presence, appellant handed the packets to the officer. This court reversed the judgment of sentence on the criminal conspiracy charge holding that the evidence was insufficient to implicate appellant’s wife.

In the instant case, the lower court infers an agreement from facts less persuasive than those in Anderson. Appellant was not observed handling any money or communicating in any way with Colon. After the police searched the premises, they found no drugs on appellant, nor was appellant in the room where the drugs were found. Appellant’s mere presence at the location of the drug transaction is not sufficient to implicate him in a criminal conspiracy. See, e.g., Commonwealth v. Davenport, 307 Pa.Super 102, 109, 452 A.2d 1058 (1982) (“[P]roof of guilt on a charge of conspiracy fails if it shows only that the accused was present at the scene of the crime and knew of its commission.”) (citations omitted); see also Commonwealth v. Stephens, 231 Pa.Super 481, 489, 331 A.2d 719, 723 (1974) (“In short, the only thing that was shown was that appellant stood mute and unresponsive after overhearing the conversation between the [police officer] and [alleged co-conspirator]. That evidence, while supporting an inference of knowledge, can not support the further inference of agreement.... ”).

For the foregoing reasons we reverse and vacate the judgment of sentence for possession of controlled substances and criminal conspiracy.

Reversed; judgment of sentence vacated.

POPOVICH, J., concurs in the result.

CIRILLO, J., files a dissenting opinion.

CIRILLO, Judge,

dissenting.

I most respectfully dissent. Ever mindful that our standard of review is narrow and that we are obliged to view all reasonable inferences in the light most favorable to the verdict winner, Grekis, supra, I would hold that the evidence is sufficient to sustain the conviction of Mercado for possession with the intent to deliver and conspiracy.

When a conviction is based on circumstantial evidence, the Commonwealth is not obliged to prove that the evidence is absolutely incompatible with innocence. Commonwealth v. Calderini, 416 Pa.Super. 258, 260-61, 611 A.2d 206, 207 (1992). Constructive possession of contraband can be proved by circumstantial evidence. Commonwealth v. Mudrick, 510 Pa. 805, 308, 507 A.2d 1212, 1213 (1986). Constructive possession is a legal fiction, derived from the totality of the circumstances. Grekis, supra. Circumstantial evidence may suffice for the totality of the circumstances necessary to prove constructive possession. Commonwealth v. Macolino, 503 Pa. 201, 206, 469 A.2d 132, 134 (1983). Our supreme court has held that “constructive possession may be found in either or both actors if contraband is found in an area of joint control and equal access.” Mudrick, 510 Pa. at 309, 507 A.2d at 1214.

In this case, the police officers observed Mercado unquestionably acting as a lookout from a third floor window on two occasions, once during the planned “buy” and on a second occasion. The officers saw him later in the house with the man who sold the drugs, and then a scant 48 hours later found Mercado in the house, coming down the stairs. In the unlocked third floor lookout room, the police found a large quantity of drugs, their pre-recorded ten dollar bill, and drug paraphernalia.

This evidence, though circumstantial and not absolutely incompatible with innocence, is, in my opinion, sufficient to support the finding of constructive possession. Mudrick, supra; Macolino, supra; Calderini, supra. I believe the Commonwealth has proved that contraband was found in an area of joint control and access. Mudrick, supra.

The conspiracy conviction must also be reviewed with all inferences in the light most favorable to the Commonwealth as verdict winner. Grekis, supra. Criminal conspiracy includes the agreement to aid another in the commission of a crime. 18 Pa.C.S. § 903(a). Conspiracy may also be proved by circumstantial evidence. Grekis, supra. I have no trouble finding that Mercado’s presence on the third floor, acting as lookout, was an integral and necessary part of the criminal drug dealing which occurred at 707 West Berks Street, Philadelphia. For these reasons I dissent and would affirm the judgment of sentence.

      . 35 Pa.S.A. § 780-113(a)(16).

      . 18 Pa.C.S.A. § 903.

      . Although 707 Berks Street appeared as a single unit three story row house from the outside, it was actually being used as multiple occupancy dwelling. It contained an apartment on the first floor, with the second floor consisting of a bathroom, a common kitchen and two separate rooms with locks on the doors. On the third floor were two rooms without any locks on the doors.

      . 35 Pa.S.A. § 780-113(a)(16) prohibits “[kjnowingly or intentionally possessing a controlled or counterfeit substance by a person not registered under this act, or a practitioner not registered or licensed by the appropriate State board, unless the substance was obtained directly from, or pursuant to, a valid prescription order or order of a practitioner, or except as otherwise authorized by this act.”

      . 18 Pa.C.S.A. § 903 states that a person is guilty of conspiracy if he:
      (1) agrees with such other person or persons that they or one or more of them will engage in conduct which constitutes such crime or an attempt or solicitation to commit such crime; or
      (2) agrees to aid such other person or persons in the planning or commission of such crime or of an attempt or solicitation to commit such crime.
      In his brief, appellant raises this issue in terms of ineffectiveness, that counsel failed to preserve the issue for appeal. However, we find that trial counsel did raise this issue in post-trial motions. Therefore, we will address the underlying claim on its merits.


text:
    617 A.2d 347
    Mary Ann CHESTNUT and Elmer Chestnut H/W v. PEDIATRIC HOMECARE OF AMERICA, INC., Appellant.
    Superior Court of Pennsylvania.
    Argued Oct. 20, 1992.
    Filed Dec. 2, 1992.

      Earl S. Lathrop, III, Philadelphia, for appellant.
    William Salzer, Philadelphia, for appellees.
    Before CIRILLO, MONTEMURO and TAMILIA, JJ.
   TAMILIA, Judge:

Pediatric Homecare of America, Inc., appeals the Order entered March 26, 1992 denying its request for a conditional stay of judgment.

On June 8, 1989, appellant entered into a common stock put option agreement with appellee, Mary Ann Chestnut. Under the agreement, appellee had the right to require appellant to purchase all or part of her 212,000 shares of Pediatric common stock for a price of $2 per share. The agreement provided it was to be construed and governed according to Pennsylvania law. On June 6,1991, appellee exercised her put option for all 212,000 shares, but appellant failed in its obligation to tender the payment. Among the numerous counts of a tort action filed by appellees against seven defendants was one count (Count VI) against Pediatric alone for breach of the common stock put option agreement. Following appellees’ unopposed motion for partial summary judgment on that count, the motion was granted and the court ordered judgment in the amount of $424,000 plus interest. On January 8, 1992, appellees filed and served upon appellant’s counsel its praecipe for writ of execution on the judgment and, on January 30, 1992, appellees filed a praecipe for writ of execution listing three Pennsylvania garnishees. After the judgment was entered, appellant filed a petition to conditionally stay the execution of judgment pursuant to Pa.R.C.P. 3121(b).

As a preliminary matter, we address whether the Order is appealable. In Grimme Combustion, Inc. v. Mergentime Corp., 385 Pa.Super. 260, 560 A.2d 793 (1989), alloc. denied, 528 Pa. 611, 596 A.2d 157 (1989), this Court held an Order refusing to grant a stay is not an Order denying an injunction appealable as of right under Pa.R.A.P. 311(a)(4). However, in Philco Corp. v. Sunstein, 429 Pa. 606, 241 A.2d 108 (1968), the Supreme Court stated:

Whether or not a stay order should be considered final for appeal purposes depends to a large extent upon the practical effect and impact the stay order might have on the relief requested by the litigants. If the effect of the stay order is tantamount to a dismissal of the cause of action or amounts to a permanent denial of relief requested, the party aggrieved should undoubtedly be afforded the opportunity to appeal on the basis that such stay order is a final disposition of some, if not all, of the rights involved.

Id. at 609, 241 A.2d at 109 (footnote omitted). We find the Order is appealable under the rationale of Sunstein since the denial of the stay effectively allows appellees to execute on their judgment and forever prevents appellant from presenting its defense, which if adopted by the court would allow appellant to withhold payment on the judgment until its capital is no longer impaired.

On appeal, this Court will not disturb a trial court’s denial of a petition to conditionally stay the execution of judgment “unless our review of the record reveals a clear abuse of discretion or error of law below.” Anmuth v. Chagan, 336 Pa.Super. 216, 218, 485 A.2d 769, 771 (1984). “Whilst the power to stay execution of a judgment is necessary to prevent injustice, it should never be exercised unless the case is plain, and the equity of the party asking the interposition of the court is free from doubt or difficulty.” Pennsylvania Company For Insurances, etc. v. Scott, 329 Pa. 534, 549, 198 A. 115, 122 (1938).

Appellant argues the court erred by refusing to apply the Delaware Corporations Law which prohibits a corporation from redeeming shares when its capital is impaired. Appellant contends application of this law would preclude the finding it breached its contract with appellee by not tendering payment and was appropriate because it did not conflict with Pennsylvania’s public policies. In addition, appellant argues the Delaware law in question operates in the same manner as section 1551(b) of the Pennsylvania Business Corporation Law which prohibits distributions in redemption of stock when a corporation is insolvent.

The trial court found the case was not governed by conflict of laws principles because the Delaware law did not conflict with Pennsylvania laws governing the attachment of assets in possession of garnishees within the Commonwealth. In deciding not to exercise judicial comity in order to apply the Delaware law, the court stated as follows:

In view of this court’s interest in protecting a Pennsylvania plaintiff who holds a Pennsylvania judgment which she wishes to use to attach assets in the possession of Pennsylvania garnishees, we determine that Delaware law should not be applied where its effect will be to deny a judgment holder the value of the judgment.

(Slip Op., Ott, J., 6/3/92, p. 7.) We agree with the trial court’s reasoning and affirm its Order.

There is no dispute the value of appellant’s capital would be impaired under the meaning of section 160 of the Delaware Code by forcing it to satisfy appellees’ judgment. However, application of comity is a matter of judicial discretion. Smith v. Firemens Ins. Co. of Newark, 404 Pa.Super. 93, 590 A.2d 24 (1991), alloc. denied, 529 Pa. 669, 605 A.2d 334 (1992). This Court has previously exercised comity when application of another state’s law contradicts no public policy of Pennsylvania and instead furthers a Pennsylvania policy. Id. Appellant contends exercising comity and applying the relevant Delaware statute would not contravene any public policy of Pennsylvania. We disagree. Pennsylvania has a great interest in protecting a Pennsylvania resident who has obtained a Pennsylvania judgment and has attached assets in possession of Pennsylvania garnishees. The laws of attachment in Pennsylvania are governed by the law of the forum and not the law of the state where the debt arose. Simkins Ind., Inc. v. Fuld & Co., Div. of Met. Gr., Inc., 392 F.Supp. 126, 129 (E.Dist.Pa.1975); Caddie Homes, Inc. v. Falic, 211 Pa.Super. 333, 235 A.2d 437 (1967). Moreover, “[e]very state has jurisdiction to determine for itself the liability of property within its territorial limits to seizure and sale under the process of its courts.” Clark v. Williard, 294 U.S. 211, 55 S.Ct. 356, 79 L.Ed. 865 (1935). Application of the Delaware law would violate Pennsylvania’s public policy or interest in protecting a Pennsylvania judgment holder. Although we agree with appellant that application of the Delaware law would not literally render the judgment a “nullity,” granting the stay effectively would render the judgment meaningless due to appellant’s financial problems and lack of signs pointing to alleviation therefrom.

A similar provision to the Delaware law is found in the Pennsylvania Business Corporation Law at 15 Pa.C.S. § 1551. Under Pennsylvania’s law, a stay could only be properly granted if purchasing the stock would render the corporation insolvent. Although section 1551 neither directly applies nor contradicts the Delaware Code, the Pennsylvania law effectively makes it easier for shareholders to redeem their shares at the corporation’s expense. Therefore, one of the policies behind section 1551 would be compromised were we to apply the Delaware law.

We also agree with the trial court’s adherence to a provision in the contract which stated Pennsylvania law controls. Section 187 of the Restatement (Second) of Conflict of Laws states:

§ 187. Law of the State Chosen by the Parties
(1) The law of the state chosen by the parties to govern their contractual rights and duties will be applied if the particular issue is one which the parties could have resolved by an explicit provision in their agreement directed to that issue.
(2) The law of the state chosen by the parties to govern their contractual rights and duties will be applied, even if the particular issue is one which the parties could not have resolved by an explicit provision in their agreement directed to that issue, unless either
(a) the chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties’ choice, or
(b) application of the law of the chosen state would be contrary to a fundamental policy of a state which has a materially greater interest than the chosen state in the determination of the particular issue and which, under the rule of § 188, would be the state of the applicable law in the absence of an effective choice of law by the parties.

Under section 187(1), appellant correctly points out the parties could not have explicitly agreed to make appellant tender payment for redemption of shares if its capital was impaired at the time. Appellant argues Delaware law should be applied under section 187(2)(b) because Delaware has a “materially greater interest” in determining whether its corporation must make payments under the conditions at hand. We disagree. We find Pennsylvania’s interest in protecting its residents who have obtained Pennsylvania judgments is equally important to Delaware’s interest in protecting its corporations.

Appellant also argues under section 187(2)(b), absent the provision in the agreement, Delaware law would apply under the rule of section 188(2) of the Restatement (Second) of Conflict of Laws, which states:

(2) In the absence of an effective choice of law by the parties (see § 187), the contacts to be taken into account in applying the principles of § 6 to determine the law applicable to an issue include:
(a) the place of contracting,
(b) the place of negotiation of the contract,
(c) the place of performance,
(d) the location of the subject matter of the contract, and
(e) the domicil, residence, nationality, place of incorporation and place of business of the parties.

Out of the five factors listed under section 188(2), the only factor favoring the application of Delaware law is the fact the place of incorporation was Delaware. The place of performance, place of contracting, location of the subject matter and the appellees’ residence were all in Pennsylvania.

Order affirmed.

MONTEMURO, J., concurs in the result.

Decision rendered prior to MONTEMURO, J., leaving the bench.

      . Rule 3121. Stay of Execution.
      Setting Aside Execution
      (b) Execution may be stayed by the court as to all or any part of the property of the defendant upon its own motion or application of any party in interest showing
      (1) a defect in the writ, levy or service; or
      (2) any other legad or equitable ground therefor.

      . Section 160 of the Delaware Corporations Law, 8 Del.Code Ann. § 160 states:
      (a) Every corporation may purchase, redeem, receive, take or otherwise acquire, own and hold, sell, lend, exchange, transfer or otherwise dispose of, pledge, use and otherwise deal in and with its own shares; provided, however, that no corporation shall:

        (1) Purchase or redeem its own shares of capital stock for cash or other property when the capital of the corporation is impaired or when such purchase or redemption would cause any impairment of the capital of the corporation, except that a corporation may purchase or redeem out of capital any of its own shares which are entitled upon any distribution of its assets, whether by class or series of its stock if such shares will be retired upon their acquisition and the capital of the corporation reduced in accordance with §§ 243 and 244 of this title. Nothing in this subsection shall invalidate or otherwise affect a note, debenture or other obligation of a corporation given by it as consideration for its acquisition by purchase, redemption or exchange of its shares of stock if at the time such note, debenture or obligation was delivered by the corporation its capital was not then impaired or did not thereby become impaired.

      . § 1551. Distributions to shareholders
      (b) Limitation. — A distribution may not be made if, after giving effect thereto:
      (1) the corporation would be unable to pay its debts as they become due in the usual course of its business; or
      (2) the total assets of the corporation would be less than the sum of its total liabilities plus (unless otherwise provided in the articles) the amount that would be needed, if the corporation were to be dissolved at the time as of which the distribution is measured, to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the distribution.
      15 Pa.C.S. § 1551.


author: HOFFMAN, Judge:

text:
    617 A.2d 351
    COMMONWEALTH of Pennsylvania, Appellant, v. James SHOOP.
    Superior Court of Pennsylvania.
    Argued Sept. 1, 1992.
    Filed Dec. 3, 1992.

      Dennis C. McAndrews, Asst. Dist. Atty., Media, for Com.
    Michael J. Malloy, Asst. Public Defender, Media, for appellee.
    Before CIRILLO, POPOVICH and HOFFMAN, JJ.
   HOFFMAN, Judge:

This is an appeal from an order granting appellee’s, James Shoop, motion challenging a temporary assignment of issuing authority and ordering that re-arrest be issued through District Court Justice LaRosa. Appellant, Commonwealth of Pennsylvania, presents the following question:

Did the trial court err in holding that where a criminal defendant is discharged at a preliminary hearing, a subsequent preliminary hearing following rearrest must be heard by the same District Justice who discharged defendant at the initial preliminary hearing?

Appellant’s Brief at 3. For the reasons set forth below, we reverse the order of the trial court.

On June 18, 1990, the Commonwealth charged appellee with multiple counts of arson and related offenses. A preliminary hearing was conducted before Delaware County District Justice Barbara LaRosa on August 6, 9 and 10, 1990. At the conclusion of the preliminary hearing testimony, District Justice LaRosa dismissed all charges and counts. Appellant then sought re-arrest of appellee and on August 15, 1990 requested through the district court administrator reassignment of the case to another district justice for a rehearing. On August 22, 1990, the district court administrator made a recommendation to the Court of Common Pleas of Delaware County concerning the reassignment.

On September 4, 1990, pursuant to Rule 17 of the Rules Governing Standards of Conduct of District Justices, the Court of Common Pleas of Delaware County signed an order directing assignment of the case to Delaware County District Justice Maureen Fitzpatrick. Subsequently, on October 9, 1990, appellee filed a motion with the common pleas court to change the venue of the preliminary hearing and reassign the case back to District Justice LaRosa. The common pleas court held further hearings and accepted argument from both parties. The court then granted appellee’s motion and ordered the case resubmitted for rehearing before District Justice LaRosa. This timely appeal followed.

Appellant’s sole contention upon appeal is that the trial court erred in reassigning the preliminary hearing on appellant’s re-arrest to District Justice LaRosa, the same district justice who discharged appellee at his first preliminary hearing. We agree.

We first point out that there are no rules of criminal procedure addressing re-arrest procedure. See Commonwealth ex rel. Fitzpatrick v. Mirarchi, 481 Pa. 385, 394, 392 A.2d 1346, 1350 (1978) (“[T]he Pennsylvania Rules of Criminal Procedure ... are silent on the subject of re-arrest.”). However, Rule 17 of the Rules Governing Standards of Conduct of District Justices provides that “[t]he president judge of the court of common pleas of a judicial district shall exercise general supervision and administrative control over district justices within his judicial district.” Id. This rule appropriately vests the presiding common pleas judge with control over the assignment of district justices within his judicial district.

In its opinion, the trial court held that Commonwealth v. Kline, 521 Pa. 281, 555 A.2d 892 (1989) was dispositive of the instant case. In Kline, a plurality of the Supreme Court held that “[w]here there is no showing of partiality on the part of the issuing authority who sits in the magisterial district in which venue lies, the president judge abuses his or her discretion by granting a motion for the temporary assignment of issuing authority to serve in that district.” Kline at 286, 555 A.2d at 894. While Kline would otherwise be dispositive of the action at bar, it is in conflict with more recent Supreme Court decisions and therefore will not be followed.

It is clear that determinations of district justices at preliminary hearings are interlocutory and non-appealable. See Liciaga v. Court of Common Pleas, 523 Pa. 258, 566 A.2d 246 (1989); In re Riggins, 435 Pa. 321, 254 A.2d 616 (1969). In Liciaga, the Supreme Court explained that “[sjince our law does not provide an additional avenue to explore the challenge of an alleged improper dismissal of a defendant at the preliminary hearing stage, if the Commonwealth seeks to reinstitute charges, it must refile the same charges before a different magistrate.” Liciaga, 523 Pa. at 267, 566 A.2d at 250; see also Riggins, 435 Pa. at 321, 254 A.2d at 617 (“[W]hen the Commonwealth believes that a defendant has been improperly discharged by a committing magistrate its remedy is to have the defendant re-arrested and taken before another magistrate.”).

To apply Kline to the instant matter would be to contradict the above stated rationale behind denying appeals of preliminary determinations of district justices. If the Commonwealth were not permitted to re-arrest a defendant and have a preliminary hearing before a different district justice, the Commonwealth would be estopped from having an “additional avenue to explore the challenge of an alleged improper dismissal.” Accordingly, where the Commonwealth in good faith alleges improper dismissal by a district justice, it must have the opportunity to bring the re-arrest before another district justice.

Since in the instant action the Commonwealth has in good faith alleged that District Justice LaRosa erred in dismissing its arrest petition, we direct the Court of Common Pleas of Delaware County to reassign the re-arrest preliminary hearing to another district justice within the Judicial District of Delaware County.

Accordingly, we reverse the order of the common pleas court and order reassignment as instructed.

Order reversed.

      . We point out that although this appeal is interlocutory, the court order is nonetheless appealable. In Commonwealth v. Sufrich, 320 Pa.Super. 56, 466 A.2d 1058 (1983), this court stated that an ex parte order by the court of common pleas transferring summary criminal proceedings to another district justice, at the request of the Commonwealth, was a change of venue in a criminal proceeding and therefore appealable. See Pa.R.A.P. 311(a)(3). The case at hand likewise involves a request for transfer to another district justice. Accordingly, the trial court’s grant of appellee’s petition for change of venue back to the original district justice is appealable.

      . As Kline is a plurality opinion, its holding is not binding.

      . At the preliminary arrest hearing, the Commonwealth presented extensive factual and expert testimony over the course of three days. See Appellee’s Brief at 7; Commonwealth’s Brief at 9. Moreover, the Commonwealth’s request for reassignment in this case does not follow a series of repeated re-arrests. Hence, we find the Commonwealth’s allegation of error on the part of the original district justice to be in good faith. However, this court recognizes that there may be instances in which the Commonwealth’s actions requesting alternate district justices may be intended to harass the defendant. In such situations, the Commonwealth’s contention of error on the part of the original district justice would not be in good faith and reassignment to a different district justice would be improper.


author: KELLY, Judge: CIRILLO, Judge,

text:
    617 A.2d 354
    Nancy Marcum LANGSTON, Appellee, v. NATIONAL MEDIA CORPORATION and Media Arts International, Ltd., Appellants.
    Superior Court of Pennsylvania.
    Argued Jan. 30, 1992.
    Filed Nov. 20, 1992.

      Mark L. Alderman, Philadelphia, for appellants.
    Sheldon L. Albert, Philadelphia, for appellee.
    Before CIRILLO, DEL SOLE and KELLY, JJ.
   KELLY, Judge:

In this opinion we are called upon to determine, inter alia, whether the Uniform Arbitration Act, 42 Pa.C.S.A. § 7301 et seq. (the Arbitration Act) precludes a trial court from granting equitable relief in the nature of a preliminary injunction prior to a determination of whether the underlying dispute is, in fact, arbitrable. We conclude that the Act does not abrogate the trial court’s power to issue injunctive relief and affirm the order of the trial court awarding same against Media Arts International.

The relevant facts and procedural history are as follows. Appellee, Nancy Langston, was employed as president of appellant, Media Arts International (MAI). Appellant, National Media Corporation (NMC) is the corporate parent of MAI. Appellee’s employment with appellant, MAI, was pursuant to a written employment agreement which, in relevant part, provided:

(d) In the event that the Executive disputes a determination that Cause exists for terminating her employment hereunder pursuant to paragraph 10(b), or Company disputes a determination that Good Reason exists for Executive’s resignation of her Employment pursuant to paragraph 10(c)(2)(i), either party disputing such determination shall serve the other with written notice of such dispute (“Dispute Notice”) within thirty (30) days after receipt of the Dismissal Notice or Notice of Resignation for Good Reason. Within fifteen (15) days thereafter, the Executive or the Company, as the case may be, shall, in accordance with the Rules of the American Arbitration Association (AAA), file a petition with the AAA for arbitration of the dispute, the costs thereof to be shared equally by the Executive and the Company unless an order of the AAA provides otherwise. In the event the Executive serves a Dispute Notice upon the Company, an amount equal to the portion of the Base Salary Executive would be entitled to receive pursuant to 10(e) (l)(i) shall be placed by the Company in an interest-bearing escrow account mutually agreeable to the parties or the Company shall deliver for the benefit of the Executive an irrevocable letter of credit containing terms, including those relating to the accrual of interest, mutually agreeable to the parties.

Employment Agreement, 12/17/90 at 18-19 (emphasis added).

In early September, 1991, a dispute arose as to whether appellee had voluntarily resigned her position as president of MAI or whether she had been terminated. Appellee, believing she had been wrongfully terminated, commenced an arbitration proceeding by filing a demand for arbitration -with the American Arbitration Association. When appellant, MAI, failed to place any money in escrow or pay its share of the administrative costs of arbitration, appellee sought a preliminary injunction directing both MAI and NMC, as parent corporation, to deposit in escrow that portion of her salary she would be entitled to pursuant to the Employment Agreement and pay their share of the arbitration administrative fees. Appellants answered the petition for a preliminary injunction raising the lack of an arbitrable issue as well as the absence of authority for the trial court to issue such an injunction in a matter subject to arbitration. A hearing was held thereafter, and the trial court subsequently issued an order granting appellee’s petition for a preliminary injunction and directing appellants to deposit $872,812.00 in escrow along with paying one-half of the arbitration fee. This timely appeal followed.

On appeal appellants raise the following issues for our consideration:

1. WHETHER THE TRIAL COURT CORRECTLY GRANTED ANCILLARY INJUNCTIVE RELIEF IN AN ACTION BROUGHT UNDER THE PROVISIONS OF THE UNIFORM ARBITRATION ACT, WHICH IS A MANDATORY, EXCLUSIVE AND ADEQUATE STATUTORY REMEDY?
2. WHETHER THE TRIAL COURT CORRECTLY GRANTED RELIEF ANCILLARY TO THE UNDERLYING ARBITRATION WITHOUT COMPELLING ARBITRATION?
3. WHETHER THE TRIAL COURT ERRED BY CONCLUDING THAT APPELLEE HAD DEMONSTRATED A RIGHT TO ISSUANCE OF A PRELIMINARY INJUNCTION?
4. WHETHER THE TRIAL COURT PROPERLY ENTERED A MANDATORY PRELIMINARY INJUNCTION AGAINST APPELLANT NATIONAL MEDIA CORPORATION (“NMC”), WHO WAS NOT A PARTY TO ANY ARBITRATION AGREEMENT BUT MERELY WAS GUARANTOR OF THE FINANCIAL OBLIGATIONS OF APPELLANT MEDIA ARTS INTERNATIONAL, LTD. (“MAI”) UNDER THE CONTRACT AT ISSUE?
5. WHETHER THIS COURT SHOULD CONTINUE THE STAY OF THE INJUNCTION PENDING FINAL DISPOSITION OF THIS APPEAL?

Appellants’ Brief at 2.

Initially, appellants contend that the trial court erred in granting appellee injunctive relief because such relief is outside the scope of the trial court’s authority pursuant to the Uniform Arbitration Act. 42 Pa.C.S.A. § 7801 et seq. According to appellants, appellee’s sole avenue of relief was a petition to compel arbitration pursuant to the Employment Agreement. Accordingly, under the Arbitration Act, the court’s only authority was to either compel or refuse to compel arbitration, depending on the court’s decision as to the arbitrability of the underlying issue. Any other action by the trial court, such as the ancillary relief granted herein, is precluded by the Arbitration Act and is, therefore, improper.

Whether a trial court has subject matter jurisdiction to grant injunctive relief in a dispute subject to arbitration presents an issue of first impression in this Commonwealth. The trial court found guidance in the reasoning of the federal courts which have addressed this exact question under the Federal Arbitration Act. 9 U.S.C. §§ 1-16. In so doing, the court concluded that it did possess the power to grant injunctive relief pending the outcome of the arbitration proceedings. For the following reasons, we agree with the trial court that it possessed subject matter jurisdiction to issue the injunctive relief herein.

Recently, in Dickler v. Shearson Lehman Hutton, Inc., 408 Pa.Super. 286, 596 A.2d 860 (1991), this Court was asked whether a claim for equitable relief was outside the parties’ arbitration agreement and whether arbitrators are empowered to dispense equitable relief under the Arbitration Act. In concluding that arbitrators are empowered to dispense equitable relief, this Court recognized that Pennsylvania, as a matter of public policy, had fallen in line with the federal authorities in its recognition and acceptance of arbitration as a necessary tool for relieving crowded dockets and ensuring the swift and orderly settlement of disputes. Id. at 293, 596 A.2d at 863-64; see also Waddell v. Shriber, 465 Pa. 20, 348 A.2d 96 (1975); Elkins & Co. v. Suplee, 371 Pa.Super. 570, 538 A.2d 883 (1988).

Looking to federal authorities for guidance on the instant question, we find that it is precisely this underlying recognition of the purpose for and necessity of arbitration which has influenced the federal circuit courts in finding authority in the federal district courts to issue injunctive relief prior to the determination of the arbitrability of the underlying dispute. Without such authority, the federal courts have concluded, the utility of arbitration as a vehicle for dispute resolution would be ultimately rendered asunder, as the underlying controversy is rendered moot.

For example, in Teradyne v. Mostek Corp., 797 F.2d 43 (1st Cir.1986), the Court held that a district court had not erred in granting the plaintiff injunctive relief to insure that the defendant did not dispose of its assets which could satisfy a potential award. Id. at 47-51. This was so even though the underlying dispute had yet been declared arbitrable. The Court summarized the rationale for such a rule as follows:

[T]his approach reinforces rather than detracts from the policy of the Arbitration Act____ We believe that the congressional desire to enforce arbitration agreements would frequently be frustrated if the courts were precluded from issuing preliminary injunctive relief to preserve the status quo pending arbitration and, ipso facto, the meaningfulness of the arbitration process.

Id. at 51. Indeed, the Court concluded that arbitration would become a “hollow formality” if parties were able to irretrievably alter the status quo pending the outcome of the underlying dispute. Id.

In Ortho Pharmaceutical Corp. v. Amgen, Inc., 882 F.2d 806 (1989), the Third Circuit fell into line with the overwhelming majority of the federal circuits in concluding that a district court possessed the authority to grant injunctive relief in an arbitrable dispute. Therein the Court reasoned that because arbitration agreements generally reflected the parties’ intention to abide by an orderly process of dispute resolution, it would be error to “construe such an agreement as constituting a ‘waiver’ by either party of the right to seek preliminary injunctive relief necessary to prevent one party from eviscerating the significance of the agreed-upon procedures.” Id. at 812. See also Blumenthal v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 910 F.2d 1049, 1051-1054 (2d Cir.1990); Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Bradley, 756 F.2d 1048, 1052-1054 (4th Cir.1985); Sauer-Getriebe KG v. White Hyraulics, Inc., 715 F.2d 348 (7th Cir.1983), cert. denied, 464 U.S. 1070, 104 S.Ct. 976, 79 L.Ed.2d 214; PMS Distributing Co., Inc. v. Huber & Suhner, A.G., 854 F.2d 355, 358 (9th Cir.1988) (citing Teradyne, supra, for holding that Federal Arbitration Act does not preclude district court from granting a writ of possession pending the outcome of arbitration); Ferry-Morse Seed Co. v. Food Corn, Inc., 729 F.2d 589 (8th Cir.1984) (affirming the grant of preliminary injunctive relief in an arbitrable dispute); but see Merrill Lynch, Pierce, Fenner & Smith v. Hovey, 726 F.2d 1286, 1291-92 (8th Cir.1984) (“where the Arbitration Act is applicable and no qualifying contractual language has been alleged, the district court errs in granting injunctive relief’); Korn v. Ambassador Homes, Inc., 546 So.2d 756, 757 (Fla.App. 3 Dist.1989).

We find the analysis of the federal courts particularly persuasive given the fact that the applicable provisions of both the Federal Arbitration Act, 9 U.S.C. §§ 3-4, and the Uniform Arbitration Act, 42 Pa.C.S.A. § 7304, are materially similar and both the federal courts and courts of this Commonwealth favorably recognize the settlement of disputes by arbitration. Therefore, in recognition of the pro-arbitration policies reflected in the enactment of the Uniform Arbitration Act and case law of this Commonwealth, we hold that a trial court has authority to grant injunctive relief in an arbitrable dispute, even though the' underlying dispute has not yet been declared arbitrable, provided the prerequisites for such relief are justified. Having so concluded, we must now determine whether the trial court properly issued the preliminary injunction in the case sub judice.

Appellants argue that even if the trial court possessed the authority to grant injunctive relief, such relief was inappropriate herein. Because appellee failed to establish that an injunction was necessary to prevent irreparable harm, or that a greater injury would result if the petition was refused, or that it was necessary to maintain the status quo, appellants conclude the trial court erred in granting the injunctive relief requested. We cannot agree.

It is well settled that when reviewing an order entering a preliminary injunction, we examine the record only to determine if there were any reasonable grounds for the action of the trial court. Three County Services, Inc. v. Philadelphia Inquirer, 337 Pa.Super. 241, 245, 486 A.2d 997, 999 (1985). We will not inquire into the merits of the underlying controversy. Id. “Only if it is plain that no grounds exist to support the decree or that the rule of law relied upon was misapplied will we interfere with the decision of the chancellor.” Coatesville Development Co. v. United Ford and Commercial Workers, AFL-CIO, 374 Pa.Super. 330, 337-38, 542 A.2d 1380, 1384 (1988) (en banc). Moreover, the purpose of a preliminary injunction is to “preserve the status quo as it exists or existed before the acts of which the plaintiff complains.” Churchill Corporation v. Third Century, Inc., 396 Pa.Super. 314, 328, 578 A.2d 532, 539 (1990). In order to be granted a preliminary injunction, a plaintiff must prove that the injunction is necessary to prevent an irreparable harm, the right to relief is clear, and the need for relief is immediate. Id. If issued, the preliminary injunction should be no broader than necessary for the plaintiffs interim protection. Three County Services, supra, 337 Pa.Super. at 246, 486 A.2d at 1000.

The trial court found that appellee’s right to equitable relief was clearly provided for in the employment contract with MAI. The express provision in the Employment Agreement required MAI, upon appellee’s petition to compel arbitration, to deposit in escrow an amount equal to the base portion of appellee’s salary while the underlying dispute is adjudicated. The court concluded that

[t]he parties consented to such a preliminary remedy in order to protect Langston’s interest prior to adjudication, whether by arbitration or in a court of law. To now decide that she has only a legal remedy to recover the money would run counter to the intent of the contracting parties, expressed in their agreement, to give her such equitable relief, pending the resolution of her underlying claim. To rule otherwise would render the escrow clause a nullity.

Trial Court Opinion at 6. We agree with the trial court that appellee was entitled to an injunction against MAI, requiring MAI to comply with the specific provisions of the employment contract.

However, that portion of the injunction relating to NMC must be vacated. NMC was not a party to the arbitration provisions of the contract. Moreover, while NMC is a guarantor under the terms of the contract, see Employment Agreement, 12/17/90 at 13, MAI has not yet defaulted on its obligation to deposit the required funds in escrow under the terms of the contract. Accordingly, NMC’s obligation as guarantor has not yet arisen, and as such, the order imposing an injunction against NMC must be vacated. See National Loan and Building Ass’n v. Lichtenwalner, 100 Pa. 100 (1882); Woods v. Sherman, 71 Pa. 100 (1872); Hoffman v. Bechtel, 52 Pa. 190 (1866) (a contract of guaranty is only a contingent one, which becomes absolute, by due and unsuccessful diligence to obtain satisfaction from the principal, or by circumstances that excuse diligence). See also Atlantic Corporation v. Ohio Valley Provision Co., 489 Pa. 389, 414 A.2d 123 (1980); Pennsylvania House, Inc. v. Barrett, 760 F.Supp. 439 (M.D.Pa.1991).

From the foregoing we hold that a trial court possesses the authority to issue injunctive relief in an arbitrable dispute and that the injunction in the instant case was properly issued against MAI. Accordingly, we affirm the order of the trial court directing appellant MAI, to place $872,812.00 in escrow and pay one-half the administrative costs of arbitration.

Order Affirmed in part, and Vacated in part. Jurisdiction relinquished.

CIRILLO, J., filed a concurring and dissenting opinion.

CIRILLO, Judge,

concurring and dissenting.

I agree with the majority’s conclusion that pursuant to the underlying policies of common law arbitration, 42 Pa.C.S.A. § 7341, and the case law of this Commonwealth, a trial court has authority to grant injunctive relief pending the determination of arbitrability. However, I dissent from that portion of the opinion which affirms the trial court’s grant of a preliminary injunction against MAI. Although the majority correctly vacated the portion of the injunction relating to NMC, I find that Langston failed to carry her burden of proof for an award of injunctive relief as to both NMC and MAI. Three County Services, Inc., supra.

Although a trial court possesses the authority to grant injunctive relief in an arbitrable dispute, even though the underlying dispute has not yet been declared arbitrable, the prerequisites for injunctive relief must still be met. In order to grant a preliminary injunction, the plaintiff must prove that the injunction is necessary to prevent an irreparable harm, the right to relief is clear, and the need for relief is immediate. Churchill Corp. v. Third Century, Inc., 396 Pa.Super. 314, 328, 578 A.2d 532, 539 (1990). In addition, the plaintiff must show that greater injury will result from refusing the injunction than in granting it. Hospital Association of Pennsylvania v. Commonwealth Dept. of Public Welfare, 495 Pa. 225, 433 A.2d 450 (1981). The requisites for a preliminary injunction are cumulative; thus, if one element is lacking, relief may not be granted. Leonard v. Thornburgh, 75 Pa.Commw. 553, 463 A.2d 77 (1983).

The majority reasons that Langston’s right to equitable relief was clearly provided for in the employment contract with MAI. I disagree. Langston did not demonstrate that she had a clear right to relief. Churchill, supra. Pursuant to the employment contract between Langston and MAI, Langston could demand arbitration only when there existed a dispute over the “termination” of her employment. The majority, in line with the trial court’s decision, holds that this language provides her with a right to equitable relief. To the contrary, the preponderance of the evidence at trial did not demonstrate such a clear right to relief. There was no evidence put forth that MAI or NMC terminated Langston; rather, most of the evidence indicates that she had voluntarily resigned. Since Langston was not “terminated,” she possessed no contractual right to demand arbitration in the first instance, let alone the right to compel NMC and/or MAI to escrow funds or share arbitration fees. It is my belief, therefore, that Langston did not show a clear right to relief.

Even though the Pennsylvania Supreme Court has stated that the “clear right” requirement is not intended to mandate that one seeking a preliminary injunction establish his or her claim absolutely, a plaintiff must still show that there is a threat of immediate and irreparable harm, and that the injunction would do no more than to restore the status quo. Fischer v. Dept. of Public Welfare, 497 Pa. 267, 270-271, 439 A.2d 1172, 1174 (1982). Langston failed to demonstrate that she suffered any potential or immediate irreparable harm that could not be remedied later through monetary damages. Langston claimed that the injunction was necessary to prevent harm that could not be compensated by damages because of the alleged financial stress to NMC as a result of federal court litigation brought against it. She feared that an adverse result in the federal action would prevent her from collecting a possible judgment or award.

This contention is both factually and legally erroneous. NMC was not a party to the arbitration provisions of the contract; rather, NMC was merely a signatory to the employment agreement. MAI is, therefore, the only party that possessed financial obligations under the arbitration provision of the employment contract. Moreover, since MAI was not a party to the federal lawsuit instituted against NMC, there was no evidence offered that MAI’s ability to comply with its alleged contractual obligations to Langston would be adversely affected by a ruling against NMC in the federal action.

Similarly, neither NMC’s nor MAI’s present or potential financial difficulties constitute a basis for injunctive relief. Our supreme court has held that:

The insolvency of a defendant does not create a situation where there is no adequate remedy at law. In deciding whether a remedy is adequate, it is the remedy itself, and not its possible lack of success that is the determining factor ... The fact, if it be so, that this remedy may not be successful in realizing the fruits of a recovery at law, on account of the insolvency of the defendants, is not of itself a ground of equitable relief.

Willing v. Mazzocone, 482 Pa. 377, 382-383, 393 A.2d 1155, 1158 (1978) (emphasis added). See also In Re Estate of King, 183 Pa.Super. 190, 194-196, 130 A.2d 245, 248 (1957) (court of equity may not be used to recover a money judgment upon the “blanket allegation” of insolvency of defendant). Therefore, even with proof of insolvency, I would find that the trial court incorrectly determined that Langston had proven immediate and irreparable harm since insolvency is not a ground for equitable relief. Willing, supra.

Langston has also failed to show that she will incur greater injury by refusal of the injunction than MAI and NMC would incur were it granted. MAI and NMC will sustain great injury if a stay of the injunction is not granted. Their businesses are cash-intensive; both companies purchase media time and new products for retail sale. Therefore, forcing them to escrow approximately one million dollars pending the outcome of this litigation will tremendously burden business operations. Conversely, Langston has suffered no harm if funds are not placed in escrow. She may maintain an action for breach of cóntract to redress any alleged breaches of her employment contract. Moreover, injunctive relief is not normally available in cases involving employment contract disputes; damage awards are deemed adequate to compensate for losses that result from breaches of contract. Novak v. Commonwealth 514 Pa. 190, 523 A.2d 318 (1987).

I conclude tliat the trial court had no reasonable grounds for granting the preliminary injunctions against either, MAI or NMC. Three County Services, Inc., supra. I would, therefore, grant the request for stay of the injunction.

      . Compare 9 U.S.C. §§ 3-4, which in pertinent part provide
      § 3. If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay is not in default in proceeding with such arbitration.
      4. A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court which, save for such agreement, would have jurisdiction under Title 28, in a civil action or in admiralty of the subject matter of a suit arising out of the controversy between the parties, for an order directing that such arbitration proceed in the manner provided for in such agreement. * * * With 42 Pa.C.S.A. § 7304
      (a) Compelling arbitration. — On application to a court to compel arbitration made by a party showing an agreement described in section 7303 (relating to validity of agreement to arbitrate) and a showing that an opposing party refused to arbitrate, the court shall order the parties to proceed with arbitration. If the opposing parly denies the existence of an agreement to arbitrate, the court shall proceed summarily to determine the issue so raised and shall order the parties to proceed with arbitration if it finds for the moving party. Otherwise, the application shall be denied.
      (d) Stay of judicial proceedings. — An action or proceeding, allegedly involving an issue subject to arbitration, shall be stayed if a court order to proceed with arbitration has been made or an application for such an order has been made under this section. If the issue allegedly subject to arbitration is severable, the stay of the court action or proceeding may be made with respect to the severable issue only. If the application for an order to proceed with arbitration is made in such action or proceeding and is granted, the court order to proceed with arbitration shall include a stay of the action or proceeding.

      . In the event the Executive serves a Dispute Notice upon the Company, an amount equal to the portion of the Base Salary Executive would be entitled to receive pursuant to 10(c)(l)(i) shall be placed by the Company

        in an interest-bearing escrow account mutually agreeable to the parties or the Company shall deliver for the benefit of the Executive an irrevocable letter of credit containing terms, including those relating to the accrual of interest, mutually agreeable to the parties.
      Employment Agreement, 12/17/90 at 18-19 (emphasis added).

      . We note that the express provisions of this Court's January 9, 1992 Order staying the injunction pending appeal provided that the stay was in effect only until January 30, 1992. Our review of the record reveals no indication that appellants sought an additional stay of the injunction. Hence, the stay expired by the express provisions of this Court’s order on January 30, 1992.

      . Langston had threatened to resign three times in eleven months, including when she sought renegotiation of the employment agreement at issue. No one from MAI or NMC ever informed Langston that she had been terminated. Additionally, Mr. Turchi, Chairman and Chief Executive Officer of NMC, requested that Langston call him to discuss matters. The next day, however, Langston called her attorney at 6:30 a.m. without calling Mr. Turchi or any other representatives of MAI or NMC. After hearing nothing from Langston, MAI and NMC believed that she intended to resign and, therefore, sent her a confirmatory letter.