text:
    443 A.2d 338
    COMMONWEALTH of Pennsylvania v. Walter WILLIAMS, a/k/a Charles Walker, Appellant.
    Superior Court of Pennsylvania.
    Submitted Dec. 5, 1980.
    Filed March 19, 1982.

      Mitchell Scott Strutin, Philadelphia, for appellant.
    Gaele McLaughlin Barthold, Assistant District Attorney, Philadelphia, for Commonwealth, appellee.
    Before BROSKY, JOHNSON and POPOVICH, JJ.
   POPOVICH, Judge:

Appellant, Walter Williams, also known as Charles Walker, appeals from the lower court’s denial of his request for relief under the Post Conviction Hearing Act. On appeal, appellant contends inter alia that his counsel at trial was ineffective for stipulating to the testimony of the complaining witness and for failing to insure that an on-the-record colloquy was held by the trial court before the stipulation was accepted. We agree, and reverse the judgment of sentence and remand for a new trial.

Before addressing the merits of appellant’s claim, we must examine the question of waiver. The facts which are necessary to a resolution of the waiver question are as follows:

On March 26, 1975, appellant was tried before a judge, sitting without a jury, and found guilty of theft by unlawful taking or disposition, receiving stolen property, and unauthorized use of an automobile. Post-verdict motions were denied, and appellant was sentenced to concurrent terms of two and three years of non-reporting probation. During this stage of the proceedings, appellant was represented by the Public Defender’s Office of Philadelphia County.

On May 7, 1976, appellant was arrested and charged with forgery, and other related offenses. He was found guilty of receiving stolen property and sentenced to a term of one year probation.

Again, appellant was arrested and charged with eight counts of forgery and theft by deception. Appellant entered pleas of guilty to these charges and was sentenced to terms of one to two years imprisonment.

Because the two convictions referred to above constituted violations of appellant’s probation, his probation was revoked, and appellant was sentenced to a consecutive term of imprisonment of not less than three nor more than seven years in prison. No sentence was imposed on the unauthorized operation conviction because it merged with the theft conviction. At the probation revocation proceedings, appellant was represented by private counsel. A direct appeal was filed pro se from the judgment of sentence imposed; however, the appeal was discontinued on the advice of counsel, a public defender from Philadelphia County.

To begin with, the merits of an issue cannot be addressed in a post-conviction proceeding where:

“(1) the petitioner knowingly and understandingly failed to raise it and it could have been raised before the trial, at the trial, on appeal, in a habeas corpus proceeding or any other proceeding actually conducted, or in a prior proceeding actually initiated under this act; and
(2) the petitioner is unable to prove the existence of extraordinary circumstances to justify his failure to raise the issue.” 19 P.S. § 1180-4(b). (Supp.1981-82).

In this context, § 1180-4(c) provides that:

“[t]here is a rebuttable presumption that a failure to appeal a ruling or to raise an issue is a knowing and understanding failure.”

We also have recognized that the

“knowing failure to appeal from [an] order of probation constitutes a waiver of the right to challenge the validity of the conviction upon which the probation order is based.” Commonwealth v. Gilmore, 465 Pa. 202, 205, 348 A.2d 425, 427 (1975) (emphasis added). Accord, Commonwealth v. Nance, 290 Pa.Super. 312, 316, 434 A.2d 769, 771 (1981).

Although the trial court stated that the issue appellant raised concerning the stipulation was meritorious, the court denied relief because “the defendant fail[ed] to take a direct appeal and has offered no evidence to rebute [sic] the presumption that his failure to raise the issue on appeal constituted a knowing and intelligent waiver of such right.” Trial Court Opinion at 4. We must disagree with the trial court because:

“[w]hen a defendant fails on direct appeal to raise [the] ineffectiveness of trial counsel, the issue of ineffectiveness is not waived if his trial counsel was or would have been his appellate counsel.” Commonwealth v. Davis, 267 Pa. Super. 118, 121, 406 A.2d 547, 548 (1979) (Emphasis added) (Citations omitted). Accord Commonwealth v. Mabie, 467 Pa. 464, 471, 359 A.2d 369, 371-372 (1976).

In a similar case, Commonwealth v. Mabie, id., we applied the above stated principle and explained further:

“[h]ere, since trial counsel, who Mabie [the defendant] contends was ineffective, would have been required to file post-verdict motions and a direct appeal on the issue of his own ineffectiveness were such procedures initiated, it is similarly unrealistic to expect counsel to file motions and/or an appeal challenging his own ineffectiveness. Therefore, where a PCHA petition alleges as grounds for relief that trial counsel, with whom petitioner consulted concerning the feasibility of appeal, has been ineffective and where trial counsel has not taken a direct appeal on behalf of the petitioner, the question of whether trial counsel was ineffective has not been waived for purposes of review in a PCHA proceeding.” (Footnote omitted) (Emphasis added).

In the instant case, the testimony which was elicited at the PCHA proceedings concerned whether appellant had requested his trial attorney, a public defender, to appeal the case. Thus, it is clear that appellant’s “trial counsel . . . would have been his appellate counsel”, id., and for that reason, appellant’s failure to appeal precludes a finding of waiver.

Interestingly enough, the prosecution concedes that “this is the first opportunity [that the appellant] has had to advance” a claim of trial counsel’s ineffectiveness (see, Brief for the Prosecution at 9 ftn. 9); however, the prosecution contends that the question concerning the stipulation, “although couched in terms of ineffective assistance of counsel,” is not a true ineffectiveness claim and is “really [a claim] that he should have been colloquy by the trial.” Id. at 3-4. We must reject the prosecution’s contention.

In his brief, appellant posed the following question: “Was trial counsel ineffective for: a. Stipulating to the testimony of the complaining witness and failing to insure that an on-the-record colloquy was held by the Court before acceptance of the stipulation.” Brief for Appellant at 2.

Thus, there is no doubt that appellant’s claim is an attack on counsel’s stewardship at trial, and, hence, contrary to the prosecution’s contention, is a true ineffectiveness claim.

Additionally, even though appellant was represented at the probation revocation hearing by a private attorney, who was other than his trial counsel, we have said that “[a] probation revocation hearing is not an appeal within the meaning of Commonwealth v. Dancer, 460 Pa. 95, 331 A.2d 435 (1975)] and therefore not a proper forum for challenging the validity of the [conviction] upon which the probation is based.” Commonwealth v. Eagle, 248 Pa.Super. 267, 271, 375 A.2d 90, 92 (1977) (Emphasis added). We note also that appellant’s notice of appeal from the judgment of sentence imposed following the revocation of probation was filed pro se and was discontinued upon the advice of the Public Defender. Under these circumstances, the withdrawal of the appeal by the Public Defender, whose ineffectiveness would have been challenged, does not waive the issue. See Commonwealth v. Mabie, supra. Therefore, since the PCHA stage was the “earliest stage in the proceedings at which the counsel whose ineffectiveness is being challenged no longer representad] the [appellant]”, the issue of trial counsel’s ineffectiveness has been preserved for appellate review. See Commonwealth v. Hubbard, 472 Pa. 259, 276 n. 6, 372 A.2d 687, 695 n. 6 (1977).

Turning now to the merits of appellant’s ineffectiveness argument, we must, when analyzing appellant’s claim, apply a two step approach. The first step is to ascertain whether the claim counsel abandoned is of arguable merit. See Commonwealth v. Hubbard, 472 Pa. 259, 372 A.2d 687 (1977). However, even then, if the abandoned claim is of arguable merit, a defendant is not entitled automatically to relief. Rather, “a finding of ineffectiveness could never be made unless we conclude[ ] that the alternatives not chosen offered a potential for success substantially greater than the tactics actually utilized.” Commonwealth v. Hubbard, 472 Pa. 259, 277-8, 372 A.2d 687, 695-6 (1977).

With this framework in mind, the record of the instant case reveals the following:

At trial, appellant’s counsel stipulated that if the owner of the automobile, William Brown, was called to testify, he would have testified as follows:

“that he reported his automobile stolen early in the morning of November 2nd, 1974; that he gave no one permission to operate the automobile, and that he did not know anybody by the name of Charles Walker [, the appellant]; that he reported his automobile stolen on the morning of 11/2/74. That would be the stipulation entered into and offered by and between the defense and the Commonwealth.” (Trial Transcript, 3/26/75 at 12).

Appellant contends that because trial counsel entered into the stipulation and also because counsel failed to object to the trial court’s failure to conduct an on-the-record colloquy as required by Commonwealth v. Davis, 457 Pa. 194, 322 A.2d 103 (1974), a reversal is required. We agree.

In Davis:

“our Supreme Court recognized that testimony entered by counsel’s stipulation may be so damaging that admission of the stipulation at trial must be surrounded by safeguards similar to those attending the entry of a guilty plea. There, it was stipulated that the complaining witness, if present at trial, would have testified that the defendant was one of two men who had robbed him at gunpoint. The Court concluded that counsel’s stipulation to this testimony placing his client at the scene of the crime and naming him as a participant therein was the equivalent to an admission of guilt by the defendant, despite his plea of not guilty. By stipulating to the testimony that would have been offered by the complaining witness, appellant gave up the opportunity to cross-examine that witness and to attempt to discredit his incriminating testimony. Under the circumstances of the case the stipulation made a not guilty verdict highly unlikely. Therefore, an on-record colloquy, demonstrating defendant’s understanding of the consequences of the stipulations, and his consent thereto, was deemed necessary.” Commonwealth v. Bridell, 252 Pa.Super. 602, 605, 384 A.2d 942, 943, 944 (1978) (Emphasis added).

Thus, the test to be applied, “essentially, is whether the stipulation in question makes the outcome [of the trial] a foregone conclusion.’ Commonwealth v. Davis, [457 Pa.] at 197, 322 A.2d at 105. See Julian v. United States, 236 F.2d 155 (6th Cir. 1956).” Id. As the trial court so aptly stated:

“The Davis case is clearly applicable to the stipulation in the instant case for the stipulation regarding ownership and non-permission was, in and of itself, sufficient to enable the fact-finder to find the defendant guilty.” Trial Court Opinion at 4.

Needless to say, the issue trial counsel abandoned was of arguable merit since “by stipulating to the testimony that would have been offered by the complaining witness [, William Brown,] appellant gave up the opportunity to cross-examine that witness and to attempt to discredit his incriminating testimony.” Commonwealth v. Bridell, 252 Pa.Super. at 605, 384 A.2d at 944. Accordingly, the stipulation entered into by counsel made “the outcome [of the trial] a foregone conclusion”. Id.

At the PCHA hearing, trial counsel testified concerning his reasonable basis for entering into the stipulation as follows:

“[The Prosecution, Charles Fisher]
Q. Based on the Notes of Testimony and what I have shown you do you recall the trial involving Mr. Walker? [Trial Counsel, John Kelly]
A. I recall going to trial with Mr. Walker and I recall the circumstances of the trial. I do not recall the exact things that happened at the trial.
Q. Do you recall entering into a stipulation as to ownership and non-permission of a certain automobile?
A. I do not recall entering into a stipulation.
Q. Do you recall any discussion with Mr. Williams concerning that stipulation?
A. I do not recall any conversation.
Q. Okay. Was it your practice to enter into a stipulation as to ownership and non-permission or any other type of stipulation without consulting first with the defendant? A. The practice would be to consult with the client. Q. Do you recall Mr. Williams asking you during the course of this trial or telling you that he wanted a jury trial and not a waiver trial?
A. I do not recall that.
Q. Do you recall Mr. Williams ever indicating to you that he wanted certain witnesses in Court that were not in Court?
A. I don’t recall that but from a review of the Notes there is something in the Notes to that effect.
MR. FISHER: Your Honor, if I may show Mr. Kelly the Notes, page 52 of the Notes of Testimony.
THE COURT: Certainly.
Q. Mr. Kelly, on that page there is a statement made to you by the Court concerning the complaining witness. Could you read that, please?
A. By the complaining witness?
Q. No, a statement by you to the Court.
A. I see. Yes, about half-way down on page 52: “MR. KELLY: I would ask at this time to ask the complaining witness to come in. I would be doing an injustice and be remiss if I didn’t question him.”
Q. Do you recall the circumstances surrounding that request?
A. I just recall vaguely and I couldn’t honestly say that I woiild have a total recollection of it, but there is some discussion with the client at that time.”
(PCHA Hearing Transcript at 37-38) (Emphasis added).

Although trial counsel’s practice of not entering into a stipulation without the client’s consent may be probative of counsel’s action on a given occasion, see Commonwealth v. Waters, 441 Pa. 511, 273 A.2d 329, (1970), counsel in the instant case did not recall whether appellant had indicated to him that he had wanted certain witnesses in the courtroom and had only a vague recollection of his late request of record to question the complaining witness. Under these circumstances, counsel’s practice of not entering into a stipulation without the client’s consent is not conclusive of counsel’s performance in this case. Rather, counsel’s stewardship must be examined in the context of whether the “alternatives not chosen by counsel offered a potential for success substantially greater than the tactics actually utilized.” Commonwealth v. Hubbard, 472 Pa. at 277, 372 A.2d at 695. Our review of the record fails to uncover a reasonable basis for counsel’s “strategy” of inaction.

First of all, appellant’s defense was that he had permission to use the complaining witness’s automobile. The only witness called by defense was the appellant.

The prosecution’s case consisted of the combined testimony of two police officers who testified that appellant was seen driving William Brown’s automobile at 2:30 A.M. on November 3, 1974. (N.T. 13). The police stopped the car, which was driven by appellant, and he produced an owner’s card that belonged to William Brown. (N.T. 14). Later, William Brown was questioned by police. He told them that “no one had permission to take the car.” (N.T. 17). William Brown further stated that he did not know anyone by the name of Charles Walker. (N.T. 20).

Appellant’s statement, which was given to the police, also was introduced at trial. That statement consisted of the following:

“I was out drinking last night at the Hearts and Flowers Bar located at 13th and Arch with William Brown and he had a lot of drinks. So we left to go to the St. Francis on Walnut with a couple of girls. Well, we went to the St. Francis Hotel at Walnut Street with a couple of girls. Brown went with this girl named Janice, and he was feeling pretty good, so I took his car because I didn’t think he would be using it. I took it to my house, and the next day my wife and I went to the Bamberger Department Store to buy some clothes. Then that night I took the car to the club, and I figured I would see William Brown there, and I would return the car.” (N.T. 28-29).

From the evidence presented at trial, it is obvious that the issue of credibility was an important one in the case.

Additionally, after closing arguments were made by both counsels, appellant’s attorney made a statement which would tend to establish that his actions earlier in the trial were not based on sound trial tactics. Trial counsel said:

“I would ask at this time to ask the complaining witness to come in. I would be doing an injustice if I didn’t question him.
THE COURT: Your request is denied.”
(Trial Transcript at 52).

Under these circumstances, we can say that the course not chosen by counsel (e.g., an objection to the stipulation) offered a potential for success substantially greater than the tactics actually utilized because by counsel stipulating to the testimony, “appellant gave up the opportunity to cross-examine [the] witness and to attempt to discredit his incriminating testimony.” Commonwealth v. Bridell, 252 Pa.Super, at 605, 384 A.2d at 944.

The other aspect of appellant’s claim concerns trial counsel’s failure to object to the fact that no colloquy was taken by the court to demonstrate appellant’s “understanding of the consequences of the stipulations, and his consent, thereto, was deemed necessary.” Id.

For the same reasons previously given, counsel should have interposed an objection to the trial court’s failure to conduct an on-the-record colloquy prior to the stipulation. The purpose of an on-the-record colloquy is to demonstrate that “appellant’s decision to waive his valuable Sixth Amendment right to confront the Commonwealth’s witnesses against him, was a knowing and understanding one.” Commonwealth v. Davis, 457 Pa. at 198, 322 A.2d at 105. In the instant case, when counsel failed to take any action to insure against appellant’s entry of an unknowing waiver and when counsel consented to a stipulation which incriminated appellant, the record reveals that “trial counsel’s strategy amounted to a decision to have his client plead guilty.” Commonwealth v. Davis, Id., 457 Pa. at 199, 322 A.2d at 106. See also Commonwealth v. Doman, 490 Pa. 355, 358, 416 A.2d 507, 509 (1980) (where the prosecution was able to show that the owner had never given anyone else or the defendant permission to drive the automobile and the defendant was operating the automobile at the time he was arrested, the evidence was sufficient to convict appellant of operating a motor vehicle without the consent of the owner).

Accordingly, the record fails to evince any indication that counsel’s strategy was a sound one, and, as a result, the judgment of sentence is reversed, and a new trial is granted.

      . The Act of January 25, 1966, P.L. (1965) 1580, § 1 et seq. as amended, 19 P.S. § 1180-1 et seq.

      . In view of our disposition of the instant appeal, we need not address the other ineffectiveness issues raised by appellant.

      . 18 Pa.C.S.A. § 3921.

      . 18 Pa.C.S.A. § 3925.

      . 18 Pa.C.S.A. § 3928.

      . 18 Pa.C.S.A. § 4101.

      . Appellant also was charged with theft and receiving stolen property-

      . 18 Pa.C.S.A. § 3922.

      . The trial court’s conclusion that appellant knowingly and intelligently waived his right to appeal was based also on the fact that “the defendant did not raise the issue of ineffective assistance of counsel or the right to confront a witness until his probation was revoked approximately two years after it was imposed.” Trial Court Opinion at 5. We cannot agree that the length of time between the original imposition of probation and the attack on counsel’s ineffectiveness is a factor to be considered in our analysis. We have said that the “failure to raise a claim of incompetency [will not be viewed] as a waiver where an individual in the subsequent proceeding is represented by the same counsel or one of his associates.” Commonwealth v. Via, 455 Pa. 373, 377, 316 A.2d 895, 898 (1974). See e.g., Commonwealth v. Nance, 290 Pa.Super. at 317, 434 A.2d at 770 (1981) (where appellant waited more than three years after entering a plea of guilty to attack trial counsel’s ineffectiveness, no waiver found where the defendant was represented throughout by the Public Defender’s Office).


source: Caselaw Access Project

author: OPINION BY POPOVICH, J.:

license: Public Domain

text:
    443 A.2d 344
    JAMES D. MORRISEY, INC., Appellant, v. GROSS CONSTRUCTION CO., INC., Appellee.
    Superior Court of Pennsylvania.
    Argued Feb. 2, 1981.
    Filed March 19, 1982.

      Carl F. Hepler, Jr., Bensalem, for appellant.
    Alan G. Gershenson, Philadelphia, for appellee.
    Before WICKERSHAM, POPOVICH and WATKINS, JJ.
   OPINION BY POPOVICH, J.:

The appellant, James D. Morrisey, Inc., appeals from the lower court’s order denying its “Petition To Vacate Arbitration Award.” We vacate and remand for proceedings consistent with this opinion.

The facts consist of the following: Appellant, a sub-contractor, entered into two separate agreements with appellee, Gross Construction Co., Inc.—a general contractor, concerning two phases of a single job. The first contract was signed in August, 1971 (Phase I) and the second was executed in January, 1974 (Phase II).

On December 23, 1976, appellant filed a two count Complaint in Assumpsit against appellee claiming $12,925.00 in Count I and $749.92 in Count II for goods and services delivered to appellee’s jobsite in the Regency Park Apartments in Philadelphia (Phase II). As with Phase I, Phase II of the work was governed by a written document containing an arbitration provision calling for all controversies arising under the contract to be resolved by means of arbitration. The clause provided in part that: “The rules of the American Arbitration Association shall control and any award rendered in the arbitration shall be binding and conclusive upon the parties and shall not be subject to appeals or retrying by any court. .. . Three arbitrators shall be appointed; Contractor shall designate an arbitrator, Sub-contractor shall designate an arbitrator, and the two arbitrators so chosen shall designate a third.” Thus, when the dispute arose, both sides agreed to submit the matter to binding arbitration, and, in accordance therewith, appellant’s Complaint was discontinued.

On September 1, 1977, appellant filed a demand for arbitration with the American Arbitration Association (AAA). Appellee responded by filing a counterclaim, alleging that $6,907.38 was paid to the appellant for work that was never performed. In answer, appellant amended its original claim to include a request for an additional $29,697.75. According to appellant, such figure related to monies due it from appellee for services rendered under the August, 1971 agreement (Phase I). In particular, appellant averred appellee owed it: (a) $20,900.00 for retaining work; and (b) $8,797.75 for extra excavation. All parties agree that the added amount sought, albeit relating to work performed in 1971, was not billed to appellee until the third week in November, 1977, which, interestingly enough, came after appellee filed its counterclaim involving Phase II of the job.

After the appellant selected its arbitrator (Robert Lipschutz) and appellee chose its representative (Philip Stein-man), the two arbitrators then decided upon the third panel member (Frederick Milstein). The arbitration hearing was conducted in June of 1978, and the award that was issued, which was a unanimous one, appears in part below:

“1. The claim of [appellant], against [appellee], is allowed in the amount of SEVEN THOUSAND TWO HUNDRED EIGHTY-FOUR DOLLARS AND THIRTY-SIX CENTS ($7,284.36) plus interest at the rate of eight percent (8%) per annum from December 31, 1975.
2. The counterclaim of the [appellee] against the [appellant] is allowed in the amount of FIVE THOUSAND FOUR HUNDRED FIFTY-SEVEN DOLLARS AND THIRTY-SIX CENTS ($5,457.36).
3. Therefore, the [appellee] shall pay to the [appellant] the sum of ONE THOUSAND EIGHT HUNDRED TWENTY-SEVEN DOLLARS ($1,827.00) plus interest at the rate of eight percent (8%) per annum from December 31, 1975. . . . ”

The award, as entered, denied appellant’s claim regarding the retainage work. Thus, appellant filed a petition seeking to vacate the aforementioned award on the basis that, inter alia, “[t]he decision was the result of bias” “on the part of one or more of the Arbitrators' so as to totally [sic] deprive [it] of a fair hearing[.]” More precisely, appellant urged, that the third member of the panel (Mr. Milstein) “failed to disclose the fact that he had business dealings with Gross Construction Company, Inc.[,]” and, further, “that he is presently a sub-contractor of Gross Construction Company, Inc.” (Appellant’s “Petition to Vacate Arbitration Award,” Points 19 and 20) Appellee did not deny these factual allegations. (See “Answer and New Matter of Gross Construction Company, Inc. to Petition to Vacate Arbitration Award,” Points 19 and 20)

After the petition to vacate was filed, arbitrators Milstein and Lipschutz were deposed by the parties. As a result thereof, the following information surfaced: Prior to the June 6th arbitration, Milstein conceded that he had done, and in fact was continuing to do, subcontracting work for appellee; that this business relationship had existed for some “10 to 15 years or longer.” In fact, Milstein admitted that on the date set for the hearing, his company was “do[ing] . . . subcontracting work in the job that was arbitrated, that is, at the Regency Park Apartments[.]” Also, he acknowledged that the subcontracting work done at the site for the appellee encompassed “both Phase I and Phase II[.]” Interestingly enough, Milstein, after being assigned as the neutral panelist, stated that his reason for not disclosing his business association with appellee was because “[he] wasn’t asked.” However, Milstein did make the other arbitrators aware, during their deliberations, of his business dealings with appellee.

The lower court, after the presentation of all the evidence and the hearing of oral argument, denied appellant’s petition. This appeal followed.

The issue, concisely stated, is whether the common law arbitration award should be vacated due to the fact that one of the arbitrators had an on-going business relationship with one of the party litigants, a point which was never disclosed prior to the entry of the award.

Since the present dispute involves common law arbitration, our scope of review is limited. Runewicz v. Keystone Insurance Co., 476 Pa. 456, 383 A.2d 189 (1978). As was stated in Allstate Insurance Co. v. Fioravanti, 451 Pa. 108, 114, 299 A.2d 585, 588 (1973),

“ ‘[i]f the appeal is from a common law award, Appellant, to succeed, must show by clear, precise and indubitable evidence that he was denied a hearing, or that there was fraud, misconduct, corruption or some other irregularity of this nature on the part of the arbitrator which caused him to render an unjust, inequitable or unconscionable award, the arbitrator being the final judge of both law and fact, his award not being subject to disturbance for a mistake of either.’ ” (Citation omitted)

The irregularity mentioned above goes to the process employed in reaching the decision. Press v. Maryland Casualty Co., 227 Pa.Super. 537, 539, 324 A.2d 403, 404 (1974). Consistent therewith, it cannot be “presumed that the parties intended or agreed to be bound by anything short of an honest exercise of the judgment of the arbitrators upon the questions submitted.” Speer v. Bidwell, 44 Pa. 23 (1862). Thus, we must decide whether arbitrator Milstein’s employment by appellee, which encompassed a period up to and including the arbitration process, disqualified him from serving in the capacity of “neutral” arbitrator. This requirement of an impartial arbitrator was dealt with in Bole v. Nationwide Insurance Co., 475 Pa. 187, 379 A.2d 1346 (1977).

In Bole, an individual injured in an automobile accident, appellee, submitted a claim to his insurer, Nationwide Insurance Co., appellant. Nationwide refused payment. In accordance with the terms of the insurance policy, which provided for common law arbitration, appellee requested that the issue be submitted to arbitration, with each party choosing a “competent and disinterested arbitrator.” Both sides selected an arbitrator, but appellee objected to Nationwide’s choice because the individual, an attorney, had provided legal representation for Nationwide in the past. Despite appellee’s disapproval, the arbitrator refused to disqualify himself, a hearing was conducted and an award was entered in favor of Nationwide.

Appellee’s petition to vacate the award, on the ground that the arbitrator chosen by Nationwide should have disqualified himself, was denied by the lower court. An appeal to this Court, Bole v. Nationwide Insurance Co., 238 Pa.Super. 138, 352 A.2d 472 (1975), resulted in a remand; however, the Court was divided on the scope of the remand. Our Supreme Court, after granting appellant’s allowance of appeal, agreed with Judge VAN der VOORT, in an opinion joined by then President Judge WATKINS, that “the award should be vacated and the case remanded for appointment of new arbitrators, because . . . prior representation of a party by an arbitrator should require disqualification of that arbitrator upon objection by the opposing party, with no showing of actual bias required.” Bole v. Nationwide Insurance Co., supra, 475 Pa. at 190, 379 A.2d at 1347. The Bole Court felt that such action was justified, since the partisan arbitrator “should have disqualified himself in light of the contract calling for disinterested arbitrators^]” Id., 475 Pa. at 192, 379 A.2d at 1348.

It is granted that the parties here, unlike in Bole, did not specifically spell out the requirement in their contracts that they wanted “disinterested” arbitrators to sit in on their dispute. However, we find that by the litigants specifically agreeing that “[t]he rules of the American Arbitration Association shall control ...” the resolution of any claim relating to the contracts, which rules, specifically section 18, request the prospective arbitrator to disclose “any circumstances likely to create a presumption of bias or which he believes might disqualify him as an impartial Arbitrator[,]” to bring the case sub judice within the ambit of Bole.

Moreover, our Supreme Court has acknowledged that in circumstances similar to the case at bar, “several courts ... have required that the arbitrator disclose any potential conflict of interest to the parties.” Abramovich v. Pennsylvania Liquor Control Board, 490 Pa. 290, 295 n. 5, 416 A.2d 474, 477 n. 5 (1980). Such a requirement is a laudable one, for it comports with the parties’ entitlement to a “full and fair” hearing. Smaligo v. Fireman's Fire Insurance Co., 432 Pa. 133, 247 A.2d 577 (1968); Anno., 56 A.L.R.3d 697 (1974). As a result, to allow a hearing to be conducted by one involved with a party to the proceeding could not in good conscience be labeled “fair” or consistent with the dictates of procedural due process. Abramovich v. Pennsylvania Liquor Control Board, supra; see Dussia v. Barger, 466 Pa. 152, 351 A.2d 667 (1976); cf. Bole v. Nationwide Insurance Co., supra, 475 Pa. at 195, 379 A.2d at 1350 (ROBERTS, J., Dissenting Opinion) (If a party in arbitration chooses an individual currently retained by the party, “the court might disqualify the [individual] in the present employment of the party, not on the basis of any provision of the arbitration agreement, but because the selection may conflict with common law standards of fairness in arbitration. The potential for gain to the currently retained [individual] may give rise to an inference that the [individual] so employed might be incapable of rendering a fair judgment.”). Although not controlling, it is to be noted that by statute our Legislature has also recognized the importance of impartial arbitrators, allowing parties to challenge the award on the basis of the arbitrator’s partiality. Section 10(b) of the Act of April 25, 1927, P.L. 381, 5 P.S. § 170(b) provides:

“In either of the following cases the court shall make an order vacating the award upon the application of any party to the arbitration:
(a) ...
(b) Where there was evident partiality or corruption on the part of the arbitrators, or any of them. . . . ”

See also Commonwealth Coatings Corp. v. Continental Casualty Co., 393 U.S. 145, 89 S.Ct. 337, 21 L.Ed.2d 301 (1968); 11 Standard Pa.Prac. Ch. 49, §§ 78 and 79 (1964).

The result we reach today is even more compelling when one considers that the parties to the contracts “must consent to arbitration as the method of resolving disputes.” Abramovich v. Pennsylvania Liquor Control Board, supra, 490 Pa. at 295, 416 A.2d at 477. Also, vacating the order instantly is prudent when viewed in light of a cogent statement by Judge VAN der VOORT, made in response to circumstances similar to the one at hand:

“Because they are the final decision-makers on the law and facts of the case, whose decision is final absent fraud or misconduct, arbitrators under common law stand as judges. Their function is judicial, and their conduct must be robed in judicial impartiality. Without reflecting in any degree upon [the arbitrator’s] honesty or integrity and without deciding to what degree [the] arbitrator^ who was requested to disqualify himself from the panel,] may or may not be partisan, I would hold that his prior professional representation of appellee cast a cloud upon his impartiality. Arbitration is an important function in the law wherein decisions are cloaked with finality. While it is not reasonable to expect to find three arbitrators with no innate or acquired sympathies as to certain cases, it is right to ask, at the least, that each be impartial to the extent of never having been in the employ of any of the litigants. To have a lesser standard would be dishonest to the expectation held by the parties and the needs of justice that a decision will be rendered by disinterested triers of fact and law.” (Emphasis added) (Footnote omitted) Bole v. Nationwide Insurance Co., supra, 238 Pa. Super, at 147, 352 A.2d at 479.

Given the fact that Mr. Milstein had an on-going business relationship with the appellee, which included work being done on the jobsite in dispute, we can perceive of no way in which the effectiveness of the arbitration process would have been hampered by the simple requirement that the arbitrator disclose to the parties any dealings that might have created an impression of possible bias. Commonwealth Coatings Corp. v. Continental Casualty Co., supra; see also Abramovich v. Pennsylvania Liquor Control Board, supra; Bole v. Nationwide Insurance Co., supra.

Appellant is entitled to have his claim heard by a panel of arbitrators that is not biased against one litigant and favorable to another, which is not to say that the arbitrator here was biased, for we need not make such determination in deciding the case. Bole v. Nationwide Insurance Co., supra. Ergo, the decision to keep an arbitrator on a panel that had, or has, business dealings with one of the parties should be made after said information is disclosed to the party affected. Absent such disclosure, the award entered is subject to being overturned. Commonwealth Coatings Corp. v. Continental Casualty Co., supra. Consequently, the award in this case and the order of the lower court in support thereof cannot stand.

Order of the lower court is vacated and the case is remanded to the Court of Common Pleas of Montgomery County for proceedings consistent with this opinion.

      . The effect of Milstein’s disclosure of his familiarity with appellee’s business operation became evident during Mr. Lipschutz’s deposition.
      Mr. Lipschutz recalled that the appellant had sought recoupment of monies allegedly due and owing it by the appellee under two contracts. One concerned Phase I of the Regency Park Apartments—which dealt in part with retainage work and amounted to a dollar value of some $20,000.00, and the other concerned Phase II of the same project. It was appellee’s position, as recounted by Lipschutz, that the claim attendant to Phase I had been incorporated into the price of the Phase II contract. Appellant, on the other hand, contended that the amount owed under the retainage claim had not been paid and was not built into Phase II.
      During the course of the discussion among the arbitrators, Lipschutz stated how Milstein disclosed his past dealings with appellee, and how he (Milstein) opined that “it would have been a practice of Gross” to have included the retainage “in the second Phase contract.” Lipschutz admitted that Milstein’s experience with Gross Construction Company “was a factor” in his decision relative to the retainage question. Furthermore, he stated, had Milstein been totally unbiased, he:
      “might very possibly have taken a different position on this retainage and what was done, and that was the main thrust of the decision. There’s where most of the money was—in saying ‘Well, they [—the other arbitrators—] couldn’t understand a business practice like that or they could,’ or whatever, and there may have been more discussion that ensued that would have made a more equitable decision, if that’s the proper term to use, it’s hard to get a total neutral, but it may have helped the situation. I approached [the decision] on the basis of fairness and honesty and best intelligence, but that sometimes isn’t the proper answer because if the other two arbitrators were successful subcontractors and leaning in one way, it does somewhat weight the decision.” (R 63)

      . The entire section reads as follows:
      “Section 18. Disclosure by Arbitrator of Disqualification—At the time of receiving his notice of appointment, the prospective Arbitrator is requested to disclose any circumstances likely to create a presumption of bias or which he believes might disqualify him as an impartial Arbitrator. Upon receipt of such information, the Tribunal Clerk shall immediately disclose it to the parties, who if willing to proceed under the circumstances disclosed, shall, in writing, so advise the Tribunal Clerk. If either party declines to waive the presumptive disqualification, the vacancy thus created shall be filled in accordance with the applicable provisions of this Rule.”
      Based on the aforesaid, we consider Milstein remiss in not informing the AAA, upon receipt of his notice of appointment, of the circumstances likely to create a presumption of bias, or which might have been interpreted as grounds disqualifying him from serving as an impartial arbitrator. See Conner [Connor] v. Simpson, 4 Sadler (Pa.) 105, 7 A. 161 (1886) (Where arbitrator was a partner of one of the parties to the dispute and concealed that fact until after the award was made, the court held the award void); DePhillips v. Keystone Insurance Co., 58 Pa.D. & C.2d 183 (1972) (Award vacated where one of three arbitrators failed to disclose, as mandated by the oath which he took, that he had in the past represented the defendant insurance company and that , his firm continued to represent defendant in automobile cases); cf. A. Arthur Kober Co. v. Brook Developers, Inc., 2 Pa.D. & C.3d 371 (1976) (Where AAA and all parties were advised, prior to arbitration proceedings, that one of the arbitrators was socially acquainted with president of corporate plaintiff, and no objection was made to his serving, the award of the arbitrators was not set aside on the ground of possible prejudice).


author: POPOVICH, Judge:

text:
    443 A.2d 349
    In re ESTATE OF Thomas PITONE, a/k/a Thomas J. Pitone, Deceased. Appeal of Rose GRECO.
    Superior Court of Pennsylvania.
    Argued Sept. 9, 1981.
    Filed March 19, 1982.

      Mark D. Caswell, Philadelphia, for appellant.
    Robert B. Ely, III, Radnor, for participating party.
    Before SPAETH, POPOVICH and MONTGOMERY, JJ.
   POPOVICH, Judge:

This is an appeal from the Order of the Orphans’ Court of Delaware County denying appellant’s, Rose Greco’s, “Petition for Reconsideration”. Appellant argues that she is entitled to the relief requested on the basis of after-discovered evidence. We disagree and, accordingly, affirm the Order of the lower court.

Before reaching the merits of the appellant’s claim, we need to address appellees’ contention that, “[ejxcept as to the question of costs and counsel fees allowable to the Appellees for contesting this unwarranted appeal, this Court has no jurisdiction in this matter.” (Emphasis in original) (Appellees’ Brief at 1) According to appellees, what makes this clear is the consideration of: 1) appellant’s unsuccessful appeal to the Supreme Court of Pennsylvania (see In re Estate of Pitone, 489 Pa. 60, 413 A.2d 1012 (1980)); and 2) the Supreme Court’s denial of appellant’s petition for reargument. The aforegoing points, appellees’ urge, are to be viewed in the context of 42 Pa.C.S.A. §§ 706 and 742, both of which took effect after the case was appealed. Moreover, appellees assert that the savings clause appearing immediately after Section 706, having perpetuated the jurisdiction of any court over any order pending before it as of the effective date of the statute [June 27, 1978], had the effect of preserving the Supreme Court’s jurisdiction over the instant litigation, which was commenced on March 20, 1978, until “a final determination in such court, which court shall have continuing jurisdiction over such matter, including jurisdiction on remand following any appellate review of any order entered in such matter, whether such appellate review was had before or after the effective date of this act”

Appellees would have us interpret the italicized verbiage to encompass the present appeal, so as to foreclose this Court from reviewing appellant’s claim. We find such argument to be disingenuous.

Initially, we note that Section 742 of the Judicial Code vests the Superior Court with exclusive appellate jurisdiction of all appeals from final orders of the courts of common pleas. This jurisdictional provision is substantially a reenactment of the jurisdictional provision provided in the Appellate Court Jurisdiction Act of 1970; Act of July 31, 1970 (No. 223), § 302, 17 P.S. § 211.302. Next, as appellees correctly state, prior to the amendments to the Judicial Code, the Supreme Court had exclusive jurisdiction of appeals in Orphans’ Court matters generally, under Section 202(3) of the Appellate Court Jurisdiction Act, Act of July 31, 1970, P.L. 673, No. 223, Art. II, 17 P.S. § 211.202(3) (Supp.1978), since superseded by Section 722 of the Judicial Code, 42 Pa.C.S.A. § 722 (eff. June 27, 1978). However, we find that neither the exception in Section 742 (which precludes the Superior Court from deciding cases “as are by any provision of . . . [Cjhapter [7] within the exclusive jurisdiction of the Supreme Court ....”) nor the savings clause in Section 706 is sufficient to create continuing jurisdiction in the Supreme Court over a dispute that, albeit initially filed with it, has been ruled upon and the complaining party’s petition for reargument denied.

Under the savings clause of Section 706, subsection (a), any matter pending in a court as of June 27, 1978, is to proceed to final determination in such court, and such continuing jurisdiction embraces a remand to the lower court.

Procedurally, appellant appealed to the Supreme Court on March 20, 1978. After the entry of a “Judgment” by the Supreme Court on March 20, 1980, affirming in part and reversing in part the lower court’s decrees, the appellant filed an application for reargument (see Pa.R.App.P. 2541 et seq.), which was denied on May 28, 1980. It is important to note that appellant took no further action in regard to the denial of her petition for reargument, i.e., the filing of a stay pending review in the Supreme Court of the United States. Pa.R.App.P. 2572(c). Thereafter, the record was remanded and appellant filed a petition to reopen her case. Pursuant thereto, a hearing was held, the relief sought was denied and an appeal to this Court was perfected. Appellees now urge us to quash or to dismiss the appeal on the basis that we lack jurisdiction. Further, appellees aver that the Supreme Court is the appropriate tribunal before whom this matter should be litigated, for by virtue of appellant having filed her initial appeal with our high Court, the savings clause appearing in Section 706 renders the present action as one still pending before it. We disagree.

Pendency, in practice, has been said to be “ 'the state of an undetermined proceeding’.” School District of Robinson Township v. Houghton, 387 Pa. 236, 241, 128 A.2d 58, 60 (1956). Black’s Law Dictionary, 5th Ed., p. 1021, defines the term as “an action or suit . . . from its inception until the rendition of final judgment.” Instantly, we see that after the Supreme Court denied appellant’s petition for reargument, it remanded the record to the lower court and accompanied such remand with the entry of a “Judgment”. Given such facts, it is to be noted that the Supreme Court abstained from returning the record “merely for amplification or more specific findings of fact upon questions submitted by the [appellant].” Groner v. Board of Public Education of City (School Dist.) of Pittsburgh, 152 Pa. Super. 381, 384, 33 A.2d 271, 273 (1943). Thus, we find that the “Judgment” of the appellate Court became final when appellant’s petition for reargument was denied (Pa.R.App.P. 2572), which, in effect, rendered the case no longer pending for purposes of the savings clause appearing at Section 706. Consequently, when appellant appealed the lower court’s November 14, 1980 Order denying her petition for reconsideration, which appeal is separate and distinct from the preceding appellate action, Section 742 was triggered and vested jurisdiction in this Court to hear the matter.

As for appellant’s claim that the lower court erred in denying her petition to reopen the case on the basis of after-discovered evidence (which consisted of the original bank card bearing the decedent’s signature that opened a joint account with the appellant), we conclude that the lower court was correct, in responding to said claim, by entering the following order:

“AND NOW, to wit, this 14th day of November, A.D., 1980, upon consideration of the instant petition requesting reconsideration of the case on grounds of after-discovered evidence, and the briefs filed in support of the hearing on the issue of October 28, 1980, it is hereby ORDERED and DECREED that the aforesaid evidence was presented to the Supreme Court of Pennsylvania on appeal, No. 129 of 1978, and that said evidence was properly considered by the Court at that time, and is therefore res judicata. For the foregoing reason, Petition for Reconsideration is DISMISSED.
BY THE COURT:
/s/Francis J. Catania P. J.”

Based on the aforesaid, we find appellant’s averment to be without merit and not warranting the relief requested. Therefore, we affirm the Order of the lower court.

SPAETH and MONTGOMERY, JJ., concurred in the result.

      . By so doing, we reject appellant’s argument that the jurisdictional issue is waived because appellees failed to raise such point in their prior Motion to Quash (which was denied by this Court on March 9, 1981), or, alternatively, that the denial of said Motion “was on the merits as presented to the Court by the parties and therefore was decided with prejudice.” (See “Reply Brief of Rose Greco, Appellant,” at 6) Before leaving the question posed, we need to mention that since appellees’ Motion was denied on the ground of being prematurely filed, and from the record before us we cannot agree with the appellant that it was entered with prejudice, the merits of the allegations therein were not ruled upon. Consequently, appellees are not precluded from raising such issue, with its attendant allegations, at this stage of the proceedings.

      . Section 706, and the relevant portion of the savings clause therein, reads:
      “An appellate court may affirm, modify, vacate, set aside or reverse any order brought before it for review, and may remand the matter and direct the entry of such appropriate order, or require such further proceedings to be had as may be just under the circumstances.
      1976, July 9, P.L. 586, No. 142, § 2, effective June 27, 1978.
      Pending Actions and Proceedings—Effect of Jurisdictional changes Section 8 of Act 1976, July 9, P.L. 586, No. 142, generally effective June 27, 1978, provides as follows:

        ‘(a) Except as otherwise provided in this section, no appeal or other matter pending in any court on the effective dale of this act shall be affected by the provisions of this act changing the jurisdiction of courts, and all such matters shall proceed to a final determination in such court, which court shall have continuing jurisdiction over such matter, including jurisdiction on remand following any appellate review of any order entered in such matter, whether such appellate review was had before or after the effective date of this act.’ ”

      . Section 742 reads:
      “The Superior Court shall have exclusive appellate jurisdiction of all appeals from final orders of the courts of common pleas, regardless of the nature of the controversy or the amount involved, except such classes of appeals as are by any provision of this chapter within the exclusive jurisdiction of the Supreme Court or the Commonwealth Court.
      1976, July 9, P.L. 586, No. 142, § 2, effective June 27, 1978.”

      . Section 211.302 of said Act provided:
      “The Superior Court shall have exclusive appellate jurisdiction of all appeals from final orders of the courts of common pleas, regardless of the nature of the controversy or the amount involved, except such classes of appeals as are by any section of this act within’ the exclusive jurisdiction of the Supreme Court or the Commonwealth Court.”

      . Appellees have argued that they are entitled to their costs of filing and printing and attorney’s fees. The former request is premised upon Pa.R.App.P. 2741(1), while the latter is predicated upon 42 Pa.C.S.A. §§ 1726 and 2503. Rule 2741(1) reads: “If an appeal or other matter is dismissed, costs shall be taxed against the appellant or other moving party in the appellate court unless otherwise agreed by the parties or ordered by the court.” (Emphasis added) Since we have determined that the case will not be dismissed, appellees’ cited authority is inapposite. Notwithstanding such fact, we observe that when an order is affirmed, as is the case here, “costs shall be taxed against the appellant unless otherwise ordered.” Pa.R.App.P. 2741(2). Additionally, the expenses incurred by a party in regard to the cost of printing is adequately dealt with in Pa.R.App.P. 2742, and needs no further amplification.
      We now turn our attention to appellees’ contention that we award them reasonable counsel fees as part of the taxable costs, citing Section 2503(7) & (9), 42 Pa.C.S.A. § 2503(7) & (9), which provides:
      “The following participants shall be entitled to a reasonable counsel fee as part of the taxable costs of the matter:
      * * * * * *
      (7) Any participant who is awarded counsel fees as a sanction against another participant for dilatory, obdurate or vexatious conduct during the pendency of a matter.
      # % # ‡ ‡

      (9) Any participant who is awarded counsel fees because the conduct of another party in commencing the matter or otherwise was arbitrary, vexatious or in bad faith....”
      Appellees claim that the following actions are indicative of appellant’s vexatious behavior:
      1) Appellant’s acceptance of the executorship of decedent’s estate, while at the same time claiming the entire fund in controversy (consisting of $30,000.00) for herself;
      2) Improper use of estate funds for personal use;
      3) Misapplication of insurance proceeds;
      4) Failure to invest estate assests; and
      5) Delays in accounting and distribution.
      (Appellees’ Brief at 22-25) However, we find this claim to have been waived by appellees’ failure to preserve it in the lower court. First Pennsylvania Savings Association v. Four Seasons Racquet Club, Inc., 287 Pa.Super. 180, 185 n.5, 429 A.2d 1160, 1162 n.5 (1981).


author: MONTGOMERY, Judge: BROSKY, Judge,

text:
    443 A.2d 353
    Charles PENNEYS, Appellant, v. RICHARD KASTNER CO., INC. and Automotive Merchandisers of Texas, Inc. and Ambassador Factors Corporation.
    Superior Court of Pennsylvania.
    Argued Nov. 5, 1981.
    Filed March 19, 1982.
    Petition for Allowance of Appeal Denied Aug. 30, 1982.

      Joseph S. U. Bodoff, Philadelphia, for appellant.
    James W. Adelman, Philadelphia, for appellees.
    Before BROSKY, POPOVICH and MONTGOMERY, JJ.
   MONTGOMERY, Judge:

The instant appeal by the Plaintiff-Appellant arises from a lower court order granting a petition to open a default judgment filed by the Defendant-Appellee, Automotive Merchandisers of Texas, Inc. The lower court considered the petition, an answer filed by the Appellant, and argument by the parties. We have thoroughly reviewed the entire record and the issues raised, and conclude that the lower court committed no error in opening the judgment.

In our review of this appeal, we are guided by several well-established principles. We have said that a petition to open judgment is a matter of judicial discretion. It is an appeal to the court’s equitable powers, and is to be exercised only when three factors coalesce: (1) the petition has been promptly filed; (2) a meritorious defense can be shown; and (3) default can be excused. See Quaker Transit Co. v. Jack W. Blumenfeld and Co., 277 Pa. Superior Ct. 393, 419 A.2d 1202 (1980). Moreover, the grant or denial of a petition to open judgment is a matter within the sound discretion of the trial court, and will not be reversed in the absence of a manifest abuse of that discretion. Cruse v. Woods, 279 Pa. Superior Ct. 242, 420 A.2d 1123 (1980).

The record shows that the Appellant filed suit on May 2, 1975 seeking an accounting as well as the distribution of profits from a joint venture in which the three named Defendants had been involved. The Appellant alleged that the Defendant Richard Kastner Co., Inc. had assigned to him a fifty percent interest in the anticipated share of the joint venture profits which would have been due to Kastner. It was alleged by the Appellant that after that assignment, all of the Defendants, with knowledge of the assignment, entered into an agreement intended to defeat the Appellant’s claim to the profits. The Defendant Richard Kastner Co., Inc. had retained Attorney I. David Pincus, of Philadelphia, to represent it in the action. After receiving notice of the action, the general counsel for the Appellee Automotive Merchandisers of Texas, Inc. (hereinafter referred to as “Automotive”), also retained Attorney Pincus to represent the interest of his company in the action. More particularly, Automotive’s general counsel transmitted letters to Pincus, dated May 22 and September 21, 1979, authorizing Pincus to file an answer on behalf of Automotive. Shortly after he was retained by Automotive, Pincus notified its general counsel that the Plaintiff-Appellant and the Defendant Kastner were attempting to work out a settlement, so that the filing of an answer was then unnecessary as the suit had been put on “hold” by the parties. Settlement efforts between the Plaintiff and Kastner apparently proceeded poorly, for in late September, 1979, Pincus received a letter from Plaintiff’s counsel, which stated that “. . . in the event a responsive pleading is not made to the Complaint on or before October 7, 1979, I shall take judgment against your clients on October 7, 1979.” However, judgment was not taken by the Plaintiff-Appellant against either Automotive or Kastner on October 7, 1979, despite the fact that neither Defendant filed any responsive pleading. Settlement discussions apparently continued as did extensions of the date when responsive pleadings were expected. However, such discussions were apparently not fruitful, and counsel for the Plaintiff sent a letter to the office of Attorney Pincus, dated January 24, 1980, which demanded that an answer be filed on or before February 13, 1980, or “... we will take judgment against your clients by default.” On February 8, 1980, Attorney Pincus advised the general counsel for Automotive that settlement discussions had broken down. Further, Pincus advised that he was withdrawing as counsel for'1 Automotive, to avoid a conflict between its interests and those of Kastner. By letter dated February 7, 1980, an associate of Pincus notified counsel for the Appellant of the filing of a notice of the withdrawal of the appearance on behalf of Automotive. Automotive, through its general counsel, whose office was in Boston, Massachusetts, immediately took steps to employ another Philadelphia attorney to represent its interest in litigation. However, on February 25, 1980, with no further communication as to any specific date when he would do so, the Plaintiff-Appellant entered a judgment by default against Automotive.

Automotive filed its petition to open judgment thirty-three (33) days after the default judgment had been taken. The lower court concluded that Automotive, in that regard, had acted promptly. In support of its finding that the petition to open had been promptly filed, the lower court pointed out that Automotive had acted immediately to retain other local counsel after the apparent sudden breakdown in settlement negotiations and contemporaneous withdrawal as counsel by Attorney Pincus. These circumstances, as well as the fact that the Plaintiff-Appellant had taken judgment without any notice as to a specific date, other than the one it had given five months earlier in September, 1979, convinced the lower court that Automotive had fulfilled the requirements of promptness in filing its petition to open. We must agree.

The lower court also found that Automotive had averred in its petition that it had a meritorious defense to the Appellant’s claim. Briefly stated, Automotive claimed that in 1978 the three Defendants had entered into an agreement reflecting certain prior transactions of Kastner and Automotive. Kastner had granted Automotive a right of set-off, in the event of default under the 1978 agreement, of any deficiencies from Kastner’s share of the profits from the joint venture agreement which had been reached in 1977. Automotive alleged that a default did occur and that it thereby set off sums necessary to cure the default, from the profits due Kastner in the joint venture. Further, Automotive claimed that these and subsequent transactions, all concerning Kastner’s obligation to Automotive, occurred pri- or to and/or without any knowledge on the part of Automotive of any assignment from Kastner to the Plaintiff-Appellant. The lower court reviewed all of these averments and various agreements attached to. Automotive’s petition to open, and concluded that the Defendant-Appellee had presented sufficient evidence of the existence of a meritorious defense to warrant the opening of the default judgment. Our own examination of the record regarding all of these matters leads us to the firm conclusion that the lower court did not abuse its broad discretion, as there was a substantial basis to support the conclusion that Automotive offered a meritorious defense sufficient to justify the opening of the default judgment.

The lower court also found that the Appellee Automotive adequately explained its default in filing a timely answer of other responsive pleading. In that regard, the lower court found that the Appellee’s failure was excused by the circumstances of protracted settlement negotiations and the Plaintiff-Appellant’s failure to properly notify Automotive of the intention to enter default judgment. As to the latter finding, the lower court relied upon the provisions of Pa.R.C.P. 237.1, which was promulgated December 14, 1979, to be effective February 1,1980, and applicable to all actions then pending. That Rule, in pertinent part, provides:

No judgment by default shall be entered by the prothonotary unless the praecipe for entry includes a certification that a written notice of intention to file the praecipe was mailed or delivered to the party against whom judgment is to be entered and to his attorney of record, if any, after the default occurred and at least ten days prior to the date of the filing of the praecipe. If a written agreement for an extension of time specifies a time within which the required action must be taken and a default occurs thereafter, judgment by default may be entered by the prothonotary without prior notice under this rule. A copy of the notice or agreement shall be attached to the praecipe.

The lower court pointed out that the certification which accompanied the praecipe to enter judgment contained a statement by the Plaintiff that on May 15, 1979, its attorney and Attorney Pincus entered into a written agreement that no action would be taken in this case without ten (10) days prior notice. The Plaintiff then described the letter of late September, 1979, which threatened that judgment would be taken on October 7, 1979, and also stated that: “Additional notices threatening to take default judgment ...” had subsequently been sent. The Plaintiff apparently concluded that such notices complied with the provisions of a written agreement for an extension of time for filing a responsive pleading, and therefore considered additional prior notice to Automotive unnecessary. The lower court found that the Plaintiff-Appellant failed to properly comply with the requirements of Rule 237.1, and we must agree. A written agreement for extension of time within which to file a responsive pleading should specify a time within which the action must be taken, according to the Rule. In this case, the parties agreed to a ten (10) day notice prior to either party taking any action against the other. While the Appellant sought to rely upon its letter of late September, 1979 as setting a date certain, October 7, 1979, the Appellant’s subsequent actions mandate the conclusion that it later rejected that position. It is not contested that the Appellant sent the Appellees subsequent notices extending the time for compliance, and also did not take judgment on February 13, 1980, as threatened. These circumstances and the five month delay in the entry of the default judgment led the lower court to conclude that the parties’ written agreement for extension of time was uncertain as to date of compliance. Thus, the court found that the Appellant remained under an obligation to give Automotive ten (10) days written notice of the intent to enter judgment on February 25, 1980. This failure by the Appellant to comply with Rule 237.1, as well as the protracted status of settlement negotiations, led the lower court to conclude that Automotive’s failure to file a responsive pleading could be excused. Again, we can discern no abuse of discretion by the lower court in reaching that conclusion.

For all of the above reasons, it is clear to us that the lower court had committed no abuse of discretion in this case, and we must sustain the order of the lower court opening the default judgment.

Affirmed.

BROSKY, J., files a dissenting opinion.

BROSKY, Judge,

dissenting:

The majority holds that the court below properly granted defendant-appellee’s petition to open the default judgment entered against it. I disagree.

Appellee AMT argued that its default in filing an answer was excused because of the fact that settlement negotiations were taking place at the time, and also because of appellant’s failure to notify appellee, immediately prior to entry of the default judgment, of his intention to enter said judgment. The court below found, and the majority agrees, that appellant failed to comply with Pa.R.C.P. 237.1 in that appellant was, in this instance, under an obligation to give appellee AMT ten days written notice of appellant’s intent to enter judgment on February 25, 1980. Accordingly, the court below held that “As plaintiff [appellant] failed to comply with Pa.R.C.P. 237.1, and in light of the protracted settlement negotiations . . . AMT’s failure to file a responsive pleading could be excused.”

The record shows that the initial complaint in this case was filed May 2, 1979. Appellee AMT was served May 9, 1979. On June 12, 1979, an appearance was entered by the law firm of Sidkoff, Pincus, Greenberg and Green on behalf of both Kastner and AMT. Attorney Pincus was specifically retained by AMT’s general counsel in Boston to represent AMT. By letters of May 22 and September 21, 1979, AMT’s general counsel authorized Pincus to file an answer on behalf of AMT. No answer was filed, however. It appears that during this time, the parties were attempting to work out a settlement.

The record shows that on May 15, 1979, an agreement was entered into between Attorney Pincus and Attorney Reich, appellant’s attorney, which was contained in a letter from Pincus to Reich, stating in part:

This will confirm our telephone conversation of today, at which time, it was agreed . . . that you will take no action in the suit without giving to me at least ten (10) days notice prior to the taking of any such action.

By September, 1979, however, Pincus received a letter from appellant’s counsel warning that “in the event a responsive pleading is not made to the complaint on or before October 6, 1979, I shall take judgment against your clients on October 7, 1979.” On January 24, 1980, another letter was sent to appellee demanding that an answer be filed on or before February 13, 1980. No answer was filed. On February 8, 1980, Pincus advised AMT’s general counsel, Crosson, that the arrangement between the parties had broken down, and that Pincus was withdrawing as AMT’s counsel to avoid a conflict of interest between Kastner and AMT. On February 8, 1980, Sidkoff, Pincus, Greenberg and Green withdrew its appearance for AMT. Crosson then took steps to obtain other Philadelphia counsel for AMT. On February 25, 1980, appellant took judgment by default against AMT for failure to file a responsive pleading.

In Watts v. Jenkins, 226 Pa.Super. 469, 313 A.2d 775 (1973), the parties were engaged in settlement negotiations which proved fruitless by November 4, 1970. In December, 1970, appellee’s attorney sent certified letters to appellants notifying them that he intended to proceed to judgment. No answer was filed, and judgment by default was taken February 3, 1971. Appellants argued that their default could be excused on the ground that they were led to believe that no legal action would be taken while settlement negotiations were being conducted. In holding that appellants had not offered an excuse for their default, we stated:

[I]t is indisputable that after negotiations had broken down, the appellants were warned of appellee’s intention to proceed to judgment, and of the necessity of appellant’s securing counsel to protect their interests. This is clearly not a case in which appellee’s counsel lulled the appellants into a false sense of security by promises of inaction. Appellant’s failure to answer can only be attributed to a lack of diligence.

Id., 226 Pa.Superior Ct. at 470-471, 313 A.2d at 776.

Similarly, in Kennedy v. Black, 492 Pa. 397, 424 A.2d 1250 (1981), our Supreme Court held that the default could not be excused on the grounds that the parties were engaged in settlement negotiations. In Kennedy, appellee was given several chances to respond, and several extensions of time were granted. Appellant finally sent a letter stating that if no action was taken within twenty days, he would be forced to enter a default judgment. The Supreme Court held that “[wjhile settlements are clearly favored and default judgments are not, we do not believe the attempts in this case to negotiate a settlement can justify appellees’ protracted delay in the filing of an answer.” Id., 492 Pa. at 402, 424 A.2d at 1252.

Here, the parties were attempting to negotiate a settlement, but negotiations broke down by September, 1979, at which time it became clear to appellee that appellant intended to enter a default judgment if no responsive pleading was filed. In January, 1980, appellee was again warned that appellant intended to enter judgment by default against it if no answer was filed. In effect, appellee had from May, 1979, the time when it first received the complaint, to February, 1980 to file an answer, a period of eight months. Ample notice was given appellee of appellant’s intention to enter judgment. For these reasons, I would hold that appellee’s failure to appear cannot be excused here.

The majority also holds that appellant had failed to comply with Pa.R.C.P. 237.1. Pa.R.C.P. 237.1 requires that ten days’ notice be given prior to the filing of a praecipe for entry of default judgment. The rule also states that if a written agreement for an extension of time specifies a time within which the responsive pleading must be filed, and default occurs thereafter, then judgment may be entered without prior notice. The court below found that appellant’s letter of September 28, 1979, was uncertain with respect to fixing a date of compliance, on the ground that subsequent notices were sent after the September 28 letter and judgment was not entered until five months later. I must disagree with the court’s conclusion that appellant remained under an obligation to give appellee ten days’ written notice of his intent to enter judgment February 25, 1980.

To begin with, the September 28, 1979 letter set a specific date of compliance—October 6, 1979. Appellant’s January 24, 1980 letter also set a specific date of compliance—February 13, 1980. Default judgment was not taken until February 25, 1980, twelve days later. As a courtesy, appellant gave appellee an additional twenty days by its letter of January 24,1980, to file an answer. The fact that appellant gave appellee several opportunities to file an answer should not be used to penalize appellant.

Pa.R.C.P. 237.1 evolved from the need to regulate the conduct of attorneys who “[a]ttempt(ed) to utilize every niggling procedural point for maximum advantage.” Silver-man v. Polis, 230 Pa.Super. 366, 371, 326 A.2d 452, 455 (1974). Here, the lower court urges an application of the rule which yields the opposite result—namely, penalizing a plaintiff-creditor for being courteous by granting extensions of time. It certainly cannot be said here that appellant took a “snap” judgment, in the true sense of that term, given the length of time between the filing of the complaint and the entry of judgment by default. Accordingly, I would hold that appellant complied with both the letter and spirit of Pa.R.C.P. 237.1.

For these reasons, I must dissent.

      . The lower court filed an excellent and comprehensive opinion in this case explaining the rationale for its decision.

      . Although counsel withdrew, it is clear that AMT had ahead received ample notice, before the date of withdrawal, of appellant’s intent to take judgment.


author: VAN der VOORT, Judge:

text:
    443 A.2d 358
    Jack YOFFE and Donald Yoffe, v. KELLER INDUSTRIES, INC., Appellant.
    Superior Court of Pennsylvania.
    Argued Dec. 5, 1980.
    Filed March 19, 1982.

      Marvin Comisky, Philadelphia, for appellant.
    Philip M. Hammett, Philadelphia, for appellees.
    Before HESTER, CAVANAUGH and VAN der VOORT, JJ.
   VAN der VOORT, Judge:

The Yoffes owned four Pennsylvania Corporations. They authorized an attorney to find a buyer for the corporations; their asking sale price was $1,500,000. Eventually, appellant executed an agreement of sale with the Yoffes for the sale and purchase of the businesses.

Pursuant to such agreement the Yoffes received 51,064 shares of Keller stock with a value on August 24, 1967 of $29% per share for a total of $1,500,005 (51,064 X $29%). As Keller shares were not covered by any registration statement approved by the Securities and Exchange Commission, (hereafter referred to as the SEC), such shares had to be registered with the SEC before the Yoffes could sell them on the NYSE. The sales agreement provided that Keller “would undertake the registration”. (Exhibit P-1 § 3a). The agreement further provided that Keller would immediately undertake to register at least one-half of the shares; the balance to be registered within two years. The agreement also contained a “Guaranty of Base Price”. (Exhibit P-1, § 5). This provision was that if the closing price of Keller stock, on the day they became tradeable, was less than $29% per share, Keller would issue additional shares to make up the difference between the NYSE price and $29% per share. If the stock closed $29% or higher then the Yoffes would be entitled to no additional shares; nor would Keller be entitled to any rebate.

A registration statement covering 10,100 shares became effective August 11, 1968; the NYSE value per share on that date was greater than the guaranteed price. The remaining 40,964 shares “were the subject of a subsequent modification”. The parties by agreement, dated December 17, 1968, redefined Keller’s responsibilities regarding the registration of the remaining shares. Keller’s obligation was reduced from, “undertaking the registration” to, the filing of a registration statement and to “exercise reasonable efforts” to have the statement become effective as soon as possible. The parties subsequently further amended their agreement to extend the time for filing the registration statement as to the remaining shares to June 1, 1970.

On June 1,1970, Keller filed a registration statement with the SEC covering the remaining shares. The SEC took no action on the statement. On June 23, 1971, Keller filed an amendment to the registration statement, supplying current information as required by the SEC rules. The SEC issued a letter of comment on August 27, 1971, in which it suggested certain technical changes as a condition for approval. Keller filed a second amendment and the registration statement became effective November 30, 1971. The NYSE value of that date (after adjusting for a two for one stock split) was $37x/2 per share; that value exceeded the guaranteed value of $29% per share.

Jack Yoffe filed an action for breach of contract on July 17,1972. On October 31,1974, Donald Yoffe was permitted to join as an additional plaintiff and to file a separate amended complaint in assumpsit. The basis for the Yoffes’ claim is that the second registration statement should have become effective six weeks after its filing, i.e., July 11,1970. Appellees claimed that appellant had not proceeded with reasonable efforts to have the statement become effective. Instead it is claimed that Keller had filed a false and misleading registration statement resulting in the greater than eighteen (18) month delay. The closing value on July 11, 1970 was $10% per share. The Yoffes averred that had Keller exerted reasonable effort the statement would have been effective as of that date and under the guaranteed price provision Keller would have been obligated to issue an additional 77,882 shares to Yoffes.

The trial commenced before the court sitting with a jury. Just prior to charging the jury the trial court, over appellant’s objection, indicated it would submit to the jury a special verdict containing four questions. The jury found that Keller had not exercised reasonable efforts and that the statement should have become effective on July 17, 1970. The jury was polled and discharged. The court subsequently molded a verdict for appellees. On the basis of the Act of April 10, 1929, P.L. 476, 68 P.S. § 481, then in effect, the trial court computed Yoffes’ damages to be $1,173,875.

Appellant’s motions for judgment n.o.v. and for a new trial were denied by the court sitting en banc on December 10, 1979. On January 7, 1980, Keller appealed to this Court at No. 82 Philadelphia 1980, from the denial of his post trial motions. Judgment was entered in favor of the Yoffes and appellant filed a second appeal at No. 499 Philadelphia 1980. The appeal from the order denying post trial motions must be quashed as being interlocutory as no judgment had been entered. Brogley v. Chambersbarg Engineering Company, 283 Pa.Superior Ct. 562, 424 A.2d 952 (1981).

Keller raises three issues in its appeal at No. 499. The first claim is that the Yoffes failed to prove all of the elements of a breach of contract by Keller. Due to our disposition of this issue we need not address the other two issues. Appellant argues that the delay was a result not of its wrongdoings or inactivity but instead resulted from the unorthodox procedure utilized by the SEC. The Yoffes counter, that the delay was the result of appellant’s utilization of questionable accounting practices which caused the SEC to initiate an investigation of other Keller stock transactions and to cause it to withhold action on the current stock registration.

On its face, the registration statement was reasonably complete. These so-called “fraudulent acts and related conduct” alleged by appellee consisted of Keller’s filing in 1969 with the SEC and circulating among its stockholders, quarterly financial statements for the 1st and 2nd quarters of its fiscal year 1969 which deferred certain allegedly seasonal charges to the later quarters. These “seasonal deferrals” were considered improper by the SEC and eventually resulted in the filing of a Complaint by the SEC in January 1971 against Keller, seeking an injunction against the complained of actions. The alleged improper accounting methods also resulted in Giffen Industries bringing suit against Henry A. Keller, Keller’s principal stockholder, to rescind an agreement to buy Henry A. Keller’s stock.

A representative of the SEC testified in regards to the registration statement. The reviewing office after becoming aware of another branch’s (of the SEC) investigation of Keller decided to take no action on the registration statement and to furnish no letter of comment. Nonetheless the SEC official testified that he and Keller’s lawyers had discussed the investigation and registration but Keller took no action on the statement until it filed its first amendment. Keller filed its first amendment on June 23, 1971. The SEC issued a comment letter on August 27, 1971, principally requesting an update of financial statements, plus accounting information on the nature of “prior and present systems of deferrals”, plus cross-reference where appropriate to transactions with Giffen Industries. (Exhibit P-7). A second amendment was filed on November 15, 1971, updating financial statements, supplying information on the accounting methods employed and noting the pending difficulties with the SEC and Giffen Industries. On November 30, 1971, the statement became effective. The SEC’s inquiry was still pending. (See N.T. 473-531).

Throughout the intervening period between initial filing and the SEC’s approval Keller’s attorneys were frequently in contact with SEC, sometimes on a monthly basis, sometimes on a weekly basis; numerous meetings were held at the SEC offices. (N.T. pp. 741-763).

From our research, this case appears to be a case of first impression in this jurisdiction; though there are several cases from other jurisdictions which are somewhat related. In Lipsky v. Comm. United Corp., 551 F.2d 887 (2nd Cir. 1976) an appeal was taken from an order striking portions of the complaint. The defendant therein had assumed a duty to use its best efforts to cause the registration statement to become effective. Plaintiff claimed that irregularities in the defendant’s statements caused the SEC to file a complaint against the defendant which resulted in a consent judgment. The court there held that while the SEC’s opinion may well be relevant to the question of whether the issuer used its best efforts, neither a complaint nor a reference to a complaint resulting in a consent judgment may properly be used to prove lack of best efforts.

In United Telecomm, v. American Tel. & Comm. Corp., 536 F.2d 1310 (10th Cir. 1976) the issuer was to use its “best efforts” to obtain registration by preparing and filing the registration statement and by causing the statement to become and remain effective. The issuer also represented and warranted that it would not engage in any action that would conflict or cause a breach of the agreement. Prior to the closing of the agreement, the issuer entered negotiations and reached an agreement as to a merger. The registration statement never became effective and was withdrawn by the issuer. The jury found for United. The Appellate Court found the merger to be in conflict with the registration making it unfeasible to proceed with registration thus resulting in the breach of the warranty.

Probably the most similar case is Republic Technology Fund, Inc. v. Lionel Corp., 483 F.2d 540 (2nd Cir. 1973). There the circuit court found that even though Lionel had been cooperative and its law firm was diligent and competent it had not exerted reasonable efforts to maintain the effectiveness of the registration statement. The court noted that the 51 week delay was a result of the originally misleading interim statement which did not truly reflect a worsening situation. The court found that Lionel’s management’s giving of misleading statements to its public accountant, which resulted in the accountant’s unwillingness to certify such statements may have been an omission to use “best efforts” to maintain effectiveness.

The final case we refer to is Kupferman v. Consolidated Research & Mfg. Corp., CCH Fed.Sec.L.Rep. “61-64” Transfer Binder § 91, 197 (S.D.N.Y.1962). It involved an admitted failure to file a post-effective amendment. Consolidated’s contention that the statement would have been subject to the discretion of the SEC was rejected as only defendant’s own conduct either in failing to file an amendment or in filing one with inaccurate information or incomplete financial information would be factors which could have affected the SEC’s discretion.

When reviewing the denial of motions for a new trial and for judgment notwithstanding the verdict the reviewing court must examine the evidence in a light most favorable to the verdict winner. Any conflicts in the testimony should be resolved in favor of the verdict winner. Schneider v. Albert Einstein Medical Center, Northern Division, 257 Pa.Superior Ct. 348, 390 A.2d 1271 (1978). In reviewing the transcripts of the lower court proceedings we find the following uncontested facts important.

First, the financial statement filed in conjunction with the registration statement was a consolidated statement encompassing the five and one-half (5V¿) years ending January 31, 1970. The SEC found no fault with this statement, nor did it question Keller’s annual statements, but only questioned certain interim quarterly statements. (N.T. pp. 355, 530) While certain expenses of the first quarters were deferred, such would be accounted for in the second half of the year. (N.T. p. 682). Accordingly, Keller did not file a false and/or misleading registration statement. A representative of the SEC testified that when a registration statement is received, it would be reviewed and usually a letter of comment would issue. The SEC would then cooperate with registrant’s counsel to correct any defects. Such statement would then become effective when the SEC considered the statement was complete, fair and adequate. (N.T. pp. 474-80). However, in the current case the arm of the SEC which was reviewing Keller’s registration statement containing a consolidated statement learned that another section of the SEC had initiated an informal inquiry regarding Keller’s quarterly statements and the registration process was halted. (N.T. p. 490).

The SEC admitted that seasonal deferrals were permissible at the time in question and that no uniform method of preparing such deferrals then existed. Instead there was a wide variety of practices at that time. (N.T. pp. 339-44). What concerned the SEC was that Keller’s accounting journals did not adequately support the deferrals (N.T. p. 326). The public accounting firm employed by Keller agreed that different methods of seasonal deferrals existed at that time. It further stated that Keller had used the same method to match costs with revenues since 1960 and such practice met with the generally accepted practices. Such accountant, who had conducted a brief review of the interim statements disagreed with the SEC and believed such deferrals were reasonable. (N.T. pp. 677-81). However, he did agree that the deferrals could not be precisely pinned-down in Keller’s books. (N.T. p. 689).

Additionally, a new method regarding seasonal deferrals was adopted by Keller in April 1969, when the company came under new management. (N.T. pp. 714-15). Yet, the SEC continued with its complaint to enjoin the use of the previous method of handling such deferrals.

While the previously cited cases from the various federal courts especially the Republic Technology case, may offer us guidance, we must nonetheless resolve this case on the basis of Pennsylvania law. “We believe the present rule in Pennsylvania to be that acts of a third party making performance impossible or causing a delay ... do not excuse failure to perform if such acts were foreseeable because it was the duty of the contracting party to provide for that situation in his contract.” Luria Eng. Co. v. Aetna Cas. & S. Co., 206 Pa.Superior Ct. 333, 337, 213 A.2d 151, 153 (1965) relying on Moore v. Whitty, 299 Pa. 58, 149 A. 93 (1930). The Luria court quoted, approvingly from the lower court: “Having failed to provide against the very contingency which both parties were aware might occur, the happening of such contingency cannot be set up as an excuse for failure to perform.” 206 Pa.Superior Ct. at 338, 213 A.2d 151. Similar results have followed in: Wissahickon Realty Corporation v. Boyle, 385 Pa. 198, 122 A.2d 720 (1956); Bozzo Inc. v. Electric Weld Division, 283 Pa.Superior Ct. 35, 423 A.2d 702 (1980); and Daburlos v. Commercial Insurance Co. of Newark, N. J., 521 F.2d 18 (3rd Cir. 1975).

Here the parties were aware of the SEC’s ability to delay the effective date and provided for such delay in two different manners. The parties agreed to a guaranteed price provision to provide for “whenever the SEC approved” the registration statement. The parties also agreed that Keller should exert reasonable efforts to that end; Keller did not guarantee a specific time for SEC approval. Yet the appellees and the lower court would further require Keller to foresee and provide for the SEC’s actions. We disagree. In light of various unquestioned facts, we believe Keller’s conduct was reasonable under the circumstances and that the Yoffes assumed the risk that the SEC would proceed as it did.

Keller’s filed registration statement was not questioned as it pertained to the instant case; instead, the SEC was concerned with previous interim statements. These interim statements, questioned by the SEC, had been compiled based on Keller’s long standing accounting practices, and had been reviewed by a reputable accounting firm which deemed them to be reasonable. It is admitted that there were various acceptable accounting practices concerning deferrals used at that time. We find that Keller could not reasonably foresee that the SEC would undertake an informal investigation of its prior accounting practices especially when under new management, those practices had been modified.

Contrary to the finding in Kupferman, supra, here the SEC’s discretion, though circumscribed by statutes and regulations was not reasonably predictable. Unlike Republic Technology, supra, in this case the statements at issue were not part of the registration filing. And more so, even the interim reports that were questioned had been reviewed and approved by a public accountant unlike the situation in Republic Technology. As in Lipsky, supra, the filing of a complaint by the SEC in this case, which resulted in a consent decree does not establish Keller’s omission to use reasonable efforts. Had Keller warranted not to take any actions which may threaten the registration process, then the current case might be similar to United Telecomm., but Keller did not so warrant.

Order of the lower court is vacated with directions to enter judgment for appellant, at No. 499 Philadelphia 1980. Appeal at No. 82 Philadelphia 1980 is Quashed.

      . All references to the value of such stock refer to the New York Stock Exchange’s (hereafter referred to as NYSE) closing price.

      . The action was originally filed in equity but was transferred on August 22, 1973 to the law side of the court.

      . At $107s, the remaining 40,964 shares had a value of $414,760.50 (40,964 X $1078). Where as the same shares at the Guaranteed Price had a value of $1,203,317.50 (40,964 X $293/s). The difference between the two values is $788,557.00 ($1,203,317.50 minus 414,760.-50). To make up this difference an additional 77,882 shares at $107s would have to be transferred ($788,557.00 divided by $107s).

      . § 481. Conversion of property of fluctuating value: damages
      In any proceeding hereafter instituted in any court of this Commonwealth, in which damages are claimed for the conversion of stocks, bonds, or other like property of fluctuating value, the damages shall be limited to the difference between the proceeds of the conversion, or that portion thereof duly paid or credited to the owner, and such higher value as the property may have reached within a reasonable time after he had notice of the conversion. Where the facts are not in dispute, this period shall be fixed by the court as a matter of law. 1929, April 10, P.L. 476, No. 194, § 1. Repealed 1978, April 28, P.L. 202, No. 53 § 2(a) [1099] effective June 27, 1978. Substantially reenacted at 42 Pa.C.S. § 8335.

      . That litigation ended in a Consent Decree entered into on May 21, 1973, ordering Keller to desist from any device, scheme or artifice to defraud; or making untrue statements or omitting to state material facts; or engaging in any practice which would operate as a fraud or deceit.

      . Three other cases dealing generally with this topic, but which are sufficiently removed from the factual setting of this appeal are: Marx & Co. v. Diners Club, Int., 550 F.2d 505 (2nd Cir. 1977) (improper expert testimony regarding “best efforts”); Waste Management, Inc. v. Deffenbaugh, 534 F.2d 126 (8th Cir. 1976) (issuer’s financial apprehension does not excuse failure to use reasonable efforts); and Madison Fund, Inc. v. Charter Co., 427 F.Supp. 597 (S.D.N.Y.1977) (buyer’s refusal to compromise did not excuse insurer’s obligations to use best efforts).

      . The Public Accounting firm would only certify annual statements, for which they had conducted an indepth audit.


author: PER CURIAM:

text:
    443 A.2d 363
    ATWOOD HOME BUILDERS, INC., v. Mamie ZANAKIS, Appeal of Irene G. STRAKA.
    Superior Court of Pennsylvania.
    Argued April 14, 1981.
    Filed March 19, 1982.

      Damon J. Faldowski, Washington, for appellant.
    W. Thomas Laffey, Pittsburgh, for Atwood.
    Anthony J. Seneca, Washington, for Zanakis.
    Before CAVANAUGH, JOHNSON and SHERTZ, JJ.
   PER CURIAM:

Judge GLADDEN of the Washington County Court of Common Pleas entered an order staying, pending disposition of another case, a Sheriff’s sale of certain real estate. The stay was conditioned on the appellant depositing $12,500.00 with the Prothonotary of Washington County. Judge SWEET of the same court ordered that the stay be vacated and that the Prothonotary of Washington County pay over the funds deposited by Irene G. Straka to Atwood Home Builders Inc., [Atwood]. It is this order vacating the stay from which Irene G. Straka appeals.

This case is one of three cases, now consolidated before this court. It was filed in May 1978 by a home improvement company, Atwood, against a customer, Zanakis, as a Complaint in Assumpsit alleging breach of a contract to pay $14,000.00 for work done, pursuant to contract, to Ms. Zanakis’ home. Subsequently, the action came before an Arbitrator, the outcome of which procedure was a consent judgment against Zanakis for $11,000.00. This sum not having been paid, Atwood filed a praecipe for a default judgment in the amount of $11,000.00, which was entered on November 27,1978. Zanakis’ motion to open and strike that judgment was denied. Zanakis’ exceptions to the order were denied. Execution on the judgment was stayed by the order of Judge GLADDEN.

Irene G. Straka, Appellant, [Straka] is the daughter of Zanakis. A few days after the work by Atwood was completed, Zanakis conveyed the real estate in question to Straka. Twelve days before the stay, Straka filed an action in Equity against Atwood alleging that she was the legal and rightful owner of the premises, and that therefore the judgment against Zanakis could not be recovered by execution on that property.

Atwood asserts that Straka has no standing to appeal Judge SWEET’s order vacating Judge GLADDEN’s order granting a stay, because she was not a party to the proceedings, and had not petitioned to intervene.

Pa.R.A.P. 501 provides that an aggrieved party may appeal from an appealable order. This has been interpreted to mean that the harm to his/her interest must be direct, immediate, substantial and pecuniary in nature. See In the Matter of Harrison Square, Inc., 263 Pa.Super.Ct. 324, 397 A.2d 1230 (1979). The question of Straka’s standing, however, arises prior to this appeal.

Pa.R.C.P. 3121(a) provides in relevant part:

(a) Execution shall be stayed as to all or any part of the property of the defendant
(2) upon the entry of bond with the prothonotary, by any person or party in interest, with security approved by the prothonotary, in the amount of plaintiff’s judgment, including probable interest and costs, or in such lesser amount as the court may direct, naming the Commonwealth of Pennsylvania as obligee, and conditioned to pay the amount due within ninety (90) days of the entry of the bond, unless the time for payment be further extended by the court[.]

(Emphasis supplied). This seems to require that it be a party in interest who files the bond to obtain a stay of execution.

From the record it is not possible for us to determine whether or not the lower court considered and decided that Straka was a party in interest. By his action, however, in granting the stay for a permissible reason, namely the pending action filed by Straka, and in ordering a sufficient bond to be posted, Judge GLADDEN issued an order which is proper on its face. For purposes of this case we shall therefore treat it as such.

We are thus faced with the question of the propriety of Judge SWEET’s order overturning the stay. Appellant urges in her brief that Judge SWEET overruled an interlocutory order by a colleague in the same case and that this is improper. We agree with appellant’s assertion that such an action is improper. See Sherman v. Yoder, 59 Pa. Commw.Ct. 430, 430 A.2d 347 (1981), and cases cited therein. But in a situation such as this, where the stay is ordered pending disposition of another lawsuit, the law is quite clear that the order is not interlocutory, but final. See Cherry v. Empire Mutual Insurance Co., 417 Pa. 7, 10, 208 A.2d 470, 471 (1965).

The question still remains, though, whether Judge SWEET properly vacated the stay. The stay was ordered pending disposition of another case. There is no information in the record as to the disposition of that other case. We see, therefore, no reason why the stay should have been vacated, inasmuch as Atwood was protected by the posting of the bond.

Atwood’s Motion to Dismiss the Order Staying Execution contains both statements of fact and conclusions of law. Yet the motion was granted without a hearing. Without testimony as to Atwood’s allegations, and without reasons from the lower court as to why the judge vacated the stay order, we have no information by which to review the matter. We therefore vacate the order of the lower court and remand the case for a hearing on the Motion to Dismiss the Order Staying Execution and for Payment of a Cash Bond.

CAVANAUGH, J., concurs in the result.

SHERTZ, J., did not participate in the consideration or review of this case.

      . The other case was entitled, Irene G. Straka v. Atwood Home Builders, Inc., filed at No. 7604 in Equity, Book 44, Page 203, Court of Common Pleas, Washington County, on October 19, 1979. (There is confusion in the record and in the briefs before us as to whether this suit was filed at No. 7304 or at No. 7604.)

      . See Atwood Home Builders, Inc. v. Mamie Zanakis, No. 120 May Term 1978, A.D., slip op. July 24, 1979 (C. P. Washington County, Pa.).

      . Id.

      . Atwood v. Zanakis, No. 120 May Term 1978, A.D., per curiam order filed October 11, 1979 (C. P. Washington County, Pa.).

      . Atwood v. Zanakis, No. 120 May Term 1978, A.D., filed October 31, 1979 (C. P. Washington County, Pa.).

      . Irene G. Straka v. Atwood Home Builders, Inc., see note 1 supra.

      . Pa.R.A.P. 501 provides:
      Rule 501. Any Aggrieved Party May Appeal

      Except where the right of appeal is enlarged by statute, any party who is aggrieved by an appealable order, or a fiduciary whose estate or trust is so aggrieved, may appeal therefrom.

      . Compare Taub v. Merriam, 251 Pa.Super.Ct. 572, 380 A.2d 1245 (1977) where the court said:
      While ITT [a junior lender] was entitled to permission to intervene because of its legal interest in the land parcels under execution, the court’s refusal to permit intervention was not a denial of relief which ITT could obtain in no other way. At the very least appellant [ITT] was still entitled to seek relief under Pa.R.C.P. 3121(b) which it did.

        Id., 251 Pa.Superior Ct. at 581, 380 A.2d at 1249 (emphasis added). Pa.R.C.P. 3121(b) provides:
      (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 legal or equitable ground therefor.