author: WIEAND, Judge:

text:
    647 A.2d 939
    RYAN HOMES, INC., A Corporation, and NVR, L.P. General Partner Trading as Nvhomes, L.P., A Limited Partnership, Appellants, v. The HOME INDEMNITY COMPANY, City Insurance Company, California Union Insurance Co., Evanston Insurance Company, The American Insurance Company, First State Insurance Company, Hudson Insurance Company, National Union Fire Insurance Company of Pittsburgh, PA, Pennsylvania Insurance Guaranty Association, Royal Indemnity Company, and Twin City Fire Insurance Company, Appellees.
    Superior Court of Pennsylvania.
    Argued March 17, 1994.
    Filed Sept. 21, 1994.

      R. Bruce Carlson, Pittsburgh, for appellants.
    Barron P. McCune, Jr., Washington, for First State Ins., appellee.
    Greg T. Kinskey, Pittsburgh, for American Ins. Co., appellee.
    Before WIEAND, DEL SOLE and HUDOCK, JJ.
   WIEAND, Judge:

This appeal requires that we construe the business risk exclusions which appear in general liability policies issued by the appellee insurance companies and which exclude coverage for damage to work performed by or on behalf of the insured contractor. At issue is whether there is coverage under a general liability policy issued to a general contractor who is required to make repairs to construction work because of defective work by a subcontractor. The trial court held that coverage was barred by the business risk exclusions in the policies and disallowed recovery against the liability carriers for the general contractor. The contractor appealed. After careful review, we affirm.

Ryan Homes, Inc. and its affiliates (collectively Ryan) are contractors engaged in the business of building and selling homes. During the 1980s, a subcontractor installed as roof sheathing in Ryan homes plywood which had been treated with a fire retardant. Roof shingles and other roofing materials were thereafter applied over the sheathing by another subcontractor. Later, during the 1980s, Ryan learned that much of the treated plywood had been defective, was now deteriorating and was causing loss of structural strength which, if uncorrected, would eventually result in the collapse of many roofs. Faced with complaints by homeowners, Ryan undertook to repair the defective roofs. This required the removal of shingles and the deteriorating plywood and the installation of new plywood and shingles. In short, Ryan put new roofs on these homes.

Ryan made claims against its liability insurance carriers, which had provided primary and excess coverage, for the cost of removing and replacing the roof shingles, for disposing of the trash and for administering its program of handling customer complaints. It did not make any claim for removing the deteriorated plywood and replacing it with new plywood. Each of the carriers denied coverage.

Ryan then filed an action against its several carriers, naming as defendants the following: Home Indemnity Company, Ryan’s primary general liability insurance carrier from 1980 through 1990; American Insurance Company, Ryan’s excess general liability insurance carrier in 1980; Evanston Insurance Company, Ryan’s excess general liability insurance carrier in 1981; Integrity Insurance Company (now Pennsylvania Insurance Guaranty Association), Ryan’s excess general liability insurance carrier in 1982 and 1985; First State Insurance Company, Ryan’s excess general liability insurance carrier in 1983, 1984, 1986 and 1987; and City Insurance Company, Ryan’s excess general liability insurance carrier in 1988, 1989 and 1990. The defendants each filed separate motions for summary judgment based upon business risk exclusions appearing in their policies. The trial court granted summary judgment in favor of the excess liability carriers but denied it for the primary liability carrier, Home Indemnity Company. Ryan appealed. Because Ryan has since settled its disputes with Home Indemnity Company and City Insurance Company, we need only consider whether the excess general liability policies issued by American Insurance Company, Evanston Insurance Company, Integrity Insurance Company and First State Insurance Company exclude from coverage the claims which Ryan filed.

When considering an appeal from an order granting summary judgment, we view the record and all reasonable inferences therefrom in the light most favorable to the non-moving party. Denlinger, Inc. v. Dendler, 415 Pa.Super. 164, 170, 608 A.2d 1061, 1062 (1992). We will affirm such an order where the interrogatories, affidavits and depositions of record show that there are no genuine issues of material fact and that the moving party is entitled to judgment as a matter of law. Buckno v. Penn Linen & Uniform Serv., Inc., 428 Pa.Super. 563, 565-566, 631 A.2d 674, 675 (1993). Only where the right is clear and free of doubt should summary judgment be granted. Musser v. Vilsmeier Auction Co., Inc., 522 Pa. 367, 370, 562 A.2d 279, 280 (1989). Whether a loss is within an insurance policy’s coverage or barred by an exclusion is a question of law that may be decided by way of a motion for summary judgment. Solcar Equip. Leasing Corp. v. Pennsylvania Mfrs. Ass’n Ins. Co., 414 Pa.Super. 110, 120, 606 A.2d 522, 527 (1992).

When interpreting an insurance contract, words that are clear and unambiguous must be given their plain and ordinary meaning. Carpenter v. Federal Ins. Co., 432 Pa.Super. 111, 117-18, 637 A.2d 1008, 1011 (1994). Where ambiguities are found, they must be construed in the light most favorable to the insured. Bateman v. Motorists Mut. Ins. Co., 527 Pa. 241, 245, 590 A.2d 281, 283 (1991). However, “a contract is not rendered ambiguous by the mere fact that the parties do not agree upon the proper construction.” Metzger v. Clifford Realty Corp., 327 Pa.Super. 377, 386, 476 A.2d 1, 5 (1984), quoting Commonwealth State Highway & Bridge Auth. v. E.J. Albrecht Co., 59 Pa.Cmmw. 246, 251, 430 A.2d 328, 330 (1981). An ambiguity exists only when a policy provision is reasonably susceptible of more than one meaning. Musisko v. Equitable Life Assurance Soc’y, 344 Pa.Super. 101, 106, 496 A.2d 28, 31 (1985). “Courts should read policy provisions to avoid ambiguities, if possible, and not torture language to create them.” Carpenter v. Federal Ins. Co., supra at 118, 637 A.2d at 1011-1012. Whether a policy provision is ambiguous is a question of law to be decided by the courts. Metzger v. Clifford Realty Corp., supra, 327 Pa.Super. at 385, 476 A.2d at 5.

At issue here are the insurance agreements between appellant and four separate excess liability carriers. Each policy, although slightly different, contains exclusionary language which denies liability coverage for damage to the insured’s product or for damage to work performed by the insured arising out of that work. These exclusions, appellant urges, are ambiguous and should not operate to deny coverage under the facts of this case. Although appellant concedes that the policies do not cover the cost of repairing the damages to the work performed by the delinquent carpentry subcontractor, which installed the defective plywood, it urges that the policy should be interpreted to provide indemnity for the cost of repairing other work, i.e., the removal and replacement of the shingles and the hauling away of trash. With respect thereto, appellant argues, the language of the exclusion is ambiguous.

The meaning of similar business risk exclusions has been explored by other courts, and a clear majority has found the language of such provisions to be unambiguous. See: Dodson v. St. Paul Ins. Co., 812 P.2d 372, 374-375 n. 1 & 3 (Okla.1991) and cases cited therein. See also, e.g.: U.S. Fire Ins. Co. v. Colver, 600 P.2d 1 (Alaska 1979); B.A. Green Const. Co., Inc. v. Liberty Mut. Ins. Co., 213 Kan. 393, 517 P.2d 563 (1973). As the Carbon County court said in Mehlig v. Harter, 12 D. & C.3d 131 (Carbon 1979),

[T]he plain meaning of the language of this exclusion is simply that if the insured should become liable for property damage caused by an accident to work performed by or on behalf of the insured which accident arises out of the work or any portion thereof, the cost of replacement or repair of that work will not be covered.

Id. at 134.

In Gene & Harvey Builders, Inc. v. Pennsylvania Mfrs. Ass’n Ins. Co., 512 Pa. 420, 517 A.2d 910 (1986), a dwelling which the general contractor had constructed was damaged when the land subsided upon which it was built. The subsidence, it was alleged, had occurred because the general contractor had constructed the dwelling on unstable ground. When the contractor filed a claim with its general liability insurer, coverage was denied because of policy language which excluded coverage for damages to the insured’s product or to work performed by or on behalf of the insured. The Court held that the exclusion was unambiguous, that the contractor’s product was the house, and that any damage to the house arising out of the work thereon was not covered by the policy. Id. at 427-428, 517 A.2d at 914. See also: Id. at 428-429, 517 A.2d at 914 (concurring opinion of Nix, J., reasoning that the policy was unambiguous). Accord: Standard Venetian Blind Co. v. American Empire Ins. Co., 503 Pa. 300, 305, 469 A.2d 563, 566 (1983) (finding similar “work product” and “work performed” exclusions to be unambiguous); Solcar Equip. Leasing Corp. v. Pennsylvania Mfrs. Ass’n Ins. Co., supra, 414 Pa.Super. at 123, 606 A.2d at 528 (also finding work performed exclusion to be unambiguous).

General liability insurance policies are intended to provide coverage where the insured’s product or work causes personal injury or damage to the person or property of another. Erie Indemnity Co. v. McMullen, 1 D. & C.3d 562, 567 (Cumberland 1977). “Provisions of a general liability policy provide coverage [ ] if the insured work or product actively malfunctions, causing injury to an individual or damage to another’s property.” Owings v. Gifford, 237 Kan. 89, 93, 697 P.2d 865, 869 (1985). Such policies are intended to protect against limited risks and are not intended to act as performance bonds. Western World Ins. Co., Inc. v. Carrington, 90 N.C.App. 520, 523, 369 S.E.2d 128, 130 (1988). “A liability policy excluding damage to any goods or products made or sold by the insured or for ‘work completed by or for’ [the insured] does not insure any obligation of the policyholder to repair or replace [its] own defective work or product.” 43 Am.Jur.2d, Insurance § 719 (footnote omitted). The insured, therefore, must assume the risk of the quality of its product and its work.

Regardless of the underlying cause of action against the insured, [the exclusions] eliminate coverage for property damage caused by the lack of quality or performance of the insured’s products and for any repair or replacement of the faulty work performed by or on behalf of the insured. [The exclusions] unquestionably exclude coverage for the business risk incurred by the insured. As observed by the Supreme Court of Indiana in Indiana Insurance Company v. DeZutti, 408 N.E.2d 1275, 1279, note 1 (Ind.1980):

What is covered by the policy is defective workmanship which. causes personal injury or property damage not excluded under some provision of the policy. So if the insured’s breach of an implied warranty results in damage to property other than the insured’s work or product which is excluded by exceptions ..., the policy would provide coverage. To hold otherwise would effectively convert the policy into a performance bond or guarantee of contractual performance and result in coverage for the repair or replacement of the insured’s own faulty workmanship.

Dodson v. St. Paul Ins. Co., supra at 378 (emphasis in original).

The Pennsylvania courts, it appears, have not had occasion to consider the coverage provided by a general liability policy for the cost of repairing or replacing the work of a subcontractor which has been damaged by the poor workmanship of another subcontractor. This scenario, however, was before the court in Blaylock & Brown Constr. Co., Inc. v. AIU Ins. Co., 796 S.W.2d 146 (Tenn.App.1990). Analyzing similar “work product” and “work performed” provisions, the court held that coverage had been excluded. The court considered the business risks and responsibilities generally assumed by insured-contractors as well as the relationship between contractors and subcontractors and said:

[The contractor] had the responsibility for all construction work — its own as well as its subcontractors. It had “effective control” over all project work and materials, including those provided by the subcontractors. When the completed project is turned over to the owner by the general contractor, all of the work performed and materials furnished by the subcontractors merges into the general contractor’s product — a product it has contracted to complete in a good and workmanlike manner. Thereby it incurred the business risk of liability arising from its failure to fulfill that contractual obligation. Thus, whether the work was “done by” or “on behalf of’ the general contractor is irrelevant to the analysis. The completed product is to be viewed as a whole, not as a “grouping” of component parts.

Id. at 154. The “work performed by the named insured,” the court said, must be interpreted to include the work of all subcontractors hired by the insured in connection with the overall project.

In the instant case, the named insured is the general contractor and work performed by the insured must necessarily be such work as the named insured is required to perform under the construction contract. How the insured performs the work is a matter for its decision in the exercise of sound business practice. The contractor can employ subcontractors or use employees to do the work, but in the end, when the work is complete, all the work called for by the contract on the part of the contractor must be deemed to be work performed by the contractor. We hold that the language of the policy excludes liability coverage for the [contractor] for damage to the property constructed pursuant to the contract.

Id. at 154.

In Tucker Constr. Co. v. Michigan Mut. Ins. Co., 423 So.2d 525 (Fl.App.1982), a Florida appellate court held that a general liability policy which excluded coverage for damage to the insured’s product or to work performed by the insured excluded coverage where any portion of a project caused damage to any other portion of the same project.

The words “work performed by” in this context in the policy mean the same as “the [building] constructed by” the insured and was intended to exclude coverage of the insured’s contractual liability for damages to the “work” caused by the insured’s neglect or failure to complete and deliver the completed “work” in accordance with his contractual undertaking with the property owner.

Id. at 528. To hold otherwise, the court noted, would permit a contractor to receive an initial payment from the property owner, allow the project to proceed in a shoddy manner, and then to receive a subsequent payment from an insured company to correct its own mistakes or the mistakes of those it had hired. Id. at 528.

A Delaware court agreed and held that damage to any part of a contractor’s project is damage to the work of the insured regardless of the fact that the work was actually performed by a subcontractor. Vari Builders, Inc. v. U.S. Fidelity & Guar. Co., 523 A.2d 549, 552 (Del.Super.1986). The court said:

[Business risk] exclusions are designed to protect insurers from contractors’ attempts to recover funds to correct deficiencies caused by the contractors’ questionable performance. Their use demonstrates the insurers’ belief that the cost of not performing well is a cost of doing business and not considered part of the risk sharing scheme for which general liability policies are written.

Id. at 551. See also: Western Casualty & Sur. Co. v. Brochu, 122 Ill.App.3d 125, 77 Ill.Dec. 528, 460 N.E.2d 832 (1984), aff'd, 105 Ill.2d 486, 86 Ill.Dec. 493, 475 N.E.2d 872 (1985) (damage to building not covered under clause which excluded damages to insured’s product or work of insured); Century I Joint Venture v. U.S. Fidelity & Guar. Co., 63 Md.App. 545, 493 A.2d 370 (1985), appeal denied, 304 Md. 297, 498 A.2d 1183 (1985) (although developers had not performed any of the actual construction, they were responsible for all work on project and work performed by subcontractor was work of developers); Weedo v. Stone-E-Brick, Inc., 81 N.J. 233, 405 A.2d 788 (1979) (insurance policy excluded damage to any portion of contractor’s project); Zanco, Inc. v. Michigan Mut. Ins. Co., 11 Ohio.St.3d 114, 464 N.E.2d 513 (Ohio 1984) (damage to condominiums caused by negligence of suppliers was damage to developer’s product as well as damage to work performed by developer and was excluded from coverage). Contra: Fireguard Sprinkler Systs., Inc. v. Scottsdale Ins. Co., 864 F.2d 648 (9th Cir.1988) (general contractor not responsible for entire project so as to make work of subcontractor that of contractor); Harbor Ins. Co. v. Tishman Constr. Co., 218 Ill.App.3d 936, 161 Ill.Dec. 551, 578 N.E.2d 1197 (1991), appeal denied, 142 Ill.2d 654, 164 Ill.Dec. 917, 584 N.E.2d 129 (1991) (insurer has duty to defend contractor where project was damaged by work of subcontractor).

Appellant’s reliance on Carpenter v. Federal Ins. Co., supra, is misplaced. There, a home which the contractor had built and. to which he had transferred title to the buyer, was destroyed by a fire caused by a light fixture which had been defectively installed by a subcontractor. In the contractor’s policy of liability insurance, a clause similar to those appearing in the policies in this case had been deleted by endorsement and replaced by a clause as follows:

[We do not cover] property damage to work performed by you arising out of the work or any portion of it, or out of materials, parts or equipment furnished but only with respect to (a) the Completed Operations Hazard and (b) any classification stated on the Declarations as “including completed operations.”

See: Id. at 123, 637 A.2d at 1014. In interpreting this clause, the Court reasoned

“[T]he purpose of a work products exclusion in a commercial liability insurance policy is to distribute the risks contemplated in the production or construction of a product” so that “if the product itself is flawed because of the failure of the insured [herein the appellee builders] in the work process, the insured must repair or replace it, but if the product’s failure causes injury or damage to third parties, the insurer [herein Erie] is responsible for indemnification of the loss.” Based on this reasoning, the trial court found the facts before it presented the exact situation wherein the work products exclusion clause would not apply. If the insured contractor or any subcontractor had been required to repair or replace some part of the Costello home because of negligence in the original construction, the work product exclusion would have applied. However, because the court found the damages to the Costello home were damages to the property of third parties as contemplated in the policy coverage as a completed operation, the court ruled the work product exclusion was inapplicable and Erie was responsible to compensate the Costellos for their loss.

Id. at 123, 637 A.2d at 1014.

In the case sub judice, appellant has repaired and replaced a part of the homes, i.e., the roofs, which it constructed, because the workmanship was defective. Even under the holding of Carpenter, the work product exclusion would be applicable to prevent coverage for the cost of replacing the roofs. Any other interpretation would make the policy not only a general liability policy but a performance bond guaranteeing the contractor’s workmanship.

Appellant undertook to construct homes and furnish the buyers with good quality residential structures. To assist it in doing so, appellant employed subcontractors to do some of the work. When it did so, the subcontractors were required to meet, and appellant was required to enforce, standards of good workmanship. When appellant purchased general liability coverage, language of the policy excluded coverage for a failure of the completed home to comply with the workmanship which the buyers had a right to expect under the terms of their contracts with appellant. For such liability, the trial court properly held, there was no coverage under the terms of appellant’s general liability policies of insurance.

The order entering summary judgment is affirmed.

      . The American Insurance and Integrity Insurance policies contain the following exclusions:
      This policy does not apply to [property damage to:]
      (d)(3) the named insured’s products arising out of such products or any part of such products,
      (4) work performed by or on behalf of the named insured arising out of the work or any portion thereof, or out of materials, parts or equipment furnished in connection therewith.
      The First State policy is slightly different but contains the following exclusion:
      This policy shall not apply ... [to damage to] goods, products or containers thereof, manufactured, sold, handled or distributed, or work completed by or for the INSURED, out of which the OCCURRENCE arises.
      Finally, the Evanston policy contains language identical to exclusion (d)(3) of the American and Integrity policies and also excludes: property damage to ... work performed by the Named Insured arising out of materials, parts or equipment furnished in connection therewith.


source: Caselaw Access Project

license: Public Domain

text:
    647 A.2d 945
    Wayne E. SCHAEFER, t/d/b/a Schaefer’s Excavating, Appellee, v. STEWARTSTOWN DEVELOPMENT COMPANY and D & D Scarborough, Inc., Appellants.
    Superior Court of Pennsylvania.
    Argued May 11, 1994.
    Decided Sept. 9, 1994.

      Donald H. Yost, York, for appellants.
    Timothy P. Ruth, York, for appellee.
    Before WIEAND, SAYLOR and CERCONE, JJ.
   WIEAND, Judge:

In this action to recover on an express contract to do excavation work, the trial court instructed the jury, without any request therefor, that even if there were no contract, the excavation contractor could recover on the basis of quantum meruit. The owner, against whom the jury returned a verdict, contends that this was error. We agree. Therefore, we reverse and remand for a new trial.

In June, 1987, Wayne E. Schaefer, t/d/b/a Schaefer’s Excavating (Schaefer), contracted to do excavation work for a development project owned by Stewartstown Development Company (Stewartstown). The terms of the agreement were set forth in a written contract which required Stewartstown to pay for the work a fixed price of $195,000.00. After Stewartstown had been working on the project for several months, a part of the development tract was sold, and the subdivision plan was revised. This caused a change in the scope of the excavation, as some of the work originally required was deleted and new work was added. After most of the excavation work had been done, a dispute arose regarding payment. Schaefer submitted bills in the total amount of $349,000.00, but Stewartstown made no payments beyond $197,000.00. Alleging breach of an express contract, Schaefer sued to recover a balance of $152,060.00, plus interest at the rate of one and one-half (I1/) percent per month. Stewartstown denied a contract to pay the difference and asserted a counterclaim for unfinished and/or defective work in the amount of $34,000.00. At a pre-trial conference, the possibility of a recovery on the basis of quantum meruit was discussed as it pertained to work in excess of that called for by the original contract; but the complaint was not amended, and the case went to trial on the basis of an express contract.

At trial, Schaefer’s testimony was that, in June, 1988, he had submitted to Stewartstown a written offer to finish the revised project for a total price of $360,000.00. This offer, he said, had been accepted orally by Stewartstown. Stewartstown denied that it had agreed to a price of $360,000.00, but did agree that the original contract had been modified to provide for payment of the additional work. This work, Stewartstown contended, was to be paid for at the unit prices on which the original contract had been based. On this basis, Schaefer would have been entitled to recover a total price of $233,000.00, of which $197,000.00 had already been paid. The jury returned a general verdict for Schaefer in the amount of $160,400.00.

The trial court, after charging the jury on the law of contracts, added the following instruction:

[W]ith an oral contract, particularly, there can be a problem in that one side may think we have agreed to do it this way and then the other side has a misunderstanding and they think they have agreed on something else.
They proceed to do the work and all of a sudden discover, [g]ee, we did not agree on the same thing. Now, that creates a problem because a contract is not valid and binding unless the parties have both agreed to the same thing.

Well, if they have not agreed to the same thing but the work is already done, obviously, it would not be fair for the owner of the land to receive the benefits of all the work and for the excavator to be out of all that money just because there was a misunderstanding.

What do you do in that situation? Well, you find, first of all, that you cannot enforce the terms of either agreement because there was a complete misunderstanding as to each party as to what the agreement was, so there was no agreement on the terms as either of them thought there was and what you then apply is what the law calls quantum meruit.

That simply means that you then, as a jury, determine what a fair price is for the work that was actually performed for the benefit that the owner of the land received.

He then has to pay that amount. So it is not a matter of what the owner thought the contract was. It is not a matter of what the contractor thought the contract was. Instead you determine what a fair amount is. So you have to determine here is there a contract, what were the terms of the contract, did the parties agree on the same terms.

[I]f not, if you find they did not have an agreement as to the same terms, then you apply quantum meruit and you determine what a fair amount would be for the work that was done and for the benefit that the land owner received, which I think brings you back to where I said at the beginning, which is you heard the testimony, you decide the case.

Later, the court said to the jury:

You also have to determine if there were any modifications to the contract; and if there were, then you have to go back and apply that whole legal process that I just described to the modifications.

Was there a meeting of the minds on the modifications? Did they both understand the same thing? And if they did, then you have a new contract.

You completely forget the first contract and you enforce the contract as modified; however, if you find that there were modifications but there was not a meeting of the minds, then you may be falling back on the quantum meruit that I mentioned before and you would award the amount that is fair for the work performed.

. Let me give you an example of how that would work using the actual terms. There was a plan presented to the contractor by the owner. There is a dispute as to whether it was the full plans showing all the riprap for the swale, the rock swale, or it was just a very preliminary plan that did not show that.

In response to it, the contractor/the excavator gave back a written proposal identifying certain work that would be done for a certain price. The land owner tells you this was a fixed price contract for a set amount of dollars and he tells you that the terms of that agreement were that the contractor would fully perform all the work necessary to carry out the plan, the full three sets of plans with the rock swale included.

The Plaintiff, the contractor, argues, no, they cannot be the same because my proposal only had 3500 in for swales and that swale work would have been a 75 — 70 or $75,000 item. So, obviously, I was not bidding on that; and if the owner thought I was, then, obviously, we had a big mistake.

The owner’s argument would be, [w]ait a minute, I gave the plans, what else could he have been bidding on, that is what I gave you, that is what I asked you to do and if you gave me a proposal to do the work, you must have been accepting what I asked you to bid on that is why I gave you the plans. So you would know exactly what to bill.

So you are going to have to work out was a contract reached at that point and what terms or was there just a failure to agree on the terms in which case you stop the contract in the sense of the quantum meruit. The owner still received the benefit of the work that was done under whatever the misunderstanding was and the contractor is still entitled to be paid for that work because the land owner here is getting the benefit of it and, therefore, he is getting the benefit of it.

It is fair to have him pay a reasonable price for it. The land owner indicated that since he had a fixed price contract, that if there was a mistake made, the contractor should be bound by that anyway.

It is difficult to know what it was that prompted the court to tell the jury that if the parties were mistaken about the meaning of their contract, the excavation contractor could nevertheless recover on the basis of quantum meruit. “Mistake” had not been pleaded as a defense, and the plaintiff had not alleged a cause of action based on quantum meruit. The issue for the jury was relatively uncomplicated and straightforward. That issue was whether the agreed price for the excavation work was a lump sum figure of $360,000.00 or a unit price, based on the original contract, under which the contractor’s total price would have been $233,000.00. It was error, therefore, for the trial court to inject such concepts as “misunderstanding,” “mistake,” and quantum meruit.

“The primary purpose of a court’s charge to the jury is to apprise the members of the jury, in an understandable manner, of the legal principles by which they must decide the case.” Hawthorne v. Dravo Corp., 352 Pa.Super. 359, 368, 508 A.2d 298, 302 (1986). It is well-established that “[t]he trial judge is bound to charge the jury only on the law applicable to the factual parameters of a particular case. It is also well recognized that a trial judge may not instruct the jury on law inapplicable to the matter before it.” McKee by McKee v. Evans, 380 Pa.Super. 120, 145, 551 A.2d 260, 272 (1988). Thus, “instructions given to a jury must be confined to the issues raised in the pleadings and the facts developed by the evidence in support of such issues.” Heymann v. Electric Serv. Mfg. Co., Inc., 412 Pa. 338, 348, 194 A.2d 429, 432 (1963). See also: Hrivnak v. Perrone, 472 Pa. 348, 354-355, 372 A.2d 730, 733 (1977); 38 Pennsylvania Law Encyclopedia, Trial, § 284. Cf. Rizzo v. Michener, 401 Pa.Super. 47, 54, 584 A.2d 973, 976 (1990) (“The charge of the trial court should not exclude any theory or defense that has support in the evidence.”). Thus, a court may not sua sponte instruct the jury on issues or theories not raised by the parties. McKee by McKee v. Evans, supra, 380 Pa.Super. at 146, 551 A.2d at 272. Accord: Hrivnak v. Perrone, supra 472 Pa. at 354-355, 372 A.2d at 733 (trial judge may not introduce theories not raised by parties); Hamley v. George, 365 Pa. 543, 548, 76 A.2d 181, 183 (1950) (instruction on inapplicable law is error which mandates new trial); Nye v. Commonwealth, Dep’t of Transp., 331 Pa.Super. 209, 216, 480 A.2d 318, 322 (1984) (trial judge may not instruct jury on inapplicable law); Morris v. Benson & Benson, Inc., 321 Pa.Super. 15, 17, 467 A.2d 870-871 (1983) (“The issues to be addressed at trial must be framed in the parties’ pleadings.”)

A similar issue was considered by the Supreme Court in Zawada v. Pennsylvania Sys. Bd. of Adjustment, 392 Pa. 207, 140 A.2d 335 (1958). There, the Court held that an action for breach of an express contract and an action to recover damages on the theory of quantum meruit were distinct in nature and that each had to be pleaded before a recovery therefor could be had. The Court explained:

That the two actions — quantum meruit and express contract — are utterly distinct in nature is clear beyond question: Lach v. Fleth, Admr., 361 Pa. 340, 348, 64 A.2d 821; John Conti Co., Inc. v. Donovan, 358 Pa. 566, 572, 57 A.2d 872; Cramer v. McKinney et al., Executors, 355 Pa. 202, 204, 49 A.2d 374. After a failure to prove an express contract to pay a sum agreed upon by the parties for services a claimant cannot then be allowed to recover in the same action the reasonable value of those services on the basis of a quantum meruit; such a claim must first be pleaded so that the defendant may have an opportunity to assert whatever defenses he may have against it: Burr Estate, 381 Pa. 547, 548, 113 A.2d 712; Cramer v. McKinney, 355 Pa. 202, 204, 49 A.2d 374, supra; Witten v. Stout, Executor, 284 Pa. 410, 412, 131 A. 360; Bemis et ux. v. VanPelt, Exr., et al., 139 Pa.Superior Ct. 282, 289, 290, 11 A.2d 499.

Id. 392 Pa. at 213, 140 A.2d at 338. It seems abundantly clear, therefore, that the issue in the instant case was unnecessarily muddied by the trial court’s unwarranted and inappropriate instructions on quantum meruit. Plaintiff alleged and relied upon an express contract by defendant to pay $360,000.00 for excavation work. The defendant alleged a contract for another price. Because the relationship between the parties was founded on an express contract, the doctrine of quantum meruit was inapplicable.

Unfortunately, the erroneous instruction may have caused the jury to make an award in an amount which it deemed “fair and reasonable” rather than one based on the agreement of the parties. The error, therefore, requires that a new trial be granted.

Under the circumstances, we find it unnecessary to consider the trial court’s jury instructions on plaintiffs right to recover pre-judgment interest. Suffice it to say that the court’s instructions do not contain clear error and that any ambiguity therein can readily be clarified upon a retrial.

Reversed and remanded for a new trial. Jurisdiction is not retained.


author: TAMILIA, Judge:

text:
    647 A.2d 948
    COMMONWEALTH of Pennsylvania, Appellant, v. Paul F. KOWALEK.
    Superior Court of Pennsylvania.
    Submitted Aug. 8, 1994.
    Decided Sept. 12, 1994.

      Scott C. Gartley, Asst. Dist. Atty., Wilkes-Barre, for Com., appellant.
    Michael Melnick, Shavertown, for appellee.
    Before CHULLO, TAMILIA and BROSKY, JJ.
   TAMILIA, Judge:

The Commonwealth takes this appeal from the Order of November 5, 1993, granting in part defendant’s petition for a writ of habeas corpus and dismissing the charge of driving under the influence of alcohol, 75 Pa.C.S. § 3731(a)(1). A preliminary hearing on the charges was held on July 21, 1993 before a district justice, at the conclusion of which all charges were held for court. Defendant filed a petition for writ of habeas corpus on September 2, 1990, and a hearing was held on the petition on September 28, 1993 before the Honorable Ann H. Lokuta of the Court of Common Pleas of Luzerne County. On November 5, 1993, the trial court entered the Order which forms the basis of this appeal.

The method for testing a finding of a prima facie case prior to trial, in this Commonwealth, is by a writ of habeas corpus. Commonwealth v. Hetherington, 460 Pa. 17, 331 A.2d 205 (1975). Thereafter, our scope of review is limited to deciding whether a prima facie case was established at the preliminary hearing. Commonwealth v. Lynch, 270 Pa.Super. 554, 411 A.2d 1224 (1979). Proof of guilt beyond a reasonable doubt is not required at this stage. Id. Rather, the Commonwealth must show “sufficient probable cause” that the defendant committed the offense, and the evidence should be such that if presented at trial, and accepted as true, the judge would be warranted in allowing the case to go to the jury. Id.

To that end, we examine the evidence as established at the habeas corpus hearing. State Police Trooper Todd Leiby testified that on the evening of May 28, 1993, the State Police were operating a field sobriety checkpoint on State Route 11 in Hunlock Township, Luzerne County. As part of the operation, every vehicle was being stopped as it passed through the checkpoint. At or around 9:35 p.m., Trooper Leiby stopped defendant’s vehicle, and upon the defendant rolling down his window, the trooper detected a strong odor of alcohol. The trooper also noticed defendant had red, bloodshot eyes, slurred speech and refused to direct his voice toward the trooper. Further, defendant had some difficulty in producing his driver’s license, registration and proof of insurance. Trooper Leiby then requested defendant exit his vehicle and perform a field sobriety test, consisting of a one-leg stand, which defendant failed. At that point, defendant was placed under arrest. Defendant consented to a blood test and he was transported to a local hospital where blood was drawn, indicating a blood alcohol level of 0.16%. Trooper Leiby’s opinion, based upon his education, training and experience was that defendant was under the influence of alcohol to a degree which rendered him incapable of operating his vehicle safely.

On appeal, the Commonwealth argues the above evidence established a prima facie case that defendant was operating a motor vehicle while under the influence of alcohol to a degree which rendered him incapable of safe driving. Appellee counters that because Trooper Leiby’s uncontradicted testimony established that appellee was not driving erratically and had committed no moving violation of the Vehicle Code, the evidence was insufficient to maintain a charge under 75 Pa.C.S. § 3731(a)(1).

The Vehicle Code defines the offense of driving under the influence, in pertinent part, as follows:

§ 3731. Driving under influence of alcohol or controlled substance
(a) Offense defined. — A person shall not drive, operate or be in actual physical control of the movement of any vehicle while:
(1) under the influence of alcohol to a degree which renders the person incapable of safe driving;
(4) the amount of alcohol by weight in the blood of the person is 0.10% or greater.

75 Pa.C.S. § 3731(a)(1) and (4).

Our Supreme Court has stated:

In order to establish appellee’s guilt the Commonwealth had to prove: (1) that he was operating a motor vehicle, (2) while under the influence of alcohol to a degree which rendered him incapable of safe driving. 75 Pa.C.S. § 3731(a)(1), Commonwealth v. Horn, 395 Pa. 585, 590-91, 150 A.2d 872, 875 (1959). See also Commonwealth v. Arizini, 277 Pa.Super. 27, 419 A.2d 643 (1980). Here, there is no dispute with respect to the first element. With respect to the second element, this Court has previously interpreted the phrase “under the influence of alcohol” thusly:

The statute does not require that a person be drunk, or intoxicated, or unable to drive his automobile safely in traffic, but merely that the Commonwealth prove beyond a reasonable doubt that the defendant was operating his automobile under the influence of intoxicating liquor---The statutory expression “under the influence of intoxieating liquor” includes not only all the well known and easily recognized conditions and degrees of intoxication, but also any mental or physical condition which is the result of drinking alcoholic beverages and (a) which makes one unfit to drive an automobile, or (b) which substantially impairs his judgment, or clearness of intellect, or any of the normal faculties essential to the safe operation of an automobile,

Commonwealth v. Horn, 395 Pa. 585, 590-91, 150 A.2d 872, 875 (1959) (emphasis added).

Thus, substantial impairment, in this context, means a diminution or enfeeblement in the ability to exercise judgment, to deliberate or to react prudently to changing circumstances and conditions. Its meaning is not limited to some extreme condition of disability.

Commonwealth v. Griscavage, 512 Pa. 540, 545-46, 517 A.2d 1256, 1258 (1986).

The Griscavage Court, in reversing, found error in the Superior Court’s “application of a hitherto unapproved rule of law which provided that the manner of operation of an automobile must be extreme and uncontrolled before it may be allowed to serve as a basis for a reasonable inference that it was caused by the inference of alcohol.” Id. at 547, 517 A.2d at 1259.

We find analogous this Court’s decision in Commonwealth v. Wilson, 381 Pa.Super. 253, 553 A.2d 452 (1989). In Wilson, appellant was arrested and convicted under both section 3731(a)(1) and (a)(4), after police found appellant belligerent, disorderly and apparently in a highly intoxicated state attempting to drive his car from an Elks Club parking lot. Wilson argued that since driving under the influence of alcohol is defined in the Vehicle Code as a “Serious Traffic Offense”, which offenses must be committed on a highway or a traffic-way, his conviction should be reversed, inasmuch as the Elks Club parking lot was neither a highway nor a trafficway. See 75 Pa.C.S. §§ 3101; 102.

This Court agreed with an earlier Commonwealth Court finding that the legislature intended parking lots to be included within the definition of trafficways. “It would raise form to towering levels above substance if parking lots, in which vehicular traffic is encouraged and occurs, sometimes at high rates of speed, were to become ‘DWI-free zones,’ in which drunk driving is tolerated from entrance to exit. Such a construction would seriously undermine the effectiveness of any drunk driving prohibitions.” Wilson, supra at 257, 553 A.2d at 454 (emphasis added). See Commonwealth v. Owen, 397 Pa.Super. 507, 580 A.2d 412 (1990) (Dissenting Opinion by Tamilia, J.).

An Act of Assembly which imposes penal sanctions for violations of its provisions must be strictly construed. 1 Pa.C.S. § 1928. Commonwealth v. Hill, 481 Pa. 37, 391 A.2d 1303 (1978). “However, strict construction does not require that the words of a criminal statute be given their narrowest meaning or that the legislature’s evident intent be disregarded.” Commonwealth v. Gordon, 511 Pa. 481, 486-87, 515 A.2d 558, 561 (1986). In attempting to ascertain the meaning of a statute, we are required to consider the intent of the legislature and are permitted to examine the practical consequences of a particular interpretation. Commonwealth v. Stewart, 375 Pa.Super. 585, 544 A.2d 1384 (1988). We are to presume the legislature did not intend a result that is absurd or unreasonable. Commonwealth v. Martorano, 387 Pa.Super. 151, 563 A.2d 1229 (1989).

Conversely, appellee’s suggested construction of section 3731(a)(1) could result in the following hypothetical situation. A drunken driver is fortuitous enough not to topple safety cones, strike police cruisers or otherwise drive erratically when approaching a sobriety checkpoint. When met by police, however, the driver exhibits an odor of alcoholic beverage, bloodshot eyes, slurred speech, has difficulty producing his driver’s license, registration and insurance cards and is unable to complete successfully a field sobriety test. Nevertheless, by refusing to consent to blood or chemical testing, the driver thwarts any determination that his blood alcohol level was greater than 0.10%. Consequently, the driver may not be charged under 3731(a)(1) or (a)(4). Although the driver would face an automatic one-year suspension of his driving privilege, no criminal sanction would attach. 75 Pa.C.S. § 1547(b)(1). Clearly, the legislature did not intend such a construction, which “would seriously undermine the effectiveness- of any drunk driving prohibitions.” Wilson, supra. Such an interpretation would also render meaningless the operation of sobriety checkpoints, which have proven to be effective deterrents to drunk driving.

We also find instructive a footnote in a Supreme Court decision reached several months before Griscavage. In that case, Commonwealth v. McGinnis, 511 Pa. 520, 515 A.2d 847 (1986), appellant was stopped for a summary, traffic offense and when he exhibited signs of intoxication, was placed under arrest and charged with driving under the influence. As dicta, the Supreme Court stated:

While the testimony of the police was sufficient to establish their probable cause in arresting Appellant and requesting him to submit to a breathalyzer test, it does not follow that their observations of Appellant established a sufficiently independent basis for finding that Appellant was, in fact, guilty of violating 75 Pa.C.S. § 3731(a)(1). The witnesses who testified against Appellant observed that Appellant was argumentative, belligerent, fumbled through his cards to find proper identification, had glassy and slightly bloodshot eyes, and had an odor of alcohol about him. No testimony was offered, however, concerning whether Appellant had trouble walking on his own, whether he staggered, had slurred or incoherent speech, or performed poorly on a physical coordination test. In fact, it was admitted that no sobriety test was conducted in this case.

The fact that a person becomes belligerent or has difficulty in finding his driver’s license or owner’s card under a stressful situation, has bloodshot eyes at 5:00 a.m., or glassy looking eyes when a strong flashlight is turned on him does not establish intoxication. The only evidence supportive of a conclusion of Appellant’s intoxicated state was the observation of the officers that Appellant had an odor of alcohol about him. Without additional testimony to establish whether Appellant could ambulate on his own and speak coherently, or other evidence to show that Appellant was not in control of himself, we find the evidence insufficient to establish that Appellant was under the influence of alcohol to a degree which rendered him incapable of safe driving.

Id. at 526 n. 4, 515 A.2d at 851. The Supreme Court’s observation indicates to this Court a charge under section 3731(a)(1) supported by sufficient evidence that the driver was not in control of himself, such as failing to pass a field sobriety test, could establish the driver was under the influence of alcohol to a degree which rendered him incapable of safe driving, notwithstanding the absence of evidence of erratic or unsafe driving. Viewing McGinnis together with Griscavage, we find a charge of driving under the influence under section 3731(a)(1), alleging the driver incapable of safe driving, is not precluded merely because at the time of arrest the driver was not observed to drive unsafely.

In the case before us, Trooper Leiby presented uncontradicted evidence that defendant had a strong odor of alcohol about him and bloodshot eyes. More significantly, defendant had difficulty producing his driver’s license and registration, had slurred speech and was unable to stand on one foot for more than three seconds. We find this evidence is precisely the additional testimony of which McGinnis speaks and which establishes a prima facie case that appellee was under the influence of alcohol to a degree which rendered him incapable of safe driving.

For these reasons, we find the trial court erred in dismissing the charge under section 3731(a)(1), and we reverse that portion of the Order of November 5, 1993.

Order reversed in part and case remanded for proceedings consistent with this Opinion.

Jurisdiction relinquished.

      . Though Commonwealth v. Horn, 395 Pa. 585, 150 A.2d 872 (1959), was decided under a prior drunk driving statute, we see no reason to tamper with its requirements in establishing the element of “under the influence”; and we note that the wording of the present statute, in defining this element, parallels our wording in that case. Compare Horn, supra, with 75 Pa.C.S. § 3731(a)(1).


author: POPOVICH, Judge:

text:
    647 A.2d 952
    In re S.K., Minor. Appeal of S.K.
    Superior Court of Pennsylvania.
    Argued June 29, 1994.
    Decided Sept. 14, 1994.

      Joseph J. Chester, Pittsburgh, for appellant.
    Kemal A. Mericli, Asst. Dist. Atty., Pittsburgh, for the Com., participating party.
    Before POPOVICH, SAYLOR and HOFFMAN, JJ.
   POPOVICH, Judge:

This case involves an appeal from an order of the Court of Common Pleas of Allegheny County (per Jaffe, J.) adjudicating the minor/appellant, S.K., delinquent of possession of a controlled substance (crack cocaine). We affirm.

The facts, viewed in a light most favorable to the verdict-winner and drawing all reasonable inferences therefrom, reveal that Timothy Lamont Morris, a security officer for the Pittsburgh Board of Education, was on duty at Allegheny Middle School on December 7, 1993. Officer Morris was making his way to the third floor of the school building when he heard someone in the boys’ room on that level. Upon entering the lavatory, the officer smelled smoke and observed the appellant in the company of another youth. When the appellant saw the officer, he turned immediately and walked in the direction of a stall.

Because it was a violation of the school’s behavior code to be smoking, Officer Morris asked the appellant if he had been smoking. At first, the appellant gave a negative response but then admitted to smoking. Next, he was observed about to enter another stall while fidgeting with the front of his shirt and going in and out of his pockets. This caused the officer to ask, “What’s wrong? What are you doing?” To which the appellant retorted, “Nothing, I have to go to the bathroom.” When the appellant continued in his unorthodox behavior, Officer Morris “patted Sean’s right pocket and felt a lump that felt like cigarettes.” The officer initiated this search for cigarettes, given that the appellant had admitted smoking and it was a violation of the school’s code to engage in such conduct on school property.

However, the search of the appellant did not cease with a retrieval of a pack of cigarettes. Rather, the officer proceeded to feel something “kind of funny” in the appellant’s front left pocket and removed what appeared (and later tested) to be three packets of crack cocaine. The seized items and the appellant were delivered to the dean of the school, whereupon the police were summoned and the appellant was arrested. A motion to suppress was denied and the appellant was adjudicated delinquent of possession of cocaine and sentenced accordingly. This appeal followed and challenges the sufficiency of the evidence and the court’s failure to suppress the evidence seized.

In resolving the suppression question, we are guided by the United States Supreme Court’s determination in New Jersey v. T.L.O., 469 U.S. 325, 105 S.Ct. 733, 83 L.Ed.2d 720 (1985), that the Fourth Amendment’s prohibition against unreasonable searches and seizures applies to searches conducted by public school officials.

In T.L.O., a teacher discovered two girls (one being the appellant) smoking in the lavatory. Because this was a violation of the school’s code, the girls were taken to the principal’s office where the appellant’s companion admitted violating the rule to the vice-principal. However, the appellant denied smoking and indicated that she did not smoke at all.

The appellant was taken into the vice-principal’s private office and asked to see her purse. The school official opened her purse, found a pack of cigarettes and removed them from their contents and accused the appellant of lying. Further, while reaching for the cigarettes, the vice-principal noticed a package of cigarette rolling papers, which his experience led him to associate with the use of marijuana. Believing that a closer scrutiny of the purse might disclose additional evidence of drug use, the vice-principal proceeded to search the purse thoroughly. The search produced various items of drug paraphernalia implicating the minor in marijuana dealing and possession, of marijuana.

The police were notified and the minor, in the company of her mother, confessed to selling marijuana at the high school. This prompted delinquency charges against the minor. A motion to suppress the evidence seized and confession given as unlawful was denied by the Juvenile Court and resulted in the imposition of a year’s probation after adjudication of delinquency. The intermediate appellate court (Superior Court) affirmed, but the Supreme Court of New Jersey reversed and ordered the suppression of the evidence seized.

A petition for certiorari was granted and resulted in a reversal of the New Jersey Supreme Court’s decision to exclude the evidence removed from the minor’s purse. In advance of its ruling, the United States Supreme Court had to strike a balance between an individual’s expectation of privacy and the government’s need to deal with breaches of the public order. In balancing the two, the Court observed that assessment of the reasonableness of searches and seizures depends on the context in which a search takes place, and, more importantly, it concluded that “the school setting requires some easing of the restrictions to which searches by public authorities are ordinarily subject” and a “modification of the level of suspicion of illicit activity needed to justify a search” was warranted. 469 U.S. at 340, 105 S.Ct. at 742. Specifically, the Court wrote:

We join the majority of courts that have examined this issue in concluding that the accommodation of the privacy interests of schoolchildren with the substantial need of teachers and administrators for freedom to maintain order in the schools does not require strict adherence to the requirement that searches be based on probable cause to believe that the subject of the search has violated or is violating the law. Rather, the legality of a search of a student should depend simply on the reasonableness, under all the circumstances, of the search. Determining the reasonableness of any search involves a twofold inquiry: first, one must consider “whether the ... action was justified at its inception,” Terry v. Ohio, 392 U.S. [1], at 20, 88 S.Ct. [1868], at 1879 [20 L.Ed.2d 889]; second, one must determine whether the search as actually conducted “was reasonably related in scope to the circumstances which justified the interference in the first place,” ibid. Under ordinary circumstances, a search of a student by a teacher or other school official will be “justified at its inception” when there are reasonable grounds for suspecting that the search will turn up evidence that the student has violated or is violating either the law or the rules of the school. Such a search will be permissible in its scope when the measures adopted are reasonably related to the objectives of the search and not excessively intrusive in light of the age and sex of the student and the nature of the infraction.

469 U.S. at 341-42, 105 S.Ct. at 742-13 (Footnotes omitted).

In applying its new standard to the facts, the T.L.O. Court observed that two searches were involved: the first being the search for cigarettes, which provided fuel (“suspicion”) for the second, i.e., the search for marijuana. Although the second produced the incriminating evidence, the propriety of the first search was crucial since it (reasonableness of the search for cigarettes) was the linchpin to the seizure of the marijuana suspected to be in T.L.O.’s possession.

There was a report that T.L.O. was smoking in the lavatory, which information provided the vice-principal with “reason to suspect” that T.L.O. was carrying cigarettes and her purse was the obvious place to find them. Accordingly, the Court found that the school official acted reasonably in examining the purse for cigarettes. The Court went on to observe that:.

... [The vice-principal’s] decision to open T.L.O.’s purse was reasonable brings us to the question of the further search for marijuana once the pack of cigarettes was located. The suspicion upon which the search for marijuana was founded was provided when [the vice-principal] observed a package of rolling papers in the purse as he removed the pack of cigarettes. Although T.L.O. does not dispute the reasonableness of [the vice-principal’s] belief that the rolling papers indicated the presence of marijuana, she does contend that the scope of the search [the vice-principal] conducted exceeded permissible bounds when he seized and read certain letters that implicated T.L.O. in drug dealing. This argument, too, is unpersuasive. The discovery of the rolling papers concededly gave rise to a reasonable suspicion that T.L.O. was carrying marijuana as well as cigarettes in her purse. This suspicion justified further exploration of T.L.O.’s purse, which turned up more evidence of drug-related activities: a pipe, a number of plastic bags of the type commonly used to store marijuana, a small quantity of marijuana, and a fairly substantial amount of money. Under these circumstances, it was not unreasonable to extend the search to a separate zippered compartment of the purse; and when a search of that compartment revealed an index card containing a list of “people who owe me money” as well as two letters, the inference that T.L.O. was involved in marijuana trafficking was substantial enough to justify [the vice-principal] in examining the letters to determine whether they contained any further evidence. In short, we cannot conclude that the search for marijuana was unreasonable in any respect.

469 U.S. at 347, 105 S.Ct. at 745-46.

Applying the T.L.O. standard to a factual scenario which has heretofore been undecided in this Commonwealth, we note, initially, that Officer Morris entered the boys’ lavatory, detected the odor of smoke and observed the appellant and another youth present therein. On questioning from the officer, the appellant at first denied but then admitted smoking. Therefore, we cannot merely ignore the appellant’s admission to conduct prohibited by school regulations, which, when coupled with the aroma of smoke in the room, allowed for the search of his person to corroborate his statement of smoking.

In fact, the appellant’s furtive activity (e.g., turning away from the officer; walking toward a stall; making contact with his pockets in random fashion sufficient to attract the officer’s attention and query as to what he was doing) merely enhanced the reasonable suspicion already present that the appellant may have been in possession of cigarettes allowing for a pat-down of his person by the officer. In other words, it was not unreasonable to suspect that the appellant was in possession of cigarettes.

Consequently, when Officer Morris patted-down the appellant’s right pocket and found a pack of cigarettes, “[t]his suspicion justified further exploration” of the appellant’s person (left pocket), which produced evidence of drug-related activity: three plastic bags of crack cocaine. Ergo, we cannot conclude that the search of the appellant’s person (initially for cigarettes and thereafter for the same or other evidence of proscribed conduct, i.e., other cigarettes) was unreasonable in any regard.

Because we hold that the search of the appellant’s person was reasonable, the evidence seized was not suppressible and the proof necessary to establish a violation of the Controlled Substance, Drug, Device and Cosmetic Act (possession of crack cocaine) was satisfied (in both quantity and quality) beyond a reasonable doubt to affirm the adjudication of delinquency and sentence imposed.

Order affirmed.

      . The appellant was sentenced to six months in Allegheny Academy.

      . The officer testified that the object in the left pocket felt like matches.

      . Interestingly, the T.L.O. Court made no mention of Miranda rights attaching in this context, nor are we persuaded by the appellant that such precepts enunciated therein for custodial interrogation should attach or apply to the case sub judice.


author: CIRILLO, Judge:

text:
    648 A.2d 9
    FIRST HOME SAVINGS BANK, FSB v. A. Richard NERNBERG t/d/b/a A.R. Building Company and Baldwin Village Home Owners Association, a Not-For-Profit Corporation. Appeal of A. Richard NERNBERG t/d/b/a A.R. Building Company.
    Superior Court of Pennsylvania.
    Argued April 27, 1994.
    Filed July 18, 1994.
    Reargument Denied Sept. 29, 1994.

      Robert L. Potter, Pittsburgh, for appellant.
    William G. Merchant, Pittsburgh, for appellee.
    Before ROWLEY, President Judge, and CIRILLO and OLSZEWSKI, JJ.
   CIRILLO, Judge:

A. Richard Nernberg t/d/b/a A.R. Building Company appeals from the judgment entered in the Court of Common Pleas of Allegheny County, granting First Home Savings Bank’s request to enforce its mortgage lien against the entire mortgaged parcel. We affirm.

The facts as stipulated by the parties are as follows: First Home Savings Bank (hereinafter “Bank”) is a savings and loan association organized and existing under the laws of the Commonwealth of Pennsylvania. Bank’s principal place of business is Pittsburgh, Pennsylvania. A. Richard Nernberg resides in the City of Pittsburgh and conducts a real estate, management and development business as a sole proprietorship under the name “A.R. Building Company.”

On December 22, 1986, A. Richard Nernberg and his wife, Susan Nernberg, executed a promissory note payable to Bank in the principal amount of $375,000.00 (“Note”). The Note is a demand note with interest payable monthly at the prime rate plus 1.5 percent. Under the terms of the Note, the Nernbergs are personally liable for ten percent of the original principal amount, or $37,500.00.

On December 22, 1986, simultaneous with the execution of the Note, A. Richard Nernberg as “A.R. Building Co.” (hereinafter collectively referred to as “Developer”) granted Bank a first mortgage on Lots 6 through 15 of a townhouse development project named “Baldwin Village.” The mortgage was duly recorded in the Recorder of Deeds Office in Allegheny County, Pennsylvania.

On April 3, 1987, Developer wrote to Bank as follows:

Dear Mr. Vuono:

We are preparing to construct additional townhouses on the Lots 6 and 7 at the above-captioned development [Baldwin Village]. This will provide for the construction of an additional 13 townhouses.

Would you please furnish a written release figure which would be paid once the townhouses are sold?

Very truly yours,

A. Richard Nernberg,

President

On April 14, 1987, Bank, by its Vice President Robert J. Vuono, replied to Developer’s letter as follows:

Dear Dick,

I am in receipt of your letter of April 3, regarding Baldwin Village. Sorry for the delay in response. Please be advised that we are prepared to release that portion of our mortgage on Lots 6 and 7 upon receipt of $75,000.00 paydown on your existing loan.

I trust this is satisfactory for your needs. If you have any questions, please feel free to call.

Very truly yours,

Robert J. Vuono

Vice President

Mr. Vuono, as Bank’s Vice President in charge of commercial loans, had authority to write the letter of April 14, 1987. Whatever the legal effect of the exchange of the April, 1987 letters between Developer and Bank (hereinafter the “Release Agreement”), both parties agree that Bank is bound by that effect.

' On April 6,1987, Developer had not yet started construction of Buildings 6 and 7, which were to contain six and eight townhouses, respectively. Construction of Building 6 started in June, 1987 and was completed in November, 1987 at a cost of $194,806.00. Construction of Building 7 started in July, 1987 and was completed in November, 1987 at a cost of $291,797.00.

In November of 1987, Developer sold two units in Building 6 (Units “C” and “E”), and Bank released the lien of its mortgage for both units, when paid $15,000.00 ($7,500.00 per unit) by Developer. In May of 1988, Developer sold another unit in Building 6 (Unit “A”). Again, Bank released the lien on its mortgage against Unit “A” when paid $7,500.00 by Developer.

On June 20, 1988, Bank demanded payment of the entire unpaid principal of the $375,000.00 loan, which at that date was $352,500.00 ($375,000.00 minus the $22,500.00 previously paid). At that time, Developer was current in the payment of interest on the Note and was not in the process of constructing any additional townhouses. In fact, Developer has not, since June 20, 1988, begun construction of any additional townhouses in Baldwin Village.

On June 28, 1988, Developer tendered to Bank the sum of $52,500.00, which represented the balance due under the Release Agreement, and asked for release of Bank’s mortgage lien on the balance of Lots 6 and 7. Bank rejected the tender.

On June 29, 1988, a closing was held for the sale of two units in Building 6 (Units “B” and “D”). The settlement officer of these closings, acting on behalf of Developer, tendered to Bank the sum of $52,500.00 from the sale of these two units. Bank again rejected the tender of the $52,500.00. Bank indicated, however, that it would release the lien of its first mortgage with respect to Units “B” and “D” on receiving evidence that those units had been under contract of sale prior to June 20, 1988 and in return for a principal paydown of $7,500.00 per townhouse. Bank’s reasoning was that if Units “B” and “D” had been under contract of sale at the time that Bank demanded payment of the unpaid principal on the Note, then under the doctrine of “equitable conversion,” the “B” and “D” units should be regarded as already sold on the date Bank put Developer into default.

On November 16, 1988, Developer paid $15,000.00 to Bank with respect to the sale of Units “B” and “D” from Budding 6, and Bank released the lien of its mortgage from those two units. Bank accepted this payment based upon the “equitable conversion” theory set forth above, Units “B” and “D” having been under contract of sale as of June 20, 1988.

On February 24, 1989, Developer entered into an “Interim Agreement” with Bank. Basically, Bank would accept the balance of the $75,000.00 principal reduction from the April, 1987 correspondence and would release the lien of its mortgage from Lots 6 and 7, but without prejudice to its contention that after June 20, 1988, it was under no obligation to release the lien of its mortgage from further units on Lots 6 and 7. Accordingly, Developer paid an additional $37,500.00 to Bank, and Bank released its mortgage from the balance of Lots 6 and 7.

Under the “Interim Agreement,” Developer agreed to accept a “conditional” personal liability for the total sale price of townhouses sold after June 20, 1988 up to the outstanding principal balance of the loan should Bank’s position be determined in litigation to be correct. Bank agreed, in turn, that should Developer’s position be accepted, then Bank’s rights would be limited to the ten percent personal liability ($37,-500.00) as set forth in the loan documents and to its mortgage on the balance of the property, Lots 8 through 15.

The “Interim Agreement” did not resolve the controversy between Developer and Bank. It expressly provided that nothing in the agreement shall be taken as modifying or changing the substantive rights of the parties immediately prior to having entered into the “Interim Agreement.” The parties did agree, however, that five units in Building 6 had been released either prior to the June 20, 1988 demand for payment or under the “equitable conversion” theory. The parties further agreed that nine units remained unsold (one unit in Building 6 and all eight units in Building 7) and that all such sales and lien releases were accomplished under the “Interim Agreement.” The unpaid principal of the loan subject to the “Interim Agreement” is $300,000.00.

The remaining nine units were sold at the following prices and dates:

As a result of Developer’s failure to pay the balance due under the Note, Bank initiated a foreclosure action against Developer. Developer, in turn, filed an action in equity, seeking specific performance as to Bank’s alleged promise in the Release Agreement to release its lien on Lots 6 and 7, following tender of $75,000.00. The two actions were subsequently consolidated and the case proceeded to trial before the Honorable S. Louis Farino. At trial, the principal issues presented were whether, on June 20, 1988, Bank was within its rights to demand full payment under the Note and whether Developer was entitled to defeat a portion of Bank’s demand for payment in full based upon the unexecuted portion of the Release Agreement. Put somewhat more simply, the dispute centered on the determination of the effect of the Release Agreement on the original mortgage/note agreement, and the determination of whether the Release Agreement was enforceable after Developer defaulted on the Note.

Following trial, Judge Farino found in favor of Bank. In his view, on June 20, 1988, Bank was entirely within its rights to demand payment in full on the Note, and Developer’s subsequent failure to make full payment constituted a default under the Note and mortgage. Judge Farino further found that the Release Agreement did not survive Developer’s default, because the parties did not include in the agreement a provision stating that the arrangement would continue to be in effect following a material default by Developer. Thus, Judge Farino concluded that the Release Agreement was rendered void upon Developer’s default. Post-trial motions were filed and denied and this appeal followed.

On appeal, Developer presents the following issues for our review:

(1) Whether the trial court erred in adopting an interpretation of promissory language by Bank which gave Bank the power by its own unilateral act to nullify and render illusory its promise where Developer had constructed two buildings in reliance on the promise?

(2) Whether Bank, which had permitted Developer to pay a lien release fee in installments as each townhouse was sold, was estopped from abruptly changing its position, without first giving Developer the opportunity to pay the balance of the fee due in a single payment?

Initially, we note that as the trial court made no independent factual findings, but simply relied on the factual stipulation of the parties, our standard of review is de novo; that is, we are not bound by the factual or legal conclusions drawn by the trial court. County of Butler v. Brocker, 455 Pa. 343, 314 A.2d 265 (1974).

Developer first argues that the Release Agreement constituted a binding modification of the original demand note/mortgage agreement. As such, Developer claims that Bank was precluded from demanding full payment under the Note, but was limited to the outstanding balance due minus the $75,-000.00 figure quoted by Bank in its April 14, 1987 letter. To view this arrangement otherwise, Developer opines, would render Bank’s promise to release the liens on Lots 6 and 7 illusory, as Bank could unilaterally terminate the Release Agreement by a demand for full payment under the Note. Such illusory contractual obligations, Developer contends, fly in the face of the law of contracts of this Commonwealth.

Developer’s argument is based upon the assumption that the Release Agreement was a valid, enforceable contract. To this end, Developer argues that Bank’s offer to release the liens on Lots 6 and 7 in exchange for a principal paydown of $75,000.00 on the Note was supported by Developer’s construction of townhouses on the lots in question. This argument, albeit clever, is without merit.

Contracts are enforceable when the parties reach a mutual agreement, exchange consideration, and have set forth the terms of their bargain with sufficient clarity. Greene v. Oliver Realty, Inc., 363 Pa.Super. 534, 526 A.2d 1192 (1987). An agreement is sufficiently definite if it indicates that the parties intended to make a contract and if there is an appropriate basis upon which a court can fashion a remedy. Id. Moreover, when the language of a contract is clear and unequivocal, courts interpret its meaning by its content alone, within the four corners of the document. Id. (citing Mears, Inc. v. National Basic Sensors, 337 Pa.Super. 284, 289, 486 A.2d 1335, 1338 (1984)).

Traditional contract law distinguishes between bilateral and unilateral contracts. Bilateral contracts involve two promises and are created when one party promises to do or forbear from doing something in exchange for a promise from the other party to do or forbear from doing something else. Id. Unilateral contracts, in contrast, involve only one promise and are formed when one party makes a promise in exchange for the other party’s act or performance. Id. Significantly, a unilateral contract is not formed and is, thus, unenforceable until such time as the offeree completes performance. Id.

In the case at hand, we judge the exchange of letters in April of 1987, not to have created a binding bilateral contract, but to have been an offer by Bank to enter into a unilateral contract. Under this arrangement, Bank agreed to release the liens on Lots 6 and 7 in exchange for the Developer’s paydown of $75,000.00 under the Note.

Contrary to Developer’s assertion, we do not deem its construction of townhouses on Lots 6 and 7 to have been a return promise, indicating the formation of an enforceable bilateral contract. Our reading of the April 3 and April 14, 1987 letters does not support Developer’s contention that Bank’s promise to release the liens on Lots 6 and 7 in exchange for $75,000.00 induced Developer to effect construction on those lots. To the contrary, it appears that Developer’s townhouse construction on the lots in question necessitated its communication with Bank, in order for Developer to secure lien releases necessary for the unencumbered sale of the finished residences. Accordingly, we find that Bank’s letter of April 14, 1987 did not create a bilateral contract, but simply was an offer by Bank to enter into a unilateral contract, where acceptance could only be completed by Developer’s payment of $75,000.00.

Having characterized Bank’s letter as an offer to enter into a unilateral contract, we must now determine the effect of Bank’s acceptance of $37,500.00 in exchange for its release of the liens on Units “A” through “E.” It is horn-book law that an offer to enter into a unilateral contract lasts for a reasonable period of time unless the offeree’s power of acceptance is terminated. Vaskie v. West American Ins. Co., 383 Pa.Super. 76, 81, 556 A.2d 436, 438 (1989); Restatement (Second) of Contracts § 41 (1981). An offeree’s power to accept is so terminated by: (1) a counter-offer by the offeree; (2) a lapse of time; (3) a revocation by. the offeror; or (4) death or incapacity of either party. Restatement (Second) of Contracts § 36 (1981); see also Biggins v. Shore, 523 Pa. 148, 565 A.2d 737 (1989) (Papadakos, J., dissenting) (stating that death or incapacity of either party terminates an offer); Cohen v. Goldberg, 431 Pa. 192, 244 A.2d 763 (1968) (same); Janson v. Frost, 422 Pa.Super. 36, 618 A.2d 1003 (1993) (holding that the passage of a reasonable time terminates an offer); Ingrassia Const. Co., Inc. v. Walsh, 337 Pa.Super. 58, 486 A.2d 478 (1984) (holding that a counter-offer terminates the original offer).

A counter-offer is defined as “an offer made by an offeree to his offeror relating to the same matter as the original offer and proposing a substituted bargain differing from that proposed by the original offer.” Restatement (Second) of Contracts § 39 (1981). Furthermore, a reply to an offer which purports to accept it, but changes the conditions of the offer, is not an acceptance but is a counter-offer, having the effect of terminating the original offer. Accu-Weather, Inc. v. Thomas Broadcasting Co., 425 Pa.Super. 335, 339, 625 A.2d 75, 77 (1993); Hahnemann Med. College & Hosp. v. Hubbard, 267 Pa.Super. 436, 440, 406 A.2d 1120, 1122 (1979); Restatement (Second) of Contracts § 59 (1981).

In the ease at hand, it is readily apparent that Developer’s November, 1987 tender of two $7,500.00 payments to Bank in exchange for Bank’s release of the liens on Units “C” and “E” was not Developer’s acceptance of Bank’s April 14, 1987 offer, but, to the contrary, was Bank’s acceptance of Developer’s counter-offer. Bank’s original offer was to release the liens on all units on Lots 6 and 7 in exchange for a principal paydown of $75,000.00. Instead of accepting this offer through full payment, Developer proposed a new arrangement; that is, Developer offered Bank $7,500.00 per unit in exchange for Bank’s piecemeal release of two townhouses within Lot 6. As Developer’s offer related to the same subject matter as Bank’s in the Release Agreement, but proposed a different payment scheme, Developer proposed a counteroffer, terminating Bank’s original offer. Accu-Weather, su pra; Hubbard, supra. This is particularly evident, moreover, given the fact that, under this new unit-by-unit release arrangement, instead of costing Developer $75,000.00 to obtain a complete release for Lots 6 and 7, it would have cost Developer $105,000.00. Accordingly, as the Release Agreement was terminated by Developer’s counter-offer, Bank’s demand for the balance of the unpaid principal could not have rendered its promises under the Release Agreement illusory. Thus, Developer’s first argument is meritless.

Developer’s second argument is that Bank’s acceptance of the five $7,500.00 payments under the Release Agreement, equitably estopped Bank from refusing the $37,500.00 balance due under that agreement. We disagree.

In making this claim, Developer once again presupposes that the Release Agreement constituted a valid contract between the parties, as this argument is based upon the fact that Bank accepted five $7,500.00 “installments” under that agreement. As we have already determined that no valid, enforceable contract was created by the Release Agreement, Developer’s argument is without merit.

Notwithstanding the fact that Developer’s underlying assumptions are erroneous, were we to apply the tenets of equitable estoppel to the case at hand, Developer’s argument would still fail. As Developer correctly notes, “the doctrine of equitable estoppel protects the reasonable expectations of one who relies on another’s course of conduct; it prevents a party from taking a position that is inconsistent with a position previously taken which is disadvantageous to the other.” Doppler v. Doppler, 393 Pa.Super. 600, 608, 574 A.2d 1101, 1105 (1990). In order for the defense of equitable estoppel to apply, a party must adduce sufficient evidence which indicates that: 1) one party induced the other party to act; and 2) there was justifiable reliance as a result of the inducement. Chester Extended Care Center v. Commonwealth, 526 Pa. 350, 355, 586 A.2d 379, 382 (1990). Furthermore, an inducement sufficient to create an equitable estoppel “may consist of words or conduct which intentionally or negligently causes another to believe that a promise has been made or that a particular state of facts exists.” Havas v. Temple University of Com. Systems of Higher Educ., 357 Pa.Super. 353, 355, 516 A.2d 17, 19 (1986).

Applying this standard to the case at hand decries Developer’s argument. Bank’s course of conduct neither induced Developer to act, nor caused Developer to justifiably rely on that inducement. To the contrary, Bank merely agreed to a series of five offers made by Developer to release the liens on individual units in exchange for a paydown of $7,500.00 per unit. Moreover, if any party was induced and had cause to justifiably rely on the inducement, it was Bank and not Developer. Bank, after all, made an accommodation to Developer in releasing the liens from any of the units in question and had no way of presupposing that such actions would result in a dispute over the unpaid principal in the Note. Accordingly, Developer’s equitable estoppel argument is also without merit.

Judgment affirmed.

      . A demand note is a "note which expressly states that it is payable on demand, on presentation or at sight; a note in which no time for payment is expressed.” Black’s Law Dictionary 387 (5th ed. 1979). Here, the Note expressly states that it is payable on demand. See R.R. at 149a.

      . Bank was not granted a mortgage on Lots 1 through 5 of Baldwin Village, which were, as of December 22, 1986, either already built or in the process of being built.

      . Buildings 6 and 7 were to be constructed on Lots 6 and 7, respectively.

      . There appears to be a discrepancy in the stipulated facts regarding the number of townhouses to be constructed on Lots 6 and 7. In its April 6, 1987 letter, Developer indicated that 13 units were to be constructed, whereas in Paragraph 10 of the stipulated facts the parties stated that 14 units were to be constructed. See R.R. at 134a-135a. By June of 1989, however, Developer had constructed 14 townhouses on Lots 6 and 7.

      . This sum reflects the difference between $75,000.00, the principal paydown figure from the Release Agreement, and the three $7,500.00 payments paid to Bank to release its liens on Units A, C, and E.

      . The $300,000.00 figure is reached by subtracting from the principal of $375,000.00, the $37,500.00 paid for release of the liens on Units A-E and the $37,500.00 paid under the "Interim Agreement.”

      . Specifically, in November, 1987, Bank accepted a principal paydown of $15,000.00 and released its liens on Units "C” and "E.” In May, 1988, Bank accepted another paydown of $7,500.00 and released its lien on Unit "A.” On November 16, 1988, Bank accepted a paydown of $15,000.00 and released its lien on Units "B” and "D.”

      . This $105,000.00 figure is reached by computing the sum of 14 individual $7,500.00 payments by Developer to Bank or one payment for each unit on Lots 6 and 7.