author: BECK, Judge: WIEAND, Judge,

text:
    519 A.2d 1012
    Helen K. DIAMOND v. Spero G. DIAMOND and S.G. Diamond, Inc., Appellants.
    Superior Court of Pennsylvania.
    Argued June 24, 1986.
    Filed Jan. 9, 1987.

      Howard B. Krug, Harrisburg, for appellants.
    Delano M. Lantz, Harrisburg, for appellee.
    Before WIEAND, BECK and WATKINS, JJ.
   BECK, Judge:

This appeal raises certain basic questions which must be addressed in formulating a plan of equitable distribution. The first question is what property is included in the marital estate; what is the value of each asset in the marital estate. Subsumed under this question is the date on which each marital asset will be valued. The second question relates to the division of the marital estate between the husband and wife. And the third question relates to alimony, costs, and attorneys’ fees. The appellant is husband Spero G. Diamond and appellee/cross-appellant is wife Helen K. Diamond. They both appeal the court’s denial of their exceptions to the plan for equitable distribution of marital property. We affirm.

The parties married in September 1958, and separated in January 1975. Prior to the marriage husband was a partner in a family real estate development and construction firm. In September 1957, the business was incorporated in its present form, S.G. Diamond, Inc., and husband was issued one hundred percent of the stock. Throughout the marriage and the period of the parties’ separation, husband was the sole owner of the company.

Before the parties’ separation in 1975, the corporation acquired substantial real estate assets, all in the name of the corporate entity. Prior to separation both parties had contributed equally to the business. Husband owned and operated the company, while wife in addition to maintaining the marital home and being the primary caretaker of the children, was actively involved in the business which was located in the marital home. After separation husband continued to conduct the business, improve properties purchased prior to the parties’ separation and acquire new ones.

Wife filed a complaint in divorce and requested equitable distribution of the parties’ marital property, alimony, alimony pendente lite, counsel fees, costs and expenses. Hearings were held before the master almost nine years after the date of separation. The trial court adopted the master’s recommendations, and in its amended decree of divorce, it directed the equitable distribution of the parties’ marital property as follows: husband was ordered to transfer one-half of the outstanding shares of the stock of S.G. Diamond, Inc. to wife, with the provision that the corporation would redeem the stock from wife in exchange for title to the marital home and a corporate note in the amount of $225,000. The principal on the note was to be paid within five years with interest payable at ten percent (10%) per annum. The trial court also endorsed the master’s report in denying wife’s claims for alimony, counsel fees, costs and expenses.

Before addressing the parties’ numerous contentions, we note that an appellate court may reverse an order determining equitable distribution of marital property only for an abuse of discretion by the trial court. Winters v. Winters, 355 Pa.Super. 64, 512 A.2d 1211 (1986); Sergi v. Sergi, 351 Pa.Super. 588, 506 A.2d 928 (1986); LaBuda v. LaBuda, 349 Pa.Super. 524, 503 A.2d 971 (1986); Baraff v. Baraff, 338 Pa.Super. 203, 487 A.2d 925 (1985). Under this standard, we do not usurp the hearing court’s duty as fact finder. Rather, we apply the legislative guidelines of the Code, to the record to determine whether or not the hearing court has abused its discretion. Sergi, 351 Pa.Super. at 591, 506 A.2d at 930; Barnhart v. Barnhart, 343 Pa.Super. 234, 494 A.2d 443 (1985).

This court has recently stated that “[a]n abuse of discretion is not found lightly, but only upon a showing of clear and convincing evidence____ However, an abuse of discretion will be found by this court if the trial court failed to follow proper legal procedure or misapplied the law.” Braderman v. Braderman, 339 Pa.Super. 185, 190, 488 A.2d 613, 615 (1985); see also Sergi, 351 Pa.Super. at 591, 506 A.2d at 930. With this standard of review in mind we turn to the claims raised by the parties.

I.

The first series of issues centers on what is marital property, what is the value of each asset in the marital estate and the date on which each marital asset will be valued.

Section 401(e) of the Code defines marital property as:

(e) ... all property acquired by either party during the marriage except:
(4) Property acquired after separation until the date of divorce____

Pa.Stat.Ann. tit. 23, § 401(e)(4) (Purdon, Supp.1986) (emphasis added).

A

We will begin by examining three assets which were acquired after the parties separated: husband’s residence on Butler Street; a sales agreement for Beaufort Ridge; and equity in property at Mercy Crest.

Wife argues that the Butler, Beaufort and Mercy Crest properties should be considered marital property and directs our attention to Section 401(f) of the Code:

All property, whether real or personal, acquired by either party during the marriage is presumed to be marital property regardless of whether property is held individually or by the parties in some form of co-ownership____ The presumption of marital property is overcome by a showing that the property was acquired by a method listed in subsection (e).

Pa.Stat.Ann. tit. 23, § 401(f) (Purdon, Supp.1986) (emphasis added).

Wife argues that Section 401(f) mandates a broad, comprehensive definition of marital property. Consequently, she maintains that in order to meet the requirements of Section 401(e)(4) and thereby rebut the Code’s presumption of marital property, the husband must show not only that the three properties at issue were acquired after the parties separated, but also that the husband did not use marital assets to obtain them. We cannot accept wife’s reading of the statute.

We are aware that in enacting the Divorce Code the Legislature’s expressed purpose was to “effectuate economic justice between parties who are divorced,” and that we must consider this legislative intent in construing the provisions of the act. Pa.Stat.Ann. tit. 23, §§ 102(a)(6), (b) (Purdon, Supp.1986). Nonetheless, we must also adhere to established principles of statutory construction which dictate that “[w]hen the words of a statute are clear and free from all ambiguity, the letter of it is not to be disregarded under the pretext of pursuing its spirit.” The Statutory Construction Act of 1972, 1 Pa.Con.Stat.Ann. § 1921(b) (Purdon, Supp.1986); construed in Zimmerman v. O’Bannon, 497 Pa. 551, 442 A.2d 674 (1982). Moreover, a court cannot insert words into a statutory provision where the Legislature has failed to supply them. See Worley v. Augustine, 310 Pa.Super. 178, 456 A.2d 558 (1983); Peabody v. Tucker, 4 Pa.Commw. 609, aff'd, 447 Pa. 398, 289 A.2d 438 (1972); see also Patton v. Republic Steel Corp., 342 Pa.Super. 101, 492 A.2d 411 (1985).

Section 401(e)(4) of the Code explicitly provides that a showing that “property [has been] acquired after separation” is sufficient to counter the presumption of marital property contained in Section 401(f). This court has recently articulated the principle that “[t]ime of acquisition is the factor that the Legislature mandates the courts’ use in determining whether property is a marital asset.” Anthony v. Anthony, 355 Pa.Super. 589, 594, 514 A.2d 91, 93 (1986). Indeed, the date of separation has repeatedly been identified as the pivotal event, the end point of the period in which marital assets may be acquired. Sergi, 351 Pa.Super. at 591, 506 A.2d at 930; LaBuda, 349 Pa.Super. at 532, 503 A.2d at 976; Hurley v. Hurley, 342 Pa.Super. 156, 492 A.2d 439 (1985); Braderman, 339 Pa.Super. at 196, 488 A.2d at 618; King v. King, 332 Pa.Super. 526, 481 A.2d 913 (1984).

Contrary to the wife’s assertion, Section 401(e)(4) does not place an additional burden on a party attempting to rebut the Code’s presumption of marital property, i.e. it is not necessary to present rebuttal proof that no marital assets were used to obtain post-separation assets. We also decline to insert such a requirement into the unambiguous wording of the statute. This court may not under the guise of construction intrude upon the exclusive province of the Legislature. See Peabody, 447 Pa. at 404, 289 A.2d at 441.

We are not concerned that assets in the marital estate used for post-separation acquisitions will not be calculated as marital property. It is clear that assets in or to which the marital estate is entitled at the time of separation are includable as marital property. It is, therefore, irrelevant in determining the marital estate that those assets are later used in post-separation acquisitions. Anthony, 355 Pa. Super. 589, 514 A.2d 91.

Nonetheless, we must add to our discussion the established principle that the time a spouse actually receives an asset is not controlling as to whether the asset is marital property. The crucial time is when the right to receive the asset actually accrues. As this court has stated:

[I]t matters not when a spouse receives property, but whether the right to receive such property accrues during the marriage. To the extent that a property right “accrues” or “arises” during the marriage, then the spouses expect they will enjoy the property when they receive it.

LaBuda, 349 Pa.Super. at 533, 503 A.2d at 976 (emphasis added) (lump-sum retirement payment accrued prior to separation but received after separation properly included as a marital asset); cf. Hurley, 342 Pa.Super. at 161, 492 A.2d at 442 (personal injury damages not marital property where claim arising during marriage was unliquidated until after separation).

The record in this case supports the trial court’s decision to exclude the Butler, Beaufort and Mercy Crest properties from the marital estate. Wife merely asserts that husband failed to show that the assets were not acquired by using marital funds. We therefore conclude that the trial court acted properly in identifying these three properties as the husband’s separate property.

B

Also in dispute is post-separation property located in Ventnor, New Jersey that the husband obtained by inheritance. Husband argues that he inherited the Ventnor property from his mother after separation and this it is not marital property. We agree and point out that the court classified the Ventnor property as a separate property. Pa.Stat.Ann. tit. 23, § 401(e)(4) (Purdon, Supp.1986). The court included the property in the husband’s separate estate. Because the Ventnor property increased the value of the husband’s separate estate, the court awarded wife a greater share of the marital estate.

We find the wife’s contention that she is entitled to share in the property meritless. Wife maintains that prior to separation husband’s mother had orally agreed to sell the property to the parties, but that the mother later devised it to her son. Wife claims that she had acquired an interest in the asset by expending substantial time and effort to improve it in reliance upon the agreement. The wife’s theory of ownership is unsupported in the record and in law. We, therefore, find correct the court’s disposition of the Ventnor property.

C

During marriage the parties acquired a property known as East Elmwood on which the husband constructed an apartment building after the parties separated. The court valued this property at $12,000, as of the date of separation. At that time the property was unimproved land. Wife contends that the court erred in depriving the marital estate of the increase in value due to the post-separation construction of the apartment building. The wife’s expert testified that the apartment building increased the value of the property to $160,000.

We conclude that the construction of the apartment building is such a substantial change that it must be considered a new asset acquired after separation. The mere fact that the building is located on land which is marital property, does not convert the building itself into a marital asset.

We cannot establish a hard and fast rule that will provide clear standards as to the nature and degree of change necessary for property to be considered a separate post-separation acquisition. The trial courts will have to make this determination on a case-by-case basis. It is clear, however, that an unimproved lot is different from and separable from a lot with an apartment house. By analogy, a sculptor’s clay may be a marital asset, but the statue the sculptor crafted from the clay may not be a marital asset if her artistic work was done after separation. Accordingly, we find that the trial court was correct in excluding the apartment building from marital property.

D

The second marital property on which husband made post-separation improvements is the Sherwood Forest land. Prior to separation, this property consisted of six acres of unimproved land. After separation husband subdivided the land and built roads; he also constructed houses on three lots.

The court correctly concluded that like the East Elmwood apartment building, the three homes are such a substantial improvement of the property that they constitute the acquisition of post-separation assets. Therefore, Section 401(e)(4) mandates that the homes be defined as separate property; and not valued in the marital estate.

The improvements to the remaining Sherwood Forest land were not extensive. The increase in value due to subdivision of the acreage and building roads does not amount to the acquisition of a new, distinct asset which must be defined as separate property. Therefore, the court properly characterized the remaining land as marital property. The court valued the remaining Sherwood Forest land as of the time of separation.

At issue is whether the court abused its discretion in valuing the remaining Sherwood Forest land on which no major improvements were made as of the date of separation. Although the Divorce Code establishes the date of separation as the demarcation point to identify marital property, it does not specify the time at which the marital assets must be valued. The choice of a date of valuation is therefore left to the sound discretion of the trial court. As this court has stated:

[W]e do not attempt ... to establish a valuation to be used in every situation. To recognize a specific valuation date as a matter of law would deprive the trial court of the necessary discretion required to effectuate economic justice.

Sergi, 351 Pa.Super. at 594, 506 A.2d at 932, Winters, 355 Pa.Super. at 69-70, 512 A.2d at 1214.

The record supports the court’s conclusion that the increase in value was attributable, inter alia, to the husband’s post-separation efforts. We, therefore, conclude that the court did not abuse its discretion in establishing the valuation date as the date of separation.

II.

The next set of issues husband raises relates to the trial court’s almost equal division of the marital property and the weight accorded to various factors in the distribution allocation. Husband maintains the trial court abused its discretion. We find meritless husband’s arguments that: the court incorrectly valued properties other than those discussed supra at the date of hearing; the court failed to take into account the tax consequences to husband of the distribution; the court improperly weighed the witnesses’ testimony; the court neglected to consider husband’s available income; and the court made inconsistent and unsupported findings of fact regarding husband’s ability to acquire capital assets and income and made unsupported findings regarding the pre-marital value of the corporation.

A

We find the court did not err in valuing certain property as of the date of hearing. The husband argues that because his efforts resulted in the increase in value, the separation date was the proper date for valuation.

We have examined the record and conclude that the court considered husband’s post-separation efforts in its distribution of the marital property. Thus, the court properly considered:

(7) The contribution or dissipation of each party in the acquisition, preservation, depreciation or appreciation of the marital property, including the contribution of a party as a homemaker.

Pa.Stat.Ann. tit. 23, § 401(d)(7) (Purdon, Supp.1986) (emphasis added).

Although the husband’s contribution weighs in favor of establishing valuation at separation date, that one factor alone does not determine the proper date. The court also gave weight to the fact that husband would have the “opportunity for future acquisition of capital assets in light of his business expertise.” (Record at 7a). Thus, the court properly considered another important factor:

(5) The opportunity of each party for future acquisitions of capital assets and income.

Pa.Stat.Ann. tit. 23, § 401(d)(5) (Purdon, Supp.1986). While husband may disagree with the relative weight the court chose to accord to the husband’s contribution and the future financial prospects of the parties, the court did not abuse its discretion. It properly considered the factors provided in section 401(d) of the Code. As this court has previously noted:

[T]here is no simple formula by which to divide marital property. The method of distribution derives from the facts of the individual case. The list of factors of 401(d) serves as a guideline for consideration, although the list is neither exhaustive nor specific as to the weight to be given the various factors. Thus, the court has flexibility of method and concomitantly assumes responsibility in rendering its decisions.

Semasek v. Semasek, 331 Pa.Super. 1, 11, 479 A.2d 1047, 1052 (1984); rev’d, on other grounds, 509 Pa. 282, 502 A.2d 109 (1985).

The master correctly valued each asset separately and properly considered the 401(d) factors in making distribution. In equitably distributing a complex marital estate, the master must be permitted flexibility in order to do economic justice.

B

We are also not persuaded by husband’s argument that the trial court failed to consider the tax consequences of the award. Although Section 401(d) of the Code does not specifically identify tax consequences as a factor in equitable distribution; see Pa.Stat.Ann. tit. 23, § 401(d) (Purdon, Supp.1986), it is necessary in distributing assets of a marriage to take into account the impact of the tax laws. The husband correctly asserts that potential tax burdens should be considered in order to “[m]ake the law for legal dissolution of marriage effective for dealing with the realities of matrimonial experience.” Pa.Stat.Ann. tit. 23, § 102(a)(1) (Purdon, Supp.1986). The record reveals the master considered possible tax implications of his award (Record at 25a). We see no error in the trial court’s adoption of the master’s recommendation and its treatment of the tax issue.

Husband also claims that the master erred in ignoring the testimony of a loan officer and in accepting wife’s expert’s valuation of a number of the marital assets. As we have previously stated, the factfinder is free to accept or reject the testimony of a witness, Baraff, 338 Pa.Super. at 210, 487 A.2d at 929. There is no indication in the record that the trial court abused its discretion by adopting the valuations and facts as found by the master.

Similarly, we find meritless husband’s assertion that the equitable distribution award was inequitable because his income would not permit him to meet his expenses and, at the same time, pay his wife $22,500 per year to repurchase her stock in the corporation. Husband claims that although he has numerous real estate assets, his income is limited. We agree with the trial court’s analysis of this claim:

Mr. Diamond claims that he has available income of $27,907 a year, and expenses of about $6,490. The addition of $22,500 in interest costs thus will produce negative expendable income for him, he asserts. We are not persuaded by these figures for they ignore the undistinguishable dual identity of Mr. Diamond as himself and as S.G. Diamond, Inc.

106 Dauph. County 200, 210 (1985).

Husband also contends that the findings regarding his ability to acquire assets in the future and the pre-marital value of the corporation are unsupported by the evidence. We disagree. We find the trial court did not abuse its discretion in not accepting husband’s assertion of his “unspectacular past business record”. The trial court based its conclusion on testimony relating to the variety and value of the real estate holdings he accumulated to date.

In addition, we find no abuse of discretion in the trial court’s assessment of the pre-marital value of husband’s corporation. Husband claims the company was worth $60,-675 at the time of the marriage, while the trial court set the value at $10,000. The record reveals conflicting evidence regarding the amount in the corporate checking account, husband’s contribution to the initial capitalization of the business and the value of the corporate real estate holdings at the time of marriage. Clearly the trial court acted within its discretion.

III.

Finally, we address wife's claims that the trial court erred in denying her requests for costs, expenses and attorney’s fees and alimony. Wife asserts that husband should be held responsible for at least half of her attorney’s fees.

In support of this contention, wife argues that her high legal costs are due in part to dilatory and obdurate conduct of husband’s counsel. Although she attributes high legal fees to husband’s discovery delays, the court properly attributed the legal fees to the complex nature of the case.

The wife also argues that under the equitable distribution award, husband retains substantial separate property. However, counsel fees are not “to be awarded to either spouse automatically____ Actual need must be shown in order to justify an award ... so that both parties are placed ‘on a par’ in defending their rights.” Dech, 342 Pa.Super. at 23, 492 A.2d at 44; citing Hoover v. Hoover, 288 Pa.Super. 159, 161-62, 431 A.2d 337, 338 (1981). The trial court properly concluded that wife had not established actual need for payment of her counsel fees. We find no abuse of discretion in the trial court’s denial of counsel fees. See Ganong v. Ganong, 355 Pa.Super. 483, 492, 513 A.2d 1024, 1029 (1986). Vajda v. Vajda, 337 Pa.Super. 573, 487 A.2d 409 (1985).

Nor do we believe that the trial court abused its discretion in denying alimony. Manbeck v. Manbeck, 339 Pa.Super. 493, 489 A.2d 748 (1985). At the time of hearings before the master, wife was fifty and husband was sixty-four. The trial court found both parties capable of continuing employment. Also as a result of the equitable distribution award, the court found wife would receive in excess of $30,000 annual income. See Pa.Stat.Ann. tit. 23, § 501(b) (Purdon, Supp.1986).

We agree with the trial court that the wife can provide for her current needs. The trial court divided the marital property in such a way as to enable the parties to maintain the standard of living they had enjoyed during the marriage.

Accordingly, we affirm.

WIEAND, J., files concurring opinion.

WIEAND, Judge,

concurring:

Helen and Spero Diamond were married in September, 1958. They separated in January, 1975. An action in divorce was filed on June 23, 1981. Hearings were held on various dates between September 27, 1983 and March 2, 1984. The Master filed his report on April 17, 1985. The trial court dismissed exceptions filed to the report and recommendations of the Master and entered a final decree on September 4, 1985. A review of the record reveals that the task of untangling the parties’ complicated financial affairs was made even more difficult because of the time intervening between separation and final decree. I agree with the majority that the record discloses no abuse of discretion and that the decree of the learned trial judge must be affirmed.

The majority has ably reviewed the various holdings of the trial court, and I do not intend to review again each individual issue which has been raised by appellant. Because my interpretation of Section 401(e)(4) of the Divorce Code, 23 P.S. § 401(e)(4), varies slightly from that of the majority, however, I would offer the following comments.

Section 401(e)(4) expresses the intent of the legislature that “marital property” available for distribution between the spouses does not include “[pjroperty acquired after separation until the date of divorce.” The language of the statute is clear and straightforward. Property acquired by either spouse after separation is not marital property and is not available for distribution between the spouses.

In the instant case, the trial court was called upon to apply this statutory language to improvements made to real estate by virtue of the expenditure of time, labor and capital by one of the parties after separation. With respect to such improvements, I would hold that they are not “marital property.” I would do so regardless of the nature and degree of change effected by the improvement and regardless of the cost of the improvement. Thus, I agree with the majority that a building erected on a tract of land which was unimproved at the time of separation is clearly not marital property. However, I would apply the same rule without equivocation to improvements made to subdivide a previously undeveloped tract. I would hold that the enhanced value of a previously undivided tract of real estate brought about by engineered plot plans and the installation of streets, curbs, and utility lines, is not marital property if the improvements were made by a spouse after separation. Therefore, I am unable to agree with the majority’s suggestion, at page 111, that “[t]he increase in value due to subdivision of the acreage and building roads does not amount to the acquisition of a new, distinct asset which must be defined as separate property.” In my judgment, the improvements brought about by the subdivision of the Sherwood Forest land after separation were not marital property.

The trial judge determined that the value of the Sherwood Forest tract should, in any event, be determined as of the date of separation, and the majority, interestingly enough, affirms. The majority affirms, however, on the grounds that the trial judge did not abuse his discretion by selecting that date for evaluating the same. See: Sergi v. Sergi, 351 Pa.Super. 588, 506 A.2d 928 (1986). I would affirm because, in my judgment, the improvements made by subdividing the tract after separation were not marital property. To the extent that the majority suggests otherwise, I respectfully disagree.

As a general rule, any appreciation in the value of marital property which is brought about by the efforts of one of the spouses after separation is not marital property, and it should not be distributed as such. Such a rule will “have the advantage of allowing the parties to get on with their separate lives as quickly as possible without being required to calculate the effect of each expenditure of time or capital upon a later decree of distribution.” Sergi v. Sergi, supra, 351 Pa.Superior Ct. at 601, 506 A.2d at 935 (Concurring Opinion by Wieand, J.).

If the application of such a rule should, in an unusual case, cause inequity, the inequity can be corrected by the manner in which the court distributes assets which do constitute marital property. This, too, the legislature made provision for. Thus, in Section 401(d) of the Divorce Code, the legislature provided that in making distribution of marital property, a court shall consider, inter alia, the following: “(10) [t]he economic circumstances of each party at the time the division of property is to become effective.” This power is sufficiently broad to lodge in trial judges the flexibility which will enable them to do economic justice between parties whose marriage is being terminated after a long separation.

      . There are actually two appellants involved in this appeal: the individual Spero G. Diamond and the corporation S.G. Diamond, Inc. For the purposes of this appeal they are essentially one entity. Although dealings in the marital property were under the umbrella of the corporation, it is clear that the assets were marital assets. As the lower court observed, husband and the corporation were as inseparable as Ahab and the white whale at the conclusion of Moby Dick.

      . This appeal is governed by the Divorce Code (“Code”), Act of April 2, 1980, P.L. 63, Pa.Stat.Ann. tit. 23, §§ 101-801 (Purdon, Supp.1986).

      . The master valued the marital estate at $556,629 and recommended that it be divided equally between the parties.

      . The Master referred to this property as “Tract 2” which included the lots that are the subject of wife’s claim: Nos. 45-48, 61, 73, 51, 53 and 88. (Record at 12a, 30a).

      . Husband claims that lots 50, 53 and 88 in Sherwood Forest were incorrectly characterized as marital property, and that the entire value of these lots should have been excluded from equitable distribution under Section 401(e)(5) because they were sold prior to the commencement of the divorce action in 1981. He failed however to raise this issue in his exceptions to the Master’s Report, and as a result it is waived. Dech v. Dech, 342 Pa.Super. 17, 24 n. 10, 492 A.2d 41, 44 n. 10 (1985); Rosen v. Rosen, 328 Pa.Super. 93, 476 A.2d 470 (1984).

      . Husband contends that corporation liabilities incurred post-separation are joint liabilities reducing the value of marital property subject to equitable distribution. He maintains that the increase since separation in a blanket mortgage and the corporation’s accounts payable relate to marital properties. The record, however, demonstrates that the increase in these liabilities resulted from post-separation acquisitions and improvements already discussed which the trial court deemed to be non-marital assets. (Record at 525a, 420-425a, 503-504a, 442a, 468a, 505a-507a). Because these were post-separation liabilities, they were correctly excluded them from the value of the marital estate. Cf. Duff v. Duff, 510 Pa. 251, 253, 507 A.2d 371, 373 (1986) (joint tax liability imposed after separation but arising prior to separation should be charged against marital estate).

      . 23 P.S. § 401(d).


source: Caselaw Access Project

author: HOFFMAN, Judge: ROWLEY, Judge

license: Public Domain

text:
    519 A.2d 1021
    Perry ECKSEL v. ORLEANS CONSTRUCTION COMPANY and Thomas Vesey t/a Thomas Construction Company, Appellants.
    Superior Court of Pennsylvania.
    Argued Jan. 13, 1986.
    Filed Jan. 13, 1987.

      Andrew D. Bershad, Philadelphia, for appellants.
    Jeffrey M. Chebot, Philadelphia, for appellee.
    Before ROWLEY, KELLY and HOFFMAN, JJ.
   HOFFMAN, Judge:

This is an appeal from the order and judgment entered in favor of appellee and against appellants in the amount of $52,100.00. Appellants contend that the trial court erred in (1) sua sponte ordering a new trial on the issue of damages, (2) failing to find that appellee had released appellants from liability, (3) concluding that appellants had breached implied warranties, (4) permitting appellee to amend his complaint after completion of the trial, (5) causing delays which prejudiced appellant, (6) failing to consider appellee’s duty to mitigate damages, (7) rejecting appellants’ evidence as to the market value and costs of repair of the house, (8) awarding an excessive amount of damages. We disagree and, accordingly, affirm the lower court’s order and judgment.

Appellee filed this action in assumpsit in 1972, alleging that appellants had defectively constructed his house. In 1970, appellee entered into an agreement of sale in which he agreed to buy an as yet unconstructed house from appellants, Orleans Construction Company and Thomas Vesey, its builders and vendors, for $41,000.00. Prior to settlement, appellee discovered water in the basement of the home and was assured by appellants that they would correct the problem. See Trial Court Opinion, June 11, 1984 at 1. Despite this assurance, the basement continued to flood and water collected in the house’s lawn and driveway. See Lower Court Opinion, March 14, 1986 at 2. Appellants told appellee that regarding the property might cure the problem and, in accordance with that diagnosis, dumped two piles of dirt on appellee’s lawn. However, the regrading was never performed and appellee had to have the piles of dirt removed. Id. On April 7, 1983, the parties entered into an agreement that appellants would complete an agreed-upon list of repairs to the house, including repair of the basement, and, in return, appellee would relinquish his legal claims against appellants. Appellants failed to complete all of the repairs, and those that they did complete were not performed in a reasonably workmanlike manner. Id. at 3.

Trial was held on June 8, 1983. The lower court, sitting without a jury, held that appellants were liable to appellee for the defects that created the wet basement problem. Id. at 8. The court also found, however, that it did not have sufficient information to determine damages pursuant to the formula then recently announced in Gadbois v. Leb-Co. Builders, Inc., 312 Pa.Superior Ct. 144, 458 A.2d 555 (1983) and sua sponte ordered a new trial limited to the issue of damages. Id. at 11-12. Appellants filed timely post-trial motions, but the lower court did not rule on those motions until the new trial was completed. That trial occurred on May 1, 1984. In an opinion dated June 11, 1984, the trial court entered judgment in favor of appellees and against appellants in the amount of $52,100.00. Appellants timely filed further post-verdict motions. On April 23, 1985, the lower court denied all of appellants’ post-verdict motions, and this appeal followed.

Appellants first contend that the trial court abused its discretion in sua sponte ordering a new trial limited to the issue of damages. Appellants argue that as the court specifically found that appellee had not offered sufficient evidence to determine damages, judgment should have been entered against appellee. We disagree.

The granting of a new trial is within the sound discretion of the trial court, and a decision to do so will not be reversed on appeal absent a showing that the trial court committed an error of law or palpably abused its discretion. See Burrell v. Philadelphia Electric Co., 438 Pa. 286, 289, 265 A.2d 516, 517 (1970); George I. Reitz & Sons, Inc. v. Donise Enterprise, Inc., 319 Pa.Superior Ct. 76, 81, 465 A.2d 1060, 1063 (1983). A trial court may, in its discretion, order a separate trial on a separate issue in a cause of action in furtherance of convenience or to avoid prejudice. See Pa.R.Civ.P. 213(b). See also Schaefer v. American States Insurance Co., 272 Pa.Superior Ct. 67, 71, 414 A.2d 672, 673 (1979). Additionally, a trial court may grant a new trial on the issue of damages alone where the issue of liability has been fairly determined and the issue of damages is readily separable. See Stokan v. Turnbull, 480 Pa. 71, 75, 389 A.2d 90, 93 (1978); Reid v. Oxendine, 275 Pa.Superior Ct. 548, 556, 419 A.2d 36, 40 (1980).

Here, in order to “avoid speculation” the lower court ordered a new trial on damages after it had found against appellants on the issue of liability. See Lower Court Opinion, supra at 5. Contrary to appellants' assertion that the lower court found that appellee had failed to prove damages, the court instead found that neither party had supplied enough information to determine damages pursuant to the then recently announced formula in Gadbois v. Leb-Co. Builders, Inc., supra. See Lower Court Opinion, supra at 11. We believe that the lower court properly followed the procedure authorized under Pa.R.Civ.P. 213(b) and the above-mentioned case law concerning new trials limited to damages. We therefore find that the lower court did not commit an error of law or palpably abuse its discretion in this regard. See Burrell v. Philadelphia Electric Co., supra.

Appellants next contend that the lower court erred in finding that appellee had not released appellants from liability. Specifically, appellants argue that appellee signed two separate agreements that released them from liability arising out of any alleged defects in the construction of the house. The first agreement was allegedly contained in the agreement of sale, signed by appellee on November 19, 1970. The second agreement was allegedly entered into by appellee in April, 1973, subsequent to the filing of this suit and amounted to a settlement of the suit contingent upon the performance of certain enumerated repairs by appellants. Appellants contend that the lower court erred in disregarding these release agreements and finding against appellants on the issue of liability. We will address each of these alleged releases separately.

Because of the special knowledge of the builder-vendor in a home construction situation, language purportedly creating an express restriction or exclusion of an implied warranty must be strictly construed against the builder-vendor. See Tyus v. Resta, 328 Pa.Superior Ct. 11, 19, 476 A.2d 427, 432 (1984) (citations omitted). Additionally, due to the important consumer interests protected by an implied warranty, any attempt to disclaim such a warranty must be clear and unambiguous. Id. The language must also be specific and particular to the legal rights the buyer is waiving and their relation to their effect on specifically designated potential latent defects. Id. Evidence that the parties actually negotiated the release will tend to indicate that the purchaser made a knowing waiver of his or her rights. Id.

The release language in the agreement of sale reads: After settlement is made and/or key is accepted and/or entry into possession of any part of the premises is made, Buyer agrees that no further claims or demands of any kind will be made upon Seller or Seller’s principals, and Seller and Seller’s principals shall not be liable for any and all injuries, loss, or damage to Buyer or any other person, or to premises, resulting from any cause whatsoever, including but not [limited] to the exclusion of other causes not specifically recited herein, negligence and latent or undiscovered defects, and Buyer hereby releases and discharges Seller and Seller’s principals from all liability for such injury, loss or damage.

See Agreement of Sale, November 11, 1970. The language in this release is broad and all-encompassing. It does not refer with specificity to what rights appellee was waiving or how they applied to particular latent defects. Additionally, there is no evidence that the release was negotiated by the parties. In fact, the release is found eleven paragraphs into what appears to be a boilerplate Agreement of Sale. We will not allow appellants to escape liability by relying on language of this nature.

The second alleged release relied upon by appellants refers to a settlement agreement entered into by the parties in April of 1973. As the lower court correctly noted, appellants failed to fulfill the agreement and correct the defects in the house. See Lower Court Opinion, supra at 6. Therefore, as appellants did not perform their part of the agreement, appellee’s promise to release them from liability is not enforceable.

Appellants next contend that the lower court erred in finding that they had breached the implied warranty of habitability. Specifically, appellants make three arguments in this regard. First, they argue that the lower court was precluded from finding there was a breach of implied warranty because appellee based his claim on breach of contract. We disagree.

The implied warranty of habitability is a warranty based in a contract for the sale of a home. See Tyus v. Resta, supra 328 Pa.Super. at 19, 476 A.2d at 431. This implied warranty was first recognized in Pennsylvania in Elderkin v. Gaster, 447 Pa. 118, 288 A.2d 771 (1972). In Elderkin the Pennsylvania Supreme Court recognized that as warranties were rarely given in home construction contracts, and there was a wide disparity in knowledge between the buyer and the seller, a theory of implied warranties was necessary to safeguard the reasonable expectations of the buyer. The Court reasoned:

[O]ne who purchases a development home ... justifiably relies upon the skill of the developer that the house will be a suitable living unit ... [T]he builder-vendor impliedly warrants that the home he has built and is selling is constructed in a reasonably workmanlike manner and that it is fit for the purposes intended — habitation.

Id., 447 Pa. at 128-129, 288 A.2d at 776. Warranties of habitability and reasonable workmanship are not created by representations of the builder-vendor but rather are implied in law and as such exist independent of any representations of a builder-vendor. See Tyus v. Resta, supra 328 Pa.Super. at 19, 476 A.2d at 433. Appellants first contend that the court could not find that they had breached the implied warranties because appellee did not specifically argue such a breach. We disagree. Appellee argued breach of contract. Since the implied warranties are inherent in the contract, and appellee argued all of the facts necessary to find that they were indeed breached, his failure to couch his argument in the exact terms of implied warranties did not preclude the lower court from ruling upon that theory. Decisions as to the application of the law are within the domain of the trial court. See General Electric Credit Corp. v. Aetna Casualty & Surety Co., 437 Pa. 463, 479-80, 263 A.2d 448, 457 (1970).

Appellants next argue that the concept of implied warranties was not recognized under Pennsylvania law when the agreement of sale was entered into, and that it should not have been retroactively applied here. We disagree.

Appellate decisions are to be applied retroactively unless the court specifically states that a decision is to be applied prospectively only. See Commonwealth v. Cabeza, 503 Pa. 228, 233, 469 A.2d 146, 148 (1983). The Elderkin decision did not create the warranties of habitability and reasonable workmanship. Rather, it acknowledged their existence. See Tyus v. Resta, supra 328 Pa.Super. at 18, 476 A.2d at 431. Elderkin itself applied implied warranties to a 1963 agreement of sale. See Elderkin v. Gaster, supra 447 Pa. at 118, 288 A.2d at 771. Clearly, the lower court acted correctly in applying the implied warranties to this agreement of sale.

Appellants next argue that the lower court erred in finding that a leaky basement breached the warranty of habitability. We disagree. As the Lower Court noted:

A house is a shelter. The whole purpose of building shelter is to protect individuals and their property from the elements — wind, water, fire, earth, etc. A basement is part of the overall pursuit of this protection. The plaintiff proved that the basement cannot be used even for storage. A continually wet basement indicated the owner of the resident [sic] may not rely on a part of that residence to protect individuals from at least one of the elements — water. The purpose of building a house is undone by the defendants’ improper construction created [sic] a premises unfit for human dwelling.

Lower Court Opinion, supra at 7. Additionally, there is precedent to uphold such a finding. In Tyus v. Resta, supra this Court upheld a lower court finding that a leaky crawlspace breached the warranty of habitability. We will not overturn the lower court’s determination that the leaky basement in this case breached both the implied warranties of habitability and reasonable workmanship.

Appellants next contend that the trial court erred in permitting appellee to amend his complaint after the completion of the trial. We disagree.

A party may at any time, either with the consent of the opposing party or by leave of court, amend his or her pleading. See Pa.R.Civ.P. 1033. Permission to allow an amendment of the pleadings is within the sound discretion of the trial court and will not be reversed on appeal absent a showing of abuse of discretion. See Gallo v. Yamaha Motor Corp. U.S.A., 335 Pa.Superior Ct. 311, 313, 484 A.2d 148, 150 (1984). A trial court may allow such an amendment to the pleadings while a motion for judgment on the pleadings is pending, after judgment, or after an award has been made or an appeal has been filed. See Biglan v. Biglan, 330 Pa.Superior Ct. 512, 521, 479 A.2d 1021, 1026 (1984) . Such an amendment, however, must not be for a new cause of action or surprise or prejudice the opposing party. See Robinson Protective Alarm Co. v. Bolger & Picker, 337 Pa.Superior Ct. 503, 514, 487 A.2d 373, 378 (1985) ; Cingota v. Milliken, 286 Pa.Superior Ct. 117, 121, 428 A.2d 600, 602 (1981).

Here, appellee asked for damages in the amount of $20,000.00 in his original complaint filed in 1971. After the first trial in 1983, but before damages were awarded, the court granted leave to appellee to amend his complaint and increase his claim for damages to $52,100.00. The amendment did not allege a new cause of action, and was based on the same operative facts of the original action. Additionally, appellants cannot claim to have been surprised by the amendment as they admit that they had received notice of appellee’s desire to increase his claim for damages nearly one year before appellee petitioned the court to allow the amendment. See Brief for Appellant at 20. Thus, the lower court did not err in permitting appellee to amend his complaint.

Appellants next contend that the trial court caused a number of delays which resulted in prejudice to the appellants. Specifically, they argue that appellee’s eleven year delay in prosecuting the case and the lower court’s seven month delay between the first trial and its rendering of a verdict severely prejudiced their interests. We disagree.

Appellants’ first argument, concerning the pre-trial delay, has been waived due to their failure to preserve it in either pre-trial or post-verdict motions. See Pa.R.Civ.P. 227(b) (grounds for post-trial relief must be raised, if available, in pre-trial proceedings or at trial). See also DeSiato v. Shahboz, 277 Pa.Superior Ct. 333, 336, 419 A.2d 798, 800 (1980) (party waives right to seek non pros when he indicates willingness to try the case on the merits notwithstanding delay).

Appellants also argue that a nine-month delay between the first trial and the lower court’s decision that appellants were liable for the defective construction of the house was prejudicial. They base this allegation upon Pa.R.Civ.P. 1038(c) which provides that a trial court sitting without a jury “shall enter a decision within seven days except in protracted cases or cases of extraordinary complexity.” Here, we believe that the parties’ briefs, the lower court opinion, and the length of this opinion, amply demonstrate the complexity of the issues involved in this case. Accordingly, we find that this case fell within the exception to the seven day rule. We further note that the prejudicial effects that appellants allege occurred during the nine-month period, worsening of the water problem and an inability to account for changing market conditions, are not supported by the record. We therefore find this contention meritless.

The appellants next contend that the trial court erred in failing to consider that appellee did not mitigate the damages. We disagree. A party who suffers a loss has a duty to make a reasonable attempt to mitigate damages, but the burden is on the party who breaches the contract to show how further loss could have been avoided through the reasonable efforts of the injured party. See Gadbois v. Leb-Co. Builders, Inc., supra 312 Pa.Super. at 156-57, 458 A.2d at 561-62. However, an injured party is not obligated to mitigate damages when both he and the liable party had an equal opportunity to do so. See Loyal Christian Benefit Association v. Bender, 342 Pa.Superior Ct. 614, 620, 493 A.2d 760, 763 (1985).

Here, appellants make no argument as to how the appellee could have mitigated the damages. Additionally, the trial court found, and the record shows, that the problem existed when the house was constructed and that it was an on-going problem not a worsening one. See N.T. June 8, 1983 at 38-41, 52-55. Therefore, the condition could not have been made worse by an alleged inaction on the part of appellee.

Appellants next contend that the trial court erred in rejecting its proferred evidence as to the cost of repair and market value of the house. Specifically, they contend that the trial court should have accepted the testimony of their experts over that of appellees, and credited their evidence that they had made a firm offer to purchase the house to establish its market value. We disagree. The findings of a trial judge sitting without a jury carry the same weight as a jury verdict, and this court will not disturb those findings on appeal absent an error of law or abuse of discretion. See Pato v. Cernuska, 342 Pa.Superior Ct. 609, 612, 493 A.2d 758, 759 (1985). We will respect a trial court’s findings with regard to the credibility and weight of the evidence unless the appellant can show that the court’s determination was manifestly erroneous, arbitrary and capricious or flagrantly contrary to the evidence. See Tyler v. King, 344 Pa.Superior Ct. 78, 96, 496 A.2d 16, 25 (1985).

Here, the trial court heard evidence from both parties concerning the relevant estimates of repairs and market value. The court decided to credit the evidence submitted by appellee. We will not disturb this finding on appeal. Additionally, appellants’ offer to purchase the house, and its timing on the eve of the trial, is hardly credible evidence to prove market value of the house in light of the interest of the party who made the offer. See Redevelopment Authority v. Pelullo, 48 Pa.Commonwealth Ct. 68, 74, 409 A.2d 122, 125 (1979) (such offers amount to settlement offers and are therefore not probative of value).

Appellants last contention is that the damages awarded by the trial court are excessive. Specifically, they maintain that as the house cost $40,965.00 when purchased in 1970, an award based on the cost of repair of $52,100.00 is clearly excessive. We disagree. We will not find a verdict excessive unless it is so grossly excessive so as to shock our sense of justice. See Fretts v. Pavetti, 282 Pa.Superior Ct. 166, 176, 422 A.2d 881, 885 (1980).

Here, the trial court followed the formula to determine damages set out by this Court in Gadbois v. Leb-Co. Builders, Inc., supra.

[T]he measure of damages in cases where a homeowner sues for defective construction is the difference between the market value of the house as constructed and the market value that the house would have had if constructed as promised, with the qualification that if it is reasonably practical to cure the defects in construction by repairs, and if the cost of repairs does not exceed the difference in market value, then the measure of damages is the cost of repairs.

Id., 312 Pa.Superior Ct. at 153, 458 A.2d at 557. The trial court found that the market value of the house as constructed was $50,000.00, and that the market value of the house if constructed properly was $100,000.00, leaving a difference of $50,000.00. See Lower Court Opinion, April 23, 1985 at 3, 4. The court also concluded that the cost to repair the house was $52,100.00. Id. at 5, 6. The court then noted that while the cost of repair slightly exceeded the difference in market values, the fact that appellee had established roots in the community and did not wish to relocate dictated that damages be awarded based upon the cost of repair. Id. (citing Incollingo v. Ewing, 444 Pa. 263, 308, 282 A.2d 206, 229 (1971) (fixed and formulated rules relating to the appropriate measure of damages must give way when it is determined that they are not setting a compensatory standard)).

Appellants’ argument that the award is out of proportion to the original cost of the house is without merit. Inflation and appreciation caused the market value of the house to rise, and even appellants offered evidence on market value that exceeded the original cost of the house. See Lower Court Opinion, April 23, 1985 at 3, 4. We will not find that this award, or the reasoning that compelled it, is so shocking so as to be overturned on appeal. Appellants conduct in constructing an obviously defective house, combined with their inadequate attempts at repair, provides ample justification for the verdict. The trial court’s slight deviation from the Gadbois standard was designed to give appellee the benefit of his bargain — a habitable house.

For the above stated reasons, we therefore affirm the order and judgment of the lower court.

Affirmed.

ROWLEY, J., files a concurring statement.

ROWLEY, Judge

concurring:

I agree with the majority that appellants should not be allowed to escape liability by relying on the release language contained in the agreement of sale. In my opinion, however, the language is not ambiguous. Rather, the fatal defect in the release is that it is buried in the middle of a standard form contract in the same print size and type as the rest of the contract.

As pointed out by the majority, the builder-vendor enjoys a superior bargaining position due to his special knowledge in the home construction situation. The implied warranties of habitability and reasonable workmanship extended to the builder-vendor by our Supreme Court in Elderkin v. Gaster, 447 Pa. 118, 288 A.2d 771 (1972), “were necessary to equalize the disparate positions of the builder-vendor and the average home purchaser by safe-guarding the reasonable expectations of the purchaser compelled to depend upon the builder-vendor’s greater manufacturing and marketing expertise.” Tyus v. Resta, 328 Pa.Super. 11, 19, 476 A.2d 427, 431 (1984).

Thus, I would hold that, for the protection of the consumer, any attempt to disclaim an implied warranty must not only be clear and unambiguous, but must be conspicuous. See Herlihy v. Dunbar Builders Corp., 92 Ill.App.3d 310, 47 Ill.Dec. 911, 415 N.E.2d 1224 (1980). Cf. Thermo King Corp. v. Strick Corp., 467 F.Supp. 75 (W.D.Pa.) (the test for “conspicuous” under the UCC is “whether a reasonable person against whom the modification or exclusion is to operate ought to have noticed it”), aff'd, 609 F.2d 503 (3d Cir.1979); UCC, 13 Pa.Cons.Stat.Ann. § 2316(b) (Purdon 1984) (to exclude or modify an implied warranty of merchantability and/or fitness, the language must be conspicuous).

       Appellants’ further argument that the lower court was precluded from finding that the implied warranty of habitability was breached because that warranty was not in the express language of the agreement of sale can be summarily dismissed. The very nature of an implied warranty includes the notion that it is not found in express language, but rather inferred in law. See Tyus v. Resta, supra 328 Pa.Super. at 19, 476 A.2d at 433.


author:
      BROSKY, Judge:
      ROWLEY, Judge,

text:
    519 A.2d 1030
    In the Interest of C.W. a/k/a W.C.W., a Minor. Appeal of B.L.W.
    Superior Court of Pennsylvania.
    Argued Sept. 11, 1987.
    Filed Jan. 7, 1987.

      Donald E. Williams, New Castle, for appellant.
    Sydney W. Paul, New Castle, for appellee.
    Before BROSKY, ROWLEY and POPOVICH, JJ.
   BROSKY, Judge:

This is an appeal from the Decree entered by the trial court which terminated the natural mother’s (hereinafter appellant’s) parental rights with regard to her eight year old daughter.

Appellant presents the following issues for our consideration: (1) whether the natural mother, by conduct continuing for at least six months, evidence a settled purpose of relinquishing parental claim to her minor daughter; (2) whether the natural mother, for a period of at least six months, refused or failed to perform parental duties; (3) whether the conditions which led to the removal of the child from the custody of the natural mother continued to exist; (4) whether any basis for the termination of the natural mother’s parental rights was established by clear and convincing evidence; and (5) whether the procedures followed by appellee and the trial court substantially violated any equitable principles which would deny justice to appellant. Because we find appellant’s contentions to have merit we reverse the decision of the trial court.

The facts of this case have led the parties down a long and tortured path before coming to rest before this Court. The minor child was born on March 14, 1978 at the U.S. Naval Center, Portsmouth, Virginia, to appellant and Albert Leslie White, her father, then on active duty in the U.S. Navy at Portsmouth. At the time of her marriage to Albert Leslie White, appellant had another daughter, born June 15, 1975 who made up their marital home in Norfolk, Virginia. Appellant left there with her two daughters when the child in question was one month old. Appellant returned to Pennsylvania and secured her own apartment. Appellant also secured a job and hired Marie Saul as a babysitter for which she was paid. Although this caretaker arrangement was entered into agreeably it apparently soured, prompting appellant to file a petition for Writ of Habeas Corpus against Marie Saul. The issue was amicably resolved and an Order was entered on November 7, 1979 granting custody of the child to appellant.

Just before the child’s second birthday she was taken from appellant by Marie Saul and Jean Silvis. Appellant took her back into her possession for eight days when a representative of Lawrence County Children’s Services came to appellant’s house, took the child to Marie Saul’s and left her there. From that time on appellant never had possession of her child except for visitations.

In the meantime appellant’s mother, Jean Silvis, filed a petition requesting custody of the minor. Her petition alleged that the child resided with Marie Saul from January 25, 1980 until July 5, 1980, and that she resided with Jean Silvis from July 5, 1980 until the filing of the custody petition. Jean Silvis subsequently filed a second petition, this one for temporary custody, in which she alleged that appellant forcibly removed the child from her home on July 23, 1980. By Order dated October, 1980, the court granted custody of the child to the Lawrence County Children’s Services (hereinafter, appellee), with visitations between appellant and her daughter, frequently at times and sporadic at times, as circumstances called for. Visits were scheduled at first twice a week. They began in appellee’s office and progressed to overnight visits which went fairly well. In early 1982 visits become less frequent and on May 19, 1982 appellant met with appellee and agreed to a plan of reconstituting the parental relationship. Visitations continued with a pattern of renewed interest through August, 1982. At that time appellant’s fiancee (present husband) was severely injured and hospitalized. That Fall appellant and her fiancee were married and moved to North Carolina to live. Appellant has continued to reside there until the present time. She has had contacts with the social service agency in North Carolina and that agency found the influence of appellant’s new husband over appellant to be positive and found the home upon inspection satisfactory.

By reason of newly adopted Pennsylvania Department of Public Welfare regulations requiring a six month placement and disposition review hearing, Lawrence County Children’s Services on June 9, 1983 petitioned the court for a review hearing which was scheduled for the 20th day of June, 1983. At that hearing, the Master recommended that the child be returned immediately to appellant who was then living in North Carolina. The court refused the Master’s recommendation and instead directed that the child be returned to appellant pursuant to three conditions: (1) the transfer was to be done gradually; (2) appellee was to create a plan to facilitate the child’s transfer; and (3) psychological counseling was to be made immediately available to the child. Following a review hearing and the taking of additional testimony, including an in camera hearing and testimony of a child psychiatrist, an Order was entered on May 3, 1984 directing that legal custody of the child remain with appellee. The caretaker responsibilities remained with Marie Saul.

On December 19,1984, appellee instituted a petition seeking the involuntary termination of appellant’s parental rights. Following a hearing which included an in camera interview of the minor child, the trial court held that appellant failed to maintain any meaningful contact with her daughter from May 25, 1984 to January 8, 1985. Appellant’s parental rights were then terminated.

Because all of the issues raised by appellant are directly related to each other and to the fact situation giving rise to the involuntary termination of appellant’s parental rights, we find it unnecessary to address them individually.

We begin our discussion by looking first at the standard of review in a proceeding which terminates parental rights. Our scope of review is limited to determining whether the trial court’s finding a clear necessity for termination of parental rights is supported by competent evidence. In re Adoption of M.M., 492 Pa. 457, 424 A.2d 1280 (1981); Interest of LaRue, 244 Pa.Super. 218, 366 A.2d 1271 (1976). Although an appellate court may not reweigh credibility, Adoption of S.H., 476 Pa. 608, 383 A.2d 529 (1978), the trial court’s inferences, deductions and conclusions are subject to review. Matter of M.L.W., 307 Pa.Super. 29, 452 A.2d 1021 (1982).

The Pennsylvania statute which allows the involuntary termination of parental rights provides, in pertinent part:

(a) General rule. — The rights of a parent in regard to a child may be terminated after a petition filed on any of the following grounds:
(1) The parent by conduct continuing for a period of at least six months either has evidenced a settled purpose of relinquishing parental claim to a child or has refused or failed to perform parental duties.
(2) The repeated and continued incapacity, abuse, neglect or refusal of the parent has caused the child to be without essential parental care, control or subsistence necessary for his physical or mental well-being and the conditions and causes of the incapacity, abuse, neglect or refusal cannot or will not be remedied by the parent.

23 Pa.C.S.A. § 2511(a)(1) and (2). Both of the factors listed in the statute must be analyzed in relation to the particular circumstances of the case. In re Adoption of M.M., supra 492 Pa. at 461, 424 A.2d at 1282. In the case sub judice the six month period in which appellant allegedly “evidenced a settled purpose of relinquishing parental claim” was May 5, 1984 through January 8, 1985. Although the contact between appellant and her daughter was admittedly sparse during this period we must examine the situation as a whole before drawing any conclusions.

At the time of the birth of the child in question appellant was very young and was apparently experiencing problems which initially led her to seek a caretaker relationship with Marie Saul. Past conduct, however, will not provide sufficient grounds on which to terminate a parent’s rights. In re Howard, 468 Pa. 71, 360 A.2d 184 (1976). The Pennsylvania Supreme Court has held that “a parent who makes suitable arrangements for the care of a child for a temporary crisis does not by such an act alone fail or refuse to perform parental duties ...” Id., 468 Pa. at 84, 360 A.2d at 190.

Following this arrangment with Mrs. Saul, appellant tried time and again to regain custody of her child. Her efforts were somewhat frustrated by her relocation to North Carolina which was necessitated by her new husband’s health. Additionally, appellant’s efforts, while not directly resisted, were certainly not encouraged by Mrs. Saul or appellee. The record discloses that although appellant wrote letters and sent cards to her daughter, she was receiving no feedback or proof that her child received them. The caseworker testified that she delivered the correspondence to Mrs. Saul but never read the letters to the child nor did she ever make sure that appellant was apprised of her daughter’s having received them. There is no evidence that appellant was kept current as to her daughter’s welfare by either Mrs. Saul or appellee, and appellant was not permitted to contact her child except through the caseworker which rarely occurred.

This places a very heavy burden upon appellee. In a case such as this it becomes the duty of the agency, in this case appellee, to take the role of initiator in attempting to not only maintain contact between a parent and child but to develop a program for the return of the child to the parent. For even if removal is necessary to protect the child, every effort should be made to reunite the family. Matter of M.L.W., supra, 307 Pa.Super. at 33, 452 A.2d at 1024; In re Adoption of R.I., 468 Pa. 287, 361 A.2d 294 (1976). As this Court has said in the past:

A parent must be able to seek the assistance of a Child Welfare Service with the expectation that the agency will exert its best efforts in working with the parent and the child to improve the parent’s skills and understanding. The premature filing of termination petitions by an agency thwarts the trust necessary for the advancement of the purposes of this relationship between agency and parent.

Matter of M.L.W., supra 307 Pa.Super. at 36, 452 A.2d at 1025. Appellee here has failed to fulfill this very sensitive and fragile role.

The trial court has overlooked a very important factor in the termination of parental rights by failing to consider appellant’s current lifestyle. As stated in the statute, parental rights may be terminated only where it appears that a parent cannot or will not remedy the conditions which gave rise to the parent’s incapacity. Although evidence that a mother subsequently had another child for which she was able to adequately care will not automatically prevent termination of her rights, Matter of Adoption of G.T.M., 506 Pa. 44, 483 A.2d 1355 (1984), we feel that appellant has demonstrated a substantial reform in her situation so as to conclude that she has remedied her incapacity.

We have a woman who has, since the initial removal of her child, entered into an apparently stable marriage with a man who can provide a healthy atmosphere for the minor child. Appellant has also assumed responsibility for raising stepchildren as well as another child of her own and is, by all accounts, a very capable and devoted parent. Although the child in question never resided with appellant long enough to enable appellant to establish her ability as a parent, the path which appellant’s life has since taken provides ample evidence by which her parenting skills may be evaluated. This court has held in the past that the mere possibility of rehabilitating appellant’s parenting skills within two and one-half years was not an unreasonable period of time within 23 Pa.C.S.A. § 2511(a). In re Interest of C.M.E., 301 Pa.Super. 579, 448 A.2d 59 (1982). In the instant case appellant’s rehabilitation was more than a mere possibility for it has been amply proven by her actions.

Because of the importance placed on the family, the Commonwealth may disrupt the parent-child relationship only upon a showing of clear necessity. In re Interest of C.M.E., Id. We find this to be lacking in the instant appeal. The court has terminated parental rights where a parent continually refused to learn to deal with a child’s special physical needs or to cooperate with counsellors charged with instructing the mother in parenting duties. In re D.K.W., 490 Pa. 134, 415 A.2d 69 (1980). The courts have, however, declined to terminate parental rights where there has been even sparse contact as long as the parent did not evidence an intent to abandon the child or refuse to perform parental duties. In re Adoption of McAhren, 460 Pa. 63, 331 A.2d 419 (1975).

In the instant case the trial court placed great emphasis upon the testimony of Mrs. Saul and a psychiatrist who had spoken with Mrs. Saul about the child. Mrs. Saul testified that the child became very upset when appellant was mentioned or when appellant sent cards or letters. The psychiatrist testified that the child had difficulty sleeping and also reiterated the statements regarding the child’s emotional trauma. What the trial court failed to mention was that the psychiatrist’s information was given to her by Mrs. Saul. The Pennsylvania Supreme Court has refused to allow termination when the decree is based on hearsay. Adoption of R.I., 468 Pa. 287, 361 A.2d 294 (1976).

After a careful review of the record we cannot say that appellee proved by clear and convincing evidence that appellant evidenced a settled purpose of relinquishing her parental claim or failed to perform parental duties. The situation is thus lacking the “clear necessity” required for termination of parental rights by the Court. We also find that appellant has sufficiently remedied any incapacity with regard to parenthood, thereby negating the necessary grounds for 23 Pa.C.S.A. § 2511(a)(1) and (2). Therefore, we reverse the decree of the trial court.

Case remanded to the trial court so that a program may be formulated by which the relationship between the natural mother and her minor daughter may be recultivated and every effort should be made by the agency to reestablish the child with her mother.

Decree reversed. Case remanded. Jurisdiction relinquished.

ROWLEY, J., files a dissenting statement.

ROWLEY, Judge,

dissenting:

I respectfully dissent. My review of the record convinces me that this case is controlled by the recent unanimous decision of the Pennsylvania Supreme Court in In re Adoption of J.J., 511 Pa. 590, 515 A.2d 883 (1986).


author: ROBERTS, Judge:

text:
    519 A.2d 1034
    PENN STATE CONSTRUCTION, INC. v. CAMBRIA SAYINGS AND LOAN ASSOCIATION. Appeal of ASSOCIATED-EAST MORTGAGE COMPANY.
    Superior Court of Pennsylvania.
    Argued May 22, 1986.
    Filed Jan. 6, 1987.

      Edwin J. Strassburger, Pittsburgh, for appellant.
    Adrienne Johnson, Coraopolis, for Penn State, appellee.
    Richard J. Green, Jr., Johnstown, for Cambria Sav., appellee.
    Before BROSKY, KELLY and ROBERTS, JJ.
   ROBERTS, Judge:

Appellant Associated East Mortgage Company (“Associated East”) appeals from an order dismissing all of its claims against appellee Cambria Savings and Loan Association (“Cambria”). The sole issue presented for review is whether the evidence was sufficient to prove that Associated East was guilty of fraud in causing appellee Penn State Construction Company (“Penn State”) to default on a construction contract. The trial court determined that Associated East committed fraud, thereby releasing Cambria from its duty to honor a standby letter of credit issued to Associated East. We affirm.

On September 10, 1974, Penn State filed a complaint against Cambria to enjoin them from honoring a letter of credit which Cambria had issued to Associated East. The complaint was filed in response to an oral demand on the letter of credit made by Associated East on September 6, 1974. The demand was based on Associated East’s contention that Penn State had defaulted on a construction contract by failing to complete the project by the date specified in the agreement. After a default judgment had been entered against Cambria, Associated East filed a petition to open judgment and a petition to intervene in May, 1976. Both petitions were granted in October, 1978. Associated East then filed answers and counterclaims, alleging that Cambria was obligated to honor the letter of credit. The case was tried in August, 1984, after which the chancellor issued his opinion and order dismissing Associated East’s claims. Associated East then filed a motion for post trial relief which was denied by the court en banc. This appeal followed.

The evidence establishes that on January 11, 1973, Phillipsburg U.A.W. Housing Company, owner of a tract of land in Phillipsburg, Clearfield County, entered into a construction contract with Phillipsburg Construction Company for the construction of a project known as Sunnyslope Apartments. Penn State was the managing joint venturer of the Phillipsburg Construction Company. Associated East supplied the construction mortgage to Phillipsburg U.A.W. Housing Company. The parties then entered into a Completion Assurance Agreement which specifically referred to the construction contract of January 11, 1973. The agreement required Penn State to deposit $114,918.00 as a Completion Assurance Fund in order to indemnify Associated East in the result of default by Penn State in performing the construction contract. Penn State then deposited $115,000.00 with Cambria, which in turn issued a letter of credit to Associated East, confirming the assignment of $115,000.00 as a Completion Assurance Fund.

The financing of the construction project was to be made through requisitions. The construction contract specified that requests for payment were to be made 5 days before payment was desired, and payment was to be made within 7 days of approval by the architect. The trial court found that Associated East was substantially late in making the payments on 9 approved requisitions, and that, as a result, Associated East caused the delays in construction to occur.

The evidence also established that after Associated East made the oral demand to honor the letter of credit on September 6, 1974, Penn State completed the work in accordance with the construction contract, at its own expense, with no further demand being made by Associated East until five months after completion. The trial court concluded that Associated East’s “attempt to obtain the benefit of payment on the letter of credit, in addition to the benefit of Penn State’s substantial performance is evidence of fraudulent intent.”

A letter of credit is used to provide assurance to the seller of goods (i.e. the beneficiary) of prompt payment upon presentation of documents. A standby letter of credit, the type at issue in this case, does not contemplate that payment will ultimately be made but recognizes that payment will be required only if the customer of an obligation defaults on that obligation. See 7 R. Anderson, Uniform Commercial Code, § 5-102:15 (1985). Appellant argues that the trial court misapplied the standards governing the duty of an issuer of a standby letter of credit to honor a demand for payment, as set forth by the Uniform Commercial Code, 13 Pa.C.S.A. § 5114, and by our Supreme Court’s decision in Intraworld Industries, Inc. v. Girard Trust Bank, 461 Pa. 343, 336 A.2d 316 (1975).

§ 5114(a) states the general rule that the issuer is under a duty to honor the demands for payment which in fact comply with the terms of the credit without reference as to whether the underlying contract has been performed. § 5114(b)(2) permits the customer to obtain an injunction against the issuer when there is such fraud as would justify the issuer in refusing to honor the letter. Honor may therefore be enjoined because of the fraud of the beneficiary. See Banco Nacional de Desarrollo v. Mellon Bank, 726 F.2d 87 (3d Cir.1984).

In Intraworld Industries, supra, 461 Pa. at 359, 336 A.2d at 324-325, our Supreme Court established the standards for determining when an injunction against honor should be granted:

In light of the basic rule of the independence of the issuer’s engagement and the importance of this rule to the effectuation of the purposes of the letter of credit, we think that the circumstances which will justify an injunction against honor must be narrowly limited to situations of fraud in which the wrongdoing of the beneficiary has so vitiated the entire transaction that the legitimate purposes of the independence of the issuer’s obligation would no longer be served. A court of equity has the limited duty of
“guaranteeing that [the beneficiary] not be allowed to take unconscientious advantage of the situation and run off with plaintiffs money on a pro forma declaration which has absolutely no basis in fact."
Dynamics Corp. of America v. Citizens and Southern National Bank, 356 F.Supp. 991, 999 (N.D.Ga.1973) (emphasis supplied).

Our standard of review is to determine whether the findings of the trial court are supported by competent evidence and whether the trial court committed error in any application of the law. Piccinini v. Teachers Protective Mutual Life Insurance Co., 316 Pa.Super. 519, 524-525, 463 A.2d 1017, 1021 (1983). Furthermore, the evidence must be considered in the light most favorable to the verdict winners. Id.

Applying these standards here, it is clear that the trial court’s determination that Associated East committed fraud was supported by sufficient evidence. The record establishes that Penn State had substantially completed the project when Associated East made the demand on Cambria to honor the credit. It is also beyond doubt that Associated East’s failure to timely pay the requisitions, as the contract mandated, caused whatever delays occurred in completing the project. To allow the beneficiary to obtain the proceeds from the completion assurance fund when it also received the benefits of the underlying transaction would make the issuer a party to the beneficiary’s fraud. In this case Cambria had notice of irregularities by Associated East and decided not to comply with Associated East’s demand to honor the credit. See Bank of Newport v. First National Bank & Trust Co. of Bismarck, 687 F.2d 1257 (8th Cir. 1982). The trial court did not err in finding fraud in the transaction between Penn State and Associated East. Accordingly, the trial court correctly determined that Cambria is not obliged to honor the letter of credit.

Order affirmed.

      . The relevant portion of the Completion Assurance Agreement provides:
      Article 2. The Lender shall maintain such Fund as a separate trust account to be disbursed as follows:
      (c) “To the Lender the entire Fund or balance remaining therein in the event of a default by the Contractor under the Construction Contract to be used by the Lender to indemnify it and the Owner as the case may be, for any loss, damage or expense whatsoever which they may suffer by reason of the Contractor’s failure to properly perform said Construction Contract. In any event, any and all disbursements from said Fund shall be made only upon the prior written approval of the Commissioner, or his authorized agent.” (Emphasis supplied)

      . Letter of Credit # 1, dated January 11, 1973, provides:
      "We hereby issue this Letter of Credit # 1 for the account of the United Auto Workers up to an aggregate amount of $115,000.00, available in case of default by the contractor on drafts accompanied by statement of default pursuant to Completion Assurance Agreement, FHA form 2450, executed by Penn State Construction Company, John Albarano, President, in connection with the closing of FHA Project # 033-44063-LD."

      . The relevant portions of § 5114 provide as follows:
      (a) Duty of issuer to honor draft or demand. An issuer must honor a draft or demand for payment which complies with the terms of the relevant credit regardless of whether the goods or documents conform to the underlying contract for sale or other contract between the customer and the beneficiary. The issuer is not excused from honoring such a draft or demand by reason of an additional general term that all documents must be satisfactory to the issuer, but an issuer may require that specified documents must be satisfactory to it.
      (b) Nonconforming document or fraud. Unless otherwise agreed when documents appear on their face to comply with the terms of a credit but a required document does not in fact conform to the warranties made on negotiation or transfer of a document of title (section 7507) or of a security (section 8306) or is forged or fraudulent or there is fraud in the transaction:
      (2) in all other cases as against its customer, an issuer acting in good faith may honor the draft or demand for payment despite notification from the customer of fraud, forgery or other defect not apparent on the face of the documents but a court of appropriate jurisdiction may enjoin such honor.


author: TAMILIA, Judge:

text:
    519 A.2d 1037
    Gene E. FIZZ, Individually and as Executor of the Estate of Marilyn K. Fizz, Deceased, Appellant, v. KURTZ, DOWD & NUSS, INC., Now K.D.N. Corporation, Elmer O. Manwiller and Daniel P. Hussey.
    Superior Court of Pennsylvania.
    Argued Sept. 10, 1986.
    Filed Jan. 14, 1987.

      Jeffrey Howell, Reading, for appellant.
    Robert I. Cottom, Reading, for appellees.
    Before McEWEN, DEL SOLE and TAMILIA, JJ.
   TAMILIA, Judge:

This is an appeal from an Order sustaining defendant/appellees’ preliminary objections in the nature of a demurrer to appellant’s complaint.

Appellant brought this action against appellees after his decedent/wife was struck and killed by an automobile operated by B. Bollinger, who later pled guilty to numerous criminal offenses, including driving while intoxicated. Bollinger admitted that immediately prior to the accident he had been drinking at an establishment which was covered by an insurance policy that had been issued by appellees acting as agents of the Fireman’s Fund Insurance Company. The insurance policy provided general, but not liquor, liability coverage for the premises. In his complaint, appellant alleges that appellees, as experts in commercial liability insurance, had a contractual duty to give the insureds proper advice concerning liability insurance for a drinking establishment. Appellant further alleges negligence in failure to give such advice.

On October 9, 1985, appellees filed preliminary objections to the complaint in the nature of a demurrer and a motion for a more specific pleading. On February 14, 1986, after argument, the court sustained appellees’ preliminary objections and denied their motion for a more specific pleading. The Order also granted appellant leave to file any further pleadings within twenty (20) days. Appellant did not file any additional pleadings within twenty days and on March 13, 1986, an appeal was taken to this Court.

Initially, we note that this Court’s scope of review is limited where there is a challenge to the sustaining of a preliminary objection in the nature of a demurrer. Mahoney v. Furches, 503 Pa. 60, 468 A.2d 458 (1983). Our inquiry goes only to determining the legal sufficiency of appellant’s complaint and we may only decide whether sufficient facts have been pleaded which would permit recovery if ultimately proven. Gordon v. Lancaster Osteopathic Hosp. Ass’n., 340 Pa.Super. 253, 489 A.2d 1364 (1985). We must be able to state with certainty that “upon the facts averred, the law will not permit recovery by the plaintiff.” Berger v. Ackerman, 293 Pa.Super. 457, 459, 439 A.2d 200, 201 (1981).

Viewing appellant’s complaint in light of the aforementioned standards, we find the lower court properly sustained appellees’ preliminary objections. Appellant contends he has stated a claim for relief in alleging that his decedent, as a third party beneficiary of a contract between appellees and the tavern owners, had been injured as a result of appellees’ failure to render proper advice to the tavern owners. Further, appellant alleges a claim for relief in that his decedent had been injured by appellees’ negligence in failing to so advise the tavern owners. While we must accept appellant’s allegations as true, we find no basis in law, under any theory, to support his recovery against appellees, as appellees owed no legal duty, either in contract or tort, to appellant or his decedent.

To assert a claim under the contract between appellees and the tavern owners, appellant must show a legal duty owed to his decedent as a third party beneficiary to the contract.

Since 1950, it has been the law in Pennsylvania that for a third party beneficiary to have standing to recover on a contract, both parties to the contract must express an intention that the third party be a beneficiary to whom the promisor’s obligation runs in the contract itself. Spires v. Hanover Fire Insurance Co., 364 Pa. 52, 70 A.2d 828 (1950) (plurality opinion)....
... However, the Pennsylvania Supreme Court recently abandoned Spires as the exclusive test of what constitutes a third party beneficiary. The court, in Guy v. Liederbach, 501 Pa. 47, 459 A.2d 744 (1983) looked to the Restatement of Contracts 2d (1981), specifically § 302, in order to determine third party beneficiary status.
Section 302 states:
Intended and incidental beneficiaries
(1) unless otherwise agreed between promisor and promisee, a beneficiary of a promise is an intended beneficiary if recognition of a right to performance in the beneficiary is appropriate to effectuate the intention of the parties and either
(a) the performance of the promise will satisfy an obligation of the promisee to pay money to the beneficiary; or
(b) circumstances indicate that the promisee intends to give the beneficiary the benefit of the promised performance.
(2) an incidental beneficiary is a beneficiary who is not an intended beneficiary.

Gerace v. Holmes Protection of Phila., 357 Pa.Super. 467, 472-473, 516 A.2d 354, 357 (1986).

Under this test, we must determine whether recognition of a beneficiary’s right to performance is “appropriate to effectuate the intention of the parties____” Guy, supra 501 Pa. at 60, 459 A.2d at 751. This is a discretionary qualification which enables the court to determine whether recognition of third party status is “appropriate” in a given case. Guy, supra. In addition, to become an intended beneficiary, the beneficiary must fall within either subsection (a) or (b).

Subsection (a) can rapidly be eliminated as there was no obligation running from appellees to either appellant or his decedent to pay money for an existing debt when the contract was made. We further find that, under subsection (b), there is no evidence to suggest that appellees intended to give the benefit of the promised performance to appellant or his decedent at the time the contract was entered into. To the contrary, any insurance contract entered into between appellees and the tavern owners was for the benefit of the tavern owners so as to protect them against claims by third parties. 47 P.S. § 4-497, a provision within the Liquor Code, provides:

No licensee shall be liable to third persons on account of damages inflicted upon them off of the licensed premises by customers of the licensee unless the customer who inflicts the damages was sold, furnished or given liquor or malt or brewed beverages by the said licensee or his agent, servant or employee when the said customer was visibly intoxicated.

This section imposes liability on the licensee in certain instances but does not, however, require the licensee to carry liability coverage to cover possible losses incurred as a result of this liquor law liability. Obtaining the appropriate insurance coverage is something the licensee undertakes exclusively for his own benefit and protection. Accordingly, we find that appellant herein is not a third party beneficiary to the contract entered into between appellees and the tavern owners.

Likewise, we find that appellees owed no legal duty in tort to appellant or his decedent. Again, we cite to Gerace, wherein we stated:

It is a fundamental rule of tort law that a negligence claim must fail if it is based on circumstances for which the law imposes no duty of care on the defendant. Morena v. South Hills Health System, 501 Pa. 634, 462 A.2d 680 (1983); Boyce v. United States Steel Corporation, 446 Pa. 226, 285 A.2d 459 (1971) (plurality opinion). Section 324A of the Restatement of Torts 2d (1977) states the general rule regarding liability to a third person who is injured as a result of the defendant’s negligent performance of an undertaking to perform services for another.
One who undertakes, gratuitiously or for consideration, to render services to another which he should recognize as necessary for the protection of a third person or his things, is subject to liability to the third person for physical harm resulting from his failure to exercise reasonable care to protect his undertaking, if
(a) his failure to exercise reasonable care increases the risk of such harm, or
(b) he has undertaken to perform a duty owed by the other to the third person, or
(c) the harm is suffered because of reliance of the other or the third person upon the undertaking.

Gerace, supra, 357 Pa.Superior Ct. at 474, 516 A.2d at 358.

We are in full agreement with the lower court in finding that if negligence against the tavern owners is indeed proven, appellant can recover from them. The tavern owners may then have a case against the appellees on either a negligence or contractual theory, however, this appellant is owed no duty by these appellees.

Order affirmed.

      . Usually, where a court sustains preliminary objections without dismissing the complaint or otherwise terminating the action the Order is interlocutory and lacks the finality to be appealable. Freeze v. Donegal Mut. Ins. Co., 504 Pa. 218, 470 A.2d 958 (1983); Jones v. Nissenbaum, Rudolph & Seidner, 244 Pa.Super. 377, 368 A.2d 770 (1976). However, an Order is final and appealable if it "precludes a party from presenting the merits of his claim to the lower court.” (citations omitted) Com., Dept. of Transp. v. Rollins Outdoor Ad., 76 Pa.Cmwlth. 554, 557, 464 A.2d 653, 655 (1983). If the amendment permitted by the court would, for all intents and purposes, put appellant out of court on the question he seeks to litigate, then the Order is final and appealable. Freeze, supra, 504 Pa. at 221, 470 A.2d at 960 n. 5.
      Although the lower court did not expressly dismiss appellant’s complaint, it appears that the court’s granting of appellees’ demurrer as to both counts of appellant’s complaint constituted a dismissal of the complaint. Appellee did not seek to amend his complaint within the time prescribed by the court below and we, therefore, must assume that he cannot. After a review of the record, we also find no basis upon which appellant could assert a cause of action against these appellees. Therefore, appellant has been put out of court on his cause of action and the instant appeal is properly before us for review.