text:
    485 A.2d 821
    COMMONWEALTH of Pennsylvania v. Trina GARNETT, Appellant.
    Superior Court of Pennsylvania.
    Argued Sept. 5, 1984.
    Filed Dec. 14, 1984.
    Petition for Allowance of Appeal Denied June 23, 1985.

      Joseph Branca, Assistant Public Defender, Media, for appellant.
    Vram Nedurian, Jr., Assistant District Attorney, Media, for Commonwealth, appellee.
    Before CIRILLO, OLSZEWSKI and MONTGOMERY, JJ.
   OLSZEWSKI, Judge:

This appeal follows denial of appellant’s petition for relief under the Post Conviction Hearing Act.

On August 29, 1976, two children died in a fire at 1138 Spruce Street, Chester. Investigation by the Pennsylvania State Police Fire Marshal revealed that the fire had been set. As a result of their investigation, the Chester police filed criminal complaints against appellant, then age 14. The girl was bound over, following a preliminary hearing, on charges of criminal homicide-murder, criminal homicide, burglary, conspiracy-homicide, criminal mischief, recklessly endangering another person, causing a catastrophe and arson. Appellant was tried as an adult on all counts. Jury trial commenced on March 14, 1977. Verdicts of guilty were returned on two charges of second degree murder, on burglary, arson, recklessly endangering another person, and risking and causing a catastrophe. Counsel filed boilerplate post-verdict motions. Those post-verdict motions denied, appellant was sentenced to concurrent terms of life imprisonment, to be followed at the close of the life terms, by an additional twenty to forty years imprisonment. No direct appeal was taken.

Appellant makes four allegations of ineffective assistance by counsel. She first charges that counsel was ineffective for failing to obtain an independent determination of her competency to stand trial and for failing to challenge her certification as competent to stand trial.

Conviction of an accused while she is legally incompetent violates due process. Pate v. Robinson, 383 U.S. 375, 378, 86 S.Ct. 836, 838, 15 L.Ed.2d 815 (1966); Commonwealth v. Knight, 276 Pa.Super. 348, 357, 419 A.2d 492, 496 (1980) (and cases cited therein). Incompetence to proceed on criminal charges is defined by statute. “Whenever a person who has been charged with a crime is found to be substantially unable to understand the nature or object of the proceedings against him or to participate or assist in his defense, he shall be deemed incompetent to be tried, convicted or sentenced so long as such incapacity continues.” 50 P.S. § 7402(a). Appellant was found incompetent by three psychiatrists, competent by a fourth. On the weight of that last evaluation, she proceeded to trial and conviction.

The PCHA court found that appellant had presented no evidence to establish that she was in fact incompetent to stand trial in March of 1977. It concluded, “without such evidence Defendant’s position does not rise above a mere allegation.” While we sympathize with the lower court’s predicament, we believe that the inquiry cannot end there.

Admittedly, difficulties attend the court’s atfempt to determine retrospectively an accused’s competence to stand trial. See Pate v. Robinson, 383 U.S. at 387, 86 S.Ct. at 843; Dusky v. United States, 362 U.S. 402, 80 S.Ct. 788, 4 L.Ed.2d 824 (1960). Where, as here, years separate the trial and the challenge, the difficulties may be insurmountable. In Commonwealth v. Dimitris, for example, Judge Spaeth for the Court en banc wrote: “To hold a hearing now [1977] on the question of appellant’s competency to stand trial in 1973 would not be sufficient safeguard of his due process rights.” 247 Pa.Super. 486, 493-494 n. 6, 372 A.2d 930, 933 n. 6 (1977); compare Commonwealth v. Hunt, 259 Pa.Super. 1, 12 n. 13, 393 A.2d 686, 691 n. 13 (1978) (plurality opinion) (remand for evidentiary hearing after passage of five years where the record contained four psychiatric reports written at or about the time of trial). This Court has addressed those difficulties. If the record initially reveals serious doubts about a defendant’s competency, the reviewing court will proceed to determine whether the record conclusively establishes the accused’s incompetency. Where the record does not permit such a judgment, the court will order a remand for an evidentiary hearing or, in unique circumstances where a remand hearing would not satisfy the demands of due process, grant a new trial. See Commonwealth v. Megella, 268 Pa.Super. 316, 325, 408 A.2d 483, 488 (1979) (Cercone, J., concurring) and cases cited therein.

The psychiatric reports relied on in this case do not appear of record. From testimony at the PCHA hearing, we deduce that there exist a social history from Allentown State Hospital dated January, 1973, summaries of her condition from Allentown State Hospital dated September 19 and September 24, 1974; a school summary dated April 28, 1975; a report from the Mental Health Institute for Children at Allentown State Hospital dated June 27, 1973; progress notes from Crozer-Chester Mental Health Center dated September, 1975 and December, 1975; a summary from Child Care Center of Delaware County, for the period June, 1975, and September, 1976, which included a psychiatric evaluation dated December 10, 1975, and a psychological examination dated August 25, 1976; a discharge summary from Eastern State School dated November 23, 1976, which included a psychological examination by Signe Larson, dated October 4, 1976; a psychiatric evaluation of Dr. Fong dated September 14, 1976; and another by Dr. Fong dated November 30, 1976; a report of a mental health hearing by Dr. Barry, dated December 3, 1976; a discharge summary from Norristown State Hospital dated January 16, 1977; a psychiatric evaluation done by Divine Providence Hospital in Williamsport, covering the period August 3 to 30, 1977; and a psychological evaluation by Muncy State Prison dated September 11, 1979.

Denied access to those reports, we turn to the facts of the case. Appellant has presented evidence which raises serious doubts about her competency at the time of trial. The fire occurred on August 29, 1976. Appellant had spent 2V2 of the preceding 4 years as a patient undergoing treatment for psychological disorders. She left the institution against the advice of a doctor who felt appellant was “too compulsive and not able to control herself.” Following her arrest September 3, 1976, appellant was evaluated at the request of prison authorities. The court-appointed psychiatrist, Dr. John Fong, superintendent of Haverford State Hospital, found the girl incompetent to stand trial. She was placed in the Eastern State School and Hospital. There she was treated, tested and again found incompetent to stand trial. On December 3,1976, a second psychiatrist, Dr. Theodore J. Barry, also of Haverford State Hospital, examined appellant and diagnosed her condition as chronic undifferentiated schizophrenia. He recommended she be hospitalized. The girl was committed to Norristown State Hospital. Two weeks after appellant’s arrival at Norristown, the staff of that institution found her competent to stand trial.

More than two months later, the matter proceeded to trial without objection.

In the present case it appears from the trial judge’s opinion that he relied on the conclusions reached by the staff of Norristown State Hospital. He fails to explain, however, what facts gave rise to these conclusions or even what standard the staff applied. None of the staff members testified nor were any of their reports made part of the record. On review, we are unable to come to a final judgment as to the sufficiency of the last examination. See Commonwealth v. Hunt, 259 Pa.Super. at 11 n. 10, 393 A.2d at 691 n. 10 (psychiatrist’s report probative, but not dispositive, on question of appellant’s competence); Commonwealth v. Savage, 270 Pa.Super. 388, 411 A.2d 774 (1979) (per Cirillo, J.).

The lower court failed to make findings of fact regarding the girl’s competency. With neither reports nor findings of fact on record, we are constrained to remand this matter. We do so reluctantly, mindful of the interests of judicial economy in the administration of criminal justice. Here, however, the deficiencies of the record impel the result.

On remand, the court is directed to hold an evidentiary hearing limited to the question of appellant’s competence to stand trial in March of 1977. If the court below concludes that she was competent at the time of trial, the judgment of sentence as modified will be upheld. See, infra, pp. 328-329. If appellant is found to have been incompetent, judgment of sentence is reversed and a new trial is ordered.

We find no merit to appellant’s remaining claims.

Appellant next argues that trial counsel was ineffective for failing to present the defense of diminished capacity. It is true appellant was entitled to present evidence that she suffered from a mental defect which rendered her incapable of forming the specific intent to kill. Commonwealth v. Walzack, 486 Pa. 210, 360 A.2d 914 (1976). Under the Crimes Code, negation of a specific intent to kill would have reduced the crime to murder of the third degree. See 18 Pa.C.S. § 2502. Dr. Mark Shulkin, the court-appointed psychiatrist, testified that on the date of the fire, August 29, 1976, appellant lacked the capacity to form the specific intent to kill. Her IQ is listed at 69 or 70. Psychological tests conducted shortly after the fire indicated that appellant’s thoughts are little more than animal instinct with no consideration of circumstances and no thinking beforehand.

Appellant was convicted, however, of second, not first, degree murder. Under the then-operative statute, “[a] criminal homicide constitutes murder of the second degree when the death of the victim occurred while defendant was engaged as a principal or accomplice in the perpetration of a felony.” 18 Pa.C.S. § 2502(b). The felony here is arson. 18 Pa.C.S. § 3301, 1972, Dec. 6, P.L. 1482, No. 334, § 1, effective June 6, 1973; amended 1982, April 29, P.L. 363, No. 101, § 1, effective in 90 days; 1982, Dec. 7, P.L. 811, No. 227, § 1, effective in 60 days. Conviction for arson will stand on proof that an accused intended to set a fire and damage an inhabited building. See § 3301(b)(1); Commonwealth v. Trafford, 312 Pa.Super. 578, 581, 459 A.2d 373, 374 (1983) (to convict a person of arson, prosecution must establish beyond a reasonable doubt that there was a fire willfully and maliciously set by defendant). Murder follows as felony-murder; the killing need not be intentional. Commonwealth v. Tarver, 493 Pa.Super. 320, 426 A.2d 569 (1981). For the crime, the statute mandates a term of life imprisonment. See 18 Pa.C.S. § 1102(b).

Nothing in the record suggests appellant lacked capacity to form the requisite intent for arson. Dr. Shulkin testified that “she would be able to form the general intent to enter the house, to destroy this property____” “[I]n view of her having set herself on fire and suffered really serious injuries,” Shulkin concluded, “she would know that setting a fire could cause serious damage to people.” Trial counsel cannot be deemed ineffective for failing to advance the diminished capacity defense.

Appellant challenges, as pro forma, trial counsel’s representation at the transfer, hearing. The Commonwealth sought to have appellant, then age fourteen, certified to be tried as an adult on the subordinate charges. Original jurisdiction for these charges, voluntary and involuntary manslaughter, recklessly endangering another person, causing or risking a catastrophe, criminal mischief, burglary and arson, lay in the juvenile court. The Commonwealth, as the party objecting to the juvenile court’s jurisdiction, had the burden of establishing that appellant was not amenable to treatment, supervision or rehabilitation as a juvenile, that she was not committable to an institution for the mentally retarded or mentally ill and that the interests of the community required that the child be placed under legal restraint or discipline. 11 P.S. § 50-325, repealed and reenacted as 42 Pa.C.S. § 6355. See Commonwealth v. Greiner, 479 Pa. 364, 370, 388 A.2d 698, 700 (1978). To that end, the Commonwealth presented witnesses; defense counsel offered none. Counsel limited his argument to two statements. He stated his belief that appellant needed a program of rehabilitation; he noted that the fact that appellant was charged with murder served to remove only the charge of murder from the juvenile court’s jurisdiction. The court listened, then rendered its decision certifying appellant for trial as an adult on all charges in conjunction with the charge of murder.

We note the shortcomings of trial counsel’s representation at the certification hearing. Counsel failed to introduce the fact of appellant’s diminished mental capacity — an IQ of 69 and a diagnosis of undifferentiated schizophrenia. At no time did he petition for transfer of the murder charges to the juvenile side of the court of common pleas. See 11 P.S. § 50-303, repealed and reenacted as 42 Pa.C.S. § 6322; Commonwealth v. Keefer, 470 Pa. 142, 147 n. 7, 367 A.2d 1082, 1084 n. 7 (1976), cert. denied Keefer v. Pennsylvania, 434 U.S. 1009, 98 S.Ct. 717, 54 L.Ed.2d 751 (1978), reh. denied 435 U.S. 938, 98 S.Ct. 1514, 55 L.Ed.2d 534 (1978). While we do not condone counsel’s actions, we conclude that assistance was not ineffective under the standards enunciated in Commonwealth ex rel. Washington v. Maroney, 427 Pa. 599, 235 A.2d 349 (1967).

The guidelines for certification under the Juvenile Act emphasize the child’s amenability to care “as a juvenile through available facilities.” 11 P.S. § 50-325, repealed and reenacted as 42 Pa.C.S. § 6355. In appellant’s case, there were no facilities available for a child charged with murder by arson. As Judge Reed explained:

Both the Court and the Delaware County Juvenile Court exerted substantial energies in an effort to place the Defendant, which efforts extended as far as Canada. However, the nature of the charges, specifically Murder with Arson, closed all regular facilities to the Defendant ... Nothing more could have been done for her in the Juvenile System at that time.

The juvenile court, in the first instance, had no jurisdiction over the murder counts. Arson and the lesser-related charges were part and parcel of those charges. Given the relation of the charges, we find no error in the hearing court’s decision to certify appellant to be tried as an adult on all charges. See Keefer, 470 Pa. at 147-148, 367 A.2d at 1085. Appellant’s third claim must fall.

Appellant last argues that trial counsel erred in failing to request the so-called “mercy charge.” In every prosecution for murder, a jury may return, and the court must accept, a verdict of voluntary manslaughter — even in the absence of any evidence of voluntary manslaughter. See Commonwealth v. Jones (a/k/a Dupree), 473 Pa. 211, 219 n. 5, 373 A.2d 1338, 1341 n. 5 (1977) (Roberts, J., concurring). Appellant, as a matter of law, was entitled to an instruction on voluntary manslaughter. Commonwealth v. Jones, 457 Pa. 563, 319 A.2d 142 (1974) (plurality, opinion).

Although trial counsel failed to request the charge, the court did instruct the jury on voluntary manslaughter. The PCHA court concluded that the question of ineffectiveness was mooted by the fact that the trial court did give the voluntary manslaughter charge. Appellant contends that the charge fails for failure to alert the jury that “pursuant to its inherent mercy dispensing power, [it] may from sympathy or awareness of extenuating circumstances, find a defendant guilty of a lesser offense than the evidence could support.” Jones (a/k/a Dupree), 473 Pa. at 218-219, 373 A.2d at 1341. The charge, in pertinent part, reads:

However, if you do not find the Defendant guilty of murder under the instructions we have just given you, you may nevertheless find her guilty of voluntary manslaughter if you are satisfied beyond a reasonable doubt that without justification she caused the death of either Brian or Derrick Harvey or both, with an intent to kill or inflict great bodily harm.

We find no merit to appellant’s final claim.

Appellant has failed to challenge the legality of the sentences imposed consecutive to her life terms for murder. A question as to the legality of the sentence, however, is never waived. Commonwealth v. Ford, 315 Pa.Super. 281, 296, 461 A.2d 1281, 1288 (1983) (and cases cited therein). We have addressed the issue and conclude that judgment of sentence was improperly entered on the non-murder charges. Mindful that the court on remand may find appellant was competent to stand trial in March of 1977, we vacate the sentences entered on those charges.

“The applicable rule is that where the same act or transaction constitutes a violation of two distinct statutory provisions, the test to be applied to determine whether there are two offenses or only one is whether each provision requires proof of a fact that the other does not.” Blockburger v. United States, 284 U.S. 299, 304, 52 S.Ct. 180, 182, 76 L.Ed. 306 (1932), quoted in Commonwealth v. Tarver, 493 Pa. 320, 325, 426 A.2d 569, 572 (1981). In addition to two counts of murder in the second degree, appellant’s sentence reflects convictions for burglary, arson, causing a catastrophe and recklessly endangering another person. Because we find no legislative intent to cumulate the punishments, we vacate the sentence imposed on the subordinate offenses. See Commonwealth v. Bostic, 500 Pa. 345, 456 A.2d 1320 (1983) (convictions for aggravated robbery and committing a crime of violence while in possession of a firearm do not merge for the purposes of sentencing); see also Missouri v. Hunter, 459 U.S. 359, 103 S.Ct. 673, 74 L.Ed.2d 535 (1983) (Double Jeopardy clause does no more than prevent the sentencing court from prescribing greater punishment than the legislature intended).

Conviction for arson under the then-operative statute required proof that appellant had intentionally started a fire and thereby recklessly placed another person in danger of death or bodily injury. 18 Pa.C.S. § 3301 (amended 1982). Risking catastrophe followed on proof that the girl recklessly created a risk of catastrophe in employment of fire. 18 Pa.C.S. § 3302(b). Causing catastrophe rested on a showing that she recklessly or intentionally or knowingly caused a catastrophe by fire. 18 Pa.C.S. § 3302(a). And conviction for recklessly endangering another person will stand where appellant has recklessly engaged in conduct which placed another person in danger of death or serious bodily injury. 18 Pa.C.S. § 2705. The three statutes address, with varying degrees of specificity, the same act. Convictions on the lesser counts should have merged with the arson conviction for the purposes of sentencing. Cf. Commonwealth v. Williams, 290 Pa.Super. 209, 434 A.2d 717 (1981) (recklessly endangering merges with aggravated assault).

Either of the felony counts, burglary or arson, could support the murder convictions under a felony-murdér theory. See, e.g., Commonwealth v. Maddox, 307 Pa.Super. 524, 453 A.2d 1010 (1982) (burglary merges with felony-murder). On the facts of the case, the burglary was a necessary first step, to the arson felony-murder. The State Police investigation revealed that the fire had been set in two separate locations in the first floor front room of the house. From there it spread and engulfed the structure. The statute defines burglary as entering an occupied dwelling with intent to commit a crime therein. Here the crime was arson. As a result of the arson, two children died. Applying the Blockburger test, we conclude that the burglary and the arson were constituent offenses of the felony-murders. We therefore vacate the judgment of sentence entered at those counts.

Case remanded for further proceedings consistent with this opinion. Jurisdiction relinquished.

      . Dr. Shulkin, the court-appointed psychiatrist at the PCHA hearing, limited his testimony to comments "on the complexity of her' ability to think.” He explained:
      Now, I’m aware that my examination was some six or seven years later, but in cases of mental deficiency, one would expect thát there wouldn’t be much change one way or the other.
      So that I gather that if anything, her schizophrenia might have improved somewhat, but not the mental deficiency.
      He testified further:
      I found Trina to be a rather large person, who looked her age, had extremely large hands.
      I explained the purpose of my examination, and then asked her the date, and she said it was February, 1981, which was an error of two years.
      I asked her if she was sure about that, and she said yes, she was pretty sure.
      I asked, her to add three and two, and she said four. She said this rapidly, without any concern about error. I asked her to subtract seven from ten, and she said seventeen.
      I asked her how far it was from Muncy to Delaware County, and she didn’t know. I asked her how she liked being at Delaware County Prison, and she said she didn’t like being behind bars instead of a door.
      And when I asked her why there were bars there or what she thought the reason was, she said, I guess they think we’re animals. She thought the prison guards were trying to hurt her.
      I asked her who her attorney was, and she said she didn’t know. I told her, I jotted down the time of my telling her and that was five minutes after two.
      At 2:07 I asked her who her attorney was, and she said, well, it was an odd name. So I told her again that it was Joseph Branca. And then at 2:17, ten minutes later, I asked her who Joseph Branca was, and she said she didn’t remember.
      To summarize the interview, I would say that if one doesn’t listen carefully to what Trina says, it almost makes sense, but if one asks her a question and then carefully considers the answer, it makes no sense at all.
      That she’s willing to say those things which make her appear to be bright, or at least not to be retarded, but she doesn’t consider the consequences of the meaning of what she says.
      I asked her, for instance, where she would go if she were discharged from prison, and she said she would live with her sister.
      And yet she hadn’t gotten her sister’s permission to live with her, hadn’t been in communication with her sister, doesn’t know if her sister is married.
      She expressed some paranoid thinking.
      She said she didn’t like being around these people, that they look at her, that they're after her, felt that people were .laughing at her. I also interviewed Barbara Worack, who is a counselor at the prison, and who had gotten to know Trina fairly well. And Miss Worack agreed with me that Trina was not making good sense. I think that summarizes my interview.
      Q Doctor, in your opinion, would it be fair to characterize Trina as simplistic?
      A Yes, I, I think that goes along with being retarded. I think a synonym for retarded is often simple-minded.

      . Counsel, in receipt of conflicting conclusions, failed to challenge the finding of competency either during the two-plus months from that last determination until trial or at the trial itself. At the PCHA hearing, counsel offered the excuse that he was under the impression appellant’s family lacked funds to pay for an evaluation. We would direct his attention to § 7402 of the Mental Health Procedures Act. By statute, a defendant who has substantial objection to the conclusions reached by the court-appointed psychiatrist is entitled to obtain, at county cost, a psychiatrist of her own selection. 50 P.S. § 7402(f).

      . The Honorable Howard F. Reed, Jr., presided over both the trial and the PCHA hearing.

      . As Judge Spaeth explained in Commonwealth v. Smith, 227 Pa.Super. 355, 367, 324 A.2d 483, 489 (1974):
      To the extent that psychiatric testimony is utilized, however, it should be descriptive of the defendant’s condition rather than con-., elusory. Like criminal responsibility, incompetency is a legal question; the ultimate responsibility for its determination must rest in a judicial rather than a medical authority. In relying on conclusory psychiatric testimony, often expressed in the same terms as the ultimate incompetency question, the courts shift responsibility for the determination to psychiatrists who have no special ability to decide the legal issue. Indeed, there is repeated evidence that psychiatrists often misunderstand the test of incompetency and confuse it with the test of criminal responsibility. Medical opinion about the defendant’s condition should be only one of the factors relevant to the determination. A defendant’s abilities must be measured against the specific demands trial will make upon him, and psychiatrists have little familiarity with either trial procedure or the complexities of a particular indictment.

        Quoting, Note, Incompetency to Stand Trial, 81 Harv.L.Rev. 454, 470 (1967).
      Further, the report relied upon by the lower court was issued over two months before trial. See Pate v. Robinson, 383 U.S. 375, 86 S.Ct. 836, 15 L.Ed.2d 815 (two-three months too long); Commonwealth v. Hunt, 259 Pa.Super. 1, 393 A.2d 686 (court’s reliance on report made more than five months before trial held unwarranted); but see Commonwealth v. Pifer, 284 Pa.Super. 170, 178, 425 A.2d 757, 761 (1981) (a lapse of two months held not per se too long where record established defendant’s competency); compare Commonwealth v. Marshall, 456 Pa. 313, 318 A.2d 724 (1974) (Supreme Court remanded for evidentiary hearing where second and third psychiatric examinations, eight months before and one month after second trial, raised serious doubts about appellant’s competency).

      . The statute was amended in 1978 to substitute "it is committed” for "the death of the victim occurred.” Act of April 28, 1978, P.L. 84, No. 39, § 1 (effective in 60 days).


source: Caselaw Access Project

author: DEL SOLE, Judge:

license: Public Domain

text:
    485 A.2d 830
    Matthew HAHN and Spotts and Morrow, v. LIBERTY MUTUAL INSURANCE COMPANY and Boston Old Colony Insurance Company. Appeal of LIBERTY MUTUAL INSURANCE COMPANY. Cross Appeal of BOSTON OLD COLONY INSURANCE COMPANY.
    Superior Court of Pennsylvania.
    Argued July 31, 1984.
    Filed Dec. 14, 1984.
    Petition for Allowance of Appeal Denied June 7, 1985.

      Mary A. Czajkowski, Pittsburgh, for appellant (at No. 903) and for appellee (at No. 916).
    Thomas M. Fallert, Pittsburgh, for appellant (at No. 916) and for. appellee (at No. 903).
    Charles S. Morrow, Pittsburgh, for appellees.
    Before ROWLEY, DEL SOLE and MONTGOMERY, JJ.
   DEL SOLE, Judge:

Matthew Hahn, a resident of the State of New York, sustained injuries, in an automobile accident in Clearfield County, Pennsylvania on May 25, 1979. The accident in question occurred while Hahn was operating a rental car obtained in New York. The rental car was insured by Liberty Mutual Insurance Company (Liberty Mutual) under a policy issued to the rental car agency. At the time of the accident, Matthew Hahn did not own a motor vehicle and resided with his parents in New York. Hahn’s mother, Margurite Hahn, did own an automobile at the time of the accident which was insured by Boston Old Colony Insurance Company (Boston Old Colony).

Matthew Hahn filed a claim for no-fault basic loss benefits with Liberty Mutual and Boston Old Colony. Both claims were denied. Thereafter, Matthew Hahn instituted the instant action in assumpsit to recover no-fault benefits under the provisions of the Pennsylvania No-Fault Motor Vehicle Insurance Act, 40 P.S. § 1009.101 et seq. Specifically, Hahn sought the payment of unlimited medical benefits as provided under the Act. Liberty Mutual and Boston Old Colony filed preliminary objections to the complaint which were sustained with direction to amend. Following the filing of the amended complaint, the insurers again filed preliminary objections, and by order of court Hahn’s complaint for no-fault benefits under the Pennsylvania Act was dismissed without prejudice for him to claim no-fault benefits under the New York No-Fault Act, N.Y.Consol.Stat., Title 27, Insurance Law, §§ 670-678. Subsequently, the insurers filed an answer and new matter.

At the close of the pleadings, Hahn filed a motion for summary judgment to determine as a matter of law which insurer was responsible as the primary obligor for payment of no-fault benefits and in what amount. Boston Old Colony filed its own motion for judgment on the pleadings alleging that Liberty Mutual was the responsible insurer for no-fault benefits. At issue was whether Hahn was entitled to unlimited medical benefits as is provided under the Pennsylvania Act or whether he was limited to a maximum of $50,000.00 in medical benefits as provided under the New York Act. Following the submission of briefs and oral argument, the trial court en banc granted both motions holding that Liberty Mutual was the primary obligor to Hahn for no-fault benefits. The trial court also held that while New York law applied in the instant case, Hahn was entitled by the New York Act to receive unlimited medical benefits. Following the entry of judgment, Liberty Mutual filed a timely appeal, and after which Boston Old Colony filed a timely cross-appeal.

Liberty Mutual raises the following issues for our review: 1) Whether the trial court erred in granting Hahn’s motion for summary judgment because the case was not ripe for summary judgment; 2) Whether the trial court erred in finding that Liberty Mutual was the primary obligor for no-fault benefits; and 3) Whether the trial court erred in finding that coverage under the Liberty Mutual policy extended to Matthew Hahn. Both Liberty Mutual and Boston Old Colony raise the following final issue for our review: Whether the trial court erred in holding that the New York No-Fault Act permitted Hahn to recover unlimited basic loss medical benefits instead of being limited to the $50,-000.00 maximum under the New York Act? For the following reasons, we affirm.

Liberty Mutual first contends that the instant case is not ripe for summary judgment because: 1) the record does not establish that Matthew Hahn has incurred more than $50,000.00 in medical expenses and, 2) that the instant case raises conflict of law questions between Pennsylvania and New York that must be first resolved by the trial court. This argument is meritless.

Liberty Mutual somehow contends that Matthew Hahn can only litigate the issue of his entitlement to unlimited medical benefits if he has first exceeded the $50,000.00 ceiling for such benefits under the New York law. However, the issues in the instant case are strictly ones of law. The issues are: who owes coverage and in what amount? There is no contention that Matthew Hahn is not entitled to the payment of no-fault medical benefits. It would not matter in our decision as to what dollar amount Hahn has incurred in medical expenses because he is or is not entitled to receive unlimited benefits as a matter of law. We can find no reason why he would have to incur some dollar figure of medical expenses before we could resolve this question.

Second, contrary to the assertions of Liberty. Mutual there is no conflict of laws question in the instant case because the Pennsylvania No-Fault Act clearly and unambiguously provides that basic loss benefits available to a victim shall be determined in accordance with the provisions of the No-Fault Act in effect in the victim’s state of domicile at the time of the accident. 40 P.S. § 1009.-110(c)(1). Since the issues presented are those dealing with Hahn’s entitlement to basic loss medical benefits, our legislature requires that we look to the law of the State of New York to determine the issues at hand. Thus, the instant case was ripe for summary judgment and is properly before this court on appeal.

Liberty Mutual next contends that the trial court erred in finding that it, and not Boston Old Colony, was the primary obligor for the payment of 'basic loss benefits to Matthew Hahn and also finding that the language of the Liberty Mutual policy encompassed coverage for Hahn even though he was not expressly named as an insured under the policy. First, the record is clear that Liberty Mutual was the insurer of the rental car driven by Hahn at the time of the accident and that Boston Old Colony insured the car of Hahn’s mother. The trial court held that New York law places primary responsibility for the payment of first party no-fault benefits on the insurer of the vehicle not the individual, unlike Pennsylvania law. Accordingly, the trial court held that Liberty Mutual was the primary obligor since it insured the vehicle Hahn was driving at the time of the accident. An examination of New York law shows the trial court to be correct.

In Ohio Casualty Ins. Co. v. Continental Ins. Co., 101 Misc.2d 452, 421 N.Y.S.2d 317 (1979), a New York court concluded that insurance under the New York No-Fault Act is designed to follow the vehicle rather than the injured party for the purpose of determining the insurer responsible for no-fault benefits. In Ohio Casualty the victim was a Pennsylvania resident injured while a passenger on a bus involved in an accident in New York. The bus was owned by a Maryland corporation and insured under a no-fault policy issued in Maryland. The victim did own a automobile which was insured by a policy issued in Pennsylvania. After examining New York law the Ohio Casualty court concluded that the insurer of the bus was the primary obligor for the payment of first party no-fault benefits to the victim.

A similar situation exists in the instant case. Matthew Hahn was injured while driving in a rental vehicle insured by Liberty Mutual. While Hahn did not own a motor vehicle at the time of the accident he was covered as a relative under his mother’s policy of no-fault insurance issued on her personal vehicle. Since coverage follows the vehicle and not the insured, Hahn then must first look to the insurer of the vehicle, Liberty Mutual, and not his mother’s insurer, Boston Old Colony. Accordingly, this argument of Liberty Mutual is dismissed.

Liberty Mutual also contends that Hahn is covered under the Boston Old Colony policy because the language of its policy issued to the rental car agency excludes Hahn from the definition of a person eligible to collect benefits under the policy. Liberty Mutual contends that under its policy only an “eligible injured” is entitled to coverage. That term is defined in the policy as the named insured or relative who sustains injury arising out of the use of a motor vehicle or any other person who sustains an injury arising out of the use or operation of the insured’s motor vehicle within the State of New York while not occupying another motor vehicle. Liberty Mutual argues that since Hahn is not the named insured or a. relative then Hahn must qualify as “any other person”. However, Liberty Mutual contends that Hahn would only qualify as “any other person” if he were operating the rental vehicle in New York at the time of the accident. Since the policy excludes operation of the vehicle outside New York to qualify for coverage Liberty Mutual concludes that Hahn is not an insured under its policy and thus must look to his mother’s insurer, Boston Old Colony, for basic loss benefits. The trial court rejected this argument. After a review of New York law we find that the trial court was correct.

An examination of New York law reveals that the New York courts have rejected the kind of restrictive interpretation of insurance policies that Liberty Mutual asks this court to adopt. In Fidelity and Casualty Co. of New York v. Russell, 31 App.Div.2d 4, 294 N.Y.S.2d 377, aff'd 26 N.Y.2d 678, 308 N.Y.S.2d 399, 256 N.E.2d 550 (1968), a corporation leased taxicabs to a taxicab operator. The taxicabs were insured under a policy issued to the lessor corporation. Subsequently, employees of the lessee operator became involved in accidents and the insurer of the taxicabs refused to defend damage claims because the lessee operator and its employees were not named insured under the policy. The Russell court rejected this narrow interpretation of the insurance policy. The court found that despite the fact that the lessee and its employees were not named insureds under the policy, the policy was intended to insure against the operational risks inherent in taxicabs, including motor vehicle accidents of the drivers. Accordingly, the court held that the policy must reasonably be read to extend to the lessee and its employees. The Russell court stated as follows:

We do not find an insurance contract to be so sacrosanct that its literal language must be followed to the extent of excluding the very risk it factually intended to insure. It appears that the proper remedy of the company would be in regard to seeking its appropriate additional premium, if any, rather than the avoidance of risk.

294 N.Y.S.2d at 381.

We find the analysis of the Russell case to be applicable to the instant facts. Liberty Mutual by insuring the rental vehicle can only have intended to insure not only the owner lessor but the lessees of the vehicles as well. This is apparent from Liberty Mutual’s admission that Matthew Hahn would have been covered under the policy if the accident occurred in New York. However, when Matthew Hahn rented the vehicle in question he was never told that coverage from the policy on the vehicle would extend only as far as the New York border nor was he prohibited under the rental agreement from driving the vehicle out of New York. The rental car company and Liberty Mutual can reasonably have anticipated that some rental vehicles would be operated outside the State of New York and thus the policy was written to exclude a risk that the policy intended to insure against, namely the operation of rental vehicles by lessees. As the Russell court held we find that it would bé more appropriate in this case for Liberty Mutual to charge an additional premium to cover out-of-state usage of the rental vehicles rather than exclude such coverage. In the instant case Matthew Hahn was a person that the policy intended to insure and Liberty Mutual cannot evade coverage based on a literal reading of its policy.

The final issue for our review raised by both insurers involves an interpretation of Section 672(5) of the New York Comprehensive Automobile Insurance Reparations Act, or the New York No-Fault Act, N.Y.Consol.Stat., Title 27, § 672(5). While this issue has never been addressed by an appellate court of this Commonwealth the issue has been addressed in the New York state courts and the Pennsylvania federal courts and it is to those cases which we look for guidance.

In the instant case Matthew Hahn, a New York resident, was injured in an accident in Pennsylvania. In this situation Pennsylvania law clearly provides, as previously noted, that New York law would apply to determine the amount of benefits the victim would receive under no-fault. However, when we look to the New York No-Fault Act it provides that every New York motor vehicle owner’s policy of insurance is deemed to provide that when the vehicle is operated in another state the insurance coverage for said vehicle shall be at least in the minimum amount of coverage required for such vehicle by the laws of that state. N.Y. Consol.Stat., Title 27, § 672(5). This is significant since the New York act limits basic loss medical benefits available to a victim to $50,000.00. Hahn contends here, as he did below, that Section 672(5) of the New York act must be read as providing the minimum coverage of no-fault as required by Pennsylvania, one item of which is unlimited medical benefits. Liberty Mutual and Boston Old Colony take the position that Section 672(5) applies only to liability insurance and not no-fault insurance. Our review of the cases which have interpreted Section 672(5) lead us to conclude, as did the lower court, that Hahn’s interpretation of the Act is the correct one.

In Country-Wide Ins. Co. v. Rodriguez, 80 App.Div.2d 130, 437 N.Y.S.2d 674, aff'd. 55 N.Y.2d 162, 448 N.Y.S.2d 135, 433 N.E.2d 118 (1982) the New York courts were faced with interpreting Section 672(5). In Rodriguez a New York resident was injured while a passenger in a New York owned and insured car involved in a two-car accident in North Carolina. The passenger brought suit against both the New York and North Carolina drivers involved in the accident, which resulted in a verdict of $100,000.00 with the New York driver found 60% negligent and the North Carolina driver found 40% negligent. On the basis of the above judgment the passenger demanded $15,000.00 from the insurer of the New York vehicle. The insurer refused to pay the full $15,000.00 arguing that it was only liable for the policy limits on the New York car or $10,000.00. The passenger contended that she was entitled to the $15,000.00 under Section 672(5) since the minimum amount of liability coverage in North Carolina was $15,000.00. The Rodriguez court agreed with the passenger’s interpretation.

The Rodriguez court held that Section 672(5) clearly mandates the North Carolina minimum of liability coverage of $15,000.00 applied under the New York policy. The court found that when a New York insured vehicle is operated in another state the policy of New York insurance is deemed to meet the minimum liability requirements of the other state. The insurer had attempted to argue that Section 672(5) was intended to apply only to non-New York residents injured by New York residents outside the State of New York. This argument was rejected and the passenger was permitted to recover the $15,000.00.

Liberty Mutual and Boston Old Colony concede that Rodriguez is a proper interpretation of Section 672(5). However, the insurers believe that Section 672(5) should be limited to liability insurance. Conversely, Hahn argues that Section 672(5) should be extended to apply to basic loss no-fault benefits as well and cites Wierbinski v. State Farm Mut. Auto. Ins. Co., 477 F.Supp. 659 (W.D.Pa.1979) in support. A review of that decision leads us to believe that Wierbinski is also a proper interpretation of Section 672(5).

In Wierbinski a New York domiciliary owned an automobile insured under a policy of no-fault insurance issued in New York. The New York domiciliary was subsequently injured in a one-car accident in Pennsylvania. After examining the New York No-Fault Act the Wierbinski court concluded that the only logical interpretation of Section 672(5) was that it raises the limits of liability and the kinds of coverage afforded by a New York owner’s policy to meet any higher requirements of a no-fault state in which an accident occurs. Thus, the New York domiciliary was entitled to unlimited medical benefits provided by the Pennsylvania No-Fault Act. The court clearly stated that its decision was based on New York law and the applicable insurance policy and not solely because the accident occurred in Pennsylvania. We find the rationale of Wierbinski to be persuasive and thus adopt it as precedent in this Commonwealth.

The argument of Liberty Mutual and Boston Old Colony that Section 672(5) applies only to liability insurance not no-fault coverage is meritless in light of an overall reading of the New York No-Fault Act. The very title of the New York act, “The Comprehensive Automobile Insurance Reparations Act” clearly reveals the intent of the New York legislature to enact a scheme of both liability and no-fault insurance. This becomes apparent when one reviews the text of the Act. Section 672(5) is an integral part of the Act and there is nothing explicit in the Act which would indicate that it applies only to liability coverage and not to basic loss benefit coverage.

The insurer-Appellants also cite this Court’s decision in Toter v. Knight, 278 Pa.Super. 547, 420 A.2d 676 (1980) in support of its argument that the New York maximum of $50,000.00 in medical benefits applies and not the unlimited benefits of the Pennsylvania Act. However, a close reading of Toter reveals that it is consistent with the holding in the instant case.

In Toter the issue was whether New Jersey or Pennsylvania law applies with regard to the right to sue in tort for an injury covered under no-fault. In that case a New Jersey resident was injured in an accident in Pennsylvania. At the time of the accident the tort threshold in New Jersey was $200.00 while the Pennsylvania threshold was $750.00. The New Jersey resident contended that the law of his domicile should apply with regard to the threshold amount. This Court agreed in light of the specific provision in the Pennsylvania act stating that the right to sue in tort for an injury under the No-Fault Act is governed by the law of the victim’s domicile, that being New Jersey. The Toter court also found that New Jersey law would govern the amount of basic loss benefits owed. We agree. However, our holding in the instant case goes one step beyond Toter in that we have found that when the state law of the victim’s domicile, New York, provides that benefits are deemed to be at least in the minimum as the state in which the accident occurred, Pennsylvania, then we are bound by the other state’s law to award no-fault benefits available under the Pennsylvania act. Thus, we are not applying Pennsylvania law but rather the law of New York.

Accordingly, for all the foregoing reasons the judgment of the trial court is affirmed.

Judgment affirmed.


author: CERCONE, Judge:

text:
    485 A.2d 836
    MATT LAMB & SONS, INC. v. CHRISTIAN SCHMIDT BREWING COMPANY, William H. Pflaumer & Sons, Inc., William H. Pflaumer, Robert Pflaumer. Appeal of CHRISTIAN SCHMIDT BREWING COMPANY and William Pflaumer Appeal of WILLIAM H. PFLAUMER & SONS, INC. and Robert Pflaumer
    (at No. 3081). (at No. 3082).
    Superior Court of Pennsylvania.
    Argued June 27, 1984.
    Filed Dec. 14, 1984.

      Richard S. Watt, Norristown, for appellants (at No. 3081) and appellees (at No. 3082).
    John S. Halsted, West Chester, for appellant (at No. 3082) and for appellees (at No. 3081).
    Norman P. Zarwin, Philadelphia, for Matt Lamb, appellee.
    Before OLSZEWSKI, POPOVICH and CÉRCONE, JJ.
   CERCONE, Judge:

The Pennsylvania Liquor Code, 47 P.S. § 4-431(d)(4) (Supp:1984-85) vests jurisdiction and the power to enjoin in the court of common pleas any termination of a franchise or agreement between a malt and brewed beverages manufacturer and its distributor, subject to certain exceptions. Appellee Matt Lamb and Sons, Inc. (Lamb) sought an injunction against appellant Christian Schmidt Brewing Company, et al. (Schmidt) to prevent Schmidt’s attempted termination of certain distribution rights of Lamb. The chancellor in equity, Hon. Leonard Sugerman, granted a preliminary injunction and, after a hearing, continued the injunction until final hearing. Schmidt appealed the continuation of the injunction pursuant to Pa.R.A.P. 311(a)(4), Interlocutory Appeals as of Right.

Schmidt raises three issues on appeal. (1) Whether the court of common pleas has jurisdiction under the section of the Liquor Code, supra, to enjoin termination of an agreement between a manufacturer and a distributor; (2) whether Lamb clearly established that its status was not terminated for good cause; (3) whether Lamb established that an award of damages would be inadequate to compensate Lamb sufficient to show that an injunction should issue.

The facts underlying this cause of action are contained in the chancellor’s opinion and are as follows:

“At all relevant dates, Schmidt, a Pennsylvania corporation with its principal office in Philadelphia, Pennsylvania was and remains a manufacturer of malt and brewed beverages, licensed as such by the Pennsylvania Liquor Control Board (‘PLCB’), pursuant to the Liquor Code, 47 P.S. §§ 1-101, et seq. (‘The Code’). At the same dates, Lamb, a Pennsylvania corporation, as well, with its principal office in Chester County, Pennsylvania, was and remains a distributor of malt and brewed beverages, licensed as such by the PLCB pursuant to The Code.

“By letter agreement dated December 30, 1963, executed on January 3, 1964, Schmidt constituted Lamb a ‘primary’ or ‘original’ supplier of certain of Schmidt’s products in a designated territory encompassing sections of Chester, Lancaster and Berks Counties. [It is undisputed that Lamb has been a distributor of Schmidt’s products, under various letter agreements, since at least 1934.] Such agreement was made pursuant to The Code, § 4-431, permitting a Pennsylvania manufacturer to constitute a licensed distributor as the primary or original supplier of its products within a designated geographical area.

“A distributor who has been constituted a primary or original supplier by a manufacturer enjoys a competitive advantage within its designated geographical area, as the manufacturer’s products may only be sold through the primary supplier, and other distributors who wish to sell the manufacturer’s products within the primary supplier’s designated territory are required to purchase such products from or through the primary supplier.

“In any event, subsequent to the execution of the letter agreement of December 30, 1963, Lamb continued to distribute Schmidt’s products within its designated territory [In 1981, Lamb purchased additional territory in Chester County from another of Schmidt’s primary suppliers.] as a primary supplier without incident until The Code was amended in 1980. The amendment enacted June 22, 1980, to become effective on August 22, 1980, inter alia, added subsections (d)(1), -(4), and -(5), to Section 4-431 of The Code, and provided:

‘(d)(1) All distributing rights as hereinabove required shall be in writing, shall be equitable in their provisions and shall be substantially similar to terms and conditions with all other distributing rights agreements between the manufacturer and giving such agreement and its other importing distributors and distributors shall not be modified, canceled, terminated or rescinded by the manufacturer without good cause, and shall contain a provision in substance or effect as follows: “The manufacturer recognizes that the importing distributor and distributor are free to manage their business in the manner the importing distributor and distributor deem best and that this prerogative vests in the importing distributor and distributor the exclusive right to establish a selling price, to select the brands of malt or brewed beverages they wish to handle and to determine ■ the efforts and resources which the importing distributor and distributor will exert to develop and promote the same of the manufacturer’s products handled by the importing distributor and distributor. However, the manufacturer expects that the importing distributor and distributor will price competitively the products handled by them, devote reasonable effort and resources to the sale of such products and maintain a reasonable sales level.” “Good Cause” shall mean the failure by any party to an agreement, without reasonable excuse or justification, to comply substantially with an essential, reasonable and commercially acceptable requirement imposed by the other party under the terms of an agreement.
(4) The court of common pleas of the county wherein the licensed premises of the importing distributor or distributor are located is hereby vested with jurisdiction and power to enjoin the modification, rescission, cancellation or termination of a franchise or agreement between a manufacturer and an importing distributor or distributor at the instance of such importing distributor or distributor who is or might be adversely affected by such modification, rescission, cancellation or termination, and in granting an injunction the court shall provide that no manufacturer shall supply the customers or territory of the importing distributor or distributor by servicing the territory or customers through other importing distributors or distributors or any other means while the injunction is in effect: Provided, however, That any injunction issued under this subsection shall require the posting of sufficient bond against damages arising from an injunction improvidently granted and a showing that the danger of irrevocable loss or damage is immediate and that during the pendency of such injunction the importing distributor or distributor shall continue to service the accounts of the manufacturer in good faith.
(5) The provisions of this subsection shall not apply to Pennsylvania manufacturers whose principle place of business is located in Pennsylvania unless they name or constitute a distributor or importing distributor as a primary or original supplier of their products subsequent to the effective date of this act, or unless such Pennsylvania manufacturers have named or constituted a distributor or importing distributor as a primary or original supplier of their products prior to the effective date of this act, and which status is continuing when this act becomes effective.’

“Apparently in anticipation of the effective date of the amendment to The Code, Schmidt, on August 11, 1980, forwarded a proposed new' letter agreement to Lamb purporting to cancel the letter agreement of December 30, 1963, and designating Lamb as a ‘secondary importing distributor’ of Schmidt’s products, and designating itself as primary or original supplier of Schmidt’s products. Lamb’s president executed the letter agreement on August 27, 1980, in the belief that the revised agreement would work no substantive alteration of the Lamb-Schmidt relationship.

“Apparently, Lamb’s belief was well founded as the relationship remained the same for some time thereafter. Following execution of the letter agreement dated August 11, 1980, and notwithstanding the same, Lamb continued to purchase Schmidt’s products directly from Schmidt and to the knowledge of Lamb’s president, Schmidt did not sell directly to any other purchasers in Lamb’s territory.

“On March 17, 1982, Lamb’s president met with one Robert Pflaumer, chief executive officer of William H. Pflaumer & Sons, Inc. and others. Robert Pflaumer is the son of William H. Pflaumer, who in turn is chairman of the board of Schmidt. William H. Pflaumer & Sons, Inc.’s sole stockholder is Janet Pflaumer, mother of Robert and William’s wife. During the course of the meeting, Lamb’s president was advised by William H. Pflaumer & Sons, Inc.’s marketing director that the latter company had been granted the distribution rights in the five-county Philadelphia area for a new product about to be marketed by Schmidt known as ‘Schmidt’s Golden Classic’ beer, and that Lamb could obtain the right to distribute Golden Classic in Chester County if Lamb agreed to purchase all other Schmidt’s products from William H. Pflaumer & Sons, Inc., rather than purchasing such products directly from Schmidt, as theretofore. A few days thereafter, Lamb rejected Pflaumer’s proposal, and told the company that although Lamb would be willing to further discuss the proposed purchase of Golden Classic from Pflaumer, Lamb was satisfied with its relationship with Schmidt and wished to continue to purchase other Schmidt’s products directly from Schmidt as before.

“Approximately four weeks thereafter, on April 12, 1982, Schmidt forwarded a letter to Lamb citing alleged deficiencies in the operation of Lamb’s distributorship, all asserted violations of the conditions set forth in the letter agreement of August 11, 1980. In the letter of April 12, 1982, Schmidt threatened to terminate the letter agreement of August 11, 1980, within 90 days unless the alleged deficiencies were corrected by Lamb. Lamb responded to Schmidt on April 28, 1982, advising Schmidt that those deficiencies which did exist had been corrected. A further exchange of letters occurred concerning the alleged deficiencies, and on July 12, 1982, Schmidt advised Lamb’s counsel, by letter, that as the alleged deficiencies had not been corrected to Schmidt’s satisfaction, the letter agreement of August 11, 1980, constituting Lamb a secondary importing distributor was canceled as of July 16, 1982.”

Initially we note that our scope of review of preliminary injunctions is limited to whether there were any apparently reasonable grounds for the action of the court below. Only if no grounds exist to support the decree of a court of equity, so that a court’s ruling was palpably • erroneous or a misapplication of the law, will an appellate court disturb the decision. Wolf v. Baltimore, 250 Pa.Superior Ct. 230, 378 A.2d 911 (1977).

We turn our attention to appellants’ first contention that Schmidt is not to be subject to the control of the common pleas court because it is a Pennsylvania manufacturer under subsection 4-431(d)(5). The significance of that section is that the “good cause” requirement of subsection 4-431(d)(4), which is enjoinable if not followed, does not apply to Pennsylvania manufacturers

(a) “unless they name or constitute a distributor or importing distributor as a primary or original supplier of their products subsequent to the effective date of this act,” or
(b) “unless such Pennsylvania manufacturers have named or constituted a distributor or importing distributor as a primary or original supplier of their products prior to the effective date of this act, and which status is continuing when this act becomes effective.”

Appellants contend that they admittedly sought to avoid the strictures of the amendment to the Liquor Code which set forth the “good cause” requirement by sending the August 11, 1980, letter nine days before the effective date of the amendment. That letter purported to change Lamb to a “secondary” distributor; thus, claim appellants, they could terminate Lamb as a distributor on an “at-will” basis.

Not so, held the chancellor. He found that, regardless of what the letter attempted to do, the subsequent relationship of the parties spoke louder than the words. The parties agree that the relationship was basically the same. Under the principle that parties to a written contract may modify, alter, repudiate, rescind or abandon it by subsequent words or conduct, Consolidated Tile and Slate Co. v. Fox, 410 Pa. 336, 189 A.2d 228 (1963), the chancellor found that the letter agreement of August 11, 1980, really had no effect on the status of Lamb as a primary distributor.

Appellants take issue with this and claim that, while the day to day business dealings of the parties did not change, that their legal relationship was different. Indeed, they argue, they should not be penalized for choosing to preserve the flexibility they possessed before the adoption of the amendment to cancel their relationship with distributors for any reason and at any time rather than to submit to the “good cause” requirement. We would accept this' argument and grant them the literal meaning of their August 11, 1980, letter, if the letter did accomplish what it claimed. However, even Schmidt agrees that the relationship between the parties was substantially the same prior to and after the letter, which Lamb signed in acceptance. Lamb, in fact, testified that he accepted the purported new arrangement only because of assurances that it would not change things.

In Atlantic Richfield Co. v. Razumic, 480 Pa. 366, 390 A.2d 736 (1978), the court held that the performance of the parties under an agreement is always a relevant indication of what a writing means. There the question was whether an agreement was a lease or a franchise, which determination controlled Arco’s method of termination. In concluding that it was a franchisee, the court considered the uncontradicted testimony of the franchise as-to performance under the- agreement.

All this uncontradicted evidence of performance demonstrates Arco’s control over the quality of products and services Razumic offered to the public. Moreover, this evidence, perhaps the strongest indication of what the writing means, Restatement (Second) of Contracts, supra at § 228(4) (course of performance always relevant in interpreting writing); cf. Uniform Commercial Code, Act of April 6, 1953, P.L. 3, § 2-202(a) & 2-208, 12A P.S. §§ 2-202(a) & 2-208 (1970) (same rule applies to writing evidencing sale of goods), confirms our conclusion that the Razumic-Areo service station operation was a franchise enterprise.
Id., 480 Pa. at 376, 390 A.2d at 741. (footnote omitted).

So also is this true in the instant case. Thus, because Lamb continued to purchase products directly from Schmidt and with virtually no change in the parties’ relationship, despite the letter designating Lamb a “secondary importing distributor” we hold that Lamb continued to be “named and constituted” a primary distributor, by Schmidt thus triggering the “good cause” requirement for their termination by Schmidt as such. This in turn brings the instant controversy within the jurisdiction of the court of common pleas, pursuant to 47 P.S. § 4-431(d)(4).

The next issue to be addressed is whether Schmidt has shown the required “good cause” in terminating its agreement with Lamb on July 16, 1982. As quoted above, “good cause” in § 4-431(d)(1) of the Liquor Code is defined as

the failure by any party to an agreement, without reasonable excuse or justification, to comply substantially with an essential, reasonable and commercially acceptable requirement imposed by the other party under the terms of an agreement.

We agree with the chancellor that the termination of the agreement by Schmidt was not for good cause.

On April 12, 1982, the vice president for sales of Schmidt’s sent a letter to Lamb which listed five deficiencies to substantiate the termination. They were described as violations of the Secondary Importing Distributor Agreement of August 11, 1980.

(1) Failure to use your best efforts to obtain maximum distribution and sales of Schmidt brands in your assigned territory. (Regular sales meetings are not conducted, there is no market plan, there are no goals or objectives set.)
(2) Failure to make maximum use of product identification and awareness to the extent possible or permissible by regulatory authorities. (Drivers not in uniform, poor use of point-of-sale, e.g., illuminated light draught signs.)
(3) Your failure to call on and cultivate all trade outlets in your area.
(4) Failure to participate in permissible Schmidt sales promotion activities and programs.
(5) Failure to maintain adequate sales records. (Account and package distribution records not up to date.)

The chancellor found, based on the testimony of both William C. Lamb, Jr., president of Lamb, and Robert Pflaumer, son of William H. Pflaumer, the chairman of the board of Schmidt’s, that these allegations were largely unsubstantiated; they were either corrected by Lamb upon being apprised of them, unexplained by Schmidt’s, which fact prevented their improvement, or nonexistent. Thus, because the five asserted deficiencies were adequately refuted by the record, we agree with the chancellor that “good cause” was wanting in this case.

Finally, Schmidt challenges Lamb’s resort to equity and asserts that money damages pursuant to an assumpsit action would just have adequately compensated Lamb. The chancellor found that Lamb would lose 35% of its most profitable business, 21% of gross sales, and $75,000 to $100,000 in gross profit if its role as primary distributor of Schmidt’s products were terminated and if it were forced to purchase as a secondary distributor. Moreover, Lamb testified that it would be required to lay off one-third of its personnel, remove one or two trucks from its fleet of seven trucks, and incur the expense of unused overhead. The findings of the chancellor are supported by the record. This constitutes immediate and irrevocable loss or damage, as required by § 4-431(d)(4) of the Liquor Code.

As for Schmidt’s contention that injunctive relief was unnecessary and that a suit in assumpsit was Lamb’s proper remedy, we need only refer once again to the guidance afforded us by the legislature in the Liquor Code itself. The clear and unambiguous wording of the Code may not be ignored and it may not be given an unreasonable interpretation. In re Restaurant Liquor License of DeAngelis, 183 Pa.Superior Ct. 388, 133 A.2d 266 (1957); Statutory Construction Act of 1972, 1 Pa.C.S.A. § 1921(b). There, injunctive relief is specifically sanctioned as the means through which a wronged distributor may obtain redress. And, looking to the nature of the injury claimed, that of damages occasioned by the destruction of an ongoing relationship, this court is at a loss as to how damages could be apportioned in an assumpsit action. Moreover, appellant has not persuaded us that equity is an inappropriate forum.

Therefore, order affirmed.

POPOVICH, J., concurred in the result.

      . A brief, amicus curiae, was submitted by the Malt Beverage Distributors Association of Pennsylvania, Inc.

      . The letter agreement also contained the following conditions:
      "Your firm shall:
      1. provide and maintain effective management of its business at all times, including back up personnel qualified to operate it when and for as long as necessary, and
      2. use its best efforts to obtain maximum distribution and sales of Schmidt brand(s) in its territory by being competitive and aggressive, and
      3. regularly call on, and cultivate all trade outlets in its area, and
      4. maintain an adequate inventory, both packaged and draft of Schmidt brand(s) purchased at regular intervals, and
      5. engage in proper stock rotation procedures of which it is advised in order to keep the product fresh at all times in its warehouse and in retail outlets in accord with overage product standards published from time to time by Schmidt, and
      6. maintain adequate facilities and equipment to service its brand(s) including sufficient space within its warehouse for the proper handling, storage and safekeeping of Schmidt’s returnable bottles, cases, pallets, slipboards and cooperage, and
      7. make maximum use of product identification and awareness to the extent permissible by regulatory authorities — signs, trucks, uniforms, use and placement of point of sale, and merchandising materials, and
      8. retain a designated Brand manager at your sole cost and expense where deemed necessary by Schmidt, and in addition thereto, in any event, retain a sufficient number of sales personnel whose services will be utilized to provide the proper support for the Schmidt brand(s) in the manner contemplated hereby, and
      9. respect, honor, and cooperate with Schmidt policies, and
      10. participate in permissible Schmidt sales promotion programs and activities, and
      11. maintain adequate sales records by customer and by brand and afford to Schmidt the right, at its sole expense, to designate a representative to examine such sales during normal business hours.”

      . § 4-431(d)(4) sets forth the standards for the issuance of injunctive relief in the context of the termination of a distribution agreement under the Liquor Code. The court of common pleas is vested with the jurisdiction to enjoin the termination where the distributor "is or might be adversely affected by such ... termination, ... upon a showing that the danger of irrevocable loss or damage is immediate.”

      . Lamb notified Schmidt two weeks after the letter listing the deficiencies that all uniformed personnel now bore Schmidt identification. As to Lamb’s failure to use "point-of-sale" material, Lamb was made aware of only one item, Schmidt’s clocks, and after being informed, he took steps to move them out.

      . Schmidt never advised Lamb concerning the unacceptability of a detailed marketing plan and market analysis which Lamb had submitted.

      . The third assertion was completely refuted by the record in that three salespersons are employed by Lamb to attempt to increase sales. The fourth assertion, regarding Lamb’s lack of participation in promotions was also refuted by the record, including a story in Schmidt’s own newspaper which described William Lamb in glowing terms. The fifth assertion was unsubstantiated.


author: ROWLEY, Judge:

text:
    485 A.2d 1118
    CONSOLIDATION COAL COMPANY, a corporation, Appellant, v. DISTRICT 5, UNITED MINE WORKERS OF AMERICA, an unincorporated association; William Allen, Daniel Kuwalo, Larry Cani, Mike Kuzma, Ron Stipanovich, George Paxon, Jr., Joe Rostcheck, Ray Machusko, Paul Machusko, Robert Corey, Joe Sarso, Jack Schmitt, Patrick Niedemeyer, Robert Paul, James Lacko, Thomas Taylor, individuals.
    Superior Court of Pennsylvania.
    Argued April 12, 1984.
    Filed Nov. 30, 1984.

      Leonard Fornella, Pittsburgh, for appellant.
    Ronald G. Backer, Pittsburgh, for appellees.
    Before ROWLEY, JOHNSON and POPOVICH, JJ.
   ROWLEY, Judge:

This is an appeal from an Order granting the appellees’ preliminary objections and dismissing the appellant’s complaint. In May of 1981, appellant, the Consolidation Coal Company, filed a complaint in equity requesting an injunction against (1) the International Union, United Mine Workers of America, (2) District No. 5, United Mine Workers of America, (3) Larry Cani, and (4) all those acting in concert with them. A preliminary injunction was granted which prohibited the appellees from picketing in any manner that would interfere with the business of the appellant. A hearing for a permanent injunction was then scheduled for September 15, 1981. The picketing on appellant’s premises ceased shortly after the preliminary injunction had been granted, so the appellant filed a motion, on September 10, 1981, to withdraw the request for a permanent injunction. The trial judge granted this motion, noting on the Order that the action was being “dismissed as moot.” Reproduced Record at 271. In March of 1982, however, appellant initiated a new action, based on the same incident, requesting compensation for damages resulting from the appellees’ alleged tortious interference with the appellant’s contractual relations. Appellees filed preliminary objections to which the appellant filed an answer. The trial court then heard oral arguments. The trial judge acting on his own initiative, asked whether the damages action should be precluded because of the prior equity action. He concluded that the dismissal of the equity complaint barred the appellant’s subsequent suit for damages, since the equity court had the power to hear a claim for damages and the appellant had failed to raise any such claim during the equity action. In addition to his conclusion that the appellant’s action for damages was precluded by the prior equity action, the trial court judge adopted three of the appellees’ preliminary objections as conclusions of law. This appeal, then, is from the order dismissing the appellant’s claim for damages and granting the appellees’ preliminary objections. We reverse and remand.

Appellant contends that the trial court erred in dismissing the damages action and in adopting the appellees’ preliminary objections as conclusions of law. Appellant raises five specific issues on appeal: 1) whether the trial judge had the authority to raise the issue of claim preclusion himself when the appellees themselves failed to raise this issue; 2) whether the dismissal of the equity action constituted a final judgment on the merits which would bar a subsequent civil action for damages; 3) whether the appellant’s state law claim for tortious interference with contract is preempted by federal law, thus depriving a state court of jurisdiction to resolve the dispute; 4) whether a permanent severance of an employment relationship must be shown before one can recover under a theory of tortious interference with contractual relations; and 5) whether the appellees’ conduct was privileged such that they are immune from a suit for damages arising out of their picketing.

I.

Appellant first contends that the trial judge erred in raising the claim preclusion on his own. The trial judge admits in his opinion that it was the court which raised this question first.

The appropriate procedure for raising a question of res judicata is contained in Pa.R.C.P. 1030. Res judicata is an affirmative defense which “shall be pleaded in a responsive pleading under the heading ‘New Matter.’ ” Pa.R.C.P. 1030. The appellees did not plead res judicata in this manner. Nor did the appellees specifically mention res judicata as one of their preliminary objections. Thus, it was procedurally incorrect for the trial judge to challenge appellant’s damages action after the appellees had failed to plead res judicata as an affirmative defense.

Despite this procedural defect, it would not serve judicial economy to end the inquiry at this juncture. If we were to remand this case at this point so that the parties could cure this procedural defect, this Court might have to review the substance of the same res judicata question at a later date. This type of dilemma existed in the case of Brown v. Hahn, 419 Pa. 42, 50, 213 A.2d 342, 346 (1965), wherein the Pennsylvania Supreme Court said:

Nothing is to be gained by sending the parties back to the trial court to set their procedural house in order before coming once again to this Court with the identical controversy.

See also Cattery, et al. v. Blythe Township Municipal Authority, 432 Pa. 307, 243 A.2d 385 (1968); Ziemba v. Hagerty, 214 Pa.Super. 381, 261 A.2d 342 (1969). Rather than to delay unnecessarily this appeal, then, we will not review the substance of the res judicata question here presented.

II.

Appellant maintains that it was error for the trial court to conclude that the dismissal of the equity action precluded the appellant from bringing a subsequent claim for damages arising out of the same incident. This Court has determined that an action at equity can have a res judicata effect upon a subsequent action at law:

Because an adjudication in equity is as conclusive as a judgment at law ... it is of no consequence that the earlier suit was brought in equity and the later action at law.

Exner v. Exner, 268 Pa.Super. 253, 257, 407 A.2d 1342, 1344 (1979).

An essential prerequisite to the application of the doctrine of res judicata, however, is that a valid and final judgment on the merits has been entered in a previous action. The res judicata doctrine is a judicial creation aimed at preventing a multiplicity of suits. It protects a party from the vexation of having to defend itself against a claim for which a final judgment has already been entered. Furthermore, it serves the public interest by keeping the courts clear of disputes that have, been decisively resolved. But as a matter of fairness to the party which believes it has a valid claim, the doctrine is not applied unless there in fact was a previous action in which the party did present, or had the opportunity to present, its claim. Hence, the general rule is that the doctrine of res judicata cannot be applied to preclude a claim absent a final judgment on the merits in a previous action. Bearoff v. Bearoff Brothers, Inc., 458 Pa. 494, 327 A.2d 72 (1974); General Accident Fire & Life Assurance Corp., Ltd. v. Flamini, 299 Pa.Super. 312, 445 A.2d 770 (1982).

The appellant’s damages action could only be precluded, therefore, if there had been a final judgment on the merits entered in the appellant’s equity action. In the equity action, the appellant was granted a preliminary injunction but withdrew its request for a permanent injunction hearing. The essential inquiry, then, is whether a preliminary injunction or the withdrawal of a request for a permanent injunction can constitute a final judgment on the merits which would preclude the appellant from bringing a second action for damages.

A preliminary injunction cannot serve as a judgment on the merits since, by definition, it is a temporary remedy granted until that time when the parties’ dispute can be completely resolved. Likewise, the fact that the request for a permanent injunction was withdrawn means that a full hearing, wherein the entire controversy could be resolved and final judgment entered, was never held. Thus, it is manifestly unjust to conclude that the appellant’s claim for damages is barred by the previous equity action, when that action was never fully litigated.

In their brief, appellees contend that there is a strong public policy in Pennsylvania against splitting a cause of action. Thus, appellee argues that the equity action should bar the action at law, since both proceedings arose from the same cause of action. What the appellees fail to appreciate, however, is the rationale that underlies this policy. A cause of action cannot be split into two separate claims since it is seen as inappropriate to drag a party through the litigation process twice. But when, as here, the first action is never fully litigated, a party is not subjected to the inconvenience of having to re-litigate. Furthermore, when a final judgment is not entered in the first action, a controversy remains for the courts to resolve. Thus, the underlying reasons for application of the res judicata doctrine are simply not present in the instant case.

In support of their argument that a cause of action cannot be split into two separate claims, appellees rely on examples in which a judgment on the merits was indeed entered in the first action. Appellees cite Spinelli v. Maxwell, 430 Pa. 478, 243 A.2d 425 (1968), for instance, for the proposition that in a trespass action, a party that recovers for damage to property cannot maintain a separate action to recover damages for personal injuries suffered. In Spinelli, however, the plaintiff recovered property damages only after an arbitration panel had granted him an award and the trial court had entered judgment on his behalf. Thus, in Spinelli, there was a full hearing on the merits wherein the plaintiff had the opportunity to raise all possible claims against the defendant.

Appellees also rely on the Restatement (Second) of Judgments, § 24, Illustration 19, as authority for the rule that an unsuccessful equity action can bar a subsequent action at law. That illustration concerns an out-of-state student who sued a state university because he was charged more for tuition than in-state residents are charged. The suit was commenced in equity to enjoin the university from billing him at the higher rate. The student lost, but filed a second action, at law, to recover a portion of the tuition that he had previously paid. The second action was dismissed, because law and equity courts have merged, and the student could have brought both claims in one action. The student’s failure to take advantage of this opportunity resulted in the loss of his legal claim. The illustration specifically states, however, that judgment was entered in the first action against the student after the court had determined that the higher billing rate for out-of-state students was not unconstitutional. Here again, a final judgment was entered after a full hearing on the merits. Hence, these examples do not support appellees’ position since the examples are factually dissimilar to the appellant’s situation. One cause of action cannot be split into two separate claims, each brought in a different proceeding, provided that a final determination was made in the first action which would preclude one from bringing the second action at a later date.

A case which is factually similar to appellant’s is Walworth Company v. United Steelworkers of America, 443 F.Supp. 349 (W.D.Pa.1978). Walworth and the United Steelworkers of America, AFL-CIO, were parties to a collective bargaining agreement. Walworth filed a complaint in equity to enjoin the defendants from continuing an allegedly illegal strike. But the strike ended shortly thereafter, and the parties entered into a stipulation of settlement and discontinuance. The court then dismissed the equity action with prejudice. When Walworth subsequently attempted to recover damages resulting from the work stoppage, the U.S. District Court ruled that the action at law was barred by the previous equity action. The Court specifically noted that the dismissal of the earlier suit “with prejudice” constituted a judgment on the merits. 443 F.Supp. at 351, note 1.

Appellant’s action for damages, on the other hand, was dismissed “as moot” by the trial court judge. The crucial distinction between the trial court judge’s Order of Dismissal in this case and the dismissal in Walworth is that the Walworth order contained the words “with prejudice.” The dismissal of an action with prejudice indicates that, as in Walworth, the dispute between the parties has been resolved and the court will not allow either party to commence a new action based on the same claim. Here, though, the appellant’s claim was not resolved in the equity action. Thus, the trial judge could not have dismissed the equity action with prejudice. The trial court judge did choose, though, to dismiss the equity action “as moot.” That an action is “moot” suggests that there is a legal issue involved in a case, but because of the circumstances surrounding the case, the issue has become an academic one and will not be resolved. What “mootness” does not suggest is that an issue was fully considered and a final judgment entered. Such judicial consideration would be necessary before the doctrine of res judicata could be applied to preclude appellant from bringing its claim for damages.

Another distinction to be drawn between the appellant’s case and Walworth is that there was a settlement of the first action in Walworth. When a party attempts to bring a claim arising out of a cause of action that was previously settled, that claim is merged in the previous agreement of settlement. Bearoff v. Bearoff Brothers, Inc., 458 Pa. 494, 327 A.2d 72 (1974). But here there is no evidence that the appellant in the instant case settled anything with the appellees. Rather, the appellant merely withdrew a request for a permanent injunction. The trial judge then dismissed the equity action “as moot.” There was no mention of a settlement. There was no mention of the action being dismissed with prejudice. A dismissal of an action without prejudice is not a determination of the merits of that action. Fannie v. Chamberlain Mfg. Corp., Derry Div., 445 F.Supp. 65 (W.D.Pa.1977).

In his opinion, the trial judge stresses that once a court obtains jurisdiction for an equity action, it may retain that jurisdiction to do complete justice between the parties. That is, a court hearing an equity claim has the power to hear related legal claims so that the entire dispute can be resolved in one judicial proceeding. The gist of the trial court’s decision, then, is that it had the ability to hear both equitable and legal claims and the appellant, failing to bring his claim for damages along with his request for an injunction, lost the opportunity to sue for damages when the equity action was dismissed as moot.

Certainly the trial court had the power to hear the claim for damages in addition to the request for injunctive relief. But this alone does not justify the conclusion that the dismissal of the equity action precludes the appellant from initiating an action for damages. Here the equity action was dismissed before the merits of the appellant’s claim were given thorough judicial consideration. Thus, the appellant did not have the opportunity to bring a claim related to the equity claim while the merits of the equity claim were being considered. A judgment on the merits was not entered in the equity action. Nor was there anything done in the equity action, such as a dismissal with prejudice, which could qualify as a judgment on the merits. Therefore, the res judicata doctrine cannot be applied to appellant’s case, as nothing was “formerly adjudicated.” Appellant is consequently entitled to proceed with its claim for damages arising from the appellees’ alleged interference with the appellant’s contracts.

After concluding that the appellant’s claim for damages was precluded by the previous equity action, the trial judge adopted the appellees’ preliminary objections, with appellees’ brief in support thereof, as conclusions of law. Before remanding this case, then, we will first consider the accuracy of those legal conclusions.

III.

The first of appellees’ preliminary objections which the trial court adopted as a legal conclusion was that the tort of intentional interference with contractual relations has been, in labor relations cases, preempted by federal law, thus depriving a state court of jurisdiction to hear a tortious interference claim which arises out of a labor dispute. Appellee claims to have derived this rule from the Wilkes-Barre Publishing Co. v. Newspaper Guild of Wilkes-Barre, Local 120, 647 F.2d 372 (3rd Cir.1981), case. But the holding in Wilkes-Barre is inapplicable here.

In Wilkes-Barre, the plaintiff publishing company sought to recover from certain members of a union who had encouraged several of the plaintiff’s employees, then on strike, to accept employment with another newspaper that was a competitor of the plaintiff. The plaintiff alleged that it had a collective bargaining agreement with the employees, and that anyone who induced the employees to breach the collective bargaining agreement was intentionally interfering with the plaintiff’s contractual relations. In deciding whether the tort claim should be governed by federal law, Judge Gibbons of the Third Circuit said:

The issue is not the nature of the remedy sought for the alleged violation, but whether the remedy sought may require that the court from which it is sought, state or federal, interpret a collective bargaining agreement.

Id. at 380. Thus, Wilkes-Barre, should not be read as standing for the proposition that any tortious interference claim that arises in the context of a labor dispute will be preempted by federal law. Instead, the holding in Wilkes-Barre means that a tortious interference claim, like any other state law claim, will be preempted if a state court would have to interpret a collective bargaining agreement in disposing of that claim.

The reason that appellant’s claim for tortious interference with contractual relations is not preempted by federal law is that the state courts do not have tó interpret a collective bargaining agreement in deciding whether the appellant deserves compensation. Appellant alleges that the appellees interfered with the employment contracts between the appellant and its “supervisory, executive, and clerical employees.” (Reproduced Record at 5a.) Since these employees are all non-union, a state court hearing this case would have no need to interpret a collective bargaining agreement between the appellant and the union. Since there is no need to interpret such an agreement, the trial court has jurisdiction to resolve this dispute.

Furthermore, shortly after the passage of the National Labor Relations Act, the United States Supreme Court established that state courts still have jurisdiction over labor disputes when the complaint alleges tortious conduct on the part of the picketers. In United Construction Workers v. Laburnum Construction Corporation, 347 U.S. 656, 663-664, 74 S.Ct. 833, 837, 98 L.Ed. 1025 (1954), the Supreme Court concluded: “[CJongress has neither provided nor suggested any substitute for the traditional state court procedure for collecting damages for injuries caused by tortious conduct.” Subsequently, in In ternational Union, United Automobile, Aircraft and Agricultural Implement Workers of America v. Russell, 356 U.S. 634, 641, 78 S.Ct. 932, 936, 2 L.Ed.2d 1030 (1958), the Supreme Court reaffirmed that the National Labor Relations Act did not “expressly or impliedly deprive the employer of its common law right of action in tort for damages.” In a case which appellees rely on in their brief, Billy Jack For Her, Inc. v. New York Coat, Suit, Etc., 511 F.Supp. 1180, 1183 (S.D.N.Y.1981), the Court emphasized in a footnote: “It is clear that federal labor law does not preempt state law to the extent state law proscribes violent picketing.”

That Congress intended for state courts to hear tort claims based on the violent conduct of picketers has also been recognized by Pennsylvania Courts:

[S]tate Courts do have the power to restrain violence, mass picketing and overt threats of violence and to preserve and protect public order and safety and to prevent damage even if, absent such conduct, the activities complained of would constitute unfair labor practices or protected activities over which the National Labor Relations Board would have jurisdiction. Altemose Construction Company v. Building and Construction Trades Council, 449 Pa. 194, 296 A.2d 504 (1972) ... State jurisdiction has prevailed in such instances because the compelling state interest, in the scheme of our federalism, in the maintenance of domestic peace is not overridden in the absence of clearly expressed congressional direction.

Capital Bakers, Inc. v. Local Union No. 464, etc., 281 Pa.Super. 384, 388, 422 A.2d 521, 523 (1980). Therefore, if the appellant can establish that the appellees did interfere with its contractual relations by means of threats and violent conduct, the appellant can recover damages in state court since the proper forum to hear cases involving violence intermeshed with picketing is clearly a state court.

Appellees also contend that if any cause of action arises out of the picketers’ conduct, that cause of action belongs to the individual employees rather than the appellant, a corporate entity. We disagree. Concluding that the tort cause of action belongs to the employees rather than the appellant would deny the appellant, and consequently the appellant’s shareholders, a remedy for damages suffered as a result of the appellees’ alleged tortious conduct. There is nothing which prevents the appellant itself from suing to recover damages. Indeed in United Construction Workers v. Laburnum Construction Corporation, supra, the corporation sued Union agents for interfering with the corporation’s employees as they attempted to complete a construction project. Similarly, here, the appellant has the right to maintain an action for damages caused to the corporation after the appellees allegedly interfered with the appellant’s employment contracts.

IV.

The second of the appellees’ preliminary objections which the trial court adopted as a conclusion of law concerns not jurisdiction, but the appellant’s ability to make out a prima facie case. The trial court concluded that the appellant could not proceed with its cause of action since it had not alleged that the appellees’ interference led to a complete severance of the contractual relationship between the appellant and its employees. However, appellant need not go so far as to show that its employment contracts were terminated as a result of the appellees’ interference to recover damages for the alleged tortious interference with appellant’s contractual relations.

Appellees are correct in stating that Section 766 of the Restatement (Second) of Torts, which defines the cause of action for intentional interference with contractual relations, is the standard that should be applied to this case:

One who intentionally and improperly interferes with the performance of a contract (except a contract to marry) between another and a third person by inducing or otherwise causing the third person not to perform the contract, is subject to liability to the other for the pecuniary loss resulting to the other from the failure of the third person to perform the contract.

The Restatement (Second) section was cited with approval and applied in Adler, Barish, Daniels, Levin, Etc. v. Epstein, 482 Pa. 416, 393 A.2d 1175 (1978), and has since been applied in numerous cases. See Allied Security, Inc. v. Security Unlimited, Inc., 265 Pa.Super. 297, 401 A.2d 1219 (1979); Thompson Coal Company v. Pike Coal Company, 488 Pa. 198, 412 A.2d 466 (1979); Yaindl v. Ingersoll-Rand Company Standard Pump-Aldrich Division, 281 Pa.Super. 560, 422 A.2d 611 (1980); Temporaries, Incorporated v. Krane, 325 Pa.Super. 103, 472 A.2d 668 (1984).

Appellees are incorrect, however, in their interpretation of Section 766. Appellees maintain that the appellant must show a permanent severance of the employment relationship between the appellant and its employees before it can make out a cause of action for tortious interference with contractual relations. Section 766 does not state that an employment relationship must be completely severed before the injured party may sue for damages, nor is there a Pennsylvania case which so holds. In their brief, appellees have cited tortious interference cases which involved a termination of an employer-employee relationship. None of these cases, however, states, or implies, that interference resulting in a complete break-off in the employment relationship is a prerequisite to recovery for this tort. To interpret Section 766 in such a fashion would mean that third persons could interfere with an employer-employee relationship for a day, a month, or longer, yet avoid liability if the employees returned to work after the interference period had ceased. This would effectively deny the employer a remedy for conceivably extensive damages suffered during the interference period. The only justification for the denial would be that, despite the damages suffered, the employment relationship was never permanently severed. We do not believe that such a result was ever intended by the Restatement Drafters, or by Pennsylvania Courts that have relied on Section 766.

Therefore, on remand, the appellant will not be required to establish that the appellees’ alleged interference led to a - complete severance of the contractual relationship between the appellant and its employees to recover under a theory of tortious interference with contractual relations.

V.

The final preliminary objection which the trial court adopted as a legal conclusion was that the appellees’ picketing was privileged conduct and that appellees are immune from a suit arising out of a lawful strike.

Indeed, peaceful picketing is, in almost all situations, conduct which is privileged and is protected by the United States Constitution. Thornhill v. Alabama, 310 U.S. 88, 60 S.Ct. 736, 84 L.Ed. 1093 (1940). Appellant, however, alleges threats and acts of violence on the part of the appellees. If the appellees did, in fact, exhibit such behavior, they exceeded the boundaries of privileged conduct. The United States Supreme Court has repeatedly declared that picketing coupled with violence is conduct which is not worthy of constitutional protection, and that the states have the power and obligation to create laws which afford relief to those harmed by violent conduct. United Construction Workers v. Laburnum Construction Corp., 347 U.S. 656, 74 S.Ct. 833, 98 L.Ed. 1025 (1954); International Union, United Automobile, Aircraft and Agricultural Implement Workers of America v. Russell, 356 U.S. 634, 78 S.Ct. 932, 2 L.Ed.2d 1030 (1958), San Diego Building Trades Council v. Garmon, 359 U.S. 236, 244, 79 S.Ct. 773, 779, 3 L.Ed.2d 775 (1959), New York Telephone Company v. New York State Department of Labor et al., 440 U.S. 519, 539-540, 99 S.Ct. 1328, 1340-1341, 59 L.Ed.2d 553 (1979).

Appellees suggest that Section 767 of the Restatement (Second) of Torts should be considered in determining whether the appellees alleged interference was “improper.” With this much we agree. But if it is determined as a matter of fact that the appellees interfered with the appellant’s employment contracts in a threatening or violent manner, there is no basis, under the United States Constitution or Pennsylvania law, for the contention that the appellees’ conduct was privileged and that the appellees are consequently immune from liability.

Since the appellant’s claim for damages is not barred, the Order dismissing the appellant’s claim for damages is reversed and the case is remanded for further proceedings not inconsistent with this opinion.

Jurisdiction is relinquished.