author: POPOVICH, Judge:

text:
    628 A.2d 1159
    Joshua MILES, Appellee, v. George William VAN METER and Greenfield Trans. Co., Inc. Appeal of PENNSYLVANIA WORKERS COMPENSATION SECURITY FUND.
    Superior Court of Pennsylvania.
    Argued April 1, 1993.
    Filed July 26, 1993.

      L. Rostaing Tharaud, Philadelphia, for appellant.
    Norman R. Segal, Philadelphia, for Miles, appellee.
    Michael T. McDonnell, Philadelphia, for Van Meter and Greenfield Trans., appellee.
    Before TAMILIA, POPOVICH and CERCONE, JJ.
   POPOVICH, Judge:

This is an appeal from the order entered in the Court of Common Pleas of Philadelphia County granting the petition of appellee, Joshua Miles, to settle with the Iowa Insurance Guaranty Association (“IIGA”), free and clear of a subrogation lien asserted by appellant, Pennsylvania Workers’ Compensation Security Fund (“PWCSF”). We are presented with a question ,of first impression: whether PWCSF may assert a subrogation lien against a claimant’s recovery from an out-of-state insurance guaranty association which is responsible for the outstanding tort claims against an insolvent liability insurance carrier. Upon review, we vacate the lower court’s order and permit PWCSF to assert its subrogation lien.

We recount the relevant history of this case as follows: On October 6, 1981, while employed by Midwest Emery Freight Systems, Inc. (“Midwest Emery”), Joshua Miles, a Pennsylvania resident, was injured in the scope of his employment at a Pennsylvania Turnpike rest area near Harrisburg when his truck was struck from the rear by a Greenfield Transportation Company (“Greenfield”) truck which was operated by George Van Meter. Greenfield is an Iowa company.

Because the accident occurred in the course of his employment, Midwest Emery’s workmen’s compensation carrier, Carriers Insurance Co., began to disburse funds to Miles. However, Carriers became insolvent. Appellant, PWCSF, assumed responsibility of the workmen’s compensation benefits to Miles. Miles received $130,000.00 in workmen’s compensation benefits.

Greenfield and Van Meter were insured at the time of the accident by Excalibur Insurance Company. While Miles’ suit against Greenfield and Van Meter was pending, Excalibur became insolvent, and IIGA assumed its responsibilities.

Prior to trial, IIGA and Miles agreed to value Miles’ damages at $230,000.00. Further, IIGA asserted it was entitled to a credit of $130,000.00, reflecting the compensation already paid by Carriers and PWCSF. Thus, IIGA offered to convey $100,000.00 in actual settlement dollars to Miles.

Miles agreed to this arrangement, provided he was able to avoid a subrogation lien asserted by PWCSF on the $130,-000. 00, which he had received in workmen’s compensation benefits. Miles petitioned the court below for leave to settle free and clear of PWCSF’s subrogation lien. In its order entered October 1, 1992, the lower court granted Miles’ petition. PWCSF subsequently brought this appeal.

PWCSF contends that the lower court committed an error of law in ruling that it was not entitled to assert a subrogation lien on the settlement between IIGA and Miles. Initially, we find that the court below properly determined that Pennsylvania law applies to this case rather than Iowa law. However, after carefully examining appellant’s argument, we hold that the lower court erred in its analysis and application of Pennsylvania law. We find that PWCSF can assert its subrogation lien.

In granting Miles’ petition to settle with IIGA, free and clear of a subrogation lien asserted by PWCSF, the lower court focused its analysis on the following three statutes: the Pennsylvania Workmen’s Compensation Act, 77 P.S. § 1 et seq., the Pennsylvania Insurance Guaranty Association Act, 40 P.S. § 1701.101 et seq. (the “PIGA Act”) and the Iowa Insurance Guaranty Association Act, Iowa Code Chapter 515B (the “IIGA Act”). The court below initially recognized that pursuant to the Pennsylvania Workmen’s Compensation Act, 77 P.S. § 671, an employer, or the employer’s insurer, ordinarily has the right to assert a subrogation lien for the amount of workers’ compensation it paid, against compensation recovered by an insured from a third party. The lower court then found, “PWCSF may ordinarily have the right to assert the same subrogation lien as an employer, [but] circumstances are altered where the third party from which the insured obtains recovery is an insurance guaranty association such as IIGA, which has taken over the obligations of the third party’s insolvent insurer.” Trial Court Opinion, p. 3. The court below determined that the PIGA Act and the IIGA Act “[were] created to protect persons who find that the insolvency of their liability insurance carrier leaves them exposed to suits by injured parties, as well as injured parties whose attempts at recovery may be frustrated by the insolvency of a tortfeasor’s liability insurance carrier.” Trial Court Opinion, p. 3. The lower court concluded that it would be counterproductive to allow one agency to seek reimbursement from the other by asserting a subrogation lien. Trial Court Opinion, p. 4.

In pertinent part, § 671 of the Pennsylvania Workmen’s Compensation Act provides as follows:

Where the compensable injury is caused in whole or in part by the act or omission of a third party, the employer shall be subrogated to the right of the employe, his personal representative, his estate or his dependents, against such third party to the extent of the compensation payable under this article by the employer— Any recovery against such third person in excess of the compensation theretofore paid by the employer shall be paid forthwith to the employe, his personal representative, his estate or his dependents, and shall be treated as an advance payment by the employer on account of any future instalments of compensation.

77 P.S. § 671.

Our courts have construed § 671 to include subrogation rights not only to an employer but also to an insurer of the employer. See Reliance Ins. Co. v. Richmond Machine Co., 309 Pa.Super. 430, 434, 455 A.2d 686, 688 n. 4 (1983) (the law is clear that an insurer of the employer may sue to enforce its subrogation rights under 77 P.S. § 671); Bumbarger v. Bumbarger, 190 Pa.Super. 571, 155 A.2d 216 (1959) (insurance carrier entitled to subrogation rights for compensation payments made to employee).

Here, Carriers Insurance Co. was the workmen’s compensation carrier for the employer of Miles. Carriers began to distribute funds to Miles but then became insolvent. PWCSF thus assumed responsibility of the workmen’s compensation benefits to Miles.

Section 1061(4) of the Pennsylvania Workmen’s Compensation Act states, “[t]he commissioner shall be entitled to recover the sum of all liabilities of such insolvent carrier assumed by the fund from such carrier ... and all others ... liable under any of the terms of the Workmen’s Compensation Law, and may prosecute an action or other proceedings therefor.” 77 P.S. § 1061(4). We find that when PWCSF assumed the responsibility of disbursing funds to Miles, it also became entitled to subrogation rights afforded under 77 P.S. § 671. Cf. Mayhugh v. Somerset Tel. Co., 265 Pa. 496, 109 A. 213 (1920) (state workmen’s insurance fund is entitled to be subrogated to the rights of the employer).

Having determined that PWCSF has subrogation rights under 77 P.S. § 671, we next address the question of whether PWCSF may enforce those rights against an insurance guaranty association. In scrutinizing the aforesaid question, we are guided by the language of the PIGA Act, 40 P.S. § 1701.-101 et seq.

Appellees, Miles, Van Meter and Greenfield, maintain that PWCSF’s subrogation lien is not enforceable on the basis that it is not a “covered claim” pursuant to the language of 40 P.S. § 1701.103(5)(a) and (b). Those sections provide as follows:

(5)(a) “Covered claim” means an unpaid claim, including a claim for unearned premiums, which arises under a property and casualty insurance policy of an insolvent insurer and is:
(i) The claim of a person who at' the time of the insured event resulting in loss or liability was a resident of this Commonwealth, or'
(ii) A claim arising from an insured event resulting in loss or liability to property which was permanently situated in this Commonwealth.
(b) A covered claim shall not include any amount due any insurer, reinsurer, insurance pool, or underwriting association, as a subrogation recovery or otherwise.

40 P.S. § 1701.103(5)(a) and (b) (emphasis added).

Here, PWCSF did disburse workmen’s compensation funds to Miles. However, PWCSF is not an “insurer” under the terms of the PIGA Act, and workmen’s compensation payments are not used to reduce the amount of a “covered claim” under the PIGA Act. We direct our attention to the “definitions” section of the PIGA Act, 40 P.S. § 1701.103. Sections 1701.103(2) and (3) provide as follows:

(2) “Insurer” or “member insurer” means any insurance company, association or exchange which is authorized to write and is engaged in writing within this Commonwealth, on a direct basis, property and casualty insurance policies.
(3) “Property and casualty insurance policy” means any contract, including any endorsement, rider, binder (written or oral), cover note, certificate or other instrument of insurance attached or relating thereto, without regard to the nature of the form of the same, which provides any of the coverages enumerated in section 202, act of May 17, 1921 (P.L. 682, No. 284), known as “The Insurance Company Law of 1921,” as amended except:
(i) Life insurance and annuities;
(ii) Health and accident insurance;
(iii) Title insurance;
(iv) Credit insurance on accounts receivable;
(v) Mortgage guaranty insurance;
(vi) Surety insurance;
(vii) Ocean marine insurance; and
(viii) Workmen’s compensation insurance.

40 P.S. § 1701.103(2) and (3) (emphasis added). Upon focusing our analysis on the definitions, “property and casualty insurance policy” and “insurer” which are incorporated within the language of 40 P.S. § 1701.103(5)(a) and (b), we find the contention that PWCSF’s subrogation lien reduces the amount of a “covered claim” lacks substance since this assertion presupposes that workmen’s compensation insurance carriers participate in PIGA and workmen’s compensation claims are paid by PIGA. However, workmen’s compensation insurance is expressly excluded from the coverage of the PIGA Act, and we conclude that under Pennsylvania law, PWCSF could even enforce a subrogation lien against PIGA. The obligations of PIGA and PWCSF are not in any way coextensive or interdependent. Indeed, the avoidance of subrogation liens of workmen’s compensation carriers in general is not provided for by the PIGA Act.

Alternatively, appellees suggest that our court should be guided by the language of the IIGA Act, Iowa Code Chapter 515B, on the grounds that the IIGA Act is a uniform national law. However, after closely examining the language of the IIGA Act, we find that the IIGA Act’s coverage with respect to workmen’s compensation insurance is clearly distinct from the coverage provided under the PIGA Act. As appellees, Van Meter and Greenfield, acknowledge, the IIGA Act includes workmen’s compensation insurance within its scope. Under Iowa law, there is no separate fund comparable to the Pennsylvania Workmen’s Compensation Act for payment of claims against insolvent workmen’s compensation insurers. Rather, IIGA pays those claims.

Clearly, Iowa and Pennsylvania have different schemes for managing workmen’s compensation claims against insolvent carriers. Because Pennsylvania law and Iowa law address workmen’s compensation insurance differently, we are not persuaded by appellees’ suggestion that our court should give deference to the language of the IIGA Act. As determined above, Pennsylvania law controls in this case.

The Pennsylvania Workmen’s Compensation Act expressly grants subrogation rights for workmen’s compensation payments. 77 P.S. § 671. Further, the Pennsylvania Workmen’s Compensation Act and the PIGA Act are both devoid of any language precluding the PWCSF from asserting a subrogation lien against PIGA or any similar entity.

Appellees assert that it would be against public policy and also counterproductive to allow recoveries against an insurance guaranty association, a “state agency”, which has taken over the obligations of insolvent insurers. At first glimpse, we might be inclined to agree with that assertion. However, upon close examination of the composition and nature of an insurance guaranty association in relationship to that of PWCSF, we reject appellee’s argument. PIGA’s membership is composed of independent property and casualty insurers within the Commonwealth. 40 P.S. § 1701.201(a). PIGA’s function is essentially to redeem the role of a property and casualty insurer which becomes insolvent and make payment of covered claims. 40 P.S. § 1701.201(b)(l)(i). On the other hand, PWCSF’s survival depends upon the required funding from stock companies, mutual carriers and reciprocal exchanges which are authorized to transact workmen’s compensation insurance in the Commonwealth. 77 P.S. § 1053. PWCSF’s function is to assure claimants workmen’s compensation payments from employers insured by insolvent stock companies, insolvent mutual carriers, insolvent reciprocal exchanges, or the State Workmen’s Insurance Fund. 77 P.S. § 1053. PIGA and PWCSF manage separate and distinct insurances. Since we are of the opinion that PWCSF may even enforce its right of subrogation against PIGA, we, also, find that this right is enforceable against IIGA.

The right of subrogation is founded on principles of equity which seek (1) to prevent double recovery for the same injury by a claimant, (2) to ensure that the employer is not compelled to make compensation payments necessitated by the negligence of a third party, and (3) to prevent a third party tortfeasor from escaping liability for his negligence.

Schramm v. Sanitation Authority, 131 Pa. Commonwealth Ct. 126, 131, 569 A.2d 994, 996 (1990), affirmed, 532 Pa. 494, 616 A.2d 614 (1992), quoting, Helms Express v. Workmen’s Compensation Appeal Board (Lemonds), 106 Pa. Commonwealth Ct. 287, 291, 525 A.2d 1269, 1271 (1987).

A review of the record reveals that prior to trial, IIGA and Miles agreed to value Miles’ damages at $230,000.00. Further, both agreed that IIGA was entitled to a credit of $130,000.00 reflecting, the compensation already paid by Carriers and PWCSF. Thus, IIGA offered to convey $100,000.00 in actual settlement dollars to Miles. Miles agreed to this arrangement, subject to his ability to avoid PWCSF’s subrogation lien on the $130,000.00 he received in workmen’s compensation benefits.

If we were to conclude that PWCSF has no right to assert a subrogation lien in this case, we would, in effect, condone the practice of PWCSF being an insurer for other insurance guaranty associations. The viability of PWCSF would be in jeopardy if insurance guaranty associations are permitted to avoid their liability for property and casualty insurance payments by denying PWCSF its subrogation lien. To rule otherwise could deplete the funds available for the distribution of workmen’s compensation payments, 77 P.S. § 1053. Consequently, in order to ensure that adequate workmen’s compensation funds are available, we find it necessary to insure PWCSF has subrogation rights against insurance guaranty associations.

Accordingly, the lower court committed an error of law in ruling that PWCSF was not entitled to assert a subrogation lien on the settlement between IIGA and Miles.

We vacate the lower court’s order and remand for further proceedings in accordance with this opinion. Jurisdiction relinquished.

      . Greenfield and Van Meter have jointly filed a brief in support of the lower court's order granting Miles' petition to settle with IIGA free and clear of PWCSF’s subrogation lien.

      . In analyzing the choice of law issue, the lower court was guided by our court’s decision in Laconis v. Burlington County Bridge Commission, 400 Pa.Super. 483, 583 A.2d 1218 (1990). In that case, we held that under principles of comity, rights and liabilities of parties in tort actions are determined by the law of the state with the most significant relationship to the occurrence and the parties. Id. at 490-93, 583 A.2d at 1222-23. In light of our court’s decision in Laconis, the court below found as follows:
      Here, Miles is a Pennsylvania resident, PWCSF is a Pennsylvania entity, and the accident occurred in Pennsylvania. The amounts paid by PWCSF were determined by Pennsylvania law, and any right PWCSF has to a subrogation lien is similarly created by Pennsylvania law. Although IIGA’s involvement in this action is based on a contract between an Iowa insurer and an Iowa defendant, Pennsylvania has more significant connections to this action. Pennsylvania law will, therefore, apply.
      Trial Court Opinion, p. 2.

      . Contrary to the decision of the United States District Court, E.D. Pennsylvania in Pennsylvania Ins. Guar. Ass’n v. Charter Abstract Corp. v. Safeco Title Ins. Co., 790 F.Supp. 82 (1992), we find that the legislature intended the definitions, "property and casualty insurance policy" and "insurer" to be read inclusively of one another. In Safeco, the Eastern District Court of Pennsylvania found as follows,
      The definition of property and casualty insurance is aimed at defining those categories of insurance which the Act intends to protect, and it does not appear that the legislature intended that definition to be read with the definition of insurer and limit the entities which may make claims under the Act. Had the legislature intended intended to so limit the definition of insurer, it could have done so.

        Id. at 87. The court concluded that carriers of excluded insurance under the definition of "property and casualty insurance policy" are still deemed insurers for purposes of the guaranty acts and may not recover from the funds. Id. at 87. We reject that definitional analysis of the Eastern District Court of Pennsylvania. Indeed, "insurer" is defined clearly as "any insurance company ... which is authorized to write and is engaged in writing within this Commonwealth, on a direct basis, property and casualty insurance policies." 40 P.S. § 1701.103(2) (emphasis added). "When the words of a statute are clear and free from all ambiguity, the letter of it is not to be disregarded under the pretext of pursuing its spirit." Donegal Mutual Ins. Co. v. Long, 528 Pa. 295, 300, 597 A.2d 1124, 1127 (1991), quoting, 1 Pa.C.S. § 1921(b). See Beyer’s Cement, Inc. v. North Dakota Ins. Guar. Ass’n, 417 N.W.2d 370 (N.D. 1987) (worker’s compensation board is not an "insurer” under North Dakota Insurance Guaranty Association Act, and thus the state Insurance Guaranty Association was statutorily obligated to pay subrogation claim of worker’s compensation board).

      . Upon reviewing the "purposes" section of the PIGA Act, 40 P.S. § 1701.102, we are convinced further that the PIGA Act is not applicable to workmen's compensation insurance. Section 1701.102 states as follows:
      § 1701.102. Purposes
      The purposes of this act are:

        (1) To provide a means for the payment of covered claims under certain property and casualty insurance policies, to avoid excessive delay in the payment of such claims, and to avoid financial loss to claimants or policyholders as a result of the insolvency of an insurer;

      (2) To assist in the detection and prevention of insurer insolvencies; and
      (3) To provide for the formulation and administration by The Pennsylvania Insurance Guaranty Association of a plan of operation necessary to effectuate the provisions of this act.

      . IIGA has no provision for subrogation of the workmen’s compensation payments it makes since it would simply be paying itself.


source: Caselaw Access Project

license: Public Domain

text:
    628 A.2d 1165
    COMMONWEALTH of Pennsylvania, Appellee, v. Raymond STINSON, a/k/a Ray Supreme, Appellant.
    Superior Court of Pennsylvania.
    Argued April 1, 1993.
    Filed July 26, 1993.

      Michael P. Gottlieb, Norristown, for appellant.
    Maria Dutkowski, Rosemont, Asst. Dist. Atty., for Com., for appellee.

      Before TAMILIA, POPOVICH and CERCONE, JJ.
   POPOVICH, Judge:

This is an appeal from the judgment of sentence entered in . the Court of Common Pleas of Montgomery County following appellant’s convictions on charges of voluntary manslaughter and possessing an instrument of crime. We affirm.

On August 21, 1992, appellant shot and killed Clyde Foster Whyte on a street in Norristown, Pennsylvania. N.T. 3/16/92-3/18/92 at 33, 95, 97, 109-110, 217-218, 228. Both appellant and the victim of the shooting were black. On March 18,1992, a jury found appellant guilty of one count of voluntary manslaughter and one count of possessing an instrument of crime. Appellant timely filed post-verdict motions which were denied by the lower court by its order dated April 24,1992. On June 17, 1992, appellant was sentenced to 5-10 years on the voluntary manslaughter charge and 1-2 years on the charge of possessing an instrument of crime. This appeal ensued.

Herein, appellant raises three arguments to assert that the lower court committed errors of law. First, appellant contends that the court below erred in refusing to allow certain proposed voir dire questions by appellant to be asked to prospective jurors. Second, appellant maintains that the lower court erred in permitting. the use of appellant’s prior conviction for unauthorized use of a motor vehicle to be used to impeach his credibility. Third, appellant argues that the lower court erred in allowing the Commonwealth to introduce the preliminary hearing testimony of a witness into evidence.

Addressing the first argument raised by appellant, we find that the court below did not abuse its discretion nor commit an error of law in refusing to allow appellant’s proposed voir dire questions 53-59 to be asked to prospective jurors. During voir dire examination, appellant requested that the following questions be read to the prospective jurors:

53. Do any of you have any personal or professionál relationships with blacks?
54. Do any of you think that black people have different values and standards than white people do?
55. Do any of you think black people have a harder time getting along in society?
56. Do any of you feel, there are any differences between black people and white people?
57. Do any of you have any prejudice against black people?
58. Have you had any dealings or experiences with black people that might make it difficult for you to sit in impartial judgment on this case?
59. Will the fact that the defendant is black affect in any way your judgment of this case?

Appellant’s Brief at 6. The lower court did not pose the aforesaid questions verbatim to the prospective jurors. Instead, the court presented the following questions to the prospective jurors regarding appellant’s race:

THE COURT: Have any of you had any dealings with Black people that might make it difficult for you to sit in judgment in this particular case?
(No reply)
THE COURT: Do any of you have or harbor any prejudices against Black people?
(No reply)
THE COURT: Would the fact that the defendant is Black in any way alter, cause you to alter your judgment in this case? Would that affect your judgment in this case if you are chosen, the fact that the defendant is Black? PROSPECTIVE JUROR: No. 5.
THE COURT: Anyone else?
(No reply)

Voir Dire N.T. 3/16/92 at 22-23.

“The purpose of voir dire is to secure a competent, fair, impartial and unprejudiced jury. The scope of voir dire rests in the sound discretion of the trial court and will not be reversed on appeal in the absence of palpable error.” Commonwealth v. Proctor, 526 Pa. 246, 257, 585 A.2d 454, 460 (1991) (citation omitted). See Commonwealth v. Newman, 382 Pa.Super. 220, 236-38, 555 A.2d 151, 159 (1989) (scope of voir dire rests within sound discretion of trial court and will not be reversed on appeal absent a gross abuse of discretion).

Appellant maintains that his proposed voir dire questions 53-59 were designed specifically to inquire into racial prejudice. Appellant further argues, “[sjince the Trial Court refused to ask these questions of the venire panel, the defendant was inescapably prejudiced thereby and a new trial should be awarded.” Appellant’s Brief at 7.

In his brief, appellant completely ignores the fact that the lower court did, indeed, present questions to prospective jurors which directly probed into whether any of them harbored any racial prejudices or biases that would affect .the juror’s ability to'render a fair verdict. The three voir dire questions asked by the lower court to the prospective jurors captured the essence at which appellant’s proposed questions 53-59 were directed. The lower court’s questions were more than adequate to elicit any possible bias or prejudice against appellant on the account of his race that might affect a juror’s ability to render a fair verdict.

In Commonwealth v. Futch, 469 Pa. 422, 426-28, 366 A.2d 246, 248 (1976), our supreme court determined that the following two voir dire questions, which are nearly identical to the questions posed by the lower court in the instant case, were more than adequate to elicit any possible racial bias:

1. Have you had any experience with black persons that might impair your ability to be fair and impartial?
2. Will the fact that the defendant is a black person affect in any way your judgment in this case?

In light of that finding by our supreme court, we are easily convinced that the three questions asked by the court below to the prospective jurors completely dispels of all the concerns raised in appellant’s proposed questions 53-59.

After examining appellant’s second contention that the lower court erred, we find that the court below properly allowed appellant’s prior conviction of unauthorized use of a motor vehicle to be used to impeach his credibility. During direct examination of appellant at trial, appellant’s attorney asked him the following questions:

DEFENSE ATTORNEY: Mr. Stinson, you were previously convicted of a charge of unauthorized use of a motor vehicle, is that correct?
MR. STINSON: Yes.
DEFENSE ATTORNEY: The fact that you were convicted of unauthorized use of a motor vehicle, does that affect your testimony here today?
ASSISTANT D.A.: Objection. You[r] Honor, that’s for the jury to decide.
THE COURT: Sustained.

N.T. 3/16/92-3/18/92 at 220-221 (counsel’s titles and appellant’s name added for clarification purposes). In its instructions to the jury, the lower court addressed appellant’s testimony regarding his prior conviction for unauthorized use of a motor vehicle:

There was evidence, members of the jury, which tended to prove that the defendant had a prior criminal record. I am speaking of the fact that he admitted that he had been convicted of unauthorized use of an automobile. In the Commonwealth of Pennsylvania this is what we call a crimen falsi, a crime of falsehood. This evidence is not evidence of the defendant’s guilt. You must not infer guilt from the evidence of prior convictions or bad reputation for truth. This evidence may be considered by you for one purpose only, that is, to help you judge the credibility and weight of the testimony given by the defendant as a witness in this trial.

N.T. 3/16/92-3/18/92 at 263.

In Commonwealth v. Johnson, 340 Pa.Super. 26, 489 A.2d 821 (1985), our court determined that the unauthorized use of a motor vehicle is a crime of falsehood (crimen falsi). Thus, we held that the trial court did not abuse its discretion in admitting evidence of defendant’s prior convictions for that crime for impeachment purposes. Id., 340 Pa.Super. at 30-32, 489 A.2d at 824. In arriving at our decision in Johnson, we also noted that the trial court gave a strong cautionary instruction to the jury concerning the purpose for admitting evidence of those prior convictions.

Guided by our court’s decision in Johnson, we conclude that the lower court did not commit an error in allowing appellant’s prior conviction for. unauthorized use of a motor vehicle to be used to impeach his credibility. In addition, we find that the lower court’s instructions to the jury adequately explained the purpose for admitting evidence of that past conviction.

Addressing appellant’s third and final argument, we hold that while the lower court committed error in admitting into evidence the preliminary hearing testimony of Everton Smith, an eyewitness to the shooting and brother of the victim, the error was harmless. Appellant asserts that the preliminary testimony should not have been admitted on two bases. First, appellant maintains that Everton Smith was not “unavailable” to testify at trial. Second, appellant contends that his defense counsel did not have a full opportunity to cross-examine Everton Smith at the preliminary hearing.

Under Pennsylvania law, a witness, who has previously testified but “cannot be found” to testify at trial, will be deemed “unavailable” if the Commonwealth has made a good faith effort to locate that witness and compel his attendance at trial. DelVitto v. Schiavo, 370 Pa. 299, 87 A.2d 913 (1952); Commonwealth v. Jackson, 463 Pa. 301, 344 A.2d 842 (1975).

In Commonwealth v. Blair, 460 Pa. 31, 331 A.2d 213 (1975), our supreme court found that the Commonwealth made numerous attempts to serve a subpoena on a witness who had previously testified. Those attempts included going to the address that the witness had given the police, contacting the witness’ mother, checking the Post Office to get a forwarding address on the witness, issuing a bench warrant, and searching and maintaining an all night vigil at the home of the witness’ mother. Id., 460 Pa. at 33-36, 331 A.2d at 214-215. Our supreme court concluded that, under these circumstances, the Commonwealth had made a good faith effort to compel the witness’ attendance. Consequently, the court determined that the witness was “unavailable” to testify at trial. Id., 460 Pa. at 35-36, 331 A.2d at 215.

Here, Everton Smith testified at the preliminary hearing but could not be found by the Commonwealth to testify at trial. At the suppression hearing, George Metz, a Montgomery County detective, testified as to his attempts to serve Mr. Smith with a subpoena to appear at trial. Those attempts included the following: going to two addresses that Mr. Smith provided to the police and which were located in Patterson, New Jersey, contacting the F.B.I. office in Lansdale, Pennsylvania, to determine Mr. Smith’s residence in Jamaica, contacting the Immigration Department in Philadelphia to get Mr. Smith’s visa extended, and sending certified and registered mail to an address in Jamaica to contact Mr. Smith. Suppression N.T. 3/16/92 at 25-37. Under these circumstances, we conclude that the Commonwealth has made a good faith effort to secure Everton Smith’s attendance. Hence, we deem Mr. Smith “unavailable” to testify at trial.

Appellant further argues that Everton Smith’s preliminary hearing testimony should have been inadmissible at trial because he was precluded from impeaching the credibility of Everton Smith at the preliminary hearing. Thus, appellant argues that he was not given a full opportunity to cross-examine Mr. Smith in that earlier proceeding.

“[O]ur common law permits the admission of an unavailable witness’ prior recorded testimony from a preliminary hearing, provided the defendant had counsel and a full opportunity to cross-examine the witness during the earlier proceeding.” Commonwealth v. Scarborough, 491 Pa. 300, 421 A.2d 147 (1980); Commonwealth v. Chestnut, 511 Pa. 169, 512 A.2d 603 (1986); See Commonwealth v. McGrogan, 367 Pa.Super. 394, 532 A.2d 1203 (1987), affirmed, 523 Pa. 614, 568 A.2d 924 (1990); Commonwealth v. Jones, 344 Pa.Super. 420, 496 A.2d 1177 (1985).

At the preliminary hearing, appellant’s counsel cross-examined Everton Smith extensively about what he heard and what he saw when the victim was shot. Preliminary N.T. 9/10/91 at 44-61. Mr. Smith testified that he heard an explosion and saw appellant pointing a gun at the victim. Preliminary N.T. 9/10/91 at 30-31, 33-34, 44-45. Moreover, Mr. Smith stated that after the shooting, he ran to where the victim was lying and asked the victim who shot him. To that question, the victim replied, “Ray”. Preliminary N.T. 9/10/91 at 33, 54. However, when appellant’s counsel asked Everton Smith whether he had any prior criminal convictions, the Commonwealth objected. The district magistrate sustained that objection, refusing to allow counsel to attack Smith’s credibility. Preliminary N.T. 9/10/91 at 61.

Generally, credibility is not an issue at a preliminary hearing. Commonwealth v. Fox, 422 Pa.Super. 224, 619 A.2d 327 (1993). However, in Commonwealth v. Bazemore, our supreme court was presented with the following issue: “whether the transcript of prior testimony from 'a preliminary hearing of an unavailable Commonwealth -witness should be admissible at trial where the Commonwealth failed to disclose to the defense vital impeachment evidence regarding this witness prior to the preliminary hearing.” 531 Pa. 582, 583-84, 614 A.2d 684, 685 (1992) (emphasis added). In addressing that issue, the supreme court found that under the particular facts of the case, the transcript of prior testimony should be inadmissible at trial:

On August 13, 1987, a criminal complaint was filed against appellant charging him with criminal attempt to commit burglary. A preliminary hearing was held in this matter on November 2, 1988. Appellant was represented at the preliminary hearing by counsel. Melvin Hauser testified on behalf of the Commonwealth during the preliminary hearing. Indeed, Mr. Hauser was the sole Commonwealth witness presented on that date. While counsel for appellant cross-examined the witness during the preliminary hearing, she was unaware or had not been informed that Mr. Hauser had made a prior inconsistent statement to the police; that he had a criminal recordand that the Office of the District Attorney was, at that time, contemplating the filing of criminal charges against Mr. Hauser for homicide and conspiracy in connection with the same incident giving rise to the complaint against Bazemore.
At a subsequent pre-trial hearing, inquiry was made of Mr. Hauser regarding whether, if called at trial, he would testify. He unequivocally invoked his Fifth Amendment right against self-incrimination____ The Commonwealth indicated that it would seek to admit the testimony of Mr. Hauser given at the preliminary hearing.

Id. 531 Pa. at 584, 614 A.2d at 685 (emphasis added) (footnote omitted).

By virtue of the fact that the Commonwealth failed to provide the aforesaid information to the defense prior to cross-examination of the witness at the preliminary hearing, our supreme court determined that the defense was denied full and fair opportunity to cross-examine the witness. Hence, the court held that the transcript of the preliminary hearing testimony of the unavailable witness was not admissible at trial. Id. at 589-91, 614 A.2d at 688. It reasoned that under the circumstances of the case, admission of the prior testimony would result in a miscarriage of justice on the basis that the defendant was not permitted to test the testimony’s reliability. Id. at 586-89, 589-91, 614 A.2d at 686-87, 688. In its analysis, our supreme court stated as follows:

[T]he prosecutor, whose duty of course is to seek justice, not merely convict, ... has an affirmative and continuing duty to disclose exculpatory information to the defendant and to correct false testimony of a witness. Moreover, when the reliability of a given witness may well be determinative of guilt or innocence, nondisclosure [on the part of the Commonwealth] of evidence affecting credibility violates due process.

Id. at 591, 614 A.2d at 688 (citation omitted).

Here, appellant asserts that he was unable to discover whether Everton Smith had any prior criminal record or made any prior inconsistent statements because he was precluded from inquiring into Everton Smith’s credibility at the preliminary hearing. Furthermore, following the preliminary hearing, appellant’s counsel filed a motion for discovery, specifically requesting the aforesaid information. In its order dated February 11, 1992, the lower court scheduled argument on that discovery motion for February 25, 1992. However, the record is devoid of any information on whether that argument ever occurred. Appellant’s counsel maintains that the Commonwealth has not, to date, provided him with information on whether Everton Smith had a prior criminal record or made prior inconsistent statements. Appellant’s Brief at 13.

The suppression hearing was held the same day as the first day of trial. At the suppression hearing, appellant’s counsel was informed for the first time that Everton Smith would be unavailable to testify at trial, and that the Commonwealth intended to present the transcript of Mr. Smith’s preliminary hearing testimony at trial. Suppression N.T. 3/16/92 at 40, 47-48.

In light of our supreme court’s holding in Bazemore, supra, we find that appellant was not afforded a full and fair opportunity to cross-examine Everton Smith at the preliminary hearing. Our decision, as our supreme court’s in Bazemore, “[does not] impose upon the Commonwealth a duty to disclose that which it is not obligated by law to disclose.” 531 Pa. at 590, 614 A.2d at 688. “Furthermore, we are cognizant of the fact that the Commonwealth will not necessarily know that a particular witness may, indeed, subsequently become unavailable.” Id. at 590, 614 A.2d at 688. Nevertheless, our decision is predicated on the determination that, as between the competing interests of admitting the former testimony of an unavailable witness and the defendant’s constitutional right to confront a witness, we find the latter paramount.

Although we are of the opinion that the lower court committed an error of law in admitting the preliminary testimony of Everton Smith at trial, we conclude that this error was harmless on the ground that admitting Smith’s testimony was merely cumulative. Error may be considered harmless where “the erroneously admitted evidence was merely cumulative of other, untainted evidence which was substantially similar to the erroneously admitted evidence.” Commonwealth v. Foy, 531 Pa. 322, 612 A.2d 1349, 1352 (1992), citing Commonwealth v. Williams, 524 Pa. 404, 573 A.2d 536, 538-539 (1990). See Commonwealth v. Fell, 453 Pa. 531, 309 A.2d 417, 420 (1973) (error harmless where improperly admitted evidence cumulative and did not prejudice the defendant’s right to a fair trial).

In Bazemore, the Commonwealth relied chiefly on the unavailable witness’ preliminary hearing testimony in its prosecution of the defendant. Id. at 583-85, 614 A.2d at 685. Here, however, at trial, the Commonwealth presented the testimony of two key witnesses, Sharon Mayo and Sergeant Russell Bono of the Norristown Police Department, in conjunction with the transcript of the preliminary hearing testimony of Everton Smith. At trial, Sharon Mayo, an eyewitness to the shooting, testified in detail about what transpired. N.T. 3/16/92-3/18/92 at 30-62. Mayo stated that the victim, Ever-ton Smith and she were walking together on the streets of Norristown when she saw appellant approach them and shoot the victim about four or five times with a black revolver. N.T. 3/16/92-3/18/92 at 31-33. Also, at trial, Sergeant Bono testified that when he saw the victim lying on the ground he asked the victim what had happened. To that question, the victim stated that he was shot by “Ray”. N.T. 3/16/92-3/18/92 at 97.

. Upon reviewing the trial testimony of both Sharon Mayo and Sergeant Bono in relationship to the preliminary hearing testimony of Everton Smith, we find that Mayo and Bono’s recounting of the events was much clearer and more compelling than Smith’s recollection. We conclude that the error did not contribute to the verdict. See Commonwealth v. Story, 476 Pa. 391, 408-10, 383 A.2d 155, 164 (1978) (error cannot be held harmless unless the appellate court determines that the error could not have contributed to the verdict). Consequently, we are convinced, beyond a reasonable doubt, that the admissibility of Everton Smith’s preliminary hearing testimony transcript at trial was harmless error. See id. at 406, 383 A.2d at 162-163 (“beyond a reasonable doubt” standard applied in determining the harmlessness of any criminal trial error).

Having examined all of appellant’s contentions, we find no basis warranting a new trial. Accordingly, the judgment of sentence is affirmed.

Judgment of sentence affirmed.

      . We note that at the suppression hearing, appellant sought to prevent the admission of his prior conviction at trial. However, the lower court ruled that the Commonwealth could use the conviction for impeachment purposes.

      . In Fox, the defendant contended that the district magistrate at the preliminary hearing erred in sustaining the objections of the Commonwealth to defense counsel’s questions pertaining to the credibility of John Jerome Masi, a witness for the Commonwealth. Because he was precluded from asking those questions, the defendant asserted that he was denied the full opportunity of cross-examination at the preliminary hearing. In assessing the issue of whether full opportunity of cross-examination at the preliminary hearing stage includes the right to impeach the credibility of a witness, our court focused on the intent and purpose behind preliminary hearings, —i.e., Commonwealth merely bears burden of establishing prima facie case against defendant — and concluded that the defendant had no right to impeach the credibility of John Jerome Masi. Fox, 422 Pa.Super. at 233-36, 619 A.2d at 332-333.
      The facts presented in Fox are distinguishable from those in the instant case. In Fox, the witness at the preliminary hearing, John Jerome Masi, also testified at trial and was subjected to credibility questions on cross-examination. Id. at 233-36, 619 A.2d at 332-333. Here, the witness at the preliminary hearing, Everton Smith, was unavailable to testify at trial. In Fox, in reaching our conclusion that the defendant had no right to impeach the credibility of the witness at the preliminary hearing, our court was guided by decisions involving fact patterns different from the present case. In those decisions, the witness who testified at the preliminary hearing did not become unavailable to testify at trial. Id. at 233-36, 619 A.2d at 332-333.

        We are of the opinion that our court in Fox determined that credibility is not an issue at the preliminary hearing stage when the defendant is afforded the opportunity to attack the witness’ credibility at trial. In essence, the question of whether the magistrate in Fox committed an error in precluding the defendant from attacking the credibility of John Jerome Masi at the preliminary hearing was moot. Since the defendant in Fox was granted the trial right to impeach the credibility of John Jerome Masi, our court found that the defendant’s assertion that he also had a preliminary hearing right to impeach that same witness was meritless. Here, because Everton Smith was unavailable to testify at trial, appellant was never given the opportunity to attack the credibility of Mr. Smith. In light of that procedural distinction, we find that the our decision in Fox is not dispositive of the issue presented in the instant case.

      . It appears that defense counsel believes that Everton Smith has a prior criminal record. Suppression N.T. 3/16/92 at 58.


author: BECK, Judge: CAVANAUGH, Judge,

text:
    628 A.2d 1172
    E.F. HOUGHTON & CO. and Efhco, Inc., Appellants, v. Jane DOE and Timothy Burno. E.F. HOUGHTON & CO. and EFHCO, Inc., Appellants, v. MELLON BANK (EAST), N.A., Successor to Girard Bank. E.F. HOUGHTON & CO. and Efhco, Inc., Appellants, v. DELAWARE MANAGEMENT CO., INC. Delaware Cash Reserve, Inc. and Delaware Cash Reserve.
    Superior Court of Pennsylvania.
    Argued March 4, 1993.
    Filed July 27, 1993.

      Annetta F. Givhan, Philadelphia, for appellants.
    Fred T. Magaziner, Philadelphia, for Mellon Bank, appellee.
    Before CAVANAUGH, BECK and HUDOCK, JJ.
   BECK, Judge:

In this appeal we decide the nature of the notice that must be given to a bank by a third party under Section 606 of the Banking Code in order for the third party to assert successfully a claim to funds in a depositor’s account superior to that of the depositor or the bank itself.

The relevant facts in this case are undisputed. In February 1982, Timothy Burno, an investment clerk employed by appellant E.F. Houghton & Co. (“Houghton”), stole over $1,000,000 in United States Treasury notes from Houghton. The funds eventually were deposited into two accounts at appellee Mellon (then Girard) Bank, in the name of Bumo and his wife. On the strength of these funds as collateral, Mellon approved a $150,000 loan to the Burnos. The loan agreement provided that, in the event of default, the bank was entitled to withdraw $150,000 plus accrued interest from the Burnos’ accounts to pay the debt.

Some months later, Houghton discovered the theft, and obtained a judgment against the Burnos. On July 8, 1982, Houghton notified Mellon of the Burno theft and asked the bank to freeze the funds in the accounts. Mellon refused to freeze the funds before receiving a court order to do so. Before receiving a writ of attachment on July 9, 1982, Mellon caused $151,481.88 to be withdrawn from the larger of the Burnos’ accounts, representing the principal and interest of its loan. Mellon then paid to Houghton the remaining $916,-304.50 which was in the accounts at the time the writ of attachment was served, plus interest.

Houghton instituted this action to recover the funds that were withdrawn by Mellon. The trial court granted Mellon’s motion for summary judgment, and Houghton filed this timely appeal.

Summary judgment is proper when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact, and that the moving party is entitled to judgment as a matter of law. Pa.R.Civ.P. 1035(b). We note that the material facts are not in dispute, and this case therefore was ripe for summary judgment. We agree with the trial court that Mellon is entitled to judgment as a matter of law, and affirm.

In defense of its actions Mellon cites Section 606 of the Banking Code which provides in pertinent part:

(a) An institution shall not be required, in the absence of a court order or indemnity required by this section, to recognize any claim to, or any claim of authority to exercise control over, a deposit account or property held in a safedeposit____made by a person or persons other than:
(i) The customer in whose name the account or property is held by the institution____
(b) To require an institution to recognize an adverse claim to, or any claim of authority to control, a deposit account or property held in a safe-deposit, whoever makes the claim must either:
(i) Obtain and serve on the institution an appropriate order directed to the institution by a court restraining any action with respect to the account or property until further order of such court or instructing the institution to pay the balance of the account or deliver the property, in whole or in part, as provided by the order, or
(ii) Deliver to the institution a bond, in form and amount and with sureties satisfactory to the institution, indemnifying the institution against any liability, loss or expense which it might incur because of its recognition of the adverse claim....

7 Pa.S.A. § 606. We agree with the trial court’s conclusion that § 606 justified Mellon’s actions in this case.

Mellon received the required legal notice of Houghton’s adverse claim against the Burnos’ deposit accounts when a writ of attachment was served on July 9, 1982. Once served, the writ — an order of the court — enjoined Mellon “from paying any debt to or for the account of Timothy Bumo ... and from delivering any property owned by the [Burnos] to or for [their] account ... or otherwise disposing thereof.” Writ of Fraudulent Debtor’s Attachment, R. 21a-23a. The writ subjected Mellon as garnishee “to the mandate and injunctive orders” of the court. Pa.P.Civ.P. 3111(c).

Until Mellon was served with this process, it was not required to recognize Houghton’s alleged adverse claim to the Burno deposits. Section 606 of the Banking Code describes the only way a third-party claimant may effectively establish ownership of funds held by a bank. 7 Pa.S.A. § 606(a)(i). Until the § 606 requirement is satisfied, a bank is protected in treating the deposit as that of the depositor.

Notwithstanding this statutory protection, Houghton asserts that Mellon’s set-off prior to service of the writ of attachment was an illegal conversion. Houghton argues that “if a bank has knowledge, or notice of facts enough to put it upon inquiry, that the funds in a depositor’s account actually belong to a third person, it may not apply such funds to a debt owed to it by the depositor individually.” Sherts v. Fulton Nat’l Bank, 342 Pa. 337, 339, 21 A.2d 18 (1941). See also Middle Atlantic Credit Corp. v. First Pennsylvania Banking & Trust Co., 199 Pa.Super. 456, 185 A.2d 818 (1962); Rodi Boat Co. v. Provident Tradesmens Bank & Trust Co., 236 F.Supp. 935 (E.D.Pa.1964). We point out that the cases cited by appellant were decided before the enactment of our current Banking Code in 1965, and for that reason alone may not be applicable here. See 7 Pa.S.A. §§ 101 et seq.

However, Houghton asserts that the current provision regarding notice of adverse claims is substantially the same as that in the earlier Banking Code. See 7 P.S. § 819-905A (repealed). Even assuming that the statutory law regarding adverse claims is the same now as it was prior to 1965, a close reading of the line of cases cited by Houghton shows that they remain easily distinguishable from our present set of facts.

For example, in Sherts, the court held that a bank improperly applied funds in a depositor’s account against the bank’s outstanding loan, where the accounts were held by the depositor — an attorney — /or the benefit of his clients. An account was listed under the name “H. Edgar Sherts, Attorney,” and only collections made by him for clients were placed in the account. In other words, the account did not belong to the named depositor, but to others for whom it was held in trust, under a “fiduciary” or “agency” relationship. This type of account was held not to be available to the bank for payment of debts owed by Sherts individually.

Similarly, another account held by Sherts was listed as the “Farm Account,” which held funds belonging to a decedent’s estate. The court held that although the name of this account did not clearly denote a fiduciary relationship, the bank still could not set off against it. The court reasoned that Sherts had not attempted to mislead the bank as to the true ownership of the funds, and that the bank therefore could not avoid treating it as money held in trust for Sherts’ client. The claims asserted by Sherts’ clients against the bank were not “adverse” to Sherts himself, as he never pretended that the money was his own. See also Ryan Bros. Inc. v. Curwensville State Bank, 382 Pa. 248, 114 A.2d 178 (1955) (bank could not set off depositor’s debt against funds in “Distribution Accounts” held by depositor for disbursement to third parties).

Cases which prohibit set-off by the bank are inapplicable to the circumstances of this appeal. This appeal does not involve deposit funds held for the benefit of a third party, in a trust, fiduciary or agency context. Cf. Sherts, supra; Ryan, supra. Nor was this a case where the bank applied deposit funds against a defaulted loan which had been extended independently of the deposit accounts. Cf. Middle Atlantic Credit Corp., supra; Rodi Boat, supra.

Instead, in this case the bank relied on the representations of the depositors who affirmatively misled the bank into believing that certain stolen funds actually belonged to them. The bank lent them money based on the pledged funds as collateral and changed its position “in reliance on the apparent ownership of the funds so as to raise superior equities in its favor.” Sherts, 342 Pa. at 340-41, 21 A.2d at 20. See Cochran v. Fox Chase Bank, 209 Pa. 34, 58 A. 117 (1904) (bank did not have to return stolen funds to true owner where bank accepted funds in good faith and in ordinary course of business as security for loan made to thief-depositor).

Although the cases cited by Houghton are distinguishable, we base our decision upon the clear language of section 606 which provides protection to Mellon in this case. The law provides that a bank which recognizes an alleged “adverse claim” to actual ownership of the account where no order or bond has been served does so at its own risk. See, e.g., DeLuca v. Fidelity Bank, 282 Pa.Super. 365, 422 A.2d 1159 (1980) (bank is legally obligated to honor request of customer in whose name account is held, despite adverse claim by wife, where there is no notice under § 606); First Nat’l Bank of Lancaster County v. Lefever, 28 D. & C.3d 214 (Lancaster Cty.1983) (bank need not recognize adverse claim to deposit account where requirements of § 606 were not met). Where such an adverse claim is made, the Banking Code requires that the claimant provide something more than mere “notice” of the claim; a letter purporting to advise the bank of the alleged claim is not sufficient under the statute.

Section 606 clearly and unambiguously defines the type of notice that is effective to prevent set off or other action by the bank. Until the prescribed notice is provided, the bank safely may presume that monies belong to the named depositor, and act accordingly. In this case, Mellon was not precluded from treating the funds in the Burnos’ accounts as belonging to the Burnos until actual service of the writ of attachment. Mellon’s set-off to pay down the Burnos’ defaulted loan was not an illegal conversion of the stolen funds as Houghton alleges. The loan agreement between Mellon and the Bumos permitted the bank to make itself whole out of the Burnos’ funds on deposit with Mellon. Until Mellon received section 606 notice, Houghton’s right to the funds was not superior to Mellon’s.

Order affirmed.

CAVANAUGH, J., files a dissenting opinion.

CAVANAUGH, Judge,

dissenting:

I respectfully dissent from the result reached by the majority because I do not believe that 7 Pa.S.A. § 606 allows a bank in which funds in an account are held to prefer itself over another claimant to an interest in the account. I would find that Mellon Bank acted improperly in attaching the funds in the Burno’s account since it had actual knowledge of Houghton’s claim to the funds prior to its own attachment.

I differ from the majority’s analysis that cases decided before 1965 may not be applicable to resolution of the instant case since the current Banking Code was only enacted in 1965. The relevant current provisions and the former provisions, as quoted in the majority opinion, do not differ in any material respect from one another. Therefore, caselaw interpreting and applying the predecessor statute of current § 606 is relevant and binding authority upon the case before us.

Upon review of Sherts v. Fulton National Bank, 342 Pa. 337, 339, 21 A.2d 18 (1941); Middle Atlantic Credit Corp. v. First Pennsylvania Banking & Trust Co., 199 Pa.Super. 456, 185 A.2d 818 (1962), and Rodi Boat Co. v. Provident Tradesmens Bank & Trust Co., 236 F.Supp. 935 (E.D.Pa.1964), I would conclude that Mellon Bank is not entitled to the protection provided by § 606 where its own claim to funds held by it was at issue rather than Mellon’s being a mere stakeholder and a disinterested party. I do not agree with the majority that these cases are distinguishable, nor do I see any legal reason to distinguish them since their holdings reflect proper disposition of the banks’ claims to a right to setoff. Although § 606, or its predecessor statute, may not have been explicitly mentioned, I would find that § 606 is not applicable where a bank attaches deposits in furtherance of its own claims to the funds, as opposed to protection of itself from competing third-party claimants.

I would reverse the order granting summary judgment and remand the case for further proceedings.

      . In its opinion, the trial court described the theft. Mr. Burno instructed Houghton’s investment broker to liquidate $1,000,000 of the company’s United States treasury notes, and to transfer the proceeds to a money market account at Delaware Cash Reserve. Bumo's wife opened the money market account the same day, under the name of a nonexistent individual, "E.F. Houghton.” Delaware Cash Reserve disregarded the instructions of Houghton’s broker’s bank, which were to credit a corporate account of "E.F. Houghton & Co.” with the proceeds of the sale, and instead credited the personal money market account opened by Mrs. Bumo with $1,017,254.52. The Bumos then presented Mellon with a draft for $1,018 million drawn on a Delaware Cash Reserve account bearing a signature in the name of "E.F. Houghton.” The draft was payable to Mellon and was deposited into two time-deposit accounts in the name of Timothy and Deborah Burno. The Burnos placed $1,000,000 in one account and $18,000 in the other. Trial Court Opinion at 1-2. The Burnos eventually pled guilty to federal criminal charges arising from the theft.

      . There apparently is no dispute that the Bumos’ loan was in default and that one of the remedies available to the bank under the loan documents was a set-off against the deposit accounts.

      . In fact, Houghton instituted several actions to recover the funds: one against the Burnos, in which Houghton obtained a judgment and served a writ of attachment on Mellon as garnishee; one against Delaware Cash Reserve for its mishandling of Houghton's funds; and one directly against Mellon. The three actions were consolidated below.

      . In its July 8, 1982 letter to Mellon requesting that Mellon freeze the Burnos’ accounts, Houghton wrote that it would "defend, indemnify and hold harmless [the bank] ... from and against any and all losses, liability and expense” arising out of the bank’s compliance with Houghton’s request. We note, however, that this letter does not qualify as the "bond, in form and amount and with sureties satisfactory to the institution” mandated by 7 Pa.S.A. § 606(b)(ii).

      . The former statute read in pertinent part:
      "Notice to an institution of an adverse claim to a deposit standing on its books to the credit of any corporation or person shall not be effectual to cause such institution to recognize such adverse claimant, unless such adverse claimant shall also procure either an attachment or a proper restraining order against the institution from a court of competent jurisdiction____, or unless he shall execute to the institution, in form and with sureties acceptable to it, a bond indemnifying the institution from any liability, loss, damage, costs, and expenses on account of the payment of such adverse claim----" 7 P.S. § 819-905A (repealed).

      . Likewise, Middle Atlantic Credit Corp., supra, is distinguishable from this case. It involved the accounts receivable of an insolvent debtor in which a creditor held a security interest. The funds were traced into the debtor’s deposit account at defendant bank. The court held that the bank was not permitted to apply the funds in the account against an unrelated loan owed by the debtor-depositor. In addition, the set-off occurred one day after the depositor filed for bankruptcy. Most significantly, the bank in Middle Atlantic did not make its loan to the depositor on the strength of the deposited funds as collateral.
      Nor was the subject deposit account the collateral for the bank’s loan in Rodi Boat, supra. The bank lent $56,250 to the depositor, who later placed $60,000 of proceeds from the sale of a boat into an account. The depositor had not finished paying the previous owner for the boat, however, and when, the previous owner sought to recover the funds from the bank, the bank set off the depositor's separate, unrelated debt. The federal district court held that such set-off was not permitted. Neither of these cases relied on or even mentioned the relevant section of the Banking Code.


author: HUDOCK, Judge:

text:
    628 A.2d 1177
    Purcell BRONSON, Appellant, v. Superintendent DOMOVICH, State Correctional Institution, Pittsburgh, Pennsylvania, and Program Review Committee, Appellees.
    Superior Court of Pennsylvania.
    Submitted May 17, 1993.
    Filed July 30, 1993.

      Purcell Bronson, appellant, pro se.
    Gloria Tischuk, Pittsburgh, for appellees.
    Before DEL SOLE, HUDOCK and CERCONE, JJ.
   HUDOCK, Judge:

Purcell Bronson (Appellant) challenges the lower court’s order denying his petition for writ of habeas corpus on the basis that it lacked jurisdiction. We reverse.

Appellant was sentenced and convicted in the Court of Common Pleas of Philadelphia County, Pennsylvania. Pursuant to his sentence, Appellant was incarcerated at the Western State Correctional Institution in Allegheny County, Pennsylvania. During his incarceration, Appellant was placed in solitary confinement for a prison offense. Appellant argues that, because he was confined in Allegheny County at the time of his petition, the Honorable Robert E. Dauer of the Allegheny County Court of Common Pleas had jurisdiction pursuant to Pennsylvania Rule of Criminal Procedure 1701 paragraph (b), 42 Pa.C.S.Rule 1701(b) provides, “A petition for writ of habeas corpus challenging the conditions of the petitioner’s confinement in a criminal matter shall be filed with the clerk of court of the judicial district wherein the petitioner is confined.” Contrarily, in reaching his decision, Judge Dauer relied on paragraph (a) of Rule 1701, which provides, “A petition for writ of habeas corpus challenging the legality of the petitioner’s detention or confinement in a criminal matter shall be filed with the clerk of court of the judicial district wherein the order directing the petitioner’s detention or confinement was entered.”

Appellees did not file a brief with this Court. Their counsel did, however, send a letter in which she argues that Appellant’s issue is moot because he is no longer in solitary-confinement. In the interest of justice, we have chosen to review this case on the basis of Appellant’s cogent assessment of the prison system.

The fact that the prison’s 90 day disciplinary time, and the Program Review Committee’s review procedures are so short a period of time, and prisoner’s appeal time also short, petitioner’s issue of unlawful confinement would never be alive by the time the issue reached this Court, for the RHU [Restrictive Housing Unit] time would [sic] have already been served by the petitioner.

Appellant’s reply brief at p. 1.

In order to determine where, pursuant to Rule 1701, jurisdiction lies for a petition for release from confinement, we must determine what Appellant was challenging, the conditions or the legality of his confinement. Practically speaking, this case involves two confinements, the sentence of incarceration imposed in Philadelphia County and the punishment of solitary confinement imposed in Allegheny County. Initially, we interpret the statute’s use of the word “confinement” as meaning a trial court’s sentence of incarceration, not a punishment imposed on an inmate by prison officials for breaches of discipline (e.g., solitary confinement). The question becomes then: Is a challenge to a punishment, specifically solitary confinement, tantamount to a challenge to the legality or the conditions of confinement?

Appellant speaks in terms of the illegality of the solitary confinement in his petition, the telling portions of which follow:

3. That the illegal commitment to disciplinary custody of which petitioner herein is being unlawfully detained of (his) “liberty” was based upon a denial of Due Process and equal protection of the laws under the Pennsylvania Constitution Article 1. Sec. 8,13, and 26, and the laws under the 4th, 8th, and 14th amendments to the United States Constitution.
In support of these contentions, petitioner alleges the following:
A) On or about June 22, 1992 a disciplinary hearing was held whereat petitioner was found guilty of an allege[d] charge of ‘Threats and Extortion’ and confined to Disciplinary [sic] custody for ninety (90) days.
B) Pursuant to Respondents’ Administrative Directive 801 XI.A.B., petitioner was entitled to be interviewed by the Program Review Committee in person on or before July 2, 1992 for his mandatory 30 day review.
C) The purpose of said interview is to determine based on established criteria, whether or not petitioner’s continued confinement to disciplinary custody is warranted.
D) It is also respondents’ “Policy” pursuant to a consent decree, TCU v. Shapp,’ to return segregated inmates to general population when their behavior has been shown to be modified.
E) Pursuant to Administrative Directive 801 XI.A. a hearing as held on June 24, 1992 by the program Review Committee [sic], whereat respondents issued a reason into the record that was not based on established criteria and policy, that would justify petitioner’s continued confinement in disciplinary custody.
F) Petitioner is presently being held unlawfully in disciplinary custody.
G) Petitioner has no other adequate remedy at law to redress his unlawful confinement.

Petition for Writ of Habeas Corpus, June 30, 1992, ¶¶ 3(A-G).

According to Appellant, the review board did not punish him with solitary confinement pursuant to established criteria and policy; hence, because the board violated his due process rights in imposing the punishment, Appellant claims his solitary confinement was illegal. Based on our review of the record, we conclude that Appellant’s petition challenged the propriety of the punishment imposed on him for the threat and extortion offense; such a complaint challenges a condition of confinement, namely, being removed from the general population to solitary confinement as punishment for a prison offense; it does not challenge the legality of the underlying confinement. In other words, Appellant was not contending that his underlying confinement was illegal because he should never have been incarcerated; rather, Appellant was alleging that the solitary confinement condition of his confinement was improperly imposed by the Program Review Board and therefore illegal.

We conclude that this case is governed by Rule 1701(b) as a challenge to the conditions of confinement over which the Court of Common Pleas of Allegheny County had jurisdiction. Accordingly, we reverse the order denying Appellant’s petition for lack of jurisdiction.

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

      . Deputy Attorney General Gloria A. Tischuk explains in her letter to this Court that Assistant District Attorney Thomas N. Farrell filed a petition to withdraw as counsel for Appellees. Attached to the petition was a letter from Farrell suggesting that, because Bronson's complaints were directed to the conditions of his confinement, the appeal should more appropriately be handled by the Attorney General’s Office. This matter was transferred to the Attorney General’s Office after the due date for Appellees’ brief.

      . If Appellant's punishment had been the denial of a recreation period or moving him from one work force to another, these would plainly be "conditions” of confinement. We see no difference between these changes in the conditions of confinement and moving Appellant away from the general population to a solitary confinement situation. The legality of the underlying confinement to which Appellant was sentenced by a trial court has not been implicated.


author: BECK, Judge:

text:
    629 A.2d 119
    Philip Charles EONDA v. Jeannene A. AFFINITO, Individually and as Executrix of the Estate of Philip F. Eonda, Deceased. Appeal of Jeannene A. AFFINITO.
    Superior Court of Pennsylvania.
    Argued March 23, 1993.
    Filed July 19, 1993.

      Frank C. Carroll, Washington, for appellant.
    Paul J. Leventon, Pittsburgh, for appellee.
    Before BECK, KELLY and HOFFMAN, JJ.
   BECK, Judge:

In this appeal concerning the distribution of life insurance proceeds, we decide whether the absolute right to change beneficiaries under the Federal Employees’ Group Life Insurance Act (FEGLIA) serves to shield federal employees from their obligations under valid marital separation agreements approved by state court order. We find that the provisions of FEGLIA do not provide such protection and so affirm the trial court’s imposition of a constructive trust in favor of appellee.

Phillip (father) and Mildred (mother) Eonda had been married in excess of twenty years when they entered into a Comprehensive Marriage Settlement Agreement (“Agreement”) in mid-1982. Among the many things agreed upon in the dissolution of their marriage was a pledge by father to “designate his son, PHILLIP CHARLES EONDA, as beneficiary on all of his existing life insurance policies.” At the time the Agreement was entered into, father was employed by the federal government as an air traffic controller and was insured under a FEGLIA policy.

Shortly after the Agreement was executed, Father complied with its terms and named his son as his beneficiary on the FEGLIA policy. Six years later, without notice to mother or son, father changed his benficiary to Jeannene Affinito, appellant herein. Two years after the designation, father died and appellant applied for and received the proceeds of the policy which totaled $34,421.77.

Son brought an action in equity against appellant claiming that she had been unjustly enriched as a result of father’s breach of the Agreement. The trial court agreed and imposed a constructive trust for the benefit of son upon the proceeds. Because the proceeds are in the possession of appellant, the trust was imposed upon her individually. The trial court also entered judgment against the estate of father, for which appellant is executrix and sole beneficiary, in the amount of the policy proceeds. The sole basis of appellant’s appeal is that the designation of the beneficiary on a FEGLIA policy is governed by federal statute which grants to the insured an unrestricted right to change beneficiaries at any time prior to death, and since federal law preempts state law, son has no claim to the proceeds at issue.

Appellant’s claims are based primarily on statutory provisions concerning the operation of FEGLIA and the regulations promulgated thereunder. Appellant asserts that the following provisions are relevant to this inquiry:

The amount of group life insurance and group accidental death insurance in force on an employee at the date of his death shall be paid, on the establishment of a valid claim, to the person or persons surviving at the date of his death, in the following order of precedence:
First, to the beneficiary or beneficiaries designated by the employee in a signed and witnessed writing received before death in the employing office ... For this purpose, a designation,, change, or cancellation of beneficiary in a will or other document not so executed or filed has no force or effect.

5 U.S.C. § 8705(a).

The provisions of any contract under this chapter which relate to the nature or extent of coverage or benefits (including payments with respect to benefits) shall super-cede and preempt any law of any State or political subdivision thereof, or any regulation issued thereunder, which relates to group life insurance to the extent that the law or regulation is inconsistent with the contractual provisions.

5 U.S.C. § 8709(d)(1).

A change of beneficiary may be made at any time and without the knowledge or consent of the previous beneficiary. This right cannot be waived or restricted.

5 C.F.R. § 870.902.

It is appellant’s position that based on the doctrine of preemption, a state court is precluded from imposing a constructive trust upon FEGLIA proceeds. We address first the plain language of the above-referenced laws and rule to determine if appellant’s reliance on them is appropriate.

With respect to § 8705, we find no mandate nor implication of preemption. This section merely dictates the priority by which the insurance company shall pay out proceeds. It further provides that a change in beneficiaries cannot be made in any document other than the official form filed in the appropriate office. There has been no claim by appellee that the Agreement constitutes an official change in the beneficiary; therefore, § 8705 is not relevant to our inquiry.

Section 8709 directly addresses preemption but does so only in the context of state laws that “relate to group life insurance.” The validity of a state court marriage settlement agreement does not relate to life insurance and so § 8709 is not implicated under these facts.

It is only the regulation at 5 C.F.R. § 870.902 that poses the possibility of a Congressional intent to preempt. We begin our analysis by noting that an agency’s power to promulgate regulations is limited to the authority delegated by Congress. See Bowen v. Georgetown University Hospital, 488 U.S. 204, 208, 109 S.Ct. 468, 471, 102 L.Ed.2d 493 (1988). Even where an agency sets forth with particularity its interpretation of a regulation, a court’s review is limited to whether the interpretation is reasonable in light of the language, policies, and legislative history of the Act under which the regulation is promulgated. See United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 131, 106 S.Ct. 455, 461, 88 L.Ed.2d 419 (1985). See also Central Dauphin School District v. Commonwealth Department of Education, 147 Pa. Cmwlth. 426, 608 A.2d 576, 580-81 (1992) (a regulation is binding on a reviewing court if it conforms to the grant of delegated power, is issued in accordance with proper procedures, and is reasonable) (citing Pennsylvania Human Relations Commission v. Uniform Area School District, 455 Pa. 52, 313 A.2d 156 (1973)). Therefore, we must analyze and interpret § 870.902 in a manner consistent with the intent of Congress in enacting FEGLIA.

Appellant also relies on Ridgway v. Ridgway, 454 U.S. 46, 102 S.Ct. 49, 70 L.Ed.2d 39 (1981), in support of her argument that she is entitled to the proceeds of the policy regardless of the equities of the case. In Ridgway, the United States Supreme Court held that a constructive trust could not be imposed for the benefit of an insured’s children notwithstanding the fact that the insured had been ordered by a state court to maintain his existing life insurance policy for the benefit of the three children of his first marriage. The insured initially complied with the state court divorce order but later designated his .second wife as sole beneficiary. While the facts of Ridgway appear to mirror those in the present case, there is a significant difference between the two. Ridgway concerned the Serviceman’s Group Life Insurance Act (SGLIA). As will be discussed infra, SGLIA sought to provide benefits for purposes other than those sought through the enactment of FEGLIA. Further, SGLIA has some important differences from FEGLIA which render it a more restrictive law.

Because an examination of the intent of Congress is the proper method of interpreting a federal statute, see Stribling v. U.S., 419 F.2d 1350, 1352 (8th Cir.1969), we must consider the purposes and policy of FEGLIA in order to determine whether Congress intended the Act to preempt state law claims. At the same time, it is instructive also to consider the purpose and policy of SGLIA, so that we may determine whether the reasoning in Ridgway is applicable to the matter at hand.

The enactment of SGLIA was an intention by Congress to make life insurance coverage available to active duty military personnel in combat zones during the Vietnam war. Rollins v. Metropolitan Life Insurance Co., 863 F.2d 1346, 1351 (1988). SGLIA followed and essentially replaced the National Service Life Insurance Act of 1940 (NSLIA), the purpose of which was to provide government insurance, payable to a service person’s beneficiary, in an effort to “directly enhance the morale of the serviceman,” a legitimate purpose within the congressional power to maintain a national defense. Wissner v. Wissner, 338 U.S. 655, 660, 70 S.Ct. 398, 400, 94 L.Ed. 424 (1950).

Federal law often seeks to afford special protections to military personnel. The Soldiers’ and Sailors’ Civil Relief Act, 50 U.S.C.App. § 501 et seq., grants service persons a variety of special protections, including the appointment of an attorney prior to the entry of a judgment in a divorce proceeding, the grant of a stay, postponement or suspension in the payment of taxes, fines, insurance premiums and other civil obligations, and numerous other protections unique to this specific group of citizens. In recognition of the federal government’s desire to afford such special protections, this Commonwealth places additional burdens on litigants to comply with and foster the federal laws. See Pa.R.Civ.P. 1920.46 (requiring plaintiff in a divorce action to file an affidavit of non-military service before entering a default judgment). Pennsylvania is cognizant of and fully supports these special protections afforded military personnel. As stated in Wissner, supra, the provisions of SGLIA advance those protections.

In contrast, when FEGLIA was first presented in 1954, then President Eisenhower stated that the Act had two main purposes. First, the Act allowed federal employees to “carry out their responsibilities to their families.” Second, the coverage provided “an essential element in the development of a comprehensive personnel program that applies to Government service the best practices of progressive, private employers.” Kidd v. Pritzel, 821 S.W.2d 566, 568 (1991) (citing 1954 U.S.Code Cong. & Admin.News, Volume 2 at 3053).

Not only was FEGLIA designed to put federal employees on par with private company workers, see Rollins, 863 F.2d at 1352 (“FEGLIA is therefore best viewed as the public service analog to private group insurance”), but its designation of beneficiary provision was adopted to prevent administrative difficulties for the Government (and the insurer) in deciding who should receive the proceeds of a policy. See Kidd, 821 S.W.2d at 569. The regulation addressing the naming of beneficiaries then, must be interpreted as an effort to advance this purpose. Id. at 574 (only reasonable applicability of § 870.902 is to promote expeditious payment of claims and relieve administrative burdens).

We find the differences in purpose underlying the two Acts to be significant. Also of significance is the fact that SGLIA includes an anti-attachment provision where FEGLIA does not. The provision exempts SGLIA proceeds from taxation, creditors’ claims, attachment, levy and seizure by any legal or equitable process before or after receipt by the beneficiary. 38 U.S.C. § 1970(g) (emphasis supplied). The Ridgway court, while holding the anti-attachment provision to be an independent ground for its refusal to impose a constructive trust, stated that “any diversion of the proceeds ... by means of a court-imposed constructive trust would ... operate as a forbidden seizure of the proceeds.” Ridgway, 454 U.S. at 60, 102 S.Ct. at 57. There is no comparable FEGLIA provision preventing the attachment of proceeds once they reach the named beneficiary.

With the knowledge of Congress’ purpose in enacting FEGLIA, we turn now to the standard by which we are to determine whether and to what extent federal preemption occurs. “State family and family-property law must do major damage to clear and substantial federal interests before the Supremacy Clause will demand that state law be overridden.” United States v. Yazell, 382 U.S. 341, 352, 86 S.Ct. 500, 506, 15 L.Ed.2d 404 (1966). It is beyond question that the Commonwealth’s interest in upholding, enforcing and encouraging property settlement agreements is compelling. See Hundertmark v. Hundertmark, 372 Pa. 138, 93 A.2d 856 (1952). It is especially compelling when the person the parent agreed to provide for is that parent’s child. See Torchia v. Torchia, 346 Pa.Super. 229, 499 A.2d 581 (1985) (children entitled to proceeds from father’s insurance policy even though he changed beneficiary to his second wife). As in Torchia, appellee’s cause of action in this matter was based upon his equitable interest in the proceeds of the policy which had been vested in him by his father’s agreement. Id. at 235, 499 A.2d at 584.

We do not believe that a state court-imposed constructive trust contravenes any of the federal interests underlying FEGLIA. Indeed, imposition of the trust insures that father carries out the responsibilities to his family which he has not only by virtue of his status as father but also by virtue of his voluntary promise in the Agreement. Further, there is no concern that the government or the insurance company will encounter any administrative difficulties as a result of our holding today. Appellant, as named beneficiary, was entitled to receive the proceeds from father’s policy. Upon payment to the named beneficiary, the government and the insurer are through with their duties and no longer are involved in the disposition of the proceeds. However, in the absence of an anti-attachment provision, the state is not precluded from “attaching” those proceeds through the imposition of a constructive trust after receipt by the beneficiary.

We have read with interest the cases cited by appellant which hold that the provisions of FEGLIA and rules promulgated thereunder preempt state domestic relations orders mandating that a specific beneficiary be named or remain as named. See Dean v. Johnson, 881 F.2d 948 (10th Cir.), cert. denied, 493 U.S. 1011, 110 S.Ct. 574, 107 L.Ed.2d 569 (1989); Mercier v. Mercier, 721 F.Supp. 1124 (D.N.D.1989); O’Neal v. Gonzalez, 653 F.Supp. 719 (S.D.Fla.1987), aff'd, 839 F.2d 1437 (1988); Metropolitan Life Insurance Co. v. McShan, 577 F.Supp. 165 (N.D.Cal.1983); Knowles v. Metropolitan Life Insurance Co., 514 F.Supp. 515 (N.D.Ga.1981).

We believe those cases followed the holding in Ridgway without careful consideration of the significant differences between FEGLIA and SGLIA. We find that the distinctions between the two statutes, and the policies underlying them, provide ample support for our holding in this matter. Further, we are confident that Congress did not intend that the vast number of federal employees in this country be permitted to enter into voluntary, state court-sanctioned agreements concerning the care and welfare of their children and then shirk completely the duties imposed by those agreements. The federal interest in doing so is far too minimal and the damaging impact to state domestic relations law far too grave.

Order affirmed.

      . The final decree provides that "[i]n the event the Estate satisfies all or any part of this award then the amount to be held by the Defendant [appellant] on behalf of the plaintiff [son] shall be correspondingly reduced.”

      . We are aware that appellant’s position is supported by some state and federal (district and circuit court) case law; however, we note that none of the cases on this topic is binding on this court. All of them have only persuasive, not precedential, value in the matter before us. Commonwealth v. Griffin, 407 Pa.Super. 15, 595 A.2d 101, 107 (1991) ("While decisions of the lower federal courts have a persuasive authority, they are not binding on Pennsylvania courts even where they concern federal questions); Appeal of Penn-Lehigh Corp. Upon Washington Twp. Route 29, Lehigh County, 191 Pa.Super. 649, 159 A.2d 56 (1960) (decisions of other states with identical issues are not binding on Pennsylvania courts).

      . If Congress wished to prevent such attachment it could have included in FEGLIA an anti-attachment provision similar to that in SGLIA.