author: MONTEMURO, Judge:

text:
    582 A.2d 17
    George KESTER and Pauline Grube Kester, Appellants, v. ERIE INSURANCE EXCHANGE, Appellee.
    Superior Court of Pennsylvania.
    Argued Oct. 4, 1990.
    Filed Nov. 5, 1990.

      Thomas B. Rutter, Philadelphia, for appellants.
    Frances A. Fruhwirth, Allentown, for appellee.
    Before MONTEMURO, JOHNSON and CERCONE, JJ.
   MONTEMURO, Judge:

This is an appeal from an Order of the Court of Common Pleas of Lehigh County granting appellee’s motion for judgment on the pleadings.

On September 27, 1986, Appellants sustained serious bodily injury when a vehicle, driven by one Frederick A. Richardson, crossed the center line and struck appellants’ automobile head on. An action was brought against the estate of Mr. Richardson, deceased, and concluded by payment of $50,000, the limits of the policy carried by Richardson’s insurer, in December of 1987. At this point appellants sought Underinsured Motorists’ Coverage (UIM), from their own insurer, appellee herein, and were informed, approximately a year later, that under the terms of the policy, they would be required to exhaust all available sources of liability insurance prior to asserting a claim for UIM. Specifically appellee averred that appellants were under a duty to pursue the Pennsylvania Department of Transportation for failure to maintain the roadway where the accident occurred. Appellants then filed a Complaint for Declaratory Judgment alleging that the exhaustion language contained in the insurance contract was contrary to the relevant provision of the Pennsylvania Motor Vehicle Financial Responsibility Law, 75 Pa.C.S.A. § 1701 et seq., and violative of public policy; appellants also denied any duty as against PennDOT. Appellee’s Answer and New Matter contained the assertion that in fact suit had been filed against the transportation authority, a statement vigorously denied by appellants’ Reply. Both parties filed petitions for judgment on the pleadings, and the trial court ruled in favor of appellee on the basis that the exhaustion provision was both unambiguous and enforceable, and that any claim such as appellants’ was arbitrable and should be disposed of in that manner. This appeal followed.

Before addressing the substantive issues presented by appellant, we must turn to appellee’s claim that because the order entered by the trial court referred this case to common law arbitration, it is not final and appealable. Appellee cites Wilson v. Keystone Insurance Company, 289 Pa.Super. 101, 432 A.2d 1071 (1981), in support of its contention that because the clause makes arbitrable “Disagreement over the legal right to recover damages or the amount of damages ...” without specific reference to the Uniform Arbitration Act of 1980, 42 Pa.C.S.A. § 7301 et seq., common law arbitration is implicated. Appellee’s reliance is misplaced. In Wilson no mention at all was made of the statute, whereas here, the section of the policy entitled “Arbitration,” after outlining the procedures necessary to commence the arbitration process, concludes with the following:

In all other respects, any arbitration will follow the statutory arbitration provisions of the Pennsylvania Uniform Arbitration Act (42 Pa.C.S.A. Sections 7301 through 7320).

We find this a sufficiently clear statement of intent to bring the statute into play and thus render the order final.

Even were it not enough, however, this court in Daley-Sand v. West American Insurance Company, 387 Pa.Super. 630, 564 A.2d 965 (1989), held that:

The law is clear that, although a case turning on the application or construction of an uninsured motorist clause is within the exclusive jurisdiction of the arbitration system, when the issue is whether a particular provision of the contract is contrary to a constitutional, legislative or administrative mandate, the courts properly exercise their jurisdiction over the entire matter.

Id., 387 Pa.Superior Ct. at 637, 564 A.2d at 969. (citations omitted).

Daley-Sand concerned whether the terms of a consent to settle clause nullified the Motor Vehicle Responsibility Law requirement of underinsured motorist coverage. We find that its holding permits us to take cognizance of appellants’ claim that the Law is violated by the exhaustion clause contained in their policy. See also, Wilbert v. Harleysville Mutual Insurance Company, 254 Pa.Super. 217, 385 A.2d 987 (1978).

The standard governing our assessment of the propriety of a judgment entered on the pleadings is that:

we must accept as true all well pleaded statements of fact of the party against whom the motion is granted and consider against him only those facts that he specifically admits. West Penn Administration, Inc. v. Pittsburgh National Bank, 289 Pa.Super. 460, 467, 433 A.2d 896, 900 (1981) (citations omitted); Zelik v. Daily News Publishing Co., 288 Pa.Super. 277, 431 A.2d 1046 (1981); see also Wojciechowski v. Murray, 345 Pa.Super. 138, 497 A.2d 1342 (1985).... We will affirm the grant of such a motion only when the moving party’s right to succeed is certain and the case is so free from doubt that the trial would clearly be a fruitless exercise. Gallo v. J.C. Penney Casualty Insurance Co., 328 Pa.Super. 267, 476 A.2d 1322 (1984); see also Bata v. Central-Penn National Bank of Philadelphia, 423 Pa. 373, 224 A.2d 174 (1966), cert. denied, 386 U.S. 1007, 87 S.Ct. 1348, 18 L.Ed.2d 433 (1967); Wojciechowski, 345 Pa.Super. at 139, 497 A.2d at 1343.

Jones v. Travelers Insurance Company, 356 Pa.Super. 213, 217, 514 A.2d 576, 578 (1986).

Section 1731 of the Motor Vehicle Financial Responsibility Law reads as follows:

(a) General rule.—No motor vehicle liability insurance policy shall be delivered or issued for delivery in this Commonwealth, with respect to any motor vehicle registered or principally garaged in this Commonwealth, unless uninsured motorist and underinsured motorist coverages are provided therein or supplemental thereto in amounts equal to the bodily injury liability coverage except as provided in section 1734 (relating to request for lower or higher limits of coverage)____
(c) Underinsured motorist coverage.—Underinsured motorist coverage shall provide protection for persons who suffer injury arising out of the maintenance or use of a motor vehicle and are legally entitled to recover damages therefor from owners or operators of underinsured motor vehicles.

The policy of insurance carried by appellee reads, in pertinent part, as follows:

When the accident involves underinsured motor vehicles, we will not have to pay until all other forms of insurance applicable at the time of the accident have been exhausted by payment of their limits. Other forms of insurance include, but are not limited to:
(1) motor vehicle liability insurance.
(2) any other liability insurance.
(3) self-insurance plans, which include bonds, securities
or cash deposits.

Appellee’s refusal to pay appellants’ claim has been premised on the theoretical liability of PennDOT for failure to maintain the roadbed. In its brief, however, appellee is careful to avoid such an overt delegation of responsibility, although it does reiterate the statement, categorically denied by appellants, that suit was brought against the state agency. Even were liability assignable to PennDOT under some set of facts, the central focus of both the legislative enactment and the policy itself clarifies appellee’s obligation: underinsured motorist coverage is recompense for injuries caused by owners and operators of motor vehicles only. There is no mention that appellee’s responsibility to an insured is relieved by, e.g., recovery from a related product liability claim. Such contingencies can be dealt with under appellee’s right of subrogation. Again, the phrase “underinsured motorist” refers to a tortfeasor who has caused the injury while in the process of maintaining or operating an automobile, and does not implicate those who maintain and operate the roads driven upon.

That this is so clearly appears from the terms of the applicable section of appellants’ insurance policy.

OUR PROMISE—UNDERINSURED MOTORISTS COVERAGE

We will pay damages that the law entitles you or your legal representative to recover from the driver or owner of an underinsured motor vehicle. Damages must result from an accident arising out of the maintenance or use of the underinsured motor vehicle, (emphasis supplied).
As all the parties to this action freely acknowledge, The language of the statute itself suggests that uninsured motorist coverage requires the existence of at least two applicable policies of motor vehicle insurance. See 75 Pa.C.S. § 1731(c). An underinsured motor vehicle, must by definition, be an insured vehicle. Thus the statute contemplates one policy applicable to the vehicle which is at fault in causing the injury to the claimant and which is the source of liability coverage (which is ultimately insufficient to fully compensate the victim), and a second policy, under which the injured claimant is either an insured or a covered person. It is the second policy which the statute contemplates as the source of underinsured motorist coverage, where the liability coverage provided by the first policy of insurance is insufficient to fully compensate the claimant for his injuries.

Wolgemuth v. Harleysville Mutual Insurance Company, 370 Pa.Super. 51, 58, 535 A.2d 1145, 1149 (1988).

Our supreme court, in defining the broad scope and remedial purpose of the statute noted that it was intended,

“to afford financial recompense to persons who receive injuries ... solely through the negligence of motorists, who, because they are uninsured and not financially responsible cannot be made to satisfy a judgment.” Johnson v. Concord Mutual Insurance Company, 450 Pa. 614, 619, 300 A.2d 61, 64 (1973) (citation omitted); Patrick v. Cherokee Insurance Co., [354] Pa.Super. [427], 512 A.2d 24, 26 (1986).

Jones, supra, 356 Pa.Super. at 219, 514 A.2d at 579.

There is no authority in Pennsylvania for the proposition that exhaustion clauses per se are contrary to the intent of the legislature or violative of constitutional or administrative mandates. This question is, in any event, not before us. We are limited to a determination of whether the particular exhaustion clause contained in appellant’s policy is contrary to public policy as expressed in the underinsured motorist statute. We find that it is.

The clause contained in appellants’ policy expands the field of those liable to include anyone from whom recovery for appellants’ injuries might be imagined possible. Given the breadth of the exhaustion clause, these imaginings apparently need have no factual underpinning, nor any real relation to the purpose of underinsured motorist coverage. However, as the statute, its commentators, and the policy language make clear, only owners or operators of motor vehicles are included within the circle of those liable under the underinsurance procedure. The all-inclusive language of the clause is too broad, and too far beyond the intention of the statutes’ framers.

Order reversed.

      . Mr. Richardson’s demise was apparently unrelated to the accident with appellants.

      . The superior court of New Jersey, in dealing with whether certain aspects, including exhaustion clauses, of underinsured motorist clauses noted:
      [W]hile a seriously injured innocent victim whose tortfeasor is uninsured has an immediate right to resort to the contractual coverage he purchased from his liability carrier, the seriously injured victim who has the misfortune to become involved with a minimally insured tortfeasor may have to wait years before being able to resort to his contractual coverage.

        Longworth v. Van Houten, 223 N.J.Super. 174, 192, 538 A.2d 414, 424 (1988).


source: Caselaw Access Project

author: DEL SOLE, Judge:

license: Public Domain

text:
    582 A.2d 21
    MERITOR SAVINGS BANK f/k/a Philadelphia Savings Fund Society, Appellee, v. Carmen BARONE and Marian Barone, h/w and Howard McClurd and Germantown Insurance Co., Appellee. Appeal of Carmen and Marian BARONE, Appellants.
    Superior Court of Pennsylvania.
    Argued Sept. 5, 1990.
    Filed Nov. 8, 1990.

      James J. DeMarco, Philadelphia, for appellants.
    Paul J. Gelman, Philadelphia, for Meritor Sav., appellee.
    Before OLSZEWSKI, DEL SOLE and HUDOCK, JJ.
   DEL SOLE, Judge:

Appellants appeal a trial court order which granted Meritor Savings Bank’s (the Bank’s) motion for Summary Judgment in a mortgage foreclosure action and dismissed Appellants’ New Matter/Counterclaim. Appellants contend that the trial court “properly granted summary judgment on the debt but erred when it dismissed [their] Counterclaim.” Appellants’ Brief at iii. We agree with Appellants’ contention and reverse the trial court order dismissing their counterclaim.

Appellants executed a mortgage with the Bank in 1985 and simultaneously purchased disability insurance through the Bank. Appellant Carmen Barone became disabled in October of 1986 and his monthly payments were thereafter made by Germantown Insurance Company, who was assigned Mr. Barone’s policy. When Germantown refused to provide further coverage in 1988 and Appellants’ mortgage payments fell into default, the Bank filed a Complaint in Mortgage Foreclosure. Appellants responded with an Answer, New Matter and Counterclaim. Therein they claimed that the Bank was negligent in obtaining the required disability insurance. Appellants also filed a Complaint naming Germantown as an additional defendant.

Upon consideration of a motions for Summary Judgment filed by the Bank, the trial court awarded judgment in its favor and dismissed Appellants’ counterclaim. The trial court concluded, from the agreed upon facts, that Appellants were in default. The trial court reasoned that the counterclaim must be dismissed because the only defense offered was that the payments should have been made by Germantown and this contractual relationship is irrelevant to the action in mortgage foreclosure between Appellants and the Bank. In support of the trial court’s ruling the Bank further submits that the counterclaim presented by Appellants should be stricken because the claims made therein were not part of, or incident to, the creation of the mortgage as required by Pa.R.C.P. 1148. We conclude, contrary to the Bank’s position, that the counterclaim raised by Appellants was properly plead in this mortgage foreclosure action. In addition we find that the trial court neglected to note the viable negligence claim made by Appellants against the Bank.

The counterclaim at issue is not based upon German-town’s failure to pay the disability insurance; rather, Appellants claim that the Bank negligently failed to provide Appellants with the insurance for which they contracted. Attached to the counterclaim is a copy of the disclosure form required under the Truth and Lending Act which is dated the same date as mortgage document. A cost of $1,223.59 is listed for Credit Life and Disability Insurance. Disability Insurance is described as:

DISABILITY INSURANCE: Pays your monthly payment, up to $450, if you become totally disabled for 30 days while insured. Total disability means that you can’t perform your job. After 30 days, it pays as long as you remain disabled during your loan term.

(Emphasis added.)

Appellants allege that Carmen Barone became disabled in 1986 and that he remains totally and permanently disabled as defined in the disclosure form—he “can’t perform [his] job.” This fact is not contested by the Bank. The insurance carrier, Germantown, has denied coverage under the terms of its policy which refuses coverage “after the initial 12 month period of total disability unless [the insured] is unable to perform 'any occupation or employment for which he is reasonable qualified by reason of education, training or experience.’ ” Because Mr. Barone was permitted to return to a light duty or sedentary-type of work, coverage ceased after the first 12 months.

Appellants allegations against the Bank concern the Bank’s responsibility in procuring the agreed insurance. The fact that some disability insurance was acquired and paid by an insurer is not at issue. What is of import is the question of whether the Bank obtained for Appellants the insurance described in it’s disclosure form. The different definitions of the disability insurance in the disclosure form and in the actual insurance contract form the basis of Appellants counterclaim. If, as Appellants suggest, the Bank failed to provide them with the insurance it agreed to provide, and if as a result of this failure Appellants have been unable to receive disability payments on their mortgage which has caused it to go into default, then Appellants may be able to recover the sum due and clear their default.

The Counterclaim made by Appellants is an appropriate response to the Bank’s mortgage foreclosure complaint. Counterclaims in mortgage foreclosure actions are governed by the terms of Pa.R.C.P. 1148, which provide:

A defendant may plead a counterclaim which arises from the same transaction or occurrence or series of transactions or occurrences from which the plaintiff’s cause of action arose.

In Mellon Bank, N.A. v. Joseph, 267 Pa.Super. 307, 406 A.2d 1055 (1979) the court affirmed an order striking the appellants two counterclaims. The court ruled: “Here, the counterclaims appellant seeks to assert are remedial; they arose once the mortgage was in default, but were not part of, or incident to, the creation of the mortgage itself.” 406 A.2d at 1060. Unlike the counterclaims in Mellon Bank, the Counterclaim in the instant case arose as part of, or incident to, the creation of the mortgage. The disclosure form, dated the same date as the mortgage document, states:

You, the Borrower, may buy Credit Life Insurance in connection with your installment loan. If you buy Credit Life Insurance, you may also buy Credit Disability Insurance if you are less than age 65.

(emphasis added.)

Appellants counterclaim, based upon the Banks’ failure to provide the disability insurance for Appellants outlined in the disclosure form, met the requirements of the rule. In connection with the mortgage the Bank undertook an obligation to provide a defined form of disability insurance. The Banks’ failure to meet this obligation is the proper subject of a counterclaim to the foreclosure action.

Because Appellant does not dispute that portion of the trial court order which rules in the Bank’s favor and enters Summary Judgment in the mortgage foreclosure action, we affirm that portion of the trial court order. For the reasons outlined above, we reverse that portion of the trial court order which dismisses Appellants’ counterclaim. Because of the our decision to reinstate the counterclaim, which may prove to be a set-off to the amount Appellants are in default, we direct the trial court to stay any action on the Bank’s judgment in the mortgage foreclosure action until the counterclaim is resolved.

Order affirmed in part, reversed in part. Case remanded for proceedings consistent with this opinion. Jurisdiction relinquished.


author: ROWLEY, Judge:

text:
    582 A.2d 23
    Kurt A. and Janice FETZER v. J. Richard VISHNESKI, Appellant.
    Superior Court of Pennsylvania.
    Argued Sept. 12, 1990.
    Filed Nov. 8, 1990.

      Frank W. Hayes, West Chester, for appellant.
    Jamie W. Goncharoff, Dowington, for appellees.
    Before ROWLEY, McEWEN and CERCONE, JJ.
   ROWLEY, Judge:

This appeal by J. Richard Vishneski arises from a judgment entered against him in an action for breach of an implied warranty of habitability. Appellees, Kurt and Janice Fetzer, entered into a construction contract with appellant for the construction of a new home for appellees, and construction was completed in September, 1984. Approximately six months after moving into their new house, appellees noticed that one of the house’s eight skylights was leaking. Eventually, all eight of the skylights began leaking.

During the next six to nine months, appellees telephoned and wrote to appellant approximately twenty to thirty times and asked him to stop the leaking. When appellant did not take any action to fix the leaking, appellees contacted Loomis Brothers, another construction firm. Loomis Brothers informed appellees that the skylights, which were made of plastic, had been improperly installed (TT 3/29/1989, p. 15), were rippled (TT 3/29/1989, p. 17-19), and could not be fixed. According to Loomis Brothers, the only way to stop the leaking would be to replace the skylights. Loomis Brothers replaced the skylights, and appellees, claiming appellant had breached his implied warranty of habitability, sued appellant to recover the cost of replacing the skylights.

The trial court, sitting without a jury, found in favor of appellees and awarded them $6,575.00, including $5,100.00 for the replacement cost of the skylights. Both parties filed post-trial motions which were denied. Judgment was entered in favor of appellees, and appellant appealed from that judgment. Appellant raises three issues on appeal: 1) the trial court erred in awarding appellees the $5,100.00 replacement cost because appellees failed to establish construction defects on the part of appellant; 2) the trial court incorrectly chose “replacement” as the measure of damages when repairs were feasible; or 3) in the alternative, if repairs were not feasible, the correct measure of damages was the diminution in fair market value. Having carefully reviewed the record and considered the arguments presented, we affirm.

The doctrine of implied warranty of habitability, as it applies to builder-vendors, was adopted by the Supreme Court of Pennsylvania in Elderkin v. Gaster, 447 Pa. 118, 288 A.2d 771 (1972). The Court said: “We thus hold that the builder-vendor impliedly warrants that the home he has built and is selling is constructed in a reasonably workmanlike manner and that it is fit for the purpose intended—habitation.” Id., 447 Pa. at 128, 288 A.2d at 777. The warranty of habitability is implied by law into every contract for the sale of a new home. Ecksel v. Orleans Constr. Co., 360 Pa.Super. 119, 519 A.2d 1021 (1987).

Appellant first argues that there was insufficient evidence for the trial court to find that the leakage appellees experienced was caused by appellant’s improper installation of the skylights. In reviewing the sufficiency of the evidence, we view the evidence in the light most favorable to the verdict winner, the appellees in the present case. Our sole task is to decide if there was sufficient evidence to sustain the verdict. Fannin v. Cratty, 331 Pa.Super. 326, 480 A.2d 1056 (1984). When sitting without a jury, the trial court acts as the finder of fact, and the trial court’s findings have the same force and effect as a jury verdict. Rizzo v. Haines, 357 Pa.Super. 57, 515 A.2d 321 (1986), aff'd., 520 Pa. 484, 555 A.2d 58 (1989); Cover v. Cushing Capital Corp., 344 Pa.Super. 593, 497 A.2d 249 (1985). These findings will not be reversed “unless they are unsupported by competent evidence.” Cover, at 598, 497 A.2d at 252 (citations omitted).

In the instant case, appellant is relying on only the evidence presented by himself and Mr. Keehn, an independent contractor who works for appellant, in contending that the windows were properly installed. Appellees’ evidence showed that the windows were improperly installed. The trial court found that Mr. Bonney, a Loomis Brothers employee testifying for appellees, testified that “the skylights had been improperly installed, that they were made of cheap and ‘lousy’ material, and that their condition was such that they had to be replaced.” (TC Op. 4/24/90 at 2, 3). The trial court found Mr. Bonney’s testimony to be more credible than the testimony of Mr. Keehn, who testified for appellant and who “merely visually inspected Mr. Fetzer’s home for fifteen minutes on the day of trial; he took no measurements and he did not even climb onto the roof.” (TC Op. 4/24/90 at 3). “It is within the province of the trial judge, sitting without a jury, to judge the credibility of witnesses and to weigh their testimony.” Allegheny County v. Monzo, 509 Pa. 26, 35, 500 A.2d 1096, 1101 (1985). The trial court further found that, after the skylights were replaced, appellees had no further leakage problems. These findings are amply supported by the record.

Moreover, even if the trial court had found that appellant had properly installed the windows, that fact would not relieve appellant from liability for breach of the implied warranty of habitability if the windows unequivocally leaked. The leakage itself is sufficient to breach the implied warranty of habitability. Ecksel v. Orleans Constr. Co., 360 Pa.Super. 119, 519 A.2d 1021 (1987) (leaky basement breaches the warranty of habitability); Tyus v. Resta, 328 Pa.Super. 11, 476 A.2d 427 (1984) (leaky crawlspace breaches the warranty of habitability). The evidence in the record is more than sufficient to support the trial court’s conclusion that appellant breached the implied warranty of habitability.

Appellant’s next two issues deal with the measure of damages applied by the trial court. In essence, appellant is arguing that appellees’ evidence on damages is insufficient to support the verdict of $5,100.00. Appellant first argues that the trial court erred in using “replacement cost” as the measure of damages when repairs were feasible. Damages for the defective performance of a building contract are often measured by looking to “the cost of ... correcting the defects by another contractor.” Douglass v. Licciardi Constr. Co., Inc., 386 Pa.Super. 292, 297, 562 A.2d 913, 915-16 (1989). In the instant case, the defect that needed to be corrected was the leakage from the skylights. Appellant submits that remucking would have constituted an inexpensive and feasible repair. Once again, we are bound by the trial court’s findings of fact. The trial court found that remucking would not have stopped the leaking and that the skylights’ defects could be remedied only by being replaced. (TC Op. 4/24/90 at 4). Thus, the correct measure of damages was the cost of correcting the leakage, and the amount of damages was the replacement cost of the skylights.

Appellant argues, in the alternative, that if remucking were not feasible, the correct measure of damages should have been the difference in fair market value of the house as warranted and as built, rather than the replacement cost of the windows. Both replacement cost and diminution in market value are recognized measures of damages for breach of an implied warranty of habitability. Diminution in market value is an appropriate measure of damages if the building as a whole has been impaired, or if the cost of remedying the defects is grossly disproportionate to the diminution in market value. The fact that the cost of replacement somewhat exceeds the diminution in market value does not bar the homeowner from recovering the cost of replacement.

Further, once the homeowner has presented evidence as to the cost of remedying the defects, the burden is on the contractor to challenge this evidence.

If the owner has had the repair or completion performed at the time of trial, the amount paid by the owner may be presumed to be reasonable, subject to rebuttal evidence by the contractor. The amount actually paid by the owner to another contractor for correction of the defective work, within a reasonable time after the breach, is strong and reliable evidence in determining the time and amount of damages.

Annotation, Modern Status of Rule as to Whether Cost of Correction or Difference in Value of Structures is Proper Measure of Damages for Breach of Construction Contract, 41 A.L.R.4th 131 § 9 (1985) (citations omitted, emphasis added). In the instant case, appellees presented the testimony of Mr. Bonney, the contractor who had replaced the skylights. Mr. Bonney testified as to the necessity and cost of replacement. Appellant failed to rebut this evidence. He introduced no evidence of his own as to the diminution in market value. In fact, as the trial court noted:

Defendant did not present any credible evidence as to repair versus replacement. Likewise, he did not challenge the reasonableness of the $5,100.00 cost of replacement with any credible evidence.

(TC Op. 4/24/90 at 4). Since appellant failed to rebut appellees’ evidence as to the cost of replacement, and since the leakage and the need for replacement are supported by competent evidence, the trial court correctly awarded appellees the replacement cost of the skylights.

We further note that appellant’s reliance on Gadbois v. Leb-Co. Builders, Inc., 312 Pa.Super. 144, 458 A.2d 555 (1983), is misplaced. Gadbois involved an action by homeowners against a contractor who had installed defective sewage systems in their homes. When sewage began to back up, the contractor merely dug pits to collect the sewage; he did not attempt to fix the defective systems. In the ensuing breach of warranty of habitability action, the homeowners presented evidence that the diminution in fair market value of the homes as warranted and as built was approximately $18,000.00 each. In their defense, the defendants presented evidence that the defective sewage systems could be repaired by replacing them with “conventional subsurface sewage disposal system[s] with septic tank[s]” at the cost of $2,750.00 each. Id., 312 Pa.Superior Ct. at 153, 458 A.2d at 560. Finding that the testimony of the contractor’s witness, that repairs were feasible, was not credible, the court awarded the homeowners the diminution in fair market value.

Thus, in Gadbois, the homeowners presented evidence as to diminution in market value, and the contractor attempted to rebut this evidence with testimony as to replacement cost. In the instant case, the homeowners presented evidence as to replacement cost. However appellant made no effort to rebut this evidence by presenting evidence as to diminution in market value. Having failed to meet his burden of rebuttal at trial, appellant cannot argue on appeal that he should now be given an opportunity to rebut appellees’ evidence.

Judgment affirmed.

      . Appellees sued appellant for other defects as well, including defects in the driveway, floors, roof, breakfast room, floor framing and for water damage caused by the leaking skylights. However only the $5,100.00 awarded as the replacement cost of the skylights is at issue in this appeal.

      . Both parties agree that the measure of damages is the reasonable cost of remedying the defects. (Appellant’s Brief, p. 8, 9; Appellees’ Brief, p. 12). However, appellant appears (mistakenly) to assume that remedying the defects encompasses only repairing and not replacing the skylights.

      . “[I]f the defects or omissions are remediable only at great expense, or if defective material has become an inherent part of the building so that the defect cannot be remedied except by taking down and doing over some substantial portion of the work, involving such an expenditure that the contractor would be deprived of adequate compensation, the amount allowable to the owner is the difference between the value of the building or structure as constructed and the value which it would have had if it had been constructed in entire conformity with the contract requirements." 13 Am.Jur.2d Building and Construction Contracts § 80 (1964).

      . "[S]ometimes, especially if a contractor’s performance is defective rather than incomplete, it is impossible to prove the loss in value to the owner with reasonable certainty. In that case ... the owner can usually recover damages based on the cost to remedy the defects, even if this gives the owner a recovery somewhat in excess of the loss to him or her____ [I]t is better that the owner receive a small windfall than that the owner be undercompensated by being limited to the resulting diminution in the market price of the property.” Annotation, Modem Status of Rule as to Whether Cost of Correction or Difference in Value of Structures is Proper Measure of Damages for Breach of Construction Contract, 41 A.L.R.4th 131 § 23 (1985), citing Restatement (Second) of Contracts § 348, comment c (1981).
      "Where the cost of remedying the defects in construction is not clearly disproportionate to the probable loss in value to the injured party, the breaching contractor cannot require that the injured party’s damages be measured by the difference between the market price of the property without the defects and the price of the property with the defects.” Douglass, at 297, 562 A.2d at 916.


text:
    582 A.2d 27
    Paul R. ROSEN, Esquire, Spector Cohen Gadon & Rosen, P.C., Robert J. Bolton and George E. Meyer, Appellants, v. TESORO PETROLEUM CORPORATION, Robert V. West, Jr., M. Richard Stewart, William H. Hall, R. Laurence Macon, Esquire, Cox & Smith, Incorporated, Daryl Bristow, Esquire and Miller Keeton Bristow & Brown, Appellees. Paul R. ROSEN, Esquire, Spector Cohen Gadon & Rosen, P.C., Robert J. Bolton, Leo A. Walker, III, George E. Meyer, Appellants, v. TESORO PETROLEUM CORPORATION, Robert V. West, Jr., M. Richard Stewart, William H. Hall, R. Laurence Macon, Esquire, Cox & Smith, Incorporated, Appellees.
    Superior Court of Pennsylvania.
    Argued Oct. 4, 1990.
    Filed Nov. 8, 1990.

      Daniel J. Dugan, Philadelphia, for appellants.
    Steven L. Friedman & Virginia H. Miller, Philadelphia, for appellees.
    Before MONTEMURO, JOHNSON and CERCONE, JJ.
   MONTEMURO, Judge:

Appellants, Paul R. Rosen, Esq., Spector Cohen Gadon & Rosen, P.C., Robert J. Bolton, George E. Meyer, and Leo A. Walker, III, appeal from an order granting defendants-appellees’ motion for summary judgment. The record reveals that appellee Tesoro unsuccessfully sued appellants in Texas state court for conversion, trespass, misappropriation of information, insider trading and civil conspiracy. Appellants then brought this action seeking redress for malicious prosecution, malicious abuse of process, malicious misuse of criminal proceedings, and conspiracy arising out of the Texas suit. The issue on appeal is whether the substantive law on malicious prosecution and abuse of process should be determined by Texas or Pennsylvania law. We agree with the trial court’s conclusion that Texas law on malicious prosecution should apply, and therefore we affirm the grant of summary judgment.

We will uphold a grant of summary judgment only in those cases in which the pleadings, depositions, answers to interrogatories, and admissions on file show that there are no genuine issues of material fact, and the moving party is entitled to judgment as a matter of law. Pa.R.C.P. 1035(b). In reviewing a grant of summary judgment, we accept as true all well-pleaded facts in the non-moving party’s pleadings and give the non-moving party the benefit of all reasonable inferences to be drawn therefrom. Lookenbill v. Garrett, 340 Pa.Super. 435, 490 A.2d 857 (1985).

In 1982, appellants, Paul Rosen, a Pennsylvania attorney, and Spector Cohen Gadon & Rosen, a Pennsylvania law firm, instituted class-action litigation in federal court on behalf of appellants Robert Bolton, Leo Walker, III and George Meyer against appellees Tesoro Petroleum Corporation (“Tesoro”), Robert West, Jr. (Chairman of the Board of Tesoro), M. Richard Stewart (General Counsel, Senior Vice-President and Secretary of Tesoro), and other officers and directors of Tesoro, alleging, inter alia, securities fraud and market manipulation. Appellant Bolton, represented by appellants Rosen and Spector Cohen Gadon & Rosen, also brought a shareholder derivative action in federal court against appellees Tesoro, West, Stewart and other officers and directors of Tesoro, alleging corporate mismanagement, waste and breach of fiduciary duty. These two actions, originally filed in the Eastern District of Pennsylvania, were consolidated and transferred to the Western District of Texas where they were tried together. The jury rendered a verdict in favor of the defendants on all counts. The United States Court of Appeals for the Fifth Circuit affirmed the judgment, Bolton v. Tesoro Petroleum Corp., 871 F.2d 1266 (5th Cir.1989), and the United States Supreme Court denied certiorari.

While the federal class-action suit was under way, appellee Tesoro, represented by appellees R. Laurence Macon, Esq., Daryl Bristow, Esq., Cox & Smith, and Miller Keeton Bristow & Brown, brought an action in Texas state court against appellants herein, alleging trespass, conversion, invasion of privacy, unlawful trading on the basis of insider information, misappropriation of information, breach of fiduciary duty and civil conspiracy. Shortly before trial, Tesoro abandoned the majority of its claims. The trial court directed a verdict on the remaining claim for misappropriation of information. The Texas Court of Appeals affirmed the judgment of the trial court and the Texas Supreme Court denied Tesoro’s application for a writ of error.

Appellees also allegedly conspired to develop a plan to convince the District Attorney of Bexar County, Texas to institute unfounded criminal proceedings against appellants and others, although the District Attorney never took any action against appellants.

In 1986 and 1988, appellants instituted these two actions in the Philadelphia Court of Common Pleas, alleging identical claims of (1) malicious prosecution; (2) malicious abuse of process; (3) misuse of criminal proceedings; and (4) civil conspiracy on the part of appellees in bringing the prior litigation in Texas state court. In considering appellees’ motion for summary judgment, the trial court determined that Texas law on malicious prosecution and abuse of process should apply, and that appellants had failed to state a cause of action for these claims under Texas law. The trial court also concluded that neither Texas nor Pennsylvania recognized a cause of action for “malicious misuse of criminal proceedings to give an advantage in civil proceedings.” Finally, the court held that appellants failed to make out a claim for civil conspiracy, as the conspiracy claim was predicated on the other three claims which were struck down for failure to state a cause of action.

In order to successfully state a claim under Pennsylvania law for malicious use of process, commonly referred to as malicious prosecution, the claim must allege (1) that a person who participated in the underlying proceedings acted in a grossly negligent manner or without probable cause; (2) that the person acted with a malicious purpose; and (3) that the proceedings were terminated in favor of the defendant in the underlying proceeding. 42 Pa.C.S.A. § 8351(a)(1) and (2); Shaffer v. Stewart, 326 Pa.Super. 135, 140, 473 A.2d 1017 (1984). Importantly, seizure or arrest of person or property is no longer a necessary element to the cause of action in Pennsylvania, 42 Pa.C.S.A. § 8351(b), as our legislature has abolished the common law rule which held that an action for malicious use of process could not be brought absent a seizure of the plaintiffs person or property. Ludmer v. Nernberg, 520 Pa. 218, 553 A.2d 924, 925 (1989). In this respect, Pennsylvania law differs from Texas law which requires that the party alleging malicious prosecution have suffered the special damage of “actual interference with the defendant’s person (such as an arrest or detention) or property (such as an attachment, an appointment of receiver, a writ of replevin or an injunction).” St. Cyr v. St. Cyr, 767 S.W.2d 258, 259 (Tex.App.—Beaumont 1989), error denied, (citations omitted). “This means ‘actual physical detention of a person or seizure of his property.’ ” Id.

As appellants have not alleged any interference with their person or property as a consequence of the Texas state court action, application of Pennsylvania law is the more attractive option to them, and hence they argue that Pennsylvania is the proper choice of law. Conversely, Texas law is more favorable to defendants charged with malicious prosecution, and appellees urge us to find that Texas law applies to the instant matter.

In deciding choice of law questions, we first must determine whether a true conflict exists between the laws of the two states, and, if a true conflict is present, we must analyze the governmental interests underlying the issue and determine which state has the greater interest in the application of its law. Cipolla v. Shaposka, 439 Pa. 563, 267 A.2d 854 (1970).

Our examination of the policies behind the competing laws of Pennsylvania and Texas leads us to the conclusion that a conflict of laws truly exists in this case. The policy underlying Texas’ rule that a party alleging malicious prosecution must have suffered some interference with his or her person or property as a result of the original suit has been summarized as follows:

The special damage rule was initially adopted by our Supreme Court for policy reasons to assure every potential litigant free and open access to the judicial system without fear of a countersuit for malicious prosecution. As stated by our Supreme Court over a hundred years ago in Salado College v. Davis, 47 Tex. 131, 135-36 (1877):

In ordinary cases, where no further wrongful act is complained of than the institution of a groundless suit, though done knowingly and with intent to harass, the award of cost is, in contemplation of law, full compensation for the unjust vexation. (Citation omitted).
In such cases, the defendant recovers his cost ‘but no allowance is made for his time, indirect loss, annoyance, or counsel fees----’ Every defendant against whom an action is ‘unnecessarily’ brought, experiences some injury or inconvenience beyond what the costs will compensate him for.’ This injury or inconvenience results from a resort to the legally-constituted tribunals; and it seems to be the policy of the law to content itself with meting out something less than our ideas of natural justice would demand, rather than to increase the risks attending and discouraging such a resort, and at the same time add to the difficulties and intricacies of ordinary litigation.

Martin v. Trevino, 578 S.W.2d 763, 767 (Tex.Civ.App. 13th Dist.1978), error refused. Thus, the Texas courts have opted in favor of assuring that litigants have open access to the judicial system without fear of intimidation by a countersuit for malicious prosecution. Texas’ interest is implicated in this case because the underlying suit was brought in Texas state court by a Texas organization.

On the other hand, by making it easier to establish a case of malicious prosecution, the Pennsylvania legislature has expressed an interest in providing greater protection to those individuals and entities who may be forced to defend a baseless suit. Pennsylvania’s interest in protecting its citizens from being subjected to a maliciously brought lawsuit is involved in this case, as three of the defendants in the underlying Texas state suit are Pennsylvania residents. Thus, this is not a case of “false conflict,” because either state’s interests would be disserved by the application of the other state’s law on malicious prosecution. Cf McSwain v. McSwain, 420 Pa. 86, 215 A.2d 677 (1966) (application of Pennsylvania’s law on interspousal immunity would not disserve Colorado’s interest in deterring negligent conduct on its highways).

In light of these competing policies and interests, we now must determine whether Pennsylvania or Texas has the greater interest in the application of its law on malicious prosecution to the instant matter. Griffith v. United Air Lines, Inc., 416 Pa. 1, 203 A.2d 796 (1964).

Whether the policies of one state rather than another should be furthered in the event of conflict can only be determined within the matrix of specific litigation. What should be sought is an analysis of the extent to which one state rather than another has demonstrated, by reason of its policies and their connection and relevance to the matter in dispute, a priority of interest in the application of its rule of law.

McSwain v. McSwain, supra 420 Pa. at 94, 215 A.2d at 682.

Upon considering the respective interests of the two states involved and the degree to which their policies are implicated by the facts in the instant suit, we agree with the trial court that Texas has the greater interest in the application of its law on malicious prosecution in this case.

Pennsylvania’s interest in discouraging maliciously brought suits which require its citizens to spend time and money defending themselves is implicated herein by the fact that three of the plaintiffs in this suit are Pennsylvania citizens who were sued in the Texas state suit. We note that although Pennsylvania has an interest in protecting the three Pennsylvania citizens who were defendants in the Texas suit, Pennsylvania’s concerns are in no way affected with regard to the two remaining plaintiffs (defendants in the Texas state suit) who are citizens of Texas.

The underlying suit was brought in Texas on behalf of a Texas corporation by members of the Texas bar and two Texas law firms, seeking redress for alleged wrongs, namely conversion, trespass, misappropriation of information and insider trading, which took place in Texas. According to appellants’ complaint, the Texas suit was brought in retaliation for the appellants’ participation in a federal class action suit also taking place in Texas against a Texas corporation (Tesoro) and its officers and directors. The federal litigation concerned alleged securities fraud and corporate waste and mismanagement occurring in Texas. The gist of appellants’ instant claim for malicious prosecution is that appellees used Texas’ state judicial processes to obtain discovery which was not obtainable through the federal litigation and to interfere with appellants’ prosecution of their federal lawsuit. All of these underlying facts are highly relevant, as they relate to Texas’ interest in maintaining liberal access to its court system, in protecting the expectations of Texas litigants and their counsel regarding the circumstances under which they will be held accountable for malicious prosecution, and in “regulating the use of its process and in determining when its judicial system is maliciously used.” Denenberg v. American Family Corp. of Columbus, GA, 566 F.Supp. 1242, 1248 (E.D.Pa.1983). Given Texas’ policies and the breadth of their connection and relevance to this action for malicious prosecution, we find that Texas has a priority of interest in having its rule of law govern the outcome of this case.

We note, however, that we disagree with appellees’ argument that the proper choice of law in malicious prosecution cases will always be the law from the forum in which the underlying action was brought. Each case must be decided within its own unique factual framework which will dictate the state which has the most significant interests and relationship to the case. See e.g., Continental Cablevision v. Storer Broadcasting Co., 653 F.Supp. 451 (D.Mass. 1986) (despite fact that suit abused Massachusetts’ process, and Massachusetts has strongest interest in preventing abuse of process in its courts, proper choice of law was Missouri law, where defendant alleged that plaintiff’s decision to file in Massachusetts was itself part of the plaintiff’s abuse of process).

As appellants have failed to state a cause of action for malicious prosecution under Texas law, the trial court properly granted summary judgment in favor of appellees.

In their complaint, appellants also assert a claim for malicious abuse of process. An action for abuse of process must be distinguished from an action for malicious prosecution, as the two torts are wholly separate and distinct causes of action:

The gist of an action for abuse of process is the improper use of process after it has been issued, that is, a perversion of it: Mayer v. Walter, 64 Pa. 283; Annotation, 80 A.L.R. 581. “An abuse is where the party employs it for some unlawful object, not the purpose which it is intended by the law to effect; in other words, a perversion of it ... On the other hand, legal process, civil or criminal, may be maliciously used so as to give rise to a cause of action where no object is contemplated ... other than its proper effect and execution”: Mayer v. Walter, supra, p. 285; Johnson v. Land Title B. & T. Co., 329 Pa. 241, 241, 242, 198 A. 23. Malicious use of civil process has to do with the wrongful initiation of such process, while abuse of civil process is concerned with a perversion of a process after it is issued.

McGee v. Feege, 517 Pa. 247, 253, 535 A.2d 1020, 1023 (1987), quoting Publix Drug Co. v. Breyer Ice Cream Co., 347 Pa. 346, 349, 350, 32 A.2d 413 (1943). An action for malicious prosecution is statutorily based, see 42 Pa.C.S.A. § 8351, while malicious abuse of process is a common law action.

We need not decide whether a conflict exists between Texas and Pennsylvania law on abuse of process or whether Texas or Pennsylvania law regarding abuse of process should apply in this case, because under either state’s laws, appellants have failed to make out a cause of action for abuse of process. As the Court stated in McGee, “abuse of civil process is concerned with a perversion of a process after it is issued.” 517 Pa. at 253, 535 A.2d at 1023. In Shaffer v. Stewart, supra 326 Pa.Super. at 139, 473 A.2d at 1019, this Court stated:

A cause of action for abuse of process requires “[s]ome definite act or threat not authorized by the process, or aimed at an objective not legitimate in the use of the process ... [;] there is no liability where the defendant has done nothing more than carry out the process to its authorized conclusion, even though with bad intentions.” Di Sante v. Russ Financial Co., 251 Pa.Super. 184, 189, 380 A.2d 439, 441 (1977), quoting Prosser, Torts § 100 at 669 (2d ed. 1955). See also: Junod v. Bader, 312 Pa.Super. 92, 96-7, 458 A.2d 251, 253 (1983).

See also Borough of Philipsburg v. Bloom, 123 Pa.Commonwealth Ct. 357, 554 A.2d 166 (1989), affirmed 524 Pa. 588, 574 A.2d 602 (1990) (where counterclaim failed to allege any facts other than the “mere issuance of process for an unlawful purpose,” counterclaim did not sufficiently state a cause of action for abuse of process).

Similarly, the Texas courts have required that there be an improper use of the process after its issuance to make out an action for abuse of process. See Snyder v. Byrne, 770 S.W.2d 65 (Tex.App.—Corpus Christi 1989) (“mere procurement or issuance with a malicious intent or without probable cause is not actionable”); Baubles & Beads v. Louis Vuitton, S.A., 766 S.W.2d 377, 379 (Tex.App.—Texarkana 1989) (“To constitute an abuse of process, the process must have been used to accomplish an end which is beyond the purview of the process and which compels a party to do a collateral thing which he could not be compelled to do”). Pennsylvania and Texas law on abuse of process is consistent with the Restatement (Second) of Torts § 682 (1977), which explains:

... [Tjhere is no action for abuse of process when the process is used for the purpose for which it is intended, but there is an incidental motive of spite or an ulterior motive purpose of benefit to the defendant....
For abuse of process to occur there must be use of the process for an immediate purpose other than that for which it was designed and intended. The usual case of abuse of process is one of some form of extortion, using the process to put pressure upon the other to compel him to pay a different debt or to take some other action or refrain from it....

Id. at 475, comment b. Typical forms of abuse of process include extortion by means of attachment, execution or garnishment, and blackmail by means of arrest or criminal prosecution. W. Prosser & W. Keeton, Prosser and Keeton on Torts § 121 (5th ed. 1984).

We find that appellants have failed to state a claim for abuse of process, as the allegations in their complaint amount to no more than a charge for the initiation of litigation for a wrongful purpose, and do not charge appellees with any “perversion” of properly issued process. Appellants merely complain that “defendant issued and served process on the plaintiffs” for various improper and ulterior purposes. Notably absent is any allegation of a coercive use of the process. Thus, we find that appellants have failed to state a claim for abuse of process.

The trial court granted summary judgment in favor of defendants on Count III of the complaint, entitled “Malicious Misuse of Criminal Proceedings to Give an Advantage in Civil Proceedings.” This claim stems from appellees’ conduct in attempting to convince the District Attorney of Bexar County to file criminal charges against appellants. We agree with the trial court’s conclusion that this is not a recognized cause of action in either Pennsylvania or Texas. Indeed, appellants do not contend on appeal that the trial court erred in granting summary judgment for appellees on this count.

Finally, we find no fault with the trial court’s conclusion that appellants’ claim for civil conspiracy must fail, due to the absence of a valid claim for the underlying tortious acts of malicious prosecution or abuse of process. See Rose v. Wissinger, 294 Pa.Super. 265, 439 A.2d 1193, 1199 (1982) (where complaint failed to set forth claim for defamation or outrageous conduct causing emotional distress, there could be no conspiracy to commit those acts).

For the foregoing reasons, we find that the trial court properly granted summary judgment in favor of appellees, and affirm the order of the trial court.

Judgment affirmed.

      . The differences between the 1986 and 1988 actions do not affect our resolution of the issues in this case. Leo Walker is not named as a plaintiff in the 1988 action, and Daryl Bristow and Miller Keeton, Bristow & Brown are not named as defendants in the 1986 action.

      . We find no support in Pennsylvania Supreme Court caselaw for appellants’ position that in the event a true conflict exists between the law of the states, we must apply the law of the forum state.

      . There is no allegation in the instant case that the Texas state suit was brought in Texas to enable appellees to take advantage of Texas law which favors malicious prosecution defendants.


text:
    582 A.2d 33
    Charles L. EISENHAUER and Margaret B. Eisenhauer, Assignees of Char Mar, Inc., Appellants, v. CLOCK TOWERS ASSOCIATES and The Karsan Group, Inc., Appellees.
    Superior Court of Pennsylvania.
    Argued Oct. 4, 1990.
    Filed Nov. 8, 1990.

      Jeffrey B. Rettig, Harrisburg, for appellants.
    George C. Werner, Lancaster, for appellees.
    Before MONTEMURO, JOHNSON and CERCONE, JJ.
   MONTEMURO, Judge:

Appellants Charles and Margaret Eisenhauer brought this action for conversion and unjust enrichment against appellees Clock Towers Associates, The Karsan Group, Inc., Irwin Terach, Barry Lyman and Julian Levin. At the close of plaintiffs-appellants’ evidence in a non-jury trial, the trial court granted appellees’ request for a compulsory nonsuit. Appellants bring this appeal from the trial court’s denial of their request for removal of the nonsuit. We hold that the trial court erred in granting the nonsuit, and reverse and remand this case for further proceedings.

The testimony at trial established the following facts. In March, 1983, appellant Charles Eisenhauer was the principal stockholder and president of Char Mar, Inc., trading as C & M Company (“C & M”), a company which designed and installed heating, ventilating and air conditioning systems in commercial and residential buildings. C & M was hired as a subcontractor by Sol Gillman, a general contractor, to furnish and install heat pumps in the Clock Tower Apartments, owned by appellees Clock Tower Associates. The apartment building was managed by The Karsan Management Company, of which appellee Julian Levin was the president.

The initial contract between Gillman and C & M provided that C & M would receive $345,300.00 in return for the installation of the 135 heat pumps. C & M then offered Gillman a discount on the cost of the heat pumps, provided that Gillman pay for the entire order upon delivery. According to Mr. Eisenhauer, Gillman accepted C & M’s offer, but when the 135 units were delivered to the Clock Towers construction site, Gillman denied that he had agreed to pay for all of the units in full upon delivery and refused to pay for the units when presented with the invoice. C & M thereafter billed Gillman in accordance with the terms of the initial agreement, that is, on a monthly basis for labor, equipment and material as the work was performed. The heat pumps and some other accessory equipment were stored in an area on the job site under lock and key; Charles Eisenhauer and his foreman were the only people who had access to the storage area. The equipment was used by C & M as the job progressed.

This arrangement continued from March, 1983 until May, 1984, when a dispute arose between Gillman and Clock Towers. Gillman was terminated as the general contractor of the job, and neither Gillman nor C & M was permitted further entry onto the site. Despite C & M’s requests for the return of the equipment stored at the Clock Towers job site, Clock Towers refused to allow C & M to recover the equipment, maintaining that Gillman had been paid in full for all services rendered and materials supplied and thus Clock Towers owned all materials and equipment at the site.

In May, 1985, appellants, as assignees of C & M, filed this suit against appellees in which they presented a cause of action for conversion and for unjust enrichment arising out of appellees’ refusal to return the equipment left on the site. The complaint requested damages in the amount of $66,814.12 plus interest.

In May, 1986, appellants filed a separate suit in federal court against Gillman, seeking damages for (1) the uninstalled equipment left on the job site, (2) work performed which had never been paid for by Gillman, (3) loss in profits suffered because of the breach in the agreement, and (4) loss of financial reputation. The total claim for damages against Gillman amounted to $237,939.38 plus interest. Although judgment was entered against Gillman in the federal suit in the amount of $125,000, C & M entered into a settlement agreement with Gillman in which Gillman agreed to pay C & M $90,000.00 by a certain date in return for the Eisenhauers' release of Gillman from any liability arising out of the Clock Towers project.

Following the close of plaintiffs’ case, the trial court sustained appellees’ motion for a nonsuit on behalf of the three individual defendants on the basis that appellants failed to establish that they were the general partners of Clock Towers Associates. The court also sustained a motion for nonsuit in favor of appellees Clock Tower Associates and Karsan Group on the basis that appellants had already recovered or settled for the same claim in the federal suit against Gillman. Although the court at first rejected appellees’ request for a nonsuit on the basis that appellants did not have an ownership interest in the equipment left at the site, in its Opinion in support of the non-suit, the trial court found that appellants had transferred their ownership rights in the equipment to Gillman when they had initially billed him for the complete order of 135 heat pumps, see Trial Court Opinion, March 3, 1990 at 6, and thus appellants could not sustain their cause of action for conversion.

In reviewing a grant of a compulsory non-suit, we are cognizant that:

[i]t has long been settled that a compulsory nonsuit can only be granted in cases where it is clear that a cause of action has not been established. The plaintiff must be given the benefit of all favorable evidence along with all reasonable inferences of fact arising from that evidence. Any conflict in the evidence must be resolved in favor of the plaintiff ... We must therefore review the evidence to determine whether the order entering judgement of compulsory nonsuit was proper. Coatesville Contractors and Engineers, Inc. v. Borough of Ridley Park, 509 Pa. 553, 559-60, 506 A.2d 862, 865 (1986) (citations omitted); Corbett v. Weisband, 380 Pa.Super. 292, 551 A.2d 1059 (1988).

Gorfti v. Montgomery, 384 Pa.Super. 256, 261-62, 558 A.2d 109, 112 (1989), alloc. denied, 524 Pa. 608, 569 A.2d 1367 (1989).

We first address appellees’ argument that appellants’ claim for conversion, must fail because appellants lacked a sufficient interest in the heat pump systems to maintain a cause of action for their conversion. “Conversion is the deprivation of another’s right of property in, or use or possession of, a chattel, without the owner’s consent and without lawful justification.” Shonberger v. Oswell, 365 Pa.Super. 481, 484, 530 A.2d 112, 114 (1987), citing Stevenson v. Economy Bank of Ambridge, 413 Pa. 442, 451, 197 A.2d 721, 726 (1964). When such an act occurs, the plaintiff may bring suit if he or she had either actual or constructive possession, or an immediate right to possession of the chattel at the time of the conversion. Bank of Landisburg v. Burruss, 362 Pa.Super. 317, 321, 524 A.2d 896, 898 (1987), alloc. den. 516 Pa. 625, 532 A.2d 436 (1987); Potts Run Coal Co. v. Benjamin Coal Co., 285 Pa.Super. 128, 135, 426 A.2d 1175, 1178 (1981).

Appellees argue that appellants transferred their property rights in the heat pumps and other equipment when the 135 heat pumps were delivered to the job site and C & M invoiced Gillman for the entire 135 units. Appellees rely on the Uniform Commercial Code, 13 Pa.C.S.A. § 2401(2), which provides that:

... title passes to the buyer at the time and place at which the seller completes his performance- with reference to the physical delivery of the goods ...:
(i) if the contract requires or authorizes the seller to send the goods to the buyer but does not require him to deliver them at destination, title passes to the buyer at the time and place of shipment; but
(ii) if the contract requires delivery at destination, title passes on tender there.

13 Pa.C.S.A. § 2401(2)(i), (ii).

We find that appellees’ argument is flawed in several respects. First, appellees misread the law of conversion. It is well-settled that a person seeking to recover on a theory of conversion need not be the owner of the property claimed to be converted, provided that the plaintiff is in possession or entitled to be in possession at the time of the conversion. Gunzburger v. Rosenthal, 226 Pa. 300, 75 A. 418 (1910); Bank of Landisburg, supra; 18 AmJur2d §§ 57, 75, 76; Prosser & Keeton, Torts, § 15 (5th ed. 1984); Restatement (Second) Torts, §§ 224A, 225. Thus, even if Gillman did possess title to the equipment at the time of the alleged conversion, appellants may bring this action for conversion, as the testimony at trial established that the heat pumps were in the sole possession of C & M when C & M was terminated from the job and not permitted to return to the site. Mr. Eisenhauer testified that the equipment was kept in a locked storage area to which only he and his foreman had a key. Neither Gillman nor Clock Towers had access to the equipment.

Further, even if appellees’ position that plaintiffs must be the “owners” of the equipment was correct, we find that plaintiffs’ evidence does not show that C & M had transferred title of the heat pumps to Gillman. Although Mr. Eisenhauer testified that Gillman had agreed to pay for the entire order of heat pumps upon their delivery in exchange for the discounted fee, appellants offered contradictory evidence in the form of Gillman’s deposition testimony wherein Gillman denied any such agreement. The questioning went as follows:

Q. Mr. Rettig [counsel for plaintiffs] has alluded to conversations you had concerning purchase of all the heat pumps in advance upon delivery by Char Mar. Is your testimony that you did not agree to that?
A. [by Mr. Gillman]: Absolutely.
Q. On what basis were they to be paid by? How was Char Mar to be paid?
A. Char Mar was to be paid as work was billed. He was to get paid once it was approved by our local guy.
Q. Did Char Mar company have an area where they store their equipment on the job site?
A. Absolutely, sir.
Q. Was it locked?
A. He had his own lock and key on it.
Q. Did Clock Towers Development Corporation have access to that area?
A. Absolutely not.
Q. Did Mr. Eisenhauer ever indicate that that was his equipment?
A. It was always his equipment. I had to sign a note for a bank____
Q. Did he indicate it was his?
A. He borrowed the money; it was his. It had nothing to do with us. He was using the facility to store his material. I was never in any way—If you ask me if I ever saw the material to this very day, I never saw it.
Q. It was made very clear by Char Mar and Mr. Eisenhauer that he retained ownership of that equipment that was on the site.
A. Absolutely was his. He accepted it, counted it, he did everything else.

N.T. July 6, 1989 at 70-72. Mindful that our cases direct us to resolve all conflicts in the evidence in favor of the plaintiff when reviewing a grant of a nonsuit, we must disagree with the trial court’s conclusion that C & M had transferred its rights in the equipment upon billing Gillman. According to Gillman, C & M and he had never agreed on the alleged deal wherein Gillman was to make full payment for the equipment up front. In further support of this, both Mr. Eisenhauer and Gillman testified that Gillman paid C & M on a monthly basis as the work was performed. Further, the uncontradicted testimony at trial establishes that C & M never delivered the heat pumps to Gillman, but instead kept them under lock and key in an area to which only C & M had access. Thus the requirements of 13 Pa.C.S.A. § 2401(2) were never met and title never passed to Gillman. Therefore, even if appellants were required to establish that they owned the equipment in order to maintain their action for conversion, which we hold they were not, the evidence favorable to appellants shows that appellants were the owners of the equipment. The trial court erred in granting a compulsory nonsuit in favor of appellees on the basis that they had transferred their ownership interests in the equipment to Gillman.

We also find fault with the trial court’s conclusion that appellants are barred from recovering in this case due to their release of Gillman in the federal case. Initially, we note that appellants claim that the trial court improperly granted the nonsuit because the release of Gillman in the federal suit was part of defendants-appellees’ defense, elicited on cross-examination of Mr. Eisenhauer. While it is true that a grant of a nonsuit is improper where a defendant has offered evidence during the plaintiffs case, see Pa.R.C.P. 230.1; Storm v. Golden, 371 Pa.Super. 368, 538 A.2d 61 (1988), our review of the trial transcript reveals that appellants presented evidence of the release during their case-in-chief. During direct examination, Mr. Eisenhauer testified that Char Mar had instituted suit in federal court against Gillman, seeking redress for work actually performed by C & M, for the cost of having to borrow money to finance the purchase of the heat pump units, and for loss of business opportunities. N.T. July 6, 1989 at 34-35. Eisenhauer testified further that the federal case was settled out of court for $90,000, and that the settlement figure did not include compensation for the uninstalled equipment left on the site. Id. At the close of plaintiffs’ case, appellants’ counsel moved for the admission of the release into evidence. Id. at 76. Without objection from appellants’ counsel, appellees’ counsel cross-examined Eisenhauer on the claims in the federal suit and the settlement agreement. This material was within the scope of cross-examination, as Eisenhauer had testified about the matters during direct examination. We therefore reject appellants’ claim that the trial court improperly considered the release in granting the nonsuit.

We agree with appellants, however, that the court erred in holding that by virtue of appellants’ settlement of the federal claim, they recovered the value for the lost equipment and are therefore barred from recovering from the appellees in this case. Under the terms of the release, appellants relieved Sol Gillman from further liability arising out of the Clock Towers Development project. The release states that the Eisenhauers:

do not waive, but rather expressly reserve to themselves any and all rights that they may have against Clock Towers Associates____ Further, by entering into this Release, Charles Eisenhauer and Margaret Eisenhauer, his wife, are not compromising their claims for Char Mar equipment left at the job site and allegedly wrongfully converted without payment. Provided further, that in consideration of the above payment and the mutual Releases contained herein, ... Charles Eisenhauer and Margaret Eisenhauer ..., will indemnify and hold harmless Sol Gillman and any of the Gillman entities recited above, ... from any damages which are now known or unknown, or arising in the future, of whatever nature, which may arise out of, or in connection with ..., any attempts by Charles Eisenhauer and Margaret Eisenhauer ..., seeking to obtain recovery for any amounts for equipment of Char Mar, Inc., allegedly converted at the Clock Towers project site.

R.R. at 002ap. Thus, although the settlement relieved Gillman of any liability for the uninstalled equipment left on the job site, the release in no way relieved Clock Towers of its responsibility for the uninstalled equipment. Clock Towers was not a party to the federal litigation giving rise to the release. The federal suit against Gillman was based on a theory of contractual liability, whereas the state suit against Clock Towers, et al, was based on the tortious liability of Clock Towers. Under comparable circumstances, our courts have held that a release discharging certain individuals does not relinquish the obligations of other entities not a party to the release or not a party to the litigation giving rise to the release. See Buttermore v. Aliquippa Hospital, 368 Pa.Super. 49, 533 A.2d 481 (1987) (where appellees were not parties to the negotiation of the release, were not named in the release, and did not provide any consideration to the appellant in connection with the release, the appellant did not intend to discharge his claims against the appellees by virtue of the release); Sparler v. Fireman’s Ins. Co. of Newark, N.J., 360 Pa.Super. 597, 521 A.2d 433 (1987) (en banc) (where release did not identify appellee insurance company as a party being discharged from claims, the only reasonable interpretation of the release was that the insured did not intend to release insurance company from its contractual obligations). We find that the trial court erred in granting a nonsuit on the basis that appellants’ release of Gillman in the federal suit bars appellants from recovering from appellees in this suit.

Finally, we find that the trial court erred in granting a nonsuit in favor of individual defendants Lyman and Terach on the basis that appellants failed to establish that these individuals were the general partners of Clock Towers Associates. The deposition testimony of Julian Levin indicated that Levin was the president of Karsan Management Company, an entity responsible for the management of the Clock Towers Apartments. Levin testified that Terach and Lyman “are the general partners of Clock Towers Associates.” N.T. July 6, 1989 at 6. During argument in support of the nonsuit, appellees’ attorney stated that Terach and Lyman were not the general partners. On the basis of this “evidence” presented during argument by the defendantsappellees’ attorney, the court granted the nonsuit.

We find that the court erred in granting the nonsuit on behalf of individual defendants Lyman and Terach, because the court relied on evidence presented by the defendants. Under Pa.R.C.P. 230.1, once a defendant has offered evidence, entry of a nonsuit is improper. On this basis alone, the court erred in entering a nonsuit in favor of the individual defendants. Additionally, we note that in reviewing a grant of a nonsuit, we must resolve all conflicts in the evidence in favor of the plaintiffs. Storm v. Golden, supra. Because the plaintiffs’ evidence showed that the individual defendants were general partners of Clock Towers Associates, entry of a nonsuit was improper.

For all of the foregoing reasons, we find that the trial court erred in entering a nonsuit in favor of defendants-appellees. Accordingly, we reverse and remand this case for further proceedings consistent with this decision.

Reversed and remanded. Jurisdiction is relinquished.