author: TAMILIA, Judge:

text:
    663 A.2d 738
    Joseph MCFARLEY, Appellant, v. AMERICAN INDEPENDENT INSURANCE COMPANY. Nicole BUTLER, Appellant, v. AMERICAN INDEPENDENT INSURANCE COMPANY.
    Superior Court of Pennsylvania.
    Submitted June 7, 1995.
    Filed Aug. 10, 1995.

      Arnold H. Winicov, Philadelphia, for appellants.
    Stephen J. Margolin, Philadelphia, for appellee.
    Before MCEWEN, TAMILIA and KELLY, JJ.
   TAMILIA, Judge:

Joseph McFarley and Nicole Butler present this consolidated appeal from the Orders of April 5 and May 5, 1994 dismissing their petitions to appoint an arbitrator. The Orders were entered on the basis that the automobile insurance policies written by appellee did not provide for arbitration.

Appellants, a taxi driver and a passenger, respectively, were injured in unrelated accidents when the cabs they occupied were struck by uninsured motorists. Appellants filed uninsured motorist claims against appellee, who insured the corporate owners of the cabs in which appellants were injured. Appellee denied the claims on the basis that its policies did not provide for arbitration and that uninsured motorist benefits had been waived by the insured cab companies. Appellants thereafter filed petitions to appoint arbitrators, which were dismissed by the orders of April 5 and May 5, 1994. The appeals were then consolidated by stipulation.

On appeal, appellants argue that the trial court erred in refusing to compel arbitration on the basis that the policies written by appellee did not provide for arbitration. Specifically, appellants claim that “[ajrbitration was the proper vehicle to decide Petitioners uninsured motorist claims regardless of its absence in the policy.” (Appellants’ brief at vii.) We disagree and therefore affirm the Orders of the trial court.

Initially, “arbitration is a matter of contract, and absent an agreement between the parties to arbitrate a particular issue, the parties cannot be compelled to arbitrate that issue.” Lincoln Univ. v. Lincoln Univ. Assoc. of Professors, 467 Pa. 112, 120, 354 A.2d 576, 580 (1976), citing Schoelhammer’s Hatboro Manor, Inc. v. Local Joint Exec. Board of Phila., 426 Pa. 53, 58, 231 A.2d 160, 162 (1967).

Further,
An injured person who makes a claim for uninsured motorist benefits under a policy to which he is not a signatory is in the category of a third party beneficiary. Historically, this Court has held that third party beneficiaries are bound by the same limitations in the contract as the signatories of that contract. The third party beneficiary cannot recover except under the terms and conditions of the contract from which he makes a claim.

Johnson v. Pennsylvania Nat’l Insurance, 527 Pa. 504, 594 A.2d 296 (1991); see also Restatement (Second) of Contracts, § 309, comment b (1981) (“When there is a contract, the right of a beneficiary is subject to any limitation imposed by the terms of the contract”).

Thus, appellants herein only can recover, if at all, under the terms of the policies as written and those policies do not provide for arbitration.

In Johnson, supra, the case relied on by the trial court in dismissing appellants’ petitions, the plaintiff was injured when the taxi cab in which she was riding was struck by a hit and run driver. Plaintiff brought suit in the Court of Common Pleas of Allegheny County against the cab owner’s uninsured motorist carrier, under a policy requiring arbitration. The trial court denied the carrier’s preliminary objections that the suit should have been submitted to arbitration. A divided panel of our Court affirmed on the basis that plaintiff could not be bound by the arbitration term of a contract she did not sign. Johnson v. Pennsylvania Nat’l Insurance, 384 Pa.Super. 92, 557 A.2d 789 (1989). Allocatur was granted.

Our Supreme Court, characterizing the issue as “a thorny one,” began by noting that the right to uninsured motorist benefits was created by the Motor Vehicle Financial Responsibility Act (“the Act”), 75 Pa.C.S. § 1701 et seq., and that the Act does not mandate arbitration as the means of obtaining those benefits. Johnson, supra 527 Pa. at 506, 594 A.2d at 296, 298. “Thus,” the Court concluded, “the right to the uninsured motorist benefits is provided by statute, but the method of obtaining those benefits is governed by the insurance policy.” Id. at 509-10, 594 A.2d at 299 (emphasis in original). We agree with the trial court that the Supreme Court’s resolution of Johnson is dispositive of the instant action. The policy herein, which according to Johnson governs the method by which uninsured motorist benefits may be obtained, does not provide for arbitration. Appellants therefore may not compel arbitration of their claim. Further, appellants’ correct assertion that public policy generally favors arbitration is not sufficient to warrant imposition of a term which materially alters a perfectly valid insurance contract.

Finally, appellants contend that 31 Pa.Code § 63.2(8) mandates the submission of their claim to arbitration. The section provides:

8. Arbitration. If any person making claim hereunder and the company do not agree that such person is legally entitled to recover damages from the owner or operator of an uninsured automobile because of bodily injury to the insured, or do not agree as to the amount of payment which may be owing under this endorsement, then, upon written demand of either, the matter or matters upon which such person and the company do not agree shall be settled by arbitration in accordance with the rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. Such persons and the company each agree to consider itself bound and to be bound by any award made by the arbitrators pursuant to this endorsement.

Id.

We have repeatedly rejected the argument raised by appellants, holding that in the absence of a statutory requirement, arbitration may not be required by regulation. Johnson by Johnson v. Travelers, 348 Pa.Super. 278, 502 A.2d 206 (1985); Hiller v. Allstate, 300 Pa.Super. 149 n. 1, 446 A.2d 273 n. 1 (1982); Ellison v. Safeguard Mutual Ins. Co., 209 Pa.Super. 492, 229 A.2d 482 (1967). In Johnson by Johnson, a case discussing the No-Fault and Uninsured Motorists Coverage Acts, we rejected the appellant’s argument that, pursuant to section 63.2(8), “the right to ... mandated uninsured motorist benefits must be enforced exclusively by arbitration.” Id. at 282, 502 A.2d at 206, 208. We held as follows:

[T]he extent of coverage is determined by the [No-Fault Act] and while the statute may infer a policy of insurance ... where it is silent as to the procedure for recovery, this may not be inferred in derogation of constitutional rights. Thus while the legislation provided for coverage, no where in the No-Fault Act or the Uninsured Motorists Coverage Act is there a provision requiring arbitration when a policy of insurance did not, in fact, issue, containing a clause requiring arbitration.
To require by regulation what the legislature omitted from statute is an unlawful delegation of powers to the insurance commissioner. “When the General Assembly failed to include this essential [arbitration] requirement in its enactment neither the executive nor the judiciary may under the guise of interpretation or public policy apply it.”
We, therefore, hold that the procedure to be followed in enforcement of uninsured motorist benefits, absent an actual contract containing an arbitration clause, as against the assigned obligor, is the filing of a complaint in assumpsit.

Id. at 283, 502 A.2d at 206, 209 (citation omitted).

Appellants’ section 63.2(8) argument is also undermined by our holding in Dearry v. Aetna Life and Cas. Ins. Co., 415 Pa.Super. 634, 639, 610 A.2d 469, 472 (1992), wherein we stated:

There is no law in the Commonwealth of Pennsylvania which requires that persons involved in a dispute over UM or UIM coverage submit the controversy to arbitration. Further, there is no law in the Commonwealth of Pennsylvania which requires that parties to insurance policies enter an agreement that any dispute surrounding coverage be submitted to arbitration.

Id.

For the foregoing reasons, we affirm the Orders of the trial court dismissing appellants’ petitions to appoint arbitrators.

Orders affirmed.

      . The validity of the alleged waivers is not properly before us on appeal and will not be considered herein.

      . We note our awareness of authority to the contrary. In Prudential Property and Casualty Ins. Co. v. Muir, 99 Pa.Cmwlth. 620, 513 A.2d 1129 (1986), a suit challenging the authority of the Insurance Commissioner to promulgate section 63.2(8), the Commonwealth Court found that the section mandates arbitration of uninsured motorist disputes. However, based on the rationale and authority discussed above, and because we are not confronted with a challenge to the Insurance Commissioner’s authority to promulgate regulations, we decline to follow Prudential.


source: Caselaw Access Project

author: OLSZEWSKI, Judge. WIEAND, Judge,

license: Public Domain

text:
    663 A.2d 741
    John T. COLEMAN and Catherine E. Coleman, Husband and Wife, Appellees, v. Phyllis M. COLEMAN, Appellant.
    Superior Court of Pennsylvania.
    Submitted April 3, 1995.
    Filed Aug. 14, 1995.

      James P. Coulter, Butler, for appellant.
    Jon M. King, Emlenton, for appellees.
    Before WIEAND, OLSZEWSKI and HESTER, JJ.
   OLSZEWSKI, Judge.

In 1992, John T. Coleman (John) sued his mother Phyllis Coleman (Phyllis) in an effort to force her to make the mortgage payments on his house. Remarkably, the trial court granted John’s motion for summary judgment. We reverse.

We have read John and Phyllis Coleman’s depositions, and consider them in the light most favorable to Phyllis, against whom summary judgment was granted. The facts underlying this bizarre piece of litigation began in 1978, when John bought a house from his parents, Phyllis and John E. Coleman. John paid $30,000 to his parents for the property, which was worth much more. To finance the purchase, John borrowed the money from the Landmark Savings Association, which secured the loan with a mortgage on the property. R.R. 66a-68a.

John and his second wife Karen lived in the house until 1987, when their impending divorce put too much financial stress on them to continue making the mortgage payments. John asked his parents to take the property back and assume the mortgage, lest the bank foreclose and the property be lost. John’s parents agreed, and purchased the property subject to the $28,231 of the loan which was still outstanding. Landmark Savings allowed them to take over the mortgage payments. R.R. 71a.

John’s parents moved into the house, and Karen continued to live there for about a year until her divorce from John was finalized. Meanwhile, John took up residence in Phyllis’s nearby trailer with his third wife Catherine, and their children. When her husband died in March of 1989, Phyllis decided that she should not live alone in such a large house while her son and family lived in her cramped trailer, so she offered to trade residences. She deeded the house back to John as a gift — or specifically for one dollar consideration which John never actually paid. R.R. 85a, 107a.

Both parties acknowledged that the outstanding mortgage was never discussed when Phyllis deeded the house back to John, and that Phyllis never promised to continue making the mortgage payments. R.R. 76a, 109a. Phyllis, however, continued to pay the mortgage until she exhausted the proceeds of her late husband’s insurance policies. Faced with her own rising medical expenses and a meager income from social security, she decided that John, who was now gainfully employed, should take over the payments on his house. R.R. 126a, 137a.

John made the payments for a while, and then decided to sue his mother to enforce what he claimed was her promise to continue paying the mortgage. The trial court denied Phyllis’s preliminary objections, depositions were taken, and both parties moved for summary judgment.

Summary judgment may be granted when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material facts and that the moving party is entitled to judgment as a matter of law. Pa.R.C.P. 1035(b), 42 Pa.C.S.A. When considering a motion for summary judgment, the trial court must examine the record in the light most favorable to the non-moving party, and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party. We will overturn a trial court’s entry of summary judgment only if we find an error of law or clear abuse of discretion. Lower Lake Dock Co. v. Messinger Bearing Corp., 395 Pa.Super. 456, 577 A.2d 631 (1990).

Phyllis’s motion was based on the facts in the depositions and well-settled principles of law: she deeded the property to John subject to the existing mortgage; she had never promised to pay the mortgage; there was no writing evidencing her promise to pay the mortgage (which would be required under the statute of frauds); and in any event, John could not sue to enforce what he acknowledged to be a gift. R.R. 170a-71a. John filed a cross-motion for summary judgment, arguing only that the statute of frauds did not apply because Phyllis had specifically agreed to assume the mortgage debt when John deeded the property to her in 1987, and that this obligation did not transfer back to him when Phyllis deeded the property back in 1989. John’s motion did not specify what type or amount of judgment he wanted, other than to refer to his pleadings. R.R. 188a, 196a-205a.

The trial court granted summary judgment for John. The court’s short, cryptic opinion is further obscured by the enormous incongruity between what little it says, and the judgment it apparently grants. The opinion and accompanying order simply grant John’s motion for summary judgment, without describing what this judgment entails. To understand the legal error which mandates reversal, we must first understand what John sought to accomplish with this action.

John requested summary judgment based upon his pleadings, which asked the trial court “to enter a judgment:

A. Declaring that [Phyllis] has a duty to make all monthly installment payments required by said mortgage and pay any and all sums due and owing thereunder in accordance with the terms and conditions thereof; and
B. Declaring that [Phyllis] shall be required to indemnify and reimburse [John] for any and all monthly installments and payments of any other sums made by [John], heretofore or in the future, under the terms and conditions of said mortgage; and
C. Declaring that [Phyllis] shall be required to reimburse [John] for all [his] costs and legal fees incurred in pursuing the instant declaratory judgment action; and
D. Granting such further relief as the Court may deem appropriate.”

Complaint, R.R. 8a-9a. In short, John wanted the Butler County Court of Common Pleas to order his elderly mother to pay his mortgage.

John’s theory of the case was that when he transferred the property to his parents in 1987, they assumed the mortgage debt. The record supports this claim. All that means, though, is that Phyllis also became liable on the note which the mortgage secures, along with John. John claims that when Phyllis deeded the property back to him in 1989, she remained personally liable on the mortgage. Thus, John argues that while he owns and lives in the house, his mother is still legally obligated to pay the debt which the mortgage on his house secures.

The problem with John’s theory is that even if Phyllis is liable on the debt, what John seeks in his complaint is still utterly uncognizable under our system of law. If, as John argues, Phyllis owes the bank money, then John has no standing to bring any action regarding that debt. Even if he had standing, our courts cannot do what he asks: order a third party to pay an ordinary commercial debt. Such an order would require the exercise of the court’s most extraordinary equitable powers. These powers come into play only in a few narrow situations, such as support actions. A court could order a party to pay spousal or child support, and use its equitable powers to jail him if he willfully refused. But debtor-creditor relationships are purely legal. A creditor can sue its debtor in court to obtain a money judgment, and then go to the sheriff to execute the judgment by levying upon the debtor’s assets. In our common law tradition, courts do not order and force people to pay commercial debts — we allow creditors to obtain and execute money judgments.

A prudent creditor will often demand a security interest in specific assets of the debtor, to insure that the debt will be paid. That is what the bank did here: it loaned $30,000 to John, and secured the debt with a mortgage on John’s house. When John was about to default, he transferred the house to his parents, and they assumed the debt. The bank was happy to oblige: it continued to get regular payments on the debt, it still had its security interest in the house, and now it had another pocket to protect against any potential deficiency in the event of foreclosure. When Phyllis deeded John the house in 1989, she could not give him the “full bundle of sticks” that constitute complete rights in a piece of real property, because the bank held one important stick: the right to seize the property and sell .it in order to satisfy a debt. The mortgage was recorded, which John certainly knew about, since he granted the mortgage to the bank in 1978 when he borrowed the purchase price. If John did not want to accept the gift of a mortgaged house, he could have refused the deed.

But John accepted what his mother gave him. There can be no question that if Phyllis defaults on the mortgage payments, the bank can foreclose on the property to satisfy the debt. John cannot force Phyllis to pay the debt anymore than the bank can. The kind of judgment that John sought in his complaint is simply not available to him under our law.

John therefore alleges that his mother promised to continue making the mortgage payments, and he is suing to enforce this promise. This theory is also totally unsupportable. First, John specifically admitted during his deposition that his mother never promised to make the mortgage payments. R.R. 76a. Second, there is no contract to enforce. John admits that he made no contract with his mother regarding the mortgage payments: “This action is solely to enforce the terms of a gift from [Phyllis] to Plaintiffs, which all parties concede took place.” Appellee’s brief at 11 (emphasis added).

A gift requires delivery — the present transfer of the thing given. In re Estate of Sipe, 492 Pa. 125, 422 A.2d 826 (1980). Phyllis gave John the property by delivering a deed to him. But Phyllis could not deliver a promise to continue making the mortgage payments. A promise of future performance cannot be the subject of a valid gift. Rather, a contract, supported by consideration or a statement of the parties’ intent to be legally bound, is required before one can sue over the breach of a promise of future performance.

Phyllis raised failure of consideration in her preliminary objections. The trial court noted that John’s complaint alleged that Phyllis had made a gift of future mortgage payments, and that consideration was not needed for a gift. R.R. 46a. The trial court should have also noted that a promise of future performance cannot be delivered, and one important purpose of requiring present delivery of a gift is to prevent people from suing to enforce gifts, or alleged promises to make gifts in the future. See, e.g., In re Smith’s Estate, 237 Pa. 115, 85 A. 76 (1912). This case has become confused because the trial court conflated the fundamental concepts of gift and contract at the outset.

Phyllis’s cogent preliminary objections should have been sustained, because as a matter of law, John cannot sue to enforce an alleged gift of future mortgage payments. We therefore reverse the trial court, and order that summary judgment be entered for Phyllis Coleman in this action.

Order reversed, and judgment entered for appellant.

WIEAND, J., concurs and dissents.

WIEAND, Judge,

concurring and dissenting:

I agree with the majority that the summary judgment entered in favor of the plaintiff-appellees must be reversed. Instead of entering judgment for the appellant, however, I would remand for further proceedings.

The applicable principles of law were stated by the Supreme Court in Masgai v. Masgai, 460 Pa. 453, 333 A.2d 861 (1975), as follows:

One who by acceptance of a deed assumes and agrees to pay a mortgage to which the property is subject becomes liable both to his grantor and also to the mortgagee as a third party beneficiary. See Steinert v. Galasso, 363 Pa. 393, 69 A.2d 841 (1949). If the conveyance is made under and subject to a mortgage but without an express assumption, there is no direct obligation to the mortgagee on the part of the grantee. Act of June 12, 1878, P.L. 205, § 1, 21 P.S. § 655. See Meco Realty Co. v. Burns, 414 Pa. 495, 200 A.2d 869 (1964). Rather, the obligation of the grantee is to indemnify the grantor from the mortgage obligation, including any deficiency judgment following foreclosure. See Heaney v. Riddle, 343 Pa. 453, 23 A.2d 456 (1942).

Id. at 459 n. 5, 333 A.2d at 864 n. 5. See also: Ruzyc v. Brown, 320 Pa. 213, 216-218, 181 A. 783, 784-785 (1935); Faulkner v. McHenry, 235 Pa. 298, 301, 83 A. 827, 828 (1912); In re May’s Estate, 218 Pa. 64, 69, 67 A. 120, 121 (1907), overruled on other grounds by Schuetz’s Estate, 315 Pa. 105, 172 A. 865 (1934).

In reciting this principle of indemnification, however, the Supreme Court has on occasion suggested that it is a presumption which may be rebutted by an agreement to the contrary. Thus, in Fair Oaks Bldg. & Loan Ass’n v. Kohler, 320 Pa. 245, 181 A. 779 (1936), the Court said:

Where a conveyance is made subject to a mortgage, the amount due on the mortgage is presumptively part of the consideration for the purchase: Orient Building & Loan Association v. Freud, 298 Pa. 431, 435[, 148 A. 841]. As between the parties to the conveyance this presumption may be overcome by oral or written agreement, but not to the prejudice of others not parties thereto who may be affected thereby. We have held that where a purchaser comes into possession of property with an existing mortgage thereon, he intends to indemnify the vendor against loss through such mortgage, and that there is thus created a contingent liability: Dobkin v. Landsberg, 273 Pa. 174, 180[, 116 A. 814].

Id. at 251, 181 A. at 781. See: Heaney v. Riddle, 343 Pa. 453, 456, 23 A.2d 456, 458 (1942) (“the amount of the mortgage debt was presumably part of the consideration for the purchase”). And in Naffah v. Diebold, 349 Pa. 219, 36 A.2d 782 (1944) (per curiam), the Court said:

Where land is sold and conveyed under and subject to a mortgage there arises an implied obligation on the part of the vendee to indemnify the vendor against the latter’s personal liability for the debt, but this is true only if such obligation constitutes part of the consideration for the conveyance, in which case, the amount of the mortgage lien being deducted from the purchase money, the parties naturally intend that, as between them, the vendor is to be relieved from all liability thereon____ It is clear, therefore, that no implied covenant of indemnity arises unless the obligation to pay the incumbrance constitutes part of the purchase price.

Id. at 220-221, 36 A.2d at 783.

In the instant case, when Phyllis and John E. Coleman took title to the home of their son, John T., on August 28, 1987, they expressly agreed to assume and to pay a mortgage thereon held by Landmark Savings Association. In this manner they became liable both to their son, the grantor, and to the mortgagee for payment of the mortgage.

When Phyllis Coleman, the surviving grantee, subsequently reconveyed the real estate to her son on November 9, 1989, the conveyance was made under and subject to the mortgage of Landmark Savings Association. However, the deed did not contain language that the grantee was assuming or agreeing to pay the mortgage. The son argues that the deed of reconveyance was a gift and was made without consideration. Therefore, he concludes, the consideration did not include an implied agreement to indemnify his mother against the mortgage obligation. The mother’s deposition testimony, while conceding that a gift was intended, disclosed an intent that her son should pay the mortgage because she could no longer afford to pay it on her fixed income.

Under these circumstances, there is, in my judgment, an outstanding factual issue to be determined regarding the appellant-mother’s donative intent. Did she intend her conveyance to be free and clear of all liability for the existing mortgage or was it the intent of the parties that, consistent with the language of the deed, the grantee son was to indemnify the grantor mother for mortgage payments which she was required to pay by virtue of her prior assumption of the mortgage? So that the trial court may receive evidence on this factual issue, I would remand for further proceedings.

      . John does not claim, and the record does not reveal, that the bank ever released John from his debt — it simply added John’s parents as parties liable on the debt.

      . The dissent opines that the case should be remanded to determine the factual issue of whether Phyllis intended that John indemnify her for any obligation she still had to pay the mortgage debt. Phyllis has not asked us to determine if John owes her anything. Rather, the reverse is true — John asked the trial court to declare that Phyllis had to pay the mortgage and/or reimburse him. Moreover, this question of who is primarily and secondarily liable on the debt would become an issue only if the mortgage went into default, foreclosure, and the bank obtained a deficiency judgment. The record shows that the house is worth about $90,000, roughly three times as much as the outstanding mortgage, so a deficiency judgment hardly looms likely. R.R. 71a, 79a, 102a; see Boyle v. Com., Dept. of Transp., 151 Pa.Cmwlth. 430, 433-35, 617 A.2d 70, 72 (1992) (declaratory judgment is not appropriate to determine rights in anticipation of events that may never occur). And as we have stated, John cannot sue his mother because the house she gave him was worth only about $60,000 in equity, instead of its unencumbered fair market value of about $90,000. John certainly knew about the outstanding mortgage, but accepted the gift anyway.


author: KELLY, Judge:

text:
    663 A.2d 746
    COMMONWEALTH of Pennsylvania v. Ana LOPEZ, Appellant.
    Superior Court of Pennsylvania.
    Submitted July 17, 1995.
    Filed Aug. 15, 1995.

      Linda F. Gerencser, Assistant Public Defender, Lancaster, for appellant.
    Joseph C. Madenspacher, District Attorney, Lancaster, for the Commonwealth, appellee.
    Before KELLY, JOHNSON and CERCONE, JJ.
   KELLY, Judge:

In this appeal we are called upon to determine whether the trial court illegally sentenced appellant by imposing two consecutive terms of four to ten years imprisonment after she pled nolo contendere to two counts of arson endangering persons pursuant to 18 Pa.C.S.A § 3301(a)(1)(i) and 18 Pa.C.S.A. § 3301(a)(1)(ii) for setting fire to a single residential property. We reverse and remand for resentencing.

The relevant facts and procedural history of this appeal are as follows. On May 21, 1994, appellant set fire to the residence of Jacob and Margaret Shultz in Lancaster, Pennsylvania. Although no one was injured, the fire caused extensive damage to the Shultz’s home. On January 10,1995, appellant pled nolo contendere to two counts of arson endangering persons under 18 Pa.C.S.A. § 3301(a)(1)(i) and 18 Pa.C.S.A. § 3301(a)(1)(ii). On May 1, 1995, at the sentencing hearing, appellant’s counsel moved for a merger of the sentences. The trial court denied the motion and sentenced appellant to an aggregate term of eight to twenty years incarceration. Specifically, appellant was sentenced consecutively to four to ten years incarceration pursuant to 18 Pa.C.S.A. § 3301(a)(1)(i) and four to ten years incarceration pursuant to 18 Pa.C.S.A. § 3301(a)(1)(ii). Appellant appeals the legality and discretionary aspects of this sentence.

On appeal, appellant raises the following issues:

I. DID THE COURT ERR IN IMPOSING TWO SEPARATE SENTENCES FOR SAME-EPISODE CONDUCT CONSTITUTING A VIOLATION OF “ARSON ENDANGERING PERSONS” UNDER 18 PAC.S. 3301(a)(1)(i) & (ii)?
II. WAS THE COURT’S SENTENCE [OF] EIGHT YEARS TO TWENTY YEARS SO MANIFESTLY EXCESSIVE AS TO CONSTITUTE AN ABUSE OF DISCRETION?
III. DID THE COURT FAIL TO STATE ON THE RECORD ANY FACTOR WHICH COULD JUSTIFY A SENTENCE IN THE AGGRAVATED RANGE OF THE SENTENCING GUIDELINES?

(Appellant’s Brief at 3).

Appellant first argues that the trial court erred in its interpretation of 18 Pa.C.S.A. § 3301(a), which provides as follows:

3301. Arson and related offenses
(a) Arson endangering persons.—
(1) A person commits a felony of the first degree if he intentionally starts a fire or causes an explosion, or if he aids, counsels, pays or agrees to pay another to cause a fire or explosion, whether on his own property or on that of another, and if:
(i) he thereby recklessly places another person in danger of death or bodily injury, including but not limited to a firefighter, police officer or other person actively engaged in fighting the fire; or
(ii) he commits the act with the purpose of destroying or damaging an inhabited building or occupied structure of another.
(2) A person who commits arson endangering persons is guilty of murder of the second degree if the fire or explosion causes the death of any person, including but not limited to a firefighter, police officer or other person actively engaged in fighting the fire, and is guilty of murder of the first degree if the fire or explosion causes the death of any person and was set with the purpose of causing the death of another person.

18 Pa.C.S.A. § 3301(a). Appellant argues that she cannot be sentenced to consecutive terms for violations of both 18 Pa.C.S.A. § 3301(a)(1)(i) and 18 Pa.C.S.A. § 3301(a)(1)(ii) because they are not themselves separate offenses, but rather are alternative means for satisfying 18 Pa.C.S.A. § 3301(a)(1). Therefore, appellant claims, the trial court imposed an illegal sentence. We agree.

Instantly, we note that appellant’s failure to raise this issue before the sentencing court does not constitute a waiver of this issue on appeal. The legality of a sentence cannot be waived. Commonwealth v. Anderson, 434 Pa.Super. 309, 313, 643 A.2d 109, 111 (1994). Thus, we will address the merits of this claim, even though appellant raises it for the first time on appeal.

When interpreting a statute, the court must ascertain and effectuate the intent of the legislature and give full effect to each provision of the statute if at all possible. 1 Pa.C.S.A. § 1921(a); Commonwealth v. Brown, 423 Pa.Super. 264, 266, 620 A.2d 1213, 1214 (1993); Commonwealth v. Edwards, 384 Pa.Super. 454, 460, 559 A.2d 63, 66 (1989), appeal denied, 523 Pa. 640, 565 A.2d 1165 (1989). In construing a statute to determine its meaning, courts must first determine whether the issue may be resolved by reference to the express language of the statute, which is to be read according to the plain meaning of the words. 1 Pa.C.S.A. § 1903(a). See Commonwealth v. Berryman, 437 Pa.Super. 258, 649 A.2d 961 (1994) (en banc).

When construing one section of a statute, courts must read that section not by itself, but with reference to, and in light of, the other sections because there is a presumption that in drafting the statute, the General Assembly intended the entire statute to be effective. 1 Pa.C.S.A. § 1922. See Commonwealth v. Mayhue, 536 Pa. 271, 307, 639 A.2d 421, 439 (1994); Commonwealth v. Berryman, supra at 268, 649 A.2d at 965. Statute headings may be considered in construing a statute. 1 Pa.C.S.A. § 1924. However, the letter of the statute is not to be disregarded under the pretext of pursuing its spirit. 1 Pa.C.S.A. § 1921(b); Commonwealth v. Reeb, 406 Pa.Super. 28, 34, 593 A.2d 853, 856 (1991), appeal denied, 530 Pa. 665, 610 A.2d 45 (1992).

In the present case, the Commonwealth argues that the trial court did not err in sentencing appellant to multiple sentences for her conviction of 18 Pa.C.S.A. § 3301(a)(1)(i) and 18 Pa.C.S.A. § 3301(a)(1)(ii), because the two provisions protect distinct and separate state interests. According to the Commonwealth, 18 Pa.C.S.A. § 3301(a)(1)(i) protects persons from fire whereas 18 Pa.C.S.A. § 3301(a)(1)(ii) protects property from fire. The Commonwealth cites Commonwealth v. Colpo, 367 Pa.Super. 223, 532 A.2d 870 (1987), for the proposition that statutory provisions that protect distinct Commonwealth interests do not merge for sentencing purposes. Id.

We note, however, that in Commonwealth v. Colpo, supra, the defendant was convicted of 18 Pa.C.S.A. § 3301(a), Arson Endangering Persons, and 18 Pa.C.S.A. § 3301(c), Arson Endangering Property. In order to effectuate the intent of the General Assembly, this Court in Commonwealth v. Colpo, supra, correctly held that 18 Pa.C.S.A. §§ 3301(a) and 3301(c) did not merge for sentencing purposes; we also concluded that these sections of the arson statute protect different state interests. In this case though, appellant was not convicted of violating both 18 Pa.C.S.A. § 3301(a) and (c), but rather was convicted of multiple counts of 18 Pa.C.S.A. § 3301(a). As indicated infra, we conclude that 18 Pa.C.S.A § 3301(a) was only intended by the legislature to protect persons against fire, and not to protect property from fire. Accordingly, we believe that appellee’s reliance on Commonwealth v. Colpo, supra, is misplaced.

The Commonwealth’s reading of 18 Pa.C.S.A. § 3301(a) ignores the plain meaning of the statute. That section clearly states that a person is guilty of arson endangering persons if he “intentionally starts a fire or causes an explosion, or if he aids, counsels, pays or agrees to pay another to cause a fire or explosion, whether on his property or on that of another, and if: (i) he thereby places another person in danger of death or bodily injury, including but not limited to a firefighter, police officer or other person actively engaged in lighting the fire; or (ii) he commits the act with the purpose of destroying or damaging an inhabited building or occupied structure of another.” 18 Pa.C.S.A. § 3301(a) (emphasis added).

In Commonwealth ex rel. Specter v. Vignola, 446 Pa. 1, 5, 285 A.2d 869, 871 (1971), our Supreme Court held that the word “or,” occurring in a statute, must be given its ordinary meaning unless such a construction would give a result which is absurd, impossible of execution, highly unreasonable, or tending to nullify the legislative intent. Id. “Thus, if the words of a statute indicate that the statute applies if A or B is true or C is true, and it is proven only that B is true, then the statute will apply.” Commonwealth v. Belcher, 233 Pa.Super. 212, 217, 335 A.2d 505, 507 (1975) (citing Garratt v. Philadelphia, 387 Pa. 442, 127 A.2d 738 (1956) (emphasis in original).

Instantly, employing our Supreme Court’s example, it is our conclusion that the word “or,” used in its ordinary sense, indicates an alternative between two or more unlike actions. Applying that definition to 18 Pa.C.S.A. § 3301(a), we read the statute to mean that any person who either “recklessly places another person in danger of death or bodily injury” or “commits the act with the purpose of destroying or damaging an inhabited building or occupied structure of another” may be prosecuted for and convicted of committing arson endangering persons. However, it simply does not follow from this reading that a person who commits both of the above acts may be sentenced twice for arson endangering persons when only one criminal offense, ie., starting one fire, has been committed. Not only does such a reading ignore the plain meaning of the word “or,” but if applied could raise grave constitutional issues. See Commonwealth v. Bostic, 500 Pa. 345, 456 A.2d 1320 (1983) (intent of double jeopardy clause is to prevent courts from imposing more than one punishment under particular legislative enactment); Commonwealth v. Ayala, 492 Pa. 418, 424 A.2d 1260 (1981) (where, practically speaking, there was only one offense against Commonwealth, defendant may only be punished for one offense, despite number of chargeable offenses arising out of single transaction); Commonwealth v. Williams, 344 Pa.Super. 108, 496 A.2d 31 (1985) (same). Accordingly, because this Court must resolve a statutory issue by reference to the statute’s express language, we hold that the trial court’s reading of § 3301(a) was in error.

Furthermore, we do not agree with the Commonwealth’s assertion that in drafting 18 Pa.C.S.A. § 3301(a)(1)(ii) the General Assembly intended to protect property from fire. In construing the intent of the legislature, this Court is permitted to consider statute headings. 1 Pa.C.S.A. § 1924. We again note that the heading for 18 Pa.C.S.A. § 3301(a) is “Arson Endangering Persons.” We also note that the heading for 18 Pa.C.S.A. § 3301(c) is “Arson Endangering Property.” Accordingly, it is our conclusion that the General Assembly intended for 18 Pa.C.S.A. § 3301(a) to protect persons from fire and 18 Pa.C.S.A. § 3301(c) to protect property from fire.

While 18 Pa.C.S.A. § 3301(a)(1)(ii) does state that one who sets a fire “with the purpose of destroying or damaging an inhabited building or occupied structure of another” may be prosecuted for arson endangering persons, we do not believe that the mere mention of property in connection with fire proves that the General Assembly intended for 18 Pa.C.S.A. § 3301(a)(1)(ii) to protect property from fire. Rather, we conclude that the legislature included the above provisions in the arson endangering persons statute because the act of setting fire to a building is one inherently dangerous to persons. Additionally, we note that 18 Pa.C.S.A. § 3301(a)(1)(ii) only applies in cases where the defendant attempts to damage or destroy an “inhabited building” or “occupied structure.” The legislature’s specific inclusion of the words “inhabited” and “occupied” further supports the conclusion that the General Assembly intended for 18 Pa.C.S.A. § 3301(a) to protect persons from the dangers of fire.

Moreover, the Commonwealth’s reading of 18 Pa.C.S.A. § 3301(a) would in effect render 18 Pa.C.S.A. § 3301(c) a nullity. We can think of no reason why, if the General Assembly had intended for 18 Pa.C.S.A. § 3301(a) to protect both persons and property against fire, it would have labeled that section “Arson Endangering Persons” or would have ever bothered writing 18 Pa.C.S.A. § 3301(c). To read 18 Pa.C.S.A. § 3301(a) as the Commonwealth suggests would require this Court to ignore a section of the arson statute intended by the General Assembly to be the law of this Commonwealth; something we refuse to do. See 1 Pa.C.S.A. § 1922 (stating that there is a presumption that the General Assembly intended the entire statute to be effective).

For the foregoing reasons, we conclude that the trial court’s reading of 18 Pa.C.S.A. § 3301(a) was erroneous. Appellant’s sentence as imposed is illegal. Because this issue is dispositive of this case, we see no reason to address appellant’s other issues. Thus, we reverse and remand for resentencing.

Judgment of sentence reversed; case remanded. Jurisdiction relinquished.

      . While this Court in Commonwealth v. Colpo, supra at 229, 532 A.2d at 873, stated that 18 Pa.C.S.A. § 3301(a) protects property, we do not believe that such a finding affects our conclusion that the statute was primarily intended to protect human life. As mentioned infra, the act of setting fire to an inhabited building is one inherently dangerous to persons, whether it be the inhabitants of the structure or the firefighters charged with extinguishing the fire. Thus, whatever protection 18 Pa.C.S.A. § 3301(a) affords, protection of property is only incidental to the statute’s greater interest in protecting human life from the perils of fire.

      . To further support our conclusion that 18 Pa.C.S.A. § 3301(a) was intended to protect persons from fire and § 3301(c) property from fire, we note that one of the elements of arson endangering property is the “intent to destroy or damage an unoccupied structure of another.” 18 Pa.C.S.A. § 3301(c) (emphasis added). The General Assembly’s express designation of unoccupied structures — especially when compared to the express language of 18 Pa.C.S.A. § 3301(a) — strongly suggests that the legislature's intent in drafting 18 Pa.C.S.A. § 3301(c) was to protect the Commonwealth’s interest in the safety of property from fires.


author: SAYLOR, Judge:

text:
    663 A.2d 750
    STUDENT LOAN MARKETING ASSOC., Appellant, v. Stephany D. FARR, Appellee.
    Superior Court of Pennsylvania.
    Argued April 24, 1995.
    Filed August 15, 1995.

      Joel M. Flink, Merion Station, for appellant.
    Ronald H. Beifeld, Norristown, for appellee.
    Before ROWLEY, P.J. and TAMILIA and SAYLOR, JJ.
   SAYLOR, Judge:

This is an appeal from an order of the Court of Common Pleas of Philadelphia County entering judgment in favor of Appellee, Stephany Farr. We affirm.

In 1983, 1984, and 1987, Stephany Farr signed three promissory notes for Health Education Assistance Loans in order to complete her medical education at Temple University Medical School. In 1985, however, Ms. Farr was involved in an automobile accident and sustained injuries which caused her to suffer seizures and severe headaches which were accompanied by nausea and vomiting and disrupted her vision. Although Ms. Farr did graduate from medical school and began an internship, her symptoms prevented her from completing her internship. Ms. Farr eventually defaulted on each of the three promissory notes in October and November of 1991.

In September of 1991, Ms. Farr had notified Appellant, Student Loan Marketing Association (“SLMA”), that she would be unable to repay her obligation pursuant to the notes and begged a forbearance due to disability. SLMA is a private organization which engages in the business of collecting outstanding student loans on behalf of banks. SLMA had received the three promissory notes on assignment, as permitted by 42 C.F.R. § 60.38. When Ms. Farr informed SLMA that she would be unable to repay the loan, SLMA sent her a checklist of items required by the Secretary of Health and Human Services to be submitted for consideration for disability forbearance. SLMA also sent Ms. Farr a letter which advised her that forbearance was available for disability and explained what documentation was required. On January 16, 1992, Ms. Farr contacted SLMA by telephone and was told that the matter had been submitted to a collection agency and that she should contact the collection agency. Ms. Farr experienced some difficulty in obtaining medical confirmation of her disability, but finally obtained such confirmation on May 15, 1992 and submitted it to SLMA by certified mail on July 28, 1992. On August 28, 1992, SLMA sent Ms. Farr a letter informing her that the information that she had provided was incomplete and specifically requesting that she provide her medical records and complete and return a total disability form. On or about September 1, 1992, Ms. Farr submitted a total disability form. Included in the information on the form was a certification by Dr. Edward J. Alexander that Ms. Farr’s disability is permanent.

SLMA did not accept the documentation provided by Ms. Farr as sufficient, and on December 23, 1992, SLMA commenced an action to recover the unpaid principal and interest on the defaulted student loan. On June 23, 1993, the matter was tried before a panel of arbitrators and an award was entered in favor of SLMA in the amount of $35,676.10. Ms. Farr filed a timely appeal.

On March 7, 1994, a trial de novo was held. At the time of trial, Ms. Farr’s total financial obligation was $36,707.24. The issue at trial was whether Ms. Farr was required to repay SLMA this amount, or whether she had given timely and sufficient notice of a medical disability so that her obligation to SLMA for the loan was forgiven by the terms of the contract governing the loans. The trial court found that Ms. Farr had provided sufficient evidence of her disability in order for SLMA to have extended her forbearance from her loan obligation. Accordingly, the trial court found in favor of Ms. Farr and judgment was entered in her favor. This appeal followed.

On appeal, SLMA contends that the trial court erred in determining that Ms. Farr had submitted adequate documentation of her disability. Specifically, SLMA contends that the Department of Health and Human Services has by its conduct and practice established what medical evidence it requires in order to substantiate a disability claim, and that Ms. Farr never submitted all of the requisite items to SLMA, thereby preventing SLMA from presenting the disability claim to the Secretary of the Department of Health and Human Services. SLMA further contends that the trial court erred in determining that Ms. Farr was permanently and totally disabled, thereby entitling her to forbearance from her obligation to SLMA.

Section 60.39 of the Code of Federal Regulations, 42 C.F.R. 60.39(b) provides:

Disability. (1) The Secretary will discharge a borrower’s liability on the loan ... if the borrower is found to be permanently and totally disabled on recommendation of the holder of the loan and as supported by whatever medical certification the Secretary may require. A borrower is totally and permanently disabled if he or she is unable to engage in any substantial gainful activity because of a medically determinable impairment, which the Secretary expects to continue for a long and indefinite period of time or to result in death.
(2) After being notified by the borrower or the borrower’s representative that the borrower claims to be totally and permanently disabled, the holder of the loan may not attempt to collect the loan from the borrower or any endorser. The holder must promptly request that the Secretary determine whether a borrower has become totally and permanently disabled. With its request, the holder must submit medical evidence no more than 4 months old that it has obtained from the borrower or the borrower’s representative.

Here, SLMA claims that Ms. Farr did not adequately equip it to present a disability claim to the Secretary of Health and Human Services, in that she never made a timely submission of all the forms and items required by the “disability packet” with which SLMA had furnished her. Therefore, SLMA claims that without documentation such as Ms. Farr’s medical records and hospital records, it was incapable of submitting her disability claim to the Secretary of Health and Human Services, because such claim would be rejected as “procedurally incomplete.”

The trial court found, however, that the physician’s report and certification of disability submitted by Ms. Farr were adequate documentation of her disability. Significantly, the trial court noted that the terms of the loan contract provide:

If I (the borrower) die or become totally and permanently disabled, my unpaid loan, including interest on the capital of the note, shall be cancelled in accordance with applicable Federal regulations.

The trial court, in considering the provisions of the Code of Federal Regulations, also noted that under section 60.39(b)(1), it is the Secretary of Health and Human Services who determines what type of medical certification is required to be submitted in support of a disability claim. Therefore, the trial court concluded that SLMA was not entitled to make the determination that Ms. Farr had submitted inadequate proof of her disability, and held that Ms. Farr had complied with the terms of the loan contract by providing a physician’s letter and certification of disability as evidence of her disability. As the finder of fact, the trial court was entitled to make such determination, and we will not disturb such finding on appeal.

With respect to SLMA’s contention that the trial court erred in concluding that Ms. Farr was totally and permanently disabled, we note that the evidence submitted by Ms. Farr consisted of a letter from her physician which included a certification of disability. Specifically, the letter stated:

It is my opinion Dr. Stephany Farr is totally and permanently disabled. She is unable to return to any work, because of the chronic headaches. She is unable to return to a residency, because sleep deprivation triggers both seizure and headaches. The frequency and intensity of headaches require narcotics which compromise performance. Anticonvulsant medications cause both lethargy and nausea.... Her prognosis is poor and it is unlikely that she will ever be be to realize her potential given her physical limitations.

Ms. Farr’s physician also completed the total disability form supplied by SLMA, stating that: “... in my best professional judgment, the disabled person named above is unable to engage in any substantial gainful activity or attend school because of a medically determinable impairment.” On the form, the physician classified Ms. Farr’s disability as permanent.

The trial court, sitting as the finder of fact in this case, found the evidence submitted by Ms. Farr in support of her disability claim to be credible. “At the appellate level it is not our duty to find the facts but to determine whether there is evidence in the record to justify the trial court’s findings of fact.” Courts v. Campbell, 245 Pa.Super. 326, 330, 369 A.2d 425, 428 (1976), quoting Lawner v. Engelbach, 433 Pa. 311, 313, 249 A.2d 295, 297 (1969). Furthermore, it is well settled that

[w]hen a trial judge sits without a jury his findings of fact ... have the weight of a jury verdict and cannot be disturbed on appeal unless they lack sufficient and competent evidential support. In such case, the party favored by the finding is entitled to have the evidence viewed in the light most favorable to him and to have all conflicts in the testimony resolved in his favor. Darlington Brick and Clay Products v. Aino, 225 Pa.Super. 186, 187, 310 A.2d 401, 402 (1973).

Courts v. Campbell, supra, 245 Pa.Super. at 331, 369 A.2d at 428.

The evidence in this case, viewed in the light most favorable to Ms. Farr, supports the trial court’s conclusion that she was indeed permanently disabled. The trial court reviewed the medical opinion of Ms. Farr’s physician and found it credible. Such determinations are within the exclusive province of the finder of fact and will not be disturbed on appeal. The trial court based its determination that Ms. Farr was permanently disabled on the physician’s opinion and prognosis. Because we find that the opinion and prognosis provide competent and sufficient evidentiary support for the trial court’s determination, we will not disturb its factual finding that Ms. Farr was permanently disabled and accordingly, was entitled to forbearance on her obligation to SLMA.

Order affirmed.

      . The Health Education Assistance Loan Program is a program of federal insurance of educational loans to graduate students in the fields of medicine. The basic purpose of the program is to encourage lenders to make loans to medical students who desire to borrow money to pay for their educational costs. See, 42 C.F.R. § 60.1(a). The Code of Federal Regulations provides that the Secretary of Health and Human Services insures each lender or holder for the losses of principal and interest incurred because of a borrower’s death or total and permanent disability. In such instances, the Secretary pays the amount of the loss to the lender or holder, see, 42 U.C.S.A. § 292m; 42 C.F.R. § 60.1(c), and the loan is then assigned to the Secretary. At that time, the United States Government becomes the borrower’s direct creditor.


author: HESTER, Judge:

text:
    663 A.2d 753
    PHICO INSURANCE COMPANY v. PRESBYTERIAN MEDICAL SERVICES CORPORATION, Delaware Valley Convalescent Homes, Inc. Appeal of PRESBYTERIAN MEDICAL SERVICES CORPORATION.
    Superior Court of Pennsylvania.
    Argued May 23, 1995.
    Filed Aug. 15, 1995.

      Richard F. McMenamin, Philadelphia, for appellant.
    Peter J. Mooney, Philadelphia, for Phico Ins., appellee.
    Before CAVANAUGH, CIRILLO and HESTER, JJ.
   HESTER, Judge:

Presbyterian Medical Services Corporation appeals from the order entered in the Court of Common Pleas of Bucks County on June 10, 1994, which granted summary judgment in favor of Phico Insurance Company. For the reasons set forth below, we affirm.

The procedural history of this case may be summarized as follows. On March 15, 1993, Phico filed a declaratory judgment complaint against both appellant and Delaware Valley Convalescent Homes, Inc. In that complaint, Phico alleged that the terms of a nursing home consulting agreement required appellant, its insured under a comprehensive liability policy, to provide Delaware Valley with certain advice and assistance. In addition, Phico asserted that the terms of the agreement precluded the recovery of consequential damages and limited appellant’s liability to losses resulting from either gross negligence or willful misconduct. Phico also averred that Delaware Valley utilized the agreement’s language when instituting a breach of contract action against appellant. Finally, Phico contended that the matters advanced in that action fell outside the coverage provided by its policy and were excluded by a provision barring contractually-based claims. Accordingly, Phico requested, among other things, a declaration that it had no obligation to defend or indemnify appellant against the claims asserted by Delaware Valley.

On May 6, 1993, after the effectuation of service, appellant filed an answer and new matter which challenged Phico’s entitlement to relief and set forth a number of defenses. More specifically, appellant contended that the claims asserted in the underlying action had not been premised upon any breach of the agreement. Rather, it alleged that they were based upon allegations of gross negligence and willful misconduct. Therefore, appellant averred that the terms of the policy obligated Phico to defend and indemnify it. Moreover, appellant alleged that Phico was estopped from denying coverage.

Phico later disputed the correctness of the estoppel claim in a reply to appellant’s new matter. On March 15,1994, relying upon the provisions of the liability policy, Phico moved for summary judgment. Several weeks later, the trial court entered the contested order. This timely appeal followed.

In Acme Markets v. Federal Armored Express, 437 Pa.Super. 41, 45, 648 A.2d 1218, 1220 (1994) (citations omitted), we noted that our scope of review from a grant of summary judgment is plenary and quoting American States Insurance Co. v. Maryland Casualty Co., 427 Pa.Super. 170, 628 A.2d 880 (1993), stated:

In reviewing an order granting a motion for summary judgment, we must view the record in the light most favorable to the non-moving party. All doubts as to the existence of a genuine issue of material fact must be resolved against the moving party. Moreover, in summary judgment proceedings, it is not the court’s function to determine the facts, but only to determine if an issue of material fact exists. Summary judgment should only be granted in those cases which are free and clear from doubt.
Summary judgment is proper only where the pleadings, depositions, answers to interrogatories, admissions of record and affidavits on file support the trial court’s conclusion that no genuine issue of material fact exists and [that] the moving party is entitled to judgment as a matter of law.

Moreover, we will not overturn a trial court’s grant of summary judgment in the absence of either an error of law or a clear abuse of discretion. Id.; see also Mellon v. Barre-National Drug Co., 431 Pa.Super. 175, 636 A.2d 187 (1993). Keeping these principles in mind, we consider the propriety of the contested summary judgment grant.

In the present case, appellant does not contend that an issue of fact existed such as to render the trial court’s grant of summary judgment inappropriate. Rather, appellant’s chailenge to the court’s decision is premised upon the claim that Phico was not entitled to judgment as a matter of law. In this regard, appellant asserts that since Phico possessed a potential duty of indemnification, Phico was obligated to defend it in the underlying action.

Preliminarily, we note:

The duty to defend is a distinct obligation, separate and apart from the insurer’s duty to provide coverage. Erie Ins. Exchange v. Transamerica Ins. Co., 516 Pa. 574, 582, 533 A.2d 1363, 1368 (1987). Moreover, the insurer agrees to defend the insured against any suit arising under the policy “even if such suit is groundless, false, or fraudulent.” Gedeon v. State Farm Mutual Automobile Ins. Co., 410 Pa. 55, 56, 188 A.2d 320, 321 (1963). Since the insurer agrees to relieve the insured of the burden of defending even those suits which have no basis in fact, the obligation to defend arises whenever the complaint filed by the injured party may potentially come within the coverage of the policy. Id.; see also Wilson v. Maryland Cas. Co., 377 Pa. 588, 105 A.2d 304 (1954); Biborosch v. Transamerica Ins. Co., 412 Pa.Super. 505, 603 A.2d 1050 (1992); Youngman v. CNA Ins. Co., 401 Pa.Super. 381, 585 A.2d 511 (1991). In order to determine whether a claim may potentially come within the coverage of the policy, we must first ascertain the scope of the insurance coverage and then analyze the allegations in the complaint. Biborosch, 412 Pa.Super. at 509, 603 A.2d at 1052 (citing Cadwallader v. New Amsterdam Casualty Co., 396 Pa. 582, 152 A.2d 484 (1959)).

Britamco Underwriters v. Grzeskiewicz, 433 Pa.Super. 55, 59, 639 A.2d 1208, 1210 (1994). Accordingly, we turn to the relevant provisions of the comprehensive liability policy at issue.

Pursuant to a policy provision relating to director, officer, and trustee liability, Phico promised to “pay on behalf of the insured all sums which the insured shall be legally obligated to pay as damages because of wrongful act loss ... to which this insurance applies and for which claim is first made against the insured and reported to the Company during the policy period.” Answer and new matter of appellant, Exhibit A, at 1 (emphasis omitted). The phrase “wrongful act loss” includes within its scope:

any amount which the named insured or the Directors, Officers and Trustees shall be legally obligated to pay for a claim or claims made against the named insured or the Directors, Officers and Trustees, arising from any actual or alleged error or misstatement or misleading statement or act or omission or neglect or breach of duty by the Directors, Officers and Trustees in the discharge of their duties, individually or collectively, or any person acting on their behalf, or any matter claimed against them solely by reason of their being Directors, Officers and Trustees of the named insured.

Id. at 12 (emphasis omitted). In addition, we note that policy exclusion (m) precludes coverage for claims arising in connection with the breach of oral and written agreements unless they relate, among other things, to the employment of persons rendering professional health care services. Id. at 4.

Our review of the underlying complaint reveals that Delaware Valley alleged that it entered into an agreement with appellant for the management of a nursing home. Delaware Valley, which incorporated the terms of that agreement by reference, also asserted that appellant, through two of its employees, mismanaged the home in a myriad of ways. The various asserted acts of mismanagement related to nearly every aspect of appellant’s administration from the quality of patient care and the excessive use of temporary nurses to the failure to ensure that the home complied with appropriate regulations. Delaware Valley contended that the challenged acts constituted either gross negligence or willful misconduct and collectively resulted in a breach of the agreement. Consequently, Delaware Valley requested both damages and the costs associated with the litigation.

Even if we assumed that the claims asserted by Delaware Valley may potentially fall within the scope of the coverage relating to director, officer, and trustee liability, such an assumption would not end our analysis. Instead, it merely would require us to turn to the next logical issue, which involves the applicability of the policy exclusion relating to contractually-based claims. As our review of Delaware Valley’s complaint demonstrates, the parties were involved in a contractual relationship for the management of a nursing home. Since the contractual relationship did not relate to the employment of a person for the provision of health care services, any determination as to the applicability of the policy exclusion involves an analysis of whether the claims asserted in the complaint sound in tort or in contract.

The determination as to whether causes of action sound in contract or in tort is difficult due to the somewhat confused state of our law. See Grode v. Mutual Fire, Marine, and Inland Insurance Co., 154 Pa.Commw. 366, 623 A.2d 933 (1993) (noting the existence of confusion in this area). Indeed, we note that we have two distinct lines of case law relating to the issue. The first line arose with Raab v. Keystone Insurance Co., 271 Pa.Super. 185, 412 A.2d 638 (1979). In Raab, we considered a claim that an insurance company negligently had failed to pay benefits according to an insurance contract. Quoting the trial court, we stated:

Generally, when the breach of a contractual relationship is expressed in terms of tortious conduct, the cause of action is properly brought in assumpsit and not in trespass. Damian v. Hernon, 102 Pa.Super. 539, 157 A. 520 (1931). However, there are circumstances out of which a breach of contract may give rise to an actionable tort. Closed Circuit Corp. of America v. Jerrold Electronics Corp., 426 F.Supp. 361 (E.D.Pa.1977). The test used to determine if there exists a cause of action in tort growing out of a breach of contract is whether there was an improper performance of a contractual obligation (misfeasance) rather than the mere failure to perform (nonfeasance). Behrend v. Bell Telephone Company, 53 D & C 2d 421 (1971), citing Siegel v. Struble Bros., 150 Pa.Super. 343, 28 A.2d 352 (1942).

Id., 271 Pa.Super. at 187-88, 412 A.2d at 639. Applying these principles, we concluded that the plaintiffs’ claim was rooted in an assertion of nonfeasance and thus, raised a cause of action in assumpsit.

Later, in Hirsch v. Mount Carmel District Industrial Fund, 363 Pa.Super. 433, 526 A.2d 422 (1987), we considered the correctness of the manner in which a trial court applied the principles of Raab. However, in a footnote, we noted that Raab technically possessed no precedential authority since it represented the viewpoint of only one member of a three-judge panel.

We believe the simple rule expressed in Raab is inadequate to determine the true character of a claim. Although the rule certainly sets forth a bright and easily discernable line for considering the nature of a claim, it is not difficult to imagine many agreement-based complaints which may be characterized as sounding in tort when they more properly should be seen as contractual. Consequently, since Raab possesses no precedential authority, we do not follow it. Therefore, we turn to the second line of cases, which we believe more appropriately addresses the characterization issue.

In Bash v. Bell Telephone Co., 411 Pa.Super. 347, 601 A.2d 825 (1992), we took a somewhat different approach to the issue. In that case, which arose in connection with the breach of an agreement relating to the publication of a telephone directory advertisement, we examined federal authority and indicated that to be construed as a tort action, the wrong ascribed to the defendant must be the gist of the action with the contract being collateral. In addition, we noted that a contract action may not be converted into a tort action simply by alleging that the conduct in question was done wantonly. Finally, we stated that the important difference between contract and tort actions is that the latter lie from the breach of duties imposed as a matter of social policy while the former lie for the breach of duties imposed by mutual consensus.

We note that Bash is consistent with the approach taken in Toombs NJ Inc. v. Aetna Casualty & Surety Co., 404 Pa.Super. 471, 591 A.2d 304 (1991). In that case, we considered whether a complaint relating to the breach of an agreement to establish two restaurants alleged tortious claims that were covered under an insurance policy. We briefly examined the claims asserted in the complaint and found that the action both in its essence and upon its face was one for breach of contract. In addition, we noted:

To allow indemnification under the facts presented here would have the effect of making the insurer a sort of silent business partner subject to great risk in the economic venture without any prospects of sharing in the economic benefit. The expansion of the scope of the insurer’s liability would be enormous without corresponding compensation. There is simply no reason to expect that such a liability would be covered under a comprehensive liability policy which has, as its genesis, the purpose of protecting an individual or entity from liability for essentially accidental injury to another individual, or property damage to another’s possessions, even if, perhaps, the coverage of the policy has been expanded to cover other non-bodily injuries that sound in tort.

Id., 404 Pa.Super. at 476, 591 A.2d at 306.

Although appellant contends that the claims asserted in Delaware Valley’s complaint were both contractual and tortious in' nature, its contention must fail. Our review of the complaint in question demonstrates that the action related only to appellant and Delaware Valley and arose out of the former’s performance of a management agreement. Consequently, while Delaware Valley included allegations that appellant engaged in both gross negligence and willful misconduct, the agreement unquestionably was not collateral to any of its claims. Indeed, this conclusion is supported by the fact that Delaware Valley averred that the actions which it relies upon to demonstrate tortious conduct collectively resulted in the breach of the agreement. Finally, we note that to make Phico responsible under the insurance policy would effectively change its status from a mere insurer to a party to the transaction.

Having determined that the policy exclusion regarding contractually-based claims precludes coverage under the insurance policy, we must examine appellant’s assertion that Phico was estopped from relying upon that provision. In support of its claim, appellant alleges that while Phico provided counsel to defend the claim, it improperly neglected to reserve its right to deny coverage.

Initially, we note:

[a] liability insurer will not be estopped to set up the defense that the insured’s loss was not covered by the insurance policy, notwithstanding the insurer’s participation in the defense of an action against the insured, if the insurer gives timely notice to the insured that it has not waived the benefit of its defense under the policy. However, a reservation of rights in this respect, to be effective, must be communicated to the insured. It must fairly inform the insured of the insurer’s position and must be timely, although delay in giving notice will be excused where it is traceable to the insurer’s lack of actual or constructive knowledge of the available defense.

Brugnoli v. United Nat’l Ins. Co., 284 Pa.Super. 511, 518, 426 A.2d 164, 167 (1981), modified, 284 Pa.Super. 520, 434 A.2d 105 (1981), quoting 14 G. Couch, Cyclopedia of Insurance Law § 51:83 (2d ed. 1965) (footnotes omitted).

In the present case, appellant’s specific claim is limited to the contractually-based policy exclusion. See Appellant’s brief at 19. Consequently, we must determine whether Phico effectively reserved its rights with respect to that exclusion. With this in mind, we turn to the record.

Our review of the record reveals that on July 10, 1989, R. Peter Ericson, a representative of Phico, wrote to appellant’s risk manager, Patricia Roth. In that letter, Mr. Ericson acknowledged the receipt of materials from Ms. Roth and informed her that it would be premature to determine whether there would be coverage for any claim by Delaware Valley. However, Mr. Ericson indicated that if the claim merely related to a breach of contract, it would not be covered. In addition, he mentioned that if the claim involved negligence, there may be coverage. Finally, Mr. Ericson agreed to place the materials received from appellant in an incident report.

Eleven days later, after Ms. Roth requested Mr. Ericson to re-examine his position, Mr. Ericson again wrote to her. In his letter, he agreed to establish a file for the claim and assign it to counsel for investigation. He then stated:

As I had indicated in my earlier telephone conversation with you and my letter of July 10, 1989, I believe that there would most probably not be coverage under the hospital’s policy with PHICO, especially if this is just a straight claim for breach of contract. By setting up a claim file and assigning this matter to counsel for investigation, I am not waiving my right under the hospital policy to reserve rights based on any exclusion of the hospital’s policy with PHICO nor am I waiving rights on behalf of PHICO to decline coverage, should that be justified.
I have spoken with Brian M. Peters, Esquire, Post & Schell in Philadelphia and asked him to become involved in an investigation of this matter. Mr. Peters will be involved in investigating the substantive issues of this case and will not be involved in the issues concerning coverage, should they later arise.

Appellant’s response to Phico’s motion for summary judgment, Exhibit E.

On April 17, 1991, Delaware Valley filed its complaint against appellant. Several weeks later, following the effectuation of service, Stephanie E. Chertok informed Ms. Roth in a letter that she had received documentation regarding the suit and indicated that the Phico policy did not cover breach of contract claims. She then quoted the specific policy exclusion relied upon in support of her conclusion.

Our review of the record reveals that Phico informed appellant from the outset that the policy at issue would not cover breach of contract claims. In his second letter, Mr. Ericson, while agreeing to assign counsel to investigate the matter, again indicated that appellant would not be covered if the claims asserted by Delaware Valley were for breach of contract. In addition, he clearly stated that Phico would not be waiving coverage or exclusion issues. As this letter was written long before suit in the action was filed, Phico unquestionably informed appellant of its position in a timely fashion. Thus, since we find that Phico properly reserved its right to raise its policy exclusion relating to contractually-based claims, appellant’s estoppel claim must fail.

Order affirmed.

      . Moreover, even though we ostensibly applied Raab in Fink v. Delaware Valley HMO, 417 Pa.Super. 287, 612 A.2d 485 (1992), we do not believe that its misfeasance/nonfeasance rule possesses any vitality. In Fink, we considered whether breach of contract and general negligence claims were separate and distinct for appealability purposes. The breach of contract claim sought recovery for the cost of a surgical procedure as well as damages for bodily harm, wage loss, and other items resulting from the defendant’s failure to pay for the procedure. In the negligence count, the plaintiff sought damages for pain and suffering, mental anguish and other injuries arising from, among other things, the negligent withholding of needed medical services and the negligent infliction of mental distress. Although we cited Raab, we examined the various allegations of negligence and noted that the plaintiff sought different measures of damages in the breach of contract and negligence counts. Thus, rather than engaging in a pure misfeasance/nonfeasance analysis, we examined the gist of the complaint.

      . We note that one case cited by appellant, Barber v. Harleysville Mut. Ins. Co., 304 Pa.Super. 355, 450 A.2d 718 (1982), concluded that a counterclaim alleging a breach of an agreement via improper performance raised a suggestion that the question of negligence was at issue. However, that case, which neither cited any authority for that proposition nor discussed the matter with any detail, apparently did not involve a specific policy provision relating to contractually-based claims. Accordingly, we find it distinguishable.


author: CERCONE, Judge:

text:
    663 A.2d 759
    Veryl Leo WOY, III, v. Patricia WOY. Appeal of Thomas R. TAYLOR, Proposed Intervenor.
    Superior Court of Pennsylvania.
    Submitted June 19, 1995.
    Filed Aug. 17, 1995.

      Mark J. Remy, Lewistown, for appellant.
    Orris C. Knepp, III, Lewistown, for Veryl Woy, appellee.
    Ralph A. Germak, McCallisterville, for Patricia Woy, appellee.
    Before McEWEN, HUDOCK and CERCONE, JJ.
   CERCONE, Judge:

This is an appeal from an order denying appellant Thomas R. Taylor’s petition for intervention and special relief. We affirm.

Appellees Veryl Leo Woy, III and Patricia Woy, were married on November 21, 1988. Prior to separating in April of 1991, the couple had one child, Veryl Leo Woy, IV. In June of 1991, Patricia Woy met appellant Thomas R. Taylor at their place of employment. She and her son Veryl Woy, IV began to live with appellant at his mother’s home in July of 1991. While there, Mrs. Woy learned that she was pregnant. In January or February of 1992, she returned to her husband’s home. The child, John Wesley Woy, was born on June 17, 1992. For a brief period in July of 1992, Patricia Woy again resided with appellant. In August of 1992, however, she was diagnosed as paranoid schizophrenic and was involuntarily committed to the Mental Health Unit of Lewistown Hospital.

Appellee husband sought custody of the child Veryl Woy, IV. At the November 2, 1992 custody hearing, he orally amended the petition for custody to include John Wesley Woy. Mrs. Woy and her attorney agreed that primary legal and physical custody of both children should be awarded to husband. On April 19, 1993, appellant Thomas Taylor filed a Petition for Intervention and Special Relief claiming paternity of John Wesley and requesting blood testing to ascertain the natural father’s identity. The lower court conducted a hearing on February 2, 1994 and denied appellant’s petition by order dated April 8, 1994.

In this timely appeal, appellant challenges the propriety of that dismissal. Specifically, he claims to have rebutted the presumption that appellee husband is the child’s father by establishing appellee’s non-access to mother during the period of conception. As such, appellant continues, the trial court erred in refusing to compel appellee to submit to blood tests. We disagree. To the contrary, when a wife engages in sexual relations with a man, not her husband, during intermittent separations from her husband, a child born to her enjoys the “presumption of legitimacy” absent clear and convincing proof of the husband’s inability to procreate or lack of access to his wife at the time of conception.

The presumption that a child born to a married woman is a child of the marriage, and therefore of the woman’s husband is one of the strongest presumptions known to the common law. John M. v. Paula T., 524 Pa. 306, 314, 571 A.2d 1380, 1384-85 (1990), cert. denied, 498 U.S. 850, 111 S.Ct. 140, 112 L.Ed.2d 107 (1990); Everett v. Anglemeyer, 425 Pa.Super. 587, 592, 625 A.2d 1252, 1255 (1993). The putative father can overcome this presumption only by clear and convincing evidence that a husband was incapable of procreation or had no access to his wife during the relevant period. Everett, 425 Pa.Super. at 592-93, 625 A.2d at 1255. Once the common law presumption is rebutted by clear and convincing evidence, blood tests become relevant to determine parentage. McCue v. McCue, 413 Pa.Super. 71, 78, 604 A.2d 738, 741 (1992), appeal denied, 531 Pa. 655, 613 A.2d 560 (1992) (noting that the common law requirement of non-access or impotence has not been eliminated by the enactment of 23 Pa.C.S.A. § 5104). Nevertheless, a party’s right to a blood test is not absolute and must be balanced against competing societal or family interests. McCue, 413 Pa.Super. at 73, 604 A.2d at 739 (quoting Donnelly v. Lindenmuth, 409 Pa.Super. 341, 344, 597 A.2d 1234, 1235 (1991)).

Appellant attempted to overcome the presumption by illustrating not that husband was incapable of procreation, but that husband lacked access to mother at the time of conception. To that end, appellant relied on his own testimony and on that of his mother and Patricia Woy. According to appellant, between June of 1991 and January or February of 1992, he and Mrs. Woy were together “[t]wenty-four (24) hours a day, seven (7) days a week.” N.T. 2/2/94 at 33. Appellant’s mother confirmed that Patricia Woy lived in her home during that period. N.T. 2/2/94 at 27. Patricia Woy, on this occasion, agreed that she had engaged in sexual intercourse only with appellant at the time of conception. N.T. 2/2/94 at 15.

The testimony of a child’s mother, if credible, may alone be sufficient to rebut the presumption. Selm v. Elliott, 411 Pa.Super. 602, 607 n. 2, 602 A.2d 358, 360 n. 2, 361 (1992) (trial court relied solely on testimony of mother to overcome the presumption after making a specific finding that mother’s unrebutted testimony was credible). In this case, the lower court noted Mrs. Woy’s contradictory declarations of paternity and found as a matter of fact that her testimony was not credible:

[Patricia Woy] has indicated that Veryl Leo Woy, III, is the father of John Wesley, and she has indicated that Thomas R. Taylor is the father of John Wesley. [Patricia Woy] has held out to the community that Veryl Leo Woy, III, is the father of John Wesley, and has held out to the community that Thomas R. Taylor is the father of John Wesley.
In addition, while living with Mr. Taylor, the Respondent initiated a Support Action in the Juniata County Court of Common Pleas against Veryl Leo Woy, III, seeking support for John Wesley; then indicated to the Court that Mr. Woy was not the father of John Wesley. All of [her] statements regarding the paternity of John Wesley have been inconsistent.

Trial court opinion dated 4/4/94 at 4-5. Likewise, according to appellee husband’s mother, Mrs. Woy has confessed that she is unsure of the identity of the child’s natural father. N.T. 2/2/94 at 38.

The trial court is free to believe all, part, or none of the evidence presented, and is likewise free to make all credibility determinations. Fonzi v. Fonzi, 430 Pa.Super. 95, 100, 633 A.2d 634, 637 (1993); Gemini Equipment Co. v. Pennsy Supply, Inc., 407 Pa.Super. 404, 411, 595 A.2d 1211, 1214 (1991). Consequently, we are bound by the trial court’s negative assessment of Mrs. Woy’s credibility. We find, therefore, that appellant failed to establish by clear and convincing evidence appellee’s non-access to his wife at the time of conception.

Appellee husband, by contrast, never vacillated before the trial court regarding the paternity of John Wesley. See Everett, supra, 425 Pa.Super. at 593, 625 A.2d at 1255 (although mother frequently equivocated concerning the identity of the natural father, husband never denied paternity; absent evidence that husband was incapable of procreation or lacked access to mother at the time of conception, putative father could not rebut the presumption of legitimacy). Rather, he sought custody of John Wesley, unequivocally acknowledging paternity and accepting full responsibility. N.T. 11/2/92 at 5-8. See contra Selm v. Elliott, 411 Pa.Super. at 608, 602 A.2d at 361 (presumption overcome when husband/presumptive father failed to accept the child as his own, to provide financial or emotional support to the child, or to rebut testimony that he was impotent at the time of conception). Based on the record before us, we conclude that appellant has failed to overcome by clear and convincing evidence the presumption that John Wesley is a child of the marriage.

The lower court deemed its denial of appellant’s petition to intervene to be in the best interests of the child. As stated, John Wesley was bom while husband and wife were living together. The couple treated him as a child of the marriage. Moreover, appellee husband has acted as the primary custodian and caregiver. We conclude that the lower court has not abused its discretion in this regard. See McMillen v. McMillen, 529 Pa. 198, 202, 602 A.2d 845, 846 (1992) (applying “best interests of the child” standard to custody proceeding and noting that an appellate court may interfere with a trial court’s custody determination only when there has been a gross abuse of discretion).

Order affirmed.

      . The Uniform Act on Blood Tests to Determine Paternity stipulates: In any matter subject to this section in which paternity, parentage or identity of a child is a relevant fact, the court, upon its own initiative or upon suggestion made by or on behalf of any person whose blood is involved, may or, upon motion of any party to the action made at a time so as not to delay the proceedings unduly, shall order the mother, child and alleged father to submit to the tests, the court may resolve the question of paternity, parentage or identity of a child against the party or enforce its order if the rights of others and the interests of justice so require.
      23 Pa.C.S.A. § 5104(c).