author: POPOVICH, Judge:

text:
    530 A.2d 913
    John H. ENGLE, William R. Engle, William C. Engle, t/d/b/a Engle’s Holiday Harbor, a Partnership and as Representative of a Class v. WEST PENN POWER COMPANY, a Corporation, Appellant.
    Superior Court of Pennsylvania.
    Argued June 4, 1987.
    Filed Aug. 25, 1987.

      Harold R. Schmidt, Pittsburgh, for appellant.
    C. James Zeszutek, Pittsburgh, for appellees.
    Before DEL SOLE, POPOVICH and MONTGOMERY, JJ.
   POPOVICH, Judge:

This is an appeal from an interlocutory order granted by permission by Superior Court to the appellant/defendant, West Penn Power Company. See Pa.R.App.P. 312; 42 Pa.C.S. § 702(b).

The record discloses that in November of 1985 the plaintiffs John H. Engle, William R. Engle and William C. Engle, t/d/b/a Engle’s Holiday Harbor, a partnership, sought certification as representatives of a class in excess of fifty members whose property suffered damages due to the defendant’s alleged negligence in the operation of its Lake Lynn hydro-electric dam on the Cheat River in West Virginia.

The plaintiffs averred in their class action complaint that, inter alia, the commonality of questions of law and fact, when coupled with the complexities of the issues and the economies of scale that could be achieved by litigating the claims together, warranted that they be denominated representatives of the class action suit.

The two-count complaint sounded in negligence and alleged the defendant’s maintenance of a dangerous instrumentality (the hydro-electric power dam) and the resultant imprudent release of water retained thereby, which, purportedly, was the direct and proximate cause of flooding in the area for which damages in excess of ten thousand dollars were being sought by the plaintiffs on behalf of the class once representative status was bestowed upon them.

Next of record appears preliminary objections, filed by counsel for the defendant, raising a question of jurisdiction. It was recounted therein that the dispute had been removed, by the defendant, to the United States District Court for the Western District of Pennsylvania. In a Memorandum Opinion filed by the Honorable Alan N. Bloch, the case was remanded to Common Pleas Court upon a finding that the claims of negligence and maintenance of a dangerous instrumentality were state law claims. In support thereof, Judge Bloch wrote:

Under the “well-pleaded complaint” rule, a defendant “may not remove a case to federal court unless the plaintiff’s complaint establishes that the case 'arises under' federal law. Franchise Tax Board [v. Construction Laborers Vacation Trust], 463 U.S. [1] at 10 [103 S.Ct. 2841, at 2846-47, 77 L.Ed.2d 420 (1983).]”

(Memorandum Opinion at 3)

Because the face of the complaint could not be read as raising a federal question (under 28 U.S.C. § 1331) without reference to the petition seeking removal, the District Court concluded that removal was not called for and remanded. However, in footnote 3, the District Court reserved its ruling on the merits of the defendant’s contention that the plaintiffs’ claims were within the exclusive jurisdiction of the federal courts, and, as a result, the defendant was free to raise this question in Common Pleas Court. It did so.

In an opinion and order dated August 4, 1986, Common Pleas Court dismissed the defendant’s preliminary objections in regard to subject matter jurisdiction, but it granted the defendant’s demurrer to count II of the plaintiffs’ complaint, in that insufficient assertions had been made as to the maintenance of a hydro-electric dam being a dangerous instrumentality. Twenty days were afforded to amend the complaint.

On the question of class description, the defendant’s objections thereto were dismissed without prejudice. Thereafter, a “Petition To Amend Order To Certify Controlling Question Of Law And To Stay Proceedings Pending Appeal” was filed by counsel for the defendant. The Petition was granted by order dated August 18, 1986, and, with Superior Court subsequently granting permission to appeal, the matter is presently before us for resolution.

The first issue we need to deal with relates to whether the plaintiffs’ cause of action, grounded upon principles of negligence and the construction, maintenance or operation of an allegedly dangerous instrumentality by the appellant, is subject to exclusive federal jurisdiction pursuant to Sections 10(c) and 317 of the Federal Power Act (16 U.S.C. §§ 803(c) and 825p), and, therefore, is more appropriately subject to review in federal District Court and not Common Pleas Court. Pilot Life Insurance Co. v. Dedeaux, — U.S.-,-, 107 S.Ct. 1549, 1551, 95 L.Ed.2d 39 (1987) (Citations omitted).

“[T]he question whether a certain state action is preempted by federal law is one of congressional intent. ‘ “The purpose of Congress is the ultimate touch-stone.” ’ ”

In making our determination of Congress’ intent with regard to the Federal Power Act, we look first to the instructive case of Pan American Petroleum Corp. v. Superior Court of Delaware, 366 U.S. 656, 81 S.Ct. 1303, 6 L.Ed.2d 584 (1961).

In Pan American, the petitioners sought to prohibit by writ the Superior Court of Delaware from adjudicating a contractual dispute involving the sale of natural gas by the petitioners to Cities Service.

It was the contention of the petitioners that the Natural Gas Act (15 U.S.C. § 717 et seq.) deprived the state court of jurisdiction over the subject matter in dispute, i.e., a contract.

The contract provided that gas produced by the petitioners from a particular field located in Kansas would be purchased by Cities Service at a fixed price. Thereafter, the Corporation Commission of the State of Kansas fixed a minimum price for the gas removed from the particular field which required Cities Service to pay petitioners a higher rate than set forth in the contract.

Cities Service sued in the Kansas courts to obtain judicial review. Pending resolution of the suit, Cities Service advised the petitioners in a letter that payment of the required fixed (higher) price was being made to avoid any penalties flowing from the Kansas statutes for a violation thereof.

Although the validity of the minimum-rate order by the Kansas Commission was upheld by the State Supreme Court, the United States Supreme Court reversed. As a result, complaints were filed in the Delaware Superior Court by Cities Service seeking recoupment of the overcharges paid to the petitioners under the invalidated Kansas minimum-rate order. The petitioners’ request for summary judgment was denied, and what followed was an assault on the jurisdiction of the Superior Court to entertain Cities Service’s cause of action in contract. The Delaware Supreme Court sustained the jurisdiction of the Superior Court.

On certiorari to the United States Supreme Court, the actions of the courts below were affirmed despite a provision (§ 22) providing for exclusivity of jurisdiction in the federal courts as to the Natural Gas Act. In fact, despite this seeming preemption of the field by the federal courts as to the Natural Gas Act, the United States Supreme Court cogently stated:

... questions of exclusive federal jurisdiction and ouster of jurisdiction of state courts are, under existing jurisdictional legislation, not determined by ultimate substantive issues of federal law. The answers depend on the particular claims a suitor makes in a state court — on how he casts his action. Since “the party who brings a suit is master to decide what law he will rely upon,” The Fair v. Kohler Die & Specialty Co., 228 U.S. 22, 25, 33 S.Ct. 410, 411, 57 L.Ed. 716, the complaints in the Delaware Superi- or Court determine the nature of the suits before it. Their operative paragraphs demand recovery on alleged contracts to refund overpayments in the event of a judicial finding that the Kansas minimum-rate order was invalid, or for restitution of the overpayments by which petitioners have allegedly been unjustly enriched under the compulsion of the invalid Kansas order. No right is asserted under the Natural Gas Act.
The suits are thus based upon claims of right arising under state, not federal, law. It is settled doctrine that a case is not cognizable in a federal trial court, in the absence of diversity of citizenship, unless it appears from the face of the complaint that determination of the suit depends upon a question of federal law. See, e.g., Shelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 672, 70 S.Ct. 876, 879, 94 L.Ed. 1194, and cases cited. Apart from diversity jurisdiction, “a right or immunity created by the Constitution or laws of the United States must be an element, and an essential one, of the plaintiffs cause of action. * * * and the controversy must be disclosed upon the face of the complaint, unaided by the answer or by the petition for removal. * * * ” Gully v. First National Bank, 299 U.S. 109, 112-113, 57 S.Ct. 96, 97, 81 L.Ed. 70.
For this requirement it is no substitute that the defendant is almost certain to raise a federal defense. See Shelly Oil Co. v. Phillips Petroleum, supra; Gully v. First National Bank, supra, and authorities cited in those cases. Equally immaterial is it that the plaintiff could have elected to proceed on a federal ground. Henry v. A.B. Dick Co., 224 U.S. 1, 14-17, 32 S.Ct. 364, 366-367, 56 L.Ed. 645. If the plaintiff decides not to invoke a federal right, his claim belongs in a state court.
The rights as asserted by Cities Service are traditional common-law claims. They do not lose their character because it is common knowledge that there exists a scheme of federal regulation of interstate transmission of natural gas. What was said in Gully v. First National Bank, 299 U.S; at page 116, 57 S.Ct. at page 99, is apposite:
“We recur to the test announced in Puerto Rico v. Russell & Co. [288 U.S. 476, 53 S.Ct. 447, 77 L.Ed. 903], supra: ‘The federal nature of the right to be established is decisive — not the source of the authority to establish it.’ Here the right to be established is one created by the state. If that is so, it is unimportant that federal consent is the source of state authority. To reach the underlying law we do not travel back so far. By unimpeachable authority, a suit brought upon a state statute does not arise under an act of Congress or the Constitution of the United States because prohibited thereby. Louisville & Nashville R. Co. v. Mottley [211 U.S. 149, 29 S.Ct. 42, 53 L.Ed. 126], supra. With no greater reason can it be said to arise thereunder because permitted thereby.”

We are not called upon to decide the extent to which the Natural Gas Act reinforces or abrogates the private contract rights here in controversy. The fact that Cities Service sues in contract or quasi-contract, not the ultimate validity of its arguments, is decisive.

Nor does § 22 of the Natural Gas Act help petitioners. “Exclusive jurisdiction” is given the federal courts but it is “exclusive” only for suits that may be brought in the federal courts. Exclusiveness is a consequence of having jurisdiction, not the generator of jurisdiction because of which state courts are excluded. This was settled long ago in Pratt v. Paris Gaslight & Coke Co., 168 U.S. 255, 18 S.Ct. 62, 42 L.Ed. 458, a case involving a grant of exclusive jurisdiction to the federal courts in all cases arising under the patent laws. Suit was brought in a state court on a common-law contract claim. The complaint contained no mention of a patent, but the invalidity of certain patents was set up in defense. In response to the argument that this deprived the state courts of jurisdiction, the Court said:

“Section 711 [the jurisdictional provision] does not deprive the state courts of the power to determine questions arising under the patent laws, but only of assuming jurisdiction of ‘cases’ arising under those laws. There is a clear distinction between a case and a question arising under the patent laws. The former arises when the plaintiff in his opening pleading — be it a bill, complaint or declaration — sets up a right under the patent laws as ground for a recovery. Of such the state courts have no jurisdiction. The latter may appear in the plea or answer or in the testimony. The determination of such question is not beyond the competency of the state tribunals.” (Emphasis in the original.) 168 U.S. at page 259, 18 S.Ct. at page 64.

366 U.S. at 662-65 & n. 2, 81 S.Ct. at 130,7-08 & n. 2.

To start with, our reliance upon Pan American is not unwarranted in light of Congressional debates indicating that: 1) the. Natural Gas Act was intended to o'perate similar to the Federal Power Act; 2) the Natural Gas Act was patterned after the Federal Power Act in the regulatory area; 3) the Natural Gas Act merely contained" standard provisions which had been incorporated into other regulatory legislation, including the Federal Power Act; and 4) Congress intended to establish a fairly common rate making and regulatory scheme for interstate sales of natural gas similar to the Federal Power Act. See City of Gainesville v. Florida Power & Light Co., 488 F.Supp. 1258, 1277-78 (S.D.Fla.1980).

Further, Congress created the Federal Power Commission (now the Federal Energy Regulatory Commission) to carry out the task of establishing federal regulations over most wholesale transactions of electric and gas utilities engaged in interstate commerce. See Federal Power Act of 1935 (Title II of the Public Utility Act of 1935), 49 Stat. 838-863; Natural Gas Act of 1938, 52 Stat. 821; see also Arkansas Electric Cooperative Corp. v. Arkansas Public Service Commission, 461 U.S. 375, 378-79, 103 S.Ct. 1905, 1909, 76 L.Ed.2d 1 (1983).

The similarity continues in that the jurisdictional provisions of the Natural Gas Act (cited in relevant part in footnote 1, supra) and the Federal Power Act (16 U.S.C. § 825p) are identical.

Accordingly, because it is well-established that the Natural Gas Act does not create a cause of action that completely preempts state contract actions, see Pan American, supra; Oliver v. Trunkline Gas Co., 796 F.2d 86, 87 n. 1 (5th Cir.1986), we see no reason either in law or logic advising against the use of case law interpreting the same to give us insight into the breadth Congress intended to imbue in the “exclusivity” clause of § 825p of the Federal Power Act.

Pan American speaks in terms of “exclusivity” of federal courts vis-a-vis state courts turning upon “the particular claims a suitor makes in a state court — [i.e.,] ... how he casts his action. Since ‘the party who brings a suit is master to decide what law he will rely upon.’ ” 366 U.S. at 662, 81 S.Ct. at 1307. This is so despite the fact there may be a scheme of federal law in existence upon which a plaintiffs cause of action may be based but is eschewed for state grounds for the pursuit of one’s cause of action. This position has been embraced in Airco Alloys Division, Airco, Inc. v. Niagara Mohawk Power Corp., 65 A.D.2d 378, 411 N.Y.S.2d 460 (1978) and Cleveland Electric Illuminating Co. v. City of Cleveland, 50 Ohio App.2d 275, 363 N.E.2d 759 (1976), cert. denied, 434 U.S. 856, 98 S.Ct. 175, 54 L.Ed.2d 127 (1977). Both deal with, inter alia, the presentment of contract claims in state courts, despite the assertion of § 825p as a ground for preempting state court jurisdiction involving electric utilities.

Instantly, under the precepts referred to in Pan American and followed in Airco and City of Cleveland, we look to the complaint filed to discern the nature of the plaintiffs’ cause of action. We learn therefrom that the plaintiffs ground their complaint on traditional common law notions of negligence and the alleged maintenance of a dangerous instrumentality by the appellant on its property. See Prosser, Law of Torts, §§ 30, 78 (4th Ed. 1975).

No assertion is made by the plaintiffs concerning the violation of any federal lav?, rule, regulation or order, nor is the cause of action brought to enforce any liability or duty created by or to enjoin any violation of any federal law. See Mississippi Power & Light Co. v. Federal Power Commission, 131 F.2d 148, 150 (5th Cir.1942); Louisiana Power & Light Co. v. Ackel, 616 F.Supp. 445, 447 (M.D.La. 1985); State of California, etc. v. The Oroville-Wyandotte Irrigation District, 411 F.Supp. 361, 367 (E.D.Calif.1975). And, the appellant’s citation to 16 U.S.C. § 803(c) is not helpful to its case. It merely makes reference to a licensee (such as the appellant) being “liable for all damages occasioned to the property of others by the construction, maintenance or operation of the project works or of the works appurtenant or accessory thereto, constructed under the license, and in no event shall the United States be liable therefor.”

There is no mention in § 803(c) of any subject matter which would lead this Court to conclude that a complainant would be foreclosed from instituting suit in state court, on accepted common law principles, solely because of the party-defendant being under the auspices of a federal agency armed to function by federal law.

The logic proffered by the appellant is tenuous at best, and does not need repeated here, except to the extent that uniformity of application of the Federal Power Act and its attendant provisions will not be jeopardized since recourse is always available to parties aggrieved by adverse state-court decisions of federal questions by seeking redress before the United States Supreme Court, if one so desires. See Merrell Dow Pharmaceuticals, Inc. v. Thompson, 478 U.S. 804, 106 S.Ct. 3229, 92 L.Ed.2d 650 (1986); Pan American, supra.

Unlike the Labor Management Relations Act (29 U.S.C. § 185), we do not perceive a congressional intention to explicitly grant federal courts exclusive, preemptive jurisdiction over cases involving suits against utilities regulated by the Federal Energy Regulatory Commission via the Federal Power Act. See Gulf Offshore Co. v. Mobil Oil Corp., 453 U.S. 473, 101 S.Ct. 2870, 69 L.Ed.2d 784 (1981) (Texas courts had jurisdiction over personal injury action arising under the Outer Continental Shelf Land Act, notwithstanding Congress’ explicit grant of exclusive jurisdiction to federal courts over cases arising under OCSLA) and contrast with Metropolitan Life Insurance Co. v. Taylor, — U.S. -, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987) (State common law claims are not only preempted by Employee Retirement Income Security Act of 1974, but it is also displaced by ERISA’s civil enforcement provision to the extent that complaints filed in state courts purporting to plead such state common law causes of action are removable to federal court under 28 U.S.C. § 1441(b)).

In light of the aforesaid, we hold that the state courts of Pennsylvania do have jurisdiction to hear and decide the claims that the plaintiffs have formulated.

It is so ordered. Jurisdiction is relinquished.

      . The procedure followed by the District Court was a proper one. See Franchise Tax Board of the State of Calif. v. Construction Laborers Vacation Trust For Southern Calif., et al., 463 U.S. 1, 8, 103 S.Ct. 2840, 2845, 77 L.Ed.2d 420 (1983).

      . § 22 of the Natural Gas Act, as is herein relevant, reads:
      The District Courts of the United States * * * shall have exclusive-jurisdiction of violations of this [statute] or the rules, regulations, and orders thereunder, and of all suits in equity and actions at law-brought to enforce any liability or duty created by, or to enjoin any violation of, this [statute] or any rule, regulation, or order thereunder.
      The Act of June 21, 1938, c, 556, § 22, 52 Stat. 833, as amended, 15 U.S.C. § 717u.

         The foregoing conclusions are not affected by want of explicit limitation to jurisdiction "arising under" the Natural Gas Act. Such limitation is clearly implied, as the authoritative Committee Reports indicate. "This section [referring to § 22] imposes appropriate jurisdiction upon the courts of the United States over cases arising under the act.” H.R.Rep. No. 709, 75th Cong., 1st Sess., p. 9; S.Rep. No. 1162, 75th Cong., 1st Sess., p. 7.

      . § 825p reads:
      The District Courts of the United States, and the United States courts of any Territory or other place subject to the jurisdiction of the United States shall have exclusive jurisdiction of violations of this chapter or the rules, regulations, and orders thereunder, and of all suits in equity and actions at law brought to enforce any liability or duty created by, or to enjoin any violation of, this chapter or any rule, regulation, or order thereunder. Any criminal proceeding shall be brought in the district wherein any act or transaction constituting the violation occurred. Any suit or action to enforce any liability or duty created by, or to enjoin any violation of, this chapter or any rule, regulation, or order thereunder may be brought in any such district or in the district wherein the defendant is an inhabitant, and process in such cases may be served wherever the defendant may be found. Judgments and decrees so rendered shall be subject to review as provided in sections 1254, 1291, and 1292 of Title 28. No costs shall be assessed against the Commission in any judicial proceeding by or against the Commission under this chapter.
      June 10, 1920, c. 285, § 317, as added Aug. 26, 1935, c. 687, Title II, § 213, 49 Stat. 862, and amended June 25, 1936, c. 804, 49 Stat. 1921; June 25, 1948, c. 646, § 32(b), 62 Stat. 991; May 24, 1949, c. 139, § 127, 63 Stat. 107.
      Identical language also appears in the jurisdictional proviso of the Securities Exchange Act of 1934 (15 U.S.C. § 78aa), and as to § 78aa’s non-preemption status see McMahon Chevrolet, Inc. v. Davis, 392 F.Supp. 322 (S.D.Texas 1975); Cleveland Electric Illuminating Co. v. City of Cleveland, 50 Ohio App.2d 275, 363 N.E.2d 759 (1976), cert. denied, 434 U.S. 856, 98 S.Ct. 175, 54 L.Ed.2d 127 (1977).

      . See note 4 on page 113.

        4. As has been stated in another context, which we find informative here, the fact that the language is repeated in haec verba in the provisions of the two statutes could " ‘indicate[ ] that it does not reflect any considered judgment about what other remedies were ... available or continue[d] to be available under any particular statute.’ ” International Paper Co. v. Ouellette, et al., — U.S.-,-n. 14, 107 S.Ct. 805, 812 n. 14, 93 L.Ed.2d 883 (1987).
      Thus, we are presented with no viable reason counselling against our use of case law interpreting 15 U.S.C. § 717u of the Natural Gas Act to illuminate the manner in which § 825p should be interpreted.

      . See Note, Federal Preemption, Removal Jurisdiction and the Well-Pleaded Complaint Rule, 51 U.Chi.L.Rev. 634, 664-66 (1984).

      . See Montana-Dakota Utilities Co. v. Northwestern Public Service Co., 341 U.S. 246, 71 S.Ct. 692, 95 L.Ed. 912 (1951) (Petitioner failed to state a federally cognizable cause of action; District Court had no jurisdiction over suit); Mississippi Power & Light Co. v. Federal Power Commission, 131 F.2d 148, 150 (5th Cir.1942) (No violation of Federal Power Act or order or regulation of Federal Energy Regulatory Commission precluded securement of federal jurisdiction); Allegheny Electric Co-op., Inc. v. Power Authority of State of New York, 630 F.Supp. 1271 (S.D.N.Y.1986) (§ 825p not applicable because no order of Federal Energy Regulatory Commission was at issue); Louisiana Power & Light Co. v. Ackel, 616 F.Supp. 445, 447 (M.D.La.1985) (semble) and contrast with Clark v. Gulf Oil Corp., 570 F.2d 1138, 1143 (3rd Cir.1978) (Plaintiff's alleged injuries flowing from violation of Natural Gas Act); City of Cleveland v. The Cleveland Electric Illuminating Co., 570 F.2d 123, 128 (6th Cir.1978) (Counterclaim based on order of the Federal Power Act and, thus, § 825p was triggered).

      . The Act of June 10, 1920, c. 285, § 10, 41 Stat. 1068, as amended, 16 U.S.C. § 803(c).

      . The appellant raises other issues in its brief to us which were not certified for our review; and they do not appear to have been presented to the court below. Accordingly, we need not address their merits. See Pa.R.App.P. 302(a).


source: Caselaw Access Project

author: OLSZEWSKI, Judge: CAVANAUGH, Judge,

license: Public Domain

text:
    530 A.2d 919
    FLEET REAL ESTATE FUNDING CORP., Appellee, v. Robert SMITH and Vergie Smith. Appeal of Vergie SMITH.
    Superior Court of Pennsylvania.
    Argued Nov. 20, 1986.
    Filed Sept. 3, 1987.

      Irv Ackelberg, Philadelphia, for appellant.
    Gary E. McCafferty, Philadelphia, for appellee.
    Before CAVANAUGH, OLSZEWSKI and TAMILIA, JJ.
   OLSZEWSKI, Judge:

Instantly, Vergie Smith appeals an order granting appellee’s motion for summary judgment and denying her cross-motion for partial summary judgment in a mortgage foreclosure action. The trial court held that appellee had complied with the notice provisions of Act 6 of 1974, 41 P.S. § 101 et seq., and that summary judgment was appropriate because appellant admitted that she was in default on the mortgage. Appellant contends on appeal that the trial court erred in: (1) declining to consider her defense that appellee failed to service the mortgage in accordance with federal law; and (2) concluding without discussion that she was not entitled to a $1,000 recoupment plus costs and attorney’s fees due to violations of the federal Truth in Lending Act, 15 U.S.C. § 1601 et seq. Having reviewed the record and considered the arguments raised on appeal, we reverse and remand for further proceedings. Jurisdiction is relinquished.

On October 23, 1970, appellant and her husband, who is now deceased, executed and delivered to the Fidelity Bond and Mortgage Company a mortgage upon their newly purchased residence. The mortgage is insured against default by the Federal Housing Administration (FHA) under Sub-chapter II of the National Housing Act, 12 U.S.C. § 1701 et seq. In conjunction with the mortgage transaction, appellant received a disclosure statement mandated by the Truth in Lending Act, 15 U.S.C. § 1601 et seq. Appellee, Fleet Real Estate Funding Corporation, subsequently obtained the mortgage by assignment from Fidelity Bond and Mortgage Company in November 1979.

Appellant defaulted upon the mortgage beginning in January of 1985. Appellee sent appellant a notice of intention to foreclose on September 10, 1985 and then commenced foreclosure proceedings on October 24, 1985. This appeal followed the trial court’s entry of summary judgment for appellee.

A motion for summary judgment may properly be granted only “if 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 fact and that the moving party is entitled to a judgment as a matter of law.” Pa.R.C.P. 1035(b). See also Washington Federal Savings & Loan Association v. Stein, 357 Pa.Super. 286, 288-90, 515 A.2d 980, 981 (1986); Rybas v. Wapner, 311 Pa.Super. 50, 54, 457 A.2d 108, 109 (1983). In passing upon a motion for summary judgment, the court must examine the record in the light most favorable to the nonmoving party. Pocono International Race way, Inc. v. Pocono Produce, Inc., 503 Pa. 80, 83, 468 A.2d 468, 470 (1983); Zimmerman v. Zimmerman, 322 Pa.Super. 121, 124, 469 A.2d 212, 213 (1983). “It is not part of the court’s function to decide issues of fact but solely to determine whether there is an issue of fact to be tried.” Thorsen v. Iron and Glass Bank, 328 Pa.Super. 135, 141, 476 A.2d 928, 931 (1984); Wilk v. Haus, 313 Pa.Super. 479, 482, 460 A.2d 288, 290 (1983). Any doubt must be resolved against the moving party. Washington Federal Savings & Loan Association, supra, 286 Pa.Super. at 288-90, 515 A.2d at 981; Chorba v. Davlisa Enterprises, Inc., 303 Pa.Super. 497, 500, 450 A.2d 36, 38 (1982).

Appellant argues that summary judgment for appellee was improper because she has raised disputed factual issues regarding appellee’s servicing of her FHA-insured mortgage. Appellant contends that appellee failed to follow certain regulations and guidelines issued by the Department of Housing and Urban Development (HUD), which administers the National Housing Act’s mortgage insurance program. The regulations are set forth at 24 C.F.R. §§ 203.500 through 203.660, while the guidelines are contained in HUD Handbook 4330.1, on Administration of Insured Home Mortgages. Both the regulations and the Handbook provisions identify practices, including methods of forbearance relief, which HUD considers acceptable for lending institutions servicing HUD-insured mortgages. Appellant maintains that she may raise appellee’s alleged failure to follow these regulations and Handbook provisions as a defense to this foreclosure action.

While our appellate courts have never addressed this argument, federal courts have determined that the HUD Handbook is merely a statement of HUD policy, which does not have the force of law and which does not establish procedural prerequisites to foreclosure. In Brown v. Lynn, 385 F.Supp. 986 (N.D.Ill.1974) (hereinafter Brown I), plaintiffs contended that the mortgagee defendants had violated legally binding federal regulations by failing to pursue the prescribed alternatives to foreclosure outlined in the existing HUD Guidebook. The court rejected this contention, stating that:

... the HUD guidelines upon which the plaintiffs have particularly relied as a source for the “regulatory” scheme underlying the programs, have not been issued pursuant to the Administrative Procedure Act. As such, they only contain statements of policy and not regulations, per se, having the force and effect of law. Faggins v. Kassler & Co., 72 C 125 (N.D.Ill., July 26, 1972). Statements of policy have no binding effect upon the mortgagees, FHA v. Morris Plan Co., 211 F.2d 756 (9th Cir.1954), and are unenforceable in the courts. Faggins, supra. The guidelines, in their present form, therefore, cannot be used to require the mortgagees to pursue the alternatives listed therein, and, accordingly, do not give rise to a claim of duty owed or a remedy.

Brown I, supra, 385 F.Supp. at 998. The plaintiffs subsequently requested clarification and reconsideration of this aspect of the opinion. In Brown v. Lynn, 392 F.Supp. 559 (N.D.Ill.1975) (hereinafter Brown II), the court denied plaintiffs’ motion for reconsideration, explaining that:

[i]n the absence of impracticality or emergency, HUD’s failure to publish the Guide or Handbook in the Federal Register violates the provisions of § 10.5 [of HUD’s own “mini APA”], and consequently these publications cannot constitute rules or regulations. They are thus not legally binding upon the mortgagees and are not enforceable in a lawsuit such as this seeking monetary damages and injunctive relief.

Brown II, supra, 392 F.Supp. at 562. The court also noted that HUD’s intention not to make the Handbook obligatory was further reflected in an affidavit submitted in another case by Fred W. Pfaender, Director of Loan Management for HUD and the person responsible for publishing the HUD Handbook. In that affidavit, Pfaender stated that:

The Department does not intend to create, nor to imply the creation of vested rights in private citizens based on a mortgagee’s non-compliance with the advisory guidelines contained in Handbook 4191.1, nor to imply that the various forbearance provisions discussed in Handbook 4191.1 must be followed by mortgagees as conditions precedent to maintaining an action to foreclose an insured mortgage.

Brown II, supra, 392 F.Supp. at 562. Relying on this testimony and HUD’s “purposeful avoidance of publishing the Handbook in the Federal Register,” the court concluded that HUD did not intend the Handbook to be binding. Id.'

Subsequent to the decisions in Brown I and Brown II, HUD promulgated the mortgage servicing provisions contained in the Handbook as regulations. See 24 C.F.R. §§ 203.500 through 203.660. As a result, the precedential value of the holding of the Brown decisions that these provisions are merely statements of policy and non-binding has been considerably lessened. Nevertheless, a review of the regulations demonstrates that HUD has still declined to mandate compliance with the servicing provisions as a legal prerequisite to foreclosure. The regulations do mention HUD’s position on this issue, but only with respect to the requirements concerning assignment of these mortgages to HUD. Specifically, 24 C.F.R. § 203.500 states that:

[t]he Department takes no position on whether a mortgagee’s failure to comply with §§ 203.650-203.662 is a legal defense to foreclosure; that is a matter to be determined by the courts.

Other than this provision, the regulations are silent on HUD’s position as to whether a failure to comply with the servicing requirements of 24 C.F.R. §§ 203.500 through 203.660 is a legal defense to foreclosure. Rather than addressing the effect of a violation in a foreclosure action, the regulations focus on the mortgagee’s relationship with HUD, providing that “a pattern of refusal or failure to comply will be the cause for withdrawal of a mortgagee’s approval” as an FHA-insured mortgage lender. 24 C.F.R. § 203.500. In view of the foregoing, we conclude that federal law does not mandate that a mortgagee comply with the regulatioñs and Handbook provisions prior to foreclosing on an FHA-insured mortgage.

Notwithstanding this conclusion, we believe that trial courts in Pennsylvania may exercise their equity powers to restrict a mortgagee who has not, within the reasonable expectations of good faith and fair dealing, followed or applied the forbearance provisions of the HUD regulations and Handbook. In Brown II, although holding that the Handbook was not legally binding and not enforceable in an action for monetary damages and injunctive relief, the court observed that its decision did not limit state or federal foreclosure courts “from exercising their equity powers by refusing to grant foreclosures where mortgagees have flagrantly disregarded the forbearance provisions of the HUD Handbook.” Brown II, supra, 392 F.Supp. at 562. The court explained:

That holding, however, does not preclude foreclosure courts from allowing mortgagors to raise non-compliance with the Handbook as a defense to a “quick” foreclosure. Somewhat analogous to the situation where HUD could suspend or terminate mortgagees for poor servicing practices, even though such conduct would not give rise to a lawsuit, so too, a court of equity may restrict a mortgagee who has not, within the reasonable expectations of good faith and fair dealing, followed or applied the guidelines.
On the theory that the guidelines are sensible, equitable standards of conduct, consistent with, and issued in furtherance of, the national housing goals, foreclosure courts can, and in appropriate instances should, direct the parties to pursue and exhaust the alternatives to foreclosure enumerated in the Handbook. Merely rubber-stamping mortgagees’ foreclosure actions, when they have acted barely within the formal legal bounds of these loosely defined housing programs, will contribute further to the needless loss of homes and to the creation of virtual ghost areas within our inner cities. Foreclosure courts need not woodenly perpetuate the national tragedy surrounding quick foreclosures to which we referred in our earlier opinion, but, where appropriate, they should require adherence to the policies and procedures prescribed by the Handbook.

Id. at 563. At least three states have applied this reasoning in concluding that FHA lenders have an equitable obligation to follow the guidelines established in the HUD Handbook in the event of a mortgagor’s default. Federal National Mortgage Association v. Ricks, 83 Misc.2d 814, 372 N.Y. S.2d 485 (1975); Heritage Bank, N.A. v. Ruh, 191 N.J.Super. 53, 465 A.2d 547 (1983); Associated East Mortgage Company v. Young, 163 N.J.Super. 315, 394 A.2d 899 (1978); Cross v. Federal National Mortgage Association, 359 So.2d 464 (Fla.App.1978). Today we follow the lead of these decisions and hold that a mortgagor of an FHA-insured mortgage may raise as an equitable defense to foreclosure, the mortgagee’s deviation from compliance with the forbearance provisions of the HUD Handbook and regulations.

We agree that these provisions contain “sensible, equitable standards of conduct, consistent with, and issued in furtherance of, the national housing goals.” Brown //, supra, 392 F.Supp. at 563. The legislative purpose of the National Housing Act is to assist in providing a decent home and a suitable living environment for every American family. 12 U.S.C.A. § 1701t. The mortgage insurance program implements this goal by making available to low-income families, mortgages which they could not otherwise afford. See 12 U.S.C.A. § 1709. Given these goals and objectives, implementation, must not end with the purchase of the home and the receipt of a mortgage by a low-income family; retention of the home must be viewed with equal importance. In this regard, the remedy included in the HUD regulations is inadequate to protect the individual mortgagor. As the Appellate Court of Illinois has reasoned:

H.U.D.’s withdrawal of a mortgagee’s approval to participate in the mortgage insurance program after repeated violations of the servicing requirements is a useless remedy for the individual faced with the immediate problem of the foreclosure action; an action which could possibly be avoided by either assignment of the mortgage to H.U.D. or further efforts to arrange a revised payment plan.

Banker’s Life Company v. Denton, 120 Ill.App.3d 576, 579, 76 Ill.Dec. 64, 66, 458 N.E.2d 203, 205 (1983). Finally, mortgagees benefit from participation in the HUD program since the risk of loss in cases of default is substantially reduced, if not eliminated. See 12 U.S.C.A. § 1710. If such mortgagees do not care to abide by HUD forbearance provisions, they should not participate in HUD’s mortgage insurance program.

We have reviewed the pleadings and the affidavits filed in this case. Giving appellant the benefit of all reasonable inferences and resolving all doubts against appellee, we conclude that material facts are in dispute concerning appellee’s alleged failure to adequately service the mortgage. Summary judgment for appellee is therefore inappropriate in this case.

Appellant also argues to this Court that the trial court erred in entering summary judgment without considering her defense that she is entitled to a $1,000 recoupment plus costs and attorney’s fees due to violations of the federal Truth in Lending Act, 15 U.S.C. § 1601 et seq. (TILA). We note, for the purposes of remand, that appellant’s TILA defense is not entitled to consideration in this action.

The TILA is a federal consumer protection statute which, inter alia, requires prospective creditors to fully disclose the credit costs of a given loan to prospective debtors. Household Consumer Discount v. Vespaziani, 490 Pa. 209, 415 A.2d 689 (1980). Under 41 P.S. § 401, residential mortgage lenders must provide the disclosures required by the TILA to residential mortgage debtors.

A panel of this Court recently addressed a mortgagor’s right to assert a set-off for an alleged violation of the TILA as a counterclaim to a mortgage foreclosure action. In New York Guardian Mortgage Corporation v. Dietzel, 362 Pa.Super. 426, 524 A.2d 951 (1987), the panel explained: Section 1640(h) of the Act provides:

A person may not take any action to offset any amount for which a creditor is potentially liable to such person under subsection (a)(2) of this section against any amount owed by such person, unless the amount of the creditor’s or assignee’s liability under this sub-chapter has been determined by judgment of a court of competent jurisdiction in an action of which such person was a party. This subsection does not bar a consumer then in default on the obligation from asserting a violation of this subchapter as an original action, or as a defense or counterclaim to an action to collect amounts owed by the consumer brought by a person liable under this subchapter.

(Emphasis added). Additionally, § 1640(e) of the Act which is labelled “Jurisdiction of courts; limitations on actions” states:

This section does not bar a person from asserting a violation of this subchapter in an action to collect the debt which was brought more than one year from the date of the occurrence of the violation as a matter of defense by recoupment or set-off in such action----

(Emphasis added). These provisions make clear that a person can assert a claim under the Act only in an action for a money judgment either as a counterclaim to an action to collect money owed by the consumer, or in an original claim brought by the consumer. Therefore, a counterclaim for a set-off under the Act can only be asserted in an action which contemplates a personal judgment.

An action in mortgage foreclosure is strictly an in rem proceeding, and the purpose of a judgment in mortgage foreclosure is solely to effect a judicial sale of the mortgaged property. Meco Realty Co. v. Burns, 414 Pa. 495, 200 A.2d 869 (1964). A judgment in a mortgage foreclosure action is not a judgment for money damages and therefore cannot be “an action to collect amounts owed” or “an action to collect the debt” as required under § 1640(h) and (e) of the Truth-In-Lending Act. Therefore, a set-off for an alleged violation of the Truth-In-Lending Act cannot be asserted as a counter-claim in a mortgage foreclosure action.

Id. In view of the foregoing, appellant cannot assert her TILA defense in this action.

We reverse and remand for proceedings consistent with this opinion. Jurisdiction is relinquished.

CAVANAUGH, J., files a dissenting opinion.

CAVANAUGH, Judge,

dissenting:

I respectfully dissent.

I disagree with the majority’s holding that a mortgagee’s deviation from compliance with the forebearance provisions of the HUD Handbook and regulations may constitute an equitable defense to a foreclosure action. I believe this improperly expands the intended scope of the HUD regulations. I believe that the court’s intervention in this area is improper, absent clear mandates from the legislature, and in the long run could result in diminished sources of mortgage funds.

In and of themselves, the HUD regulations are neutral as to whether non-compliance is a legal defense to foreclosure actions. See, e.g., 24 C.F.R. 203.500. However, the regulations do say that “a pattern of refusal or failure to comply will be the cause for withdrawal of a mortgagee’s approval” as an FHA-insured mortgage lender. 24 C.F.R. 203.500. Thus, non-compliance with the HUD regulations may result in a sanction. However, that sanction is limited in two respects: 1) the sanction only concerns HUD’s relationship with the mortgagee and in no way addresses the mortgagee’s relationship or obligations with the mortgagors; and, (2) HUD may only raise the sanction where there is evidence of a pattern of refusal or outright failure to comply with its regulations. In other words, the sanction will not arise for a mere technical violation of some regulation.

I believe the majority errs in holding, without legislative or administrative mandate to do so, that these regulations are binding, with the force and effect of law, on the mortgagee vis a vis the mortgagor. This allows the individual mortgagor to rely on regulations which heretofore only HUD had the authority to apply. Further, the majority allows an equitable defense to arise where only a “deviation from compliance with the forebearance provisions of the HUD Handbook and regulations” is demonstrated. This goes far beyond Brown v. Lynn, 392 F.Supp. 559 (N.D.Ill. 1975), relied upon extensively by the majority, which limited use of the equitable defense to situations where “... mortgagees have flagrantly disregarded the forebearance provisions of the HUD Handbook.” Id., 392 F.Supp. at 562. Further, the majority’s reference to decisions from sister states is not entirely persuasive. While the Florida decision provides some authority, the New York case, Federal National Mortgage Association v. Ricks, 83 Misc.2d 814, 372 N.Y.S.2d 485 (1975), is not an appellate decision. The majority cites two New Jersey decisions. However, the latter New Jersey decision, Heritage Bank N.A. v. Ruh, 191 N.J. Super. 53, 465 A.2d 547 (1983), limited the earlier New Jersey decision, Associated East Mortgage Company v. Young, 163 N.J.Super. 315, 394 A.2d 899 (1978), to its facts which involved “[an] imprudent and callous lender” who approached the court with unclean hands given his “unconscionable” conduct in failing to follow the specific directions of the HUD Handbook. Id. at 333, 394 A.2d at 899. The court in Heritage, to the contrary, held that a mortgagor could not raise an equitable defense of a mortgagee’s failure to follow the HUD regulations and procedures unless the mortgagee’s conduct was “monstrously harsh” or “shocking to the conscience.” Heritage Bank N.A. v. Ruh, 191 N.J.Super. at 71, 72, 465 A.2d 547, 557 (1983). The Heritage court, in denying the defendant-mortgagor’s claim, stated:

Further, defendant materially contributed to her predicament by failing to make any overtures in the beginning to plaintiff concerning her four months delinquency; failing to contact plaintiff about the default for nearly a year, and failing to show any good faith effort to make any payment into an escrow account until prompted by the court. Defendant’s flagrantly acquiescent conduct does not induce the court to extend equitable relief to one to whom such culpable negligence can be attributed. The doctrine of clean hands has its logical justification only in consideration of good conscience and natural justice. There are cases in which a court of equity, fulfilling the reasons and objects for its existence may, in furtherance of a natural justice, aid one who is comparatively more innocent. (Citations omitted.)

Id. at 71-73, 465 A.2d at 557-558.

It is clear that the majority’s decision, which would require a trial where defendant could demonstrate a mere violation of the HUD regulations, goes well beyond the cases it cites as authority for its position.

I respectfully dissent and would affirm the lower court’s decision.

      . Appellant admits in paragraph 8 of her "Declaration” that she began missing mortgage payments in January of 1985. Explaining her default, appellant alleges, inter alia, that she became ill in November of 1984 and on doctor’s orders, could not work from that time until the summer of 1985, and that she paid over $1,000 in utility bills in January and February of 1985 so as not to lose her utility service. Declaration of Vergie Smith, paragraphs 7 and 8.

      . See also Hernandez v. Prudential Mortgage Corp., 553 F.2d 241 (1st Cir.1977); Roberts v. Cameron-Brown Co., 556 F.2d 356 (5th Cir.1977).

      . We note that an action of mortgage foreclosure is an action at law in Pennsylvania, see Pa.R.C.P. 1141. Equitable relief is available in an action at law where such relief can be granted consistently with principles of law. Std.Pa.Prac.2d § 79:4. Because the rights of the parties to an FHA-insured mortgage have not been clearly established in Pennsylvania, we believe the equitable relief discussed in this opinion can be granted consistently with principles of Pennsylvania law.

      . Appellant's "Declaration” states that at no time since the default began has her mortgage company offered to help her save her home from foreclosure. Declaration of Vergie Smith, paragraph 12.

      . We observe that the appellants in New York Guardian Mortgage asserted their right to set-off in a counterclaim, whereas the appellant in the instant case alleged her entitlement to set-off as a defense. This distinction, however, does not require that we depart from the rationale and holding of New York Guardian Mortgage. See 15 U.S.C. §§ 1640(h) and 1640(e), which both mention asserting a violation as a matter of defense.

      . We note that appellant also alleges on appeal that the trial court erred in entering summary judgment without determining the specific amount owing on the mortgage. In view of our decision to remand for further proceedings, we decline to address this question.


author: PER CURIAM:

text:
    530 A.2d 926
    Alice Margaret CHAPMAN v. Raymond GOODMAN, Ruth Goodman and Jennie Benton, Appellants.
    Superior Court of Pennsylvania.
    Argued May 21, 1987.
    Filed Sept. 3, 1987.
    Bridget A. Nawrocki, Bensalem, for appellants.

      Randal W. Hugo, Newton, for appellee.
    Before McEWEN, JOHNSON and HOFFMAN, JJ.
   PER CURIAM:

Appellants have undertaken this appeal from an order which (1) vacated a temporary custody order, and (2) awarded custody of John Charles Chapman, born March 7, 1985, to his natural father. We are constrained to reverse and remand.

The natural parents of the child, Bethann Louise Goodman and Charles J. Chapman, were involved in a serious automobile accident on October 20, 1985, when the child was seven months of age. Bethann Goodman, the mother, died as a result of her injuries, and Charles Chapman, the father, was seriously injured. The parties do not dispute that Bethann Louise Goodman and Charles J. Chapman were never married, but disagree as to the period of time in which they resided together.

It appears that shortly after the accident, a petition for appointment of a guardian for the minor child was filed in Blair County by appellant Raymond Goodman, the father of the deceased natural mother, and a complaint for custody was filed in Blair County by appellant Jennie Benton, the first cousin of the natural mother. Appellee, Alice Chapman, mother of the natural father, filed a petition in Bucks County for temporary custody of the minor child. Jurisdiction of all custody proceedings relating to John Chapman was, subsequently, by agreement of the parties, vested in the Court of Common Pleas of Bucks County and, by stipulation, appellant Jennie Benton was joined in the action for temporary custody instituted by appellee Alice Chapman.

A consent decree was entered, pursuant to an agreement of the parties, on December 12, 1985. The decree provided (1) that appellee, Alice Chapman, was to have temporary custody each week from 8:00 p.m. Sunday through 7:00 p.m. Friday, and (2) that appellants, Raymond Goodman and Jennie Benton, were to have temporary custody from 7:00 p.m. Friday through 8:00 p.m. Sunday. The decree further provided that transportation from Blair County to Bucks County (a five hour trip by automobile each way) would be the responsibility of appellants. The court also directed that home evaluations be undertaken and specified that the decree was entered without prejudice to the parties’ separate claims for custody of the child.

When, nine months thereafter, specifically on September 8, 1986, appellee, Alice Chapman, filed a petition to terminate the outstanding consent decree, the matter was scheduled for conference before the Permanent Custody Hearing Officer of Bucks County.

Appellants contend that, prior to the meeting, the Master agreed that appellants need not personally appear for the conference. No agreement was reached at the conference and the matter was scheduled for a hearing before the court on December 1, 1986. The record indicates that the hearing scheduled for December 1, 1986, was continued at the request of counsel for appellee, and that upon her motion of December 3, 1986, the court scheduled a hearing for Thursday, December 9, 1986. The record also contains a letter dated December 5, 1986, from counsel for appellants stating that since notice of the December 9, 1986 hearing had just been received by her that day, a continuance was necessary in order to enable her clients to arrange to travel to Bucks County. When the hearing commenced as scheduled on December 9, 1986, counsel for appellee informed the court that the child’s natural father was “on a cot in the waiting room right now ready to be wheeled in for the purpose of answering any questions that the court may wish to ask of him____” The record does not indicate whether appellee Alice Chapman was present in the courtroom at that time or waiting with her son in another room, but does indicate that counsel for appellants was present, though none of the appellants personally appeared.

The hearing court, without the presentation of any evidence, vacated the temporary custody order on the grounds that the recovery of the natural father precluded an award of custody to any other party. The court then “awarded” custody of the minor child to the natural father, who had not been made a party to the proceedings, without prejudice to the right of appellant, Raymond Goodman, to institute an action pursuant to the Custody and Grandparents Visitation Act, Act of November 5, 1981, P.L. 322, No. 115, 23 P.S. § 1001 et seq. This appeal timely followed the entry of that order.

Appellants contend that the court erred as a matter of law in (1) concluding that the only “party with rights in a custody proceeding was the natural father”, and (2) awarding custody to the natural father without the presentation of any evidence.

The cardinal concern in all custody proceedings is the best interest and permanent welfare of the child. Albright v. Commonwealth ex rel. Fetters, 491 Pa. 320, 323, 421 A.2d 157, 158 (1980). The scope of appellate review in custody cases is broad and proceeds through four stages:

1.) the procedural stage, where the appellate court determines whether the trial court has made a complete record and filed a comprehensive opinion; 2.) the factfinding stage, where the appellate court examines the trial court’s findings of fact to determine if they are supported by the record; 3.) the conclusion of law stage, where the appellate court determines whether the trial court has committed an error of law; and 4.) the inferences and deductions stage, where the appellate court reviews those inferences and deductions drawn from the facts as found by the trial court, but is not bound by them as it is bound by the trial court’s factual findings.

In Interest of James John M., 333 Pa.Super. 417, 421, 482 A.2d 637, 639 (1984). See also: In Re Donna W., 325 Pa.Super. 39, 51-55, 472 A.2d 635, 641-643 (1984).

The hearing court, by reason of its conclusion that the natural father was entitled to custody of the child, did not require the presentation of any evidence concerning the best interest of the child. There is, therefore, no evidence of record available for this Court to review.

Although the sole issue in any custody proceeding, whether between two parents or between a natural parent and a third party, is the best interest of the child, in a proceeding involving a parent and a third person, “the evidentiary scale is tipped, and tipped hard, to the parents’ side.” In Re Custody of Hernandez, 249 Pa.Super. 274, 286, 376 A.2d 648, 654 (1977). A parent’s right to custody will be forfeited only if convincing reasons appear that the child’s best interest will be served by an award to the third party. Ellerbe v. Hooks, 490 Pa. 363, 365, 416 A.2d 512, 513 (1980). Thus,

[w]hat the hearing court must do is hear all the evidence relevant to the child’s best interest, and then, decide whether the evidence on behalf of the third party is weighty enough to tip the scale down on the third party’s side.

In Interest of James John M., supra 333 Pa.Super. at 422, 482 A.2d at 640. Accord: Ellerbe v. Hooks, supra 490 Pa. at 367, 416 A.2d at 514; Fallaro v. Yeager, 364 Pa.Super. 408, 414-415, 528 A.2d 222, 225 (1987); Jones v. Stone, 343 Pa.Super. 416, 420, 495 A.2d 205, 208 (1985); Commonwealth ex rel. Miller v. Miller, 329 Pa.Super. 248, 253, 478 A.2d 451, 454 (1984); Commonwealth ex rel. Gorto v. Gorto, 298 Pa.Super. 509, 511, 444 A.2d 1299, 1300 (1982).

Due to the absence of any record evidence concerning the best interest of the child, we are constrained to vacate the order entered on December 9, 1986, and remand for proceedings consistent with the foregoing. Jurisdiction is relinquished.

      . It appears that the actions commenced in Blair County were not transferred to Bucks County but, rather, were continued due to the pendency of the Bucks County custody action.

      . Nor does the record contain the home evaluations ordered by the court.


author: WIEAND, Judge:

text:
    530 A.2d 929
    FEDERAL KEMPER INSURANCE COMPANY v. Thomas J. NEARY, Sr. and Dolores I. Neary, Admrs. of the Estate of Thomas J. Neary, Jr., Deceased; Paul R. Waite, Sr.; Brian Mangle and Norman Keefer v. ERIE INSURANCE EXCHANGE. Appeal of Norman KEEFER.
    Superior Court of Pennsylvania.
    Argued March 31, 1987.
    Filed Aug. 31, 1987.

      Charles E. Friedman, Harrisburg, for appellant.
    Clyde W. McIntyre, Harrisburg, for Erie Ins. Exchange, appellee.
    Before WIEAND, BECK and CERCONE, JJ.
   WIEAND, Judge:

The issue in this declaratory judgment action involves the interpretation of an omnibus clause contained within a policy of automobile insurance. The named insured under the policy had entrusted the insured auto to his stepson on the condition that the stepson not permit anyone else to operate the vehicle unless the stepson was incapable of driving and the other person possessed a driver’s license. The stepson allowed the car to be operated by a minor, unlicensed driver after the latter had fraudulently misrepresented his age and the fact that he held a valid learner’s permit to drive. The trial court held that under these circumstances the omnibus clause did not provide liability coverage for the unlicensed driver because he had not had the permission of the insured to drive the car. We affirm.

In 1981, Paul R. Waite, Sr. purchased a 1971 Opel automobile for use by his family. Waite immediately obtained insurance for the vehicle from Erie Insurance Exchange (Erie). Although Waite and his wife were the only named insureds in the policy, coverage was expanded according to the following omnibus provision:

Others We Protect
(2) Any person using ... an owned car we insure. This operation or other use must be with your permission____

Upon purchasing the auto, Waite established certain guidelines to be followed by his children when they used the car. Specifically, he forbade them from allowing anyone else to operate the vehicle unless (1) they were unable to drive; (2) the other person was licensed; and (3) that person was accompanied by one of the children.

On August 26, 1981, Waite’s stepson, Brian Mangle, was given permission to use the car. Mangle drove to the home of his friend, Thomas J. Neary, Jr. With Mangle at the wheel, the two young men travelled to the residence of Neary’s girlfriend. During the return trip, Neary requested that Mangle allow him to drive. Mangle acceded to this request after being assured by Neary that he (Neary) was then sixteen years of age and had a valid learner’s permit to drive. In fact, Neary was only fifteen years old and had neither a license nor a learner’s permit. Shortly after Neary took the wheel, the Opel collided with a vehicle owned and operated by Norman Keefer. Neary was killed in the collision.

At the time of the accident, Neary’s father, Thomas J. Neary, Sr., was insured under a policy of insurance which had been issued by Federal Kemper Insurance Company (Federal Kemper). Federal Kemper commenced a declaratory judgment action to determine whether it was obligated to defend Neary’s estate in any action which might be brought against it as a result of the accident. Named as defendants in the declaratory judgment action were Mr. and Mrs. Neary, administrators of their son’s estate; Paul Waite; his stepson, Brian Mangle; and Norman Keefer. Keefer subsequently caused Erie to be joined as an additional defendant, alleging that Neary had been covered under the omnibus provision of the policy issued by Erie to Waite. On January 16, 1985, following a non-jury trial, the trial court entered judgment on behalf of Federal Kemper, finding that Federal Kemper had “no obligation to indemnify or defend the estate of Thomas J. Neary, Jr. with respect to the claims of Paul R. Waite, Sr. and Norman E. Keefer arising out of the automobile accident of August 26, 1981, or to pay any judgments arising out of said claims.” No appeal was taken from this judgment. Because the trial court had failed to make a determination with respect to the rights and responsibilities of the additional defendant, Erie, Keefer filed a motion to reconsider in which he requested the court to decide whether Erie was required to defend Neary’s estate. Following argument, the trial court entered a further judgment that Erie was under “no obligation to indemnify or defend the estate of Thomas J. Neary, Jr. with respect to the claims of any other party hereto arising out of the automobile accident of August 26, 1981, or to pay any judgments arising out of said claims.” The court reasoned that Neary was not covered by the terms of the policy issued by Erie to Waite because the minor Neary had not received express or implied permission from Waite to operate the vehicle at the time of the accident. Keefer filed a motion for post-trial relief which the trial court denied. Keefer then appealed.

In reviewing a judgment entered in a declaratory judgment action, we are bound by the same narrow standard of review which exists in equity actions. Shaffer v. Flick, 360 Pa.Super. 192, 195-196, 520 A.2d 50, 51 (1987); Supp v. Erie Insurance Exchange, 330 Pa.Super. 542, 544, 479 A.2d 1037, 1038 (1984). A judgment of a trial court will not be reversed absent a clear abuse of discretion or error of law. Lombardo v. DeMarco, 350 Pa.Super. 490, 495, 504 A.2d 1256, 1258 (1985). The test is not whether we would have reached the same result on the evidence presented, but whether the trial court’s conclusion can reasonably be drawn from the evidence. Estate of Tippins, 487 Pa. 107, 112 n. 2, 408 A.2d 1377, 1380 n. 2 (1979); Lombardo v. DeMarco, supra, 350 Pa.Super. at 495, 504 A.2d at 1258; Hoffman v. Gekoski, 250 Pa.Super. 49, 52, 378 A.2d 447, 448 (1977). Where the trial court’s factual determinations are adequately supported by the evidence, we may not substitute our judgment for that of the trial court. Frowen v. Blank, 493 Pa. 137, 142, 425 A.2d 412, 415 (1981).

Under an omnibus clause of an automobile insurance policy which designates as insured any person using the insured vehicle with the permission of the owner, the permission necessary to elevate the user to the status of an additional insured may be express or implied. Brower v. Employers’ Liability Assurance Co., Ltd., 318 Pa. 440, 444, 177 A. 826, 828 (1935); Esmond v. Liscio, 209 Pa.Super. 200, 206, 224 A.2d 793, 796 (1966); Conrad v. Duffin, 158 Pa.Super. 305, 309, 44 A.2d 770, 772 (1945). See: Belas v. Melanovich, 247 Pa.Super. 313, 372 A.2d 478 (1977). See also: Blashfield, Automobile Law and Practice § 315.10, at 605 (3d ed. 1966). See generally: Annot., Omnibus Clause as Extending Automobile Liability Coverage to Third Person Using Car with Consent of Permittee of Named Insured, 21 A.L.R. 4th 1146 (1983). Implied permission may arise from the relationship of the parties or by virtue of a course of conduct in which the parties have mutually acquiesced. Brower v. Employers' Liability Assumed Co., Ltd., supra, 318 Pa. at 444, 177 A. at 828; Esmond v. Liscio, supra, 209 Pa.Super. at 206, 224 A.2d at 796; Conrad v. Duffin, supra, 158 Pa.Super. at 309, 44 A.2d at 772. See: Blashfield, supra § 315.10, at 607. “However, ‘permission’ requires something more than mere sufferance or tolerance without taking steps to prevent the use of the automobile, and permission cannot be implied from possession and use of the automobile without the knowledge of the named insured.” Id. § 315.10, at 608. “[T]he critical question will always be whether the named insured said or did something that warranted the belief that the ensuing use was with his consent. There must be ‘a connection made’ with the named insured’s own conduct; proof of ‘acts, circumstances, and facts, such as the continued use of the car,’ will be insufficient ‘unless they attach themselves in some way to the acts’ of the named insured.” Belas v. Melanovich, supra, 247 Pa.Super. at 324, 372 A.2d at 484, quoting Beatty v. Hoff, 382 Pa. 173, 177, 114 A.2d 173, 174 (1955). See: Crespy v. Bliesmer, 248 Pa.Super. 441, 445, 375 A.2d 179, 181 (1977); Helwig v. Esterly, 205 Pa.Super. 185, 189, 208 A.2d 10, 12 (1965).

Keefer concedes on appeal that the evidence supported the trial court’s finding that the Neary boy had not had the owner’s express permission to drive or operate the vehicle. He argues, however, that inasmuch as Waite had not prohibited persons outside his family from riding in the vehicle as passengers, Neary had at least implied permission to “use” the vehicle. Because Neary had implied permission to “use” the vehicle as an occupant, the argument concludes, Neary was covered by the terms of the policy and Erie should be required to defend his estate in any action arising out of the fatal accident.

A similar argument was rejected by this Court in Helwig v. Esterly, supra. There, Joanne Esterly had been involved in a motor vehicle accident while driving a vehicle owned by William and Mary Heffelfinger. Esterly had been given permission to operate the vehicle by Karl Heffelfinger, the son of the owners, who had been given permission to use the car by his parents and who had been riding as a passenger at the time of the accident. The right of Karl Heffelfinger to use the car, however, had been subject to the restriction that he not allow any other person to operate the vehicle, including, specifically, Esterly, who held only a learner’s permit. After obtaining a recovery against Esterly, Helwig issued attachment execution proceedings against State Farm Mutual Automobile Insurance Company, which had written the policy providing coverage for the Heffelfinger vehicle. That policy contained an omnibus provision which extended coverage to “any person while using the [insured] automobile ..., provided the actual use is by the named insured or such spouse or with the permission of either.” The trial court instructed the jury, in effect, that it was immaterial who had been operating the Heffelfinger car at the time of the accident so long as the vehicle was being used for a purpose which was within the contemplation of the owner at the time when he granted to his son the privilege of using the car. If the vehicle were being used for such a purpose, the court instructed, State Farm would be obligated to provide coverage. The jury returned a verdict in favor of Helwig. On appeal, State Farm argued that the trial court’s instructions had been erroneous. In light of the Heffelfingers’ specific directive that Esterly not be allowed to operate the car, it was argued, it was error to permit the jury to conclude that Esterly’s “use” of the vehicle had been permitted implicitly. This Court agreed and reversed. We specifically rejected Helwig’s contention “that the permission to Karl to use the car brought [Esterly] within that class [of individuals impliedly permitted to use the auto].” We said, “[i]t would be unreasonable to hold that Karl was privileged to disregard the explicit instruction of his father as to the manner in which he was to use his father’s car.” Id., 205 Pa.Superior Ct. at 190, 208 A.2d at 12. Once Karl turned the steering wheel of the car over to Esterly in violation of and contrary to the express instruction given by his father, we concluded, Karl’s privilege to use the vehicle was terminated, and Esterly could not thereafter acquire implied permission to operate the vehicle. Id. Consequently, Esterly was operating the car without permission of the named insured and was not covered by the policy which had been issued by State Farm to the Heffelfingers. Id. On retrial, we said, the jury should be instructed that if “[the Heffelfingers’] restriction existed and [if] it was intended not to be violated, the violation would be a material deviation from the permitted use, which would prevent a recovery against State Farm, the insurer.” Id., 205 Pa.Superior Ct. at 190-191, 208 A.2d at 12.

The instant case is similar to Helwig in that it, too, involves an omnibus policy provision which extended coverage to persons using the insured vehicle with permission of the named insured. In the case sub judice, Brian Mangle had been given permission by his stepfather, Paul Waite, to use the automobile insured by Erie. However, Waite had specifically instructed Mangle not to permit anyone else to operate the vehicle unless that person were licensed to drive and then only if Mangle were present in the vehicle and unable to drive. Mangle violated this restriction when he permitted the car to be operated by an unlicensed driver. As in Helwig, there was no evidence in the instant case that the named insured had said or done anything to warrant the belief that the ensuing use by the unlicensed driver was with his consent. On the contrary, Waite’s instructions to his stepson were clear that, except in exigent circumstances, the vehicle was not to be operated by persons outside his family, and in no event was it to be operated by an unlicensed driver. As Helwig suggests, it would be unreasonable to conclude that because Neary was entitled to occupy the insured vehicle as a passenger, he was impliedly allowed to operate the auto, even though the owner thereof had specifically prohibited operation of the car by individuals such as Neary who were not licensed to drive. We perceive neither error nor abuse of discretion in the trial court’s finding that Neary did not have implied permission to operate the vehicle on the day of the accident. Therefore, its resultant determination that Neary was not within the coverage provided by the Erie policy was also correct.

The trial court’s determination is no less valid because, at the time Mangle permitted Neary to assume control of the insured automobile, he believed that Neary possessed a valid learner’s permit. Where permission to use an insured automobile is obtained through fraud or deception, it is. void; and the one obtaining use of the vehicle in such manner may not claim the benefit of coverage under the omnibus provision of an automobile insurance contract. See: Lusk v. Traveler’s Insurance Co., 250 So.2d 197 (La.App.1971) (no coverage where student obtained permission to use teacher’s automobile by misrepresenting fact that she possessed a driver’s license); Hodge v. Lumbermen’s Mutual Casualty Co., 203 Va. 275, 123 S.E.2d 372 (1962) (fugitive from justice who misrepresented his identity to procure permission from car salesman to use one of dealer’s vehicles was not covered under omnibus provision of dealer’s insurance policy). See also: Blashfield, supra § 315:8, at 597; 7 Am.Jur.2d Automobile Insurance § 251, at 824 (1980). Instantly, Neary acquired permission to operate the 1971 Opel by misrepresenting to Mangle his age and the fact that he held a valid learner’s permit. Thus, even if it could be concluded that Neary had implied permission to use the vehicle, that permission would have been vitiated by the fraudulent manner in which it was procured.

Under the circumstances of this case, the trial court correctly concluded that Neary was not covered under the policy of automobile insurance which had been issued by Erie. Therefore,- Erie was not obligated to indemnify or defend the estate of Thomas Neary, Jr. with respect to any claim, including that of Keefer, arising out of the automobile accident of August 26, 1981.

Judgment affirmed.

BECK, J., concurs in the result.

      . Although judgment was not entered against Keefer, his interest in the outcome of the within matter is sufficient to accord him standing to pursue the instant appeal. See: Donegal Mutual Insurance Co. v. Eyler, 360 Pa.Super. 89, 519 A.2d 1005 (1987).


author: OLSZEWSKI, Judge:

text:
    530 A.2d 933
    COMMONWEALTH of Pennsylvania, Appellee, v. George WARING, Appellant.
    Superior Court of Pennsylvania.
    Submitted April 27, 1987.
    Filed Sept. 10, 1987.
    Abraham Leizerowski, Philadelphia, for appellant.

      Jane C. Greenspan, Assistant District Attorney, Philadelphia, for Com., appellee.
    Before WIEAND, OLSZEWSKI and HOFFMAN, JJ.
   OLSZEWSKI, Judge:

This is an appeal from the trial court’s order denying appellant’s petition for relief under the Post Conviction Hearing Act (PCHA). Appellant argues in this appeal that his trial counsel was ineffective by failing to file a timely direct appeal to this Court. For the reasons stated below, the trial court order is vacated and the case remanded for an evidentiary hearing.

Appellant pleaded guilty to conspiracy, burglary, and robbery. On February 14, 1983, the trial court sentenced appellant to ten to twenty years on the burglary charge, ten to twenty years on the robbery charge, and five to ten years on the conspiracy charge. The robbery and conspiracy sentences were to be served concurrently with appellant’s burglary sentence. Appellant filed a petition for reconsideration of sentence which the trial court subsequently denied. Appellant did not file a motion to withdraw his guilty plea. On April 25, 1983, appellant filed an appeal to this Court which was quashed as untimely. Subsequently, appellant filed a PCHA petition which the trial court denied without a hearing. This timely appeal followed.

Appellant argues that his trial counsel was ineffective for failing to file a timely direct appeal from his judgment of sentence. In Commonwealth v. Dockins, 324 Pa.Super. 305, 471 A.2d 851 (1984), this Court stated:

Under most circumstances, counsel cannot be deemed ineffective for failing to raise an issue unless the issue is meritorious. Nevertheless, it is trial counsel’s duty to perfect a defendant’s appeal once requested to do so, even if counsel believes that appellant’s appeal would be without merit. Commonwealth, v. Cooley, 298 Pa.Super. 163, 444 A.2d 711 (1982).

Id., 324 Pa.Superior Ct. at 310-11, 471 A.2d at 854 (emphasis in original) (footnote added). In Commonwealth v. Berthesi, 350 Pa.Super. 383, 504 A.2d 891 (1986), this Court further explained that:

It is axiomatic that in our scheme of justice an accused has the right to appeal his sentence [an accused has an absolute right to appeal pursuant to the Pennsylvania Constitution, Art. V, Sec. 9] and to the assistance of appointed counsel, if indigent, in doing so, Douglas v. California, 372 U.S. 353, 83 S.Ct. 814, 9 L.Ed.2d 811 (1963). Concomitantly, the accused has the ability to “waive” his right to counsel and to an appeal. As our Supreme Court capsulized in Commonwealth v. Norman, 447 Pa. 217, 285 A.2d 523 (1971):
In determining whether a defendant has waived a constitutional right it is well settled that the federal standards of waiver first enunciated in Johnson v. Zerbst, 304 U.S. 458, 58 S.Ct. 1019, 82 L.Ed. 1461 (1938) apply. Brookhart v. Janis, 384 U.S. 1, 86 S.Ct. 1245, 16 L.Ed.2d 314 (1966). The waiver of a constitutional right must be “an intentional relinquishment or abandonment of a known right or privilege.” 304 U.S. at 464, 58 S.Ct. at 1023. The presumption must always be against the waiver of a constitutional right. Glasser v. United States, 315 U.S. 60, 70-71, 62 S.Ct. 457, 463-465, 86 L.Ed. 680 (1942). Nor can waiver be presumed in a silent record case. The United States Supreme Court explicitly ruled in Carnley v. Cochran, 369 U.S. 506, 82 S.Ct. 884, 8 L.Ed.2d 70 (1962):
“Presuming waiver from a silent record is impermissible. The record must show, or there must be an allegation and evidence which show, that an accused was offered counsel but intelligently and understandingly rejected the offer. Anything less is not waiver.” (Emphasis added).
Id. at 516, 82 S.Ct. at 890. Thus this Court is constitutionally bound to place the burden of proving waiver on the Commonwealth. Whether defendant was represented by private or court-appointed counsel, or whether his trial took place before or after the Douglas decision, are distinctions with no legal significance. Commonwealth v. Ezell, [431 Pa. 101, 244 A.2d 646 (1968) ]; Commonwealth ex rel Stevens v. Myers, [419 Pa. 1, 213 A.2d 613 (1965) ].
477 Pa. at 221-222, 285 A.2d at 526____ Furthermore, the Commonwealth’s burden of proving waiver of one’s appellate rights by a preponderance of the evidence, in silent record cases, has been settled law in this jurisdiction since 1968. Commonwealth v. Wilson, 430 Pa. 1, 241 A.2d 760 (1968).

Id., 350 Pa.Superior Ct. at 387-388, 504 A.2d at 893-894.

In the instant case, we have no notes of testimony to review on the issue of trial counsel’s failure to perfect appellant’s appeal since an evidentiary hearing was not held by the PCHA court. We, consequently, cannot determine whether appellant intentionally and knowingly waived his right to pursue an appeal. Normally, we would find that the Commonwealth has failed to meet its burden of proof and remand for the filing of an appeal nunc pro tunc: In the present case, however, the PCHA court did not permit any testimony on the merits of appellant’s ineffectiveness claim. We, accordingly, must remand to the PCHA court to allow the Commonwealth an opportunity to introduce evidence that appellant intentionally and knowingly waived his right to pursue an appeal. “We emphasize that the burden of proof on this issue rests on the Commonwealth.” Commonwealth v. Norman, 447 Pa. 217, 222-223, 285 A.2d 523, 526 (1971). See Commonwealth v. Johnson, 339 Pa.Super. 296, 488 A.2d 1132 (1985).

Order vacated and case remanded for an evidentiary hearing. Should the PCHA court determine that appellant has not waived his appellate rights, the proper remedy is the grant of an appeal nunc pro tunc: See Commonwealth v. May, 296 Pa.Super. 435, 442 A.2d 1129 (1982) (en banc); Commonwealth v. Miranda, 296 Pa.Super. 441, 442 A.2d 1133 (1982) (en banc). Jurisdiction is relinquished.

      . 42 Pa.C.S.A. § 9541 et seq.

        . In addition, appellant argues that his trial counsel was ineffective by failing to call witnesses during the sentencing proceeding. Because of our disposition of this appeal, see our discussion infra, we need not address this issue. If the PCHA court, upon remand of this case, finds that an appeal nunc pro tunc is appropriate, appellant may then bring this issue to the court’s attention.

      . Where counsel believes that an appeal would be wholly frivolous, counsel must, at a minimum, seek to withdraw by petitioning the court and filing an Anders (Anders v. California, 386 U.S. 738, 87 S.Ct. 1396, 18 L.Ed.2d 493 (1967), reh. denied, 388 U.S. 924, 87 S.Ct. 2094, 18 L.Ed.2d 1377) brief setting forth claims of "arguable merit." See Commonwealth v. Lohr, 503 Pa. 130, 468 A.2d 1375 (1983).

      . The only reference in the record as to whether appellant wanted to pursue an appeal occurred as the result of the Commonwealth’s "Motion for Further Specificity of Appellant’s Amended PCHA Petition." The trial court’s "Order for Further Specificity in Amended Post Conviction Hearing Act Petitions” required appellant to answer the following question: "Did petitioner ask his attorney to file an appeal?" In his “Amended Petition Under Post Conviction Hearing Act," appellant’s answer to this question was simply "Yes." We find that this response alone is insufficient to allow us to determine whether appellant intentionally and knowingly waived his right to pursue an appeal.

      . We recognize that a plea of guilty constitutes a waiver of all defects and defenses except those concerning the jurisdiction of the trial court, the legality of the sentence, and the validity of the plea. See Commonwealth v. Moyer, 497 Pa. 643, 444 A.2d 101 (1982). Furthermore, only those issues raised in a motion challenging the plea can be considered on appeal. See Commonwealth v. Smith, 322 Pa.Super. 504, 469 A.2d 1104 (1983). Since appellant failed to file a motion to withdraw his guilty plea, appellant cannot challenge his plea. On appeal, appellant may, however, seek to withdraw his plea, see Commonwealth v. Faust, 324 Pa.Super. 492, 471 A.2d 1263 (1984) or attack his plea on the basis that trial counsel’s ineffectiveness contributed to the plea. See Commonwealth v. Weiss, 289 Pa.Super. 1, 432 A.2d 1020 (1981). Additionally, appellant, on appeal, may challenge the trial court’s jurisdiction or the legality of his sentence.