author: PER CURIAM:

text:
    549 A.2d 1304
    Lester NEIL and Arlene Neil, his Wife, Appellants, v. ALLSTATE INSURANCE COMPANY.
    Superior Court of Pennsylvania.
    Argued Sept. 1, 1988.
    Filed Nov. 2, 1988.
    Petition for Allowance of Appeal Denied April 17,1989.

      John C. Carlin, Jr., Pittsburgh, for appellants.
    David J. Obermeier, Pittsburgh, for appellee.
    Before CIRILLO, President Judge, and TAMILIA and CERCONE, JJ.
   PER CURIAM:

The issue in this appeal is whether the “family exclusion” clause in appellants’ homeowners’ insurance policy is valid with the result that appellants will be without insurance coverage for the jury-determined liability of appellant/mother for injuries sustained by her minor son.

Appellants’ son, Adam Neil, was permanently injured when he was struck near his home by an automobile driven by Conrad Guenzel. Appellants brought a civil action against Guenzel for Adam’s injuries, and Guenzel subsequently joined appellants as additional defendants on the grounds of negligent supervision of Adam. After they were joined in the action against Guenzel, the Neils requested that appellee, Allstate, represent them, by counsel, in the civil action and provide coverage for any liability which they might incur as a result of their joinder in the negligence action as additional defendants. Allstate informed the Neils that the terms of their homeowners’ policy excluded Adam from coverage, and therefore, they would provide no defense in the civil action. Specifically, Allstate cited the following provision which is the subject of this appeal:

We [Allstate] do not cover bodily injury to an insured person____
The definition of “insured person” under the policy was: “Insured Person” — means you [policyholder] and, if a resident of your household, any relative and any dependent person in your care.

After Allstate refused to defend them, appellants brought the instant action for declaratory judgment. In their complaint, appellants sought to have the “family exclusion” clause of their policy, upon which Allstate had relied in refusing coverage and a defense, declared invalid and void as against public policy. Appellee sought, by motion, an order of summary judgment, citing the terms of the policy. On December 18, 1987, appellee’s motion for summary judgment was granted, and appellants then filed the instant timely appeal.

Meanwhile, the lawsuit against Guenzel for Adam’s injuries proceeded. The jury in that case returned a verdict of $250,000 in Adam’s favor, which was apportioned as follows: twenty-five percent attributable to Conrad Guenzel, forty percent attributable to Arlene Neil, thirty-five percent attributable to Thomas and Susan Lordi, and zero percent attributable to the Borough of Monroeville. As a result of this apportionment of negligence, appellant Arlene Neil is liable for her son’s injuries in the amount of $100,000.

Since this case comes to us on the granting of a motion for summary judgment, we will first look to the standards under which such relief is granted. Summary judgment should not be entered unless the case is free from doubt. Weiss v. Keystone Mack Sales, Inc., 310 Pa.Super. 425, 456 A.2d 1009 (1983). The relief should be granted if the pleadings, depositions, answers to interrogatories and admissions on file, together with affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Pa.R.C.P., Rule 1035, 42 Pa.C.S.A.; Hower v. Whitmak Associates, 371 Pa.Super. 443, 538 A.2d 524 (1988). On review, the record must be examined in a light most favorable to the non-moving party, and in doing so all well-pleaded facts in the non-moving party’s pleadings are accepted as true and that party is given the benefit of all reasonable inferences to be drawn therefrom. Spain v. Vicente, 315 Pa.Super. 135, 461 A.2d 833 (1983).

It has also recently been established that summary judgment is available in a declaratory judgment action. Darlark v. Henry S. Lehr, Inc., 360 Pa.Super. 509, 520 A.2d 1206 (1987). In addition, we have held that an inquiry into whether a particular loss is within the coverage of an insurance policy is a question of law, which may be decided on a motion for summary judgment. Creed v. Allstate Insurance Co., 365 Pa.Super. 136, 529 A.2d 10 (1987), allocatur denied 517 Pa. 616, 538 A.2d 499 (1988).

With these principles in mind, we turn to an examination of appellants’ contentions on appeal. Appellants argue that the family exclusion clause contained in their policy of homeowners’ insurance is against the public policy of this Commonwealth and should be declared void. They submit that judicial abolition of the doctrines of parental immunity and interspousal immunity from tort liability requires such a declaration. See Falco v. Pados, 444 Pa. 372, 282 A.2d 351 (1971) (abolition of parental immunity); Hack v. Hack, 495 Pa. 300, 433 A.2d 859 (1981) (abolition of interspousal immunity). Appellants contend that the judicial and social policy of this Commonwealth is one of compensation to injured family members, and that when insurance companies insert family exclusion clauses into their policies, they are interfering with this policy, and the clauses should be declared void. We cannot agree.

In Mamlin v. Genoe, 340 Pa. 320, 17 A.2d 407 (1941), our Supreme Court set forth the standard under which public policy arguments in favor of voiding an insurance clause will be examined:

“It is only when a given policy is so obviously for or against the public health, safety, morals or welfare that there is a virtual unanimity of opinion in regard to it, that a court may constitute itself the voice of the community in [declaring that policy to be against public policy].”

Id., 340 Pa. at 325, 17 A.2d at 409, cited in Guardian Life Insurance Co. v. Zerance, 505 A.2d 345, 354, 479 A.2d 949, 954 (1984).

Generally, the courts will look to two sources to ascertain public policy in a given area: legislative mandate and judicial precedent. Guardian Life Insurance Company v. Zerance, 505 Pa. 345, 479 A.2d 949 (1984) (“Public policy is to be ascertained by reference to the laws and legal precedents and not from general considerations of supposed public interest”). In addition, when scrutinizing an insurance policy’s provisions, the general and well-established rule is that where the language of an insurance policy is unambiguous, a court cannot adopt a construction which conflicts with the clear meaning of that language. Guardian Life Insurance Co. v. Zerance, supra; Ditch v. Yorktowne Mutual Insurance Co., 343 Pa.Super. 22, 493 A.2d 782 (1985); U.S. Fidelity and Guaranty v. Griggs, 341 Pa.Super. 286, 491 A.2d 267 (1985).

In State Farm Mutual Automobile Insurance Co. v. Williams, 481 Pa. 130, 392 A.2d 281 (1978), cited by appellants, our Supreme Court voided an exclusionary provision in an insurance policy because the clause conflicted with the policy of this Commonwealth as set forth by the legislature in the Uninsured Motorists Act, 40 P.S. § 2000. The plaintiff in Williams was involved in an automobile accident with an uninsured motorist. At the time, he was driving his wife’s automobile which was insured by State Farm under a policy containing the legislatively mandated uninsured motorist provisions. Plaintiff also had insurance coverage from State Farm on his own automobile. This policy contained the mandated uninsured motorist provisions.

State Farm paid the plaintiff the $10,000 coverage limits under his wife’s policy, but although plaintiff’s injuries apparently exceeded $10,000, the company refused to make any payments under plaintiff’s own policy. Plaintiff then requested arbitration, and the arbitrator denied coverage on the basis of a policy provision which prohibited all recovery by plaintiff under his policy if the injury was sustained while he occupied another motor vehicle owned by a resident of the same household, and which was not an insured vehicle under his own policy. The Superior Court affirmed.

On appeal, the Pennsylvania Supreme Court reversed, on the basis that the exclusionary provision of the insurance policy conflicted with the provisions of 40 P.S. § 2000, which requires insurance protection to be provided for bodily injury or death to insured persons who are legally entitled to recover damages from the owners or operators of uninsured motor vehicles. The court reasoned that the exclusionary provision of the State Farm policy was unenforceable because it permitted a diminution of the protection afforded by the statute below the statutory limits. Williams, supra, 481 Pa. at 139-40, 392 A.2d at 285-87.

The instant case is not analogous. Unlike the area of automobile insurance, which is legislatively regulated, there is no legislative enactment in Pennsylvania governing or requiring that insurance companies provide a specified level of insurance coverage to homeowners. Thus, although we do not deny our power to hold unenforceable an insurance policy provision as did the court in Williams, appellants have not cited and we know of no legislative enactment in the field of homeowners’ insurance which would require voiding the family exclusion provision herein on the grounds that it violates public policy.

Nor have we found in judicial precedent a firm public policy to void family exclusion provisions. In fact, our appellate decisions have upheld such clauses. See Puller v. Puller, 380 Pa. 219, 110 A.2d 175 (1955) (family exclusion provision upheld in suit by tort-feasor against joint tort-feasor, insured under the policy; insurance company not required to pay for injuries incurred by insured’s wife and daughter); Great American Insurance Co. v. State Farm Mutual Automobile Insurance Co., 412 Pa. 538, 194 A.2d 903 (1963) (policy provision excluding residents of the named insured’s household upheld, precluding recovery by the named insured’s son for injuries sustained while a passenger in the insured automobile). Even in cases decided subsequent to Falco and Hack, which abolished parental and interspousal immunity, family exclusion provisions have been upheld.

In Paiano v. Home Insurance Co., 253 Pa.Super. 519, 385 A.2d 460 (1978), decided seven years after Falco, this court upheld the insurance company’s denial of coverage and a defense to the wife of the insured who had been found by a jury to be a joint tort-feasor in the accident resulting in injuries to her son. In denying coverage, the insurance company relied upon a provision in the policy which excluded residents of the same household of the insured from general liability coverage under the policy. The appellant in Paiano argued that the family exclusion provision was “unconscionable” on the basis that family members often accompany one another in motor vehicles, and that the insured reasonably assumes his liability insurance will cover them. The court rejected this argument, citing case law upholding the validity of the family exclusion. Although the issue of the abolition of the parental immunity doctrine was not discussed by the court, the case does stand for the proposition that family exclusion clauses have been upheld despite the absence of parental immunity since Falco.

Similarly, in Groff v. State Farm Fire & Casualty Co., 646 F.Supp. 973 (E.D.Pa.1986), decided after both Falco and Hack and in which Pennsylvania law was applied, a family exclusion provision was upheld. In Groff, a case factually similar to the case sub judice, plaintiffs were the parents of a child who had lost an eye in a bow-and-arrow accident involving another child. The Groff plaintiffs sued the other child’s parents (and the owners of the premises upon which the accident occurred) in the state court, whereupon the defendants joined the plaintiffs as additional defendants in that action, alleging negligent supervision. The case came up for disposition in Federal District Court on cross motions for summary judgment, with plaintiffs alleging that the homeowners insurance policy issued to them by State Farm (defendant in the federal court action) obligated the insurance company to provide them a defense in the state court action. The court rejected plaintiffs’ argument, stating:

Under the terms of the policy, State Farm is required to provide a defense against claims within, or arguably within, the liability coverages of the policy. But the terms of the standard “household exclusion” contained in the plaintiff’s policy unmistakably exclude from coverage claims for bodily injury sustained by an “insured” as defined in the policy; and plaintiffs’ minor son is plainly an “insured” within that definition, since he is a “relative” and resides in the same household as the named insureds. Thus, the policy unambiguously excludes coverage, and the defendant is not required to defend the state court action.
Counsel for plaintiff argues that this is a case of first impression, and that even if the policy unambiguously excludes coverage, the exclusion is contrary to public policy and should not be given effect. I find these arguments puzzling: see, e.g., Paiano v. Home Insurance Co., 253 Pa.Super. 519, 385 A.2d 460 (1978) and the many cases there cited. As the courts in all of those cases recognized, private parties are generally free to decide what insurance coverage they want and will pay for, and insurance companies are free to decide what risks to undertake and what risks to reject. I am unaware of any public policy interests which would be served by mandating insurance of parents against personal injury claims brought by their minor children.

The court in Groff granted State Farm’s motion for summary judgment, holding that “the clear language of the policy and the state of the decisional law of Pennsylvania” required such an outcome.

In addition, Hack itself noted with approval the existence and validity of family exclusion clauses. In analyzing the continuing validity of the doctrine of interspousal immunity in tort, the Hack court noted that one of the justifications for the doctrine had been the concept of prevention of collusive suits between spouses. The court rejected the possibility of collusion as a persuasive reason for continued adherence to the immunity doctrine. Instead, it noted that “[t]he laws of contract and evidence are ample protection against any danger of fraud or collusion,” and cited for this proposition the Puller and Great American Insurance Co. cases, supra, in which family exclusion provisions had been explicitly upheld. Thus, one of the Hack court’s reasons for abrogating the interspousal immunity doctrine was the existence and validity of family exclusion clauses in insuranee policies which prevent the possibility of collusive suits. Appellants’ argument for invalidating the family exclusion provision on the basis of Hack’s (and Falco’s) abandonment of the tort immunity doctrines thus flies in the face of the express reasoning of our highest court.

We also note, as appellee has contended, that other states in which the tort immunity doctrines have been rejected have not taken the additional step of declaring invalid the family exclusion clause in homeowners’ policies. For example, in State Farm Fire & Casualty Co. v. Clendening, 150 Cal.App.3d 40, 197 Cal.Rptr. 377 (4th Dist.1983), the California Court of Appeal addressed many of the same arguments concerning the validity of family exclusions as appellants here have set forth. The case involved a homeowners’ insurance policy which State Farm had issued to the appellants, who were husband and wife, living together. In a separate action, the wife had sued the husband for injuries she sustained as a result of his tortious acts. State Farm then filed an action for declaratory relief, citing the family exclusion provision of the homeowners’ policy. A judgment was rendered in favor of State Farm, and the Clendenings appealed. Their argument on appeal was that the exclusionary clause was unenforceable because it was not clear and conspicuous, was against public policy, and was invalid unless specifically authorized by the legislature.

The court rejected each of these arguments. They held that the exclusions in the policy were “plain in their position, labeling and capitalization” and that the language of the exclusion was clear and unambiguous. With regard to appellants’ public policy argument, the court held there was “no authority either in court decision or legislative enactment” to suggest that the exclusion was against public policy. The issue of intra-family torts was also addressed:

Appellants stress that the family exclusion clause is contrary to public policy since it may prevent a family member from collecting damages for injuries inflicted by another family member. The practice of excluding family members from coverage allegedly thwarts the express policy against immunity for intra-family torts, (citation omitted).
However, the implementation of the exclusionary clause does not deprive Juanita Clendening of her lawsuit since she may still sue her husband and recover from available assets. The insurance carrier need not insure risks arising from intra-family torts unless it chooses to do so. Where, as here, the exclusionary clause is clear, plain and unambiguous and there is no statutory prohibition, there is no public policy reason to prohibit insurance contracts such as these, (citation omitted).

150 Cal.App. at 43, 197 Cal.Rptr. at 378.

The court in Clendening also rejected appellants’ contention that the family exclusion clause was invalid unless the Legislature authorized it. Appellants had argued that the legislature had specifically authorized family exclusion clauses in fire and automobile insurance policies, which had been codified in the California Insurance Code. However, the Clendening court held that

[t]he absence of such a statute in the area of homeowners insurance is not authority for the claim made here. “The right of a company to limit its contract of coverage may not be questioned ..., provided the limitation is not prohibited by public policy or statute.” (citation omitted).

In Allstate Insurance Co. v. Elwell, 513 A.2d 269, 273 (Me.1986), the ex-wife of the insured sought to have the family exclusion provision of an automobile insurance policy declared void on public policy grounds so as to require her former husband’s insurance to indemnify her for injuries. The Maine Supreme Judicial Court rejected appellant’s public policy argument on two grounds: 1) that the provision did not violate the public policy of the state as expressed by the state legislature in Maine’s Financial Responsibility Law (which was distinguished from mandatory insurance statutes in other states under which all motorists are required to obtain a minimum level of automobile liability insurance), and 2) that prior Maine judicial decisions abrogating interspousal and parent-child immunity in tort did not represent a public policy to invalidate family exclusion provisions. The court held that its prior decisions abolishing the tort immunity doctrines “did not purport to determine the scope of a contract between an insured and an insurer, but merely determined the right of family members to bring an action against one another ... In sum, the abolition of intra-family tort immunities has no effect on the validity of the family exclusion.” 513 A.2d at 273.

Appellants also contend that the family exclusion clause in their homeowners’ policy frustrates their reasonable expectations as purchasers of the policy. They cite State Automobile Insurance Association v. Anderson, 365 Pa.Super. 85, 528 A.2d 1374 (1987), allocatur granted 517 Pa. 624, 538 A.2d 877 (1988), in support of this proposition. We disagree with appellants’ contention and their reliance on Anderson.

The argument that an insured’s reasonable expectations have been frustrated has been rejected where the provisions of a particular insurance policy are clear and unambiguous. Standard Venetian Blind Company v. American Empire Insurance, 503 Pa. 300, 469 A.2d 563 (1983). Where the language of an insurance contract is such, a court is required to give that language effect. Pennsylvania Manufacturers’ Association Insurance Co. v. Aetna Casualty & Surety Insurance Co., 426 Pa. 453, 233 A.2d 548 (1967). In addition, where the coverage is clearly worded and conspicuously displayed, failure to read the limitation or to understand it is no defense. Standard Venetian Blind, supra. See Olson Estate, 447 Pa. 483, 488, 291 A.2d 95, 98 (1972) (“in the absence of proof of fraud, ‘failure to read [the contract] is an unavailing excuse or defense and cannot justify an avoidance, modification or nullification of the contract or any provision thereof.’ ”) (quoting Orner v. T. W. Phillips Gas & Oil Co., 401 Pa. 195, 199, 163 A.2d 880, 883 (1960)).

Anderson, cited by appellants, did not disapprove of this principle, but found on the facts of that case that the policy exclusion at issue, which centered upon the interpretation of the word “employee” in the policy, was not clear and unambiguous. Unlike Anderson, the policy provisions herein are clear. The Neils’ homeowners’ policy clearly excludes bodily injury coverage to an “insured person,” and that term is defined in unambiguous language as including “any relative and any dependent person in [the policyholder’s] care,” if that person is a resident of the policyholder’s household. In upholding the validity of the policy exclusion in this case, we cite with approval the language of the court in Standard Venetian Blind, supra:

Application of these precepts to the insurance contract in this case requires the conclusion that Venetian is bound by the agreement it signed. As found by the court of common pleas, the exclusions at issue are “plain and free of ambiguity,” and could have been readily comprehended by [insured] had he chosen to read them ... [T]o allow Venetian to avoid application of the clear and unambiguous policy limitations in these circumstances would require us to rewrite the parties’ written contract.”

530 Pa. at 305-06, 469 A.2d at 566.

We similarly decline to rewrite the contract of the parties. The policy reasons and expectations of appellants are simply insufficient to persuade us to take the radical measure of rewriting the policy by invalidating the exclusion clause. To do so on the grounds appellants have suggested would disturb established principles of law regarding the rights and liabilities of parties who freely contract, and would place insurance companies in the impracticable situation of insuring losses which they have specifically not contemplated and for which they have not funded reserves. As the courts of other states have indicated, the family exclusion clause does not reinstate the common law immunity between parent and child and between spouses; it rather excludes insurance proceeds as a source of recovery between such parties when the insured has purchased a policy with such an exclusion. See e.g., State Farm General Insurance Co. v. Emerson, supra.

ORDER AFFIRMED.

      . Also joined as additional defendants in the action against Guenzel were Thomas and Susan Lordi, owners of a nearby property upon which was some shrubbery which Guenzel contended obscured his vision while driving, and the Borough of Monroeville, which Guenzel contended was negligent in failing to enforce its ordinance requiring shrubbery to be no higher than a specified height.

      . The Hack court also noted that the possibility of collusion as a justification for continued adherence to the parental immunity doctrine had been rejected in Falco. 495 Pa. at 395, 433 A.2d at 866.

      . Accord Porter v. Farmers Insurance Co., 102 Idaho 132, 136, 627 P.2d 311, 315 (1981) (”[T]he right to sue a spouse for injuries caused by that spouse is an entirely separate matter from the contractual obligation of an insurance company to pay for those injuries. The fact that there is or is not an insurance policy in force covering an accident does not affect the right of one spouse to sue and obtain a judgment against the other spouse. Consequently, we do not believe that the public policy ... supporting] ... the abrogation of spousal immunity prohibits a contractual exclusion of spousal coverage in an insurance policy."); Allstate Insurance Co. v. Boles, 481 N.E.2d 1096, 1099 (Ind.1985) (citing Porter, supra, court upheld family exclusion in automobile policy, stating, "the ability to recover from an insurer is limited by the coverage the defendant contracted for as stated in clear terms in the insurance contract. Accordingly, the household exclusion provision does not contravene any public policy underlying our decision [to abolish interspousal immunity in tort]”); American Family Mutual Insurance Co. v. Ryan, 330 N.W.2d 113 (Minn. 1983) (family exclusion in homeowners’ policy upheld despite judicial abrogation of parent/child immunity because "parties are free to contract as they desire, and so long as coverage required by law is not omitted and policy provisions do not contravene applicable statutes, the extent of the insurer’s liability is governed by the contract entered into____”); Foley v. Foley, 173 N.J.Super. 256, 258-59, 414 A.2d 34, 35 (1980) (family exclusion in homeowners’ policy upheld despite abrogation of interspousal immunity: "[a] decision by a court that there can be liability for a tort action cannot be construed as a holding that public policy requires the responsible party to be covered by insurance or that an insurance company cannot exclude liability for that particular action”); Suba v. State Farm Fire & Casualty Co., 114 App.Div.2d 280, 284, 498 N.Y.S.2d 656, 658 (1986) (family exclusion in homeowners’ policy upheld against statutory and judicial public policy arguments, citing Foley, supra, and Emerson, infra ); State Farm General Insurance Co. v. Emerson, 102 Wash.2d 477, 482-83, 687 P.2d 1139, 1143 (1984) (upholding validity of family exclusion clause in homeowners’ policy: "Contrary to appellants’ arguments, the family exclusion clause does not reinstate the common law immunity but rather excludes insurance proceeds as a source of recovery when the insured has purchased a policy with such an exclusion”).

      . Appellants have also contended that the family exclusion clause should not be enforced because the insurance contract between these parties was a contract of adhesion. While insurance contracts are generally considered adhesion contracts, such a categorization does not, by itself, render an insurance contract unenforceable. Bishop v. Washington, 331 Pa.Super. 387, 400, 480 A.2d 1088, 1094 (1984), citing Witmer v. Exxon Corp., 495 Pa. 540, 551, 434 A.2d 1222, 1228 (1981); Melso v. Texaco, Inc., 532 F.Supp. 1280 (E.D.Pa.1982). "Once a contract is deemed to be one of adhesion, its terms must then be examined by the court for fairness, in order to determine whether they were unreasonably favorable to one party.” Bishop v. Washington, supra. See also Comment, section 2-302 of the Uniform Commercial Code, 13 Pa.C.S.A. § 2302, dealing with unconscionability in contracts covered by the Code (the purpose of § 2-302 is the "prevention of oppression and unfair surprise ... and not of disturbance of allocation of risks because of superior bargaining power.”).
      We do not find the terms of the (instant policy unreasonably favorable to one of the parties. First, the terms of the exclusionary provision are stated in clear and precise language and are "not buried in fine print deep in the insurance contract." Bishop v. Washington, supra, 331 Pa.Super. at 401, 480 A.2d at 1095. Second, the Neils, as insurance consumers, had available to them in the insurance marketplace other types of insurance which could have provided coverage of the type which they seek for their son’s injuries. Considering these two factors, we cannot say that appellants were deprived of a meaningful choice in their decision to purchase the instant policy. See Koval v. Liberty Mutual Insurance Co., 366 Pa.Super. 415, 531 A.2d 487 (1987). In addition, as appellee has pointed out, the effect of exclusionary provisions such as the one here at issue is to make available to consumers homeowners’ insurance at competitive premium rates. The effect of a requirement, judicial or legislative, that family members be provided coverage would be the escalation of premium rates and the resulting inability of some current consumers to afford the ' protections now offered by homeowners’ insurance. Thus, we cannot say that the family exclusion! unreasonably favors the insurance company as it also affects the availability of coverage to the consumer for other types of homeowners’ losses.


source: Caselaw Access Project

author: CAVANAUGH, Judge:

license: Public Domain

text:
    549 A.2d 1311
    Thomas B. McCAIN and Judith K. McCain, Appellants, v. PENNBANK, Appellee.
    Superior Court of Pennsylvania.
    Argued Aug. 16, 1988.
    Filed Oct. 31, 1988.

      Wayne H. Hundertmark, Erie, for appellants.
    Kemp C. Scales, Titusville, for appellee.
    Before CAVANAUGH, JOHNSON and HOFFMAN, JJ.
   CAVANAUGH, Judge:

The issue in this case is whether the court below erred in granting a motion for summary judgment in favor of the defendant, Pennbank, the appellee herein. The plaintiffs below are the appellants in this court.

The basic facts are not in dispute. In March, 1986, Thomas B. McCain, one of the appellants, applied to Penn-bank for refinancing on his home mortgage. The original mortgage had been granted by Pennbank. Mr. McCain completed an application form and was told by the branch manager that he foresaw no problem in obtaining refinancing in the amount of $21,000.00. Copies of the appellants’ income tax returns did not accompany the application for refinancing and the tax returns were forwarded to the bank at a later date. The application was sent to the main office of Pennbank in Erie, Pennsylvania, which determined that the McCains did not have the necessary income to qualify for refinancing on the secondary mortgage market. The bank was willing to make an exception and to refinance the mortgage if Mr. McCain had a deposit account with the bank. At one time, Mr. McCain, who was in the auto body and glass business, kept his business accounts with Penn-bank, but he transferred the account to the Exchange Bank in Franklin, Pennsylvania, in February, 1984 after he had a dispute with one of Pennbank’s employees.

On May 2, 1986, Mr. Stoops advised Mr. McCain that the bank would not refinance his mortgage because he did not have a business account at the bank and his income was insufficient. He asked Mr. McCain to transfer his business account back to Pennbank, but he refused. On May 12, 1986, Pennbank wrote to Mr. and Mrs. McCain and advised them “that your recent credit application cannot be granted at this time and has been declined.”

Subsequently, Pennbank extended a line of credit to the appellants who have made use of the credit line.

In January, 1987, the appellants commenced a civil action against Pennbank setting forth two counts. Count I alleged defamation by the bank “by publishing in a written report or circular, the knowingly false and defamatory matter that plaintiffs had insufficient money and a poor credit rating with defendant bank.” Count II alleged inter alia that the defendant:

had attempted to extort or otherwise blackmail additional business transactions with Plaintiffs by requiring Plaintiffs to bring their business accounts into said Defendant Bank for the purpose of obtaining money thereby.
15. By said attempts of extortion or blackmail, Defendant Bank has caused injury to Plaintiffs’ good name, reputation and credit by reporting a poor credit rating, financial difficulty or financial untrustworthiness on the part of the Plaintiffs.

On March 16, 1987 defendant filed requests for admissions and answers were not timely filed thereto by the plaintiffs as required by the Rules of Civil Procedure. Defendant filed a motion for summary judgment based on the pleadings, depositions and admissions. The plaintiffs filed a “Motion for Leave to Amend Admissions Deemed Admitted Due to Untimely Response to Request Therefor.” The court below granted the plaintiffs’ motion and reserved judgment on the defendant’s motion for summary judgment until answers were filed. Subsequently, the court, by Pfadt, P.J., specially presiding, granted the defendant’s motion for summary judgment and the plaintiffs have appealed to this court from the entry of such judgment.

Summary judgment shall be granted if the pleadings, depositions, answers to interrogatories and admissions on file, show that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Williams v. Pilgrim Life Insurance Co., 306 Pa.Super. 170, 452 A.2d 269 (1982); Gabovitz v. State Auto Insurance Association, 362 Pa.Super. 17, 523 A.2d 403 (1987); Hedlund Manufacturing Co. v. Weiser, Stapler & Spivak, 517 Pa. 522, 539 A.2d 357 (1988); Pa. R.C.P. 1035(b). Summary judgment may be entered only in cases that are clear and free from doubt. Dunn v. Teti, 280 Pa.Super. 399, 421 A.2d 782 (1980); Tom Morello Construction Co. v. Bridgeport Federal Savings & Loan Association, 280 Pa.Super. 329, 421 A.2d 747 (1980); Weiss v. Keystone Mack Sales, Inc., 310 Pa.Super. 425, 456 A.2d 1009 (1983). In addition, we must examine the record in the light most favorable to the non-moving party and accept as true all well pleaded facts in the non-moving party’s pleadings and give the non-mover the benefit of all reasonable inferences to be drawn therefrom. Ferguson v. King, 362 Pa.Super. 543, 524 A.2d 1372 (1987); Metal Bank of America v. Insurance Company of North America, 360 Pa.Super 350, 520 A.2d 493 (1987). Applying all of these tests, we find that the defendant bank is entitled to summary judgment.

A trial court’s grant of summary judgment will be overturned only if there has been an error of law or clear abuse of discretion. Jones v. Keystone Insurance Co., 364 Pa.Super. 318, 528 A.2d 177 (1987). We discern neither an error of law nor abuse of discretion and accordingly we affirm the summary judgment entered by the court below. The two counts of the complaint sound in defamation although Count II refers to “extortion” and “blackmail”. Neither the pleadings nor the depositions develop anything that would tie the facts alleged into either extortion or blackmail and in fact the defendant concentrates only on the aspect of defamation. Bold unsupported assertions of eonclusory accusations cannot create genuine issues of material fact. Chicarella v. Passant, 343 Pa.Super. 330, 494 A.2d 1109 (1985) set forth the requirements to establish defamation which include proving: (1) the defamatory character of the communication; (2) its publication by the defendant; (3) its application to the plaintiff; (4) the understanding by the recipient of its defamatory meaning; (5) the understanding by the recipient that it was intended to be applied to the plaintiff; and (6) special harm resulting to the plaintiff from its publication. See also 42 Pa.C.S. § 8343(a). Chicarella further noted that the publication of defamatory matter is the intentional or negligent communication of such matter to a third person.

In the case before us, the pleadings, affidavit and depositions do not indicate the presence of a defamatory statement, let alone the publication or communication of such a statement to a third person. A communication is defamatory if it tends to harm the reputation of another so as to lower that person in the estimation of the community or deter third persons from dealing with him. Dobson v. WBRE-TV, 347 Pa.Super. 612, 500 A.2d 1226 (1985). All that has been presented was a request for refinancing of a residential mortgage and the bank’s denial of the refinancing to the plaintiffs unless the applicants would transfer a business account to the bank which might have constituted the basis for an exception. The only writing by the bank was a letter of May 12, 1986 which told the plaintiffs that their application for refinancing had been denied, and all agree that this in fact occurred.

The appellants had no indication that their credit had been adversely affected in any way. Mr. McCain testified concerning the effect of the denial of his refinancing as follows:

Q. Is there any reason you didn’t go to another bank to refinance?
A. If figured it ruined my credit. How can I get credit somewhere else when I was turned down here?
Q. Well, you mentioned in the complaint that Pennbank made a bad report on your credit. Do you have a copy of any report they made on your credit?
A. No, but it’s understandable if I went to apply for a loan somewhere else, you have to state that you were turned down at a previous bank and that’s understandable that you would have to say that.
Q. Is there any reason you didn’t go to Exchange Bank where you keep your business account and apply there?
A. Not after I got turned down here. I would have to say I was turned down here. Ifigured it wouldn’t do me any good to try to refinance there.
Q. Did anyone at Pennbank tell you your credit was no good?
A. I took it for granted that I couldn’t do it — I didn’t have enough money. Lenny offered me a fifteen year mortgage.
(Emphasis added)

Judith McCain testified with respect to possible defamation as follows:

Q. Did you see the notice [of denial of refinancing] when it came in the mail?
A. Yes I did.
Q. But you had no further conversations with the bankers, is that right?
A. No.
Q. What evidence do you have or have you seen that indicates that this bank has given you and your husband a bad credit rating?
A. We have received nothing, but our credit has been damaged.
Q. That’s your assumption.
A. Yes.
Q. Nothing happened other than the turning down of the loan that would suggest that, is that right?
A. Right.
Q. To your knowledge your husband was never told that the loan was turned down because of your credit standing, your record of handling credit in the past?
A. No.
(Emphasis added.)

The appellants are not aware of anything defamatory that was uttered against them by the bank. They have not been refused credit at any other financial institution because the bank refused to refinance their mortgage. The appellants allege in their brief at page 9 that “defendant bank gave the plaintiffs a $10,000.00 line of credit without bringing their business accounts back into the bank.”

Pennbank was not required to grant the appellants the refinancing they requested. A bank has an absolute right to refuse an application for a mortgage loan and need give no reason for its refusal. Todd v. Shelly, 384 Pa. 423, 120 A.2d 906 (1956); Buczek v. First National Bank of Mifflintown, 366 Pa.Super. 551, 531 A.2d 1122 (1987). Thomas McCain told the bank manager that he had a right to refinance the mortgage on his home and, in effect, demanded that the bank give him the mortgage that he requested. There is no basis in law for this position. In this case, there is no genuine issue as to any material fact and based on the record set forth in the pleadings and depositions, Pennbank is entitled to summary judgment. All the complaint alleges factually is that the appellants sought to refinance the mortgage on their home and that the bank would not grant refinancing unless Mr. McCain opened a business account with the bank, which he previously had maintained. He refused to do so and the bank would not grant the mortgage the appellants wanted and wrote to the appellants telling them, as they already knew, that their application had been denied. The bank also gave Mr. McCain an additional reason that his income was inadequate. In an action for defamation, it is the function of the trial court to make a threshold determination of whether the challenged publication is capable of a defamatory meaning, and if it is not, there is no reason for the matter to proceed to trial. Salerno v. Philadelphia Newspapers, Inc., 377 Pa.Super. 83, 546 A.2d 1168, (1988). In the instant case we do not have a challenged publication to a third person and there is nothing to present to the jury. Although the appellants alleged that Pennbank published a written report “that Plaintiffs had insufficient money and a poor credit rating with defendant bank”, they acknowledged that they have never seen nor heard of such a report, but merely assume that it exists. Plaintiffs’ case, at best, is based on speculation and assumptions. It is not this court’s function to decide if issues of fact exist, but only to determine if there is an issue of fact to be tried. Thorsen v. Iron and Glass Bank, 328 Pa.Super. 135, 476 A.2d 928 (1984). We find that no such issue exists.

JUDGMENT AFFIRMED.

      . Jack Stoops the manager of the Pleasantville office where the application was submitted, testified that in order to qualify for the secondary mortgage market, the debt to income ratio cannot exceed 36% of average monthly income. The application initially given to the manager by Mr. McCain apparently presented a different income picture than that reflected on the federal income tax returns.

      . Mr. McCain testified concerning this on deposition as follows:
      Q. What happened on May 2nd?
      A. At five to five, and I remember I was making out payroll, Jack called me and he told me he wasn’t refinancing the home and I said "why" and he said "because you do not have your business account here”.
      Q. That's what he told you was the reason?
      A. Yes, sir.
      Q. Did he give you any other reason?
      A. I said "you can’t do that to me. I have my right to refinance it” and he said "how do you like this; you don’t make enough money" and then I told him “I’ll see you Monday morning before the bank is open. I’ll be waiting for you at the door”.

      . In paragraph 12 of the complaint, the appellants claim that Penn-bank’s actions caused them injury to "their good nature, reputation and credit ...” There is no cognizable claim in law for injury to one’s “good nature” and we will assume that the plaintiffs were referring to their good name.

      . Pa.R.C.P. 4014(b) provides in part:
      (b) Each matter of which an admission is requested shall be separately set forth. The matter is admitted unless, within thirty days after service of the request, or within such shorter or longer time as the court may allow, the party to whom the request is directed serves upon the party requesting the admission a verified answer or an objection addressed to the matter, signed by the party or by his attorney.

      . Blackmail and extortion are crimes and are included within the crime of theft. 18 Pa.C.S. § 3902. We noted in Commonwealth v. Shaffer, 279 Pa.Super. 18, 24-25, 420 A.2d 722, 725-26 (1980) that: " 'This crime of "theft” was intended to embrace the offenses heretofore known as larceny, embezzlement, false pretenses, extortion,

        blackmail, fraudulent conversion, receiving stolen property and the like ...’” See also Commonwealth v. Robichow, 348 Pa.Super. 338, 487 A.2d 1000 (1985). Theft by extortion is defined at 18 Pa.C.S. § 3923 as follows:
      § 3923. Theft by Extortion
      (а) Offense Defined. — A person is guilty of theft if he intentionally obtains or withholds property of another by threatening to:
      (1) commit another criminal offense;
      (2) accuse anyone of a criminal offense;
      (3) expose any secret tending to subject any person to hatred, contempt or ridicule;
      (4) take or withhold action as an official, or cause an official to take or withhold action;
      (5) bring about or continue a strike, boycott or other collective unofficial action, if the property is not demanded or received for the benefit of the group in whose interest the actor purports to act;
      (б) testify or provide information or withhold testimony or information with respect to the legal claim or defense of another; or
      (7) inflict any other harm which would not benefit the actor.

      . Appellants argue "If Plaintiffs did not have enough money for the refinancing of $21,000.00, the question must be asked as to why defendant believed plaintiffs had enough money for a $10,000 line of credit?” (Appellant’s brief, page 11) It must be noted initially that although appellants contend in numerous parts of their brief that the bank officer told them they could not obtain refinancing because they did not have enough money, Mr. McCain himself testified that he was told refinancing was not approved because "he did not make enough money.” This statement refers not to lack of assets but to inadequate income. Secondly, the fact that appellants obtained a ten thousand dollar line of credit has no bearing on their inability to obtain refinancing of a $21,000.00 home mortgage. Different factors are involved, from a banking standpoint, in extending a line of credit where the interest charges may be quite high and the repayment schedule much shorter, than in refinancing a mortgage.


author: TAMILIA, Judge:

text:
    549 A.2d 1316
    Barbara A. HALEY v. Charles F. HALEY, Appellant.
    Superior Court of Pennsylvania.
    Submitted Sept. 14, 1988.
    Filed Nov. 1, 1988.

      Charles F. Haley, in propria persona.
    Barbara Haley Wize, in propria persona.
    Before CAVANAUGH, TAMILIA and HOFFMAN, JJ.
   TAMILIA, Judge:

This is a pro se appeal by the defendant/father, who is an attorney, from a June 17, 1987 Order modifying a previous child support Order. Appellee/mother is also proceeding pro se in this matter but has not submitted a brief.

The parties were married in Texas in 1968. On January 28, 1986, appellee filed a complaint in divorce seeking, among other items, spousal and child support. The parties had three children during the course of their marriage: Deron, born September 1, 1971; Ryan, born March 17, 1973; and Shannon, born August 1, 1977. On February 10, 1987, a final Decree in divorce was entered. At the time of the hearing on appellants’ petition for modification of support, an existing child support Order was in effect requiring a total monthly support obligation by appellant in the amount of $645 per month less a $76 per month payment to be made by appellant on a joint obligation of the parties, resulting in an actual support payment of $569 per month. Appellant filed the petition for modification because he had been laid off on February 16, 1987 from a $35,000 a year job as labor counsel for Heck’s Inc. The hearing officer recommended the support obligation remain unaltered at $569 per month plus the $76 payment on the joint obligation, but did alter the form of payment by requiring appellant to pay only $250 per month while unemployed, with the remainder accumulating as an arrearage. The trial court entered the recommendations as an Order on June 17, 1987. After a hearing de novo the trial court denied both parties’ exceptions and made the Order final on October 19, 1987. This timely appeal followed.

Appellant’s sole claim on appeal is that the trial court abused its discretion in refusing to reduce his child support obligation after he incurred an involuntary reduction in income.

Our scope of review in child support cases is limited. In Ritter v. Ritter, 359 Pa.Super. 12, 16-18, 518 A.2d 319, 322 (1986), we set forth the standard of review for child support as follows:

It is within the trial court’s discretion to determine the amount of a support Order, and its judgment should not be disturbed on appeal absent a clear abuse of that discretion. Melzer v. Witsberger, 505 Pa. 462, 480 A.2d 991 (1984); Commonwealth ex rel. Loring v. Loring, 339 Pa.Super. 92, 488 A.2d 324 (1985). ‘On appeal, a trial court’s child support order will not be disturbed unless there is insufficient evidence to sustain it or the court abused its discretion in fashioning the award.’ Fee v. Fee, 344 Pa.Super. 276, 279, 496 A.2d 793, 794 (1985); Commonwealth ex rel. Robinson v. Robinson, 318 Pa. Super. 424, 465 A.2d 27 (1983). A finding of abuse will be made only upon a showing of clear and convincing evidence. Koller v. Koller, 333 Pa.Super. 54, 481 A.2d 1218 (1984).

The role of an appellate court in support proceedings is limited and a finding of an abuse of discretion is not made lightly. Hartley v. Hartley, 364 Pa.Super. 430, 528 A.2d 233 (1987); Shindel v. Leedom, 350 Pa.Super. 274, 504 A.2d 353 (1986). With this standard in mind, we will review appellant’s claim.

Appellant contends the trial court failed to apply the support guidelines properly by not utilizing his actual income and that the court’s decision is unsupported by the evidence and is an abuse of discretion. Appellant argues that in reviewing his motion for modification the trial court erred by not considering his involuntary reduction in income as a reduction in earning capacity. He contends it was an abuse of discretion to ignore his reduction in actual income and to conclude his earning capacity remained undiminished.

In DeMasi v. DeMasi, 366 Pa.Super. 19, 31-33, 530 A.2d 871, 877 (1987), allocatur denied, 517 Pa. 631, 539 A.2d 811 (1987), we summarized the basis for determining a parent’s support obligation as follows:

Both parents are equally responsible for supporting their children, and the extent of their respective support obligations is determined by their capacity and ability. Fee v. Fee, 344 Pa.Super. 276, 496 A.2d 793 (1985). A parent’s ability to pay support is determined primarily by financial resources and earning capacity. Hesidenz v. Carbin, 354 Pa.Super. 610, 512 A.2d 707 (1986); Commonwealth ex rel. Cochran v. Cochran, 339 Pa.Super. 602, 489 A.2d 804 (1985). The obligation of support, then, is measured more by earning capacity than by actual earnings. Hesidenz, supra.

See DeWalt v. DeWalt, 365 Pa.Super. 280, 529 A.2d 508 (1987).

In fashioning the award to appellee for support of the parties’ children, the hearing officer and the trial court accounted for appellant’s reduction in actual income by reducing the actual support payment from $569 per month to $250 per month and allowing the difference to accumulate as arrearages, until such time as appellant obtained employment and could pay on the arrearages. Both the hearing officer and the trial court concluded appellant had an undiminished earning capacity despite his being laid off from Heck’s Inc. Upon thorough review of the record, we find clear and convincing evidence of record that such a finding is an abuse of the trial court’s discretion. Further, we find the reduced-payment-coupled-with-accumulated-arrearages arrangement ordered below, does not adequately address appellant’s changed ability to pay support as determined by his financial resources at the time of his unemployment.

Appellant incurred a definite and substantial involuntary reduction of income when he was laid off from Heck’s Inc. This decrease in earnings was from a net total of $2,196 per month to unemployment compensation of $975 per month before taxes. Appellee’s net income at that time was $1,220 per month with reported expenses of approximately $1,870 per month. Although earning capacity is more determinative of an ability to pay than actual earnings, DeMasi, supra, and Hesidenz, supra, the two concepts are closely linked and under these circumstances are indistinguishable. Here, we .find no basis exists for the trial court’s finding that appellant’s earning capacity was not curtailed at the same time his actual earnings were reduced. Although appellant is an attorney, he was not in practice for himself and had no reported income from his ability to practice law at the time of the lay off. Further, appellant had no other reported earnings besides his salary or unemployment compensation. Under these circumstances, the trial court erred in concluding appellant’s earning capacity was undiminished. Accordingly, we vacate the Order of October 19, 1987 which reaffirmed the Order of June 17, 1987.

A parent’s involuntary loss of income is a serious matter with obvious adverse repercussions on the economic welfare of the children, however, it is a loss which must be weathered. If the parties had still been together when appellant was laid off, the family would have had to make do with what it had, all sharing to a commensurate degree in the loss, rather than the father bearing all. The same should follow when the parents are separated, as here. Here, the record is clear that appellant was unemployed and actively seeking a job, without any type of earnings or capacity to earn other than his unemployment compensation during that period. This may not be likened to the cases wherein an obligor has voluntarily withdrawn from income producing endeavors or reduced his earnings out of malice or concealed earnings by hiding behind family corporate shields, unsubstantiated debts or unwarranted expenses. In those cases we have consistently gone behind the subterfuge and applied the earning capacity consideration. Proof of the inadequacy of the application of that concept in this case was the fact that when appellant was finally re-employed, it was at a lower salary and the court recognized this permanent diminution of earning capacity by reducing the permanent Order to $426 per month. With the economy under constant adjustment, jobs being eliminated and “take backs” resulting in reduced earnings, the courts must be careful not to find earning capacity when none exists. Because of recent legislation compelled by federal requirements to collect arrearages and enforce payment, assessment of arrears must truly reflect the actual situation as there is virtually no possibility of adjustment in the future, if the decision was not appropriate. Act No. 1988-35, approved March 25, 1988, creates a “Judgment by Operation of Law” as follows (23 Pa.C.S.A. § 4302 Definitions):

‘Judgment by operation of law.’ A judgment which exists without the need for any ministerial act and which arises out of the existence of facts readily verifiable from the domestic relations section’s records. The existence of a valid support order and nonpayment of the order, together, create the judgment.

The Amendments to 23 Pa.C.S.A. § 4352, Continuing jurisdiction over support orders, provide in pertinent parts:

(c) Arrears as judgments. — On and after the date it is due, each and every support obligation shall constitute a judgment against the obligor by operation of law, with the full force, effect and attributes of a judgment of court, including the ability to be enforced, and shall be entitled as a judgment to full faith and credit in this or any other state. Past due support obligations shall not become a lien upon the real and personal property of the person ordered to make such payments until the judgment or order has been entered of record in the office of the clerk of the court of common pleas in the county where the real or personal property owned by the person obligated to pay support is located or in the office of the clerk of the branch of the court of common pleas embracing such county in accordance with 42 Pa.C.S. § 4303 (relating to effect of judgments and orders as liens). Execution shall issue thereon pursuant to the Rules of Civil Procedure. The obligation for payment or arrears or past due support shall terminate by operation of law when all arrears or past due support has been paid.
(d) Retroactive modification of arrears. — No court shall modify or remit any support obligation, on or after the date it is due, except with respect to any period during which there is pending a petition for modification. If a petition for modification was filed, modification may be applied to the period beginning on the date that notice of such petition was given, either directly or through the appropriate agent, to the obligee or, where the obligee was the petitioner, to the obligor.

Finally, 23 Pa.C.S.A. § 4354, Willful failure to pay support order, was added, creating a summary offense as follows:

§ 4354. Willful failure to pay support order
(a) Offense defined. — An individual who willfully fails •to comply with a support order of a court of this Commonwealth when the individual has the financial ability to comply with the support order commits a summary offense.
(b) Application. — This section applies to all support cases, whether civil or criminal and whether the defendant is married, unmarried, separated or divorced.
(c) Jurisdiction. — Exclusive original jurisdiction of a proceeding under this section is vested in the courts of common pleas of this Commonwealth.

Because of these more stringent laws as to arrearages and their nonmodifiability, the automatic imposition of judgment without review, and the imposition of a penal sanction (summary offense) for willful failure to support, the trial courts must now apply closer scrutiny to ability to pay than heretofore. Earning capacity becomes too vague a basis for assessing arrears, absent some verifiable basis for determining that the capacity exists, or that it was eliminated or reduced because of intentional actions by the obligor.

Our review of the record disclosed that appellee testified she had been forced to “borrow money” from her mother and other relatives during appellant’s period of unemployment in order to provide for the welfare of the parties’ children (N.T. 10/13/87, pp. 29-30). Any such loans, if reasonable and undertaken for the benefit of the children, should be a debt shared by both parties. Therefore, on remand we direct the trial court to hold a hearing to determine the total amount of money borrowed for the benefit of the children. Appellant should be held responsible for an equitable portion of the amount as arrearages. While arrears may be appropriately retained in the face of reduced income, if it calls for additional sacrifice on the part of the obligor it must be balanced with concomitant sacrifice on the part of the payee. Here a disproportionate sacrifice was imposed upon the father.

Order vacated and remanded for further proceedings consistent with this Opinion.

Jurisdiction relinquished.

      . According to appellant’s brief and the record, he became employed with the State of West Virginia as a hearing examiner for the West Virginia Education Employees Grievance Board on September 1, 1987 at the rate of $30,000 per year. Since that time appellant accepted a position in a law firm in Charleston, West Virginia. After a hearing, a new support Order dated January 4, 1988 was entered which required appellant pay $426 per month, plus $76 per month on the joint obligation and arrearages — this is a guideline figure based on the parties’ monthly income.

      . We recognize appellant had a continuing obligation under both Orders to pay $76 a month on the parties’ joint obligation.

      . Appellant failed to report his expenses.


author: HESTER, Judge:

text:
    549 A.2d 1320
    COMMONWEALTH of Pennsylvania v. Luis R. ROMAN. Appeal of George R. ZAISER.
    Superior Court of Pennsylvania.
    Argued Aug. 16, 1988.
    Filed Nov. 3, 1988.

      George R. Zaiser, Franklin, for appellant.
    William G. Martin, Jr., District Attorney, Franklin, for Com., appellee.
    Before BROSKY, KELLY and HESTER, JJ.
   HESTER, Judge:

Attorney George R. Zaiser appeals from the order entered September 9, 1987, in the Court of Common Pleas of Venango County, denying his petition to withdraw as defense counsel in the matter of Commonwealth v. Roman. We reverse.

Appellant, a Pennsylvania attorney, was hired to represent Luis R. Roman in two criminal cases — one dealing with delivery of cocaine, the other with possession with intent to deliver cocaine, possession of cocaine, and possession of a small amount of marijuana. Appellant and Roman entered into a fee arrangement which provided that in the event Roman failed to make payment when due, appellant could withdraw from further representation. Roman was convicted of the charges following two jury trials. His post-verdict motions were denied, and he was sentenced to a term of incarceration on August 21, 1987. Appellant filed an appeal in both cases to this court and then petitioned to withdraw his representation. The trial court denied the petition, and this timely appeal followed.

Appellant contends that the client consented to his withdrawal. Moreover, the trial court accepted as true his allegation that Roman owed him $12,518.58. However, the court did not find this fact dispositive. The court wrote:

As the trial judge, we recognize that counsel has devoted his professional skills and much time in his capable representation of defendant. However, as of May 22, 1987, when total counsel fees and costs in the sum of $12,-518.58 had been incurred, counsel had to know the account was delinquent (for what further period of time does not appear of record).
We conclude his petitions to withdraw his representation at this late stage of the proceedings, when appeals are pending, are not timely filed.

Trial court opinion at 3.

We respectfully disagree with the court’s reasoning and, accordingly, reverse.

“There are no prophylactic rules which exist when determining whether a denial or withdrawal amounts to an abuse of discretion. Each case must be decided by balancing the competing interests giving due regard to the facts presented.” Commonwealth v. Scheps, 361 Pa.Super. 566, 576, 523 A.2d 363, 368 (1987) (concurring and dissenting opinion by Wieand, J.; dissenting opinion by Olszewski, J.). Judge Cercone, writing the lead opinion, noted that the attorney and his criminal client agreed to a fee arrangement, but that when it became apparent that the client would be unable to pay $6,000.00 in outstanding fees and estimated future fees of $150,000.00, the attorney filed a petition to withdraw. At the hearing on the petition, the client indicated his intent to discharge the attorney since he could not afford his services. The trial court refused to grant the withdrawal. We reversed.

We found that withdrawal was appropriate under Pennsylvania Code of Professional Responsibility, Disciplinary Rule 2-110(C)(1)(f), which holds that a lawyer may request permission to withdraw if his client “[deliberately disregards an agreement or obligation to the lawyer as to expenses or fees.” Moreover, since the client dismissed the attorney, we found DR 2-110(C)(5) applicable (a lawyer may request permission to withdraw when “[h]is client knowingly and freely assents to termination of his employment.”) We concluded:

Where a lawyer has conscientiously represented his client and has not left him without time to prepare his case for trial or to procure other counsel for such trial, his petition for withdrawal is not made in bad faith. And where said client made in bad faith [sic] owes past legal fees of a substantial amount and is not in a position to pay for future legal fees for a protracted trial, there is no reason to deny an attorney’s petition for leave to withdraw ... The court’s denial of Mr. Lieberman’s petition imposes a punishment resulting in the risk of detriment to his career, let alone substantial financial losses. It should not be permitted. After all, it is the client’s responsibility and not the attorney’s to pay for the heavy costs of trial.

Id. 361 Pa.Super. at 581-82, 523 A.2d 370.

In Commonwealth v. Sweeney, 368 Pa.Super. 33, 533 A.2d 473 (1987), we reversed a trial court order and permitted counsel to withdraw from representing an indigent client in the latter’s appeal to this court, finding it significant that there was no record support for the trial court’s finding that the client had compensated counsel for taking the appeal. “[T]he trial court ... overlooked the one crucial factor which goes to the heart of the instant appeal and upon which [counsel] premised his plea to withdraw from further representation. That is, the trial court failed to consider the economics of [counsel’s] continued representation.” Id. 368 Pa.Super. at 40, 533 A.2d at 477.

We also considered the Code of Professional Responsibility, Ethical Consideration 2-31, which states that counsel should continue to represent a client through the appellate process unless permission to withdraw is granted, and Ethical Consideration 2-32, which states that counsel’s decision to withdraw should be made only after due notice and recommendation of employment of another counsel to protect the welfare of the client and to minimize any prejudice to the client due to the withdrawal. We found that counsel satisfied these considerations as he sought permission to withdraw, offered as substitute counsel his law associate, and prepared a notice of appeal on the client’s behalf.

Sweeney further cited the Code of Professional Responsibility, Disciplinary Rule 2-110, which provides for mandatory withdrawal of counsel if he is discharged by his client, and allows permissive withdrawal if the client knowingly and freely assents to the termination of counsel’s employment. Applying these standards, we noted that at the sentencing hearing, the client requested that the court appoint counsel to represent him on appeal. Moreover, the client remained silent when counsel advised the court that the client was without funds to retain him. We concluded: “We deem this silence, coupled with [the client’s] record request for appointment of counsel because of his indigency, to be at least an implied acquiescence in [counsel’s] withdrawal, and, as such, an implicit discharge of [counsel] from further representation.”

Turning to the instant case, as in both Scheps and Sweeney, the client has failed to tender payment due his attorney, appellant. He owes appellant more than $12,-000.00 for services rendered. This is in violation of a fee arrangement whereby appellant and the client agreed that if the latter failed to make payment when due, appellant could withdraw. In both Scheps and Sweeney, we reversed a trial court order and allowed counsel to withdraw primarily due to the client’s failure to pay him. We find these cases dispositive.

By the clear terms of the fee arrangement, the client was cognizant that appellant could withdraw his representation at any time. Code of Professional Responsibility, Disciplinary Rule 2-110(C)(l)(f) allows a lawyer to request permission to withdraw when his client “[deliberately disregards an agreement or obligation to his lawyer as to expenses or fees.” See also Commonwealth v. Scheps, supra. Contrary to the trial court’s reasoning, it is not important whether or for how long counsel was aware-that he was owed fees. See trial court opinion at 3. Rather, the principal inquiry under DR 2-110(C)(l)(f) is whether the client was aware of his failure to pay his counsel. It is only reasonable to infer that the client knowingly and intelligently failed to pay a substantial sum for services rendered.

It also would be reasonable to hold that the client knowingly and freely assented to the termination of appellant’s employment. DR 2-110(C)(5). Appellant’s petition to withdraw asserts that the client consented to the withdrawal. Moreover, by voluntarily entering into the fee arrangement, it is reasonable to assume that the client knowingly and freely assented to the termination. See also Commonwealth v. Sweeney, supra.

Furthermore, consistent with Scheps and Sweeney, appellant has minimized any prejudice which might occur to the client. Nothing before us reveals that appellant represented the client in any but a competent and conscientious manner. It is clear that he performed numerous duties in representing the client in two cases without compensation. Appellant waited until he filed an appeal to this court on the client’s behalf before petitioning to withdraw; he did not seek to withdraw in the midst of trial proceedings. The petition to withdraw avers that he advised the client of his intention to withdraw more than one month prior to filing the petition and that he discussed the matter with him on numerous occasions prior to that date. We believe that appellant has acted to minimize the inconvenience to the client due to his withdrawal.

Order vacated; case remanded for the appointment of counsel.

      . Following the filing of Commonwealth v. Sweeney, supra, the Commonwealth-appellee reversed the position it had taken in its brief and, in a letter to this court, conceded that appellant should be permitted to withdraw.