author: LIPEZ, Judge:

text:
    499 A.2d 362
    Francis MONAGHAN, T/A Monaghan’s Collision Service v. PROVIDENT NATIONAL BANK, Appellant.
    Superior Court of Pennsylvania.
    Argued March 25, 1985.
    Filed Sept. 27, 1985.

      Walter Weir, Jr., Philadelphia, for appellant.
    Melvin R. Shuster, Philadelphia, for appellee.

      Before TAMILIA, LIPEZ and SHIOMOS , JJ.

       Judge Thomas N. Shiomos, Senior Judge, of the Court of Common Pleas of Philadelphia County, Pennsylvania, is sitting by designation.

   LIPEZ, Judge:

This action was brought in both trespass and assumpsit to recover amounts paid by defendant bank on checks drawn on plaintiffs account to plaintiffs bookkeeper, who had forged plaintiffs signature and cashed the forged checks. After defendant bank filed its answer, both sides moved for summary judgment. The court below granted the defendant bank’s motion for summary judgment as to plaintiff’s trespass claim, which the court held was barred by the two-year statute of limitations. 42 Pa.C.S. § 5524(3). The court also held, however, that the count in assumpsit was not time-barred, because it was brought within the four-year statute of limitations of 42 Pa.C.S. § 5525(3) and (4). The court further held that the bank was strictly liable to plaintiff for checks paid on a forged signature, and therefore summary judgment was granted for the plaintiff on the assumpsit count. Defendant bank then took this appeal, in which it contends: (1) the two-year statute of limitations in 42 Pa.C.S. § 5524(3) bars plaintiff’s claim in the assumpsit count as well as in the trespass count; (2) plaintiff’s claim is also barred by section 4406 of the Uniform Commercial Code, 13 Pa.C.S. § 4406; and (3) the court below should not have granted summary judgment to the plaintiff, because questions of material fact remained to be tried. We disagree that plaintiff’s claim was barred by either 42 Pa.C.S. § 5524(3) or 13 Pa.C.S. § 4406, but we agree that material questions of fact remained to be tried. Therefore we vacate the order granting summary judgment to the plaintiff, and remand for trial on the assumpsit count in plaintiff’s complaint.

The basic facts of the case are simple. Plaintiff is a businessman who maintained a checking account for his business with the defendant bank. Plaintiff himself was the only one authorized to sign checks drawn on the account, but plaintiff’s bookkeeper regularly transacted business at the bank on plaintiff’s behalf. During the period from February, 1979 to July, 1981, the bank honored a number of checks, made out to “CASH,” which were presented for payment by the bookkeeper and on which she had forged plaintiff’s signature. Since the bookkeeper herself was the only person in plaintiff’s office who received and reviewed the monthly statements and cancelled checks sent by the bank, plaintiff did not discover and report the fraud until July, 1981, when the bookkeeper was in the hospital. The bank refused to recredit plaintiff’s account for the amounts paid to the bookkeeper on the forged checks, and in August, 1983, plaintiff brought this action to recover on the thirty-one of the forged checks which were cashed between September, 1980 and July, 1981.

In contrast to this simple fact pattern, some of the bank’s arguments are fairly labyrinthine. To facilitate discussion, we shall address the issues in a different order from that of the bank’s brief, beginning with the relatively simple issue of the statute of limitations. It is undisputed that the action was brought more than two years, but less than four years, after accrual of the cause of action on each check on which plaintiff has sued, so the only question is whether the two-year or four-year statute of limitations governs. Plaintiff has not appealed the lower court’s determination that the trespass count of the complaint is barred by the two-year limitation of 42 Pa.C.S. § 5524(3), so all that is before us is the bank’s contention that the two-year limitation of section 5524(3) also applies to the assumpsit count.

The bank contends that the only four-year statute of limitations which might apply to plaintiffs case is section 5525(4) of the Judicial Code, which provides a four-year limitation for “An action upon a contract implied in law, except an action subject to another limitation specified in this subchapter.” 42 Pa.C.S. § 5525(4). The bank further argues that the trespass count and assumpsit count of plaintiffs complaint are not distinct causes of action but only alternative theories of recovery, and therefore plaintiff is subject to the exception in section 5525(4) for “an action subject to another limitation specified in this subchapter,” viz., the two-year limitation of 42 Pa.C.S. § 5524(3). The first flaw in the bank’s argument is that plaintiff’s action is clearly based on alleged breach of an express contract between himself as customer and the bank, rather than a contract implied in law. See Hardex-Steubenville Corporation, Inc. v. Western Pennsylvania National Bank, 446 Pa. 446, 449-50, 285 A.2d 874, 876 (1971), reh’g denied (1972). Therefore the applicable statute of limitations here is not section 5525(4), but section 5525(3), which provides a four-year limitation for “An action upon an express contract not founded upon a instrument in writing.” 42 Pa.C.S. § 5525(3). Unlike section 5525(4), section 5525(3) contains no exception, so the four-year limitation clearly applies here.

Moreover, even if the applicable section were 5525(4), we would not find the exception in that section for “an action subject to another limitation” applicable to this case. Plaintiffs action is not subject to the two-year statute of limitations for trespass actions in section 5524(3), because plaintiff has no cause of action for trespass under Pennsylvania law. See Cumis Insurance Society, Inc. v. Girard Bank, 522 F.Supp. 414, 418-19, n. 11 (E.D.Pa.1981), as amended (collecting cases). Thus the court below correctly concluded that the four-year statute of limitations applies to the assumpsit count of plaintiff’s complaint, and refusal to dismiss that count was proper, because it was filed within four years.

The bank’s next argument is based on section 4406 of the Uniform Commercial Code, which provides in pertinent part:

(a) General rule. — When a bank sends to its customer a statement of account accompanied by items paid in good faith in support of the debit entries or holds the statement and items pursuant to a request or instructions of its customer or otherwise in a reasonable manner makes the statements and items available to the customer, the customer must exercise reasonable care and promptness to examine the statement and items to discover his unauthorized signature or any alteration of an item and must notify the bank promptly after discovery thereof.
(b) Effect of failure to report unauthorized signature or alteration. — If the bank establishes that the customer failed with respect to an item to comply with the duties imposed on the customer by subsection (a) the customer is precluded from asserting against the bank:
(1) his unauthorized signature or any alteration of the item if the bank also establishes that it suffered a loss by reason of such failure; and
(2) an unauthorized signature or alteration by the same wrongdoer on any other item paid in good faith by the bank after the first item and statement was available to the customer for a reasonable period not exceeding 14 calendar days and before the bank receives notification from the customer of any such unauthorized signature or alteration.
(c) Nonliability of bank affected by lack of ordinary care. — The preclusion under subsection (b) does not apply if the customer establishes lack of ordinary care on the part of the bank in paying the item.
(d) Statutes of limitations applicable to customer.— Without regard to care or lack of care of either the customer or the bank a customer who does not within one year from the time the statement and items are made available to the customer (subsection (a)) discover and report his unauthorized signature or any alteration on the face or back of the item or does not within three years from that time discover and report any unauthorized indorsement is precluded from asserting against the bank such unauthorized signature or indorsement or such alteration.

13 Pa.C.S. § 4406.

The bank contends that plaintiff failed to comply with his obligations under subsection (a) of section 4406, and therefore subsection (b)(2) precludes plaintiff’s suit on all 31 checks, since all the forgeries were by the same wrongdoer, and all 31 of the checks were cashed more than 14 days after the first item or statement was made available to plaintiff and before the bank received notification from plaintiff of the forgeries. Plaintiff counters the bank’s subsection (b)(2) defense by pointing to subsection (c), which provides that subsection (b)’s preclusion “does not apply if the customer establishes lack of ordinary care on the part of the bank in paying the item.” 13 Pa.C.S. § 4406(c).

The bank answers plaintiff’s subsection (c) counter-argument with a complex statutory construction argument, the linchpin of which is the bank’s contention that the words “the item” at the end of subsection (c) refer to the phrase “the first item” as used in subsection (b)(2). Based on this reading of “the item” to mean “the first item,” the bank contends that subsection (c) is inapplicable for two reasons: (1) the record does not show lack of ordinary care by the bank with respect to the first item; and (2) since recovery on the first item is absolutely precluded by the one-year statute of limitations of subsection (d), the first item cannot be used as the basis for liability on any other item. We do not believe that these conclusions would necessarily follow, even if we agreed with the bank’s contention that “the item” referred to in subsection (c) means “the first item,” but since we disagree with this necessary premise of the bank’s argument, we need not decide whether the bank’s additional claims concerning the first item are correct.

We agree with plaintiff that “the item” in subsection (c) refers to any item for which the plaintiff is suing, rather than “the first item,” which is mentioned in subsection (b)(2). This is demonstrated by the fact that subsection (c) refers to “the preclusion of subsection (b)” as a whole, rather than of subsection (b)(2) in particular. Neither subsection (b)(1) nor the introductory clause to subsection (b) refer at all to “the first item.” Subsection (c) is clearly intended to render the “preclusion of subsection (b)” ineffective when the bank does not use ordinary care in paying “the item,” regardless of whether the preclusion arises from subsection (b)(1) or (b)(2). The only sensible reading of “the item” in subsection (c) would therefore be that it refers to any item to which the bank is attempting to apply “the preclusion of subsection (b).”

The bank points out that a court in Ohio has held that “the item” in section 4406(c) refers to “the first item” George Whalley Company v. National City Bank of Cleveland, 55 Ohio App.2d 205, 380 N.E.2d 742 (1977). The bank claims that this Ohio case is an especially strong guide for interpreting Pennsylvania law, because in the official version of the Uniform Commercial Code, section 4406(c) ends with “the item(s),” while both Pennsylvania and Ohio have changed their version to read “the item.” Since the case is from another jurisdiction, however, we are not bound by it. Its only value in this court is its reasoning, which we do not find persuasive. As previously stated, reading “the item” to mean “the first item” would mean that subsection (c) refers only to preclusion under subsection (b)(2), which is clearly contrary to the express reference in subsection (c) to preclusion under all of subsection (b). The legislature has unambiguously expressed its intent that “the item” in section 4406(c) means any item for which the plaintiff sues and to which the bank attempts to apply the preclusion of subsection (b). We are required to interpret the statute according to its plain meaning. 1 Pa.C.S. § 1921(b). The bank has therefore not established a defense under section 4406 at this state of the proceedings.

This does not mean, however, that the plaintiff has eliminated any possibility of a defense under section 4406, as he was required to do in order to be entitled to summary judgment at this time. The opinion of the court below does not address the bank’s final claim, that plaintiff was not entitled to summary judgment at this state because material questions of fact remained to be tried. The opinion bases its grant of summary judgment to the plaintiff on the assumpsit count solely on a statement in a federal court opinion (applying Pennsylvania law) to the effect that there is “strict liability under the Code as between a drawee bank and a drawer customer” when a check is paid on a forged drawer’s signature. Cumis Insurance Society, Inc. v. Girard Bank, 522 F.Supp. 414, 419 (E.D.Pa.1981).

While the Cumis opinion provides an excellent summary of Pennsylvania law in this area, it must be read in its entirety. Immediately after the reference to “strict liability” which was quoted by the court below, the Cumis opinion made the following additional observation: “Under the Code scheme, the drawee bank can escape liability if the drawer is: (1) precluded from denying the validity of the signature (13 Pa.C.S.A. § 3404(a)); (2) negligent in allowing the forgery or negligent in not discovering it (13 Pa.C.S. §§ 3406 and 4406); (3) deemed to have ratified the unauthorized signature (13 Pa.C.S. § 3404(b)).” Cumis Insurance Society, Inc. v. Girard Bank, supra, 522 F.Supp. at 419-20 (citation and footnote omitted). Here the bank raised defenses under both section 3406 and 4406, and plaintiff did not meet the standard for summary judgment under Rule of Civil Procedure 1035 with respect to these defenses.

Summary judgment should be entered only “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Pa.R.C.P. 1035. In deciding whether this is so, a court must view the evidence in the light most favorable to the non-moving party, and enter judgment only if the case is clear and free from doubt.

Berardi v. Johns-Manville Corporation, 334 Pa.Super.Ct. 36, 38, 482 A.2d 1067, 1068-69 (1984) (citations omitted).

Plaintiff contends he was entitled to summary judgment because the factual situation in his case is essentially the same as in Hardex-Steubenville Corporation, Inc. v. Western Pennsylvania National Bank, supra. We agree that the fact pattern of Hardex-Steubenville is essentially almost identical to the facts here, but because of the differing procedural postures of the two cases, the similarity of the fact pattern tends to support the bank’s position, rather than plaintiff’s. The Court in Hardex-Steubenville did not grant summary judgment to the plaintiff there, but reversed a jury verdict for the defendant and remanded for a new trial, because the trial judge had erroneously instructed the jury that if both parties were negligent, they would have to find for the bank. 446 Pa. at 452 & n. 5, 285 A.2d at 877-78 & n. 5. The new trial was granted because of this incorrect instruction regarding the jury’s findings of negligence, but the questions of whether the bank or the plaintiff or both were in fact negligent were clearly to be left to the jury again in the retrial of the case. Plaintiff here would have us do precisely the opposite of Hardex-Steubenville, by permitting summary judgment, thus preventing the issue of the bank’s negligence (or any other issue) from being presented to a trier of fact.

In claiming that we can read this record in the light most favorable to the bank and still find that it is clear and free from doubt that the bank has no defense, the plaintiff relies solely on a single paragraph of an affidavit filed by a senior security officer of the defendant bank. That paragraph states as follows:

7. [The bank’s] tellers ordinarily check and compare the signature appearing on any check drawn against one of its customer’s accounts when presented for cash at a teller’s window with the signature on a customer’s signature card. However, when an agent of the customer, such as [plaintiff’s] bookkeeper, is authorized by the customer to negotiate checks this procedure is not repeated indefinitely. Once the tellers are advised by the customer that the agent has the authority to cash such checks, the teller does not continually check the signature card since the customer and the agent are well known at the branch. As pointed out above, [the bookkeeper] was well known to the tellers at the branch office where these checks were cashed and on several occasions had questioned [plaintiff] about [the bookkeeper’s] authority and in each case was advised that she had the authority.

In effect, plaintiff is asking us to hold that it is negligence per se for the bank to fail to check the signature card and compare it with every check presented for cash by the plaintiff’s admittedly authorized agent, regardless of the volume of checks involved or any other circumstances. The principal case which plaintiff relies, Hardex-Steubenville, supra, does not explicitly reject this claim, because it does not appear to have been raised in those precise terms, but a careful reading of Hardex-Steubenville does strongly indicate that rejection of plaintiffs argument would follow from the reasoning of Justice Pomeroy’s opinion for the Court in that case. That opinion discussed the evidence of the bank’s negligence as follows:

At trial the Customer introduced testimony tending to show that the Bank had been negligent in honoring the forged checks. The Bank introduced testimony to the contrary and showing that düring the period involved it had sent to the customer regular monthly statements of its accounts, together with the Customer’s cancelled checks for each month.

Hardex-Steubenville Corporation, Inc. v. Western Pennsylvania National Bank, supra, 446 Pa. at 449, 285 A.2d at 876. The only factor specifically identified in this discussion as bearing on the issue of the bank’s negligence is the bank’s evidence showing that statements a'nd cancelled checks were sent monthly by the bank to the customer. In the case before us, the plaintiff concedes that the bank did this much, and more.

An even stronger indication that the Hardex-Steubenville opinion necessarily leads to rejection of plaintiff’s argument is that the discussion of the undisputed facts in Hardex-Steubenville, 446 Pa. at 448, 285 A:2d at 875-76, clearly shows that the bank in that case had signature cards for the corporation’s president, whose signature was being forged by the corporation’s office manager, yet the bank never discovered the forgeries during the nearly three-year period that the forged checks were being cashed. If plaintiff’s argument concerning the signature cards were correct, the issue of the bank’s negligence should have been taken from the jury, but instead the Court remanded so that the issue could be submitted to the jury again at the retrial. Likewise, the record here presents a triable issue of material fact as to whether the bank was negligent so as to vitiate its section 4406 defense, and summary judgment should not have been granted.

Summary judgment was also incorrect because there is still an issue of material fact as to the bank’s defense under section 3406 of the Uniform Commercial Code, which provides:

Any person who by his negligence substantially contributes to a material alteration of the instrument or to the making of an unauthorized signature is precluded from asserting the alteration or lack of authority against a holder in due course or against a drawee or other payor who pays the instrument in good faith and in accordance with the reasonable commercial standards of the business of the drawee or payor.

13 Pa.C.S. § 3406. Plaintiff does not even argue, much less present any evidence of record, that the bank failed to act in accordance with the reasonable commercial standards of its business. Instead, plaintiff relies on the following statement in a case from Tennessee:

It is argued on behalf of the Bank that such examination of the signature card, which was not made in the instant case, is not practical under modern banking methods. Such may be true as a practical matter, but, if so, the Bank, because of that fact, cannot escape the consequences and must ... be held guilty of negligence.

Jackson v. First National Bank of Memphis, Inc., 55 Tenn.App. 545, 403 S.W.2d 109, 113 (Tenn.1966).

Even if we accepted the reasoning of the Jackson court, it could at most apply to the bank’s section 4406 defense, which could be rendered ineffective under section 4406(c) if plaintiff established the bank’s negligence. It would be a contradiction in terms, however, for us to accept the proposition that a bank could be deprived of a section 3406 defense because of conduct which is in accordance with reasonable commercial standards, since that is part of the definition of the section 3406 defense.

Finally, we must also reject the Jackson reasoning with respect to the section 4406 defense, although the point is not quite so clear-cut as under section 3406. Jackson is totally inconsistent with the Pennsylvania Supreme Court’s strong implication in Hardex-Steubenville Corporation, Inc. v. Western Pennsylvania National Bank, supra, that failure to compare the signature cards with the checks cashed by a customer’s agent, who is authorized to cash checks but not to sign them, does not by itself constitute negligence under section 4406. Since there are several questions of material fact remaining to be tried, the order granting summary judgment to the plaintiff on the assumpsit count of his complaint cannot stand.

Order vacated, and ease remanded for trial.

      . Plaintiff made no claim for 17 other checks for which he had received both statements and cancelled checks more than a year before discovery and reporting the forgery. Plaintiff apparently recognized that 13 Pa.C.S. § 4406(d) presented an absolute bar as to those checks. See Hardex-Steubenville Corporation, Inc. v. Western Pennsylvania National Bank, 446 Pa. 446, 456-57, 285 A.2d 874, 880 (1971), reh’g denied (1972).

      . Section 5524(3) provides a two-year statute of limitations for "An action for taking, detaining or injuring personal property, including actions for specific recovery thereof." 42 Pa.C.S. § 5524(3).

      . “Item” is defined in Article 4 of the Uniform Commercial Code as follows: "Any instrument for the payment of money even though it is not negotiable but does not include money.” 13 Pa.C.S. § 4104(a). The term is more broadly defined than Article 3’s “Instrument,” which means: "A negotiable instrument,” 13 Pa.C.S. § 3102(a), but both terms include the checks involved here. See 13 Pa.C.S. § 3104(b)(2).

      . The apparent reason the Pennsylvania legislature substituted "item”, for "item(s)” in its version of the Uniform Commercial Code was that section 32 of the Statutory Construction Act of 1937, applicable at the time of enactment of the Code, provided: “The singular shall include the plural, and the plural, the singular." Act of May 28, 1937, P.L. 1019, art. Ill, § 32, reenacted as 1 Pa.C.S. § 1902. While this rule of statutory construction is not absolute, see, e.g., Commonwealth v. Goins, 508 Pa. 270, -, 495 A.2d 527, 533-34 (1985), it certainly applies to section 4406(c), since it is not “inconsistent with the manifest intent of the General Assembly.” 1 Pa.C.S. § 1901.

      . Plaintiff concedes that the bank contacted him to confirm the bookkeeper’s authority to cash the checks. Plaintiff denies the bank’s additional claim that plaintiff told the bank’s employees to stop bothering him about the bookkeeper, but for purposes of plaintiffs summary judgment motion, we must accept the position of the non-moving party, the bank.

      . Under section 3406, the bank must also pay the instrument in "good faith,” a requirement which is shared with the section 4406 defense. See 13 Pa.C.S. § 4406(a), (b)(2). (The checks involved here fall within the definition of “instrument,” as used in section 3406, and “item” or "items,” as used in section 4406. See note 3, supra.) "Good faith” is defined in the Uniform Commercial Code as: "Honesty in fact in the conduct or transaction concerned.” 13 Pa.C.S. § 1201. Plaintiff has also failed to establish on this record that the bank did not meet the Code’s subjective "good faith” standard in paying the forged checks.

      . The Hardex-Steubenville opinion did little to specify what constitutes negligence under section 4406. See text accompanying note 4, supra. The opinion also did nothing to clarify the distinction between negligence under section 4406 and failure to act in accordance with reasonable commercial standards under section 3406, because the section 3406 defense had been waived in that case. 446 Pa. at 456, 285 A.2d at 879. It may be that there is little practical distinction, since even the treatise writers tend to treat them as essentially equivalent. See, e.g., J. White & R. Summers, Uniform Commercial Code (1st ed. 1972), § 16-5, at 537, where a drawee bank which does not act in accordance with reasonable commercial standards is characterized as a "negligent drawee.” Whatever the differences may be, we certainly cannot find on this record that plaintiff has established either negligence or failure to comply with reasonable commercial standards to a degree which satisfies the “clear and free from doubt" standard required for summary judgment.


source: Caselaw Access Project

author: DEL SOLE, Judge:

license: Public Domain

text:
    499 A.2d 369
    Mary Lou LAZOR and Joseph E. Lazor, Her Husband, Appellants, v. George MILNE, Kenneth F. Andrew, James Earl France, Dean H. Bier, Charles Morgan, Joseph F. Mashione, Thomas J. Palamone, Eugene C. Pupilli, John Mozina, and Robert L. Walters.
    Superior Court of Pennsylvania.
    Argued June 19, 1985.
    Filed Oct. 4, 1985.

      Daniel M. Berger, Pittsburgh, for appellants.
    Bernard W. O’Keefe, Pittsburgh, for appellees.
    Before ROWLEY, OLSZEWSKI and DEL SOLE, JJ.
   DEL SOLE, Judge:

The issue raised in this appeal is whether the trial court erred in sustaining Appellee’s preliminary objections. The trial court concluded that Appellant’s complaint failed to state a cause of action for intentional or negligent infliction of emotional distress. We affirm the order of the trial court and conclude that the preliminary objections were properly sustained.

When considering preliminary objections in nature of a demurrer, we must accept as true all well-pleaded material facts set forth in the complaint as well as all inferences reasonably deducible therefrom. Donnelly v. DeBourke, 421 A.2d 826, 280 Pa.Super. 486 (1980). Viewed in light of the above standard, the facts alleged in Appellants’ complaint indicate the following: Appellants, Joseph and Mary Lou Lazor, officers and members of the Board of Directors of the Club, sent Mary Lou Lazor a letter which stated:

It has been brought to the attention of the Board that you have been harassing employees, bringing your own food in the Club, and conducting yourself in the presence of new members in a manner prejudicial to the Club’s welfare. This is to advise you that unless this sort of conduct, which the Board considers to be injurious to the good order, welfare and character of the Club ceases, the Board will find it necessary to take disciplinary action.

The complaint avers that the allegations contained in this letter were false, and Appellees, who knew or should have known that the charges were false, refused to withdraw them or answer Appellant’s questions concerning these claims. Because of Appellees’ conduct Appellants have suffered, and may continue to suffer, severe emotional distress.

The tort of intentional infliction of emotional distress is an actionable wrong for conduct which can be characterized as extremely outrageous. Jones v. Nissenbaum, Rudolph & Seidner, 244 Pa.Super. 377, 368 A.2d 770 (1976). It is for the court to determine, in the first instance, whether the defendant’s conduct may reasonably be regarded as so extreme and outrageous so as to permit recovery. Restatement (Second) of Torts § 46, comment i. (1965).

Comment (d) of the Restatement (Second) of Torts § 46 describes the type of conduct which meets the requisites for liability:

It has not been enough that the defendant has acted with an intent which is tortious or even criminal, or that he has intended to inflict emotional distress, or even that his conduct has been characterized by “malice,” or a degree of aggravation which would entitle the plaintiff to punitive damages for another tort. Liability has been found only where the conduct has been so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community. Generally, the case is one in which the recitation of the facts to an average member of the community would arouse his resentment against the actor, and lead him to exclaim, “Outrageous!”

The conduct which is the basis for Appellant’s complaint consists of a letter. This letter was sent by the officers of a private club, while acting within their official capacity. It is clear from the contents of the letter that Appellees actions were in no way beyond the bounds of decency. Mrs. Lazor was merely informed, by means of a private letter, that certain general allegations had been made against her. The Board members advised Mrs. Lazor that it considered conduct such as “harassing employees” and “bringing your own food into the club” to be injurious to the Club’s welfare, and that disciplinary action would be taken if Mrs. Lazor conducted herself in such a manner in the future.

Even accepting as true Appellant’s allegations that the charges set forth in the letter were false, Appellants have failed to state a cause of action for intentional infliction of emotional distress. Major outrage is essential to the tort; and the mere fact that the actor knows that the other will regard the conduct as insulting or will have his feelings hurt is not enough. Restatement (Second) of Torts, supra, comment f. This case is not one where Appellants allege a planned program of harassment or threats. Nor, is this a case where the Appellees’ reprimand was so demeaning, or their conduct so threatening as to amount to extreme outrage.

The Restatement (Second) of Torts sets forth an example of such conduct.

A, the president of an association of rubbish collectors, summons B to a meeting of the association, and in the presence of an intimidating group of associates tells B that B has been collecting rubbish in territory which the association regards as exclusively allocated to one of its members. A demands that B pay over the proceeds of his rubbish collection, and tells B that if he does not do so the association will beat him up, destroy his truck, and put him out of business. A is subject to liability to B for his emotional distress and if it results in illness. A is subject to liability to B for his illness.
Restatement (Second) of Torts, supra, § 46, comment d, illustration 2.

The conduct complained of in the instant case differs greatly from that described in the above illustration. Here, Mrs. Lazor was reprimanded by means of a private letter, and not in the presence of a group of her peers. Further, the language used amounted to no more than a slight insult or indignity which must be tolerated. The only threat made by the Board was to take disciplinary action in the future if Mrs. Lazor committed the acts described by the Board as offensive. The Complaint does not allege that the Board is without the authority to take such action. We can only assume that the Board was acting in a permissible fashion and thereby, enabling a member to adjust her behavior so as to avoid the distress of a formal disciplinary proceeding. An actor is never liable where he has done no more than to insist upon his legal rights in a permissible way, even if he is aware that such insistence may cause emotional distress. Restatement (Second) of Torts, supra, § 46, comment g. See also: Thompson v. Sikov, 340 Pa.Super. 382, 490 A.2d 472 (1985).

We conclude that Appellant’s claim is not cognizable since the facts alleged clearly demonstrate that Appellees’ conduct fell far short of being so outrageous in character and so extreme in degree as to go beyond all possible bounds of decency.

Appellants further assert that their complaint states a claim for negligent infliction of emotional distress. We disagree. Appellants’ complaint fails to aver that there have been physical manifestations of the emotional distress that they have allegedly suffered. In Banyas v. Lower Bucks Hospital, 293 Pa.Super. 122, 437 A.2d 1236 (1981) this Court affirmed that part of a trial court order sustaining preliminary objections in the nature of a demurrer, and dismissing the complaint on a count alleging negligent infliction of emotional distress. The Banyas court held that there could be no cause of action for this tort because the plaintiff in his complaint sought recovery for severe mental anguish and emotional stress, but did not aver any physical harm. The Restatement (Second) of Torts § 436A was cited in Banyas as follows:

§ 436A. Negligence Resulting in Emotional Disturbance Alone
If the actor’s conduct is negligent as creating an unreasonable risk of causing either bodily harm or emotional disturbance to another, and it results in such emotional disturbance alone, without bodily harm or other compensable damage, the actor is not liable for such emotional disturbance.
Comment A to the Section explains that “Under the rule stated in this Section, the negligent actor is not liable when his conduct results in the emotional disturbance alone, without the bodily harm or other compensable damage.”

Banyas v. Lower Bucks Hospital, supra, 293 Pa.Super. at 128, 129, 437 A.2d at 1239. See also: Nye v. Com., Dept. of Transp., 331 Pa.Super. 209, 480 A.2d 318 (1984).

Finding no allegations of bodily harm in Appellants’ complaint, we conclude that Appellants’ failed to state a cause of action for negligent infliction of emotional distress.

Order affirmed.


author: FEENEY, Judge:

text:
    499 A.2d 372
    Donald A. JOHNSON and Rosella M. Johnson, Appellants, v. J. Calvin BAKER and Thelma L. Baker, His Wife; Larry C. Baker and Susan L. Baker, His Wife; William R. Baker and Susan K. Baker, His Wife and Interstate Milk Producers Cooperative Incorporated, Appellees.
    Superior Court of Pennsylvania.
    Argued March 20, 1985.
    Filed Oct. 11, 1985.

      Karen Pfeffer, Hollidaysburg, for appellants.
    Stephen L. Dugas, Johnstown, for appellees.
    Before BROSKY, ROWLEY and FEENEY, JJ.

       Judge John M. Feeney, of the Court of Common Pleas of Allegheny County, Pennsylvania is sitting by designation.

   FEENEY, Judge:

This is an appeal from an order entering summary judgment in favor of appellee, Interstate Milk Producers Cooperative Incorporated (“Interstate”), in an action in trespass.

In their Complaint in Trespass, appellants sought damages for injuries sustained by appellant Donald A. Johnson as the result of a fall outside a milkhouse at the farm of appellees, the Bakers. The Complaint asserted that Donald Johnson was removing raw milk from a bulk tank on the Bakers’ dairy farm as part of his job responsibilities at the time of the accident. Appellants claimed entitlement to damages from appellee Interstate on the basis that Interstate negligently failed to inspect the Bakers’ barn in contravention of regulations established by the Pennsylvania Department of Agriculture, thereby violating a duty to provide for the safety of appellant Donald Johnson while he was on the premises owned by the Bakers.

The sole issue presented by this appeal is whether the lower court erred in finding that no genuine issue of fact was presented and in concluding that appellee Interstate owed no duty to appellants so that summary judgment in favor of Interstate was warranted. After a thorough review of the record in this case, we agree with the finding and conclusion of the lower court and, accordingly, affirm.

Pursuant to Rule 1035 of the Pennsylvania Rules of Civil Procedure, summary judgment is to be entered only in cases where “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 judgment as a matter of law.” Pa.R.C.P. 1035(b). The moving party bears the burden of demonstrating that summary judgment is justified. Weiss v. Keystone Mack Sales, Inc., 310 Pa.Superior Ct. 425, 456 A.2d 1009 (1983). The responsibility of the trial court in disposing of a motion for summary judgment is to determine whether a genuine issue of material fact exists based upon an examination of the record in the light most favorable to the nonmoving party. Id.

The lower court in this matter, fully cognizant of its obligation in acting on a motion for summary judgment, found that, while appellee Interstate had a duty under the laws of this Commonwealth and regulations issued by the Department of Agriculture to inspect dairy farms for the purpose of providing for protection of the public health by safeguarding the sanitation of milk production facilities at such farms, the pertinent statutory and regulatory provisions as a matter of law imposed no duty on Interstate to inspect dairy farms for purposes of assuring the safety of persons in the position of appellant Donald Johnson while on such premises. 71 P.S. § 451; 31 P.S. § 645 et seq. ; 7 Pa.Code § 57.1 et seq.

In reviewing the record on appeal, this Court must accept as true all well-pleaded facts in the nonmoving party’s pleadings, giving the nonmoving party the benefit of all reasonable inferences to be drawn therefrom. Brophy v. Philadelphia Newspapers, Inc., 281 Pa.Superior Ct. 588, 422 A.2d 625 (1980). Having made such an evaluation of the record and having examined the relevant statutory and regulatory authority cited by appellants, we find it to be clear and free from doubt that no material question of fact was presented, and that, as a matter of law, appellants had no cause of action against Interstate. Consequently, we hold that the lower court did not err in granting summary judgment in favor of appellee Interstate Milk Producers Cooperative, Incorporated in this matter and affirm the entry of such judgment.

Order Affirmed.

      . Act of April 9, 1929, P.L. 177, art. XVII, § 1711, added July 2, 1953, P.L. 341, § 1.

      . Act of July 2, 1935, P.L. 589, § 1, et seq., as amended.


author: WIEAND, Judge:

text:
    499 A.2d 374
    Frank McDEVITT, Appellant, v. TERMINAL WAREHOUSE COMPANY and Scott Brothers, Division of Pennsylvania Truck Lines, Inc., Appellees.
    Superior Court of Pennsylvania.
    Argued Nov. 29, 1984.
    Filed Aug. 9, 1985.
    Reargument Denied Oct. 22, 1985.

      George J. O’Neill, Philadelphia, for appellant.
    Richard A. Kolb, Philadelphia, for Terminal Warehouse, appellee.
    Roger B. Wood, Philadelphia, for Pennsylvania Truck Lines, appellee.
    Before WIEAND, MONTEMURO and CERCONE, JJ.
   WIEAND, Judge:

If, in an action filed against a third party tortfeasor prior to February 5, 1975, an employee obtains a verdict allowing a joint recovery against the third party tortfeasor and the employer, who was joined as an additional defendant, may the employee recover any part of his counsel fees from the employer or from the third party tortfeasor? We conclude, in keeping with the general rule, that the employee must pay his own counsel fees.

Frank McDevitt, an employee of Scott Brothers, was injured on November 1, 1966 while working in a warehouse complex owned by Terminal Warehouse Co. (Terminal) in Philadelphia. He filed a third party action against Terminal who, in turn, joined Scott Brothers as an additional defendant. In 1978, a jury verdict was returned in the amount of $200,000.00 against Terminal and Scott Brothers. The trial court granted a new trial, but the Superior Court, on appeal, reversed the trial court and reinstated the verdict of the jury. McDevitt v. Terminal Warehouse Co., 304 Pa.Super. 438, 450 A.2d 991 (1982) (reargument denied October 12, 1982; allocatur denied October 29, 1982). Judgment was entered on the verdict on November 12, 1982. Terminal then filed a petition to modify the judgment, requesting that it be reduced by workmen’s compensation benefits previously paid by Scott Brothers in the amount of $39,-012.26. The trial court refused to modify the judgment and dismissed Terminal’s petition. After an appeal had been filed, the trial court prepared a written opinion in which it conceded that under existing law it was required to satisfy the judgment to the extent that workmen’s compensation benefits had been paid by the employer. The Superior Court remanded, and a partial satisfaction of the judgment was entered. McDevitt then appealed from the order directing partial satisfaction of the judgment.

While this appeal was pending in the Superior Court, McDevitt caused a writ of execution to issue against the employer’s compensation carrier for $20,437.60. This was alleged to be a proportionate part of ■ McDevitt’s counsel fees and expenses for which Scott Brothers was liable in addition to benefits previously paid. The trial court, in response to preliminary objections, ordered that the execution be dismissed and that the judgment against Scott Brothers, which had been entered on the verdict of the jury, be marked satisfied. McDevitt filed a second appeal from this order. Both appeáls were consolidated for argument.

Appellant argues that the satisfaction orders were improper because they failed to reflect an alleged right of the employee to be reimbursed in part for counsel fees and expenses incurred in prosecuting his third party action. The amount of $20,437.60, according to McDevitt’s computations, represents the proportionate part of counsel fees and expenses attributable to the workmen’s compensation benefits paid by Scott Brothers and “credited” to Terminal in determining the amount of Terminal’s liability. Unless this portion of McDevitt’s counsel fees and expenses can be collected from Scott Brothers or Terminal, McDevitt will be required to pay this amount. This, it is argued, is contrary to the provisions of Section 319 of the Workmen’s Compensation Act. We disagree and, therefore, affirm the satisfaction orders of the trial court.

As a general rule, each party must pay his own counsel fees. Hankin v. Hankin, 338 Pa.Super. 442, 457, 487 A.2d 1363, 1371 (1985). In the absence of a statute allowing counsel fees, recovery of such fees will be permitted only in exceptional circumstances. Chatham Communications, Inc. v. General Press Corp., 463 Pa. 292, 300-301, 344 A.2d 837, 842 (1975); Estate of Wanamaker, 314 Pa.Super. 177, 179, 460 A.2d 824, 825 (1983). One of the exceptional situations in which an apportionment of counsel fees will be made is where the work of counsel has created a fund for the benefit of others. Estate of Wanamaker, supra, 314 Pa.Superior Ct. at 179, 460 A.2d at 825. Accord: Wilbur’s Estate, 334 Pa. 45, 73-74, 5 A.2d 325, 339 (1939). The exception to the general rule “rests on the perception that persons who obtain the benefit of a lawsuit without contributing to its cost are unjustly enriched at the successful litigant’s expense.” Estate of Wanamaker, supra 314 Pa.Super. at 180, 460 A.2d at 825, quoting The Boeing Co. v. Van Gemert, 444 U.S. 472, 478, 100 S.Ct. 745, 749, 62 L.Ed.2d 676, 682 (1980).

It is this exception to the general rule which is the basis for the apportionment of counsel fees required by Section 319 of the Workmen’s Compensation Act. This section provides in part as follows:

Where the compensable injury is caused in whole or in part by the act or omission of a third party, the employer shall be subrogated to the right of the employe, his personal representative, his estate or his dependents, against such third party to the extent of the compensation payable under this article by the employer; reasonable attorney’s fees and other proper disbursements incurred in obtaining a recovery or in effecting a compromise settlement shall be prorated between the employer and employe, his personal representative, his estate or his dependents. The employer shall pay that proportion of the attorney’s fees and other proper disbursements that the amount of compensation paid or payable at the time of recovery or settlement bears to the total recovery or settlement. Any recovery against such third person in excess of the compensation theretofore paid by the employer shall be paid forthwith to the employe, his personal representative, his estate or his dependents, and shall be treated as an advance payment by the employer on account of any future installments of compensation.

(Emphasis added). According to this section, an employer who has paid workmen’s compensation benefits is entitled to be subrogated to the extent of workmen’s compensation paid in any recovery effected by the employee against a third party. Where the employer participates in the employee’s recovery, the employer must then pay a proportionate part of counsel fees incurred in effecting the third party recovery. Long v. Marino Masse, Inc., 205 Pa.Super. 344, 349, 208 A.2d 920, 923 (1965); Furia v. Philadelphia, 180 Pa.Super. 50, 118 A.2d 236 (1955). The portion of counsel fees to be paid by the employer is ascertained according to the ratio existing between workmen’s compensation paid or payable and the total recovery or settlement. The employer’s obligation to share the burden of attorney’s fees and expenses is determined according to the benefit which he has derived from the employee’s recovery against the third party. Soliday v. Hires Turner Glass Co., 187 Pa.Super. 44, 51, 142 A.2d 425, 428 (1958). See also: Workmen’s Compensation Appeal Board v. Del Vecchio, 23 Pa. Cmwlth. 244, 248, 351 A.2d 691, 693 (1976). Where an employer is determined to be liable as a joint tortfeasor and is required to “contribute” his workmen’s compensation obligation to the total verdict, however, the employer is not entitled to recover any part of the workmen’s compensation paid. In that event, he forfeits his right to subrogation and does not benefit from his employee’s recovery against the third party. Lee v. United States Plywood Corp., 299 Pa.Super. 165, 168 n. 2, 445 A.2d 506, 507 n. 2 (1982).

In the absence of statutory direction otherwise, an employer is not responsible in whole or in part for his employee’s counsel fees where he does not share in the employee’s recovery. Where the employer does not benefit from the third party recovery, Section 319 does not require the employer to pay any part of the counsel fees incurred by the employee in effecting a third party recovery.

Appellant argues, however, that he should be allowed to recover the full verdict of $200,000.00 against Terminal and that Terminal should be required thereafter to enforce its right of contribution against Scott Brothers, who, in its turn, can recover compensation paid, less a proportionate part of the employee’s counsel fees, from the fund created by the employee. If this “round robin” method of satisfaction is followed, of course, the employee will be able to recover a proportionate part of his counsel fees from the employer. We reject this argument. It is contrary to the intent of the Workmen’s Compensation Act and also to the decided cases.

In Maio v. Fahs, 339 Pa. 180, 14 A.2d 105 (1940), the Supreme Court held that an employer could be joined as an additional defendant in the employee’s third party action in order to protect the third party’s right of contribution if it were determined that he and the employer were joint tortfeasors. The Court recognized, however, that the employer’s maximum liability, by virtue of the terms of the Workmen’s Compensation Act, was the amount which he was required to pay to his employee as workmen’s compensation. Therefore, the Court held, an employer defendant who has paid maximum workmen’s compensation benefits is entitled to have the employee-plaintiff’s judgment against him satisfied. With respect to the third party joint tortfeasor, the Court said, his liability is limited to the amount of the verdict less the amount of workmen’s compensation paid by the employer. To the extent that maximum benefits had not been paid by the employer, the third party tortfeasor was entitled upon payment to have the judgment marked to his use and he, instead of the employee-plaintiff, could enforce the judgment against the employer to preserve his right of contribution up to the employer’s maximum liability for workmen’s compensation.

Subsequent decisions followed in the path of Maio v. Fahs, supra. Thus, in Socha v. Metz, 385 Pa. 632, 123 A.2d 837 (1956), the Court held unequivocally that “[a]n employer’s liability to his employee for compensation under the Workmen’s Compensation Act for injuries received by the employee in the course of his employment ... is the whole liability under the parties’ statutory agreement to be bound by the provisions of the Act, and ... the injured employee has no other right of action.” Id., 385 Pa. at 637, 123 A.2d at 839 (emphasis in original). Joinder of an employer in an employee’s third party action, the Court said, was allowed only to protect the third party’s right of contribution. Because any judgment entered in favor of the employee against the employer was unenforceable by the employee, the Court held, equity demanded that the employee’s execution against the employer on the judgment be denied and that the judgment be marked satisfied on petition of the employer. Id., 385 Pa. at 642-643, 123 A.2d at 842.

In John W. Brown, Jr. Equipment Rental Corp. v. Dickey, 397 Pa. 454, 155 A.2d 836 (1959), the Supreme Court reiterated and reinforced the same principle, holding that an employer’s liability to either his employee or a third party for contribution “[was] strictly limited to the amount of the workmen’s compensation award.” Id., 397 Pa. at 459, 155 A.2d at 838 (emphasis in original). “To allow the third party tortfeasor even the limited right of contribution up to the amount of the employer’s workmen’s compensation liability, as we do in Pennsylvania, is most generous indeed,” said the Court. “He is not so well treated in other jurisdictions.” Id., 397 Pa. at 462, 155 A.2d at 840.

The following year, the Superior Court decided Stark v. Posh Construction Co., 192 Pa.Super. 409, 162 A.2d 9 (1960) (allocatur denied August 22, 1960). That case, a tort action by Stark against a third party tortfeasor in which the employer had been joined as an additional defendant, resulted in a judgment in favor of Stark against both defendants. The employer had previously paid some, but not maximum, workmen’s compensation benefits. The third party tortfeasor, therefore, paid Stark the difference between the workmen’s compensation already paid by the employer and the face amount of the judgment. The employer then requested the Workmen’s Compensation Board to terminate the compensation agreement on the ground that Stark’s recovery from the third party precluded any further payments. The employer also argued that under Section 319 it was subrogated to the rights of its employee against the third party to the extent of the compensation previously paid and payable in the future to Stark. The third party tortfeasor, in response, alleged that he had a right to receive all future installments of compensation on the ground that he was subrogated to Stark’s right to receive future payments because the judgment had been paid in full. The Superior Court agreed with the third party tortfeasor. Citing Maio v. Fahs, supra, and Brown v. Dickey, supra, the Court held that it was well-settled that because of considerations of equity and good conscience and also because of interpretations of the Workmen’s Compensation Act and the Uniform Contribution Among Tortfeasors Act, an employer found to be jointly responsible for his employee’s injuries was liable to pay to the third party tortfeasor by way of contribution the amount which it was obligated to pay under the Workmen’s Compensation Act. It would be unfair to allow the employer to pay nothing, opined the Court, when he has been found jointly negligent. Instead of being reimbursed by way of subrogation for his negligence, he must pay to his joint tortfeasor an amount equal to that which was imposed upon him as an employer, but no more. The employer was ordered, therefore, to make all future payments of compensation under its compensation agreement to the third party joint tortfeasor who had paid Stark’s judgment in full.

In Hinton v. Waste Techniques Corp., 243 Pa.Super. 189, 364 A.2d 724 (1976), this Court said that a workmen’s compensation defense may properly be raised by an employer in any proceeding brought by the plaintiff-employee to enforce a judgment rendered against the employer who had been joined in the action as an additional defendant. “At that time,” said the Court, “the employer is entitled to have the judgment marked satisfied.” Id., 243 Pa.Superior Ct. at 195, 364 A.2d at 727.

Finally, in Lee v. United States Plywood Corp., 299 Pa.Super. 165, 445 A.2d 506 (1982) (reargument denied June 9, 1982; allocatur denied September 9, 1982), the Superior Court rejected the “round robin” theory of resolving the rights of an employer and third party who had been found to be joint tortfeasors. There, plaintiffs had filed an action against two alleged tortfeasors, who then joined plaintiffs’ employer as an additional defendant. All defendants, including the employer, were found negligent. In garnishment proceedings brought on the judgment against one of the non-employer defendants, a credit was requested for the amount of workmen’s compensation benefits previously paid to plaintiffs by the employer. The trial court denied the request, and the defendant paid the judgment in full. The defendant then brought an action in which it successfully recovered contribution from the employer in the amount of workmen’s compensation paid to the plaintiffs. On appeal, the Superior Court held that “a defendant who has been held jointly liable with an additional defendant employer is entitled to a credit for the amount of compensation paid by the employer to the plaintiff.” Id., 299 Pa.Superior Ct. at 169, 445 A.2d at 508 (emphasis in original). It was held that the trial court had erred, therefore, in not allowing the third party defendant a credit in the amount of the employee-joint tortfeasor’s compensation paid. The trial court had then compounded the error, the Court held, by requiring the employer to pay its workmen’s compensation obligation a second time. Once an employer has complied with his statutory obligation to pay workmen’s compensation, the Court held, there can be no further liability. If the trial court’s handling had been correct, the Court said, the employer would have had to pay twice with no recourse against the employee because the subrogation interest of the employer was forfeited when he was found causally negligent in contributing to the injuries of its employee.

Although none of these decisions resolve the specific issue of counsel fees which is presented in the instant appeal, they do stand for the principle that an employer, prior to February 5, 1975, could not be required to pay an amount greater than his liability under the Workmen’s Compensation Act. The statute requires the employer to pay a proportionate part of his employee’s counsel fees only to the extent that the employer has been able to recover via subrogation the benefits previously paid to the employee as workmen’s compensation. It seems clear, therefore, that there is no statutory authority for assessing counsel fees against the employer where the employer’s right of subrogation has been forfeited by his own negligence.

We acknowledge that by a split decision, the Court of Appeals for the Third Circuit reached a contrary result. See: Grimm v. O.K. Keckley Co., 555 F.2d 123' (3d Cir. 1977). A majority of the Court held that an employer, who had forfeited his right of subrogation for workmen’s compensation already paid because of his own negligence, was nevertheless required to pay a portion of the counsel fees voluntarily incurred by the employee in order to effect a third party recovery. A similar ruling was made by a panel of the Commonwealth Court in Frank Irey, Jr., Inc. v. Workmen’s Compensation Appeal Board, 67 Pa.Cmwlth. 512, 519, 448 A.2d 647, 650-651 (1982) (allocatur denied November 5, 1982). These decisions, in effect, required the employer to pay an amount in excess of his maximum liability for workmen’s compensation. This was directly contrary to the expressed intent of the legislature in the Workmen’s Compensation Act. These decisions, moreover, cannot be squared with prior decisions of this Court and the Pennsylvania Supreme Court. Therefore, we decline respectfully to accept the rule espoused by a majority of the Court in Grimm and followed by the Commonwealth Court in Irey.

McDevitt argues in the alternative that the credit which Terminal is entitled to receive against the total verdict because of compensation previously paid by the employer should be reduced by a proportionate part of his counsel fees. This was the view expressed in a concurring opinion by Judge Hunter in Grimm v. O.K. Keckley Co., supra. The decided cases, however, have determined that “a defendant who has been held jointly liable with an additional defendant is entitled to a credit for the amount of compensation paid by the employer to the plaintiff.” Lee v. United States Plywood Corp., supra 299 Pa.Super. at 169, 445 A.2d at 508 (emphasis deleted). If we were to accept appellant’s argument, moreover, the effect of our holding would be to compel a defendant in a negligence action to pay counsel fees to a successful plaintiff. This is contrary to the rule which, in the absence of extraordinary circumstances, requires each party to pay his or her own counsel fees.

The fundamental flaw in all of appellant’s arguments is his assumption that an employee who has successfully maintained a third party action on a cause arising before February 5, 1975 is entitled to be reimbursed for some or all of his counsel fees. Once we accept the fundamental principle that each party is responsible for his own counsel fees, the decision in this case is clear. Such a result cannot be perceived as being unjust or unfair. The employee-plaintiff’s damages were in the amount of $200,000.00. Of this amount, the sum of $39,012.26 was paid to him as workmen’s compensation, presumably without the need to employ counsel. The difference needed to make him whole was recovered from the third party tortfeasor as a result of an action prosecuted by counsel. For the work effort expended on the employee’s behalf, counsel is entitled to be compensated by his client. We do not know and do not express any opinion regarding the fee agreement between counsel and his client. It may be observed, however, that contingent fee agreements, to be reasonable, are generally required to be based upon the amount of actual recovery and not on the amount of a verdict. Miernicki v. Seltzer, 312 Pa.Super. 166, 172, 458 A.2d 566, 569 (1983), affd, 505 Pa. 323, 479 A.2d 483 (1984). Thus, it is entirely reasonable and in accord with sound legal principles that appellant should be required to pay the fees of counsel who was able to recover from the third party an amount in excess of the workmen’s compensation payments which the employee already had in hand. This is no more than is required of every plaintiff who successfully pursues an action to recover damages for personal injuries.

It is conceded by all parties that Scott Brothers paid in full its obligations under the Workmen’s Compensation Act. The law is clear, therefore, and the trial court correctly held, that Scott Brothers is entitled to have the judgment against it marked “satisfied.” See: Hinton v. Waste Techniques Corp., supra 243 Pa.Super. at 195, 364 A.2d at 727. See also: Socha v. Metz, supra 385 Pa. at 642-643, 123 A.2d at 842. The order directing partial satisfaction of the judgment against Terminal will also be affirmed.

Orders affirmed.

      . The present section 303(b) of the Workmen’s Compensation Act, which was a part of the Act of December 5, 1974 and became effective February 5, 1975, provides that the employer and his insurance carrier shall not be liable to a third party for damages, contribution or indemnity in any action at law, or otherwise, unless such liability is expressly assumed by contract. This section has been construed to bar joinder of an employer as an additional defendant in a third party action for purposes of establishing joint liability with the third party tortfeasor. See: Heckendorn v. Consolidated Rail Corp., 502 Pa. 101, 465 A.2d 609 (1983). Joinder is barred, however, only where the employee’s injuries occurred subsequent to February 5, 1975. Bell v. Koppers Co., 481 Pa. 454, 459, 392 A.2d 1380, 1382-1383 (1978).

      . McDevitt died on October 31, 1978, and Ruth McDevitt, his widow and the executrix of his estate, was substituted as a party plaintiff.

      . Act of June 2, 1915, P.L. 736, § 319, as amended, 77 P.S. § 671.

      . Act of July 19, 1951, P.L. 1130, 12 P.S. § 2082 et seq., repealed and substantially reenacted, Act of July 9, 1976, P.L. 586, 42 Pa.C.S. § 8321 et seq.

      . This assumption is based on the fact that in this case there is no evidence that appellant or her decedent incurred any counsel fees in recovering workmen’s compensation benefits following McDevitt’s accident.