author: SMYTH, J.,

text:
    Commonwealth v. Moore

      C.P. of Montgomery County,
    No. 1234-2005

      Robert Martin Falin, for Commonwealth.

      Barry Moore, pro se.
    July 21, 2014
   SMYTH, J.,

— Defendant Barry Moore has filed a third petition for post-conviction collateral relief under the Pennsylvania Post Conviction Relief Act (PCRA), 42 Pa.C.S. §§ 9541-9546, challenging his plea of guilty and judgment of sentence in the above-captioned case. The case has a long and convoluted history, which we will relate here to the extent necessary to illuminate our decision to grant the petition, in part, and deny it, in part, without a hearing.-

We originally sentenced defendant in July 2005 on guilty pleas entered before us in this case as well as in several others docketed at separate numbers. In addition, consolidated before us for sentencing along with the cases in which we had taken pleas were several charges heard by Judge Moore of our court to which defendant had pled guilty or of which he had been found guilty after trial; defendant consented to be sentenced for all the charges at one proceeding before the undersigned. (Guilty Plea Tr. 21-22, July 21, 2005.)

The most significant of our cases for purposes of sentencing discussed at the hearing on the guilty pleas were the charge, captioned above, of delivering 12.22 grams of cocaine to a confidential informant, and the charges, captioned at no. 545-05, of, on a prior day, possessing over 19 grams of cocaine for delivery (and also possessing an loaded semi-automatic pistol without a license); on these two drug offenses, the Commonwealth sought mandatory minimum sentences of at least three to six years in prison with possible exposure to five to ten years on each. (Guilty Plea Tr. 11-25.) The Commonwealth discussed, on the record of the guilty pleas before us, applying a third mandatory minimum three-to-six-year sentence to one of the cases heard by Judge Moore, also involving possession with intent to deliver. (Guilty Plea Tr. 12-14, 26-27.)

In a colloquy with his counsel during the guilty pleas before the undersigned, defendant acknowledged his pleas were “open,” meaning not negotiated with the Commonwealth and with sentencing to be left up to the court. (Guilty Plea Tr. 9.) In the same colloquy, defendant acknowledged the three-to-six-year mandatory minima below which the court could not sentence (Guilty Plea Tr. 11) and that, “You also understand the maximum charges I told you in all of your cases that you could get and the judge could run those consecutive if he chose.” (Guilty Plea Tr. 11:20-24 (emphasis added).) In a follow-up colloquy with the court, defendant answered affirmatively the question, “But you know your maximum exposure, your lawyer explained that to you?” (Guilty Plea Tr. 18:23-19:2) and indicated he understood that though the Judge could not go below the mandatory minimums he could exceed them and sentence up to the maximum (Guilty Plea Tr. 20). After the colloquies of defense counsel and the court, the prosecutor reiterated to defendant,

[Y]ou understand, Mr. Moore, that what the Judge was trying to explain to you was that these cases could be run concurrent, they could be run consecutive. It will be the Judge’s determination whether or not these cases run concurrent or consecutive— So just in talking with the mandatories, you have three cases altogether you have three three [-]to [-]six[~]y ear mandatories and his honor could run those consecutive alone.

(Guilty Plea Tr. 25:22-26:8 (emphasis added); see also Guilty Plea Tr. 26-27.)

At defendant’s sentencing hearing the following week, July 26, 2005, we proceeded to sentence defendant both on his guilty pleas before us, and on the prior cases before Judge Moore. We had the benefit of a presentence investigative report prepared for Judge Moore’s cases; we also heard the testimony of a Commonwealth’s witness, a police officer familiar with defendant, relating his extensive and sometimes violence-tinged involvement with law enforcement despite his youth. (He was nineteen when committing the crimes at bar.) Defendant declined to exercise his right to allocution, except to disagree with the officer’s appraisal of defendant’s criminal involvement. Counsel then argued for sentencing leniency in the form of concurrent sentences, while the prosecutor contended for consecutive sentences, maintaining she could have pursued five-to-ten-year mandatory sentences rather than the three-to-six-year sentences actually sought. (Sentencing Tr. 16-21, July 26, 2005.)

Weighing the competing considerations, the court prefaced its sentence as follows:

[AJfier reading the PSI and going over the facts again of these cases, and hearing the arguments, I am not sentencing Barry Moore as though he were a violent person. I’m looking strictly at the drug crimes involved.

As your attorney so aptly noted, Barry Moore is a drug dealer. (Sentencing Tr. 22:13-20.) That said, we considered the serial and serious nature of the drug crimes and that two of the offenses bearing the mandatory minima were committed remorselessly while defendant was out on bail for the previous offense. (Sentencing Tr. 25-26.)

On the drug offenses with mandatory minimum sentences to which defendant had pled guilty before us, we sentenced him in the above-captioned case (No. 1234-OS) to the mandatory minimum of three to up to ten years in prison and ran that sentence consecutive to an identical sentence in no. 545-05. We also gave defendant one to seven years on the charge of possessing an unlicensed firearm at no. 545-05 and one to ten years on the drug charge at no. 2202-04 (the case tried before Judge Moore), as terms of imprisonment fashioned to run concurrently with each other and with the consecutive sentences just mentioned.

We thus pronounced at sentencing our intention to impose an aggregate term of imprisonment of six to twenty years (Sentencing Tr. 24-25:7-8) with commitment on all charges to date from the date of initial incarceration, December 22, 2004. Unfortunately, the sentence on the principal (drug) offense at no. 545-05 came to be transcribed as three to twenty years, raising the aggregate prison term to six to thirty years, an error the raising and correcting of which we will touch upon shortly.

In addition to the terms of incarceration just discussed, we imposed the following terms of probation: On three other cases that had arisen from open guilty pleas before Judge Moore (Nos. 6107-03, 8516-03, & 389-04), we imposed three consecutive probationary terms of one year, to commence the date of sentencing, July 26, 2005; and on two other charges to which defendant had pled open before us (Nos. 9745-04 & 9748-04), we imposed further probationary terms of one and seven years, respectively, consecutive to each other and to the probations on the Judge Moore cases. (Sentencing Tr. 22-24.) Thus the total length of the consecutive probationary terms was eleven years, starting July 26, 2005.

Defendant did not directly appeal from our original sentencing scheme; instead a year later he filed a petition under the PCRA (his first such petition) collaterally attacking the pleas in nos. 545-05 and 1234-05 (this case), claiming counsel had promised him he would face only three to six years in prison (contrary to the record we have just reviewed). (Pet. post-conviction collateral relief paras. 4, 7, July 31, 2006.) This court appointed the public defender to represent defendant on his first post-conviction petition in accordance with Pa.R.Crim.P. 904(C). Eventually the public defender moved to withdraw under Commonwealth v. Finley, 379 Pa. Super. 390, 550 A.2d 213 (1988) (en banc), based on lack of merit to the petition, and we granted counsel’s motion to withdraw and entered a final order dismissing the petition. Defendant appealed our order to the Superior Court of Pennsylvania, which vacated our order allowing counsel’s withdrawal and denying relief and remanded the case for the filing of an advocate’s brief and a hearing on two issues the court had discovered and deemed to be of “arguable merit.” Commonwealth v. Moore (Moore I), 964 A.2d 441 (Pa. Super. Ct. 2008) (unpublished table decision). One of the issues found to be of arguable merit was whether defendant’s plea on no. 545-05 was invalid as unknowing and involuntary in that he was never informed before entering the plea that he could face a twenty-year maximum term of imprisonment, Moore I, no. 2370 EDA 2007, slip op. at 5, which the court found to have been the sentence actually imposed, id., slip op. at 1.

By the time the Superior Court remanded the case, the public defender we had appointed to the case and later allowed to withdraw had left that office, so to fulfill the Superior Court’s mandate, we appointed another to file an advocate’s brief, and convened the ordered hearing. After considering the testimony presented at the hearing, including that of defendant’s counsel on the plea that he had advised defendant of a twenty-year maximum sentence, we denied relief on the issues identified by the Superior Court, and defendant, this time still represented by the public defender, again appealed to that court.

In our opinion under Pa.R.A.P. 1925, we disposed of the issues raised by the Superior Court’s remand, including the claim defendant’s plea was invalid because he had not been advised of a twenty-year maximum sentence. However, our opinion also, sua sponte, raised and discussed the possibility that a twenty-year sentence was actually beyond the statutory maximum ten years in prison 35 P.S. § 780-113(f)(l.l) prescribed for the offense to which defendant had pled at no. 545-05, citing Commonwealth v. Rush, 959 A.2d 945 (Pa. Super. Ct. 2008), for the proposition that a sentence beyond statutory limits is an illegal sentence that cannot be waived and may be raised at any time. Commonwealth v. Moore (Moore II), nos. 545-05 & 1234-05, slip op. at 4, 9-12 (Pa. C.P. Montg. County Jan. 17, 2010), aff’d. in part, vacated in part, 22 A.3d 1065 (Pa. Super. Ct. 2010) (unpublished table decision). We suggested that if the Superior Court agreed that the twenty-year maximum sentence was illegal, that court remand the case for resentencing to reflect our original sentencing scheme on all the charges. We did not mention in our opinion, because the record was unclear, the possibility that the sentence we imposed may actually have been two legal three- to ten-year terms of imprisonment for an aggregate term of incarceration of six to twenty years (Sentencing Tr. 24-25:7-8) that was inadvertently wrongly recorded.

The Superior Court in Moore II rejected the issue defendant raised on appeal claiming he had not been advised of a possible maximum sentence of twenty years on no. 545-05, so that the aggregate terms of imprisonment of six to thirty years were consequences he had been alerted to before entering his plea and did not render it unknowing and involuntary. However, the court concurred with us, and with a second claim raised the public defender on appeal, that the maximum sentence of twenty years imposed in no. 545-05 had been illegal as beyond the statutory limits. The court therefore remanded the case for resentencing in accordance with our request, noting that resentencing on all the charges, not just the cases on appeal (nos. 545-05 & 1245-05), was within our power.

At a resentencing hearing, we lowered the sentence of imprisonment on no. 545-05 from three to twenty to three to ten years, and kept it consecutive to a three- to ten-year prison term imposed on no. 1234-05. To preserve our original sentencing scheme, however, we modified the concurrent prison term of one to ten years imposed in no. 2222-04 (a Judge Moore case) to a straight ten years’ probation, consecutive to the prison terms imposed on nos. 545-05 & 1234-05. We then proceeded to impose the probationary terms totaling eleven years we had originally imposed on the other five other cases stemming from guilty pleas before us or Judge Moore, but ran them consecutive to the new probationary term just imposed, stating that this disposition was in accordance with our original sentencing scheme. (Resentencing Tr. 7-8, Dec. 17, 2010.) Thus, the total aggregate reimposed sentence was six to twenty years in prison, followed by twenty-one years’ consecutive probation, for a total oí forty-one years’ supervision. (Resentencing Tr. 8.) We observed that the six-year aggregate minimum term of confinement was due to expire in about another week. (Resentencing Tr. 6, 8.)

Just as with the original sentencing decision, defendant did not timely appeal the resentencing decision. Instead, he later filed a second post-conviction petition, and we appointed counsel not associated with the public defender’s office to assist him on it. In that petition, and an amended petition filed by appointed counsel, defendant raised the issue (in nos. 545-05 & 1234-05 only) that counsel on the first post-conviction petition and at resentencing, the Montgomery County Public Defender, had failed to perfect an appeal from the resentencing despite his request. On March 23, 2012, we convened an evidentiary hearing on this issue, at which the parties appeared and agreed that rather than taking testimony upon the issue, the court should simply reinstate defendant’s right to appeal from the judgment of sentence imposed at the December 17, 2010, resentencing — although, at that point, we believed that all issues except those pertaining to the resentencing itself had been exhausted in the preceding appeal to the Superior Court, cf 42 Pa.C.S. §§ 9543(a)(3), 9544. We entered an order granting the right to appeal nunc pro tunc, and defendant appealed the resentencing order nunc pro tunc to the Superior Court.

Upon the filing of this appeal nunc pro tunc, we ordered appointed counsel, pursuant to Pa.R.A.P. 1925(b), to file a concise statement of the matters complained of on appeal, incorporating in our order the advice required by Pa.R. A.P. 1925(b)(3)(iv) that any issue not properly included in the statement would be deemed waived. In compliance with our order counsel filed a 1925(b) statement, raising the sole issue that defendant was entitled to a new trial on the ground that his guilty plea of July 21, 2005, was not entered on a knowing, voluntary, and intelligent basis because he was never advised, on or off the record, that he faced an aggregate maximum sentence of twenty years’ imprisonment.

We filed an opinion under Pa.R.A.P. 1925 finding defendant was not eligible for relief on this claim because it was previously litigated adversely to him, within the meaning of the PCRA, at the hearing on his first post-conviction petition (held pursuant to the Superior Court’s first remand of that petition) and on appeal to the Superior Court from our subsequent denial of that first petition after the hearing. We observed that the PCRA provides that, “To be eligible for relief under this subchapter [the PCRA], the petitioner must plead and prove by a preponderance of the evidence [inter alia] (3) That the allegation of error has not been previously litigated,” 42 Pa.C.S. § 9543(a) (3), and that for purposes of the PCRA, “an issue has been previously litigated if:... (2) the highest appellate court in which the petitioner could have had review as a matter of right has ruled on the merits of the issue; or (3) it has been raised and decided in a proceeding collaterally attacking the judgment of sentence.” 42 Pa.C.S. § 9544(a)(2)-(3). We wrote that both prongs of the test under the PCRA for previous litigation were satisfied: defendant, through the public defender, had raised the issue of his not having been advised of a twenty-year maximum sentence at the hearing on his first post-conviction petition, and again on appeal to the Superior Court (the highest appellate court to which he had an appeal as of right) from our (second) denial of that petition. Both this lower court and the Superior Court had decided the issue adversely to him in those proceedings. Before the Superior Court remanded the case in accordance with our suggestion for resentencing, the court first finally disposed of the issue defendant now raised in the appeal nunc pro tunc from that resentencing.

In the appeal nunc pro tunc from resentencing, appointed counsel sought the Superior Court’s permission to withdraw based on frivolousness of the appeal by filing a motion and brief under Anders v. California, 386 U.S. 739 (1967). The Superior Court granted counsel’s motion to withdraw, and affirmed the reimposed judgment of sentence. Commonwealth v. Moore (Moore III), 63 A.3d 833 (Pa. Super. Ct. 2012) (unpublished table decision). In the course of rejecting defendant’s claim on appeal that his original plea was invalid because he did not know he could face twenty years in prison, the court said,

[Djuring the 2009 appeal [Moore 77], appellant’s maximum incarceration was thirty years and he argued he had not been advised of that possible maximum. Now, his maximum incarceration is twenty years, and he contends he was not advised he faced that much time in prison. These changes, however, cannot be called substantial in the sense of undermining our earlier decision.
Indeed, if the factual changes have any impact on Appellant’s position, they militate against, not in favor, of allowing Appellant to mount a new challenge on the validity of his plea. We rejected as legally and factually inaccurate his claim that his plea was invalid because he allegedly did not know he could receive thirty years in prison; he now wants to argue the same plea was invalid because he allegedly did not know he could receive twenty. Appellant surely cannot be permitted to complain he did not know his penalty could reach an aggregate of twenty years when we have already decided he knew his penalty could total thirty. Under the law of the case, our 2009 ruling that Appellant’s plea was valid because he knew his sentencing exposure was thirty years precludes us from considering the validity of his plea based on an argument that he did not know his penalty could reach twenty years. Consequently, Appellant cannot secure relief on his intended issue regarding the lawfulness of his plea at #545. His intended issue is frivolous.

Moore III, No. 1058 EDA 2012, slip op. at 7-8. The court also found frivolous defendant’s claim that the plea in no. 1234-05 was invalid because he had never preserved the claim by filing a pre-or post-sentence motion to withdraw the plea. Id., slip op. at 8 & n.2.

Both appellate counsel, in filing an Anders brief rather than a Finley letter, and the Superior Court appeared to treat Moore III as a direct appeal, nunc pro tunc, from resentencing, rather than as an appeal in a second PCRA proceeding. Within a year of the Superior Court’s decision in Moore III, that is, within the one-year general statute of limitations of the PCRA, 42 Pa.C.S. § 9545(b), beyond the date judgment of sentence becomes final for filing a PCRA petition, defendant filed this, his third such petition, or his first post-resentencing, depending on how one characterizes it.

In the present post-conviction petition, defendant appears to be raising, in case No. 1234-05 only, a variant of the claims rejected by the Superior Court in Moore II and Moore III. Thus, he argues that his plea in no. 1234-05 was invalid because he was not informed prior to entering the plea that the probationary sentences imposed in Judge Moore’s cases could be made to run consecutively to the sentence in this case. (Pet. post-conviction collateral relief para. 7, July 2, 2013.) To get around the Superior Court’s finding in Moore III that any attack on the validity of the plea in no. 1234-05 was waived, he couples the claim that the plea in no. 1234-05 was invalid with assertions that prior counsel were ineffective for failing to raise it. (Pet. para. 11).

For reasons similar to those cited by the Superior Court in Moore III with respect to the plea in no. 545-05, we find frivolous any claim that the plea in no. 1234-05 was unknowing and involuntary because defendant was not advised of the possibility of consecutive sentences in the other cases. The record of the hearing on the guilty plea in no. 1234-05 belies any such claim. (Guilty Plea Tr. 11:20-24, 18:23-19:2, 20, 25:22-26:8, 26-27.) The Superior Court has also found to the contrary. See Moore II, no. 1669 EDA 2009, slip op. at 3 & n.6 (“At the guilty plea hearing, plea counsel and the trial court advised appellant of the various charges he was facing, the minimum and maximum sentences associated with each charge, and the possibility that all sentences could be imposed consecutively. . . . The Commonwealth argues that had appellant been sentenced consecutively on all charges, his aggregate maximum sentence would have exceeded forty years’ imprisonment.”).

However, just as with the original sentencingproceeding, we have detected substantial, plain errors in the sentences actually imposed at the resentencing proceeding. They cause us to find that some of the probationary sentences were erroneously imposed consecutively to, rather than concurrently with, the terms of imprisonment in nos. 545-05 & 1245-05.

As previously stated, at resentencing, we lowered the illegal sentence of three to twenty years’ imprisonment in no. 545-05 erroneously imposed at the original sentencing to three to ten years; however, to effectuate the original sentencing scheme, we then modified the concurrent one-to ten-year prison term imposed in Judge Moore’s case in no. 2222-04 to a ten-year term of probation, to run consecutive to the prison sentences, so that the original six- to thirty-year aggregate period of supervision imposed on nos. 545-05 & 1245-05 (whether or not that was this court’s original intent) would remain essentially intact. The error arose when we then imposed the probationary terms totaling eleven years on the remaining charges in various of Judge Moore’s and our cases consecutively to, rather than concurrently with, the six- to thirty-year aggregate, and stated that this was also in keeping with our original sentencing scheme. In fact, it was not: At the original sentencing, none of the probationary sentences either in the Judge Moore cases or in ours were imposed to run consecutively to the jail terms. We have carefully reviewed the original sentencing transcript as well as all of the sentencing sheets involved and find that all of these sentences of probation, in Judge Moore’s cases (nos. 6107-03, 8516-03, & 389-04) as well as ours (nos. 9745-04 & 9748-04), were made to run consecutive to each other, but concurrent with the prison terms imposed in nos. 545-05 & 1234-05, and totaled in the aggregate eleven years, of probation, commencing the date of sentencing, July 26, 2005. Accord Moore I, no. 2370 EDA 2007, slip op. at 1 n.2 (“Moore received consecutive three[-] to ten[-]year and three[-] to twenty[-]year sentences on the possession charges. The other punishments were concurrent.” (emphasis added)).

Obviously all of the probationary terms imposed at the original sentencing, totaling eleven years effective the date of sentencing, would have run out long before the prison terms, whether they were properly calculated as an aggregate six to twenty years or six to thirty years, did. Our finding at resentencing that the probationaiy terms imposed at the original sentencing ran consecutively to the prison terms to extend the total period of supervision to forty-one years was a patent and obvious misreading of the original sentencing record. Just as with the illegal sentence originally imposed on no. 545-05, no party, only this court, ever raised the sentencing error committed in transcribing the original probationaiy sentences at resentencing.

The court has the inherent power to correct an illegal sentence at any time; so too the court may correct manifest errors in the calculation or transcription of a sentence that appear on the face of the record. We find our plain misreading of the original sentencing record when resentencing defendant to consecutive terms of probation the court to be correctable by this court sua sponte, regardless of the fact no party has raised it or the passage of time from the reimposition of sentence.

“The power to amend its records, to correct mistakes of the clerk or other officer of the court [or] inadvertencies of counsel, or supply defects or omissions in the record, even after the lapse of the term, is inherent in courts of justice . . . .” Commonwealth v. Cole, 437 Pa. 288, 292, 263 A.2d 339, 341 (1970) (quoting Gagnon v. United States, 193 U.S. 451, 456 (1903)).

The law is clear that a court may modify or rescind any order within 30 days after its entry, if no appeal has been taken. 42 Pa.C.S. § 5505; Pa.RAJP. 1701(a). Thus, where a Notice of Appeal has been filed, the trial court cannot act further in the matter. However, this rule must be read in conjunction with a court’s inherent powers “to amend its records, to correct mistakes of the clerk or other officer of the court, inadvertencies of counsel, or supply defects or omissions in the record, even after the lapse of the term.” For example, in Cole the court held that an order granting both a new trial and a motion in arrest of judgment was patently erroneous as such relief was irreconcilable. This court concluded that the lower court had an inherent power to correct such obvious and patent mistakes beyond the expiration of the thirty-day statutory limit. Thus, under limited circumstances, even where the court would normally be divested of jurisdiction, a court may have the power to correct patent and obvious mistakes.

Commonwealth v. Klein, 566 Pa. 396, 400, 781 A.2d 1133, 1134-35 (2001) (unanimous opinion) (citations omitted) (quoting Cole, 437 Pa. at 292, 263 A.2d at 341) (holding a trial court had jurisdiction to correct manifest error in the calculation of sentence notwithstanding a pending appeal), followed in Commonwealth v. Holmes, 593 Pa. 601, 604-18, 933 A.2d 57, 58-67 (2007)(plurality opinion) (“Appellant ... is entitled to the relief granted by the trial court under our case[-]law upholding the inherent jurisdiction of courts to correct patent and obvious mistakes. The trial court imposed a new sentence of incarceration ... for a violation of probation even though probation was never imposed. While the mistake is not apparent based on the face of the order itself, one need only look to the quarter session notes in the record to see the mistake.” (footnote omitted)).

We hereby order as follows: The probationary sentences totaling eleven years we imposed consecutively to the prison terms at resentencing in Nos. 6107-03, 8516-03, 389-04, 9745-04, & 9748-04, in erroneous reliance on our original sentencing intent, are hereby vacated. The eleven total years of probation on these charges, to be served consecutively to each other but concurrently with the prison sentences imposed on nos. 545-05 & 1234-05, we imposed at the original sentencing on July 26,2005, to commence effectively that date, are reinstated.

After defendant filed the present, third PCRA petition in this matter, the State Correctional Institution at Mahanoy, in a communication received by this court on December 27, 2013, informed the court that defendant had been released from the institution on parole. We have discovered that on July 7, 2014, defendant, previously unbeknownst to us, filed in this court a notice of his new address at 5143 Funston Street, Philadelphia, PA 19139.

We hereby advise defendant, care of this new address, by certified mail, return receipt requested, of the right to appeal this order to the Superior Court of Pennsylvania, within thirty days of entry of the order. See Pa.R.A.P. 903(a); see also Pa.R.Crim.P. 114 (concerning entry and service of court orders); Pa.R.Crim.P. 910 (“An order granting, denying, dismissing, or otherwise finally disposing of a petition for post-conviction collateral relief shall constitute a final order for purposes of appeal.”). Should an appeal ensue, either by defendant or by the Commonwealth, this final order shall itself constitute our statement of reasons for the order pursuant to Pa.R.A.P. 1925(a)(1), and the clerk of courts shall forthwith transmit the order, together with the remainder of the record as defined in Pa.R.A.P. 1921, in the manner and within the time frame specified in Pa.R.A.P. 1931.


source: Caselaw Access Project

author: HERRON, J.,

license: Public Domain

text:
    In re Taylor Intervivos Trust

      C.P. of Philadelphia County, O.C
    No. 3563 IV of 1939
    Aug. 18, 2014-
   HERRON, J.,

Introduction

The conflicting petitions filed by three beneficiaries of the Edward Winslow Taylor Trust and its corporate trustee raise a question of first impression. Because the trust established by Edward Winslow Taylor in 1928 contains no provisions for removing the corporate trustee, three beneficiaries seek court approval to modify the trust agreement under the broad provisions of 20 Pa.C.S.A. § 7740.1 to enable them in the future to remove a corporate trustee without cause and without petitioning the court for approval. The corporate trustee, in contrast, opposes this modification of the trust agreement. It asserts that the beneficiaries are relying on the wrong section of the PEF Code in seeking to remove the trustee. Instead of section 7740.1, the specific requirements set forth in 20 Pa.C.S.A. § 7766 for removing a trustee should control. In this issue of first impression, neither side cites precedent interpreting section 7740.1. Nonetheless, both sides present vigorous, compelling arguments. Upon review of the Pennsylvania Uniform Trust Act as a whole, the beneficiaries’ petition to modify the trust agreement is denied. This does not preclude them, however, from filing a petition seeking to remove the corporate trustee by satisfying the requisite statutory requirements of section 7766.

Background

On February 9, 1928, Edward Winslow Taylor (“Settlor” or “Edward Taylor”) executed an Agreement of Trust, which he amended on April 20, 1928 and September 15,1930. In the initial trust document, Edward Taylor appointed The Colonial Trust Company, whose principal place of business was Philadelphia, as trustee. In the September 25,1930 amendment, Mr. Taylor named The Pennsylvania Company for Insurance on Lives and Granting Annuities, noting that it was the successor by merger of The Colonial Trust Company. Wells Fargo Bank, N.A. (“Wells Fargo”) is the successor in interest of the original trustee.

Edward died on February 6, 1939 and his daughter, Anna Taylor Wallace (“Anna”),- became co-trustee serving until her death on August 17, 1971. With his final trust amendment, Edward Taylor emphasized that “his dominant purpose” in creating this trust was “to care for his daughter, Anna Taylor Wallace, and her children living on that date, and that the ultimate limitations as to principal and income were a secondary intent...” Under the terms of the trust, the trustees were directed to distribute the net income to Anna Taylor Wallace “at convenient times” during the year throughout her lifetime. Anna was given the power by will to designate who should receive the remaining net income upon her death. Anna exercised this power of appointment and provided that her eldest child, Frank R. Wallace, Jr. should receive the net income during his lifetime. Upon the death of Anna’s child, the net income was to be distributed among his children, per stirpes. The trust terminates 20 years after the death of the last survivor of the Settlor, Anna Taylor Wallace, Frank R. Wallace and Frank R. Wallace, Jr. or on May 4, 2028. Upon termination, the balance in the trust shall be distributed to each of the individuals who were entitled to receive income.

Upon the death of Anna’s son Frank Wallace, Jr. on May 4, 2008, Anthony T. Wallace was next in line to serve as Co-Trustee, but he renounced this position effective May 4,2008. In August 2009, the corporate trustee, Wells Fargo, filed a Fourth and Final Account of its administration of the trust. With this accounting, Wells Fargo sought court approval under 20 Pa.C.S.A. §7740.7(b) to divide the trust into four separate trusts for each of Frank Wallace Jr.’s four surviving children. The trustee also sought court approval of the appointment of each child to serve as co-trustee with Wells Fargo of his or her own trust. This court approved the division of the trust and the appointment of each of the children as co-trustees by a December 7,2009 adjudication. The trust was subsequently divided into four separate trusts, each with an approximate value of $1.8 million.

On September 4, 2013, Elise W. Carr, W. Sewell Wallace and Christopher G. Wallace (“petitioners”), who are three of the four surviving income beneficiaries of the trust as children of Frank R. Wallace Jr., filed a petition to modify the Trust Agreement. More specifically, they seek to modify paragraph FIFTEENTH of the Trust Agreement because it does not include a provision for the removal and replacement of the corporate trustee, which, they maintain, is a standard provision in modern trust agreements. In essence, they propose that the trust document be amended so that in the future a corporate trustee could be removed by the beneficiaries without petitioning a court for approval.

Paragraph FIFTEENTH of the Trust presently provides as follows for the resignation of the trustee but not for its removal:

FIFTEENTH: The trustee is hereby authorized to resign as Trustee of this trust upon giving ninety day’s written notice of such resignation, duly signed and acknowledged by one of its officers, and delivered personally or by registered mail to the Settlor or to the beneficiaries if the Settlor is deceased. Upon such resignation or other termination of this trust, the Trustees may account for its administration of the said trust fund to the Settlor, or to the beneficiaries if the settlor is deceased, and, upon so accounting to the satisfaction of the Settlor or the beneficiaries, may have its accounts finally settled and adjusted in and by said account, and may be discharged from liability hereunder without any application to or action by any court. In case of the resignation, removal or inability to act of the Trustee, a new trustee may be appointed (1) by the settlor if alive and able to act; or (2) by the beneficiary, provided, however, that such substituted Trustee shall be a recognized banking institution in the City of Philadelphia, Pennsylvania.

While paragraph FIFTEENTH does not provide for the removal of a trustee, it does provide for the replacement of a trustee who has resigned or has been removed with the special provision that the successor trustee is “a recognized banking institution in the City of Philadelphia.”

The three petitioners propose modifying paragraph FIFTEENTH as follows to provide for the removal of the corporate Trustee:

A. The Trustee is hereby authorized to resign as Trustee of this Trust upon giving ninety day’s written notice of such resignation, duly signed and acknowledge by one of its officers, and delivered personally or by registered mail to the beneficiaries of the Trust. Upon such resignation or other termination of this Trust, the Trustee may account for its administration of said Trust to the beneficiaries, and, upon so accounting to the satisfaction of the beneficiaries, may be discharged from liability hereunder without any application to, or action by, any Court. In the case of resignation or inability to act of the Trustee, a majority of the sui juris income beneficiaries shall thereupon appoint in writing a substitute Corporate Trustee, which substitute Corporate Trustee shall be located in Pennsylvania.
B. From time to time and without cause, the income beneficiaries who are then sui juris may remove any Corporate Trustee acting hereunder by a writing delivered to such Corporate Trustee stating the effective date of the removal; provided that if there are five or fewer sui juris income beneficiaries, all sui juris income beneficiaries must consent in writing to the removal, and if there are more than five sui juris income beneficiaries, a majority of sui juris income beneficiaries must consent in writing to the removal.
C. If the sui juris income beneficiaries exercise their powertoremoveaCorporateTrusteeunder subparagraph (B) above, the sui juris income beneficiaries who consented to the removal shall thereupon appoint in writing a substitute Corporate Trustee, which substitute Corporate Trustee shall be located in Pennsylvania.
D. For the purposes of this paragraph FIFTEENTH, references to the “Trust” shall include any subdivided trust, and references to "sui juris’ income beneficiaries” shall mean such beneficiaries of any subdivided trust. Actions taken with respect to resignation, removal or appointment of a trustee of a subdivided trust may, but need not, also be taken with respect to any subdivided trust.

To support this modification of the trust agreement, the petitioners invoke 20 Pa.C.S. A. § 7740.1 and In re McKinney Trust, 67 A.3d 824, 836 (2013). The court should approve this modification, they argue, because some of the beneficiaries consent to it, the interests of the beneficiaries who do not consent will be adequately protected and the proposed modifications are not inconsistent with a material purpose of the trust agreement.

Wells Fargo vigorously opposes this petition to modify the trust agreement in its answer to the petition and subsequent motion for judgment on the pleadings. In so doing, Wells Fargo raises complex issues of statutory interpretation of the PEF Code. Wells Fargo forcefully argues that the petitioners improperly rely on Section 7740.1 (d) of the PEF Code to modify the trust agreement when the exclusive provision for removing trustees under the PEF Code is 20 Pa.C.S. §7766. Because petitioners do not even mention Section 7766, Wells Fargo concludes, their petition fails to plead the requisite facts to obtain relief. Petitioners’ response that they seek to modify the trust agreement rather than remove a trustee obfuscates their ultimate objective which is to provide for the serial removal of trustees without petitioning for court approval. An analysis of the relevant PEF Code provisions underscores why this modification petition must be denied.

Legal Analysis

Wells Fargo’s motion for judgment on the pleadings asserts, inter alia, that as a matter of law the beneficiaries have relied on the incorrect PEF Code section in seeking to modify the 1928 Trust Agreement (as amended) of Edward Winslow Taylor to provide for serial removals of the Corporate Trustee without court approval. Pennsylvania Rule of Civil Procedure 1034 provides that after “the relevant pleadings are closed” a party may file such a motion. Pa.R.C.P. 1034(a). In deciding this motion, a court may only consider the pleadings “and any document attached thereto.” Pfister v. City of Philadelphia, 963 A.2d 593, 597 (Pa. Cmwlth. 2009). In this case, Wells Fargo filed its answer to the beneficiaries’ petition, and the beneficiaries, in turn, have filed spirited and thorough responses to Wells Fargo’s motion for judgment on the pleading. The issues are therefore ripe for review.

The lively debate over the proposed modification of the 1928 Taylor Trust Agreement, as amended, to allow the beneficiaries to remove a corporate trustee without cause or without seeking court approval raises novel issues of statutory interpretation of the PEF Code and, in particular, the interrelationship of Section 7740.1(d) and Section 7766. The Pennsylvania Uniform Trust Act or Chapter 77 was added to the PEF Code on July 7, 2006, effective 120 days later. It is a complex statute that encompasses various subchapters, ranging from Subchapter A (General Provisions) through Subchapter I (Liability of Trustees). 20 Pa.C.S. §7701. Both sides in this statutory puzzle rely on sections of the PEF Code that fall within the parameters of the Uniform Trust Act. In seeking to modify the Taylor Trust, the beneficiaries rely on 20 Pa.C.S.A. § 7740.1(d) which falls within subchapter D relating to creation, validity, modification and termination of the trust. In opposing the particular modification sought by three of the beneficiaries, the trustee relies on 20 Pa.C.S. 7766, which falls within Subchapter G relating to Office of Trustee. The interplay of these two sections is at the heart of resolving this issue.

The beneficiaries argue that Section 7740.1 allows modification of a trust agreement so long as the proposed modification “is not inconsistent with a material purpose of the trust.” Under section 7740.1, they argue, they should be permitted to modify the 1928 Trust “to include the ability of the income beneficiaries to remove the corporate trustee provided a substitute trustee is appointed.” More specifically, the three beneficiaries ask the court to approve a modification of the trust agreement that would allow them “from time to time and without cause” to remove any corporate trustee by a writing delivered to any corporate trustee stating the effective date of its removal so long as all the income beneficiaries agree in writing when there are five or fewer sui juris income beneficiaries. If there are more than five sui juris beneficiaries, a corporate trustee could be removed if a majority of the sui juris income beneficiaries agreed in writing. In essence, the three beneficiaries seek to modify the Taylor Trust Agreement so that by consent of the beneficiaries — alone — without any court petition or approval, a corporate trustee may be removed.

The provision of the PEF Code the beneficiaries invoke, 20 Pa.C.S.A. 7740.1, provides three methods for modifying or terminating a noncharitable irrevocable trust by consent: (a) Consent by settlor and beneficiaries; (b) consent by beneficiaries with court approval, and; (d) consent by some beneficiaries with court approval. Under Section 7740.1, the only provision that would allow modification of a trust without court approval is §7740.1(a) which allows for the modification of a trust where the settlor and all beneficiaries consent:

(a) Consent by settlor and beneficiaries — A noncharitable irrevocable trust may be modified or terminated upon consent of the settlor and all beneficiaries even if the modification or termination is inconsistent with a material purpose of the trust. A settlor’s power to consent to a trust’s modification or termination may be exercised by a guardian, an agent under the settlor’s general power of attorney or an agent under the settlor’s limited power of attorney that specifically authorizes that action.

Obviously, the petitioners cannot — and do not — rely on this subsection of Section 7740.1(a) because the settlor, Edward Winslow, has been dead for many years and all of the beneficiaries have not joined in their modification petition. Instead, the petitioners invoke 7740.1 (d) which provides for modification of a trust as follows:

(d) Consent by some beneficiaries with court approval-If not all the beneficiaries consent to a proposed modification or termination of the trust under subsection (a) or (b) the modification or termination may be approved by the court only if the court is satisfied that:
(1) if all the beneficiaries had consented, the trust could be modified or terminated under this section; and
(2) the interests of a beneficiary who does not consent will be adequately protected.

Section 7740.1(d), however, does not provide a home run for the beneficiaries for two reasons. First, although they state in very general terms that the interests of a beneficiary who did not consent would be adequately protected, they do not explain how those interests would be protected. The beneficiaries argue broadly that “Section 7740.1 is clear and unambiguous” and that “the Legislature imposed only one restriction upon proposed modifications — that they not be ‘inconsistent with a material purpose of the trust.’” But this broad argument ignores all the elements of Section 7740.1(d). In addition to requiring that the interests of a beneficiary who does not consent is protected, Section 7740.1(d)(1) requires that “if all the beneficiaries had consented, the trust could have been modified or terminated under this section....” This requirement, though less than clear, opens the door to Well Fargo’s compelling arguments that the legality of the proposed modification for removal of trustees must be analyzed in conjunction with the more specific section of the PEF Code that focuses sharply on removal of a trustee: Section 7766.

Section 7766 is entitled “removal of trustee” and sets forth two broad options for removing a trustee — both of which contemplate court review:

§7766. Removal of trustee — UTC 706
(a) Request to remove trustee; court authority — The settlor, a cotrustee or a beneficiary may request the court to remove a trustee or a trustee may be removed by the court on its own initiative.
(b) When court may remove trustee — The court may remove a trustee if it finds that removal of the trustee best serves the interests of the beneficiaries of the trust and is not inconsistent with a material purpose of the trust, a suitable cotrustee or successor trustee is available and:
(1) the trustee has committed a serious breach of trust;
(2) lack of cooperation among cotrustees substantially impairs the administration of the trust;
(3) The trustee has not effectively administered the trust because of the trustee’s unfitness, unwillingness or persistent failures; or
(4) There has been a substantial change of circumstances. A corporate reorganization of an institutional trustee, including a plan of merger or consolidation, is not itself a substantial change of circumstances.

The three beneficiaries did not even cite Section 7766 in their initial petition to modify the trust agreement to allow removal of the corporate trustee solely by consent of the beneficiaries. In contrast, Wells Fargo vehemently asserts that because the 1928 Taylor trust agreement did not give the beneficiaries authority to remove a corporate trustee, the default provisions of the PEF Code should be applied as to removal of trustees. It is undisputed that if Edward Winslow Taylor, as settlor, had provided for the removal of a corporate trustee that trust provision would control. The PEF Code unambiguously provides that the “Trust instrument controls” and as a consequence “the provisions of a trust instrument prevail over any contrary provisions of this chapter.” 20 Pa. C.S.A. §7705(a).

If, however, a settlor fails to provide for a certain contingency in his trust document, the provisions of the PEF Code apply by default. This point is emphasized in the primary case the beneficiaries cite, In re McKinney, 2013 Pa. Super. 123, 67 A.3d 824, 826 (Pa. Super. 2013)(“when circumstances arise that are not explicitly considered by the trust document, such as when beneficiaries request the removal of a trustee notwithstanding the trust document’s lack of a portability clause, Pennsylvania’s Probate, Estates and Fiduciaries Code provides a set of default rules that will govern the proceedings”). Likewise, the comments to the uniform law emphasize that the “Uniform Trust Code (UTC) is primarily a default statute.” 20 Pa.C.S. §7705, Uniform Law Comment. The adoption of the UTC by the Pennsylvania legislature signified an effort to modernize trust law while providing a structure and guidance for courts. It is well established, for instance, that the UTC “expanded the circumstances in which trustee removal will be granted.” In re McKinney, 61 A.3d at 832, n. 12. Yet in expanding the circumstances in which a trustee can be removed where a settlor failed to provide how to do so, the PEF Code provides the guidelines for modifying the trust or removing a trustee. Determining the proper PEF Code provision applicable to the beneficiaries’ modification petition is not a backward-looking exercise but an essential task to assuring the legality of the proposed modification.

Section 7766 of the PEF Code as adopted by the Pennsylvania legislature clearly does not allow for removal of a trustee based on the consent of some — or all — of the trust beneficiaries. The comparatively recent trust provisions of the Pennsylvania PEF Code are modeled on the UTC. Section 7766(b)(4) is “substantially similar to the UTC” except that the UTC permitted removal of a trustee when all the beneficiaries agreed. The Pennsylvania legislature did not adopt that provision, in contrast to the legislatures of other states such as Vermont, Maine and Arkansas which allow removal of a trustee based on the agreement of all beneficiaries.

Prior to the Pennsylvania legislature’s adoption of Chapter 77 of the PEF Code, a trustee could be removed primarily by a showing of fault or negligence. With the addition of 20 Pa.C.S. §7766(b)(4) a “no-fault” provision for the removal of a trustee was added but a party seeking removal had to satisfy all the requirements of section 7766(b)(4). In other words, a party seeking to remove a trustee under Section 7766(b)(4) “must show by clear and convincing evidence that: (1) the removal serves the beneficiaries’ best interests; (2) the removal is not inconsistent with a material purpose of the trust; (3) a suitable successor trustee is available; and (4) a substantial change in circumstance has occurred.” In re McKinney, 67 A.3d at 830. In this case, the three beneficiaries’ modification petition does not address — let alone satisfy — these requirements for removal under the no fault provisions of Section 7766.

In determining whether these prerequisites for removal have been satisfied by petition, the statute contemplates “an active inquiry and findings by the court” not the passive acquiescence suggested by the beneficiaries. In fact, in its recent analysis of Section 7766(b)(4), the Pennsylvania Superior court outlined numerous factors for a court to analyze under this section:

We conclude that courts should consider the following factors when determining whether a current trustee or a proposed successor trustee best serves the interest of the beneficiaries: personalization of service; cost of administration; convenience of the beneficiaries; efficiency of the service; personal knowledge of trusts’ and beneficiaries’ financial situations; location of a trustee as it affects trust income tax; experience; qualifications; personal relationship with beneficiaries; settlor’s intent as expressed in the trust document; and any other material circumstance.

In re McKinney, 67 A.3d at 833.

In cementing its argument that Section 7766(b)(4) rather than Section 7740.1 applies in this instance, Wells Fargo invokes the rules of statutory interpretation. The beneficiaries counter that Section 7740.1 is unambiguous; hence statutory interpretation rules are unnecessary. But, as Wells Fargo suggests, the interrelationship between Sections 7740.1 and 7766 create a clear ambiguity within the Pennsylvania Uniform Trust Act which spans both of these sections. See 20 Pa.C.S. §7701. A key rule in statutory construction is ascertaining legislative intent. Rather than looking at piecemeal sections of the comprehensive statute, the “general assembly intends the entire statute to be effective and certain.” 1 Pa.C.S.A. §1922(2). Under these rules of construction, “[sjtatutes in pari material shall be construed together, if possible, as one statute” and statutes are in pari material “when they relate to the same persons or things or to the same class of persons or things.” 1 Pa.C.S.A. § 1932(a) & (b). The beneficiaries assert that these two sections do not relate to the same thing, yet that argument is undermined by their insistence that the general provisions for modifying a trust under S ection 7740.1 should be applied to the specific task of removing a corporate trustee. Clearly, the beneficiaries seek to apply Section 7740.1 to the same thing as Section 7766: removal of atrustee. However, where there is a conflict between a general statutory provision and a more specific provision, the specific provision controls. In fact, there is a clear statutory rule of interpretation that a particular statutory provision controls the general provision where there is a conflict:

Whenever a general provision in a statute shall be in conflict with a special provision in the same or another statute, the two shall be construed, if possible, so that effect may be given to both. If the conflict between the two provisions is irreconcilable, the special provisions shall prevail and shall be construed as an exception to the general provision, unless the general provision shall be enacted later and it shall be the manifest intention of the general assembly that such general provision prevail.

1 Pa.C.S.A. § 1933

It clearly was not the manifest intention of the Pennsylvania legislature to allow beneficiaries to remove a trustee based on their agreement and without satisfying the requirements of Section 7766 where the Settlor made no provision for trustee removal. The beneficiaries’ attempt to use the broad modification provisions in Section 7740.1 to eviscerate Section 7766 must therefore yield to the specific removal provisions of Section 7766. In reaching this result, it is important to clarify, however, the practical implications or limitations of this holding. The beneficiaries have not raised the more specific issue of whether Wells Fargo should be removed as Corporate Trustee. Nothing in this opinion precludes them from seeking the removal of this Corporate Trustee upon petition and satisfaction of the statutory requirements.

Conclusion

For all of these reasons, the petition filed by Elise W. Carr, W. Sewell Wallace and Christopher Wallace to modify the Trust Agreement of Edward Winslow Taylor dated February 9,1928, as amended, is denied. The motion for judgment on the pleadings filed by Wells Fargo Bank, N.A. is granted as set forth in a contemporaneously issued decree. This ruling is without prejudice to file a petition to remove the Corporate Trustee.

      . Curiously, the three beneficiaries invoke In re McKinney, 2013 Pa. Super 123, 67 A.3d 824 (2013) to support their claim for modification under 20 Pa. C.S.A. §7740.1 (d). See 9/4/13 Elise Carr Petition, ¶ 25. But as the trustee points out in opposition, McKinney did not address section 7740.1(d). Instead, it applied 20 Pa.C.S.A. §7766 to analyze the factors a court should consider in analyzing a petition to remove a trustee. In so doing, the Superior Court noted that “[t]his is the first instance in which we have been asked to interpret and apply Section 7766(b)(4)....” In re McKinney, 67 A.3d at 830.

      . See 9/4/13 Elise Carr Petition, Exs. A, B & C.

      . 9/4/13 Elise Carr petition, ¶3.

      . 9/4/14 Elise Carr petition, Ex. C (9/25/30 Trust Amendment, ¶2).

      . 9/4/13 Elise Carr petition, Ex. C (9/25/30 Trust Amendment, ¶ 3(a)).

      . The petition to modify the trust characterizes Frank R. Wallace, Jr. both as Anna’s eldest child (¶6) and as her only child (¶ 14). See 9/4/13 Elise Carr petition.

      . See 9/4/13 Elise Carr petition, ¶¶ 2-12.

      . See 9/4/13 Elise Carr petition, ¶ 22. In fact, the Trust Agreement does provide for the replacement of a trustee in paragraph FIFTEENTH. See text accompanying note.9.

      . 9/4/13 Elise Carr petition, Ex. A, (February 9, 1928 Trust Agreement) paragraph FIFTEENTH

      . 9/4/13 Elise Carr petition, ¶24 and proposed order.

      . 9/4/13 Elise Carr petition, ¶¶ 25 & 26.

      . A core argument by Wells Fargo that the beneficiaries’ petition to modify failed to set forth a viable cause of action due to failure to plead the appropriate facts comes quite close to a demurrer which should be raised by preliminary objection. See Pa.R.C.P. 1028(a)(4). By filing copious responses to Wells Fargo’s motion for judgment on the pleadings, the beneficiaries have waived any objections to a possible procedural defect. See generally Soto v. Nabisco, 2011 Pa. Super. 249, 32 A.3d 787, 788 n.2 (Pa. Super. 2011), app. Denied 616 Pa. 659, 50 A.3d 126 (2012); Richmond v. McHale, 2012 Pa. Super. 1, 35 A.3d 779, 782-83 (Pa. Super. 2012)(failure of a party to object to a procedural defect constitutes waiver).

      . 4/7/14 Elise W. Carr memorandum at 1

      . 4/7/14 Elise W. Carr, memorandum at 1.

      . See, e.g. 9/4/13 Elise Carr petition, ¶ 26. In their answer to Wells Fargo’s motion for judgment on the pleadings, the 3 beneficiaries seek to dodge this statutory requirement by noting merely that “Wells Fargo makes no claim that the non-consenting beneficiaries are not adequately protected in this proceeding.” 4/7/14 Elise Carr answer at 4, n.1. This is placing the burden on the wrong party. Since the beneficiaries rely on Section 7740.1(d), they are required to satisfy all of its elements.

      . 4/7/14 Elise Carr answer at 2.

      . In re McKinney, 67 A.3d at 831, n. 8 See also Jt. St. Govt. Comm. Comment — 2005.

      . See, e.g. 14A V.S.A. § 706(b)(5); 18-B M.R.S.A. §706(2)(D); A.C.A. §28-73-706(b)(4).

      . 20 Pa.C.S.A. §¶7766, Jt. St. Govt. Comm. Comment-2005.


author: HERTZBERG, J.,

text:
    Bruzzese v. Bruzzese

      C.P. of Allegheny County,
    No. GD 09-6968; 1056 WDA 2014

      Jordan Lee Strassburger, for plaintiff.

      Thomas J. Dempsey, Jr, for defendant.

      David E. McMaster, for additional defendant.
    Aug. 29, 2014
   HERTZBERG, J.,

— Defendant John Bruzzese has appealed to the Superior Court of Pennsylvania after a jury rendered a verdict against him for breach of a contract to make plaintiff Terri Bruzzese the beneficiary of her husband’s life insurance policy. This opinion explains the reasons the verdict is correct. See Pa.R.A.P. No. 1925(a).

In 1974 and 1977 Domenic Bruzzese purchased Prudential life insurance policies from prudential agent John Bruzzese, his brother. Both policies named Domenic Bruzzese’s parents as the beneficiaries. In 1981 Domenic Bruzzese (“Domenic” hereafter) married Terri Bruzzese, and when she became pregnant with their first child in 1983, they met at their home with John Bruzzese (“John” hereafter) about life insurance. Terri Bruzzese (“Terri” hereafter) had no life insurance, hence at the meeting she purchased a prudential policy from John that named Domenic the beneficiary. Domenic wanted the beneficiaries on the two prudential policies he purchased in 1974 and 1977 changed from his parents to his wife, Terri. At the meeting, John agreed to make the beneficiary change to Domenic’s policies. John prepared the documents necessary for the beneficiary change, Domenic signed them, and John left the meeting with them in his possession. However, John did not submit the beneficiary change documents for the life policies to prudential. Although Domenic later was able on his own to get the beneficiary changed to Terri on the 1974 policy, the beneficiary of the prudential life policy purchased in 1977 was not changed to Terri. In 2007 Domenic discovered he had cancer, which quickly led to his death. Since the life insurance policy purchased in 1977 still named Domenic’s parents as the beneficiaries, prudential refused to pay the $40,441.95 death benefit to his widow, Terri, and instead paid the $40,441.95 to Domenic’s mother.

Terri commenced this litigation in April of 2009 by filing a praecipe for writ of summons naming John as the defendant. The complaint Terri ultimately filed against John for not having Terri named as the beneficiary of the 1977 life insurance policy is comprised of two counts, one for negligence and one for breach of contract. In response to the complaint, John first filed preliminary objections, but after they were overruled he filed an answer and new matter. John then filed a complaint to join Terri’s financial advisor David E. Martin (and related entities) as additional defendants, alleging Mr. Martin knew Terri was not the beneficiary and failed to take action to change beneficiaries.

The dispute was assigned to me for the purpose of conducting a jury trial. Before starting the trial, I heard oral argument on the record from the parties’ attorneys on John’s motion in limine. I refused to grant the motion in limine relative to the allegations that Terri’s general denials in her reply to new matter constitute binding judicial admissions, and I deferred until the trial any ruling on the admissibility of statements made by Domenic. On March 17 and 18,2014 a jury heard testimony on the dispute. The jury then rendered a verdict that John was 40% negligent, Terri was 60% negligent and David E. Martin and related entities were not negligent, and that John breached the contract to change the beneficiary of Domenic’s life insurance to Terri. I molded it into a verdict in favor of Terri and against John in the amount of $40,441.95 and in favor of David E. Martin and related entities.

Terri filed a motion for post-trial relief requesting that prejudgment interest be added to the verdict, and John filed a motion for post-trial relief alleging judgment should be entered in his favor due to various erroneous rulings I allegedly made during the trial. I granted Terri’s motion by adding $15,376.81 in prejudgment interest to the verdict, I denied John’s motion and entered judgment on the verdict in the total amount of $55,818.76. John appealed to the Superior Court from the order denying his motion for post-trial relief. On July 9, 2014 I ordered John to file a concise statement of errors complained of on appeal (“concise statement” hereafter) and John filed his concise statement on July 31, 2014. John contends in his concise statement that I made at least 12 different errors.

John first contends I should have determined that Terri made various judicial admissions in her reply to new matter and prohibited any contradictory trial testimony. See concise statement, ¶ nos. 1, 2A and 2B. For example, since John averred in the new matter that he never met with Terri and Domenic to discuss changing the beneficiary on Domenic’s Prudential life insurance policy, John argues that Terri’s one word response of “denied” in her reply to new matter is a binding judicial admission of the averment that they never met. See new matter filed 2/25/13, ¶ no. 3 3, reply to new matter filed 7/25/13, ¶ no. 33 and transcript of jury trial 3/17/14-3/18/14 (“T.” hereafter) at p. 5. John premises this argument on Pennsylvania Rule of Civil Procedure No. 1029(b), which provides:

Averments in a pleading to which a responsive pleading is required are admitted when not denied specifically or by necessary implication. A general denial or a demand for proof, except as provided by subdivision (c) and (e) of this rule, shall have the effect of an admission.

To accept John’s position would be to ignore the complaint’s averments that Domenic and Terri met at their home with John to change the beneficiary on Domenic’s life insurance policies and Domenic and John completed the documents for the change. See complaint filed 11/26/2012, ¶ nos. 6 and 8. Rule 1029(b) that is cited by John requires a determination of whether Terri denied John’s averment that he never met with Domenic and Terri “by necessary implication.” By describing the meeting in the complaint, and generally denying John’s allegation of never meeting, Terri denied the allegation by necessary implication. There also is extensive appellate caselaw holding that the pleadings as a whole must be examined to determine whether a party admitted a fact in the other party’s pleading. See Alwine v Sugar Creek Restaurant, Inc., 2005 PA Super 291, 883 A.2d 605, 609, Ramsey v. Taylor, 447 Pa. Super. 202, 205, 668 A.2d 1147, 1149 (1995) and Cercone v. Cercone, 254 Pa. Super. 381, 391, 396 A.2d 1, 6 (1978). Clearly an examination of the pleadings as a whole includes the complaint, and Terri’s complaint’s description of the meeting precludes a determination that she admitted there was no meeting. In any event, Pennsylvania Rule of Civil Procedure No. 126 authorizes a trial judge to “disregard any error or defect of procedure which does not affect the substantial rights of the parties.” Since Terri testified about the meeting at her deposition (See T., p.5), John cannot and did not ague that any of the general denials in Terri’s reply to new matter led to surprise or otherwise substantially affected his rights. Since Rules of Procedure Nos. 126 and 1029(b) and appellate caselaw support my ruling that Terri did not make any judicial admissions, my ruling was correct.

John’s next contention is that I erroneously allowed Terri to testify to a conversation or conversations with Domenic about making her the beneficiary of his two life insurance policies. See concise statement, ¶ nos. 3 and 4. Here are the questions with the answers that John objects to:

Q. Ms. Bruzzese, would you tell me what your recollection of the conversations were with respect to life insurance plans that you had with your husband?
A. That I didn’t have insurance at the time so we decided that I was getting insurance. So it was 1983 when John Bruzzese, the agent, came to the house. I got insurance through him. And then my husband wanted the beneficiary changed on his, both, two policies —
Attorney Dempsey: Objection to hearsay....
Judge Hertzbert:...overruled
Q. Miss Bruzzese, did you and your husband, did you have discussions about life insurance back in 1983?
A. Yes.
Q. Would you tell the jury, please, what you and your husband intended on doing with respect to your life insurance?
A. I didn’t have any insurance at the time so his brother, John Bruzzese, worked for prudential and he was my husband’s agent. So my husband contacted my brother-in-law. He came out to the house. I had paperwork done giving me life insurance. And then Domenic, my husband, wanted his two policies changed from his parents as beneficiary to me.

T., pp. 67-68 and 70-71. John argues that Terri’s testimony as to Domenic’s plans or intentions to have Terri named as the beneficiary of his life insurance is inadmissible hearsay.

In John’s answer to the complaint he denied that the purpose of the 1983 meeting was to make Terri the beneficiary, and he ultimately testified at trial that Domenic’s policies were not discussed and beneficiary change forms for them were not signed during the meeting. See complaint filed 11/26/2012, ¶ nos. 6 and 8, answer filed 2/25/2013, ¶ nos. 6 and 8 and T, pp. 159-163. Therefore, whether or not the beneficiary change was discussed and the forms completed were disputed issues for the jury to decide. Hence, Terri offered Domenic’s plan or intention to make Terri the beneficiary to show Domenic later acted in conformity with this plan or intention by discussing it with John and signing the beneficiary change forms at the meeting. The testimony falls squarely within the hearsay exception for “then existing mental, emotional, or physical condition.” Pa. R.E. No. 803(3). This exception makes statements “of the declarant’s then-existing state of mind (such as motive, intent or plan)....” admissible. Id....” [T]he rational underlying the state of mind exception to the hearsay rule” is:

Intention, viewed as a state of mind, is a fact, and the commonest way for such a fact to evince itself is through spoken or written declarations. It is therefore because of the impossibility, in many cases, of proving intention apart from personal declarations, that they are admitted. The true basis of their admission, then, is necessity, because of which an exception to the hearsay rule is recognized....

Commonwealth v. Begley, 566 Pa. 239, 270, 780 A.2d 605, 623 (2001) citing Commonwealth v Marshall, 287 Pa. 512, 522, 135 A. 301, 304 (1926). Because the testimony John objects to falls within this hearsay exception, I correctly allowed its admission at trial.

John next contends I should have granted a nonsuit because Terri did not produce evidence of any consideration passing from Domenic to John to support a contract. See concise statement, ¶ no. 5. Since John was the agent on the policy, he received commissions from the policy premiums paid by Domenic. In return for payment of premiums, one service that a life insurance agent provides to a customer is to assist with beneficiary changes. T., pp. 93-102. Hence, the premiums paid by Domenic (from which John received commissions) are the consideration for John’s agreement to have the beneficiaries changed on Domenic’s policies. Because there in fact was consideration passing from Domenic to John to support the contract, I was correct to deny John’s motion for a nonsuit.

John next contends I should have granted a nonsuit on Terri’s negligence claim because she failed to prove there was a duty John owed her or that he was the factual cause of harm to her. See concise statement, ¶ no. 5. However, this argument is moot since the jury determined Terri was 60% negligent and therefore could not “recover under her negligence claim....” Verdict filed 3/18/2014, question 5; See 42 Pa.C.S. §7102(a).

John’s next contention is that I made an error by molding the jury verdict into the full measure of claimed damages when the jury found Terri 60% negligent. This argument is meritless for at least two reasons. First, John’s counsel agreed during trial to the jury not determining damages, to me molding the verdict based on the total damage claim and to the written verdict form I provided the jury. T., pp. 244-248 and 266-267. Second, the jury determination that Terri was 60% negligent barred her recovery for negligence. 42 Pa.C.S.§7102(a). But, the jury determinations that there was a contract between John and Domenic, that Terri was a third party beneficiary and that John breached the contract entitled Terri to be compensated for the damages resulting from the breach. The amount, $40,441.95, was the amount Domenic’s mother received from Prudential and was not disputed. Therefore, I was correct to mold the breach of contract verdict in favor of Terri to the full measure of claimed damages.

John next contends that I made an error by permitting the jury to consider the negligence claim because the “economic loss” and “gist of the action” doctrines allegedly prohibit a negligence claim if the claim can be redressed via a breach of contract claim. See concise statement, ¶ no. 7. This argument is moot because the jury found that Terri was 60% negligent with the written verdict form provided to the jury during deliberations specifying, “[i]f you have found Terri Bruzzese’s percentage is greater than 50 percent, Terri Bruzzese cannot recover under her negligence claim....” Verdict filed 3/18/2014, question 5. In addition, the holdings in the cases cited by John in his memorandum, including Scarpitti v. Weberg, 530 Pa. 336, 609 A.2d 147 (1992) and eToll, Inc. v Elias/Savion Advertising, Inc., 811 A.2d 10 (Pa. Super. 2002), have been limited to their facts by more recent appellate court decisions. In the 2004 Superior Court decision, Wisniski v. Brown & Brown Ins. Co. of PA, 2004 PA Super 211, 852 A.2d 1206, the plaintiffs asserted a “garden variety” negligence claim against insurance agents for failing to recommend flood insurance coverage on plaintiff’s building situated over a flowing stream. While the trial court granted summary judgment in favor of the insurance agents premised on Etoll, Inc., supra., the Superior Court held that insurance agents have a duty to customers to exercise skill and knowledge and therefore, reversed the trial court. Even though there was an insurance contract involved, the “gist of the action” doctrine did not preclude the plaintiffs’ negligence claim. Since Terri’s claim that John failed to submit the beneficiary change forms to Prudential also is a garden variety negligence claim against an insurance agent, pursuant to Wisniski Terri’s claim is valid.

John’s next contention is that I made an error “[b]y failing to charge on the theory that plaintiff had waived any right to recovery as a third-party beneficiary following plaintiff’s testimony, without objection, that she knew, prior to her husband’s death, that ‘one policy was changed over to me as beneficiary but the other [the policy at issue] wasn’t.’” Concise statement, ¶ no. 8. The premise for this waiver argument, that Terri testified to knowing prior to Domenic’s death that she was not the beneficiary, is false. By viewing the language quoted by John in context, it is crystal clear that Terri’s quoted testimony concerned what she found out from John after Domenic’s death:

Q. Miss Bruzzese, when did your husband pass away?
A. April 9, 2007
Q After your husband passed away, ma’am, how did you come to realize what the status of his life insurance policies were?
A. After he passed away his brothers, John and Joe, came to my house. John got on the phone, called prudential because that’s who the policies were taken out with. And he got off the phone and he said, “There’s a problem.” And I says, “What?” And he said one policy was changed over to me as beneficiary but the other one wasn’t.
And at that time I said, “Well, how can that happen? You were his agent.” And he said, “I don’t know.”

T., p. 72. The jury charge that John requested permits a finding of waiver against “[a] party who sanctions or fails to protest the breach of contract....” Original defendant’s proposed points for charge^ no. 10;Pa.SSJI (Civ.) 19.140. While David Martin testified he told Terri and Domenic in 1995 or 1996 that Terri was not the beneficiary on the prudential policies, Terri testified she did not recall such a discussion with Mr. Martin. T, pp. 92 and 168-169. In any event, Mr. Martin’s testimony was that in 1995 or 1996, when Terri was told she was not the beneficiary, she said “[tjhat’s not the way it’s supposed to be.” T, p. 92. Thus, Terri did not sanction or fail to protest the breach of contract. Therefore, the charge requested by John was inappropriate, and my refusal to charge the jury on waiver was correct.

John next contends that I made an error by not charging the jury that impossibility of performance by John would end his contractual obligations. See concise statement, ¶ no. 9. John premises this argument on a provision in the life insurance policy that prohibits agents from modifying the insurance policy. Id.; T, p. 78. Terri, however, never alleged that John alone could modify the insurance policy to make her the beneficiaiy. She simply alleged that during a meeting in 1983 John took the change of beneficiary documents that Domenic had signed but failed to submit them to prudential. See T., pp. 233-234 and 263. Since Terri never argued that John agreed he would modify the insurance policy to malee her the beneficiary, my denial of the charge on impossibility of performance was correct.

John’s next contention is that I made an error by not charging the jury that Terri had a duty to mitigate her damages. See concise statement, ¶ no. 10. John argues that Domenic did not mitigate damages by designating Terri the beneficiary after Mr. Martin told him in 1995 or 1996 his parents were still the beneficiaries. See T., pp. 236-237. However, the charge requested by John, Pa.SSJI (Civ.) 19.310, assumes the breach of contract and damages have already occurred when the duty to mitigate damages is imposed (“[a] party that has incurred damages because of the breach of contract has a duty to mitigate the damages caused by the breach...”) Since the breach and resulting damages did not happen until Domenic’s death, my decision not to charge the jury that Terri was obligated to mitigate her damages was correct.

John next contends I should have directed a verdict in his favor because Terri and Domenic allegedly admitted to knowing the beneficiary was not changed in 1995 or 1996 yet took no action to remedy the problem. See concise statement, ¶ no. 11. This basis for a directed verdict was not raised by John during the trial. See T, pp. 213-15. Therefore, it cannot be a basis for relief on appeal. See Pa. R.C.P. No. 227.1(b)(1). In addition, as mentioned above, John’s premise that Terri admitted knowing in 1995 or 1996 that she was not the beneficiary is incorrect. Finally, even if Terri and John knew in 1995 or 1996 that she was not the beneficiary, in 1997 Domenic did take action to make Terri the beneficiary. The result, however, was that she was named the beneficiary on only the prudential life policy Domenic purchased in 1974. See defendant’s exhibit K. Since this basis for a directed verdict was not raised during trial, Terri did not admit knowing she was not the beneficiary in 1995 or 1996 and John did take action to make Tern the beneficiary on one policy, my decision to deny to John’s motion for a directed verdict was correct.

John’s final contention is that I erred by not finding Terri’s contract and negligence claims are barred by the statute of limitations. See concise statement, ¶ no. 12. While John pled the bar of the statute of limitations under new matter, he did nothing at trial to raise it as a defense. Specifically, John’s counsel did not mention the statute of limitations defense in either his opening or his summation to the jury and did not submit a point for charge on the subject or include the subject in the proposed verdict form. Therefore, it cannot be the basis for relief on appeal. See Pa. R.C.P. No. 227.1(b)(1). In any event, John’s counsel actually suggested on the record during the trial that Terri filed her praecipe for writ of summons before the expiration of the statute of limitations. See T., pp. 37 and 175. Since the statute of limitations defense was not raised at trial and John’s counsel suggested at trial that it had not expired, my failure to find Terri’s claims barred was correct.

      . After the conclusion of all trial testimony, the parties agreed to dismiss additional defendant NFI, LLC, which allegedly was related to Mr. Martin. The parties also agreed to dismiss additional defendant Giovanni Bruzzese, as executor of the estate of Carmella Bruzzese, deceased, who allegedly was liable because the Estate received the death benefit from the Prudential life insurance policy.

      . Pursuant to my July 9, 2014 order and Pa.R.A.P. No. 1925(b), the deadline for John to file the concise statement is 21 days after entry of the order, which was July 30,2014. Therefore, John missed the deadline for filing the concise statement.

      . John also argues that Terri admitted there was no consideration given to him by her or eomenic to change the beneficiary because Terri responded by pleading this was a conclusion of law that required no response. Pennsylvania Rule of Civil Procedure No. 1029(a) requires responses only to averments of fact. Consideration is an essential legal element of a contract, hence John’s averment of no consideration is a conclusion of law and not an averment of fact. Terri’s response was, therefore, appropriate. See Pa.R.C.P. No. 1029(d)(“Averments in a pleading to which no responsive pleading is required shall be deemed to be denied.”)

      . The Pennsylvania Supreme Court in Bilt-Rite Contractors, Inc. v. The Architectural Studio, 581 Pa. 454, 483, 866 A.2d 270, 288 (2005) held that “a plaintiff is not barred from recovering economic losses simply because the action sounds in tort rather than contract law.” It also makes little sense to apply the “economic loss” doctrine to contracts for services. See Insurance Company of North America v. Cease Electric Inc., 276 Wis. 2d 361, 688 N.W. 2d 462 (2004).


text:
    Peerless Indemnity Insurance Co. v. Cincinnati Insurance Co.

      C.P. of Allegheny County,
    No. GD 13-017106; 1057 WDA 2014

      Michael Nerrone, for plaintiff.

      Adam Barnes, for defendant.
    Sept. 2, 2014
   HERTZBERG, J.,

— I write this opinion in support of my June 12, 2014 order of court granting summary judgment to Peerless Indemnity Insurance Company (“Peerless”) by declaring that Peerless does not owe insurance coverage to Wyatt, Inc. (“Wyatt”) in an underlying lawsuit against Wyatt.

The underlying lawsuit in this case stems from a construction project involving the renovation of several floors of a building in Downtown Pittsburgh. Wyatt was the general contractor for the renovation project. One subcontract agreement that Wyatt entered into was with Franklin Electric (the original defendant in the underlying action, “Franklin”). Franklin purchased a commercial general liability policy from Peerless for the renovation project. On March 10, 2009 Paul Zern (plaintiff in the underlying action, “Zern”) was painting an area where Franklin had completed electrical work. Zern came into contact with a live electrical wire and was injured. On February 28, 2011 Zern filed suit against Franklin. Franklin then joined Wyatt as an additional defendant in the underlying action. After being joined in the underlying action, Wyatt sought defense and indemnification from Peerless, asserting that it was an additional insured pursuant to the commercial general liability policy issued to Franklin by Peerless. Peerless determined that Wyatt did not qualify for coverage as an additional insured and on September 18, 2013 Peerless filed a complaint for declaratory judgment seeking a declaration that it did not owe any duty of coverage to Wyatt. On May 1, 2014 Peerless filed a motion for summary judgment. On May 20, 2014 Cincinnati Insurance Company (“Cincinnati”) and Wyatt filed a cross-motion for summary judgment. On June 3, 2014, argument was held before the undersigned on the motion and cross-motion for summary judgment. On June 12, 2014 I issued an order of court that granted Peerless’ motion for summary judgment, thus relieving Peerless from any duty to provide coverage to Wyatt in the underlying action. On July 3, 2014 Cincinnati and Wyatt filed a notice of appeal. On July 24, 2014 Cincinnati and Wyatt timely filed a concise statement of the errors complained of on appeal (“concise statement”). Pursuant to Pa.R.A.P. No. 1925(a), this opinion addresses the allegations of errors listed in the concise statement.

A brief overview of the insurance policy involved and its purpose will help to explain this dispute. When Wyatt entered into a subcontract with Franklin, the contract required Franklin to obtain insurance coverage that would indemnify Wyatt in the event that Wyatt was subject to liability as a result of Franklin’s work. Franklin obtained insurance from Peerless and Endorsements 22-132 and 22-135 were added to Franklin’s insurance policy. These endorsements set forth the circumstances that trigger coverage for Wyatt as an additional insured under Franklin’s policy, as well as the exclusions from coverage, which would preclude Wyatt from coverage as an additional insured. Meanwhile, Wyatt purchased its own insurance coverage for the project from Cincinnati. Peerless Endorsements 22-132 and 22-135 provide coverage to Wyatt only in the event that Wyatt is subject to vicarious liability based on the acts or omissions of Franklin. When reading the endorsements as a whole, it is clear that vicarious liability is the only situation in which coverage for Wyatt is contemplated. The exclusions in each endorsement clearly establish that coverage is not provided for Wyatt’s negligence, as that is covered by Wyatt’s Cincinnati policy. Wyatt places great focus on the fact that the complaint in the lawsuit between Zem and Franklin (in which Zem alleges that Franklin is liable for his injuries) is incorporated into the first amended complaint to join. This incorporation is irrelevant, since the first amended complaint to join essentially alleges that Wyatt’s negligence caused Zem’s injuries, but not that Wyatt is vicariously liable for Franklin’s conduct. The averments that Wyatt’s negligent acts and omissions were responsible for Zern’s injuries take the case out of the realm of solely an instance of vicarious liability and places it squarely into the exclusions created in Endorsements 22-132 and 22-135. Further, holding that Peerless must provide coverage to Wyatt would lead to an illogical result. In the underlying lawsuit, Franklin is suing Wyatt. If I had denied Peerless’ motion for summary judgment, the result would be that I would require Franklin’s insurer to provide insurance coverage to the very party against whom Franklin is lodging a lawsuit! Certainly, that was not the intent of the endorsements obtained pursuant to the subcontract. Thus, it is clear why granting Peerless’ motion for summary judgment was appropriate.

It is also helpful to discuss what determines when coverage under an insurance policy has been triggered. Whether an insurer has a duty to defend is determined by looking at the factual allegations contained in the underlying complaint. Mutual Benefit Insurance Company v. Haver, 555 Pa. 534, 725 A.2d 743 (1999). In fact, an insurer’s duty to defend is “fixed solely by the allegations in the underlying complaints.” Aetna Casualty and Surety Company v. Roe, et al, 437 Pa. Super. 414, 420, 650 A.2d 94, 98 (1994) citing Stidham v. Millvale Sportsman’s Club, 421 Pa. Super. 548, 618 A.2d 945 (1992). Thus, when ruling on plaintiff’s motion for summary judgment, I was constrained to look to the facts in the underlying (first amended) complaint to join additional defendant Wyatt.

Now I will address the specific allegations of error found in the concise statement. In paragraph 4 of the concise statement, Cincinnati and Wyatt allege that I erred “by failing to declare as a matter of law that Wyatt, Inc. was an additional insured...” under Endorsement 22-132 of the Peerless policy. Endorsement 22-132 is titled “additional insured — owners, lessees or contractors — automatic status when required in construction agreement with you.” Endorsement 22-132 provides coverage when bodily injury is caused, in whole or in part, by the insured’s acts or omissions or the acts or omissions of those acting on the insured’s behalf. See paragraph A of Endorsement 22-132. However, Endorsement 22-132 also contains exclusions that will prevent an additional insured from receiving coverage. Insurance coverage does not apply when: bodily injury arises from the sole negligence of the additional insured, or when bodily injury arises from the failure to render supervisory activities. See paragraph B of Endorsement 22-132. The factual allegations in count I of the first amended complaint to join additional defendant clearly preclude defendant Wyatt from coverage under Endorsement 22-132 as count I alleges both acts of negligence and failure of supervisory duties on the part of defendant Wyatt. When examining the facts of an underlying complaint to determine insurance coverage, “it is the face of the complaint and not the truth of the facts alleged therein which determines whether there is a duty to defend.” Aetna at 422, citing D'Auria v. Zurich Insurance Company, 352 Pa. Super. 231, 507 A.2d 857 (1986). Therefore, my decision not to declare Wyatt an additional insured under Endorsement 22-132 was correct.

In paragraphs 5 and 6 of the concise statement, Cincinnati and Wyatt allege that I erred by “failing to declare as a matter of law that the allegations in the first amended complaint to join...were legally insufficient to satisfy [Peerless’] burden of proof’ that Wyatt is excluded from coverage under subparagraph B of Endorsement 22-132. Subparagraph B of Endorsement 22-132 provides that insurance coverage for an additional insured does not apply to bodily injury arising out of supervisory or inspection activities. The complaint to join very clearly alleges facts that fall within the exclusion in Endorsement 22-132. The party moving for summary judgment must present evidence that “clearly exclude[s] any genuine issue of material fact.” Id. at 420. Since the obligation of an insurer to defend is based on the facts of the complaint alone, the underlying complaint to join is sufficient proof to show that Peerless is entitled to summary judgment.

In paragraph 7 of the concise statement, Cincinnati and Wyatt allege that I erred “by failing to declare as a matter of law that Wyatt, Inc. was an additional insured under the Peerless policy by operation of...[Endorsement 22-135]....” Endorsement 22-135 is titled “Additional Insured — Automatic Status When Required in a Construction Agreement with you — Contractors —. Completed Operations.” Endorsement 22-135 provides coverage to an additional insured when liability for bodily injury is caused by an insured’s work or is included in an insured’s “products-completed operations hazard.” See paragraph A of Endorsement 22-135. Endorsement 22-135 also contains exclusions when coverage will not be provided to an additional insured. Endorsement 22-135 states that “[t]his insurance does not apply to” bodily injury arising out of “any act or omission of the additional insured or the additional insured’s employees,” nor does it apply to bodily injuiy arising out of the failure to render supervisoiy services. See paragraph B of Endorsement 22-135. Count I of the second amended complaint to join additional defendant Wyatt contains multiple factual allegations that the bodily injuries of Zem were directly or proximately caused by the acts or omissions of Wyatt. Thus, when comparing the allegations of the underlying first amended complaint to join defendant Wyatt with the terms of Endorsement 22-135, it is clear that Wyatt is not entitled to coverage. See Aetna at 424, citing Britamco Underwriters, Inc. v. Weiner, 431 Pa. Super. 276, 636 A.2d 649 (1994). Therefore, my decision not to declare Wyatt an additional insured under Endorsement 22-135 was correct.

In paragraphs 8 and 9 of the concise statement, Cincinnati and Wyatt allege that I erred by “failing to declare as a matter of law that the allegations in the first amended complaint to join...were legally insufficient to satisfy [Peerless’] burden of proof’ that Wyatt is excluded from coverage under subparagraph B of Endorsement 22-135. Subparagraph B of Endorsement 22-135 provides that insurance coverage for an additional insured does not apply to bodily injury arising out of the acts or omissions of the additional insured or the additional insured’s employees, nor is coverage applicable for bodily injury arising out of supervisory or inspection activities provided by the additional insured. The complaint to join very clearly alleges facts that fall within the exclusions in Endorsement 22-135. The party moving for summary judgment must present evidence that “clearly exclude[s] any genuine issue of material fact.” Aetna at 420. Given that the obligation of an insurer to defend is based on the facts of the complaint alone, the underlying complaint to join is sufficient proof to show that plaintiff is entitled to summary judgment. Therefore, the allegations in the first amended complaint to join satisfied Peerless’ burden of proving Wyatt is excluded from coverage.

      . In the Zern v Franklin lawsuit, Franklin filed documents entitled “Complaint to Join Additional Defendant, Wyatt, Inc.,” “First Amended Complaint to Join Additional Defendant, Wyatt, Inc.,” and “Second Amended Complaint to Join Additional Defendant Wyatt, Inc.” Since the errors alleged in the concise statement refer only to the first amended complaint to join, I also will refer only to that document. The differences between the first and second amended complaints are minimal and insignificant to the disputed issues on appeal.