author: BRATTON, J,

text:
    Hansel v. DeArmitt

      C.P. of Dauphin County,
    no. 2912 S 1998.

      JohnR. Zonarich and John B. Zonarich, for plaintiffs.

      Andrew Briggs, for defendants DeArmitt and Family Medicine Center of Forest Hills.

      Francis E. Marshall Jr. and Thomas M. Chairs, for defendants Smeltzer, and Cowley Medical Associates P.C.
    November 12, 2004
   BRATTON, J,

Now before this court is the motion of defendant Don A. DeArmitt M.D. for a protective order to preclude the plaintiff from videotaping the discovery deposition of defendant Dr. DeArmitt or, in the alternative, a motion to compel the videographer to film both the counsel taking the deposition and Dr. DeArmitt concomitantly. A discovery conference was held on October 4, 2004, at which defendant DeArmitt’s motion was discussed with counsel for all parties. Because we find that defendant DeArmitt has failed to provide sufficient grounds for granting the protective order, we will deny both of the alternatively proposed motions.

Pennsylvania Rule of Civil Procedure 4017.1 states that “[a]ny deposition taken upon oral examination may be recorded by videotape. Except as provided by this rule, the rules of this chapter governing the practice and procedure in depositions and discovery shall apply.” Pa.R.C.P. 4017.1(a). No exceptions exist — either within Rule 4017.1 itself or in any other discovery rule — to the blanket language of that rule. Nevertheless, defendant DeArmitt has argued that the plaintiffs must show a special need to record his deposition on videotape. Defendant DeArmitt relies on two Allegheny County decisions to support his argument. First, defendant DeArmitt cites Osborne v. Sears, Roebuck and Co., 133 P.L.J. 471 (Allegheny Cty. 1985). In Osborne, the honorable Stanton Wettick prohibited a videotaped reenactment of an accident. Because the Osborne case involved a videotaped reenactment and not a videotaped deposition, we find this case inapposite and unpersuasive. In the second case relied on by defendant DeArmitt, Judge Wettick is cited as having held that, in the absence of the showing of special need to record a deposition by videotape, a party may not use such a procedure solely for the purpose of discovery. Tillett v. Shento, 131 P.L.J. 297 (Allegheny Cty. 1985). But Judge Wettick expressly stated in Tillett that his opinion does not apply to a videotape deposition of a medical witness or any witness called as an expert because these depositions may be used at trial. See Pa.R.C.P. 4017.1(g). Because Dr. DeArmitt is a medical witness, as well as a party in the case, we find that the defendant’s reliance on Tillett is misplaced.

Furthermore, to the extent that the defendants’ interpretation of the Tillett decision is that videotaping of any deposition requires a showing of special need, we must respectfully disagree with that proposition. We note that Rule 4017.1 is written in the broadest of language, and we must presume that our Supreme Court intended just what the rule says, i.e., that any deposition may be videotaped. We also presume that the drafters of the rule considered the possibility that videotaping a deposition may involve additional expense and may require some additional preparation on the part of the deponent or the parties. If the drafters’ intent had been to require a party to make a showing of special need before it could videotape a deposition, the drafters would have, we assume, included that qualification in the rule. The plain language of Pa.R.C.P. 4017.1, however, permits the videotaping of any deposition, without any exception or pre-condition and regardless of whether the deposition is to be used for discovery or for trial purposes.

Rule 4012 provides that “for good cause shown, the court may make any order which justice requires to protect a party or person from unreasonable annoyance, embarrassment, oppression, burden or expense . . . .” Pa.R.C.R 4012(a). Dr. DeArmitt has stated in his affidavit that giving his deposition in front of a video camera will subject him to stress and emotional discomfort. We do not find that these averments constitute sufficiently compelling grounds upon which to grant a protective order pursuant to Rule 4012.

We sympathize with Dr. DeArmitt’s anticipated angst at the thought of testifying under oath and in front of a video camera. We may even, on some level, accept the doctor’s implication or allegation that the plaintiffs’ goal in seeking to videotape his testimony is to make the deposition taxing and stressful for him. We anticipate that Dr. DeArmitt’s deposition may be replete with lengthy pauses for review of documents and the like. We also anticipate that the need will arise for off-the-record discussions between counsel or between the deponent and his lawyer. Such breaks in the proceedings will undoubtedly make the deposition more time-consuming and, in the end, substantially less useful as a discovery tool and also somewhat less useful at trial in these proceedings. Often in medical malpractice cases where the issues are complex and highly technical, questions that may appear to laypersons to be quite simple often require careful and lengthy answers by medical professionals. We suspect that frequent pauses, shuffling of papers or off-the-record conversations between counsel or between deponent and his attorney will produce less than riveting videotape testimony for presentation to the jurors. Although extensive editing will likely be required before Dr. DeArmitt’s videotape can be played for the jurors, that risk is one borne by the party videotaping the deposition and those editing decisions, like objection decisions, will be left to the discretion of the trial judge at the time of the trial.

We believe that if the drafters of Rule 4017.1 had intended to limit the videotaping of depositions in these or any other circumstances, they surely could have provided such a limitation in the Rules of Civil Procedure, but they chose not to do so. Unlike Judge Wettick’s findings in Tillett, we find nothing in the rule to support the conclusion that it was not our Supreme Court’s intention to permit videotape depositions as a matter of course. Had that been the Supreme Court’s intention, we must assume that the court would have explicitly said so, rather than stating that “[a]ny deposition ... may be recorded by videotape” as Rule 4017.1(a) currently provides. We will therefore deny defendant DeArmitt’s motion for protective order to preclude the plaintiffs from videotaping his deposition.

Defendant DeArmitt also submitted an alternate request should his motion for protective order be denied, i.e., that the videographer be required to simultaneously videotape both deposing counsel and defendant DeArmitt during the deposition, and show both individuals via a split screen. Because defendant’s motion provided no substantive basis or explanation why such a procedure would relieve his additional anxiety or stress, we will also deny defendant DeArmitt’s motion to compel the videographer to film both the counsel taking the deposition and Dr. DeArmitt concomitantly.

For the foregoing reasons, we enter the following:

ORDER

And now, November 12,2004, upon consideration of the motion of Don A. DeArmitt M.D. for a protective order to preclude the plaintiff from videotaping the discovery deposition of defendant Dr. DeArmitt or, in the alternative, the motion to compel the videographer to film both the counsel taking the deposition and Dr. DeArmitt concomitantly, both motions are hereby denied.

      . As was argued to Judge Wettick in the Tillett case, plaintiff’s counsel in the instant case has pointed out that videotaping the deposition may provide him with a better tool with which to demonstrate for his client’s insurer the defendant’s demeanor in discussions of the strength of the defendant’s position and, therefore, may prove of assistance in evaluating settlement possibilities. Judge Wettick found such a benefit to be “marginal,” a finding with which we also respectfully disagree. The creditability of a witness, particularly of a party, is often subject to evaluation solely as a result of a deposition, and the videotaping of a deposition provides far better evidence than either the cold words on the page of a transcript or a description of the witness’ demeanor by an attorney who was present for the deposition.


source: Caselaw Access Project

author: WORTHINGTON, J,

license: Public Domain

text:
    Jenkins v. Jenkins
    C.P. of Monroe County,
    no. 1204 D.R. 2001, no. 8089 CIVIL 2001.

      Robin A. Spishock, for plaintiff.

      C. Daniel Higgins Jr., for defendant.

      October 25, 2004
   WORTHINGTON, J,

Plaintiff, Chong Suk Cha Jenkins (Wife) and defendant, Allan Paul Jenkins (Husband) were married on May 27, 1981. On November 28, 1994, the parties entered into a “post-nuptial agreement.” They did not physically separate until August of2000. OnNovember 9,2001, Wife filed a complaint requesting a divorce pursuant to section 3301(c) ofthe Pennsylvania Divorce Code. OnFebruary 13,2004, Wife filed a motion to convert the divorce action to a divorce pursuant to section 3301(d), a motion for entry of decree in divorce, a motion to enforce the postnuptial agreement, and a motion for award of counsel fees. On February 18, 2004, we issued a rule returnable on Husband and he filed an answer on March 9, 2004, alleging that the agreement should not be enforced because neither party had been abiding by its terms. Husband further maintained that Wife was precluded from seeking relief by the statute of limitations and the doctrine of laches. Arguments were held on August 10, 2004, and Wife’s motions are now before us for disposition.

Neither party objects to the entry of a decree in divorce pursuant to section 3301(d) of the divorce code. Husband and Wife have met all of the requirements of section 3301(d) and have been separated in excess ofthe requisite statutory period. We will therefore convert the instant divorce action from section 3301(c) to section 3301(d) and enter a decree in divorce.

A consideration of whether the agreement at issue is actually a postnuptial agreement, or more precisely a midnuptial agreement, is not necessary for the purposes of resolving this dispute, as such a distinction turns on little more than semantics. The relevant discussion in this case is whether the agreement at issue is a postnuptial agreement or a separation agreement. The answer depends upon the intent of the parties as gathered from all of the relevant facts.

A postnuptial agreement is typically a contract entered into after marriage by a husband and wife, generally involving the property or property rights of the parties. Vaccarello v. Vaccarello, 563 Pa. 93, 97, 757 A.2d 909, 911 (2000). A postnuptial agreement differs from other types of marital agreements in that it generally resolves property rights definitively. Where spouses desire to “settle and determine their respective property rights finally and for all time, [their agreement] should be construed as a postnuptial agreement.” Id., citing Makowski v. Makowski, 163 Pa. Super. 441, 443, 62 A.2d 71, 72 (1948). Moreover, liability under a postnuptial agreement is not automatically terminated by reconciliation of the parties or subsequent divorce. Commonwealth ex rel. Egolf v. Egolf, 49 D.&C.2d 400, 401 (1970); Commonwealth ex rel. DiValerio v. DiValerio, 169 Pa. Super. 477, 479-80, 82 A.2d 687, 688 (1951).

This is in sharp contrast to separation agreements. A separation agreement does not constitute, nor is it intended to constitute, “a full and final determination of the separate property rights of the parties.” Wareham by Trout v. Wareham, 716 A.2d 674, 677 (Pa. Super. 1998). Rather, separation agreements “customarily [represent] a surrender of the wife’s right to support in consideration of some property settlement.” Id. Furthermore, a subsequent reconciliation of the parties will terminate the separation agreement. Vaccarello at 97, 757 A.2d at 911, citing In re Ray’s Estate, 304 Pa. 421, 426, 156 A. 64, 65 (1931).

Here, it is our determination that Husband and Wife, in creating and signing the agreement, specifically intended for it to survive any potential subsequent reconciliation. The agreement provides:

“[N] either party presently contemplates any action to dissolve the marriage and each expresses the wish that the marriage continue until the death of one of them; but, each party recognizes the fragility of the situation and the economic and emotional realities of life . . . .” Postnuptial agreement at 1, 2.

Not only did the agreement specifically contemplate the potential for a subsequent reconciliation, it also contained a specific provision granting each party the right to pursue a divorce. Said provision imparts:

“This agreement shall not prevent or be construed to prevent either party from instituting proceedings or continuing proceedings already instituted to secure a divorce on just and proper grounds, nor shall it prevent the other party from making any defense thereto.” Postnuptial agreement at 18, paragraph 17.

It is clear that the agreement, as written, contemplated a possible reunion of the parties. Additionally, the potential for a subsequent divorce was also expressly contemplated by both parties at the time they entered into the agreement. The Superior Court has held that when a postnuptial agreement is a complete property settlement agreement and maintains its independent contractual status, any subsequent reconciliation or remarriage of the parties does not abrogate the agreement. Wareham by Trout v. Wareham, 716 A.2d 674, 677 (Pa. Super. 1998), citing Commonwealth ex rel. DiValerio v. DiValerio, 169 Pa. Super. 477, 479-80, 82 A.2d 687, 688 (1951). Because the agreement at issue anticipated divorce and was intended to survive a decree in divorce, the agreement maintains its independent contractual status despite the subsequent reconciliation of the parties. We therefore will not terminate the agreement on the ground that the parties resumed and maintained a relationship for approximately six years following the execution of the agreement.

Furthermore, we find that both Husband and Wife, via the terms of the agreement, expressed an unequivocal desire to settle and determine their respective property rights finally and for all time. The language of the agreement states, in pertinent part:

“[T]he parties intend by this agreement to fix and determine the equitable distribution rights of each of them in any and all property of every nature and description and wheresoever situated which the other presently owns or may hereafter acquire during his or her lifetime, and to mutually restrict the rights that each might otherwise have or hereafter acquire in the property, income or estate of the other by virtue of the marriage in order to preserve his or her own rights to freely dispose of his or her property or income during his or her lifetime, and the parties also desire by this agreement to fix and determine their rights and obligations with respect to alimony, alimony pendente lite, support and other economic issues in the event either party wishes at any time to bring an action to dissolve the marriage; and ...

“[B]oth parties have discussed the terms and conditions, the implications and monetary considerations involved between themselves, and they desire to set forth their agreement in writing, without any force, coercion, intimidation or promise other than those convenants [sic] expressed herein, and they do fully and voluntarily enter into this agreement; and...

“[I]t is the desire of the parties to settle as between themselves their respective or mutual liabilities with regard to property rights and various claims by and between themselves and/or third parties ...Postnuptial agreement, at 2-3.

Upon close reading of the language, we find that the agreement illustrated a clear desire on the part of both parties to determine and settle their respective property rights finally and for all time. The parties clearly intended to be bound by the agreement, despite the potential for a subsequent reconciliation. It is therefore our conclusion that the agreement between the parties is a postnuptial agreement.

Our determination that the document at issue is a post-nuptial agreement is significant because, under Pennsylvania law, postnuptial agreements are contracts. Laudig v. Laudig, 425 Pa. Super. 228, 232, 624 A.2d 651, 653 (1993). As such, postnuptial agreements should be evaluated in accordance with contract principles and under the same criteria as are applicable to other types of contracts. Commonwealth ex rel. Jones v. Jones, 216 Pa. Super. 1, 3-4, 260 A.2d 809, 810 (1969). A postnuptial agreement may not be enforced by special relief under the Divorce Code, which provides for enforcement of marital agreements in conjunction with divorce, if the agreement is not a complete property settlement agreement and the marriage is not dissolved. See Laudig at 232-33, 624 A.2d at 653.

Postnuptial agreements are presumed to be valid and binding. In re Estate of Kester, 486 Pa. 349, 353, 405 A.2d 1244, 1246 (1979); see also, Hertzog v. Hertzog, 25 D.&C.4th. 214, 216 (1995). The standard for enforceability is remarkably straightforward: “[ajbsent fraud, misrepresentation, or duress, spouses should be bound by the terms of their agreements.” McMahon v. McMahon, 417 Pa. Super. 592, 599, 612 A.2d 1360, 1363 (1992). Valid consideration for postnuptial agreements is satisfied by mutual promises to relinquish all interest in each other’s property. Ratony Estate, 443 Pa. 454, 459, 277 A.2d 791, 794 (1971). Aparty seeking to invalidate the agreement has the burden of proof and must present evidence that is clear and convincing. In re Estate of Kester, 486 Pa. 349, 353, 405 A.2d 1244, 1246 (1979).

This agreement was entered into freely by both parties. Husband and Wife each agreed to abide by the terms thereof and, in doing so, agreed to relinquish all interest in each other’s property. Moreover, there is no evidence of fraud, misrepresentation, or duress in the creation of the agreement. Therefore, we need only examine the terms of the writing itself to determine their meaning. Creeks v. Creeks, 422 Pa. Super. 432, 435, 619 A.2d 754, 756 (1993). We find that the language of the agreement is clear and unambiguous. As such, in interpreting the language, our paramount goal is to ascertain and give effect to the intent of the contracting parties. Lyons v. Lyons, 401 Pa. Super. 271, 277, 585 A.2d 42, 45 (1991). In other words, because the contractual terms are clear and unambiguous, they must be given effect without reference to matters outside of the contract. Purdy v. Purdy, 715 A.2d 473, 475 (Pa. Super 1998). We must therefore construe the contract as a whole and the parties’ intentions must be ascertained from the entire instrument. See id. We may not re-write it or give it a construction that conflicts with the accepted plain meaning of the language used. Creeks v. Creeks, 422 Pa. Super. 432, 435, 619 A.2d 754, 756 (1993). A contract will be deemed unambiguous so long as reasonable persons could not differ as to the contract’s interpretation. Purdy at 475. We find that the language of the agreement is clear and unambiguous. We will therefore enforce the plain meaning.

The parties to this matter entered into a postnuptial agreement on November 28,1994, but continued to share the marital residence until August of 2000. The agreement of the parties anticipated a possible eventual separation and divorce, and therefore intended to resolve the economic and property distribution issues of the parties for all time. The agreement provided for, among other things, the disposition of the marital residence located at HC 62 Box 108L Sullivan Trail, Tobyhanna Township, Long Pond, Monroe County, Pennsylvania. Husband and Wife are joint owners of this real estate. Paragraph 13 of the agreement provides that upon the institution of a divorce action, the marital residence will be disposed of in accordance with the following procedure:

“(A) Husband agrees to remove his person and belongings, as divided by the parties [sic] mutual agreement hereinbefore, from the marital residence and marital real property and Husband does hereby agree to give Wife and [sic] sole and exclusive possession of the martial [sic] residence and martial [sic] real property. Husband does hereby agree that he shall not interfere with Wife’s sole and exclusive possession of the martial [sic] real property. Should Husband violate this provision in any manner Husband consents to the entry of an injunction to prohibit and prevent future violation of this provision.

“(B) Upon separation and/or institution of a divorce action Husband agrees to and does hereby set over, transfer and assign all of his right, title and interest to the above-referenced premises or any subsequent martial [sic] residence and martial [sic] real property to Wife, subject to any existing mortgage lien or encumbrance thereon, which shall be and is expressly assumed by Wife. It is specifically understood and agreed that Wife does not hereby assume any other liens or encumbrances, whether created by Husband alone or resulting from any actions of Husband and Wife. Husband agrees to save harmless Wife and indemnify her with respect to and from any and all liability and/or claims and/or damages that she may sustain or become liable or answerable for or shall pay upon, any liens or encumbrances upon said premises resulting from any actions of Husband alone.

“(C) Husband shall transfer and agrees to and does hereby transfer and assign to Wife all of his right, title and interest in and to insurance policies of any nature whatsoever relating specifically and solely to said premises and contents therein. Husband shall, upon separation and/or institution of a divorce action, deliver forthwith with the said policies to Wife.

“(D) Husband shall, upon separation and/or institution of a divorce action, promptly execute and deliver to Wife a deed duly acknowledged in such form as counsel for Wife shall prepare, conveying all of his right, title in said premises to Wife, and shall execute all other documents and instruments required to effectuate the transfer of said premises to Wife.” Postnuptial agreement at 14-16, paragraph 13.

Wife now seeks to enforce the postnuptial agreement, particularly the aforementioned language. She alleges that since the parties’ physical separation, Husband has been abiding by the terms of the agreement in that he was paying the mortgage on the marital property in lieu of paying child and spousal support. This was in accordance with paragraph 16(A) of the agreement, which provides:

“In the event of a separation and/or institution of a divorce action Husband hereby agrees that he will pay each and every current monthly mortgage obligation, then owning [sic] upon the martial [sic] residence or martial [sic] real property including taxes and insurance, for support and the parties’ minor children . . . .” Postnuptial agreement at 17-18.

Wife claims that she has not assumed the mortgage to the property, as required by the agreement, because she was told that because both she and Husband are listed on the deed to the property, both she and Husband must be on the mortgage as well. In other words, because Husband has not transferred the deed to Wife in accordance with paragraph 13(D), Wife was not obligated to assume the mortgage.

Conversely, Husband alleges that the postnuptial agreement should not be enforced because various changes have taken place since the agreement was signed, and thus were not specifically contemplated by the agreement. Husband maintains that the parties have not complied with paragraph 13(A) of the agreement, regarding the removal of all of Husband’s personal belongings from the marital residence. He further asserts that Wife has failed to assume the mortgage in her name. Husband therefore proposes that Wife has waived the postnuptial agreement by failing to abide by, or compelling Husband to abide by, the terms thereof.

Because the agreement did not merge into the divorce decree, it stands as a separate contract subject to the law governing contracts. Where the terms of the contract are clear and unambiguous, we must enforce their plain meaning. Where the terms are not clear, we must adopt the construction that “gives effect to the parties’ reasonable and probable intent, in view of the surrounding circumstances and purposes of the contract.” Kohn v. Kohn, 242 Pa. Super. 435, 442, 364 A.2d 350, 353 (1976), citing Unit Vending Corp. v. Lacas, 410 Pa. 614, 617, 190 A.2d 298, 300 (1963).

We find that during their period of reconciliation, the parties did not follow all of the terms or obligations of the agreement. Husband argues that the postnuptial agreement is waived because the parties failed to abide by the provisions thereof, namely Husband failed to remove all of his property from the marital home and Wife failed to make him do so. Although we agree with Husband’s factual assertion, we disagree with the legal conclusion he draws from it. Husband’s failure to remove his personal belongings from the marital home, while not in keeping with the provisions of the agreement, does not constitute waiver of the agreement. The agreement could not be modified or abandoned absent requisite formality. See Hertzog v. Hertzog, 25 D.&C.4th 214, 217 (1995). Here, Husband never attempted to revise or invalidate the agreement. We therefore find that his waiver argument has no merit.

During the course of their reconciliation, Husband and Wife executed mortgages secured by their marital residence. In doing so, the parties jointly and severally obligated themselves to such loans. Until now, Wife never tried to assume the mortgages entirely nor did she demand that the deed be transferred into her name. Likewise, Husband never attempted to stop paying the mortgage nor did he offer to transfer the deed to Wife. Under the agreement, Husband was to “upon separation and/or institution of a divorce action, promptly execute and deliver to Wife a deed.” Postnuptial agreement at 16, paragraph 13(D). The agreement’s provisions pertaining to this obligation are clear and unambiguous. The parties clearly intended for said conveyance to occur. Husband knew from the time of the agreement’s formation that it was his obligation to execute a deed for the premises to Wife, but willfully failed to do so. When the parties re-mortgaged their home twice, Husband signed his name to both mortgages. We will not allow him to hide behind a changed circumstances argument now.

Postnuptial agreements are contracts and are presumed to be valid. The burden was therefore on Husband to prove that the agreement is not valid. Id. at 216, citing Wolfe v. Wolfe, 341 Pa. Super. 313, 317, 491 A.2d 281, 283 (1985). Upon careful review of the terms of the agreement, in view of the purpose thereof and in light of the surrounding circumstances, we find that Husband failed to meet his burden.

Husband further argues that Wife’s motion for enforcement of the postnuptial agreement is barred by the statute of limitations and/or the doctrine of laches. We disagree. The discovery rule prevents the statute of limitations from commencing until the plaintiffs know or reasonably should know: (1) that they have been injured, and (2) that the injury has been caused by another party’s conduct. Haggart v. Cho, 703 A.2d 522, 526 (Pa. Super. 1997). As is the case with all contracts, the statute of limitations does not begin to run until the rights and obligations of the parties to the contract are realized. In this case, the relevant time would be August of 2000, the date of separation. Wife filed a complaint in divorce on November 9,2001. She filed to enter a decree in divorce and incorporate the agreement on February 13,2004. This is well within the four-year statute of limitations for contracts. However, we need not even scrutinize the relevant time frame because, in the case of continuing contracts, such as postnuptial agreements, where the duties of the parties are ongoing, the statute of limitations generally does not run. Dean v. Township of Bensalem, 26 D.&C.3d 154, 161 (1983). We therefore conclude that because the agreement is governed by contract law and the obligations of the parties under the agreement are continuing, the statute of limitations is not an applicable defense for Husband.

Husband further alleges that Wife is barred from recovering the relief she requested by the doctrine of laches. Laches is the failure to assert a right for an unreasonable and unexplained length of time. See Patten v. Vose, 404 Pa. Super. 426, 429, 590 A.2d 1307, 1309 (1991). It is based on “some change in the condition or relation of the parties which occurs during [a] period [that] the complainant unreasonably failed to act.” Id. To demonstrate a successful claim based on the doctrine of laches, the party asserting the doctrine must show not only a passage of time, but also a resulting prejudice to the party asserting the doctrine. Id. It is important to be mindful of the fact that laches will not be imputed by the mere passage of time, but requires an evaluation of all circumstances of a particular case. Lindenfelser v. Lindenfelser, 383 Pa. 424, 426, 119 A.2d 87, 88 (1956), citing Schireson v. Shafer, 354 Pa. 458, 463, 47 A.2d 665, 668 (1946).

The issue of laches is a factual issue to be decided according to the circumstances of each particular case. Patten v. Vose, 404 Pa. Super. 426, 429, 590 A.2d 1307, 1310. Husband asserts the defense of laches because Husband and Wife have not been in compliance with paragraph 13(A) of the agreement, regarding the removal of Husband’s belongings from the marital residence upon separation. We find that Husband has failed to demonstrate how he has been prejudiced by maintaining some of his belongings in the marital residence for the past four years.

Plusband further asserts the defense of laches because Wife has not assumed the mortgages solely in her name. Husband claims he is prejudiced by the fact that Wife allowed an inordinate amount of time to elapse between the parties’ entry into the agreement, their eventual separation, and Wife’s instant motion for enforcement. During that protracted period, Husband continued to pay the mortgages, taxes, and utilities for the marital property, with both the knowledge and consent of Wife. Husband therefore argues that he is greatly prejudiced by Wife’s attempt to enforce the agreement because Husband paid the mortgage for the property since 1994, however he will not receive any reimbursement from Wife for the decade worth of payments made. Husband further proposes that Wife has come to court with unclean hands in that she is seeking our use of equitable powers to enforce the agreement despite her own noncompliance with the agreement. Specifically, section 13(A) of the agreement requires Wife to assume any existing mortgage lien or encumbrance upon the real property concurrently with Husband’s transfer of his property right. Husband argues that despite this obligation, Wife never assumed any of the mortgages against the property.

We find that Husband has failed to prove the necessary elements to successfully assert the defense of laches. Wife informed the court that she did not assume the mortgages because she was operating under the belief that she was not allowed to do so while the deed was not in her name. Husband failed to transfer the deed to Wife as required by the agreement. We will not permit Husband to argue that the agreement cannot be enforced because Wife failed to act, when Wife’s reason for failing to act is inextricably linked to Husband’s failure to act. We find that Wife’s delay in seeking enforcement of the agreement, where Husband had not changed his position in anticipation that Wife’s claims were waived, especially where the statute of limitations has no applicability, is not prejudicial. See Hicks v. Saboe, 521 Pa. 380, 386, 555 A.2d 1241, 1244 (1989); Kay v. Kay, 460 Pa. 680, 684, 334 A.2d 585, 587 (1975). It is therefore our determination that the doctrine of laches does not preclude us from granting the equitable relief of specific performance to Wife.

Moreover, not only has Husband failed to establish that there was any prejudice to him as a result of the delay in Wife’s action, but he has also failed to properly plead the defense of laches. The doctrine of laches is a defense in equity. It therefore must be pled in a “new matter” or else it is deemed waived. Pa.R.C.P. 1030. Rule 1030(a) of the Pennsylvania Rules of Civil Procedure provides, in pertinent part:

“All affirmative defenses [except assumption of risk, comparative negligence, and contributory negligence, which need not be pleaded] including but not limited to the defense of accord and satisfaction, arbitration and award, consent, discharge in bankruptcy, duress, estop-pel, failure of consideration, fair comment, fraud, illegality, immunity from suit, impossibility of performance, justification, laches, license, payment, privilege, release, res judicata, statute of frauds, statute of limitations, truth and waiver shall be pleaded in a responsive pleading under the heading ‘new matter.’ ” Pa.R.C.P. 1030. (emphasis added)

Husband failed to raise the defense of laches in a new matter. He merely asserted it in his answer to the rule returnable. As such, we find that defendant has waived this defense.

We therefore make the following determinations and conclusions: Husband and Wife entered into a valid post-nuptial agreement. Husband breached said agreement by willfully failing to transfer a deed for the premises located at HC 62 Box 108L Sullivan Trail, Tobyhanna Township, Long Pond, Monroe County, Pennsylvania to Wife. Wife’s action is not barred by the statute of limitations, nor is it barred by the doctrine of laches. Based upon the particular facts of this case, we find that specific performance of the postnuptial agreement is justified.

In Pennsylvania, a property settlement survives the divorce decree and is not merged therein where the parties have clearly and unambiguously expressed their intent that the agreement survive the entry of the divorce decree. D’Huy v. D’Huy, 390 Pa. Super. 509, 517, 568 A.2d 1289, 1293 (1990). Therefore, if an agreement survives the divorce decree, we will enforce the property settlement agreement between a husband and wife in accordance with the same rules that are applied to contract interpretation. Lyons v. Lyons, 401 Pa. Super. 271, 277, 585 A.2d 42, 45 (1991).

This agreement clearly indicates that it does not merge into the divorce decree. Paragraph 19 of the agreement provides:

“In the event that a divorce action is instituted the parties hereto agree to have the herein agreement incorporated but not merged into any divorce order entered by any court of competent jurisdiction and the entry of any order deemed necessary by the court to secure the performance of the terms and conditions of the herein agreement. It is further agreed by the parties that the herein agreement shall be incorporated, but shall not merge, into the aforesaid decree of divorce.” Postnuptial agreement at 19, paragraph 19.

Given the express language of paragraph 19, that the agreement be incorporated but not merged into the divorce decree, this postnuptial agreement will survive our issuance of a divorce decree “as an independent contract [that] is not subject to modification and is enforceable by traditional contract remedies.” Wareham by Trout v. Wareham, 716 A.2d 674, 676 (Pa. Super. 1998), citing Nessa v. Nessa, 399 Pa. Super. 59, 63, 581 A.2d 674, 676 (1990).

Finally, we must address Wife’s motion for award of counsel fees. Wife is seeking the imposition of attorney’s fees and costs incurred as a result of this action. The intent of the rule permitting the recovery of counsel fees is not to punish those who initiate actions that ultimately fail. Santilo v. Robinson, 383 Pa. Super. 604, 607, 557 A.2d 416, 417 (1989). Rather, the purpose of the rule is to sanction those who knowingly raise, in bad faith, frivolous claims that have no reasonable possibility of success, for the limited purpose of harassing, obstructing or delaying the opposing party. Brenckle v. Arblaster, 320 Pa. Super. 87, 94, 466 A.2d 1075, 1078 (1983).

The agreement at issue contains a covenant of cooperation, which provides:

“Each party shall at any time, and from time to time hereafter, excuse, acknowledge and deliver to the other party any and all instruments, documents and other items or assurances which may be necessary or appropriate to carry out the provisions of this agreement and to effectuate its intent and purpose. The parties also expressly agree that they shall take no action to interfere with the efforts of the other party to carry out the provisions of this agreement and to effectuate its intent and purpose.” Postnuptial agreement at 7, paragraph 4.

Furthermore, the agreement contains a provision regarding costs of enforcement, which states:

“In the event of the failure of either party to cooperate as set forth above, the costs and expenses of any litigation or other action of any nature to compel compliance herewith, including attorney’s fees, shall be borne by the non-cooperating party.” Postnuptial agreement at 7, paragraph 5.

A review of the record indicates that Wife and Husband genuinely believe in their positions and have proffered credible arguments to support their respective positions. We do not believe that either party has brought this action, or any other action, to cause annoyance or delay. We find no bad faith or wrongful scienter on the part of Husband. It is apparent that a significant period of time has elapsed and there have been a proliferation of changes since the parties initially entered into the agreement. We therefore find that Wife’s claim for attorney’s fees must be denied, in accordance with 23 Pa.C.S. §3502(e). Husband’s noncompliance with the postnuptial agreement was in good faith. Because neither party was cooperating with the agreement, with articulated reasons therefore, we find that each party is responsible for his and her respective attorney’s fees.

Accordingly, we enter the following order:

ORDER

And now, October 25, 2004, upon consideration of plaintiff, Chong Suk Cha Jenkins’ motion for entry of decree in divorce, motion for enforcement of the post-nuptial agreement, and motion for award of counsel fees, we enter the following order:

(1) Wife’s motion for entry of divorce pursuant to section 3301(d) is granted. Allan Paul Jenkins (Husband) and Chong Suk Cha Jenkins (Wife) are divorced from the bonds of matrimony.

(2) The postnuptial agreement entered into by the parties on November 28,1994 is incorporated but not merged into this decree.

(3) Wife’s motion for enforcement of the postnuptial agreement is granted as follows:

(a) Husband is ordered to remove his personal property from the marital residence within 30 days of the date of this order.

(b) Husband is ordered to deliver a fully executed and notarized deed to Wife’s attorney transferring the marital residence to Wife within 10 days of the date of this order.

(c) Wife is ordered to assume all mortgage payments on the marital residence upon receipt of the deed.

(4) Wife’s motion for award of counsel fees is denied. Husband and Wife are responsible for their respective attorney’s fees.


author: BERNSTEIN, J,

text:
    McMurdie v. Wyeth

      Robert E. Curran and Steven J. Kherkher, for plaintiff.

      Peter T. Grossi Jr. and Michael T. Scott, for defendant.
    February 23, 2005
   BERNSTEIN, J,

Plaintiff Geri McMurdie was prescribed Pondimin in December of 1996 by her doctor, Dr. Jepson. Ms. McMurdie received Pondimin prescriptions from Dr. Jepson through July 1997. A complaint claiming injury from her use of Pon-dimin was filed against the pharmaceutical company Wyeth. Although plaintiff has no symptomatology, echocardiograms performed in 2002 revealed aortic regurgitation.

The above captioned case was tried before a jury beginning on September 28,2004. On November 3,2004, the jury rendered a verdict for plaintiff McMurdie and against defendant Wyeth in the amount of $780,000. Timely post-verdict motions were filed raising inter alia the preserved claim that plaintiff’s claims are barred because plaintiff assumed the risk of injury as a matter of law.

The comparative negligence law enacted in 1976 contains no reference to the doctrine of assumption of risk. Nonetheless, the doctrine’s continued existence has been questioned. Although some Supreme Court Justices have twice advocated abolishing the doctrine entirely, a plurality of justices in Howell v. Clyde, 533 Pa. 151, 620 A.2d 1107 (1993), reaffirmed that assumption of risk, as a matter of law, remains a bar to recovery. Assumption of the risk principles remain applicable when a plaintiff’s specific decision to accept risk, reasonable or unreasonable as it may be, bars the plaintiff from blaming someone else for her injuries.

In Staub v. Toy Factory Inc., 749 A.2d 522, 527 (Pa. Super. 2000), the Superior Court analyzed the effect of the Supreme Court plurality decision in Howell and concluded: “until our Supreme Court or our legislature abrogates assumption of risk in negligence cases, the doctrine remains viable in Pennsylvania.” The Superior Court explained: “Our Supreme Court appears to have concluded that in a negligence action, the question whether a litigant has assumed the risk is a question of law as part of the court’s duty analysis, and not a matter for jury determination... this court concluded that until the Supreme Court adopts clearer standards, assumption of risk should be analyzed according to the lead (plurality) opinion in Howell.”

The continued viability of assumption of risk as a defense is grounded in the injustice of a plaintiff claiming that someone else is responsible for an injury after she accepted the risk which unfortunately befell her. Thus, “a plaintiff will not be precluded from recovering except where it is beyond question that he voluntarily and knowingly proceeded in the face of an obvious and dangerous condition and thereby must be viewed as relieving the defendant of responsibility for his injuries.”

Pennsylvania law can be understood by reference to the Restatement of Torts. The doctrine of assumption of risk is set forth in the Restatement (Second) of Torts §496. Section 496A states: “a plaintiff who voluntarily assumes a risk of harm arising from the negligent or reckless conduct of the defendant cannot recover for such harm.” Comment c.2 to section 496A further states that one meaning of the term “assumption of risk” is “that plaintiff has entered voluntarily into some relation with the defendant which he knows to involve the risk, and so is regarded as tacitly or impliedly agreeing to relieve the defendant of responsibility, and to take his own chances.” The Supreme Court of Pennsylvania has held that comment c.2 refers to those times when a plaintiff has “voluntarily and intelligently undertaken an activity which he knows to be hazardous in ways which subsequently cause him injury.”

The court may determine that the defendant was relieved of responsibility to the plaintiff as a matter of law only if “reasonable minds could not disagree that the plaintiff deliberately, and with the awareness of specific risks inherent in the activity, nonetheless engaged in the activity that produced his injury.” “Voluntariness is established only when the circumstances manifest a willingness to accept the risk.”

After an extensive review of the testimony presented in this unique case, the court concludes that plaintiff knowingly and voluntarily assumed the risks of serious heart damage associated with the use of prescription Pondimin for weight loss. All evidence of acceptance of risk was presented through plaintiff’s own testimony, her signed consent form, and the testimony of her treating physician. Accordingly, after giving plaintiff, as verdict winner, the benefit of all reasonable inferences, plaintiff’s claim is barred by the doctrine of assumption of risk as a matter of law and judgment notwithstanding the verdict is hereby entered for defendants.

Plaintiff Geri McMurdie took Pondimin in December 1996, January 1997, March 1997, April 1997, and then again in June and July 1997. The FDA approved Pondimin only: “for use in the management of exogenous obesity as a short-term (a few weeks) adjunct in a regimen of weight reduction based on caloric restriction.” The parties agree that her Pondimin prescription was “off label,” namely prescribed by her physician beyond the parameters approved for sale of Pondimin by the FDA.

There is nothing improper in “off-label” prescriptions. The Federal Drug Administration regulates the sale of medication by pharmaceutical companies such as defendant Wyeth but does not regulate the medical profession. Off-label use is a widespread practice. The Pennsylvania Supreme Court has said: “[the]... mere fact that the FDA has not cleared a product for a particular use does not mean that the product is not in fact suitable for that purpose....” Despite knowing that Pondimin was “not officially approved by the FDA for long-term use,” Ms. McMurdie took Pondimin for six months and acknowledged a willingness to take the medication “for life.” She acknowledged a willingness to take Pondimin for life after specifically affirming that the “risks associated with long-term use” were unknown.

The testimony demonstrated that Pondimin use for weight loss became very popular in Utah in the mid nineties. The medical profession so liberally prescribed Pondimin that the drug became classified as a controlled substance under Utah law and the Utah Legislature enacted a specific informed consent statute regulating the prescription of controlled substances for weight reduction or control. This Act further required that physicians obtain the patient’s signature on a standard informed consent form prior to prescribing Pondimin. This Act requires that: “prior to initiating treatment the prescribing practitioner shall: . . . (iv) discuss with the patient the possible risks associated with the medication, and have on record an informed consent which clearly documents that the long-term effects of using controlled substances for weight loss or weight control are not known.

M

Plaintiff went to Dr. Jepson for treatment for hypertension. She asked her doctor to prescribe Pondimin. Her physician refused because of the serious risks the medication posed because of her medical history and hypertension. Dr. Jepson undoubtedly explained to his patient his reasons for refusing to prescribe Pondimin.

After asking again, and improvement in plaintiff’s hypertension, plaintiff prevailed upon her doctor to prescribe Pondimin. In accord with statute, her physician discussed her individual risks in Pondimin use. Plaintiff was well educated about her individual risks. Ms. McMurdie understood that the medication could seriously exacerbate her hypertension. She understood that, because of her history of high blood pressure, use of Pondimin presented a serious risk of stroke or heart attack. She knowingly and voluntarily assumed these risks:

“Q. And informed consent discussed the heart attack, right?

“A. It did.

“Q. So you were already concerned about the risk of hypertension causing you to have a heart attack someday, correct?

“A. Yes.

“Q. Yet you were willing to accept the risk that this drug might cause a heart attack, correct?

“A. I was at that time, yes.

“Q. You were willing to take that drug even though it could make your dangerous hypertension condition worse, correct?

“A. Yes.

“Q. You were willing to take Pondimin even though it could cause — you could have a heart attack?

“A. That concerned me a little bit, yes.

“Q. But you took the risk?

“A. I did.”

She also understood that taking Pondimin could result in her death.

“Q. And you took Pondimin even though you knew that Pondimin might have unknown fatal complications in the future for you, correct?

“A. I did.”

She also understood and accepted the risks of “off-label” unapproved use:

“Q. So you were willing to — you were willing to take a drug that you knew was a short-term medication for the long-term?

“A. Yes.

“Q. If the doctor told you that Pondimin could, if taken for more than a few weeks, would cause you long-term unknown complications and risks, would you have taken the drug?

“A. I did.”

Ms. McMurdie understood and even accepted undetermined and unknown risks of long-term off-label use:

“Q. And it says right here the risks associated with long-term use is unknown, correct?

“A. Correct.

“Q. So we’ve already discussed that. But you were willing to take even unknown serious risks to take this drug, right?

“A. At that time, my doctor and I also felt that my obesity was a big risk also, and that if I could get my weight down maybe it would help with all the other— with the high blood pressure problems and other things of what’s going on.

“Q. So you were willing to — you were willing to take a drug that you knew was a short-term medication for the long-term?

“A. Yes.”

The statutorily required consent form, signed by Ms. McMurdie on December 27,1996, was offered into evidence as defense exhibit A-01. This form documented that she knew she was taking Pondimin “off-label,” for a period longer than approved by the FDA and further documented that she knew that the risks of long-term use had never been studied. The signed form said: “there are also some risks associated with using these medications. These risks include but are not necessarily limited to: Increased heart rate, increased blood pressure . . . heart attack, especially in people who have heart disease. . . . Most people who are overweight enough to need these medications will need to take them for life, although they are not officially approved by the FDA for long-term use. The risks associated with long-term use is unknown.”

Accordingly, before her Utah physician could lawfully prescribe Pondimin for Ms. McMurdie, he was required to explain, and prior to filling the prescription plaintiff acknowledged that she knew, that Pondimin carried a risk of side effects which would cause serious adverse heart conditions including heart attack and stroke. Equally importantly, her doctor explained, and she acknowledged, acceptance of unknown risks with long-term use.

Despite knowingly and voluntarily accepting her unique risks of heart attack and stroke, and despite acknowledging that long-term unapproved use carried unknown long-term risks, plaintiff seeks compensation for defendant’s failure to specifically identify “valvular regurgitation” as a risk. The Supreme Court explained the policy basis for the continued vitality of assumption of risk: “as a matter of public policy one who chooses to take risks will not then be heard later to complain that he was injured by the risks he chose to take, and will not be permitted to seek money damages from those who might otherwise have been liable ... the plaintiff may or may not have been negligent in encountering the risk. He is barred from recovery not because of his negligence, but because of the policy that a person may not recover for injuries which he himself has chosen to risk.”

Despite the serious risks, it may not have been negligent for Ms. McMurdie to take Pondimin “off-label.” This may have been a reasonable and reasoned decision. The defense does not claim plaintiff was negligent. As plaintiff acknowledged in the statutorily prescribed consent form and in testimony at trial: “I believe the weight loss associated with the use of these medications will be beneficial to my health and this benefit outweighs the risks.” Whether or not a jury would find that the classic “reasonable man” would have made the same decision is irrelevant in an assumption of the risk analysis. This may have been a reasonable responsible decision for plaintiff to have made in consultation with her doctor. Plaintiff’s right to make her own decision, weighing her unique risks and benefits, is respected by the law. A basic principle in our jurisprudence is the long-standing tradition upholding individual liberty and freedom of choice in medical care.

However, having knowingly chosen Pondimin’s potential health benefit against the known risk of serious heart injury including stroke; having knowingly chosen Pondimin’s potential benefit against the known risk of serious heart injury including heart attack; having knowingly chosen Pondimin’s potential benefit when used “off-label” for unapproved long-term use against “unknown” risks, plaintiff may not seek compensation because she had not been specifically told of a risk of “valvular regurgitation.”

Under the specific facts of this case, the evidence demonstrates that plaintiff voluntarily assumed the risk of the type of harm which occurred by knowingly and affirmatively entering into a relation with the pharmaceutical defendants involving significant risks of the same nature as the injury she sustained. Plaintiff affirmatively, explicitly, tacitly, and impliedly agreed to relieve the defendant of the significantly lesser risks which actually occurred.

While other significant issues are presented by defendant’s post-verdict motions, most significantly whether the expert testimony offered at trial complied with Pennsylvania Rule of Evidence 705, the court’s conclusion on assumption of the risk is dispositive and requires that judgment n.o.v. be entered. The court reserves all other issues for a full opinion if necessary, at a later time.

      . Although the Pondimin involved in this action was prescribed and purchased by Ms. McMurdie, a Utah resident, in Utah, the parties stipulated that Pennsylvania law applied. The defendants did not claim comparative negligence was applicable.

      . 42 Pa.C.S. §7102.

      . Staub v. Toy Factory Inc., 749 A.2d 522, 526 (Pa. Super. 2000). (citations omitted) (footnote omitted)

      . Struble v. Valley Forge Military Academy, 445 Pa. Super. 224, 229, 665 A.2d 4, 6 (1995). (emphasis in original)

      . Howell v. Clyde, 533 Pa. 151, 161, 620 A.2d 1107, 1112 (1993).

      . Howell v. Clyde, 533 Pa. 151, 162, 620 A.2d 1107, 1113 (1993).

      . Staub v. Toy Factory Inc., 749 A.2d 522, 529 (Pa Super. 2000).

      . The Birth Center v. The St. Paul Companies, 567 Pa 386, 787 A.2d 376 (2001).

      . McMurdie N.T., 9/30/04 p.m. at 87-93, 126-28.

      . Southard v. Temple University Hospital, 565 Pa. 335, 339, 781 A.2d 101, 103 (2001).

      . Id. at 107.

      . Plaintiff testified it was a “craze everywhere in Utah.” N.T. Plaintiff McMurdie 10/26/04 pg. 53.

      . U.A.C. R156-37-604; Utah Code 58-37-4 VI(d)(iii) (2004).

      . 10/26/04 pgs. 52-53, 60.

      . N.T. 10/26/04, p.m. at 53.

      . N.T. pg. 58 11. 8-12.

      . McMurdie N.T., 9/26/04 p.m. at 56.

      . McMurdie N.T., 9/26/04 p.m. at 57 11. 7-22.

      . McMurdie N.T., 9/26/04 p.m. at 66-67.

      . McMurdie N.T., 9/26/04 p.m. at 68.

      . McMurdie N.T., 9/26/04 p.m. at 67.

      . McMurdie N.T., 9/26/04 p.m. at 66-67.

      . The most significant injury claimed in this lawsuit is the potential for heart valve surgery at some future time. Plaintiff’s experts testified that the medical studies reported in medical literature which demonstrate that heart valvopathy due to Pondimin more likely improves rather than deteriorates after cessation of Pondimin use were irrelevant because too short a time period has been studied. Thus, in this lawsuit, plaintiff’s experts ground their opinion upon the proposition that the “risks associated with long-term use” are still “unknown” at least to the extent not yet revealed by medical studies. Plaintiff’s own experts affirm the unknown risk plaintiff knowingly and voluntarily assumed.

      . Howell v. Clyde, 533 Pa. 151, 161, 620 A.2d 1107, 1112 (1993).

      . No claim of comparative negligence was presented at trial.

      . N.T., 10/26/04 pg. 67 11. 3-10, defense exhibit A-01.

      . Plaintiff admits in oral argument that assumption of the risk could be a defense as to a claim brought against her physician, but claims assumption of risk is inapplicable against a pharmaceutical manufacturer.


author: MINORA, J,

text:
    Galko v. Harleysville Pennland Insurance Co.

      C.P. of Lackawanna County,
    no. 02-CV-2778.

      Matthew P Barrett, for plaintiff.

      Thomas F. Reilly and Robert C. Price, for defendants.
    January 18, 2005
   MINORA, J,

INTRODUCTION

The present matter is before the court by way of the plaintiff’s motion for partial summary judgment pursuant to Pa.R.C.R 1035 to which the defendant filed a timely response, brief in opposition to said motion, as well as its own motion for summary judgment. The parties have presented their respective arguments to the court and we now consider this matter ripe for disposition. The allegations as set forth in the pleadings are as follows:

STATEMENT OF THE CASE

The plaintiff, Jennifer Gaiko, was involved in a motor vehicle accident on April 24,2000, from which the plaintiff has sustained personal injuries. The collision occurred at the intersection of Fallbrook and Hospital Streets in Carbondale, Pennsylvania. Occupying the plaintiff’s vehicle, a 1996 Chevrolet Cavalier, were the plaintiff, Jennifer Gaiko and two passengers. The aforementioned accident involved two other vehicles, a Chevrolet truck, owned and operated by Thomas Vadella and a Subaru sedan, owned and operated by Betsey Savage. (See Janice Cobb’s complaint p. 1.) At the time of the accident, the plaintiff maintained a policy of automobile insurance, policy *** ** ** **, issued by Pennland Insurance Company and carried by Harleysville Insurance Company (Harleysville). The insurance policy in question was issued in August 1998. It extended coverage upon a 1985 Buick LeSabre registered to the plaintiff and it extended first-party medical benefits coverage in the amount of $5,000 as well as liability coverage. (See defendant’s exhibit C, p. 9.) On April 25, 2000, the day following the accident, Gaiko notified the defendant of her claim under the first-party provisions of the policy. The defendant asserts that this was the first notification that it received from the insured in regard to her purchase of the 1996 Chevrolet. Once notice was provided to the insurer of the claim, the number ********** was assigned to Gaiko’s claim to acknowledge receipt of the same. The Harleysville adjuster’s notes made under the initial claim report indicated that the insured, Gaiko, was involved in an accident with a vehicle she purchased in July 1999 that did not appear on the policy declarations sheet. Also, the adjuster notes indicated that the insured no longer owned the 1985 Buick LeSabre listed on the policy declarations sheet. (See plaintiff’s exhibit B to motion for summary judgment.) On May 3,2000, an entry was made in the insurance claim log that assigned the claim to Angela Steen. Nine days later, Ms. Steen sent a letter to the plaintiff denying her coverage including first-party personal injury benefits under the policy based upon exclusion a(5)(b). The letter stated:

“We do not provide first-party benefits coverage for ‘bodily injury’ sustained by an ‘insured’ who at the time of the accident is ‘occupying’ a ‘motor vehicle’ owned by the insured for which a financial responsibility required by the Act is not in effect.” (Plaintiff’s exhibit C attached to motion for summary judgment.)

Two years later, on April 5, 2002, the plaintiff was joined as an additional defendant by Thomas Vadella, an original defendant to the third-party lawsuit. Vadella was the driver of the Chevy truck involved in the accident that occurred on April 24, 2000, and originally sued by Janice Cobb, an occupant of Jennifer Gaiko’s car. Har-leysville Insurance Company was soon notified of the lawsuit filed joining Jennifer Gaiko as an additional defendant. (See plaintiff’s exhibit D attached to its motion for summary judgment.) Gail Parker was employed as a litigation specialist by Harleysville Insurance Company and, on April 24, 2002, she had been assigned the third-party claim asserted against the plaintiff herein. By letters dated April 24,2002 and May 1,2002, Ms. Parker notified Jennifer Gaiko that coverage involving the collision of her 1996 Chevrolet would be denied as would a defense in the litigation. Ms. Gaiko was advised that she personally would be responsible for her own defense involving any pending litigation. (See plaintiff’s exhibits D and K.) The plaintiff consequently hired counsel to defend her in the underlying civil action. Subsequently thereto, the plaintiff filed the instant action on May 17, 2002, against Harleysville Insurance Company, a/lc/a Pennland Insurance and Harleysville Insurance Companies. After Ms. Gaiko’s complaint was filed, the defendants requested information from the plaintiff regarding the ownership of the 1985 Buick LeSabre. Thereupon, the plaintiff provided information indicating that the vehicle had been traded in July 1999. (See plaintiff’s brief p. 4.)

Two years after the trade-in on May 17,2002, the defendant received documentation verifying the trade-in of the 1985 Buick LeSabre from the plaintiff. On May 30, 2002, pursuant to counsel’s advice, Harleysville Insurance Co. extended full coverage under the policy to Ms. Gaiko, including personal injury coverage and liability coverage including a defense in the pending third-party claim. Discovery has since been completed.

Presently, both parties before this court ask that summary judgment be granted in their favor. Before we discuss the specific issues presented by the parties’ motions, let us first lay the groundwork for the summaiy judgment standard.

Summary Judgment Standard

As we have set forth in Conway v. Tink’s Spearmint Café Inc., 01 CIV 6105 (Lacka. Cty. (Judge Minora) August 13,2004), summary judgment is appropriate only in those cases where the record demonstrates that there is no genuine issue of any essential facts and that the moving party is entitled to judgment as a matter of law. Bird Hill Farms Inc. v. United States Cargo & Courier Service Inc., 845 A.2d 900, 903 (Pa. Super. 2004). In making that determination, the record must be viewed “in the light most favorable to the non-moving party, and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party.” Phillips v. Cricket Lighters, 576 Pa. 644, 841 A.2d 1000, 1004 (2003). Therefore, summary judgment may be entered only “[wjhen the facts are so clear that reasonable minds cannot differ,” Duquesne Light Co. v. Pennsylvania American Water Co., 850 A.2d 701, 703 (Pa. Super. 2004), and it is “free from doubt the moving party is entitled to judgment as a matter of law.” Savage, Sharkey, Reiser & Szulborski Eye Care Consultants v. Tanner, 848 A.2d 150, 153 (Pa. Super. 2004); William O’Brien v. Ohio Casualty Ins. Co., 105 Lacka. Jur. 60, 62-63 (2004). Let us now turn to the issues presented by both parties’ motions for summary judgment. We will first consider the plaintiff as the moving party.

In the plaintiff’s complaint she has asserted claims of bad faith, breach of contract and denial of liability coverage against the defendant. Here she moves for partial summary judgment on the bad faith count alone. The issue that must be resolved at this juncture is whether the defendant, Harleysville Insurance Company, acted with bad faith toward the plaintiff given the evidence supplied by the parties.

“ ‘[B]ad faith’ toward the insured normally involves the handling of a claim or denial of benefits.” Chau v. RCA Ins. Group, 2004 WL 594064 (Pa. Com. Pl.), citing Adamski v. Allstate Insurance Co., 738 A.2d 1033 (Pa. Super. 1999). Should an insurer violate the Unfair Insurance Practices Act, it may be found liable for bad faith conduct. O’Donnell ex rel. Mitro v. Allstate Insurance Co., 734 A.2d 901, 906 (Pa. Super. 1999). Several courts of this Commonwealth have recognized that there is no common-law remedy in this state for bad faith on the part of insurers. Terletsky v. Prudential Property and Casualty Insurance Co., 437 Pa. Super. 108, 125, 649 A.2d 680, 688 (1994); D’Ambrosio v. Pennsylvania National Mutual Casualty Insurance Co., 494 Pa. 501, 431 A.2d 966 (1981). The Pennsylvania Legislature has instead created a statutory remedy in 42 Pa.C.S. §8371 which provides that:

“In an action arising under an insurance policy, if the court finds that the insurer has acted in bad faith toward the insured, the court may take all the following actions:

“(1) Award interest on the amount of the claim from the date the claim was made by the insured in an amount equal to the prime rate of interest plus 3 percent.

“(2) Award punitive damages against the insurer.

“(3) Assess court costs and attorney fees against the insurer.”

Numerous Pennsylvania courts have also revealed that “bad faith” denotes a particular connotation in the insurance arena as defined in Black’s Law Dictionary 139 (6th ed. 1990):

“Insurance. ‘Bad faith’ on part of insurer is any frivolous or unfounded refusal to pay proceeds of a policy; it is not necessary that such refusal be fraudulent. For purposes of an action against an insurer for failure to pay a claim, such conduct imports a dishonest purpose and means a breach of a known duty (i.e., good faith and fair dealing), through some motive of self-interest or ill will; mere negligence or bad judgment is not bad faith.” See Adamski v. Allstate Insurance Co., 738 A.2d 1033, 1036 (Pa. Super. 1999); Terletsky v. Prudential Property and Casualty Insurance Co., 437 Pa. Super. 108, 125, 649 A.2d 680, 688 (1994).

The Pennsylvania Superior Court established a two-prong test whereby the plaintiff must prove the following by clear and convincing evidence to establish a claim of bad faith against the defendant: (1) the insurer did not have a reasonable basis to deny benefits under the policy; and (2) the insurer knew or recklessly disregarded its lack of a reasonable basis. Terletsky v. Prudential Property and Casualty Insurance Co., 437 Pa. Super. 108, 125, 649 A.2d 680, 688 (1994). Additionally, when an insurer acts with disregard or indifference to the rights of the insured, such actions may constitute bad faith. Polselli v. Nationwide Mutual Fire Insurance Co., 23 F.3d 747, 751 (3d Cir. 1994). Yet, we must keep in mind that mere negligence or bad judgment alone does not constitute bad faith. Adamski v. Allstate Insurance Co., 738 A.2d 1033 (Pa. Super. 1999).

This court has previously confirmed in McAndrew v. Donegal Mutual Insurance Co., 99 CIV 1761 (Lacka. Cty. (Judge Geroulo) January 8,2003), that an insurance company acts in bad faith against an insured when it fails to carry out a complete investigation. The Superior Court of Pennsylvania agreed with this contention when it declared that bad faith comprises a “lack of [a] good faith investigation into [the] fact[s], and failure to communicate with the claimant.” Brown v. Progressive Insurance Co., 860 A.2d 493, 501 (Pa. Super. 2004), citing Romano v. Nationwide Mutual Fire Insurance Co., 435 Pa. Super. 545, 554, 646 A.2d 1228, 1232 (1994).

Here the plaintiff asserts that Harleysville’s initial denial of first-party benefits and the refusal to provide a defense and indemnification in the third-party case constitutes bad faith on the part of Harleysville Insurance. As noted above in our definition of bad faith, the burden is on the plaintiff to prove with clear and convincing evidence that Harleysville acted with a motive of ill will or dishonest purpose. This goal may be achieved by instituting the above two-prong test delineated by the Terletsky court and previously utilized by this court in McAndrew, supra.

The first prong of this test asks whether the insurer had a reasonable basis to deny the claim. A good starting point for this analysis requires us to review both the method of investigation required by the insurer and the mode of investigation that was conducted by the insurance adjusters.

The Harleysville Claims Manual Medical Guidelines requires prompt contact with the insured person once a claim has been made. The Harleysville Claims Manual Investigative Guidelines provides that the contact should be made by the insurer with the insured within 24 hours of the initial reporting of the claim. Here the claim was first reported on April 25,2000, and not assigned to the adjuster, Ms. Steen, until eight days later on May 3,2000. Ms. Steen provided testimony wherein she recalled reading in the original report that Gaiko no longer owned the 1985 Buick. In fact, the 1996 Chevrolet replaced the 1985 Buick. At no time did Ms. Steen obtain a recorded statement from the insured because, as she stated, it was not a standard practice. (Plaintiff’s exhibit H, D.T. Steen pp. 32-33.) Yet, the Harleysville Claims Manual Investigative Guidelines provides guidance as to when a statement should be taken and it states:

“Statements shall be obtained from appropriate parties to include the insured, agent, witnesses, etc. Statements are required whenever there is a question of cause of origin of the loss, question of valuation of damaged property, or the potential for subrogation. Any question as to whether or not statements are required should be resolved in favor of the statement being taken. While statements are to be as concise as possible, the need for completeness and specificity should be emphasized. Adjusters must listen to the answers already given and formulate additional questions based upon the answers already presented by the person giving the statement.” (See plaintiff’s exhibit G.)

As previously noted, the guidelines provide that prompt contact be made with the customer, a collection of both medical data and some personal data be obtained and the adjusters take statements when necessary. None of these steps were taken. Plus, the language of the insurance contract states that replacement vehicles automatically acquire the same coverage as the vehicle it replaced. Notice need not be provided to the insurer unless the insured wishes to add or continue coverage for damage to your auto. (See plaintiff’s exhibit I, Amendment of Policy Provisions §I(A)(2).) (emphasis added) Moreover, the most convincing evidence that confirms the insurer acted in bad faith involves Mr. Walters’ deposition testimony and e-mail he sent to a company litigation manager soon after Ms. Gaiko instituted the present action. Mr. Walters was employed by Harleysville for over 21 years when he provided his deposition testimony. His position was a home office claim division specialist. (See plaintiff’s exhibit E, D.T. Walters p. 5.) In his deposition, Mr. Walters stated that he had written an e-mail on May 29,2002, and sent it to Valerie Wujcik, a general liability and litigation manager. The e-mail sent by Mr. Walters stated the following:

“Val: As we discussed, it appears that we incorrectly denied FPB (first-party benefits) coverage as well as a defense to the tort claim being brought against the insured. The file reflects the insured purchased a 1996 Chev Cavalier in July 1999. This vehicle apparently REPLACED the 1985 Buick that was on the policy. We did not thoroughly investigate this initially which lead to a premature denial of coverage. We appear to have based the denial on coverage (initially for FPB meds) based upon the belief that the 1996 vehicle was purchased in addition to the 1985 vehicle. Subsequently the insured’s attorney provided us with verification that the vehicle was traded in. The policy does not require that the insured advise us of a change in vehicle on the policy if it is a replacement vehicle and not seeking COLL (collision), comp (comprehensive) coverage. Therefore, if we have proof of the insured trading in the 1985, then the 1996 was a replacement and we owe the insured coverage.” (See plaintiff’s exhibit F.)

After reviewing the record, it is apparent that the insurer neglected to provide a good faith investigation. The protocol provided in the claims manual guidelines was blatantly ignored, as was the language in the insurance contract. Given the lack of an investigation and ignorance of the policy language, the insurer did not have a reasonable basis for denying the benefits under the policy. As it turns out, the insurer had every reason to provide the policy benefits to Ms. Gaiko. Therefore, the first prong of our analysis is satisfied.

The second factor the plaintiff must prove by clear and convincing evidence is that the insurer knew of and recklessly disregarded the lack of a reasonable basis for denying the insured’s claim. In reviewing the record while considering the second prong of the analysis a possible redeeming factor comes to light. Ms. Steen, the insurance adjuster, had contacted outside counsel, Scott Tredwell, on the date that the claim was assigned to her. Yet there is no indication that she informed Mr. Tredwell as to the nature of the acquisition or that the 1996 Chevy Cavalier was a replacement vehicle. Moreover, Ms. Steen stated in her deposition testimony that it was of no consequence to her at the time she was reviewing Ms. Gaiko’s claim if the plaintiff in fact still owned the 1985 Buick, or if she had gotten rid of it. (See plaintiff’s exhibit Q D.T. Steen, p. 33.) Again, in her deposition, Ms. Steen replied that the insured had informed her that she traded in the 1985 Buick, but she never documented this information in the claim log. (Plaintiff’s exhibit H, D.T. Steen pp. 37-38.) Such treatment of the plaintiff’s claim denotes mistreatment by the insurance company. Clearly, the insurer did know of the status of the 1996 Chevy, yet failed to properly document it, which initiated the improper denial of the plaintiff’s claim and represents an apparent disregard by the insurer of its lack of a reasonable basis for denying the claim. Therefore, the second prong of the two-prong test has been met.

Conversely, the defendant asserts there is no genuine issue of material fact in regard to the bad faith claim. Harleysville insists that the plaintiff failed to prove the three elements required for aprima facie case of bad faith by clear and convincing evidence. Harleysville further asserts that it had a reasonable basis to deny insurance coverage for Gaiko’s 1996 Chevrolet because the insurer was not provided notice during the policy period of the acquisition of the new vehicle. Moreover, the defendant contends that the delay in coverage was caused by outside factors, including the plaintiff’s actions and inac-tions and not the bad faith of the company. We disagree.

It is not disputed that Gaiko did not inform her insurer that she had traded in her 1985 Buick LeSabre and was then driving the 1996 Chevrolet until April 25, 2000. Harleysville contends that it denied coverage because the adjuster believed the Chevy to be an additional vehicle owned by the insured. Even if this was true, this argument has no merit. According to the language in the insurance contract, even if the Chevy was an additional vehicle acquired by the insured, it should have been extended coverage as a “covered auto.”

Harleysville further contends that the insurance policy period had expired at the time of the reported accident which therefore extinguished any responsibility the insurer would have had over the insured in regard to a replacement vehicle. We do not find this argument compelling. The insurance policy states that a “covered auto” includes a vehicle, on the date the insured becomes the owner, which is acquired during the policy period and which the insured asked the insurer to insure within 30 days after its acquisition. (See Amendment of Policy Provisions — Definitions.) This same definition further states that if the newly acquired vehicle replaces the one in the declarations, it will have the same coverage as the vehicle replaced. Id. Thirty-day notice of newly required replacement vehicles is only necessary if additional coverage is requested. Id. Harleysville interprets the language of the insurance policy to mean that notice of newly acquired vehicles must be given to the insurer, whether or not replacement vehicles, within the policy period the vehicle was acquired. By this, the defendant means that because the plaintiff acquired the 1996 Chevy in July of 1999 and the next policy renewal period began in August of 1999, the plaintiff therefore failed to notify the insurer of her acquisition of a new vehicle during the policy period in which it was acquired. This is a bogus interpretation. Pennsylvania courts have given deference in the ambiguities of insurance contract contrivance and interpretation in favor of the insured if the terms are capable of more than one reasonable interpretation. See Estate of Higgins v. Washington Mutual Fire Insurance Co. of Lawrence County, PA, 838 A.2d 778 (Pa. Super. 2003); Wagner v. Erie Insurance Co., 801 A.2d 1226 (Pa. Super. 2002); Standard Venetian Blind Co. v. American Empire Insurance Co., 503 Pa. 300, 469 A.2d 563 (1983) (The interpretation of an insurance contract is a question of law, not a question of fact that can be decided by the court rather than the jury.). The defendant would like this court to read the policy to mean that each renewal period constitutes a separate policy/contract. We refuse to adopt this interpretation. Logic dictates that as long as the same policy number and the same coverage remain constant, the same policy remains in effect. The Superior Court asserted in Yoder v. American Travellers Life Insurance Co., 814 A.2d 229 (Pa. Super. 2002), that the renewal of an insurance policy cannot be viewed as the formation of a new contract upon each renewal period because the parties have not made a new offer or acceptance. Here, Gaiko initiated insurance coverage under contract with Harleysville in August of 1998, and by continued paying of her insurance premiums each month, she continued keeping the same insurance policy current and in place. All the while, the insurer accepted these same checks as well.

We are satisfied that the plaintiff has fulfilled her burden and has established both prongs of the test by clear and convincing evidence to substantiate a claim of bad faith against the defendant. The defendant has failed to illustrate that any genuine issue of material fact exists. Therefore this court shall grant the plaintiff’s motion for partial summary judgment on the issue of bad faith.

The defendant has filed its own motion for summary judgment requesting that this court dismiss all three counts of the plaintiff’s complaint, including the bad faith claim, breach of contract claim and the denial of liability claim. At this time, the defendant’s motion for summary judgment as to the bad faith issue is denied as per our conclusion above which renders it moot. We shall now consider the additional issues presented by the defendant’s motion for summary judgment below.

The defendant asserts that the action under contract should be dismissed because the insurer has paid the first-party benefits according to the insurance contract and, second, that there is no issue of material fact. The policy issued by the defendants provided first-party benefits coverage of the insured, Jennifer Gaiko. The plaintiff contends that Harleysville’s failure to honor her first-party benefit claim is a breach of the insurance contract.

The following segment of this discussion centers on contract law and what constitutes a breach of contract for insurance coverage which is significantly different from a section 8371 bad faith action as discussed above. Ash v. Continental Insurance Co., 64 D.&C.4th 37, 41 (Lawrence Cty. 2003). In a bad faith action, the insurer may be found liable for damages beyond the contract language. Id. at 41. In an action arising out of a breach of contract, the insurer may be liable only under the terms of the contract. The prima facie case that must be established in a breach of contract action includes three elements: (1) the existence of the contract, including its essential terms, (2) a breach of duty imposed by the contract and (3) resultant damages. Accordingly, it is undisputed that the insurance policy issued to Ms. Gaiko by Harleysville Insurance Co. was in effect during the course of events in question. The Pennsylvania Superior Court has established that an insurance policy constitutes a contract. Smith v. CNA Insurance, 319 Pa. Super. 449, 466 A.2d 629 (1983). In accord with the second element stated above, there must be a duty imposed by the contract that has been breached by one party to that contract to establish a claim in breach of contract. “The essential issue that must be determined is whether Harleysville has breached its duty under contract with the insured. Under the First-Party Benefits Coverage Insuring Agreement, the basic first-party benefit coverage includes payments, including reasonable and necessary medical expenses, for the insured who sustained bodily injury as a result of the maintenance or use of a motor vehicle. Although the insurer initially denied the first-party benefits under the insuring agreement to Ms. Gaiko, it did eventually make payment for her medical expenses on May 30,2002. Therefore, Harleysville did not breach its duty under the policy, but performed its obligation under the insuring agreement, albeit two years after the insurance claim was made. (See defendant’s exhibit F in its motion for summary judgment, p. 41.) Consequently, the plaintiff has failed to prove damages that resulted from the insurer’s alleged breach of contract. The only damages that the plaintiff asserted in relation to the breach of contract claim were her unpaid medical bills which have been made current as of May 30,2002. As a result, the plaintiff has failed to establish two of the three necessary elements required in a prima facie case of breach of contract since the plaintiff’s medical expenses have been paid and the plaintiff has not suffered any damages as alleged. As current case law states, summary judgment is proper when the evidentiary record contains insufficient facts to establish a prima facie cause of action presenting no issue to submit to a jury. Rabutino v. Freedom State Realty Co. Inc., 809 A.2d 933 (Pa. Super. 2002). It is only proper for this court to grant the defendant’s motion for summary judgment on the breach of contract claim.

The last issue that we are presented with is whether a genuine issue of material fact exists within the plaintiff’s claim for denial of liability coverage by the insurer. A denial of liability coverage claim can be handled in one of two ways: first, it may be dealt with as a breach of contract claim in that the insurer had promised to provide coverage within the terms of the insurance policy, but instead it denied coverage. The second approach to a denial of liability claim is to manage it as a bad faith claim. In order to know which approach to take in analyzing this sort of cause of action, the court must examine how the allegations are presented in the complaint. Here the plaintiff asserts that, upon receipt of notice by the insurer of the third-party lawsuit, Harleysville was obligated to provide a defense in the lawsuit and provide coverage for the damages sustained by Ms. Gaiko. The plaintiff complains that such failure to provide a defense and affirm coverage constitutes a breach of the contract/ insurance policy. (See plaintiff’s complaint ¶35.) Yet, the defendant, Harleysville, did extend full coverage to the plaintiff under the policy including first-party and liability coverage, on May 30, 2002. Clearly, the plaintiff’s assertion of the denial of benefits claim is akin to its breach of contract claim which has been duly examined and resolved above. There has been no additional issue presented to this court by the plaintiff’s assertions in Count III, denial of liability coverage. Therefore this court must grant the defendant’s motion for summary judgment on the denial of liability claim. A comprehensive order consistent with this memorandum follows.

ORDER

And now, to wit, January 18, 2005, upon consideration of both plaintiffs and defendant’s motions for summary judgment, the verbal and written arguments of counsel and in accordance with the preceding memorandum, it is hereby ordered and decreed that the plaintiff’s motion for partial summary judgment will be granted.

The defendant’s motion for summary judgment will bé granted in part and denied in part.

(1) The defendant’s motion for summary judgment as to Count I of the complaint, bad faith is denied.

(2) The defendant’s motion for summary judgment as to Count II of the complaint, breach of contract is granted.

(3) The defendant’s motion for summary judgment as to Count III of the complaint, denial of liability coverage is granted.

      . The plaintiff paid monthly premiums upon said policy as was required under her insurance contract. According to the Amendment of Policy Provisions — Pennsylvania endorsement of the policy in the definition section, it provides that “your covered auto” includes one that has been acquired during the policy period, and the company has been notified of the acquisition of the vehicles within 30 days of the change as stated in the policy. An insured need not report the replacement vehicle to the insurer if additional coverage is not required. (Defendant’s exhibit B, Amendment of Policy Provisions, section A.)

      . Plaintiff’s exhibit “G”: The Harleysville Claims Manual Medical Guidelines are set forth as follows:
      “(1) Prompt contact with the insured person. Keep in mind that the accident is no small event in his life. If he wants to talk, be sure you want to listen and observe.
      “(2) Note carefully the injuries he describes.
      “(3) Obtain the names of the hospital and doctor. List medications or applications prescribed and/or purchased.
      “(4) Find out the nature of the claimant’s occupation, and the identity of the employer. If self-employed, ascertain the type of business he engages in and the location of operation.
      “(5) When necessary, explain what steps you must perform to bring his claim to satisfactory disposition.
      “(6) Obtain authorization to secure medical reports and/or wage information.
      “(7) Acquaint yourself with the type of injuiy sustained, treatment thereof, normal end results and the time required for maximum recovery.
      “(8) Offices with access to cost containment specialist should utilize their expertise to review medical bills, reports and test results. (This applies to first-party cases only.)
      “(9) Carefully monitor the claimant’s progress, note any complications, and re-evaluate the claim when necessary.”

      . Ms. Steen reportedly wore many hats. From early 2000, Ms. Steen moved to the Norristown facility, where she began processing 200 suffixes, which are claims with potential exposure, and increased her load to 350 claims without an increase in pay, hours or commission nor additional training aside from a one-day course on first-party benefits given by her supervisor at the Norristown location, and she also began to handle Pennsylvania claims. (See exhibit H, D.T. Steen pp. 17-20.)

      . The Amendment of Policy Provisions §1. Definitions states: If the vehicle you acquire is in addition to any shown on the declarations, it will have the broadest coverage we now provide for any vehicle shown in the declarations, (emphasis added)

      . The language of the insurance policy within the first-party provisions states the following:
      “We will pay, in accordance with the Act, the basic first-party benefit to or for an ‘insured’ who sustains ‘bodily injury.’ The ‘bodily injury’ must be caused by an accident arising out of the maintenance or use of a ‘motor vehicle.’ ” The language of the policy continues to explain that limits are contained in the declarations or schedule. The basic first-party benefit consists of reasonable medical expenses including care, recovery or rehabilitation and will be paid if incurred within the first 18 months following the accident. See First-Party Benefits Coverage — Pennsylvania §2 “First-party benefit coverage insuring agreement.”


author: SYLVESTER, J.,

text:
    Cruz v. Princeton Insurance Company

      Anne E. Pedersen, for plaintiffs.

      Jonathan Cass, Patricia Otto and Jeffrey B. McCarron, for defendants.
    February 15, 2005
   SYLVESTER, J.,

Appellants, Jacqueline Nieves Cruz and Oscar Cruz, appeal from this court’s order of October 15,2004 (docketed on October 18, 2004) granting summary judgment in favor of defendants.

FACTUAL AND PROCEDURAL HISTORY

Appellants brought the instant action against defendants alleging abuse of process. The underlying action from which the instant action arose involved a medical malpractice action filed by appellants in 1994 on behalf of their minor son, Adam Omar Cruz, both individually and as the minor child’s parents and natural guardians. During trial of the underlying medical malpractice action, appellants withdrew all individual claims in their own right prior to the case going to the jury, proceeding solely as representatives of their son. The jury returned a verdict in favor of Adam in the amount of $10,881,431 against Northeastern Hospital.

Princeton Insurance Company retained the services of Alan S. Gold, Esquire, to appeal the decision in the medical malpractice action on behalf of Northeastern Hospital, to whom it had provided insurance coverage at all times relevant to that action. The parties agreed to participate in mediation during the pendency of that appeal. Appellants’ decision to engage in mediation was based upon the recognition that there was a substantial chance that the case would be reversed on appeal. After appellants appeared to be rejecting an offer of approximately $7 million, Princeton suggested to Mr. Gold that he request the appointment of a guardian ad litem for the minor child. Following Princeton’s suggestion, on February 27, 2002, Mr. Gold filed a petition on Princeton’s behalf to appoint a guardian ad litem for purposes of obtaining an independent, unbiased evaluation of the settlement offer. The petition was denied by the Honorable Carolyn E. Temin on March 7, 2002. The parties resumed negotiations following the denial of the petition to appoint a guardian, and five months later agreed to a structured settlement in the amount of $7.1 million. The Honorable Joseph D. O’Keefe approved the settlement by order dated September 5, 2002.

The instant action for abuse of process was commenced by complaint on May 22,2003. In this action, appellants claim damages for “mental anguish, anxiety and upset” caused by the filing of the petition to appoint a guardian ad litem for their son in the underlying medical malpractice action. On August 6, 2004, the defendants filed a motion for summary judgment. Appellants’ response was filed on September 7, 2004. This court granted the defendants’ motion for summary judgment on October 15, 2004.

Appellants filed a notice of appeal to the Superior Court on November 12,2004, and filed a concise statement of matters complained of on appeal pursuant to Pa.R.A.P. 1925(b) with this court on December 2,2004.

LEGAL DISCUSSION

Pennsylvania Rule of Civil Procedure 1035.2 delineates the situations in which it is appropriate for a court to enter summary judgment:

“(1) whenever there is no genuine issue of any material fact as to a necessary element of the cause of action or defense which could be established by additional discovery or expert report, or

“(2) if... an adverse party who will bear the burden of proof at trial has failed to produce evidence of facts essential to the cause of action or defense which in a jury trial would require the issues to be submitted to a jury.”

In determining whether to grant summary judgment, a court will examine the record in the light most favorable to the non-moving party, accepting as true all well-pleaded facts and giving the non-moving party the benefit of all reasonable inferences that could be drawn therefrom. Elder v. Nationwide Insurance Co., 410 Pa. Super. 290, 599 A.2d 996 (1991); McDonald v. The Marriott Corp., 388 Pa. Super. 121, 564 A.2d 1296 (1989). Summary judgment may properly be granted 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.” Marks v. Tasman, 527 Pa. 132, 134, 589 A.2d 205, 206 (1991).

First, summary judgment was proper where the legal process was not filed against appellants in their individual capacities. Appellants withdrew all of their own claims in their own right in the underlying medical malpractice action prior to its submission to the jury, proceeding solely in their capacity as the parents and natural guardians of their minor son Adam. The legal process in question (the petition to appoint a guardian ad litem) was filed subsequent to the withdrawal of appellants’ individual claims. It is undisputed that the petition was filed against appellants in their capacity as the parents and natural guardians of Adam only, and not against them in their own right as individuals. In Pennsylvania, it is well established that an action for wrongful use of civil process cannot be brought by individuals who were not parties in the underlying action. Rosen v. American Bank of Rolla, 426 Pa. Super. 376, 383, 627 A.2d 190, 193 (1993); Mi-Lor Inc. v. DiPentino, 439 Pa. Super. 636, 654 A.2d 1156 (1995). Thus, summary judgment was properly granted on this ground alone.

Second, summary judgment was further proper where appellants failed to produce evidence to establish the tort of abuse of civil process. It is well established that a cause of action for the tort of wrongful use of civil process requires a plaintiff to allege and prove the following three elements: (1) that the underlying proceedings were terminated in favor of the plaintiff; (2) that the defendant caused these proceedings to be instituted without probable cause; and (3) that the proceedings were instituted primarily for an improper purpose. Kelly-Springfield Tire Company v. D’Ambro, 408 Pa. Super. 301, 596 A.2d 867 (1991). A person has probable cause to bring an action when he reasonably believes in the facts on which it is based and in the viability of the legal theory under which it is brought. Gentzler v. Atlee, 443 Pa. Super. 128, 660 A.2d 1378 (1995). The existence of probable cause is a matter of law for the court to decide. Id.

Moreover, in order to state a cause of action for abuse of process, it is not enough that the defendant had bad or malicious intentions or that the defendant acted from spite or with an ulterior motive. Rosen v. Tesoro Petroleum Corp., 399 Pa. Super. 226, 582 A.2d 27 (1990), alloca-tur denied, 527 Pa. 636, 592 A.2d 1303 (1991). There must be an act or threat not authorized by the process, or the process must be used for an illegitimate aim such as extortion, blackmail, or to coerce or compel the plaintiff to take some collateral action. There is no liability where the defendant has done nothing more than cany out the process to its authorized conclusion, even though with bad intentions. Shaffer v. Stewart, 326 Pa. Super. 135, 473 A.2d 1017 (1984); Al Hamilton Contracting Co. v. Cowder, 434 Pa. Super. 491, 644 A.2d 188 (1994).

Instantly, appellants aver that Mr. Gold, on behalf of Princeton, filed a petition to appoint a guardian ad litem for Adam, in which it was alleged that appellants were failing to act in Adam’s best interest in refusing to accept a substantial settlement offer, primarily for the purpose of coercing appellants into accepting a settlement. The defendants, on the other hand, aver that they believed that appellants, who were experiencing marital problems at the time of settlement negotiations, had a disagreement between themselves as guardians/representatives of Adam, concerning whether to accept the settlement offer. The defendants further aver that they were concerned that this situation might create a potential conflict of interest in connection with the representation of Adam’s interests during settlement.

It is this court’s opinion that the defendants’ action in seeking an appointment of a guardian ad litem to represent Adam’s interests in the settlement of the underlying action was a legitimate object of the process, despite the fact that defendants’ petition to have such a guardian appointed was denied. See McGee v. Feege, 517 Pa. 247, 535 A.2d 1020 (1987); Pa.Phila.Civ.R. 2039.1(C). The legal process employed in seeking the appointment of a guardian was appropriate to ensure that Adam’s interests would be properly represented in settlement. The filing of the petition was not used to accomplish a purpose for which the process was not designed, even if the defendants had an ulterior motive in reaching a settlement agreement in the underlying case. See Al Hamilton Contracting Co. v. Cowder, supra. The evidence which appellants have produced in this action suggests nothing more sinister or malicious than a dispute over the settlement amount. The issue of whether the minor child’s interests were being adequately protected by appellants, as his parents and natural guardians, in these settlement negotiations was not so definitive that defendants should have been able to raise the question only at the risk of a second action for abuse of process. See Mi-Lor Inc. v. DiPentino, supra (summary judgment in favor of defendant landlords affirmed in plaintiff tenants’ claim of wrongful use of civil proceedings because there was no showing that the defendants attempted to misuse the civil process since there was a legitimate legal dispute). Accordingly, there are no facts to support the instant action for abuse of civil process.

In view of the foregoing, it is the opinion of this court that its grant of summaiy judgment in favor of the defendants should be affirmed.

      . Although this court entertained oral argument on November 10, 2004, on appellants’ motion for reconsideration of the order of October 15, 2004, granting summary judgment in favor of defendants, reconsideration was not granted.