author: WALKER, P.J.,

text:
    In re Estate of Mellott

      C.P. of Fulton County,
    no. 7 of 1994 OC.

      James M. Schall, for petitioner.

      Stanley J. Kerlin, for Milius.

      John M. Zimmerman, for the Martins.
    February 6, 2001-
   WALKER, P.J.,

BACKGROUND

On June 27, 2000, petitioner Fulton County National Bank, acting as court-appointed guardian for Ashley Mellott, requested the court’s approval of a private sale of her 1/3 interest in property previously owned by her father, Gary Mellott (now deceased). At that time, petitioner averred that it intended to sell the minor’s interest of approximately 86.81 acres to Dale W. Martin, along with her sisters’ remaining 2/3 shares in the property, for a total of $330,000. The bank explained that both of the minor’s sisters had already executed an agreement of sale for their 2/3 interests in the property to Mr. Martin, and that it had also signed the agreement on the minor’s behalf, contingent upon the court’s approval.

Shirley Mellott, the minor’s natural mother, filed objections to the proposed sale to Martin on July 13,2000, maintaining that the sale was not in the minor’s best interest because there existed a potential purchaser, Peter Milius, who was willing to pay approximately $7,500 above Mr. Martin’s offer. Mrs. Mellott further complained that the bank, by and through Stra-Wood Realty, did not adequately advertise the property for sale and essentially gave sole consideration to Mr. Martin’s offer. Finally, Mrs. Mellott suggested that Mr. Martin intended to use the entire property for a concentrated swine operation and that, therefore, the sale was not in the minor’s interest since she would live near a potential pollutant and/or nuisance.

A hearing on the matter was held on July 18, 2000, after which the court denied the petition because the sale was not publicly listed, there were higher backup bids on the property and the appraisal of the property exceeded the contract price to Mr. Martin by approximately $29,000. On October 17, the bank then filed a second petition to allow the sale to Mr. Martin, presumably because it had remedied the defects which prompted the court’s denial of the first sale to Mr. Martin. The bank averred in its second petition that, upon a survey of the property and resulting amended appraisal, Mr. Martin’s initial offer on the minor’s interest in the property was increased to $125,000.

Mrs. Mellott again filed objections to the proposed sale because (1) the bank had not offered to sell the interest to backup bidders or the general public, (2) that competitive bidding would have gotten a higher price for the minor, (3) the property was never publicly advertised for sale, (4) the bank dealt exclusively with Mr. Martin, (5) the bank never contacted backup bidders regarding the proposed sale, (6) the bank improperly disclosed the newly-appraised value of the interest to Mr. Martin, (7) Peter Milius is willing and able to purchase the property and (8) the identity of the buyer was not disclosed. She also maintains that the realtor’s commission and guardian’s fee should be allowed only on the original purchase price of $110,000. Finally, Mrs. Mellott objects to the joinder of Dale W. Martin, Leonard R. Martin and Dean R. Weaver to the instant action.

A hearing was accordingly held on the instant petition on November 14,2000 and all interested parties provided the court with briefs following the hearing. The court, by order dated December 8,2000, directed Mr. Milius to provide the court with an affidavit to assure the court that, should the court order a public auction of the property, he would submit a bid of at least $ 126,000. The order further required Mr. Milius to submit a letter of credit to the court indicating that he was able to procure a loan of no less than $150,000. Mr. Milius subsequently forwarded both documents to the court on December 27,2000.

DISCUSSION

Before turning to the merits of the petition, it is first necessary to resolve the joinder issue. While the Pennsylvania Orphans’ Court Rules do not expressly address the issue of joinder in a proceeding such as this, the rules allow for a petition to be presented, and then “a party opposing the granting of the prayer of the petition” may file an answer to the petition. Pa.O.C.R. no. 3.2. But such an opposing party is not a “defendant,” nor is the petitioner a “plaintiff,” as in a standard civil action. Thus, the court must agree with Mrs. Mellott that any motion for joinder per se in an orphans’ court matter of this nature is unauthorized. Though the court recognizes that Msrs. Martin, Martin and Weaver have a clear interest in the instant proceedings, those interests should be ably advanced by the bank, just as Mr. Milius’ interests have been advanced by Mrs. Mellott.

The paramount issue instantly is whether the sale of the 1/3 interest to Mr. Martin for $125,000 is in the minor’s best interest. Section 5155 of title 20 provides the following:

“Section 5155. Order of court
“Whenever the court finds it to befar the best interests of the minor, a guardian may, for any purpose of administration or distribution, and, on the terms, with the security and after the notice directed by the court:
“(1) sell at public or private sale, pledge, mortgage, lease or exchange any real or personal property of the minor;
“(2) grant an option for the sale, lease or exchange of any such property;
“(3) join with the spouse of the minor in the performance of any of the foregoing acts with respect to property held by the entireties; or
“(4) release the right of the minor in the property of his spouse and join in the deed of the spouse in behalf of the minor.” 42 Pa.C.S. §5155. (emphasis added)

The bank’s proposed sale of her 1/3 interest to Mr. Martin’s revised offer would be in her interest, but NOT in her best interest. Frankly, the minor’s best interest in this matter comes down to how much money she can get for her share of the property. At the November 14, 2000 hearing, however, Mr. Milius testified that he was willing to at least match Mr. Martin’s offer, and most likely best it. Since the hearing, he has put his money where his mouth is by forwarding an affidavit to the court which verifies that he stands ready and willing to open his bid at the amount of Mr. Martin’s latest offer. Further, the court has also been assured that Riggs Bank in Washington, D.C. will extend him a loan in the amount of $200,000. Therefore, the court will hold a private auction and afford both Mr. Martin and Mr. Milius the opportunity to outbid each other. Certainly, the minor’s best interest will be provided for by this scenario and the matter can be put to rest.

Before concluding, the court must note that Mrs. Mellott’s objections to the bank’s management of her daughter’s 1/3 interest are well taken. The court is likewise displeased by the bank’s activities surrounding the transaction. Proposing to sell her interest without an accurate measure of the total acreage at issue and without an accurate appraisal is an affront to the duties to which it consented to conform. As a guardian, the bank must be concerned solely with the minor’s best interests. It is not entirely clear that her interests were of the utmost concern and, indeed, the evidence presented at the hearing suggests that there was an unspoken partnership between Stra-Wood Realty and certain officers of Fulton County National Bank and Trust Company. As a result, this court will be hesitant to appoint the bank to act as guardian in future cases.

An appropriate order follows.

ORDER

February 6, 2001, having again considered petitioner Fulton County National Bank and Trust Company’s petition for permission to sell a minor’s real estate at private sale under Probate, Estates and Fiduciaries Code, section 5155, the evidence presented at the November 14, 2000 hearing, the briefs submitted by all interested parties, the affidavit of Peter Milius concerning his willingness to bid upon the minor’s 1/3 portion of the property in question and the letter of credit from Riggs Bank, the court enters the following order:

(1) The instant petition is denied, and a private auction between Mr. Martin and Mr. Milius shall be held at 2 p.m. on Tuesday, February 20, 2001, in the Fulton County Courthouse.

(2) The joinder of Dale W. Martin, Leonard R. Martin and Dean R. Weaver is denied.

(3) The following shall be the terms of the auction:

“(a) Parties to the auction shall submit their bids in open court.
“(b) The purchaser shall remit 20 percent of the total purchase price on the date of the auction, and the remaining balance shall be paid within 30 days.
“(c) All realty transfer taxes shall be divided equally between buyer and seller.
“(d) The real estate taxes (both school and county) shall be pro-rated between the buyer and seller as of the date of final settlement.”

(4) The realtor’s commission for Stra-Wood Realty and the guardian fee for Fulton County National Bank and Trust shall be calculated in accordance with Mr. Martin’s initial offer of $110,000, as opposed to whatever amount is settled upon at the February 20, 2001 auction.


source: Caselaw Access Project

author: MINORA, J.,

license: Public Domain

text:
    Alfieri v. DeNaples

      C.P. of Lackawanna County,
    no. 98 CV 03.

      Howard M. Spizer, for plaintiff.

      Terrence J. McDonald, for defendant Borough of Dunmore.

      Michael T. Savitsky, for defendants DeNaples.
    October 25, 2000—
   MINORA, J.,

I. INTRODUCTION

Currently before this court is defendant Borough of Dunmore’s motion for summary judgment. The underlying complaint was instituted by the plaintiff where she alleged negligence as a result of an attack by three vicious dogs while on her own property on January 1,1997. Counts I and II are directed against the other defendants (Dominick DeNaples et al.) and are not at issue in this current motion for summary judgment. Count III is directed against defendant Dunmore.

Plaintiff has alleged in her complaint and in the testimony given by deposition that the DeNaples’ dogs were allowed to roam freely and engaged in threatening and violent behavior in the past. The transcript of the deposition of plaintiff, Margaret Mary Alfieri, was filed on record on August 9, 2000, and is part of our consideration. In addition, the plaintiff filed an affidavit on July 13, 2000.

Plaintiff summarizes her testimony contained in her deposition and affidavit as follows:

Prior to being attacked by the dogs on January 1,1997, plaintiff had placed numerous calls to the Borough of Dunmore Police Department to complain about the loose dogs and their threatening behavior. On all occasions, the Dunmore Police Department promised the plaintiff that the police would take care of the problem and that they would notify the DeNaples of the complaints concerning the dogs and that they would undertake steps to see that the dogs were secure, but failed to do so.

Defendant Borough of Dunmore previously raised the same legal defenses in preliminary objections that they are raising now by summary judgment (Le., (1) Dunmore is immune from suit under 42 Pa.C.S. §8541 as no exception to governmental immunity applies; (2) Dunmore has no legal duty to provide police protection to plaintiff individually but only to the public at large).

While this court denied those preliminary objections on February 4, 1999, we were limited to a review of the pleadings. Now that the record has been supplemented by discovery, we can revisit those legal defenses which are the subject of Dunmore’s motion for summary judgment filed on March 24,2000. The borough filed its supportive brief also on March 24, 2000, and the plaintiff filed her brief in opposition thereto on April 24, 2000. The court entertained oral argument on August 9, 2000, thus rendering Dunmore’s motion for summary judgment ripe for disposition.

H. ISSUES

(1) Is the Borough of Dunmore entitled to summary judgment because (a) they are immune from suit under 42 Pa.C.S. §8541 and no exception applies and/or, (b) the borough owes no special duty to the individual plaintiff but only to the public at large?

m. DISCUSSION

A. The Standard of Review for Summary Judgment

Under Pa.R.C.P. §1035.2, summary judgment may be properly entered “where (1) there is no genuine issue of material fact as to a necessary element of the cause of action which could be established by additional discovery or an expert report, or (2) after completion of discovery and production of expert reports, 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.” Campanaro v. Pennsylvania Electric Co., 738 A.2d 472, 475-76 (Pa. Super. 1999); Reimer v. Lackawanna County, 101 Lacka. Jur. 123, 134 (1999). In considering a motion for summary judgment, all well-pleaded facts must be accepted as true and all doubts as to the existence of a genuine issue of material fact are to be resolved in favor of the non-moving party. Tenaglia v. Procter & Gamble Inc., 737 A.2d 306, 307 (Pa. Super. 1999); Rivera v. Barone, 99 Lacka. Jur. 130, 133 (1998).

The moving party has the burden of proving the nonexistence of any genuine issue of material fact and the movant’s entitlement to judgment as a matter of law. Rapagnani v. Judas Co., 736 A.2d 666, 668 (Pa. Super. 1999). To withstand such a motion, the non-moving party must adduce sufficient evidence on a crucial issue as to which that party bears the burden of proof so as to demonstrate that a jury could return a verdict in favor of the non-movant. Homes ex rel. Homes v. Housing Authority, 737 A.2d 825, 828 n.4 (Pa. Commw. 1999). Failure to produce any such evidence establishes that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Harman on Behalf of Harman v. Borah, 720 A.2d 1058, 1061 (Pa. Super. 1998); see also, Bernice Catalano v. Triple A. Security Systems Inc., 101 Lacka. Jur. 311, 315 (2000); Horne v. Haladay, 728 A.2d 954 (Pa. Super. 1999).

B. Dunmore’s Argument Based on Immunity of 42 Pa.C.S. §8541 And the Alleged Absence of a “Special Duty” to the Individual Plaintiff

With those principles in mind, we can now examine Dunmore’s specific contentions for summary judgment.

There is no question that the plaintiff does not meet the exception to governmental immunity contained in 42 Pa.C.S. §8542(b)(8) which states in pertinent part:

“(b) Acts Which Impose Liability — the following acts by a local agency or any of its employees may result in the imposition of liability on a local agency: ...
“(8) Care, custody or control of animals — the care, custody or control of animals In The Possession Or Control Of A Local Agency, including but not limited to police dogs and horses. Damages shall not be recoverable under this paragraph on account of any injury caused by wild animals, including but not limited to bears and deer, except as otherwise provided by statute.” (emphasis added)

Obviously, the dogs in question were owned by the DeNaples defendants and were not in the care, custody and control of the Borough of Dunmore. Therefore, as a matter of law, the exception does not apply. See Jenkins v. McDonald, 92 Pa. Commw. 140, 498 A.2d 487 (1985).

However, that is not the focused theory of liability put forth by the plaintiff. The true theory of liability as set forth in the plaintiff’s complaint (see Count III of plaintiff’s complaint filed June 1998) is a “special relationship exception” to the “No duty rule.”

The “No duty rule” provides that a police officer’s obligation to protect citizenry is a general duty owing to the public at large and not a specific duty owing to a particular person. Melendez v. City of Philadelphia, 320 Pa. Super. 59, 466 A.2d 1060 (1983); Thomas v. City of Philadelphia, 133 Pa. Commw. 121, 574 A.2d 1205 (1990); Morris v. Musser, 84 Pa. Commw. 170, 478 A.2d 937 (1984).

However, the appellate courts have developed a “special relationship exception” to the “No duty rule” which provides that if the police enter into a special relationship with an individual, the general duty owing to the public is narrowed into a specific duty owing to that person, the breach of which can give rise to a cause of action for damages. Morris v. Musser, supra.

In Rankin v. SEPTA, 146 Pa. Commw. 429, 606 A.2d 536 (1992), our Commonwealth Court set forth three things a plaintiff must demonstrate in order to carve out a “special relationship” exception to the “No duty rule:”

“(1) the plaintiff must demonstrate that the police were aware of the individual’s particular situation or unique status;
“(2) the plaintiff must demonstrate that the police had knowledge of the potential for the particular harm which the individual suffered; and
“(3) the police voluntarily assumed, in light of the knowledge, to protect the individual from the precise harm which was occasioned.” See Rankin v. SEPTA, 146 Pa. Commw. at 435, 606 A.2d at 538.

Now, we must examine the record to see if those elements conceivably exist that they would be submitted to a jury. Hames ex rel. Hames v. Housing Authority, supra.

There is no question that the plaintiff has demonstrated that the police were aware of her particular situation visa-vis the DeNaples dogs. (See plaintiff’s affidavit filed July 13, 2000; plaintiff’s deposition N.T. pp. 13,14,16, 18, 19, 20, 25, 35, 36, 37.)

In addition, it is conceivable that a jury could infer that the plaintiff could demonstrate that the police had knowledge of the potential for the particular harm which the plaintiff suffered. (See record cited above.)

Moreover, it is conceivable a jury could decide that the police voluntarily assumed, in light of the knowledge, that they would protect the plaintiff from the precise harm which was occasioned. According to her testimony, Dunmore promised that they would take care of the problem, and they would notify the defendants DeNaples of the complaints and they would undertake steps to see that the dogs were secure, but obviously failed to do so. (See record cited above.)

While Dunmore’s arguments in its brief are certainly skillful and well-reasoned, they are arguments that are more properly made to a jury as the finder of facts.

Therefore, we must deny Dunmore’s motion for summary judgment.

An appropriate order will follow.

ORDER

And now to wit, October 25, 2000, upon consideration of the motion for summary judgment of the defendant, Borough of Dunmore, and the able written and oral arguments of counsel and in accordance with the foregoing memorandum,

It is hereby ordered and decreed that the defendant Borough of Dunmore’s motion for summary judgment is denied.


author: COLINS, J.,

text:
    Jackson v. Rohm and Haas Company

      Richard Silverberg, for plaintiff.

      James D. Pagliaro and Paul Greco, for defendant Rohm & Haas.

      Nancy Gellman, for defendant McCrory.
    April 10, 2002—
   COLINS, J.,

I. PROCEDURAL HISTORY

Plaintiff Mark Jackson, sued Rohm and Haas Company, Michael McLaughlin, Celia Joseph, and Wayne Davis for invasion of privacy, intentional infliction of emotional distress and civil conspiracy. Original service of this action was served upon defendants on June 17, 1999. Plaintiff also sued June McCrory for defamation. Original service of this action was served upon June McCrory on July 1, 1999. On August 31, 2000, the two cases were consolidated. A jury was selected on September 21, 2001. In the middle of the trial, Michael McLaughlin, Celia Joseph, and Wayne Davis were individually released from the case. The claim of civil conspiracy was dismissed. Pursuant to a 20-day trial, the jury returned a verdict of $150,000 in favor of plaintiff and against R&H on October 19, 2001.

Plaintiff filed timely post-trial motions seeking removal of nonsuit, an additur, or in the alternative, a new trial. Following receipt of the transcript, written memoranda were submitted by the parties and oral argument was presented to the court on February 14, 2001.

After considering all of the written and oral presentations by the parties, the defendant R&H’s motion for post-trial relief is granted. Judgment n.o.v. granted in favor of defendant R&H.

II. FACTUAL BACKGROUND

June McCrory, a secretary at R&H, and Mark Jackson, an accountant at R&H, met at their place of employment, R&H. Mark Jackson called June McCrory on Friday, June 26, 1998, to ask her to have lunch the following week. During the conversation, Mr. Jackson offered to drive June McCrory home that evening so she would not have to take a cab in the middle of the SEPTA strike. June McCrory accepted. Mr. Jackson and Ms. McCrory left work together. When they arrived at Ms. McCrory’s home, they continued talking in the car. Mr. Jackson asked Ms. McCrory to dinner for the evening and she accepted. They went to dinner and two nightclubs. At the end of the evening, Mr. Jackson drove Ms. McCrory to his apartment. The events after this point in the evening are disputed.

Ms. McCrory told a friend and co-worker about allegations of sexual assault that occurred on the evening she spent with Mr. Jackson. The friends encouraged Ms. McCrory to report the matter. On July 10, 1998, the friénds took Ms. McCrory to the human resources office and Ms. McCrory spoke with two attorneys from R&H. Later, Mr. Jackson was interviewed about the report from Ms. McCrory.

After interviewing both parties, company representatives concluded that they were unable to resolve the differences between the recitation of events given by Mr. Jackson and Ms. McCrory and informed the parties that the company would take no further action.

Mr. Jackson continued to be employed by R&H and was promoted in March 2000. In August 2000, he left on disability claiming he was no longer able to work because of “severe depression” which he contended was related to events at issue in this litigation. Ms. McCrory left R&H in December 1998 and stated that the sexual assault incident prompted her to seek other employment.

Plaintiff Mark Jackson, brought claims arising from R&H’s response to certain information obtained from June McCrory regarding events that took place on June 26-27, 1998. Mark Jackson brought claims of invasion of privacy and intentional infliction of emotional distress against the company and a claim of defamation against June McCrory. June McCrory filed counterclaims of assault and battery and intentional infliction of emotional distress.

III. LEGAL DISCUSSION

A. The Plaintiff’s Motion for Judgment N. O. V. Must Be Granted

Pennsylvania law has long held that a motion for judgment n.o.v. is properly entered only in clear cases, where viewing the evidence in the light most favorable to the verdict winner and granting the verdict winner every reasonable and favorable inference there is insufficient evidence to sustain a verdict. Sundlun v. Shoemaker, 421 Pa. Super. 353, 358, 617 A.2d 1330, 1333 (1992). A judgment n.o.v. is appropriate where either the evidence is such that no two reasonable minds could disagree that the outcome should have been rendered in favor of the movant or the movant is entitled to a judgment as a matter of law. Moure v. Raeuchle, 529 Pa. 394, 604 A.2d 1003 (1992). In this case, movant, R&H, is entitled to a judgment as a matter of law.

1. A Review of the Facts Presented at Trial Indicate That Mr. Jackson’s Claims Were Barred by the Pennsylvania Workers’ Compensation Act

R&H claimed that a judgment n.o.v. was required because the Pennsylvania Workers’ Compensation Act barred Mr. Jackson’s invasion of privacy claim as a matter of law. R&H further contended that the personal animus exception to the WCA, raised by Mr. Jackson, did not apply in this case. This court agrees.

The WCA provides exclusive benefits for workers who suffer injury arising in the course of employment or in relation to employment. 77 P.S. §411(1). Under the Act, the employee gives up his or her common-law right to damages for any injury occurring in the course of employment in exchange for the exclusive statutory right to compensation for all injuries. Socha v. Metz, 385 Pa. 632, 637, 123 A.2d 837, 839 (1956). This exclusivity provision has been set forth in section 303 of the Act, stating:

“The liability of an employer under this Act shall be exclusive and in place of any and all other liability to such employes [sic]... otherwise entitled to damages in any action at law or otherwise on account of any injury or death defined in [section 411].” 77 P.S. §481.

The exclusive effect of the Act is to immunize an employer from civil suits brought by their employees for work-related injuries. Kline v. Arden H. Verner Co., 503 Pa. 251, 469 A.2d 158 (1983). This not only includes negligence claims, but also intentional tort claims against an employer. See Poyser v. Newman & Company Inc., 514 Pa. 32, 36, 522 A.2d 548, 550 (1987).

Mr. Jackson contended that the injury he suffered was not barred by the WCA. In order for Mr. Jackson’s contention to be valid, his injury must have arisen outside his course of employment or have fallen under an exception, namely the personal animus exception.

The first issue before this court was to decide whether Mr. Jackson’s injuries were work-related. If so, the WCA barred Mr. Jackson’s civil claim. Whether a claimant is acting within the scope of employment at the time of the injury so as to fall within coverage of the WCA is a question of law to be determined on the basis of the findings of fact. 77 P.S. §1. Albright v. Fagan, 448 Pa. Super. 395, 671 A.2d 760 (1996). Based on the facts presented at trial the court finds that Mr. Jackson’s injury arose from the workplace and therefore, his tort claim against R&H was barred by the WCA.

Mr. Jackson claimed that his injury arose outside the course of his employment. Plaintiff testified that he and June McCrory went on a date on a Friday night that resulted in a consensual sexual encounter between plaintiff and Ms. McCrory. Mr. Jackson claimed that the evening was purely social. He further claimed that any injury that arose from this incident was outside the course of employment.

Mr. Jackson’s assertions did not provide a full accounting of the events. An accurate reading of the record included facts that Mr. Jackson and Ms. McCrory initially met at work. 9/24/01 a.m. tr. 99. Mr. Jackson called Ms. McCrory at work. 9/24/01 a.m. tr. 101. He made plans with Ms. McCrory at work while they were both at work. 9/24/01 a.m. tr. 101-102. They met in the lobby at work at the end of the work day. 9/24/01 a.m. tr. 106. The evidence presented at trial further reflected that work was a topic for a portion of the evening. 9/24/01 p.m. tr. 3-5; 9/25/01 a.m. tr. 37.

Mr. Jackson focused on the evening out with June McCrory and claimed that his injuries arose from the night out with her. The record does not support this contention. The injuries for which plaintiff sought recovery against defendant R&H stemmed from R&H’s interview and the manner in which the interview was conducted. Were it not for the employer-employee relationship between Mr. Jackson and R&H, R&H never would have interviewed Mr. Jackson.

The record revealed that Mr. Jackson’s alleged injuries occurred when the company employees responded to a report of sexual harassment and inquired about the evening. Mr. Jackson’s testimony revealed the injuries for which he sought compensation. Mr. Jackson was called to an interview at work which took place towards the end of the business day. 9/25/01 p.m. tr. 95. The company asked “horrible questions” during the interview. 9/24/01 p.m. tr. 43. Mr. Jackson claimed he “couldn’t breathe” during the interview. 9/24/01 p.m. tr. 45-46. Mr. Jackson was “terrified” during the interview. 9/24/01 p.m. tr. 49. Mr. Jackson was crying during the interview. 9/24/01 p.m. tr. 53, 54. Mr. Jackson testified that he felt “just real messed up.” 9/24/01 p.m. tr. 54. Mr. Jackson became angry and humiliated during the interview. 9/24/01 p.m. tr. 55. When Mr. Jackson received a confidential letter indicating the outcome of the company’s investigation, he “became physically ill.” 9/24/01 p.m. tr. 60-63. Eventually, Mr. Jackson discovered that Nigel Spence and Tanya Miller, two additional people who worked at R&H, were involved in the investigation. 9/25/01 p.m. tr. 22. He felt he could no longer work because of the investigation which took place at work. He left work on disability as a result of the investigation. 9/24/01 p.m. tr. 92. The evidence revealed that Mr. Jackson’s injuries occurred from the interviewing process and arose at the workplace during work hours when Mr. Jackson was required to be at work. If there was no report of sexual harassment in the workplace no interviewing process would have taken place in the workplace and Mr. Jackson would not have been injured.

June McCrory informed R&H on July 10,1998, about having unconsenual sex with Mr. Jackson. She was “troubled” about seeing him at work. 10/02/01 p.m. tr. 6. Ms. McCrory was “not at all” “looking forward to having contact with Mr. Jackson at the workplace.” 10/02/01 p.m. tr. 12. He called and e-mailed her at work. Id. She was also concerned about preventing the alleged incident from occurring to any other victim. 10/02/01 p.m. tr. 6. R&H believed Ms. McCrory’s claim constituted sexual harassment. See Huitt v. Market Street Hotel Corp., 1993 WL 245744 (D. Kan.) (1993) (finding one incident of rape, if proven, constitutes sexual harassment and supports claim of hostile work environment, even if conduct did not occur at workplace where an upper level employee made plans to drive lower level employee home).

Mr. Jackson claimed that since the evening was social and not work-related, R&H employees had no right to ask him about it. The sexual encounter in question took place outside the workplace and was unrelated to work. Mr. Jackson, therefore, felt that R&H invaded his privacy. However, the evidence showed that the company, R&H, had a federally mandated duty to investigate and follow up on June McCrary’s report of sexual harassment. The company was simply fulfilling its duty as required by law. Even if Mr. Jackson’s privacy was invaded by R&H, his claim for invasion of privacy was barred by the WCA. See King v. United Parcel Service Inc., 15 D.&C.4th 538 (Delaware Cty. 1992).

As a matter of public policy, investigations into claims of sexual harassment are not only encouraged, they are mandated. This is evidenced by the fact that there is a federal law mandating that such claims be investigated. The United States Supreme Court has addressed the issue of sexual harassment in the workplace. The Federal Civil Rights Act of 1964 (Title VII) governs sexual harassment in the workplace. 42 U.S.C. §2000(e). Under this federal law an employer must investigate claims of sexual harassment or risk liability themselves. Faraquah v. City of Boca Raton, 524 U.S. 775, 118 S.Ct. 2275, 2292-93, 141 L.Ed.2d 662 (1998).

In fulfilling its federally mandated duty, R&H initiated a brief interviewing process into the sexual harassment claim. See Malik v. Carrier Corp., 202 F.3d 97 (2000) (mandating employer’s investigation into a sexual harassment claim; finding that a worst-case scenario must govern the conduct of employer’s investigation). Company officials met with June McCrory for about an hour. 10/02/01 a.m. tr. 25. Company officials met with Mr. Jackson for approximately one and a half hours to discuss the allegations. 9/25/01 p.m. tr. 104. The company came to a decision in about 10 to 15 minutes which Mr. Jackson considered to be “rather quickly.” Id. Details of the investigation were kept confidential, even from Mr. Jackson’s supervisors so that the privacy and integrity of all involved could be maintained while the report was being investigated. 9/25/01 p.m. tr. 104. During the interviewing process, company officials were made aware that the plans for Jackson and McCrory to spend time together began with a phone call at work. The two met at work and the conversation between a superior employer and subordinate consisted of work and promotions. R&H properly investigated the report of sexual harassment. The questions asked during the interview, though uncomfortable, were necessary for a proper investigation into a sexual harassment claim. See Malik v. Carrier Corp., 202 F.3d 97 (2000). Since this investigation was part of the proper employer/employee relationship, any claim from injury arising from the interview are barred by the WCA. See Schweitzer v. Rockwell International, 402 Pa. Super. 34, 50-51, 586 A.2d 383, 391 (1990).

Mr. Jackson next contended that even if this court were to find that the injury he suffered did not arise outside of his course of employment, he had a valid claim under the personal animus exception to the WCA. The personal animus exception provides that an employee may bring a cause of action based upon an injury occurring within the course of employment only if the injury was “caused by an act of a third person intended to injure the employe because of reasons personal to him, and not directed against him as an employee or because of his employment.” Shaffer v. Procter & Gamble, 412 Pa. Super. 630, 635, 604 A.2d 289, 292 (1992); 77 P.S. §411(1). “If the third party would have attacked a different person in the same position as the injured employee, the attack falls outside the ‘third party attack’ exception.” Id. at 635, 604 A.2d at 292 (quoting Vosburg v. Connolly, 405 Pa. Super. 121, 126-27, 591 A.2d 1128, 1131 (1991)). If the personal animus exception applied, Mr. Jackson was free to pursue any common-law remedy available against the employer.

The appropriate inquiry as to the personal animus exception is whether the injury is personal in nature and not a part of the proper employer-employee relationship. Schweitzer v. Rockwell International, 402 Pa. Super. 34, 586 A.2d 383 (1990). When the injury caused is due to personal and not work-related reasons, the injury cannot be said to have risen out of employment, even though the injury occurred during work hours and at the place of employment. Id. However, in determining whether an injury occurred during the course of employment there is a rebuttable presumption that the injury is work-related when the injury occurs at the workplace. Wills Eye Hospital v. W.C.A.B. (Dewaele), 135 Pa. Commw. 6, 582 A.2d 39 (1988), aff’d per curiam, 525 Pa. 504, 582 A.2d 857 (1990).

Section 411 of the Act specifies, in defining what constitutes an “injury arising in the course of employment,” that the term does not include “an injury caused by an act of a third person intended to injure the employee because of reasons personal to him, and not directed against him as an employe or because of his employment.” This provision has been interpreted to permit an employee to maintain a common-law tort action against his employer “whenever his or her injury is the result of an attack or assault by a third person or fellow employee for reasons that are personal to the attacked and not connected with the victim’s employment. To fit within this exception, the third party’s or fellow employee’s act must have been motivated by his animosity against the injured employee. If the third party would have attacked a different person in the same position as the injured employee, the attack falls outside the ‘third party attack’ exception.” Vosburg v. Connolly, 405 Pa. Super. 121, 126-27, 591 A.2d 1128, 1131 (1991). (emphasis in original)

Both plaintiff and defendant R&H focused on the actions and alleged animosity R&H employees directed towards Mr. Jackson. There was no allegation that any acts of June McCrory constituted animosity directed towards Mr. Jackson; nor should any animosity by June McCrory bear any effect on Mr. Jackson’s claim that R&H’s employees held personal animus for Mr. Jackson.

In this case, company officials interrogated Mr. Jackson about intimate details of a sexual encounter. The record clearly reflected that the reason the company employees inquired into the encounter was because an employee reported a claim of sexual harassment in the workplace. Mr. Jackson stipulated that R&H employees involved in the investigation were acting in the course of their employment. 10/16/01 p.m. tr. 22:4 to 25:7. Mr. Jackson also conceded that he knew of no reason of why Michael McLaughlin or Wayne Davis, the two people who interviewed him, might harbor any personal animus towards him. 9/25/01 p.m. tr. 84-86, 95-96. A review of the record also reflected that there was no evidence presented indicating that R&H desired to harm Mr. Jackson personally. 10/5/01 p.m. tr. 12:21 to 13:16; 10/9/01 p.m. tr. 41 to 46; 10/11/01 a.m.tr. 10 to 12; 10/16/01 a.m. tr. 87. In fact, a review of the record indicated that R&H took steps to protect the privacy of the parties involved in the investigation. There was no evidence presented from which a jury could have reasonably concluded that R&H treated Mr. Jackson differently than it would have treated any other employee who had been accused of raping a co-worker. Mr. Jackson failed to show that R&H’s investigation into a report of sexual harassment was motivated by a history of personal animosity toward him; therefore, he failed to prove a claim which would fall under the personal animus exception. See Feidler v. Morris Coupling Co., 784 A.2d 812 (Pa. Super. 2001).

As such, Mr. Jackson’s claim is barred as a matter of law under the WCA. R&H’s motion for judgment n.o.v. on the claim of invasion of privacy is granted.

B. The Plaintiff’s Motion for Removal of Nonsuit and for a New Trial Must Be Denied

1. Trial Court Properly Granted a Nonsuit As to Plaintiff’s Claim for Punitive Damages

A defendant may move for compulsory nonsuit to test the sufficiency of a plaintiff’s evidence. Hatbob v. Brown, 394 Pa. Super. 234, 237, 575 A.2d 607, 608 (1990); Francioni v. Gibsonia Truck Corp., 472 Pa. 362, 371, 372 A.2d 736, 740 (1977). Pennsylvania law has long held that a motion for nonsuit should be granted when the plaintiff has not established a cause action. Hatbob, 394 Pa. Super. at 237, 575 A.2d at 608. In deciding a motion for nonsuit the plaintiff must be given the benefit of all reasonable inferences arising from the evidence. Id. It is the duty of the trial court to determine whether the plaintiff has introduced sufficient evidence to establish the necessary elements to maintain a cause of action, prior to the submission of the case to the jury. Id. The trial court properly mled as a matter of law, that plaintiff failed to present sufficient evidence to allow punitive damages to be presented to the jury. 10/16/01 p.m. tr. 58-59.

a. Defendant McCrory’s conduct did not rise to the necessary standard for punitive damages

The trial judge must determine whether the plaintiff presented sufficient evidence to support a punitive damages claim, that is, the facts from which a jury might reasonably conclude that preponderance of the evidence establishes outrageous conduct by the defendant. Martin v. Johns-Manville Corp., 508 Pa. 154, 494 A.2d 1088 (1985).

Punitive damages are properly assessed in cases where there is outrageous behavior, where the defendant’s egregious conduct shows either an evil motive or reckless indifference to the rights of others. Williams v. Syed, 782 A.2d 1090 (Pa. Commw. 2001). Actions of outrageousness demonstrate intentional, willful, wanton or reckless conduct and are awarded to punish that person for such conduct. SHV Coal Inc. v. Continental Grain Co., 526 Pa. 489, 587 A.2d 702 (1991).

To award punitive damages for a claim based on reckless conduct the plaintiff must demonstrate that the defendant’s conduct involved “easily perceptible danger of death or substantial physical harm, and the probability that it will so result must be substantially greater than is required for ordinary negligence.” Moran v. G. & W.H. Corson Inc., 402 Pa. Super. 101, 114, 586 A.2d 416, 423 (1991). (emphasis in original) Thus, “punitive damages are awarded only for outrageous conduct, that is, for acts done with a bad motive or with a reckless indifference to the interests of others.” Chambers v. Montgomery, 411 Pa. 339, 344, 192 A.2d 355, 358 (1963). The plaintiff must also demonstrate that there was knowledge or reason to know of a high degree of risk of physical harm to another, by the defendant. Restatement (Second) of Torts §500 comment (a); Martin v. Johns-Manville Corp., 508 Pa. at 171, 494 A.2d at 1097.

In order for a judge to allow a claim of punitive damages to go to the jury in a defamation case, a plaintiff must present evidence of the defendant’s intent behind his or her actions to demonstrate actual malice by clear and convincing evidence. Bargerstock v. Washington Greene Community Action Corporation, 397 Pa. Super. 403, 415, 580 A.2d 361, 375 (1990).

In this case, Mr. Jackson presented evidence that June McCrory falsely accused him of rape. He presented no evidence as to June McCrary’s state of mind when falsely accusing him of rape. Without presenting evidence as to the defendant’s intent behind his or her actions, a plaintiff cannot demonstrate actual malice by clear and convincing evidence. Such evidence is required to make a case for punitive damages in a defamation claim. Bargerstock, 397 Pa. Super. at 415, 580 A.2d at 375. The trial court properly granted nonsuit for punitive damages as to June McCrory.

b. Defendant Rohm and Haas’ conduct did not rise to the necessary standard for punitive damages

Even if Mr. Jackson had a valid claim against Rohm and Haas that was not barred by the WCA, punitive damages were properly kept from the jury. Again, the standard is the same. The trial judge must determine whether the plaintiff presented sufficient evidence to support a punitive damages claim, that is, the facts from which a jury might reasonably conclude that preponderance of the evidence establishes outrageous conduct by the defendant. Martin v. Johns-Manville Corp., 508 Pa. 154, 494 A.2d 1088 (1985).

Punitive damages are properly assessed in cases where there is outrageous behavior, where the defendant’s egregious conduct shows either an evil motive or reckless indifference to the rights of others. Williams v. Syed, 782 A.2d 1090 (Pa. Commw. 2001). Actions of outrageousness demonstrate intentional, willful, wanton or reckless conduct and are awarded to punish that person for such conduct. SHV Coal Inc. v. Continental Grain Co., 526 Pa. 489, 587 A.2d 702 (1991).

Mr. Jackson’s claim that punitive damages should be allowed to be presented to the jury with regard to R&H stemmed from the allegation that there were a couple additions to the notes taken from the interview. 10/04/01 a.m. tr. 20, 33,61,62, 64; 10/14/01 p.m. tr. 42. A couple numbers and a circle were added to the notes. Id. These notations or additions were insubstantial and in no way changed the substance of the notes. The evidence was not sufficient to sustain a claim that R&H acted with an evil motive or reckless indifference. A review of the Pennsylvania case law dealing with documents or notes in which a claim of punitive damages was presented to the jury indicates that the court properly refrained from allowing a claim of punitive damages to be presented to the jury with regard to R&H. See D’Ambrosio v. Pennsylvania National Mutual Casualty Insurance Co., 262 Pa. Super. 331, 396 A.2d 780 (1978) (allowing punitive damages to be presented to jury where defendant refused to cooperate in providing documents to plaintiff); Forman v. Cheltenham National Bank, 348 Pa. Super. 559, 502 A.2d 686 (1985) (allowing punitive damages to be presented to jury where defendant submitted forged documents); Romah v. Hygienic Sanitation Co., 705 A.2d 841 (Pa. Super. 1997) (allowing punitive damages to be presented to jury where plaintiff alleged that defendant intentionally concealed test results).

c. The law of the case doctrine did not preclude the trial court from granting a nonsuit as to punitive damages

Mr. Jackson claimed that the defendants’ claims for punitive damages were prohibited by the law of the case doctrine. The law of the case doctrine did not apply to this case. The defendants’ motion for nonsuit as to punitive damages were not previously addressed and therefore the law of the case doctrine did not apply. Goldey v. Trustees of University of Pennsylvania, 544 Pa. 150, 155-56, 675 A.2d 264, 267 (1996) (holding that law of the case doctrine prevents judges sitting in coordinate jurisdiction with one another from overruling motions of the same kind). The trial court properly held the law of the case doctrine did not apply.

2. The Plaintiff’s Motion for Additur and New Trial Must Be Denied

Plaintiff moved for additur and in the alternative a new trial. Plaintiff contended that due to injuries to his reputation and substantial evidence of mental anguish and suffering, that no jury could have awarded zero damages.

It was the jury’s duty to assess damages. As fact-finders, they have the sole responsibility to weigh the veracity and credibility of the witnesses and their testimony. Dranzo v. Winterhalter, 395 Pa. Super. 578, 577 A.2d 1349 (1990). “A [jury] verdict [will only be] set aside as inadequate when it is so inadequate as to indicate passion, prejudice, partiality, or corruption, or where it clearly appears from uncontradicted evidence that the amount of the verdict bears no reasonable relation to the loss suffered by the plaintiff.” Id. at 585, 577 A.2d at 1352. “If the verdict bears a reasonable resemblance to the damages proved, the appellate court will not disturb the verdict merely because the damages are less than the reviewing court might have awarded.” Slaseman v. Myers, 309 Pa. Super. 537, 541, 455 A.2d 1213, 1215 (1983). To support the grant of a new trial for inadequacy of the damage award, the injustice of the verdict “should stand forth like a beacon.” Cooley v. Jefferson Bank, 355 Pa. Super. 1, 4, 512 A.2d 713, 714 (1986). In the instant case, there is no evidence that the verdict resulted from passion, prejudice, partiality or corruption and, therefore, no additur will be awarded or a new trial granted.

a. The jury verdict was not unreasonable

The jury’s award of zero damages to Mr. Jackson in his defamation claim against June McCrory did not shock one’s sense of justice. Mr. Jackson correctly stated that when a communication is found to be slander per se, the plaintiff need not prove any pecuniary loss. The defendant will automatically be liable for the actual harm suffered as a result of the communication. Brinich v. Jencka, 757 A.2d 388 (Pa. Super. 2000). However, Mr. Jackson assumed that the communication caused actual harm. Whether or not there was actual harm was for the jury to decide. Walker v. Grand Central Sanitation Inc., 430 Pa. Super. 236, 250, 634 A.2d 237, 244 (1993); McGovern v. Chilson, 47 D.&C.4th 449 (Bradford Cty. 2000). A review of the record indicated that the jury was presented with ample evidence to support the award of zero damages to Mr. Jackson. Mr. Jackson suffered no loss of wages or medical expenses. In fact, Mr. Jackson received promotions and salary increases. The jury weighed the evidence and found that Mr. Jackson received no injury caused by June McCrory.

3. Plaintiff’s Motion To Mold the Verdict Must Be Denied

The court’s worksheet indicated a verdict in favor of June McCrory. This was correct because there were no damages awarded. To prove a defamation claim, the plaintiff must prove actual damages. Walker, 430 Pa. Super. at 250, 634 A.2d at 244. The jury found Mr. Jackson suffered no actual damage, so they awarded zero damages. Mr. Jackson provided no authority to bolster his claim that the trial worksheet was incorrect.

rv. CONCLUSION

The foregoing explains the reasons for the court’s decision in this case.

ORDER

And now, April 10, 2002, after careful consideration of the motions for post-trial relief, and review of all briefs submitted by the parties, and after hearing post-trial argument, it is hereby ordered that for the reasons set forth in the court’s memorandum of law filed this date, defendant Rohm and Haas Company’s motion for post-trial relief is granted. Judgment n.o.v. is granted in favor of defendant Rohm and Haas Company.

It is also ordered that for the reasons set forth in the court’s memorandum of law filed this date, plaintiff Mark Jackson’s motions for post-trial relief are denied.

It is also ordered that the motion of defendant and counterclaimant June McCrory for post-trial relief is dismissed as moot.


author: SAYLOR, J.,

text:
    Kronenburg v. Van De Plas

      C.P. of Northumberland County,
    no. CV-01-1401.

      John W. Purcell Jr., for plaintiff.

      Wayne W. Ringeisen, for defendants.

      Jonathan B. Fellows, for defendant Van Logten.
    April 2, 2002
   SAYLOR, J.,

The question presented before this court is the application of section 5322(a)(1) of the Pennsylvania long-arm statute, 42 Pa.C.S. §5322, which provides for personal jurisdiction in certain circumstances over a nonresident defendant, to this dispute over contract obligations with Dutch nationals, residents of the Netherlands, and whether extending personal jurisdiction in this matter complies with the due process clause of the Fourteenth Amendment of the United States Constitution. This court holds, for the reasons set forth below, that section 5322(a)(1) of Pennsylvania’s long-arm statute does confer personal jurisdiction over the defendants in this matter, and that this exercise of jurisdiction comports with the constitutional requirements of the Fourteenth Amendment.

Plaintiff filed his complaint on October 2, 2001. Defendant Mario Van Logten filed preliminary objections to the complaint on December 13,2001. Defendants Dirk Biemans and Intergrow Inc. filed preliminary objections to the complaint on January 11, 2002. Plaintiff’s responses to the preliminary objections were filed on January 30, 2002. Plaintiff and defendants submitted briefs on the preliminary objections and argument on the matter was held on March 4, 2002.

At the time of argument, counsel for both parties indicated that the facts material to the disposition of the preliminary objections were undisputed, and for this purpose depositions or a hearing were not required here. At least at this stage of the proceedings, the court must assume that there was a contractual relationship between them by accepting such allegations by plaintiff in his complaint.

In 1998, the defendants, from the Netherlands, contacted the plaintiff at his home in Mount Carmel, Northumberland County, Pennsylvania, for the purpose of soliciting his expertise in locating a site (presumably in the U.S.) for a greenhouse. The contact of the plaintiff by the defendants was facilitated by a previous relationship between the parties where they worked together in a similar capacity.

An agreement was faxed to the plaintiff at his home on March 18, 1998. The agreement outlined what his role would be as a consultant in this venture. The agreement outlined his services to be as follows: (1) to find a suitable construction site with the required permits for the greenhouse; (2) find suitable American bank financing for the project; (3) research, arrange, and finalize any potential subsidies and government guarantees; and (4) advise the defendants of legal issues during the start-up phase of the project. The compensation for these services was to be $100,000. In addition, the agreement established a nine percent commission on the gross sale of the tomatoes to be produced at the facility.

Initially, the defendants requested that a site for the greenhouse was to be located in the southern portion of the United States. After researching this request and contacting the appropriate real estate agents, a site was located in North Carolina. Plaintiff and the defendants met in Pennsylvania and from there they proceeded together to inspect the potential site. The defendants ultimately purchased the site, although it was never developed by them.

Sometime after the purchase of the North Carolina site, the defendants contacted the plaintiff again, this time regarding an existing greenhouse located in Portageville, New York. Defendants then met with the plaintiff in Pennsylvania to discuss the possibility of purchasing the New York site. Defendants purchased the New York site and once again asked if the plaintiff would market and sell the tomatoes that would be produced at the New York site.

Plaintiff agreed that he would market and sell all the tomatoes to be produced at the New York site but requested that the contract for this service be a long-term commitment. The long-term agreement was to prevent the defendants from gaining access to the plaintiff’s client base and then removing him from the process. Contract negotiations stopped after this request was made. Several weeks later the defendants contacted the plaintiff at his home in Pennsylvania and agreed to the plaintiff’s stipulation that he was to market and sell all the tomatoes to be produced at the New York site. Defendants further agreed that this agreement would be for the life of the facility.

The New York greenhouse operation was at some point incorporated under the name of Intergrow Inc. The defendants are alleged to be the sole shareholders thereof.

In compliance with the agreement, the plaintiff contracted with a company to market and sell the tomatoes on his behalf, that is, Gourmet Gardens, a Pennsylvania corporation. Defendants initially shipped 90 to 100 percent of their tomatoes to a distribution center in Pennsylvania. The customer base included clients located in Pennsylvania. This relationship continued until the beginning of 2000. At this time the plaintiff became aware that the defendants were not shipping their entire production of tomatoes from the New York greenhouse through him for resale as they previously agreed.

Plaintiff filed a suit against the defendants in U.S. District Court for the Middle District of Pennsylvania on May 9,2001, alleging breach of contract. Defendants contested the court’s jurisdiction based on the lack of diversity of citizenship. Plaintiff then consented to the dismissal of the case in federal court. Defendants then brought an action in the Supreme Court of the State of New York, Allegany County, seeking a declaration that the correspondence at issue between the parties did not constitute enforceable contracts. Defendants’ action is still pending in the New York court. Plaintiff subsequently filed this action for breach of contract.

Pursuant to the Judiciary Act, 42 Pa.C.S. §§5301-5329, our courts may exercise two types of in personam jurisdiction over a nonresident defendant. The first type of personal jurisdiction is general jurisdiction. To determine if a court has general jurisdiction over a nonresident defendant the court looks to see if the defendant’s contacts with the forum state are founded on general activities that are continuous and systematic. Allied Leather Corp. v. Altama Delta Corp., 785 F. Supp. 494 (M.D. Pa. 1992) (quoting Horowitz Financial Corp. v. Vacation Time Hilton Head Inc., no. 90-4449, WL 1912149 at *2, 1991 U.S. Dist. Lexis 13375 at *5 (D.N.J. Sept. 23, 1991)). The threshold that must be met for a forum state to have general jurisdiction “is much higher than that for specific jurisdiction, as the facts required to assert general jurisdiction must be ‘extensive and pervasive.’ ” Id. at 498 (citing Reliance Steel Products Co. v. Watson, Ess., Marshall & Enggas, 675 F.2d 587, 589 (3d Cir. 1982)). General jurisdiction exists when the nonresident defendant’s contacts with the forum state are voluntary actions that deem him present in that state. Voluntary actions must indicate that the nonresident defendant “purposely availed itself of the privilege of conducting activities within [Pennsylvania], thus invoking the benefits of its laws.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985).

It is clear from the facts before this court that the defendants’ contacts with Pennsylvania were not extensive or pervasive enough to support general jurisdiction. To determine whether the nonresident defendants’ contacts meet general jurisdiction, the court must look at the “nature and quality of the business contacts.” Altama, 785 F. Supp. at 498. Contacts that have been held to meet this standard are “direct sales in the forum, maintenance of a sales force in the state, advertising targeted at the residents of the forum state, and the derivation of a significant slice of revenue from activity within the state.” Id. The facts before this court do not indicate that the defendants targeted sales in this state, advertised in this state, or derived a majority of their revenue from their clients in Pennsylvania; therefore, this court cannot exercise general jurisdiction over the defendants.

The second type of jurisdiction that this court may exercise is specific or transactional jurisdiction. This form of jurisdiction is focused upon the nonresident defendant’s particular acts within the forum state that gave rise to the underlying cause of action. Waimberg v. Medical Transp. of America Inc., 52 F. Supp.2d 511 (E.D. Pa. 1999). See Hall-Woolford Tank Co. v. R.F. Kilns, 698 A.2d 80 (Pa. Super. 1997). In the case at bar, specific jurisdiction is the only form of jurisdiction that may be asserted. However, regardless of which form of jurisdiction is being asserted, the jurisdiction must be tested against the two-prong test established by the Pennsylvania Supreme Court. See Hall-Woolford Tank Co. v. R.F. Kilns, 698 A.2d 80 (Pa. Super. 1997). Thus, jurisdiction over a nonresident defendant must be tested against both Pennsylvania’s long-arm statute and the due process clause of the Fourteenth Amendment to the United States Constitution. Kubik v. Letteri, 532Pa. 10, 614 A.2d 1110 (1992).

A court of this Commonwealth may exercise personal jurisdiction over a nonresident defendant through its long-arm statute in 42 Pa.C.S. §5322. The applicable portion of that statute is set forth below:

“(a) General rule. — A tribunal of this Commonwealth may exercise personal jurisdiction over a person (or the personal representative of a deceased individual who would be subject to jurisdiction under this subsection if not deceased) who acts directly or by an agent, as to a cause of action or other matter arising from such person:
“(1) Transacting any business in this Commonwealth. Without excluding other acts which may constitute transacting business in this Commonwealth, any of the following shall constitute transacting business for the purpose of this paragraph:
“(i) The doing by any person in this Commonwealth of a series of similar acts for the purpose of thereby realizing pecuniary benefit or otherwise accomplishing an object.
“(ii) The doing of a single act in this Commonwealth for the purpose of thereby realizing pecuniary benefit or otherwise accomplishing an object with the intention of initiating a series of such acts.
“(iii) The shipping of merchandise directly or indirectly into or through this Commonwealth.” 42 Pa.C.S. §5322(a)(l).

In the instant case, the defendants solicited and used the services of the plaintiff, which resulted in business transactions within the Commonwealth. In accordance with the state’s long-arm statute, a nonresident may be subject to personal jurisdiction for transacting business in either a series of similar acts or a single act in this Commonwealth for the purpose of gaining a monetary benefit. 42 Pa.C.S. §5322(a)(l)(i) and (ii). The facts indicate that the defendants contacted the plaintiff on several occasions for purpose of utilizing his expertise in locating and establishing a greenhouse. This series of events led to the establishment of a tomato greenhouse in New York. The produce from this greenhouse was then distributed from an operation located in Pennsylvania, and a portion of its customer base was from Pennsylvania. Defendants did not address the applicability of the Commonwealth’s long-arm statute and instead, reserved their argument for the constitutional issues relevant to the second prong of the test. It is clear from the facts that the defendants were involved in a series of business transactions within this Commonwealth for their pecuniary benefit. Therefore, the requirements of the Commonwealth’s long-arm statute have been satisfied under sections 5322(a)(l)(i) and (ii).

Furthermore, the long-arm statute confers jurisdiction if the nonresident defendant ships merchandise directly or indirectly into or through the Commonwealth. 42 Pa.C.S. §5322(a)(1)(iii). The defendants shipped their produce exclusively through a distribution center located in Pennsylvania. Defendants were paying for the transportation costs to have the tomatoes shipped to the distribution center and then to the customers. Defendants argued that the plaintiff has not established a connection between his cause of action, the defendants, and the Pennsylvania distributor and, therefore, should not be allowed to assert personal jurisdiction over the defendants as individuals. The distributor was under contract with the plaintiff as a result of the ongoing business transactions between the plaintiff and the defendants. The distribution of the tomatoes is a result of the agreements, which are at the heart of this case. Therefore, it is clear that the defendants have shipped goods directly into and through Pennsylvania because of their business ties with the plaintiff.

Pennsylvania’s long-arm statute may be interpreted broadly and therefore, encompasses most contacts with this state. The broad interpretation of our long-arm statute is tempered by the constitutional requirements of the second prong of the test for personal jurisdiction established by our Supreme Court. The constitutional requirement is codified in section 5322(b) of Pennsylvania’s long-arm statute, 42 Pa.C.S. §5322(b). This section provides that Pennsylvania’s long-arm statute permits jurisdiction to be exercised “to the fullest extent allowed under the Constitution of the United States and may be based on the most minimum contact with the Commonwealth allowed under the Constitution of the United States.

This second prong, as set forth in Kubik, requires that in personam jurisdiction over the nonresident defendant must be tested against the due process clause of the Fourteenth Amendment to the United States Constitution. Kubik v. Letteri, 532 Pa. 10, 614 A.2d 1110 (1992) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985)). The due process clause requires that the minimum contacts with the forum must be such that the assertion of jurisdiction over the defendant does not offend traditional notions of fair play and substantial justice. International Shoe Co. v. Washington, 326 U.S. 310 (1945). The United States Supreme Court has established a two-part test in Burger King that jurisdiction must be tested against to determine if it meets the requirements of the Fourteenth Amendment. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). The first part of the test requires that the nonresident defendant must have sufficient minimum contacts with the forum state and secondly, the assertion of personal jurisdiction must comport with fair play and substantial justice. Id. The facts of each case must be weighed in determining whether jurisdiction is proper.

The court must determine that sufficient minimum contacts exist to confer personal jurisdiction over a nonresident defendant. The contacts must be based on a finding that the defendant’s conduct and his relationship with the forum state establish a sufficient basis by which he should “reasonably anticipate being haled into court there.” Kubik v. Letteri, 532 Pa. 10, 17, 614 A.2d 1110, 1114 (1992) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 105 S.Ct. 2174, 2183, 85 L.Ed.2d 528, 542 (1985)). Critical to the minimum contacts analysis is whether the defendants directed their activities towards Pennsylvania, thus invoking the “benefits and protections” of this state’s laws. Id.

The law in this state is well-settled that an individual contract with a nonresident cannot automatically establish minimum contacts sufficient to confer personal jurisdiction over the nonresident defendants. Kubik, supra. The court must look at the totality of the circumstances surrounding the contract. The court must consider prior contractual negotiations, the terms of the contract, their contemplated future consequences, and their actual course of dealing in making a decision whether the contract is a sufficient contact with the forum state to confer jurisdiction upon the nonresident defendants. Hall-Woolford, 698 A.2d at 83. The defendant’s contacts with Pennsylvania cannot be “random, fortuitous or attenuated.” Kubik, supra.

The facts in this case clearly establish that the defendants made numerous contacts with the Commonwealth. The contacts in this matter, as previously stated, establish that they were sufficient enough to establish a business relationship that was to continue into the future. Defendants argue that the contacts are attenuated and do not form a sufficient basis to exercise personal jurisdiction over this matter. The cause of action must arise from the defendants’ contacts with Pennsylvania. The question before the court is whether the defendants have sufficient minimum contacts with this state to make the imposition of jurisdiction reasonable. In the case at bar, it is clear from the facts presented that sufficient minimum contacts between the defendants and the Commonwealth exist to assert personal jurisdiction. The contacts include meetings, negotiations for services, and consulting services. The contacts were not random and fortuitous, but rather, provide an adequate basis here for jurisdiction.

In addition, the defendants assert that a business relationship between Intergrow, a New York corporation, and Canam, also known as Gourmet Gardens, cannot support an assertion of personal jurisdiction over the defendants as individuals. The defendants cite Waimberg, supra, for the premise that individuals that are “performing acts in the state in their corporate capacity are not subject to the courts of that state for those acts.” Id. Defendants’ reliance on this language is misplaced as the Intergrow Corporation is an alter ego of the individual defendants involved in this matter. Intergrow’s relationship in this matter is the result of the contacts between the parties. The agreements involved in this case were signed by the individual defendants that now constitute the shareholders of Intergrow. Furthermore, the agreements provided for the continued services, of the plaintiff. Plaintiff contracted with Canam to facilitate these agreements between the parties. Therefore, this court may confer personal jurisdiction upon Intergrow as the alter ego of the individual defendants.

The court must now determine if the assertion of personal jurisdiction will comport with fair play and substantial justice. The standard the court must follow is whether the defendants’ activities within the forum state are “such as to make it reasonable and fair to require him to conduct his defense in the state.” Burger King, supra. In making its determination whether assertion of personal jurisdiction is fair and reasonable the court must consider the following factors: “(1) the burden on the defendants, (2) the forum state’s interest in adjudicating the dispute, (3) the plaintiff’s interest in obtaining convenient and effective relief, (4) the interstate judicial system’s interest in obtaining the most effective resolution of controversies, and (5) the shared interest of the several states in furthering fundamental substantive social policies.” Burger King, 471 U.S. at 485-86.

Defendants have the burden of persuasion to show that the “assertion of jurisdiction is unconstitutional.” Daimler Chrysler Corp. v. Askinazi, 2000 U.S. Dist. Lexis 8740 (E.D. Pa. June 26, 2000).

The Commonwealth’s interest is to provide a convenient and effective means of redress for its citizens. The facts, as previously stated, clearly establish that the plaintiff has his principal residence and business in Pennsylvania. The contacts made between the plaintiff and the defendants were in the Commonwealth. Additionally, the distribution contract was established with a Pennsylvania corporation. Defendants contend that Pennsylvania has no interest in adjudicating a dispute between foreign nationals and projects in North Carolina and New York. The defendants are correct that the contacts do involve foreign nationals and projects outside this state’s boundaries; however, the contacts are a result of negotiations, agreements, and meetings with a citizen of this state. Under these facts, it is fair and reasonable for the defendants to be haled into court in this Commonwealth.

Another factor that must be considered is the burden on the defendant to defend a dispute in the forum state. Burger King, supra. The facts indicate that the defendants met with the plaintiff on several occasions in this state. The Commonwealth was convenient enough for the defendants to travel to and meet with the plaintiff. Nevertheless, the defendants contend that there is an action pending in the New York Supreme Court and that there is no reason why this dispute cannot be resolved in that court. Defendants ignore the imperative that this Commonwealth is to provide an effective means for relief for its citizens. Kubik, 532 Pa. at 21, 614 A.2d at 1116. New York is a state adjacent to this Commonwealth. In conferring jurisdiction upon the defendants this court would not be asking for anything more from the defendants than they were willing to do when they made the contacts with this state and traveled to this state in furtherance of those contacts. Therefore, defending a suit in this state would not be a burden upon the defendants.

From the facts in this case, it cannot be said that providing jurisdiction in this state would impede a shared interest of the several states in furthering substantive social policies. Nor are there any facts that indicate that this matter would not promote the interstate judicial system’s interest in obtaining the most effective resolution of controversies. The contacts between the parties were made in this state, therefore, Pennsylvania is the only state with an interest in the effective resolution of the dispute.

For the foregoing reasons, this court holds that as a result of the defendants’ contacts here, Pennsylvania’s long-arm statute does confer jurisdiction over this matter and that this jurisdiction does not offend the constitutional requirements of the Fourteenth Amendment of the U.S. Constitution. Defendants must defend this action in Pennsylvania, and thus, the preliminary objections as to jurisdiction are denied.

ORDER .

And now, April 2,2002, the preliminary objections of the defendants, Dirk Biemans, Mario Van Logten and Intergrow Inc., are hereby denied.

      . The reference to the defendants is as to the individual defendants and not the corporate defendant, Intergrow Inc.


author: WETTICK JR., J.,

text:
    Follansbee v. Gerlach

      C.P. of Allegheny County,
    no. GD00-5183.

      Alan E. Cech and Robert L. Federline, for plaintiffs.

      Nora Fisher, for defendants.

      Samuel W. Braver and Megan M. Tighe, for PNC Bank.
    June 13, 2002
   WETTICK JR., J.,

The subject of this opinion and order of court is plaintiffs’ motion to overrule objections of trustee to subpoena to produce documents. The issue that I address is whether a trustee may invoke the attorney-client privilege in order to withhold from a beneficiary communications between the trustee and counsel to the trustee regarding the management of the trust. There is not any Pennsylvania appellate court case law that has considered this issue.

Plaintiffs are beneficiaries under a trust. PNC Bank N.A., is the trustee; it is not a party to any lawsuit involving this trust. Defendants served as counsel for the trust. Plaintiffs’ complaint alleges the following: defendants also represented another beneficiary of the trust whose interests were adverse to plaintiffs’ interests; in representing the other beneficiary, defendants prepared a memorandum which interpreted the trust in a manner favorable to the other beneficiary; this interpretation was inconsistent with previous interpretations of the trust that defendants had given to the orphans’ court; thereafter, the other beneficiary filed a declaratory judgment action based on defendants’ new interpretation of the trust; defendants, without revealing their conflict of interest, induced PNC to claim the status of a “stakeholder” in the litigation; and defendants also failed to advise the orphans’ court that prior petitions filed by defendants had resulted in the entry of specific decrees interpreting the trust in a manner adverse to the beneficiary who is now its client and in a manner consistent with plaintiffs’ interests.

In this litigation, plaintiffs served a subpoena to obtain documents from PNC — a nonparty to this litigation. PNC has refused to produce certain documents on the ground that they are protected by the attorney-client privilege. These documents involve communications from Reed Smith and PNC’s legal department to PNC employees administering the trust. According to PNC, the documents contain confidential information. At the time the documents were generated, there was no pending or threatened litigation. (PNC’s brief at 3.)

PNC contends that the attorney-client privilege applies to communications between a fiduciary and its counsel. Plaintiffs contend that a trustee, by accepting a fiduciary position, may not claim the attorney-client privilege as to any beneficiary with respect to matters affecting the trust.

The case law holds that legal advice obtained by a trustee, where its interests differ from the interests of the beneficiaries, is protected by the attorney-client privilege. Most courts reach the opposite result where advice is sought in connection with the management of the trust, including disputes about trust administration. But see Wells Fargo Bank N.A. v. Superior Court (Boltwood), 990 P. 2d 591 (Cal. 2000) (interpreting a statute); Huie v. DeShazo, 922 S.W.2d 920 (Tex. 1996).

Most jurisdictions distinguish between communications about potential liability and communications about trust administration and apply the attorney-client privilege only to the former. Some jurisdictions reach this result by characterizing the beneficiaries as the true clients of the attorney. Other jurisdictions reach this result because of the obligation the law places on a trustee to furnish to the beneficiaries full and complete information regarding the trust, including opinions of counsel procured by the trustee to guide the trustee in the administration of the trast. I find the latter line of cases to be persuasive.

Section 173 of Restatement (Second) of Trusts imposes a duty to furnish information:

“Section 173. Duty to furnish information
“The trustee is under a duty to the beneficiary to give him upon his request at reasonable times complete and accurate information as to the nature and amount of the trust property, and to permit him or a person duly authorized by him to inspect the subject matter of the trust and the accounts and vouchers and other documents relating to the trust.”

According to comment b — What need not be communicated — the trustee “is privileged to refrain from communicating to the beneficiary opinions of counsel obtained by him at his own expense and for his own protection.”

See 2A Austin W. Scott and William F. Fratcher, Scott on Trusts §173, 462, 464-65 (4th ed. 1987):

“The trustee is under a duty to the beneficiaries to give them on their request at reasonable times complete and accurate information as to the administration of the trust. . . . They are entitled to examine the trust property and the accounts and vouchers and other documents relating to the trust and its administration....
“A beneficiary is entitled to inspect opinions of counsel procured by the trustee to guide him in the administration of the trust. It is held, however, that where there is a conflict of interest between the trustee and the beneficiaries and the trustee procures an opinion of counsel for his own protection, the beneficiaries are not entitled to inspect the opinion.” (footnotes omitted)

I find persuasive the concurring and dissenting opinion by Justice Mosk in Wells Fargo Bank N.A. v. Superior Court (Boltwood), supra, 990 P.2d at 600. He concluded that as to the beneficiaries, the attorney-client privilege never applies to communications between the trustee and an attorney it consulted in its fiduciary capacity on the subject of trust administration: “[Bjecause the Probate Code provides that the trustee has a duty to produce all such information, the privilege never adhered to those communications in the first place.” Id. at 602.

I also find to be persuasive the recent opinion in Lawrence v. Cohn, no. 90 Civ. 2396 (CSHMHD), 2002 WL 109530, at *3-4 (S.D.N.Y. 2002), where a magistrate judge stated:

“When a fiduciary retains an attorney to advise him in the exercise of his fiduciary responsibilities, his communications with that attorney are not absolutely protected from inquiry by the beneficiaries for whom the fiduciary performs. This principle is recognized in a variety of fiduciary contexts, although the prototype finds its source in the law of trusts.
“Under the common law, the trustee has an obligation to provide complete and accurate information to beneficiaries concerning his management of the trust. This obligation encompasses disclosure of communications with an attorney that are intended to assist in the administration of the trust.
“From this principle follows the corollary that the trustee might not invoke the attorney-client privilege against the beneficiaries to bar disclosure of communications with the attorney who is advising the trustee about the management of the trust.” (citations omitted)

See Dotson v. Lillard, Chancery no. 135209, 1994 WL 1031449, at *3 (Va. Cir. 1994), where the court recognized that while the trustee’s counsel owes no fiduciary duty to the beneficiaries, the trust owes such a duty:

“That duty includes the duty to disclose all information and documents relating to the trust and its administration. Such documents include opinions of counsel obtained by the trustee in discharging his representative duties.
“The right of the beneficiaries to the trust-related documents flows from the trustee’s fiduciary obligation to beneficiaries, not from any attorney-client relationship between the beneficiaries and the lawyer for the trustee. The advice and counsel received by the trustee in his representative capacity becomes part of the trust corpus, especially in light of the fact that the legal advice is paid for from estate funds. As the beneficiaries have access to the entire trust corpus, they have access to the advice and counsel received by the trustee.” (citations omitted)

Also see Riggs National Bank of Washington DC v. Zimmer, 355 A.2d 709, 712 (Del. Ch. 1976):

“In order for the beneficiaries to hold the trustee to the proper standards of care and honesty and procure for themselves the benefits to which they are entitled, their knowledge of the affairs and mechanics of the trust management is crucial. See Bogert on Trusts, 2d Ed., §961. And, when the beneficiaries desire to inspect opinions of counsel for which they have paid out of trust funds effectively belonging to them, the duty of the trustees to allow them to examine those opinions becomes even more compelling. The distinction has often been drawn between legal advice procured at the trustee’s own expense and for his own protection and the situation where the trust itself is assessed for obtaining opinions of counsel where interests of the beneficiaries are presently at stake.” See Restatement (Second) of Trusts, §173 comment b.

Pennsylvania case law follows section 173 of the Restatement (Second) of Trusts. In Matter of Estate of Rosenblum, 459 Pa. 201, 328 A.2d 158 (1974), the Pennsylvania Supreme Court reversed a ruling of a common pleas court allowing a beneficiary to inspect only those books, documents, correspondence, and other papers discoverable under the rules of civil procedure governing discovery. The Supreme Court ruled that where a request is made in good faith, the beneficiary is entitled to inspect “all documents in the hands of the trustee pertaining to the trust” (Id. at 216, 328 A.2d at 165) because access is governed by section 173 of the Restatement (Second) of Trusts rather than the rules of civil procedure governing discovery:

“But unlike an ordinary party to an adversary judicial proceeding, a trust beneficiary is not obliged to show that the requirements of rules 4007 and 4009 have been satisfied in order to obtain access to records in the possession of his trustee. The right of access to trust records is an essential part of a beneficiary’s right to complete information concerning the administration of the trust. This right is recognized in section 173 of the Restatement (Second) of Trusts (1959)....
“This section is declaratory of the common law of Pennsylvania. It places cestuis que trustent on a different footing from other litigants who seek discovery of documents under our Rules of Civil Procedure. A beneficiary’s right of inspection has an independent source in his property interest in the trust estate, and the right may be exercised irrespective of the pendency of an action or proceeding in court.” (footnote omitted) (citations omitted)

In summary, the trustee cannot withhold from any beneficiary documents regarding the management of the trust, including opinions of counsel procured by the trustee to guide the trustee in the administration of the trust, because trust law imposes a duty to make these documents available to the beneficiaries.

For these reasons, I enter the following order of court:

ORDER

On June 13, 2002, it is ordered that PNC Bank N.A., shall within 20 days produce the documents that it has withheld on the ground of the attorney-client privilege.


author: HERRON, J.,

text:
    Brickman Group Ltd. v. CGU Insurance Co.

      John N. Ellison, for plaintiff.

      Joseph P. Dougher, for defendants.
    March 26, 2002
   HERRON, J.,

Presently before this court is defendant CGU Insurance Co.’s motion for partial reconsideration of this court’s order of October 8, 2001, denying defendant CGU’s motion for summary judgment. Plaintiff, the Brickman Group Ltd., has filed its response in opposition to the motion for reconsideration.

For the reasons set forth in this opinion, this court is granting the motion for partial reconsideration and entering summary judgment in favor of CGU on all remaining counts of plaintiff’s amended complaint.

BACKGROUND

This dispute arises over defendant CGU’s alleged failure to abide by a purported agreement to sell a full program of various types of liability insurance to plaintiff Brickman under the same terms and conditions, including premium rates, for a six-year period between July 1, 1997, and July 1, 2003. (See second am. compl. ¶1.) According to the complaint, the purported agreement, containing both oral and written promises, which supposedly spanned six years, is referred to as the “insurance program guarantee.” Id. at ¶¶9-15.

Certain material facts are undisputed. First and foremost, the parties do not dispute that the insurance policies sold to Brickman do not contain any of the terms of the insurance program guarantee. (See def.’s mem. of law in support of def. ’ s mot. for summ. j. at 5; pi.’s mem. of law in opposition to def.’s mot. for summ. j. at ll.) It is also undisputed that the insurance policies are annual policies, each having a term of 12 months from July 1 of one year to July 1 of the next year. (See def.’s mem. of law in support of def.’s mot. for summ. j. at 6; pl.’s mem. of law in opposition to def.’s mot. for summ. j. at 12.) Further, it is undisputed that the insurance policies cover risks within the Commonwealth of Pennsylvania. (See def.’s mem. of law in support of def.’s mot. for summ. j. at 6; pl.’s mem. of law in opposition to def.’s mot. for summ. j. at 12.) These same insurance policies contain both state-mandated and customized notice provisions, relating to “non-renewal notification” and “renewal premium quotation commitment.” (See def.’s mem. of law in support of def.’s mot. for summ. j. at 6-8; pl.’s mem. of law in opposition to def.’s mot. for summ. j. at 13-15.)

In addition, Brickman did not pay additional monies for the purported insurance program guarantee, beyond the premiums paid for the insurance policies. (See def.’s mem. of law in support of def.’s mot. for summ. j. at 11; pl.’s mem. of law in opposition to def.’s mot. for summ. j. at 21.) Rather, Brickman relied upon the insurance program guarantee in moving its business from Royal Insurance Company to CGU in 1997. (See def.’s mem. of law in support of def.’s mot. for summ. j. at 12; pl.’s mem. of law in opposition to def.’s mot. for summ. j. at 22.) And in the years that followed, Brickman remained with CGU instead of moving its insurance business in reliance on the insurance program guarantee. (See def.’s mem. of law in support of def.’s mot. for summ. j. at 12; pl.’s mem. of law in opposition to def.’s mot. for summ. j. at 22-23.)

Even if other facts are in dispute, the above-stated undisputed facts are fatal to plaintiff’s breach of contract claims since those claims are singularly based on the insurance program guarantee.

DISCUSSION

In its motion for partial reconsideration, defendants focus on the narrow issue of whether the insurance program guarantee, upon which plaintiff bases its breach of contract claim(s), is unenforceable and illegal under Pennsylvania law because it violates 40 P.S. §275 and 40 P.S. §471 since this purported agreement is not specified in the insurance policies themselves. Plaintiff, in turn, argues that the insurance program guarantee cannot be considered a “rebate” or “inducement” as those terms are used in either section of title 40. Further, plaintiff argues that CGU’s motion is untimely, having been filed approximately five months after this court’s order, dated October 8, 2001.

Generally, “[mjotions for reconsideration are discouraged unless the facts or law not previously brought to the attention of the court are raised.” S.A. Arbittier et al., Philadelphia Court of Common Pleas Civil Practice Manual, §7-2.8 (10th ed. 2000). A court has inherent power to reconsider its own rulings. Moore v. Moore, 535 Pa. 18, 25, 634 A.2d 163, 167 (1993); Hutchison v. Luddy, 417 Pa. Super. 93, 108, 611 A.2d 1280, 1288 (1992). See 42 Pa.C.S. §5505 (trial court may reconsider its own order within 30 days of entering the order). “The statute limiting the time for reconsideration of orders to 30 days applies only to final, appealable orders.” Hutchison, 417 Pa. Super. at 108, 611 A.2d at 1288. “Where an order does not effectively place the litigant out of court or end the lawsuit, it is within the trial court’s discretion to entertain a motion to reconsider the interlocutory order outside the 30-day time limit set forth in 42 Pa.C.S. §5505.” Id. See also, Key Automotive Equipment Specialists Inc. v. Abernethy, 431 Pa. Super. 358, 362, 636 A.2d 1126, 1128 (1994) (holding that trial court properly exercised its discretion to sua sponte reconsider its order, denying preliminary objections, beyond the 30-day time limit as the order was interlocutory).

Under the Pennsylvania Rules of Civil Procedure, the court must grant summary judgment if (1) there is no genuine issue of any material fact as to a necessary element of the cause of action or defense that could be established by additional discovery or expert report, or (2) after the completion of discovery, a party bearing the burden of proof on an issue has failed to produce evidence of facts essential to the cause of action or defense such that a jury could return a verdict in his favor. Pa.R.C.P. 1035.2. The moving party has the “burden to prove that there is no genuine issue of material fact.” Hagans v. Constitution State Service Co., 455 Pa. Super. 231, 254, 687 A.2d 1145, 1156 (1997). Once the moving party meets this burden, the non-moving party “must set forth specific facts showing that there is a genuine issue for trial.” Id. at 254, 687 A.2d at 1156. The trial court’s function is to “determine whether there are controverted issues of fact, not whether there is sufficient evidence to prove the particular facts.” Id. at 254, 687 A.2d at 1157. A motion for summary judgment “must be viewed in the light most favorable to the non-moving party, and all doubts as the existence of a genuine issue of material fact must be resolved against the moving party.” Pennsylvania State University v. County of Centre, 532 Pa. 142, 145, 615 A.2d 303, 304 (1992). “Only where there is no genuine issue as to any material fact and it is clear that the moving party is entitled to a judgment as a matter of law will summary judgment be entered.” Skipworth v. Lead Industries Association Inc., 547 Pa. 224, 230, 690 A.2d 169, 171 (1997).

Under Pennsylvania law, insurance agents and insurance companies are prohibited from offering or granting premium rebates, special advantages or other inducements to a prospective client to secure an insurance contract where such offers are not incorporated within the policies. See 40 P.S. §275; 40 P.S. §471. Section 275 reads in pertinent part:

“No insurance agent, solicitor or broker, personally or by any other party, shall offer, promise, allow, give, set off, or pay, directly or indirectly, any rebate of, or part of, the premium payable on the policy ... or other benefit founded, arising, accruing or to accrue thereon or therefrom, or any special advantage in date of policy or age of issue, or any paid employment or contract for services of any kind, or any other valuable consideration or inducement, to or for insurance on any risk in this Commonwealth, now or hereafter to be written, which is not specified in the policy contract of insurance; nor shall any such agent, solicitor, or broker, personally or otherwise, offer, promise, give, option, sell or purchase any stocks, bonds, securities, or property or any dividends or profits accruing or to accrue thereon, or other thing of value whatsoever, as inducement to insurance or in connection therewith. . . .” 40 P.S. §275. (emphasis added) Section 471, which applies to insurance companies, associations or exchanges, including its officers or members, contains a parallel provision that similarly prohibits insurance companies from offering any special advantage or inducement which is not specified in the insurance policy. 40 P.S. §471.
“The object of this legislation is to outlaw unfair treatment of prospective insurance clients of the same class.” Blouch v. Clifford R. Zinn & Son Inc., 350 Pa. Super. 327, 331, 504 A.2d 862, 864 (1986) (citing McDowell v. Good Chevrolet-Cadillac, 397 Pa. 237, 242, 154 A.2d 497, 500 (1959)). As stated by the Pennsylvania Supreme Court:
“The thrust of the anti-rebate provisions of the statute is against the placement of insurance whereby the insured secures the insurance at a favored rate, regardless of the mode of the manner in which such favored rate is obtained. The court below well stated that ‘as is universally stated and recognized, a reduction of cost is the test of whether or not the statute is being violated’ . . . .” McDowell, 397 Pa. at 242-43, 154 A.2d at 500. See also, 5 Couch on Insurance §69.33 (3d ed. 1996) (“The purpose of statutes prohibiting discrimination and of anti-rebate statutes is to protect the solvency of the insurance companies, prevent unfair discrimination among insureds of the same class, protect the quality of service, avoid concentration of the market in a few insurance companies, and avoid unethical sales practices.”).

Defendant relies upon American Association of Meat Processors v. Casualty Reciprocal Exchange, 527 Pa. 59, 588 A.2d 491 (1991). In that case, the defendant insurer paid a rebate to the plaintiff association based on a percentage of the premiums paid to the insurer under the workers’ compensation insurance program. Id. at 62, 588 A.2d at 493. The payments were made to the association under assignments made by the association’s insured members. Id. In the final year, the defendant insurer failed to pay a dividend or rebate to the association and the association brought a breach of contract action against the insurer. Id. The rebate arrangement was pursuant to an oral agreement which was not set forth in the policy. Id. at 63, 588 A.2d at 493. Both the trial court and the Superior Court upheld the judgment in favor of the association. Id. at 63, 588 A.2d at 493. The Pennsylvania Supreme Court reversed based on 40 P.S. §275, determining that the statute did apply and that the defendant insurer did not waive the illegality of the contract by failing to raise the issue until post-trial motions. Id. at 67-68, 588 A.2d at 495-96. As stated by the court, “whenever it appears that the enforcement of a contract would violate public policy, the court should dismiss the proceedings of its own motion.” Id. at 68, 588 A.2d at 496. (emphasis in original)

Plaintiff, in turn, relies upon Commonwealth v. Fuhrer, 52 D.&C.2d 142 (Dauphin Cty. 1970), aff’d, 218 Pa. Super. 867, 279 A.2d 233 (1971), which involved an appeal of an adjudication of the Pennsylvania Insurance Commissioner which suspended the insurance agent’s license and imposed a fine upon him, based on the determination that he violated section 275 in offering an inducement to obtain insurance business. 52 D.&C.2d at 142-43. The agent, acting on behalf of an insurance company had an arrangement with a bank, pursuant to which the bank would collect premiums for credit life insurance for the bank’s consumer loan customers. Id. at 142. The bank would thereby retain the monies in an account which maintained a minimum balance and would afford the accrual of interest. Id. The court found that there was no evidence that the agent made representations to prospective insureds or customers of the bank, but that the insurance rate that would be charged would be as prescribed by the Insurance Department without exception or qualification. Id. at 145. The court also found no evidence that the agent made any offer or inducement to make it possible for insureds to obtain insurance from his company at favored rates. Id. It, therefore, held that the agent did not violate the relevant sections of the Insurance Department Act. Id. at 146.

Here, it is undisputed that the insurance program guarantee was not incorporated in the insurance policies sold to Brickman. Further, Brickman concedes that it relied on the insurance program guarantee in moving its business from Royal to CGU and in remaining with CGU. (See second am. compl. ¶¶15-16, 22-23, 25.) Plaintiff, indeed, contends that the insurance program guarantee is a separate and distinct contract from the insurance policies. (See pl.’s mem. of law in opposition to def.’s mot. for summ. j. at 11.) This very argument proves fatal to plaintiff’s breach of contract claims.

“As a general rule, an agreement which violates a statutory provision, ‘or which cannot be effectively performed without violating [a] statute, is illegal, unenforceable and void ab initio.’ ” Watrel v. Commonwealth, Department of Education, 88 Pa. Commw. 1, 5, 488 A.2d 378, 381 (1985), aff’d, 513 Pa. 61, 518 A.2d 1158 (1986). See also, Bollinger Co. v. Widmann Brewing Corp., 339 Pa. 289, 293, 14 A.2d 81, 83 (1940) (“courts will not lend their aid to the enforcement of unlawful contracts which are founded upon transactions in violation of a public policy declared by the legislature.”).

Thus, here, similar to American Ass’n of Meat Processors, the insurance program guarantee was not incorporated or endorsed within the insurance policies. Further, it seems clear that the insurance program guarantee was an “inducement” or special advantage to purchase insurance. As such, it may be deemed illegal under either 40 PS. §275 or 40 P.S. §471. While this court does not condone the making of illegal contracts by insurers to avoid liability to their insureds, this court cannot enforce the insurance program guarantee and must grant summary judgment in favor of CGU on the breach of contract claims, which are the only remaining claims in the second amended complaint.

CONCLUSION

For the reasons set forth above, this court is entering a contemporaneous order, granting the motion for partial reconsideration and granting summary judgment in favor of CGU on the breach of contract claims.

ORDER

And now, March 26, 2002, upon consideration of defendant CGU Insurance Co.’s motion for partial reconsideration of the order, dated October 8, 2001, denying defendant’s motion for summary judgment, plaintiff’s response in opposition thereto, all other matters of record and in accord with the opinion being filed contemporaneously with this order, it is hereby ordered that the motion for partial reconsideration is granted and summary judgment is entered in favor of CGU Insurance Company and against The Brickman Group Ltd. on the remaining counts of the second amended complaint, sounding in breach of contract.

      . On August 30,2001, plaintiff filed a second amended complaint which amplified its factual averments to its breach of contract claims in Counts I and II, following this court’s order and opinion, dated August 3, 2001, granting leave in part to file the amended complaint. The second amended complaint is to be treated as the only complaint before this court as it supersedes all previously filed complaints. See Vetenshtein v. City of Philadelphia, 755 A.2d 62, 67 (Pa. Commw. 2000) (an amended complaint virtually withdraws the original complaint and takes its place), (citations omitted)

      . Plaintiff does not dispute this fact but maintains that the insurance program guarantee is a distinct and separate contract, apart from the insurance policies, and that Pennsylvania law and the practice in the trade do not require rate guarantees to be attached as an endorsement to insurance policies. (See pl.’s mem. of law in opposition to def.’s mot. for summ. j. at 11.) For the reasons set forth in the “discussion” section of this opinion, this court disagrees with this contention.

      . The Insurance Department Act of 1921, May 17, P.L. 789, art. VI, §635.

      . The Insurance Company Law of 1921, May 17, P.L. 682, art. HI, §346.

      . Here, defendants’ motion for reconsideration is of an order which is interlocutory in nature, and, thus, the 30-day time limit does not apply though the motion was filed within that time limit.