author: GAVIN, J.,

text:
    Wolfe v. Glenn

      C.P. of Chester County,
    no. 95-06483.

      Dennis B. Young, for plaintiff Wolfe.

      Richard A. Sprague and Geoffrey Johnson, for plaintiff Norton.

      Thomas R Moribondo, for plaintiff Marlowe.

      Andrew J. Bellwoar, for defendant Glenn.

      Gerald A. Hughes and Samuel E. Klein, for defendants Troy Publishing, Kennedy and Caufield.
    January 19, 2001
   GAVIN, J.,

This is an action for defamation. Presently before the court are the post-trial motions of plaintiffs Alan M. Wolfe and James B. Norton III, as well as the post-trial motion of defendant William T. Glenn Sr. For the reasons that follow, I will deny the motions of Wolfe, Norton and Glenn.

BACKGROUND

The genesis of this lawsuit is an article that appeared in the newspaper the Chester County Daily Local on April 20,1995. The article, headlined “Slurs, insults drag town into controversy” involved the fallout from a special meeting of the Parkesburg Borough Council which had been held the previous evening. On that date, council president, plaintiff James Norton, sought to “end the fighting and name calling” which had been occurring at council meetings. The article published comments made by defendant Glenn, then also a member of council, about Norton, Parkesburg Mayor Alan M. Wolfe, and Borough Solicitor James J. Marlowe. In the article, defendant Glenn characterized Wolfe and Norton as “queers” and “child molesters” and quoted him as calling plaintiff Marlowe a “shyster Jew.” The article was written by defendant Tom Kennedy, then an employee of the Daily Local, which is owned by defendant William Caufield and published by defendant Troy Publishing. Plaintiffs subsequently filed suit for defamation and false light invasion of privacy.

Prior to trial, all defendants filed motions for summary judgment. By order dated August 2, 1999, the Honorable Paula Francisco Ott granted defendant Glenn’s motion for summary judgment as to plaintiff Marlowe, and denied the motion as to plaintiffs Norton and Wolfe. Judge Ott also denied the motion for summary judgment filed by Troy Publishing Company, Tom Kennedy and William Caufield, but ordered that the jury at the trial of this matter “be instructed on the fair report privilege.”

Trial began before a jury on March 27, 2000. On March 31, 2000, the jury returned a verdict in favor of plaintiff Norton and against defendant Glenn and awarded $10,000 compensatory and $7,500 punitive damages. The jury returned the identical verdict as to plaintiff Wolfe. Defendants Troy Publishing Company, Tom Kennedy and William Caufield (the media defendants) were found not liable to plaintiffs. James Norton and Alan Wolfe have now filed post-trial motions requesting a new trial as to the media defendants. Defendant Glenn has also filed post-trial motions requesting a judgment n.o.v. or a new trial.

DISCUSSION

A judge considering a party’s post-trial motions can order a new trial if he concludes that a factual or legal mistake was made at the trial level and, under the circumstances of the particular case, the mistake formed a sufficient basis to order a new trial. Riccio v. American Republic Insurance Co., 550 Pa. 254, 262, 705 A.2d 422, 425 (1997). Plaintiff Norton has raised 22 matters in his post-trial motion which he claims entitle him to a new trial. Plaintiff Wolfe has raised 18. The matters raised involve only three main issues, however, and will be discussed as such. Norton and Wolfe first argue that the court erred in adopting the neutral reportage privilege.

Under the neutral reportage doctrine, a reporter is privileged to publish the serious charges of a public official involved in an ongoing controversy and concerning other public officials irrespective of the publisher’s belief as to the falsity of the charges, provided that the reporter does not espouse or concur in the charges and in good faith believes that the report accurately conveys the charges made. DiSalle v. P.G. Publishing Company, 375 Pa. Super. 510, 544, 544 A.2d 1345, 1363 (1988). The DiSalle court explained two reasons for the necessity of such a broad privilege at 375 Pa. Super. at 544, 544 A.2d at 1363:

“If the party making the false charge is a public official, it is essential for the public to be informed of the calumny of those upon whom it has bestowed its trust, and thereby to better supervise their conduct. Similarly, if a public figure, embroiled in a controversy, levels false accusations against others involved in the same contest, the public’s ability to weigh the merits of the vying positions is greatly enhanced by the publication of the charges.”

On August 2, 1999, Judge Ott held that the neutral reportage privilege applied to this case, and that any jury hearing the matter was to be instructed on the privilege. Judge Ott determined that the facts of this case “fit squarely” within the privilege as described in DiSalle, and specifically noted that, “the facts of this case cry out to allow the opportunity for the press to repeat what a defaming public official says about his fellow public officials, all of whom are eventual candidates for reelection.” Memorandum opinion at 10.1 have attached a copy of Judge Ott’s opinion as exhibit “A.” Judge Ott’s holding is determinative of the plaintiffs’ first set of claims because of the application of the coordinate jurisdiction rule.

The coordinate jurisdiction rule has long been recognized by the Pennsylvania Supreme Court. Riccio v. American Republic Insurance Co., 550 Pa. at 260, 705 A.2d at 425. Under this rule, judges of coordinate jurisdiction sitting in the same case should not overrule each other’s decisions. Id. Thé coordinate jurisdiction rule falls within the law of the' case doctrine, which serves not only to promote the goal of judicial economy, but also operates: “(1) to protect the settled expectations of the parties; (2) to insure uniformity of decisions; (3) to maintain consistency during the course of a single case; (4) to effectuate the proper and streamlined administration of justice; and (5) to bring litigation to an end.” Commonwealth v. Starr, 541 Pa. 564, 574, 664 A.2d 1326, 1331 (1995).

A court may depart from these rules only in “exceptional circumstances” such as where there has been an intervening change in the law, a substantial change in the facts or evidence, or where the prior holding was clearly erroneous and would create a manifest injustice if followed. Id. at 575-76, 664 A.2d at 1332. Since none of these exceptions applies to this case, Judge Ott’s holding that the neutral reportage privilege applied is the law of the case, and the plaintiffs are not entitled to post-trial relief on their claims that the court erred in adopting the neutral reportage privilege.

Plaintiffs’ next group of claims involves the application of the neutral reportage privilege to the facts of this case. In this claim of error, plaintiffs object to various of this court’s evidentiary rulings, the limitations placed on their arguments to the jury, and to this court’s charge to the jury. Plaintiffs argue that I improperly precluded them from presenting evidence showing abuse of the neutral reportage privilege, including evidence that defendant Glenn was not a responsible source and evidence of the course of conduct between Glenn and defendant Kennedy prior to April 19, 1995. Plaintiffs also argue that I erred in not charging the jury that the privilege does not apply to investigative reporting. I disagree, as such evidence would have been irrelevant.

In DiSalle, 375 Pa. Super. at 541, 544 A.2d at 1361, Judge Chillo made it crystal clear that, with neutral reportage, “the subjective awareness of the republisher that the statement is false becomes irrelevant.” In fact, “because neutral reportage intends to protect the publication of statements known to be false, the purported reliability of the source is totally irrelevant.” Id. at 542, 544 A.2d at 1362. (emphasis added) Judge Chillo also described exactly how the neutral reportage privilege can be lost: “The privilege ... will be preserved only if the reporter neither espouses nor concurs in the charge and in good faith believes the report accurately conveys the charges made.” Id. at 544-45, 544 A.2d at 1363.

The evidence proffered by the plaintiffs was refused because none of it concerned the only relevant inquiry, whether defendant Kennedy espoused or concurred in Glenn’s charges and whether he in good faith believed that the report accurately conveyed the charges made. See N.T. 3/28/00 pp. 168, 173-74, 180-83, 299, 302, 303, 312, 343. The admission or exclusion of evidence is within the discretion of the trial court, and for evidence to be admissible it must be both competent and relevant. Ratti v. Wheeling Pittsburgh Steel Corp., 758 A.2d 695, 707 (Pa. Super. 2000). Evidence is relevant if it tends to prove or disprove a material fact. Id. at 708. Since none of the evidence offered met this test, it was not error to preclude its introduction, the plaintiffs’ arguments to the jury on the refused evidence, and my refusal to charge to the jury on issues raised by the precluded evidence. Accordingly, plaintiffs are not entitled to relief on this claim of error.

Plaintiffs’ third claim of error involves the issue of “actual malice.” The United States Supreme Court, in New York Times v. Sullivan, 376 U.S. 254 (1964), held that if the plaintiff is a public figure, he or she must show that a defendant acted with “actual malice” in publishing the defamatory matter. Actual malice means that the defendant acted with knowledge that the statement was false, or with reckless disregard of whether it was false or not. Id. at 280.

In the instant matter, the jury found that the media defendants had not published the offending article with actual malice. However, plaintiffs argue that they were precluded from hearing all of the evidence on this issue, and are, therefore, entitled to a new trial.

In her opinion deciding the defendants’ motions for summary judgment, Judge Ott recognized that holding that the neutral reportage privilege applied to this case eliminated the necessity of a determination of actual malice as to the media defendants. This is so because the privilege anticipates a broader protection to the media than that provided by the “actual malice” standard, and that the “press may [not] be required under the First Amendment to suppress newsworthy statements merely because it has serious doubts regarding' their truth.” DiSalle at 539, 544 A.2d at 1360, quoting Edwards v. National Audubon Society, 556 F.2d 113, 120 (2d Cir. 1977).

The plaintiffs claim that I erred in excluding evidence concerning whether the media defendants acted with actual malice in publishing the article of April 20,1995. Plaintiffs are correct that I did not permit certain of their evidence regarding this issue at trial. I so ruled because the neutral reportage privilege does offer broader protection than the actual malice standard, and under the neutral reportage privilege the evidence offered was irrelevant. However, should an appellate court determine that the neutral reportage privilege does not apply to this case, plaintiffs would be entitled to a new trial due to my exclusion of their evidence on the issue of actual malice.

Finally, I address defendant Glenn’s post-trial motion. In it he claims that he is entitled to judgment n.o.v. because he is a high public official with absolute immunity from suit for the statements he made.

The standard of review when determining whether to enter a judgment n.o.v. is clear, “judgment n.o.v. will be entered only in a clear case where the facts are such that no two reasonable minds could fail to agree that the verdict was improper.” Ferry v. Fisher, 709 A.2d 399, 402 (Pa. Super. 1998).

“There are two bases upon which a judgment n.o.v. can be entered: one, the movant is entitled to judgment as a matter of law and/or two, the evidence is such that no two reasonable minds could disagree that the outcome should have been rendered in favor of the movant. With the first, the court reviews the record and concludes that even with all factual inferences decided adverse to the movant the law nonetheless requires a verdict in his favor, whereas with the second the court reviews the evidentiary record and concludes that the evidence was such that a verdict for the movant was beyond peradventure.” Campo v. St. Luke’s Hospital, 755 A.2d 20, 23 (Pa. Super. 2000) (quoting Moure v. Raeuchle, 529 Pa. 394, 402-403, 604 A.2d 1003, 1007 (1992)). Defendant argues that the court erred in not granting judgment as a matter of law in his favor on the basis of high public official immunity.

The Pennsylvania Supreme Court explained the doctrine of absolute privilege for high public officials in Matson v. Margiotti, 371 Pa. 188, 194, 88 A.2d 892, 895 (1952). The privilege:

“Exempts a high public official from all civil suits for damages arising out of false defamatory statements and even from statements or actions motivated by malice, provided the statements are made or the actions are taken in the course of the official’s duties or powers and within the scope of his authority, or as is sometimes expressed, within his jurisdiction.” (emphasis in original)

Defendant claims that since his statements were made within the course and scope of his official duties, the statements are protected by this immunity. He argues that the statements occurred in the context of “bitter political infighting” and that he was attempting to inform the public of what he perceived to be a conspiracy against him and misconduct on the part of the plaintiffs involving matters of public concern.

Judge Ott, relying on the case of Suppan v. Kratzer, 660 A.2d 226 (Pa. Commw. 1995), found that defendant Glenn was, in fact, a high public official. However, she found that the privilege did not apply because he was not acting within the scope of his office when he commented on the alleged sexual activities of the plaintiffs. In Mosley v. Observer Publishing Company, 422 Pa. Super. 255, 261, 619 A.2d 343, 346 (1993), the Superior Court stated that, given the great potential for harm, the privilege must be limited to those statements which are “closely related” to the performance of the defendant’s official duties. No testimony offered at the trial of this matter leads me to disagree with Judge Ott’s determination of this issue and find that defendant’s comments were so closely related to his official duties as to immunize him from suit. Accordingly, defendant Glenn is not entitled to post-trial relief.

ORDER

And now, January 19, 2001, the motions for post-trial relief of plaintiff Alan M. Wolfe, plaintiff James B. Norton, and defendant William T. Glenn Sr. are denied.

      . This issue is raised in paragraphs 1, 2, 3, 4 and 5 of plaintiff Norton’s motion and paragraphs 1, 2, 9 and 10 of plaintiff Wolfe’s motion for post-trial relief.

      . This issue is raised in paragraphs 8-19 of plaintiff Norton’s motion and paragraphs 3-7 and 11-16 of plaintiff Wolfe’s motion for post-trial relief.

      . This issue is raised in paragraphs 6, 7, 10 and 20-22 of plaintiff Norton’s motion and paragraphs 8, 11-12, 14 and 17-18 of plaintiff Wolfe’s motion for post-trial relief.


source: Caselaw Access Project

author: SHEPPARD JR.,

license: Public Domain

text:
    DeLage Linden Financial Services Inc. v. Raynes, McCarty, Binder, Ross & Mundy

      Robert R Meingossner, for plaintiff DeLage.

      David F. Binder, for defendants Raynes, McCarty, Binder, Ross & Mundy.

      Robert A. Nicholas, for defendant IKON.

      John Chesney, for additional defendant Sharp.
    May 10, 2001
   SHEPPARD JR.,

This opinion is submitted in support of this court’s order dated January 11,2001, denying additional defendant, Sharp Electronics Corporation’s petition to compel arbitration, dismiss or stay litigation. For the reasons set forth, that order should be affirmed.

BACKGROUND

On January 28, 2000, DeLage Linden Financial Services Inc. (DLL) sued the law firm of Raynes, McCarty, Binder, Ross and Mundy for damages arising from that firm’s default on a copier lease. Although admitting nonpayment, Raynes claimed that the copier failed to function properly and failed to perform as represented by the entity that had leased the copier to the firm, Select Office Solutions Inc. On April 17, 2000, Raynes joined IKON Office Solutions Inc. as a third-party defendant.

On August 23, 2000, the parties filed a stipulation permitting IKON to initiate a third-party complaint against additional defendant Sharp, the manufacturer of the copier. In its third-party complaint, IKON asserted that Sharp, as the manufacturer, should be held liable if it is determined that the copier was not of high quality and/or was not merchantable. IKON asserted that it had simply reiterated Sharp’s representations concerning the copier.

Sharp did not file preliminary objections to the joinder complaint. Instead, it filed an answer and new matter on September 29, 2000. In its answer and new matter, Sharp did not raise the affirmative defense of the existence of an arbitration clause. However, upon receiving IKON’s answers to Sharp’s discovery requests and being served with IKON’s discovery requests, approximately two and a half months later, Sharp filed the petition at issue here.

The petition to compel arbitration is based upon the arbitration clause set forth in the dealership agreement between Sharp and IKON.

DISCUSSION

On appeal, Sharp contends that: (1) it was improperly joined as a third-party defendant, and (2) the mandatory arbitration provision in the agreement should control its rights as to IKON in the present action. These contentions are without merit.

First, Sharp was properly joined as a third-party defendant and, further, failed to raise an objection to that joinder by preliminary objections. Second, Sharp’s failure to raise the mandatory arbitration provision in its answer and new matter constituted a waiver of this defense. Third, judicial economy and fundamental fairness mandate that all the claims be tried in one action.

A. Sharp Was Properly Joined

Sharp argues that it was improperly joined since IKON failed to obtain court approval to serve Sharp with the third-party complaint after the permissible 60-day time period for joinder had expired. See Pa.R.C.P. 2253. However, Sharp never objected to the joinder. Instead it filed an answer and commenced discovery. Some two and one-half months later Sharp filed the petition at issue. Importantly, Sharp failed to demonstrate any prejudice arising from the joinder. The alleged defect is minor and in the interest of justice may be disregarded by this court. See Pa.R.C.P. 126; Vaughan v. Womeldorf, 366 Pa. 262, 266, 77 A.2d 424, 427 (1951) (“[o]ne purpose of third-party procedure is to avoid [a] multiplicity of suits by adjucating in one suit the rights and liabilities of all parties to a single transaction which constitutes the cause of action and applicable rules should, if possible, be construed to accomplish this purpose.”). Indeed, this court may, in its proper discretion, order joinder at any stage in the proceeding. See Pa.R.C.P. 2253(c).

Rule 126 provides that “[t]he rules shall be liberally construed to secure the just, speedy and inexpensive determination of every action. . . . The court at every stage of any such action or proceeding may disregard any error or defect of procedure which does not affect the substantial rights of the parties.” Pa.R.C.P. 126. See Martinelli v. Mulloy, 223 Pa. Super. 130, 134-35, 299 A.2d 19, 21 (1972) (Rule 126 is particularly applicable to controversies involving third-party procedure and procedural rules are to be construed to accomplish the purpose of avoiding multiplicity of suits); Stern v. Jim Bulow Motors, 40 D.&C.3d 563, 571 (Somerset Cty. 1984) (denying objections to petition for late joinder even though joinder was sought 25 months after the original complaint and without any explanation for delay, stating “[t]he 60-day rule should not be viewed in terms of litigant rights; such rights are merely incidental to the larger public policy objectives of the rules”).

The joinder of Sharp works no prejudice against Sharp or the other parties to the action (all of whom signed a stipulation). Thus, the third-party complaint should be deemed appropriate.

B. Sharp Waived Any Alleged Right to Arbitrate

Sharp asserts that IKON’s claims are subject to mandatory arbitration under the agreement. However, Sharp failed to raise the mandatory arbitration clause as a defense in its answer and new matter. Instead, Sharp chose to engage in discovery and participate in the judicial process. This court submits that, in doing so, Sharp waived any right it had to arbitrate the claims between itself and IKON in this action.

Pa.R.C.R 1030 provides in relevant part that, “[a]ll affirmative defenses including... arbitration and award, . . . shall be pleaded in a responsive pleading under the heading ‘new matter’ ...Pa.R.C.P. 1030. Furthermore, Rule 1032 instructs that “[a] party waives all defenses and objections which are not presented either by preliminary objection, answer or reply . . . .” Pa.R.C.P. 1032. In Samuel J. Marranea General Contracting Co. v. American Cherry Hill Associates Ltd. Partnership, 416 Pa. Super. 45, 610 A.2d 499 (1992), our Superior Court held that the defendant waived any right it had to mandatory arbitration when it failed to raise the issue in its answer and new matter. That court, relying on Rules 1030 and 1032, confirmed that the defense of arbitration is an affirmative defense and, as such, must be pleaded in new matter or it is waived. 416 Pa. Super. at 49-50, 610 A.2d at 501. The court further noted that the defendant: “[h]ad every opportunity to raise and pursue the issue of arbitration but failed to do so. [Defendant] cannot avail itself of the judicial process and then pursue an alternate route when it receives an adverse judgement. To allow litigants to pursue that course and thereby avoid the waiver doctrine and our rules of court is to advocate judicial inefficiency; this we are unwilling to do.” Id. at 50-51, 610 A.2d at 501-502.

It is noteworthy that that defendant filed its arbitration demand two weeks after it had filed its answer. See also, Goral v. Fox Ridge Inc., 453 Pa. Super. 316, 323, 683 A.2d 931, 934 (1996) (denying motion to compel arbitration even though the defense was raised in new matter because of waiver doctrine, stating that “had [the party] truly wanted to invoke the arbitration process to preclude litigation, they could have done so by means of preliminary objections” and not awaited discovery); St. Clair Area School District Board of Education v. E.I. Associates, 733 A.2d 677, 682 n.6 (Pa. Commw. 1999) (denying motion to compel arbitration where the issue was never raised by prehminary objections and defendant’s petition was filed only a few weeks before trial, thus estabhshing that defendant “through its conduct, accepted the judicial process and waived the right to arbitrate this case.”).

Here, Sharp never raised the arbitration defense by way of preliminary objections or in answer and new matter. Further, Sharp served discovery upon IKON, which IKON responded to. It was only when IKON served discovery on Sharp that Sharp first objected to this court’s jurisdiction, citing the arbitration provision. This court submits that Sharp has, by its conduct, waived the right to mandatory arbitration.

Finally, Sharp’s petition should be denied on the grounds of judicial economy and fairness to the other litigants. If Sharp’s petition were granted, IKON would be forced to litigate the same issues twice. The fair approach here is to have the litigation go forward and have the trier of fact determine all the parties’ rights and/or obligations in one trial.

CONCLUSION

For the reasons stated, this court respectfully submits that the order denying additional defendant Sharp’s petition to compel arbitration, dismiss or stay litigation should be affirmed.

      . IKON had subsequently purchased Select Office Systems Inc., the company which originally leased the copier to Raynes.

      . The denial of a petition to compel arbitration is immediately appealable pursuant to Pa.R.A.P. 311(a)(8). Further, Pennsylvania case law holds that an order denying a petition to compel arbitration, although interlocutory, may be appealed as of right. St. Clair Area School District Board of Education v. E.I. Associates, 733 A.2d 677, 680 n.4 (Pa. Commw. 1999); Goral v. Fox Ridge Inc., 453 Pa. Super. 316, 320 n.1, 683 A.2d 931, 933 n.1 (1996).


author: LOUGHRAN, P.J.,

text:
    Hough v. State Farm Insurance Co.

      C.P. of Westmoreland County,
    no, 2615 of 2000.

      John W. Pollins III, for plaintiffs.

      Richard F. Boyle Jr., for defendant.
    March 1, 2001
   LOUGHRAN, P.J.,

The above captioned matter arises out of a motor vehicle/pedestrian accident which occurred on or about September 27, 1995, on State Route 981, in East Huntingdon Township, Westmoreland County, Pennsylvania. On September 27, 1995, while the petitioner, Jack Hough, was walking along the berm of State Route 981, he was struck by a vehicle operated by Kelly Stewart. At the time of said motor vehicle accident, Kelly Stewart was insured by the Erie Insurance Group and she maintained liability insurance with policy limits of $50,000. The petitioner, Jack Hough, made a claim against Kelly Stewart regarding the aforesaid motor vehicle accident. On or about January 23, 1998, said claim was settled for the amount of the liability policy limits maintained through Erie Insurance, $50,000. State Farm consented to the aforesaid settlement and waived its subrogation rights.

At the time of the subject motor vehicle accident, the petitioner, Jack Hough, maintained automobile insurance through State Farm. Jack Hough was the named insured on said policy and the policy provided underinsured motorist coverage in the amount of $100,000. Jack Hough’s spouse, Joanne Hough, was the named insured on a separate policy of automobile insurance issued by State Farm. At the time of said motor vehicle accident, the State Farm policy issued to Joanne Hough provided underinsured motorist coverage in the amount of $15,000.

The petitioner, Jack Hough, made a claim to underinsured motorist benefits under both of the aforesaid State Farm policies.

On or about May 1,1998, State Farm paid Jack Hough and Joanne Hough the sum of $100,000 pursuant to the policy issued to Jack Hough. Jack Hough and Joanne Hough executed a release providing for the release of all claims regarding this policy. The petitioners, Jack Hough and Joanne Hough, then filed an underinsured motorist claim under the policy issued by State Farm to Joanne Hough, asserting that said policy provided underinsured motorist coverage in the amount of $100,000.

A dispute arose between the petitioners, Jack Hough and Joanne Hough, and the respondent, State Farm, as to amount of underinsured motorist coverage which was available under the policy issued by State Farm to Joanne Hough. State Farm contended that the amount of under-insured motorist coverage available pursuant to said policy was $15,000. The petitioners, Jack Hough and Joanne Hough, contended that the amount of coverage available pursuant to said policy was $100,000. This dispute was presented to a board of arbitrators for adjudication in accordance with the arbitration provisions of the subject policy of insurance.

The coverage issue was submitted to an arbitration panel consisting of Rabe Marsh, Esquire, chairman, Leonard Reeves, Esquire, and Jon Lewis, Esquire, pursuant to a motion for summary judgment filed by State Farm and a cross-motion for summary judgment filed by the petitioners, Jack Hough and Joanne Hough. Multiple briefs were filed with the arbitration panel and extensive oral argument took place. On or about April 13, 2000, the arbitrators entered an award determining that the amount of underinsured motorist coverage available under the subject policy of insurance was $15,000/ $30,000.

On or about April 27, 2000, the petitioners, Jack Hough and Joanne Hough, filed a petition to vacate or modify arbitration award pursuant to 42 Pa.C.S. §7314. In response to the aforesaid petition to vacate or modify arbitration award, the respondent, State Farm, filed an answer to said petition and new matter. The new matter filed on behalf of the respondent, State Farm, asserted that this honorable court lacked jurisdiction over the petitioners’ petition to vacate or modify the arbitration award, and requested that said petition be dismissed. In order to bring the jurisdictional issues raised in the respondent’s new matter to the attention of the court, the respondent also filed a motion to dismiss petition to vacate or modify arbitration award raising the jurisdictional issues which were originally set forth in the respondent’s new matter. This motion to dismiss petition to vacate or modify arbitration award is presently before this court for adjudication.

The underinsured motorist arbitration provisions of the State Farm policy of insurance issued to Joanne Hough provide as follows:

“Deciding fault and amount
“Two questions must be decided by agreement between the insured and us:
“(1) Is the insured legally entitled to collect damages from the owner or driver of an uninsured motor vehicle or underinsured motor vehicle; and
“(2) If so, in what amount?
“If there is no agreement, these questions shall be decided by arbitration at the request of the insured or us. The Pennsylvania Uniform Arbitration Act, as amended from time to time, shall apply:
“Each party shall select a competent and impartial arbitrator. These two shall select a third one. If unable to agree on a third one within 30 days either party may request a judge of a court of record in the county in which the arbitration is pending to select a third one. The written decision of any two arbitrators shall be binding on each party.
“The cost of the arbitrator and any expert witness shall be paid by the party who hired them. The cost of the third arbitrator and other expenses of arbitration shall be shared equally by both parties.
“The arbitration shall take place in the county in which the insured resides unless the parties agree to another place. State court rules governing procedure and admission of evidence shall be used.”

In view of the express policy language contained in the subject policy of insurance, the State Farm policy provides for arbitration pursuant to the Pennsylvania Uniform Arbitration Act of 1980. The language used in the subject State Farm policy, which policy was issued after 1980, has been interpreted as requiring arbitration pursuant to the Pennsylvania Uniform Arbitration Act of 1980. This exact policy language was reviewed by the Pennsylvania Superior Court in MGA Insurance Co. v. Bakos, 699 A.2d 751 (Pa. Super. 1997), where the court stated.

“The insurance policy underlying this dispute provided for arbitration ‘in accordance with the Pennsylvania Uniform Arbitration Act.’ See petition to vacate and/ or modify arbitration award, 12/21/95, exhibit A. Accordingly, the rules of statutory arbitration under the PUAA of 1980 govern the proceedings, awards, and appeals arising therefrom.4 Patton, supra; Cotterman v. Allstate Insurance Co., 446 Pa. Super. 202, 207, 666 A.2d 695, 697 (1995).
“4. While the policy’s language does not specify whether the PUAA of 1927 or of 1980 applies; Cotterman, infra, informs us that the PUAA of 1927 only applies in two cases: (1) where the agreement to arbitrate is made prior to December 4, 1980, and (2) where the agreement to arbitrate, made either before or after 1980, expressly provides for arbitration under the 1927 Act. Here, as the policy containing the agreement to arbitrate had an effective date of February 10, 1993, and as the policy’s language did not specify that the 1927 Act applies, the provisions of the 1980 Act govern this controversy.” MGA Insurance Company v. Bakos, 699 A.2d 751, 753 (Pa. Super. 1997).

The standard of review regarding arbitration awards rendered pursuant to the Pennsylvania Uniform Arbitration Act of 1980 is set forth in 42 Pa.C.S. §7314(a) which provides as follows:

“(a) General rule.—
“(1) On application of a party, the court shall vacate an award where:
“(i) the court would vacate the award under section .7341 (relating to common-law arbitration) if this sub-chapter were not applicable;
“(ii) there was evident partiality by an arbitrator appointed as a neutral or corruption or misconduct in any of the arbitrators prejudicing the rights of any party; “(iii) the arbitrators exceeded their powers;
“(iv) the arbitrators refused to postpone the hearing upon good cause being shown therefore or refused to hear evidence material to the controversy or otherwise so conducted the hearing, contrary to the provisions of section 7303 (relating to hearing before arbitrators), as to prejudice substantially the rights of a party; or
“(v) there was no agreement to arbitrate and the issue of the existence of an agreement to arbitrate was not adversely determined in proceedings under section 7304 (relating to court proceedings to compel or stay arbitration) and the applicant party raised the issue of the existence of an agreement to arbitrate at the hearing.
“(2) The fact that the relief awarded by the arbitrators was such that it could not or would not be granted by a court of law or equity is not a ground for vacating or refusing to confirm the award.” 42 Pa.C.S. §7314(a).

This standard of review is extremely restrictive and an examination of the petition to vacate or modify arbitration award filed by the petitioners, Jack Hough and Joanne Hough, reveals that it does not allege any grounds which would justify the vacating or modification of the arbitration award in accordance with the statutory standards of review set forth in 42 Pa.C.S. §7314. The basis alleged for vacating the arbitration award asserted in the petition is that the arbitration panel committed errors of law.

The petitioners do not allege that they were denied a hearing, that there was fraud or misconduct, that there was evidence of partiality by the arbitrators, that the arbitrators exceeded their powers, that the arbitrators refused to postpone the hearing for cause shown, or that there was no agreement to arbitrate.

The petition to vacate or modify arbitration award filed pursuant to 42 Pa.C.S. §7314 seek to have the arbitration award vacated on the basis that the arbitrators committed errors of law when arriving at their decision. This is not a basis for the vacation of an award pursuant to section 7314.

The case of Martin v. PMA Group, 420 Pa. Super. 624, 626, 617 A.2d 361, 362 (1992), is directly on point. In Martin, the plaintiff was injured in a motor vehicle accident and he pursued a claim against the tort-feasor. This claim was settled for the policy limits and the plaintiff then asserted an underinsured motorist claim under his own insurance policy. As in the present case, the underinsured motorist policy provided underinsured motorist policy limits in an amount less than the bodily injury policy limits. In the underinsured motorist arbitration proceeding, the plaintiff contended that the reduced underinsured motorist policy limits were not valid because the plaintiff had not signed the appropriate forms to effectuate such a reduction in coverage. The issue as to the amount of underinsured motorist coverage was submitted to the arbitrators and the arbitration entered an award determining that the plaintiff had, in fact, properly requested a reduction in coverage and that the amount of coverage available under the policy was the reduced amount. The plaintiff filed a motion to vacate the arbitration award with the court of common pleas and the trial court denied the motion. This decision was appealed to the Pennsylvania Superior Court. In the Superior Court, the plaintiff argued that the arbitration award should be vacated by the court as being contrary to law. The Superior Court disagreed and confirmed the decision of the trial court. The Superior Court stated:

“Appellant’s first argument is that the parties’ contract, which provides for arbitration of disputed UM/ UIM claims, falls within the purview of 42 Pa.C.S. §7302 requiring a court to modify or correct an award which is contrary to law. We disagree.
‘ “Appellee’s insurance policy expressly stated that a dispute over UM/UIM benefits would be arbitrated and ‘conducted in accordance with the Pennsylvania Uniform Arbitration Act.’ This language constituted an express provision for statutory arbitration. See Bowdren v. Aetna Life and Casualty, 404 Pa. Super. 595, 600, 591 A.2d 751, 754 (1991). (citations omitted) Section 7314 of the Pennsylvania Uniform Arbitration Act delineates the circumstances under which a statutory arbitration award can be vacated by a court and an award contrary to law is not one such circumstance. Moreover 42 Pa.C.S. §7314(a)(2) expressly states that ‘[t]he fact that the relief awarded by the arbitrators was such that it could not or would not be granted by a court of law or equity is not a ground for vacating or refusing to confirm the award’ ...
“In the case at bar none of the conditions required for the broader standard of review, as mandated by section 7302(d), are met: appellee’s insurance policy was issued to S.O.S. in 1988, and the policy does not refer to the Pennsylvania Uniform Arbitration Act of 1927. Therefore, having found that no special circumstances which allow for a broad standard of review of statutory arbitration awards present, we are limited to the narrow scope of review provided in sections 7314 and 7315.
“Sections 7314 and 7315 provide for the vacating of a statutory arbitration award only upon a showing of fraudulent, irregular, or partial conduct on the part of the arbitrators, or that the award contains miscalculations or deficiencies in form. Appellant does not allege any of the above, but rather alleges that the award was contrary to law. An allegation that a statutory arbitration award is contrary to law is not a sufficient basis for vacating the award pursuant to sections 7314 and 7315.” Martin v. PMA Group, 420 Pa. Super. 624, 627-30, 617 A.2d 361, 362-63 (1992). (footnote omitted)

In their brief at the oral argument, the petitioners assert that the Superior Court’s decision in Martin, while not appealed, has been generally ignored. That is not the case. A number of other decisions have reached the same result as the Superior Court in the Martin case. Similar results have been reached in Cotterman v. Allstate Insurance Co., 446 Pa. Super. 202, 666 A.2d 695 (1995); Popskyj v. Keystone Insurance Company, 388 Pa. Super. 429, 565 A.2d 1184 (1989), appeal de nied, 525 Pa. 602, 575 A.2d 567 (1990); Cigna Insurance Co. v. Squires, 427 Pa. Super. 206, 628 A.2d 899 (1993), allocatur denied, 537 Pa. 638, 644 A.2d 161 (1994); Dearry v. Aetna Life and Casualty Insurance Co., 415 Pa. Super. 634, 610 A.2d 469 (1992); Boyce v. St. Paul Property and Liability Insurance Co., 421 Pa. Super. 582, 618 A.2d 962 (1992).

Moreover, the case of Bowdren v. Aetna Life and Casualty, 404 Pa. Super. 595, 591 A.2d 751 (1991) relied upon by petitioners was held in Cigna Insurance Co. v. Squires, 427 Pa. Super. 206, 628 A.2d 899 (1993) to not properly interpret the 1980 amendments to the Uniform Arbitration Act.

In view of the foregoing, the petitioners have failed to assert or allege a circumstance or basis which would authorize this court to vacate or modify the arbitration award in accordance with 42 Pa.C.S. §7314, and that as a result, said petition to vacate or modify the arbitration award should be dismissed.

The petitioners assert that this obvious conclusion should not be ordered as in decisions after Martin, the Pennsylvania courts have ignored or only given lip service to the Martin decisions. A review of some of these cases however, prove to the contrary.

In Cotterman v. Allstate Insurance Co., 466 Pa. Super. 202, 666 A.2d 695 (1995), the Superior Court held that the 1980 Uniform Arbitration Act applied to a policy that provided for arbitration under both the 1927 Act and the 1980 Act. The Superior Court then held that it could not review an arbitration award for errors of law and that the correct standard of review was that set forth in 42 Pa.C.S. §7314. Sun Company Inc. v. Pennsylvania Turnpike Commission, 708 A.2d 875 (Pa. Commw. 1998), the court permitted review for an error of law, however, case is clearly distinguishable. In Sun, the Pennsylvania Turnpike Commission was a party to the arbitration agreement. As the turnpike commission is a Commonwealth party, the error of law standard set forth in section 7302 is applicable. Section 7302(d)(l)(i) is applicable when a party to the arbitration agreement is a Commonwealth agency. Moreover, in Sun, the parties agreed that section 7302 provided the applicable standard of review. Accordingly, the Sun decision does not ignore the holding in Martin.

The Houghs also assert that Caron v. Reliance Insurance Co., 703 A.2d 63 (Pa. Super. 1997), allocatur denied, 556 Pa. 669, 727 A.2d 126 (1998); ignores the decision in Martin. This assertion is inaccurate. In fact, the opinion in Caron actually supports State Farm’s position. In Caron, the Superior Court was asked to review an arbitration award in an uninsured motorist case involving a stacking issue. The Superior Court, relying on Martin held that it could not review an arbitration award for an error of law, stating:

“Under this limited standard, the resolution of factual disputes is within the province of the arbitrators. Boyce, supra. In addition, ‘[a]n allegation that a statutory arbitration award is contrary to law is not a sufficient basis for vacating the award.’ Martin v. PMA Group, 420 Pa. Super. 624, 629-30, 617 A.2d 361, 363 (1992).” Caron v. Reliance Insurance Co., 703 A.2d at 66.

However, the court in Caron discussed the rule that allows a court to review an insurance policy provision which is alleged to be contrary to public policy. The court stated:

“[A] trial court can review a clause in an insurance policy where the claimant alleges that such a provision is contrary to public policy.” Caron v. Reliance Insurance Co., 703 A.2d at 66.

Accordingly, the Superior Court in Caron did follow the holding in Martin as Houghs are not alleging that a policy provision violates public policy, rather, they are asserting that the arbitration award is contrary to law.

The Houghs also cite the cases of Carroll v. State Farm Mutual Automobile Insurance Co, 420 Pa. Super. 215, 616 A2d 660 (1992), allocatur denied, 533 Pa. 641, 622 A.2d 1374 (1993), and Bowdren v. Aetna Life and Casualty, 404 Pa. Super. 595, 591 A.2d 751 (1991). These two decisions have been distinguished and criticized by later decisions. In Cigna Insurance Co. v. Squires, 427 Pa. Super. 206, 628 A.2d 899 (1993), discussed hereinabove, the Superior Court distinguished both the Bowdren and Carroll decisions stating:

“Cigna contends that this court has rejected the principles articulated in Popskyj, in the more recent cases of Bowdren v. Aetna Life and Casualty, 404 Pa. Super. 595, 591 A.2d 751 (1991), appeal denied, 529 Pa. 644, 602 A.2d 855 (1992) and Carroll v. State Farm Mutual Automobile Insurance Company, 420 Pa. Super. 215, 616 A.2d 660 (1992), appeal denied, 533 Pa. 641, 622 A.2d 1374 (1993). We disagree.

In Bowdren, supra, this court was again faced with the question of whether we can review an arbitration award for an error of law. The Bowdren court held that if the insurance contract expressly provides for statutory arbitration, then the standard of review is dictated by section 7302. Bowdren, 404 Pa. Super. at 601, 591 A.2d at 754. In coming to this conclusion, the court neither relies upon nor rejects the reasoning in Popskyj. While Bowdren states that, in any statutory arbitration case, section 7302(d) provides the standard of review, it does not discuss the historical note describing the limited application of that section. Moreover, if we apply the Bowdren analysis of section 7302(d) to the facts of the case sub judice, section 7314 ceases to have any purpose under the Act. Accord Aetna Casualty and Surety Company v. Deitrich, 803 F. Supp. 1032 (M.D. Pa. 1992). In our interpretation of the statute, however, we must presume that the legislature intended the entire statute to be effective. 1 Pa.C.S. §1922(2). We are unpersuaded that Bowdren represents an express rejection of the Popskyj analysis or that Bowdren applies in the present case.”

Based upon the foregoing, the applicable standard of review is set forth in 42 Pa.C.S. §7314 and the arbitration award entered in this case cannot be reviewed for errors of law and respondent’s motion to dismiss must be granted.

ORDER

And now, to wit, March 1,2001, after review and careful consideration of the within matter, it is hereby ordered, adjudged and decreed that the motion of the respondent, State Farm Insurance Company, to dismiss petitioners’ petition to vacate or modify arbitration award is granted and the said petition is hereby ordered dismissed.


author: SHEPPARD JR., J.,

text:
    Poeta v. Jaffe

      Steven J. Fram, for plaintiffs.

      David Smith, for defendants.
    May 30, 2001
   SHEPPARD JR., J.,

Defendants, Richard P. Jaffe, Robert P. Krauss, Barry J. Frank and Harvey N. Shapiro have filed preliminary objections to the complaint of plaintiffs, John Poeta and Beth Stem-Fleming.

For the reasons set forth, the court will issue a contemporaneous order sustaining the objections and permitting plaintiff to file an amended complaint.

BACKGROUND

This matter arises from the breakup of the law firm of Mesirov, Gelman, Jaffe, Cramer & Jamieson L.L.R Mesirov’s partnership agreement addresses the firm’s duration:

“The partnership shall continue until dissolved. The partnership can be dissolved by the affirmative vote of a majority of the partners. The admission of a new partner or the retirement, withdrawal, disability or death of a partner shall not, in the absence of a vote, cause the dissolution of the partnership.” Agreement §2.1.

In addition, section 9.4 of the agreement provides that a withdrawing firm partner is “entitled to a final allocation” and that such allocation “shall not penalize the partner solely because of the withdrawal but may take into account the effect of the withdrawal on the partnership.”

In early 1999, Mesirov attempted to attract and to retain younger partners. As part of this effort, Edward DeMarco, a Mesirov partner, approached Poeta and suggested the possibility of his becoming a partner at Mesirov. The complaint alleges that, to induce Poeta to become a partner, Krauss and Shapiro represented that Mesirov was going to begin increasing the compensation for the younger partners, in accordance with their economic contributions to the firm, and that senior partners would be limited to cost of living increases. Based in large part on these representations, Poeta became a partner in April 1999.

Mesirov undertook similar efforts with regard to Stern-Fleming. Prior to January 1999, Stern-Fleming was an associate at the firm. In 1998, the defendants told Stern-Fleming that the firm would limit increases in compensation to senior partners to cost of living adjustments and would materially increase compensation to younger partners. Allegedly relying on these representations, Stern-Fleming agreed to remain at Mesirov and became a partner in January 1999.

The complaint asserts that, in January 2000, the firm managers gave certain senior partners substantially increased allocations. These allocations allegedly were inconsistent with the representations made to Poeta and Stern-Fleming. In addition, the allocations made to junior partners, including Poeta and Stern-Fleming, were smaller than those promised, with Poeta’s allocation being insufficient to pay his federal and state tax liabilities for the previous year. Although Mesirov increased Stem-Fleming’s allocation nominally after several junior partners left the firm, these increases are alleged to have been inadequate, and no increase was made to Poeta’s allocation.

In early 2000, Jaffe announced that the firm was going to begin formal “merger” negotiations with other Philadelphia law firms, with an expected dissolution by June 1, 2000. When a firm that had no need for attorneys in the plaintiffs’ field emerged as the leading candidate for a merger partner, Poeta and Stern-Fleming began exploring options at other firms. As merger discussions continued, Jaffe advised the partners that, if any of them decided to leave Mesirov prior to the consummation of a merger, his or her departure would not be taken into consideration with respect to fiscal year 2000 allocations.

On April 25, 2000, the plaintiffs notified Jaffe that they had been offered positions at Stevens & Lee P.C. Jaffe allegedly reiterated that any decision by the plaintiffs to depart prior to any merger would have no impact on their 2000 allocations. Jaffe requested, however, that any announcement of their departure from Mesirov and their move to Stevens be delayed by one or two weeks, that the plaintiffs remain at the firm until the end of May 2000 and that they continue to collect outstanding receivables owed to the firm. Poeta and Stern-Fleming agreed and contend that they complied with these requests.

Although the plaintiffs deny that they contacted the press, the Legal Intelligencer on May 2, 2000, published an article about the plaintiffs’ rumored move to Stevens. That same day, Jaffe demanded that Poeta leave Mesirov as soon as possible. At some point soon thereafter, Poeta and Stern-Fleming departed from the firm.

On May 25, 2000, it was announced that the defendants and other attorneys at Mesirov had entered into an agreement to “merge” with Schnader Harrison Segal Lewis LLP. According to the complaint, the defendants agreed to convey to Schnader substantially all of Mesirov’s assets in return for capital contribution credit for the defendants and those former partners who moved to Schnader. Plaintiffs estimate these “assets” to include approximately $800,000 in accounts receivable and work in progress originated by Poeta and Stern-Fleming during the first half of 2000.

The merger was effected on May 31,2000. Since then, the defendants allegedly have assumed control over all Mesirov assets. Plaintiffs also contend that the defendants have used and are using the assets to guarantee allocations from Schnader for 2000 in excess of their 1999 allocations from Mesirov. In spite of repeated demands, the defendants have refused to provide Poeta and Stem-Fleming with details of the assets or firm liabilities, or information regarding the winding up of Mesirov’s affairs and the transfer of assets to Schnader. In addition, the defendants allegedly have indicated that they will not pay Poeta or Stem-Fleming any 2000 allocations.

The complaint sets forth five counts: a breach of fiduciary duty claim against all defendants requesting an equitable accounting and the appointment of a receiver; two counts for breach of fiduciary duty, one by each plaintiff and two counts for breach of the duty of good faith and fair dealing, one by each plaintiff. The defendants contend that the complaint is neither legally sufficient nor adequately specific and that the plaintiffs are not entitled to equitable relief.

DISCUSSION

The plaintiffs’ argument boils down to a simple statement: the firm’s dissolution, as effected by Jaffe’s announcement in anticipation of a merger, preceded their departure from the firm. As such, the firm is currently in a “winding-up” stage, during which partners at the time of dissolution, including the plaintiffs and the defendants, owe each other an ongoing fiduciary duty. The court does not find this persuasive and has sustained the objections.

I. The Plaintiffs’ Claims for Breach of Fiduciary Duty and Breach of the Duty of Good Faith and Fair Dealing Are Legally Insufficient

In general, partners owe a fiduciary duty to each other to act in good faith during the life of the partnership. 15 Pa.C.S. §8334. Under Pennsylvania law, this duty extends throughout the partnership’s wind-up period, which follows dissolution and precedes termination of the partnership. In re LaBrum & Doak LLP, 227 B.R. 391, 408 (Bankr. E.D. Pa. 1998) (citing, inter alia, 15 Pa.C.S. §§8331, 8334(a), 8352; Clement v. Clement, 436 Pa. 466, 260 A.2d 728 (1970)). Apparently, the parties agree, however, that no ongoing duty is owed to partners who withdraw prior to a partnership’s dissolution. Because there are no allegations of misconduct by the defendants before May 2000, this puts the plaintiffs in the position of arguing that the firm’s dissolution was effected prior to their departure.

According to the agreement, the firm “can be dissolved by the affirmative vote of a majority of the partners,” with the withdrawal of a partner being of no effect in the absence of a vote. The complaint does not assert that any such vote was taken, nor does it explicitly allege that the firm was dissolved prior to the plaintiffs’ departure. Thus, the plaintiffs rely solely on Jaffe’s announcement that the firm was expected to dissolve by June 1, 2000. Plaintiffs assert that this announcement, which was made prior to their departure from the firm, constituted the express will of Jaffe and caused the immediate dissolution of the partnership. Transcript at 37-38. On this basis, and on this basis alone, they contend that they did not withdraw prior to the firm’s dissolution and that the defendants owe them ongoing fiduciary duties during the winding-up process.

In advancing this argument, plaintiffs rely on Beckman v. Farmer, 579 A.2d 618 (D.C. Ct. App. 1990), in which the court found that a two-person partnership had been terminated by the express will of one of the partners. Beckman, however, is distinguishable from this case. There, the dissolving partner insisted that the other partner leave immediately. The partner in question also took steps to transfer funds from partnership bank accounts to his own and revoked the other partner’s authority to use firm accounts. Significantly, the dissolution of the partnership in Beckman was not governed by a written agreement.

Here, Jaffe allegedly stated that the firm would begin merger negotiations with an expected dissolution date of June 1, 2000. This alone does not indicate Jaffe’s express will that the firm be dissolved immediately. This conclusion is logical because the complaint does not allege that any events that typically accompany dissolution and the winding-up process took place in the aftermath of Jaffe’s announcement. Cf. Stainton v. Tarantino, 637 F. Supp. 1051, 1073 (E.D. Pa. 1986) (filing a complaint for a judicial decree of dissolution indicated express will of a partner to dissolve partnership). As a result, there is no indication in the complaint that the firm was dissolved prior to the plaintiffs’ withdrawal.

As noted, continuing partners do not owe a withdrawing partner a fiduciary duty or a duty of good faith after he or she withdraws from the firm. Thus, the defendants’ alleged misconduct, all of which took place after the plaintiffs’ withdrawal as partners, cannot give rise to claims of a breach of fiduciary duty or a breach of a partner’s duty of good faith. Accordingly, these claims must be dismissed.

II. Stem-Fleming and Poeta Are Not Entitled to an Accounting in Equity

In requesting an accounting, a complaint “seeks to turn over to the party wrongfully deprived of possession all benefits accruing to defendant by reason of its wrongful possession.” Boyd & Mahoney v. Chevron U.S.A., 419 Pa. Super. 24, 36, 614 A.2d 1191, 1197 (1992). (emphasis in original) Pennsylvania law does not permit an equitable accounting “where no fiduciary relationship exists between the parties, no fraud or misrepresentation is alleged, the accounts are not mutual or complicated, or the plaintiff possesses an adequate remedy at law.” Rock v. Pyle, 720 A.2d 137, 142 (Pa. Super. 1998). (emphasis in original) See also, Fudula v. Keystone Wire & Iron Works Inc., 283 Pa. Super. 502, 507, 424 A.2d 921, 923 (1981) (in determining whether an accounting should be sought in equity or at law, the question is whether “a jury would not be qualified to state such an account, or even that it is doubtful whether adequate relief could be had at law”). In deciding a request for an accounting, “it is reasonable for the court to permit some latitude since often times it is not certain what claims a plaintiff may have until the accounting is completed.” In re Estate of Hall, 517 Pa. 115, 136, 535 A.2d 47, 58 (1987). (footnote omitted) But see Buczek v. First National Bank of Mifflintown, 366 Pa. Super. 551, 556, 531 A.2d 1122, 1124 (1987) (“[ejquitable jurisdiction for an accounting does not exist merely because the plaintiff desires information that he could obtain through discovery”).

In this matter, the court may infer from the allegations in the complaint that the accounts in dispute are mutual and complicated. It appears, however, that the plaintiffs essentially are demanding money damages for the defendants’ alleged breach of their contractual duties under the agreement. On this basis, the court concludes that the plaintiffs have an adequate remedy available at law that precludes them from pursuing an accounting in equity. Thus, their claim for such an accounting must be dismissed. Cf. Allegheny Plastics Inc. v. Stuyvesant Insurance Co., 414 Pa. 381, 382, 200 A.2d 775 (1964) (“the substance of plaintiffs complaint is an alleged breach of contract and the ultimate relief is money damages, therefore, we are of opinion that there is an adequate remedy at law”).

CONCLUSION

The complaint does not allege facts to support the plaintiffs’ claims. Accordingly, the objections are sustained. Plaintiffs may file an amended complaint within 20 days of the date of this opinion.

This court will enter a contemporaneous order consistent with this opinion.

ORDER

And now, May 30, 2001, upon consideration of the preliminary objections of defendants, Richard R Jaffe, Robert R Krauss, Barry J. Frank and Harvey N. Shapiro, to the complaint of plaintiffs, John Poeta and Beth Stem-Fleming, the plaintiffs’ response in opposition and oral argument, and in accord with the opinion being filed contemporaneously with this order, it is hereby ordered that the preliminary objections are sustained.

Plaintiff may file an amended complaint within 20 days of the date of this order.

      . The plaintiffs contended at oral argument that this announcement indicated Jaffe’s express will to terminate the firm as a partnership and caused the firm’s immediate dissolution. Transcript of oral argument, May 7,2001, at 37-39. On this basis, plaintiffs claim that their departure did not constitute a withdrawal because Jaffe’s earlier statements constituted a dissolution of the firm. Id. at 41-43. There are no allegations to this effect in the complaint. In addition, the defendants specifically contest this allegation and assert that the firm has not been dissolved. Id. at 53.

      . The exact date of the plaintiffs’ departure is not set forth in the complaint.

      . This transaction is referred to as the “merger.”

      . The court has inferred this from the absence of any argument by the plaintiffs that they withdrew prior to dissolution and that the defendants nonetheless owed them a fiduciary duty for their conduct after the plaintiffs’ withdrawal. While no Pennsylvania cases speak to this particular issue, the consensus appears to be that, in the absence of dissolution, fiduciary duties terminate upon a partner’s withdrawal. See Finkelstein v. Security Props. Inc., 888 P.2d 161, 167 (Wash. Ct. App. 1995) (withdrawing partner was not owed a fiduciary duty by ongoing partners after his withdrawal); Allen R. Bromberg & Larry E. Ribstein, Bromberg & Ribstein on Partnership (1991) §6.07(a)(7) (“[w]here the partnership continues after a partner’s dissociation, the ongoing partners probably have no fiduciary duty to withdrawn partners ____”). Cf. Hansel v. Hansel, 300 Pa. Super. 548, 556-57, 446 A.2d 1294, 1298-99 (1982) (fiduciary duty owed to estate of partner whose death led to partnership’s dissolution); Zebley v. Ostheimer, 368 Pa. 21, 81 A.2d 546 (1951) (partner whose withdrawal leads to dissolution of partnership is entitled to an accounting in equity).

      . The court notes that this does not preclude the plaintiffs from bringing an action for an accounting at law. See Donatelli v. Carino, 384 Pa. 582, 584, 122 A.2d 36, 37 (1956) (“apartnership accounting may be sought, sometimes in an action at law, sometimes in equity”). Indeed, defendants have conceded that the plaintiffs are entitled to sue for a remedy at law. Transcript at 24, 51. As a result, the court is permitting the plaintiffs to file an amended complaint. See Werner v. Zazyczny, 545 Pa. 570, 583, 681 A.2d 1331, 1338 (1996) (leave to amend apleading “should be liberally granted at any stage of the proceedings unless there is an error of law or resulting prejudice to an adverse party”); Frey v. Pennsylvania Electric Co., 414 Pa. Super. 535, 538, 607 A.2d 796, 797 (1992) (“parties are liberally granted leave to amend their pleadings”).


author: BRINKLEY, J.,

text:
    Rosa v. 1220 Uncle’s Inc.

      Andrea McCormick, for plaintiff.

      Richard L. Hahn, for defendants.
    March 30, 2001
   BRINKLEY, J.,

Defendant 1220 Uncle’s Inc. has filed an appeal of this court’s judgment in favor of plaintiff Ezequiel Rosa, entered on June 22, 2000.

I. PROCEDURAL HISTORY

The plaintiff, Ezequiel Rosa, brought an action against the defendants for damages he suffered as a victim of a robbery in the bathroom of defendant 1220 Uncles Inc. Rosa sought damages for the physical and psychological injuries he suffered. The matter went to compulsory arbitration on September 27, 1999. The Board of Arbitrators awarded Rosa $24,654.30. Both defendants, Uncles and Tyrone Clarkson a/k/a Tyrone Clarkson-Bey were found equally liable for 50 percent of the award. Defendant Uncles appealed from the award of the arbitration and the case came before this court de novo. A trial was held before this court sitting without a jury on June 21, 2000. This court found in favor of Rosa and against Uncles and Clarkson, jointly and severally, for the amount of $10,000, apportioning their actual responsibility for the injuries at 50 percent each. Uncles filed post-trial motions for a judgment n.o.v. on June 29,2000 which was denied on January 19, 2001. Uncles then filed this appeal to the Superior Court on February 1, 2001.

H. FACTUAL HISTORY

On July 16, 1997, at or about 11:45 p.m. Rosa entered the establishment at 1220 Locust Street known as Uncles. (N.T. 19.) Rosa was accompanied by two friends, Christine Gezinsky and David Anifin. (N.T. 19.) Gezinsky prompted the stop at Uncles because she was looking for a friend of hers that frequented the bar. (N.T. 19.) There was a red sign on the front door that indicated there was continuous surveillance of the premises. (N.T. 20.) No one stopped the three to inspect their identification as they entered Uncles. (N.T. 20.) The bar had loud music playing and Rosa had to speak very loudly and use his hands for his friends to understand him. (N.T. 21.) Rosa proceeded to inquire as to the location of the men’s restroom and another patron of the bar indicated where it was. (N.T. 19.) Rosa took his black briefcase type bag to the bathroom with him to comb his hair. (N.T. 21.) There was no lock on the inside of the men’s room. (N.T. 22.)

As Rosa was fixing his hair, another male entered the bathroom and asked Rosa for a couple of dollars. (N.T. 23.) Rosa responded that he did not have any money to spare and continued his styling as the male entered a stall. (N.T. 23.) When the man came back out of the stall he again approached Rosa, this time with more force. (N.T. 24.) The man touched Rosa’s hair and attempted to kiss him. (N.T. 24.) Rosa resisted these advances and told the man to leave him alone. (N.T. 24.) The assailant then became angered and maneuvered Rosa into a chokehold. (N.T. 24.) Rosa tried to yell for help. (N.T. 24.) Someone tried to enter the restroom during the attack and the man threw himself and Rosa into the door to prevent it from opening. The attacker took cash and a credit card from Rosa’s pocket and then took out a knife and cut Rosa’s face. (N.T. 24-25.) Rosa attempted to resist and hit the man with his Snapple bottle but it broke into pieces and the man ran out of the bathroom. (N.T. 25.) Rosa ran out after him and yelled to the bartender for help and to call the police. (N.T. 25.) Gezinsky tried to stop the assailant from exiting and the man threw her to the ground. (N.T. 26-27.) Rosa then left Uncles after his attacker and followed him. (N.T. 29.) Rosa thought the man who attacked him was drunk. (N.T. 28-29.) When the attacker saw Rosa following him, he turned around and tried to cut Rosa in the stomach. (N.T. 53.) Rosa flagged down a passing police officer and the man was subsequently apprehended and identified as Clarkson. (N.T 30-31.) Rosa was taken to Thomas Jefferson Hospital where he received stitches. (N.T. 34.)

Rosa has since been treated by a psychologist and a plastic surgeon for the injuries he suffered. The psychologist, Dr. Steven Batoff, treated Rosa for a year following the robbery, for the nightmares, flashbacks, and low self-esteem which resulted from the attack. (N.T. 34-35.) Rosa also consulted with a plastic surgeon, Dr. Susan Hughes, about the scarring caused by the cuts he received. (N.T. 37.) Dr. Hughes gave Rosa a chemical peel and an at-home treatment to lessen the scar’s appearance. Rosa hopes to have further treatment to lessen the scarring but is unable to financially arrange such treatment. Because of the robbery and the resulting injuries, Rosa had to leave his job at Ralph Lauren, must wear glasses, cannot visit the city alone and cannot watch horror movies. (N.T. 37-40.)

There was also testimony from the owner of Uncles, Morton Wemick, regarding safety precautions taken by employees. (N.T. 66-69.) Additionally, Wemick stated that there previously had been a robbery at Uncles in 1996. (N.T. 69.) In 1996, the bartender of Uncles was held up at gunpoint. There was a panic button behind the bar and after the first robbery, security cameras were set up throughout the bar. (N.T. 70-71.) Wemick was the only one who reviewed the footage from the security cameras. (N.T. 71.) Sometimes a week would pass before the tapes would be reviewed, and after a month they were reused. (N.T. 72,77.) When Wemick was not at the bar, there was no one watching the security television monitor. (N.T. 72.) Wemick was not present at Uncles the night of either robbery. (N.T. 67-68.) There was no one who checked identification at the entrance to Uncles. (N.T. 73.) Bartenders checked identification based on whether or not someone appeared young. (N.T. 75.) No security personnel were employed by Uncles. (N.T. 73.) No signs were posted in the bar advising patrons to guard their personal belongings. (N.T. 74.)

m. issues

A. Whether the court’s mling was supported by the weight of the evidence.

B. Whether the defendant was negligent based upon actual or constmctive notice of the danger to plaintiff.

C. Whether Uncles was negligent and contributed to Rosa’s injuries.

IV. DISCUSSION

A. The Court’s Verdict Was Proper in Light of the Evidence Presented

“When considering whether the record supports the trial court’s decision [appellate courts] generally defer to the trial court’s judgment because, by virtue of its position, it is uniquely qualified to determine factual matters.” Coker v. S.M. Flickinger Co. Inc., 533 Pa. 441, 625 A.2d 1181 (1993), quoted in Summers v. Giant Food Stores Inc., 743 A.2d 498, 506 (Pa. Super. 1999). An appellate court is not empowered to substitute its opinion for that of the trial judge regarding the sufficiency and weight of the evidence because of the disparity in vantage points. Summers, 743 A.2d at 506 (citing Thomas v. City of Philadelphia, 507 Pa. 592, 599, 493 A.2d 669, 672-73 (1985)). If the record adequately supports the determinations of the trial court and the reasons given by the trial court for its decisions, there will be no abuse of discretion and the judgment will stand. Summers, 743 A.2d at 506. It is not the role of appellate courts to pass on the credibility of the witnesses nor to act as the trier of fact, that is the sole province of the fact-finder, whether it be the trial court, judge or the jury. Schultz by Schultz v. DeVaux, 715 A.2d 479 (Pa. Super. 1998).

In this case, evidence was presented by both parties through direct testimony and cross-examination of three witnesses. The witnesses were found credible by this court and there was sufficient factual testimony to prove the offense alleged. Rosa was robbed in the bathroom of Uncles. Morton Wemick testified to his knowledge of the incident and that of a prior robbery at the bar in 1996 which involved a bartender being shot. However, there were no adequate security measures in place to prevent this robbery of Rosa. Although security cameras were installed, they were not being monitored on a regular basis. There was no lock on the bathroom door of the men’s room. There were no security personnel or bouncers on duty at the bar. After the attack, Rosa asked the bartender to call 911 and there was no response. After Rosa followed his assailant from the bar and flagged down a police officer, a police report was filed which related the events of the evening. There was sufficient evidence presented in this case to support the court’s finding of liability on behalf of the defendants.

B. The Owner of Uncles Had Notice Violence Could Occur in His Establishment and Therefore Had a Duty To Warn or Protect Rosa From Such Harm

1. Uncles and Its Owners Have a Duty Toward Bar Patrons

The determination of whether a duty exists is peculiar to each set of facts presented to the fact-finder. Hutchinson v. Luddy, 763 A.2d 826, 849 (Pa. Super. 2001). The legal concept of duty of care is inherently connected to public policy considerations. Althaus ex rel. Althaus v. Cohen, 562 Pa. 547, 553, 756 A.2d 1166, 1169 (2000). Factors to be weighed in determining the existence of a duty include: the relationship between the parties; the social value of the actor’s conduct; the type of risk involved and the forseeability of harm; the consequences of imposing such a duty and the overall public interest in the end to be achieved. Id. The situation at issue in this matter is governed by the Restatement (Second) of Torts. Section 314(A) describes the special relationships which give rise to a duty to act affirmatively to protect a third party. “A possessor of land who holds it open to the public” is under a duty to protect “members of the public who enter in response to his invitation.” Restatement (Second) of Torts §314(A)(3) (1965); T.A. v. Allen, 447 Pa. Super. 302, 307, 669 A.2d 360, 363 (1995).

The standard of care a landowner or possessor owes to an entrant upon the land depends on whether the entrant is a trespasser, licensee of business invitee. Trude v. Martin, 442 Pa. Super. 614, 624, 660 A.2d 626, 630 (1995) (citing Carrender v. Fitterer, 503 Pa. 178, 469 A.2d 120 (1983)). The duty owed to the business invitee is the highest standard of care. An invitee is someone who is “invited to enter or remain on land as a member of the public for a purpose for which the land is held open to the public.” Restatement (Second) of Torts §332 (1965). People who enter bars are “business patrons and must be considered invitees . . . [t]he person in control of the property is liable to such an invitee if he should have known that the invitee would reasonably believe that his presence is permitted or desired.” Trude, 442 Pa. Super. at 626, 660 A.2d at 631-32 (quoting Portee v. Kronzek, 194 Pa. Super. 193, 166 A.2d 328 (1960)).

In this case, Rosa was obviously a business invitee. There was no evidence presented to contradict the fact that Uncles, as a bar and not a private club, did not invite all members of the public. Thus, according to Pennsylvania case law, Rosa, as a bar patron, was a business invitee to which Uncles owed a duty of care.

2. Uncles Had a Duty To Protect Rosa and All Other Bar Patrons From Any Dangerous Acts or Conditions of Which the Owner Has Actual or Constructive Notice

The duty owed to bar patrons, as business invitees, is set out in Restatement section 343, which dictates a landowner will be liable for injuries to an invitee if he:

“(a) knows or by the exercise of reasonable care would discover the condition and should realize that it involves an unreasonable risk of harm to such invitees, and
“(b) should expect that they will not discover or realize the danger, or will fail to protect themselves against it, and
“(c) fails to exercise reasonable care to protect them against the danger.” Restatement (Second) of Torts §343 (1965) quoted in Summers, 743 A.2d at 506. This section requires store or bar owners to have actual or constructive notice that a potentially dangerous condition exists. Zito v. Merit Outlet Stores, 436 Pa. Super. 213, 217, 647 A.2d 573, 575 (1994) (citing Moultrey v. Great A. & P. Tea Co., 281 Pa. Super. 525, 422 A.2d 593 (1980)).

An invitee must show that a proprietor deviated from the duty of reasonable care that it owed under the particular circumstances. Neve v. Insalaco’s, 2001 WL 220194, *3 (Pa. Super.). This means the invitee has to prove the landowner knew or should have known through reasonable care that a harmful condition existed. Id. (citing Zito at 217, 647 A.2d at 574-75). What constitutes this type of constructive notice depends on the circumstances of each case. Neve at *3. One of the most important factors to be considered is the time which has elapsed between the origin of the dangerous condition and the accident or incident. Id. The relative durability of a defect is also an important and related factor to be considered in such a determination. Id. If a defeet is inherently durable, there is a lower standard of how much proof must be offered as to how long the problem existed in order to charge the landowner with constructive notice. Id.

When a dangerous condition exists, the question for the finder of fact is whether or not the landowner had a duty to warn the injured party. Zito at 217, 647 A.2d at 575. An invitee is usually responsible to observe only that which can be seen. Id. Even if a danger is obvious or apparent to an invitee, a possessor of land still should warn if he “has a reason to expect danger because to a reasonable man in his position, the advantages of doing so would outweigh the risk” of harm to the invitee. Id. (quoting Restatement (Second) of Torts §343(A)(1), comment f). Furthermore, in section 344 of the Restatement, there is a duty to police on the premises. Restatement (Second) of Torts §344, comment r. According to section 344, owners of land held open to the public for use are hable for accidental, negligent or intentionally harmful acts of third persons. Restatement (Second) of Torts §344 comment f, cited in Feld v. Merriam, 506 Pa. 383, 391, 485 A.2d 742, 745 (1984). This provision was specifically adopted by the Supreme Court of Pennsylvania. Moran v. Valley Forge Drive-In Theater Inc. 431 Pa. 432, 246 A.2d 875 (1968). “One who invites all may reasonably expect that all might not behave, and bears the responsibility for injury that follows the absence of reasonable precaution against that common expectation.” Feld, 506 Pa. at 391, 485 A.2d at 745.

Section 344 states that a land possessor who knows from past conduct that there is a likelihood the conduct of third parties may endanger the invitees, may be under a duty to take precautions against such harm. This is especially applicable where a possessor may anticipate criminal or careless conduct by third persons. This duty includes providing “a reasonably sufficient number of servants to afford a reasonable protection.” Restatement (Second) of Torts §344, comment r, quoted in Roski v. Halfway House Inc., 396 Pa. Super. 562, 571, 579 A.2d 392, 397 (1990) (Johnson, J., dissenting) (affirming by majority the imposition of liability on tavern owner for injuries to patron shot in elbow during the course of a robbery). It is the duty of a bar owner to keep the bar reasonably well policed. Id. The duty is not necessarily fulfilled by instruction to the bartender especially where the owner has “reason to believe that more protection is necessary.” Id. (citing Howard v. Zaney Bar, 369 Pa. 155, 85 A.2d 401 (1952)).

In this case, Uncles was holding its establishment out to the public. Only one year prior to the attack on Rosa, another invitee of the bar robbed and shot one of the bartenders. Uncles was on constructive notice that a robbery could occur on its premises.This was not a transitory condition if no additional precautions were effectively taken. In addition, serving alcohol to members of the public and failing to properly supervise them was a risk taken by Uncles. Uncles claimed that it installed the video cameras to protect its invitees. However, the monitoring of the video cameras installed by Uncles was lax at best, and nonexistent when Wemick was absent from the bar. If a crime occurred, it would not have been observed by Uncles until days or weeks later when the tapes were reviewed. Such a monitoring procedure is not preventative nor protective. There were no bouncers nor any security devices placed at the entrance to a bar where an armed robbery had taken place. Uncles had a reason to believe more protection than one bartender was necessary. However, the bar was not reasonably policed, and at times, not policed at all. Uncles breached the duty it had to protect its patrons, and what resulted was the attack on Rosa. The injuries to Rosa were a direct and proximate result of Uncles’ failure to protect and/or warn the bar patrons of the potential danger that existed within the establishment.

C. Uncles Was Properly Held Liable for Rosa’s Injuries Because Its Negligence Was Proven

1. All of the Elements Necessary To Prove a Case in Negligence Were Proven in the Case Against Uncles

The elements required to prove a prima facie case of negligence have been enumerated by Pennsylvania courts repeatedly. To establish a case of negligence, a plaintiff must set forth and prove (1) that he was owed a duty of care; (2) that duty was breached; (3) that breach proximately caused harm to the plaintiff; and (4) the plaintiff suffered actual damages. Summers, 743 A.2d at 506 (citing Ellis v. Sherman, 512 Pa. 14, 18, 515 A.2d 1327, 1328 (1986)).

The above discussion describes in detail that Uncles had an affirmative duty to protect Rosa from harm that it should have anticipated. That duty was breached when Rosa was harmed by another patron of Uncles. The lack of protection was a substantial factor in bringing about the attack on Rosa. Rosa suffered physical and psychological damages as a result of Uncles negligence, to which he credibly testified to this court. Plaintiff Rosa not only set forth, but proved a case of negligence by Uncles, and therefore, Uncles properly has been held jointly and severally liable for the injuries to Rosa.

2. Uncles Negligence Was a Substantial Factor in Causing Rosa’s Injuries

The courts of Pennsylvania have adopted the approach to legal causation that is described as the “substantial factor” approach. Trude, 442 Pa. Super. at 628, 660 A.2d at 663 (citing Restatement (Second) of Torts §431(a) (1965)). If a plaintiff proves a defendant’s negligence was a substantial factor in causing the plaintiff harm, that defendant may be held liable for the full amount of the plaintiff’s damages. Id. In situations where more than one substantial factor brings about harm, the principle of concurrent causes applies. Trude, 442 Pa. Super. at 628, 660 A.2d at 632 (citing Monzo v. PennDOT, 124 Pa. Commw. 360, 556 A.2d 493 (1989)). Obviously, failure to protect is a significantly sufficient factor in harm inflicted upon a patron. Since Uncles was determined to be negligent in breaching its duty to Rosa, Uncles may be held liable for all of Rosa’s injuries and therefore liable for the full amount of damages awarded to Rosa. This liability applies regardless of the contribution to the assault and Rosa’s injuries by Tyrone Clarkson. If Uncles had adequately protected Rosa, Clarkson would not have been able to complete his robbery of Rosa. Hence, the principle of concurrent causes applies and Uncles was properly held jointly and severally liable along with Clarkson, for the full amount of Rosa’s damages.

V. CONCLUSION

Based upon the foregoing, this court properly entered a judgment in favor of Rosa, awarding him damages and holding Uncles and Clarkson jointly and severally liable for the attack that occurred. Therefore, defendant’s motion was properly denied and its appeal should be dismissed.

      . The court in Neve noted that spilt soup on the floor is too transitory to charge a defendant with constructive notice. However, a raised metal strip on a stair, upon which a patron tripped could have existed long enough to form constructive notice, if a witness saw the defect immediately after the incident. Neve, 2001WL 220194 at *3 (citing Rogers v. Horn & Hardart Baking Co., 183 Pa. Super. 83, 86, 127 A.2d 762, 764 (1956); Hartigan v. Clark, 401 Pa. 594, 165 A.2d 647, 652 (1960).