author: MILLER, J.,

text:
    Bizmart Inc. v. Facility Construction Management Inc.

      C.P. of Schuylkill County,
    no. S-1647-02.

      James C. Oschal, for plaintiff.

      John B. Lieberman and Paul G. Morrissey, for defendant.
    February 9, 2004
   MILLER, J.,

The matter currently before the court for decision is the preliminary objections filed by the plaintiff to the defendant’s response to the plaintiff’s objection to the defendant’s notice of intent to serve subpoena on an expert engineering consultant. The complaint concerns the concrete floor of a 589,818 square foot warehouse that plaintiff paid defendant over $20 million to construct for plaintiff’s corporate parent’s use. It is averred that shortly after the floor was poured in the summer of 1999 it began, among other things, cracking, spalling and curling. Two issues have been raised by the plaintiff via preliminary objections: one procedural, and the other substantive. The procedural issue concerns the implementation of Pa.R.C.R 4009.21(d)(1) while the substantive issue concerns the application of Pa.R.C.P. 4003.5(a)(3). We shall discuss the procedural issue first and then the substantive. However, after full review of this matter, we hold that the preliminary objections to the defendant’s subpoena are sustained for the ensuing reasons.

Defendant via notice of intent to serve subpoena seeks discovery of an engineering consultant group and one of its associates who had been retained by the plaintiff’s corporate parent, OfficeMax. Plaintiff is a wholly owned subsidiary of OfficeMax. An OfficeMax executive contacted and paid the expert to conduct an examination and prepare a report on the concrete floor. A report dated April 15,2002, was produced during discovery and it is marked as exhibit “A” in the defendant’s response to the plaintiff’s objection to defendant’s notice of intent to serve subpoena. Plaintiff objects to the subpoena asserting that the expert “was retained by legal counsel for plaintiff in anticipation of litigation between plaintiff and defendant.” Plaintiff later in the preliminary objections admits that the expert was contacted by an OfficeMax executive rather than counsel on the plaintiff’s behalf, whereupon in February of 2002 the professional engineer of the expert engineering consultant group visited the warehouse, examined the floor, and generated the report. The defendant now via subpoena desires to secure further information from the engineering consultant group and the associate who prepared the report. Secondly, plaintiff objects that after having reviewed the expert report with counsel, plaintiff will not call the consulting group or any of its associates at trial. As such, discovery is precluded under Pa.R.C.P. 4003.5(a)(3). Defendant counters that OfficeMax is not a party and the rale only protects from discovery the facts known or the opinions held by an expert who has been retained or specially employed by another party in anticipation of litigation or preparation of trial and who is not expected to be called as a witness at trial. Ergo, the expert is not protected because the corporate parent is not a party even though the plaintiff is a wholly owned subsidiary of the corporate parent who retained and paid the expert on the plaintiff’s behalf in anticipation of litigation.

Pa.R.C.P. 1028(a)(2) states that preliminary objections may be filed by any party to any pleading where the pleading fails to conform to law or rale of court. Pa.R.C.P. 4009.21(d)(1) reads in relevant part:

“If objections are received by the party intending to serve the subpoena prior to its service, the subpoena shall not be served. The court upon motion shall rale upon the objections and enter an appropriate order.”

Having the facts in mind with regards to the notice of intent to serve subpoena on the expert are important. On November 5, 2003, the defendant served its notice of intent to serve subpoena on the plaintiff’s expert. On November 26, 2003, plaintiff filed its objections to defendant’s notice. On December 2,2003, defendant filed a “response” to plaintiff’s objections pursuant to Pa.R.C.P. 4009.21. However, neither party motioned the court pursuant to subparagraph (d) of this rule. Plaintiff contends that without a motion, plaintiff’s objections stand and the defendant is precluded from serving the subpoena on the expert. Now, rather than presenting its own motion to have the court rule upon its objection to the defendant’s notice of intent to serve subpoena, the plaintiff filed the instant preliminary objections under date of December 23, 2003. Plaintiff asserts it is the objecting party’s responsibility to present a motion to rule upon the objection in accordance with Pa.R.C.P. 4009.21(d)(1) at or about the time of filing the objection. As such, plaintiff asks the court to strike defendant’s response as procedurally defective and refuse to consider the defendant’s arguments cited in the “defendant’s response” and supporting memorandum. In the alternative, plaintiff argues that even if this court considers the merits of defendant’s response, the court should reject the defendant’s argument and sustain plaintiff’s objection to the notice of intent to serve subpoena.

Pa.R.C.P. 4009.21(d)(1) does not direct any particular party to file the motion after an objection is lodged thereby implying that either party may praecipe the motion to the court for ruling. This procedure affords either party the flexibility to decide whether they desire to pursue or prevent the discovery after the objections are filed. As such, we hold that the defendant’s response to the objections is not improper. But, without a motion, plaintiff is correct that plaintiff’s objection precludes discovery of the expert until a motion is presented to the court for ruling. We hold further that the procedural preliminary objection to the defendant’s response is without merit, but rather than dismissing the preliminary objections on procedural grounds, we treat the preliminary objections as plaintiff’s motion to review its objection to defendant’s intent to serve the subpoena. Next, the substantive issue is governed by Pa.R.C.R 4003.5(a)(3) which reads in relevant part:

“A party may not discover facts known or opinions held by an expert who has been retained or specially employed by another party in anticipation of litigation or preparation for trial and who is not expected to be called as a witness at trial... or except on order of court as- to any other expert upon a showing of exceptional circumstances under which it is impracticable for the parties seeking discovery to obtain facts or opinions on the same subject by other means,....” (emphasis added)

The definitional Rule 76 of Pa.R.C.P. does not define “party.” The appellate rules also do not define the term “party.” However, the note following the definitional rule, Pa.R.A.P. 102, states that the rule is based on a statute, title 42 Pa.C.S. § 102, which defines “party” as “a person who commences a matter or against whom relief is sought in a matter. The term includes counsel for such a person who is represented by counsel.” A strict reading of the rule precludes the discovery of the expert where the expert has been retained or specifically employed by “another party” in anticipation of litigation when the expert is not expected to be called at trial. The defendant concedes that the expert was retained in anticipation of litigation and that the plaintiff will not call the expert at trial. However, the defendant asserts that since the entity who retained and paid the expert on the plaintiff’s behalf is not a party, the discovery is permitted. The purpose of the rule is always paramount in determining its application. The rule’s purpose is to allow parties the opportunity “to consult freely and openly with experts by minimizing the likelihood that the information provided to an expert and the opinions that the expert forms may be used against any party who obtained or specially employed the expert.” Goldblum v. Insurance Company of North America, 11 D.&C.3d 354 (1979). Also, see Standard Pa. Practice, volume 9, §4003.5(a)(7), pp. 205-206. This rationale is also consistent with the aim of Pa.R.C.P. 4003.5(a)(1) of discouraging the lazy litigant from building his or her own case upon the preparation of a more diligent opponent. See Standard Pa. Practice, supra at p. 200. In this court’s mind, by precluding discovery of an investigating expert not called at trial, the rule may be encouraging expert witness shopping by one with the economic means to find the favorable expert thereby encouraging litigation. However, this latter intent is not discussed by the commentators in Standard Pa. Practice, supra, and is usurped by the reasoning enunciated in Standard Pa. Practice and by Judge Wettick in Goldblum, supra.

In its objection to the notice to serve subpoena, plaintiff asserts in paragraph 2 of the objection that the expert “was retained by legal counsel” for plaintiff. The defendant in its response denied that plaintiff retained the expert as already discussed. Later in the instant preliminary objections, plaintiff does not reassert that counsel for plaintiff retained the expert. If counsel for plaintiff had retained the expert, then clearly the objection is sustainable because plaintiff’s counsel is within the definition of “party” as set forth in the Pennsylvania Rules of Appellate Procedure. However, this averment is not set forth in plaintiff’s preliminary objections, so we must further analyze the issue.

Given the established purposes for the rule, it appears to this court that a broader reading of the undefined meaning of “party” under the Pennsylvania Rules of Civil Procedure is appropriate under the circumstances, especially here where the plaintiff is a wholly owned subsidiary of the parent corporation whose executive procured the investigating expert for plaintiff. Arguably, the parent corporate entity in this case, OfficeMax, may be considered a real “party” in interest pursuant to Pa.R.C.P. 2002(b) which provides in relevant part:

“A plaintiff may sue in his or her own name without joining as plaintiff or use-plaintiff any person beneficially interested when such plaintiff... (2) is a person with whom or in whose name a contract has been made for the benefit of another.”

Plaintiff appears to be a subsidiary corporation whose purpose is to benefit the parent corporation by implementing construction projects such as the one in litigation here for the benefit of its parent corporation. It appears to this court that a broader interpretation of the term “party” is warranted to support the purposes of Pa.R.C.P. 4003.5(a)(3) especially under the unique facts set forth in the pleadings in this case taken in light of the definition of real parties in interest and the exceptions permitted under Pa.R.C.P. 2002(b). Consequently, we enter the following order.

ORDER

And now, February 9,2004, pursuant to Pennsylvania Rule of Civil Procedure 4009.21 and 4003.5(a)(3), the plaintiff’s preliminary objections to defendant’s notice of intent to serve subpoena on I. A. Lewin P.E., and Associates are sustained.


source: Caselaw Access Project

author: GRINE, J.,

license: Public Domain

text:
    Muir v. Alexander

      C.P. of Centre County,
    no. 2003-898.

      Joseph P. Green, for plaintiff.

      Scott C. Etter, for defendant.

      Elliot A. Strokojf, for intervenor.
    January 26, 2004
   GRINE, J.,

Intervenor/appellant Carol J. Belas filed an appeal from this court’s order of November 5, 2003, along with a supersedeas. The order granted plaintiff Muir et al.’s petition for review of public documents, the subject of which is an employment agreement between defendant and intervenor. The appeal has been forwarded to the Commonwealth’s Superior Court, and intervenor has filed this supersedeas to prevent disclosure of the document until the appeal has been resolved. During the course of these proceedings, this court was given a copy of the document to review on an in-camera basis.

Petitioner/intervenor alleges that the documents to be disclosed by this court’s November 5 order are from her confidential personnel files maintained by defendant, the Bald Eagle Area School District (BEASD), and that releasing these documents will violate her right to privacy and cause her irreparable harm. Plaintiff claims that these documents are public records to be disclosed under the provisions of the Pennsylvania Right to Know Law, 65 P.S. §66.1 et seq., as amended by Act 100 of 2002, and opposes the supersedeas.

In order to grant a supersedeas, or stay, during the pen-dency of an appeal, the petitioner must show four factors: (1) a strong showing that he is likely to prevail on the merits; (2) without the requested relief he will suffer irreparable harm; (3) the issuance of a stay will not substantially harm other interested parties in the proceedings; and (4) issuance of a stay will not adversely affect the public interest. Pa. Public Utility Commission v. Process Gas Consumers Group, 502 Pa. 545, 467 A.2d 805 (1983).

The court finds that petitioner/intervenor has not shown these factors to the satisfaction of the court to merit granting the supersedeas. The court has already found that the document at issue is a public document available for disclosure. Additionally, plaintiffs cite a recent case indicating that a settlement agreement is a public record for purposes of the Right to Know Law. Tribune-Review Publishing Co. v. Westmoreland Cty. Housing Authority, 574 Pa. 661, 833 A.2d 112 (2003). It is believed through information obtained from partial disclosure of the document at issue that the document is a settlement/termination agreement between defendant and petitioner/inter-venor. Therefore, this court does not believe that petitioner/intervenor has made a strong argument that she will prevail on the merits of this case on her appeal.

Furthermore, petitioner/intervenor has not shown that she will suffer irreparable harm if the document’s contents are revealed. In fact, petitioner/intervenor has not given any statements in testimony at any of the hearings held in this matter that would suggest that she will suffer harm to her reputation or character if the document is disclosed.

For these reasons, the court denies petitioner/inter-venor’s petition for supersedeas.

ORDER

And now, January 26, 2004, for the reasons stated above, it is ordered and decreed that petitioner/interve-nor Belas’ petition for supersedeas is hereby denied.


author: NEALON, J.,

text:
    Beecham v. American Life and Casualty Insurance Co.

      C.P. of Lackawanna County,
    no. 98 CV 3147.

      Kimberly D. Borland, for plaintiffs.

      Mark H. Scoblionko, for defendant.
    December 19, 2003
   NEALON, J.,

Defendant has filed a motion for partial summary judgment with respect to plaintiffs’ claims based upon unintentional conduct and submits that an earlier summary judgment ruling found the plaintiffs to be contributorily negligent as a matter of law. Defendant has also presented another motion for summary judgment seeking to reopen an economic loss doctrine issue which was previously rejected by two other judges of this court. Since the prior summary judgment ruling never adjudged the plaintiffs to be contributorily negligent, nor has the defendant identified an intervening change in the controlling law warranting the reversal of the law of the case on the economic loss doctrine, both motions will be denied.

I. FACTUAL BACKGROUND

Plaintiffs William D. Beecham and Dorothy V. Beech-am have commenced this action against defendant American Life and Casualty Insurance Co. seeking to recover damages as a result of their loss of an annuity policy investment. On November 11, 1994, the Beechams purchased an annuity contract with American Life through its agent Patrick Idaspe for $176,243. American Life reportedly discovered that Idaspe had engaged in misconduct with another company, Beneficial Standard, involving his creation and use of fraudulent company letterhead. Therefore, by letter dated June 12,1995, American Life notified Idaspe that his agency contract would be terminated on June 27,1995. Additionally, an insurance wholesaler who acted as Idaspe’s supervisor, Jack D. Aiken, forwarded a letter to American Life in which he recommended that Idaspe’s annuity contract transactions be placed on “a watch list” by American Life.

However, American Life never informed the Beech-ams of its investigation and termination of Idaspe based upon his fraudulent conduct. Following his termination by American Life, Idaspe convinced the Beechams to cancel their annuity contract with American Life and transfer their funds to another company. The Beechams followed Idaspe’s advice, and although they originally received periodic statements from an entity identified as Equity Service Company, those statements later ceased thereby prompting the Beechams to contact Idaspe. Regrettably, the Beechams discovered that Idaspe had committed suicide and that the proceeds from the annuity policy had been lost.

The Beechams maintain that despite American Life’s knowledge of Idaspe’s fraudulent activity, it failed to notify its policyholders such as the Beechams regarding Idaspe’s termination. The Beechams further contend that American Life neglected to heed Jack D. Aiken’s recommendation that Idaspe’s business be placed on “a watch list.” According to the Beechams, if they had been so notified by American Life, they would not have liquidated their annuity policy with American Life and reinvested the proceeds with Idaspe.

The Beechams’ complaint asserted causes of action for negligence (Count I), common-law fraud and deceit (Count II), violation of the Unfair Insurance Practices Act (Count III), violation of the Unfair Trade Practices and Consumer Protection Law (Count IV), breach of fiduciary duty (Count V) and recovery of punitive damages (Count VI). American Life filed preliminary objections in which it demurred “to the entire complaint” on the grounds that it did not owe the Beechams “a legal duty as would be required to support a viable cause of action” and that the complaint failed “to make out a viable basis for relief in that it is essentially a negligence claim for economic damages only, without injury to person or property, and such a claim is not recognized under Pennsylvania law.” (See Dkt. entry no. 6.) American Life also presented individual demurrers to Counts II, III, IV, V and VI of the complaint, as well as paragraphs 44 and 45 demanding damages “for physical harm and pain, mental anguish, and humiliation” and “loss of enjoyment of life.” (Id., pp. 2-6.) In its accompanying brief, American Life cited Spivack v. Berks Ridge Corp. Inc., 402 Pa. Super. 73, 586 A.2d 402 (1990), and Aikens v. Baltimore and Ohio Railroad Co., 348 Pa. Super. 17, 501 A.2d 277 (1985), in support of its contention that the economic loss doctrine bars any recovery in this case since no cognizable negligence action can exist which results solely in economic damages unaccompanied by physical injury or property damage. (Dkt. entry no. 7, p. 18.)

By order dated September 2, 1999, Senior Judge Jay W. Myers (specially presiding) sustained American Life’s demurrer to the negligence and Unfair Insurance Practices Act claims and paragraphs 44 and 45 seeking recovery for pain and suffering, mental anguish, humiliation and loss of enjoyment of life. However, Judge Myers overruled the preliminary objections in all other respects, including American Life’s objections predicated upon the alleged absence of a legal duty, the applicability of the economic loss doctrine, and the legal viability of the Beechams’ claims for fraud and deceit, breach of fiduciary duty, violation of the UTP/CPL and punitive damages. (Dkt. entry no. 13.)

After the parties conducted discovery, American Life filed a motion for summary judgment on April 1, 2002, requesting the dismissal of the remaining claims for fraud and deceit, breach of fiduciary duty, violation of the UTP/ CPL and punitive damages. (Id., no. 22, ¶¶34~38.) American Life’s supporting brief renewed its earlier challenges premised upon the purported absence of a legal duty or causal connection, (id., no. 20, pp. 12-25), the application of the economic loss doctrine (id., pp. 25-26), and the validity of the Beechams’ legal theories for fraud and deceit, breach of fiduciary duty, violation of the UTP/ CPL and punitive damages. (Id., pp. 26-36.)

By memorandum and order dated January 17, 2003, Judge Carmen D. Minora concluded “that material questions of fact exist and that each count of the complaint is appropriate for submission to a jury.” Hence, Judge Mi-nora denied American Life’s motion for summary judgment “on all bases.” (Dkt. entry no. 28, p. 14.) In his comprehensive analysis of the parties’ legal duty issue, Judge Minora remarked:

“This court finds that American did owe the Beechams a duty to disclose based upon the above referenced real estate scenario [in Bortz v. Noon, 556 Pa. 489, 502, 729 A.2d 555, 562 (1999)]. American had access to Mr. Idaspe’s clients, they knew of his allegedly deceptive practices and they certainly knew of his termination; American was clearly in a better position than were the Beechams. The Beechams are not without some degree of fault, they too had a responsibility to verify Mr. Idaspe’s credibility, however, from the instant facts, it appears as though American should have disclosed whatever information they had to Mr. Idaspe’s clients, particularly his termination....

“An annuity policy carried by a particular company requires more attention and input than does a life insurance policy. While carrying an annuity policy for the benefit of its recipients, the company must exercise its best judgment in determining how to protect and increase the recipients’ investment. This court believes that this distinction mandates a closer relationship between the beneficiary of an annuity and the company carrying that annuity than is mandated between an insured and the insurance company; the annuity carrier must act for the benefit of the policyholder. As such, we find that a fiduciary relationship does exist when an annuity, rather than a life insurance policy, is involved.” (Id., pp. 11-12.)

Following Judge Minora’s denial of American Life’s motion for summary judgment, American Life presented an application seeking to have Judge Minora certify his ruling for an interlocutory appeal pursuant to Pa.R.A.P. 1311(b) and 42 Pa.C.S. §702(b). On February 13, 2003, Judge Minora denied American Life’s request for certification of an interlocutory order for appeal. (Id., nos. 29-31.) Approximately two weeks later, American Life filed the instant motion for partial summary judgment on February 28, 2003. (Id., no. 33.) Before the Beech-ams had an opportunity to respond to that motion, American Life filed an additional motion for summary judgment on April 21, 2003. {Id., no. 38.) By notice dated July 16, 2003, the court administrator assigned American Life’s motions to the undersigned for oral argument on October 29, 2003.

The gravamen of American Life’s motion for partial summary judgment is that Judge Minora allegedly found the Beechams contributorily negligent as a matter of law by virtue of the above-quoted paragraphs of his memorandum dated January 17, 2003. Specifically, American Life submits that “[a]s a result of the aforesaid finding of law by Judge Minora, plaintiffs are culpable of contributory negligence as a matter of law.” (Id., no. 33, ¶4.) American Life posits that since the Comparative Negligence Act applies only to actions “for negligence resulting in death or injury to person or property,” 42 Pa.C.S. §7102(a), any contributory negligence by the Beechams operates as a total bar to any recovery, except for claims based upon intentional, wanton, willful or reckless conduct. (Id., ¶¶5-6.)

American Life’s third motion for summary judgment, which was filed on April 21, 2003, renews its economic loss doctrine arguments which were previously considered and rejected by Judge Myers and Judge Minora. American Life contends that the holding in Adams v. Copper Beach Townhome Communities, 816 A.2d 301 (Pa. Super. 2003), which was issued one week after Judge Minora’s ruling constitutes an intervening change in the controlling law warranting the grant of summary judgment. In that vein, American Life asserts that the Adams court “altered the law in this Commonwealth and has ruled that the economic loss doctrine bars claims based on fraud, intentional conduct, or statutory fraud under the Unfair Trade Practices and Consumer Protection Law.” (Dkt. entry no. 38, ¶5.) Thus, American Life once again seeks the dismissal of all claims in this matter. (Id., ¶¶7-9.) The Beechams have submitted a brief in opposition to the summary judgment motions and American Life has filed an initial brief, “supplemental brief,” “second supplemental brief’ and “third supplemental brief.” (Id., nos. 34-35, 39-40, 42.) Following the completion of oral argument on October 29, 2003, this matter was submitted for a decision.

II. DISCUSSION

(A) Standard of Review

Summary judgment is appropriate only where there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Phillips v. Cricket Lighters, 841 A.2d 1000, 1004 (Pa. 2003). When considering a motion for summary judgment, the record must be viewed in a light most favorable to the non-moving party with all doubts as to the existence of a factual issue being resolved against the movant. Federal National Mortgage Association v. Citiano, 834 A.2d 645, 647 (Pa. Super. 2003). Summary judgment may be granted only if it is clear and free from doubt that the moving party is entitled to judgment in its favor. Brotech Corp. v. Delmarva Chemicals Inc., 831 A.2d 613, 615 (Pa. Super. 2003); Ryan v. Asbestos Corp. Ltd., 829 A.2d 686, 688 (Pa. Super. 2003).

(B) Contributory Negligence Defense

The Comparative Negligence Act, 42 Pa.C.S. §7102, applies only to negligence actions which result in death or injury to person or property and is inapplicable to negligence claims involving purely monetary loss which is unaccompanied by personal injury or property damage. Gorski v. Smith, 812 A.2d 683, 701-702 (Pa. Super. 2002) (reargument denied, January 7,2003); Rizzo v. Michener, 401 Pa. Super. 47, 53-54, 584 A.2d 973, 976 (1990). If the Comparative Negligence Act does not apply due to the absence of personal injury or property damage, the parties revert to the doctrine of contributory negligence which bars recovery if the plaintiff’s negligence has contributed in any way to the economic loss. Wescoat v. Northwest Savings Association, 378 Pa. Super. 295, 302-303, 548 A.2d 619, 623 (1988). It is undisputed that the Beechams have not suffered personal injury or damage to tangible property such that 42 Pa.C.S. §7102 does not govern their claims. American Life submits that Judge Minora found the Beechams contributorily negligent as a matter of law as a result of which they are precluded from recovering damages except for intentional or wanton conduct. See Hutchison ex rel. Hutchison v. Luddy, 163 A.2d 826, 848 (Pa. Super. 2000) (when willful or wanton misconduct is involved, contributory or comparative negligence should not be applied), appeal denied, 567 Pa. 743, 788 A.2d 377 (2001).

Contrary to American Life’s contention, Judge Minora did not expressly find the Beechams to be contributorily negligent. In fact, the issue of the Beechams’ alleged negligence was not even raised by American Life’s first motion for summary judgment and, as such, would not have been an appropriate subject for determination via the summary judgment ruling. See Rogers v. Williams, 420 Pa. Super. 396, 400, 616 A.2d 1031, 1033 (1992) (a trial court may not raise a defense sua sponte on behalf of a party and enter summary judgment on that basis). More importantly, in light of the contributory negligence issue raised by American Life in its motion for partial summary judgment, Judge Minora has filed an “Order of clarification” on this date confirming beyond any doubt that his memorandum “never indicated that plaintiffs were culpable of contributorily negligent conduct as a matter of law nor were plaintiffs judicially determined to be at fault which could arguably require a threshold finding of fact within the sole province of a jury’s fact-finding responsibility.” (Dkt. entry no. 44, ¶8.) As Judge Minora has aptly noted in his clarification order, “[wjhile the plaintiffs had a responsibility to verify Mr. Idaspe’s credibility, the best information for making an intelligent judgment as to Mr. Idaspe’s credibility was knowingly and intentionally withheld from plaintiffs and all of Mr. Idaspe’s other clients by the defendant. Thus, plaintiffs were denied their best chance to judge the deceased Mr. Idaspe’s credibility.” (Id., ¶11.) See also, Gorski, 812 A.2d at 703 (“[i]t is not contributory negligence to fail to guard against the lack of ordinary care by another.”)

There may be a judicial declaration of contributory negligence “only in clear cases where the facts are indisputably fixed and there can be no reasonable doubt as to the inferences properly to be drawn from them.” Sargeant v. Ayers, 358 Pa. 393, 397, 57 A.2d 881, 883 (1948). If there is any evidence upon which reasonably minded individuals might disagree as to whether the plaintiff was chargeable with negligence which contributed to the ultimate loss, then the question of such contributory negligence is for the jury, not the court, to determine. Heffernan v. Rosser, 419 Pa. 550, 555, 215 A.2d 655, 658 (1966); Hawthorne v. Dravo Corp., Keystone Division, 313 Pa. Super. 436, 445, 460 A.2d 266, 270 (1983). Judge Minora’s reference to the Reechams’ responsibility was, at most, explanatory dictum in his legal duty analysis, (see n. 1, supra), and was never intended to constitute a conclusive finding of contributory negligence. Inasmuch as Judge Minora has clearly stated that he did not make such a finding of contributory negligence, American Life’s motion for partial summary judgment will be denied.

(C) Economic Loss Doctrine

In its other motion for summary judgment, American Life seeks to revisit the economic loss doctrine arguments which were previously rejected by Senior Judge Myers and Judge Minora. Under the coordinate jurisdiction rale, a judge involved in the later phases of a case generally should not reopen or entertain motions which have been decided by another judge of the same court at an earlier stage of the case. Zane v. Friends Hospital, 575 Pa. 236, 836 A.2d 25, 29 (2003); Argenta, 104 Lacka. Jur. 430, 443 (2003). Departure from this rule is allowed only in exceptional circumstances such as when there has been an intervening change in the controlling law or facts, Rivera v. Home Depot, 832 A.2d 487, 491-92 (Pa. Super. 2003), or the prior holding was clearly erroneous and would create a manifest injustice if followed. Zane, su pra, 836 A.2d at 29; Safe Harbor Water Power Corp. v. Williams, 825 A.2d 733, 741 (Pa. Commw. 2003).

Generally, the “economic loss doctrine” prohibits plaintiffs from recovering in tort for economic losses which flow only from a contract. Debbs v. Chrysler Corp., 810 A.2d 137, 164 n.32 (Pa. Super. 2002), appeal denied, 574 Pa. 742, 829 A.2d 311 (2003). In Aikens, supra, the Superior Court concluded that recovery would not be allowed in a negligence action for purely economic loss that was not accompanied by physical injury or damage to tangible property. In so holding, the Aikens court specifically held that “[t]he reason a plaintiff cannot recover stems from the fact that the negligent actor has no knowledge of the contract or prospective relation and thus has no reason to foresee any harm to the plaintiff’s interest.” Aikens, 348 Pa. Super. at 21, 501 A. 2d at 279. Instantly, American Life had knowledge of the annuity contract and business relation between the Beechams and Idaspe, and after it was notified of Idaspe’s fraudulent conduct, American Life arguably had a reason to foresee potential harm to the Beechams’ interest. Presumably for that reason, American Life’s economic loss doctrine arguments were rejected by Senior Judge Myers and Judge Minora.

American Life asserts that the holding in Adams reflects a substantial change in the controlling law and warrants departure from the coordinate jurisdiction rule. According to American Life, Adams held “that the economic loss doctrine bars claims based on fraud, intentional conduct, or statutory fraud under the Unfair Trade Practices and Consumer Protection Law.” (Dkt. entry no. 38, ¶5.) Based upon our careful reading of Adams, we do not accept American Life’s proffered interpretation of the Adams decision.

In Adams, employees of a tire manufacturing plant brought an action under the Storm Water Management Act (SWMA) against the plant’s neighboring property owners who allegedly had caused water damage to the plant which precipitated a temporary closure and resulted in lost wages for the employees. In the words of the Adams court, the “sole issue” presented for review was “whether the common-law economic loss doctrine applied to bar a statutory cause of action under the SWMA.” Adams, 816 A.2d at 304. Following its analysis of the legislative intent and express language of the SWMA, the Superior Court found that the employees’ claims for loss of wages and benefits do not fall within the scope of the term “injury” as used by the SWMA inasmuch as “[t]he language of the SWMA is clear that the legislature did not intend to provide a remedy for purely economic damages in the absence of physical injury of property damage.” Id. at 307. To that end, the Adams court cited Aikens for the proposition that “the economic loss doctrine is enforced to bar purely economic claims because the tort-feasor has no knowledge of the contract or prospective relation and, therefore, no reason to foresee any harm to the plaintiff’s interest.” Id.

Adams constitutes an amplification of the economic loss doctrine only to the extent that it applied that doctrine to claims under the SWMA. It is beyond cavil that the Beechams are not advancing claims under the SWMA, and for that reason, Adams does not justify reconsideration of the previous summary judgment ruling under the coordinate jurisdiction rule. American Life’s subsequent reliance upon David Pflumm Paving & Excavating Inc. v. Foundation Services Co., 816 A.2d 1164 (Pa. Super. 2003), is likewise misplaced since that decision does not stand for the proposition that the economic loss doctrine precludes “claims based on fraud, intentional conduct, or statutory fraud.” Quite to the contrary, the Foundation Services court distinctly stated that:

“There are no Pennsylvania Supreme Court or Superior Court cases that indicate that the economic loss doctrine bars a claim for fraudulent misrepresentation. However, for the reason stated in the text, we need not address that issue in this case.” (Id. at 1171 n.2.)

Consequently, since it still is not clear and free from doubt that American Life is entitled to judgment in its favor as a matter of law, the motion for summary judgment based upon the economic loss doctrine will once again be denied.

ORDER

And now, December 19, 2003, upon consideration of the motion for partial summary judgment of defendant American Life and Casualty Insurance Co. and the motion for summary judgment of defendant American Life and Casualty Insurance Co., the memoranda of law submitted by the parties and the oral argument of counsel on October 29, 2003, and based upon the reasoning set forth in the foregoing memorandum, it is hereby ordered and decreed that:

(1) defendant’s motion for partial summary judgment is denied; and

(2) defendant’s motion for summary judgment is denied.

      . The determination of whether a duty exists in a particular case involves the weighing of several discreet factors, including: (1) the relationship between the parties; (2) the social utility of the defendant’s conduct; (3) the nature of the risk imposed and the foreseeability of the harm incurred; (4) the consequences of imposing a duty upon the defendant; and (5) the overall public interest in the proposed solution. Sharpe v. St. Luke’s Hospital, 573 Pa. 90, 96, 821 A.2d 1215, 1219 (2003); R.W. v. Manzek, 838 A.2d 801, 807 n.9 (Pa. Super. 2003). No single factor is dispositive and a duty will be found to exist where the balance of these five factors weighs in favor of placing such a burden on a defendant. Phillips v. Cricket Lighters, 841 A.2d 1000, 1008-1009 (Pa. 2003).


author: MOTTO, J.,

text:
    Parker v. Quality Aggregates Inc.

      C.P. of Lawrence County,
    no. 11050 of 2002, C.A.

      Richard R. Morelli, for plaintiff.

      Mark L. Riley, for defendant Quality Aggregates Inc.

      Victor J. Sullivan Jr., for defendant Parker.
    December 18, 2003
   MOTTO, J.,

Plaintiff Lauri Parker was riding on a motorcycle operated by her husband, defendant Larry E. Parker, on McConnell’s Mills Road in Lawrence County. They came to a point where the road was closed and detoured due to construction by defendant Quality Aggregates Inc. A 90-degree detour was created with three large construction tires placed at the point of the detour along with a detour sign.

Somehow the motorcycle crashed. Lauri Parker then brought this action in negligence against her husband and Quality Aggregates. Mrs. Parker alleges Quality Aggregates breached its duty to travelers by not making clear demarcation of the detour sufficiently in advance of the detour and otherwise failing to insure safe passage. Quality Aggregates has filed a motion for summary judgment.

An action in negligence requires the existence of a duty and breach of said duty with said breach proximately causing injuries to the plaintiff. Cummins v. Firestone Tire & Rubber Co., 344 Pa. Super. 9, 495 A.2d 963 (1985). Quality Aggregates cedes arguendo that Mrs. Parker has sufficient proof of a duty, breach of that duty and injuries to survive a motion for summary judgment. What Quality Aggregates contests is whether Mrs. Parker has presented sufficient indications that her injuries were proximately caused by any breach of care by it. Quality Aggregates can reasonably put this argument forth because neither Mr. Parker nor Mrs. Parker, as shown by their depositions, has any recollection of the actual occurrence of the accident. Nonetheless, Mrs. Parker contends that the recollections of she and her husband just prior to and just subsequent to the accident along with what has been related to them subsequently are such that a jury could reasonably infer that the lack of advance notice, clear demarcation and manner of construction of the detour by Quality Aggregates, was the proximate cause of the accident.

Summary judgment is to be granted only where there is no genuine issue of material fact needed to establish a necessary element of the cause of action as per Pa. R.C.P. 1035.2(1) or where the plaintiff has failed to produce evidence of facts essential to the cause of action under Pa.R.C.P. 1035.2(2). Pa.R.C.P. 1035.2. In deciding a summary judgment motion, the court must view the matter in the light most favorable to the non-moving party resolving all doubts in favor of that party. Dean v. Commonwealth, Department of Transportation, 561 Pa. 503, 751 A.2d 1130 (2000), reargument denied; Hughes v. Seven Springs Farm Inc., 563 Pa. 501, 504, 762 A.2d 339, 340-41 (2000). Hence, summary judgment is to be granted only in cases clear and free from doubt. Washington v. Baxter, 553 Pa. 434, 719 A.2d 733 (1998); Kilgore v. City of Philadelphia, 553 Pa. 22, 717 A.2d 514 (1998); Feidler v. Morris Coupling Co., 784 A.2d 812 (Pa. Super. 2001); Kleban v. National Union Fire Insurance Co. of Pittsburgh, 771 A.2d 39 (Pa. Super. 2001).

Proximate cause exists where the breach of duty was a substantial factor in bringing about plaintiff’s harm but does not exist if the chain of events causing the injury is so remote a possibility that it seems highly extraordinary that the conduct in question could have brought about the harm. Dudley v. USX Corp., 414 Pa. Super. 160, 606 A.2d 916 (1992), appeal denied, 532 Pa. 663, 616 A.2d 985 (1992). The burden to establish that the plaintiff’s injuries was the direct result of the defendant’s negligence is on the plaintiff. Haldeman v. Bell Telephone Co., 387 F.2d 557 (3d Cir. 1967) (applying Pennsylvania law); Listino v. Union Paving Co., 386 Pa. 32, 124 A.2d 83 (1956). Despite proof of injury and negligence, liability cannot be established without proof that said negligence caused the injury. Macina v. McAdams, 280 Pa. Super. 115, 421 A.2d 432 (1980). Where an injury may be the result of one of several possible causes and the defendant would be hable for only one of those causes, the onus is on the plaintiff to establish that the cause for which the defendant is responsible is the proximate cause. Cohen v. Penn Fruit Co. Inc., 192 Pa. Super. 244, 159 A.2d 558 (1960). Conversely, it is also for the plaintiff to exclude other possible causes suggested by the evidence which would otherwise seem equally likely as the cause of injury. Foley v. The Pittsburgh-Des Moines Co., 363 Pa. 1, 68 A.2d 517 (1949). Where it is just as likely that the injury was the result of one cause for which defendant was responsible as another for which defendant was not responsible, the plaintiff cannot recover. Bannon v. Pennsylvania Railroad Co., 29 Pa. Super. 231 (1905).

The foregoing notwithstanding, the plaintiff is not required to disprove every other possibility that may have caused or contributed to plaintiff’s injury. McDonough v. United States Steel Corp., 228 Pa. Super. 268, 324 A.2d 542 (1974). The plaintiff need only exclude the other prospective cause fairly suggested by the evidence. Hayes Creek Country Club Inc. v. Central Penn Quarry Stripping and Construction Co., 407 Pa. 464, 181 A.2d 301 (1962).

Proximate cause is, of course, a necessary element of the cause of action, and, although the plaintiff and her husband have no recollection of the actual accident and, therefore, no eyewitness evidence of causation, they have presented sufficient circumstantial evidence of causation to present a question of material fact. Certainly other possibilities suggest themselves, possibilities such as mechanical malfunction, driver error, intoxication, some other intervening causes. However, with the deposition evidence of lack of forewarning, lack of illumination, the dark barrier of black tires, the sign made hard to read because it was leaning backwards, gravel on the road, etc., the plaintiff has presented a question of material fact as to whether a substandard detour was the most likely cause of the accident.

Presenting a question of material fact is what is required to survive a motion for summary judgment under Pa.R.C.P. 1035.2(1). Pursuant to Pa.R.C.P. 1035.2 (2), what is required for summary judgment to be denied is that responding party has produced evidence of facts essential to the cause of action. The same evidence of proximate cause presenting a question of material fact is also evidence of the facts essential for a showing of proximate cause necessary to a cause of action in negligence, e.g., lack of demarcation, completely dark barrier sign leaning back making it less discemable, gravel on the road, etc. Hence, the cause of action survives the test of both prongs of Pa.R.C.P. 1035.

Plaintiff having presented sufficient evidence to withstand summary judgment, defendant’s, Quality Aggregates, motion for summary judgment must be denied.

ORDER

And now, December 18,2003, for the reasons set forth in the accompanying opinion of even date herewith, it is ordered, adjudged and decreed that defendant’s motion for summary judgment is denied.


author: BLACK, J.,

text:
    Hirsh v. Carbon Lehigh Intermediate Unit #21

      C.P. of Lehigh County,
    no. 2002-C-2043.

      Steven A. Bergstein, for plaintiff.

      Kevin Charles-Reid, for defendant.
    December 5, 2003
   BLACK, J.,

Now, December 5, 2003, following trial without jury and oral argument, the court finds in favor of plaintiff, Steven J. Hirsh, against the defendant, Carbon Lehigh Intermediate Unit #21, in the amount of $468,947.44, plus interest at the rate of six percent per annum on the amount of $427,734.44 only from September 14, 2001, based on the following findings of fact and conclusions of law:

FINDINGS OF FACT

(1) Plaintiff, Steven J. Hirsh (landlord), is the owner of a one-story multi-use commercial building located at 7580 Kernsville Road, Lowhill Township, Lehigh County, Pennsylvania.

(2) Defendant, Carbon Lehigh Intermediate Unit #21 (tenant), is a legal entity formed pursuant to the laws of the Commonwealth of Pennsylvania, consisting of 14 member school districts in Carbon and Lehigh Counties.

(3) On August 20, 1999, landlord and tenant entered into a written lease agreement for tenant to occupy approximately 5,000 square feet of space in landlord’s aforesaid commercial building (the leased premises) for use as a public school facility known as the Lehigh Learning Adjustment School for special needs students in the member school districts.

(4) The lease was for a term of 10 years commencing October 1, 1999, or upon approval of the leased premises for use as a school or for educational requirements by the Pennsylvania Department of Labor and Industry and the Pennsylvania Department of Education, should those approvals occur at a later date.

(5) The lease called for landlord to make improvements to the leased premises in accordance with specifications provided by tenant so that the leased premises would be suitable for a school. The specifications were prepared by tenant and incorporated into the lease. Landlord was to pay the cost of the improvements, and the rent was based in part on these projected costs.

(6) The specifications did not include air conditioning. Landlord had offered to install air conditioning so long as the rent was increased to cover the extra cost, but tenant declined this proposal.

(7) Landlord completed the renovations in accordance with the specifications prior to the commencement date of the lease at a cost to landlord in excess of $100,000.

(8) Tenant took possession of the leased premises on or about January 1, 2000, and commenced operation of its Lehigh Learning Adjustment School on the site at that time.

(9) The lease provided in paragraph 33:

“By taking possession, Tenant shall be deemed to have accepted the leased premises and to have acknowledged that the same are in the condition called for hereunder.”

(10) In November 2001, tenant discovered mold in part of-the leased premises, and notified landlord of this condition.

(11) At tenant’s suggestion, landlord agreed that Jeffrey Miller of J. Miller & Sons Inc., be brought in to evaluate this condition. Mr. Miller took air samples in early November to assess the air quality. After testing the samples he reported on November 12, 2001, that the mold count in the utility room was high and that the leased premises should be vacated until remediation could be done.

(12) On November 13, 2001, tenant temporarily vacated the leased premises until the remediation could be completed. Classes were moved temporarily to other locations.

(13) Mr. Miller successfully completed the remediation by November 20, 2001, and reported at that time that the leased premises were safe for occupancy.

(14) Tenant resumed occupancy of the leased premises a week later, on November 27, 2001, after the Thanksgiving holiday weekend.

(15) Mr. Miller performed additional air quality test's in December 2001. These tests confirmed that the remediation was successful.

(16) Landlord’s property insurance carrier denied coverage of his claim for payment of Mr. Miller’s invoice for services on the ground that coverage was not provided under landlord’s policy for damage resulting from mold.

(17) In March 2002, tenant received complaints from staff members that mold had recurred in several places in the building.

(18) Tenant did not notify landlord of these complaints. Instead, without informing landlord, tenant hired Mr. Miller to perform a “complete professional and environmental study at the Lehigh Learning Adjustment School for the purpose of determining the probability of an occurrence of mold contamination.” Mr. Miller’s proposal stated, “The study will be completed and prepared for future use in a legal proceeding.”

(19) Mr. Miller’s firm engaged Robert Pfromm, a certified industrial hygienist with the firm of A2SI, and James Kern, a structural engineer of the firm of QproQ Engineering Inc., to assist in the study.

(20) Mr. Pfromm performed an indoor air quality assessment of the leased premises on April 24, 2002. He concluded that the prior remediation effort by Mr. Miller was “largely successful,” but that “the building due to its design, construction and ventilation system deficiencies continues to have fungal contamination problems as well as serious ventilation deficiencies.” He found the building “in its present state (as of the April 24,2002 assessment) to be unsuitable for use as a school building, primarily due to the ventilation deficiencies and the fungal contaminants. ”

(21) Mr. Pfromm was unable to identify the source of the fungal contaminants. He observed mold in only one room, the mental health office, on the inside of a cement block exterior wall above the suspended ceiling.

(22) Mr. Pfromm made a number of recommendations in his report to improve the air quality in the building. These included finding and removing the source of the fungal contaminants and correcting the conditions that allowed their growth; installing a forced air ventilation system with the highest efficiency filters to be replaced on a regular schedule; using only HEPA filtered vacuum cleaners; and correcting problems with the fuel tank base. He recommended that tenant discontinue use of the building if the corrective action he proposed was not accomplished.

(23) James Kern reported various concerns with the building construction, but he did not recommend that tenant discontinue use of the building. His recommendation was that there be inspections by the Pennsylvania Department of Labor & Industry, the Pennsylvania Department of Environmental Protection, and the municipal building inspector to verify compliance with the applicable codes.

(24) Mr. Miller submitted his report to tenant on May 15, 2002. The findings and recommendations of Mr. Pfromm and Mr. Kern were included as part of that report. In section V of his report Mr. Miller concluded that problems associated with the fuel tank must be corrected, and that the air quality situation “will not improve until an HVAC system is installed and the moisture problem [on the back wall of the structure] is corrected.” He opined that “if the structural and environmental problems are not attended to immediately, the use of the structure as a school should be terminated as soon as a suitable alternative building can be located.”

(25) Tenant did not inform landlord of the findings and recommendations of Pfromm, Kern and Miller, and their recommendations were not implemented.

(26) Instead, in June 2002, without advance notice to landlord, tenant’s board of directors voted to terminate the lease as of the end of that month.

(27) On June 18, 2002, tenant’s counsel on behalf of tenant sent a letter to landlord advising landlord that tenant was terminating the lease effective June 30, 2002. Tenant’s letter cited problems with the oil tank, the presence of mold, and an inadequate ventilation system as the reasons for termination.

(28) Shortly thereafter, between June 18 and June 30, 2002, tenant vacated the premises.

(29) Since June 2002 tenant has not paid any rent under the lease and has not occupied the leased premises.

(30) Under paragraph 9 of the lease, tenant was obligated to keep the premises “in a clean and safe condition.”

(31) Under paragraph 10 of the lease, tenant had the right to make additions or alterations to the premises subject to landlord’s approval, which was not to be unreasonably withheld.

(32) Prior to tenant’s letter of June 18, 2002, except for the mold problem of November 2001, which was promptly and successfully remediated, tenant had not advised landlord of any complaints about the . leased premises. Tenant had never informed landlord of any problems with the oil tank and had not complained about mold except for the November 2001 episode.

(33) Tenant’s representative discussed with landlord the desirability of adding air conditioning at various times after its occupancy commenced. However, tenant was fully aware of the lack of air conditioning when it signed the lease and understood that the cost of adding a new HVAC system would have to be absorbed by tenant through an increase in its rent.

(34) Tenant did not provide landlord with a copy of Mr. Miller’s report until after tenant had vacated the leased premises.

(35) Tenant did not provide landlord with notice of and an opportunity to cure the deficiencies referred to in Mr. Miller’s report.

(36) Landlord responded to tenant’s termination letter with his letter of August 15, 2002, in which he declared the lease terminated as of August 20, 2002, instructed tenant to surrender the premises, and stated that the rent acceleration clause was in effect.

(37) Paragraph 22(a) of the lease grants landlord the following remedies upon tenant’s default:

“Landlord shall have, in addition to all other rights and remedies available to it by law or equity, the option to pursue any one or more of the following remedies: (1) terminate this lease on three days written notice to Tenant and, upon the date specified in such notice to Tenant, this lease and all rights of Tenant hereunder shall expire and terminate, and Tenant shall thereupon surrender the premises to Landlord in the condition required herein, and Tenant shall remain liable to Landlord as herein provided; (2) to declare, upon written notice to Tenant, all sums for rent and other charges that may be due under this lease, and for the balance of the term hereof, immediately due and payable.” (emphasis in original)

(38) Paragraph 23 of the lease provides that these remedies are cumulative:

“All the remedies hereinabove given to the Landlord and remedies given to him by law and equity shall be cumulative and concurrent. No termination of this lease or the taking or recovering of the premises shall deprive Landlord of any of his remedies or actions against the Tenant for rent due at the time or which, under the terms hereof, would in the future become due as if there had been no termination, nor shall the bringing of any action for rent or breach of covenant, or the resort to any other remedy herein provided for the recovery of rent be construed as a waiver of the right to obtain possession of the premises.”

(39) Landlord did not intend by his letter of August 15, 2002, to release tenant of its obligations under the lease for future rent.

(40) The accelerated rent for the balance of the lease term amounts to $446,081.50.

(41) Under paragraph 25 of the lease, tenant was obligated to restore the leased premises upon termination “in as good condition as when tenant entered into possession, reasonable wear and tear excepted, and damage by unavoidable casualty excepted to the extent that the same is covered by Landlord’s fire insurance policy ”

(42) Tenant failed to restore the leased premises to the condition required by paragraph 25 of the lease.

(43) The fair and reasonable cost of restoring the leased premises to this condition was $11,113.00.

(44) Landlord made demand for payment of this sum in his letter of August 15, 2002, but payment has not been made.

(45) On November 26, 2002, landlord sent a second letter to tenant through his counsel, notifying tenant that landlord had secured another tenant for the leased premises and that the rents from this new tenant would reduce landlord’s damage claim against tenant.

(46) The new tenant, Image Works, began occupying the leased premises on December 1, 2002, but was granted a rent abatement for the first two months and a rent reduction for the next five months because of renovations it was making to the leased premises. The reduced rent schedule was as follows:

Month Rent Due
February 2003 $1,533
March 2003 $1,666
April 2003 $1,799
May 2003 $1,933
June 2003 $2,066
July 2003-September 2003 $2,200

(47) The new lease with Image Works is a month-to-month lease.

(48) Before taking possession, Image Works made some renovations to the leased premises, including the removal of one bathroom, the removal of some interior partition walls, the addition of doors, and a new electrical system.

(49) The leased premises could be returned to their condition of June 2002 within 30 days, if tenant desired to reoccupy the space.

(50) Landlord acknowledged in his letter of November 26, 2002, that the rent to be paid and renovations done by Image Works would mitigate to some extent the amount due from tenant to landlord under the lease. This mitigation is in the amount of $15,597.

(51) Landlord’s re-entry and re-letting of the leased premises to Image Works were for the purpose of protecting the property and mitigating the damages from tenant’s breach of lease.

(52) The parties have stipulated that tenant’s security deposit of $2,650.06 shall be credited against any amount the court finds due from tenant to landlord under the lease.

(53) Counsel fees reasonably incurred by landlord in pursuing its lease remedies amount to $30,000.

CONCLUSIONS OF LAW

(1) Tenant breached the lease by declaring in its letter of June 18, 2002, that it was terminating the lease, effective June 30,2002, and by fading to pay any rent thereafter.

(2) Tenant did not have a valid reason for terminating the lease.

(3) The occurrence of mold, though an uninsured condition, did not entitle tenant to terminate the lease under paragraph 19, which pertains to damage by fire or other casualty. The occurrence of mold in this case did not cause the leased premises to be totally or partially destroyed. Moreover, the mold problem was caused in large part by tenant’s decision not to install an HVAC system in the initial build-out of the leased premises, as landlord had suggested; and landlord was never notified and given a reasonable opportunity to correct the condition.

(4) Tenant was not entitled to terminate the lease on the ground that landlord breached an implied warranty of habitability because (a) there is no such warranty in commercial leases, (b) tenant did not notify landlord of the alleged defects and give landlord a reasonable opportunity to correct the same; and (c) tenant is responsible in large part for the mold condition because of its decision not to install an HVAC system in the initial build-out.

(5) Tenant was not entitled to terminate the lease under the principle set forth in the Restatement .(Second) of Property §5.4 because (a) tenant did not notify landlord of the alleged defects and give landlord a reasonable opportunity to correct the same; and (b) tenant is responsible in large part for the mold condition because of its decision not to install an HVAC system in the initial build-out.

(6) The surrender of leased premises may only be accomplished by the agreement of all parties to the lease agreement. Unless the landlord accepts the tenant’s surrender of the premises, the surrender does not terminate the tenant’s obligations under the lease.

(7) Whether there has been an acceptance of a tenant’s surrender is primarily a question of the landlord’s intention.

(8) The tenant has the burden of proving an acceptance of surrender by clear and convincing evidence.

(9) Landlord’s letter of August 15, 2002, was not an acceptance of surrender because it did not manifest, an intention on the part of landlord to release tenant from further obligations under the lease.

(10) Alandlord’s re-entry and re-letting of leased premises after a tenant has unilaterally vacated is not an acceptance of surrender if the landlord’s purpose is to protect the property and/or to mitigate the damages from the tenant’s breach of lease.

(11) Landlord’s re-entry and re-letting of the leased premises to Image Works were for the purpose of protecting the leased premises and mitigating the damages from tenant’s breach of lease.

(12) The renovations done by Image Works are not so inconsistent with the lease as to amount to an acceptance by landlord of tenant’s surrender of the leased premises.

(13) The lease, in paragraphs 22 and 23, permits landlord to seek alternative remedies in the event of tenant’s default, including repossession of the leased premises as well as accelerated rent for the balance of the term. However, landlord may not both exclude tenant from possession and collect accelerated rent.

(14) A landlord of a commercial lease does not have a duty to mitigate his damages upon the tenant’s default.

(15) To the extent a landlord receives mitigation, the defaulting tenant is entitled to credit.

(16) Tenant is entitled to a credit against its liability for future rents for any mitigation received by landlord, both past and future, from Image Works or other tenants of the premises during the balance of the lease term.

(17) The amount of landlord’s mitigation from February 2003, through September 2003, is $ 15,597, for which tenant is entitled to a credit.

(18) Tenant’s security deposit of $2,650.06 is also to be credited against tenant’s liability under the lease.

(19) Under paragraph 22(d) of the lease, landlord is entitled to reimbursement from tenant of counsel fees reasonably incurred by landlord in proceedings to enforce the lease.

(20)Landlord is entitled to recover from tenant the following:

Accelerated Rent $ 446,081.50
Repairs $ 11,113.00
Landlord’s Reasonable Counsel Fees $ 30,000.00
Subtotal $ 487,194.50
Less Mitigation Received through 9/30/03 $ 15,597.00
Less Tenant’s Security Deposit $ 2,650.06
Principal Amount Due as of 9/30/03 $468,947.44

(21)Under paragraph 22(c) of the lease, landlord is entitled to interest on overdue rent at the rate of six percent per annum commencing 30 days after the due date. Therefore, interest accrues on the accelerated rent (less the credits) from September 14,2002, this being 30 days after the date of acceleration.

(22) Under paragraph 22(d) of the lease, interest on the repairs and counsel fees does not accrue until the date of payment by landlord. Since there is no evidence that landlord has paid these items, no interest is due thereon.

(23) The total amount due from tenant to landlord is $468,947.44, plus interest on $427,734.44 from September 14, 2002.

(24) Upon payment of the aforesaid amount due, tenant shall be entitled to receive from landlord all rent and other consideration received by landlord from the use of the leased premises during the balance of the lease term.

(25) Upon payment of the aforesaid amount due, tenant shall be entitled (a) to re-enter the leased premises and/or (b) to assign or sublease the premises for its benefit with landlord’s consent to the assignment or sublease, such consent not to be unreasonably withheld.

DISCUSSION

A lease imposes obligations on both parties. It may not be rescinded by the decision of one party alone. Thus, a tenant cannot relieve itself of the obligation of paying rent by simply vacating the premises during the lease term and notifying the landlord that the lease is terminated. Yet that is precisely what tenant has attempted in this case. Tenant vacated the premises and with its letter of June 18,2002, declared the lease terminated as of June 30, 2002. This unilateral attempt to terminate the lease was ineffective.

Defendant contends that it was entitled to terminate the lease because of the presence of mold and other deficiencies of the leased premises. In the alternative, tenant argues that there was a surrender and acceptance of the leased premises, thereby terminating tenant’s obligations under the lease. Tenant also disputes landlord’s, right to accelerate the rent for the balance of the term since landlord has re-entered and re-let the leased premises to a third party, who has made some interior alterations. We have concluded that none of these arguments has merit.

I. Tenant’s Default

Tenant notified landlord by its letter of June 18,2002, that it was terminating the lease, effective June 30,2002, because of “the pervasive nature and extensiveness of these structurally caused non-covered casualties.” The letter describes these “casualties” as follows:

“The CLIU has been advised that the design and construction of the building as well as the ventilating systems of the leased premises are such that the existence of fungal contamination is a reoccurring [sic] phenomenon in the structure. As a result, overall air quality is not suitable on an ongoing basis for a school.

“Additionally, the CLIU has been advised that the oil fired system used to heat the premises has no ability to supply fresh air to occupied spaces and that there is no spill contamination system for the oil tank. The fuel tank is presently leaking and the type, location and shape of the tank are questionable. The CLIU has also been advised that the bank is sitting on a large block of expanded polystyrene which is structurally inappropriate and not properly ventilated.”

Significantly, tenant never notified landlord of any of these alleged defects prior to sending the termination letter. Thus, landlord was never given the opportunity to address these conditions. As a result, even if we were to find landlord responsible for these conditions, they cannot support tenant’s unilateral lease termination.

A. The Claim of an Uninsured Casualty

Tenant contends that mold is not covered by landlord’s insurance policy, and therefore that tenant is entitled under paragraph 19 of the lease to terminate the lease upon 60 days’ written notice to landlord. Paragraph 19, entitled “Damage by fire or other casualty,” establishes the rights and obligations of the parties “[i]n the event that the leased premises is partially destroyed by fire or other casualty .. ..” The language relied on by tenant is as follows:

“It is agreed, however that if Landlord’s property shall be totally destroyed, or shall be extensively damaged by an insured casualty that the damage cannot be repaired within 120 days from the date of such occurrence, or if the fire or other casualty is not covered under Landlord’s insurance policy, Landlord or Tenant may at their election terminate this lease upon written notice given within 60 days after such occurrence....”

We do not believe that the appearance of mold at the leased premises can be considered the total destruction of the property or extensive damage to the property by a casualty, within the meaning of paragraph 19. Mold may affect air quality, but the small amount observed at the leased premises did not destroy or damage any part of the physical structure itself. Therefore, paragraph 19 has no application to this case. Tenant’s reliance on this paragraph is misplaced.

Clearly, the parties could not have intended that the mere presence of mold would give either of them a right to terminate the lease. If that interpretation were to be adopted, no lease would be safe because the appearance of mold is a very common occurrence in buildings. That is the very reason why most property insurance policies contain exclusions for mold. The provisions in paragraph 19 are very typical in commercial leases; and since insurance coverage cannot usually be obtained for mold, tenant’s interpretation of this paragraph is tantamount to a warranty by landlord that mold will not appear on the premises. This is not a reasonable interpretation of the lease.

Moreover, tenant’s experts identified the lack of an HVAC system as a principal factor in the occurrence of the mold. Since tenant was offered such a system as part of the initial build-out, but declined because of the extra cost, tenant cannot now use the occurrence of mold as a basis for terminating the lease.

B. The Implied Warranty of Habitability

Tenant next contends that its actions were justified because the mold and other conditions of the property breached landlord’s implied warranty of habitability. This contention is without merit for several reasons. First, there is no such warranty in a nonresidential lease. Tenant relies on the case of Pugh v. Holmes, 486 Pa. 272, 405 A.2d 897 (1979), where the Pennsylvania Supreme Court established an implied warranty of habitability in residential leases. However, this doctrine has never been extended to a commercial lease, such as the lease in this case.

Tenant asks the court to extend the doctrine of implied warranty to this case because the leased premises were to be used as a school for children. We decline to do so because the basic rationale of Pugh simply does not apply. The decision in Pugh was based on a finding that residential tenants are at a distinct disadvantage in negotiating lease terms, and that their inferior bargaining power often compels them to accept substandard living conditions. The situation here is completely different. Tenant was represented by legal counsel in negotiating the lease; tenant provided the language for the lease as well as the specifications for the leasehold improvements to be made by landlord; tenant was well aware of the design and construction of the building; and tenant has acknowledged that the leasehold improvements were completed in accordance with its specifications. The issue of warranties in such a case is best left for negotiation between the parties, rather than imposition by judicial fiat. The parties were free to negotiate whatever warranties they felt were appropriate. In such a case there is no need to impose any implied warranties.

Furthermore, even if we were to extend the doctrine of implied warranty of habitability in this case, tenant could not rely on it. The Supreme Court expressly stated in Pugh that “to assert a breach of the implied warranty of habitability, a tenant must prove he or she gave notice to the landlord of the defect or condition, that he (the landlord) had a reasonable opportunity to make the necessary repairs, and that he failed to do so.” Id. at 290, 405 A.2d at 906.

Tenant, by its own admission, did just the opposite. Instead of giving notice to landlord of the alleged defects and giving landlord a reasonable opportunity to make any necessary repairs, tenant deliberately kept landlord in the dark. Tenant arranged for inspections of the property and received expert reports with recommendations, but never shared any of this information with landlord. It is difficult to avoid the conclusion that tenant was deliberately concealing the problems from landlord so that landlord would not take corrective action, thus allowing tenant to use these problems as an excuse for terminating the lease. There was no justification for secret inspections and secret reports. Without giving landlord notice and a chance to correct the problems, tenant is in no position to claim a breach of a warranty of habitability.

There is another reason why such a warranty does not apply here. The leased premises were improved pursuant to tenant’s specifications. The principal reason for the air quality problem is the lack of an HVAC system. Such a system was offered to tenant before and during the construction of the leasehold improvements. Tenant declined to include such a system because the extra cost would have been amortized as additional rent over the term of the lease. Therefore, if the lack of an HVAC system has rendered the building “uninhabitable,” it would be manifestly unfair to hold landlord responsible for this condition.

C. Restatement (Second) of Property §5.4

Tenant also relies on section 5.4 of the Restatement (Second) of Property, which addresses the remedies available where an unsuitable condition arises after a tenant has entered into possession of real estate. This section provides:

“Except to the extent the parties to a lease validly agree otherwise, there is a breach of the landlord’s obligations if, after the tenant’s entry and without fault of the tenant, a change in the condition of the leased property caused by the landlord’s conduct or failure to fulfill an obligation to repair, or caused suddenly by a non-manmade force, makes the leased property unsuitable for the use contemplated by the parties and the landlord does not correct the situation within a reasonable time after being requested by the tenant to do so. ” (emphasis added)

The Pennsylvania courts have not specifically adopted this section of the Restatement, but it appears to be a sound principle of law. In this case, however, it clearly does not apply. Tenant has acknowledged that it never notified landlord of any of the problems alleged in its letter of June 18, 2002. The only notice of a mold problem was in November 2001, at which time the problem was promptly addressed and remedied. As noted above, for reasons that have never been satisfactorily explained, tenant arranged for inspections and tests by outside experts without informing landlord, and then instead of asking landlord to correct the problems, tenant proceeded unilaterally to vacate the premises and terminate the lease. Hence, tenant cannot rely on section 5.4 of the Restatement.

Also, this section requires that the unsuitable condition be “without fault of the tenant.” Here it is tenant’s decision not to include an HVAC system in its specifications for the initial build-out of the leased premises that contributed substantially to the problem complained of. This is an additional reason why section 5.4 does not apply.

For these reasons, tenant had no legal justification for walking away from the lease. By its letter of June 18, 2002, purporting to terminate the lease and by its failure to pay any rent after June 2002, tenant has defaulted on the lease.

II. The Claim of Surrender and Acceptance

Tenant next contends that it has been released from any obligations under the lease by virtue of the doctrine of surrender and acceptance. The Pennsylvania Supreme Court has held that where a tenant surrenders leased property to the landlord prior to expiration of the lease term, and the landlord accepts the surrender of the premises, the tenant’s liability under the lease for further rent terminates. Ralph v. Deiley, 293 Pa. 90, 141 A. 640 (1928). This doctrine is analogous to the concept of rescission by mutual consent under contract law.

Tenant states that its letter of June 18,2002, announcing that it was terminating the lease, was a surrender of the premises to landlord, and that landlord’s response by its letter of August 15, 2002, was an acceptance of the surrender. Specifically, tenant relies on the first paragraph of landlord’s letter, which states:

“Please be advised that, pursuant to our lease agreement, paragraph 22(a), I hereby declare the lease agreement between us terminated as of August 20,2002 (must be three days after receipt) at which time this lease and all of your rights in said property shall expire and terminate and you shall surrender the premises to me in good condition as required under the lease.”

Tenant’s argument has a certain surface appeal, but it does not withstand analysis. Surrender and acceptance is a question of the intent of the parties.

“When the lessee quits the premises with an intention to give up all rights to them, and to disengage himself from liabilities springing from the contract of lease, to make his effort effectual he must procure the lessor’s assent... .” Ralph, supra at 93-94, 141 A. at 642.

The tenant has the burden of proving the lessor’s assent by clear and convincing evidence. Stonehedge Square Limited Partnership v. Movie Merchants Inc., 454 Pa. Super. 468, 475, 685 A.2d 1019, 1023 (1996), affirmed, 552 Pa. 412, 715 A.2d 1082 (1998). In this case landlord’s letter of August 15, 2002, does state in the first paragraph that the lease is terminated and calls for tenant to “surrender the premises . . . .” However, the letter goes on to demand accelerated rent for the balance of the term. Such a demand is completely inconsistent with an acceptance of the proffered surrender. Therefore, upon reading the letter in its entirety, one cannot conclude that the landlord intended to release tenant from further obligations under the lease. Had landlord intended to do so, the letter would not have contained a demand for accelerated rent.

Tenant also contends that landlord’s actions in re-letting the leased premises to Image Works, which made some interior alterations, was an implied acceptance of the surrender. Surrender may be implied when supported by evidence of actions of the landlord that would be inconsistent with the continuation of the lease. Ralph, supra at 94, 141 A. at 642. Nevertheless, if after a tenant vacates, the landlord enters the premises to protect the property, or even if the landlord sublets the premises for the tenant’s benefit to mitigate the damages, this is not a sufficient basis for implying an acceptance of the surrender of the lease. Such actions are not necessarily inconsistent with the continued viability of the landlord’s claims against the tenant under the lease.

“After a tenant vacates the property leased, the landlord has the right to reenter and take such steps as may be necessary and proper towards subletting the premises.” Kahn v. Bancamerica-Blair Corp., 327 Pa. 209, 214, 193 A. 905, 907 (1937).

The question again is one of intent, i.e., whether the landlord’s actions manifested an intent to accept a surrender of the lease, thereby releasing the tenant from any liability for future rent. Stonehedge Square Limited, 454 Pa. Super. at 475, 685 A.2d at 1023.

In this case landlord’s re-letting of the leased premises to Image Works was not adverse to tenant. On the contrary, as landlord pointed out in its letter of November 26,2002, the rent received from Image Works would reduce landlord’s damage claim against tenant. Since tenant had vacated the premises and indicated it was not going to return, it was to both parties’ advantage that a new tenant be obtained.

It should be noted that a landlord does not have a duty to mitigate damages under a commercial lease. Stonehedge Square Limited Partnership v. Movie Merchants Inc., 552 Pa. 412, 715 A.2d 1082 (1998). However, a landlord cannot be faulted for seeking to secure a new tenant to minimize the loss. Indeed, as a matter of sound public policy, landlords should be encouraged to make efforts to re-let premises where the tenant has vacated. It benefits no one for the property to lie fallow and unused. A re-letting of the property benefits both landlord and tenant, as well as third parties who may have a use for the property. Therefore, a court should not be quick to imply an acceptance of surrender from a re-letting of the premises. Such a conclusion should be reached only if the landlord’s actions are a clear manifestation of his intent to end the first lease.

In this case the re-letting was on a month-to-month basis with the new tenant making easily reversible interior alterations. If tenant should have a change of heart and wish to resume occupancy, this can be accomplished within 30 days. Thus, the re-letting for tenant’s benefit is not inconsistent with the continued viability of the lease. Nothing landlord has done clearly manifests an intent to release tenant from further obligations under the lease.

Accordingly, landlord has not accepted a surrender of the lease. The lease continues to be binding on both landlord and tenant.

III. Damages

Landlord seeks accelerated rent for the balance of the term as well as attorney fees, the cost of repairing the premises, and interest. Landlord acknowledges that tenant is entitled to credits for the security deposit and for the proceeds from landlord’s re-letting of the premises.

Tenant contends that since landlord has re-taken possession of the premises, the claim for accelerated rent conflicts with a well-established principle that a landlord cannot obtain a double recovery, i.e., both possession of the premises and accelerated rent for the balance of the term. Homart Development Co. v. Sgrenci, 443 Pa. Super. 538, 662 A.2d 1092 (1995). As the Superior Court stated in Homart:

“It is a basic tenet of our system of civil justice that a plaintiff may not obtain a double recovery for a single wrong....” Id., 443 Pa. Super. at 555, 662 A.2d at 1100.

The court noted that a double recovery was precisely what the plaintiff had obtained by way of two confessed judgments, one for possession of the leased premises and another for accelerated rent for the balance of the lease term. The court held that “a landlord must elect whether to confess judgment for possession and for all monies then due, or to confess judgment for all monies due for the entire term.. .. The landlord, however, cannot, as it did in the instant case, enter judgment for possession and for all moneys which would otherwise be due as rents through the end of the term.” Id., 443 Pa. Super. at 557-58, 662 A.2d at 1101.

Landlord seeks to distinguish Homart on the ground that the case involved confessed judgments. However, this is not a meaningful distinction. The principle of law remains the same, whether or not judgment has been confessed: a landlord may not exclude the tenant from possession of the leased premises and at the same time recover accelerated rent for the full balance of the term. If accelerated rent is paid, the tenant is entitled to possession of the premises for the balance of the term. Conversely, if the tenant is ejected from the premises prior to expiration of the term, then the landlord is not entitled to rent for the unexpired balance. Grakelow v. Kidder, 95 Pa. Super. 250 (1928).

Nor can Homart be distinguished on the ground that the lease between landlord and tenant, in paragraphs 22 and 23, explicitly authorizes cumulative remedies, including termination of the lease and the collection of accelerated rent. The lease in Homart contained very similar language. It is clear from Homart that the language of a lease cannot trump the overriding principle that there shall be no double recovery.

Lease provisions authorizing cumulative remedies are very common. They are a relic of former pleading practices. The proper interpretation of such provisions is summarized in Ronald M. Friedman, Pennsylvania Landlord Tenant Law and Practice (Bisel 3d ed. 2003), at page 98, as follows:

“The existence of cumulative remedies does not mean that the landlord, the tenant or any litigant ultimately can obtain in court two inconsistent remedies for one breach. For example, the landlord cannot have a judgment for money damages for unpaid rent of that remaining lease term and be entitled to a judgment in ejectment as well. Likewise, after a judgment in ejectment is entered, the landlord cannot continue to claim rent under the lease agreement. Cumulative remedies provide a means of seeking alternative remedies, not enforcing inconsistent remedies.” (emphasis in original)

The important distinction between Homart and the instant case is that tenant here has voluntarily relinquished possession of the property to landlord. Landlord has not sought judicial intervention to exclude tenant from the premises and is not seeking any such relief. Also, landlord has agreed to credit against the accelerated rent any rents that landlord is able to obtain from third parties for use of the leased premises while tenant is out of possession. In these circumstances there is no reason to be concerned about a double recovery. Landlord is not asking the court to award him both possession and accelerated rent. He seeks a judgment only for the accelerated rent and other damages. He has re-entered and re-let the property not to exclude tenant, but for the purpose of protecting the property and mitigating the damages.

We are well aware that there is an internal inconsistency in landlord’s letter of August 15, 2001, in which he demands a surrender of the premises in the first paragraph and then demands accelerated rent in the very next paragraph. The question remains whether this letter excluded tenant from possessing the leased premises. This is a close question, but looking at the situation realistically, we believe it did not. Tenant had already vacated the premises of its own volition, stating in its letter of June 18, 2001, that it was terminating the lease. Tenant has made no request to return. Thus, we believe that the first paragraph of landlord’s letter was not tantamount to an eviction. It did not cause tenant to leave the leased premises or to remain out of possession. Accordingly, landlord’s claim for accelerated rent does not represent a double recovery and is valid.

In reaching this conclusion, we have taken into consideration the public policy referred to earlier in favor of encouraging landlords to re-let vacant properties. As we noted, although a landlord in a commercial lease does not have a legal duty to mitigate damages by re-letting the property after a tenant vacates, it is certainly desirable from the standpoint of both landlord and tenant that mitigation efforts be made. It is also in the public interest that vacant properties be re-let instead of remaining idle. Therefore, where a defaulting tenant has voluntarily vacated leased premises without judicial compulsion, and the landlord then re-enters and re-lets the property to mitigate his loss, the landlord should not be penalized by a forfeiture of future rents under the lease unless it is clear that the collection of these rents will lead to a double recovery. There is no evidence of a double recovery here.

For all the foregoing reasons, we find that landlord is entitled to a judgment against tenant in the amount of $468,947.44 for accelerated rent, repairs and attorney fees, as itemized in conclusion of law no. 20, plus interest at the rate of six percent per annum on the balance due for accelerated rent only.

      . Plaintiff’s exhibit 2.

      . Id., 20.

      . Plaintiff’s exhibit 9.

      . Id.

      . Defendant’s exhibit 12A, 6-7.

      . Id., 7.

      . Defendant’s exhibit 12B, 2.

      . Plaintiff’s exhibit 8.

        . Id.

      . Plaintiff’s exhibit 6.

      . Plaintiff’s exhibit 2, 7.

      . Id., 7-8.

      . Id., 15.

      . Id.

      . Id., 16.

      . Id., 17.

      . Plaintiff’s exhibit 4.

      . Plaintiff’s exhibit 2, 16.

      . Id., 15.

      . Id., 16.

      . Plaintiff’s exhibit 6.

      . Id.

      . Plaintiff’s exhibit 2, 11.

      . Id., 12.