author: STEINBERG, J.,

text:
    In re C.S.

      Andrea Olsovsky, for appellee.

      Heather Gallagher, for commonwealth.
    July 24, 2012
   STEINBERG, J.,

The juvenile, C.S., has been charged with crimes that could be interpreted as those committed by a deviant sexual offender. What heinous acts has she allegedly committed: the posting to her Facebook page of the consensual sexual acts of L.C. and M.T., who are ages sixteen (16) and seventeen (17). Based upon the evidence presented at the pre-adjudicatory hearing, L.C. agreed to allow M.T. to record their sexual assignation. It appears, however, that sometime after doing so M.T. was indiscreet and sexted his recording to others. One of the recipients of the sexting was C.S., who then posted the video to her Facebook page. Comments on her Facebook page suggest that the purpose of the posting was not sexual, but an expose to subject L.C. to public criticism.

The world of the new millennium teen suggests that a significant number of them engage in sexting. The response by law enforcement has included efforts to delete the images, recommend participation in educational programs, and more frequently, prosecute under child pornography laws. Miller v. Skumanick, supra,; State v. Canal, 773 N.W.2d 528 (2009)(Conviction for disseminating obscene materials to a minor upheld where high school student sent a photograph of his erect penis to a fellow student); A.H. v. State, 949 So.2d 234 (Fla. Dist. Ct. App. 2007) (Adjudication of delinquency under child pornography law upheld where 16 year old emailed digital photos of herself and her 17 year old boyfriend naked and engaged in sexual behavior); see also In re J.P, 2012 WL 1106670, slip, op., (Ohio Ct. App. 11th Dist. 2012). Registration as a sex offender has also resulted from “sexting” prosecutions. Canal, 773 N.W.2d at 529-530.

The purpose behind the child pornography statutes has little or nothing to do with “sexting”. Section 6312 was enacted “plainly to protect children, end the abuse and exploitation of children, and eradicate the production and supply of child pornography.” Commonwealth v. Baker, 24 A.3d 1006,1036 (Pa.Super. 2011) quoting Commonwealth v. Diodoro, 601 Pa. 6, 19, 970 A.2d 1100, 1107 (2009). A number of scholars and jurists have questioned the wisdom of using laws designed to protect children from abuse by others, to punish a child for their mistake. See A.H. v. State, 949 So.2d at 239 (Padovano, J. dissenting); See also Antonio Haynes, The Age of Consent: When Is Sexting No Longer “Speech Integral To Criminal Conduct? ”, 97 Cornell L.Rev. 369, 370-371 (2012). Here, the sexual acts were all done by children. Additionally, it is ironic that the sexual conduct between L.C. and M.T. is lawful, but C.S. has been arrested, detained, and subject to placement for publishing the consensual conduct.

The Supreme Court has held that the government may criminalize the possession of child pornography. New York v. Ferber, 458 U.S. 747, 756-757 (1982) (States are entitled to greater leeway in the regulation of pornographic depictions of children). In that regard, child pornography like defamation, incitement, and obscenity is not entitled to First Amendment protections. United States v. Stevens, 130 S.Ct. 1577, 1584(2010). However, under certain circumstances, legislation designed to address, for example, “virtual child pornography”, has been held to be constitutionally overbroad. Ashcroft v. Free Speech Coalition, 535 U.S. 234 (2002)(Two provisions of the Child Pornography Act of 1996 held facially overbroad). Justice Kennedy, writing for the majority of the Court, distinguished Ferber by concluding the acts were not “intrinsically related” to the sexual abuse of children. Id. at 250. Additionally, Ferber's judgment was based upon how child pornography was made, not on what it communicated. This case reaffirmed that where the speech is not the product of sexual abuse, it falls within the protection of the First Amendment. Id.; But see United States v. Williams, 553 U.S. 285, 299 (2008)(0ffers to provide or requests to obtain child pornography are “categorically” excluded from the First Amendment).

The Commonwealth in this case has attempted to equate child pornography with sexting and/or the display of those images on Facebook. By doing so, the constitutionality of those statutes as applied to this juvenile are subject to scrutiny. United States v. Booker, 543 U.S. 220, 314 (2005) (Thomas, J. dissenting in part)(“When a litigant claims that a statute is unconstitutional as applied to him, and the statute is in fact unconstitutional as applied, we normally invalidate the statute only as applied to the litigant in question); see also Brockett v. Spokane Arcades Inc., 472 U.S. 491, 504 (1985)(The “normal rule [is] that partial, rather than facial, invalidation is the required course” such that a “statute may...be declared invalid to the extent that it reaches too far, but otherwise left intact.”)(collecting cases); see also Ferber, 458 U.S. at 773; Virginia v. Hicks, 539 U.S. 113, 119 (2003)(if a statute is found to be overbroad that will not prohibit all enforcement that reflects “legitimate state interests in maintaining comprehensive controls over harmful, constitutionally unprotected conduct. For there are substantial social costs created by the overbreadth doctrine when it blocks application of a law to constitutionally unprotected speech, or especially to constitutionally unprotected conduct”)(emphasis in original). It has been similarly held that one of the two ways that a vagueness challenge can be presented is that the language of the statute is “vague regarding the particular conduct of the individual challenging the statute.” Commonwealth v. Nesbitt, 575 A.2d 633, 635 (Pa.Super. 1990); Maynard v. Cartwright, 486 U.S. 356, 361 (1988) (“Vagueness challenges to statutes not threatening First Amendment interests are examined in light of the facts of the case at hand; the statute is judged on an as-applied basis.”); U.S. v. Mazurie, 419 U.S. 544, 550 (1975)(“[V] agueness challenges to statutes which do not involve First Amendment freedoms must be examined in light of the facts of the case at hand.”).

In Commonwealth v. Stenhach, 514 A.2d 114, 124 (Pa. Super. 1986) it was explained that challenges on vagueness and overbreadth are “closely related to infirmities which often merge conceptually and in case law. Constitutionally vague statutes proscribe activity in terms so ambiguous that reasonable persons may differ as to what is actually prohibited.... Overbroad statutes authorize the punishment of constitutionally protected conduct; where the language of the statute is not vague, but literally encompasses a variety of protected activity, it cannot be read literally. In an overbroad statute, the clarity of the language is delusive, for the language must be recast to separate proper from improper applications.” Id.', see also Commonwealth v. Barud, 545 Pa. 297, 305, 681 A.2d 162, 165 (1996); Kolender v. Lawson, 461 U.S. 352, 357-358 (1983); Kreimer v. Bureau of Police for the town of Morristown, 958 F.2d 1242, 1266 (3d Cir. 1992).

In F.C.C. v. Fox Television Stations, Inc.,_U.S._, 132 S.Ct. 2307, 2317 (2012), Justice Kennedy writing for a near unanimous court, explained that “[a] fundamental principle in our legal system is that laws which regulate persons... must give fair notice of conduct that is forbidden.... A conviction or punishment fails to comply with due process if the statute or regulation under which it is obtained ‘fails to provide a person of ordinary intelligence fair notice of what is prohibited, or is so standardless that it authorizes or encourages seriously discriminatory enforcement....’ [T]he void for vagueness doctrine addresses at least two connected but discrete due process concerns: first, that regulated parties should know what is required of them so they may act accordingly; second, precision and guidance are necessary so that those enforcing the law do not act in an arbitrary or discriminatory way.” Id. (internal citations omitted); see also Commonwealth v. Morgan, 331 A.2d 444, 445 (Pa. 1975); Stenach, 514 A.2d at 125, 127; Pringle v. Court of Common Pleas, 778 F.2d 998 (3d Cir. 1985).

A person of ordinary intelligence, including a teenager, would understand that the possession of child pornography is illegal. Teenagers would understand that the legislature enacted Section 6312 of the Crimes Code “to protect children, end the abuse and exploitation of children, and eradicate the production and supply of child pornography.” Commonwealth v. Davidson, 938 A.2d 198, 215(Pa. 2007) (Section 6312(d) criminalizing the possession of child pornography, including depictions of “nudity if such nudity is depicted for the purpose of sexual stimulation or gratification of any person who might view such depiction,” is not void for vagueness in violation of due process; common sense and human experience dictate that an individual of ordinary intelligence, not a mind reader or a genius, can identify whether a photograph of a nude child depicts nudity for the purpose of sexual stimulation or gratification).

These same teenagers, unless prosecuted, would be clueless that their conduct falls within the parameters of the Sexual Abuse of Children statute, Section 6312. Not only is sexting prevalent in their world, but it is doubtful they would connect sexting with the sexual exploitation of children. While “each image of child pornography creates a permanent record of a child’s abuse, which results in continuing exploitation of a child when the image is subsequently viewed,” sexting, like the within case, generally involves consensual sexual conduct or encounters. Davidson, 193 N.J. at 339, 939 A.2d at 219.

This conduct is also the product of teenagers lacking mature adult judgment. The Supreme Court in Miller v. Alabama, 132 S.Ct. 2455 (2012) quoting Roper v. Simmons, 543 U.S. 551, 569 (2009) reiterated that children have a “lack of maturity and an underdeveloped sense of responsibility leading to recklessness, impulsivity, and risk-taking.... Children are more vulnerable...to negative influences and outside pressures including from their family and peers; they have limited control over their own environment and lack the ability to extricate themselves from horrific, crime producing settings.... A child’s character is not as well-formed as an adult’s....” Id. (internal citations and quotations omitted). Proof of this lack of maturity is evidenced by the motivation for this phenomenon. Teenagers sext for reasons totally unrelated to the exploitation or abuse of children.

The law enforcement response to this teenage cultural relativism has been inconsistent. TheF.B.I. inanF.B.I. Law Enforcement Bulletin entitled “Sexting: Risky Actions and Overreactions” advised the law enforcement community that “[w]hile the activity associated with juvenile sexting technically may violate criminal statutes, prosecutors must use discretion, vested with their position, to confront the activity appropriately. Eveiy act violating a statute should not necessarily bring charges.” In fact, although law enforcement agencies handled almost 3,500 cases of youth-produced sexual images during 2008-2009, arrest was not typical in cases with no adults involved.

The deputy district attorney assigned to the case acknowledged that an adjudication was pursued against C.S. selectively. No aggravated circumstances existed, and the young man who sexted the sexual acts was not pursued or even interviewed. It is apparent that pursuing child pornography charges against teenagers “encourages arbitrary and erratic arrests and convictions”, which is one of the concerns addressed by the void for vagueness doctrine. Papachristou v. City of Jacksonville 405 U.S. 156, 162 (1972); Commonwealth v. Asamoah, 809 A.2d 943, 946 (Pa.Super. 2002). In light of the statistics related to “sexting”, the decision to prosecute is more likely subject to the vagaries of local law enforcement than the recognition that this type of conduct should be charged.

“The sexual abuse of a child is a most serious crime and an act repugnant to the moral instincts of a decent people.” Ashcroft v. Free Speech Coalition, 535 U.S. at 244. However, placing sexting on the same crime scale as child pornography is an overreaction by law enforcement. A law enforcement response may be appropriate under certain circumstances, but using the child pornography statutes is a “round hole/square peg” approach to enforcement. Those who are adjudicated or convicted of child pornography offenses are sexual offenders and often predators. Teenagers who engage in sexting should not face the same legal and moral condemnation.

The response to this conduct should come from the legislative branch of government. Some state legislatures are already grappling with an appropriate response. For example, Pennsylvania Senate Bill 850 creates the offense of “Cyberbullying and sexting by minors.” House Bill 815 creates “Sexting by minors.” The grading of both offenses would be misdemeanors of the second degree not the felonies the Commonwealth is pursuing in this case.

In sum, the child pornography statutes as-applied to teenage sexting or in this case, teenage Facebook posting, fails to provide a teenager of ordinary intelligence “fair notice” of what is prohibited. It also authorizes or encourages enforcement without proper guidelines or discretion.

For all the foregoing reasons, the charges against C.S. are dismissed because as-applied to her, Section 6312(a)(1) and 6312(d)(1) of the crimes code are void for vagueness.

ORDER

And now, July 24,2012, after hearing held in this matter on May 25, 2012, consideration of the memorandum of law submitted by counsel, and for the reasons expressed in this opinion;

It is hereby ordered that the juvenile petition filed in the above-captioned matter is dismissed.

      . Sexual abuse of children — dissemination of photographs, videotapes, computer depictions and films, 18 Pa.C.S. §6312(c)(1); sexual abuse of children — possession of child pornography, 18 Pa.C.S. § 6312(d)(1); criminal use of communication facility, 18 Pa.C.S. § 7512; dissemination of explicit sexual material via an electronic communication, 18 Pa.C.S. § 5903(a.l).

      . “Sexting” is the exchange of sexually explicit text messages, including photographs, via cell phone. Miller v. Skumanick, 605 F. Supp. 2d 634, 637 (M.D. Pa. 2009).

      . M.T. had not been interviewed as of May 25,2012, the date of the hearing in this matter, so the number of people he sexted is unknown.

      . Julia McLaughlin, crime and punishment: teen sexting in context, 115 Penn. St. L. Rev. 135, 137, 140-141 (2010); The nat’l campaign to prevent teen + unplanned pregnancy, sex and tech: Results from a survey of teens and young adults, (2008), available at http://www. thenationalcampaign.org/sextech/PDF/SexTech_Summary.pdf.

      . Citizens United v. Federal Election Commission, 130 S.Ct. 876, 932 (2010)(“This court has repeatedly emphasized in recent years that ‘facial challenges’ are disfavored.”).

      . Justice Sotomayor did not participate in the decision.

      . “More than a quarter of american teenagers sent nude photos of themselves electronically.” Jeanna Smialek, nude photo “sexts’ sent by one in four teens, study finds, Bloomsberg.com, July 2, 2012, available at http://www.bloomberg.com/news/2012-07-02/nude-photo-sexts-sentby-one-in-four-teens-study-finds.html.

      . One survey indicates that most teenagers send sexually suggestive content to their boyffiends/girlffiends. Other reasons cited in the survey include impressing a potential boyfriend/girlffiend, to be “fun or flirtatious”, “a joke”, and peer-pressure. While some were concerned about trouble with the law the primary reasons they were concerned about sexting was that they “might regret it later” and “potential embarrassment”. The nat’l campaign to prevent teen + unplanned pregnancy, sex and tech: results from a survey of teens and young adults, (2008), available at http://www.thenationalcampaign.org/sextech/PDF/ SexTech_Summary.pdf.

      . Art booker & Michael Sullivan, available at http.//www.fbi.gov/ stats-services/publications/law-enforcement-bulletin/july-2010/sexting.

      . Janis Wolak et. Al., how often are teens arrested for sexting? Data from a national sample of police cases, crimes against children research center, University of New Hampshire.

      . The F.B.I. in the article previously referenced, “Sexting: Risky Actions and Overreactions”, outlines various factors for law enforcement to consider in deciding to pursue charges. “Consideration of these factors can help investigators and prosecutors decide the proper course of action, such as no charges, diversion, or formal charges (sex or nonsex offense).”

      . S.B. 850,2011 Leg., 2011-2012 Reg. Sess. (Pa. 2011).

      . H.B. 815,2011 Leg., 2011-2012 Reg. Sess. (Pa. 2011). Both bills were referred to the judiciary committee.

      . Those states that are addressing sexting have not treated it with the same severity as the child pornography offenses.

      . This disposition of the sexual abuse of children charges also results in the dismissal of the charge of criminal use of communication facility which requires the use of a communication facility “to commit, cause or facilitate the commission or the attempt thereof of any crime which constitutes a felony....” Having found no felony was properly charged, this offense must also be dismissed.
      Additionally, the commonwealth charged C.S. with the offense of dissemination of explicit sexual material via an electronic communication, 18 Pa.C.S. § 5903(a.l). This court’s review of that section leads to the conclusion that it applies to an “unsolicited advertisement”, which has nothing to do with this case. Therefore, it is dismissed.


source: Caselaw Access Project

author: ZULICK, J.,

license: Public Domain

text:
    Hirshberg v. Molinelli

      Robert A. Saurman, for plaintiff.

      Brandi J. Belanger, for defendant.
    April 4, 2012
   ZULICK, J.,

Plaintiff, Ephraim Hirshberg, filed a complaint against defendant, Geraldine Molinelli, seeking partition of various properties and asserting claims of breach of contract, unjust enrichment, and constructive trust on December 28, 2011. Ms. Molinelli filed preliminary objections to Mr. Hirshberg’s complaint and a supporting brief. Both parties appeared for argument before the court on March 5, 2012, at which time counsel for Mr. Hirshberg filed his brief in opposition to Ms. Molinelli’s preliminary objections. Ms. Molinelli objected to the untimely filing of Mr. Hirshberg’s brief. She was given ten days to file a reply brief. The parties having filed their briefs and argued the matter, the case is now before the court for decision.

DISCUSSION

Ms. Molinelli raises seven objections to Mr. Hirshberg’s complaint, which will be addressed in turn.

I. Motion to Dismiss Complaint Pursuant to Pennsylvania Rule of Civil Procedure 1028(a)(6)

A party may file preliminary objections to a pleading based on the “pendency of a prior action.” Pa. R. Civ. P. 1028(a)(6). Ms. Molinelli avers that Mr. Hirshberg is seeking partition of the same real property that was the subject of his earlier complaint for divorce. Having found no common law marriage existed between the parties, this court dismissed that divorce complaint in September, 2011 and Mr. Hirshberg appealed. The appeal is currently pending before the superior court. Ms. Molinelli has asked the court to dismiss Mr. Hirshberg’s complaint or stay the proceedings due to the pendency of a prior action.

Whether there is a pending prior action is a question of law that must be determined “from an inspection of the pleadings.” Crutchfield v. Eaton Corp., 806 A.2d 1259, 1262 (Pa. Super. 2002) (quoting Davis Cookie Co. v. Wasley, 566 A.2d 870, 874 (Pa. Super. 1989)). The purpose of this defense, also known as lis pendens, is to protect the defendant from “having to defend several suits on the same cause of action at the same time.” Crutchfield, 806 A.2d at 1262 (citing Penox Techs., Inc. v. Foster Med. Corp., 546 A.2d 114, 115 (Pa. Super. 1988)). “The doctrine of lis pendens requires that the prior action be pending.” Crutchfield, 806 A.2d at 1262 (citing Norristown Auto. Co. v. Hand, 562 A.2d 902, 904 (Pa. Super. 1989)).

Three elements are required to successfully plead lis pendens. See Crutchfield, 806 A.2d at 1262 (286 Pa. Super. 2002). The burden is on the party asserting the defense to show “that the prior case is the same, the parties are the same, and the relief requested is the same.” Id. (citing Penox, 546 A.2d at 115, Pa. Super. 1988).

The three-pronged identity test must be applied strictly when a party is seeking dismissal under the doctrine of prior pending action. Alternatively, if the identity test is not strictly met but the action involves a set of circumstances where the litigation of two suits would create a duplication of effort on the part of the parties, waste judicial resources and “create the unseemly spectacle of a race to judgment,” the trial court may stay the later-filed action.

Crutchfield, 806 A.2d at 1262 (286 Pa. Super. 2002) (quoting Norristown Auto. Co., 562 A.2d at 904, 905) (internal citations omitted).

Strictly applying the identity test to the facts of this case, the second prong of the test (identity of the parties) has been met, but the first and third have not. As to prong one, the prior case at issue here is a divorce action in which Mr. Hirshberg sought divorce, equitable distribution of real and personal property, and alimony, in the case at bar, Mr. Hirshberg has averred claims for partition, breach of contract, unjust enrichment and constructive trust. Although both cases address the same real property, Mr. Hirshberg also sought personal property in the divorce action and seeks monetary damages in this action. Accordingly, the two cases lack the strict identity required for dismissal pursuant to Rule 1028(a)(6). See, e.g. Kramer v. Kramer, 394 A.2d 577, 582 (Pa. Super. 1978) (finding that “although appellee is seeking an award of support based upon the written agreement in both actions,” identity test had not been met when appellee sought alternate remedy in later action that had not been sought in earlier case and child custody issue existed in earlier case, but not in later action).

Mr. Hirshberg’s claims in the earlier divorce action and now in this case, raise a similar issue. He is attempting to establish his ownership interest in real property titled solely in Ms. Molinelli’s name. Under the law, this court has discretion to stay this case until the appeal in the divorce case is resolved. However, I decline to do so because that delay will not advance the resolution of this dispute. Much of the trial preparation that would be necessary if the divorce case is reversed and remanded will be accomplished as this case progresses. If the divorce decision is reversed, the parties’ claims will be addressed there. If there is no reversal, the dispute will be decided in this case. Accordingly, this preliminary objection will be overruled.

II. Motion to Dismiss Count I of the Complaint (Partition) Pursuant to Pennsylvania Rule of Civil Procedure 1028(a)(2) and (a)(4)

Preliminary objections to a pleading may be raised averring the “failure of a pleading to conform to law or rule of court or inclusion of scandalous or impertinent matter.” Pa. R. Civ. P. 1028(a)(2). Additionally, aparty may challenge the legal sufficiency of a pleading in the form of demurrer. See Pa. R. Civ. P. 1028(a)(4). Ms. Molinelli argues that because Mr. Hirshberg does not hold legal title to any of the properties he seeks to have partitioned, as required by Pennsylvania Rule of Civil Procedure 1553, his request for partition fails to conform to a rule or court and/or is insufficient as a matter of law. The arguments will be addressed separately.

a. Pennsylvania Rule of Civil Procedure 1553

Rule of Civil Procedure 1553 governs who may bring an action for partition of property and provides in pertinent part that “[a]n action for partition may be brought by any one or more co-tenants.” Pa. R. Civ. P. 1553. Ms. Molinelli argues that because Mr. Hirshberg has no deeded interest in the properties, he has no standing to bring an action for partition. Mr. Hirshberg counters that he has an equitable interest in the properties and there is no requirement that an individual be a deeded owner in order to be a “co-tenant” for purposes of Rule 1553.

It has long been the law in Pennsylvania that an equitable estate will support a partition action:

[a]n equitable estate is sufficient in Pennsylvania to support a partition, even at law; it is sufficient to show a clear equitable right to the relief prayed for. If the disputed titles are equitable, courts of equity will exercise jurisdiction to settle them, and will then grant final relief by way of partition under the same bill.

Appeal of Hays, 123 Pa. 110, 132, 16 A. 600, 601 (1889) (citations omitted); accord Hanna v. Clark, 189 Pa. 321, 334, 41 A. 981,982(1899).

A question presented here is whether Mr. Hirshberg’s claims of equitable title amount to an “equitable estate.” Certainly before he is entitled to partition, he must first establish his alleged right to an equitable interest in the properties which are the subject of this action. The procedural distinctions between the forms of action in assumpsit, trespass and equity have been abolished in Pennsylvania. See Pa. R. Civ. P. 1001. Mr. Hirshberg’s claim that he holds an equitable interest in Ms. Molinelli’s real property will be determined first in this litigation. If he does have such an interest, the partition rules will then be followed to divide the parties’ interests. This objection will be denied.

b. Demurrer

When filing preliminary objections in the nature of a demurrer, the defendant admits, as true, all well-pleaded facts in the complaint and any reasonable inferences to be drawn therefrom, but not the pleader’s conclusions or averments of law. See Savitz v. Weinstein, 395 Pa. 173, 174, 149 A.2d 110, 111 (1959) (quoting Narehood v. Pearson, 374 Pa. 299, 302, 96 A.2d 895, 896 (1953)); 220 P’ship v. Phila. Elec. Co., 650 A.2d 1094, 1096 (Pa. Super. 1994) (citing Preiser v. Rosenzweig, 614 A.2d 303, 305 (Pa. Super. 1992)).

A “preliminary objection in the nature of a demurrer should not be granted if the allegations of the complaint state a cause of action under any theory of law.” Packler v. State Employes’ Ret. Bd, 470 Pa. 368, 371, 368 A.2d 673, 675 (1977). In determining whether the factual averments contained in the complaint sufficiently state a cause of action, all doubts are resolved in favor of sufficiency of the complaint. See Slaybaugh v. Newman, 479 A.2d 517, 519 (Pa. Super. 1984). Accordingly, a preliminary objection will only be sustained and a complaint dismissed only in cases that are clear and free from doubt. See Cianfrani v. Commonwealth, State Employees ’Ret. Bd., 479 A.2d 468, 469 (Pa. Super. 1984).

As stated above, Mr, Hirshberg has pleaded an equitable interest in the property and has supported that allegation with specific averments in his complaint. As such, this objection will also be overruled.

III. Motion to Dismiss Count II of the Complaint (Breach of Contract) Pursuant to Pennsylvania Rule of

Civil Procedure 1028(a)(2)

Ms. Molinelli also argues that count two of Mr. Hirshberg’s complaint, the breach of contract claim, fails to conform to law or rule of court because Mr. Hirshberg includes in his complaint a breach of contract claim, but fails to state whether the contract is oral or written as required by rule of civil procedure 1019(h). Rule 1019(h) provides that “[wjhen any claim or defense is based upon an agreement, the pleading shall state specifically if the agreement is oral or written.” Pa. R. Civ. P. 1019(h). Mr. Hirshberg does not aver in his complaint whether the alleged agreement was oral or written and, accordingly, this preliminary objection will be sustained.

IV. Motion to Dismiss Count II of the Complaint (Breach of Contract) Pursuant to Pennsylvania Rule of

Civil Procedure 1028(a)(3) and (a)(4)

In addition to challenging the legal sufficiency of a pleading, a party may challenge the factual specificity of a pleading through preliminary objections. See Pa. R. Civ. P. 1028(a)(4) and (a)(3). Here, Ms. Molinelli argues that Mr. Hirshberg has failed to plead the necessary elements to establish the existence of a contract between the parties and, further, he fails to plead sufficient facts to enable her to answer the allegations in the count.

The material facts that support a pleading must be stated “in a concise and summary form.” Pa. R. Civ. P. 1019(a). The allegations “must apprise [the opposing party] of the claim being asserted and summarize the essential facts to support that claim.” Estate of Swift v. Ne. Hosp. of Phila., 690 A.2d 719, 723 (Pa. Super. 1997) (citation omitted). In determining whether the paragraphs of the complaint contain the requisite specificity, the court cannot focus on one paragraph, but must instead consider each allegation within the context of the whole complaint. See Yacoub v. Lehigh Valley Med. Assocs., P.C., 805 A.2d 579, 589 (Pa. Super. 2002).

There are three elements of a contract — (I) the parties must manifest an intent to be bound by the terms of the agreement (i.e. offer and acceptance); (2) the terms of the agreement must be sufficiently definite; and (3) there must be consideration. See Johnston the Florist, Inc. v. TEDCO Constr. Co., 657 A.2d 511, 516 (Pa. Super. 1995). “A cause of action for breach of contract must be established by pleading (1) the existence of a contract, including its essential terms, (2) a breach of a duty imposed by the contract and (3) resultant damages.” CoreStates Bank, N.A. v. Cutillo, 723 A.2d 1053, 1058 (Pa. Super. 1999) (citing Gen. State Auth. v. Coleman Cable & Wire Co., 365 A.2d 1347, 1349 (Pa. Cmwlth. 1976)). Although every contract term must not be stated in complete detail, every element must be specifically pleaded. See CoreStates, 723 A.2d at 1058 (citing Snaith v. Snaith, 422 A.2d 1379, 1382 (Pa. Super. 1980)).

Taking the complaint as a whole, Mr. Hirshberg has stated the required elements with sufficient specificity. Mr. Hirshberg avers that an agreement was reached for “the parties to purchase, repair, rent, jointly own and jointly benefit from the properties.” Compl. ¶23; he paid purchase monies for the properties in question; and Ms. Molinelli purchased the properties and titled them in her name. Additionally, Mr. Hirshberg’s averment that he has been excluded from the property by Ms. Molinelli and damaged as a result, is sufficient at this stage of pleading. Accordingly, this preliminary objection in the nature of demurrer will be overruled.

Nonetheless, Mr. Hirshberg’s failure to specify any amount of money he alleges he paid toward to purchase, maintenance, and repair of the properties significantly impairs Ms. Molinelli’s ability to respond to his complaint. The trial court “has broad discretion in determining the amount of detail that must be averred since the standard of pleading set forth in rule 1019(a) is incapable of precise measurement.” Pike County Hotels Corp, v. Kiefer, 396 A.2d 677, 681 (Pa. Super. 1978). Mr. Hirshberg’s complaint must provide enough facts to enable Ms. Molinelli to frame a proper answer and prepare a defense, which includes the amounts he alleges to have provided for the purchase and maintenance of these properties. Without this information, Ms. Molinelli cannot admit or deny receipt of those funds. Accordingly, Ms. Molinelli’s preliminary objection seeking more specificity in count two of the complaint will be sustained.

V. Motion to Dismiss Count III (unjust enrichment) Pursuant to Pennsylvania Rule of Civil Procedure 1028(a)(4)

Ms. Molinelli also filed a preliminary objection in the nature of demurrer to count three of Mr. Hirshberg’s complaint, which claims unjust enrichment. More specifically, Ms. Molinelli argues that because the parties were involved in a romantic relationship during the relevant period, Mr. Hirshberg must plead facts that establish his actions were not gratuitous and that Ms. Molinelli was unjustly enriched.

The elements of unjust enrichment are (1) benefits conferred on defendant by plaintiff; (2) the appreciation of those benefits by the defendant; and (3) the acceptance and retention of the benefits under such circumstances that would make it inequitable for the defendant to retain the benefits without payment of value. See Wiernik v. PHH U.S. Mortg. Co., 736 A.2d 616, 622 (Pa. Super. 1999) (quoting Styer v. Hugo, 619 A.2d 347, 350 (Pa. Super. 1993)). Here, Mr. Hirshberg avers in his complaint that he supplied funds to purchase, maintain, improve and repair the properties at issue, which was a benefit appreciated by Ms. Molinelli as deeded owner of the properties. Mr. Hirshberg also avers that his exclusion from the properties and Ms. Molinelli’s denial of his interest in the properties make her retention of the benefits he conferred upon her inequitable. These averments are sufficient to survive demurrer.

Ms. Molinelli argues the Mr. Hirshberg must also plead facts that his actions were not gratuitous because the parties were in a relationship at the time the alleged benefits were conferred. However, although a presumption may exist that services within a close relationship are gratuitous, Mr. Hirshberg is not required at this stage to submit evidence to overcome this presumption. Demurrer will only be sustained when it is clear that the plaintiff cannot recover under any theory of law. See Cianfrani, 479 A.2d at 469. Accordingly, this preliminary objection will be overruled.

VI. Motion to Dismiss Count III (Unjust Enrichment) Pursuant to Pennsylvania Rule of Civil Procedure 1028(a)(3)

Additionally, Ms. Molinelli argues that count three lacks sufficient factual specificity to allow her to respond and prepare a defense because Mr. Hirshberg does not specify the amount of money he alleges he has paid toward each property or when the amounts were alleged to have been contributed. As stated above, Mr. Hirshberg’s complaint must provide enough facts to enable Ms. Molinelli to frame a proper answer and prepare a defense, which includes the amounts he alleges to have provided for the purchase and maintenance of these properties. Without this information, Ms. Molinelli cannot admit or deny receipt of those funds nor defend against Mr. Hirshberg’s claim that she has been unjustly enriched. Accordingly, Ms. Molinelli’s preliminary objection seeking more specificity in count three of the complaint will be sustained.

VII. Motion to Dismiss Count IV (Constructive Trust) Pursuant to Pennsylvania Rule of Civil Procedure 1028(a)(3) and (a)(4)

Lastly, Ms. Molinelli challenges both the legal and factual sufficiency of count four of Mr. Hirshberg’s complaint, which claims the creation of a constructive trust. Specifically, Ms. Molinelli argues that Mr. Hirshberg does not plead any facts sufficient to establish (1) the necessary fraud, duress, undue influence, mistake or abuse of a confidential relationship, (2) unjust enrichment, or (3) how a constructive trust was alleged to have been established. Additionally, Ms. Molinelli argues that, generally, the complaint fails to sufficiently plead facts so that she may answer. In Pennsylvania, a constructive trust can arise in one of two ways. Under the approach adopted by the restatement (second) of trusts,

(1) Where the owner of an interest in land transfers it inter vivos to another in trust for the transferor, but no memorandum properly evidencing the intention to create a trust is signed, as required by the statute of frauds, and the transferee refuses to perform the trust, the transferee holds the interest upon a constructive trust for the transferor, if
(a) the transfer was procured by fraud, duress, undue influence or mistake, or
(b) the transferee at the time of the transfer was in a confidential relation to the transferor....

Restatement (second) of trusts § 44 (1959). “The restatement and Pennsylvania case law have imposed an additional requirement...that the fraud, duress, undue influence or abuse of a confidential relationship must be accompanied by an actual promise by the transferee to hold the property in trust and a reliance upon that promise by the transferor.” Kohr v. Kohr, 413 A.2d 687, 690 (Pa. Super. 1979) (citing Silver v. Silver, 421 Pa. 533, 219 A.2d 659 (1966) and Moreland v. Metrovich, 375 A.2d 772 (Pa. Super. 1977)).

In his complaint, Mr. Hirshberg does not allege an express promise by Ms. Molinelli to hold the properties in a trust. Accordingly, he has not stated a cause of action under this theory of constructive trust. He will be given leave to amend the complaint.

The second way a constructive trust can be created in Pennsylvania is under an unjust enrichment theory. See restatement (first) of restitution § 160 (1937). Under this approach, a constructive trust arises “[wjhere a person holding title to property is subject to an equitable duty to convey it to another on the ground that he would be unjustly enriched if he were permitted to retain it....” Id.

Here, Ms. Molinelli holds legal title to the properties and Mr. Hirshberg has averred an equitable interest in the properties on account of his alleged contribution of funds used toward the purchase, repair and maintenance of the properties. Mr. Hirshberg also avers that Ms. Molinelli, exclusively, is enjoying the benefits of the rental income from the properties, with the reasonable inference being that she has been unjustly enriched. Accordingly, Mr. Hirshberg has sufficiently pleaded constructive trust to survive demurrer and this preliminary objection will be overruled in this regard.

Nonetheless, as stated on two occasions above, Mr. Hirshberg has not sufficiently averred the factual basis for his claim to allow Ms. Molinelli to respond to the complaint and prepare her defense. Likewise, he has not stated in the complaint that the parties agreed that Ms. Molinelli would hold his interest in the property in trust. As such, the preliminary objection seeking more specificity in count four of the complaint will be sustained.

ORDER

And now, April 4, 2012, upon consideration of the preliminary objections of defendant, Geraldine Molinelli, and opposition of plaintiff, Ephraim Hirshberg, and following oral argument on March 5, 2012, it is hereby ordered as follows:

1. Ms. Molinelli’s preliminary objections no. 1, 2, and 5 are overruled;

2. Ms. Molinelli’s preliminary objections no. 3 and 6 are sustained for the reasons as stated in the accompanying opinion;

3. Ms. Molinelli’s preliminary objections no. 4 and 7 are overruled in part and sustained in part for the reasons stated in the accompanying opinion; and

4. Mr. Hirshberg is granted leave to file an amended complaint within twenty (20) days of this order.


author: YEAGER, J.,

text:
    Meredith v. Steel Dynamics Inc

      Douglas J. Olcott, for plaintiff.

      Michael P. Leahey & Daniel R. Michelmore, for defendant.
    May 4, 2012
   YEAGER, J.,

Before this court for consideration is defendant’s, Steel Dynamics, Inc., preliminary objections to plaintiffs’ complaint. For the following reasons, the preliminary objections are sustained.

I. Background

This case arises from personal injuries allegedly sustained by the plaintiff, Kenneth D. Meredith, as the result of an accident that occurred on or about May 20, 2010, at the defendant’s, Steel Dynamics, Inc., flat roll steel mill facility located in Butler, DeKalb County, Indiana. On or about April 19, 2011, the plaintiffs, Kenneth D. Meredith and Olive L. Meredith, husband and wife (hereinafter, collectively, “plaintiffs”), commenced the instant action against the defendants, Steel Dynamics, Inc. (hereinafter “SDI”) and R.A.M. Transit Lines, Inc. (hereinafter “R.A.M.”) (hereinafter, collectively, “defendants”), by filing a complaint in civil action in the office of the prothonotaiy of Butler County, Pennsylvania. In said complaint, the plaintiffs assert claims for negligence, vicarious liability, and loss of consortium, respectively, relative to the injuries allegedly sustained by the plaintiff, Kenneth D. Meredith (hereinafter “Mr. Meredith”) on or about May 20, 2010, at SDI’s flat roll steel mill facility situate at 4500 County Road 59, Butler, DeKalb County, Indiana, and the circumstances associated therewith. See generally plaintiffs’ complaint.

On or about June 23, 2011, SDI filed preliminary objections to plaintiffs’ complaint, arguing that the plaintiffs’ complaint should be dismissed pursuant to rule 1028(a)(1) of the Pennsylvania Rules of Civil Procedure because the court of common pleas of Butler County, Pennsylvania, lacks jurisdiction over SDI; alternatively, SDI stated an objection to Mr. Meredith’s claim against SDI for vicarious liability at count III of the complaint, arguing that said claim should be dismissed pursuant to Pa.R.C.P. No. 1028(a)(1) for failure to state a claim upon which relief can be granted. See generally defendant’s, SDI, preliminary objections to plaintiffs’ complaint (hereinafter “preliminaiy objections”). An argument on SDI’s preliminary objections was scheduled and heard by the undersigned on October 5, 2011. Pursuant to an order of court under date of October 5, 2011, this court overruled SDI’s objection to Mr. Meredith’s claim for vicarious liability at count III of plaintiffs’ complaint due to the fact that vicarious liability and personal negligence are recognized as separate causes of action in the Commonwealth of Pennsylvania. See paragraph numbered II of the order of court under date of October 5, 2011. The court declined to enter a decision on SDI’s primary objection, i.e., plaintiffs’ complaint must be dismissed pursuant to Pa.R.C.P. 1028(a)(1) Because this court lacks jurisdiction over SDI, until discovery could be conducted by the parties to determine the extent of SDI’s business operations within the Commonwealth of Pennsylvania, and allotted the parties sixty (60) days to complete discovery in this regard. See paragraph numbered I of the order of court under date of October 5,2011. Subsequently, the plaintiffs were allotted an additional ninety (90) days to engage in jurisdictional discovery. See order of court under date of December 1,2011.

In accordance with the orders of court dated October 5, 2011, and December 1, 2011, respectively, subsequent to the close of discovery on the issue, on or about March 15, 2012, SDI filed a motion to set briefing schedule and argument, thereby moving for further argument on their preliminary objection regarding this court’s jurisdiction over it in this action. As such, argument on the j urisdictional issue was scheduled and held before the undersigned on or about April 24, 2012, thereby necessitating the instant memorandum opinion. See order of court under date of March 15, 2012.

The first eight (8) paragraphs of the plaintiffs’ complaint identify each of the parties involved in this civil action, include general facts as to their respective residences and/or locations, and provide certain information relative to the named defendants’ jurisdictional ties to Butler County, Pennsylvania. While SDI is the only party whose jurisdictional ties to Butler County, Pennsylvania, are presently in question, we shall relay what has been stated pertaining to each party named in this matter. The plaintiffs, Kenneth D. Meredith and Olive L. Meredith, husband and wife, reside at 110 Red Rose Street, Apartment A, Butler, Butler County, Pennsylvania; thus, it is clear and uncontested that the plaintiffs are residents of Butler County, Pennsylvania. See paragraphs numbered 1 through 3, respectively, of the complaint. It is likewise clear and uncontested that the defendant, R.A.M. Transit Lines, Inc., is a Pennsylvania corporation, with a principal place of business located at 3651 South Noah Drive, Saxonburg, Butler County, Pennsylvania. Id. at paragraph numbered 6. The plaintiffs provide that the defendant, Steel Dynamics, Inc., “is a corporation organized and existing under the laws of the state of Indiana, with a principal place of business located at 7575 West Jefferson Boulevard, Fort Wayne, Indiana.” See paragraph numbered 4 of the complaint. The plaintiffs go on to allege that, “At all times complained of herein, defendant SDI regularly conducted business transactions and operations in Butler County, Pennsylvania.” Id. at paragraph numbered 5. Moreover, the plaintiffs maintain that, “At all times complained of herein, defendant [R.A.M.] was acting individually or under the control, authority and direction of defendant SDI as its agent, servant, employee, joint venturer and/or representative.” Id. at paragraph numbered 7. Furthermore, the plaintiffs claim that, “At all times complained of herein, defendants SDI and [R.A.M.] were acting for their individual and mutual financial gain.” Id. at paragraph numbered 8.

In support of their claims against the defendants, the facts of plaintiffs’ complaint are set forth as follows. The defendant, SDI, owns and operates a flat roll steel mill facility situate at 4500 County Road 59, Butler, DeKalb County, Indiana (hereinafter “DeKalb County facility”). See complaint at paragraph numbered 9. The plaintiffs allege that SDI entered into a contract with R.A.M. to provide trucking services, and specifically, to transport materials to SDI’s DeKalb County facility, “for their mutual benefit and profit.” Id. at paragraph numbered 10. The plaintiffs further contend that, “defendant SDI controlled [sic] managed and/or supervised the manner and method by which loads were to be transported under its contract with [R.A.M.], including but not limited to the time shipments were to be picked up and delivered, the routes to be taken, payment restrictions, and extensive instructions pertaining to driving, loading and unloading.” Id. at paragraph numbered 11.

On or about March 29, 2010, it is alleged that R.A.M. entered into an equipment lease agreement with Mr. Meredith “whereby [Mr. Meredith] would be retained as an owner-operator by [R.A.M.] to provide transportation services. See paragraph numbered 12 of the complaint. Subsequently, on or about May 20, 2010, the plaintiffs maintain that SDI directed R.A.M., “to transport and deliver an abrasive, hazardous dry mixture of lime, sand and aluminum shards,” to their DeKalb County facility. Id. at paragraph numbered 12. Also on or about May 20,2010, Mr. Meredith was retained by R.A.M. to transport the dry mixture of lime, sand and aluminum shards (hereinafter “lime mixture”), to the DeKalb County facility, “using a tractor owned by [Mr. Meredith] and a dry-bulk trailer and attendant equipment owned by [R.A.M.].” Id. at paragraphs numbered-13 and 14, respectively.

The complaint further alleges that on May 20, 2010, Mr. Meredith arrived at SDI’s DeKalb County facility, proceeded through a checkpoint, and made his way to a silo on the premises where he was to deliver the lime mixture. Id. at paragraphs numbered 15, 16, and 17, respectively. The plaintiffs maintain that once at the designated silo, a rubber hose with cam locks at both ends was affixed to the silo so as to enable the lime mixture to be transferred from the dry-bulk trailer into the silo. Mr. Meredith then purportedly attached the cam lock at the opposite end of the hose to the dry-bulk trailer and began the unloading process by engaging the blower equipment on the truck, which created pressure to force the lime mixture from the diy-bulk trailer, through the hose, and into the silo. Id. at paragraphs numbered 18 through 23, respectively. The plaintiffs allege that at this time, Mr. Meredith “approached the hose to evaluate the unloading process, and the cam lock unexpectedly decoupled,” causing the hose to whip “violently and forcefully spray the [lime mixture].” Id. at paragraphs numbered 24 and 25, respectively. The plaintiffs further allege that the hose repeatedly struck Mr. Meredith and sprayed him with the lime mixture, which the plaintiffs contend is a hazardous material, thus causing Mr. Meredith to suffer physical injuries. Id. at paragraphs numbered 26 and 27, respectively. The complaint goes on to state that Mr. Meredith then deactivated the truck’s blower and used the cb radio to contact personnel at the checkpoint of the DeKalb County facility. See paragraphs numbered 28 and 29, respectively, of the complaint. The plaintiffs claim that SDI personnel failed to timely render first aid treatment to Mr. Meredith, that he did not receive treatment for his injuries until emergency medical technicians arrived at the DeKalb County facility, and that this delay and “the negligent and reckless conduct” of the defendants caused Mr. Meredith to suffer “serious and permanent injuries and damages.” Id. at paragraphs numbered 30 through 36, respectively.

The foregoing allegations form the basis of the plaintiffs’ four-count complaint. See generally, complaint. In count I of plaintiffs’ complaint, Mr. Meredith asserts a claim for negligence against SDI. In part, count I alleges that SDI was negligent due to its failure to maintain the hose, as well as the components of the hose, used to unload the lime mixture from the dry-bulk trailer into the silo, and in failing to have readily available and accessible first aid treatment. Id. at paragraphs numbered 38(a) through 38(ff), respectively. Moreover, the complaint alleges that SDI was negligent due to its entrustment of the “transportation and unloading of [lime mixture] at the silo on the premises of the [DeKalb County facility] to [R.A.M.], when it knew or should have known that [R.A.M.] was inexperienced, unsafe and/or incompetent.” Id. at paragraph numbered 38(ee). In count II of plaintiffs’ complaint, Mr. Meredith asserts a claim for negligence against R.A.M., stating allegations similar to those listed under count I of the complaint. Mr. Meredith raises a claim for vicarious liability against SDI in count III of plaintiffs’ complaint, maintaining that at all relevant times “SDI was acting by and through [R.A.M.], its authorized agent, joint venturer, servant and/or directee,” and that “[R.A.M.] was acting in furtherance of the business interests of [SDI].” See paragraphs numbered 50 and 51, respectively, of the complaint. In their fourth and final count, i.e., count IV of the plaintiffs’ complaint, the plaintiff, Olive L. Meredith (hereinafter “Mrs. Meredith”), asserts a claim for loss of consortium against both SDI and R.A.M., alleging that due to Mr. Meredith’s injuries, she “has been and will be in the future deprived of the services, assistance, companionship and consortium of her husband and has suffered loss of enjoyment of the ordinary pleasures of life, including marital and family life, and has sustained damages as a result thereof.” Id. at paragraph numbered 55.

II. Rule of Law

Under the Pennsylvania rules of civil procedure, preliminary objections may be filed based upon a “lack of jurisdiction over the subject matter of the action...” as well as the “legal insufficiency of a pleading.” Pa.R.C.P. No. 1028(a)(1) andPa.R.C.P. No. 1028(a)(4). The movingparty has the burden of supporting its preliminary objections to the trial court’s jurisdiction. Schmitt v. Seaspray-Sharkline, Inc., 531 A.2d 801 (Pa. Super. 1987). Once jurisdiction is challenged, the burden of proof falls on the plaintiff to set forth facts establishing that jurisdiction in Pennsylvania is proper. Barr v. Barr, 749 A.2d 992,994 (Pa. Super. 2000). Moreover, once the plaintiff has produced some evidence to support jurisdiction, the defendant must come forward with some evidence of his own to dispel or rebut the plaintiff’s evidence. The moving party may not sit back and, by the bare allegations as set forth in the preliminary objections, and place the burden upon the plaintiff to negate those allegations. It is only when the moving party properly raises the jurisdictional issue that the burden of proving jurisdiction is upon the party asserting it. If an issue of fact is raised, the court shall take evidence by deposition or otherwise. The court may not reach a determination based upon its view of the controverted facts, but must resolve the dispute by receiving evidence thereon through interrogatories, depositions, or an evidentiary hearing. Schmitt v. Seaspray-Sharkline, Inc. at 803 (citations omitted). “[W]hen deciding a motion to dismiss for lack of personal jurisdiction, the court must consider the evidence in the light most favorable to the non-moving party.” King v. Detroit Tool Company, 682 A.2d 313,314 (Pa. Super. 1996) (quoting Scoggins v. Scoggins, 555 A.2d 1314, 1317 (Pa. Super. 1989).

When considering preliminary objections, the court must accept all material facts set forth in the complaint, as well as all inferences reasonably deducible therefrom as admitted as true, and decide whether, based upon the facts averred, recovery is impossible as a matter of law. Wiernik v. PHH U.S. Mortg. Corp., 736 A.2d 616 (Pa. Super. 1999). The pleader’s conclusions of law, unwarranted inferences from the facts, argumentative allegations, or expressions of opinion are not admitted as true. See Giordano v. Ridge, 737 A.2d 350 (Pa. Comwlth. 1999). Further, preliminary objections should only be sustained in cases that are clear and free from doubt. Pennsylvania AFL-CIO ex. Re. George v. Com., 563 Pa. 108, 757 A.2d 917 (2000). Additionally, it should be clear from all the pleaded facts that the pleader will be unable to prove facts sufficient to legally establish a right to relief. Id. As such, any doubts should be resolved by refusing to sustain the objection. Ellenbogen v. PNC Bank, N.A., 731 A.2d 175 (Pa. Super. 1999).

III. Discussion

PLAINTIFFS’ COMPLAINT MUST BE DISMISSED PURSUANT TO PA.R.C.P. 1028(a)(1) BECAUSE THIS COURT LACKS JURISDICTION OVER SDI

In their preliminary objections to plaintiffs’ complaint, SDI argues that this court lacks subject matter jurisdiction over it as SDI is an Indiana corporation, organized and existing under the laws of the State of Indiana, it has not consented to the jurisdiction of Pennsylvania courts, and the requisite minimum contacts between SDI and the Commonwealth of Pennsylvania under the long-arm statute, 42 Pa.C.S.A. § 5301 et seq., and the due process clause fail to exist. See generally, SDI’s preliminaiy objections. In their supplemental brief in support of preliminary obj ections to jurisdiction, SDI further contends that, “The record created through discovery shows that SDI has virtually no contacts with Pennsylvania, much less the “continuous and systematic” contacts required for jurisdiction.” See page numbered 2 of SDI’s supplemental brief in support of preliminaiy objections to jurisdiction (hereinafter “supplemental brief in support”).

A state may exercise in personam jurisdiction over a nonresident defendant based either upon the specific acts of the defendant that gave rise to the cause of action or upon the defendant’s general activity within the state. See Kubik v. Letteri, 532 Pa. 10, 614 A.2d 1110 (1992); Derman v. Wilair Services, Inc., 404 Pa. Super. 136,590 A.2d 317 (1991). When a state exercises personal jurisdiction over a nonresident defendant in a suit arising out of or related to the defendant’s contacts with the forum, the state is exercising specific jurisdiction. See Kubik v. Letteri, 532 Pa. 10, 614 A.2d 1110 (1992). In order for a Pennsylvania court to assert specific jurisdiction, the cause of action must arise out of the defendant’s particular acts or activities within Pennsylvania. See Efford v. Jockey Club, 2002 Pa. Super. 100,796 A.2d 370 (2002); Fidelity Leasing, Inc. v. Limestone County Bd. of Educ., 2000 Pa. Super. 244,758 A.2d 1207, 147 Ed. Law Rep. 216 (2000); Hall-Woolford Tank Co., Inc. v. R.F. Kilns, Inc., 698 A.2d 80 (Pa. Super. 1997); Derman v. Wilair Services, Inc., 404 Pa. Super. 136, 590 A.2d 317 (1991). General jurisdiction, on the other hand, exists regardless of whether the cause of action is related to the defendant’s activities in the Commonwealth, as long as the defendant’s activities are continuous and substantial, or continuous and systematic. See Derman v. Wilair Services, Inc., 404 Pa. Super. 136, 590 A.2d 317 (1991); Efford v. Jockey Club, 2002 Pa. Super. 100,796 A:2d 370 (2002); Fidelity Leasing, Inc. v. Limestone County Bd. of Educ., 2000 Pa. Super. 244, 758 A.2d 1207, 147 Ed. Law Rep. 216 (2000); Hall-Woolford Tank Co., Inc. v. R.F. Kilns, Inc., 698 A.2d 80 (Pa. Super. 1997). Thus, if in personam jurisdiction does not exist, Pennsylvania courts may still exercise general personal jurisdiction over nonresident defendants based upon the defendant’s general activity within the forum state. See Derman v. Wilair Services, Inc., 404 Pa. Super. 136, 590 A.2d 317 (1991)

Pennsylvania law provides two bases for a court to exercise in personam jurisdiction over a corporation: general or specific jurisdiction. Fletcher-Harlee Corp. v. Szymanski, 2007 Pa. Super. 310, 936 A.2d 87 (2007), appeal denied, 598 Pa. 768,956 A.2d 435 (2008) and cert. denied, 129 S. Ct. 1581 (2009). Regardless of whether general or specific in personam jurisdiction is asserted, the propriety of such an exercise must be tested against the state long-arm statute and the due process clause. Haas v. Four Seasons Campground, Inc., 2008 Pa. Super. 136, 952 A.2d 688 (2008), referring to 42 Pa.C.S.A. § 5301(a) and U.S.Const. Amend. XIV.

42 Pa. C.S.A. § 5308 governs jurisdiction based on minimum contacts and provides that, “The tribunals of this Commonwealth may exercise jurisdiction under this subchapter only where the contact with this Commonwealth is sufficient under the constitution of the United States.” 42 Pa. C.S.A. § 5308. The question of whether a state may exercise in personam jurisdiction over a nonresident defendant must be tested against both the state’s long-arm statute and the due process clause of the fourteenth amendment to the United States constitution. Kubik v. Letteri, 532 Pa. 10,614 A.2d 1110 (1992); Kenny v. Alexson Equipment Co., 495 Pa. 107, 432 A.2d 974 (1981).

The due process clause of the fourteenth amendment imposes a limit on the state’s exercise of jurisdiction over a nonresident defendant, and protects an individual’s liberty interest by not allowing the individual to be subject to the jurisdiction of a foreign forum with which he or she has established no meaningful contacts, ties, or relations. See Kenny v. Alexson Equipment Co., 495 Pa. 107, 432 A.2d 974 (1981); Kubik v. Letteri, 532 Pa. 10, 614 A.2d 1110 (1992). The due process limitations on the assertion of specific personal jurisdiction over a nonresident defendant are as follows: (1) the nonresident defendant must have sufficient minimum contacts with the forum state, and (2) the assertion of in personam jurisdiction must comport with fair play and substantial justice. See Nutrition Management Services Co. v. Hinchcliff, 2007 Pa. Super. 167, 926 A.2d 531 (2007); Kubik v. Letteri, 532 Pa. 10,614 A.2d 1110 (1992). Thus, the determination of whether sufficient minimum contacts exist for the exercise of personal jurisdiction to meet constitutional muster is based on a finding that the defendant’s conduct and his or her connection with the forum state are such that the defendant could reasonably anticipate being called to defend itself in that forum. See Kubik v. Letteri, 532 Pa. 10, 614 A.2d 1110 (1992); Efford v. Jockey Club, 2002 Pa. Super. 100, 796 A.2d 370 (2002); Hall-Woolford Tank Co., Inc. v. R.F. Kilns, Inc., 698 A.2d 80 (Pa. Super. Ct. 1997).

In the instant matter, the evidentiary record created through jurisdictional discovery and the laws of the Commonwealth of Pennsylvania support SDI’s argument that this court lacks jurisdiction over SDI. The accident that forms the basis for the plaintiffs’ lawsuit occurred at the DeKalb County facility in the State of Indiana. See paragraph numbered 9 of the complaint. SDI is an Indiana corporation with its principal place of business in Fort Wayne, Indiana. See affidavit of Richard A. Poinsatte, exhibit “A” of SDI’s supplemental brief in support. SDI has no officers or directors in the Commonwealth of Pennsylvania. Id. SDI does not maintain a mailing address, post office box, or telephone number in the Commonwealth of Pennsylvania. Id. SDI does not own, lease, or operate real property situate in the Commonwealth of Pennsylvania. Id.; see also, Deeds, exhibit “B” of SDI’s supplemental brief in support. SDI pays no property taxes in Pennsylvania. Id.; see also, 2011 Allegheny County, Pennsylvania, real estate tax statement, exhibit“C” ofSDI’s supplemental brief in support. There are no SDI employees in the Commonwealth of Pennsylvania. Id.; see also, SDI and affiliated entities employee count by location, exhibit “D” of SDI’s supplemental brief in support. SDI has no agent to receive service of process in Pennsylvania. See supplemental affidavit of Richard A. Poinsatte, exhibit “E” of SDI’s supplemental brief in support. SDI has not paid income taxes in the Commonwealth of Pennsylvania. Id. SDI has never purchased advertising directly targeted to Pennsylvania residents. See SDI’s answers to plaintiffs’ third set of interrogatories, no. 183, exhibit “F” of SDI’s supplemental brief in support.

While SDI made purchases from non-party vendors, the record shows that SDI makes no sales in the Commonwealth of Pennsylvania, and purchases are insufficient to confer jurisdiction. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984); Whalen v. Walt Disney World Co., 274 Pa. Super. 246,418 A.2d 389 (Pa. Super. 1980). All products manufactured by SDI are sold in the State of Indiana to Steel Dynamics Sales North America, Inc. (hereinafter “SDSNA”), a wholly owned subsidiary corporation; SDSNA, in turn, sells the products it purchases from SDI to thousands of different customers throughout the world. See summary of SDI sales to SDSNA from 2005-2010, exhibit “G” of SDI’s supplemental brief in support; SDI’s answer to plaintiffs’ third set of interrogatories, no. 184, exhibit “F” of SDI’s supplemental brief in support. As SDI and SDSNA are separate corporations, SDSNA’s contacts with Pennsylvania can only be imputed to SDI for jurisdictional purposes if the two (2) companies do not maintain corporate separation and SDSNA is merely the “alter-ego” of SDI. See Cannon Manufacturing Co. v. Cudahy Packing Co., 267 U.S. 333,45 S.Ct. 250,69 L.Ed. 634 (1924); Botwinick v. Credit Exchange, Inc., 419 Pa. 65,213 A.2d 349 (Pa. 1965). The evidentiary record does not support the contention that SDI and SDSNA do not maintain corporate separation.

The evidentiary record created through jurisdictional discovery likewise demonstrates that “The Techs-A Division of Steel Dynamics, Inc.” is a wholly-owned subsidiary of SDI, and is registered with the Pennsylvania Department of State as a fictitious name, and is owned by The Techs Industries, Inc. (hereinafter “The Techs”), and is not a part of SDI. See Pennsylvania Corporations Database Business Entity Filing History, Exhibit “H” of SDI’s supplemental brief in support. As the Techs is a wholly-owned subsidiary of SDI whose contacts with the Commonwealth of Pennsylvania cannot be imputed to establish jurisdiction over SDI unless there is evidence that corporate separation has not been maintained; there is no such evidence here.

In light of the foregoing, SDI has clearly established that jurisdiction in the Court of Common Pleas of Butler County, Pennsylvania, is improper as SDI lacks sufficient meaningful contacts with the Commonwealth of Pennsylvania.

ORDER OF COURT

And now, May 4,2012, upon consideration defendant’s, Steel Dynamics, Inc., preliminary objections to plaintiffs’ complaint, brief in support of preliminary objections to plaintiffs’ complaint, plaintiffs’, Kenneth D. Meredith and Olive L. Meredith, response to defendant Steel Dynamic [sic], Inc.’s preliminary objections, plaintiffs’ brief in opposition to defendant Steel Dynamics, Inc. ’s preliminary objections, defendant’s, Steel Dynamics, Inc., reply brief to plaintiff’s [sic] brief in opposition to defendant’s preliminary objections, defendant’s, Steel Dynamics, Inc., supplemental brief in support of preliminary objections to jurisdiction, plaintiffs’ supplemental response to defendant Steel Dynamics, Inc.’s preliminary objection to jurisdiction, supplemental brief in opposition to defendant Steel Dynamics, Inc.’s preliminary objections as to jurisdiction, defendant’s, Steel Dynamics, Inc., reply brief to plaintiffs’ brief in opposition to SDI’s supplemental brief in support of its preliminary objections to jurisdiction, oral argument thereon, and in accordance with the foregoing memorandum opinion, the defendant’s, Steel Dynamics, Inc., preliminary objections to plaintiffs’ complaint, relative to lack of jurisdiction are sustained, and this matter is to be forthwith transferred by the prothonotary’s office of Butler County, Pennsylvania, to office of the DeKalb County Clerk of Courts, P.O. Box 230, Auburn, Indiana 46706.


author: HERTZBERG, J.,

text:
    Meyer, Darragh, Buckler, Bebenek & Eck, P.L.L.C. v. Malone Middleman.

      Scott Millhouse, for plaintiff.

      Paul S. Guarnieri, for defendant.
    November 26, 2012
   HERTZBERG, J.,

I. Introduction

This is a dispute between two law firms over attorney fees earned in a wrongful death civil litigation settlement. My non-jury verdict was in favor of plaintiff Meyer, Darragh, Buckler, Bebeneck & Eck, P.L.L.C. (“Meyer Darragh”) and against defendant Malone Middleman, P.C. (“Malone Middleman) in the amount of $14,721.39. Both Meyer Darragh and Malone Middleman appealed from this verdict, and this opinion sets forth the reasons for the verdict in compliance with Pa.R.A.P. 1925(a).

The attorney fees at the heart of this dispute were earned under a contingent fee agreement. Most personal injury plaintiffs enter into contingent fee agreements with the attorneys they hire, and a significant number of these plaintiffs end up changing attorneys before settlement or trial. If the contingency is met after a change in attorneys, it is important to attorney-client relations and to professional relations between attorneys that the law spell out the circumstances when the new attorney must share the fee with the old attorney. The circumstances in the case at bar warrant a sharing of the contingent fee between attorneys, and I believe this case affords an excellent opportunity to clarify Pennsylvania law on this topic.

II. Background

On October 6, 2002, Richard A. Eazor died in a motor vehicle accident. In March of 2005 attorney William Weiler, Jr. began representing the Eazor Estate in a wrongful death civil lawsuit under a contingent fee agreement. In November of 2005, attorney Weiler signed an employment agreement with Meyer Darragh, containing these provisions:

.... Any and all legal work performed by Weiler will be deemed work on behalf of the firm.
.... All fees for legal services performed during the term of this agreement by Weiler or on behalf of any client originated by Weiler shall be the property of the firm, regardless of whether the fees are received by the firm during the term of this agreement or after the expiration or termination of it and regardless of whether Weiler originated the client or matter prior to the effective date of this agreement....the firm will have the sole right to collect fees due to it and Weiler will cooperate in the firm’s collection efforts. Further, it is agreed that any and all files relating to legal work performed by Weiler or on behalf of clients originated by Weiler shall be the property of the firm and/or the clients and Weiler shall not remove same from the premises of the firm, absent written permission from the firm or written instructions by the client.

Attorney Scott Millhouse of Meyer Darragh assumed primary responsibility for the Eazor wrongful death litigation, and he was assisted by attorney Weiler, another Meyer Darragh attorney and two paralegals. Attorney Millhouse represented the Eazor Estate during two depositions, and he also drafted a three page proposed Settlement Agreement that he circulated to all opposing counsel.

Mr. Weiler resigned from Meyer Darragh in May of 2007, but before doing so, he agreed that Meyer Darragh would receive two-thirds and Mr. Weiler would receive one-third of the attorney fees generated by the Eazor wrongful death lawsuit. Meyer Darragh believed it would continue to act as lead counsel in the Eazor wrongful death litigation after Mr. Weiler’s departure from the firm. However, when Mr. Weiler left Meyer Darragh, he removed the Eazor litigation file without obtaining Meyer Darragh’s permission. Then, Mr. Weiler affiliated with Malone Middleman and the Eazor Estate decided it would be represented by Mr. Weiler and his new firm, Malone Middleman.

Meyer Darrah promptly notified Malone Middleman that it was bound by attorney Weiler’s agreement to pay Meyer Darragh two-thirds of the Eazor Estate attorney fees. Malone Middleman responded by denying that Meyer Darragh was owed two thirds of the Eazor attorney fee and “at best, has a quantum meruit claim for actual time expended....” Malone Middleman’s contingent fee agreement with the Eazor Estate, which is undated, was not prepared until months after Meyer Darragh notified Malone Middleman of the claim to a portion of the attorney fees. (See proposed stipulated facts/trial documents, defendant’s Exhibit E, description of Malone Middleman’s legal work, p.4 showing the contingent fee agreement was prepared and sent to J. Richard Eazor on 9/19/2007.) Malone Middleman’s contingent fee agreement does not address the payment of Meyer Darragh’s attorney fees, and there is nothing in the record to indicate that Malone Middleman advised the Eazor Estate that the Estate could be responsible for paying the attorney fees charged by Meyer Darragh. Ultimately, the Eazor Estate settled the litigation shortly before the commencement of trial for $235,000, with Malone Middleman receiving $67,000 in attorney fees from the Estate. The framework of the settlement proposal drafted by attorney Millhouse of Meyer Darragh was first utilized by the trial judge in a court order that narrowed the issues for trial, and it was also utilized in the ultimate settlement of the litigation.

Meyer Darragh initiated this litigation in September of 2010 naming Malone Middleman and the Eazor Estate Executors as defendants. The amended complaint, filed in March of 2011, asserted a claim against Malone Middleman for breach of contract and a claim against both Malone Midleman and the estate executors for quantum meruit. The parties elected to have the dispute decided by a judge as a “case submitted on stipulated facts” under Pennsylvania Rule of Civil Procedure No. 1031. The parties filed stipulated facts and briefs and I heard oral argument. In its briefs and at oral argument, Meyer Darragh stated that it is not seeking a verdict against the Eazor Estate Executors because the estate paid in full the attorney fee it was charged and owes nothing additional.

On July 24, 2012 I signed a verdict in favor of the Estate Executors and also in favor of Meyer Darragh in the amount of $14,721.39, relative to the claim against Malone Midleman. My verdict is not premised on the breach of contract claim for two-thirds of the attorney fees; it is premised on the quantum meruit claim and consists of Meyer Darragh hourly billings of $10,500.25 and expenses of $4,221.14. Both Malone Middleman and Meyer Darragh timely filed motions for post-trial relief, which I denied. Then, they both also timely filed notices of appeal to the Superior Court and concise statements of errors complained of on appeal. Malone Middleman alleges I made one error, and this will be addressed first.

III. Quantum Meruit

Malone Middleman contends that I made an error by basing the $14,721.39 verdict against it on a quantum meruit theory. In disputes over contingent attorney fees, Malone Middleman believes that Pennsylvania law clearly prohibits a predecessor attorney from making a quantum meruit claim against a successor attorney and permits the claim to be made only against the client. If Malone Middleman is correct, Pennsylvania law would seem to encourage lawsuits by attorneys against their former clients since lawsuits against successor attorneys in contingent fee matters would be prohibited. If a predecessor attorney does not wish to sue a former client and Malone Middleman is correct, Pennsylvania law also says whichever attorney has the contingent fee case at the time it is favorably resolved gets the entire contingent fee, regardless of whether a predecessor attorney has done the bulk of the work. I disagree with Malone Middleman’s description of Pennsylvania’s law on quantum meruit claims in disputes over contingent fees. While inconsistent, Pennsylvania caselaw, summarized below, does not amount to a prohibition of quantum meruit claims made by predecessor attorneys against successor attorneys relative to contingent fees received by the successor attorney.

In 1978, the Superior Court of Pennsylvania decided Johnson v. Stein, an attorney fee dispute, in which a client who retained attorney Martin Phillip in a tort case on a contingent fee basis, discharged him in favor of attorney Phillip’s associate attorney, who had been terminated from employment with attorney Phillip. 254 Pa. Super. 41, 385 A.2d 514. When attorney Phillip’s former associate negotiated a settlement of the tort case, the Superior Court in an opinion authored by Judge Spaeth and joined by five other members of the court, ruled that attorney Phillip could bring a quantum meruit claim against his former associate attorney for the fees earned before the client discharged him.

In 1993, the Superior Court of Pennsylvania decided Styer v. Hugo, a complicated attorney fee dispute in which three lawyers worked consecutively on a personal injury case under contingent fee agreements. 422 Pa.Super 262, 619 A.2d 347, affirmed 535 Pa. 610, 637 A.2d 276 (1994). The clients initially retained attorney David Styer, but they became dissatisfied with him since he failed to resolve the case over a period of four years. The clients discharged attorney Styer and retained attorney Christopher Brill, who, with the knowledge of the clients, agreed to divide any attorney fee realized in the case with attorney Styer. Attorney Brill determined that the clients placed an unreasonable value on their claim, and so he suggested they find another attorney. The clients then retained their third attorney, Randall Hugo. Attorney Brill notified the clients that he was not charging them any fee, but attorney Brill did not inform attorney Styer of this or of the fact that he had been discharged, and attorney Brill also did not inform attorney Hugo of the fee sharing agreement he had with attorney Styer. After attorney Hugo achieved a settlement of the case, a three Judge Superior Court Panel ruled attorney Hugo had not been unjustly enriched and therefore owed no part of the attorney fee to attorney Styer. The Superior Court gave multiple reasons for this ruling. Attorney Styer did not adequately protect his right to compensation by enforcing his right to obtain payment of his fees from the clients. Attorney Styer relied on the fee sharing agreement with attorney Brill, which became a nullity when attorney Brill was discharged and waived his right to any fee. Finally, attorney Styer’s efforts contributed minimally to the settlement obtained by attorney Hugo, and attorney Hugo was unaware of attorney Styer’s expectation of payment when he took over the case.

In January of 1995 the Superior Court of Pennsylvania decided Feingold v. Pucello, a fee dispute that was only between one attorney and a client injured in a motor vehicle accident. 439 Pa. Super. 509, 654 A.2d 1093. Attorney Allen Feingold conducted a prompt investigation and secured an admission of liability from the other driver. But, when attorney Feingold sent the client a written agreement with a contingent fee of 50 percent of the recovery, the client found the fee was too high, told attorney Feingold he could keep his investigative work, and hired other counsel. A three judge Superior Court Panel ruled attorney Feingold had no quantum meruit claim against the client because he did not obtain a written contingent fee agreement as required by the rules of professional conduct and because the client told attorney Feingold to keep his work product. However, in response to attorney Feingold’s argument that the admission from the other driver facilitated the settlement because the other driver thereafter could not change his story, the Superior Court explained that attorney Feingold’s quantum meruit claim would more properly be against the successor attorney who may have been assisted by his work. It referenced the 1978 case of Johnson v. Stein, supra.

Then, in June of 1995, a different three judge Superior Court Panel in Fowkes v. Shoemaker, ruled that a predecessor attorney in a personal injury case had a quantum meruit claim against the clients but not against the successor attorney who received the settlement. 443 Pa. Super. 343, 661 A.2d 877, appeal denied, 544 Pa. 609, 674 A.2d 1072 (1996). Attorney George Fowkes was retained to represent the clients, but they became dissatisfied with him, discharged him and retained attorney Edward Shoemaker.

The contingent fee agreement between attorney Shoemaker and the clients specified that the fee is being reduced from 40 percent to 33 percent because the clients would be responsible for the legal fees of the predecessor attorney. The presence of this provision appears to be the primary reason the Superior Court ruled the quantum meruit claim could only lie against the clients.

In 2002, the Superior Court of Pennsylvania made another ruling involving a quantum meruit claim to attorney fees in Mager v. Bultena, 2002 Pa. Super. 85, 797 A.2d 948. Attorney Michael Salmanson was an associate at Mager, Liebenberg and White when a client with a potential Federal False Claims Act qui tarn prosecution (see 31 U.S.C.§ 3729, et seq.) was referred to him. The client initially agreed to pay Mager, Liebenberg and White $200 per hour of services rendered, but after about one year this changed to a contingent fee agreement. The client had considerable experience with qui tam cases and spent one hundred to two hundred hours organizing and reviewing documents and helping draft the complaint. Mager Liebenberg and White provided minimal services to the client after signing the contingent fee agreement, and then the client followed attorney Salmanson when he left that firm and formed Salmanson & Falcao. The client and Salmanson & Falco had a contingent fee agreement that included indemnification of the client by Salmanson and Falcao against the attorney fee claims of Mager, Liebenberg and White. Ultimately, the government became involved in the qui tam case, obtained a settlement and paid the client a relator’s fee, thirty percent of which went to Salmanson & Falcao under the contingent fee agreement. Mager, Liebenberg and White sued attorney Salmanson, his firm and the client for compensation for services provided before attorney Salmanson formed Salmanson & Falcao. A three judge panel of the Superior Court ruled that Mager, Liebenberg and White had a quantum meruit claim against the client, and because of the indemnification agreement, against Salmanson & Falcao. As to attorney Salmanson, the Superior Court ruled, based on Styer v. Hugo, supra and Fowkes v. Shoemaker, supra, that Mager, Liebenberg and White did not have a valid quantum meruit claim.

Finally, on May 30, 2012, the Superior Court of Pennsylvania made its most recent ruling on the topic in Ruby v. Abington Memorial Hospital, 2012 Pa. Super. 114, 50 A. 3d 128. Attorney Keith Erbstein, a partner with the Beasley Firm, brought in a negligence case and the clients signed a contingent fee agreement. A little more than a year later, attorney Erbstein was released from the Beasley Firm and obtained employment with Young, Ricchiuiti, Caldwell & Heller. The clients opted to go with attorney Erbstein and his new firm and they entered into another contingent fee agreement with Young, Ricchiuti, Caldwell & Heller. The negligence claim was settled, and a dispute arose between the two law firms over distribution of the attorney fee. Attorney Erbstein had an agreement to pay the Beasley Firm seventy five percent of the contingent fee when clients opted to continue being represented by him after his release. Therefore, the Beasley Firm made a breach of contract claim against Young, Ricciuti, Caldwell & Heller for seventy-five percent of the attorney fee. A three judge Superior Court Panel ruled that the breach of contract claim against the successor attorney for seventy five percent of the attorney fee was valid, but that the existence of a contract between the parties made a quantum meruit claim inapplicable.

Analyzing these Superior Court decisions, six of the court’s Judges first announced the ability of a discharged attorney to make a quantum meruit claim under a contingent fee agreement against a successor attorney in 1978 in Johnson v. Stein. Then, in 1993, the court ruled against a predecessor attorney’s quantum meruit claim in Styer v. Hugo. The court in Styer v. Hugo noted that the applicability of quantum meruit “depends on the unique factual circumstances of each case.... [with the]... focus... on whether the defendant has been unjustly enriched.” 422 Pa. Super. 262, 268, 619 A.2d 347, 350 (citations omitted). The factual circumstances in the case at hand are far different from those in Slyer v. Hugo and do establish that defendant Malone Middleman has been unjustly enriched. Meyer Darrgh’s work in representing the Eazor Estate in depositions and in establishing a framework for settlement conferred benefits on Malone Middleman. See proposed stipulated facts/trial documents, Exhibit 19. There was an appreciation of such benefits since Malone Middleman was able to get the Eazor Estate’s claim settled and receive $67,000 in attorney fees. Finally, “it would be inequitable for defendant to retain the benefit without payment....” (Id.) because Malone Middleman was aware Meyer Darragh was looking to Malone Middleman for payment of its fees when it took over the case and Meyer Darragh cannot look to the Eazor Estate because the Estate has already paid Malone Middleman all the attorney fees it owes.

The Superior Court in 1995 again acknowledged in Feingold v. Pucello that there are appropriate circumstances for claims of quantum meruit by predecessors against successor attorneys. Since then, the Superior Court rulings that quantum meruit was inappropriate all involved cases in which agreements were applicable to the disputes. In Fowkes v. Shoemaker, there was a contingent fee agreement that called for the clients to be responsible for the predecessor attorney’s fee. In Mager v. Bultena, there was an agreement by the successor law firm to indemnify the client against the predecessor law firm’s attorney fee claim. Last, in Ruby v. Abington Memorial Hospital, there was an agreement by the partner of the predecessor law firm to pay it seventy-five percent of the contingent fee.

Applying this concept to the case at hand, if Mr. Weiler’s agreement to pay Meyer Darragh two-thirds of the attorney fee is applicable, Meyer Darragh may not make a quantum meruit claim against Malone Middleman. However, if that agreement is inapplicable, Meyer Darragh’s quantum meruit claim is valid. In the portion of this opinion that addresses Meyer Darragh’s arguments I explain in detail the reasons Mr. Weiler’s agreement does not apply to the subject dispute. Since Mr. Weiler’s agreement does not apply, and therefore quantum meruit does apply, I made no error in basing my verdict in favor of Meyer Darragh on quantum meruit.

Next, I will address the errors alleged by Meyer Darragh. Meyer Darragh argues that I made three different errors.

IV. Breach of Contract

Meyer Darragh first claims I made an error by determining that attorney Weiler’s agreement to pay Meyer Darragh two-thirds of the Eazor attorney fee is not binding on Malone Middleman. This argument is premised on Ruby v. Abington Memorial Hospital above, the 2012 Superior Court decision that the successor firm owes the predecessor firm seventy-five percent of its contingent fee under a contract between the predecessor firm and a partner whom the clients followed to the successor firm. However, the fact that attorney Weiler was not a Meyer Darragh partner is fatal to this claim. While the Ruby decision acknowledges the partner’s clear contractual obligation to the predecessor firm, it also explains in detail that the successor firm is subject to the contract only because payment of seventy-five percent of the fee constitutes “unfinished business” of the dissolved partnership under the Uniform Partnership Act. 15 Pa. C.S. § 8301-8365; 2012 Pa. Super. 114, 50 A.3d 128, 132-136. With attorney Weiler not being a withdrawing partner, the Meyer Darragh partnership was not dissolved and attorney Weiler’s obligation to pay Meyer Darragh two-thirds of the Eazor contingent fee is not unfinished partnership business. Since Malone Middleman is not a party to the agreement between attorney Weiler and Meyer Darragh, and Malone Middleman cannot be subject to the agreement under the “unfinished business” doctrine, Meyer Darragh’s claim under the contract fails.

V. Conversion

Meyer Darragh next argues that I made an error by not finding Malone Middleman liable for conversion. In June of 2012, Meyer Darragh filed a motion requesting leave to amend its complaint for a second time to add a conversion count. Malone Middleman opposed the amendment on the basis that the statute of limitations on conversion had expired. I agreed with Malone Middleman and therefore denied Meyer Darragh’s request for leave to amend. The statute of limitations for Meyer Darragh’s conversion claim expires two years after Meyer Darragh, using all reasonable diligence, ascertains that it has been injured. Kingston Coal Company v. Felton Mining Company, Inc., 456 Pa. Super. 270, 690 A.2d 284 (1997), appeal denied 549 Pa. 702, 700 A.2d 441 (1997). On July 23, 2007 Meyer Darragh was aware of the receipt by the Eazor Estate of $15,000 of the settlement proceeds and requested that Malone Middleman pay it two-thirds of the contingent fee. Proposed stipulated facts/trial documents, Exhibit 17. Malone Middleman received the $220,000 balance of the settlement on December 13, 2007, and on February 6, 2008, the Eazor Estate received court approval to disburse the entire $235,000 in settlement proceeds with Malone Middleman receiving allocation of its contingent fee. Id., paragraph no. 37 and Exhibit G. With Meyer Darragh’s knowledge in July of2007 that trial in the Eazor wrongful death case was imminent, reasonable diligence required that Meyer Darragh thereafter check with the court to determine whether there was a verdict and/or settlement. Id., Exhibit 16. Meyer Darragh knew as early as July of 2007 that it was financially harmed by Malone Middleman’s failure to pay any part of the contingent fee from the $15,000 received by the Eazor Estate. Certainly Meyer Darragh, using reasonable diligence by checking with the court, would have determined the full extent of the financial harm by June of 2008, six months after final settlement. Therefore, Meyer Darragh’s request to add a conversion count in June of 2012 is well beyond the two year statute of limitations. Accordingly, I made no error by denying Meyer Darragh’s motion and finding Malone Middleman is not liable for conversion.

VI. The Verdict Amount

Meyer Darragh’s final argument is that I erred in the verdict amount that I entered under the quantum meruit theory. Meyer Darragh contends that the verdict amount under the quantum meruit theory should have been $17,673.93, rather than the $14,721.39 that I entered. Meyer Darragh contends that $17,673.93 was the stipulated amount of its quantum meruit claim. However, the proposed stipulated facts/trial documents filed by the parties state only that Meyer Darragh “requested payment of $17,673.93....” Paragraph No. 51. I do not view this language as acceptance by Malone Middleman that Meyer Darragh’s quantum meruit claim is in the amount of $ 17,673.93, and further doubt is cast upon there being any stipulated amount by the total for services and expenses in Meyer Darragh’s itemized bill being in the amount of $14,843.89. Exhibits 25 and D. Stipulations of the parties are subject to contract interpretation. Nottingham Village Retirement Center Associates, LP v. Northumberland County Board of Assessments, 885 A.2d 93 at 96 (Pa. Super. 2005). I interpret the intention of the parties as allowing a court review of Meyer Darragh’s itemized bill for a determination of the amount by which Malone Middleman was unjustly enriched. I determined that Malone Middleman was unjustly enriched as to all services and expenses described in Meyer Darragh’s itemized bill except for the final two service entries. Since the work described in the two final entries related to the fee dispute between Meyer Darragh and Malone Middleman, I excluded it to arrive at the verdict amount of $14,721.39. This amount being properly determined, I made no error in not entering a $17,673.93 verdict.

      . “Quantum meruit” allows a party to recover the value of work performed in the absence of a contract to avoid the unjust enrichment of another party. See 17A C.J.S. Contracts §440 at 553 (1963) and Schenley Distillers Corp. v. Kinsey Distilling Corp., 136 F.2d 350 at 352 (3d Cir. 1943). The term “quasi-contract” often is used interchangeably with quantum meruit. Id.

      . “A client should never be made to pay twice.” Malonis v. Harrington, 442 Mass. 692, 702, 816 N.E. 2d 115,123 (2004). “In a system of professional responsibility that stresses clients’ rights, it is incumbent upon the lawyer who enters a contingent fee contract with knowledge of a previous lawyer’s work to explain folly any obligation of the client to pay a previous lawyer and explicitly contract away liability for those fees. If this is not done the successor assumes the obligation to pay the first lawyer’s fee out of his or her contingent fee.” Galanis v. Lyons & Truitt, 715 N.E. 2d 858, 863 (Ind. 1999).

      . Meyer Darragh calculates that it would receive $56,808.80 if Malone Middleman paid the amount owed under the agreement between Meyer Darragh and attorney Weiler. I calculate the amount as $48,887.81 (67,000 x 2/3 = 44,666.67 + 4,221.14 costs = 48,887.81). The difference in amounts results from Meyer Darragh calculating the attorney fee under the contingent fee agreement between Malone Middleman and the Eazor Estate, while my calculation utilizes the lower, actual attorney fee of $67,000 that Malone Middleman reports being paid.

      . A comparison of the hours of services performed by each of the respective parties with the amount of attorney fees received pursuant to the verdict shows the proportions to be nearly equal. Exclusive of the expenses portion of the verdict, Meyer Darragh is receiving $10,500.25 of the $67,000 in attorney fees paid by the Eazor Estate, which is 15.67 percent. Malone Middleman submitted an itemized bill with 343 hours of service (see Exhibit E to proposed stipulated facts/trial documents) and my verdict awarded Meyer Darragh 71.25 hours of service, which is 17.06 percent of the total hours of services performed by both parties.

      . In any event, Meyer Darragh submitted an itemized billing based on hourly rates to the Eazor Estate on April 19, 2010, still more than two years from Meyer Darragh’s request to add the conversion count. Proposed Stipulated Facts/Trial Documents, Exhibit D.