author: KUHN, J.,

text:
    Kerchner v. Naill

      William J. Peters, for plaintiff.

      Henry O. Heiser, for defendant.

      January 18, 1989
   KUHN, J.,

On May 21, 1987, a wrongful death and survival action was filed for both compensatory and punitive damages arising out of the death of Karen E. Gilliam. On October 10, 1986, at approximately 4:29 p.m., a dump truck owned by defendant, Donald B. Smith Inc., and being operated by defendant, David A. Naill II, was traveling in an easterly direction of Pennsylvania Route 194. As the truck approached the intersection of Route 194, Mount Pleasant Road and Narrows Drive, it braked severely, crossed into the westbound lane and collided with the car being driven by decedent. The collision resulted in defendant’s death.

Defendants have filed a motion for ■ summary judgment seeking dismissal of the claim for punitive damages. As we have stated before, summary judgment is available under Pa.R.C.P. 1035 when the pleadings and additional record documents, considered together, reveal no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law. Such disposition is only granted in cases where the right is clear and free from doubt. The evidence must be reviewed most favorably to the non-moving party, and any doubts must be resolved against the entry of judgment. Shadle v. Bollinger, 28 Adams Leg. J. 23, 25 (1986).

The claim for punitive damages is premised upon Naill’s driving while allegedly under the influence of alcohol. Smith’s liability arises vicariously and because of its alleged failure to curtail an alleged common practice of drinking and driving by its employees. Defendants argue that we must follow the position of the lead opinion in Martin v. John Manville Corporation, 508 Pa. 154, 494 A.2d 1088 (1985) authored by Mr. Justice Hutchinson in determining the requisite mental state on the part of a defendant before punitive damages can be imposed. With all due respect we must disagree.

In Martin, the court concluded that the evidence concerning the defendant’s action did not rise to the level of recklessly indifferent conduct which would permit imposition of punitive damages. One justice joined the lead opinion. Two justices concurred in the result without opinion. Two justices concurred in the result but issued a concurring opinion criticizing the standard announced 'in the lead opinion. One justice did not participate at all in the case.

A review of the leading punitive cases does not support defendant’s position. In Feld v. Merriam, 506 Pa. 383, 485 A.2d 742 (1984), five members of the Supreme Court, in a unanimous opinion, stated:

“This court has embraced the guideline of section 908(2) of the Restatement (Second) of Torts regarding the imposition of punitive damages ... See Chambers v. Montgomery, 411 Pa. 339, 192 A.2d 355 (1963). Punitive damages must be based on conduct which is ‘malicious, wanton, reckless, willful,, or oppressive ...’ Id. at 344-5, 192 A.2d at 358, citing Hughes v. Babcock, 349 Pa. 475, 37 A.2d 551 (1944).” 506 Pa. at 395, 485 A.2d at 747-8.

The Restatement (Second) Torts provides:

“§908. Punitive Damages
“(1) Punitive damages are damages, other than compensatory or nominal damages, awarded against a person to punish him for his outrageous conduct and to deter him and others like him from similar conduct in the future;
“(2) Punitive damages may be awarded for conduct that is outrageous, because of the defendant’s evil motive or his reckless indifference to the rights of others.”

Comment (b) to section 908 notes that:

“Reckless indifference to the rights of others and conscious action in deliberate disregard of them (see section 500) may provide the necessary state of mind to justify punitive damages.”

Defendants contend that reckless or wanton conduct requires something close to an intentional action. However, Evans v. Philadelphia Transportation Co., 418 Pa. 567, 212 A.2d 440 (1965) suggests otherwise. There appellant argued that wanton misconduct existed only when the actor had actual knowledge of the danger for a sufficient period of time to give him a reasonable opportunity to take measures to avoid the danger. The court stated:

“Wanton misconduct... ‘means that the actor has intentionally done an act of an unreasonable character, in disregard of a risk known to him or so obvious that he must be taken to have been aware of it, and so great as to make it highly probable that harm would follow. It usually is accomplished by a conscious indifference to the consequences ...’
“Other decisions of this court have recognized that actual prior knowledge of the injured person’s peril need not be affirmatively established to constitute wanton misconduct. These cases, as well as the Restatement of Torts, clearly indicate that if the actor realizes or at least has knowledge of sufficient facts to cause a reasonable man to realize the existing peril for a sufficient period of time beforehand to give him a reasonable opportunity to take means to avoid the accident, then he is guilty of wanton misconduct if he recklessly disregards the existing danger.” 418 Pa. at 574, 212 A.2d 443-4. (emphasis in original)

Reckless disregard was defined by reference to Restatement of Torts §500 and comment(d) thereto.

This concept was followed in Fugagli v. Camasi, 426 Pa. 1, 229 A.2d 735 (1967). There the defendant drove an automobile around a curve while intoxicated at speeds approaching 90 miles per hour. Defendant’s passenger was killed in a one-car accident. In holding that the jury could have found the existence of wanton misconduct, meaning that question should have been put to the jury, the court stated:

“It is not necessary for the tort-feasor to have actual knowledge of the other person’s peril to constitute wanton misconduct. Such exists if he has knowledge of sufficient facts to cause a reasonable man to realize the existing danger for a sufficient period of time beforehand to give him a reasonable opportunity to take means to avoid the danger and, despite this knowledge, he recklessly ignores the other person’s peril.” 426 Pa. at 3, 229 A.2d at 736.

In Focht v. Rabada, 217 Pa. Super. 35, 268 A.2d 157 (1970), the Pennsylvania appellate courts for the first time addressed the issue whether punitive damages can be imposed on an intoxicated driver who injures another person. The court faced the question whether one who while driving under the influence of intoxicating liquor may, even without a bad motive, in certain circumstances, act with reckless indifference to the interests of others within the meaning of comment (b) of section 908, supra.

Comment (b) of section 908 referred to section 500 of the Restatement of Torts, Reckless Disregard of Safety. Comment (d) to section 500 states that:

“[I]f the conduct involves a high degree of chance that serious harm will result, that fact, that he knows or has reason to know that others are within the range of its effect, is conclusive of his recklessness.” 217 Pa. Super, at 39, 268 A.2d at 159. (emphasis in original)

The court also referred to Evans, supra and Fugagli, supra.

The court concluded by stating that:

“Automobiles represent the most lethal and deadly weapons today entrusted to our citizenry. When automobiles are driven by intoxicated drivers, the possibility of death and serious injury increases substantially. Every licensed driver is aware that driving while under the influence of intoxicating liquor presents a significant and very real danger to others in the area. ... In certain factual circumstances the risk to others by the drunken driver may be so obvious and the probability that harm will follow so great that outrageous misconduct may be established without reference to motive or intent.” 217 Pa. Super, at 41, 268 A.2d at 161.

On the basis of these principles from Evans, supra; Fugagli, supra; Focht, supra; Feld, supra; and Hughes, supra, Mr. Justice McDermott and Mr. Justice Papadakos criticized the lead opinion in Martin, supra, for suggesting that wanton misconduct may not be sufficient for assessing punitive damages when that legal opinion said:

“Comment a to section 500 describes two distinct types of reckless conduct which represent very different mental states: (1) where the ‘actor knows, or has reason to know ... of facts which create a high degree of risk of physical harm to another, and deliberately proceeds to act, or to fail to act, in conscious disregard of, or indifference to, that risk’; and (2) where the ‘actor has such knowledge, or reason to know, of the fact, but does not realize or appreciate the high degree of risk involved, although a reasonable man in his position would do so.’ The first type of reckless conduct described in section 500 demonstrates a higher degree of culpability than the second on the continuum of mental states which range from specific intent or ordinary negligence. An ‘indifference’ to a known risk under section 500 is closer' to an intentional act than the failure to appreciate the degree of risk from a known danger. This distinction is particularly important in determining what facts justify punitive damages in cases where, as here, liability is based on failure to warn against the risk of a disease with a long latency period arising out of exposure to a useful but unavoidably dangerous product.
“Under Pennsylvania law, only the first type of reckless conduct described in comment a to section 500; is sufficient to create a jury question on the issue of punitive damages.” 508 Pa. at 171, 494 A.2d at 1097.

Recently, we had occasion to rule upon the right to claim punitive damages against an intoxicated driver in Long v. Ohler; 1 D.&C. 4th 402 (1988). There we observed that,

“In the intervening 17 years since Focht, thousands of Pennsylvania drivers, passengers and pedestrians have been killed or maimed by intoxicated drivers. Public awareness and educational campaigns have been aimed at informing drivers of the consequences of their actions when drinking alcoholic beverages. The Vehicle Code has been amended, mandatory imprisonment directed, and license suspensions increased in an attempt to curb this serious problem. Nevertheless, the dockets continue to list a large number of persons appearing before our court each month charged with driving under the influence, 75 Pa.C.S. §3731.” 1 D.&C. 4th at 405.

Because Feld, supra; Evans, supra; and Focht, supra have not been overruled and because Martin, supra does not present a definitive statement of the requisite mental state for the imposition of punitive damages, we feel compelled to follow the former cases and reject defendant’s argument.

Defendants also argue that plaintiffs claim for punitive damages violated defendant’s right to protection from excessive fines as provided in Amendment VIII of the U.S. Constitution and Article I, section 13 of the Pennsylvania Constitution as well as defendants’ substantive due process rights. Defendants draw upon the concurring opinion of Justice O’Connor and Justice Scalia in Bankers Life and Casualty Comp. v. Crenshaw, 486 U.S._, 108 S. Ct. 1645, 100 L.Ed. 2d 62 (1988) for this position. There Bankers Life appealed a jury award of $1.6 million in punitive damages on a $20,000 compensatory damages verdict. Although the Supreme Court declined to rule upon the constitutionality of excessive civil fines, the concurring opinion suggested that the court should carefully scrutinize procedures under which punitive damages are granted on the basis of standardless jury , discretion, as was the situation under Mississippi law. Likewise, in Pennsylvania the “jury fixes the amount of such damages ... without yardstick, subject only to a reduction by the court if deemed excessive under the circumstances of the particular case.” DiSalle v. P.G. Publishing Co., 375 Pa. Super. 510, 544 A.2d 1345 (1988). However, it is clear that punitive damages must bear a reasonable relationship to actual compensatory damages. Kirkbride v. Lisbon Contractors Inc., 375 Pa. Super. 322, 516 A.2d 1 (1986).

On the sole basis of two concurring views in Bankers Life, (as attractive as that view may appear on the surface) we are not in a position to declare Pennsylvania’s approach to the imposition of punitive damages unconstitutional without legislative or appellate court authority.

With that background we must now examine the record in a light most favorable to plaintiff, keeping in mind at all times that it is defendant’s conduct which entitles one to punitive damages, not the result of his conduct. Feld v. Merriam, 506 Pa. 383, 485 A.2d 742 (1984).

On October 10, 1986, Naill was employed as a roofer for Smith at a job site in Hagerstown, Maryland. During his one-half hour lunch break at noon he consumed 62 ounces of beer and returned to work. At 3:00 p.m. Naill and two other employees left the job site in a nine-ton dump truck to return to Smith’s office in Hanover, Pa. En route Naill and the others consumed from four to six 12-ounce beers each.

At a distance of three-tenths of a mile before the accident scene a warning was posted for reduced speed ahead and at two-tenths of a mile before the scene the speed limit was posted at 40 miles per hour. The. area is a residential neighborhood. No adverse weather conditions existed at the time. Immediately before the accident Naill was traveling approximately 55 miles per hour, talking, and not paying close attention to the roadway. Upon looking ahead he saw a vehicle stopped in his lane to make a left-hand turn. Naill applied his brakes and skidded 75 feet in his lane and another 48 and one-half feet in a curve pattern into decedent’s lane of travel.

Immediately after the collision Naill, who was not injured, displayed bloodshot eyes, heavy eyelids, an odor of alcoholic beverage on his breath and was repetitive in his conversation. A blood specimen drawn from Naill at the Hanover General Hospital at 6:13 p.m. (nearly two hours after the accident) revealed a .0963 percent blood alcohol content.

It was admitted that Naill was acting within the scope of his employment at the time of the accident. Furthermore, there was some history of the drinking of alcoholic beverages by Smith employees after leaving a job site, including drinking in the employees’ break room.

Although Focht did not suggest a blanket policy that every intoxicated driver involved in an accident is subject to punitive damages, we believe this case involves sufficient averments to deny the motion for summary judgment. Simply stated, Naill voluntarily consumed approximately 12 beers in the four hours preceding the accident, six of which were consumed between 3:00 and 4:30 p.m. He operated a nine-ton dump truck while intoxicated, at a velocity-exceeding the legally posted speed limit in a residential area, without paying proper attention to the highway ahead as he approached an intersection. These facts, if established at trial, show a reckless indifference sufficient for imposition of punitive damages.

Plaintiff has not alleged that Smith was aware that Naill was drinking alcoholic beverages on the day in question but it is admitted that Naill was acting within the scope of his employment. Although admittedly a harsh rule, it nevertheless appears that in Pennsylvania a corporation is liable for punitive damages for acts of a servant, acting within the scope of his employment if plaintiff had such right against the servant. Lake Shore & Michigan So. Ry. v. Rosenzweig, 113 Pa. 519, 544, 6 Atl. 545, 553 (1886). See Chuy v. Philadelphia Eagles Football Club, 595 F.2d 1265 (1979); Skeels v. Universal C.I.T. Credit Corp., 335 F.2d 846 (1964). However, this rule must be applied with great caution where the employee’s act is not authorized or approved by his principal. Funk v. Kerbaugh, 222 Pa. 18, 19, 70 Atl. 953, 954 (1908).

On the surface, the cautionary language in Funk v. Kerbaugh, supra, would suggest the adoption of the view expressed in Restatement (Second) of Torts §909, Punitive Damages Against a Principal, and set forth in Pa. S.S.C.J.I. §14.01, which limits an employer’s liability for punitive damages imposed for the conduct of its employee. However, Pennsylvania courts have refused to adopt the standard in section 909. Dean Witter Reynolds Inc. v. Genteel, 346 Pa. Super. 336, 499 A.2d 637 (1985); Delahanty v. First Pennsylvania Bank, N.A., 318 Pa. Super. 90, 464 A.2d 1243 (1983). Although Funk, supra, allowed recovery under the theory of vicarious liability the court noted that the principal had actual knowledge of its employee’s actions. The same could be said for the award of punitive damages in Dean Witter, supra. In Delahanty, supra, vicarious liability was imposed because the employees’ acts were done within the scope of their employment and with intent to further the employer’s interest.

Based upon the current state of Pennsylvania law on vicarious liability for punitive damages, we must deny the motion as to Smith. Accordingly, we enter the attached

ORDER OF COURT

And now, January 18, 1989, defendants’ motion for summary judgment is denied.

      . Our analysis is supported by Irvins v. Glotex Corp., 115 F.R.D. 159 (E.D. Pa. 1986).

      . “Punitive damages can properly be awarded against a master or other principal because of an act by an agent if, but only if,
      “(a) the principal or managerial agent authorized the doing and the manner of the act, or
      “(b) the agent was unfit and the principal or managerial agent was reckless in employing or retaining him, or
      “(c) the agent was employed in a managerial capacity and was acting in the scope of employment, or
      “(d) the principal or managerial agent of the principal ratified or approved the act.”


source: Caselaw Access Project

author: THOMAS, P.J.,

license: Public Domain

text:
    Macken v. Lord Corp.

      Wendell G. Freeland, for plaintiff.

      Diane K. Rembleske, for defendant.
    April 30, 1990
   THOMAS, P.J.,

This matter before us on plaintiff’s post-trial motion is to set aside our order of a compulsory nonsuit and defendant’s petition for attorney’s fees pursuant to 42 Pa.C.S. §2503.

FACTUAL BACKGROUND

Plaintiff was employed by defendant as a material coordinator/material handler in October 1981.

On November 27, 1985, plaintiff was injured in the course of his employment when, a 550-pound drum fell against his abdomen, hurting his back. Plaintiff soon thereafter began to receive workmen’s compensation benefits beginning December 1985.

On February 25, 1986, plaintiffs treating physician, Doctor Mark Foster, released plaintiff for light duty effective immediately, and it was determined by Dr. Foster that plaintiff was capable of such light-duty tasks as applying labels, doing paperwork, stamping codes and assembling boxes (see Dr. Foster’s deposition dated February 26, 1986).

Upon receipt of the doctor’s authorization for light-duty work defendant’s personnel officer, Mr. Ed Boeing, called plaintiffs home on February 25, 1986, and advised Mr. Macken that he must report to work the next day for light duty. Plaintiff informed Mr. Boeing that he was not capable of working and that he had an appointment with Dr. Foster around 11 a.m. that same day (February 26, 1986), so he could not report to work. After consulting with plaintiffs supervisors, Mr. Boeing advised plaintiff he must still report into work, but he would be given time off during the morning to see the doctor and advised Macken that failure to report to work would mean termination of his employment. (See trial transcript, pages 14-6.)

Plaintiff failed to report to work on February 26, 1986, and he was consequently terminated from employment (trial transcript, page 17).

Plaintiffs Post-Trial Motion

By a pretrial memorandum and opinion filed January 26, 1990 (21 Crawford L.J. 245), we ruled on motions for summary judgment and narrowed the focus and issues to be resolved in the nonjury trial.

At trial, plaintiff presented his own testimony, the deposition of Doctor Mark Foster, and introduced several exhibits. Plaintiff then rested. We granted summary judgment in favor of defendant. Defendant contends that plaintiff has failed to show how his termination was a consequence of defendant’s retaliation for plaintiffs filing for workmen’s compensation benefits, as was implied in pretrial arguments. At argument on the motion for nonsuit, plaintiff argued a theory not previously pled, that is that section 408 of the Workmen’s Compensation Act (77 P.S. §732) prohibits defendant from modifying or terminating plaintiffs employment status while he was receiving workmen’s compensation benefits, and that such termination violated public policy.

As previously noted, we granted defendant’s motion for compulsory nonsuit, determining that plaintiff failed to meet his prima facie burden. In addition, we held that plaintiffs argument invoking 77 P.S. §732 was inapplicable under the facts of this case and was without merit; and that such an argument was a new cause of action not having been previously pled. Plaintiff now presents his motion to set aside the order of compulsory non-suit.

DISCUSSION

Under the case law of the commonwealth, an employee can be terminated for any or no reason. Geary v. United States Steel Corp., 456 Pa. 171, 319 A.2d 174 (1974), except when an employer has retaliated against an employee for exercising a statutory right or duty; one of these rights being the right to file for Workmen’s Compensation benefits. Rettinger v. American Car Company, 574 F.Supp. 306 (M.D. Pa. 1983); Butler v. Negley House Inc., 20 D.&C. 3d 543 (1981). However, unless an employee can show that the termination was motivated by such retaliation, there are no other grounds for a cause of action for wrongful discharge.

Plaintiff produced no evidence to show that defendant’s agents were motivated in discharging plaintiff because plaintiff filed for workmen’s compensation benefits. The only evidence presented was an attempt by plaintiff to refute the defense’s allegations that plaintiff was terminated because he had a poor attendance record and he failed to report for light-duty work on February 26, 1986,. as directed. Plaintiff is attempting to prove by implication that if he was not terminated for any legitimate reason, then he must have been terminated in retaliation. Again we stress that plaintiff has the burden to show defendant did in fact terminate him for unlawful retaliatory purposes, and plaintiff totally failed to carry this burden of proof.

At trial, plaintiff also presented a new legal theory based upon section 408 of the Workmen’s Compensation Act (77 P.S. §732). We determined that this theory raised by plaintiff was without merit and was waived, as it was not previously pled nor was it raised in any prior pretrial proceeding.

Plaintiff argues once again in his post-trial motion that the termination of his employment in the absence of an agreement modifying workmen’s compensation and an appropriate notice to the department constitutes a wrongful discharge and that it was reasonable for him to expect that defendant would proceed in accordance with the provisions of section 732 before demanding that plaintiff return to work. Plaintiff contends, therefore, that all recipients of workmen’s compensation benefits are guaranteed continued employment during the period that they receive such benefits.

Section 408 of the Workmen’s Compensation Act, 77 P.S. §732, is entitled “Modification, Suspension, Reinstatement or Termination of Notices and ■Agreements” and provides:

“All notices of compensation payable and agreements for compensation may be modified, suspended, reinstated, or terminated at any time by an agreement or supplemental agreement as the case may be with notice to the department, if the incapacity of an injured employee has increased, decreased, recurred or temporarily or finally terminated, or if the status of any dependent has changed.” 77 P.S. §732.

That section concerns only termination, modification or suspension of workmen’s compensation benefits. The evidence is clear that plaintiff continued to receive workmen’s compensation benefits after his termination of employment (see trial transcript, page 77-8). We determined at trial and now redetermine that contrary to plaintiffs assertions, the above statute does not stand for the proposition that a recipient of workmen’s compensation benefits can not be terminated from employment while receiving such benefits.

Defendant’s Petition for Attorney’s Fees

We dismiss defendant’s petition for attorney’s fees pursuant to 42 P.S. §2503. We do not believe counsel for plaintiff has violated any general rule; he has not demonstrated dilatory, obdurate, or vexatious conduct, nor has he acted in bad faith. The fact plaintiffs case did not survive a motion for compulsory nonsuit does not demonstrate to this court that plaintiffs claim was frivolous at either its commencement, or at any time prior to trial. We ■believe an award of attorney’s fees under the facts of this case to be improper.


author: SCOTT, J.,

text:
    Watts v. Vanderpool

      Ronald Blumfield, for plaintiffs.

      Richard D. Harburg, for defendant.
    May 11, 1990
   SCOTT, J.,

This court is presented with a petition for leave to compromise settlement free of workmen’s compensation lien filed by plaintiffs, John Watts and Elizabeth Watts. This petition results from an underlying tort action filed by plaintiffs under the above caption. This tort action resulted in an out-of-court resolution. Settlement proceeds in the amount of $11,000 were placed in an escrow account with the Bucks County prothonotary pursuant to the order entered by the Honorable Oscar S. Bortner on June 24, 1988. The proceeds were escrowed pending determination of plaintiff’s employer’s subrogation claim against said proceeds for workmen’s compensation benefits paid to plaintiff John Watts post-accident. For the reasons cited below we allow the subrogation claim.

The principal issue is whether the Pennsylvania No-fault Insurance Act, 40 P.S. §1009.101 et seq. (now repealed) is applicable to bar the rights of plaintiffs employer to subrogate against plaintiffs tort settlement proceeds for workmen’s compensation benefits paid to plaintiff under the Pennsylvania Workman’s Compensation Act, 77 P.S. §1 et seq., when the plaintiff/petitioner was injured in an accident occurring outside the Commonwealth of Pennsylvania. We conclude that under Pennsylvania law, the No-fault Act provides no such bar and subrogation is allowed.

The facts presented in the petition and not denied by the answer comprise the record. A review of the balance of the, pleadings and court file in the underlying tort action reveals that on April 14,1984, petitioner/plaintiff, John Watts, was operating a tractor-trailer owned by his employer, AAA Trucking, in the northbound lane of Route 31 in Mercer County, New Jersey. A Toyota pickup truck on the same day and approximate time was being operated by Robert Vanderpool in the opposite southbound lane of Route 31. As the two vehicles approached each other, the said Robert Vanderpool allegedly lost control of his pickup truck and entered the northbound lane. In the resulting collision Robert Vanderpool was killed. Petitioner, John Watts, driver of the said tractor-trailer, was injured and later instituted suit as above indicated.

Robert Vanderpool, decedent, and John and Elisabeth Watts were Pennsylvania residents at the time of the accident. Plaintiffs resided in Philadelphia and the administratrix of the tort-feasor resided in Holland, Bucks County, Pa.

Petitioner/plaintiff, John Watts, was operating the tractor-trailer at the time of the accident within the course and scope of his employment with AAA Trucking. AAA Trucking at that time was a New Jersey corporation doing business within the Commonwealth of Pennsylvania at 4355 Rising Sun Avenue, Philadelphia, Pa. It was at. this Philadelphia business location that petitioner, John Watts, reported daily to work. He received his truck driving work assignments from this location and at the end of his work day, he would return his employer’s tractor-trailer truck to this location.

As a result of petitioner John Watts’ work-related injuries, he received Pennsylvania workmen’s compensation benefits through his employer’s workmen’s compensation carrier totalling $6,009.37, consisting of $1,849.37 in medical specials and $4,160 in disability payments.

In response to plaintiffs’ petition for leave to compromise settlement proceeds free of the workmen’s compensation lien, the employer, AAA Trucking, asserts its right to reimbursement in the form of subrogation pursuant to section 319 of the Workman’s Compensation Act (77 P.S. §671). AAA Trucking seeks the full reimbursement of $6,009.37 from the tort proceeds based on its traditional subrogation rights. AAA Trucking asserts that in no way does the No-fault Insurance Act apply to the within case. Petitioners argue that the Pennsylvania No-fault Insurance Act, 40 P.S. 1009.101 et seq., bars the subrogation claim of the employer and petitioners cite several cases in support thereof.

Petitioners and respondent urge the within court to apply Pennsylvania law to the case sub judice. We do so with no difficulty.

We note that had there been no agreement as to the application of Pennsylvania law over the laws of the State of New Jersey, we still would be compelled to apply Pennsylvania law to the within case review. The courts in facing choice-of-law issues h'ave abandoned the strict lex loci delicti rule. Giovanetti v. Johns-Manville Corporation, 372 Pa. Super. 431, 539 A.2d 871 (1988). “A less restrictive approach combining the methodologies of a ‘government, interest analysis’ and the ‘significant relationship’ approach of the Restatement (Second) of Conflicts §145 (1971)” has been adopted. Giovanetti, supra. The analysis must include review of the policies of each respective state and the extent to which its policies and the connection and relevance to the dispute show a priority of interest in the application of its rule of law. Myers v. Commercial Union Assurance Companies, 506 Pa. 492, 485 A.2d 1113 (1984); Giovanetti v. Johns-Manville Corporation, supra. Further, it is the policy of this commonwealth that a victim’s right to pursue a tort action is determined by the law of the domicile of said victim, which in this case, is the within commonwealth. 40 P.S. §1009.110(c)(2).

Clearly, if we were required to use the combined methodology analysis for choice of law, there are significant and qualitative contacts, interests and factors compelling the application of Pennsylvania law to the within case. Petitioners/plaintiffs are Pennsylvania residents and the tort-feasor and his administratrix were Pennsylvania residents at the time of the accident. Petitioner’s employer operated a business within this commonwealth. The tractor-trailer involved in the New Jersey accident was stored and utilized on a daily basis within this commonwealth. Workmen’s compensation benefits were paid to petitioner John Watts under the Pennsylvania act. Therefore, important Pennsylvania legal issues involving motor vehicle injuries to Pennsylvania residents exist, such as the interrelationship of the Pennsylvania No-fault Act with its attending policies and purposes (see generally 40 P.S. §1009.101(a) and (b)), with the Pennsylvania Workman’s Compensation Act with its corresponding right for subrogation given to an employer when the employee recovers a settlement from a third-party tort suit (see generally section 317, 77 P.S. §671). Clearly, then, Pennsylvania law applied.

In applying Pennsylvania law, this court first looks to the said No7fault Act and case law for guidance. In doing so, we note that the No-fault Act itself makes the distinction between accidents that occur within the Commonwealth of Pennsylvania and outside the commonwealth. Wiest v. Eazor Express Inc., 311 Pa. Super. 128, 457 A.2d 527 (1983). Where the accident occurs outside this commonwealth, the partial abolishment of tort liability as set forth in 40 P.S. §1009.301(a) is lifted. Wiest, supra. This means that an out-of-state victim is not precluded from the full cause of action for negligence in any way. Such a victim can sue in tort for economic loss that otherwise would be barred by the No-fault Act. Id.

Section 301 of Title 40, the No-fault Act, provides in pertinent part:

“(a) Partial abolition — Tort liability is abolished with respect to any injury that takes place in this state in accordance with the provisions of this act if such injury arises out of the maintenance or use of a motor vehicle except that:. . ..” (emphasis supplied)

The tort-feasor will be exposed to potential liability for both economic and non-economic damages sustained by the victim. Such is the case under current review. At the time of this New Jersey accident, petitioners enjoyed the full ability to sue in tort. Petitioners did sue in tort and a settlement was reached as against a third-party tort-feasor. Because full tort liability was available to petitioners, any payments received by the workmen’s compensation carrier were not within the definition of basic loss benefits under the act since petitioners had the right under the act to sue the third-party tort-feasor for such economic damages. Any such settlement then is a settlement for all of the damages sustained by petitioners. Wiest, supra. Consequently, because the settlement represents a recovery for all damages sustained, a workmen’s compensation lien is created under the traditional subrogation provision of section 319 of the Workmen’s Compensation Act. Id.

Petitioners cite Brunelli v. Farelly Bros., 266 Pa. Super. 23, 402 A.2d 1058 (1979) for their contention that section 1009.111(a)(4) specifically prohibits a workmen’s compensation insurance carrier from subrogation for its payment of medical bills or wage loss incurred as a result of an employee’s injury in an automobile accident. This is a misstatement of the holding in Brunelli and a misreading of the No-fault Act.

Brunelli involved a Pennsylvania accident and, therefore, is immediately distinguishable from the within facts and thus not controlling to the facts before us. In Brunelli, the Superior Court interpreted section 1009.206(a) of the No-fault Act as requiring all workmen’s compensation benefits to first be subtracted from “loss” to calculate “net loss.” Brunelli, supra. Because the court relied on section 206, it reasoned that all workmen’s compensation benefits paid could never be payments received in excess of basic loss benefits. Brunelli, supra.

This reasoning has long been clarified and corrected by our Supreme Court in Vespaziani v. Insana, 501 Pa. 612, 462 A.2d 669 (1983). The Supreme Court stated:

“The conclusion that all workmen’s compensation benefits payable are ‘not amounts in excess of basic loss benefits,’ (quoting Brunelli v. Farelly Bros.) and can never be recovered from a third-party tort-feasor arises from a misapplication of a portion of Article II of the No-fault Act intended to be employed in calculating the no fault obligor’s liability, rather than third-party tort-feasor liability. Thus, the Superior Court reliance on section 206(a) is in error.” Vespaziani, supra.

Section 1009.111(a)(4) refers directly to section 203 under Article II of the No-fault Act. Like Vespaziani where the court concluded section 206 reliance to bar subrogation was a misapplication of a portion of Article II and not a bar to subrogation, section 206, also under Article II, cannot here bar subrogation. Therefore, reliance on section 1009.111(a)(4) is in error and without merit.

In Vespaziani, the injured employee was paid by his employer’s workmen’s compensation carrier over $31,000 in “work loss” benefits, and the said carrier attempted to intervene in the underlying third-party tort action filed by the injured employee in order to subrogate on amounts it paid to employee beyond the $15,000 maximum work-loss benefits available under the No-fault Act. After much discussion on the coordinating effect of benefits received from a workmen’s compensation carrier and a no-fault obligor, the court clearly held that beyond any contribution by the workmen’s compensation carrier toward the maximum of $15,000 of basic loss benefits for “work loss” permissible under the No-fault Act, the No-fault Act did not bar the subrogation claim of the workmen’s compensation carrier. Id. Consequently, amounts received by an injured employee from a workmen’s compensation carrier in excess of basic loss benefits are unequivocally subject to the subrogation claim of the employer and its carrier.

Petitioners further argue that the reasoning in Wiest is in direct opposition to Myers v. Commercial Union Assurance Companies, 506 Pa. 492, 485 A.2d 1113 (1983). We do not agree. Initially, we dispose of this argument by noting that Myers involved an accident occurring in Pennsylvania by an Illinois employee/resident.

In Myers, the injured Illinois employee was rendered a paraplegic when a Pennsylvania accident occurred with a Pennsylvania tort-feasor. Tort-feasor’s no-fault carrier paid to Myers, the injured employee, the sums of $74,000 in medical expenses and $250,000 for non-economic loss. The $250,000 payment was in the form of a settlement in Myers’ third-party tort action. Myers, supra.

Myers did not stop there. He was awarded in Illinois a workmen’s compensation award of $120 per week for life from his Illinois employer’s workmen’s compensation carrier. Id. Myers never received medical expenses from the'Illinois workmen’s compensation carrier from the date of the accident to the day the workmen’s compensation award was entered since the said carrier contended it had no obligation to do so in view of the tortfeasor’s no-fault carrier’s payment of same. Id.

The Pennsylvania court was faced with analyzing the legal issue of whether or not the Illinois workmen’s compensation carrier was required under the Pennsylvania No-fault Act to reimburse to the Pennsylvania tort-feasor’s no-fáult carrier the medical expenses it (the tort-feasor’s carrier) paid where Pennsylvania law required such reimbursement. Myers, supra. In reviewing this question the Pennsylvania Supreme Court concluded that Pennsylvania had significant interests in deciding this legal issue. It then held that the Pennsylvania No-fault Act required the Illinois workmen’s compensation carrier to reimburse the Pennsylvania tort-feasor’s no-fault carrier for medical expenses the workmen’s compensation carrier was obligated to pay.

To suggest that the reasoning behind Myers in any way affects the holding in Wiest is thus without any merit whatsoever. .Myers involved a totally different issue. It was a subrogation issue between obligors, not as here, a subrogation claim by a workmen’s compensation carrier against third-party tort settlement proceeds collected as a result of an out-of-state accident.

Finally, petitioners claim that an “evidentiary ruling” was made “pretrial” that John Watts was only entitled to non-economic recovery at trial. Petitioners assert that they settled the claim “in part” because of that “evidentiary ruling.” Petitioners argue that because the court ruled that it would not permit petitioner to introduce evidence at trial as to the amount of bills and wage loss incurred by plaintiffs by reason of the accident, such ruling required further ruling that the employer is not entitled to subrogation.

This argument is disposed easily by a review of the record. No such evidentiary ruling appears of record. To conclude, therefore, that an evidentiary ruling of the kind asserted ever occurred is unquestionably meritless.

The court understands the policy decisions under the No-fault Act and referred to by Vespaziani and Myers, supra. We further understand the fact that had this accident occurred within this state, subrogation would have been barred. Wiest v. Eazor Express Inc., supra. But, in view of the precedent of Wiest, and the plain reading of section 1009.301(a) of the No-fault Act, we can not hold otherwise.

The words of 40 P.S. 1009.301(a) are clear. The partial tort liability abolition extends only to in-state accidents. We conclude that if the legislature wanted this partial tort abolition to extend to out-of-state accidents it would have used the necessary language to avoid making the distinction that section 1009.301(a) makes. This court cannot go on a fishing expedition for “the spirit of the law” when the letter of the law is clear. Walters v. Kamppi, 118 Pa. Commw. 487, 545 A.2d 975 (1988).

We conclude for all of the above reasons that the No-fault Act’s partial abolishment of tort liability was not applicable to bar the injured employee from a full tort remedy at law. Given same, any settlement amount must be deemed to include medical expenses and wage-loss benefits previously paid by the employer’s compensation carrier. Consequently, the employer can subrogate against third-party settlement proceeds pursuant to the Pennsylvania Workman’s Compensation Act as above stated.

For these reasons we entered the order signed February 27, 1990 denying the petition for leave to compromise settlement free of workmen’s compensation lien, which order is being appealed.

      . The Honorable Oscar S. Bortner has retired and the case has been reassigned to the undersigned.

      . “Basic loss benefits” is described in sections 1009.103 and 1009.202 of the No-fault Act, and provided unlimited reasonable and necessary medical and vocational rehabilitation services (as defined in section 1009.103), work-loss benefits up to a maximum of $15,000, replacement services losses up to a daily maximum of $25 for an aggregate period of one year and survivor’s loss (as defined in section 1009.103) up to $5,000.

      . Section 1009.111(a)(4) of the No-fault Act provides that “In no event shall any entity providing benefits other than no-fault benefits to an individual as described in section 203 of this act [section 1009.203 of this title] have any right of subrogation with respect to said benefit.”

      . “§1009.206. Net Loss

      “(a) General — Except as provided in section 108(a)(3) of this act, [section 1009.108 of this title] all benefits or advantages (less reasonably incurred collection costs) that an individual receives or is entitled to receive from Social Security (except those benefits provided under Title XIX of the Social Security Act [42 U.S.C. §1396 et seq.] and except those Medicare benefits to which a person’s entitlement depends upon use of his so-called ‘lifetime reserve’ of benefit days) workmen’s compensation, any state-required temporary, nonoccupational disability insurance, and all other benefits (except the proceeds of life insurance) received by or available to an individual because of the injury from any government, unless the law authorizing or providing for such benefits or advantages makes them excess or secondary to the benefits in accordance with this act, shall be subtracted from loss in calculating net loss.”

      . This would be the case if the record revealed that the total contribution to the employee of wage loss by the compensation carrier and from any other source did not exceed $15,000, the maximum allowable for wage loss under the No-fault Act.


author: BOZZA, J.,

text:
    J.F. v. County of Erie

      James Bruno, for plaintiffs.

      John W. Beatty, for defendant.
    April 23, 1990
   BOZZA, J.,

Before the court áre preliminary objections of defendants in the nature of a demurrer to counts I, III, IV and VI of plaintiffs complaint pursuant to the Pennsylvania Municipalities Tort Claims Act, 42 Pa.C.S. §8541, and a demurrer to counts II and V based upon the alleged failure to state a cause of action under 42 U.S.C. §1983. In addition, plaintiffs have filed preliminary objections in the nature of a motion to strike the defendants’ supplemental brief with appended copies of previous orders of court.

Plaintiff, J.F., is the adopted daughter of plaintiffs, R.F. and P.F., who are husband and wife. As a result of a finding that J.F. had been severely beaten by her natural mother, she was adjudicated dependent by the juvenile division of this court on March 9, 1984. On April 19, 1984 the court ordered that J.F. “be placed under the care and supervision of Children’s Services of Erie County for an indefinite period of time with continued placement in foster care.” The order further provided for supervised visitation with the natural mother in the office. As a result of this adjudication, J.F. was placed in the foster home of her adoptive parents by the defendant Office of Children and Youth, hereinafter referred to as “Children’s Services.” On October 22, 1984, by order of court, placement with Children’s Services was continued and an increase in visitation between J.F. and her natural mother was authorized “at the discretion of Children’s Services.” Subsequent orders continued placement with Children’s Services and approved various treatment plans of the agency.

From the time of the adjudication of dependency until the date of her adoption, plaintiffs have alleged that J.F. was required to undertake both supervised and unsupervised visits with her natural mother, at the insistence of Children’s Services. During this period of visitation, while at the home of her natural mother, J.F. was allegedly subjected to physical, sexual and emotional abuse by her natural mother, her mother’s paramour and her natural brother.

Plaintiffs set forth state law claims in counts I, III, IV and VI of their complaint. Count I avers that the County of Erie and the Department of Human Services, acting through the Office of Children and Youth, acted grossly negligent in providing inadequate investigation, supervision, and monitoring of J.F.’s visitation with her natural mother. Counts III and IV are based upon the Pennsylvania Adoption Opportunities Act. Count III avers that J.F. has been wrongfully denied the benefits pursuant to this act despite her qualification for said benefits. Count IV contends that defendants were grossly negligent in failing to provide J.F. with a subsidy under the act and in otherwise negligently administering the act in J.F.’s case. Count VI is a negligence claim on behalf of R.J.F. Jr. and P.J.F., as the adoptive parents of J.F., for present and future expenses incurred and emotional distress suffered by them as a result of the alleged negligence of defendants.

In counts II and V of the plaintiffs’ complaint, federal claims are set forth pursuant to 42 U.S.C. §1983. Count II alleges that, as a result of defendant’s failure to protect J.F. from this course of abusive conduct, she “has been deprived ... of her liberty without due process of law in violation of her rights guaranteed under the laws of the United States and the 14th Amendment to the Constitution.” Finally, count V avers that, by failing to award J.F. a subsidy pursuant to the mandate of the Adoption Opportunities Act, defendants have deprived J.F. “of her liberty and property without due process of law. . .”

Defendants in their preliminary objections claim that those counts of plaintiffs’ complaint which sound in negligence, which should include counts I, III, IV and VI, are barred by the provisions of the Pennsylvania Municipalities Tort Claims Act. In addition, defendants contend that counts II and V, based on an alleged violation of 42 U.S.C. §1983, must be dismissed for failure to state a claim upon which relief may be granted.

Defendants, County of Erie, the Department of Human Services and the Office of Children and Youth, are local agencies that fall within the purview of the Pennsylvania Municipalities Tort Claims Act, 42 Pa.C.S. §8541 et seq. Pursuant to this act, these local agencies enjoy general governmental immunity as defined at common law. By way of exception, however, the act provides for the imposition of liability if two conditions are satisfied, and if the injury occurs as a result of one of eight circumstances set forth at 42 Pa.C.S. §8542(b). The threshold conditions required are that (1) damages would be recoverable under common law or a statute creating a cause of action against One not having an immunity defense, and (2) the injury must be caused by the negligent acts of the local agency or its employee acting within the scope of its office or duties, excepting therefrom acts of crime, fraud, malice or willful misconduct. Mascaro v. Youth Study Center, 514 Pa. 351, 523 A.2d 1118 (1987).

This court does not find that any of plaintiffs’ state law claims set forth in counts I, III, IV and VI of this complaint fall within any of the exceptions to governmental immunity. In rendering this determination the court notes that the parameters of this act have been narrowly interpreted in order to achieve the expressed legislative intent of insulating political subdivisions from tort liability, Mascaro, supra.

Defendants also contend that plaintiffs have failed to set forth a cause of action upon which relief may be granted in federal claims encompassed in counts II and V pursuant to an alleged deprivation of civil rights as defined by 42 U.S.C. §1983. Defendants claim that the natural mother of J.F. and her paramour cannot be deemed state actors nor can their abusive conduct be denominated state action and that the defendants have no recognized duty to protect such a minor from the perpetration of abuse by such private actors. Defendants’ contentions are based primarily on the case of DeShaney v. Winnebago Dept. of Social Services, _U.S. _, 109 S.Ct. 998 (1989), which involved the delineation of the liability of a county and its local social services agency under section 1983 for injuries sustained by a child at the hands of his abusive father where the local department of social services was on notice of the abusive conduct and there was an existent state statutory duty to protect children from abuse.

In DeShaney, the petitioner was a boy who was beaten and permanently injured by his father who had custody of his son subsequent to a divorce. The respondents were social workers and other local officials who had received complaints of the abusive conduct and had reason to find the reports credible, but nonetheless did not act to remove the petitioner from his father’s custody. In March 1984, the father, Randy DeShaney, beat Joshua so extensively that he fell into a life-threatening coma. The emergency surgery indicated a series of hemorrhages caused by traumatic injuries to the head inflicted over a significant period of time. As a result of his comatose condition, Joshua suffered severe brain damage leading to his expected lifetime confinement to an institution.

Joshua and his mother brought an action under section 1983 alleging that the respondents had deprived Joshua of his liberty without due process of law in violation of the 14th Amendment by failing to intervene to protect him against a risk of violence at the hands of his father of which they knew or should have known.

The Supreme Court affirmed the Court of Appeals for the Seventh Circuit in finding that a cause of action under section 1983 had not been set forth. The court held that neither the state nor its agencies or local officials have a general duty to protect an individual from private violence. Therefore, a state’s failure to protect an individual against the violence of private actors does not constitute a violation of due process. The court noted that when the state takes a person into its custody and holds him there against his will, the Constitution imposes a duty to assume a measured degree of responsibility for that individual’s safety and well-being. The DeShaney court did not find that such a special relationship existed in the circumstances of Joshua’s placement with his natural father.

Applying the reasoning of DeShaney, the court concludes that plaintiffs have set forth sufficient facts to state a cause of action pursuant to 42 U.S.C. §1983. Plaintiffs have asserted that Children’s Services, an agency of Erie County government, exercised control over J.F. as a result of her adjudication as a dependent child. By definition a “dependent child” is a child who, for a variety of reasons, is in need of protective intervention. 42 Pa.C.S. §6302. As a consequence of dependency, a child may be placed with a legal custodian who, among other things, has the “duty to provide for the care, protection, training and education and the physical, mental and moral welfare of the child. . .” 42 Pa.C.S. §6357. In this case, J.F. was placed under the care and supervision of Children’s Services who in turn was authorized to continue her placement in a foster home. Children’s Services had the additional responsibility of delineating a treatment plan and recommending and monitoring a schedule of supervision for J.F. with her natural mother.

An affirmative duty on the part of Children’s Services to protect J.F. arose from the relationship created as a result of the finding of dependency which brought J.F. entirely within the agency’s discretionary control. See Estelle v. Gamble, 429 U.S. 97, 97 S.Ct. 285 (1976); Youngberg v. Romeo, 457 U.S. 307, 102 S.Ct. 2452 (1982).

Within the context of a substantive due process analysis, it is the state’s capacity to restrict an individual’s freedom to act on his or her own behalf which gives rise to the duty to prevent a wrongful deprivation of liberty. It is not the act of restraining that offends the due process clause, but rather a state’s wrongful exercise of its otherwise legitimate right to control. DeShaney, supra, at 1006.

When an agency of government has been given the authority to control a child’s access to and contact with the social environment, there exists a concomitant responsibility to protect the person from foreseeable harm. While the degree of control and the personal attributes of the individual are of considerable importance in determining the nature and extent of the state’s prophylactic obligations, the character of the controlling mechanism is not determinative. Though not institutionalized, J.F. was in every way under the control of Children’s Services. Indeed, as a result of the dependency determination, Children’s Services stood “in loco parentis” and was obligated to protect the interests of the child. See In re Gault, 387 U.S. 1, 87 S.Ct. 1428, 18 L.Ed. 2d 527 (1967). Moreover, the agency was- specifically directed by order of court to exercise its discretion in determining an increase in visitations between J.F. and her natural mother. Accepting as true all well pled facts in plaintiffs complaint, there is simply no question that defendant, Children’s Services, exercised its responsibility to care for and supervise J.F. in a manner that resulted in physical and emotional harm. J.F., without recourse, was placed in an environment where she allegedly sustained continued physical, sexual and emotional abuse.

The holding of the Supreme Court in DeShaney cogently limits the application of section 1983 to circumstances indicating pervasive governmental control. Short of total institutionalization, it is difficult to imagine circumstances more indicative of the government’s ability to affect a child’s welfare than those that existed with regard to J.F.’s relationship with Erie County’s Office of Children and Youth. Unlike the abused child in DeShaney, J.F. was entirely within the graáp of the protective agency’s’ discretionary authority. It has not been asserted that Children’s Services failed to intervene to protect J.F. from third-party abuse which occurred in circumstances it did not create. For J.F. visitation with her abusive mother and the resultant exposure to her mother’s paramour and her brother is alleged to have been “at the insistence of and upon the recommendation” of Children’s Services and carried out under its supervision. If plaintiffs are able to meet their burden of proof in sustaining the allegations in their complaint, federal law provides an appropriate remedy.

Plaintiffs have filed preliminary objections in the nature of a motion to strike defendants’ supplemental brief and attached orders of this court’s Juvenile Division from consideration. This court shall deny plaintiffs’ motion finding that the orders objected to are a matter of récord and relevant and necessary to this court’s previous determination.

ORDER

And now, April 23, 1990, upon consideration of the preliminary objections of defendants in the nature of a demurrer, it is hereby ordered, adjudged and decreed that said demurrer is granted as to counts I, III, IV and VI of plaintiffs’ complaint and is denied as to counts II and V of plaintiffs’ complaint.

It is further ordéred that plaintiffs’ preliminary objection in the nature of a motion to strike is hereby denied.

       The Winnebago County authorities initially learned that Joshua DeShaney might be a victim of abuse in January 1983, when his father’s second wife notified the police. In January 1983, Joshua was admitted to a hospital with multiple bruises and abrasions, which prompted the examining physician to notify the Department of Social Services. A “Child Protection Team” was convened and the team decided that there was insufficient evidence of child abuse to place him in the custody of the court and Joshua was returned to the domicile of his father.
      A month later, thq DSS caseworker handling Joshua’s case was notified by emergency room personnel that Joshua had been treated for suspicious injuries. During the next six months, the caseworker visited the home on a monthly basis, during which she observed a number of suspicious injuries. In November 1983, the DSS was again notified of further treatment at the emergency room. On the caseworker’s next two visits to Joshua’s home, she was told that Joshua was too ill to see her. Despite these apparent suspicious circumstances, the DSS took no protective action throughout this entire period. DeShaney, supra, at 1001-2.


author: BAYLEY, J,

text:
    Commonwealth v. Herr

      Jeffrey S. Wasileski, assistant district attorney, for the commonwealth.

      J. Wesley Oler, for defendant.
    May 11, 1990
   BAYLEY, J,

Defendant, Raymond Herr, is charged with one count of riot on October 26, 1989, arising out of disturbances at the State Correctional Institution in Camp Hill where he was, at the time, a sentenced inmate. The criminal complaint charges that defendant:

“Did intentionally, knowingly or recklessly participate with John A. Pace, Robert Achuff, Anthony Blackwell and approx. 50 other inmates in the course of a felony or misdemeanor to-wit; criminal attempt (homicide and arson) in that he was with a group of approx. 50 rioters infront [sic] of the Control Center that was occupied by approx. 51 people. These rioyers [sic] were breaking windows and lighting mop heads and throwing then [sic] into the Control Center. The rioters were blocking the door infront [sic] of the Control Center and they were also yelling that they were going to kill the victims trapped inside the Control Center.”

Defendant was bound over for court following a preliminary hearing held before a district justice on February 23, 1990. He has filed a petition for writ of habeas corpus and has stipulated with the commonwealth that it shall be decided on the record of the proceedings of the preliminary hearing.

Taking the evidence in a light most favorable to the commonwealth shows that Daryl Adams, a correctional officer at the State Correctional Institution at Camp Hill, was in a control center inside the institution on October 26, 1989. He testified that inmates were outside trying to break in and gain access to the center. They were smashing glass and throwing things. He saw an inmate, Anthony Blackwell, throw a smoldering mop head, and he saw other inmates tear out an air conditioning unit and start fires. He testified that some inmates were yelling such things as, “We’re going to kill all you white motherfuckers,” or words to that effect, along with other obscenities. With respect to defendant, Raymond Herr, Mr. Adams testified that he saw him outside in the yard “roaming around, looking in.” Mr. Adams did not obsérve or hear defendant utter any of the obscenities or threats being made by the rioters, nor did he see him throw anything. He testified that the prevailing conditions in the institution at that time were “pandemonium,” and that prisoners had been forced to flee from their burning quarters. He answered “yes” to the question: “Basically, what you’re saying as far as Mr. Herr is concerned, is that you saw him present at the scene?”

The commonwealth maintains that this evidence is sufficient to detain defendant even though there is no evidence of any specific riotous acts committed by defendant. The commonwealth argues that since the entire prison population was to be in lockdown status, and inmates including defendant were to be in their housing units, that defendant can be convicted of riot based solely on the evidence that he was outside of his cell and cell block, and was at the scene while a riot was taking place.

In Pennsylvania the established method for testing a finding of a prima facie case pretrial is by a petition for a writ of habeas corpus. Commonwealth v. Hetherington, 460 Pa. 17, 331 A.2d 205 (1975). In Liciaga v. Court of Common Pleas, 523 Pa. 258, 566 A.2d 246 (1989), the Supreme Court stated that the standard for determining whether a defendant is properly held for court is:

“(a) that the record reveals a prima facie showing that a crime or crimes have been committed; Commonwealth v. Prado, 481 Pa. 485, 393 A.2d 8 (1978); and (b) that the defendant was in some way legally responsible. Commonwealth v. Mullen, [460 Pa. 336, 333 A.2d 755 (1975)].”

That the evidence shows there was a riot at the State Correctional Institution at Camp Hill at the time defendant is charged with a count of riot, is beyond cavil. The Crimes Code, at 18 Pa.C.S. §5501, defines the crime of riot as:

“A person is guilty of riot, a felony of the third degree, if he participates with two or more others in a course of disorderly conduct;
“(1) with intent to commit or facilitate the commission of a felony or misdemeanor;
“(2) with intent to prevent or coerce official action; or
“(3) when the actor or any other participant to the knowledge of the actor uses or plans to use a firearm or other deadly weapon.”

Our research reveals that in order to find defendant guilty of riot under section 5001, the commonwealth would have to prove beyond a reasonable doubt: (1) that this defendant participated with two or more others in the course of disorderly conduct, (2) (a) with intent to prevent or coerce official action, or (b) with intent to commit or facilitate the commission of a felony or misdemeanor, or (c) when this defendant or any other participant to the knowledge of this defendant used or planned to use a firearm or other deadly weapon. For persons to participate in the course of disorderly conduct as defined in section 5503 of the Crimes Code, they must (a) have a common intent to cause annoyance or alarm, or (b) as a group recklessly create a risk of annoyance or alarm while they engage in or encourage other members of the group who engage in, a course of (a) fighting or threatening or violent or tumultuous behavior, or (b) making unreasonable noise, or (c) using obscene language or making an obscene gesture, or (d) creating hazardous or physically offensive conditions by acts which serve no legitimate purpose of those who do them.

Defendant may not be convicted of riot if he was merely present at the State Correctional Institution during a riot even if he was out of his cell at a time when he should have been in his cell. In order to convict this defendant of riot requires proof that he actively participated in a riot. The essential element of riot is group action. A defendant participates with two or more others in the course of disorderly conduct if he either engages in or encourages such conduct to take place. If such group conduct is done with intent to facilitate the commission of a felony or misdemeanor, or with intent to prevent or coerce official action, or if defendant or any participant to the knowledge of defendant used or planned to use a firearm or other deadly weapon, then such group conduct of two or more others in the course of disorderly conduct becomes a riot; however, defendant, to be convicted of riot, must have engaged in or encouraged others to engage in such a riot. See Commonwealth v. Reeves, 255 Pa. Super. 409, 387 A.2d 877 (1978). See also, Commonwealth v. Zwierzelewski, 177 Pa. Super. 141, 110 A.2d 757 (1955).

Although intent may be' inferred from one’s “conduct and statements at the time of an incident,” see Commonwealth v. Wilks, 250 Pa. Super. 182, 378 A.2d 887 (1977), the only evidence presented by the commonwealth as to defendant, was that he was present in the State Correctional Institution during a riot. There is no evidence that he either engaged in or encouraged others to engage in the riot, or that he, in conjunction with others, participated in a course of disorderly conduct. The evidence shows that there were inmates at Camp Hill who were forced out of their cells by rioters who burned and destroyed their facilities. To suggest that every inmate who can be identified as being out of his cell and cell block during the course of a riot that demolished a substantial portion of the institution’s facilities, can be convicted of riot, without evidence of his participation in or his encouragement of such conduct, is incorrect. Since that is the sum and substance of the commonwealth’s case against this defendant, there has been no prima facie evidence showing that he committed a crime. Therefore, the following order is entered:

ORDER OF COURT

And now, May 11, 1990, defendant’s petition for a writ of habeas corpus is granted. The charge of riot against defendant is dismissed.

        Reeves was decided under section 5501 of the 1972 Crimes Code. Zwierzelewski is a prison riot case which arose under the Penal Code of 1939; however, it enunciates the principle that active encouragement or participation by a defendant is necessary to sustain a conviction on a charge of riot.


author: DOWLING, J,

text:
    Verica v. Commonwealth

      Daniel R. Sherzer, for plaintiff.

      James J. D.odd-o, for defendant.

      Peter J. Speaker, for additional defendant.
    March 23, 1990
   DOWLING, J,

The concept of the statute of limitations, in one form or another, is probably as old as man. One can go as far back as the Roman poet Ovid, who showed us the hapless beauty Psyche being told by the goddess Venus that she has only one night in which to perform an array of impossible feats if she wishes to save her life; or the even more powerful cadences of Christopher Marlowe, whose John Faustus is given 24 years by Mephistopheles in which to repent and save his soul — and who, as the deadline approaches, and knowing his own moral weakness only too well, cries out in despair:

“The stars move still, time runs, the clock will strike,
“The devil will come,
“And Faustus must be damned!”

But Faustus and Psyche, who came to such different ends, had one advantage over the parties to the instant action: a clear, absolutely unambiguous statement (from what were, by any estimate, eminently credible authorities) of the amount of time left to them in which to perform their allotted tasks. The litigants in the case at bar are, in the main, arguing over whether the periods of time set forth in the applicable law did or did not run against one another; a question which may well determine the degree to which some or all of these parties are entitled to remain before us. We will now see whether this case, in its present form, is entitled to follow Psyche to the security of Olympus, or must-be consigned with Faustus to the oblivion of dismissal.

The facts in this case are, to some .degree, a mixture of the procedural and the factual. On August 19, 1987, at the intersection of Pa. Route 42 and Pa. Route 220 in Sullivan County, Pennsylvania, the defendant, Commonwealth of Pennsylvania, through the medium of the Department of Transportation, was, at the timé, performing “skin patching” repairs on the highway. Plaintiff and the additional defendant, David M. Cavalieri, became involved in an auto accident, to which, it is. alleged, the repair work initiated by the commonwealth was a contributing factor.

After plaintiff filed his complaint on March 27, 1989, plaintiff and defendant agreed, by mutual stipulation, to delete the phrase “being otherwise negligent” from paragraph 5(j) of the complaint. This deletion-by-stipulation was filed with the prothonotary on May 25, 1989. On June 12, 1989, defendant PennDOT filed its answer and new matter to the complaint; and on that same date filed a third-party complaint joining David Cavalieri as an additional defendant. Plaintiff filed preliminary objections to the third-party complaint on June 23, 1989, alleging that the third-party complaint violated Pa.R.C.P. 2253, inasmuch as more than 60 days had passed after the service of the original complaint.

On December 11, 1989, defendant PennDOT filed a petition for change of venue, declaring that the proper venue for the case was Sullivan County rather than Dauphin County. Plaintiff filed a motion to dismiss the petition for change of venue on January 5, 1990, alleging that no issue of change of venue could be addressed until the preliminary objections regarding the propriety of the joinder of the additional defendant had been adjudicated, and that all pleadings filed by defendant PennDOT regarding the issue of venue, as well as the pleadings of the additional defendant, David Cavalieri, were premature and untimely until such adjudication took place.

Although argument has, thus far, only been . heard on the issues raised by the preliminary objections, regarding the propriety of the joinder of the additional defendant, we feel that it is incumbent upon us in this opinion to also address the venue question to some extent, since the extant pleadings in their totality treat the two questions as mutually dependent.

Plaintiffs basic argument is that PennDOT was in violation of Pa.R.C.P. 2253 when it attempted to join an additional defendant (Cavalieri) without the court’s permission more than 60 days after the original defendant was served. In addition, plaintiff argues that Cavalieri was already a defendant in the same action in Philadelphia County, so that the attempt at joinder is also a moot point. As to the venue question, plaintiff contends that service on the commonwealth is always proper in Dauphin County, where the state capital is located, and that the court cannot even address the petition for change of venue until it first decides whether Cavalieri has been properly joined as an additional defendant.

PennDOT’s responsive argument is that plaintiffs position on the venue question is unsupported by any authority, and that the joinder of Cavalieri did not violate the limitation period, since it was filed within 30 days of an amendment to plaintiffs complaint and is thus within the limits of Pa.R.C.P. 2253.

For the reasons set forth below, we hold in defendant’s favor on both the venue and filing limitations issues.

Pa.R.C.P. 2253, the nexus of the dispute in this case, reads as follows:

“Rule 3352. Time for Filing Praecipe or Complaint
“Neither praecipe for a writ to join an additional defendant nor a complaint if the joinder is com-. menced by a complaint, shall be filed by the original defendant or an additional defendant later than 60 days after the service upon the original defendant of the initial pleading of the plaintiff or any amendment thereof unless such filing is allowed by the court upon causé shown.”

For our purpose, of course, it is the words “any amendment thereof’ which are the “heart of the mystery,” to paraphrase the late Prince Hamlet. Both parties have long since stipulated to an amendment in plaintiffs complaint, declaring that the averment at paragraph 5(j), which contained the phrase “being otherwise negligent” would be stricken. This was done by filing the amendment at the prothonotary’s office on May 25, 1989. The complaint against Cavalieri, complained of in the instant proceeding, was filed on June 12, 1989. Since this was clearly within the 60-day period mandated by the rule, plaintiffs only recourse is to declare in his brief that the agreed-upon amendment was not a true amendment, but represented the deletion of “mere surplusage,” and should not be allowed to cause the extension power of rule 2253 to be brought into effect.

For this position, we can find authority in neither legal precedent nor common sense. While it is true that Pa.R.C.P. 76, headed “Definitions,” does not define the work “amendment” or, the term “amended pleading,” for purposes of the construction of the Rules of Civil Procedure (the legislature having apparently believed, no doubt foolishly, that there are some Anglo-Saxon words which do not yield to misapprehension, even by members of the legal profession), rule 126, headed “Liberal Construction and Application of Rules,” states: “The rules shall be liberally construed to secure the just, speedy and inexpensive determination of every action or proceeding to which they are applicable. The court at every stage of any such action or proceeding may disregard any error of defect of procedure which does not affect the substantial rights of the parties.” It was by way of construing this precise rule that the courts have, in their history, issued statements such as: .

“One purpose of third-party procedure is to avoid á multiplicity of suits by adjudicating in one suit rights and liabilities of all parties to a single transaction which constitutes cause of action, and applicable rules should, if possible, be construed to accomplish such purpose.” Vaughan v. Womeldorf, 366 Pa. 262, 77 A.2d 424 (1951).

As well as:

“[The requirement of this rule that the Rules of Civil Procedure] be liberally construed is particularly applicable to controversies involving rules governing third-party procedure. Procedural rules in such cases should be construed to accomplish purpose df avoiding multiplicity of suits.” Martinelli v. Mulloy, 223 Pa. Super. 130, 299 A.2d 19 (1972).

Since we are here dealing with precisely the situation which the courts in Vaughan and Martinelli, supra, anticipated, it would seem to us highly improper to ignore the clear guidelines which their pronouncements have laid down for us.

Also, we consider plaintiffs reliance on the case of Biello v. Bryant, 203 Pa. Super. 175, 199 A.2d 506 (1964), to be misplaced on no less than three separate grounds. The Biello court stated that the addition of the phrase “which automobile was proceeding westwardly on Pine Street” to a complaint for injuries suffered in a motor vehicle accident would not be considered an “amendment” for purposes of allowing Pa.R.C.P. 2253 to kick into effect. We can but quote the pertinent language from Biello to show just how far afield it is for our present purposes:

“Howbeit, it is our view that the case at bar does not call for a literal interpretation of the rule. It presents a different procedural situation. The distinguishing feature is that a previous effort by appellants to join the additional defendant had been refused by the court order of April 15, 1963. To now permit a belated joinder by means of a stipulation amending the complaint in an inconsequential and immaterial particular would bring about a circumvention of the court’s prior order refusing the joinder. A markedly similar situation arose in Heisey v. Horne, 9 Cumberland L.J. 88, wherein President Judge Shughart aptly stated: ‘To hold that the filing of the amended complaint in this case opens the way for the defendant to bring in additional defendants whose joinder was refused by an order of court filed almost three years ago, would cause slavish adherence to the letter of one rule to do violence to the spirit and purpose of all of the Rules of Civil Procedure. Such a result cannot be reached.’ ” Biello, supra, (emphasis supplied)

First, and most importantly, there was no prior court order, in the case at bar, refusing the joinder of the additional defendant David Cavalieri. Since it is this factor which the Biello court called “the distinguishing feature,” it is a little difficult for us to see to what purpose plaintiff has referred to this case. There is, in any event, no suggestion in the present case that defendant PennDOT’s invocation of rule 2253 is based upon a desire to make an end run, as it were, around the court’s already-expressed intent. Second, the language deleted by stipulation in the present case refers to elements of the cause of action itself; the phrase “being otherwise negligent” could have theoretically served as the basis for separate, and additional, allegations by plaintiff against defendant, especially if defendant had made that phrase the basis of a motion for more specific pleading under Pa.R.C.P. 1017(b)(3). This was not true of the language deleted in Biello, which merely described in greater detail an action which was already set forth in the complaint. Third, the Heisey court, on which Biello relies, was clearly irritated at having to re-address a matter which had last been raised nearly three years earlier. To put the matter with Gandhian restraint, that is not the case in the present instance. Plaintiffs initial complaint was filed on March 27, 1989; the stipulated amendment was filed on May 25, 1989; and the third-party complaint followed on June 12, 1989. A scenario covering exactly 11 weeks (the period from plaintiffs complaint to the third-party complaint) can hardly be equated with a period of 156 weeks (the lapse of time in Heisey).

We feel that the influence of these three factors is as resoundingly dispositive of this issue as any authority one could reasonably hope to find.

We might add that there was a readily available course of action open to plaintiff in the current matter, by which this entire controversy could have been averted; namely, to have added a sentence to the written stipulation stating that “this revision shall not be considered to be an ‘amendment’ under the terms of Pa.R.C.P. 2253.” When one realizes that the stipulation was filed on May 25, 1989, just two days before the 60-day time limit would have run (as to the original complaint), there is an inescapable sense that plaintiff, in this instance, may have snatched defeat from the jaws of victory. Had he simply done nothing as to any deletions or amendments to his own complaint, defendant would either have had to hastily file the third-party complaint or be shut out from ever doing so. This is a particularly telling point in light of the fact that plaintiff has since described the deleted language (his own language, we would add) as “mere surplusage.” If this was indeed the case, we are at a loss to see why plaintiff chose to render himself vulnerable to a procedural blitzkrieg for the sake of a purely technical alteration. As Marc Antony found out, when he “kissed away kingdoms and provinces” by leaving the battle of Actium at the crucial moment, all for the sake of an hour’s dalliance with Cleopatra, it can be fatal to sacrifice a greater consideration to a lesser one; and that, in our view, is precisely what the plaintiff, in this instance, has done.

Nor are we convinced by the argument that PennDOT’s joinder of the additional defendant, David Cavalieri, is “moot,” since he is already a defendant in Philadelphia County in the same action. The obvious remedy for this situation is, of course, a motion for consolidation of the actions under Pa.R.C.P. 213, subject to the transfer provisions of Pa.R.C.P. 1006. As between the defendant — who, in our view, has availed himself of a procedurally correct mechanism for the joinder of an additional defendant — and plaintiff — who can, as the moving party, transfer the Philadelphia action to, the county of the instant action — we feel that it is up to’the latter party to resolve whatever discrepancies there may be in this situation.

As to the argument regarding the venue issue itself, it can be disposed of in short order. It is, quite frankly, difficult for us to imagine a situation more precisely on point with the problem contemplated in 42 Pa.C.S. §8523(a) than is the instant case:

“Venue — Actions for claims against a commonwealth party may be brought in and only in a county in which the principal or local office of the commonwealth party is located or in which the cause of action arose or where a transaction or occurrence took place out of which the cause of action arose. If venue is obtained in the Twelfth Judicial District (Dauphin County) solely because the principal office of the Commonwealth party is located within it, any Judge of the Court of Common Pleas of Dauphin County shall have the power to transfer the action to any appropriate county where venue would otherwise lie. ” (emphasis supplied)

In the current instance, it is apparent to us that Sullivan County is the only proper venue for this case. Where the cause of action arises in Sullivan County; where the investigating officer lives in Sullivan County; where defendant (PennDOT) not only has offices in Sullivan County, but has all personnel who are involved in this transaction located in that county; and where plaintiff is domiciled in Philadelphia, which is several hours by car from both Dauphin County and Sullivan County, we cannot conceive of a 'more clear-cut mandate for a change of venue to Sullivan County.

Since the petition for change of venue has not yet been listed for argument, it seems, at the least, probable that the preliminary objections will be decided first. We will not dismiss this petition, but will entertain it at the proper time, should it be necessary to do so. But since there is no authority stating that a petition for change of venue must be decided either before or after a motion to dismiss for lack of conformity to the rules of court, we would strongly advise the parties to agree among themselves to a transfer and consolidation, by stipulation, of all existing actions that have arisen on these facts, to Sullivan County. We are morally certain that this will be our recommendation, should the matter come before us, and we are certain that the parties to this action have much better uses to make of their (and our) time than to press on with a trial-by-combat, when the outcome is already a foregone conclusion.

Accordingly, we enter the following

ORDER

And now, March 23, 1990, after a hearing on the above matter, and after a review of all briefs and pleadings pertinent to it, we dismiss the preliminary objections of plaintiff, John M. Verica, as to the joinder by defendant PennDOT of the additional defendant David Matthew Cavalieri, and instruct defendants to list the petition for change of venue for argument without delay. The court likewise dismisses the objections of plaintiff John M. Verica as to any prematurity and/or untimeliness in the pleadings of defendant PennDOT and/or additional defendant David M. Cavalieri, and declines to dismiss defendant PennDOT’s petition for change of venue.

         Doctor Faustus, scene 18.


author: GEORGELIS, J.,

text:
    Ned Bard and Co. v. General Motors Corp.

      Terry A. Warco, for plaintiff.

      Patricia Shukis-Fraser, for defendant General Motors Corp.
    April 12, 1990
   GEORGELIS, J.,

Before the court is the motion for partial summary judgment of defendant, General Motors Corporation. Briefs have been filed, and the motion is, therefore, ready for disposition. For the reasons stated below, it will be granted.

This is an action in which plaintiff seeks to recover the value of its Peterbilt tractor, which, on April 22, 1987, while it was parked, caught fire and was totally destroyed as the result of an electrical fire. The complaint alleges that the tractor was manufactured and sold by defendant Peterbilt Motors Company, which, in manufacturing it, used a starter and other electrical components manufactured by GM and a starter which had been rebuilt by defendant Motor and Ignition Service. It states causes of action in negligence, strict liability and breach of warranty against each of the three defendants. GM’s motion seeks summary judgments as to the negligence and strict liability causes stated against it in counts IV and V, respectively. The only damages, which are alleged in the complaint and for which plaintiff seeks recovery, are for the tractor itself.

For its motion, GM relies on Rem Coal Company Inc. v. Clark Equipment Company, 386 Pa. Super. 401, 563 A.2d 128 (1989), which held that negligence and strict liability causes of action are not stated where the only damage is to the product itself. Plaintiff contends that Rem Coal is distinguishable because it did not deal with the manufacturer of a component part, as is the case here with GM and its starter and other electrical components. In its reply brief, GM refers us to King v. Hilton-Davis, 855 F.2d 1047 (3d Cir. 1988), which dealt with the negligence and strict liability of a supplier of a component part. We believe that GM’s position accurately reflects the current status of Pennsylvania law on this issue.

In Rem Coal our Superior Court, adopting the standard unanimously adopted by the U.S. Supreme Court in East River Steamship Corp. v. Transamerica Delaval Inc., 476 U.S. 858, 106 S.Ct. 2295, 90 L.Ed. 2d 865 (1986), and presenting a comprehensive analysis of the issue, held that Pennsylvania’s breach of warranty law provides the complete remedy to a disappointed purchaser for the loss of a commercial product and stated as follows:

“[Njegligence and strict liability theories do not apply in an action between commercial enterprises involving a product that malfunctions where the only resulting damage is to the product itself.” Rem Coal Company Inc. v. Clark Equipment Company, 386 Pa. Super. 401, 412-3, 563 A.2d 128, 134 (1989).

The basic rationale of the Rem Coal holding is that the goals of tort theories of recovery are not implicated in a product malfunction case involving only an economic loss and that the public policy to provide the public protection from unsafe products is not involved’ where there is damage only to the product and no personal injury or damage to other property.

We agree with plaintiff that Rem Coal did not involve a component part manufacturer, but we believe that its holding can rationally be extended to the case before us. That is, we believe that it is much more logical to apply the holding in Rem Coal than to draw the distinction which plaintiff makes. Allowing that distinction would allow plaintiff greater rights as to a component part manufacturer than as to the final product manufacturer.

This is exactly the rationale which the Third Circuit Court of Appeals set forth in King v. Hilton-Davis, 855 F.2d 1047 (3d Cir. 1988), when it stated, at 1051-2, as follows:

“We perceive no principled basis for affording the purchaser of a defective product greater relief against the manufacturer of a component part that has rendered a product defective than against the manufacturer of the assembled defective product. This counsels against looking to the component part to define the product and ‘economic loss.’ As the Court of Appeals for the Fifth Circuit recently observed:
“ ‘We see no rational reason to give the buyer greater rights to recover economic losses for a defect in the product because the component is designed, constructed, or furnished by someone other than the final manufacturer. The buyer ordinarily has no interest in how or where the manufacturer obtains individual components. The buyer is usually interested in the quality of the finished‘product, and is content to let the manufacturer decide whether to do all the work or delegate to others.’ 825 F.2d 925, at 929.”

The rationale of the King holding is that, where the purchaser of a defective product sues to recover damages for the defect, the relevant product is what the purchaser bargained for, i:e., the whole product and not its individual component parts, and that his remedy is limited to a contract-based recovery.

The King court noted that, in Aloe Coal Co. v. Clark Equipment Co., 816 F.2d 110 (3d Cir. 1987), cert. denied, _ U.S. _, 108 S.Ct. 156, 98 L.Ed. 2d III (1987), it had predicted that the Pennsylvania Supreme Court would adopt, as Pennsylvania law, the U.S. Supreme Court’s holding in East River. Even though that issue has not reached the Pennsylvania Supreme Court, the prediction was accurate to the extent that our Superior Court did so, i.e., adopt the East River holding, in Rem Coal, and in doing so, noted the Aloe Coal and King holdings and noted that the Aloe Coal holding agreed with its holding in Rem Coal.

The King court used its earlier prediction as a basis for predicting that Pennsylvania law would also ultimately encompass the King holding as to manufacturers of component parts. The accuracy of the earlier prediction, based on the Rem Coal analysis and holding, gives us confidence that King would accurately state Pennsylvania law on the component part issue, when1 it ultimately reaches our appellate courts. Furthermore, we believe that the-King rationale and holding make eminent sense.

With this conclusion, we believe that GM is entitled to a judgment as a matter of law on counts IV and V of the complaint. The parties agree on the facts involved and thereby concede that there is no genuine issue as to any material fact. See Pa.R.C.P. 1035(b) and Washington Federal Savings and Loan Association v. Stein, 357 Pa. Super. 286, 288-9, 515 A.2d 980, 981 (1986).

Accordingly, we enter the following

ORDER

And now, April 12, 1990, for all of the reasons stated in the foregoing opinion, the motion for partial summary judgment of defendant, General Motors Corporation, is granted, and counts IV and V of the complaint are dismissed.


author: McGINLEY, J.,

text:
    Laxson v. Lenger

      William J. Fries, for plaintiff.

      Henry S. Perkin, for defendant.
    March 6, 1990
   McGINLEY, J.,

The matters before the court are defendant’s preliminary objections to count II of plaintiffs complaint, which raise the issue whether plaintiff lessor of a mobile home lot from defendant lessee has alleged sufficient facts to maintain a private cause of action under the “Unfair Trade Practices and Consumer Protection Law.” 73 P.S. §201-1 et seq. For the reasons hereinafter stated, we sustain in part and deny in part defendant’s preliminary objections, giving plaintiff the opportunity to replead.

A demurrer admits all well-pleaded material facts in plaintiffs complaint, as well as all inferences reasonably deducible therefrom. It does not admit conclusions of law. A demurrer will be sustained only when the complaint is defective on its face and it is clear that the law will not permit recovery. Gillespie v. St. Joseph’s University, 355 Pa. Super. 362, 513 A.2d 471 (1986), citing Hunter v. Port Authority of Allegheny County, 277 Pa. Super. 4, 419 A.2d 631 (1980).

The “Unfair Trade Practices and Consumer Protection Law” makes unlawful “unfair methods of competition” and “unfair or deceptive acts or practices in the conduct of any trade or commerce.” 73 P.S. §201-3. Included within the definition of “unfair methods of competition” and “unfair or deceptive acts or practices” is “engaging in any other fraudulent conduct which creates a likelihood of confusion or of misunderstanding.” 73 P.S. §201-2(4)(xvii). The law provides a private cause of action to: “Any person who purchases or leases goods or services primarily for personal, family or household purposes and thereby suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment by any person of a method, act, or practice declared unlawful by section 3 of this act.” 73 P.S. §201-9.2.

Plaintiff alleges that defendant violated 73 P.S. §201.2(4)(xvii) by the following conduct:

“(a) In fraudulently and unreasonably withholding his approval of the prospective purchasers of plaintiffs mobile home for tenancy in his mobile home park.
“(b) In falsely representing that he could not approve any purchasers of plaintiffs mobile home for tenancy for the claimed reason that the space was needed for other tenants.
“(c) In insisting that he possesses a superior right to deny tenancy to prospective purchasers merely because other tenants would need the lot space in question, even assuming the claim of defendant to, be true.
“(d) In otherwise engaging in fraudulent conduct creating a likelihood of confusion or misunderstanding.” Plaintiffs complaint, paragraph 18.

Defendant contends that plaintiff does not have a private cause of action because he has failed to allege the purchase or lease of goods or services primarily for personal, family or household purposes.

Pennsylvania appellate courts have found that the law applies to both the leasing of residential real estate, Commonwealth v. Monumental Properties Inc., 459 Pa. 450, 329 A.2d 812 (1974); and the sale of residential real estate. Gabriel v. O'Hara, 368 Pa. Super. 383, 534 A.2d 488 (1987). Although the matter before us involves a somewhat different scenario, inasmuch as it concerns the lease of real property, and not the abode, in light of the broad language and reasoning of the above opinions, we conclude that plaintiff should not be barred from pursuing a private cause of action at this stage of the proceedings.

Defendant also argues that plaintiff did not lease the property as a result of fraudulent conduct of defendant. In Mason v. National Central Bank, the court construed 73 P.S. §201-9.2 as follows: “The statute says that a person must purchase or lease goods and ‘thereby’ lose money or property, based upon a deception or unfair practice. We consider that the loss must follow the purchase, and that the purchase itself must have been due to a deceptive practice.” 19 D.&C.3d 229, 232 (1980). On the other hand, in In re Smith, the Third Circuit Court of Appeals provides a convincing explanation why 73 P.S. §201-9.2 should not be construed in such a restrictive manner. 866 F.2d 576, 582-3 (1989).

Technically, neither of these decisions constitute binding precedent. However, we find the reasoning of the Third Circuit Court of Appeals to be persuasive. We will not preclude plaintiff from pursuing his private cause of action, even though his pleading alleges fraudulent conduct when plaintiff attempted to transfer his interest in the lease to third parties rather than when plaintiff himself entered into the lease.

Defendant also argues that plaintiff has failed to allege sufficient facts showing that defendant’s conduct was fraudulent within the meaning of the law. Specifically, defendant contends that the facts pled fail to establish the elements of common-law fraud; i.e.: (1) a misrepresentation of a material fact; (2) made with knowledge of its falsity and with the intention to deceive; (3) where the victim relies upon the misrepresentation to his/her detriment. Edelson v. Bernstein, 382 Pa. 392, 115 A.2d 382 (1955); Shane v. Hoffmann, 227 Pa. Super. 176, 324 A.2d 532 (1974).

Plaintiff asserts that the fraud referred to in 73 P.S. §201-2(4)(xvii) is not common-law fraud, but rather is a statutory concept arising out of the law. However, the law does not contain a statutory definition of “fraud.” Moreover, federal courts in interpreting this provision have found that the statute requires a showing of the elements of commonr law fraud. In re Smith, supra, at 583.

Although federal opinions are not binding upon us, we again find the Third Circuit’s interpretation persuasive. We therefore conclude that plaintiff must plead facts showing that defendant’s conduct amounted to common-law fraud.

Plaintiff’s complaint accuses defendant of making a misrepresentation. We find, however, that it does not allege any facts tending to show that defendant knew the representation to be false or that it was done with the intent to deceive. Inasmuch as it is possible to cure this deficiency by amended pleading, we will give plaintiff an opportunity to replead.

ORDER

Now, March 6, 1990, following oral argument on January 3, 1990, consideration of the briefs of the parties, and for the reasons expressed in the accompanying opinion, it is ordered that the preliminary objection of defendant Joe Lenger, t/a Center Valley Mobile Home Park, in the form of a demurrer to count II of plaintiffs complaint, is denied in part and sustained in part. It is further ordered that plaintiff shall have 20 days from the service of this order to file an amended complaint.

      . 73 P.S. §201-3.

      . Although defendant did not brief this issue, it was discussed by both parties at oral argument and we therefore determine that it is an appropriate matter for our disposition.