author: PADILLA, J.,

text:
    Dockside Assocs. Pier 30 LP v. Board of Revision of Taxes

      C.P. of Philadelphia County,
    March Term, 2013
    No. 3577; 2258 CD 2014

      Gaetano Paul Piccirilli, III, Patrick Michael Northen, Lawrence G. McMichael and Michael Patrick Gallagher, for appellants.

      James Christopher Vandermark, Amanda Justine

      Dougherty and Jeremiah Vandermark, for appellee.
    Feb. 20, 2015-
   PADILLA, J.,

Dockside Associates Pier 30 LP (“appellant”), appeals from this court’s denial of its appeal from the final decision of the Board of Revision of Taxes (“appellee”) regarding the tax assessment of one hundred and fifty three (153) condominiums.

PROCEDURAL HISTORY

On March 23, 2013, appellant filed an appeal of the February 27, 2013 final adjudication of the board.

On September 3, 2013, this court received the certified record from appellee.

On April 21, 2014, appellee filed its brief.

On May 8, 2014, appellant filed its brief.

This court heard argument and evidence in this case over the course of four days: August 11, August 12, August 15, and August 25 of 2014.

On November 5, 2014, this court denied appellant’s appeal.

On December 3, 2014, appellant filed a timely notice of appeal to the Commonwealth Court of Pennsylvania.

On December 4, 2014, this court issued its order pursuant to Pa. RAP. 1925(b), directing appellant to file its concise statement of matters complained of on appeal within twenty-one (21) days.

On December 23, 2014, appellant filed its concise statement of matters complained of on appeal, listing eleven (11) alleged errors, averring that this court erred as its order was not supported by substantial evidence; it failed to make findings regarding the fair market value of the subject properties despite the conflicting evidence of fair market value; that this court erred in finding appellant did not meet its burden of proof to overcome the City’s prima facie case; that this court “erred in giving deference to the city’s opinion of value instead of conducting a proper de novo review;” that this court erred in finding appellant’s evidence not reliable or credible; that this court erred in finding that appellants had offered no authority regarding the use of the fractured condominium approach; that this court erred in finding the sales comparison approach to be the correct method; that the court erred in finding that the highest and best use of the subject property was as units for sale; that this court erred in refusing to admit for impeachment purposes evidence that the City’s expert had “made prior inconsistent statements” in previous appraisals; that this court erred in accepting the City’s expert testimony as credible; and in finding that the Pennsylvania Uniform Condominium Act precludes treatment of multiple units within the same condominium project as an integrated economic unit.

FACTUAL HISTORY

Dockside Associates Pier 30 LP is the record owner of the subject property, a condominium building located at 717 S. Christopher Columbus Boulevard, Philadelphia, PA 19147. The property is located in a CMX-3 mixed-use district and zoned accordingly. The property is a sixteen story building containing 242 residential units and three stories of private parking garage. Construction was completed in September 2002, and the Dockside Condominium Association was formed April 4,2006. The properties possessed a ten year property tax abatement that expired in 2012. Since 2007, the tax year following the creation of the Condo Association, the Office of Property Assessment (“OPA”) assessed a separate market value for the Units.

The subject properties were inspected by A. R. Hughes and Associates on January 11, 2013 with an effective valuation date of December 31,2013. The City’s appraisal report listed a separate value for each of the one hundred and fifty two (152) units and was assessed using a sates comparison approach and highest and best use analysis (noting the highest and best use was to sell the units on the open market for residential owner occupants) and a 32% established predetermined ratio for the tax rate. See attached order; see also notes of testimony, hereinafter N. T., at 8/11/14 at 17. Additionally, it assessed the fair market value of the single commercial unit at $4,524,600.

On February 7, 2013, Harvey M. Levin (“Levin”), using a “fractured condominium” model and an Income capitalization approach to value, produced a summary appraisal report for Dockside noting an implied market value for assessment purposes for the taxable year of $20,549,868; however, as a result of his analysis, he appraised the subject properties’ value collectively at $14,965,000. See certified record; summary appraisal report.

Following this appraisal report, Dockside filed a separate appeal for each Unit, challenging the assessed market value. Following public hearings on February 21, 2013, the board reviewed the evidence presented and, on February 27, 2013, denied proposed reductions to the 2013 market values.

As noted above, this court heard argument and testimony over the course of four days. This court has considered all of the evidence and testimony presented and will address the facts relevant to its decision herein.

Testimony presented established that the OPA assesses condominium units based on a sales comparison approach. N.T. 8/11/14 at 22-23; 33. A condominium unit is considered a separate property with a separate tax identification number, and regardless of how many condominium units a single owner possesses, each is assessed with its own fair market value. N. T. 8/11/14 at 24. The residences at Dockside have been assessed as single units since 2007. N. T. 8/11/14 at 25. The OPA relies upon comparable sales in determining the market values of individual units. N. T. 8/11/14 at 33. The 2013 assessed value had a predetermined ratio of 32% set by set. N. T. 8/11/14 at 26. Dockside objected to the fact that the OPA assessor had not personally visited the Dockside Condominiums, but had only driven by them. N. T. 8/11/14 at 36-38.

Dockside presented testimony that, in 2006 and 2007, it had sold sixty-one (61) condominium units. N. T. 8/11/14 at 50. However, beginning in 2008 until the present day, it has sold forty-two (42) condominium units, on average six (6) units per year. N. T. 8/11/14 at 50. In total, it has sold one hundred and three (103) units out of a total of two hundred and forty-two (242) units. N. T. 8/11/14 at 53. Six (6) of those sales were in 2013 and several were for significantly more money than Dockside’s proposed market values. N. T. 8/11/14 at 93, For example, Unit 1020, allocated a market value of $118,138 by Dockside’s method, sold on May 6, 2013 for $625,462. N. T. 8/12/14 at 73-74, 77.

Levin testified for Dockside that the instant case was “the first fractured condominium that has been appraised in this part of the country.” N. T. 8/11/14 at 107. Using an income-based approach, Levin examined the history of the property, operating statements, typical leases, floor plans, etc. N. T. 8/11/14 at 116-119. He utilized the income-based approach due to the “nature, character, and history of Dockside;” this involves looking at the gross income attributed to the building and conducting appropriate expenses to arrive at the net operating income, finding the capitalization rate, and dividing net operating income by that rate to yield an indication of market value. N. T. 8/11/14 at 120, 136. Levin valued the Dockside units as “one property, a fractured condominium, with the value indicated by the sales...[and] the contribution that each unit made to operating the income of the entire building.” N.T. 8/11/14 at 127.

Levin concluded that the net operating income was $1,964,00.00. N. T. 8/11/14 at 140. He used an overall capitalization rate of 113/4. N. T. 8/11/14 at 141. Thus, he concluded that the fair market value of the unsold units was $14,965,000 for the taxable year 2013 and $17,500,000 for the taxable year 2014. N. T. 8/11/14 at 141-142. Levin averred that, in a fractured condominium, there are “no sales” and therefore no comparables. N. T. 8/11/14 at 150. Levin averred that Dockside would be “stuck” with the unsold units for a very long time, and that it could take as long as twenty (20) years to achieve a sellout of all units. N. T. 8/12/14 at 82-83.

The City presented as rebuttal the expert testimony of John Rush (“Rush”), a certified real estate appraiser, who came to the conclusion that the opinions of value expressed by Levin were not credible, based upon his reading of the report; his experience; and his general knowledge of the real estate market, N. T, 8/15/14 at 15, 17. Rush testified that the City uses the sales comparison approach, which is an “evaluation technique wherein the appraiser collects data concerning the sales of comparable properties, makes adjustments to that data said [sic\ for the differences between comparable sales and subject property. After the adjustment process has been completed, the data should point to what the value of the estate should be.” N. T. 8/15/14 at 20. This is a common method for appraising condominium units. N. T. 8/15/14 at 15.

Rush, who had performed valuations of fractured condominium units, expressed concerns over Levin’s lack of presentation of market data, i. e. comparable property rents being received from the marketplace, discussion and analysis of vacancy rates comparable to the marketplace, and analysis and discussion of operating expenses based upon that of similar properties. N. T. 8/15/14 at 24. Rush stated that even with the income capitalization method, the overall capitalization rate should be derived from the market for a market value opinion. N. T. 8/15/14 at 24. Rush opined that normally, in such a case, to remain consistent with the valuation technique, the appraiser would have collected and performed an analysis for the rest of comparable properties in the area. N. T. 8/15/14 at 31-32. Additionally, Rush testified that the report was inaccurate with regard to its vacancy projection because in his practice of appraising multifamily dwellings, the general market vacancy was nowhere near twenty (20) percent. N. T. 8/15/14 at 46. He recommended that the City not rely upon the Levin appraisal as an indication of value. N. T. 8/15/14 at 62.

Albert R. Hughes, III (“Hughes”), real estate appraiser, testified for the City that each condominium unit, upon creation, is assigned an individual tax identification number. N. T. 8/15/14 at 104. Each condominium unit is considered a separate property saleable unto itself. N. T. 8/15/14 at 104. Hughes appraised one hundred fifty-two (152) condominiums in the Dockside building as individual condominium units and completed an appraisal report. N. T, 8/15/14 at 105. Hughes defined market value as “the price which the purchaser, willing but not obliged to buy, would pay an owner, willing but not obliged to sell, taking into consideration all uses to which the property is adapted and might in reason be applied.” N. T. 8/15/14 at 109. In performing the appraisal, Hughes used sales as well as resales in several local condominium projects along the Philadelphia waterfront. N. T. 8/15/14 at 125-128. Hughes determined the highest and best use of the condominium units was residential occupancy and future sales to the end user, and to come to this conclusion he considered: legal permissibility; physical possibility; financial feasibility; and maximum productivity. N. T. 8/15/14 at 130-131.

Hughes also testified that a number of other residential condominium units, including Society Hill Towers and Pier Three Condominiums, are within a mile of Dockside; the South Street overpass is quite close to Dockside, as well as grocery stores and shopping between one and one quarter miles from the properties. N. T. 8/15/14 at 112-113, 126-128.

In a surrebuttal, John Hosey (“Hosey”) testified for Dockside that he found Rush’s report inaccurate as to the assessment of fractured condominiums because apartment building sales are irrelevant to a fractured condominium analysis. N. T. 8/25/14 at 15-16,24. Hosey felt that Levin’s report was as complete as possible. N. T. 8/25/14 at 16.

DISCUSSION

In a tax assessment appeal, the appellate scope of review is limited to a determination of whether the trial court committed an error of law or abused its discretion in determining a property’s fair market value. B.P. Oil Co., Inc. v. Delaware Cnty. Bd. of Assessment Appeals, 114 Pa. Cmwlth. 549, 552, 539 A.2d 473, 474-75 (1988).

In any appeal of a real estate tax assessment, the trial court is required to make a determination of the market value and assessed value of the subject property, and the matter is heard de novo. 72 P.S. § 5020-518.2; Green v. Schuylkill Cnty. Bd. of Assess. Appeals, 772 A.2d 419, 425 (Pa. 2001). The court must “independently determine the fair market value of the parcel on the basis of the competent, credible and relevant evidence presented by the parties.” Id. Where there is conflicting evidence regarding the market value of the property the trial court commits error when it does not make findings regarding fair market value. Fosko v. Bd. of Assess. Appeals, 646 A.2d 1275, 1279 (Pa. Cmwlth. 1994). The court should weigh evidence, determine issues of credibility, and resolve conflicts in favor of at least one of the parties. Id.

In a de novo assessment appeal the taxing authority first enters the official assessment record into evidence and may provide testimony from an assessment officer. Herzog v. McKean Cnty. Bd. of Assess. Appeals, 14 A.3d 193, 200 (Pa. Cmwlth. 2011). This establishes a prima facie case for the validity of the assessed market value. Id. The taxpayer then puts on its case-in-chief and bears the burden of producing reliable, credible evidence. Id. In an assessment appeal, all matters of credibility and evidentiary weight are within the province of the trial court. Mellon Bank, N.A. Appeal, 78 Pa. Commonwealth Ct. 463, 467 A.2d 1201 (1983). Once the taxpayer meets the burden, the OPA’s assessment is no longer considered; the taxpayer then bears the burden of persuading the court of the merits of its appeal. Id.; Green, 772 at 426, Once the case-in-chief closes the taxing authority may rebut the taxpayer’s evidence. Id. This court conducted a full de novo assessment, with both sides presenting expert testimony and exhaustive argument over the course of four (4) days. As noted above, all matters of credibility and evidentiary weight are within the province of the trial court.

To find the assessed value the court applies the “established predetermined ratio” unless “the common level ratio” as determined by the state tax equalization board varies by more than 15%. 72 P.S. § 5020-518.2(b). In 2013, the EPR was 32% and the CLR was 30.6%. Phila. Code § 19-1301(l)(b).

Thus, considering the dispute between the parties existed mainly in the method of determining said market value, the issue before the court is a narrow one: which method of calculation was correct. In the instant case, this court did not find Dockside’s evidence credible. Although Dockside presented exhaustive testimony and argument regarding their method of appraisal, they offered no real authority regarding the appropriateness of a “fractured condominium” and income capitalization approach as opposed to the City’s method, utilizing a sales comparison approach and its view that the highest and best use was residential sales of individual condominium units with separate tax identification numbers to the end user. Dockside argued that there were no comparable sales because Dockside is isolated; however, the City presented testimony that comparable properties, including the Society Hill Towers, were not far away; additionally, Hughes testified that the South Street overpass is quite close, as well as grocery stores and shopping between one and one quarter miles from the properties. N. T. 8/15/14 at 112-113, 126-128.

Ultimately, Dockside could not provide authority as to why this court should ignore the Pennsylvania Uniform Condominium Act, also defining each condominium as a separate parcel to be taxed and assessed separately. See 68 Pa.C.S. § 3105. Additionally, following direct examination of Harvey Levin and rebuttal testimony from John Rush, this court did not find Dockside’s expert assessment evidence reliable or credible.

Consequently, this court upheld the City’s fair market value assessment as reflected by the proposed values in the appraisal report prepared by A. R. Hughes & Company as attached in the Schedule of Market values, and that the fair market value of commercial unit, case no. 130303577 was $4,524,600.00 for tax year 2013; $4,524,600.00 for tax year 2014; and $4,524,600,00 for tax year 2015.

Appellant raises additional issues in its statement that were not addressed in this court’s findings of fact and conclusions of law, namely that this court erred in refusing to admit for impeachment purposes evidence that the City’s expert had made prior inconsistent statements in three previous appraisals. A witness may be impeached with proof that on a previous occasion he made a statement inconsistent with his present testimony; a litigant also has the privilege of offering rebuttal testimony. Feingold v. Se. Pennsylvania Transp. Auth., 512 Pa. 567, 575-76, 517 A.2d 1270, 1274 (1986).

On August 15, 2014, appellant during its cross examination of Hughes, attempted to introduce appraisals of the subject properties made by Hughes in 2008. Appellee objected, and Hughes explained to this court that ethical rules used in the Uniform Standards of Professional Appraisal Practice prohibited him from discussing any appraisal performed for other clients without their permission. N. T. 8/15/14 at 193. Appellee argued, additionally, that it could not be sure whether the appraisal was prepared for tax purposes, financing, or settlement purposes. N. T. 8/15/14 at 193-194. Hughes stated that the appraisal was not made for the purpose of the tax assessment. N. T. 8/15/14 at 194. Appellant attempted to introduce an appraisal made in 2005 for M&T Bank, to which the appellee raised the same objection. N. T. 8/15/14 at 195-196. After testimony that the appraisal was not made for a tax assessment, this court sustained the objection, N. T. 8/15/14 at 195-196.

On August 21, 2014, this court heard argument on an emergency motion to quash subpoenas of Hughes and an incorporate designee of M&T Bank filed by appellee. N. T. 8/21/14 at 6. Appellee argued that on August 15, 2014, appellant did not indicate that there were other surrebuttal witnesses they would wish to call, and that appellee had only that day discovered the subpoenas. N. T. 8/21/14 at 7. Appellant argued that the representative for M&T Bank would testify that the witness would testify that the appraisals were performed for “evaluating the project,” and additionally that it wished to introduce appraisals from 2005, 2008, and 2010. N. T. 8/21/14 at 15-16. This court had previously ruled said appraisals inadmissible several times. N. T. 8/15/14 at 192-197.

The basic requisite for the admission of any evidence is that it be both competent and relevant. Com., Dep’t of Gen. Servs. v. U.S. Mineral Products Co., 809 A.2d 994, 999 (Pa. Commw. Ct. 2002) “Evidence is considered relevant if it logically tends to establish a material fact in the case, tends to make the fact at issue more or less probable, or supports a reasonable inference or presumption regarding the existence of a material fact.” Id. Questions of relevance and admissibility are within the sound discretion of the trial court and will not be reversed on appeal absent a showing that the court clearly abused its discretion. U.S. Mineral Products Co., 809 A.2d at 999. In the instant case, the court had already ruled upon the evidence appellant attempted to introduce and held that it was not relevant for purposes of impeachment as it had not been prepared for a tax assessment basis. On August 21,2014, appellant again attempted to introduce the same appraisals.

Consequently, this court denied the subpoenas based on relevance. N. T. at 16.

CONCLUSION

For all of the reasons stated above, this court’s decision should be affirmed and appellant’s appeal denied.

      . Per Levin’s definition, a “fractured condominium” is a “residential condominium development or conversion project in which many units remain unsold; often a distressed property previously offered for sale as individual condominium units where the remaining units are remarketed as rental units and then sold as an apartment project. Sometimes the remaining units are sold in bulk at a discount.” See certified record; summary appraisal report, See also N. T. 8/11/14 at 110.

      . Per Levin’s explanation, this approach is used “in appraising income-producing properties. The value indicated by this approach rests on the ability of the property to produce future net income during the remaining economic life of the improvements ... Requires the estimation of the potential income and expenses and the selection of the most appropriate capitalization method. The resulting net income is then converted into an indication of value...for purposes of our analysis, we have utilized direct capitalization. This method of capitalization is used to convert a single year’s net operating income into an indication of value.” See certified record; summary appraisal report.


source: Caselaw Access Project

author: HIGGINS, J.,

license: Public Domain

text:
    Moss v. Meyer
    C.P. of Monroe County,
    No. 333 CIVIL 2014

      Melissa Schwarz, for plaintiff.

      David A. Williams, for defendant.
    Nov. 12, 2014
   HIGGINS, J.,

This matter is presently before the court on defendants Jeremy L. Meyer and Debra I. Meyer’s (“defendants”) motion for leave of court to join Stephen Moss (“Moss”) as additional defendant pursuant to Pa. R.C.P. 2253 (“motion”). On January 15, 2014, this action was commenced by praecipe for summons filed by plaintiffs Lorrie Moss and Stephen Moss (collectively “plaintiffs”) against defendants. On April 28, 2014, plaintiffs filed a complaint seeking damages for personal injuries as a result of a motor vehicle accident which occurred on February 18, 2012, at or near the intersection of SR 115 and Long Pond Road. On June 10, 2014, defendants filed their answer with new matter. Thereafter, on July 14,2014, defendants filed the instant motion. Oral argument was scheduled and held on October 6,2014. We are now prepared to dispose of defendants’ motion.

Pa. R.C.P. 1031.1 provides that:

Any party may set forth in the answer or reply under the heading “cross-claim” a cause of action against any other party to the action that the other party may be
(1) solely liable on the underlying cause of action or
Note\ The term “underlying cause of action” refers to the cause of action set forth in the plaintiff’s complaint or the defendant’s counterclaim.
(2) liable to or with the cross-claimant on any cause of action arising out of the transaction or occurrence or series of transactions or occurrences upon which the underlying cause of action is based.

The right to assert a cross-claim is limited as follows:

Any defendant or additional defendant may only join as an additional defendant any person not a party to the action, or may assert a cross-claim against another party to the action, who may be
(1) solely liable on the plaintiffs cause of action, or
(2) liable over to the joining party on the plaintiffs cause of action, or
(3) jointly or severally liable with the joining party on the plaintiff’s cause of action.

Pa. R.C.P. 1017. Further, it is well established that “a person is entitled to indemnity if that person, without active fault on his part, has been compelled, by some legal obligation, to pay for damages occasioned by the active negligence of another.” Elder v. Orluck, 483 A.2d 474, 480 (Pa. Super. 1984) (citation omitted).

Instantly, defendants seek to amend their pleading to include a cross claim against Moss. Defendants argue that the motor vehicle was caused in whole or in part by Moss. On the other hand, plaintiffs contend that no further investigation is required into the cause of the accident as only two drivers were involved. Plaintiffs contend that defendants should have filed a cross claim against Moss at the time they filed their answer, plaintiffs oppose the amendment of the answer and new matter to include a cross-claim against Moss.

Rule 1033 of the Pennsylvania Rules of Civil Procedure states:

A party, either by filed consent of the adverse party or by leave of court, may at any time change the form of action, correct the name of a party or amend his pleading. The amended pleading may aver transactions or occurrences which have happened before or after the filing of the original pleading, even though they give rise to a new cause of action or defense. An amendment be made to conform the pleading to the evidence offered or admitted.

Pa. R. C. P. 1033. Generally, the granting of leave to amend the pleadings is within the sound discretion of the trial court. Goolsby v. Papanikolau, 637 A.2d 707, 709 (Pa. Cmwth. 1994). Such discretion is broad and only upon a showing of a clear abuse of discretion will the amendment be disallowed on appeal. Somerset Community Hospital, v. Allan B. Mitchell & Assocs., Inc., 685 A.2d 141, 147 (Pa. Super. 1996).

“Our courts have established as parameter a policy that amendments to pleadings will be liberally allowed to secure a determination of cases on their merits.” Capobianchi v. BIC Corp., 666 A.2d 344, 346 (Pa. Super. 1995) (citing Gallo v. Yamaha Motor Corp., 484 A.2d 148, 150 (Pa. Super. 1984). However, an amendment is prohibited “when it is against a positive rule of law, ...or when it will surprise or prejudice the opposing party.” Somerset Community Hospital, 685 A.2d at 147 (citation omitted). The prejudice must be more than mere detriment to the other party because any amendment requested will be designed to strengthen the amending party’s legal position and, correspondingly, weaken the adverse party’s position. Capobianchi, 666 A.2d at 346 (citation omitted). In addition, a party may not amend a pleading if the amendment adds a new cause of action after the running of the statute of limitations. Romah v. Hygienic Sanitation Co., 705 A.2d 841, 857 (Pa. Super. 1997).

In resolving a question of right to amend, the court is bound to accept as true every relevant fact sufficiently averred therein and every reasonable inference fairly deducible therefrom. Schaffer v. Larzelere, 410 Pa. 402, 406, 189 A.2d 267, 270 (1963). As stated earlier, the rule in this Commonwealth is that amendments to pleadings should be liberally allowed. However, amendment will not be allowed where the proposed amendment is against a positive rule of law. Somerset Community Hospital, supra.

In the present case, the plaintiff has not proposed any amendment that is against a positive rule of law. Since amendments are to be liberally permitted in order to allow full development of a party’s theories and averments, we will allow defendants to amend their answer for a fair and just determination of the issues in this matter, including the filing of a counterclaim against Moss.

In light of the foregoing, we enter the following order.

ORDER

And now, this 12th day of November 2014, after oral argument and upon consideration of defendant’s motion for leave to amend answer with new matter to include a counter-claim and the response thereto, it is hereby ordered that defendant’s motion is granted.

      . During arguments, defendants made an oral motion to amend their motion for leave of court to amend their answer and new matter to include a cross-claim pursuant to Pa. R.C.P. 1031.1.


author: WILLIAMS, J.,

text:
    Commonwealth v. Marston

      C.P. of Allegheny County,
    No. 2013-09230; 611 WDA 2014

      Kevin McCarthy and Jon Schultz, for Commonwealth.

      Nicholas Indovina and Michael Sherman, for defendant.
    Nov. 18, 2014
   WILLIAMS, J.,

The government has appealed from this court’s order precluding it “from admitting any evidence regarding a particular blood alcohol result” in an upcoming trial. Order (March 13, 2014). It makes two arguments concerning the court’s action. First, it says the court abused its discretion in ordering exclusion of the blood alcohol results. Concise statement of errors complained of on appeal, paragraph 1 (May 6, 2014). Second, it says the court should have held a hearing before it took such action. Id., paragraph 2.

On May 3, 2013, Mr. Marston had interaction with law enforcement. He was charged with various crimes and eventually an Information was filed on August 19th charging him with three (3) counts of driving under the influence of alcohol and impersonating a public servant. The DUI counts were driving with a BAG of .149, 75 Pa.C.S. Section 3802(b), driving after imbibing a sufficient amount of alcohol that rendered him incapable of safe driving where there was an accident where injury or damage to property was caused, 75 Pa.C.S. Section 3802(a)(1) and 3804(b), and then, a general impairment count, 75 Pa.C.S. Section 3802(a)(1). On August 22,2013, Marston waived his formal arraignment, counsel entered their appearance and a pretrial conference was scheduled for September 27, 2013. The result of that conference was atrial date of December 17, 2013.

On October 31st, Marston filed a motion to compel discovery. The motion detailed with a fair amount of precision the exact items he was seeking from the government. See, Exhibit A. The court quickly scheduled a status conference with counsel for November 13th. Both counsel appeared and, after hearing their respective positions, the court granted the motion and directed the government to produce all the evidence set forth in the defendant’s Exhibit A. That exhibit was attached to the court’s order of December 4th. The deadline for compliance was December 20th.

That deadline came and went without any compliance by the government. On January 6, 2014, government counsel filed a motion for extension. This request asked for more time to comply. Its reason for failing to comply was that it “did not receive a copy of [the] order until Monday, December 30, 2013.” It suggested a new deadline of February 26, 2014. Lastly, the government requested that Marston pay for the reproduction costs of this discovery.

The court’s order of January 8, 2014 addressed the government’s motion. It granted the request for more time and used its suggested due date -February 26, 2014 — as the new deadline. The court deferred the costs issue until the case concluded.

Two weeks later, on January 22, 2014, the government moved for a postponement of the February 27th trial date. Its justification to delay the trial was “to provide additional discovery” to Marston. Motion for continuance, (Jan. 22, 2014). The court granted the motion and set a new trial date of April 16, 2014.

On March 10, 2014, Marston filed a motion seeking dismissal of all of the charges. On March 13th, the court convened a status conference with both counsel. Upon conclusion of the conference, the court entered an order granting in part and denying in part Marston’s motion. The court did not dismiss any of the charges. Instead, it excluded “any evidence regarding a particular blood alcohol result in the upcoming trial.” Order (March 13, 2014). The order also established some key dates for future events in regards to the trial.

On April 2, 2014, Marston filed an omnibus pretrial motion seeking various forms of relief. A week later, the court dealt with most of Marston’s matters through an order.

Just two days later, on April 11th, the government filed a notice of appeal. It was appealing from this court’s order of March 13, 2014. That was the order where the court excluded any evidence of Marston’s BAC result. The government was then directed to file a concise statement of errors complained of on appeal. The government timely complied on May 6, 2014.

The government’s position is two-fold. First, it complains this court abused its discretion when it excluded the government’s evidence of the BAC result. Its next complaint is that this court abused its discretion by ordering the exclusion of evidence without a hearing. The court will address these assertions of error in reverse order.

There are a myriad of issues that arise in criminal cases in Allegheny County’s Court of Common Pleas. As a means to handle these issues, the court has, in the past few years, found great value in holding status conferences with counsel. Many times the conference is schedule upon the court’s review of pleadings that are filed and the court’s working knowledge of local courthouse dynamics which can lead to a delay of the trial. The court has found this early judicial intervention contributes to less delay which consequently leads to a more efficient judiciary. The result of most status conferences falls into two camps. One is the sharpening of an issue to a fine point. The other is exposing the fallacy of a legal position or collection of facts. Regardless of which label is worn, it allows counsel and the court to focus its energies moving forward on what really is at issue.

From that backdrop, the court finds the request for a hearing to be without foundation. At no time after the court excluded the evidence did the government request reconsideration which would invariably have included a request for a hearing. The first time the court heard about a hearing was in their statement of errors. The government’s actions run contrary to established appellate policy to give the trial court the first opportunity to correct a supposed error. Incidentally, the court has no recollection of government counsel asking for a hearing during any of its status conferences.

Now, to address what the court feels is the government’s major point of contention. The government feels this court was wrong when it excluded a particular piece of evidence from its evidentiary quiver. The court made this ruling based upon a coalescence of circumstances. The government ignored two court orders to produce the material. The first deadline was December 19th. The government did not comply and only asked for an extension of time to comply about 2 weeks after the date had passed. Then came February 26th and the material was still not produced. This alone would be a sufficient reason to take the action the trial court did as a means of vindicating its authority. But, there was more involved. The failure to produce the material before that date negatively impacted Marston’s ability to be prepared for the court’s status conference on March 13th. Marston was not the only party adversely affected. It was the court’s intention on that day to explore any expert witness issues with counsel and otherwise begin to limit the matters truly at issue for trial. That could not happen because the government’s eventual disclosure of the material on March 7th (which was the Friday before a status conference on Wednesday, the 12th) did not allow Marston sufficient time to forward the material to his expert. This then did not allow the proposed expert a reasonable period of time to digest the material and then communicate with counsel to see if an issue was present which would require the expert’s services. The end result of this was the trial date got pushed back. Why? Because the government was not diligent in disclosing this material.

Pa.R.Crim.P. 573(E) identifies remedies available to a trial court to extract compliance from both parties regarding discovery. The rule says:

(E) REMEDY If at any time during the course of the proceedings it is brought to the attention of the court that a party has failed to comply with this rule, the court may order such party to permit discovery or inspection, may grant a continuance, or may prohibit such party from introducing evidence not disclosed, other than testimony of the defendant, or it may enter such other order as it deems just under the circumstances.

Pa.R.Crim.P. 573(E). “This provision gives the trial court broad discretion in formulating remedies for a failure to comply with discovery requirements.” Commonwealth v. Galloway, 771 A.2d 65, 68 (Pa. Super. 2001)(citation omitted). And, the remedies provided in paragraph (E) “apply equally to the Commonwealth and the defendant as the interests of justice require.” Commonwealth v. McNeil, 808 A.2d 950, 956 (Pa. Super. 2002) (referencing the Comment to Rule 573).

This court utilized each of the progressive sanctions set forth in this rule. It first ordered the government to provide the defense with the requested information. On the heels of that directive, the court had the trial date postponed by Marston. The court’s thinking was that if he wanted the material to help in his defense then the court was willing to push the trial date back at his speedy trial expense. The first deadline passed without compliance. This necessitated the granting of the government’s motion and establishment of a new deadline, a deadline that it suggested. The court then ruled that this additional time would not be excluded from the speedy trial calculus. When the second deadline passed without compliance, the court increased the sanction and prevented the government from using the blood alcohol results. It is important to note that the court did not impose the ultimate sanction of dismissal even though Marston asked for such.

This court’s final observation returns us to the government’s notice of appeal. Contained within this document is a certification. The certification says this is an appeal from the “granting [of] defendant’s pretrial motion to suppress evidence, [which] substantially handicaps and/or effectively terminates prosecution of appellee/ defendant on the specified charges. See Commonwealth v. Dugger, 506 Pa. 537, 486 A.2d 382 (1985).” Notice of appeal, (April 11, 2014).

The certification is not accurate. The order appealed from was not a pretrial motion to suppress certain evidence but a pretrial order stemming from a discovery violation and disobedience of two court orders.

In addition, the impact upon the government’s case is misrepresented by its absence of information. Marston was charged with 4 crimes: 3 counts of driving while impaired and impersonating a public servant. The non-DUI count is not impacted by this court’s order whatsoever. The general impairment count of DUI is not substantially impacted by this court’s action as the traditional evidence which supports this count is the officer’s observations and his opinion filtered through his experience. The quintessential item of evidence for this count is not the BAC result. Similarly, the general impairment count coupled with a factual aggravator (injury or damage to property) is not so greatly impacted. The sole count which appears to have been effectively terminated by the order is the DUI count where the accusation is that he was driving with a specific BAC within 2 hours of driving. So, can the government still obtain a conviction on 3 of the 4 counts without the BAC result? The probabilities are there. The court has taken the time of discussing the interplay of the charges and the excluded BAC result to show that it did, in fact, exercise restraint and conducted a proper balancing of the equities involved.

The department of court records shall now forward the certified record to the Superior Court of Pennsylvania in due course.

      . This activity took place on August 22nd as evidenced by the date counsel signed the waiver of arraignment form and the notice of formal arraignment was for the same date. This differs by a day from the docket entries.

      . The court recognized the due date would be past the original trial listing of December 17th and both counsel knew that on the 17th, Marston would be the moving party for a continuance of the trial. On the 17th, a new trial date was set for February 27,2014.

      . The court notes that government counsel at the November 13th status conference was the same counsel identified as receiving copies of the court’s December 4th order.

      . In 2013, the criminal division adjudicated 20,821 cases. In 2012, the number was 19,186. As of today, there are 14 criminal court judges. Using an average of 20,000 cases divided by the 14 judges in this division, this courtroom is responsible for 1,428 cases a year.

      . It is worthy of noting that as the end of February deadline approaches, the government does not ask for an additional short period of time to comply. It’s as if arrogance had crept into their thinking. “Oh the court won’t mind, I’m just a few days late.”


author: ZULICK, J.,

text:
    Coastal Environmental, Inc. v. Penn Realty Settlement Services Inc.

      C.P. of Monroe County,
    No. 6769 CV 2014

      Mark A. Primrose, for plaintiff.

      James A. Doherty, Jr., for defendant.
    Jan. 8, 2015
   ZULICK, J.,

This case comes before the court on defendant Penn Realty Settlement Services, Inc.’s (Penn Realty) preliminary objections to Coastal Environmental, Inc.’s (Coastal) amended complaint. Coastal filed a complaint against Penn Realty seeking compensatory damages for breach of contract and negligent misrepresentation on August 19, 2014. Following receipt of Penn Realty’s preliminary objections, Coastal filed an amended complaint on September 29, 2014. Penn Realty again filed preliminary objections.

Coastal alleges in its amended complaint that Coastal engaged Penn Realty to prepare deeds transferring two of Coastal’s lots in the Pocono Haven subdivision to separate grantees. Penn Realty instead prepared deeds that transferred the entire Pocono Haven subdivision, including lots not owned by Coastal, to each of these grantees.

Coastal further alleges that Penn Realty attempted to correct its error by recording corrective deeds from Coastal to each grantee. Penn Realty represented that these corrective deeds would be the proper means to correct the error but Penn Realty did not first obtain a reconveyance of the improperly conveyed lots from the grantees. Coastal then had to expend fees and court costs to pursue quiet title litigation against the grantees.

Penn Realty filed preliminary objections on October 17, 2014, stating that Coastal failed to plead its amended complaint with sufficient specificity; that the negligent misrepresentation claim was barred under the gist of the action doctrine; and, that attorney’s fees were not proper damages. Both parties submitted briefs, and arguments were held in this court on December 1, 2014.

The facts underlying these preliminary objections as alleged in the amended complaint are as follows. On November 21, 2003 Coastal acquired several lots in Pocono Haven, Pocono Township by deed from Raintree Homes, Inc. On November 24, 2003, Coastal delivered a deed at closing to Tina Marie Bearden, grantee, in which Coastal intended to sell Ms. Bearden Lot 33, Section E of Pocono Haven. Coastal engaged Penn Realty as settlement agent to prepare the deed; however, unbeknownst to Coastal at the time, Penn Realty mistakenly included a description of the entire Pocono Haven subdivision in the deed delivered to Tina Marie Bearden. This deed was recorded on December 22, 2003.

Another real estate closing was held on December 26, 2003 in which Penn Realty was again the settlement agent, and in which Coastal intended to transfer Lot 32, Section D of Pocono Haven to Purchasers Carlos Rivera and Grace M. Reyes-Rivera. Again, Penn Realty mistakenly deeded the entire Pocono Haven subdivision to Carlos Rivera and Grace M. Reyes-Rivera instead of a single lot. This deed was recorded on February 4, 2004.

These errors were later detected and brought to Penn Realty’s attention. Perm Realty prepared corrective deeds from Coastal to the grantees, conveying only the lot which should have been the subject of the original deed. The corrective deed for Ms. Bearden’s property was dated September 23, 2004 and was recorded on November 5, 2004, while the corrective deed for Mr. Rivera and Ms. Reyes-Rivera’s property was dated November 2,2004 and recorded on November 5, 2004. Penn Realty did not first arrange for a reconveyance of the mistakenly conveyed lots before these deeds were recorded; thus, the conveyancing error was not resolved by these corrective deeds.

Coastal discovered this error in 2012, when it intended to transfer Lot 12, Section D of Pocono Haven to another purchaser. A title search revealed that Coastal was not the owner of the lot.

Coastal filed quiet title actions against each of the purchasers, resulting in an order quieting title against Ms. Bearden and an agreement with Mr. Rivera and Ms. Reyes-Rivera to transfer the erroneously deeded properties back to Coastal. Coastal closed on the sale of Lot 12, Section D on March 18, 2014, more than one year after the original closing date of December 29, 2012.

Coastal now claims that Penn Realty breached its original contracts to prepare the deeds for the property transfers and negligently misrepresented that the corrective deeds resolved all issues surrounding title. Coastal demands recovery for the costs and attorney’s fees incurred in resolving the title issues with the various purchasers.

Penn Realty has moved to strike paragraphs 29, 30, 33, 40, 41, and 43 of Coastal’s amended complaint pursuant to Pa.R.C.P. 1028(a)(2) and (3), asserting that these paragraphs contain “general averments of negligence” and “all-encompassing language.”

A pleading must aver the material facts on which a cause of action is based, in a concise and summary form. See Pa.R.C.P. 1019(a). “The purpose of 1019(a) is to require the pleader to disclose the material facts sufficient to enable the adverse party to prepare his case.” Baker v. Rangos, 324 A.2d 498, 505 (Pa. Super. 1974). “’Material facts’ are ‘ultimate facts,’ i.e., those facts essential to support the claim.” Id. at 505. “Allegations will withstand challenge under 1019(a) if (1) they contain averments of all the facts the plaintiff will eventually have to prove in order to recover...and (2) they are sufficiently specific so as to enable defendant to prepare his defense.” Id. at 505-06. “The lower court has broad discretion in determining the amount of detail that must be averred since the standard of pleading set forth in Rule 1019(a) is incapable of precise measurement.” Pike County Hotel Corp. v. Kiefer, 396 A.2d 677, 681 (Pa. Super. 1978). Finally, “[i]n determining whether a particular paragraph in a complaint has been stated with the necessary specificity, such paragraph must be read in context with all other allegations in that complaint.” Yacoub v. Lehigh Valley Medical Associates, P.C., 805 A.2d 579, 589 (Pa. Super. 2002).

Penn Realty’s first objection is that the allegations in paragraphs 29, 30, 33, 40, 41, and 43 amount to general allegations of negligence. A review of these paragraphs however reveals that the term “negligence” is not mentioned; they pertain to breach of contract. Coastal alleges that two oral agreements were made to have Penn Realty perform conveyancing services in the transactions with Tina Marie Bearden and Carlos Rivera and Grace M. Reyes-Rivera. Penn Realty contends that Coastal’s allegations of breach of contract are unclear.

The material facts of a sufficiently pleaded breach of contract claim need only establish that a contract existed, that a party failed to perform its duties under the contract and that as a result of such non-performance, the plaintiff suffered damages. Sullivan v. Chartwell Investment Partners, LP, 873 A.2d 710, 716 (Pa. Super. 2005). Coastal has provided sufficient information about the parties’ alleged contract here. Penn Realty was engaged through an oral contract to prepare a deed for Coastal to convey one lot to the purchaser in each transaction. The amended complaint alleges that the Bearden closing occurred on or around November 24, 2003, amended complaint, paragraph 35. The Rivera closing occurred on or around December 26,2003. Each paragraph, read in the context of the entirety of the complaint, pleads the facts with sufficient specificity.

Second, Penn Realty objects to the claim for negligent misrepresentation, citing the gist of the action doctrine. The standard for demurrer is “whether, on the facts averred, the law says with certainty that no recovery is possible.” Santiago v. Pennsylvania Nat. Mat. Cas. Ins. Co., 613 A.2d 1235, 1238 (Pa. Super. 1992). “Where any doubt exists as to whether a demurrer should be sustained, it should be resolved in favor of overruling the demurrer.” Id.

The gist of the action doctrine, never officially adopted by our Pennsylvania Supreme Court, “is designed to maintain the conceptual distinction between breach of contract and tort claims.” eToll, Inc. v. Elias/Savion Advertising, Inc., 811 A.2d 10, 14 (Pa. Super. 2002).

Although they derive from a common origin, distinct differences between civil actions for tort and contract breach have developed at common law. Tort actions lie for breaches of duties imposed by law as a matter of social policy, while contract actions lie only for breaches of duties imposed by mutual consensus agreements between particular individuals.... To permit a promisee to sue his promisor in tort for breaches of contract inter se would erode the usual rules of contractual recovery and inject confusion into our well-settled forms of actions.

Id. at 14.

The gist of the action is “concerned with the nature of the action as a whole.” Id. at 15.

[Pjersuasive authority interpreting Pennsylvania law has restated the gist of the action doctrine in a number of similar ways. These courts have held that the doctrine bars tort claims: (1) arising solely from a contract between the parties..., (2) where the duties allegedly breached were created and grounded in the contract itself...; (3) where the liability stems from a contract;... or (4) where the tort claim essentially duplicates a breach of contract claim or the success of which is wholly dependent on the terms of the contract.

Id. at 19.

Fraud in the inducement arises in a contract setting where the contract is collateral to the tort claim, and the gist of the action doctrine rarely precludes this type of claim. See generally Air Products and Chemicals, Inc. v. Eaton Metal Products Co., 256 F.Supp.2d 329 (E.D.Pa. 2003). Hart v. Arnold, 884 A.2d 316, 340 (Pa. Super. 2005).

Here, Coastal alleges that Penn Realty negligently misrepresented that the corrective deeds would clear Coastal’s title. This claim does not allege fraud in the inducement. Rather, the corrective deeds were Penn Realty’s attempts to remedy its earlier alleged breaches of contract. While misrepresentations not involving fraud in the inducement can be permitted under gist of the action, see First American Bank v. Brand, 50 Pa. D&C 4th 329, at 4 (2000); American Guarantee and Liability Ins. Co. v. Fojanini, 90 F.Supp.2d 615, 622-23 (E.D.Pa. 2000), the question is whether the underlying contract is collateral to the tort claim.

Penn Realty’s representations to Coastal followed its conveyancing error. The underlying contracts were not collateral to the action, as is required under the gist of the action doctrine. The corrective deeds were Penn Realty’s attempt to comply with its contractual obligation. The duty to correct the deeds was imposed by the parties’ prior contractual relationships rather than tort. See Penn. Manufacturers’ Ass’n Ins. Co. v. L.B. Smith, Inc., 831 A.2d 1178, 1182 (Pa. Super. 2003) (“[Negligence in repairing the [machinery] did not cause the original defect and mechanical problems. The breach of contract and negligence claim arose from contractual obligations undertaken by LBS in relation to the sale and subsequent attempts to repair the [machinery].”). Thus, the gist of the action doctrine bars Coastal’s negligent misrepresentation claim.

Finally, Penn Realty objects to Coastal’s request for costs and attorney’s fees, citing the American Rule, which severely limits the award of attorney’s fees. However, Penn Realty has misunderstood the relief sought in Coastal’s amended complaint. Coastal is demanding past attorney’s fees and court costs it incurred in quiet title actions to correct Penn Realty’s conveyancing error. Coastal has not demanded attorney’s fees and court costs for the present action. The fees and costs demanded amount to compensatory damages and will be permitted.

ORDER

And now, this 8th day of January, 2015, upon consideration of defendant Penn Realty Settlement Services, Inc.’s preliminary objections and the briefs and arguments of both parties, it is ordered as follows:

1. Defendant’s motion to strike plaintiff’s complaint for lack of specificity is denied;

2. Defendant’s demurrer to coastal environmental, Inc.’s negligent misrepresentation claim as being barred by the gist of the action doctrine is granted and Count II — negligent misrepresentation is stricken;

3. Defendant’s motion to strike plaintiff’s requests for costs and attorney’s fees is denied;

4. Coastal Environmental, Inc. is given twenty days to file a second amended complaint.


author: WILLIAMSON, J.,

text:
    Cahill v. Fritz

      C.P. of Monroe County,
    No. 7056 CIVIL 2014

      Kevin M. Conaboy, for plaintiff.

      Jeffrey M. Pollock, for defendant.
    Jan. 13, 2015
   WILLIAMSON, J.,

This matter comes before us on preliminary objections to the plaintiff’s complaint filed by Hartford Insurance Company of the Southeast (hereafter “defendant”) on September 29,2014. Beatrice Cahill (hereafter “plaintiff’) filed an Answer to the defendant’s preliminary objections to the plaintiff’s complaint on October 14, 2014. Plaintiff then filed a brief in opposition to preliminary objections of defendant on December 15, 2014.

BACKGROUND

This matter arises from a motor vehicle accident which occurred on June 6, 2013. Plaintiff was a front seat passenger in her vehicle, a 2006 Ford 500, which was being operated by Lawrence McPherson. Plaintiff was traveling west on Fox Run Road in East Hanover Township, Dauphin County, Pennsylvania and was stopped at a stop sign. At the same time, the other defendant, John S. Fritz (hereafter “Mr. Fritz”), was also traveling west on Fox Run Road when he failed to stop and collided into the rear end of plaintiff’s vehicle.

As a result of this collision, plaintiff sustained injuries. Mr. Fritz was allegedly operating his vehicle while intoxicated at the time of the collision and he was charged with DUI. At the time of the accident, plaintiff was insured by defendant which provided uninsured and underinsured motorist benefits. Plaintiff has attempted to contact Mr. Fritz on numerous occasions to determine if there is any insurance coverage which applies to Mr. Fritz regarding this accident. Mr. Fritz has allegedly failed to respond to plaintiff’s inquiries on the matter.

Plaintiff filed the underlying complaint on August 27, 2014. The complaint contains three counts: The first count is a claim against Mr. Fritz for negligence. The second count is a claim against the defendant for uninsured motorist benefits. The third count is a claim against the defendant for underinsured motorist benefits. Plaintiff is seeking monetary relief for personal injuries allegedly sustained from the motor vehicle accident. Plaintiff is also seeking punitive damages against Mr. Fritz for allegedly operating his vehicle while illegally intoxicated at the time of the accident.

DISCUSSION

In their preliminary objections, defendant asserts that the negligence and punitive damages claims filed against Mr. Fritz have been misjoined with the contractual claim for underinsured and/or uninsured motorist benefits filed against defendant in this matter. Preliminaiy objections may be filed by any party to a pleading for failure of a pleading to conform to law or rule of court. Pa. R.C.P. 1028(a)(2). A plaintiff may join as defendants persons against whom the plaintiff asserts any right to relief jointly, or arising out of the same transaction, occurrence, or series of transactions or occurrences if any common question of law or fact affecting the liabilities of all such persons will arise in the action. Pa. R.C.P. 2229(b).

The Pennsylvania Supreme Court’s decision in Insurance Federation of Pennsylvania, Inc. v. Koken, 889 A.2d 550 (Pa. 2005) eliminated the requirement imposed by the Pennsylvania Insurance Department for binding arbitration clauses in uninsured and underinsured motorist insurance contracts. Since that time, decisions of Pennsylvania courts of common pleas are split on the issue of a plaintiff joining the claims against a third-party tortfeasor and the plaintiff’s own uninsured/underinsured motorist carrier in one cause of action, when a single motor vehicle collision is the basis for both claims, Cocuzza v. Castro, No. 406-CV-2012 (Zulick, J.). The majority of common pleas courts that have addressed this issue by preliminary objections have ordered bifurcation; however, a substantial number of courts have declined to bifurcate.

Defendant argues that the negligence and punitive damages claims filed against Mr. Fritz do not arise out of the same transaction, occurrence, or series of occurrences and do not involve common questions of law affecting the liabilities of all such potential defendants. However, the claims against Mr. Fritz for negligence and punitive damages and the claims against defendant for underinsured and uninsured motorist coverage arise out of the same vehicular collision. Both claims seek damages for the same underlying accident and injuries. They arise out of the same event. Thus, the plaintiff may properly join the claims against both the defendant and Mr. Fritz.

Defendant further argues that allowing this case to proceed as it currently stands will raise many issues which could be detrimental and unduly prejudicial to the defendant, Hartford Insurance Company of the Southeast. For example, defendant Hartford cites prejudice of being involved in the same trial as Mr. Fritz, who was allegedly operating his vehicle while intoxicated and in which the plaintiff is seeking punitive damages against Mr. Fritz. The court, in furtherance of convenience or to avoid prejudice, may, on its own motion or on motion of any party, order a separate trial of any cause of action, claim, or counterclaim, set-off, or cross-suit, or of any number of causes of action, claims, counterclaims, set-offs, cross-suits, or issues. Pa. R.C.P. 213(b).

As stated in Cocuzza, in light of the absence of established authority, this court finds allowing the case to proceed through discovery will save judicial resources and avoid unnecessary delay and expense to the parties. After discovery, if it is apparent that keeping the claims joined together will cause undue prejudice to defendant, then the claims can be severed at the time of trial if necessary. Thus, the claims are properly joined at this time and the issue of joinder causing undue prejudice to defendant can be revisited after discovery is complete.

ORDER

And now, this 13th day of January 2015, upon consideration of the preliminary objections of the defendant, Hartford Insurance Company of the Southeast, to plaintiff’s complaint, defendant’s preliminary objections are denied.

        . Id., (see the listing of such court opinion is footnote number one of judge Zulick’s opinion in Cocuzza).


text:
    DeMaria v. Rusbasan

      C.P. of Monroe County,
    No. 3773 CV 2014

      Zachary Zawarski, for plaintiff.

      Christina Michael and Rick Grimaldi, for defendants.
    Jan. 13, 2015
   ZULICK, J.,

This case comes before the court on defendants Charles and Susan Rusbasan’s preliminary objections to plaintiff Lynann DeMaria’s first amended complaint. Ms. DeMaria filed a complaint seeking compensatory and punitive damages for wrongful termination of her employment, negligent infliction of emotional distress, and intentional infliction of emotional distress on May 8, 2014. After preliminary objections, Ms. DeMaria filed an amended complaint on September 4,2014, removing claims for attorney’s fees and negligent infliction of emotional distress. Ms. DeMaria alleges in her amended complaint that, (1) Mr. and Mrs. Rusbasan wrongfully terminated Ms. DeMaria from her position as a house manager when she refused to forge a physician’s signature on a prescription in June 2013 and (2) that Mrs. Rusbasan intentionally inflicted emotional distress upon Ms. DeMaria by repeatedly mentioning a past violent relationship with the Rusbasans’ neighbor and by indicating that Ms. DeMaria would be discharged if she were to mention the incident to anyone, including law enforcement.

The Rusbasans filed preliminary objections on September 24,2014. All parties submitted memorandums, and arguments were held in this court on December 1, 2014.

DISCUSSION

The Rusbasans have filed several preliminary objections. The first is a challenge to this court’s subject matter jurisdiction arguing that subject matter jurisdiction is lacking as this is a dispute concerning less than $50,000 which under Monroe County local rules must go to compulsory arbitration pursuant to RR.C.R 1301 et. seq. Secondly, they argue that Ms. DeMaria has failed to state a claim for wrongful termination of employment a) because of the delay between the alleged incident and the termination, and b) because Ms. DeMaria was an independent contractor rather than an employee. Third, the Rusbasans argue that Ms. DeMaria has failed to state a claim for intentional infliction of emotional distress, and lastly, that Ms. DeMaria’s request for punitive damages is not supported by her allegations.

The judiciary act provides for the Courts of Common Pleas’jurisdiction as follows:

§ 931. Original jurisdiction and venue
(a) General rule. — Except where exclusive original jurisdiction of an action or proceeding is by statute or by general rule adopted pursuant to section 503 (relating to reassignment of matters) vested in another court of this Commonwealth, the courts of common pleas shall have unlimited original jurisdiction of all actions and proceedings, including all actions and proceedings heretofore cognizable by law or usage in the courts of common pleas.

42 Pa.C.SA §931.

“Jurisdiction is the capacity to pronounce a judgment of the law on an issue brought before the court through due process of law"Aronson v. Sprint Spectrum, LP., 767 A.2d 564, 568 (Pa. Super. 2001). The trial court has jurisdiction if it is competent to hear or determine controversies of the general nature of the matter involved. Id. Werner v. Plater-Zyberk, 799 A.2d 776, 789 (Pa. Super. 2002).

The Rusbasans object to the court’s exercise of subject matter jurisdiction in this case because the plaintiff has failed to state in the amended complaint the amount of damages sought in the action. The Rusbasans refer to Monroe County Local Rule 1301 which provides: “(a)ll civil cases where the amount in controversy (exclusive of interest and costs) shall be fifty thousand ($50,000.00) Dollars or less except those involving title to real estate, equity cases, mandamus, quo warranto and mortgage foreclosure, shall first be submitted to a board of arbitrators in accordance with Section 7361 of the judicial code, 42 Pa.C.S. § 7361.” Monroe County Local Rules, Rule 1301(1). This arbitration requirement, however, does not govern whether the court has subject matter jurisdiction, which in fact it has. This preliminary objection will be treated as a request for a more specific pleading. The plaintiff will be directed to state whether her damages exceed $50,000 for purposes of the arbitration rule.

The Rusbasans have raised a demurrer to Ms. DeMaria’s wrongful termination and intentional infliction of emotional distress claims. The standard for demurrer is “whether, on the facts averred, the law says with certainty that no recoveiy is possible.” Santiago v. Pennsylvania Nat. Mut. Cas. Ins. Co., 613 A.2d 1235, 1238 (Pa. Super. 1992). “Where any doubt exists as to whether a demurrer should be sustained, it should be resolved in favor of overruling the demurrer.” Id.

The facts alleged in the amended complaint in support of the wrongful termination of employment claim are as follows. Ms. DeMaria began providing the Rusbasans house management services in 2006. Her duties included maintaining the Rusbasans’ residence, cleaning, paying bills, scheduling work, decorating their residence, and acting as their personal concierge and chauffeur. The Rusbasans terminated Ms. DeMaria’s services on August 21,2013.

On or about June 10, 2013, the Rusbasans’ daughter needed a medical prescription for the drug Ritalin filled by a pharmacy. Defendant Susan Rusbasan asked Ms. DeMaria to fill the prescription at the pharmacy. Ms. DeMaria presented the prescription slip to the pharmacist, but it was not signed by the physician, and she was unable to fill it. Ms. Rusbasan then requested her to forge the doctor’s signature. Ms. DeMaria refused, and Ms. Rusbasan insisted, via voice mail, stating, “Please... have anyone do it. Just sign your name so that when the pharmacist sees it they will see that it’s not blank.” Plaintiffs amended complaint, ¶19. On June 11,2013, Ms. DeMaria sent an email to Ms. Rusbasan explaining why she believed it to be a federal offense to forge a doctor’s signature and why she would continue to refuse to sign the prescription. On August 21, 2013, Ms. DeMaria met with the Rusbasans at their annual meeting. The medical prescription incident was discussed and Ms. DeMaria was then terminated.

The Rusbasans contend that Ms. DeMaria has failed to state a cause of action for wrongful termination because of the length of time that passed from the alleged incident which formed the basis for termination and the actual firing. This objection has no merit.

Pennsylvania is an at-will employment state. Hennessy v. Santiago, 708 A.2d 1269, 1273 (Pa. Super. 1998). “[Exceptions [to at-will employment] fall into three categories: an employer (1) cannot require an employee to commit a crime, (2) cannot prevent an employee from complying with a statutorily imposed duty, and (3) cannot discharge an employee when specifically prohibited from doing so by statute.” Id.

While Pennsylvania courts have not adopted elements for wrongful termination, federal courts have analogized the action to retaliatory discharge under Title VII. See Landmesser v. United Air Lines, Inc., 102 F.Supp.2d 273, 277-78 (Pa E.D. 2000). The elements the federal court has predicted Pennsylvania will adopt include “(1) the employee engaged in a protected employee activity; (2) the employer took an adverse employment action after or contemporaneous with the employee’s protected activity; and (3) a causal link exists between the employee’s protected activity and the employer’s adverse action.” Id.

The Rusbasans argue that the passage of more than two months between the incident and Ms. DeMaria’s discharge prevents an inference of causation. Temporal proximity serves as an indicator of a causal connection between protected activity and an adverse employment action. See id.; Landmesser, 102 F.Supp.2d at n. 10, See Badrinauth v. Metlife Corp., 368 Fed.Appx. 320, 324 (3d Cir. 2010) (where four months passed: “(a) claim for wrongful termination ... may be dismissed on grounds that the lack of temporal proximity between the protected activity and the adverse employment action belies a causal connection.”). “Courts generally hold that if at least four months pass after the protected action without employer reprisal, no inference of causation is created.” Wood v. Bentsen, 889 F.Supp. 179 (E.D. Pa. 1995).

Here the Rusbasans’ annual meeting with Ms. DeMaria occurred in August. This was close enough in time to establish an inference of causation, especially when the complaint alleges that the prescription incident was discussed immediately before the Rusbasans fired Ms. DeMaria. This objection will be therefore be denied.

The Rusbasans further contend that the amended complaint does not state a cause of action for intentional infliction of emotional distress. Ms. DeMaria alleges that in 2009, Mrs. Rusbasan encouraged Ms. DeMaria to date the Rusbasans’ neighbor, Sean Walter. Ms. DeMaria began a relationship with Mr. Walter, but after a few months, he became physically and mentally abusive. In January 2010, Mr. Walter burglarized Ms. DeMaria’s house and sliced her furniture with a knife. Ms. DeMaria reported this incident to the Rusbasans, who demanded that Ms. DeMaria not discuss the matter with anyone, including law enforcement, if Ms. DeMaria wished to keep her position as the Rusbasans’ house manager. Between 2011 and 2013, Ms. Rusbasan repeatedly reminded Ms. DeMaria of her previous relationship with Mr. Walter with the intent to cause Ms. DeMaria emotional distress. Additionally, between 2011 and 2013, Ms. Rusbasan, with intent to cause Ms. DeMaria emotional distress, threatened to terminate Ms. DeMaria’s employment if she discussed the incident regarding Sean Walter with anyone. Ms. DeMaria received counseling from a psychologist in 2011. As a result of Ms. Rusbasan’s conduct, Ms. DeMaria has allegedly experienced severe emotional distress including severe depression, anxiety, and post-traumatic stress disorder.

The superior court reviewed the tort action of intentional infliction of emotional distress in Reeves v. Middletown Athletic Ass’n, 866 A.2d 1115 (Pa. Super. 2004). There the court stated:

There remains some question as to whether the courts of this Commonwealth recognize a cause of action for intentional infliction of emotional distress. See, e.g., Hoy v. Angeione, 554 Pa. 134, 150-51 n. 10, 720 A.2d 745, 753-54 n. 10 (1998). However, our Supreme Court has indicated that in order for a plaintiff to prevail on such a claim, he or she must, at the least, demonstrate intentional outrageous or extreme conduct by the defendant, which causes severe emotional distress to the plaintiff. Id., at 151, 720 A.2d at 754. In addition, a plaintiff must suffer some type of resulting physical harm due to the defendant’s outrageous conduct. Fewell v. Besner, 444 Pa. Super. 559, 664 A.2d 577, 582 (Pa. Super. 1995).

Id. at 1122.

“Outrageous or extreme conduct” for purposes of this tort has been defined as conduct that is “so outrageous in character, so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in civilized society.” Hoy, supra at 754. “[I]t has not been enough that the defendant has acted with intent which is tortious or even criminal, or that he has intended to inflict emotional distress, or even that his conduct has been characterized by ‘malice,’ or a degree of aggravation that would entitle the plaintiff to punitive damages for another tort.” Id. (quoting Restatement (Second) of Torts § 46, cmt. d (1965)).

The superior court in Hoy discussed examples of cases which have found a sufficient basis for a cause of action of intentional infliction of emotional distress. These cases presented only the most egregious conduct. See e.g., Papieves v. Lawrence, 263 A.2d 118 (Pa. 1970) (defendant, after striking and killing plaintiff’s son with automobile, and after failing to notify authorities or seek medical assistance, buried body in a field where discovered two months later and returned to parents (recognizing but not adopting section 46)); Banyas v. Lower Bucks Hospital, 437 A.2d 1236 (Pa. Super. 1981) (defendants intentionally fabricated records to suggest that plaintiff had killed a third party which led to plaintiff being indicted for homicide); Chuy v. Philadelphia Eagles Football Club, 595 F.2d 1265 (3d Cir. 1979) (defendant’s team physician released to press information that plaintiff was suffering from fatal disease, when physician knew such information was false). Hoy, 720 A.2d at 754; Swisher v. Pitz 868 A.2d 1228, 1230-1231 (Pa. Super. 2005).

It is for the court to determine in the first instance whether a defendant’s conduct “may reasonably be regarded as so extreme and outrageous to permit recovery.” Johnson v. Caparelli, 625 A.2d 668, 671 (Pa. Super. 1993). A jury question is created here as to whether the acts of Susan Rusbasan alleged in the amended complaint rise to the level of extreme or outrageous conduct required for this tort. Ms. DeMaria alleges that Ms. Rusbasan threatened to terminate her job if she told anyone, including law enforcement about Walter’s conduct, which she alleges included physical abuse, burglarizing her apartment and slicing her furniture with a knife. Amended complaint, ¶¶50, 51.

However, the complaint does not allege that Ms. DeMaria sought medical treatment due to the alleged intentional infliction of emotional distress. Pennsylvania cases have additionally required evidence of medical treatment for physical harm due to the emotional distress. Kazatsky v. King David Memorial Park, Inc., 527 A.2d 988, 995 (Pa. 1987) (“Given the advanced state of medical science, it is unwise and unnecessary to permit recovery to be predicated on an inference based on the defendant’s ‘outrageousness’ without expert medical confirmation that the plaintiff actually suffered the claimed distress.”); Hart v. O’Malley, 647 A.2d 542, 554 (Pa. Super. 1994) (“[I]t is clear that in Pennsylvania, in order to state a claim under which relief can be granted for the tort of intentional infliction of emotional distress, the plaintiffs must allege physical injury.”); Johnson v. Caparelli, 625 A.2d 668, 671 (Pa. Super. 1993) (“The Supreme Court has further added the requirement of physical injury or harm in the event that § 46 is to be adopted.”). The physical injury requirement does not have to be severe; in Johnson v. Caparelli, the appellants suffered physical harm including, “headaches, upset stomach, involuntary muscle tension, physical pain, and nervousness” related to the news that their son had been a victim of sexual assault. Johnson, 625 A.2d at 672.

Ms. DeMaria does not allege that the therapy she received in 2011 was due to Ms. Rusbasan’s alleged behavior. She also does not allege that she sought medical treatment for physical harm resulting from the emotional distress. A plaintiff pleading the existence of emotional distress must substantiate that he or she actually suffered the claimed distress with expert medical confirmation. Kazatsky v. King David Memorial Park, Inc., 527 A.2d 988 (Pa. 1987), Hunger v. Grand Cent. Sanitation, 670 A.2d 173, 177-178 (Pa. Super. 1996). The preliminary objection as to Ms. DeMaria’s failure to state a claim for intentional infliction of emotional distress will therefore be sustained.

Finally, the Rusbasans argue that Ms. DeMaria’s request for punitive damages is scandalous or impertinent matter, pursuant to Pennsylvania Rule of Civil Procedure 1028(1) (2). “Punitive damages may be awarded for conduct that is outrageous because of the defendant’s evil motive or reckless indifference to the rights of others.... As the name suggests, punitive damages are penal in nature and are proper only in cases where the defendant’s actions are so outrageous as to demonstrate willful, wanton, or reckless conduct.” Hutchison ex rel. Hutchison v. Luddy, 870 A.2d 766, 770 (Pa. 2005). Furthermore, “this Court has stressed that, when assessing the propriety of the imposition of punitive damages, the state of mind of the actor is vital. The act, or the failure to act, must be intentional, reckless, or malicious.” id.

If proven true, Ms. Rusbasan’s requirement that Ms. DeMaria forge the signature of a physician in order to remain employed by the Rusbasans could certainly be considered willful or wanton. Punitive damages in this case are not scandalous or impertinent, since the alleged incident is one that is against public policy and should be deterred. This preliminary objection will be denied.

ORDER

And now, this 13th day of January, 2015, upon consideration of defendants Charles and Susan Rusbasan’s preliminary objections and the briefs and arguments of both parties, it is ordered as follows:

1. Defendants’ objection to this court’s subject matter jurisdiction is denied. However, the request for a more specific complaint is granted. Plaintiff shall file an amended complaint stating whether she seeks damages in excess of $50,000.00.

2. Defendant’s demurrer to plaintiff’s claim for wrongful termination from employment is denied.

3. Defendants’ demurrer to plaintiff’s claim for intentional infliction of emotional distress is sustained.

4. Defendants’ preliminary objection to the request for punitive damages is denied.

5. Plaintiff is given twenty days to file a second amended complaint.

      . Defendants, in a footnote in their brief, argue that the wrongful termination count should be dismissed as the plaintiff was an independent contractor. The amended complaint is not specific as to whether plaintiff was an employee or an independent contractor, and this court will not decide this issue on preliminary objections when the only place defendants address it is in a footnote in their brief.


author: HARLCHER SIBUM, J.,

text:
    Barkley v. Douglas

      C.P. of Monroe County,
    Nos. 2218 Civil 2012, 2590 Civil 2013

      Kevin P. Foley, for plaintiff.

      Patrick J. McDonnell, for defendant.
    Jan. 20, 2015
   HARLCHER SIBUM, J.,

This matter comes before the court on plaintiffs’ petition to compel the Commonwealth of Pennsylvania Department of Labor and Industry Office of Unemployment Benefits to provide a full, complete and correct copy of all unemployment compensation records for defendant Robert R. Douglas. The relevant facts are summarized as follows. On March 15, 2012, plaintiffs, James and Cheryll Barkley, instituted this action against defendants, Robert R. Douglas, Wal-Mart Stores, Inc., Wal-Mart Stores East, LP and Wal-Mart Transportation, LLC (collectively “defendants”), for injuries sustained in a motor vehicle accident. Plaintiffs were involved in a motor vehicle accident with defendant Robert R. Douglas, who was employed as a truck driver for Wal-Mart. After being terminated from his employment in 2011, defendant Douglas filed a claim for unemployment compensation with the Pennsylvania Department of Labor and Industry, Office of Unemployment Compensation Benefits Policy (“OUCBP”). On January 24, 2012, the OUCBP issued anotice of determination denying defendant Douglas’ unemployment compensation claim. Thereafter, defendant Douglas appealed the OUCBP’s decision and subsequently received unemployment benefits.

Plaintiffs have requested several documents from defendants, including records regarding the unemployment compensation benefits defendant Douglas received following his termination in December 2011. Defendants provided the records they have on file; however, plaintiffs allege that there are more records in the possession of OUCBP. On June 17, 2014, plaintiffs served a subpoena on OUCBP requesting

“[any] and all documents, records, notes, wage loss information, statement of wages, payments of [UC] benefits, employer challenges for said benefits and/ or decisions awarding said benefits, or any other documentation and information which constitute the entire file contents of [defendant Douglas] ... This would include all information concerning his work history. This request includes, but is not limited to, his complete personnel and wage file, as well as any disability records and information. This request includes but is not limited to an award of benefits in 2012.”

[Plaintiff’s petition to compel, Exh. B]. On June 24,2014, plaintiffs were advised by OUCBP that the records were confidential and cannot be disclosed. Plaintiffs filed this instant petition on September 8, 2014 seeking to compel the OUCBP to disclose information regarding defendant Douglas’ unemployment compensation application. Defendants filed a no opposition response on October 3, 2014. The OUCBP filed an answer on October 3, 2014. After due consideration of all pleadings filed and upon oral argument heard on this matter, we are now prepared to decide.

DISCUSSION

The OUCBP argues that the subpoenaed records are privileged and beyond the scope of discovery. The OUCBP bases its privilege claim on 34 Pa.Code § 61.25, which provides, infer alia, that unemployment compensation information is confidential and prohibits the department of labor from disclosing such information except in limited circumstances. Under 34 Pa.Code § 61.25(a) (3), unemployment compensation information may be disclosed as follows:

(i) To officers and employees of the department and members and employees of the board in the administration of the law.
(ii) To a claimant, the last employer of the claimant, a base year employer of a claimant or a representative of any of the foregoing in accordance with paragraph (7), to the extent necessary for the proper determination of the claimant’s application for benefits and claims for compensation.
(iii) To an employer or a representative of an employer in accordance with paragraph (7), to the extent necessary for the proper determination of the employer’s liability for reports and payments under the law and the proper administration of the employer’s account.
(iv) To public employees in the performance of their public duties.
(v) As determined by the department or the board to be necessary for the proper administration of the unemployment compensation program.
(vi) As permitted by provisions of the law or as required or permitted by Federal law.

34 Pa.Code § 61.25(a)(3)(i)-(vi)

The provision also includes three exceptions to the non-disclosure rule. 31 Pa.Code §61.25(a)(5)(i)-(iii). Disclosure may be permitted in the following situations:

(i) A legal proceeding under the law or a statute administered or enforced by the Commonwealth.
(ii) Information disclosed to a claimant, employer or representative under paragraph (3)(ii) or (iii).
(iii) Information filed with the unified judicial system by the department or the board in the administration of the law.

Id.

At oral argument, plaintiffs argued that notwithstanding the nondisclosure rule provided in 31 Pa. Code § 61.25(a)(3), disclosure in this case is permitted under the exceptions outlined in 31 Pa.Code § 61.25(a)(5) (i)-(iii). We disagree. The exceptions in Section 61.25 involve a “legal proceeding under the law.” Pursuant to 34 Pa.Code § 61.1, “law” is clearly defined as “[t] he Pennsylvania Unemployment Compensation Law.” Thus, the exceptions to the nondisclosure rule only apply to “legal proceedings under the [unemployment compensation] law...” There is no permissible disclosure of unemployment compensation information in legal proceedings which do not involve unemployment compensation law in any way. Since the instant case does not implicate unemployment compensation law, we find that the exception is inapplicable here. Any information or record on defendant Douglas’ application for and receipt of unemployment compensation is therefore privileged and cannot be disclosed.

ORDER

And now, this 20th day of January, 2015, having consideredplaintiffs’petitionto compel the Commonwealth of Pennsylvania Department of Labor and Industry, office of unemployment benefits to provide a full, complete and correct copy of all unemployment compensation records for defendant Robert R. Douglas, and upon oral argument heard in this matter, it is ordered that plaintiffs’ petition is denied.

      . These regulations were enacted in response to amended federal regulations implementing the Social Security Act and the Federal Unemployment Tax Act. See 20 C.F.R. § 603; 26 U.S.C. §§ 330111; 42 U.S.C. §§ 301-1397. If it is to receive federal funds, the Department of Labor must enact “provision[s] for maintaining the confidentiality of any Unemployment] Compensation] information which reveals the name or any identifying particular about any individual or any past or present employer or employing unit.” Id. § 603.4


author: WRIGHT PADILLA, J.,

text:
    Cigar Factory Condo Association v. Cigar Factory Partners LLC

      C.P. of Philadelphia County,
    August Term,
    2013 No. 2073; 3313 EDA 2014

      Perry Brandon Liss, for appellant.

      Michael David Li Puma, for appellee.
    Feb. 18, 2015
   WRIGHT PADILLA, J.,

Appellant, Cigar Factory Partners, appeals from this court’s order denying its petition to open judgment.

FACTUAL AND PROCEDURAL HISTORY

On August 20, 2013, appellee, Cigar Factoiy Condo Association, commenced this case by petition to confirm arbitration award.

On September 2, 2013, appellee filed an affidavit of service stating that the petition had been served upon appellant by personal service to Karen Wozinica, an agent or person in charge of the place of business, on August 23, 2013 at 530 S. 2nd Street, Philadelphia, PA.

On September 17, 2013, this court granted appellee’s petition and confirmed the July 1, 2013, arbitration award in favor of appellee and against appellants in the amount of $61,064.00.

On April 10, 2014, appellee filed a praecipe for writ of execution, which was returned July 3,2014 after a stay by appellee’s attorney.

On May 22, 2014, appellee filed two affidavits of service, averring that the notice of sale had been served upon appellant by personal service at 530 S. 2nd Street, Philadelphia, PA and posting of the premises of 1808 Spruce Street, Philadelphia, PA on May 13, 2014.

On July 9, 2014, appellant filed a petition to open judgment, averring that: it is a Pennsylvania Limited Liability Company headquartered at 1808 Spruce Street, Philadelphia, PA; that appellant was not sent notice about an arbitration in the matter; has not seen proof of arbitration; that appellant was never properly served with the petition to confirm; and that it was unaware of the matter until it was served with notice of a sheriff’s sale of the property located at 1147-53 N. 4th Street, Unit CYB.

On July 24, 2014, appellee filed its response, averring that appellant was notified ofthe arbitration andparticipated in the proceeding; that appellant and additional appellant were found jointly and severably liable; and denying all other allegations.

On October 14, 2014, this court heard argument on the merits of the petition. Appellant’s counsel stated that he had “misunderstood the petition” and that his client was aware of the arbitration last year but was not aware of the date. N. T. at 4-5. Appellant further stated that the property was subject to another litigation, and thus he did not believe it was wise to spend money trying to open the judgment if the property was not his; however, the litigation was subsequently settled. N.T. 6. Appellee and appellant’s counsel stipulated that appellant had been served with notice of the hearing before this court. N.T. at 7-8. Although appellant’s principal did not appear to testify, counsel for appellant argued that though he knew he was involved in arbitration, he had not received notice of the arbitration date. N.T. at 16.

Appellee presented evidence that: notice of the arbitration claim had been served on appellant’s principal Gagan Lakhmna at 1808 Spruce Street; that Lakhmna had signed for the letter; that an attorney had entered his appearance on behalf of appellant; that appellant’s principal had sent an email to all parties involved stating that he could not make the arbitration hearing date; an email showing that the arbitrator had set a preliminaiy hearing conference call which appellant’s principal did not join; an email from appellant’s principal stating that he had come down with a fever and could not make the hearing; an email generated June 4, 2013 from the AAA to all parties notifying them of the arbitration hearing set for June 6, 2013; and a July 2, 2013 letter from the AAA to appellant’s principal via email and certified mail at his office address transmitting a copy of the arbitration award against him and his company in the amount of $61,064.00 plus attorney’s fees. N.T. at 10-12.

That same day, this court denied appellant’s motion to open and/or strike judgment.

OnNovember 4,2014, the property was sold at sheriff’s sale for $10,300.00.

On November 10, 2014, appellant filed a timely notice of appeal to the Superior Court of Pennsylvania.

On November 12, 2014, this court issued its order pursuant to Pa. RAP. 1925(b), directing appellant to file its concise statement of matters complained of on appeal within twenty-one (21) days.

On December 3, 2014, appellant filed its concise statement of matters complained of on appeal, arguing that this court erred in denying its petition to “strike/open judgment” where appellant was never properly served; and where appellant had timely filed its petition, did not have notice of the underlying arbitration, and had a meritorious defense based on appellee’s “extreme overcharging of condominium fees.”

DISCUSSION

Appellant attacks this court’s denial of its petition to strike and/or open judgment. In order to obtain relief from the entry of a default judgment, the law provides two distinct remedies — an aggrieved party may file a petition to strike the default judgment and/or a petition to open the default judgment. Mother's Rest. Inc. v. Krystkiewicz, 2004 PA Super 411, 861 A.2d 327, 336 (Pa. Super. Ct. 2004). They are generally not interchangeable; a petition to strike does not involve the discretion of the court but is a demurrer to the record. Id. A petition to open judgment, on the other hand, is an appeal to the equitable powers of the court. Id.

The standard of appellate review is that of abuse of discretion with regard to the petition to open only; the court’s decision will not be reversed absent an abuse of discretion or error of law. Erie Ins. Co. v. Bullard, 2003 PA Super 448, 839 A.2d 383, 386 (2003).

I. PETITION TO STRIKE DEFAULT JUDGMENT

As noted above, a petition to strike is a demurrer to the record. Mother’s Rest., Inc., 861 A.2d at 336. Such a demurrer “admits all well-pleaded facts for the purpose of testing conclusions of law drawn from those facts,” and the court may only look at the facts of record at the time the judgment was entered to decide if the record supports the judgment. Id. A petition to strike may be granted only if a fatal defect appears on the record. Id. See also U.K. LaSalle, Inc. v. Lawless, 421 Pa. Super. 496, 618 A.2d 447 (1992). A petition to strike does not involve the discretion of the court. Triangle Printing Co. v. Image Quest, 730 A.2d 998, 999 (Pa. Super. 1999).

Appellant argues that the judgment should be stricken as it was not served. This petition to confirm an arbitration award was commenced August 20, 2013. On September 2, 2013, appellee filed an affidavit of service stating that Karen Wozinica, the person in charge of appellant’s offices, was served on August 23, 2013 at 2:10 PM at 530 South 2nd Street in Philadelphia, Pennsylvania. On September 17,2013, this court entered judgment in favor of appellee.

At the time judgment was entered, the record reflected that service had been properly made.

Thus, there was no ground provided on which to strike the judgment.

II. PETITION TO OPEN DEFAULT JUDGMENT

Petitions to open judgment are appeals to the discretion of the trial court and will not be reversed absent a manifest abuse of discretion or error of law. Erie Ins. Co. v. Bullard, 2003 PA Super 448, 839 A.2d 383, 386 (2003). Petitions to open judgment must show that: the petition was promptly filed; the failure to appear or file a timely answer must be excusable; the party seeking to open the judgment must show a meritorious defense. Mother’s Rest., Inc., 861 A.2d at 336. The court may consider facts not before it at the time judgment was entered. Id.

a. Prompt Filing

The timeliness of a petition to open is measured from the date that notice of the entry of default was received; while there is not a specified time period, the court should consider the length of time between discovery of the entry of default, and reason for the delay. Myers v. Wells Fargo Bank, N.A., 2009 PA Super 241, 986 A.2d 171, 176 (2009).

In the instant case, judgment was entered September 17, 2013. Appellant averred that it was not made aware of the arbitration and ensuing petition until it was served by posting of the property at 1147-53 N. 4th Street, Unit CYB, with notice of sheriff’s sale. Its petition to open judgment was filed July 9, 2014; two hundred and ninety-five (295) days after the date of commencement of this case, fifty-seven (57) days after the date appellee served appellant per the affidavits of service, and twenty (20) days after the date appellant averred it discovered the default.

However, as noted above, evidence was presented to note that appellant’s principal had previously signed for service of the notice of arbitration, had participated in email correspondence regarding the scheduling of the arbitration hearing, and that notice of the award had been sent to appellant’s principal both by email and by certified mail to his office address. Thus the reason proffered for the delay, i.e. that appellant had received no notice of the arbitration, award, or filing of the petition, is not a credible one.

Accordingly, this court denied appellant’s untimely petition.

b. Reasonable Excuse

Appellant’s sole explanation offered for its failure to respond is it did not have knowledge of the arbitration and judgment. As discussed more extensively above, however, this court found that appellant did have knowledge of the action and was properly served.

Additionally, at the hearing before this court, appellant’s counsel represented to this court that that property had been the subject of litigation between appellant and a third party. N.T. at 5-6. Appellant’s principal believed that the third party “was going to take this property back, and therefore he didn’t think it was wise to spend money trying to open the judgment or fight about it because he didn’t think the property was going to be his, so that’s why it took almost a year to deal with this.” N.T. 5-6.

Consequently, this court found appellant had not provided a reasonable excuse for the delay.

c. Meritorious Defense

Finally, appellant avers that it has pled a meritorious defense. The requirement of a meritorious defense is only that a defense must be pleaded that if proved at trial would justify relief. Smith v. Morrell Beer Distributors, Inc., 2011 PA Super 183, 29 A.3d 23, 26 (2011). A defendant must set forth such a defense in “precise, specific, and clear terms.” Id. Appellant has already failed two of the three prongs required to open the judgment; however, this court will nevertheless address his meritorious defense claim despite this. Appellant argues that it had a meritorious defense to the claims “based on plaintiff/respondent’s extreme overcharging of condominium fees.”

The original petition to confirm the arbitration award stated that appellants, as owners of certain condominium units at the Cigar Factory Condominium, and owed money for monthly condominium assessments associated with the units along with late fees, attorneys’ fees, and costs associated with collection. The petition included the declaration of condominium and associated rules, providing for the liability of owners. Appellants’ defense, as stated, is that it has not breached any duty owed to appellees and that if “any” condo fees are owed, such fees are significantly less than the judgment.

Appellants have not plead a clear, meritorious defense that would justify relief at trial.

CONCLUSION

For all of the reasons stated above, this court’s decision should be affirmed and appellant’s appeal denied.