author: LOVECCHIO, J.,

text:
    In re Estate of McDermott

      Elizabeth White, for plaintiff.

      Nicholas Orloff, for defendant.
    March 24, 2014
   LOVECCHIO, J.,

This matter came before the court on preliminary objections filed by Cheryl Breen and John McDermott II to the petition to compel the transfer of assets filed by Pennsylvania Department of Public Welfare (DPW). The relevant facts follow.

On January 31, 2011, Arlene McDermott died. Prior to her death, her daughter Cheryl Breen and son John McDermott, II filed a joint petition to adjudicate Ms. McDermott as an incapacitated person and for them to be appointed the plenary co-guardians of her person and estate, and a petition to authorize said guardians to expend principal to implement an estate plan (hereinafter “guardianship and estate petition”). This petition was filed under No. 41-08-0470 in the Court of Common Pleas of Lycoming County, Orphan’s Court Division.

By order of court dated September 12, 2008, a hearing on the guardianship and estate petition was scheduled for December 23,2008. Service of the petition and scheduling order was not made on the Pennsylvania Department of Public Welfare (DPW), and no representative of DPW appeared at the hearing.

Following the hearing, the guardianship and estate petition was granted and Ms. Breen and Mr. McDermott (hereinafter “co-guardians”) were appointed plenary co-guardians of Ms. McDermott’s person and estate.

Prior to the appointment of co-guardians and while competent, the deceased executed both a last will and testament and a durable power of attorney.

The durable power of attorney appointed her daughter Cheryl Breen as her lawful agent and among other powers, gave her the authority to make gifts and transfers, in her sole discretion, which would “help qualify” her for public or private benefits.

The final order appointing the co-guardians gave them the authority, among other things, to make decisions regarding the available income and assets to benefit the estate and to authorize any contracts for public assistance, Social Security or other benefits; and the power to implement a long term healthcare plan, execute an irrevocable trust, purchase an annuity, transfer life insurance policies owned by the incapacitated person, and seek to qualify the incapacitated person for medical assistance benefits and transfer real estate to an irrevocable trust owned by the incapacitated person.

The co-guardians subsequently created the Arlene L. McDermott Real Estate Protector Trust (the “trust”) and, during Ms. McDermott’s life, transferred her assets in the approximate amount of $65,000.00 to the trust.

On or about May 1, 2010, Ms. McDermott qualified to receive medical assistance from DPW. From May 1, 2010 through January 31, 2011, DPW provided medical assistance to Ms. McDermott in the approximate amount of $45,000.00.

Following Ms. McDermott’s death, DPW asserted a claim against her probate estate in the approximate amount of $45,000.00 for reimbursement of the medical assistance. Counsel for her estate, however, informed DPW that the gross value of the probate assets of the estate was less than $2,400.00. The assets in the trust, however, as of Ms. McDermott’s death were over $65,000.00.

On August 5,2013, DPW filed a petition to compel the co-guardians to transfer assets from the trust to decedent’s probate estate. On September 16, 2013, the co-guardians filed preliminary objections to DPW’s petition. On October 1, 2013, DPW filed a response in opposition to the preliminary objections.

A conference was held before the court on October 23, 2013. Following the conference, the court directed that the parties file respective briefs. The brief in support of the preliminary objections was filed on December 23, 2013 while the brief in opposition was filed on January 22, 2014. This matter is now ripe for a decision.

The preliminary objections to the petition to compel consist of a demurer and failure to join a necessary party. The request for a demurer is based on four separate arguments.

The co-guardians assert that DPW has failed to establish a legally cognizable cause of action for the following reasons: the Lycoming County Orphan’s Court had jurisdiction to enter the decree, DPW lacks standing to sue, the court had authority to grant the co-guardians gifting powers, and the agent under the power of attorney was already granted expansive unlimited gifting powers explicitly allowed under the statute. Co-guardians failed to address their preliminary objection in the nature of the failure to join a necessary party in their brief. Accordingly, the court will deem said objection waived and will address only those arguments asserted in their brief relating to the demurrer.

Rule 1028 (a)(4) of the Pennsylvania Rules of Civil Procedure provides that a party may file a preliminary objection based on the legal sufficiency, or insufficiency, of a pleading (demurer). A demurer tests the legal sufficiency of the complaint. Sullivan v. Chartwell Inv. Partners, LP, 873 A.2d 710, 714 (Pa. Super. 2005). A demurer should be granted only in situations that are clear and free of doubt. Bourke v. Kazaras, 746 A.2d 642, 643 (Pa. Super. 2000). When sustaining a demurer, the trial court must be satisfied that the claims on the face of the complaint cannot be sustained. Sullivan, 873 A.2d at 714. If doubt or uncertainty exists, the trial court should overrule the demurer. Id. In deciding a demurer, the court must resolve the issues solely on the basis of the pleadings; no testimony or other evidence outside of the complaint may be considered to dispose of the legal issues presented by a demurer. Mellon Bank, N.A. v. Fabinyi, 650 A.2d 895, 899 (Pa. Super. 1994) (citations omitted). All well and clearly pled material, factual averments and fairly deducible inferences can be considered. Myers v. Ridge, 712 A.2d 791, 794 (Pa. Commw. 1998).

Co-guardians first argue that DPW’s petition should be dismissed because the court’s December 23, 2008 decree is not subject to collateral attack by DPW and/or DPW does not have standing to bring its petition. Co-guardians argue the lack of standing to collaterally attack based on sections 5511 and 5525 of the Probate, Estates and Fiduciary (PEF) Code (20 Pa.C.S. §§5511 and 5525), which they contend supports their claim that DPW was not entitled to notice of the competency hearing. They further assert, pursuant to section 5523, that the decree cannot be collaterally attacked on account of any irregularity, because the court had jurisdiction to enter the order.

DPW counters that it was an interested party under the law and that it was entitled to notice. DPW argues that because it was not provided notice, the court did not have jurisdiction to enter the decree and it is subject to collateral attack.

The guardianship and estate petition included both a petition to appoint a guardian and a petition to authorize the guardian to expend principal and implement an estate and long term care plan and to make a gift of real estate. It was filed pursuant to both 20 Pa. C.S. § 5511 and 20 Pa. C.S. §5536.

The petition more specifically sought approval for distributions of income and principal for the specific purpose of creating medical assistance (hereinafter “MA”) eligibility. See petition, paragraph 11 and Exhibit “B” attached and made a part of the petition. Indeed, DPW is specifically referenced in the estate and long term healthcare recommendation form attached as Exhibit “B.” At no time whatsoever was DPW notified of the petition, the scheduling order, the hearing, or the distribution of income and/or principal in order to create MA eligibility for Ms. McDermott.

The difficulties in this case arise because two different, but related, requests were joined in a single petition. The sections of the PEF code cited by co-guardians relate to the determination of incapacity, the designation a guardian (or in this case, co-guardians) to act on the incapacitated person’s behalf, and the time frame within which the guardian must notify DPW of his or her appointment if the incapacitated individual is receiving benefits. The court agrees that DPW was not an interested party with respect to guardianship portion of the petition that sought determinations regarding Ms. McDermott’s alleged incapacity and who should be appointed to act on her behalf, and the court does not believe that DPW is asserting that it was an interested party in those determinations. Instead, DPW is asserting that it was an interested party to the estate planning portion of the petition filed pursuant to section 5536.

This portion of the petition specifically sought to transfer assets for the purpose of qualifying Ms. McDermott for MA benefits.

Section 5536(b) states:

(b) Estate plan. — The court, upon petition and with notice to allparties in interest and for good cause shown, shall have the power to substitute its judgment for that of the incapacitated person with respect to the estate and affairs of the incapacitated person for the benefit of the incapacitated person, his family, members of his household, his friends and charities in which he was interested. This power shall include, but is not limited to, the power to:
(1) Make gifts, outright or in trust.
(2) Convey, release or disclaim his contingent and expectant interests in property, including marital property rights and any right of survivorship incident to joint tenancy or tenancy by the entirety.
(3) Release or disclaim his powers as trustee, personal representative, custodian for minors, or guardian.
(4) Exercise, release or disclaim his powers as donee of a power of appointment.
(5) Enter into contracts.
(6) Create for the benefit of the incapacitated person or others, revocable or irrevocable trusts of his property which may extend beyond his disability or life.
(7) Exercise options of the incapacitated person to purchase or exchange securities or other property.
(8) Exercise all rights and privileges under life insurance policies, annuity contracts or other plans or contractual arrangements providing for payments to the incapacitated person or to others after his death.
(9) Exercise his right to claim or disclaim an elective share in the estate of his deceased spouse and renounce any interest by testate or intestate succession or by inter vivos transfer.
(10) Change the incapacitated person’s residence or domicile.
(11) Modify by means of codicil or trust amendment, as the case may be, the terms of the incapacitated person’s will or of any revocable trust created by the incapacitated person, as the court may deem advisable in light of changes in applicable tax laws.
In the exercise of its judgment for that of the incapacitated person, the court, first being satisfied that assets exist which are not required for the maintenance, support and well-being of the incapacitated person, may adopt a plan of gifts which results in minimizing current or prospective taxes, or which carries out a lifetime giving pattern. The court in exercising its judgment shall consider the testamentary and inter vivos intentions of the incapacitated person insofar as they can be ascertained.

20 Pa.C.S.A. §5536(b)(emphasis added).

DPW was clearly an interested party under both the terms of the petition and by law. See 20 Pa.C.S.A. §767. Certainly one of the purposes, if not the sole purpose, of this portion of the petition was to make DPW responsible for the payment of Ms. McDermott’s care. Since DPW’s financial interests could be adversely affected by the granting of the petition, it was entitled to notice and the opportunity to be heard. As a result, the preliminary objection based upon a lack of standing fails.

The failure of the co-guardians to properly serve DPW, either actually or constructively, as a party in interest renders the portion of the order giving the co-guardians the power to distribute income and principal for the purpose of qualifying Ms. McDermott for MA void. See In re Alexander, 758 A.2d 182, 187-188 (Pa. Super. 2000) (failure to notify heir was a jurisdictional defect that rendered orphan’s court’s distribution decree void). Furthermore, because failure to give notice to an interested party is a jurisdictional defect, co-guardians preliminary objection, based upon 20 Pa.C.S. §5523, that the order is not subject to collateral attack, also fails.

Co-guardians further argue that DPW’s petition fails to state a legally cognizable cause of action because they were permitted to transfer the assets to the trust for the purpose of qualifying the decedent for MA.

Co-guardians contend that section 5536 (b) authorized the court to enter the decree that it did and to specifically permit the co-guardians to allow for gifting, for the purpose of enabling MA eligibility. Co-guardians argue that the court, in its discretion, exercised its authority based on both the testamentary and inter vivos intentions of the then alleged incapacitated person. This argument, however, assumes that the court had jurisdiction to enter the order and that it is valid and enforceable. Furthermore, while the statute directs the court to consider the testamentary and inter vivos intentions of the incapacitated person, the court also must consider whether the assets are necessary for the person’s maintenance, support, and well-being. This is not to say that the court is inclined to grant DPW’s petition. It is only to say that DPW had the right to be heard when these determinations were being made.

Co-guardians’ final contention is that the agent under the power of attorney was already granted expansive unlimited gifting powers explicitly allowed under the statute. Co-guardians may raise this issue as a potential defense to DPW’s petition, but the court cannot decide this issue in the context of preliminary objections. At this stage of the proceedings, there is no factual record. Therefore, the court does not know whether the assets were gifted by the agent under the power of attorney (hereinafter the “POA”) or transferred to an irrevocable trust by the co-guardians.

The court also questions whether a transfer to the trust by the POA (by gift or otherwise) would insulate the assets from DPW’s petition. The guardianship and estate petition filed in September 2008 acknowledged that the POA did not have the power to create an irrevocable trust. Specifically, paragraph 19 stated:

The alleged incapacitated person does have a power of attorney, appointing her daughter, Cheryl A. Breen[,] as her agent, and her son, John W. McDermott, II, as her successor agent. Said power of attorney allows the agent to make unlimited gifts, however[,] it does not allow the agent to execute an irrevocable trust on behalf of the alleged incapacitated person, and the alleged incapacitated person does not have the capacity to execute a power of attorney that authorizes her agent to execute an irrevocable trust.

Furthermore, absent express language to the contrary, when a POA is granted the power to create a trust for the principal’s benefit it is subject to the following definition and conditions:

A power “to create a trust for my benefit” shall mean that the agent may execute a deed of trust, designating one or more persons (including the agent) as original or successor trustees and transfer to the trust any or all property owned by the principal as the agent may decide, subject to the following conditions:
(1) The income and corpus of the trust shall either be distributable to the principal or to the guardian of his estate, or be applied for the principal’s benefit, and upon the principal’s death, any remaining balance of corpus and unexpended income of the trust shall be distributed to the deceased principal’s estate.
(2) The deed of trust may be amended or revoked at any time and from time to time, in whole or in part, by the principal or the agent, provided that any such amendment by the agent shall not include any provision which could not be included in the original deed.

20 Pa.C.S. §5603(b) (emphasis added).

In conclusion, based upon the pleadings of record, this court cannot conclude that DPW has no basis for relief. While the Court of Common Pleas of Lycoming County previously approved the guardianship and estate petition, the court cannot conclude that said approval precludes DPW from attacking the execution of the estate plan under the circumstances.

ORDER

And now, this 24th day of March 2014 for the reasons set forth above, the court denies the co-guardians’ preliminary objections. The parties shall be permitted to engage in discovery. The discovery deadline is June 30, 2014. Any and all motions for summary judgment must be filed no later than July 31, 2014. A conference in this matter is scheduled for the 29th day of August, 2014 at 11:00 A. M in Courtroom No. 4 of the Lycoming County Courthouse to discuss all pretrial issues.


source: Caselaw Access Project

author: HESS, J.,

license: Public Domain

text:
    Weidner v. McCann School of Business, Inc.

      Heather E. Verchick, for plaintiff.

      Kenneth M. Argentieri, for defendants.
    March 12, 2014
   HESS, J.,

OPINION and ORDER

Before the court are the preliminary objections and petition to compel arbitration of defendants McCann Education Centers, Inc. (hereinafter “McCann”) and Delta Career Education Corporation (hereinafter “Delta”) filed in response to an amended complaint filed by plaintiff Kelsi Weidner. (Prelim, objections and pet. to compel indv. arbitration, filed Oct. 1, 2013). Plaintiff’s amended class action complaint contains three counts: at Count I, a claim for breach of contract; at Count II, a claim for violation of the Unfair Trade Practices and Consumer Protection Law, 73 P.S. §201-1, et. seq.; and at Count III, a claim for violation of the Federal Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §1962(C), (D). (Am. class action compl., filed Sept. 11, 2013). The defendants have preliminarily objected to the amended class action complaint, have requested that the plaintiff be ordered to arbitrate all disputes on an individual basis, and have requested that the present case be dismissed. (Prelim, objections and pet. to compel indv. arbitration, filed Oct. 1,2013).

Plaintiff’s amended complaint may be summarized as follows: plaintiff, Kelsi Weidner, is an adult individual using her attorney’s place of business as her mailing address, 215 Pine Street, Suite 200, Harrisburg, PA 17101. (Am. class action compl., ¶ 1). McCann, a Pennsylvania corporation located at 346 York Road, Carlisle, PA 17013, is an education institution that offers classes and degrees to students in various fields of study. (Am. class action compl., ¶¶ 2, 5). McCann has several campuses across Pennsylvania where several different programs are offered, including lab tech and surgical tech programs. (Am. class action compl., ¶¶9, 10). Delta, a Virginia corporation with a mailing address of 4525 Columbia Street, Suite 101, Virginia Beach, Virginia 23462, owns and/or operates educational institutions that offer classes and degrees to students in various fields of study. (Am. class action compl., ¶¶3, 4). Plaintiff avers that McCann is one such educational institution affiliated with Delta. (Am. class action compl., ¶¶5, 6).

In December of 2011, plaintiff spoke with a representative of McCann about enrolling in their lab tech program. (Am. class action compl., ¶ 22). Plaintiff avers that McCann’s representative advised her that, after graduating from McCann, she would have to take a certification examination, which McCann would help her study for and take, and should then have no problem securing a job. (Am. class action compl., ¶¶ 23, 24). Plaintiff enrolled in the lab tech program in February of 2012. (Am. class action compl., 21). As part of her enrollment, plaintiff entered into an enrollment agreement with McCann. (Am. class action compl., ¶ 37). Plaintiff avers that, after enrollment, representatives of McCann continued to make assurances that the lab tech and surgical tech programs at the Carlisle campus were properly accredited and would lead to certification after sitting for the relevant certification examinations. (Am. class action compl., ¶ 40). The plaintiff ultimately learned, however, that the lab tech and surgical tech programs at the Carlisle campus were, in fact, not nationally accredited and did not allow her to sit for the relevant certification examination after graduation. (Am. class action compl., ¶ 42).

Counsel for the plaintiff makes further, similar, averments in order to establish a class action lawsuit. (Am. class action compl., ¶¶ 9-20, 25-33). Specifically, it is averred that the defendants solicited students to enroll in the lab tech and surgical tech programs through various means and that the putative class members sought additional information about the programs at the Carlisle campus as a result of the solicitations. (Am. class action compl., ¶¶ 11, 12). It is further averred that the putative class members were informed that they would be able to sit for the relevant certification examination after completing their respective program and would then enjoy better job opportunities. (Am. class action compl., ¶¶13, 14). Like the named plaintiff, it is averred that the putative class members justifiably relied on statements by the defendants that the programs were properly accredited, that the putative class members discovered that the programs were not nationally accredited, and the putative class members were not able to sit for the relevant certification examinations as a result. (Am. class action compl., ¶¶ 15, 16). Based on the foregoing, plaintiff asserts at Count I, a claim for breach of contract; at Count II, a claim for violation of the Unfair Trade Practices and Consumer Protection Law, 73 P.S. §201-1, et. seq.; and at Count III, a claim for violation of the Federal Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1962(C), (D) to which the defendants preliminarily object and seek to have this court compel individual arbitration.

Pursuant to Pennsylvania Rule of Civil Procedure 1028(a), preliminary objections may be filed by any party to any pleading on several limited grounds, including, “pendency of a prior action or agreement for alternative dispute resolution....” Pa.R.C.P. 1028(a)(6). “An agreement to arbitrate may be asserted by preliminary objection or by petition to compel arbitration....” Note to Pa.R.C.P. 1028(a)(6). When considering preliminary objections, “all well-pleaded allegations and material facts averred in the complaint, as well as all reasonable inferences deducible therefrom, must be accepted as true.” Wurth by Wurth v. City of Philadelphia, 584 A.2d 403, 407 (Pa. Cmwlth. 1990). However, the trial court “need not accept as true conclusions of law, unwarranted inferences from fact, argumentative allegations, or expressions of opinion.” Penn Title Ins. Co. v. Deshler, 661 A.2d 481, 483 (Pa. Cmwlth. 1995).

The standard of review for a petition to compel arbitration is well settled. In disputes over whether arbitration should be compelled, “judicial inquiry is limited to determining (1) whether a valid agreement to arbitrate exists between the parties and, if so, (2) whether the dispute involved is within the scope of the arbitration agreement.” Smith v. Cumberland Group, Ltd., 687 A.2d 1167, 1171 (Pa. Super. 1997).

Here, the defendants seek to have the case dismissed and the matter ordered to arbitration pursuant to an arbitration provision contained in the enrollment agreement, which states:

ARBITRATION

You (the student) and McCann School of Business and Technology agree that any dispute arising out of our [sic] relating to this enrollment agreement, your enrollment or your attendance at McCann School of Business and Technology, whether such dispute arises during or after your attendance and whether the dispute is based on contract, tort, statute, or otherwise, shall be resolved by binding arbitration in the city and county which the school is located within the state of Pennsylvania. You (the student) and McCann School of Business and Technology each further agrees that this arbitration provision provides each party with the exclusive remedy for redress of any grievance or resolution of any dispute arising out of this agreement, and each party expressly waives any right, including without limitation the right to trial by jury, it might have to seek redress in any federal, state or local court or other forum, except for an action to enforce in court an arbitration award rendered to this agreement.

(Aff., Ex. A).

The plaintiff counters that the foregoing arbitration agreement was located on the fourth page of the enrollment agreement. The plaintiff initialed provisions on the first and second pages and signed the second page, but there is no evidence to show that the plaintiff was ever presented the page containing the arbitration provision much less that she reviewed it and signed off on it.

As noted, we must determine if a valid agreement to arbitrate exists. However, before doing so, we must address the question of what body of law to apply. The defendants contend that the enrollment agreement involves interstate commerce and should be analyzed through the lens of the Federal Arbitration Act (hereinafter “FAA”), 9 U.S.C. §§ 1, et seq., because such agreements are regulated by the United States Department of Education and many students use federal student loans and grants to pay their tuition. The plaintiff has not conveyed a position on this issue. Regardless, even under the FAA, state law principles are to be used in determining the validity of the arbitration agreement.

Section 2 of the FA A is the “primary substantive provision of the Act.” Moses H. Cone Mem'l. Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1982) superseded by statute on other grounds. Section 2 states, “[a] written provision in any... contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction... shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. In the latter part of § 2, the “saving clause permits agreements to arbitrate to be invalidated by generally applicable contract defenses,

such as fraud, duress, or unconscionability, but not by defenses that apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue.”AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740, 1746 (2011) (quotations omitted). In keeping with the Conception holding, the Pennsylvania Superior Court has held, “when addressing the specific issue of whether there is a valid agreement to arbitrate,” under the FAA, “courts generally should apply ordinary state-law principles, that govern the formation of contracts, but in doing so, must give due regard to the federal policy favoring arbitration.” Pisano v. Extendicare Homes, Inc., 77 A.3d 651, 661 (Pa. Super. 2013) (quotations omitted).

Mindful of this background, we turn to the relevant principles in order to determine whether a valid arbitration agreement exists. In general:

A party’s signature to a contract is designed to evidence his intention to be bound thereby. There is no requirement that a contract be signed at any particular place so long as the signatories attest the meeting of their minds on the basis of the agreed-upon writings and their intention to be obligated accordingly.

Petrie v. Haddock, 119 A.2d 45, 47 (Pa. 1956). However, “[a]ny agreement... by which it is intended to diminish legal rights which normally accrue as a result of a given legal relationship or transaction must spell out the intention of the parties with the greatest of particularity, since such contracts...are construed strictly against the party seeking their protection.” Morton v. Borough of Ambridge, 101 A.2d 661, 662 (Pa. 1954). In line with this principle, it has routinely been held that arbitration agreements are to be strictly construed, Cumberland-Perry Area Vocational-Technical Sch. Auth. v. Bogar & Bink, 396 A.2d 433, 434-35 (Pa. Super. 1978), and that arbitration agreements “are upheld only where it is clear that the parties have agreed to arbitrate in clear and unmistakable manner.” Quiles v. Financial Exch. Co., 879 A.2d 281, 287 (Pa. Super 2005) (citing Emmaus Mun. Auth. v. Eltz, 204 A.2d 926 (Pa. 1964)).

Also, though the law favors arbitration agreements, “[i]t is...clear that the existence of an arbitration provision and a liberal policy favoring arbitration does not require the rubber stamping of all disputes as subject to arbitration.” McNulty v. H&R Block, Inc., 843 A.2d 1267, 1271 (Pa. Super. 2004). In McNulty, the court goes on to state that, when determining the validity of an arbitration agreement, “it is clear that the court’s role is greater than simply determining whether a contract has been signed.” Id. at 1272.

Here, the enrollment agreement consists of four pages. The plaintiff has signed the second page of the enrollment agreement and makes no contention that the signature is not hers. However, the plaintiff argues that there is no evidence that she expressly agreed to the arbitration provision because the arbitration provision was on the fourth and final page of the enrollment agreement, while she signed the second page.

Initially, we make two observations. First, the pages of the enrollment agreement are labeled “Page_of 4” at the top right hand corner. Second, above the signature block on the second page of the enrollment agreement, there is a paragraph stating, in part, “I certify that all information provided about me is accurate and that I have read all pages ofthis agreement and will be abide by its provisions” (emphasis added). However, the size of the text that makes up this paragraph must undoubtedly be characterized as fine print. Additionally, while the paragraph states that all pages have been read, that particular paragraph does not mention the number of pages of the enrollment agreement.

On the first two pages of the enrollment agreement, in addition to the signature at the bottom of the second page, the plaintiff had to initial next to five separate paragraphs. In fact, that last paragraph of the five was apparently determined to be so important that its entire text was set off in bold font. Comparatively, initials were not required by the arbitration provision.

In addition to not requiring initials, the arbitration provision of the enrollment agreement is surrounded by terms and conditions that are markedly less substantive than those contained on the first two pages, i.e., the terms and conditions above the signature. Most of the third and fourth pages of the enrollment agreement deal with refund policies. Rather than being a material part of the agreement that lays out conditions for enrollment, these provisions are information that institutions are required to provide to students regarding refund policies and information on Title IV requirements as to the treatment of Title IV funds when a student withdraws from enrollment. It is only after all of these recitations that the reader would find the arbitration provision. Finally, we note that the arbitration provision does contain a heading in all capital letters and set off in a bold style. However, the heading for the arbitration provision is noticeably smaller than the “return of unearned Title IV funds” heading above it.

The federal and Pennsylvania proclivity in favor of arbitration notwithstanding, in view of case law, it must be evident that an arbitration agreement was agreed to in a clear and unmistakable manner and courts must do more than just determine if the agreement was signed. Here, we find that there was no clear agreement to arbitrate.

While in isolation none of the above mentioned factors weighing against a clear agreement to arbitrate may be enough to find that there is no valid arbitration agreement, the doubts are too numerous when examined together. A document need not be signed on the last page; however, that is not the only concern here. In addition to being near the end of the enrollment agreement, the arbitration provision is buried beneath mandatory notices and separated from the focal point of the document. While the defendants were careful to draw the plaintiff’s attention to, apparently, vital information such as what hours the plaintiff must be available for class by requiring initials next to that portion of the enrollment agreement, the same treatment was not given to the area where the plaintiff waives the significant right to a jury trial. See Bucks Orthopedic Surgery Assocs., P.C. v. Ruth, 925 A.2d 868, 873 (Pa. Super. 2007) (“Additionally, it is axiomatic that waiving the right to trial must be a knowing and voluntary act of a party to a contract who is aware that the right is being waived”). The laissez-faire treatment of the arbitration provision is further seen by its heading being listed under the larger heading concerning the return of unearned Title IV funds and could appear to relate thereto. In sum, we cannot find that an agreement to arbitrate was reached in a clear and unmistakable manner.

ORDER

And now, this 12th day of March, 2014, upon consideration of defendants’ preliminary objections and petition to compel individual arbitration, and after argument, thereon, the preliminary objections of the defendants are overruled and the petition is denied.

      . Plaintiff and defendants have acknowledged that McCann Education Centers, Inc. has been incorrectly identified as McCann School of Business, Inc. in the original complaint and subsequent captions.


author: DOZOR, J.,

text:
    Hawkins v. Hawkins

      Richard James, for appellant.

      Christopher Mattox, for appellee.
    March 26, 2014
   DOZOR, J.,

This is an appeal from this court’s final order of equitable distribution dated January 17, 2014. The nature and history of the case is as follows:

Appellant/plaintiff/wife (hereinafter “wife”) filed a complaint in divorce on March 22, 2007. Appellee/ defendant/husband (hereinafter “husband”) filed his answer on March 29, 2007.

On November 24, 2009, Master Lehrkinder filed his Master’s Hearing Report and recommendation that rendered a determination with respect to the date of the parties’ separation. Husband subsequently filed an appeal of the master’s report and recommendation, on December 15, 2009, requesting a hearing de novo solely on the issue of the date of the parties’ separation.

On March 26,2010, wife filed a petition for bifurcation. On September 3, 2010, wife filed a motion for discovery/ case management conference.

On November 15, 2010, Judge Cartisano issued an order rendering a determination that the parties formally separated on December 31, 2003. The November 15, 2010 order from Judge Cartisano also permits husband to withdraw $60,000 annually from his Sunoco/Vanguard retirement account, account number 093518. Additionally, the order dismissed husband’s motion in limine to preclude witnesses from the November 8, 2010 hearing, held to determine the parties’ date of separation, as moot because no witnesses appeared at the hearing.

Judge Cartisano’s November 15, 2010 order also determined that bifurcation of this case was granted. On December 3,2010, wife filed a notice of intention to request entry of divorce decree and a praecipe to transmit the divorce record. On December 14, 2010, Judge Cartisano signed the bifurcated divorce decree in this case.

This equitable distribution matter was originally scheduled, listed and tried before Master Donald Lehrkinder, Sr., Esquire. However, prior to rendering a determination regarding the equitable distribution of the parties, Master Lehrkinder retired; thereafter, this case was assigned to the undersigned court.

Following the assignment of this case to this court, a pre-trial conference was scheduled on October 25, 2012, following the initial pre-trial conference, this court and the attorneys had numerous conferences prior to the November 27, 2013 equitable distribution trial. In the month leading up to the November 27, 2013 equitable distribution trial, there was a flurry of motions and orders regarding outstanding discovery and possible settlement of this case.

On November 27, 2013, this court held a de novo hearing; following the hearing this court took the matter under advisement. On January 17, 2014, this court issued final order of equitable distribution, which is the subject of this appeal.

On February 4, 2014, wife filed a notice of appeal. On February 6, 2014, this court issued an amended order requesting a statement of errors complained of on appeal pursuant to Pa. R.A.P 1925(b). In response to the 1925(b) request, wife submitted the following issues on appeal:

1. The trial court abused its discretion and misapplied the existing law in the Commonwealth of Pennsylvania in choosing the valuation date for marital property as the date of separation (December 31, 2003) as opposed to the preferred valuation date being the date of distribution. Said determination awarded to the defendant all appreciation in the marital property and accounts over the intervening time period of the separation which acts as a windfall for the defendant.
2. The trial court erred in choosing the separation date versus the date of distribution for valuing assets as the law applied by the trial court related to closely held businesses/corporations controlled by one party as opposed to marital assets such as savings, retirements, pensions, real estate, etc.
3. The trial court erred and committed an abuse of discretion in determining the value of defendant’s lump sum pension payment from Sunoco and therefore, failed to apply a coverture fraction which would have established the marital portion of defendant husband’s Sunoco retirement.
4. The trial court erred and committed an abuse of discretion when it determined that defendant’s severance pay package, which was based in part upon years of service while the parties were married and residing together, was not a marital asset subject to being apportioned for marital property purposes by applying a coverture fraction to the sum received less unused vacation days which the defendant had accumulated after the parties separated.

FACTS:

Appellant, hereinafter “wife,” Donna Iezzi Hawkins (DOB 3/1/1957), is currently 56 years of age and currently resides at 56 Rockford Road, Wilmington, DE 19806. Appellee, hereinafter “husband,” Joseph Hawkins (DOB 1/25/1950), is currently 64 years of age and currently resides at 100 Shadeland Avenue, Apartment 232, Drexel Hill, Pennsylvania 19026.

The parties were married on October 20,1979 and have one emancipated child, Alicia (DOB 5/13/1986), born of the marriage. Wife also has a son from her previous marriage, Brian (DOB 1/25/1976), who was adopted by husband and is also emancipated.

Wife is employed as an office manager at the University of Pennsylvania and has held that position since 1992. Wife receives “good benefits” from the University of Pennsylvania and her present gross salary is $54,000. See plaintiff’s Exhibit, P-23. In addition, wife holds aBachelors of Arts degree from the University of Pennsylvania which she received during the parties’ marriage.

Since the December 14, 2010 divorce, wife has remarried and purchased a home with her new husband who has a background as an accountant. Wife testified that her current household income is approximately $150,000. This court also heard credible testimony that wife is in excellent health.

Husband was employed with Sunoco during the parties’ marriage and continued post separation until retiring at the age of 55. Husband testified that he was effectively forced into retirement in December of 2005 after Sunoco lowered his grade level by two grades. Husband received an incentive package for retirement from Sunoco and has been unable to secure suitable employment since. Husband is currently 64 years of age. Husband is not in good health as he suffers from arthritis. Husband has little prospect of meaningful employment in the future.

At the equitable distribution hearing both parties represented that the date of separation was December 31, 2003. This court notes that a November 15, 2010 order issued by Judge Cartisano states that “the date of final separation for equitable distribution purposes shall be December 31, 2003.” Wife filed for divorce on March 19, 2013 and the parties were divorced by a bifurcated divorce decree on December 14, 2010.

Husband has helped the parties’ daughter, Alicia, pay for her college tuition and loans. After separation husband took over four (4) Sallie Mae loans on behalf of Alicia. See defendant’s Exhibit, D-2. This court notes that Alicia attends college at the University of Pennsylvania and since her mother (wife) is an employee there, 75% of daughter’s tuition is paid by the University. This court heard testimony that husband has paid $55,000 of daughter’s college loans/ tuition to date and that the present amount owed on those loans is $57,223.02. In addition husband pays $1,400 per month towards the college loans/tuition for the daughter.

The marital residence was sold after wife filed her complaint in divorce and the proceeds were placed in an escrow account.

During the equitable distribution trial, wife called Kenneth Biddick to testify with respect to the present day valuations of the marital estate, including the parties’ retirement accounts and plans, stocks, bank accounts, and life insurance cash values. Mr. Biddick was qualified by this court as an expert in forensic accounting. Mr. Biddick testified to the appreciated and accumulated values, dividends, distributions, loans and referred generally to stocks sometime dividing and advised the court that he relied on wife’s new husband (who is also an accountant) to provide him with the documents and information upon which he reached his conclusions and testified to in open court.

This court heard extensive testimony that both husband and wife had and still have numerous retirement accounts and pensions. Husband and wife disagree about the date the court should use to value the various retirement accounts and pensions. Husband submitted to the court that the particular facts and circumstances of this case, supported by the prevailing case law requires a date of separation value, and wife argues that the prevailing case law requires a date of distribution value.

There is no disagreement between the parties regarding the date of separation, December 31, 2003, and the value of the various retirement and pension plans as of that date. There is also no disagreement that the various retirement accounts/pensions have had significant withdrawals by both parties since December 31,2003. Since the December 31, 2003 date of separation, both parties have relied upon and withdrawn, on multiple occasions, substantial amounts from the retirement funds, with each party assuming their own tax consequences for the early withdrawal.

Wife testified that she withdrew $97,000 from her retirement funds for living expenses for herself and her new husband as well as legal expenses. Husband was permitted, by a court order signed by Judge Cartisano on November 15, 2010, to withdraw up to $60,000 annually from his Sunoco Vanguard retirement account. Husband testified to withdrawing a total of $135,000 from his retirement funds to assist with his living and medical insurance expenses since he was laid off from Sunoco in December of 2005.

This court was provided with some testimony, based upon Mr. Biddick’s extrapolation as to the value of this account and the monthly amount that wife should receive upon her retirement. This court again has concerns, with the methods and documentation, or lack thereof, used by wife’s expert to reach the total and monthly amount that will be provided to wife upon her retirement from the University of Pennsylvania.

Based upon the divorce code and the current case law, this court determined that wife’s retirement allowance plan from the University of Pennsylvania is considered marital property by this court.

This court was also asked to equitably divide the Sunoco wage continuation severance pay, which was provided to husband upon his retirement from Sunoco in December of 2005. This retirement/severance package was consisted of husband’s wage continuation and his unused vacation days and it was provided to husband upon his retirement in December of 2005. Based upon the divorce code and the current case law this court further determined that husband’s wage continuation and severance pay, that included unused vacation days, will be not be considered marital property by this court and is not considered a marital asset as it is post separation income for husband.

DISCUSSION:

The standard of review for assessing the propriety of an equitable distribution order is whether the trial court abused its discretion by a misapplication of the law or failure to follow proper legal procedure. Yuhas v. Yuhas, 79 A.3d 700, 705 (Pa. Super. 2013) citing McCoy v. McCoy, 888 A.2d 906, 908 (Pa. Super. 2009). The appellate court has consistently stated that:

[a] trial court has broad discretion when fashioning an award of equitable distribution.... We do not lightly find an abuse of discretion, which requires a showing of clear and convincing evidence. This court will not find an abuse of discretion unless the law has been overridden or misapplied or the judgment exercised was manifestly unreasonable, or the result of partiality, prejudice, bias, or ill will, as shown by the evidence in the certified record. In determining the propriety of an equitable distribution award, courts must consider the distribution scheme as a whole. We measure the circumstances of the case against the objective of effectuating economic justice between the parties and achieving a just determination of their property rights.

Reber v. Reiss, 42 A.3d 1131, 1134 (Pa. Super. 2012) quoting Biese v. Biese, 979 A.2d 892, 895 (Pa. Super. 2009) (internal citations and quotations omitted).

When rendering a determination for the equitable distribution of marital property, the trial court has the authority to divide the award as the equities presented in the particular case may require. Reber, 42 A.3d at 1137 quoting Schenk v. Schenk, 880 A.2d at 639. If the appellate court finds that a trial court has abused its discretion either by a misapplication of the law or failure to follow proper legal procedure, that abuse of discretion is not found lightly; rather, there must be clear and convincing evidence of an abuse of discretion by the trial court. Strauss v. Strauss, 27 A.3d 233, 235 (Pa. Super. 2011), reargument denied (Sept. 29, 2011), appeal granted, 41 A.3d 1286 (Pa. 2012); Smith v. Smith, 904 A.2d 15, 18 (Pa. Super. 2006).

Every case of equitable distribution is fact specific, with a result driven by the individual facts, circumstances and evidence of record and the application of precedent, with the goal to achieve economic justice.

Valuation Date

The first issue on appeal is whether this court abused its discretion and misapplied the existing law in choosing the date of separation, instead of the date of distribution, as the valuation date for the marital property.

In determining the value of marital assets, a court must choose a date of valuation that best works economic justice between the parties. Smith, 904 A.2d at 18 quoting McNaughton v. McNaughton, 603 A.2d 646, 649 (Pa. Super. 1992).

Consistent with the public policy considerations of the divorce code in §3102(a)(6) to “provide for economic justice,” the court may select the most appropriate date for valuation. 23 Pa. C.S.A. §3102(a)(6). Trial courts are given discretion in choosing the valuation date for marital property in order to achieve economic justice between the parties. Smith, 904 A.2d at 22.

The Superior Court has stated: “we do not attempt... to establish a valuation [date] to be used in every situation. To recognize a specific valuation date as a matter of law would deprive the trial court of the necessary discretion required to effectuate economic justice.” Sergi v. Sergi, 506 A.2d 928, 932 (Pa. Super. 1986).

The date of distribution has been the preferred date for determining the value of a marital asset. Nagle v. Nagle, 799 A.2d 812, 820 (Pa. Super. 2002). However, courts have consistently found that under certain circumstances the date of separation is more appropriate than the date of distribution for purposes of valuing marital assets. Litmans v. Litmans, 673 A.2d 382 (Pa. Super. 1996). The date of separation has been selected as the preferred valuation date in circumstances when one spouse consumes or disposes of marital assets, or there are other conditions that make current valuation difficult. Benson v. Benson, 624 A.2d 644 (Pa. Super. 1993); McNaughton, 603 A.2d at 649.

“Failure to permit a trial court to value marital property at the time of separation could result in allowing a spouse to reduce the value of marital property through unbridled consumption.” Sergi, 506 A.2d at 932.

Wife appeals this court’s use of the date of separation, instead of the date of distribution, for valuing assets. Wife erroneously concludes, in her statement of matters complained of on appeal, that the legal precedent adopting the date of separation is applied only in circumstances where there is a valuation of closely held businesses/corporations controlled by one party. Courts have consistently valued marital assets such as savings, retirements, pension, real estate, etc. from of the date of separation as economic justice requires.

For example in Barnhart, the Superior Court held that the husband’s pension should be valued from the date of separation. Barnhart v. Barnhart, 494 A.2d 443 (Pa. Super. 1985). The husband withdrew the $12,000 that vested in his pension, acquired during the marriage and prior to separation, to pay debts and expenses. Id. By using the date of distribution the trial court allowed the husband to deplete a marital asset after separation, but before the divorce, which defeats the purpose and spirit of equitable distribution. Id.

Mandating the use of one particular valuation date “would completely nullify the protection of the marital property distribution provisions of the code since it would mean that any property acquired during marriage and subject to equitable distribution could be removed from such distribution by a spouse merely consuming it after separation and before the divorce. We cannot allow a spouse to so easily defeat the purpose and spirit of equitable distribution.” Id. at 446.

1. Retirement / Pension Accounts

At the equitable distribution trial this court heard extensive testimony regarding husband and wife’s numerous retirement accounts and pensions. There is no dispute between the parties that both, husband and wife, withdrew substantial distributions from their respective retirement/pension accounts between the date of separation and the equitable distribution trial, with each party assuming their own tax consequences related to their individual withdrawals.

The expert witness’ opinion at trial with respect to the present day valuations of these accounts is found to be only conjecture and not a value to be credibly relied upon within a reasonable degree of certainty by this court. This court finds that the use of present day valuation of both parties’ retirement/pension accounts for equitable distribution purposes would be improper, fundamentally and economically unfair, unjust, unwarranted, and would be financially unbearable to husband and a windfall to wife.

2. Stock

There is no disagreement between the parties that wife completely dissipated one of her individually held stocks at some point after the date of separation and before equitable distribution trial held. The court determined, after hearing credible testimony and reviewing defendant’s Exhibit D-4, that wife’s Sunoco stocks were worth $28,508.42 as of the December 31, 2003 separation date.

The use of the separation date as the date of valuation for this stock is the one “most likely to achieve economic justice.” Using the date of separation allows promotes the purpose and spirit of equitable distribution and prevents one spouse from depleting a marital asset after separation but before divorce.

B. Coverture Fraction

The third issue complained of on appeal by wife is that this court erred and committed an abuse of discretion by failing to apply a coverture fraction to establish the marital portion of husband’s Sunoco retirement and severance pay package.

The sole purpose of the coverture fraction is to determine what portion of an asset’s value is attributable to the years of marriage and hence marital property subject to equitable distribution. DeMarco v. DeMarco, 787 A.2d 1072, 1076-77 (Pa. Super. 2001). If this marital portion is clear from the records of the plan itself, the use of the coverture fraction is unnecessary and potentially unfair to either the employee or non-employee spouse. Id. at 1077.

If upon reviewing the account records the value of the plan at both the date of marriage and date of separation is apparent, then the marital portion of the pension account is easily established by taking the difference of the value between the two dates. Paulone v. Paulone, 649 A.2d 691, 694 (Pa. Super. 1994).

This court correctly valued husband’s Sunoco retirement pension and the marital portion. Husband began working for Sunoco after the parties’ date of marriage, October 20, 1979, and continued to in that position post separation until his forced retirement on December 31, 2005. Therefore, the value of husband’s retirement benefits, paid by Sunoco constituted the marital property and the marital portion of husband’s Sunoco retirement benefits, that being the money accumulated from October 20, 1979 until December 31, 2003 was properly valued this court and equitably divided between the parties. Furthermore, this court properly determined that husband’s severance package with wage continuance was not marital property that was subject to equitable distribution as it was post separation income for husband.

B. Husband’s Severance Pay Package

Wife’s final issue on appeal concerns this court’s determination that the wage continuation and severance pay, received by husband after the date of separation, is not marital property subject to equitable distribution. The Pennsylvania Divorce Code defines marital property as “all property acquired by either party during the marriage... except (4) Property acquired after final separation until the date of divorce...” 23 Pa. C.S.A. § 3501(a). “Whether an asset is marital property or separate property for purposes of distribution of the marital estate is a matter reserved to the sound discretion of the trial court.” Goodemote v. Goodemote, 44 A.3d 74, 77 (Pa. Super. 2012) quoting Carney v. Carney, 673 A.2d 367 (Pa. Super. 1996).

Early retirement incentive plan benefits offered by an employer to a spouse are not marital property; unlike retirement benefits, which accrue during course of employment, early retirement incentives serve as an inducement to persuade termination. Gordon v. Gordon, 641 A.2d 530, 539 (Pa. Super. 1994). Similarly inLaBuda, the Superior Court held that a special retirement program offered to the husband after the date of marital separation should not be considered a marital asset. Labuda v. Labuda, 503 A.2d 971 (Pa. Super. 1986).

In both Gordon and Labuda the Superior Court focused on the expectations of the parties when determining whether a severance package should be considered marital property. Unlike basic pension benefits, which are planned and contemplated throughout service, incentive plans are not anticipated and not occasioned by continued employment. Gordon, 647 A.2d at 539. Wife could not have expected to enjoy these payments when husband received them because neither party had any idea that he would receive the payments until after they separated. See Labuda, 503 A.2d at 976. Husband’s retirement payments did not become a reality until after the parties’ separated. Since the incentives plans provided to husband were unanticipated during their marriage, wife had no expectation in these benefits. Id.

This court properly determined that husband’s wage continuation and severance pay, that included unused vacation days, should not be considered marital property and is not considered a marital asset, as it is post separation income for husband. The retirement incentive package was an unanticipated benefit offered to the husband, and others in his position, to persuade them to retire early. This court heard no evidence or testimony indicating that the retirement incentive was part of a benefits package in place throughout the marriage. Although the package includes unused vacation days which may have been acquired during the marriage; this court finds that the purpose of this retirement incentive was to replace husband’s post-separation earnings rather than compensate him for efforts made during marriage.

CONCLUSION:

For all of the foregoing reasons, the trial court’s final order of equitable distribution should be affirmed.

      . This court notes that on February 6, 2014, this court sent out a 1925(b) request; however, this court incorrectly requested the statement of matters complained of on appeal from husband instead of wife. Therefore, this court issued an amended order requiring 1925(b) statement on February 6, 2014.


author: ZULICK, J.,

text:
    Singh Realty, LLC v. Stroud Township Zoning Hearing Board

      Joseph P. McDonald, Jr., for appellant.

      Marc R. Wolfe, for appellee.
    March 26, 2014
   ZULICK, J.,

This matter comes before the court on the land use appeal of Singh Realty, LLC (Singh). Singh sought to build a four story Fairfield Inn & Suites by Marriott (Fairfield Inn) on a vacant parcel of land known as Bartonsville Plaza Condominium Unit Number 3. Before building the hotel, Singh sought several variances from the Stroud Township Zoning Hearing Board (ZHB). Public hearings were held on October 9, 2013. At that time the ZHB voted verbally to approve some of the variances requested, while declining two others. The two that were denied were a variance from the 30 foot maximum height of a wall sign requirement and a variance from the maximum letter height of a wall sign.

Singh requested and received permission to reopen the record and provide additional evidence before the ZHB rendered its written decision. The ZHB heard additional testimony on November 6,2013, but after this hearing the board again denied the requested variances. Singh timely appealed the ZHB’s decision. There are no intervenors. Both parties have briefed their positions, and the matter was argued before the court on February 1, 2014.

DISCUSSION

“In reviewing the decision of a zoning hearing board where the trial court has not taken any additional evidence, as occurred here, our review... is limited to determining whether the board abused its discretion or committed a legal error.” Smalley v. Zoning Hearing Bd. of Middletown Tp., 834 A.2d 535, 538 (Pa. 2003). “An abuse of discretion will be found only where the zoning board’s findings are not supported by substantial evidence. By substantial evidence we mean such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Id. (quoting Valley View Civic Ass’n. v. Zoning Bd. of Adjustment, 462 A.2d 637 (Pa. 1983)). “It is well settled that a zoning hearing board’s interpretation of its own zoning ordinance is entitled to great weight and deference from a reviewing court.” Lancaster Twp. v. Zoning Hearing Bd. of Lancaster Twp., 6 A.3d 1032, 1034 (citations omitted). This judicial deference results from the knowledge and expertise a zoning board has in interpreting the ordinance they administer. Id.

Singh requested two variances. The first was to install a wall sign 47 feet high when the ordinance allowed a wall sign to be no higher than 30 feet. The second was to enlarge the letters of the wall sign. Singh requested sign letters approximately 84 inches tall when the ordinance allowed letters to be approximately 72 inches tall.

The Stroud Township Zoning Ordinance (ordinance) governs the requested variances and provides as follows:

The height of a Wall Sign shall not exceed the height of the building facade to which it is attached; however in no case shall a wall sign exceed thirty (30 ft.) in height. Wall Signs shall be compatible with the architectural motif of the building to which they are attached. No wall sign shall cover or interrupt major architectural features.

Ordinance §9.1271.

Ordinance § 9.1278 provides a formula to determine the maximum letter height of a wall sign. This is computed based on the distance between the wall facade and the nearest public road or main entrance driveway. The ordinance would allow a maximum letter height of 72 inches on a sign with three rows of letters.

The requirements for a variance are set out in 53 P.S. § 10910.2. It states, in pertinent part, that a variance will only be granted in circumstances:

(1) That there are unique physical circumstances or conditions, including irregularity, narrowness, or shallowness of lot size or shape, or exceptional topographical or other physical conditions peculiar to the particular property and that the unnecessary hardship is due to such conditions and not the circumstances or conditions generally created by the provisions of the zoning ordinance in the neighborhood or district in which the property is located.
(2) That because of such physical circumstances or conditions, there is no possibility that the property can be developed in strict conformity with the provisions of the zoning ordinance and that the authorization of a variance is therefore necessary to enable the reasonable use of the property.
(3) That such unnecessary hardship has not been created by the appellant.
(4) That the variance, if authorized, will not alter the essential character of the neighborhood or district in which the property is located, nor substantially or permanently impair the appropriate use or development of adjacent property, nor be detrimental to the public welfare.
(5) That the variance, if authorized, will represent the minimum variance that will afford relief and will represent the least modification possible of the regulation in issue.

53 P.S. §10910.2.

The ZHB denied the variance requests. The ZHB’s logic was as follows, in pertinent part: “(a)side from the applicant’s strong preference to satisfy the Marriot Corporation’s custom standards for sign height and architectural appearance, the only other basis for a wall sign height variance is the applicant’s preference for greater visibility for the motoring public on PA Route 611.” Decision of the zoning hearing board at 10. After discussing testimony to the effect that Singh owns and operates another hotel with similar signage problems, which suggested to the ZHB that the property in this matter could be developed in strict conformity with the ordinance, they stated; “...the Board feels that the proposed height variance is merely for the business and commercial preference of the Applicant and the Applicant’s Architect and is not essential to enable the reasonable use of the property.” Id. at 12.

Singh argues that the sign for the proposed hotel cannot be read from the nearby highway (Route 611) without variances for height and letter size. This, Singh contends, is an undue hardship. Singh argues that this hardship is due to “topographic and manmade obstructions not caused by [himself].” Brief of appellant at 12. It is undisputed that the property he proposes to build on is blocked from highway visibility by preexisting commercial buildings. Singh relies on Hertzberg v. Zoning Bd. of Adjustment of City of Pittsburgh, 721 A.2d 43 (Pa. 1998). In Herzberg, Miryam’s, a non-profit organization which provided shelter and services to homeless women, sought zoning approval to convert an unused 4 story building into a lodging house. Because the building Miryam’s sought to use lacked the required amount of square footage and parking spaces for a lodging house of its proposed size, zoning approval was required. The zoning hearing board granted the variances, and the trial court affirmed.

The Commonwealth Court reversed, stating: “Absent a showing that the property cannot be used in a way and for a purpose consistent with the zoning ordinance, there is not the unnecessary hardship required for the grant of a variance.” Id. at 47 (quoting Slip Opinion of Commonwealth Court). The Supreme Court reversed, stating: “We find that the instant matter is an appropriate case to make a formal declaration that the quantum of proof required to establish unnecessary hardship is indeed lesser when a dimensional variance, as opposed to a use variance, is sought.” Id. at 47-48.

This relaxation of the proof required to show hardship in dimensional variance cases has been the subject of much discussion since Hertzberg:

while Hertzberg eased the requirements for granting a variance for dimensional requirements, it did not make dimensional requirements, as Keystone’s position suggests, “free-fire zones” for which variances could be granted when the party seeking the variance merely articulated a reason that it would be financially “hurt” if it could not do what it wanted to do with the property, even if the property was already being occupied by another use. If that were the case, dimensional requirements would be meaningless — at best, rules of thumb — and the planning efforts that local governments go through in setting them to have light, area (side yards) and density (area) buffers would be a waste of time.

Society Created to Reduce Urban Blight v. Zoning Bd. of Adjustment of the City of Philadelphia, 771 A.2d 874, 877 (Pa. Cmwlth. 2001). An examination of cases decided after Hertzberg supports the ZHB’s decision not to grant the variances.

In Yeager v. Zoning Hearing Bd. of the City of Allentown, 779 A.2d 595 (Pa. Cmwlth. 2001), the Commonwealth Court was faced with similar circumstances. The property owner wished to build a car dealership on the disputed property, specifically a Land Rover dealership.

[Daniels] acknowledged the building, which is proposed to be set back 120 feet from Tilghman Street, could have been moved closer to Tilghman Street, where a set back of 30 feet is required, but elected not to do so because locating it closer to Tilghman Street would have encroached upon desired parking and display space at the front of the property. Alternatively, [Daniels] also acknowledged a 5,000 square foot building would fit on the property without the necessity of a variance, and did not try to design a building smaller than 10,000 square feet because Land Rover would not have approved it. Thus, the topographical condition of the property interfered with the ability to comply with the zoning regulations only to the extent the building had to be 10,000 square feet and [Daniels] insisted it be located at a particular place on the property.... [T]he hardship here was not created by the land, but by [Daniels’] insistence the building be 10,000 square feet and it not encroach upon desired parking or display space at its front.

Id. at 597 (quoting Slip Opinion of Common Pleas Court). The Commonwealth Court affirmed the denial of the variance:

Ever since our Supreme Court decided Hertzberg, we have seen a pattern of cases arguing that a variance must be granted from a dimensional requirement that prevents or financially burdens a property owner’s ability to employ his property exactly as he wishes, so long as the use itself is permitted. Hertzberg stands for nothing of the kind. Hertzberg articulated the principle that unreasonable economic burden may be considered in determining the presence of unnecessary hardship, it may also have somewhat relaxed the degree of hardship that will justify a dimensional variance. However, it did not alter the principle that a substantial burden must attend all dimensionally compliant uses of the property, not just the particular use the owner chooses. This well-established principle, unchanged by Hertzberg, bears emphasizing in the present case. A variance, whether labeled dimensional or use, is appropriate “only where the property, not the person, is subject to hardship.” In the present case, Daniels’ property is well suited to the purpose for which it is zoned and actually used, a car dealership, which is in no way burdened by the dimensional requirements of the ordinance. Daniels has proven nothing more than that adherence to the ordinance imposes a burden on his personal desire to sell vehicles for Land Rover.

Id. at 598 (quoting Szmigiel v. Kranker, 298 A.2d 629, 631 (Pa. Cmwlth. 1972)) (italicized emphasis in original, bolded emphasis added). Here, the property is likewise well suited to the proposed use, a hotel. However, the burden, if it can be said to exist, is only there because signs on the facade of the building can’t be seen from Route 611 and the marketing directives of Marriott, which requires a strict degree of conformity in all their franchised hotels.

The case of Society Created to Reduce Urban Blight v. Zoning Bd. of Adjustment of the City of Philadelphia, 771 A.2d 874, 874 (Pa. Cmwlth. 2001) is directly on point. In Society to Reduce Urban Blight, Keystone Outdoor Advertising Company applied for a variance to allow a free standing sign. The proposed sign was 2400 square feet (the ordinance governing the sign allowed a maximum of 1500 square feet) and was located 660 feet away from the Walt Whitman Bridge. As here, the purpose of the variance request was to enable motorists to see the sign from a main highway. The zoning hearing board granted the variance requests, but the trial court reversed.

The Commonwealth Court affirmed the trial court’s reversal, stating:

In this case, no severe undue hardship was articulated because even using the Hertzberg standard, no evidence exists that warrants the grant ofthe dimensional variance. The variance to increase the size of Keystone’s sign board from 1,500 square feet to 2,400 square feet is not justified just so it can be seen from a road; requiring a larger sign just means that the lot on which the sign is located is too far from the road.

Id. at 878. Indeed, the Commonwealth Court reiterated that maximizing the wealth or revenue generated by a property is not a sufficient reason to grant a variance. “Hertzberg still requires an applicant to prove an unnecessary hardship and all that Keystone has done is show that the sign is necessary to maximize the profit of the landowner, [therefore] the trial court’s decision reversing the Board’s grant of a variance is affinned.” Id.

Here, it is undoubtedly true that having a hotel sign that can be seen from Route 611 would increase revenue and profitability for Singh’s proposed hotel. However, Singh has not carried his burden of proof for a variance, because there are no unique physical circumstances of the property creating undue hardship. If Singh’s argument were successful, where would the right to have a larger sign visible from a distant road end? Stroud Township may have decided that it was not appropriate from a planning perspective to have increasingly higher signs on buildings or poles as properties are located farther from a main highway.

Singh next argues that because the ZHB granted similar variances to other nearby properties, it is compelled to do so in this case. This analysis is not supported by the law. “[T]he fact that earlier variances were granted in the [applicable zoning] district does not necessarily dictate the approval of another application, for variances are granted on a case-by-case basis...” Pietropaolo v. Zoning Hearing Bd. of Lower Merion Tp., 979 A.2d 969, 982 (Pa. Cmwlth. 2009) (quoting Appeal of deBotton, 474 A.2d 706, 711 (Pa. Cmwlth. 1984)). The ZHB determined this land use appeal on its own merits. It was not bound by earlier decisions, even if they appear to be similar. For the foregoing reasons, the ZHB will be affirmed.

Finally, Singh requests the court to reverse the ZHB denial of variances requested for wall signs on the east and west facades of the hotel. These variances were denied by motion of the ZHB following the board’s October 9, 2013 hearing. NT 139, October 9, 2013. At the commencement of the hearing conducted on November 6, 2013, where the board reconsidered its decision and took additional testimony, Singh withdrew its request for sign variances for signs on the east and west facades of the proposed hotel building, through its counsel’s statement on the record. NT 6, November 6,2013.

The ZHB again denied variances for signs on all facades of the hotel when its vote was taken following the November hearing. NT 68-69, November 6, 2013. This decision was included in the written decision of the ZHB. This was error, as the request for those variances had been withdrawn. The only request for a variance of a wall sign before the ZHB at the time of its decision on November 6, 2013 was the requested variance for the sign above the main entrance on the southern facade of the building.

ORDER

And now, this 26th day of March, 2014, upon consideration of the land use appeal of Singh Realty, LLC, and the arguments and briefs of the parties, it is ordered as follows:

1. The decision of the Stroud Township Zoning Hearing Board to deny a sign variance for the eastern and western facades of the proposed hotel is reversed. Those variance requests were withdrawn by the applicant during the November 6,2013 hearing and were not before the zoning hearing board for decision.

2. In all other respects, the appeal of Singh Realty, LLC is denied and the decision of the Stroud Township Zoning Hearing Board is affirmed.

      . The testimony before the ZHB established that Marriott requires all their hotels to be built and appear substantially the same. See NT November 6,2013 at 27-30. For example, “the front building sign cannot be located in any location other than the parapet above the fourth floor at the main entrance since to do so would result in spillover illumination into a guest window and so on.” Id. at 29-30.