author: O’BRIEN, S.J.,

text:
    Kendall v. Metz

      July 18, 2001
    C.P. of Butler County,
    no. AD 00-11156.

      John R. Orie Jr., for plaintiffs.

      Mark B. Morrow, for defendant Metz.

      Gwilym A. Price III, for defendant McCaw.
   O’BRIEN, S.J.,

This matter is before the court on plaintiffs’ motion for a preliminary injunction.

BACKGROUND

This lawsuit stems from an alleged violation by Larry Metz of the “covenant not to perform services” contained in the partnership agreement entered into between Larry Metz and George Kendall on January 1, 1988. Specifically, George Kendall alleges that on October 18, 2000, Larry Metz withdrew from the accounting partnership known as Kendall Metz & Company and began to service former clients of Kendall Metz & Company under a new partnership known as Metz & McCaw, thereby violating the covenant not to perform services.

Based on this alleged violation, plaintiffs have petitioned this court to issue a preliminary injunction to enjoin defendants from soliciting plaintiffs’ clients or performing professional services for plaintiffs’ clients and to require the immediate return of all client files and any other material taken from plaintiffs. Defendants take the position that an injunction is inappropriate, as plaintiffs cannot support any of the requisite elements for an injunction.

LEGAL ANALYSIS

A court may grant a preliminary injunction only where the moving party establishes the following elements: (1) the relief is necessary to prevent immediate and irreparable harm which cannot be compensated by damages; (2) greater injury will occur from refusing the injunction than from granting it; (3) the injunction will restore the parties to the status quo as it existed immediately before the alleged wrongful conduct; (4) the alleged wrong is manifest, and the injunction is reasonably suited to abate it; and (5) the plaintiff’s right to relief is clear. T.W. Phillips Gas & Oil Co. v. Peoples Natural Gas Co., 89 Pa. Commw. 377, 492 A.2d 776 (1985).

In their brief, plaintiffs cite Bryant Co. Inc. v. Sling Testing and Repair, 471 Pa. 1, 369 A.2d 1164 (1977). The Bryant case, similar to the case now before this court, dealt with the issue of granting a preliminary injunction to enjoin a former employee who had allegedly violated a non-compete agreement. In Bryant, the Pennsylvania Supreme Court upheld the issuance of the injunction by the lower court. The Supreme Court found that the interest sought to be protected by the issuance of the preliminary injunction was the relationship which had been established on behalf of appellees’ companies through efforts of the former employee. Id. The court further found that that interest was clearly an interest which was incapable of adequate protection by monetary damages and that the use of equitable relief was needed to avoid the threatened harm. Id.

Bryant however is distinguishable from the instant case in that the covenant at issue in Bryant specifically set forth the accounts which the former employee was prohibited from selling to directly. Id. Based on the language of that covenant, the Bryant court found that the covenant sought to prevent more than just the sale that might result from the prohibited contact but also found that the covenant was designed to prevent a disturbance in the relationship that had been established between appellees and their accounts through prior dealings. Id.

The Bryant court further found that “[i]t is the possible consequence of this unwarranted interference with customer relationships that is unascertainable and not capable of being fully compensated by money damages.” Id., 471 Pa. at 8. The Supreme Court then reiterated its ruling from Bettinger v. Carl Berke Associates Inc. 455 Pa. 100, 314 A.2d 296 (1974), that a covenant “of this type ” that meets the test of reasonableness is prima facie enforceable in equity. Id. The restrictive covenant in Bettinger, was also one that by its unambiguous terms specifically prohibited conduct and then provided for a remedy if there was a future violation. Id.

Based on the holding in Bryant, this court finds that it is only those types of covenants which prohibit competitive conduct (and pass the reasonableness test) that are enforceable in equity. A covenant that does not prohibit competitive conduct but rather provides a remedy in the event that competitive conduct transpires is not enforceable in equity through injunctive relief because there is an adequate remedy at law.

The covenant contained in the Kendall/Metz partnership agreement states as follows: “Any partner who withdraws ... and who, during the period of 24 months thereafter, solicits or furnishes accounting or related services to ‘partnership clients’ shall compensate the partnership as hereinafter provided in this paragraph 9.01. ” The rest of paragraph 9.01 provides for the various monetary reimbursement which must be paid in the event that the covenant is violated.

It is clear that the covenant here does not prohibit competitive conduct. The covenant merely states that if they do compete then they must reimburse the partnership. Further, the covenant clearly provides the formula for the calculation of damages in the event that the covenant is violated.

The court cannot find that this covenant is “of the type ” as described in the aforementioned cases. It is not the type of covenant which was included in the partnership agreement in contemplation of a possible need in the future to protect the partnership/client relationship.

Therefore, the court finds that plaintiffs are unable to satisfy the first element required for the issuance of a preliminary injunction insomuch as any claims for damages by the plaintiffs, if proven, would be compensable pursuant to the terms of the partnership agreement.

In addition to plaintiffs’ request to enjoin competitive conduct, the plaintiffs request the return of certain files. This request constitutes a request for mandatory injunctive relief in that it requires the defendants to collect files and relinquish possession of them to the plaintiffs.

A mandatory preliminary injunction is an injunction which orders the defendant to perform some positive act; such an injunction goes beyond mere restraint and commands acts to be done or undone. Josten Aluminum Prod ucts Co. Inc. v. Mount Carmel District Industrial Fund, 256 Pa. Super. 353, 389 A.2d 1160 (1978).

Mandatory preliminary injunctions should only be issued in exceptional circumstances and where the rights of the parties are entirely clear. Board of Directors of the School District of the City of Scranton v. Roberts, 13 Pa. Commw. 464,320 A.2d 141 (1974). Mandatory preliminary injunctions should be granted even more sparingly than those which are merely prohibitory. Id. Further, a mandatory preliminary injunction which commands the performance of some positive act requires a much stronger case. Id.

Here, the rights of the parties are not entirely clear. If the court were to decide that the possession of the files should be transferred, the court would in effect be ruling that the files belong to plaintiff, thereby resolving the underlying controversy in the case. Such a ruling would defeat the purpose behind the granting of a preliminary injunction in that it would amount to affirmative relief, designed to permanently remedy the situation, instead of an interim measure ordered to protect the parties until a final hearing.

The sole objective of the preliminary injunction is to preserve the subject of the controversy in the condition in which it is when the order is made. It cannot be used to take property out of the possession of one party and put it into the possession of the other. See generally, Mahoney Township Authority v. Draper, 356 Pa 573, 52 A.2d 653 (1947); Stout v. Williams, 203 Pa. 161, 52 A. 169 (1902).

Based on the foregoing, plaintiffs’ request to have certain files returned is denied.

ORDER

And now, July 18, 2001, upon consideration of plaintiffs’ motion for a preliminary injunction, it is hereby ordered that plaintiffs’ motion is denied.


source: Caselaw Access Project

author: MOTT, J.,

license: Public Domain

text:
    Nationwide Mutual Insurance Co. v. Russick
    C.P of Bradford County,
    no. 99CV000072.

      November 30, 2000

      Raymond E. Ginn Jr., for plaintiff.

      John T. McLane, for defendant.
   MOTT, J.,

Nationwide Mutual Insurance Company, the plaintiff, commenced this action by filing a complaint seeking declaratory judgment on March 1, 1999. This matter arises out of a motor vehicle accident which occurred on October 8, 1997, in which Nellie Russick, the defendant, while attempting to walk across a public highway, was struck by a vehicle operated by Mahala Reed. At the time of the accident, Mahala Reed was insured under a motor vehicle insurance policy issued by the plaintiff. The policy included liability limits of $50,000 per person, and the plaintiff paid that amount to the defendant.

Thereafter, the defendant made a claim for underinsured motorist benefits under a motor vehicle insurance policy issued by the plaintiff to Raymond Adams. At the time of the accident, the defendant was residing with Raymond Adams at his residence in Sugar Run, Pennsylvania. Under the policy issued to Raymond Adams the defendant would be entitled to claim underinsured motorist benefits if she was a “resident relative” of Raymond Adams. The defendant asserts that at the time of the accident she was the common-law wife of Raymond Adams, and, thus, that she falls within the definition of those provided coverage under the policy.

By way of background, we note that on October 29, 1996, Raymond Adams applied for a motor vehicle insurance policy at the office of the plaintiff’s agent, Rod-man Azar Insurance, in Tunkhannock, Pennsylvania. Various forms and disclosure statements were furnished to Raymond Adams in connection with that application. The plaintiff issued the policy to him on November 1, 1996 for a six-month period, and, thereafter, a series of policy renewals were issued at six-month intervals. The policy declarations reflect that Raymond Adams purchased bodily injury liability limits in the amount of $100,000 per person and $300,000 per occurrence. The declarations further reflect that he purchased uninsured motorist and underinsured motorist coverage in the lower amounts of $15,000 per person and $30,000 per occurrence. The defendant alleges that the plaintiff failed to provide all disclosures required by law to enable Raymond Adams to knowingly and voluntarily purchase uninsured and underinsured benefits that were lower than the liability limits of the policy. Therefore, the defendant contends that the motor vehicle insurance policy should be reformed to provide underinsured benefits equal to the bodily injury liability coverage of the policy. Specifically, the defendant alleges that because the plaintiff failed to provide to Raymond Adams, or to obtain his signature upon, forms mandated by 75 Pa.C.S. §1731, his election of underinsured limits lower than the liability limits is ineffective, in that his election was not made in a knowing manner.

In opposition to the foregoing, the plaintiff alleges that Raymond Adams was furnished all disclosures, forms, documentation and information required by statute, and that his election of lower underinsured motorist benefit limits was knowing, effective and valid. More specifically, the plaintiff asserts that section 1731 does not mandate any rejection forms where a named insured does not reject uninsured or underinsured motorist coverage, but only selects lower limits of such coverage. Therefore, the plaintiff alleges that $15,000 is the proper under-insured motorist coverage limit in this case.

On August 24, 2000, the plaintiff filed a motion for judgment on the pleadings, concerning the issue of whether Raymond Adams made a valid election of underinsured motorist coverage limits lower than the liability limits of the policy. For purposes of this motion only, the plaintiff concedes that a common-law marriage existed between the defendant and Raymond Adams, that she falls within the definition of those provided coverage under Raymond Adams’ policy, and that she is entitled to recover underinsured benefits under that policy. The motion is now before the court for disposition.

Pursuant to Pa.R.C.P. 1034, a motion for judgment on the pleadings may be brought by any party after the relevant pleadings are closed, but within such time as not to unreasonably delay the trial. The court must enter such judgment or order as is proper on the pleadings. The trial court must treat a motion on the pleadings as if it were a preliminary objection in the nature of a demurrer and in conducting such inquiry the court should confine its consideration to the pleadings. Del Quadro v. City of Philadelphia, 293 Pa. Super. 173, 176-77, 437 A.2d 1262, 1263 (1981). In determining whether to grant a demurrer, we 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 demurrer. ... In order to sustain a demurrer, it is essential that the facts of the complaint indicate that its claim may not be sustained and that the law will not permit a recovery.... If there is any doubt, it should be resolved by overruling the demurrer.” Mellon Bank NA. v. Fabinyi, 437 Pa. Super. 559, 567-68, 650 A.2d 895, 899 (1994). (citations omitted)

“Judgment on the pleadings may be granted only in cases where no facts are at issue and the law is so clear that a trial would be [fruitless]. In addition, the court must view all well [pleaded] facts of the non-moving party as true and grant leave to amend if upon reviewing the pleading the existence of a material fact appears ambiguous.” Smith v. Thomas Jefferson University Hospital, 424 Pa. Super. 41, 44, 621 A.2d 1030, 1031 (1993). (citations omitted)

Thus, our task here is to resolve whether Raymond Adams’ election of lower underinsured motorist benefits was valid and enforceable given the uncontested facts relating to that issue. Again, the defendant contends that the plaintiff’s failure to provide the section 1731 rejection notice to Raymond Adams renders null and void his election of underinsured limits lower than the liability limits of the policy. Without that notice, the defendant asserts, Mr. Adams’ election could not be a knowing one. Therefore, the defendant asserts that she is entitled to receive underinsured benefits with the same limits as the bodily injury liability coverage provided by the policy. Conversely, the plaintiff argues that the section 1731 rejection form is required only where underinsured coverage is rejected altogether, and that it is not required where, as here, a named insured simply elects lower underinsured limits. Therefore, the plaintiff asserts that Raymond Adams’ election of the lower underinsured motorist benefits was valid pursuant to 75 Pa.C.S. §1734.

The controlling case under these circumstances is Lewis v. Erie Insurance Exchange, 753 A.2d 839 (Pa. Super. 2000). There, the Superior Court held that there is no express legislative intent to incorporate the section 1731 requirements into section 1734, and that, therefore, execution of a section 1731 rejection form was not required under circumstances similar to those present here. Id. at 850. Moreover, the statutory requirements of section 1734 were met here because on October 29, 1996, Raymond Adams signed a 75 Pa.C.S. §1791 “Important notice,” and signed a writing requesting lower under-insured coverage. “The plain meaning [of section 1734] contains no standards concerning the language or form that a named insured uses to ‘request in writing’ the issuance of reduced [underinsured] coverages.” Id. Furthermore, the remedy sought by the defendant, i.e., underinsured coverage with the same limits as the bodily injury liability coverage, is not provided for under section 1734. Id. at 850-51. Therefore, since it is clear that the plaintiff satisfied the section 1791 and section 1734 mandates, and since it is clear that the law does not permit the remedy sought by the defendant, the motion for judgment on the pleadings will be granted.

Accordingly, we enter the following:

ORDER

And now, November 30, 2000, in accord with the memorandum opinion filed this date, the plaintiff’s motion for judgment on the pleadings is granted. As a result, Raymond Adams’ election of underinsured motorist coverage lower than the insurance policy’s liability coverage is deemed valid, and shall be given full force and effect.

      . The parties agree that Raymond Adams was not provided, nor did he sign, forms for the rejection of uninsured and underinsured motorist coverage. These forms are set forth in 75 Pa.C.S. §1731.

      . 75 Pa.C.S. §1734 provides:
      “A named insured may request in writing the issuance of coverage under section 1731 (relating to availability, scope and amount of coverage) in amounts equal to or less than the limits of liability for bodily injury.”

      . The defendant incorrectly relies upon National Union Fire Insurance Company v. Irex Corporation, 713 A.2d 1145 (Pa. Super. 1998) (the court addressed the rejection of uninsured claims under section 1731, as well as the argument that a rejection under section 1731 was a reduction to zero under section 1734, where an insured’s employee rejected uninsured benefits on waiver forms that neither contained the requisite section 1731 language nor were on separate sheets of paper). The Irex court suggested:
      “An insured cannot make a valid election to reduce [underinsured] statutory coverage limits under section 1734 unless and until the insured/applicant comports with the requirements set forth in section 1731.” Id. at 1153.
      From our viewpoint, and from the viewpoint of a subsequent Superior Court panel in the Irex court’s discussion, as to section 1731, is dicta. Lewis v. Erie Insurance Exchange, supra at 849. National Union Fire Insurance Company v. Irex Corporation, supra at 1153. That discussion was unnecessary to the disposition of the issues before the Irex court. Therefore, that discussion is not binding precedent.

      . “Section 1791 . . . provides general notice of available benefits and limits contained with insurance policies, including medical benefits, extraordinary medical benefits, income loss benefits, accidental death benefits, death benefits, [uninsured], [underinsured], and bodily injury liability coverage.... Section 1791, however, does not provide an applicant with the ability to select, reject or reduce the benefits and types of coverages enumerated within its own section. It is presumed that an insured has been advised of the benefits and limits contained within section 1791 if a required notice, in bold print and at least 10-point type, is given to an applicant at the time he or she first applies for insurance coverage, and, pending that no other notice or rejection shall be required.” National Union Fire Insurance v. Irex Corporation, supra at 1148.


author: HERRON, J.,

text:
    Mellon Bank N.A. v. Maris Equipment Co.

      July 26, 2000

      Daniel S. Bernheim, for plaintiff.

      Kevin J. Carey, for defendant.
   HERRON, J.,

This case involves a dispute between a bank and an account holder over an alleged overdraft of funds and the failure to repay these funds. Presently before this court are the preliminary objections of defendant Maris Equipment Company Inc. to the complaint of plaintiff, Mellon Bank N.A. For the reasons which follow, defendant’s preliminary objections are overruled.

FACTUAL AND PROCEDURAL BACKGROUND

The pertinent facts of this case, as pleaded in Mellon’s complaint, are as follows. Maris has maintained a bank account at Mellon, bearing the account number 2-707-883. Complaint at ¶3. On November 20, 1997, the sum of $51,501 was deposited into the account, but the account was only credited with $5,101 due to a processing error. Id. at ¶4. Then, on November 21, 1997, Mellon corrected this error and adjusted the account by issuing a credit in the amount of $46,400. Id. at ¶5. Further, on November 25, 1997, Mellon inadvertently credited the account for a second time in the amount of $46,400. Id. at ¶6. These funds were withdrawn before Mellon could correct its mistake, which created an overdraft to the account in the amount of $46,400. Id. Maris allegedly has refused to repay to Mellon the funds that were erroneously credited to the account, despite its alleged promises to do so. Id. at ¶7.

On March 20, 2000, Mellon filed a complaint, asserting claims against Maris for breach of contract, unjust enrichment and fraud, seeking damages in the amount of $55,680, plus interest and costs of the suit. See id., Counts I-III. On May 16, 2000, Maris filed preliminary objections in the nature of a demurrer to Counts I through DI. Specifically, Maris asserts the following: (1) the complaint should be stricken for failure to attach a proper verification, pursuant to Pa.R.C.P. 1024(c); (2) Counts I and II should be dismissed for failure to attach the contract of deposit, as required by Pa.R.C.P. 1019(h); (3) Count HI should be dismissed for failure to plead fraud with specificity, as required by Pa.R.C.P. 1019(b); (4) Counts II and III should be dismissed under the “gist of the action” doctrine; and (5) Count I should be dismissed for failure to state a claim for breach of contract. See preliminary objections, ¶¶1-23. On June 28, Mellon filed its answer to the preliminary objections, along with its memorandum of law.

DISCUSSION

In ruling on preliminary objections, in the nature of a demurrer, the court accepts as true, all well-pleaded, material and relevant facts, as well as every inference reasonably deducible from those facts. Willet v. Pennsylvania Medical Catastrophe Loss Fund, 549 Pa. 613, 619, 702 A.2d 850, 853 (1997). Preliminary objections, which result in a denial of the pleader’s claim or the dismissal of his suit, should only be sustained in cases that clearly and without a doubt fail to state a claim for which relief may be granted under any theory of law. Id. In addition where doubt exists as to whether a demurrer should be sustained, the doubt should be resolved in favor of overruling it. Id. at 619-20,702 A.2d at 853. See also, Chem v. Horn, 725 A.2d 226, 228 (Pa. Commw. 1999) (stating that “[t]he question presented by a demurrer is whether, in the facts averred, the law says with certainty that no recovery is possible.”).

I. Maris’ Objections As to Improper Verification and Failure To Attach the Contract of Deposit

Maris first objects to the verification of the complaint by Mellon’s counsel because it does not allege either that the plaintiff lacked sufficient knowledge to verify the claims or that the plaintiff was outside of the jurisdiction and a verification could not otherwise be obtained, as required by Rule 1024(c), Pa.R.C.P. Maris’s second objection asserts that Counts I and II should be stricken where Mellon failed to attach the contract of deposit, which forms the basis for Counts I and II and must be attached pursuant to Rule 1019(h), Pa.R.C.P. In its answer, Mellon argues that these objections are now moot since the verification of Ronald P. Forcina, assistant vice president of Mellon, was substituted for that of counsel on June 2,2000. See exhibit 1. On that same date, Mellon also attached its Business Banking Rules and Regulations, along with copies of a blocked account agreement, which together constitute the contract of deposit according to Mellon. See id.

In deciding this issue, Rule 126 of the Pennsylvania Rules of Civil Procedure is particularly applicable where it states:

“The rules shall be liberally construed to secure the just, speedy and inexpensive determination of every action or proceeding to which they are applicable. The court at every stage of any such action or proceeding may disregard any error or defect of procedure which does not affect the substantial rights of the parties.” Pa.R.C.P. 126.

In addition, the Pennsylvania Superior Court has stated that: “[t]he Rules of Civil Procedure are designed to achieve the ends of justice and are not to be accorded the status of substantive objectives requiring rigid adherence ____‘Courts should not be astute in enforcing technicalities to defeat apparently meritorious claims.’ ” Lewis v. Erie Insurance Exchange, 281 Pa. Super. 193, 199, 421 A.2d 1214, 1217 (1980). (citations omitted) In Lewis, the court held that it was an abuse of discretion to dismiss the petition based on a defective verification without affording the petitioner an opportunity to file an amended verification. Id. at 198-99, 421 A.2d at 1217. See also, Mickens-Thomas v. Commonwealth, Board of Probation and Parole, 699 A.2d 792, 795 n.2 (Pa. Commw. 1997) (court overruled preliminary objections to defective verification and service where plaintiff subsequently corrected the alleged defects); Grode v. Mutual Fire, Marine, and Inland Insurance Co., 154 Pa. Commw. 366, 368, 623 A.2d 933, 934 (1993) (overruled preliminary objection where plaintiff assured the court that it would provide the necessary documents to the defendant).

This court overrules the objections to defective verification and failure to attach a writing as moot. Mellon has corrected these alleged defects in a sufficiently timely manner; such that Maris has not been prejudiced.

II. Maris’ Objection to Count III for Failure To Plead a Cause of Action for Fraud

Maris’ third objection asserts that Mellon failed to state a cause of action for fraud where Count III does not “identify any action or statement made by Maris that was allegedly a misrepresentation of fact” and “fails to identify what. . . alleged misrepresentation of material fact was made with knowledge of its falsity or reckless disregard for its truth or falsity.” Preliminary objections at fj[13(a) and (b). Maris also contends that Mellon’s claim for fraud is a “mere recital of the elements of fraudulent misrepresentation without any pleading of material facts sufficient to state a claim for fraud pursuant to Rule 1019(b).” Id. at ¶13(0). In response, Mellon asserts that it sufficiently stated a claim for fraud where its “complaint clearly alleges that Maris knew of the erroneous credit and instructed Mellon to make payment from the account in order to take advantage of the mistake before the bank learned of the error.” PL memorandum of law at 5-6.

Generally, “[fjraud is a claim easily made but difficult to support. Once an allegation of fraud is injected into a case, even though it may ultimately be shown to be without any arguable merit, the whole tone and tenor of the matter changes.” New York State Electric & Gas Corp. v. Westinghouse Electric Corp., 387 Pa. Super. 537, 553, 564 A.2d 919, 927 (1989). It “consists of anything calculated to deceive, whether by single act or combination, or by suppression of truth, or suggestion of what is false whether it be by direct falsehood or innuendo, by speech or silence, word of mouth or look or gesture.” Delahanty v. First Pennsylvania Bank N.A., 318 Pa. Super. 90, 107, 464 A.2d 1243, 1251 (1983) (citing Frowen v. Blank, 493 Pa. 137, 143, 425 A.2d 412, 415 (1981)).

To establish a claim for fraudulent misrepresentation, the plaintiff must allege the following elements: “(1) [a] representation; (2) which is material to the transaction at hand; (3) made falsely, with knowledge of its falsity or recklessness as to whether it is true or false; (4) with the intent of misleading another into relying on it; (5) justifiable reliance on the misrepresentation; and (6) the resulting injury was proximately caused by the reliance.” Bortz v. Noon, 556 Pa. 489, 499, 729 A.2d 555, 560 (1999). (citations omitted) Further, “if the misrepresentation is made knowingly or involves a non-privileged failure to disclose, materiality is not a requisite to the action.” Delahanty, 318 Pa. Super. at 108, 464 A.2d at 1252. (citation omitted) (emphasis added)

Moreover, averments of fraud must be alleged with particularity. Rule 1019(b), Pa.R.C.P. The Pennsylvania Supreme Court has stated that “although it is impossible to establish precise standards as to the degree of particularity required under this rule, two conditions must be met to fulfill the requirement: (1) the pleadings must adequately explain the nature of the claim to the opposing party so as to permit the preparation of a defense, and (2) they must be sufficient to convince the court that the averments are not merely subterfuge.” Martin v. Lancaster Battery Co. Inc., 530 Pa. 11, 18, 606 A.2d 444, 448 (1992) (citing Bata v. Central-Penn National Bank, 423 Pa. 373, 380, 224 A.2d 174, 179 (1966)). In determining whether this requirement has been satisfied, the court must examine the complaint in its entirety. Commonwealth by Zimmerman v. Bell Telephone Co. of Pa., 121 Pa. Commw. 642, 649, 551 A.2d 602, 605 (1988).

Count III of the complaint, sets forth, in pertinent part, the following allegations:

“(15) Maris’ actions in knowingly withdrawing funds to which they had no right or entitlement constitute fraudulent misrepresentations. Said misrepresentations were made by Maris with actual knowledge of their falsity or with reckless disregard as to their truth or falsity, and were made with an intention that Mellon would thereby be induced to act. As a result of its justifiable reliance on Maris’ misrepresentations, Mellon has suffered damages in the amount of the aforementioned overdraft and attorney’s fees.” Complaint at ¶15.

Plaintiff also explicitly alleged that

“(6) On November 25, 1997, Mellon inadvertently credited the account, for a second time, in the amount of $46,400. Before Mellon could correct the error, the funds inadvertently credited to the account were withdrawn, thereby creating an overdraft to the account in the amount of $46,400.

“(7) Despite repeated promises, Maris has refused to repay to Mellon the funds that were erroneously credited to the account.” Id. at ¶¶6-7.

The gravamen of Mellon’s claim of fraud is that Maris misrepresented its entitlement to the funds when it withdrew them, and, in so doing, induced Mellon to act to its detriment by remitting these funds to Maris and resulting in an overdraft of the account. Contrary to Maris’ assertions, paragraph 15 of the complaint does identify a misrepresentation of material fact; i.e., the allegedly wrongful and knowing withdrawal of funds to which Maris had no entitlement. It is common sense that, in withdrawing money from its account Maris had to instruct Mellon in some affirmative manner. Further, by alleging that Maris “knowingly” withdrew funds to which “they had no . . . entitlement” Mellon was not required to explicitly allege the element of materiality. See Delahanty, 318 Pa. Super. at 108, 464 A.2d at 1252. This court may thus reasonably infer that the alleged action on Maris’ part constitutes a material misrepresentation despite that the complaint does not explicitly allege that Maris made a false statement. Further, the allegations do sufficiently set forth the remaining elements for fraudulent misrepresentation in order that Maris may prepare a defense to this claim. Accepting these allegations as true, it is possible that Mellon could present evidence to recover on a theory of fraudulent misrepresentation. It would be premature to dismiss the fraud claim at this stage of the proceedings since Mellon has sufficiently pled a cause of action for which relief can be granted.

Therefore, this court overrules the objection to Count III.

III. Maris’ Objection to Counts II and III Under the “Gist of the Action” Doctrine

Maris also objects to Counts II and III on the grounds that the claims for unjust enrichment and fraud are barred by the “gist of the action” doctrine, which disallows tort claims where the gravamen of the action “unquestionably” arises out of the contractual relationship. See preliminary objections at ¶¶16-19. In response, Mellon asserts that their “claims for fraud and breach of contract are wholly independent of each other such that each could stand alone without the other and still Mellon would nonetheless be entitled to relief.” PI. memorandum of law at 7.

Determining whether Mellon’s complaint sounds primarily in contract or in tort “is difficult due to the somewhat confused state of our law.” Redevelopment Authority of Cambria County v. International Insurance Co., 454 Pa. Super. 374, 391, 685 A.2d 581, 590 (1996) (citing Grode v. Mutual Fire, Marine, and Inland Insurance Co., 154 Pa. Commw. 366, 623 A.2d 933 (1993)). There are two lines of case law relating to the issue. The first line arose with Raab v. Keystone Insurance Co., 271 Pa. Super. 185, 412 A.2d 638 (1979), which examined a claim that an insurance company had negligently failed to pay benefits according to an insurance contract. In Raab, the court stated the following:

“Generally, when the breach of a contractual relationship is expressed in terms of tortious conduct, the cause of action is properly brought in assumpsit and not in trespass----However, there are circumstances out of which a breach of contract may give rise to an actionable tort.

... The test used to determine if there exists a cause of action in tort growing out of a breach of contract is whether there was an improper performance of a contractual obligation (misfeasance) rather than the mere failure to perform (nonfeasance).” Id. at 187-88,412 A.2d at 639. (citations omitted)

The Pennsylvania Superior Court has later rejected the “simple rule” expressed in Raab as inadequate to determine the true character of a claim, but instead, has followed the approach announced in Bash v. Bell Telephone Co., 411 Pa. Super. 347, 601 A.2d 825 (1992). See e.g., Redevelopment Authority, 454 Pa. Super. at 392, 685 A.2d at 590; Phico Insurance Co. v. Presbyterian Medical Services Corp., 444 Pa. Super. 221, 228, 663 A.2d 753, 757 (1995). The Phico court noted the following:

“In [Bash], . . . which arose in connection with the breach of an agreement relating to the publication of a telephone directory advertisement, we examined federal authority and indicated that to be construed as a tort action, the wrong ascribed to the defendant must be the gist of the action with the contract being collateral. In addition, we noted that a contract action may not be converted into a tort action simply by alleging that the conduct in question was done wantonly. Finally, we stated that the important difference between contract and tort actions is that the latter lie from the breach of duties imposed as a matter of social policy while the former lie for the breach of duties imposed by mutual consensus.” Id. at 228-29, 663 A.2d at 757. (emphasis added)

In support of its position, Maris also relies upon the federal case of Sunquest Info. Sys. Inc. v. Dean Witter Reynolds Inc. 40 F. Supp.2d 644 (W.D. Pa. 1999). In Sunquest, the court held that Pennsylvania’s “gist of the action” barred the fraud and misrepresentation claims against the former owner where they essentially duplicated an action for breach of contract, and alleged a failure to perform according to the terms of that contract. Id. at 651-53. The court also noted that “a plaintiff cannot assert a fraud or negligent misrepresentation claim when that theory is ‘merely another way of stating its breach of contract claim,’ or when its success ‘would be wholly dependent upon the terms of the contracts.’ ” Id. at 651. (citations omitted) While this case cites the general principles of the “gist of the action” doctrine, it is not dispositive of the present case, which alleges more than a mere failure to perform a contractual obligation.

Rather, the reasoning and procedural posture of Grode is more persuasive in deciding the present issue. In that case, the Commonwealth Court overruled preliminary objections to the tort claims brought by an insurance company against a contractor despite the parties’ contractual relationship. 154 Pa. Commw. at 373, 623 A.2d at 937. It recognized that the complaint clearly alleged negligent and fraudulent performance under the contractual relationship, rather than a failure to perform. Id. at 373, 623 A.2d at 936. Further, the court reasoned that “a tort claim in a contractual relationship for services should not be dismissed at an early stage of proceedings prior to the production of evidence” since “a substantial body of Pennsylvania case law holds a defendant liable in tort for misfeasance in the performance of a contract.” Id. at 372, 623 A.2d at 936 (quoting Public Service Enterprise Group Inc. v. Philadelphia Electric Co., 722 F. Supp. 184, 212 (D.N.J. 1989)). The Grode court also emphasized the relevance to the procedural posture of the case and the need to develop a factual record in order to better determine the relationship between the parties. Id.

Here, like in Grode, the claim for fraudulent misrepresentation clearly alleges misfeasance in connection with the contractual relationship, rather than merely a failure to perform. The gravamen of the fraud claim alleges that Maris wrongfully withdrew funds to which they knew that they were not entitled. See complaint at ¶15. On the other hand, the gravamen of the breach of contract claim is that Maris failed to cure the overdraft as required by the contract of deposit, and is now liable to Mellon for both the amount of the overdraft and for reasonable attorney’s fees. See id. at ¶¶9-10. It seems that the alleged “wrong” in this case relates primarily to the withdrawal of funds and is the focus of the fraud claim, while the breach of contract claim appears to be a continuation of that “wrong.” Therefore, the claim for fraudulent misrepresentation is not wholly dependent on the terms of the contract of deposit, nor is it merely a way of re-stating its breach of contract claim. Under either the Raab line of reasoning, or that of Bash and its progeny, Mellon’s claim for fraudulent misrepresentation cannot now be dismissed without a factual record relating to the parties’ relationship and the alleged misconduct.

Moreover, the “gist of the action” doctrine has no application to the unjust enrichment claim, nor does Maris cite any support for their contention as to this claim. Unjust enrichment is a quasi-contractual doctrine based in equity which requires the following elements: (1) benefits conferred on defendant by plaintiff; (2) appreciation of such benefits by defendant; and (3) acceptance and retention of such benefits under such circumstances that it would be inequitable for defendant to retain the benefit without payment of value. Wiernik v. PHH U.S. Mortgage Corp., 736 A.2d 616, 622 (Pa. Super. 1999).

The complaint alleges in pertinent part that “Maris has been unjustly enriched in that it has had use of the aforementioned sum of $46,400 to which it had no right or entitlement. These funds were utilized for the benefit of Maris and have not, despite demand, been returned to Mellon.” Complaint at ¶12. This allegation, when read in the context of the entire complaint, would be sufficient to state a claim for unjust enrichment. Moreover, in the event that it was later determined that Maris did not breach its contract with Mellon, this claim could provide an alternate route to recovery. Contrary to Maris’ position, the unjust enrichment claim is not barred as a matter of law.

Thus, Maris’ objection to Counts II and III is overruled.

IV. Maris’ Objection to Count I for Failure To State a Claim for Breach of Contract

Maris’ final objection is that Count I fails to state a claim for breach of contract where Mellon “has failed to sufficiently allege the existence of a contract or the essential terms of the contract [and] has also failed to allege a breach of a duty imposed by the contract.” Preliminary objections at ¶22. In response, Mellon asserts its allegations are sufficient and that its relationship with Maris, as debtor and creditor, together with its contract of deposit, set forth the parties’ contractual duties to one another. PI. memorandum of law at 9.

To establish a cause of action for breach of contract, the plaintiff must allege “(1) the existence of a contract, including its essential terms, (2) a breach of a duty imposed by the contract and (3) resultant damages.” CoreStates Bank N.A. v. Cutillo, 723 A.2d 1053, 1058 (Pa. Super. 1999). (citations omitted) Further, “[wjhile not every term of a contract must be stated in complete detail, every element must be specifically pleaded.” Id. at 1058.

Count I sets forth the following allegations in pertinent part:

“(9) Maris has breached its contract of deposit with Mellon by failing to cure the aforementioned overdraft in the amount of $46,400.

“(10) Pursuant to the contract of deposit, defendant is liable for Mellon’s reasonable attorney’s fees in the amount of 20 percent of the aforementioned overdraft, or $9,280.” Complaint at ¶¶9-10. Mellon also alleged that “Maris maintained a bank account at Mellon bearing account number 2-707-883.” Id. at ¶3.

Contrary to Maris’ assertions, these allegations do sufficiently state a cause of action for breach of contract. The averments explicitly allege that Maris maintains a bank account at Mellon and also allege the existence of a contract of deposit. It is well established that the legal relationship between a financial institution and its depositors is based on contract, and that the contract terms are contained in the signature cards and deposit agreements. First Federal Savings and Loan Association of Hazleton v. Office of the State Treasurer, 543 Pa. 80, 83, 669 A.2d 914, 915 (1995); McGuire v. Shubert, 722 A.2d 1087, 1091 (Pa. Super. 1998). In addition, Mellon did sufficiently plead a breach of a duty imposed by the contract where it alleged that Maris failed “to cure the aforementioned overdraft.” Complaint at ¶9. It is undisputed that Mellon pleaded damages resulting from the alleged breach.

Therefore, Maris’ objection to Count I is overruled.

CONCLUSION

For all of the above reasons, the preliminary objections of defendant Maris are overruled. Defendant shall file an answer to plaintiff’s complaint within 20 days of the date of entry of this memorandum opinion and accompanying order.

ORDER

And now, July 26, 2000, upon consideration of the preliminary objections of defendant Maris Equipment Company Inc., to the complaint of plaintiff Mellon Bank N.A., and plaintiff’s response thereto, and in accordance with the memorandum opinion being filed contemporaneously with this order, it is hereby ordered that the preliminary objections are overruled.

It is further ordered that defendant shall file an answer to plaintiff’s complaint within 20 days of the date of entry of this order.

      . This damages figure equals to the sum of the overdraft, $46,400, and $9,280, as reasonable attorney’s fees. In the Banking Rules and Regulations, the section, entitled “insufficient funds,” provides for “costs and expenses of the suit and reasonable legal fees” in the event that the bank sues to collect an overdraft. Exhibit 1. However, it does not explicitly provide for these fees in the amount of 20 percent of the overdraft.

        . In Bash, the Superior Court, affirming the preliminary objections, held that the alleged failure to include the customer’s advertisement in the telephone directory arose out of the contractual obligations, and was not actionable in negligence. Id. at 356-57,601 A.2d at 829-30.


author: SHEPPARD, J.,

text:
    Poeta v. Jaffe

      October 2, 2001

      Steven J. Fram, for plaintiffs

      David Smith, for defendants.
   SHEPPARD, J.,

Defendants, Richard P. Jaffe, Robert P. Krauss, Barry J. Frank and Harvey N. Shapiro have filed preliminary objections to the amended complaint of plaintiffs, John Poeta and Beth Stem-Fleming. For the reasons set forth, this court will enter a contemporaneous order overruling the objections.

BACKGROUND

This dispute arises from the breakup of the law firm of Mesirov Gelman Jaffe Cramer & Jamieson LLP. The plaintiffs’ basic allegations are set forth in greater detail in this court’s earlier opinion of May 30, 2001. The amended complaint adds the following assertions:

• At meetings of Mesirov’s partners on April 3 and 4, 2000, Jaffe advised the partners that Mesirov was conducting “merger” negotiations with several other law firms. The partners agreed that the firm could not continue operations in the event that a merger with one of these firms was not consummated and approved a plan to merge with another firm or to liquidate the firm, if a merger could not be effected quickly. According to the plaintiffs, this constituted an affirmative vote to dissolve Mesirov, and the partners took steps toward winding up the firm.

• On April 25, 2000, the plaintiffs and Jaffe, acting in his capacity as an authorized representative of the firm’s executive committee, agreed to a May 31, 2000 date for the plaintiffs’ departure from the firm. This complied with section 9.1 of Mesirov’s partnership agreement, which generally requires at least 30 days written notice of an intent to withdraw.

• On May 2, 2000, Jaffe demanded that Poeta leave Mesirov as soon as possible. In mid-May 2000, Jaffe advised Stem-Fleming that she should leave Mesirov on Friday, May 26, 2000, as it was unnecessary for her to continue working for the two remaining business days of May 30 and 31. Neither plaintiff agreed to any modification of the April 25 agreement.

• The partners announced on May 25, 2000 that Mesirov had agreed to “merge” with Schnader Harrison Segal Lewis LLP. In accordance with the terms of the merger, all of Mesirov’s assets, subject to its liabilities, were transferred to Schnader on May 31, 2000.

• According to the plaintiffs, if the firm was not dissolved by the partners’ actions on April 3 and 4,2000, it was dissolved either by the attempted expulsion of Poeta on May 2 or by the merger on May 31, 2000.

The amended complaint sets forth four counts: a breach of fiduciary duty claim against all defendants requesting an equitable accounting and the appointment of a receiver; two counts for breach of fiduciary duty, one by each plaintiff; and a claim for breach of the agreement by both plaintiffs. Defendants contend that the amended complaint is not legally sufficient.

DISCUSSION

Plaintiffs have corrected the defects found in the original complaint filed in this matter, and the amended complaint’s allegations sufficiently plead that the firm was dissolved prior to the plaintiffs’ departure. In addition, the amended complaint alleges breaches of fiduciary duty by each defendant. In summary, plaintiffs may proceed with their claims.

I. The Plaintiffs’ Claims for Breach of Fiduciary Duty and Breach of the Duty of Good Faith and Fair Dealing Are Legally Sufficient

The crux of the debate over the sufficiency of the plaintiffs’ claims is whether the plaintiffs remained partners until the firm was dissolved, giving rise to fiduciary duties owed to them throughout the winding-up process. Based on the allegations in the amended complaint, this court submits that the plaintiffs remained partners until the firm’s dissolution.

Partners generally owe each other a fiduciary duty to act in good faith during the life of the partnership and throughout the partnership’s wind-up period, which follows dissolution and precedes termination. 15 Pa.C.S. §8334; In re LaBrum & Doak LLP, 227 B.R. 391 (Bankr. E.D. Pa. 1998) (citing, inter alia, 15 Pa.C.S. §§8331, 8334(a), 8352; Clement v. Clement, 436 Pa. 466, 260 A.2d 728 (1970)). As noted in the prior opinion, “no ongoing duty is generally owed to partners who withdraw prior to a partnership’s dissolution.” Poeta v. Jaffe, November term 2000, no. 1357, slip op. at 5-6 (C.P. Phila. May 30,2001) (Sheppard, J.) (citing, inter alia, Zebley v. Ostheimer, 368 Pa. 21, 81 A.2d 546 (1951); Hansel v. Hansel, 300 Pa. Super. 548, 556-57, 446 A.2d 1294, 1298-99 (1982); Finkelstein v. Security Props. Inc., 888 P.2d 161, 167 (Wash. Ct. App. 1995); Allen R. Bromberg & Larry E. Ribstein, Bromberg & Ribstein on Partnership (1991) §6.07(a)(7)). Because there are no allegations of misconduct by the defendants before May 2000, this requires that the plaintiffs establish that the firm’s dissolution was effected prior to their departure.

Under Pennsylvania law, the dissolution of a partnership may be caused by any of the following:

“(1) Without violation of the agreement between the partners:
“(i) By the termination of the definite term or particular undertaking specified in the agreement.
“(ii) By the express will of any partner when no definite term or particular undertaking is specified.
“(in) By the express will of all the partners who have not assigned their interests or suffered them to be charged for their separate debts, either before or after the termination of any specified term or particular undertaking.
“(iv) By the expulsion of any partner from the business bona fide in accordance with such a power conferred by the agreement between the partners.
“(2) In contravention of the agreement between the partners, where the circumstances do not permit a dissolution under any other provision of this section, by the express will of any partner at any time.
“(3) By any event which makes it unlawful for the business of the partnership to be carried on or for the members to carry it on in partnership.
“(4) By the death of any partner.
“(5) By the bankruptcy of any partner or the partnership.
“(6) By decree of court under section 8354 (relating to dissolution by decree of court).” 15 Pa.C.S. §8353.

Plaintiffs assert that they did not depart from the firm until May 31,2000, and that at least one of the following events led to the dissolution of the firm:

• The April 4, 2000 consensus of the partners that the firm had to merge with one of the three candidate firms or liquidate;

• Jaffe’s May 2,2000 demand that Poeta leave the firm immediately; or

• The May 25, 2000 announcement of the merger.

According to the plaintiffs, these actions constituted either an affirmative vote of the partners to dissolve the firm as permitted by the agreement, or the express will of the partners to dissolve the firm possibly in contravention of the agreement, or Poeta’s expulsion, each of which would have caused the firm’s dissolution.

A. The April 4, 2000 Meeting Did Not Constitute an Affirmative Vote of the Partners To Dissolve the Firm

The plaintiffs first argue that the April 4, 2000 consensus constituted an affirmative vote of the majority of the partners, causing the dissolution of the firm in accordance with the agreement and section 8353(l)(ii). The court cannot concur.

Section 2.1 of the agreement states that the firm “can be dissolved by the affirmative vote of a majority of the partners,” with the withdrawal of a partner being of no effect in the absence of a vote agreement at section 2.1. According to the amended complaint, at the April 4,2000 meeting the partners “approved the plan to merge with another firm, or if the merger could not be effected quickly, to liquidate the firm.” Amended complaint at ¶53. To the extent that this constituted a vote on dissolution, however, it was conditioned on a merger not going through and could not have been effective immediately. Moreover, the merger removed the conditions on which the partners approval of dissolution was based. Thus, this vague agreement to dissolve at some undetermined point in the future if certain events did or did not occur cannot be regarded as an affirmative vote to dissolve the firm.

The plaintiffs’ bald assertions that the firm was dissolved on April 4,2000 are of no moment. While a complaint may set forth allegations of fact, the alleged legal effect of the underlying events may be disregarded. Wagner v. Waitlevertch, 774 A.2d 1247, 1254 (Pa. Super. 2001) (“[i]n reviewing the grant of preliminary objections, we need not consider the pleader’s conclusions of law”). Here, plaintiffs’ own description of the April 4, 2000 meeting contradicts their proposed legal conclusion that dissolution occurred.

B. Poeta’s Alleged Expulsion From the Firm Did Not Cause its Dissolution

The next event proposed by the plaintiffs as the date of dissolution is May 2, 2000, the day on which Jaffe “demanded that Poeta leave the Mesirov firm as soon as possible.” Amended complaint at ¶71. Under section 8353( l)(iv), the expulsion of a partner in accordance with the terms of the partnership agreement causes the partnership’s dissolution. The rationale for treating the remaining partners as a unit, if expulsion is not undertaken in accordance with the agreement, includes the belief that “the concept of expulsion from a firm implies that the firm continues.” Bromberg & Ribstein §7.11(d).

Section 9.8 of the agreement allows the firm’s executive committee to recommend that a partner be removed “for cause,” and provides for the removal of a partner upon the affirmative vote of 75 percent of the partners. There is no allegation that the partners undertook the steps required by section 9.8. Indeed, it appears that the request that Poeta leave the firm “as soon as possible” came from Jaffe alone, without any consent of any other partners. Amended complaint at ¶71. This does not comport with section 8353’s requirement that an expulsion resulting in dissolution be in accordance with the terms of the partnership agreement.

The plaintiffs’ reliance on Beasley v. Cadwalader, Wickersham & Taft, 728 So.2d 253 (Fla. Dist. Ct. App. 1998), in which the court held that the defendant’s expulsion of the plaintiff in violation of the partnership agreement caused the defendant’s dissolution, is misplaced. While a handful of courts have found that an unauthorized expulsion of a partner causes the dissolution of the partnership,

“Other remedies are seemingly more consistent with the U.P.A. First, the court can hold that such an expulsion results in a judicial decree of dissolution at the instance [sic] of the excluded partner. The consequences of such a dissolution will depend on whether the excluded partners was [sic] also guilty of misconduct. Second, the partners may be able to obtain judicial dissolution based on the wrongful conduct of the partner to be expelled, in which event they would have the right to buy that partner’s interest and continue the partnership. . . .” Bromberg & Ribstein §7.02(f)(2). (internal references and footnotes omitted)

Here, the amended complaint does not request Mesirov’s dissolution, and the court cannot consider granting such relief. As a result, it cannot be said that Poeta’s alleged expulsion caused the firm’s dissolution on May 2,2000.

C. Mesirov May Have Been Dissolved by the Express Will of the Partners as Indicated by the Transfer of the Firm’s Assets and the Engagement of the Partners by Schnader

Finally, plaintiffs assert that the partners dissolved the firm by their express will. The court is persuaded that the amended complaint alleges events to support the conclusion that it was the partners’ express will to dissolve the firm prior to the plaintiffs’ withdrawal. Thus, the fiduciary duties owed to the plaintiffs continue through the firm’s winding up.

A partnership may be dissolved at any time by the express will of one or all of the partners, either as permitted by or in contravention of the partnership agreement. See Girard Bank v. Halley, 460 Pa. 237, 243, 332 A.2d 443, 446 (1975) (“an expression of a will to dissolve is effective as a dissolution even if in contravention of the agreement”). There is no clear definition of what constitutes the “express will” of a partner or partners under Pennsylvania law. In Account of C.H. Welles, Haeberly’s App., 191 Pa. 239, 43 A. 207 (1899), the Pennsylvania Supreme Court held that, while the intent of the partners is key, a partnership’s dissolution “may be shown by the sale of the whole property and business, as well as in other ways.” See also, Vollet v. Pechenik, 380 Pa. 342, 110 A.2d 221 (1955) (finding that partnership had been dissolved where partnership assets had been sold and lease of premises explicitly stated that the partnership had completed its business and was winding up its affairs). Treatises and cases from foreign jurisdictions support this point. See e.g., Maryland Cas. Co. v. Bedsole & Shetley, 228 F. Supp. 521, 526 (M.D. La. 1964) (“upon transfer of all [partnership] assets the partnership ceased to exist”); Gonseth v. K & K Oil Co., 439 S.W.2d 18, 20 (Mo. Ct. App. 1969) (upon the transfer of all partnership assets, the partnership “ceased to exist”); Bromberg & Ribstein §7.02(e)(2) (to determine when partners have expressed the will to dissolve the partnership, a court may rely upon the transfer of the partnership’s assets or the partnership business). Cf. Hooper v. Yoder, 737 P.2d 852, 858 (Colo. 1987) (“when partners organize a corporation to operate the business of the partnership and transfer the assets to the corporation, . . . such action usually reflects the express will of the parties that the partnership be dissolved”).

The plaintiffs point to the current state of the firm, including the allegations that the current “partners” do no work on behalf of the firm and that the firm has no assets. They also highlight language in Mesirov’s Internal Revenue Service Form K-l, which states that the firm’s assets were transferred to Schnader on May 31, 2000 and refers to the “former partners of Mesirov.” These allegations indicate that Mesirov may have been dissolved by the express will of the partners by May 31, 2000, at the latest, and that the plaintiffs’ supposed membership in the firm until then creates fiduciary duties that are owed to them through the winding-up process.

II. The Amended Complaint Presents Claims Against All Four Defendants

Defendants also urge that the amended complaint does not allege breaches of fiduciary duty by each defendant. The court disagrees. According to the amended complaint, the defendants, as a group, conveyed Mesirov’s assets to Schnader in exchange for the benefit of membership in Schnader and guaranteed allocations for 2000. Amended complaint at ¶¶83-85. In addition, the defendants have allegedly refused to give the plaintiffs an accounting of the financial status of the firm and have failed to give the plaintiffs the allocation to which they are due. Id. atH96-97, 100-101, 108-109, 115. The fact that the amended complaint includes additional allegations against Jaffe, Krause and Shapiro does not minimize these infractions, which constitute specific breaches of each defendant’s fiduciary duty to the plaintiffs. Accordingly, the plaintiffs may proceed against all four defendants.

CONCLUSION

The amended complaint alleges sufficient facts to support the plaintiffs’ action, and the objections are overruled.

ORDER

And now, October 2, 2001, upon consideration of the preliminary objections of defendants Richard R Jaffe, Robert P. Krauss, Barry J. Frank and Harvey N. Shapiro, to the amended complaint, the plaintiffs’ response in opposition, and in accord with the opinion being filed contemporaneously with this order, it is hereby ordered that the preliminary objections are overruled. The defendants are directed to file an answer to the amended complaint within 22 days of the date of this order.

      . Available at http://courts.phila.gov/cptcvcomp.htm.

      . According to the complaint, these firms were Blank Rome Comisky & McCauley L.L.R, Pepper Hamilton and Wolf, Block Schorr and Solis-Cohen.

      . As there was no specific merger plan, the court infers that the partners expressed approval for the general principle that a merger between Mesirov and another firm should take place.

      . This is referred to as the “April 25 agreement.”

      . This transaction is referred to as the “merger.” The plaintiffs allege that Schnader was not one of the firms with whom Mesirov was considering as of April 4, 2000.

      . These actions would implicate section 8353(l)(ii), (l)(iii), (l)(iv) and (2).

      . In In re Crutcher, 209 B.R. 347 (Bankr. E.D. Pa. 1997), it appears that the court attempted to straddle the fence on this issue. On the one hand, the court omitted the second half of section 8353(l)(iv), stating only that “expulsion of any partner from the business” was grounds for dissolution. 209 B.R. at 352. In the following sentence, however, the court noted that “[s]everal cases expressly state and apply the rule that the exclusion of one partner by another from the management of the partnership business or possession of the partnership property is undoubtedly ground for dissolution by a court of equity.” Id. (citations, brackets and quotation marks omitted) Thus, it is difficult to determine whether the Crutcher court embraced the reasoning of Beasley or followed the path recommended by Bromberg and Ribstein.

      . The amended complaint asserts that the plaintiffs’ remained partners “until the end of the day on May 31, 2000.” Amended complaint at ¶90.

      . Plaintiffs contend that this may violate the agreement, including those provisions requiring partners’ incomes from the practice of law to be paid to the firm and prohibiting non-partnership business activity.


author: CONNELLY, J.,

text:
    Commonwealth v. Williams

      June 20, 2001
    C.P. of Erie County,
    no. 2416 of 2000.

      James K. Vogel, assistant district attorney, for plaintiff.

      John B. Carlson, for defendant.

      Karl Baker, for amici curiae.
   CONNELLY, J.,

Before the court is a constitutional challenge to the latest version of Megan’s Law.

FACTUAL HISTORY

On July 27, 2000, petitioner sexually assaulted a 17-year-old girl in the women’s restroom of the Tinseltown movie theater. On March 21,2001, petitioner pled guilty to several charges including rape. Because rape is a predicate offense under 42 Pa.C.S. §9795.1 et seq. (Megan’s Law II), this court ordered the' State Sexual Offenders Assessment Board to evaluate petitioner prior to his sentencing. The results of the evaluation are to assist the court in determining whether petitioner is a “sexually violent predator.”

If petitioner is found to be a SVP then he must comply with the requirements of Megan’s Law II. Petitioner will be required to register with the state police, provide them with fingerprints, a photograph of himself, his current address, any subsequent change of address and his employment information, all of which the SVP must update quarterly. The state police are then required to transmit this information to the local police where the SVP resides and works. The local police are then required to disseminate the gathered information to neighbors, schools, day-care facilities and the victim. In addition, the SVP must attend monthly counseling sessions in a program approved by the board for the rest of their life and must shoulder the financial burden. Failure of the SVP to comply with any of these requirements, subjects the SVP to a mandatory minimum sentence of probation for life, up to a maximum sentence of life in prison.

On March 26,2001, petitioner, through counsel, filed a motion for extraordinary relief challenging Megan’s Law II as unconstitutional under the United States and Pennsylvania Constitutions. A brief in support of his motion was attached thereto. The American Civil Liberties Union together with the Pennsylvania Association of Criminal Defense Lawyers, Defender Association of Philadelphia and the Public Defender Association of Pennsylvania filed an amicus curiae memorandum of law in support of petitioner’s challenge.

Petitioner argues the effects of Megan’s Law II rise to the level of punishment requiring the full panoply of constitutional protections as required in any other criminal proceeding. After extensive review, this court finds Megan’s Law II in fact does inflict additional punishment and therefore is violative of the Fourteenth Amendment of the United States Constitution.

LEGISLATIVE HISTORY

The original Megan’s Law (Megan’s Law I) was adopted by the Pennsylvania Legislature in 1995 and signed into law on October 24 of that same year. In 1999, the Pennsylvania Supreme Court, in Commonwealth v. Williams, 557 Pa. 285, 733 A.2d 593 (1999), struck down Megan’s Law I as violative of the due process clause of the Fourteenth Amendment. In Williams, the Supreme Court found unconstitutional section 9794(b), which placed the burden of proof upon the person convicted of a predicate offense, to rebut the presumption that they are a sexually violent offender.

In response, on May 3, 2000, the Pennsylvania General Assembly passed Megan’s Law II which was signed into law May 10 of that same year. Megan’s Law II does not contain the presumption that was found to be unconstitutional in Williams.

APPLICABLE LAW

(1) A statute will only be found unconstitutional if it “clearly, palpably and plainly violates the constitution.” Commonwealth v. Mikulan, 504 Pa. 244, 247, 470 A.2d 1339, 1340 (1983).

(2) The Fifth Amendment to the United States Constitution provides that “No person shall... be deprived of life, liberty, or property without due process of law U.S. Constitution Amendment V.

(3) The Equal Protection Clause of the Fourteenth Amendment to the United States Constitution directs that “No state shall... deprive any person of life, liberty, or property without due process of law; nor deny any person within its jurisdiction the equal protection of the laws.” U.S. Constitution Amendment XIV, Section 1.

DISCUSSION

Petitioner’s constitutional challenges are based on the assumption that the registration requirements in Megan’s Law II are punitive in nature and therefore entitle petitioner to the full panoply of constitutional protections available to defendants in criminal proceedings.

Megan’s Law II has yet to be reviewed in the appellate courts at the time of the court’s writing of this opinion and therefore is a matter of first impression in the case at bar.

The Williams court found Megan’s Law I to be punitive in nature and as a result held that shifting the burden of proof to the offender to prove s/he is not a SVP violated the constitutional protections of due process. The Williams court stated:

“Given our view, however, that the proceeding set forth in the Act to determine whether or not one is a sexually violent predator is a separate factual determination, the end result of which is the imposition of criminal punishment, we hold that anything less than the full panoply of the relevant protections which due process guarantees is violative of the Fourteenth Amendment.” Williams at 304, 733 A.2d at 603.

The same day Williams was decided, the Supreme Court of Pennsylvania also decided Commonwealth v. Gaffney, 557 Pa. 327, 733 A.2d 616 (1999). The issue before the Gaffney court was whether the registration requirements of Megan’s Law I violated Gaffney’s constitutional right against ex post facto laws. Gaffney argued the registration requirements of Megan’s Law I imposed additional punishment on him and as such violated his constitutional rights.

In order to determine whether the requirements of Megan’s Law I were ex post facto, it was necessary for the Gaffney court to determine if the requirements of Megan’s Law I constituted additional punishment. The Gaffney court found the requirements of Megan’s Law I did not inflict additional punishment on a defendant and accordingly found no violation of Gaffney’s constitutional rights.

At first blush, there appears to be a dichotomy in the holdings between Williams and Gaffney on the issue of what constitutes punishment. However, when both cases are examined in light of the heightened burdens and consequences of Megan’s Law II, which are significantly greater than those of Megan’s Law I, there is a consistency of law which is appropriate to application herein. Even more significant, the increased burden, effect and consequences of Megan’s Law II strengthen the holding in Williams.

To determine whether a statute is punitive in nature both the Williams and Gaffney courts adopted the test from the Third Circuit’s decisions in Artway v. Attorney General, 81 F.3d 1235 (3d Cir. 1996) and E.B. v. Verniero, 119 F.3d 1077 (3d Cir. 1997). Gaffney, 733 A.2d at 619. The test has three prongs, the first subjective, the second objective (both of which focus on the legislature’s purpose and intent of enacting legislation) and the third, requiring an evaluation of the effects of the statute. If a statute fails any one prong it is punitive in nature and the defendant prosecuted under that law must be afforded the full panoply of the constitutional protection. This court will now examine Megan’s Law II under the Artway/Verniero test.

The General Assembly significantly increased the SVP requirements under Megan’s Law II. Further, it broadened the dissemination of information by requiring the information to be circulated by electronic means. Second, it increased the punishment for failure to comply with the requirements of the Act to a possible sentence of life in prison. Third, it removed the ability to have the SVP status reviewed by the board and the court and removed if the SVP has been rehabilitated.

Initially, the Artway/Verniero test requires an analysis of whether the legislature’s actual, subjective purpose or intent in enacting a particular measure is punishment. A review of the statute’s legislative history reveals that Megan’s Law I and II were both passed by the Pennsylvania General Assembly for the purpose of creating a system to identify and track SVPs by requiring such offenders to register with the state police as they transition from incarceration into society and any subsequent relocations. The information gathered from the registration is then disseminated to various agencies that have a heightened interest in protecting citizens from SVPs. The information is designed to put those who might be at risk of becoming a victim of such predators on notice so they can take the necessary steps to guard against such risks.

Initially, Megan’s Law II appears to be specifically crafted to protect the community and not to punish those who are subject to registration under the Act. The legislature made it clear under 42 Pa.C.S. §9791(b) “Declaration of policy:”

“It is hereby declared to be the intention of the General Assembly to protect the safety and general welfare of the people of this Commonwealth by providing for registration and community notification regarding sexually violent predators who are about to be released from custody and will live in or near their neighborhood. It is further declared to be the policy of this Commonwealth to require the exchange of relevant information about sexually violent predators among public agencies and officials and to authorize the release of necessary and relevant information about sexually violent predators to members of the general public as a means of assuring public protection and shall not be construed as punitive.”

The declaration of policy in Megan’s Law II, is identical to that of Megan’s Law I which the Gaffney court found was not intended as punitive. Accordingly, the subjective purpose or intent of Megan’s Law II is designed to be remedial in nature and not punitive. See Gaffney, 733 A.2d at 619.

The second prong of the test requires a court to determine if analogous measures have traditionally been regarded by society as punitive. It has three subparts: (A) proportionality, whether the remedial measure or purpose can explain all of the adverse effects on those involved, (B) whether the measure has been historically considered punishment, and (C) whether the measure serves both a remedial and deterrent purpose. See Gaffney, 733 A.2d at 619.

If subpart (C) is answered in the affirmative then a measure will only be considered punitive if: (a) the deterrent purpose is an unnecessary compliment to the measure’s salutary operation, (b) the measure is operating in an unusual manner inconsistent with its historically mixed purpose, and (c) the deterrent purpose overwhelms the salutary purpose. See Gaffney, 733 A.2d at 619-20. The Gaffney court found Megan’s Law I satisfied the second prong of the Artway/Verniero test. However, Megan’s Law II is significantly more enhanced.

Petitioner here argues the objective effects of the enhanced requirements of Megan’s Law II are so burdensome that they constitute punishment. Petitioner further argues that because the new Act requires the wide dissemination of his status as a S VP, a social stigma or indelible mark is attached to him equivalent to that of a scarlet letter. Moreover, he asserts that the threat of incarceration for the rest of his life and an inability to ever have the future opportunity to remove the burdens of the statute rise to the level of punishment. These requirements are equivalent to a lifetime of probation which is clearly a well-established form of punishment in this country.

The Gaffney court (albeit only ruling on the issue of registration) was guided by Artway and in dicta addressed the issue of notification:

“The notification issue is not before us. We evaluate only registration, and that provision bears little resemblance to the scarlet letter. Registration simply requires Artway to provide a package of information to local law enforcement; registration does not involve public notification. Without this public element, Artway’s analogy fails. The scarlet letter and other punishments of ‘shame’ and ‘ignominy’ rely on the disgrace of an individual before his community. The act of registering with a discrete government entity, which is not authorized to release that information to the community at large (except in emergencies), cannot be compared to public humiliation. The officers who constitute local law enforcement, even if they are from Artway’s area, would constitute only a de minimis portion of that community.” Gaffney, 733 A.2d at 620.

NOTIFICATION

This is one of the areas where Megan’s Law II falls short of constitutional muster. The information gathered does not stop at the doors of law enforcement. In fact, local law enforcement agencies are under an affirmative duty to disseminate the information to the public at large. 42 Pa.C.S. §9798(b)(l)(2)(3)(3.1)(4)(5). Now authorized to use electronic means, such as the Internet to proliferate information about a SVP, this information is available for viewing by those who live in other states and around the world, clearly outside the zone of any risk, 42 Pa.C.S. §9798(d).

Such a nonselective, blanket notification scheme exceeds the nonpunitive aspects of the Act’s own “declaration of policy” statement that “it be the policy of this Commonwealth to require the exchange of relevant information about sexually violent predators among public agencies and officials and to authorize the release of necessary and relevant information about sexually violent predators. . . .” Declaration of policy, 42 Pa.C.S. §9791(b).

This court must strain to envision a legitimate state interest and need for the wide, uncontrollable dissemination of the stigmatizing fact petitioner is a SVP, that the Act now requires. For instance, there is no need for someone in California to know the personal information of a SVP living in the state of Pennsylvania. The likelihood of someone from another state having any contact with a SVP from Pennsylvania, is remote at best. Yet notification by electronic means is sweeping, overly broad and adversely affects those involved.

Because the notification scheme in Megan’s Law II is so broad, it will reduce the petitioner to be viewed as a pariah by others who may not be remotely at risk. Citizens who feel the SVP should not be entitled to live in their neighborhoods or work in their job field may be likely to retaliate against the SVP. Incidents in other jurisdictions with Acts containing less notifications confirm this fact. Therefore, the more widespread this information becomes, the more likely the SVP and the innocent public at large will be exposed to violence and other inappropriate recriminations.

REGISTRATION AND COUNSELING

Labels aside, the Act inflicts even greater punishment of a more traditional style. If determined to be a SVP, petitioner is faced with the unsettling fact that if he fails to comply with the enumerated requirements of Megan’s Law II at any time during his lifetime, he is exposed to a possibility of spending the rest of his life in prison. Once classified as a SVP, the door is permanently open for petitioner to lose forever his right to liberty even though he may not commit any further substantive offenses.

Moreover, the requirement that the SVP report quarterly to the state police is tantamount to probation where one must report to his probation officer on a regular basis; the provision of mandatory, monthly counseling is also a condition often associated with probation/parole supervision. This procedure has traditionally been used as punishment in our criminal justice system. Even more troubling to this court is the fact that the SVP will be subject to these burdens after serving their time in prison and on supervision (parole). In short, having completely paid their lawful debt to society, they are unable to ever lift the heavy burden placed on them by the Act. Specifically, the statute requires that the Pennsylvania State Police verify the defendant’s residence (and compliance with counseling) of a SVP every 90 days by sending a verification form to his residence. The SVP must then personally appear within 10 days and complete the form and be photographed. Section 9796(a). Verification of residence. This requirement, is in effect for the lifetime of the SVP. Should the SVP fail to verify his or her residence or be photographed (as to any 90-day period) she or he “commits a felony of the first degree and shall be sentenced to a mandatory minimum sentence of probation for the remainder of the individual’s lifetime and may be sentenced to a period of incarceration up to the individual’s lifetime.” Section 9796(e). Penalty.

Further, and also for the SVP’s lifetime, she or he is “required to attend monthly counseling sessions in a program approved by the board and be financially responsible for all fees assessed by the counseling sessions.” Section 9799.4. Counseling of sexually violent predators.

Regular reporting and mandatory counseling have long been conditions of supervision traditionally attached to sentences of probation (or requirements of parole). See Commonwealth v. Johnson, 282 Pa. Super. 21, 422 A.2d 655 (1980) (leaving drug counseling program prematurely sufficient grounds for revocation of probation); Commonwealth v. McBride, 289 Pa. Super. 396, 433 A.2d 509 (1981); Commonwealth v. Newman, 225 Pa. Super. 327, 310 A.2d 380 (1973) (revocation for failure to report to probation or parole officer).

The Act also inflicts punishment because it contains two separate sentencing schemes depending on the level of culpability or aggravating circumstances of an offender. The offender may be subject to a 10-year or lifetime registration depending on the underlying predicate offense. 42 Pa.C.S. §9795.1(a)(b). These variations are traditionally used when measuring the extent of wrongdoing rather than facilitating a remedial purpose. Such a large disparity as to time of tracking an offender does not serve as an aid or indicate the likelihood of recidivism among different offenders. These diverse limits simply appear to act as differing forms of retribution. If the underlying predicate offense is of one category the offender is required to register for only 10 years. However, if the underlying offense is perceived to be of a more egregious legal delineation, the offender is subject to the enhancement of having to register for life rather than simply 10 years. And, no matter in which category the predicate offense falls, if the offender is determined to be a SVP then he is subject to registration and the mandatory conditions attached thereto for the rest of his life. These provisions clearly inflict punishment of different length and magnitude based on a somewhat arbitrary and discretionary classification, somewhat akin to the sentencing schemes for various classes of crimes (felonies and misdemeanors).

The third prong of the test requires the court to measure the effect of the statute on one of the citizenry. The analysis and the effects of the third prong are similar to those of the objective portion of the test, which failed constitutional scrutiny (i.e. if the effects of the Act are so harsh as a matter of degree that it constitutes punishment). Here, the same analysis that leads this court to conclude that objective purpose of the test is punitive, likewise leads this court to conclude that the effect of the Act is also punitive. The SVP must provide extensive information to law enforcement officials on a quarterly basis, notify authorities of any subsequent moves and must attend monthly counseling sessions at their own expense. Moreover, this information is not just available to those who need to know, it is spread wide and far by electronic means (i.e. the Internet). Retaliations against SVPs have regularly surfaced, often leaving the SVP unable to return to a normal lifestyle once their debt to society has been paid. As a result, many SVPs must live in constant fear for their, and their families, physical and financial well-being.

CONCLUSION

The foregoing analysis indicates to this court that the notification, registration, and counseling scheme found in Megan’s Law II does rise to the level of punishment. Accordingly, the full panoply of constitutional protections must be available to petitioner to minimize the possibility of an unjustified, unfair or unreliable prosecution that inflicts additional punishment. Thus, the Act is unconstitutional because it does not provide these procedural safeguards.

Although the Commonwealth has a compelling interest in protecting citizens through registration and notification procedures, the state has no interest in notifying the public of those persons who have been erroneously identified as a SVP. Thus the state has a compelling interest in insuring its citizens that the system of determining whether a person is a SVP is both fair and accurate. See Williams at 311, 733 A.2d at 606. Because the lynchpin to whether petitioner is exposed to the requirements of Megan’s Law II is the initial (and final) determination of SVP status, this is the point at which due process rights must attach, not later, when or if a violation of the Act occurs.

The court therefore reasonably and legally deducts that the provisions of Megan’s Law II as to sections 9796(a) (quarterly verification of residence), 9798(b) (to whom written notice provided) and (d) (public notice), as well as 9799.4 (mandatory monthly counseling) constitute the imposition of additional punishment above and beyond the statutory maximum allowable by law for the predicate offenses for which a SVP has been convicted. Before a defendant may be declared a sexually violent predator and such additional punishment may be imposed upon a defendant he must be given the full complement of due process rights. (See footnote 3.) Since the Megan’s Law statute does not incorporate such safeguards, and sections 9795.4(a), (b) and (e) give the defendant less than the rights he is entitled to (assessment and hearing as opposed to criminal information and trial; and as to burden of proof, clear and convincing evidence versus proof beyond a reasonable doubt), those sections too must be declared unconstitutional as violative of the defendant’s due process rights.

ORDER

And now, to-wit, June 20,2001, the court is constrained to conclude that portions of Megan’s Law II are unconstitutional for the reasons set forth in the foregoing opinion, and the defendant’s motion for extraordinary relief is granted consistent therewith.

      . Section 3121 Rape.
      Section 3123 Involuntary deviate sexual intercourse.
      Section 2702 Aggravated assault.
      Section 2706 Terroristic threats.
      Section 907 Possessing instruments of crime.

      . This court is not unaware that the Constitution of Pennsylvania may in fact grant greater protections to those accused of a crime, however since this court finds Megan’s Law II violates the protections afforded in the Constitution of the United States, this court need not address the protections provided by the state Constitution.

      . Those requirements include, the right to a jury trial, the right against self-incrimination, proof of guilt beyond a reasonable doubt and the right to have criminal proceedings initiated by indictment or information.

      . Megan’s Law II has been held to be unconstitutional by several judges in at least two counties in Pennsylvania however.

      . In Artway, the Third Circuit found that New Jersey’s Megan’s Law notification provisions were unripe for adjudication but found the registration provisions constitutional because at the registration phase only tier 1 notification was required, therefore the only notification was to public agencies and not to the outside public.

      . In Vemiero, the Third Circuit again found New Jersey’s Megan’s Law notification provisions constitutional on tier levels 2 and 3 because the Act restricts the dissemination of information on tier 2 and 3 offenders to those who are “reasonably certain” to encounter a tier 2 or 3 offender.

      . Although petitioner raises a host of other challenges, because this court finds Megan’s Law II violative of the United States Constitution on the above issues, this court’s inquiry need not go any further.

      . Neither probation nor parole is a sentence. Sentencing is an original imposition of punishment for a crime while parole is a conditional release from prison before the end of a sentence. Geraghty v. U.S.

        Parole Com., 429 F. Supp. 737 (1977). Probation is a supervisory period ordered in lieu of incarceration. Commonwealth v. Ferguson, 201 Pa. Super. 649, 193 A.2d 657 (1963). However, for all intents and purposes, probation is considered a sentence in Pennsylvania. For example, probation is a sentence for purposes of appeal, due process, or double jeopardy. Commonwealth v. Vivian, 426 Pa. 192, 231 A.2d 301 (1967).

      . Under the statute the written notice shall contain the name of the SVP, his address, the offense he was convicted for, a statement he has been determined to be a SVP, and a photograph and shall be given to neighbors, the director of the county children and youth agency, the superintendent of each school district and private and parochial school officials, and the operators of all certified and licensed daycare and preschool programs within the municipality, as well as the president of any college within 1,000 feet of the defendant’s residence.

      . This section of the statute provides that all of the information provided in subsection (a) about the SVP be available to the general public and may be provided by electronic means.

      . See amicus curiae appendix for anecdotal evidence of such including threats made not only to defendants but family members, lawyers and judges, loss of employment, harassment and physical assault.

      . Section 9795.1. Registration

        (a) 10-year registration. — The following individuals shall be required to register with the Pennsylvania State Police for a period of 10 years:
      (1) Individuals convicted of any of the following offenses:
      18 Pa.C.S. §2901 (relating to kidnapping) where the victim is a minor.
      18 Pa.C.S. §3126 (relating to indecent assault) where the offense is a misdemeanor of the first degree.
      18 Pa.C.S. §4302 (relating to incest) where the victim is 12 years of age or older but under the age of 18 years of age.
      18 Pa.C.S. §5902(b) (relating to prostitution and related offenses) where the actor promotes the prostitution of a minor.
      18 Pa.C.S. §5903(a)(3), (4), (5) or (6) (relating to obscene and other sexual materials and performances where the victim is a minor).
      18 Pa.C.S. §6312 (relating to sexual abuse of children).
      18 Pa.C.S. §6318 (relating to unlawful contact or communication with minor).
      18 Pa.C.S. §6320 (relating to sexual exploitation of children).

        (2) Individuals convicted of an attempt to commit any of the offenses under paragraph (1) or subsection (b)(2).

        (b) Lifetime registration. — The following individuals shall be subject to lifetime registration:
      (1) An individual with two or more convictions of any of the offenses set forth in subsection (a).
      (2) Individuals convicted of any of the following offenses:
      18 Pa.C.S. §3121 (relating to rape).
      18 Pa.C.S. §3123 (relating to involuntary deviate sexual intercourse).
      18 Pa.C.S. §3124.1 (relating to sexual assault).
      18 Pa.C.S. §3125 (relating to aggravated indecent assault).
      18 Pa.C.S. §4302 (relating to incest) when the victim is under 12 years of age.

      . This court is ever mindful and acutely aware of the heinous acts of child molesters, their impact upon the community and the damage they impose upon their victims. Indeed, in its 15 1/2 years on the bench, this court has presided over more than its share of such cases and has handed down some of the stiffest penalties in the history of the Commonwealth (including a 100 to 200-year sentence) for such gross and deviate behavior. But that has only been done after a defendant has had a full and fair trial, been proven guilty beyond a reasonable doubt and had all of his due process rights safeguarded. As well intentioned as this legislation may have been, it, as all statutes and laws, must not and cannot usurp the constitutional rights of any citizen no matter how heinous the crime or infamous the criminal.