author: CAMPBELL, J.,

text:
    Cullison v. Gettysburg Economic Development Corporation

      Christopher S. Lucas, for plaintiffs.

      Rees Griffiths, for defendants.

      Edward G. Puhl, for defendants.
    June 3, 2010
   CAMPBELL, J.,

Presently before the court is defendant Adams County National Bank’s petition to strike lis pendens. For the reasons set forth herein, said petition is granted.

PARTIES

(1) Plaintiff Parksville Properties is/was a partnership with a place of business at 5 Tiffany Lane, Gettysburg, Pennsylvania.

(2) Plaintiffs Marina Cullison and Shelly Verber are natural persons and partners in Parksville Properties.

(3) Defendant Gettysburg Economic Development Corporation (GEDC) is a corporation formed by the Borough of Gettysburg with a place of business at 59 High Street, Gettysburg, Pennsylvania

(4) Defendant Adams County National Bank (ACNB) is a corporation with a business address of P.O. Box 3129, Gettysburg, Pennsylvania

BACKGROUND

On January 25, 1989, plaintiffs purchased the property at issue in this matter for $775,000. (Defendant’s exhibit B.) Plaintiffs conveyed the property to GEDC under a special warranty deed for a price of $1,800,000 dated September 21, 2007. (Plaintiffs’ exhibit 2.) The deed was recorded on September 27, 2007, at 2:36 p.m. All the parties involved expected the property to be redeveloped with funding from a Regional Economic Development District Initiative of South Central Pennsylvania (REDDI) grant through the Pennsylvania Redevelopment Assistance Capital Project (RACP). To finance part of the purchase price, and other expenses, GEDC sought a $2,100,000 loan from ACNB. As a condition of the loan, ACNB required that GEDC have good and marketable title, free of liens and encumbrances, and provide a first priority purchase money mortgage. (Defendant’s exhibit D.) GEDC agreed, and ACNB recorded its mortgage on September 27, 2007, at 2:39 p.m. (Defendant’s exhibit E.) GEDC then paid plaintiffs $1,300,000 up front and granted a mortgage for the remaining $500,000 of the purchase price. Paragraph 8 of the agreement stated, “[i]t is the intention of the mortgagor and mortgagee that this mortgage shall be second in lien priority and subordinate to the first mortgage lien of Adams County National Bank of even date herewith.” (Defendant’s exhibit E.) Plaintiffs recorded their mortgage on September 27, 2007, at 2:40 p.m. (Plaintiffs’ exhibit 1.)

To further secure plaintiffs’ interest, their second mortgage contained a demolition restriction, providing that “mortgagor will not permit the demolition of any improvements on the property during the term of this mortgage.” (Plaintiffs’ exhibit 1.) This language did not appear in the September 21 deed conveying the property to GEDC. (Plaintiffs’ exhibit 2.) The only restriction in the deed provided that it was subject to all easements of record. Id.

The expected grant from RACP was never forthcoming, and GEDC has defaulted on both mortgages. On November 18, 2009, ACNB initiated an action in mortgage foreclosure against GEDC. On January 8, 2010, ACNB was awarded a judgment by default. On January 20, 2010, ACNB entered judgment against GEDC. The property was set for sheriff’s sale on May 21, 2010.

On April 28,2010, plaintiffs filed a complaint seeking a declaratory judgment that title to the subject property is burdened with the demolition restriction until the second mortgage is paid in full, and that GEDC should be ejected on grounds that it obtained title through false pretenses. The complaint contains six counts. Counts 1-3 allege that the deed between plaintiffs and GEDC contained a covenant that attached and ran with the land, namely that GEDC and its successors were bound by the demolition restriction contained in the second mortgage. The first count alleges the mortgage restriction created a fee simple subject to a condition subsequent. Counts 2 and 3 allege a negative easement in gross and an equitable servitude, respectively. Count 4 alleges the demolition restriction cannot be discharged via the sheriff’s sale and any purchaser is bound by it. Count 5 seeks reformation of the deed to add the demolition restriction, and Count 6 seeks ejectment, alleging fraud.

On May 11,2010 plaintiffs filed a lis pendens. On May 19,2010, at the plaintiffs’ request in the foreclosure action, the court entered an order postponing the sale until June 4,2010, in order to ensure plaintiff Verber had sufficient notice of the sale as required by applicable rules of court. ACNB filed a motion to strike lis pendens on May 25,2010. The complaint in this case was also served on defendants on May 25,2010. No other pleadings have been filed in this case. Hearing was held on the motion to strike lis pendens on June 1, 2010.

DISCUSSION

A lis pendens may only be indexed when title to real estate itself is involved in a suit. Century 21 Daystar Inc. v. Philips, 5 D.&C.4th 543, 544 (Lehigh Cty. 1990).

“Its purpose is merely to give notice to third persons that the real estate is subject to litigation and that any interest which they may acquire in the real estate will be subject to the results of the action, (citations omitted) Lis pendens has no application except in cases involving the adjudication of rights in specific property, (citations omitted) Thus, a party is not entitled to have his case indexed as lis pendens unless title to real estate is involved in litigation. Lis pendens may not be predicated upon an action seeking to recover a personal demand, (citations omitted)” Id.

The Supreme Court has held that

“being a creature not of statute but of common law and equity jurisprudence, the doctrine of lis pendens is wholly subject to equitable principles. Thus, if a plaintiff were to delay unreasonably in the prosecution of his claim, or if the operation of the doctrine should prove to be harsh or arbitrary in particular instances, equity can and should refuse to give it effect, and, under its power to remove a cloud on title, can and should cancel a notice of lis pendens which might otherwise exist.” Dice v. Bender, 383 Pa. 94, 97-98, 117 A.2d 725, 727 (1955).

Plaintiffs have argued that section 4302 of the Judicial Code allows a lis pendens to be indexed so long as any interest in real property is claimed during litigation. Section 4302 provides, “every document effecting title to or any other interest in real property which is filed and indexed in the office of the clerk of the court of common pleas of the county where the real property is situated ... shall be constructive notice to all persons of the filing and full contents of such document.” 42 Pa.C.S. §4302(a). Contrary to plaintiffs’ assertion, section 4302 merely states that documents properly filed with the relevant filing office serve as notice to all others. It does not change the fundamental notion that title to property must be involved for a lis pendens to be properly indexed.

As an initial matter, plaintiffs do not dispute that ACNB’s mortgage was first in priority. ACNB’s mortgage is a purchase money mortgage and was recorded prior to the mortgage held by plaintiffs. Purchase money mortgages have priority over all others. 42 Pa.C.S. §8141. Furthermore, the mortgage in favor of plaintiffs states in pertinent part, “it is the intention of the mortgagor and mortgagee that this mortgage shall be second in lien priority and subordinate to a first mortgage lien of Adams County National Bank of even date herewith.” (Defendant’s exhibit F.) The property is scheduled for a sheriff’s sale on June 4, 2010, on the foreclosure action of the ACNB mortgage which will divest all junior liens on the property. 42 Pa.C.S. §8152(c); William I. Mirkil Co. v. Gaylon, 446 Pa. 111, 115, 285 A.2d 181, 183 (1971). Once a sheriff’s sale related to the first mortgage is completed, the buyer acquires a vested interest and the second mortgagee is divested of all interest in the property. The Reliance Corporation v. Rapp’s Dam Bridge Inc., 43 D.&C.3d 425, 428 (Chester Cty. 1987). Therefore, in order for the demolition restriction contained in the second mortgage to bind subsequent purchasers, the restriction must run with the land. Plaintiffs argue that it does.

Two types of covenants may be used in a real estate transaction to restrict the owner’s use and enjoyment of his property: a personal covenant and a real covenant. Mock v. Hoffman, 27 D.&C.3d 169, 170 (Somerset Cty. 1980). A personal covenant is enforceable only between the parties involved; a real covenant runs with the land. Id. Because a lis pendens cannot be entered based upon an action to recover on a personal demand, a personal covenant will not support it. “The test in determining whether a particular covenant runs with the land is the intention of the parties; and to ascertain the intent, resort may be had to the words of the covenant in light of the surrounding circumstances and the subject of the grant.” Id. at 171. Restrictive covenants, although not favored, are legally enforceable. Logston v. Penndale Inc., 394 Pa. Super. 393, 400, 576 A.2d 59, 62 (1990.) They are to be strictly construed against persons seeking to enforce them and in favor of free, unrestricted use of property. Id.

Covenants in deeds “so closely connected with the realty that their benefits or burdens pass with it to subsequent purchasers are real covenants.” But covenants in a mortgage are intended to bind the covenantor only and-terminate on satisfaction or discharge of the mortgage. Such covenants cannot become a charge on the realty inperpetuity. DeSanno v. Earle, 273 Pa. 265, 270, 117 A. 200, 202 (1922).

In this instance, the presence of the restrictive covenant in the second mortgage, but not in the deed, is significant. The covenant clearly states that it exists during “the term of this mortgage.” A mortgage is merely collateral for the payment of some primary obligation. Raneri v. Inn America of Pennsylvania Inc., 29 D.&C.3d 239, 240 (Westmoreland Cty. 1984). An express covenant in a mortgage is merely ancillary to and in support of that primary obligation and its function is to furnish collateral security for the performance of the terms of that obligation. Id. Plaintiffs’ own complaint states that the purpose of the covenant was to provide additional security to plaintiffs. (Complaint, ¶¶14 & 15.) Therefore, unless this covenant can be interpreted as also being a part of the deed, it cannot run with the land. To the contrary, the restriction in a mortgage is divested and extinguished upon foreclosure sale on the first, more senior mortgage. Plaintiffs are then left with a personal demand for payment of the balances due on the note. Accordingly, because the mortgage restriction gives plaintiffs no claim to title in the real estate, a lis pendens is not appropriate.

Plaintiffs first argue that the demolition restriction created a fee simple subject to a condition subsequent. This property interest is created when a deed provides that upon the happening of some specified event, the grantor has the power to terminate the estate. Emrick v. Bethlehem Township, 506 Pa. 372, 379, 485 A.2d 736, 739 (1984). In interpreting a deed, the following guidelines apply:

“(1) [T]he nature and quantity of the interest conveyed must be ascertained from the instrument itself and cannot be orally shown in the absence of fraud, accident or mistake and we seek to ascertain not what the parties may have intended by the language but what is the meaning of the words ...; (2) effect must be given to all the language of the instrument and no part shall be rejected if it can be given a meaning . . . ; (3) if a doubt arises concerning the interpretation of the instrument it will be resolved against the party who prepared it...; (4) unless contrary to the plain meaning of the instrument, an interpretation given it by the parties themselves will be favored...; (5) to ascertain the intention of the parties, the language of a deed should be interpreted in the light of the subject matter, the apparent object or purpose of the parties and the conditions existing when it was executed.” Higbee Corporation v. Kennedy, 286 Pa. Super. 101, 109, 428 A.2d 592, 595 (1981).

It is quite clear that there is absolutely no restriction contained in the deed and neither the second mortgage nor the deed has language suggesting that title would revert to plaintiffs upon default in payment of the second mortgage. The only restriction contained in the deed is standard language providing that title was subject to easements of record. However, the second mortgage was not of record at the time the deed was executed.

Likewise, plaintiffs’ arguments that the demolition restriction created a negative easement in gross and/or an equitable servitude also fail. First, an easement cannot be an estate or interest in land, or a right to any part of it. Assalita v. Chestnut Ridge Homeowners Association, 866 A.2d 1214, 1218 n. 13 (Pa. Commw. 2005). An easement in gross is entirely personal and is not attached to the property. Hassler v. Mummert, 242 Pa. Super. 536, 542, 364 A.2d 402, 405 (1976). An easement in gross does not create a right to vesting of title to the real estate. Therefore, a lis pendens is not appropriate on this ground and the demolition restriction would not bind a subsequent owner purchasing at a sheriff’s sale in a foreclosure action.

An equitable servitude, i.e. easement by implication, is acquired “where the intent of the parties is clearly demonstrated ‘by the terms of the grant, the surroundings of the property and other res gestae of the transaction. ’ ” Purdy v. Zaver, 398 Pa. Super. 190, 199, 580 A.2d 1127, 1132 (1990). (citations omitted) On the face of the documents presented to the court it is clear that the demolition restriction itself indicated it was to continue only during the term of the second mortgage (which term ends when it is divested), that plaintiffs stated in their own complaint that its purpose was to secure the second mortgage, that ACNB would only grant a mortgage if GEDC owned the property free of any encumbrances, and there is no language in any document presented to the court granting plaintiffs a reversionary interest. Plaintiffs have no claim to the title in the land. Therefore, an equitable servitude is not a proper ground supporting entry of lis pendens.

In addition, the plaintiffs’ claims to a reversionary interest or the right to an ownership interest or title to the property runs afoul of the statute of frauds. 33 P.S. §1. The statute of frauds provides that no agreement for the sale of real estate will be enforceable unless it is in writing and signed by the party to be charged. Fannin v. Cratty, 331 Pa. Super. 326, 331, 480 A.2d 1056, 1058 (1984). The purpose of the statute is to prevent assertions of verbal understandings to obviate the opportunity for fraud and perjury. Id. The statute of frauds is applicable to alleged building and use restrictions. Plaintiffs have failed to produce any writings suggesting they have some interest involving title. The plain language of the documents presently before the court simply does not warrant such an interpretation. Accordingly, their lis pendens is inappropriate.

Importantly, in seeking to assert an ownership interest in this property, plaintiffs are ignoring their own assurances made in the deed. The deed stated that “[gjrantors hereby covenant and agree that they will warrant specially the property hereby conveyed.”

“A covenant or agreement by the grantor or grantors in any deed or instrument in writing for conveying or releasing land that, he, they, or it ‘will warrant specially the property hereby conveyed,’ shall have the same effect as if the grantor or grantors had covenanted that he or they, his or their heirs and personal representatives or successors, will forever warrant and defend the said property, and every part thereof, unto the said grantee, his heirs, personal representatives and assigns, against the lawful claims and demands of the grantor or grantors, and all persons claiming or to claim by, through, or under him or them.” 21 Pa.C.S. §6.

This warranty provides that the grantor will defend the grantee from all lawful claims against the property, including those held by the grantor. Under a special warranty deed, the grantor agrees to defend the title to the property against an adverse claimant with a superior interest in the land claiming through the grantor. Leh v. Burke, 231 Pa. Super. 98, 110, 331 A.2d 755, 762 (1974). By bringing this action claiming an interest in title to the conveyed real estate, whether it is a legitimate action or not, plaintiffs are violating the very terms of their own warranty. By agreeing to defend the grantees against any claim made against the property, plaintiffs cannot turn around and assert an ownership interest in the property.

The lis pendens is also blocked by the doctrine of laches. A lis pendens may not be entered merely as a tool to leverage a party’s position. Dice, 383 Pa. at 98, 117 A.2d at 727; Century 21 Daystar, 5 D.&C.4th at 544. “Laches is an equitable doctrine that bars relief when a complaining party is guilty of want of due diligence in failing to promptly institute an action to the prejudice of another.” White v. Township of Upper St. Clair, 968 A.2d 806, 810-11 (Pa. Commw. 2009). To establish laches, a defendant must show a delay arising from the complaining party’s failure to exercise due diligence, and prejudice to the defendant resulting from delay. Id. The test for due diligence is not what a party knows, but what he might have known by the use of available information. Id. In this matter, ACNB initiated the foreclosure action on November 18, 2009. Judgment by default was granted on January 8, 2010. The property was set for a sheriff’s sale on May 21, 2010. It was not until April 28, 2010, that plaintiffs filed their complaint, more than five months after the bank instituted foreclosure proceedings and less than one month before the scheduled sheriff’s sale. Plaintiffs’ actions have already resulted in pushing the sheriff’s sale back to June 4, 2010. The basis of essentially all claims in plaintiffs’ complaint occurred in the months leading up to the September 2007, conveyance of the property. Plaintiffs’ attempts to further hinder ACNB’s efforts to enforce its rights in execution upon its first mortgage is prejudicial to ACNB and unreasonable especially considering the lack of any meritorious claims by plaintiff against ACNB. This is unreasonable delay in light of the information that plaintiffs knew or could have discovered. ACNB has been prejudiced by the delay due to the postponed sheriff’s sale.

Therefore, the doctrine of laches (an equitable doctrine) precludes the lis pendens filed at a last minute in an effort to leverage plaintiffs’ position and delay further ACNB ’s pursuit of its lawful rights.

The complaint also seeks reformation of the deed to include the demolition restriction and ejectment of GEDC from the property. To reform the deed to include the demolition restriction, plaintiffs would have to show that the terms of the deed do not reflect the intent of the parties, as the result of fraud, accident, or mistake. McNaughton Properties LP v. Barr, 981 A.2d 222, 229 (Pa. Super. 2009). As discussed above, to do this the plaintiffs would need the court to look beyond the plain terms of the writings available. Once again, this would raise a statute of frauds issue that plaintiffs cannot overcome. The plain language of the documents shows the restriction was placed in plaintiffs’ junior mortgage only. Plaintiffs were paid fair consideration (in the form of $1,300,000 cash and a $500,000 note) for the conveyance of all title they had in the property. Plaintiffs have the ability to pursue personal demands for payment of the balance due on the note. If plaintiffs have valid claims for fraud they can pursue these claims via an action for damages. Equity interests preclude the filing of a lis pendens to further delay proceedings.

Finally, plaintiffs’ ejectment action also does not support their claim that title is at issue. In support of their ejectment action, plaintiffs have pled numerous allegations of fraud against GEDC and the Borough of Gettysburg. Other than a blanket claim that ACNB was a part of this alleged fraud, a claim not supported in the pleadings, this allegation relates solely to GEDC. Plaintiffs counsel conceded that they do have an action for damages against GEDC and the borough, but it is not an attractive alternative. Ejectment is an action filed by a plaintiff who does not have possession of land, but has the right to posses it. Siskos v. Britz, 567 Pa. 689, 698, 790 A.2d 1000, 1006 (2002). The action can only proceed if the plaintiff is presently out of possession and has a present right to immediate possession. Id. at 701, 790 A.2d at 1008. The plaintiff vendor cannot dispossess the defendant vendee until the vendor has refunded the purchase money that he has received or compensated the vendor for any improvements made to the property. Walker v. France, 112 Pa. 203, 213, 5 A. 208, 210 (1886). Plaintiffs sold the land to GEDC, do not have a present right to immediate possession, have not refunded the $ 1,300,000 paid to them by ACNB at the time of the sale, and indicated an unwillingness to do so. Therefore, ejectment would not be possible at this time. In any event, an ejectment action seeks possession, not title, to the real estate. Therefore, a lis pendens is not supported by plaintiffs’ fraud-based ejectment action.

Finally, plaintiffs’ reliance on Powell v. Emigrant Mortgage Company Inc., 988 A.2d 1288 (Pa. 2010) is misplaced. Powell is a case on allocator to the Supreme Court. The court was unable to locate a copy of the decision being addressed by the Supreme Court. However, this court will not make a decision based on what the Supreme Court may or may not do. This court is bound by the decisions presently in existence. Furthermore, based on the briefs of the parties, it is apparent that Powell involves a lis pendens filed before the mortgage was recorded, and therefore, not on point with this case.

CONCLUSION

The plain language of the second mortgage and deed plainly show that the demolition restriction was not intended to run with the land and bind subsequent purchasers or grant plaintiffs a reversionary interest. The second mortgage is junior to ACNB’s purchase money mortgage; it will be divested at sheriff’s sale. Plaintiffs are unable to show any modification to those agreements by any valid writings which would satisfy the statute of frauds. Additionally, operation of the doctrine of lis pendens is arbitrary in this instance based on the documents of record, the nature of the averments in plaintiffs’ complaint, and plaintiffs’ acknowledgment that it has an appropriate action for damages, whether or not it is an attractive one. Because none of plaintiffs’ claims would entitle them to title, a lis pendens is inappropriate. Accordingly, ACNB’s petition to strike lis pendens is granted and the attached order is entered.

ORDER

And now, June 3, 2010, the petition to strike lis pen-dens filed by defendant Adams County National Bank on May 18,2010, is granted. The Adams County prothonotary is directed to strike the lis pendens.

      . A grant program for economic development.

      . Plaintiffs have not made the Borough of Gettysburg a party in this case.

      . The court need not address herein the merit, or lack thereof, of any action for fraud. While GEDC may or may not be insolvent, it is noted that many of the averments of fraud in the complaint involve the Borough of Gettysburg, which is not a party to this action.


source: Caselaw Access Project

author: ALBRIGHT, J.,

license: Public Domain

text:
    O’Neill v. Kolar

      David L. Braverman, for defendant.

      Richard S. Julie, for defendant.

      Matthew A. Taylor and Robert M. Palumbos, for plaintiff.
    June 15, 2010
   ALBRIGHT, J.,

The defendant, Erik E. Kolar, appeals from the order of the trial court, dated July 29,2009, overruling, in part, and sustaining, in part, his preliminary objections to the plaintiffs’ amended complaint. For the reasons that follow, the undersigned believes that the defendant’s appeal should be quashed and/or dismissed.

FACTS AND PROCEDURAL BACKGROUND

By way of background, this lawsuit arises out of Mr. Kolar’s departure from his former employment as a partner, working alongside and with the plaintiff, Michael O’Neill, managing the Conshohocken-based real estate investment company and plaintiff herein, Preferred Unlimited Inc. After nine years of working together, the parties’ business and personal relationship had soured and, on September 17, 2007, Mr. Kolar filed a RICO complaint against the plaintiffs in the U.S. District Court for the Eastern District of Pennsylvania. One month later, the plaintiffs brought this lawsuit against Mr. Kolar who, shortly thereafter, preliminarily objected to the plaintiffs’ amended complaint. These objections were subsequently resolved by the undersigned’s order of July 29,2009, which overruled, in part, and sustained, in part, the objections raised by Mr. Kolar.

On August 24,2009, the defendant, in a timely manner, appealed the trial court’s ruling on his preliminary objections to the Pennsylvania Superior Court. In response, at the lower court’s direction, Mr. Kolar submitted his concise statement of error complained of on appeal (Pa. R.A.P. 1925(b) statement), which provided the following:

“Defendant Erik E. Kolar, through undersigned counsel, hereby respectfully submits this concise statement of error complained of on appeal pursuant to Pa.R.A.P. 1925(b) and this court’s order dated August 27, 2009, and respectfully identifies the following error of which he complains on appeal:
“Whether the trial court failed to recognize that Mr. Kolar’s filing of his RICO complaint in the United States District Court is protected by the doctrine of absolute privilege, and thereby erred in overruling Mr. Kolar’s preliminary objections to plaintiffs’ abuse of process claim?
“Mr. Kolar further states that this court’s order overruling his preliminary objections based on absolute privilege is an appealable collateral order. See Pa. R.A.P. 313; Huhta v. State Board of Medicine, 706 A.2d 1275, 1276 (Pa. Commw. 1998).

DISCUSSION

Ordinarily, unless permitted by statute or rule, an appeal may be taken only from a final order. In re Condemnation by City of Philadelphia in 16.2626 Acre Area, 981 A.2d 391, 396 (Pa.Commw. 2009). According to Pa.R.A.P 341(b), an order is final and appealable only if it: (1) disposes of all claims and parties; or (2) is expressly defined as a final order by statute; or (3) where there is an express determination by the trial court that an immediate appeal would facilitate resolution of the case. See Brawley Distributing Co. Inc. v. Heartland Properties, 712 A.2d 331, 332 (Pa. Super. 1998); Pa. R.A.P. 341(c); Chase Manhattan Mortgage Corp. v. Hodes, 784 A.2d 144 (Pa. Super. 2001). The undersigned’s order, dated July 29,2009, which overruled, for the most part, all of the defendant’s preliminary objections, did not dismiss all claims or parties; nor is the trial court aware of any statutory authority that would render them final. Neither, in fact, did the rulings complained of contain “an express determination that an immediate appeal would facilitate the resolution of the case.” Pa.R.A.P. 341(c). It would normally, therefore, necessarily follow that the orders appealed from should properly be considered to be interlocutory and non-appealable.

There are indeed, instances, however, where an appeal from a non-final, interlocutory order might be permitted, provided it falls into one of the following categories, i.e.:

(1) Interlocutory appeal as of right, pursuant to Pa.R.A.P. 311;

(2) Interlocutory appeal by permission, pursuant to Pa.R.A.P. 312; or

(3) Collateral order, pursuant to Pa.RA.P. 313.

The defendant apparently concedes that the trial court’s order is not one which is appealable as of right or by permission. See Pa.R.A.P. 312. Instead, Mr. Kolar contends only that the lower court’s decision overruling his preliminary objections to the plaintiffs’ abuse of process claim constitutes an “appealable collateral order.”

That which makes the order “collateral” and, therefore, “appealable,” he asserts, is its failure to recognize and sustain the defendant’s claim that his filing in federal court of a RICO Complaint is protected by the doctrine of absolute privilege and cannot properly be made the subject or form the basis of the plaintiffs’ abuse of process claim. Despite Mr. Kolar’s somewhat incredible, vacuous arguments to the contrary, his interpretation of the law of this Commonwealth is strained at best and wrong in the final analysis.

While, as the defendant opines, statements, allegations and averments made in pleadings or during the course of litigation are certainly in most situations accorded an absolute privilege, they must, nevertheless, be deemed “pertinent and material” to the relief or redress sought before the privilege attaches. See American Future Systems Inc. v. Better Business Bureau of Eastern Pennsylvania, 592 Pa. 66, 81 n.10, 923 A.2d 389, 398 n.10 (2007); Post v. Mendel, 510 Pa. 213, 220, 507 A.2d 351, 355 (1986). For the most part, the pertinence and materiality of the alleged defamatory statements or averments made in a pleading may be presumed where that presumption has apparently been challenged, as in this case, by the plaintiffs, a decision by this court on whether or not the privilege attaches to those statements or averments, if made now, would be premature and, accordingly, should not be made at this preliminary objection stage. Even if, however, the alleged defamatory statements were to be determined to be absolutely privileged, the gist of the plaintiffs’ defamation claims centers primarily on the defendant’s alleged publication of his RICO complaint (not its filing) and the allegations contained therein within the Philadelphia Business Journal. If, indeed, as alleged, the plaintiffs are able to prove that the defendant’s communications with the press media were malicious, and made with the knowledge that they or some of them were untrue, intending to damage the plaintiffs’ reputations, then no privilege of any kind would apply.

The aforementioned notwithstanding, the only discemable issue raised in the defendant’s somewhat vaguely worded “concise statement,” supplemented by an exceedingly vague self-serving footnote, is that the trial court erred in failing to sustain his preliminary objections to the plaintiffs’ abuse of process claim since the filing of Mr. Kolar’s RICO complaint in federal court was absolutely privileged. Thus, Mr. Kolar appears to argue that since the legal process which he is alleged to have both initiated and abused was protected in the first instance, the order of the trial court which failed to recognize and grant herein that relief becomes “collateral” and appeal-able. If that is, indeed, the defendant’s position, the undersigned believes it to be both incorrect and unsupportable.

An “abuse of process” involves “the use of legal process against another primarily to accomplish a purpose for which it is not designed.” Werner v. Plater- Zyberk, 799 A.2d 776, 785 (Pa. Super. 2002). Unlike “malicious use of process,” which may arise when someone “institutes a lawsuit with a malicious motive and lacking probable cause,” an abuse of process occurs when the “legal process is utilized for some unlawful purpose, not one for which it was intended.” Shaffer v. Stewart, 326 Pa. Super. 135, 138, 473 A.2d 1017, 1019 (1984). While the defendant’s mere filing of the RICO complaint is not, in and of itself, sufficient to sustain an abuse of process claim, if the plaintiffs allege, as they have in this case, that the RICO litigation was initiated for an improper purpose, and that the process was then utilized by the defendant in a manner for which it was not designed or for illegitimate ends and only to cause harm to the plaintiffs, then the plaintiffs have sustained their pleading' burden. Here, in fact, the plaintiffs met that burden, having averred in their amended complaint that Mr. Kolar first filed his RICO action and thereafter caused the RICO allegations to be published in the Philadelphia Business Journal primarily for the purpose of extorting monies from the plaintiffs and harming their business relationships and reputations, thereby causing them damage claimed to be in excess of $25,000,000.

What Mr. Kolar himself appears not to recognize is that, from a pleading standpoint, a properly stated claim for abuse of process requires more than just a simple reference to the defendant’s prior filing of a RICO complaint. If, in fact, that had been all that had been alleged by the plaintiffs, the defendant’s objections to the claim would, no doubt, have been sustained as to the abuse of process count contained in the plaintiffs’ amended complaint. A review of that complaint, however, reveals that the plaintiffs have, as indicated, alleged those facts which are essential to maintaining against the defendant a cause of action for abuse of process. As properly pleaded, the critical elements of the plaintiffs’ abuse of process claim are not merely the defendant’s filing of his RICO complaint, but rather his subsequent misuse of that process against the plaintiffs. Despite his anticipated protests to the contrary, Mr. Kolar cannot hide behind the protective shield of absolute privilege which has no application here and upon which he should not be permitted to rely in pursuit of what could quite easily be perceived to be his thinly disguised effort to obfuscate and delay the expeditious resolution of this case.

The defendant concedes that the trial court’s order of July 29,2009 is not one which is appealable either as of right (pursuant to Pa.R.A.P. 311) or by permission (pursuant to Pa.R.A.P. 312). Instead, he appears to rely upon the third and last of the above-noted exceptions to the general rule sanctioning the appealability of those orders found to be “collateral” under Pa.R.A.P. 313. Subsection (b) of that rule sets forth a three-pronged “collateral order test,” which requires that Mr. Kolar demonstrate that the order appealed from meets each of the following criteria, namely, that the order appealed from: (1) is separable from and collateral to the main cause of action; (2) involves a right which is too important to be denied review; and (3) where the question presented is such that, if review is postponed until the entry of final judgment, the claim asserted by the appellant will be irreparably lost. See Pa.R.A.P. 313(b). The “appealability” of an order under Pa.R. A.P. 313 presents most often as a question of law to be resolved by the application of the three-pronged test found within the rule which is to be narrowly construed. The purpose, as noted by the Pennsylvania Supreme Court, in adopting a narrow construction of the “collateral order rule” is “to avoid ‘piecemeal determinations and the consequent protraction of litigation.’” Rae v. Pennsylvania Funeral Directors Association, 602 Pa. 65, 78, 977 A.2d 1121, 1129 (2009). Indeed, Rule 313 is “to be construed narrowly to preserve the integrity of the general rule that only final orders may be appealed; thus, the requirements for a collateral order are applied relatively stringently.” In re Estate of Stricker, 602 Pa. 54, 61, 977 A.2d 1115, 1119 (2009) (quoting In re Twenty-Fourth Statewide Investigating Grand Jury, 589, Pa. 89, 98, 907 A.2d 505, 510 (2006)); see Rae, 602 Pa. at 78, 977 A.2d at 1129. Accordingly, unless all three prongs of the applicable test have been met, the court is without jurisdiction to consider an appeal pursuant to Pa.R.A.P. 313. See Rae, 602 Pa. at 78, 977 A.2d at 1129.

In applying the criteria of Rule 313(b) to the trial court’s order of July 29, 2009, within the context of the analysis already provided, it is clear that the order in question meets none of the criteria of an “appealable collateral order.” See Pa.R.A.P. 313(b). In the case at bar, the trial court’s non-final order is not “separable from and collateral to the main cause of action” since the issue reviewed, that is, whether the defendant’s filing of a RICO complaint against the plaintiffs in federal court is privileged requires an analysis of the central issue in the plaintiffs’ case. See Pa.R.A.P. 313(b). That issue involves, essentially, a determination as to whether or not the defendant’s publication, not his filing of the RICO complaint, constituted an abuse of process and/or was defamatory. As noted earlier, the RICO complaint is merely an element and not the bases of the causes of action alleged by the plaintiffs, and, if the defendant’s preliminary objections had been sustained by the trial court, the effect of such a ruling would have had the potential effect of finally resolving not only the plaintiffs’ abuse of process claim but his defamation case as well.

As to the second and third prongs of the three-pronged collateral order test. Mr. Kolar’s assertion of absolute privilege involves neither a right too important to be denied review, nor will the claim be “irreparably lost” should its review be postponed until the entry of final judgment. See Pa. R.A.P. 313(b). To the contrary, the trial court’s order of July 29 deals only with “the pleadings in the underlying matter,” and, in overruling the defendant’s preliminary objections and granting leave to the plaintiffs to file a second amended complaint, the issue raised by Mr. Kolar will be preserved throughout the course of this litigation. See Chase Manhattan Mortgage Corp., 784 A.2d at 145. As such, the ruling complained of and the matters dealt with therein were so “inextricably intertwined with the merits of the action” that the order in question could not be characterized as “collateral” under Rule 313. See id.

The lower court’s ruling, in fact, did not deal with any issues concerning attorney client privilege, the disclosure of confidential or privileged information, motions to quash subpoenas or other similar matters involving rights “firmly rooted in public policy” and so essential to the parties and important to be denied review. In re Condemnation by City of Philadelphia, 981 A.2d at 396. No rights were lost by any of the parties as a result of the trial court’s July 29 order which, failing to dispose of any of the claims presented or parties involved, was interlocutory and unappealable.

CONCLUSION

For all of the aforementioned reasons, the trial court believes that the appeal taken from the order of July 29, 2009 should be quashed and/or dismissed.

      “1. Pursuant to Pa.R.A.P.(b)(3)(vi), Mr. Kolar states that he cannot readily discern the basis for this court’s order dated July 29, 2009, which overruled most of Mr. Kolar’s preliminaiy objections to plaintiffs’ first amended complaint herein. For example, Mr. Kolar has been unable to determine why the court overruled his preliminary objections to all tort claims based on absolute privilege, why the court overruled his preliminary objection to Mr. O’Neill’s contract claim based on Mr. O’Neill’s lack of standing, and why the court overruled his preliminary objection to Preferred Unlimited Inc.’s contract claim based on Mr. Kolar’s contractual and legal privilege.”

      . On September 17,2007, Mr. Kolar filed a RICO Complaint against the plaintiffs, herein. By order dated February 4,2010, the Third Circuit affirmed the judgment of the U.S. District Court for the Eastern District of Pennsylvania entered June 19,2008, dismissed Mr. Kolar’s RICO Complaint, and taxed costs against Mr. Kolar.

      . Am. compl. at ¶¶45-52.


author: SIBUM, J.,

text:
    Bongo v. Austin

      Brett J. Riegel, for plaintiff.

      Joshua B. Goldberg, for defendants.
    April 19, 2010
   SIBUM, J.,

This matter is a custody action in which defendants have filed preliminary objections to plaintiff’s complaint claiming lack of subject matter jurisdiction and insufficient specificity in a pleading. Plaintiff filed an answer to defendants’ preliminary objections. The custody conference previously scheduled in this case was cancelled pending determination of defendants’ preliminary objections. Both parties filed briefs and-argued their respective positions before the court on April 5,2010. The matter is now ripe for disposition.

DISCUSSION

Pursuant to Pennsylvania Rule of Civil Procedure 1028(a), preliminary objections may be filed by any party to any pleading on several grounds, including:

“(1) Lack of subject matter jurisdiction, and ...
“(4) Insufficient specificity in a pleading.” Pa.R.C.P. 1028(a)(1), (4).

In 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, 136 Pa. Commw. 629, 638, 584 A.2d 403, 407 (1990). The “court need not accept as true conclusions of law, unwarranted inferences from facts, argumentative allegations, or expressions of opinion.” Penn Title Insurance Company v. Deshler, 661 A.2d 481, 483 (Pa. Commw. 1995).

The plaintiff must state the material facts of a complaint “in a concise and summary form.” Pa.R.C.P. 1019(a). The allegations “must apprise the defendant of the claim being asserted and summarize the essential facts to support the claim.” Estate of Swift v. Northeastern Hospital of Philadelphia, 456 Pa. Super. 330, 337, 690 A.2d 719, 723 (1996) appeal denied, 549 Pa. 716, 701 A.2d 577 (1997). The “lower court has broad discretion in determining the amount of detail that must be averred since the standard of pleading set forth in Rule 1019(a) is incapable of precise measurement.” United Refrigerator Company v. Appelbaum, 410 Pa. 210, 213, 189 A.2d 253, 255 (1963).

Defendants’ first preliminary objection is in the form of a motion to strike pursuant to Pa.R.C.P. 1028(a)(1) which authorizes preliminary objections for lack of jurisdiction over the subject matter of the action or the person of the defendant. Defendants argue that pursuant to 23 Pa.C.S. §5421(a)(l) the Commonwealth of Pennsylvania had to be the home state of the minor children within six months of the filing of the instant custody complaint and a parent or person acting as a parent had to continue to reside within the Commonwealth. Defendants also argue that plaintiff resides outside the Commonwealth of Pennsylvania and defendant Sarah Austin is the only relevant party who continues to reside in Pennsylvania but is no longer acting as a parent since she does not have any formal partial custody rights. We disagree.

23 Pa.C.S. §5421 governs jurisdiction in initial child custody actions. Section 5421 provides, in relevant part, as follows:

“(a) General rule. — Except as otherwise provided in section 5424 (relating to temporary emergency jurisdiction), a court of this Commonwealth has jurisdiction to make an initial child custody determination only if:
“(1) this Commonwealth is the home state of the child on the date of the commencement of the proceeding or was the home state of the child within six months before the commencement of the proceeding and the child is absent from this Commonwealth but a parent or person acting as a parent continues to live in this Commonwealth;
“(2) a court of another state does not have jurisdiction under paragraph (1) or a court of the home state of the child has declined to exercise jurisdiction on the ground that this Commonwealth is the more appropriate forum under section 5427 (relating to inconvenient forum) or 5428 (relating to jurisdiction declined by reason of conduct) and:
“(i) the child and the child’s parents, or the child and at least one parent or a person acting as a parent, have a significant connection with this Commonwealth other than mere physical presence; and
“(fi) substantial evidence is available in this Commonwealth concerning the child’s care, protection, training and personal relationships;
“(3) all courts having jurisdiction under paragraph (1) or (2) have declined to exercise jurisdiction on the ground that a court of this Commonwealth is the more appropriate forum to determine the custody of the child under section 5427 or 5428; or
“(4) no court of any other state would have jurisdiction under the criteria specified in paragraph (1), (2) or (3).”

Reviewing the facts of record in the light most favorable to plaintiff, the record reveals the following. The minor children who are the subject of this petition are Nicholas Bongo, bom March 19,2003, age 7, and Mason Bongo, born June 29, 2004, age 5. The children’s biological father, Richard Bongo, currently resides in New Jersey. The biological mother, Sarah Austin, currently resides in Monroe County, Pennsylvania. Mother resided with the children in Pennsylvania from 2008 until September of 2009.

Pursuant to a court order at 218 OC 2009 dated December 12, 2009, the Honorable Jerome P. Cheslock of the Court of Common Pleas of Monroe County granted guardianship of Mason Bongo to Richard Talley and Claudette Austin-Talley who currently reside with the child in Lake Hopatcong, New Jersey. Pursuant to a court order at 219 OC 2009 dated December 12, 2009, the Honorable Jerome P. Cheslock of the Court of Common Pleas of Monroe County granted guardianship of Nicholas Bongo to Jesse Medina and Anne Marie Medina who currently reside with the child in Bomont, Texas.

Father filed a custody complaint in this court on January 15, 2010 seeking primary physical custody of the two minor children. At the time of filing, the children had relocated to New Jersey and Texas, respectively, approximately four months prior. Under 23 Pa.C.S. §5421, the Commonwealth of Pennsylvania was the home state of the children at the time the custody complaint was filed. At the time the action was commenced, Pennsylvania was the only state in which the children met the six-month residency requirement as set forth in 23 Pa.C.S. §5421(a)(l). Flowever, as of the date of this decision, the children have continued to reside in their new states of residence, New Jersey and Texas, respectively, for more than six months thereby allowing New Jersey to assume jurisdiction over custody proceedings concerning Mason, and Texas to assume jurisdiction over Nicholas’ custody action. Thus, the question becomes whether Pennsylvania is a more convenient forum in which to hear these matters.

23 Pa.C.S. §5427 addresses the issue of inconvenient forum in custody actions. It provides in pertinent part as follows:

“(a) General rule. — A court of this Commonwealth which has jurisdiction under this chapter to make a child custody determination may decline to exercise its jurisdiction at any time if it determines that it is an inconvenient forum under the circumstances and that a court of another state is a more appropriate forum. The issue of inconvenient forum may be raised upon motion of a party, the court’s own motion or request of another court.
“(b) Factors. — Before determining whether it is an inconvenient forum, a court of this Commonwealth shall consider whether it is appropriate for a court of another state to exercise jurisdiction. For this purpose, the court shall allow the parties to submit information and shall consider all relevant factors, including:
“(1) whether domestic violence has occurred and is likely to continue in the future and which state could best protect the parties and the child;
“(2) the length of time the child has resided outside this Commonwealth;
“(3) the distance between the court in this Commonwealth and the court in the state that would assume jurisdiction;
“(4) the relative financial circumstances of the parties;
“(5) any agreement of the parties as to which state should assume jurisdiction;
“(6) the nature and location of the evidence required to resolve the pending litigation, including testimony of the child;
“(7) the ability of the court of each state to decide the issue expeditiously and the procedures necessary to present the evidence; and
“(8) the familiarity of the court of each state with the facts and issues in the pending litigation.”

Upon consideration of the factors set forth in section 5427, the court finds that Monroe County, Pennsylvania is not an inconvenient forum, and this court will assume jurisdiction of this matter. The children have lived outside of Pennsylvania for a relatively short period of time and relevant evidence pertaining to the children’s best interests still exists here. Additionally, the distance to Texas makes it very burdensome on plaintiff to litigate custody in that location. Further, upon review of the guardianship records from the orphans’ court proceedings held with respect to the children and the orders entered by Judge Cheslock, the court notes that the record is devoid of any evidence that plaintiff Father was ever served with notice of the guardianship proceedings. For these reasons, defendants'’preliminary objection to jurisdiction in Monroe County, Pennsylvania will be denied.

Defendants’ second preliminary objection is in the nature of a motion to strike for lack of specificity in a pleading. Pa.R.C.P. 1028(a)(3) provides that preliminary objections may be filed for insufficient specificity in a pleading. Defendants contend that the allegations in the complaint that plaintiff is a “fit, capable, ready, willing and able father” are not sufficiently specific to allow defendants to adequately answer the allegation in a responsive pleading and defend same at time of trial. We disagree. Without question, the allegations are capable of answer by defendants. Defendants have sufficient information from the assertion to prepare a defense to same. The preliminary objection for insufficient specificity in a pleading pursuant to Pa.R.C.P. 1028(a)(3) will be denied.

Accordingly, we enter the following order.

ORDER

And now, April 19, 2010, this matter having come before the court for argument on defendants’ preliminary objections to plaintiff’s complaint for custody filed in this court on January 15, 2010, defendants’ preliminary objections are denied.


author: SHEPPARD, J.,

text:
    LVI Environmental Services Inc. v. Duane Morris LLP

      Brett A. Datto, for plaintiff.

      Nicholas M. Centrella and Jennifer K. Welsh, for defendant.
    May 10, 2010
   SHEPPARD, J.,

Plaintiff LVI Environmental Services Inc. (LVI) brought this action against its former attorneys, defendant Duane Morris LLP (DM), alleging professional malpractice in connection with DM’s representation of LVI in a lawsuit entitled LVI v. Delta/B.J.D.S. Inc. July term 2001, no. 01811 (Phila. Cty.) (the underlying action). LVI’s claim for delay damages in the underlying action was dismissed by the trial court, and DM failed timely to appeal the trial court’s ruling on that issue.

In this action, DM argues, correctly, that if the trial court’s ruling in the underlying action would have been sustained on appeal, then LVI suffered no damages as a result of DM’s malpractice. Without damages, LVI may not prevail on its claims for professional malpractice. In deciding the appeal, the Superior Court would have had to determine if the trial court erred as a matter of law, not of fact. Therefore, in deciding the case within this case, this court must determine, as a matter of law, if the trial court in the underlying action was wrong. The court cannot send this issue of law to the jury.

The relevant facts of record in the underlying action are as follows. LVI was a sub-subcontractor on a constructionproject at 1500 Spring Garden Street (the project). LVI entered into a contract with Delta/B J.D.S. Inc. (Delta) under which LVI was to perform certain demolition work on the project. Delta was the subcontractor responsible for asbestos removal on the project. The contract between Delta and LVI provided:

“If the subcontractor is delayed, disrupted or interfered with at any time in the commencement or progress of the work by an act or neglect of the contractor or of a separate subcontractor employed by the contractor, or by changes ordered in the work, or by fire, unavoidable casualties or any other cause wholly beyond the subcontractor ’s control, or by delay authorized by the contractor pending mediation and dispute resolution, then the agreement time shall be extended by change order for such reasonable time as the contractor may determine. No claim for delay, disruption or interference shall be allowed unless it increases the overall critical path duration of the schedule in effect at the time of the delay and unless the subcontractor has used its best efforts to offset such delay or disruption by making appropriate changes to other parts of the schedule. The subcontractor shall not be entitled under any circumstance to any adjustment in compensation or any damages or other compensation whatsoever in the event of any delay, disruption or interference in the progress of the work, regardless of the cause(s), unless owner agrees to such compensation in writing and contractor is not at fault, in whole or in part, for such delay, disruption or interference.”

By including this provision in their contract, the parties agreed that more time, rather than more money, was their preferred remedy for the delays which so often occur in construction projects.

As part of their contract, LVI and Delta agreed upon a schedule for the performance of their work under which LVI would have exclusive access to each floor to do its work before or after Delta performed its asbestos abatement work. The work did not proceed as planned. LVI claims that Delta fell behind schedule, and LVI was not given the exclusive access to which the parties agreed. As a result, LVI was forced to complete its work in a less efficient and more expensive manner.

In April 2001, LVI hired DM, who filed the underlying action on LVI’s behalf against Delta. In the underlying action, LVI asserted claims against Delta for breach of contract and violation of the Contractor and Subcontractor Payment Act. Delta moved for summary judgment based on the no damages for delay clause in the contract. The trial judge granted Delta’s motion and dismissed LVI’s delay damages claims. The parties settled the remaining claims and cross claims.

DM filed a notice of appeal of the dismissal of LVI’s approximately $1,700,000 in delay damages. The trial judge requested a statement of issues upon which the appeal was based. DM neglected timely to serve the statement of issues on the trial judge. As a result, LVI’s appeal was quashed.

LVI filed this action against DM for legal malpractice. LVI’s expert in this action opines that the trial court’s dismissal of LVI’s delay damage claim in the underlying action would have been reversed on appeal but for DM’s malpractice in failing to serve the statement of issues on the trial judge. LVI’s expert claims that the facts of this case fit the exceptions to enforcement of no damages for delay clauses.

A no damages for delay clause will not be enforced, i.e., delay damages may be recovered, where the delay “was not in the class of difficulties and delays which were in the minds of the parties” when they entered into their contract. The type of facts that give rise to this exception are akin to those that give rise to a claim for fraud in the inducement or mutual mistake of fact. Under all three legal theories, courts will not enforce a contract, or the relevant provisions of a contract, where the material facts underlying the transaction are not as the parties believed them to be at the time of contracting. There is no claim in this case that the circumstances existing at the time LVI and Delta entered into the contract were not as LVI believed them to be. Instead, LVI’s claim is that Delta’s promised future performance did not occur in the orderly fashion that LVI anticipated.

A no damages for delay clause may also be avoided “where an owner by an unwarranted positive act interferes with the execution of the contract, or where the owner unreasonably neglects to perform an essential element of the work in furtherance thereof, to the detriment of the contractor. Delay occasioned by the work of other contractors on the job site is not usually sufficient to meet this standard.

On one occasion, the Pennsylvania Supreme Court found that the interference of other contractors was such an impediment to the complaining contractor’s work that delay damages were recoverable despite the no damages for delay clause in the parties’ contract. However, the holding of that case must be limited to the rather troubling facts upon which it was based. In that case, it appears the interfering contractors and the owner of the project fraudulently conspired to misuse the project’s funds, which delayed the project and the complaining contractor.

There is no evidence that any such grand criminal conspiracy existed with respect to the project at issue in the underlying action. Instead, the evidence showed that Delta fell behind schedule in its own work and attempted to make up the lost time by working concurrently with its subcontractor, LVI, to LVI’s apparent detriment. If this court were to find that such a common construction scenario justified ignoring the no damages for delay clause in the contract, the exception to enforcement of the clause would end up swallowing the rule, and all such clauses would be rendered meaningless.

The trial court in the underlying action correctly ruled that the no damages for delay clause was enforceable and barred LVI’s claim against Delta for delay damages. The trial court’s ruling would have been upheld on appeal as a matter of law. Therefore, LVI has suffered no damages as a result of DM’s malpractice in connection with the appeal.

CONCLUSION

For all the foregoing reasons, DM’s motion for summary judgment is granted, and LVI’s claims against DM for malpractice are dismissed.

ORDER

And now, May 10, 2010, upon reconsideration of defendant Duane Morris LLP’s motion for summary judgment, the responses in opposition, the briefs in support and opposition, all other matters of record, and in accord with the opinion issued simultaneously, it is ordered that the motion is granted, and all of plaintiff’s claims are dismissed.

      .“When it is alleged that an attorney has breached his professional obligations to his client, an essential element of the cause of action, whether the action be denominated in assumpsit or trespass, is proof of actual loss.” Rizzo v. Haines, 520 Pa. 484, 504, 555 A.2d 58, 68 (1989).

      . Liss & Marion P.C. v. Recordex Acquisition Corp., 630 Pa. 198, 207, 983 A.2d 652, 657 (2009) (“We may disturb a trial court order granting summary judgment only if the lower court committed an error of law.”).

      . “Fundamental to our jury system is the premise that the court determines all questions of law while the jury passes on the credibility of witnesses and determines the facts.” General Electric Credit Corporation v. Aetna Casualty and Surety Company, 437 Pa. 463, 480 n.21, 263 A.2d 448, 458 n.21 (1970).

      . Given the context, this should probably read “subcontractor.”

      . Contract, ¶15.10 (“No damages for delay clause”).

      . Contract, exhibit B (scope of work). The scope of work also contained an acknowledgement by LVI that:
      “The subcontractor may have to work overtime to properly complete a work program, or maintain job schedule requirements and therefore the costs (labor, etc.) will be the responsibility of the subcontractor and are included in the subcontract agreement.”

      . The procedural history of LVI’s motion for summary judgment is far more complicated than this simple statement implies. For purposes of this opinion, the end result is all that is important.

      . Opinion of Howard Kelin, Esq., p. 23.

      . Sheehan v. Pittsburg, 213 Pa. 133, 62 A. 642 (1905).

      . See Restatement (Second) of Contracts, §159, comment c (“An assertion must relate to something that is a fact at the time the assertion is made in order to be a misrepresentation.”).

      . See Restatement (Second) of Contracts, § 152. “A contract made under a mutual mistake as to an essential fact which formed the inducement to it, may be rescinded on discovery of the mistake....” Gocek v. Gocek, 417 Pa. Super. 406, 410, 612 A.2d 1004, 1006 (1992).

      . See Coatesville Contractors & Engineers Inc. v. Borough of Ridley Park, 509 Pa. 553, 506 A.2d 862 (1986) (delay damages recoverable despite contract provision to the contrary where contractor agreed to excavate a drained lake and was instead confronted with one full of water); Sheehan, 213 Pa. 133, 62 A. 642 (delay damages recoverable despite contract provision to the contrary where owner did not have right of way over street it hired contractor to construct.).

      . Henry Shenk Co. v. Erie County, 319 Pa. 100, 106, 178 A. 662, 665 (1935).

      . See id. General contractor’s failure to provide subcontractor with promised expressway ramps free of traffic and contiguous staging areas might be sufficient to meet this standard. Grimme Combustion Inc. v. Mergentime Corporation, 406 Pa. Super. 620, 595 A.2d 77 (1991) (motion for judgment on the pleadings denied).

      . Gasparini Excavating Company v. Pennsylvania Turnpike Commission, 409 Pa. 465, 187 A.2d 157 (1963).

      . Id.., 409 Pa. at 478, 187 A.2d at 163. The Supreme Court was so displeased by these events that it vacated an arbitration award applying the no damages for delay clause. Id., 409 Pa. at 479, 187 A.2d at 164. Pennsylvania courts will not usually disturb an arbitrators’ award for such a “mistake of law.” See Runewicz v. Keystone Insurance Company, 476 Pa. 456, 461, 383 A.2d 189, 192 (1978) (“A common-law arbitration award is not reviewable on the basis of error of law or fact by the arbitrators. The setting aside of an award is proper only on a showing of denial of a hearing or fraud, misconduct, corruption, or similar irregularity leading to an unjust, inequitable, or unconscionable •award.”); 42 Pa.C.S. §7314, §7341.


author: LASH, J.,

text:
    Fisher v. Elbeco Inc.

      Shelly Farber, for plaintiff.

      Margaret Sherry Lurio, for defendant.
    June 9, 2010
   LASH, J.,

Defendant, Elbeco Inc., filed a motion for summary judgment arising out of an alleged violation of the Pennsylvania Human Relations Act, 43 P.S. §951, et seq. Plaintiff, Shirley Fisher, contends Elbeco terminated her employment in retaliation for protesting sexual harassment in the workplace and engaging in other “protected activity” which Fisher defines as discussing at the workplace retaliatory conduct she allegedly was subjected to because she initially complained about sexual harassment in 1995. Elbeco responds that Fisher was terminated from employment for appropriate reasons and specifically not because she reported sexual harassment in the workplace in 1995 or in retaliation for later discussing the 1995 report. Argument was held April 22,2010. For reasons set forth herein, we grant Elbeco’s motion.

Elbeco hired Fisher in 1990 as an order picker. (Fisher deposition, p. 16.) In 1993, she was moved to the sewing room, where she remained until the time of her discharge. (Fisher deposition, p. 17.) According to Fisher, the switch was made because Nancy Haas, the warehouse supervisor, subjected her to “unfair treatment” and was giving her “a lot of the bigger orders.” (Fisher deposition, pp. 19, 21.) As Fisher put it, Nancy Haas “would consistently be on my case about something.” Id. Once she moved to the sewing room, Fisher would report in the first instance to the lead person, Marie McFadden. Nancy Flaas remained her supervisor. (Fisher deposition, p. 22.) Ms. McFadden delegated the work in the sewing room. (Fisher deposition, p. 24.)

In 1995, Fisher made a complaint of sexual harassment against Nancy Haas. Fisher told Robert Pavalucci, a member of Elbeco management, that on five or six occasions Nancy Haas looked at her while she was in a bathroom stall. During each of these incidents, Fisher and Ms. Haas were alone in the bathroom. Fisher believed this to be sexual harassment as Fisher knew that Ms. Haas was gay. (Fisher deposition, p. 32.) Mr. Pavalucci said he would investigate the incident. (Fisher deposition, p. 25.) Mr. Pavalucci then contacted Cynthia Lurio, a Human Relations representative, and brought this matter to her attention. (Fisher deposition, p. 26.) Mrs. Lurio and Charles Knoll, the business agent for the company’s union, met with Fisher and discussed her complaint. Mrs. Lurio told Fisher that the matter would be taken care of without any retaliation against Fisher in the future. (Fisher deposition, p. 28.) Mrs. Lurio also said she had spoken with Nancy Haas and that the situation would be resolved. (Fisher deposition, pp. 29-30.) No further action was taken.

After 1995 or early 1996, Fisher never complained again to anyone at Elbeco about sexual harassment. (Fisher deposition, pp. 34-35.) However, Fisher alleges that subsequently she did have two meetings with David Lurio, Elbeco’s President, to express her ongoing concerns about Nancy Haas. The first meeting occurred some time before 2002. (Fisher deposition, p. 41.) After a labor-management meeting, Fisher complained to David Lurio and Anne Conway, a human relations representative, “that I just wanted this harassment and retaliation to stop, it’s gone on long enough, and it was because of a complaint that was made . . . .” (Fisher deposition, p. 44.) Fisher said that Nancy Haas complained about Fisher going to the bathroom too many times and that she didn’t want Fisher talking to anybody. Fisher characterized this behavior as “nit-picking.” (Fisher deposition, p. 50.) Fisher also complained that she was being constantly watched and monitored. Id.

Some time between six months to a year before her termination, Fisher again complained to David Lurio at another labor-management meeting. Nancy Haas and approximately 15 other Elbeco employees were present at that time. (Fisher deposition, pp. 58-59.) Fisher asked when Nancy Haas’ retaliation was going to end. (Fisher deposition, p. 59.) As far as Fisher recalls, there “wasn’t much of a comment” on the part of Elbeco management to Fisher’s allegations. (Fisher deposition, p. 62.)

Other than the two meetings, Fisher never complained to Elbeco management about any “retaliation” committed by Nancy Haas after 1996, (Fisher deposition, p. 62), nor did Fisher file any written complaint with human resources or the vice president of manufacturing about retaliation. (Fisher deposition, pp. 65-66.)

On July 30,2003, Fisher filed a grievance alleging that Elbeco violated the union contract by failing to post a job opening for the position of lead person. (Fisher deposition, p. 77.) Fisher had coincidentally learned of the opening by seeing an advertisement for the position in the Reading Eagle-Times. (Fisher deposition, p. 74.)

Fisher’s termination occurred on July 30,2003. At that time, Marie McFadden instructed Fisher to go to the conference room. (Fisher deposition, pp. 82-83.) Present at the meeting were David Lurio, Marie McFadden, and Bonnie Bowers, a human resource liaison. (Fisher deposition, p. 83.) David Lurio was the only one who spoke. He told Fisher that it had been brought to his attention that she was continuing to discuss her complaint of sexual harassment arising in 1995, a matter that she was advised not to discuss. This was causing a stressful work environment among her co-workers, cause for immediate dismissal. (Fisher deposition, p. 83.) Fisher responded that she had never spoken about it and could not believe that Mr.-Lurio was “believing these lies.” (Fisher deposition, p. 84.) Mr. Lurio did not say who was making the complaints. Fisher was terminated and after the meeting, escorted from the building. (Fisher deposition, p. 85.) Elbeco then issued a discipline notice, which sets forth the reasons for Fisher’s discharge, stating, in part:

“When Shirley Fisher spoke to the Human Resource Director concerning a situation several years ago involving Shirley and Nancy Haas, Shirley was told to keep her comments to herself and do her job. We have learned that fellow workers are being told about the original situation. At that time, both parties were told by Cynthia Lurio and Mary Lou Seiders not to talk about it.”

On October 18, 2004, Fisher filed a charge of discrimination against Elbeco with the Pennsylvania Human Relations Commission. Fisher alleged that she had been discharged by Elbeco in retaliation for complaining about an unfair employment practice. On March 15, 2006, Fisher received a notice from the Human Relations Commission that this complaint was being dismissed and she was permitted to file a lawsuit in the court of common pleas. Subsequently, Fisher filed the present action.

In her second amended complaint, Fisher alleges that Elbeco violated the Pennsylvania Human Relations Act by terminating her employment because of her discussions with co-workers about the alleged sexual harassment that had occurred in 1995. Elbeco filed the within motion for summary judgment on July 24, 2009. On September 21, 2009, the court deferred disposition of the motion to allow the parties to complete discovery. As stated, the motion was ultimately heard on April 22, 2010.

The court applies the following standard when deciding a motion for summary judgment:

“Summaiy judgment will be entered only where there is no genuine issue as to any material fact and it is clear that the moving party is entitled to a judgment as a matter of law. Skipworth v. Lead Industries Association Inc., 547 Pa. 224, 690 A.2d 169, 171 (1997). Summary judgment is proper in cases in which ‘an adverse party who will bear the burden of proof at trial has failed to produce evidence of facts essential to a cause of action or defense in which a jury trial would require the issues be submitted to a jury.’ Pa.R.C.P. 1035.2(2).” Jones v. SEPTA, 565, Pa. 211, 216, 772 A.2d 435, 438 (2001).

We note preliminarily that the record in this case was predominately compiled by deposition testimony, and that consideration of this deposition testimony is crucial for a full understanding of this case. Under the Nanty-Glo rule, based on the holding in Nanty-Glo v. American Surety Company, 309 Pa. 236, 163 A. 523 (1932), summary judgment is not generally granted where the record consists solely of oral testimony. However, the law does recognize an exception to this rule:

“The general rule flowing from Nanty-Glo v. American Surety Co., 309 Pa. 236, 163 A. 523 (1932), is that summary judgment may not be had where the moving party relies exclusively upon oral testimony, either through testimonial affidavits or deposition testimony, to establish the absence of a genuine issue of material fact. Where the moving party supports its motion for summary judgment by using the admissions of the opposing party, however, even though they are testimonial, Nanty-Glo does not forbid the entry of summary judgment. In such a situation, the court may grant the motion without determining the credibility of the testimony, for it is an ‘unconditional surrender’ by the opposing party, to which he must be held. See Garcia v. Savage, 402 Pa. Super. 324, 586 A.2d 1375, 1378 (1991).” Bowe v. Allied Signal Inc., 806 A.2d 435, 440 (Pa. Super. 2002).

After review of the record, and in particular Fisher’s testimony at deposition, we are comfortable that this matter can proceed to summary judgment without violating the Nanty-Glo rule.

Our analysis is governed by the United States Supreme Court case of McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973).

“First, the plaintiff bears the initial burden of establishing aprima facie case of discrimination. Reeves v. Sanderson Plumbing Products Inc., 530 U.S. 133, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000); Jacques [v. Akzo International Salt Inc., 422 Pa. Super. 419, 619 A.2d 748 (1993)]. The burden on the plaintiff of presenting a prima facie case under McDonnell Douglas is ‘minimal. ’ James v. New York Racing Association, 233 F.3d 149, 153 (2d Cir. 2000). If the plaintiff cannot meet this minimal burden, the employer is entitled to judgment as a matter of law. See Pivirotto v. Innovative Systems Inc., 191 F.3d 344, 352 n.4 (3d Cir. 1999).

“If the plaintiff does establish a prima facie case, a presumption of discrimination arises, and the burden of production shifts to the employer to articulate a legitimate, nondiscriminatory reason for the challenged employment decision. Reeves, supra; Jacques, supra. The employer’s burden in this second part is one of production, not persuasion, and thus involves no credibility assessment. Reeves, supra. If the employer articulates a legitimate business explanation, ‘then the presumption of discriminatory intent created by the employee’s prima facie case is rebutted and the presumption simply “drops out of the picture.” ’ Seman v. Coplay Cement Co., 26 F.3d 428, 432 (3d Cir. 1994) (quoting St. Mary’s Honor Ctr. v. Hicks, 509 U.S. 502, 511, 113 S.Ct. 2742, 125 L.Ed.2d 407 (1993)).

“If the employer satisfies its burden of production, the third and final part of the McDonnell Douglas framework gives the plaintiff the opportunity to show that the legitimate reasons proffered by the employer were pretexts for what, in reality, was a discriminatory motivation. See Simpson v. Kay Jewelers, 142 F.3d 639, 644 n.5 (3d Cir. 1998). In the pretext discrimination case, ‘the employer need not prove that the tendered reason actually motivated its behavior, as throughout this burden-shifting paradigm the ultimate burden of proving intentional discrimination always rests with the plaintiff.’ Fuentes v. Perskie, 32 F.3d 759, 763 (3d Cir. 1994).” Kroptavich v. Pennsylvania Power and Light Company, 795 A.2d 1048, 1055 (Pa. Super. 2002)

Fisher claims she is the victim of retaliatory discharge. Section 5(d) of the Pennsylvania Human Relations Act, 43 P.S. §955(d), defines as an unlawful discriminatory practice “For any person, employer, employment agency or labor organization to discriminate in any manner against any individual because such individual has opposed any practice forbidden by this act, or because such individual has made a charge, testified or assisted, in any manner, in any investigation, proceeding or hearing under this act.”

As stated in McDonnell Douglas, supra, to prevail Fisher must first establish a prima facie case of retaliatory discharge. A prima facie case for retaliatory discharge requires a finding of three elements:

“(1) he engaged in a protected activity; (2) he was discharged subsequent to or contemporaneously with such activity; and (3) there is a causal link between the protected activity and the discharge. Griffiths v. CIGNA Corp., 988 F.2d 457, 468 (3d Cir.), cert. denied, 510 U.S. 865, 114 S.Ct. 186, 126 L.Ed.2d 145 (1993). ‘Protected activity’ includes informal protests of discrimination such as complaints to management. Harris v. SmithKline Beecham, 27 F. Supp.2d 569 (E.D. Pa. 1998)(citing Barber v. CSX Distribution Services, 68 F.3d 694, 702 (3d Cir. 1995)).” Bailey v. Storlazzi, 729 A.2d 1206, 1214 n.9 (Pa. Super. 1999).

Regarding the first element, Fisher maintains that she was fired for engaging in protected activity. Notably, the claimed protected activity is not identified as the complaint occurring in 1995 but instead is an argument that subsequent discussions about the 1995 complaint is itself a protected activity.

David Lurio testified at his deposition that on the day of Fisher’s termination in 2003, he was briefed by Anne Conway and Elbeco’s Vice President A.J. Matthews about the 1995 incident. (Lurio deposition, p. 25.) He said that was the first time he had learned about this incident. (Lurio deposition, p. 26.) At that time, Ms. Conway and Mr. Matthews told Mr. Lurio that Fisher was harassing Nancy Haas and talking to fellow employees about Haas’ sexual preference, as well as the bathroom incident that had occurred eight years previously. (Lurio deposition, pp. 32, 35.)

Mr. Lurio testified that Fisher began creating problems for Nancy Haas and other employees after Fisher was not considered for the lead position. (Lurio deposition, p. 64.) Mr. Lurio also stated Fisher did not complain about sexual harassment any time prior to her termination. (Lurio deposition, p. 65.)

At the discharge meeting, Mr. Lurio told Fisher that the environment was becoming increasingly hostile and intimidating and other employees within the building were feeling the stress. (Lurio deposition, pp. 67-68.) Mr. Lurio also told Fisher that at the time of the 1995 bathroom incident, she was directed to not talk about it again but Fisher ignored this directive. (Lurio deposition, pp. 35-36, 38.) Fisher was then discharged for creating a hostile environment and harassing an employee by discussing her sexual preference.

In Fisher’s desposition, she testified that after 1995 or early 1996, she never complained to anyone at Elbeco about sexual harassment. During her two meetings with Mr. Lurio before her discharge, she never complained of sexual harassment, but spoke of Nancy Haas’ retaliation, her “nitpicking” behavior, and of being constantly watched and monitored. After 1996, Fisher never filed a written complaint with Human Resources or the Vice President of Manufacturing about retaliation.

Fisher admits that at her termination meeting on July 30, 2003, Mr. Lurio said he had learned Fisher was discussing a complaint that had arose eight years previously and was not to be discussed. Fisher admits that Mr. Lurio told her that her actions in this regard were causing a stressful work environment for her co-workers, cause for immediate dismissal. Significantly, Fisher testified that she told Mr. Lurio at this time that she had never spoken about the incident and was surprised he was “believing these lies.”

Applying the McDonnell Douglas standard, Fisher was not engaged in a protected activity at the time she was discharged. To establish a protected activity, she would have to prove that she was involved in activity that opposed discriminatory practices, here, sexual harassment. Her discussions with co-workers concerning the 1995 incident did not constitute opposition to a present or ongoing discriminatory employment practice. Instead, she was merely talking about an episode from the past. Further, by denying to Mr. Lurio that she spoke to anyone about the 1995 incident, Fisher admitted that even if discussions of that type are protected, she, nevertheless, did not engage in any protected activity. Accordingly, the first element of the prima facie case was not present.

Likewise, the second element of a retaliatory discharge claim has not been shown. The only allegedly discriminatory employment practice was the 1995 sexual harassment claim made by Fisher against Haas. However, Fisher’s discharge did not stem from that claim, nor was it contemporaneous. She was discharged eight years later, and for an entirely different reason.

Finally, even assuming the discussions are considered protected activity, there is no causal or retaliatory link between this activity and Fisher’s discharge.

“Even if timing alone could ever be sufficient to establish a causal link, we believe that the timing of the alleged retaliatory action must be ‘unusually suggestive’ of retaliatory motive before a causal link will be inferred. Robinson [v. City of Pittsburgh], 120 F.3d [1286] at 1302 [(3d Cir. 1997)]. We have also held that the ‘mere passage of time is not legally conclusive proof against retaliation.' Robinson v. SEPTA, 982 F.2d 892, 894 (3d Cir. 1993). When temporal proximity between protected activity and allegedly retaliatory conduct is missing, courts may look to the intervening period for other evidence of retaliatory animus. For example, in SEPTA, we stated: ‘The temporal proximity noted in other cases is missing here and we might be hard-pressed to uphold the trial judge’s finding [of causal link] were it not for the intervening pattern of antagonism that SEPTA demonstrated.’ Id. at 895 (internal citation omitted); accord Woodson [v. Scott Paper Co.], 109 F.3d [913], at 920-21 [(3d Cir. 1997)].” Krouse v. American Sterilizer Co., 126 F.3d 494, 503-504 (3d Cir. 1997).

Flere, there is an extensive passage of time. Further, there is no pattern of antagonism, merely two complaints by Fisher to management about “nit-picking” behavior and undefined retaliation. The third element of retaliatory discharge has not been established.

In essence, Elbeco did not fire Fisher because she was “resisting or contending against” illegal employment practices. Rather, her employment was terminated because she was speaking about Ms. Haas’ sexual identity to other employees and continuing to rehash the 1995 episode, all of which caused a stressful work environment.

Fisher has failed to meet her burden of proving a prima facie case of retaliatory discharge required by the McDonnell Douglas analysis. Accordingly, we will grant summary judgment.

ORDER

And now, June 9, 2010, after argument held, it is hereby ordered that defendant, Elbeco Inc.’s, motion for summary judgment is granted and judgment is entered in favor of the defendant, Elbeco Inc., and against plaintiff, Shirley Fisher.

Plaintiff’s counter motion for summary judgment is denied.

      . On May 21,2010, Fisherfiled a cross motion for summary judgment. Our ruling on Elbeco’s motion renders Fisher’s motion moot and, accordingly, the motion shall be denied.

      . In his deposition, David Lurio testified he did not know a Robert Pavalucci but that a Robert Cavalucci worked at Elbeco in 1995 as vice president of manufacturing. (Lurio deposition, p. 59.)

      . The United States Supreme Court in Crawford v. Metropolitan Government of Nashville, 129 S.Ct. 846 (2009), interpreted identical language found at title 42 U.S.C. §2000e-3(a). The court defined the term “oppose” to carry the original dictionary meaning of “resisting or contending against” and did not require active or instigating behavior.

      . Mr. Lurio admitted Fisher did not break any company rules by discussing the 1995 incident. (Lurio deposition, p. 35.)

      . Fisher cites this statement of Mr. Lurio in support of her position.


author: LUNSFORD, J.,

text:
    Burns v. Drier

      Andrew Barbin, for plaintiffs.

      Joseph S. D. Christof, II, for defendants.
    June 11, 2010
   LUNSFORD, J.,

Plaintiffs Ronald Bums and Cynthia Bums filed an action against defendants Marc S. Drier and Drier and Dieter Law Offices in legal malpractice, breach of contract and breach of fiduciary obligation. Defendants filedpreliminaiy objections to plaintiffs’ complaint which are presently before this court. For the following reasons, defendants’ preliminary objections are overruled in part and sustained in part.

BACKGROUND

This matter arises from a suit filed in 2006 at Centre County docket number 2006-0111 by plaintiffs against Westfield Insurance Company relating to restoration services following a house fire in plaintiffs’ home on July 3,2004.

On August 6,2009, plaintiffs filed a writ of summons in the above-captioned matter. On September 11, 2009, defendants filed a praecipe for rule to file complaint. On October 1,2009, plaintiffs filed a complaint averring, in essence, that the breach of contract and bad faith claims in the underlying action were meritorious but “were not pursued effectively and the settlement amounted to little more than a capitulation forced by defendant Drier’s complete failure to prosecute the claim or prepare it for the then impending trial.” Plaintiffs’ brief in opposition to preliminary objections, 3/12/2010, at 2. On February 2,2010, defendants filed preliminary objections to plaintiffs’ complaint which are now before this court. Both parties submitted briefs regarding the preliminary objections.

DISCUSSION

Preliminary objections should be sustained in cases which are clear and free from doubt. Rivello v. New Jer sey Automobile Full Insurance Underwriting Association, 432 Pa. Super. 336, 638 A.2d 253 (1994). In deciding preliminary objections, the court must consider the evidence in a light most favorable to the non-moving party. Id.

A complaint must set forth the material facts upon which a claim, is based in concise and summary form. Pa.R.C.P. 1019(a). Pa.R.C.P. 1019(f) states that “[ajverments of time, place and items of special damage shall be specifically stated.” In determining sufficiency of the pleadings in a complaint, the court will consider “whether the plaintiff’s complaint informs the defendant with accuracy and completeness of the specific basis on which recovery is sought so that he may know without question upon what grounds to make his defense.” Rambo v. Greene, 906 A.2d 1232, 1236 (Pa. Super. 2006).

In considering preliminary objections to a complaint in the nature of demurrer, all well-pleaded material facts set forth in the complaint are admitted as true as well as all inferences reasonably deducible therefrom, but not the pleader’s conclusions of law. Clevenstein v. Rizzuto, 439 Pa. 397, 400-401, 266 A.2d 623, 624-25 (1970). In determining whether or not a demurrer should be sustained, two standards must be borne in mind: (1) upon the facts averred, does the law say with certainty that no recovery is permitted; and, (2) “where a doubt exists as to whether a demurrer should be sustained, [it] should be resolved in favor of overruling it.” Id. (citations omitted) “[A] complaint which, when read as a whole, states enough ultimate facts to support liability, even if only in the most general terms, survives demurrer.” Village at Camelback v. Carr; 371 Pa. Super. 452, 465, 538 A.2d 528, 534 (1988). (citation omitted)

I. Lack of Specificity Regarding “Case Within a Case ” Requirement in Legal Malpractice Claim Under Pa.R.C.R 1028 (a)(3) and 1019 (a)

Defendants argue that plaintiffs must prove they had a viable cause of action against the defendant (Westfield Insurance Company) in the underlying case and that defendant Drier was negligent in prosecuting or defending the underlying case (commonly referred to as proving a “case within a case”). Defendants argue plaintiffs must ultimately prove that the underlying action against the contractor and insurance company was a viable case and that plaintiffs would have recovered but for some act or omission of defendants. See Kituskie v. Corbman, 552 Pa. 275, 714 A.2d 1027 (1998).

A legal malpractice claim requires that a plaintiff establish: (1) the employment of the attorney or other basis for a duty; (2) failure of the attorney to exercise ordinary skill and knowledge; and, (3) that the attorney’s negligence was the proximate cause of damage to plaintiff. Id. at 281, 714 A.2d at 1029 citing Rizzo v. Haines, 520 Pa. 484, 499, 555 A.2d 58, 65 (1989). The Pennsylvania Supreme Court in Kituskie further provided: “In essence, a legal malpractice action in Pennsylvania requires the plaintiff to prove that he had a viable cause of action against the party he wished to sue in the underlying case and that the attorney he hired was negligent in prosecuting or defending that underlying case (often referred to as.proving a ‘case within a case’).” Id. at 281, 714 A.2d at 1030.

Upon review of the pleadings, this court determines defendants have pled the essential three elements in a legal malpractice claim and the factual averments are sufficient to allow defendants to prepare an answer. Therefore, defendants’ preliminary objection is overruled.

II. Lack of Specificity Regarding Averments of Time, Place and Items of Special Damages Under Pa.R. C.P 1028 (a)(3) and 1019 (a)

Defendants argue that plaintiffs’ complaint fails to specifically plead facts related to the legal representation provided by defendants, particularly averments of time and special damages. Defendants further argue that without a more specific complaint, they cannot determine when the causes of action, if any, arose or otherwise properly prepare defenses which may be available.

Plaintiffs’ requests for “such other relief as the court may deem just” amounts to a claim for special damages. See Hooker v. State Farm Fire and Casualty Company, 880 A.2d 70, 77 (Pa. Commw. 2005). According to the court in Hooker, “[sjpecial damages are those that are not the usual and ordinary consequences of the wrong done but which depend on special circumstances.” Id. The Pennsylvania Rules of Civil Procedure require that items of special damages be specifically pled. Pa.R.C.P. 1019(f). The court in Hooker provided, “special damages may not be proved unless special facts giving rise to them are averred.” Id. at 77 citing Laing v. Colder, 8 Pa. 479 (1848). Because of plaintiff’s failure to provide defendants with specific facts upon which special damages should be granted, defendants are unable to ascertain why plaintiffs are seeking special damages. Additionally, there is a lack of specificity regarding averments of time. Therefore, because the request for special damages is inadequately plead and averments of time lack specificity, defendants’ preliminary objection is sustained.

TIT. Failure To State a Cause of Action Upon Which Relief Can Be Granted Regarding Count II (Breach of Contract) and III (Breach of Fiduciary Obligation), Under Pa.R.C.P. 1028 (a)(4), Demurrer

a.) Breach of Contract

Defendants argue that plaintiffs failed to allege that defendants violated a specific instruction or provision of the engagement agreement. Plaintiffs respond that Gorski v. Smith, 812 A.2d 683 (Pa. Super. 2002) remains controlling precedent. In Gorski, the Superior Court found it was not necessary for a plaintiff to allege a breach of specific instruction. Therefore, this court determines averments that the attorney violated specific instructions are not necessary in a breach of contract action for legal malpractice and defendants’ preliminary objection is overruled.

b.) Breach of Fiduciary Obligation

Defendants argue that Count III of plaintiffs’ complaint sounding in breach of fiduciary obligation is nothing more than an attempt to recast the general negligence •averments and because it is tangential to the professional malpractice claim sounding in negligence it does not give rise to an independent cause of action. Plaintiffs argue the breach of fiduciary obligation claim is essentially a Maritrans claim. See Maritrans GP Inc. v. Pepper, Hamilton & Scheetz, 529 Pa. 241, 602 A.2d 1277 (1992). Plaintiffs further argue “[t]he breach of fiduciary duty is a specific tortious breach when an ethical obligation arising from contractual relations prevents self-dealing, and the offending party breaches that duty.” Plaintiffs’ brief in opposition to preliminary objections, 3/12/2010, at 12. This court determines plaintiffs have pled sufficient facts to survive demurrer and; therefore, defendants’ preliminary objection is overruled.

IV. Claims for Punitive Damages Under Pa.R.C.P 1028 (a)(4), Demurrer

Defendants contend that plaintiffs failed to provide any averments of willful, wanton, or malicious conduct necessary for a successful claim for punitive damages. Plaintiffs respond that they are not seeking punitive damages on the negligence and contract counts but only as to the breach of fiduciary obligation count. Plaintiffs allege the defendant Drier “violated ethics rules and used his financial leverage over the Burns and false assurances to coerce consent to settlement after his incompetence had made settlement necessary.” Plaintiffs’ brief in opposition to preliminary objections, 3/12/2010, at 13.

Punitive damages are not recoverable for mere negligence or even gross negligence; they are reserved for conduct that is outrageous due to evil motive or reckless indifference for the rights of others. See SHV Coal Inc. v. Continental Grain Co., 526 Pa. 489, 587 A.2d 702 (1991) (adopting Restatement (Second) of Torts §908). Punitive damages are reserved for cases where defendant’s actions are so outrageous as to demonstrate willful, wanton or reckless conduct. Id at 493, 587 A.2d at 704. An allegation of evil motive or reckless indifference must be supported by specific fact averments. See Pa.R.C.P. 1019; McDaniel v. Merck, Sharp & Dohme, 367 Pa. Super. 600, 533 A.2d 436 (1987). Upon review of the complaint, this court determines plaintiffs have not pled sufficient facts or specific details regarding defendant Drier’s conduct to support a claim for punitive damages; therefore, defendants’ preliminary objection is sustained.

ORDER OF COURT

And now, June 11, 2010, upon consideration of the preliminary objections filed by defendants Marc S. Drier and Drier and Dieter Law Offices and the briefs regarding the same, the preliminary objections are hereby overruled in part and sustained in part. Plaintiffs shall have 30 days to file an amended complaint in accordance with the above opinion.