author: ANDERSON, J.,

text:
    John Savoy & Son, Inc. v. Seyler

      J. David Smith, for plaintiff.

      Ryan M. Tira, for defendant.
    May 12, 2014-
   ANDERSON, J.,

OPINION AND ORDER

Before the court is plaintiff’s petition for preliminary injunction, filed contemporaneously with their complaint in law and equity on May 6, 2014. A hearing on the petition was held May 12, 2014. The parties requested an opportunity to file briefs following the hearing; such were filed May 19, 2014.

Defendant was previously employed by plaintiff (hereinafter “Savoy”) from June 4, 2012, through March 6, 2014, as a sales manager. Savoy is in the business of manufacturing, selling and distributing furniture for the university/college residence hall and military housing markets. In March 2013, Savoy became aware that defendant had used a company credit card for his own personal use and, as a result of discussions between the parties, Savoy allowed defendant to continue his employment there in exchange for several considerations from defendant, including signing an agreement (dated April 5,2013) which contained a covenant not to compete. In March 2014, defendant was terminated for refusing to submit to a drug test, which refusal was contrary to his agreement (in the April 5, 2013, agreement) to do so. In early April 2014, Savoy learned that defendant had taken a sales position with Blue Furniture Solutions, which Savoy alleges is in direct competition with Savoy, in violation of the covenant not to compete. The instant petition seeks a preliminary injunction enforcing the covenant and preventing defendant from competing with Savoy or disclosing any confidential or proprietary information or trade secrets of Savoy.

The covenant at issue provides that “during the time that employee is employed by Savoy and for a period of two (2) years after employee cease to be employed by Savoy, whether by resignation by employee, wrongful discharge, or otherwise, employee shall not, directly or indirectly, either as an individual or on his own account, or as a partner or joint venture, or as an employee, agent, or salesperson for any person or business entity, or as an officer, director, or stockholder of a corporation, or otherwise, enter into or engage in any activity or business in competition with Savoy relating to the manufacturing, distribution, or sale of furniture for the university or college residence hall or military housing markets anywhere within the United States and world-wide as it relates to U.S. military bases.” Defendant also agreed to “not contact any person, firm, or other entity currently or formerly engaged in any business with Savoy,” “not to disclose any trade secrets, confidential information, intellectual property, customer lists, or other like information concerning Savoy,” and not to “render to others services which are the same or similar to the services rendered by employee to customers of Savoy.” As noted above, Savoy now contends that defendant’s employment with Blue Furniture Solutions is in violation of the covenant not to compete inasmuch as Blue Furniture Solutions is a direct competitor of Savoy and defendant is performing the same function for Blue as it performed for Savoy. Defendant argues in response that the covenant is unenforceable due to duress, defendant having been terminated by Savoy, and the covenant being overly broad.

With respect to the issue of duress, defendant argues he was not given the opportunity to consult with counsel and, moreover, the threat of prosecution if he did not sign it constituted duress, rendering the agreement voidable. Defendant points to the following language of the agreement: “[w]hereas, Savoy is willing to consider the continued employment of employee and a deferral of prosecution of any charges arising out of the misuse of the credit card, but subject only to employee’s full, timely, and comprehensive compliance with the terms set forth in this agreement and with whatever other employment obligations might arise for the employee in the ordinary course of Savoy’s business.” The court agrees that an agreement not to prosecute a criminal proceeding is “emphatically illegal,” Corbin on Contracts, Volume 7, Section 28.4, and the threat of criminal prosecution constitutes duress which renders a contract voidable. Germantown Manufacturing Company v. Rawlinson, 491 A.2d 138 (Pa. Super. 1985). A transaction that is voidable for duress may be enforceable nevertheless, however, if it is ratified. Corbin on Contracts, Volume 7, Section 28.8. “Ratification results if a party who executed a contract under duress accepts the benefits flowing from it, or remains silent, or acquiesces in the contract for any considerable length of time after the party has the opportunity to annul or avoid the contract.” National Auto Brokers Corporation v. Aleeda Development Corporation, 364 A.2d 470, 476 (Pa. Super. 1976). In the instant case, the court finds that defendant ratified the contract by accepting its benefits (continued employment and the $1000 payment) and remaining silent about the issue for a year. The agreement is thus not unenforceable on this basis.

Defendant also argues the covenant is unenforceable because he was terminated, and points to Savoy’s president’s testimony that he was considered a “liability” to the company. While enforcement of restrictive covenants is generally disfavored against employees who are fired, on the theoiy that the employer views such employees as worthless, Insulation Corporation of America v. Brobston, 667 A.2d 729 (Pa. Super. 1995), enforcement is to be determined on a case by case basis and the mere termination of an employee does not bar the employer’s right to injunctive relief. All-Pak, Inc. v. Johnston, 694 A.2d 347 (Pa. Super. 1997). In the instant case, defendant was terminated not because Savoy considered him worthless as a salesman, but because he was engaging in activity which violated company policies. In such instance, the employer’s right to injunctive relief survives. Id.

Finally, defendant contends the covenant is overly broad and not reasonably related to Savoy’s legitimate business interests. The court does not agree. Testimony established that Savoy does business in all fifty of the United States, and with respect to the military, worldwide. Although Savoy’s products are more expensive than Blue’s products, during defendant’s tenure with Savoy, Savoy was (and continues to be) in the process of developing a less expensive product to compete with companies like Blue. As an employee of Blue, defendant is selling the same product (furniture for student housing) to the same types of buyers (colleges and universities); defendant testified that since becoming employed by Blue, he has contacted quite a few of the representatives who sell for Savoy and offered them information relative to selling for Blue.

The court also rejects defendant’s argument that defendant’s “ability to provide for his family and work in an industry in which he has familiarly (sic) and experience outweighs Savoy’s interest in prohibiting [defendant] from competing in an adjacent furniture market.” Defendant’s introductory letter to Savoy of March 29,2012, represents that he has “years of experience in strategic/business development managing multiple vendor, client and staff relationships, and managing P&L to achieve and exceed targeted objectives,” but that he “will have a small learning curve in regards to the commercial furniture field,” thus belying his implication that he will be “put out of work” if he is not permitted to continue employment with Blue. And, as already indicated, the court finds the markets to be co-extensive, not adjacent.

It should be noted, in conclusion, that in the agreement, defendant agreed that “the geographical and time limitations set forth [in the agreement] are reasonable and properly required for the adequate protection of Savoy’s interests” and that “the remedy at law for any breach by him of the covenants” would be “inadequate” and that Savoy would “have the right to enjoin” him from activities in violation thereof. Defendant is thus estopped from arguing to the contraiy.

ORDER

And now, this day of May 2014, for the foregoing reasons, the petition for preliminary injunction is hereby granted. Until further order of court or agreement of the parties, (a) defendant is precluded from working in direct competition of Savoy & Son, Inc. within the United States (and world-wide as relates to U.S. military bases), and (b) defendant is precluded from disclosing any confidential, proprietary information or trade secrets of John Savoy & Son, Inc. to any third party. This order shall be effective upon the posting by Savoy & Son, Inc., with the prothonotary of Lycoming County, of a bond in the amount of (twenty thousand dollars) $20,000.00.

      . Although in the introductory portion of his brief defendant also mentions lack of consideration, he does not follow-up on that issue in the discussion portion. In any event, the court would find sufficient consideration in Savoy’s willingness to continue defendant’s employment in spite of his having stolen from them.


source: Caselaw Access Project

author: MCINERNEY, J.,

license: Public Domain

text:
    Belgravia Condominium Association v. 1811 Belgravia Associates

      Amit Shah, Ronald L. Williams, Robert S. Tintner and Peter C. Buckley, Jr., for plaintiff.

      Annrew Fylypovych, Raymond A. Quaglia, Ira B. Silerstein, Anexandre N. Turner, Andrew J. Fuga, George Bochetto, David P. Heim, John A. O’Connell, Lisa B. Swaminathan, John B. Kearney, Carl G. Roberts, Jon C. Sirlin and Nicholas Deenis, for defendants.
    May 14, 2014
   MCINERNEY, J.,

— This appeal opinion is submitted relative to this court’s denial of defendant O’Donnell & Naccarato’s (hereinafter “O&N”) post trial motion on November 27, 2013. The Belgravia defendants retained defendant O’Donnell & Naccarato (hereinafter “O&N”), a professional engineering firm, to inspect the Belgravia Building, a building being converted to a condominium, and report its finding pursuant to the Uniform Condominium Act, 68 Pa. C. S. §§ 3404, 3411.

The Uniform Condominium Act required the Belgravia defendants to retain an independent architect or engineer to report on the present condition of all structural components and fixed mechanical and electrical installations in the conversion building. O&N was retained to inspect the Belgravia Building for “visible structural and mechanical defects and for other visible conditions that adversely affect the health or safety of residential occupants.” The condominium act defines “structural defects” as those defects in components constituting any unit or common element which reduce the stability of the structure below accepted standards or restrict normal intended use of all or part of the structure and which require repair, renovation, restoration or replacement. Nothing in this section shall be construed to make the declarant responsible for any items of maintenance relating to the units or common elements.

O&N submitted its report to the Belgravia defendants. The original report was subsequently revised by O&N. The revised report minimized certain defects and eliminated others. The revised report was attached to the public offering statement and was relied upon by the unit owners when purchasing the individual units.

The Belgravia Condominium Association (“The association”) instituted an action for professional negligence and breach of contract against defendant O&N for its failure to properly inspect the building and report its findings. The matter was tried before a jury wherein the parties presented the testimony of numerous witnesses including experts. During the trial, the association chose to precede against defendant O&N only on a theory of professional negligence. As such, the association, with the consent and agreement of O&N, did not present a claim against O&N for breach of contract to the jury.

After a two week trial, the jury entered its verdict and found that the Belgravia defendants breached the Pennsylvania Uniform Condominium Act (“UCA”) and their fiduciary duty to the association. The jury awarded the association $3,800,000 in compensatoiy damages and $900,000 in punitive damages on the claims against the Belgravia defendants. The jury also found against defendant O&N and awarded the association $350,000 for O&N’s professional negligence.

On July 1, 2013, O&N filed a motion for post trial relief seeking judgment N.O.V. (“JNOV”). As additional relief, defendant O&N requested the court to mold or modify the verdict so as to reduce the verdict proportionately by 92% or to the cost of repairing said conditions to the cost that existed in 2006.

On August 26, 2013, defendant O&N filed its memoranda of law in support of its motion for post trial relief. On November 26, 2013, after oral argument, the court denied defendant O&N’s motion for post trial relief. On December 12, 2013, defendant O&N filed a notice of appeal of this court’s order dated November 26, 2013. On January 2, 2014, the association marked as settled, discontinued and ended all claims against the Belgravia defendants. On January 30,2014, O&N filed another notice of appeal appealing this court’s order dated January 2, 2014 marking all claims against the Belgravia defendants as settled, discontinued and ended. Defendant O&N notes in its latter filed notice of appeal that the January 2, 2014 order made the order of November 27, 2013 final and appealable. Since the notices of appeal pertain to the same order dated November 27, 2013, this opinion is submitted relative to both appeals.

DISCUSSION

It is axiomatic that, “[tjhere are two bases upon which a JNOV can be entered: one, the movant is entitled to judgment as a matter of law, and/or two, the evidence was such that no two reasonable minds could disagree that the outcome should have been rendered in favor of the movant.” While the opportunity to move for JNOV typically is preserved by the filing of a motion for a directed verdict, the right to seek JNOV likewise is preserved by filing a motion, objection, point for charge, request for findings of fact and conclusions of law, offer of proof or other appropriate method at trial.

In reviewing a motion for JNOV, the court must consider the evidence in the light most favorable to the verdict winner, who must receive the benefit of every reasonable inference of fact arising therefrom, and any conflict in the evidence must be resolved m his favor. Finally, a judge’s appraisement of evidence is not to be based on how she would have voted had she been a member of the jury, but on the facts as they come through the sieve of the jury’s deliberations. The entry of a JNOV is a drastic remedy and a court cannot lightly ignore the findings of a duly selected jury.

A. O&N failed to Preserve any Request for JNOV

In the case sub judice, the association argues that O&N waived its right to move for JNOV when it failed to move for a directed verdict or object to the verdict at the close of trial. In order to preserve an issue for review, litigants must make timely and specific objections during trial and raise the issue in post-trial motions. Requiring a litigant to make a timely, specific objection during trial ensures that the trial court has a chance to correct alleged trial errors. Pursuant to Pa. R. Civ. P. 227.1 post-trial relief may not be granted unless the grounds,

If then available, were raised in pre-trial proceedings or by motion, objection, point for charge, request for findings of fact or conclusions of law, offer of proof or other appropriate method at trial; and ....

During oral argument on the post trial motion, O&N argued it preserved its right to ask for a directed verdict in a jury instruction which the court denied. Post-trial relief may not be granted unless the grounds therefore, if available, were raised by an appropriate method at trial. In the case at hand, defendant O&N’s proposed jury instruction for directed verdict was not part of the record and therefore defendant O&N did not properly preserve the issue for review.

Defendant O&N did provide the court with a copy of their proposed jury instruction but did not read the instruction in the record nor filed the instruction in the office of the prothonotary before filing its motion for post trial relief as required by Pa. R. Civ. P. 226. Defendant O&N had an obligation to make sure the record herein contained those documents necessary to allow a complete and judicious assessment of the issues to be addressed on appeal. Since the proposed jury instruction requesting a directed verdict was not made a part of the record, defendant O&N’s request for post trial relief based on a JNOV is waived.

B. The Association presented evidence that O&N breached the Professional Engineering Standard of Care and caused harm to the Association.

Assuming arguendo defendant O&N preserved its right to seek JNOV, this court’s ruling denying its request should nonetheless be upheld. Defendant O&N argued that the association failed to prove it breached a standard of engineering care by failing to properly identify and document “visible structural defects” as defined in 68 Pa. C. S. § 3411 (a) and failed to prove such defects existed in the May-June 2006 time frame. This court does not agree.

The sole claim presented and tried against defendant O&N was the claim for professional negligence. As such, the question posed to the jury was whether defendant O&N breached the standard of care applicable to professional engineers. The jury was instructed as follows:

The association claims that O&N was negligent and breached the standard of care when it prepared the independent engineering report pursuant to the Uniform Condominium Act....
Your must decide whether O&N was negligent in failing to identify any visible, structural or mechanical defects or other physical conditions that adversely affect the health and safety of the association’s members and/ or failing to identify the useful life of all structural components and major utility installations and the estimated replacement costs of each....
The association also claims that O&N breached the standard of care when it prepared the independent engineering report pursuant to the Uniform Condominium Act. If you find that O&N failed to meet the standard of care when preparing the statement pursuant to the Uniform Condominium Act, then you must find O&N was negligent. If you find that O&N met the standard of care when it prepared the statement pursuant to the Uniform Condominium Act, then you find that O&N was not negligent.

A review of the record demonstrates that sufficient evidence existed for the jury to consider, weigh and find that defendant O&N breached its engineering duty of care when it inspected the Belgravia Building. The association offered the testimony of three experts, Mr. McCoy, a professional engineer, Mr. Nevel, a professional engineer, and Mr. Payne, a construction estimator. Specifically, McCoy testified that O&N failed to have a licensed engineer perform the assessment, write the report and conduct a sufficient visual assessment. According to McCoy, had a licensed engineer visited the site or seen the photos, they would have seen the obvious red flags and investigated further. The obvious red flags were the cracks in the mortar joints of the building visible in photographs taken in 2006 which would have led it to discover distress in the facade, the corroded cast iron balconies on top of the terra cotta, the missing mortar joints and severe cracking in the mortar, and the rain water conductors that existed in 2006 and which caused severe water damage and corrosion to the building.

McCoy further testified that defendant O&N’s conduct was below the standard of care when it deleted and altered portions of its draft report and removed the sub-consultants reports as well as its failure to conduct an assessment pursuant to the Uniform Condominium Act by not reviewing public records of the building. In addition to the foregoing, evidence was presented from the historical society that the Building had code violations in 2006.

The other engineering expert offered by the association, nevel, testified that O&N failed to meet the standard of care with respect to O&N’s inspection of the electrical system, specifically as it pertains to the second electrical system.

Defendant O&N argues a lack of evidence existed as to the critical question of whether there were any visible structural defects or unsafe conditions at the Belgravia Building in 2006. However, the association’s expert testified that the conditions depicted in the 2006 photographs were again observed in 2011 with respect to the moving and deteriorated terra cotta, the moving and deteriorated facade, deteriorated balcony, deteriorated roof, deteriorated wrought iron, cracked masomy and cracked brick.

The experts did present evidence that those conditions affected the health, safety and welfare of the residents. McCoy and Payne testified that the facade was unsafe and that the movement of the terra cotta and the balconies were unsafe and would be of concern for the public health, safety and welfare.

In addition to the expert testimony, the fact witnesses testified that no professional engineer carried out the duties and responsibilities of defendant O&N. Although Mr. Beebee, a professional engineer employed by O&N, signed the report he testified that he never actually looked at the Belgravia Building. Instead, Ms. Duncheskie, an engineer in training for O&N, prepared and assembled the report.

The associations’ experts also testified that the breach of the professional standard of care caused it to suffer harm. McCoy testified that O&N’s deletions and alterations to the draft report caused the association significant damages as a result of unaccounted for expenses, including but not limited to $287,000 in elevator repairs, $41,448 for providing an inadequate accessible entrance, $20,000 to repair steel platform and stairs, and $15, 000 to repair corroded beams and cracked concrete in the basement. He also testified the association would incur $222,808.30 to repair the roof and $65,600 to repair the structural defects in the building.,

Based on the foregoing, the court found that substantial evidence existed in the record for the jury to determine that O&N breached its professional engineering standard of care to the association in inspecting and preparing the report pursuant to the Uniform Condominium Act. Accordingly, the court properly denied defendant O&N’s motion for post trial relief on this issue.

C. The Economic Loss Doctrine does not bar claims for Professional Negligence.

Defendant O&N argues that the association’s professional negligence claim is barred by the economic loss doctrine because the sole losses alleged by the association are economic. Under settled Pennsylvania case law, a client may bring both a contract action and a tort action against a professional based on allegations that he or she failed to provide the client with professional services consistent with those expected of the profession. No Pennsylvania courts have applied any of the doctrines barring tort recovery in relationships arising out of a contract, such as the economic loss doctrine or the gist of the action doctrine, to claims involving a professional’s failure to exercise the proper standard of care. Also, the economic loss doctrine does not apply to professional negligence actions where there is privity of contract. Pennsylvania has long recognized that purely economic losses are recoverable in a variety of tort actions including the professional malpractice actions. Based on the foregoing, the motion for post trial relief on this issue was properly denied.

D. An inherent inconsistency does not exist in the verdict.

Defendant O&N argues that an inherent inconsistency exists with the jury’s verdict in that the Belgravia defendants were not found to have breached warranties under the Uniform Condominium Act. According to defendant O&N, there is a complete lack of logic in this verdict because if the Belgravia defendants were found not to have breached their warranties under the Act, then there is no way that O&N could be held responsible for failing to properly report on defects which did not exist. However, no such inconsistency exists.

The association presented sufficient evidence for the jury to find that defendant O&N breached the professional engineering standard of care. The professional engineering standard of care breached by defendant O&N is independent from any duty that the Belgravia defendants owed to the association. The Belgravia defendants’ duty is statutory, while defendant O&N’s duty is based on common law. As such since no inconsistency exists, the motion for post trial relief was properly denied.

E. The Association did not present a breach of contract claim to the jury.

Defendant 0& N argued that there was no evidence presented warranting a contract recovery. Defendant O&N is correct that no evidence was presented regarding a claim for breach of contract. However, the association withdrew said claim at trial. As such no evidence was presented, no jury finding was made and therefore no limitation of damages should apply. Defendant O&N’s motion for post trial relief on this issue was properly denied.

CONCLUSION

For the forgoing reasons, this court’s order dated November 27, 2013 should be affirmed.

      . The Belgravia defendants refer to 1811 Belgravia Associates, LP, PMC/Belgravia Associates, LP, PMC Property Group, Ronald Caplan, Jerold J, Novick and Greg J. Webster.

      . 68 Pa. C. S. § 3404 (a)(1).

      .68 Pa. C. S. §3411.

      . 68 Pa. C. S. §3411.

      . Moure v. Raeuchle, 529 Pa. 394, 604 A.2d 1003, 1007 (1992) (citations omitted). Rohm & Haas Co. v. Cont’l Cas. Co., 566 Pa. 464, 471, 781 A.2d 1172, 1176 (2001).

      . See Pa.R.Civ.P. 227.1(b)(1); Hayes v. Donohue Designer Kitchen, Inc. 818 A.2d 1287, 1291 n. 4 (Pa.Super.2003) (“[C]ases indicate that in order to preserve the right to request a JNOV post-trial[,] a litigant must first request a binding charge to the jury or move for directed verdict at trial.”).

      . Rohm and Haas Co. v. Continental Casualty Co., 566 Pa. 464, 471-72, 781 A.2d 1172, 1176 (2001) (citations and quotation marks omitted).

      . Bugosh v. Allen Refractories Co., 932 A.2d 901, 907 (Pa. Super.2007) (citation omitted). Donoughe v. Lincoln Elec. Co. 936 A.2d 52, 61 (Pa. Super. Ct 2007)

      . Takes v. Metropolitan Edison Co., 548 Pa. 92, 695 A.2d 397, 400 (1997).

      . Dilliplaine v. Lehigh Valley Trust Co., 457 Pa. 255, 322 A.2d 114, 116 (1974).

      . N.T. October 15, 2013 p. 20.

      . See Pa.R.C.P. 227.1(b)(1).

      . N.T. June 18, 2013 p. 132, 334.

      . N.T. June 12, 2013 p.m., pp. 31- 32, 42-43.

      . N.T. June 12, 2013 p. 41-42.

      . N.T. June 12, 2103 p.m. pp. 31-32.

      . Id. p. 33, 35.

        .Id. 63, 64.

      . Id. at 44-45.

      . N.T. June 13, 2013 p. 82, 83.

      . N.T. June 12, 2013 p. 47-76.

      . N.T. June 12, 2013 p. 13, 14.

      . N. T. June 12, 2013 p. m. 67, 70.

      . N.T. June 12, 2013 p.m. p. 27-28.

      . The evidence presented demonstrated that the association incurred damages in excess of the amount of the jury’s compensation award and no basis exists to overturn the verdict.

      . See Gorski v. Smith, 812 A.2d 683, 693-94 (Pa. Super. 2002) (both breach of contract and professional negligence actions may be raised against an attorney who failed to provide professional services consistent with those expected of the profession).

      . Rapidigm, Inc. v. ATM Mgmt. Servs., LLC, 63 Pa. D. & C.4th 234, 240-41 (Com. Pl. 2003), citing e.g., Kituskie v. Corbman, 552 Pa. 275, 714 A.2d 1027 (1998); Rizzo v. Haines, 520 Pa. 484, 555 A.2d 58 (1989); Liberty Bank v. Ruder, 402 Pa. Super. 561, 587 A.2d 761 (1991).

      . Bilt-Rite Contractors, Inc. v. The Architectural Studio, 581 Pa. 454,483, 866 A.2d 270, 288 (2005).


author: HODGE, J.,

text:
    In re Estate of Navarra

      Frank G. Verterano, for plaintiff.

      Jonathan Solomon, for defendants.
    May 14, 2014
   HODGE, J.,

— This opinion is issued pursuant to Rule 1925(a) of the Pennsylvania Rules of Appellant Procedure in support of the opinion and order of court dated February 14, 2014 granting the petition for declaratory judgment filed on behalf of Chrystie Clarke (hereinafter “petitioner”). Richard E. Navarra (hereinafter, “respondent”) appeals from the February 14, 2014 order and contends that the court committed the following errors:

1. The court erred in relying upon language contained in the promissory note issued by Alleghany Group Incorporated rather than the stock purchase agreement in determining that the proceeds from the Alleghany Group, Inc. stock share proceeds were held as tenant by the entireties by Fred Navarra and Sandra Navarra.

2. The court erred by overlooking and/or disregarding evidence establishing that Fred Navarra and Sandra Navarra had severed the entireties ownership of the Alleghany Group, Inc. stock share proceeds.

Prior to addressing respondent’s matters complained of on appeal, the court will provide the following procedural and factual background of this case:

Fred Navarra and Sandra Roberts were married on December 30, 1983. They established a marital residence on Phillips School Road in Wilmington Township, Pennsylvania. Fred and Sandra both had children from prior marriages, and their union created an extensive blended family. Sandra eventually developed dementia, and Fred suffered severe physical injuries following an automobile accident in 2007. Fred and Sandra both relied on in-home caregivers to provide them with daily assistance. On January 29,2007, petitioner, was appointed as Sandra’s agent under a durable power of attorney. On May 14,2007, Nickolas F. Paolini was appointed as Fred’s agent under a durable power of attorney. On December 31, 2009, Mr. Paolini and petitioner executed a stock purchase agreement, wherein 160,807 shares of Allegheny Group, Inc. were sold for $2.41 per share. The funds received were intended to pay for costs associated with Fred and Sandra’s in-home care, and made payable in equal halves to Fred and Clarke, as Sandra’s agent.

Due to her mother’s dementia and Fred’s declining physical health, petitioner believed that Sandra was not receiving proper care at the marital residence, and petitioner moved Sandra into an assisted living facility on November 11, 2009. Fred opposed Sandra’s relocation, but lacked the physical willpower or legal authority to oppose petitioner’s decisions as her mother’s agent.

On December 11, 2012, petitioner filed a request for declaratory judgment at case number 100 of 2012, orphans’ court. Petitioner sought a determination regarding ownership of the remaining proceeds from the stock purchase agreement entered into by FredNavarra, petitioner and Allegheny Group, Inc. petitioner also requested title to a 2001 Mercury Sable, which was purchased by Fred and Sandra during their marriage, but titled in the name of Sanfred Management Company and used exclusively by Sandra until 2007. Following extensive hearings, this court ultimately determined that both the Mercury Sable and the Allegheny Group, Inc. stock proceeds were owned by Fred and Sandra Navarra as tenants by the entireties. From this determination, respondent appeals.

When reviewing the determination of the trial court in a declaratory judgment action, the appellate court’s scope of review is narrow. O’Brien v. Nationwide Mut. Ins. Co., 689 A.2d 254, 257 (Pa. Super. 1996) (citing Nationwide Mut. Ins. Co. v. Johnson, 676 A.2d 680, 682 (Pa. Super. 1996)). Declaratory judgment actions follow the practice and procedure of an action in equity. Id. Consequently, the decision of a lower court is treated as a decree in equity, and the factual conclusions of that court will be set aside only where they are not supported by adequate evidence. Id.

Respondent’s first matter complained of on appeal alleges that the court erred in relying upon language contained in the promissory note issued by Alleghany Group Incorporated rather than the stock purchase agreement. After review of this court’s February 18, 2014 opinion, the court finds respondent’s contention to be without merit. The court fully considered both the stock purchase agreement and promissory note when evaluating whether the proceeds from the Alleghany Group, Inc. stock share were held as tenant by the entireties by Fred Navarra and Sandra Navarra. As the finder of fact, the court determined that the language contained in the promissory note succinctly titled the debt to Fred Henry Navarra and Sandra Roberts Navarra as husband and wife. The court found this characterization to be dispositive of the issue as reliable and credible evidence that the stock proceeds where in fact held as tenant by the entireties. See In Re: Estate of Fred H. Navarra, No. 100 of 2012, O.C. pp. 14-17 (Law.Co. 2014).

The remaining matter complained of on appeal by Respondent contends that the court overlooked and/or disregarded evidence establishing that Fred Navarra and Sandra Navarra had severed the entireties ownership of the Alleghany Group, Inc. stock share proceeds. Again, after a review of this court’s February 18, 2014 opinion, the court believes that all the evidence submitted throughout the course of these proceedings was thoroughly evaluated prior to making a determination. The fact that the court found alternative evidence more persuasive in reaching its conclusion does not equate to reversible error.

For the foregoing reasons, the court is satisfied that this opinion in corroboration with its February 18, 2014 opinion, fully justifies its decision to grant petitioner’s request for declaratoiy judgment. Respondent’s appeal should therefore be denied in its entirety.

ORDER OF COURT

And now, this 14th day of May, 2014, the court having received respondent’s concise statement of errors complained of on appeal pursuant to Pa.R.A.P. 1925(b), the court hereby directs that the attached opinion be filed to satisfy the requirements of Pa.R.A.P. 1925(a). The Prothonotary of Lawrence County is directed to immediately assemble the record and transmit said record to the Superior Court of Pennsylvania as required by the applicable Rules of Appellate Procedure.

The prothonotary shall serve a copy of this order of court upon counsel of record for the parties.

      . Richard Navarra (formerly married to Chris Navarra), Linda D’Augostine, JoAnne Navarra and Charlene Navarra are the children of Fred H. Navarra. Chrystie Clark and Brent Young are the children of Sandra R. Navarra.


author: PICCIONE, J.,

text:
    Shenango Presbyterian Seniorcare v. Lawrence County Board of Assessment Appeals

      Michael Yukevich, Jr. and Chadd C. Colin, for plaintiff/petitioner.

      Thomas W Leslie, for defendant Lawrence County.

      John F. Salopek, for defendants New Wilmington Borough and Wilmington Area School District.
    May 21, 2014
   PICCIONE, J.,

— Before this court for disposition is the motion to enforce contribution in lieu of real estate taxes agreement of settlement (hereinafter, the “motion”) filed on behalf of the plaintiff/pettitioner, Shenango Presbyterian Seniorcare, a Pennsylvania non-profit corporation (hereinafter, the “petitioner”). On October 31, 2013, the petitioner filed the motion, wherein it requests this court enjoin the defendants/ petitioners, Lawrence County Board of Assessment and Appeals, Wilmington Area School District, New Wilmington Borough and Lawrence County (hereinafter, collectively, the “respondents”), from terminating or declaring ineffective the agreement entitled “Contribution in Lieu of Real Estate Taxes Agreement of Settlement,” which the parties entered into on December 4, 2007. The Respondents argue that the agreement was entered into by a predecessor Lawrence County Board of Assessment Appeals and has since expired. For the reasoning set forth below, the petitioner’s motion is denied.

The petitioner is a nonprofit organization located in New Wilmington, Lawrence County, Pennsylvania. Since its inception in 1968, the petitioner’s facilities had never been subject to real estate taxes until 2002 when it acquired additional property to construct independent living facilities. In 2004, the respondent, Lawrence County Assessor’s Office, gave notice that the new facilities were assessed for the payment of real estate taxes. The petitioner appealed this determination to the board of assessment appeals. Following a hearing on the matter, the board of assessment appeals denied the petitioner’s challenge to the assessment of real estate taxes, and the petitioner filed a further appeal with this court.

Prior to a determination on appeal, effective January 30, 2007, the petitioner and the respondents entered into an agreement entitled Contribution in Lieu of Real Estate Taxes Agreement of Settlement (hereinafter, the “settlement agreement”), wherein the parties agreed, inter alia, that the petitioner’s newly acquired property shall be tax exempt beginning in the year 2004 and shall remain in that classification for two years. The parties also agreed that at the expiration of the two-year term, the settlement agreement shall automatically renew for an additional two-year period unless there is a material change in the laws of the Commonwealth respecting real estate tax exemption. Pursuant to the settlement agreement, if a party wishes to terminate or renegotiate the settlement agreement following a material change in the law, the party is to provide notice six months prior to the termination of the current two-year term.

On June 28,2013, six months prior to the termination of the then existing two-year term, the respondents notified the petitioner that as of December 31, 2013, it would be terminating the settlement agreement based upon a material change in the laws of the Commonwealth with respect to the petitioner’s tax exempt status. On October 29, 2013, the parties appeared in motion court for the presentation of the instant Motion to Enforcement Contribution in Lieu of Real Estate Taxes Agreement of Settlement (hereinafter, the “motion”). This court scheduled oral argument on the motion for February 4, 2014. The court ordered parties to file briefs in support of their respective positions on the motion, an order with which the parties timely complied.

The petitioner asserts that there has been no material change in the laws of the Commonwealth with respect to its tax exempt status nor has there been a change in the petitioner’s use of the property at issue. Because of these facts, the petitioner argues that this court enforce the settlement agreement and order the respondents to comply with the terms thereof. Conversely, the respondents argue that this court should void the settlement agreement because it was entered into by their predecessors and cannot be binding over a subsequent governmental board. The respondents also assert that the petitioner’s facility does not meet the constitutional standard of a purely public charity as set forth in the HUP test, formulated by the Pennsylvania Supreme Court in Hospital Utilization Project v. Comm., 487 A.2d 1306 (Pa. 1985). The respondents argue that the settlement agreement appears to disregard the HUP test and to allow the petitioner to remain in operation, even as a purely profitable organization, and maintain its tax exempt status.

In order to reach the merits of the parties’ arguments, the court must first determine whether the settlement agreement is binding and enforceable on successor boards. Instantly, in 2007, the settlement agreement was entered into by the petitioner and the then-acting members of the respondents boards and officers. As stated above, in paragraph 2 of the contract, the term of the settlement agreement will be two years from the date upon which it was executed and shall automatically renew for an additional two-year period at the expiration of each term period unless there has been a material change in the laws of the Commonwealth with respect to real estate tax exemption.

As the settlement agreement is an agreement with a governmental body, it is viewed in a different light than agreements between private parties. In Lobolito, Inc. v. North Pocono School Dist., 755 A.2d 1287, 1289 (Pa. 2000), the Pennsylvania Supreme Court reiterated, “With respect to those agreements involving municipal legislative bodies that encompass governmental functions, we have repeatedly held that governing bodies cannot bind their successors.” (citing cases). Therefore, when a private entity contracts with a governmental body, the question of whether such contract may bind governmental successors falls upon the determination of whether the contract serves a governmental or a proprietary purpose. Beaver Dam Outdoors Club v. Hazleton City Authority, 944 A.2d 97, 110-111 (Pa. Cmwlth. 2008). If a contract serves a governmental purpose, the contract cannot bind governmental successors; however, if a contract serves a proprietary purpose, the contract can bind its successors. Id. In underlying the importance of the governmental-proprietary distinction, the Pennsylvania Supreme Court explained in Mitchell v. Chester Housing Authority, 132 A.2d 873, 878 (Pa. 1957), “The obvious purpose of the rule is to permit a newly appointed governmental body to function freely on behalf of the public and in response to the governmental power or body politic by which it was appointed or elected, unhampered by the policies of the predecessors who have since been replaced by the appointing or electing power.”

“In determining whether activity is governmental or proprietary, the court will consider whether: (1) the activity is one that government is not statutorily required to perform; (2) the activity also may be carried on by private enterprise; or (3) the activity is used as a means of raising revenue.” Municipal Authority of Borough of Edgeworth v. Borough of Ambridge Water Authority, 936 A.2d 538, 548 (Pa. Cmwlth. 2007). “If the answer to any of these inquiries is yes, the function is proprietary.” Id. The test to determine whether an activity qualifies as a governmental function is not as clear. The Pennsylvania Supreme Court has found the term “governmental function” to be ambiguous. See SWB Yankees LLC v. Wintermantel, 45 A.3d 1029, 1041 (Pa. 2012). The courts of this Commonwealth, pursuant to the rules of statutory construction, have defined a “governmental function” as an activity “performed for public purposes exclusively in its public, political or municipal character.” Boyle v. Municipal Authority of Westmoreland County, 796 A.2d 389, 393 (Pa. Cmwlth. 2002). Additionally, in SWB Yankees, the court utilized Black’s Law Dictionary to define a “governmental function.” Black’s provides the definition of the term to be “[a] government agency’s conduct that is expressly or impliedly mandated or authorized by constitution, statute, or other law and that is carried out for the benefit of the general public.” BLACK’S LAW DICTIONARY 716 (8th ed. 2004).

Instantly, the crux of settlement agreement involves the taxability of various parcels of property owned by the petitioner. The function of taxation undeniably falls within the category of a governmental, rather than a proprietary, function. The power of taxation lies solely within the general assembly, and the Constitution of Pennsylvania has enacted various limitations, including the exemption from taxation of purely public charitable institutions, on the power of taxation in Article VIII, Section 2. Therefore, because the settlement agreement involves the function of taxation, such agreement generally cannot be binding on the current taxing authorities.

The petitioner does not dispute the fact that the settlement agreement involves a governmental function. Instead, the petitioner argues that it is an exception to the general rule that parties cannot bind successor governments by contracts involving governmental functions effectuated by their predecessors. The petitioner argues that the legislature specifically permits governments to make long-term agreements with private entities when it is necessary for the public good. After a review of the applicable case law, the court is unable to find authority permitting such a general exception.

“Our [Pennsylvania Supreme] Court has noted only one exception to the general rule against binding governmental successors.” Lobolito, 755 A.2d at 1290. The court in Lobolito explained that, unless a statute permits governmental authorities to enter into long-term agreements with private entities, the only recognized exception pertains to situations in which “considerations of urgency and necessity, especially when coupled with the stipulated public interest and absence of bad faith or ulterior motivation should permit the commitment to be sustained[.]” Id. (citing MacCalman v. County of Bucks, 191 A.2d 265 (Pa. 1963)). Instantly, the circumstances surrounding the enforceability of the settlement agreement are not urgent or necessary for the public good. Predictably, neither the petitioner nor the respondents argue this point.

The petitioner argues that the legislative intent of the Chapter 10, Section 372 of the Pennsylvania Statutes, which or Act 55, provisions regarding purely public charity, authorize governmental boards to enter into long-term agreements with purely public charities. However, the court finds this statute to be inapplicable under the current circumstances. Although the petitioner was indeed given tax exempt status in 1968, it has never been assessed and determined to be an institution of purely public charity under the constitutional HUP test. The case law makes clear that under these circumstances, in order to be given tax exempt status as an institution of purely public charity, an organization must first meet the constitutional standard for establishing the entity is a purely public charity. In Mesivtah Eitz Chaim of Bobov, Inc. v. Pike County Board of Assessment Appeals, 44 A.3d 3, 9 (Pa. 2012), the Pennsylvania Supreme Court explained that “to receive an exemption without violating the constitution, the party must meet the definition of ‘purely public charity’ as measured by the test in HUP. It if does so, it may qualify for an exemption if it meets the statute’s requirements. Act 55, however, cannot excuse the constitutional minimum — if you do not qualify under the HUP test, you never get to the statute.” Because the petitioner has never been assessed to be a purely public charity under the HUP test, the petitioner cannot argue that the provisions of Act 55 permit the respondents to honor a contract entered into by the predecessors that established the petitioner’s tax exempt status. As a result, the respondents are not bound by the settlement agreement and may terminate it at their discretion. Based upon the foregoing, the petitioner’s motion to enforce contribution in lieu of real estate taxes agreement of settlement is hereby denied.

ORDER OF COURT

And now, this 21st day of May, 2014, this case being before the court on February 4, 2014 for a hearing regarding the plaintiff/petitioner’s motion to enforce contribution in lieu of real estate taxes agreement of settlement, with Michael Yukevich, Jr., Esquire, and Chadd C. Colin, Esquire, appearing and representing Shenango Presbyterian Seniorcare, with Thomas W. Leslie, Esquire, appearing and representing the Lawrence County Board of Assessment Appeals and with Lawrence County, and with John F. Salopek, Esquire, appearing and representing the Wilmington Area School District and the New Wilmington Borough, and upon consideration of said motion and the hearing thereon, the court hereby orders and decrees as follows:

1. The plaintiff/petitioner’s motion to enforce contribution in lieu of real estate taxes agreement of settlement is hereby denied pursuant to the attached opinion.

2. The prothonotary shall properly serve notice of this order of court and attached opinion upon counsel of record; and if a party has no counsel, then upon said party at their last known address as contained in the court’s file.

      . “Under the HUP test, a purely public charity must: (a) advance a charitable purpose; (b) donate or render gratuitously a substantial portion of its services; (c) benefit a substantial and indefinite class of persons who are legitimate subjects of charity; (d) relieves the government of some of its burden; and (e) operate entirely free from profit motive.” In re Appeal of Dunwoody Village, 52 A.3d 408, 413 n.4 (Pa. Cmwlth. 2012).


author: CARRAFIELLO, J.,

text:
    Estate of Ciuccarelli

      May 21, 2014
   CARRAFIELLO, J.,

— Frank Caruso (hereinafter referred to as “appellant”) appealed the orphans’ court’s decree dated April 2, 2014, which sustained the preliminary objections of appellees Christine Embry Waltz and TD Bank, NA to dismiss the claims of Eileen and Frank Caruso for lack of standing.

The issues presently before the court are whether the orphans’ court erred in sustaining the preliminary objections and dismissing the matter.

FACTS

The present matter is a dispute over proceeds from the sale of real property in the estate of Gaetano Ciuccarelli (hereinafter referred to as the “Escrow Case”).

Briefly stated, while the Will Contest, initiated by Eileen Caruso, was proceeding in the orphans’ court division, the Escrow Case was filed by Eileen Caruso and her husband, appellant herein, in the civil trial division. The trial division ruled on preliminary objections dismissing the claims against appellees prior to transferring the remainder of the case to the Orphans’ Court Division. The appellant appealed from the Orphans’ Court’s final decree of October 19, 2012 entered in the Escrow Case.

On appeal, the Superior Court, sua sponte, held that the trial division lacked subject matter jurisdiction to decide the preliminary objections and on December 3, 2013, remanded the case back to the Orphans’ Court.

The pertinent facts are as follows:

The decedent, Gaetano Ciuccarelli, died testate on November 2, 2006, survived by his sister, Angelina Scheswohl, and her husband, Edward Scheswohl (hereinafter referred to as “the Scheswohls”), and his adopted daughter, Eileen Caruso. The decedent’s will dated May 2, 2006 was admitted to probate on November 21, 2006 and letters of administration Cum Testamento Annexo were issued to Christine Embry Waltz, Esq. (hereinafter referred to as “Attorney Waltz”).

On December 19, 2006, Eileen Caruso, through her counsel Raymond J. Quaglia, Esq. (hereinafter referred to as “Attorney Quaglia”) filed a notice of appeal of the register’s grant of letters, and a petition for citation with the Orphans’ Court, alleging lack of testamentary capacity and undue influence with respect to the 2006 Will. C. George Milner, Esq. (hereinafter referred to as “Attorney Milner”) represented Attorney Waltz, in her capacity as administratix of decedent’s estate.

On January 10, 2008, the honorable Anne Lazarus dismissed the Will Contest, without hearing, holding that Eileen Caruso lacked standing since the Scheswohls were the sole beneficiaries under the 2006 Will and the decedent’s prior 2004 Will dated November 10, 2004. Eileen Caruso appealed to the Superior Court, which remanded for further proceedings before the Orphans’ Court to determine: (1) whether the 2004 Will could be probated without an original; (2) whether the 2004 Will was invalid due to testamentary incapacity or undue influence; and (3) whether decedent’s 2006 Will was similarly invalid. In re Estate of Ciuccarelli, 981 A.2d 940 (Pa. Super. 2009) (Table).

An adjudicatory hearing on the above issues was held on March 15 and 16, 2010 by the undersigned judge.

On August 11, 2010, the Orphans’ Court ruled against Eileen Caruso finding that (1) even if the 2006 Will were invalid, the 2004 Will properly could be probated; and (2) neither document was the product of testamentary incapacity or undue influence. Following denial of her Exceptions, Eileen Caruso appealed.

The Superior Court affirmed the Orphans’ Court’s decision on August 16, 2011, specifically holding that Eileen Caruso lacked standing to contest the 2006 Will. In re Estate of Ciuccarelli, 32 A.3d 835 (Pa. Super. 2011) (Table).

The Pennsylvania Supreme Court denied appellant’s petition for allowance of appeal on August 23, 2012, conclusively and definitively establishing that Eileen Caruso had no standing to contest the Will. In re Estate of Ciuccarelli, 51 A.3d 837 (2012) (Table).

In 2007, while the Will Contest was continuing, the decedent’s home was sold, and the parties agreed that the proceeds from the sale would be held in escrow pending resolution of the Will Contest pursuant to a written escrow agreement dated July 30,2007. $250,218.68 was retained by first patriot abstract company in a non-interest bearing account with TD Bank, NA. Subsequently, in or about April 2008, first patriot abstract company advised the parties that it would no longer hold the funds, and delivered to attorney Milner, a check in the amount of $231,537.86 payable to the order of “George Milner/Raymond Quaglia for Gae Ciuccarelli,” retaining the remaining funds for inheritance taxes. Attorney Milner endorsed the check and deposited it in an interest-bearing account, apparently without consulting the Carusos or attorney Quaglia.

On July 8, 2010, after the March 15th trial before the undersigned judge pursuant to the Superior Court’s remand of the Will Contest case, but prior to the orphans’ court’s decision being rendered, Eileen Caruso and her husband, the appellant (hereinafter referred to collectively as “the Carusos”), commenced their Escrow Case by filing a separate action in the Philadelphia Court of Common Pleas Civil Trial Division against attorney Milner, Attorney Waltz, and TD Bank, NA, alleging (1) fraud, material misrepresentation, and forgery against attorney Milner; (2) breach of contract against attorney Milner and Attorney Waltz; (3) breach of fiduciary duty against attorney Waltz; and (4) breach of warranty under the Uniform Commercial Code (“UCC”) against TD Bank.

TD Bank, NA filed preliminary objections to the Escrow Case Complaint alleging the Carusos lacked capacity to sue and had failed to state a claim upon which relief could be granted. Attorney Waltz filed preliminary objections alleging the Civil Trial Division lacked subject matter jurisdiction under 20 Pa. C.S. § 711, and that the Carusos failed to state a claim upon which relief could be granted for breach of contract or breach of fiduciary duty. The Honorable Allan L. Tereshko of the civil trial division sustained both sets of preliminary objections dismissing the Carusos’ claims against TD Bank by order dated October 1,2010 and against attorney Waltz by order dated October 28, 2010 and ordered the transfer of the remainder of the case to the Orphans’ Court Division.

Upon receipt of the escrow case by the Orphans’ Court on March 3, 2011, the undersigned judge stayed all proceedings pending the outcome of the appeal of the Will Contest before the Superior Court.

On September 26, 2012, after all appeals of the Will Contest had been exhausted, attorney Milner filed apetition to dismiss appellant’s remaining claims in the Escrow Case, asserting that: (1) the Carusos lacked standing and (2) the Carusos had suffered no recoverable damages. The undersigned judge terminated the stay of proceedings and ordered all remaining parties to show cause why the Escrow Case should not be dismissed for lack of standing. Attorney Quaglia filed an answer in opposition to the petition. On October 19, 2012, the undersigned Judge dismissed appellant’s case with prejudice and ordered that “[Attorney] Milner shall distribute the proceeds from the sale of Gaetano Ciuccarelli’s home as required by provisions of title 20, Pa[.] Statutes Consolidated.” See decree, 10/19/2012 at 1. Appellant appealed.

On appeal, the Superior Court, sua sponte, found that the trial division lacked subject matter jurisdiction to rule on the preliminary objections of TD Bank and attorney Waltz as appellant’s claims against them were solely within the mandatory and exclusive jurisdiction of the Orphans’ Court under 20 Pa. C.S.§711(1), that the trial court’s orders were entered in error, and that the case should have been transferred to the Orphans’ Court Division under 42 Pa. C.S. § 5103. In re Estate of Ciuccarelli, 81 A.3d 953, 959 (Pa. Super. Ct. 2013). The Superior Court vacated the trial division’s orders dated October 1, 2010 and October 28, 2010 sustaining the preliminary objections, and remanded the case to the Orphans’ Court Division to “rule upon the preliminary objections raised by TD Bank and attorney Waltz or otherwise proceed in a manner consistent with this [the Superior Court’s] opinion. Id. at 961-962.

Upon remand, the undersigned judge by decree dated February 27, 2014, permitted the parties to submit supplemental memoranda addressing facts and/or issues that they contend affect the outcome of the Orphans’ Court’s consideration of the preliminary objections. Attorney Milner, attorney Waltz, and TD Bank, NA submitted supplemental memoranda. Attorney Quaglia submitted a copy of his brief filed with the Superior Court challenging the undersigned judge’s October 19, 2012 decree, as well as a response to attorney Milner’s supplemental memorandum.

On April 2, 2014, after due consideration of the original preliminary objections and answers, as well as the supplemental memoranda submitted by the parties, this Orphans’ Court sustained the preliminary objections of TD Bank, NA and attorney Waltz, holding that the Carusos had failed to state a claim upon which relief could be granted because they had no claim to the proceeds, nor had any other cognizable cause of action. Appellant timely appealed.

ISSUES

1. WHETHER THE ORPHANS’ COURT ERRED IN SUSTAINING THE PRELIMINARY OBJECTIONS OF TD BANK, NA AND ATTORNEY WALTZ.

2. WHETHER THE ORPHANS’ COURT ERRED IN ORDERING THE MATTER DISMISSED FOR LACK OF STANDING.

DISCUSSION

1. THE ORPHANS’ COURT CORRECTLY SUSTAINED THE PRELIMINARY OBJECTIONS OF TD BANK, NA AND ATTORNEY WALTZ, FINDING APPELLANT LACKED STANDING.

A. Appellant lacks standing because the final, unappealable holding of the court is that Eileen Caruso is not a beneficiary under her father’s Will.

Our Supreme Court instructs us that “the core concept [of standing] ... is that a person who is not adversely affected in any way by the matter he seeks to challenge is not ‘aggrieved’ thereby and has no standing to obtain a judicial resolution to his challenge.” William Penn Parking Garage, Inc. v. City of Pittsburgh, 464 Pa. 168, 193, 346 A.2d 269, 281 (1975). There, enunciated was the principle that to have standing, the proponent of the action must have a direct, substantial, and immediate interest in the matter at hand. William Penn, 464 Pa. at 192, 346 A.2d at 280 (citing Keystone Raceway Corp. v. State Harness Racing Comm., 405 Pa. 1, 7-8, 173 A.2d 97, 100 (1961)). In William Penn, the Supreme Court then expanded on the definition of each of these factors:

[T]he requirement of a “substantial” interest simply means that the individual’s interest must have substance —there must be some discernible adverse effect to some interest other than the abstract interest of all citizens in having others comply with the law.... The requirement that an interest be “direct” simply means that the person claiming to be aggrieved must show causation of the harm to his interest by the matter of which he complains.... the interest [must] be “immediate” and “not a remote consequence of the judgment.”

William Penn, 464 Pa. at 195-97, 346 A.2d at 282-83.

The present action involves claims by appellant that funds from the sale of the decedent Gaetano Ciuccarelli’s home were transferred under an unauthorized, forged signature. It is undisputed that the funds in question are from the sale of the decedent’s home. As such, they are an asset of the estate of Gaetano Ciuccarelli and must be distributed — upon administration of the estate — to the beneficiaries named in the decedent’s will.

The final and uncontestable holding of our Supreme Court is that Eileen Caruso and appellant as administrator of her Estate is not a beneficiary of the estate of Gaetano Ciuccarelli. Even if we assume the endorsement was forged, appellant has no interest nor suffers any discernible effect from appellees’ purported actions. Further, allegations that appellees violated the escrow agreement giving rise to this cause of action are incorrect and not sustainable by the uncontroverted facts. Specifically, the escrow agreement provided “the net proceeds of the sale shall be escrowed pending determination of the petition of appeal filed by Eileen Caruso.” At the time of the endorsement, the determination of the Will Contest had been made, and later became final, with Eileen Caruso and appellant, as administrator of her estate, never having been successful on the merits at any stage of the proceedings.

While the issue of Eileen Caruso’s standing was appealed and did not become final until after the distribution of the escrow funds, that decision certainly relates back to the decedent Ciucearelli’s estate’s entitlement to the funds and divests Eileen Caruso and appellant of any possible standing to claim injury or damages, let alone standing to maintain this suit.

B. Appellant’s argument that he was deprived of a “lost settlement opportunity” is not a recognized cause of action.

The appellant’s argument, that he deserves damages for a “lost settlement opportunity” caused by the appellees’ purported actions, is unsustainable. He provides no Pennsylvania case law, nor has any been found, to support the proposition that a plaintiff may recover damages for a lost settlement opportunity. Further, he offers no documentation of any settlement offer ever having been made, nor does he give any specificity as to where and when such an agreement was alleged in his pleadings. The first mention of such an allegation came in his answer to attorney Milner’s petition to dismiss. At no point within his original complaint does he reference a settlement offer nor has he amended his complaint to that effect. Even when offered the opportunity to submit a supplemental memorandaum, which would have been the perfect opportunity to disclose the substance of the alleged settlement opportunity, appellant remained silent, except to submit what had been submitted before. No settlement offer having been made or facts alleged which would indicate that a settlement was in the realm of possibility, such a lost settlement opportunity did not exist.

Further, the only way such a settlement opportunity could ever exist would be to assume that the appellant and his attorney intended to hold said money in violation of the escrow agreement itself which required disbursement after loss of the Will Contest case and to willfully and obdurately refuse to endorse the draft until a settlement could be extracted from the estate. In effect stating, that without duress or other conduct against public policy, this matter cannot be settled.

Since we are unwilling to believe appellant would consciously further such a scheme to thwart the rule of law, we have concluded appellant never had any rights in the fund, never had right to withhold its transfer and never had any right to bring a claim over the endorsement.

In dismissing the matter instead of giving leave to amend the complaint, the Orphans’ Court seriously considered what else could be pled that would give appellant a viable cause of action. Only after determining that no disputed facts existed at the time of the escrow distribution upon which a true settlement could have been negotiated, and that the complaint could not be cured irrespective of further facts or issues pled, did the Orphans’ Court take the onerous action of terminating appellant’s case.

Considering that the underlying issues were determined and had been appealed to finality in the Will Contest, and thus become res judicata, and that upon remand, appellant was given but refused to avail himself the opportunity to present a supplemental memorandum, and that further litigation would be of no avail and only consume the costs of the litigants, it would have been senseless and a misuse of judicial discretion to order otherwise.

2. THE ORPHANS’ COURT CORRECTLY DISMISSED THIS MATTER AFTER SUSTAINING THE PRELIMINARY OBJECTIONS.

Aparty lacking standing may be dismissedpreliminarily, before trial, on motion. In Fumo v. City of Philadelphia, 601 Pa. 322, 336, 972 A.2d 487, 496 (2009), our Supreme Court states that “[i]n seeking judicial resolution of a controversy, a party must establish as a threshold matter that he has standing to maintain the action.” (citing Stilp v. Commonwealth, 596 Pa. 62, 940 A.2d 1227, 1233 (2007)). Our Supreme Court continues by holding that: “[a] challenge to the standing of a party to maintain the action raises a question of law.” Fumo, 601 Pa. at 336, 972 A.2d at 496 (citing In re Milton Hershey Sch., 590 Pa. 35, 911 A.2d 1258 (2006)).

Pursuant to Pa. R.C.P. No. 1028(a) (4), if a party lacks standing, the case can be dismissed preliminarily for legal insufficiency of a pleading (demurrer).

In this case, by finding that appellant lacked standing for the reasons already addressed above, the orphans’ court properly sustained the demurrer on preliminary objections and dismissed the case.

CONCLUSION

The matter currently before the court presents no new issues of fact or law that have not already been determined by this honorable Superior Court and for which any further appeals to the Pennsylvania Supreme Court have already been denied. Appellant’s attorney, even in the employment of strident and persistent advocacy, has been unable to cite any authority that would permit this case to proceed further.

Even considering the allegation that appellee’s counsel forged appellant’s counsel’s name, since any such event has cost the appellant no loss, the continuation of this action would be a waste of judicial and litigants’ assets and delay long-overdue closure.

The argument that the action was properly before the court on the theory of damages arising from a lost settlement opportunity is completely untenable since appellant lacks standing to raise a claim upon which a settlement can be negotiated. To find even the hint of the cause of action would be to sanction appellant’s unlawful behavior and to legitimize duress.

Based on the Orphans ’ Court’s previous holdings, which have been affirmed on appeal, as well as the appellant’s lack of standing, the Orphans’ Court properly dismissed this matter with prejudice.

      . Eileen Caruso, a former petitioner in this case, the wife of appellant, and the adopted daughter of the decedent, died January 5, 2012. On May 13, 2013 the Superior Court allowed the substitution of Frank Caruso individually and as administrator of the estate of Eileen Caruso, deceased, as a party in this matter.

      . The lengthy factual and procedural history of both the Escrow Case and the Will Contest is well known to the Superior Court and is set out in its opinion of December 3, 2013, In re Gaetano Ciuccarelli, 2013 PA Super 310, 81 A.3d 953 (2013).

      . In January of 2010, the undersigned judge assumed the calendar of the Honorable Anne Lazarus who had ascended to the Superior Court bench.

      . Stipulation and consent to sale of real estate dated 7/30/2007, attached as exhibit A to the Carusos’ Escrow Case Complaint, provides that “[t]he net proceeds of the sale shall be escrowed pending determination of the petition of appeal filed by Eileen Caruso.”

      . Caruso, et al. v. TD Bank, et al, Philadelphia County Court of Common Pleas July Term 2010 No. 442.


author: MAS SIAH-JACKS ON, J,

text:
    Coates v. Nationwide Insurance Co.

      Gary Stewart Seflin, for plaintiff.

      Katherine C. Douglas, for defendant.
    May 29, 2014—
   MAS SIAH-JACKS ON, J,

I. FACTUAL BACKGROUND and PROCEDURAL HISTORY

On March 9, 2009, Ms. Inez Coates was driving her father’s Mitsubishi Galant in Philadelphia, Pennsylvania. When she slowed her speed on the Schuylkill Expressway due to a disabled vehicle ahead, Ms. Coates’ automobile was hit from behind with great force by David Tamarchio’s van. As a result of the impact the Mitsubishi Galant rolled over and skidded upside down on the highway, causing serious and permanent physical and emotional injuries to Ms. Coates.

Ms. Coates settled her claim against Mr. Tamarchio for his auto policy limit of $100,000.00. Nationwide Assurance Company insured the Mitsubishi Galant she was driving. The Underinsured Motorist Benefits of the policy are $15,000./$30,000. Ms. Coates presented a claim to Nationwide for $15,000. for underinsurance coverage. When Nationwide denied the claim, plaintiffCoates initiated this litigation alleging' breach of contract and bad faith.

On April 21, 2014, this court presided over the non-jury trial. The facts have been stipulated to by the parties. The single issue presented is the choice of law, that is, whether Pennsylvania law or Delaware law applies to plaintiff-Coates’ underinsured motorist claim. The parties agree that if Pennsylvania law applies, then the Plaintiff is entitled to $15,000.00 on her underinsured motorist claim. The parties also agree that if Delaware law applies the plaintiff is not entitled to any recovery. The issue is a pure question of law. Now, in accordance with Rule 1038 of the Pennsylvania Rules of Civil Procedure this court submits its findings and conclusions in favor of defendant Nationwide Assurance Company, incorrectly designated as Nationwide Insurance Company.

II. LEGAL DISCUSSION

In Pennsylvania, the appellate courts have devised a two-step process to resolve choice of law questions. In Thibodeau v. Comcast Corporation, 912 A.2d 874 (Pa. Superior Ct. 2006), the Superior Court explained at 912 A.2d 886:

“Pursuant to the Pennsylvania choice of law analysis, the first step requires a determination of whether the laws of the competing states actually differ. Ratti v. Wheeling Pittsburgh Steel Corp., 758 A.2d 695, 702 (Pa.Super. 2000). If the laws do not differ, then a true conflict is not present and no further analysis is necessary. Id. In that case, we apply Pennsylvania law. If we determine that a true conflict is present, we must then analyze the governmental interests underlying the issue and determine which state has the greater interest in the application of its law to the matter at hand. Id.”

This flexible approach was first adopted by our Supreme Court in Griffith v. United Airlines, Inc., 203 A.2d 796 (Pa. 1964), which held at 203 A.2d 805-806:

“Thus, after careful review and consideration of the leading authorities and cases, we are of the opinion that the strict lex loci delicti rule should be abandoned in Pennsylvania in favor of a more flexible rule which permits analysis of the policies and interests underlying the particular issue before the court. As said in Babcock v. Jackson, supra, 12 N.Y.2d at 481, 240 N.Y.S.2d at 749, 191 N.E.2d at 283, ‘The merit of such a rule is that ‘it gives to the place ‘having the most interest in the problem’ paramount control over the legal issues arising out of a particular factual context’ and thereby allows the forum to apply ‘the policy of the jurisdiction ‘most intimately concerned with the outcome of [the] particular litigation’.’ (Auten v. Auten, 308 N.Y. 155, 161, 124 N.E.2d 99, 102, supra.)’” (footnote omitted)

The Griffith Rule... “a workable, fair and flexible approach to choice of law....” 203 A.2d 806, was initially applicable to tort cases. Pennsylvania choice of law decisions evolved to include contract actions in Nationwide Mutual Insurance Co. v. Walter, 434 A.2d 164 (Pa. Superior Ct. 1981).

In Nationwide v. Walter, supra, the Superior Court looked for the state that had the “most vital contacts with the policy of insurance.” 434 A.2d at 167. Again, in Caputo v. Allstate Insurance Co., 495 A.2d 959 (Pa. Superior Ct. 1985), the Superior Court looked to the contacts which each state had with the transaction involving the insurance policy. 495 A.2d at 962. Over the past thirty years, the law has become well-settled that:

a. When the issue in a litigation is coverage under an insurance policy, the case is a contract matter, and,
b. When the issue involves an insurance policy, points of contact to consider are each state’s contacts with the insurance policy at issue and not with the underlying tort.

See generally, Wilson v. Transport Insurance Co., 889 A.2d 563 (Pa. Superior Ct. 2005); Nationwide Mutual Ins. Co. v. West, 807 A.2d 916, 921 (Pa. Superior Ct. 2002). See also, Restatement (Second) Conflicts of Law §188.

In the case at bar it is apparent that Delaware has most of the relevant contacts. Delaware is the place where the insurance policy was negotiated and where it was contracted. Ms. Coates’ father, Henry Coates, resides in Delaware. The policy was issued to give insurance protection to Mr. Coates and other permissive drivers as set forth in his policy. Additionally, Mr. Coates purchased the policy to comply with the requirements of Delaware’s motor vehicle responsibility statutes. The location of the accident and mobility of the car is of less importance, because no matter where the car was driven or who was operating it, Mr. Coates had the right to expect that the laws of Delaware would apply. Conversely, Nationwide had the expectation to be bound by Delaware law in its dealings with Mr. Coates. See, Nationwide v. Walter, supra, 434 A.2d at 168, noting, as here, that Pennsylvania had “no contact with the transaction involving the insurance policy. It was by mere happenstance that the automobile was involved in an accident while located in Pennsylvania.”

Plaintiff-Coates’ exhaustive review of her injuries, surgeries, medical treatments and domicile, reflects what our Superior Court has labeled “a blind adherence to the laws of the place where a tort arises,” Budtel Associates, LP v. Continental Casualty Co., 915 A.2d 640 at 644 (Pa. Superior Ct. 2006). That notion has been rejected by our Pennsylvania Appellate Courts. This trial court is not bound by the purported public policy analysis of Parker v. State Farm Insurance Co., 543 F. Supp. 806 (E.D. Pa. 1982) which Pennsylvania has not adopted for insurance contracts.

III. CONCLUSION

Where as here, the issues relate to the coverage provided under a policy of insurance and considering the contacts as they relate to the insurance policy, for all the reasons set forth above, this court finds and concludes in favor of the defendant-Nationwide.

ORDER

And Now, this 29th day of May, 2014, after presiding at the trial held April 21, 2014, and, after considering the stipulation of facts and trial memoranda submitted by the parties and counsel, and, for the reasons set forth in the memorandum filed this date, this court finds and concludes that verdict is entered in favor of Nationwide Assurance Company, incorrectly designated as defendant Nationwide Insurance Company.