author: MINORA, J,

text:
    Decker v. Nationwide Insurance Company

      Jill H. Miller, for plaintiffs.

      James C. Haggerty and Mary C. Doherty, for defendant Nationwide.

      Charles E. Haddick Jr. and Bryon R. Raster, for defendant Robert G. Turano Insurance Co.
    June 5, 2007
   MINORA, J,

INTRODUCTION

The instant issue before the court is the disposition of preliminary objections filed by defendants Nationwide Insurance Company and Robert G. Turano Insurance Agency. Two separate complaints were filed at captions 05 CV 1863 and 06 CV 2119. The court has elected to address these claims separately. Our ruling on defendant Nationwide’s motion for summary judgment in response to plaintiffs’ complaint at 05 CV 1863 was filed on April 16,2007. (Attached hereto as “exhibit A” [not published herein].) The preliminary objections here before the court were filed in response to plaintiffs’ complaint filed to 06 CV 2119.

PROCEDURAL HISTORY

We incorporate the statement of facts included in our opinion disposing of defendant Nationwide’s motion for summary judgment filed to 05 CV 1863. In their complaint filed to 06 CV 2119, plaintiffs set forth the follow-, ing counts against defendants Nationwide and Turano:

“Count I — Fraud—John and Cara Decker v. Nationwide Insurance Company.

“Count II — Fraud—John and Cara Decker v. Turano Insurance Agency.

“Count III — Breach of fiduciary duty — John and Cara Decker v. Turano Insurance Agency.

“Count IV — Bad faith — John and Cara Decker v. Nationwide Insurance Company.”

On May 31,2006, Defendants Turano and Nationwide together filed preliminary objections in response to plaintiffs’ complaint at 06 CV 2119. Specifically, defendant Turano filed a preliminary objection in response to plaintiffs’ Count III, breach of fiduciary duty. Defendant Nationwide filed a preliminary objection in response to plaintiffs’ Count IV, bad faith. Plaintiffs filed a brief in opposition to defendants’ preliminary objections on September 6,2006. Argument was held before this court on October 6, 2006. The matter is now ripe for disposition.

PRELIMINARY OBJECTIONS

In response to plaintiffs’ complaint filed to 06 CV 2119, defendant Turano Insurance Agency submitted preliminary objections in the nature of a demurrrer to Count III, breach of fiduciary duty. Also, defendant Nationwide submitted preliminary objections in the nature of a demurrer to Count IV, bad faith.

(a) Preliminary Objections Standard

“Preliminary objections in the nature of [a] demurrer test the legal sufficiency of the plaintiff’s complaint.” Sexton v. PNC Bank, 792 A.2d 602, 604 (Pa. Super. 2002). “The question presented by the demurrer is whether, on the facts averred, the law says with certainty that no recovery is possible.” Mistick Inc. v. Northwestern National Casualty Company, 806 A.2d 39, 42 (Pa. Super. 2002). As stated by our Commonwealth Court:

“A demurrer is an assertion that a complaint does not set forth a cause of action upon which relief can be granted. Vartan v. Commonwealth, 151 Pa. Commw. 86, 91, 616 A.2d 160, 163 (1992). In disposing of a demurrer, every well pleaded, material, relevant fact set forth in the pleading to which it is filed, together with all reasonable inferences therefrom, are admitted as true. Id. A demurrer will be sustained only where a plaintiff’s complaint or pleading shows with certainty that upon the facts averred therein the law will not permit the plaintiff to recover. Id. If there is any doubt, this should be resolved in favor of overruling the demurrer. Gekas v. Shapp, 469 Pa. 1, 6, 364 A.2d 691, 693 (1976). A demurrer does not admit conclusions of law. Philmar Mid-Atlantic Inc. v. York Street Associates, 389 Pa. Super. 297, 300, 566 A.2d 1253, 1254 (1989).” Firetree Ltd. v. Department of General Services, 920 A.2d 906, 911 (Pa. Commw. 2007).

(b) Breach of Fiduciary Duty

Defendant Turano cites several Pennsylvania decisions that determined no fiduciary duty exists between an insured and the insurance company. See defendant Turano’s brief in support of preliminary objections, note 1. “[N]o fiduciary [duty] exists between an insurance company and its insured.” Chenot v. Metropolitan Life Insurance Company, 47 D.&C.4th 332, 335 (Butler Cty. 2000).

As examined in 26 E. Oregon Ave. L.P. v. Fidelity Nat. Title Ins. Co.:

“In Pennsylvania, a breach of fiduciary duty claim against an insurer by an insured is synonymous with a breach of contractual duty of good faith and fair dealing. Gideon v. State Farm Mutual Insurance Co., 410 Pa. 55, 188 A.2d 320, 322 (1963). As such, a breach of fiduciary duty claim is redundant of a breach of contract claim against an insurer. Moreover, no fiduciary relationship exists between an insurer and its insured. Instead, the relationship between the insured and the insurer is one of buyer and seller. See Pennsylvania Chiropractic Association v. Independence Blue Cross, 2001 WL 1807781 *9 (Pa.Com.Pl. July 16, 2001).” 2004 WL 2474063 *5 (Phila. Cty. 2004). (emphasis added)

We recognize the various cases cited by the plaintiffs attempting to classify the relationship between plaintiffs and defendant Turano, an insurance agent, as one meriting a fiduciary duty. See plaintiffs’ brief in opposition to defendant Turano’s preliminary objections, at 7-8.

Other cases decided in Pennsylvania provide us with guidance on evaluating defendant Turano’s preliminary objection to plaintiffs’ claim for breach of fiduciary duty. In Swantek v. Prudential Property & Casualty Insurance Co., 48 D.&C.3d 42 (Erie Cty. 1988), the plaintiffs sued their insurance company and insurance agent after plaintiffs’ uninsured motorist coverage was not adequate to compensate the injured plaintiff for her injuries. The plaintiffs raised a claim for negligence against the defendant insurance company and agent. The court described plaintiffs’ claim asserted against the defendant agent as follows:

“[I]t is plaintiffs’ position that Prudential, by and through its agent, Joseph Fries, acting on behalf of Prudential, was negligent for not completely reviewing all aspects of their insurance coverage giving due consideration to its availability, its costs and the financial resources of plaintiffs which would enable them to purchase certain insurance. . . . They [plaintiffs] also have alleged that the relationship between plaintiffs and defendant Joseph Fries was unique in that they relied heavily on his expertise in this matter. Based on this, they have brought the present claim against Prudential and Joseph Fries as Prudential’s agent and its authorized representative.” Id. at 43-44. (emphasis added)

Breach of fiduciary duty was not named as a claim in Swantek. A good portion of the court’s opinion, however, explored the competency standard that insureds should expect from an insurance agent. The Swantek court followed the standard articulated in Peterson v. State Farm Insurance Co., 133 P.L.J. 437 (1985), which applied the Restatement (Second) of Torts, §299. The court stated:

“As did the court in Peterson, this court now concludes that an insurance agent is held to the standard of care found in section 299 of the Restatement (Second) of Torts, and given that standard the agent has a correlative duty to advise insureds of the availability of other types of insurance benefits. Moreover, a cause of action exists where the agent allegedly breaches this duty.” Swantek, 48 D.&C.3d at 47.

In ruling on defendant’s motion for summary judgment, the court determined that outstanding issues of fact precluded the court from granting the motion. Specifically, the court provided:

“Certain questions surround the relationship the plaintiffs had with the insurance agent, and what they expected from the relationship. It is not apparent from the record whether the agent advised and counseled the plaintiffs or to what extent plaintiffs relied on the[ir] agent. These questions, among others, need to be addressed before the court can grant summaiy judgment.” Id. at 48.

More recently, the question of whether a claim for breach of fiduciary duty may be raised against an insurance agent was addressed in Seiss v. Sherman, 49 D.&C.4th 367 (Butler Cty. 2000). In Seiss, defendant insurance company and defendant agent jointly filed a preliminary objection in the nature of a demurrer to the plaintiff’s claim for breach of fiduciary duty. The court sustained joint defendants’ (insurance company and agent) preliminary objection to plaintiff’s breach of fiduciary duty claim, as a fiduciary duty was not found by the court to exist between an insurance company and its insured. Id. at 373-74. In Seiss, therefore, the insurance company and its agent were considered as a single entity for purposes of considering the breach of fiduciary duty claim.

We find, to the contrary of Seiss, supra, that it is appropriate to consider the insurance company and the insurance agent separate entities for purposes of evaluating whether plaintiffs have a viable claim for breach of fiduciary duty against defendant Turano. Allegedly, defendant Turano was made aware of detailed circumstances relating to plaintiff John Decker’s employment. Following the standard in Swantek, supra, we consider it important to determine the level of involvement defendant Turano had in advising plaintiffs of the appropriate insurance policy and product to fit their needs. Defendant Turano’s preliminary obiection to Count III of plaintiffs’ complaint, breach of fiduciary duty, is denied.

(c) Bad Faith

Plaintiffs’ claim for bad faith was raised against defendant Nationwide. The Pennsylvania Superior Court has defined bad faith:

“ ‘Bad faith’ on the part of [the] insurer is any frivolous or unfounded refusal to pay proceeds of policy; it is not necessary that such refusal be fraudulent. For purposes of an action against an insurer for failure to pay a claim, such conduct imports a dishonest purpose and means breach of a known duty (i.e., good faith and fair dealing), through some motive of self-interest or ill will; mere negligence or bad judgment is not bad faith.” Adamski v. Allstate Insurance Company, 738 A.2d 1033, 1036 (Pa. Super. 1999). (citations omitted)

The available relief for a bad faith claim is provided in 42 Pa.C.S. §8371.

At the preliminary objections stage of the pleadings and under the standard for evaluating a demurrer to the plaintiffs’ complaint, we find that defendant Nationwide’s preliminary objection to plaintiffs’ claim for bad faith is denied. Plaintiffs’ complaint alleged, “The actions of defendant, Nationwide Insurance Company, in refusing to pay plaintiff’s claim under the policy and failing or refusing to provide proper and adequate insurance coverage after accepting and retaining premium payments, constitutes bad faith as defined under 42 Pa.C.S. §8371 . . . .” See plaintiffs’ complaint at ¶59. Plaintiffs’ complaint alleges only that defendant Nationwide failed to make the payments pursuant to its obligation to plaintiffs.

As stated supra, “A demurrer will be sustained only where a plaintiff’s complaint or pleading shows with certainty that upon the facts averred therein the law will not permit the plaintiff to recover.” Firetree Ltd. v. Department of General Services, 920 A.2d at 911 (emphasis added) (citing Vartan v. Commonwealth, 151 Pa. Commw. 86, 91, 616 A.2d 160, 163 (1992)). Defendant Nationwide’s demurrer to plaintiffs’ count for bad faith cannot be granted at this stage as the complaint addresses only the assertion that plaintiffs paid premiums to defendant Nationwide and therefore plaintiffs were entitled to certain coverage in exchange for these payments made. Therefore, under the demurrer standard, it is not clear from the complaint that the plaintiffs are not entitled to recover from defendant Nationwide for bad faith.

An appropriate order ruling on these preliminary objections follows.

ORDER

And now, June 5, 2007, defendant Turano’s preliminary objection in the nature of a demurrer to Count III of plaintiffs’ complaint, breach of fiduciary duty, is denied.

Defendant Nationwide’s preliminary objection in the nature of a demurrer to Count IV of plaintiffs’ complaint, bad faith, is denied.

      . We recognize that 42 Pa.C.S. §8371 has been held conflict preempted by ERISA in Barber v. Unum Life Insurance Company of America, 383 F.3d 134 (3d Cir. 2004).

        The language of 42 Pa.C.S. §8371 is provided as follows:
      “In an action arising under an insurance policy, if the court finds that the insurer has acted in bad faith toward the insured, the court may take all of the following actions:
      “(1) Award interest on the amount of the claim from the date the claim was made by the insured in an amount equal to the prime rate of interest plus 3 percent.
      “(2) Award punitive damages against the insurer.
      “(3) Assess court costs and attorneys fees against the insurer.”


source: Caselaw Access Project

author: GRIM, P.J.,

license: Public Domain

text:
    Acree v. Gresh-Acree

      Paul A. Prince, for plaintiff.

      Thomas L. Klonis, for defendant.
    February 16, 2007
   GRIM, P.J.,

Defendant Vickie M. Gresh-Acree (Mother) filed exceptions to the support master’s report in the above-captioned case. The following are the pertinent facts.

The parties are the parents of three children. Plaintiff David E. Aeree (Father) filed a petition to modify Mother’s child support payments. He alleged that the existing support order had been based on an estimate of Mother’s income and that her actual income was higher than the estimate.

Mother is a full-time realtor who works on a commission basis as an independent contractor. Her customary commission as a listing broker is 60 percent of the total commissions minus a six percent franchise fee and expenses.

Mother’s testimony regarding her 2005 earnings was vague and not credible. Mother did not bring any financial records with her to the hearing even though she knew that her income was an issue. She did not remember how many closings she had in 2006. She did not recall how many properties she sold in 2005. She did not know how much she spent either weekly or monthly on gasoline. She did not know what was included in her car and truck expenses of almost $9,000 for 2005. She also did not know what constituted other expenses of approximately $4,000. Mother referred all of the questions to her certified public accountant; however, Mother’s accountant was not present at the hearing. Mother also did not recollect anything that she had told the conference officer.

The support master did not find Mother’s testimony credible or her 2005 federal income tax return a proper indication of her earning capacity. Mother’s schedule C showed gross receipts in the amount of $17,874 while her 1040 form for 2005 reflected a total income loss of $16. Therefore, the support master relied on the gross receipts stated on Mother’s 2004 federal income tax return.

In 2004, Mother claimed a total of $ 17,143 in business expenses, and in 2005 she claimed a total of $17,890 in expenses. The support master found that Mother’s legitimate expenses in 2004 were for advertising fees, commissions, insurance, office expenses, and dues for a total amount of $3,180. The support master did not accept Mother’s car and truck expenses because Mother had been unable to testify about them. The support master also did not accept as valid the deductions for meals and entertainment, management fees, and office/shared expenses because Mother had not offered proof of any of those deductions. The support master also did not accept as a deduction the telephone expense in the amount of $2,631 because Mother had testified that she spends $1,200 per year for both her home and cell phones.

Based on these figures, the support master found that Mother’s gross yearly income was $29,138 and that her net yearly income is $25,127 or $2,094 net per month. The support master found that Father’s net monthly income is $5,274 based on Father’s pay stubs and tax returns. Mother’s support obligation was therefore determined to be $482 per month.

Mother filed exceptions to the recommended order. The court shall address them seriatim.

Mother first excepts to the detennination that her monthly net income is $2,094 because the support master failed to use Mother’s 2005 federal income tax return and based the recommendation on Mother’s 2004 gross income. This exception is without merit and is dismissed.

The support master did not find Mother credible and did not find Mother’s 2005 federal income tax return a proper indication of Mother’s earning capacity. Therefore, the support master relied on Mother’s 2004 tax return. The general rule is that it is the earning capacity, not the actual earnings, of the parent which is the determinative factor in ascertaining the ability to pay support. Akers v. Akers, 373 Pa. Super. 1, 540 A.2d 269 (1988).

The support master gave valid reasons for using Mother’s 2004 gross income. The court also finds that the 2004 income is a true indication of Mother’s earning capacity. Even assuming, arguendo, that Mother’s testimony was credible and that the expenses were valid, a parent cannot avoid support by staying with a losing enterprise. Newcomer v. Newcomer, 325 Pa. Super. 536, 473 A.2d 197 (1984). If Mother is actually losing money working as a realtor, then, perhaps, she should find another occupation.

Mother next contends that the support master failed to take into consideration her genuine business expenses, including management fees, office/shared expenses, and vehicle expenses. This exception is meritless and is dismissed.

The support master excluded the management fees and office/shared expenses because Mother had not offered any proof of these expenses. The support master excluded the vehicle expenses because Mother was unable to testify about those expenses when she had been specifically asked about them. Therefore, the support master correctly excluded these deductions in the case sub judice.

Mother’s last exception is that the support master erred in failing to dismiss Father’s petition for modification due to the fact that there was no significant change in circumstances. This argument fails.

Pa. R.C.P. 1910.19(a) provides in pertinent part as follows:

“A new guideline amount resulting from new or revised support guidelines may constitute a material and substantial change in circumstances ....”

The support guidelines were amended in Januaiy 2006. Thus, the amendment qualifies as a material and substantial change in circumstances. Too, there was an issue concerning Mother’s source of income for expensive vacations and presents. That type of issue is also covered in the same section:

“The existence of additional income, income sources or assets identified through automated methods or otherwise may also constitute a material and substantial change in circumstances.”

For these reasons, the petition for modification was proper.

In accordance with the foregoing opinion, the court enters the following order.

ORDER

And now, February 16, 2007, after consideration of the exceptions filed by defendant, argument of counsel, and review of the record, it is hereby ordered that defendant’s exceptions to the recommended order of the support master are dismissed, and said recommendation is hereby adopted and entered as the order of the court.


author: MAIER, J.,

text:
    Koval v. Melnick

      Neil E. Jo kelson, for plaintiffs.

      Michael S. Melnick, pro se and GeraldHanchulak, for defendant.
    March 7, 2007
   MAIER, J.,

This opinion supports this court’s order dated December 18,2006, holding that the Recreational Use of Land and Water Act, 68 P.S. §477-1 et seq. (RULWA), applied to the property in question in this matter, and entering judgment in favor of defendant Michael Melnick, Esquire in this legal malpractice claim.

We found the RULWA applied to the property in question and accordingly that defendant in this case, Attorney Melnick, could not be found negligent for so stipulating. If counsel had not so stipulated, the trial court would have been required to make a determination as to the RULWA’s applicability. We find that the trial court would have found, or in our opinion should have found, that the RULWA applied and accordingly plaintiff’s burden in the underlying case would have been the same with or without counsel’s stipulation. Accordingly, plaintiff is unable to establish the required elements of a legal malpractice claim in Pennsylvania that counsel failed to exercise ordinary skill and knowledge and that such negligence was the proximate cause of plaintiff’s damage.

FACTS AND PROCEDURAL HISTORY

This legal malpractice action arose out of Attorney Melnick’s representation of the estate of Steven Koval who died in the early morning hours of September 3, 1994 when the truck he was riding in drove over an embankment on the subject property. T.R. 6/3/99, volume.

Steven Koval was driving through Duryea Mountain with his friend and co-worker, Steve Goul, to reach a scenic overlook. T.R. 6/3/99 at 181. Both men were at a beer party on the adjacent property before going on this drive. T.R. 6/3/99 at 117-118, 373. Mr. Goul testified in the underlying trial that he arrived at the party at about 6 p.m. Hours later, at about 2:30 or 3 a.m., Mr. Koval, with Mr. Goul as his passenger, attempted to drive his Buick Regal but the road was not passable in this vehicle. T.R. 6/3/99 at 182, 183. They returned to the tree farm where they worked and where they had been partying earlier and took instead Mr. Goul’s truck, which ultimately traveled the same road that was not passable in the car. T.R. 6/3/99 at 183-85. Based on the tire tracks in the dirt at accident scene, the truck backed up several times before going over the edge. T.R. 6/3/99 at 119-20.

Steven Kóval knew the mountain, having spent many years traveling there for recreation. He directed Mr. Goul as to how to get to the scenic overlook. T.R. 6/3/99 at 185. Mr. Goul testified that after sliding down an embankment, the truck went over the edge of the roadway and into a pit located on the mountain. This pit, along with 19 acres of Duryea Mountain, was owned by Duryea Realty and leased by Airport Sand and Gravel Company in Luzerne County, Pennsylvania, a defendant in the underlying suit. T.R. 6/3/99 at 186. This fall caused Steven Koval’s injuries and ultimately his death. T.R. 6/3/99 at 187-88. Mr. Goul admitted fault for this accident. T.R. 6/3/99 at 192.

A jury trial was held in the Court of Common Pleas in Luzerne County on June 3, 1999 wherein the decedent’s family sued Airport Land & Gravel, Pagnotti Coal Company and Duryea Realty Company for their willful or wanton failure to guard against or warn of the dangerous condition which caused the accident. Defendant Airport Land & Gravel joined Steven Goul as an additional defendant.

Before trial, Attorney Melnick stipulated with defense counsel that the RULWA applied under the facts of the case. Accordingly, his burden was to show that defendants’ failure to warn or guard against this dangerous condition was wanton or malicious.

The jury was asked if Airport Sand & Gravel engaged in willful or malicious conduct by failing to guard against or warn against a dangerous condition. The jury answered no. T.R. 6/3/99 at 877. The jury found further that additional defendant Steven Goul was negligent, and that such negligence was a substantial factor in bringing about plaintiff’s harm. The jury also found that plaintiff decedent, Steven Koval, was contributorily negligent and that such was a substantial factor in bringing about his harm. The jury allocated 60 percent of the causal negligence to Steven Goul and 40 percent to Steven Koval.

Plaintiff in the legal malpractice matter before this court is the decedent Steven Koval’s family. They sued Attorney Melnick, claiming it was malpractice to stipulate that the RULWA applied to the property — plaintiff claims it does not — and that this malpractice caused their damages, a defense verdict in the underlying suit. Plaintiff argues Attorney Melnick unnecessarily and erroneously increased their burden of proof to a showing of wanton or malicious failure to warn or guard against from a showing of mere negligence.

This matter had been conferenced extensively before this court and was ultimately scheduled for a jury trial to have commenced on December 4, 2006. After the jury was selected, counsel asked to conference with the court and proposed that the court make and enter its finding as to whether the RULWA applied to the property in question and then enter an order accordingly which the parties could then choose to appeal if they so desired.

This court found that the RULWA applied to the property in question and accordingly Attorney Melnick was reasonable and not negligent for agreeing to the same. We made this decision based on the existing case law at the time of counsel’s stipulation and the facts concerning the land which were available to counsel. We also found that the jury in the underlying trial heard ample evidence against plaintiff’s interest to justify their verdict. Causation cannot be established because plaintiff cannot prove that Attorney Melnick’s stipulation was the cause of the defense verdict. Rather, the stipulation was consistent with existing law and the defense verdict appears to be supported by the evidence submitted at the June 3,1999 trial.

Evidence that the men were drinking at a party hours before deciding to drive into the mountain and that Mr. Koval was directing Mr. Goul on where to drive, evidence that the men, after finding the road impassable with a car returned with a truck and that the tire treads showed that Mr. Goul made several attempts to get over the rise in the road just before the drop-off and evidence that Mr. Goul admitted fault in the accident all support the verdict that was rendered by the jury at the June 3,1999 trial.

After finding that RULWA applied to this property, we entered judgment for defendant Attorney Melnick, and this appeal followed.

DISCUSSION

On appeal, plaintiff argues that the court erred in holding that RULWA applied to the subject property and in ruling for defendant Attorney Melnick by finding that he was not negligent in stipulating that RULWA applied to the subject property.

In order to establish a claim of legal malpractice in Pennsylvania, a plaintiff must prove three basic elements: (1) employment of the attorney or other basis for a duty; (2) the failure of the attorney to exercise ordinary skill and knowledge; and (3) that such failure was the proximate cause of damage to the plaintiff. Rizzo v. Haines, 520 Pa. 484, 499, 555 A.2d 58, 65 (1989). An essential element to this cause of action is proof of actual loss rather than merely nominal damages, speculative harm or the threat of future harm. Rizzo, 520 Pa. at 504-505, 555 A.2d at 68. Damages are considered remote or speculative if there is uncertainty concerning the identification of the existence of damages rather than the ability to precisely calculate the amount or value of damages. Id.

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. Kituskie v. Corb man, 552 Pa. 275, 281, 714 A.2d 1027, 1030 (1998). Plaintiffs must establish they would have been the successful litigants in the underlying litigation in order to prevail in a legal malpractice claim. Id. at 275, 714 A.2d at 1027.

As we explain below, because counsel’s decision to stipulate that RULWA applied in the underlying litigation was based on a correct reading of RULWA, plaintiff cannot prove the required elements of malpractice, namely that he failed to exercise ordinary skill and knowledge and that such failure was the proximate cause of plaintiff’s damages.

The Recreational Use of Land and Water Act 68 P.S. §477-1 etseq. (2006)

The relevant portions of the Act which apply to this case follow.

“Section 477-2. Definitions.

“As used in this act:

“(1) ‘Land’ means land, roads, water, watercourses, private ways and buildings, structures and machinery or equipment when attached to the realty.

“(2) ‘Owner ’ means the possessor of a fee interest, a tenant, lessee, occupant or person in control of the premises.

“(3) ‘Recreational purpose ’ includes, but is not limited to, any of the following, or any combination thereof: hunting, fishing, swimming, boating, camping, picnicking, hiking, pleasure driving, nature study, water skiing, water sports, cave exploration and viewing or enjoying historical, archaeological, scenic, or scientific sites.

“(4) ‘Charge 'means the admission price or fee asked in return for invitation or permission to enter or go upon the land.

“Section 477-3. Duty to keep premises safe; warning.

“Except as specifically recognized or provided in section 6 of this Act, an owner of land owes no duty of care to keep the premises safe for entry or use by others for recreational purposes, or to give any warning of a dangerous condition, use, structure, or activity on such premises to persons entering for such purposes.

“Section 477-4. Assurance of safe premises; duty of care; responsibility, liability.

“Except as specifically recognized by or provided in section 6 of this Act, an owner of land who either directly or indirectly invites or permits without charge any person to use such property for recreational purposes does not thereby:

“(1) Extend any assurance that the premises are safe for any purpose.

“(2) Confer upon such person the legal status of an invitee or licensee to whom a duty of care is owed.

“(3) Assume responsibility for or incur liability for any injury to persons or property caused by an act of omission of such persons.

“Section 477-6. Liability not limited.

“Nothing in this act limits in any way any liability which otherwise exists:

“(1) For willful or malicious failure to guard or warn against a dangerous condition, use, structure, or activity-

“Section All-1. Construction of act.

“Nothing in this act shall be construed to:

“(1) Create a duty of care or ground of liability for injury to persons or property.

“(2) Relieve any person using the land of another for recreational purposes from any obligation which he may have in the absence of this act to exercise care in his use of such land and in his activities thereon, or from the legal consequences of failure to employ such care.”

The trial record was replete with testimony and evidence which was available to the parties when Attorney Melnick stipulated to RULWA’s applicability. The testimony at trial shows the subject property was open, largely unimproved and rural and that the land was open for others to use without charge for recreational purposes, as defined in the Act.

The subject land was described as 19 acres of undeveloped, unimproved land upon which anyone could enter for the recreational purposes listed in RULWA, namely: “hunting, fishing ... picnicking, hiking, pleasure driving.” 68 RS. §477-2(3). There was testimony at the June 3, 1999 trial that people typically entered the land to mountain bike throughout the paths. Also, three-wheelers, quads and people in cars and trucks used the roads on this property regularly. T.R. 6/3/99 at 356. While there were security guards who sometimes stopped people from going on the land, for the most part, the guards allowed people to use the land for recreation and hunting. T.R. 6/3/99 at 357-59. “The whole mountain is just one big maze of dirt roads.” T.R. 6/3/99 at 365. One of Mr. Koval’s co-workers who testified at the initial trial testified that lots of people would go up the mountain. T.R. 6/3/99 at 178, 364. Fishermen were also seen in the area during the summer. T.R. 6/3/99 at 383. Mr. Goul testified that in the month prior to the accident, he was riding throughout this property on his mountain bike. T.R. 6/3/99 at 168. Various entrance gates to the property were left open or unlocked. T.R. 6/3/99 at 176.

Evidence relevant to the permissive use of the property without fee was introduced: the tree farm workers, including Mssrs. Koval and Goul, regularly entered the Airport Sand & Gravel property through the Coxton Road gate which was never locked and barely ever closed, and that on the night of the accident, the security guard for Airport Sand & Gravel stopped by the roundhouse where that party was happening. T.R. 6/3/99 at 176. Mr. Goul testified that he would get to the trails for mountain biking by following the river and crossing the Stephenson Street bridge into the property. T.R. 6/3/99 at 178.

In addition to the plain wording of the applicable sections of the RULWA we are also guided by case law indicating that Attorney Melnick’s stipulation to the RULWA’s applicability was reasonable in this case and therefore not negligent.

In Baran v. Pagnotti Enterprises Inc., 402 Pa. Super. 298, 586 A.2d 978 (1991), cited by Attorney Melnick in this action, plaintiff in that case also stipulated that RULWA applied to the property in a fact scenario which was similar to the case at bar. Plaintiff in Baran, after hanging out with friends on the undeveloped property which included strip mines, left the group and ultimately fell into a strip mine pit which was abutting the road. Plaintiff died and his estate sued the landowner, but stipulating that RULWA applied. The Superior Court did not question whether the Act applied to the land which was open and largely undeveloped like the land in the case at bar.

In the case of Friedman v. Grand Sanitation Inc. 524 Pa. 270, 571 A.2d 373 (1990), the Supreme Court held that RULWA immunized owners of recreational land even if they had not donated the land to the public for recreational purposes. The property in the Friedman case was a commercial landfill and RULWA was found to be applicable. It was reasonable for Attorney Melnick to rely upon the existing case law at the time which was consistent with a finding that RULWA applied to the property.

Because we agree that counsel’s interpretation of RULWA was correct, we cannot find counsel’s actions to be unreasonable and therefore we cannot find his actions were negligent. Plaintiff’s legal malpractice claim presumes that plaintiff would have won or would have had a better chance of winning if counsel had not stipulated that the Act applied. To the contrary, however, a court would have been required, prior to submitting the case to the jury, to make a ruling on whether or not the Act applied in that case. Under our reading of RULWA, a court would have or should have found, just as we did, and just as counsel stipulated, that RULWA applied to the landowner in this case.

Accordingly, because RULWA would have been applied to this case, via stipulation of counsel or court order, plaintiff cannot sustain its burden in this legal malpractice claim to prove that counsel’s stipulation caused plaintiff’s damages, namely, the June 3, 1999 defense verdict.

CONCLUSION

Because we find that Attorney Michael Melnick’s actions in the underlying case were reasonable because they were based on a correct reading of RULWA, and because plaintiff is unable to prove their damages resulted from counsel’s stipulation, we find for defendant, Michael Melnick, Esquire, in this legal malpractice action.

      . Rather, irrelevant to the case before us, the court questioned whether the Act applied when the landowners were actively trying to keep out trespassers.


author: SAIDIS, Member,

text:
    Office of Disciplinary Counsel v. Zeigler

      Disciplinary Board Docket no. 49 D.B. 2005.
    March 17, 2006
   To the Honorable Chief Justice and Justices of the Supreme Court of Pennsylvania:

SAIDIS, Member,

Pursuant to Rule 208(d)(2)(iii) of the Pennsylvania Rules of Disciplinary Enforcement, the Disciplinary Board of the Supreme Court of Pennsylvania herewith submits its findings and recommendations to your honorable court with respect to the above-captioned petition for discipline.

I. HISTORY OF PROCEEDINGS

On April 18,2005, Office of Disciplinary Counsel filed a petition for discipline against Daniel F. Zeigler, respondent. The petition charged respondent with violations of Rules of Professional Conduct 1.15(a) and (d) and 8.4(c) arising out of alleged acts of commingling and conversion of entrusted funds. Respondent did not file an answer to petition for discipline.

A disciplinary hearing was held on July 28, 2005, before a District III Hearing Committee comprised of Chair Michael W. King, Esquire, and Members Thomas C. Clark, Esquire and Anne C. Shapiro, Esquire. Respondent appeared pro se.

The Hearing Committee filed a report on November 22, 2005, finding that respondent violated the Rules of Professional Conduct as charged in the petition for discipline, and recommending that he be suspended from the practice of law for a period of three years.

This matter was adjudicated by the Disciplinary Board at the meeting on February 1, 2006.

II. FINDINGS OF FACT

The board makes the following findings of fact:

(1) Petitioner, Office of Disciplinary Counsel, whose principal office is located at Suite 1400, 200 N. Third Street, Handsburg PA 17101, is invested, under Rule 207 of the Pennsylvania Rules of Disciplinary Enforcement, with the power and the duty to investigate all matters involving alleged misconduct of an attorney admitted to practice law in the Commonwealth of Pennsylvania and to prosecute all disciplinary proceedings brought in accordance with the various provisions of that rule.

(2) Respondent, Daniel F. Zeigler, was bom in 1947 and was admitted to practice law in the Commonwealth in 1972. He maintains his office at 4 Coal Street, P.O. Box 186, Lansford PA 18232. He is subject to the jurisdiction of the Disciplinary Board of the Supreme Court of Pennsylvania.

(3) Respondent has no prior history of discipline.

(4) At all times pertinent hereto, respondent maintained an IOLTA checking account at M & T Bank (trust account).

(5) At all times pertinent hereto respondent maintained a general office non-fiduciary checking account at M & T Bank (office account).

(6) Beginning in 2002, respondent represented Raymond Gusick as personal representative and heir of the Edward Gusick estate.

(7) On August 16, 2002, respondent made a deposit of $ 1,180.19 in funds of the Gusick estate into his office account.

(8) At the time of the August 16,2002 deposit into the office account, that account contained $674.84 in non-fiduciary funds of respondent.

(9) Respondent was given no authority by Raymond Gusick to use any funds of the Gusick estate for personal use at any time or in any manner.

(10) Respondent used a portion of the Gusick estate funds when he issued a check dated August 4,2002, from the office account, in the amount of $937.80 made payable to Kutztown University for an obligation of his daughter who was a student at the university at that time.

(11) The office account balance on September 4,2002, was $414.48, which was $765.71 less than the $1,180.19 that should have been maintained for the Gusick estate.

(12) On September 5, 2002, respondent deposited $29,404.54 in funds of the Gusick estate into his office account.

(13) The September 5, 2002 deposit represented the last funds received by respondent for the Gusick estate.

(14) As of September 5, 2002, respondent was entrusted with a total of $30,5 84.73 in funds of the Gusick estate.

(15) Between September 5,2002 and April 10, 2003, respondent made five distributions totaling $16,053.51 from the office account on behalf of the Gusick estate, as follows:

(i) On November 21, 2002, check number 770 in the amount of $1,523.45 was issued to Raymond Gusick in payment of his executor’s commission;

(ii) On January 7, 2003, check number 778 in the amount of $3,452.65 was issued to Porambo Funeral Home in payment of an estate obligation;

(iii) On March 6, 2003, check number 785 in the amount of $22.50 was issued to the Commonwealth of Pennsylvania;

(iv) On March 18, 2003, check number 784 in the amount of $55 was issued to Carbon County Law Journal;

(v) On April 10,2003, check number 791 in the amount of $ 11,000 was transferred to the trust account.

(16) The balance in the office account for the Gusick estate after the $11,000 transfer should have been $14,531.22.

(17) The balance in the office account after the transfer of $11,000 to the trust account was $166.80.

(18) Between September 5,2002 and April 10, 2003, by checks drawn on and paid from the office account, respondent personally used funds of the Gusick estate totaling $14,364.62.

(19) Respondent’s personal use of Gusick estate funds included:

(i) Check number 754 in the amount of $5,156.10 issued to the Jim Thorpe National Bank dated September 18, 2002, and paid September 19, 2002, for payment on two personal loans;

(ii) Check number 759 in the amount of $1,825.60 issued to Kutztown University dated October 22, 2002, and paid October 28, 2002, in payment of an obligation for his daughter;

(iii) Check number 774 in the amount of $250 issued to Lawyer Assessment on November 27,2002, and paid December 13, 2002, in payment of his annual Attorney Registration fee and late charges for fiscal year 2002-2003;

(iv) Check number 780 in the amount of $912.80 issued to Kutztown University on January 16, 2003, and paid January 24, 2004, in payment of an obligation of his daughter.

(20) On April 9,2003, respondent deposited $2,447.56 into the trust account which represented funds that he received for payment of a school tax obligation of a client, Michael Watkins.

(21) On April 10, 2003, respondent attempted to pay the obligation of Michael Watkins by causing to be issued trust account check number 425 in the amount of $2,447.56, made payable to Portnoff Law Associates and bearing the notation “Michael Watkins (Sch. tax).”

(22) On April 10,2003, respondent transferred $ 11,000 of the Gusick estate funds from the office account to the trust account.

(23) At the time of the April 10, 2003 deposit of $11,000, the trust account contained no other funds of the Gusick estate.

(24) On April 10, 2003, respondent made Gusick estate distributions from the trust account totaling $23,822.65.

(25) The distributions made on April 10, 2003 were more than the $11,000 of Gusick funds in the trust account.

(26) The $12,822.65 shortage was paid in part from funds respondent held for Rebrag Inc. or All Staffing Inc., companies which were owned by Stanley Costello, who was at the time a client of respondent and his current employer.

(27) Stanley Costello either permitted or ratified respondent’s use of the funds from Rebrag Inc. or All Staffing Inc. to make up for the $12,822.65 shortfall that respondent owed to the Gusick estate on April 10, 2003.

(28) On April 10, 2003, when respondent’s trust account check number 425 in the amount of $2,447.56, made payable to Portnoff Law Associates for Mr. Watkins was presented to his bank on May 5,2003, for payment, the balance in the trust account was $3.51 resulting in an overdraft of $2,444.05.

(29) Respondent’s trust account contained insufficient funds to pay the Watkins’ obligation because those funds had been used to make up other shortfalls.

(30) On May 12, 2003, respondent covered the trust account overdraft of $2,444.05 by making a deposit of $2,500.

(31) The source of the deposit was from funds received from Rebrag Inc., having been authorized or ratified by Stanley Costello, the owner of Rebrag.

(32) On May 15, 2003, the Pennsylvania Lawyers Fund for Client Security (LFCS) sent a letter to respondent which provided him with a copy of an overdraft notice sent to the LFCS by M & T Bank. The notice reflected the overdraft on May 6,2003, in the amount of $2,444.05 in the trust account.

(33) The LFCS letter of May 15,2003, requested that respondent provide within seven business days a written explanation of why the overdraft occurred, as well as copies of bank statements, the dishonored check, relevant client ledgers, copies of the bank statements for the IOLTA account for the prior three months, and copies of the instruments used to satisfy or cover the overdraft with an explanation of the source of those funds.

(34) On June 13, 2003, respondent called LFCS and requested an extension of time to respond. He was given until June 19, 2003.

(35) Respondent failed to respond to the LFCS.

(36) In a letter dated June 27,2003, the LFCS advised respondent that the matter had been referred to the Office of Disciplinary Counsel because of respondent’s failure to respond to its request for information.

(37) Petitioner sent a letter to respondent on July 7, 2003, which referenced the referral from the LFCS and requested that respondent provide within 10 days: copies of the bank statements for his trust account for the period of March 1,2003 to July 7,2003; copies of the front and back sides of all cancelled checks for that same period; copies of client ledgers reflecting all transactions for that same period; the identity of clients and the amount of funds held for each as represented by the balance in the trust account on March 1, 2003; and an explanation of the course of the funds represented by each deposit to the account for that same period along with copies of the deposited items and the deposit slips.

(38) Respondent did not respond to petitioner’s letter of July 7, 2003.

(39) On August 8, 2003, a Supreme Court subpoena/ subpoena duces tecum, returnable on August 22, 2003, was personally served on respondent by petitioner requesting the same trust account records as requested in petitioner’s letter of July 7, 2003.

(40) Respondent failed to respond to the subpoena served on him on August 8, 2003.

(41) On September 24, 2003, respondent deposited settlement proceeds of $6,000 received for Doris Anderson in the office accomit and made a distribution to her in the amount of $5,000 on September 26, 2003.

(42) On October 16, 2003, respondent deposited $8,420 in the office account for the Bernard Connelly estate and paid $7,400 to the Schuylkill County Register of Wills for Inheritance Tax on November 3, 2003.

(43) In January 2004, a second Supreme Court subpoena/subpoena duces tecum, returnable on February 6, 2004, was personally served on respondent directing the production of the same trust account records as the August 8,2003 subpoena, along with additional records for the trust account and the office account.

(44) Respondent failed to respond to the January 2004 subpoena.

(45) Respondent failed to maintain any ledgers or other records for his trust account, and was unable to determine what funds he was holding for any particular client relative to any particular transaction at any given time for the period in question.

(46) All funds that respondent handled for the Gusick estate, Connelly estate and for Doris Anderson were funds that were required to be transacted through the IOLTA trust account.

(47) Although respondent testified that he had funds of Rebrag Inc. available to him in his trust account contemporaneous with the shortages in his office account which resulted from his personal use of the funds of the Gusick estate, the funds were used from the Gusick estate before deposits were made from Rebrag Inc.

(48) Respondent offered no credible reason as to why he placed the Gusick estate funds in his office account.

(49) Thomas J. McCall testified as a character witness for respondent and stated that he knew respondent to be an honest person.

(50) Alfonso Sebia is the half owner of All Staffing Inc., respondent’s current employer. Mr. Sebia testified that respondent had the discretion to use Rebrag/All Staffing funds for expenses related to Rebrag as well as personal expenses.

(51) Mr. Sebia was aware of respondent’s use of Re-brag funds in paying back the Gusiclc estate and to cover an overdraft in respondent’s IOLTA account as well as the tax payment for Mr. Watkins.

(52) Mr. Sebia considered the use of Rebrag funds as loans which remain unpaid.

(53) A malpractice action was filed against respondent in 2000, resulting in a stipulated agreement of the parties which obligated respondent to pay to the plaintiff the amount of $50,000. Respondent has paid approximately $10,000 toward that obligation.

(54) In 2002, respondent was making a transition from the private practice of law to employment at All Staffing and during this time the proceeds from his private practice were insufficient to meet his financial obligations.

(55) In January 2003, respondent became a part-time employee of All Staffing and in April 2004 he became a full-time employee.

(56) Respondent closed out all of his accounts and no longer maintains a private law practice.

III. CONCLUSIONS OF LAW

By his conduct as set forth above, respondent violated the following Rules of Professional Conduct:

(1) R.P.C. 1.15(a) — A lawyer shall hold property of clients or third persons that is in a lawyer’s possession in connection with a representation separate from the lawyer’s own property- Funds shall be kept in a separate account maintained in the state where the lawyer’s office is situated, or elsewhere with the consent of the client or third person.

(2) R.P.C. 1.15(d) — Notwithstanding paragraphs (a), (b) and (c), and except as provided below in paragraph (e), a lawyer shall place all funds of a client or of a third person in an interest bearing account.

(3) R.P.C. 8.4(c) — It is professional misconduct for a lawyer to engage in conduct involving dishonesty, fraud, deceit or misrepresentation.

IV. DISCUSSION

This matter is before the board for consideration of the charges against Daniel Zeigler. A petition for discipline filed against respondent alleges that he violated Rules of Professional Conduct 1.15(a) and (d) and 8.4(c) when he commingled estate funds in his office account and used the funds for his personal bills. No answer to petition for discipline having been filed, the facts therein are admitted, pursuant to Rule 208(b)(3), Pa.R.D.E. Those facts establish that in August and September 2002 respondent was representing the personal representative of the Edward Gusick estate and received estate assets of $1,180.19 and $29,404.54, for a total of $30,584.73. The Gusick estate funds were commingled in respondent’s office account with personal funds of respondent. At the time of the commingling, respondent maintained and was using an IOLTA trust account for his practice.

Respondent had no authority to personally use any of the Gusick estate funds but between September 5,2002, and April 10, 2003, he converted to his own use a total of $15,039.46 in Gusick funds. The misuse of the funds included $5,156.10 in payments on personal bank loans, $2,838.40 to Kutztown University for obligations of his daughter, and $250 to Lawyer Assessment in payment of his 2002-2003 annual Attorney Registration fee.

In April 2003, respondent transferred $11,000 in remaining Gusick estate funds from his office account to his IOLTA trust account and made $23,822.65 in distributions to close out the estate. The $12,822.65 shortage was paid from funds he held for a client, now his employer, Rebrag Inc. or All Staffing Inc., and in part from $2,447.56 he had received from a client named Watkins for payment of a tax obligation. Respondent’s use of the Rebrag Inc. or All Staffing Inc. funds was later ratified by principals of those companies and the amounts are considered loans to respondent, which remained unpaid at the time of the hearing.

The record demonstrates that petitioner has proven by clear and convincing evidence that respondent committed professional misconduct by commingling fiduciary funds with personal funds and that on several occasions, respondent used client funds which should have been deposited in his trust account to pay personal bills.

Respondent presented evidence that he was entitled to use funds given to him by Rebrag Inc./All Staffing Inc. for personal use, and in fact he did use those funds to make restitution to the clients whose money he used to pay his own expenses. The CEO of Rebrag testified that respondent was permitted to use Rebrag funds in that way. Regardless, the fact that respondent had funds available to him in another account does not lessen the seriousness of his misconduct. Office of Disciplinary Counsel v. Kanuck, 517 Pa. 160, 535 A.2d 69 (1987). In any event, the commingling began prior to the availability of Rebrag funds and continued even after petitioner began its investigation.

After overdrawing on his trust account and faced with questions regarding his finances, respondent failed to respond to requests for information, one from the Pennsylvania Lawyers Fund for Client Security and the other from petitioner. Fie failed to respond to two subpoena duces tecum served on him by petitioner. Respondent’s poor record keeping might possibly explain the overdraft of his trust account, but it does not explain his lack of response when contacted by petitioner and the Client Security Fund, and after service of the subpoenas. A troubling aspect of this case is that the commingling continued after respondent was on notice of possible discrepancies and the subsequent investigation. There is no evidence that he attempted to change his office procedures to rectify any problems.

Respondent has no prior history of discipline since his admission in 1972. He has indicated that he no longer intends to continue in private practice and has closed all of his office accounts. While the closing of the accounts may ensure that he will not commit the same misconduct, it does not obviate the need for discipline in the instant matter.

An attorney’s role as a fiduciary requires the highest standards of professional conduct. Office of Disciplinary Counsel v. Lewis, 493 Pa. 519, 426 A.2d 1138 (1981). The mishandling of fiduciary funds requires some form of public discipline. In the recent matter of Office of Disciplinary Counsel v. Harmon, 970 Disciplinary Docket no. 3 (Pa. Dec. 13, 2004), the attorney therein commingled trust funds with her own funds, used client funds to pay personal bills, and utilized entrusted funds of a client to pay prior clients whose funds had been improperly used by the attorney. This attorney failed to appear for the disciplinary hearing. The attorney was suspended for three years by order of the Supreme Court of Pennsylvania.

In recommending a thee-year suspension to the court in the Harmon case, the board noted the following cases: Office of Disciplinary Counsel v. Foti, 835 Disciplinary Docket no. 3 (Pa. July 24, 2003), in which an attorney with no record of discipline and who presented mitigation was suspended for three years for having converted $33,000 in fiduciary funds and for failing to timely pay over settlement proceeds to a client; Office of Disciplinary Counsel v. Olshock, 862 Disciplinary Docket no. 3 (Pa. Oct. 24, 2003), in which the attorney was suspended for three years for having converted $ 18,000 from an estate; and, the case of In re Anonymous No. 115 D.B. 97, 564 Disciplinary Docket no. 3 (Pa. March 23, 2000), in which an attorney who had no prior history of discipline but who had commingled and converted client funds over a period of time was suspended for three years.

The board does not find respondent’s misconduct to be quite as egregious as that of the respondent-attorney in Harmon, most notably due to the fact that respondent did appear for the hearing and present a case. However, in comparing the instant matter to the other cases cited in the Harmon matter, the board is persuaded that respondent’s conduct falls within a range of conduct exhibited therein. A suspension for a period of three years is appropriate to address respondent’s misconduct.

V. RECOMMENDATION

The Disciplinaiy Board of the Supreme Court of Pennsylvania unanimously recommends that the respondent, Daniel F. Zeigler, be suspended from the practice of law for a period of three years.

It is further recommended that the expenses incurred in the investigation and prosecution of this matter are to be paid by the respondent.

ORDER

And now, June 14, 2006, upon consideration of the report and recommendations of the Disciplinary Board dated March 17, 2006, it is hereby ordered that Daniel F. Zeigler be and he is suspended from the bar of this Commonwealth for a period of three years, and he shall comply with all the provisions of Rule 217 Pa.R.D.E.

It is further ordered that respondent shall pay costs to the Disciplinary Board pursuant to Rule 208(g), Pa.R.D.E.


author: CHESLOCK, J.,

text:
    Pocono Laurel Lake Property Owners Association v. Paul

      Rebecca A. Craggs, for plaintiff.

      Laura Paul, pro se.
    September 21, 2006
   CHESLOCK, J.,

On August 29, 2006, plaintiff Pocono Laurel Lake Property Owners Association filed a complaint requesting the defendant Laura Paul to immediately turn over all financial information and documents of plaintiff/association which are currently in her possession. Plaintiff also filed a petition for preliminary injunction on August 29, 2006, alleging that immediate and irreparable harm will result if Paul does not hand over all financial information/documents. A rule to show cause was issued by this court on September 1,2006, and a hearing was held on September 20, 2006. We will now rule on the matter.

FINDINGS OF FACT

(1) Plaintiff is a homeowners association for Pocono Laurel Lake.

(2) Paul resides at 901 Marilou Lane, Bartonsville, and is a member of plaintiff by virtue of her ownership.

(3) Paul was appointed treasurer for plaintiff association on or about July 24, 2004, for a term of one year, after which she was retained for another tern.

(4) On July 6, 2006, Paul resigned as treasurer of plaintiff/association.

(5) Plaintiff requested Paul to hand over all financial information/documents to it in order to continue its day-to-day operations and to permit its accountant to reconcile the books at the end of its fiscal year.

(6) Paul has not released all requested documents to plaintiff.

(7) Plaintiff does not have the ability to conduct business without documents in the possession of Paul.

(8) Paul believes her term as treasurer expires on September 24, 2006, and she has not given any excuse for her failure to release plaintiff’s documents.

DISCUSSION

Plaintiff requests a preliminary injunction directing Paul to release and turn over documents which are its property. Pa.R.C.P. 1531 states, in pertinent part, that in determining whether a preliminary injunction should be granted, the “court may act on the basis of the averments of the pleadings or petition and may consider affidavits of the parties or third persons or any other proof which the court may require.” A preliminary injunction is an extraordinary remedy that should only be granted where a party has established a clear right to the relief requested and when there exists a need for unusual haste so that a clear right may be protected from immediate and irreparable harm. Soja v. Factoryville Sportsmen’s Club, 361 Pa. Super. 473, 477, 522 A.2d 1129, 1131 (1987). A court must determine whether the activity sought to be restrained is actionable and reasonably subject to abatement by the issuance of a preliminary injunction. New Castle Orthopedic Associates v. Burns, 481 Pa. 460, 392 A.2d 1383 (1978); West Penn Specialty MSO Inc. v. Nolan, 737 A.2d 295 (Pa. Super. 1995). The essential prerequisites for the issuance of a preliminary injunction are: (1) relief is necessary to prevent immediate and irreparable harm which cannot be compensated by damages; (2) greater injury will occur from refusing the injunction than granting it; (3) that the injunction will restore the parties to their status as it existed immediately prior to the alleged wrongful act; (4) that the alleged wrong is manifest and the injunction is reasonably suited to abate it; and (5) that the plaintiff’s right to relief is clear. Anchel v. Shea, 762 A.2d 346, 351 (Pa. Super. 2000). See also, Schaeffer v. Frey, 403 Pa. Super. 560, 565, 589 A.2d 752, 754-55 (1991); Ucheomumu v. County of Allegheny, 729 A.2d 132, 134 (Pa. Commw. 1999).

We must first determine whether the conduct sought to be restrained is actionable. A court sitting in equity cannot grant a preliminary injunction unless this first requirement is met. Ucheomumu, supra at 134. Plaintiff has filed its petition for preliminary injunction seeking to restrain Paul from maintaining its documents, which prohibits its ability to conduct its business and a year-end audit/reconciliation. Michael DeLeonardo, vice president of the plaintiff, testified at hearing that a meeting was held on July 6,2006, in which Paul resigned as treasurer. He stated that at a subsequent board of directors ’ meeting on August 3, 2006, a new treasurer was appointed. DeLeonardo testified that Paul continued to maintain the books and other financial information/documentation which is needed by plaintiff to continue to pay its bills and conduct its day-to-day operations. He voiced concern that some members of plaintiff/association will not pay their dues because the payment cannot be properly recorded.

After reviewing all the pertinent facts, the court finds that plaintiff has presented evidence that the action sought to be restrained, i.e., Paul continuing to possess the documents of plaintiff, is actionable. Paul is in possession of financial information and documentation which is crucial to the day-to-day operating activities of plaintiff. We will now determine whether the relief sought is necessary to prevent immediate and irreparable harm. DeLeonardo testified that requests were made to Paul to hand over the information and documentation but plaintiff has not received the requested documentation from Paul. He further stated that the accountant is unable to complete the year-end audit/reconciliation of plaintiff’s books. Based upon the testimony presented at hearing, we find that plaintiff would suffer immediate and irreparable harm if the injunction is not issued. The plaintiff is not aware which dues, if any, are being paid by members. In addition, the audit by the accountant is being hindered by Paul’s refusal to hand over the documentation. Most importantly, we find that plaintiff is not able to function without the documents in the possession of Paul, which includes conducting its day-to-day operating activities. This is causing plaintiff irreparable harm. Accordingly, we find that the first requirement for the issuance of a preliminary injunction has been met.

The second requirement for a preliminary injunction is that greater injury will result from refusing injunction. It is clear from the testimony in this matter that greater injury will result if the injunction is not granted. The testimony of DeLeonardo indicates that plaintiff cannot continue to operate unless the documents are handed over by Paul. In this matter, the issuance of the preliminary injunction would abate the wrong because it would allow plaintiff to gain possession of its documents and allow the plaintiff to function properly. We find that greater harm would occur if the injunction is not granted.

The third requirement for a preliminary injunction is that it will restore the parties to their status as it existed prior to the alleged wrongdoing. It is clear that by requiring Paul to turn over the documents to plaintiff, it will restore the parties to their status as it existed prior to the wrongdoing. The issuance of the preliminary injunction will allow the parties to return to the positions that they were in prior to Paul denying possession of the documents to plaintiff.

The fourth requirement for a preliminary injunction is that the alleged wrong is discernible and the injunction is reasonably suited to abate it. After hearing, we find that the actions of Paul are incorrect and wrong, due to her lack of authority to continue to possess the documents of plaintiff. Paul acknowledges that she resigned, however, she claims that her term ends on September 24, 2006. We find no merit in this contention. Paul did not indicate that at the time of her resignation she told the plaintiff that it would be effective beginning September 24, 2006. Therefore, we believe when she resigned on July 6, 2006, it was immediate. We find that the issuance of the preliminary injunction will permit plaintiff to maintain its financial information necessary for continuing its operations and will abate the current situation. Hence, the fourth requirement has been met.

The fifth and final requirement for the issuance of a preliminaiy injunction is that the plaintiff’s right to relief is clear. Plaintiff has established at hearing that Paul maintained the documents for it. Plaintiff has also established that the documents in the possession of Paul are the property of plaintiff. Paul has not set forth that she has any possessory interest in the documents other than her role as treasurer of plaintiff. A preliminary injunction should be no broader than is necessary for the plaintiff’s interim protection. Anchel, supra at p. 352. We find that the return of the documents is no broader than is necessary for plaintiff’s protection. Accordingly, we find that plaintiff’s right to relief is clear in this matter. '

CONCLUSIONS OF LAW

(1) Plaintiff had no adequate remedy at law.

(2) Plaintiff has established that it will suffer immediate and irreparable harm unless the preliminary injunction is issued.

(3) Plaintiff has established wrongful conduct on the part of Paul in maintaining possession of its documents, despite requests to turn the documents over to it.

(4) Plaintiff has established it is the rightful owner of the documents in question.

(5) Paul has failed to relinquish possession of the documents, despite plaintiff requesting her to do so.

(6) Paul resigned her position as treasurer effective July 6, 2006.

(7) The greater injury will result from refusing the preliminary injunction.

(8) The right of plaintiff to relief is clear.

(9) Paul must turn over the documents to plaintiff immediately.

ORDER

And now, September 21, 2006, plaintiff’s request for preliminary injunction is hereby granted and it is ordered that defendant Laura Paul immediately turn over all financial information and documentation of plaintiff, Pocono Laurel Lake Property Owners Association, in her possession to plaintiff.