author: HERRON, J.,

text:
    Estate of Rubenstein

      C.P. of Philadelphia County,
    O.C. No. 337 DE of 2011

      Timothy Holman, for objectant.

      David Dembe, for Commonwealth.

      Dirk Simpson and Stephen Taylor, for accountants.
    Nov. 24, 2014
   HERRON, J.,

— Rose Rubenstein (“Rose”) died testate on August 1, 2010. In her March 9, 1987 Will, Rose named her husband Emmanuel Rubenstein as executor. Emmanuel died in 1990, many years before Rose’s death on August 1, 2010. Throughout those years after Emmanuel’s death, Dorothy Martin provided nursing and other services to Rose, who had no surviving children. Letters of Administration were granted to Dirk Simpson on September 22, 2010. On August 24, 2012, Dorothy Martin filed a notice of claim against Rose’s estate in the amount of $521,600 for services rendered to Mrs. Rubenstein during her lifetime.

On My 3, 2013, Dirk Simpson, as administrator filed an account of his administration of the Rubenstein estate covering the period August 1, 2010 through May 31, 2013. The account showed a balance of principal and income before distribution of $260,990.52. The accountant proposed to distribute the sums remaining to seven charities named in Rose’s will after paying all debts and a specific bequest of $5,000 to Joanne Keczely. Dorothy Martin filed objections to the account to reassert her claim for $521,600. The attorney general also filed objections to the account as to claimed counsel fees, but he subsequently withdrew that objection.

A hearing was scheduled for May 5, 2014 to consider Dorothy Martin’s quantum meruit claim for payment by the estate for the services she had rendered to Rose Rubenstein from 1990 to the time of her death on August 1, 2010. Both the estate’s administrator and the Attorney General oppose this claim.

Dorothy Martin is a licensed nurse practitioner who was originally hired sometime prior to 1990 to provide nursing services to Emmanuel (“Manny”) and Rose Rubenstein. After Emmanuel’s death in 1990, Dorothy continued to provide nursing services to Rose. Both the accountant and the attorney general concede, however, that during that time Ms. Martin also performed services for decedent that “went beyond those traditionally associated with nursing care.” The broad array of skilled services that Ms. Martin performed for Rose was outlined in detail by the four disinterested witnesses who testified in support of her quantum meruit claim.

The most impressive, authoritative witnesses were Sally Glassman and Rose Zavasky who worked for Merrill Lynch and had served as long-time financial advisers to the Rubensteins. Ms. Glassman, a wealth financial advisor at Merrill Lynch since 1980, was the head of the Glassman Group which was a team of financial advisers. Ms. Zavasky was a member of that team. Ms. Glassman first met Manny and Rose Rubenstein in 1984; she met Dorothy around the time of Manny’s terminal illness. Ms Glassman testified that while Emmanuel was alive, he handled the family finances. After his death in 1990, Dorothy Martin took over the day to day business of family finances because Rose was unable to do so due to her lack of experience, depression and multiple ailments.

When Dorothy was first hired to perform nursing services, there had been a concept of a “shift,” which Ms. Glassman could vouch for since she was in charge of overseeing the family’s financial arrangements. As time progressed, however, Dorothy’s hours and the nature of her services expanded and changed. Some weeks Dorothy worked as many as 80 hours. Glassman noted that she had frequent communications with Dorothy, sometimes three times a week, at other times as often as every day. Depending on the issue, they might communicate at 9 in the night. According to Ms. Glassman, Dorothy’s hours “were long. They were inconsistent with any kind of time clock. Dorothy was there when she was needed.” In Glassman’s view, Dorothy’s role was critical; she was “the lifeline for Rose.”

Glassman observed that Dorothy performed services beyond those of a nurse or care giver. For instance, she arranged for doctor appointments, took Rose to those appointments, discussed Rose’s medical treatment with her doctors, managed all aspects of the household, cared for the car and its inspections. In addition, Dorothy was the intermediary with Merrill Lynch for necessary payments and alerted them to when real estate taxes were due. In Glassman’s opinion, Dorothy effectively served as a house manager/administrator/healthcare professional. Eventually, Dorothy was named power of attorney, and Glassman had complete confidence in her serving in this highly responsible role. Yet Dorothy was never paid for these additional responsibilities. Ms. Glassman estimated that in the last 4 to 5 years of Rose’s life, Dorothy spent one-quarter to one-half of her time doing these more managerial additional tasks.

The reasons why Dorothy’s pay was never increased to compensate for the vital tasks she performed were manifold. Ms. Glassman testified that as Rose’s financial adviser she of necessity was concerned that Rose might outlive her financial resources, ironically because of the excellent care she received from Dorothy. As a consequence, Ms. Glassman emphasized the need for frugality which Dorothy took to heart, constantly looking for sales or carrying around coupons. There was also an “ethical” dimension to this; in the last 4 or 5 years of her life, Rose suffered increasingly from dementia. Ms. Glassman did not believe that Rose knew what was going on. There were times, for instance, when Rose did not recognize Ms. Glassman when she called; Rose would call Dorothy “mom;” she experienced “cognitive dissidence.” At some point, Glassman and Dorothy discussed her entitlement to a higher pay but both felt uncomfortable increasing her pay at a time when Rose lacked the capacity to appreciate the necessity for such an increase. The discussion between Ms. Glassman and Dorothy of this salary increase always floundered on the issue of Rose’s lack of capacity:

We agreed, I mean I said, you know, this is a lot of work, what you are doing is beyond the skills of what you were engaged to do. I am very grateful to you for doing it, but we should talk about a compensation arrangement. And the discussion always landed on the same doorstep, which is yes, we probably should have discussed it when Rose’s capacity was more complete, but because it wasn’t, it would be an unfair judgment to make because Rose wouldn’t have the knowledge that we were making it.

Dorothy was paid every week or so, and continued to be paid only for her nursing services. Because she was power of attorney, Dorothy made out the checks herself and kept meticulous records as demonstrated by Exs. 0-1 to 0-3 which list all the payments from the various Wachovia power of attorney accounts and general accounts. In 2008, for instance, Dorothy was paid $38,179.13 for “nursing services;” in 2009 she was paid $36,574.39 for “nursing services;” while in 2010, she was paid $22,893. Ex. O-l. No hint was raised that Dorothy in any way abused the financial trust she exercised over many years. Instead, Ms Glassman emphasized the extremely high, thorough and compassionate care Dorothy provided: “I am completely convinced that Rose Rubenstein would have died a long time ago if it weren’t for Dorothy.”

Rose Zavasky, the second witness in support of Dorothy’s quantum meruit claim, was also employed by Merrill Lynch. Ms. Zavasky stated that she had worked with Rose Rubenstein for 23 years. In the last 5 to 7 years, she spoke exclusively with Dorothy about financial matters. Ms. Zavasky also considered Dorothy as the critical link to the Glassman group, noting that Dorothy as power of attorney took care of everything for Rose. During that period, Ms. Zavasky interacted with Dorothy twice a week. She therefore was familiar with the many responsibilities Dorothy assumed. Dorothy paid all the bills; she oversaw all household duties; she alerted Merrill Lynch when money was needed for household expenses. When Rose needed 24 hour care, Dorothy hired and trained the caretakers. As Ms. Zavasky observed: “The care she gave Rose I have never seen before. It was unbelievable. She would — Rose lived as long as she did because of the care that she gave her. In every way.” Like Ms. Glassman, Rose Zavasky believed that Dorothy was never paid for these additional tasks: hiring, training and firing caretakers; handling the household finances; or maintaining the house. Ms. Zavasky also agreed that Rose lacked the capacity to appreciate the variety of the matters handled by Dorothy. She merely accepted those services.

The final two witnesses in support of Dorothy’s quantum meruit claim were nursing caretakers with direct knowledge of the nature and extent of Dorothy’s services to Rose. Quinette Rodgers worked as a caregiver to Rose from 2008 until Rose’s death in August 2010. She was hired by Dorothy, who also trained her. She observed that Dorothy’s responsibilities extended beyond nursing: she took care of the roof, arranged for repairs, did the shopping, interacted with doctors, arranged Rose’s appointments, oversaw lawn care, paid the taxes. In Quinette’s view, there was never a time when Dorothy performed only nursing services. While Quinette worked a 4 to 9 shift, Dorothy was “24/7.” If there was a problem at two in the morning, Dorothy was there. Whenever there was a problem, Quinette would call Dorothy and she was there. In Quinette’s opinion, Rose would never have fared well in a nursing home. She was a very dignified woman, but when hospitalized Rose would fight with the nurses and ask for “mommy.” In Quinette’s opinion, Rose suffered from dementia, frequently calling Dorothy “mommy.” Unable to handle her finances, Rose left that chore to Dorothy.

Alice Collins, who worked for Rose as a caretaker beginning in 2000, made similar observations of the quality care Dorothy gave to Rose. She noted, as well, the ways in which Dorothy’s care extended beyond nursing: Dorothy took Rose to the doctors; she paid the bills; she paid the caregivers; she did “everything.” Dorothy’s shift was “every shift;” she was always there. Ms. Collins also noted that Rose was very dignified, and Dorothy always made sure Rose was dressed nicely and not just left in pajamas. Ms. Collins did not work for Rose during her final six years of life, but even during her tenure, Ms. Collins concluded that Rose lacked the capacity to understand the significance of all that Dorothy did for her.

Significantly, the opposing parties chose not to cross examine Rose Zavasky, Quinette Rodgers and Alice Collins out of an apparent concern that any cross-examination might be construed as a waiver of the Dead Man’s Act. Their testimony is therefore unrebutted. Similarly, Ms. Glassman was asked only to clarify that she and Dorothy dealt with Rose’s finances and that in her view Rose was incapacitated though no proceedings were ever initiated. The key aspects of her testimony were likewise unchallenged and compelling.

Legal Analysis

A claim for quantum meruit is not based on an express contract. It is utterly distinct from a breach of contract claim. Lach v. Fleth, 361 Pa. 340, 348, 64 A.2d 821, 825 (Pa 1949). Claims against a decedent’s estate years after the services were rendered are subject to close and careful scrutiny to prevent injustice to the estate. Estate of Dart, 426 Pa. 296, 298, 232 A.2d 724, 725 (Pa. 1967). On the other hand, “the law is also clear that where one accepts valuable services from another, the law implies a promise to pay for them and the contract implied by law, a quasi contract, may support a claim against his estate.” Fronheiser Estate, 15 Pa. D & C 3d 176, 177 (Berks Cty. O.C. 1980)(citations omitted).

In the present case, Dorothy Martin’s claim for payment for her services to Rose Rubenstein during her lifetime that went beyond nursing or domestic care is in conflict with the claims of the charities who were the beneficiaries of Rose’s will. In this tug-of-war, there are undeniable practical and humane obligations that must be met. In a case with similar conflicting interests, the Pennsylvania Supreme Court observed that a claim for quantum meruit addresses those obligations:

The obligations which a man incurs during life, no less than his good deeds, live after him and, to the extent that he lives on through his property, he must discharge the obligations he failed to meet while alive. This is not to say that the record shows Mr. Lebo [the decedent] to have been an unjust man. On the contrary, generous legacies to charities enumerated in his will would attest to a benevolent nature, but, being human, he could, and possibly did overlook the most obvious of obligations, namely, that of paying for services rendered to one in connection with the very property which became the vehicle of his posthumous generosity.

Estate of Lebo, 403 Pa. 123, 125, 169 A.2d 105, 106 (1961)(Musmanno, J.)

There is no dispute that Dorothy Martin was initially hired by the Rubensteins sometime before 1990 to perform nursing services and that she was paid for those services. There is also no dispute that after Emmanuel Rubenstein’s death in 1990, Ms. Martin “performed services for Decedent that went beyond those traditionally associated with nursing care.”

In seeking to obtain payment for these services above and beyond nursing care, Ms. Martin must prove her quantum meruit claim. Under Pennsylvania law, a plaintiff seeking to recover payment for services rendered bears the “burden of proving (1) the performance of the services, (2) the decedent’s acceptance of them, and (3) their value.” Lach v. Fleth, 361 Pa. 340, 348, 64 A.2d 821, 825 (1949). Moreover, where a claimant seeks to recover payment for services rendered to a decedent after his death, she has the heavy burden of showing by clear and convincing evidence that payment for those services had not been made during the decedent’s lifetime. Consentino v. Vittoria, 394 Pa. 538, 541, 147 A.2d 839, 841 (Pa. 1959).

Typically, in a quantum meruit claim, the party seeking such payment from a decedent’s estate is barred under the Deadman’s Rule, 42 Pa.C.S.A §5930, from testifying about conversations with the decedent or “as to any transaction or event which occurred before the decedent’s death.” Hera v. McCormick, 425 Pa. Super. 432, 444, 625 A.2d 682, 688 (1993). See generally, Estate of Lebo, 403 Pa. at 126, 169 A.2d at 107. While this can create an enormous obstacle for a quantum meruit claim, in this case Ms. Martin easily overcame it by presenting the testimony of disinterested, authoritative witnesses as to the nature and extent of her services to Rose. Sally Glassman of Merrill Lynch had known the Rubensteins since 1984. In fact, Rose demonstrated her trust in Ms. Glassman by naming her as an alternative executor in her will. Likewise, Rose Zavasky, as a member of Merrill Lynch’s Glassman group, was intimately familiar with the Rubenstein’s financial matters since she had worked with Rose Rubenstein for over twenty years. Both witnesses outlined the demanding services Dorothy performed for Rose: paying the household bills including real estate taxes; hiring, training, supervising and firing caretakers; managing household affairs, supervising Rose’s medical care, alerting Merrill Lynch when cash infusions were necessary for household management.

The estate’s administrator, however, asserts that Dorothy’s claim for compensation for these services should be denied due to the legal presumption of payment. Because Ms. Martin was paid periodically for the nursing services she provided, he asserts, any additional services she may have provided are either gratuitous or not sufficiently distinct from nursing services as to merit additional payment. Numerous Pennsylvania cases, however, conclude that this presumption of periodic payment is limited only to domestic or nursing services. In Davies’ Estate, 60 Pa. Super. 360, *2, 1915 WL4422 (Pa. Super 1915), the court acknowledged the “presumption raised by the law to protect the estates of deceased persons from stale claims for the wages of ordinary services.” On the facts before it, however, the Davies court concluded that the services of a claimant as bookkeeper, clerk and general housekeeper were different from those of a domestic servant and, as a consequence, the presumption of periodic payment does not apply. Accord Estate of Lebo, 403 Pa. 123, 128, 169 A.2d 105, 108 (Pa. 1961)(where claimant was not a domestic servant, the presumption that payment was made at regular period does not apply); Estate of Gibbs, 266 Pa. 485, 489, 110 A. 236 (Pa. 1920) (the presumption of periodical payments applies to claims for domestic servants). It is clear from the testimony of Ms. Glassman and Ms. Zavasky that Dorothy’s services were far more managerial than domestic or nursing services. That testimony was unrebutted and unchallenged by cross-examination. See generally In re Mack’s Estate, 278 Pa. 426, 430, 123 A. 462, 463 (Pa. 1924)(noting failure to cross examine testimony that payment had not been rendered for services left that testimony unchallenged).

As evidence both of her careful handling of Rose’s finances and the limited nature of the payments she had received, Dorothy presented a chart of checks paid to her drawn from various Wachovia accounts from April 2007 to August 4,2010. These checks bore the memo “nursing” and demonstrated that Dorothy had received $26,762.31 for nursing services in 2007; she had received $38,179.13 for nursing services in 2008; she had received $36,574.39 for nursing services in 2009 and she received $22,893 for nursing services in 2010. See Ex. 0-1. No challenge was presented to this evidence of payment for nursing services. In fact, counsel for the administrator and for the attorney general stipulated to their admission. This record thus establishes that Dorothy was paid solely for her nursing services. No evidence to the contrary was presented.

Since claimant established that she had provided financial and administrative services to Rose for which she had not been compensated despite Rose’s acceptance of those services, the next challenge is to assess the amount of damages. The assessment of damages for a breach of contract action also differs from assessment of damages in a quantum meruit claim:

Their respective measure of damages are not the same. In one action the measure of damages is fixed by the parties; in the other action it is fixed by law. When one contracts for the services of another and receives and accepts those services, but without specifying what the compensation shall be, a recovery for the value of services must be by an action on a quantum meruit.

Lach v. Fleth, 361 Pa. at 348, 64 A.2d at 825.

To buttress her claim for damages, Dorothy presented the expert report ofAnn Myers as to the levels of compensation between 1990 through 2010 for caregivers/home health aides and care managers. All counsel stipulated to the admission of these expert reports without the necessity of calling Ms. Meyers to testify as to its content. According to this report, a home health care aide provides routine personal healthcare to an individual in his or her home. In contrast, a care manager “provides planning, advocacy and service coordination for the elderly or disabled.” Their pay scales differ to reflect the different levels of services provided. While home health care aides in 2009 and 2010 received an hourly wage of $23, the rate of pay for care managers was considerably higher to reflect their more varied services to provide coordination of in-home care and financial services for an elderly or incapacitated person. In 2008 through 2010, a care manager would typically receive between $85 to $100 per hour.

The statute of limitations must also be factored into these calculations. The claimant contends the relevant statute of limitations is 6 years, citing two old cases: Koonce’s Estate, 105 Pa. Super. 539, 161 A. 578 (1932) and In re Porter’s Estate, 110 Pa. Super. 27, 167 A. 490 (1933). Koonce’s Estate, in turn, relied on 12 PS §31, which is no longer in effect. There is presently a specific statute of limitations in effect for a quantum meruit claim set forth in 42 Pa.C.S.A. §5525 as four years. Ragner Benson Inc. v. Bethel Mart Assocs., 308 Pa. Super. 405, 414, 454 A.2d 599, 603 (1982); Bednar v. Marino, 435 Pa. Super. 417, 427, 646 A.2d 573 (Pa. Super. 1994)(action for quantum meruit on an implied contract is subject to a four year limitation). This then raises the issue of the application of this 4 year limit. The claimant suggests that the limitation applies back from the time of the filing of the account, relying once again on In Porter’s Estate, 110 Pa. Super. 27, 167 A.490 (1933) and In re Koonce’s Estate, 105 Pa. Super. 539, 161 A. 578 (1932). In explaining this calculation back from the filing of the account, the court in Koonce’s Estate rejected the suggestion that the quantum meruit claim did not begin to run until the termination of employment. The court noted that there had been a long period of employment with an uncertain rate of compensation. The claimant had made several demands for payment but did not bring a claim on them until an account was filed after decedent’s death. According to the Koonce Estate court, the filing of an account in such a quantum meruit claim based on a long period of service “has the effect of a pending suit” or was tantamount to making a claim. In the present case, in contrast, Dorothy Martin did not wait until the filing of an account to assert her claim against the estate. Instead, she filed a notice of claim on August 24,2012 so that the statute of limitations should count back 4 years from that formal claim to August 24,2008. Ms. Martin is therefore entitled to compensation for her service to Rose for the two year period from August 24,2008 to August 1,2010, the date of Rose’s death.

The testimony as to the amount and dates of Dorothy’s longstanding service to Rose admittedly lacks specificity but this is not uncommon in quantum meruit cases. As one court emphasized in recognizing a quantum meruit claim, “[w]hile it is true that the claim is not supported by evidence showing the precise days on which she worked and showing exactly how many hours she worked for decedent each day, the evidence is uncontradicted that for ten months the claimant provided essential services to the decedent.” Fronheiser Estate, 15 Pa. D. & C. 3d 176, 179 (Berks Cty. O.C. 1980). The same is certainly true for Ms. Martin who was characterized as “the lifeline” for Rose by her Merrill Lynch advisor, Sally Glassman. In cases premised on quantum meruit against a decedent’s estate, the amount and nature of services is typically elicited through testimony by disinterested individuals who witnessed those services. See, e.g. Estate of Lebo, 403 Pa. 123, 169 A.2d 105 (1961)(one witness testified that claimant made investments and paid bills for decedent while a bank vice president testified that claimant came to the bank on decedent’s business 3 or 4 times a week); Lack v. Fleth, 361 Pa. 340, 64 A.2d 821 (Pa. 1949)(testimony by neighbor, claimant’s step-daughter, observer and mine employer as to services rendered by claimant provided sufficient basis for estimating with reasonable certainty claimant’s quantum meruit payment).

In this case, Ms. Glassman testified that Dorothy worked long hours that were inconsistent with a clock. There were weeks when Dorothy worked as much as 80 hours. Ms. Glassman stated that she had frequent contact with Dorothy, usually 3 times a week but sometimes every day when necessary. Based on this contact, she estimated that in the last 5 years of Rose’s life, Dorothy spent one-quarter to one-half of her time doing the administrative tasks other than nursing. Ms. Zavasky of Merrill Lynch, likewise, consulted closely with Dorothy on issues involving Rose’s care. She noted that Dorothy gave Rose incredible care; in fact, she believed “Rose lived as long as she did because of the care that she [Dorothy] gave her.” Dorothy managed the 24 hour care Rose came to need while paying the bills. Quinette Rogers, who worked as a caregiver for Rose from 2008 until Rose’s death on August 1,2010, testified that Dorothy was “24/7.” She was available to care for Rose 24 hours a day. Dorothy would come to work at 7 a.m. and then every day stay around after Quinette arrived to take care of lawn care, medications, coordinating the work of 3 caregivers, shopping, paying taxes. Significantly, none of this testimony was subjected to cross-examination or subjected to conflicting evidence.

Although this evidence is unrebutted, it is also necessarily imprecise. Because claims against a decedent’s estate are subject to strict scrutiny, the more conservative estimate by Ms. Glassman that Dorothy spent one-quarter of her time on non-nursing or managerial tasks should be applied. If, again conservatively, Dorothy is credited with working a 40 hour week for Rose, then 10 hours a week would have been devoted to managerial responsibilities. According to the expert report of Ann Meyers, for the period between 2009 through 2010 care managers providing services as an independent contractor would have been paid between $85 to $100 per hour. Applying the lower $85 per hour fee to ten hours per week would result in $850 per week for managerial services. But Dorothy admittedly was paid for her nursing services. It is therefore necessary to integrate the salary differential between the payments she received for nursing services and the payment she was due for care manager services by the following calculations:

(1) Calculate the average hourly rate for nursing services that Dorothy received from August 2008 through August 2010 which is $ 18 per hour for nursing services;
(2) Subtract that hourly rate for nursing services from the $85 hourly rate for care manager services, which would be $67;
(3) Multiply this $67 differential by 10 to obtain $670 as the weekly added payments due Dorothy for her care manager services over the nursing care payments she received;
(4) Multiply that weekly differential of $670 by 52 to determine the added payments due Dorothy for 1 year of service as care manager, which would be $34,840;
(5) Multiply $34,840 by 2 to obtain the total amount due Dorothy for the period August 2008 through August 1, 2010 which would be $69,680 for her care manager services.

For the slightly less than 2 year period from August 24, 2008 through August 1, 2010 for which Dorothy may recover under the statute of limitations, Dorothy Martin is therefore entitled to $69,680 as quantum meruit compensation for the additional managerial services she performed for Rose for which she was not compensated.

Because the account as filed did not recognize the claim of Dorothy Martin, it shall be returned unaudited. In the interest of providing appellate review of this conclusion, if desired, a final order recognizing the claim of Dorothy Martin shall be contemporaneously issued.

      . 7/16/14 Attorney General Brief at 1. Accord 7/17/14 Accountant Brief at 1.

       75/5/14 N.T. at 17-19 (Glassman); 5/5/14 N.T. at 34-35 (Zavasky).

      . 5/5/14 N.T. at 22 (Glassman).

      . 5/5/14 N.T. at 32, 20-21,25-26 (Glassman).

      . 5/5/14 N.T. at 28 (Glassman).

      . 5/5/14 N.T. at 20 (Glassman).

       7375/14 N.T. at 20 (Glassman).

      . 5/5/14 N.T. at 20-24 (Glassman).

      . 5/5/14 N.T. at 24-26 (Glassman).

      . 5/5/14 N.T. at 30 (Glassman).

       /5/14 N.T. at 26-29 (Glassman).

      . 5/5/14 N.T. at 31 (Glassman).

      . 5/5/14 N.T. at 23 (Glassman). Ms. Martin’s attorney specifically asked a Merrill Lynch representative, Rose Zavasky, whether she ever had any concern that Dorothy may have been handling Rose’s finances inappropriately. She responded: “I did not feel that way, no, sir.” 5/5/14 N.T. at 37 (Zavasky).

      . 5/5/14 N.T. at 31 (Glassman).

      . 5/5/14 N.T. at 35-36 (Zavasky).

      . 5/5/14 N.T. at 38 (Zavasky).

      . 5/5/14 N.T. at 39

       Ü/5/14N.T. at 42-46, 50-53 (Rodgers).

      . 5/5/14 N.T. at 56-66 (Collins).

      . 7/16/14 Attorney General Brief at 1. See also 7/17/14 Administrator’s Brief at 1 (“From some time prior to 1990 until the death of Rose Rubenstein (“decedent”) on August 1, 2010, objectant was decedent’s nurse and caregiver. During that time, objectant also performed services for decedent that went beyond those services traditionally associated with nursing care”)(citations omitted).

      . 7/17/14 Administrator’s Brief at 3-4.

      . 5/5/14 N.T. at 68-69.

      . 5/5/14 N.T. at 80-81. The expert report is Ex. 0-7.

      . Ex. 0-7 at ¶2.

      . Ex. 0-7. These are the rates for individuals providing care manager services as an independent contractor. Compensation for services provided through an agency are slightly higher at $120 an hour in 2008 and 2010.

      . 6/20/14 Martin Brief at 28. Since the account was filed on July 3, 2013, she would count back 6 years to July 2007 and calculate the amount of damages due for services between July 3, 2007 through Rose’s death on August 1, 2010.

      .42 Pa.C.S.A. §5525. Four year limitation
      (a) General rule. Except as provided for in subsection (b), the following actions and proceedings must be commenced in four years:
      (4) An action upon a contract implied in law, except an actions subject to another limitation specified in this subchapter.

        In re Koonce, is annotated under a different statute of limitations for six years in 42 Pa.C.SA. §5527. This section deals specifically with eminent domain and with “(b) Other civil action or proceeding — Any civil action or proceeding which is neither subject to another limitation specified in this subchapter nor excluded from the application of a period of limitation by section 5531 (relating to no limitation) must be commenced within six years.” Section 5525(a)(4), however, specifically references quantum meruit. As a general rule of statutory interpretation, the more specific provision of section 5525(4) would control over the general provision of section 5527. See 1 Pa.C.S.A. §1933.

      . Both of these cases applied a 6 year statute of limitations based on 12 P.S. §31, which is no longer in effect.

      . In re Koonce’s Estate, 105 Pa. Super, at 542, 161 A. at 579. In a much earlier case, the Pennsylvania Supreme Court suggested that the statute of limitations for a quantum meruit did not mature until the decedent’s death so there would be no bar to recovery of any part of the claim in that case. The court ultimately concluded, however, that the jury charge as to the computation of damages had erred. Kaus v. Rohner, 172 Pa. 481, 33 A. 1016 (Pa. 1896).

       5/5/14 N.T. at 30, 20, 28, 32 (Glassman)

      . 5/5/14 N.T. at 37 (Zavasky).

      . 5/5/14 N.T. at 47, 52, 53 (Rogers).

      . 5/5/14 N.T. at 47-49 (Rogers).

      ~2008: $38,179
      2009: $36,574
      2010: $39,245 (as average for 2010)*
      $113,998 for 3 years divided by 3 = $37,999 as average annual salary Divide this average annual salary of $37,999 by 52 weeks = $731 per week
      Divide this average weekly salary of $731 by 40 to get the hourly rate of $ 18.26 or $ 18 an hour for nursing services.


source: Caselaw Access Project

author: TUNNELL, J.,

license: Public Domain

text:
    Carrington v. F.D. Builders Inc.

      C.P. of Chester County,
    No. 2014-01263-TT

      Kevin B. Watson and Kathryn E. Pettit, for plaintiff.

      Anthony S. Pinnie, for defendants.
    Oct. 21, 2014
   TUNNELL, J.,

ORDER

And now, this 21st day of October, 2014, upon consideration of defendants’ preliminary objections to plaintiff’s complaint, plaintiff’s response thereto, and all other matters of record, it is hereby ordered and decreed as follows:

1. Defendants’ objection for lack of privity and standing is dismissed;
2. Defendants’ objection for legal insufficiency of plaintiff’s claim of “fraud (negligent misrepresentation)” is dismissed; and
3. Defendants’ objection for legal and factual insufficiency as to defendant, Frank DiSerafino, is sustained and said defendant is dismissed without prejudice.

Plaintiff is granted leave to file an amended complaint within twenty (20) days of the date this order is docketed.

      . Presently before the court are the preliminary objections of defendants, F.D. Builders, Inc., and Frank DiSerafino (collectively “defendants”) to plaintiff’s complaint. For the reasons set forth below, the objections will be dismissed in part and sustained in part.
      The facts giving rise to this litigation, as taken from plaintiff’s complaint, are as follows: Sometime prior to August, 2000, defendants were general contractors engaged in the “development and construction” of a residential home located in Kennett Square, Pennsylvania. On August 7, 2000, this property was conveyed by general warranty deed from defendant, F.D. Builders, Inc., to its prior owners, John and Denise Feenan. The Feenan’s subsequently sold the property to plaintiff herein, Edward Carrington, on February 14, 2003. According to plaintiff’s complaint, approximately 9 years later, on June 27, 2012, plaintiff retained a third-party home inspection company to perform a “Building Moisture Survey” of his residence. (See Plf.s’ Ex. C). The survey revealed, inter alia, evidence of ongoing moisture infiltration into various areas of the exterior of the residence. Plaintiff avers that he attempted to contact defendants with regard to the findings contained in the home inspection survey, but never received a response.
      Suit was filed against defendants on February 21, 2014. Plaintiff’s complaint contains four purported causes of action. They are (1) negligence; (2) breach of implied warranty; (3) violation of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law “(UTPCPL”); and (4) “Thirty Party Beneficiary”. Defendants filed preliminary objections to the complaint on April 9 and oral argument on the objections was subsequently held on October 8, 2014. The matter is thus ripe for the court’s disposition.
      Threshold Issue
      The court will initially address a threshold issue that developed subsequent to the filing of the objections in this case. On September 5, 2014, this court’s chambers received a letter from defendants’ counsel in which he asserted two additional grounds to object to plaintiff’s complaint. First, counsel’s letter stated that the Pennsylvania Supreme Court’s recent decision in Conway v. The Cutler Group, Inc., _ A.3d _, 2014 WL 4064261 (Pa. 2014) required the dismissal of plaintiff’s implied warranty and third party beneficiary/breach of contract claims. Second, counsel indicated that plaintiff’s claim for negligence was also subject to dismissal pursuant to what is commonly referred to as the “gist of the action doctrine”. See, eToll, Inc. v. Elias/Savion Adver., Inc., 811 A.2d 10 (Pa. Super. 2002). Counsel concluded his letter by requesting that the court “add these points to the Defendants’ Preliminary Objections". The court declines to do so.
      Preliminary objections are pleadings. See, Pa.R.C.P. No. 1017(a)(1) (4). In order for a party to assert preliminary objections, they must be filed of record with the prothonotary. Id at No. 1028(a)(4) (Providing that preliminary objections “may be filed by any party... “); Id. at No. 1026(a) (Providing that “every pleading subsequent to the complaint shall befiled within twenty days after service of the preceding pleading... “); see also, Id., at Nos. 204.1-205.4 (Rules relating to filing of pleadings and other legal papers with the prothonotary). In this case, defense counsel asserted additional grounds for objection in a letter to the court’s chambers, rather than presenting them by way of formal objection. Cfi, Id. at 1028(b) (Stating that “[a]ll preliminary objections shall be raised at one time.”). Defense counsel’s letter is certainly not a pleading. The court, therefore, must decline to consider the contents of that letter for purposes of the present objections. See, Com. ex rel. Corbett v. Peoples Benefit Servs., Inc., 895 A.2d 683, 690 (Pa. Cmwlth. 2006)(Sitting in original jurisdiction, and declining to consider an argument on preliminary objections that was asserted “only... in a footnote in [defendant’s] brief to the court, rather than raising the matter in its preliminary objections.”).

        Preliminary Objections
      For ease of disposition, the court has both restated and renumbered the manner in which defendant’s objections were originally presented to the court.
      (a) First Objection — Lack of Privity
      The entirety of defendants’ first preliminary objection is as follows: 21. Plaintiff’s complaint avers, inter alia, that the property was sold by the defendant F.D. Builders, Inc. to the Feenans and then to the current plaintiff Carrington. (Citation to exhibit omitted).
      22. Therefore, privity does not exist between the builder and the current owner/plaintiff Carrington. The current owner/plaintiff Car-rington has no standing to bring this suit.
      (Def.s’ Obj. at ¶¶ 21-22). The court declines to consider this objection. “Privity of contract” has been defined as “[t]he relationship between the parties to a contract, allowing them to sue each other but preventing a third party from doing so. Black’s Law Dictionary, 1394 (10th ed. 2009). In this case, however, defendants’ objection fails to make any attempt to explain to the court how or why a lack of privity between the parties would preclude the entirety of plaintiff’s suit. The complaint asserts four purported causes of action: negligence, breach of implied warranty, violation of the UTPCPL, and breach of contract (on a third-party beneficiary theory). Whether or not privity is a prerequisite to the assertion of such claims has been the subject of considerable appellate review. See, e.g., Woodward v. Dietrich, 548 A.2d 301, 315 (Pa. Super. 1988) (Noting that our Supreme Court has previously held that “a contractor may be held liable for damages caused by [negligent construction work] despite the absence of privity between the contractor and the homeowner.”); Conway v. The Cutler Group, Inc., supra, _ A.3d _, 2014 WL 4064261 (Pa. 2014) (Holding that an action for breach of the implied warranty of habitability requires contractual privity between the parties, and that, as a result, the warranty does not run to second or subsequent purchaser of a newly constructed residential property); Valley Forge Towers S. Condo, v. Ron-Ike Foam Insulators, Inc., 574 A.2d 641, 647 (Pa. Super. 1990) aff’d, 605 A.2d 798 (Pa. 1992) (Holding that “strict technical privity was not intended by our legislature to be required to sustain a cause of action under [the UTPCPL].”); Scarpitti v. Weborg, 609 A.2d 147, 149 (Pa. 1992) (Explaining that an intended third-party beneficiary is entitled to maintain an action in assumpsit despite not being in privity with the original contracting parties). Here, defendants have cited to none of the above-stated cases, or any other relevant line of precedent, in order to present the court with a cogent argument as to why a lack of privity acts as a bar to all of plaintiff’s claims. Instead, defendant’s loosely asserted objection merely states a legal conclusion, i.e., a lack of privity between the parties divests Plaintiff of standing to maintain his action. This argument is woefully inadequate to do the heavy-lifting necessary to justify dismissal of the entire complaint. See, Pa.R.C.P. No. 1028(a) (Requiring preliminary objections to state the grounds relied on); cf., Berkstresser v. Riverside Markets, 27 Pa. D. & C.3d 630, 633 (Pa. Com. Pl. 1982) (“If the court cannot ascertain what ground is being asserted due to the vagueness of the objection, it will be dismissed.); Brennan v. Smith, 299 A.2d 683, 685 (Pa. Cmwlth. 1972) (Sitting in original jurisdiction, and dismissing demurrer that stated: “Plaintiff’s complaintfails to state a cause of action against defendants” as inadequate to make out a proper objection). Defendants’ objection to lack of privity is, accordingly, dismissed.
      (b) Second Objection — Misrepresentation
      For similar reasons, the Court is compelled to dismiss defendants’ second preliminary objection. In that objection, defendants’ demurrers to plaintiff’s claim for “fraud (negligent misrepresentation)” because plaintiff’s complaint “fails to contain any material facts giving rise to a viable cause of action against defendant Frank DiSerafino individually.” (Defs.’ Obj. at 28). In response, plaintiff asserts that “[t]he allegations contained in Paragraphs 22-27 of the complaint sufficiently set forth a valid claim of misrepresentation against both defendants.” (Plf.s’ Res. Mem. at 3).
      The court makes the following observations. First, it is unclear whether defendants’ objection has been asserted on behalf of the both defendants or solely on behalf of defendant DiSerafino. {See Def.’s Obj. at ¶ 28 (Stating that “plaintiff has failed to state a claim against the defendants upon which relief maybe [sic] granted and cannot do so as a matter of law as plaintiff’s complaint clearly fails to contain any material facts giving rise to a viable cause of action against defendant Frank DiSerafino individually...”)). Second, it is also unclear as to what claim of misrepresentation the parties make reference. None of the counts of the complaint are formally labeled “fraud” and/or “negligent misrepresentation”, and the averments to which plaintiff refers the court (¶¶22-27) are contained within the “general allegations” section of the Complaint.
      The court recognizes that a plaintiff need not identify a specific legal theory underlying a complaint, and that “it is duty of the court to discover from the facts alleged in a complaint the cause of action, if any, stated therein.” Egan v. USI Mid-Atl., Inc., 92 A.3d 1, 21 (Pa. Super. 2014) (quoting Cardenas v. Schober, 783 A.2d 317, 325 (Pa. Super. 2001)). However, this fact cannot relieve an opposing party from properly asserting those grounds upon which a preliminary objection is based. See, supra, Pa.R.C.P. No. 1028(a); Berkstresser, 27 Pa. D. & C.3d at 633; Brennan, 299 A.2d at 685. The requirement becomes all the more apparent when one considers the nature of a claim for “misrepresentation” in Pennsylvania and the fact that plaintiff has pled a purported violation of the UTPCPL, a conceptually similar cause of action. The term “fraud” is typically used solely in reference to the tort of intentional misrepresentation. See, Pflumm Paving & Excavating, Inc. v. Found. Servs. Co., 816 A.2d 1164, 1171 (Pa. Super. 2003). And, while the torts of intentional and negligent misrepresentation differ, their elements each contain a “materiality” and “justifiable reliance” requirement. See, Bortz v. Noon, 729 A.2d 555, 560 (Pa. 1999). Similarly, in order to maintain a private cause of action for deceptive conduct under the UTPCPL, which prohibits, inter alia, a person from “[e]ngaging in any other fraudulent or deceptive conduct which creates a likelihood of confusion or of misunderstanding,” 73 P.S. § 201-2(4)(xxi), a plaintiff must show that he justifiably relied on the defendant’s wrongful conduct or representation, and that he suffered harm as a result of that reliance. Yocca v. Pittsburgh Steelers Sports, Inc., 854 A.2d 425, 438 (Pa. 2004). With these considerations in mind, the uncertainty of defendants’ objection becomes apparent.
      Plaintiff’s Paragraphs 22-27 allege that that defendants “misrepresented the quality, condition, nature, suitability and fitness of the [rjesidence” when, at the time of its construction, defendants “participated in and authorized marketing, advertising, and sales statements”, presumably in an effort to sell the property. (Plf.s’ Com. at ¶25 — 26). However, the relevancy of such averments is not apparent until Count III of the complaint, where plaintiff avers that defendants’ “misrepresentations and nondisclosures”, by way of “brochures, verbal [statements], conduct, signage, model Units, plans and contracts”, all of which Plaintiff “acted in reliance upon”, constitutes a violation of the UTPCPL. (Plf.s’ Com. at ¶¶ 44, 46 — 47). Thus, based on the averments of the Complaint and the applicable law, it is unclear whether defendants have objected to a perceived claim for (a) fraud (intentional misrepresentation); (b) negligent misrepresentation; (c) both; (d) are actually objecting to plaintiff’s purported claim for a violation of the UTPCPL; or (e) some combination of the aforesaid. Given this confusion, the court will not engage in an unbridled analysis in service of defendants’ demurrer to plaintiff’s claim for “misrepresentation”. See, Battiste v. Borough of E. McKeesport, 94 A.3d 418, 423 n. 7 (Pa. Cmwlth. 2014) (“A trial court should not act as a party’s advocate.”). Defendants’ second objection is, accordingly, also dismissed.
      (c) Third Objection — Insufficient Specificity in a Pleading and Legal Insufficiency as to Defendant Frank DiSerafino
      Finally, defendants object to the legal and factual sufficiency of the complaint solely with regard to the individual defendant, Frank DiSerafino. More specifically, defendants argue that plaintiff’s allegations fail to contain any specific facts giving rise to a “theory of liability” against defendant DiSerafino, thereby rendering the claims against him impermissibly vague and legally insufficient. The court agrees.
      As an initial matter, the complaint is unclear as to the relationship between the two defendants. Plaintiff has averred that defendant F.D. Builders, Inc., is a Pennsylvania corporation and that defendant DiSerafino “is an adult individual residing in Delaware County, PA.” (Plf.s’ Com. at ¶3). The only other allegations of the complaint that elucidate the relationship between the defendants (prior to plaintiff’s collective reference to F.D. Builders and DiSerafino as “defendants” throughout the remainder of the complaint) are the following:
      8. Defendants were the developers and builders of the Residence.
      10. At all times material to this complaint, defendants were engaged in the development and construction of the Residence.
      11. Defendants were the general contractors for the residence. (Plf.s’ Com. at ¶¶ 8, 10-11). In addition, the general warranty deed executed between F.D. Builders and John and Denise Feenan, attached to plaintiff’s complaint as Exhibit B, lists the Grantor as “F.D. Builders, Inc. T/A DiSerafino Custom, Builders, Inc." (Plf.s’ Ex. B; see also, Plf.s’ Com. at ¶ 6). Thus, at best, the court may draw the reasonable inference that defendant DiSerafino is an officer and/or director of the corporate entity, F.D. Builders, Inc., despite the fact this is not made clear in the allegations of the complaint.
      That being said, it was plaintiff’s obligation to plead some theory of liability as to the individual defendant, and to do so with regard to each claim plaintiff has set forth in his complaint. See, e.g., Lumax Indus., Inc. v. Aultman, 669 A.2d 893, 895 (Pa. 1995) (Liability for corporate breach of contract may be imputed upon individual officer of corporation on theory of piercing the corporate veil); Wicks v. Milzoco Builders, Inc., 470 A.2d 86, 90 (Pa. 1983)(Corporate officer may be held individually liable for officer’s personal participation in tortious activity of corporation under “participation theory”); Conway v. Cutler Grp., Inc., supra, _ A.3d _, 2014 WL 4064261 *2 (Pa. 2014) (Noting that an action for breach of implied warranty is “rooted in the existence of a contract — an agreement of sale — between the builder-vendor of a residence and the purchaser resident.”); Bennett v. A.T. Masterpiece Homes at Broadsprings, LLC, 40 A.3d 145, 147 (Pa. Super. 2012) (Holding that evidence produced at trial was sufficient to prove that individual contractor had “personally assumed” liability on agreements of sale entered into solely between business entity and homeowners for construction of new residential homes); Scarpitti v. Weborg, supra, 609 A.2d 147, 150—51 (Pa. 1992) (Explaining that when a contract confers the status of intended beneficiary on a third party, the beneficiary is entitled to pursue an independent cause of action to enforce the contract against the original contracting parties). In this case, defendants’ have rightly objected to plaintiff’s failure to aver any “material facts to inform [defendants] of the alleged basis of liability” against defendant DiSerafino in his individual capacity. (Defs.’ Obj. at ¶¶24,29-33). While plaintiff does make repeated use of the plural “defendants” in reference to the alleged liability-producing conduct, it is simply unclear as to the manner in which defendant DiSerafino’s individual liability arises in the first instance, particularly when complaint and attached Exhibit B gives rise to an inference that defendant DiSerafino was officer/director of the corporate defendant, F.D. Builders, Inc. defendants’ final preliminary objection is, accordingly, sustained.

      . The court notes that defendants could have sought to amend their objections either by consent of the parties or leave of court. See, Pa.R.C.P. No. 1028(c)(1); 1033; Com., Dept. of Transp. v. Schodde, 433 A.2d 143 (Pa. Cmwlth. 1981).


author: SPRECHER, J.,

text:
    GE Commercial District Financial Corp. v. Sports-Cycles, Inc.

      C.P. of Berks County,
    No. 13-16053

      Michael J. Dougherty, for plaintiff.

      Anthony R. Distasio, for defendants.
    Nov. 20, 2014
   SPRECHER, J.,

Defendants appeal the order dated September 16,2014, which granted plaintiff’s motion for summary judgment against defendants, jointly and severally, in the amount of $204,396.65 plus attorney fees and costs in the amount of $27,828.19. This opinion is filed pursuant to Pa. R.A.P. 1925.

FACTS

Plaintiff’s principal business is a type of secured lending called “floorplan financing” whereby plaintiff finances a dealership’s purchase of inventory from third party manufacturers and distributors for the dealership to sell to retail customers.

On June 9,2011, plaintiff, GE Commercial Distribution Finance Corporation, entered into financing agreements (agreements) with defendant, Sport-Cycles, Inc., pursuant to which plaintiff provided financing to defendant for its acquisition of inventory to sell to the general public. Defendant, Joseph Dzurkovich (hereinafter, guarantor), entered into a guaranty wherein he unconditionally guaranteed defendant’s obligations to plaintiff under the agreements.

Defendant defaulted under the terms of the agreements by failing to pay plaintiff the amounts due and owing. Pursuant to the agreements, defendants are liable for plaintiff’s costs, expenses, and attorney fees incurred in the enforcement of the agreements.

In August 2012 defendant defaulted under the agreements by failing to make payments in the amount of $165,083.32. On August 28, 2012, plaintiff notified defendants by letter that defendant was in default of the agreements for failing to make payment to plaintiff in the aforesaid amount. The letter advised defendants that if plaintiff did not receive a payment within five days, plaintiff could declare the entire unpaid principal balance due and all accrued and unpaid interest or other charges thereon immediately due and payable.

Defendants did not cure the default. On September 7, 2012, plaintiff notified defendants by letter that plaintiff had terminated its credit with them and had accelerated the indebtedness at that time. This amount was $528,052.78. Defendants did not pay or cure the default.

OnDecember 7,2012, defendants executedaforbearance agreement and release (forbearance agreement) wherein defendants acknowledged the defaults and amounts under the agreements. Guarantor also reaffirmed and agreed to his personal liability for the foil amount of the debt owed to plaintiff. In consideration of plaintiff’s agreement to forbear from immediately exercising its rights under the agreements, defendants agreed to pay as required under the agreements and to pay the entire indebtedness on or before January 15,2013.

Defendants defaulted. The current balance due is $204,396.65 plus accruing interest charges and other amounts. Defendant and guarantor are jointly liable.

Defendants filed an answer with new matter. Defendants admit that agreements were entered into on June 9, 2011. Defendants deny that plaintiff extended any credit or financing under the agreements. Defendants admit that guarantor executed a guaranty, but they deny that guarantor unconditionally guaranteed the indebtedness and obligations under the agreements. Defendants deny that there was a default.

Based on the record, including the agreements and the guaranty, this court granted summary judgment in favor of plaintiff and against the defendants. Defendants filed a timely appeal.

ISSUES

Defendants raise the following issues in their concise statement of errors complained of on appeal.

1. The present matter was not ripe for summary judgment as the motion was filed just 2 1/2 months after the pleadings were closed, prior to any formal discovery and plaintiff failed to produce any relevant documents with informal requests, for the first time attaching some relevant documents to its brief filed 2 months after its motion for summary judgment.

2. This court erred in entering summary judgment since it remains unproven the existence and terms of any contract upon which plaintiff can assert a breach and damages. Even if summary judgment was granted, a separate trial on the amount of damages should have been held.

3. This court erred in entering summary judgment for attorney fees, which are actual, reasonable attorney fees when there was no substantiation of the $27,828.19 in attorney fees incurred for the mere filing of a complaint, an amended complaint and a summary judgment motion. A separate trial on the amount of attorney fees should have been held.

DISCUSSION

To withstand a motion for summary judgment, nonmovant must adduce sufficient evidence on issues essential to his case and on which he bears the burden of proof, such that a jury could return a verdict in his favor. A failure to adduce this evidence establishes that there is no genuine issue of material fact and that movant is entitled to judgment as a matter of law. Zachardy v. Geneva College, 733 A.2d 648 (Pa. Super. 1999). In the case sub judice, defendants did not produce any evidence that established a genuine issue of material fact.

Defendants first contend that summary judgment was entered before the parties could engage in formal discovery. This contention is without merit. Discovery would not have produced any additional evidence that could have prevented the entry of summary judgment against defendants. Defendants admit that financing agreements were entered into on June 9, 2011. Although defendants deny that plaintiff extended any credit to them under the agreements, the forbearance agreement belies this assertion:

A. CONFIRMATION OF INDEBTEDNESS

1. As of December 4, 2012, dealer and guarantor acknowledge and agree that under the security documents, dealer and guarantor owe lender the sum of $169,327.30 (“debt”) on dealer #173436 of which $134,772.98 represents principal and $34,554.32 represents inventory sold for which lender has not received payment (“SOT”); interest continues to accrue on the debt.
2. As of December 4, 2012, dealer and guarantor acknowledge and agree that under the security documents, dealer and guarantor owe lender the sum of $147,228.42 (“debt”) on dealer #156053 which represents inventory sold for which lender has not received payment (“SOT”); interest continues to accrue on the debt.

Thus, defendants acknowledged that they borrowed money from plaintiff and they failed to make all the payments owed on the loans.

Defendants assert that a separate trial on the amount of the damages should have been held even if the summary judgment had been granted for plaintiff. This issue is meritless. Paragraph A states the amounts owed to plaintiff. Pursuant to the forbearance agreement, interest continues to accrue. Defendants’ answer contends that Suzuki filed for bankruptcy and did not produce any new products, causing sales to stagnate and inventory that was financed to become stale; therefore, defendant had unsaleable inventory whose financing costs exceeded any possible profit margin.

These facts may be true, but it has nothing to do with the agreements and the forbearance agreement. Any claim for damages would be against Suzuki, the manufacturer of defendant’s inventory. It is no defense on the merits to the action brought by plaintiff, the finance company, against defendants, the retailer and guarantor, to recover the balance due on the Agreements. G.A.C. Credit Corporation v. Acme Accordion Studios, Inc., 220 Pa. Super. 148, 286 A.2d 678 (1971). The damages are as stated in the forbearance agreement.

Defendants’ last assertion is that this court erred in entering summary judgment for attorney fees because there was no substantiation of the $27,828.19 fees in the instant case, and a separate trial on the amount of attorney fees should have been held. This issue is without merit.

The agreements provide that defendants owe all reasonable attorney fees and legal expenses incurred by plaintiff for, inter alia, establishing, perfecting, maintaining perfection of, protecting, and enforcing its lien on the collateral and collecting any obligations regarding defendants’ default. Thus, it is clear that defendants owe counsel fees. This case has been pending since July 1, 2013. Moreover, plaintiff has attempted to collect on defendants’ default since August 2012. Thus, it is clear that defendants owe significant legal fees. Plaintiff has submitted by affidavit the amount of the counsel fees paid.

Plaintiff’s attorneys have extended much time and effort in attempting to collect and enforce defendants’ debt. Protracted litigation has increased plaintiff’s fees. Therefore, these fees are reasonable in light of all the litigation and prior attempts to collect. Defendants created the increased fees by denying their obligations in an attempt to delay the inevitable result. Furthermore, defendants never requested any discovery on the amount of plaintiff’s legal fees or asked this court to reconsider the amount of the legal fees which were requested by affidavit and granted.

Defendants acknowledge from the time of entering into the agreements to pay attorney fees in the event of default, particularly where default is contested and plaintiff is forced to expend even more legal fees. That is exactly what happened in this case. Instead of consenting to judgment and, thus, keeping legal fees at a minimum, defendants did just the opposite. Defendants did not negotiate a settlement of the amount of the legal fees; perhaps by admitting default, the issue of legal fees could have been waived entirely. In fact, defendants did not even attempt to bring the alleged issue of the amount of legal fees to judicial resolution of that issue, by requesting reconsideration of this court’s order that granted summary judgment. Defendants have chosen not to have this issue, if it is a real issue, resolved by a prompt hearing; instead defendants followed a strategy that will buy even more time to continue to avoid their responsibilities, when the whole purpose of these agreements was to promptly resolve the damages in the event of a default by defendants.

In accordance with the foregoing opinion, this court submits that its order should be affirmed and defendants’ appeal denied.


author: ZULICK, J.,

text:
    In re Appeal of Hotel Liquor License

      C.P. of Monroe County,
    No. 2097 CIVIL 2014

      Robert H. Nothstein, for appellant.

      Peter J. Yoon, for Liquor Control Board.
    Dec. 6, 2014
   ZULICK, J.,

— 1. Tabs Entertainment, Inc., TIA Tabs Tavern and Inn (TABS) filed an appeal on March 21, 2014 from the decision of the Pennsylvania Liquor Control Board (PLCB) on March 19,2014 to deny renewal of TABS’ hotel liquor license.

2. TABS owns Pennsylvania Liquor Control Board (PLCB) Hotel Liquor License No. H-2892 (LID 59040) for premises it leases at 370 Route 196, Tobyhanna Pennsylvania, for the period beginning October 1, 2013 and ending September 30,2015. Exhibit R-l.

3. Robert Mathews (Mr. Mathews) is the sole shareholder and president of TABS. He bought one hundred percent (100%) of the shares on June 6, 2012 from Jahan Tabatabaie (Mr. Tabatabaie) after the bar had been closed for one and a half years. Board Hearing, Dec. 27,2013, N.T, 26.

4. Until June 9, 2014, appellant’s brief, Mr. Mathews operated the bar and restaurant under the name “The Doo Wop Lounge.” He has closed down the bar due to personal, ongoing health issues. CCPHearing, N.T., 8-11. On June 23, 2014, Mr. Mathews sent the license to the PLCB, requesting that it be put into safekeeping; he later received the certified mail receipt. Exhibit A of appellant’s brief.

5. On April 20,2011, the PLCB approved a Conditional Licensing Agreement (CL A) that was entered into between TABS and the board’s office of chief counsel, the result of PLCB’s objection for the renewal period effective October 1, 2009. Exhibit R-4. The CLA imposed the following restrictions on licensee in an effort to address the concerns raised by licensing and the board:

a. [Licensee] shall maintain and enforce a written barred patrons list on the licensed premises. Such list shall be maintained by [licensee] as a business record, pursuant to section 493(12) of the liquor code and shall be made available upon request to law enforcement officials, as well as Board and Pennsylvania State Police, Bureau of Liquor Control Enforcement (“Bureau”) employees;
b. [Licensee] shall employ at least one (1) security guard who will be present and working at the licensed premises on all Friday and Saturday nights, from 9:00 PM until closing and who will be clothed in such a way as to make his/her status as security personnel readily apparent;
c. [Licensee] shall, within ninety (90) days of approval of this agreement, become compliant with and remain compliant with the responsible alcohol management provisions of the liquor code including, but not limited to:
i. New employee orientation;
ii. Training for alcohol service personnel;
iii. Manager/owner training;
iv. Displaying of responsible alcohol service signage; and
v. A certification compliance inspection by a representative of the board’s bureau of alcohol education;
For purposes of this section, days in which the license is in safekeeping shall not be counted against the ninety (90) day deadline; and
d. [Licensee] shall maintain a separate checking account with a banking institution insured by the federal deposit insurance corporation, which will be used solely for the purpose of paying its vendors, [licensee] will ensure sufficient funds to pay all vendors with a required minimum balance to satisfy account requirements. [Licensee] will electronically transfer funds to this separate checking account maintained for its vendors to ensure that adequate funds are available at all times to meet the payment requirement.

Id.

6. On September 19, 2013, licensee filed an untimely application for the renewal of Hotel Liquor License No. H-2892 (LID 59040). Id.

7. By letter dated September 20, 2013, PLCB notified licensee that it objected to the renewal of its license for the license period effective October 1,2013, based on the following objections:

a. It is alleged that you have abused your licensing privilege, and pursuant to Section 470 of the liquor code (47 P.S. Section 4-470), you may no longer be eligible to hold a license based upon: violations of the liquor code relative to citation numbers 2010-0179, 2009-2613, 2009-2335, 2009-2301, 2009-0617, 2009-0468, and 2008-2540.
b. You have breached the conditional licensing agreement approved by the board on April 20, 2011, signed by Jahan Tabatabaie, president, Tabs Entertainment, Inc. and Faith S. Diehl, chief counsel, Pennsylvania Liquor Control Board. Specifically, you have not become compliant with the Responsible Alcohol Management Program (RAMP).
c. The bureau of licensing has rejected the late-filed renewal application pursuant to Section 470(a) of the liquor code (47 P.S. Section 470(a)).
d. You have failed to file the required tax clearance from the department of revenue indicating that all state tax reports have been filed and all state taxes have been paid, timely appealed or approved for deferred payment as required by Section 477 of the liquor code. 47 P.S. § 4-477.
e. You have failed to submit the additional $100.00 late filing fee pursuant to letter date September 20,2013.
f. You have failed to submit the application addendum in proper order pursuant to letter dated September 20, 2013.
g. You have failed to submit a copy of the current valid health license pursuant to letter dated September 20, 2013.

8. The citations in the September 20, 2013 letter are as follows:

a. Citation No. 10-0179 was issued against licensee on February 1, 2010, concerning licensee’s violation of section 493(26) of the liquor code (47 P.S. § 4-493(26)), in that on October 30, November 3, 4, 6, 10, and 11, 2009, licensee, by its servants, agents or employees, issued checks or drafts inpayment for purchases of malt or brewed beverages, when it had insufficient funds in, or credit with, the institution upon which drawn for the payment of such checks, licensee admitted the charge and was fined four hundred dollars ($400.00).
b. Citation No. 09-2613 was issued against licensee on November 13,2009, concerning licensee’s violation of section 493(26) of the liquor code (47 P.S. § 4-493(26)), in that on August 10, 2009, licensee, by its servants, agents or employees, issued checks or drafts in payment for purchases of malt or brewed beverages, when it had insufficient funds in, or credit with, the institution upon which drawn for the payment of such checks. Licensee admitted the charge and was fined three hundred dollars ($300.00).
c. Citation No. 09-2335 was issued against licensee on October 7, 2009, concerning licensee’s violation of section 491 (10) of the liquor code (47 P./S. § 4-491(10)), in that on September 21,2009, licensee, by its servants, agents or employees, fortified, adulterated, and/or contaminated liquor. Licensee admitted the charge and was fined two hundred fifty dollars ($250.00).
d. Citation No. 09-2301 was issued against licensee on October 2, 2009, concerning licensee’s violation of section 493(26) of the liquor code (47 P.S. §4-493(26)), in that on August 7 and 10, 2009, licensee, by its servants, agents or employees, issued checks or drafts in payment for purchases of malt or brewed beverages, when it had insufficient funds in, or . credit with, the institution upon which drawn for the payment of such checks. Licensee admitted the charge and was fined two hundred fifty dollars ($250.00).
e. Citation No. 09-0617 was issued against licensee on March 23, 2009, concerning licensee’s violation of sections 401(a) and 407(a) of the liquor code (47 P.S. §§ 4-401(a) and 407(a)), in that on February 1, 2009, licensee, by its servants, agents or employees, sold malt or brewed beverages in excess of one hundred ninety-two (192) fluid ounces in an single sale to one (1) person for consumption off the licensed premises. Licensee admitted the charge and was fined two hundred fifty dollars ($250.00).
f. Citation No. 09-0468 was issued against licensee on March 9, 2009, concerning licensee’s violation of section 493(26) of the liquor code (47 P.S. § 4-493(26)), in that on January 6, 2009, licensee, by its servants, agents or employees, issued checks or drafts in payment for purchases of malt or brewed beverages, when it had insufficient funds in, or credit with, the institution upon which drawn for the payment of such checks. Licensee admitted the charge and was fined one hundred fifty dollars ($150.00).
g. Citation No. 08-2540 was issued against licensee on October 27, 2008, concerning licensee’s violation of sections 491(1), 492(2), and 493(16) of the liquor code (47 P.S. §§ 4-491(1), 4-492(2), and 4-493(16)), in that on October 1, 2008, licensee, by its servants, agents or employees, sold alcoholic beverages after its hotel liquor license had expired on September 30, 2008, and it had not renewed and/or validated said license. Licensee admitted the charge and was fined one thousand two hundred fifty dollars ($ 1,250.00).

PLCB opinion, citing Exhibit R-5: B-5.

9. On September 27, 2013, licensing received TAB’S waiver/authorization and late filing statement, which specified that licensee’s renewal application was filed late because it “was waiting for renewal of new lease.” Exhibit R-4: B-7.

10. On September 27,2013, licensing received a copy of Robert B. Mathews’s RAMP owner/manager certification, which he received on January 8,2013. Id.

11. By letter dated October 3, 2013, licensing notified licensee that it objected to the renewal of its license for the license period effective October 1,2013, based on the following amended objections:

a. It is alleged that you have abused your licensing privilege, and pursuant to Section 470 of the liquor code (47 P.S. Section 4-470), you may no longer be eligible to hold a license based upon: violations of the liquor code relative to citation numbers 2010-0179, 2009-2613, 2009-2335, 2009-2301, 2009-0617, 2009-0468, and 2008-2540.
b. You have breached the Conditional Licensing Agreement approved by the board on April 20, 2011, signed by Jahan Tabatabaie, president, Tabs Entertainment, Inc. and Faith S. Diehl, Chief Counsel, Pennsylvania Liquor Control Board. Specifically, you have not become compliant with the Responsible Alcohol Management Program (RAMP); you failed to maintain and enforce a written barred patrons list on the licensed premises; you failed to employ at least one (1) security guard to be present and working at the premises on all Friday and Saturday nights from 9:00 PM until closing; and you failed to ensure sufficient funds to pay all vendors.
c. The bureau of licensing has rejected the late-filed renewal application pursuant to Section 470(a) of the liquor code (47 P.S. § 470(a)).

Exhibit A-10.

12. By letter dated October 28, 2013, PLCB notified licensee that a hearing would be held on November 18, 2013, in Scranton, Pennsylvania. By letter December 5, 2013, licensing notified Licensee that the hearing scheduled for November 18,2013 was postponed and would be held on December 27,2013 in Scranton, Pennsylvania. Exhibit R-4: B-ll.

13. As of the December 27, 2013 hearing, the board’s bureau of alcohol education’s records showed that as of October 2,2013, TABS had not been RAMP-certified. Id. at B-10 (Board attestation of official records).

14. Mr. Mathews testified that at the time of the December 27,2013 hearing, he believed he had complied with RAMP certification because he had obtained certification as a manager. CCP Hearing, N.T., 39. He testified that he had difficulty in getting his bartenders certified because the “bartenders were coming and going left and right. I did have a couple of bartenders that were RAMP certified. There was a short period of time.” Id. at 32.

15. While the CLA required an inspection of the premises by the PLCB in order to complete RAMP certification, that fifth step has since changed; now, an affidavit request is the fifth step. PLCB Website: RAMP Certification, http://www.lcb.state.pa.us/PLCB/ Education/RAMP/RAMPCertification/index.htm; board hearing, N.T., 51-52. “[The hearing examiner’s] questions in regard to whether the fifth step involving an inspection had been completed are obviously rendered moot by that change and irrelevant.” Board hearing, N.T., 52.

16. Mr. Mathews acknowledged that licensee was not RAMP-certified at the December 2013 board hearing. Id. at 42-43,45-48. Mr. Mathews mistakenly thought only the owners and managers needed RAMP certification prior to the December 2013 hearing. CCP Hearing, N.T., 40.

17. TABS maintains a separate checking account for the purpose of paying vendors. Mr. Mathews was aware that TABS had a problem with bad checks when Mr. Tabatabaie was licensee’s sole stockholder. Id. at 41.

18. Licensing sent TABS thirty (30) insufficient funds letters during the period from December 19,2012 through October 2, 2013, concerning licensee’s issuance of drafts or checks to various distributors for the purchase of malt or brewed beverages with insufficient funds in the institution upon which they were drawn for the payment of such purchases. In each of the thirty letters, licensee was granted ten (10) days from the date of the letter to make payment, including any bank charges, in full to the various distributors with a warning that the failure to remedy the dishonored check within this time frame would result in the matter being referred to the Pennsylvania State Police, Bureau of Liquor Control Enforcement (BLCE) for further action. As of the December 2013 hearing, licensee failed to timely remedy six (6) of its dishonored checks, resulting in information from said checks being referred to the BLCE for further action. Exhibit R-4: B-8.

19. Bernice Sheaffer was the licensing analyst who was responsible for investigating licensee’s change of officers (“change of officers”) application, which was submitted to licensing in the summer of 2012. Board hearing, N.T., 8-10.

20. As part of her investigation, Ms. Sheaffer met with Mr. Mathews in July 2012 at attorney Ralph Matergia’s office. During this meeting Ms. Sheaffer discussed licensee’s CLA with Mr. Mathews, and Mr. Mathews indicated that he was aware of the CLA and that he would comply with its provisions. Board hearing, N.T., 10-11. Additionally, Mr. Mathews recalls attorney Matergia mentioning the CLA in a phone call. CCP Hearing, N.T., 43-44. Mr. Mathews never asked for a copy from attorney Matergia, and he never contacted the LCB concerning the CLA. Id. at 44.

21. Mr. Mathews testified that “(i)t was just explained to me that there was a condition with the license and he had to be RAMP certified, and I just, ...never went any further than that conversation until the LCB started sending me letters.” CCP Hearing, N.T., 47.

22. Mr. Mathews sent a letter dated December 26,2013 to the Board regarding the security requirements of Section 6(b) of licensee’s CLA. Mr. Mathews’s letter alleged that there had been “zero incidents or occurrences at [licensee’s] establishment” since the transfer of licensee’s stock from Mr. Tabatabaie to him. Board hearing, N.T., 19. The letter further provided that:

[b]y requiring my security staff to wear clothing dictating that they are staff takes away from the atmosphere that we are providing for our customers. Wearing such clothing intimidates and provides customers with the appearance that problems occur when they don’t. It took many hours of hard work to build the patronage and the environment that this establishment now has. It would not benefit the business to require security to wear such clothing and as a result could in face (sic) incite unnecessary issues.

Exhibit A-ll.

23. Mr. Mathews sent a letter to the board dated December 26, 2013, which appears to be in response to a letter from licensing dated September 20, 2013, regarding licensee’s breach of its CLA. Mr. Mathews’s letter provides the following: Mr. Mathews did not sign licensee’s CLA; Mr. Mathews completed RAMP owner/ management training on January 8, 2013; one (1) of licensee’s employees, Aishling Fennessy, completed RAMP server/selling training on November 9, 2013; two (2) of licensee’s employees have completed new employee orientation for the RAMP program; RAMP signage is posted; since September 2013, Mr. Mathews instructed licensee’s employees to become RAMP-certified; and Mr. Mathews believed that he was in compliance with the RAMP requirements of the CLA. Board hearing, N.T., 19-21.

24. Mr. Mathews acknowledged that licensee’s security’s apparel does not meet the clothing requirement of Section 6(b) of licensee’s CLA. Board hearing, N.T., 23-24; Exhibit A-ll.

25. Mr. Mathews indicated that he was not aware of the requirement of Section 6(a) of licensee’s CLA regarding maintaining a barred patrons list when he acquired licensee’s stock. Board hearing, N.T., 24-25.

26. Mr. Mathews did not ask Mr. Tabatabaie or attorney Matergia for a copy of licensee’s CLA. Also, Mr. Mathews indicated that he never asked Mr. Tabatabaie for any papers that might affect his ownership or operation of the licensed premises, other than what was presented to him in regard to purchasing the corporation. Id. at 25, 33.

27. Licensee did not maintain a barred patrons list, as required by Section 6(a) of its CLA. As far as Mr. Matthews was concerned, TABS did not have any barred patrons. Also, Mr. Mathews indicated that he became aware of the barred patrons list requirement when he received the packet of information for the hearing from the board’s office of chief counsel’s attorney by cover letter dated November 12, 2013, and the packet included licensee’s CLA. Mr. Mathews did not know if Mr. Tabatabaie had maintained a barred patrons list prior to Mr. Mathews acquiring licensee’s stock, and he did not inquire as to the existence of such a list. Id. at 24-30, 34-35, 53-54; CCP Hearing, N.T., 33.

28. At the time of the meeting in attorney Matergia’s office, Mr. Mathews understood licensee’s CLA as being “just these minor little things that you know — could be corrected.” Board hearing, N.T., 37. Mr. Mathews indicated that he realized what licensee’s CLA entailed when he received a copy of the CLA around the time that licensee filed its renewal application. Id. at 37-40.

29. Mr. Mathews acknowledged that a partial basis for licensee’s CLA was due to its previous late renewal filings, but licensee waited to file its renewal application until it obtained a lease for the licensed premises, as he was unsure if he was going to still remain at the premises. Id. at 40.

30. Mr. Mathews would like to see licensee’s CLA modified in regard to the requirement that its security wear identifiable apparel, but he has made no formal request for such a modification. Board hearing, N.T., 55.

31. Licensee has had a change in patrons since Mr. Mathews became licensee’s stole stockholder and Mr. Mathews believes that having “bouncers all over the place is not good for the bar.” Id. at 56-57, 59.

32. Donna Casóle, a patron of licensee, testified that Mr. Matthews operates a well-run establishment that has not had criminal activity occurring on or about the premises. Id. at 62-64.

33. Ms. Casóle was aware of an incident which occurred in February 2009 or 2010, where a friend of one (1) of licensee’s prior shareholders entered the establishment with a shotgun and threatened the other shareholder. The police responded and a report was prepared, Mr. Mathews did not obtain the police report so he would be able to identify the individual with the gun, to ensure that this problematic individual did not frequent licensee’s establishment. Id. at 70-75.

DISCUSSION

Licensee filed an appeal from the PLCB order on March 21,2014. The PLCB filed an opinion dated April 25,2014 in support of its order dated March 19,2014, appearing in the record as Exhibit R-5 and refusing licensee’s renewal application. A hearing on the appeal was held on June 19, 2014. The PLCB called no witnesses, but introduced various documents, including the notes of testimony and exhibits. Exhibits R-l — R-4. The opinion of the PLCB denying the renewal of the license was also introduced. Exhibit R-5. Robert Mathews testified on behalf of the licensee, and licensee introduced various documents and letters. Exhibits A-1 —A-13. The parties were given leave to file briefs after the transcript was prepared.

A trial court reviewing a decision of the PLCB not to renew a liquor license hears the matter de novo, and may sustain, after, modify, or amend the board’s order even when it is based upon the same evidence presented before the board. Philly Int'l Bar, Inc. v. Pa. Liquor Control Bd., 973 A.2d 1, 3 (Pa.Cmwlth. 2008), appeal denied, 980 A.2d 609 (Pa. 2009). The trial court has the duty of receiving the record of the proceedings before the board, if introduced into evidence. Two Sophia’s, Inc. v. Pennsylvania Liquor Control Bd. 799 A.2d 917, 922 (Pa.Cmwlth. 2002). Although Mr. Mathews contests the examination of past, adjudicated citations that occurred prior to his purchase of the shares of the company, generally, in the context of a nonrenewal action, the finder of fact may consider all past adjudicated liquor code violations no matter when they occurred. See Pennsylvania Liquor Control Bd. v. Bartosh, 730 A.2d 1029, 1033 (Pa.Cmwlth. 1999); First Ward Republican Club of Philadelphia v. Com., 11 A.3d 38, 47 (Pa.Cmwlth. 2010).

Under the liquor code, renewal of a liquor license is not automatic. Section 470(a.l) of the liquor code provides that the PLCB “may” refuse to renew a liquor license for several reasons, including the fact that a licensee has one or more adjudicated citations. The use of the term “may” gives the PLCB discretionary authority to decide whether to grant or deny a properly filed renewal application. U.S.A. Deli, Inc. v. Pa. Liquor Control Bd., 909 A.2d 24, 28 (Pa. Cmwlth. 2006), appeal denied, 929 A.2d 647 (Pa. 2007). The licensee’s record of violations may be considered in deciding whether to renew a liquor license, and even a single violation can be sufficient grounds to decline to renew the license. Goodfellas, Inc. v. Pa. Liquor Control Bd., 921 A.2d 559, 564-565 (Pa.Cmwlth. 2007), appeal denied, 934 A.2d 1279 (2007). “If anything, de novo review by the judicial branch assures litigants that license suspensions based on violations of the liquor code will only be enforced when neutral judicial officers, detached from the bureau charged with the task of monitoring and enforcing the liquor laws of this Commonwealth are satisfied that violations have, in fact, been established.” Two Sophia’s, 799 A.2d at 920-21 (quoting Pennsylvania State Police, BLCE v. Cantina Gloria’s Lounge, Inc., 639 A.2d 14 (Pa. 1994)).

Moreover, “The PA Supreme Court has stated that there is perhaps no other area of permissible state action within which the exercise of the police power of the state is more plenary than the regulation and control of the use and sale of alcoholic beverages.” Hyland Enterprises, Inc. v. Pennsylvania Liquor Control Board, 631 A.2d 789, 791 (Pa.Cmwlth. 1993). “[The Commonwealth Court] has stated that the purpose of the code, as enforced by the board, is to regulate and restrain the sale of liquor, not promote it.” Id. at 792. Thus, this court will examine the record both from the board hearing and from the June 19, 2014 hearing bearing in mind the purpose of the liquor code and the state’s interest in limiting and regulating the sale of alcohol.

The PLCB’s decision not to renew TABS’ license was based upon TABS’ noncompliance with a Conditional Licensing Agreement from which licensee’s citations originate:

The board may enter into an agreement with the applicant concerning additional restrictions on the license in question. If the board and the applicant enter into such an agreement, such agreement shall be binding on the applicant. Failure by the applicant to adhere to the agreement will be sufficient cause to form the basis for a citation under §471 and for the non-renewal of the license under this section.

47 P.S. § 4-470(a) (emphasis added).

The PLCB concluded that licensee’s failures to become compliant with the Responsible Alcohol Management Program (RAMP) by the hearing date, to keep a barred patrons list, to employ visibly identifiable security at certain hours, and to ensure sufficient funds to pay all vendors were sufficient to warrant the nonrenewal of the license. While Mr. Mathews had changed the atmosphere and clientele of the bar under his management, the PLCB did not believe these were “sufficient timely corrective measures.” Exhibit R-5 at 30.

Mr. Mathews, the sole shareholder of licensee, testified that he had attempted to comply with the CLA as he understood it, but a major part of his problem in failure to comply was that he never had a copy of the CLA. Mr. Tabatabaie, the previous sole shareholder, signed the CLA in 2011.

The citations listed in the PLCB’s letter to Mr. Mathews dated October 3, 2013 include:

1. The adjudicated violations from 2008 until 2010, which occurred under Mr. Tabatabaie’s management. These violations include, in part, sale of alcohol in excessive amounts, disorderly operations, and a stabbing that occurred near the premises;
2. The breach of the CLA approved on April 20, 2011. “Specifically, you have not become compliant with the Responsible Alcohol Management Program (RAMP); you failed to maintain and enforce a written barred patrons list on the licensed premises; you failed to employ at least one (1) security guard to be present and working at the premises on all Friday and Saturday nights from 9:00 p.m. until closing; and you failed to ensure sufficient funds to pay all vendors.”
3. A late-filed renewal application.

Exhibit A-1.

The CLA was applicable to Tabs Entertainment, the licensee in this case, stating.

This Conditional Licensing Agreement...is made between the Commonwealth of Pennsylvania, Pennsylvania Liquor Control Board...located at Capital and Forster Streets, Harrisburg, Pennsylvania 17124 and Tabs Entertainment, Inc. ...holder of Hotel Liquor License No. H-2892 (LID 59040) for use by it at premises located at Route 196, Box 416, Sterling Road, Tobyhanna, PA 18466-0000.

Exhibit R-4 (CLA).

TABS was the licensee for purposes of the CLA, and the past citations. Mr. Mathews bought the shares of the company instead of commencing business in a new business entity; thus, as manager, he was responsible to comply with the TABS CLA. All of these citations and the CLA itself are part of TABS’ history, and that is what this court must examine.

Licensee did not meet the CLA’s requirement that the establishment maintain a barred patrons list. Mr. Mathews stated in both the board hearing in December 2013 and in the hearing in June 2014 that he did not keep a barred patrons list, because his business. “The Doo Wop Lounge,” did not have any barred patrons. Board hearing. N.T., 24-30, 34-35, 53-54; CCP Hearing, N.T., 33. However, Mr. Mathews did not ask Mr. Tabatabaie if there had been a barred patrons list from the previous business, even though Mr. Mathews was “well aware” of the previous business’s reputation and violent patrons. Board hearing, N.T., 32. Mr. Mathews’s problem here is that he did not technically comply with the CLA. It appears that under his management, troublesome patrons stayed away, so he had no one to add to the “barred patrons list.” However, in compliance with the CLA, he should have maintained such a list, including people who had been violent on or about the premises in the past. It was not unreasonable for the PLCB to require this safety precaution, considering the bar’s history and the possibility that violent patrons might return.

While the October 3 letter states that Mr. Mathews failed to employ security during the required hours, Mr. Mathews insists that he had security, but that they were not identifiable by their clothing, as required in the CLA. This again was a violation of the CLA, admitted by Mr. Mathews. He argued that hiring visible “bouncers” would be bad for his restaurant’s business and that it would detract from the atmosphere he had cultivated in his bar, Exhibit A-ll, though Mr. Mathews did have visible security after the December 2013 hearing. CCPHearing, N.T., 41. Again, the CLA pertains to the history of licensee itself rather than the Doo Wop Lounge as it existed under Mr. Mathews. Licensee had supported unsavory practices over its years in business and even had violent altercations. The CLA, with its requirement for identifiable security, addressed that issue. As stated in the CLA itself, “[tjhese terms will remain in effect both on the license and on the premises unless and until a subsequent agreement is reached with the board rescinding these restrictions or until the license is transferred to a new owner for use at a new location.” Exhibit R-4 (CLA). Mr. Mathews could have formally petitioned the PLCB for a change to the CLA, considering the changes he brought to the atmosphere and clientele of his bar. Nevertheless, in the meantime, Mr. Mathews was required to ensure compliance with the CLA. Again, it appears that he was unaware of this requirement.

Mr. Mathews did not obtain TABS RAMP certification as required by the CLA. He made an effort to accomplish RAMP certification with his own certification as a manager, but did not follow through as the CLA required to complete TABS’ certification. Again, he failed to afford sufficient attention to the details of the CLA and the details of what RAMP certification required. The CLA required that, within 90 days of approval of the agreement, the establishment must be RAMP certified. The PLCB provides a five-step test for applicants to complete: owner/manager training, server/seller training, new employee orientation, signage, and affidavit request for RAMP certification. The CLA, however, stated the first four requirements verbatim, but the fifth requirement was stated as “A certification compliance inspection by a representative of the board’s Bureau of Alcohol Education.” Exhibit R-4 (CLA). This fifth requirement has since been replaced by the affidavit request, and thus, Mr. Mathews was not required to undergo the inspection. See CCP Hearing, N.T., 52. No documentation was submitted to demonstrate that Mr. Mathews was indeed RAMP certified by the June 2014 hearing, but, even if licensee was RAMP certified by that date, licensee did not meet the 90 day requirement included in the CLA. The bar had been closed for more than one year before Mr. Mathews took over and opened on June 6, 2012; the CLA was signed in 2011. At the December 2013 hearing, however, Mr. Mathews admitted he was not in compliance with RAMP, as he had mistakenly believed he needed only owner/manager training. This occurred well over one year after Mr. Tabatabaie transferred the shares to Mr. Mathews, and Mr. Mathews had not met the proper requirements.

Finally, Mr. Mathews failed to ensure sufficient funds for the payment of suppliers. Between December 19,2012 and October 2, 2013, the PLCB sent Mr. Mathews a total of 30 letters concerning checks returned for insufficient funds. Exhibit R-4: B-8. As licensee had citations pertaining to insufficient funds in the past, this issue was detailed in the CLA. Exhibit R-4 (CLA). These letters were all sent after Mr. Mathews’s purchase of the shares, and the sheer number of them indicates that this was a consistent problem during the entirety of Mr. Mathews’s management. Although appellant’s brief claims that Mr. Mathews has since “made good” on those checks, the CLA required that licensee maintain sufficient funds to pay vendors and to satisfy account requirements; thus, licensee did not meet this requirement.

The requirements of the CLA were not met, despite Mr. Mathews’s uninformed efforts to comply. He first became aware of the CLA in the stock transfer meeting with Ms. Sheaffer, but he did not inquire as to the terms of the agreement or ask for a copy. Even after receiving letters from PLCB and a copy of the agreement in September 2013, Mr. Mathews did not make a serious attempt at full compliance. Board hearing, N.T., 37. Mr. Mathews was required to employ identifiable security guards, keep a barred patrons list, ensure sufficient funds, and obtain RAMP certification due to the number and severity of the citations committed while under the management of Mr. Tabatabaie, and he failed at meeting these requirements.

Mr. Mathews appears to have had good intentions in his management of TABS and it also appears that he was successful in changing the business to attract a law-abiding crowd. His problems with the PLCB appear to stem from not having legal counsel when he purchased the license and not obtaining legal advice as he managed it. On his own, apparently without the benefit of counsel, he failed to comply with a conditional licensing agreement that was in place and that the PLCB had the right to enforce. Mr. Mathews thus failed to meet the requirements intended to regulate the sale of alcohol in the Commonwealth.

The PLCB was warranted in refusing to renew the license.

ORDER

And now, this 5th day of December, 2014, following a hearing and consideration of the parties’ briefs, it is ordered that the appeal from the decision of the Pennsylvania Liquor Control Board filed by Tabs Entertainment, Inc. is denied.

      . The citations are identical to those listed in the September 20, 2013 letter and detailed in supra Paragraph 9.

      . While Mr. Mathews additionally filed a late renewal application due to his uncertainty as to whether he would renew a lease on his property and due to waiting for the department of revenue’s tax clearance, the PLCB did not include a failure to pay the late filing fees on the October 3 amended objection letter, the most recent Mr. Mathews received. Exhibit A-10.