author: SHEPPARD JR., J.,

text:
    Hemispherx Biopharma Inc. v. Asensio

      Margaret Mandakis, for plaintiff.

      Lawrence McMichael and David C. Franceski Jr., for defendants.
    September 6, 2001
   SHEPPARD JR., J.,

Presently before this court is defendants’ motion for summary judgment, seeking to dismiss the action in its entirety. Defendants make several arguments in support of their motion. Certain arguments involve strict issues of law, while others involve issues of fact. This opinion is limited to a discussion of the issues of law, because it is evident to the court that genuine issues of material fact exist which preclude granting summary judgment. Further, resolution of the legal issues also demonstrates that summary judgment is not appropriate.

BACKGROUND

This action arises from defendants’ alleged scheme to illegally manipulate the price of, and short-sell, plaintiff’s common stock through defendants’ publication of allegedly defamatory statements in a series of research reports and/or press releases regarding plaintiff and plaintiff’s development of a certain anti-viral drug.

Plaintiff, Hemispherx Biopharma Inc. is a Delaware corporation with its principal place of business in Philadelphia, Pennsylvania. HBI is engaged in the business of researching, developing and testing experimental pharmaceutical compounds and drug technologies for regulatory approval and sale. Its primary focus has been the development and clinical testing of the anti-viral compound known as Ampligen for the possible treatment of viral afflictions such as chronic fatigue syndrome and chronic hepatitis. HBI’s common stock is currently traded on the American Stock Exchange.

Defendant, Asensio & Company Inc. is a Delaware corporation with its principal place of business in New York, New York. It is a registered broker and investment banking firm that publishes and distributes to the investing public analytical research reports regarding publicly-traded companies and trades securities of those companies for its own account. Defendant, Asensio.Com Inc. purportedly owns 100 percent of the shares of ACI, maintains ACI’s accounts and provides the necessary capital for ACI to conduct its business, including proprietary trading and the short-selling alleged in this action. Manuel P. Asensio, a citizen of New York, is the founder and chairman of ACI.

In August 1998, defendants purportedly began to accumulate short positions in HBI in order to realize a profit which would occur from the erosion in the price of HBI’s common stock after the publication of the allegedly defamatory statements. On September 22, 1998, defendants produced and published, through means of interstate commerce including the Internet, a “research report” and accompanying press release, containing numerous statements about HBI and Ampligen. See pi. exhibit 33. This research report was accompanied by a “strong sell recommendation” with respect to HBI’s shares of common stock. Id. It was preceded by defendants’ statements which appeared in an article in the September 28, 1998 issue of Business Week which had been distributed on the Internet on September 17, 1998. See pi. exhibit 32. The report and accompanying press release included the following initial statements:

• Ampligen is “toxic;”

• Ampligen has “no medical or economic value;”

• Ampligen “is medically useless and an obsolete drug;”

• Ampligen is “off patent;”

• HBI has made “fraudulent misrepresentations about Ampligen’s FDA filing status and CFS earnings claims;”

• HBI’s phase II clinical trial of Ampligen for use as a possible treatment for CFS was “neither placebo-controlled nor double blind” and “failed;”

• There is “no legitimate medical or business purpose for [HBI’s] continuing attempts to test Ampligen for treatment of CFS and other diseases;”

• HBI “is not and has never been engaged in any long-term project to create a new drug;”

• HBI has “purposefully cultivated” false claims regarding Ampligen “in order to defraud investors;”

• HBI “is promoting futile projects simply in order to enable insiders to sell their otherwise worthless stock to the public.” See pi. exhibit 33.

Defendants also published additional statements on ACI’s website and to third parties such as the FDA, the American Stock Exchange, the Securities Exchange Commission and Business Week magazine which are allegedly defamatory. Some of defendants’ statements also appeared in the September 23, 1998 issue of the Philadelphia Inquirer. See pi. exhibit 34. The publication of these statements allegedly caused the price of HBI’s common stock to decline precipitously, reduce the value of the company, and impaired HBI’s business relations with third parties.

This action originated in the federal court system over two years ago. It was transferred to this court on July 31, 2000, pursuant to 42 Pa.C.S. §5103. Plaintiff asserts four counts against defendants: (1) defamation; (2) disparagement; (3) intentional interference with existing and prospective business relations; and (4) civil conspiracy. Defendants move for summary judgment, asserting, inter alia, that (1) the challenged statements are not actionable since they are mere opinions based on disclosed facts; (2) the statements are substantially tme; (3) HBI is a public figure and cannot prove that the statements were made with actual malice; (4) HBI’s damages are not recoverable for a loss in market capitalization; (5) HBI cannot show a causal connection between the statements and the losses it allegedly suffered; (6) HBI cannot make out a claim for tortious interference based on difficulty to work with third parties on account of defendants’ statements; and (7) HBI fails to meet the plurality requirement to make out a claim for civil conspiracy where HBI does not identify the “John Doe” defendants which it alleges conspired with the named defendants to defame HBI.

For the reasons set forth, this court finds that defendants are not entitled to summary judgment as a matter of law.

DISCUSSION

Rule 1035.2 of the Pennsylvania Rules of Civil Procedure provides that a moving party is entitled to summary judgment if (1) there is no genuine issue of any material fact as to a necessary element of the cause of action or defense that could be established by additional discovery or expert report, or (2) after the completion of discovery, a party bearing the burden of proof on an issue has failed to produce evidence of facts essential to the cause of action or defense such that a jury could return a verdict in his favor. The moving party has the burden to prove that there is no genuine issue of material fact. Hagans v. Constitution State Service Co., 455 Pa. Super. 231, 254, 687 A.2d 1145, 1156 (1997). Once the moving party meets this burden, the non-moving party must set forth specific facts showing that there is a genuine issue for trial. Id. The trial court’s function is to determine whether there are controverted issues of fact, not whether there is sufficient evidence to prove the particular facts. Id. at 254, 687 A.2d at 1157. A motion for summary judgment must be viewed in the light most favorable to the non-moving party, and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party. Pennsylvania State University v. County of Centre, 532 Pa. 142, 145, 615 A.2d 303, 304 (1992). Only where there is no genuine issue as to any material fact and it is clear that the moving party is entitled to judgment as a matter of law will summary judgment be entered. Skipworth v. Lead Industries Ass’n Inc., 547 Pa. 224, 230, 690 A.2d 169, 171 (1997).

I. Pennsylvania Law Applies Because Pennsylvania Has the Greatest Interest in Protecting

Plaintiff’s Reputation Since Plaintiff Is Domiciled in Pennsylvania

The threshold issue to decide is whether there is a choice of law issue, and if so, which law should the court apply. In any case, however, Pennsylvania conflict of law rules require that a Pennsylvania court apply Pennsylvania’s evidentiary sufficiency standard to a claim regardless of which state’s substantive law applies to the claim. See e.g., Foley v. Pittsburgh-Des Moines Co., 363 Pa. 1, 10, 68 A.2d 517, 521 (1949) (“The law of the forum also controls all questions as to burden of proof and whether there is sufficient evidence of negligence and proximate causation to entitle the plaintiff to have the case submitted to the jury.”); Sudol v. Gorga, 346 Pa. 463, 465-66, 31 A.2d 119, 120 (1943) (“The law of the forum determines whether there is sufficient evidence on an issue of fact to warrant its submission to a jury.”); Crawford v. Manhattan Life Insurance Company of N. Y., 208 Pa. Super. 150, 161 n.2, 221 A.2d 877, 884 n.2 (1966) (“The questions of presumption and burden of proof in this regard are, of course, procedural and to be determined by the law of the forum.”); Restatement (Second) of Conflict of Laws §135 (“The local law of the forum determines whether a party has introduced sufficient evidence to warrant a finding in his favor on an issue of fact....”).

Therefore, the Pennsylvania standard for summary judgment applies to the motion. Smith v. Commonwealth Nat’l Bank, 384 Pa. Super. 65, 557 A.2d 775 (1989) (applying Pennsylvania standard for summary judgment where New York substantive law governed the plaintiff’s claims).

Here, defendants assert that there may be a choice of law issue since they are headquartered and work in New York, which is the situs of the publication of the allegedly defamatory statements, while plaintiff’s principal place of business is in Pennsylvania. Defs. mem. of law at 19 n.17. Defendants concede that no choice is necessary because summary judgment should be granted under either New York law or Pennsylvania law, but they also assert that New York law is “decidedly more protective” of statements of opinion than the U.S. Constitution. Id. Plaintiff, in turn, argues that Pennsylvania law must be applied since New York law is decidedly more favorable to defendants in defamation cases and since Pennsylvania’s flexible choice of law rales dictate that Pennsylvania has the priority of interest in addressing the issues. Pl. mem. of law at 23-26.

The first step in a choice of law analysis is to determine if the laws of the competing states actually differ. Ratti v. Wheeling Pittsburgh Steel Corp., 758 A.2d 695, 702 (Pa. Super. 2000). If there is no difference, no further analysis is required. Id. If a conflict exists, the court must weigh “the governmental interests underlying the issue and determine which state has the greater interest in the application of its law.” Id. See also, Griffith v. United Airlines Inc., 416 Pa. 1, 21, 203 A.2d 796, 805 (1964) (rejecting the strict lex loci delicti rale in favor of a more flexible approach which permits analysis of the policies and interests underlying the particular issue and determining which state has the most significant relationship to the issue).

The central issue in this case is whether plaintiff was defamed by defendants’ publication of its research report on September 22, 1998 and the subsequent publications of various statements deriving from that report. A quick examination of New York and Pennsylvania cases shows that both states deem mere expressions of opinion as non-actionable to support a claim for defamation, but both states allow such claims to proceed if the statement of opinion implies undisclosed facts which are capable of a defamatory meaning. See Constantino v. Uni- versify of Pittsburgh, 766 A.2d 1265, 1270 (Pa. Super. 2001); Green v. Mizner, 692 A.2d 169, 172 (Pa. Super. 1997); Gross v. New York Times Co., 603 N.Y.S.2d 813, 82 N.Y.2d 146, 151-52 (1993). Both Pennsylvania and New York State courts apply the Restatement (Second) of Torts §566, in determining whether a statement is a non-actionable “pure” opinion or whether a statement is a “mixed” opinion capable of being understood by the reader or listener to be defamatory. Green, 692 A.2d at 174; Gross, 82 N.Y.2d at 153-54.

Further, both New York and Pennsylvania courts hold that a communication may be defamatory if it imputes to another conduct, character or condition that would adversely affect his fitness for the proper conduct of his business, trade or profession. Constantino, 766 A.2d at 1270; Clemente v. Impastato, 711 N.Y.S.2d 71, 73, 274 A.D.2d 771, 773 (2000). Under Pennsylvania law, “[djefamation is a communication which tends to harm an individual’s reputation so as to lower him or her in the estimation of the community or deter third persons from associating or dealing with him or her.” Constantino, 766 A.2d at 1270. Similarly, New York courts have found defamatory meaning in “words which tend to expose one to public hatred, shame, obloquy, contumely, odium, contempt, ridicule, aversion, ostracism, degradation or disgrace, or to induce an evil opinion of one in the minds of right-thinking persons, and to deprive one of their confidence and friendly intercourse in society.” Fairly v. Peekskill Star Corp., 445 N.Y.S.2d 156, 83 A.D.2d 294, 296 (1986) (quoted in Weinstein v. Friedman, 1996 WL 137313, at *10 (S.D.N.Y. March 26, 1996)).

Moreover, the United States Supreme Court has set forth that a public figure plaintiff, bringing a defamation suit, must show that the statement was made with “actual malice,” i.e., with knowledge that it was false or with reckless disregard as to whether it was false or not. Gertz v. Robert Welch Inc., 418 U.S. 323, 327-28, 94 S.Ct. 2997, 41 L.Ed.2d 789 (1974) (adopting standard set forth in New York Times Co. v. Sullivan, 376 U.S. 254, 279-80 (1964)). As to defamation suits brought by private figure plaintiffs, irrespective of whether the statements involved matters of purely private or public concern, the court allows the states to define for themselves the appropriate standard of liability as long as they do not impose liability without fault. Id. at 347. No choice of law issue would therefore exist if HBI was deemed a public figure plaintiff since both Pennsylvania and New York courts apply the “actual malice” standard as mandated by the U.S. Supreme Court. See DiSalle v. RG. Publishing Co., 375 Pa. Super. 510, 548, 544 A.2d 1345, 1364 (1988); Sweeney v. Prisoners’ Legal Servs. of New York Inc., 538 N.Y.S.2d 370, 373, 146 A.D.2d 1,5 (1989).

Rather, a choice of law issue would arise if this court concludes that plaintiff is a private figure plaintiff. In Pennsylvania, a private figure plaintiff, seeking to recover for harm inflicted as a result of the publication of defamatory statements, must prove that the defamatory matter was published with “want of reasonable care and diligence to ascertain the truth” or with negligence. Rutt v. Bethlehems’ Globe Publishing Co., 335 Pa. Super. 163, 186, 484 A.2d 72, 83 (1984). In contrast, New York law holds that a private figure plaintiff bringing a defamation suit for statements of public concern must prove that the publisher acted in a grossly irresponsible manner. Chapadeau v. Utica Observer-Dispatch, 38 N.Y.2d 196, 199, 379 N.Y.S.2d 61, 64 (1975). See also, Jewell v. NYP Holdings Inc., 23 F. Supp.2d 348, 391-92 (S.D.N.Y. 1998) (adopting “incremental harm” defense to defamation and observing that New York law “broadly recognize[s] a series of different privileges in defamation cases, some qualified, others absolute.”). As discussed below, this court finds that HBI is a private figure plaintiff. Therefore, a conflict does exist as to plaintiff’s burden of proof.

This court finds that Pennsylvania law applies to plaintiff’s substantive law claims since Pennsylvania has the greatest interest in protecting HBI’s reputation. The purpose of a defamation suit is to compensate an individual for harm to one’s reputation inflicted by the defamatory statement. Pro Golf Manufacturing Inc. v. Tribune Review Newspaper Co., 761 A.2d 553, 556 (Pa. Super. 2000). See also, Wilson v. Slatalla, 970 F. Supp. 405, 414 (E.D. Pa. 1997); Fitzpatrick v. Milky Way Productions Inc., 537 F. Supp. 165, 171 (E.D. Pa. 1982). Since the state of a plaintiff’s domicile is generally the place where most of his reputational contacts are found, the state with the greatest interest in vindicating the plaintiff’s good name and providing compensation for harm caused by the alleged defamation is that state. Wilson, 970 F. Supp. at 414. Additionally, section 150 of the Restatement (Second) of Conflicts of Laws, relating to multi-state defamation, states, in pertinent part, that: “[w]hen a corporation, or other legal person, claims that it has been defamed by an aggregate communication, the state of most significant relationship will usually be the state where the corporation, or other legal person, had its principal place of business at the time, if the matter complained of was published in that state.” Restatement (Second) of Conflicts of Laws §150(3). But see, Restatement (Second) of Conflicts of Laws §149 (relating the general rule that in defamation action, “the local law of the state where the publication occurs' determines the rights and liabilities of the parties, except as stated in section 150 ...”). See also, La Luna Enterprises Inc. v. CBS Corp., 74 F. Supp.2d 384, 385 (S.D.N.Y. 1999) (under New York’s choice of law rules, the state of the plaintiff’s domicile in a defamation case usually has the most significant relationship to the case provided that the publication was in the plaintiff’s state).

Here, HBI is a Delaware corporation with its principal place of business in Philadelphia, Pennsylvania. Defendants, on the other hand, are New York residents. The alleged defamatory publications originated in the September 22,1998 research report that appeared on defendants’ website. The alleged defamatory statements also appeared in Business Week magazine and the Philadelphia Inquirer. Since the alleged defamatory statements appeared in more than one state, including Pennsylvania, the state with the most significant relationship appears to be Pennsylvania, the state of HBI’s domicile. Restatement (Second) of Conflicts of Laws §150(3). Accordingly, this court will apply Pennsylvania law to plaintiff’s substantive claims.

II. HBI Is Not a General Public Figure Nor a Limited Purpose Public Figure Nor Is the Subject of the Alleged Defamatory Statements Necessarily a Matter of Public Controversy

Pennsylvania law holds that the initial question whether a plaintiff is a public or private figure is an issue of law to be determined by the trial court. Brown v. Philadelphia Tribune Co., 447 Pa. Super. 52, 59, 668 A.2d 159, 163 (1995); Iafrate v. Hadesty, 423 Pa. Super. 619, 623, 621 A.2d 1005, 1007 (1993); Wagstaff v. The Morning Call Inc., 41 D.&C.4th 431, 439-40 (Lehigh Cty. 1999). In Gertz, the Supreme Court identified two classes of public figures:

“In some instances an individual may achieve such pervasive fame or notoriety that he becomes a public figure for all purposes and in all contexts. More commonly, an individual voluntarily injects himself or is drawn into a particular public controversy and thereby becomes a public figure for a limited range of issues. In either case such persons assume special prominence in the resolution of public questions.” 418 U.S. at 351. Accord Wolston v. Reader’s Digest Assoc., 443 U.S. 157, 165, 99 S.Ct. 2701, 61 L.Ed.2d 450 (1979).

Whether a person is a limited purpose public figure depends upon the nature of the controversy and the extent of plaintiff’s involvement with it. Rutt v. Bethlehems’ Globe Publishing Co., 335 Pa. Super. 163, 181, 484 A.2d 72, 81 (1984) (quoting Gertz, 418 U.S. at 352). A person may be considered a limited purpose public figure “if he is attempting to have, or realistically can be expected to have, a major impact on the resolution of a specific pub-lie dispute that has foreseeable and substantial ramifications for persons beyond its immediate participants.” Id. at 180-81, 484 A.2d at 80 (quoting Waldbaum v. Fairchild Publications Inc., 201 U.S.App.D.C. 301, cert. denied, 449 U.S. 898, 101 S..Ct. 266, 66 L.Ed.2d 128, 627 F.2d 1287, 1292 (1980)). A person becomes a limited purpose public figure because he invites and merits “attention and comment.” Iafrate, 423 Pa. Super. at 623, 621 A.2d at 1007 (quoting Gertz, 418 U.S. at 346). However, a private individual “is not automatically transformed into a public figure just by becoming involved in or associated with a matter that attracts public attention.” Rutt, supra at 181, 484 A.2d at 81 (quoting Wolston, 443 U.S. at 167, 99 S.Ct. at 2707, 61 L.Ed.2d at 450).

Additionally, a public controversy must be a real dispute, the outcome of which affects the general public or some segment of it in an appreciable way. Iafrate, 423 Pa. Super. at 623-24, 621 A.2d at 1007. “[Pjrivate concerns or disagreements do not become public controversies simply because they attract attention.” Id. at 624, 621 A.2d at 1007. To determine whether such a controversy exists, the court must examine whether persons were actually discussing some specific question and if the press was covering the debate and reporting what people were saying; if the issue was being debated publicly and if it had foreseeable and substantial ramifications for non-participants. Id. at 624, 621 A.2d at 1008. However, “those charged with defamation cannot, by their own conduct, create their own defense by making the claimant a public figure.” Brown, 447 Pa. Super. at 59, 668 A.2d at 162 (quoting Hutchinson v. Proxmire, 443 U.S. 111, 135, 99 S.Ct. 2675, 2688, 61 L.Ed.2d 411, 431 (1979)).

It is trae that corporations may be public figures for purposes of defamation actions. See Steaks Unlimited Inc. v. Deaner, 623 F.2d 264, 273 (3d Cir. 1980); Computer Aid Inc. v. Hewlett-Packard Co., 56 F. Supp.2d 526, 535 (E.D. Pa. 1999); Reliance Ins. Co. v. Barron’s, 442 F. Supp. 1341, 1347-48 (S.D.N.Y. 1977). This is so because a corporation has greater access to channels of communication which allow it to make an effective response in the public forum to counteract allegedly defamatory statements. Steaks, 623 F.2d at 273; Computer Aid, 56 F. Supp.2d at 536. However, this is merely one of the considerations in determining whether a particular plaintiff is a public figure, and absent other factors, a corporation should not be deemed a public figure. Computer Aid, 56 F. Supp.2d at 536. Rather, a more important factor is whether, a plaintiff, by injecting itself into the public arena and engaging the public’s attention, has effectively assumed the risk of potentially unfair criticism. Steaks, 623 F.2d at 213.

In Steaks, the Court of Appeals for the Third Circuit deemed that Steaks is not a public figure in the general sense because there was no evidence of its fame or notoriety or that it is widely involved in public affairs. Id. However, the court did find that it was a limited purpose public figure for purposes of the controversy at issue on account of its intensive advertising campaign in the Pittsburgh area regarding its product, which included broadcasts over local radio stations, ads in local newspapers, large signs displayed at sales locations and handbills given to person’s walking near Steaks Unlimited sales locations. Id.

In contrast, in Computer Aid, the underlying transaction involved an agreement to develop a product and a subsequent merger by which Hewlett-Packard became the legal successor in interest of one of the parties to the agreement. 56 F. Supp. at 530. Hewlett-Packard’s counterclaim, alleging defamation, arose from a press release regarding the plaintiff’s claims and the underlying agreement to develop a product. Id. at 531. The district court did not find that Hewlett-Packard was a general purpose figure, despite the fact that it is one of the largest and most influential corporations in the world or that its stocks are one of the most actively traded on the New York Stock Exchange. Id. at 535. The court also found that Hewlett-Packard was not a limited purpose public plaintiff with respect to the subject matter of the publicity, despite its several press releases regarding the transaction at issue and its circulation of informational material to its staff and customers. Id. at 537. But see, Reliance, 442 F. Supp. at 1348 (holding that Reliance is a general purpose public figure where Reliance is a large corporation whose shares are traded on the New York Stock Exchange, its business is in a field subject to state regulation, it files periodic reports with the SEC and it is offering to sell its stock to the public which was the subject of the libel action against the financial magazine).

Here, defendants contend that HBI is a public figure because it thrust itself into two public controversies: (1) the effectiveness of its drug Ampligen in the treatment of high-profile diseases and (2) the value of its publicly-traded common stock. In support of their position, defendants argue that HBI’s stock is traded on the AMEX, HBI promotes Ampligen in press releases, HBI has released the results of clinical trials regarding Ampligen that have resulted in over 200 peer-review publications and articles, and HBI has solicited research grants from the federal government. Plaintiff, in response, argues that it cannot be deemed a public figure simply because it received research grants for Ampligen. See Hutchinson v. Proxmire, 443 U.S. 111, 135, 99 S.Ct. 2675, 61 L.Ed.2d 411 (1979) (reversing an award of summary judgment against researcher who received government grants but could be deemed a public figure merely by such receipt). Plaintiff also contends that the effectiveness of Ampligen has not been the subject of public debate since it has been under clinical study by HBI for over 10 years, has been subject to FDA regulations, and with the exception of private litigation, has remained uncontroversial except within the medical or scientific community.

In light of the decision in Computer Aid, which involved a more renown corporation, this court finds that HBI should not be deemed a general purpose or limited purpose public figure for purposes of this controversy. Further, it is not evident that a public controversy exists regarding the value of HBI’s stock or the effectiveness of its drug, Ampligen. Rather, it may well be that defendants created this “controversy” by publishing its negative reports regarding HBI and its product, and such conduct may not constitute a defense. See Brown, 447 Pa. Super. at 59, 668 A.2d at 162. Therefore, this court finds that HBI should be considered a private plaintiff and HBI need only prove that the alleged defamatory statements were negligently published.

IH. The Statements at Issue Constitute Either Assertions of Fact or Opinions That Imply the Existence of Undisclosed Facts Capable of a Defamatory Meaning

Pennsylvania courts hold that the trial court must determine, as a matter of law, whether a statement is one of fact or opinion, as well as determining whether the challenged statement is capable of having defamatory meaning. Constantino, 166 A.2d at 1269; Green, 692 A.2d at 174; Brown v. Philadelphia Tribune, 447 Pa. Super. at 60, 668 A.2d at 163. Communicated opinions are actionable when they can be reasonably understood to imply the existence of undisclosed defamatory facts. Green, 692 A.2d at 174. Further, in cases where a plausible innocent interpretation of the communication co-exists with an alternative defamatory interpretation, the issue must proceed to a jury. Id.

Our Superior Court describes the conditional privilege where it states that:

“Communications made on a proper occasion, from a proper motive, in a proper manner, and based upon reasonable cause are privileged.
“An occasion is conditionally privileged when the circumstances are such as to lead any one of several persons having a common interest in a particular subject matter correctly or reasonably to believe that facts exist which another sharing such common interest is entitled to know.” Davis v. Resources for Human Development Inc., 770 A.2d 353, 358 (Pa. Super. 2001). (citations and internal quotations omitted)

Once a communication’s subject matter is deemed conditionally privileged, the plaintiff must establish that the privilege was abused by the defendant. Id. at 359. To prove that defendant abused the privilege, the plaintiff must show that “the publication is actuated by malice or negligence, is made for a purpose other than that for which the privilege is given, or to a person not reasonably believed to be necessary for the accomplishment of the purpose of the privilege, or includes defamatory matter not reasonably believed to be necessary for the accomplishment of the purpose.” Id.

Even assuming arguendo that a conditional privilege attached to defendants’ statements, since the effectiveness of a drug in treating certain diseases is in the public interest and potential investors need to know the value of the company in which they are buying stock, plaintiff may show abuse of the privilege through either malice or negligence. These are issues of fact, relating to defendants’ intent in publishing the statements and as to whether such abuse actually occurred, which precludes this court from granting summary judgment.

First, in deciding whether a statement is an actionable opinion, the court may rely on section 566 of the Restatement (Second) of Torts which states that:

“A defamatory communication may consist of a statement in the form of an opinion but a statement of this nature is actionable only if it implies the allegation of undisclosed defamatory facts as the basis for the opinion.” Quoted in Green, 692 A.2d at 174.

Comment (c) of section 566 clarifies the distinction where it states, in pertinent part, that: the derogatory opinion expressed in the comment must have been based on undisclosed defamatory facts, the defendant is subject to liability.” Restatement (Second) of Conflicts of Laws §566, cmt (c).

“A simple expression of opinion based on disclosed or assumed nondefamatory facts is not itself sufficient for an action of defamation, no matter how unjustified and unreasonable the opinion may be or how derogatory it is. But an expression of opinion that is not based on disclosed or assumed facts and therefore implies that there are undisclosed facts on which the opinion is based, is treated differently. The difference lies in the effect upon the recipient of the communication. In the first case, the communication itself indicates to him that there is no defamatory factual statement. In the second, it does not, and if the recipient draws the reasonable conclusion that

The court should consider the effect the statement would fairly produce or naturally engender in the minds of those average persons among whom it is intended to circulate. Constantino, 766 A.2d at 1270.

Here, the 16 statements at issue, taken from the Business Week article of September 17, 1998, the September 22, 1998 three-part report and many post-report press releases are arguably either assertions of fact or opinions which can be reasonably construed as implying undisclosed facts which may have a derogatory meaning. Contrary to defendants’ position, it is not clear that the statements are merely opinions simply because of the inclusion of the preceding language that “we believe ...,” or the fact that defendants are recommending the short sale. Genuine issues of fact exist regarding whether the statements were interpreted as defamatory by the readers of the statements and whether or not the statements were substantially true. Additionally, issues of fact exist regarding whether plaintiff’s damages are calculable and whether they are directly attributable to defendants’ statements.

Therefore, this court cannot grant summary judgment in favor of defendants on plaintiff’s defamation claim. Similarly, issues of fact preclude this court from granting summary judgment on plaintiff’s claims for commercial disparagement, tortious interference with existing and/or prospective business relations and civil conspiracy.

CONCLUSION

For the reasons set forth, this court denies defendants’ motion for summary judgment. A contemporaneous order consistent with this opinion will be issued.

ORDER

And now, September 6, 2001, upon consideration of defendants’ motion for summary judgment, plaintiff’s response in opposition, the parties’ respective memo-randa, all other matters of record, and in accord with the opinion being filed contemporaneously with this order, it is ordered that defendants’ motion for summary judgment is denied.

      . The facts presented here are intended as background in reviewing the nature of this action and the present motion. For more detail on the facts and procedural history of this case, please see this court’s previous opinion, Hemispherx Biopharma Inc. v. Asensio, July 2000, no. 3970 (C.P. Phila. February 14, 2001) (Sheppard, J.).

      . The term — “exhibits” means those exhibits attached to the parties’ respective memoranda of law pertinent to the present motion. Plaintiff’s exhibits are designated by number as exhibit P-1, P-2, P-3, etc. Defendants’ exhibits are designated by letter as exhibit D-A, D-B, D-C, etc.

      . Plaintiff’s other claims for disparagement, tortious interference with existing and/or prospective business relations and civil conspiracy all depend on the viability of the defamation claim.

      . In contrast, the tort of commercial disparagement is to protect one’s economic interest against pecuniary loss. Pro Golf Manufacturing, 761 A.2d at 556.

      . Defendants, in their reply brief, raised the issue that the statements are conditionally privileged since the safety and efficacy of a new experimental drug are of important interest to the public.


source: Caselaw Access Project

author: MAHON, J.,

license: Public Domain

text:
    Sanchez v. Sanchez

      C.P. of Chester County,
    no. 0241N2000.

      Mark R. Ashton, for plaintiff.

      Albert Momjian and Catherine M. McFadden, for defendant.
    July 9, 2001
   MAHON, J.,

And now, July 9, 2001, on consideration of the exceptions of Michael A. Sanchez (Father) to the report and recommendations issued by Hearing Officer Lynn A. Snyder following, and on the basis, of, a hearing conducted on April 4, 2000, in the matter of the complaint for support presented by Jennifer L. Sanchez (Mother); as well as Father’s petition to open the record and for modification, special relief and credit on arrearages; we enter the following:

OPINION

The parties hereto were married in March 1982 and separated in October 1987. Three children were bom of the marriage: son Andrew, age 16 at the time of the hearing; and two daughters: Jessica, age 15; and Shauna, age 12. By agreement dated April 21, 1987, following their separation, the parties reached an accommodation as to the equitable division of the marital estate and other matters, including custody and support of the children, attendant upon the dissolution of the marriage. On the matter of child support, the agreement required Father to remit a monthly sum to Mother for support of the children and to reimburse Mother for submitted expenses incurred including those related to the children’s out-of-pocket medical, dental, optician, orthodontic, extracurricular, travel and vacation expenses. The unallocated monthly obligation of Father is the subject of an annual cost of living escalator of six percent and, in 2000, the current year at the time of the hearing, equaled $3,250 per month. A final decree in divorce incorporated the parties’ property settlement agreement.

Both parents remarried following their divorce and it appears that they were able to manage their continuing reciprocal obligations toward their children without judicial intervention throughout the more than 13 years between their separation and the commencement of these proceedings by Mother on February 9,2000, by the presentation of a complaint for support. Father attributes Mother’s dissatisfaction with their long-standing arrangement to her divorce from her second husband and the adverse effect on her circumstances resulting from the loss of the resources her second husband contributed to the household. We do not find it necessary to our decision to weigh the strength of the evidence supportive of this proposition.

Following an evidentiary hearing on April 4, 2000, the hearing officer entered an interim order dated June 6, 2000, in which she determined that Father’s net monthly income is $18,198 and Mother’s net income is $921. Father was ordered to remit to the benefit of Mother the monthly sum of $8,543, which includes $6,043 in current support and $2,500 toward total arrearages of $24,203.75 accrued in the period since the filing of Mother’s complaint; and, additionally, to pay all unreim-bursed medical expenses related to the children in excess of an annual total of $250 as well as “all reimbursed medical/dental, optical, orthodontia and therapy costs,” to provide comprehensive medical insurance for the children, to pay directly to Andrew’s private school the tuition then equaling $1,000 per month and all costs related to books and fees, to make all car payments and insurance premium payments related to Andrew’s automobile, and to pay certain fees and costs related to the proceedings.

The hearing officer’s report and recommended order, dated May 25, 2000, includes the determination that Father’s income available for the support of these children is $8,414 consisting of a net monthly income after taxes of $32,172 as the founder and chief executive officer of Sanchez Computer, and reasonable monthly household expenses of $23,754 related to a 10-acre property improved by a $3.3 million home on the Main Line; and that Mother had no income available for support since her monthly expenses of $2,069 related to the five-bedroom detached residence in which she and the children live in Phoenixville, Chester County, exceeded her net monthly income of $921 as a part-time receptionist at the Phoenixville Hospital. The hearing officer further determined that the reasonable expenses attributable to the children equaled $8,253 per month. On these bases as well as the formula described in Melzer v. Witsberger, 505 Pa. 462, 480 A.2d 991 (1984), the hearing officer recommended the imposition of a support order requiring Father to remit on behalf of Mother monthly the whole of the childrens’ expenses consisting of an unallocated payment of $6,043 and an additional $2,210 representing reimbursement for Andrew’s tuition and books at the Devon Preparatory School in Malvern ($1,020/month); Andrew’s automobile-related expenses including insurance in connection with the 2000 model Ford Mustang which Father had recently purchased for him ($726/month); and Mother’s out-ofpocket expenses for all three of the childrens’ medical, dental, optician, orthodontic and other therapeutic services ($464).

In his. exceptions, Father seeks review of the recommended support order and, specifically, Father contends that Mother adduced no evidence justifying judicial intervention in the first instance since it is undisputed that Father has paid without fail and has regularly supplemented the unallocated $3,250 in monthly child support by reimbursing Mother for any additional expenses related to the care of their children.

In addition, Father contends that the support obligation determined by the hearing officer is in excess of the reasonable needs of the children and, particularly, that the hearing officer failed to properly consider the expenses incurred by Father in the care of the children while in his custody; improperly attributed to Mother certain expenses which had been borne by Father; largely accepted without substantial evidentiary support Mother’s contention that the reasonable expenses for the children were $750, $300, and $500 per month for entertainment, gifts and vacation, respectively; and improperly attributed 75 percent of Mother’s home debt service to the children.

Finally, Father asserts that the hearing officer improperly calculated Father’s income available to meet his support obligation. This contention challenges the hearing officer’s determination to include as income sums available to Father at the time of the hearing by borrowing against the value of a large block of Sanchez Computer stock he had deposited with J.P. Morgan & Company in an “exchange fund” which he described as a “diversification technique” and which had permitted him in recent years to make use of some $9 million of the value of his corporate securities for the purposes of renovating the Devon homestead and purchasing the vacation residence as well as providing a flow of cash offsetting some $65,000 per month in interest expense related to the margin borrowings. The hearing officer apparently concluded that irrespective of Father’s reported income for federal tax purposes, his “real” income resources were at least equivalent to his expenses (before considering the $65,000 monthly exchange fund interest expense) or $32,174 per month. Father concludes from this that the hearing officer included in his monthly income, margin borrowing of $13,976 and contends that this constituted legal error.

In his petition, Father asserts that Mother was required to but did not inform him of the fact that their son Andrew had been criminally cited on a particular date in March 2000 at a time prior to the hearing before Hearing Officer Snyder for reckless driving at 3 a.m. and for violating his junior license while driving the automobile Father recently purchased for him; that Andrew has not reimbursed Father $4,000 for the automobile as they had agreed; that the value of Father’s Sanchez Computer stock has plummeted to around $ 16.50/share since the hearing when its value in excess of $33/share produced an aggregate valuation of Father’s holdings of in excess of $110 million; that, as a consequence of this decline, Father has been notified that his ability to borrow against his margin account with J.P. Morgan & Co. has been exhausted thereby making it impossible for him (without liquidating assets) to comply with the recommended support order under which $13,974/month of “income” was imputed to Father based on his ability to borrow against the margin account; and that Father should be credited for direct payments of $14,072.99 and $9,928 representing expenses of the two daughters’ month-long trip to Australia.

Although the issues raised by Father include matters of considerable interest and significance, we find it necessary to our decision to resolve only the challenge raised to the hearing officer’s determination of Father’s income and the childrens’ reasonable expenses.

Father’s challenge to the propriety of the inclusion of margin borrowing in income available for support appears to us to be well-founded. Of course, the extent of a father’s assets are certainly properly considered in fashioning a child support order. We see no reason, however, to equate ability to earn with capacity to borrow. No authority presented to us by the parties or discovered by our research has held that a father’s ability to secure borrowings by his assets is itself “income” available for support. The hearing officer seems to have been persuaded that the salary paid to Father by his corporation did not represent the whole of his income. Of course, in the event that income has been artificially reduced by the obligor, the hearing officer may, to the extent that the evidence of record will support an appropriate finding, utilize earning capacity instead. Commonwealth ex rel. Gitman v. Gitman, 428 Pa. at 395, 237 A.2d at 186 (“court is not restricted to the husband’s actual earnings but may also consider his earning power”); McMahon v. McMahon, 167 Pa. Super. 51, 74 A.2d 718 (1950) (same); Hecht v. Hecht, 189 Pa. Super. at 281, 150 A.2d at 142 (“If there is one rule regarding support orders which is firmly established, it is that the court is not restricted to the defendant’s actual earnings, but should also consider his earning power.”). As the Superior Court wrote in Heisey v. Heisey, 430 Pa. Super. 16, 20, 633 A.2d 211, 212 (1993):

“When actual, net earnings do not reflect earning capacity, the trial court should investigate a variety of sources to determine a party’s true wealth. DeMasi v. DeMasi, 366 Pa. Super. 19, 34, 530 A.2d 871, 878 (1987). Normally, the court should pierce the corporate veil to determine if a spouse’s ability to pay support is enhanced by advantages owing to ownership or membership in a corporation. See e.g., Pacella v. Pacella, 342 Pa. Super. 178, 492 A.2d 707 (1985) (where spouse receives numerous no-interest loans from corporation, has numerous personal expenses paid by corporation and co-mingles personal funds with corporate funds, it is appropriate to consider his earning capacity rather than salary in calculating alimony award).”

While a wide-reaching investigation into Father’s earning capacity would have been entirely proper, the adjustment adopted in this case, adding hypothetical margin borrowing to reported income, finds no warrant in reason or in controlling case law.

As we have indicated, Father also challenges the hearing officer’s determination of the reasonable expenses related to care of the children while in Mother’s custody. The principles governing this determination are well-settled and include:

“In order to define the support obligation of each parent, a court must first determine the needs of the children: a court has no way of arriving at a reasonable order of support unless it knows how much money is actually required to care for the children involved. . .. [P]arents are legally obligated to provide only for the reasonable expenses of raising their children....
“This is not to say that children are entitled only to the bare necessities; parents do have an obligation to share with their children the benefit of their financial achievement. See Conway v. Dana, [456 Pa. 536, 538, 318 A.2d 324, 325 (1974)] (‘station in life of the parties’ is relevant in determining parents’ capacity to support their children). Thus, where the parents’ incomes permit, it may be perfectly proper for a court to recognize that certain expenditures for recreation, entertainment, and other nonessential items are reasonable and in the best interest of the children....
“Nevertheless, neither parent should be obligated to pay for ‘extras’ — those items which go beyond what is reasonably necessary for the children’s welfare — in which that parent does not concur. Neither parent should be permitted to increase the parties’ support obligations by unilaterally indulging the children in things which are not reasonably necessary for their well-being. We hold, therefore, that in each case the hearing court must first calculate the reasonable expense of raising the children involved, based upon the particular circumstances— the needs, the custom, and the financial status — of the parties.” Melzer v. Witsberger, 505 Pa. 462, 470-71, 480 A.2d 991, 995-96 (1984). (emphasis in original)
“[T]he purpose of a support order, such as that under review, is ‘to secure such an allowance to [the] child as is reasonable, having in mind the husband’s property and earning capacity and the station in life [of] the parties.’ Commonwealth ex re [sic] Kallen v. Kallen, 200 Pa. Super. 507, 508-509, 190 A.2d 175, 176 (1963). Moreover, ‘a wealthy father has the legal duty to give his children the “advantages” which his financial status indicates to be reasonable.’ Branch [v. Jackson, 427 Pa. Super. 417, 420, 629 A.2d 170, 171 (1993)] (quoting Hecht v. Hecht, 189 Pa. Super. 276, 150 A.2d 139 (1959)).... Thus, the critical factor in determining standard of living is clearly the financial circumstances of the [father], not his philosophical position on the precise limits of the good life— what he can afford is the question, not what he is willing to pay for.” Karp v. Karp, 455 Pa. Super. 21, 27, 686 A.2d 1325, 1328 (1996), appeal granted, 549 Pa. 701, 700 A.2d 441 (1997). See also, Edelstein v. Edelstein, 399 Pa. Super. 536, 542, 582 A.2d 1074, 1077 (1990).
“Reasonable needs are not, of course, limited to the bare necessities of life. The reasonable needs of a child whose parent or parents are wealthy may well include items which would be considered frivolous to parents who are less well off. As was so eloquently stated by the Honorable Robert E. Woodside: ‘necessaries,’ and ‘luxuries’ are relative matters.... Children of wealthy parents are entitled to the educational advantages of travel, private lessons in music, drama, swimming, horseback riding, and other activities in which they show interest and ability. They are entitled to the best medical care, good clothes, and familiarity with good restaurants, good hotels, good shows, and good camps. It is possible that a child with nothing more than a house to shelter him, a coat to keep him warm and sufficient food to keep him healthy will be happier and more successful than a child who has all the ‘advantages,’ but most parents strive and sacrifice to give their children ‘advantages’ which cost money.... A wealthy father has a legal duty to give his children the ‘advantages’ which his financial status indicates to be reasonable.... [A parent] should not be forced by a support order to make personal sacrifices to give them all the advantages to which we referred above, but a father with the assets, the youth, and the ability of the defendant can furnish his children with these advantages without any recognizable sacrifice on his part.” Branch v. Jackson, 427 Pa. Super. 417, 419-20, 629 A.2d 170, 171 (1993) (quoting Hecht v. Hecht at 283-84, 150 A.2d at 143).
“In arriving at the amount a mother and children need in order to live properly, the court below seemed to be of the belief that so long as they were assured a roof over their heads, sufficient raiment and adequate food on the table, the husband-father had met his obligations of support. This reasoning is an erroneous one. If the husband-father can afford for himself a caviar-champagne standard of living, it is not justice, nor legal, that the wife should be content with a tent and bread-and-butter menu for herself and brood. Dignity of living, commensurate with income, is as much a necessity as the bare essentials for survival.” Commonwealth ex rel. Gitman v. Gitman, 428 Pa. at 394, 237 A.2d at 185 (plurality opinion of Mr. Justice Musmanno).
. “Of course, it is not the purpose of a support order to distribute the father’s estate. . . . This does not mean, however, that the father’s property and condition in life is not relevant in determining the amount of the order. Another rule firmly established in support cases is that in fixing the order, the defendant’s property and condition in life must be considered....
“The court below likewise erred in taking too narrow a view on what the needs of the children are. He held, for example, that summer camps are a ‘luxury,’ and that expenses of this nature may not be included in a support order. In the case of most parents this would be true, but ‘necessaries,’ and ‘luxuries’ are relative matters. See Gimbel Brothers Inc. v. Pinto, 188 Pa. Super. 72, 145 A.2d 865 (1958) where we held that a fur coat was a necessary.

Father does not here challenge the recommended order as beyond his means. Neither does he challenge the determination that Mother’s reasonable needs exceed her separate income. The issue presented under the Melzer formula, therefore, is reasonable needs of the children. As we have indicated, the hearing officer found the reasonable child-rearing expenses incurred by Mother as custodial parent to equal $8,253 per month.

Mother’s evidence of these expenses centers on her exhibit P-4; a one-page list styled “Jennifer Sanchez statement of expenses.” Our description of the limitations of a similar document offered into evidence by the natural mother as custodial parent in the case reported as deMoss v. Bentley, 46 Ches. Co. Rep. 11 (1998) is equally applicable here:

“She submitted ... a list of expenses she purportedly allocates, or wishes she could allocate, to [the child]. She predicated her list upon speculation, basing her figures on estimates of expenses that might be incurred if her circumstances were consistent with the lifestyle to which she herself would like to be accustomed.” Id. at 13.

Mother does not assert that the expenses listed on P-4 represent current expenditures as, indeed, they could not inasmuch as they greatly exceed in the aggregate all of the income available to Mother. Moreover, Mother makes no attempt to explain how it is possible that she is able to defray all of her own living expenses by means of her income after taxes of $11,054 per year but requires three times this amount or $33,012 per year to defray the living expenses of each of her minor children.

As we have indicated, Father challenges the hearing officer’s determination of the reasonable needs of the children in four respects: (1) that it was error to attribute to the children 75 percent of Mother’s debt-service in connection with the home in Phoenixville in which she and the children reside; (2) that certain expenses paid directly by Father were improperly treated as Mother’s expenses for calculation purposes; (3) that the expenses incurred by Father while the children are in his custody were improperly disregarded; and (4) that certain particular expenses as found by the hearing officer, especially those related to gifts, entertainment and vacation, were overstated.

We agree with Father that it was error to attribute three-fourths of Mother’s home-related debt service to the children. The home in which the children and mother reside is titled in Mother’s name alone and constitutes a capital asset of Mother. An undisclosed portion of the monthly debt-service reduces the principal indebtedness with respect to this capital asset and, therefore, becomes an element of Mother’s net worth. While a mathematical apportionment of interest expense among the residents may be justified, there is no reason to place on Father any part of the expense related to principal debt. We so held by order dated June 30, 1999, in Milligan v. Milligan, docketed to no. 0169N1999 and no reason has been offered by Mother why reconsideration of this decision is here required.

Father contends that the hearing officer erred in treating expenses related to summer activities and vacations, educational activities, and clothing as Mother’s when, assertedly, they were borne by Father. We disagree. The formula specified in Melzer and applied by the hearing officer does not depend for its proper application on the correct identification of the party who, in the period prior to the proceeding, was responsible for defraying any particular expense. Rather, the result of the Melzer formula flows exclusively from a determination of each of the parents’ income available for support and the reasonable needs of the children. Each parent is obligated to pay that portion of the reasonable needs of the children which that parent’s available income bears to the total available income. This result may be adjusted to reflect various, specified unusual factors, but the identity of the party previously responsible for particular expenses is not among these. Therefore, if, as Father contends, the hearing officer erred in such a finding of prior responsibility, the error was harmless.

The hearing officer concluded that the children are in the custody of Father less than 10 percent of the time and, on this basis, disregarded from the analysis the custodial expenses incurred by Father during that period. Father contends that the record fails to support the finding as to the proportionate custodial time period and, therefore, his custodial expenses should not have been disregarded.

The parties dispute the extent of the time the children spend with their Father. Mother’s counsel somewhat disingenuously confined his testimonial examination to the period when all three children were with Father knowing that the many conflicting activities of the children only rarely permit them to visit their Father jointly and that visits by one or two children are the norm. However, Father did not attempt to quantify with any specificity the frequency or duration of such visits although he asserted that records available to him would have permitted such an analysis. On this state of the record we cannot accept Father’s assertion of error on the part of the hearing officer.

Father contends that the expenses utilized by the hearing officer for gifts, entertainment and vacation were overstated. In the report, the hearing officer attributed $38 per month to the childrens’ reasonáble expenses for the purpose of gifts, $750 per month for entertainment and $500 per month for vacation. This compares to the figures contained in Mother’s exhibit P-4 of $413, $750, and $730. We cannot argue-with the figure for gifts as adjusted by the hearing officer. The figures for entertainment and vacation, amounting to $9,000 and $6,000 per year respectively, represent substantial expenditures and are wholly unsupported on this record by anything more than Mother’s “wish list.”

Father’s principled disagreement with the report and recommended order centers on the necessity of any judicial involvement in this matter. For more than 13 years the parties successfully governed their affairs in accordance with their consensual agreement, incorporated in their divorce decree. In the light of the frequency and heated emotionality attending disputes in such matters, this is no small achievement and the parties are to be congratulated first for their foresight in drafting an agreement which, by means of a generous cost-of-living escalator, provided for the inevitable effect of the changing value of money as well as the increasing expense associated with child-rearing as children mature; and, even more significantly, for their evident ability to give proper priority in their effectuation of the agreement to the well-being of their children. There is no contest here that Father loves his children and has acted accordingly. In addition to matters related to ongoing support, it is undisputed that Father lavishes on his children expensive vacations, entertainment and gifts and has created and regularly funds substantial trust accounts for each of his offspring.

When we re-examine the recommended order taking into account the determinations set forth above and disregarding at this juncture those expenses for which Father has traditionally reimbursed Mother or has paid directly the provider or supplier, we find that about $500 per month remains out of the agreed monthly payment of $3,250 for entertainment, vacation and gifts. The evidence adduced by Mother is entirely insufficient to the task of establishing the inadequacy of this amount for these purposes. We find, therefore, that the reasonable needs of the children will be met and the obligations of support of Father will be satisfied by the following

ORDER

And now, July 9, 2001, consistent with the foregoing opinion, and based on the court’s determination that Michael A. Sanchez’ monthly income available for support is sufficient to meet the whole of the childrens’ reasonable needs; that Jennifer L. Sanchez has no income in excess of her reasonable needs; and that the reasonable needs of the children apart from those expenses paid directly by Father and specified below equal $3,250 per month (including $500 for entertainment, gifts and vacations with Mother), the following is hereby ordered and decreed:

(1) Michael A. Sanchez shall pay to the Chester County Domestic Relations office for transmission to Jennifer L. Sanchez the sum of $3,445 per month to be adjusted annually on the date of this order by the addition of a cost-of-living increase in the amount of six percent; for the support of Andrew, Jessica, and Shauna Sanchez (the children); subject to the following:

(2) Michael A. Sanchez shall, on submission of appropriate requests and/or invoices or notices of required payment, reimburse Jennifer L. Sanchez or pay directly to the provider or supplier all expenses related to the following on behalf of the children: all health/medical insurance and auto insurance for Andrew; unreimbursed medical, dental, orthodontic, optician and other therapeutic services; private school tuition and books; all school activity fees; all fees related to extracurricular activities including without limitation sports, horseback riding, art classes and supplies; extracurricular lessons including without limitation those involving music and musical instruments; and a portion of the vacation expense; specifically, those vacations which the children take with Father and those which they take alone and he approves.

(3) Arrearages, if any, shall be paid in one lump sum to the Chester County Domestic Relations Office for transmission to Jennifer L. Sanchez within 30 days- of the date of this order.

IMPORTANT LEGAL NOTICE

Parties must within seven days inform the domestic relations section and the other parties, in writing, of any material change in circumstances relevant to the level of support or the administration of the support order, including, but not limited to, loss or change of income or employment and change of personal address or change of address of any child receiving support. A party who willfully fails to report a material change in circumstances may be adjudged in contempt of court and may be fined or imprisoned.

Pennsylvania law provides that all support orders shall be reviewed at least once every three years if such a review is requested by one of the parties.

A mandatory income attachment will issue unless ob-ligor is not in arrears in payment in an amount equal to or greater than one month’s support obligation and (1) the court finds that there is good cause not to require immediate income withholding; or (2) a written agreement is reached between the parties which provides for an alternate arrangement.

      . DOB September 17, 1984.

      . DOB December 26, 1985.

      . DOB April 5, 1988.

      . We note that Mother responded affirmatively during the course of the hearing to the following question put to her by Father’s counsel: “The removal of your current husband from the household creates a hardship for you, does it not, in terms of meeting expenses?” See transcribed notes of testimony of the hearing conducted on April 4, 2000 (N.T.) at page 48.

      . These provisions are inconsistent in that the former, found in the pre-printed portion of the order, includes an obligation of Mother to pay the first $250 of unreimbursed medical expenses while the latter, found in the inserted, typewritten portion of the order headed “other conditions,” includes no obligation on the part of Mother to pay any portion of the unreimbursed medical expenses and places the whole of this expense on Father. Neither party has challenged or requested clarification of the aggregate effect of these provisions.

      . Father challenges this determination as unsupported by the record. Father’s gross income in the year 2000 as indicated by his exhibit P-1 admitted into evidence on April 4, 2000, was $293,567 consisting of wages, interest, dividends, and rental and partnership income. Net income after federal, state, and local taxes was $218,375 or $18,198 per month: the figure found by the hearing officer in the context of the interim order of June 6, 2000. Father contends that this is the only income figure supported by the record and that the inconsistent finding of the hearing officer in the context of the report that Father’s net income is $32,172 is error. For the reasons discussed in the text, we agree with Father’s position on this issue.

      . Father’s assets also include a vacation home in Maryland recently purchased for $1.65 million; a collection of luxury automobiles; a corporate turbo-prop aircraft; and other trappings typical of the lifestyle of a wealthy entrepreneur with a net worth at the time of the hearing of in excess of $110 million consisting primarily of issued stock of the corporation Father founded.

      . $99,036 per year.

      . Applicable in situations where the income of the parent(s) is greater than the maximum contemplated by the statewide support guidelines promulgated by general rule of the Supreme Court pursuant to 23 Pa.C.S. §4322.

      . The hearing officer’s explanation for the determination of Father’s net income in the report consists of nothing more than an assertion of its utility in marginal note 7 as follows: “Father through his margin loan is engaged in deficit financing. Nonetheless he is meeting not only the $32,172 expense listed in P-1 but also the $65,000 monthly payment on the [margin] loan. Therefore, $32,172 shall be utilized as the net monthly figure.”

      . Father’s net income figures do not account for the margin borrowing interest expense. This is the proper treatment under such cases as Commonwealth ex rel. Gitman v. Gitman, 428 Pa. 387, 393, 237 A.2d 181, 185 (1967).

      . We discuss below the error implicit in equating borrowing capacity with income or earning capacity. The hearing officer’s conclusion that Father’s income must be at least equivalent to the household expenses fails to consider the contribution of Father’s second wife, whose separate income in 1999 was in excess of $80,000, to those expenses.

      . Monthly expenses of $32,174 minus reported net monthly income of $18,198.

      . From Mother’s response to the petition it appears that this reimbursement may now have been accomplished. In any event, this is a matter of a contractual relationship between Father and Andrew and our decision herein leaves this contract and any remedies available thereunder unaffected.

      . At the time of this order, Father’s Sanchez Computer stock (NASDAQ symbol SCAT) has dropped even further, trading at around $ 13/share.

      . Our decision that it was an error to include margin borrowing capacity as income makes it unnecessary to reopen the record for receipt of evidence of this change in circumstances.

      . In her response to the petition, Mother contends that the liquidation required in order to comply with the hearing officer’s recommendation, assuming the entire obligation is met by this method and the stock price remained at the depressed value alleged, would require the sale of only 437 shares per month out of Father’s holdings of in excess of 3 million shares and this trivial reduction would constitute no hardship to Father and would not have (as an insider sale) any adverse effect on the stock price generally.

      . We have considered Father’s direct payment of expenses, including those related to his children’s vacations, in fashioning the order we enter herewith.

      . See, for example, the Divorce Code provisions concerning the statewide support guidelines codified at 23 Pa.C.S. §4322 (“In determining the reasonable needs of the child . . . and the ability of the obligor to provide support, the guidelines shall place primary emphasis on the net incomes and earning capacities of the parties, with allowable deviations for unusual needs, extraordinary expenses and other factors, such as the parties’ assets, as warrant special attention.” (emphasis supplied)) Accord: Hoag v. Hoag, 435 Pa. Super. 428, 434, 646 A.2d 578, 581-82 (1994) (“Husband’s actual financial condition is determinative. The trial court, in calculating a support award, must consider every aspect of a party’s financial ability to pay, including property interests, stocks and other forms of investment.”); Shutter v. Reilly, 372 Pa. Super. 251, 255-56, 539 A.2d 424, 426 (1988) (quoting 23 Pa.C.S. §4322); Commonwealth ex rel. Gitman v. Gitman, 428 Pa. at 395, 237 A.2d at 186 (“In determining the appropriate amount of the order the court is not restricted to the husband’s actual earnings but may also consider ... the nature and extent of his property.”); Commonwealth ex rel. Rankin v. Rankin, 170 Pa. Super. 570, 573, 87 A.2d 799, 801 (1952) (“In any view the amount of the order is justified by the large capital resources of the respondent, considered in conjunction with his actual income.”); Hecht v. Hecht, 189 Pa. Super. 276, 282, 150 A.2d 139, 143 (1959) (“The court below should have considered the father’s property.”).

      . Mother responded with the assertion “I currently cannot” to the following question: “You’re really not spending that amount of money for yourself and the children at the present time?” N.T. 47 p. 57.

      . $8,253 monthly times 12 months divided by three children.

      . We recognize that the desire of Mother to have her children enjoy a lifestyle more costly than her own and more nearly approaching that of Father explains a portion of this discrepancy. This factor, in our view, cannot explain the whole of this inconsistency in Mother’s position. On the basis of this inconsistency alone, we are compelled to conclude either that the reasonable expenses of the children are less than that determined by the hearing officer or that Mother’s separate income is greater than she has reported. Since Mother has no significant source of income other than her part-time employment and the monies she receives from Father and there is no evidence that Mother is consistently living beyond her means, she can have no expenses beyond those within the means created by her employment income unless she devotes a portion of the monies she receives from Father to that purpose. We will not assume such misappropriation. Therefore, the conclusion is inescapable that the reasonable expenses of the children are less than that determined by the hearing officer.

      . N.T. at p. 46.

      . Father’s exceptions at ¶2^).

      . Pursuant to Pa.R.C.P. no. 1910.16-4(c)(1):
      “The support guidelines contemplate that the obligor has regular contact, including vacation time, with his or her children, and that he or she makes direct expenditures on behalf of the children. When, however, the children spend 40 percent or more of their time during the year with obligor, a rebuttable presumption exists that the obligor is entitled to a reduction in the basic support obligation to reflect this additional time. Except as provided in subsections (2) and (3) below, the reduction shall be calculated pursuant to the formula set forth in part II of subdivision (a) of this rule. For purposes of this provision, the time spent with the children shall be determined by the number of overnights they spend during the year with obligor.”
      No view of the record would support a finding that the children, individually or in any combination, even approach 40 percent of the yearly “overnights” with Father. Indeed, with the exception of vacation travels, overnight visiting with Father appear on this record to be quite rare.

      . N.T. at p. 86.

      . N.T. at p. 88.

      . At the same time, however, we would not permit Father to so arrange financial matters as to reserve to himself all of the largesse and joyful activities enjoyed by his children. Mother does not argue and there is no indication on this record that this has occurred.

      . We include and adopt the hearing officer’s determinations with respect to the childrens’ expenses for electric, gas and water utilities, telephone (including Andrew’s cellular telephone), lunches, automobile fuel, clothing, food, haircutting, allowances, household help, homeowner’s insurance, periodical subscriptions, cable television and internet provider. The evidence indicates (and we will require) that Father reimburses or directly pays for expenses related to health/medical insurance for all three children and auto insurance for Andrew, unreimbursed medical, dental, orthodontic, optician and other therapeutic services, private school tuition and books, all school activity fees, all fees related to extracurricular activities including without limitation sports, horseback riding, art classes and supplies, and lessons involving music and musical instruments, and a portion of the vacation expense; specifically, those vacations which the children take with Father and those which they take alone and he approves.

      . This was the figure in calendar 2000. It must be adjusted to reflect this year’s cost-of-living increase.

      . The aggregate of the figures determined by the hearing officer for those expenses enumerated in the first sentence of the preceding marginal note is $2,766 per month.

      . Our resolution of these issues renders moot the matters raised by Father’s petition.

      . In calendar 2000.

      . $3,250 plus six percent cost-of-living increase of $195.


author: CLOUSE, P.J.,

text:
    Nolen v. Newtown Township

      C.P. of Delaware County,
    no. 99-1020.

      Marc B. Kaplin and David N. Bresder, for plaintiff.

      Thomas Gallagher, Kathleen M. Ricciardi and Bruce A. Irvine, for defendant.
    June 8, 2001
   CLOUSE, P.J.,

Newtown Township enacted an ordinance on November 23, 1998. The ordinance suspended subdivision and land development approvals. The ordinance provided that no parcel or tract of land located within the township could be subdivided into smaller parcels for development. The ordinance provided that it would be in effect for a period of 18 months, unless extended by further action of the board of supervisors.

James A. Nolen III, owned certain parcels of land within the township which he desired to subdivide and develop, but could not, due to the subject ordinance. Therefore, he filed a petition for the appointment of a board of view pursuant to section 502(e) of the Pennsylvania Eminent Domain Code (26 P.S. §1-502(e)). Newtown Township filed preliminary objections to the petition for the appointment of a board of view. This court denied the preliminary objections by an order dated June 29, 2000. This court also issued an opinion in support of its aforesaid order.

Newtown Township petitioned this court for reconsideration. Newtown Township has advanced two basic arguments in support of its petition for reconsideration. First, that there must be an evidentiary hearing in which Mr. Nolen must prove that the ordinance has resulted in a taking. Second, the township argues that the case of Tahoe Sierra v. Tahoe Regional Planning Agency, 228 F.3d 998 (9th Cir. 2000), decided by the U.S. Court of Appeals for the Ninth Circuit, provides that an ordinance temporarily suspending land development does not constitute a taking. This court will first address the Tahoe Sierra case.

First, the Tahoe Sierra case is not precedent for this court. Second, the principal question in the Tahoe Sierra case was whether a temporary planning moratorium enacted by a regional planning agency effected a taking of the affected parcels of property under the standard set forth in Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992). This standard requires a finding that the regulation at issue denies all economically beneficial or productive uses of the subject land. The standard in Pennsylvania is different than the federal standard set forth in Lucas, which is derived from the Fifth Amendment to the United States Constitution. The Pennsylvania standard for determining whether a de facto taking has occurred is whether the subject governmental action has “substantially deprived the owner of the beneficial use of his property.” See Visco v. PennDOT, 92 Pa. Commw. 102, 498 A.2d 984 (1985); and Miller and Son Paving Inc. v. Plumstead Township, Bucks County, 552 Pa. 652, 717 A.2d 483 (1998). Therefore, the federal standard requires that all economically beneficial or productive uses of property be denied by the regulation. The Pennsylvania standard does not require that all uses be denied, but requires that the property owner be substantially deprived of the beneficial use of the property.

The Tahoe Sierra court correctly recognized that most regulatory takings cases should be resolved by balancing the public and private interests at stake, with three primary factors weighing in the balance: the economic impact of the regulation on the claimant, the extent to which the regulation has interfered with distinct investment-backed expectations, and the character of the governmental action. Tahoe Sierra at 6331, citing Penn Central Transportation Co. v. New York City, 438 U.S. 104, 124 (1978). However, there are two specific circumstances in which the United States Supreme Court has found a governmental regulation to constitute a “categorical” taking without performing a balancing test under Penn Central. See Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 426 (1982); Tahoe Sierra at 6332. The two circumstances in which a governmental regulation constitutes a categorical taking are when there is a physical invasion of the property by the government and where all economically beneficial or productive use of the land is taken by the regulation at issue. The Tahoe Sierra case did not address the balancing test, but merely whether the Tahoe Sierra regulation could be considered a denial of all of the economically beneficial or productive uses of the land in order to constitute a categorical taking without the need to perform the Penn Central balancing test. The Tahoe Sierra court erred when it stated that the First English court very carefully defined temporary regulatory takings as those regulatory takings which are ultimately invalidated by the courts. Tahoe Sierra at 6343. The United States Supreme Court in First English Evangelical Lutheran Church v. Los Angeles County, 107 S.Ct. 2378 (1987), did not define a temporary taking as one that requires the regulation at issue to be declared invalid. In First English, the California Court of Appeals held that damages for a taking could not be awarded unless and until a land owner challenged the validity of the regulation at issue, was successful in the challenge, and the government continued to impose the subject regulation. Our United States Supreme Court specifically held that the landowner could obtain damages for a taking without the necessity of challenging the validity of the regulation at issue. The Tahoe Sierra court found that a regulation which is temporary cannot amount to a taking. However, in First English, the ordinance at issue was noted to be an “interim ordinance.” 482 U.S. at 306, 319 and 327 n.6. An interim ordinance implies that it is not a permanent regulation, but is temporary in nature. Further, our United States Supreme Court specifically referenced the First English taking as a temporary taking, even though the ordinance at issue had not been declared as invalid. 482 U.S. at 318. The reference that a temporary taking is a regulatory taking which is ultimately invalidated by the courts, was a reference by the First English court to the case of Agins v. Tiburon, 24 Cal.3d 258, 157 Cal. Rptr. 372, 598 P.2d 25 (1979), aff’d on other grounds, 447 U.S. 255, 100 S.Ct. 2138, 65 L.Ed.2d 106 (1980). As previously indicated, the First English case involved an interim ordinance, which had not been invalidated, and which the property owner alleged to constitute a taking. The First English case involved an ordinance which temporarily prohibited the construction, reconstruction, placement, or enlargement or any building or structure within any portion of a particular flood protection area, which encompassed property belonging to the First English Evangelical Church. 482 U.S. at 327 n.6.

The Tahoe Sierra court was correct, however, in noting that the United States Supreme Court in First English did not determine whether the underlying facts of the First English case constituted a taking. The U.S. Supreme Court assumed that a taking had occurred. Whether, in fact, a taking had occurred was not the issue before the court.

A court may not dismiss preliminary objections to a petition for appointment of a board of view without first conducting an evidentiary hearing to determine whether a de facto taking took place. McGaffic v. Redevelopment Authority of City of New Castle, 120 Pa. Commw. 199, 548 A.2d 653 (1988). In determining whether a de facto taking has occurred, the court must first determine whether the entity charged with the de facto taking was clothed with the power of eminent domain. Id. There is no dispute that Marple Township is clothed with the power of eminent domain.

Secondly, the court must consider whether the entity has substantially deprived the owner of the use and enjoyment of his property. The burden is on the property owner to show exceptional circumstances which substantially deprive the owner of the use of the property and that the deprivation is a direct and necessary consequence of the actions of the township. Id. The court must balance the interests of the property owner against the need for planning agencies to maintain planning flexibility. There are no hard and fast rules in determining a de facto taking, each case must be examined on its own factual situation. Id. [It should be noted that the McGaffic decision has been limited relative to the appropriate scope of review of a trial court’s dismissal of preliminary objections filed by the alleged taking authority. The scope of review of a trial court’s dismissal of preliminary objections is limited to whether the trial court’s findings are supported by competent evidence in the record, whether the court abused its discretion, or whether the court committed an error of law. See Elser v. PennDOT, 651 A.2d 567 (Pa. Commw. 1994).]

However, an evidentiary hearing is not required in every instance prior to a trial court’s denial of preliminary objections to a petition for the appointment of a board of view. Evidence must be taken only if issues of fact are raised which are required to be determined prior to ruling on the question of whether a de facto taking has occurred. If the preliminary objections do not raise any such issues of fact, the trial court must simply examine the petition and sustain the preliminary objections if the averments of the petition are not sufficient to establish a de facto taking, or dismiss the preliminary objections if the averments do establish a de facto taking. See Millcreek Township v. N.E.A. Cross Co., 152 Pa. Commw. 576, 620 A.2d 558 (1993).

The township has admitted the basic factual allegations of the petition for the appointment of a board of view. The township admits that Mr. Nolen is the owner of the property. The township admits that Mr. Nolen prepared subdivision plans for each property and Mr. Nolen desires to proceed with the subdivision and development of the properties. Finally, the township admits that the moratorium ordinance prohibits Mr. Nolen from submitting subdivision plans to the township or from otherwise developing his properties. Therefore, this court, when it rendered its first opinion and order relative to the denial of the preliminary objections, found that a de facto taking has occurred since a very important property right, the right to develop, was affected by the township ordinance. While this court can certainly assume what burdens have been borne by Mr. Nolen as a result of the ordinance, such an assumption is probably inappropriate. Upon reconsideration, this court believes that an evidentiary hearing should be held. Mr. Nolen should prove the facts as to how the subject ordinance has affected his property, including the facts relative to any and all uses of the property alternative to development, during the moratorium.

ORDER

And now, to wit, June 8, 2001, it is hereby ordered and decreed as follows:

(1) The township’s motion to stay proceedings is denied. [The case relied upon by the township, Naylor v. Hallam Township, 717 A.2d 629 (Pa. Commw. 1998), appeal pending, does not address the issue of a taking. In the case at bar, assuming that the ordinance is valid, the property owner is alleging a taking.]

(2) The township’s motion to stay board of view proceedings is granted in part and denied in part. The board of view proceedings are stayed pending the outcome of an evidentiary hearing, as provided for in a separate order of this same date.

ORDER

And now, to wit, June 8, 2001, upon reconsidering this court’s opinion and order of June 29, 2000, it is hereby ordered and decreed as follows:

(1) The township’s preliminary objections are granted in part and denied in part.

(2) An evidentiary hearing shall be held on October 2, 2001, at 10 a.m. The plaintiff shall be required to prove the facts as to how the subject ordinance has affected his property, including the facts relative to any and all uses of the property alternative to development, during the moratorium.


author: SCHAEFFER, S.J.,

text:
    Brutto v. Elefante & Margolies P.C.

      C.P. of Berks County,
    no. 96-4484.

      John A. DiGiamberardino, for plaintiffs.

      Terry Parish, for defendant.
    May 21, 2001
   SCHAEFFER, S.J.,

Before the court is the appeal of Paolo Brutto and Adriana Brutto from an order of this court dated March 6, 2001, denying their motion for summary judgment and from the summary judgment entered in this matter in favor of Elefante & Margolies P.C., defendant, and against the Bruttos.

The undisputed facts are that the Bruttos went to Charles M. Elefante, Esquire, who practiced law as Charles M. Elefante P.C. and sought to retain Elefante P.C. as their attorney in adopting a child in the Confederation of Independent States, now the Russian Republic.

Mr. Elefante gave the Bruttos a form of agreement under which Elefante P.C. would represent them to this end.

The form of agreement advised the Bruttos that they should read it, seek independent legal advice about it, if they so desired, and if they still wished Elefante P.C. to represent them, to sign it and return it to Elefante P.C. with a $7,000 retainer fee.

The Bruttos signed the form of agreement and returned it to Mr. Elefante with a check dated June 15, 1995 (exhibit D; attached to the defendant’s motion for summary judgment), payable to Elefante PC., for the retainer fee. Mr. Elefante kept the check but returned the form of agreement to the Bruttos with instructions that they should initial each page. Mr. Elefante deposited the check for the retainer fee into the Elefante P.C. checking account on June 23, 1995.

After the Bruttos received the form of agreement back, they, by telephone on July 10, 1995, requested that the defendant, Elefante & Margolies P.C., return the retainer to them. On August 2, 1996, they filed this suit against Elefante & Margolies P.C. seeking a refund of the retainer fee.

No one ever signed the form of agreement on behalf of Elefante P.C.

The Brattos assert that the form of agreement was an invitation for them to make an offer, that they did make an offer by signing the form and returning it to Mr. Elefante with a check for the retainer, and that they revoked the offer before Elefante P.C. accepted it. We disagree.

We find that when Mr. Elefante gave the form of agreement to the Brattos, he made an offer to them, and that by signing the form and returning it to Elefante P.C. with the retainer fee, the Brattos accepted the offer.

The form of agreement, on page 12, in pertinent part, reads as follows:

“It is expressly understood and agreed, by the undersigned, that the representations, restrictions, conditions, promises and obligations contained in this agreement, constitute a legally binding contract. The client(s) expressly agree that their signatures on/in this agreement indicate that they have been informed of their right to have this agreement independently reviewed by independent counsel of their own choosing, and that they have been offered an opportunity to do so, prior to their signing of this document. The client(s) expressly agree and understand, that by signing this agreement, they express their willing and unqualified intent to enter into a binding contract.” (emphasis in original)

The agreement also provided, on page 9, as follows:

“Charles M. Elefante P.C. agrees that the initial retainer fee of $7,000 shall not be deposited until three days after receipt thereof... if... the undersigned prospective client(s) decide to terminate Charles M. Elefante P.C. as their attorney, and so notify Charles M. Elefante P.C. by phone, followed by in writing thereafter, within seven days of Charles M. Elefante P.C.’s receipt of the retainer, then the retainer shall be returned without charge (in its original form), in full, within seven days.” (emphasis in original)

Whether two parties enter into a binding contract does not depend on a document signed by both parties. Rather it depends on whether or not they have each agreed to enter into a contract, whether there has been a meeting of the minds. Shovel Transfer & Storage Inc. v. PLCB, 559 Pa. 56, 63, 739 A.2d 133, 136 (1999).

A form of agreement presented by one person to another can be an offer even though it is not signed by the offeror. If the offeree accepts the form of agreement as the agreement between them, then a contract is formed. The offeree can accept in writing or otherwise.

In the case at bar, Elefante P.C. gave the form of agreement to the Bruttos, with instructions to read it, seek outside professional help, if they so desired, in interpreting the document, and if they still wanted Elefante P.C. to represent them, to sign it and return it to Elefante P.C. with their check for the $7,000 initial retainer fee.

The Bruttos did so.

We find Elefante P.C. made the Bruttos an offer when Mr. Elefante gave them the form of agreement, even though Elefante P.C., had not signed the document. The Bruttos accepted the form of agreement as the agreement between the parties, signed it, and returned it to Elefante P.C. with the retainer check.

That is sufficient to make a contract. It was immaterial that Elefante P.C. at no time signed the form of agreement.

We conclude, as a matter of law, that there was a contract between the parties because the form of agreement was specific as to the Bruttos intention. It provided that the Bruttos “expressly agree and understand, that by signing this agreement, they express their willing and unqualified intent to enter into a binding contract.” Page 12 of agreement. If the form of agreement was the offer, as we have found it was, the Bruttos accepted that offer and entered into a contract when they signed the form of agreement with the intention to “enter into a binding contract” and then returned it with the retainer check.

The conclusion is supported by the fact that the agreement, as signed by the Bruttos, provided for a cancellation period to begin (emphasis added) when Elefante PC., received the signed agreement with their check for the retainer.

If the Bruttos’ signatures on the form of agreement were an offer, not an acceptance, the cancellation provisions as written were meaningless. The Bruttos could have revoked their offer at any time before acceptance, without a cancellation provision.

Only if the Bruttos’ actions were an acceptance, not an offer, do the cancellation provisions become meaningful. Then a contract would have come into existence when the Bruttos signed the agreement and returned it to Elefante P.C., with the check for the retainer, and the cancellation provisions would have been meaningful and important.

An agreement should be construed whenever possible to give meaning to all its provisions, not just some of them. In considering the pertinent clauses of the contract, we are governed by the rule of universal application that in construing a contract each and every part of it must be taken into consideration and given effect if possible, and that the intention of the parties must be ascertained from the entire instrument. Acchione v. City of Philadelphia, 394 Pa. 622, 149 A.2d 125,127 (1959). If one construction gives meaning to all the provisions of an agreement and another construction makes one or more of them meaningless and unnecessary, the construction giving meaning to all provisions is to be preferred.

For these reasons we found a contract existed between ¡ the parties and that since the Bruttos 'did not cancel it within the time specified, they are not entitled to a refund of the retainer fee.

We also found that the Bruttos did not sue the right party defendant. Elefante & Margolies P.C. did not assume the debts or liabilities of Charles M. Elefante, Esquire, or Elefante P.C. Therefore, whatever the value of the Bruttos’ claim against Mr. Elefante or Elefante PC., they have no claim against the defendant, Elefante & Margolies P.C. A simple transfer of the assets of a business or professional corporation does not, without more, obligate the purchaser to pay the debts of the transferor.

The agreement of sale between Charles M. Elefante, Esquire, and Elefante P.C., and Leslie A. Margolies, dated July 11, 1995, provided that Leslie A. Margolies would assume the liabilities of the successor corporation, Elefante & Margolies P.C., but not the liabilities of Charles M. Elefante, Esquire, and/or Elefante P.C.

The Bruttos filed a timely notice of appeal to the Superior Court of Pennsylvania. In their statement of matters complained of on appeal, they raise four issues:

“(1) Whether the court erred as a matter of law and/or abused its discretion by finding that an enforceable contract existed between the plaintiffs and Charles M. Elefante P.C.?
“(2) Whether the court erred as a matter of law and/or abused its discretion by finding that the defendant acquired rights of Charles M. Elefante P.C. to retain the plaintiffs’ deposit?
“(3) Whether the court erred as a matter of law and/or abused its discretion by failing to find that the defendant assumed the obligation of Charles M. Elefante P.C. under the theory of successor liability?
“(4) Whether the court erred as a matter of law and/or abused its discretion by finding that the defendant was entitled to retain the plaintiffs’ deposit under a theory of quantum meruit?”

The standard of review in cases of summary judgment is well settled. “The appellate court will only reverse the trial court’s entry of summary judgment where there was an abuse of discretion or an error of law.” Electronic Laboratory Supply v. Cullen, 712 A.2d 304, 307 (Pa. Super. 1998). (citation .omitted) “Summary judgment is proper when the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits demonstrate that there exists no genuine issue of material fact and the moving party is entitled to judgment as a matter of law.” Id.; Pa.R.C.P. 1035.2. However, plaintiffs cannot avoid summary judgment where they have no evidence to support an issue on which they bear the burden of proof. Regardless of plaintiffs’ allegations in the pleadings, plaintiffs, when faced with a motion for summary judgment, must show that the evidence they can then produce, with all inferences therefrom drawn in their favor, would permit the finder of fact to render a verdict in their favor. If, under Pa.R.C.P. 1035.2(2), the record contains insufficient evidence of facts to make out aprima facie cause of action or defense, there is no issue to be submitted to a jury.

For the reasons already given, we reject the first, second and third matters complained of on appeal.

Finally, the Bruttos argue that the court erred as a matter of law and/or abused its discretion by failing, to find that Elefante & Margolies P.C. had benefited and that it was liable to the Bruttos on a theory of quantum meruit, due to the following facts:

(a) The agreement provided to plaintiffs was not signed by Charles M. Elefante at any time;

(b) The agreement was returned to plaintiffs by defendant for initials as required by defendant’s office policy;

(c) The plaintiffs notified defendant of their intention to revoke any offer that may have been made prior to defendant’s departure to Russia to search for adoptable children; and

(d) The plaintiffs never returned the executed agreement to defendant with the initials required by the defendant’s office policy.

As we have found, as a matter of law, that (1) a valid contract existed between the parties and (2) the plaintiffs failed to produce evidence of facts to make out a prima facie case for successor liability, appellants’ fourth issue lacks merit as well.

For the aforementioned reasons, we respectfully request that the Superior Court affirm the judgment entered in this matter on March 7, 2001.

      . The Brattos did not sue Charles M. Elefante, Esquire, or Charles M. Elefante P.C.

      . The Supreme Court of Pennsylvania has held that “[A] non-moving party must adduce sufficient evidence on an issue essential to his case and on which he bears the burden of proof such that a jury could return a verdict in his favor. Failure to adduce this evidence establishes that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law.” Ertel v. Patriot-News Co., 544 Pa. 93, 101-102, 674 A.2d 1038, 1042 (1996).

      . Tenaglia v. Procter & Gamble Inc., 737 A.2d 306, 307 (Pa. Super. 1999).