text:
    Leonard v. Reed

      C.P. of Northampton County,
    no. C0048CV2001 6574.

      Richard M. Wiener, for plaintiffs.

      Frank J. Procyk, for defendant.
    January 15, 2003
   PANELLA, J.,

I. STATEMENT OF FACTS AND PROCEDURAL HISTORY

On August 21, 2001, plaintiffs, Joseph M. Leonard and Lois Leonard, individually and as husband and wife, filed a complaint seeking to recover damages for injulies sustained as a result of an automobile accident which occurred on August 28, 1999.

At approximately 5:50 a.m. on August 28,1999, plaintiff, Joseph M. Leonard, was traveling westbound in his 1996 Chevrolet Monte Carlo on Interstate 78 in the Municipality of Perry ville, County of Hunterdon, State of New Jersey. At the same time and place, defendant, Heather M. Reed, was proceeding westbound on Interstate 78 in her 1998 Honda Civic, behind plaintiff’s vehicle. Defendant fell asleep at the wheel and struck the plaintiff’s vehicle in the rear forcing plaintiff’s vehicle off the road where it struck a guardrail at the edge of the right-hand shoulder, spun 180 degrees across three westbound lanes and ultimately came to rest on the grass median.

According to police reports, defendant failed a field sobriety test, registering .12 percent on a Breathalyzer test within two hours of the accident. Defendant was charged with and pled guilty to careless driving and operating a vehicle under the influence of alcohol in the State of New Jersey.

At the time of the accident, plaintiffs were residents of New York and maintained an automobile insurance policy with Liberty Mutual Insurance Company. Plaintiffs had aggregate PIP first-party benefits available up to a limit of $100,000 and loss of income benefits in the amount of $2,000.

The pleadings are closed and discovery is now complete. Defendant moved for partial summary judgment pursuant to Pa.R.C.P. 1035.2 on November 4,2002. The matter was placed on the December 10, 2002 argument list. Counsel for both parties presented oral argument to the court and submitted their memoranda of law in support of, and in opposition to, the motion. The matter is now ready for disposition.

II. STANDARD OF REVIEW

The standard of review for summary judgment is well settled. Pennsylvania law provides that summary judgment may be granted only in those cases in which the record clearly shows that no genuine issues of material fact exist and that the moving party is entitled to judgment as a matter of law. Capek v. Devito, 564 Pa. 267, 767 A.2d 1047, 1048 n.1 (2001). The moving party has the burden of proving that no genuine issues of material fact exist. Rush v. Philadelphia Newspapers Inc., 732 A.2d 648, 650 (Pa. Super. 1999). In determining whether to grant summary judgment this court must view the record in the light most favorable to the non-moving party and must resolve all doubts as to the existence of a genuine issue of material fact against the moving party. Potter v. Herman, 762 A.2d 1116, 1117-18 (Pa. Super. 2000). Thus, summary judgment is proper only when the uncontroverted allegations in the pleadings, depositions, answers to interrogatories, admissions of record, and submitted affidavits demonstrate that no genuine issue of material fact exists, and that the moving party is entitled to judgment as a matter of law. Id. at 1117. In sum, only if the facts are so clear that reasonable minds cannot differ, may we properly enter summary judgment. Basile v. H & R Block Inc., 563 Pa. 359, 761 A.2d 1115, 1118 (2000).

III. DISCUSSION

1. Affirmative Defense of New Jersey’s Verbal Threshold Statute

Defendant’s motion for partial summary judgment raises a defense to plaintiffs’ claims for noneconomic damages based upon the New Jersey Verbal Threshold/ Deemer Statute, N.J.S.A. 39:6A-8 and N.J.S.A. 17:28-1.4, which provides for a lawsuit threshold. Specifically, the New Jersey Deemer Statute precludes recovery of noneconomic losses in a lawsuit arising out of a motor vehicle accident, unless the person bringing the lawsuit has sustained a serious injury involving dismemberment, significant disfigurement, significant scarring, displaced fractures or a permanent injury within a reasonable degree of medical probability, other than scarring or disfigurement. See N.J.S.A. 39:6A-8. In their brief, plaintiffs contend that defendant has waived as an affirmative defense, the application of the Verbal Threshold/Deemer Statute under New Jersey law by failing to plead it as new matter in the answer filed to plaintiffs’ complaint.

Pa.R.C.P. 1030 requires that all affirmative defenses be pled under the heading new matter. The language of the rule is clear and cannot be ignored. See Evans v. D’Iorio, 360 Pa. Super. 45, 519 A.2d 983 (1987); Santana v. Wentzien, 26 D.&C.4th 22 (1995). A claim that a plaintiff’s recovery is barred or abolished by a statute is an affirmative defense which falls under the purview of the catchall provision of Pa.R.C.P. 1030. See Roberts v. Philadelphia, 3 D.&C.3d 763, 765 (1978); Santana v . Wentzien, 26 D.&C.4th 22, 26 (1995). “Unlike counterclaims, affirmative defenses are compulsory and therefore must be timely pleaded or they are forever lost.” Id. (emphasis in original); see also, Bender’s Floor Covering Co. v. Gardner, 387 Pa. Super. 531, 536, 564 A.2d 518, 521 (1989). “The failure to raise an ‘affirmative defense’... will result in a waiver of the defense.” Nasser v. Empire Sanitary Landfill Inc., 433 Pa. Super. 391, 396, 640 A.2d 1315, 1317 (1994).

In the instant matter, defendant filed an answer with new matter on or about October 22, 2001. Contained in the new matter were the following defenses:

“(12) Plaintiffs have not stated a cause of action upon which they may base a recovery....
“(21) The plaintiff’s complaint fails to state a valid cause of action against the defendant for noneconomic losses purportedly arising out of the subject motor vehicle accident.”

Based upon our review of paragraphs 12 and 21 of defendant’s new matter, defendant has properly raised as an affirmative defense the inability for plaintiffs to recovery any noneconomic losses as damages in this case, and accordingly, such defense has not been waived. We must now interpret Pennsylvania Conflicts of Law rules to determine whether to apply the New Jersey Deemer Statute to plaintiffs’ claim for damages arising out of the motor vehicle accident that occurred on August 28,1999.

2. Applicability of New Jersey Verbal Threshold/ Deemer Statute

It is well-settled that if a Pennsylvania court has jurisdiction over a dispute, the court will apply Pennsylvania conflicts of law principles to decide which state’s law governs the matter. Miller v. Gay, 323 Pa. Super. 466, 470 A.2d 1353 (1984). In Griffith v. United Air Lines Inc., 416 Pa. 1, 203 A.2d 796 (1964), our Supreme Court abandoned the lex loci delicti rule that had been employed in choice of law questions and adopted the “significant relationship” theory. As such, under principles of comity, the rights and liabilities of the parties with respect to a tort action are determined by the law of the state which has the most significant relationship to the occurrence and the parties. Id.; see also, Restatement (Second) of Conflicts of Laws §§145, 146; Giovanetti v. Johns-Manville Corp., 372 Pa. Super. 431, 539 A.2d 871 (1988); Miller v. Gay, supra, 323 Pa. Super. 466, 470 A.2d 1353 (1983). We must evaluate the following contacts, qualitatively rather than quantatively to determine which state law applies to the instant matter, Pennsylvania or New Jersey: (1) the place where the injury occurred; (2) the place where the conduct causing the injury occurred; (3) the domicile, residence, nationality, place of incorporation and place of business of the parties; and (4) the place where the relationship between the parties is centered. See Cipolla v. Shaposka, 439 Pa. 563, 267 A.2d 854 (1970); Laconis v. Burlington County Bridge Commission, 400 Pa. Super. 483, 491-92, 583 A.2d 1218, 1223 (1990). Furthermore, under the principles of section 146 of the Restatement (Second) Conflicts of Laws:

“In an action for a personal injury, the local law of the state where the injury occurred determines the rights and liabilities of the parties, unless, with respect to the particular issue, some other state has a more significant relationship under the principles stated in section 6 to the occurrence and the parties, in which event the local law of the other state will be applied.”

Applying these principles to the present case, New Jersey clearly has the most significant relationship to these parties and this tortious occurrence. The place of injury and tortious conduct occurred on Interstate 78 in the Municipality of Perry ville, County of Hunterdon, in the State of New Jersey. Additionally, defendant, Heather M. Reed, was charged with and pled guilty to careless driving and driving while under the influence of alcohol in the State of New Jersey. The plaintiffs are domiciled in New York and were traveling through New Jersey at the time of the accident. The sole connection with Pennsylvania in the instant case is that defendant resides here. These contacts both qualitatively and quantatively compel application of New Jersey law. We find no significant relationship to Pennsylvania that would call for application of our law rather than that of New Jersey.

3. Genuine Issues of Material Fact Exist to Preclude Partial Summary Judgment

Partial summary judgment is not appropriate because a genuine issue of material fact exists on the record. New Jersey’s “verbal threshold” applies to insurance policies of out-of-state residents using their automobiles in New Jersey if their insurers are authorized to do business in New Jersey. Whitaker v. DeVilla, 147 N.J. 341, 687 A.2d 738 (1997). The “Deemer Statute” limits the rights of nonresidents to sue for noneconomic loss by automatically assigning a “verbal threshold” tort option to nonresidents involved in accidents in New Jersey. Taylor v. Rorke, 279 N.J. Super. 63, 652 A.2d 207 (A.D. 1995). The rationale for this verbal threshold is New Jersey’s legitimate interest in its insurance scheme. Id. This policy does not effectively cut off nonresidents’ rights to compensation. Id. The relevant language of the New Jersey Verbal Threshold/Deemer Statute, N.J.S.A. 39:6A-8 provides:

“Every owner, registrant, operator or occupant of an automobile... is hereby exempted from tort liability for noneconomic loss ... as a result of bodily injury, arising out of the ownership, operation, maintenance or use of such automobile in this state, unless that person has significant scarring; displaced fractures; loss of a fetus; or a permanent injury within a reasonable degree of medical probability, other than scarring or disfigurement.”

The Deemer Statute further provides that “an injury shall be considered permanent when the body part or organ, or both, has not healed to function normally and will not heal to function normally with further medical treatment.” See N.J.S.A. 39:6A-8(a).

In the present case, a genuine issue of material fact exists as to whether the injuries sustained by plaintiff, Joseph M. Leonard are “permanent” as defined under the statute. If Mr. Leonard’s injuries are “permanent within a reasonable degree of medical probability,” he is entitled to recovery of noneconomic damages, including punitive damages, pursuant to the New Jersey Verbal Threshold/Deemer Statute. The question of whether plaintiff’s injuries are permanent is for the jury to decide. The jury must hear testimony from plaintiff’s and defendant’s physicians regarding Mr. Leonard’s medical diagnosis, treatment and prognosis. It is then for the jury to decide whom they believe and to weigh the facts and evidence accordingly. While N.J.S.A. 39:6A-8(a) does articulate a test for determining the permanency of an injury, we believe the jury should determine, based upon the evidence presented, whether Mr. Leonard’s injuries are permanent. We are not in a position to deprive plaintiffs of the opportunity to place this issue before the jury. Reasonable minds could differ as to the ultimate outcome of this issue and therefore, it would .be improper to grant defendant’s motion for partial summary judgment.

Wherefore, we enter the following:

ORDER

And now, January 15, 2003, upon consideration of defendant’s, Heather M. Reed, motion for partial summary judgment, it is hereby ordered and decreed that said motion is denied. This court is to apply New Jersey law, specifically the New Jersey Verbal Threshold/Deemer Statute, N.J.S.A. 39:6A-8 and N.J.S.A. 17:28-1.4, at the time of trial. The issue of whether plaintiff, Joseph M. Leonard sustained a “permanent injury” is a question which must be decided by the jury.


source: Caselaw Access Project

author: HERRON, J.,

license: Public Domain

text:
    Downes v. Morgan Stanley Dean Witter

      Stephen J. Springer, for plaintiff.

      Alexander Bono, for defendants.
    September 23, 2002
   HERRON, J.,

Presently before the court is the petition for a temporary restraining order and to compel arbitration and to stay all proceedings, filed by defendants Morgan Stanley Dean Witter and Scott Martin. The underlying proceeding at issue involves the complaint of plaintiff Marguerita Downes for violations of Pennsylvania’s UTPCPL, fraud and negligence.

The complaint alleges that plaintiff invested $200,000 with defendants and ended up after about two years with only $89.29 due to defendants’ unauthorized margin trading with her funds. Defendants seek, under Pa.R.C.P. 1531, the Pennsylvania Uniform Arbitration Act, 42 Pa.C.S. §7304(a) and (d), and the Federal Arbitration Act, 9 U.S.C. §1 et seq., to enforce a purported arbitration agreement between them and plaintiff. Plaintiff argues that she never agreed to arbitrate because the agreement to arbitrate only binds clients of Morgan Stanley who, unlike her, opted for margin trading.

After considering the briefs, documents and arguments presented, this court denies defendants’ petition for the reasons set forth below.

FINDINGS OF FACT

I. The Parties

(1) Plaintiff Marguerita Downes is a realtor and was, at all relevant times, a client of Morgan Stanley. N.T., May 28, 2002, p. 68; May 6, 2002, p. 75.

(2) Defendant Morgan Stanley is an investment, financial services and stock brokerage firm.

(3) Defendant Martin was, at all relevant times, a financial advisor in the employment of Morgan Stanley. N.T., May 6, p. 5.

II. The Purported Agreements Between the Parties

A. The Active Asset Account Application

(4) The active asset account application (AAA agreement) is a two-page application signed by Downes, on the first page, on March 25, 1999. MSDW exhibit 4.

(5) Section 1 of the AAA agreement shows a number of boxes to check off corresponding to the type of account chosen. The box in front of “individual” is checked off. Id.

(6) Section 2 shows the social security number of Downes. Id.

(7) Sections 3 and 4 show a number of privileges and services which the applicant may adopt by checking off a box in front of each of the options. Id.

(8) Section 3 is checked off to indicate the acceptance of: (1) a year-end summary of account activity; (2) active assets money trust; (3) check writing privileges; and, (4) pre-printed deposit slips. Other services such as credit card and direct deposit are declined, as indicated by an unchecked box in front of those options. Id.

(9) Section 4, sub-section E provides two boxes to check off. On separate lines, the applicant may check off either: “Yes, I am requesting margin privileges,” or: “No, I do not wish margin privileges.” Id.

(10) There is a check mark in the box which requests margin privileges. Id.

(11) Immediately below those statements referring to the margin privileges is the following statement:

“The following applies only to clients who request and are approved for margin privileges:
“I authorize Morgan Stanley Dean Witter to lend to itself or to others, either separately or in common, any holding in my account that Morgan Stanley Dean Witter may be carrying for me on margin. I understand that I may borrow against my account at the rates and terms explained in the client account agreement. I UNDERSTAND THAT THIS ACCOUNT IS GOVERNED BY THE PRE-DISPUTE ARBITRATION CLAUSE APPEARING IN SECTION El OF THE AGREEMENT.” Id. (emphasis and capitalization in original)

(12) Thus, according to the AAA agreement, the pre-dispute arbitration clause applies to margin accounts only. Id.

(13) Immediately below the above-cited paragraph, at the bottom of page 1 of the application, are Downes’ signature and date. Id.

(14) Downes stipulated to the authenticity of that signature. N.T., May 6, p. 6.

(15) The second page of the application shows sections 5 through 8. Only section 5 is filled out with Downes’ address and choices for checks (stubs, quantity, number showing on first check). Sections 6,7 and 8 are left blank. There is no signature line at the bottom of page 2. MSDW, exhibit 4.

B. The Client Account Agreement and the Arbitration Agreement

(16) Morgan Stanley sends a welcome package of documents to each customer soon after a new account is open. N.T., May 6, p. 12; N.T., May 28, p. 16 (testimony of Patricia Kloc, operations manager, responsible for new accounts, with Morgan Stanley at all relevant times).

(17) Morgan Stanley includes in the welcome package a cover letter and a client account agreement (CAA). Id.; MSDW, exhibit 2.

(18) The CAA that was effective when Downes opened an account with Morgan Stanley begins on the first page with an introductory paragraph, which states that section III applies “to all accounts requesting margin privileges.” MSDW, exhibit 3; N.T., May 6, p. 9.

(19) Section III is entitled “margin privileges.” At the very beginning of section III, it is stated that the section “only applies to those clients eligible and approved for margin privileges.” MSDW, exhibit 3, section III.

(20) Section III is the only section in the CAA which discusses arbitration. MSDW, exhibit 3.

(21) Thus, according to the CAA, the agreement to arbitrate applies solely to clients who request margin privileges. MSDW, exhibit 3; see also, N.T., May 6, p. 30 (testimony of Martin).

(22) Section III begins with a paragraph warning that “[mjargin trading is not for everyone.” MSDW, exhibit 3, section III.

(23) Section III contains a sub-section entitled “arbitration,” which lists disclosures related to arbitration as required by industry regulations. Id.

(24) Section III also contains a sub-section entitled “arbitration of controversies,” which contains the arbitration clause at issue in this case and referred to in the AAA agreement. Id.; MSDW, exhibit 4.

(25) Downes testified that she never received the CAA either from Martin or directly from Morgan Stanley through the mail. N.T., May 6, p. 78; N.T., May 28, p. 58.

(26) There is no evidence in the record that Downes ever received the CAA.

C. The Margin Disclosure Statement

(27) The margin disclosure statement is a one-page document which is only included in the welcome package when clients have requested margin account privileges. N.T., May 28, p. 20.

(28) The margin disclosure statement produced by defendants was a copy of a 2001 document and not what might have been supplied to a client who opened an account when Downes did in March of 1999. MSDW, exhibit 2.

(29) The margin disclosure statement briefly explains margin trading and mostly highlights the risks involved in margin trading. Id.

(30) Martin never discussed this statement with Downes or any equivalent statement existent at the time Downes opened her account nor did he discuss with her any of the risks of margin trading as covered by the statement. N.T., May 28, pp. 76-77.

(31) Patricia Kloc, Morgan Stanley’s operations manager, testified that when a customer did not request margin privileges, Morgan Stanley did not send the customer a margin disclosure statement. N.T., May 28, p. 20.

(32) Downes testified that she never received a margin disclosure statement. N.T., May 28, pp. 58-59.

(33) There is no evidence in the record that Downes ever received the margin disclosure statement.

III. The Relationship Between the Parties

A. The Onset of the Relationship

(34) Downes’ first contact with Martin was a telephone conversation she initiated on being referred to Martin by a friend of hers and former client of Martin’s. N.T., May 6, p. 5; N.T., May 28, pp. 49-50.

(35) During that conversation, Downes supplied Martin with information allowing him to open a new account for her and conduct one initial stock trade. Id.

(36) Prior to that time, Downes had maintained a stock brokerage account with Merrill Lynch. N.T., May 6, p. 6; N.T., May 28, pp. 51, 55.

(37) Martin and Downes met twice subsequent to their phone conversation to transfer her funds from Merrill Lynch and set up an active asset account, which is Morgan Stanley protocol when a new account is opened. N.T., May 6, pp. 7, 75-76.

(38) During their second meeting, Downes and Martin had a discussion regarding her new account and Downes signed the active asset account application or AAA agreement. Id.; N.T., May 28, pp. 51-52; MSDW, exhibit 4.

(39) During the meeting, Downes and Martin discussed privileges flowing from the account such as account writing privileges, pre-printed deposit slips, a debit card, and a credit card. N.T., May 6, pp. 7-8.

(40) Downes and Martin also discussed her investment philosophy and what she was looking for in her new relationship with Morgan Stanley. N.T., May 6, p. 77; N.T., May 28, pp. 51-52.

(41) Downes testified that she told Martin that she was a recently divorced woman, whose husband always took care of finances for her, that she was investing all the money she had, and thus was looking for conservative, low-risk investment. N.T., May 6, pp. 47,77; N.T., May 28, pp. 51-52.

(42) Downes also purportedly told Martin that she needed someone she could trust and “he assured [her] that he was a good candidate for the job.” N.T., May 28, p. 52.

(43) Downes testified that she had never traded on margin before opening an account with Morgan Stanley nor had she understood the term margin trading. N.T., May 28, p. 55.

(44) Martin conceded that Downes related to him that she did not borrow money nor wanted to put her nest egg at risk. N.T., May 6, p. 47.

(45) Martin testified that margin trading is not “low risk.” N.T., May 28, p. 77.

(46) Downes and Martin had conflicting testimony as to whether they had any discussion of margin trading privileges during the meeting. N.T., May 28, pp. 55-57, 72-74; N.T., May 6, p. 46.

(47) Martin claims that he explained margin privileges and margin trading to Downes before she signed the AAA agreement. N.T., May 6, pp. 15-16; N.T., May 28, p. 74.

(48) Downes claims that Martin never discussed margin trading or privileges with her at the time she signed the AAA agreement. N.T., May 28, p. 56.

(49) Although Martin conceded that Downes related to him her wishes not to borrow money nor put her nest egg at risk, Martin claimed that Downes considered margin privileges for overdraft protection and as leverage for additional stock purchases. N.T., May 6, pp. 7-8; N.T., May 28, pp. 72-74.

(50) Downes testified that the box for margin privileges on the AAA agreement was not checked off either by her or Martin at the time she signed on the agreement. N.T., May 28, pp. 22-23, 55-57.

(51) Martin testified that Downes signed the AAA agreement at the meeting, but did not specifically refute her testimony that the pertinent box for margin privileges was not filled in at the time Downes signed the AAA agreement. N.T., May 6, pp. 6-7,15-16; N.T., May 28, pp. 72-74.

(52) Downes did not obtain a copy of the AAA agreement on the day she signed it. N.T., May 28, p. 58.

(53) Martin did not discuss the subject of arbitration with Downes at any point. N.T., May 6, pp. 31-32, 34.

(54) Martin testified that Downes would not be bound by arbitration if she did not request margin privileges. N.T., May 6, p. 30.

B. The Subsequent Margin Trading in Downes’ Account

(55) Morgan Stanley sends monthly account statements to their clients. N.T., May 6, p. 17.

(56) Margin trading was first reflected in the account statements of Downes in July 2000, more than 15 months after she opened her account in March of 1999. N.T., May 6, pp. 16-17, 36.

(57) The account statement for July 2000 reflected a margin loan of $94,390.14 and margin interest charges of $310.44. MSDW, exhibit 6.

(58) Downes noted question marks on her statement as well as some calculations apparently aimed at understanding the impact of the margin loan on the total value of her assets. Plaintiff’s exhibit 3(D); N.T., May 28, pp. 59-60.

(59) Downes testified that she sought advice from her neighbor, who was a retired chief financial officer, to understand what the margin entries meant. N.T., May 28, p. 62.

(60) Downes further testified that she then contacted Martin to discuss the margin loan and margin interest entries on her statement. N.T., May 28, pp. 61-62.

(61) Martin then apparently asked her to fax over the statement to him. Id.

(62) The July statement reflects Downes’ handwritten fax number for Martin, which begins with the same area code and prefix as Martin’s printed phone number at the top of the first page of that statement. Plaintiff’s exhibit 3(D).

(63) Downes testified that she then had a phone conversation with Martin about the statement after he received it. N.T., May 28, p. 62.

(64) Purportedly, Martin was shocked that she knew what margin meant and said: “Oh, you know what margin interest is?” Id.

(65) Additionally, he purportedly told her that the margin interest on her statement was a “computer glitch” that would be corrected. N.T., May 28, p. 63.

(66) It was not clear from Martin’s testimony during the first hearing, on May 6,2002, whether he recalls having any such conversation with Downes, or whether he merely does not recall the terms of that conversation. N.T., May 6, pp. 36-37.

(67) During the second hearing of May 28, 2002, Martin testified that he remembered her calling him regarding her July statement but that he never told her “Oh, you know what margin interest is?” because he would “never say that, talk like that, to a client.” N.T., May 28, p. 77.

(68) The August 2000 statement again reflected margin trading and the margin interest was higher than in the July account statement. MSDW, exhibit 6.

(69) Downes contacted Martin to discuss it and he stopped by to go over the statement with her. N.T., May 28, pp. 64-65.

(70) Downes testified that, again, Martin told her that any reflection on her statements of margin activity was a mistake, “a computer glitch,” then added that he also had mistakenly mixed her funds with those of someone else, and that he would correct the error. N.T., May 28, p. 66.

(71) Downes scribbled down on her August statement some notes of this discussion. N.T., May 28, p. 65.

(72) Specifically, the August statement reflects Downes’ noting in her handwriting: “next month look for no margin,” just as Martin purportedly told her. Id.; plaintiff’s exhibit 3(E).

(73) The August statement also shows Downes had written “incorrect” next to the margin interest entry. Plaintiff’s exhibit 3(E).

(74) Martin acknowledges meeting with Downes over her August statement but testified “not for that reason” when asked if he went to meet with Downes because “there was a second month in which there was a margin interest loan.” N.T., May 6, p. 37.

(75) Instead, Martin testified, they met roughly on a monthly basis “for a while” to go through her statements. N.T., May 6, p. 37.

(76) At the first hearing, on May 6, Martin testified that he does not remember specifically what was discussed. He does not remember, for example, whether he told Downes that the margin interest was incorrect. Then, on May 28, Martin testified that he never conceded to Downes that he had made mistakes regarding her account. N.T., May 6, p. 39; N.T., May 28, pp. 79-80.

(77) Martin, nonetheless, testified that at the meeting with Downes relating to the August statement, “we probably spoke about having less margin,” but he remembers specifically that he never told her that “you are not going to have any margin.” N.T., May 6, pp. 39-40.

(78) The margin trading continued through April 2001. N.T., May 28, p. 18.

(79) The dollar amount for “margin loan” never reached its August 2000 high, but rather went down then increased again in March and April 2001. MSDW, exhibit 6.

IV. The Court’s Findings of Fact As To the Conflicting Testimony

(80) The court finds Downes’ testimony credible. The court believes her testimony as to the matters related in paragraphs 38-39 above with respect to the meeting with Martin during which she asked for secure and conservative investments. See this opinion, ¶¶41-45, 49.

(81) Downes signed the AAA agreement without checking off the box to request margin privileges and, at some point after the execution of the agreement, the box for margin privileges was checked off by someone other than Downes and not in her presence or according to her instructions. Id., ¶¶46-51, 56.

(82) Downes’ testimony as to the contacts and discussions with Martin when she received her July and August statements reflecting margin activity is credible and serves to confirm and corroborate the fact that she had never opted for margin privileges. Id., ¶¶60-79.

DISCUSSION

I. Legal Standards

A. Standards for a Preliminary Injunction

To be entitled to a preliminary injunction, as governed by Pa.R.C.P. 1531, a petitioner must satisfy a four-part test:

(1) The petitioner has a clear right to relief;

(2) The preliminary injunction is necessary to prevent immediate and irreparable harm that cannot be compensated by monetary damages;

(3) A greater injury will result by refusing to issue the injunction; and

(4) The injunction will restore the parties to the status quo as it existed prior to the wrongful conduct. See Greco v. Hazleton City Authority, 721 A.2d 399, 401 n.5 (Pa. Commw. 1998); Valley Forge Historical Society v. Washington Memorial Chapel, 493 Pa. 491, 500, 426 A.2d 1123, 1128 (1981). In addition, before any injunction becomes effective, a petitioner is required to file a bond or deposit a fixed amount of legal tender with the prothonotary. Pa.R.C.P. 1531(b). Finally, requisites of apreliminary injunction are cumulative; thus, if one element is lacking, relief may not be granted. Leonard v. Thornburgh, 75 Pa. Commw. 553, 463 A.2d 77 (1983).

B. Standards for Enforcing Arbitration Agreements

Statutory law mandates that courts stay any proceedings involving issues allegedly subject to arbitration and proceed summarily to determine the existence and validity of an agreement to arbitrate. 42 Pa.C.S. §§7304(a) and (d); 9 U.S.C. §3. The threshold issue of the validity of the agreement to arbitrate is “a matter of contract and, as such, it is for the court to determine whether an express agreement between the parties to arbitrate exists.” Smith v. Cumberland Group Ltd., 455 Pa. Super. 276, 284, 687 A.2d 1167, 1171 (1997). Indeed, a written agreement to subject any existing controversy to arbitration is “valid, enforceable, and irrevocable, save upon such grounds as exist at law or in equity relating to the validity, enforceability or revocation of any contract. ” 42 Pa.C.S. §7303 (emphasis added); see also, 9 U.S.C. §2. Specifically, arbitration agreements are to be found valid only where there is “clear, express and unequivocal intent of the parties as manifested by the writing itself.” Midomo Co. v. Presbyterian Housing Development Co., 739 A.2d 180, 190 (Pa. Super. 1999). Furthermore, the burden to establish a valid agreement to arbitrate falls upon the party seeking to enforce it. Goldstein v. Depository Trust Company, 717 A.2d 1063, 1067 (Pa. Super. 1998).

C. Standards for Introducing Parol Evidence

Under the parol evidence rule, alleged prior or contemporaneous oral representation concerning subjects specifically dealt with in a written contract is inadmissible to vary the terms of the contract. 1726 Cherry Street Partnership v. Bell Atlantic Properties Inc., 439 Pa. Super. 141, 145, 653 A.2d 663, 665 (1995). However, parol evidence is admitted to avoid or modify the terms of that contract “where it is alleged that the parties agreed that those representations would be included in the written agreement but were omitted by fraud, accident or mistake.” Id. at 147, 653 A.2d at 666.

Fraud in the execution is distinguished from fraud in the inducement. Fraud in the execution occurs when the party proffering the evidence contends that he or she signed an agreement with the belief that it contained the terms and conditions agreed upon during the negotiations leading to the agreement, when in fact, the agreement, on its face, represented otherwise. Id.; see also, Iron Workers’ Savings and Loan Association v. IWS Inc., 424 Pa. Super. 255, 264-65, 622 A.2d 367, 372-73 (1993) (where allegations of fraudulent inducement related that plaintiff executed a contract with the knowledge that the written agreement reflected different terms than earlier allegedly fraudulent representations). Fraud in the inducement, on the other hand, occurs where the party proffering the evidence alleges he or she was fraudulently misled during the negotiations leading up to the agreement and would not have entered into the agreement otherwise yet the agreement is consistent on its face with those fraudulent misrepresentations. Id. In Pennsylvania, only where fraud in the execution is alleged is parol evidence admissible. HCB Contractors v. Liberty Place Hotel Associates, 539 Pa. 395, 398, 652 A.2d 1278, 1279 (1995); Iron Workers at 264-65, 622 A.2d at 372-73.

Fraud must be established by clear and convincing evidence albeit rarely by direct evidence. Rohm and Haas Co. v. Continental Casualty Co., 566 Pa. 464, 476, 781 A.2d 1172, 1179 (2001). Fraud at the time of the transaction can be inferred from the totality of the circumstances surrounding the transaction, including subsequent conduct. Denny v. Cavalieri, 297 Pa. Super. 129, 134, 443 A.2d 333, 335-36 (1982). To that effect, “[t]rial courts áre in the best position both to find the facts, and also determine their weight and credibility.” West Conshohocken Restaurant Associates Inc. v. Flanigan, 737 A.2d 1245, 1248 (Pa. Super. 1999) (citing Commonwealth v. 5043 Anderson Rd., 556 Pa. 335, 337, 728 A.2d 907, 909 (1999)).

II. Analysis

Defendants’ right to relief rests upon whether there is a valid agreement to arbitrate disputes between the parties. This court agrees with plaintiff that the agreement to arbitrate applies only to clients who request margin privileges. See MSDW, exhibit 3, section 3; MSDW, exhibit 4, section 4. In fact, defendant Martin conceded as much at the hearing held on May 6, 2002. N.T., May 6, p. 30. The determination of whether plaintiff agreed to arbitrate her disputes with defendants thus begins with whether plaintiff requested margin privileges. Defendants contend that plaintiff requested margin privileges, as evidenced by the box checked off in her AAA agreement, right above her signature. Id. Plaintiff responds that she never requested margin privileges when she signed the AAA agreement and that the box was not checked off at the time she signed the AAA agreement. N.T., May 28, pp. 22, 55.

Because the AAA agreement covers the specific topics of margin trading and of arbitration, plaintiff’s representation that she had not requested margin privileges is subject to the parol evidence rule. “[T]he written contract, if unambiguous, must be held to express all of the negotiations, conversations, and agreements made prior to its execution, and neither oral testimony, nor prior written agreements, or other writings, are admissible to explain or vary the terms of the contract.” 1726 Cherry Street Partnership v. Bell Atlantic Properties Inc., 439 Pa. Super. 141, 145, 653 A.2d 663, 665 (1995). Nonetheless, our Supreme Court has held that where fraud in the execution is alleged, parol evidence is admissible to contradict the terms of the contract. HCB Contractors at 398, 652 A.2d at 1279; see also, Iron Workers at 264-65, 622 A.2d at 372-73.

Plaintiff is alleging that she entered into a contract which did not reflect any affirmative request for margin privileges. Plaintiff’s memorandum of law in opposition to defendants’ motion to compel arbitration (July 9), pp. 1, 17. That agreement was subsequently fraudulently altered by the addition of a checkmark in front of the request for margin privileges. Id. Had plaintiff merely asserted that “Martin lulled Downes into signing the application form,” while not contesting the checkmark, in effect exclusively pleading fraud in the inducement, plaintiff’s parol evidence would not be admissible. Plaintiff’s memo, p. 21. A party cannot “justifiably rely upon prior oral representations, yet sign a contract denying the existence of these exact representations.” LeDonne v. Kessler, 256 Pa. Super. 280, 294 n.10, 389 A.2d 1123, 1130 n.10 (1978).

Instead, plaintiff has effectively pled fraud in the execution because she claims that the agreement she signed is not the agreement submitted by defendants and proffered as the contract between them. This court has stated that fraud in the execution occurs where “the plaintiffs must have thought that the document they signed contained the disputed terms.” PNC Bank v. Is Industries Inc., PNC Bank v. Snyder, no. 1333, control no. 061876, no. 1342, control no. 061875 (Phila. C.P., Sheppard J., Feb. 14, 2001). Indeed, fraud in the execution is often described as a factual pattern where misrepresentations were made prior to the agreement then omitted from the written contract. In the case sub judice, unlike the habitual fraud in the execution pattern of omitted terms, plaintiff alleges that the document she signed was altered after the fact to add terms. It is, nonetheless, fraud in the execution because plaintiff is alleging that she signed a document which was different on its face than the negotiations and representations the parties had. If anything, this is an egregious illustration of the case. Thus, plaintiff may introduce parol evidence to alter the terms of the contract.

Accordingly, the court admitted Downes’ testimony as to her non-adoption of margin trading and found it credible. Downes was employed and did not need to use her investment for growth to cover daily living expenses. See this opinion, ¶1. This was her nest egg. Id., ¶44. Downes expressly rejected risky investments and credit, as was corroborated by Martin. Id. Margin trading is risky, again, as conceded by Martin. See this opinion, ¶45. Downes was putting everything she had into her new account with Morgan Stanley. Id., ¶41. In the margin disclosure statement, Morgan Stanley explains:

“When you purchase securities, you may pay for the securities in full or you may borrow part of the purchase price from us. If you chose [sic] to borrow funds from Morgan Stanley, you will open a margin account with us. The securities in your account are the firm’s collateral for the loan to you.” MSDW, exhibit. 2.

The record does not reflect Downes’ receipt of this document, which is exclusively sent to clients who request margin privileges. Furthermore, Martin testified that he never addressed the contents of the statements in the margin disclosure statement with Downes. N.T., May 28, pp. 76-77. Downes did not even know what margin trading meant at the time she entered into the agreement. See this opinion, ¶¶59, 82.

Defendants’ exhibit 3, section 3, underscores the complexity, sophistication, and high risk involved in margin trading. MSDW, exhibit 3, section 3. It begins as follows: “Margin trading is not for everyone. You should examine your investment objectives, financial resources and risk tolerance to determine whether margin trading is appropriate for you.” Id. Another of defendants’ exhibits, the margin disclosure statement, lists harrowing hypothetical consequences of margin trading. To wit:

“You can lose more funds than you deposit in your margin account.
“The firm can force the sale of securities or other assets in your account(s).
“The firm can sell your securities or other assets without contacting you.
“You are not entitled to choose which securities or other assets in your account(s) are liquidated or sold to meet a margin call.
“The firm can increase its ‘house’ maintenance margin requirements at any time and is not required to provide you advance written notice.
“You are not entitled to an extension of time on a margin call.” MSDW, exhibit 2.

Plaintiff maintains that she never received this document. N.T., May 28, pp. 58-59. Defendants claim otherwise. N.T., May 6, pp. 6-8, 14-15, 55. The court was presented with numerous uncontested evidence and testimony of factors that make it inconceivable that Downes would have opted for margin trading. Nor is she more likely to have opted for it had she actually received that margin disclosure statement as defendants claim. Accordingly, the court believes Downes in that she did not check off the box for margin trading before signing upon the agreement.

Downes’ subsequent behavior when finding out what was happening with her account supports the conclusion that she never discussed margin trading with Martin, never agreed to trade on margin, nor checked that box accordingly before signing the AAA agreement. The claim advanced by Martin that she was interested in leverage is not consistent with his concession that she had an aversion to high risk. N.T., May 6, pp. 7-8; N.T., May 28, pp. 72-74. Nor does the fact that she contacted him only twice about the margin trading entries on her statements undermine her assertion that she wanted him to stop trading on margin for her. Response of defendants to plaintiff’s proposed findings of fact, conclusions of law and memorandum of law (Aug. 1, 2002), p. 4.

The record amply supports by clear and convincing evidence that Downes never checked off the box for option trading prior to signing the agreement. Her related statements, now admissible, also establish that she never discussed, let alone authorized, any margin trading with her money. Consequently, and according to defendants’ own procedure for adopting the arbitration agreement, the arbitration agreement is not triggered and plaintiff is not bound to arbitrate her dispute with defendants.

Defendants, nonetheless, argue that under Flightways Corp. v. Keystone Helicopter Corp., plaintiff must plead fraud as to the arbitration clause specifically rather than fraud as to the contract in general. Flightways Corp. v. Keystone Helicopter Corp., 459 Pa. 660, 331 A.2d 184 (1975). Thus, defendants claim, even if plaintiff could establish fraud in the execution of the contract between the parties, plaintiff is nevertheless still bound by the agreement to arbitrate.

Under Flightways:

“[A] general attack on a contract for fraud is to be decided under the applicable arbitration provision as a severable part of the contract and . . . only where the claim of fraud in the inducement goes specifically to the arbitration provision itself should it be adjudicated by the court rather than the arbitrator.” Flightways at 633, 331 A.2d at 185.

This court does not read Flightways to find a pleading of fraud in the contract and one of fraudulent inducement in the agreement to arbitrate to be mutually exclusive. Id. Flightways merely states that the former allegation would be insufficient per se to void the agreement to arbitrate. Id. Furthermore, whereas the distinction between fraud in the execution and fraud in the inducement is critical for purposes of the parol evidence rule, it is irrelevant for purposes of voiding an arbitration agreement under Flightways. Id. In Flightways, the relevant distinction is whether fraud is alleged as to the arbitration clause itself rather than the contract in general. Id.

In the case before the court, plaintiff has pled both because in pleading fraud in the execution of the contract, plaintiff pleads that she was fraudulently induced into agreeing to arbitrate. Undeniably, the agreement to arbitrate here was implied in the agreement to trade on margin. MSDW, exhibit 3. As readily admitted and argued by defendants, it is from the “check” in the margin trading box, the agreement to margin privileges, that the agreement to arbitrate was incorporated:

“Q. And would you agree, sir, that if Ms. Downes did not request or wasn’t approved for margin privileges that this particular clause [the pre-dispute arbitration clause] would not apply as you understand this clause?
“A. If she did not approve or request, yes.” N.T., May 6, p. 30.

Plaintiff’s claim of fraud, thus, does go “specifically to the arbitration provision itself.” Flightways at 663, 331 A.2d at 185-86. Plaintiff simply had no other place or occasion to contract to arbitrate. To attack the arbitration agreement directly, as required by Flightways, here means to attack the agreement for margin privileges. Id. The court was, thus, properly and directly adjudicating the existence of an agreement to arbitrate. See 42 Pa.C.S. §7303; Goldstein v. Depository Trust Company, 717 A.2d 1063 (Pa. Super. 1998); Smith v. Cumberland Group Ltd., 455 Pa. Super. 276, 687 A.2d 1167 (1997). Finally, defendants did not meet their burden to establish a valid agreement to arbitrate. Goldstein at 1067. “[A] party who can establish that he did not agree to arbitrate,... may be entitled to enjoin an arbitration proceeding.” Flightways at 663, 331 A.2d at 185.

CONCLUSIONS OF LAW

(1) This court is the proper forum to determine whether the parties entered into an agreement to arbitrate.

(2) The arbitration agreement is only applicable to clients of defendants who request margin privileges.

(3) Plaintiff showed by clear and convincing evidence that defendants committed fraud in the execution of the AAA agreement by altering the agreement subsequent to plaintiff signing upon it.

(4) Thus, plaintiff may introduce parol evidence to contradict the terms of the written agreement.

(5) Plaintiff’s credible oral testimony was admissible to establish that she did not request margin privileges.

(6) Because plaintiff did not request margin privileges, plaintiff is not bound by the arbitration agreement.

(7) Defendants’ fraudulent alteration of the document plaintiff signed represents fraud in the execution of the agreement to arbitrate.

(8) There is no clear, express, and unequivocal intent of the parties to arbitrate disputes.

(9) There is no valid contract to arbitrate between the parties.

CONCLUSION

This court will enter a contemporaneous order in accord with these findings of fact and conclusions of law.

ORDER

And now, September 23, 2002, upon consideration of defendants’ petition for temporary restraining order and preliminary injunction to compel arbitration and stay all other proceedings, plaintiff’s response, the parties’ replies and sur-replies, the respective memoranda, all matters of record, and after two hearings, and in accord with the contemporaneous findings of fact and conclusions of law, it is ordered that:

(1) Defendants’ petition is denied;

(2) The parties did not enter into a binding agreement to arbitrate;

(3) Defendants are directed to file an answer to the complaint within 20 days of this order.

      . All references to notes of testimony are to testimony and oral argument on defendants’ petition, either on May 6, 2002, or May 28, 2002, as indicated.

      . Neither in her memorandum briefs nor in the hearings before the court had plaintiff articulated that she was pleading fraud in the execution to introduce parol evidence. Nonetheless, plaintiff always maintained that defendant Martin altered the agreement by checking off the request for margin privileges after plaintiff signed it, in effect, thus, pleading fraud in the execution of the agreement. See this opinion, ¶50; plaintiff’s memo, July 9, pp. 2, 13, 18, 22. Plaintiff need not use the exact legally conclusive words in their pleadings. Price v. Ross, 339 Pa. Super. 461, 463-64, 489 A.2d 252, 253-54 (1985).

      . The testimony doubly serves to establish fraud in the execution and the negation of what the written document proffers, the option of margin trading, since the fraudulent alteration went to the term the parties are contesting.

      . Plaintiff has further argued that, were this court to find plaintiff bound by the arbitration agreement under Flightways, the court should, under Paone v. Dean Witter Reynolds Inc., find a confidential or fiduciary relationship between the parties, and thus allow, as in Paone, an exception to the rule stated in Flightways. Plaintiff’s reply brief, Aug. 2, 2002; Flightways Corp. v. Keystone Helicopter Corp., 459 Pa. 660, 331 A.2d 184 (1975); Paone v. Dean Witter Reynolds Inc., 789 A.2d 221 (Pa. Super. 2001). Defendants refute that argument, asserting, inter alia, that the facts in this case are dramatically different from Paone and, consequently, the court could not find a confidential relationship between the parties. Reply of defendants to plaintiff’s reply brief, Aug. 15, 2002; Paone v. Dean Witter Reynolds Inc., 789 A.2d 221 (Pa. Super. 2001). The court does not find it necessary to reach a decision on whether a confidential relationship existed between the parties because, under the law, plaintiff has established that she was fraudulently induced into an arbitration agreement, and the agreement is, thus, void.


author: GOODHEART, S.J.,

text:
    Vallone v. Creech

      Judy Greenwood and William P. Murphy, for plaintiffs.

      Michael O. Pitt, for defendant
    July 16, 2002
   GOODHEART, S.J.,

INTRODUCTION

This is a medical malpractice case that was tried before the Honorable Legróme Davis and a jury in February 2002. Upon Judge Davis’ appointment to the United States District Court, the matter was reassigned to me for post-trial proceedings.

After a review of the record and the parties’ post-trial memoranda, and following oral argument, I entered an order dated June 11, 2002, granting the plaintiffs’ motion for post-trial relief, and awarding a new trial.

This interlocutory order is appealable as of right, pursuant to Pa.R.A.P. 311(a)(6), and the defendant filed a notice of appeal on July 1, 2002. This opinion explains my decision.

BACKGROUND

Plaintiff Dianne Vallone first came under the care of defendant Creech in March 1991, after a biopsy indicated the presence of an infiltrative lobular carcinoma in her right breast. Shortly thereafter, she underwent a “lumpectomy” and remained in his care until December 1993, when (for reasons related to her insurance coverage) she began to treat elsewhere.

In August 1996, Mrs. Vallone noticed significant changes in her breast, and arranged to see Dr. Creech in October, which was the first date he had available. At that appointment, she told Dr. Creech about the changes in her breast, said that it had begun to hurt, and that she was extremely concerned about a recurrence of cancer.

Dr. Creech ordered a bone scan, some blood work and a mammogram. One week later, Mrs. Vallone returned to Dr. Creech and again expressed her concerns about the changes in her breast. Dr. Creech told her that the changes were a result of the radiation therapy she had undergone after the 1991 lumpectomy, and that she should visit him again in three months.

This pattern continued until December 2,1997, when Mrs. Vallone presented with a red rash on her right breast. Up to this point, Dr. Creech had not ordered a biopsy.

During the December 2, 1997 visit, Dr. Creech diagnosed Mrs. Vallone with a reccurrence of cancer, a diagnosis that was confirmed by a biopsy the following week. Both of Mrs. Vallone’s breasts were subsequently removed, and she underwent extensive chemotherapy treatment afterwards, however — according to the testimony of the plaintiffs’ oncological expert, Donna Jean Glover M.D. — Dr. Creech’s inexplicable delay in ordering a biopsy permitted Mrs. Vallone’s cancer to progress to Stage IV, reducing her chance of cure from approximately 90 percent to zero.

The jury, however, returned a verdict finding that Dr. Creech had not been negligent. Based upon the testimony presented — including that of the defendant himself — and due to a significant flaw in the jury’s charge, this verdict simply cannot stand.

DISCUSSION

1. The Verdict Was Against the Weight of the Evidence

A party is entitled to a new trial when the verdict is “so contrary to the evidence...” that it shocks the court’s sense of justice. Cangemi v. Cone, 774 A.2d 1262, 1265 (Pa. Super. 2001); Watson v. American Home Assurance Company, 454 Pa. Super. 293, 302, 685 A.2d 194, 198 (1996), app. denied, 549 Pa. 704, 700 A.2d 443 (1997).

Here, one of the plaintiffs’ experts, Dr. Glover, testified that the applicable standard of care required an oncologist to order a biopsy immediately upon the detection of any change in the appearance of a breast from which a cancerous lump has been previously removed (N.T. 2/5/2002, p. 78), and that Dr. Creech’s inexplicable failure to do so for a period of approximately 15 months was the primary reason why Mrs. Vallone went from having an almost 90 percent chance of cure to terminal cancer with a life expectancy measured in months.

The plaintiffs’ other medical expert, Robert John Cole M.D., a radiation oncologist, agreed with Dr. Glover; Dr. Cole stated that if a patient presents five years after the completion of radiation therapy with new and dramatic changes in the breast, one must assume that the cancer has recurred until proven otherwise, that it is a deviation from the standard of care not to order an immediate biopsy, and that — had Dr. Creech ordered one in October, 1996 — he would have detected the cancer in sufficient time to give Mrs. Vallone a 90 percent chance of cure. (N.T. 2/5/2002, pp. 203-208.)

The testimony of the defendant’s expert witness, Kenneth M. Algazy M.D., actually supports that of the plaintiffs’ experts, as shown by the following exchange taken from Dr. Algazy’s videotaped deposition, which was shown to the jury in lieu of live testimony:

“[By plaintiffs’ counsel]
“Question: Sir, do you agree with Dr. Creech when he said [in deposition testimony], if you think it’s possible that the change you’re seeing in the breast could be due to cancer, it’s your obligation to send her for a biopsy, or doesn’t he know what he’s talking about?
“Answer: Well, I agree with that, but he obviously didn’t feel that there was a chance that this was cancer, otherwise he would have done something.” (Algazy deposition, 2/6/02, pp. 54-55.)

Contrary to Dr. Algazy’s belief, Dr. Creech knew that the changes in Mrs. Vallone’s right breast could have been caused by a recurrence of cancer as early as the October 1996 appointment, as shown by Dr. Creech’s own testimony:

“[By the defendant’s counsel]
“Question: So in October of 1996, Mrs. Vallone presents to you with these nipple changes, what is in the differential diagnosis?
“Answer: I looked at this and said, what in the world is going on here? It could be a recurrence of her cancer. It could be due to the radiation therapy, so my question to her, to help me figure out which it is, is are these new changes or are these changes that occurred before?
“Question: What did she tell you?
“Answer: And she said, these are not new changes. These are changes that I’ve had before, so initially I had recurrent breast cancer, radiation changes, she tells me they’re not acute. I knew from 1993 that she was starting to have the chronic changes due to radiation therapy. The scar was indenting, it was getting fuller, and we know that this keeps going on and on and you have these progressive changes, so her telling me that this was not acute put me 80 percent into the ball park of radiation change, 20 percent into recurrent cancer. ” (N.T. 2/6/2002, pp. 117-18.) (emphasis added)

During the October 1996 appointment, Dr. Creech ordered a mammogram of Mrs. Vallone’s right breast, though he also admitted that a mammogram will not necessarily detect a cancerous growth. (N.T. 2/6/2002, p. 105.)

Shortly after the exchange quoted above, Dr. Creech was asked whether he had compared the mammogram he ordered with any earlier mammograms, and the following exchange ensued:

“[By the defendant’s counsel]
“Question: Did you review this [October 1996 mammogram] film yourself, Dr. Creech?
“Answer: Yes....
“Question: Now, let me ask you this. Did you take the two films themselves, the mammogram from April of 1996 and the mammogram from November, 1996 and compare them?
“Answer: Absolutely. I always do.
“Question: What did you find?
“Answer: That there was no difference.
“Question: What does that mean to you, clinically?
“Answer: That there was no difference.
“Question: Yeah, but I mean in terms of your differential diagnosis, going into it you just said you’re thinking 80 percent radiation changes, 20 percent maybe the cancer is back, what effect, if any, did the fact that you now have these two mammograms, you’ve compared them and as you’ve just told us there’s no change between the two?
“Answer: I think it changed my opinion to 90 percent radiation, 10 percent recurrence.” (N.T. 2/6/2002, pp. 121-22.)

It is thus obvious that Dr. Algazy’s conclusion was based upon an incorrect premise — that Dr. Creech never suspected a recurrence of cancer in Mrs. Vallone’s right breast at any time before December 1997 — when in fact Dr. Creech himself testified that he believed that there was a “10 or 20 percent chance” that the changes in Mrs. Vallone’s breast were being caused by a recurrence of cancer, and not by the radiation therapy that had been completed several years previously.

According to the standard of care as described by Dr. Glover — a standard with which Dr. Algazy found no fault — Dr. Creech’s belief that cancer was a possibility was itself sufficient to mandate an immediate biopsy, which Dr. Creech nonetheless failed to order for over a year. His “wait-and-see” approach to the case will, in all probability, cost Mrs. Vallone more than 20 years of her life.

“[W]hile it is true that the jury does not have to accept as true even uncontradicted evidence, ... it is also true that, where a jury verdict goes against the overwhelming, uncontradicted testimony, the court may set the verdict aside as being clearly against the weight of the evidence.” Riddle v. Anderson, 85 Pa. Commw. 271, 276, 481 A.2d 382, 385 (1984).

In this case, it is clear beyond reasonable dispute that the failure of Dr. Creech to order a biopsy of Mrs. Vallone’s right breast for approximately fifteen months after first noting changes in it that he admitted “could have been” cancerous substantially increased Mrs. Vallone’s risk of harm, and decreased her chances of surviving five more years (the standard definition of Cancer cure) from perhaps 90 percent to zero.

Under these circumstances, the defense verdict rendered by the jury must yield, and the interests of justice require that I award a new trial.

2. A Jury Charge on “Mere Error of Judgment” Was Inappropriate in This Case

Though it is indeed true that a physician may not be held liable for a “mere error in judgment,” Soda v. Baird, 411 Pa. Super. 80, 600 A.2d 1274 (1991), such an instruction to the jury is only appropriate in a case where there is at least some question whether the physician’s performance breached the standard of care in the first place. “There is no responsibility for error of judgment unless it is so gross as to be inconsistent with the degree of skill which it is the duty of every physician to possess.” Hodgson v. Bigelow, 335 Pa. 497, 504-505, 7 A.2d 338 (1939).

“[A] physician is not liable for an error of judgment ... if a physician employs the required judgment and care in arriving at his diagnosis, the mere fact that he erred in his diagnosis will not render him liable, even though his treatment is not proper for the condition that actually exists.” Smith v. Yohe, 412 Pa. 94, 100, 194 A.2d 167, 171 (1963).

“This is not to say that a physician cannot be liable for a mistake of judgment or misdiagnosis. He is clearly liable if his mistake reflects a failure to follow proper practice, and thereby violates the standard of care required of physicians.” Havasy v. Resnick, 415 Pa. Super. 480, 501, 609 A.2d 1326, 1336 (1992). (emphasis added)

The uncontroverted testimony in this case established that Dr. Creech’s failure to order a biopsy for approximately 15 months after Mrs. Vallone presented with changes in her breast, given Dr. Creech’s knowledge that a cancerous growth had previously been removed from it, so clearly violated the requisite standard of care that the “mere error of judgment” charge had no place in this trial.

It is quite reasonable to assume that the “mere error of judgment” charge caused the jury considerable confusion; in fact, the jury sent out a number of notes during its deliberations so suggesting, including one note that inquired what would happen if 10 of the 12 jurors could not agree on a verdict.

Though Judge Davis appropriately side-stepped that question, he did — pursuant to a request from the jury— reread the “mere error of judgment” portion of his charge, thereby giving even greater emphasis to the erroneous instruction.

Later that same day, the jury returned its 10-to-2 verdict in favor of the defendant physician.

It is impossible to know with certainty whether or not the erroneous inclusion of a “mere error of judgment” charge directly led to the jury’s verdict in favor of the defendant, but in view of the defendant’s clear breach of the applicable standard of care, I must assume that this jury was hopelessly confused during its deliberations.

CONCLUSION

There is no rational explanation for the jury verdict in this case. It cannot be attributed to a mere divergence of opinion among expert witnesses, nor to any legitimate question about the underlying facts of this matter.

For those reasons, as discussed more fully above, my decision to grant a new trial in this case was the only proper result, and my decision must therefore be affirmed.

      .1 do not lightly disregard a jury’s verdict, as I have great faith in the jury system’s ability to reach just results, and I firmly believe that juries generally discharge their duties in an admirable manner. A significant flaw in the jury’s charge (which would scarcely be the jury’s fault) may have contributed to the erroneous verdict, as will be discussed in the next section of this opinion.


author: PRATT, P.J.,

text:
    Ambrosia Coal and Construction Co. v. People’s Bank of Western Pennsylvania

      C.P. of Lawrence County,
    no. 10707 of 1994, C.A.

      Frank G. Salpietro, for plaintiffs.

      Gary P. Hunt, for defendants.
    April 5, 2002
   PRATT, P.J.,

Plaintiffs, in this civil case, filed a complaint against the defendants on July 31, 1996. In June 2001, plaintiffs filed an “emergency motion to disqualify defendants’ expert witness and prevent disclosure of confidential information.” In their motion, plaintiffs alleged that defendants’ expert, the John T. Boyd Company, should be disqualified, because Boyd performed mining and geological consulting services for plaintiff Ambrosia Coal and Construction Company in the 1970s and throughout the 1990s and that, the president of plaintiff Ambrosia Coal, Carmen Shick, consulted with representatives from Boyd in the early 1990s regarding the instant litigation and that the representatives of Boyd became privy to confidential information. Plaintiffs asserted that it would be a conflict of interest and against professional ethics for representatives of Boyd to be employed as defendants’ expert witness based on Boyd’s past dealings with plaintiff Ambrosia Coal and the meetings between Carmen Shick and representatives of Boyd.

On October 16, 2001, in disposition of defendants’ emergency motion, the court entered an order disqualifying defendants’ expert witness, Boyd, comparing the relationship between plaintiffs and Boyd with that of an attorney-client relationship and applying the same standard of ethics. The court found that there was some question as to whether any privileged or confidential information was provided by plaintiffs to Boyd regarding the matters at issue in the instant case and that defendants were precluded from using any information obtained from Boyd unless previously produced by plaintiffs through discovery.

Defendants have now filed a “motion to reconsider disqualification of the John T. Boyd Company,” alleging that the disqualification of Boyd was improper, relying on the affidavits of four representatives of Boyd, namely, Thaddeus Sobek, Ronald L. Lewis, Mark R Davie, and John T. Boyd II.

In the signed affidavits of Lewis, Davie, and John T. Boyd II, each admits to working on projects in which plaintiff Ambrosia Coal were involved. They emphatically deny, however, that they were made privy to any confidential or privileged information relating to this case and that the information used by any representative of Boyd, in connection with the expert consultation on behalf of defendants, was obtained through the discovery process and was published data. As to the affidavit of Thaddeus Sobek, the employee at Boyd assigned as the expert to be utilized in defendants’ defense, Sobek denies having been involved in any projects with plaintiff Ambrosia Coal and asserts that the information he utilized while acting in the capacity of defendants’ expert was obtained through discovery and public records.

Plaintiffs, in response to defendants’ motion to reconsider, contend that the court’s October 16, 2001 order, disqualifying Boyd from acting as an expert for defendants should be affirmed, because of the affidavit of Carmen Shick, where he states that, in the early 1990s, he spoke with representatives of Boyd concerning the issues involved in the instant case.

A hearing of defendants’ emergency motion was conducted, at which the parties presented evidence and oral arguments.

DISCUSSION

Initially, the court notes that it could find no Pennsylvania state trial or appellate court rulings regarding the disqualification of an expert witness under the circumstances here presented, nor has counsel for either party provided the court with any such authority. However, the federal courts have examined this subject and offer guidance on a trial state court’s role and the standard used in determining whether a party’s expert witness should be disqualified.

In Cordy v. The Sherwin Williams Company, 156 F.R.D. 575, 579 (D.N.J. 1994), the United States District Court for the District of New Jersey held that an analysis of whether to disqualify an expert witness begins with recognizing that courts have the “inherent power to disqualify experts.” The standard used in determining whether to disqualify an expert witness must be distinguished from the attorney-client relationship because of the different roles of experts and attorneys for litigation purposes. Id. at 580.

A two-step test has been established in the federal courts to consider whether an expert witness should be disqualified. The court must determine whether the moving party had a confidential relationship with the expert, and whether any confidential or privileged information, relevant to the issues being litigated, was disclosed to the expert. Green, Tweed of Delaware Inc. v. DuPont Dow Elastomers, 202 F.R.D. 426 (E.D. Pa. 2001). Only if the court finds both a confidential relationship between the moving party and the expert, and that confidential or privileged information relative to the litigation was disclosed by the moving party to the expert, and that neither claim was waived, would disqualification of the expert be proper. Cordy, supra. The burden of proof rests with the party moving for disqualification. Id.

Here, in analyzing the relationship between plaintiff Ambrosia Coal and Boyd to determine whether a confidential relationship existed, the record reflects four signed affidavits and testimonial evidence regarding Boyd’s association with plaintiffs in the 1970s and throughout the 1990s presented by defendants. This evidence revealed that Boyd worked on only two projects for plaintiff Ambrosia Coal which occurred while Boyd was associated with another project involving plaintiff Ambrosia Coal. However, in the third project, Boyd was employed by a different party. The evidence shows that, of the three instances when plaintiff Ambrosia Coal and Boyd were associated, none of the transactions were, in any manner, related to the instant litigation.

While Carmen Shick testified that, sometime in the early 1990s, he instructed Boyd to gather information regarding mineral or coal reserves relevant to the instant case, he also admitted that plaintiffs had ultimately employed another consulting firm and did not utilize any information allegedly obtained by Boyd for plaintiffs. Ronald L. Lewis and Mark R Davie of Boyd emphatically deny that any discussions occurred with Carmen Shick, in which the instant litigation was discussed. Both adamantly contend that the relationship between plaintiff Ambrosia Coal and Boyd was restricted to two projects and a third project, where Boyd was working for a third party and not plaintiffs.

The fact that discussions may have occurred between plaintiff Ambrosia Coal and Boyd is not alone sufficient to warrant the finding of a confidential relationship between the parties. In Mayer v. Dell, 139 F.R.D. 1 (D.D.C. 1991), the federal district court of the District of Columbia, in holding that a confidential relationship did not exist merely because a party and an expert had a meeting concerning a pending lawsuit, found that a confidentiality agreement was never signed, documents relevant to the case were not provided to the expert, and that the meeting was nothing more than a consultation.

Assuming in this case that two discussions regarding the instant litigation did occur between plaintiff Ambrosia Coal and Boyd, the record reflects that no confidentiality agreement was signed by the parties, no documents relevant to the litigation exchanged hands and the meetings were informal consultations. Consequently, like Mayer v. Dell, supra, the meetings are insufficient to warrant a finding of a confidential relationship.

Even if a confidential relationship existed, the court must determine whether any confidential or privileged information passed from plaintiffs to Boyd.

Carmen Shick testified he requested Boyd to retrieve information regarding mineral or coal reserves related to the instant case. Defendants, on the other hand, presented affidavits and testimony to support the contention that the information used by Boyd in its capacity as defendants’ expert was obtained by defendants from documents produced by plaintiffs through discovery requests or from public records. As plaintiffs failed to refute this evidence, the court finds insufficient evidence to support the conclusion that confidential or privileged information was exchanged between plaintiffs and Boyd.

There being no factual basis to support a finding of a confidential relationship between plaintiffs and Boyd, defendants’ expert, and that confidential or privileged information was exchanged between plaintiffs and Boyd relevant to the issues in this case, the court is without authority to disqualify defendants’ expert, Boyd. To otherwise do so would be an abuse of discretion.

Hence, the court shall, by separate order, strike its October 16,2001 order, and deny plaintiffs’ “emergency motion to disqualify defendants’ expert witness and prevent disclosure of confidential information.”

ORDER

In accordance with the accompanying opinion, this court’s October 16, 2001 order is stricken, and plaintiffs’ “emergency motion to disqualify defendants’ expert witness and prevent disclosure of confidential information” is denied.

The prothonotary shall properly serve notice of the instant order and attached opinion upon counsel of record.


author: LESKINEN, J.,

text:
    Popelas v. Travelers Insurance Co.

      C.P. of Fayette County,
    no. 724 of 2003, G.D.

      Neil J. Marcus, for petitioner.

      Daniel T. Moskal, for respondent.
    June 6, 2003
   LESKINEN, J.,

Before this court is a petition to compel the appointment of an arbitrator filed by petitioner, John T. Pópelas III.

After full consideration of the record, applicable law, and briefs of counsel, this court finds that the parties in a dispute over underinsured motorists coverage (UIM) cannot be compelled to submit to arbitration, absent an agreement between the parties to arbitrate that issue. Therefore, this court denies petitioner’s petition to compel the appointment of an arbitrator.

BACKGROUND

On or about June 13,2002, petitioner was involved in a motor vehicle accident. At the time of the accident, petitioner had UIM coverage through Travelers. Petitioner’s policy with Travelers contains no arbitration clause. Petitioner settled with the tort-feasor for $15,000. Petitioner then made a demand for UIM benefits from Travelers, and sought to proceed to arbitration by naming an arbitrator.

Petitioner filed the within petition to compel Travelers to appoint an arbitrator on or about March 18, 2003. Travelers filed an answer on or about April 2, 2003. In their answer, Travelers argues that under the existing policy, it is not required to appoint an arbitrator or submit to arbitration.

DISCUSSION

The sole issue before this court is whether parties in a dispute over UIM coverage are required to submit to arbitration despite the lack of an arbitration provision in the policy.

This court initially notes that “There is no law in the Commonwealth of Pennsylvania which requires that persons involved in a dispute over UM or UIM coverage submit the controversy to arbitration. Further, there is no law in the Commonwealth of Pennsylvania which requires that parties to insurance policies enter an agreement that any dispute surrounding coverage be submitted to arbitration.” Dearry v. Aetna Life & Casualty Company, 415 Pa. Super. 634, 639, 610 A.2d 469, 472 (1992).

In the case of Johnson v. Pennsylvania National Insurance Companies, 527 Pa. 504, 594 A.2d 296 (1991), the Supreme Court of Pennsylvania held that a taxicab passenger, who was injured by a hit-and-run driver, was a third-party beneficiary of taxicab owner’s policy and, therefore, was bound by the policy requirement to arbitrate his claim for uninsured motorist (UM) benefits.

In so holding, the court cited its earlier decision in Lincoln University of the Commonwealth System of Higher Education v. Lincoln University, American Association of University Professors, 467 Pa. 112, 354 A.2d 576 (1976): “It is well settled that ‘arbitration’ is a matter of contract, and, absent an agreement between the parties to arbitrate an issue, the parties cannot be compelled to arbitrate that issue.” Id. at 119, 354 A.2d at 580. The Johnson court reasoned that since arbitration is a matter of contract and, the signatories to the insurance policy agreed to arbitration, the rights of the passenger, as the third-party beneficiary under that policy, were “vulnerable to the same limitations which may be asserted between the promisor and the promisee.” Johnson at 509, 594 A.2d at 299. The court concluded that “the right to the uninsured motorist benefits is provided by statute, but the method of obtaining those benefits is governed by the insurance policy.” Id. (emphasis in original)

In the case of McFarley v. American Independent Insurance Company, 444 Pa. Super. 191, 663 A.2d 738 (1995), the Superior Court, citing both Lincoln and Johnson held that a passenger and cab driver who were injured in separate accidents with uninsured motorists could not force arbitration of UM claims under an auto insurance policy that did not provide for arbitration, and that the arbitration of claims could not be compelled by regulation in the absence of statutory authority. The court concluded that the insurance policy, which governs the method by which UM motorist benefits may be obtained, did not provide for arbitration, therefore, the parties could not compel arbitration of the claim. Furthermore, the court held that the assertion that public policy generally favors arbitration was not sufficient to warrant imposition of a term that materially alters a perfectly valid insurance contract.

In McFarley, the court also relied on their decision in the case of Johnson by Johnson v. Travelers, 348 Pa. Super. 278, 502 A.2d 206 (1985). In Johnson by Johnson, a case factually similar to the case at bar, a minor and mother seeking compensation for injuries sustained by minor when he was struck by an uninsured motor vehicle filed a petition to compel arbitration, which was denied. The Superior Court held that the procedure to be followed in enforcement of UM benefits, absent an actual contract containing an arbitration clause, as against an “assigned claims” obligor, is by filing a complaint in assumpsit.

In his brief to this court, petitioner argues that a UIM endorsement without any arbitration clause is not permitted under Pennsylvania law; and cites the case of Prudential Property and Casualty Insurance Company v. Muir, 99 Pa. Commw. 620, 513 A.2d 1129 (1986), in support of this argument. However, the court in McFarley, supra, recognized the Commonwealth Court’s holding in Muir and declined to follow the holding based on the authority cited, including Lincoln, Johnson, and Johnson by Johnson. McFarley at 195 n.2, 663 A.2d at 740, n.2. This court will decline to follow Muir as well.

This court relies on the authority of the Supreme Court of Pennsylvania and the Superior Court of Pennsylvania in the cases cited above; and finds that the parties in a dispute over UIM coverage are not required to submit to arbitration, in light of the absence of an arbitration provision in the policy.

Wherefore, this court enters the following:

ORDER

And now, June 6,2003, upon consideration of the petition to compel the appointment of an arbitrator filed on behalf of the petitioner, John T. Pópelas III, and upon further consideration of applicable law, and the briefs of counsel, it is hereby ordered and decreed that petitioner’s petition to compel the appointment of an arbitrator is denied.


author:
WETTICK JR., J.,
     DiNUBILE JR., J.,
     CASSIMATIS, J.,

text:
    In re Silicone Breast Implant Litigation

      C.P. of Allegheny County,
    no. GD-94-14550

      Alan H. Perer and John Kopesky, for plaintiffs.

      John Bass, Cynthia L. Bremen, Peter J. Hoffinan, David M. Neuhart and Diane Barr Quinlin, for defendant.
    April 24, 2003
   WETTICK JR., J.,

This opinion addresses the issue of whether testimony of former patients of a defendant-physician as to their preoperative discussions with this physician is admissible in a breast implant medical malpractice case in which these patients are not parties to the litigation. In this litigation, plaintiffs are seeking recovery based on the lack of informed consent against the treating physician who performed their implant surgeries. Each plaintiff will testify that she was not told about certain risks and will present expert testimony describing how these risks that were not discussed are risks of the implant surgery. For example, a plaintiff may testify that she was never told that the implants may not last for the rest of her life, and her expert may testify (1) it was widely known in the medical community at the time of the surgery that more than 20 percent of the time the implants failed and needed to be replaced or removed within five years of the surgery and (2) the manufacturers’ package inserts stated that a patient should not anticipate that the implants will last for the remainder of the patient’s life.

I.

As part of a plaintiff’s case, counsel for the plaintiff wishes to present testimony from other patients of the defendant-physician that the defendant-physician never explained the risk that the implants may fail. This testimony is being offered to convince the jury that a plaintiff’s testimony that she was not told that the implants may fail is credible.

I am sustaining the objections of counsel for the physicians to this testimony being offered as part of a plaintiff’s case in chief. As a matter of law, what a defendant-physician discussed with other patients (assuming that the jury would find this testimony of the other patients to be credible) does not tend to establish that this is what the defendant-physician discussed with the plaintiff. See General Equipment Manufacturers v. Westfield Insurance Company, 430 Pa. Super. 526, 549, 635 A.2d 173, 185 (1993) (“the law will not consider evidence that a person has done a certain act at a specific time as probative of a contention that he has done a similar act at another time.” (citations omitted)). Also, while evidence of the habit of a person is admissible to prove that the conduct of the person on a particular occasion was in conformity with the habit (Pa.R.E. 406), the testimony of fewer than virtually all of a sizeable number of the patients of a physician is not sufficient to establish a habit of the physician.

II.

As part of the defense of the case, counsel for the defendant-physician will ask the defendant-physician what he or she told the plaintiff regarding the risks upon which the plaintiff bases her lack of informed consent claim. The physician may offer the following testimony:

Alternative 1

I remember my discussions with the patient (or my recollection has been refreshed through a review of my notes). I explained to the patient that the implants may fail or wear out. If this occurs, additional surgery will be necessary.

Alternative 2

The defendant may testify that at the time I performed the surgery, I recognized that each patient needed to know that there was a risk of further surgery because the implants may fail or wear out. However, I am not a “check-list” doctor. My discussions with my patients begin with why the patient wants the implants. I learn from the patient what she already knows; I focus on what she may not know. These are give-and-take discussions. I do not have a specific recollection of my conversations with the plaintiff, so I cannot tell you today exactly what we discussed. It would depend on what she already knew and what she needed to know.

Alternative 3

I have no specific recollection of my discussions with the plaintiff. However, at the time I treated the plaintiff, in each and every case I always discussed various risks associated with the implant procedure. One of these risks that I always discussed was the possibility of further surgery because the implants may fail or wear out.

For each of these three alternatives, the plaintiffs in the implant litigation will seek to offer, as rebuttal testimony, the testimony of other patients that the defendant-physician did not explain these risks to them.

As to the first alternative (the physician testifies that he or she remembers the discussions with the plaintiff), the testimony of the other patients concerning their discussions with the defendant-physician is inadmissible. The apparent purpose for the testimony is to convince a jury that the defendant’s testimony that he or she remembers discussing this risk that the implants may need to be removed or replaced is inaccurate. A question for the jurors to decide is whether they believe the physician’s testimony that he or she remembers telling the plaintiff that the implants may need to be removed or replaced because they may fail. In answering this question, the jury may not consider what the defendant-physician did in treating other patients because of the principle of law which I previously discussed that the law will not consider evidence that a person has done or failed to do a specific act at a specific time as prohibitive of a contention that this person has acted or failed to act in a similar manner at another time.

I reach the same result as to Alternative 2 where the physician testifies that he or she does not remember the discussions with the plaintiff but would have told the plaintiff of the risk that the implants may fail if he or she believed that the plaintiff was not already aware of this risk. Since the defendant is not testifying that he or she discussed this risk with the plaintiff, evidence of discussions with other patients is inadmissible under the same principle that what a person did at a specific time is not probative of a contention that this person has done a similar act at another time.

I reach a different result with respect to the third alternative where the physician testifies that he or she always discusses this risk with the patient. In this situation, the defendant-physician is asking the jury to reject the plaintiff’s testimony that she was not told of this risk on the basis of the defendant-physician’s testimony as to what he or she always does. The jury must reject the plaintiff’s testimony that she was not told of the risk if it accepts the physician’s testimony that this is a risk that he or she always discusses. However, this testimony of the physician cannot be a basis for rejecting the plaintiff’s testimony if the jury would find that there were any instances in which the physician failed to discuss these risks with any other patient. Thus, testimony of another patient that the defendant-physician performed the same procedure without discussing the risk that the implants may fail is admissable.

In this situation, the testimony of the other patient is not being offered to bolster the plaintiff’s testimony as to what the defendant-physician discussed with the plaintiff. Instead, it is being offered to impeach the credibility of the defendant’s testimony that he knows he discussed this risk with the plaintiff because this is what he does with every single patient. See Pa.R.E. 607(b) which provides that the credibility of a witness may be impeached by any evidence relevant to that issue, except as otherwise provided by statute or these rules.

The defendant-physicians contend that even where the testimony of other patients may be relevant to impeach the testimony of a defendant-physician, this testimony should be excluded pursuant to Pa.R.E. 403 which provides that relevant evidence may be excluded if its probative value is outweighed by the danger of unfair prejudice or confusion of the issues. According to the defendants, there is a danger of unfair prejudice because a jury will learn of other lawsuits filed against the defendant-physician by these other patients. Furthermore, there will be confusion of issues because this testimony would result in a trial within a trial.

The defendant-physicians state that I have already decided this issue in Kundus v. Johnson, 39 D.&C.3d 425 (C.P. Allegheny 1985). In that case, the patient testified that only the receptionist of the defendant was present when the patient executed the consent form; the defendant and his receptionist both testified that while neither specifically recalled the circumstances under which the plaintiff executed the consent form, it is the defendant’s practice to be present when the form is signed and to answer any questions regarding its contents. Through discovery, plaintiffs sought to compel the defendant to list the names and addresses of all other patients who signed consent forms for surgery between July 1980andJuly 1981 (or alternatively, for the court to require that the defendant randomly select the names and addresses of a small number of patients who signed such forms). I sustained the defendant’s objections to this discovery because the benefits from the disclosure of the identity of the other patients was not so clearly apparent and substantial as to outweigh the privacy interests of these patients.

Kundus has no relevance to the issues in this litigation because in this litigation the plaintiffs will be presenting the testimony of only those other patients who have voluntarily agreed to testify. No one is asking the court to compel disclosure of patient names.

I do not find merit to the physicians’ claim based on Pa.R.E. 403 that the probative value of the testimony of other patients is outweighed by the danger of unfair prejudice. A jury’s learning that there are other dissatisfied patients should not prevent the jury from fairly addressing the issues raised in the case which the jury is considering. Also, a jury will learn that these witnesses have pending lawsuits against the same defendant-physician only if counsel for the defendant-physician introduces this evidence.

I do not find that there is a danger of confusion of the issues simply because the jury will hear evidence concerning conversations between a defendant-physician and other patients. Through jury instructions, the jury will understand that this evidence is offered only to assist the jury in assessing whether it wishes to accept the testimony of the defendant that he or she always discusses the risks that are the subject of the litigation.

In their briefs, the defendants raise a specter of 11 other former patients presenting testimony that they were not told of various risks, the defendant-doctor separately addressing each of the 11 surgeries and the jury having to make credibility findings for each of the 11 surgeries. This will not happen. Pa.R.E. 403 provides that courts can exclude evidence on the ground that it is cumulative.

III.

The last issue is whether the defendant-physician may respond to testimony of other patients that he or she failed to explain various risks by presenting testimony of “satisfied” patients who will testify that the defendant covered these risks in his or her discussions with them. This testimony is inadmissible for the same reasons that the plaintiffs may not introduce as part of their case in chief the testimony of other patients that the defendant-physician failed to cover these risks in his or her discussions with these former patients. This testimony does not show that the defendant-physician’s conduct has been continuous and systematic; it simply supports a finding that on these given occasions, the defendant-physician acted in this fashion. Consequently, the admissibility of this testimony is governed by the rule of law that the commission of an act cannot be proved by showing the commission of a like act at a different time.

IV.

In making the above rulings, I found to be very persuasive an opinion of Judge Strassburger in Potkul v. Brandy, 145 P.L.J. 612 (1997). This was a cosmetic surgery medical malpractice action in which a physician had performed a number of surgical procedures to combat hair loss on the plaintiff. In response to the plaintiff’s testimony that the defendant-physician did not discuss risks and complications of the procedure, the defendant-physician testified that as a matter of routine he sits down and reviews with every patient every risk and complication listed on his consent forms. Following his testimony, Judge Strassburger permitted the testimony of two other former patients of the defendant-physician that the defendant-physician never discussed with them the informed consent forms or let them know of the risks and complications involved with their procedures.

Following the testimony of these former patients, the defendant-physician sought to present the testimony of other former patients that he had discussed with them the risks and complications appearing on his consent forms. Judge Strassburger did not permit this testimony.

In denying the defendant’s motion for post-trial relief, Judge Strassburger stated that he properly permitted the two other former patients to testify because their testimony “directly rebuts defendant Brandy’s prior testimony regarding his routine of informing patients of all risks of his procedures.” Id. at 613. Judge Strassburger also stated that he properly excluded the testimony of the former patients the defendant-physician sought to introduce because “the fact that defendant Brandy may have discussed risks and complications with some patients is not probative of anything: ‘the law will not consider evidence that a person has done a certain act at a specific time as probative of a contention that he has done a similar act at another time. General Equipment v. Westfield Insurance, 430 Pa. Super. 526, 549, 635 A.2d 173, 185 (1993).’ ” Id. at 614.

For these reasons, I enter the following order of court:

ORDER

On April 24,2003, it is hereby ordered that the rulings made in the opinion which accompanies this order of court will apply to the Lewis litigation and to all other silicone breast implant litigation within the jurisdiction of the coordinating court for silicone implant litigation.

DiNUBILE JR., J.,

April 24, 2003 — I Concur.

CASSIMATIS, J.,

April 24, 2003 — I Concur.

      . In ruling on this issue, I considered the briefs filed by counsel for the litigants in this action and additional briefs filed by Steering Committee counsel for the plaintiffs and for the medical providers.

      .1 granted defendant’s motion to sever so the claims of each plaintiff will be tried separately.

      . In all likelihood, these other patients will be plaintiffs in other lawsuits filed against the defendant-physician.

      . I recognize that at some point testimony purporting to come within Alternative 2 will instead come within Alternative 3 (e.g., “I’m human so I can’t say that something always occurs but our procedure is close to perfect if not perfect.”). Also, testimony of another patient will be permitted if the physician’s testimony combines Alternative 1 with Alternative 3 (e.g., “I remember my conversation with the patient and I told her about these risks. Also, this is what I always do.”).