author: GRUBB KOPRIVA, J.,

text:
    Spalla v. Robbins

      C.P. of Blair County,
    no. 98 GN 4802.

      Craig E. Coleman and Kelly L. Enders, for plaintiffs.

      Jillian P. Robbins, pro se.

      Joseph P Green, for defendant Daniel Robbins.

      Craig R. Shagin, for defendant Sirkka-Lisa Robbins.

      Joseph A. Ricci and Marc T. Levin, for defendant Wadlington Ph.D.

      Ray F. Middleman, for defendant Thomson M.D.

      James M. Home, for defendant PSU.

      Louis Long, for defendant Echemendia Ph.D.

      Charles A. Fitzpatrick III, for defendant Meadows Psychiatric Center.
    October 28, 1999—
   GRUBB KOPRIVA, J.,

This matter comes before the court on defendants’ joint motion for protective order.

At this time, this court will forego a lengthy recitation of the factual procedural and discovery history as it is previously set forth in our opinion of March 19, 1999.

PROCEDURAL HISTORY REGARDING INSTANT JOINT MOTION FOR PROTECTIVE ORDER

On May 10, 1999, the defendants, Dr. Echemendia, the Meadows Psychiatric Center, Dr. Thomson, the Pennsylvania State University, and Dr. Wadlington, filed a motion for protective order to protect the mental health records of Ms. Lilian Robbins. Also on May 10, 1999, the Pennsylvania State University filed a brief in support of the joint motion for protective order. Concurrently, Drs. Echemendia, Thomson and Wadlington, along with the Meadows Psychiatric Center and the Pennsylvania State University, filed a brief in support of their joint motion for protective order.

On May 11, 1999, this court set a date for oral argument for June 22,1999. Defendant, Dr. Wadlington, filed a request for continuance which was granted on June 18, 1999, and the oral argument was rescheduled for September 13, 1999.

On August 24,1999, plaintiffs filed a brief in opposition to defendants’ joint motion for protective order. On September 9, 1999, the defendants, Dr. Wadlington, Dr. Thomson, Dr. Echemendia, the Meadows Psychiatric Center and Pennsylvania State University, filed a reply brief in support of their joint motion for protective order. On September 13,1999, this court conducted an oral argument on defendants’ motion for protective order.

On September 16, 1999, the plaintiffs filed a supplement to their brief in opposition to the defendants’ joint motion for protective order. On September 20,1999, the defendants, the Meadows Psychiatric Center and Dr. Thomson, faxed to this court letters which served as rebuttal to the plaintiffs’ supplemental brief in opposition to defendants’ joint motion for protective order.

On September 22, 1999, the plaintiffs filed a second and third supplement to their brief in opposition to defendants’ joint motion for protective order.

On September 29, 1999, the defendant, Wilbur Wadlington Ph.D., filed a supplemental brief in support of joint motion for defendants’ protective order. On September 30, 1999, this court received telefax communication on behalf of Dr. Thomson adopting the supplemental brief filed by Attorney Ricci on behalf of Dr. Wadlington. Also on September 30, 1999, the Pennsylvania State University, Dr. Echemendia and the Meadows Psychiatric Center filed supplemental briefs in support of the joint motion for protective order.

Having reviewed all of the filings and briefs in this matter and conducted oral argument, we now proceed to disposition.

DISCUSSION

Generally, the defendants argue the mental health records of Jillian Robbins fall under three tiers of protection. The defendants argue the patient’s records are protected under (1) the Mental Health Procedures Act and the Mental Health Manual (found at 50 Pa.C.S. §7101 et seq. and 55 Pennsylvania Code §5100 et seq., respectively), (2) the Pennsylvania Judicial Code (found at 42 Pa.C.S. §5944), and (3) the Pennsylvania Constitution (Article I). This court will deal with each tier of protection separately.

MENTAL HEALTH PROCEDURES ACT AND THE MENTAL HEALTH MANUAL

Initially, we must note the Mental Health Procedures Act, as implemented through the Mental Health Manual regarding confidentiality of mental health records, applies only to the records of persons seeking, receiving or having received mental health services from any facility as defined in section 103 of the Act (50 P.S. §7103). 50 P.S. §7103 specifically states:

“This Act establishes the rights and procedures for all involuntary treatment of mentally ill persons, whether inpatient or outpatient, and for all voluntary inpatient treatment of mentally ill persons. ‘Inpatient treatment’ shall include all treatment that requires full- or part-time residence in a facility. For the purpose of this Act, a ‘facility’ means any mental health establishment, hospital, clinic, institution, center, day care center, base service unit, community mental health center, or part thereof, that provides for diagnosis, treatment, care or rehabilitation of mentally ill persons, whether as outpatients or inpatients.” (emphasis added)

Therefore, this statute does not provide confidentiality protection for any “voluntary outpatient” treatment which has been sought by Ms. Robbins. Defendants strongly argue under Rost v. State Board of Psychology, 659 A.2d 626, 629 (Pa. Commw. 1995) the psychotherapist has a responsibility to protect the confidentiality of the records of a patient. However, we find this argument goes to the duty of a psychotherapist without a court order, and therefore, is inapplicable and moot in the matter at hand because the release is under order of court. At this stage in the proceedings, evidence does not indicate what nature of treatment was provided to Jillian Robbins by the psychiatric defendants. In the event Ms. Robbins’ treatment was on a voluntary outpatient basis, the Mental Health Procedures Act and the Mental Health Manual do not apply. However, even in the event Ms. Robbins is determined to be a member of the target population for protection under the Act, we find the request for protective order fails.

First, defendants argue the executed release obtained by plaintiffs from Jillian Robbins is insufficient under the Mental Health Manual (55 Pennsylvania Code §5100.34(f)). We have reviewed the authorization for release of information as executed by Jillian Robbins on September 8, 1999. (See exhibit B to the supplemental brief of the Pennsylvania State University and Dr. Echemendia in support of the joint motion of defendants for protective order.) Defendants are correct in their assertion this authorization falls short of the statutory requirements. Specifically, the Mental Health Manual indicates the authorization should contain a place to record a verbal consent to the release of information given by a person physically unable to provide a signature and/or a place for the signatures of two responsible persons who witnessed that the person understood the nature of the release and freely gave his or her verbal consent must be present. 55 Pennsylvania Code §5100.34(f)(7). Further, the release did not specifically state the consent is revocable at the written request of the named patient, or at the oral request of the named patient as in paragraph 7 of the Manual (as referenced above).

Even though the release may be defective, 55 Pennsylvania Code §5100.35 governs the release generally of mental health records to the court. It specifically states:

“(b)(1) Whenever a client/patient’s records are subpoenaed or otherwise made subject to discovery proceedings in a court proceeding, other than proceedings authorized by this Act, and the patient/client has not consented or does not consent to release of the records, no records should be released in the absence of an additional order of court. The records officer, or his designee, is to inform the court either in writing or in person that, under statute and regulations, the records are confidential and cannot be released without an order of the court. Neither the records officer nor the facility director has any duty to oppose a subpoena beyond stating to the court that the records are confidential and cannot be released without order of the court; however, nothing in this section shall be construed as authorizing such a court order.”

Therefore, the Mental Health Manual specifically authorizes the release of records to a court in proceedings which are not mental health court proceedings so long as the mental health providers have received a court order that the records shall be released. In fact, the Honorable Charles Brown Jr. ordered Dr. Wadlington to release all mental health records of Jillian Robbins on August 20, 1997 in the underlying criminal matter. Parenthetically, we note no objections or appeals were filed to Judge Brown’s order. Similarly, under this exception to the Act, this court has the authority to release records which would be relevant to the civil action at hand. In summary, the confidentiality protection provided under the Mental Health Manual and the Mental Health Procedures Act is subject to court discretion, even in the absence of a sufficient authorization.

However, as previously mentioned, the defendants do not fall under the protection of the Mental Health Procedures Act and the Mental Health Manual if they provided treatment on a voluntary outpatient basis.

JUDICIARY CODE

The defendants next argue the information is privileged under the Judiciary Code in a manner which is similar to the attomey/client privilege. Plaintiffs respond Ms. Robbins has waived her privilege of confidentiality based on her previous actions coupled with disclosure of her mental health records and her execution of the authorizations.

We have reviewed the transcript from Ms. Robbins’ sentencing hearing held May 22,1998, and find credible evidence of her waiver of confidentiality, as well as her competency to complete that waiver.

Initially, we note Ms. Robbins’ counsel, at the time of sentencing, admits Ms. Robbins had recently been discharged from the Meadows Psychiatric Center.

“In fact, counsel states, I can tell the court at the time she went to the HUB lawn she was acutely suicidal. She had just been recently discharged from the Meadows. For whatever reason the Meadows discharged her, I’ll never know. She was crying out for help.” (Sentencing hearing transcript, p. 22, ll. 21-25.)

Further, at the time of sentencing, Ms. Robbins noted she had been seen by both Drs. Wadlington and Thomson as follows:

“She had also been seeing a psychologist, Wilbur Wadlington, on a regular basis. She was crying out to him for help. She was also seeing psychiatrist Katherine Thomson on a regular basis, and she was crying out to her for help.” (Sentencing hearing transcript, p. 22, l. 25 to p. 23, l. 4.)

All criminal proceedings are a matter of public record. Still further, we have reviewed exhibit E to plaintiffs’ brief in opposition to the defendants’ joint motion for protective order, specifically a videotape of an interview given by Jillian Robbins with WPXI television station in Pittsburgh. In the interview, Ms. Robbins speaks to the reporter regarding her mental health treatment and the symptoms of her mental state surrounding the incident in question.

We also look to the authorizations executed by Ms. Robbins, and we note they do specifically address the purpose for the documents, as well as her understanding of the nature and purpose for the release, the recitation of the fact that her consent is voluntary and subject to revocation at any time. We note no evidence contradicts the fact Ms. Robbins freely executed these documents. Still further, we note plaintiffs’ counsel included a separate sheet in the letter of May 30, 1999, which would have allowed Ms. Robbins to refuse to sign the authorizations granting the law firm of Caroselli, Beachler, McTiernan and Conboy access to her psychological records. Ms. Robbins did not execute the refusal to sign authorizations, but rather executed the authorizations themselves, obtained the witness signature of her roommate, Ms. April Fisher, and returned the authorizations voluntarily. Although the release may be deficient under the Mental Health Procedures Act and Mental Health Manual criteria, it further evidences Ms. Robbins’ waiver of the confidentiality privilege.

The defendants also argue Ms. Robbins was not capable of waiving the confidentiality privilege based on her current psychiatric problems. The sentencing transcript indicates she has multiple diagnosis of borderline personality disorder, post-traumatic stress disorder, disassociative identity disorder (formerly known as multiple personality disorder), and severe depressive episodes. (Sentencing transcript, testimony of Dr. Dougherty, p. 8, l. 25 to p. 9, l. 3.) However, Dr. Dougherty goes on to attest to Ms. Robbins’ competency as follows:

“My opinion is that she understands her rights and is competent to proceed. She is currently on a number of psychotropic and anticonvulsive medications, which have ameliorated many of the problems. She is in contact with reality. She knows who she is, where she is. She knows the various members of the courtroom and their roles, and she has the ability to communicate with her attorney.” (Sentencing transcript, p. 9, ll. 17-23.)

Still further, Dr. Dougherty was asked his opinion as to whether any of her psychiatric disorders were affecting the voluntary nature of her guilty plea on that day, and he specifically stated they did not. (Sentencing transcript, p. 10, ll. 5-6.) He went on to note the medications being taken by Ms. Robbins were helping her to maintain her contact with reality and ameliorate the previously diagnosed problem, and that to a reasonable degree of psychological certainty, she was competent to proceed with her guilty plea. (Trial transcript, p. 10, ll. 7-16; see also, p. 36, ll. 17-23, and p. 27, ll. 14-21.) Still further, Judge Brown, during the sentencing, conducted a colloquy of Ms. Robbins through which the court determined Ms. Robbins was competent to enter the plea agreement. (Sentencing hearing transcript, pp. 12-14.)

This court notes the criminal proceedings for Ms. Robbins resulted in substantial and serious consequences. Her sentencing inflicted restrictions to her liberties and freedoms, which are held of highest value in this country. The proceeding at hand deals with Ms. Robbins’ property, which while highly valued, is held to a slightly lesser standard than criminal proceedings (as seen in the varying burdens of proof between criminal and civil proceedings). Therefore, Judge Brown’s determination of her competence and the testimony of Dr. Dougherty weigh heavily in determining Ms. Robbins’ competence to waive the confidentiality privilege in a civil proceeding.

Still further in regard to waiver, we note the defendants cited the distinction between the cases of Commonwealth v. Santiago, 541 Pa. 188, 662 A.2d 610 (1995) and Commonwealth v. Breakiron, 524 Pa. 282, 571 A.2d 1035 (1990). Specifically, defendants correctly state in Santiago, the psychotherapist/patient privilege was waived by the defendant’s pursuit of an insanity defense. In contrast, in Breakiron, the patient chose not to use reports of the psychotherapist during the testimony by the psychotherapist at his criminal trial, and therefore maintained the privilege. However, Ms. Robbins’ situation is similar to Santiago in that Ms. Robbins did indeed introduce evidence at the time of her sentencing in regard to the Meadows Psychiatric Center, Dr. Wadlington and Dr. Thomson. (Sentencing transcript, pp. 22-23; see also, above.) Taking these factors together, we find there is competent waiver of the psychotherapist/patient privilege on behalf of Ms. Robbins.

CONSTITUTIONAL PROTECTION

Lastly, the defendants argue Ms. Robbins’ mental records are protected under Article I of the Pennsylvania Constitution. Specifically, it appears defendants are referring to Article I, Section 1 regarding the right of privacy. The right to privacy includes two classes of interest: freedom from interference in making of certain important personal decisions; and freedom from disclosure of certain matters which the individual deems so personal that publication adversely affects one’s right to pursuit of life, liberty and happiness. Fischer v. Commonwealth of Pennsylvania, Department of Public Welfare, 116 Pa. Commw. 437, 543 A.2d 177 (1988). Under Pennsylvania law, a patient’s right to confidentiality of psychiatric records is protected by the constitution. Hahnemann University Hospital v. Edgar, C.A. 3 (Pa.), 74 F.3d 456 (1996). However, it is well-known that an individual may waive their rights through conduct or through explicit written waiver. In fact, even an individual who is uneducated and illiterate can validly waive his constitutional rights when he can give a coherent narrative of facts and can otherwise demonstrate necessary intelligence to understand and respond to questions asked of him. Commonwealth v. Tribblett, 242 Pa. Super. 164, 363 A.2d 1212 (1976). In the case of Jillian Robbins, she is obviously literate and intelligent, and was deemed competent at the time of her guilty plea. Therefore, she is also competent to waive her constitutional right to privacy in regard to her psychiatric records. In fact, Ms. Robbins’ sentencing hearing and her written waiver do constitute a voluntary and knowing waiver of her constitutional rights. Therefore, defendants’ argument regarding constitutional protection falls short.

In light of the above opinion, the court will enter the following:

ORDER

And now, October 28, 1999, this matter having come before the court on defendants’ joint motion for protective order, it is hereby ordered, directed and decreed defendants’ joint motion is denied. Jillian Robbins’ psychiatric records are discoverable in this matter.

      . We note in regard to discovery, plaintiffs have failed to comply with Pa.R.C.P. 440 regarding service of discovery to all defendants. Plaintiffs must serve discovery requests on all parties and have previously failed to do so. From this point forward, plaintiffs must comply with Rule 440 or sanctions will issue.


source: Caselaw Access Project

author: SALUS, J.,

license: Public Domain

text:
    SPECS/ATS Inc. v. Uricchio

      C.P. of Montgomery County,
    no. 98-13585.

      Philip Katauskas, for plaintiff.

      Joel Cordis, for appellants.
    December 2, 1998—
   SALUS, J.,

These appeals stem from two orders of this court, dated August 24,1998 and September 14, 1998, in which this court issued a preliminary injunction against Joseph Uricchio, Joseph Morwald, and Integrated Service Solutions Inc., appellants. This injunction enjoined appellants from soliciting business from customers of SPEC/ATS Inc., plaintiff, which pertained to confidential information contained in plaintiff’s purchase orders and contracts existing as of the date of Mr. Uricchio’s resignation on May 18,1998. Appellants raise 11 points of appeal in their 1925(b) concise statement of matters complained of on appeal. These points of appeal, however, can be simplified to two issues. First, appellants contend that this court’s August 24,1998 order was improperly entered because there was no basis for this court to issue a preliminary injunction against appellants. Appellants support this contention by stressing that there is no evidence which demonstrates either that appellants interfered with plaintiff’s business relationships or that plaintiff has suffered the requisite harm. Second, appellants argue that this court’s September 14,1998 order was also improperly entered because the monetary amount of the injunction-security bond set by this court is inadequate and is not supported by the evidence. These issues will be addressed below.

FACTUAL AND PROCEDURAL HISTORY

This case grows out of plaintiff’s allegations that appellants have both misappropriated plaintiff’s proprietary information and test equipment as well as used such information and equipment to their advantage in competing with plaintiff for new business.

Plaintiff is a Pennsylvania corporation which provides technical services to industrial and pharmaceutical companies nationwide. On June 4,1998, plaintiff purchased the assets of American Technical Services Group Inc. Among the assets purchased by plaintiff were Standard Operation Procedures Manuals and Validation Books, both of which contained highly confidential proprietary materials and database information about ATS. Before the time of this purchase, however, Mr. Uricchio and Mr. Morwald became privy and gained access to much of the confidential information contained in these manuals and books as well as to plaintiff’s test equipment during their employ with the company as senior-level corporate employees. Upon their resignation from the company in late May 1998, Mr. Uricchio and Mr. Morwald retained and refused to return to ATS the trade secrets and test equipment now owned by plaintiff. Consequently, plaintiff brought this action in equity to enjoin appellants from continuing its interference with plaintiff’s customer relationships. As a result, this claim set in motion the procedural events set forth below.

On July 17, 1998, plaintiff filed a verified complaint and a motion for a preliminary injunction. Appellants filed its answer with new matter and counterclaim on July 28, 1998.

Counsel for both parties were present for an in camera hearing held before the Honorable Samuel W. Salus II, of this court on August 19,1998. By order dated August 24, 1998, this court granted plaintiff’s motion for a preliminary injunction. This order enjoined appellants from conducting business with any of ATS’s customers who existed before the resignation of Mr. Uricchio and Mr. Morwald. This order also directed appellants to place in an escrow account any monies received from all of appellants’ other clients until a resolution of this case is reached.

By order dated September 14,1998, this court denied appellants’ motion for reconsideration of the August 24, 1998 order and also directed plaintiff to file with the prothonotary an injunction-security bond in the amount of $7,500. Consequently, appellants appealed both of these orders to the Superior Court of Pennsylvania on September 23, 1998.

DISCUSSION

In determining the propriety of the entry of an order granting a preliminary injunction, the question to address is whether there were any reasonable grounds which justify its issuance. Fischer v. Department of Public Welfare, 497 Pa. 267, 270, 439 A.2d 1172, 1174 (1982). An appellant has a very heavy burden to overcome; an order granting or denying a preliminary injunction “will not be interfered with upon appellate review in the absence of a plain abuse of discretion by the court below.” Safe guard Mutual Insurance Co. v. Williams, 463 Pa. 567, 578, 345 A.2d 664, 670 (1975). In fact, an appellate court may reverse a lower court’s order “only if there are no grounds to support the decree or if the rule of law was palpably erroneous or misapplied.” Chmura v. Deegan, 398 Pa. Super. 532, 535, 581 A.2d 592, 593 (1990). (citations omitted) All that is reviewed is whether “the party seeking the [preliminary injunction produced sufficient evidence to] show that substantial legal questions must be resolved to determine the rights of the respective parties.” Palladinetti v. Penn Distributors Inc., 695 A.2d 855, 863 n.11 (Pa. Super. 1997). (citations omitted) This court will thus evaluate appellants’ arguments against this limited standard of review.

Appellants argue that this court had no basis for entering a preliminary junction against them. Appellants argue that plaintiff did not fully demonstrate that appellants actually interfered with plaintiff’s contracts. They argue that the exhibit offered by plaintiff to show this interference is not proper evidence because it was not accurate and because it was not presented to this court until after the completion of the in camera hearing. Moreover, appellants argue that they are permitted to compete with the plaintiff for the business of the customers identified in this court’s August 24, 1998 order because these customers were customers of the appellants before the appellants were employed by ATS, because these customers are well known in the industry, and because the contracts did not involve confidential information since they concerned commonly known time-and-material concepts developed by Mr. Uricchio prior to his employment with ATS. Consequently, appellants argue that plaintiff has not suffered any immediate or irreparable harm.

This court’s issuance of a preliminary injunction against appellants is based on evidence which demonstrates that appellants have misappropriated plaintiff’s proprietary information in a manner that constitutes unfair competition with plaintiff’s business. This court found persuasive the evidence offered by plaintiff to support its claim. As former employees of ATS, appellants were privy to confidential information which pertained to, inter alia, ATS’s customer development strategies, its pricing methods, and its customer needs and requirements. They also gained access to ATS’s test equipment now owned by plaintiff. As such, appellants have improperly used this information to interfere with plaintiff’s customer contracts. For example, Mr. Morwald scheduled himself for five jobs with clients of ATS on the day that he resigned from the company. Mr. Morwald proceeded to perform work for one of these jobs — removal of autoclave sterilizers at Bristol-Myers-Squibb’s Pennington, New Jersey office — notwithstanding that he was no longer employed by ATS. Moreover, Mr. Uricchio is knowledgeable about ATS’s system and software such that he may interfere with plaintiff’s current and prospective customer relationships because he has retained possession of some of the plaintiff’s validation books and SOP manuals. Such actions constitute evidence sufficient to show that appellants are unfairly competing with plaintiff’s business. These actions constitute an interference with plaintiff’s customer contracts because appellants are no longer employed by ATS, the company which secured these clients. The plaintiff has in no way benefited from the appellant’s departure from ATS’s employ. Rather, these actions constitute the type of harm that is necessary for this court to issue a preliminary injunction.

Appellants also argue that the monetary amount of the preliminary injunction-security bond set by this court by its order of September 14, 1998 is not supported by the evidence. Appellants contend that this monetary amount is inadequate, in light of the damages which appellants will sustain from this court’s August 24, 1998 order, which enjoined appellants from proceeding forward on over 80 contracts. These arguments are without merit.

“The question of the proper amount of a bond for a prehminary injunction is within the discretion of the hearing court.” Broad & Locust Associates v. Locust-Broad Realty Co., 318 Pa. Super. 38, 44, 464 A.2d 506, 509 (1983). The purpose of the bond requirement is “merely to insure a ready source for payment of damages if due.” Juniata Foods Inc. v. Mifflin County Development Authority, 87 Pa. Commw. 127, 131, 486 A.2d 1035, 1037 (1985). Notwithstanding this purpose, however, the bond requirement is not set to cover all damages but only those that are reasonably foreseeable. Christo v. Tuscany Inc., 368 Pa. Super. 9, 20, 533 A.2d 461, 467 (1987); see also, Greene County Citizens United by Cumpston v. Greene County Solid Waste Authority, 161 Pa. Commw. 330, 337, 636 A.2d 1278, 1281 (1994). The lower court must determine the amount of the bond after balancing the equities involved on a case by case basis. Id. As the Christo court further explained:

“For instance, [plaintiff] may be unable to provide sufficient security where damages could be great, or where plaintiff is impecunious, yet the court may determine, based upon the balance of the equities, that the injunction should nevertheless issue. Consequently, a relatively low bond in light of possible damages may be set.” Christo, 368 Pa. Super. at 20-21, 533 A.2d at 467.

Thus, the bond amount set here by this court is proper if it approximates the amount of damages that are reasonably foreseeable in this matter.

The bond amount of $7,500 set by this court is adequate and supported by the evidence. This court was acting entirely within its discretion in fixing the bond at $7,500. This court had a duty to act quickly in ruling on the plaintiff’s motion for a preliminary injunction to prevent immediate and irreparable injury to plaintiff’s business. See Christo, 368 Pa. Super. 21, 533 A.2d at 467. Thus, this court’s primary focus was on whether to grant the relief requested, not on what potential damages might be sustained by appellants if the injunction is later determined to be erroneously issued. Id. Further, this court does not find convincing appellants’ argument that the bond amount is inadequate, in light of their failure to provide this court with any affidavits which document the precise nature of the damages they allege they will sustain as a result of this preliminary injunction. $7,500 was the maximum amount that this court could set without placing an onerous burden on the plaintiff; an amount set above $10,000 would have been too extensive. Thus, the bond amount of $7,500 set by this court is proper because it is supported by the evidence and is a reasonable approximation of foreseeable damages.

Appellant also contends that the nature of the hearing and the lack of notice as to its purpose point to reasons why this court’s August 24, 1998 order should be reversed. They argue that they were informed that a conference was scheduled only to assess the status of the case and to determine the possibility of settlement. Appellants argue that they were not informed that the hearing was scheduled to rule on plaintiff’s motion. Further, appellants argue that the hearing was actually not a hearing, but only a conference of counsel with this court because no testimony was taken and no affidavits were submitted. These arguments are not persuasive.

The purpose of an evidentiary hearing held pursuant to a party’s injunction request is to develop “a factual basis for the requested relief.” Boyd v. Cooper, 269 Pa. Super. 594, 597, 410 A.2d 860, 862 (1979). Both parties must be “given the opportunity to fully cross-examine witnesses and to present relevant testimony.” Ogontz Controls Co. v. Pirkle, 329 Pa. Super. 8, 13, 477 A.2d 876, 879 (1984). (emphasis supplied) Here, this court stresses that appellants never made any request to offer evidence or to present testimony prior to this court’s decision regarding plaintiff’s motion for a preliminary injunction, notwithstanding that this court’s hearing presented appellants with such an opportunity. Moreover, appellants may not now complain that an in camera proceeding does not suffice for purposes of presenting evidence and testimony because their counsel could have requested a continuance to have this matter heard in the courtroom. Appellants also may not argue that they were not prepared for the hearing because they were without notice since this court made it clear to the parties that a hearing was scheduled for August 24, 1998. Also, appellants have long known that an injunction hearing would occur soon since the plaintiff filed a motion for a preliminary injunction on June 17,1998. Thus, this court does not understand how appellants can argue that they were not aware that a preliminary injunction hearing was to be held on August 19, 1998, in light of the instances in which appellants were afforded notice prior to that time. Further, appellants are foreclosed from questioning the informal nature of this court’s hearing only after they have been prejudiced by the injunction order because appellants’ counsel agreed to and failed to express dissatisfaction on August 19,1998 with the nature of the proceedings which transpired at that time. In sum, the hearing in chambers was sufficient for both parties because it provided a factual basis for this court’s issuance of a preliminary injunction.

Finally, appellants raise a couple of specific arguments which have not yet been addressed by this court in this opinion. Appellants argue that plaintiff could not be entitled to an injunction to protect trade secrets because plaintiff allegedly admitted in its deposition that it owned nothing secret. Appellants also argue that this court’s August 24,1998 order is punitive. First, they argue that the order is overbroad in requiring appellants to escrow 100 percent of the proceeds of contracts obtained by appellants subsequent to the date of Mr. Uricchio’s resignation. Second, they contend that the order is based on an alleged preconceived opinion held by this court concerning appellants’ business ethics that is inconsistent with appellants’ legal right to compete with the plaintiff. These arguments also must fail.

Appellants’ argument that plaintiff contravened its cause of action through admissions that it owned nothing secret is pure bunk. This argument is totally inconsistent with the thrust of plaintiff’s claim and the evidence offered in support of this cause of action. Appellants fail to cite in its concise statement which page of the plaintiff’s deposition contains this admission. Moreover, this court did not locate any such statement after it reviewed the court files regarding this matter. Thus, this court will not further address this argument because a review of the case file reveals that it has no basis.

Lastly, this court’s order of August 24, 1998 is not a punitive measure designed to penalize appellants, but rather a necessary step taken to preserve the legal rights of the parties until a resolution of this case is reached. Plaintiff has presented to this court credible evidence that appellants have interfered with plaintiff’s relationship with its customers. Such interference constitutes the type of immediate and irreparable injury contemplated by Rule 1531. See Chmura, 398 Pa. Super. at 537, 581 A.2d at 594. Consequently, it is within this court’s discretion to order appellants to escrow 100 percent of the proceeds from the contracts in question because plaintiff has demonstrated that appellants’ interference with these contracts through its acquisition of plaintiff’s trade secrets and test equipment constitutes unfair competition. This court escrowed the full amount of the proceeds in order to preserve these fees when appellants had begun performance on the contracts in question here. Thus, the 100 percent escrow requirement is the natural and probable consequence of appellants’ interference with plaintiff’s contracts and customers. Appellants’ connection to these contracts arises only from their breach of the fiduciary duty that it owed to plaintiff. Therefore, this court’s order of August 24, 1998 was not based on the alleged comments made by this court in chambers criticizing appellants’ business ethics. Rather, the issuance of the preliminary injunction was based on the real harm suffered by plaintiff.

CONCLUSION

For the foregoing reasons, the Superior Court should affirm this court’s orders, dated August 24, 1998 and September 14, 1998.

      . Rather, appellants argue that plaintiff has benefited from the departure of Mr. Uricchio from plaintiff’s employ. Appellants argue that plaintiff reduced its asset purchase price at closing by $450,000 as a direct consequence of Mr. Uricchio’s departure from the company.

      . See plaintiff’s complaint, paragraphs 51-53.

      . See id., paragraphs 42-43.

      . These actions also violate the agreement for sale and purchase of assets entered into between the parties on April 22,1998. Section 14.01 of the agreement contains a noncompetition clause which states that ATS shall refrain from carrying on any business similar to the services provided by the plaintiff for a period of five years from the closing date. Here, appellants violate this clause because they are taking away plaintiff’s business through their misappropriation of plaintiff’s property.

      . See order, dated August 6, 1998, from court administrator John Dunmire.

      . See generally, verified complaint, dated June 17, 1998.


author: BLACK, J.,

text:
    Superka v. Valley Forge Life Insurance Co.

      C.P. of Lehigh County,
    no. 98-C-1962.

      Richard J. Orloski, for plaintiff.

      Jason K. Cohen, for defendant Valley Forge Life Ins. Co.

      Georgine A. Olexa, for defendant Hoffrichter.
    November 29, 1999—
   BLACK, J.,

Plaintiff, John M. Superka, seeks to recover the proceeds of a $250,000 life insurance policy purchased by his late wife, Patricia Superka, from defendant Valley Forge Life Insurance Company. Mrs. Superka died of leukemia within the two-year contestability period. After her death Valley Forge cancelled the policy and refunded the premium payments on the ground that her health at the time the policy was delivered was not as represented in the application for insurance.

Plaintiff’s complaint is against both Valley Forge and its soliciting agent, Donald S. Hoffrichter. The claims against Valley Forge are set forth in five counts, the first two for breach of contract and the remaining three for vicarious liability based on alleged wrongful conduct of Hoffrichter. The claims against Hoffrichter are contained in three counts for negligence, detrimental reliance, and negligent misrepresentation.

Before the court is the motion of Valley Forge for summary judgment in its favor on all counts of the complaint. Valley Forge contends that there was no breach of contract because the company properly cancelled the insurance policy upon discovering that Mrs. Superka had been diagnosed with leukemia before the policy was delivered to her. Valley Forge also contends that it is not liable vicariously for the purported wrongful acts of Hoffrichter.

The Pennsylvania Rules of Civil Procedure provide for the entry of summary judgment “if after completion of discovery relevant to the motion,... an adverse party who will bear the burden of proof at trial has failed to produce evidence of facts essential to the cause of action or defense which in a jury trial would require the issue to be presented to a jury.” Pa.R.C.P. 1035.2(2).

In order to defeat a motion for summary judgment, the non-moving party must show by depositions, answers to interrogatories, admissions or affidavits that a genuine issue of material fact exists for trial. Overly v. Kass, 382 Pa. Super. 108, 111-12, 554 A.2d 970, 972 (1989). The non-moving party may not rely on controverted allegations of the pleadings. Phaff v. Gerner, 451 Pa. 146, 149, 303 A.2d 826, 829 (1973). Moreover, “unsupported assertions of conclusory allegations cannot create genuine issues of material fact.” McCain v. Pennbank, 379 Pa. Super. 313, 318-19, 549 A.2d 1311, 1313-14 (1988).

On the other hand, the record must be viewed in the light most favorable to the non-moving party, ánd all doubts must be resolved against the party seeking summary judgment. Ertel v. Patriot-News Co., 544 Pa. 93, 98-99, 674 A.2d 1038, 1041 (1996). Summary judgment is to be granted only “where it is clear and free from doubt.” Sebelin v. Yamaha Motor Corp., 705 A.2d 904, 907 (Pa. Super. 1998). Furthermore, summary judgment may not be entered on the basis of testimony by affidavit or deposition of the moving party or a witness on such party’s behalf, even if the testimony is uncontradicted, since the credibility of witnesses must be determined by the fact-finder. See note to Pa.R.C.P. 1035.2, citing Nanty-Glo Borough v. American Surety Co., 309 Pa. 236, 163 A. 523 (1932), and Penn Center House Inc. v. Hoffman, 520 Pa. 171, 553 A.2d 900 (1989).

Applying the foregoing principles, we conclude that Valley Forge is not entitled to summary judgment on the breach of contract claims in Counts I and II of the complaint, but that judgment should be entered in favor of Valley Forge as a matter of law on the vicarious liability claims in Counts III, IV and V.

FACTS

Hoffrichter was engaged in business as a financial advisor. In the course of his business he often assisted his clients in obtaining life insurance. He was an authorized soliciting agent for a number of life insurance companies, including Valley Forge. His agency contract with Valley Forge authorized him to “solicit and process . . . applications . . ., to collect initial premiums and to deliver policies and premium receipts.” (Plaintiff’s complaint, exhibit “A,” soliciting agent commission agreement.) However, Hoffrichter had no authority to bind Valley Forge to coverage, and he had no authority to alter any of the policy terms. Id.

Hoffrichter met Mr. and Mrs. Superka through a direct mail solicitation that he had sent to targeted zip codes advertising his services. Mr. and Mrs. Superka responded to this solicitation in January 1996. Mr. Superka was “eager” to meet with Hoffrichter in order to “learn more about investment” and also “to re-examine and look at our insurance policies.” (Deposition of John M. Superka, 1/7/99, at 21.) In the ensuing months, Hoffrichter met with Superkas on several occasions to discuss both their current insurance portfolios as well their desired insurance goals. (Superka dep. at 23.) At these meetings Hoffrichter reviewed with Mr. and Mrs. Superka the terms and prices of various insurance policies and arranged for both of them to sign life insurance applications for policies with several companies. Hoffrichter submitted some of these applications on their behalf.

At one of their meetings, Hoffrichter suggested to Mrs. Superka that she should apply to Valley Forge for life insurance. On June 14, 1996, Hoffrichter assisted Mrs. Superka in completing an application to Valley Forge for a $250,000 policy on her life. The policy was intended to replace Mrs. Superka’s existing $250,000 policy with First Colony. Mr. Superka offered to submit the initial premium with the application, but Hoffrichter told him that this was not necessary. (Superka dep. at 41-42.) Hoffrichter’s advice was that they should hold off on sending in the initial premium payment until Valley Forge approved and issued the policy. Only when that occurred would the existing First Colony policy be canceled. According to Hoffrichter, if the Valley Forge premium was sent in before the First Colony policy was canceled, then two premiums would be tied up to achieve the intended coverage of $250,000.

The language of the Valley Forge application immediately preceding Mrs. Superka’s signature stated:

“[I]f no premium has been given to the agent with this application, insurance will not take effect until the application is approved and accepted by the company . . . and the policy is delivered while the health of each person proposed for insurance and other conditions remain as described in this application and at least... the first premium has been paid in full.” (Defendant’s motion for summary judgment, exhibit “H,” Valley Forge insurance application.) The application also provided that, if accepted by the company, the application and the policy would “constitute the entire insurance contract.” Id.

Shortly thereafter, Valley Forge approved the application, and on July 1,1996, issued a policy of insurance on Mrs. Superka’s life in the amount of $250,000. The policy had a two-year contestability provision. Attached to the policy was the application for insurance that Mrs. Superka had signed and completed with Hoffrichter’s assistance. The policy itself specifically provided that “[n]o one has the right to change any part of this policy or to waive any of its provisions unless the change is approved in writing on the policy by one of our officers.” (Defendant’s motion for summary judgment, exhibit “I,” Valley Forge insurance policy at section 3.12.)

On July 2, 1996, Mrs. Superka visited a doctor with complaints of congestion and was diagnosed with chronic myelogenous leukemia. As of this date, Mr. and Mrs. Superka had not yet made any premium payment to Valley Forge. Within a few days after this diagnosis, Mr. or Mrs. Superka notified Hoffrichter of Mrs. Superka’s medical problem by telephone. Approximately two weeks later Mr. Superka mailed a check dated July 11,1996 to Hoffrichter for the initial premium payment. Included with the check was a note dated June 14,1996, in which Mr. Superka asked for Hoffrichter’s advice regarding cancellation of the existing First Colony policy on Mrs. Superka’s life. The note stated:

“Enclosed is the payment requested made out to CNA for Pat’s term insurance coverage. In light of the recent situation I’m not sure I want to or should cancel First Colony at this point in time. Please advise me. Thanks! ” (Defendant’s motion for summary judgment, exhibit “J,” Superka note to Hoffrichter.) (emphasis in original)

The record is not clear as to what advice Hoffrichter gave in response to this request. However, what is clear is that Mr. and Mrs. Superka decided to keep the First Colony policy in place, and at the same time to continue to pursue coverage from Valley Forge. Towards that end, on July 14,1996, Hoffrichter submitted an addendum to the Valley Forge insurance application indicating that Mrs. Superka would no longer be replacing an existing policy. Neither Hoffrichter nor the Superkas informed Valley Forge of Mrs. Superka’s recent diagnosis. Valley Forge received Mr. Superka’s check for the initial premium payment from Hoffrichter on or about July 18, 1996. At some point in time Hoffrichter received the Valley Forge policy from Valley Forge and then delivered it to Mrs. Superka.

Mr. Superka continued to make the premium payments on the Valley Forge policy until Mrs. Superka’s death on October 2, 1997. Since her death occurred within the two-year contestability period, Valley Forge began an investigation into the circumstances surrounding the issuance of the policy. Following this investigation, on March 13,1998, Valley Forge sent a notice to Mr. Superka stating:

“Due to the change in the health of the proposed insured prior to the delivery of the policy and the first premium paid... this policy is void as of its intended effective date.” (Defendant’s motion for summary judgment, exhibit “N,” Valley Forge letter to Superka.) Valley Forge then returned to Mr. Superka all the premiums that had been paid on the policy.

DISCUSSION

I. The Breach of Contract Claims

The rules for interpreting an insurance contract are well-established.

“In interpreting an insurance contract, we must ascertain the intent of the parties as manifested by the language of the written agreement. When the policy language is clear and unambiguous, we will give affect to the language of the contract.” Kromer v. Reliance Insurance Co., 450 Pa. Super. 631, 642-43, 677 A.2d 1224, 1230 (1996) (quoting Paylor v. Hartford Insurance Co., 536 Pa. 583, 586, 640 A.2d 1234, 1235 (1994)), allocatur granted, 546 Pa. 655, 684 A.2d 557 (1996), aff’d, 548 Pa. 209, 696 A.2d 152 (1997). An insured is presumed to know the terms of the insurance contract he or she enters into. See Blue Ridge Textile Co. v. Travelers Indemnity Co., 407 Pa. 463, 181 A.2d 295 (1962) (affirming judgment on en banc opinion of Northampton County Common Pleas Court at 27 D.&C.2d 55 (1962)). When the contract clearly and unambiguously sets forth a condition precedent to the effectiveness of the policy, the insured’s failure to comply with the condition renders the policy void. Id.

The insurance application submitted by Mrs. Superka, which was expressly incorporated into the policy itself, sets forth three conditions precedent to the policy taking effect: (1) the home office must approve and accept the policy, (2) the policy must be delivered while the applicant’s health remains as described in the application and (3) the initial premium payment must be paid. In its motion for summary judgment, Valley Forge argues that the policy is void because Mrs. Superka’s health changed before the payment of her first premium. However, although it is undisputed that the first premium payment was not made until after the July 2, 1996 diagnosis of leukemia, the language of the application does not support summary judgment on this basis. The relevant date regarding Mrs. Superka’s health is not the date the initial premium payment was made, but rather the date when the policy of insurance was delivered to her.

Clearly, from July 2, 1996, and thereafter, Mrs. Superka’s health was not as described in the application. However, the record is not sufficient to establish, for summary judgment purposes, the date when delivery of the policy occurred. Valley Forge refers to the deposition testimony of Hoffrichter in which he states that he sent the policy to the Superkas on July 11, 1996. However, under Nanty-Glo and its progeny, Valley Forge may not rely on Hoffrichter’s deposition testimony to sustain its motion for summary judgment. Mr. Superka, the non-moving party, is entitled to have Hoffrichter’s credibility assessed by a jury. In a supplemental brief, Valley Forge attempts to satisfy the Nanty-Glo rule by referring to a policy receipt allegedly signed by Mrs. Superka on July 11, 1996, purporting to acknowledge delivery of the policy on that date. However, this document, which is attached as an exhibit to the supplemental brief, is not self-authenticating, and Valley Forge has not produced any competent evidence by affidavit, deposition or otherwise to establish that the document is what it purports to be. In the absence of authenticating evidence, we may not consider this document.

Consequently, an issue of fact remains as to when delivery of the policy occurred. In view of this factual issue, summary judgment cannot be granted on the breach of contract claims in Counts I and II of the complaint.

II. The Claims of Vicarious Liability

In Counts III, IV and V of the complaint, Mrs. Superka asserts claims of vicarious liability against Valley Forge based on the conduct of its agent, Hoffrichter. The theories of liability in these counts overlap to some extent. The claims all arise from the advice allegedly given by Hoffrichter to Mr. and Mrs. Superka regarding the initial premium payment. It is clear from the averments in these counts and the depositions and accompanying exhibits that Mrs. Superka cannot prevail on any of these theories.

Count III alleges that Hoffrichter was negligent “in failing to secure the initial payment until July 18,1996.” (Complaint, ¶24.) According to the complaint, Mr. Superka was ready, willing and able to make payment of the premium on June 14,1996, when the application was completed, but was told by Hoffrichter that payment was not necessary at that time. (Complaint, ¶6.) Mr. Superka asserts that Hoffrichter was negligent in giving such advice, and that Valley Forge is liable for Hoffrichter’s negligence under principles of respondeat superior. However, under the circumstances of this case, such a theory is not viable.

As Mr. Superka acknowledges in his brief, Hoffrichter was acting partly as agent for Valley Forge and partly as agent for Mr. and Mrs. Superka in the transaction. In certain respects, i.e., soliciting and processing the application, collecting the initial premium, and delivering the policy, Hoffrichter was expressly authorized to act for Valley Forge. However, in other respects such as advising Mr. and Mrs. Superka which policies to apply for, when to cancel the First Colony policy, and when to tender the premium payment to Valley Forge, he was acting on behalf of the Superkas, since the purpose and rationale of this advice was to serve the best interests of the Superkas. Mr. Superka himself testified in his deposition that he considered Hoffrichter their insurance and financial advisor, and that he viewed Hoffrichter as acting as their broker and agent. (Superka dep. at 76-77.)

Mr. Superka now contends that since Valley Forge authorized Hoffrichter to collect the initial premium payment, any advice Hoffrichter gave regarding the premium payment was in his capacity as agent for Valley Forge. The conclusion does not follow from the premise. The mere authorization to collect a premium does not carry with it authorization to give advice to an insured as to when it is in the insured’s best interests to submit the premium payment. In giving such advice, Hoffrichter was acting not for Valley Forge, but for the Superkas, in accordance with his advisory relationship with them. Therefore, Count III must be dismissed.

Count IV uses language of promissory estoppel in stating that Hoffrichter “specifically informed plaintiff that said insurance coverage would be in effect immediately, and the plaintiff need not tender the check at that time (June 14, 1996)” (complaint, ¶30), and that plaintiff relied on this representation of coverage. This theory likewise cannot be sustained because the application completed by Mrs. Superka expressly stated that the insurance would not take effect until the premium was paid; and the insurance policy itself, which incorporated this provision, expressly stated that no provision could be waived except by a change approved in writing on the policy by a company officer. Therefore, even if it were to be established at trial that Hoffrichter had made such a representation of coverage, Mrs. Superka is presumed to know of the limits of his authority because of the explicit language in the application and policy. See Sabino v. Junio, 441 Pa. 222, 225, 272 A.2d 508, 510 (1971) (employee of car rental company leased vehicle with knowledge it would be driven by a minor; minor knew that employee had no authority to rent to a minor; held rental company and its insurer not estopped from denying coverage); see also, Restatement (Second) of Agency §166 (“A person with notice of a limitation of an agent’s authority cannot subject the principal to liability upon a transaction with the agent if he should know that the agent is acting improperly.”).

Moreover, there is no factual support for this theory in the record. Mr. Superka in his deposition did not claim that there had been a misrepresentation of coverage. He testified that the reason the premium was not paid initially was that the Valley Forge policy was intended to replace his wife’s existing First Colony policy, and that on Hoffrichter’s advice he did not want to tie up two premiums when he and his wife wanted coverage under only one $250,000 policy. It was Mrs. Superka’s original intention to cancel the First Colony policy as soon as Valley Forge accepted her application for the replacement insurance. (Superka dep. at 57.) Thus, according to Mr. Superka’s own deposition, the reason he did not immediately send in the premium payment on June 14, 1996 was not because of assurances by Hoffrichter that there was immediate coverage without this payment, but rather because he wanted to avoid having two premiums tied up for the desired coverage.

Count V is similar to Count IV in that it is predicated on an allegation that Hoffrichter “supplied false information for plaintiff’s guidance” (complaint, ¶36), and that plaintiff reasonably relied on this information by delaying the initial premium payment. Again, even if it were to be established at trial that Hoffrichter was negligent in informing Mr. and Mrs. Superka that there would be immediate coverage without payment of the premium, Mrs. Superka could not have reasonably relied on this information since it was directly contradicted by the language in the policy application. Furthermore, as noted above, Mr. Superka’s deposition provides a different rationale for the payment delay, i.e., a desire to avoid having two premiums tied up for the desired coverage.

For these reasons, Counts III, IV and V of the complaint must be dismissed.

ORDER

Now, November 29, 1999, in consideration of the motion of defendant Valley Forge Life Insurance Company for summary judgment and the plaintiff’s response thereto, after oral argument and for the reasons set forth in the accompanying opinion, it is ordered that said motion is granted in part and denied in part as follows:

(1) With respect to Counts III, IV and V of the plaintiff’s complaint, the motion for summary judgment is granted, and judgment is hereby entered in favor of defendant Valley Forge Life Insurance Company and against plaintiff on those counts of the complaint.

(2) With respect to Counts I and II of the complaint, the motion for summary judgment is denied.

      . We have examined the record in the light most favorable to plaintiff and have given plaintiff the benefit of all reasonable inferences. See Electronic Laboratory Supply Co. v. Cullen, 712 A.2d 304 (Pa. Super. 1998).

      . There is a factual dispute as to whether Mr. Superka offered to pay the premium at this time. Hoffrichter maintains that Mr. Superka did not make such an offer. Mr. Superka claims that he did. For purposes of this summary judgment motion, we must accept Mr. Superka’s version of what occurred and make all reasonable inferences in his favor. See Electronic Laboratory Supply v. Cullen, supra.

      . CNA is the parent company of Valley Forge.

      . Mr. Superka also contends that Hoffrichter waived the health condition on behalf of Valley Forge. This argument is not persuasive. Clearly, Hoffrichter had no authority to do so. Nor did he have apparent authority, since the policy expressly stated that its provisions could be altered only in writing on the policy by an officer of the company. Thus, Mrs. Superka was on notice of the limitation of Hoffrichter’s authority and is bound by that limitation. See Sabino v. Junio, 441 Pa. 222, 225, 272 A.2d 508, 510 (1971); see also, Restatement (Second) of Agency §166.
      Mr. Superka states that Hoffrichter’s knowledge of his wife’s medical condition should be imputed to Valley Forge, and that Valley Forge’s issuance of the policy with this knowledge constituted a waiver of the health provision. However, where an insurance broker represents both the insured and the insurer in certain respects, as here, the concept of imputed knowledge cuts both ways. Just as Mr. Superka argues that Hoffrichter’s knowledge should be imputed to Valley Forge, it could just as easily be argued that Hoffrichter’s knowledge of his lack of authority to waive any provisions of the policy should be imputed to Mrs. Superka. Where an agent serves in a dual role, representing multiple parties, the concept of imputed knowledge is of limited applicability. See Youngblood v. Prudential Insurance Co. of America, 109 Pa. Super. 20, 165 A. 666 (1933) (insurance agent’s knowledge of condition not imputed to insurer when the agent was merely a soliciting agent and the policy provided that its terms could not be altered without approval of an officer of the company).

      . The cases describing the relationship between an insured and an insurance agent are mixed. In Taylor v. Crowe, 444 Pa. 471, 282 A.2d 682 (1971), the Supreme Court held that where the agent, not the insured, was the one who actually selected the insurance company, the agent was a broker and therefore the agent of the insured. See also, Kairys v. Aetna Casualty and Surety Company, 314 Pa. Super. 502, 461 A.2d 269 (1983). On the other hand, in Sands v. Granite Mutual Insurance Co., 232 Pa. Super. 70, 331 A.2d 711 (1974), the insurance agent was'found to have authority to bind the company. The reality of these situations is that, depending on the particular facts, an agent may be acting on behalf of both parties. In some respects he may act for the insured, and in other respects he may act for the company.


text:
    McCurdy v. Township of Upper Merion

      C.P. of Montgomery County,
    no. 95-03242.

      Arthur L. Jenkins Jr., for plaintiff.

      Lillian E. Benedict, for appellant.
    November 16, 1998—
   SALUS, J.,

These appeals stem from two orders, dated July 31,1998 and August 4,1998, in which this court awarded delay damages to Sandra McCurdy, reaffirmed the $130,000 verdict for property damages it entered in favor of plaintiff on April 22,1998, and denied the post-trial motions filed by the Township of Upper Merion to set aside this verdict. Appellant raises 10 points of appeal in its 1925(b) concise statement of matters complained of on the appeal. These points of appeal, however, emphasize three contentions. First, appellant argues that it is immune from liability in this action because appellant is not the owner of the easement. Notwithstanding its previous actions and assertions of ownership, appellant argues that it is still absolved from liability because governmental immunity is a nonwaivable defense. Second, appellant contends that this court erred in not concluding that it was the plaintiff’s duty to ascertain the true owner of the easement. Third, appellant argues that this court erred in not finding either the plaintiff or Parmer Scott, a previous owner of the plaintiff’s home, liable on the basis of contributory negligence for some of the damages sustained to plaintiff’s property. These points of appeal are addressed below.

FACTUAL AND PROCEDURAL HISTORY

These appeals arise out of an equity action brought by plaintiff to recover property damages caused by a poorly designed and installed water drainage pipe owned by appellant.

Plaintiff filed a complaint in equity on February 14, 1995, alleging that appellant failed to maintain a storm sewer easement situated on plaintiff’s property. Appellant filed its answer on April 18,1995. In paragraph 7 of its answer, appellant admitted that the fee simple absolute interest of the plaintiff in her real estate “is subject to an easement of a 48-inch reinforced concrete storm sewer which easement is owned and maintained and has been assumed by the Township of Upper Merion.”

This court held a bench trial on March 9 and 10,1998. By its opinion, filed April 27,1998, this court concluded that appellant was liable to plaintiff for the property damages sustained to her home because appellant took actions after it received notice of the problem which indicated that appellant was the owner of the easement. Therefore, this court also issued a decree on this date which awarded damages to plaintiff in the amount of $130,000.

On May 1,1998, the plaintiff filed a motion with this court requesting delay damages pursuant to Pa.R.C.P. 238. On May 7, 1998, appellant filed post-trial motions requesting this court to enter judgment in appellant’s favor, or alternatively, to reduce judgment or order a new trial.

By its order dated July 31, 1998, this court awarded delay damages to plaintiff in the amount of $28,449.33. This order also granted plaintiff a sum of $33.92 for each day after August 31, 1998 in which appellant failed to pay plaintiff for the delay damages. By its order dated August 4, 1998, this court denied appellant’s post-trial motions and reaffirmed its verdict. Finally, on August 11, 1998, plaintiff reduced to judgment the equity and delay damages previously awarded to her by this court through its April 27, 1998 decree and July 31, 1998 order.

This matter is properly before the Commonwealth Court of Pennsylvania because both appeals were filed within the 30-day time frame mandated by R.A.P. 903. The July 31,1998 order was appealed on September 10, 1998, but is properly before the court because this appeal date was within 30 days of the date on which this order was entered on the docket, August 11, 1998. The August 4, 1998 order was appealed on September 11, 1998, but is properly before the court because this appeal date was within 30 days of the date on which this order was entered on the docket, August 27, 1998.

DISCUSSION

Appellant is liable to plaintiff for the subsidence sustained to her home because appellant is the owner of the sewer easement which caused this property damage. Appellant argues that this court erred when it precluded appellant from either amending its answer or presenting evidence to show that appellant did not own the sewer easement because such a showing would have absolved appellant from liability to the plaintiff under the defense of governmental immunity. Appellant contends that this showing could have been made even at the beginning of the trial because governmental immunity is a defense which can never be waived. As discussed infra, these arguments are without merit.

The actions taken by appellant both prior to and during the course of this litigation provide firm support to this court’s finding that appellant is the owner of the sewer easement. Appellant is estopped from denying ownership of the easement because it took actions prior to this litigation which represented strong indicia of ownership. For example, appellant responded to plaintiff’s July 22, 1993 letter first apprising appellant of the damage done to plaintiff’s property by contracting with a pipe company to conduct investigations of the area. By letter dated January 14,1994, appellant informed plaintiff that it did not discern the causes for the settlement of the plaintiff’s property, but expressed concern because of the proximity of the pipe to the plaintiff’s garage. Consequently, appellant engaged a soil specialist from its consulting engineering firm to further inspect the site. By letter dated March 18, 1994, SMC Environmental Services Group reported to plaintiff that the cracks in the walls of the plaintiff’s garage “appear to be the result of long-term settlement of the pipe trench backfill.” This letter also suggested to plaintiff that the sewer easement was not the cause of the property damage because it concluded that “the 48-inch pipe was in a good, serviceable condition on the date of inspection.” These inspections undertaken by appellant are inconsistent with its later assertion denying ownership of the easement. Further, appellant also removed debris from the easement area shortly after plaintiff first complained of the property damage. Thus, this court correctly held that appellant was estopped from denying ownership of the easement because these actions indicated that it maintained at least de facto control over the property in question.

This court also correctly found that appellant was the owner of the easement because appellant made such an admission in its answer to plaintiff’s complaint. In paragraph 7 of its answer, appellant admitted that the plaintiff’s real property “is subject to an easement of a 48-inch reinforced concrete storm sewer which easement is owned and maintained and has been assumed by the Township of Upper Merion.” The Supreme Court of Pennsylvania held that admissions made by a party in its pleadings constitute a judicial admission which cannot be later contradicted by that party. Tops Apparel Manufacturing Co. Inc. v. Rothman, 430 Pa. 583, 587, 244 A.2d 436, 438 (1968). A principal element of a judicial admission is that the fact admitted must work to the advantage of the admitting party. Jewelcor Jewelers & Distributors Inc. v. Corr, 373 Pa. Super. 536, 542, 542 A.2d 72, 76 (1988). Here, appellant made the admission of ownership to its advantage. As stated previously, appellant ordered inspections of plaintiff’s property. These inspections indicated to plaintiff that appellant was the owner of the easement. Thus, appellant admitted ownership of the easement in its answer to the plaintiff’s complaint because it needed to justify and explain the actions it took in response to the plaintiff’s July 22, 1993 letter. By the time of trial in March 1998, however, appellant attempted to deny ownership because such an admission now played to their disadvantage. Appellant now sought to avoid liability to the plaintiff under the cloak of governmental immunity through its attempts to deny ownership of the easement at the beginning of trial. However, this court correctly held appellant estopped from denying ownership of the sewer easement because such conduct by appellant consisted of the kind of double dealing against which this rule of evidence was designed to protect. Therefore, appellant may not later assert that it is not the owner of the easement because it is bound by its admission to paragraph 7 of plaintiff’s complaint.

Most important, appellant is estopped from denying ownership because appellant’s actions prior to and during the course of this litigation induced the plaintiff to conclude that appellant was the owner of the easement. As previously stated, appellant maintained ownership of the easement through both its inspections of the plaintiff’s property and its admission to ownership in its answer. These actions created an atmosphere of ownership reasonably relied upon by plaintiff. For this reason, no obligation was imposed upon plaintiff to ascertain whether appellant was the owner of the easement because appellant’s actions indicated to plaintiff that there was no need to further pursue this issue. Further, appellant was estopped from denying ownership because it would be unfair to now burden the plaintiff with bringing a cause of action against a different party this late in the proceedings when appellant’s actions sufficiently indicated to both plaintiff and this court that it was the owner of the easement. Notwithstanding that governmental immunity can never be waived, this court correctly found that this defense was not in issue because appellant’s actions prior to and during trial precluded it from later denying ownership of the easement.

As the owner of the easement, appellant is liable to plaintiff because it falls within the local agency exception to governmental immunity provided in 8542(b)(5). First, plaintiff showed that the sewer easement presented a dangerous condition to her property. The defective drainage pipe to the sewer easement presented the dangerous condition to her property because it failed to properly contain the flow of water. Moreover, the dangerous condition created a foreseeable risk of the kind of injury which was incurred by plaintiff because plaintiff’s causation expert, Dr. Robert Traver, explained that the excess water which flowed outside the drainage pipe was the cause of subsidence and loss of support to plaintiff’s premises. Second, the local agency also gained actual notice of the dangerous condition within a sufficient time to have taken measures to protect plaintiff against the dangerous condition. Appellant became aware of the property damage to plaintiff’s home and land almost two years before the filing of plaintiff’s complaint. Appellant, however, failed to correctly diagnose the cause of the problem during these inspections. Consequently, appellant failed to take the measures necessary to prevent further damage to plaintiff’s property. For these reasons, this court properly found that appellant is liable to plaintiff for the damages sustained to her property under the local agency exception to the defense of governmental immunity.

This court also correctly concluded that neither Parmer Scott nor the plaintiff were contributorily negligent in this case because appellant was the sole cause of the damages sustained to plaintiff’s home. Appellant argues that this court erred when it failed to find that Parmer Scott, the initial owner of plaintiff’s property and residence, was liable for part of the damages because he constructed a garage over the sewer easement. Thus, it argues that judgment against appellant should have been reduced to account for the contributory negligence of Mr. Scott because the construction of the garage over part of the sewer easement contributed to plaintiff’s property damage. This argument must fail. Mr. Scott requested permission to build a garage when he applied for a building permit on March 10, 1956. Appellant granted this permission to Mr. Scott when it issued a building permit to him on March 20, 1956. That this construction may have contributed to the property damage to plaintiff’s home underscores only the negligence of appellant in issuing the permit, not the negligence of Mr. Scott in building the garage. Further, appellant could have decided against issuing the permit to Mr. Scott because it should have foreseen the potential problems presented to plaintiff’s premises by the construction of the garage, given its proximity to the sewer easement. Thus, only appellant can be found liable for any damages which may have been caused by the construction of the garage over the sewer easement because it was appellant who issued a permit to Mr. Scott.

Appellant also argues that this court erred when it provided relief to plaintiff under the doctrine of equitable estoppel because this doctrine was not raised by plaintiff as a basis for relief. In her complaint in equity, the plaintiff asked this court for “all general relief and necessary relief required by the circumstances.” This request constitutes a prayer for general relief. See Lower Frederick Township v. Clemmer, 518 Pa. 313, 332, 543 A.2d 502, 512 (1988). Under this prayer, a “chancellor in equity may grant any relief that is consistent with the theory and purpose of the action.” Id. Here, vindicating plaintiff’s claim for “all general relief’ called for this court to award plaintiff the funds necessary to repair the damage done to her garage and property from the sewer easement. Consequently, after holding a trial to determine the merits of plaintiff’s prayer, this court concluded that plaintiff should be awarded $130,000. The doctrine of equitable estoppel, however, did not provide the legal basis for plaintiff’s recovery. Rather, the appellant’s actions — its tardy and negligent response to plaintiff’s complaints and its inadequate attention to matters for which they assumed responsibility — constituted a de facto taking of plaintiff’s property requiring just compensation. The appellant’s actions and failure to resolve the drainage problem deprived the plaintiff of the proper value of her home and land. David Honig, a structural engineer, established that the value of the house and land was in excess of $130,000 if both were in perfect condition. Thus, this court correctly awarded this sum of property damages to plaintiff under the doctrine of inverse condemnation because such relief is in agreement with the theory of plaintiff’s action.

Appellant also contends that this court erred when it granted permission to appellant’s expert to inspect the plaintiff’s residence only at the conclusion of the first day of trial. Thus, appellant argues that it was prejudiced by this late access to inspect plaintiff’s property because such access did not provide appellant’s expert with either sufficient lighting or the time and equipment necessary for the expert to prepare an update to his report. This argument is not tenable because appellant failed to make any concerted effort to inspect the property before the first day of trial. Appellant had three years to determine who would serve as its expert and when this expert would inspect plaintiff’s property because this case was filed in February 1995. That the lighting was poor and appellant’s expert was not prepared are circumstances which were not within either the plaintiff’s or this court’s control. This court correctly found that appellant — rather than the plaintiff — should assume the burden of its inability to secure its expert until shortly before the trial date.

Finally, appellant asserts that plaintiff should not be entitled to relief because she failed to prove her damages with reasonable certainty. Specifically, appellant argues that plaintiff failed to demonstrate the extent of the damage to her residence before appellant received notice of the condition of the sewer easement, for which the appellant could have no liability, and the extent of the damage to her property after receiving this notice. Appellant’s attempt to apportion the damages according to when appellant received notice of the condition of the plaintiff’s property is rejected by this court. As stated previously, appellant assumed ownership of the easement through both its actions and admissions. Thus, appellant is liable for the damages which occurred to plaintiff’s property before it received notice from plaintiff because it is the owner of the easement and thus is liable for all damages which stem from the subsidence. Moreover, this court concluded that plaintiff proved her damages with reasonable certainty based on its acceptance of the expert testimony offered by David Honig, a structural engineer, and Christopher Meszaros, a licensed real estate appraiser and broker. This testimony made it clear that the most efficient avenue for repair would be to demolish and rebuild the home. Dr. Honig opined that the estimated cost of this repair was in excess of $130,000. Consequently, this court properly found appellant liable to plaintiff for this sum of money.

CONCLUSION

For these reasons, the Commonwealth Court of Pennsylvania should affirm this court’s orders of July 31,1998 and August 4, 1998.

      . See defendant’s answer, paragraph 7.

      . See plaintiff’s exhibits P-1 and P-2.

      . This rule concerning judicial admissions can be traced to Willis v. Kane, 2 Grant 60, 63 (Pa. 1853), in which the Pennsylvania Supreme Court stated:
      “Where a man alleges a fact in a court of justice, for his advantage, he shall not be allowed to contradict it afterwards. It is against good morals to permit such double dealing in the administration of justice.” Id.

      . See N.T., pp. 2-9.

      . This court notes that it would also be impossible for plaintiff to bring a cause of action against another party, in light of the three years which had transpired from the filing of the complaint to the time of trial in March 1998. The statute of limitations for causes of action brought to recover damages for injuries to personal property is two years. 42 Pa.C.S. §5524(3). Thus, this court precluded appellant from denying ownership of the easement because it was necessary to preserve plaintiff’s cause of action.

      . Appellant argues that this court erred when it awarded plaintiff delay damages pursuant to 238 because it is immune from liability. As stated previously, appellant’s clear assertions of ownership preclude it from later asserting that is not liable to plaintiff under governmental immunity. In light of its conclusion that appellant is the owner of the easement, this court finds that appellant is not absolved from liability because it falls within the exception to governmental immunity provided in 42 Pa.C.S. §8542(b)(5).

      . Appellant also argues that plaintiff was negligent in neglecting to properly maintain the rainwater gutters and spouts on the residence and the slope of the grading immediately adjacent to the residence. Appellant’s argument rests on the expert testimony of Bryan Dillman, which stated that defective water spouting caused the water to run along the plaintiff’s foundation and thus contributed to the plaintiff’s property damages. See N.T., p. 167. This argument is not persuasive because this court did not find this expert testimony credible, in light of that offered by plaintiff’s experts. See N.T., pp. 46, 50-51, 59.

      . See N.T., p. 74.


author: THOMSON, P.J.,

text:
    Cumberland Development and Marketing Inc. v. Lake Adventure Community Association Inc.
    C.P. of Pike County,
    no. 15-1997 Equity.

      Vincent S. Cimini, for plaintiff.

      Janet K. Catina, for defendant.
    October 13, 1998—
   THOMSON, P.J.,

This case involves an analysis of the recently enacted Uniform Planned Community Act which went into effect on February 2, 1997. The issue before the court is whether the amendment procedure dictated by the UPCA or the one contained in the original declaration should be utilized in this matter. We find that the amendment procedure employed in the original declaration, which runs contrary to the UPCA, should prevail due to the reverse priority rule of the UPCA. As a result, the amendments recorded April 7, 1997 are valid.

FACTS

The material facts are adopted from the joint stipulation of facts and exhibits submitted by the parties. The court has also reviewed the pleadings, documents, and matters of record to determine other relevant facts in this case.

(1) Plaintiff is Cumberland Development and Marketing Inc., a corporation duly organized and existing under the laws of Pennsylvania with a principal place of business located in Milford, Pennsylvania.

(2) Defendant is Lake Adventure Community Association Inc., a Pennsylvania nonprofit corporation having a principal place of business in Milford, Pennsylvania.

(3) Defendant owns and administers the common areas and recreational facilities within the recreational development known as Lake Adventure.

(4) The Lake Adventure community is a recreational campground development created by the original developer, Lake Adventure Inc., consisting of various parcels of real estate located in Dingman Township, Pike County, Pennsylvania.

(5) On or about February 25,1977, the original developer, Lake Adventure Inc., recorded a declaration of restrictive covenants relative to Lake Adventure which reserved certain rights for the declarant who, at the time, was Lake Adventure Inc. (the original declaration). See exhibit 1.

(6) On or about December 13,1986, the original declaration was amended (the first amendment). These amendments did not affect declarant’s rights as set forth in the original declaration.

(7) After a series of mergers in late 1985 and early 1986, Lake Adventure Inc. became Eagle Lake Corporation.

(8) On or about August 15, 1991, Eagle Lake Corp. defaulted on its loan from First Eastern Bank N.A.

(9) On or about the same date, First Eastern Bank accepted from Eagle Lake Corp. a deed in lieu of foreclosure to certain and various lots owned by the corporation in Lake Adventure.

(10) The aforementioned deed in lieu of foreclosure granted to First Eastern Bank, its successors and assigns, all the rights and privileges of the grantor. See exhibits 3,4.

(11) On or about January 13,1993, First Eastern Bank conveyed to plaintiff by deed certain lots located in Lake Adventure. See exhibit. 2.

(12) On or about May 13, 1993, First Eastern Bank executed and forwarded to plaintiff a document entitled Master Assignment of Developer’s Rights. See exhibit 3.

(13) On November 15, 1995, in a declaratory action, Cumberland Development and Marketing Inc. v. Lake Adventure Community Association, no. 784-CV-1994 (Pike Cty., November 15, 1995), this court ordered and decreed that plaintiff is the declarant under the original declaration and first amendment and, therefore, is entitled to the rights, privileges and duties afforded to the declarant. See exhibit 4.

(14) The original declaration, in particular article XIV, contains a procedure relating to amendments of declarations. That section provides:

“This declaration may be amended by the affirmative vote of two-thirds of the total number of votes held by all members of the association entitled to vote and the recording of an amendment to this declaration duly executed by (a) the requisite number of such members required to effect such an amendment; or (b) by the association, in which case, such amendment shall have attached to it a copy of the resolution of the board attesting to the affirmative action of the requisite number of members to effect such amendment, certified by the secretary of the association.”

(15) Pursuant to article XIV of the original declaration, Lake Adventure commenced a process of amending the declaration.

(16) Members voted by ballot on the amendment of the declaration beginning August 31, 1996 and ending January 31, 1997.

(17) On February 1,1997, the results of the vote were tabulated with defendant receiving a sufficient number of votes to amend the declaration.

(18) Defendant recorded the amended declaration in the office of the Pike County Recorder of Deeds on April 7, 1997. See exhibit 5.

(19) On or about December 18, 1996, the governor signed Act 180 of 1996 known as the Uniform Planned Community Act. See exhibit 6.

(20) The effective date of the UPCA is February 2, 1997.

(21) Relevant sections of the UPCA read as follows:

(a) Section 5102. Applicability

“(b) Retroactivity. — Except as provided in subsection (c), sections 5105, 5106, 5107, 5203 (relating to construction and validity of declaration and bylaws), 5204 (relating to description of units), 5218,5219 (relating to amendment of declaration), 5223 (relating to merger or consolidation of planned community), 5302(a)(1) through (6) and (11) through (15) (relating to power of unit owners’ association), 5311 (relating to tort and contract liability), 5315 (relating to lien for assessments), 5316 (relating to association records), 5407 (relating to resales of units) and 5412 (relating to effect of violations on rights of action) and section 5103 (relating to definitions), to the extent necessary in construing any of those sections, apply to all planned communities created in this Commonwealth before the effective date of this subpart; but those sections apply only with respect to events and circumstances occurring after the effective date of this subpart and do not invalidate existing provisions of the declaration, bylaws or plats and plans of those planned communities.” (emphasis added)

(b) Section 5219. Amendment of declaration

“(a) Number of votes required.—

“(1) The declaration, including the plats and plans, may be amended only by vote of at least:

“(i) 67 percent of the association;
“(ii) a larger percentage of the association specified in the declaration; or
“(in) a smaller percentage of the association specified in the declaration if all units are restricted exclusively to nonresidential use.
“(c) Recording amendment. — Every amendment to the declaration must be recorded in every county in which any portion of the planned community is located in the same records as are maintained for the recording of deeds of real property and shall be indexed in the name of the planned community in both the grantor and grantee index. An amendment is effective only upon recording.
“(d) When unanimous consent or declarant joinder required. — Except to the extent expressly permitted or required by other provisions of this subpart, without unanimous consent of all unit owners affected, no amendment may create or increase special declarant rights, alter the terms or provisions governing the completion or conveyance or lease of common facilities or increase the number of units or change the boundaries of any unit, the common expense liability or voting strength in the association allocated to a unit or the uses to which any unit or the uses to which any unit is restricted. In addition, no declaration provision pursuant to which any special declarant rights have been reserved to a declarant shall be amended without the express written joinder of the declarant in such amendment.”

(22) Plaintiff has not provided Lake Adventure with express written joinder with regard to Lake Adventure’s proposed amendments and revisions.

DISCUSSION

Plaintiff seeks to enjoin defendant’s attempt to amend the original declaration which provides plaintiff with certain rights and privileges as the declarant. Plaintiff argues that the newly enacted UPCA and its amendment procedure apply because defendant did not record their amendments until April 7, 1997, two months after the UPCA went into effect. The UPCA, in particular section 5219, would require defendant to obtain express written joinder from plaintiff in order to amend plaintiff’s rights under the original declaration. Since defendant never obtained such joinder from plaintiff, plaintiff argues that the amendments are void.

In contrast, defendant asserts that the UPCA does not apply to the proposed amendments since the vote occurred prior to the effective date of the UPCA, and recording the amendments was simply a ministerial act. Nevertheless, if the court rules that the UPCA applies, defendant maintains that the existing provisions of the original declaration, in particular article XIV, trump the UPCA pursuant to the reverse priority rule. See 68 Pa.C.S. §5102. Therefore, defendant argues, the amendments are valid.

The threshold question the court must determine is whether the UPCA applies. Although the UPCA governs planned communities created after its effective date (February 2, 1997), certain sections of the Act, including section 5219, apply retroactively to pre-existing or old planned communities, with two limitations. 68 Pa.C.S. §5102(b). First, the UPCA only applies retroactively with respect to events and circumstances occurring after the effective date of the UPCA (“new events rule”). Id. Second, the UPCA shall not invalidate existing provisions of the declaration, bylaws, or plats and plans of the old planned community (“reverse priority rule”). Id. Therefore, if the relevant events and circumstances fit within both rules: (1) the new events rule And (2) the reverse priority rule, section 5219 of the UPCA, will apply retroactively to the old planned community, i.e., Lake Adventure.

I. The New Events Rule

The first of two limitations on the UPCA applying retroactively is the new events rule. The new events rule requires that the events and circumstances occurring prior to the effective date of the Act be judged under prior law (the existing provisions of the declarations, bylaws, or plots and plans of the old planned community), not under the UPCA. Id. However, if the events and circumstances occur after the effective date of the UPCA, the UPCA applies. Id.

At issue in this case is whether the amendment was fully enacted before or after the UPCA went into effect. To determine when the amendment was enacted, we must look to article XIV of the original declaration. Article XIV requires two events occur in order to amend a declarant’s rights: (1) two-thirds of the association members entitled to vote must vote in favor of the amendment, and (2) the amendment must be recorded. See article XIV of the original declaration. (Finding of fact no. 14.)

Plaintiff argues that both requirements must be satisfied before the amendments are controlling. Although the vote was held prior to the effective date of the UPCA, the recording occurred afterward. Therefore, the UPCA is applicable. Defendant contends that most of the events in the amendment process took place prior to the effective date of the UPCA and the recording of the amendment is nothing more than a ministerial act. Hence, the UPCA does not apply.

The court concludes that the new events rule has been satisfied in this case. Although the vote on the amendments occurred prior to the effective date of the UPCA, the recording did not. Without the recording, the amendments are ineffective. Since the recording of the amendments did not occur until April 7,1997, the amendments themselves did not go into effect until that date, thereby establishing a material event after the UPCA went into effect. The court does not consider the recording of the amendments to be a ministerial act; rather, the recording, is a necessary element in causing the amendments to become operative. Accordingly, the UPCA applies pursuant to the new events rule.

II. The Reverse Priority Rule

Now that we’ve determined that the UPCA applies through the new events rule, we turn to whether the reverse priority rule has been satisfied. The reverse priority rule dictates that if a conflict exists between the UPCA and the prior law (the existing provisions of the declarations, bylaws, or plots and plans of the old planned community), the UPCA shall yield to the prior law and will not invalidate it. 68 Pa.C.S. §5102(b). Therefore, the reverse priority rule places the original declaration of the old planned community in a position senior to the UPCA when the two laws conflict.

Clearly, article XIV of the original declaration and section 5219 of the UPCA conflict. Article XIV requires two steps to amend the declarant’s rights: (1) two-thirds of the association members entitled to vote must vote in favor of the amendment, and (2) the amendment must be recorded. In contrast, section 5219 of the UPCA requires three steps to amend the declarant’s rights: (1) 67 percent of the association members must vote in favor of the amendment, (2) the amendment must be recorded, and (3) the association must receive the express written approval from the declarant. 68 Pa.C.S. §5219(d). The last requirement under the UPCA clearly conflicts with article XIV.

The essential question, however, is not whether the UPCA conflicts with article XIV but whether the UPCA invalidates article XIV. Plaintiff insists that section 5219(d) of the UPCA does not invalidate article XIV but only adds an element to the amendment process. Defendant counters that this added element invalidates article XIV because it essentially creates a veto power in the declarant which did not exist under article XIV. We agree with the defendant. By establishing this third element of the amendment process, the UPCA diminishes rights held by the defendant and gives plaintiff new rights which it never enjoyed before the enactment of the UPCA, thereby invalidating article XIV.

Prior to the UPCA, defendant could have amended plaintiff’s rights by adhering to the voting and recording requirements of article XIV. Now, however, adhering to the requirements of article XIV would not be sufficient to amend the plaintiff’s rights under the UPCA. According to the criteria set forth in section 5219(d), article XIV, essentially, has no legal effect in cases where the defendant seeks to amend the declarant’s rights. The lack of binding force or legal effect in article XTV as caused by section 5219(d) of the UPCA, forces us to find that the UPCA invalidates article XIV in cases where the association wishes to amend the declarant’s rights. Therefore, the reverse priority rule mandates that article XIV take priority over section 5219 of the UPCA.

As stated earlier, both the new events rule and the reverse priority rule must be satisfied in order for the UPCA to apply retroactively to the proposed amendments. Since the reverse priority rule was not fulfilled, the UPCA cannot apply retroactively to the case at bar.

Having determined that the UPCA does not apply, there was no need for the defendant to obtain the express written joinder of the plaintiff before amending the declarant’s rights. Defendant has met the procedural requirements for amendments outlined in article XIV of the original declaration. Therefore, the amendments recorded April 7, 1997 are valid.

CONCLUSION

For the foregoing reasons, we find that article XIV of the original declaration (relating to amendment of the declaration) has priority over section 5219(d) of the UPCA because of the reverse priority rule of the UPCA. Therefore, the amendments are valid. An appropriate decree follows.

DECREE NISI

And now October 13,1998, upon consideration of the foregoing- case, briefs submitted by the parties, and argument of counsel, it is the decree of this court that the subject amendments passed on February 1,1997 and recorded April 7, 1997 are valid.

Furthermore, the prothonotary is directed to notify the attorneys of record of the filing of this adjudication and, if post-trial motions are not filed within 10 days after such notice in accordance with Pa.R.C.P. 227.1, to enter the decree nisi, on praecipe, as the final decree in accordance with Pa.R.C.P. 227.4.

      . 68 Pa.C.S. §5101 et seq.

      . The defendant appealed this court’s November 15, 1995 decision to the Pennsylvania Superior Court which transferred the action to the Pennsylvania Commonwealth Court. The Commonwealth Court affirmed our order and decree. Defendant then filed a petition for allowance of appeal to the Pennsylvania Supreme Court and the matter is currently before that court.

      . 68 Pa.C.S. §§5101 and 5102(a).