author: MINORA, J.,

text:
    Beecham v. American Life and Casualty Insurance Company

      Kimberly D. Borland, for plaintiffs.

      Mark H. Scoblionko, for defendant.
    January 17, 2003
   MINORA, J.,

This matter comes before the court by way of a motion for summary judgment filed by American Life and Casualty Insurance Company. Plaintiffs William and Dorothy Beecham initiated this action to recover compensatory and punitive damages allegedly incurred by them as a result of American’s conduct. In short, the Beechams claim that American did not notify them that it was terminating the employment of its agent, Patrick J. Idaspe, and had American done so, the Beechams would not have continued to deal with Mr. Idaspe. While American admits that it did not notify the Beechams of Mr. Idaspe’s termination, American’s motion for summary judgment asserts that it had no legal duty to do so. At issue then, is whether any genuine issue of material fact exists.

As each party has submitted its brief and oral arguments were heard by this court on August 20, 2002, this matter is now ripe for disposition. For the reasons discussed below, we find that genuine issues of material fact exist, and therefore, defendant is not entitled to judgment as a matter of law. Accordingly, defendant’s motion for summary judgment is denied.

FACTUAL HISTORY

On or about March 31, 1993, American entered into an agent’s contract with Mr. Patrick J. Idaspe. As an independent contractor, Mr. Idaspe was to sell life insurance contracts and annuity policies which were underwritten by American. The Commonwealth of Pennsylvania issued Mr. Idaspe an agent’s license on June 27,1994; that license reflected Mr. Idaspe’s authority to act as an agent on behalf of American.

Mr. Idaspe invited the Beechams to attend one of his seminars; however the Beechams forgot about the seminar and did not attend. Subsequently, in September 1994, Mr. Idaspe and the Beechams mutually agreed to a meeting at the Beechams’ home which lasted approximately three to four hours. During his visit, Mr. Idaspe told the Beechams about annuity contracts offered by American. In October 1994, the Beechams purchased an annuity contract from Mr. Idaspe for a single premium charge of $176,243. It should be noted that the Beechams bought this policy from Mr. Idaspe without calling American or asking Mr. Idaspe for any references.

At some point, American discovered that Mr. Idaspe had had problems with another company, Beneficial Standard, where he made and used fake company letterhead. Consequently, American notified Mr. Idaspe, via a letter dated June 12, 1995, that his contract would be terminated, effective June 27, 1995. During this time period, Jack D. Aiken, an insurance wholesaler who facilitated the contractual relationship between American and Mr. Idaspe, wrote a letter to American and suggested that Mr. Idapse’s business be placed on a watch list.

In late 1995, after his termination, Mr. Idapse advised the Beechams to cancel the American annuity policy and transfer those funds to another product underwritten by another company; the Beechams followed Mr. Idaspe’s advice. At the request of the Beechams, American canceled the annuity policy and issued a check to the Beechams in the amount of $176,933, the amount in the annuity less the penalty for an early withdrawal.

For some time thereafter, the Beechams received periodic interest statements from an organization named Equity Service Company. After several months of not receiving these interest statements, the Beechams telephoned Mr. Idaspe at his home. Subsequently, the Beechams learned that Mr. Idaspe had taken his own life and that the proceeds from the old American annuity policy were lost.

The Beechams allege that despite its knowledge of fraud investigations involving Mr. Idaspe, American did not inform its policyholders, namely the Beechams, of Mr. Idaspe’s termination or possible fraudulent conduct. Therefore, the Beechams assert that American is liable for not informing them that Mr. Idaspe had been terminated; the Beechams claim that they would not have given him their money nor followed his advice had they known of his termination.

Consequently, the Beechams filed a complaint against American on March 4,1999 seeking relief under several theories. The claims of negligence and violation of the unfair insurance practices act were dismissed by an order of this court dated September 2, 1999, thereby sustaining certain preliminary objections of American. The claims of common-law fraud and deceit, violation of the Unfair Trade Practices and Consumer Protection Law, breach of fiduciary duty and punitive damages remain pending against American.

After discovery was conducted, American, on April 1, 2002, has filed the present motion for summary judgment.

DISCUSSION

I. Standard of Review

Before examining the instant matter, we must first set forth the standard of review for summary judgment. Pennsylvania Rule of Civil Procedure 1035.2 governs the appropriateness of summary judgment:

“After the relevant pleadings are closed, but within such time as not to unreasonably delay trial, any party may move for summary judgment in whole or in part as a matter of law
“(1) whenever there is no genuine issue of any material fact as to a necessary element of the cause of action or defense which could be established by additional discovery or expert report, or
“(2) if, after the completion of discovery relevant to the motion, including the production of expert reports, 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 issues to be submitted to a jury.” Pa.R.C.P. 1035.2.

In other words, once the pleadings are closed, a party may move for summary judgment in two situations: first, when there is no genuine issue of fact that may be established through additional discovery, or second, if, after the completion of discovery, the party bearing the burden of proof has failed to produce evidence of the essential facts that would warrant the issues to be submitted to a jury. Pa.R.C.P. 1035.2; Fazio v. Fegley Oil Co. Inc., 714 A.2d 510, 512 (Pa. Commw. 1998). Further, under the revised rules, a court may grant summary judgment when it is clear and free from doubt that such judgment is appropriate as a matter of law. Boyer v. Walker, 714 A.2d 458, 459 (Pa. Super. 1998); Cappelli v. York Operating Co. Inc., 711 A.2d 481, 483 (Pa. Super 1998) (en banc).

In any event, when determining whether to grant a motion for summary judgment, the court must view all of the evidence included in the record in a light most favorable to the non-moving party; this includes any reasonable inferences that may be drawn from the evidence in the record. Hess v. Fuellgraf Electric Co., 350 Pa. Super. 235, 237-38, 504 A.2d 332, 333-34 (1986), quoting Schacter v. Albert, 212 Pa. Super. 58, 62, 239 A.2d 841, 843 (1968). Sebelin v. Yamaha Motor Corp., USA, 705 A.2d 904, 907 (Pa. Super, 1998). The moving party has the burden of demonstrating that there is no genuine issue of material fact. Hess, 350 Pa. Super. at 237, 504 A.2d at 333-34 (1986) quoting Schacter, 212 Pa. Super. at 62, 239 A.2d at 843 (1968).

Even in a case where a genuine issue of material fact exists, Rule 1035.3(a) requires that “the adverse party may not rest upon the mere allegations or denials of the pleadings but must file a response within 30 days after service of the motion identifying” either genuine issues of fact which should be submitted to the jury or essential evidence contained in the record which the moving party claims does not exist. Pa.R.C.P. 1035.3(a); Henninger v. State Farm Insurance Co., 719 A.2d 1074, 1076 (Pa. Super. 1998). When a moving party properly supports its motion for summary judgment with corroborating evidence, the adverse party cannot rely on its pleadings; within 30 days of service of the motion, the non-moving party must identify specific evidence contained within their depositions, answers to interrogatories, admissions or affidavits which supports its assertion that there is a genuine issue of material fact. Henninger, 719 A.2d at 1076 (Pa. Super. 1998); Sovich v. Shaughnessy, 705 A.2d 942, 944 (Pa. Commw. 1998) citing Marks v. Tasman, 527 Pa. 132, 135, 589 A.2d. 205, 206, (1991).Henninger (1991).

II. Defendant’s Motion for Summary Judgment

American makes several arguments in support of its motion for summary judgment, however, below we will discuss only those most pertinent to the counts of the complaint which are currently at issue. American claims that, with respect to their claim of common-law fraud and deceit, the Beechams have not pled any facts sufficient to support the claim that American’s failure to disclose the termination of Mr. Idaspe was intentional or fraudulent. While paragraph 50 of the complaint alleges that American’s behavior was “deceptive,” American contends that that conclusory statement alone does not support the Beechams’ claim of common-law fraud and deception. American further argues that no potential evidence would support such allegations.

In Count V of the complaint, the Beechams charge American with breach of fiduciary duty. American argues that Pennsylvania case law specifically holds that no common-law fiduciary responsibility exists between an insurance company and its insured. American admits that in certain contexts, such as those involving the policy’s provisions, a statutory bad faith action may exist; however, American argues that the Beechams are asserting a tort claim, as opposed to a claim under the insurance contract, and thus such claim should be dismissed as it is not proper under Pennsylvania law.

American explains that in order to obtain relief on a claim for violation of the Unfair Trade Practices and Consumer Protection Law (UTPCPL), one must demonstrate misfeasance, rather than nonfeasance, the latter of which is not actionable. American goes on to instruct that misfeasance includes fraud or intentional misconduct, which they assert, do not exist in the matter at hand, as the common-law elements of fraud cannot be proven.

In response to the Beechams’ claim for punitive damages, American instructs that if, in a particular situation, no cause of action for compensatory damages exists, then there can be no claim for punitive damages; American asserts that no cause of action for compensatory damages exists, and consequently the Beechams’ claim for punitive damages should be dismissed. American also submits that there was no egregious or outrageous behavior in the instant matter, and therefore punitive damages are not merited.

III. Plaintiff’s Response to Defendant’s Motion for Summary Judgment

The Beechams cite case law stating that false representation may be accomplished through either words, conduct, or the absence thereof, their argument suggests that American’s failure to disclose Mr. Idaspe’s termination can be construed as intentional misrepresentation. The Beechams also claim that further investigation may provide additional evidence of common-law fraud and deception.

The Beechams appear to recognize American’s case law finding no fiduciary duty between an insurance company and its insured. The Beechams rest their argument on the distinction between a relationship involving an insurance company and its insured and the one involving the Beechams and American, wherein the Beechams placed their money in an account to be held by American. Based on that distinction, the Beechams claim that they were owed a fiduciary duty, and American’s actions, or inactions, consitituted a breach of said duty.

The Beechams argue the American’s failure to disclose information which is pertinent to the dealings between the two parties would, and in fact did, cause a likelihood of confusion or misunderstanding, and such failure is sufficient to bring a claim under the UTPCPL. Without acknowledging the veracity of American’s argument requiring the demonstration of the common-law elements of fraud in order to recover under the UTPCPL, the Beechams refer to their previous argument that those elements are present in the current record and that further investigation may produce additional evidence as to American’s alleged fraud. Further, the Beechams assert that American’s decision not to inform them of Mr. Idaspe’s termination and their findings upon subsequent investigation of his business dealings may even amount to intentional misfeasance.

While the Beechams agree with American’s statement of the law concerning the required existence of an action for compensatory damages in order to prevail on a punitive damages claim, they argue that there are, in fact, claims for compensatory damages contained in the common-law fraud and deceit, unfair trade practices and consumer protection law and breach of fiduciary duty counts of the complaint. The Beechams assert that each of those counts alleges reckless indifference, which is conduct for which punitive damages may be awarded.

IV. Analysis

In the interest of completeness, we will address the first three arguments made in American’s motion for summary judgment. These arguments have not yet been addressed, nor will they be addressed hereinafter, however we deem it necessary to provide an explanation as to the deletion of said arguments from this discussion. American’s first three arguments deal with ordinary legal duty, legal cause and damages for alleged negligent conduct, respectively. In September 1999, this court dismissed the Beechams’ claim for negligence. Therefore, as these three arguments sound in defense to a negligence claim which has been dismissed, we need not discuss them on the merits.

The elements of fraud include a misrepresentation, a fraudulent utterance thereof, an intention that the recipient will be induced to act, justifiable reliance by the recipient and damage to the recipient as a proximate result. If the misrepresentation is made innocently, it is only actionable if it relates to a matter material to the transaction. A misrepresentation is considered material when it has caused the recipient to enter into a transaction which he would not otherwise have entered. Delahanty v. First Pennsylvania Bank N.A., 318 Pa. Super. 90, 108, 464 A.2d 1243, 1252 (1983); Silverman v. Bell Savings & Loan Association, 367 Pa. Super. 464, 470, 533 A.2d 110, 113 (1987); Bortz v. Noon, 556 Pa. 489, 500-501, 729 A.2d 555, 561 (1999); Restatement (Second) Torts §552. In short, fraud is proven when it is demonstrated that a false representation was made knowingly, in conscious ignorance of the truth or recklessly without caring whether it is true or false. Delahanty, 318 Pa. Super. at 109, 464 A.2d at 1252.

It is well settled that the misrepresentation need not be in the form of a positive assertion to be actionable; it can be any artifice by which by which a person is deceived to his advantage. Delahanty, 318 Pa. Super. at 107, 464 A.2d at 1252; Silverman, 367 Pa. Super. at 469, 533 A.2d at 113. As illustrated by the case law, “the deliberate nondisclosure of a material fact amounts to a culpable misrepresentation no less than does an intentional affirmation of a material falsity.” Delahanty, 318 Pa. Super. at 108, 464 A.2d at 1252; Silverman, 367 Pa. Super. at 470, 533 A.2d at 113.

The Beechams’ claim for fraud does assert each of the elements required to prevail on such a cause of action. It is not disputed that American has made no affirmative act of misrepresentation, however based upon the facts, a reasonable jury may find that American’s nondisclosure of Mr. Idaspe’s termination constitutes a culpable misrepresentation. Even assuming that the alleged misrepresentation was innocent, the Beechams claim that it was regarding a matter material to the transaction. The Beechams stated in their complaint that had they known what American knew about Mr. Idaspe, they would not have entered the transaction at issue. Whether that is true and whether American’s behavior was intentional or reckless are material questions for the jury to decide.

American also questions whether it had any duty to inform the Beechams of the termination or of the information that they had gathered concerning Mr. Idaspe’s business practices. The Superior Court has said that fraud can be demonstrated by the concealment of facts which “should have been disclosed, ” which causes another to act to his own detriment. Delahanty, 318 Pa. Super, at 108, 464 A.2d at 1252. (emphasis added) That court generally applies a negligence standard to determine the existence of such a duty to disclose. For example, courts have found that in a relationship between a buyer, a seller and a broker, the broker is in a better position to verify the statements of the seller than is the buyer. Bortz v. Noon, 556 Pa. at 502, 729 A.2d at 562.This court finds that American did owe the Beechams a duty to disclose based upon the above referenced real estate scenario. American had access to Mr. Idaspe’s clients, they knew of his allegedly deceptive practices and they certainly knew of his termination; American was clearly in a better position than were the Beechams. The Beechams are not without some degree of fault, they too had a responsibility to verify Mr. Idaspe’s credibility, however, from the instant facts, it appears as though American should have disclosed whatever information they had to Mr. Idaspe’s clients, particularly his termination.

Several courts of authority have held that no fiduciary duty exists between an insurance company and its insured. Chenot v. Metropolitan Life Insurance Company, 47 D.&C.4th 332, 335 (Butter Cty. 2000). However, the Beechams’ argument on this count rests in the distinction between their relationship with American and the relationship between an insured and the insurance company.

A fiduciary relation in which a duty exists is “any relation existing between parties to a transaction wherein one of the parties is bound to act with the utmost good faith for the benefit of the other party and can take no advantage to himself from his acts relating to the interest of the other party.” Connors v. Metropolitan Life Insurance Co., 35 D.&C.4th 58, 60 (Fayette Cty. 1997). As illustration, the Connors court tells us that such a relation exists when one occupies a position of advisor toward another, and as such reasonably inspires confidence that he will act for the other’s interest. Id., citing Frowen v. Blank, 493 Pa. 137, 146, 425 A.2d 412, 417 (1981).

An annuity policy carried by a particular company requires more attention and input than does a life insurance policy. While carrying an annuity policy for the benefit of its recipients, the company must exercise its best judgment in determining how to protect and increase the recipients’ investment. This court believes that this distinction mandates a closer relationship between the beneficiary of an annuity and the company carrying that annuity than is mandated between an insured and the insurance company; the annuity carrier must act for the benefit of the policyholder. As such, we find that a fiduciary relationship does exist when an annuity, rather than a life insurance policy, is involved.

In order to prevail on a claim sounding in the UTPCPL, one must demonstrate misfeasance, rather than nonfeasance. Gordon v. Pennsylvania Blue Shield, 378 Pa. Super. 256, 264-65, 548 A.2d 600, 604 (1988); 73 P.S. §201-1 et seq. The Gordon court found that an improper performance of a contracted obligation constitutes misfeasance, while the mere failure to perform amounts to nonfeasance, the latter of which is not actionable. Gordon, 378 Pa. Super. at 264, 548 A.2d. 604.

American argues that the Beechams’ complaint is based upon an omission, the nondisclosure of Mr. Idaspe’s termination and past business dealings. On a superficial level, that may seem to indicate nonfeasance. However, we believe that a fraudulent omission, such as the type that the Beechams are alleging, is an act of misfeasance rather than nonfeasance, and as such, is actionable under the UTPCPL.

Assuming an act of misfeasance exists, a plaintiff must also establish that the defendant’s representation is false, it deceives or may deceive, it is likely to make a difference in the purchasing decision and there was a reliance on those misrepresentations. Fay v. Erie Insurance Group, 723 A.2d 712, 714 (Pa. Super. 1999). In other words, the plaintiff is required to demonstrate that the defendant’s misfeasance satisfies the elements of common-law fraud.

Here, again, American argues that there is no viable basis for a claim of common-law fraud. As stated above, this court finds that the Beechams have sufficiently pled the elements of fraud in a manner appropriating submission to the jury.

Under long-standing Pennsylvania law, “the right to punitive damages is a ‘mere incident to a cause of action.’ ” Delahanty, 318 Pa. Super. at 128, 464 A.2d at 1263, quoting Hilbert v. Roth, 395 Pa. 270, 276, 149 A.2d 648, 652 (1959). However, an award of punitive damages can only be made where actual damages have been suffered. Delahanty, 318 Pa. Super. at 128, 464 A.2d at 1263. The Supreme Court of Pennsylvania has held that a plaintiff may receive punitive damages even in the absence of a physical injury. Chenot, 47 D.&C.4th at 337.

Punitive damages are awarded to punish “outrageous conduct,” stemming from the defendant’s bad motive or reckless indifference to the rights of others. Chenot, 47 D.&C.4th at 337; Delahanty, 318 Pa. Super. at 127-30, 464 A. 2d at 1262-63. Therefore, aside from establishing the commission of a tort, a plaintiff must demonstrate the defendant’s willful, wanton or reckless behavior in order to secure an award of punitive damages. The question of whether punitive damages are warranted is one for the fact-finder. Delahanty, 318 Pa. Super. at 129, 464 A.2d at 1263.

In this instance, the Beechams have clearly not suffered any physical injuries; however they do allege the loss of substantial amount of money. Therefore, it is the jury’s responsibility to determine whether American’s conduct was “outrageous” or “reckless.”

V. Conclusion

Based on the foregoing, this court finds that material questions of fact exist and that each count of the complaint is appropriate for submission to a jury. Accordingly, defendant’s motion for summary judgment is denied on all bases and an appropriate order follows.

ORDER

And now, to wit, January 17, 2003, it is hereby ordered and decreed that the defendant’s motion for summary judgment is denied on all bases.


source: Caselaw Access Project

author: CAMPBELL, J.,

license: Public Domain

text:
    Hoover v. Gustison

      Mary H. Burchik, for plaintiff/appellee.

      Jill E. Nagy, for defendant/appellant.
    June 5, 2002
   CAMPBELL, J.,

In the above-captioned child support matter, this court entered an order on March 28,2002 dismissing defendant’s exceptions to hearing officer’s order of October 12, 2001. Defendant/ appellant, Robert L. Gustison (Father) appeals the March 28, 2002 order to the Superior Court of Pennsylvania. This opinion is filed pursuant to Pa.R.A.P. 1925. The pertinent facts are as follows.

On August 29, 2001, a support hearing was held in this matter on plaintiff’s petition to modify an order for support established in March of 1999, which hearing resulted in the above-mentioned October 12, 2001 order. Plaintiff/appellee is Candace Y. Hoover (Mother). Mother was present without counsel at the hearing. Father was not present at the hearing, but he participated by telephone. Jill Nagy, Esquire, was present on Father’s behalf. (Notes of testimony p. 3.)

Heather J. Gustison, bom on September 5, 1971, is the child of Mother and Father, who were formerly married. As described by Thomas C. Overholt M.D. in his report dated July 19, 2001, Heather is multiply handicapped and diagnosed with “congenital microcephaly, very difficult to control seizure disorder, spastic quadriplegia, profound mental retardation.” She requires “total care including dressing, feeding, cannot ambulate and must be pushed in a wheelchair. She requires total care including hygiene.” In his report, Dr. Overholt further provided that Heather has “multiple medical problems subsequent to her primary diagnosis.” Dr. Overholt stated that Heather requires annual or semiannual appointments with dentists, opthalmologists, ENT and dermatologic specialists in addition to general medical care at his office, and that Heather is followed three to four times per year by the Department of Neurology at the Hershey Medical Center for adjustment of her seizure medications. (Notes of testimony, exhibit P-1.)

Dr. Overholt’s July 19, 2001 report continued as follows:

“Heather’s mother provides total care for her and purchased many items and sundries that are not covered by Heather’s medical insurance. These items include but are not limited to pain relievers such as Tylenol or Ibuprofen, medicated powders and creams to maintain good skin care, diapers, disposable underpants and sanitary pants, medicated shampoos for significant seborrhea and scalp care, other dermatologies as needed. Food processor for pureed diet, thickener designed to help food and drink for her chronic dysphagia and swallowing difficulties. These are necessary to prevent or reduce the risk of aspiration. She requires a handicap ramp, railing, wheelchair, hospital bed capable of multiple positions.
“For her personal care and medical supplies including an ear thermometer, surgical gloves, disposable wipes are needed. Bathing is assisted through a modified shower stall with seat. Mouth care is assisted through a waterpik. Vitamin and mineral supplements, allergy, cold and flu medications are used.” (Notes of testimony, exhibit P-1.)

Although 29 years old, Heather is an adult child unemancipated for purposes of receiving child support due to her disability. (Notes of testimony p. 5.) Mother is Heather’s primary caretaker. (Notes of testimony p. 4.) This role prevents Mother from being employed in any capacity. Thus, the current order for support was established in March of 1999 solely on Father’s income. (Findings of fact, conclusions of law and recommendation of the domestic relations hearing officer, 10/22/01, p. 2.)

Mother’s monthly net income is $0; Father’s monthly net income is $9,905. (Notes of testimony pp. 3-4.)

With regard to Supplemental Security Income (SSI) payments, Heather first became disabled, pursuant to a statement/letter from the Social Security Administration dated April 12, 2001, in November 1976. She became eligible to receive monthly SSI benefits, which benefits continued until February 2001. According to said statement/letter, Heather’s SSI benefits were suspended due to the support amount received from Father. (Notes of testimony pp. 5-6; exhibit D-l.) (Findings of fact, conclusions of law and recommendation of the domestic relations hearing officer, 10/22/01, pp. 1-2.)

Heather’s only medical insurance coverage is medical assistance (Notes of testimony p. 6), despite the fact that the current support order entered in March of 1999 provided that Father should continue pursuing application for private medical insurance for Heather. (Notes of testimony p. 8.) The March 1999 order placed an agreed upon cap on Father’s liability for unreimbursed medical expenses in the amount of $1,500 per year due to the lack of private medical insurance for Heather at that time. (Findings of fact, conclusions of law and recommendation of the domestic relations hearing officer, 10/22/01, p. 3.)

Father testified at the August 29, 2001 hearing that after contacting his private medical insurance carrier once in 1999 with regard to obtaining coverage for Heather, he never followed through with the process, and the matter “just fell through the cracks.” (Notes of testimony pp. 8-9.)

Mother filed the above-mentioned petition for support modification, docketed on or about April 25,2001, seeking an increase in support payments for Heather due to the suspension of SSI payments to Heather in March 2001, and the extraordinary expenses incurred by Mother on a monthly basis for Heather’s care. (Notes of testimony pp. 5-6; exhibit D-l.) (Findings of fact, conclusions of law and recommendation of the domestic relations hearing officer, 10/22/01, pp. 1-2.)

Father’s “proposal” is that the current order of support be reduced to an amount below the maximum income limit allowed by the Social Security Administration in order that Heather may again receive SSI benefits and continue to seek medical insurance coverage through the medical assistance program. (Notes of testimony pp. 13-18.) (Findings of fact, conclusions of law and recommendation of the domestic relations hearing officer, 10/ 22/01, p. 2.)

The hearing officer increased Father’s present duty of support to $1,984 per month ($1,784 for current support and $200 for arrears) effective April 25, 2001. Father filed timely exceptions. After argument on March 18, 2002, this court dismissed Father’s exceptions. Father filed the instant appeal. Father thereafter filed a statement of matters complained of.

Exception 1 .A. provides that the hearing officer’s findings of fact fail to indicate that, though eligible for Social Security Income, Heather has been denied said benefits due to the child support she receives and has received for approximately 25 years. The exception goes on to provide: “Because of adult dependant’s ineligibility status, adult dependant has lost all federally funded benefits that go hand and hand with the disability income.”

In fact, the following is clearly stated in the middle of the first full paragraph of page 2 of the findings of fact, conclusions of law and recommendation of the domestic relations hearing officer in the instant case: “According to the plaintiff, the child’s SSI benefits were suspended due to the amount of support received from the defendant. The statement from the Social Security Administration corroborates this account.” (Notes of testimony, exhibit D-l.) Mother testified to the same at the subject hearing. (Notes of testimony pp. 5-6.) The court does not know to what Father is referring in exception l.A. as Heather’s loss of “federally funded benefits that go hand and hand with the disability income.” There was no testimony at the August 29, 2001 hearing regarding the loss of any of Heather’s benefits, other than the suspension of her SSI benefits. For the above reasons, exception l.A. is dismissed.

Exception 1 .B. provides that the hearing officer’s findings of fact indicate that Heather’s condition worsened, forcing a new order relative to medical bills and insurance without evidence of additional needs presented. Further, the exception provides that Mother admitted on the record that “the Medicare insurance provided for the first 31 years of dependant’s life has been adequate to cover her medical expenses.” Mother clearly testified on the record of the August 29,2001 hearing that Heather’s condition has worsened. The hearing officer asked Mother in what respect Heather’s condition worsened. Mother specifically testified how Heather’s condition worsened by, inter alia, referring to the doctors’ reports (Notes of testimony, exhibit P-1), which clearly and specifically evidenced Heather’s additional needs and expenses not covered by medical assistance. (Notes of testimony p. 5.) With regard to Father’s assertion that Mother admitted on the record that medical assistance insurance has been adequate to cover Heather’s medical expenses, the court finds no such admission. To the contrary, Mother stated that necessary medical specialists (as substantiated in Dr. Overholt’s report) do not accept medical assistance. (Notes of testimony pp. 6-7; exhibit P-1.) Therefore, exception l.B. is dismissed.

Exception 1 .C. provides that the hearing officer’s findings of fact indicate that Mother presented evidence of “extraordinary expenses” incurred on a monthly basis for Heather’s care, but none were presented. Father asserts all expenses, but for basic care items, were covered in whole or part by Medicare or Medicaid insurance and should remain the primary coverage for Heather’s medical needs.

In fact, the last sentence of the first full paragraph of page 2 of the findings of fact, conclusions of law and recommendation of the domestic relations hearing officer in the instant case provides as follows: “Plaintiff now asks for the order to be modified giving due consideration to the lack of SSI income and the extraordinary expenses incurred by her on a monthly basis for the care of the child.” The hearing officer there stated why Mother filed the subject petition for modifcation. The hearing officer was not, as Father asserts, making any statement regarding evidence or proof for modification. However, clear and specific evidence of such “extraordinary expenses” for Heather’s care was put on the record of the subject hearing when the hearing officer asked Mother in what respect Heather’s condition worsened. Mother testified how Heather’s condition worsened by, inter alia, referring to the doctors’ reports (Notes of testimony, exhibit P-1), which clearly and specifically evidenced Heather’s additional needs and expenses not covered by medical assistance. (Notes of testimony p. 5.) Therefore, exception l.C. is dismissed.

Exception l.D. alleges that the hearing officer’s findings of fact indicate that Father’s proposal to reduce support payments is in part based on Heather’s ability to receive Medicare or Medicaid insurance proceeds. Father asserts that the hearing officer failed to indicate that Heather continues and will continue to obtain such benefits despite Father’s “income proposals for reduction.” The hearing officer clearly considered this fact as evidenced by her references to Heather’s current “Medicare/Medicaid program” benefits, inter alia, in the final paragraph on page 2 of the findings of fact, conclusions of law and recommendation of the domestic relations hearing officer in this case. Therefore, exception l.D. is dismissed.

Exception 1 .E. provides that the hearing officer’s findings of fact indicate that no challenges were raised regarding Father’s income, but Father indicated that his location and other household dependant children should be a factor in the support calculation. To the contrary, a review of the transcript of the August 29, 2001 hearing reveals no such indication by Father. Therefore, exception l.E. is dismissed.

Exception l.F. provides: “Hearing officer bases her ruling on unreimbursed medical expenses from Dr. McCabe and Dr. Overholt’s records on plaintiff Mother’s testimony, however, plaintiff presented no evidence that she has attempted to obtain said medical services or that said services are in fact non-reimbursable.” To the contrary, Mother testified to this very matter at the subject hearing. Clear and specific evidence of such “extraordinary expenses” for Heather’s care was put on the record when the hearing officer asked Mother in what respect Heather’s condition worsened. Mother testified how Heather’s condition worsened by, inter alia, referring to the doctors’ reports (Notes of testimony, exhibit P-1), which clearly and specifically evidenced Heather’s additional needs and expenses not covered by medical assistance. (Notes of testimony p. 5.) Therefore, exception l.F. is dismissed.

Exception l.G. provides that: “Hearing officer states that defendant’s proposal that adult dependant’s basic necessity should be supplemented by federal funding that is specifically provided for ‘special needs’ adults.” Further, Father, inter alia asserts that the hearing officer indicates that this type of government supplement is an abuse of the system, but mother presented bills of only approximately $283 for 2000-2001 and received benefits in excess of $18,000 of “child” support. At the August 29, 2001 hearing, the hearing officer spoke of a number of other bills for medical expenses for 1999 and 2000 sent by certified mail to Father for payment and returned to domestic relations unsigned. The court also responds to this exception with Mother’s response at the hearing regarding the worsening of Heather’s condition. Mother specifically testified how Heather’s condition worsened by, inter alia, referring to the doctors’ reports (Notes of testimony, exhibit P-1), which clearly and specifically evidenced Heather’s additional needs and expenses not covered by medical assistance. (Notes of testimony p. 5.) Therefore, exception l.G. is dismissed.

Exception l.H. provides that the hearing officer states that Father failed to obtain medical insurance for Heather, however Father attempted to do the same and Mother has not, as of the date of the filing, supplied any information to Father relative to Heather’s disability or information that must be submitted to insurance carrier for coverage assessment. A review of the record of the subject hearing reveals no testimony regarding any alleged lack of cooperation on Mother’s part with regard to Father’s obligation to obtain private medical insurance for Heather. Father admitted at the hearing that after initially contacting his medical insurer in 1999, he never followed through with the required paperwork and the matter simply “fell through the cracks.” (Notes of testimony pp. 8-9.) (Findings of fact, conclusions of law and recommendation of domestic relations hearing officer, 10/22/01, p. 3.) Therefore, exception l.H. is dismissed.

Exception 2.A. provides that “the hearing officer’s determination discriminates against familial status because if the parents had been married, even with a large income, adult dependant would be entitled to all federal benefits no matter what the parental income amount.” Father cites Curtis v. Kline, 542 Pa. 249, 666 A.2d 265 (1995), which is not dispositive. Curtis involved the requirement that separated, divorced or unmarried parents provide post-secondary education support to adult children. The court found that concept violated the Equal Protection Clause of the 14th Amendment. The court in Pellish v. Gerhart, 701 A.2d 594 (Pa. Super. 1997), however, declined to extend the Curtis holding beyond that of post-secondary educational expenses. Therefore, exception 2.A. is dismissed.

The court will here address together exceptions 2.B., C., and D., after stating the same. Exception 2.B. provides that the hearing officer is “at odds” with Father’s proposal to allow receipt of all federal funds with a trust. Exception 2.C. provides that the hearing officer utilizes 23 Pa.C.S. 1910.16-6 as a basis in denying Father’s proposal, “however the very reasoning and basis for DPW and SSI are different and said comparison does not comport with the purposes of SSI.” Exception 2.D. provides that the hearing officer deviates from the support guidelines, when such deviation is not supported by substantial evidence and constitutes a punishment aimed at Father, rather than seeking the best interest of Heather which would best be served through a “special needs trust” and by obtaining full government benefits “specifically designed so that parents of special needs adults need not bear the burden of such support for the entire adult life of their children.”

“It is well-settled that a court has discretion to enter a support award that is outside the guidelines after considering the unique needs of the parties. The court must, however, place reasons on the record for doing so.” Crawford v. Crawford, 429 Pa. Super. 540, 557, 633 A.2d 155, 163 (1993). (Citing Lesko v. Lesko, 392 Pa. Super. 240, 572 A.2d 780 (1990).) The hearing officer was fully cognizant of and did the same in this case, as evidenced by the following:

“I am at odds with why a parent, with such economic means as that of the defendant herein, would suggest that the support of his child should in any way be underwritten by federal tax dollars. There is no contention in this record by the defendant that he cannot meet his obligation of support as dictated by the support guidelines. The defendant’s monthly income is sufficient to not only provide support to the plaintiff to care for Heather, but also to generously support his intact family. The support guidelines offer no basis for the defendant’s proposal that an order be fashioned in such a manner so as to reinstate Heather’s eligibility for governmental assistance. Indeed, the guidelines seek just the opposite result by requiring obligors to pay toward the support of a child so that government assistance may be relieved. Compare 23 Pa.C.S. Rule 1910.16-6 (child care subsidy provided by D.P.W. should not be used to reduce child care expenses between parties to the extent obligor has financial resources to contribute actual costs of child care). Therefore, I decline to recommend the defendant’s proposal and find that an order of support should be entered pursuant to the support guidelines.
“Pursuant to Rule 1910.16-5, a deviation may be made to the order of support indicated by the guidelines if one or more of the items detailed therein is found by the trier of fact as warranting such a deviation. I find that the unusual needs of the child Heather and the plaintiff’s unusual fixed obligations with regard to her care, together with the substantial income of the defendant, and the medical expenses not covered by insurance warrant an upward deviation from the indicated guideline amount. I recommend that defendant pay an additional $200 per month for a total support order of $1,784.” (Findings of fact, conclusions of law and recommendation of the domestic relations hearing officer, 10/22/01, pp. 3-4.)

In Crawford, the court held that a dependant adult child was entitled to child support from her father even though she was otherwise entitled to federal benefits; society was not required to step in and care for the adult dependant child whose parent was capable of providing support. For the above reasons, exceptions 2.B., C., and D. are dismissed.

Exception 2.E. alleges that by not capping out of pocket expenses and not utilizing the deductible for unreimbursed medical expenses, the hearing officer provides no protection for Father with respect to reviewing potential expenditures, and further does not provide a safe harbor if no medical insurer will insure Heather. The hearing officer reasoned as follows:

Due to the defendant’s failure to comply with the order of 3-22-99 with regard to obtaining medical insuranee, I find that he should be responsible for 100 percent of those medical expenses not paid for by Medicare/ Medicaid and that no cap be placed on this liability. There should be no deductible that must first be met by the plaintiff with regard to the plaintiff’s unreimbursed medical expenses, again due to the child’s exceptional needs for items not paid for by insurance and the defendant’s failure to fund private insurance coverage. Should the defendant obtain medical insurance for the child, then the $250 annual deductible for unreimbursed medical expenses may be reinstated.” (Findings of fact, conclusions of law and recommendation of the domestic relations hearing officer, 10/22/01, p. 4.)

Father presented no evidence at the subject hearing that would warrant capping out of pocket expenses and utilizing the deductible for unreimbursed medical expenses at this point. For the above reasons, exception 2.E. is dismissed.

Exception 2.F. provides that the hearing officer fails to consider the coverage that Medicare provides. The hearing officer did in fact consider the coverage Medicare/Medicaid provides to Heather. The hearing officer clearly references Heather’s current “Medicare/Medicaid program” benefits, inter alia, in the final paragraph on page 2 of the findings of fact, conclusions of law and recommendation of the domestic relations hearing officer in this case. Therefore, exception 2.F. is dismissed.

The court will here address Father’s statement of matters complained of. First, Father asks whether the trial court made an error of law by failing to rule that the Pennsylvania child support guidelines were unconstitutionally applied to Father and thus, “violated due process and equal protection regarding his fundamental right to familial status.” The court made no such error of law. Father cites Curtis v. Kline, 542 Pa. 249, 666 A.2d 265 (1995), which is not dispositive. Curtis involved the requirement that separated, divorced or unmarried parents provide post-secondary education support to adult children. The court found that concept violated the Equal Protection Clause of the 14th Amendment. The court in Pettish v. Gerhart, 701 A.2d 594 (Pa. Super. 1997), however, declined to extend the Curtis holding beyond that of post-secondary educational expenses.

The court will here respond together to Father’s second and third matters after stating both. In his second matter, Father asks whether the trial court abused its discretion by failing to consider Heather’s unique age, disability and circumstances by failing to modify Father’s support obligation to include a special needs trust to maximize Social Security disability benefits. Third, Father asks whether the trial court abused its discretion by failing to consider the unique age, disability and circumstances of the parents in this case by failing to modify Father’s support obligation to include a special needs trust so Heather can maximize receipt of Social Security disability benefits and be financially protected when her parents are no longer able to provide for her. The court did not so abuse its discretion in either matter. In fact, “[i]t is well-settled that a court has discretion to enter a support award that is outside the guidelines after considering the unique needs of the parties. The court must, however, place reasons on the record for doing so.” Crawford v. Crawford, 429 Pa. Super. 540, 557, 633 A.2d 155, 163 (1993) (citing Lesko v. Lesko, 392 Pa. Super. 240, 572 A.2d 780 (1990)). The hearing officer was fully cognizant of and did the same in this case, as evidenced in the following paragraph.

The hearing officer pointed out that there is no contention in this record that Father cannot meet his obligation as dictated by the support guidelines. The support guidelines provide no basis for Father’s proposal that an order be fashioned in a manner so as to reinstate Heather’s eligibility for governmental assistance. The support guidelines seek the opposite result by requiring obligors to pay toward the support of a child so government assistance may be relieved. Compare 23 Pa.C.S. Rule 1910.16-6 (child care subsidy provided by D .PiW. should not be used to reduce child care expenses between parties to the extent obligor has financial resources to contribute actual costs of child care). Thus, the hearing officer declined to recommend Father’s proposal and found that a support order should be entered pursuant to the support guidelines. Pursuant to Pa.C.S. Rule 1910.16-5, a deviation may be made to the support order indicated by the guidelines if one or more of the items detailed therein is found by the trier of fact as warranting such a deviation. The hearing officer found that Heather’s unusual needs and Mother’s unusual fixed obligations regarding Heather’s care, together with Father’s substantial income, and Heather’s medical expenses not covered by insurance warrant an upward deviation from the indicated guideline amount. The hearing officer thus recommended that Father pay an additional $200 per month for a total support order of $1,784. (Findings of fact, conclusions of law and recommendation of the domestic relations hearing officer, 10/22/01, pp. 3-4.)

In Crawford, the court held that a dependant adult child was entitled to child support from her father even though she was otherwise entitled to federal benefits; society was not required to step in and care for the adult dependant child whose parent was capable of providing support.

Based on all the evidence presented including Heather’s present needs and Father’s present ability to pay, Heather is entitled to child support benefits from Father today. Should either Heather’s needs or Father’s ability to pay change in the future, the same would have to be addressed at that time.

Fourth, Father asks whether the trial court abused its discretion by ordering Father to provide medical coverage for Heather when medical coverage is available through Medicare and will be and has been adequate to cover Heather’s medical needs for approximately 30 years. The court did not so abuse its discretion. The court responds hereto with Mother’s response at the hearing regarding the worsening of Heather’s condition. Mother specifically testified how Heather’s condition worsened by, inter alia, referring to the doctors’ reports (Notes of testimony, exhibit P-1), which clearly and specifically evidenced Heather’s additional needs and expenses not covered by medical assistance. (Notes of testimony p. 5.)

For the foregoing reasons, it is respectfully requested that the order entered on March 28, 2002 be affirmed and Father’s appeal denied.