text:
    Thiboutot v. Bayer Corporation

      Joseph J. Thiboutot, pro se plaintiff

      Rachel Castillo Rosser and Albert G. Bixler, for defendants
    May 7, 2013
   NEW, J.,

— Plaintiff, Joseph J. Thiboutot, Jr., appeals this court’s order dated March 4, 2013, granting defendants’ motion to dismiss for failure to comply with pretrial requirements of case management orders no. 1 and 10, including, but not limited to, failing to submit a verified plaintiff fact sheet and expert reports. For the following reasons, this trial court’s order should be affirmed.

A. FACTS AND PROCEDURAL POSTURE OF THE MASS TORT PROGRAM IN RE: TRASYLOL LITIGATION

The creation of a mass tort program pertaining to the blood clotting drug Trasylol was commenced by trial court order dated July 2, 2008 as In Re: Trasylol Litigation at Philadelphia County Court of Common Pleas June Term 2008, No. 5229. (A true and correct copy of the trial court’s master docket is attached hereto as exhibit “A.”)

On July 15,2008, the trial court issued case management order no. 1 for Trasylol Personal Injury Cases, which stated, in pertinent part:

V. WRITTEN DISCOVERY
A) Required Disclosures by Plaintiffs
1) By September 5, 2008, or within sixty (60) days of the date on which an action is commenced by Writ of Summons or the filing of a Complaint, whichever is later, each plaintiff who is subject to this order shall serve defendants in the action brought by such person with:
(a) A completed Fact Sheet in the form attached hereto as Exhibit A. The Fact Sheet shall include a completed Affidavit (as described in 42 Pa.C.S.A. Section 102) attesting that the information contained therein is true and correct to the best of the plaintiff’s knowledge, information and belief formed after due diligence and reasonable inquiry.
(b) Authorizations for release of records in the form attached hereto as Exhibit B. Plaintiffs shall provide addressed authorizations for each health care provider identified in plaintiff’s Fact Sheet.
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2) Fact Sheets as Interrogatories and Requests for Productions. The plaintiffs’ Fact Sheets which plaintiffs are required to answer are a convenient form of propounding interrogatories and requests for production of documents. The completed fact sheets shall be considered interrogatory answers pursuant to Pa.R.C.P. 4006 and as responses pursuant to Pa.R.Civ.P. 4009.12 to requests for production, and are governed by the standards applicable to written discovery under these rules. The questions and requests for production contained in the Fact Sheet are non-objectionable and shall be answered without objection. This section does not prohibit a plaintiff from withholding or redacting information based upon a recognized privilege. If a plaintiff withholds or redacts any information on the basis of privilege, he or she shall provide defendants with a privilege log pursuant to Section V.F.7 below. In the event that a dispute arises concerning the completeness or adequacy of a plaintiff’s response to any request contained in the Fact Sheet, this Section shall not prohibit plaintiff from asserting that his or her response is adequate.
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X. EXPERT DISCOVERY
Expert discovery shall commence at the close of fact discovery. The parties shall confer and present to the Court an agreed-upon expert discovery plan (or their statements of any disputed positions concerning expert discovery) no later than August 18, 2008. The plan shall, however, provide for the depositions of all generic and case-specific experts.

(A true and correct copy of the trial court’s case management order no. 1 for Trasylol personal injury cases, including exhibits A and B, is attached hereto as exhibit “B.”)

On July 6,2010, the trial court issued case management order No. 10 modifying and supplementing discovery and trial schedules in the Trasylol mass tort litigation. That order states, in pertinent part:

I. TRIAL READINESS GROUPINGS
.... All Coordinated Actions pending in this Court as of July 1, 2010 are hereby assigned to Groups 4-9 by date of initial filing, with actions filed on the same date assigned to groups in sequence alphabetically by last name of the first named plaintiffs. Exhibit A hereto, which is made part of the Order, assigns the Coordinated Actions to groups as follows:
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Group 9 shall consist of all cases filed in 2010 as of July 1,2010. The schedules for case-specific discovery and pretrial motions and the trial ready dates for the cases assigned to Groups 4 - 9 are set forth in Exhibit B hereto, which is made part of this Order.

Pursuant to exhibit A, page 15 of case management order no. 10, the instant matter was assigned to group 9. Pursuant to exhibit B of case management order no. 10, the deadline for plaintiffs in group 9 cases to serve reports for case-specific experts was November 28,2011. In addition, cases in group 9 were deemed to be trial ready on April 2, 2012. (A true and correct copy of the trial court’s case management order no. 10 modifying and supplementing discovery and trial schedules, including exhibits A and B, is attached hereto as exhibit “C.”)

B. FACTS AND PROCEDURAL POSTURE IN THE CASE OF THIBOUTOT, JR. V. BAYER CORPORATION, ETAL

Appellant, Joseph Thiboutot, Jr., filed this personal injury mass tort action on March 31, 2010, as Thiboutot, Jr. v. Bayer Corporation, et al, at Philadelphia Court of Common Pleas March Term 2010, No. 5958, claiming renal failure due to the administration of the drug Trasylol. Appellant is a resident of the state of Maine. At the time the complaint was filed, appellant was represented by the law firm of Matthews & Associates of New York, New York. Matthews & Associates retained the Law Offices of Gilligan & Peppelman, LLC of Media, PA as local counsel to facilitate the litigation of the case in the Philadelphia Court of Common Pleas.

Attorney Raymond Peppelman filed a motion for leave to withdraw as appellant’s counsel on October 4,2011. In paragraph 2 of that motion, Mr. Peppelman stated, “Good cause exists for the filing of this motion to withdraw, as there is a difference of opinion between counsel and [appellant] as to how to proceed with [appellant’s] claims.” Thereafter, on October 13, 2011, the trial court issued a rule to show cause with regard to the motion for leave to withdraw, with a returnable date of December 14, 2011. By order dated December 21, 2011, the trial court rescheduled the rule to show cause to February 14, 2012, at which time the trial court directed that appellant could participate by conference call because of health issues.

On February 14, 2012, Mr. Peppelman’s motion for leave to withdraw as counsel was granted. In that order, the trial court also directed that all proceedings would be stayed for sixty (60) days in order for appellant to secure new counsel.

On or about January 28,2013, appellees Bayer Shering Pharma AG, Bayer Healthcare Pharmaceuticals, Inc. and Bayer Corporation filed a motion to dismiss for failure to comply with pretrial requirements of case management orders 1 and 10. In that motion, appellees indicated that this is the sole remaining case in the Trasylol mass tort program, and argued that the case should be dismissed due to appellant’s failure to comply with the trial court’s directives. Appellees noted that “[e]ven the rudimentary tasks of completing and submitting a verified plaintiff fact sheet and signed authorizations have been ignored by [appellant].” (See paragraph 1, page 1 of appellees’ motion to dismiss.)

Appellees also pointed out that the trial court’s order of February 14, 2012, which granted Mr. Peppelman’s motion for leave to withdraw as counsel, also gave appellant sixty (60) days to retain new counsel, and that on April 26,2012, the trial court gave appellant an additional thirty (30) days to find new counsel; yet to date, appellant has failed to obtain new counsel. “Instead, [appellant] has filed a battery of pro se motion essentially seeking to strike the motion for leave to withdraw, sanction his former attorneys and compensate him for his time and efforts related to their withdrawal.” (See page 1, paragraph 2 of appellees’ motion to dismiss.)

Appellees’ argument continued:

Meanwhile, the case management deadlines established by case management order (CMO) 10 have passed, and this group 9 case, which was scheduled to be trial ready by April of 2012, has languished on the docket. There has been no indication that any new counsel is prepared to assume the prosecution of this case, or that [appellant] is prepared to litigate the merits of his case pro se. Because [appellant] has failed to retain new counsel, and has ignored his pretrial obligations, including the submission of a plaintiff fact sheet which was due on May 31, 2010 and his expert report which was due on November 28,2011, the court should dismiss this case.

(See page 1, paragraph 3 of appellees’ motion to dismiss.)

According to the trial court dockets, the date for responding to appellee’s motion to dismiss was February 28, 2012. After receiving no response to that motion, the trial court on March 4, 2013 issued an order granting appellees’ motion to dismiss for failure to comply with pretrial requirements of case management orders no. 1 and 10, including, but not limited to, failing to submit a verified plaintiff fact sheet and expert reports.

On or about March 27, 2013, appellant sent a notice of appeal to the trial court. On April 1, 2013, the trial court issued an order, pursuant to Pa.R.A.P. 1925(b) which directed appellant to file “a self contained and intelligible statement of errors appellant actually intended to raise on appeal to the Superior Court by April 22,2013.” On April 22, 2013, appellant filed a document entitled “statement of errors. Errors intended to raise on appeal.” However, contrary to directive of the trial court’s order of April 1, 2013, the appellant’s statement is a rambling, unintelligible document.

II. DISCUSSION

Appellant has waived his right to appeal due to his failure to file a concise and coherent statement of matters complained of on appeal pursuant to Pa.R.A.P. 1925(b). In the alternative, appellant’s failure to comply with case management orders no. 1 and 10 resulted in appellant’s failure to establish a prima facie case, and therefore the trial court’s granting of appellee’s motion to dismiss was proper and should be affirmed.

A. Appellant Has Waived His Right to Appeal.

Pa.R.A.R 1925(b) states, in pertinent part:

Rule 1925. Opinion in Support of Order
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(b) Direction to file statement of errors complained of on appeal; instructions to the appellant and the trial court.-If the judge entering the order giving rise to the notice of appeal (“judge”) desires clarification of the errors complained of on appeal, the judge may enter an order directing the appellant to file of record in the trial court and serve on the judge a concise statement of the errors complained of on appeal (“Statement”).
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(4) Requirements; waiver.
(i) The Statement shall set forth only those rulings or errors that the appellant intends to challenge.
(ii) The Statement shall concisely identify each ruling or error that the appellant intends to challenge with sufficient detail to identify all pertinent issues for the judge....
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(iv) The Statement should not be redundant or provide lengthy explanations as to any error. Where non-redundant, non-frivolous issues are set forth in an appropriately concise manner, the number of errors raised will not alone be grounds for finding waiver.
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(vii) Issues not included in the Statement and/or raised in accordance with the provisions of this paragraph (b) (4) are waived.

Pa.R.A.P. 1925(b)(4).

In Jiricko v. Geico Insurance Company, 947 A.2d 206 (Pa. Super. 2008), the Superior Court explained:

In the case sub judice, the fact Appellant filed a timely response to the trial court’s Pa.R.A.P. 1925(b) order does not automatically equate with issue preservation. As our discussion infra reveals, the Pa.R.A.P. 1925(b) statement must be sufficiently “concise” and “coherent” such that the trial judge may be able to identify the issues to be raised on appeal, and the circumstances must not suggest the existence of bad faith.
We begin with a discussion of Kanter v. Epstein, 866 A.2d 394 (Pa. Super. 2004), alloc. denied, 880 A.2d 1239 (Pa. 2005), where this court stated:
In Commonwealth v. Lord, 719 A.2d 306 (Pa. 1998), the Pennsylvania Supreme Court specifically held that “from this date forward, in order to preserve their claims for appellate review, Appellants must comply whenever the trial court orders them to file a Statement of Matters Complained of on Appeal pursuant to [Pa.R.A.P] 1925. Lord, 719 A.2d at 309. “Any issues not raised in a 1925(b) statement will be deemed waived. Id. This Court explained in Riley v. Foley, 783 A.2d 807, 813 (Pa. Super. 2001), that Rule 1925 is a crucial component of the appellate process because it allows the trial court to identify and focus on those issues the parties plan to raise on appeal. This court has further explained that “a concise Statement which is too vague to allow the court to identify the issues raised on appeal is the functional equivalent to no Concise Statement at all.” Commonwealth v. Dowling, 778 A.2d 683, 686-87 (Pa. Super. 2001). “Even if the trial court correctly guesses the issues Appellants raise on appeal and writes an opinion pursuant to that supposition the issues [are] still waived. Commonwealth v. Heggins, 809 A.2d 908, 911 (Pa. Super. 2002.)

Recently, in Tucker v. R.M. Tours, 939 A.2d 343 (Pa. Super. 2007), this court was faced with a voluminous Pa.R.A.P. 1925(b) statement and, in affirming the judgment, we concluded the appellants had engaged in misconduct by filing a Pa.R.A.P. 1925(b) statement with the intent to overwhelm the courts. Specifically, this court stated:

Our law makes it clear that Pa.R.A.P. 1925(b) is not satisfied by the filing of any statement. Rather, the statement must be “concise” and coherent as to permit the trial court to understand the specific issues being raised on appeal. Specifically, this court has held that when appellants raise an “outrageous” number of issues in their 1925(b) statement, the appellants have “deliberately circumvented the meaning and purpose of Rule 1925(b) and ha[ve] thereby effectively precluded appellate review of the issues they now seek to raise. Kanter, 866 A.2d at 401.
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Appellants [engage] in misconduct when they “attempt to overwhelm the trial court by filing [a] Rule 1925(b) statement that contain[s] a multitude of issues that [Appellants] d[o] not wish to raise and/or c[an] not raise before this court.” Kanter, 866 A.2d at 401.

Id. at 210-211.

Likewise, in the instant matter, appellant’s statement is a mishmash of virtually incomprehensible assertions. Therefore, pursuant to Pa.R.A.P. 1925(b)(4) and the case law cited above, appellant has waived his right to appeal.

B. The Trial Court’s Order Granting Appellees’ Motion to Dismiss Should Be Affirmed.

Notwithstanding the foregoing, this court’s order of March 4, 2013 granting appellee’s motion to dismiss should be affirmed, because appellant’s noncompliance with case management orders nos. 1 and 10 resulted in appellant’s failure to establish a prima facie case against appellees.

Wolloch v. Aiken, 815 A.2d 594 (Pa. 2002) was a medical malpractice case in which a case management order was issued giving Wolloch a deadline to submit expert reports. Id. at 595. Wolloch applied for and was granted one extension of time, but did not meet the second deadline. Id. Shortly after the expiration of the deadline for Wolloch’s expert reports, each of the medical defendants filed a motion for summary judgment alleging that Wolloch could not make out a prima facie case of medical malpractice without expert reports. Id. The trial court granted the motions for summary judgment in favor of all the moving defendants, but on appeal, The Superior Court reversed the trial court’s order. Id. In reversing the Superior Court, the Pennsylvania Supreme Court in Wolloch found that the proper analysis for a trial court to utilize when ruling on a motion for summary judgment is for the trial court to determine whether or not the plaintiff has established a prima facie case, and if plaintiff has not done so, summary judgment is proper. Id. at 596.

In the case at bar, appellant never provided a plaintiff’s fact sheet to appellees, which, pursuant to case management order no. 1, was to be considered appellant’s responses to interrogatories and request for production of documents. In addition, appellant never provided any expert reports to appellees. Expert testimony is necessary when the subject matter of the inquiry is one involving special skills and training not common to the ordinary lay person. Brandon v. Ryder Truck Rental, 34 A.3d 104, 108 (Pa. Super. 2011), citing Storm v. Golden, 538 A.2d 61 (Pa. Super. 1988). Here the appellant’s claim is that he suffered renal failure after being given the drug Trasylol. Clearly, this is a case which requires expert testimony, without which appellant will not be able to meet his burden of proof.

Moreover, in the instant matter, while this court’s final order involved a motion to dismiss, and not a motion for summary judgment, the proper analysis as set forth by Wolloch, supra, remains the same; that is, this court determined that appellant’s noncompliance with case management orders 1 and 10 had resulted in appellant’s failure to establish a prima facie case, and therefore dismissal of appellant’s action was proper.

III. CONCLUSION

For the foregoing reasons, this court’s order granting appellees’ motion to dismiss should be affirmed.


source: Caselaw Access Project

author: FORD, J.,

license: Public Domain

text:
    Argeros v. Knock on Wood Construction Co.

      ErikJ. Conrad, for plaintiff

      Joshua A. Gildea, for defendant
    May 15, 2013
   FORD, J.,

— This is an appeal in a breach of contract case involving the construction of a deck on the outside of a residence. After a non-jury trial that was conducted on November 29, 2012, and January 24, 2013, I entered a verdict on count I of the complaint, breach of contract, in favor of plaintiff, William Argeros, who is the owner of the residence, and against defendant, Knock On Wood Construction Company, which was the construction firm that built the deck. The verdict amount was $13,550, the amount plaintiff paid for the construction of the deck. As I explain in this opinion, the verdict was proper because the problems with the construction of the deck were pervasive which made it both unsound and unsightly.

I entered the verdict on March 8,2013. Defendant filed a post-trial motion on March 18.1 denied that on March 22. Defendant filed a notice of appeal to the appellate court on April 15, 2013, from the order dated March 22 denying the post-trial motion. Defendant had a judgment entered on May 9, 2013, in accord with the Superior Court’s directive dated May 3.

Defendant filed a statement under Pa.R.A.P. 1925(b) (“concise statement”) in which it identified five issues that it wants addressed on appeal. I discuss each issue in turn in this opinion which I file under Pa.R.A.P. 1925(a). I set forth my findings of fact from the trial which set the context for each issue.

Findings of Fact

1. Plaintiff, William Argeros, lives at 4117 Emerson Lane, Allentown, Lehigh County, Pennsylvania.

2. Defendant, Knock On Wood Construction Company, is a corporation with its principal place of business at 138 North New Street, Nazareth, Northampton County, Pennsylvania. This corporation, owned by Norman Boell, is in the business of building custom decks.

3. On June 8, 2009, plaintiff and defendant entered a written contract (Exhibit P-1) by which defendant agreed to provide materials and build a deck for plaintiff at his Emerson Lane residence. The deck was to be a 16 feet by 21 feet Trex deck. Under the contract, plaintiff agreed to pay defendant $13,550 for construction of the deck.

4. By the end of August 2009, plaintiff had paid defendant the full $13,550 pursuant to the contract. By that date, defendant had constructed a deck which it represented was built in accord with the contract.

5. In the initial period after construction of the deck, there was a cordial relationship between the parties. Plaintiff thanked Mr. Boell for his efforts by giving him Phillies tickets. However, after plaintiff started to use the deck, he noticed problems with it. In response to complaints from plaintiff, defendant did additional work on the deck. Defendant did this without an extra charge to plaintiff.

6. As time passed, plaintiff detected more problems with the deck. Plaintiff brought some of these issues to the attention of defendant. Defendant offered to come to plaintiff’s residence to attempt to correct the problems. However, plaintiff did not respond to defendant’s offers. Rather, plaintiff initiated the present suit.

7. When defendant excavated the holes for installation of the support posts and any concrete footings that it may have installed (it is unclear whether defendant installed concrete footings), it left the holes open for one-and-a-half days for inspection by the South Whitehall Township residential building inspector. Defendant did not advise plaintiff nor the inspector that the holes were available for inspection. Defendant then proceeded with further construction oblivious to whether an inspection of the holes and any concrete footings was conducted.

8. The support posts for the deck are not mechanically anchored to any concrete footings. Such attachment would have added stability to the deck.

9. The stair stringers rest on the ground instead of on concrete footings.

10. The support posts for the deck extend into the ground subjecting them to quicker onset of deterioration. The posts should have been installed on concrete footings that extend above the ground.

11. The girders or beams are not carriage bolted to the support columns. Carriage bolting would have provided proper support against vertical and lateral loads. Instead, the girders are attached to the support columns by the random use of nails and screws.

12. Several of the fasteners used on the deck are over-driven which has led to cracking of the wood used on the deck and can lead to further cracking.

13. A deck ledger attaches the deck to a wall of the residence using nails and screws. The ledger was installed outside or over the exterior siding of the house wall. Gray plastic flashing was installed over the top edge of the ledger. However, there was no flashing installed behind the ledger, creating the potential for water leakage.

14. Although the deck ledger is attached to the house wall, the deck utilizes two rows of support posts and girders. This feature suggests that defendant constructed the deck as a free-standing structure. To the extent that defendant designed the deck to be free-standing, the installation of bracing was necessary for stability. This was not done.

15. Joists are attached to the ledger board and rim joists with nails. Joist hangers should have been used to make this aspect of the deck firmer.

16. The stair stringers as attached to the deck are unsafe. Wooden blocking with nails, screws and some lag bolts were used. Proper hanging of the stair stringers required use of approved adjustable stair hangers. The wooden blocking that was used is unsightly, is of irregular shape and is splitting along its length where the hardware was installed in the blocking.

17. Some of the spindles in the railing system around the deck are spaced more than four inches apart. This creates the possibility of body parts’ getting stuck in those rails that are separated by more than four inches.

18. There is side to side movement of the railing with minimum pressure. This creates a hazard of falling through the railing for anyone who may lean against it with considerable pressure.

19. Some of the Trex boards used on the deck are light-colored interspersed with others which are dark-colored. Each board is fastened to the deck with center screws. According to Trex specifications, the boards should have been attached to the deck with screws placed in each joist in a zigzag pattern. This recommended configuration would prevent the boards from rocking.

20. The two gates to the two sets of stairs leading from the deck cannot be completely closed due to the uneven and imprecise construction of the deck railing system.

21. When one stands on the deck, that individual feels an unsteadiness to the structure.

22. The completed deck did not pass inspection by the South Whitehall Township building inspector because of the existence of violations of the construction code adopted by the township. Violations found by the inspector stemmed from certain deficiencies noted above, separately or in various combinations. The inspector posted a notice on the deck forbidding use of it.

23. The deck is unsafe for its intended use and is unsightly at various locations.

24. The unsafe conditions on the deck and the poor workmanship of it are pervasive. The additional remedial work suggested by defendant is insufficient. A new deck would have to be properly built to give plaintiff the deck for which he contracted.

Discussion and Conclusions of Law

The first issue raised in the concise statement is “whether the trial court erred in finding that only demolition of the deck and construction of a new deck could provide plaintiff with the benefit of his bargain, particularly where the township inspector testified that all issues with the deck were repairable.” I did not order demolition of the deck or construction of a new deck. Rather, I entered a verdict awarding plaintiff the proper amount of damages as a result of defendant’s breach of the contract that the parties entered.

Neither in this first issue nor in the other four issues raised in the concise statement does the defendant challenge the findings of fact as to the defects and deficiencies in the deck. Each problem with the construction of the deck enumerated in the findings of fact was described by the witnesses presented by the plaintiff at the trial. These witnesses included Paul Ashmore and Josh Heft who have experience in the construction of decks. Carl Wilson, the residential building inspector for South Whitehall Township, described many of the problems with the deck. Defendant’s own witnesses, Matthew Breyer and Norman Boell, the owner of the defendant corporation, acknowledged some of the defects. Many of the defects were obvious to a layman such as I am. I personally observed most of the defects during the on-site inspection on December 12, 2012. Therefore, there is an ample, unchallenged record to support my conclusions as to each defect I described in the findings of fact.

Although defendant’s phrasing of the first issue is not precise, it does adequately present for review the primaiy point of contention from the trial. Could plaintiff receive the deck for which he contracted by simply being paid the cost of the repairs suggested by defendant or are the problems with the deck fundamental and spread throughout so that repairs would be useless? The extent of the defects in the deck was a determination for me as the fact-finder. My finding that the deck was pervasively unsound and unsightly which repairs could not sufficiently remedy ought to be left intact because it is supported by competent evidence. See Triffin v. Dillabough, 552 Pa. 550, 716 A.2d 605 (1998) (noting that an appellate court is bound by a trial court’s findings of fact based on competent evidence). There was competent, believable testimony that the deck has serious structural defects and that repairs alone are insufficient to fix the defects. All of this was confirmed by my on-site visit to the residence and deck in December.

At the conclusion of defendant’s statement of the first issue in the concise statement, in arguing that I should have entered a verdict for repairs to the deck only, defendant adds the phrase “where the township inspector testified that all issues with the deck were repairable.” The building inspector, Mr. Wilson, gave explanations on how to correct many of the deficiencies but he did not explain all of them, for example, the lack of or inadequacy of concrete footers. He testified about what was needed to pass his inspection, not about whether plaintiff could get the deck for which he contracted through repairs only. This latter point was to be a determination for the finder of fact.

The second issue reads “whether the trial court erred in holding that the parties’ contract required anything more than a deck which could pass inspection.” Plaintiff contracted with defendant for construction of a deck which conformed to Trex specifications. Also, in a construction contract such as this, the builder gives an implied warranty that it will do the work in a skillful, careful and workmanlike manner and that the structure will be reasonably suitable for its purpose. See Metropolitan Edison Company v. United Engineers & Constructors, Inc., 4 Pa.D. & C. 3d. 473 (C.P. Philadelphia 1977); and Pontiere v. James Dinert, Inc., 426 Pa.Super. 576, 627 A.2d 1204 (1993). In entering the verdict, the court held the defendant to the implied warranty that he gave plaintiff when he agreed to undertake the work. He breached that warranty by providing a deck that is unsafe and unsightly. The failure to construct a structurally sound deck amounts to a failure of consideration by defendant and constitutes a breach by it of the parties’ contract. Furthermore, there is no provision in the contract (Exhibit P-1) whereby the defendant’s obligation was to provide a deck which would pass inspection. (It did not pass inspection and it remains condemned for use by anyone.)

Defendant’s next issue is “whether the trial court erred in awarding damages against defendant in the amount of $13,550 plus interest, thereby including amounts actually paid to a third party under the contract.” With this third issue, I believe (but I am not sure) defendant is reiterating some of the contentions that he made in the post-trial motion which he filed on March 18,2013. Those contentions were:

17. Moreover, plaintiffretains the materials he purchased from Fox Building Supply at a cost of $8,950.
18. The defendant received only $4,550 from plaintiff.
19. It is error to award defendant (sic) the value of funds paid to Fox Building Supply, a third party.
20. The “return of the money [Argeros] paid” cannot include money not paid to defendant for defendant’s services under the contract.

This issue was not raised at trial so there is no record about issues regarding supplies of materials for the deck. Instead, in the contract (Exhibit P-1), defendant undertook the responsibility to provide plaintiff one “16X21 Trex deck project including labor and materials” for $13,550 which plaintiff paid. The provision of materials for the deck which was poorly constructed was the responsibility of defendant and no one else.

The fourth issue is “whether the trial court erred in awarding ‘return of the money [plaintiff] paid’ as damages, rather than the cost to repair as the proper measure of damages in this matter.” Contrary to defendant’s assertion, I applied the correct measure of damages in entering the verdict.

The proper measure of damages in an action for breach of a construction contract is found in section 346 of the Restatement (First) of Contracts. The pertinent portions of that section are:

(1) For a breach by one who has contracted to construct a specified product, the other party, can get judgment for compensatory damages for all unavoidable harm that the builder had reason to foresee when the contract was made, less such part of the contract price as has not been paid and is not still payable, determined as follows:
(a) For defective or unfinished construction he can get judgment for either
(i) the reasonable cost of construction and completion in accordance with the contract, if this is possible and does not involve unreasonable economic waste; or
(ii) the difference between the value that the product contracted for would have had and the value of the performance that has been received by the plaintiff; if construction and completion in accordance with the contract would involve unreasonable economic waste.

This section of the Restatement has been adopted as the law in Pennsylvania. See Gadbois v. Leb-Co Builder, Inc., 312 Pa.Super. 144, 458 A.2d 555 (1983).

I have already explained that the deck cannot simply be repaired to provide plaintiff the deck for which he contracted. Thus, section 346(1)(a)(i) of the Restatement, the cost of completion (repair) argued by defendant, cannot be the proper measure of damages in this case. Rather, section 346(1)(a)(ii) provides the pertinent measure, namely, the difference between the value that the deck contracted for would have had if completed properly, $13,550, and the value of the performance that has been received by plaintiff, $0. That difference is $13,550, the verdict in this case.

The final issue is “whether the trial court erred in excusing plaintiff from the obligation to mitigate his alleged damages by maintaining or allowing defendant to repair the deck.”

A party injured by a breach of contract is under a duty to use reasonable care to mitigate the damages suffered as a result of the breach. Portside Investors, L.P. v. Northern Insurance Company of New York, 41 A.3d 1, 15 (Pa. Super. 2011). However, mitigation is not an issue under the evidence in this case. Plaintiff has done nothing to maintain the deck since he received the letter (Exhibit P-8) from and had the conversation with Mr. Wilson, the inspector for the township. In these, Mr. Wilson prohibited any use of the deck. There was no evidence about how maintenance by plaintiff over the many months that the deck was condemned would have corrected or improved the conditions on the deck since many of the problems are structural. Plaintiff’s loss with this deck stems from the original construction as opposed to deterioration through lack of maintenance.

For all of these reasons, the appeal should be denied.


author: HODGE, J.,

text:
    McIntyre v. McIntyre

      Holly L. Stabile, for plaintiff

      John J. DeCaro, for defendant
    May 20, 2013
   HODGE, J.,

— Before the court for disposition are competing exceptions to the recommended order and report of the equitable distribution master filed by the plaintiff, Teresa McIntyre (hereinafter, “wife”) and the defendant, Michael McIntyre (hereinafter, “husband”). The relevant factual and procedural background of this case is summarized as follows:

The parties were married in February of 1993 and separated on June 1, 2010. The parties have three minor children: Cody, age 16 years; Logan, age 14 years; and Indiana, age 6 years. During the parties’ marriage, husband managed various computer software businesses, which husband began developing prior to marriage. Wife worked primarily as a homemaker and caregiver for the parties’ three minor children. In 2006, the parties relocated to Lawrence County, Pennsylvania from La Vemia, Texas. Following the parties’ separation, wife returned to La Vernia, Texas. Wife remained in La Vemia, Texas where she continues to reside with the parties’ youngest two children, Logan and Indiana. On April 5, 2011, wife filed a complaint in divorce, wherein wife made claims for spousal support, alimony, equitable distribution, counsel fees and other equitable relief.

During the discovery phase, wife’s prior counsel filed a motion to withdraw as counsel on June 26,2012. Within the motion to withdraw as counsel, wife’s prior counsel acknowledged receipt of a petition for appointment of master from husband and provided that wife consented to his withdrawal. Husband’s counsel did not object to the motion to withdraw as counsel, provided that his request for appointment of master and any subsequently scheduled hearings not be delayed. On June 27, 2012 this court entered an order of court granting the motion to withdraw as counsel and directing that the equitable distribution hearing would not be continued “on the basis of counsel’s withdrawal ... or Plaintiff’s retention of new counsel.” See order of court dated June 27, 2012. Immediately following wife’s prior counsel’s presentation of the motion to withdraw as counsel, husband presented a motion to appoint master, which this court also granted. On July 11, 2012 the equitable distribution master scheduled an equitable distribution hearing for August 29, 2012. The master sent notice of the scheduling order on July 11, 2012. Wife had six weeks to obtain new counsel and prepare for the equitable distribution hearing.

On August 9,2012 wife contacted the master to request a continuance of the equitable distribution hearing. Wife informed the master that she retained John T. Haller, Esquire on July 25, 2012 to represent her in these proceedings. Attorney Haller informed wife on August 8, 2012 that he could not represent wife because he did not have adequate time to prepare. The master denied wife’s request for a continuance based on this court’s June 27, 2012 order, which prohibited any continuances based on wife’s inability to obtain counsel. On August 28, 2012, one day prior to the equitable distribution hearing, wife’s present counsel presented this court with a motion for continuance, wherein wife’s present counsel stated that she could not attend the August 29, 2012 hearing because she had “three scheduled events” on August 29,2012. This court denied wife’s second motion for continuance. Wife appeared at the equitable distribution hearing on August 29, 2012 pro se. She objected to the case proceeding to a hearing without having counsel present. N.T. August 29, 2012, pp. 5-6.

Following the August 29, 2012 equitable distribution hearing, the master filed a report and recommended order on October 29, 2012. The master filed an amendment to his report and recommended order of November 6, 2012. Both wife and husband filed timely objections to the master’s report and recommendations, which are presently before the court for a determination.

In disposing of these exceptions, the court observes that while a master’s report is advisory only, it is to be given great deference. Morschhauser v. Morschhauser, 357 Pa. Super 339, 516 A.2d 10 (1986); Fiorelli v. Fiorelli, 198 A.2d 369 (Pa. Super. 1964). A reviewing court has a duty to make a complete and independent review of the proceeding below. Rollman v. Rollman, 421 A.2d 755 (Pa. Super. 1980). In reviewing master’s considerations, however, the report should be given “fullest consideration” particularly on issues of credibility. Kohl v. Kohl, 564 A.2d 222 (Pa. Super. 1989). The review is intended to discover inherent improbabilities in the stories of the witnesses, inconsistencies and contradictions, bias, interest, and opposition to incontrovertible physical facts by which credibility may be ascertained. Rollman, 421 A.2d at 758. However, because the master is the person hearing the testimony and observing the demeanor and appearance of the witness, any issue of credibility must be resolved by giving the master’s findings the fullest consideration. Id.

Wife’s first exception contends that the equitable distribution master and the court erred in denying wife’s motions to continue, presented on August 9, 2012 and August 28, 2012, respectively. Wife argues that she was unduly prejudiced because she was unable to: 1) provide the master with an inventory and expense statement; 2) provide evidence regarding marital assets, which included the husband’s soft-ware businesses, real estate and personal property; 3) properly cross-examine husband’s testimony and the testimony of husband’s expert witness with respect to wife’s contribution to husband’s business and the value of that business; 4) present evidence to support her claim for alimony and equitable distribution. Wife contends that she was generally prejudiced by being forced to proceed with the equitable distribution hearing without proper representation.

Rule 216 of the Pennsylvania Rules of Civil Procedure sets forth the grounds for continuance. Rule 216 states:

(1) Agreements of all parties or their attorneys, if approved by the court;
(2) Illness of counsel of record, a material witness, or a party. If requested a certificate of a physician shall be furnished, stating that such illness will probably be of sufficient duration to prevent the ill person from participating in the trial;
(3) Inability to subpoena or to take testimony by deposition, commission, or letters rogatory, of any material witness, shown by affidavit which shall state:
(a) The facts to which the witness would testify if present or if his deposition should be taken;
(b) The grounds for believing that the absent witness would so testily or give his deposition;
(c) The efforts made to procure the attendance or deposition of such absent witness; and
(d) The reasons for believing that the witness will attend the trial at a subsequent date, or that his deposition can and will be obtained;
(4) Such special ground as may be allowed in the discretion of the court.”

Pa.R.C.P. 216.

The court looks to the case of Snyder v. Port Auth. of Allegheny County, 393 A.2d 911 (Pa. Super. 1978) to evaluate whether it erred in denying wife’s requests for a continuance. In that case, the plaintiff discharged her attorney and retained substitute counsel three days before trial was scheduled to begin. Id. 393 at 912. At the call of the list, new counsel requested a continuance for additional time to prepare. Id. The court granted a seven day continuance. Id. At the next call of the list, counsel again reported that it was not ready for trial, but the trial court ordered the case to proceed. Id. Five days later, on the day of the trial, the plaintiff and new counsel failed to appear. Id. Consequently, the defendant motioned for a nonsuit, and the trial court granted defendant’s request. Id. at 912-13. Plaintiff appealed the trial court’s decision, challenging in part, the trial court’s denial of a continuance.

On review, the Snyder Court of Pennsylvania stated:

[W]e do not feel it so unreasonable for the lower court to have granted only a one week continuance in this case based on the grounds of inadequate preparation due to change in counsel. Changing counsel only three days before the case was listed for trial is a risk the appellant must bear, and not the courts.

Id. at 914.

The Snyder court used a three part test to determine whether the trial court abused its discretion by denying a request for a continuance. The Snyder court analyzed “whether there was prejudice to the opposing party by a delay, whether opposing counsel was willing to continue the case, the length of the delay requested and the complexities involved in presenting the case.” Id. at 914 (citing Nerkowski v. Yellow Cab Co., 259 A.2d 171 (Pa. 1969).

Applying the three part analysis implemented by the Snyder court in considering wife’s first exception, the court first considers whether husband would have been prejudiced by a delay in the proceedings. Husband did file a response to [wife’s] motion for continuance, wherein husband articulated the procedural shortcomings of wife in these proceedings. However, husband’s response does not indicate any real prejudice husband might have incurred had this court originally granted wife’s request for a continuance.

The court understands that husband was paying a substantial sum to wife for “family” support each month. A delay in these proceedings might prejudice husband financially because husband would have to continue to pay in excess of $6,000.00 each month to wife. However, the court believes that this prejudice would be more properly cured by a retroactive support order instead of denying wife’s continuance. The court additionally acknowledges that husband has paid a substantial sum in attorney’s fees, expert costs and master’s fees for the August 29, 2012 equitable distribution hearing. Any further hearings would result in husband paying addition fees, which would also be prejudicial. Again, however, the court believes that these additional fees could be offset against wife’s share of the marital estate and resulting support award. The court, therefore, concludes that any prejudice suffered by husband can be cured and is deminimus in nature.

The court next considers whether husband opposed wife’s motion for a continuance. The record clearly establishes that husband adamantly opposed any continuances in these proceedings. Husband contends that wife consented to her prior counsel’s withdrawal and that any resulting conflicts wife may have experienced in retaining new counsel was foreseeable.

Finally, the court considers the length of the continuance requested and the complexities surrounding the underlying action. In each of wife’s motions, wife did not specify the length of time necessary to be prepared to try the economic claims pending before the equitable distribution master. In wife’s second motion, wife’s new counsel stated that she was only unavailable because she had previously been scheduled in three other matters. It is logical to infer that even a slight delay would have allowed wife’s new counsel to be present at the August 29, 2012 hearing.

Additionally, a thorough review of the master’s report leads this court to conclude that the economic issues surrounding the parties’ divorce were very complex. The marital assets included, in part, three residences with a total fair market value equaling $914,000.00, three businesses, and husband’s 401k. Each of the residences were encumbered with substantial mortgages. The court believes that expecting an inexperienced layperson to defend these issues pro se would prove to be an extremely difficult task.

While husband argues that wife was afforded every opportunity to present her case to the equitable distribution master, the court believes that Wife was prejudiced by this court’s refusal to continue the case. The court believes that wife was diligent in her search for new counsel following her prior counsel’s withdrawal on June 27,2012. Given the fact that an equitable distribution hearing was scheduled within two months of prior counsel’s withdrawal, the court understands why wife experienced difficulty in obtaining new counsel; especially considering the existence of the June 27, 2012 order, wherein this court stated that the equitable distribution hearing would not be continued “on the basis of counsel’s withdrawal...or plaintiff’s retention of new counsel.” At least one continuance should have been provided to wife given the complexity of this case.

For the foregoing reasons, wife’s first exception to the equitable distribution master’s report and recommended order is granted. The remaining exceptions raised by the parties are dismissed.

ORDER OF COURT

And now, this 20th day of May, 2013, with this case being before the court for argument on competing exceptions to the master’s report and recommended order, with Holly L. Stabile, Esquire, appearing and representing the plaintiff, Teresa McIntyre, and with John J. DeCaro, Jr., Esquire, appearing and representing the defendant, Michael McIntyre, and in consideration of the arguments presented by counsel, as well as the briefs filed on behalf of the respective parties, the court hereby orders and decrees as follows:

1. Plaintiff’s first exception to the report and recommended order of court filed by the equitable distribution master is granted.

2. All other exceptions filed on behalf of the parties are dismissed.

3. This case is remanded to the equitable distribution master to schedule a denovo equitable distribution hearing within sixty (60) days from the date of this order of court.

4. All costs incurred by defendant/husband for his counsel fees, expert witness or master’s fees relating to the denovo equitable distribution hearing shall be offset against any equitable distribution awarded to plaintiff/ wife.

5. The prothonotary shall properly serve notice of this order of court upon counsel of record for the parties and upon Robert J. DiBuono, Esquire.


author: MCINERNEY, J.,

text:
    ISN Bank v. Rajaratnam

      Leona Mogavero, for plaintiff

      Jared N. Klein, for defendant
    May 22, 2013
   MCINERNEY, J.,

I. OVERVIEW

Plaintiff ISN Bank, f/k/a Interstate Net Bank, now known as Customers Bank (“plaintiff’) appeals from this court’s January 23, 2013 order which denied plaintiff’s motion to consolidate a judgment entered against Emma Rajaratnam, individually, with a judgment entered against Arasu Rajaratnam, individually. Plaintiff sought consolidation of the judgments to aid in execution on property(ies) held by the Rajaratnams as tenants by the entireties.

On or about December 21, 2005, ISN Bank, f/k/a Interstate Net Bank (“ISN Bank”) made a construction loan to Tower Apartment Partnership, LLP (“Tower”). At that time, Arasu Rajaratnam, the principal of Tower, executed and delivered a guaranty agreement to ISN Bank (the “2005 Guaranty Agreement”). On or about October 26, 2007, ISN Bank and Tower entered into a change in terms agreement, which extended the maturity of the loan to June 21, 2008. At that time, Arasu Rajaratnam and his wife Emma Rajaratnam executed and delivered a guaranty agreement to ISN Bank (the “2007 Guaranty Agreement”).

The loan eventually went into default. On August 5, 2009, ISN Bank confessed judgment in its favor and against Arasu Rajaratnam in the Philadelphia Court of Common Pleas at August Term, 2009, No. 0363, pursuant to the 2005 Guaranty Agreement. On May 24, 2010, ISN Bank commenced an action against Emma Rajaratnam in the Philadelphia Court of Common Pleas at May Term, 2010, No. 3129, pursuant to the 2007 Guaranty Agreement and, on April 25, 2012, judgment was. entered in favor of plaintiff and against Emma Rajaratnam.

This court properly denied plaintiff’s motion to consolidate the judgments because plaintiff cited no relevant authority to support its proposition that this court had the power to consolidate judgments entered separately against different persons. Moreover, even assuming authority to consolidate judgments entered against different persons existed, the court properly denied plaintiff’s motion because in this case the judgments were entered pursuant to different guaranties and/or there was not a joint act or clear indication the Rajaratnams intended to waive their rights as tenants by the entirety.

II. FACTUAL AND PROCEDURAL HISTORY

On or about December 21, 2005, ISN Bank, f/k/a Interstate Net Bank (“ISN Bank”) made a loan to Tower Apartment Partnership, LLP (“Tower”) in the form of a non-revolving line of credit construction loan in the maximum amount of $6,980,395 (the “Tower Loan” or the “Loan”). The Tower Loan was evidenced by a note, which was executed and delivered to ISN Bank by Tower. The purpose of the Tower Loan was to finance Tower’s renovation of a property located at 5801 Morris Street, Philadelphia, PA into a thirty-six (36) unit condominium development.

In order to secure Tower’s obligations to ISN Bank, on or about December 21, 2005, Tower also executed and delivered to ISN Bank a mortgage, assignment of rents, and security agreement for 5801 Morris Street. At that time, Arasu Rajaratnam, the principal of Tower, also executed and delivered a guaranty agreement to ISN Bank (the “2005 Guaranty Agreement”).

The Tower Loan was originally due and payable in full on December 21, 2007. However, on or about October 26, 2007, ISN Bank and Tower entered into a change in terms agreement, which extended the maturity of the Loan to June 21, 2008. At that time, Arasu Rajaratnam and his wife Emma Rajaratnam also executed and delivered a guaranty agreement to ISN Bank (the “2007 Guaranty Agreement”).

The Tower Loan eventually went into default. As a consequence of Tower’s default, judgment by confession was entered on August 5, 2009 in favor of ISN Bank and against Tower in the Philadelphia Court of Common Pleas at August Term, 2009, No. 0362. On that date, judgment by confession was also entered in favor of ISN Bank and against Arasu Rajaratnam in the Philadelphia Court of Common Pleas at August Term, 2009, No. 0363, pursuant to the 2005 Guaranty Agreement. Emma Rajaratnam was not named as a defendant in ISN Bank’s action against Arasu Rajaratnam.

As a consequence the Tower Loan being in default, and based upon her obligations under the 2007 Guaranty Agreement, ISN Bank commenced an action against Emma Rajaratnam by filing a complaint on May 24, 2010 in the Philadelphia Court of Common Pleas at May Term, 2010, No. 3129. Arasu Rajaratnam was not named as a defendant in ISN Bank’s action against Emma Rajaratnam.

On or about September 17, 2010, ISN Bank was closed by the New Jersey Department of Banking and Insurance and subsequently the Federal Deposit Insurance Corporation (“FDIC”) was named as receiver. At that time, Plaintiff purchased certain ISN Bank’s assets, including the Tower Loan, from the FDIC.

On July 11, 2011, the Morris Street property was sold at a sheriff’s sale and purchased by plaintiff. Thereafter, plaintiff filed a petition to fix fair market value and establish deficiency judgment in the Philadelphia Court of Common Pleas at August Term, 2009, No. 00362, naming Tower, Arasu Rajaratnam, Emma Rajaratnam, Philadelphia Holdings Group, L.P., Phos Holdings, LLC, and Keswick Associates as respondents.

On February 29, 2012, a bench trial was held before this court in the action against Emma Rajaratnam at May Term, 2010, No. 3129. Following the bench trial, this court found Emma Rajaratnam was bound by the terms of the guaranty she signed and obligated for the indebtedness due and owing under the 2007 Guaranty Agreement/Tower Loan. On April 25,2012, judgment was entered in favor of plaintiff and against Emma Rajaratnam in an amount to be determined by resolution of the aforementioned deficiency judgment petition that had been filed in the action against Tower at August Term, 2009, No. 0362.

On June 19, 2012, the deficiency judgment petition was disposed of by a court-approved stipulation of the parties, which had been approved by the Honorable Idee C. Fox. Pursuant to the court-approved stipulation, a deficiency judgment was established in favor of plaintiff in the amount of $3,300,764.53, plus additional interest accruing from and after May 23, 2012 at the legal rate of $515,798 per day.

On December 3, 2012, plaintiff moved to consolidate the judgments entered in the above-captioned cases, i.e. the judgment entered against Arasu Rajaratnam, individually, and the judgment entered against Emma Rajaratnam, individually (collectively, “defendants” or “the Rajaratnams”). In its motion, having cited case law to support the position that this court has authority to consolidate judgments, plaintiff argued that as “[bjoth judgments arise from the same indebtedness, the Loan, ... it is therefore appropriate that they be consolidated.” (See PL’s Mot. ¶¶30, 32.) Plaintiff sought an order “consolidating the separate judgments against Arasu Rajaratnam and Emma Rajaratnam into a single judgment in favor of plaintiff and against Emma Rajaratnam and Arasu Rajaratnam, [as] husband and wife, jointly and severally, in the amount of the outstanding indebtedness fixed by the [stipulation approved by Judge Fox on June 19,2011.” (Pl.’s Mot. ¶30.) And the reason plaintiff sought this consolidation was because according to plaintiff, “Pennsylvania caselaw is clear that where obligations of husband and wife arise from a single indebtedness, entireties property may be reached by the creditor to whom such indebtedness is owed.” (Pl.’s Mem. p. 5.)

To support its position that there is a joint liability or single indebtedness in this case for which plaintiff may reach property held by defendants in tenancy by the entireties, plaintiff primarily relied on In re Bialon, 1986 Bankr. LEXIS 4875 (Bankr. W.D. Pa. 1986), which found there to be a joint debt between a husband and wife for which entireties property was not exempt from process under Pennsylvania law, and argued the facts of this case were even more favorable than they were there. In addition, plaintiff relied on the fact that defendants were both respondents to plaintiffs deficiency judgment petition and stipulated to the amount of the deficiency judgment in favor of plaintiff. (Pl.’s mem. p. 6.) According to plaintiff, “[b]y stipulating to the judgment, Arasu Rajaratnam and Emma Rajaratnam reaffirmed their joint liability for the Loan, and implicitly acknowledged that the Loan is a joint obligation for which jointly held assets could be reached in satisfaction thereof.” (Pl.’s Mot. ¶35.)

On December 21, 2012, defendants responded to plaintiff’s motion to consolidate judgments. In their response, defendants began by arguing consolidation of judgments against different debtors is not appropriate. (Defs.’ mem. p. 3.) First, defendants stated consolidation was not appropriate because “Pennsylvania Rule of Civil Procedure 3025.1 addresses [consolidation of [j] udgments, and notes that only judgments ‘entered against the same person in the same county’ may be consolidated” and the judgments here “have been entered against different people, making them inappropriate for consolidation.” (Defs.’s mem. p. 3.) Next, defendants asserted the cases cited by plaintiff in support of the position that this court has authority to consolidate judgments were inapplicable because “[wjhile they do hold that judgments may be consolidated into a single judgment, in each case the judgments at issue were against a single person....” (Defs.’s mem. p. 3.)

Addressing the issue of whether there is a joint liability or single indebtedness between them in this matter, defendants argued there was not as “these judgments did not create, and were not intended to create, a joint liability.” (Defs.’ mem. p. 4.) To support their position, Defendants relied on A. Hupfel’s Sons v. Getty, 299 F. 939 (3d Cir. 1924), Blusiewicz v. Rosenfield, 33 Pa. D. & C.2d 470 (C.P. Montgomery, 1964), and In re Holler, 2012 U.S. Dist. LEXIS 114335 (E.D. Pa. 2012) and argued:

Plaintiff’s extensive reliance on In re Bialon ... is ... misplaced. In that case, in distinguishing A. Hupfel’s Sons, the Bialon court noted that the spousal parties gave and received identical consideration — each agreed to pay rental fees so that the debtor could operate a business. However, as noted in Holler, the “Bialon court ignored the necessity of 'a joint act consenting to a change in the attributes of the estate.”’ Holler at * 11, see also Hupfel, 299 F. at 941, Blusiewicz, 33 PaD. & C. 2d at 473. In this case, there is no indication that the the Rajaratnam’s intended to waive their rights as tenants by the entirety. The fact they both signed the same generic document, created for a purpose separate and distinct from and for different consideration than the original loan to Tower ..., does not establish any intent to create a joint obligation or to waive the protections of tenants by the entireties. As a result, this Court should share the opinion of Blusiewicz ... and hold that “There cannot be an execution against property held as tenants by the entireties unless it is upon a judgment wherein defendants have acted jointly as tenants by the entireties and by their action have waived the substantive law of tenants by the entireties....”

(Defs.’ mem. p. 6.)

Defendants also argued the deficiency judgment stipulation did not create any joint obligation. Defendants started by pointing out the stipulation does not expressly create a joint liability or acknowledge jointly held assets could be reached in satisfaction of the Loan, noting plaintiff only argued agreeing to the stipulation was some sort of “implicit acknowledgement” of the same. Defendants next asked this court to look at the stipulation and, in turn, argued:

Nowhere in that [stipulation do the parties assume liability for the underlying debts as “joint” debts. Nowhere are the obligations referred to as joint debts. Nowhere does the [c]ourt impose any joint liability, as Plaintiff suggests. Instead, the [cjourt did what was appropriate on a Petition to Fix Fair Market Value — it set the value of the property, and, accordingly, the amount of the deficiency. It made no finding of liability, of any kind. Counsel’s suggestion that the [stipulation did otherwise, explicitly or implicitly, is just false.

(Defs.’ mem. p. 7.)

By order dated January 23, 2013 and docketed January 24,2013, this court denied plaintiff’s motion to consolidate the judgments. On February 4,2013, plaintiff filed a motion for reconsideration, which was subsequently denied. On February 22,2013, plaintiff filed a timely notice of appeal. Thereafter, this court ordered plaintiff to file a Pa. R. App. P. 1925(b) statement.

In its 1925(b) statement, plaintiff complains that this court erred in denying plaintiff’s motion to consolidate the judgments entered against Arasu Rajaratnam and Emma Rajaratnam in the separate actions into a single judgment in favor of plaintiff and “against Arasu Rajaratnam and Emma Rajaratnam, [as] husband and wife, jointly and severally, in the amount of the outstanding indebtedness fixed by the [stipulation approved by Judge Idee C. Fox on June 19, 2011” because:

(1) “both judgments resulted from the same indebtedness to [Plaintiff] (the ‘Loan’);”

(2) “Arasu Rajaratnam and Emma Rajaratnam together executed a single document, the 2007 [Guaranty] Agreement, evidencing their agreement to be jointly liable for the Loan;”

(3) “both Arasu Rajaratnam and Emma Rajaratnam were named as respondents to [Plaintiff’s] Petition to Fix Fair Marke[t] Value and Establish Deficiency Judgment in connection with the balance of the Loan (following the sheriff’s sale of mortgaged property securing the Loan). By their counsel, Arasu Raj aratnam and Emma Raj aratnam entered into a [stipulation establishing their joint liability for the balance of the indebtedness under the Loan, which [stipulation was approved as an Order of Court.” (Pl.’s 1925(b) Statement.)

We issue this opinion in support of the order denying plaintiff’s motion to consolidate the judgments, which was properly denied for the following reasons.

III. DISCUSSION

First, plaintiff’s motion was properly denied because it cited no relevant authority to support its proposition that this court had power to consolidate judgments entered against different persons. To support its proposition, plaintiff relied on the cases of Appeal of Reed., 7 Pa. 65 (1847) and Appeal of Yeager, 18 A. 137 (Pa. 1889).

. In Reed, on a scire facias to revive judgments, several judgments against Daniel McVey were revived and consolidated into one in favor of Henry Welty. After the real estate belonging to McVey was sold at sheriffs sale, the money was awarded to Welty. On appeal, other judgment holders argued Welty’s judgments could not be legally revived by consolidation. The other judgments creditors challenged the revival and consolidation because they held some judgments against McVey that were older than some of those held by Welty, but they had failed to revive their judgments by scire facias within five years of the entry of the judgments in order to maintain the priority of their liens. On appeal, the Pennsylvania Supreme Court held Welty’s judgments against McVey could be revived and consolidated into one in a scire facias to revive judgments.

In Yeager, three judgments against Henry Beshler were revived and consolidated into one in favor of Jacob Hartman pursuant to an agreement signed by both Beshler and Hartman. On appeal, other judgment holders challenged whether the consolidated judgment preserved the priority of Hartman’s three former judgments over the judgments of the other creditors. In affirming that it did, the court noted Reed decided “several judgments may be entered, and their lien continued, in one consolidated judgment.”.

As argued by defendants, and as relevant here, the cases cited by plaintiff do not stand for more than the proposition that several judgments entered against one person may be revived and consolidated into one consolidated judgment against that person. In the case of the Rajaratnams, however, we had judgments entered against different persons. As such, plaintiff failed to cite relevant authority to support its contention that this court had the power to consolidate judgments entered against different persons, and its motion was properly denied.

In addition, even assuming authority to consolidate judgments entered against different persons existed, the court properly denied plaintiff’s motion because the judgments in this case were entered pursuant to different guaranties and/or there was not a joint act or clear indication in this case that the Rajaratnams intended to waive their rights as tenants by the entireties.

Here, the judgments were entered pursuant to different guaranties: the judgment against Arasu Rajaratnam was entered pursuant to the 2005 Guaranty Agreement that only he signed when the Loan was taken out, while the j udgment against Emma Raj aratnam was entered as a result of the 2007 Guaranty Agreement that Arasu Rajaratnam had also signed when the change in terms agreement was executed. The court found this significant because, as will be discussed further infra, plaintiff argued the joint act of Defendants that exposed their entireties property to execution is the signing of the 2007 Guaranty Agreement. The judgment against Arasu Rajaratnam, however, does not flow from the 2007 Guaranty Agreement, it flows from the 2005 Guaranty Agreement that only he signed. Thus, plaintiff’s judgments are not the result of and do not arise from the joint action plaintiff charged created a joint debt that exposed defendants’ entireties property to execution, and in this court’s estimation they could not properly be consolidated to that end. Rather, they are judgments separately entered against different persons at different times in different legal proceedings on different obligations — the 2005 Guaranty Agreement and the 2007 Guaranty Agreement — and cannot properly be consolidated or used to reach an estate by entireties.

Moreover, even if only the 2007 Guaranty was at issue, the court would still not have consolidated the judgments because in this case there was not a joint act or clear indication the Rajaratnams intended to waive their rights as tenants by the entireties. A central issue in plaintiff’s motion and defendants’ response in opposition thereto was whether there was a joint liability or single indebtedness in this case for which plaintiff may reach property held by defendants in tenancy by the entireties. Before we show why there is not a joint act or clear indication the Rajaratnams intended to waive their rights as tenants by the entireties and, consequently, a joint liability or single indebtedness in this case, and why plaintiff should not be allowed to obtain a judgment enforceable against entireties property held by defendants, we will review the sparse cases in this area, which are essentially those cited by the parties.

In A. Hupfel’s Sons v. Getty, 299 F. 939 (3d Cir. 1924), the Third Circuit Court of Appeals was faced with an issue of whether a husband and wife who sold a property they held as tenants by the entireties did so free of two judgments previously entered separately against them by the same creditor. In that case, the husband borrowed money from Hupfel’s to pay an existing debt and to purchase beer for his saloon. Id. at 940-41. After he defaulted on the loans, and Hupfel’s obtained a judgment against him, the wife agreed to assume payment of the husband’s debt in exchange for a loan from Hupfel’s to purchase a liquor license, evidently intending to take over his saloon. Id. at 941. In time she too defaulted and Hupfel’s obtained a judgment against her. Id.

On appeal, the Third Circuit held the obligations of the husband and wife to the j udgment creditor did not constitute a joint debt under Pennsylvania law, and that they sold the property free of the judgments. Id. at 939-41. In reaching this holding, the court looked at the Pennsylvania Supreme Court’s opinion in Beihl v. Martin, 84 A. 953 (Pa. 1912), and cited it for the following principles:

(1) while a judgment against a husband or wife would create a lien against the expectancy of the debtor spouse in property held as tenants by the entireties, the judgment is not enforceable against the debtor spouse to the injury of the other spouse during the running of the estate but is only enforceable when, upon survivorship, the expectancy ripens into a realized fact;

(2) “such a lien is nevertheless subject to be divested by a subsequent conveyance in which both have joined[;]” and

(3) while neither a husband or wife can divest himself or herself of any part of an estate held as tenants by the entireties, the interest of each being in the whole of the property, “’[b]y their joint act they admittedly have the right to sell and dispose of the whole estate; by their joint act they may strip the estate of its attributes and create a wholly different estate in themselves.’” Hupfel’s, 299 F. at 940, quoting Beihl, 84 A. at 956.

With regard to the rules from Beihl laid out above, Hupfel’s argued on appeal “that the phrase ‘their joint act’ ... is not limited to a joint act of alienation or of mortgage, or of entering into a joint obligation for the enforcement of which the law gives a joint judgment, but that it extends to transactions where husband and wife, though acting separately, have in effect entered into one obligation and in that sense have acted jointly.” Hupfel’s, 299 F. at 940. Hupfel’s then proceeded to argue:

that the two judgments were based upon the same indebtedness and that in entering into separate obligations for the same indebtedness the two parties, husband and wife, performed a joint act which, though later reflected in separate judgments, falls within the rule which permits tenants by entireties, when acting together, to strip their estate of its attributes and make it liable for their obligations ahead of their right otherwise to alienate the property free of liens against either of them.

Id. at 941.

In rejecting Hupfel’s argument, the Third Circuit first noted that it “doubt[ed] whether a common origin of separate debts based upon different considerations is the test of the ‘joint act’ of which the court spoke in Beihl v. Martin.” Id. Rather, the court stated it was “inclined to think that the joint act which the court contemplated is a joint act consenting to a change in the attributes of the estate in themselves and not their consent to antecedent transactions.” Id. Nevertheless, the court stated that it failed to find joint action in any sense, noting the husband and wife “were without doubt mutually interested in the transactions which resulted in the two judgments[,] [b]ut mutuality of interest in separate transactions out of which have grown separate obligations based upon different considerations does not amount to joint action within [its] understanding of the law....” Id.

In In re Bialon, 67 B.R. 451, 452 (Bankr. W.D. Pa. 1986), the United States Bankruptcy Court for the Western District of Pennsylvania was faced with an issue of whether a lessor/creditor held a joint claim against a debtor in bankruptcy and the debtor’s husband that would have subjected the couples’ entireties property to process under Pennsylvania law. The issue was before the court because if the claim was joint, the couples’ entireties property could not be claimed as exempt under federal bankruptcy law and would be available to satisfy the creditor’s claim. See id.

In that case, the debtor wife entered into a lease with the lessor/creditor for the rental of a store in a shopping mall, while her husband entered into an “Individual Guaranty,” agreeing to be liable for her debt if she defaulted. Id. at 452-53. Eventually, the debtor went into default on the lease and subsequently filed a petition for bankruptcy “wherein she elected to exempt all her entireties property pursuant to applicable Pennsylvania law.” Id. at 453. The lessor/ creditor sought relief from the automatic stay provision of the Bankruptcy Code and the claimed exemptions. See id.

The Bialon court first reviewed Pennsylvania law regarding property held as tenants by the entireties and creditors, finding that if the lessor/creditor held a joint debt of the husband and wife, the entireties property would not be immune from process and should be available to satisfy the claim. Id. The court next reviewed Pennsylvania law pertaining to guaranties and sureties and determined that the guaranty in question, although titled “Individual Guaranty,” was actually a suretyship agreement under Pennsylvania law and, therefore, debtor’s husband was primarily liable with the debtor, as a surety, for the lease obligations. Id. “By virtue of both the lease and the guaranty, the court [then] declared without referring to Pennsylvania law, that [the] debtor and her husband were jointly liable for the debt upon [the] debtor’s default under the lease.” In re Holler, 463 B.R. 733, 744 (Bankr. E.D. Pa. 2011)(footnote omitted), citing In re Bialon, 67 B.R. at 454. The court also found that the lease and guaranty created identical obligations as to the duration, contingencies, and amount owed, thereby producing a single debt owed for the lease payment. In re Bialon, 61 B.R. at 454.

Lastly, the court distinguished Hupfel ;s by stating that although Hupfel’s involved a husband and wife, with one spouse agreeing to guaranty the other’s indebtedness, the Third Circuit had found no joint act because there were separate transactions and considerations given for each obligation, whereas in Bialon, the court found that the consideration that the debtor and her husband gave and received was identical. In re Bialon, 67 B.R. at 454. In reaching this finding, the court stated each spouse agreed to pay rental fees, the debtor/wife as principal and her husband as guarantor, so that the debtor/wife could operate her business from the leased premises. Id. The court also stated that the lease and the guaranty while physically separate documents, created a joint obligation, making the debtor and her husband jointly and severally liable to the lessor/creditor. Id. The court concluded the entireties property of the debtor and her husband was not exempt from process under Pennsylvania law and therefore could not be exempted under bankruptcy law, and granted the creditor relief from the stay to pursue its claims against the debtor and her husband. Id.

In In re Holler, 2012 WL 3526466 (E.D. Pa. 2012), the United States District Court for the Eastern District of Pennsylvania addressed essentially the same issue that was addressed in In re Bialon, There, the creditor made two loans to a business of which the wife was the sole shareholder and an officer and the husband an officer. Id. at *1. For each of the loans, the husband and wife executed separate commercial guaranties. Id. Eventually, the business defaulted on the loans and the creditor confessed four separate judgments per the two guaranties. Id. Subsequently, the husband and wife filed a joint petition for bankruptcy and claimed an exemption for their home. Id. Each then filed a motion to avoid the liens of the judgments on their home, which the bankruptcy court granted. Id.

On appeal, the district court first reviewed Pennsylvania law regarding property held as tenants by the entireties and creditors, concluding that if the judgments constituted joint debts, the debtors’ home would not be immune from process, and they would not be entitled to avoidance of the liens. Id. at *2. The court, however, agreed with the bankruptcy court that the judgments. did not constitute joint debts and affirmed. Id. at *3-4.

In reaching this disposition, the court first looked at Hupfel’s and found it to be controlling. Id. at *3. Like in Hupfel’s, the court found there was not a joint act consenting to a change in the attributes of the estate, noting that (1) the judgment creditor did not have the husband and wife execute a single guaranty agreement, (2) the separate guaranty agreements they signed made them each liable as individuals for the full amount of the loans to the business, and (3) nothing in the documents evidenced an intent to act jointly as spouses or as tenants by the entireties and were “devoid of any indication that they intended to act together and waive their rights as tenants by the entireties.” Id.

The court also found the judgment creditor’s reliance on In re Bialon to be misplaced, concluding “the Bialon court ignored the necessity of a joint act consenting to a change in the attributes of the estate” as posited by Hupfel’s. In re Holler, 2012 WL 3526466 at *4 (quotations omitted). To support the proposition that a joint act consenting to a change in the attributes of the estate was a necessary to subject a couples’ entireties property to process under Pennsylvania law, the Holler court also cited to the Montgomery Court of Common Pleas decision in Blusiewicz v. Rosenfield, 33 Pa. D. & C.2d 470 (Pa. Ct. Com. Pl., Montgomery County, 1964).

Blusiewicz is the only Pennsylvania state court decision to address the issue of whether judgments separately entered against a husband and a wife could constitute a lien against property they held as tenants by the entireties. See Howard Sav. Bank v. Cohen, 607 A.2d 1077, 1079 (1992). See also In re Holler, 463 B.R. at 742. There, following an action against a husband and wife related to an insurance business they had in Illinois, a judgment was entered against them in Illinois, not as husband and wife, but individually. See Blusiewicz, 33 Pa. D. & C.2d at 470.

Subsequently, the judgment creditor tried to execute on real estate held by them as tenants by the entireties in Pennsylvania and the common pleas court was “faced with the question of whether a judgment entered against a husband and wife individually is a valid lien on real estate held by them as tenants by the entireties.” Id. at 470-71. To determine the issue, the court relied in part onHupfel’s and stated:

The principle established by [cases such as Hupfel fr] as a whole is that there cannot be an execution against property held as tenants by the entireties unless it is upon a judgment wherein defendants have acted jointly as tenants by the entireties and by their action have waived the substantive law of tenants by the entireties.

Id. at 473. The court then found the husband and wife had not acted jointly as tenants by the entireties and their action had not waived the substantive law of tenants by the entireties, noting: the judgment obtained in Illinois was against the husband and wife individually; no mention was made in the judgment that they were husband and wife; and the residence was not owned by them individually, but rather as tenants by the entireties, and was in no way connected to their insurance business. Id. Thus, the court concluded it was “of the opinion that the incidents of tenants by the entireties should not be destroyed, and accordingly, [it would] not disregard them.” Id.

While the caselaw is relatively sparse, this court concluded that Hupfel’s and Blusiewicz provide an accurate assessment of the law of Pennsylvania in this area. To wit, we concluded that the judgments could not properly be consolidated, and there could not be execution against property held by defendants as tenants by the entireties, unless the judgments were the result of the Rajaratnams having acted jointly as tenants by the entireties and having waived the substantive law of tenants by the entireties by their joint action. See Blusiewicz, 33 Pa. D. & C.2d at 473. The joint act or action that is required “is a joint act [or action] consenting to a change in the attributes of the estate in [the husband and wife] and not their consent to antecedent transactions.” Hupfel’s, 299 F. 939 at 941.

That said, the judgments plaintiff sought to combine in this case are not the result of the Rajaratnams having acted jointly as tenants by the entireties. Rather, as stated above, the judgments were entered pursuant to different guaranties: the judgment against Arasu Rajaratnam was entered pursuant to the 2005 Guaranty Agreement that only he signed when the Loan was taken out, while the judgment against Emma Raj aratnam was entered as a result of the 2007 Guaranty Agreement that Arasu Rajaratnam had also signed when the change in terms agreement was executed.

In large part, plaintiff complains this court erred in not consolidating the judgments because “both judgments resulted from the same indebtedness to [Plaintiff] (the ‘Loan’)” and “Arasu Rajaratnam and Emma Rajaratnam together executed a single document, the 2007 [Guaranty] Agreement, evidencing their agreement to be jointly liable for the Loan[.]” (Pl.’s 1925(b) statement.) While the judgments result in the Rajaratnams being liable for the same indebtedness, the Loan, plaintiff’s judgments are not the result of and do not arise from the joint action plaintiff charged created a joint debt that exposed defendants’ entireties property to execution, the signing of the 2007 Guaranty Agreement. Rather, only the judgment against Emma Rajaratnam resulted from the signing of the 2007 Guaranty Agreement. The judgment against Arasu Rajaratnam resulted from the 2005 Guaranty Agreement that only he signed. Thus, the judgments were the result of separate transactions and different obligations on the part of defendants.

The consideration that Arasu Rajaratnam gave and received for executing the 2005 Guaranty Agreement was also different from the consideration that Emma Rajaratnam gave and received for executing the 2007 Guaranty Agreement. The 2005 Guaranty Agreement was given to secure the Loan. The 2007 Guaranty Agreement was given to secure the change in terms agreement that extended the maturity of the Loan. Compare In re Bialon, 67 B.R. at 454 (finding the consideration that the debtor and her husband gave and received in executing their respective instruments was identical) with Hupfel’s, 299 F. at 940 (finding the consideration that the husband and wife gave and received in entering into their respective obligations was different).

In the opinion of this court, the judgments could not properly be consolidated, or used to reach an estate by entireties, as consolidation in this case would not create a consolidated judgment that was the accumulation of judgments wherein defendants had acted jointly as tenants by the entireties and had waived the substantive law of tenants by the entireties by their j oint action. See Blusiewicz, 33 Pa. D. & C.2d at 473 (“[T]here cannot be an execution against property held as tenants by the entireties unless it is upon a judgment wherein defendants have acted jointly as tenants by the entireties and by their action have waived the substantive law of tenants by the entireties.”). Rather, the judgments at issue were separately entered against different persons at different times in different legal proceedings on different obligations — the 2005 Guaranty Agreement and the 2007 Guaranty Agreement — as the result of different consideration and cannot properly be consolidated or used to reach an estate by entireties. See Hupfel’s, 299 F. 939 at 941 (noting “mutuality of interest in separate transactions out of which have grown separate obligations based upon different considerations does not amount to joint action within [its] understanding of the law....”).

Moreover, even if only the 2007 Guaranty was at issue, the court would still not have consolidated the judgments because in this case there was not a joint act or clear indication the Rajaratnams intended to waive their rights as tenants by the entireties. The language of the 2007 Guaranty Agreement is individual and generic in nature. Nothing in the 2007 Guaranty Agreement referred to the Rajaratnams marital relationship or their ownership of property as tenants by the entireties or suggested that they consented to change the protective attributes of owning property such as a home as tenants by the entireties.

The only language that remotely touches on the issue was the following: “Interpretation. In all cases where there is more than one Borrower or Guarantor, then all words used in this Guaranty in the singular shall be deemed to have been used in the plural where the context and construction so require....” (2007 Guar. Agreement at 3.) However, as explained in Holler, this language merely maintains grammatical accuracy when more than one party signed the document. See In re Holler, 2012 WL 3526466 *4. And this court found it significant that this guaranty, generic in nature could have been signed by any two people - — ■ husband and wife; brother and sister; grandparent and grandchild; or two total strangers — making its signing far less than a clear indication the Rajaratnams intended to waive their rights as tenants by the entireties.

Plaintiff could have included express language in the guaranty waiving the protections of tenancy by the entireties or required the Rajaratnams execute the guaranty as husband and wife, etc. but it did not. Rather, plaintiff had the Rajaratnams sign a generic document that does not evidence that they acted jointly as tenants by the entireties and waived the substantive law of tenancy by the entireties.

The fact that Emma Rajaratnam and Arasu Rajaratnam both signed the 2007 Guaranty Agreement does not change this. While the court in Holler found it significant that the husband and wife signed separate guaranties, this court did not find it dispositive as argued by plaintiff. (Pl.’s mem. p. 6.) As stated above, the 2007 Guaranty Agreement was generic in nature. In the absence of a clear indication that the Rajaratnams acted jointly and intended to waive their rights as tenants by the entireties, this court would not hold that they had a joint liability or single indebtedness for which plaintiff could reach property held by them as tenants by the entireties.

And more than liability for the same debt is needed to allow judgment liens to encumber entireties property. Plaintiff argued consolidation was appropriate because the judgments against the Rajaratnams arise from the same indebtedness, the Loan. (Pl.’s mem. p. 5.) In both Hupfel’s and Blusiewicz, however, more than liability for the same debt was required. Following Hupfel’s and Blusiewicz, this court required more as well.

Regarding the case upon which plaintiff primarily relied, Bialon, as noted in Holler, and as argued by defendants, “the Bialon court ignored the necessity of ‘a joint act consenting to a change in the attributes of the estate’” as required in Hupfel’s and Blusiewicz, In re Holler, 2012 WL 3526466 at *4, quoting A. Hupfel’s Sons, 299 F. at 941 and citing Blusiewicz, 33 Pa. D. & C.2d at 473. Accordingly, this court did not find Bialon to be very instructive.

Finally, the fair market stipulation did not create any joint obligation between Emma Rajaratnam and Arasu Rajaratnam. As argued by defendants, the deficiency judgment stipulation did not expressly create a joint liability or acknowledge jointly held assets could be reached in satisfaction of the Loan, nor did plaintiff even argue that it did. Rather, plaintiff only argued agreeing to the stipulation was some sort of “implicit acknowledgement” of the same. Looking at the stipulation, however, this court did not agree with plaintiff. Nothing in the stipulation evidences intent by the Rajaratnams to be jointly responsible for the Tower Loan. The stipulation merely accomplished the purpose of the petition to fix fair market value to set the value of the property so that the amount of the deficiency could be calculated.

      . A scire facias is “[a]writ requiring the person against whom it is issued to appear and show cause why some matter of record should not be annulled or vacated, or why a dormant judgment against that person should not be revived.” SCIRE FACIAS, Black’s Law Dictionary (9th ed. 2009).

      . Further, it appears to this court that Pennsylvania Rule of Civil Procedure 3025.1 cited by defendants codifies principles laid out in Reed and Yeager, including that several judgments entered against one person may be revived and consolidated into one consolidated judgment against that person.
      Rule 3025.1, titled “Consolidation of Judgments,” falls under the section of the Rules dealing with revival of judgments liens and provides, in part:
      A judgment creditor who holds two or more judgments entered against the same person in the same county may consolidate the judgments by filing
      (1) a single praecipe requesting the issuance of a single consolidated writ of revival, or
      (2) an agreement to enter a consolidated judgment and revive the lien thereof.
      ***

        Note: Consolidation does not affect the lien priority of each judgment consolidated.
      Pa. R. Civ. P. 3025.1.
      Rule 3025.1 addresses issues presented in Reed and Yeager and only provides that two or more judgments entered against the same person may be consolidated. This court did not see authority to do more in terms of consolidating judgments.


author: BERNSTEIN, J.,

text:
    McCray v. Lawrence St. Associates

      Joseph C. LaRosa, for plaintiff

      E. Laurence Kates, for defendant IS Lawrence Street

      Sherman C. Toppin, for defendant Sherman Toppin Real Estate, LLC

      George Vokolos and E. Laurence Kates, for defendant ISAF, LP
    May 30, 2013
   BERNSTEIN, J.,

— Plaintiff Lopez McCray filed this slip-and-fall action on April 25, 2011 against the owner of his apartment complex, defendant Lawrence Street Associates, LLC (“Lawrence Street”), and its court-appointed receiver defendant Sherman Toppin Real Estate, LLC (“STRE”). Plaintiff’s claim proceeded to bench trial on September 12, 2012. The court found for plaintiff and against defendants STRE and Lawrence Street in the amount of $25,000.

Plaintiff lived at 4510 N. Lawrence Street, Philadelphia (“the Property”) in 2009. On December 19 and 20, 2009, nearly two feet of snow had fallen. STRE sent snow removal crews to the property. An entity entitled “Sherman Toppin General Contracting” issued invoices for the snow removal; however, the invoices clearly state that defendant “STRE...[d]eployed snow removal crews....” STRE was billing for the snow removal service it provided. For that snow removal service, STRE charged — separately from its income as receiver — $200 per day. A total of $400 was billed for snow removal services those two days. STRE’s billing invoices provide: “STRE offers professional and dependable Snow Management Services for Commercial and Multi-Family Residential customers.” Further, the invoices indicate that STRE “removed snow on all common element entry/exit points, exterior steps, exterior walkways and public sidewalks.”

No snow had fallen between December 20 and December 25. On December 25, between 12 a.m. and I a.m., plaintiff used a backdoor to take out his trash. Plaintiff slipped and fell on steps covered with ice and snow leading to a common alleyway. The alleyway was dark. The outside lights had been broken for some time.

Plaintiff suffered herniated discs in his neck and back, and a closed-head injury. Plaintiff attempted self-treatment for a month, but the pain and headaches finally caused him to seek medical care. He received medical treatment for II months, and was out of work due to the accident for nearly a year. Plaintiff’s back has yet to fully recover. He incurred $7,310 in outstanding medical bills.

Nine months before plaintiff’s fall, an order of the court dated March 24, 2009 had appointed defendant STRE as receiver of the property owned by Lawrence Street. That order required STRE to “manage, operate, and preserve” the property. The order also authorized STRE to “employ such firms and persons as are deemed necessary to assist the receiver...including...maintenance personnel” and to use funds derived from the premises to pay for “needed maintenance, upkeep and repair....” To the extent that STRE acted within the scope of the receivership, the order immunized STRE from liability for claims related to the property’s management. If STRE acted outside the scope of the receivership, the order provided no immunity. Specifically, the order provides that:

If the Receiver shall have acted in accordance with the terms and conditions of this Order, neither the Receiver, nor any of its employees, agents, attorneys, partners, members, officers, or directors, shall have any liability as to any claim, actions or causes of action of any third parties who have or would have claims against the owner of the Premises...provided however, the Receiver shall be liable for...actions taken by the Receiver that are not authorized by the terms of this Order.

A receiver is “the officer, the executive hand, of a court of equity. His duty is to protect and preserve, for the benefit of the persons ultimately entitled to it, an estate over which the court has found it necessary to extend its care.” It has long been the rule under Pennsylvania law that a receiver is “held to a rigid accountability.” As an officer of the court, “[a] receiver has only such powers and authorities as are given him by the court and must not exceed the prescribed limits.” So long as the receiver acts within the scope of authority granted by the court, the receiver will be paid for his services and be immune from liability. However, if the receiver acts independently outside of the scope of court appointed power, the receiver is subject to liability.

The March 24,2009 order outlines the scope of STRE’s authority and duty as receiver. Explicit within the order is that STRE is immunized from third party claims when acting in its scope as receiver. The order charges STRE to maintain the property, and authorizes STRE to employ individuals and entities necessary for that task. STRE removed snow from the property on December 19 and 20, 2009, but billed for those services separately from its role as receiver. Effectively and actually, STRE, as receiver, hired itself as an independent contractor to perform snow removal. The invoice states that STRE removed snow from the common areas and entry and exit points of the complex, and charges for that service. STRE negligently failed to remove snow from the rear common area and exit point of the complex, the area where plaintiff fell. Therefore, STRE is liable to plaintiff as it would have been as a negligent independent contractor hired by the receiver for snow removal.

Defendant Lawrence Street was the owner of the property. The Restatement (Second) Torts §387 establishes a rule for property owners who transfer management control of their property without transferring ownership. Section 387 states the following:

An independent contractor or servant to whom the owner or possessor of land turns over the entire charge of the land is subject to the same liability for harm caused to others...by his failure to exercise reasonable care to maintain the land in safe repair as though he were the possessor of the land.

Under §387 the liability of the property manager or receiver does not displace the owner’s personal liability for negligent maintenance of the property.

STRE was appointed to manage, operate, and preserve the property. Defendant Lawrence Street retained ownership of the property. Under §387, Lawrence Street remains liable for negligent maintenance of the property even though the court appointed a receiver as property manager. The property was negligently maintained in two respects: the failure to repair the outdoor lighting in the alleyway on the property contributed to plaintiff’s fall, and the failure to property clear the property of ice and snow.

Therefore the court’s finding for plaintiff and against defendants STRE and Lawrence Street in the amount of $ 25,000 should be affirmed.

      . Summary judgment as to defendants IS Lawrence Street and ISAF, LP was granted by order of July 6,2012.

      . Weather reports for December 24, 2009 through December 26, 2009 (Ex. P. IB).

      . Sherman Toppin Real Estate invoices #35, 36, & 37 documenting removal of snow from property on 12/19, 12/20, & 1/1 (Ex. P. 1A).

      . Weather reports for December 24, 2009 through December 26, 2009 (Ex. P. IB).

      . Order of March 24, 2012 (Ex. D. 1).

      . Warner v. Conn., 32 A.2d 740, 741 (Pa. 1943)(citing Schwartz v.
        Keystone Oil Co., 25 A. 1018, 1018-19 (Pa. 1893)).

      . Pa. Eng’g Works v. New Castle Stamping Co., 103 A. 215, 217 (Pa. 1918).

      . Cont’l Bank & Trust Co. of N.Y. v. Am. Assembling Mach. Co., Inc., 38 A.2d 220, 224 (Pa. 1944).

        . Id.

      . Restatement (Second) Torts §387 (1965).

      . Restatement (Second) Torts §387, cmt. c; see also Fehribach v. Smith, 22 P.3d 508, 511 (Ariz. Ct. App. 2001)(reasoning that §387 applies to a landowner who transfers charge of his property to a receiver even though receiver is not chosen by landowner because of principle embodied in the Restatement that landowner retains some liability).