source: Caselaw Access Project

author: LASH, J.,

license: Public Domain

text:
    Bowman v. Berks County Board of Assessment Appeals

      C.P. of Berks County,
    no. 01-6801.

      Jerry R. Richwine, for appellants.

      Patricia C. Hassinger, for appellee.
    December 20, 2001
   LASH, J.,

The appellants, Richard C. Bowman and Judith A. Bowman (taxpayers), have appealed from the decision of the Berks County Board of Assessment Appeals, directing a rollback from the preferential use assessment to full market value assessment of taxpayers’ real estate, pursuant to Pennsylvania Farmland and Forest Land Assessment Act of 1974 (Act 319, commonly known as the Clean and Green Act), 72 P.S. §5490.1 et seq. Pursuant to 72 P.S. §5350(c), the appeal pertains to the rollback from preferential use assessment to full market value for tax years 1995 through 2001. Trial was held on December 19, 2001. The court makes the following findings:

I. FINDINGS OF FACT

(1) Appellants are Richard C. Bowman and Judith A. Bowman, who reside at R.D. #6, Box 507, Sinking Spring, Berks County, Pennsylvania 19608.

(2) Appellee is the Berks County Board of Assessment Appeals, whose address is Berks County Services Center, Third Floor, 633 Court Street, Reading, Berks County, Pennsylvania 19601.

(3) On August 30, 1976, taxpayers purchased a tract of property, consisting of 39 acres and 63 perches in Cumru Township, Berks County, Pennsylvania (subject tract).

(4) Thirty-nine acres and 63 perches equates to 39.394 acres.

(5) The subject tract has a tax parcel number of 39-438515-52-5856, and is located in the Governor Mifflin School District, Berks County, Pennsylvania.

(6) Upon the subject tract, taxpayers’ constructed a home, a pool, a bam and several other outbuildings, and kept livestock on the property. The property predominately consisted of woodland and some pasture area.

(7) On or about April 17, 1993, taxpayers applied for and were granted preferential assessment for their property under the Clean and Green Act. One acre of the subject tract was designated as home site and 38 acres and 63 perches were designated as forest.

(8) Taxpayers’ entire property was accepted into the Clean and Green program for the calendar year 1994 and thereafter.

(9) In May 2000, the Pennsylvania Department of Transportation condemned .019 acre of taxpayers’ land for use in its Route 222 section II project. Accordingly, the entire tract subject to preferential assessment was now 39.285 acres.

(10) At approximately the same time, PennDOT also condemned a property nearby the subject tract, property belonging to the mother and brother of Mrs. Bowman (the Rohrbachers).

(11) PennDOT also condemned nearby property belonging to Eugene Steffy and Edna C. Steffy.

(12) The Steffys tend to taxpayers’ livestock when Mr. Bowman is out of town performing his job as a truck driver.

(13) It was important to taxpayers for the Rohrbachers to live close to them due to the advanced age of Mrs. Rohrbacher, and also important for the Steffys to live close to taxpayers so that Mr. Steffy could continue to tend to the livestock.

(14) To accommodate the Rohrbachers and the Steffys, taxpayers retained the services of John W. Hoffert, professional land surveyor, to prepare a subdivision plan and to provide for the creation of two lots, one of which would be gifted to the Rohrbachers and one which would be sold to the Steffys.

(15) A final plan of the Bowman subdivision, as approved by Cumru Township, was recorded in plan book 246, page 45.

(16) The aforesaid subdivision plan set forth a net two-acre lot for the Steffys and a net two-acre lot for the Rohrbachers.

(17) On November 10, 2000, taxpayers sold a two-acre lot to the Steffys for $30,000. The Steffys subsequently constructed a home on that lot.

(18) The Steffy deed transfer prompted the Berks County Assessment Office to send a letter on January 9, 2001, to taxpayers, informing them that the two acres were no longer eligible for a Clean and Green assessment and had been removed from the program.

(19) On January 2, 2001, taxpayers conveyed a two-acre lot to Michael Rohrbacher as a gift. The Rohrbachers then constructed a home on that lot.

(20) On February 28,2001, the Berks County Assessment Office informed taxpayers by written notice that more than 10 percent of the total acreage had been sold off from the subject tract and that a Clean and Green breach had occurred.

(21) The notice sent on February 28,2001, by the Berks County Assessment Office did not provide any language setting forth that the taxpayers were entitled to a hearing or that there could be an opportunity for a hearing under section 5490.9 of the Clean and Green Act.

(22) The assessment office then removed the entire subject tract of taxpayers from the Clean and Green program and assessed the tax rollback penalty against taxpayers in the amount of $21,013.63.

(23) On April 6, 2001, taxpayers filed a Clean and Green Assessment Appeal.

(24) A hearing was held on the appeal before the Berks County Board of Assessment Appeals on May 21,2001.

(25) By letter dated June 21,2001, the board informed taxpayers of its decision to uphold the Clean and Green breach.

(26) On July 11, 2001, taxpayers filed the within appeal to common pleas court.

II. DISCUSSION

Taxpayers raise two issues. First, they contend that they are in compliance with the Clean and Green Act. Secondly, they contend that the notice sent to them by the Berks County Assessment Office on February 28, 2001, was deficient in that it failed to advise taxpayers that they could request a hearing on the determination by the tax assessment office that a Clean and Green breach had occurred.

For reasons set forth herein, this court agrees with taxpayers and shall order the reinstatement of the preferential assessment on taxpayers’ tract of land.

The dispute giving rise to the claimed breach centers around the two conveyances made by taxpayers in successive years. The board claims that these two conveyances were improper split-offs, subjecting taxpayers to liability for payment of rollback taxes.

The pertinent section of the Clean and Green Act is 72 P.S. §5490.6(a.l)(l)(i), which states as follows:

“(a.l) (1) The split-off of a part of land which is subject to preferential assessment under this Act shall subject the land so split off and the entire tract from which the land was split off to rollback taxes as set forth in section 5490.5(a). The landowner changing the use of the land to one inconsistent with this Act shall be liable for payment of rollback taxes .... Rollback taxes under section 5490.5(a) shall not be due if one of the following provisions applies:
“(i) The tract split off does not exceed two acres annually, ... the tract split off is used... for the construction of a residential dwelling to be occupied by the person to whom the land is conveyed; and the total tract or tracts so split off do not exceed the lesser of 10 acres or 10 percent of the entire tract subject to preferential assessment.”

Taxpayers contend that they are in compliance, as they meet all the conditions contained in sub (i). Sub (i) contains three conditions, all of which must be met by taxpayers. The first two conditions, that the tract split off does not exceed two acres annually and that the tract split off is used for the construction of a residential dwelling to be occupied by the person to whom the land is conveyed, are conceded by the board to have been met by taxpayers. The board, however, contends, that taxpayers cannot rely on sub (i) because the two conveyances, totaling four acres, exceed 10 percent of the total acreage of the subject tract and that, therefore, the third condition of sub (i) was not met.

Taxpayers argue that this 10 percent requirement relates to 10 percent of the size of the tract at the time of the split off. They contend that the tract size, after removal of the .109 acreage for the PennDOT condemnation, totaled 39.285 acres. The first split-off occurring on November 10,2000, was a two-acre split off from the 39.285 acres, less than 10 percent. The second conveyance, occurring on January 2, 2001, also of two acres, was two acres from 37.285 acres, also less than 10 percent. Taxpayers, therefore, argue that they are in compliance.

This court disagrees with taxpayers’ interpretation. The 10 percent condition must be read in the cumulative sense. When considering whether 10 percent of the original tract was split off, both conveyances must be added together. As such, the conveyances, totaling four acres, exceed 10 percent of the 39.285 acres.

The language of the third condition requires this interpretation. Note that the condition requires that the split-off cannot “exceed the lesser of 10 acres or 10 percent of the entire tract subject to preferential assessment.” The legislature would not have included the requirement that the split-off cannot exceed 10 acres if the split-off were not to be considered in the aggregate, because the first condition requires that only two acres can be split off annually. The 10 percent requirement must be read in conjunction with the 10-acre requirement and be held to be in the same context. Taxpayers’ first argument, therefore, fails.

Regarding notice, taxpayers argue that the county assessment office did not comply with 72 RS. §5490.3 (d)(2) in that taxpayers were not provided with notice of an opportunity for a hearing. This section provides as follows:

“(d) The county Board of Assessment Appeals may not terminate preferential assessment of land previously determined by the board to qualify for preferential assessment without:
“(2) Written notice under section 5490.5 from the county assessor to the landowner that preferential assessment is to be terminated, stating the reason for such termination and the opportunity for a hearing under section 5490.9.”

The notice sent out by the assessment office on February 28,2001, is clearly not in compliance with section 3(d)(2) of the Clean and Green Act. There is no language whatsoever setting forth that the taxpayers can challenge the ruling of the assessment office by filing an appeal and requesting a hearing.

The board contends that taxpayers should not be permitted to rely on this section, even if the notice was deficient, because taxpayers have suffered no prejudice. It is true that taxpayers were not affected by the lack of notice, for they followed the proper procedures and timely perfected their appeal.

This court disagrees. The failure of the assessment office to provide notice to taxpayers of an opportunity for a hearing is fatal to the board’s position. To hold otherwise would permit the assessment office to disregard the plain language of the provision. Mere lack of prejudice does not adequately address the concerns here. Although taxpayers suffered no harm in this case, ostensibly because they sought legal counsel in a timely manner, this lack of notice had the potential to cause serious harm. The taxpayer who is not aware of his opportunity for a hearing may accept without question the notice from the assessment office when, in fact, he may have legitimate issues to raise on appeal. This could also result in late filings, which although potentially re viewable by the court through an application for leave to file nunc pro tunc, nevertheless contravenes the important concerns of prompt resolution of disputes and the finality of decisions. To agree to a case by case review of the sufficiency of a notice based on whether the aggrieved party suffered any harm would be improper. The assessment office must be held accountable for its failure to give notice.

This rationale is further supported by the tone of the provision itself, which is couched in mandatory terms. The board may not terminate preferential assessment of land without the required written notice. As stated in the case of Skepton v. Borough of Wilson, 562 Pa. 344, 349-50, 755 A.2d 1267, 1270 (2000):

“It is a cardinal rule of statutory construction that if the words of a statute are clear and free from all ambiguity, the letter of it is not to be disregarded under the pretext of pursuing its spirit. 1 Pa.C.S. §1921. Moreover, provisions of a statute dealing with the imposition of taxes shall be strictly construed. 1 Pa.C.S. §1928. ‘[A] taxing statute must be construed most strongly and strictly against the government, and if there is a reasonable doubt as to its construction or application to a particular case, the doubt must be resolved in favor of the taxpayer.’ ”

The taxpayers have sustained their burden of showing that the Board of Assessment Appeals should not have terminated the preferential assessment of land in this case. Accordingly, we enter the following order.

ORDER

And now, December 20, 2001, upon consideration of the briefs of the parties and after trial held, this court sustains the appeal of Richard C. Bowman and Judith A. Bowman. The preferential assessment of land owned by the appellants located in Cumru Township, Berks County, Pennsylvania, and consisting of 39.285 acres, shall be reinstated for calendar year 2001. It is further ordered that appellants, Richard C. Bowman and Judith A. Bowman, shall not owe any tax rollback penalty or interest thereon for calendar years 1995 through 2001. The lien entered by Berks County Board of Assessment Appeals against the land of appellants is hereby released, discharged and extinguished. Notice of this order shall be sent by appellee, Berks County Board of Assessment Appeals, to the Berks County Tax Claim Bureau, Cumru Township, and Governor Mifflin School District.


author: HERMAN, J.,

text:
    Topper v. Shatzler

      C.P. of Franklin County,
    no. A.D. 1998-282.

      Karl J. Januzzi, for plaintiff.

      Donald B. Hoyt, for defendant.
    September 5, 2001
   HERMAN, J.,

INTRODUCTION

Before the court is a motion to compel plaintiff to release his mental health records to defendant. Plaintiff answered the motion and the matter was listed for argument. At counsel’s request the court directed the matter to be presented on briefs alone. The briefs were received and the motion is ready for decision.

BACKGROUND

On July 15, 1996 defendant’s vehicle collided with a vehicle in which plaintiff was a passenger. Plaintiff, at that time, was a prisoner being transported by Franklin County near the county prison and his left hand was cuffed to another prisoner’s wrist. According to the complaint, the force of the collision caused plaintiff’s left arm to be wrenched backwards, causing various injuries. Those injuries are allegedly a “tear of the left supraspinatus tendon; significant tendinitis of the supraspinatus tendon; impingement of the left shoulder rotator cuff; severe strain on nerves and nervous system; pain and suffering; past and future loss of earnings; past and future medical costs; loss of earning capacity; and a permanent diminution of his ability to enjoy life and life’s pleasures.”

Plaintiff testified in his deposition he was treated at Cumberland Valley Mental Health Center both before and after the accident. Defendant argues she is entitled to gain access to plaintiff’s records from the center because he has placed his mental health at issue by claiming damages for “severe strain on nerves and nervous system; pain and suffering; and a permanent diminution of his ability to enjoy life and life’s pleasures.” Defendant asserts she is entitled to his mental health records because evidence of his mental health treatment before the accident raises the question of whether his psychological injuries stemmed from the accident or from preexisting circumstances. Plaintiff denies he has placed his mental health at issue by claiming those damages.

DISCUSSION

The psychiatrist/psychologist-patient privilege provides:

“Confidential communications to psychiatrists or licensed psychologists. No psychiatrist or person who has been licensed ... to practice psychology shall be, without written consent of his client, examined in any civil or criminal matter as to any information acquired in the course of his professional services in behalf of such client. The confidential relations and communications between a psychologist or psychiatrist and his client shall be on the same basis as those provided or prescribed by law between an attorney and client.”

This privilege is modeled after the attorney-client privilege and is designed to protect the privacy of a patient who seeks treatment for psychiatric or psychological disturbances. This absolute privilege belongs to the patient and disclosure cannot occur absent consent or waiver. In re Subpoena No. 22, 709 A.2d 385 (Pa. Super. 1998); Commonwealth v. Johnson, 444 Pa. Super. 153, 663 A.2d 720 (1995), reversed on other grounds, 550 Pa. 298, 705 A.2d 830 (1998). The privilege serves the important public policy of encouraging individuals to seek treatment by protecting what they reveal in confidence from public exposure:

“Patient confidence is essential for effective treatment. Because the information revealed by the patient is extremely personal, the threat of disclosure to outsiders may cause the patient to hesitate or even refrain from seeking treatment. The privilege thus serves the public interest in promoting a society in which the general well-being of the citizenry is protected....
“The privilege afforded by section 5944 was intended to inspire confidence in the client and encourage full disclosure to the psychologist. By preventing the latter from making public any information which would result in humiliation, embarrassment or disgrace to the client, the privilege is designed to promote effective treatment and to insulate the client’s private thoughts from public disclosure.” Kalenevitch v. Finger, 407 Pa. Super. 431, 436-37, 595 A.2d 1224, 1227 (1991), citing Commonwealth v. Kyle, 367 Pa. Super. 484, 533 A.2d 120 (1987).

In addition, the Mental Health Procedures Act, 50 P.S. §7111 provides:

“(a) All documents concerning persons in treatment shall be kept confidential and, without the person’s written consent, may not be released or their contents disclosed to anyone except:
“(1) those engaged in providing treatment for the person;
“(2) the county administrator, pursuant to [50 P.S. §7110];
“(3) a court in the course of legal proceedings authorized by this Act; and
“(4) pursuant to federal rules, statutes and regulations governing disclosure of patient information where treatment is undertaken in a federal agency.
“In no event, however, shall privileged communications, whether written or oral, be disclosed to anyone without such written consent....”

As with section 5944 of the Judicial Code, this confidentiality provision can be waived only by the patient. Johnsonbaugh v. Department of Public Welfare, 665 A.2d 20 (Pa. Commw. 1995), affirmed, 549 Pa. 572, 701 A.2d 1357 (1997).

The question of whether a plaintiff has placed his mental health at issue such that he waives the statutory right to psychologist-patient confidentiality has not yet been directly addressed by our Supreme Court. What remains is an absolute privilege which explicitly protects confidential mental health information but little appellate guidance as to what constitutes placing one’s mental health “at issue.” Unless it is clear that a plaintiff has placed his mental health at issue, the court need not even reach the question of whether a waiver has occurred.

It is well-established that mental anguish or emotional distress resulting directly from a tortious bodily injury may be compensated in damages. Long v. Yingling, 700 A.2d 508 (Pa. Super. 1997). That anguish or distress is to be treated as an element of pain and suffering. Fish v. Gosnell, 316 Pa. Super. 565, 463 A.2d 1042 (1983). The concept of pain and suffering subsumes injuries such as damage to nerves and loss of life’s pleasures. Boggavarapu v. Ponist, 518 Pa. 162, 542 A.2d 516 (1988); Thompson v. Iannuzzi, 403 Pa. 329, 169 A.2d 777 (1961). These are long-accepted aspects of a personal injury lawsuit.

In Kraus v. Taylor, 710 A.2d 1142 (Pa. Super. 1998), the plaintiff brought suit for permanent physical damages allegedly caused when he, as a pedestrian, was struck by the defendant’s vehicle. The trial court permitted the defendant to introduce confidential mental health treatment records showing the plaintiff was a chronic drug and alcohol abuser. The court held the plaintiff placed this information at issue and impliedly waived the privilege. The Superior Court affirmed the trial court’s reasoning that substance abuse decreases life expectancy and was an appropriate factor for the jury to consider in calculating damages.

In reaching its conclusion, the Kraus court cited Rost v. State Board of Psychology, 659 A.2d 626 (Pa. Commw. 1995) where the issue squarely before the court was whether a psychologist violated certain professional ethical standards by hastily releasing a patient’s treatment records pursuant to a subpoena. Kraus also cited federal cases which hold that by filing a lawsuit claiming personal injury, a plaintiff places his confidential information at issue and may therefore have impliedly waived the privilege. Mulholland v. Dietz, 896 F. Supp. 179 (E.D. Pa. 1994); O’Boyle v. Jensen, 150 F.R.D. 519 (M.D. Pa. 1993); Premack v. J.C.J. Ogar Inc., 148 F.R.D. 140 (E.D. Pa. 1993). As with Kraus, these federal cases involve a plaintiff’s records of chronic substance abuse which may have played a role in his death or injury and therefore was relevant to causation, life expectancy and damages.

Our own court has recently followed Kraus in denying a plaintiff’s motion for a protective order. In Aldrich v. Chambersburg Hospital, A.D. 1996-45/Leininger v. Chambersburg Hospital, A.D. 1997-216, Franklin County Court of Common Pleas, October 20, 1999, Judge Richard J. Walsh ruled plaintiffs placed their mental health at issue by seeking damages for mental and emotional anguish arising from medical negligence. Judge Walsh concluded that Kraus compelled him to deem the psychiatrist/psychologist-patient privilege waived. Although noting that Kraus involved permanent physical injuries and not emotional, psychological and/or mental distress or anguish, Judge Walsh felt constrained to apply the Kraus court’s reasoning “because the Superior Court opinion speaks directly to the implied waiver issue and not just the injuries and claims involved.” (Court’s opinion, p. 6.)

Judge Walsh was obviously troubled by what he perceived as a broad holding in Kraus. We do not feel similarly constrained because our reading of Kraus indicates it does not speak to the core issue before us: whether a plaintiff who asserts a physical injury claim with attendant damage to nerves and the nervous system, pain and suffering, and loss of life’s pleasures has placed his mental health at issue.

Clearly, a plaintiff places his mental health directly at issue where the alleged injuries are of a purely psychological or mental nature. Rosse v. Rosse, 49 D.&C.4th 438 (2000) (husband entitled to examine wife’s psychiatric records where wife claimed a need for alimony due to a mental condition). In Loftus v. Consolidated Rail Corp., 12 D.&C.4th 357 (1991) the plaintiff alleged emotional stress and mental anguish arising from the defendant’s false accusation of theft. The plaintiff treated with a licensed psychologist after the incident and the defendant sought those psychological treatment records. The court held that a plaintiff pursuing a claim for psychological damages waives the mental records privilege to the extent that he has placed his mental condition directly at issue. See also, Nardella v. Most Reverent Datillo, 116 Dauphin Rep. 326 (1996) (plaintiff alleged her relationship with the defendant caused her multiple personality disorder, post-traumatic stress disorder and depression). Such claims, however, are not the same type alleged by the instant plaintiff.

We conclude that the specific averments in the plaintiff’s complaint — severe strain on nerves and nervous system, pain and suffering, and permanent diminution of an ability to enjoy life and life’s pleasures — are simply the traditional claims for tort damages which are a natural consequence of and attendant to what is in essence a physical injury. In the absence of clear precedent to the contrary, we cannot find that such claims are a sufficient basis for departing from these traditional tort categories or for subverting the psychiatrist/psychologist-patient privilege set out in section 5944 of the Judicial Code and section 7111 of the Mental Health Procedures Act. Under these circumstances the plaintiff has not placed his mental health at issue and therefore we need not reach the question of whether he has waived the privilege. The defendant’s motion to compel will be denied.

ORDER

Now September 5, 2001, defendant’s motion to compel the release of plaintiff’s mental health records is hereby denied.

      . The Kraus approach was followed in Dembinski v. Thomas, 48 D.&C.4th 353 (2000) (evidence of decedent’s prior heroin use was admissible in a wrongful death and survival action because it was a relevant factor in determining life expectancy and future lost earnings) and Bolden v. SEPTA, 44 D.&C.4th 397 (2000) (evidence of plaintiff’s drug and alcohol history was relevant to establishing life expectancy where plaintiff alleged a permanent shoulder injury).


author: HERRON, J.,

text:
    U.S. Claims Inc. v. Ostroff, Villari & Kusturiss P.C.

      David G. Concannon, for plaintiff.

      David L. Narkiewicz and Laura A. Feldman, for defendant.
    July 25, 2001
   HERRON, J.,

Defendants Ostroff, Villari & Kusturiss P.C. and Peter M. Villari, Esquire, have filed preliminary objections to the complaint of plaintiff U.S. Claims Inc. For the reasons set forth in this opinion, the court is issuing a contemporaneous order overruling the objections.

BACKGROUND

On July 2, 1999, Mr. Villari contacted U.S. Claims concerning the assignment of Mr. Villari’s future legal fees of $152,837.50 from the settlement of D’Olio v. Eastwick Medical Associates. Three days later, Mr. Villari and U.S. Claims entered into an agreement under which U.S. Claims purchased the right to the D’Olio fees for $144,000. According to the complaint, U.S. Claims relied on Mr. Villari’s representations in the July agreement that he had an absolute right to the D’Olio fees and that the D’Olio fees would be payable on December 31, 1999.

At the time of this transaction, Mr. Villari was serving as the attorney for Darryl Levine, U.S. Claims’ principal shareholder. In September 1999, the relationship between Messrs. Villari and Levine soured, and Mr. Villari terminated his representation of Mr. Levine on September 21, 1999. On September 23, 1999, Mr. Villari initiated an action against Mr. Levine and asserted that he was a 25 percent owner of U.S. Claims. Mr. Villari was represented in the Villari action by John E. Kusturiss, a principal in OV&K.

The parties to the Villari action settled that matter in a settlement agreement dated December 23, 1999. Under part of the settlement agreement, U.S. Claims agreed to relinquish its rights to the D’Olio fees and to reduce Mr. Villari’s obligation by $50,000. In exchange, Mr. Villari assigned U.S. Claims his right to receive attorneys’ fees in Burchell v. Kletter as compensation for the remaining balance of $ 102,837.50. It was estimated that the Burchell fees would be available by August 31,2000. On January 2, 2001, the defendants allegedly informed U.S. Claims that they would not pay any money as required under the terms of the settlement agreement.

On the basis of these allegations, U.S. Claims has filed claims against Mr. Villari for breach of the July agreement, against OV&K for tortious interference with contractual relations and against both defendants for breach of the settlement agreement and fraudulent inducement. In response, the defendants have filed the objections, which ask that U.S. Claims specify the damages suffered with greater detail and that U.S. Claims’ request for attorneys’ fees be stricken.

DISCUSSION

Each of the objections is without merit and is denied accordingly.

I. U.S. Claims’ Request for Damages Is Sufficiently Specific

Pennsylvania requires that special damages be specifically stated. Pa.R.C.P. 1019(f). Generally, damages are pled with adequate specificity where they “give the general details of the services rendered, the results accomplished and the valuation of the total services.” Goodrich-Amram 2d §1019(f):9. A request for a more specific pleading of damages “will be denied where the details of items of special damages, pleaded generally, are readily obtainable by discovery.” Commonwealth ex rel. Milk Marketing Board v. Sunnybrook Dairies Inc., 29 Pa. Commw. 210, 214, 370 A.2d 765, 768 (1977). See also, Foster v. Health Market Inc., 146 Pa. Commw. 156, 161-62, 604 A.2d 1198, 1201 (1992) (rejecting objection asserting insufficient specificity where amount of damages could be obtained through discovery).

Even assuming that the damages for each of the causes of action set forth in the complaint are “special damages,” the details of the damages U.S. Claims has allegedly suffered are sufficient. The complaint repeatedly specifies that $152,837.50 was due under the July agreement and that $102,837.50 was due under the settlement agreement. Complaint at ¶¶6-7, 20, 26, 29, 44, 48, 54, 60,67. It is also alleged that no payments have been made under either agreement. Id. at ¶23. This is more than adequate to meet the pleading requirements for special damages, and the objections asserting insufficient specificity are overruled.

II. U.S. Claims’ Demand for Attorney’s Fees Is Permitted by the July Agreement

The defendants next assert that U.S. Claims has no basis for demanding attorneys’ fees and that its demand should be stricken with prejudice. A demand for damages, including attorneys’ fees, may be stricken when the damages “are not legally recoverable in the cause of action . . . .” Hudock v. Donegal Mutual Insurance Co., 438 Pa. 272, 277 n.2, 264 A.2d 668, 671 n.2 (1970). Counsel fees generally cannot be recovered “unless there is express statutory authorization, a clear agreement of the parties, or some other established exception.” Snyder v. Snyder, 533 Pa. 203, 212, 620 A.2d 1133, 1138 (1993). (citations omitted)

U.S. Claims argues that the July agreement allows it to recover attorneys’ fees in the instant action:

“(8) The claimant [Michael D’Olio] and the attorney [Mr. Villari], jointly and severally, hereby indemnify and agree to hold the purchaser [U.S. Claims] harmless from, and shall reimburse purchaser and its agents, representatives and successors and assigns for any and all loss, liability or damage suffered by purchaser by reason of any undue representation, breach of warranty or nonfulfillment of any covenant by either the claimant or attorney contained in this assignment or in any document, instrument or other item delivered to purchaser in connection with this assignment; and any actions proceedings, liens, demands, assessments, judgments, costs and reasonable expenses including, without limitation, reasonable legal fees and expenses, incident to any of the foregoing or incurred in investigating or attempting to avoid or to oppose the same, or in enforcing this indemnity.” Complaint exhibit A at ¶8. (emphasis added) This provision arguably allows U.S. Claims to recover attorneys’ fees, at least in part, in this action. As a result, the objections to U.S. Claims’ demand for attorneys’ fees must be overruled at this time.

CONCLUSION

U.S. Claims’ request for damages is sufficiently specific, and its demand for attorneys’ fees is permitted under the terms of the July agreement. Accordingly, the objections are overruled.

ORDER

And now, July 25, 2001, upon consideration of the preliminary objections of defendants Ostroff, Villari & Kusturiss RC. and Peter M. Villari, Esquire, to the complaint of plaintiff U.S. Claims Inc. and the plaintiff’s response thereto, and in accordance with the memorandum opinion being filed contemporaneously with this order, it is hereby ordered and decreed that the objections are overruled. The defendants are directed to file an answer within 20 days of the date of entry of this order.

      . Special damages are “those which are not the usual and ordinary consequences of the wrong done, but which depend upon special circumstances.” Parsons Trading Co. v. Dohan, 312 Pa. 464, 468, 167 A. 310, 312 (1933).


author: BRADLEY, J.,

text:
    Hackett v. Mac and Sam Inc.

      C.P. of Delaware County,
    no. 97-21021.

      John L. Aris, for plaintiff.

      Robert D. Billet, for defendant.
    June 15, 2001
   BRADLEY, J.,

Defendant Mac and Sam Inc. appeals from the entry of judgment in favor of plaintiffs after a jury trial.

On December 28,1995, plaintiff, Arthur Hackett, went to Mac and Sam Inc. a car dealership in Clifton Heights, Delaware County. He stopped there because his car developed engine problems while he was between sales calls. Mr. Hackett was a salesperson for an automotive parts company. Mac and Sam was a customer of his. Mr. Hackett also bought cars from Mac and Sam and took his cars there for service and repairs. That afternoon, Mr. Hackett pulled his car into the dealership lot, got out and went into Mac and Sam’s where he handed his keys to the service manager and told him about the car problem he was experiencing. Mr. Hackett testified there was no ice in the area where he originally parked his car although he did notice ice in another area of the lot. (N.T. 10/23/ 2000 pp. 59, 60, 79.) He decided to wait in the parts department while his car was being repaired. When he was informed the car was ready, he went outside and found that his car was no longer where he originally parked it. (N.T. 10/23/2000 p. 61.) To get to his car, Mr. Hackett had to walk across jagged ice. (N.T. 10/23/2000 p. 61.) He slipped and fell on the ice located near his car injuring his head, neck and back. (N.T. 10/23/2000 p. 63.) There were no witnesses to his fall. After he fell, employees of Mac and Sam convinced him to go to Delaware County Memorial Hospital for treatment and drove him there. (N.T. 10/23/2000 p. 65.) A CAT scan and x-rays were taken and he was treated and released. (N.T. 10/23/2000 p. 65.)

At trial, Mr. Hackett testified that he developed physical problems stemming from the fall. His wife; a coworker, Mr. Gedraitis; his daughter, Margaret Murphy; his daughter-in-law, Stacey Hackett; and his son-in-law, George Spaeder; all testified that Mr. Hackett’s mental and physical condition noticeably worsened after the fall. All these witnesses, except Mr. Gedraitis, testified on cross-examination that they were aware plaintiff had two car accidents, one in June 1995, preceding the fall and one in September 1997, after the fall. All these witnesses also testified on cross-examination that they were aware of Mr. Hackett’s numerous surgeries for subsequent ailments unrelated to the fall.

Plaintiffs’ and defendant’s medical experts disagreed on whether and to what extent plaintiff suffered injuries as a result of the fall on December 28,1995. A neurologist, Dr. Christopher J. Reed, testified on videotape for the plaintiff. He opined, to within a reasonable degree of medical certainty, that as a result of the fall, Mr. Hackett suffered cervical myelopathy, cervical radiculopathy, cervical strain and spasm, lumbar radiculopathy, lumbar sprain and spasm and may have suffered a peroneal neuropathy and injury to his nerve in his leg. (N.T. 10/23/ 2000 pp. 131-32.) The jury was made aware that aside from the emergency room visit to Delaware County Memorial Hospital at the time of the accident, plaintiff did not see another doctor until 10 months after the accident. An orthopedic surgeon, Dr. Joseph Shutouey and a neurologist, Dr. Steven Gullen testified for the defense. Dr. Shutouey testified that Mr. Hackett suffered aggravation to his arthritic condition as a result of the fall. (N.T. 10/23/2000 p. 204.) He stated further that this was a temporary injury which would resolve in three weeks to three months. (N.T. 10/23/2000 p. 204.) Dr. Gullen testified that Mr. Hackett suffered from a myelopathic disorder or dysfunction of the spinal cord but that malady was unrelated to his fall at Mac and Sam’s. (N.T. 10/23/ 2000 p. 227.)

The jury rendered a verdict in favor of plaintiffs. They awarded $200,000 in damages to Mr. Hackett and $25,000 in damages for loss of consortium to Mrs. Hackett. Post-trial motions were filed and denied. Judgment was entered in favor of plaintiffs. This appeal followed.

Defendant asserts that the trial court erred in failing to instruct the jury on the doctrine of “hills and ridges.” That doctrine provides:

“There is no liability created by a general slippery condition on sidewalks. It must appear that there were dangerous conditions due to ridges or elevations which were allowed to remain for an unreasonable length of time, or were created by defendant’s antecedent negligence.” Rinaldi v. Levine, 406 Pa. 74, 78, 176 A.2d 623, 625 (1962).

In the instant case, the “hills and ridges” doctrine is not applicable. There was no testimony that general slippery conditions prevailed at the time of plaintiff’s fall. Indeed, Mr. Hackett parked his car and walked into the dealership without encountering any ice. It was only when he went to retrieve his car from where defendants service personnel had parked it that he encountered a patch of jagged ice. This case involves a specific, localized patch of ice. “[WJhere a specific, localized patch of ice exists, it is comparatively easy for a property owner to take the necessary steps to alleviate the condition, while at the same time considerably more difficult for the pedestrian to avoid it even exercising the utmost care.” Williams v. Shultz, 429 Pa. 429, 433, 240 A.2d 812, 814 (1966). Proof of hills and ridges is not required when the hazard is not the result of a general slippery condition prevailing in the community, but of a localized patch of ice. Tonik v. Apex Garages Inc. 442 Pa. 373, 275 A.2d 296 (1971). Plaintiff was not required to prove the existence of “hills and ridges,” a fortiori, so it was appropriate not to charge the jury on this doctrine.

Defendant also asserts that it was erroneous not to instruct the jury with regard to slipping and falling on ice when there are not generally slippery conditions present in the community. The court explained at side-bar after jury instructions that the instructions on general negligence principles and the accompanying duties of landowners with respect to business invitees, were sufficient to instruct the jury on the law regarding an isolated patch of ice and the landowner’s responsibility to a business invitee for that condition. “A trial [court] has wide latitude in his or her choice of language when charging a jury, provided always that the court fully and adequately conveys the applicable law.” Wilson v. Anderson, 420 Pa. Super. 169, 173, 616 A.2d 34, 36 (1992). Defendant does not suggest that any part of the charge was erroneous, just that the court refused to charge “hills and ridges” and refused to use defendant’s exact wording on liability for a specific, localized patch of ice. Looked at in its entirety, we believe the charge fairly and accurately instructed the jury on the law.

Finally, defendant claims that the two verdicts, one for personal injuries and one for consortium were against the weight of the evidence. The decision whether to grant a new trial based upon an assertion that the verdict is against the weight of the evidence lies with the trial court. Dierolf v. Slade, 399 Pa. Super. 9, 15, 581 A.2d 649, 652 (1990).

“A new trial will not be granted on the basis of a weight of the evidence claim unless evidence supporting the verdict is so inherently improbable or at a variance with admitted or proven facts or with ordinary experience as to render the verdict shocking to the court’s sense of justice.” Brindley v. Woodland Village Restaurant, 438 Pa. Super. 385, 399, 652 A.2d 865, 872 (1995).

The verdict in favor of plaintiffs does not shock the court’s sense of justice. The jury heard testimony from plaintiffs and their immediate family that Mr. Hackett’s physical condition began to deteriorate from the date of the fall. Dr. Reed testified that Mr. Hackett’s injuries were caused by the fall. Mr. Hackett testified that he was reluctant to bring this action against Mac and Sam, his former customer, whose employees were his long-standing acquaintances. The jury heard the cross-examination of plaintiffs’ witnesses who were asked if they were aware of two car accidents in which Mr. Hackett was injured and subsequent surgeries he underwent for a variety of illnesses. Merely because Mr. Hackett had only $7,500 in medical expenses yet received a $200,000 verdict does not indicate the verdict is against the weight of the evidence. The duty of assessing damages is within the province of the jury and should not be disturbed absent a clear finding that the amount resulted from partiality, caprice, prejudice, corruption or some other improper influence. Sehl v. Vista Linen Rental Serv. Inc. 763 A.2d 858, 864 (Pa. Super. 2001). There is no indication that the verdict resulted from any of the above. Obviously, the jury found plaintiff and his evidence credible. He and his witnesses testified that he endured chronic pain and suffering from his injuries. His once active lifestyle was drastically altered. Although the medical expenses of $7,500 were low in proportion to the $200,000 total verdict, the jury was free to conclude that the value of the pain and suffering and loss of life’s pleasures was worth substantially more than the medical expenses incurred.

Defendant also argued that the jury award to Margaret Hackett in the amount of $25,000 for loss of consortium was against the weight of the evidence. On direct examination, Mrs. Hackett replied “No” to the question, “Were there any ways that the injuries affected your relationship with your husband?” (N.T. 10/23/2000 p. 94.) If that negative answer was the sum total of Mrs. Hackett’s testimony, the court would agree that no award should be given for loss of consortium. However, in response to the follow-up question, “Were there any activities that were affects [sic] at all,” Mrs. Hackett replied:

“Well we used to like to go down to the shore with the kids and he could walk the boardwalk, take the kids on rides and everything. A couple times I would go down, he just about gets on the boardwalk, he can’t do anymore walking. We used to like to go out and dance, which he loved to dance and I do, but we can’t do that anymore. He can’t mow the lawn anymore. He can’t do anything hardly around the house. I have my son and my son-in-law that help us out.” (N.T. 10/23/2000 p. 94.)

Clearly, the above testimony supports the jury award for loss of consortium. It has been the experience of this court that spouses typically testify that their feelings for their injured spouse have not changed but when questioned about the specifics of their life together they testify candidly to the many changes occasioned by the injury. Mrs. Hackett’s testimony confirms this.

It is for all the above reasons that defendant’s motion for post-trial relief was denied and judgment was entered in favor of plaintiffs.


author: LOUGHRAN, P.J.,

text:
    Cusmano v. Lewis

      C.P. of Westmoreland County,
    no. 3208 of 2001.

      Damon J. Faldowski and Neil J. Marcus, for plaintiffs.

      Kenneth B. Burkley, for defendant Robert John Lewis.

      Timothy C. Andrews, for defendant Lori A. Lewis.

      Paul R. Robinson, for defendant United Mobile.
    January 31, 2002
   LOUGHRAN, P.J.,

The plaintiffs allege that on February 25, 2001, and for a period of approximately 10 years prior to that date, the plaintiffs resided at the Port Royal Village Mobile Home Park owned and operated by United Mobile Homes Inc. The plaintiffs also allege that the defendants, Robert John Lewis and Lori A. Lewis, resided at the Port Royal Village Mobile Home Park on February 25, 2001, when the plaintiffs’ minor son, Philip C. Cusmano, was inside the Lewis’ mobile home and was shot and killed by Kevin Lewis, the minor child of Robert John Lewis.

As alleged in the complaint, Philip C. Cusmano, who had just turned 14, was at defendant Lewis’ residence with another child, Kevin Lewis, when that child, whose father is the defendant, Robert John Lewis, suddenly and without warning shot Philip C. Cusmano with a revolver. Philip C. Cusmano ran from the home after being shot and came to the home of Chris Kaylor, another child in the motor home park, where Philip C. Cusmano died in his father’s arms with plaintiff Carol Cusmano standing over her husband and watching as her son took his last breath.

A civil action was brought against Robert John Lewis, Lori A. Lewis, formerly known as Lori A. Wareham, and United Mobile Homes Inc., t/d/b/a Port Royal Village, as a result of these tragic events.

The defendant, United Mobile Homes Inc., has brought preliminary objections and has set forth three bases for the same. The first is a general demurrer to the claim of liability, United Mobile Homes contending that it owed no legal duty to prevent this shooting, particularly as it occurred inside the Lewis home. Secondly, it demurs to a claim for loss of consortium of the child, and thirdly, it demurs to the claim for negligent infliction of emotional distress, as the plaintiff/parents have not alleged that they witnessed the actual gunshot, but rather only the death of their child.

In ruling on a preliminary objection in the nature of a demurrer, the court must accept as true all well pleaded allegations in the complaint and all inferences reasonably deducted therefrom. Further, all doubts should be resolved against dismissal of the complaint. Stone & Edwards Insurance Agency v. Department of Insurance, 151 Pa. Commw. 266, 616 A.2d 1060 (1992). The court shall sustain preliminary objections and dismiss the complaint only in cases that are clear and free from doubt that the law will not permit recovery. Capital City Lodge No. 12, Fraternal Order of Police v. City of Harrisburg, 138 Pa. Commw. 475, 588 A.2d 584 (1991).

Only where it appears with certainty that, upon the facts averred, the law will not permit recovery can the complaint be dismissed and summary judgment entered for the defendant. Bickell v. Stein, 291 Pa. Super. 145, 149, 435 A.2d 610, 612 (1981), citing Donnelly v. DeBourke, 280 Pa. Super. 486, 489-90, 421 A.2d 826, 828 (1980).

Since the sustaining of a demurrrer results in a denial of a pleader’s claim or a dismissal of his suit, a preliminary objection in the nature of a demurrer should be sustained only in cases that clearly and without a doubt fail to state a claim for which relief may be granted. If the facts as pleaded state a claim for which relief may be granted under any theory of law, then there is sufficient doubt to require the preliminary objection in the nature of demurrer to be rejected. Baker v. Cambridge Chase Inc., 725 A.2d 757 (Pa. Super. 1999).

With regard to the claim by the plaintiffs against United Mobile Homes, the plaintiffs have alleged that United Mobile Homes, as the owner of the mobile home park, had a duty outside of any obligations it undertook as a result of the lease agreement, to maintain the premises and to make it safe for persons thereon, particularly business invitees.

A possessor of land who holds it open for his business purposes is subject to liability to individuals while they are upon the land for such purpose, for physical harm caused by the accidental, negligent or intentionally harmful acts of third persons, where the possessor fails to exercise reasonable care to discover that such acts are being done or are likely to be done, or give a warning adequate to enable the individual to avoid the harm or otherwise protect them against it. Congini by Congini v. Porterville Valve Company, 504 Pa. 71, 470 A.2d 515 (1983), and Restatement (Second) of Torts §341.

Furthermore, arising from the duty of a possessor of land to use reasonable care to discover and prevent the tortious acts of third persons, there is a series of cases holding that the possessor is liable for damages arising from criminal acts committed on the land by third persons. Ford v. Jeffries, 474 Pa. 588, 379 A.2d 111 (1977); Brooks v. Marriott Corporation, 361 Pa. Super. 350, 522 A.2d 618 (1987); Reider v. Martin, 359 Pa. Super. 586, 519 A.2d 507 (1987); and Prather v. H-K Corporation, 282 Pa. Super. 556, 423 A.2d 385 (1980). As such, where it is seen that an owner holds his land open for a business purpose, he is generally seen to have a duty to protect tenants from the foreseeable criminal acts of third persons. See Feld v. Merriam, 506 Pa. 383, 485 A.2d 742 (1984), and Kerns v. Methodist Hospital, 393 Pa. Super. 533, 574 A.2d 1068 (1990).

Likewise, the court has also held that where a landlord, by agreement or voluntarily, offers a program to protect the leased premises by providing a program of security, he must perform the task in a reasonable manner and the tenant may rely upon being secure as a result of that program.

Here, the defendant, United Mobile Homes, owns the mobile home park and leases pieces of ground for mobile home units. To that extent, the mobile home park was essentially a landlord with regard to the mobile home community and, as such, had an obligation to protect its tenants against not only foreseeable negligent, but also intentional, acts of third persons. The plaintiffs assert that the mobile home park had received specific knowledge of the violent propensities of the minor, Kevin Lewis; yet, despite this knowledge, it did not take steps to remove this danger from its community by any means whatsoever. Neither did they attempt to warn or protect the tenants. The mobile home park chose to merely ignore the problem.

In the opinion of this court, defendant’s demurrer that no cause of action exists against United Mobile Homes Inc. must be denied. The plaintiffs’ have alleged knowledge of the dangerous propensities of the minor, Kevin Lewis, by the defendant and defendant’s failure to act. These matters alone create questions of fact, which compels denial of defendant’s preliminary objections.

The second preliminary objection of United Mobile Homes, is that Count VII is merely a claim for loss of consortium and should be dismissed. Even the plaintiffs concede that this court and the Supreme Court of Pennsylvania have held that a consortium claim is not available for the death of a child.

The plaintiffs contend that Count VII is for loss of services of that child and cites cases, which allow damages for such. However, these damages are an element in a wrongful death action and do not take on a separate cause in and unto themselves as plaintiffs contend. The plaintiffs have brought a wrongful death claim and those damages are a part of that claim. Therefore, that objection will be granted and Count VII will be dismissed.

The third basis for preliminary objections brought by the defendant, United Mobile Homes Inc., is a claim for negligent infliction of emotional distress, which has been brought by the plaintiffs. The basis for the claim is that the plaintiffs, although they did not witness the discharge of the gun, experienced the immediate aftermath, to include the death of their son shortly thereafter in his father’s arms.

The defendant claims that emotional distress cannot lie, as the plaintiffs did not witness the shooting. The plaintiffs argue that is not necessary, under Pennsylvania law, as they did witness the immediate aftereffects, to include the death of their child in his father’s arms with his mother standing over her husband’s shoulder. Specifically, the issue of what kind of sensory and contemporaneous observation is necessary was discussed in the case of Neff v. Laso, 382 Pa. Super. 487, 555 A.2d 1304 (1989). The Neef court recognized that the elements necessary for the establishment of a cause of action for negligent infliction of emotional distress in accordance with Sinn v. Burd, 486 Pa. 146, 404 A.2d 672 (1979), are that the plaintiff must: (1) Be near the scene of the accident; (2) His shock or distress must result from a direct emotional impact caused by the sensory or contemporaneous observance of the accident, as opposed to learning of the accident from others after its occurrence; and (3) He must be closely related to the injured victim.

In the Neff case, the Superior Court made clear that, in certain circumstances, the sensory and contemporaneous observance requirement of the second element can be satisfied by a plaintiff who did not actually witness the accident, but, rather, witnessed its immediate aftereffects.

The court focused its discussion upon whether the emotional shock was immediate and direct rather than distinct and indirect and not upon the senses perceiving the accident. The court went on to hold that actual visual observations were not necessary to satisfy the sensory and contemporaneous observation requirement. The important and crucial element is the immediate and direct awareness of what had occurred.

In the instant case, the fatally wounded minor decedent ran immediately from the scene to his parents and died in his father’s arms. The parents did not learn of the accident and its immediate effects from some third party. They experienced the shock, distress and traumatic impact immediately and from direct emotional impact caused by sensory and contemporaneous observance as much as if they would have witnessed the shooting itself. In the opinion of this court, the elements of the Sinn case as discussed in Neff have been established for the purpose of preliminary objections and defendant’s preliminary objections will be denied.

ORDER

And now, January 31, 2002, after review and careful consideration of the within matter, it is hereby ordered, adjudged and decreed that the defendant’s preliminary objections as to Count VII is granted and Count VII of plaintiff’s complaint is dismissed. All other preliminary objections of the defendant, United Mobile Homes Inc., are hereby denied.


author: AMMERMAN, J.,

text:
    Villella v. Katzen

      C.P. of Clearfield County,
    no. 1993-760-C.D.

      Anthony Guido, for plaintiff.

      Thomas C. Marshall, for defendants.
    December 20, 2001
   AMMERMAN, J.,

In 1986, plaintiff Francis A. Villella requested that the Clearfield County Industrial Development Authority finance a certain commercial development warehouse project (C warehouse project) for plaintiff. In order to provide financing to plaintiff, First Mortgage Revenue Bonds Series of 1986 were issued by the authority to finance the acquisition and construction of C warehouse project, located in Sandy Township, Clearfield County. Bonds in the total amount of $1,100,000 were issued to Deposit Bank, Marcus Katzen, Marshall Katzen, Bari Boyer, Harry Kellar as trastee for Brit Katzen and Harry Kellar as trustee for Brook Katzen. The bonds issued to Deposit Bank contained different terms from the bonds issued to the individual bondholders, and the underlying issue in this litigation concerns the validity of the bonds which are owned by the individual bondholders.

On May 21, 1993, plaintiff instituted this action by filing a complaint in the Court of Common Pleas of Clearfield County. Thereafter, defendants removed the case to the United States District Court for the Western District of Pennsylvania. The federal court dismissed Counts I and III of plaintiff’s complaint with prejudice for failure to state a claim upon which relief could be granted. Thereafter, the federal court determined sua sponte that it lacked jurisdiction and remanded the case to this court on February 17, 1995. Defendants filed preliminary objections to plaintiff’s complaint in this court, and Counts I and HI were dismissed by this court. In the interim, plaintiff filed a complaint in equity seeking to reform the bonds issued to the individual bondholders. Defendant again filed preliminary objections, whereupon this court dismissed most of the counts in plaintiff’s equity action.

After dismissal of most of plaintiff’s claims in this matter, the counts of plaintiff’s complaint which remained for consideration by this court are Count II of plaintiff’s action at law and Count IV of plaintiff’s equity action. Count II of plaintiff’s action at law alleges a conflict of interest based upon the alleged attomey/client relationship between defendant Marcus Katzen and plaintiff. Count IV of plaintiff’s complaint in equity is an effort by plaintiff to rewrite the terms of the transaction by reducing the reserve required pursuant to the bond documents from the $350,000 contained in the loan documents to $130,000 and $260,000 at the end of the third and sixth years respectively.

A civil non-jury trial was held in this matter on November 8 and 9, 2000 and July 17 and 18, 2001. Following a period of delay caused by the parties’ desire to have the trial transcribed, briefs have been received and the matter is set for decision.

The events giving rise to plaintiff’s claims began in 1986, when plaintiff requested that the authority finance the C warehouse project for him. The C warehouse project involved the purchase of 5.01 acres of land originally owned by General Warehousing, a corporation owned by various members of the Katzen family, (Tr. I, 25), and the development of a warehouse thereon. (Joint exhibit 1.) In order to provide financing to plaintiff, the bonds were issued by the authority. Pursuant to the industrial development loan financing arrangement, the land was conveyed to the authority, who in turn executed and delivered a first mortgage to Deposit Bank in the amount of $ 1,100,000 secured by a mortgage loan agreement. The mortgage from the authority was executed and delivered to secure $1,100,000 of tax-exempt commercial development bonds issued by the authority to the following:

(a) Deposit Bank — $800,000;
(b) Marcus Katzen — $160,000;
(c) Marshall Katzen — $50,000;
(d) Bari Boyer — $50,000;
(e) Harry Kellar as trustee for Brit Katzen — $20,000;
(f) Harry Kellar as trustee for Brook Katzen — $20,000;
Total: $1,100,000. (Joint exhibit 1.)

Closing on the C warehouse project occurred in late December 1986, as it was necessary to complete the transaction prior to a change in the tax law effective January 1, 1987, after which time the project would no longer be tax-exempt. (Tr. I, 59.)

Defendant Marcus Katzen had begun in January or February of 1986 to put together the deal that became the C warehouse project, prior to plaintiff’s involvement. He began by searching for at least two investors, originally intending to structure a joint venture similar to prior deals in which he had been involved. Plaintiff, upon hearing about the C warehouse project from Marcus Katzen, was interested in participating and wanted to be the sole investor. He testified that he was interested in a $200,000 investment rather than a $100,000 investment. (Tr. III, 107.)

Marcus Katzen did much of the initial work to put the deal together, including designing the initial structure and elements of the transaction. He patterned the transaction after a prior project in which he was involved, B warehouse, and the C warehouse project contains many of the same features. The project originally was to have General Warehousing, a company partly owned by Marcus Katzen, in the place of the plaintiff, but plaintiff was offered the opportunity to be investor-developer due to a change in the tax laws. (Tr. IV, 27-29.) In any event, Marcus Katzen’s role in the project was to coordinate among the various parties to the transaction, for which he was paid a $25,000 supervision fee by plaintiff. The fee was paid by plaintiff as investor-developer, the only party in the transaction with access to the proceeds directly to Deposit Bank, which issued bonds to Marcus Katzen, who paid an additional $15,000 in cash to receive $40,000 worth of bonds. According to Victor Lynch, Esquire, bond counsel for the transaction who was certified as an expert during trial and provided credible testimony, supervision fees of this type are “very usual” for bond transactions. He further testified that Marcus Katzen’s $25,000 supervision fee was reasonable and that he did not question it. (Tr. I, 118-19.)

Defendant Marcus Katzen received a law degree and practiced law from 1965 until 1975. However, in 1975 he sold his practice and became a full-time real estate investor, as well as for a time being a Jefferson County commissioner. After he sold his practice, he retained a few existing clients until approximately 1980, when he moved to Florida. He did not meet plaintiff until 1984, some years after he stopped practicing law. At the time of closing in 1986, clearly Mr. Katzen was not a practicing attorney and all parties agreed at trial that his company is not a law office. (Tr. III, 52.) He never solicited any legal work from plaintiff and never entered into any legal fee agreement with plaintiff.

Legal work was handled by attorneys Anthony Guido (real estate counsel) and Victor Lynch (bond counsel). In fact, while practicing law Marcus Katzen never served as bond counsel for any transaction and was not qualified to do so. Victor Lynch, Esquire, as bond counsel, had participated in several projects with Marcus Katzen prior to the C warehouse project. (Tr. 1,19-30.) Anthony Guido, Esquire, as real estate counsel, rendered an opinion of counsel concerning title to the land which was a necessary pre-condition for closing. (Tr. I, 113.) Attorney Guido is listed as the seller’s — i.e., defendants — real estate counsel in the closing documents. (Joint exhibit 1; Tr. I, 112-13.) The closing documents do not list any party as counsel to the investor-developer.

Plaintiff owned his own business from 1979 until 1985 and had some involvement in real estate during this time in terms of leasing property. Plaintiff was a sophisticated businessman in 1986, in that he had been president of a multimillion dollar business and served on its board of directors. (Tr. III, 91-93.) After plaintiff sold his business, he devoted more attention to real estate, and was involved in several deals with defendant Marcus Katzen prior to the C warehouse project. Prior to becoming involved in the project, plaintiff reviewed a marked-up joint venture agreement as an example of what the project might look like. (Plaintiff’s exhibit A.) That document contained features similar to those about which plaintiff now complains, such as shared appreciation, shared rental, and no prepayment. Plaintiff had plenty of time to review this document and negotiate any of its terms.

Victor Lynch’s undisputed expert testimony established that revenue bonds, such as those issued here, commonly contain provisions such as shared rental and shared appreciation because of the great risk associated with such bonds. In essence, these bonds are secured by commercial real estate, the revenue associated with which is derived from short-term commercial leases. The value of this collateral is greatly reduced if a lease is lost. Shared rental is a provision which provides the bondholders with additional revenue if rental income from the property exceeds a certain amount. Shared appreciation involves additional payment to the bondholders if the project is sold for a price in excess of a certain specified amount. (Joint exhibit 1.) The bonds also contained an appraisal feature which permitted the bondholders to base their shared appreciation upon the average appraisals of two expert appraisers. The purpose of this provision was to prevent the investor-developer from selling to a straw party at below market value. These provisions are not unusual. In fact, the C warehouse transaction was set up in a fashion similar to prior transactions in which Marcus Katzen was involved. Items such as shared appreciation and shared rental provisions were included.

Section 5.1 of the mortgage loan agreement specifically states that the investor-developer may sell his interest in the project at any time without restriction. Nevertheless, plaintiff cannot sell his interest in the C warehouse project without the approval of the bondholders, unless he sells it subject to the bonds. This does not affect the alienability of the real estate, but it does restrict the ability of the debtor to pay off his bonds early. It is common for bonds to contain non-redemption provisions. (Tr. I, 108.)

Section 4.1 of the mortgage loan agreement requires that a bond reserve fund be maintained in the amount of $350,000. On November 24, 1986, Marcus Katzen sent a letter to Deposit Bank requesting a bond reserve amount of $350,000, (Tr. II, 130), the amount which was set forth on the spreadsheet prior to plaintiff’s involvement in the transaction and which Mr. Katzen later reviewed with plaintiff. Plaintiff claims that the bonds should be reformed to reduce the reserve required pursuant to the bond documents from the $350,000 contained to the loan documents to conform to the loan commitment letter— i.e., $130,000 and $260,000 at the end of the third and sixth years respectively. Although these figures are contained in the commitment letter issued by Deposit Bank to plaintiff, James Baker, the loan officer for Deposit Bank, never discussed with Marcus Katzen the lower figures that were part of the bank documents but never of the bonds. (Tr. II, 130.) The purpose of the bond reserve fund is to protect the bondholders. (Tr. II, 18-19.) In this transaction, the individual bondholders bargained for a higher reserve than Deposit Bank requested because the individual bondholders had more risk in the transaction. This is true because the plaintiff’s personal guarantee only lasts through the first six years of the deal. (Tr. II, 20.) The individual bondholders, whose bonds contain a 33-year term, as opposed to the 15-year term contained in Deposit Bank’s bonds, have a longer period of exposure, and thus more risk. (Tr. IV, 57-58.) In addition, an older building requires a larger reserve because maintenance and upkeep become more expensive and older buildings tend to have more vacancies. Also, initial leases run out and may not be renewed.

Plaintiff testified that he did not consent in writing to the provisions of the bonds to which he now objects and that he would not have entered into the transaction had he known that the bonds contained features such as shared appreciation and shared rentals. (Tr. II, 73-74.) Nevertheless, plaintiff executed the investor-developer’s acknowledgment at closing, (joint exhibit 1), and he stipulated that his signature was authentic each place it is contained on joint exhibit 1. (Tr. III, 102.) In this document, he acknowledged that he had read, understood and accepted the documents in their final form. (Tr. II, 12.) Moreover, section 1.2 of the mortgage loan agreement contains various certifications on the part of the plaintiff, as investor-developer, that he is an experienced real estate developer and that he agrees to all of the various terms and conditions of the loan documents. (Tr. II, 17-18; joint exhibit 1.)

ISSUES

(A) Whether defendant Marcus Katzen acted as plaintiff’s attorney?

(B) Whether a confidential relationship existed between Marcus Katzen and the plaintiff?

(C) Whether plaintiff should be permitted to reform the bonds in order to lower the reserve requirement?

All legal issues remaining in this case revolve around whether defendant Marcus Katzen acted as plaintiff’s attorney. If he did not do so, the bonds and related closing documents must be enforced as written.

Since a civil non-jury trial was held in this matter, this court is charged with judging the credibility of the witnesses and determining what weight to accord their testimony. Weir by Gasper v. Estate of Ciao, 521 Pa. 491, 556 A.2d 819 (1989). The court’s determinations must be supported by competent evidence of record. Bethlehem Steel Corp. v. Litton Industries Inc., 507 Pa. 88, 488 A.2d 581 (1985). Based upon the testimony at trial, decision can only be rendered in favor of the defendants. Plaintiff has the burden of establishing each and every element of his claims, and he has failed to carry his burden here.

A. Defendant Marcus Katzen Did Not Act As Plaintiff’s Attorney

Defendant Marcus Katzen, although an attorney in that he has a law degree, is not a practicing attorney and has not practiced law since he sold his practice in 1975, with the exception of a few existing clients which he continued to service until approximately 1980. In any case, by 1986 he had not practiced law at all for at least six years. Defendant Marcus Katzen is currently engaged on a full-time basis in the business of supervising the construction, leasing and development of commercial projects such as the C warehouse project.

In connection with the C warehouse project, plaintiff paid to defendant Marcus Katzen a construction supervision fee of $25,000. This fee was a supervision fee for the development of C warehouse and not a legal fee. The court finds that defendant Marcus Katzen did not engage in any legal work and did not render any legal advice in connection with the C warehouse project. His role was not that of an attorney, but instead that of a project coordinator. Since no attomey/client relationship exists, plaintiff has neither grounds nor standing to sustain an action against defendant Marcus Katzen for professional negligence. See McHugh v. Litvin, Blumberg, Matusow & Young, 525 Pa. 1, 574 A.2d 1040 (1990) (noting that establishment of an employment relationship or other basis for duty is an essential element of a legal malpractice claim); Guy v. Liederbach, 501 Pa. 47, 459 A.2d 744 (1983) (retaining the requirement that the plaintiff in a professional malpractice action based on negligence must show an attomey/client relationship to maintain suit); Mursau Corp. v. Florida Penn Oil & Gas Inc., 638 F. Supp. 259, 262 (W.D. Pa. 1986) (holding that “to recover for a breach of fiduciary duty by an attorney, the plaintiff has a threshold burden of showing existence of an attorney-client relationship”), aff’d, 813 F.2d 396 and 398 (3d Cir. 1987).

To create the relationship of attorney and client, there must be some agreement for one party to perform services of the type usually rendered by lawyers, such as to give advice, to render services in court, and to prepare legal papers. Standard Pennsylvania Practice §4:26. In the present case, no such relationship has ever existed between plaintiff and defendant Marcus Katzen.

It is undisputed that no express contract exists between Marcus Katzen and plaintiff whereby Marcus Katzen was to act as plaintiff’s attorney. The existence of any such contract has never been alleged by plaintiff, and no evidence was adduced at trial to the effect that any such contract exists. Thus, the issue becomes whether an implied contract exists. In Atkinson v. Haug, 424 Pa. Super. 406, 411-12, 622 A.2d 983, 986 (1993), the Superior Court, with respect to the existence of an attomey/client relationship stated that:

“Absent an express contract an implied attomey/cli-ent relationship will be found if (1) the purported client sought advice or assistance from the attorney; (2) the advice sought was within the attorney’s professional competence; (3) the attorney expressly or impliedly agreed to render such assistance; and (4) it is reasonable for the putative client to believe the attorney was representing him.”

In that case, Haug and Atkinson were partners in an apartment complex venture. Atkinson brought suit against Haug, an attorney, alleging negligence and malpractice. Haug invested in real estate in addition to pursuing his legal career, and Atkinson, one of his partners, was a college graduate and owner and president of a transportation business employing 90 persons. Id. at 412, 622 A.2d at 986. In finding no attomey/client relationship, the court declared that the fact that Haug was an attorney by trade did not mean that each of his utterances was “legal advice,” capable of being upheld as such in the courts of this Commonwealth. Id. at 414, 622 A.2d at 987. The court concluded that when investing, Attorney Haug simply donned his investor hat and recruited friends and acquaintances to join what all believed would be a profitable venture and that Atkinson’s subjective belief that an attomey/client relationship existed was insufficient grounds to establish that relationship. Id.

In the case at bar, there is no express or implied contract for the performance of legal services between defendant Marcus Katzen and plaintiff. At best, plaintiff had a subjective belief that Marcus Katzen was his attorney. Such a belief, even if sincerely held, is not reasonable. Plaintiff knew prior to closing that the land he was purchasing was owned or controlled by Marcus Katzen and members of his family. Plaintiff also knew prior to closing that Marcus Katzen would be a bond-holder. Thus, plaintiff knew prior to closing that Marcus Katzen’s interests in this transaction were adverse to plaintiff’s interests. Moreover, Marcus Katzen did not communicate the terms of bonds to plaintiff in any way, (Tr. IH, 27-33), and did not review documents with plaintiff prior to closing. (Tr. II, 115.) Plaintiff has not demonstrated in any way that defendant Marcus Katzen ever held himself out to any party as plaintiff’s attorney.

B. No Confidential Relationship Exists Between Marcus Katzen and the Plaintiff

In connection with alleging that defendant Marcus Katzen was plaintiff’s attorney, plaintiff has also alleged that a confidential relationship exists between him and Marcus Katzen. Where a confidential relationship exists, the law presumes the transaction voidable unless the party seeking to enforce the agreement demonstrates that it was fair under all of the circumstances and beyond the reach of suspicion. Frowen v. Blank, 493 Pa. 137, 425 A.2d 412 (1981).

The general test for determining the existence of a confidential relationship is whether it is clear that the parties did not deal on equal terms. Id. at 145, 425 A.2d at 416. In defining a confidential relationship, the Pennsylvania Supreme Court in Leedom v. Palmer, 274 Pa. 22, 25, 117 A. 410, 411 (1922), said:

“Confidential relation is not confined to any specific association of the parties; it is one wherein a party is bound to act for the benefit of another, and can take no advantage to himself. It appears when the circumstances make it certain the parties do not deal on equal terms, but, on the one side there is an overmastering influence, or, on the other, weakness, dependence or trust, justifiably reposed; in both an unfair advantage is possible.”

No such circumstances exist here. The parties did deal on equal terms. Plaintiff is an adult individual under no legal disability, and no cause exists to demonstrate that Marcus Katzen had an overmastering influence on him. There is no evidence to support a finding that plaintiff was a victim of weakness, dependence or trust, justifiably reposed.

C. Plaintiff Should Not Be Permitted To Reform the Bonds in Order To Lower the Reserve Requirement

In his equity claim, plaintiff is seeking to reform the terms of the bonds in order to reduce the reserve requirement to that set forth in Deposit Bank’s commitment letter. It has long been the law that courts of equity have the power to reform a written instrument where there has been a showing of fraud, accident or mistake. Kutsenkow v. Kutsenkow, 414 Pa. 610, 202 A.2d 68 (1964). Absent some legally recognized infringement of the law of contract, however, the law will not reform a written contract for the parties in order to insert or delete terms that they did not make between themselves and certainly never rescue a party who did not reasonably foresee the consequences of his bargain. New Charter Coal v. McKee, 411 Pa. 307, 192 A.2d 221 (1963).

It is axiomatic that, when two parties bargain in good faith and come to an agreement acceptable at the time, one party cannot later come into court and ask for a change in the terms of the agreement because it has not worked to his advantage. Chapleski v. Department of Highways, 5 Pa. Commw. 482, 291 A.2d 360 (1972). Since the terms of the bonds and other closing documents were freely arrived at by the contracting parties, there is no law which does, or could, reform the terms and conditions of the bonds. The financing arrangement here at issue was an arm’s length commercial transaction involving commercial parties and at least two attorneys. Plaintiff had the opportunity to consider the terms and conditions of which he now complains, and he freely agreed to them and obligated himself to them.

The plaintiff expressly acknowledged the terms and conditions of the bonds by executing the investor-developer’s general certificate. In paragraph 5 of the said certificate, plaintiff certified that:

“The investor-developer also approves of the form, execution and delivery of the first mortgage revenue bonds, the debt resolution, and the bond purchase proposals. ” (Joint exhibit 1.) (emphasis added)

Plaintiff expressly affirmed his consent to the terms and conditions of the bonds and other closing documents by executing the investor-developer’s general certificate. He cannot now attempt to revoke his consent to the terms of the bonds simply because he has had a change of heart.

This court cannot possibly accede to plaintiff’s request that this court undo what plaintiff already, upon due reflection, has committed himself to do. The defendants seek nothing more than to assure that they continue to receive the benefit for which they bargained. The plaintiff, on the other hand, is requesting that this court renegotiate the bargain and, as a matter of law, such a request is improper.

Plaintiff asserted that he did not read the bonds and other closing documents prior to executing them; however, Attorney Lynch testified that plaintiff did not request any revisions to any term or condition of the documents. Under Pennsylvania law failure to read documents prior to executing them does not support a cause of action for reformation. “The law of Pennsylvania is clear. One who is about to sign a contract has a duty to read that contract first,” Schillachi v. Flying Dutchman Motorcycle Club, 751 F. Supp. 1169, 1174 (E.D. Pa. 1990), aff’d, 944 F. 2d 898 (3d Cir. 1991), because “[cjontracting parties are normally bound by their agreements, without regard to whether the terms thereof were read and fully understood and irrespective of whether the agreements embodied reasonable or good bargains. ” Simeone v. Simeone, 525 Pa. 392, 400, 581 A.2d 162, 165 (1990). (citations omitted) (emphasis added)

“Once a person enters into a written agreement he builds around himself a stone wall, from which he cannot escape by merely asserting he had not understood what he was signing.” Bollinger v. Central Pennsylvania Quarry Stripping & Construction Co., 425 Pa. 430, 432, 229 A.2d 741, 742 (1967).

Plaintiff alleges that the terms of the closing document should be reformed because they are inconsistent with the terms of the commitment letter. The terms of the commitment letter became irrelevant and merged with the terms of the closing document when plaintiff executed the closing documents. The letter certainly does not survive the subsequent execution of documents which expressed the real agreement of the parties. Moreover, defendants are not even parties to the bank’s commitment letter. The commitment letter was issued by Deposit Bank and executed by plaintiff. It was not executed by any defendant. All testimony and evidence, including Marcus Katzen’s letter to Deposit Bank on November 24, 1986 demonstrates that defendants intended for the reserve account to be maintained at $350,000. In view of the fact that reformation is a remedy which is available when a written instrument fails to express the real agreement or intention of the parties, Potteiger v. Fidelity-Philadelphia Trust Co., 424 Pa. 418, 227 A.2d 864 (1967), it would be particularly inappropriate for defendants to be bound by its terms when defendants did not intend for the reserve account to be maintained at the level set forth in the commitment letter.

Finally, it would be manifestly unfair to the defendants other than Marcus Katzen to disturb this transaction. There are no allegations of wrongdoing against any of them, but any modifications made to the bonds would operate to their detriment. Moreover, it has never been alleged by any party that Marcus Katzen represented the other bondholders. Even if this court were to find that Marcus Katzen was representing plaintiff in the transaction, it can hardly order reformation of the bonds when such a remedy would hurt third parties not represented by Mr. Katzen. The consequences of reforming the bonds could be extreme. Attorney Victor Lynch, who as noted was qualified during trial as an expert in matters related to bonds, testified that in his opinion any action by the court to alter the terms of the bonds would trigger a re-issuance of the bonds under IRS regulations. This means that the bonds would be treated as if issued this year rather than in 1986, which would deprive them of their tax-exempt status. (Tr. I, 106.)

ORDER

Now, December 20, 2001, it is the order of this court as follows:

(1) The plaintiff’s amended complaint is hereby dismissed. Court costs to be borne by the plaintiff.

(2) For purposes of any appeal, this order shall not be considered a final order. The parties are still litigating the defendant’s counterclaim on defendant’s legal fees and amounts paid out of the reserve fund by plaintiff to his attorney. The parties have agreed that the order to be entered by the court on the counterclaim issues will be considered a final order for appeal issues.

      . The trial could not be completed in November 2000. The delay until July 2001 was caused by various continuances requested by counsel.


author: SHAFFER, J.,

text:
    Township of Center v. Nationwide Mutual Insurance Company

      C.P. of Butler County,
    A.D. no. 00-10797.

      Michael D. Hnath, for plaintiffs.

      L. John Argento, for defendants Nationwide.

      J. Elise Tourek, for defendant PennDOT.

      Daniel C. Lawson, for defendant Wiest.

      Brian Kadlubek, for defendants Brough.
    December 21, 2001
   SHAFFER, J.,

Before the court is plaintiffs’ motion for summary judgment and defendants’ Nationwide Mutual Insurance Company and Nationwide Mutual Fire Insurance Company cross-motion for summary judgment. For the reasons set forth below, plaintiffs’ motion for summary judgment is granted and defendants’ cross-motion for summary judgment is denied.

John and Joyce Brough sued Olsen Engineering, Wiest Asphalt, Center Township, and PennDOT, claiming Wiest applied a defective asphalt mixture to a road in Center Township which made the road smooth and slippery during wet weather, which caused John Brough’s auto accident.

Defendants Nationwide Mutual Insurance Company and Nationwide Mutual Fire Insurance Company issued a commercial general liability policy to Center Township. Ron Olsen, a defendant in the underlying case, is the township engineer for Center Township. Center Township made a claim under the insurance policy to have Nationwide defend Olsen in the Brough case. Nationwide responded that Olsen was not covered under the policy. The Center Township Board of Supervisors then voted to provide Olsen with a defense and indemnify him as a township employee.

Plaintiffs sued for a declaratory judgment that Olsen is insured under the policy, that Nationwide has a duty to defend and indemnify Olsen, and that Nationwide should reimburse Center Township for all expenses incurred to date in defending the underlying action and in pursuing this declaratory judgment.

Plaintiffs filed a motion for summary judgment. Defendants filed a cross-motion for summary judgment. The insurance policy covers “executive officers.” Plaintiffs argue that Olsen, as township engineer, was an executive officer. Defendants disagree. Since both parties have stipulated that there is no genuine issue of material fact, the only issue before the court is whether Ron Olsen, the township engineer for Center Township, is an “executive officer” and thus covered under the Nationwide insurance policy.

When interpreting an insurance policy, courts must give the words their plain and proper meaning. Monti v. Rockwood Insurance Co., 303 Pa. Super. 473, 450 A.2d 24 (Pa. Super. 1982). The court must focus on the contract in its entirety, not just the clause being interpreted. Everett Cash Mutual Insurance Co. v. Krawitz, 430 Pa. Super. 25, 633 A.2d 215 (1993). The proper focus when interpreting an insurance policy is the reasonable expectation of the insured. Dibble v. Security of America Life Insurance Co., 404 Pa. Super. 205, 590 A.2d 352 (1991).

Under section II of the insurance policy, Center Township, as an “organization other than a partnership or joint venture” is covered to the following extent: “Your ‘executive officers’ and directors are insureds, but only with respect to their duties as your officers or directors.” The policy defines an “executive officer” as “a person holding any of the officer positions created by your charter, constitution, bylaws, or any other similar governing document.”

Both parties agree that the “similar governing document” of Center Township is the Second Class Township Code. The Code states “The board of supervisors may appoint and determine the compensation of a township engineer who shall be a registered professional engineer. The township engineer serves at the pleasure of the board of supervisors.” 53 P.S. §66201. Plaintiffs argue this clause demonstrates that the township engineer is a person holding an officer position created by a “similar governing document” — the Second Class Township Code.

Defendants argue that since 53 P.S. §65402 lists the “officers to be elected,” but does not list the township engineer, that the township engineer is not an officer. However, section 65402 only lists elected officers, not appointed officers. Since the township engineer is appointed, not elected, his non-inclusion in this list is not dispositive that he is not an officer.

Defendants argue that the language of the Second Class Township Code also demonstrates that the township engineer is not an executive officer. Specifically, defendants argue that “the board of supervisors may appoint ... a township engineer.” 53 P.S. §66201 shows the township engineer is not essential to township government, and thus not an officer. However, nothing in the law or in common definitions of “officer” requires all officers to be essential to township government.

Defendants further argue that the clauses “The township engineer serves at the pleasure of the board of supervisors” 53 P.S. §66201, and “The township engineer shall perform duties as the board of supervisors may direct” 53 P.S. §66202, prove that the township engineer serves as an advisor, thus has no policy-making function, and is therefore not an executive officer. Holm v. Mutual Service Casualty Insurance Co., 261 N.W.2d 598 (1977); Cerino v. Township of Palmer, 265 Pa. Super. 1, 401 A.2d 770 (1979). However, Holm is not controlling in this court. The court in Holm warns that its definition of an executive officer as a policymaker is not a set legal definition, but is only a guideline, and that the case law defining “executive officer” is very confused and falls along policy lines rather than precedential lines. Also, the court in Cerino does not equate policy-making with being an executive officer, but only determines that the township engineer in that case was not protected by governmental immunity because he was not a policymaker.

The court is persuaded by the following definition of “officer”: “where the duties are continuing ones which are defined by government-prescribed rule and not by contract, and the government-appointed individual performs these duties without any contract defining them, if the duties continue even though the person performing them changes, it is difficult to distinguish such employment from an office, or the person performing the duties from an officer.” 3 McQuillin, Municipal Corporations (3 ed.) §12.30.

In this case, Olsen’s duties were defined by government prescribed rule — the Second Class Township Code. There is no evidence of a contract defining his duties. Also, the position of township engineer and the related duties would continue even though the person performing them changes. It follows from this distinction that Olsen, as township engineer, is an officer. And since his position was created by the Second Class Township Code, the governing document of Center Township, Olsen fits the definition of “executive officer” in the insurance policy — “a person holding any of the officer positions created by your charter, constitution, bylaws, or any other similar governing document.”

After considering the above arguments, it is still unclear whether Olsen, as township engineer, is an “executive officer” as defined by the insurance policy or by the Second Class Township Code. Neither plaintiffs nor defendants have proven with any substantial degree of certainty whether Olsen is an “executive officer.” The insurance policy does not clearly define what an “executive officer” is. The Second Class Township Code does not define “officer,” nor does it say which positions in a second class township are officer-level and which are not. There is no controlling legal authority on this issue. McQuillin’s book on municipal corporations is persuasive but not dispositive.

The term “executive officer” in the insurance policy is ambiguous and subject to different interpretations. In doubtful cases such as this, the term should be liberally construed in favor of the insured, and the courts should find coverage for the insured. Techalloy Company Inc. v. Reliance Insurance Co., 338 Pa. Super. 1, 487 A.2d 820 (1984). An insurer must defend any suit in which from the face of the complaint there exists actual or potential coverage. Id. Accordingly, the term “executive officer” is construed in favor of the insured. Plaintiffs’ motion for summary judgment is granted, and defendant’s cross-motion for summary judgment is denied. Ronald Olsen, the township engineer for Center Township, is an executive officer as the term is defined in the Nationwide Insurance policy held by Center Township.

Plaintiffs also request reimbursement for costs, expenses, and legal fees incurred in defending Olsen in the underlying action. Since in the present opinion the court finds that Nationwide is responsible for defending Ronald Olsen in the underlying action, the court accordingly finds that Nationwide must reimburse Center Township for all expenses incurred to date in defending Ronald Olsen in the underlying action — A.D. no. 97-10301.

Plaintiffs also request reimbursement for costs, expenses, and legal fees incurred in bringing the present declaratory judgment action. An insured who brings a declaratory judgment action to establish his insurer’s duty to defend an action brought by a third party may recover his attorneys’ fees incurred in a declaratory judgment action if the insurer has, in bad faith, refused to defend against an action brought by a third party. Kelmo Enterprises Inc. v. Commercial Union Insurance Co., 285 Pa. Super. 13, 426 A.2d 680 (1981). In this case, defendants Nationwide did not act in bad faith when refusing to defend Olsen. Although this court ruled against defendants, defendants did have a reasonable basis for their position that Olsen was not covered by their policy. Defendants did not act in bad faith, thus attorneys’ fees and costs for pursuing this declaratory judgment are not recoverable.

ORDER

And now, December 21, 2001, upon presentation of plaintiffs’ motion for summary judgment and defendant Nationwide’s cross-motion for summary judgment, it is hereby ordered that plaintiffs’ motion is granted and defendants’ motion is denied. It is further ordered and declared that Ronald Olsen, the township engineer of Center Township, is an insured under the general liability policy no. 54PR021684-007. Defendant Nationwide Mutual Fire Insurance Company has a. duty under this policy to defend Ronald Olsen in the underlying civil action docketed at A.D. no. 97-10301, and is responsible to bear all costs of such defense, and to indemnify Ronald Olsen from and against any and all liability arising out of this underlying civil action to the limits of the applicable policy.

It is further ordered that plaintiffs’ request for costs, expenses and legal fees incurred to date in defending Olsen in the underlying action is granted. Plaintiffs’ request for costs, expenses and legal fees incurred in pursuing this declaratory judgment action is denied.