author: BRODY, J.,

text:
    David Jeffrey Ltd. v. Lucente

      John O’Brien Jr. for plaintiff.

      Joseph Connor III, for defendants.
    September 19, 1990
   BRODY, J.,

This matter comes before the court on plaintiff’s appeal from the denial of its motion for a new trial on its common-law and statutory fraud claims against defendants. At the conclusion of plaintiff’s case, a nonsuit was granted as to plaintiff’s claim under the Unfair Trade Practices and Consumer Protection Act. At the conclusion of defendants’ evidence, a directed verdict, based on the statute of limitations, was granted in favor of defendants on the common-law fraud claim. Plaintiff filed post-trial motions, seeking a new trial on all issues and alleging several errors by the trial court in the grant of the nonsuit and directed verdict. Plaintiff’s post-trial motions were denied on July 12, 1990, and plaintiff has appealed to Superior Court.

BACKGROUND

This lawsuit between David Jeffrey Ltd., a retail jewelry business, and Robert Lucente and Jeweler’s Insurance Services Inc. is the second lawsuit brought by the plaintiff to recover for losses allegedly due to employee theft. The first lawsuit, instituted in 1986 against Jeweler’s Mutual Insurance Company, sought to recover approximately $200,000 in inventory allegedly stolen by one of plaintiff’s employees. Plaintiff was denied relief based on the printed policy exclusion for losses due to employee theft provable only by inventory computation. The U.S. District Court (E.D. Pa.), per Newcomer, J., concluded as a matter of law that plaintiff’s alleged losses were not recoverable under the terms of its policy.

After the decision was affirmed on appeal, plaintiff instituted the current action against Robert Lu-cente, the agent from whom the policies were purchased, and Jeweler’s Insurance Services Inc., a corporation wholly owned by Lucente which operates as an agent of Jeweler’s Mutual Insurance Company. Plaintiff’s claim alleged that Lucente fraudulently represented that plaintiff could recover for losses due to employee theft provable by inventory computation. Plaintiff sought recovery under both common-law and statutory fraud theories.

David Jeffrey, Ltd. is owned and operated by David Jeffrey Hallowell. During 1984 and 1985, Hallowell operated two jewelry stores, in Ardmore and in the Bellevue Stratford Hotel, Philadelphia. The two stores employed approximately 12 people, including six sales personnel. One of the sales personnel was Howard Hunsicker, who was hired in September 1984 to work at the Philadelphia store. Sometime during February 1985, Hallowell discovered that a ring belonging to a customer was missing. Mr. Hunsicker was subsequently charged with the theft of the ring and it was recovered. Hallowell testified that he had begun to notice missing cash and pieces of jewelry as early as September 1984. He contacted defendant Lucente, his insurance agent, in October 1984 with regard to these losses, and was told to keep a record of what he observed. Hallowell reported losses to Lucente in December 1984 and February 1985. In March 1985, counsel for plaintiff’s insurance company (not a named defendant in this action) instructed Hallowell to prepare an inventory.

Hallowell testified that he had begun dealing with defendant Lucente in 1979 for his business insurance needs. At that time, Hallowell and Lucente discussed HallowelPs coverage for losses due to employee theft. Hallowell testified that Lucente never informed him that losses could not be proved by inventory computation. Hallowell testified that he first became aware of this restriction in his policy in 1986 when he sued the insurance company to recover for his losses.

DISCUSSION

UTPCPA Claim

The gravamen of plaintiff’s numerous allegations of error regarding the grant of a directed verdict on its UTPCPA claim is that, since Mr. Hallowell suffered personally as a result of defendants’ allegedly fraudulent practices, he should be permitted to state a claim under the UTPCPA even though the insurance coverage at issue was for business rather than personal use. This court found that the statute and cases interpreting it unequivocally restrict the coverage of the UTPCPA to consumer rather than business purchases.

The UTPCPA provides for a private cause of action as follows:

“Any person who purchases or leases goods or services primarily for personal, family or household purposes and thereby suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment by any person or a method, act or practice declared unlawful by section 3 of this act, may bring a private action, to recover actual damages or $100, whichever is greater. The court may, in its discretion, award up to three times the actual damages sustained, but not less than $100, and may provide such additional relief as it deems necessary or proper.” 73 P.S. §201-9-2.

This court further found no evidence to support plaintiff’s contention that the insurance coverage was for anything but business purposes and therefore held that plaintiff could not state a claim under the UTPCPA.

In Waldo v. North American Van Lines, 669 F.Supp. 722 (W.D. Pa. 1987), the District Court stated that “[t]he obvious intent of this language [§201-9.2] is to restrict claims brought under the [UTPCPA] to those which are legitimately of a consumer nature.” Id. at 725. The court held that a truck driver’s purchase of a tractor and insurance coverage was solely for use in his trucking business and thus was not a consumer purchase under the UTPCPA.

In Valley Forge Towers South Condominium v. Ron-Ike Foam Insulators Inc., 393 Pa. Super. 339, 574 A.2d 641 (1990), the Superior Court was presented with its first opportunity to interpret the “primarily personal purpose” language of the UTPCPA. The court concluded that “[t]he restriction included in the act addresses itself solely to the purpose of the purchase, not the type of product purchased.”

The fact that the plaintiff in Waldo, like Mr. Hallowell, may have personally sustained losses, did not enter into the court’s analysis of the nature of the purchase at issue. Nor does the reasoning of Valley Forge Towers, supra, lead to a result other than that reached by this court; indeed, this court focused on the purpose of the purchase at issue, precisely as Valley Forge Towers instructs. Plaintiff would have this court adopt a “primarily personal effect” test, for which it presents no support, either statutory or decisional. That a business loss might inure to the detriment of an individual’s finances does not convert a business purchase to a consumer purchase for the purposes of the UTPCPA.

In construing the application of the UTPCPA to plaintiff’s claim, this court was mindful of the fact that the legislative intent was to enhance the protection of the public from unfair or deceptive business practices, Gabriel v. O’Hara, 368 Pa. Super. 383, 388 and n. 6, 534 A.2d 488, 491 and n.6 (1987), and that the act should be liberally construed to effectuate its remedial intent. Id. at 388, 534 A.2d at 491.

Narrowing the inquiry to the facts of this case, it is undisputed that an insured may maintain a private cause of action under the UTPCPA for acts which fall within the purview of acts and practices prohibited by the Unfair Insurance Practices Act. Pekular v. Eich, 355 Pa. Super. 276, 513 A.2d 427 (1986), alloc. den. 516 Pa. 635, 533 A.2d 93 (1987).

It is also undisputed that a protected “person” within the UTPCPA includes “natural persons, corporations, trusts, partnerships, incorporated or unincorporated associations, and any other legal entities,” 73 P.S. §201-2(2), and that plaintiff (a corporation) could state a claim under the UTPCPA if the purchase at issue had been “primarily for personal, family or household purposes.” 73 P.S. §201-9(2).

Under the most liberal construction of §201-9(2), however, it remains undeniable that the purpose of the policy at issue was to protect the business of David Jeffrey Ltd. from loss. It was not a life or health insurance policy for Mr. Hallowell’s person, nor was it an automobile insurance policy for Mr. Hallowell’s personal car. It was a business liability policy, no more and no less. Therefore, this court properly granted a nonsuit on plaintiff’s claim under the UTPCPA.

Common-Law Fraud Claim

The statute of limitations for common-law fraud is two years. 42 Pa.C.S. §5524(7). Mr. Hallowell himself testified that he first became aware that his policy with Jeweler’s Mutual Insurance Company did not cover losses due to employee theft provable only by inventory computation, when he filed the first lawsuit in July 1986. The second suit, alleging fraud, was not filed until May 1989, more than two years later.

Plaintiff asserts that he was not aware that defendants Lucente and Jeweler’s Insurance Services Inc. had made misrepresentations regarding the policy’s coverage until the Third Circuit Court of Appeals affirmed the district court ruling in favor of the insurance company, in August 1988. Therefore, the plaintiff claims that his suit was filed within two years of his discovery of the alleged fraud. Defendants assert, and this court agrees, that plaintiff’s statement, that he was aware of the non-coverage at the time he initiated the first suit, combined with his testimony that he understood the policy to provide coverage for the losses he claimed, clearly establish that plaintiff knew of his alleged injury in 1986 and is therefore time-barred from bringing this claim.

Plaintiff argues that when fraud and concealment are alleged, a plaintiff is often unaware, as a result of the concealment, that he/she has suffered an injury. This is true, but irrelevant to the facts of this case. Plaintiff is not alleging that facts were brought out during the first trial of which he was previously unaware, nor is he alleging that defendants’ conduct, after July 1986, led him to believe that he could recover for his claimed losses.

On the contrary, plaintiff’s fraud claim is based on two assertions: that Lucente told Hallowell that employee losses could be proved by inventory computation, and that Hallowell was subsequently denied coverage, based on the written policy exclusion. Both of these “events” occurred before July 1986. Nor is this court persuaded by plaintiff’s argument that his 1986 contract action would have been prejudiced by joinder of the fraud claim at that time. Alternative pleadings are necessary to efficient dispute resolution; indeed, alternative pleading is required by the doctrines of limitation of actions and res judicata.

Plaintiff’s own testimony established that he knew of the alleged fraud in 1986. No evidence was offered to refute this knowledge other than plaintiff’s novel legal argument that the statute did not begin to run until the Third Circuit Court of Appeals said there was no coverage. Therefore, this court correctly granted a directed verdict on the common-law fraud claim.

CONCLUSION

For the reasons stated above, this court’s order of July 12, 1990, denying plaintiff’s motion for a new trial, should be affirmed.

       73 Pa.C.S. §201-1, et. seq., P.L. 1166, no. 260, §1 (November 24, 1976).

      . Plaintiffs post-trial motion refers only obliquely, in paragraph 8, to the grant of the directed verdict on the common-law fraud claim. Since plaintiff briefed and argued both claims, however, before, during and after the trial, both the nonsuit and the directed verdict will be addressed by this opinion.

      . At the time of this trial, defendants moved for summary judgment based on res judicata and collateral estoppel. Plaintiffs were barred from introducing evidence relevant to findings made in the district court, except to the extent that they were necessary to establish damages. Those rulings are not at issue in this appeal.

      . Because this court determined that the UTPCPA provides no cause of action for goods or services purchased for business purposes, the merits of plaintiffs claim, that defendants had engaged in practices declared unlawful by the UTPCPA and that plaintiff had suffered resultant damages, were never reached.

      . 40 Pa.C.S. §§1171.1-1171.15, Act of July 22,1974, P.L. 589, no. 205, §§1 to 16, effective immediately. The Unfair Insurance Practices Act does not provide for a private cause of action.

      . The court, in Valley Forge Towers, held that a condominium association’s purchase of roofing materials fell within the UTPCPA because, the association (a “person” under §201-2(2)) was acting as a representative for the residents, and that therefore the purchase was for a primarily personal, family or household purpose.

      . The statute of limitations for a private cause of action under the UTPCPA is also two years. Cramer v. Inter County Hospitalization Plan Inc., 46 D.&C. 3d 288 (1986). Since defendants’ opposition to the UTPCPA claim was essentially a demurrer, the affirmative defense of the statute of limitations was neither raised nor addressed.

      . Cf. Robinson v. MFA Mutual Insurance Company, 629 F.2d 497 (8th Cir. 1980), wherein the court held that a second suit brought by an insured, for wrongful refusal to pay and deceit, was not barred by res judicata when the deceitful conduct was not revealed until the trial of the claim to enforce the insurance contract.


source: Caselaw Access Project

author: HESS, J.,

license: Public Domain

text:
    General Accident Insurance Co. v. Eyer

      George F. Douglas Jr., for plaintiff.

      Deborah Packer, for defendant.
    July 24, 1990
   HESS, J.,

This is an action in which plaintiff, General Accident Insurance Company, seeks a declaration to the effect that it does not owe a duty of defense or coverage to either Kirk L. Eyer or his mother, Betty Jane Eyer, in a certain lawsuit involving them as defendants and Jacqueline Stone and Rodney Drawbaugh as plaintiffs. Specifically, General Accident denies coverage with respect to an automobile accident that occurred on June 10, 1989, when defendant, Kirk Eyer, operating a 1978 Chevrolet Malibu titled to his mother’s name, collided with a vehicle occupied by Stone and Drawbaugh. We took testimony in this declaratory-judgment case on June 8, 1990. The principle facts are essentially undisputed.

Betty Eyer resides with her children in a rural area of Cumberland County near Newburg. A rather long driveway extends from their dwelling home to the public road. It is primarily on this driveway that Kirk had driven his mother’s Chevrolet Malibu while doing repairs to the vehicle. On the other hand, from the time she had purchased the Malibu, as a used car, Betty Eyer had not permitted Kirk to drive the car on a public thoroughfare with the exception of the last few miles home from the car dealership and on one or two occasions when he was taking his girlfriend back to her home.

On or about June 6, 1989, Mrs. Eyer left for a camping trip to Canada along with family and friends in a rented van. Before leaving, Mrs. Eyer locked all of the doors of the Malibu and took both sets of keys to the vehicle. Mrs. Eyer then forbade her son Kirk to operate the vehicle while she was gone, using words to the effect of “Don’t touch my car. . .” After she had locked the car and put the keys in her purse, Kirk switched the keys, putting an old set in her purse. On June 10, 1989, while Betty Eyer was still in Canada, Kirk drove the Malibu on a public road and became involved in an intersection collision with Jacqueline Stone and Rodney Drawbaugh.

The automobile policy, issued by General Accident Insurance Company, provides for the payment of damages “for bodily injuiy or property damage for which any insured becomes legally responsible because of an automobile accident.” Paragraph B of the policy goes on to define “insured” as:

“(B) ‘Insured’ as used in this Part means:

“(1) You or any ‘family member’ for the ownership, maintenance or use of any auto or ‘trailer.’

“(2) Any person using ‘your covered auto.’ ”

The accident involving Kirk would have been covered under this section but for the liability coverage exclusion in the policy which provides as follows:

“(A) We do not provide Liability Coverage for any person:

“(8) Using a vehicle without a reasonable belief that that person is entitled to do so.”

General Accident Insurance Company argues that, because Mrs. Eyer forbade the use of the Malibu vehicle by her son Kirk, the above exclusionary language is applicable to the accident of June 10, 1989. Were this the end of the factual inquiry, their contention would be correct.

While we cannot permit sympathy to rule in our deliberation of this matter, the fact that Mrs. Eyer is of extremely modest means is otherwise relevant. Notwithstanding her gainful employment, her living standard in June 1989 was something barely above subsistence. In fact, her trip to Canada was feasible only because expenses were kept to a minimum and shared with others. She was, thus, greatly concerned with expenses that she was to face in the near future, particularly those having to do with the maintenance of her Chevrolet Malibu. Specifically, the transmission on the vehicle had begun to wear and Mrs. Eyer was most concerned as to how she would afford the cost of replacing it. Prior to Mrs. Eyer’s leaving for Canada, Kirk had located a transmission and it was his intent, while his mother was out of town, to install the transmission without cost to his mother. It was, in fact, after the transmission was installed and while on a test drive that Kirk was involved in the automobile accident which is the subject of the underlying civil suit brought to 3058 Civil 1989.

In the plaintiff’s trial brief, there are five cases cited in support of their legal argument that General Accident owes no duty of coverage to the Eyers. Each of those cases, however, involves situations in which the owner of the vehicle in question gave it to a relative with strict instructions that no one else was to drive the vehicle. Each of these cases, in turn, involves a situation where accidents occurred while the vehicle was being driven by someone other than the relative to whom the automobile was given. These cases, generally, deal with the question of whether or not the operators of the vehicles had express or implied “permission” to drive.

These cases deal with questions of construction which are not now before us. It goes without saying that we are not required to construe any language other than that contained in the policy at issue. The policy sub judice provides as the only applicable exclusion to blanket coverage, for a family member using the automobile, the use of a vehicle “without a reasonable belief that that person is entitled to do so.” Thus, under the General Accident Insurance Policy in question, the issue in this case is not what Mrs. Eyer intended at the time she admonished her son not to drive her Malibu or even whether Kirk had “permission,” but rather, what were Kirk’s beliefs and whether they were “reasonable.” Simply put, did Kirk believe that he was “entitled” to use the Malibu to install a transmission as a very pleasant surprise for his mother and was this belief reasonable? The answer to both questions is clearly in the affirmative.

Plaintiff would have us interpret the word “entitled” as requiring express permission. That is certainly an arguable interpretation. The law, however, is unmistakably clear that where the language of a policy, prepared by an insurer, is susceptible to more than one construction, we are required to resolve such differences in favor of the insured. Cohen v. Erie Indemnity Co., 288 Pa. Super. 445, 432 A.2d 596 (1981). This we do.

ORDER

And now, July 24, 1990, after hearing and careful consideration of the testimony therein adduced, we find in favor of defendants and against plaintiff, General Accident Insurance Company. The court finds and declares that the said plaintiff owes to the defendants, Kirk L. Eyer and Betty Jane Eyer, a duty of defense and coverage with respect to claims arising out of an automobile accident that occurred on June 10, 1989, the subject of a suit filed in Cumberland County at Docket no. 3058 Civil 1989.

       The plaintiff argues that Kirk was not “entitled” to operate the vehicle because he had no driver’s license. This, however, does not comport with our recollection of the testimony which indicated that he became a licensed driver some months before the accident.


author: ACKER, P.J.,

text:
    Brocklehurst v. Watson

      Anna Belle Jones, for plaintiffs.

      William J. Madden, for defendant David Thomas Watson.

      Robert G. Yeatts, for additional defendants.
    September 14, 1990
   ACKER, P.J.,

We have for consideration plaintiff’s motion for damages for delay. This motion arises from a jury verdict returned against defendant, David Thomas Watson, and additional defendants, Karen and David Brock-lehurst, and the Township of Lake, on May 24, 1990.

On November 18, 1986, plaintiffs filed a complaint against defendants, David and Cheiyl Watson. The complaint arises from an incident which occurred on May 23, 1985. It is alleged by defendants that they were prepared to proceed to trial on September 27, 1989. It is further alleged by defendants that trial was delayed to January 1, 1990, because plaintiffs, Karen and David Brocklehurst, as additional defendants, did not have counsel and did not secure counsel until February 28, 1990. The trial commenced on May 22, 1990. A verdict for plaintiff was rendered May 24, 1990.

It is plaintiff’s position that, pursuant to Pa.R.C.P. 238, due to the delay in bringing this case to trial, this court should add damages for delay computed from November 18, 1986. Defendants, David and Cheryl Watson, object to plaintiff’s position, first, because the request for delay damages was untimely filed; and second, the plaintiff incorrectly computed delay damages. It is defendant’s position that, if any delay damages are owing, the calculating time should not begin to run until February 12, 1988, and should not include the time period that plaintiff allegedly delayed while obtaining counsel to represent them as additional defendants.

Delay damages are authorized by Pa.R.C.P. 238, 42 Pa.C.S.

“Rule 238. Damages for Delay in Actions for Bodily Injury, Death or Property Damage

“(a)(1) At the request of the plaintiff in a civil action seeking monetary relief for bodily injury, death or property damage, damages for delay shall be added to the amount of compensatory damages awarded against each defendant or additional defendant found to be liable to the plaintiff in the verdict of a jury, in the decision of the court in a nonjury trial or in the award of arbitrators appointed under section 7361 of the Judicial Code, 42 Pa.C.S. §7361, and shall become part of the verdict, decision or award.

“(2) Damages for delay shall be awarded for the period of time

“(i) in an action commenced before August 1, 1989, from the date the plaintiff first filed a complaint or from a date one year after the accrual of the cause of action, whichever is later, up to the date of the award, verdict or decision; or

“(ii) in an action commenced on or after August 1, 1989, from a date one year after the date original process was first served in the action up to the date of the award, verdict or decision.

“(3) Damages for delay shall be calculated at the rate equal to the prime rate as listed in the first edition of the Wall Street Journal published for each calendar year for which the damages are awarded, plus one percent, not compounded.” Pa.R.C.P. 238(a), 42 Pa.C.S.

II

It is defendant’s position that delay damages should not be awarded at all based on the fact that plaintiff filed them untimely. Pa.R.C.P. 238(c) states that “not later than 10 days after the verdict or notice of the decision, the plaintiff may file a written motion requesting damages for delay and setting forth the computation.” The facts are undisputed that in the instant case plaintiff did not move for delay damages until 18 days after the jury handed down their verdict. Plaintiffs have informed the court that this lapse of time occurred due to the inadvertence of plaintiff’s counsel.

“A trial court has broad discretion to entertain untimely procedural motions.” Wittig v. Carlacci, 370 Pa. Super. 584, 537 A.2d 29 (1988).

In Wittig, the Pennsylvania Superior Court was confronted with a similar procedural issue. In that case post-trial motions were not filed until 18 days (the exact number as in the instant case) after the trial court’s adjudication. Despite the untimeliness of the motion, the trial court addressed the merits of the issues raised. The Superior Court stated that Pa.R.C.P. 2271 was a procedural rule and not jurisdictional. Therefore, the court ruled that the trial court should be afforded broad discretion to entertain untimely procedural motions. Wittig v. Carlacci, supra.

We conclude the time limits placed on filing a motion for delay damages should be treated as the time restraints provided in other procedural rules. The trial court is afforded broad discretion to entertain such an untimely procedural motion. Wittig v. Carlacci, supra.

The Superior Court in Wittig lists the following cases in which the appellate courts have recognized the broad discretion afforded trial courts to entertain untimely motions. Karpe v. Borough of Stroudsburg, 290 Pa. Super. 559, n.2, 434 A.2d 1292, n.2 (1981) (judgment notwithstanding the verdict and motion for a new trial treated as exceptions to the verdict); Brodsky v. Philadelphia Athletic Club, 277 Pa. Super. 549, 419 A.2d 1285 (1980) (filing exceptions nunc pro tunc three days after the 10-day period); Plato v. City of Pittsburgh, 71 Pa. Commw. 463, 454 A.2d 1196 (1983) (exceptions filed six days after 10-day period). See also, SNT Industries Inc. v. Geanopulos, 512 Pa. 330, 516 A.2d 705 (1986) (the Supreme Court reversed and remanded for consideration of merits of appeal, even though considered by trial court, because of late filing of supplemental post-trial motions), and Coyne v. County of Allegheny, 129 Pa. Commw. 554, 566 A.2d 378 (1989) (agreed with reasoning of Wittig, supra; post-trial motions filed 11 days after 10-day limit).

In the instant case, plaintiff’s attorney candidly admitted to this court that through her inadvertence she failed to file the motion for delay damages within the 10-day limit as prescribed in rule 238(c), Pa.R.C.P. This case is factually very similar to Brodsky v. Philadelphia Athletic Club, 277 Pa. Super. 549, 419 A.2d 1285 (1980). In Brodsky appellant’s failure to file timely exceptions was due to counsel’s mistake in believing that he had 20 days instead of 10 days within which to file exceptions. The Superior Court held the matter lies within the discretion of the chancellor to permit filing of exceptions to the chancellor’s ruling nunc pro tunc after the 10-day period has expired. The court further recognized that mistake of counsel is a basis on which courts have frequently acted to relieve a party of defaults. See Ecumenical Enterprises v. Nadco Construction Inc., 253 Pa. Super. 386, 385 A.2d 392 (1978); Alexander v. Jesray Construction Co., 237 Pa. Super. 99, 346 A.2d 566 (1975).

It is this court’s decision to entertain plaintiff’s motion for delay damages. The 10-day limit prescribed in rule 238(c), Pa.R.C.P. is a procedural matter for which trial courts are afforded a great deal of discretion. It would be unjust to penalize the plaintiffs for their attorney’s mistake.

Ill

Consistent with our decision allowing plaintiff to proceed, we now examine the calculation of delay damages pursuant to rule 238, Pa.R.C.P.

Rule 238(b) contains the following language:

“(b) the period of time for which damages for delay shall be calculated under subdivision (a)(2) shall exclude the period of time, if any,

“(1) after which the defendant has made a written offer of

“(i) settlement in a specified sum with prompt cash payment to the plaintiff, or

“(ii) a structured settlement underwritten by a financially responsible entity, and continued that offer in effect for at least 90 days or until commencement of trial, whichever first occurs, which offer was not accepted and the plaintiff did not recover by award, verdict or decision, exclusive of damages for delay, more than 125 percent of either the specified sum or the actual cost of the structured settlement plus any cash payment to the plaintiff; or

“(2) during which the plaintiff caused delay of the trial.

“Note: This rule does not preclude the suspension of damages for delay as a pretrial sanction under Discovery Rule 4019.” (emphasis in original)

Delay damages in this case are to be calculated continuously from the date the original complaint was filed. Rule 238 does not permit the exclusion from the calculation of delay-damage periods of delay for which no party is responsible. Tindal v. SEPTA, 385 Pa. Super. 94, 560 A.2d 183 (1989).

Rule 238 excludes awards of delay only during two specific periods of time.

“(1) Any periods of time after which the defendant has made a written offer of settlement, the offer is continued in effect for at least 90 days or until the commencement of trial, whichever occurs first, the offer is rejected by the plaintiff, and the plaintiff does not recover more than 125 percent of the offer; and (2) any periods of time during which the plaintiff caused delay of the trial.” Shellhammer v. Grey, 390 Pa. Super. 122, 568 A.2d 224 (1989); Tindal v. SEPTA, 385 Pa. Super. 94, 560 A.2d 183 (1989).

IV

In the instant case, this action was commenced prior to August 1, 1989. According to rule 238(a)(2)(i), delay damages would therefore begin to run on November 18, 1986, the date when the complaint was filed. The date of the complaint occurred later than a date one year after the accrual of the cause of action.

A jury verdict was returned on May 24, 1990. The total period for calculating delay damages in the case, not taking into account any excluded periods of time, would be from November 18, 1986 to May 24, 1990.

We note the record is void of any written offer made by defendants to plaintiffs. Pa.R.C.P. 238(b)(1). As to delay claimed to have been caused by plaintiff, it is defendants’ position that, although defendants were ready to proceed to trial on September 27, 1989, the trial was delayed until January 1990 because plaintiffs, Karen and David Brockle-hurst, as additional defendants, did not have counsel. It is defendant’s contention that this period of delay should be attributed to plaintiffs and should be excluded for the calculations. We disagree.

“The basic aim of rule 238 is to alleviate delay in the disposition of cases and thereby lessen congestion in the courts.” Jistarri v. Fentress, 390 Pa. Super. 209, 568 A.2d 618 (1989); Sherril v. Port Authority of Allegheny County, 383 Pa. Super. 104, 556 A.2d 450 (1989). The clear-cut goal of rule 238 is to promote early settlement. Jistarri v. Fentress, supra.

With this in mind, it is clear that plaintiff should not be penalized for delay during the period that they were without counsel as additional defendants in the case. Rule 238 is designed to establish and promote the settlement of cases. Jistarri v. Fentress, supra. Despite the fact that plaintiff needed time to employ counsel to represent them, as additional defendants, defendants David and Cheryl Watson were not prevented during this time from attempting to settle the case with the plaintiffs. Had the defendants presented a written settlement offer to plaintiffs during this time period, calculation of delay damages would have been tolled. Instead, defendants failed to make any offer to plaintiffs. Defendants will not be permitted to benefit from these circumstances. This is particularly true when defendants joined plaintiffs as additional defendants, requiring them to employ new counsel due to potential conflicts of interest.

Newly enacted rule 238 does not permit the exclusion from the calculation of delay damages periods of delay for which no party is responsible due to extraneous administrative concerns. Tindal v. SEPTA, supra.

V

Consistent with the preceding findings, delay damages will be awarded to the plaintiff for the time period of November 18, 1986 to May 24,1990. These damages shall be calculated pursuant to rule 238(3) which provides for a rate equal to the prime rate as listed in the first edition of the Wall Street Journal published for each calendar year for which the damages are awarded, plus one percent, not compounded. The prime rate published in the first edition of the Wall Street Journal for each of the years specified is as follows:

Date of Publication Prime Rate

January 2, 1986 9 1/2 + 1 = 10 1/2

January 2, 1987 7 1/2 + 1 = 8 1/2

January 4, 1988 8 3/4 + 1 = 9 3/4

January 3, 1989 10 1/2 + 1 = 11 1/2

January 2, 1990 10 1/2 + 1 = 11 1/2

Applying these numbers to the amounts arrived at by the jury, we arrive at the following amount of delay damages owed the respective parties.

Plaintiff Amber Brocklehurst’s Claim

11/18/86 to 12/31/86 $16,000 x 10 1/2 = $197.80

1/1/87 to 12/31/87 16,000 x 8 1/2 = 1,360.00

1/1/88 to 12/31/88 16,000 x 9 3/4 = 1 2.560.00

1/1/89 to 12/31/89 16,000 x 11 1/2 = 1,840.00

1/1/90 to 5/24/90 16,000 x 11 1/2 = 725.76

Delay Damages $5,683.56

Parents’ Derivative Claim

11/18/86 to 12/31/86 $3,701.50x10 1/2 = $45.58

1/1/87 to 12/31/87 3,701.50 x 8 1/2 = 314.63

1/1/88 to 12/31/88 3,701.50 x 9 3/4 = 360.90

1/1/89 to 12/31/89 3,701.50 x 11 1/2 = 425.67

1/1/90 to 5/24/90 3,701.50 x 11 1/2 = 168.48

Delay Damages $1,315.26

We conclude defendants owe the parents of plaintiff a total of $5,016.76, and they owe plaintiff, Amber Brocklehurst, a total of $21,683.56.

Hence, this

ORDER

And now, September 14, 1990, it is hereby ordered and decreed the motion of defendant, David Thomas Watson, to dismiss is denied.

Damages for delay pursuant to Pa.R.C.P. 238 are awarded to petitioner, Amber Brocklehurst, through her father, David Brocklehurst, in the amount of $5,683.56, and to David Brocklehurst and Karen Brocklehurst in their own right in the amount of $1,315.26.

       Before continuing our inquiry concerning the timeliness of plaintiff’s motion for delay damages, we note that it is unclear whether such a motion should be treated as a post-trial motion or something else altogether. While it is true that rule 238 delay damages and rule 227.1 post-trial motions both demand filing of the motions within 10 days of the verdict or filing of the decision, the Superior Court in Dietrich v. J.I. Case Co., 390 Pa. Super. 475, 568 A.2d 1272 (1990), noted that neither the Rules of Appellate Procedure, nor the Rules of Civil Procedure, have ever specifically required issues concerning delay damages to be raised in post-trial motions. Dietrich v. J.I. Case Co., supra, n.7.


author: MILLER, P.J.,

text:
    Ray v. Luce

      George A. Kotjarapoglus, for plaintiffs.

      Kemp C. Scales, for defendants.
    September 12, 1990
   MILLER, P.J.,

The court is called upon to determine whether a deed reservation of some oil and gas interest was a reservation of a royalty interest or mineral interest.

This is an action for declaratory judgment and partition. Before the court for disposition at this point is the declaratory-judgment action.

FACTS

Plaintiffs Lenore Ray and Wanda Walker are the owners of land in Troy Township, Crawford County, Pennsylvania. Plaintiff Mark Resources entered into an oil and gas lease with Lenore Ray and Wanda Walker on March 24, 1988. Defendants, whose exact identity and whereabouts are unknown, are the owners of some interest in the gas and oil. Plaintiffs desire that the court determine what that interest is.

Defendant, E. Lovina Luce, one of the prior owners of the fee, reserved an undivided one-eighth interest in all oil and gas “produced or found” on property situate in Troy Township, Crawford County, Pa. That reservation provides as follows:

“The grantor reserves, however for herself and her heirs and assigns, the one-eighth of all oil and gas produced or found on said land for all times (forever).” (emphasis supplied)

Under Pa.R.C.P. 1602 where the declaratory judgment is ancillary to other actions as to whether it is under law or equity jurisdiction is determined by the other remaining causes of action or requests for relief. Therefore, this case is properly within equity jurisdiction as the remedy for the partition of land is an equitable remedy.

The Declaratory Judgment Act at 42 Pa.C.S. §7531 et seq. states that the act is remedial and intended to provide relief from uncertainty and to establish the various legal relationships, 42 Pa.C.S. §7532; Curtis v. Cleland, 122 Pa. Commw. 328, 552 A.2d 316 (1988). The action for declaratory judgment is appropriate for the construction of documents, including deeds and written contracts, to obtain “a declaration of rights, status, or other legal relations thereunder.” 42 Pa.C.S. §7533. The contract need not have been breached for a declaratory judgment action to commence, 42 Pa.C.S. §7534. However, for relief to be granted under the act, all parties who have an interest must be made party to the action. 42 Pa.C.S. §7540(b).

Plaintiffs herein wish to know their rights and obligations under the 1906 Luce deed reserving the one-eighth interest in oil and gas. It is clear that the Declaratory Judgment Act is applicable to the facts of this case and is an appropriate remedy.

The rules of deed construction can be classified briefly. In construing deeds, as well as written agreements, we are to ascertain the intention of the parties at the time the transaction took place. Lyncott Corporation v. Chemical Waste Mgt., 690 F.Supp. 1409 (E.D. Pa. 1988); Ress v. Berent, 378 Pa. Super. 397, 548 A.2d 1259 (1988).

Where the language of a deed is clear and unambiguous the court must consider the plain meaning of the words used rather than what the parties may have intended. In re Appointment of Viewers, 409 Pa. 290, 186 A.2d 20 (1962); Estate of Bruce, 372 Pa. Super. 16, 538 A.2d 923 (1988). An instrument, however, is not ambiguous simply because the parties cannot agree upon the proper. construction. Metzer v. Clifford Realty Corp., 327 Pa. Super. 377, 476 A.2d 1 (1984). There must be “objective indi-cia” that the terms are susceptible to different meanings. Z&L Lumber Co. v. Nordquist, 348 Pa. Super. 580, 502 A.2d 697 (1985). In making the determination whether the terms are clear and unambiguous, the court not only considers the words of the writing, but the alternative meanings suggested by counsel, and extrinsic evidence offered in support of those meanings. Krobin Refrigerated Xpress Inc. v. Pitterich, 805 F.2d 96 (3d Cir. 1986) [interpreting Pennsylvania law]. The court must hear evidence or, in this case, argument presented by both parties in determining if an ambiguity exists; and is not to look at the document alone in a vacuum. Z&L Lumber, supra.

A number of principles that the court may take into consideration in deed or instrument construction are not present here. For instance we do not know anything about the subsequent acts of the parties when the deed was made and delivered in 1906 to show the construction they placed on the key deed wording. Ryan v. Hudak, 490 Pa. 211, 185 A.2d 570 (1962). We do not know anything about conversations that took place at the time the grant was made. Baederwood Inc. v. Moyer, 370 Pa. 335, 87 A.2d 246 (1952); Price v. Anderson, 358 Pa. 209, 56 A.2d 215 (1948). We do not know anything about the surrounding circumstances, such as whether or not the grantors or grantees in the 1906 deed ever entered into an oil and gas lease, made further assignment, etc. Flaherty v. DeHaven, 302 Pa. Super. 412, 448 A.2d 1108 (1982).

We have considered the various factors influential in the process of construing the deed language. For instance there are helpful discussions in Williams and Myers, Oil and Gas Law, §304, and an article written by a member of the bar of this court, “The Mineral Interest-Royalty Distinction: An Eastern View and Update,” by Russell L. Schetroma, found at 8 E. Minn. L. Inst. 18-1 (1987).

It appears that there is no extrinsic evidence or parties available. Plaintiffs’ understanding of the reservation is irrelevant since they were not parties to the original 1906 deed reserving the one-eighth interest in oil and gas. Thus the court is left with interpreting the words which the parties used.

Plaintiffs’ counsel makes the argument that any ambiguity should be construed against the grantor and in favor of the grantee. Though true this rule of construction is only used once the court determines, after review of all the evidence and the applicable law, that an ambiguity still exists. That rule states that:

“Where the terms of a deed are doubtful, the court will adopt construction which is most in favor of the grantee and against the grantors.” Walker v. Walker, 153 Pa. Super. 20, 33 A.2d 455 (1943); Ansberry v. Brodheads Forest and Stream Assn., 315 Pa. 513, 174 A.2d 97 (1961).

Did defendants reserve a mineral or royalty interest unto themselves in the 1906 deed?

A mineral estate is the most complete ownership of minerals, oil and gas recognized in the law. It is, quite simply, ownership of oil and gas prior to production. It includes the right to enter onto land to explore, drill for, produce and otherwise carry on mining, or oil and gas activities. The owner of a mineral estate has the right to do any and all acts necessary to discover and produce oil and gas. He has the right to grant leases, the right to receive bonuses and delayed rentals. The mineral interest is not free of costs, however. It is subject to the cost of exploration, development, production, marketing, etc.

On the other hand, a royalty interest is the right to share in completed production. It attains economic reality after exploration, extraction and the cost of production has occurred. It is a share of the product. The owner of a royalty interest has no right to do any act or thing to discover and produce oil and gas. He has no right to grant leases. It is not an interest in fee. See, for example, Williams and Myers, Oil and Gas Law, §301 et seq.; Mounger v. Pittman, 108 So.2d 565 (Miss. 1959); 58 C.J.S., Mines and Minerals, §155 et seq.

There appear to be no Pennsylvania appellate decisions deciding what language or magic words create a mineral interest versus a royalty interest. In arriving at our conclusion we have placed the greatest emphasis on the words used by the parties in the 1906 deed mindful of the caveat given by Williams and Myers, Oil and Gas Law, §304, that isolating and analyzing factors separately is risky because most cases have combined ingredients. In those cases the relative importance of particular factors may not be easy to observe.

We found no case where the words “produced” or “found” were used either together, or in conjunction with expanded language.

In Hardy v. Greathouse, 94 N.E.2d 134 (Ill. 1950), the court held that an oil and gas reservation almost identical to the one found in the Luce deed where the word “produced” (not “may be produced”) was used meant after oil and gas were taken from the ground. The court held that the intent was that a royalty interest and not a mineral interest was retained. Other decisions seem to support this interpretation. See also, Neel v. Rudman, 50 So.2d 234 (Fla. 1948).

In Mounger v. Pittman, 108 So.2d 565 (Miss. 1959), the magical term used was “which may be produced.” The court held that this language implied an interest before production, and was thus a mineral interest. Other courts, however, have held that this same language means a royalty interest was granted or reserved, and not a mineral interest.

The use of the words “in and under” is usually sufficient to indicate a mineral interest. Williams and Myers, supra, §§304.4, 304.5. Some cases hold that the absence of those words therefore indicates a royalty interest while other cases disagree. Williams and Myers, §304.4; Miller v. Speed, 248 S.W.2d 250 (Tex. Civ. App. 1952).

The term “produced and saved” is, according to Williams and Myers, the counter phraseology to “in and under.” “Produced and saved” indicates a royalty interest. Williams and Myers, §§304.5, 304.7. In fact the authors represent that they were only able to find one case where a court allowed that term to indicate a mineral interest and that is where additional language was used too. See Simson v. Langholf, 293 P.2d 302 (Colo. 1956).

In Casteel v. Crigler, 266 P.2d 643 (Okla. 1954) a deed reservation of “all that may hereafter be produced and saved ” was held to indicate a royalty interest. The effect of the word “hereafter” was not discussed but undoubtedly it was significant.

In McDonald v. Bennett, 164 S.E. 298 (W.Va. 1932) the term “that may be produced” indicated a royalty interest. The court held that it was apparent from the words “that the parties were not speaking in terms of an interest in oil and gas then in place.” Rather the parties were speaking of a royalty interest which would follow production of oil and gas or both.

We conclude that the use of the word “produced” cannot refer to the reservation of an oil and gas interest then in place. That word indicates that something else must happen, that some future event must take place that brings about a “result” that is tangible. At that point something is “produced.” Davis v. Hardman, 133 S.E.2d 77 (W.Va. 1963).

We could find no case in which the term “found” was used when not in conjunction with the terms “in and under” or “lying (upon),” which, as previously explained, may connote either a mineral or royalty interest. In McNeese v. Renner, 197 Miss. 203, 21 So.2d 1, the synonym “discovered” was used in the phrase “all minerals, oil and gas that might hereafter be discovered.” The court held that such was a mineral interest; we note, however, that conditional terminology was used and such terminology is lacking in the case sub judice.

Even if the term “found” was mineral-tending terminology, the clear weight of the authority indicates that when a mineral-tending term(s) is inappo-site to royalty-ten ding term(s) a royalty interest exists. See Royalty Co. v. Arkansas-Oklahoma Gas Co., 222 Ark. 213, 258 S.W.2d 51 (1953); Atlantic Refining Co. v. Beach, 78 N.M. 633, 436 P.2d 107 (1968): Watkins v. Slaughter, 144 Tex. 179, 189 S.W.2d 699 (1945).

Another tool for interpreting the clause granting or reserving an oil or gas interest is whether an easement was granted or reserved to enforce the owner’s rights for oil and gas production. If so, then the intent is implied that a mineral right was reserved. See Mounger v. Pittman, supra. If an easement was not granted or reserved, then a royalty interest may have been the intent. McDonald v. Bennett, supra. This method is not conclusive, however, especially in Pennsylvania, where easements are implied at law for the owner of the oil and gas interest to extract the same. Oberly v. Frick Coke Co., 262 Pa. 83, 104 Atl. 864 (1918); and Schuster v. Pennsylvania Turnpike Commission, 395 Pa. 441, 149 A.2d 447 (1959). Therefore, the absence of a grant or reservation of an easement may not necessarily be determinative as a matter of law that a royalty interest was granted; however, its absence may be evidence as to whether the parties truly contemplated such a right of entry upon the land.

In construing the meaning without resort to case law, because the reservation in the deed uses “produced or found,” and not “may be produced and found,” the ordinary dictionary meaning would seem to imply that the interest in the oil and gas does not come into being until after production and not before; therefore, a royalty interest was granted.

Plaintiffs urge a different result. They urge this court to conclude that there was a mineral interest for practical reasons. They believe an oil and gas lessee would not grant more than one-eighth royalty interest. Since that is what has already taken place here the current owners of the land will receive no benefit. That would adversely affect the marketability and development of the oil and gas estate.

Plaintiffs urge us to consider the impact on development of oil and gas estate when construing the language of the oil deed. That is an interesting concept for which the plaintiffs cite no legal authority.

FINDINGS OF FACT

(1) That on the October 29, 1906 when E. Lovina Luce conveyed all of her right, title and interest in and to four acres of land in Troy Township, Crawford County, Pa., she intended to reserve unto herself, her heirs and assigns, a royalty interest amounting to one-eighth of all oil and gas produced or found on the land.

(2) That Lenore Ray and Wanda Walker, the current owners of the fee simple title to four acres of land in Troy Township, Crawford County, Pa., are the sole owners of the mineral interest in oil and gas subject to any leases they or their predecessors may have signed and subject to a one-eighth royalty interest in E. Lovina Luce, her heirs, successors and assigns.

CONCLUSIONS OF LAW

(1) That a reservation of one-eighth of all oil and gas produced or found on land created a royalty interest in oil and gas, that is an interest after production.

JUDGMENT

And now, September 12, 1990 the issues having been duly tried before the court sitting without a jury, and the court having made its findings of fact and conclusions of law, it is ordered and adjudged that the rights of the parties are as follows:

(1) Defendants are the owners of a one-eighth royalty interest in any oil and gas produced from four acres of land in Troy Township, Crawford County, Pa.

(2) That Lenore Ray and Wánda Walker are the owners of a mineral interest in all oil and gas in place and presently situated on four acres of land in Troy Township, Crawford County, Pa., subject, however, to the royalty interest of defendants and any interest in Mark Resources Corporation by virtue of any lease or leases heretofore entered into in its favor.


author: KAYE, J.,

text:
    Commonwealth v. Knepper

      James M. Schall, assistant district attorney, for the Commonwealth.

      Anthony T. McBeth, for defendant.
    March 1, 1990
   KAYE, J.,

This case is before the court on the defendant’s omnibus pretrial motion to suppress evidence and statement. Troy James Knepper is charged with possession of a controlled substance, cocaine. The criminal charge resulted from a search of his person by Pennsylvania State Police officers on October 12, 1989 and from a statement which defendant made to the police officers at the time of the search.

At his arraignment, defendant pled not guilty to the criminal charge. Defendant filed an omnibus pretrial motion seeking suppression of both the controlled substance found during the search and his statement to the police. A hearing on the motion was held on January 23, 1990, and the court ordered memoranda of law to be submitted by defendant and by the Commonwealth. We have received and reviewed both memoranda, and the matter is ready for disposition.

FACTS

On October 12, 1989, District Justice Brenda M. Knepper issued a search warrant after finding probable cause based on an affidavit of State Police Corporal John D. Zechman. In his affidavit, Corporal Zechman stated the following:

“(1) Within 48 hours of February 16, 1989, a controlled drug purchase of marijuana was made from Larry Lanehart at his residence.

“(2) Within 48 hours of October 10, 1989, a controlled drug purchase of cocaine was made from Larry Lanehart at his residence.

“(3) Four reliable informants have provided information that Larry Lanehart was dealing in drugs from his mobile home.

“(4) In his 20 years of experience as a narcotics investigator, Corporal Zechman has observed that persons who deal drugs out of their residences have numerous persons entering and exiting the residences for the purpose of purchasing drugs, and these persons will keep drugs on their persons.”

The search warrant which was issued authorized the search of “the person of Larry Robert Lanehart, the person of anyone in the residence or on the property ... to be searched.”

At approximately 2125 hours (9:25 p.m.) on October 12, 1989, State Police officers entered the mobile home of Larry Robert Lanehart to conduct a search pursuant to a search warrant issued by the district justice. Defendant was among the persons found to be inside the residence. Defendant was searched by Corporal Zechman and a small bag which was alleged to contain 0.15 grams of cocaine was found on defendant’s person. When asked by Corporal Zechman whether the cocaine was his, defendant allegedly replied that it was. Thereafter, defendant was arrested on a possession of cocaine charge.

DISCUSSION

Defendant challenges the validity of the search warrant, and therefore, the legality of the search which was conducted pursuant to the warrant. In particular, defendant challenges the validity of the “all persons present” search warrant in this case which allowed the police to search defendant.

When evaluating whether this is probable cause for the issuance of a search warrant, the magistrate must look at the totality of the circumstances in making the decision. The affidavit should be viewed and interpreted in a common-sense and realistic manner. Commonwealth v. Baker, 513 Pa. 23, 518 A.2d 802 (1986).

A magistrate must have the information sufficient to persuade a reasonable person that probable cause for a search does exist before a valid search warrant can be issued. When the magistrate is furnished with information which would cause a reasonable person to believe that a crime is being or about to be committed, a search warrant can be issued. Baker, supra.

Defendant maintains that the allegation that a controlled drug purchase took place on February 16, 1989 is too remote in time to supply the necessary probable cause. We agree with defendant that standing alone the single controlled buy which occurred eight months prior to the search does not supply the necessary probable cause for the issuance of the warrant. However, add to that, the fact that a controlled purchase was made within four days of the search, and that four reliable informants provided information that Larry Lanehart was dealing drugs from his residence, a reasonable person would be easily persuaded that a crime was being committed there. When we look at the totality of the circumstances, we find that the district justice was presented with sufficient information that a crime was being committed at the Lanehart residence.

Defendant further contends that the “person of anyone in the residence” provision or the “all persons present” provision of the search warrant was not proper under the facts of this case.

The United States Supreme Court has not considered the validity of an “all persons present” search warrant like the one issued in this case. However, the Pennsylvania Superior Court announced its adoption of a test “which analyzefs] each such warrant individually in order to determine whether an ‘all persons present’ warrant was justified under the particular circumstances present when the warrant issued.” Commonwealth v. Heidelberg, 369 Pa. Super. 398, 401, 535 A.2d 611, 612 (1987), aff’d sub nom. Commonwealth v. Gilliam, 522 Pa. 138, 560 A.2d 140 (1989). This test is commonly known as the “surrounding circumstances” test.

In Heidelberg, the affidavit of probable cause listed:

“ ‘(1) observation of a significant amount of cocaine available for sale at the residence within 24 hours of issuance of warrant;

“ ‘(2) observations by three informants of drug sales at the residence with no specific time reference;

‘(3) private residence to be searched; and

“ ‘(4) contraband which can be easily hidden on the body.’ ” Commonwealth v. Heidelberg, 369 Pa. Super. at 407, 535 A.2d at 615.

The Superior Court found that the search warrant was properly issued, and the search, conducted at 12:45 a.m., was legal.

A subsequent Superior Court case applied the “surrounding circumstances” test adopted in Heidelberg and upheld the issuance of a search warrant. In Commonwealth v. Graciani, 381 Pa. Super. 262, 554 A.2d 560 (1989), the warrant was issued on an affidavit which stated:

“ ‘(1) The informant had provided reliable information in the past including information which led to the lawful seizure of 33 packets of cocaine at the same residence 5 days earlier.

“ ‘(2) The informant observed cocaine sales at the same residence within the past 3 days of the affidavit.

“ (3) Cocaine which was sold was kept hidden in the house.

“ ‘(4) Buyers who purchased the cocaine at the house hid it on their person before leaving the house.’ ”

The search, which was conducted at 4:15 p.m., was found to be legal by the court. The court in Graciani, citing Heidelberg, supra, stated “though generally disfavored, an ‘all persons present’ warrant would be deemed constitutional when the totality of circumstances established a sufficient nexus between the persons to be searched, the location, and the criminal activity suspected.” Commonwealth v. Graciani, 381 Pa. Super. at 630, 554 A.2d at 561.

In the case at bar, the affidavit of probable cause states that a controlled purchase of cocaine took place within 48 hours of October 10, 1989, that a controlled purchase of marijuana occurred in February 1989, and that four other informants provided information that Larry Lanehart was dealing controlled substances from his residence.

As in Heidelberg and Graciani the alleged drug activity was taking place in a private residence which is where the search was conducted. The controlled substance could be easily concealed on a persons’ body. The warrant was issued on October 12, 1989 after a controlled drug purchase was made within 48 hours of October 10, 1989, which includes the dates of October 8 through October 12, 1989.

Defendant finds significant the fact that the quantity of drugs obtained in the controlled drug purchases which occurred between October 8, 1989 and October 12, 1989, was not stated in the affidavit of probable cause. In Heidelberg, the court found the fact that a large quantity of drugs was observed at the house supported the probability that illegal sales of drugs were taking place there. In the case at bar, the controlled drug purchase itself supports the contention that illegal drug sales were taking place in the Lanehart residence. A statement as to the quantity of drugs present is not so important as it was in Heidelberg where there was no controlled drug purchase.

A showing that an illegal activity is occurring at a particular location does not, of itself, justify the issuance of an “all persons present” search warrant. For example, the fact that a waiter is dealing narcotics in a restaurant does not justify a search of all the patrons in the restaurant because there would be no probable cause that everyone present was involved in the illegal activity. However, where the place of the illegal activity is limited in its access to people, such as a private residence, it is much more likely that those present are participants in the illegal activity. This type of setting makes it reasonable to believe that anyone present is a probable participant.

Based on the affidavit of probable cause in the case at bar that there were illegal drug sales occurring in the Lanehart residence, it is probable that anyone entering was doing so to purchase drugs. We believe that the nexus between the persons to be searched, the location where the activity was taking place, and the criminal activity suspected, was sufficient for the issuance of an “all persons present” search warrant in this case.

ORDER OF COURT

Now, March 1, 1990, after hearing and upon consideration of the memoranda submitted by the Commonwealth and by defendant, defendant’s omnibus pretrial motion in the nature of a motion to suppress evidence is denied.

This order, the opinion attached hereto, and the omnibus pretrial motion shall be impounded by the Clerk of Courts until the happening of the first of either of the following: (1) imposition of judgment of sentence following a plea of guilty or nolo conten-dere; or (2) entry of a verdict on the above charge.


author: BIESTER, Jr., J.,

text:
    Commonwealth v. Sack

      Colin Jenei, assistant district attorney, for the Commonwealth.

      Andrew J. Merlie, for defendant.
    October 3, 1990
   BIESTER, Jr., J.,

This is a homicide by vehicle case in which defendant was found guilty of homicide by vehicle, driving under the influence, homicide by vehicle unsafe speed, homicide by vehicle reckless driving, recklessly endangering William Myers, recklessly endangering Cornelia Brakastor, involuntary manslaughter, and driving under the influence over 0.10 percent alcohol content, and not guilty of driving under the influence incapable of safe driving.

Defendant has filed timely post-verdict motions and we have held argument with respect to those motions and now file this opinion and order with respect to them.

Defendant has raised the following issues in the case.

(1) Whether the Commonwealth presented evidence sufficient to establish beyond a reasonable doubt that defendant was in violation of 75 Pa.C.S. §3731(a) at the time of the accident giving rise to the charge of homicide by vehicle.

(2) Whether the jury’s verdict of not guilty on the charge of driving under influence, 75 Pa.C.S. §3731(d), precluded a finding of guilt on the charge of homicide by vehicle DUI, 75 Pa.C.S. §3735.

(3) Whether the Commonwealth presented evidence sufficient to establish beyond a reasonable doubt that defendant violated any law on July 31, 1989.

Taking the evidence in the case in a light most favorable to the Commonwealth, the verdict winner, the evidence was as follows:

At approximately 1:30 a.m. on July 31, 1989 a vehicle driven by William Myers in which Cornelia Brakastor was a passenger in the front passenger seat was stopped at a stop light at the intersection of Route 611 and Edison-Furlong Road. It was headed north on Route 611 and was stopped waiting to make a right-hand turn at the intersection. Mr. Myers, the driver of that vehicle, had less than 0.01 percent blood alcohol and there was testimony from an expert witness that that level of alcohol concentration would have no effect on driving.

One Julie Orce testified that immediately prior to the accident she was also driving northbound on Route 611 approximately two miles south of the intersection in which the accident took place. She testified that while she was driving at a lawful rate of speed a vehicle suddenly appeared directly behind her. Route 611 at that point and also at the point of impact is a four-lane highway divided by a center area which is ribbed concrete designed to create certain sounds as one passes over it. She testified that this vehicle’s headlights came directly behind her and she was even concerned that the vehicle might strike her. Suddenly that vehicle veered out to pass her and did so in such an abrupt fashion and with so wide a swing that she thought that it was going to cross over the center line into the oncoming two lanes. It did in fact make contact with the center line and then came back into the regular lane of traffic and proceeded forward. She estimated its speed as it went around her and then took off away from her in excess of 100 miles an hour. She observed the car to the crest of a hill just before the accident area and the car then disappeared from her view. She proceeded on at the lawful rate of speed and arrived at the accident scene immediately after it occurred and noted that one of the vehicles involved in the accident was the car which had passed her a few moments before.

An accident reconstructionist testified that defendant’s vehicle, which was the vehicle Ms. Orce had seen, had driven straight into the rear of the victim’s car and that its speed at the time of impact was 83 miles per hour. Ms. Brakastor was killed immediately and Mr. Myers was so seriously injured that he remains with some considerable brain damage at the time of trial.

Two blood alcohol tests were taken at Doy-lestown Hospital. The first blood was drawn at 2:56 a.m. and the second was drawn at 3:55 a.m. The results of the first test showed 0.227 milligrams of alcohol per deciliter of serum blood and the second was 0.22 percent grams per deciliter weight per volume of serum blood. Defendant was taken to the Doylestown Hospital immediately after the accident. Nurse Benningfield of that hospital testified that Mr. Sack was under the influence of alcohol to the extent that rendered him incapable of safe driving and that he did not appear or admit to have any type of head injury and that she was certain that his appearance and condition were the result of alcohol consumption and not the result of any traumatic injuries suffered in the automobile accident itself. The officers who observed defendant at the scene testified that Mr. Sack was under the influence of alcohol to such an extent that he was incapable of safe driving and explained the reasons for their opinions with respect to that. The evidence in the case also indicated that defendant had been going from one bar to another bar at the time of the accident. The Commonwealth called an expert in the effect of alcohol upon the human body, a Mr. Dunn, and he described the effect of alcohol on the human system including its effect upon one’s judgment and upon one’s motor skills.

. The evidence of defendant’s driving at the time of the accident and the taking of blood within three hours after the accident in two instances, one within 90 minutes after the accident, permitted the jury to find that he was driving with a blood alcohol content of above 0.10 percent. Commonwealth v. Arizini, 277 Pa. Super. 27, 419 A.2d 643 (1980); Commonwealth v. Johnson, 376 Pa. Super. 121, 545 A.2d 349 (1988). Although the defense expert opined that defendant’s blood alcohol level was 0.08 percent at the time of the accident, he conceded that was based upon certain assumptions including the defendant’s testimony with respect to the extent of his drinking and eating. It was for the jury to consider whether in light of the conduct of defendant and those who observed him immediately after the accident, as well as the opinion of the Commonwealth expert that defendant’s testimony about his eating and drinking were inconsistent with the blood alcohol history, gave the jury sufficient evidence from which to find defendant guilty of driving under the influence with a blood alcohol content above 0.10 percent. Certainly it has sufficient evidence to make that finding beyond a reasonable doubt.

Since the first issue to a certain extent invites sequential consideration of the third issue, we now point out that as one considers the evidence in the case in a light most favorable to the Commonwealth, there was sufficient evidence from which the jury could find defendant guilty of all the offenses as to which defendant was found guilty.

Defendant contends that the jury’s finding him not guilty of driving under the influence as incapable of safe driving, precludes his conviction for homicide by vehicle driving under the influence related.

Neither side has presented us with any case authority either way with respect to this issue. The homicide by vehicle driving under the influence section of the Motor Vehicle Code, 75 Pa.C.S. §3735, provides as follows:

“Any person who unintentionally causes the death of another person as the direct result of the violation of section 3731 (relating to driving under the influence of alcohol or controlled substance) and was convicted of violating section 3731 is guilty of a felony of the third degree when the violation is the cause of death. . .”

To begin with, section 3735 as it refers back to section 3731 does not isolate out any particular subsection of 3731 and treats the section in blanket terms. Under those circumstances therefore the only issue which is really addressed by defendant’s contention is whether a jury could find that a person who was guilty of driving under the influence, 0.10 percent blood alcohol content could be guilty of causing death when the same jury has found him not guilty of driving under the influence incapable of safe driving.

This is not a case in which the jury had to guess about the cause of the accident. In this case it was perfectly clear what the conduct of the defendant was at the time of the accident. Quite obviously this jury could find the defendant’s unlawful and highly dangerous manner of driving caused the death of Ms. Brakastor.

Further, in this case the Commonwealth’s expert witness testified as to how a person with a blood alcohol level of over 0.10 percent would be adversely affected. Mr. Dunn testified that such a person’s visual acuity, his reaction time, his perception, his ability to focus his eyes, his judgment and his degree of inhibition were all affected at a 0.10 percent or greater blood alcohol concentration. The Commonwealth argues, and we agree, that the jury had in the combination of evidence, including the testimony of the Commonwealth’s expert, sufficient evidence to determine the effect of defendant’s high blood alcohol level and to apply that effect to the manner of defendant’s driving and to find that he drove in the manner he drove because of the effect of the high blood alcohol level. The issue that the jury focused on therefore with respect to this aspect of causation was not the abstract issue of whether he was capable of driving safely, but whether in fact, he drove safely. The jury found that he did not drive safely and could reasonably find that the reason he did not drive safely was because of the impact of alcohol by weight in his blood on his judgment and perception and reaction time. The jury could therefore readily determine that that failure of judgment and other impacts of the high degree of blood alcohol was the direct cause of the accident and therefore the death of Ms. Brakastor.

For all of the above reasons the several post-verdict motions of defendant are denied and overruled and we enter the following

ORDER

And now, October 7, 1990, upon consideration of defendant’s post-verdict motions, briefs and argument thereon, we find that the post-verdict motions are denied and overruled and defendant is directed to appear before the undersigned for the imposition of sentence on October 29,1990, in Courtroom no. 3 at 9:00 a.m., at the Bucks County Courthouse, Doylestown, Pa.


author: KATZ, J.,

text:
    Burton v. Terry

      Richard P. Haaz, for plaintiff.

      Daren B. Waite, for defendant City of Philadelphia.
    October 12, 1990
   KATZ, J.,

This opinion is in support of our order of the September 17, 1990, granting the motion of defendant, City of Philadelphia, for judgment notwithstanding the verdict.

On October 10, 1983, plaintiff, Charles Burton Jr., was injured in an automobile accident that occurred at a five-point intersection. Defendant, Randolph Terry, was driving a vehicle owned by Michelle Prichette, in the wrong direction on 67th Street, a one-way street in Philadelphia, Pennsylvania. Defendant’s vehicle collided with the plaintiff’s automobile, which was travelling north on Limekiln Pike. At the intersection with Limekiln, westbound 67th Street had no signs indicating that 67th Street was one-way in an eastbound direction, and no signs warning the traffic which was proceeding in a wrong direction on 67th Street not to enter the intersection. There were, however, one-way signs posted on 67th Street a block east from the intersection with Limekiln.

Plaintiff’s claim against defendant City of Philadelphia was that the design and maintenance of the streets and traffic controls at the intersection created a dangerous condition. At the trial plaintiff’s expert witness, John Bickel, testified that the intersection’s design created a dangerous condition because of the angle of the streets at the intersection, and the poor placement of the traffic controls. (N.T. 253-9.) At the time of the verdict the jury returned a verdict for plaintiff which found that the design and maintenance of the intersection created a dangerous condition, but that the design and maintenance of the traffic controls did not constitute a dangerous condition. (N.T. 469.)

At the trial, the city argues that Mascaro v. Youth Study Center, 514 Pa. 351, 523 A.2d 1118 (1987) (discussed more fully below), dictated that the court grant a motion for nonsuit, because the city was immune from liability. (N.T. 336-37.) The motion was denied because of other appellate cases that created an exception to immunity in response to dangerous street conditions. (N.T. 356.) See, e.g., Dorsh v. Butler School District, 105 Pa. Commw. 519, 525 A.2d 17 (1987); Wyke v. Ward, 81 Pa. Commw. 392, 474 A.2d 375 (1984).

On the day the jury was given their charges, the city brought to the attention of the court Crowell v. City of Philadelphia, 131 Pa. Commw. 418, 570 A.2d 626 (1990). (N.T. 478.) The court withheld its determination regarding Crowell until after trial. When the jury returned a verdict for the plaintiff, the city filed motions for judgment not withstanding the verdict, or, alternatively, a new trial.

The city basically states four arguments in its motions for a judgment n.o.v., or, alternatively, a new trial. The first is that Crowell mandates a judgment n.o.v. because the city is immune in joint tort-feasor cases like this one. Second, the city had no duty to protect traffic from dangerous conditions created when drivers proceed the wrong way on a one-way street. Third, plaintiff’s expert’s testimony about the condition at the intersection was improper without an explanation of the standard within the industry. Fourth, the city is not liable because it did not have sufficient notice to remedy the dangerous condition.

I

Judgment Notwithstanding the Verdict

A judgment notwithstanding the verdict should be entered when no two reasonable persons could disagree that the verdict was improper. McLoskey v. New York Life Ins. Co., 292 Pa. Super. 1, 436 A.2d 690 (1981). Furthermore, if the applicable law would not permit recovery upon the facts which had been alleged, and the jury has found, then a judgment n.o.v. is proper. Community College of Beaver County v. Community College of Beaver County, Society of the Faculty (PSEA/NEA), 473 Pa. 576, 375 A.2d 1267 (1977); Kobylinski v. Hipps, 359 Pa. Super. 549, 519 A.2d 488 (1986). In the case at hand, this court will grant a judgment n.o.v. in favor of the city, because of the Pennsylvania Commonwealth Court’s decision in Crowell, supra.

II

The Effect of Crowell

Crowell, supra, is a case which explains the limits of immunity provided to the city in the Political Subdivision Tort Claims Act, 42 Pa.C.S. §§8541, 8542. Section 8541 sets out the basic blanket immunity afforded to local agencies. Section 8542 states the exceptions for which a local agency will remain liable for its acts or the acts of its employees. Section 8542 imposes a three-step process to determine whether a local agency should lose its immunity in a certain situation. The first two conditions require that a cause of action for an injury would have arisen against a party without the immunity defense, and that the injury be caused by negligent acts of the local agency or its employees acting within the scope of their employment. 42 Pa.C.S. §8542(a)(l) and (2). The third condition is that the negligent conduct of the local agency or employee fall within, at least, one of eight enumerated categories. 42 Pa.C.S. §8542(b)(l) to (8).

In the case at hand, plaintiff contended that the two exceptions which applied to this case were the ones applicable to traffic controls and streets. 42 Pa.C.S. §8542(b)(4) and (6). The city contended at trial that Mascaro, supra, precluded liability even if the city’s actions fell within the immunity exceptions. The city maintained that the immunity exceptions do not apply if the city’s negligence has merely facilitated the actions of a third party. Furthermore, as previously noted, the city also contended that Crowell, supra, more specifically applied to the case at bar.

In Mascaro, a detainee in Philadelphia’s Youth Study Center escaped and burglarized the home of the Mascaro family, and brutally raped and beat the women of that family. Mascaro, supra. The Ma-scaros sued the city and the juvenile center for negligently maintaining the real estate and physical plant of the center, which permitted the escape. Id. Thus, the plaintiffs contended that they maintained a cause of action that fit an exception to the city’s immunity. The Pennsylvania Supreme Court held that the defect on the real estate must itself cause the injury, and not merely facilitate the injury through the acts of a third party. Id. The Supreme Court concluded that harm caused by third parties cannot be imputed to the local agency. Id.

Mascaro turned on the real estate exception to immunity, and the way the city’s negligence facilitated a third party’s criminal conduct; however, Mascaro does not limit itself by express language to apply only to cases in which the city’s negligence facilitates third-party criminal conduct.

In a subsequent case, Herman v. Greene County Fair Board, 112 Pa. Commw. 615, 535 A.2d 1251 (1988), the court stated that the analysis in Mascaro applies to all eight exceptions of immunity under 42 Pa.C.S. §8542. The importance of the decision in Herman can be seen when one considers that Ma-scare> addressed the real estate exception, Herman dealt with the animal exception and Crowell, as well as the case at bar, analyzed the traffic control and streets exceptions.

The Commonwealth Court of Pennsylvania, in Crowell, stated that the court’s application of Ma-scaro ’s standard to the facts of Crowell is a logical extension. Crowell, supra. The accident occurred in Crowell at a turn in the road. Id. At the approach to the turn there was a traffic directional sign warning drivers that the road turned left. Id. The road actually turned right. Id. The Crowell’s vehicle was struck when the automobile driven by the defendant, Lewis, turned left and crossed the median. Id. Defendant Lewis was intoxicated at the time of the accident, and, therefore, engaged in criminal conduct, but the court apparently did not consider that a relevant fact. See Id. Besides suing Lewis, the Crowells also sued the City of Philadelphia claiming that the city’s negligent placement of the traffic signal was a substantial factor in causing the accident. Id.

The Commonwealth Court in Crowell stated that immunity exception section 8542(b)(4) required that “the traffic directional sign itself caused the Cro-wells’ injuries.” Id. at 630. (emphasis in original) The court explained that when a dangerous condition created by the traffic signal merely facilitated the accident and subsequent injuries, it was not enough to remove immunity from the city when the negligent conduct of another defendant was also involved. Id. The Crowell court continues by explaining that its decision effectively eradicates joint tort-feasor liability against a local agency. Id.

Under the facts of the case at hand, the jury found that the city was 30-percent liable for Burton’s injuries due to the dangerous condition existing at the intersection because of the negligent design and maintenance of the streets at the intersection. A jury had also determined the city’s liability in Crowell. Crowell, supra. The Commonwealth Court in Crowell, however, determined that a jury’s finding of a percentage of liability is irrelevant when the case could have been dismissed before reaching the jury. Thus, in the case at hand, a judgment n.o.v. would be proper, regardless of the city’s percentile of liability.

Plaintiff contends in his post-trial brief that Cro-well should not apply because it was incorrectly decided. Regardless of the wisdom of the decision, Crowell’s holding still requires this court to find that the city is immune from liability.

Ill

Other Issues for Post-Trial Relief

Defendant city also requested post-trial relief because: (1) the city had no duty to protect traffic from dangerous conditions created when drivers proceed the wrong way on a one way street, (2) plaintiff’s expert testimony was improper without an explanation of the standard within the industry, and, (3) the city did not have reasonable notice to remedy the dangerous condition. Our grant of a judgment n.o.v. in favor of defendant was based on the decision in Crowell, supra; however, we will briefly address the other issues presented in post-trial motions.

City’s Duty to Protect Motorists

The contention is basically correct that the city had no duty to design the intersection at Limekiln Avenue and 67th Street to permit traffic on Limekiln to see traffic from 67th entering from the wrong direction into the intersection. The city’s duty is to make the city streets reasonably safe for normal use. See, e.g., Merritt v. City of Chester, 344 Pa. Super. 505, 496 A.2d 1220 (1985); Wyke v. Ward, 81 Pa. Commw. 392, 474 A.2d 375 (1984).

The reasonableness of the city’s duty to keep streets safe for normal use is explained in Wyke v. Ward, supra. The court in Wyke states that determining whether a duty existed at all is a question of law, but that the injection of reasonableness into the definition of that duty requires that the jury decide whether the streets in question were reasonably safe. 81 Pa. Commw. at 404, 474 A.2d at 381.

The Wyke court also explained that custom and usage did not define the standard for negligence, and, therefore, even if the design and construction of the street was not done negligently when originally installed, later developments may make the government entity liable for negligence if it fails to protect individuals from foreseeable harm. Id. Furthermore, the government entity would be negligent whether or not the original road design and construction were at the city’s discretion. 81 Pa. Commw. at 405, 474 A.2d at 381.

Wyke also explains that the foreseeability of an accident is a jury question. 81. Pa. Commw. at 405, 474 A.2d at 381-2. Thus even if an accident was caused by a negligent third party, the city may have breached its duty to provide reasonably safe streets if the jury determines that the occurrence was foreseeable.

Admissibility of Expert Testimony

The city contends that plaintiff’s expert testimony regarding the design defect of the street was incorrectly permitted to go to the jury. The basis for the city’s contention is that the expert failed to explain the industry standard for highway design, when he explained that his opinion was within a reasonable degree of engineering certainty.

The city contends that if established industry standards were followed, then there would be no basis for finding that the intersection was dangerous. The city also contends that the failure to state the industry standard prevents the expert from giving his opinion.

The use in negligence cases of the “custom and practice” standard is discussed in Dallas v. F.M. Oxford Inc., 381 Pa. Super. 89, 552 A.2d 1109 (1989). The Dallas court quoting from Neville Chemical Co. v. Union Carbide Corp., 422 F.2d 1205 (3d Cir. 1970) comments that:

“Evidence of the customary practice within the industry although admissible is not essential to a finding of negligence. Indeed . . . evidence of what is usually done is not necessarily what ought to be done, and is, therefore, not necessary to prove negligence.” Dallas, supra, (citations omitted)

In the case at hand, plaintiff’s expert provided testimony of why he believed the intersection created a dangerous condition from the facts that were in evidence. (N.T. 250-60.) See, e.g., Collins v. Hand, 431 Pa. 378, 1246 A.2d 398 (1968) (leading case requiring expert base testimony on facts in record); Commonwealth v. Haddle, 271 Pa. Super. 418, 413 A.2d 735 (1979) (expert testimony based on admitted facts and reports). Plaintiff’s expert testified about what could be done to improve the situation, and that his opinion was within a reasonable degree of engineering certainty. As the above discussion notes, an industry standard is admissible in negligence cases, but not mandatory. In the case at hand, the plaintiff’s expert gave his opinion based on facts in the record; nothing else is required to admit his testimony into evidence. See, e.g., Haddle, supra. See also, Packel & Poulin, Pennsylvania Evidence §§702-3 (1987).

Sufficiency of Notice

Defendant city contends that Fenton v. City of Philadelphia, 127 Pa. Commw. 466, 561 A.2d 1334 (1987), is controlling. In Fenton, the plaintiff claimed that lack of a left-hand turn lane caused his accident. The plaintiff in Fenton attempted to prove that the city had reasonable notice to correct the dangerous condition. The plaintiff offered evidence of dangerous conditions such as heavy truck traffic, as proof of notice for the specific dangerous condition in question — no left-hand turn lane. Fenton, supra. The court in Fenton did not permit the evidence, because it was not similar to a dangerous condition created by the lack of a turning lane. Id.

Wyke v. Ward, supra, is more appropriate to the case at hand. In Wyke, the Commonwealth Court would permit evidence of other similar accidents to show that the Pennsylvania Department of Transportation had notice of the dangerous condition at that accident site. 81 Pa. Commw. at 406, 474 A.2d at 382. The court would give the plaintiff in Wyke the opportunity to illustrate the alleged similarities of the accidents. Id.

In the case at hand, plaintiff Burton provided testimony of witnesses who live adjacent or near the intersection of Limekiln and 67th. They testified that they witnessed and reported accidents which involved automobiles entering the intersection with Limekiln from the wrong direction on 67th. (N.T. 79-81, 88-92, 137-43.) The evidence proffered by the plaintiff illustrates other accidents which involved collisions between automobiles proceeding north on Limekiln and automobiles entering the intersection from the wrong direction on 67th street. Fenton, supra, is therefore distinguishable, because plaintiff’s evidence in Fenton was of a dangerous condition due to heavy truck traffic, and not due to a lack of a turning lane, and the evidence offered in the present case all referred to accidents involving vehicles proceeding the wrong way on 67th Street.

Furthermore, pursuant to the language of 42 Pa.C.S. §8542(b)(6) which states that a claimant “must establish that a dangerous condition created a reasonably foreseeable risk of the kind of injury which occurred and the local agency had actual notice or could reasonably be charged with notice under the circumstances,” the question of whether the city had notice is one for the fact finder. See, e.g., Medicus v. Upper Merion Township, 82 Pa. Commw. 303, 475 A.2d 918 (1984). In the case at hand the jury decided that the city had reasonable notice.

>

Conclusion

In response to the above discussion and the Pennsylvania Commonwealth Court’s decision in Crowell, supra, we granted defendant City of Philadelphia’s motion for judgment n.o.v. and denied its motion for a new trial by our order of September 17, 1990. We also denied plaintiffs motion for delay damages as moot on September 17, 1990, because we granted a judgment n.o.v. for defendant.

      . Defendant Terry was unable to be located for trial, and was unrepresented at trial.

      . The claim against Michelle Prichette was nonsuited.

      . The Mascaro court explained that acts of a third party are expressly excluded in the general immunity section. Ma-scaro, supra.

      . Herman, supra, actually interpreted the Political Subdivision Tort Claims Act, Act of November 26, 1978, P.L. 1399, as amended, 53 P.S. §§5311.101 to .803, which was repealed. Act of October 5, 1980, P.L. 693, as amended, 42 Pa.C.S. §§8541-6, however, substantially re-enacted the same language. See Herman, supra, at 617 n.l, 535 A.2d at 1252 n.l.

      5. The jury also determined that defendant Teriy was 70-percent negligent, and that the city had not negligently maintained or designed the traffic controls.


author: KOPRIVA, J.,

text:
    Bernard Ellsworth and Associates Inc. v. Empire Radio Partners Ltd.

      David M. Halpem, for plaintiffs.

      Karen L. Steele, for defendant.
    March 26, 1990
   KOPRIVA, J.,

Plaintiffs commenced this action by filing a complaint on August 14, 1989. The complaint sets forth 10 counts in which plaintiffs allege that individual defendant, Robert J. Puffer, defamed them and tortiously placed them in a false light by making the following statement during his morning radio show on January 16, 1989: “I may be setting myself up for a lawsuit. Ellsworth’s is closed, filing for bankruptcy and it is just as well, their service is slow, their food is cold and desserts are $4.50.”

Defendants filed preliminary objections on September 21, 1989. Plaintiffs then filed an amended complaint pursuant to Pa.R.C.P. 1028(c) which corrected the errors in the original complaint that defendants had objected to in counts VI, VII, IX and X of their preliminary objections. Therefore, the issues now before this court are contained within counts I through V and count VII of defendants’ preliminary objections. The issues raised are as follows:

(I) Does an officer of a corporation have a right to recover damages for an alleged defamation published of the corporation?

(II) Can an officer of a corporation maintain a cause of action under a theory of invasion of privacy for being placed in a false light where the allegedly tortious statements refer specifically to the corporation?

(III) Are the individual plaintiffs, Bernard E. Kitt Jr. and Mary J.C. Kitt, entitled to recover punitive damages?

(IV) Should that portion of paragraph 40 of plaintiffs’ complaint be stricken as being scandalous or impertinent matter under Pa.R.C.P. 1017(b)(2)?

DEMURRER

Does an Officer of a Corporation Have a Right to Recover Damages for an Alleged Defamation Published of the Corporation?

Defendants are asking that counts II and III of plaintiffs’ complaint be dismissed. In ruling on the demurrer, we accept as true all well-pled material facts in the complaint as well as all inferences reasonably deducible therefrom. Vitteck v. Washington Broadcasting Co. Inc., 256 Pa. Super. 427, 389 A.2d 1197 (1978). A complaint alleging defamation should not be dismissed upon a preliminary objection in the nature of a demurrer unless the court is certain that the communication is incapable of bearing a defamatory meaning. Gordon v. Lancaster Osteopathic Hospital Association, 340 Pa. Super. 253, 489 A.2d 1364 (1985). A statement is defamatory if it tends to harm an individual’s reputation so as to lower him in the estimation of the community or deter third persons from associating or dealing with him. Zartman v. Lehigh County Humane Society, 333 Pa. Super. 245, 482 A.2d 266 (1984).

Defendants contend that as a matter of law, a corporate officer has no cause of action for defamation when the allegedly defamatory statement names only the corporation. In support of their position, defendants cite Volomino v. Messenger Publishing Company, 410 Pa. 611, 189 A.2d 873 (1963).

Volomino does not hold that a corporate officer is incapable of being defamed by words criticizing the corporation. It merely states, by way of a footnote, that “words criticizing a corporation without more, are not defamatory of a person connected with it.” Volomino, supra, (emphasis supplied)

The critical phrase “without more” is explained in the early Superior Court case of Binder v. Daily News Publishing Company, 33 Pa. Super. 411 (1907), where the court states at page 425 as follows:

“Sometimes an attack upon a thing may be defamatory of the owner of that thing, or of others immediately connected with it. But this is only where an attack upon the thing is also an indirect attack upon the individual. If the words do not touch the personal character or professional conduct of the individual, they are not defamatory of him, and no action lies unless the words fall within the rules relating to slander of title.”

Therefore, even though an allegation refers only to a corporate entity, if the allegation reflects negatively on the character or conduct of an individual closely connected with the corporation, such individual has a cause of action for defamation. Although Pennsylvania case law is somewhat sparse, we find the law to be clear that there can be circumstances that justify permitting a corporate officer to maintain a defamation action even though the allegedly defamatory words were directed at the corporation. We have reviewed the cases from other jurisdictions cited by defendants, and are not persuaded that they contradict what we perceive to be the law of this state at this time, without comment as to the wisdom or reasonableness of such legal thinking.

Therefore, when we accept as true the facts pled in counts I and II of plaintiffs’ complaint we find that the statements made by defendant Puffer concerning Ellsworth’s are capable of a defamatory meaning regarding the individual plaintiffs, Bernard E. and Mary J.C. Kitt. Plaintiffs have a heavy burden of proof in a defamation action as set forth in 42 Pa.C.S. §8343. It may come before a jury to decide whether the statements made by Mr. Puffer were so understood by WFBG’s listening audience to refer to Mr. and Mrs. Kitt. At this procedural stage, any doubt that the law will not permit recovery must be resolved against the demurrer, so we will allow the individual plaintiffs to proceed with this action. To rule otherwise would be premature, depriving plaintiffs of their opportunity to create a factual scenario which could sustain their heavy burden of proof.

DEMURRER

Can an Officer of a Corporation Maintain a Cause of Action Under a Theory of Invasion of Privacy for Being Placed in a Light Where the Allegedly Tortious Statements Refer Specifically to the Corporation?

Defendants are hereby requesting that counts VII and VIII of plaintiffs’ complaint be dismissed. Defendants claim that the individual plaintiffs have no cause of action since the publicity referred only to the corporation. Basically, defendants are advancing the same reasoning argued in the preceding issue.

Restatement (Second) of Torts §652E defines false-light invasion of privacy as follows:

“One who gives publicity to a matter concerning another that places the other before the public in a false light is subject to liability to the other for invasion of his privacy, if

“(a) the false light in which the other was placed would be highly offensive to a reasonable person, and

“(b) the actor had knowledge of or acted in reckless disregard as to the falsity of the publicized matter and the false light in which the other would be placed.”

Unlike actions for defamation, it is not the tendency to lower the person in the esteem of others, but the tendency to be highly offensive, that forms the gravamen of the false-light tort. Southern Air Transport v. American Broadcast Company, 670 F.Supp. 38, 42 (1987). The question of whether the message would be highly offensive to a reasonable person is a matter for a jury. Martin v. Municipal Publications, 510 F.Supp. 255, 259 (E.D. Pa. 1981).

With regard to the question of whether Mr. and Mrs. Kitt may maintain an action for false-light invasion of privacy, there is little authority. In order to be consistent in our ruling on this matter, we find the reasoning set forth in deciding whether the individual plaintiffs may proceed with a defamation action to be equally applicable. We have ruled there are situations in which individuals closely connected with a corporation may maintain a cause of action for defamation even though the allegations refer only to the corporate entity. Likewise we conclude that there are circumstances where individuals may be put in a false light by publicity concerning the corporation to which they are closely connected.

In accepting as true plaintiffs’ allegations that Mr. and Mrs. Kitt are the sole owners of Ellsworth’s and are generally known in the community as such, we find that the statements made by Mr. Puffer may be capable of placing the individual plaintiffs before the public in a false light. At this procedural stage, we find it appropriate to allow the individual plaintiffs to proceed to attempt to develop factually their cause of action for false-light invasion of privacy.

DEMURRER

Are the Individual Plaintiffs, Bernard E. Kitt Jr. and Mary J. C. Kitt, Entitled to Recover Punitive Damages?

Defendants are hereby requesting that counts V and VI of plaintiffs’ complaint be stricken. Punitive damages are recoverable in a defamation action where plaintiff shows actual malice on the part of the defendant. Walder v. Lobel, 339 Pa. Super. 203, 488 A.2d 622 (1985). Inasmuch as we have concluded that the individual plaintiffs have set forth facts sufficient to maintain a cause of action in defamation, we will allow them, at this time, to proceed with their claim for punitive damages as well.

MOTION TO STRIKE

Should that Portion of Paragraph 40 of Plaintiffs’ Complaint be Stricken as Being Scandalous or Impertinent Matter Under Pa.R.C.P. 1017(b)(2)?

The disputed paragraph states as follows:

“Prior to January 16, 1989, WFBG, under previous ownership but with the same general manager, had fired the defendant Puffer, for drug usage and by virtue of reckless and untrue statements made on the air.”

Defendants contend that the reference to Mr. Puffer’s drug usage is irrelevant to the defamation action and should therefore be stricken. We agree. The alleged drug usage has no bearing on the defamation action or on the invasion of privacy claim. Plaintiffs argue that the drug usage is essential to their claim for punitive damages as it tends to prove that the allegedly defamatory statements were made with reckless disregard for the truth. We fail to see that the averment of past drug usage is essential to.the punitive-damage claim since plaintiffs may still allege that Mr. Puffer was fired for prior “reckless and untrue statements made on the air.” Any reference to Mr. Puffer’s past drug usage would be highly prejudicial and is irrelevant to the material issues of the lawsuit.

Based on our consideration of defendants’ preliminary objections we will now enter the following

ORDER

Now, March 26, 1990, it is hereby ordered, directed and decreed that:

(1) Defendants’ demurrer to counts II and III of plaintiffs’ complaint is hereby denied.

(2) Defendants’ demurrer to counts VII and VIII of plaintiffs’ complaint is hereby denied.

(3) Defendants’ demurrer to counts V and VI of plaintiffs’ complaint is hereby denied.

(4) Defendants’ motion to strike that portion of paragraph 40 of plaintiffs’ complaint that refers to defendant Puffer’s dismissal for drug usage is granted.