author: GLAZER, J.,

text:
    SPH Associates LLC v. Zoning Board of Adjustment of the City of Philadelphia

      Joseph Belles for appellant.

      Cheryl L. Gaston and Stanley R. Krakower, for appellees.
    October 13, 2006
   GLAZER, J.,

FACTUAL AND PROCEDURAL HISTORY

This appeal arises from an order issued by the Zoning Board of Adjustment in calendar no. 05-0873, which refused the request for a certificate for the property located at 446-50 North 6th Street in Philadelphia.

On May 23, 2005, Ronald J. Patterson, the agent for SPH Associates LLC (appellant), filed an application for a Zoning and/or Use Registration Permit with the Department of Licenses and Inspections (L&I) to modify and/ or expand the existing use of the subject property as a restaurant and night club with live entertainment and dancing for use as an adult cabaret, as defined by section 14-1605 of the Philadelphia Code. (Findings of fact, ¶1.) On June 3,2005, appellant’s application was referred to the board, pursuant to section 14-1605(e) of the code, on the basis that the use of the subject property, as an adult cabaret, requires a certificate from the board. (Findings of fact, ¶2.) On June 9, 2005, appellant filed a petition of appeal of the referral to the board, arguing that: (1) literal enforcement of the Zoning Code would impose an unnecessary hardship upon the property; and (2) the proposed adult cabaret will cause no adverse impact upon the public health, safety and welfare, or traffic in the area. (Findings of fact, ¶3.) Appellant also requested variance relief and necessary use certificates and special use permits. (Findings of fact, ¶3.)

Public hearings were held before a quorum of board members on March 15, 2006, April 5, 2006 and April 28, 2006. Protestants included the Olde City Civic Association, Northern Liberties Neighborhood Association, Franklin Bridge North Civic Association, State Senator Vincent Fumo, State Representative Marie Lederer, Councilman Frank DiCicco, the Seaman’s Church Institute, and a number of other neighboring businesses and residents who submitted letters of opposition.

The hearing on March 15,2006 resulted in a continuance, with the board members suggesting that appellant meet with concerned civic associations. (Findings of fact, ¶¶5-9.)

The hearing resumed on April 5, 2006, during which the board heard testimony regarding appellant’s application for the certificate. (Findings of fact, ¶¶10, 12.) The board heard and considered testimony from several people, including Luke Lirot, Esquire, a member of the Florida Bar who was admitted pro hac vice to aid counsel for appellant. (Findings of fact, ¶13.) Mr. Lirot offered copies of the city zoning maps showing that the subject property is in the L-4 Industrial District and testified that appellant was seeking a certificate for a gentlemen’s club. (Findings of fact, ¶13.) In addition, Mr. Lirot stated that the club is part of Scores, a national operation of men’s clubs. (Findings of fact, ¶13.) Joseph Beller, Esquire, counsel for appellant, stated that the club would hire between 100 and 150 people, part-time and full-time; that the license of the bar would be in the name of the former business at the property, Bash, and Scores would be a licensee. (Findings of fact, ¶13; N.T. 4/05/06, pp. 14-21.) Other testimony was offered regarding the issues of security, traffic congestion and parking accommodation. (Findings of fact, ¶¶13-25.)

On April 28,2006, the final portion of the hearing commenced. The board heard and considered testimony from various witnesses regarding the parking accommodations provided by appellant’s club. (Findings of fact, ¶27.) Kevin Johnson, the president of Traffic Planning and Design Corporation, testified that he reviewed a report prepared by his company’s employee regarding the subject property and that the report was accurate. (Findings of fact, ¶27.) Additionally, Mr. Beller provided a copy of a signed lease agreement which indicated that there would be three separate locations for parking: one location with 175 spaces; one location with 100 spaces; and one location with 50 spaces, for atotal of325 spaces. (Findings of fact, ¶30; N.T. 4/28/06, pp. 10-17.)

John Neilson, an employee of Scores Holding Company, the licensor of Scores ’ trademarks, testified that the premises would have seating for 385 people and some standing room; on the first floor, there would be seating for 285 people; and the basement would be used for private parties with seating for 100 people. (Findings of fact, ¶32; N.T. 4/28/06, pp. 43-48.) Mr. Neilson estimated that the club would reach full capacity only once or twice a week; the average number of patrons would be between 150 and 175 people. (Findings of fact, ¶32; N.T. 4/28/06, pp. 43-48.)

While the premises is located in an industrial district, the board noted that residential properties are nearby and that some of the parking lots the club wanted to utilize are in residential districts. (Findings of fact, ¶35; N.T. 4/28/06, pp. 61,65-66.) In addition, the board heard and considered testimony provided by Alex Generalis, a real estate developer and broker, who is developing 444 North 4th Street, a block and a half from the subject property. (Findings of fact, ¶42; N.T 4/28/06, pp. 131-35.) He testified that he will propose a large residential development project on 2nd and Callowhill Streets and is also planning developments at 460 North 4th Street and 4th and Spring Garden Streets. (Findings of fact, ¶42; N.T 4/28/06, pp. 131-35.)

The board heard a considerable amount of testimony concerning the impact on the public health, safety, and welfare. (Findings of fact, ¶¶36-38, 47-48, 50-51, 53.) In particular, the board considered testimony from representatives of the intervenors — Matthew Ruben (president of the Board of Directors of the Northern Liberties Association) and Reverend James Von Dreele (executive director and CEO of the Seamen’s Church Institute). Mr. Ruben testified that it was his opinion that a gentlemen’s club could (1) endanger residential development and the pedestrian linkage with surrounding areas; (2) that three valet lots would cause traffic problems in the area; and (3) due to prior incidents at the previous club, there were similar concerns about the new club. (Findings of fact, ¶48; N.T. 4/28/06, pp. 168-70, 190.)

Reverend Von Dreele testified that a gentlemen’s club would degrade, and not enhance, the community. (Findings of fact, ¶53; N.T. 4/28/06, pp. 214-23.) According to Reverend Von Dreele, Seamen’s Church will have a chapel in the first floor and has about 15,000 visitors a year, many of whom are directed to the historical district, and go there by car or on foot; children who frequent the two nearby facilities would have to walk by the club. (Findings of fact, ¶53; N.T. 4/28/06, pp. 214-23.)

Dr. Anne Layden Ph.D., director of the Sexual Trauma and Psychopathology program at the University of Pennsylvania, also testified before the board. She has conducted research on the impact of strip clubs in Philadelphia. (Findings of fact, ¶50; N.T. 4/28/06, pp. 195-205.) A poll conducted by Dr. Layden in Pennsylvania among chiefs of police concluded that clubs, such as Scores, increased crime, and specifically, according to Dr. Layden, that the clubs increased rapes, prostitution, and sex trafficking. (Findings of fact, ¶¶50-51; N.T. 4/28/06, pp. 195-205.)

On cross-examination, Dr. Layden also testified that she conducted a survey based upon interviews of 81 people who go to strip clubs and who are likely to be rapists. (Finding of fact, ¶51; N.T. 4/28/06, pp. 207-208.) She stated that the interviewees were not her patients and that their crimes had gone unreported. (N.T. 4/28/06, pp. 207-208.) Dr. Layden testified that she could not confirm whether the interviewees told her the truth. (N.T. 4/28/06, p. 208.)

The board voted to refuse to grant a certificate, and on May 9, 2006, issued a notice of decision refusing the request for a certificate. (Findings of fact, ¶61.) In rendering its decision, the board applied section 14-1605(e) of the Philadelphia Zoning Code, which provides that a cabaret, as defined in section 14-1605(2), shall not be permitted within L-4, L-5, and G-2 Industrial Districts, unless a Zoning Board of Adjustment certificate is obtained. (Conclusions of law, ¶2.) The board considered appellant’s request for a certificate pursuant to the criteria set forth in section 14-1804 of the code. (Conclusions of law, ¶3.) The party requesting the certificate bears the initial burden of proof concerning the specific requirements in section 14-1804, i.e., traffic congestion, fire and safety, overcrowding, impairment to light and air, burden on public facilities, and effect on redevelopment or comprehensive plan. (Conclusions of law, ¶3; see also, In re Appeal of the Estate of Achey, 86 Pa. Commw. 385, 484 A.2d 874 (1984), aff’d, 509 Pa. 163, 501 A.2d 249 (1985); Bray v. Zoning Board of Adjustment, 48 Pa. Commw. 523, 410 A.2d 909 (1980).

The board concluded that appellant did not meet its burden of proof that the proposed use met the criteria set forth in section 14-1804, stating: “(1) the applicant’s traffic study did not adequately address the lack of parking for the patrons of the proposed club, nor the concerns of traffic congestion in the area because of the presence of numerous other clubs and/or businesses which place a burden on traffic and parking. Applicant’s proposed solution to the lack of parking was a valet service but there was no provision for adequate parking for patrons who would not use the valet service; (2) the evidence was that the club would have the capacity for 385 people but only have 325 valet parking spaces; (3) applicant did not present any evidence, other than the argument of an attorney representing Scores, that the proposed use would not endanger the public safety; (4) although the applicant represented that a local person with security expertise might be hired, there was no guarantee that there would be such a hire or that the security would be adequate; (5) applicant failed to present sufficient evidence that the proposed use would not adversely affect the area redevelopment plan; in fact, the overwhelming evidence before the Zoning Board of Adjustment was that the proposed use would have a deleterious effect on the surrounding area, including planned residential and commercial development.” (Conclusions of law, ¶4.)

SPH Associates LLC subsequently filed an appeal to this court from the refusal of the board to grant the certificate regarding the subject property.

DISCUSSION

Where an appeal is taken from the decision of a zoning board, and where the lower court has not held a hearing de novo, this court’s scope of appellate review is limited to a determination of whether the zoning board has committed (1) a manifest abuse of discretion; (2) an error of law; or (3) made findings of fact that were not supported by substantial evidence of record. Whitpain Township Board of Supervisors v. Whitpain Township Zoning Hearing Board, 121 Pa. Commw. 418, 432, 550 A.2d 1355, 1362 (1988), appeal denied, 525 Pa. 639, 578 A.2d 932 (1990); Valley View Civic Association v. Zoning Board of Adjustment, 501 Pa. 550, 555, 462 A.2d 637, 639-40 (1983). The board will have abused its discretion only if this court concludes that the board made findings not supported by “substantial evidence,” meaning “such relevant evidence as a reasonable mind would accept as adequate to support a conclusion.” Valley View, supra at 555, 462 A.2d at 640. As this court sits as an intermediate court, it must affirm the board’s decision unless the court finds that (1) the adjudication was in violation of the constitutional rights of the appellant; (2) the adjudication was not in accordance with the law; (3) the board violated the practice and procedure of Commonwealth agencies; or (4) any finding of fact made by the board, and necessary to support its adjudication, was not supported by substantial evidence. 2 Pa.C.S. §754(b); Sparacino v. Zoning Board of Adjustment, 728 A.2d 445, 447 (Pa. Commw. 1999)

While appellant contends that the board abused its discretion, it is clear from the record before this court that there was more than substantial evidence to support the board’s decision to deny the certificate. The certificate which appellant seeks is a permitted use subject to the board’s review and approval. The board’s findings of fact and conclusions of law are contained in a 19-page document that summarizes the three hearings regarding appellant’s request for a certificate. There are 338 pages of transcript testimony and additional exhibits. Furthermore, this court may not substitute its own judgment for that of the board. The board is only required to set forth sufficient facts and reasons to show that its actions are not arbitrary. See Lindquist Appeal 364 Pa. 561, 566, 73 A.2d 378, 380-81 (1950).

The certificate which appellant sought from the board is a permitted use subject to the board’s review and approval. According to section 14-1804 of the Zoning Code, there are certain criteria that the applicant must meet in order to obtain the desired certificate. The applicant bears the initial burden ofproof regarding the specific criteria set forth in section 14-1804 of the code, i.e., traffic congestion, fire and safety, overcrowding, impairment to light and air, burden on public facilities, and effect on redevelopment or comprehensive plan. See Bray v. Zoning Board of Adjustment, supra. The protestants bear the same burden of proof regarding the non-specific or general criteria in section 14-1804, i.e., adverse effect on public health, safety or welfare, and harmony with the spirit and purpose of the Zoning Code.

In this case, the board concluded that appellant had not sustained its burden of proof that the proposed use met the criteria set forth in section 14-1804 based upon the following: (1) lack of proper parking facilities to meet the capacity of the club; (2) concern for public safety; (3) inadequate security; and (4) adverse impact on the area redevelopment plan.

1. Traffic and Parking

The zoning board shall consider “that the grant of the certificate will not substantially increase congestion in thepublic streets.” Philadelphia Zoning Code §14-1804(1) (a). Objectors to the proposed use must show a high probability that the use will generate traffic patterns not normally generated by this type of use and that the abnormal traffic will pose a substantial threat to the health and safety of the community. Manor Healthcare Corporation v. Lower Moreland Township Zoning Hearing Board, 139 Pa. Commw. 206, 217, 590 A.2d 65, 71 (1991); see also, In re Appeal of Martin, 108 Pa. Commw. 107, 529 A.2d 582 (1987); Appeal of O’Hara, 389 Pa. 35, 131 A.2d 587 (1957).

Appellant presented testimony from John Wichner, a traffic planner and engineer employed by the firm of Traffic Planning and Design in Pottstown. (Findings of fact, ¶21.) Mr. Wichner stated that he did traffic counts at the subject premises between Friday at 4 p.m. through Sunday at noon, by personal observation and automatic traffic recorders at the busiest hours. (Findings of fact, ¶21; N.T. 4/28/06, pp. 61 -77.) He added the statistics from the Institute of Transportation Engineers for traffic data for similar facilities as the proposed club, and concluded that North 6th Street would be able to acceptably handle the traffic with the new club. (Findings of fact, ¶21; N.T. 4/28/06, pp. 61-77.) On-site, there are between 10 and 12 usable parking spots and there is an agreement with the adjacent property owner for use of another 65 spaces. (Findings of fact, ¶21.) There are parking spaces on the street and nearby paid parking lots, in addition to appellant’s proposed valet service. (Findings of fact, ¶21.)

Although appellant presented witnesses who testified that Scores would provide adequate parking, the board also considered the problems with appellant’s plan. Mr. Stanley Krakower, Esquire, counsel for the Olde City Civic Association and the Northern Liberties Association, noted that the parking plan outlined by Mr. Neilson relies heavily on valet service and there is not enough parking for persons who do not want to use the valet service. (Findings of fact, ¶33; N.T. 4/28/06, pp. 49-55.) Mr. Krakower’s point was supported by the testimony of Richard Tomm, an expert land use planner, former chair of Olde City Civic Association and member of Franklin Bridge North Civic Association. Mr. Tomm stated that reliance on valet service alone presents a problem. (N.T. 4/28/06, pp. 147-49.)

Mitch Deighen, former president of Northern Liberties Neighborhood Association and a long-time area resident, testified that when other clubs are in operation, there is a significant amount of traffic in the same area as the proposed Scores'. (N.T. 4/28/06, pp. 223-35.)

As the fact-finder, the board made credibility determinations based on the testimony provided. It concluded, based upon substantial evidence, that appellant had not met its burden to satisfy the burden regarding parking congestion.

2. Security and Public Safety

The board concluded that appellant did not present evidence that the proposed use would not endanger the public safety, and that there was no guarantee that there would be an adequate security presence at the club.

Scores ’witness, Luke Lirot, Esquire, offered materials concerning the criteria for the granting of certificates and studies regarding the impact of gentlemen’s clubs on the public health, safety and welfare. (Findings of fact, ¶36; N.T. 4/28/06, pp. 68-102.) Appellant’s counsel argued that places like Scores do not create any increase in crime and have absolutely no negative impact on property values and do not create blight. (Findings of fact, ¶36; N.T. 4/28/06, pp. 68-102.) Based on the studies Mr. Lirot offered, he stated that he was of the opinion that adult businesses would not cause a problem and would not adversely affect other development in the area. (Findings of fact, ¶36; N.T. 4/28/06, pp. 68-102.) Mr. Lirot offered three notebooks into evidence which contained studies from cities from various U.S. cities. (Findings of fact, ¶36; N.T. 4/28/06, p. 79.) Mr. Lirot conceded, however, that he only presented studies concerning areas where Scores is in litigation, that no local studies had been conducted, and that studies concerning a Scores location in New York were not included in the materials submitted to the board. (N.T. 4/28/06, pp. 88-92, 99-102.)

Scores Holding Company employee, John Neilson, offered testimony that Scores will retain a former Philadelphia police officer (if one can be located), who will be trained by a company called Forensic Investigative Associates (FIA). (N.T. 4/05/06, p. 46.) The security person would remain in Philadelphia and Scores would be liable for security problems. (Findings of fact, ¶19; N.T. 4/05/06, pp. 49-54.) Mr. Gutstein, an employee of FLA, testified that FIA would be retained to oversee the development and implementation of the security policies, procedures and protocols and the training and hiring of security staff. (N.T. 4/05/06, p. 46.)

There was also testimony, however, by Sebastian Hansen, the owner of Bash (which was located where appellant proposes Scores will be), who stated that there was a shooting inside of Bash. (Findings of fact, ¶14; N.T. 4/05/06, pp. 22-24.) The club was subsequently closed. (Findings of fact, ¶14; N.T. 4/05/06, pp. 22-24.)

The board additionally heard and considered the testimony of Dr. Anne Lay den Ph.D. concerning her views of the impact of the proposed club on the general public, as well as the patrons and employees. (N.T. 4/28/06, pp. 194-210.)

The Notes of Testimony indicate that the board heard ample testimony regarding the adverse effect of the proposed club on the health, safety and welfare of the public. The board obviously found certain witnesses to be more credible than other witnesses, determinations which this court may not revisit. Therefore, this court concludes that the board’s credibility determinations regarding health, safety and welfare issues were supported by substantial evidence.

3. Effect on Future Development

The board concluded that appellant failed to show that the proposed use would not have a deleterious effect on the surrounding area, including planned residential and commercial development. (Conclusions of law, ¶4.) Although unsubstantiated prophecies based on the opinion of the board itself will not adequately support conclusions of law, the board heard and considered testimony from several witnesses, whom they found to be credible, who testified that Scores would have a negative effect on surrounding area development. See Van Sciver v. Zoning Board of Adjustment of Philadelphia, 396 Pa. 646, 655, 152 A.2d 717, 723 (1959).

Appellant’s club is located in an L-4 Industrial District. (Findings of fact, ¶¶2, 34-35.) A textile factory is located on the same block as appellant’s proposed club. (Findings of fact, ¶49.) Aerial photographs and zoning maps show that there are industrial districts to the east and west. Low highway overpasses, access streets, and ramps accommodating the Vine Street Expressway, 1-95, and the Benjamin Franklin Bridge are located to the south of appellant’s proposed club. (Findings of fact, ¶35; N.T. 4/28/06, p. 61.)

Richard Tomm (an architect), Mr. Ruben, Rev. Von Dreele, Rick Snyderman (founder of South Street Renaissance and a resident and business owner in Olde City), and Mr. Gregorski (from the City Planning Commission) all testified that they believed the proposed use would have a negative effect on future development. Councilman Frank DiCicco testified that other adult establishment facilities in his district did have parking on the premises. (Findings of fact, ¶39; N.T. 4/28/06, pp. 116-20.) According to Councilman DiCicco, adult entertainment facilities do have negative impacts on future development and that there are four real estate developments “in the pipeline” in the area where Scores wants to locate and that the club will bring these proposed projects to a halt. (Findings of fact, ¶39; N.T. 4/28/06, pp. 116-20.) Councilman DiCicco further testified that he had introduced an overlay in December 2005 that would prohibit any new adult entertainment facility in this area; this bill was unanimously passed by city council. (Findings of fact, ¶41; N.T. 4/28/06, pp. 123-29.)

The board set forth sufficient facts and reasons to show that its actions were not arbitrary. Therefore, this court denies the instant appeal and affirms the decision of the board.

ORDER

And now, October 13, 2006, it is hereby ordered that the appeal of SPH Associates LLC is denied and the decision of the zoning board of adjustment is affirmed.

      . A “certificate” is equivalent to a “special exception.”

      . Seamen’s Church was granted a variance to build a chapel in its facility and has invested $4,000,000 in the facility. (Findings of fact, ¶53; N.T. 4/28/06, pp. 214-23.)

      . The board questioned Mr. Lirot as to the relevance and admissibility of studies from various U.S. cities. (N.T. 4/28/06, pp. 79-102.) Mr. Lirot asserted that appellant was not required to conduct a study specific to Philadelphia because courts have held that “you can look at foreign experience because people are people.” (N.T. 4/28/06, p. 96.) The studies submitted by Mr. Lirot would be admissible under 2 Pa.C.S. §554, which provides that “Local agencies shall not be bound by technical rules of evidence at agency hearings, and all relevant evidence of reasonable probative value may be received.” While the materials were admissible, they were certainly not determinative of whether Scores would increase crime in Philadelphia, negatively affect area property values, or create blight. Moreover, the issues of the weight and credibility of the witness and the studies were matters for the board to assess. See Borough of Youngsville v. Zoning Board of Borough of Youngsville, 69 Pa. Commw. 282, 287, 450 A.2d 1086, 1089 (1982); Center City Residents Association v. Zoning Board of Adjustment, 48 Pa. Commw. 416, 418, 410 A.2d 374, 375 (1980). The board, as fact-finder, has the power to reject even uncontradicted testimony which it finds to lack credibility. Vanguard Cellular Systems Inc. v. Zoning

        Hearing Board of Smithfield Township, 130 Pa. Commw. 371, 380, 568 A.2d 703, 707 (1989); George v. Zoning Hearing Board of Upper Moreland Township, 39 Pa. Commw. 472, 474, 396 A.2d 478, 479 (1978).


source: Caselaw Access Project

author: PANEPINTO, J.,

license: Public Domain

text:
    Poe v. Hatton

      Craig A. Altman, for plaintiff.

      Thomas F. Margiotti, for defendants.

      December 27, 2010—
   PANEPINTO, J.,

Defendants, Wilkins A. Hatton, II and Kinsman Corp. (“defendants”) appeal this court’s order of September 15, 2010, which denied defendants’ petition to strike/open default j udgment entered against them on October 30, 2009.

PROCEDURAL AND FACTUAL BACKGROUND

This matter stems from a default judgment entered in favor of plaintiff and against defendants on October 30, 2009. The complaint was originally filed on March 18, 2009. Service was allegedly made on defendants on April 15, 2009. Notice of intent to take default was sent to defendants by certified and regular mail on August 3, 2009. The praecipe for entry of default was filed by plaintiff on October 30, 2009. On November 10,2009, an arbitration award found in favor of plaintiff and against defendants in the amount of $35,000. No appeal was taken from the arbitration award. Defendants did not appear at the arbitration, nor did they attempt to defend this action. On March 19, 2010, plaintiff filed writs of attachment and execution upon garnishee TD Bank.

Defendants filed their petition to strike and/or open default judgment on April 6, 2010. In their petition, defendants alleged that they never responded to the complaint because they thought the suit was fabricated and baseless. See ¶7, defendants’ petition to strike/ open. Instead of responding to this suit, they chose to focus their time and resources on their business in face of tough economic times. Id. They further alleged that their financial hardship was aided by plaintiff’s failure to pay rent. Id. at ¶6. Defendants alleged that they evicted plaintiff as a result of his failure to pay rent. Id. However, only the complaint for the landlord-tenant action was attached to the petition, not a judgment or order. The only reason alleged by defendants for attempting to defend this action is that they discovered photographic evidence which they allege establishes plaintiff’s claim is fabricated and frivolous. Id. at ¶¶7, 11. Defendants failed to attach a proposed answer to plaintiff’s complaint in their petition to strike/open in violation of Pa.R.C.P. 237.3(a).

Plaintiff filed its reply to the petition to strike and/or open default judgment on April 27, 2010. Defendants filed sur-replies in support of their motion on April 29 and May 3, 2010. On September 15, 2010, this court denied the petition to strike and/or open default judgment. The order was docketed on September 21, 2010.

On October 6, 2010, defendants filed a motion for reconsideration of the September 15, 2010 order. On October 20, 2010, defendants appealed the September 15, 2010 order to the Superior Court. Plaintiff filed a motion to strike defendants’ motion for reconsideration on October 21, 2010. On October 26, 2010, this court entered an order, dated October 22, 2010, directing defendants to file a 1925(b) statement of errors. On November 12, 2010, defendants filed a reply in opposition to the motion to strike. Defendants filed their 1925(b) statement on November 17, 2010.

This court lost jurisdiction to rule on the motion for reconsideration as it was not ruled on within thirty days of September 21, 2010, the date of the docketing of the September 15, 2010 order. As a result, this court entered an order on December 23, 2010 stating that the court had lost jurisdiction and could not rule on the motion for reconsideration. Also on December 23, 2010, this court dismissed the motion to strike as moot since the court lost jurisdiction to rule on the motion for reconsideration.

ALLEGATIONS OF ERROR

On October 26, 2010, this court entered an order directing defendants to filea Rule 1925(b) statement no later than 21 days after the entry of the order. Defendants filed a rule 1925(b) statement pursuant to this court’s order on November 17, 2010. Defendants have raised the following issues on appeal:

A. Erring in not granting defendants’ motion to strike default judgment

1. The court erred in denying the defendants’ motion to strike default judgment and their motion to reconsider the denial of such because of [sic] the court did not have jurisdiction over the defendants as the evidence submitted to the court did not establish that the defendants were served or alternatively not served with process in a sufficiently [sic] to give notice that this action has been brought against them. The affidavits of service submitted by the plaintiff was so filled with inconsistencies and omissions that it should not have been accepted by the court as evidence of personal service. 1) There is no evidence that the affidavits relied on by the court were sworn and/or attested to or, 2) There is no evidence that the service was made by a sheriff as the line for a sheriff to sign his [sic] blank. 3) The numerous and inconsistent dates on the affidavits make those documents unreliable. 4) The last name of the party being served on the affidavit of service is not that of the defendant Hatton. 5) The purported service on Kinsman Corporation, if made at all, was apparently accepted by someone with the last name other than Hatton. 6) Plaintiff is at fault for any failure of service for consistently using the wrong name of the defendant Hatton on any documents served were [sic] attempted to be served on Mr. Hatton while consistently using his correct name with all documents served with the court. Absent a valid service of process a subsequent judgment by default is defective. Brooks v. B&R Towing Co. 939 A.2d 398, 401-04 (Pa. Super. 2007).
2. The court erred by accepting plaintiff’s notice of intent to take default judgment of Wilkins A. Hatton, II and Kinsman Corp. as it was 1) Inaccurately submitted to the court that certified mail was signed for by the defendant Hatton. 2) Contrary to plaintiff’s affidavit Wilkins A. Hatton, II, was not the addressee. Plaintiff consistently used the wrong name in documents sent to the defendants but the correct name in the documents filed with the court. 3) Certified mail sent to Kinsman Corp. omitted any reference to that corporation in the caption or body that the instant action had anything to do with that company. 4) The incorrectly addressed letters were not received and signed for by defendant Hatton as represented to the court but as demonstrated by the submitted sworn affidavit, were received by his 18-year-old son who because of the inaccuracies in the omissions used a similar lack of care and attention to these documents as plaintiff had done in preparing them, resulting in the notice never being received by the defendants. Further, the son, not an officer of Kinsman Corp. was unable to accept service for that company faulty or not.

B. Erring in not granting defendants’ motion to open default judgment

1. The court erred in denying defendants’ motion to open default judgment and their motion to reconsider in ruling that the denial of such because a defendant had not met his burden to open such judgment based upon the facts and the case of Grisnati v. Randolph, 856 A.2d 121 (Pa. Super. 2004) which holds that “a trial court may open a judgment when (1) the petition has been promptly filed, (2) a meritorious defense can be shown and (3) the failure to appear can be explained.
2. The defendants have met their burden that the petition was promptly filed. The defendants did not become aware of the action against them until defendant Hatton went to the bank and found his account levied on or about March 26, 2010. The defendants promptly filed their motion within eleven (11) days of the actual notice of default judgment and indeed the action itself.
3. The defendants have met their burden by showing a meritorious defense to the underlying action. In this matter the plaintiff alleges that he was injured as a result of the fall on the staircase of the property question[sic] on or about October 29, 2008. The defendants have shown no numerous meritorious defenses to this action including, but not limited to, 1) photographic evidence recovered from the plaintiff’s former apartment indicates the fall was staged 2) photographic evidence recovered from the plaintiff’s former apartment indicates that the stairs in question were not defective 3) sworn testimony via affidavit of three (3) witnesses establishes that even if defendant actually fell he was not seriously injured 4) sworn testimony via affidavit establishes that defendant, having never paid rent and being told to vacate, was a trespasser at the time of the alleged fall.
4. The defendants have met their burden of stating their failure to answer the complaint and receiving the default judgment. As stated above, the defendants were not Served or not properly served or, the service was so faulty, through the plaintiff’s own mistakes as to be ineffectual. Additionally, defendant Hatton had been recently diagnosed with cancer and was facing a foreclosure. It is submitted it would be inequitable for the court to require Mr. Hatton or his family, under the immense stress that they were clearly under, to be so diligent to “figure out” the inexplicable errors and omissions of any service that may have been received.

DISCUSSION

Defendants’ petition to strike/open default judgment has been properly denied. After reviewing the default judgment, this court determined that no fatal defect existed on the face of the record and denied the petition to strike default judgment. The three-pronged test for opening was not satisfied by defendants, so this court properly denied the petition to open. An appellate court will not reverse a lower court ruling, either opening or refusing to open a default judgment, unless there was an error of law or a clear, manifest abuse of discretion. McCoy v. Public Acceptance Corp., 451 Pa. 495, 498, 305 A.2d 698, 700 (Pa. 1973).

A petition to strike a judgment is a common law proceeding which operates as a demurrer to the record and can only be granted for a fatal defect appearing on the face of the record. Resolution Trust Corp. v. Copley Ou-Wayne Assocs., 546 Pa. 98, 106, 683 A.2d 269, 273 (Pa. 1996). For purposes of a petition to strike, the court is limited to the consideration of matters appearing on the face of the record and the facts averred in the affidavit of default are to be taken as true. Northway Village No. 3. Inc. v. Northway Properties, Inc., 430 Pa. 499, 503, 244 A.2d 47, 49 (Pa. 1968). If the facts averred in the affidavit of default are disputed, the appropriate remedy is a petition to open judgment. Id. Matters dehors the record will not be considered, and if the record is self-sustaining, the judgment will not be stricken. Cameron v. Great Atlantic and Pacific Tea Co., 439 Pa. 374, 266 A.2d 715 (1970).

In Liquid Carbonic Corp. v. Cooper & Reese, Inc., 416 A.2d 549 (Pa. Super. 1979), appellant sought reversal of the trial court’s denial of its petition to open and/or strike default judgment. The issue of improper service was also at issue in that case. The sheriff’s return of service noted the date, the place served (defendant’s place of business), and that the complaint was served on someone in charge of the business at the time. It did not include the person’s name that was served. Id. at 550. The Superior Court preliminarily addressed the petition to strike and agreed that it had been properly denied by the trial court. Id. at 550. Despite the issue of service being brought up, there was no fatal defect on the face of the record that would warrant the striking of the judgment. Id. at 551.

In the present case, there are two affidavits of service filed with this court. The first affidavit of service is for service on defendant Hatton. The affidavit states the complaint was served on April 15, 2009 at 7:30 at the defendants’ address, and that the defendant was personally served. The name of the person served in the affidavit is Wilkins A. Matton. The second affidavit is for service on defendant Kinsman Corp. This affidavit states that the complaint was served on April 15, 2009 at 7:30 at defendants’ address on an agent or person in charge of defendant’s office or usual place of business and lists the name, Wilkins Matton, as the person who accepted service. The name of the individual defendant is Wilkins A. Hatton, II. It seems readily apparent that this is a typographical error and not remotely close to being a fatal defect. The name of the defendant is off by one letter. There are no other inconsistencies or issues with these affidavits. On their face, the affidavits of service are proper.

It is important to note that nowhere in defendants’ petition to strike/open do defendants even once allege that they were never served with the complaint or were unaware of the proceedings initiated against them. On the contrary, defendants only allege that they did not respond to the complaint because of financial hardship and because they felt the claim was without merit. See petition to strike/ open at ¶7.

Defendants raise the issue of service of process for the first time in their allegations of error. The allegation of error alleges that defendant Hatton’s 18-year-old son was served with the notice of intent to take default and that he was careless with the documents and did not notify his father of their existence. See allegations of error ¶A2. The allegation of error also alleged the service was bad because the documents were improperly addressed and confusing. Id. at ¶A1. None of these arguments were put in the petition. Some of the arguments which are raised now are also outside of the record and are improper to be considered for a petition to strike. The allegations of improper service should have been raised in the petition to strike/open. Defendants never alleged in the petition that they were unaware of the complaint against them. Rather, they alleged that they willingly chose to ignore the complaint and to not respond to its allegations. Any allegations of improper service of the complaint or 10-day notice of intent to take default are therefore waived.

A petition to open default judgment must be promptly filed. Balk v. Ford Motor Co., 446 Pa. 137, 139, 285 A.2d 128, 130 (Pa. 1971). “The law does not establish a specific time period within which a petition to open a judgment must be filed to qualify as timely. Instead, the court must consider the length of time between discovery of the entry of the default judgment and the reason for delay.” Castings Condominium Ass’n v. Klein, 663 A.2d 220, 223 (Pa. Super. 1995).

The petition was not timely filed. The default in this case was entered against defendants on October 30, 2009. The petition to strike/open was not filed until April 6, 2010, over five (5) months after the entry of default. While there is no bright line rule that makes a petition to strike/ open timely, five months is not timely in this matter when defendants admittedly knew of the proceedings against them and failed to respond to the complaint.

A petition to open default judgment must offer a reasonable excuse for failure to act on the original complaint. Balk, 285 A.2d at 130-31. Whether an excuse is legitimate is not easily answered and depends upon the specific circumstances of the case. Duckson v. Wee Wheelers, Inc., 620 A.2d 1206, 1210 (Pa. Super. 1993).

The petition does not state a reasonable excuse for failure to reply to the complaint. Financial hardship alone is not a reason to fail to reply to a complaint. There is no allegation in the petition to open/strike that defendants contacted an attorney or a legal services organization about the complaint against them to determine if they could retain counsel or otherwise defend the action. In fact, the petition explicitly states that defendants knowingly chose to ignore the complaint. Defendants allege that they felt the claim against them was meritless. It is puzzling then that they would choose to not defend against an action that they were confident in winning. Our system of justice does not excuse this type of behavior where a party does not follow the rules simply because they have decided the case in their own heads. Defendants could have still filed a pro se answer, attended the arbitration to contest the plaintiff’s claims, or timely appeal the arbitration award, defendants chose to ignore the suit. Therefore, there is no reasonable excuse presented by defendants here.

Additionally, the allegation that the 10-day notice was served on Hatton’s son, and not Hatton, does not help defendants. The son’s carelessness is not a reasonable excuse for not notifying his father of the impending default. The son should have notified his father of the legal papers that he was allegedly served with immediately. He did not. However, this does fit in with the defendants’ theme of not responding to legal documents when you think you have already solved the case in your own head and do not need to resort to the requirements for defending an action. It does not count as a reasonable excuse for not responding to the complaint or notice of default.

“The requirement of a meritorious defense is only that a defense must be pleaded that if proved at trial would justify relief; however, it must set forth the defense in precise, specific and clear terms.” Seeger v. First Union Nat’l Bank, 836 A.2d 163, 166 (Pa. Super. 2003). Pa.R.C.P. § 237.3(a) provides that “[a] petition for relief from a judgment on non pros or of default entered pursuant to rule 237. 1 shall have attached thereto a verified copy of the complaint or answer which the petitioner seeks leave to file.” Pa.R.C.P. § 237.3(a) (emphasis added).

There is no meritorious defense in the petition. There is no proposed answer attached to the complaint as required by Rule 237.3. The only defense alleged in the petition is based on photographs defendants assert prove the claim is fraudulent and staged. However, these pictures do not prove anything. The court is unable to determine the origin of the pictures, who took the pictures, when the pictures were taken or any other relevant information. This information, if the court was given it, could show whether the pictures were taken shortly after the alleged fall or whether the pictures were deliberately “staged” to show where the plaintiff fell and what the scene looked like, and not to commit a fraud on the courts. The petition is devoid of any real defense besides the unsupported allegations that the newly discovered pictures are evidence of plaintiff fraudulently bringing this claim. They certainly raise questions about the claim. However, without a proper basis, it is hard to tell if the pictures prove anything at all. Without a proposed answer, the meritorious defense is more like unsupported allegations than a defense to a slip and fall claim.

Defendants have failed to establish even one of the prongs required to open the default judgment. There is also no fatal defect on the face of the record. Any alleged defects raised by defendants are outside the record and outside the review of this court. The record is proper, defendants failed to timely file this petition, have not established a reasonable excuse for their failure to reply to the complaint, and have put forth no meritorious defense to the underlying action.

Accordingly, for the reasons stated above, this appeal should be denied.


author: TERESHKO, J.,

text:
    Nantieh v. First Keystone Risk Retention Group, Inc.

      December 2, 2010

      Seth D. Wilson and Robert Morris, for plaintiff.

      Robert McDivitt, for defendant.
   TERESHKO, J.,

Plaintiff, Anthony Nantieh, hereby appeals from the order dated July 12,2010 granting defendant First Keystone Risk Retention Group, Inc.’s preliminary objections and dismissing plaintiff’s second amended complaint.

FACTUAL BACKGROUND

On August 21, 2009, Anthony Nantieh (hereinafter plaintiff) was operating a taxi cab as an independent contractor owned by Layla Group, Inc. at the intersection of Grays Ferry Avenue and 31st Street in Philadelphia when he was involved in an accident which caused him to suffer personal injuries to his left cervical spine, left trapezius, left rib and left shoulder. (Second amended complaint, ¶¶2, 5-6)

At the time of the accident, plaintiff contends that the taxi was insured by Layla through a policy of insurance issued by First Keystone Risk Retention Group, Inc. (hereinafter First Keystone)

On August 28,2009, counsel for plaintiff sent a letter to first keystone which notified it that plaintiff was presenting a claim for first party benefits under its policy. (Second amended complaint, ¶9)

On September 1, 2009, First Keystone sent a letter to plaintiff advising plaintiff that he was excluded from coverage under the policy “because [plaintiff] was reported to be injured on [August 21,2009] and is being excluded in accordance with the applicable policy contract provisions” and further advised that plaintiff was not permitted to operated a vehicle insured by First Keystone. (Preliminary objections to second amended complaint, ¶8)

On September 4, 2009, plaintiff’s doctor issued a note permitting plaintiff to return to work operating a taxi. (Id., ¶10)

On September 10, 2009, counsel for plaintiff forwarded the doctor’s note and requested that plaintiff be permitted to operate the taxi, but first keystone continued to exclude plaintiff from the policy from September 1, 2009 to September 25, 2009. (Id., ¶11)

On September 25, 2009, plaintiff was injured in a second automobile accident which caused him injuries and disabled him from operating a taxi. (Second amended complaint, ¶23)

On February 24, 2010, plaintiff filed his complaint alleging inter alia, that First Keystone’s wrongful actions in handling plaintiff’s claim for first party benefits, including prohibiting plaintiff from operating a taxi and excluding him from coverage under the policy constituted bad faith under 42 Pa.C.S.A. §8371. (Second amended complaint, ¶¶22-27) Plaintiff also claims that he lost income in the amount of $250.00 per day from September 1, 2009 to September 25, 2009 as a result of First Keystone’s prohibition of him operating a taxi and excluding him from coverage. Lastly, plaintiff alleges that First Keystone excluded Nantieh from coverage in order to dissuade Nantieh from availing himself of benefits for reasonable and necessary medical treatment for first party benefits. (Second amended complaint, ¶24,26)

On March 30, 2010, First Keystone filed its preliminary objections to plaintiff’s complaint. On April 19, 2010, plaintiff subsequently filed an amended complaint to which First Keystone again filed preliminary objections. On May 28,2010, plaintiff again filed a second amended complaint alleging a claim for bad faith against First Keystone. First Keystone responded by filing preliminary objections pursuant to Pa.R.C.P. 1028(a)(4), legal insufficiency of pleadings.

By order dated July 12, 2010, this court granted First Keystone’s preliminary objections to plaintiff’s second amended complaint and dismissed the second amended complaint.

On July 28, 2010, plaintiff filed his notice of appeal and issued his statement of errors complained on appeal, plaintiff raised the following issue:

Whether this court committed an error of law or abused its discretion in dismissing plaintiff’s second amended complaint for his failure to prove a viable cause of action for bad faith pursuant to 42 Pa.C.S.A. §8371.

LEGAL ANALYSIS

When the appellate courts sit in review of the trial court’s grant of preliminary objections in the nature of a demurrer, the salient facts are derived solely from complaint. Bilt-Rite Contractors, Inc. v. The Architectural Studio, 581 Pa. 454, 866 A.2d 270, 272 (Pa. 2005). Pursuant to this standard of review, we accept as true “all well-pleaded material facts set forth in the complaint and all inferences fairly deducible from those facts.” Krentz v. Consol. Rail Corp., 589 Pa. 576, 910 A.2d 20, 26 (Pa. 2006). It is not enough for an appellant to persuade an appellate court that it might have come to a different result. McCrory v. Abraham, 657 A.2d 499, 501 (Pa. Super 1995). The burden rests on the appellant to show that the trial court misapplied or overrode the law or the decision was manifestly unreasonable, or resulted from partiality, prejudice, bias or ill will. Id.

Preliminary objections in the nature of a demurrer are properly sustained where the complaint itself, if proven, is sufficient to entitle the plaintiff to the relief sought. Hoffman v. Misericordia Hospital of Philadelphia, 439 Pa. 501, 267 A.2d 867, 868 (1975).

To establish insurance bad faith pursuant to 42 Pa.C.S.A. §8371, plaintiff must establish clear and convincing evidence that: 1) the insurer lacked a reasonable basis for denying benefits under a policy; and 2) the insurer knowingly or recklessly disregarded its lack of a reasonable basis in denying the claim. Terletsky v. Prudential Property and Cas.Ins.Co., 649 A.2d 680, 688 (Pa. Super. 1994).

In plaintiff’s second amended complaint he alleges that First Keystone excluded plaintiff from coverage “in order to dissuade plaintiff from availing himself of benefits for reasonable and necessary medical treatment.” (Plaintiff’s memo of law in response to defendant’s preliminary objections to second amended complaint, pg. 4) In the alternative, plaintiff also states that First Keystone has no legitimate basis to exclude him from coverage under the insurance policy from operating his taxi, when plaintiff was cleared by a physician to do so. (Id.)

As quoted above, plaintiff does not specifically state that he claimed or was denied payment of any medical benefits by First Keystone arising out of the two accidents. To the extent that plaintiff is asserting an entitlement to any medical benefits from First Keystone, the only benefits available to him would be first party benefits pursuant to the Pennsylvania Motor Vehicle Financial Responsibility Law 75 Pa.C.S.A. §§ 1711 et seq.

Specifically, 75 Pa.C.S.A. § 1798(b) states:

In the event an insurer is found to have acted with no reasonable foundation in refusing to pay the benefits enumerated in subsection (a) when due, the insurer shall pay, in addition to the benefits owed and the interest thereon, a reasonable attorney fee based upon actual time expended, (emphasis added)

A reading of this section of the MVFRL clearly indicates that any action that where plaintiff contends he is entitled to and was denied medical benefits from First Keystone should be limited to the remedies set forth under §1798 of the MVFRL and not the bad faith statute. Both Pennsylvania state and federal trial courts have previously found that the MVFRL was applicable in cases such as this. See Mahnke by Mahnke v. Maryland Casualty Co., 1995 U.S. Dist. LEXIS 14203, (1995); O’Connor v. Erie Ins. Exchange, No. 8654 CV 2009 (Monroe C.C.P. 2010). In both Mahnke and O ’Connor the trial courts stated that the Pennsylvania Motor Vehicle Financial Responsibility Law provided the exclusive remedies for first party benefit claims, that medical expenses constituted first party benefits, and that the plaintiffs could not bring a bad faith claim under 42 Pa.Cons. Stat. Ann. §8371 for a denial of medical benefits. Id.

The Mahnke court expressed its reasoning adopted by this court:

The Pennsylvania legislature intended the PMVFRL to provide the exclusive first party remedy for bad faith denials by insurance companies. See Gemini Physical Therapy and Rehabilitation, Inc. v. State Farm Mut. Ins. Co., 40 F.3d 63, 67 (3d Cir. 1994). The act defines “first party benefits” as “medical expenses.” 75 Pa. Con. Stat. Ann. §1702 (West Supp. 1995). Thus, an insured may not bring a §8371 bad faith claim for denial of medical expenses in violation of the PMVFRL. See Gavaghan v. Replacement Rent-A-Car, Inc., 811 F. Supp. 1077, 1080 (E.D.Pa. 1992). Sections 1797 and 1798 of the PMVFRL provide the exclusive remedies available to the insured for first party benefits claims. Id.

This same argument can be made for plaintiff’s allegation that there was no legitimate basis to exclude him from coverage under the policy of insurance and prohibit him from operating his taxi.

Plaintiff’s second amended complaint was dismissed because plaintiff did not set forth the required allegations that F irst Keystone denied any benefits to plaintiff according to Terletsky. Plaintiff’s claim of bad faith because he was not permitted to continue to operate a taxi is analogous to his previous erroneous argument alleging bad faith for First Keystone’s refusal to renew the insurance policy.

Plaintiff’s ability to drive has no connection whatsoever to any benefit or coverage provided by the policy. As a result, the alleged inability to drive cannot be a denial of any benefit provided under the policy. Thus, plaintiff’s allegations do not fall within the scope of §8371 of the bad faith statute and he cannot maintain an action on this basis.

CONCLUSION

For the foregoing reasons, this court respectfully requests that the order dated July 12, 2010 granting defendant First Keystone Risk Retention Group, Inc.’s preliminary objections and dismissing plaintiff’s second amended complaint be affirmed.


author: BERNSTEIN, J.,

text:
    Huber v. Etkin

      December 10, 2010

      Bradley G. Rainer and Edward J. Kelbon Jr., for plaintiff.

      Robert B. White Jr., for defendant.
   BERNSTEIN, J.,

Robert A. Huber (“plaintiff’) and Michael A. Etkin (“defendant”) are former law partners in two partnerships: Etkin & Huber, LLP (“E&H”) and Yankowitz, Etkin and Huber, LLP (“YEH”). Plaintiff commenced this action to recover pre-dissolution distributions owed to him. On May 31, 2009, defendant filed an answer and counter-claim seeking his share of post-dissolution contingent fees received from client matters in progress on the date of dissolution. On July 1, 2010, this court ruled in favor of plaintiff. On July 16, 2010, defendant filed post-trial motions arguing that the court’s findings of fact were contrary to the evidence at trial and that Solo v. Padova is not the law of Pennsylvania with respect to unresolved contingent fee cases at time of dissolution but subsequently resolved. On November 5, 2010, this court ordered a new trial. It is from this order that plaintiff now appeals.

E&H was formed in 2002 by plaintiff and defendant. There was no written partnership agreement governing E&H. Pursuant to the oral partnership agreement profits were divided 52% for defendant and 48% for plaintiff. In October of 2002, YEH was formed by a written partnership agreement providing that Jack A. Yankowitz and the law firm of E&H were each 50% owners. On May 31, 2007, plaintiff withdrew from E&H and YEH and notified both defendant and Mr. Yankowitz.

Plaintiff and defendant sent letters to all E&H and YEH clients, informing them of the dissolution of each partnership. The letters gave clients the choice of selecting which E&H partner they would retain to continue representation. Eipon selection, that attorney continued representation. Plaintiff has been paid a total of $78,000 in pre-dissolution profits from E&H and YEH. No post-dissolution profits have been paid by either party.

When a partner withdraws from a partnership the partnership is dissolved, and specific statutory rules apply. “On dissolution, the partnership is not terminated but continues until the winding up of partnership affairs is completed.” Partners are to contribute the amount necessary to satisfy the liabilities of the partnership in the absence of any agreements to the contrary. Liabilities include profits owed to partners. “Each partner shall... share equally in the profits and surplus remaining after all liabilities, including those to partners, are satisfied and must contribute towards the losses...sustained by the partnership, according to each partner’s share in the profits.”

Defendant’s counter-claim was for post-dissolution profits earned by plaintiff. Defendant contended that he was entitled to profits plaintiff earned from completing cases that had been previously handled by the partnerships. While there is no binding precedent directly on point, there is an abundance of persuasive authority.

Melenyzer v. Tershel involved the disposition of a law partnership’s contingent fee profits recovered post-dissolution. In that case there was no partnership agreement that addressed post-dissolution distributions and therefore the Uniform Partnership Act controlled. Defendant argued that his responsibility to the other partners was limited to fees and costs owed at the time of dissolution, and any contingent fee case in progress belonged to the “originating attorney.” The Washington County Court of Common Pleas rejected this contention in favor of clearly established general partnership principles: “A partner[, as a fiduciary,] must not take partnership property after dissolution. Partnership property includes a law firm’s case that is in progress before dissolution, and is completed as part of the winding up of the firm.” The court concluded that contingent fee cases brought into the firm prior to dissolution were assets of the partnership to be split accordingly.

In re LaBrum & Doak, LLP also involved facts remarkably similar to those in the instant case. In the absence of a contrary written agreement, Judge Scholl of the Eastern District of Pennsylvania Bankruptcy court held that the provisions of the Pennsylvania Uniform Partnership Act governed the disposition of post-dissolution contingent fees and costs in matters in progress at the time of dissolution. In his opinion, Judge Scholl said:

Throughout the windup period, partners have a fiduciary duty to act in good faith toward one another and complete the “unfinished business” of the partnership without any additional compensation for this activity. Accordingly, partners are obliged to complete the work-in-progress of the partnership at the time of its dissolution, liquidate its assets, settle its liabilities, and distribute its profits, if any, among the partners. Only upon completion of the “unfinished business” is the partnership, and thus the fiduciary duty between partners, terminated.
On the basis of these principles, every other court confronted with this issue of division of post-dissolution proceeds of a law partnership has held that pending cases, regardless of whether they are hourly-fee cases or contingent-fee matters, are unfinished business requiring winding up after dissolution, and are therefore assets of the partnership subject to post-dissolution distribution.

Only the isolated case of Solo v. Padova held that contingent fees are not subject to post-dissolution distribution. Solo relied on the Superior Court’s decisions in Lamparski v. Sikov and Beasley v. Beasley. However, Lamparski concerned the distribution of corporate assets to a deceased partner’s estate. This decision was controlled by statutes which have since been repealed. Pursuant to these statutes, an agreed upon appraiser determined the corporation’s value according to the “net asset” valuation method also agreed upon by the parties. The appraiser decided not to assign value to any billable work in progress or even to accounts receivable because of the corporation’s method of accounting. If fees earned but not yet collected were not “net assets” under the accounting and valuation methods agreed upon by the parties then of course contingent fees could not be “assets” either. The Superior Court found no abuse of discretion in the trial court’s order which adopted the appraiser’s recommendations and conclusions.

Beasley involved the equitable distribution of marital assets. The Divorce Code of 1980 governed the case. The Superior Court held that it would have been inappropriate in that case to value contingent fee cases handled by the husband’s law practice for purposes of equitable distribution when such value would be incorporated into an alimony award under the Divorce Code. The court explained: “the income producing capacity reflected by [contingent fee] cases can be estimated on the basis of compensation for completed cases and, therefore, that record should be sufficient to project the earning capacity of the attorney.”

It is not impossible to determine the value of contingent fee cases when a partnership is dissolved. Fortuitously, in this case, most of the contingent fee cases have been resolved since the partnerships dissolved over three years ago. Thus, the value of these cases is absolutely known fact.

Since the value of the contingent fee cases are a partnership asset upon dissolution the prior verdict and opinion were properly vacated and the decision to order a new trial should be affirmed.

      . No. 5049, 1990 WL 902426 (Pa. Com. PI. 1990), 21 Phila. 22.

      . 15 Pa.C.S. § 8353(1)(ii); Girard Bank v. Haley, 460 Pa. 237 (1975).

      . 15 Pa.C.S. §8352.

      . 15 Pa.C.S. § 8362(2)(iv).

      . 15 Pa.C.S. §8331(1).

      . No. 99-5200, 2004 WL 5149401 (Pa. Com. Pl. 2004).

      . Id. (citing Bracht v. Connell, 170 A. 297 (Pa. 1933)).

      . 227 B.R. 391 (Bkrtcy EDPA 1998).

      . Id. at 408 (citations omitted).

      . No. 5049, 1990 WL 902426 (Pa. Com. Pl. 1990), 21 Phila. 22.

      . 559 A.2d 544 (Pa. Super. 1989).

      . 518 A.2d 545 (Pa. Super. 1986).

      . Beasley, 518 A.2d at 554.

      . It may require expert opinion testimony as to likelihood of success and amount of damages.

      . The parties testified that they did not part ways amicably. Likewise neither party thought there was an agreement which controlled the disposition of post-dissolution contingent fee profits.


author: HODGSON, P.J.,

text:
    Wilson v. PECO Energy Co.

      C.P. of Montgomery County,
    no. 07-23044.

      Dale G. Larrimore, for plaintiff.

      Mark J. Dianrio, for defendant.

      December 22, 2010
   HODGSON, P.J.,

Plaintiff appellant, Delissa Wilson, appeals to the Superior Court from our order dated November 1, 2010 granting appellee, PECO Energy Company’s, motion for summary judgment.

FACTS AND PROCEDURAL HISTORY

In November of 2005, appellant, Delissa Wilson, was struck by a car driven by Mark Chiapetta at the intersection of Trooper Road and Betzwood Drive in West Norriton, Montgomery County. The appellant was attempting to cross the road at an unmarked crosswalk in order to reach the SEPTA bus station on the other side of the street. At the time of the accident, the streetlight at the intersection was fully lit. Appellee PECO (“appellee”) owned and maintained the streetlight. Plaintiff filed a suit in negligence naming Chiapetta, Pennsylvania Department of Transportation (“PennDOT”) and West Norriton Township (“Township”) as defendants.

Thereafter, plaintiff filed a second complaint at the above docket number naming appellee and Exelon Corporation as additional defendants. Appellee is an electric and natural gas utility subsidiary of Exelon Corporation. Exelon Corporation has, by stipulation of parties, since been dismissed from the instant matter. At the request of appellee, the actions were consolidated by order of this court dated June 5, 2008. On December 8, 2008, appellee filed a motion for leave to join SEPTA as an additional defendant. Said motion was granted on January 21, 2009. SEPTA filed its answer and new matter to appellee’s joinder complaint on March 20, 2009. Appellee filed its reply to the new matter on April 25, 2009. On March 16, 2010, SEPTA filed a motion to amend its answer and new matter pursuant to Pa.R.C.P. 1033, which this court granted. Appellee filed a motion for summary judgment on June 4, 2010. We heard oral argument on said motion on October 28, 2010. Subsequently, we granted appellee’s motion for summary judgment on November 1, 2010. appellant filed a timely notice of appeal that same day. Pursuant to Rule 1925(b), we directed appellant on November 9,2010 to file a concise statement of matters complained of on appeal. In compliance with Rule 1925(b), appellant filed concise statement on November 16, 2010. Subsequently, all parties to the action stipulated and agreed to the dismissal of Exelon Corporation from the matter.

DISCUSSION

Appellant raises five issues on appeal: (1) appellant asserts that we erred in finding that appellee did not have a duty to “maintain” the streetlights that it owned at and near the intersection of Trooper Road and Betzwood Drive, in West Norriton Township, Pennsylvania, when both appellee and West Norriton Township admitted in discovery that appellee owned, possessed, and maintained said streetlights; (2) appellant claims we erred in finding that appellee’s duty to “maintain” the streetlights that it owned at and near the intersection of Trooper Road and Betzwood Drive, in West Norriton Township, Pennsylvania, did not include the duty to “prevent a decline from existing state or condition...keep in good order; keep in proper condition... and supply with what is needed...” to continue to make the intersection safe for pedestrians as it was at the time the original street lights were installed in about 1970. Issues three and four reiterate the first two issues and will be addressed generally. Finally, in issue five (5) appellant argues the court erred in not determining there were genuine issues of material fact as to necessary elements of the negligence action that need to be determined by the jury.

When determining if a motion for summary judgment was properly granted, the appellate court’s scope of review is plenary. Miller v. Sacred Heart Hospital, 753 A.2d 829, 831 (Pa. Super. 2000). Accordingly, an appellate court will apply the same standard used by the trial court; that is, it will review all of the evidence of record to determine whether there exists a genuine issue of material fact. Id. at 832. The moving party has the burden of proving the nonexistence of any genuine issue of fact. Accu-Weather, Inc. v. Prospect Communications, Inc., 644 A.2d 1251, 1254 (Pa. Super. 1994).

In the absence of a factual dispute, the court must discern whether the moving party is entitled to judgment as a matter of law. Miller, 753 A.2d at 832. The appellate court may overturn a trial court’s entry of summary judgment only if the lower court has committed a clear abuse of discretion. Id. A trial court will be found to have abused its discretion if, in resolving the issue for decision it misapplies the law or exercises its discretion in a manner lacking reason. Id. Similarly, the trial court abuses its discretion if it does not follow legal procedure. Id. Summary judgment may be granted only in those cases in which the record clearly shows that there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Southard v. Temple University Hospital, 566 Pa. 335, 341, 781 A.2d 101, 105 (Pa. 2001).

Pennsylvania Rule of Civil Procedure 1035.3 requires that, when faced with a motion for summary judgment, the nonmoving party may not rest upon the mere allegations or denials of the pleadings, but must respond identifying:

(1) one or more issues of fact arising from evidence in the record controverting the evidence cited in support of the motion or from a challenge to the credibility of one or more witnesses testifying in support of the motion, or
(2) evidence in the record establishing the facts essential to the cause of action or defense which the motion cites as not having been produced. Pa.R.C.P. 1035.3.

In the instant matter, appellant has failed to meet the standard articulated above. Accordingly, appellee is entitled to summary judgment as a matter of law.

For purposes of clarity and judicial economy, issues one (1), two (2), three (3), and four (4) will be addressed together as the four issues overlap and the following discussion applies to all four. Appellant argues that the responsibilities of appellee include providing a safe environment for vehicles and pedestrians by both installing and maintaining proper lighting on roadways. According to appellant, proper maintenance includes updating and modernizing streetlights with new technology lights to ensure the safety of pedestrians who cross the roadway. We disagree.

In the first four matters complained of on appeal, the appellant is attempting to expand the scope of appellee’s responsibilities to include street light design, highway design, and traffic engineering. However, appellant offered no evidentiary support to suggest these were common areas of practice for appellee. Appellee PECO is a utility company that provides electricity to customers, both residential and commercial. Appellee, as a utility company, is in the business of producing power upon the request of its customers. Appellant is attributing responsibilities to appellee that cannot be reasonably expected of a utility company.

In Flatley v. Upper Darby Township, 56 Pa. D. & C. 2d 179, 181 (Pa.Com. Pl. 1972), the court determined that appellee owed no duty to pedestrians to ensure that the streetlights were in working order at all times. In Flatley, two pedestrians were walking along the side of a dark roadway at 2 a.m. when a car struck both pedestrians, killing one and injuring the other. Id. at 180. At the scene of the accident, appellee had overhead streetlights in place, but they were not operable. Id. at 180. The court in Flatley reasoned that appellee had not assumed the task of lighting the highways to the exclusion of any and all other means of avoiding the dangers lack of light may create. Id. at 184. Given the presence of the lights from vehicular traffic, the appellee could not reasonably foresee that the pedestrians in Flatley would get themselves in a position on a roadway where their protection from traffic would depend solely on the presence of overhead street lighting. Id. at 183. Thus, the assertion that the appellee had a duty to the pedestrians in Flatley to keep the streetlights operable “represents an attempt to extend [appellee’s] orbit of duty and legal liability far beyond logical and practical limits.” Id. at 183. See also Darttner v. Lamm, 5 Pa. D. & C. 2d 552 (Phila. Com. Pl. 1956) (determined that a public utility furnishing electricity for streetlights and operating and maintaining the same under a contract with a municipality did not have a duty to maintain constant and continuous electrical service).

While there has not been an abundance of Pennsylvania case law concerning this issue, the reasoning in Flatley has been upheld by appellate courts in other jurisdictions which considered the same or similar issues. For example, in Sinclair v. Dunagan, 905 F. Supp. 208 (D.N.J. 1995), a pedestrian, who was struck by a car and injured while crossing an intersection, sued the township and power company, which was the owner of the nearby street lamp that was not functioning on the night of the accident. Applying New Jersey law, the court granted summary judgment in favor of the power company. The court in Sinclair determined that the power company neither owed nor breached any duty to the pedestrian. Id. Further, the Sinclair court reasoned that there was no statute or case law that imposed upon the power company a duty to provide lighting for the streets of the township nor was there any case which imposed a common law duty on electric companies to repair or replace broken light fixtures within any particular time frame. Id. Given the large number of street lights and the frequency of motor vehicle accidents, the Sinclair court found the absence of case law telling and ruled in favor of the power company. See also Vaughn v. Eastern Edison Company, 719 N.E.2d 520 (Mass. App. Ct. 1999) (affirmed a trial court ruling that a utility company owed no duty to plaintiff, a pedestrian who was struck by an automobile while in a crosswalk, based on the inoperative conditions of the street lights on both sides of the crosswalk).

Here, unlike the streetlights in Dattner and Flatley that involved inoperable street lights at the time of the accident, the streetlights in the present matter were fully functional on the night of the accident. In both Dattner and Flatley, the utility companies did not violate any legal duty. Thus, it would be illogical to determine in the instant matter that the appellee violated its legal duty when it provided continuous electrical service to the streetlight. Despite the appellee’s continuous electrical service, the appellant aims to extend the appellee’s orbit of duty far beyond any logical limit by including lighting and highway design in its list of professional obligations. There is no legally recognized duty to pedestrians or anyone to provide continuous electricity to streetlights let alone a duty to continually update and modernize street lighting with new technology lights. What is more, appellee’s corporate designee Marie Hoey stated in her deposition testimony that appellee does not routinely go out and inspect lights in townships but rather relies on the townships, who are the customers, to come to appellee and specify what needed to be done. (N.T., July 16, 2009, at p. 41). West Norriton Township paid for the electrical power to the street light pole at the intersection of Trooper Road and Betzwood Drive. Thus, it would be reasonable for appellee to wait for the Township to request a modification to the streetlight pole or light fixture prior to acting. See Glenn v. Horan, 765 A.2d 426, 430 (Pa. Comm. 2001) (when a municipality installs a traffic control device, the municipality may be held liable for negligently maintaining the traffic control). As stated by the Township corporate designee Thomas Cignalia in his deposition testimony, the Township never requested appellee change the light bulb or light fixture at the subject intersection nor did the Township ever ask appellee for advice about the brightness or the wattage of the light bulbs. (N.T., January 20,2009 at p. 19) Therefore, appellee had no reasonable basis to do anything other than replace the light bulb if necessary and ensure that the wiring and electrical output were properly maintained.

Furthermore, the appellant then attempts to place liability on the appellee by adopting the Black’s Law Dictionary definition of “maintain.” According to the Black’s Law definition, “maintain” means “to prevent a decline form existing state or condition...keep in good order, keep in proper condition...and supply with what is needed....” During discovery appellee and the Township admitted that PECO owned, possessed, and maintained the said street lights. Appellant alleges this “duty to maintain” included the responsibility to update and modernize the street light to ensure that there was proper illumination on the roadways for pedestrians. As stated previously, there is no evidentiary support for such an extensive application of the meaning of “maintain.” Appellee, as a utility company, had the obligation to ensure that it provided and maintained a safe source of electricity. Appellee did this through its contract with MJ Electric. This duty was fulfilled as there is no mention of any exposed wires on the street light pole nor was there any electrical short that would have been a fire hazard. In addition, it is an undisputed fact that the street light at the subject intersection was fully operable on the night of the accident. The appellee provided what was needed and kept the street light pole it! proper condition. Thus, appellee as a utility company and provider of electricity fulfilled its “duty to maintain” the streetlights. There was no duty to update and modernize the streetlights or its fixtures on the part of appellee. As such, appellee cannot be in breach of a duty that does not exist. Appellant failed to present evidence of any violation of a legal duty. Consequently, appellant has not established a prima facie claim for negligence against the appellee.

Regarding appellant’s fifth issue, subparts (a) and (f) have been addressed in the previous discussion while subparts (b) - (e) address the discovery responses of appellee. Appellant attempts to raise an issue of fact based on the objections raised by the appellee in its discovery responses. As a preliminary matter, it is a party’s right to preserve its objections to discovery that is overly broad, cumulative, or burdensome. See McGovern v. Hospital Services Ass’n of Northeastern Pennsylvania, 785 A.2d 1012, 1018-19 (Pa. Super. 2001) (discussing the waiver of discovery objections for non-timely assertion). Appellant asserts there is a genuine issue of material fact as to whether: (b) West Norriton Township or appellee determined the type of light, or the particular brightness, or wattage of the lights, or lumen level for the street lights; (c) whether West Norriton Township or appellee made the decision as to the brightness of the bulbs at or near the intersection of Trooper Road and Betzwood Drive when the bulbs were replaced in 2002 and 2006. In answers to the interrogatories, appellee responded that its investigation of the issue was continuing and not complete. Appellant contends that appellee’s response to the interrogatories is enough to establish genuine issue of material fact. However, it was the Township, as the customer, who paid monthly utility bills from appellee. (N.T., January 20, 2009, at p. 21) According to Township Public Works Director Thomas Cignalia, all issues relating to the street lights were referred to appellee. (N.T., January 20, 2009 at p. 21) Prior to the accident, appellee received no notice from its customer that there was any problem or maintenance request concerning the streetlight at the intersection of Trooper Road and Betzwood Drive. (N.T., January 20, 2009 at p. 19) What is more, the streetlight was fully functional both before and on the night of the accident. Appellee cannot reasonably be expected to repair or maintenance an electrical problem where none existed.

The idea that any utility company would make changes to a light fixture or light bulb without any input from the paying customer is untenable. There is case law supporting the position that a utility company does not have a legal duty to provide continuous electrical service to pedestrians. See Flatley, 56 Pa. D. & C.2d at 181. However, the appellant asserts without the guidance of any case law or statute that a utility company has the obligation to modify a fully functional streetlight without any complaint from the customer. We find appellant’s position unpersuasive. Any disputed issues of fact should be submitted to the jury; however, it is within the discretion of the court to determine the presence or absence of a legal duty and breach thereof in a claim of negligence. The court correctly determined that the appellee did not have a legal duty to appellant where the appellant failed to present any supporting case law or statute to the contrary.

Also, the appellant maintains the court erred in not determining there were genuine issues of material fact concerning (d) whether West Norriton Township ever asked for advice from appellee concerning what light should be installed on the streetlight pole at the subject intersection in view of the fact that appellee had to object to this interrogatory. However, the Township Director of Public Works and Code Enforcement Thomas Cignalia testified during his deposition that he never requested any guidance from appellee concerning the wattage and brightness of the streetlight bulb. (N.T. January 20, 2009, at p. 16) Given the lack of any request from the Township for a change to the street lighting, there could not be an undertaking by the appellee to redesign the lighting. Thus, there can be no breach of a duty where there was never any undertaking. Based on the testimony of Mr. Cignalia, it is evident that appellant had no duty to update and modernize the street lights at the subject intersection. As such, the court correctly determined appellant had not established a prima facie case for negligence against appellee.

Finally, in subpart (e) of appellant’s fifth issue, appellant claims the court erred in not determining there were genuine issues of fact concerning whether the appellee ever provided any guidance or advice to West Norriton Township about what lumen light should be installed on the street light pole at the intersection of the accident. This argument fails for reasons similar to those mentioned in the former discussion of subpart (d). The appellee never provided any guidance or advice to the Township because the Township never requested any guidance nor did it file any complaints with appellee. The appellant is in the business of providing electricity to customers. The appellee has not held itself out as providing any other services, and the appellant has provided no evidence to indicate the appellee had such a responsibility.

CONCLUSION

Based on the foregoing, the undersigned respectively requests that the decision to grant plaintiff’s motion for summary judgment be affirmed.


author: MOORE, J,

text:
    Mid-Continent Insurance Co. v. Neves Construction, Inc.

      January 3, 2011—
    C.P. of Montgomery County,
    no. 09-43806.

      Chester F. Darlington, for plaintiff.

      Christina Plush, for defendant.
   MOORE, J,

I. FACTS AND PROCEDURAL HISTORY:

The issue presented on appeal is whether this court properly granted Mid-Continent Insurance Company’s (hereinafter “the plaintiff’) motion for summary judgment in its action for declaratory judgment against Neves Construction, Inc., et al (hereinafter “the defendants”).

The plaintiff filed this action seeking a judicial declaration relieving it from any duty to defend or indemnify under a commercial general liability insurance policy that it provided to defendant Neves Construction. The policy contained the following provisions, exclusions and terms, in pertinent part:

SECTION I- COVERAGES

COVERAGE A BODILY INJURY AND PROPERTY DAMAGE LIABILITY

1. Insuring Agreement
a. We will pay those sums that the insureds become legally obligated to pay as damages because of “bodily injury” or “property damage” to which the insurance applies. We will have the right and duty to defend the insured against any “suit” seeking those damages. However, we will have no duty to defend the insured against any “suit” seeking damages for “bodily injury” or “property damage” to which this insurance does not apply. We may, at our discretion, investigate any “occurrence” and settle any claim or “suit” that may result.
b. This insurance applies to “bodily injury” or “property damage” only if:
i. The “bodily injury” or “property damage” is caused by an “occurrence” that takes place in the “coverage lerritory”;

The insurance policy defines an “occurrence” as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.”

The instant litigation stems from an underlying action filed by Nicolaos and Rachel Zoubroulis. The underlying Zoubroulis complaint alleges property damage arising from the faulty construction of their residential property by A.E. Scena Construction, the general contractor and builder. A.E. Scena Construction filed a joinder complaint against numerous additional parties, including Neves Construction, a carpentry sub-contractor. Scena’s joinder complaint alleges the following acts of faulty workmanship by defendant Neves:

The framing installed by Neves was defective in that Neves incorrectly installed the structural trusses underneath the second floor of plaintiff’s residence and underneath part of the first floor of plaintiff’s residence as well as incorrectly installing certain walls that were out of plumb and a bow window at plaintiff’s residence.

The claims against defendant Neves Construction in the underlying litigation were submitted to plaintiff Mid-Continent Insurance Company for a coverage analysis. Pursuant to a review of the facts and circumstances of the case, the plaintiff concluded that the claims fell outside the coverage provided by the policy. Consequently, Mid-Continent Insurance Company initiated an action seeking a judicial declaration that it did not owe a duty to defend or indemnify Neves Construction in connection with the Zoubroulis lawsuit. The plaintiff subsequently filed the instant motion for summary judgment.

After reviewing the record and hearing oral argument on the motion for summary judgment, this court concluded that plaintiff Mid-Continent was not obligated to defend or indemnify Neves Construction with regard to the Zoubroulis claim. Accordingly, by an order dated October 29, 2010, this court granted the plaintiff’s motion for summary judgment. The defendants now appeal this court’s determination.

II. DISCUSSION

Any party may move for summary judgment as a matter of law after the relevant pleadings are closed “whenever there is no genuine issue of any material fact as to a necessary element of the cause of action or defense which could be established by additional discovery or expert report.” Pa. R.C.P. 1035.2. A trial court’s entry of summary judgment will only be reversed where it erred in concluding that either (1) no genuine issue of material fact existed; or (2) the moving party was entitled to judgment as a matter of law. Phillips v. Cricket Lighters, 576 Pa. 644, 651, 81 A.2d 1000, 1004 (Pa. 2003).

The existence of an insurer’s duty to defend or indemnify are questions of law that may be decided on a motion for summary judgment in a declaratory judgment action. See Sharpe v. St. Luke s Hospital, 573 Pa. 90, 96, 821 A.2d 1215, 1219 (Pa. 2003); Lebanon Coach Co. v. Carolina Cas. Ins. Co., 675 A.2d 279, 283 (Pa. Super. 1996). An insurer’s duty to defend arises “whenever the complaint filed by the injured party may potentially come within the coverage of the policy.” Wilcha v. Nationwide But Fire Ins. Co., 887 A.2d 1254, 1258 (Pa. Super. 2005). However, “only allegations contained within the underlying complaint pertaining to injuries which are either actually or potentially within the scope of the insurance policy obligate the insurer to defend the insured.” Erie Insurance Exchange v. Claypoole, 673 A.2d 348, 355 (Pa. Super. 1996).

In the present case, Seena’s joinder complaint in the underlying Zoubroulis litigation alleges that Neves Construction improperly installed framing, structural trusses and certain walls, causing damage to the Zoubroulis’ home. Neves’ insurance policy does not provide coverage for faulty workmanship. The insurance policy at issue is an occurrence-based liability policy which does not provide coverage for wrongful acts.

Under controlling Pennsylvania law, the construction defect claims alleged against Neves Construction do not constitute “occurrences” as defined by the insurance policy. See Kvaerner Metals Division of Kvaerner U.S., Inc. v. Commercial Union Ins. Co., 589 Pa. 317, 908 A.2d 888 (Pa. 2006) (claims of faulty workmanship do not constitute an accident or an occurrence in an insurance policy). Indeed, the Superior Court addressed a factually indistinguishable case with nearly identical policy language in Millers Capital Ins. Co. v. Gambone Brothers Development Co., Inc., 941 A.2d 706 (Pa. Super. 2007). In Millers, home buyers sued a developer and its subcontractors for faulty workmanship in the construction of their homes. Id. at 708. Similar to the instant case, the commercial general liability insurer in Millers denied coverage for the claims of faulty workmanship based on the following policy language:

A. We will pay those sums that the insured becomes legally obligated to pay as damages because of “bodily injury” or “property damage” to which this insurance applies...
B. This insurance only applies to “bodily injury” and “property damage” only if:
1. The “bodily injury” and “property damage” is caused by an “occurrence”...
2. The “bodily injury” and “property damage” occurs during the policy period; Id. at 711.

The policy in Millers defined an “occurrence” as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” Id.

In the Millers case, the court of common pleas held that the insurer had no duty to defend or indemnify the developer against a faulty workmanship claim under the language of the insurance policy and the Superior Court affirmed the trial court’s ruling on appeal. Id. at 718. In so holding, the Superior Court reiterated the reasoning applied by the Supreme Court in Kvaerner, specifically, that the terms “occurrence” and “accident” in a commercial general liability policy contemplated a degree of fortuity that simply does not accompany faulty workmanship. Id. at 713. See also Kvaerner, 908 A.2d at 899 (“We hold that the definition of ‘accident’ required to establish an ‘occurrence’ under the policies cannot be satisfied by claims based upon faulty workmanship. Such claims simply do not present the degree of fortuity contemplated by the ordinary definition of ‘accident’ or its common judicial construction in this context.”). Thus, the Millers case firmly establishes that faulty workmanship claims do not constitute “occurrences” within the meaning of a general liability policy. 941 A.2d at 713.

The holdings in Kvaerner and Millers control the issue at bar. The plaintiff’s claim that Neves Construction and its subcontractors defectively installed structural trusses and certain walls are clear examples of faulty workmanship. The relevant policy language in this case is nearly identical to the policy language at issue in Millers, which held that the general liability policy excluded coverage for faulty workmanship. The defendants argument to distinguish the facts of the present case from Millers was unpersuasive.

Furthermore, there is no coverage for count II of the amended joinder complaint because an alleged “breach of contract” does not constitute an “occurrence.” Under the clear weight of authority of this commonwealth, general liability policies do not obligate an insurer to defend or indemnify an insured for breach of contract claims. See Freestone v. New England Log Homes, Inc., 819 A.2d 550, 553 (Pa. Super. 2003) (“it is clear that Pennsylvania law does not recognize the applicability of a general liability policy to [claims for breach of contract].”). See also Redevelopment Auth. of Cambria County v. International Ins. Co., 685 A.2d 581 (Pa. Super. 1996) (en banc) (“The purpose and intent of [a general liability] insurance policy is to protect the insured from liability for essentially accidental injury to the person or property of another rather than coverage for disputes between parties to a contractual undertaking.”). Therefore, Mid-Continent had no duty to defend or indemnify the defendants in the underlying Zoubroulis lawsuit. Accordingly, this court properly granted mid-continent’s motion for summary judgment.

III. CONCLUSION

Based upon the foregoing analysis, this court’s determination was proper and should be affirmed.