author: CORSO, J.,

text:
    Center Point Farm Homeowners’ Association v. Gambone Bros. Development Co.

      Michael Yanoff, for defendants.

      John A. Guernsey, for plaintiffs.
    C. Dale McClain, for plaintiffs.

      Paula J. McDermott, for defendants.
    December 30, 2009
   CORSO, J.,

Plaintiff, Center Point Farm Fiomeowners’Association, appeals from the order of October 22, 2009, which denied its motion for summary judgment, and granted the competing joint motion for summary judgment of defendants, Gambone Bros. Development Company and Superior Water Company Inc. As set forth more fully below, the order should be affirmed.

I. FACTUAL BACKGROUND

On April 30, 1996, Gambone prepared and filed a declaration, the purpose of which was to restrict property that it was developing into a residential community of 173 townhomes in Worcester, Montgomery County, Pennsylvania. Article 4.1 of the declaration, entitled “Voting rights,” relevantly defines Class A members of the homeowners’ association as “all owners with the exception of the declarant. . . .” Class A members are entitled to one vote for each lot owned. Gambone, identified as the “declarant” is defined by Article 4.1 as the sole holder of Class B membership. At all times relevant, the Class B member was entitled to three votes for each unsold lot to which it held title.

In its recitals, the declaration states that:

“Notwithstanding the foregoing, no provision in this declaration shall be construed as to prevent or limit declarant’s rights to complete the development of the property and construction of improvements thereon.
55

Article 2.1(D) of the declaration grants easements of enjoyment to homeowners, subject to the following provision:

“The right of declarant, its successors and assigns, to have an easement over any portion of the property, including any lot, for the purpose of access, ingress and egress for the maintenance and repair of... water lines, other utilities and common service lines. . . . Declarant hereby reserves for the benefit of declarant and for the benefit of each and every private utility or municipal entity which may service the property, their agents and employees, an easement across, over, through and under the common area and each lot for the purposes of ingress and egress, installation, replacement, repair and maintenance of all utility and service lines and systems, including but not limited to water. . . .” Declaration, article 2.1(D).

Most relevant to this lawsuit, section 14.5 of the declaration states:

11 This declaration may be amended only by the affirmative vote or written consent of the owners holding not less than 61 percent of the voting power of both classes of members; provided, however, that the prior written approval of at least 67 percent of all first mortgagees must be obtained also, before article 12 may be amended. Notwithstanding the foregoing, until the closing upon the sale of the first lot in the property, declarant shall have the right to terminate or modify this declaration by recordation of a supplement hereto setting forth such termination or modification, in accordance with the applicable statutes of the Commonwealth of Pennsylvania. ...” Declaration, section 14.5. (emphasis added)

Section 14.8 of the declaration states that:

“Declarant expressly reserves for itself, its successors and assigns, any public or private utility entity an easement for access, ingress and egress over any lot and over the common area for the purpose of connecting to the existing storm and sanitary sewer lines, water lines, other utilities and all other improvements upon the property and for the installation, replacement, repair and maintenance of such utility and service lines and systems as declarant or any public or private utility may require to service and benefit any property outside the bounds of the property encumbered hereby, the owners and users thereof.” Declaration, section 14.8.

The declaration was amended for a first time on September 20, 1996. The first townhouse in the community was sold, subject to the recorded subdivision plan and declaration, on October 29, 1996.

The following month, Gambone and its subsidiary, Superior Water, executed a right-of-way and water facilities easement agreement to allow for the construction, installation, operation and maintenance of a water system for the townhouse community. To further effectuate Superior Water’s provision of water service, Gambone amended the declaration a second time onNovember 25, 1996, a third time on September 2, 1997 and a fourth time on May 12,1998. At the time of the second amendment, Gambone owned 516 of 517 total votes, at the time of the third amendment, it owned 450 of473 total votes, and at the time of the fourth amendment, it owned 372 of 421 total votes. (See plaintiff’s motion for summary judgment, exhibit 14.) With 75 percent of the lots having been sold by January 7,2000, control of the homeowners community was turned over to plaintiff at a meeting on February 12, 2000. (Id.)

II. PROCEDURAL HISTORY

Displeased with rates being charged by Superior Water, plaintiff filed a complaint in declaratory judgment in December 2002, alleging, inter alia, that Gambone lacked the authority under the declaration to grant its subsidiary, Superior Water, the right to provide water service to Center Point Farm. Plaintiff further claimed that another water service provider, North Penn Water, is available to service the area at cheaper rates. The complaint demanded the following relief:

“(A) Declare the grant of the water easement to Superior Water Company Inc. by Gambone Bros. Development Co. illegal, improper and unlawful, and a violation of the original declaration and to further declare that the grant of the water easement is null, void and of no effect.
“(B) Declare that the second, third and fourth amendments to be illegal, improper and unlawful [ly] undertaken in violation of the original declaration and declare the second, third and fourth amendments [to] be null, void and of no effect.
“(C) Grant such other good and equitable relief as your honorable court may deem just and appropriate under the circumstances.” (Complaint, “Wherefore” clause.)

After preliminary objections to the complaint were overruled, defendants filed answers with new matter, including, inter alia, the following affirmative defenses: (1) the amendments to the declaration were approved in conformity with the terms of the declaration; (2) the Pennsylvania Public Utilities Commission, and not this court, has exclusive jurisdiction over the issues raised by plaintiff; and (3) statute of limitations and laches defenses.

On April 2, 2009, plaintiff filed a motion for summary judgment. Defendants filed separate responses on May 18, 2009, and filed a joint motion for summary judgment on July 27, 2009.

In their joint motion for summary judgment, defendants argued that Gambone had the authority under section 14.5 of the declaration to enact the amendments, and that Superior Water has easement rights on the property to run water lines. They further argued that this court lacks subject matter jurisdiction because the PUC has the exclusive authority to regulate water service and rates, and that both North Penn Water and the individual homeowners are indispensable parties whom plaintiff has failed to join. Defendants also made a statute of limitations argument.

In its answer to defendants’ motion, as well as in its own motion for summary judgment, plaintiff argued that the amendments were not passed in accordance with the procedures set forth in the declaration and by-laws, that the PUC’s authority is not implicated by plaintiff’s attempt to invalidate the amendments to the declaration, that neither North Penn Water, nor the individual homeowners, are indispensable parties, and that its claims are timely.

After considering the record, and following oral argument, at which counsel stated their belief that no issues of triable fact remain, the court issued an order on October 22, 2009, granting defendants’ joint motion for summary judgment, and denying plaintiff’s cross-motion. The stated reason for the ruling was the court’s determination that “the plain language of section 14.5 of the declaration unambiguously authorized Gambone Bros. Development Company to grant the challenged easements and to make the challenged amendments to the declaration.” This timely appeal followed.

III. ISSUES

In a concise statement of matters complained of on appeal, plaintiff raises seven issues, which are rephrased as follows:

(1) Whether the court erred in granting the j oint motion for summary judgment, and denying plaintiff’s motion for summary judgment, where, in unilaterally adopting the second, third and fourth amendments to Center Point Farm’s original declaration and unilaterally granting the right-of-way and water easement agreement and water grant, Gambone violated plaintiff’s due process rights as provided for in the declaration and the Association’s by-laws, including, but not limited to, the due process requirements that notice be given, a meeting be held and a vote taken?

(2) Whether the court erred in granting the joint motion for summary judgment, and denying plaintiff’s motion for summary judgment, where Gambone engaged in improper self-dealing by granting its family-owned water company exclusive water rights to the Center Point Farm residential community without the required consideration, consent and/or approval of the Association or its voting membership?

(3) Whether the court erred in granting the joint motion for summary judgment, and denying plaintiff’s motion for summary judgment, where, Brian J. Hanson, a Gambone employee who was appointed president of the Association by Gambone, acted in bad faith and in the best interests of his employer Gambone when he approved the second, third and fourth amendments to the declaration and granted the easement and water grant purportedly on behalf of the Association?

(4) Whether the court erred in granting the j oint motion for summary judgment, and denying plaintiff’s motion for summary judgment, where section 10.9.E. of the declaration clearly and unambiguously barred Gambone from unilaterally granting easements or rights-of-way to utility companies after the first lot was sold?

(5) Whether the court erred in granting the joint motion for summary judgment, and denying plaintiff’s motion for summary judgment, where the declaration clearly and unambiguously required the affirmative vote or written consent of unit owners holding not less than 67 percent of the voting power of both the Class A voting membership and the Class B voting membership, and this required vote was not obtained with regard to the second, third and fourth amendments to Center Point Farm’s original declaration or the easement and water grant?

(6) Whether the court erred in failing to construe the interpretation of section 14.5 of the declaration against Gambone as the drafter?

(7) Whether the court erred in granting summary judgment in favor of the defendants where the defendants asserted that other declarations for other developments purportedly contain language similar to section 14.5 of the declaration, even though there was no evidence of this contention in the record and the only declaration before the court was the one drafted and executed by Gambone?

IV. DISCUSSION

“Generally, a clear and unambiguous contract provision must be given its plain meaning. . . .” J.F. v. D.B., 897 A.2d 1261, 1279 (Pa. Super. 2006) (quoting Eichelman v. Nationwide Insurance Co., 551 Pa. 558, 563, 711 A.2d 1006, 1008 (1998)). The interpretation of an unambiguous contract is left for the court to decide as a matter of law. Trizechahn Gateway LLC v. Titus, 601 Pa. 637, 976 A.2d 474, 483 (2009) (citing Kripp v. Kripp), 578 Pa. 82, 91, 849 A.2d 1159, 1163 (2004)). An ambiguity exists where a contract is “reasonably susceptible” of different constructions. Trizechahn Gateway, 976 A.2d at 483. (citations omitted) No ambiguity exists if one of two proffered meanings is unreasonable. Murphy v. Duquesne University of the Holy Ghost, 777 A.2d 418, 430 (2001). A reviewing court will not “distort the meaning of the language or resort to a strained contrivance in order to find an ambiguity.” Trizechahn Gateway, 976 A.2d at 483 (quoting Madison Construction Company v. Harleysville Mutual Insurance Company, 557 Pa. 595, 606, 735 A.2d 100, 106 (1999)).

In the fifth, and most pertinent, issue raised on appeal, plaintiff contends this court erred by concluding that the declaration authorized Gambone to unilaterally pass the second, third and fourth amendments and related easements. Section 14.5 clearly and unambiguously authorized Gambone to take the actions it did because, at all times relevant, it held “not less than 67 percent of the voting power of both classes of members.” Plaintiff would have this court read the word “both” in section 14.5 as meaning “each,” thus requiring the affirmative vote of at least 67 percent of Class A members and at least 67 percent of the Class B member. To read the provision this way, however, would permit the absurd scenario whereby a single Class A member could have halted the development of the entire residential community. Plaintiff’s attempt to cast the declaration in this way requires an “unreasonable” reading of the document, one that is inconsistent with its plain language.

The finding that section 14.5 unambiguously authorized Gambone to take the actions it did, renders moot issues one, two and three of plaintiff’s concise statement. Gambone, while holding an overwhelming majority of possible votes, had the discretion to pass the challenged amendments and easements. Moreover, any attempt by plaintiff to argue now that the passage of the challenged amendments and easements ran afoul of the by-laws fails, as noted above,, in the absence of a claim in the complaint related to a by-law violation.

In its fourth issue on appeal, plaintiff asserts that section 10.9E of the declaration barred Gambone from unilaterally granting easements or rights-of-way after the first lot was sold. Section 10.9E provides, in relevant part, that:

“Declarant or its successors or assigns will undertake the work of constructing townhouses and developing all of the lots included with the property and any annexation thereto. The completion of that work and sale, rental and other disposal of townhouses is essential to the establishment and welfare of said property as a residential community. As used in this section and its subparagraphs, the words ‘its successors and assigns’ specifically do not include purchasers of lots improved with completed townhouses. In order that said work may be completed and the property be completed and the property be established as a fully occupied residential community as rapidly as possible, no owner nor the association shall do anything to interfere with, and nothing in this declaration shall be understood or construed to:
“(E) Prevent declarant, at any time prior to acquisition of title to a lot by an owner, from granting additional licenses, reservations and rights-of-way to himself, to utility companies, or to others as may from time to time be reasonably necessary to the proper development and disposal of the property.”

The above-quoted provision is intended to ensure that individual property owners do nothing to interfere with the proper completion of the residential development, plaintiff reads this provision as requiring Gambone, after the conveyance of a single lot to a single owner, to obtain the affirmative vote of that owner before granting an easement to, inter alia, a utility company. Once again, to read this provision as plaintiff does would give a single homeowner the power to frustrate the entire development. Consequently, plaintiff’s reading of the provision is illogical, and at odds with the overriding purpose of the provision, which is to effectuate the speedy completion of the residential community.

In its sixth issue on appeal, plaintiff contends this court erred in failing to interpret section 14.5 against Gambone as the drafter of the provision. This court finds no ambiguity exists in section 14.5. As such, the doctrine of contra proferentum does not apply.

With regard to plaintiff’s final issue on appeal, this court did not base its decision upon any statement by Gambone that other declarations contain language similar to that found in section 14.5. As such, this claim of error lacks merit.

IV. CONCLUSION

Based upon the foregoing, the order of October 22, 2009, should be affirmed.

      . Because no lots had been sold at this time, plaintiff does not challenge the propriety of the first amendment.

      . Superior Water, a certified public utility, has provided water service to the townhouse community pursuant to a Certificate of Public Convenience granted by the Pennsylvania Public Utilities Commission on or about October 18, 1996.

      . Nowhere in the complaint did plaintiff raise a challenge to any of the amendments or easements on the basis of an alleged violation of the Center Point Farm by-laws.

      . As noted above, plaintiff did not allege in the complaint that the challenged easement and amendments were passed in violation of the by-laws; rather it appears to raise this argument for the first time in its motion for summary judgment. As such, any argument regarding alleged by-law violations are not properly before the court.


source: Caselaw Access Project

author: SPRECHER, J,

license: Public Domain

text:
    Wink v. Magrowski

      E. Michael Zubey, Jr. and RichardL. Guida, for plaintiffs.

      Osmer S. Denting, for defendants.
    December 10, 2009
   SPRECHER, J,

Defendants appeal the order dated October 30, 2009, which denied their petition to open and strike the default judgment entered against them on August 13, 2009. This opinion is filed pursuant to Pa.R.A.P. 1925.

FACTS

On May 19, 2009, plaintiffs, Jeffrey Wink, Marcia Wink, David Roberts and Nancy Roberts, filed a complaint against defendants, Steven Magrowski and Lori Magrowski, alleging that the defendants refused to pay for the repair of an easement. Defendant, Lori Magrowski, received the complaint on June 5, 2009, when she picked it up at the sheriff’s department. Steven Magrowski was served on June 17, 2009.

On June 11,2009, defendants had a consultation with John Grenko, Esquire. Defendants assumed that Attorney Grenko was representing them because he had given them advice which they had followed on obtaining estimates for the lanes. Mr. Grenko spoke to plaintiffs’ attorney, E. Michael Zubey, Esquire, prior to July 10,2009, and told Mr. Zubey that he was unsure if he would be representing defendants. On July 10, 2009, Mr. Grenko again spoke to Mr. Zubey and told him that he needed additional time to prepare an answer.

On July 21, 2009, Mr. Zubey filed and served on defendants an important notice dated July 20, 2009, that plaintiffs would file for a default judgment if no action was taken by defendants within ten days from the date of the notice. On July 22, 2009, Mr. Grenko wrote to defendants that he had received a courtesy copy of the notice of intent to take a default judgment in their case from Mr. Zubey and that he would discuss matters with them on July 27,2009. Mr. Grenko met with defendants on July 27, 2009. Mr. Grenko then prepared an entry of appearance on July 31, 2009, which he filed on August 3,2009. During a telephone conversation prior to August 13, 2009, with Mr. Zubey, Attorney Grenko informed Mr. Zubey that he had begun the preparation of the answer and hoped to get it filed shortly. Mr. Grenko did not remember if this conversation had occurred on August 3, 2009, as Mr. Zubey suggested. On August 11, 2009, defendants paid Mr. Grenko a retainer for legal services. On August 13, 2009, at 12:31 p.m. plaintiffs filed a praecipe to enter a default judgment against defendants. Mr. Grenko filed an answer with new matter and counterclaim at 2:12 p.m. that same day following a telephone conversation with Mr. Zubey. Defendants received notice of the default judgment by mail on September 3, 2009.

Defendant, Lori Magrowski, testified that she had called Mr. Grenko several times and that he had told her to calm down because they had plenty of time to respond to the pleadings. Defendants filed their petition to open and strike the default judgment on September 8, 2009.

Based on the uncontroverted facts, this court denied defendants’ petition. Defendants filed a timely appeal.

ISSUES

Defendants raise the following two issues in their concise statement of errors complained of on appeal:

(1) Did this court err in denying the petition to open/ strike the default judgment?

(2) Was the Berks County Prothonotary’s failure to mail promptly the default judgment (judgment entered on August 13, 2009, but not mailed until September 1, 2009) indicative of the breakdown in the court’s operation, prejudicing the defendants and warranting the opening of the default judgment?

DISCUSSION

Defendants’ first contention is that this court erred in denying their petition to open/strike the default judgment. This complaint is without merit. Generally speaking, a default judgment may be opened if the moving party has (1) promptly file a petition to open the default judgment, (2) provided a reasonable excuse or explanation for failing to file a responsive pleading, and (3) pleaded a meritorious defense to the allegations contained in the complaint. Moreover, the trial court cannot open a default judgment based on the “equities” of the case when the defendant has failed to establish all three of the required criteria. U.S. Bank N.A. v. Mallory, 982 A.2d 986 (Pa. Super. 2009).

This court found that defendants promptly filed a petition to open judgment. Thus, defendants met the first condition for opening a judgment.

The second prong is that the petition must provide a reasonable excuse for failing to file a responsive pleading. Defendants assert that their former attorney’s inaction is the cause of the entry of the default judgment. However, an attorney’s dilatoriness, failure to act with knowledge of the implications, or deliberate decision not to defend are inadequate reasons for his or her failure to answer the complaint and are insufficient to obtain the opening of a default judgment. Davis v. Burton, 365 Pa. Super. 160, 529 A.2d 22 (1987).

In the case sub judice, Attorney Grenko simply did not file a timely answer. Even if Mr. Grenko was unwilling to file an answer until he had received a retainer, he still was tardy in filing an answer. He received the retainer on August 11, 2009. He could have immediately filed an answer. He knew that time was of the essence and the answer was already in the process of being written. This is not a case of mistake or oversight, but rather, an inexcusable failure to act by one who knew the implication of such a failure. Additionally, defendants themselves received the notice of intent to take a default judgment and knew at that time that a default judgment would be taken in ten days.

Therefore, this court denied the petition to open because defendants did not provide a reasonable excuse or explanation for filing to file a responsive pleading. Since there was no reasonable excuse for not filing an answer timely, this court did not need to address the issue of a meritorious defense or the “equities” of the case.

Defendants’ second issue is whether the prothonotary’s failure to mail promptly the default judgment was a breakdown in the court’s operation, prejudicing defendants and warranting the opening of the default judgment. This issue is meritless. Any breakdown in the court system occurred after the entry of the default judgment and did not impact defendants’ failure to file a timely response. This court determined that the petition to open the default judgment was filed timely so defendants were not prejudiced by the delayed notice of the entry of the default judgment.

For the foregoing reasons, this court submits that its order should be sustained and the appeal dismissed.


author: NASATIR,

text:
    In re Patete Petition for Reinstatement

      Disciplinary Board Docket no. 99 D.B. 2001.
    October 21, 2009
   NASATIR,

Member,

Pursuant to Rule 218(c)(5) of the Pennsylvania Rules of Disciplinary Enforcement, the Disciplinary Board of the Supreme Court of Pennsylvania submits its findings and recommendations to your honorable court with respect to the above captioned petition for reinstatement.

I. HISTORY OF PROCEEDINGS

By order of the Supreme Court of Pennsylvania dated February 8, 2002, Anthony Richard Patete Jr. was disbarred on consent from the practice of law. Mr. Patete filed a petition for reinstatement on May 19,2008. Office of Disciplinary Counsel filed a response to petition for reinstatement on August 4,2008 and stated its concerns about certain issues.

A reinstatement hearing was held on October 31,2008 and December 19, 2008, before a District II Hearing Committee comprised of Chair Cathy A. Wilson, Esquire, and Members Ethan N. Halberstadt, Esquire, and John P. Elliott, Esquire. Petitioner appeared pro se. In addition to his own testimony, petitioner offered the testimony of six witnesses. Office of Disciplinary Counsel offered four witnesses.

Following the submission of briefs by the parties, the Hearing Committee filed a report on May 8, 2009 and recommended that the petition for reinstatement be denied.

Petitioner filed a brief on exceptions on May 29,2009 and requested oral argument before the Disciplinary Board.

Office of Disciplinary Counsel filed a brief opposing exceptions on June 15, 2009.

Oral argument was held before a three-member panel of the Disciplinary Board on July 1, 2009.

This matter was adjudicated by the Disciplinary Board on July 18, 2009.

II. FINDINGS OF FACT

The board makes the following findings of fact:

(1) Petitioner is Anthony Richard Patete Jr. He was born in 1961 and was admitted to the practice of law in Pennsylvania in 1986. He currently resides in Florida. Petitioner is subject to the jurisdiction of the Disciplinary Board of the Supreme Court of Pennsylvania.

(2) On February 8, 2002, petitioner was disbarred on consent by order of the Supreme Court of Pennsylvania.

(3) The basis for petitioner’s disbarment was his misuse, misappropriation, commingling and conversion of funds in excess of $40,000 from the estate of Julia Mascantonio; misuse, misappropriation, commingling and conversion in excess of $133,000 from the estate ofMaiy Dunlap; and his violation of a Supreme Court order by concealing evidence of his conversions in the Dunlap estate when he failed to reveal the existence of the estate account in response to a validly issued subpoena.

(4) Subsequent to petitioner’s disbarment, in the summer of 2002 he and his family relocated to Florida.

(5) For approximately two years after the move, petitioner stated in his reinstatement questionnaire and in his testimony at the hearing that he was unemployed and a stay-at-home father for his two minor sons.

(6) Petitioner’s tax returns reveal that for each and every year that he has resided in Florida, he has earned income as a “legal consultant.”

(7) From 2004 until the time of the hearing, petitioner has been employed as a faculty member at Keiser University in Sarasota, Florida. Petitioner teaches paralegal studies, including ethics.

(8) Petitioner has not divulged his disbarred status to Keiser University, as he claims he was never asked.

(9) No witnesses associated with Keiser University, other than petitioner, testified at the reinstatement hearing.

(10) Petitioner had filed a petition for reinstatement prior to the instant petition, but withdrew it because he learned that the Pennsylvania Lawyers Fund for Client Security had awarded a claimant, Charles Doyle, the sum of $25,000, and petitioner was not eligible for reinstatement until the fund received reimbursement for the award.

(11) Petitioner requested a reconsideration of the award, and after a hearing held on January 25,2008, the board for the fund reduced petitioner’s obligation from $25,000 to $10,000, although the board did not reduce Mr. Doyle’s award.

(12) On or around April 24, 2008, petitioner repaid the fund $11,997.26 representing payment of the claim plus interest.

(] 3) Charles Doyle, the fund claimant, appeared at the reinstatement hearing and testified concerning petitioner’s representation.

(14) In May of 2001, Mr. Doyle retained respondent to represent his son, Michael Doyle, in connection with criminal charges pending against Michael in Delaware County, Pennsylvania.

(15) Mr. Doyle initially paid petitioner $4,500 in May 2001 to cover the costs of Michael’s preliminary hearing and bail hearing.

(16) Petitioner sent Mr. Doyle a letter dated July 20, 2001 regarding his fees.

(3.7) An emergency temporary license suspension was entered against petitioner on July 19,2001, the day before petitioner provided Mr. Doyle with the fee agreement. The suspension was not lifted until August 21, 2001.

(18) Petitioner did not inform Mr. Doyle of the temporary suspension.

(19) Mr. Doyle would not have paid petitioner to take his son’s case had he known of the temporary suspension.

(20) Petitioner signed a resignation statement from the bar of Pennsylvania on January 15, 2002.

(21) By letter dated January 16,2002, the day after he signed his resignation statement, petitioner sent Mr. Doyle another fee agreement for the purpose of representing Michael in connection with a New Jersey criminal matter.

(22) Petitioner was not licensed to practice law in New Jersey at the time he provided Mr. Doyle with the fee agreement and Mr. Doyle understood that New Jersey counsel would need to be engaged. Nonetheless,. Mr. Doyle paid petitioner for the representation with the understanding that fee monies would be paid to the New Jersey lawyer.

(23) Mr. Doyle identified two cancelled checks, one dated January 29, 2002 for $2,500 and a second dated March 2, 2002 for $2,500 that he paid directly to petitioner for the New Jersey matter.

(24) Petitioner accepted a fee from Mr. Doyle nearly one month after the Supreme Court entered its order providing for petitioner’s disbarment.

(25) Petitioner failed to inform Mr. Doyle in writing of his disbarment.

(26) Petitioner failed to inform Mr. Doyle in writing that he could no longer represent Michael in his criminal matter in Pennsylvania, which was still pending and had yet to go to trial as of the date petitioner was disbarred.

(27) In June 2002, Mr. Doyle learned for the first time from Robert Meingossner, Esquire, that petitioner had been disbarred and could no longer represent Michael. Mr. Meingossner is the attorney who had handled Michael Doyle’s New Jersey matter and agreed to temporarily handle the Pennsylvania matter.

(28) Mr. Meingossner testified at the reinstatement hearing.

(29) In the summer of2001, Mr. Meingossner became a tenant in petitioner’s Erdenheim office, after petitioner offered to rent him space, telling Mr. Meingossner that he was considering retiring and moving to Florida.

(30) Shortly after moving into the office in June of 2001, Mr. Meingossner became aware that disciplinary action had been instituted against petitioner.

(31) Mr. Meingossner was still renting space in petitioner’s office at the time of petitioner’s disbarment.

(32) Mr. Meingossner observed that petitioner’s attitude at the time of his disbarment with respect to his obligations was one of defiance: “the exact word that I recall him saying was, ‘f**k the board. I don’t have any clients to notify. I’ve transferred them all.’”(N.T. 122.)

(33) Petitioner acknowledged that although he signed a certificate of compliance with the notice requirements, he did not send notices to any clients, as he contended that they had all been transferred to Mr. Meingossner.

(34) With respect to those files that Mr. Meingossner received from petitioner, he had the opportunity to review them and saw no written notification of petitioner’s disbarment to any client.

(35) Mr. Meingossner recalled conversations with one or more clients who did not understand why their files had been transferred to him and who had no knowledge or understanding of what had happened to petitioner.

(36) Petitioner transferred the files to Mr. Meingossner without prior notice to the clients or first obtaining any client authority for the transfer; after the transfer Mr. Meingossner had to explain to clients what his roll would be.

(37) With respect to the Michael Doyle matter, Mr. Meingossner testified that he was not paid to represent Michael in either the New Jersey or the Pennsylvania matter in 2002, although Charles Doyle had been led to believe by petitioner that petitioner would pay Mr. Meingossner from the fees Mr. Doyle has given to petitioner.

(38) Mr. Meingossner testified that in his opinion, and based on the time spent working with and for petitioner; he was not an honest person and not fit to be readmitted.

(39) Mr. Meingossner provided credible testimony.

(40) Petitioner offered the testimony of Larry Watson, a paralegal who worked in petitioner’s law office from approximately 1999 until the time of petitioner’s disbarment.

(41) Mi'. Watson testified that he had prepared letters advising both Michael Doyle and Charles Doyle of petitioner’s disbarment.

(42) On cross-examination, Mr. Watson admitted to pleading guilty to multiple crimes involving crimen falsi, including: tampering with public records and unsworn falsifications to authorities in Lancaster County in 1999; theft by deception in Lancaster County in 1999; theft of leased property in Delaware County in 1999; and in New Jersey, for passing false checks.

(43) Mr. Watson lied on the stand to the Hearing Committee, initially denying that he had presented false identification and falsely claimed to be a special investigator with the Commonwealth in connection with one of his arrests.

(44) Mr. Watson did not admit the truth of that allegation until confronted with the police criminal complaint in the matter.

(45) The Hearing Committee did not find the testimony regarding notices of disbarment sent to petitioner’s clients to be credible.

(46) Petitioner presented five character witnesses. The witnesses included Edward J. Morris, Esquire, an attorney who rented office space from petitioner; Kevin Staas, Esquire, a Florida attorney with whom petitioner owns rental property and for whom he performs paralegal services; and three personal friends, Karen Gagliardi, Gregory Gagliardi and Fred Santilli.

(47) None of the character witnesses were aware of the facts leading to petitioner’s disbarment. Some of them, including Mr. Morris, testified that petitioner claimed he could not disclose the underlying facts on the advice of counsel, or due to confidentiality rules.

(48) Petitioner testified on his own behalf.

(49) Petitioner’s explanation for his conversion of client funds was that it occurred at a time when he was defending himself in two civil lawsuits, one of which his malpractice carrier initially refused to defend, and the other which was dismissed. He used the funds to run his law practice and defend himself in those actions.

(50) After his disbarment and move to Florida, in 2004 petitioner obtained employment with Keiser University in Sarasota. He was hired as an adjunct faculty member and was a paralegal instructor. He taught all of the law classes in the paralegal program and eventually became a certified paralegal.

(51) Petitioner’s reason for seeking reinstatement is that he needs to be a member in good standing of the Pennsylvania Bar in order to continue to be a member of the faculty at Keiser University, due to new accreditation requirements.

(52) In addition to his employment at Keiser University, petitioner performed paralegal work for Kevin Staas, a Florida licensed attorney, including preparing briefs, legal memoranda and legal research.

(53) Petitioner does not intend to return to Pennsylvania to practice law, as the move would be too disruptive for his family.

(54) Petitioner completed his continuing legal education course requirements for reinstatement.

(55) Petitioner expressed remorse for his disbarment, but did not appear remorseful regarding the conduct which led to his disbarment, or the conduct following his disbarment, including but not limited to his failure to provide notice of disbarment to his clients.

(56) Petitioner’s reinstatement questionnaire contained errors and omissions.

(57) Petitioner stated on the questionnaire, as well as in his testimony, that he made restitution in full within 60 days along with interest. (Question 5(c), N.T. 39.)

(58) Petitioner’s own exhibits demonstrate that his restitution payments were made on two dates, and those dates were more than 60 days apart.

(59) When questioned about the discrepancy, petitioner refused to admit that his repeated statement about restitution was not accurate and continued to insist that restitution was made within 60 days.

(60) Petitioner claimed in his personal statement on the reinstatement questionnaire that it was not necessary for any client to file a malpractice suit against him to obtain restitution of converted funds. (Questionnaire exhibit B.)

(61) In petitioner’s 2002 tax return, he characterized the amount of restitution paid to the Dunlap estate as a “malpractice settlement” of $144,000.

(62) On cross-examination petitioner acknowledged that the Dunlap estate had filed a malpractice case, and claimed the restitution payment was property characterized as both restitution and malpractice. (N.T. 12/19/08 16-17.)

(63) Petitioner answered affirmatively to question 6(a), which asked whether he filed copies of non-litigation notices to clients with the Secretary of the Disciplinary Board, and also stated that all required notices were timely filed; but acknowledged on cross-examination that he did not provide copies of non-litigation notices to clients. (N.T. 12/19/08 17-20.)

(64) Petitioner left question 6(b) blank, which asked about notice to litigation clients.

(65) Petitioner answered “no” to question 7(a) asking whether discipline had ever been imposed by another state or federal agency. The docket from the Eastern District of Pennsylvania reflects reciprocal discipline, with notices going to petitioner in May and July of2002. Petitioner claims he did not recall receiving any notice.

(66) In response to question 10(c) asking if tax returns had been timely filed, petitioner identified only his 2005 return as late, and failed to identify his 2002 return.

(67) Petitioner failed to identify his legal consulting business in response to question 11(a) which asked for a chronological list of “occupations, jobs, business associations or other ventures of any kind whatsoever

(68) On cross-examination, petitioner took the position that he had disclosed the legal consulting business by identifying “Cengage Learning”, which is a publication company, as a source of income. Petitioner contradicted his own testimony by conceding that he had earned no income from Cengage until 2007; but his income tax returns reflect income for the legal consulting business every year from 2003.

(69) Petitioner produced no supporting documentation for the years 2003 or 2004 which would demonstrate who paid him for work he did as a “legal consultant,” how much he was paid or what work he performed, although he did testify that $2,400 of the income was paid by his brother.

(70) Petitioner admitted performing work for his brother, a doctor, which he described as finding the applicable law and handing a copy to his brother, for which he has been paid a salary of $2,400 annually. Petitioner denied this was the practice of law, but conceded that it may be reflected in a portion of the income which he described on his tax returns as “legal consulting.”

(71) Office of Disciplinary Counsel opposes reinstatement.

III. CONCLUSIONS OF LAW

(1) Petitioner’s conduct is not so egregious as to preclude reinstatement to the bar. Office of Disciplinary Counsel v. Keller, 509 Pa. 573, 506 A.2d 872 (1986).

(2) Petitioner failed to establish by clear and convincing evidence that he possesses the moral qualifications, competency and learning in the law necessary to practice law in Pennsylvania. Pa.R.D.E. 218(c)(3)

(3) Petitioner’s resumption of the practice of law would be detrimental to the integrity and standing of the bar and administration of justice, and subversive of the interests of the public. Pa.R.D.E. 218(c)(3)

IV. DISCUSSION

Petitioner seeks readmission to the bar of the Supreme Court of Pennsylvania following his disbarment for misappropriation of client funds and other dishonest conduct. For the reasons set forth below, the board concludes that petitioner has failed to meet his burden.

Petitioner’s request for reinstatement to the bar after disbarment is initially governed by the standard set forth in Office of Disciplinary Counsel v. Keller, 509 Pa. 573, 508 A.2d 872 (1986). As a threshold matter, the board must determine whether petitioner has demonstrated that his breach of trust was not so egregious that it precludes him from reinstatement.

Petitioner acknowledged misappropriating funds belonging to two estates, He took funds in the amount of $40,000 from the Mascantonio estate and $ 133,000 from the Dunlap estate. Additionally, petitioner failed to reveal the existence of an estate account in response to a validly issued Pennsylvania Supreme Court subpoena. Petitioner’s acts of misconduct involved a clear pattern of dishonesty to his clients.

While petitioner’s misconduct is very serious, the court has repeatedly declined to find that conversion and dishonesty are acts sufficiently egregious to bar reinstatement. In re Perrone, 565 Pa. 563, 777 A.2d 413 (2001) (disbarred attorney’s misconduct in filing false and misleading fee petitions obtaining payment for legal services purportedly provided to indigent clients was not so deplorable as to preclude reinstatement); In re Greenberg, 561 Pa. 154, 749 A.2d 434 (2000) (disbarred attorney criminally convicted of fraud, which included perpetrating fraud on the bankruptcy court, not forever precluded from reinstatement); In re Costigan, 541 Pa. 459, 664 A.2d 518 (1995) (disbarred attorney criminally convicted in connection with his handling of an estate where he concealed assets from the rightful heir was not barred from reinstatement). Upon review of the underlying offenses and the case law, the board concludes that the misconduct is not so egregious as to preclude petitioner from reinstatement.

The board must next determine whether petitioner has met his burden of proving by clear and convincing evidence that he meets the reinstatement requirements set forth by Pa.R.D.E. 218(c)(3), including that he presently has the moral qualifications, competency and learning in the law required for admission to practice law in the Commonwealth. Here, petitioner was unable to demonstrate that he is qualified to resume the practice of law.

Following his disbarment, petitioner engaged in dishonest acts. He signed his resignation statement on January 15, 2002. Yet the following day he sent a fee agreement to Charles Doyle for the purpose of representing Michael Doyle in a New Jersey criminal matter. Mr. Doyle sent payment of the fee by check to petitioner, who accepted the payment even though he was already disbarred. Petitioner believes he did nothing wrong.

Petitioner failed to provide notice to his clients of his disbarment, pursuant to the provisions of Pa.R.D.E. 217. On the reinstatement questionnaire, petitioner either failed to answer questions regarding notice provided his clients, or answered questions falsely. Petitioner offered the testimony of his former paralegal, Larry Watson, regarding notice that petitioner provided his clients. The Hearing Committee found that the testimony was not credible. The board concurs with this finding. Petitioner’s own testimony was not reliable on this issue. He claimed that he had no duty to notify clients as they had been transferred to other lawyers. According to the credible testimony of Robert Meingossner, clients who were transferred to him from petitioner were confused as to what happened to petitioner and the reason for the transfer.

Petitioner by his own admission has not notified his current employer, Keiser University, of his disbarred status. While he claims that he was never asked, petitioner has an affirmative obligation to inform “other persons with whom he may have professional contacts under circumstances where there is a reasonable probability those persons may infer he remains an attorney in good standing.” Pa.R.D.E. 217(c)(3). This obligation continues for as long as petitioner is disbarred. Petitioner’s status as a paralegal instructor charged with teaching all law classes at Keiser involves work in a field that is law-related. Many of those he is in contact with would hold a reasonable expectation that petitioner is a lawyer in good standing.

Petitioner’s character witnesses did not aid his case. Uniformly, they had no understanding of the facts leading to petitioner’s disbarment and were unable to shed any positive light on petitioner’s character.

Petitioner’s reinstatement questionnaire contained errors and omissions. Many times such errors will not prevent an attorney’s reinstatement if the errors are clearly explained; however, petitioner’s explanations for his errors and omission were not credible or convincing. Among other things, petitioner failed to disclose that he has a legal consulting business, although his tax returns reflected income earned and deductions taken in connection with such a business. Petitioner did not appear to understand that performing legal research for his brother, a doctor, constituted the practice of law. Petitioner failed to report his reciprocal disbarment in the Eastern District of Pennsylvania, and he stated on his questionnaire that he made restitution to clients within 60 days, which was not true. Given the importance of this reinstatement proceeding, petitioner’s carelessness, even if viewed in the light most favorable to him, is not excusable and only compounds his overall appearance of incompetence and lack of fitness.

The board recommends that the petition for reinstatement be denied.

V. RECOMMENDATION

The Disciplinary Board of the Supreme Court of Pennsylvania unanimously recommends that the petition for reinstatement filed by petitioner, Anthony Richard Patete Jr. be denied.

The board further recommends that, pursuant to Rule 218(e), Pa.R.D.E., petitioner be directed to pay the necessary expenses incurred in the investigation and processing of the petition for reinstatement.

ORDER

And now, December 29, 2009, upon consideration of the report and recommendations of the Disciplinary Board dated October 21,2009, the petition for reinstatement is denied.

Pursuant to Rule 218(e), Pa.R.D.E., petitioner is directed to pay the expenses incurred by the board in the investigation and processing of the petition for reinstatement.

      . Sadly, on April 28, 2009, Member Ethan Halberstadt died. This was after the Hearing Committee heard testimony on two separate dates, but before the issuance of its report. Mr. Halberstadt did not participate in the writing or otherwise endorse the contents of the report.


author: TILSON, J,

text:
    Malin v. RCN Corp.

      Michael H. Malin Sr., pro se.

      DeanH. Malik, for defendant Philips & Cohen Assocs. Ltd.

      Robert H. Lefevre, for defendant RCN Corp.

      LisaB. Wershaw, for defendants Chase National Bank and JPMorgan Chase.

      Richard A. Kessler, for defendant NCO Financial Systems Inc.
    December 10, 2009-
   TILSON, J,

FACTS AND PROCEDURAL HISTORY

Appellant, Michael H. Malin Sr., appeals from this court’s order of October 9, 2009, sustaining appellees’, Chase National Bank, RCN Corp., and NCO Financial Systems Inc., preliminary objections to appellant’s second amended complaint, and dismissing the second amended complaint with prejudice.

On April 29,2008, appellant filed a complaint against RCN Corp, and Chase National Bank. On May 27,2008, RCN Corp. filed preliminary objections. On June 16, 2008, appellant filed an amended complaint against RCN Corp., Chase National Bank, Phillips & Cohen Associates Ltd., and NCO Financial Systems Inc. On July 10,2008, Chase National Bank filed an answer and new matter to appellant’s amended complaint. On July 21,2008, Phillips & Cohen Associates Ltd. filed preliminary objections to appellant’s amended complaint. On August 11,2008, NCO Financial Systems Inc. filed an answer and new matter to appellant’s amended complaint. On September 5, 2008, appellant filed preliminary objections to NCO Financial Systems Inc.’s answer and new matter. On October 17, 2008, RCN Corp., filed preliminary objections to appellant’s amended complaint. On December 30,2008, this court entered an order on Phillips & Cohen Associates Ltd. and RCN Corp.’s preliminary objections to plaintiff’s amended complaint. The order provides the following: (1) Phillips & Cohen Associates’ preliminary objections in the nature of demurrer to Count V and IX are sustained and plaintiff is directed to amend his amended complaint; (2) Count VIII for harassment is dismissed against Phillips & Cohen Associates Ltd.; (3) plaintiff’s preliminary objection is dismissed; (4) RCN Corp’s preliminary objection that appellant does not allege the specific relationship is sustained and appellant is directed to file a more specific complaint; and (5) RCN Corp. ’s preliminary obj ection to harassment and punitive damages are sustained.

On January 28,2009, appellant filed a second amended complaint against Chase National Bank, RCN Corp., NCO Financial Systems Inc., and Phillips & Cohen Associates Ltd. which included the following counts: (1) Plaintiff v. RCN and Chase, Pennsylvania Unfair Trade Practices and Consumer Protection Law; (2) Plaintiff v. RCN, Intentional or negligent misrepresentation; (3) Plaintiff v. RCN, conversion; (4) Plaintiff v. RCN and Chase, theft by deception; (5) Plaintiff v. RCN and Chase, Phillips & Cohen, intentional or negligent infliction of emotional distress; (6) Plaintiff v. All Defendants, Fair Credit Extension Uniform Act and Pennsylvania Loan Interest and Protection Law; (7) Plaintiff v. All Defendants, harassment and abuse; (8) Plaintiff v. Phillips & Cohen Associates Ltd.; and (9) Plaintiff v. NCO Financial Systems Inc. Appellant alleged that between 2005 and 2007, charges by RCN Corp. were improperly submitted by RCN Corp. and posted by Chase National Bank on appellant’s Chase National Bank credit card, which appellant maintains had expired and was discontinued by him in 2004, and that appellees improperly sought to collect the unauthorized RCN Corp. debt from him. On February 20, 2009, Chase National Bank filed preliminary objections to appellant’s second amended complaint. On February 23, 2008, RCN Corp. and NCO Financial Systems Inc. filed preliminary objections. On March 9, 2009, Phillips & Cohen Associates Ltd. filed preliminary objections. On June 16,2009, Phillips & Cohen Associates Ltd. filed an answer and new matter to appellant’s second amended complaint.

On September 2,2009, oral argument was held on the appellees’ preliminary objections to appellant’s second amended complaint. After an oral argument on defendants’, Chase National Bank, RCN Corp. and NCO Financial Systems Inc., preliminary objections to plaintiff’s second amended complaint, this court entered an order sustaining the preliminary objections and dismissing the second amended complaint with prejudice.

ISSUES

Appellant filed the instant appeal on November 9,2009 and raised the following issues in his concise statement of matters complained of on appeal filed on November 27, 2009:

(1) The court’s order dismisses the plaintiff’s second amended complaint against all defendants. Including Phillips & Cohen Associates Ltd. when the court by order of May 26,2009, dismissed its preliminary objection for failure to file a brief in support. The court ordered the filing of an answer. Plaintiff filed an answer to the new matter of defendant. Accordingly, the pleadings are closed with respect to that defendant and the plaintiff was entitled to proceed even if all others were dismissed. The court erred in dismissing Phillips & Cohen from this case. There was no other motion before the court filed by that defendant.

(2) The court erred in its orders of December 30,2008 in requiring plaintiff to plead a more specific or personal relationship with RCN to sustain his action against RCN for the unauthorized use of his credit card or “identify theft,” i.e., the misuse thereof. No legal basis exists for such a requirement and such a requirement is patently erroneous. Plaintiff is not aware that any such authority exists for a “personal relationship.” Nor has any been produced in this action.

(3) The court erred in failing to find that RCN upon the alleged facts, violated 18 Pa.C.S. §4106(a)(l)(iii) et seq. and known as the Pennsylvania Unfair Trade Practice Act and 18 Pa.C.S. §3922 thereof. The court erred finding that RCN’s unauthorized action in charging such to plaintiff’s closed card membership with Chase was not in violation also of the Fair Credit Extension and Uniformity Act 73 PS. §2270.1.

(4) The court erred in finding that plaintiffs’ claims for the statutory and common-law claims lack specificity.

(5) The court erred in dismissing plaintiff’s claim against NCO under the Fair Debt Collection Practices Act 15 U.S.C. §1692 et seq.

(6) The court erred in dismissing plaintiff’s claim against Chase National Bank under the Fair Debt Practices Act, supra.

(7) The court erred in dismissing plaintiff’s claim against Phillips & Cohen Associates under the Fair Debt Collection Practices Act, supra.

(8) The court erred in dismissing plaintiff’s claim against all defendants (except RCN) for violations of the Pennsylvania Loan Interest and Collection Law 41 Pa.C.S. §101 et seq.

(9) The court erred in dismissing plaintiff’s claims for harassment by debt collectors when such is available under the statutes cited including but not limited to The Fair Debt Collection Practices Act.

STANDARD OF REVIEW

An appellate court’s scope of review where there has been a challenge to the sustaining of preliminary objections in the nature of a demurrer was set forth by this court in Vattimo v. Lower Bucks Hospital Inc., 502 Pa. 241, 465 A.2d 1231 (1983). MacElree v. Philadelphia Newspapers Inc., 544 Pa. 117, 124, 674 A.2d 1050, 1054 (1996). “All material facts set forth in the complaint as well as all inferences reasonably deducible therefrom are admitted as true for [the purpose of this review].” Id., Vattimo v. Lower Bucks Hospital Inc., 502 Pa. at 244, 465 A.2d at 1232-33. “The question presented by the demurrer is whether, on the facts averred, the law says with certainty that no recovery is possible.” Id. “Where a doubt exists as to whether a demurrer should be sustained, this doubt should be resolved in favor of overruling it.” Id.

ANALYSIS

Appellant’s first statement of matters complained of on appeal states the following:

“The court’s order dismisses the plaintiff’s second amended complaint against all defendants. Including Phillips & Cohen Associates Ltd. when the court by order of May 26,2009, dismissed its preliminary objection for failure to file a brief in support. The court ordered the filing of an answer. Plaintiff filed an answer to the new matter of defendant. Accordingly, the pleadings are closed with respect to that defendant and the plaintiff was entitled to proceed even if all others were dismissed. The court erred in dismissing Phillips & Cohen from this case. There was no other motion before the court filed by that defendant.”

Appellant’s seventh statement of matters complained of on appeal states the following:

“The court erred in dismissing plaintiff’s claim against Phillips & Cohen Associates under the Fair Debt Collection Practices Act, supra.

On March 9, 2009, Phillips & Cohen Associates Ltd. filed preliminary objections. On June 16, 2009, Phillips & Cohen Associates Ltd. filed an answer and new matter to appellant’s second amended complaint. The order dated October 9, 2009 ruled on Chase National Bank, RCN Corp, and NCO Financial Systems Inc.’s preliminary objections to plaintiff’s second amended complaint filed February 20, 2008 and February 23,2008, and did not rule on Phillips & Cohen Associates Ltd.’s preliminary objections because Phillips & Cohen Associates Ltd. filed an answer and new matter to appellant’s second amended complaint. Therefore, appellant’s second amended complaint should not be dismissed against Phillips & Cohen Associates Ltd.

Appellant’s second statement of matters complained of on appeal states the following:

“The court erred in its orders of December 30, 2008 in requiring plaintiff to plead a more specific or personal relationship with RCN to sustain his action against RCN for the unauthorized use of his credit card or “identify theft,” i.e., the misuse thereof. No legal basis exists for such a requirement and such a requirement is patently erroneous. Plaintiff is not aware that any such authority exists for a ‘personal relationship.’ Nor has any been produced in this action.”

On October 17, 2008, RCN Corporation filed preliminary objections to plaintiff’s amended complaint joining additional defendants. RCN Corp. argued that appellant lacks legal capacity to maintain the action in that appellant has not alleged in his complaint that he has contracted with RCN Corp. appellant’s second amended complaint contains claims against RCN Corp. for violation of Pennsylvania Unfair Trade Practices and Consumer Protection Law; intentional or negligent misrepresentation; conversion; theft by deception; intentional or negligent infliction of emotional distress; violations of Fair Credit Extension Uniform Act and Pennsylvania Loan Interest and Protection Law; and harassment and abuse. Upon review of the pleadings, this court found that appellant neither alleged that appellant contracted with RCN Corp. nor alleged a specific relationship between appellant and RCN Corp., and therefore this court sustained RCN Corp.’s preliminary objection.

Appellant’s third statement of matters complained of on appeal states the following:

“The court erred in failing to find that RCN upon the alleged facts, violated 18 Pa.C.S. §4106(a)( 1 )(iii) et seq. and known as the Pennsylvania Unfair Trade Practice Act and 18 Pa.C.S. §3922 thereof. The court erred finding that RCN’s unauthorized action in charging such to plaintiff’s closed card membership with Chase was not in violation also of the Fair Credit Extension and Uniformity Act 73 P.S. §2270.1.”

This court did not fail to find that RCN Corp. violated the Pennsylvania Unfair Trade Practice Act and this court did not find that RCN’s unauthorized action in charging such to plaintiff’s closed card membership with Chase was not in violation also of the Fair Credit Extension and Uniformity Act because this court sustained Chase National Bank, RCN Corp. and NCO Financial Systems Inc.’s preliminary objections to plaintiff’s second amended complaint and dismissed appellant’s second amended complaint based on the preliminary objections raised by Chase National Bank, RCN Corp. and NCO Financial Systems Inc. for lack of legal and factual specificity.

Appellant’s fourth statement of matters complained of on appeal states the following:

“The court erred in finding that plaintiff’s claims for the statutory and common-law claims lack specificity.”

Appellant’s statement is not specific as to which claims he refers. However, this court believes that it is necessary to discuss the other preliminary objections raised by appellees. First, Chase National Bank and RCN Corp. filed preliminary objections in the nature of a demurrer to Count I — Pennsylvania Unfair Trade Practices and Consumer Protection Law. This court sustained this preliminary objection because appellants cites to criminal statute 18 Pa.C.S. §4106 “access device fraud”, and appellant has not alleged that Chase National Bank used appellant’s allegedly cancelled credit card in an effort to obtain property or services from him or that Chase National Bank gave an access device to another person knowing it to be counterfeit or unauthorized. In addition, appellant cites to 18Pa.C.S. §4106 “access device fraud” and 18 Pa.C.S. §3922, “theft by deception”, which are criminal statutes, and only the Commonwealth can state a cause of action under this statute.

Second, Chase National Bank and RCN Corp. filed preliminary objections in the nature of a demurrer to Count IV — theft by deception. This court sustained this preliminary objection because there is no private right of action for theft by deception.

Third, Chase National Bank and RCN Corp. filed preliminary objections in the nature of a demurrer to Count V — intentional or negligent infliction of emotional distress. Under the Restatement (Second) of Torts, §46, intentional infliction of emotional distress will lie where “one who by extreme and outrageous conduct intentionally or recklessly causes severe emotional distress to another is subject to liability for such emotional distress, and if bodily harm to the other results from it, for such bodily harm.” It has been said that “[t]he conduct must be ‘so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized society. ’ ” Buczek v. First National Bank of Mifflintown, 366 Pa. Super. 551, 531 A.2d 1122 (1987). In Pennsylvania, a cause of action for negligent infliction of emotional distress depends upon three factors: (1) Whether plaintiff was located near the scene of the accident as contrasted with one who was a distance away from it; (2) Whether the shock resulted from a direct emotional impact upon plaintiff from the sensory and contemporaneous observance of the accident, as contrasted with learning of the accident from others after its occurrence; and (3) Whether plaintiff and the victim were closely related as contrasted with an absence of any relationship or the presence of only a distant relationship. Sinn v. Burd, 486 Pa. 146, 174, 404 A.2d 672, 685 (1979). This court sustained this preliminary objection because upon review of appellant’s second amended complaint, appellant failed to set forth any factual basis that demonstrates extreme and outrageous conduct or behavior by appellees or extreme emotional distress suffered by appellant, which is required to make a prima facie case.

Fourth, RCN Corp. filed a preliminary objection to Count II — intentional or negligent misrepresentation. The elements of intentional misrepresentation are as follows: (1) A representation; (2) which is material to the transaction at hand; (3) made falsely, with knowledge of its falsity or recklessness as to whether it is true or false; (4) with the intent of misleading another into relying on it; (5) justifiable reliance on the misrepresentation; and (6) the resulting injury was proximately caused by the reliance. Restatement (Second) of Torts §525. Negligent misrepresentation requires proof of: (1) misrepresentation of material fact; (2) made under circumstances in which misrepresenter ought to have known its falsity; (3) with intent to induce another to act on it; and (4) which results in injury to party acting in justifiable relianee on misrepresentation. Restatement (Second) of Torts §552. Appellant’s second amended complaint, paragraph 25 provides that RCN fraudulently represented to defendant Chase that it had plaintiff’s authority to charge the Chase card without advising plaintiff that it was charging his card even without autoplay authorization, which it had a fiduciary duty to do and to act in good faith.” Upon review of appellant’s second amended complaint, this court found that appellant failed to allege sufficient facts to establish either claim against RCN Corp.

Fifth, RCN Corp. filed a preliminary objection to Count III — conversion. A “conversion” is the deprivation of another’s right of property in, or use or possession of, a chattel, or other interference therewith, without the owner’s consent and without lawful justification. “Conversion” has also been defined as an act of willful interference with a chattel, done without lawful justification, by which any person entitled thereto is deprived of its use and possession. Upon review of the second amended complaint, plaintiff alleges (1) RCN obtained funds which did not belong to RCN and has not returned to Chase the funds which it has converted in order to prevent its collection actions against plaintiff; (2) RCN’s refusal to return funds which do not belong to it and which it was not authorized to obtain, despite plaintiff’s many requests that RCN return those funds to Chase in order for plaintiff to avoid Chase’s exorbitant late and interest finance charges; and (3) because Chase has taken the position that these charges are authorized and has sought to collect these funds from plaintiff, RCN, is in effect converting plaintiff’s funds. (Second amended complaint, paragraphs 29-31.) Upon review of appellant’s second amended complaint, this court found that appellant failed to plead sufficient facts to establish a conversion claim against RCN Corp.

Appellant’s fifth statement of matters complained of on appeal states the following:

“The court erred in dismissing plaintiff’s claim against NCO under the Fair Debt Collection Practices Act 15 U.S.C. §1692 et seq.”

NCO Financial Systems Inc. filed a preliminary objection to appellant’s claim for violation of Pennsylvania Loan Interest and Protection Law in which NCO Financial Systems Inc. argued that appellant failed to include any factual averments of the alleged “improper and illegal methods of debt collection” by NCO Financial Systems Inc. and how it was usurious. Pennsylvania Rule of Civil Procedure 1019(a) provides that “The material facts on which a cause of action or defense is based shall be stated in a concise and summary form.” Section 2270.4 of the Fair Credit Extension Uniformity Act provides what shall constitute an unfair or deceptive debt collection act or practice under this act. Upon review of appellant’s second amended complaint, this court found that appellant failed to identify what methods NCO Financial Systems Inc. applied that constitute an unfair or deceptive debt collection, and therefore this court found that appellant’s second amended complaint lacked the necessary specificity.

Statement six provides: “The court erred in dismissing plaintiff’s claim against Chase National Bank under the Fair Debt Practices Act, supra.” Chase National Bank filed a preliminary objection to appellant’s claim for violation of Fair Debt Collection Practices Act. Chase National Bank argued that appellant claims that Chase violated the Fair Debt Collection Practices Act, which is inapplicable to a creditor seeking directly to collect its own debt. “The statute does not apply to persons or businesses collecting debts on their own behalf.” Itri v. Equibank N.A., 318 Pa. Super. 268, 278, 464 A.2d 1336, 1341 (1983); 15 U.S.C. §1692(a)(4). “It is directed to those persons who are engaged in business for the principal purpose of collecting debts.” Id., 15 U.S.C. § 1692(a) (6). This court sustained this preliminaiy objection because the Fair Debt Collection Practices Act does not apply to Chase National Bank, who is a creditor.

Statement eight provides: “The court erred in dismissing plaintiff’s claim against all defendants (except RCN) for violations of the Pennsylvania Loan Interest and Collection Law, 41 Pa.C.S. §101, et seq.” Chase National Bank andNCO Financial Systems Inc. filed a preliminary objection to appellant’s claim for violation of the Pennsylvania Loan Interest and Protection Law. Chase National Bank argued that the Pennsylvania Loan Interest and Protection Law prohibits the charge of usurious interest, and that appellant fails to include any factual averments of what interest rate Chase National Bank charged appellant, and how it was usurious. Appellant alleges at Count VI — Fair Credit Extension Uniform Act and Pennsylvania Loan Interest and Protection Law, paragraph 43 of appellant’s second amended complaint, that “All defendants either caused an effort to or attempted to charge plaintiff via improper and illegal methods of debt collection by Chase and its agents, servants, and employees which violated the Pennsylvania Fair Credit Extension Uniform Act, 73 P.S. §2270.1 et seq., and the Federal Fair Debt Collection Practices Act, 15 U.S.C. § 1692(a) et seq.” Upon review of appellant’s second amended complaint, this court found that appellant failed to allege specific factual allegations against appellees, and therefore this court found that appellant’s second amended complaint lacked the necessary specificity.

Appellant’s ninth statement of matters complained of on appeal states the following:

“The court erred in dismissing plaintiff’s claims for harassment by debt collectors when such is available under the statutes cited including but not limited to The Fair Debt Collection Practices Act.”

Appellees filed a preliminary objection to appellant’s claim for harassment and abuse under 15U.S.C. § 1692(d) (5)(6). Chase National Bank argued that although the Fair Debt Collection Practices Act is incorporated in Fair Credit Extension Uniformity Act relating to unfair or deceptive acts by debt collectors, not creditors, to the extent that appellant is seeking to assert a claim against Chase National Bank under the Fair Debt Collection Practices Act, it does not apply to collection actions by creditors on its own debts. This court found the Fair Debt Collection Practices Act does not apply to Chase-National Bank because the statute does not apply to persons or businesses collecting debts on their own behalf,; and therefore appellant’s claim for harassment and abuse under 15 U.S.C. §1692(d)(5)(6) should be dismissed. Itri v. Equibank N.A., 318 Pa. Super. 268, 278, 464 A.2d 1336, 1341 (1983); 15 U.S.C. § 1692(a)(4). Paragraph 18 of appellant’s second amended complaint provides that “defendants Phillips & Cohen Associates andNCO Financial were then hired by Chase to collect the debt. Both were advised in writing of the disputed debt. Both continued to communicate and harass in violation of relevant statutes.” Paragraph 47 provides that “The actions of all defendants as set forth above in creating the illegal debt and attempting to collect it by constant harassment and abuse are illegal under 15 U.S.C. § 1692(d) (5)(6).” Paragraph 48 provides “The actions of all defendants as described above have violated plaintiffs’ and his daughter’s right to privacy protected by statute and constitutional law.” Upon review of appellant’s second amended complaint, this court found that appellant failed to sufficiently set forth any material facts relating to the alleged harassment, and therefore this court sustained the preliminary objections.

CONCLUSION

For the reasons set forth above, this court’s order of October 9, 2009, sustaining defendants’, Chase National Bank, RCN Corp., and NCO Financial Systems Inc., preliminary objections to plaintiff’s second amended complaint filed February 20, 2008 and February 23, 2008, and dismissing the second amended complaint with prejudice, should be affirmed.


author: HODGE, J,

text:
    Alkhafaji v. TIAA-CREF Individual and Institutional Services LLC

      Frank G. Verterano, for petitioners.

      Natalie M. Ruschell, for respondents.
    January 14, 2010
   HODGE, J,

This matter was commenced by the petitioner’s filing of a petition to enjoin distribution of pensions on January 24, 2008.

The petitioner, Fatin Alkhafaji, is the third wife of the decedent, Abbass Alkhafaji. Decedent was in a car accident in March of2007 while visiting in Qatar. Decedent was transported back to the United States to UPMC Presbyterian Hospital and later transferred to Johns Hopkins Hospital. Decedent never left the hospital and his condition slowly deteriorated until his death in September 2007. Feeling his death was imminent, decedent dictated a will in July of 2007.

Paragraph (4) of decedent’s will states as follows: “About my pension, the beneficiaries are all my biological children and my current wife Fatin, after reducing all costs associated with the house as such... should be divided according to the Islamic laws and Sharia ....”

Paragraph (9) of decedent’s will also speaks to the distribution of any pension, “In case I have additional monetary benefits from my job such as life insurance, 401(k), 403(b) or any other retirement funds that I am not aware of, Allah as my witness, they should be divided, after cost associated with attaining those funds, according to the Islamic law and ‘Sharia’.”

At the time of his death, decedent was a professor at Slippery Rock University. As part of his employment in the Pennsylvania higher education system, he had acquired certain TIAA-CREF (Teachers Insurance and Annuity Association of American and College Retirement Equities Fund) contracts and certificates.

Decedent’s beneficiary designation on the TIAA-CREF certificates listed his son, Ahmed Alkhafaj i, from his second marriage, and two daughters, Alliah Alkhafaji and Sheameh Alkhafaji-Alduaisi, from his first marriage. The shares of the three children were to be divided equally, unlike Islamic law and “Sharia”.

The parties have presented three joint stipulations of facts and the relevant facts stipulated to by the parties are as follows; TIAA-CREF has agreed to refrain from making distribution on the accounts until such time as this litigation can be concluded. TIAA is a New York nonprofit legal reserve life insurance company which provides fixed retirement annuities, group insurance and individual and collective life insurance to institutions of higher education. CREF is a nonprofit organization which issues individual, variable retirement annuities to those employees who are eligible to TIAA contracts. At the time of his death, Abbass Alkhafaji was the owner of certain TIAA-CREFF contracts/certificates.

TIAA contract/CREF certificate

B532094-6/Q532094-3

K434259-4/J434259-6

3-571944-2/4-571944-0

TIAA-CREF is approved by the Pennsylvania Department of Insurance to issue annuities in Pennsylvania.

TIAA-CREF contract/certification B532094-6/ Q532094-3 was issued on September 1, 1986; the last premium was paid on March 22, 1991; and the total value as of March 4, 2009 was $412,096.09; the value of the contract/certificate on May 25,1995 was $98,216-.42, and the increase in value was $313,879.67.

The TIAA-CREF contract/certificate K434259-4/ J434259-6 was issued on March 1, 1995; the last premium was paid on September 28, 2007; the value as of May 25, 1995 was $1,237.31; the total contributions after May 25,1995 were $43,931; the value attributable to the pre-May 25,1995 contribution as of March 4,2009 was $3,523.54 and the value attributable to post-May 25, 1995 contributions as of March 4, 2009 was $67,079-.26.

The TIAA-CREF contract/certificate 3-571944-2/4-571944-0 was issued on September 1, 2003; the last premium was paid September 28,2007; the total contributions were $60,046.44 and the value as of March 4, 2009 was $76,191.52.

TIAA-CREF contract/certificate B532094/Q5320943 and K434259-4/J434259-6 are 403(b) qualified accounts and TIAA-CREF contract/certificate 3-571944-2/4-571944-0 are 414(h) qualified accounts.

With the exception of TIAA contract/certificate K434259-4/J434259-6, contributions were made in part on the contracts/certificates by Mr. Alkhafaji and part by his employer. Mr. Alkhafaji made all contributions to TIAA-CREF contract K434259-4/J434259-6. The TIAA contracts are akin to defined benefit accounts. The CREF certificates are akin to defined contribution accounts.

The marital settlement agreement dated May 25,1995, entered into between Abbass Alkhafaji and Sana Ali and the will of the decedent were both delivered to TIAA-CREF Individual and Institutional Services LLC after the decedent’s death and prior to any distributions of any of the funds from the annuities. TIAA contracts/certificates B532094-6/Q532094-3 and K434259-4/J4342596 are qualified annuities under section 403(b) of the Internal Revenue Code and TIAA-CREF contract/ certificates 3-571944-2/4-571944-0 are qualified annuities of the Internal Revenue Code 414(h).

The martial settlement agreement postdated the beneficiary form on file with TIAA-CREF for at least two of the decedent’s three TIAA-CREF contracts/certificates. The decedent did not designate a beneficiary with respect to 3-571944-2/4-571944-0. The administrator for TIAA-CREF has a negative enrollment policy which assumes as beneficiaries on subsequently acquired TIAA-CREF certificates the most recently designated beneficiary on other TIAA-CREF certificates.

On July 17,2007, the decedent executed a holographic will wherein he named all his biological children and his current wife as the beneficiaries to his retirement annuities. Following Mr. Alkhafaji’s death, the petitioner sent the will to TIAA-CREF to act as notice of his change of beneficiary designation. The respondents contend that the will is not sufficient to change the beneficiary designations on file with TIAA-CREF.

Generally, in order to accomplish a change of beneficiary, the mode prescribed by the policy must be followed. Carruthers v. $21,000, 290 Pa. Super. 54, 434 A.2d 125 (1981). TIAA and CREF policy simply requires written notice.

“Procedure for elections and changes, you, or your second annuitant or beneficiary having the right to do so, may elect to change, in accordance with the terms of your certificate, any of the following by written notice satisfactory to TIAA (CREF), sent to its home office in New York, NY. No such notice will take effect unless it is received by TIAA (CREF). When received, it will take effect as of the date it was signed, whether or not the signer is living at the time we receive it.” TIAA Group Manual section 37 and CREF Group Manual section 44.

TIAA-CREF first received indication that Mr. Alkhafaji desired to change his beneficiary designation when they received a copy of his will subsequent to his death.

The appellate courts of Pennsylvania have considered this issue on numerous occasions over the years, starting with the Supreme Court case of Sproat v. Travelers Insurance Company, 289 Pa. 351, 137 A. 621 (1927). In Sproat, supra, the insurance policy required that a change of beneficiary be made pursuant to a specific form which would take effect only when the change and the written consent of the company are endorsed upon the contract at the home office of the company, or attached thereto, whereupon all rights of the former beneficiary shall cease. The decedent in this case, had in his possession, the blank change of beneficiary form for a period of six months prior to his death. The decedent signed the blanks for the change of beneficiary without filling them in or forwarding to the company, leading the Supreme Court to confirm the trial court’s decision that the decedent did not do all he reasonably could have done to effectuate the change of beneficiary. The court found that the decedent could have filled out the blank application and returned it to the company; the decedent could have written the company, requesting a copy of his policy; he also could have required noting of the transfer on the records at the home office, but he did none of these things, and he was alive and capable of doing business for six months after receiving the blank form and he took no step during that time to complete the change, thereby leaving the trial court to conclude that he had not done all he reasonable could to complete the transfer.

In the Carruthers case, supra, the insurance policy in question required the designation of beneficiary to be in writing and recorded by the insurer, with the Superior Court affirming the trial court’s decision that neither a holographic will changing the beneficiary of the life insurance policy nor an attorney’s letter sent to the insurer after the insurer’s death notifying insurer of the holographic will’s change in beneficiaries, was legally sufficient to effectuate a change in beneficiary. In finding so, the court concluded the decedent did not do all that he reasonably could have under the circumstances to provide the insurer notice.

The United States Court of Appeals for the Third Circuit, in the case of Provident Mutual Life Insurance of Philadelphia v. Ehrich, 508 F.2d 129 (1975), had the opportunity to interpret Pennsylvania law, the Court of Appeals holding that under Pennsylvania law, an insured may change the beneficiary of his life insurance policy by making a reasonable effort under the circumstances to effect the change. Procedures provided by the policy for change of beneficiary were for the protection of the insurer, which the original beneficiary, the ex-wife had no right to insist upon compliance. The right to change beneficiary was the right of the insured, personal to him, and was a privilege which could not be abrogated by the insurer in the absence of statutory provision or consent by the insured, and could not be assigned or transferred by the company. In Provident Mutual, the court found that the insured, by writing twice to the insurance company and once to the agent advising of his desire to change the beneficiary, was sufficient for the trial court to find that the insured made every reasonable effort to comply with the policy requirements.

The Pennsylvania Supreme Court case of Breckline v. Metropolitan Life Insurance Company, 406 Pa. 573, 178 A.2d 748 (1962), was a case involving a life insurance policy issued under the Federal Employee’s Group Life Insurance Act. That Act required that the beneficiary designation be by a “writing received in employing office prior to death.” The insured executed a writing designating the plaintiff the beneficiary of the insurance involved, forwarded in writing to the insurance company, and requested the insurance company forward to him the forms necessary to designate a beneficiaiy, but these forms were not received prior to the insured’s death. The executed informal designation of beneficiary in favor of the plaintiff stated that it was the insured’s intention that the instrument take effect immediately, rather, the parties had stipulated that the official beneficiary designation was never filed in the employer’s office as required by statute.

Under the circumstances in Breckline, the Supreme Court pointed out that while the court has repeatedly ruled that where the provisions of a life insurance policy require that a written change of beneficiary be filed with the company in order to be effective, and such is executed and every reasonable effort is made to comply with the requirements of the policy, the change of beneficiary is valid and binding, even though it is not filed with the insurer before the death of the insured. However, in Breckline, there was a statutory provision, not an administrative regulation, with the Supreme Court holding that a statutory provision cannot be disregarded and must be fully complied with. The statutory provision is not subject to waiver, and in fact, could not be waived in this case.

The Commonwealth Court case of Dale v. Philadelphia Board of Pensions and Retirement, 702 A.2d 1160 (Pa. Commw. 1997), was a case in which the Commonwealth Court was interpreting a Philadelphia Municipal Retirement System Ordinance, which required a change of beneficiary form to be filed with the board. The Philadelphia Municipal Retirement System Ordinance required that nomination of beneficiaries and designation of beneficiaries shall be in writing, and shall be filed with the Philadelphia Board of Pension and Retirement, the fund administrator. As a result, the Commonwealth Court upheld the determination of the Pension Board, that the requirement that the form (change of beneficiary fonn) be filed with the board appears to be, in the language of Breckline, supra, more procedural than substantive, and upheld the decedent’s change of beneficiary designation from his children from a prior marriage to his second wife, finding that the decedent substantially complied with the requirements of the ordinance, and that the second wife was properly the beneficiary.

The Superior Court of Pennsylvania, in In re Estate of Golas, 751 A.2d 229 (Pa. Super. 2000), had the opportunity to determine whether or not a decedent effectively changed a beneficiary of an I.R.A. from his sister to his estate, by virtue of the execution of a will, by establishment of an educational trust, by including a gift to the appellant’s sister, and by discussing with his attorney the designation of the beneficiary of three of his assets to fund the trust. The Superior Court held that the evidence established the decedent’s intent to change the beneficiary, that decedent eventually complied with the requirement to use the broker’s forms to change the beneficiary, and that his intent orally communicated in a telephone call to the broker was effective. The Superior Court noted that the formal procedures which an insurance company requires to affect a change in beneficiary are in place to protect the company, citing Provident Mutual Life Insurance Company of Philadelphia v. Ehrich, supra, and an original beneficiary is without the right to insist upon strict compliance with those requirements.

Several years later, the Commonwealth Court of Pennsylvania, in the case of Greene v. Public School Employees’ Retirement System, 878 A.2d 153 (Pa. Commw. 2005), had the opportunity to address the same issues regarding the beneficiary of a public school employee’s retirement system account. In Greene, the Commonwealth Court held that the assignment executed by a testator which designated her trust as the beneficiary of her retirement account due from the Pennsylvania School Retirement System, was filed with the P.S.R.S. two months after the testator’s death, did not legally change the beneficiary on her P. S .R. S. retirement account, in that the retirement system code required a beneficiary nomination to be made by written request to the P.S.R.S. Board, and the code also required a change of beneficiary to be made on the nomination of beneficiary form. The Commonwealth Court held that a blanket assignment of assets was not the functual equivalent of a specific change in beneficiary.

This court concludes that the distinguishing factor in each of the above cited cases, is the question of whether or not the insurer had a statutory provision or administrative regulation which sets forth the requirements for change in the designation of beneficiaries, as opposed to the circumstances in which the insurer’s only requirement for change of beneficiary is notice of the change of beneficiary, which notice can be retroactive to the date of its signature as opposed to the date of receipt by the insurance carrier.

The marital settlement agreement dated May 25,1995, by and between the decedent, Abbass Alkhafaj i and his second wife, Sana Alkhafaji, designates the three older children, respondents herein, as beneficiaries of his TIAA-CREF accounts. However, there is no language in the marital settlement agreement that provides that the three children were to be the sole and exclusive beneficiaries of the account, nor is there any provision in the marital settlement agreement that prevented or prohibited the decedent from changing beneficiaries of the account or prohibits or prevents him from adding beneficiaries to his TIAA-CREF accounts. Adding additional beneficiaries on the TIAA-CREF account pursuant to the will, was not a violation of the decedent’s contractual obligations pursuant to the marital settlement agreement with his second wife, Sana. Decedent’s designation of the beneficiaries of the TIAA-CREF accounts in 1995, was in accordance with his personal circumstances at that time, namely that he was a twice-divorced father with three children.

After his 1995 divorce, the decedent married Fatin Alkhafaj i, and with her, had five more children, all minors at the time of the decedent’s death. The decedent proceeded to teach at Slippery Rock University, and was working in the Middle East Country of Qatar as a Fulbright Scholar, when he was seriously injured in an automobile accident in March of 2007. As a result of the automobile accident, the decedent became a quadriplegic, was hospitalized in the United States in the UPMC hospital system in Pittsburgh, Pennsylvania, and as a result of deteriorating health, was transferred to the Johns Hopkins Hospital in the Baltimore area. In addition to the injuries from the automobile accident, the decedent was diagnosed with spinal cancer. In this period of hospitalization, the decedent, as a quadriplegic, was incapable of conducting normal business affairs, was under heavy medication, and was hospitalized a substantial distance from his home.

On July 16, 2007, the decedent dictated his last will and testament in accordance with the Islamic law, known as Sharia. The original will, along with $76,000 of decedent’s funds, was taken by decedent’s brother, Ahmed Alkhafaji, after decedent’s death, to his home in the country of New Zealand.

However, a copy of decedent’s last will and testament dated July 16, 2007, was admitted to probate by the Register of Wills of Lawrence County, Pennsylvania, in accordance with Pennsylvania law. While the decedent’s last will and testament was made in accordance with Islamic law, the will also is sufficient to comply with Pennsylvania law relative to wills, in that the document contains testamentary intent, it acknowledges the extent of the decedent’s assets, the document contains dispositive provision for decedent’s assets, the will is signed at the end, witnessed, and with the signatures acknowledged by notary public, thereby meeting all requirements for admission of the copy of the will to probate.

The stakeholder in this case, TIAA-CREF, has not taken a position relative to the legal effect of the marital settlement agreement or the will, both of which were received by TIAA-CREF after decedent’s death. Instead, TIAA-CREF’s position is that it will distribute the assets in accordance with the court’s decision.

As a result, the holding of this court is that decedent’s TIAA-CREF accounts shall be distributed by TIAA-CREF pursuant to the decedent’s last will and testament dated July 16, 2007, in accordance with paragraph 4 of the last will and testament, to his current wife, Fatin and his biological children. The court finds decedent did all that he reasonably could under the circumstances of his illness to notify the insurer of his beneficiary change.

Accordingly, the court will enter the following order.

ORDER

And now, January 14, 2010, in accordance with the attached opinion, the court enters the following order:

(1) TIAA-CREF Individual and Institutional Services LLC, shall make distribution of the pension accounts of the TIAA-CREF certificates, B532094-6/Q532094-3, and K434259-4/J434259-6, to the decedent’s surviving spouse, Fatin Alkhafaji, in accordance with decedent’s last will and testament dated July 17, 2007, and to his biological children, Alliah Alkhafaji; SheamehAlkhafaji-Alduaisi; Ahmed Alkhafaji; Adam Alkhafaji;. Ali Alkhafaji; Hussan Alkhafaji; Hussain Alkhafaji; and Ibrahim Alkhafaji, in accordance of the law of Sharia, mainly, one-eighth share to the surviving spouse, Fatin Alkhafaji; and thereafter, the remaining balance to be divided, two shares each to the six male children, and one share each to the female children.

(2) The prothonotary shall properly serve notice of this order by regular mail or personal service upon counsel of record.