author: CULLEN, J,

text:
    Smith v. MetLife

      Samuel E. Cohen and Kimberly M. Wong, for plaintiffs.

      Joseph C. Korsak, for defendants.
    October 29, 2009
   CULLEN, J,

—Pending before the court are the preliminary objections filed by defendants, MetLife a/k/a Metropolitan Life Insurance Company, MetLife Securities Inc., Carol E. Brian and Shannon Shupp, to the amended complaint of plaintiffs, Paul D. Smith and Eleanor Smith, co-trustees of the Mark D. Smith Irrevocable Supplemental Needs Trust. For the reasons set forth in this opinion, the preliminary objections will be sustained in part and overruled in part.

PROCEDURAL AND FACTUAL BACKGROUND

Plaintiffs filed their initial complaint on January 13, 2009. For reasons not appearing in the record, plaintiffs filed an amended complaint on June 12, 2009.

In their amended complaint, plaintiffs state that they are the co-trustees of the Mark D. Smith Irrevocable Supplemental Needs Trust. Mark D. Smith suffers from a number of afflictions and currently receives Social Security disability benefits. Carol E. Brian and Shannon Shupp are agents of defendants MetLife and MetLife Securities Inc. and acted as financial advisors or investment counselors in their dealings with plaintiffs.

According to the amended complaint, plaintiffs purchased from defendants a Preference Plus Select Variable Annuity on behalf of the trust with the understanding that the policy contained an Enhanced Dollar Cost Averaging feature. Plaintiffs complain that this feature was not issued due to defendants’ oversight, and further that defendants failed to disclose the excessive fees and commissions that would be charged, the volatility of the investment and the significant limitations on the ability to withdraw funds to meet Mr. Smith’s immediate needs. The trust so far has lost approximately $25,000 representing 25 percent of the total investment.

Plaintiffs seek relief based on five separate counts: (1) negligent misrepresentation; (2) intentional misrepresentation; (3) unfair trade practices; (4) breach of contract; and (5) breach of fiduciary duty of good faith and fair dealing.

On July 6, 2009, defendants filed preliminary objections to the amended complaint citing four grounds. First, defendants seek the dismissal of Count III, violation of the Unfair Trade Practices and Consumer Protection Law (UTPCPL), on the basis that plaintiffs have failed to allege the elements of common-law fraud. Second, defendants seek the dismissal of Count IV, breach of contract, on three grounds: (i) lack of specificity; (ii) failure to state a claim; and (iii) failure to attach the writing to the pleading as required. Defendants next challenge the legal sufficiency of CountV, breach of fiduciary duty of good faith and fair dealing, contending that the relationship between the parties was not a fiduciary relationship as a matter of law nor were facts alleged to support such a relationship. Finally, defendants seek to have plaintiffs’ request for attorneys’ fees and costs in Counts I, II and IV stricken. The parties have filed briefs in support of their respective positions, and the court has considered the arguments presented.

DISCUSSION

Rule 1028(a) of the Pennsylvania Rules of Civil Procedure states:

“(a) Preliminary objections may be filed by any party to any pleading and are limited to the following grounds:
“(2) failure of a pleading to conform to law or rule of court...;
“(3) insufficient specificity in a pleading; [and]
“(4) legal insufficiency of a pleading (demurrer)[.] .. .” Pa.R.C.P. 1028(a).
“Preliminary objections [seeking] dismissal of a cause of action should be sustained only in cases that are clear and free from doubt.” Alston v. PW-Philadelphia Weekly, 980 A.2d 215, 219 (Pa. Commw. 2009) (citing Anelli v. Arrowhead Lakes Community Association Inc., 689 A.2d 357, 359 (Pa. Commw. 1997) (citing Bower v. Bower, 531 Pa. 54, 57, 611 A.2d 181, 182 (1992) (citation omitted))). When ruling on preliminary objections, the court must generally accept as true all well and clearly pleaded facts, together with such reasonable inferences as may be drawn from those facts, but not the pleader’s conclusions or averments of law. Santiago v. Pennsylvania National Mutual Casualty Insurance Company, 418 Pa. Super. 178, 184-85, 613 A.2d 1235, 1238-39 (1992). (citations omitted) The question presented by a demurrer is whether, on the facts averred, the law says with certainty that no recovery is possible. Id. at 184-85, 613 A.2d at 1238. Any doubt as to whether a demurrer should be sustained should be resolved in favor of overruling the demurrer. Id.

Defendants initially contend that Count III of the amended complaint, violation of the UTPCPL, 73 P.S. §201-1 et seq., should be dismissed for failure to state a claim. In order to establish that defendants violated the UTPCPL by engaging in fraudulent or deceptive conduct as alleged, plaintiffs must plead and prove all the elements of common-law fraud. Sewak v. Lockhart, 699 A.2d 755, 761 (Pa. Super. 1997). “In turn, to establish common-law fraud, a plaintiff must prove: (1) misrepresentation of a material fact; (2) scienter; (3) intention by the declarant to induce action; (4) justifiable reliance by the party defrauded upon the misrepresentation; and (5) damage to the party defrauded as a [practical] result.” Colaizzi v. Beck, 895 A.2d 36, 39 (Pa. Super. 2006) (citing Rizzo v. Michener, 401 Pa. Super. 47, 61, 584 A.2d 973, 980 (1990)). Each element must be alleged in order to set forth a claim for common-law fraud or a violation of the UTPCPL. See id. at 40.

“Averments of fraud . . . shall be averred with particularity.” Pa.R.C.P. 1019(b). Preliminary objections are appropriate to challenge allegations of fraud where a complaint fails to meet the specificity requirements of rule 1019(b). McGill v. Southwark Realty Company, 828 A.2d 430, 436 (Pa. Commw. 2003).

“Averments of fraud are ‘meaningless epithets unless sufficient facts are set forth which will permit an inference that the claim is not without foundation or offered simply to harass the opposing party and to delay the pleader’s own obligation.’... In satisfaction of the particularity requirement, [the Pennsylvania Supreme Court has] required that two conditions must always be met: the pleadings must adequately explain the nature of the claim to the opposing party so as to permit him to prepare a defense, and they must be sufficient to convince the court that the averments are not merely subterfuge.” In re Estate of Schofield, 505 Pa. 95, 103, 477 A.2d 473, 477 (1984) (quoting Bata v. Central-Penn National Bank of Philadelphia, 423 Pa. 373, 379, 224 A.2d 174, 179 (1966)).

Defendants argue that plaintiffs have failed to allege fraud with the required specificity, citing paragraphs 32, 33 and 34 of the amended complaint. (Def. mem. of 1. in supp. of def. p.o.’s to pi. am. compl., at 6.) These paragraphs state:

“(32) The defendants engaged in unfair or deceptive acts or practices as defined under the UTPCPL.
“(33) Specifically, defendants violated 201-2.(4)(v) (sic) by representing that the policy was appropriate for the purposes of the trust.
“(34) The co-defendants violated 20l-2.(4)((xxi) (sic) by engaging in conduct which created a likelihood of confusion or of misunderstanding.” (Am. compl. ¶¶32-34.)

Defendants argue that “these general allegations do not allege a specific misrepresentation, scienter on the part of defendants, an intention by defendants to induce action on the part of plaintiffs, nor justifiable reliance by plaintiffs upon any alleged misrepresentation.” (Def. mem. of 1., at 6.) In response, plaintiffs state that they “have made numerous allegations in support of their claim, clearly outlining a chronological progression of events cataloguing defendant’s (sic) fraudulent abuse of the trust and funds entrusted to them and culminating in severe loses [sic].” (PI. mem. ofl. in opp. to def. mem. of 1. in supp. of def. p.o.’s to pi. am. compl., at 5.) After a review of the pertinent allegations and the reasonable inferences to be drawn from them, the court concludes that plaintiffs have sufficiently pled a cause of action under the UTPCPL.

Paragraph 30 of the amended complaint, which is the first paragraph of Count III, incorporates the preceding 29 paragraphs. Reading the amended complaint in its entirety, which the court must, reveals that plaintiffs have adequately pled their cause of action and alleged each element of common-law fraud. Plaintiffs have alleged a misrepresentation of material fact. Specifically, they allege that defendants and plaintiffs understood that “a critical part of the investment strategy” was “that the policy would contain a feature known as an enhanced dollar cost averaging (EDCA) feature ....” (Am. com-pl. ¶¶6-7, 19.) Additionally, plaintiffs have alleged a misrepresentation with respect to the timing of the withdrawal of funds as well as a concealment of fees and commissions and the volatile nature of the investment. (Id. at ¶¶8-10,12, 19.)

Plaintiffs have alleged scienter — “co-defendants Shupp and Brian knew that the issuance of [the EDCA] feature was a critical part of the investment strategy” and that they “were aware of the falsity of their misrepresentation [with regard to the EDCA, the timing for the withdrawal of funds and the fees, commissions and nature of the investment].” (Id. at ¶¶6-13, 19, 26.)

Plaintiffs have also alleged intent by defendants to induce action — “[t]he misrepresentation was made for the purposes of inducing a sale.” (Id. at ¶¶22, 27.)

Finally, plaintiffs have alleged justifiable reliance upon the alleged misrepresentations as well as damages. They aver that “[i]t was the intention of the parties at the time issued that the policy would contain a feature known as an enhanced dollar cost averaging (EDCA) feature....” (Id. at ¶6.) Reliance on the other alleged misrepresentations may reasonably be inferred from the referenced paragraphs. Paragraph 17 refers to a specific monetary loss.

Because plaintiffs have adequately pled this cause of action, defendants’ first preliminary objection will be overruled.

Next, defendants ask the court to dismiss Count IV, breach of contract, based on three grounds: (i) lack of specificity; (ii) failure to state a claim; and (iii) failure to attach the writing to the pleading.

The purpose of pleadings is to place the defendants on notice of the claims upon which they will have to defend. Carlson v. Community Ambulance Services Inc., 824 A.2d 1228, 1232 (Pa. Super. 2003). “Under Pennsylvania’s fact pleading system, the complainant need only state the material facts upon which a cause of action is based.” Grossman v. Barke, 868 A.2d 561, 569 (Pa. Super. 2005) (citing Pa.R.C.P. 1019(a)). In determining whether the allegations of the complaint have been stated with adequate specificity, one portion of the complaint should not be examined in isolation and should instead “be read in context with all other allegations in that complaint.” Rachlin v. Edmisin, 813 A.2d 862, 870 (Pa. Super. 2002). “Only then can the court determine whether the defendant has been put [on] adequate notice of the claim upon which he must defend.” Grossman, 868 A.2d at 569. (citation omitted)

To state a cause of action for breach of contract, the plaintiff must allege: (1) the existence of a contract, including its essential terms; (2) a breach of the duty imposed by the contract; and (3) damages resulting from that breach. Boyd v. Rockwood Area School District, 907 A.2d 1157, 1165 (Pa. Commw. 2006). (citation omitted) “While not every term of a contract must be stated in complete detail, every element must be specifically pleaded.” Pennsy Supply Inc. v. American Ash Recycling Corp., 895 A.2d 595, 600 (Pa. Super. 2006).

The allegations of Count IV state:

“(37) The averments of paragraphs 1-36 above are incorporated by reference.
“(38) Plaintiff (sic) needed the specific policy features referenced in [paragraph] 6 above.
“(39) The policy was not issued as requested.
“(40) Co-defendants knew that these features were essential to the policy.
“(41) The defendants represented that plaintiff’s (sic) investment was removable at any time after the first seven years.
“(42) This feature was in fact not part of the contract provided.” (Am. compl. ¶¶37-42.)

Having reviewed all of plaintiffs’ allegations and arguments regarding the breach of contract claim, it is unclear whether plaintiffs are asserting that defendants breached some specific provision of the Preference Plus Select Variable Annuity, policy no. 550346153, some term of another agreement between the parties, or both. Plaintiffs’ failure to attach a copy of the cited policy, or to quote its pertinent provisions, makes the task of deciphering this claim even more difficult. For example, at paragraphs 38 through 42 above, plaintiffs refer to two specific features which were not included in the annuity. Such allegations suggest that the parties had an agreement whereby defendants agreed to furnish an annuity with certain required features in exchange for the payment of a premium. If the failure to provide such a policy is what plaintiffs contend is actionable, it would appear that the agreement which was breached was this initial agreement and not any specific term of the policy itself. This approach is consistent with the arguments presented in plaintiffs’ memorandum. (See pi. mem. of 1., at 7-8.) Plaintiffs further argue that defendants failed or refused to comply with instructions as to management of the policy as set forth in paragraphs 14 through 16 of the amended complaint. {Id. at 8.) Again, it cannot be determined from the pleading if specific policy provisions govern its management or if this purported dereliction is a breach of an agreement apart from the policy.

If plaintiffs allege defendants breached an agreement other than the annuity policy itself, it is incumbent upon them to plead whether such an agreement was oral or written, the pertinent terms and any other facts necessaiy to meet the requirements of Pennsylvania Rule of Civil Procedure 1019.

Under these circumstances, defendants’ preliminary objection on the ground of lack of specificity will be sustained and plaintiffs will be granted leave to amend.

In the third preliminary objection, defendants posit that Count V, breach of fiduciary duty of good faith and fair dealing, is legally insufficient and must be dismissed. Further, they contend that no facts have been pled which would establish a fiduciary relationship. Plaintiffs, for their part, argue that a fiduciary relationship was created because an agency relationship as well as a confidential relationship existed between the parties. (PI. mem. of L, at 10-11.)

Defendants cite Garvey v. National Grange Mutual Insurance Company, 1995 WL 115416 (E.D. Pa. March 16, 1995) for the proposition that, “No Pennsylvania law establishes a fiduciary duty based on the duty of good faith and fair dealing. Thus, . . . [an] alleged failure to exercise the duty of good faith and fair dealing does not give rise to an actionable claim for a breach of fiduciary duty.” Id. at *6. Garvey held that a fiduciary relationship was not automatically created by the mere fact an insured and insurer entered into an insurance contract.

The courts of this Commonwealth unequivocally hold that a breach of fiduciary duty claim against an insurer by an insured is synonymous with a breach of contractual duty of good faith and fair dealing. Gedeon v. State Farm Mutual Automobile Insurance Company, 410 Pa. 55, 59, 188 A.2d 320, 322 (1963). As such, a breach of fiduciary duty claim is redundant of a breach of contract claim. Id. Moreover, no fiduciary relationship exists between an insurer and its insured. Id. Instead, the relationship between the insured and insurer is one of buyer and seller. Id. Accordingly, no fiduciary relationship automatically arises between plaintiffs and defendants by virtue of their relationship as insured and insurer.

Plaintiffs concede the correctness of the proposition referenced in Garvey, but argue that a fiduciary relationship arose between the parties as a result of their “underlying relationship.” (PL mem. of 1., at 9.)

A fiduciary relationship may arise out of (1) a confidential relationship between the parties or (2) a principal-agent relationship between them. eToll Inc. v. Elias/Savion Advertising Inc., 811 A.2d 10, 21-22 (Pa. Super. 2002).

The Pennsylvania Supreme Court outlined the parameters of the principal-agent relationship as follows:

“The law is clear in Pennsylvania that the three basic elements of agency are: ‘the manifestation by the principal that the agent shall act for him, the agent’s acceptance of the undertaking and the understanding of the parties that the principal is to be in control of the undertaking. ’ Scott v. Purcell, 490 Pa. 109, 117, 415 A.2d 56, 60 (1980) (quoting Restatement (Second) of Agency §1, comment b (1958); see also, Reid v. Ruffin, 503 Pa. 458, 463, 469 A.2d 1030, 1033 (1983). ‘Agency results only if there is an agreement for the creation of [the] fiduciary relationship with control by the beneficiary. ’ Smalich v. Westfall, 440 Pa. 409, 413, 269 A.2d 476, 480 (1971). The burden of establishing an agency relationship rests with the party asserting the relationship. Scott, 490 Pa. at 117 n.8, 415 A.2d at 61 n.8. ‘An agency relationship is a fiduciary one, and the agent is subject to a duty of loyalty to act only for the principal’s benefit.’ Sutliff v. Sutliff, 515 Pa. 393, 404, 528 A.2d 1318, 1323 (1987) (citing Restatement (Second) of Agency §387 (1958)). Thus, in all matters affecting the subject of agency, the agent must act with the utmost good faith in furthering and advancing the principal’s interests, including a duty to disclose to the principal all relevant information. See Sylvester v. Beck, 406 Pa. 607, 610-11, 178 A.2d 755, 757 (1962).” Basile v. H & R Block Inc., 563 Pa. 359, 367-68, 761 A.2d 1115, 1120 (2000).
The court stressed, however, that not all acts on behalf of another give rise to an agency relationship:
“The special relationship arising from an agency agreement, with its concomitant heightened duty, cannot arise from any and all actions, no matter how trivial, arguably undertaken on another’s behalf. Rather, the action must be a matter of consequence or trust, such as the ability to actually bind the principal or alter the principal’s legal relations. Indeed, implicit in the long-standing Pennsylvania requirement that the principal manifest an intention that the agent act on the principal’s behalf is the notion that the agent has authority to alter the principal’s relationships with third parties, such as binding the principal to a contract.” Id. at 370, 761 A.2d at 1121. (emphasis in original)
“The Supreme Court has determined that a confidential relationship and the resulting fiduciary duty may attach ‘whenever one occupies toward another such a position of advisor or counsellor as reasonably to inspire confidence that he will act in good faith for the other’s interest.’” Basile v. H & R Block Inc., 777 A.2d 95, 101-102 (Pa. Super. 2001) (citing Brooks v. Conston, 356 Pa. 69, 76, 51 A.2d 684, 688 (1947) quoted in Biddle v. Johnsonbaugh, 444 Pa. Super. 450, 456, 664 A.2d 159, 162 (1995)). “In some cases, [for example], as between . . . principal and agent, the existence of a confidential relationship is a matter of law.” Id. at 102. (citation omitted) Where the principal-agent relationship does not exist, the Supreme Court has recognized “that those who purport to give advice in business may engender confidential relations if others, by virtue of their own weakness or inability, the advisor’s pretense of expertise, or a combination of both, invest such a level of trust that they seek no other counsel.” Id. (citations omitted) A confidential relationship appears “when the circumstances make it certain the parties do not deal on equal terms, but, on the one side there is overmastering influence, or, on the other, weakness, dependence or trust, justifiably reposed[.]” Frowen v. Blank, 493 Pa. 137, 145, 425 A.2d 412, 416-17 (1981). (citations omitted)

In their amended complaint, plaintiffs have not alleged sufficient facts from which one could reasonably infer that a fiduciary relationship existed between plaintiffs and defendants, nor have plaintiffs alleged any facts to support a reasonable inference that defendants acted as plaintiffs’ agents. On the contrary, plaintiffs specifically aver that Mss. Brian and Shupp acted as agents for the defendant corporations. (Am. compl. ¶2.) Plaintiffs have failed to plead facts indicating that their relationship with defendants satisfied the legal requirements to establish a confidential relationship as set forth in eToll; Basile and Frowen. There are no allegations from which to infer that plaintiffs invested such a level of trust by virtue of their own weakness or inability, or defendants’ pretense of expertise, to warrant the conclusion that a confidential relationship was formed. Further, plaintiffs cite nothing to suggest that the parties dealt on unequal terms, or that there existed any overmastering influence. While plaintiffs may have relied on defendants to include certain provisions in the annuity, such reliance can be found in every transaction between two parties. Plaintiffs have failed to allege anything other than an arms-length relationship with defendants. In the absence of allegations sufficient to show that a special relationship or that a principal-agent relationship was created, defendants’ preliminary objection to Count V will be sustained and plaintiffs will be permitted to amend their pleading.

Lastly, defendants seek to have plaintiffs’ requests for attorneys’ fees and costs in Counts I, II and V stricken for lack of a statutory basis permitting recovery. “Under the American Rule, applicable in Pennsylvania, a litigant cannot recover counsel fees from an adverse party unless there is express statutoiy authorization, a clear agreement of the parties, or some other established exception.” Trizechahn Gateway LLC v. Titus, 671 Pa. 637, 976 A.2d 474, 482-83 (2009). (citation omitted)

Plaintiffs have failed to present any basis which would permit recovery of attorneys’ fees in Counts I, II and V. For those causes of action, as pled, there is neither express statutoiy authorization nor a clear agreement of the parties to permit the recovery of counsel fees. Plaintiffs rely upon a trial court decision for the proposition that “[cjounsel fees may be awarded ‘as a sanction against another participant for dilatory, obdurate or vexatious conduct during the pendency of a matter.”’ (PL mem. off, at 13) (citing Waterware Corp. v. Ametek/US Gauge Division, 51 D.&C.4th 201, 217 (Phila. Cty. 2001) (citing 42 Pa.C.S. §2503(7)). However, plaintiffs have failed to plead any such conduct on the part of defendants. Further, since defendants have simply exercised their right to challenge the validity of plaintiffs’ claims by filing preliminary objections, there is no legitimate basis to assert that such conduct is dilatory, obdurate or vexatious.

This preliminary objection will be sustained and the claim for attorneys’ fees in Counts I, II and V will be stricken.

ORDER

And now, October 29,2009, upon consideration of the preliminary objections filed by defendants, MetLife a/k/a Metropolitan Life Insurance Company, Metlife Securities Inc., Carol E. Brian and Shannon Shupp, and the response of plaintiffs, Paul D. Smith and Eleanor Smith, co-trustees of the Mark D. Smith Irrevocable Supplemental Needs Trust, the court orders that:

(1) The first preliminary objection is overruled.

(2) The second preliminary objection is sustained.

(3) The third preliminary objection is sustained.

(4) The fourth preliminary objection is sustained. Plaintiffs’ claim for attorneys’ fees in Counts I, II and V is stricken.

Plaintiffs are granted 20 days from the date of this order to file a second amended complaint.

      . Until the basis for the breach of contract claim is clarified, the court cannot address the two other issues raised with respect to Count IV.

      . Pennsylvania law states that parties to an arms-length transaction generally do not owe fiduciary duties to one another. A business transaction alone is not enough to establish a fiduciary relationship; otherwise, every breach of contract would support such a claim. eToll, 811 A.2d at 23. There is a “crucial distinction” between the special confidence entered into in a fiduciary relationship and “entering [into] an arms[-]length commercial agreement, however important its performance may be to the success of one’s business.” Id.

      . The prevailing party is entitled to recover its costs. In re Farnese, 948 A.2d 215, 217 (Pa. Commw. 2008). Therefore, there is no merit to defendants’ objection in this respect.


source: Caselaw Access Project

author: ST. JOHN, J.,

license: Public Domain

text:
    City of Sharon Sanitary Authority v. Office of Open Records

      William J. Madden, for petitioner.

      William G. McConnell Jr., for respondents.
    January 26, 2010
   ST. JOHN, J.,

A sewer authority denied a request for a list of people with delinquent sewer accounts. The authority wanted to release the names, but its attorney was concerned that it would violate consumer protection laws and expose the authority to civil damages. Release of the requested information, pursuant to a court order, however, would insulate the authority from damages and/or civil penalties. It is this court’s holding after close review of the respective statutes, that the relevant consumer protection statutes are not in conflict with Pennsylvania’s new Right-to-Know Law. Hence, the de novo appeal will be denied and the authority will be ordered to release the requested information.

The City of Sharon Sanitary Authority is a municipal authority created by the City of Sharon around September of2007. Part of the authority’s function is to maintain financial records it inherited from the city regarding uncollected debt for prior sewer accounts, and to maintain financial records for property owners who purchased sewer services in the City of Sharon thereafter. In addition, the authority is mandated to collect past and future debts for such services.

Courtney Lynn Anderson is a reporter for The Herald who attends the monthly board meetings of the authority as part of her duties as a reporter. She has also written various articles in The Herald about the delinquent accounts owed to the authority. As part of her investigative reporting, Ms. Anderson submitted a request on June 3, 2009 as an individual, pursuant to Pennsylvania’s Right-to-Know Law, seeking access to delinquent sewer accounts, including the names and addresses of those individuals who were delinquent. Obviously, there is a strong likelihood that she would write follow-up articles disclosing various information including the names of those individuals who are delinquent, as she has before and after the de novo hearing on her request. The authority denied her request upon the sage advice of its solicitor.

It is uncontested that the authority is in favor in principle of releasing the information to respondent because the authority believes that it will result in higher collections on past due accounts. It is fearful, however, that it will be liable under various consumer protection statutes.

The sole question presented here is whether Pennsylvania’s Right-to-Know Law, when read in conjunction with these consumer protection statutes, prohibits the disclosure of this delinquent account information. This is an issue of first impression that can only be resolved by comparing the language in the respective statutes. Chief Justice Castille aptly defined the court’s role when interpreting statutes as follows:

“ ‘The object of statutory interpretation is to determine the intent of the General Assembly.’ PennDOT v. Weaver, [590 Pa. 188, 195] 912 A.2d 259, 264 (2006) (citing 1 Pa.C.S. §1921(a)). The touchstone of statutory interpretation is that where a statute is unambiguous,' the judiciary may not ignore the plain language ‘under the pretext ofpursuing its spirit,’ 1 Pa.C.S. §1921(b), for the language of a statute is the best indication of legislative intent. Weaver, 590 Pa. at 195, 912 A.2d at 264. Words and phrases should be construed in accordance with their common and approved usage. 1 Pa.C.S. §1903(a). When the words of a statute are clear, there is no need to look beyond the plain meaning of a statute. See e.g, Commonwealth v. McClintic, 589 Pa. 465, 472, 909 A.2d 1241, 1245 (2006) (citing Sternlicht v. Sternlicht, 583 Pa. 149, 158, 876 A.2d 904, 909 (2005) and Ramich v. Workers’ Comp. Appeal Bd. (Schatz Elec. Inc.), 564 Pa. 656, 662, 770 A.2d 318, 322 (2001)). If a statute is deemed ambiguous, however, resort to principles of statutory construction is appropriate. 1 Pa.C.S. §1921(c); Commonwealth v. Packer, 568 Pa. 481, 488-89, 798 A.2d 192, 196 (2002).” Colville v. Allegheny County Retirement Board, 592 Pa. 433, 444, 926 A.2d 424, 430-31 (2007) (emphasis added); quoted with approval in Commonwealth v. Cox, 983 A.2d 666, 703 (Pa. 2009).

Moreover, the court must construe every statute, “if possible, to give effect to all of its provisions.” 1 Pa.C.S. §1921(a). Sterling Acceptance Co. v. Grimes, 194 Pa. Super. 503, 168 A.2d 600 (1961). Thus, the court’s initial task is to compare and review the relevant portions of Pennsylvania’s Right-to-Know Law with the consumer protection statutes to see if there is any ambiguity and/ or if they can be interpreted in pari materia.

Access to public records in Pennsylvania was previously governed by a law that was enacted in 1957. 65 P.S. §§66.1 through 66.4 (Purdon’s 2000). This law was substantially revamped by the new “Right-to-Know Law” which became effective February 14,2008,65 P.S. §67.101 et seq. (Purdon’s Supp. 2009). The goal of the new law was to expand and streamline access to public records. Accordingly, the new law created the presumption that a “record” possessed by a local agency “shall be presumed to be a public record.” Id. at section 67.305(a). The legislature, however, provided that this presumption is removed if the record is exempt under section 67.708, protected by a privilege and/or is “exempt from disclosure under any federal or state law or regulation or judicial order or decree.” Id. at section 67.102. (See definition of “public record.”) The legislature also imposed the burden of proving that a record was exempt upon the government agency. Id. at section 67.708(a) (1).

The solicitor for the authority posits that the list of past due account holders is exempt from disclosure under part of the definition of a “public record.” A public record is defined as follows:

“Public record. A record, including a financial record, of a Commonwealth or local agency that: (1) is not exempt under section 708; (2) is not exempt from being disclosed under any other federal or state law or regulation or judicial order or decree; or (3) is not protected by a privilege.” Id. at section 67.102. (emphasis added)

Notably, section 708 of the Act not only imposes the burden upon the authority to prove by a preponderance of the evidence that a record is exempt from public access, but it also contains a very extensive list of exemptions. Id. at section 67.708(a) through (b). Nonetheless, the authority does not argue that any of these well-defined exemptions prevent disclosure in this case. Instead, it argues that these records cannot be disclosed because they do not fall under the definition for a public record because they are already exempt from disclosure under federal and state law. In reviewing the new Right-to-Know Law it is noteworthy that the legislature did not specifically list the statutes referred to by the authority under the section 67.708 exemptions where it listed in great detail some of the other circumstances where records were not to be disclosed. This, of course, creates the inference that the legislature had not intended that the consumer protection statutes referred to by the authority prevent disclosure under the Right-to-Know Law. Furthermore, in reviewing the consumer protection statutes, it is important to view those statutes in light of their stated legislative intent, and the presumption of disclosure in the Right-to-Know Law as well as its prohibition that the intended use of the public record is generally irrelevant. Id. at sections 67.305(a) and 67.302(b). Thus, the authority cannot generally deny access to a record even if they know that the requestor will do something with the information that the authority could not itself do, such as in this situation.

The applicable consumer protection statutes are the following debt collection statutes:

(1) The Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §1692 etseq.; and

(2) The Pennsylvania Fair Credit Extension Uniformity Act (FCEUA), 73 P.S. §2270.1 et seq.

The Fair Debt Collection Practices Act was enacted by Congress to curb abuses by debt collectors. 15 U.S.C. § 1692(a). Thus, the FDCPA was created to eliminate abusive debt collection practices, to prevent a competitive advantage to those who were using abusive collection practices, and to create state action to protect consumers against abusive debt collection practices. Id. at section 1692(e). The FDCPA does not permit conduct by a debt collector “the natural consequence of which is to harass, oppress, or abuse any person in connection with a collection of a debt.” Id. at section 1692d. This section specifically prohibits: “(3) The publication of a list of consumers who allegedly refused to pay debts, except to a consumer reporting agency or to persons meeting the requirements of section 1681a(f) or 1681b(3) of this title.”

The FDCPA also prohibits certain communications by the debt collector with third parties without the consent of the consumer “or the express permission of the court of competent jurisdiction, ” if the communication is “in connection with the collection of any debt, . ...” Id. at section 1692c(b). (emphasis added) The clear language and intent of these prohibitions is to prevent abusive debt collection practices. All of the prohibited acts are illegal only if done “in connection with the collection of a debt.” Therefore, under a plain reading of the FDCPA, the release of information by the authority of delinquent account holders to respondent would be for the purpose of complying with the Right-to-Know Law, not for the purpose of collecting on the debt. Obviously, Congress was not and is not attempting to prevent the public’s access to public records, even though the consequence may be that the information is published. These statutes were enacted to protect two separate and distinct interests. First, the consumer from unfair, deceptive and/or abusive debt collection practices. Secondly, the public’s right to access information about the financial records of local agencies. Similarly, the Commonwealth of Pennsylvania enacted the FCEUAto declare what constitutes “unfair methods of competition and unfair or deceptive acts or practices with regard to the collection of debts.” 73 P.S. §2270.2. The relevant portions according to the authority of Pennsylvania’s statute are as follows:

“(b) By creditors. — With respect to debt collection activities of creditors in this Commonwealth, it shall constitute an unfair or deceptive debt collection act or practice under this act if a creditor violates any of the following provisions:
“(3) Except as provided in paragraph (1), without the prior consent of the consumer given directly to the creditor or the express permission of a court of competent jurisdiction or as reasonably necessary to effectuate a post-judgment judicial remedy, a creditor may not communicate, in connection with the collection of any debt, with any person other than the consumer, his attorney, a consumer reporting agency if otherwise permitted by law, a debt collector, the attorney of the debt collector or the attorney of the creditor.
“(4) A creditor may not engage in any conduct the natural consequence of which is to harass, oppress or abuse any person in connection with the collection of a debt. Without limiting the general application of the foregoing, the following is a violation of this paragraph:
“(iii) The publication of a list of consumers who allegedly refused to pay debts, except to a consumer reporting agency. . . .” FCEUA, section 2270.4(b)(3) and (4) (iii). (emphasis added)

As in the federal statute, Pennsylvania’s prohibitions are triggered by communication or other practices, such as publishing lists of delinquent debtors, only if this activity is done “in connection with the collection of any debt.” Once again, the release of information pursuant to the Right-to-Know statute is not in conflict with Pennsylvania’s consumer protection statute which is designed to prohibit and curb deceptive unfair debt collection practices. The authority clearly would not be attempting to subvert either the Pennsylvania or Federal consumer protection statutes, nor would it in fact be violating such statutes, by releasing information pursuant to the public’s right to access its financial records. Moreover, the fact that the information that it releases may ultimately be published by the requestor is not a factor in the foregoing analysis and may not be a reason to deny disclosure.

Accordingly, it is the holding of this court that there is no ambiguity in either the FDCPA and the FCEUA as they relate to disclosure of information pursuant to the Pennsylvania Right-to-Know Law. The release of the overdue account information by the authority does not violate the plain language and/or the legislative intent underlying both remedial statutes. The court need not therefore look beyond the plain meaning of these statutes.

In conclusion, the authority must disclose the delinquent account records requested by the respondent.

Hence this order:

ORDER

And now, January 26, 2010, it is hereby ordered and decreed that the appeal of the City of Sharon Sanitary Authority is denied. It is further ordered that the City of Sharon Sanitary Authority shall release the requested information to the respondent, Courtney L. Anderson, within 30 days of the date of this order.

      . It is uncontested that the authority is an “agency” and that the information sought is a “record” and a “financial record” as all of those terms are defined in section 67.102.


author: NEALON, J.,

text:
    American Homecare Supply Mid-Atlantic LLC v. Gannon

      David R. Fine and Amy L. Groff, for plaintiff.

      Richard S. Bishop, for defendant.
    December 15, 2009
   NEALON, J.,

A respiratory products and medical equipment supplier seeks to preliminarily enjoin its former clinical liaison from continuing her employment with a competing provider based upon the non-competition clause contained in her employment agreement. The employee contends that her restrictive covenant is unenforceable since it was executed after she began her employment with her former employer and was not specifically assigned by that employer’s parent company when it sold its regional healthcare division to a new parent company six months prior to her termination of employment.

The non-competition agreement was sufficiently supported by new consideration in that the employee received a promotion and raise in exchange for the covenant not to compete. Furthermore, since the foregoing sale of the membership interest units of the limited liability company employer was akin to a stock sale rather than an asset sale, the covenant is enforceable by the former employer without the necessity of an express assignment. However, inasmuch as the sole legitimate business interest warranting protection by the non-competition covenant is the customer goodwill that the employee developed and maintained with eight identified referral sources, the scope of the restrictive covenant will be modified to prohibit employment for six months only to the extent that the defendant/employee is barred from any business dealings or contact with those eight accounts. Consequently, the non-competition agreement will be enforced as reformed and the request for preliminary injunctive relief will be granted as modified.

I. PROCEDURAL HISTORY

On November 25,2009, plaintiff American Homecare Supply Mid-Atlantic LLC d/b/a Young’s Medical Equipment Company filed a complaint against its former employee, defendant Tonya Gannon, and presented a motion in motion court seeking the issuance of a special preliminary injunction enjoining Gannon from working for Cook’s Medical Care until such time as a hearing could be conducted. Since the materials submitted for review did not establish (a) whether the May 2009 sale of American Homecare by American Homecare’s parent company, Air Products and Chemicals Inc., to Landauer Healthcare Holdings Inc. was an asset sale or a stock sale, or (b) in the event of an asset sale, whether the restrictive covenant in Gannon’s “employment agreement” was specifically assigned by Air Products to Landauer, we denied American Homecare’s motion for a special preliminary injunction based upon Hess v. Gebhard & Co. Inc., 570 Pa. 148, 166-67, 808 A.2d 912, 922 (2002). In denying American Homecare’s motion, we also scheduled a hearing on American Homecare’s request for a preliminary injunction for December 2, 2009.

On that date, testimony was received from Gannon, American Homecare’s district sales manager, Wendy Connor, and its account executive/clinical liaison, Edward J. Kaminski, and various exhibits were introduced into evidence. The parties were afforded leave of court to supplement the record with memoranda of law by no later than on December 8, 2009, and upon the filing of those briefs, the motion for a preliminary injunction became ripe for disposition. The factual findings set forth below are based upon the evidence which has been deemed credible and relevant.

II. FINDINGS OF FACT

(1) American Homecare is engaged in the business of selling respiratory products and supplies and durable medical equipment in Northeastern Pennsylvania and other markets. In 2000, American Homecare acquired Young’s Medical Equipment Company and in 2002, Air Products became the parent company of American Home-care. (Transcript of proceedings (T.P.) on 12/2/09, pp. 6, 16, 42-43; stipulation of facts (plaintiff’s exhibit no. 1), ¶3.)

(2) Prior to July 2, 2004, Gannon was employed by Apria Healthcare d/b/a Wasserotts which was likewise engaged in the business of selling respiratory products and supplies and durable medical equipment in Northeastern Pennsylvania. American Homecare recruited Gannon from Apria Healthcare d/b/a Wasserotts to American Homecare effective July 2,2004. (T.P. 12/2/09, pp. 92, 143.)

(3) From July 2, 2004 through December 6, 2004, Gannon was employed by American Homecare as a customer service representative and was compensated at a rate of $11 per hour or $22,800/year based upon a 40-hour work week. (Id., pp. 8-9.)

(4) On December 6, 2004, Gannon was promoted by American Homecare to the position of clinical liaison at a base salary of $35,000 per year and participation in American Homecare’s employee benefit programs. In connection with that promotion, American Homecare and Gannon executed an “employment agreement” on December 6, 2004. (Id., pp. 6, 8-9, 18, 51-52, 95, 97-100; stipulation of facts, ¶¶5-6; plaintiff’s exhibit no. 4.)

(5) Section 1.4(b) of the “employment agreement” provides that American Homecare may terminate Gannon’s “employment during the employment period for cause or without cause.” The employment agreement does not quantify or otherwise identify a specific period of time as the “employment period” for Gannon. However, section 1.4(c) provides that Gannon “may terminate employment by giving [American Homecare] at least 30 days advance written notice of the termination.” (Plaintiff’s exhibit no. 4, p. 2.)

(6) Article 2 of the employment agreement entitled “confidential information; non-solicitation; non-competition” contains a restrictive covenant with respect to Gannon’s post-termination employment. Under section 2.1(b) of the agreement, Gannon agreed that “in the event that [Gannon] voluntarily terminates her employment, for the six-month period beyond voluntary termination she shall not.. . directly or indirectly ... be employed or engaged by, or otherwise affiliated or associated with . . . any other corporation, partnership, proprietorship, firm, association or other business entity, or otherwise engage in any business anywhere within 50 miles of the Scranton, PA office which . . . (i) is engaged in by [American Homecare]” or “(ii) is related to any business engaged in by [American Homecare] ....” As per section 2.1(e) of the agreement, Gannon acknowledged and agreed “that the restrictions contained in this article 2 are reasonable and necessary to protect and preserve the legitimate interests, properties, goodwill and business of [American Homecare]” and “that [American Homecare] would not have entered into this agreement in the absence of such restrictions.” (Id., p. 3.)

(7) In her capacity as a clinical liaison, Gannon operated from American Homecare’s office at 1000 Jefferson Avenue, Scranton, and was responsible for developing and maintaining referral source relationships for the sale of American Homecare’s respiratory products and supplies and durable medical equipment. During the course of her employment with American Homecare, Gannon was responsible for such referral sources or “identified accounts” at Community Medical Center, Mercy Hospital, Moses Taylor Hospital, Mountain View Care Center, Dr. Nat Levinson, Dr. Greg Cali, Dr. S. Ramakrishna, and Dunmore Health Care Center. (T.P. 12/2/09, pp. 17, 19, 20, 21, 24, 96-97, 103-106; stipulation of facts, ¶7.)

(8) American Homecare funded Gannon’s ability to cultivate and preserve referral relationships with the foregoing eight accounts and thereby enabled her to develop customer goodwill in the process. (T.P. 9/2/09, pp. 22-24, 29, 34, 80-82, 89-90.)

(9) On April 15, 2008, American Homecare made a business decision to discontinue certain supplies in its product line, specifically, diabetic, urological and ostomy supplies, bath equipment, and certain pediatric services. (Id., pp. 6, 37-39, 40, 59-64; stipulation of facts, ¶4.)

(10) On April 16, 2009, Air Products’ vice-president of human resources forwarded a letter to Gannon advising her that Air Products was “in the process of identifying a new high valued owner for the North American Healthcare Business” and that the continued performance of that business would “have a critical impact on the proceeds we can realize from the divestiture.” The correspondence informed Gannon that in an effort “to preserve the services of key employees” of American Homecare’s business, Air Products had “decided to provide a special incentive arrangement for a very restricted number of the most affected people in the business, including you.” Specifically, in the event that Air Products successfully sold that business prior to December 31,2009, Gannon was to receive $7,154.17 on “the earlier of one month after closing on any such sale ... or your termination date,” provided that Gannon continued to perform in accordance with American Homecare’s Business Operating Plan. (T.P. 12/2/09, pp. 47-50, 130-33; defendant’s exhibit no. 1.)

(11) On May 15, 2009, Landauer acquired American Homecare from Air Products pursuant to a “membership interest purchase agreement” dated May 13, 2009 between Landauer Healthcare Holdings Inc., LandauerMetropolitan Inc., Amhealth Group LLC, American Homecare Supply LLC, and Air Products and Chemicals Inc., with respect to the sale of the membership interests of Genox Homecare LLC and American Homecare Supply Mid-Atlantic LLC. (T.P. 12/2/09, p. 5; stipulation of facts, ¶2; affidavit of Brian M. Hand, exhibit A.)

(12) According to section 2.1 of the membership interest purchase agreement dated May 13,2009, the consideration provided for Landauer’s acquisition of American Homecare was a confidential sum paid to Air Products for the purchase of the American Homecare Supply Mid-Atlantic LLC “units,” which are defined by article 1 of the agreement as “ 100 units issued by [American Home-care Supply Mid-Atlantic LLC] in the name of [American Homecare Supply LLC] representing 100 percent of the issued and outstanding membership interests of [American Homecare Supply Mid-Atlantic LLC].” The phrase “membership interest” is defined by the agreement as meaning “[AmericanHomecare Supply LLC’s] membership interest in [American Homecare Supply Mid-Atlantic LLC], constituting ownership of 100 percent of the issued and outstanding equity of [American Home-care Supply Mid-Atlantic LLC] . . . .” Section 2.2.4 of the agreement entitled “allocation of purchase price” states that the “allocation of the purchase price set forth on schedule 2.2.4 shall be controlling for tax purposes and shall be utilized by both parties in preparing Internal Revenue Service Form 8594 pursuant to section 1060(b) of the Internal Revenue Code and the Treasury Regulations issued thereunder.” (Affidavit of Brian M. Hand, exhibit A, pp. 2, 6,9, 11.)

(13) Article 3 of the membership interest purchase agreement governs “representations and warranties of sellers” with regard to American Homecare. Section 3.17 of the agreement addresses employees of American Homecare and states that “[ejxcept as set forth on schedule 3.17, [American Homecare Supply Mid-Atlantic LLC] is not a party to any written employment agreement with any current employee of [American Homecare Supply Mid-Atlantic LLC].” Schedule 3.17 attached to the • agreement identifies Gannon as an American Homecare employee with a written employment agreement. (Id., pp. 13, 17-18 and schedule 3.17 atp. 3.)

(14) S ection 8.1.1 of the membership interest purchase agreement obligates Landauer to continue to employ American Homecare’s employees, but with the express caveat that American Homecare Supply Mid-Atlantic LLC “will continue to employ the employees on an at-will basis” and that Landauer “does not guarantee to any employee continuing employment for any definite term.” (Id., p. 25.)

(15) The membership interest purchase agreement dated May 13, 2009 does not contain a specific assignment by Air Products or American Homecare of Gannon’s restrictive covenant, or any other non-competition agreement executed by any American Homecare employee, to Landauer. In fact, the only reference to a non-competition agreement or restrictive covenant contained in the membership interest purchase agreement concerns a non-competition agreement executed by Air Products as the “seller guarantor” and delivered to Landauer at the time of closing on May 15, 2009. (Id., pp. 6, 13.)

(16) One month after Air Products’ sale of American Homecare to Landauer, Gannon received her special incentive payment of $7,154.17, as per the foregoing letter of April 16, 2009. (T.P. 12/2/09, p. 156.)

(17) Prior to Air Products’ sale of American Homecare to Landauer, Gannon received a bi-weekly paycheck issued by American Homecare. Subsequent to Air Products’ sale of American Homecare to Landauer, Gannon continued to receive a bi-weekly paycheck issued by American Homecare. Additionally, her employment duties and “identified accounts” responsibilities as a clinical liaison for American Homecare remained the same after Landauer’s purchase of American Homecare from Air Products. (Id., pp. 83, 88-89, 93, 108-10, 123; defendant’s exhibit nos. 2A-2B; plaintiff’s exhibit nos. 5-6, 10.)

(18) FollowingAir Products’ sale of American Home-care to Landauer, Gannon experienced a change in her medical coverage, a reduction in her pension plan benefit opportunities in that her employer no longer matched her 40IK plan contribution, and a decrease in her mileage expense reimbursement rate. (T.P. 12/2/09, pp. 71 -74, 83-84, 154-57.)

(19) In the late summer of2009, American Homecare’s district sales manager, Wendy Connor, confronted Gannon regarding allegations that she was reportedly funneling business to competing providers of respiratory products and supplies and durable medical equipment. Gannon steadfastly denied that accusation and American Homecare’s subsequent investigation did not substantiate the allegations. (Id., pp. 65-68, 138.)

(20) On October 12,2009, Gannon forwarded an email to American Homecare’s district sales manager, Wendy Connor, stating “[p] lease accept this as my official letter of resignation” and indicating that Gannon’s “last day of work will be November 13, 2009.” (Id., pp. 26, 113-14; stipulation of facts, ¶8 and tab “A”.)

(21) As of the date of her resignation on October 12, 2009, Gannon had accepted an offer of employment as a clinical liaison with Cook’s Medical Care. Cook’s is engaged in the business of selling respiratory products and supplies and durable medical equipment, as well as other products and retail operations not offered by American Homecare, and is located at 785 Wyoming Avenue, Kingston, Pennsylvania, which is situated within 50 miles of American Homecare’s facility at 1000 Jefferson Avenue, Scranton, Pennsylvania. (T.P. 12/2/09, p. 120; stipulation of facts, ¶¶10-11.)

(22) On October 12, 2009 and November 13, 2009, Wendy Connor reminded Gannon of the restrictive covenant/non-competition clause set forth in section 2.1 of her employment agreement dated December 6,2004. In addition, during Gannon’s exit interview on November 13, 2009, American Homecare provided Gannon with a letter advising her of the covenant not-to-compete contained in her employment agreement barring her from engaging in competitive employment or activities within a 50-mile radius of American Homecare’s Scranton office for a period of six months following her termination. (T.P. 12/2/09, pp. 12, 41, 114-15.)

(23) On November 16, 2009, Gannon began her employment as a clinical liaison with Cook’s. (Id., pp. 117, 129.)

(24) On November 19, 2009, American Homecare’s counsel forwarded a certified letter to Gannon stating that American Homecare had verified that Gannon had “visited two of [American Homecare’s] long-standing referral sources” within the restricted territory “for the purpose of soliciting business for [Gannon’s] new employer, Cook’s Medical Care.” American Homecare’s counsel further stated that section 2.1 of Gannon’s employment agreement prohibited her from engaging in such competitive activities within the restricted territory through May 13,2010, and Gannon was cautioned “not to seek referrals to patients seeking respiratory equipment and supplies or durable medical equipment from any other of [American Homecare’s] referral sources in the restricted territory____” The correspondence of November 19,2009 advised Gannon that it constituted “the final warning letter that you will receive regarding this matter” and that American Homecare would take legal action if Gannon “committed] any further violation of [her] legal obligations to [AmericanHomecare].” (Id, p. 116; plaintiff’s exhibit no. 8, pp. 1-3.)

(25) Gannon continues to be employed as a clinical liaison with Cook’s, and in the course of that employment, she contacts and solicits respiratory products/ supplies and durable medical equipment business from the same referral sources and “identified accounts” in Lackawanna County that she serviced during her employment with American Homecare. (T.P. 12/2/09, pp. 117, 126-27; stipulation of facts, ¶9.)

(26) Since the date that Gannon terminated her employment with American Homecare on November 13, 2009, American Homecare has experienced a reduction in clinical liaison referral business in Lackawanna County. (T.P. 12/2/09, pp. 29, 32-34; plaintiff’s exhibit no. 7.)

(27) American Homecare did not establish that Gannon acquired any confidential information or trade secrets from American Homecare during her employment, or that Gannon developed any new or extraordinary skills in selling respiratory products/supplies and durable medical equipment as a result of any specialized training by American Homecare. In fact, Gannon had previously acquired that trade knowledge and developed those industry skills by virtue of her prior employment with Apria Healthcare. (T.P. 12/2/09, pp. 22-24, 96-97, 143.)

(28). In the Lackawanna County market, there are several other providers of respiratory products/supplies and durable medical equipment in addition to American Homecare and Cook’s. (Id., pp. 39, 43-44, 148-49.)

III. DISCUSSION

(A) Standard of Review

To establish its right to the issuance of a preliminary injunction, American Homecare must prove that: (1) an injunction is necessary to prevent immediate and irreparable harm which cannot be adequately compensated by damages; (2) greater injury would result from refusing an injunction than from granting it; (3) an injunction will properly restore the parties to their status as it existed immediately prior to the alleged wrongful conduct; (4) its right to relief is clear, i.e., American Homecare is likely to prevail on the merits; (5) the injunction sought is reasonably suited to abate the offending activity; and (6) a preliminary injunction will not adversely affect the public interest. Pennsylvania Gaming Control Board v. City Council of Philadelphia, 593 Pa. 241, 277-78, 928 A.2d 1255, 1277 (2007); Pennsylvania State Education Association v. Commonwealth, Office of Open Records, 981 A.2d 383, 385 (Pa. Commw. 2009).

Since the harm resulting from the violation of a non-competition agreement is difficult to quantify, “[t]he great weight of modern authority” holds that a party “who has been or will be injured” by the breach of a restrictive covenant “is ordinarily entitled to the equitable remedy of injunction____” Records Center Inc. v. Comprehensive Management Inc., 363 Pa. Super. 79, 86, 525 A.2d 433, 436 (1987). (citation omitted) As the Supreme Court of Pennsylvania has observed, “[i]t is not the initial breach of a covenant which necessarily establishes the existence of irreparable harm but rather the threat of the unbridled continuation of the violation and the resultant incalculable damage to the former employer’s business that constitutes the justification for equitable intervention.” John G. Bryant Co. Inc. v. Sling Testing and Repair Inc., 471 Pa. 1, 7, 369 A.2d 1164, 1167 (1977). Thus, “Pennsylvania courts have uniformly recognized that a violation of a non-competition agreement results in harm which is not compensable by money damages.” Zambelli. Fireworks Manufacturing Co. Inc. v. Wood, 2009 WL 159182 at *16 (W.D. Pa. 2009). Governed by this standard of review, we will consider American Home-care’s request for preliminary injunctive relief.

(B) Restrictive Covenants

A covenant not to compete is a restrictive covenant relied upon by employers to shield their protectable business interests, J. C. Ehrlich Co. Inc. v. Martin, 979 A.2d 862, 864 (Pa. Super. 2009), and “precludes the former employee from competing with his [her] prior employer for a specified period of time and within a precise geographic area.” Hess, 570 Pa. at 157, 808 A.2d at 917. Although post-employment non-competition agreements are not per se unenforceable, Wellspan Health v. Bayliss, 869 A.2d 990, 996 (Pa. Super. 2005), they “are not favored in Pennsylvania and have been historically viewed as a trade restraint that prevents a former employee from earning a living.” Hess, supra; InterMetro Industries Corp. v. Kent, 2007 WL 1140637 at *5 (M.D. Pa. 2007). For that reason, covenants not to compete must be strictly construed against the employer. All-Pak Inc. v. Johnston, 694 A.2d 347, 351 (Pa. Super. 1997); Citadel Broadcasting Co. v. Gratz, 52 D.&C.4th 534, 545 (Lacka. Cty. 2001).

Non-competition covenants are enforceable under Pennsylvania law if: (1) the restrictive covenant is incident to an employment relationship between the parties; (2) the restrictions imposed by the covenant are reasonably necessary for the protection of the employer; and (3) the restrictions imposed are reasonably limited in duration and geographic scope. See Hess, supra; J. C. Ehrlich Co., supra; Citadel Broadcasting, 52 D.&C.4th at 544-45. During the evidentiary hearing on December 2, 2009, Gannon suggested that the non-competition clause at issue is not enforceable inasmuch as it was executed subsequent to her commencement of employment with American Homecare. In her post-hearing brief, Gannon advances two reasons why her covenant not to compete ostensibly does not prohibit her current employment with Cook’s: (1) the covenant was not specifically assigned by Air Products to Landauer as part of the sale of American Homecare; and (2) the six-month period subject to Gannon’s restrictive covenant elapsed on November 15, 2009 (i.e., six months following the Air Products-Landauer closing).

American Homecare submits that the non-competition agreement is valid even though it was signed by Gannon after she began her employment since it was supported by new consideration. American Homecare further posits that an assignment of Gannon’s restrictive covenant would have been required only in the event of an asset sale. Since the Air Products-Landauer transaction involved a transfer of equity interests via the membership interest purchase agreement, American Homecare maintains that an express assignment was unnecessary. Arguing that it has satisfied the criteria for the grant of injunctive relief, American Homecare requests the issuance of a preliminary injunction barring Gannon from employment with Cook’s for a period of six months. We will consider the parties’ arguments seriatim.

(C) Supporting Consideration

To be effective, the non-competition covenant must be incident to an employment relationship and supported by adequate compensation. See Sidco Paper Company v. Aaron, 465 Pa. 586, 591, 351 A.2d 250, 252 (1976). If a covenant not to compete is executed at the inception of employment, the consideration supporting the covenant is the job itself. See e.g., Barb-Lee Mobile Frame Company v. Hoot, 416 Pa. 222, 225-26, 206 A.2d 59, 61 (1965). However, when an employee enters into a non-competition agreement subsequent to the commencement of employment, the restrictive covenant must be supported by new consideration in order to be enforceable. Maintenance Specialties Inc. v. Gottus, 455 Pa. 327, 330, 314 A.2d 279, 280 (1974); Davis & Warde Inc. v. Tripodi, 420 Pa. Super. 450, 455, 616 A.2d 1384, 1387 (1992), appeal denied, 536 Pa. 624,637A.2d 284 (1993). Such new consideration must be in the form of some corresponding benefit to the employee or favorable change in employment status, Ruffing v. 84 Lumber Company, 410 Pa. Super. 459, 466, 600 A.2d 545, 548 (1991), appeal denied, 530 Pa. 666, 610 A.2d 46 (1992), as in the case of a promotion, see Records Center Inc., 363 Pa. Super. at 85, 525 A.2d at 435-36, or an increase in pay. See Zambelli Fireworks, supra at *11; Citadel Broadcasting, 52 D.&C.4th at 546.

Gannon did not sign her employment agreement and accompanying non-competition provision until more than five months after she began her employment with American Homecare. Nevertheless, at the time that she executed her restrictive covenant, she was promoted from a customer service representative to a clinical liaison and received a raise of more than $12,000/year. (See findings of fact nos. 3-4, supra.) Therefore, she received a reciprocal benefit in exchange for her non-competition agreement, as a result of which her covenant not to compete is supported by sufficient consideration to be deemed valid.

(D) Assignability of Restrictive Covenant

Gannon contends that Air Products’ sale of American Homecare to Landauer was an “asset sale” and that the non-competition agreement is unenforceable against Gannon since it was not specifically assigned by Air Products to Landauer. (Defendant’s brief in opposition, pp. 5-8.) Gannon premises her argument upon the fact that the Air Products-Landauer membership interest purchase agreement references the preparation of IRS Form 8594 which is entitled “asset acquisition statement under section 1060.” (Id., pp. 13-14.) Alternatively, Gannon asserts that since Landauer altered the benefits package offered to American Homecare’s employees following the sale by Air Products, the six-month restriction set forth in Gannon’s non-competition agreement began to run at the time of the Air Products-Landauer closing on May 15, 2009. Applying this logic, Gannon alleges that the restricted period elapsed on November 15,2009, such that she was at liberty to begin employment with Cook’s on November 16, 2009. (Id., pp. 8-10.)

In Hess, the Supreme Court addressed, as a matter of first impression, whether an asset purchaser could enforce a non-competition covenant executed by an asset seller and its former employee in the absence of an express assignment of the restrictive covenant as part of the asset sale. Resolving that issue in the context of an asset sale, the Hess court held “that a restrictive covenant not to compete, contained in an employment agreement, is not assignable to the purchasing business entity, in the absence of a specific assignability provision, where the covenant is included in a sale of assets.” Hess, 570 Pa. at 166-67, 808 A.2d at 922. More recently, the Superior Court of Pennsylvania and a federal district court both distinguished Hess and concluded that a non-competition agreement is enforceable, and an express assignment unnecessary, if the business transaction at issue involved a stock sale rather than an asset sale. See J. C. Ehrlich Co., 979 A.2d at 865-66; Zambelli Fireworks, supra at *12-13. Accord, Siemens Medical Solutions Health Services Corp. v. Carmelengo, 167 R Supp.2d 752, 757-59 (E.D. Pa. 2001) (purchasing company’s acquisition of employer’s stock and subsequent change in name of corporation did not constitute a de facto change in employer with the result allegedly being that employee was no longer bound by restrictive covenant in his employment agreement).

American Homecare maintains that the sale of its membership interest by one parent company (Air Products) to another parent company (Landauer) was tantamount to a stock sale or equity interest transfer rather than an asset sale. (Plaintiff’s brief in support, pp. 14-18.) To that end, American Homecare notes that both before and after the Air Products-Landauer transaction on May 15, 2009, Gannon performed the same job (clinical liaison) for the same employer (American Homecare) with the same supervisor (Wendy Connor) at the same location (1000 Jefferson Avenue) servicing the same eight “identified accounts.” (Id., pp. 17-18.) American Homecare posits that an assignment was unnecessary since American Homecare was the limited liability company (LLC) that (1) employed Gannon from 7/2/04 to 11/13/09, (2) entered into the non-competition agreement with Gannon, (3) continues to exist as an entity with the legal capacity to sue in its own name under 15Pa.C.S. §8991, and (4) is the named party seeking to enforce the restrictive covenant against its former employee. (Id., pp. 13-14.)

We agree with American Homecare that it may seek to enforce its non-competition agreement with Gannon notwithstanding the absence of an express assignment of that restrictive covenant from Air Products to Landau-er. The evidence presented during the injunction hearing established that the Air Products-Landauer transaction did not constitute an asset sale that would be governed by Hess. Landauer’s purchase of the “membership interest” units of American Homecare was synonymous to a stock sale rather than an asset sale. In Ehrlich Company, supra, an assignment was deemed unnecessary after Ehrlich Company consolidated with Rentokil Inc. since “[the employee] continued to earn paychecks from Ehrlich after this merger,” he “began his employment with and remained an employee of Ehrlich from the initial agreement. . . until the time of his termination . . . and the record d[id] not indicate, that his obligations and duties changed in any material respect” after the stock transaction. Ehrlich Company, 979 A.2d at 864, 866. The Zambelli Fireworks court similarly reasoned that there was no need for an assignment of a former employee’s restrictive covenant following a stock transaction which changed the company from a family-run business to an entity with new officers and directors since “the Zambelli corporation that existed before the stock purchase and the Zambelli corporation that existfed] after the stock purchase transaction [we]re one and the same corporation.” Zambelli Fireworks, supra at *12.

In the case at hand, Gannon likewise was an employee of American Homecare when she originally commenced her employment and later signed the non-competition agreement, as well as at the time that she subsequently terminated her employment. Following the Air Products-Landauer transaction, she continued to have the same job responsibilities and title in the same geographic market and still received a paycheck issued by American Homecare. As a limited liability company which remains in existence, American Homecare alone has the legal capacity to enforce Gannon’s covenant not to compete.

Gannon’s reliance upon Joyner Sports Medicine Institute Inc. v. Stejbach, 45 D.&C.4th 242 (Dauph. Cty. 1999), aff’d, 769 A.2d 1215 (Pa. Super. 2000) does not dictate a contrary result. In Joyner, Stejbach was employed as a physical therapist pursuant to an employment contract with Joyner which contained a non-competition clause. Nova Care Inc. later acquired 100 percent of the stock of Joyner and unilaterally reduced Stejbach’s benefits package and discontinued his receipt of merit-based salary increases. Following Nova Care’s acquisition of Joyner, Stejbach received paychecks and W-2 forms issued by Nova Care instead of Joyner. After Stejbach terminated his employment and joined another physical therapy group located within the proscribed geographic region, Joyner sought to enjoin Stejbach from working for its competitor based upon the restrictive covenant. Id. at 245-46.

Joyner asserted that the enforcement of the covenant not to compete “hinge[d] upon the difference between a stock acquisition and an asset purchase agreement” and argued that no assignment was necessary in that all employee contracts were acquired by Nova Care as a result of the stock transaction. Id. at 247. The Dauphin County court disagreed and characterized the stock sale vs. asset sale argument “as a distinction without a difference.” Id. at 249. Noting that Stejbach’s paychecks and W-2 forms were issued by Nova Care following the stock sale, the Joyner court reasoned that the employment relationship between Stejbach and Joyner “was effectively terminated on... the date of the acquisition” such that the restricted period of employment contained in the non-competition agreement became operative as of the date of the Joyner-Nova Care sale. Id. at 250-51.

Gannon’s assignability argument predicated upon Joyner is misplaced. Although Joyner deemed the stock sale/asset sale distinction to be wholly irrelevant, the Superior Court in J. C. Ehrlich Co. subsequently found that distinction to be dispositive with respect to the enforceability of a non-compete clause in the absence of an assignment. See J. C. Ehrlich Co., 979 A.2d at 866. See also, Siemens Medical Solutions, 167 F. Supp.2d at 759-60 (discussing validity of restrictive covenant following employer’s stock sale and holding that “[t]o the extent that this determination conflicts with the decision of the court in Joyner, I conclude that the Supreme Court of Pennsylvania would decline to follow that court’s reasoning.”). Furthermore, in contrast to the employee in Joyner, Gannon continued to receive paychecks from American Homecare after the Air Products-Landauer transaction and did not experience a unilateral decrease in her salary. While Gannon’s benefits package was altered somewhat following the membership interest transaction, she remained employed by American Home-care with the same job duties involving the same “identified accounts” in the identical Lackawanna County market. See, Siemens Medical Solutions, 167 F. Supp.2d at 759 (“Despite some differences with respect to particular benefits, I find nothing significant enough to conclude that [the former employee] no longer worked for the entity with whom he signed his original agreement.”). For all these reasons, Joyner is factually and legally distinguishable, and American Flomecare may seek to enforce Gannon’s restrictive covenant following Landauer’s purchase of the membership interest units which represented American Homecare’s outstanding equity interest.

(E) Protectable Business Interest

Pennsylvania law “permits equitable enforcement of employee covenants not to compete only so far as reasonably necessary for the protection of the employer’s protectable business interests.” Hess, 570 Pa. at 162, 808 A.2d at 920. (citation omitted) Hence, “[t]he presence of a legitimate, protectable business interest of the employer is a threshold requirement for an enforceable non-competition covenant.” Wellspan Health, 869 A.2d at 997. Generally, legitimate business interests that can be protected through restrictive covenants include trade secrets or confidential proprietary information, customer goodwill, and unique or extraordinary skills developed through specialized training. Hess, 570 Pa. at 163, 808 A.2d at 920; Wellspan Health, 869 A.2d at 996-97. Customer goodwill is considered a protectable interest even when the goodwill has been acquired through the efforts of the employee. Sidco Paper, 465 Pa. at 591, 351 A.2d at 252-53. Decisional precedent in this Commonwealth recognizes a patient referral base and the investments required to develop such a base as protected interests. See Wellspan Health, 869 A.2d at 998-99 (adopting rationale set forth in Community Hospital Group v. More, 365 N.J. Super. 84, 838 A.2d 472 (2003)).

The credible evidence established that American Homecare funded Gannon’s development and maintenance of customer goodwill with the eight referral sources/identified accounts that she serviced in Lackawanna County. (See findings of fact nos. 7-8, supra.) However, American Homecare did not prove that Gannon acquired any trade secrets or confidential proprietary information, or developed any unique or extraordinary skills from specialized training programs, during her employment with American Homecare. Compare, Pennsylvania Funds Corporation v. Vogel, 399 Pa. 1, 7-8, 159 A.2d 472, 475-76 (1960) (securities salesman received extensive, specialized training from employer regarding particular methods and problems in the sale of mutual fund shares). To the contrary, Gannon gained that industry knowledge and skill as a result of her earlier employment with Apria Healthcare. (See finding of fact no. 27, supra.) See also, Wellspan Health, 869 A.2d at 997 (trade secret does not include employee’s aptitude, skill, mental ability or subjective knowledge, and industry information obtained from other legitimate means does not constitute confidential information). Therefore, American Homecare possesses a legitimate, protectable interest only to the extent of the customer goodwill that Gannon developed with regard to the eight referral sources/identified accounts that she serviced in Lackawanna County while she was employed by American Homecare.

(F) Balancing of Competing Interests

Gannon’s non-competition covenant with American Homecare bars her from any form of employment with any employer engaged in the business of selling respiratory products/supplies and durable medical equipment within 50 miles of Scranton for a period of six months following her termination. In those instances where a non-competition agreement imposes restrictions that are broader than necessary to protect the former employer’s interests, the Supreme Court has “repeatedly held that a court of equity may grant enforcement limited to those portions of the restrictions that are reasonably necessary for the protection of the employer.” Hess, 570 Pa. at 162-63, 808 A.2d at 920; Sidco Paper Company, 465 Pa. at 595, 351 A.2d at 254. Accord, Victaulic Company v. Tieman, 499 F.3d 227, 235 (3d Cir. 2007) (“To be reasonably necessary for the protection of the employer, a covenant must be tailored to protect legitimate interests.”). In making that determination, the reviewing court must balance “the employer’s protectable business interests against the interest of the employee in earning a living in his or her chosen profession, trade or occupation,” and thereafter balance those competing interests “against the interest of the public.” Hess, 570 Pa. at 164, 808 A.2d at 920; J. C. Ehrlich Co., 979 A.2d at 864-65. Thus, post-employment restrictive covenants are subject to a more stringent test of reasonableness than covenants not to compete which are ancillary to the sale of a business. See Hess, supra; Thermo-Guard Inc. v. Cochran, 408 Pa. Super. 54, 65, 596 A.2d 188, 194 (1991); Citadel Broadcasting, 52 D.&C.4th at 545. The determination of reasonableness is a factual one with the party claiming unreasonableness as a defense against enforcement of the covenant bearing the burden of proof. Wellspan Health, 869 A.2d at 999.

The six-month restriction set forth in Gannon’s non-competition agreement represents a reasonable duration of time for the protection of American Homecare’s cognizable business interest in customer goodwill. See Boldt Machinery & Tools Inc. v. Wallace, 469 Pa. 504, 513, 366 A.2d 902, 907 (1976) (quoting Blake, “Employee Covenants Not to Compete,” 73 Harv. L. Rev. 625,677-78 (1960) and stating that “[cjourts seldom criticize restraints of six months or a year on the grounds of duration as such, and even longer restraints are often enforced.”). However, American Homecare’s blanket prohibition against any means of employment with a competing respiratory products/durable medical equipment provider within 50 miles of Scranton is overly broad in light of American Homecare’s sole legitimate, protectable interest in the customer goodwill created relative to the eight referral sources/identified accounts serviced by Gannon during her employment with American Home-care. As part of our “broad powers to modify the restrictions imposed on the former employee to include only those restrictions reasonably necessary to protect the employer,” All-Pak Inc., 694 A.2d at 350-51 (citation omitted), we may reform or “blue pencil” the covenant by removing offensive portions or supplying new, limiting language and thereafter enforcing the covenant as reformed. See Thermo-Guard Inc., 408 Pa. Super. at 65 n.9, 596 A.2d at 194 n.9; Zambelli Fireworks, supra at *10; Hillard v. Medtronic Inc., 910 F. Supp. 173, 177 (M.D. Pa. 1995) (Nealon J.).

In order to ensure enforcement of only those restrictions which are reasonably necessary for the protection of American Homecare’s valid business interests, Gannon’s non-competition agreement will be reformed so as to limit Gannon’s proscriptive employment with Cook’s to any contact or business dealings with Community Medical Center, Mercy Hospital, Moses Taylor Hospital, Mountain View Care Center, Dr. Nat Levinson, Dr. Greg Cali, Dr. S. Ramakrishna, and Dunmore Health Care Center for a period of six months. See Wellspan Health, 869 A.2d at 1002 (finding non-competition covenant reasonable as to York and Adams counties, but unreasonable with respect to Lancaster County); Thermo-Guard Inc., 408 Pa. Super. at 65, 596 A.2d at 194 (to protect former employer’s interest in customer goodwill developed by former employees, limited injunction was issued prohibiting employees “from contacting or developing any relationship with any of Thermo-Guard’s present customers or prospective customers who became known to [the employees] through their employment with Thermo-Guard.”); Zambelli Fireworks, supra at *16 (employee enjoined only “from contacting or developing any business relationship with any of Zambelli’s present or prospective customers who had contact with or became known to [employee] through his employment with Zambelli for the two-year restrictive time period.”); Hillard, 910 F. Supp. at 176 (former employee “is not prohibited from competing ‘in any manner’ with Medtronic, he is restricted only from involvement with certain products on which he worked within the prior two-year period when he was employed by Medtronic.”). Gannon is not foreclosed from employment as a clinical liaison with Cook’s within 50 miles of Scranton, provided that she does not contact or engage in any business dealings with any of the eight referral sources/identified accounts that she handled while employed with American Home-care. Our modified prohibition adequately protects American Homecare’s genuine interest in customer goodwill while simultaneously respecting Gannon’s right to earn a living in her chosen field.

American Homecare has satisfied the six criteria for the issuance of a preliminary injunction as reformed above. Accordingly, Gannon’s non-competition covenant will be enforced as modified and a preliminary injunction will be granted enjoining her from employment with Cook’s, but only to the extent that she is precluded from any business contact or relations with the foregoing eight referral sources/identified accounts. Gannon is barred from any such employment until May 13,2010 since the language of her non-competition agreement clearly precludes any such employment “for the six-month period beyond [her] voluntary termination” on November 13, 2009. Sqq Boldt Machinery, 469 Pa. at 515 n.8, 366 A.2d at 908 n.8 (remanding equity decree for enforcement of restrictive covenant from date of employment termination, rather than date of decree); Geisinger Clinic v. Di Cuccio, 414 Pa. Super. 85, 96, 606 A.2d 509, 515 (1992) (“the language of the restrictive covenant in this case is patently clear that the two-year bar takes effect only after the employment agreement has been terminated.”), appeal denied, 536 Pa. 625, 637 A.2d 285 (1993), cert. denied, 513 U.S. 1112 (1995). Finally, pursuant to Pa. R.C.P. 1531(b), American Homecare will be required to post a bond in the amount of $17,500 as a condition to the issuance of a preliminary injunction. See Christo v. Tuscany Inc., 368 Pa. Super. 9, 20, 533 A.2d 461, 467 (1987) (amount of bond posted for issuance of an injunction is designed to cover reasonably foreseeable damages resulting from an improperly granted injunction), appeal discontinued, 520 Pa. 601, 553 A.2d 964 (1988).

ORDER

And now, December 15, 2009, upon consideration of the motion of plaintiff American Homecare Supply Mid-Atlantic LLC d/b/a Young’s Medical Equipment Company for a preliminary injunction enjoining defendant Tonya Gannon from employment with Cook’s Medical Care for a period of six months, the credible evidence submitted during the injunction hearing on December 2, 2009, and the legal arguments set forth in the parties’ post-hearing briefs filed on December 8,2009, and based upon the factual findings and legal conclusions set forth in the foregoing memorandum, it is hereby ordered and decreed that:

(1) Plaintiff’s motion for a preliminary injunction is granted in part and denied in part;

(2) Plaintiff’s motion for a preliminary injunction is granted to the extent that defendant Tonya Gannon is precluded from engaging in any business-related contact or dealings with Community Medical Center, Mercy Hospital, Moses Taylor Hospital, Mountain View Care Center, Dr. Nat Levinson, Dr. Greg Cali, Dr. S. Ramakrishna, and Dunmore Health Care Center, or any representative thereof, regarding the sale or use of respiratory products and supplies and durable medical equipment through May 13, 2010;

(3) In all other respects, plaintiff’s motion for a preliminary injunction is denied; and

(4) In accordance with Pa.R.C.P. 1531 (b), the plaintiff shall file a bond in the amount of $17,500, naming the Commonwealth as obligee, conditioned that if the foregoing preliminary injunction is dissolved as improperly granted, the plaintiff shall pay all foreseeable damages proximately caused by reason of the granting of the preliminary injunction, and all legally taxable costs and fees.

      . Although American Homecare has produced certain schedules that were attached to the membership interest purchase agreement, it has not provided a copy of schedule 2.2.4.

      . Section 2.4.1 (i) and (j) requires American Homecare Supply LLC to deliver to Landauer a “non-competition agreement in the form of exhibit A” and “amendment no. 1 to non-competition agreement in the form attached hereto as exhibit B,” both of which were duly executed by Air Products. (Id., p. 13.) Neither the “non-competition agreement” nor “amendment no. 1” have been produced by American Home-care.

      . The membership interest purchase agreement’s single reference to the allocation of the purchase price for purposes of IRS Form 8594 is of no consequence. Section 1060 of the Internal Revenue Code, 26 U.S.C., prescribes the use of Form 8594 for determining the tax treatment of gains or losses on certain asset acquisitions, including transactions governed by 26 U.S.C. §338(b)(5) which allows for gains or losses from certain stock purchases to be treated for tax purposes as though the stock transaction was an asset acquisition. Question no. 6 on Form 8594 reflects that fact in that it seeks information concerning “the purchase of the group of assets (or stock)____” The mere reference to IRS Form 8594 in the membership interest purchase agreement did not transform that membership interest units transaction into an asset sale.

      . Since the uncontroverted evidence established that there are multiple providers of respiratory products/supplies and durable medical equipment which service Lackawanna County, the local demand for respiratory products and durable medical equipment does not exceed the available supply of those materials, and the public interest does not prevent the limited enforcement of Gannon’s restrictive covenant as modified. Compare Wellspan Health, 869 A.2d at 1002 (“The public interest strongly militates against enforcement of [perinatologist’s] covenant in Lancaster County” as the “[u]ndisputed evidence indicated that the area was underserved in the area of maternal fetal medicine.”) and West Penn Specialty MSO Inc. v. Nolan, 737 A.2d 295, 300-301 (Pa. Super. 1999) (analyzing “quantitative sufficiency of physicians practicing in the restricted area” as part of the public interest analysis, and granting preliminary injunction against oncologist after finding no shortage of oncology services due to presence of numerous oncologists in that area).


author: WECHT, J.,

text:
    Scully v. Scully

      David S. Pollock, for plaintiff.

      MarkR. Alberts, for defendant.
    January 6, 2010
   WECHT, J.,

Plaintiff Louise O’Brien Scully (Mother) filed preliminary objections to defendant Henry Crocker Scully (Father)’s petition for retroactive modification and enforcement of support order and petition to designate case complex. The parties were divorced in 2007 and entered into a consent order in 2008 that dealt with support, among other issues. The parties had lived in and were divorced in Bermuda. Mother and the children still reside in Bermuda. Mother registered the consent order in Allegheny County for enforcement purposes because Father is now residing in and employed in Allegheny County. After the order was registered, Father filed his petition for modification as a complex support case.

Mother’s preliminary objection is lack of subject matter jurisdiction. Mother argues that under UIFSA, the registered order cannot be modified if the issuing tribunal had jurisdiction: Nor, Mother argues, does Pennsylvania have jurisdiction to modify the order of another state. 23 Pa.C.S. §7611. Mother also argues that if the court does not have subject matter jurisdiction to modify, it cannot have jurisdiction to make the matter complex.

Father argues that Mother cannot register the Bermuda order under UIFSA because Bermuda is not a state under UIFSA. Bermuda has not enacted law similar to the procedures under UIFSA nor does it have reciprocal agreements with the United States or Pennsylvania that would cause UIFSA to be applicable. Father also states that there is a pending modification hearing in Bermuda.

At this point, Mother’s preliminary objections are essentially moot. Father is pursuing the modification in the Bermuda courts. Flowever, there still remains Father’s objection to Mother registering the order in Pennsylvania (Father’s new matter). The issue is whether the Bermuda order can be registered and enforced in Pennsylvania. It is clear that there is no reciprocal agreement between the United States or Pennsylvania and Bermuda. The question is whether there needs to be one. Mother argues that UIFSA does not require a reciprocal agreement and that Bermuda’s substantially similar law is enough to allow UIFSA to apply and allow the registration and enforcement of the order. Father argues that reciprocal agreements are necessary and that, without a reciprocal agreement, comity cannot apply, so that the order cannot be enforced in Pennsylvania.

There seems to be sufficient case law to buttress the proposition that a support order can be registered and enforced even if the country from which it originates is not in a reciprocal agreement with the United States or Pennsylvania. The courts seem to focus on comity, rather than on the statutory provisions. In one case, the Superior Court stated that a Yugoslavian support order could be enforceable in Pennsylvania under comity principles because the general rule was that support orders were recognized unless the decree was tainted by fraud or prejudice or contrary to Pennsylvania law or public policy. Drakulich v. Drakulich, 333 Pa. Super. 273, 482 A.2d 563 (1984). In Pfeifer v. Cutshall, 851 A.2d 983 (Pa. Super. 2004), the Superior Court enforced a German support order, although it allowed the trial court to recalculate the arrears which had been calculated in a way that violated Pennsylvania public policy. Father argues that this case is not relevant since Germany is a reciprocal country. Germany is not listed among the reciprocal countries under the U.S. State Department, but there is an agreement between Germany and Pennsylvania. In the Findlay case, the trial court enforced an English support order based on comity because the order was in accordance with Pennsylvania public policy and there was no reason to deny enforcement. Findlay v. Findlay, 33 D.&C. 4th 97 (Montgomery Cty. 1996) (aff’d by Pa. Super. Ct. via unpublished memorandum).

Procedurally, once a party has made a contest to the registration, the Inter-Jurisdictional Office will schedule a hearing on the direct hearing docket. Once the hearing officer has made a recommendation, the order is registered or the case is closed. This direct hearing is the next step inasmuch as Father is contesting the registration of the order.

An order in accordance with this memorandum follows.

ORDER

And now, January 6, 2010, following argument, and due consideration, it is hereby ordered, adjudged, and decreed that:

(1) Plaintiff’s preliminary objections are granted.

(2) A hearing on defendant’s new matter contesting the registration of the foreign support order will be scheduled on the inter-jurisdictional direct hearing docket. The inter-jurisdictional office will provide notice to all parties of the time and date set for hearing.

      . The oldest child is in college in the United States, however.

      . The Superior Court did not rule conclusively that the Yugoslavian order was enforceable because that issue was not before it. The court was instead ruling on whether the Yugoslavian order would allow one party to modify its Pennsylvania support obligation as a change of circumstance. The court ruled that even with the Yugoslavian order, there was not a significant change in circumstance to allow modification of the Pennsylvania obligation. However, the court first determined the enforceability of the Yugoslavian order because, if it were not enforceable, there would be no change in circumstance.

      . Pennsylvania and the United States currently have reciprocal agreements with the United Kingdom, but it appears that they did not have agreements at the time of the Findlay case.