author: FRIEDMAN, J.,

text:
    Powell v. Instant Replay Video, Inc.

      Harry M. Paras, for plaintiff.

      J. Eric Barchiesi, for defendant Instant Replay Video Inc.

      KeithleyD. Mulvihill, for defendants Peluso, Conn, and Tropical Illusions Tanning Salon.

      Robert J. Marino, for defendant Anytime Tanning Club LLC.

      Robert W. Deer, for defendant Wolff’s Den Inc.
    March 18, 2011
   FRIEDMAN, J.,

MEMORANDUM IN SUPPORT OF ORDER

Plaintiff has broughtthe captioned action against various defendants based on plaintiff’s having contracted skin cancer from using the tanning beds at businesses where she was employed as a receptionist. Her duties did not require her to use the tanning beds at issue, rather she was given permission to do so as part of her compensation. The captioned defendants have filed preliminary objections to the complaint, the main one being based on the doctrine of preemption. To the extent the complaint is based on a failure to warn, the defendants argue that claim has been preempted by FDA regulations specifying the exact warnings to be given to users of tanning beds, such as plaintiff. Defendants argue that the only acts of negligence not preempted are those set forth in t30(u) & (v) of the complaint, and that the claims based on 130(u) — (t) and on Count II (misrepresentation) are preempted.

The parties seem to agree that the applicable law is found in the cases of Medtronic, Inc. v. Lohr v. Medtronic, Inc., 518 U.S. 470, 116 S.Ct. 2240 (1996) and Green v. Dolsky, 546 Pa. 400, 685 A.2d 110 (1996), although other cases are cited as well. Medtronic was decided by the United States Supreme Court in June 1996 and Green by the Pennsylvania Supreme Court shortly thereafter, in November 1996. Both cases involve §60K(a) of the Medical Device Amendments to the Food, Drug and Cosmetic Act. Under that section, states may not impose “any requirement (1) which is different from, or in addition to, any requirement under [the Food, Drug and Cosmetics] Act to [a covered] device, and (2) which relates to the safety or effectiveness of the device or to any other matter included in a requirement applicable to the device under [the] Act.”

The Pennsylvania Supreme Court in Green discusses the relevant law very clearly. The classes of medical devices are summarized as follows:

The MDA classifies medical devices as Class I, II or III, depending upon their potential danger to the public. Class I devices pose little or no threat to health and safety and are subject to only general controls over manufacturing. Examples of Class I devices are elastic bandages, tongue depressors and bed pans. Class II devices require special controls, such as performance standards, postmarket surveillance, patient registries and guidelines for the use of the devices. Examples of Class II devices are oxygen masks, tampons, syringes, hearing aids, and condoms. Class III devices are “for use in supporting or sustaining human life or...of substantial importance in preventing impairment of human health” or “present a potential unreasonable risk of illness or injury.” Class III devices include replacement joints, pacemakers and heart valves. Thus, Class III devices are the most heavily regulated. 685 A.2d at p. 14.

The Pennsylvania Supreme Court also quotes the United States Supreme Court’s discussion of preemption in Medtronic (which Green refers to as Lohr):

The United States Supreme Court has discussed preemption as follows:

Article VI of the constitution provides that the laws of the United States “shall be the supreme Law of the Land; ... any thing in the Constitution or Laws of any state to the Contrary notwithstanding.” Thus, since our decision in McCulloch v. Maryland, 4 Wheat, 316, 427, 4 L.Ed 579 (1819), it has been settled that state law that conflicts with federal law is “without effect.” Consideration of issues arising under the Supremacy Clause “start[s] with the assumption that the historic police powers of the States [are] not to be superseded by.... Federal Act unless that [is] the clear and manifest purpose of Congress.” Accordingly,” ‘[t]he purpose of Congress is the ultimate touchstone’” of preemption analysis. 685A.2datp. 115.

The Pennsylvania Supreme Court then turns to the issue in Green, which involved a Class III device:

With this background, we now turn to a discussion of whether the MDA [Medical Device Amendments] preempt state law causes of action for injuries allegedly received because of the use of a medical device. We note initially that the question arises because, as mentioned earlier, there is no private right of action under the MDA, and in the absence of state law claims, a party injured by a medical device would have no cause of action against any person or entity. 685 A.2d atp. 115 (emphasis added).

In discussing Medtronic, the Pennsylvania Supreme Court in Green noted:

... The majority held that Lohr’s design claim was not preempted, for the device had been approved for sale under the §510(k) provision, which meant that the FDA had not examined the merits or safety of this particular device, but had decided only that it was substantially equivalent to devices already on the market. [Citation omitted.]
Further, the court held that state claims alleging the manufacturer violated FDA regulations can be maintained, and that even if state causes of action require the proof of negligence or the creation of an unreasonable hazard, such additional elements make the claim narrower, not broader, and thus, are not to be regarded as additional or different “requirements.” [Citation omitted.]
Additionally, the court concluded that the Lohr’s manufacturing and labeling claims are not preempted by the act, for the regulations in Lohr concerned device regulation generally, and not a specific device or field of device regulation which might be contradicted by state requirements. The court pointed out that whether manufacturing and labeling claims are preempted will “require a careful comparison between the allegedly pre-empting federal requirement and the allegedly preempted state requirement. 685 A.2d at p. 116.

Our understanding of the Green case leads us to conclude that plaintiff’s claims should not be dismissed at this early stage. Perhaps when the pleadings are closed, more likely when discovery has closed, the preemption issues can be re-visited.

We reach this conclusion because we believe we will need to make “a careful comparison between the allegedly preempting federal requirement and the allegedly preempted state requirement [or, possibly, an element of a common law cause of action, if Justice Breyer’s concurring opinion is also to be considered].” See Green, 685 A.2d at pp. 116-117. The nature of the “allegedly preempted state requirement” is a matter for an answer and new matter, not a matter of plaintiff’s pleading in her complaint.

We must also be able to review and analyze the FDA approval process for tanning beds. At this early stage, we are bewildered by the classification of tanning beds as Class I medical devices, similar in level of danger to health and safety to items such as tongue depressors and bed pans. By the time motions for summary judgment are ripe, the rationale may become clearer.

We also cannot decide at this early stage that plaintiff has no viable cause of action against the tanning salons when one might very well lie against a manufacturer of tanning beds for the types of negligence claims found not preempted by the Green court. The actual or imputed knowledge of the salon operators at the times plaintiff used their tanning beds would also need to be considered.

The preliminary objections of the defendants are overruled for the most part, without prejudice to their right to re-raise them in a motion for summary judgment or, if appropriate, in a motion for judgment on the pleadings. We do however sustain the preliminary objections in part and grant leave to plaintiff to file an amended complaint setting forth separate counts against each defendant, as required by Pa.R.C.P. 1020(a), including as well the timeframe in which plaintiff used the tanning facilities of each defendant and all other facts material to the causes of action pursued against each. It seems likely that the time when each defendant should have known of the danger to young users such as plaintiff would be a material fact.

See order filed herewith.

ORDER OF COURT

And now, February 18, 2011, for the reasons set forth in the accompanying memorandum in support of order, the preliminary objections of the defendants are hereby sustained in part and overruled in part, without prejudice to defendants’ right to re-raise those objections in a motion for summary judgment or, if appropriate, in a motion for judgment on the pleadings, plaintiff shall file an amended complaint within 30 days of the date hereof, setting forth separate counts against each defendant in accordance with Pa. R.C.P. 1020(a) and as described in the attached memorandum.

The undersigned retains jurisdiction only for the purposes of ruling on any preliminary objections that may be filed to the amended complaint.

      . The action against the three Hollywood Tans defendants has been voluntarily discontinued. The complaint was also dismissed as to Rose Poznak, by stipulations.

      . We overruled the defendant Employers’ Preliminary Objections based on the Workers’ Compensation laws without prejudice to said Defendant’s right to re-raise that in a motion for summary judgment. This issue will not be discussed further herein.

      . We note that the manufacturer seems to have been dropped from the case. This does not alter our conclusion at this stage.


source: Caselaw Access Project

author: ABRAMSON, J.,

license: Public Domain

text:
    Goldin v. Bally Total Fitness Corp.

      Samantha J. Evian, George M. Vinci Jr., and Joseph J. Hamill Jr., for plaintiff.

      Jerome E. Marks, Elizabeth A. Chalik and Francis M. Flatch, for defendant.
    March 8, 2011
   ABRAMSON, J.,

This opinion is submitted relative to the appeal of plaintiff Clive Goldin, as executor of the Estate of Peter M. Goldin, from this court’s order dated October 27, 2008, which granted the motion for judgment on the pleadings of defendants Bally Total Fitness Corporation d/b/a Bally Total Fitness, Bally Sports Club d/b/a/ Bally Total Fitness Corporation and Bally Total Fitness of Philadelphia, Inc. d/b/a Bally Total Fitness (collectively “Bally’s” or “defendants”), and from this court’s order dated December 6, 2010, which granted defendants’motion for summary judgment. For the reasons discussed below, this court respectfully submits that its decision should be affirmed.

BACKGROUND

Plaintiff Clive Goldin, as executor for the estate of ■Peter Goldin (hereinafter “plaintiff’), filed an amended complaint on June 10, 2008. The plaintiff alleged that on October 25, 2006, Peter Goldin collapsed and died after suffering sudden cardiac attack (“SCA”) while exercising at Bally’s Total Fitness in King of Prussia. Plaintiff alleged that the defendants’ negligence was a substantial factor in the cause of Peter M. Goldin’s death. More specifically and most relevantly for present purposes, plaintiff alleged that defendants’ conscious and deliberate decision not to place an “automated external defibrillator” (“AED”) in its King of Prussia location constituted negligence. Plaintiff also alleged several other instances of defendants’ negligence with regard to Peter Goldin’s death. In total, plaintiff brought three counts in his amended complaint: negligence (Count I), wrongful death (Count II), and a survival action (Count III).

On September 12, 2008, defendants filed a motion for judgment on the pleadings. requesting that any and all claims against defendants be dismissed with prejudice on the grounds that controlling Pennsylvania case law established that a health club had no duty to maintain an AED device on its premises. In his opposition, plaintiff put forward two primary arguments. First, he argued that while Bally’s failure to maintain an AED device on premises was clearly the main thrust of plaintiff’s case, the amended complaint raised additional claims of negligence that could not be disposed of even if the court accepted defendants’ position. Second, plaintiff argued that defendants’ reliance on case law was inapposite and thus should be rejected. Acknowledging the validity of plaintiff’s first argument, defendants submitted an amended order limiting its dismissal request to any and all of plaintiff’s claims against defendants for failure to have, acquire or maintain an AED device on the premises of defendants’ club. After due consideration, the court granted defendants’ amended motion for judgment on the pleadings on October 27, 2008. On September 16, 2010 plaintiff filed a praecipe to withdraw his remaining non-AED claims. Defendants responded by filing a motion for summary judgment on the remaining counts on November 1, 2010. Plaintiff failed to oppose this motion. Consequently, the court granted defendants’ motion for summary judgment on December 6, 2010. The present appeal followed.

DISCUSSION

Plaintiff’s first amended complaint stated in relevant part that “the Bally defendants...had a duty to Peter M. Goldin to exercise reasonable care to ensure that the Health Club was equipped with the necessary and proper safety equipment to ensure the safety of their patrons, specifically having AED devices in their Health Club, so as to prevent the untimely death of their patrons due to, inter alia, cardiac arrest, ventricular arrhythmia and ventricular fibrillation.” (emphasis added) Thus, the existence of a duty to maintain an AED device on the premises of its club is the crux of defendants’ motion for judgment on the pleadings and plaintiff’s appeal.

1. The Existence of a Duty and the Relative Precedent

In the negligence context, a duty is defined as an obligation to which the law will give recognition and effect, to conform to a particular standard of conduct toward another. Whether a duty exists in a given circumstance is a question of law. In the current instance, the Supreme Court of Pennsylvania addressed this question in Atcovitz v. Gulph Mills Tennis Club. In Atcovitz, a patron suffered a heart attack while playing tennis at a sports club. The patron survived, but suffered permanent injuries to his nervous system. In his subsequent lawsuit, the patron alleged that the club was negligent in failing to maintain an AED on the premises. Thus, identically to the current case, Atcovitz turned on the specific question of whether a club owed a duty to its patrons to maintain an AED. After winding its way through the lower courts, the case ultimately reached the Supreme Court of Pennsylvania which determined that clubs owed patrons no duty to maintain an AED.

2. Atcovitz’s Analysis

In Atcovitz, the Supreme Court started its duty analysis with the proposition that where Pennsylvania lawmakers have thoroughly considered the statewide application and implications of a subject, the courts must refrain from imposing additional requirements upon that legislation. Here, the Supreme Court identified two pieces of relevant legislation: (1) the Emergency Medical Services Act, Pa. Stat. Ann. Tit. 35, §§6921-6938 (“EMS Act”) and (2) 42 Pa. Cons. Stat. §8331.2AED of the Good Samaritan Act (“AED Good Samaritan Act”).

As explained by the Supreme Court in Atcovitz, the EMS Act is a comprehensive piece of legislation the stated intent of which is “to assure readily available and coordinated emergency medical services of the highest quality to the people of Pennsylvania.” To achieve this goal, the EMS Act and its implementing regulations explicitly classify and identify the capacities, training requirements, and qualifications of individuals who are authorized to deliver emergency medical services, including the use of AEDs. Examining the EMS Act in detail, the Supreme Court concluded that it manifested the Legislature’s intent “to preclude unqualified and untrained individuals from administering emergency medical services using an AED.” Notably, the court reached this decision despite its acknowledgement that “the EMS Act and its regulations do not specifically refer to the use of AEDs by untrained individuals.” Instead, the court arrived at this conclusion by inference, reasoning that “it would be absurd for the governmental system charged with rendering effective emergency medical care to hinder the delivery of that care using AEDs through the system, while ordinaiy citizens would be duty-bound to acquire, maintain, and use AEDs free from any regulation by the department of health.”

Having determined that the EMS Act imposed no duty on health clubs to maintain AED devices, the Atcovitz court turned its attention to the AED Good Samaritan Act. Specifically, the court examined the legislation in light of the Superior Court’s conclusion that the AED Good Samaritan Act “evinced the Legislature’s intention that the EMS Act should not restrict the use of AEDs to trained professionals.” The Supreme Court rejected this position. Parsing the language of the statute, the Supreme Court determined that the AED Good Samaritan Act “merely creates an exception for imposing liability on an untrained individual who uses an AED in limited emergency situations; it does not authorize its use by any such individual.” (emphasis in original) For the Supreme Court this was a distinction with a difference, and thus it concluded that “the existence of a civil immunity provision for Good Samaritans who use an AED in an emergency situation cannot impose a duty on a business establishment to acquire, maintain, and use such a device on its premises.”

3. This Court’s Application of Atcovitz

In granting defendants’ motion for judgment on the pleadings, this court was bound by the Supreme Court’s holding in Atcovitz that a sports club has no duty to acquire, maintain and use an AED. Recognizing its detrimental impact to his claim, the plaintiff in his opposition to defendants’ motion for judgment on the pleadings attempted to avoid the application of this precedent. The plaintiff employed two primary arguments to achieve this aim. First, the plaintiff attempted to distinguish his case from Atcovitz factually. Specifically, plaintiff argued that “the events underlying Atcovitz arose more than ten years prior to the death of Peter M. Goldin” and “unlike Atcovitz this case does not involve a tennis club...(but) a national health and fitness club chain which has already placed AED devices in many of their locations around the country.” After due consideration, this court found these distinctions extant but immaterial. Concerning the time span separating the two underlying events, in the absence of relevant developments in the law, the mere passage of years does not justify this court ignoring binding Supreme Court precedent. The plaintiff pointed to no development in Pennsylvania law that would warrant this court taking such an action.

This court found similarly unavailing plaintiff’s “national versus local” distinction. The thrust of plaintiff’s argument in this regard was that since Bally’s maintained AEDs at locations outside Pennsylvania, the “inescapable conclusion” is that the deceased was “entitled to the same level of safety afforded Bally’s members in other states.” The court found this claim unconvincing. First, plaintiff cited no authority for its proposition. Second, the logic underpinning plaintiff’s argument crumbles upon closer inspection. For example, if plaintiff’s argument was accepted, any national chain would be required to make every one of its locations meet the most rigorous safety practices (if such could even be determined) required by any state in which it operates. This is not the law. Pennsylvania clubs are governed by Pennsylvania law, and the relevant Pennsylvania law in this instance is set down in Atcovitz.

The second line of argument the plaintiff employed to circumvent the application of Atcovitz is what might be termed his “evolutionary” argument. Plaintiff correctly noted in his opposition to defendants’ motion that the question of whether a legal duty exists is not one settled once and forever. Instead, the Pennsylvania Supreme Court has embraced the position that the legal concept of duty rests on “shifting sands” and “is necessarily rooted in often amorphous public policy considerations, which may include (the Supreme Court’s) perception of history, morals, justice and society.” Seizing upon this language, plaintiff essentially argued that the time has come for Pennsylvania to set aside Atcovitz and require AED’s in health clubs. This court declined plaintiff’s request to overturn a Supreme Court decision as beyond its mandate. Moreover, even on the merits, this court found plaintiff’s contention that Atcovitz is outdated unconvincing for multiple reasons. First, at time of disposition, Atcovitz was only six years old, and plaintiff identified no inexorable legislative or judicial tide indicating Pennsylvania’s practice obsolete. Second, this court found that much of plaintiff’s argument inapposite given the stated basis of the Supreme Court’s decision in Atcovitz. Specifically, while the Atcovitz court noted that it was required to balance several discrete factors to determine whether a common law duty of care exists (the five so-called “Althaus factors”), it stated explicitly that its analysis turned upon one factor in particular, i.e. the overall public interest in the proposed solution (duty). This court found plaintiff’s response lacking a similar focus, with his treatment of this paramount factor being limited to bare assertions such as “striving to achieve a safer exercise and fitness environment is an important societal goal” and “(health club owners) are in the best position to provide reasonable safety equipment in their facilities.” Such general assertions are insufficient to overturn Atcovitz especially in light of that decision’s detailed reasoning.

CONCLUSION

For the reasons discussed above, the court respectfully submits that its decision be affirmed.

      . See amended complaint, at ¶¶11-16.

      . Id. at ¶¶ 28-31.

      . See Id. at ¶47. Other examples of defendants’ negligence alleged by plaintiff include (1) failing to properly evaluate decedent’s physical condition, (2) failing to have a supply of oxygen in the club, (3) failing to call 911 promptly, (4) failing to have trained employees to attend a patron with a serious health problem, etc.

      . Id. at ^45.

      . Atcovitz v. Gulph Mills Tennis Club, Inc., 571 Pa. 580, 586, 812 A.2d 1218, 1222 (Pa. 2002), citing W. Page Keeton et. al., Prosser and Keeton on the Law of Torts §53 at 356.

        . Id.

      . Id. at 583.

      . Id.

      . Id. at 588.

      . Id.

        .Id.

        . Id. at 589.

      . Id. at 588-589.

        . Id. at 589.

      . Id. at 585.

      . Id. at 590.

      . Id.

      . Plaintiff’s memorandum of law in opposition to defendants’ m - tion for judgment on the pleadings, §IV, ¶13.

      . Id.

      . Id.

      . Despite plaintiff’s arguments to the contrary, it is not clear to this court that what constitute the “best safety practices” can be readily identified. For example, in Atcovitz, the Supreme Court interpreted the Legislature’s intent in passing the EMS Act as, in part, a desire to limit use ofAEDs to trained professionals. See supra, note 11. The implication is that the Pennsylvania legislature believed requiring laymen to maintain and use AEDs posed a not unsubstantial risk.

      . Atcovitz, 571 Pa. at 587, quoting D. Prosser, Palsgraf Revisited, 52 Mich. L. Rev. 1, 15 (1953).

      . See plaintiff’s memorandum of law, §IV, ¶13 (“...duty is a dynamic principle which can change in the face of public policy...”).

      . Preliminary research by this court found that as of 2010, eight states and the District of Columbia require health clubs to have at least one AED on the premises. As of that date, more than 40 states had no such legal requirement. See NCSL.org, State Laws on Cardiac Arrest and Defibrillators, http://www.ncsl.org/issuesResearch/Health/ LawsonCardiacArrestandDefibrillatorsAEDs/tabid/14506/Default.aspx (last visited November 2010).

      . Atcovitz, 571 Pa. at 587. As set out in Atcovitz, the five Althaus factors that the courts are to balance in determining whether to impose a duty are (1) the relationship between the parties; (2) the social utility of the actor’s conduct; (3) the nature of the risk imposed and foreseeability of the harm incurred; (4) the consequences of imposing a duty upon the actor; and (5) the overall public interest in the proposed solution.

      . Id.

      . See plaintiff’s memorandum of law, §IV, ¶13.

      . This court takes no position on plaintiff’s analysis of the other four Althaus factors.


author: HODGE, J.,

text:
    In re Jonathan S. Titus Trust

      Frank G. Verterano, for petitioner.

      James R. Hankie, for respondent.
    March 10, 2011
   HODGE, J.,

This matter was before the court on February 18,2 011 for argument on preliminary objections filed on behalf of the respondent, Angela T. Koller and Stanley J. Lehman (hereinafter “Trustees”).

The relevant factual background of this case can be properly summarized as follows: On May 29, 2002 a trust (hereinafter “Titus Trust”) was established, wherein Jonathan S. Titus acted as the settlor and was also named the primaiy beneficiary under the articles of the Titus Trust. Angela T. Koller is Jonathan’s mother; Angela Koller, along with her then-husband, David J. DeEulio, was appointed as trustee. Attorney Stanley J. Lehman was named successor trustee. Angela Koller and her husband subsequently divorced and Atty. Lehman replaced David DeEulio as a trustee. When the Titus Trust was created in May of 2002, all the named parties, with the exception of Atty. Lehman, resided in Lawrence County, Pennsylvania; Atty. Lehman resided in Allegheny County, Pennsylvania and has his principle place of business there.

On November 16, 2010, a petition to terminate inter vivos irrevocable trust was filed before this court on behalf of Jonathan Titus as the settlor and grantor of said trust. The petition contends that Jonathan was induced into signing the Titus Trust agreement and that the same occurred without Jonathan being fully informed of the consequences executing the document. Since the Titus Trust was established, Jonathan himself has only received $250.00 each month, as proscribed in the document, yet Angela Koller and Stanley Lehman have received far greater sums for their services as trustees. Based on these allegations, the petition requested this court to terminate the Titus Trust, recoup the funds expended for unauthorized purposes, and remove Angela Koller and Atty. Stanley Lehman as trustees. This court subsequently issued a citation upon the trustees to show cause why the relief requested in the petition should not be granted, and a hearing was scheduled for February 18, 2011.

Preliminary objections were filed on behalf of Angela Koller and Atty. Stanley Lehman on December 1, 2010, which challenged the authority of this court to act on the petition by arguing improper venue. In their supplemental brief to the court, the trustees argue that prior to the petition to terminate being brought before this court, Atty. Lehman filed the Titus Trust in the Court of Common Pleas of Allegheny County on October 4, 2010 at docket number 02-10-05992. The trustees filed the Titus Trust in Allegheny County after Jonathan Titus expressed his desire to terminate the trust due to ongoing concerns regarding the administration of the Titus Trust. The trustees believe that as a result of this action, filing the Titus Trust in Allegheny County, jurisdiction has been properly assumed by that court.

The petitioner responds to the trustees’ preliminary objections by arguing that the preliminary objections were not properly filed as they were not verified nor endorsed with a notice to plead. A careful review of the court’s file indicates that a certificate - of service immediately follows the trustees’ preliminary objections, and proper verification of all the pleadings have subsequently been filed by the trustees. Therefore, the court finds that the petitioner’s objection has been cured.

The petitioner additionally argues that, irrespective of his objection to the trustees’ preliminary objections, there is not a sufficient basis to establish that venue is proper in Allegheny County. In support of this argument, petitioner cites 20 Pa.C.S.A. §724, which was the law in effect at the time the Titus Trust was created. According to §724, if a trust instrument does not provide for the situs of the trust, the situs shall be in the county of the settlor’s principle residence or in the county where any of the trustees reside. 20 Pa.C.S.A. §724(b)(l)(i). Thus, the situs of the Titus Trust at the time it was established is Lawrence County, and for the trustees to file accounting in a different jurisdiction without notice to Jonathan Titus is improper. The petitioner goes on to argue that the filing of his petition to terminate trust and this court’s response in the form of a citation soundly vests jurisdiction in this court.

The petition and the trustees have made viable arguments in support of their theory on what county is or is not the situs of the Titus Trust. However, a careful review of the applicable facts indicates that either allegheny or Lawrence County would be an appropriate venue for the Titus Trust; Allegheny County is the principle place of business of Atty. Lehman, a trustee, and Lawrence County is the residence of Angela Roller, another trustee.

The controlling statutory law states as follows:

When a Pennsylvania court has jurisdiction of any trust, testamentary or inter vivos, except as otherwise provided by law, the venue for all purposes shall be in the county where at the time being is the situs of the trust. The situs of the trust shall remain in the county of the court which first assumed jurisdiction of the trust, unless and until such court shall order a change of situs under the provisions of this chapter. 20 Pa.C.S.A. §722.

As the trust document itself fails to specify a situs, this court therefore, looks to 20 Pa.C.S.A. § 7708 for further guidance. Section 7708 provides:

If the trust instrument does not specify a situs:
(2) The situs of an inter vivos trust whose settlor is domiciled in this Commonwealth when the trust becomes irrevocable or, in the case of a revocable trust, when the first application is made to a court concerning the trust shall be:
(i) during the settlor’s lifetime, either in the county of the settlor’s principle residence or in the county in which any of the trustees resides or has a place of business 20 Pa.C.S.A. § 7708(b)(2)(i).

Although the court recognizes that the Titus Trust was filed in Allegheny County prior to this court issuing a citation, this action was completed without proper notice to Jonathan Titus as the beneficiary. The petition to terminate clearly indicates that the Titus Trust’s original situs was Lawrence County, as all of the original trustees lived here. In addition to 60 days notification, a trustee can transfer a trust’s situs only if all the qualified beneficiaries consent in writing to the change or court approval. 20 Pa.C.S.A. § 7708(c)-(e).

Given Jonathan Titus’ preference, as both the settlor and the primary beneficiary, for this court to exercise jurisdiction over this case, the court finds that it is unnecessary for Allegheny County to exercise jurisdiction over the case.

The court will issue the following order in accordance with this opinion.

ORDER OF COURT

And now, March 10, 2011, this case being before the court on February 18, 2011, on preliminary objections raising questions of improper venue filed on behalf of the respondents, Angela T. Roller and Atty. Stanley J. Lehman, and with James R. Hankie, Esquire appearing and representing the respondents, and with Frank G. Verterano, Esquire, appearing and representing the petitioner, and the court having completed a thorough review of the record as well as the briefs filed on behalf of the respective parties, the court makes the within findings of facts and orders, adjudges and decrees as follows:

1. The preliminary objections filed on behalf of the trustees, Angela Koller and Atty. Stanley Lehman, are dismissed.

2. This matter shall proceed according to the rules and regulations of the orphans’ court of Lawrence County, Pennsylvania.

3. A hearing on the petition of settlor or grantor to terminate inter vivos irrevocable trust and for other relief is scheduled for the 13th day of May, 2011 at 9:30 o’clock a.cm. in courtroom No. 4 of the Lawrence County Government Center, 1/2 day reserved status.

4. The clerk of the orphan’s court shall serve notice of this order and opinion upon counsel of record for the parties and any party not represented by counsel at their last known address as contained in the court’s file.

      . Proper methods of notice are specifically outlined at 20 Pa.C.S.A. § 7709.


author: COX, J.,

text:
    O’Hara v. Alaron Corp.

      William G. Cohen, for plaintiff.

      Gabriel P. Cilli, for defendants.
    March 15, 2011
   COX, J.,

Before the court for disposition are the preliminary objections filed on behalf of the defendants Alaron Corp., Joseph Harverson, Paul Martin and Sherry Vassilaros, which argue that Count II of the amended complaint is legally insufficient as the plaintiff has failed to establish a claim under the whistleblower provision of the Low-Level Radioactive Waste Disposal Act.

On May 26, 1987, the plaintiff began employment at Alaron Corp. (hereinafter “Alaron”), which is a Pennsylvania corporation located at R.D. #2, Box 2140, Wampum, Lawrence County, Pennsylvania, as atechnician and was eventually promoted to project manager. Alaron is engaged in the business of decontaminating radioactive materials from nuclear power plants and also rebuilds pumps, motors, valves and other components from nuclear power plants. According to the complaint, the plaintiff was refurbishing a small motor which belonged to Surry Power Plant when he noticed Paul Duesenberry, an employee of the Electric Motor Company, attempt to operate a crane belonging to Alaron. The plaintiff explained to Mr. Duesenberry that he was not permitted to operate the crane and he also informed his supervisors at Alaron of Mr. Duesenberry’s actions.

The plaintiff was having difficulty cleaning the small motor he was refurbishing. Initially, Steve Miller, a supervisor for the Electric Motor Company, instructed the plaintiff that he was only permitted to clean the motor with distilled water, but the plaintiff noticed that distilled water did not accomplish the desired result. Mr. Miller subsequently informed the plaintiff to do whatever was necessary to clean the motor. As a result, the plaintiff utilized two types of degreasers and well water to clean the motor. Shortly thereafter, the plaintiff reported the instructions, provided by Mr. Miller, to his superiors at Alaron because he believed that the actions were dangerous to Alaron’s employees, employees of the Electric Motor Company and the general public. On June 28, 2004, the plaintiff’s employment was terminated by Alaron for alleged poor performance. However, the plaintiff believes he was terminated in retaliation for reporting the incidents involving Mr. Duesenberry’s use of the crane and Mr. Miller’s directions to improperly clean the motor.

On December 27, 2004, the plaintiff filed a writ of summons with the Office of the Prothonotary of Lawrence County. Eventually, the plaintiff also filed a complaint on January 11, 2010, which was approximately five years after he filed the writ of summons. The defendants responded by filing preliminary objections, which included the aforementioned claims of legal insufficiency and request for judgment of non pros. Oral argument regarding the defendants’ preliminary objections was held before this court on June 28, 2010. The court sustained the defendants’ preliminary objections on September 22, 2010, and dismissed counts I through IV and counts VI through VIII with prejudice. It must be noted that count V regarding the Pennsylvania Whistleblower Law was also dismissed, but the plaintiff was permitted to amend that claim. However, the court denied the defendants’ request for judgment of non pros.

On October 12, 2010, the plaintiff filed an amended complaint, which contained five counts. It is important to note that the amended complaint was substantially the same as the original complaint filed by the plaintiff and included the claims that were dismissed with prejudice. The plaintiff subsequently contacted the Office of the District Court Administrator and requested a time to file and argue various motions, which was done on October 28,2010. At that time, counsel for plaintiff presented a motion for leave to file amended complaint, a motion for certification for interlocutory appeal and a motion for reconsideration. It is important to note that those documents were presented to the court beyond the 30-day period from the filing of the order of court on September 22, 2010, sustaining the original preliminary objections. In response, the defendants filed preliminary objections to the amended complaint on October 29,2010. The court entered an order on November 19, 2010, denying the motion for leave to file amended complaint, the motion for certification for interlocutory appeal and the motion for reconsideration. At the same time, the defendants presented a motion for sanctions, which the court granted and dismissed Counts I, III, IV and V of the plaintiff’s amended complaint as those claims were previously dismissed with prejudice.

“A preliminary objection in the nature of a demurrer is properly granted where the contested pleading is legally insufficient.” Cooper v. Frankford Health Care System, Inc., 960 A.2d 134, 143 (Pa. Super. 2008) (citing Cardenas v. Schober, 783 A.2d 317, 321 (Pa. Super. 2001)). A demurrer must be resolved'based solely on the pleadings, no testimony or evidence outside of the complaint may be considered to dispose of the legal issue presented. Id. “All material facts set forth in the pleading and all inferences reasonably deducible therefrom must be admitted as true.” Hess v. Fox Rothschild, LLP, 925 A.2d 798, 805 (Pa. Super. 2007) (citing Cardenas, supra.). A demurrer will only be sustained in cases where the complaint fails to set forth a valid cause of action. Lerner v. Lerner, 954 A.2d 1229, 1235 (Pa. Super. 2008) (citing McArdle v. Tronetti, 627 A.2d 1219, 1221 (Pa. Super. 1993)). If a doubt exists regarding whether a demurrer should be sustained, the doubt must be resolved in favor of overruling the demurrer. R. W. v. Manzek, 585 Pa. 335, 351, 888 A.2d 740, 749 (2005) (citing Orner v. Mallick, 515 Pá. 132,135, 527 A.2d 521, 523 (1987)).

Count II of the plaintiff’s amended complaint asserts that Alaron violated the Pennsylvania Whistleblower Law and the whistleblower provision in the Low-Level Radioactive Waste Disposal Act. This court previously dismissed the plaintiff’s claim pursuant to the Pennsylvania whistleblower Law in the order of court dated September 22, 2010. In his amended complaint, the plaintiff again failed to plead sufficient facts to sustain a cause of action under the Pennsylvania Whistleblower Law in accordance with the court’s opinion dated September 22, 2010.

Now, the court must. address whether Alaron has established a claim pursuant to the whistleblower provision of the Low-Level Radioactive Waste Disposal Act, which states, “No employer may discharge, threaten or otherwise discriminate or retaliate against an employee regarding the employee’s compensation, terms, conditions, location or privileges of employment because the employee or a person acting on behalf of the employee makes a good faith report or is about to report, verbally or in writing, to the employer or appropriate authority an instance of wrongdoing.” 35 P.S. §7130.509(a). The definitions section of that statute defines wrongdoing as, “A violation which is not of a merely technical or minimal nature of a Federal or state statute, regulation, license, permit or order relating to the operation of low-level waste facilities or relating to the preservation of the public health and safety in relation to such facilities.” 35 P.S. §7130.509(d). It must be noted that this act is “to be liberally construed so as to best achieve and effectuate the goals and purposes thereof.” 35 P.S. §7130.902. In the amended complaint, the plaintiff states that the acts he reported were violations of Section 206(a) of the Energy Reorganization Act of 1974, 42 U.S.C. §5846(a), 10 C.F.R. §§71.119, 71.127, 71.131 and 71.133. Section 206(a) of the Energy Reorganization Act states:

Sec. 206. Noncompliance
(a) Any individual director, or responsible officer of a firm constructing, owning, operating, or supplying the components of any facility or activity which is licensed or otherwise regulated pursuant to the Atomic Energy Act of 1954 as amended, or pursuant to this Act, who obtains information reasonably indicating that such facility or activity or basic components supplies to such facility or activity-
(1) fails to comply with theAtomic Energy Actof 1954, as amended, or any applicable rule, regulation, order, or license of the commission relating to substantial safety hazards, or
(2) contains a defect which could create a substantial safety hazard, as defined by regulations which the commission shall promulgate, shall immediately notify the commission of such failure to comply, or of such defect, unless such person has actual knowledge that the commission has been adequately informed of such defect or failure to comply.

42 U.S.C. §5846(a) mandates:

Any individual director, or responsible officer of a firm constructing, owning, operating, or supplying the components of any facility or activity which is licensed or otherwise regulated pursuant to the Atomic Energy of 1954 as amended, or pursuant to this Chapter, who obtains information reasonably indicating that such facility or activity or basic component supplied to such facility or activity —
(1) fails to comply with theAtomic Energy Act of 1954, as amended, or any applicable rule, regulation, order, or license of the commission relating to substantial safety hazards, or
(2) contains a defect which could create a substantial safety hazard, as defined by regulations which the commission shall promulgate,
shall immediately notify the commission of such failure to comply, or of such defect, unless such person has actual knowledge that the commission has been adequately informed of such defect or failure to comply.

Moreover, “The licensee...shall establish measures to assure that special processes, including welding, heat treating, and nondestructive testing are controlled and accomplished by qualified personnel using qualified procedures in accordance with applicable codes, standards, specifications, criteria, and other special requirements.” 10 C.F.R. §71.119. Licensees are also required to establish measures to control the cleaning and preservation of materials and equipment to be used in packaging to prevent damage or deterioration. 10 C.F.R. §71.127. “The licensee...shall establish measures to control materials, parts, or components that do not conform to the licensee’s requirements to prevent their inadvertent use or installation.” 10 C.F.R. §71.131. Licensees are also required to take measures to assure any conditions that are adverse to quality or in nonconformance are promptly identified and corrected. 10 C.F.R. §71.133.

In the case sub judice, the plaintiff avers that shortly before the termination of his employment at Alaron, while he was cleaning a small motor which belonged to Surry Power Plant, he observed Paul Duesenberry attempt to operate a crane belonging to Alaron. The plaintiff thought that Mr. Duesenberry was not qualified to operate the crane and he advised his supervisors of this incident, which he believed he was required to do pursuant to the aforementioned federal statutes and regulations. Additionally, the plaintiff was instructed by Steve Miller, the supervisor at Electric Motor Company, that all small motors were to be cleaned with distilled water and solvents were not to be used. However, the plaintiff was unable to remove the debris from the motor utilizing distilled water, so he contacted Mr. Miller and informed him of the problem. Mr. Miller instructed him to do whatever was necessary to clean the motor, so the plaintiff used two different types of degreaser and well water to clean the motor. The plaintiff also believed that those instructions were in violation of the aforementioned federal statutes and regulations, which required him to inform his superiors at Alaron.

On June 24,2004, the plaintiff’s employment at Alaron was terminated. The defendant explained that the plaintiff’s employment was terminated for poor performance.

These facts are not sufficient to establish a claim pursuant to 35 P.S. §7130.509. The amended complaint is devoid of any allegation that Mr. Duesenberry operating the crane or Mr. Miller instructing the plaintiff to clean the small motor with solvents affected the processing or disposal of radioactive waste. Furthermore, there is no mention as to how these events violated a state or federal statute which required the plaintiff to report them to his supervisor. It is also important to note that the amended complaint does not contain an averment explaining whether those actions affected the public health or safety. Although the plaintiff avers that Alaron is a licensee of the Nuclear Regulatory Commission, there is no indication that the events in this case affected its ability to safely dispose of low-level radioactive waste in a manner that would require presenting a report to the NRC or to any other agency or commission assigned to supervising the disposal of radioactive waste. Even if the court examines Count II of the amended complaint in a light most favorable to the plaintiff, the violations alleged are either merely technical or minimal in nature, which places them outside of the scope of the definition of wrongdoing as defined by the whistleblower provision of Low-Level Radioactive Waste Disposal Act. 35 RS. §7130.509(d). Additionally, there is no indication that the. incidents for which the plaintiff informed his supervisors caused any risk of danger in the processing of radioactive waste, which further demonstrates that the plaintiff failed to plead a cause of action in Count II of his amended complaint.

For the reasons set forth in this opinion, the court sustains the defendants’ preliminary objections to the amended complaint and Count II of the plaintiff’s amended complaint is dismissed with prejudice.

ORDER OF THE COURT

And now, March 15, 2011, this case being before the court on February 28, 2011, for oral argument on the preliminary objections filed on behalf of the defendants, with all parties appearing, the plaintiff, Randy L. O’Hara, represented through counsel, William G. Cohen, Esquire, the defendant Alaron Corp., represented through counsel, Gabriel P. Cilli, Esquire and after consideration of the preliminary objections filed by the defendant, the court enters the following order and it is hereby ordered, adjudged and decreed as follows:

1. The preliminary objections are hereby sustained.
2. In accordance with the attached opinion, the amended complaint filed by the plaintiff is hereby dismissed with prejudice.
3. The prothonotary is directed to serve a copy of this order of court upon counsel of record, William G. Cohen, Esquire and Gabriel P. Cilli, Esquire.

      . Employees of the Electric Motor Company worked in conjunction with Alaron’s employees to refurbish the small motor which belonged to Surry Power Plant.


author: MINORA, J.,

text:
    Gentex Corp. v. Crew Systems Corp.

      Daniel T. Brier and Donna A. Walsh, for plaintiff.

      Marianne J. Gilmartin, for defendant.
    March 25, 2011
   MINORA, J.,

FACTUAL BACKGROUND

Defendant in this commercial dispute has filed a number of preliminary objections to the amended complaint of plaintiff. This in turn has fueled numerous preliminary objections to the preliminary objections noted above. Plaintiff has also filed objections to defendant’s amended counterclaim resulting in more preliminary objections to plaintiff’s preliminary objections. They are now all ripe for disposition. Defendant Crew System, Inc. (hereinafter “Crew”) was employed by plaintiff Gentex Corporation (hereinafter “Gentex”) as a sub-contractor in anticipation of submitting a competitive proposal for the design and manufacture of air masks for the United States Air Force (hereinafter “USAF”).

The proposal for the USAF involved air masks to be used by the USAF for their Joint Services Aircrew Mask (hereinafter “JSAM”) project. In furtherance of their goal, Gentex, Crew and a third company, ILC Dover, entered into a teaming agreement on or about May of 2000. This agreement was attached to Gentex’s complaint as Exhibit “A.”

The allegation is that this teaming agreement bound these three parties Gentex, Crew and ILC Dover to be exclusive members of the Gentex team not participating with any other competitor during the JSAM proposal and program.

The rationale for this exclusivity was that Gentex anticipated sharing highly proprietary information with Crew and therefore there was an expectation of confidentiality and exclusivity among all team members.

The JSAM program had three distinct phases which were:

(1) Program definition and Risk Reduction (hereinafter “PDRR”).
(2) System Development and Demonstration (hereinafter “SDD”).
(3) Production which would be awarded to the successful SDD contractor.

Additionally, Gentex alleges that all parties to this teaming agreement also agreed that they would keep in confidence all proprietary information belonging to any other team members and neither disclose the confidential information to any third party nor use such information for their own competitive benefit.

Ultimately, the parties worked together to create an initial proposal for the JSAM program. Gentex claimed it shared their highly proprietary and confidential information with Crew and other team members in the formulation of this proposal. The initial Gentex/Crew team proposal to the USAF was unsuccessful and in 2002 the USAF chose to select another competing contractor named Scott. In 2005, the USAF, unhappy with Scott, again sought proposals from manufacturers interested in replacing Scott for the fixed wing portion of the JSAM program.

In response to this second call for JSAM proposals from the USAF, Gentex alleges that Crew elected to improperly partner with another manufacturer known as BAE Systems (hereinafter “BAE”) in pursuit of the 2005 JSAM program. Accordingly, Gentex commended this suit on May 5, 2005 to enjoin Crew from pursuing the 2005 JSAM program on its own or in collaboration with BAE or any other potential partner/competitor of Gentex. Gentex further sought to prevent Crew from disclosing any proprietary information, trade secrets or confidential information belonging to Gentex and/or other team members from the original teaming agreements.

Crew argues that the initial contract award by the USAF to Scott effectively terminated the Teaming Agreement. Crew further argues that the conduct of the parties between 2002, the time of the first USAF contract award to Scott, and the time of the second bid in 2005 verifies that the original Teaming Agreement is no longer valid. This argument ignores the time duration language in the original Teaming Agreement which binds the parties, “... during the JSAM proposal and program.” (See clause 1(a) of the Teaming Agreement)

Gentex pursued the 2005 USAF request for proposals and submitted a proposal in November 2005. On April 13, 2006, the Air Force announced its decision to award the JSAM contract to the Gentex team. SSD work on the awarded contract began immediately and was anticipated to last multiple years.

On or about May of 2006, Vision System International (hereinafter “Vision”) announced its intention to solicit proposals from members of the industry who had an interest in supplying a chemical/biological respirator for use in connection with the Joint Strike Fighter (hereinafter “JSF”) being developed by Lockheed Martin for the USAF.

The JSF was identified as a fixed wing aircraft on which the JSAM platform may be employed. Accordingly, Gentex alleges that the JSF program became essentially a continuation of the original JSAM program and thus is encompassed by the original Teaming Agreement from 2000.

Despite the Gentex position that the JSF represented a continuation of the JSAM program and was thus covered under the original Teaming Agreement on June 26, 2006 officials from Crew attended a bidders conference either on its own or in conjunction with a bidder who is a Gentex competitor and not within the Teaming Agreement.

PROCEDURAL BACKGROUND

Gentex Complaint/Amended Complaint

This multiyear protracted and tortuous factual history resulted in Gentex filing a four count complaint. Count I alleged a breach of contract essentially alleging that the Teaming Agreement remained in full force and effect and that it was never terminated. It further alleged that Crew materially breached the Teaming Agreement in its collaboration with BAE or any other Gentex competitor on either the JSAM or JSF projects.

Count II of the complaint alleged a violation of the Uniform Trade S ecrets Act (12Pa.C.S.A.§5301).F actually, it stated that Crew has access to Gentex’s information and drawings and improperly misappropriated these Gentexowned trade secrets for Crew’s own benefit. It seeks injunctive relief as well as counsel fees and damages as allowed by statute.

Count III seeks a permanent injunction against Crew to enjoin Crew from any pursuit of the JSAM program technology alone or with others. Further, it seeks declaratory relief that the original Teaming Agreements’ non-disclosure provisions remain valid and enforceable.

Count IV alleges a violation of the State of California’s Uniform Trade Secrets Act explaining that the Teaming Agreement includes their choice of law provisions and alleging violations similar to those summarized at Counts I, II and III above.

Gentex later filed an amended complaint consisting of substantially similar allegations to those outlined above on November 20, 2006, factually updating the complaint to the 2005 contract lawsuit.

Crew’s Amended Counterclaim

Not to be outdone in making allegations of misconduct, Crew has filed amended counterclaims to Gentex’s pleadings outlined above.

Crew alleges in its counterclaim that during the initial collaboration with Gentex and ILC Dover during the PDRR and SDD phases of the first USAF proposal, Crew solely designed and developed highly technical components without either technical or financial assistance from either Gentex or ILC Dover.

Crew alleges that these three components are their sole and exclusive intellectual property and that Gentex continued to improperly use these technical components in pursuit of its JSAM and JSF business with the USAF.

Those technical components are alleged to be:

(1) T-connector
(2) Emergency Demist Value
(3) Checked Bladder Control

Crew also argues, using its own findings and without any technical contribution from Gentex and ILC Dover, it invented and developed a high-performance fixed wing solution contained in the original SDD proposal to the USAF. This solution is called “Adjustable OFRHandshell Concept.”

Crew claims this concept and the three technical concepts noted above are their trade secrets and their intellectual property arising during the time that they collaborated with Gentex and ILC Dover.

Crew goes on to assume the legal position that once that original work was lost by awarding the SDD contract to Scott then the Teaming Agreement terminated. A further argument that the original Teaming Agreement terminated is that Gentex and Crew could never agree on a subcontractor’s statement of work before the SDD award to Scott as was alleged to be required by the Teaming Agreement.

In furtherance of Crew’s position that the Teaming Agreement expired in November 2002, Crew alleges Gentex directed its employees to cease and desist all business discussions with Crew in January of 2003.

Crew says yet a further indication that the original Teaming Agreement was no longer in effect arose in September of 2004 when Gentex and ILC Dover met to discuss their plan to respond to an anticipated new solicitation by the USAF for a JSAM respirator. Crew says they were never invited into this new round of USAF solicitations nor did they submit a 2005 proposal. Once again, clause 1(a) of the Teaming Agreement says that the agreement lasts “...during the JSAM propseal and program.”

In addressing the issues of the JSF and Vision, Crew posits that VST is a subcontractor to Lockheed Martin Aeronautical Company in the JSF program. VSI submitted a proposal to the USAF in May of 2006 to develop a respirator compatible with the current JSF helmet and optical system for the JSF aircraft. Crew says that this JSF program is totally distinct and unrelated from any past JSAM request for proposals from the USAF including especially the request for proposals that gave rise to the original Teaming Agreement. Crew argues that the VSI JSF solicitation is essentially totally unrelated to JSAM.

The court finds it difficult to discern Crew’s contradictory position that these matters are totally unrelated to the original JSAM proposal when at the same time Crew asserts the continued use of their three proprietary components from JSAM as well as the OFR Handshell concepts which allegedly arose out of JSAM. Crew asserts these components still remain viable in Gentex’s present contractual relationship with the USAF.

Crew says that the three technical components and the Adjustable OFR Hardshell Concepts are their sole and exclusive intellectual property that has been maliciously and willfully misappropriated by Gentex in violation of Pennsylvania and California Uniform Trade Secrets Act. Crew too is seeking injunctive relief against Gentex.

Making allegations that mirror image Gentex’s allegations, Crew alleges breach of contract — restraint of trade under California Law Cal. Bus. and Professional Code §16600. They seek unfair competition relief under California Code § 17000,17200. They seek relief for unjust enrichment, intentional interference with prospective economic advantages and declaratory and injunctive relief as well as all damages allowed by law.

Gentex Preliminary Objections to Crew’s Amended Counterclaim

Gentex, in response to Crew’s counterclaim, has filed preliminary objections demurring under Pa. R.C.P. 1028(a) (4) to Count III, the California Uniform Trade Secrets Act. Gentex also demurs to Count IV pursuant to Pa.R.C.P. 1028(a) alleging that disclosure of all to the USAF was authorized and contemplated by the Teaming Agreement and since this was Gentex’s only disclosure, it cannot be the basis for a breach of contract cause of action. They further allege that such a claim by Crew against Gentex is time barred by California Code of Civil Procedure §337 which sets a four-year statute of limitations. They go on to allege that since Crew knew this in September of 2002 and did not raise it within four years, it is barred.

Gentex also demurred to Count V under California Business and Professional Code §16600; Count VI unfair competition; Count VII unjust enrichment; and Count VIII intentional interference.

Finally, Gentex files a motion to strike Count IX and raises the affirmative defense of statute of limitations in Crew’s counterclaim for a violation of the Uniform Trade Secrets Act.

Crew Preliminary Objections to the Gentex Preliminary Objections

Gentex also raises what it improperly calls the affirmative defense of statute of limitations against Crew’s amended counterclaim allegations of breach of contract.

In response, Crew properly states that raising as a defense, the bar of statute of limitations must be doné as new matter under Pa.R.C.P. 1030 and cites Superior Court case law in Devine v. Hutt, 863 A.2d 1160 (Pa. Super. 2004), for this proposition unless the particular statute of limitations is non-waivable.

A limitation period is unwaivable when it implicates the court’s fundamental jurisdiction to entertain a claim. Neither statute under which Crew raised its amended counterclaims are jurisdictional in nature. Therefore, Gentex must raise the statute of limitations as new matter. See Pa.R.C.P. 1030.

Crew s Preliminary Objections to Gentex’s amended Complaint

Crew generically claims that Gentex’s amended complaint fails to state a legally sufficient claim for breach of contract in violation of Pa.R.C.P. 1028(a)(4), essentially stating that Gentex will never be able to show actual damages because it ultimately obtained the ISAM from the USAF. Crew says damages are an essential element of the cause action for breach of contract which Gentex cannot claim; therefore, Gentex cannot legally state a claim.

Crew’s next objection states Gentex now has been awarded the JSAM contract; therefore, there is nothing to enjoin and Count I should be dismissed.

Crew’s next objection is the failure to attach a writing to the breach of contract claim in violation of Pa. R.C.P. 1019(i). First, it is presumed that since both Crew and Gentex signed the original Teaming Agreement along with ILC Dover in 2000, then they must have a copy of this document which represents their contract forming the basis of this suit. No one has denied that they possess the Teaming Agreement contract.

The 2000, 2002 and 2005 systems requirements can be acquired in discovery.

The next Crew obj ectionto Gentex’s amended complaint is that Count II under the Pennsylvania Uniform Trade Secret Act fails to state a legally sufficient cause of action because only choice of California law is an option under the Teaming Agreement. Even assuming Pennsylvania law applied, no misappropriation has been shown.

Crew objections to Count III cannot apply, it is alleged, because the US AF awarded the contract to Gentex on April 13,2006 and therefore, there is nothing leftto enjoin. Crew also once again raises the systems requirements writing arguments of 2000, 2002 and 2005 noted above.

Crew objects to Count IV, the California Uniform Trade Secrets Act section pursuant to Pa.R.C.P. 1028(a)(3). It generally alleges lack of sufficient specificity and failure to adequately state a claim. The essence of this objection is that the pleading tracks the statutory language but never identifies what specific trade secrets Crew’s supposed to have taken from Gentex. Absent that, Gentex cannot show a “misappropriation” by Crew.

Gentex Preliminary Objections to Crew’s Preliminary Objections to Gentex’s Amended Complaint

Gentex argues that Crew’s preliminary objections to Gentex’s amended complaint are essentially improper attempts to challenge the evidence rather than challenging the sufficiency of the allegations pled in Gentex’s amended complaint. Gentex alleges that this defective approach by Crew is a patent violation of the directives of Pa R.C.P. 1028(a)(4).

Standards for Preliminary Objections

My colleague Judge Terrence R. Nealon has recently visited the standards for preliminary objections in the case of Sparrow et al. v. Pace et al., 2010 CV 5086, filed February 11,2011, at page 8. In that authoritative opinion he ruled:

a preliminary objection in the nature of a demurrer is properly granted where the contested pleading is legally insufficient. Jones v. Nationwide Property and Cas. Ins. Co., 995 A.2d 1233, 1237 (Pa. Super. 2010). In making that determination, all material facts set forth in the challenged pleading and all inferences reasonably deducible therefrom are accepted as true. Foster v. UPMC South Side Hospital, 2 A.2d 655, 662 (Pa. Super. 2010). Preliminary objections may be sustained only in cases that are clear and free from doubt, and to be deemed clear and free from doubt, “it must appear with certainty that the law would not permit recovery by the plaintiff upon the facts averred.” Ira G. Steffy & Son, Inc. v. Citizens Bank of Pennsylvania, 7 A.3d 278, 282-283 (Pa. Super. 2010).

We ruled similarly in the case of Menichello v. The Borough of Clarks Summit, 09 CV 6251, at pages 3 and 4.

Preliminary objections are governed by Pa.R.C.P. 1028. “Preliminary objections in the nature of [a] demurrer test the legal sufficiency of the plaintiff’s complaint.” State Farm Mut. Auto. Ins. Co. v. Ware’s Van Storage, 953 A.2d 568, 571 (Pa. Super. 2008) (quoting Sexton v. PNC Bank, 792 A.2d 602, 604 (Pa. Super. 2002)). It is not necessary that the plaintiff identify the specific legal theory underlying the complaint, as it is the court’s duty to discover from the facts alleged in a complaint the cause of action, if any, stated therein. Cardenas v. Schober, 783 A.2d 317, 325 (Pa. Super. 2001). Accordingly, the court must examine the complaint to determine whether it sets forth a cause of action that, if proven, would vest the plaintiff with a right to relief. State Farm Mut. Auto. Ins. Co., 953 A.2d at 571.

The Commonwealth court provided the guidelines for examining legal insufficiency of a pleading (demurrer) in Richardson v. Beard, 942 A.2d 911, 913 (Pa. Cmwlth. 2008) (citations omitted):

In considering preliminary objections, we must consider as true all well-pleaded material facts set forth in the petition and all reasonable inferences that may be drawn from those facts. Preliminary objections will be sustained only where it is clear and free from doubt that the facts pleaded are legally insufficient to establish a right to relief We need not accept as true conclusions of law, unwarranted inferences from facts, argumentative allegations or expressions of opinion, (emphasis added).

“The question presented by the demurrer is whether, on the facts averred, the law says with certainty that no recovery is possible.” Mistick Inc. v. Northwestern Nat’l Cas. Co., 806 A.2d 39, 42 (Pa. Super. 2002) (citation omitted). Preliminary objections in the nature of a demurrer require the court to resolve the issues solely on the basis of the pleadings; no testimony or other evidence outside the complaint may be considered to dispose of the legal issues presented by the demurrer, (citation omitted), Cooper v. Frankford Health Care System, Inc., 2008 WL 4615714, 6 (Pa. Super. 2008). Any doubt as to the legal sufficiency of the complaint should be resolved in favor of overruling the demurrer. Kane v. State Farm Fire & Gas Co., 841 A.2d 1038 (Pa. Super. 2003). Further, the Rules of Civil Procedure are to be liberally interpreted. See, Pa.R.C.P. 126.

'Insufficient Specificity Pa.R.C.P. §1028(a)3.

In Sparrow, supra, Judge Nealon at pages 8 and 9 also addressed the issue of insufficient specificity. In that authoritative opinion he stated:

Defendants also raise preliminary objections pursuant to Pa. R.C.P. 1028(a)(3) and seek to strike certain averments on the grounds of insufficient specificity. The purpose of a complaint is to place the defendant on notice of the claims upon which [s]he will have to defend. Carlson v. Community Ambulance Services. Inc., 824 A.2d 1228, 1232 (Pa. Super. 2003); Lavelle Murray v. Haggerty, 2 D.&C. 5th 338, 346-347 (Lacka. Co., 2006); Mulderig v. Allstate Insurance Company, 105 Lacka. Jur. 1,8 (2003). “Under Pennsylvania’s fact pleading system, the complaint need only state the material facts upon which a cause of action is based.” Grossman v. Burke, 868 A.2d 561, 569 (Pa. Super. 2005), app. denied, 585 Pa. 697, 889 A.2d 89 (2005); Lavelle Murray, 2 D.&C. 5th at 347.

To determine if a pleading is sufficiently specific, a court must ascertain whether the facts alleged are sufficiently specific to enable a defendant to prepare his defense.” Unified Sportsman of Pennsylvania v. Pennsylvania Game Commission, 950 A.2d 1120, 1134 (Pa. Cmwlth. 2008). Accord, Rambo v. Greene, 906 A.2d 1232, 1236 (Pa. Super. 2006). When considering 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. Edmission, 813 A.2d 862, 870 (Pa. Super. 2002); Yacoub v. Lehigh Valley Medical Associates, 805 A.2d 579, 589 (Pa. Super. 2003), app. denied, 573 PA. 692, 825 A.2d 639 (2003); Mulderig, supra. “Only then can the court determine whether the defendant has been put upon adequate notice of the claim against which [s]he must defend.” Grossman. 868 A.2d at 569; Lavelle Murray, supra.

Failure to Attach a Writing Pa.R.C.P. 1019(i)

Again, we refer to Sparrow, supra, at page 31 wherein Pa.R.C.P. 1019(i) is authoritatively referenced by Judge Nealon.

Pennsylvania Rule of Civil Procedure 1019(i) states that “[w]hen any claim...is based upon a writing, the pleader shall attach a copy of the writing or that material part thereof, but if the writing or copy is not accessible to the pleader, it is sufficient so to state, together with the reason, and to set forth the substance in writing.” Pa.R.C.P. 1019(i). The failure to attach a relevant writing to a pleading is generally considered to be a fatal defect, see, Atlantic Credit and Finance, Inc. v. Giuliana, 829 A.2d 340, 345 (Pa. Super. 2003), app. denied, 577 Pa. 676, 843 A.2d 1236 (2004), and “[o]rdinarily, a complaint should be stricken for failure to attach an essential document.” Adamo v. Cini, 656 A.2d 576, 579 (Pa. Cmwlth. 1995). If the pleader avers that the writing is already in the possession of the defendant and the pleader sets forth the relevant substance of that document, preliminary objections based upon the failure to attach a copy of the document should be overruled. See McClellan v. HMO of Pennsylvania, 413 Pa. Super. 128, 145 n. 10, 604 A.2d 1053, 1061 n. 10 (1992), app. denied, 532 PA. 664, 616 A.2d 985 (1992); Petty v. Scranton School District, 101 Lacka. Jur. 137, 145 n. 4(1999).

New Matter Pa.R.C.P. 1030

Gentex in their preliminary objections to Crew’s amended counterclaim raises what they have referred to as the affirmative defense of statute of limitations. Pa.R.C.P. 1030(a), entitled “New Matter” states that, “(a) Except as provided by subdivision (b), all affirmative defense including but not limited to the defenses of...statute of limitations...,s7za// be pleaded in a responsive pleading under the heading ‘New Matter.’” Emphasis added.

At Volume 3 Goodrich-Amram section 1030(a):5, that treatise states that, “All affirmative defenses both those specifically listed at Pa. R.C.P. 1030(a) and those not included on the list those set forth must be pleaded under the heading ‘new matter.”’ Pa.R.C.P. 1030. Emphasis added.

The language of Rule 1030 is clear and unambiguous and it may not be disregarded. Evans v. D’Iorio, 519 A.2d 983 (Pa. Super. 1987). It is therefore improper to raise any affirmative defenses, in an ordinary case, by demurrer or through the use of other preliminary objections. Morris v. Hanover Two. Brd. of Supervisors, 4 D.&C. 3rd 245, 1977 WL 366 (CP 1977).

The defense of state of limitations is specifically listed at Pa.R.C.P. 1030(a) as an affirmative defense that may only be raised in a responsive pleading under the heading “New Matter” and conversely not as a preliminary objection. Kyle v. McNamara & Criste, 506 Pa. 631, 487 A.2d 814 (1985).

When the statute of limitations is properly raised as new matter in the answer and it appears from the allegations on the face of the complaint that the statute of limitations clearly bars the cause of action and there is no theory upon review of the plaintiff’s complaint to avoid this bar, then a motion for judgment on the pleadings may be properly brought to assert such a ground. Giangiordano v. Allstate Ins., Co., 482 A.2d 1005 (Pa. Super. 1984).

Dispositions

The first series of objections previously outlined in detail above arose from Gentex in response to Crew’s amended counterclaim. Initially, Gentex raises a series of preliminary objections in the form of demurrers to Crew’s counterclaim at Counts III, IV, V, VI, VII and VIII.

As noted earlier, preliminary objections in the nature of demurrers should be sustained only if, “...assuming the averments of the complaint to be true, the plaintiff has failed to assert a legally cognizable cause of action.” Lerner v. Lerner, 954 A.2d 1299 (Pa. Super. 2008).

On a preliminary objection in the nature of a demurrer, the material facts set forth in the pleading and all inferences reasonably deductible therefrom must be admitted as true. Cooper v. Frankford Healthcare System, Inc., 960 A.2d 134 (Pa. Super. 2008), app. denied, 601 Pa. 679, 970 A.2d 431.

After a review of the Gentex demurrers in the legal context noted above and earlier, it is clear that Crew’s amended counterclaim at Counts III, IV, V, VI, VII and VIII, on their face, state legally cognizable causes of action and therefore each of the those six demurrers by Gentex are dismissed and denied.

As to Count IX, Gentex raised a motion to strike. Count IX is essentially an action for equitable relief in the form of declaratory judgment and injunctive relief. The core of this portion of the dispute revolves around the impact of the USAF awarding the original SDD to Scott on or about November 26, 2002.

Crew argues that this USAF award to Scott acted to terminate the Teaming Agreement. Due to the agreement’s termination, Crew argues Gentex was required to cease use of all of Crew’s proprietary information, intellectual property and trade secrets in its possession.

Crew contends any continued use by Gentex of Crew’s intellectual property is a breach of contract, unfair competition, restraint of trade and interference with the contractual relations and these alleged misdeeds must be enjoined.

Gentex moves to strike these allegations pursuant to Pa.R.C.P. 1028(a)(2) and (8).

Essentially Gentex argues that Crew’s Count IX does not confirm to law or rules of court and/or it includes scandalous and impertinent matter. Gentex further argues that Crew has a full, complete and adequate non-statutory remedy at law.

We disagree. The parties’ disagreement in the context of Count IX comes down to differing views of the impact of the USAF awarding the first SDD to Scott on November 26, 2002. This disagreement does not make the assertions improper, legally deficient or impertinent.

Accordingly, we find the motion to strike filed to Count IX by Gentex is dismissed and denied. Since we have denied and dismissed Gentex’s six demurrers and their motion to strike and thus, denied all of their preliminary objections, Crew’s preliminary objections to Gentex’s initial preliminary objections are now rendered moot by these decisions.

Gentex subsequently filed an amended complaint which drew similar preliminary objections from Crew.

First, Crew filed general generic preliminary objections in the nature of a demurrer pursuant to Pa.R.C.P. 1028(a) (4). These objections alleged generally Gentex failed to allege the essential elements of a cause of action for breach of contract.

The gravamen of these objections seems to be that since Gentex was subsequently awarded a contract from the USAF, they can have no damages.

This argument is disingenuous and devoid of merit. The terms of a new award to Gentex by the USAF may be more unfavorable than originally anticipated in 2002. Crew did not conceive of this as a possibility.

This initial general demurrer by Crew against Gentex is dismissed and denied.

The next objection by Crew to Gentex’s amended complaint deals with Count I and states that since the USAF has already awarded JSAM to Gentex there is nothing to enjoin. The past facts of this case upset this argument. The USAF awarded a contract to Scott on 2002 and it had to be rebid. Could this happen here? It already has; therefore, this objection by Crew to Count I of Gentex’s amended complaint is also dismissed and denied.

Crew’s next objection goes to the failure of Gentex to attach writings upon which it explicitly bases its breach of contract claim is based in violation of Pa. R.C.P. 1019(i). The allegations by Crew is that Gentex’s claim fails to attach a copy of the 2000, 2002 and 2005 JSAM system requirements which is the basis for Gentex’s claim not the Teaming Agreement.

First, this is a breach of contract claim and the contract alleged to be breached is the Teaming Agreement. Pa. R.C.P. 1019(i) allows for a writing not to be attached if it is already in possession of both parties. See McClellan v. HMO of Pennsylvania, 604 A.2d 1053,1061 n. 10 (Pa. Super. 1992) app. denied, 616 A.2d 985 (Pa. Super. 1992).

Crew has never denied not having their copy of the Teaming Agreement. The system requirements for 2000, 2002 and 2005 have no bearing on the bilateral relationship between Crew and Gentex. Objection dismissed and denied.

Next is Crew’s objection to Count II alleging a violation of the Pennsylvania Uniform Trade Secrets Act pursuant to Rule 1028(a)(4). The allegation is Gentex fails to state a legally sufficient substantive claim because the contract’s choice of law provision designates the trade secrets law of the State of California to govern. We agree. This objection thus is granted. It has previously been determined by this court that substantive California law governs and that represents the law of the case.

Crew’s next objection is to Count III of Gentex’s amended complaint and it is redundant. It mirrors the general and generic objection Crew originally made saying there is nothing left to enjoin. It is similarly dismissed and denied for the same reasons originally noted.

Crew’s next three preliminary objections address three counts dealing with the California Uniform Trade Secrets Act. They are all denied as an improper attempt to challenge the evidence underlying the claims rather than the sufficiency of the allegations comprising the amended complaint. All three objections are dismissed and denied.

These dispositions render and make moot most of Gentex’s preliminary objections to Crew’s preliminary objections. The only exception being an objection granted to preclude use of Pennsylvania’s Trade Secrets Law. Since this has already been ruled upon and is now the law of this case, Gentex’s preliminary objection to Crew’s preliminary objection is dismissed and denied.

A comprehensive order consistent with this memorandum will follow.

ORDER

And now to wit, this March, 25 2011, upon due consideration to all preliminary objections filed, the responses thereto, all supporting briefs and the able verbal and written arguments of counsel, and the court’s own independent research as reflected in the forgoing memorandum, it is hereby ordered and decreed as follows:

(1) Gentex’s six demurrers to counts III, IV, V, VI, VII and VIII of Crew’s amended counterclaim are all in total dismissed and denied.
(2) Gentex’s motion to strike Count IX of Crew’s amended counterclaim is dismissed and denied.
(3) Crew’s preliminary objections to Gentex’s preliminary obj ections to Crew’s amended counterclaim are all now rendered moot by the court’s decision at paragraphs 1 and 2 above.
(4) Crew has filed eight preliminary objections to Gentex’s amended complaint. All are dismissed and denied in total with the exception to the objections to applying Pennsylvania’s Uniform Trade Secrets Act which was granted since the court had previously determined that the choice of law proviso in the teaming agreement required that California substantive law be applied.
(5) All of Gentex’s preliminary objections to Crew’s preliminary objections were rendered moot by the court’s decision of denial noted at paragraph 4 above. Their one remaining preliminary objection to the use of California substantive law is dismissed and denied for the reasons stated at paragraph 4 above.
(6) Crew is to answer Gentex’s amended complaint within twenty (20) days of the date of this order.
(7) Gentex is to answer Crew’s amended Counterclaim within twenty (20) days of the date of this order.

It is so ordered.


author: JOHNSON, J.

text:
    Progressive Direct Ins. Co. v. Gonzalez

      Karl L. Stefan, for plaintiff.

      Bradley Jay Reed, for defendants.
    March 8, 2011
   JOHNSON, J.

MEMORANDUM OPINION

Before the court for consideration is the plaintiff’s motion for summary judgment, filed on January 10, 2011, defendants’ response thereto, and defendants’ motion for summary judgment, filed on January 14, 2011. The court heard argument on February 28, 2011. For the following reasons, that plaintiff’s motion is granted and defendants’ motion is denied.

I. FACTUAL BACKGROUND

Progressive commenced this declaratory judgment action against defendants regarding the parties’ rights and obligations under Progressive’s Automobile Insurance Policy number 14538006-1 (“policy”). The policy insured defendant Tereza Cordero’s (“Cordero”) 2002 Saturn Sedan on the date relevant to this action, December 26, 2006, when Cordero was involved in a three-car accident in Berkeley County, West Virginia (“accident”). The policy included $100,000 in bodily injury liability coverage per accident, and $100,000 in underinsured motorist benefits per accident.

The accident injured five children riding in Cordero’s car: two were Cordero’s children; the other three were Michael Diaz, Rafael Diaz, and Joshua Diaz (“Diaz defendants”). As a result of the accident, numerous lawsuits commenced and personal injury claims were asserted on behalf of all the minor plaintiffs in Cordero’s vehicle. Named as defendants or additional defendants in those lawsuits and personal injury claims were Cordero and the drivers of the other two vehicles. An interpleader action was commenced and all three drivers’ insurance companies tendered their limits of bodily injury liability coverage into the court in order to satisfy the liability of the three drivers. Progressive tendered the $100,000 in motorist benefits promised in Cordero’s policy. The other drivers’ insurance companies tendered $40,000 and $100,000, for a total of $240,000 (“fund”). Thereafter, settlement was made among the five minor claimants, with the three Diaz defendants receiving a total of $196,000, or approximately 81.66%, of the fund.

Defendants then made a claim upon progressive for the $100,000 maximum underinsurance motorist benefits in the policy. In turn, Progressive offered $18,340. Progressive filed this action seeking a declaratory judgment that Progressive is only liable for $18,340, and both sides moved for summary judgment.

II. DISCUSSION

Summary judgment is appropriate when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Here, there is no genuine issue of material fact, because the parties agree that their only difference is in interpreting the language of the policy. Because the interpretation of an insurance policy is a question of law for the court, the court’s interpretation of the policy will entitle either plaintiff or defendant to judgment as a matter of law. See Adelman v. State Farm Mut. Auto. Ins. Co., 386 A.2d 535, 538 (Pa. Super. 1978). Therefore, it is appropriate for the court to grant Summary judgment on this issue.

The language to be interpreted is the setoff provision within the policy’s underinsured motorist coverage provisions, found on page 23 of the policy (“setoff’). The setoff states, in pertinent part:

The Limits of Liability under this Part III shall be reduced by all sums paid under Part I — liability to others.
Any payment made to a person under this Title III shall reduce any amount that the person is entitled to recover under Part I — Liability to others.

Both Progressive and the Diaz defendants appear to agree on the general purpose of the setoff: to prevent guest passengers from recovering money under the policy’s liability coverage and uninsured motorist coverage combined equaling more than the maximum amount recoverable under the policy’s liability coverage. This interpretation is consistent with Pennsylvania National Mutual Casualty Company v. Black, 591 Pa. 221, 916 A.2d 569 (Pa. 2007). In that case, a plaintiff passenger asserted that both drivers in a two-car accident were negligent, and moved for recovery of $100,000 liability coverage under a Penn National policy due to his driver’s negligence, and $100,000 of underinsured motorist coverage under the Penn National policy due to the other driver’s negligence. The relevant policy in that case had a set-off clause that stated, in pertinent part:

The limit of liability under this [Underinsured Motorists] coverage is reduced by any amount paid to the same person for the same accident under Part A [Liability Coverage] or Part C [Underinsured Motorist Coverage]. Id. at 572-573.

The Supreme Court agreed with the lower court’s ruling that the bodily injury coverage portion of the policy prohibited duplicate payments pursuant to the underinsured motorist coverage for the same element of loss. See Id.

Where plaintiff and defendants disagree is on the applicability of the setoff to any amount paid to the Diaz defendants. Plaintiff contends that, because Progressive committed $100,000 to the fund, and because 81.66% of the fund was paid to the Diaz defendants, Progressive has already paid the Diaz defendants $81,660 in liability coverage. Therefore, the setoff should be applied to reduce the policy’s maximum $100,000 payout for underinsured motorist benefits by $81,660, and Progressive would still owe the Diaz defendants $18,340.

Defendants contest this, although it is unclear whether defendants believe a) that the setoff is valid as written, but does not apply to the facts of this case, and therefore does not apply to any amount paid to the Diaz defendants, or b) the setoff applies, but that Progressive’s calculations should not be used. In their motion for summary judgment, defendants argue that Progressive’s stance that it has already paid $81,660 to the Diaz defendants is “not supported by any particular provision of the policy” and that “[wjithout the proportionate reduction calculation being including (sic) in the Policy it cannot be applied to the defendants.” At oral argument, defendants elaborated that, unlike Black, where there was one claimant, this case involved five claimants, three insurance policies, and an interpleader that created the $240,000 fund. Progressive did not write the setoff provision to account for this situation, defendants argued, and thus the amount Progressive has already paid the Diaz defendants is subject to multiple interpretations. For instance, if one assumes Progressive’s $100,000 liability coverage payout was first allotted to the Cordero claimants, who received $37,660 combined, Progressive would have only paid the Diaz defendants $62,340, and therefore would still owe the Diaz defendants $37,660. Defendants argued that, because Progressive wrote the policy, and could have included calculations for such circumstances, the ambiguities should be interpreted in a manner favoring the claimant.

No matter which way the court interprets defendants’ argument, it is contrary to the most logical interpretation of how the setoff applies and the fund was divided. Absent an agreement that specifically allotted money from certain insurance companies to. certain victims of the accident, the court assumes each insurance company paid each victim according to the percentage agreed upon at settlement. Therefore, the court assumes Progressive has already paid $81,660 to the Diaz defendants. The court can thus determine how much is still owed to the Diaz defendants by applying the logic of Black and setting-off that $81,660 sum against the maximum $100,000 recoverable under the liability coverage and uninsured motorist coverage in the policy. Thus, the court agrees with progressive that the Diaz defendants are owed $18,340 in underinsured motorist benefits.

III. CONCLUSION

For the foregoing reasons, the court concludes that the policy should be read to limit defendant’s underinsured motorist benefits claim to $18,340 in the instant case, therefore, it is hereby ordered that plaintiff’s motion is granted and defendants’ motion is denied.

ORDER

And now, March 8, 2011, upon consideration of plaintiff’s motion for summary judgment, filed on January 10, 2011, defendants’ response thereto, and defendants’ motion for summary judgment, filed on January 14,2011, and after argument thereon, it is hereby ordered, for the reasons set forth in the accompanying memorandum opinion, that plaintiff’s motion is granted and defendants’ motion is denied.