author: WORTHINGTON, J.,

text:
    Nationwide Mutual Insurance Co. v. Bogert

      C.P. of Monroe County,
    no. 2579 Civil 1999

      Lauren E. Dobrowalski, for plaintiff.

      Gerard J. Geiger, for defendant Bogert.

      John R. Vivian, for defendant McNeir.
    March 16, 2000
   WORTHINGTON, J.,

Plaintiff commenced the present action by filing an action for declaratory judgment, asking the court to order that it is not obligated to provide liability coverage to their insured, defendant Margaret Bogert, as a result of an accident occurring on March 20, 1997.

The material facts are not in dispute. Bogert met defendant Margaret McNeir through the Monroe County Older Workers’ Employment Services in October of 1995. This agency assists the elderly in finding employment. McNeir had posted a job listing for a “companion.” The agency informed McNeir of Bogert’s interest and the two women met. McNeir hired Bogert as a companion for an hourly wage of $6.

As part of her employment, Bogert performed general housework such as stripping the beds, cleaning, and putting away groceries. She also provided transportation for McNeir to visit, among others, her doctor, her therapist, and her hairdresser. Bogert’s hourly wage remained fixed at $6 whether providing housework or transporting McNeir to various locations. Bogert was not paid any additional fee for fuel or wear and tear of the vehicle. She filed amended tax returns for the years 1995 through 1997, classifying her employment position as “companion driver.”

On March 20, 1997, Bogert drove McNeir to a hardware store. While parking her vehicle in the store’s lot, Bogert crashed into the hardware store. Plaintiff, as Bogert’s insurer, investigated the surrounding circumstances of the accident and informed her that it was not obligated to provide liability coverage. Plaintiff cited the following clause from the insurance policy:

“Coverage Exclusions
“This coverage does not apply to:
“(2) any motor vehicle while used to carry persons or property for a fee. Motor vehicles used in a shared-expense car-pool are not considered as carrying persons for a fee.” See plaintiff’s motion for summary judgment, exhibit B, p. 8.

According to plaintiff, Bogert was “carrying persons for a fee” at the time of the accident and pursuant to this exclusion clause, it was not obligated to provide liability coverage.

Plaintiff filed a motion for summary judgment asking the court to issue an order declaring that it is not obligated to provide liability insurance to Bogert. Bogert filed a cross-motion for summary judgment asking the court to order plaintiff to provide liability coverage and defend all claims arising from the accident. After briefing and oral argument, the motions are now before this court for disposition.

Summary judgment, in whole or in part, is proper as a matter of law “(1) whenever there is no genuine issue of material fact as to a necessary element of the cause of action or defense which could be established by additional discovery or expert report.” Pa.R.C.P. 1035.2.

The court may consider pleadings, depositions, answers to interrogatories, admissions and supporting affidavits. Pa.R.C.P. 1035.1. The non-moving party may not rest upon the mere allegations or denials in the pleadings but must respond within 30 days after service of the motion. Pa.R.C.P. 1035.3(a). If a party does not respond, summary judgment may be entered against that party. Pa.R.C.P. 1035.3(d). The moving party bears the burden of demonstrating that a genuine issue of material fact exists and that he is entitled to judgment as a matter of law. First Wisconsin Trust Co. v. Strausser, 439 Pa. Super. 192, 198, 653 A.2d 688, 691 (1995). The record must be viewed in the light most favorable to the non-moving party and any doubts as to the existence of a genuine issue of material fact must be resolved against the moving party. Ertel v. Patriot-News Co., 544 Pa. 93, 98, 674 A.2d 1038, 1041 (1996); Dublin by Dublin v. Shuster, 410 Pa. Super. 1, 598 A.2d 1296 (1991). Summary judgment can only be granted when the right to judgment is clear and free from doubt. Marks v. Tasman, 527 Pa. 132, 589 A.2d 205 (1991).

With these standards in mind, the court finds that there are no genuine issues of material fact and therefore it is proper for the court to rule upon the plaintiff’s and Bogert’s summary judgment motions. The issue in this case is whether plaintiff is required to provide liability coverage to Bogert as a result of the accident. The starting point in our analysis is Bogert’s insurance policy on the vehicle. Insurance contracts are considered contracts of adhesion and therefore any ambiguities must be resolved in favor of the insured. Mohn v. American Casualty Co., 458 Pa. 576, 326 A.2d 346 (1974). When an insurance company relies on a policy exclusion as the basis for its denial of coverage and refusal to defend, as the plaintiff has in this matter, “the insurer has asserted an affirmative defense and, accordingly, bears the burden of proving such defense.” Madison Construction Company v. Harleysville Mutual Insurance Company, 557 Pa. 595, 605, 735 A.2d 100, 106 (1999) (citing Erie Insurance Exchange v. Transamerica Insurance Co., 516 Pa. 574, 580, 533 A.2d 1363, 1366 (1987)). The court generally performs the task of interpreting an insurance contract. Madison, 557 Pa. at 606, 735 A.2d at 106. The Supreme Court in Madison quoted Gene and Harvey Builders v. Pennsylvania Manufacturers’ Association, 512 Pa. 420, 426, 517 A.2d 910, 913 (1986), in saying: of the agreement. Where, however, the language of the contract is clear and unambiguous, a court is required to give effect to that language.” Madison, 557 Pa. at 606, 735 A.2d at 106; see also, Bateman v. Motorists Mutual Insurance Co., 527 Pa. 241, 245, 590 A.2d 281, 283 (1991).

“The goal of that task is, of course, to ascertain the intent of the parties as manifested by the language of the written instrument. Where a provision of a policy is ambiguous, the policy provision is to be construed in favor of the insured and against the insurer, the drafter

The ambiguity of a contractual term is not tested in a vacuum, but against a particular set of facts. Madison, 557 Pa. at 606, 735 A.2d at 106. The term is deemed ambiguous if it is subject to more than one reasonable interpretation. Id. However, the court will not distort or strain the meaning of language in order to find an ambiguity. Steuart v. McChesney, 498 Pa. 45, 51, 444 A.2d 659, 663 (1982).

In Aetna Casualty & Surety Company v. Davis, 418 Pa. Super. 284, 614 A.2d 273 (1992), the Superior Court addressed similar language in an insurance contract exclusion clause. It stated “that the case law in this jurisdiction is sparse and vintaged on the enforceability of a ‘carrying for a fee’ exclusion in an insurance contract.” Davis, 418 Pa. Super. at 290, 614 A.2d at 276. The Superior Court stated that although case law is limited, it was able to set forth several determinative factors on which to base our opinion. Id. Those factors are: whether the prohibited activity is habitual or exceptional, see Rykill v. Franklin Fire Insurance Co., 80 Pa. Super. 492, 495 (1923); the relation between the “cost of carrying” to the actual amount of money received, see Gross v. Kubel, 315 Pa. 396, 172 A.2d 649 (1934); the relationship between the two parties, see Orcutt v. Erie Indemnity Co., 114 Pa. Super. 493, 174 A.2d 625 (1934); the circumstances surrounding the transaction, Davis, 418 Pa. Super. at 295, 614 A.2d at 279 (quoting Myers v. Ocean Accident & Guarantee Corp., 99 F.2d 485, 489 (4th Cir. 1938)); the existence or lack of common interest, id.; and the pleasure or benefit in making the journey. Id.

In Rykill v. Franklin Fire Insurance Co., 80 Pa. Super. 492, 495 (1923), the court upheld a similar provision, stating that an insurance company has the privilege to decline entering into a contract unless the insured agreed the car would not be used to carry passengers for a fee. In that case, it had been proven that the insured had on prior occasions used his vehicle to carry passengers for a fee. Id. The Superior Court stated that it was common knowledge that the premium rate for vehicles used for commercial purposes was higher and that the rate charged by the insurance company was based on the terms in the contract. Finding that the prohibited activity was habitual rather than exceptional, the Superior Court held that the insurance company could disclaim coverage based on the exclusion clause. Id.

The present matter is dissimilar from Rykill in that Bogert did not transport multiple passengers for a fee. Id. The only people in the vehicle were the insured as the driver and McNeir. In addition, defendant Bogert’s employment was not that of a taxi driver, as it appears the insured was in Rykill, but as a companion to McNeir. Id. Any driving done while employed by Bogert was solely incidental to her employment as a companion.

In Gross v. Kubel, 315 Pa. 396, 399, 172 A.2d 649, 650 (1934), the insured was transporting four school basketball team members and an additional passenger pursuant to an agreement with the team’s school. In return for transporting team members, the insured was paid a sum equivalent to either the price of bus fare for the team members or the cost of oil, gas and an additional sum for the vehicle use. Id. The Supreme Court refused to hold the insurance company hable. It found that since the insured received a sum above and beyond the costs of transporting the team members (i.e., gas and oil), the insured’s acts fall squarely within the exclusion clause. Id.

In the case before the court, Bogert was not paid a fee per trip. Bogert was paid the same hourly wage whether she performed housework or transported McNeir. She was not paid any additional money for gas or oil expended, nor was she paid for the use of her vehicle. The Supreme Court in Gross said that if the school had only paid for gas and oil, “a serious question might have arisen as to whether such a payment would have constituted a carrying for hire.” Gross, 315 Pa. at 399-400, 172 A.2d at 650. In this case, the cost of transporting McNeir was never calculated separately from the standard hourly wage. In her deposition, Bogert stated that the amount of driving in relation to housework varied on a weekly basis and therefore her wage was independent of the activity performed. Deposition of Margaret Bogert, pp. 15, 16.

In Davis, 418 Pa. Super. at 286, 614 A.2d at 274, Clarence Cohen had purchased a new truck when he was asked by a friend to transport a refrigerator. Cohen’s friend said he might receive some money once they arrived at their destination. Cohen stated he only expected to be reimbursed for his expenses. Id. While Cohen was transporting the refrigerator, an incident occurred in which a passenger, an acquaintance of Cohen’s friend, sustained injuries. Id. The Superior Court stated that.the insurance company must provide liability coverage. Davis, 418 Pa. Super. at 296, 614 A.2d at 279. In arriving at their conclusion, the Superior Court adopted the reasoning in Myers v. Ocean Accident and Guarantee Corp., 99 F.2d 485, 489 (4th Cir. 1938), quoting:

“In making the distinction [whether a person has carried a passenger for a fee] the courts take into consideration not alone the bare transaction but all its surrounding circumstances, including among other things, the status and relations of the parties one to another, the existence or lack of common interest, pleasure or benefit in the making of the journey, and the relation of the amount of money to the actual costs of carrying.” Davis, 418 Pa. Super. at 295, 614 A.2d at 278.

The Superior Court found that Cohen’s assistance was based on friendship and not any financial gain. Id. In fact, Cohen had agreed to assist his friend with no guarantee that he would be reimbursed for his expenses in transporting the refrigerator. Id.

The present matter is similar to Davis in that Bogert transported McNeir without any expectation of being compensated for any expenses relating to her vehicle other than her standard hourly wage. Bogert was employed as a companion, which meant that she was not merely performing services for McNeir. These two elderly defendants spent several hours together each week for two and a half years. Bogert learned of the employment position through an agency that assists the elderly in finding work. It is reasonable to believe that the defendants were more than mere employer/employee. Bogert performed both housework and transportation, without any reference to a specific fee for driving Mc-Neir. Bogert only worked on a part-time basis and has said that she used her wages as “pin money.” Deposition of Margaret Bogert, p. 16.

After reviewing all relevant case law, the court finds that the language in the exclusion clause is ambiguous as applied to the specific facts in this case and therefore does not apply.

Accordingly, we enter the following order:

ORDER

And now, March 16,2000, plaintiff’s motion for summary judgment is denied. Defendant Margaret Bogert’s motion for summary judgment is granted. Plaintiff is directed to provide coverage under Margaret Bogert’s policy of insurance and to defend all claims arising from the car accident on March 20, 1997.

      . The insured had procured a “jitney license” which permitted him to carry passengers for hire, essentially using his vehicle as a present day taxi. The insured filed three car accident claims, two of which occurred after he had received the jitney license. Rykill v. Franklin Fire Insurance Co., 80 Pa. Super. at 495.


source: Caselaw Access Project

author: LOWE, S.J.,

license: Public Domain

text:
    Unisys Corporation v. Entex Information Services Inc.

      C.P. of Montgomery County,
    no. 99-10694.

      Joseph J. Costello and William H. Bradbury III, for plaintiff.

      Marjorie E. Greenfield and Jean L. Schmitt, for defendant.

      February 3, 2000
   LOWE, S.J.,

Peter N. Van Zant was the managing principal of plaintiff Unisys Corporation’s network and desktop consulting practice for the United States and Canada. In connection with the grant of stock options to him, Mr. Van Zant signed an agreement that provided:

“5.1 For 12 months after leaving Unisys, optionee will not: (a) directly or indirectly solicit or attempt to influence any employee of Unisys to terminate his or her employment with Unisys . .. .” (Exhibit P-2.)

He also entered into an agreement protecting the confidentiality of Unisys Corporation’s proprietary information. (Exhibit P-1.)

In December 1998, Mr. Van Zant was contacted by a recruiter who raised the possibility of his working for defendant Entex Information Services Inc., a competitor of Unisys Corporation’s network and desktop consulting practice. He revised his resume, emphasizing his recruiting skills by referring to them multiple times. (Exhibit P-3.)

Prior to the hiring, Entex’ senior vice president in charge of the consulting practice, Richard Nathanson, asked Mr. Van Zant whether he had any noncompetition agreements, and was informed of the prohibitions against competing and recruiting Unisys employees. Copies of the agreements were given to Mr. Nathanson. Although Mr. Van Zant, Mr. Nathanson, and Entex’ other witnesses testified that they scrupulously abided by those agreements, what they did was conform their testimony to an unreasonably narrow reading of the terms of the agreements. Entex, through Mr. Van Zant and its other employees, engaged in blatant efforts to recruit Unisys employees.

When Mr. Van Zant left Unisys, he sent an e-mail message to everyone under his supervision at the network and desktop constructing practice stating, in part:

“I will, over the course of the next several days, be selecting one of several job offers, each of which will afford me a financial opportunity which cannot be found at Unisys.
“I will remember fondly our time together and hope that out paths will cross again. Please stay in touch.” (Plaintiff’s exhibit 7.)

Mr. Van Zant was familiar with the skills of the employees under his supervision and the projects on which they worked. During the course of his employment, he regularly copied Unisys documents, including confidential documents, from the laptop computer Unisys supplied, to his home computer. These files were not returned when he left Unisys.

Thereafter, Mr. Van Zant solicited, and Entex hired, David Goldstein, Michael Sisson, Daniel Senkiewicz, Ervin Kollek, Don Vanderzel, Peggy Byrnes, Doug Pugh, Trey Sunderland, David Hamersley, Michael Ramirez, Giovanni Roa, Michael Nozaki and Jann Henderson. Of those employees, Mr. Goldstein, Mr. Kollek, Mr. Senkiewicz and Mr. Sunderland were also parties to agreements with Unisys prohibiting them from soliciting or attempting to influence employees of Unisys from leaving their employment. All had confidentiality agreements with Unisys.

While this recruiting was claimed by Entex to conform to the letter of the agreements, we found that Entex, and its agent Peter Van Zant, engaged in conduct that violated his agreement with Unisys. In addition to the solicitation in his departing e-mail, Mr. Van Zant invited former colleagues to “social” engagements at which he spoke about the opportunities at Entex. He then received communications from those persons which were written as if these meetings had not occurred. In accordance with the recruiting plan, Mr. Van Zant forwarded those communications to recruiting personnel at Entex.

Entex offered the testimony of several former Unisys employees who claimed that their departure from Unisys was based on their own dissatisfaction, and not solicitation by Mr. Van Zant. This testimony also conformed to Entex’ unreasonably narrow reading of the agreements. We did not find it credible.

Following transcription of the notes of testimony of hearings held on September 13 and 14,1999, the parties submitted proposed findings of fact and conclusions of law and briefs. On November 16, 1999, we issued the preliminary injunction appealed from, prohibiting Entex from inducing, encouraging or permitting Mr. Van Zant, Mr. Goldstein, Mr. Kollek, Mr. Senkiewicz and Mr. Sutherland from soliciting Entex employees, and enjoined those and the other former Unisys employees from the disclosure of confidential information. We also ordered Entex to return any Unisys confidential information to Unisys. We directed Entex to require Messrs. Van Zant, Goldstein, Kollek, Senkiewicz and Sutherland to respond in a specific way to any inquiries from Unisys employees for a period of 12 months from the date each respective individual left employment. We conditioned that preliminary injunction on the posting of a bond in the amount of $20,000. That bond was posted on November 18, 1999. On December 17, 1999, Entex filed this appeal.

Entex’ concise statement of matters complained of on appeal asserts that the evidence was insufficient to support the issuance of a preliminary injunction, based on an alleged failure to establish each of the required elements. Entex also claims that the injunction was over-broad and not supported by the evidence. Entex asserts that the injunction covered individuals Unisys conceded it had no evidence of violation of their agreements. Entex asserts that we erred by precluding the testimony of three of its employees formerly employed by Unisys, and that we erred by precluding an Entex employee from testifying about statements made to her by former Unisys employees.

A preliminary injunction may be issued when the court finds that the activity to be restrained is actionable, is reasonably subject to abatement by the issuance of an injunction, an injunction is necessary to prevent immediate and irreparable harm which cannot be compensated by damages, greater injury would result by refusing the injunction than by granting it, and if it properly restores the parties to their status as it existed immediately prior to the alleged wrongful conduct. West Penn Specialty MSO Inc. v. Nolan, 737 A.2d 295 (Pa. Super. 1999). An appellate court’s review of an order granting a preliminary injunction is limited. The court is bound by the chancellor’s findings of fact, and is limited to determining whether the record demonstrates any reasonable grounds for the trial court’s action. The decision may be reversed only if the record reveals that no grounds existed to support the decree, or that the rule of law upon which the court relied was palpably erroneous or misapplied. West Penn Specialty MSO Inc. v. Nolan, 737 A.2d at 298.

While Unisys chose not to sue Mr. Van Zant or its other former employees, that does not preclude it from bringing an action against and seeking injunctive relief from Entex on the theory of interference with contractual relations. That cause of action exists against a person who intentionally and improperly interferes with the performance of a contract between another and a third party by inducing or otherwise causing the third party not to perform that contract. Adler, Barish, Daniels, Levin and Creskoff v. Epstein, 482 Pa. 416, 431, 393 A.2d 1175, 1183 (1978), cert. denied, 442 U.S. 907 (1979). In appropriate circumstances, injunctive relief is a proper remedy for an intentional interference with contractual relations. Id. at 436 n.21, 393 A.2d at 1185 n.21.

Irreparable harm may be established by the disruptive effect of the breach of a covenant in an employment agreement. Irreparable harm can arise because damage cannot be estimated by an accurate pecuniary standard. Injunctive relief is also appropriate because the breach of a covenant establishes an unbridled threat of the continuation of its violation. West Penn Specialty MSO Inc. v. Nolan, 737 A.2d 295. Even when no contractual relation exists, a new employer may be liable to the old for inducing a breach of future contractual relations by causing an employee to commit wrongs against a former employer. SHV Coal Inc. v. Continental Grain Co., 376 Pa. Super. 241, 251, 545 A.2d 917, 922 (1988), rev’d on other grounds, 526 Pa. 489, 587 A.2d 702 (1991).

The evidence in this case established an actionable interference with Unisys’ contracts between its former employees prohibiting solicitation and disclosure of confidential information. Unisys proved improper means, improper purposes, and consciousness of that impropriety by having the former Unisys employees send communications that suggested no solicitation occurred. Unisys offered evidence of the efforts it has made to compensate for the loss of the employees who were solicited improperly. It could not quantify that loss in dollar amounts. If the injunction we entered had not been granted, Entex would get away with causing the former Unisys employees to violate their agreements, and Unisys would suffer irreparable harm. The injunction restored the parties to their status as it existed before the violation, with operative contracts prohibiting solicitation and disclosure of confidential information.

We assume that Entex’ complaint about overbreadth of the injunction relates to our inclusion of employees who were not proved to have engaged in improper conduct. We found that the conduct of Entex with respect to Mr. Van Zant, which showed a complete disregard for the nonsolicitation and confidentiality agreements, and the institution of procedures designed to cover that up, give ample reason to believe that Entex, if not enjoined, would seek to induce the breach of the contracts those other employees had with Unisys. Our injunction was supported by the evidence and tailored to deal with the proven violations.

The remaining matters complained of by Entex relate to the preclusion of evidence. One involved the testimony of Lisa Carr. The evidence offered and our ruling appear an pages 290-91 of the transcript of September 14, 1999. Counsel for Entex asked Ms. Carr to relate conversations with several former employees of Unisys about their situation at Unisys. Counsel for Unisys objected on the basis of hearsay. Counsel for Entex asserted that this evidence was relevant to the state of mind of Entex. We sustained the objection because the exception to the hearsay rule for evidence of intent and state of mind refers to the intent or state of mind of the declarant, not the state of mind of the witness. Pa.R.E. 803(3); Commonwealth v. Wright, 455 Pa. 480, 486, 317 A.2d 271, 274 (1974); Romeo v. Manuel, 703 A.2d 530, 533 (Pa. Super. 1997).

Finally, Entex asserts that we erred by precluding the testimony of its witnesses, Don Vanderzel, Trey Sunderland and Michael Ramirez. Those individuals were presented at the conclusion of the second day of hearing, when it was 4:30 p.m. We held court from 9:30 a.m. until that time, with an hour and 10 minute lunch, and were not in a position to hear more evidence that day. Counsel for Entex argued that the parties had agreed to divide their time, and that Unisys had taken more than half the time. There was no effort by Entex to limit the testimony from Unisys prior to the time it rested, nor was there a request made for an additional hearing date. No offer of proof was made. We suggested that the parties attempt to stipulate to what this testimony would be, but they did not. We assumed it would be similar to the testimony of the other former Unisys employees. It is within the discretion of the trial court to preclude cumulative evidence. Pa.R.E. 403; Gustison v. Ted Smith Floor Products Inc., 451 Pa. Super. 442, 458, 679 A.2d 1304, 1313 (1996); Soda v. Baird, 411 Pa. Super. 80, 87-88, 600 A.2d 1274, 1278 (1991), allocatur denied, 532 Pa. 665, 616 A.2d 986 (1992).


author: JAMES JR., J.,

text:
    Loduca v. Zoning Hearing Board of the Borough of Danville
    C.P. of Montour County,
    no. 591 of 1998.

      W. Kim Hill, for appellant.

      J. David Smith, for appellee.

      February 23, 2000
   JAMES JR., J.,

This matter is before the court on an appeal by Matteo Loduca, appellant, from a decision of the Zoning Hearing Board of the Borough of Danville, appellee. On March 27, 1998, appellant purchased real estate at 100 Mill St., Danville, Montour County, Pennsylvania. The seller, United Petroleum, had operated a Citgo gas station, a permitted use, on the premises. Although appellant testified at the hearing that he had continued to pump gas on the premises until the end of April 1998, the board found that the use as a Citgo station ended on March 27, 1998.

Appellant removed the gas tanks from the lot in the summer of 1998. His uncontradicted intention was to transform the property into another permitted use. Originally, he wanted to use the property for a small hotel, but he could not get it licensed. Appellant then intended to transform the property into a deli-restaurant which he would lease to a third party or operate himself.

When appellant purchased the property, there was a free-standing sign advertising Citgo gas. This sign was admittedly a nonconforming sign under the ordinance. This district was zoned C-2 (central business district). Only much smaller free-standing signs are permitted in this district. Danville Zoning Ordinance §139-34E5(h).

By letter dated September 11,1998, borough informed appellant that the free-standing sign was in violation of the ordinance and its removal was requested. Appellant mistakenly requested a variance before the board and was denied. Upon appeal to this court, it was agreed that the matter should be reheard on the issue of whether the nonconforming sign had been abandoned under the ordinance and the law. The board found that the use of the nonconforming sign had been discontinued for in excess of six months and that under the ordinance, the sign was abandoned. This appeal followed.

Our scope of review in zoning cases, where a record has been made before the board and where no additional evidence was presented before us, is limited to determining whether the board committed an abuse of discretion or an error of law. Valley View Civic Association v. Zoning Board of Adjustment, 501 Pa. 550, 554-55, 462 A.2d 637, 639-40 (1983).

There needs to be a two-step analysis of the underlying abandonment issue. First, we must determine whether “sign” means the free-standing standard itself or the words in the advertising area of the free-standing standard. “Decisions in cases dealing with the effect of the cessation or discontinuance of a nonconforming use naturally turn on the language of the particular ordinance or statute under consideration.” Marchese v. Norristown Borough Zoning Board of Adjustment, 2 Pa. Commw. 84, 95, 277 A.2d 176, 183 (1971).

The ordinance defines a sign as “a structure, device, light or natural object (including the ground itself or any device attached thereto or painted or represented thereon) which shall be used to identify, advertise, or attract attention to any object, product, place, activity, person, institution, organization, firm, group, commodity, profession, enterprise, industry, or business or which shall display or include any letter, word, model, number, banner, flag, pennant, insignia, device or representation used as an announcement, direction or advertisement. For the purpose of this chapter, the word ‘sign’ shall include all signs which can be seen or are intended to be seen from any public right-of-way either on or off the premises. No interior sign shall be required to conform to these regulations.” Danville Zoning Ordinance §139-7.

A free-standing sign is defined as “a sign supported by one or more uprights, poles, posts, or braces placed in or upon the ground in a fixed location and not attached to any building or structure.” Dánville Zoning Ordinance §139-7.

Section 139-7 defines “sign, abandoned” as “a sign erected on and/or related to the use of a property which becomes vacant and unoccupied for a period of six months or more or any sign which no longer advertises a bona fide business conducted or product sold on the premises or which relates to a time, event or purpose.”

Clearly, the definition of “sign, abandoned” envisions a change of wording on a sign as long as a “bona fide business” is conducted or product is sold on the premises. The board found that “the actions of Matteo Loduca after March 27,1998, evidence intent to discontinue the operation of a Citgo gasoline station on the property, and evidence intent to discontinue the use of the existing freestanding sign.” Several cases have wrestled with the definition of “sign” in analyzing abandonment cases. See In re Appeal of Autohaus Lancaster Inc., 4 D.&C.4th 69 (Lancaster 1989); Stockburger v. Newtown Borough Board of Adjustment, 27 D.&C.2d 633 (Bucks 1962). However, the analysis must start with the ordinance in question. Marchese, supra at 95, 277 A.2d at 183.

In our case, it is the size, type, and location of the sign that is being regulated, not the wording on the sign. The definition of “sign, abandoned” envisions a change in wording as long as there is a bona fide business existing or product being sold. It is the free-standing nature of the sign structure or device that is being regulated.

Thus, the second part of the analysis in this case is to determine whether the free-standing sign structure or device has been abandoned.

In abandonment of nonconforming use cases, the burden of proving abandonment is on the party so asserting, here the appellee. Smith v. Board of Zoning Appeals of the City of Scranton, 74 Pa. Commw. 405, 410, 459 A.2d 1350, 1353 (1983). The courts have recognized that nonconforming uses are not favorites in the law, but that property owners have a constitutional right to continue a nonconforming use until the municipality meets its burden of proving that it has been abandoned. Baird v. Zoning Board of Adjustment of Slippery Rock Borough, 20 Pa. Commw. 236, 244, 340 A.2d 904, 908 (1975).

The operative part of the ordinance in this case is section 139-34E7(d)(3) which states that “nonconforming signs or sign locations which are discontinued or not used for a period of at least six months shall be deemed abandoned and the use of the nonconforming sign shall terminate.” When an ordinance permits existing nonconforming uses in a district until “discontinued,” the word “discontinued” is to be taken as the equivalent of “abandoned.” Marchese, supra at 95, 277 A.2d at 182-83.

“As distinguished from mere discontinuance, the concept of the term ‘abandonment’ includes the intention to abandon. Consequently, the abandonment of a nonconforming use and the consequent termination of any legal right thereto results from a concurrence of facts, circumstances, and the intention of the owner of the premises or other person entitled to the use. Intention with respect to the abandonment of a nonconforming use is to be ascertained from the overt acts, or failure to act, as well as statements.” Id. at 95, 277 A.2d at 183. Where there is a time limit on the right to resume the nonconforming use, the intention to surrender the right is presumed from the expiration of the designated time period, six months in our case. “Although because of this presumption it becomes unnecessary to prove the intent to abandon after cessation of one year [six months in our case], it is still necessary to show the concurrent overt acts or failure to act which indicate abandonment.” Id. at 96, 277 A.2d at 183. (footnote omitted)

In our case, the appellee has clearly failed to prove abandonment of the sign. First, the letter of violation was sent to the appellant less than six months after the gas station was sold to appellant, which is the earliest time on record for possible abandonment. Thus, on its face, the ordinance does not permit a finding of abandonment.

Second, the board based its decision on the new owner changing the use of the property from a gas station to another permitted business, thus indicating an intent to abandon the free-standing sign. “The right to continue a nonconforming use, once established and not abandoned, runs with the land and this right is not confined to any one individual or corporation.” Id. at 98, 277 A.2d at 184. See also, Clanton v. London Grove Township Zoning Hearing Board, 743 A.2d 995, 997 (Pa. Commw. 1999); Rayel v. Bridgeton Township Zoning Hearing Board, 98 Pa. Commw. 455, 511 A.2d 933 (1986). Appellant has a right to continue to use the free-standing sign unless and until he abandons the use.

Finally, the borough had to prove concurrent overt acts or failure to act or statements which indicate abandonment. The only acts or failure to act which the borough proved was that appellant was not going to use the property as a gas station. The borough did not provide any facts to indicate abandonment of the free-standing sign. Even though the burden of proving abandonment is on the borough, the owner in his turn may demonstrate that the facts and circumstances support the conclusion that the nonconforming use of the sign was not abandoned. Marchese, supra at 98-99, 277 A.2d at 184. Appellant clearly indicated that he was intending to continue a commercial establishment on the property and that the freestanding sign was a crucial part of his plans. The appellee did not dispute this.

“The question of abandonment, being a question of fact, depends on a weighing of all the various factors present in an individual case.” Hilltown Township v. Horn, 13 Pa. Commw. 248, 252, 320 A.2d 153, 155 (1974). The appellee has not carried its burden of proving that the use of the nonconforming free-standing sign has been abandoned. The decision of the board was not supported by substantial evidence. See 53 P.S. §11005-A. The board made an error of law in determining that the free-standing sign has been abandoned.

ORDER

And now, February 23, 2000, the decree of the Zoning Hearing Board of the Borough of Danville is reversed.


author: BLACK, J.,

text:
    Dragovits v. Lehr

      C.P. of Lehigh County,
    no. 99-C-0342.

      Irving L. Abramson, for plaintiff.

      Steven M. Liero, for defendants.
    March 28, 2000
   BLACK, J.,

Before the court is plaintiff’s motion in limine to suppress all references to alcohol or drug use on the part of plaintiff in the upcoming trial of his personal injury case against defendants. Defendants contend that evidence of plaintiff’s blood alcohol content is relevant to their claim that plaintiff was contributorily negligent. However, in the circumstances here presented, we conclude that such evidence is inadmissible under Pennsylvania Rule of Evidence 403. Whatever limited probative value such evidence may have is clearly outweighed by the danger of unfair prejudice and confusion of the issues.

This case involves an early morning automobile accident in which plaintiff was walking or running across a two-lane city street, either within or outside the crosswalk, when he either ran into or was struck by an automobile operated by defendant Lucille Lehr. There were no witnesses to the accident other than the parties themselves, and apparently neither party saw the other until an instant before the impact. Each side contends that the accident was caused solely by negligence on the part of the other.

In support of their position, defendants propose to introduce expert opinion testimony from John Brick Ph.D., that as a result of plaintiff’s alcohol consumption “[a]t the time he walked or ran across the street, his ability to perform highly complex tasks was impaired even though his blood alcohol level was low.” According to Dr. Brick:

“One of the most pronounced effects of alcohol is on divided attention tasks, in which the person must divide their [sic] attention between different activities, i.e., ‘multi-tasking.’
“With regard to pedestrian activity, the person must divide their [sic] attention between many different tasks.
“Consistent with divided attention failure produced by alcohol, Mr. Dragovits failed to attend to, make estimates of, and respond appropriately to an oncoming vehide when he entered the roadway.” See motion in limine to suppress all reference to alcohol or drug use by the plaintiff, exhibit A, expert report of John Brick Ph.D., pp. 2-3.

Dr. Brick’s report does not refer to any testimonial evidence that plaintiff had consumed an excessive amount of alcohol or that he showed any physical signs of impairment such as staggering or slurring of speech around the time of the accident. His opinion is based primarily on the police report and hospital records. The police report indicates that plaintiff had an odor of alcohol on his breath when the investigating officer arrived at 6:44 o’clock a.m., very shortly after the accident. The hospital records indicate that 40 minutes after the accident, plaintiff had a BAC of .02-.028 percent. Dr. Brick extrapolates from this data that plaintiff’s BAC was approximately .03-.04 percent at the time of the accident. Based on this conclusion, Dr. Brick disputes plaintiff’s deposition testimony that he consumed only two beers the previous evening; instead Dr. Brick opines that plaintiff more likely consumed six or seven beers during the course of that evening.

In response to Dr. Brick’s expert report, plaintiff has secured an expert report from Stanley J. Broskey Ph.D., in which Dr. Broskey opines that Dr. Brick was without sufficient information (such as the plaintiff’s tolerance for alcohol) to be able to extrapolate plaintiff’s BAC at the time of the accident to a reasonable degree of certainty; and that even if the extrapolation were correct, there is no consensus within the scientific community that a .03-.04 percent BAC “would impair a tolerant individual.” See motion in limine to suppress all reference to alcohol or drug use by the plaintiff, exhibit B, expert report of Stanley J. Broskey Ph.D.

We need not reach the Frye issue suggested by Dr. Broskey’s report because we believe there is a more fundamental flaw in defendants’ proposed evidence. The relevant question for the fact-finder in this case is how plaintiff conducted himself when he attempted to cross the street, not how much he drank the night before. Unfortunately, once reference is made to plaintiff’s alcohol consumption, the fact-finder is likely to become distracted from the relevant question and to focus instead on the alcohol. For this reason, a court must exercise a high degree of caution in a trial of this nature before allowing any reference to the consumption of alcohol by one of the parties. Under Pennsylvania Rule of Evidence 403, we are required to weigh the probative value of the evidence proposed against the danger of unfair prejudice or confusion.

In this case, the proffered opinion of Dr. Brick that a BAC of .03-.04 percent would have impaired plaintiff’s ability “to perform highly complex tasks” at the time of the accident is of very limited probative value. In the real world, the act of crossing a two-lane street on foot cannot be considered a “highly complex” task. Therefore, the BAC evidence is of dubious relevance. On the other hand, any reference to plaintiff’s BAC could easily cause confusion and would be unfairly prejudicial to plaintiff. Consequently, evidence of plaintiff’s BAC is inadmissible under Pa.R.E. 403. Evidence that plaintiff had alcohol on his breath when the police arrived is also inadmissible for the same reason.

Defendants claim that section 3550 of the Pennsylvania Motor Vehicle Code, 75 Pa.C.S. §3550, and the case of Kriner v. McDonald, 223 Pa. Super. 531, 302 A.2d 392 (1973), provide support for their position. We disagree. Section 3550 provides:

“A pedestrian who is under the influence of alcohol or any controlled substance to a degree which renders the pedestrian a hazard shall not walk or be upon a highway except on a sidewalk.”

In Clinton v. Giles, 719 A.2d 314, 318 (Pa. Super. 1998), alloc. denied, 559 Pa. 662, 739 A.2d 163 (1999), the Superior Court recently rejected the defendant’s argument that section 3550 permitted use of expert medical testimony to establish pedestrian/plaintiff’s purported intoxication as a form of contributory negligence. The court held that unless there was corroborating evidence of intoxication, blood alcohol evidence in the form of a hospital laboratory report and expert medical testimony is not admissible to prove intoxication in a civil trial. The required corroborating evidence could be (a) testimony that the pedestrian had consumed copious amounts of alcohol or (b) testimony that at the time of the incident the pedestrian had exhibited physical signs of intoxication such as “staggering stumbling, aimless wandering or incoherent mumbling.” 719 A.2d at 318-19; see also, Whyte v. Robinson, 421 Pa. Super. 33, 40-43, 617 A.2d 380, 384 (1992).

In this case, defendants have not identified any corroborating evidence of intoxication. There is no direct evidence that plaintiff consumed large amounts of alcohol. The reference in the police report to an odor of aleohol on plaintiff’s breath does not prove copious drinking or intoxication; such an odor could have resulted from a single drink. Nor has any evidence been produced that plaintiff exhibited physical characteristics at the time of the accident that suggest impairment. By her own admission, defendant Lucille Lehr did not see plaintiff until a moment before the impact, and there were no witnesses other than the parties. Defendants’ assertion that plaintiff “darted” into the street cannot be considered evidence of intoxication; otherwise we have a classic instance of circular reasoning: plaintiff must have darted into the street; therefore, he must have been intoxicated; therefore, he must have darted into the street. Defendants’ expert witness report does not identify any testimonial evidence suggesting impairment; nor have defendants by means of affidavit or deposition presented any such evidence. Therefore, under Clinton v. Giles, supra, evidence of plaintiff’s BAC is not admissible to prove that he was under the influence of alcohol and hence contributorily negligent for violation of section 3550.

Defendants’ reliance on Kriner v. McDonald, supra, is also misplaced. In Kriner the Superior Court specifically warned against “allowing] the proceedings to ‘drift on a tide of alcoholic debate’ which obscures the issue of who was responsible for the accident.” Kriner, 223 Pa. Super. at 534, 302 A.2d at 394 (quoting Wentworth v. Doliner, 399 Pa. 356, 361, 160 A.2d 562, 565 (I960)). The Superior Court stated in Kriner:

“The evidence of intoxication did not prove that Kriner was unfit to be crossing the street at the time of the accident; therefore, the fact that he might have been drinking had absolutely no bearing on the issue of whether or not he was contributory negligent.” Kriner, 223 Pa. Super. at 534, 302 A.2d at 394.

The court further noted that reference should not be made to a pedestrian’s alcohol consumption unless there is sufficient evidence to show “intoxication or copious drinking.” Kriner, 223 Pa. Super. at 533-34, 302 A.2d at 394. In the instant case, defendants have presented no such evidence.

We note that section 1547(d) of the Pennsylvania Motor Vehicle Code, 75 Pa.C.S. § 1547(d), establishes three rules for using blood alcohol evidence where a person is charged with operating a motor vehicle while under the influence of alcohol: (1) a BAC level of .05 percent or less raises the presumption that the operator is not under the influence of alcohol; (2) a BAC level in excess of .05 percent but less than 0.10 percent does not give rise to presumption that a person was, or was not, under the influence of alcohol, but the level may be considered with other competent evidence in determining impairment; and (3) a BAC level of. 10 percent or greater may be admitted into evidence to establish a person’s impairment in operating a motor vehicle. The Superior Court has indicated that the presumptions of 75 Pa.C.S. §1547 do not apply to pedestrians; thus, we do not find that these standards are controlling in our decision. See Whyte v. Robinson, 421 Pa. Super. 33, 617 A.2d 380. However, it would be incongruous for a person with a BAC of less than .05 percent to be presumed capable of engaging in the complex act of operating a motor vehicle, but incapable of the far simpler act of crossing a street on foot. This is particularly true where, as in this case, defendants have presented no evidence that plaintiff manifested any of the physical signs of intoxication.

For these reasons, we believe any reference to plaintiff’s alcohol consumption in this case would cause unfair prejudice and confusion without adding any significant relevant information. Mindful of the Superior Court’s warning in Kriner, we will not permit the proceeding to “drift on a tide of alcoholic debate.” Accordingly, plaintiff’s motion in hmine to suppress all references to alcohol or drug use on the part of plaintiff must be granted.

ORDER

Now, March 28,2000, upon consideration of plaintiff’s motion in limine to suppress all references to drug or alcohol use by plaintiff, after review of the briefs submitted by the parties, and for the reasons set forth in the accompanying opinion, it is ordered that said motion be and the same hereby is granted. Defendants are precluded from making any reference at the trial of this case to alleged alcohol or drug use on the part of plaintiff.

      . Rule 403 provides: “Although relevant, evidence may be excluded if its probative value is outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence.”

      . Under Frye v. United States, 293 F. 1013 (App. D.C. Cir. 1923) as adopted by the Pennsylvania Supreme Court in Commonwealth v. Topa, 471 Pa. 223, 369 A.2d 1277 (1977), an expert opinion on a scientific issue is admissible only if the opinion or the methodology used is generally accepted in the relevant scientific community.


author: SCHAEFFER, S.J.,

text:
    Home Health Care Management Inc. v. Wilson School District

      C.P. of Berks County,
    no. 99-1686.

      James M. Lillis, for petitioner.

      Jon S. Malsnee, for respondent.
    February 17, 2000
   SCHAEFFER, S.J.,

Before the court is the issue of whether petitioner or the respondent has the burden of proof in a case involving a challenge to the assessment of business privilege taxes against the petitioner, Home Health Care Management Inc.

Respondent, the Wilson School District, determined that Home Health Care Management Inc. is liable for business privilege taxes pursuant to its business privilege tax resolution and regulations. Petitioner HHC contends that it is exempt from said tax because of its status as a charitable institution pursuant to the Institutions of Purely Public Charities Act of November 26, 1997, Act 55, 10 P.S. §371 et seq.

HHC is a not-for-profit corporation, qualified as an Internal Revenue Code section 501 C-3 charitable organization, organized for the purpose of providing administration and management services necessary and exclusively for the operation of other charitable health organizations.

On August 15, 1997, Wilson School District notified HHC that it would be arranging an audit for purposes of assessing tax liability.

On November 9, 1998, counsel for Wilson School District issued a “final decision” regarding the tax status of HHC. On November 21, 1998, Wilson School District mailed a document entitled “Business privilege tax audit results” to Ms. Lucille D. Gough, president and CEO of HHC.

On December 23,1998, a hearing was held where HHC explained its operations, its relationships with other health care organizations, and its status as a nonprofit corporation.

On January 20, 1999, counsel for the school district sent its determination, that HHC was taxable, to counsel for HHC.

On February 19, 1999, petitioner filed its petition for review of determination of Wilson School District pursuant to section 706 of the Pennsylvania Judicial Code. On March 17,1999, the court issued a rule to show cause on respondent.

On April 16, 1999, respondent answered the petition, claiming that HHC is a business and demanding that HHC prove its position that it operates exclusively for charitable purposes. A hearing was set for May 21,1999, but was continued by agreement because counsel for petitioner was on active duty with the Air National Guard in Kosovo.

Argument was held on September 30, 1999 on the issues of presumption of exemption and the burden of proof, and continued to November 24, 1999 to permit the parties time to submit stipulations of fact to narrow the issues. The parties were given an extension of time to brief the issues. Petitioner filed its prehearing memorandum on November 26,1999. Respondent did not file a brief.

The stipulation of facts filed by the parties is as follows:

(1) Home Health Care Management Inc. was incorporated in 1987 on a nonprofit, not-for-gain basis.

(2) HHC has an annual program revenue of less than $10,000,000 annually for tax years 1992, 1993, 1994, 1995,1996, 1997 and 1998.

(3) HHC is exempt from state taxes pursuant to §204(10) of the Tax Reform Code of 1971, 72 PS. §7204(10) by certificate issued by the Commonwealth of Pennsylvania on May 14, 1999.

(4) Berks Visiting Nurse Association and Berks Home Care were incorporated on a nonprofit, not-for-gain basis. Respondent does not challenge the exempt status from the school district’s privilege tax of either corporation.

(5) During years subject of the audit by Wilson School District, HHC has provided management services exclusively to BVNA and BHC pursuant to management agreements, and had received consideration limited to that portion of HHC’s costs for such services attributable to the provision of services to BVNA and BHC.

(6) HHC provides no services or other contributions to any private, for-profit, individuals or entities.

The parties also submitted to the court five sets of documents regarding the following entities: HHC, BVNA, Phoebe Care Connection, Berks Home Care and Visiting Nurse Association of Pottstown and vicinity.

In its prehearing memorandum, HHC alleges:

(1) HHC is not engaged in “business activity” and, therefore, any revenues or receipts are excluded from taxation;

(2) HHC is otherwise exempt from taxation pursuant to both the HUP test and the Institutions of Purely Public Charities Act of 1997;

(3) Pursuant to section 375(g) of the Institutions of Public Charities Act, HHC, BVNA, BHC, and VNAP may be considered as one entity for the purpose of establishing its compliance with the test for charitable exemption; and

(4) HHC is also exempt pursuant to the HUP Standards Act.

To determine who has the burden of going forward in this case, we look to Act 55. Act 55 provides for a presumption process, under section 376, and states, in pertinent part:

“(a) Presumption determination. — An institution of purely public charity possessing a valid exemption from the tax imposed by article II of the Act of March 4,1971 (P.L. 6, no. 2), known as the Tax Reform Code of 1971, shall be entitled to assert a rebuttable presumption regarding that institution’s compliance with the criteria set forth in section 5 as follows:
“(1) An institution of purely public charity that has annual program service revenue less than $10,000,000 shall be entitled to assert the presumption if the institution possesses a valid exemption under section 204(10) of the Tax Reform Code of 1971.
“(b) Burden of proof. — If an institution of purely public charity asserts a presumption under subsection (a), a political subdivision challenging that institution before a government agency or court shall bear the burden, by a preponderance of the evidence, of proving that the institution of purely public charity does not comply with the requirements of section 5.”

Under section 385, Applicability, subsection (c), Presumption, it states:

“No institution of purely public charity may assert a presumption pursuant to section 6 until that institution’s exemption under section 204(10) of the Tax Reform Code of 1971 is granted or renewed on or after the effective date of this section. 1997, Nov. 26, P.L. 508, no. 55, §15, imd. effective.”

HHC has an annual program service revenue of less than $10,000,000. Stipulation of facts, no. 2. HHC was granted an exemption under section 204(10) of the Tax Reform Code of 1971. It was dated May 14, 1999, and states that it was effective from June 6, 1998. Stipulation of facts, exhibit A, 2. HHC was granted an exemption under section 204(10) on or after November 26, 1997. Therefore, we find that HHC may assert the rebut-table presumption regarding HHC’s compliance with the criteria for a “purely public charity.”

The next inquiry is whether HHC can meet the criteria for a purely public charity under Act 55. A statute is generally applied prospectively. Sanders v. Loomis Armored Inc., 418 Pa. Super. 375, 379, 614 A.2d 320, 322 (1992), alloc. denied, 535 Pa. 661, 634 A.2d 224 (1993). “No statute shall be construed to be retroactive unless clearly and manifestly so intended by the General Assembly.” 1 Pa.C.S. §1926 (Supp. 1978-79). While the Statutory Construction Act makes no distinctions based on the type of statute, the Superior Court has distinguished between statutes affecting procedural matters and those altering substantive rights. Stroback v. Camaioni, 449 Pa. Super. 395, 400-401, 674 A.2d 257, 260 (1996), citing Misitis v. Steel City Piping Co., 441 Pa. 339, 272 A.2d 883 (1971). Only where no substantive right or contractual obligation is involved may a subsequently enacted statute be applied to a condition existing on its effective date where the condition results from events occurring prior to the effective date of that statute. Stroback, supra, 449 Pa. Super. at 400-401, 674 A.2d at 260. (citations omitted) The distinction between procedural and substantive matters can be elusive. “A newly enacted law may be applied retroactively if it impairs no contract and disturbs no vested right, but only varies remedies, cures defects in proceedings otherwise fair, and does not vary existing obligations contrary to their situation when originally undertaken.” Schroeder v. Schrader, 453 Pa. Super. 59, 65, 682 A.2d 1305, 1308 (1996). (citations omitted)

Initially, we must determine if the General Assembly clearly and manifestly intended for Act 55 to be applied retroactively. We first look to section 372, Legislative intent, for the resolution of this issue. It states, in pertinent part:

“(a) Findings. — The General Assembly finds and declares as follows:
“(1) It is in the best interest of this Commonwealth and its citizens that the recognition of tax-exempt status be accomplished in an orderly, uniform and economical manner.
“(4) Lack of specific legislative standards defining the term ‘institutions of purely public charity’ has led to increasing confusion and confrontation among traditionally tax-exempt institutions and political subdivisions to the detriment of the public.
“(5) There is increasing concern that the eligibility standards for charitable tax exemptions are being applied inconsistently, which may violate the uniformity provision of the Constitution of Pennsylvania.
“(b) Intent. — It is the intent of the General Assembly to eliminate inconsistent application of eligibility standards for charitable tax exemptions, reduce confusion and confrontation among traditionally tax-exempt institutions and political subdivisions and ensure that charitable and public funds are not necessarily diverted from the public good to litigate eligibility for tax-exempt status by providing standards to be applied uniformly in all proceedings throughout this Commonwealth for determining eligibility for exemption from state and local taxation which are consistent with traditional legislative and judicial applications of the constitutional term ‘institutions of purely public charity.’ ”

We find that the General Assembly clearly and manifestly intended for Act 55 to be applied retroactively.

Second, we look to the criteria for a “purely public charity” under Act 55 and prior to Act 55. Under Act 55, section 375, the entity must meet this criteria:

(b) Charitable purpose,

(c) Private profit motive,

(d) Community service,

(e) Charity to persons and

(f) Government service.

Prior to Act 55, the Pennsylvania Supreme Court, in Hospital Utilization Project v. Commonwealth, 507 Pa. 1, 487 A.2d 1306 (1985), set forth the following standards:

“(a) Advances a charitable purpose;
“(b) Donates or renders gratuitously a substantial portion of its services;
“(c) Benefits a substantial and indefinite class of persons who are legitimate subjects of charity;
“(d) Relieves the government of some of its burden; and
“(e) Operates entirely free from private profit motive.” Id. at 22, 487 A.2d at 1317.

We find the criteria in Act 55 consistent with judicial applications of the criteria outlined in HUP. Act 55 does not change the substance of what must be proven; it provides for uniformity and a shift of the burden of proof.

We find that applying the criteria in Act 55 impairs no contract and disturbs no vested rights. It only cures a defect in an otherwise fair proceeding, that is, the inconsistent application of the eligibility standards for charitable tax exemptions.

Therefore, we hold that HHC has a rebuttable presumption of exemption, and the Wilson School District shall bear the burden of proof, by a preponderance of the evidence, that HHC does not meet the requirements under Act 55 for a “purely public charity.”

Next, we must determine if HHC, BVNA, BHC and VNAP may be considered as one entity for the purpose of establishing its compliance with the test for charitable exemption. Section 375(g) of Act 55 provides:

“(f) Other nonprofit entities. — A nonprofit parent corporation, together with all of its subsidiary nonprofit corporations, may elect to be considered as a single institution in meeting the criteria set forth in this section as long as all of the following are met:
“(1) Each subsidiary:
“(i) is a nonstock corporation of which the nonprofit parent corporation is only a member; and “(ii) meets the requirements of this section.
“(2) The parent:
“(i) is a nonstock corporation;
“(ii) is qualified by the Internal Revenue Service as meeting the requirements of section 501(c)(3) of the Internal Revenue Code of 1986 (26 U.S.C. §501(c)(3));
“(iii) meets the requirements of subsection (b) and (c); and
“(iv) except for services that meet the requirements of this section, does not render services for a fee to an individual or entity that does not meet the requirements of paragraph (1).”

HHC is before the court on the issue of compliance with the requirements set forth in section 375. It is the parent corporation which may elect to be considered as a single institution in meeting the criteria in section 375. Therefore, HHC must be the parent corporation of the other entities in order to be entitled to the election.

Act 55 does not define a “parent corporation.” Black’s Law Dictionary defines a parent corporation as, “A corporation that has a controlling interest in another corporation (called a subsidiary corporation), usually through ownership of more than one-half the voting stock.” Black’s Law Dictionary 344 (7th ed. 1999).

Berks Visiting Nurse — -Home Health Agency was incorporated on June 9, 1916, and its name was changed to Berks Visiting Nurse Association Inc. on July 1, 1987. (Exhibit B, 4.) Berks Visiting Nurse Association Inc. was reorganized into three separate corporations on July 1, 1987. To effect the reorganization, BVNA created BHC and HHC. Under article VIII of the articles of incorporation of BVNA, entitled membership, it states that the sole member of the corporation shall be Home Health Care Management Inc., having the sole voting rights as the member of the corporation. (Exhibit B, 4, p. 4.)

Visiting Nurse Association of Pottstown and vicinity was incorporated on December 22,1944, and its articles of incorporation were amended on November 1, 1998. (Exhibit E, 5.) The sole member of the VNAP is HHC. (Exhibit E, 6, p. 2.)

Berks Home Care Inc. was incorporated on July 1, 1987. (Exhibit D, 3.) The sole member of BHC is HHC. (Exhibit D, 3, p. 3.)

After reviewing the aforementioned documents, we find that HHC is the parent corporation of BVNA, BHC and VNAP. Therefore, it can elect to be considered as a single institution with these entities for the purpose of meeting the criteria under Act 55 for a purely public charity.

Accordingly, we enter the following order:

ORDER

And now, February 17, 2000, it appearing that Home Health Care Management Inc. has filed a challenge to the determination of the Wilson School District that it is liable for business privilege taxes pursuant to Wilson School District’s business privilege tax resolution and regulations, it is hereby ordered and decreed that Home Health Care Management Inc. has a rebuttable presumption that it is a purely public charity, and the Wilson School District shall have the burden of proof to establish that Home Health Care Inc. does not meet the criteria for a purely public charity, as outlined in Act 55, 10 P.S. §375(b), (c), (d), (e) and (f).

It is further ordered that Home Health Care Management Inc., as the parent corporation, can elect to be considered as one entity with its subsidiary nonprofit corporations, under Act 55, section 375(g).

An evidentiary hearing in this matter shall be held on March 16, 2000, at 9:30 a.m. o’clock in the courtroom assigned to the undersigned.

      . No one has challenged the constitutionality of Act 55 in these proceedings, and we cannot properly challenge it sua sponte on constitutional grounds. Wiegand v. Wiegand, 461 Pa. 482, 337 A.2d 256 (1975); Commonwealth v. Boemer, 281 Pa. Super. 505, 422 A.2d 583 (1980). The Wilson School District failed to file its response to HHC’s prehearing memorandum; thus, we will apply the statute as written.


author: CHESLOCK, J.,

text:
    Robinson v. Kenyon

      C.P. of Monroe County,
    no. 6575 Civil 1999.

      Scott B. Bennett, for plaintiff.

      William A. Slotter, for defendant Pennsylvania State Police.

      Cynthia L. Nicholson, for defendant Greenwich.

      Edward W. Wertman, for defendants Spicer and Sneed & Associates.

      Benjamin A. Nicolosi and Stephen G. Bresset, for defendants Kenyon.

      Robert D. Silva and Mark I Perry, for defendants Reik, Albertson, Baddour and Ramsey.

      Daniel J. Divis, for defendant Borough of Moosic.
    February 14, 2000
   CHESLOCK, J.,

Plaintiffs commenced this action by filing a complaint on September 2, 1999. On September 27, 1999, defendants, Dr. Alan J. Kenyon and Bonnie J. Kenyon, filed preliminary objections to plaintiffs’ complaint, and on October 4, 1999, filed supplementary preliminary objections. On October 8, 1999, plaintiffs filed an amended complaint. Defendant, Greenwich Ophthalmology Associates P.C., filed preliminary objections to plaintiffs’ amended complaint on November 15, 1999 and a brief in support thereof on December 9, 1999. On December 12, 1999, plaintiffs responded to Greenwich’s preliminary objections. On January 3, 2000, this court entered an order granting defendant Greenwich’s preliminary objections, dismissing plaintiffs’ complaint against it.

On December 13, 1999, defendants, Pennsylvania State Police and Trooper Robert Tyler, filed preliminary objections in the nature of a demurrer to plaintiffs’ complaint and a brief in support thereof. Plaintiffs filed an answer and a contra-brief on February 1, 2000. Oral argument was heard before this court on February 1, 2000. We are now ready to dispose of PSP and Trooper Tyler’s preliminary objections.

Defendants’ preliminary objections are in the nature of a demurrer to the complaint. “[A] demurrer is a preliminary objection that the pleadings fail to set forth a cause of action upon which relief can be granted under any theory of law.” Sutton v. Miller, 405 Pa. Super. 213, 221, 592 A.2d 83, 87 (1991). (emphasis in original) It will not be sustained unless the law says with certainty that no recovery is possible. Hull v. Rose, Schmidt, Hasley & DiSalle P.C., 700 A.2d 996 (Pa. Super. 1997). All material facts set forth in the complaint, as well as inferences reasonably deducible therefrom, are admitted as true. Webb Manufacturing Co. v. Sinoff, 449 Pa. Super. 534, 674 A.2d 723 (1996). However, the court need not accept as true conclusions of law, unwarranted inferences from the facts, argumentative allegations, or expressions of opinion. Willet v. Pennsylvania Medical Catastrophe Loss Fund, 549 Pa. 613, 702 A.2d 850 (1997). In addition, a demurrer can only be granted in cases that are clear and free from doubt, and any doubt must be resolved against the non-moving party. Mellon Bank N.A. v. Fabinyi, 437 Pa. Super. 559, 650 A.2d 895 (1994).

Initially, we shall set forth the facts, which we must view as true, giving rise to plaintiffs’ complaint. On October 13,1997, at approximately 6:30 p.m., plaintiff, Walter Robinson, was operating his station wagon on Interstate 80 in Monroe County. Plaintiffs, Karen Robinson, Julie Robinson and Brian Beierle, Mr. Robinson’s wife and children, respectively, were passengers in the station wagon. The Robinson vehicle sustained a flat tire, so Walter Robinson pulled the vehicle onto the shoulder and proceeded to change the tire.

Defendant, Dr. Kenyon, was operating his Sonoma pickup truck on Route 380 at approximately the same time. While on patrol, Trooper Tyler received a report that Dr. Kenyon’s vehicle was traveling eastbound on Route 380 in an erratic manner, hitting the concrete barrier dividing the east- and westbound lanes. Trooper Tyler initiated a traffic stop of Dr. Kenyon’s vehicle. Trooper Tyler released Dr. Kenyon, permitting him to continue to operate his vehicle.

Dr. Kenyon then began traveling on Interstate 80. Subsequently, he lost control of his vehicle and crashed into the rear of the Robinson vehicle as Walter Robinson was placing the flat tire into his vehicle’s trunk. Walter Robinson was crushed between the two vehicles, suffering severe injuries. As a result, Walter Robinson’s right leg was amputated above the knee.

At the accident scene, Pennsylvania State Police Trooper Barletto interviewed Dr. Kenyon. In his report, he states that Dr. Kenyon appeared confused and his actions and words were very slow. As part of the investigation, Trooper Barletto interviewed defendant Bonnie Kenyon, Dr. Kenyon’s wife. Bonnie Kenyon stated that Dr. Kenyon suffers from dementia and described various traffic incidents Dr. Kenyon has had in the past.

Plaintiffs argue that PSP and Trooper Tyler were negligent due to Trooper Tyler’s failure to prevent Dr. Kenyon from operating his vehicle on the night of the accident. PSP and Trooper Tyler have raised the sovereign immunity defense. They argue that no special relationship between Trooper Tyler and plaintiffs exists creating a duty from Trooper Tyler to plaintiffs individually. Thus, plaintiffs have no common-law negligence action against either PSP or Trooper Tyler. Moreover, even if said common-law action exists, it does not fall within any sovereign immunity exception. Therefore, PSP and Trooper Tyler’s demurrer must be granted. Plaintiffs contend that the negligence causes of action against PSP and Trooper Tyler are grounded on section 324A of the Restatement (Second) of Torts and that Trooper Tyler’s actions fall within two exceptions to sovereign immunity. We will address each issue in turn.

In this matter, the controlling statute is 42 Pa.C.S. §8522, which states in pertinent part:

“Liability imposed. — The General Assembly, pursuant to Section 11 of Article 1 of the Constitution of Pennsylvania, does hereby waive, in the instances set forth in subsection (b) only,. . . sovereign immunity as a bar to an action against Commonwealth parties, for damages arising out of a negligent act where the damages would be recoverable under the common law or a statute creating a cause of action if the injury were caused by a person not having available the defense of sovereign immunity.” 42 Pa.C.S. §8522(a).

Subsection (b) sets forth nine situations under which the Commonwealth waives sovereign immunity. Thus, a plaintiff seeking to overcome a sovereign immunity defense must meet two distinct requirements. “First, the plaintiff must show that he possesses a common-law or statutory cause of action against a Commonwealth party, section 8522(a), 42 Pa.C.S. §8522(a), and second, he must demonstrate that the cause of action falls within one of the exceptions to sovereign immunity contained in section 8522(b), 42 Pa.C.S. §8522(b).” Norbert v. Pennsylvania State Police, 148 Pa. Commw. 505, 510, 611 A.2d 1353, 1355 (1992).

Plaintiffs seek to impose a duty of care owed by PSP and Trooper Tyler to plaintiffs by reference to section 324A of the Restatement (Second) of Torts, liability to third person for negligent performance of undertaking, which provides:

“One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of a third person or his things, is subject to liability to the third person for physical harm resulting from his failure to exercise reasonable care to protect his undertaking, if
“(a) his failure to exercise reasonable care increases the risk of such harm, or
“(b) he has undertaken to perform a duty owed by the other to third person —” Restatement (Second) of Torts §324A (1965).

Plaintiffs argue that Trooper Tyler violated section 324A(a) by failing to exercise reasonable care and prevent Dr. Kenyon from resuming operation of his vehicle, thereby increasing the risk of death or serious bodily injury to the plaintiffs. Plaintiffs also argue that Trooper Tyler violated section 324A(b). By stopping and assuming control over the Kenyon vehicle, Trooper Tyler, undertook to perform the same duty that Dr. Kenyon himself owed to plaintiffs, i.e., to prevent a driver whose dementia was exacerbated by fatigue from operating a motor vehicle on Commonwealth highways. We disagree.

Section 323 of the Restatement (Second) of Torts is almost identical to section 324A. The sole difference is that section 323 creates a direct duty to the person to whom the services are being rendered while section 324 creates a duty to third parties while services are being rendered to another. The Pennsylvania Supreme Court has held that section 323 does not apply to government because “government does not act either gratuitously or for consideration,... but [acts] pursuant to its required or discretionary duties in the process of governing.” Gardner v. Consolidated Rail Corp., 524 Pa. 445, 453-54, 573 A.2d 1016, 1020 (1990). Section 324A also requires one to act “gratuitously or for consideration.” Therefore, it logically follows that section 324A does not apply to government.

Furthermore, Pennsylvania law is clear that police only have a common duty to protect the public when carrying out their duties. Peak v. Petrovitch, 161 Pa. Commw. 261, 270, 636 A.2d 1248, 1252 (1994). “There is generally ‘no duty resting on a municipality or other governmental body to provide police protection to any particular person.’ ” Philadelphia v. Estate of Dennis, 161 Pa. Commw. 69, 73, 636 A.2d 240, 241-42 (1993). This general duty to the public only becomes a duty to an individual if a special relationship exists different from that of the general public. Peak, 161 Pa. Commw. at 270, 636 A.2d at 1252. To establish a special relationship, a party must show that the governmental entity was:

“(1) [A]ware of the individual’s situation or unique status,
“(2) [H]ad knowledge of the potential for the particular harm the individual suffered, and
“(3) [V]oluntarily assumed, in light of that knowledge, to protect the individual from the precise harm which was occasioned.” Estate of Dennis, 161 Pa. Commw. at 73, 636 A.2d at 242 (emphasis in original); see also, Melendez v. City of Philadelphia, 320 Pa. Super. 59, 64, 466 A.2d 1060, 1064 (1983); Rankin v. SEPTA, 146 Pa. Commw. 429, 435, 606 A.2d 536, 538 (1992).

Here, plaintiffs have failed to plead that Trooper Tyler knew the Robinson vehicle was on the shoulder of Interstate 80 with a flat tire, that Dr. Kenyon was going to leave Route 380 to travel on Interstate 80, that Dr. Kenyon suffered from dementia, or that Dr. Kenyon was going to lose control of his vehicle and strike Walter Robinson. Furthermore, there is no averment that Trooper Tyler had volunteered to protect plaintiffs from Dr. Kenyon. “Absent an express promise to render care or protection, no special relationship is created.” Estate of Dennis, 161 Pa. Commw. at 74, 636 A.2d at 242. In short, there is no special relationship between PSP and/or Trooper Tyler and plaintiffs, and therefore, no duty to the plaintiffs.

Plaintiffs argue that a “special relationship” may also be established as a result of the “special danger” to which plaintiffs were subject and rely on Berlin v. Drexel University, 10 D.&C.3d 319 (Phila. 1979), in support of this contention. According to Berlin, “[w]here a member of the public has been exposed to special danger, . . . and the authorities have undertaken the responsibility to provide adequate protection, breach of that duty may be liability creating.” 10 D.&C.3d at 328. However, after carefully reviewing Berlin, we believe that plaintiffs’ reliance is misplaced. In dicta, the Berlin court indicated that “special danger” arises from a “special relationship” between the police and an individual, such as an undercover agent, a prosecution witness, or a police informant. Id. at 328. An undercover agent, a prosecution witness, or a police informant, as opposed to an average member of the public at large, is subject to unique dangers inherent in the activities and encounters that go hand-in-hand with his or her role. The facts of the instant matter do not give rise to a special danger of the sort contemplated by the Berlin court. Being involved in an automobile collision is a risk shared by the general public who travel on Commonwealth highways.

Accordingly, we enter the following order:

ORDER

And now, February 14, 2000, the preliminary objections of the defendants, Pennsylvania State Police and Trooper Robert Tyler, are granted. Plaintiffs’ complaint against defendants, Pennsylvania State Police and Trooper Robert Tyler, is hereby dismissed with prejudice.

      . To establish a cause of action in negligence, the plaintiff must demonstrate that defendant owed a duty of care to plaintiff, defendant breached that duty, the breach resulted in injury to the plaintiff, and the plaintiff suffered an actual loss or damage. Martin v. Evans, 551 Pa. 496, 711 A.2d 458 (1998).

      . It is undisputed that PSP and Trooper Tyler are “Commonwealth parties” pursuant to the meaning set forth in 42 Pa.C.S. §8501.

      . The Commonwealth waives the defense of sovereign immunity in the following situations: (1) operation of any motor vehicle in the possession or control of a Commonwealth party; (2) acts of health care employees of Commonwealth agency medical facilities or institutions; (3) the care, custody or control of personal property in the possession or control of Commonwealth parties; (4) a dangerous condition of Commonwealth agency real estate, highways and sidewalks; (5) a dangerous condition of highways under the jurisdiction of a Commonwealth agency created by potholes or sinkholes or other similar conditions created by natural elements; (6) care, custody or control of animals in the possession or control of a Commonwealth party; (7) liquor store sales at Pennsylvania liquor stores; (8) acts of a member of the Pennsylvania military forces; and (9) the administration, manufacture and use of a toxoid or vaccine not manufactured in this Commonwealth. 42 Pa.C.S. §8522(b)(l)-(9).

      . Section 323 states:
      “One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of the other’s person or things, is subject to liability to the other for physical harm resulting from his failure to exercise reasonable care to perform his undertaking, if

        “(a) his failure to exercise such care increases the risk of such harm, or
      “(b) the harm is suffered because of the other’s reliance upon the undertaking.” Restatement (Second) of Torts §323 (1965).

      . Although used to support plaintiff’s argument, the Berlin case supports this court’s decision that PSP and Trooper Tyler owed no duty to plaintiffs. In Berlin, the plaintiff was shot in the leg by an unknown assailant while walking from the rear of his fraternity house to a garage in a “high crime area.” Id. Berlin sued the City of Philadelphia for breach of its duty to provide police protection and to prevent criminal activity. Id. The Berlin court held that under the circumstances, the municipality owed no duty to the plaintiff as a private individual; Berlin was entitled to the general duty the police owe the public at large. Likewise, in the instant matter, PSP and Trooper Tyler merely had a general duty to protect the public traveling on the highways and not a specific duty to protect the plaintiffs individually from becoming the victims of this collision.