author: MINORA, J.,

text:
    Rarrick v. Silbert

      C.P of Lackawanna County,
    No. 2002-CV-4951

      Malcolm L. MacGregor, for plaintiffs.

      Dominick J. Georgetti, for defendants.
    March 24, 2015
   MINORA, J.,

Before the court is Dr. Richard Silbert’s and Behavioral Healthcare Center, RC.’s (hereinafter “defendants”) motion for summary judgment. Oral argument was held on December 16, 2014. This matter is therefore ripe for disposition. For the reasons that follow, defendants’ motion for summary judgment is denied.

FACTUAL AND PROCEDURAL HISTORY

I. Factual History

On September 18, 2000, Debbie Rarrick (hereinafter “plaintiff’), along with minor-plaintiffs Jonothan and Ben Rarrick, were making preparations to move out of the family home the following day due to the rapid decline in marital and familial harmony resulting from Gerald Rarrick Jr.’s deteriorated mental state.

With Gerald Rarrick Jr. referencing “guns” and “killing” and specifically threatening plaintiff and having concern about the emotional impact of the family’s move on Gerald Rarrick Jr., plaintiff phoned defendant Silbert on multiple occasions to alert him regarding her concern about her husband’s change in behavior and the upcoming event. Gerald Rarrick Jr.’s father also called defendant Silbert to separately voice his concerns over his son’s unstable behavior.

On September 19,2000, while plaintiff and her mother awaited the moving van, Gerald Rarrick Jr. entered the kitchen brandishing a shotgun. After firing a shot into the wall and threatening plaintiff, Gerald Rarrick Jr. tried to force the two women into the living room area. While relocating from the kitchen to the living room area, the plaintiff’s mother fled and escaped to try and get help from the authorities. Plaintiff attempted to call 911 several times, but Gerald Rarrick Jr., with his shotgun, prevented her efforts. Plaintiff then attempted to escape by running out of the house through the back door. Gerald Rarrick Jr. chased her, grabbed her and forced her back into the house at gun point.

Shortly thereafter Gerald Rarrick Jr.’s father, Mr. Gerald Rarrick, Sr., arrived at the house and was taken hostage along with plaintiff. After negotiations with the police, the ordeal ended with Gerald Rarrick Jr. leaving the home in police custody.

Plaintiff’s complaint alleges that defendant Silbert was negligent in that he knew or should have known of the clear and present danger his patient, Gerald Rarrick Jr., presented to plaintiffs and that defendant Silbert failed to take any action to defuse the situation.

II. Procedural History

This medical malpractice action was initiated by plaintiffs on September 16,2002 by the filing of a praecipe for writ of summons. On December 24,2003 plaintiff filed the initial complaint. On January 9,2004, defendants filed their preliminary objections to plaintiffs’ complaint, and on March 11, 2004 this court entered an order granting defendants’ preliminary objections. On March 24, 2004, plaintiffs filed a motion for reconsideration of this court’s order granting defendants’ preliminary objections, and on December 16, 2005 this court again entered an order granting defendants’ preliminary objections.

On January 17, 2006, plaintiffs filed their amended complaint. On June 23, 2006, defendants filed their answer and new matter to plaintiffs’ amended complaint. Various discovery was conducted from November 30, 2007 to February 24, 2013. Defendants’ current motion for summary judgment was filed on November 6, 2008, and plaintiffs filed their response on February 20, 2009. On March 17,2009, this court entered an order continuing defendants’ motion for summary judgment because discovery had not yet concluded. Oral argument has now been held and this matter is now in a suitable position for disposition.

LEGAL ARGUMENTS OF THE PARTIES

I. Defendants’Argument

Defendants argue they are entitled to summary judgment as a matter of law because Pennsylvania law-“does not recognize a duty by mental health providers to protect unidentified third parties from the actions of mental health patients.” See defendants’ brief in support of motion for summary judgment, at 4. Next, defendants argue they are entitled to summary judgment “because the plaintiff cannot show ‘gross negligence’ on the party of the defendants under the Mental Health Procedures Act.” Id., at 6. In their final argument, defendants contend they are “entitled to summary judgment as a matter of law because the plaintiffs have failed to product expert reports in accordance with Pa. R.C.P. 1042.28.” Id., at 10.

II. Plaintiffs’Argument

In their reply brief, plaintiffs first argue that “defendants stood in a special relationship to the [plaintiff] which entitled her to a right of protection,” and defendants had a “medical professional duty to warn [plaintiff] of the potential harm from her husband.” See plaintiffs’ reply to defendants’ motion for summary judgment, at 33. Next, plaintiffs argue “[s]ummary judgment is not appropriate where there are genuine issues of material fact as to whether the factual allegations in the case constitute gross negligence, particularly, where the sworn deposition testimony of the treating psychiatrist has not been able to be taken nor had the patient’s records been able to be produced to date.” Id., at 41. Lastly, plaintiffs “concede that they have not produced an expert report under Pennsylvania Rule of Civil Procedure 1042.28 within the required one hundred eighty days.” Id. However, plaintiffs contend “[t]he only reason such an expert report has not been produced to date is because the plaintiffs have been unable to compel the defendants to produce [defendant Silbert’s] records in this case and/or obtain an authorization from Mr. Rarrick given his continued decompensated state.” Id., at 41-42.

LEGAL STANDARD

Summary Judgment

A motion for summary judgment is governed by Pennsylvania Rule of Civil Procedure 1035.2, which provides:

After the relevant pleadings are closed, but within such time as not to unreasonably delay trial, any party may move for summary judgment in whole or in part as a matter of law:
(1) whenever there is no genuine issue of any material fact as to a necessary element of the cause of action or defense which could be established by additional discovery or expert report, or
(2) if, after the completion of discovery relevant to the motion, including the production of expert reports, an adverse party who will bear the burden of proof at trial has failed to produce evidence of facts essential to the cause of action or defense which in a jury trial would require the issues to be submitted to a jury.

Pa. R.C.P. 1035.2. “Summary judgment is properly entered where the pleadings, depositions, answers to interrogatories, and admissions, together with affidavits, demonstrate that no genuine, triable issue of fact exists and that the moving party is entitled to judgment as a matter of law.” Singnorile v. Fernwood Hotel & Resort, 2014 WL 6755312,1.

“Summary judgment may be granted only in cases where the right is clear and free from doubt.” Id. The moving party bears the burden of demonstrating there are no genuine issues of material fact. Id.; Stimmler v. Chestnut Hill Hosp., 602 Pa. 539, 554, 981 A.2d 145, 154 (2009); Abrams v. Pneumo Abex Corp., 2007 Pa. Super. 383, 939 A.2d 388, 390 (2007) rev’d on other grounds, 602 Pa. 627, 981 A.2d 198, 201 (2009); Jones v. Levin, 2007 Pa. Super. 412, 940 A.2d 451, 453 (2007). “All doubts as to the existence of a genuine issue of material fact must be resolved against the moving party.” Singnorile, 2014 WL 6755312, 1. In response, the non-moving party may not rest upon the pleadings, but must set forth specific facts demonstrating a genuine issue for trial. Id.; Pa.R.C.P. 1035.3(a); DeSantis v. Frick Co., 1999 Pa. Super. 329, 745 A.2d 624, 625 (1999) (internal citations omitted) (emphasis added). “A general denial is unacceptable and deemed an admission where it is clear that the defendant has adequate knowledge and that the means of information are within the control of the defendant.” Singnorile, 2014 WL 6755312, 1.

Duty of Mental Health Providers to Third Parties

Under the Restatement of Torts, there is generally no duty to control the conduct of a third person as to prevent him from causing physical harm to another unless a special relationship exists. Restatement (Second) of Torts §315. However, a mental health professional may have the duty to protect by warning a third party of potential harm. Swisher v. Pitz, 868 A.2d 1228, 1232 (Pa. Super. 2005); Emerich v. Philadelphia Center for Human Development, Inc., 554 Pa. 209, 224, 720 A.2d 1032, 1040 (1998). “[A] mental health professional who determines, or under the standards of the mental health profession, should have determined, that his patient presents a serious danger of violence to another, bears a duty to exercise reasonable care to protect by warning the intended victim against such danger.” Swisher, 868 A.2d at 1231-1232 (quoting Emerich, 554 Pa. at 224-225, 720 A.2d at 1040). The circumstances in which a mental professional has a duty to protect by warning a third party of potential harm are “extremely limited.” Id., at 1232. “[A] duty to warn in this context exists only where a specific and immediate threat of serious bodily injury has been conveyed by the patient to the professional regarding a specifically identified or readily identifiable victim.” Id. (emphasis added).

Gross Negligence and the Mental Health Procedures Act

The Mental Health Procedures Act provides in relevant part:

In the absence of willful misconduct or gross negligence, a county administrator, a director of a facility, a physician, a peace officer or any other authorized person who participates in a decision that a person be examined or treated under this act, or that a person be discharged, or placed under partial hospitalization, outpatient care or leave of absence, or that the restraint upon such person be otherwise reduced, or a county administrator or other authorized person who denies an application for voluntary treatment or for involuntary emergency examination and treatment, shall not be civilly or criminally liable for such decision or for any of its consequences.

50 P.S. § 7114(a). Therefore, a physician, including mental health doctors, cannot be held liable unless gross negligence is found. “[G]ross negligence is a form of negligence where the facts support substantially more than ordinary carelessness, inadvertence, laxity, or indifference. The behavior of the defendant must be flagrant, grossly deviating from the ordinary standard of care.” Potts v. Step by Step, Inc., 26 A.3d 1115, 1119 (Pa. Super. 2011) (quoting Albright v. Abington Memorial Hosp., 548 Pa. 268, 277, 696 A.2d 1159, 1164 (1997). “While it is generally true that the issue of whether a given set of facts satisfies the definition of gross negligence is a question of fact to be determined by a jury, a court may take the issue from a jury, and decide the issue as a matter of law, if the conduct in question falls short of gross negligence, the case is entirely free from doubt, and no reasonable jury could find gross negligence.” Downey v. Crozer-Chester Medical Center, 817 A.2d 517, 525-526 (Pa. Super. 2003) (quoting Albright, 548 Pa. at 278, 696 A.2d at 1164).

Production of Expert Reports

Pennsylvania Rule of Civil Procedure 1042.28 states:

(a)(1) A defendant against whom a claim of professional negligence has been made may serve on a plaintiff making that claim a defendant’s request to plaintiff for production of expert reports. The request shall be substantially in the form prescribed by Rule 1042.36.
(2) The defendant’s request may be served not earlier than ninety days after the defendant filed its original answer to the plaintiff’s complaint.
(b) A plaintiff to whom a request has been made under subdivision (a) shall, within one hundred eighty days after service of the request, furnish to the requesting party expert reports summarizing the expert testimony that will be offered by that plaintiff to support the claims of professional negligence made by that plaintiff against the requesting party.

Pa. R.C.P. 1042.28.

The consequences of failing to produce an expert report as requested is outlined in Pennsylvania Rule of Civil Procedure 1042.31, which provides:

(a) A party who has not received an expert report required to be produced under these rules may upon motion obtain a court order compelling the production of the report. In ruling on the motion, the court shall consider the complexity of the case, the diligence of the parties in making and responding to discovery requests, and other relevant factors. A party who has proceeded with reasonable diligence shall be given a reasonable time in which to complete necessary discovery and to produce an expert report.
(b) A court may impose sanctions for non-compliance with an order entered pursuant to subdivision (a) including, where appropriate, an order barring a party from introducing expert testimony.
(c) A court shall promptly consider a motion for summary judgment which is based solely on a court order entered pursuant to subdivision (b), barring a party from introducing expert testimony.

Pa. R.C.P. 1042.31. However, a note to Rule 1042.31 states that “a party who has acted diligently should not be required to produce expert reports if discovery of significant information has not been completed because of difficulty obtaining discovery from other parties.” Id.

LEGAL ANALYSIS

Defendant Silbert’s Duty to Plaintiffs

Defendant Silbert was the psychiatric doctor to plaintiff’s former husband, Gerald Rarrick Jr. While a psychiatrist or psychologist generally owes no duty to third parties, the duty to protect by warning a third party of potential harm may arise where a patient communicates a specific and immediate threat of serious bodily injury against a specifically identified or readily identifiable third party victim. Swisher, 868 A.2d at 1232 (emphasis added). Plaintiffs claim that the circumstances necessitating the duty to warn plaintiffs were present because plaintiff Debbie Rarrick and Gerald Rarrick Jr.’s father communicated to defendant Silbert that there was a specific and immediate threat of serious bodily harm to plaintiffs. See plaintiffs’ reply to defendants’ motion for summary judgment, at 10. Plaintiffs also argue that defendant Silbert was aware that Gerald had guns, that plaintiffs were going to depart from the family home and that Gerald’s mental state was decompensating rapidly. Id. None of these factors, however, give rise to defendant Silbert’s duty to warn our plaintiffs. Since plaintiffs are third parties, defendant Silbert would only owe them a duty to warn if Gerald Rarrick Jr., the patient, communicated to his treating professional a specific and immediate threat of serious bodily injury specifically against plaintiffs. Nothing in the record reflects that essential patient communication from patient Gerald Rarrick Jr. directly to defendant Silbert. Lacking the essential facts needed, we find that plaintiffs’ argument fails to create a duty for defendant Silbert to notify third party plaintiffs. Accordingly, defendant Silbert did not owe a duty to third party plaintiffs per Restatement (Second) of Torts §315 and Swisher, 868 A.2d at 1231-1232.

Gross Negligence and the Mental Health Procedures Act

The Mental Health Procedures Act provides that no physician shall be held civilly or criminally liable absent willful misconduct or gross negligence. 50 P.S. § 7114. Therefore, defendant Silbert can only be held liable if his actions are found to constitute gross negligence or willful misconduct. Pennsylvania case law has defined gross negligence as negligence where the facts support substantially more than ordinary carelessness, inadvertence, laxity, or indifference. See Potts, 26 A.3d at 1119. Plaintiffs argue that “[ejvidence via deposition of the gross nature of the negligence involved is the fact that the defendants were advised ... by [plaintiff] of her husband’s bizarre and frightening behavior, reference to guns and killing and his intense focus, paranoia, hatred and threats toward his wife.” See plaintiffs reply to defendants’ motion for summary judgment, at 39. Plaintiffs argue defendants were also contacted by Gerald Rarrick’s father, Gerald Rarrick Sr., giving defendant Silbert further cause to act on information from another credible source. Id. Plaintiffs further argue “[t]o not take some action to intervene...goes well beyond ordinary negligence into the realm of flagrant and gross negligence.” Id.

In the present case, We find that the evidence is not entirely free from doubt and a reasonable jury could conceivably find gross negligence on the part of defendant Silbert. The record reflects that plaintiff telephoned defendant Silbert on multiple occasions to voice her concerns about her husband’s erratic behavior. Not only did plaintiff telephone defendant Silbert, but Gerald Rarrick’s father, Gerald Rarrick Sr., also called defendant Silbert separately concerning his son’s behavior. Plaintiff also called defendant Silbert to voice her concerns regarding the impact of the September 18, 2000 move on Gerald Rarrick. Furthermore, defendant Silbert was aware of Gerald Rarrick’s fragile psychological state coupled with his possession of guns and various hunting rifles. Since this evidence is not entirely free from doubt, Stimulier, 602 Pa. at 554, 981 A.2d at 390, and all doubts are to be resolved against the moving party, Singnorile, 2014 WL 6755312, 1, it remains a question of fact to be determined by a jury whether the defendant’s actions rise to the definition of willful misconduct or gross negligence.

Plaintiff’s Failure to Produce Expert Reports

While defendants rely on Pa. R.C.P. 1042.28 in support of their argument that they are entitled to summary judgment because the plaintiffs have failed to produce expert reports, this argument must fail. Pa. R.C.P. 1042.28 was adopted, immediately effective, on March 29, 2004. Pa. R.C.P. 1042.31 was also adopted, immediately effective, on March 29, 2004. This case was initiated via praecipe for writ of summons on September 16, 2002, and the underlying incident occurred on September 18, 2000. Since the underlying incident predates both Pa. R.C.P. 1042.28 and Pa. R.C.P. 1042.31, these Rules of Civil Procedure cannot apply to the current case due to the adoption of the two rules occurring subsequent to our events and complaint.

For the sake of clarity, even if these rules were effective when the September 18, 2000 incident took place, defendants’ argument would also fail on the merits. On November 29, 2007 the defendants requested production of plaintiffs’ expert reports. Defendants allege, and plaintiffs concede, that plaintiffs failed to produce the requested expert reports within the required one hundred eighty (180) days required under Pa.R.C.P. 1042.28. The record is not clear as to why plaintiffs failed to produce said reports, from a standpoint as to the rules applicability. Plaintiffs argue, however, that their failure to produce the expert reports was because they were unable to compel the defendants to produce defendant Silbert’s records or obtain authorization from Gerald Rarrick Jr. for release of the records. See plaintiffs reply to defendants’ motion for summary judgment, at 41-42. However, the record reflects that on February 24, 2014, special trial master Burke issued an order granting plaintiffs motion to compel the deposition of defendant Silbert, limiting the deposition to those statements made to the patient in the presence of non-attorney third parties. See February 24, 2014 order of STM Burke.

The defendants argue that summary judgment is appropriate because of plaintiffs’ failure to produce expert reports in accordance with Pa. R.C.P. 1042.28. Pa. R.C.P. 1042.31(a) permits a party who has not received an expert report to obtain a court order compelling the production of the report. While Pa. R.C.P. 1042.31 further outlines the various steps a party can take following the failure to produce an expert report, this statute does not apply because defendants did not seek sanctions following plaintiffs’ failure to produce the reports. There is no law that requires summary judgment because of a party’s failure to produce expert reports in accordance with Pa. R.C.P. 1042.28, and the aggrieved party does not pursue its remedies.

We find there is a genuine issue of material fact as to whether defendant Silbert owed plaintiffs a duty of care under Pennsylvania law, rendering summary judgment inappropriate. Under the Mental Health Procedures Act, a physician shall be held liable if willful misconduct or gross negligence is found. 50 P.S. § 7114. In our case, plaintiff and her father-in-law separately telephoned and spoke with defendant Silbert to voice their concerns about Gerald Rarrick’s deteriorating mental state. We find that a jury should be allowed to determine whether defendant Silbert’s actions rise to the level of willful misconduct or gross negligence to find him liable in the underlying case. Therefore, defendants’ motion for summary judgment is denied. An appropriate order follows.

ORDER

And now, this 24th day of March 2015, upon consideration of the motions, responsive pleadings and briefs and the able verbal and written arguments of counsel for the parties regarding defendants’ motion for summary judgment, it is hereby ordered and decreed that defendants’ motion for summary judgment is denied.


source: Caselaw Access Project

author: LASH, J.,

license: Public Domain

text:
    Reading Community Club v. Berks County Board of Assessment Appeals

      C.P. of Berks County,
    No. 14-21091

      Kelsey E. Frankowski, for appellant.

      Edwin L. Stock, for appellee.
    March 26, 2015
   LASH, J.,

The matter before this court is the appeal of appellant, Reading Community Club, (hereinafter “RCC”), from the decision of the Board of assessment appeals of Berks County, Pennsylvania, (hereinafter “Board”), denying RCC an exemption from real estate taxation. RCC claims it is entitled to the exemption as a purely public charity. Trial was held on March 23, 2015. This court enters the following findings of fact:

I. FINDINGS OF FACT

1. Appellant is the Reading Community Club, (hereinafter “RCC”), a non-profit corporation that has been in existence since 1920, but has only been organized under the laws of the Commonwealth of Pennsylvania since 1938.

2. The respondent, Board of Assessment Appeals of Berks County, Pennsylvania, (hereinafter “Board”), with offices in the Berks County Services Center, Third Floor, 633 Court Street, Reading, Berks County, Pennsylvania 19601.

3. Intervenor, Reading School District, maintains offices at 800 Washington Street, Reading, Berks County, Pennsylvania 19601. Reading School District filed its Notice of Intervention on November 14, 2014.

4. RCC owns real estate (hereinafter “property”) located at 403 North 11th Street, Reading, Berks County, Pennsylvania 19604, consisting of approximately .090 acres. The property I.D. Number is 11-5317-61-12-1594.

5. The property is located in the Reading School District.

6. RCC does not lease any part of the property or earn any rental income from the same.

7. RCC enjoys federal tax exemption status pursuant to Section 501(c)(3) of the Internal Revenue Code. 26 U.S.C.A. § 501(c)(3).

8. RCC is a non-profit corporation with a board composed of volunteers committed to the advancement of theater arts. RCC produces approximately four (4) dramas and children’s shows per year.

9. The productions are for the benefit of the general community and for specific targeted groups.

10. As set forth in its by-laws, the purpose of RCC is to “foster, promote, develop and produce dramatic and other theatrical and cultural projects. [RCC] does not contemplate pecuniary gain or profit for itself or its members.”

11. RCC serves the community in several ways, including: (1) providing affordable drama productions for the community, productions that would not otherwise be available to the community other than through out of town travel at a much higher cost; (2) providing educational training for actors and technicians; (3) providing opportunities for local playwrights; and (4) featuring plays geared toward specific ethnic youth to interest them in drama and provide an alternative to street crime.

12. The educational component includes partnering with various school districts in the community to provide an after school theatre club, an activity that the school district would otherwise likely not be providing.

13. RCC also partners with non-profit organizations and agencies for the benefit of the community. For example, RCC partnered with St. Joseph’s Medical Center for a production on cyberbullying, providing free tickets to students who were being bullied. After the drama, members of St. Joseph’s Medical Center were available for a question and answer session with the students.

14. RCC generates revenue from private donations, reasonable annual memberships fees and from ticket and concession sales. In order to be in the production, a person must be a member. However, the membership fees are often waived if the individual cannot afford the fee. Tickets are also often given out at no cost. Volunteers provide time at no compensation.

15. The revenue is first used to pay the outstanding overhead and also to provide a scholarship fund for children endeavoring to take college courses in the theater arts. None of the members or board members receive any compensation. If revenue exceeds expenses, the excess is used for building maintenance. In 2014, RCC operated at a deficit.

16. The property is utilized for productions, rehearsal, storage, and stage building. Storage is for costumes and props. RCC also permits other theatre production companies and agencies to use the property or the costumes or props without any rental fee.

17. On or about August 20, 2014, RCC filed an application for real estate tax exemption for the property.

18. On October 1, 2014, the Board held a hearing to determine whether RCC should be granted a real estate tax exemption for the property.

19. On October 8, 2014, the Board mailed RCC a final notice indicating that the requested real estate tax exemption was denied.

20. Thereafter, on or about November 5, 2014, RCC filed an appeal to the Court of Common Pleas of Berks County.

II. DISCUSSION

RCC claims that it is a purely public charity under Section 8812(a)(3) of the new Consolidated County Assessment Law, 53 Pa. C.S.A. Section 8812(a)(3), which states the following:

(a) General rule. — The following property shall be exempt from all county, city, borough, town, township, road, poor, county institution district and school real estate taxes:...
(3) All hospitals, universities, colleges, seminaries, academies, associations and institutions of learning, benevolence or charity, including fire and rescue stations, with the grounds annexed and necessary for their occupancy and use, founded, endowed and maintained by public or private charity as long as all of the following apply:
(i) The entire revenue derived by the entity is applied to support the entity and to increase the efficiency and facilities of the entity, the repair and the necessary increase of grounds and buildings of the entity and for no other purpose.
(ii) The property of purely public charities is necessary to and actually used for the principal purposes of the institution and not used in such a manner as to compete with commercial enterprise.

The exemption from taxation for institutions of purely public charity has its foundation in the Pennsylvania Constitution. In Article 8, Section 2(a)(v), it states: “The general assembly may by law exempt from taxation:... (v) Institutions of purely public charity, but in the case of any real property tax exemptions only that portion of real property of such institution which is actually and regularly used for the purposes of the institution.” Const. Art. 8, § 2(2)(v).

In the case of Mesivtah Eitz Chaim of Bobov, Inc. v. Pike County Board of Assessment Appeals, 44 A.3d 3 (Pa. 2012), the Pennsylvania Supreme Court clarified the requirements for an institution seeking a tax exemption as a purely public charity. The court stated that the institution must initially meet the definition of “purely public charity” measured by the test set forth in the case of Hospital Utilization Project v. Commonwealth, 507 Pa. 1, 487 A.2d, 1306, 1317 (1985), a standard commonly referred to as the “HUP test.” That test requires that the institution prove that it: “(a) [ajdvances a charitable purpose; (b) [d]onates or renders gratuitously a substantial portion of its services; (c) [b]enefits a substantial and indefinite class of persons who are legitimate subjects of charity; (d) [rjelieves the government of some of its burden; and (e) [ojperates entirely free from private profit motive.” Mesivtah, 44 A.3d at 5.

If the institution meets the HUP test, it may then qualify for exemption if it meets the requirements imposed by the Institutions of Purely Public Charity Act, (hereinafter “Act 55”), 10 P.S. Section 375. Mesivtah, 44 A.3d at 6. The criteria set forth in Act 55, conceptually similar to the HUP test, are: that the institution advances a charitable purpose, that it operate entirely free from private profit motive, that it donates or renders gratuitously a substantial portion of its services, that it benefits a substantial and indefinite class of persons who are legitimate subjects of charity and that it relieves the government of some of its burden. 10 P.S. § 375(b)(f). The distinctions between the HUP test and Act 55 stem from the different means used to determine whether the various criteria have been met. For the HUP test, the means were established through development of case law while Act 55 is specific, listing the means in the statute.

The Board does not dispute that RCC operates entirely free from private profit motive but does argue that RCC fails to meet any of the other four (4) requirements. Accordingly, this court shall first consider whether the RCC advances a charitable purpose.

As stated in the HUP case, the term “charitable” includes:

[E]very gift for a general public use, to be applied, consistent with existing laws, for the benefit of an indefinite number of persons, and designed to benefit them from an educational, religious, moral, physical, or social standpoint. In its broadest meaning, it is understood ‘to refer to something done or given for the benefit of our fellows or the public.’ HUP 487 A.2d. at 1315 (citation omitted.)

RCC provides services to the community, which benefit the community, and do “advance a charitable purpose.” In addition to providing entertainment for the general public at a reasonable cost, RCC provides substantial assistance toward the education of students wanting to advance in the theatre arts. The partnership with the school districts is particularly important, given the current budgetary difficulties experienced by school districts, often resulting in termination of activities, including in the area of performing arts. The “cyberbullying” performance is unique in that it provides a method through an entertainment venue for attracting students who need to hear the message where they then can receive instruction through the aid of professionals. Providing an entertainment alternative to disadvantaged minorities also fulfills this purpose.

Likewise, under Act 55 this criterion is met. In Section 375(b), several purposes are fulfilled, including (1) relief of poverty, (2) advancement and provision of education, and (6) accomplishment of a purpose which is recognized as important and beneficial to the public and which advances social, moral or physical objectives.

The next prong of the HUP test is whether RCC “donates or renders gratuitously a substantial portion of its services.” In the case of In Re Appeal of Sewickley Valley YMCA, 774 A.2d 1, 8 (Pa.Cmwlth. 2001), the Pennsylvania Commonwealth Court discusses this criterion in the context of the HUP test, setting forth:

In order to satisfy its burden of demonstrating that it donates or renders gratuitously a substantial portion of its services, an entity must show that it makes a bona fide effort to service those persons who are unable to afford the usual fee. Fellowship Int’l Mission v. Lehigh County Bd. of Assessment Appeals, 690 A.2d 1271 (Pa.Cmwlth.1997). “In other words, it must be shown that it provides services to someone who cannot afford to pay.” Id. at 1274. Whether an institution renders gratuitously a substantial portion of its services should be based on the totality of the circumstances, as the term “substantial” does not imply a magical percentage. HUP [507 Pa. at 19, 487 A.2d at 1315, n. 9.]

According to the testimony, RCC is very liberal in waiving membership fees and providing free tickets to those who cannot afford to purchase tickets. No one is denied access due to an inability to pay. Additionally, substantial time is donated by volunteers.

Act 55 lists several alternate means of meeting this criterion. Applicable here is Section 375(d)(l)(v), which qualifies an institution if it provides for “uncompensated goods or services which in the aggregate are equal to at least five percent of the institution’s costs of providing goods or services.” RCC provided profit and loss statements for the four (4) productions in 2014. The first production, “Almost, Maine”, cost One Thousand Seven Hundred Fifteen Dollars ($1,715.00) to produce. The uncompensated services and goods included One Hundred Fifty Dollars ($150.00) for ten (10) donated tickets and One Thousand Five Hundred Dollars ($1,500.00) for seventeen (17) volunteers working various hours at Five Dollars ($5.00) an hour, resulting in total uncompensated services of One Thousand Six Hundred Fifteen Dollars ($1,615.00). The second production, “Alice in Wonderland, Jr.”, cost Two Thousand Four Hundred Ninety-Five Dollars ($2,495.00) to produce. Uncompensated services include Six Hundred Seventy Dollars ($670.00) in donated tickets and Five Thousand Six Hundred Twenty Dollars ($5,620.00) of volunteer hours at Five Dollars ($5.00) an hour, for a total of Six Thousand Two Hundred Ninety Dollars ($6,290.00). The third production, “Three Viewings”, cost Seven Hundred Ten Dollars ($710.00) to produce. Uncompensated services included tickets at Ninety Dollars ($90.00) and volunteer hours totaling One Thousand Two Hundred Sixty Dollars ($1,260.00), for a total of One Thousand Three Hundred Fifty Dollars ($1,350.00). Finally, the last production, “Kid’s Holiday Cabaret”, cost Seven Hundred Seventy Dollars ($770.00) to produce, with uncompensated services, including tickets, totaling Three Hundred Ten Dollars ($310.00) and voluntary hours totaling One Thousand Eight Hundred Ninety Dollars ($1,890.00), for a total of Twenty-Two Hundred Dollars ($2,200.00).

Clearly, the uncompensated services far exceed the five percent (5%) required by Act 55. This court determines that this prong has been met.

The next prong of the HUP test is that RCC “benefits a substantial and indefinite class of persons who are legitimate subjects of charity.” As stated in the Appeal of Sewickley valley YMCA, 11A A.2d at 11, “[i]n order to qualify as a substantial and indefinite class of persons, the beneficiary of the charity must be the public.” (citation omitted). As such, restrictions limiting availability of the facilities to a defined group or class could be a basis for disallowance. The Pennsylvania Supreme Court in Unionville-Chadds Ford School District v. Chester County Board of Assessment Appeals, 714 A.2d 397, 401 (Pa. 1998), notes that an essential feature of public charity “is that it is not confined to privileged individuals, but is open to the indefinite public. It is this indefinite or unrestricted quality that gives it its public character,” citing Donohugh’s Appeal, 86 Pa. 306, 313 (1878).

Act 55 defines “legitimate subjects of charity” as “those individuals who are unable to provide themselves with what the institution provides for them.” 10 P.S. Section 375(e)(2). Act 55 defines “substantial and indefinite class of persons” as “[pjersons not predetermined in number, provided that, where the goods or services are received primarily by members of the institution, membership cannot be predetermined in number and cannot be arbitrarily denied by a vote of the existing members.” Id. The productions are open to all members of the general public. Participation in the dramas are limited to members, but membership is not limited or restricted in any way. Further, inability to pay the membership fee is not an impediment, as fees are often waived.

The entertainment and the educational experiences are available for anyone who seeks to take advantage of the programs. Participation in programs run by RCC are also available to public school students at no charge. A substantial portion of the services provided by RCC is free to anyone who cannot afford the fees. This criterion is met by RCC.

The last criterion is that RCC “relieves the government of some of its burden.” In St. Margaret Seneca Place vs. Board of Property Assessment Appeals and Review, 536 Pa. 478, 487, 640 A.2d, 380, 385 (1994), the Pennsylvania Supreme Court set forth that the “HUP test of whether an institution has relieved the government of some of its burden does not require a finding that the institution is fully funding the care of some people who would otherwise be fully funded by the government. The test is whether the institution bears a substantial burden that would otherwise fall to the government.”

Under Section 375(f) of Act of 55, 10 P.S. § 375(f), “Government Service”, an institution may satisfy the criterion in one (1) of six (6) ways, including if it:

(1) Provides a service to the public that the government would otherwise be obliged to fund orto provide directly or indirectly or to assure that a similar institution exists to provide the service.
(2) Provides services in furtherance of its charitable purpose which are either the responsibility of the government by law or which historically have been assumed or offered or funded by the government.

This criterion is clearly met. The partnership with the school districts provide participation and education in the performance of the theatre arts. This includes instruction in acting, technological assistance, stage and prop building, and playwriting. Unfortunately, schools are no longer able to fund these types of programs themselves in many cases. RCC is clearly filling a void.

RCC also assists other theatre groups by allowing those groups to use its facilities, props, and costumes. If RCC was unable to do this, these other theatre groups would have to find alternatives, which may come at an exorbitant cost.

For the reasons set forth, this court finds that RCC is entitled to an exemption as a purely public charity. Accordingly, this court enters the following order:

ORDER

And now, this 26th day of March 2015, after trial held, the appeal of the Reading Community Club from the decision of the Board of Assessment Appeals of Berks County, Pennsylvania, entered October 8, 2014, is sustained. The Board’s decision, dated October 8,2014, is reversed. The appellant, Reading Community Club, shall be exempt from property tax for the property identified by Parcel Number 11-5317-61-12-1594.


text:
    Reading Civic Opera Society v. Reading School District

      C.P. of Berks County,
    No. 14-21103

      Kelsey E. Frankowski, for appellant.

      Edwin L. Stock, Esquire, for appellee.
    March 31, 2015
   LASH, J.,

The matter before this court is the appeal of appellant, Reading Civic Opera Society, (hereinafter “RCO”), from the decision of the board of assessment appeals of Berks County, Pennsylvania, (hereinafter “board”), denying RCO an exemption from real estate taxation. RCO claims it is entitled to the exemption as a purely public charity. Trial was held on March 23, 2015. This court enters the following findings of fact:

I.FINDINGS OF FACT

1. Appellant is the Reading Civic Opera Society, (hereinafter “RCO”), a non-profit corporation organized under the laws of the Commonwealth of Pennsylvania since 1944.

2. Respondent, board of assessment appeals of Berks County, Pennsylvania, (hereinafter “board”), has offices in the Berks County Services Center, Third Floor, 633 Court Street, Reading, Berks County, Pennsylvania 19601.

3. Intervenor, Reading School District, maintains offices at 800 Washington Street, Reading, Berks County, Pennsylvania 19601. Reading School District filed its notice of intervention on November 14,2014.

4. RCO owns three (3) pieces of real estate, (collectively referred to as “the property”), at the following addresses:

a. 122 North 10th Street, Reading, Berks County, Pennsylvania 19601, (hereinafter referred to as the “Main Building”), .160 acres in size, Property I.D. Number 08-5317-77-01-4079;
b. 129 Moss Street, Reading, Berks County, Pennsylvania 19601, (hereinafter referred to as the “Outbuilding”), .110 acres in size, Property I.D. Number 08-5317-77-01-3059; and
c. 127 Moss Street, Reading, Berks County, Pennsylvania 19601, (hereinafter referred to as the “Parking Lot”), .050 acres in size, Property I.D. Number 08-5317-77-01-3057.

5. The property is located in the Reading School District.

6. RCO does not lease any part of the property or earn any rental income from the same.

7. RCO enjoys federal tax exemption status pursuant to Section 501(c)(3) of the Internal Revenue Code. 26 U.S.C.A. §501(c)(3).

8. The mission statement of RCO appears in its ByLaws in Article I — Section 2, which sets forth:

We believe that theatre should engage everyone in the community to participate as a performer, member of the audience, staff or crew. [RCO] exists to serve the theatrical community and residents of Reading/Berks County and surrounding area by providing quality entertainment that has a broad spectrum of appeal to diverse demographics, as well as championing and promoting the performance arts through education and development of individuals, both on and off the stage.

9. In furtherance of its mission, RCO produces large production musicals, with singing, dancing and acting.

10. The productions do not take place on the property. The Main Building is used for storage, with a small area available for rehearsal space for RCO productions and productions of other theatre groups. The outbuilding is used strictly for storage and is without utilities. The parking lot is used for parking accessibility.

11. RCO receives revenues through membership dues of Twenty Dollars ($20.00), which will be waived if the proposed member cannot afford the fee, private contributions, rental income from school districts using props and scenery for their own productions, fundraising, and ticket income. Tickets are often donated to those who cannot afford to pay the fee.

12. Revenue is used to first pay the overhead, which includes flat fees provided to actors and directors on some occasions. If there is a surplus, the surplus is used for building maintenance purposes. RCO is currently operating at a deficit. The financial position of RCO was described as “grave.”

13. RCO generally provides two (2) to three (3) shows per year, as well as an annual gala event, which features a fundraiser and provides a forum for high school students to compete for scholarships of Seven Hundred Fifty Dollars ($750.00), Five Hundred Dollars ($500.00), and Two Hundred Fifty Dollars ($250.00) toward college tuition or expenses.

14. On or about August 20, 2014, RCO filed an application for real estate tax exemptions for all three (3) properties.

15. On October 1, 2014, the board held a hearing to determine whether RCO should be granted a real estate tax exemption for all three (3) properties.

16. On October 8, 2014, the board mailed RCO final notices indicating that the requested real estate tax exemptions were denied for each property.

17. Thereafter, on or about November 5, 2014, RCO filed a real estate tax exemption appeal to the Court of Common Pleas of Berks County.

II. DISCUSSION

RCO claims that it is a purely public charity under Section 8812(a)(3) of the new Consolidated County Assessment Law, 53 Pa.C.S.A. Section 8812(a)(3), which states the following:

(a) General rule. — The following property shall be exempt from all county, city, borough, town, township, road, poor, county institution district and school real estate taxes:...
(3) All hospitals, universities, colleges, seminaries, academies, associations and institutions of learning, benevolence or charity, including fire and rescue stations, with the grounds annexed and necessary for their occupancy and use, founded, endowed and maintained by public or private charity as long as all of the following apply:
(i) The entire revenue derived by the entity is applied to support the entity and to increase the efficiency and facilities of the entity, the repair and the necessary increase of grounds and buildings of the entity and for no other purpose.
(ii) The property of purely public charities is necessary to and actually used for the principal purposes of the institution and not used in such a manner as to compete with commercial enterprise.

The exemption from taxation for institutions of purely public charity has its foundation in the Pennsylvania Constitution. In Article 8, Section 2(a)(v), it states: “The general assembly may by law exempt from taxation:... (v) Institutions of purely public charity, but in the case of any real property tax exemptions only that portion of real property of such institution which is actually and regularly used for the purposes of the institution.” Const.Art. 8, § 2(a)(v).

In the case of Mesivtah Eitz Chaim of Bobov, Inc. v. Pike County Board of Assessment Appeals, 44 A.3d 3 (Pa. 2012), the Pennsylvania Supreme Court clarified the requirements for an institution seeking a tax exemption as a purely public charity. The court stated that the institution must initially meet the definition of “purely public charity” measured by the test set forth in the case of Hospital Utilization Project v. Commonwealth, 507 Pa. 1, 487 A.2d, 1306, 1317 (1985), a standard commonly referred to as the “HUP test.” That test requires that the institution prove that it: “(a) [a]dvances a charitable purpose; (b) [djonates or renders gratuitously a substantial portion of its services; (c) [bjenefits a substantial and indefinite class of persons who are legitimate subjects of charity; (d) [rjelieves the government of some of its burden; and (e) [ojperates entirely free from private profit motive.” Mesivtah, 44 A.3d at 5.

If the institution meets the HUP test, it may then qualify for exemption if it meets the requirements imposed by the Institutions of Purely Public Charity Act, (hereinafter “Act 55”), 10 P.S. Section 375. Mesivtah, 44 A.3d at 6. The criteria set forth in Act 55, conceptually similar to the HUP test, are: that the institution advances a charitable purpose, that it operate entirely free from private profit motive, that it donates or renders gratuitously a substantial portion of its services, that it benefits a substantial and indefinite class of persons who are legitimate subjects of charity and that it relieves the government of some of its burden. 10 P.S. § 375(b)-(f). The distinctions between the HUP test and Act 55 stem from the different means used to determine whether the various criteria have been met. For the HUP test, the means were established through development of case law while Act 55 is specific, listing the means in the statute.

The board does not dispute that RCO operates entirely free from private profit motive but does argue that RCO fails to meet any of the other four (4) requirements. Accordingly, this court shall first consider whether the RCO advances a charitable purpose.

As stated in the HUP case, the term “charitable” includes:

[Ejvery gift for a general public use, to be applied, consistent with existing laws, for the benefit of an indefinite number of persons, and designed to benefit them from an educational, religious, moral, physical, or social standpoint. In its broadest meaning, it is understood ‘to refer to something done or given for the benefit of our fellows or the public.’ HUP, 487 A.2d at 1315 (citation omitted.)

RCO provides services to the community which benefit the community and do “advance a charitable purpose.” RCO provides quality, low cost theatre productions, giving the greater Reading community a theatre presence. Individuals have opportunities to participate in the productions as members at little or no cost. RCO assists school districts and other theatre productions by furnishing free or low cost sets, props and costumes. Students interested in theatre are permitted to participate in theatre productions.

Under Sections 375(b)(2) and (6) of Act 55, this criterion is also met for RCO advances and provides for education and accomplishes a purpose which is recognized as important and as beneficial to the public advancing social, moral or physical objectives.

The next prong of the HUP test is whether RCO “donates or renders gratuitously a substantial portion of its services.” In the case of In Re Appeal of Sewickley Valley YMCA, 774 A.2d 1, 8 (Pa. Cmwlth. 2001), the Pennsylvania Commonwealth Court discusses this criterion in the context of the HUP test, setting forth:

In order to satisfy its burden of demonstrating that it donates or renders gratuitously a substantial portion of its services, an entity must show that it makes a bona fide effort to service those persons who are unable to afford the usual fee. Fellowship Int’l Mission v. Lehigh County Bed. of Assessment Appeals, 690 A.2d 1271 (Pa. Cmwlth. 1997). “In other words, it must be shown that it provides services to someone who cannot afford to pay.” Id. at 1274. Whether an institution renders gratuitously a substantial portion of its services should be based on the totality of the circumstances, as the term “substantial” does not imply a magical percentage. HUP [507 Pa. at 19, 487 A.2d at 1315, n. 9.]

According to the testimony, RCO is very liberal in waiving membership fees and providing free tickets to those who cannot afford to purchase tickets. No one is denied access due to an inability to pay. RCO lends props, costumes and sets to school districts and other theater groups, saving them thousands of dollars over the course of time.

Act 55 lists several alternate means of meeting this criterion. Applicable here is Section 375(d)(l)(v), which qualifies an institution if it provides for “uncompensated goods or services which in the aggregate are equal to at least 5% of the intuition’s costs of providing goods or services.” RCO provided a profit and loss statement for the three (3) productions in 2014. The first production, the “100th Year Free Concert”, cost Three Thousand Four Hundred Twenty-Five Dollars ($3,425.00) to produce. While there were no donated tickets, there were 85 volunteer hours compiled at Five Dollars ($5.00) per hour, for a cost of Four Hundred Twenty-Five Dollars ($425.00). The second production, “Shrek”, was produced at a cost of Eighteen Thousand Eight Hundred Twenty Dollars ($18,820.00). There were 60 tickets donated costing One Thousand Five Hundred Dollars ($1,500.00) and 1,344 hours of volunteer services at Five Dollars ($5.00) an hour for a total cost of Six Thousand Seven Hundred Twenty Dollars ($6,720.00). Finally, the last production, “Forbidden Broadway”, cost Eight Thousand Four Hundred Fifty-Five Dollars ($8,455.00) to produce. There were 25 tickets donated at a cost of Six Hundred Twenty-Five Dollars ($625.00) and 176 hours for volunteer services at Five Dollars ($5.00) an hour for a total cost of Eight Hundred Eighty Dollars ($880.00). The uncompensated goods and services far exceed the five percent (5%) required by Act 55. This court determines that this prong has been met.

The next prong of the HUP test is that RCO “benefits a substantial and indefinite class of persons who are legitimate subjects of charity.” As stated in the Appeal of Sewickley Valley YMCA, 774 A.2d at 11, “[i]n order to qualify as a substantial and indefinite class of persons, the beneficiary of the charity must be the public.” (citation omitted). As such, restrictions limiting availability of the facilities to a defined group or class could be a basis for disallowance. The Pennsylvania Supreme Court in Unionville-Chadds Ford School District v. Chester County Board of Assessment Appeals, 714 A.2d 397, 401 (Pa. 1998), notes that an essential feature of public charity “is that it is not confined to privileged individuals, but is open to the indefinite public. It is this indefinite or unrestricted quality that gives it its public character,” citingDonohugh’s Appeal, 86 Pa. 306, 313 (1878).

Act 55 defines “legitimate subjects of charity” as “those individuals who are unable to provide themselves with what the institution provides for them.” 10 P.S. Section 375(e)(2). Act 55 defines “substantial and indefinite class of persons” as “[pjersons not predetermined in number, provided that, where the goods or services are received primarily by members of the institution, membership cannot be predetermined in number and cannot be arbitrarily denied by a vote of the existing members.” Id. The productions are open to all members of the general public. Participation in the dramas are limited to members, but membership is not limited or restricted in any way. Further, inability to pay the membership fee is not an impediment, as fees are often waived.

Access to productions and use of props, sets and costumes are available to schools and other theatre groups and agencies who seek to take advantage of the programs. Participation in programs run by RCO are also available to public school students at no charge. RCO provides free tickets to non-profit agencies for use by disadvantaged persons, such as the Olivet’s Boy’s Club/Police Athletic League, and Berks County Women In Crisis, whose programs assists persons who have been subject to domestic violence and abuse. A substantial portion of RCO’s services are free to anyone who cannot afford the fees. This criterion is met by RCO.

The last criterion is that RCO “relieves the government of some of its burden.” In St. Margaret Seneca Place vs. Board of Property Assessment Appeals and Review, 536 Pa. 478, 487, 640 A.2d, 380, 385 (1994), the Pennsylvania Supreme Court set forth that the “HUP test of whether an institution has relieved the government of some of its burden does not require a finding that the institution is fully funding the care of some people who would otherwise be fully funded by the government. The test is whether the institution bears a substantial burden that would otherwise fall to the government.”

Under Section 375(f) of Act of 55, 10 P.S. § 375(f), “government service,” an institution may satisfy the criterion in one (1) of six (6) ways, including if it:

(1) Provides a service to the public that the government would otherwise be obliged to fund or to provide directly or indirectly or to assure that a similar institution exists to provide the service.
(2) Provides services in furtherance of its charitable purpose which are either the responsibility of the government by law or which historically have been assumed or offered or funded by the government.

This criterion is also met. Educational training for school students interested in the theatre arts is provided, reducing the burden on school districts to provide this type of instruction or activity. School districts and other agencies receiving government funding have costs defrayed by the availability of costumes, props and sets, saving thousands of dollars over time. Otherwise, the theatre groups and schools would have to find alternatives, which may come at an exorbitant cost. Tickets are donated to these agencies as well, also helping to alleviate the agency’s burden.

For the reasons set forth, this court finds that RCO is entitled to an exemption as a purely public charity. This court enters the following order:

ORDER

And now, this 31st day of March 2015, after trial held, the appeal of the Reading Civic Opera Society from the decision of the board of assessment appeals of Berks County, Pennsylvania, is sustained. The board’s decision, dated October 8,2014, is reversed. The appellant, Reading Civic Opera Society, shall be exempt from property tax for the following properties:

a. 122 North 10th Street, Reading, Berks County, Pennsylvania 19601, Property I.D. Number 08-5317-77-01-4079;
b. 129 Moss Street, Reading, Berks County, Pennsylvania 19601, Property I.D. Number 08-5317-77-01-3059; and
c. 127 Moss Street, Reading, Berks County, Pennsylvania 19601, Property I.D. Number 08-5317-77-01-3057.


author: GRAY, J.,

text:
    Affordable Apartments, LLC v. Allegheny Apartments, LLC

      C.P. of Lycoming County,
    No. 13-02,339

      William P. Carlucci, for plaintiff.

      Martin Flayhart, for defendant.
    April 7, 2015
   GRAY, J.,

Before the court is defendant’s motion for partial summary judgment. Upon review of the motion, briefs and argument, defendant’s motion for partial summary judgment is granted. The court provides the following in support of its decision.

Factual Background

This matter involves a dispute between adjacent landowners about the nature and scope of an easement located on plaintiff’s property. Plaintiff’s tax parcel number 65-001-306 (“Affordable Parcel”) adjoins tax parcel number 65-001-307 (“The Allegheny Parcel”) owned by defendant. The Affordable Parcel extends south to reach Second Street. The Allegheny Parcel only extends about half way to Second Street to Tax Parcel 65-001-309. The easement located on The Affordable Parcel is an “existing passageway” that extends from the Allegheny Parcel to Second Street. The dispute arose from the defendant’s expressed intention to use the easement in one of two ways. The first way would be to use the easement for vehicles to access the rear of The Allegheny Parcel from Second Street. In this scenario, defendant would construct a parking lot in the rear of the Allegheny Parcel on what is now a grassy backyard type area. The second option would be for the defendant to purchase Tax Parcel 65-001-309 and use the easement for vehicles to access parking it would provide on Tax Parcel 65-001-309. Plaintiff contends that the easement does not extend to vehicle traffic and that the easement does not extend to providing access to Parcel 65-001-309.

On September 19, 2013, Affordable Apartments, LLC (“Affordable”) filed a complaint seeking declaratory and injunctive relief. Specifically, Affordable seeks a declaratory judgment to the effect that the easement “does not extend to vehicle traffic across the Affordable Parcel or, in the alternative, does not extend to vehicle traffic for the purpose of accessing Parcel 65-001-309.” See, “wherefore clause,” plaintiff’s complaint, Count 1. In addition, Affordable seeks a preliminary and permanent injunction which would essentially bar the defendant from using the easement for vehicle traffic and enjoining the use of the easement to access Parcel 65-001-309. See, “wherefore clause,” plaintiff’s complaint, Count 2.

By deed dated September 28, 1986, plaintiff’s predecessor in title executed a quit claim deed to defendant’s predecessor in title transferring a right-of-way as follows:

All of the free and uninterrupted use, liberty and privilege of, and passage in and along a certain existing passageway or roadway along the eastern and southern boundaries of land purchased by the grantors herein by deed from the Moriah corp. dated the 2nd day of September 1986 and recorded the 12th day of September 1986 at Lycoming County Deed Book 1164, page 4, which existing road or passageway leads from Second Street property to property now owned by the grantees. See, plaintiff’s complaint, ¶ 7; defendant’s motion for summary judgement, ¶ 8, Ronald Gamer’s Affidavit, ¶ 14. (emphasis added)

Plaintiff contends that the above right-of-way has only ever been used as a right-of way for foot traffic. In his affidavit, plaintiff’s witness and owner of Affordable LLC, Ronald Gamer, avers that the historical use of the right-of-way has only been for pedestrian traffic. Mr. Gamer further avers that the passageway is simply too narrow to permit vehicles to maneuver. Plaintiff asserts that permitting vehicles on the right-of-way would destroy the grassy area and sidewalk, would require relocating guy wire and would create hazards. Plaintiff relies on the expert report of Anthony H. Visco, Jr. dated February 18, 2015.

Plaintiff contends that the purpose of the parties in making the right-of-way was to provide a right-of-way for foot traffic from Second Street, across the Affordable Parcel, to the Allegheny Parcel, similar to the 6 foot right-of-way that exists between the parcels. By contrast, defendant asserts via the affidavit of Richard L. Meek that the purpose was to open up the Allegheny Parcel for motor vehicle access.

Legal Standards

Summary Judgment

Pursuant to Pa. R.C.P. 1035.2, the court may grant summary judgment at the close of the relevant proceedings if there is no genuine issue of material fact or if an adverse party has failed to produce evidence of facts essential to the cause of action or defense. Keystone Freight Corp. v. Stricker, 31 A.3d 967, 971 (Pa. Super. 2011). Anon-moving party to a summary judgment motion cannot rely on its pleadings and answers alone. Pa. R.C.P. 1035.2; 31 A.3d at 971. When deciding a motion for summary judgment, the court must view the record in the light most favorable to the non-moving party, with all doubts as to whether a genuine issue of material fact exists being decided in favor of the non-moving party. 31 A.3d at 971. If a non-moving party fails to produce sufficient evidence on an issue on which the party bears the burden of proof, the moving party is entitled to summary judgment as a matter of law. Keystone, 31 A.3d at 971 (citing Young v. Pa. Dep’t of Transp., 744 A.2d 1276, 1277 (Pa. 2000).

Right-of-Way

A right of way is an easement. Lease v. Doll, 403 A.2d 558 (Pa. 1979), citing, Merrill v. Mfgrs. Light and Heat Co., 409 Pa. 68, 185 A.2d 573 (1962). The scope of an express easement must be determined by the intention of the parties. Lease v. Doll, 403 A.2d 558, 561 (Pa. 1979), citing, Sigal v. Mfgrs. Light and Heat Co., 450 Pa. 228, 299 A.2d 646 (1973). See also, McNaughton Props., LP v. Barr, 981 A.2d 222 (Pa. Super. 2009) The intention of the parties is determined by “a fair interpretation and construction of the grant and may be shown by the words employed construed with reference to the attending circumstances known to the parties at the time the grant was made.” [Footnote omitted.]” Lease v. Doll, 403 A.2d 558 (Pa. 1979), citing, Merrill v. Mfgrs. Light and Heat Co., supra, 409 Pa. at 73, 185 A.2d at 575. “[T]the same rules of construction that apply to contracts are applicable in the construction of easement grants.” Lease v. Doll, 403 A.2d 558 (Pa. 1979), citing, Sigal v. Manufacturers Light and Heat Company, 450 Pa. 228, 234, 299 A.2d 646, 649 (1973); Percy A. Brown & Co. v. Raub, 357 Pa. 271, 286, 54 A.2d 35, 43 (1947).

Discussion

Applying these basic legal standards to the present case, the court concludes as a matter of law that the right-of way in the present cases includes use by motor vehicles under a fair interpretation and construction of the employment of the word “roadway” in prescription of the express easement. The court must interpret the plain words and not look to parole evidence so as to construct the intention of the parties. See, e.g., Lease v. Doll, 403 A.2d 558 (Pa. 1979), citing, Sigal v. Manufacturers Light and Heat Company, 450 Pa. 228, 234, 299 A.2d 646, 649 (1973); Percy A. Brown & Co. v. Raub, 357 Pa. 271, 286, 54 A.2d 35, 43 (1947). In the present case, the court concludes the employment of the word “roadway” and “road” requires access by motor vehicles. Since the plain words control, the court does not look to the affidavits and other parole evidence which are in dispute as to the parties intentions at the time of express easement was made.

In opposition to summary judgment, plaintiff asserts that there are factual disputes. The primary factual dispute identified by plaintiff is the intent of the parties when creating an express easement. For reasons stated previously, this court does not believe this factual dispute is material to the construction of the plain terms of the easement. Plaintiff further asserts that the easement was never used for vehicles. However, there has been no argument of abandonment by defendants and in general, an easement is not lost or extinguished by non-use. See, Sobados v. Kiraly, 393 A.2d 486-488 (Pa. Super. 1978).

The court acknowledges the proposition cited by plaintiff that a right-of-way cannot be expanded to unreasonably burden the servient estate. See, plaintiff’s brief at 10, citing Smith v. Fulkroad, 305 Pa. Super. 459, 451 A.2d 738 (1982). The court notes that the motion before the court did not seek summary judgment as to the volume of vehicle use permitted, whether the right-of-way may be used to access Tax Parcel 65-001-309, the width of the right-of-way, or whether a fence may boarder the right-of-way. Such matters are left for trial.

ORDER

And now, this 7th day of April, 2015, it is ordered and directed that defendant’s request for partial summary judgment is granted in part. The right-of-way across the Affordable Parcel to the Alleghany Parcel, described by deed dated September 28,1986, includes access by motor vehicle.


text:
    Millay v. Marino

      C.P. of Lycoming County,
    No. 13-01,283
    April 10, 2015
   GRAY, J.,

Before the court are defendants’ preliminary objections to plaintiffs’ reinstated amended complaint. Upon consideration of the argument and briefs submitted by counsel, the court sustains the demurrer as to the expiration of the limitation period for the breach of contract claim but overrules the demurrer as to the limitation period for the claim for specific performance. The court overrules the demurrer as to the failure to state a claim for specific performance. The court sustains the objection to the lack of specificity of the complaint with respect to the averment of time. The following opinion is provided in support of this court’s rulings.

Background

This matter involves the purchase of property which occurred on or about May 28,2008. The deed was executed May 28, 2008 and filed June 2, 2008. With respect to the purchase, plaintiffs contend that there were verbal and written representations prior to the closing that there was public water service available at the property. The written representations appear in the agreement of sale, executed April 21,2008. Plaintiffs further aver that they discovered in 2009 that there was no public water service to the property. Plaintiffs also aver that their neighbors have no desire to sell or convey a right of way or easement to allow public water service to the property.

Plaintiffs commenced the instant action by filing a praecipe for writ of summons on May 29,2013. The sheriff filed a return of no service on June 13, 2013. Plaintiffs filed a complaint on September 19, 2014. Plaintiffs filed an amended complaint on October 6,2014. On November 4, 2014, defendants filed preliminary objections. On December 17,2014, the court sustained the objections with respect to the lack of personal jurisdiction for failure to comply with Pa. R.C.P. 400 for original service of process. On October 6, 2014, defendants reinstated the amended complaint. Original service was made in this matter on December 24,2014 when counsel for defendants accepted service.

The reinstated amended complaint contains two counts. In Count 1, plaintiffs seek damages for breach of contract for the sale of real property for failure of the property to contain public water services as promised. In Count 2 of the complaint, plaintiffs seek specific performance of the agreement of sale, involving real property, to require defendants to pay for installation of a public water system and related costs.

Defendants raise four preliminary objections to the amended complaint. In their first and second objections, defendants assert demurrers to Counts 1 (breach of contract involving real estate) and 2 (specific performance of contract involving real estate) as being barred by the four year statute of limitations which governs contracts. Defendants’ third objection is a demurrer to Count 2 on the grounds that plaintiffs seeks money damages and that money damages is an available and adequate remedy at law. Defendants’ fourth objection is a motion to strike for insufficient specificity of a pleading with respect to averments of time. Plaintiffs fail to specify when in the year 2009 they discovered that there was no public water service to the property.

Plaintiffs seek a judgment against the defendants in an amount to be determined along with attorneys’ fees and interest and seek specific performance of the agreement of sale and require the defendants to pay for the installation of a public water system and all related costs, plus fees and costs.

Legal Standards

Preliminary Objections

A party may file preliminary objections based on the legal sufficiency or insufficiency of a pleading (demurrer) pursuant to Pa. R.C.P. 1028(a)(4). A demurrer tests the legal sufficiency of the complaint. Sullivan v. Chartwell Inv. Partners, LP, 873 A.2d 710, 714 (Pa. Super. 2005). When reviewing preliminary objections in the nature of a demurrer, the court must “accept as true all well-pleaded material facts set forth in the complaint and all inferences fairly deducible from those facts.” Thierfelder v. Wolfert, 52 A.3d 1251, 1253 (Pa. 2012), citing, Stilp v. Commonwealth, 940 A.2d 1227, 1232 n.9 (Pa. 2007). In deciding a demurrer “it is essential that the face of the complaint indicate that its claims may not be sustained and that the law will not permit a recovery. If there is any doubt, it should be resolved by the overruling of the demurrer.” Melon Bank, N.A. v. Fabinyi, 650 A.2d 895, 899 (Pa. Super. 1994) (citations omitted). “Preliminary objections, the end result of which would be dismissal of a cause of action, should be sustained only in cases that are clear andfree from doubt.” Bower v. Bower, 611 A.2d 181, 182 (Pa. 1992)(emphasis added).

Statute of Limitations

The Pennsylvania statutes of limitations at issue provide in pertinent part as follows:

Four Years

42 Pa. C.S. § 5525 provides that the following proceedings must be commended within four years: “(8) An action upon a contract, obligation or liability founded upon a writing not specified in paragraph (7) [relating to actions on bonds], under seal or otherwise, except an action subject to another limitation specified in this subchapter.”

Five Years

42 Pa. C.S. § 5526 provides that the following proceedings must be commended within five years: “(2) An action for specific performance of a contract for sale of real property or for damages for noncompliance therewith.”

Discussion

The court will discuss the first and second of defendants objections relating to the applicable statute of limitations period. Next, the court will discuss the demurrer to the claim for specific performance. Finally, the court will discuss the objection for the failure to sufficiently aver time.

Statute of Limitations

The primary issue underlying these preliminary objections is whether the claims are governed by the four year statute of limitations that typically apply to written contract claims, under 42 Pa. Cons. Stat. § 5525(8)(“four year period”), or the five year statute of limitations “for specific performance of a contract for sale of real property or for damages for noncompliance therewith” under 42 Pa. Cons. Stat. § 5526(2)(“five year period”). The four year period applies to contract claims “except an action subject to another limitation specified[.]”

In the present case, plaintiffs contend that the action involving a written contract is subject to the five year limitation period and therefore falls within the specific exception to the four year period for contracts. In support of the five year limitation, plaintiffs cite a common pleas court decision by judge Joseph H. Kleinfelter in Murlin v. Murlin, No. 2005 CV 1882 (C.P. Dauphin Sept. 6, 2007). In support of the four year limitation, defendants rely on Joshua Hill, Inc. v. Whitemarsh Twp. Auth. (In re Joshua Hill, Inc.), 199 B.R. 298, 324-325 (Bankr. E.D. Pa. 1996), which relies on Gustine Uniontown Assocs. v. Anthony Crane Rental, Inc., 577 Pa. 14, 842 A.2d 334 (Pa. 2004) and Romeo & Sons Inc. v. R C. Yezbak & Son, Inc., 539 Pa. 390, 652 A.2d 830 (Pa. 1995) for the proposition that the catch-all limitation period does not apply to construction contracts because the contract limitation period applies.

The five year period has been applied to govern claims for damages for noncompliance with a contract for sale of real estate. See, Murlin v. Murlin, No. 2005 CV 1882 (C.P. Dauphin Sept. 6, 2007). In Murlin, the court concluded that the five year period, rather than the four year period, applied to a property settlement agreement that provided for a transfer of real estate in a divorce matter. Under the agreement, the plaintiff executed any and all deeds to transfer her interest in the marital property in 1995. Over six years later, the defendant was required to pay the balance of consideration in the amount of $15,000, which he failed to pay. Id. The court concluded that the five year period applied even though the transfer of title was completed. The court reasoned that the five year period applied because the plaintiff sought damages for noncompliance of an agreement that provided for a transfer of real estate. Finding no case exactly on point, the court believed that the fact pattern was contemplated by the legislature when creating the five year limitation period. The court further noted the following.

Our legislature expressly established that actions upon agreements regarding the transfer of real estate should be subject to a five-year statute of limitations rather than the four-year limitations for actions on contracts generally. Because the application of the more general statute of limitations in this case would deprive plaintiff of her day in court while allowing defendant to simply abandon his contractual obligation, we conclude that the five-year statute of limitations is applicable here. Thus, defendant’s motion for judgment on the pleadings must be denied. Murlin v. Murlin, No. 2005 CV 1882 (C.P. Dauphin Sept. 6,2007) at *5.

By contrast, in In re: Joshua Hill, Inc., supra, the chief bankruptcy judge, David A. Scholl, concluded the four-year statute of limitations, rather than the five year or twenty year period, applied to claims for rescission and restitution, breach of contract and fraudulent and negligent misrepresentation arising out of an agreement of sale involving real estate. In that case, the court rejected the claim that a breach of covenants in the agreement of sale constituted “noncompliance” such that the five year limitation would apply. Id. at 327. Upon reviewing the legislative history, the court interpreted the five year limitation period for non-compliance with an agreement involving real estate as only applying to claim involving title to real estate. The court noted that the historical purpose of the five year limitation period was “to assure greater certainty of title.” In re: Joshua Hill, Inc., 199 B.R. at 327. There does not appear to be any controlling case-law on this issue and neither Murlin, nor In re: Joshua Hill, Inc., is controlling on this court.

This court is persuaded that the five year limitation period applies to claims for specific performance and similar noncompliance issues with respect to the sale of real estate even when title is not at issue. Significantly, In re: Joshua Hill, Inc., supra did not involve any claim for specific performance, it only dealt with whether breach of covenants in the agreement of sale constituted “noncompliance.” Id. Moreover, the word title is not present in the statue itself. In the present case, Count 2 of plaintiffs’ complaint seeks for specific performance for public water service at the property and Count 1 is for noncompliance of that promise for which the plaintiffs are seeking specific performance. The claims for relief in both counts are so intertwined that they cannot be separated. Therefore, the court believes the claim for specific performance and noncompliance thereto is governed by the five year limitation period.

Specific Performance — Failure to State a Claim

Defendants’ third demurrer is to Count 2 on the grounds that plaintiffs’ claim for specific performance fails to state a claim upon which relief may be granted. Specifically, defendants contend that an adequate remedy at law exists in money damages and that support for the adequate remedy at law is the fact that plaintiffs seek money from defendants to install a public water system. Our Pennsylvania Supreme Court has outlined the basic principles underlying claims for specific performance as follows.

A decree of specific performance is a matter of grace and not of right. Mrahunec v. Fausti, 385 Pa. 64, 121 A.2d 878 (1956). Specific performance should only be granted where the facts clearly establish the plaintiff’s right thereto, where no adequate remedy at law exists, and where justice requires it. Roth v. Hartl, 365 Pa. 428, 75 A.2d 583 (1970); Hilton v. State Employment Retirement Board, 23 Pa.Cmwlth. 639, 353 A.2d 883 (1976).
An action for damages is an inadequate remedy when there is no method by which the amount of damages can be accurately computed or ascertained. Strank v. Mercy Hospital of Johnstown, 383 Pa. 54, 117 A.2d 697 (1955); H. Daroff & Sons, Inc. v. Vitullo, 350 Pa. 501, 39 A.2d 595 (1944). * * *
Moreover, a court of equity will not invoke its jurisdiction where there is an adequate remedy at law and statutory remedies, if adequate, must be exhausted before equitable jurisdiction may be resorted to. See, DeLuca v. Buckeye Coal Co., 463 Pa. 513, 345 A.2d 637 (1975); Pennsylvania Life Insurance Co. v. Pennsylvania National Life Insurance Co., 417 Pa. 168, 208 A.2d 780 (1965). See also, Delaware Valley Convalescent Center, Inc. v. Beal, 488 Pa. 292, 412 A.2d 514 (1980). Clark v. Pa. State Police, 496 Pa. 310, 313, 436 A.2d 1383, 1385 (Pa. 1981)

Specific performance has traditionally been available for enforcement of unique contracts, particularly involving land. See, Petry v. Tanglwood Lakes, Inc., 514 Pa. 51, 522 A.2d 1053 (Pa. 1987), citing, Payne v. Clark, 409 Pa. 557, 187 A.2d 769(1963).

At this stage of the proceedings, the court believes that plaintiffs have alleged facts sufficient for a claim for specific performance where the uniqueness of the sale of land and access to a public water system is at stake. Plaintiffs, buyers, alleged that prior to closing on the property the defendants verbally and in writing represented that there was public water service available at the property. However, no public water service exists at the property. Plaintiffs allege that money damages cannot return the property to the condition it was promised at purchase. Plaintiffs seek specific performance of the agreement of sale to require the defendants pay for the installation of a public water system and all related costs. Plaintiffs do not seek a sum certain. As such, the court believes plaintiffs have sufficiently alleged a claim for specific performance.

Failure to Sufficiently Aver Time.

Defendants object to the complaint under Pa. R.C.P. 1028 (s)(2) for failing to specify an averment of time as required by Pa. R.C.P. 1019(f). Specifically, defendants object that plaintiffs fail to state when in 2009 that the plaintiffs discovered that there is no public water service available at the property. At argument, there was discussion as to discovery on the issue. However, in their brief, plaintiffs state that the discovery was in December 2009. The court believes that plaintiffs are required to aver more precisely when in 2009 they made the discovery so that defendants can plead the expiration of the five year statute of limitations period if it is applicable.

Accordingly, the court enters the following order.

ORDER

And now, this 10th day of April, 2015, following oral argument on defendants’ preliminary objections, for the reasons provided above, it is ordered and directed as follows.

1. Defendant’s demurrer to the breach of contract claim and specific performance claim as barred by the four-year statute of limitations is overruled. This is without prejudice to a claim based upon the five-year limitation period that may be raised depending upon a more specific averment of time in the complaint as explained in ¶ 2 below.
2. Defendants’ objection based upon the lack of specificity of the complaint is sustained. On or before April 30, 2015, plaintiffs shall file an amended complaint providing a more specific averment as to the time of the discovery.
3. On this date, the court will issue a separate order placing this matter on this court’s January 2016 trial term.

      . The court rejected the application of the twenty year limitation period for contracts under seal, 42 Pa. Cons. Stat. § 5529(b)(1), because there was no evidence that the party that had not affixed the seal had any intent to adopt and be bound by the seal affixed by the other party. There is no claim in the present case that the matter is governed by the twenty year limitation period.

      . While In re: Joshua Hill, Inc., cites the Pennsylvania Supreme Court decisions of Gustine, supra, and Romeo supra, neither of those cases involved application of 42 Pa. Cons. Stat. § 5526, which is at issue in the present case. In both of those cases, the Pennsylvania Supreme Court applied the limitation period for written contracts as opposed to the “catch-all” limitation period. But plaintiffs do not contend that the “catch-all” limitation applies to the present case. It should be noted that the length of the limitation periods has changed since the contracts at issue in the previous cases were executed. Therefore, this court identifies the periods as the contracts period and the “catch-all” period.