author: WARMAN, /.,

text:
    Risha v. The Farmers Fire Insurance Agency

      C.P. of Fayette County,
    nos. 148 of 1999 G.D. and 2311 of 1998 G.D.

      Joseph George Sr., for plaintiffs.

      S. Asher Winikoff, for defendants.
    May 1, 2001
   WARMAN, /.,

Presently before this court for disposition are two motions for summary judgment filed on behalf of defendant, Farmers Fire Insuranee Company. In the motions, defendant avers that the plaintiffs, Jesse and Joanne Risha, and the Bortz Corporation, are unable to adduce sufficient evidence on issues essential to their cases, on which they bear the burden of proof, such that a jury could render a verdict in their favor. Therefore, defendant argues that it is entitled to judgment as a matter of law.

After oral argument, full consideration of the record, applicable law, briefs and submissions of counsel, and for reasons more fully discussed herein, defendant’s motion for summary judgment to plaintiffs Jesse Risha and Joanne Risha’s complaint is Granted in part and Denied in part. Defendant’s motion for summary judgment to plaintiff Bortz’ complaint is Denied.

BACKGROUND

This matter arises from a denial of insurance proceeds on a fire insurance policy issued to plaintiffs, Jesse and Joanne Risha, by Farmers Fire Insurance Company of York, Pennsylvania. On August 2,1994, Jesse and Joanne Risha purchased property located at 25 North Mount Vernon Avenue, Uniontown, Fayette County, Pennsylvania, from the Bortz Corporation for $180,000. On the same date, the Rishas mortgaged the property to Bortz in the amount of $ 170,000. As part of the purchase money mortgage, the Rishas were required to “provide, renew, and keep alive by paying the necessary premiums and charges thereon such policies of hazard and liability insurance” and to “promptly submit to mortgagee Bortz evidence of the due and punctual payment of the foregoing charges.” Said mortgage is recorded in the office of the Recorder of Deeds of Fayette County, Pennsylvania, in Record Book 1406 at page 80. By virtue of the mortgage, Bortz is a first lienholder on the property.

The Rishas contacted the Fike Insurance Agency with the intention of acquiring the necessary fire insurance. The Fike Insurance Agency supplied the Rishas with an application for fire insurance from the defendant. The defendant’s application contained a two-page mandatory form entitled “State of Pennsylvania Anti-Arson Application.” Question number seven of the application asked whether there were any losses during the past five years exceeding $1,000 in damage to this particular property or any other property owned by the applicant. The form indicates a negative response despite the fact that less than a year before the Rishas suffered a $400,000 loss and successfully recovered.

Although both Jesse and Joanne Risha were insureds, only Jesse Risha signed the anti-arson application. On the application, Bortz was listed as “mortgagee.” Thereafter, on or about February 22,1995, defendant issued a policy of fire insurance at DW-603164. The Rishas were the sole insureds on the policy and Bortz was the mortgagee. Said policy of insurance provided coverage in the amount of $180,000.

In February of 1998, the property located at 25 North Mount Vernon Avenue was damaged by fire. As a result of the fire, the Rishas presented a claim to defendant. After receiving the Rishas’ claim, the defendant proceeded to make an investigation. During the investigation, the defendant took a statement under oath from Jesse Risha wherein he acknowledged the occurrence of the 1993 fire and the subsequent collection of $400,000 in insurance proceeds.

Upon discovery of the 1993 fire, and subsequent to the collection of the $400,000, defendant denied the Rishas’ claim pursuant to 40 Pa.C.S. § 1615.7(b). 40 Pa.C.S. § 1615.7(b) states that, “any anti-arson application required by this Act shall be deemed a material part of the insurance policy to which the application pertains. A material misrepresentation shall be deemed grounds to void the insurance policy.” Also, implicit in the denial was the denial of insurance coverage to Bortz. Farmers declared the policy void and of no effect.

Thereafter, on or about November 23,1998, based on defendant’s refusal to pay, Bortz commenced an action against defendant at no. 2311 of 1998 in the Court of Common Pleas of Fayette County, Pennsylvania, alleging breach of contract and bad faith denial of insurance benefits pursuant to 42 Pa.C.S. §8371. On or about January 22, 1999, the Rishas commenced a suit against defendant in the Court of Common Pleas of Fayette County, Pennsylvania, at no. 148 of 1999 seeking damages for breach of contract and bad faith pursuant to 42 Pa.C.S. §8371. The Rishas also brought suit against Russell Fike and the Fike Insurance Agency at no. 287 of 1999 in the Court of Common Pleas of Fayette County, Pennsylvania. By order of court, the three actions were consolidated for discovery purposes only. Following various pretrial motions, on February 14, 2001, defendant filed the motions for summary judgment now before this court at nos. 148 of 1999 G.D., and 2311 of 1998 G.D. On March 30, 2001, we heard oral argument thereon.

DISCUSSION

One purpose of the summary judgment rule is to eliminate cases prior to trial where a party cannot make out a claim or defense after the relevant discovery has been completed. Miller v. Sacred Heart Hospital, 753 A.2d 829 (Pa. Super. 2000). In a motion for summary judgment, the non-moving party must adduce sufficient evidence on issues essential to its case on which he bears the burden of proof such that a jury could return a verdict in its favor. Ertel v. Patriot-News Company, 544 Pa. 93, 674 A.2d 1038 (1996), reargument denied, certiorari denied, 519 U.S. 1008, 117 S.Ct. 512, 136 L.Ed.2d 401 (1996); O’Rourke v. Pennsylvania Department of Corrections, 730 A.2d 1039 (Pa. Commw. 1999).

In passing on a motion for summary judgment, the court must examine the record in a light most favorable to the non-movant and resolve any doubt in his favor. Swartley v. Hoffner, 734 A.2d 915 (Pa. Super. 1999), allocatur denied, 561 Pa. 660, 747 A.2d 902 (1999); Doe v. Philadelphia Community Health Alternatives AIDS Task Force, 745 A.2d 25 (Pa. Super. 2000), allocatur granted in part, 563 Pa. 125, 758 A.2d 166 (2000), affirmed, 564 Pa. 264, 767 A.2d 548 (2001). With the above rales in mind, we will first consider defendant’s motion for summary judgment to the Rishas’ complaint.

Defendant argues that it is entitled to judgment as a matter of law to the Rishas’ breach of contract claim because based on 40 P.S. § 1615.7(b), established case law, and Jesse Risha’s material misrepresentations on the anti-arson application, it rightfully denied plaintiffs’ claims and determined that the policy issued to the Rishas was void ab initio. Defendant further argues that it is entitled to judgment as a matter of law to the Rishas’ bad faith claim because since the insurance policy was void ab initio, the Rishas were not “insureds” at the time of the loss, and consequently cannot maintain a bad faith claim pursuant to 42 Pa.C.S. §8371. Defendant argues in the alternative that the Rishas cannot maintain a bad faith claim because it acted in a reasonable manner in denying their claim given the express provisions contained in the anti-arson application law.

We will first consider the defendant’s argument that the Rishas’ breach of contract claim must fail because the insurance policy was void ab initio. Initially, we note that a breach of contract claim must be established by alleging: “(1) the existence of a contract, including its essential terms; (2) a breach of a duty imposed by the contract; and (3) resultant damages.” See Reformed Church of the Ascension v. Theodore Hooven and Sons Inc., 764 A.2d 1106, 1109 (Pa. Super. 2000) (quoting CoreStates Bank N.A. v. Cutillo, 723 A.2d 1053 (Pa. Super. 1999)).

Pursuant to the terms of the Pennsylvania Anti-Arson Application Law, 40 PS. §1615.1 et seq., an anti-arson application must be completed prior to issuance of a permanent policy of insurance. Pa. C.S. § 1615.7(a) provides in pertinent part as follows:

“No insurer may enter into a permanent contract to insure any building... against the peril of fire... unless such insurer first receives an anti-arson application signed and affirmed by the insured____Each anti-arson application shall contain the following language:
“I (we) certify that all information contained herein is true and correct to the best of my (our) knowledge and belief. Signed under the pains and penalties of perjury.” 40 PS. § 1615.7(a).

40 PS. § 1615.7(b) provides:

“An anti-arson application required by this Act shall be deemed a material part of the insurance policy to which the application pertains. A material misrepresentation shall be deemed grounds to void the insurance policy.” 40 PS. § 1615(b).

In addition, an applicant for insurance owes a duty to make full disclosure of all things material to the risk. Rohm & Haas Company v. Continental Casualty Company, 732 A.2d 1236 (Pa. Super. 1999), allocatur granted, 562 Pa. 673, 753 A.2d 820 (2000). Information is said to be material for purposes of allowing an insurer to rescind a policy if knowledge or ignorance of it would naturally influence the judgment of the insurer in issuing the policy, in estimating the degree and character of the risk, or in fixing the premium rate. See A. G. Allebach Inc. v. Hurley, 373 Pa. Super. 41, 540 A.2d 289 (1988). See also, Rohm & Haas Company v. Continental Casualty Company, 732 A.2d 1236 (Pa. Super. 1999), allocatur granted, 562 Pa. 673, 753 A.2d 820 (2000).

Insurer claiming that a policy is void ab initio has the burden of proving fraud by clear and convincing evidence; the insurer must prove that the insured knowingly made false statements on the application and knowingly failed to disclose information which was material to the risk against which the insured sought to be protected. Id. In order to show a policy is void ab initio on the basis of fraud, the insurer must prove that the intent to deceive was deliberate. Id. See also, Grimes v. Prudential Insurance Company of America, 401 Pa. Super. 245, 585 A.2d 29 (1991).

The clear and convincing standard of proof is sufficiently met if evidence presented was so clear, direct, weighty, and convincing as to enable the jury to come to a clear conviction without hesitancy, of the truth of the precise facts in issue. Id. Mere mistakes, even of material information, cannot work to void a contract of insurance if there was no deliberate intent to deceive. Id. Rohm & Haas Company v. Continental Casualty Company, 732 A.2d 1236 (Pa. Super. 1999), allocatur granted, 562 Pa. 673, 753 A.2d 820 (2000).

Question number seven of the anti-arson application signed by Jesse Risha asked:

“Have there been any losses during the past five years exceeding $1,000 in damage to this property or to any property in which anyone with a financial interest in this property had an equity interest or held a mortgage (except federal or state chartered lending institutions)?”

A negative answer in response to question number seven is contained on the form. However, it was less than a year before that the Rishas suffered a $400,000 loss. Further, his deposition testimony and statement given under oath indicate that the answer to question number seven was not accurate.

“Q. When you said that question number seven was not the ... not accurate, that would be to you?
“A. Right.
“Q. Number seven isn’t right, correct?
“A. Everything’s correct except number seven.” Statement under oath, Jesse Risha, pp. 136-37.
“Q. And you did in fact have prior claims?
“A. Right.
“Q. And one of those prior claims was a claim for a fire at the Mt. Vernon Inn which did a significant amount of damage?
“A. Right.
“Q. And the question asks whether you’ve had any losses in five years exceeding a thousand dollars and five years at least from the application would be from February 11, 1990, to February 11,1995. Would the fire at the Mt. Vernon have occurred at that time, in that time period?
“A. Yes.
“Q. And, is it true that there was more than a thousand dollars involved in that fire?
“A. Yes.” D.T., Jesse Risha, p. 21.

Accordingly, because every answer on the anti-arson application is deemed to be a material part of the insurance policy, and because Jesse Risha admitted in both his deposition testimony and statement under oath that the answer to question number seven on the anti-arson application was not correct, his negative answer thereto was clearly a material misrepresentation. Further, pursuant to 40 RS. § 1615.7(b), a material misrepresentation is deemed grounds to void the policy. Accordingly, as to Jesse Risha, based on the foregoing, we believe that defendant properly voided the policy of insurance and because there are no genuine issues of material fact defendant is entitled to judgment as a matter of law to Jesse Risha’s breach of contract claim. We will later discuss defendant’s argument to Joanne Risha’s breach of contract claim.

With regard to Jesse Risha’s bad faith claim brought pursuant to the Pennsylvania Bad Faith Statute, 42 Pa. C.S. §8371, defendant claims that because the statute requires a showing of bad faith towards an “insured,” and because Jesse Risha’s false answer to question number seven on the anti-arson application was a material misrepresentation, it acted in a justifiably reasonable manner in rescinding and voiding the policy. Therefore, defendant argues, since Jesse Risha was not an “insured,” denial of his claim was not a “bad faith” denial under the statute.

The purpose of the Pennsylvania Bad Faith Statute which authorizes action on an insurance policy is to provide a statutory remedy to the insured when the insurer denies benefits in bad faith; the legislature intended to protect the insured from bad faith denial of coverage. General Accident Insurance v. Federal Kemper Insurance Company, 452 Pa. Super. 581, 682 A.2d 819 (1996).

The elements of the statutory cause of action for bad faith are that the insurer (1) lacked a reasonable basis for denying benefits; and (2) knew or recklessly disregarded its lack of a reasonable basis. Booze v. Allstate Insurance Company, 750 A.2d 877 (Pa. Super. 2000), allocatur denied, 564 Pa. 722, 766 A.2d 1242 (2000). See also, Adamski v. Allstate Insurance Company, 738 A.2d 1033 (Pa. Super. 1999), allocatur denied, 563 Pa. 663, 759 A.2d 381 (2000). Mere negligence or bad judgment by insurer in refusing to pay claim is not “bad faith.” O’Donnell ex rel. Mitro v. Allstate Insurance Company, 734 A.2d 901 (Pa. Super. 1999). Bad faith by the insurer is any frivolous or unfounded refusal to pay proceeds of the policy, the refusal need not be fraudulent, but bad faith imports a dishonest purpose and means a breach of a known duty through some motive of self-interest or ill will. Adamski v. Allstate Insurance Company, 738 A.2d 1033 (Pa. Super. 1999), allocatur denied, 563 Pa. 663, 759 A.2d 381 (2000). A bad faith action is neither related to nor dependent on the underlying contract claim against the insurer. Id.

A statement known to be false when made is presumptively fraudulent. Shafer v. John Hancock Mutual Life Insurance Company, 410 Pa. 394, 189 A.2d 234 (1963). And, an individual who signs a blank form is not relieved of the responsibility for the accuracy of the averments contained therein. Kearns v. Philadelphia Life Insurance Company, 401 Pa. Super. 292, 585 A.2d 53 (1991), allocatur denied, 528 Pa. 631, 598 A.2d 284 (1991). Further, absent fraud, a party’s failure to read a contract before signing it is an unavailing excuse or defense, it is considered mere supine negligence. Germantown Savings Bank v. Talacki, 441 Pa. Super. 513, 657 A.2d 1285 (1995). Therefore, Jesse Risha cannot avoid responsibility for the misrepresentation contained on the anti-arson application by claiming that he did not read or did not complete the application.

Here, based on Jesse Risha’s admissions in both his deposition testimony and statement given under oath, which are both included in the record, we believe that defendant had sufficient grounds to establish a reasonable basis upon which to deny Jesse Rishas’s claim. We believe that clear and convincing evidence exists to establish that Jesse Risha’s material misrepresentation with respect to question number seven was fraudulent. Accordingly, we find that defendant is entitled to judgment as a matter of law to Jesse Risha’s bad faith claim.

We will next consider defendant’s argument that it is entitled to judgment as a matter of law to Joanne Risha’s breach of contract claim. Defendant argues that Jesse Risha’s false answer to question number seven on the anti-arson application voids the policy to Joanne Risha as well. Joanne Risha, a named insured on the policy, argues to the contrary that defendant’s motion for summary judgment to her breach of contract claim must fail because defendant has no basis or grounds upon which to void the policy to her. Based on the facts now before us, we agree.

The issue with regard to plaintiff Joanne Risha’s breach of contract claim is whether or not, pursuant to the language of the policy, she is prohibited from obtaining benefits of the policy since her husband, Jesse Risha, made a material misrepresentation on the anti-arson application. Joanne Risha, although a named insured and a named applicant on the anti-arson application, did not sign said application and argues that the policy cannot therefore be void as to her.

The issue, whether an innocent co-insured is precluded from recovering under a policy, has been addressed by our Superior Court in both McAllister v. Millville Mutual Insurance Company, 433 Pa. Super. 330, 640 A.2d 1283 (1994), allocatur denied, 539 Pa. 653, 651 A.2d 540 (1994), and in Kundahl v. Erie Insurance Group, 703 A.2d 542 (Pa. Super. 1997). In McAllister, , the Superior Court explained that “the issue is to be resolved by determining whether the policy treats each insured as jointly or severally covered; the distinction being policies offering joint coverage impose a duty on any policyholder to be responsible for the acts of another policyholder, whereas several coverage covers each insured irrespective of the actions of their co-insureds.” See Kundahl v. Erie Insurance Group, 703 A.2d 542 (Pa. Super. 1997). Thus, if the parties’ interests in the policy are joint, then the innocent co-insured is denied coverage if the actions of any insured would preclude coverage. Id. If, however, the parties’ interests are several, an innocent co-insured cannot be denied coverage as a result of the actions of another insured. Id. In making this determination, courts must review the specific policies at issue and determine whether the policies unequivocally exclude coverage for innocent co-insureds:

“If, after an examination of the policy, the court still cannot determine whether the interests and obligations of the named insureds are joint or several — e.g., the exclusions do not unequivocally exclude coverage for innocent insureds — then the court must interpret the ambiguity in favor of the insureds and find the obligations of the insureds under that particular exclusion to be several or separate. Under these circumstances, therefore, an innocent co-insured would not be precluded from recovering his or her share of the proceeds under the policy.
“Conversely, if the language of the policy, particularly the exclusionary clause, clearly indicates that the insureds’ obligations are joint, then the prohibited acts of one insured bars all others from recovering.” Mc-Allister v. Millville Mutual Insurance Company, 433 Pa. Super. 330, 338-39, 640 A.2d 1283, 1287-88 (1994), allocatur denied, 539 Pa. 653, 651 A.2d 540 (1994). (citations omitted) (emphasis in original) Accord Spezialetti v. Pacific Employers Insurance Company, 759 F.2d 1139 (3d Cir. 1985), Michael Carbone Inc. v. General Accident Insurance Company, 937 F. Supp. 413 (E.D. Pa. 1996).

Accordingly, we turn our attention to the insurance policy at issue. However, prior to doing so, we note the well-settled standards in reviewing insurance contracts.

“The proper focus regarding issues of coverage under insurance contracts is the reasonable expectation of the insured.... In determining the reasonable expectations of the insured, courts must examine the totality of the insurance transaction involved. . . . However, while reasonable expectations of the insured are the focal points in interpreting the contract language of insurance policies, ... an insured may not complain that his or her reasonable expectations were frustrated by policy limitations which were clear and unambiguous.” McAllister v. Millville Mutual Insurance Company, 433 Pa. Super. 330, 340, 640 A.2d 1283, 1288 (1994), allocatur denied, 539 Pa. 653, 651 A.2d 540 (1994). (citations omitted)

After a thorough review of the policy issued to Jesse Risha and Joanne Risha, as contained in the record, this court cannot determine with any level of certainty whether or not the interests and obligations of the named insureds are joint or several. There is no exclusion that unequivocally excludes coverage for innocent insureds. Further, the policy language does not speak to joint or several interests. Accordingly, we must interpret this ambiguity in favor of the insured and find that the obligations of the insureds are several or separate.

We again emphasize that Joanne Risha did not sign the anti-arson application despite the fact that she was a named applicant and subsequent named insured. We also point out that the language of the statute contemplates multiple applicants because it specifically provides:

“I (we) certify that all information contained herein is true and correct to the best of my (our) knowledge and belief.” (emphasis added)

Accordingly, in light of our foregoing discussion, and after examining the record in a light most favorable to Joanne Risha, as the non-movant, and in consideration of the requirement to resolve any doubt in her favor, we must deny defendant’s motion for summary judgment to plaintiff Joanne Risha’s breach of contract claim.

With respect to Joanne Risha’s bad faith claim, defendant argues that because the policy was void ab initio, she cannot be an “insured” entitled to pursue a claim under the Pennsylvania Bad Faith Statute, 42 Pa.C.S. §8371. In light of our denial of defendant’s motion for summary judgment to Joanne Risha’s breach of contract claim, and the foregoing discussion regarding the same, we must also deny defendant’s motion for summary judgment to Joanne Risha’s bad faith claim. We believe that a genuine issue of material fact exists with regard to whether or not defendant had a reasonable basis to deny Joanne Risha’s claim. Accordingly, defendant’s motion for summary judgment to plaintiff Joanne Risha’s bad faith claim is denied.

Having addressed defendant’s motion for summary judgment to the claims as contained in the Rishas’ complaint, we will not turn our attention to defendant’s motion for summary judgment to plaintiff Bortz’ complaint. Defendant argues that there are no genuine issues of material fact and it is entitled to judgment as a matter of law. Defendant claims that the fraud of the mortgagor, Jesse Risha, in the procurement of the policy prevented the contract from ever becoming a valid policy in favor of either the insured or the mortgagee. Therefore, there was no underlying contract upon which a separate obligation in favor of the mortgagee could be engrafted.

The fundamental flaw with defendant’s position is that it fails to recognize that a mortgagee and a mortgagor hold two separate agreements with the insurance company. It is well settled in Pennsylvania that a standard mortgage clause in a policy creates a separate, distinct, and independent contract of insurance in favor of the mortgagee. See World of Tires Inc. v. American Insurance Company, 360 Pa. Super. 514, 520 A.2d 1388 (1987), allocatur denied, 516 Pa. 623, 532 A.2d 20 (1987); Guarantee Trust and Safe Deposit Company of Shamokin v. Home Mutual Fire Insurance Company of Broome County, New York, 180 Pa. Super. 1, 117 A.2d 824 (1955); Satchell v. Insurance Placement Facility of Pennsylvania, 241 Pa. Super. 287, 361 A.2d 375 (1976).

A fire policy with a mortgage clause is, in effect, two contracts, one agreeing to indemnify the owner for loss of property, and a second insuring a creditor’s security for his debt. Taylor v. Seckinger, 199 Pa. Super. 262, 184 A.2d 317 (1962). A mortgagor owner, by act or failure to act, cannot nullify or decrease the amount of protection which policies afford the mortgagee, and the policy provides the same benefit to mortgagee as if it had taken out a separate policy. Guarantee Trust and Safe Deposit Company of Shamokin v. Home Mutual Fire Insurance Company of Broome County, New York, 180 Pa. Super. 1, 117 A.2d 824 (1955).

Additionally, “Under a standard mortgage clause . . . the agreement of the company being separate and divisible from that of the mortgagor, the mortgagee cannot be affected by any act or default of the mortgagor and any breach of the policy terms and conditions committed by the mortgagor is no defense to an action by the mortgagee.” 5A Appleman, Insurance Law and Practices, §3401.

The mortgage clause in the policy at hand provides:

“Loss, if any, under this policy shall be payable to the aforesaid as mortgagee (or trustee) . . . and this insurance, as to the interest of the mortgagee (or trustee) only therein, shall not be invalidated by any act or neglect of the mortgagor or owner of the within described property.”

In light of the foregoing, we believe that defendant’s argument must fail for several reasons. First, as previously stated, we believe that the fundamental flaw with defendant’s position is that the courts of this Commonwealth have long held that the mortgagee holds a separate, independent, and distinct contract of insurance as if it had taken out a separate policy. Defendant’s position that the mortgagee’s interest is dependent upon or derivative of the mortgagor’s interest, in our opinion, is simply an inaccurate interpretation of the laws of this Commonwealth.

Second, we believe that defendant’s argument fails because it implies that mortgagees should be required to procure two policies of insurance, one insuring their interest as mortgagee, and another providing protection against the possibility of fraud on the part of the mortgagor in procuring the policy. We do not believe that this is the result our legislature intended in adopting the Anti-Arson Application Law.

Additionally, we note that Bortz is an innocent third party who in no way participated in the fraud perpetrated by Jesse Risha, and believe that any responsibility for ensuring the accuracy of the mortgagor’s representations as contained on the anti-arson application lies with the insurer who issued the policy and not with the mortgagee.

Accordingly, in consideration of our foregoing discussion, and after examining the record in a light most favorable to Bortz as the non-movant, and resolving all doubt in his favor, we Deny defendant’s motion for summary judgment to Bortz’ breach of contract claim.

Finally, defendant argues that it is entitled to judgment as a matter of law to Bortz’ bad faith claim. We disagree. We believe that there are genuine issues of material fact regarding whether or not defendant had a reasonable basis to deny Bortz’ claim. We, therefore, Deny defendant’s motion for summary judgment to Bortz’ bad faith claim.

In sum we hold: (1) defendant’s motion for summary judgment to plaintiff Jesse Risha’s breach of contract claim and bad faith claim pursuant to 42 Pa. C.S. §8371 is Granted; (2) defendant’s motion for summary judgment to plaintiff Joanne Risha’s breach of contract claim and bad faith claim are Denied; (3) defendant’s motion for summary judgment to plaintiff Bortz’ breach of contract claim and bad faith claim are Denied.

ORDER

And now May 1, 2001, in consideration of the motions for summary judgment filed by defendant, Farmers Fire Insurance Company, and upon further consideration of the record, applicable law, briefs, arguments, and submissions of counsel, it is hereby ordered and decreed that defendant’s motion for summary judgment to plaintiff Jesse Risha’s breach of contract and bad faith claims are granted, and defendant’s motion for summary judgment to the claims of plaintiffs Joanne Risha and Bortz Corporation are denied.

      . In 1993, Jesse and Joanne Risha owned the Mount Vernon Inn located in Uniontown, Fayette County, Pennsylvania. The Mount Vernon Inn was insured under a fire insurance policy with Donegal Mutual Insurance Company. Part of the property insured under the policy was an outbuilding known as the “carriage house.” In 1993, the carriage house was rendered a complete loss by fire and water damage. The Rishas made a claim for insurance coverage to Donegal as a result of the destruction of the carriage house. In late 1993, the Rishas received approximately $400,000 from their insurance carrier as a result of the fire.

      . The certification on the anti-arson application provides:
      “I (we) certify that all information contained herein is true and correct to the best of my (our) knowledge and belief. I (we) acknowledge that this statement is signed under the pains and penalties of perjury and any material false statement contained herein is punishable pursuant to 18 Pa.C.S. §4904(b). I (we) agree that this application shall constitute a part of any policy issued whether attached or not and that any willful concealment or misrepresentation of a material fact or circumstance shall be deemed grounds to void any policy issued. I (we) agree to notify the insurer in writing of any change in the information contained in this application (Part I and Part II) within 60 days.”

      . McAllister involved three brothers who were issued a joint fire insurance policy. The insured dwelling was destroyed by a fire set by one of the brothers. The policy contained provisions that the insurer would not cover a loss resulting from neglect from “any insured” and intentional acts by “an insured.” The policy also contained language stating that “each person ... is a separate insured under this policy. ...” When looking at this provision in conjunction with the exclusionary clauses, the trial court found the policy to be ambiguous as to whether their obligations were joint or several and allowed the innocent brothers to recover. However, the Superior Court reversed finding the terms “any insured” and “an insured” to clearly indicate that the obligations were joint.

      . Kundahl involved a husband and wife who were co-insureds on a homeowners insurance policy and auto insurance policy. Husband intentionally set fire to the home and was later convicted of three counts of arson. After examining the policies using the standards as explained in McAllister, the Superior Court found that the language contained in the homeowner’s policy specifically precluded coverage of loss where the intentional or negligent acts by “anyone we protect” caused the loss. The court explained that a loss caused by “anyone we protect” unequivocally evinces joint responsibility, since the term “anyone” is naturally inclusive as opposed to exclusive. Therefore, if any one [insured] violates the policy, coverage must be denied to all insureds. The court found that the automobile policy likewise unequivocally imposed joint obligations on its insureds. Because the policies imposed joint obligations, the court found that acts by one insured precluded coverage for all other insureds. Wife was therefore denied recovery.

      . We note that our research has revealed no Pennsylvania appellate court decision addressing the effect of rescission of a mortgagor’s policy of insurance on the rights of the mortgagee under a standard mortgage clause. However, although of no precedential value whatsoever and not controlling in any way on this court, at least two federal courts interpreting Pennsylvania law have determined that despite the fact that the plaintiffs’ policies of fire insurance were void in each case based on material misrepresentations of the insured, the insurers were still liable to the mortgagees based on the standard mortgage clause contained in each policy. See Peer v. Minnesota Mutual Fire and Casualty Company, 1995 WL 141899 (E.D. Pa.); Lavin v. Fireman’s Insurance Company of Newark, New Jersey, 1993 WL 436028 (E.D. Pa.).


source: Caselaw Access Project

author: BLACK, J.,

license: Public Domain

text:
    Orloski v. Pennsylvania Power & Light Co.

      C.P. of Lehigh County,
    no. 2000-C-2452.

      Richard L. Orloski, for plaintiff.

      Malcolm J. Gross, for defendant.
    February 7, 2001
   BLACK, J.,

This matter comes before the court on defendant’s preliminary objections in the nature of a demurrer to both counts of plaintiff’s complaint. The complaint avers the following: plaintiff, an attomey-at-law, represented Ferdinand Brenner in an age discrimination suit against defendant in the United States District Court for the Eastern District of Pennsylvania. On Brenner’s behalf, and with his authorization, plaintiff sent a letter to defendant’s counsel to confirm a proposal to settle this case for the sum of $42,500, of which $37,500 was to be paid to Brenner and $5,000 to plaintiff as counsel fees. Defendant’s counsel, acting with actual and apparent authority, responded by letter accepting the terms of the settlement and stating that an “appropriate release” would be forwarded for execution by Brenner. Thereafter, on December 17, 1998, the federal age discrimination case was dismissed with prejudice pursuant to Rule 41.1(b) of the local rules of civil procedure of the federal district court, upon plaintiff’s representation to the court that the case had been settled. Nevertheless, despite demand, defendant has never paid plaintiff the agreed upon $5,000 counsel fee. In Count One of the complaint, plaintiff seeks to recover this counsel fee from defendant on a breach-of-contract theory. In Count Two, plaintiff seeks to recover this sum on a claim of unjust enrichment.

Defendant’s demurrer states correctly that the complaint does not aver that Brenner ever furnished a release to defendant. Hence, defendant contends that plaintiff has failed to allege an essential ingredient of his cause of action, i.e., performance of the bargained-for consideration. At oral argument, counsel for the parties agreed that a release had not been furnished because Brenner refused to sign it; and that as a consequence, defendant has never paid Brenner the $37,500 he was to receive in the settlement.

In response to defendant’s argument, plaintiff points out that the federal action was dismissed with prejudice more than two years ago and cannot now be reopened. Therefore, plaintiff contends that there has been substantial performance of Brenner’s obligations under the settlement agreement. According to plaintiff, defendant has obtained the benefit of the settlement, and a release at this time would be superfluous.

Plaintiff’s position may or may not be valid. The settlement agreement may have contemplated a general release, as is customary in such matters, and without a general release there may remain some potential exposure to defendant from claims by Brenner. However, since a demurrer is not to be granted except in a clear case, I must overrule the demurrer to Count One, the claim for breach of contract. The fact-finder will have to determine, after hearing the evidence, what the full terms of the settlement agreement were and whether this agreement was substantially performed by the dismissal of the federal action with prejudice. See Lane Enterprises Inc. v. L.B. Foster Co., 700 A.2d 465, 471 (Pa. Super. 1997) (“If... the breach is an immaterial failure of performance, and the contract was substantially performed, the contract remains effective.”); see also, Restatement (Second) of Contracts §241.

With respect to Count Two, I reach a different conclusion. Plaintiff was acting in the federal action solely on behalf of his client, Brenner. In this circumstance, the fact that defendant may have derived some benefit from plaintiff’s services is not sufficient to impose liability on defendant for payment of plaintiff’s legal fee. The theory of unjust enrichment simply does not apply to this situation. For example, in a real estate transaction where the attorney for the seller prepares and delivers the deed, the seller’s attorney must look to his client, the seller, for compensation for his services. The attorney cannot claim that the buyer derived a benefit from the transaction and therefore is unjustly enriched.

For this reason, plaintiff’s case stands or falls on the breach-of-contract theory. Absent an enforceable contract for payment of his fee by defendant, plaintiff must look to Brenner for payment. Accordingly, the demurrer to the unjust enrichment claim in Count Two is sustained. The rights and obligations of the parties to this action must be determined on the breach-of-contract claim in Count One.

ORDER

Now, February 7, 2001, upon consideration of defendant’s preliminary objections to plaintiff’s complaint, after review of the parties’ briefs and oral argument, and for the reasons set forth in the accompanying memorandum opinion, it is ordered that said preliminary objections are sustained in part and overruled in part as follows:

(1) The objection in the nature of a demurrer to Count One is overruled.

(2) The objection in the nature of a demurrer to Count Two is sustained, and this count is dismissed from the complaint.

It is further ordered that defendant shall file an answer to Count One of the complaint within 20 days from the date of this order.


author: PRATT, J.,

text:
    Appeal of National Church Residences of Neshannock, PA

      C.P. of Lawrence County,
    no. 70020 of 1998 M.D.

      Sandy B. Garfinkel, for appellant.

      James J. O’Connell Jr., for appellee.
    December 22, 2000
   PRATT, J.,

This is an appeal from a decision by the Lawrence County Board of Commissioners sitting as the Board of Assessment and Revision of Taxes denying the tax-exempt status of appellant National Church Residences of Neshannock, Pennsylvania, for the 1997 and subsequent tax years.

From this court’s December 16, 1999 and December 27, 1999 orders affirming the denial of tax-exempt status and dismissing the appeal, appellant has filed a timely motion for post-trial relief which was submitted to the court by counsel upon stipulation of facts (no evidentiary hearing) and written briefs (no oral argument). (See court’s March 13, 1998 order.)

In its motion, appellant seeks a directed verdict or, in the alternative, a new trial, which is in the nature of, and would be more accurately entitled, motion for judgment n.o.v. or, in the alternative, motion for a new trial. Appellant essentially argues that the court committed an error of law by not granting it tax-exempt status for the tax years 1998, 1999 and 2000 under the recently enacted Institutions of Purely Public Charities Act, which took effect in 1998 (10 Pa.C.S. §371 et seq.) and by mistakenly applying the pre-existing case law. Brief of appellant pp. 5-7. Appellant claims it meets the requirements of the Institutions of Purely Public Charities Act (Act 55) and further argues it is for the appellee, the taxing authority, to show that it does not, as it claims, have the benefit of a presumption under Act 55, i.e., 10Pa.C.S. §376. Supplemental brief of the appellant, pp. 2-7.

Appellee, on the other hand, seems to argue that before an institution can statutorily qualify as tax-exempt, it must first constitutionally qualify under court delineated requirements. Supplemental brief of appellee, pp. 2-4. Then, by going on to say that the courts have rejected “Act 55 type criteria” and not going on to address any possibilities of appellee qualifying under the statute, appellee seems to be attacking the constitutionality of Act 55.

In questioning constitutionality, appellee quite correctly propounds that the term “institution of purely public charity” is a term of art originating in Article VIII, Section 2(a)(v) of the Pennsylvania Constitution, where the General Assembly is authorized to exempt these institutions from taxation. Id. However, it is at this point of origin that our paths diverge.

Specifically, Article VIII, Section 2(a)(v) reads, “The General Assembly may by law exempt from taxation... (v) [institutions of purely public charity ....” (emphasis added) By use of the word “may,” it is evident that making charitable institutions tax-exempt lies within the discretion of the General Assembly and is not mandatory. As such, the General Assembly may, within the bounds of reasonableness, give tax-exempt organizations to some worthy institutions and withhold it from others. In so doing, it would be incumbent upon the legislature to define a qualifying organization as used in the legislation at hand. The General Assembly could define it one way for the purposes of one statute and another way for the purposes of another statute.

Appellant is correct to the extent that the General Assembly could not lower the standards for an exempt institution below any reasonable meaning of those simple words “institutions of purely public charity.” This the General Assembly has not done. Indeed, it would be reasonably argued that they have raised the standards from the previous court mandated Hospital Utilization standard.

There is no argument that prior to the enactment of Act 55, in absence of legislative action, it fell to the courts to lay out the criteria and these standards were valid in the absence of legislative input. If the legislature wished to specifically enunciate how they wished to exercise their constitutionally authorized wisdom to exempt some institutions, then they had to delineate those institutions to be exempt. What better way to do so than to statutorily ascertain the import of the indefinite term “institutions of public charity”? After all, the courts are not the only branch of government permitted to interpret the meaning of constitutional provisions. In a sense, every time the General Assembly passes legislation, it has made a decision that the subject of that passage is constitutional. Once it does so, it may then fall to the courts to review the legislation’s preliminary determination of constitutionality. This review by the courts is done with deference to the legislature by beginning with a presumption of constitutionality and striking down only that which “clearly, palpably, and plainly violates the constitution.” Commonwealth v. Saxon, 219 Pa. Super. 64, 275 A.2d 876 (1971).

Herein the General Assembly plainly operated within the constitutional parameter laid out above. Accordingly, all challenges to Act 55’s constitutionality are rejected. This more basic question resolved, we now must decide whether the appellant qualifies under Act 55.

As alluded to above, the appellant claims the benefit to a presumption of qualification under 10 Pa.C.S. §376. Any organization possessing a valid exemption from the tax imposed by section 204(10) of the 1971 Tax Reform Code (72 PS. §7204(10) with annual revenues of less than $10,000 is presumed to be an “institution of purely public charity.” 10 Pa.C.S. §376. Stipulations numbers 2 and 3 of the supplemental joint stipulation of facts plainly show appellant to be entitled to the presumption.

Once the institution is armed with the presumption, then any “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.” 10 Pa.C.S. §376(b).

Nowhere does the appellee even attempt to point to any place in any stipulation where facts tending to overcome the presumption might be found. Neither does careful examination by this court bring to light any clear shortcomings in appellant’s requisites. In short, we cannot see where appellant does not qualify.

Absent a recognized defect, the presumption cannot be said to have been overcome; then, by virtue of the presumption, the appellant is an “institution of purely public charity” and, as such, appellant is entitled to a tax exemption for the tax years Act 55 has been in effect, i.e., 1998, 1999 and 2000. Accordingly, the decision of the Board of Assessment and Revision of Taxes of Lawrence County is reversed for the tax years of 1998, 1999 and 2000, and appellant shall be granted tax-exempt status for those years by our accompanying order.

ORDER

In accordance with the preceding opinion, the motion for post-trial relief is granted, and judgment n.o.v. is entered for National Church Residences of Neshannock, PA. As such, National Church Residences of Neshannock, PA, is granted tax-exempt status under the Institutions of Purely Public Charities Act (Act 55 of 1997), 10 Pa.C.S. §371 et seq., for the tax years 1998, 1999 and 2000.


author: PRATT, P.J.,

text:
    Ambrosia Coal & Construction Co. v. People’s Bank of Western Pennsylvania

      C.P. of Lawrence County,
    no. 10707 of 1994.

      Frank G. Salpietro, for plaintiffs.

      Gary P. Hunt, for defendants.
    April 5, 2002
   PRATT, P.J.,

Plaintiffs in this case, Ambrosia Coal and Construction Company, Penn Ohio Road Materials Inc., C.D. Ambrosia Trucking Company, and New Castle Lime and Stone Inc., filed a complaint on July 31, 1996, against defendants, People’s Bank of Western Pennsylvania and Robert Koslow, in which plaintiffs set forth a number of causes of action in 10 counts of their complaint, including breach of fiduciary duty, breach of contract, bad faith, conversion, violation of the Uniform Commercial Code, negligence, intentional interference with contractual relationships, and fraudulent misrepresentation.

Plaintiffs’ causes of action stem from the relationship between plaintiffs, as depositors and borrowers, and defendants, as lender and depositor bank. Plaintiffs pledged nearly six million dollars in collateral in the form of certificates of deposit (C.D.s) to defendant People’s Bank in return for loans granted to plaintiffs by the bank. In September 1992, defendants liquidated the C.D.s pledged by plaintiffs as collateral for the loans. In their complaint, plaintiffs allege that, by defendants liquidating plaintiffs’ C.D.s:

(1) Plaintiffs suffered the loss of business profits because they did not have sufficient liquid collateral to support the security bonds required in order to obtain construction contracts;

(2) The net worth of plaintiffs’ business diminished; and

(3) The liquidation reflected negatively on plaintiffs’ credit and, as a result, plaintiffs were unable to obtain a line of credit.

Plaintiffs seek compensatory as well as punitive damages in their lawsuit.

The crux of plaintiffs’ case is that defendants improperly liquidated plaintiffs’ C.D.s in the sum of $6 million, which served as collateral, in whole or in part, to pay off the construction loans for which plaintiffs were obligated to defendants. Plaintiffs allege that defendants’ purpose in liquidating the C.D.s was not to repay the loans because plaintiffs were a credit risk with a history of defaulting on the loan repayments but, rather, was for the sole purpose of improving defendant People’s Bank’s financial portfolio and balance sheet for the proposed merger between Bank & Trust Financial Corporation (B&T), located in Johnstown, Pennsylvania, and defendant People’s Bank, and that this was contrary to the duties and responsibilities of the defendants and the best interests of the plaintiffs.

Plaintiffs have now filed a third motion for sanctions regarding defendants’ failure to comply with a discovery request for production of documents. Plaintiffs are requesting this court to impose sanctions against defendants by entering a judgment against them for their noncompliance with the discovery requests. Plaintiffs contend that defendants willfully and recklessly withheld information and evidence from plaintiffs relevant to the instant case by not providing requested documents, particularly the minutes of the meetings of the board of directors of defendant People’s Bank, and that defendants did so to hinder or impede plaintiffs’ case. Plaintiffs assert that the requested minutes of the board of directors’ meetings show that B&T was in the process of buying out defendant People’s Bank and that this merger was a motivating factor in defendants liquidating plaintiffs’ C.D.s in September 1992, so that defendant People’s Bank would be able to show stronger financial stability. Discussions and negotiations regarding the possible merger were taking place in 1992, prior to the liquidation of plaintiffs’ C.D.s.

In October 1996, plaintiffs served defendants with a request for the production of documents, requesting copies of all documents relating to their causes of action. In December 1996, defendants responded by providing plaintiffs with certain requested documents, except for the minutes of the board of directors’ meetings possessed by defendant People’s Bank. Minutes were not produced until August 1997, eight months after defendants’ first release of documents. The minutes consisted of only six sets of redacted board minutes for the years 1991 and 1992 and were selected by defendants. Certain board minutes were excluded by defendants based on the assertion of the attorney-client privilege.

By way of further discovery, the handwritten shorthand notes of Linda Sklenchar, the former corporate secretary and personal secretary of defendant Robert Koslow, CEO and president of defendant People’s Bank, were requested by the plaintiffs in May 2001. Defendants responded by stating that the notes no longer existed and were not available. However, the handwritten notes were eventually produced in October 2001, after the court ordered their production by its October 15,2001, order. Plaintiffs argue that defendant Robert Koslow, as CEO and president of defendant People’s Bank, knew or should have known of the existence and whereabouts of the handwritten notes and that they should have been provided to plaintiffs upon their request in May 2001.

In October 2001, when plaintiffs received the shorthand notes, they became aware that board minutes existed, which defendants failed to produce, containing information relevant to the instant litigation, including the proposed bank merger.

Thereafter, plaintiffs requested that defendants produce a full set of unredacted board minutes. In November 2001, defendants then produced unredacted minutes from board meetings for the years 1985, 1986, 1991, 1992, 1993, and 1994. Plaintiffs assert, however, that the board minutes relative to the proposed merger were not included.

Plaintiffs charge that, of the 30 sets of board minutes which plaintiffs have identified as being relevant to the instant litigation, defendants have failed to produce 16 1/2 sets of minutes (a portion of board minutes from September 16, 1992, were produced in redacted form but did not include references to the bank merger), all of which contain information pertaining to the merger and are relevant to the instant litigation. According to plaintiffs, as of November 2001, defendants have only produced six sets of unredacted board minutes from 1985, 1986, 1991, 1992, 1993, and 1994.

Defendants counter that they did not withhold documents, they fully complied with all disco very requests made by plaintiffs, and all documents relevant to the instant litigation were produced. Furthermore, defendants claim that plaintiffs’ counsel, Frank G. Salpietro, Esquire, visited defendant People’s Bank in New Castle, in the early fall of 1996, to review documents, including board minutes, relating to the relationship between the parties and plaintiffs’ causes of action and, in doing so, Attorney Salpietro identified and marked the documents that were to be copied and produced.

At the hearing conducted of the instant motion, the parties presented evidence and legal arguments in support of their respective positions.

DISCUSSION

The trial court may issue sanctions against a party that fails to comply with a discovery request as prescribed by Pa.R.C.P. 4019(a) and (b). Normally, sanctions are not imposed absent “willful disregard ... of a court order or an obligation expressly stated in the rules.” Gonzales v. Procaccio Bros. Trucking Co., 268 Pa. Super. 245, 251, 407 A.2d 1338, 1341 (1979). Whether to issue sanctions to a disobedient party lies within the sound discretion of the trial court and the court must choose a punishment which “fits the crime.” Brunetti v. SEPTA, 329 Pa. Super. 477, 481-82, 478 A.2d 889, 891 (1994). Although the severity of the sanctions is vested within the sound discretion of the trial court, the sanction must be appropriate for the violation. Pride Contracting v. Biehn Construction, 381 Pa. Super. 155, 159, 553 A.2d 82, 83 (1989). For example, the Superior Court in Gonzales, supra at 252, 407 A.2d at 1341, held:

“If a written interrogatory asks for information which, although relevant, is not determinative of the entire controversy, a default judgment, which in effect is an adjudication of the merits, would seldom, if ever, be appropriate. Under such circumstances, it would be more appropriate to treat the default as an admission or to disallow proof at trial of such undisclosed information.”

In addition, when determining the type of sanction to be imposed against a disobedient party, the court must balance the procedural need to move a case to a prompt disposition and the rights of the parties. Pride Contracting, supra at 159, 553 A.2d at 84. See for example, Spilove v. Cross Transportation Inc., 223 Pa. Super. 143, 146 n.4, 297 A.2d 155, 157 n.4 (1972) (a default judgment is proper when a party unreasonably fails to answer interrogatories, therefore, preventing the cause of action to move forward).

In entering sanctions against a noncompliant party, the court has the discretion to enter a default judgment against the disobedient party pursuant to Pa.R.C.P. 4019(c)(3), but it should be entered only in rare circumstances. Luszczynski v. Bradley, 729 A.2d 83 (Pa. Super. 1999).

In determining an appropriate sanction to be imposed pursuant to Pa.R.C.P. 4019, the Superior Court in Luszczynski, id. at 87, identified several factors to be considered, including:

“(1) the nature and severity of the discovery violation;
“(2) the defaulting party’s willfulness or bad faith;
“(3) prejudice to the opposing party;
“(4) the ability to cure the prejudice; and
“(5) the importance of the precluded evidence in light of the failure to comply.”

Applying these factors in the instant case, in determining whether any sanction shall be imposed against defendants and the nature thereof, the court must review the nature and severity of any discovery violations by defendants. By continually withholding board minutes containing information vital to plaintiffs’ causes of action, defendants delayed plaintiffs’ causes of action going to trial and deliberately placed evidence beyond plaintiffs’ reach by failing to produce the requested handwritten notes of Linda Sklenchar in response to plaintiffs’ first request for production of documents in October 1996, as well as plaintiffs’ fourth request for production of documents made in May 2001. Furthermore, the delay in producing the handwritten notes delayed the discovery of board minutes relevant to plaintiffs ’ causes of action and the B&T merger and left plaintiffs without the opportunity to depose two witnesses which may have been crucial to plaintiffs’ causes of action. Defendants’ actions essentially attempted to stonewall plaintiffs’ case.

The court can only conclude that defendants’ failure to appropriately respond to plaintiffs’ discovery requests delayed the case and prevented plaintiffs from further discovery information vital to plaintiffs’ causes of action. The court finds this discovery infraction to be egregious.

Regarding any willfulness and bad faith by defendants, in October 1996, plaintiffs requested from defendant People’s Bank any and all documents relating to plaintiffs’ causes of action. At that time defendant People’s Bank knew or should have known of the requested board minutes, which mentioned and referred to plaintiffs and/ or the B&T merger. Nevertheless, defendants continually failed to produce the documents to plaintiffs. Plaintiffs served four different requests for production of documents on defendants, but never received the board minutes containing the references to the B&T merger.

Defendants argue that they exhibited no willfulness or bad faith regarding plaintiffs’ discovery request. They base this argument on the assertion that representatives and agents of defendant People’s Bank permitted Attorney Salpietro to review documents relevant to the instant litigation in defendant People’s Bank’s board room in New Castle, Pennsylvania, that Attorney Salpietro had all the relevant information at his disposal and he selected and tabbed what documents were to be produced to plaintiffs. Attorney Salpietro testified, denying the allegation and denying ever visiting defendant People’s Bank.

Upon reviewing the evidence and testimony presented at the hearing conducted of this matter, the court finds that defendants failed to produce any evidence to support their allegation that Attorney Salpietro visited defendant People’s Bank to review any documents. Defendants presented testimony that all the relevant documents, including the board meetings, were displayed at defendant People’s Bank’s offices in its board room, where Attorney Salpietro was to review them; however, none of the witnesses could testify that they personally observed Attorney Salpietro in the board room reviewing documents or at the bank at any time. Also, defendants’ witnesses also testified that there was no documentation showing that a time and place had been scheduled for Attorney Salpietro to review the documents at the bank. Plaintiffs, on the other hand, produced Attorney Salpietro’s law office time sheets, which he kept in order to keep track of the time he spent on the case for billing purposes. The records failed to show any reference to his reviewing documents at defendant People’s Bank.

Consequently, the court rejects defendants’ assertion that they fully complied with plaintiffs’ discovery request by permitting Attorney Salpietro a full opportunity to review the documents relating the instant litigation and from which Attorney Salpietro could choose those documents deemed pertinent and relevant to plaintiffs’ causes of action.

Further, the court issued sanction orders against defendants on two different occasions, the first on April 16, 2001, sanctioning defendants for violating a confidentiality agreement. The court ordered defendants’ counsel, Scott R. Leah and the law firm of Egler, Garrett & Egler to pay $7,500 to plaintiffs for counsel fees for violating the confidentiality agreement. The second order, dated October 15, 2001, required defendants to produce documents used by defendants’ experts in preparing a report, as well as the handwritten notes of Linda Sklenchar or, in the alternative, if the handwritten notes could not be produced, an affidavit stating the reasons they could not be located.

The court concludes that defendants’ conduct in continuing to withhold board minutes, which they knew or should have known were available and relevant to the instant litigation, exacerbated by defendants’ past behavior which caused two sanction orders to be imposed against them, amounted to willful and bad faith behavior by defendants regarding plaintiffs’ discovery requests.

Next, the court must determine whether defendants’ failure to fully respond to plaintiffs’ discovery requests caused plaintiffs to suffer prejudice and whether any such prejudice is capable of being cured.

By defendant withholding the board minutes in question, plaintiffs forever lost an opportunity to further depose one of the board members, James Dunlevy, regarding the board meetings and the B&T merger. While plaintiffs did depose Dunlevy, at the time of his deposition, plaintiffs did not possess any documents or information relative to the B&T merger and, therefore, Dunlevy was not questioned about the matter. By the time plaintiffs received the discovery information regarding the B&T merger, Dunlevy was deceased.

Also, Nelson Young, an attorney with the law firm of Reed, Smith, Shaw and McClay, located in Pittsburgh, Pennsylvania, was involved with the B&T merger. Attorney Young was present at the board of directors’ meetings of defendant People’s Bank, where he advised the directors concerning the B&T merger. Mr, Nelson was also present in New York for meetings concerning the B&T merger, during which plaintiff Ambrosia Coal and Construction Company was discussed. Attorney Nelson, however, was also deceased prior to defendants producing and providing a full set of unredacted minutes to plaintiffs and, therefore, plaintiffs have been forever foreclosed from deposing Attorney Nelson regarding the merger.

Although no specific date was provided to the court as to when Dunlevy and Nelson expired, the parties agree that they died prior to October 2001, when plaintiffs received the handwritten shorthand notes containing information about the B&T merger. Hence, the court finds that the withholding of information contained in the board minutes prejudiced the plaintiffs by hindering their discovery and causing plaintiffs to lose the opportunity to depose two key witnesses regarding the B&T merger. The court further finds that such prejudice cannot be cured because the two witnesses are now deceased.

Lastly, the court must determine the importance of the precluded evidence. The evidence and information which was withheld, regarding the B&T merger and other issues involved in plaintiffs’ case, is crucial to plaintiffs, in that it attempts to show a motivating factor for defendants’ conduct in liquidating plaintiffs’ C.D.s. Two witnesses with firsthand knowledge of the JB&T merger passed away prior to plaintiffs becoming aware of the importance of the merger in connection with the liquidation of plaintiffs’ C.D.s and having an opportunity to depose the witnesses. Moreover, plaintiffs’ case would not have been delayed had the board minutes been produced when requested and plaintiffs would have had the opportunity to fully develop their causes of action, particularly by deposing James Dunlevy and Nelson Young, crucial witnesses to the B&T merger. By precluding this evidence, defendants obstructed the development of plaintiffs’ case, thereby preventing it from moving forward.

Based on the court’s analysis of the factors, which should be considered in determining whether to impose sanctions and the severity thereof for discovery request violations by a party, the court finds that plaintiffs’ third motion for sanctions shall be granted and that the sanction of entry of default judgment against the defendants is appropriate in this case. Accordingly, the court shall issue a separate order implementing the court’s conclusions.

ORDER

In accordance with the accompanying opinion, plaintiffs’ third motion for sanctions is granted and, as a sanction to be imposed upon defendants for failing to comply with plaintiffs’ discovery requests, default judgment is entered against the defendants and in favor of plaintiffs.

The remaining issue of damages shall proceed to trial.

The prothonotary shall properly service notice of this order and attached opinion upon counsel of record.


author: REIBMAN, J.,

text:
    Tabchi v. Duchodni

      C.P. of Lehigh County,
    no. 1999-C-0207.

      Dennis G. Charles, for plaintiffs.

      Frank Procyk and John Ashley, for defendants.
    April 11, 2002
   REIBMAN, J.,

Before the court are plaintiffs’ post-trial motions seeking a new trial on the issue of damages or, in the alternative, a judgment n.o.v. Because the jury’s verdict bears no reasonable relation to the evidence presented, the verdict must be overturned and the case retried on the issue of damages.

I. BACKGROUND

While riding in their family automobile on Sunday, February 16,1997, George and Hiyam Tabchi, husband and wife, and their three minor children, Rehab, Resam, and Simon (collectively, plaintiffs) were involved in an accident in which their car was struck by an automobile operated by defendant Miriam Duchodni. The impact of the collision caused plaintiffs’ vehicle to swerve and strike a building. As the facts with respect to the cause of the accident were not in doubt, plaintiffs were granted partial summary judgment on the issue of liability. Defendant was held solely responsible for the accident, leaving only the issue of damages to be tried before the jury. After a four-day trial that began on September 24, and ended on October 1, 2001, the jury returned a verdict in the amount of zero dollars as to each of the five plaintiffs, even though injuries to two of them were uncontroverted.

By way of further background, on September 11,2001, Arab terrorists hijacked four commercial jetliners in the United States and crashed two of them into the twin towers of the World Trade Center and one into the Pentagon. The fourth plane crashed in western Pennsylvania. By the time jury-selection commenced, less than two weeks later, the country was still reeling from those events. As is by now well known, these amounted to the most dramatic and deadly acts of terror ever committed in the United States. At the time of trial, it was believed more than 3,000 people, mostly American citizens, had perished. It is fair to say that the country was vigilant, indeed on edge, fearful that Arab extremists would commit other acts of terror against American citizens anywhere in the world. For the first time, Americans saw themselves as truly vulnerable to large-scale acts of terror within the United States. The country was mobilizing for a full-scale war against terrorism, with Arab extremists as the foremost enemy.

With this backdrop, the trial began; and plaintiffs are a family of Arab-Americans. Numerous references to their background were made during the trial. Plaintiffs George and Hiyam Tabchi were bom in Syria and immigrated to the United States as adults. Hiyam’s testimony at trial revealed a marked accent. Plaintiffs’ family activities and dynamics were linked closely to their Arabic heritage and culture. Further, the trial itself was interrupted when a bomb-threat necessitated the evacuation of the courthouse.

Immediately after the jury rendered its verdict and was dismissed by the court, one of the jurors approached plaintiffs’ counsel and allegedly informed him of disparaging remarks concerning plaintiffs’ Arabic heritage and culture made by other members of the jury during the course of their deliberations. Several days later, on October 25,2001, the court received a letter, dated October 16, 2001, from the jury foreperson. In that letter, the juror claimed that the ethnicity of the plaintiffs was openly discussed and apparently considered as a factor in the jury’s deliberations.

Plaintiffs urge that a new trial be granted on two grounds. First, they argue that the verdict bears no reasonable relation to the evidence presented and must, therefore, be overturned. Second, they maintain that the evidence of racial bias and prejudice constitutes such juror misconduct that the verdict itself is fatally flawed and must be rejected. Additionally, an issue is also presented concerning the extent to which it may be inferred that prejudice or passion infected the outcome, based on the nature of the verdict itself.

fl. VERDICT AGAINST THE WEIGHT OF THE EVIDENCE

A basic principle of our system of jurisprudence is that the jury is the ultimate finder of fact, and that it is “free to believe all, some, or none of the testimony presented ....” Neison v. Hines, 539 Pa. 516, 520, 653 A.2d 634, 637 (1995). Nonetheless, the jury is not free to render a verdict that “is so disproportionate to the uncontested evidence as to defy common sense and logic.” Id. at 521, 653 A.2d at 637. As our Supreme Court noted in Kiser v. Schulte, 538 Pa. 219, 225-26, 648 A.2d 1, 4 (1994), “Where the jury’s verdict is contrary to the evidence as to ‘shock one’s sense of justice’ a new trial should be awarded”; and “where the injustice of the verdict ‘stand[s] forth like a beacon,’ a court should not hesitate to find it inadequate and order a new trial.”

In cases involving the adequacy of compensation in personal-injury matters, like that which is presented here, the Superior Court has summarized the pertinent rule: “jury verdicts awarding zero damages are against the weight of the evidence where undisputed medical evidence reveals that the plaintiff has suffered injuries in the accident that were of a type normally associated with pain and suffering.” Burnhauser v. Bumberger, 745 A.2d 1256, 1261 (Pa. Super. 2000). Earlier cases reveal a standard by which to determine whether particular injuries are of a type normally associated with pain and suffering and which, therefore, must be compensated through an award of damages. Neison, 539 Pa. at 524-25, 653 A.2d at 638.

In Boggavarapu v. Ponist, 518 Pa. 162, 165, 542 A.2d 516, 517 (1988), the plaintiff received two puncture wounds on his arm when he was bitten by his neighbor’s dog. He went to the hospital and was given two tetanus shots. Id. He claimed that the tetanus needle pierced his sciatic nerve, and he sued for pain and suffering and medical expenses. Id. The jury exculpated the hospital and treating physician, and held the dog’s owner responsible for the dog bite, awarding plaintiff only $42.60, the cost of the emergency room treatment, as damages. Id. at 166, 542 A.2d at 518. The Supreme Court upheld the verdict. It noted the plaintiff did not complain that the dog bite itself caused his injury, observing: “All his complaints were the product of the tetanus needle which he complained pierced his sciatic nerve. Whether it did or not was vigorously contested by both sides.” Id. at 168, 542 A.2d at 518.

The Supreme Court drew a distinction between “obvious” or “objective” injuries, on the one hand, and injuries in which pain and suffering is merely “subjective,” on the other hand. It defined an “obvious” injury as one “which human experience teaches there is accompanying pain.” Id. at 167, 542 A.2d at 518. The court explained that these are “injuries ... in the most ordinary sense: the broken bone, the stretched muscle, twist of the skeletal system, injury to a nerve, organ or their function, and all the consequences of any injury traceable by medical science and common experience as sources of pain and suffering.” Id. Those injuries may not be disregarded and must be compensated. By contrast, a non-obvious injury, such as pain that “has no known medical source and is subjective to the person,” could be compensable if the triers of fact “believe and accept that it could and[,] in fact[,] exists.” Id. The jury did not believe the needle pierced plaintiff’s sciatic nerve; thus, the specific cause of the alleged pain was rejected. Id. In other words, an injury not traceable by medical science or common experience need not be compensable if the proffered explanation of injury lacks credibility.

In reviewing Boggavarapu, the Supreme Court in Neison determined the jury’s “rejection of the specific cause of the alleged pain ‘reduced the issue from one of obvious injury to one of subjective pain.’ ” Neison, 539 Pa. at 524, 653 A.2d at 638. In other words, since what might otherwise be an obvious injury — puncturing a nerve with a needle — was itself a matter in dispute, the jury was free as a threshold matter to disbelieve that such an injury occurred. Consequently, the entire matter could be evaluated under the more free-ranging subjective standard. As the court put it, “Accordingly, we held that the jurors were not compelled to find pain where there was no objective injury.” Id., 539 Pa. at 524, 653 A.2d at 638. By necessary implication, however, the court indicated that once causation is established or is uncontroverted, jurors must find pain when an obvious injury exists. Id.

Indeed, this was the result that followed in Neison itself. A serious automobile crash resulting in a visible contusion to the head, along with accompanying neck and shoulder pain, was held to be “an obvious injury of the type that produces pain rather than a subjective complaint.” Id. at 524, 653 A.2d at 638. The court also cited with approval Hawley v. Donahoo, 416 Pa. Super. 469, 611 A.2d 311 (1992) (fractured vertebra is an obvious injury and a jury cannot freely disregard evidence of obvious injuries), and distinguished cases in which no objective evidence of injury occurred, e.g., Holland v. Zelnick, 329 Pa. Super. 469, 474, 478 A.2d 885, 888 (1984) (motor vehicle accident consisting of mere “bump” and medical testimony that pain was attributable to stress, not the accident, justified award of no damages).

Thus, the Neison gloss on the Boggavarapu objective-subjective distinction may be summarized as follows: When objective injuries are not “vigorously contested,” a jury may not disregard pain and suffering. Neison, 539 Pa. at 524-25, 653 A.2d at 639. Instead, a jury may only decline to award pain and suffering which naturally follows, as a matter of law, from so-called objective injuries if the alleged cause of the pain, namely, the objective injury, is itself in dispute. Id. This rule must now be applied to each of the plaintiffs to ascertain the existence of any uncontested, obvious, or objective, injuries for which compensation must be made.

Both sides acknowledged that Hiyam Tabchi suffered several fractured ribs as a result of the accident. (See pi. exhibit 9 at 17, and deft, exhibit 1 at 16.) Also, it was uncontroverted that she received multiple superficial lacerations of the forehead, resulting in some permanent scarring. These injuries were caused by glass shards that became embedded when her head struck the windshield of her vehicle. Such injuries are obvious and objective and, by any estimation consistent with human experience, result in pain and suffering for which compensation must be made. Thus, the jury’s award of zero damages as to her must be rejected as being against the clear weight of the evidence.

Inextricably related to Hiyam Tabchi’s injuries is the loss-of-consortium claim of her husband, George Tabchi. A husband’s claim for loss of consortium constitutes a separate and distinct cause of action, but recovery is predicated upon his spouse’s physical injuries. Darr Construction Co, v. W.C.A.B. (Walker), 552 Pa. 400, 408, 715 A.2d 1075, 1080 (1998). Accordingly, such a claim rises or falls depending on the extent to which the spouse is debilitated and thereby incapable of providing “services, society, and conjugal affection” to her partner. Id. Since the jury found no compensable injury to the wife, it necessarily followed that it found no loss of consortium. However, requiring that wife’s injuries be compensated revives husband’s claim for damages arising out of her injuries.

Uncontroverted medical testimony established that Rehab suffered a deviated septum, facial cuts and a bruised knee when she was thrust forward into the rear of the front seat of the vehicle. (PI. exhibits 5, 6, 10 at 18-20, and 34(a).) She suffered intermittent nose bleeds over the next two years that were treated through cauterization and packing with gauze saturated with petroleum jelly. (PI. exhibit 10 at 18-20.) Her injuries are at least as severe as the bruise to the head in Nelson, which was held to be an obvious injury normally associated with pain and incapable of being dismissed by the jury. Therefore, the verdict with respect to her must also be set aside.

Resam’s injuries were diagnosed as left lower-extremity contusion, facial abrasion and minor head injury. (N.T. 9/25/2001 at 121-23,154-55; pi. exhibit 12G.) She complained of pain in her right lower leg and from abrasions. (Id.) While these injuries were uncontroverted, the pain and suffering associated with them is arguably more subjective in nature. Based on the evidence presented, none of her injuries was objective or obvious; they involved chiefly the complaint of pain. The jury, therefore, was not obligated to believe that she suffered compensable injury; rather, the nature of her injuries were such that the jury could have disregarded them, in the language of Boggavarapu, as a “transient rub of life.”

Similarly, Simon’s injuries were diagnosed as facial abrasion and minor head injury. (N.T. 9/25/2001 at 144-49, 171-73; pi. exhibit 12H.) His chief complaint consisted of pain to the right side of his face. (Id.) He testified that his head injury caused him to have double vision for about eight weeks and pain to his neck that restricted his range of motion. (Id.) As with the injuries allegedly incurred by Resam, and based on the evidence it considered, the jury was able to conclude that these injuries were not obvious or objective. Thus, the jury was not obligated to find damages under the Neison-Boggavarapu standard.

III. EXTRANEOUS INFLUENCES ON THE JURY: JUROR MISCONDUCT IN THE FORM OF RACIAL BIAS AND SURROUNDING EVENTS AS EXTERNAL INFLUENCES

Juror Allegations of Racial Bias

As to the argument presented by plaintiffs concerning improper extraneous influence as an alternative ground for a new trial, the rule at common law was strict. Under no circumstances could a juror impeach his own verdict. Vaise v. Delaval, 99 Eng.Rep. 944 (K.B. 1785) (Lord Mansfield). Iowa, however, led the way in carving out an exception to the Mansfield Rule in Wright v. Illinois & Miss. Tel. Co., 20 Iowa 195 (1866), which Pennsylvania later followed. Carter by Carter v. U.S. Steel Corp., 529 Pa. 409, 604 A.2d 1010 (1992) (plurality opinion); Boring v. Lamarca, 435 Pa. Super. 487, 646 A.2d 1199 (1994); Pa.R.E. 606(b). According to this approach, only extraneous influences may be considered in granting a new trial. Carter, 529 Pa. at 418, 604 A.2d at 1016. The common-law “no-impeachment rule” is retained, however, to the extent that a juror may not testify as to the reasoning process undertaken by the jury in arriving at its verdict. Boring, 435 Pa. Super. at 491, 646 A.2d at 1201. Thus, when evidence of an extraneous, or outside, influence on the jury is presented, a two-fold inquiry follows. Id. at 493, 646 A.2d at 1203. The threshold inquiry becomes: Was there an external influence on the jury? If this is answered in the affirmative, the court must ascertain whether the influence was prejudicial, and this becomes an objective test. Id. The court must ask: How would a typical juror be affected by such an input? Id. The court must not, however, inquire nor take evidence of how the deliberative process in the case itself was or was not affected by the external factor. Id. at 494, 646 A.2d at 1203. This prohibition applies with equal force to jurors themselves who come forward. Their testimony may not be received when it relates to the internal deliberative undertakings that occurred in the jury room. Id. at 495, 646 A.2d at 1203. See also, Pa.R.E. 606(b). (Juror may testify as to outside influence, but is incompetent to testify as to deliberative processes.)

Plaintiffs’ contention that the jury was influenced by anti-Arab bias and bigotry in the course of its deliberations is based solely upon the allegations of other jurors. However, such prejudice in the deliberative process, if it existed, and as odious and repugnant as it would be, is not an external or extraneous input that would override the sacrosanct nature of jury deliberations. Cf., e.g., Carter, 529 Pa. at 419, 604 A.2d at 1015 (evidence of jurors watching television broadcast directly relating to events at trial properly received); Friedman v. Ralph Brothers Inc., 314 Pa. 247, 171 A. 900 (1934) (judge permitted to inquire into jurors allegedly visiting accident scene). In the absence of an external, extraneous influence, jurors may not testify with respect to the verdict. Therefore, the alleged statements and the letter of a juror as to the nature of the jury’s deliberation may not be considered in evaluating the jury’s decision.

Surrounding Events As External Influences

Assuming that the unprecedented events of September 11 and the bomb-scare combined with the fact of plaintiffs’ Arabic extraction to constitute an “extraneous” influence upon the jury, the determination of whether it resulted in prejudice against plaintiffs must be an objective one. Carter, supra. Since no evidence may be taken of matters relating to the internal deliberative process of the jury, one must ask: How would an average juror respond to these stimuli?

First, apart from taking judicial notice of the general temper of the times, there is no factual basis upon which to conclude that those events would have caused an average juror to disregard his sworn duty and the court’s instructions to decide the case solely upon the law and evidence of the case. Second, to assume that an average juror would yield to racist impulses would undermine the very foundation upon which our system of jurisprudence is based. One cannot conclude an average juror will yield to racism while maintaining that the jury system composed of those very same average jurors is a fair system that works and is worthy of keeping.

While this reasoning might ring hollow as clever sophistry in the ears of the wronged who are in search of immediate justice, it must be borne in mind that as officers of the court and, indeed, more fundamentally as citizens, we seek much more than justice on a case-by-case basis; we are also stewards of a process. And the process of administering justice through the jury system has as its foundation an abiding assumption that citizens called to jury duty will exhibit the best they have to offer, not the worst. Thus, I am constrained to hold that an average juror would put aside the extraneous events of September 11 and the bomb-scare and not single out plaintiffs as an outlet of some frustrated, misguided rage merely because of their Arabic heritage and culture.

IV. VERDICT CONTAMINATED BY PREJUDICE OR PASSION

The Pennsylvania Supreme Court has also instructed that a jury verdict is to be “set aside as inadequate when it appears to have been the product of passion, prejudice, partiality, or corruption.” Kiser, 538 Pa. at 225, 648 A.2d at 4. Thus, a more nettlesome issue arises from the question as to whether prejudice may be inferred under the Kiser standard from the various circumstances surrounding this case. That is to say or, rather, to ask: May the court infer that “prejudice” infected the entire verdict by taking judicial notice of the events of September 11 and the bomb-scare and, considering this in combination with the conclusion that a verdict was rendered against the weight of the evidence as to Hiyam and Rehab, deduce that prejudice impermissibly colored the verdict? Alternatively, it may be inquired whether there exists evidence of a “passion” based solely on the actions exhibited by this jury in rendering its verdict. If it does, a pall of doubt has been cast on the verdict and a new trial must be granted.

The central problem with the first of these arguments parallels the problems encountered in treating the September 11 attack and the bomb-threat as extraneous events: namely, the matter of competent evidence. Putting aside, as a court must, the allegations of what went on inside the deliberation room, no evidence remains of racial prejudice On the part of this jury. Moreover, although in popular parlance the phrase “prejudice” has become synonymous with, if not identical to, the notion of racial prejudice and bigotry, it is fair to say that a different meaning is ascribed to the word in the context of the law, more generally, and in the conduct of trials, more specifically. As the term has been used in the case law concerning the granting of new trials, “prejudice” is used in the more literal sense of something that would predispose a fact-finder to decide one way or another, irrespective of the evidence.

Accordingly, in cases that have found cause for a new trial on grounds of prejudice, the courts have been able to point to some objectively verifiable external circumstance impinging upon a specific juror that would have the logical result of causing a typical juror to be biased in his determination of the relevant facts. See e.g., Commonwealth v. Cornitcher, 447 Pa. 539, 291 A.2d 521 (1972) (juror was robbed in same vicinity and manner as murder at issue in trial in which she sat as fact-finder) and Fletcher v. Cavell, 287 F.2d 792 (3d Cir. 1961) (juror was later ascertained to be son-in-law of prosecution witness). This is something quite apart from proffered evidence that individual jurors held mental biases or indulged in racial prejudices. The latter, be it ever so disturbing, relates to internal mental processes. As such, they are off-limits when it comes to scrutiny of verdicts and, consequently, there is no possible way to receive evidence of juror prejudice in this manner.

Therefore, while a court can take cognizance of a verdict which it has determined to be inadequate as matter of law, without competent evidence linking this outcome to “prejudice,” a new trial may not be granted on that ground. That is, inadequacy of a verdict does not lead one ineluctably to the conclusion that racial prejudice infected the verdict. There is a syllogistic leap in such a determination which is not allowed.

The same outcome, however, does not follow with respect to “passion,” when that word is understood in its normal meaning as the antithesis of reason and prudence. Here, it is clear that, at least with respect to Hiyam, who suffered broken bones, and Rehab, who sustained a deviated septum, the jury wantonly disregarded the law in awarding zero damages. Admittedly, it may well be tautological to find that the jury’s error in failing to award damages to Hiyam and Rehab serves as additional evidence of caprice toward these same plaintiffs. Separate grounds for a new trial in such a circumstance would really not be separate at all; the same actions, if found under one theory, support the outcome in the other. Conversely, if they are discounted in one, they must also be discounted in the other.

The same circularity does not arise, however, if the court concludes, as it must, that the wanton disregard of the law in the jury’s consideration of Hiyam’s and Rehab’s injuries evidenced an absence of reason and spirit of caprice so pervasive that it tainted the outcome with respect to all of the plaintiffs. That is the unavoidable conclusion in the present case. This jury was clearly instructed that “defendant was responsible for causing the accident” (N.T. 10/1/01 at 18) and if defendant is found liable to the plaintiff “you must then find an amount of money damages that you believe will fairly and adequately compensate each plaintiff for all physical and financial injury he has sustained as a result of the accident.” (Id. at 23.) The jury was then instructed as to the particulars of past pain and suffering, future pain and suffering, embarrassment and humiliation, disfigurement, enjoyment of life, and loss of consortium. (Id. at 23-25.)

While it is true that, based on the evidence presented, the jury was not required to award damages for future pain and suffering or embarrassment and humiliation, no other possible intervening cause was presented to this jury for the physical injuries alleged to have resulted from the crash; therefore, in blatant disregard of the law on which it was so instructed, it ignored uncontroverted evidence of broken bones and returned a verdict in the amount of zero damages.

The only plausible explanation, and one which I am compelled to adopt as my own, is that an air of passion, illogic, or capriciousness clouded the judgment of this jury. Accordingly, plaintiffs George Tabchi, Resam Tabchi and Simon Tabchi are granted a new trial on the grounds that this jury, by wholly disregarding unassailable evidence of uncontested serious injuries sustained by plaintiffs Hiyam and Rehab Tabchi, demonstrated an unreasoned or “passionate” approach that cannot be gainsaid to have infected the entire outcome of this trial.

V. CONCLUSION

In order to foster the climate necessary for jury deliberations, longstanding safeguards have been erected that place the reasoning processes undertaken by jurors off-limits from retrospective scrutiny. This is so even when the most atrocious allegations of what went on during that process have been made. The fact that prejudice cannot be proved in certain ways does not mean, however, that society must live with unjust results or that such prejudice must be institutionalized. Rather, to protect the sanctity of the deliberative process, we are properly limited in the evidence we can entertain and the standards under which we can impugn jury verdicts. When it is apparent by competent evidence, however, that a verdict is the product of passion, partiality, prejudice or corruption, or where it is against the clear weight of the evidence, a court is empowered and, indeed, is obligated to cast the verdict aside and grant a new trial.

In light of this, and for the reasons stated above, a new trial is granted to plaintiffs Hiyam, George, and Rehab Tabchi because the verdict was shocking to the conscience and against the clear weight of the evidence. Furthermore, in light of the illogic and passion evidenced by the jury in its failure to find compensable damages with respect to the claims of plaintiffs Hiyam and Rehab Tabchi, passion is held to have permeated the entire verdict of the jury. Therefore, a new trial is granted to plaintiffs Resam, Simon, and George Tabchi on this separate ground.

ORDER

And now, April 11,2002, upon consideration of plaintiffs’ motion for a new trial and judgment n.o.v., and brief in support thereof, filed on October 10, 2001, and defendant’s brief in opposition thereto, filed on January 11,2002, and after argument held on March 8,2002, and for the reasons set forth in the accompanying opinion, it is ordered that plaintiffs’ motion for judgment n.o.v. is denied;

It is further ordered that plaintiffs’ motion for a new trial is granted, and a new trial shall be had on the issue of damages.

      . There is no basis to believe that the bomb-threat was related to this case. The courthouse had been the subject of a number of similar threats throughout 2001.

      . As noted above, plaintiffs initially moved for judgment n.o.v. as well. At oral argument, however, plaintiffs’ counsel conceded that a factual issue concerning the amount of damages would remain even if the jury’s verdict were to be discounted. Irrespective of whether counsel’s admission rises to the level of stipulation, it remains true that judgment n.o.v. can only be granted when there exists no genuine issue of material fact which, if decided in favor of the victor at trial, could support the verdict, thus entitling the losing party to judgment as a matter of law. Moure v. Raeuchle, 529 Pa. 394, 402, 604 A.2d 1003, 1007 (1992). It is apparent that even if it is decided that this jury’s verdict cannot be reconciled with the evidence it considered, a question of fact as to the extent, if not the existence, of damages still remains. Thus, judgment n.o.v. would not be an appropriate remedy here.

      . The Supreme Court revisited this issue yet again in Davis v. Mullen, 565 Pa. 386, 773 A.2d 764 (2001). Although defense counsel stressed at oral argument that Davis represents a subsuming of the objective-subjective distinction under the rubric of credibility of witnesses, such is not the case. The only thing that Davis adds to the analysis is a rejection of a per se rule that if medical expenses are awarded, a jury must also award pain and suffering. Id. at 396, 773 A.2d at 769. Instead, the court held that a jury may award the former and decline the latter if (1) it did not believe that the plaintiff suffered any pain and suffering and/or (2) a pre-existing condition or injury was the sole cause of the alleged pain and suffering. Id. at 396-97, 773 A.2d at 770. It must be noted, however, that nothing in Davis overruled the objective-subjective test outlined in Neison that is to be used to determine when a jury must, in fact, find pain and suffering based on the nature of the injury as opposed to the mere existence of medical expenses. That is, Davis merely made clear that an expense will be incurred for medical treatment no matter how light or grave the injury; thus, this cost alone cannot be dispositive of pain and suffering. Instead, one must turn to Neison for continuing guidance in this realm. Cf. Majczykv. Oesch, 789 A.2d 717 (Pa. Super. 2001) (ApplyingDavis, without addressing objective-subjective distinction, to hold that it is within purview of jury to discount alleged soft-tissue injury stemming from five-mile-per-hour “bump” at traffic light.).

      . Plaintiffs also point out that several of the injuries were also conceded by defense counsel in closing argument. (N.T. 10/1/2001 at 4-7 and 30.) Because closing arguments are not evidentiary in nature, the jury cannot be specifically faulted for failing to accord weight to any characterizations of the evidence contained therein. Nevertheless, nothing prevents a court from taking note of such concessions in considering the overall reasonableness of the jury’s verdict. See e.g., Hawley, 416 Pa. Super. at 473, 611 A.2d at 313 (In granting a new trial, the Superior Court noted that “counsel recognized the existence of. .. pain in his closing argument.”).

      . Plaintiff George Tabchi settled his personal-injury claims against defendant out of court.

      . The “Mansfield Rule” derived from the then-reigning principle that a man could not be heard to allege his own turpitude — nemo turpitudinem suam allegans audietur. Id.

      . Note that it is not at all evident nor is it held here that such background events are tantamount to the bona fide external influences recognized in the case law, supra, such as a television broadcast and visits to an accident or crime scene. But because the overarching question of improper influence can be adequately disposed of on the second, objective, prong of the Carter test, the specific issue of whether the background events which existed here actually constitute extraneous influences need not be reached.

      . It will be noted that these are criminal cases. Pennsylvania, however, incorporates the same due process concerns regarding impartiality of jurors into civil as well as criminal proceedings. See e.g., McHugh v. Procter & Gamble Paper Products, 776 A.2d. 266 (Pa. Super. 2001) (granting new trial in civil matter on grounds of juror prejudice and citing criminal cases in support thereof).

      . To elaborate a bit further, one readily thinks of the jury or the fact-finder as a ^passionate investigator of truth. Passion, connotes the very opposite: one given to emotion, caprice, or illogic. And this provides grounds for a new trial independent of a verdict found to be against the weight of the evidence. See e.g., First National Bank of Altoona v. Turchetta, 407 Pa. 511, 181 A.2d 285, 288 (1962) (A “perverse or capricious verdict or one plainly against the weight of the evidence ought not to be allowed to stand.” (emphasis added)).