text:
    Board of Property, Assessment, Appeals, Review and Registry of Allegheny County v. Allegheny County

      C.P. of Allegheny County,
    no. GD00-12360.

      Craig C. Stephens and Ira Weiss, for plaintiffs.

      Terrence F. McVerry, for defendants.
    August 9, 2000
   WETTICK, J.,

In this lawsuit brought pursuant to the Declaratory Judgments Act (42 Pa.C.S. §7531 et seq.), the Board of Property Assessment, Appeals, Review and Registry of Allegheny County and the seven members of the assessment board request this court to declare that county legislation creating a different assessment system violates state law.

My starting point for discussing the legal issues raised in this lawsuit is an April 18,1997 opinion that I authored in Miller v. Board of Property Assessment, Appeals and Review of Allegheny County, 145 P.L.J. 501 (1997).

In that litigation, I addressed the issue of whether the county had unlawfully interfered with and usurped the role of the assessment board by operating the county’s assessment system and by limiting the role of the assessment board to hearing appeals. The evidence established that a county director who was not selected by and did not report to the assessment board was managing the county’s assessment system. I ruled that the county’s management of the assessment system violated the Second Class County Assessment Law under which the legislature had placed the responsibility for making and supervising assessments in the hands of the assessment board. I stated that the “legislature has determined that an assessment system is likely to have greater integrity, consistency, and stability if the assessment system is operated by an independent board rather than the board of county commissioners or another county official. Consequently, plaintiffs are entitled to pay taxes based on a system operated and supervised by an independent assessment board.” Id. at 506. (footnote omitted) The court order which I entered decreed that (1) it is the exclusive responsibility and the duty of the assessment board to make, revise, and equalize all assessments; (2) it is the duty of the assessment board to hire an adequate staff to operate an assessment system that makes, revises, and equalizes assessments on an annual basis; and (3) it is the responsibility of the county to provide appropriate funds for the adequate operation of an assessment system.

Through the Act of May 20, 1997, P.L. 149, 16 PS. §6101-C et seq., the legislature enacted the Second Class County Charter Law which permits the governing body of a second class county to establish a charter drafting committee to prepare a charter consistent with the legislation for submission to the voters of the county. On May 19, 1998, the voters of Allegheny County approved the proposed Home Rule Charter that had been adopted by the charter drafting committee.

The Home Rule Charter contains the following provision concerning the existence of an assessment board:

“There shall be a Board of Property Assessment, Appeals and Review consisting of seven members. The board shall exercise all powers and duties that the county’s Board of Property Assessment, Appeals and Review had before the effective date of this charter unless those powers and duties are modified by ordinance or by law. Consistent with the laws of the Commonwealth of Pennsylvania, the county’s assessment system shall meet accepted assessment standards and shall ensure access to public records regarding assessments.” Allegheny County Home Rule Charter, art. X, §5.

On June 27,2000, county council enacted bill no. 0071. The chief executive approved this bill on July 6, 2000 and it became County Ordinance no. 15. Ordinance no. 15 adds three chapters to the Administrative Code: chapter 205 — Property Assessment Oversight Board; chapter 207 — New Board of Property Assessment Appeals and Review; and chapter 209 — Office of Property Assessments.

Ordinance no. 15 creates a new assessment system that differs from the assessment system mandated by the Second Class County Assessment Law (Act of June 21, 1939, PL. 626,72 P.S. §5452.1 et seq.). The new system replaces the existing assessment board with three entities that will perform the various functions that are now performed under the Second Class County Assessment Law by the assessment board. Chapter 205 creates a Property Assessment Oversight Board that recommends assessment standards and practices to county council, that confirms or rejects the appointment of the chief assessment officer, and that certifies that assessments determined by the Office of Property Assessment have been made in accordance with the county’s Assessment Standards and Practices Ordinance. This board consists of three members: the president of county council or his or her designee; the chief executive or his or her designee; and a person who has at least 10 years practical experience as a real estate broker appointed by the chief executive with the consent of county council.

Chapter 207 creates a new Board of Property Assessment Appeals and Review whose duties are limited to the oversight of assessment appeals, including the hearing of appeals. Four members of the board are appointed by county council and three members are appointed by the chief executive with the consent of county council. Terms are for three years and are staggered.

Chapter 209 creates an Office of Property Assessments that makes and supervises the making of all assessments and valuations of all subjects of real property taxation and makes initial recommendations to the new Board of Property Assessment Appeals and Review of the tax-exempt status of real property. This office is located in the executive branch and the chief assessment officer reports to the manager. The chief assessment officer is appointed by the manager with the consent of the Property Assessment Oversight Board.

The differences between the assessment system provided for by the Second Class County Assessment Law and the assessment system created through ordinance no. 15 are material. Under the Second Class County Assessment Law, an assessment board made up of seven members with six-year staggered terms has responsibility for the oversight function, assessment appeals, and the hiring (possibly with the approval of the county manager) of the manager of the property assessment office. Under the Second Class County Assessment Law, the office of property assessment is controlled by the assessment board rather than by the executive or legislative branches of county government.

The briefs submitted by both parties suggest that one system (second class county assessment legislation) or the other system (ordinance no. 15) is far preferable. I am told that ordinance no. 15 does not provide protections from abuse by elected officials that an independent assessment board provides. Alternatively, I am told that the county cannot have an efficient, economic, and effective assessment system unless control over this system is exercised by the persons who manage the county. Obviously, this case has nothing to do with whether or not I believe that ordinance no. 15 is preferable to the current system. The issue is who makes the decisions concerning the structure of the assessment system for Allegheny County. This is a legal issue that is unrelated to the wisdom of ordinance no. 15’s assessment system.

At the time I decided the Miller case, Allegheny County was not a home rule municipality. Consequently, it was required to follow the provisions of the Second Class County Assessment Law. It had no authority to deviate from state law.

Since Allegheny County is now a home rule municipality, in many instances it can enact laws that deviate from state laws governing second class counties. Consequently, my Miller opinion is relevant only with respect to my interpretation of the Second Class County Assessment Law. Unless the county is permitted, by virtue of its status as a home rule municipality, to enact laws that deviate from the Second Class County Assessment Law, ordinance no. 15 is invalid because it removes the responsibility for the operation of the assessment system from the assessment board.

The authority of a municipality which has adopted a Home Rule Charter to enact legislation is governed by Article IX, Section 2 of the Pennsylvania Constitution which provides:

“A municipality which has adopted a Home Rule Charter may exercise any powers and perform any function not denied by this constitution, by its Home Rule Charter or by the General Assembly at any time.” Pa. Const. Art. IX, Section 2.

Ordinance no. 15 does not involve an exercise of any power or the performance of any function barred by the Constitution of Pennsylvania or barred by the county’s Home Rule Charter. Consequently, the issue is whether through the enactment of ordinance no. 15, Allegheny County is exercising powers or performing functions denied by the General Assembly.

I initially consider whether ordinance no. 15 is creating an assessment system that conflicts with any statewide standards for the assessment of property.

The provisions of the Second Class County Assessment Law that place the management of the county’s assessment system in the hands of a seven person assessment board whose members have staggered six-year terms is not found in other assessment legislation. In first class counties, appeals are heard by a seven-member board of revision of taxes who are appointed by the common pleas court for six-year terms. Act of June 27,1939, P.L. 1199, §2, 72 P.S. §5341.2. However, the council of the City of Philadelphia, with the approval of the electorate, has the power to legislate “with respect to the making of assessments of real and personal property as provided by the Act of Assembly.” Act of August 26, 1953, P.L. 1476, §2, as amended by the Act of August 13, 1963, PL. 795, 53 P.S. §13132(c). The assessment legislation governing second class A and third class counties provides for a board of assessment composed of three members appointed by the county commissioners who serve for terms of four years; this legislation does not require staggered terms. Act of June 26,1931, P.L. 1379, §1, as amended, 72 P.S. §5342(a). The Fourth to Eighth Class County Assessment Law creates a board of assessment which is composed of the three county commissioners (or if the county commissioners wish, a board consisting of three members whom they appoint to serve for terms which expire concurrently with the terms of the county commissioners making the appointments). Act of May 21,1943, P.L. 571, art. Ill, §301, as amended, 72 P.S. §5433.301. The county commissioners, or the persons whom they appoint, are authorized to operate the assessment system and hear appeals.

When there is no uniform statewide approach to a matter, the purpose of the home rule provision of the state constitution (Article 9, Section 2) and the Home Rule Charter and Optional Plans Law (53 Pa.C.S. §2901 et seq.) is to permit a home rule municipality to devise its own approach to the matter. Home rule is the solution to the concern that Allegheny County legislators should not be enacting legislation applicable only to Philadelphia and vice versa. Thus, where the legislature devises an approach applicable only to second class counties, and in the absence of specific legislation to the contrary, the law governing home rule intends to permit the home rule municipality to substitute the judgment of the home rule municipality’s elected officials for the judgment of the state legislators.

The final issue is whether there is any state legislation that specifically preserves those provisions of the second class county assessment law which place in the assessment board the responsibility for operating the assessment system (i.e., the setting of property values) and for establishing procedures for assessment appeals, including the hearing of appeals. Plaintiffs rely on the following charter limitation set forth in the Second Class County Charter Law:

“(h) With respect to the following subjects, the charter shall not give any power or authority to the county contrary to, or in limitation or enlargement of, powers granted by acts of the General Assembly which are applicable to counties of the second class: ...

“(8) The assessment of real or personal property and persons for taxation purposes.” 16 P.S. §6107-C(h)(8).

This provision is ambiguous: (1) it may refer only to state laws describing how real or personal property and persons are to be assessed for taxation purposes (example — state legislation addresses the manner by which an assessed value is to be determined (72 P.S. §5452.4(a)-(a.3))); (2) it may or may not also include state laws governing assessment appeals; and (3) it may or may not also include state laws involving the management and operation of the assessment system.

The Second Class County Assessment Law provides that the members of the assessment board shall be appointed by the county commissioners. 72 P.S. §5452.2 (b). The Second Class County Charter Law abolishes the board of county commissioners; it requires any proposed charter to provide for an elected county executive and an elected legislative council. 16 P.S. §6105-C(a). Consequently, because of this failure to address the manner in which the assessment board would be appointed once the board of county commissioners was abolished, it can be argued that through section 6107-C(h)(8) the legislature only intended to preserve those aspects of state legislation that are not related to the assessment board. This argument would, in fact, have considerable merit if the language of section 6107-C(h)(8) appeared only in the Second Class County Charter Law.

However, section 6107-C(h)(8) is a borrowed provision. The City-County Consolidation Amendment of the Pennsylvania Constitution (adding Section 8 to Article XIV, now found at Pa. Const. Art. IX, Section 13) transferred to the City of Philadelphia all functions previously performed by the government of Philadelphia County. Section 18 of the 1949 First Class City Home Rule Act, Act of April 21, 1949, P.L. 665, §18, 53 P.S. §3421.18 (now 53 P.S. §13133), stated that a first class city shall not exercise powers contrary to or in limitation or enlargement of powers granted by Acts of the General Assembly on the following subjects: “(9) Providing for the assessment of real or personal property and persons for taxation purposes.” 53 P.S. §13133(a)(9).

Section 6107-C(h) lists 10 subjects for which the charter shall not give any power or authority to the county contrary to or in limitation or enlargement of the powers granted by the Acts of General Assembly which are applicable to the counties of the second class. The Home Rule Charter and Optional Plan Law (Act of April 13, 1972, no. 62, as amended, 53 Pa.C.S. §2901 et seq.) applicable to all municipalities except cities and counties of the first class (53 Pa.C.S. §2901 et seq.) contains the identical ten subjects including: “(8) The assessment of real property or personal property and persons for taxation purposes.” 53 Pa.C.S. §2962.

Consequently, in enacting section 6107-C(h) the legislature was simply using language that it had used in home rule legislation applicable to all municipalities except cities and counties of the first class. Thus, it is unlikely that the legislature was looking at the specific way in which section 6107-C(h) (8) might impact on the Second Class County Assessment Law. Instead, it intended for section 6107-C(h) (8) to have the same impact on assessment legislation governing Allegheny County as the identical provision in legislation governing all counties in the Commonwealth other than Philadelphia had on assessment legislation governing these other counties.

Because section 6107-C(h)(8) is not unique to second class counties, the question is not what aspects of the assessment law unique to second class counties did the legislature intend to preserve. Instead, the question is what aspects of the assessment laws governing all counties (other than counties/cities of the first class) did the legislature intend to preserve through the language that a home rule municipality shall not enact any legislation that alters state legislation on the following subject: “(8) The assessment of real or personal property and persons for taxation purposes.”

The parties have cited only a single case that has addressed the meaning of this language. Lennox v. Clark, supra. In that case, the court considered the City-County Consolidation Amendment of the Pennsylvania Constitution which provided that county offices of first class counties were now city offices. The city contended that various provisions within the Philadelphia Home Rule Charter (including the civil service provisions of the charter and the charter’s prohibitions against political activities by officers and employees of the city) now applied to employees of various offices that had not previously been city offices, including the board of revision of taxes governed by the Act of June 27,1939, PL. 1199, 53 P.S. §4805.1 et seq. (now 53 PS. §5341.1 et seq.).

The board of revision of taxes argued that it was a state agency and therefore not affected by the City-County Consolidation Amendment. The court rejected that argument stating that in 60 of the 67 counties of the state {i.e., counties of the fourth, fifth, sixth, seventh and eighth classes) the assessment of property is in the hands of the county commissioners, and in six counties (counties of the second class and counties of the third class) the assessments are made by a board appointed by the county commissioners. Therefore, in all counties of the state other than Philadelphia the assessment of property has thus been directly recognized by the legislature as being a purely county function. The court stated that “Performing, therefore, a purely local function upon which the entire fiscal system of Philadelphia is dependent, there is no ground whatever for viewing the board other than as a county office, and, as such, transformed by the City-County Consolidation Amendment into a city office.” 372 Pa. at 376, 93 A.2d at 844.

The second argument of the board of revision of taxes relied on section 18 of the Home Rule Act which provided that no city shall exercise powers contrary to or in limitation or enlargement of powers granted by the Acts of the General Assembly which are applicable to the following subject: “(9) Providing for the assessment of real or personal property and persons for taxation purposes.” The board argued that the city could not exercise power of any kind over the board because of this provision. The Supreme Court responded as follows:

“It is argued that because of this provision the city can exercise no power of any kind over the board of revision of taxes. Such a contention scarcely merits discussion. What was obviously intended by that provision of the statute was that the city should not have the power to legislate in regard to the substantive rules governing the making of assessments and valuations of property. For example, the city cannot change the provision of section 13 of the Act of 1939 (under which the board now operates) that all taxable property shall be valued and assessed by the assessors and by the board at the actual value thereof, in determining which the price for which it would [sic] bona fide sell shall be considered but shall not be controlling. But the provision of the Home Rule Act in question makes no reference whatever to the per sonnel of the board and effects no limitation of the powers of the city in regard thereto.” 372 Pa. at 376-77, 93 A.2d at 844. (emphasis in original)

The Lennox opinion is important because it suggests that language identical to 16 P.S. §6107-C(h)(8) and 53 Pa.C.S. §2962(a)(8) may only bar a home rule municipality from enacting legislation concerning the manner in which assessments and valuations of property shall be made (i.e., how property is valued) as opposed to who values the property or hears assessment appeals. The county contends that Lennox goes further. According to the county, Lennox holds that language identical to 16 P.S. §6107-C(h)(8), 53 Pa.C.S. §2962(a)(8) does not cover state legislation addressing the management of the assessment system or assessment appeals. I disagree. The court in Lennox was not considering City of Philadelphia legislation that sought to modify the provisions of the state legislation giving to the board of revision of taxes the authority to establish and operate the assessment system and procedures for the appeal of an assessment, including the hearing of assessment appeals.

Approximately a year and a half after the Lennox decision, Philadelphia City Council passed an ordinance which abolished the board of revision of taxes. In Commonwealth ex rel. Truscott v. City of Philadelphia, 122 Pa. 292, 111 A.2d 136 (1955), the Pennsylvania Supreme Court ruled that the ordinance violated the City-County Consolidation Amendment of the Pennsylvania Constitution. The amendment which permitted Philadelphia to adopt a charter in which all county officers would become officers of the city contained a provision which stated that until the General Assembly shall otherwise provide, all county officers shall continue to perform their duties in such a manner as provided for by the laws of the Commonwealth in effect at the time the amendment becomes effective. The court held that this provision barred city council, without a future act of the legislature, from passing an ordinance that abolished or reorganized the board of revision of taxes. (This opinion never considered section 18(9) of the Home Rule Act which might also have been cited if the court believed that it preserved the board of revision of taxes.)

This ruling has no relevance to the present litigation because there are no provisions in the Pennsylvania Constitution or state legislation imposing any restrictions on Allegheny County with respect to the Second Class County Assessment Law other than section 6107-C(h)(8).

As I previously stated, the identical restrictions in the Home Rule Charter and Optional Plans Law governing all municipalities and the Home Rule Law for second class counties barring a home rule municipality from enacting legislation governing the “assessment of real or personal property and persons for taxation purposes” should be construed in the same fashion because there is no basis for believing that the legislature would have intended for these identical provisions to be construed differently, depending upon whether the municipality had been governed by the Second Class County Assessment Law or assessment laws applicable to other counties. If the legislature had intended to treat second class counties in a different fashion from second class A and third class through eighth class counties, it would have enacted special legislation supplementing section 6107-C(h)(8) in the same manner in which it had adopted special legislation for first class counties and cities.

The legislature would have not intended for 16 P.S. §6107-C(h)(8), 53 Pa.C.S. §2962(a)(8) to bar home rule municipalities from altering provisions of the state assessment laws addressing the manner in which the county’s assessment system will be managed or addressing the mechanism for assessment appeals, including the body that will hear the appeal, unless the legislature had created statewide approaches that it may have sought to preserve. As I previously discussed at pages 7-8 of this opinion, this is not the case. At the time the legislature enacted 53 Pa.C.S. §2962(a)(8) in 1972 as well as at the time it enacted 16 P.S. §6107-C(h)(8) in 1997, it had already adopted three substantially different approaches to the management of the assessment system and the appeals process. In second class counties, through legislation enacted on June 21, 1939, both functions are the responsibility of a seven-person board that is not directly controlled by the board of county commissioners because of a provision for staggered six-year terms. In fourth through eighth class counties, on the other hand, through legislation enacted on May 21, 1943, county commissioners are given full control over the assessment system, including the hearing of appeals. There is a third approach for counties and cities of the first class. Through legislation enacted on June 27, 1939, appeals are heard by a board over which elected county officials have no control because its members are appointed by the judiciary. However, through legislation enacted on August 13,1963, with the approval of the electorate, control over the operation of the assessment system may be exercised fully by elected city officials.

Plaintiffs argue that it was important to the legislature to preserve the system created in the Second Class County Assessment Law that places the entire assessment process in the hands of a body that is somewhat independent of the governing body that depends upon the assessments for its revenues. However, if this was important to the legislature, it would not have enacted an assessment law governing more than 50 counties that gives complete control over the assessment system to the county commissioners. Furthermore, if independence is important to the legislature, it would not want 53 Pa.C.S. §2962(a)(8) to be construed to bar home rule counties that would otherwise be governed by the Fourth to Eighth Class Assessment Law from enacting codes that place assessment functions in the hands of a more independent body.

There is no reason why the legislature would have intended for 16P.S. §6107-C(h)(8), 53 Pa.C.S. §2962(a) (8) to be construed in any manner broader than that suggested by the Lennox case: the preservation of state laws governing the manner in which assessors value property. Since management of the assessment systems of the various counties is governed by local laws with very different approaches, the legislature would not have intended to force home rule municipalities to be bound by these local laws. The purpose of home rule is to transfer from the legislature to the municipality the ability to legislate matters that have previously been governed by local laws enacted by the General Assembly.

Finally, the issue in this case is how to construe an act of the General Assembly. Through the adoption of the Home Rule Charter and Optional Plan Law, the General Assembly has advised the courts that in construing its laws, courts should rule in favor of the municipality where there is ambiguity:

“All grants of municipal power to municipalities governed by a Home Rule Charter under the subchapter, whether in the form of specific enumeration or general terms, shall be liberally construed in favor of the municipality.” 53 Pa.C.S. §2961.

For these reasons, I enter the following order of court:

ORDER

On August 9, 2000, it is hereby ordered, adjudged, and decreed that the provisions of the Administrative Code of Allegheny County abolishing the Board of Property Assessment, Appeals, Review and Registry of Allegheny County do not violate the Pennsylvania Constitution, any state laws, or the Allegheny County Home Rule Charter.

      . See Lennox v. Clark, 372 Pa. 355, 376, 93 A.2d 834, 844 (1953).

      . Section 2962(a)(8) was included in the Act of April 13, 1972.

      . Subsequently, on August 13, 1963, the General Assembly enacted legislation which permits the council of the City of Philadelphia, with the approval of the electorate, to enact legislation concerning the board of revision of taxes “with respect to the making of assessments of real and personal property as provided by the Act of Assembly.” 53 P.S. §13132(c).

      . The legislation governing second class A and third class counties is somewhere in between the second class and fourth to eighth class county assessment laws. There is a three-member board whose members are appointed by the county commissioners to serve for four years. Vacancies are filled by the commissioners for the unexpired terms. The terms are not staggered — the terms appear to coincide with the terms of the county commissioners.

      . The Lennox case stated that in 60 of the 67 counties, assessment of property was in the hands of the county commissioners; presently, 51 counties are governed by the Fourth to Eighth Class County Assessment Law.


source: Caselaw Access Project

author: VOGEL, S.J.,

license: Public Domain

text:
    Clarke v. Valley Forge Sheraton

      C.P. of Montgomery County,
    no. 95-19581.

      Wayne A. Ely and Robert P. Murphy, for plaintiff.

      Donna L. Adelsberger, for defendants.
    January 12, 2001
   VOGEL, S.J.,

FINDINGS OF FACT

(1) On March 5,1994, plaintiff, Susan B. Clarke (now known as Susan B. Clarke-Lane), slipped, fell, and was injured on the premises controlled by defendants. Plaintiff is referred to hereafter as “plaintiff’ or “Ms. Clarke.” Defendants are referred to hereafter as “Valley Forge Sheraton,” “the Sheraton,” or “defendant.”

(2) Defendant, Wyndham Hotel Company Ltd., which does business as the Valley Forge Sheraton, operates the Valley Forge Sheraton Hotel on land owned by defendant VFPA Grantor Trust.

(3) The parking lot at the Valley Forge Sheraton is terraced, with two head-in parking lanes on each level. Between each level is a grass covered slope. At approximately the center of each grass covered slope there is a set of wooden steps made of railroad ties that normally provide access to each level,

(4) There are also railroad ties located along the border of the grassy area at the front of each parking space.

(5) The railroad tie steps are regarded by the Sheraton maintenance staff as walkways, and were typically cleared of snow along with other paths and sidewalks.

(6) On March 2, 1994, it snowed in the area. The Sheraton’s maintenance records show that on that date all walks were shoveled and salted. The Sheraton’s groundskeeper believed the railroad tie stairways had been shoveled, but apparently were not. The blacktop area of the parking lot was also plowed.

(7) On March 5,1994, the Sheraton’s parking lot was wet and slushy in spots. These macadamed areas were essentially as clear as they could be, given the weather conditions and traffic on the lot. The grassy areas between the terraces, including the railroad tie stairways, were snow covered, and in spots had piles of shoveled snow which were placed there in clearing the parking lot.

(8) The failure to shovel these railroad tie stairs forced invitees to seek alternative routes to their vehicles.

(9) At approximately 2 p.m. on March 5, 1994, Ms. Clarke arrived by automobile at the Sheraton, with her friend, Marion R. Roth, to attend a show and sale of Indian arts and crafts.

(10) There were several other shows at the Sheraton that date. The parking lot was crowded, and cars were driving around, looking for parking spaces.

(11) The parking space used by Ms. Clarke and Ms. Roth was roughly aligned with the front door of the Sheraton, separated from it by one grassy area and an area of blacktop.

(12) Ms. Clarke and Ms. Roth entered the Sheraton by walking on the blacktop, around the snow covered grassy area.

(13) They were inside an hour to an hour and a half. Both women made purchases. Ms. Clarke bought a print that was framed and under glass. It was wrapped in brown paper and was approximately 22 by 14 inches in size. When she left the Sheraton she was carrying that print and her handbag.

(14) Rather than use the same route to return to their vehicle that they used to enter the Sheraton, Ms. Clarke and Ms. Roth took the most direct route, across the unknown snow covered grassy area, which is where the snow plows had placed the piles of snow from the parking and driveway areas. They were not aware of the snow covered steps, and did not cross at that location.

(15) Just before she completed crossing the snow covered grassy area, Ms. Clarke tripped, or caught her foot, on one of the railroad ties that bordered the grassy area, and fell.

(16) Ms. Clarke was helped to the automobile by Sheraton security personnel, and was driven to the Suburban General Hospital Emergency Room by Ms. Roth.

(17) Ms. Clarke suffered a bimalleolar fracture of the left ankle. An open reduction and internal fixation of the left ankle with a semi-tubular plate and screws was performed under general anesthesia. A cast was affixed. Ms. Clarke suffered pain and discomfort, and received physical therapy. She lost some time from her job handling marketing and administrative matters for the architectural practice of her husband, Edward M. Lane.

(18) Ms. Clarke had an excellent recovery, although she continues to suffer from occasional pain, and testified that she no longer dances or plays golf.

(19) As discussed more fully below, defendants breached their duty to plaintiff to clear the railroad tie stairways between the terraces of the parking lot, and this breach was a 50 percent causal factor of the harm suffered by plaintiff.

(20) As discussed more fully below, plaintiff also had a duty to exercise due care for her own safety, which she breached by proceeding across a piled snow covered area without knowledge of what was under the snow rather than utilizing the route she used to enter the Sheraton. This breach was a 50 percent causal factor of the harm she suffered.

(21) Plaintiff sustained damages in the amount of $80,000 as a result of the accident.

DISCUSSION

Possessors of land owe a duty to protect invitees from foreseeable harm, but not where the danger is known or obvious to the invitee, unless the possessor should anticipate the harm despite that knowledge or obviousness. Carrender v. Fitterer, 503 Pa. 178, 469 A.2d 120 (1983). The possessor does not have a duty to insure that the premises are ice free. Morin v. Traveler’s Rest Motel Inc., 704 A.2d 1085 (Pa. Super. 1997), allocatur denied, 555 Pa. 708, 728 A.2d 1025 (1998). Nevertheless, we find this case is unlike Gilligan v. Villanova University, 401 Pa. Super. 113, 584 A.2d 1005 (1991), and other cases cited by the plaintiff, which hold that possessors do not have the duty to clear grassy areas.

Not every possessor of land is obligated to clear every sidewalk or pathway, but under the circumstances of this case we find that the Sheraton had a duty to its invitees to keep the stairways between the terraces clear within a reasonable time after the snowfall. This arises from the length of the grassy areas between the terraces, and the generally busy nature of this parking lot that would cause invitees to take shortcuts across the grass. Clearing the railroad tie stairways would provide a safer route for those people. Indeed, the Sheraton recognized that duty and normally removed snow from those stairways. Its groundskeeper believed that they had been cleared after this snowfall. The Sheraton’s failure to perform this duty compelled this invitee to seek an alternative route.

We find no Pennsylvania case precisely on point, but note the decision in Kantorowicz v. VFW Post #230, 349 N.W.2d 597 (Minn. App. 1984). The Legion Post had a parking lot that was not contiguous to the lot where its building stood. The Post was elevated from the lot and sidewalk. On the night of the accident there were three paths worn in the snow on the embankment leading to the sidewalk which led to the Legion Post’s entrance. Plaintiff chose one of those paths rather than the alternative of using a fairly busy street that would have led to the same sidewalk entrance. A verdict finding both the plaintiff and the Legion Post negligent was upheld.

Ms. Clarke was also negligent. She failed to use the obviously safer but longer route she had employed to enter the Sheraton. Instead, burdened with a package and her handbag, she chose the shortest route, through the snow, with no idea what was under it. Pedestrians who choose a snow covered route rather than a safe one can be guilty of negligence which contributes to their harm. See Dwyer v. Port Allegheny Borough, 216 Pa. 22, 64 A. 854 (1906); Rothacker v. Philadelphia, 42 Pa. Super. 408 (1910); Gilligan v. Villanova University, 401 Pa. Super. 113, 584 A.2d 1005 (1991).

In this case we considered the percentage of causal negligence to be equal on the part of the plaintiff and defendants, entitling plaintiff to an award of 50 percent of the total damages we found she suffered as a result of this accident.

CONCLUSIONS OF LAW

(1) Under the circumstances of this case, defendants owed to plaintiff a duty to clear the stairways connecting the terraced levels of the parking lot, which they breached.

(2) Under the circumstances of this case, plaintiff had a duty to proceed along a known, safe route, rather than through the snow, which she breached.

(3) The causal negligence of plaintiff and defendants contributed in equal measure to the happening of this accident.

(4) Under Pennsylvania’s Comparative Negligence Law, plaintiff is entitled to an award of $80,000, however, due to her comparative negligence, a net award in the sum of $40,000.


author: WETTICK, J.,

text:
    Costanzo v. Pennsylvania Turnpike Commission

      C.P. of Allegheny County,
    no. AR00-4706.

      Bryan C. Glass, for plaintiffs.

      Kenneth T Newman, for defendants.
    February 8, 2001
   WETTICK, J.,

Defendants’ motion to disqualify or, in the alternative, to strike expert report is the subject of this opinion and order of court.

Plaintiffs are homeowners whose property is located in the vicinity of a highway project. The installation of the highway involved blasting activities. Plaintiffs contend that the blasting activities caused structural damage to their residence. Plaintiffs have sued to recover damages through a complaint which identifies Bryan C. Glass, Esquire, as counsel of record for plaintiffs.

In preparation for an upcoming arbitration hearing, plaintiffs filed an expert report of “Kenneth P. McKay PE, JD.” Mr. McKay is a professional engineer. In his report, he concluded with a reasonable degree of engineering certainty that the only explanation for structural damage which he observed was the blasting operations conducted in the vicinity of plaintiffs’ property beginning in July 1999 and continuing regularly through the spring of 2000.

Defendants’ motion seeks to disqualify Mr. Glass or to strike Mr. McKay’s expert report because Kenneth P. McKay, the author of the October 11, 2000 expert report, is the principal in the Law Offices of K. Patrick McKay. Plaintiffs retained this law firm to represent them in this lawsuit. Mr. Glass is an associate in Mr. McKay’s law firm.

In November 6, 2000 affidavits, Kenneth P. McKay stated he was paid $400 for his expert services; the fee was paid to Mr. McKay personally, and not to the law firm; he has rendered his services as an unbiased expert and in accordance with the standards required of him as a professional engineer; plaintiffs have retained his law firm on an hourly basis; and his law firm has no contingent interest in the outcome of the case.

Plaintiffs correctly state that case law that previously barred a lawyer from representing a party if another lawyer in his or her law firm would be serving as a witness is based on disciplinary rules that have been superseded by Rule 3.7 of the Pennsylvania Rules of Professional Conduct. Under Rule 3.7(b), a lawyer may now act as an advocate at trial in which another lawyer in that lawyer’s law firm is likely to be called as a witness unless precluded from doing so by Rule 1.7 or Rule 1.9. See my ruling in DavisAir Inc. v. Butler Air Inc., 147 P.L.J. 159, 40 D.&C.4th 403 (1998).

Counsel for plaintiffs states that Rule of Professional Conduct 3.4(b), which provides that payment of compensation to a witness cannot be contingent upon the content of the witness’s testimony or the outcome of the case, is not applicable. Mr. McKay has already been paid for the services that he performed as an expert and the amount of money that the law firm will receive from its representation of plaintiffs is not dependent upon the outcome of the case. I agree.

However, I am granting defendants’ motion barring Mr. McKay from testifying as an expert witness because of other boundaries that would be impermissibly crossed by his law firm serving as counsel in the same case where he is an expert witness.

First, Mr. McKay’s obligations as plaintiffs’ counsel conflict with his obligations as a professional engineer testifying as an expert. As a lawyer for plaintiffs, Mr. McKay is required to take steps that will further plaintiffs’ interests to the full extent permitted by law. If he can in good faith arrive at facts and conclusions that favor his client, he may be expected to do so under the Rules of Professional Conduct. However, the standards required of him as a professional engineer are not the same. As a professional engineer, in all likelihood, he is obligated to make neutral professional judgments that would be no different if he had been retained by defendants rather than plaintiffs.

Second, the attorney-client privilege is at the core of the relationship between an attorney and his or her client. A client is entitled to have his or her attorney structure the representation in a manner that maximizes the protections afforded by the attorney-client privilege. The attorney who selects himself to serve as an expert witness for the client cannot do so; an opposing party is permitted to ask the expert witness to describe all information that was made available to the expert witness, including any conversations that the expert witness had with the party who retained this witness. Assuming other experts are available, there is a conflict of interest because the decision of the lawyer to retain himself/herself as an expert conflicts with the client’s interest in an attorney-client relationship that preserves the attorney-client privilege.

Third, in order to encourage objective testimony, Pennsylvania law provides that an expert witness is immune from civil liability for his or her testimony. See Panitz v. Behrend, 429 Pa. Super. 273, 278, 632 A.2d 562, 564 (1993), where the court said:

“The purpose for the privilege is to preserve the integrity of the judicial process by encouraging full and frank testimony. This was recognized by the Supreme Court of the United States in Briscoe v. LaHue, 460 U.S. 325, [332-33], 103 S.Ct. 1108, [1114], 75 L.Ed.2d 96, [103-104] (1983), where the court said:

“ ‘The claims of the individual must yield to the dictates of public policy, which requires that the paths which lead to the ascertainment of truth should be left as free and unobstructed as possible.’ Calkins v. Sumner, 13 Wis. 193, 197 (1860). A witness’ apprehension of subsequent damages liability might induce two forms of self-censorship. First, witnesses might be reluctant to come forward to testify. See Henderson v. Broomhead, supra, 578-79, 157 Eng.Rep. [964] at 968 [(Ex. 1859)]. And once a witness is on the stand, his testimony might be distorted by the fear of subsequent liability. See Barnes v. McCrate, 32 Me. 442, 446-77 (1851).... A witness who knows that he might be forced to defend a subsequent lawsuit, and perhaps to pay damages, might be inclined to shade his testimony in favor of the potential plaintiff, to magnify uncertainties, and thus to deprive the finder of fact of candid, objective, and undistorted evidence. See Veeder, Absolute Immunity in Defamation: Judicial Proceedings, 9 Colum.L.Rev. 463, 470 (1909).”

The court ruled that the justification for furnishing immunity to witnesses applies to experts hired by a party because:

“There also is no reason for refusing to apply the privilege to friendly experts hired by a party. The policy of encouraging frank and objective testimony, without fear of civil liability therefor, ‘obtains irrespective of the manner by which the witness comes to court.’ Bruce v. Byrne-Stevens & Associates Engineers Inc., supra. 113 Wash.2d [123] at 129, 776 P.2d [666] at 669 [(1989)]. The primary purpose of expert testimony is not to assist one party or another in winning the case but to assist the trier of the facts in understanding complicated matters.” 429 Pa. Super, at 280, 632 A.2d at 565.

Under this case law, an expert witness should not be concerned about what the jury will do. He or she should not be testifying as an advocate but, instead, as a witness who seeks to assist the trier of facts in understanding complicated matters. An. attorney, on the other hand, should care about outcome. Since the attomey/expert witness may believe that he or she has an obligation to the client to arrive at conclusions which favor his or her client if it is professionally possible to do so, the attorney/expert witness is not furnishing the frank and objective testimony that the law requires.

Also, while an expert cannot be sued for furnishing opinion testimony that fails to support the position of the party calling the expert, a law firm can be sued by a former client in a legal malpractice case for pursuing a case that the law firm should not have pursued or for selecting an expert who would, in the end, not be supporting the position of the former client. Where the expert witness is also the lawyer who was representing the former client, the law firm cannot raise the defense that it exercised reasonable care because it did not anticipate the testimony that was offered. The expert witness who is also a member of the law firm representing a party has the same inclination “to shade his testimony in favor of the potential plaintiff, to magnify uncertainties, and thus to deprive the finder of fact of candid, objective, and undistorted evidence” that might exist where the expert witness is not provided with immunity. Consequently, the public policy that expert testimony should be furnished by witnesses who are immune from liability for testimony which they give is not met where the expert witness is one of the attorneys representing a client.

ORDER

On February 8, 2001, it is hereby ordered that defendants’ motion to strike expert report is granted. Arbitration hearing will be held on May 11, 2001 at 9 a.m.


author: DOBSON, J.,

text:
    Manning v. Barber’s Chemicals Inc.

      C.P. of Mercer County,
    no. 1998-3164.

      Richard W. Moroco, for plaintiff.

      William G. McConnell, for defendant.
    December 21, 2000
   DOBSON, J.,

The matter before this court for disposition is plaintiff Robert Manning’s motion for partial summary judgment. For the reasons hereinafter set forth, this court grants Manning’s motion.

Pa.R.C.P. 1035.2 provides that any party may move for summary judgment in whole or in part as a matter of law:

“(1) whenever there is no genuine issue of any material fact as to a necessary element of the cause of action or defense which could be established by additional discovery or expert report, or

“(2) if, after the completion of discovery relevant to the motion, including the production of expert reports, an adverse party who will bear the burden of proof at trial has failed to produce evidence of facts essential to the cause of action or defense which in a jury trial would require the issues to be submitted to a jury.” Pa.R.C.P. 1035.2.

A court may grant a motion for summary judgment only where the right is clear and free from doubt. Ducjai v. Dennis, 540 Pa. 103, 113, 656 A.2d 102, 107 (1995).

“The record must be viewed in the light most favorable to the nonmoving party, and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party.” Marks v. Tasman, 527 Pa. 132, 135, 589 A.2d 205, 206 (1991).

The nonmoving party “must adduce sufficient evidence on [all] issue[s] essential to his case on which he bears the burden of proof such that a jury could return a verdict in his favor. Failure to adduce this evidence establishes that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law.” Ertel v. Patriot-News Co., 544 Pa. 93, 101-102, 674 A.2d 1038, 1042 (1996), cert. denied, 519 U.S. 1008 (1996).

Viewed in the light most favorable to the nonmoving party, the facts are summarized as follows: Manning entered into an employment contract along with a stock purchase agreement with Barber’s Chemicals Inc. through its president Edward Earnhardt Jr. on January 1, 1997. These agreements were for a 10-year duration and during that time Manning, as an employee of Barber’s, would purchase 6,800 shares of Barber’s stock by Barber’s allocating a portion of the profits made by the company to Manning’s stock purchase agreement. Pursuant to the stock purchase agreement, Manning would be a 50 percent shareholder of Barber’s by December 31, 2006. Paragraph three of the stock purchase agreement is the most relevant provision to this motion in that it asserts:

“This stock purchase is only for a period of 10 years beginning with the date set forth above and as long as Robert Manning is an employee of Barber’s Chemicals Inc. If Barber’s Chemicals should cancel this agreement or terminate the employment of Robert Manning for any reason or without reason within the 10-year period, Robert Manning will get $72,000 plus the fair market value of his company’s stock that had been purchased to date but only after having first subtracted $642,000 from the fair market value before determining Robert Manning’s proportionate share. Fair market value shall be determined as set forth in paragraph 15.”

On March 30,1998, Earnhardt informed Manning that Barber’s was terminating the stock purchase agreement and canceling Manning’s employment contract. Earnhardt confirmed this termination in writing by letter to Manning dated March 31, 1998. Barber’s did not pay Manning the $72,000 that Manning asserts he is entitled to pursuant to the terms and conditions of the stock purchase agreement. On August 3,1999, Manning filed his amended complaint alleging three counts against Barber’s. It is Count-I, breach of stock purchase agreement, for which Manning brings this motion for partial summary judgment. Manning supports his argument for partial summary judgment by asserting: (1) Barber’s has failed to proffer sufficient evidence which would permit a jury to find that Manning fraudulently misrepresented a material fact which induced Barber’s to enter into the stock purchase agreement; and (2) the record does not contain evidence of facts essential to support Barber’s fraudulent inducement defense to the enforcement of the stock purchase agreement.

Barber’s has asserted in its defense that Manning fraudulently induced Barber’s to execute the stock purchase agreement and therefore the agreement is void. During the negotiation of the employment contract and the stock purchase agreement, Manning made several assertions regarding his ability to increase the sales and profits of Barber’s. Specifically, Manning asserted that he would be able to increase the sales of the company to the extent that the revenues would be sufficient to cover both his additional wage with substantial enough profits to enable him to purchase a 50 percent interest in the business under the formula and over the period of time set forth in the stock purchase agreement. Earnhardt asserted in his affidavit that Barber’s entering into the agreement was based upon Manning’s representations that a large part of the sales and profits were to be forthcoming from opening up a market for the sale of polymers.

Barber’s asserts that the stock purchase agreement was completely based upon Manning purchasing an interest in Barber’s through the profits which Manning represented would be made. Barber’s further asserts that these profits were to be derived from Manning taking over the operation of the business and a large extent of the additional monies was to be obtained through the sale of polymers. Barber’s also contends that a precondition to the sale of the polymers was the expertise and cooperation of Ken Kuszmaul, and such was known by Manning at the time he made his representations as to the increase of sales and profits for Barber’s, but such was unknown to Barber’s at the time of the representations. In response to Manning’s motion for partial summary judgment, Barber’s has alleged the defenses of: (1) failure of consideration; (2) estoppel; (3) fraudulent inducement of the stock purchase agreement; and (4) breach of the implied covenant of good faith and fair dealing.

Barber’s has contended that it was induced to enter into the agreement based upon Manning’s representations as to his ability to increase profits through the introduction of polymer industrial chemicals and the sale thereof, as well as his ability to institute more sophisticated business practices which would provide additional profits resulting in Manning’s ability to purchase stock in Barber’s, and that Manning would devote all of this working time to rendering services to and for the benefit of Barber’s.

Barber’s defense of failure of.consideration is based upon its assertion that its consideration for entering into the stock purchase agreement was based upon Manning’s management of Barber’s creating profits to be used to purchase the company’s stock. Barber’s asserts that under Manning’s management no profits were made, and in fact losses were sustained to the degree that the continuation of the business was jeopardized, therefore, there was no consideration.

Under Pennsylvania law, the requirement of consideration as an essential element of a contract is nothing more than a requirement that there be a bargained for exchange. Cobaugh v. Klick-Lewis Inc., 385 Pa. Super. 587, 591, 561 A.2d 1248, 1250 (1989). Consideration confers a benefit upon the promisor or causes a detriment to the promisee. Id. In this case, Barber’s claims that profitability was the sole consideration to support the stock purchase agreement and the failure to produce a profit as represented resulted in a failure of consideration. This court does not agree that the profitability of Barber’s under Manning’s management was the sole consideration for the stock purchase agreement. The stock purchase agreement was a simple bilateral contract with Manning providing services to Barber’s while in return receiving the right to purchase stock in Barber’s from the profits generated under his management. Barber’s consideration was not the profitability, but rather Manning’s services in exchange for the right to purchase stock. Although Barber’s did not make a profit under Manning’s management, it did have consideration for entering into the stock purchase agreement.

Barber’s also alleges that there are sufficient facts, which if believed, would establish the defense of estoppel. Equitable estoppel is a doctrine of fundamental fairness designed to preclude a party from depriving another of reasonable expectation when the party inducing expectation, albeit gratuitously, knew or should have known that others would rely upon that conduct to his or her detriment. Commonwealth ex rel. Gonzales v. Andreas, 245 Pa. Super. 307, 311-12, 369 A.2d 416, 418 (1976). Barber’s alleges that Manning’s actions, specifically misrepresentations, bad faith and fraudulent inducement, were designed to undermine and destroy Barber’s business and therefore Manning is estopped from enforcing the provisions of the agreement.

Barber’s defense of estoppel is based on Manning’s representations during the negotiation of the stock purchase agreement. Manning asserted that under his management Barber’s would increase its sales, a large part of which would be from the opening of a market for the sale of polymers, to the extent that the revenues would be sufficient to cover his salary with substantial enough profits to enable Manning to purchase a 50 percent interest in Barber’s over the 10-year agreement. Barber’s alleges that such representations were false, in bad faith, and fraudulently induced it into executing the stock purchase agreement. Although neither Barber’s sales nor its profits increased under Manning’s management, there is no evidence produced by Barber’s, or contained in the record to prove, or from which one could reasonably infer, that Manning misrepresented any material statements, acted in bad faith, fraudulently induced Barber’s to enter into the stock purchase agreement, or in any way attempted to undermine or destroy Barber’s. Therefore, Barber’s defense of estoppel is without merit.

Barber’s next defense is that Manning fraudulently induced it to enter into the stock purchase agreement. Barber’s asserts that Earnhardt would not have entered into an agreement to pay Manning $72,000 to manage his business if in fact it was not coexistent with an agreement to purchase the stock interest as represented by the stock purchase agreement, and Earnhardt certainly would not have entered into either of these agreements if he did not accept' the representations made by Manning as to his ability to make sufficient monies to justify both. It has been alleged that Manning, who was experienced in the chemical field, appraised and evaluated Barber’s operations and made material statements about his future performance to induce the agreements. Barber’s also claims that there is sufficient circumstantial evidence to establish that at the time of Manning’s promises, Manning was affiliated with Kuszmaul and Manning’s subsequent relationship with Kuszmaul are strong evidence to the fact that: Manning made misrepresentations, obtained employment, converted business to Kuszmaul, transmitted customer lists to Kuszmaul, and diverted profits to Kuszmaul. Barber’s also claims that it will ultimately be for a jury to decide whether Manning’s representations were fraudulent.

To prove fraud, a plaintiff must demonstrate: (1) a representation; (2) which is material to the transaction at hand; (3) made falsely, with knowledge of its falsity or recklessness as to whether it is true or false; (4) with the intent of misleading another into relying on it; (5) justifiable reliance on the misrepresentation; and (6) the resulting injury was proximately caused by the reliance. Gruenwald v. Advanced Computer Applications Inc., 730 A.2d 1004, 1014 (Pa. Super. 1999); Bortz v. Noon, 556 Pa. 489, 729 A.2d 555, 560 (1999). Where a party is induced to enter into a transaction by means of fraud or material misrepresentation, such a transaction can be avoided by the innocent party. Greenwood v. Kodoich, 239 Pa. Super. 372, 378, 357 A.2d 604, 607 (1976). A misrepresentation is material when it is of such a character that if it had not been made, the transaction would not have been entered into. Id. Whether fraud has been committed is a question of fact which is always a jury question, however, evidence of fraud must be clear and convincing and whether the evidence of fraud meets the required standard which justifies its submission to the jury is always a question of law for the court. Id. at 375-76, 357 A.2d at 606.

In this case, there is no evidence supporting a conclusion that Manning intentionally misrepresented any facts to Barber’s. Although Manning made representations during the negotiation of the stock purchase agreement with regard to his ability to increase the sales and profits, as well as, open up a market in polymers, there is no evidence that Manning made any misrepresentation with knowledge that it was false. There is no evidence to prove that Manning knew that his representations would not come true, nor is there evidence that he made such representations to induce Barber’s to enter into the stock purchase agreement. In fact under Manning’s management, Barber’s did enter into the polymer market but it was limited because Barber’s did not have the technicians to do the testing to determine the correct product for the end customer. Manning was relying on Kuszmaul’s assistance to perform the testing required to market polymers, but after Manning became affiliated with Barber’s he learned that Kuszmaul did not have enough people to devote to Barber’s to assist it. Therefore, since Kuszmaul’s assistance was not available, Barber’s was unsuccessful in the marketing of polymers. There is also no evidence produced by Barber’s, or contained in the record to prove, or from which one could reasonably infer, that Manning made misrepresentations to, or converted business or profits from Barber’s to Kuszmaul during his time with Barber’s.

Breach of a promise to do something in the future is not actionable in fraud. Shoemaker v. Commonwealth Bank, 700 A.2d 1003, 1006 (Pa. Super. 1997). Barber’s bases its fraud claim on Manning’s alleged promise to increase sales and profits on the company, a large portion of which were to be forthcoming from opening up a market for the sales of polymers, to enable him to purchase a 50 percent interest in the company over a 10-year period. Therefore, Manning was promising to do something in the future; thus, Manning’s promise cannot form the basis of a cause of action in fraud. Barber’s final argument in opposition to Manning’s motion for partial summary judgment is that Manning breached the duty of good faith and fair dealing. Barber’s asserts that Manning represented that he would increase the profitability of the business by opening up the polymer market. Barber’s claims that these representations are fraudulent because Manning was unable to open a market in polymers without Kuszmaul’s cooperation and there were only two polymer accounts obtained while Manning was employed by Barber’s.

Every contract in Pennsylvania imposes on each party a duty of good faith and fair dealing in its performance and its enforcement. Donahue v. Federal Express Corp., 753 A.2d 238, 242 (Pa. Super. 2000). The duty of good faith has been defined as “honesty in fact in the conduct or transaction concerned.” Sensenig v. Spring Glen Farm Kitchen Inc., 16 D.& C.4th 394, 397 (1992). In this Commonwealth the duty of good faith has been recognized in limited situations, however, no court in Pennsylvania has found a separate cause of action for breach of the implied covenant of good faith where the employer and employee have entered into a valid employment agreement. Id. at 397-98.

Barber’s argues that Manning breached the implied duty of good faith by failing to increase the profits of the business along with failing to open up the polymer market. If Manning had known that he would be unable to enter into the polymer market prior to entering into the agreement, or if he had discontinued his efforts to increase the profits of the business during his time at Barber’s, Manning would have breached the implied duty of good faith. The record in this case indicates that Manning was not aware that he would be unable to use Kuszmaul’s services as Barber’s supplier to enter into the polymer market prior to entering into the agreement. During Manning’s time at Barber’s a couple of accounts for polymers were opened and Barber’s employees prepared a list of all of the companies or prospective accounts that use polymers. Barber’s did not have the technicians to perform the testing on polymers to determine the correct product for the end customer, therefore it required Kuszmaul’s cooperation.

Manning was relying on assistance from Kuszmaul to perform the technical services to determine the correct product for the end customer. It was not until after Manning began working for Barber’s that he learned that he was not going to get Kuszmaul’s assistance, and Manning was depending on Kuszmaul to sell the polymers. Although Manning was only successful on a couple of occasions, he continued to attempt to break into the polymer market throughout his time with Barber’s. In fact, Barber’s records indicate that Manning contacted Kuszmaul 114 times via telephone in an attempt to do business with polymers. Review of the record in this case does not produce sufficient evidence to warrant a finding that Manning was aware that he could not rely on Kuszmaul’s assistance prior to entering into the agreement. The preparation of the list of potential polymer accounts, along with the number of telephone calls placed to Kuszmaul, indicate that Manning was continuously attempting to have Barber’s break into the polymer market. Barber’s has simply failed to introduce any evidence of record that would indicate that Manning breached his implied duty of good faith or fair dealing to Barber’s.

Since Barber’s has not introduced a genuine issue as to material fact, and the record does not support the aliegations that: (1) Barber’s had no consideration in the agreement; (2) the defense of estoppel applied; (3) Manning fraudulently induced Barber’s into entering into the stock purchase agreement; or (4) Manning breached the implied duty of good faith and fair dealing, the agreement must stand as valid. The stock purchase agreement indicates that if Barber’s canceled that agrément for reason or without reason within the time period, Manning will get $72,000... Therefore, the stock purchase agreement is valid and Manning’s motion for partial summary judgment is granted.

Hence this order:

ORDER

And now, December 21, 2000, it is hereby ordered that plaintiff Robert Manning’s motion for partial summary judgment is granted and judgment in the amount of $72,000 plus interest is entered in favor of the plaintiff and against the defendant, subject to any setoff, determined appropriate at trial.

It is further ordered that this judgment shall not be executed upon subject to final disposition of this case.


author:
BRADLEY, J.,
     BRADLEY,

text:
    Prudential Property and Casualty Insurance Company v. Hasson

      C.P. of Delaware County,
    no. 98-15206.

      Susan Boyer, for plaintiff.

      William E. Averona, for defendants.
    January 29, 2001
    November 2, 2000
   BRADLEY, J.,

Defendants appeal from the judgment entered in favor of plaintiff in this declaratory judgment action. The reason for our determination that the court has subject matter jurisdiction over the controversy and that defendant, Shirley Hasson, is not entitled to coverage for uninsured motorist benefits are set forth in the adjudication entered on the docket on November 6, 2000. A copy of the adjudication is attached.

ADJUDICATION

BRADLEY,

Statement of the Issue

(1) Does the court have subject matter jurisdiction over this action for declaratory judgment?

(2) Is defendant, Shirley Hasson, entitled to coverage for uninsured motorist benefits pursuant to the express terms and definitions set forth in the applicable policy of insurance?

Findings of Fact

(1) Defendants Shirley Hasson and Arthur E. Hasson, II, are husband and wife, residing at 2514 Franklin Avenue, Broomall, Delaware County, Pennsylvania.

(2) This matter involves a claim for uninsured motorist benefits arising out of a motor vehicle accident on December 18,1997 in which Shirley Hasson was injured.

(3) At the time of the accident, Shirley Hasson was driving a 1994 Mazda Protégé which she purchased in 1994. Her ownership of the Mazda is undisputed.

(4) The Mazda is the vehicle she used primarily. Her mother, Janice Yedenock, occasionally drove it. (Hasson deposition, pp. 29-31.)

(5) The Mazda was insured under a policy of insurance maintained by Mrs. Hasson’s mother, Janice Yedenock, through Keystone Insurance Company.

(6) At the time of the accident, Mrs. Hasson’s mother resided at 170 Old State Road in Berwyn.

(7) The Keystone policy did not provide uninsured motorist benefits.

(8) Mrs. Hasson had some knowledge of the Keystone policy as evidenced by her phone call on January 24, 1994 to a Keystone representative, Carol A. Starr, indicating that Hasson called her demanding the same coverages as before.

(9) At the time of the accident, Hasson and her husband maintained a policy of insurance through Prudential Property and Casualty Insurance Company (PRU-PAC) for their 1996 Dodge Stratus and their 1988 Dodge Shadow at their address at 2514 Franklin Avenue in Broomall. The PRUPAC policy was issued to her husband and outlines that a spouse is an insured when a resident of “your” household. (PRUPAC car policy, parts 1, 2 & 3.)

(10) Defendants have admitted that policy no. 282A941505 was in effect at the time of the accident. (Paragraph 5 of plaintiff’s complaint and defendants reply thereto.)

(11) The Hassons sought no coverage from and paid no premiums to PRUPAC for coverages for Mrs. Has-son’s Mazda.

(12) PRUPAC policy no. 282A941505 contains an arbitration clause which states:

“We, PRUPAC, will not arbitrate questions of coverage or law as to whether a person making a claim is covered under the policy or is excluded under the policy. All disputes affecting the scope of the coverage, the amount of coverage, a person’s right or eligibility to make a claim, or the insured’s selection of coverage, will be determined by the court in the county where the insured lives at the same time the demand for arbitration is made; or a federal district court where jurisdiction includes the county were the insured lives. “(Prudential car policy, part V at p.10; Pac-190/PA, Ed. 7/94.)

(13) PRUPAC has denied defendants’ claim based on the following exclusion in the policy:

“We will not pay for bodily injury to anyone occupying or stmck by a motor vehicle owned or leased by you or a household resident which is not insured under this policy.” (Prudential car policy, part 4, uninsured motorist atp. 3.)

Conclusions of Law

(1) The arbitration clause is valid, unambiguous, enforceable and not against public policy.

(2) Even though Shirley Hasson is an insured under the PRUPAC policy, she is not entitled to demand arbitration on account of the specific language, altogether clear and unambiguous, reserving questions of coverage and/or a person’s eligibility to make a claim for the court.

(3) This court has subject matter jurisdiction over this declaratory judgment action pursuant to the arbitration clause.

(4) The exclusion clause is valid, unambiguous, enforceable and not against public policy.

(5) Defendant Shirley Hasson is not entitled to UM coverage pursuant to the express terms of the policy, excluding from coverage bodily injury to anyone occupying a motor vehicle owned by a household resident which is not covered under this policy.

Discussion

The threshold issue to be addressed is whether the court has subject matter jurisdiction over this action for declaratory judgment. It is defendant’s position that the issue of coverage for UM benefits should be submitted to arbitration and not decided by the court. Defendants premise this argument on the holding in Borgia v. Prudential Insurance Company, 561 Pa. 434, 750 A.2d 843 (2000).

In Borgia, an automobile driven by Carmen Borgia Jr. was involved in an accident with another vehicle. Borgia obtained the policy limits covering that other vehicle. Having waived UIM coverage under his own State Farm policy, Borgia attempted to recover UIM benefits under the policy of insurance covering his father’s automobiles (with whom he was living at the time) issued by Prudential. Prudential filed an action for declaratory judgment, seeking an order that Borgia was not a “covered person” under the language of the Prudential policy, and therefore was not entitled to compel arbitration.

The then existing Prudential policy language read as follows:

“If we (Prudential) and a covered person disagree on policy coverages or amounts payable, either party may make a written demand for arbitration.”

After a somewhat lengthy procedural history, the Supreme Court agreed to review the limited issue of whether Borgia was a “covered person” should have been submitted to arbitration. The Supreme Court answered in the affirmative.

Defendants reliance on Borgia is misplaced. First, the arbitration clause in the policy issued to the Hassons is entirely different from the arbitration clause in the Borgia case. The arbitration clause herein reads:

“We, PRUPAC, will not arbitrate questions of coverage or law as to whether a person making a claim is covered under the policy, or is excluded under the policy. All disputes affecting the scope of coverage, the amount of coverage, a person’s right or eligibility to make a claim, or the insured’s selection of coverage, will be determined by the court in the county where the insured lives at the time the demand for arbitration is made . . . (Prudential car policy, part V at p. 10; PAC-190/PA, Ed. 7/94.)

The above language is clear and unambiguous in reserving questions of coverage and/or a person’s eligibility to make a claim for the court.

The relevant inquiry in Borgia was whether Borgia, as a resident relative of his father’s household who owned his own car covered under a separate State Farm policy, was entitled to enforce the arbitration clause. That is, whether Borgia’s claim to the status of a “covered person” who may demand arbitration was, in itself, arbitrable. The Borgia court found that the arbitration clause was ambiguous on the issue as to whether Borgia was a covered person under the policy entitled to invoke arbitration. The term “covered person” was not defined in the policy. The court interpreting the ambiguity against the drafter-Prudential, construed the scope of arbitration broadly, with the end result being that whether Borgia was a “covered person” within the meaning of the policy was an issue to be decided by arbitrators.

The PRUPAC policy, before the court in the instant matter, has eliminated that ambiguity by deleting the term, “covered person” and replacing it with the term “insured.” The applicable provision now reads as follows:

“If we and an insured do not agree . . . either party may make a written demand for arbitration.”

Even though Shirley Hasson is an insured under the PRUPAC policy, she is nevertheless not entitled to demand arbitration on account of the specific language reserving questions of coverage and/or a person’s eligibility to make a claim for the court. Thus, the court has subject matter over this declaratory judgment action.

The next question to be addressed is whether defendant is entitled to coverage for UM benefits pursuant to her policy. The undisputed facts place Mrs. Hasson squarely within the policy exclusion applicable to vehicles owned by a household resident but not insured under the PRUPAC policy. Defendant’s reliance on Burstein v. Prudential Property and Casualty Insurance Co., 742 A.2d 684 (Pa. Super. 1999), appeal granted, 563 Pa. 670, 759 A.2d 919 (2000) is simply unavailing. The Burstein court addressed the “regularly used non-owned” motor vehicle exclusion in rendering its decision. In Burstein, plaintiff used a company-owned vehicle primarily for business purposes although she was permitted to drive it for personal use. Her employer did not notify her of the types of insurance coverage he had purchased for the vehicle nor was she given the option to change such insurance coverage. Plaintiff had purchased UIM coverage on vehicles she owned. After an accident with a motorcy clist, she recovered from the negligent motorcyclist’s insurance claim. When the motorcy clist’s insurance policy proved inadequate, plaintiff filed a claim for UIM coverage under her employer’s policy. When informed, her employer did not have UIM coverage, she filed a claim for UIM benefits under her personal policy. This claim was denied based on a policy exclusion for a “regularly used non-owned car” not insured under this policy. A panel of arbitrators found the exclusion violated public policy, this was affirmed by the trial court and an appeal followed.

The Superior Court concluded that the “regularly used non-owned car” exclusion was void as against public policy. Of particular importance to the Superior Court in reaching this conclusion was the fact that plaintiff had done all she could to have U1M coverage. She carried it on her three personal vehicles but could not influence, and indeed did not know, her employer’s decision not to have it on the company car.

In juxtaposition to the facts of Burstein are the facts in the instant case. Mrs. Hasson owned the vehicle in question and could have paid for UM coverage on it. She chose not to. Additionally, she had some knowledge of the existing coverage on the Mazda and presumably could have influenced her mother’s decision on what coverages to place on the Mazda. These factual differences between Burstein and the matter sub judice mandate our determination that the “household vehicle” exclusion found in the instant case is valid, enforceable and not void as against public policy.

ORDER

And now, to wit, November 2, 2000, after hearing, submission of legal memoranda, and a legal determination that the court has subject matter jurisdiction over this controversy, it is hereby ordered and decreed that defendant, Shirley Hasson, is not entitled to coverage for uninsured motorist benefits pursuant to the express terms and definitions set forth in the applicable policy of insurance. A declaratory judgment in favor of plaintiff is granted.


author: CORBETT, J.,

text:
    McHale v. Wuagon
    C.P. of Lackawanna County,
    no. 1999 Civil 5621.

      Arthur J. Rinaldi, for plaintiff.

      Angela Costigan, for defendant.
    November 8, 2000
   CORBETT, J.,

Before the court is a motion for summary judgment filed by the defendant in the above captioned matter. On November 24, 1998, the plaintiff, Karen McHale, alleges that she was injured in a motor vehicle accident. Plaintiff alleges the accident was caused by the defendant when he ran a red light and his vehicle struck the plaintiff’s vehicle in the front passenger side. Plaintiff alleges that after the accident she was rendered unconscious. She was taken to the Mercy Hospital by ambulance and was treated in the emergency room. Thereafter she was treated with a Dr. Remick up until August 1999.

Plaintiff alleges that from the time of the accident up until August 28,1999, she was physically unable to perform the requirements of her job as a cook with American Food and Vending. She further alleges that when she returned to work she was only able to work 30 to 36 hours per week rather than her usual 45 hours per week. Plaintiff alleges that she was treated for injury to her spine in both the cervical thoracic and lumbar areas with pain in her left hip and injury to her knee. She alleges that in an MRI dated May 8, 1999, her knee injury was shown to be an area of synovium and loose intrarticular body anterior to the medial femoral condyle along with prepatellar fluid. Additionally, she argues that X-rays taken on November 24,1998 showed reversal of the normal cervical lordosis, which indicates spasm and injury to musculature.

Plaintiff admits that she has the limited tort option on her auto insurance with USF&G, however, she argues that the issue of whether her injury is a “serious injury” should be submitted to the jury.

Defendant has moved for summary judgment arguing that the plaintiff is limited in her recovery of damages as she has selected the limited tort option. Defendant argues that the plaintiff has not offered sufficient evidence to meet her threshold of “serious bodily” injury. As a result, defendant argues that there are no genuine issues of material fact for trial and he is entitled to judgment as a matter of law. Both sides waived oral argument and agreed that this court should decide this matter on the briefs. We have had the opportunity to review the record in this matter and the submissions of the parties. Therefore, this matter is ripe for disposition.

DISCUSSION

A motion for summary judgment places the burden upon the moving party. The moving party must show that there exists no genuine issue of any material fact for trial. Pa.R.C.P. 1035.2. The moving party must be entitled to judgment as a matter of law and the moving party has the burden of proving that no genuine issue of material fact exists. Washington v. Baxter, 553 Pa. 434, 719 A.2d 733, 737 (1998). The court must examine the record in the light most favorable to the non-moving party and resolve all doubts against the moving party. Id. An entry of summary judgment is granted only in cases where the right is clear and free of doubt. Accu-Weather Inc. v. Prospect Communications Inc, 435 Pa. Super. 93, 644 A.2d 1251 (1994).

In the instant matter, the defendant has moved for summary judgment based on the plaintiff’s selection of the limited tort option and his argument that plaintiff has not offered evidence sufficient to raise a genuine issue for trial which will meet the threshold for “serious bodily” injury. The Supreme Court in Washington v. Baxter, 533 Pa. 434, 719 A.2d 733 (1998) defined serious impairment of body function. The court in Washington quoted Michigan law in establishing the criteria that a plaintiff must meet in order to get over the serious bodily injury threshold. 719 A.2d at 740.

“The ‘serious impairment of body function’ threshold contains two inquiries:

“(a) What body function, if any, was impaired because of injuries sustained in the motor vehicle accident?

“(b) Was the impairment of the body function serious?

“The focus of these inquiries is not on the injuries themselves, but on how the injuries affected a particular body function. Generally, medical testimony will be needed to establish the existence, extent, and permanency of the impairment.... In determining whether the impairment was serious, several factors should be considered: the extent of the impairment, the length of time the impairment lasted, the treatment required to correct the impairment, and any other relevant factors. An impairment need not be permanent to be serious.” Id.

The court in Washington held that it is a jury’s function to decide whether a plaintiff who has chosen limited tort coverage has suffered a “serious injury” and is eligible for noneconomic damages such as pain and suffering, unless no reasonable juror could find that the plaintiff suffered a serious injury. 719 A.2d at 740; accord Robinson v. Upole, 750 A.2d 339 (Pa. Super. 2000). Based on the foregoing law and an examination of the record in light most favorable to the plaintiff, this court denies the defendant’s motion for summary judgment.

The record reveals that the plaintiff was taken to the emergency room immediately after the accident. She complained of neck and chest pain. Thereafter, she began treating with a Dr. Remick who prescribed physical therapy. Dr. Remick treated her for neck, hip and back pain. Physical therapy lasted for approximately two and a half to three months. In May 1999, plaintiff testified her knee gave out because of hip problems from the accident. She was referred to Dr. Schmaltz. Dr. Schmaltz suggested therapy for her knee, but the plaintiff did not have the financial resources. All treatment stopped as of August 1999; however, the plaintiff complains that she still experiences soreness in her back, neck, and knee. Plaintiff was off work from November 24,1998, the date of accident, until August 28, 1999. In an affidavit submitted in response to the motion for summary judgment, she states that she can still only work 30-36 hours per week as compared to 45 hours per week pre-accident. Given this evidence, this court finds that a reasonable jury could differ as to whether or not plaintiff suffered a “serious bodily injury.” An appropriate order to follow.

ORDER

And now, November 8,2000, consistent with the foregoing opinion, it is hereby ordered and decreed that defendant’s motion for summary judgment is denied.