text:
    The Brickman Group Ltd. v. CGU Insurance Company

      August 3, 2001

      John N. Ellison, for plaintiff.

      Joseph P. Dougher, for defendant.
   HERRON, J.,

Presently before this court is the motion for leave to amend the complaint of plaintiff, The Brickman Group Ltd., and defendant CGU Insurance Company’s opposition thereto. In its motion, Brickman seeks to reassert claims for breach of fiduciary duty and bad faith pursuant to Pa.C.S. §8371, to add a new claim for fraud, and to amplify and update its breach of contract allegations and the facts underlying its claim(s). CGU does not oppose the amendment to update the breach of contract allegations, but does oppose any amendment to reassert claims for breach of fiduciary duty, bad faith or set forth a new claim for fraud, on the grounds that any amendment is against a positive rule of law.

This court agrees that no amendment should be permitted to allow claims for breach of fiduciary duty, bad faith or fraud since these claims cannot survive demurrer on the facts alleged. However, amendment is permitted to update and amplify the breach of contract allegations. Therefore, for the reasons set forth in this opinion, the motion is granted in part and denied in part.

PROCEDURAL BACKGROUND

On July 10, 2000, Brickman filed its original complaint against CGU. CGU filed its first set of preliminary objections on August 2,2000. Then, on August 23, 2000, Brickman filed its first amended complaint, setting forth counts for breach of contract (Counts I [specific performance] and II [monetary damages]), breach of fiduciary duty (Count III) and bad faith insurance practices in violation of 42 Pa.C.S. §8371 (Count IV). CGU filed preliminary objections to this complaint on September 12,2000, asserting a demurrer to each count and demurring to the prayer for attorney fees. On January 8, 2001, this court issued an order and contemporaneous opinion sustaining the objections to Counts III and IV, sustaining the demand for attorney fees, and overruling the objections to Counts I and II.

Brickman filed its motion to amend its complaint on May 11,2001, less than 30 days from the end of the third extension of the discovery period. Brickman maintains that it brings this motion based, in part, on newly-discovered facts. See motion, ¶¶7-10. CGU filed its response on June 11, 2001. Brickman filed a reply on June 19, 2001 and a supplemental reply on July 19, 2001.

DISCUSSION

Rule 1033 of the Pennsylvania Rules of Civil Procedure permits a party to amend his complaint either by filed consent of the adverse party or by leave of court. The rule also provides that “[t]he amended pleading may aver transactions or occurrences which have happened before or after the filing of the original pleading, even though they give rise to a new cause of action or defense” and also allows amendment “to conform the pleading to the evidence offered or admitted.” Pa.R.C.P. 1033. The trial court has broad discretion in determining whether to allow amendment. Capobianchi v. BIC Corp., 446 Pa. Super. 130, 134, 666 A.2d 344, 346 (1995). “Amendments are to be liberally permitted except where surprise or prejudice to the other party will result or where the amendment is against a positive rule of law.” Burger v. Borough of Ingram, 697 A.2d 1037, 1041 (Pa. Commw. 1997). See also, Roach v. Port Authority of Allegheny County, 380 Pa. Super. 28, 30, 550 A.2d 1346, 1347 (1988) (“the right to amend the pleadings should not be withheld where some reasonable possibility exists that the amendment can be accomplished successfully”).

Notwithstanding this liberal amendment policy, “a court is not required to allow amendment of a pleading if a party will be unable to state a claim on which relief could be granted.” Werner v. Zazyczny, 545 Pa. 570, 584, 681 A.2d 1331, 1338 (1996). “Leave to amend will be withheld where the initial pleadings reveal that the prima facie elements of the claim cannot be established and that the complaint’s defects are so substantial that amendment is not likely to cure them.” Roach, supra at 30,550 A.2d at 1348. See also, Behrend v. Yellow Cab Company, 441 Pa. 105, 110, 271 A.2d 241, 243 (1970) (“liberality of pleading does not encompass a duty in the courts to allow successive amendments when the initial pleading indicates that the claim asserted cannot be established”). Further, amendment to add a new cause of action is not permitted after the statute of limitations has run, unless the proposed amendment does not change the cause of action but merely amplifies that which has already been averred. See e.g., Shenandoah Borough v. Philadelphia, 367 Pa. 180, 189-92, 39 A.2d 433, 437 (1951) (denying leave to add a negligence cause of action after expiration of the statute of limitations); Burger, 697 A.2d at 1041-42 (denying leave to amend to bring claims for civil rights violations under 42 U.S.C. §1983); New York State Electric & Gas Corp. v. Westinghouse Electric Corp., 387 Pa. Super. 537, 555, 564 A.2d 919, 928 (1989) (denying leave to add a fraud cause of action and new facts to support it after the statute of limitations had expired).

Applying this standard to the present case, this court finds that Brickman’s proposed amendments do not cure the defects as to the claims for breach of fiduciary duty and bad faith, and the new fraud claim is barred by the “gist of the action” doctrine.

I. CGU’s Power To Set Reserves and Its Reserving Decisions Does Not Implicate a Fiduciary Duty to Brickman, Its Insured

In its previous opinion, this court sustained the demurrer to Brickman’s claim for breach of fiduciary duty in Count III of the first amended complaint, on the grounds that the gravamen of Brickman’s claim was for CGU’s failure to abide by the five-year and six-year contract(s) and renew the insurance policies under the same terms and conditions since this claim does not involve the handling of benefits, settling or defending insurance claims or denial of coverage. The Brickman Group Ltd. v. CGU Insurance Co., July 2000, no. 909, slip op. at 14-16 (C.P. Phila. Jan. 8, 2001). This court previously stated that “Pennsylvania law does not recognize a cause of action for breach of fiduciary duty for failure to renew an insurance policy.” Id. at 12-13.

In its proposed second amended complaint, Brickman seeks to resurrect its fiduciary duty claim by alleging, inter alia, that:

“(60) CGU was entrusted with the power to set reserves for claims. Reserves are estimations of the money that will eventually be paid for the costs associated with a claim.
“(61) Such reserves were to be used to establish the ‘incurred loss’ half of the equation required for the 5 percent rate reduction aspect of CGU’s insurance program guarantee.
“(62) The power to set reserves is one regarding the defense, handling or settlement of claims, in which a fiduciary duty arises.
“(63) Upon information and belief, CGU’s reserving decisions, including both the setting and maintaining of reserves, were not solely based upon the likely estimations of the money that would eventually be paid for the costs associated with Brickman’s claims, but were inflated or not appropriately adjusted in an effort to make Brickman’s loss experience appear worse than it is.
“(64) CGU violated the trust and confidence placed in it as a fiduciary by exaggerating reserves and making Brickman’s loss experience appear worse than it truly is.
“(65) In addition, CGU promised to provide loss control services to avoid and/or control the costs of claims and charged Brickman for those services.
“(66) CGU failed to provide the loss control services, likely caused increased losses, and then attempted, in breach of its fiduciary duties, to use allegedly poor loss experience as an excuse to renege on its insurance program guarantee.
“(67) CGU violated the trust and confidence placed in it as a fiduciary by misrepresenting to Brickman its knowledge about the existence and terms of the five-year insurance program guarantee.” Second am. compl., ¶¶60-67.

Notwithstanding these allegations, this court finds that Brickman has not stated anything new that would give rise to a claim for breach of fiduciary duty. The allegations do not involve the CGU’s defense, handling or settlement of claim against Brickman or on Brickman’s behalf. CGU offers the plausible explanation that “[s]etting reserves is an internal accounting mechanism for CGU and represents their estimates of the losses they are called on to pay,” but that reserves do not affect the value of the claim nor “determine the extent of a carrier’s liability to pay losses.” Def. mem. of law at 7. Brickman argues that the question of whether setting reserves involves the defense, handling or settlement of claims is a factual issue. PI. reply br. at 3-4. However, this court disagrees. Again, Brickman does not allege that any specific claims were actually mishandled by CGU. Rather, at best, Brickman’s allegations merely amplify the breach of contract claim for CGU’s alleged failure to renew or sell Brickman insurance policies at guaranteed rates.

Therefore, Brickman’s motion as to its fiduciary duty claim is denied.

II. Brickman Again Fails To State a Claim for Statutory Bad Faith Since the Gravamen of Brickman’s Claim Relates to a Failure To Renew an Insurance Policy

This court previously stated that “a bad faith claim under [42 Pa.C.S.] §8371 does not involve a failure to renew an insurance policy, unless such failure involves the denial of benefits or the handling of a claim, which is a situation not implicated on the present facts.” Brickman, slip op. at 19. Rather, this court found that Brickman’s claim was better decided as part of its breach of contract claim. Id. at 21.

In its proposed second amended complaint, Brickman attempts to revamp its statutory bad faith claim where it alleges that CGU relied on the provisions in the liability insurance policies which require CGU to provide specified notice prior to non-renewal, cancellation or premium increases, in order to justify its decision to not renew the policies despite the “insurance program guarantee” and in order to avoid paying claims under the guaranteed rates. Second am. compl., ¶¶73-75. Brickman also suggests that by inserting a deductible of $250,000 into the general liability insurance policy for the 2001-2002 policy period, CGU is refusing to pay, even before a claim is made, without a reasonable basis and in knowing anticipatory breach of the terms of the insurance policies which CGU is purportedly required to sell to Brickman under the insurance program guarantee. Id. at ¶¶76-77. This court disagrees with Brickman’s argument that the allegations in the proposed second amended complaint specifically link CGU’s “bad faith” conduct to the insurance policies, themselves, and state a statutory bad faith claim for anticipatory breach of these policies. Notwithstanding any of Brickman’s allegations, this court again finds that the gravamen of Brickman’s claim rests in CGU’s failure to renew Brickman’s policies at the same terms and rates despite the insurance program guarantee. See id. at ¶¶71-87. This court also finds that Brickman’s proposed amendment does not cure the defects of the first amended complaint.

Therefore, Brickman’s motion as to its statutory bad faith claim is denied.

III. Brickman’s Proposed Claim for Fraud Is Barred by the “Gist of the Action” Doctrine

Brickman also moves to amend its first amended complaint to add a cause of action for fraud. CGU opposes this addition on the grounds that it is futile, prejudicial to CGU and in violation of the positive rules of law because (1) the two-year statute of limitations has expired; (2) Brickman’s proposed fraud claim violates Pennsylvania’s “gist of the action” doctrine; and (3) the allegations are made in bad faith.

This court agrees that the “gist of the action” doctrine does bar Brickman’s proposed fraud claim, thereby rendering this part of its second amended complaint futile.

As to its proposed fraud claim, Brickman alleges, inter alia, that:

“(90) The only condition CGU placed on its agreement to the insurance program guarantee in 1997 was that the workers’ compensation coverage had to be included in Brickman’s insurance program. The workers’ compensation coverage was included, pursuant to CGU’s condition.
“(91) To the extent that CGU had any additional conditions on the insurance program guarantee or to the extent CGU meant to exclude the property insurance from the insurance program guarantee, those conditions were concealed from Brickman.
“(92) In 1998, CGU informed Brickman, through Gallagher, that it agreed to roll forward its insurance program guarantee, making the 1998 rates the new guaranteed rates and extending the term of the guarantee until July 1, 2003.
“(93) CGU’s statements were misrepresentations, in that CGU never intended to comply with its insurance program guarantee if the Brickman account became, in CGU’s opinion, unprofitable.
“(94) To the extent that CGU felt that it need not comply with its insurance program guarantee unless it was attached as an endorsement to the insurance policies, CGU fraudulently concealed that fact and failed intentionally, recklessly or negligently to attach the insurance program guarantee as an endorsement.
“(95) CGU’s insurance program guarantee was an artifice used to deceive Brickman to its disadvantage by making Brickman believe that it could purchase from CGU the same insurance at the same rates for five years, and then, following the extension of the insurance program guarantee in 1998, for an additional year, through 2003.
“(96) CGU knew or recklessly disregarded the fact that its insurance program guarantee was a fraud and a misrepresentation.
“(97) CGU made its insurance program guarantee in an effort to induce reliance by Brickman thereon and to entice Brickman to switch insurance companies to CGU (in 1997) and not away from CGU (in 1998), during a highly competitive insurance market.
“(98) Brickman justifiably relied on CGU’s misrepresentations in deciding to purchase insurance from CGU in 1997 and 1998.
“(99) CGU’s misrepresentations were material to the transactions, in that CGU’s five-year insurance program guarantee was a condition of Brickman’s purchase of insurance from CGU.” Second am. compl. at ¶¶90-99.

The “gist of the action” doctrine bars claims for allegedly tortious conduct where the gist of the conduct sounds in contract rather than tort. Redevelopment Authority of Cambria v. International Insurance Co., 454 Pa. Super. 374, 391-92, 685 A.2d 581, 590 (1996); Phico Insurance Co. v. Presbyterian Medical Services Corp., 444 Pa. Super. 221, 228, 663 A.2d 753, 757 (1995). As noted in Phico, the doctrine holds that:

“[T]o be construed as a tort action, the wrong ascribed to the defendant must be the gist of the action with the contract being collateral. In addition, ... a contract action may not be converted into a tort action simply by alleging that the conduct in question was done wantonly. Finally, ... the important difference between contract and tort actions is that the latter lie from the breach of duties imposed as a matter of social policy while the former lie for the breach of duties imposed by mutual consensus.” Id. at 229, 663 A.2d at 757.

Courts have generally invoked the “gist of the action” doctrine to bar a tort claim where the defendant negligently or intentionally breached a contract. See Redevelopment Authority, 454 Pa. Super. at 391, 685 A.2d at 590 (holding that doctrine barred claim of negligent performance of contractual duties); Phico, 444 Pa. Super. at 228, 663 A.2d at 757 (same); Grode v. Mutual Fire, Marine and Inland Ins. Co., 154 Pa. Commw. 366, 373, 623 A.2d 933, 937 (1993) (same); Sunquest Info. Sys. v. Dean Witter Reynolds Inc., 40 F. Supp.2d 644, 651 (W.D. Pa. 1999) (holding that “gist of the action” doctrine barred claim of fraudulent inducement to form a contract); Factory Mkt. Inc. v. Schuller Int’l Inc., 987 F. Supp. 387, 394-95 (E.D. Pa. 1998) (holding that doctrine barred fraud claim based on a failure to honor guarantees contained in a contract); Peoples Mortg. Co., 856 F. Supp. at 856 (holding that “gist of the action” doctrine barred conversion claim based on false billing under a contract). On the other hand, courts have generally not applied the doctrine where the defendant not only breached the contract, but also made misrepresentations about the breach in order to deceive the unsuspecting plaintiff into continuing the contractual relationship or to not assert its contractual rights against the defendant. Greater Philadelphia Health Servs. II Corp. v. Complete Care Servs. L.P., June 2000, no. 2387, slip op. at 4 (C.P. Phila. November 20,2000) (Herron, J.) (citing Northeastern Power Co. v. Backe-Durr Inc., 1999 WL 674332 at *12 (E.D. Pa.); Polymer Dynamics Inc. v. Bayer, 2000 WL 1146622, at *6-7 (E.D. Pa.); American Guarantee & Liability Ins. Co. v. Fojiani, 90 F. Supp.2d 615, 623 (E.D. Pa. 2000); Fox’s Foods Inc. v. Kmart Corp., 870 F. Supp. 599, 609 (M.D. Pa. 1994)).

All of Brickman’s allegations in its proposed count for fraud are dependent upon its breach of contract claim for CGU’s alleged failure to perform under the insurance program guarantee. Brickman is seeking to enforce its purported right to be sold insurance policies by CGU at the same guaranteed rates over a five- and six-year period, which is a right that derives directly from the alleged insurance program guarantee. At best, Brickman’s allegations set forth a fraudulent inducement claim to enter into the insurance program guarantee, but such a claim is barred by the “gist of the action” doctrine.

Therefore, Brickman’s motion as to its fraud claim is denied.

IV. Brickman’s Motion To Amend To Amplify Its Factual Allegations to Its Breach of Contract Claim Is Granted

Brickman also seeks to amend its factual averments in order to plead facts that have occurred since the first amended complaint was filed on August 23, 2000. Specifically, Brickman alleges that “[o]n or about February 27,2001, CGU gave Brickman notice that it would non-renew the automobile insurance for the 2001-2002 policy year, claiming that the auto line of insurance had an incurred loss ratio exceeding 150 percent for the period July 1, 1997 through January 30, 2001.” Second am. compl., ¶38. Brickman also alleges that CGU, on March 30, 2001, provided an “insurance proposal” which ignores the existence of the purported insurance guarantee and offers Brickman insurance with different terms and conditions than the existing insurance policies in violation of the insurance program guarantee. Id. at ¶42. Brickman also seeks to show that CGU, through its underwriter, admitted to the existence of the five-year insurance program. Id. at ¶¶18-20.

CGU does not oppose the proposed factual amendments to its breach of contract claims, but does oppose any revival of Brickman’s prayer for attorney fees as to damages. Def. mem. of law at 16. However, CGU does request additional time for discovery to address those amendments which this court may permit. Id. at 17.

This court previously struck the demand for attorney fees, finding that the only claims that remained were breach of contract claims which do not allow for attorney fees. Brickman, slip op. at 21-22. Likewise, here, the court is denying the motion to amend to add any new claims or revive the previously-dismissed ones. Therefore, the court need not address this issue again. As to additional discovery, this court finds it unnecessary since Brickman attached various exhibits to its proposed second amended complaint in order to bolster its factual averments and Brickman’s counsel represented to the court that it would “promptly produce all documents” related to its securing a replacement insurance program in order to assess Brickman’s alleged damages.

CONCLUSION

For the reasons set forth above, the court is denying the motion to amend insofar as it seeks to add claims for breach of fiduciary duty, bad faith pursuant to 42 Pa.C.S. §8371, and fraud, or to replead a prayer for attorney fees, but is granting the motion insofar as it seeks to amplify factual averments to Brickman’s breach of contract claims.

ORDER

And now, August 3, 2001, upon consideration of plaintiff’s motion for leave to amend its complaint, defendant’s opposition thereto, all other matters of record, and in accordance with the opinion being filed contemporaneously with this order, it is hereby ordered that:

(1) Plaintiff’s motion for leave to amend to replead counts for breach of fiduciary duty and bad faith pursuant to 42 Pa.C.S. §8371, and to add a count for fraud is denied without prejudice;

(2) Plaintiff’s motion for leave to amend to replead a prayer for attorney fees is denied;

(3) Plaintiff’s motion for leave to amend to amplify its factual averments to its breach of contract claim(s) (Counts I & II) is granted; and

(4) Defendant’s request for an extended discovery period is denied without prejudice.

      . See The Brickman Group Ltd. v. CGU Insurance Co., July 2000, no. 909 (C.P. Phila. January 8, 2001) (Herron, J.), available at http:\\courts.phila.gov\cptcvcomp.htm.

      . The discovery period was scheduled to end on June 6,2001 other than the extension of time to take certain additional depositions. See order of May 16, 2001. The deadline for filing pretrial motions was set for July 2,2001. The trial in this case is scheduled for December 3, 2001. Both parties requested a scheduling conference to address the effect of plaintiff’s present motion on the case. Since this court is denying the motion insofar as it seeks to add new causes of action and since plaintiff’s counsel represented to this court that it will promptly produce all documents related to Brickman’s securing a replacement insurance program, this court does not believe that an extension of the discovery deadline is presently necessary.

      . The five-year and six-year contract(s) are purportedly separate from the insurance policies themselves, but oblige CGU to sell Brickman insurance at the same rates over the term of the contract. In its proposed second amended complaint, Brickman refers to the five-year and six-year contracts as “CGU’s insurance program guarantee.” Second am. compl., ¶¶9, 11-17, 21-23.

      . This court need not address the other two grounds for denying Brickman leave to amend. However, it is true that an action for fraud or deceit must be commenced within two years. 42 Pa.C.S. §5524(7). CGU may be estopped from invoking the statute of limitations defense if it committed some affirmative independent act of concealment upon which Brickman justifiably relied. Kingston Coal Company v. Felton Mining Company Inc., 456 Pa. Super. 270, 283-84, 690 A.2d 284, 290-91 (1997). However, mere mistake, misunderstanding or lack of knowledge is insufficient to toll the statute of limitations and Brickman bears the burden of proving such fraud or concealment, by evidence which is clear, precise and convincing. Id.

      Here, CGU argues that Brickman should have known of any alleged fraud as soon as it received the insurance policies in 1997, which contained non-renewal provisions and renewal premium quotation provisions. Def. mem. of law, at 11-12. See also, def. exhibits H, I, J and K. Brickman asserts that its cause of action for fraud did not begin to run until the year 2000 when CGU asserted the notice provisions as a basis for violating the insurance program guarantee. PI. reply br. at 10-11.
      On the face of the complaint, CGU performed for four years, selling Brickman policies and paying claims. Second am. compl., ¶¶17, 24, 28, 37. The relevant notice provisions in the insurance policies obligate CGU to provide written notice by certified mail of its intent not to renew 120 days prior to the policies’ respective expiration dates. Def. exhibits H, I, J and K. The renewal premium quotations require 90 days prior notice. Id. Under these facts, it does not seem that Brickman has offered sufficient evidence that CGU actively concealed its intent not to renew the policies at the guaranteed rates over the five- and six-year periods, or that CGU should be estopped from asserting this defense. Therefore, the statute of limitations may, in fact, act as a bar to Brickman’s asserting its fraud claim. Nonetheless, the court is denying the motion to amend on other grounds.

      . See letter of plaintiff’s counsel dated June 18, 2001.


source: Caselaw Access Project

author: HERRON, J.,

license: Public Domain

text:
    James J. Gory Mechanical Contracting Inc. v. Philadelphia Housing Authority

      April 10, 2001

      Bruce L. Phillips, for plaintiff.

      Barry W. Smiley, for defendant.
   HERRON, J.,

Defendant Philadelphia Housing Authority has filed a motion for summary judgment requesting that the court enter judgment in its favor and against plaintiff James J. Gory Mechanical Contracting Inc. on all counts. Because PHA has waived its right to raise the arguments asserted in the motion, the motion is denied.

BACKGROUND

This dispute arises from a construction contract and related documents agreed to by the parties. According to PHA, the contract includes a provision requiring that Gory submit certain contract disputes to a “contracting officer” for a written decision prior to filing suit in court (arbitration provision). Motion exhibit C ¶31.

According to Gory, PHA has breached the contract repeatedly and has refused to make payments due to Gory. On this basis, Gory initiated the instant action on February 9, 2000 by filing a complaint. In its answer to the complaint, filed on April 7,2000, PHA asserted, among other affirmative defenses, that the claim “should be dismissed as [Gory] has failed to exhaust all administrative remedies pursuant to the contract in question before filing the instant lawsuit.” PHA’s answer at ¶29.

According to the case management memo issued in this matter, discovery was closed on August 7,2000, and the deadline for filing pretrial motions was October 16, 2000. The parties attended a court-sponsored settlement conference on February 9, 2001. On February 16, 2001, nearly one year after being served with the complaint and a mere two months before the scheduled trial date of April 17, PHA filed its motion.

DISCUSSION

PHA argues that the arbitration provision requires Gory to submit this dispute to a contracting officer before the court can hear the matter. Because PHA has waived its right to raise this argument, however, the motion must be denied.

A line of Pennsylvania cases holds that a mandatory arbitration provision deprives court of subject matter jurisdiction. See e.g., Shumake v. Philadelphia Board of Education, 454 Pa. Super. 556, 561, 686 A.2d 22, 25 (1996). Because “lack of subject matter jurisdiction is a defense that cannot be waived,” LaChappelle v. Interocean Management Corp., 731 A.2d 163, 167 (Pa. Super. 1999), it could be inferred from this line of cases that an objection based on an agreement to arbitrate may be raised at any time and cannot be waived.

Recently, however, Pennsylvania courts have reached the opposite conclusion, and a pattern of cases holding that the defense of arbitration is waivable has emerged. See e.g., Samuel J. Marranca General Contracting Co. v. Amerimar Cherry Hill Associates Limited Partnership, 416 Pa. Super. 45, 49, 610 A.2d 499, 501 (1992) (concluding that the defendant “waived its right to enforce the arbitration clause”). Courts must look at the following to evaluate a claim of waiver:

“The key to determining whether arbitration has been waived is whether the party, by virtue of its conduct, has accepted the judicial process----Acceptance of the judicial process is demonstrated when the party (1) fails to raise the issue of arbitration promptly, (2) engages in discovery, (3) files pretrial motions which do not raise the issue of arbitration, (4) waits for adverse rulings on pretrial motions before asserting arbitration, or (5) waits until the case is ready for trial before asserting arbitration.” St. Clair Area School District Board of Education v. E.I. Associates, 733 A.2d 677, 682 n.6 (Pa. Commw. 1999). (citations omitted)

While a defense of arbitration is waived if not raised as a new matter, the Superior Court made it clear in Goral v. Fox Ridge Inc., 453 Pa. Super. 316, 683 A.2d 931 (1996), that merely raising an agreement to arbitrate in this manner is not sufficient to preserve the defense. In Goral, the defendants pleaded as a new matter that, “alternatively, any of [the plaintiffs’] claims that are not barred by the applicable statute of limitations are required by... the agreement of sale to be submitted to common-law arbitration.” 453 Pa. Super. at 319, 683 A.2d at 932. Ten months later, the defendants objected to a request for discovery, arguing that the plaintiffs’ claims had to be submitted to arbitration. Nearly six months after the discovery dispute, the defendants filed a motion to compel arbitration, which the trial court denied.

On appeal, the Superior Court affirmed the lower court’s decision, concluding that the defendants’ “repeated references to the arbitration agreement [were] not sufficient to avoid a finding of waiver.” 453 Pa. Super. at 321, 683 A.2d at 933. The fact that the defendants raised the question of arbitration in their new matter specifically was unpersuasive because “[tjhey did so . . . only as an alternative to their preferred option of winning a favorable ruling from the trial court.” 453 Pa. Super. at 322, 683 A.2d at 933. The court also noted that, prior to filing their motion to compel, the defendants “did nothing to move the matter to arbitration” and instead “allowed the case to linger on the trial court’s docket and awaited discovery.” 453 Pa. Super. at 323, 683 A.2d at 934. Had the defendants truly wanted the matter resolved by arbitration, the court counseled, they could have, and, impliedly, should have, taken steps toward that end in their preliminary objections. 453 Pa. Super. at 322, 683 A.2d at 934.

The facts of this matter are similar to those of Goral. Here, before filing the motion, PHA made no attempt to invoke the defense of administrative remedies after raising it in its answer almost a year ago. In addition, the court’s reasoning in Goral is even more convincing here, as this case has progressed far beyond discovery and is scheduled for trial in less than a week. By engaging in discovery, waiting until the eve of trial to submit the motion, participating in a court-sponsored settlement conference and attempting to assert a counterclaim, PHA has demonstrated a clear acceptance of the judicial process. Thus, PHA has waived any right it may have had to compel arbitration, and the motion must be denied.

CONCLUSION

PHA has waived its right to invoke the arbitration provision, and the motion is denied.

ORDER

And now, April 10, 2001, upon consideration of the motion for summary judgment of defendant Philadelphia Housing Authority, the opposition to it of plaintiff James J. Gory Mechanical Contracting Inc., the respective memoranda, all other matters of record, and in accord with the opinion being filed contemporaneously with this order, it is hereby ordered and decreed that the motion for summary judgment is denied.

      . Gory relies only on the untimeliness of PHA’s motion and does not assert that the arbitration provision does not apply to the instant dispute.

      . After filing the motion, PHA filed a motion requesting leave to amend its answer to the complaint to include a counterclaim. The court denied this motion on April 5, 2001.

      . While PHA bases its argument on Gory’s failure to exhaust administrative remedies, it has been noted that Pennsylvania’s policy of favoring arbitration is comparable to the “long-standing public policy of hesitancy to interfere with administrative proceedings before all administrative remedies have been exhausted.” Mid-Atlantic Toyota Distributors Inc. v. Charles A. Bott Inc., 101 Pa. Commw. 46, 52-53, 515 A.2d 633, 636 (1986). Cf. Lancaster Cty. v. Pennsylvania Labor Relations Board, 761 A.2d 1250, 1257 (Pa. Commw. 2000) (applying law on failure to exhaust administrative remedies to a request for arbitration).

      . PHA’s failure to raise the defense of administrative remedies is even more inadequate than the Goral defendants’ “repeated references” to the arbitration provision in that case. In addition, the Goral defendants cited the relevant arbitration provision in their new matter, while PHA did not specifically invoke the arbitration provision or Gory’s obligation to submit this matter to a contracting officer at any point before filing the motion.


author: WARMAN, J.,

text:
    Angelo v. Luzerne Township

      June 11, 2001
    C.P. of Fayette County,
    no. 1447 of 1999 G.D.

      Theresa Berret, for plaintiff.

      John Kwasmeski, for defendant.
   WARMAN, J.,

Presently before this court for disposition is a motion for summary judgment, filed on behalf of defendant, Luzerne Township, to the complaint filed on behalf of Vincent L. Angelo II, individually, and as administrator of the estate of Vincent Lewis Angelo III, now deceased. In the motion, defendant avers that plaintiff is unable to adduce sufficient evidence on issues essential to the case, on which he bears the burden of proof, such that a jury could render a verdict in his favor, and that it is therefore immune from suit under section 8541 and section 8542 of the Judicial Code pertaining to governmental immunity, 42 Pa.C.S. §8541 and §8542.

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 is denied.

BACKGROUND

The facts and procedural history of the case are as follows. This action arises as the result of an automobile accident which occurred on December 15,1998, as plaintiff and his 5-year-old son were traveling eastbound on Township Road 303 approaching the intersection of Township Road 326. Township Road 303 is a two-lane, two-way, asphalt surfaced road owned and maintained by defendant Luzerne Township.

Plaintiff alleges that prior to reaching the intersection, a deer jumped out from the right-hand side of the roadway into his path of travel and that he swerved in order to avoid hitting it. As a result thereof, plaintiff’s vehicle veered into a stop sign that controlled traffic coming from Township Road 326 onto Township Road 303. When the left front wheel of the Angelo vehicle came into contact with the base of the stop sign, it tilted out of control and rolled, side over side, twice, until it came to rest on its roof after colliding with a tree alongside Township Road 326. Both occupants were ejected from the vehicle. Vincent Lewis Angelo III, died as a result of the accident, and plaintiff Vincent L. Angelo II, sustained various injuries. Thereafter, on or about July 21,1999, a three-count complaint was filed on behalf of plaintiff and his decedent son in the Court of Common Pleas of Fayette County, Pennsylvania. Said complaint contains claims against defendant for negligence, wrongful death, and a survival action.

Following the completion of discovery, on or about April 16, 2001, the motion for summary judgment now before this court was filed on behalf of defendant Luzerne Township. On May 15, 2001, we heard oral argument thereon.

DISCUSSION

The purpose of the summary judgment rule is to eliminate cases prior to trial where a party cannot make out a claim or defense after relevant discovery has been completed. Miller v. Sacred Heart Hospital, 753 A.2d 829 (Pa. Super. 2000). Summary judgment is proper when the pleadings, depositions, answers to interrogatories and admissions on file, if any, together with any affidavits, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Kuney v. Benjamin Franklin Clinic, 751 A.2d 662 (Pa. Super. 2000); Stevens Painton Corporation v. First State Insurance Company, 746 A.2d 649 (Pa. Super. 2000); Davis v. Resources for Human Development Inc., 770 A.2d 353 (Pa. Super. 2001).

Summary judgment may only be granted in cases where it is clear and free from doubt that the moving party is entitled to judgment as a matter of law. Davis v. Resources for Human Development, 770 A.2d 353 (Pa. Super. 2001). 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). If there are no material issues of fact or if the non-moving party has failed to state a prima facie case, summary judgment may be granted. Dudley v. USX Corporation, 414 Pa. Super. 160, 606 A.2d 916 (1992), allocatur denied, 532 Pa. 663, 616 A.2d 985 (1992).

The trial court must confine its inquiry when confronted with a motion for summary judgment to questions of whether material factual disputes exist. Township of Bensalem v. Moore, 152 Pa. Commw. 540, 620 A.2d 76 (1993). For summary judgment purposes, a “material fact” is one that directly affects the outcome of the case. Kuney v. Benjamin Franklin Clinic, 751 A.2d 662 (Pa. Super. 2000); Kenney v. Jeanes Hospital, 769 A.2d 492 (Pa. Super. 2001). 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).

In a motion for summary judgment, the moving party has the burden of proving the non-existence of any genuine issue of fact, the non-moving party must demonstrate that there is a genuine issue for trial and may not rest an averments in its pleadings. Davis v. Resources of Human Development, 770 A.2d 353 (Pa. Super. 2001). The party moving for summary judgment may not rely solely on its own testimonial affidavits or depositions or those of its witnesses to establish the non-existence of a genuine issue of material fact. Dudley v. USX Corporation, 414 Pa. Super. 160, 606 A.2d 916 (1992). With the above rules in mind, we will now consider defendant Luzerne Township’s motion for summary judgment to plaintiff’s complaint.

42 Pa.C.S. §8541 provides:

“Except as otherwise provided in this subchapter, no local agency shall be liable for any damages on account of any injury to a person or property caused by any act of the local agency or an employee thereof or any other person.” 42 Pa.C.S. §8541.

42 Pa.C.S. §8542(a) provides in pertinent part:

“(a) Liability imposed — A local agency shall be liable for damages on account of an injury to a person or property within the limits set forth in this chapter if both of the following conditions are satisfied and the injury occurs as a result of one of the acts set forth in subsection

(b):

“(1) The damages would be recoverable under common law or a statute creating a cause of action if the injury were caused by a person not having available a defense under section 8541 (relating to governmental immunity generally) or section 8546 (relating to defense of official immunity); and
“(2) The injury was caused by the negligent acts of the local agency or an employee thereof acting within the scope of his office or duties with respect to one of the categories listed in subsection (b). As used in this paragraph ‘negligent acts’ shall not include acts or conduct which constitutes a crime, actual fraud, actual malice or willful misconduct.” 42 Pa.C.S. §8542(a).

A township is a local agency and thus subject to the provisions of the Political Subdivision Tort Claims Act. Deluca v. Whitemarsh Township, 106 Pa. Commw. 325, 526 A.2d 456 (1987). Tort exceptions to governmental immunity under the Political Subdivision Claims Act are to be strictly construed because of the clear intent to insulate government from exposure to tort liability. Lockwood v. City of Pittsburgh, 561 Pa. 515, 751 A.2d 1136 (2000); see also, Kiley by Kiley v. City of Philadelphia, 537 Pa. 502, 645 A.2d 184 (1994). The legislative intent requires courts to interpret the statutory exceptions narrowly against injured plaintiffs. Thomas v. City of Philadelphia, 668 A.2d 292 (Pa. Commw. 1995).

The burden of proof necessary to successfully maintain an action against a local agency lies with the claimant seeking to impose liability. The claimant has the burden of establishing that a common-law or statutory cause of action exists against the local agency as a result of a negligent act of that agency or its employee acting within the scope of his employment, and that the negligent act falls within one of the eight enumerated exceptions. Santori v. Snyder, 165 Pa. Commw. 505, 645 A.2d 443 (1994).

Here, plaintiff has asserted negligence claims against defendant. The basic elements of a cause of action founded on negligence are a duty, recognized by law, requiring the actor to conform to a certain standard of conduct, failure to conform to that standard, causal connection between the conduct and the resulting injury, and actual loss or damage resulting to the interests of another. Hicks v. Metropolitan Edison Company, 665 A.2d 529 (Pa. Commw. 1995), allocatur denied, 544 Pa. 638, 675 A.2d 1253 (1996). Absent a legal duty to the injured party, no recovery can lie against a local governmental agency. Sloneker v. Martin, 144 Pa. Commw. 190, 604 A.2d 751 (1991).

In the complaint, plaintiff alleges that the township was negligent in these respects:

“(a) In creating and maintaining an ultrahazardous and dangerous condition of TR 303, TR 326 and the intersection thereof by negligently placing the stop sign at the intersection of TR 326 and TR 303 on a solid steel post anchored into a large concrete/cement footer specifically designed not to break away when hit by a motor vehicle; and/or
“(b) In failing to utilize a proper and safe breakaway mounting for the stop sign located on TR 326 at the intersection of TR 303; and/or
“(c) In failing to maintain and/or adequately and/or properly maintain the stop sign at the intersection of TR 326 and TR 303 so as to insure that the same was properly constructed to break away in the event of a collision; and/or
“(d) In negligently designing, placing and mounting the subject stop sign at the intersection of TR 326 and TR 303 where defendant possessed actual knowledge that vehicles had struck the stop sign in the past and constructive knowledge that vehicles would strike the stop sign in the future.”

There is no dispute that once a municipality has undertaken the discretionary duty to control traffic through the use of traffic signals or control devices, it may be held hable for negligent erection or maintenance of those devices in absence of a shield of governmental immunity. See City of Philadelphia v. Messantonio, 111 Pa. Commw. 364, 533 A.2d 1127 (1987), allocatur denied, 519 Pa. 668, 548 A.2d 257 (1988). See also, Glenn v. Horan, 765 A.2d 426 (Pa. Commw. 2001). Although defendant does not deny that it owed such a duty to plaintiff and his son, defendant does deny that it was negligent, and that any act or omission on its part caused the injuries resulting from his accident. Based on this duty and plaintiff’s allegations that defendant’s breach of this duty caused the injuries sustained as a result of the accident, we believe that plaintiff has sufficiently established a cause of action against defendant as required by 42 Pa.C.S. §8542(a)(l).

We must next determine whether the township was immune from suit through the operation of the exceptions set forth in 42 Pa.C.S. §8542(b). Plaintiff argues in opposition to defendant’s motion for summary judgment that both the streets exception found at 42 Pa.C.S. §8542(b)(6)(i), and the traffic controls exception found at 42 Pa.C.S. §8542(b)(4) apply to this case and operate to waive the defendant’s immunity. Plaintiff further argues that there are numerous genuine issues of material fact which preclude the entry of summary judgment. Defendant, however argues to the contrary that it is immune from suit because neither exception applies. Defendant further argues that because there are no genuine issues of material fact, it is therefore entitled to judgment as a matter of law.

The streets exception found at 42 Pa.C.S. §8542(b) (6)(i) provides:

“(6) Streets.—
“(i) A dangerous condition of streets owned by the local agency, except that the claimant to recover must establish that the dangerous condition created a reasonably foreseeable risk of the kind of injury which was incurred and that the local agency had actual notice or could reasonably be charged with notice under the circumstances of the dangerous condition at a sufficient time prior to the event to have taken measures to protect against the dangerous condition.” 42 Pa.C.S. §8542(b)(6)(i).

Defendant argues that for this exception to apply and liability to be imposed, there must be a dangerous condition “of’ the roadway and that here, no such condition existed. Defendant claims that the road was dry, the pavement was even, and that there has been no evidence produced to suggest that plaintiff lost control of his vehicle due to any condition “of’ the roadway. Instead, defendant alleges that plaintiff lost control of his car as a result of swerving to miss the deer.

We do not agree with defendant’s position. Whether a dangerous condition must be “of’ or “on” a roadway has been the subject of numerous cases involving the exceptions to governmental immunity. The “on/of’ distinction has been applied to the real property, highway, and street exceptions to governmental immunity. While there are major differences between the exceptions, central to each is that immunity is waived for a “dangerous condition of’ the real estate, highway, or street.

Our Supreme Court recently examined the “on/of’ distinction with regard to the real estate exception and stated:

“Having carefully evaluated the parties’ respective arguments, and having had the benefit of years of observing how the so-called ‘on/of distinction’ has affected this area of the law, we now conclude that the ‘on/of distinction’ is problematic and of little or no use. Not only is it strained and confusing, it is also incorrect,.... Therefore, we reject it.” Jones v. SEPTA, 2001 WL 546498 (Pa. May 22, 2001).

The court went on to state:

“[W]e conclude that a claim for damages for injuries caused by a substance or an object on Commonwealth real estate must allege that the dangerous condition derived, originated, or had as its source the Commonwealth realty itself.” Jones v. SEPTA, 2001 WL 546498 (Pa. May 22, 2001).

Guided by the wisdom and language of our Supreme Court regarding the “on/of’ distinction, we believe that defendant’s position is incorrect. We accordingly reject defendant’s position that in order for the exception to apply there must be a dangerous condition “of’ the roadway, and defendant’s argument that it is entitled to judgment as a matter of law.

We also reject defendant’s position that it is shielded by immunity, and therefore entitled to judgment as a matter of law because the traffic controls exception does not apply. The traffic controls exception found at 42 Pa.C.S. §8542(b)(4) provides:

“(4) Trees, traffic controls and street lighting. — A dangerous condition of trees, traffic signs, lights or other traffic controls, street lights or street lighting systems under the care, custody or control of the local agency, except that the claimant to recover must establish that the dangerous condition created a reasonably foreseeable risk of the kind of injury which was incurred and that the local agency had actual notice or could reasonably be charged with notice under the circumstances of the dangerous condition at a sufficient time prior to the event to have taken measures to protect against the dangerous condition.”

Again, there is no dispute that defendant owed a duty to plaintiff and his son. Defendant, however, argues that plaintiff has presented no evidence to demonstrate that after the cement base was installed that this particular stop sign posed a danger to vehicles traveling on Township Road 303 or Township Road 326. However, the initial determination of whether the stop sign presented a dangerous condition, in our opinion, is a question of fact that must be determined by a jury. See Bendas v. Township of White Deer, 531 Pa. 180, 611 A.2d 1184 (1992), reargument denied, (1993); Kilgore v. City of Philadelphia, 553 Pa. 22, 717 A.2d 514 (1998). See also, Dean v. PennDOT, 561 Pa. 503, 751 A.2d 1130 (2000), reargument denied (2000). Since this issue affects plaintiff’s ability to proceed against defendant, it is certainly a genuine issue of material fact sufficient to preclude the entry of summary judgment.

There is also a substantial disagreement and genuine dispute between the parties with regard to notice and with regard to whether this particular stop sign created a reasonably foreseeable risk that this kind of injury could result from an impact with the sign. We believe that these are genuine issues of material fact that also preclude the entry of summary judgment. Accordingly, after examining the record in a light most favorable to plaintiff, and after resolving all doubts in his favor, we find that there are genuine issues of material fact in dispute. We must, therefore, deny defendant’s motion for summary judgment.

ORDER

And now, June 11, 2001, in consideration of the motion for summary judgment filed on behalf of defendant Luzerne Township, to plaintiff Vincent L. Angelo II’s, complaint, and in further consideration of the record, applicable law, briefs, arguments and submissions of counsel, it is hereby ordered and decreed that defendant’s motion is denied.

      . In his deposition taken on April 20, 2000, William Baker, chairman of the Luzerne Township supervisors for the past 20 years and Luzerne Township roadmaster, stated that in 1988, the sign in question was placed in a cement base because, prior to that time, it was being knocked over, either by vandals or automobiles, two or three times a year.

      . “On/of’ applied to real estate exception, see Shedrick v. William Penn School District, 654 A.2d 163 (Pa. Commw. 1995), allocatur denied, 542 Pa. 682, 668 A.2d 1142 (1995). “On/of’ applied to highways exception, see Mason & Dixon Lines Inc. v. Mognet, 166 Pa. Commw. 1, 645 A.2d 1370 (1994). “On/of’ applied to streets exception, see City of Philadelphia v. Melendez, 156 Pa. Commw. 271, 627 A.2d 234 (1993).


author: LUCCHINO, J.,

text:
    Schake v. Boyer

      June 29, 2001
    C.P. of Allegheny County,
    no. FD 98-04528-001.

      Craig Alexander, for plaintiff.

      Luke Kelly, for defendant.
   LUCCHINO, J.,

This is an appeal from the court’s November 22, 2000 order that denied the request of defendant/appellant Lynn Schake (Mother) for leave to relocate outside Pennsylvania with the parties’ minor daughter.

BACKGROUND

The parties are the parents of a minor child, Jenna L. Boyer, who was bom on June 20,1995. Mother and plaintiff/appellee Timothy Boyer (Father) have never been married. The parties lived together from Jenna’s birth until February 1998. On December 10, 1998, a consent order of court was entered that gave the parties joint legal custody of Jenna and gave Mother primary physical custody. Father had partial custody every other weekend and for several hours a day on Tuesdays and Thursdays. The parties also split holiday and vacation time. Two subsequent orders relating to custody did not significantly alter that schedule.

After another member of this court granted, on an interim basis, Father’s petition to prevent relocation, Mother filed a petition for relocation with minor child. After a conciliation in this matter, the court ordered psychological evaluations and that Father (the party who sought the evaluations) bear the entire cost thereof. Subsequently, Mother filed a complaint for custody and relocation. That complaint sought the court’s confirmation of Mother’s primary physical custody of Jenna and leave to relocate to Virginia with her. After the psychological evaluations were completed, a full-day hearing was held on October 19, 2000.

Both Mother and Father were raised, met and began rearing Jenna together in the Pittsburgh area. Mother and Father both have friends and relatives living in this region and none in Virginia (except for Jeffrey Suriano, Mother’s then-fiancé). After the parties separated, Mother and Jenna began living with Mr. Suriano in Pittsburgh, until Mr. Suriano took a job as a district manager for Rite Aid Pharmacy Co. in Virginia Beach, VA. Mother’s intention was that she and Jenna would join Mr. Suriano in Virginia. Mother testified that, if she were allowed to relocate to Virginia with Jenna, she and Mr. Suriano would be married. However, if relocation were not permitted, the parties might not get married.

STATEMENT OF MATTERS COMPLAINED OF ON APPEAL

Mother raises, in her statement of matters complained of on appeal, the following issues:

(1) The trial court abused its discretion and/or committed an error of law in failing to hold a prompt “Plowman” [infra] hearing following the filing of the relocation petition as required by law.

(2) Instead, the trial court treated the case as a custody modification case as opposed to a relocation case complete with discovery and psychological examinations which further delayed the trial.

(3) The trial court abused its discretion and/or committed an error of law by misapplying Gruber principles in general and in the following particulars:

(a) In its determination that Mother failed to adequately address and demonstrate a partial custody plan that did not infringe upon Father’s current partial custody rights when the same is not a Gruber principle.

(b) In failing to give weight to the court appointed psychologist’s recommendation for custody (admitted into evidence without objection) which was in fact more restrictive than Mother’s plan.

(c) In its determination that Father’s relationship with the child would not be properly fostered if the move were to occur despite the recommendation of the expert to the contrary.

(d) In its determination that Mother failed to demonstrate that she was moving for other than economic reasons.

(e) In its determination that Mother presented no credible testimony that the move would substantially improve the minor’s quality of life.

(f) In failing to consider all testimony in its determination that the minor’s quality of life would be improved.

(g) In failing to give weight to the benefits of a two person male/female household which the child had previously enjoyed for a period of years.

(h) In failing to give weight to the fact the Mother and her fiancé intended to be married upon the happening of the relocation.

(4) The trial court abused its discretion and/or committed an error of law by failing to take into consideration Father’s continuous failure to pay child support in a timely fashion prior to the filing of the relocation petition.

(5) The trial court abused its discretion and/or committed an error of law by failing to take into consideration Father’s continuous willful disregard for the terms of the current order when making its determination to. deny the relocation petition.

LEGAL STANDARD

In all custody matters, the ultimate issue is the best interests of the children. See e.g., Lee v. Fontine, 406 Pa. Super. 487, 489, 594 A.2d 724, 726 (1991). In a relocation case, this best-interests analysis is made through the prism of the Gruber factors:

“(1) The potential advantages of the proposed move and the likelihood that the move would substantially improve the quality of life for the custodial parent and the child and is not the result of a momentary whim on the part of the custodial parent;

“(2) The integrity of the motive of both the custodial and non-custodial parent in either seeking the move or seeking to prevent it; and

“(3) The availability of realistic, substitute visitation arrangements that will adequately foster an ongoing relationship between the child and the non-custodial parent.” Gruber v. Gruber, 400 Pa. Super. 174, 184-85, 583 A.2d 434, 439 (1990). Any judicially determined preconditions amplify, but do not alter, the best interest standard. See Lee, 406 Pa. Super. at 489, 594 A.2d at 726.

DISCUSSION

Relocation was denied in this case for two main reasons: (1) Mother’s failure to show that the proposed move would substantially improve the quality of life for Mother and Jenna and (2) the unavailability of adequate substitute visitation arrangements.

Quality of Life Improvement

Mother failed to sufficiently establish that her quality of life, and that of Jenna’s, would be improved by the move. Mother and Mr. Suriano testified in only the most general terms about the quality of schools and neighborhoods in Virginia. Instead, Mother relied heavily on the benefit of her being reunited with Mr. Suriano. While it is true Mother said she intended to marry Mr. Suriano if permitted to relocate, the court put slightly less weight on this fact than it otherwise would have because of Mother’s history of twice having been engaged without getting married.

One of the chief benefits Mother contended supported relocation was economic. Because of Mr. Suriano’s income, she would not be required to work if she lived in Virginia. However, Mother was not working while living in Pennsylvania. She testified that Mr. Suriano paid all her bills. She also testified that she could not work because she could not find daycare for Jenna. If she moved to Virginia, she intended to attend school and possibly also seek employment. Mother did not adequately explain, however, why she would be better able to engage in those activities in Virginia than in Pennsylvania (other than the implication that Mr. Suriano would be supporting her in Virginia but not in Pennsylvania). While there would be some benefit to Mother to relocate in that she could be with her fiancé, there was no credible testimony that this would improve Jenna’s life in any significant way.

The most tangible benefit of such a move would be Mr. Suriano’s higher income in Virginia compared to Pittsburgh, but Mr. Suriano already has moved to Virginia and appeared to have no intention of returning to Pittsburgh if relocation were denied. Thus, in one sense, Mother and Jenna already were getting the benefit of Mr. Suriano’s increased income. In any event, an economic benefit is insufficient in itself to satisfy the first Gruber factor. See Maurer v. Maurer, 758 A.2d 711, 714 (Pa. Super. 2000). As the Maurer court stated, there needs to be a showing of other benefits of relocation such as a “return to a network of family or friends,... educational opportunities, or... an improved physical environment.” Id. Mother made no such showing and, in fact, Mother’s network of family and friends is in Pennsylvania, not Virginia. For these reasons, the court found that the first Gruber factor was not satisfied.

Substitute Visitation Arrangements

Under Mother’s proposal, if relocation had been permitted, Jenna would have spent one weekend a month during the school year with Father, as well as extended vacation and holiday time. This arrangement was unacceptable because it would have subjected a 5-year-old child to a 16-hour round-trip car trip once a month. (Having the child fly to Pittsburgh was not a suitable option because of her age.) Mother’s suggestion that Father travel to Virginia (or to Mother’s sister’s home in Maryland) once a month to visit the child also was unworkable. For Father to visit with a 5-year-old in a town eight hours from his home is not conducive to fostering an ongoing relationship between Father and Jenna, because there was no showing of an adequate place for Father to exercise his custodial time. Father’s regularly spending a weekend in a hotel with a 5-year-old is not appropriate for a child her age, and the alternative, that Jenna visit with Father during the day while staying at Mother’s home at night, largely defeats the purpose of Father’s visit. Meanwhile, if Father elects to pick up Jenna in Maryland, she will not be relieved of the burden of excessive car travel between Virginia and Pittsburgh. Moreover, the court found that giving Father extended periods of custody of a 5-year-old child only during holidays and the summer would be insufficient to properly foster his relationship with Jenna.

The court considered the testimony of Dr. William Fischer, including his recommendation that relocation be permitted. An expert’s opinion, however, does not trump the Gruber factors, which the court found were not satisfied. And even Dr. Fischer expressed a concern about Mother’s willingness to support Jenna’s relationship with Father because of her withholding Jenna from Father on several occasions when he was entitled to the child. Given the difficulty of Father’s maintaining a meaningful relationship with Jenna from a distance, the real possibility that Mother would not adequately support that relationship was another factor that militated against allowing relocation.

Other Issues

Mother complains of the court’s failure to hold a prompt Plowman hearing and its permitting discovery and an expert evaluation. The mandate of Plowman, however, is that a hearing must be held either before relocation or, under exigent circumstances, within a reasonable time thereafter. See Plowman v. Plowman, 409 Pa. Super. 143, 153, 597 A.2d 701, 706 (1991). In this case, no relocation was permitted and a hearing was held before the court ruled. Thus, the Plowman hearing requirement was not violated.

Additionally, Mother filed a complaint for custody and relocation in which she asked the court to confirm her primary custody of the child, thereby injecting the issues relating to primary custody directly into this matter. The court, in responding to a difficult situation, and upon the request of Father, allowed discovery and ordered an expert evaluation. In custody cases, especially, the court is charged with creating a complete record. See e.g., Schwarcz v. Schwarcz, 378 Pa. Super. 170, 198, 548 A.2d 556, 570 (1988), appeal denied, 522 Pa. 578, 559 A.2d 39 (1989), cert. denied, 498 U.S. 815 (1990). Thus, Mother’s complaint in this regard is misguided in that, within reason, it hardly can be error for a trial court in a custody case to create as full a record as possible and give the parties every reasonable opportunity, consistent with the rules and the law, to develop potential evidence.

Mother also complains about the court’s denial of the relocation petition given Father’s failure to make support payments in the summer and fall of 2000. However, before that time, Father had a history of making regular support payments. From December 1999 and through the summer of 2000, Father was off work because of a disability that led to neck surgery in April 2000. After Father’s disability payments ran out in June 2000, Father applied for and began receiving cash assistance. It was starting in June 2000 that Father began to fall significantly in arrears on his support order. Given these facts, the court, while not condoning Father’s failure to pay support regularly, put less weight than it otherwise might have on Father’s support arrears and did not infer therefrom that Father was not committed to the well-being of his daughter.

CONCLUSION

Mother puts great reliance on her contention that Jenna would benefit from growing up in a two-parent family (herself and Mr. Suriano), which benefit would be denied to her if Mother and Jenna were not permitted to relocate. However, this court put greater weight on the fact that Jenna likely would be unable to have a meaningful relationship with Father (who cares about Jenna very much) if Jenna moved to Virginia Beach. Given that Mother and Mr. Suriano met and lived together in Pittsburgh and Mother and Jenna have no ties to Virginia Beach other than Mr. Suriano, it was not in Jenna’s best interests for her to be relocated so far from Father, her extended family and the only home she has known.

For the foregoing reasons, the court’s November 22, 2000 order should be affirmed.

      . Mother and Mr. Suriano, whether intentionally or not, made it seem as though the court, on some level, would be to blame if relocation was denied and, subsequently, Mother did not marry Mr. Suriano. As unfortunate as that circumstance might be, the court rejects the notion that its decision should be swayed significantly by that possibility. The court’s task is to determine, within the framework of Gruber what is in Jenna’s best interests; its task is not to preserve or enhance the romantic life of Mother at the possible expense of Jenna’s best interests.


author: SOLOMON, J.,

text:
    Nationwide Mutual Insurance Company v. Harris

      April 6, 2001
    C.P. of Fayette County,
    no. 1963 of 2000, G.D.

      Peter B. Skeel, for plaintiff.

      William M. Radclijfe, for defendant.
   SOLOMON, J.,

Presently before the court are the preliminary objections of the plaintiff, Nationwide Mutual Insurance Company, to the new matter and counterclaim of the defendant, Clyda Harris, and to the petition to compel arbitration filed by the defendant.

BACKGROUND

The defendant, Clyda Harris, was involved in an automobile accident on October 19, 1998, with another driver. She subsequently settled her claims with the other driver’s liability carrier, and with the underinsured carrier providing coverage for her own vehicle. The defendant then made a claim against Nationwide under a policy which lists Georgetta Harris, her mother, as the policyholder. Nationwide subsequently filed a declaratory judgment action against Clyda Harris alleging that her underinsured claim against Nationwide arising out of her accident of October 19,1998, was not covered under the policy of Georgetta Harris.

In response to the declaratory judgment action, the defendant filed an answer, new matter, and counterclaim. The new matter alleged that the court had no jurisdiction over the matter because, pursuant to the Nationwide policy, the defendant was entitled to submit the matter to arbitration. The counterclaim alleged that Nationwide acted in bad faith when it filed the declaratory judgment action knowing that the policy provided for arbitration in the event of a dispute. Further, the plaintiff also filed a petition to compel arbitration.

In response to the allegations in the plaintiff’s new matter and counterclaim, Nationwide filed the preliminary objections that are now before the court.

DISCUSSION

Nationwide raises three issues with respect to the defendant’s new matter and counterclaim. First, it contends that she waived the defense of arbitration by raising it in her new matter, instead of by preliminary objection. Second, Nationwide contends that the portion of the defendant’s counterclaim stating that the issue of whether the defendant was an insured should be submitted to arbitration pursuant to the Nationwide policy should be stricken. Third, Nationwide denies that it acted in bad faith when it filed the declaratory judgment action against the defendant.

In determining if the defendant waived the defense of arbitration by raising it in her new matter, rather than by preliminary objection, we must turn our attention to Pa.R.C.P. 1028, which governs preliminary objections. Subsection (a)(6) of the rule states as follows:

“(a) Preliminary objections may be filed by any party to any pleading and are limited to the following grounds:
“(6) pendency of a prior action or agreement for alternative dispute resolution.”

The footnote following this subsection states that “[a]n agreement to arbitrate may be asserted by preliminary objection or by petition to compel arbitration pursuant to the Uniform Arbitration Act, 42 Pa.C.S. §7304, or the common law, 42 Pa.C.S. §7342(a).” (emphasis added) Thus, one who intends to assert an agreement to arbitrate may choose to do so either by filing preliminary objections, or by filing a petition to compel arbitration.

Instantly, the defendant asserted an agreement to arbitrate, which was contained within the Nationwide policy, by filing a petition to compel arbitration pursuant to the Uniform Arbitration Act. Therefore, because the defendant used a proper method of asserting the agreement to arbitrate, Nationwide’s preliminary objection that the defendant waived arbitration by raising it in new matter is denied.

The second issue is whether the arbitration clause in the Nationwide policy gives the defendant the right to demand arbitration. In support of her position, the defendant cites two provisions in the policy, which she claims conflict. The first provision is within endorsement 2360 at page 2, paragraph 2, under the heading “Recovery.” This provision states that “[questions between the injured party and us regarding whether the injured party is an insured under this coverage, or the limits of such coverage, are not subject to arbitration and shall be decided by a court of law.”

The arbitration clause in the policy states as follows:

“If we and the insured disagree about the right to recover damages from the owner or driver of an underinsured motor vehicle or the amount of such damages:

“(1) After written demand for arbitration by either party, each will select a competent arbitrator. ...”

The defendant contends that the language in these two provisions conflicts and, therefore, must be construed against Nationwide as the drafter of the document. However, we do not agree with the defendant’s position that there is a conflict in the language of the two provisions. The first provision cited above clearly indicates that if there is a question as to whether an injured party is an insured it must be decided by a court of law, not by arbitration. The arbitration clause, on the other hand, states that if Nationwide and the “insured” disagree about the right to recover damages, then, at the request of either party, the issue will be decided by arbitration. This language suggests that the provision applies only to one who is an “insured.”

Here it has not yet been determined whether the defendant is an insured under the Nationwide policy. In fact, that is precisely the question that Nationwide is seeking to have answered in its declaratory judgment action. Thus, the arbitration clause in the Nationwide policy does not give the defendant the right to demand arbitration to decide the issue of whether she is an insured.

Finally, since the Nationwide policy does not require that this matter be submitted to arbitration, the bad faith claim made by the defendant will be dismissed.

In conclusion, we find that the defendant did not waive the defense of arbitration by raising the issue in her new matter, instead of by way of preliminary objection. Further, there is no conflict in the provisions of the policy set forth, supra, and the arbitration clause in the Nationwide policy does not grant the defendant the right to have the issue of whether the defendant is an insured submitted to arbitration. Finally, we dismiss the defendant’s bad faith claim for the reasons set forth above. Therefore, we must deny the defendant’s petition to compel arbitration and we grant the preliminary objections of the plaintiff as to paragraphs 25,26, 27, and 28(3) of the defendant’s counterclaim, and the same are stricken.

Wherefore, we will enter the following order.

ORDER

And now, April 6, 2001, it is hereby ordered and directed that the petition of the defendant to compel arbitration is denied. It is further ordered and directed that the preliminary objections of the plaintiff as to paragraphs 25, 26, 27, and 28 (3) of the counterclaim of the defendant are granted and paragaphs 25,26,27, and 28(3) are stricken.


author: KURTZ, J.,

text:
    Muir v. PennDOT
    C.P. of Huntingdon County,
    no. 97-107.

      May 15, 2001

      Joseph Grappone, for plaintiff.

      Gerhard Schwaibold, for defendant.
   KURTZ, J.,

This case came on for argument May 3, 2001, on motion for summary judgment made by the defendant.

The factual background will be cast in a light most complimentary to the plaintiffs’ position.

Plaintiffs reside in Porter Township, Huntingdon County, Pennsylvania. Their residence is located near the intersection of SR 3039 and SR 0022.

In 1996, defendant PennDOT widened SR 0022 west of plaintiffs’ home and, as a part of this project, did extensive work at the intersection of SR 3039 and SR 0022 to improve drainage and safety. Prior to this work, plaintiffs had never experienced flooding on their property. After the work, on July 19,1996, and again on August 4, 1996, flooding occurred on plaintiffs’ real estate causing damage to the structure of the plaintiffs’ house and garage, landscaping and their personal property.

Plaintiffs theorize in their complaint that reconstruction of the intersection was based upon a defective design that culminated in the creation of a dangerous condition that caused the flooding. They posit in that pleading that:

“(8) The reconstruction aforesaid was dangerous and defective in that:
“(a) the impervious area of the roadway was increased without any proper adjustment for detention of the increased storm water runoff created thereby.
“(b) the drainage system for the roadway that does exist is of improper design and concentrates all runoff onto the plaintiffs’ property.
“(c) down stream drainage structures are negatively impacted by the reconstruction and were not taken into account by the defendant in its design.
“(d) storm water runoff has been increased and not detained in violation of the Commonwealth’s rules and regulations governing such matters resulting in flooding, a dangerous condition.” (Plaintiffs’ complaint, ¶8.)

Plaintiffs’ discovery probata however was not in accord with their complaint allegata. Their expert — Keller Engineers — issued a report in 1997 in which the opinion was expressed that “the problem experienced by Mr. Muir is associated with maintenance of upslope drainage facilities rather than inadequate design.” (Drainage investigation report, attached to defendant’s brief as exhibit A.) A clogged inlet was determined to be the reason for the flooding on plaintiffs’ property, and this fact and opinion, argues PennDOT, forecloses liability on its part.

ANALYSIS

I. The Summary Judgment Standard

A court may grant summary judgment “when the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits demonstrate that there exists no genuine issue of material fact and the moving party is entitled to judgment as amatter of law. Pa.R.C.P. 1035.2, 42 Pa.C.S. In determining whether to grant summary judgment a trial court must resolve all doubts against the moving party and examine the record in a light most favorable to the non-moving party. Id. Summary judgment may only be granted in cases where it is clear and free from doubt the moving party is entitled to judgment as a matter of law. Id.” Ney v. Axelrod M.D., 723 A.2d 719, 721 (Pa. Super. 1999).

II. Discussion

In this case, PennDOT as noted, is convinced that since plaintiffs’ expert has opined that lax maintenance as opposed to faulty design was the cause of plaintiffs’ problem, there can be no recovery since sovereign immunity defeats the claim.

Defendant perceives and argues an exception to immunity, specifically 42 Pa.C.S. §8522(b)(4), which provides:

“Section 8522. Exceptions to sovereign immunity
“(b) Acts which may impose liability — The following acts by a Commonwealth party may result in the imposition of liability on the Commonwealth and the defense of sovereign immunity shall not be raised to claims for damages caused by:
“(4) Commonwealth real estate, highways and sidewalks — A dangerous condition of Commonwealth agency real estate and sidewalks, including Commonwealth-owned real property, leaseholds in the possession of a Commonwealth agency and Commonwealth-owned real property leased by a Commonwealth agency to private persons, and highways under the jurisdiction of a Commonwealth agency, except conditions described in paragraph (5).”

We first note that exceptions to governmental immunity must be strictly construed. Finn v. City of Philadelphia, 541 Pa. 596, 601, 664 A.2d 1342, 1344 (1995). Next, we quote from Finn the standard for proper invocation of the exception relied upon in this case pointing out that Mary Finn sought to recover for injuries sustained when she fell on a city sidewalk due to an accumulation of grease on the pavement. Chief Justice Flaherty reviewed precedent, and opined:

“The common theme of all these cases is that liability depends, first, on the legal determination that an injury was caused by a condition of government realty itself, deriving, originating from, or having the realty as its source, and, only then, the factual determination that the condition was dangerous.

“What is necessary, therefore, to pierce the Commonwealth agency’s immunity is proof of a defect of the sidewalk itself. Such proof might include an improperly designed sidewalk, an improperly constructed sidewalk, or a badly maintained, deteriorating, crumbling sidewalk. Here, however, we have no such allegation or proof. We have a perfectly designed and constructed sidewalk, undamaged, upon which an unidentified individual or individuals deposited a foreign substance which caused appellant’s injury.” Finn, at 605, 664 A.2d at 1346.

Mrs. Finn was denied recovery.

In this case, the dangerous condition complained of and attested to by plaintiffs’ expert was “on” the Commonwealth real estate but clearly was not “of’ the real estate. The defect that allegedly created the dangerous condition that ultimately resulted in injury to plaintiffs is not therefore of the kind which Pennsylvania law recognizes as an exception to sovereign immunity.

In reaching this judgment, we have considered the 1997 decision of the Supreme Court in Grieff v. Reisinger, 548 Pa. 13, 693 A.2d 195 (1997), where a seemingly different result was reached. However, that case was decided under the Political Subdivision Tort Claims Act where the real property exception to governmental immunity provides for liability for the “care, custody or control of real property in the possession of the local agency,....” 42 Pa.C.S. §8542(b)(3). That language is simply not a part of the exception at issue in this case.

Accordingly, we will reluctantly grant the motion and dismiss this action.

ORDER

And now, May 15, 2001, for the reasons set forth in a memorandum filed this date, the motion of defendant for summary judgment is granted and this action is dismissed.

      . Rule 1035.2, Pa.R.C.P.

      . 42 Pa.C.S. §8521.