author: NEALON, J,

text:
    AJT Properties LLC v. Lexington Insurance Co.

      Gene E. Goldenziel, for plaintiff.

      Patrick R. Casey, Joseph G. McHale, & George E. Saba, for defendant.
    July 26, 2012
   NEALON, J,

A commercial property owner which suffered flood damage in June 2006 has filed suit against its building and personal property insurer that has denied coverage based upon a policy exclusion for flood loss occurring on property located within a Special Flood Hazard Area (SFHA). The insurer has filed a motion for summary judgment on the ground that there is no genuine issue of material fact that the subject property is situated in an SFHA such that the insurer is allegedly entitled to judgment as a matter of law by virtue of the unambiguous policy language excluding coverage for flood loss in such a zone.

The summary judgment record reflects that the property was inspected in May 2004 and determined not to be in an SFHA and that the property owner was issued a Federal Emergency Management Agency (FEMA) “Standard Flood Hazard Determination” to that effect. Two months after the insurer had issued the building and personal property policy to the owner in January 2006, it had the property surveyed in March 2006 to determine its insurability, and that inspection likewise concluded that the property was not in an SFHA district. The inspection report containing those flood exposure survey findings was forwarded to AJT. However, after the owner submitted his flood loss claim following the flood in late June 2006, the insurer retained a new inspector to examine the property’s flood zone classification and that inspector issued a report concluding that the property is in an excluded SFHA. The authors of the May 2004 and March 2006 flood exposure surveys have revisited their original conclusions and now concur with the insurer’s second inspector that the property is in an SFHA.

At the time that the owner purchased the insurance policy in early 2006, the insurer sold flood insurance for properties in SFHA zones, but the owner was not offered the opportunity to purchase such insurance since the parties believed that the property was not in an SFHA, as per the flood exposure inspection conducted on behalf of the insurer in March 2006. There are genuine issues of material fact as to whether the owner would have purchased SFHA flood insurance if the insurer had performed a proper survey in March 2006 and had advised the owner that the property was located in an excluded SFHA. Depending upon how the jury resolves those factual issues, the insurer may be equitably estopped from denying coverage based upon its post-claim survey establishing that the property is in an excluded SFHA. Therefore, the insurer’s motion for summary judgment based upon its SFHA exclusion will be denied, as will its alternate summary judgment arguments.

I. FACTUAL BACKGROUND

Defendant Lexington Insurance Company (“Lexington”) has filed a motion for summary judgment in this civil action which has been instituted by plaintiff AJT Properties, LLC (“AJT”) against Lexington and AJT’s insurance brokers, defendants Essick & Barr Insurance and VIST Insurance a/k/a VIST Financial, Inc. (“VIST”), seeking to recover damages for real and personal property losses caused by a flood on June 26, 2006. Lexington has denied AJT’s flood damage claim on the primary grounds that the insurance policy excludes coverage for property located in a Special Flood Hazard Area (SFHA) and that AJT’s property is indisputably situated in an SFHA zone. AJT has. filed breach of contract claims against Lexington and VIST and alternative claims against Lexington for estoppel and unjust enrichment. See, AJT Properties, LLC v. Lexington Insurance Company, 2012 WL 1855809, at * 2 (Lacka. Co. 2012).

When the summary judgment record is viewed in the light most favorable to AJT as the non-moving party, it reveals that AJT owns real estate and a warehouse building at 40 Poplar Street, Scranton where Quaker Maid Cabinetry (“Quaker Maid”) and custom design and manufacturing (“custom design”) maintained their equipment, inventory and personal property in 2006. (Deposition of AJT’s owner, Alexander J. Tarapchak, dated 10/26/11, p. 13; deposition of AJT’s designated corporate representative, Paul Bocan, dated 10/26/11, pp. 12-14). AJT originally utilized Hampson Mowrer Kreitz Insurance as its insurance agent and broker, but upon learning after a 2004 flood that the insurance coverage which Hampson had procured for AJT did not provide flood loss coverage, AJT terminated its relationship with Hampson and retained VIST to act as its insurance agent and broker. (Tarapchak depo., pp. 275-279; Bocan depo., pp. 20-21; plaintiff’s answers to Lexington’s first set of requests for admission filed 2/23/10, ¶11). Subsequent to the 2004 flood but prior to its hiring of VIST, AJT also secured property insurance coverage from Selective Insurance Company (“Selective Insurance”) which was issued through the national flood insurance program. (Tarapchak depo., pp. 281-283). AJT, Quaker Maid and custom design were identified as the named insureds on the selective policy which afforded $500,000.00 in building coverage and $500,000.00 in business personal property coverage for the period from November 12, 2005 through November 12, 2006. (AJT’s “Answer to statement of undisputed material facts of defendant Lexington Insurance Company in its memorandum in support of its motion for summary judgment,” ¶4, attached to AJT’s brief in opposition as exhibit B).

Once VIST was retained by AJT, it contacted a wholesale insurance broker, All-Risks, Ltd., to assist VIST in obtaining insurance coverage for AJT. (Id., ¶5). All-Risks, Ltd. in turn contacted Eastern Risks Specialists, Inc. (“Eastern Risks”) which acts as an underwriter for Lexington and is authorized to accept risks and bind accounts on behalf of Lexington within eastern risk’s level of underwriting authority. (Deposition of Eastern Risks’ designated corporate representative, John E. Groeneveld, CPCU, dated 4/3/12, pp. 13, 17-18, 34-35, 49, 128-129, 131, 161, 176, 181). Lexington is a surplus lines insurer that accepts insurance risks which other insurers will not insure, and Eastern Risks and Lexington are both owned by AIG Insurance. (Id., pp. 11,108,125). At the time that it was contacted by All-Risks, Ltd., Eastern Risks possessed the authority to bind Lexington to insure a property located in an SFHA zone, provided that the policy which was issued included a deductible representing 5% of the total insurable values of at least $1,000,000.00. (Id., p. 177).Eastem Risks reviewed AJT’s application for insurance from the producer, All-Risks, Ltd., and since the insurance requested was within Eastern Risks’ level of underwriting authority with Lexington, it provided a $32,000.00 premium quote on behalf of Lexington and that offer was accepted and the premium was paid by AJT, such that an insurance policy was issued by Lexington on January 5,2006. (Id., pp. 48, 61-62,131). The Lexington policy listed AJT as the sole named insured and provided coverage for the period from January 1, 2006 through January 1,2007. (AJT’s “Answer to statement of undisputed facts,” ¶11). The declarations page for the Lexington policy identifies the covered perils as “all risks of direct physical loss including flood (excluding SFHA)....” (Id., ¶14). Endorsement #001 which accompanied the policy similarly states that any coverage for “[f]lood is excluded at locations wholly or partially within special flood hazard areas (SFHA), areas of 100-year flooding, as defined by the Federal emergency management agency.” (Id.).

The Lexington policy also included endorsement #004 entitled “flood endorsement” which includes some coverages that would otherwise be excluded by the policy’s general provisions. (Groenevelddepo.,pp. 95-97,112-113, 116, 119-120). Endorsement #004 affords coverage for “[w]ater under the ground surface pressing on, or flowing or seeping through” foundations, floors, walls, basements, doors, windows and other openings. (LXU 00178). This additional policy endorsement establishes liability limits of $1,000,000.00 for any “loss or damage caused by or resulting from flood, meaning rising water,...rising (including the overflowing or breaking of boundaries) of...rivers,..., streams and other similar bodies of water...” (Id.).

Although Eastern Risks will “inspect properties to determine their insurability” with Lexington, (Groeneveld depo., pp. 66-67), neither Eastern Risks nor Lexington ever conducted an underwriting inspection prior to binding coverage with Lexington. (Id, pp. 14,34). After the policy was issued to AJT, Eastern Risks retained ISO Properties, Inc. (“ISO”) to inspect AJT’s property “[t]o determine if it was acceptable for coverage under Lexington” and “to make sure that the property was...insurable for Lexington Insurance Company.” (Id, pp. 35, 49). ISO conducted its survey of the property on March 3,2006 and forwarded its report to Eastern Risks. (Id, pp. 82-83). In its report, ISO indicated that AJT’s “building was flooded in the fall of 2004 when the Lackawanna River, 80’ from the building, overran its banks.” (Id, p. 83, exhibit 15, LXU 00070). Eastern Risks was also informed that “[t]he building had 4” of water in the first floor” as a result of that 2004 flood involving the Lackawanna River. (Id.). ISO’s report further notes that after the 2004 flood, a flood protection levee was constructed. (Id.).

Based upon the inspection that was performed at Eastern Risk’s request, ISO concluded that AJT’s property is located in a “CX” zone, not an SFHA. (Id.). Eastern Risks’ corporate designee has acknowledged that it would be “unusual” for a property to be located in a CX zone if it is situated within 100 feet of a river and has been involved in a flood within the past two years. (Id., p. 139). Despite the fact that Eastern Risks was authorized by Lexington “to underwrite insurance for properties within a special flood hazard area,” AJT was not afforded the option of purchasing flood insurance for property located in an SFHA zone. (Id., pp. 176-177).

On June 26, 2006, a flood occurred at AJT’s Poplar Street property and AJT submitted building and personal property loss claims to Selective Insurance and Lexington. (Lexington’s statement of undisputed facts, ¶15; AJT’s answer to statement of undisputed material facts, ¶15). Selective Insurance paid AJT its building coverage limits of $500,000.00 and its business personal property limits of $500,000.00. (Id., ¶17). As part of its claim investigation, Lexington retained Urban Engineers, Inc. to examine whether AJT’s property was located in an SFHA at the time of the flood, and Urban Engineers, Inc. subsequently issued a report which concluded that FEMA map no. 4205380010B (dated 8/15/80) indicates that AJT’s property is positioned in an SFHA. (Id., ¶¶18-19). Lexington thereafter denied coverage for the flood loss of June 26, 2006 based upon its policy exclusion for flood damage occurring wholly or partially within an SFHA. (Docket entry no. 175, ¶7).

AJT instituted this litigation on July 21, 2008 and later filed a complaint against Lexington, VIST and other parties on August 29, 2008. (Docket entry nos. 2,7). AJT’s initial complaint set forth breach of contract claims against Lexington and VIST and a statutory bad faith claim against Lexington pursuant to 42 Pa.C.S. §8371. (Docket Entry No. 7, ¶¶17-36). Senior Judge Harold A. Thomson, Jr. later dismissed AJT’s bad faith claim, and AJT filed an amended complaint on March 12, 2009 outlining more specific causes of action for breach of contract against Lexington and VIST. (Docket entry nos. 70,71). After Judge Thomson granted AJT’s petition to file a “Revised second amended complaint,” AJT filed another complaint which not only included its original breach of contract claims against Lexington and VIST, but also averred claims against Lexington for estoppel and unjust enrichment. (Docket entry nos. 99-100).

Lexington has now filed a motion seeking the entry of summary judgment, or in the alternative, the grant of partial summary judgment. Lexington first requests summary judgment in its entirety on the grounds that AJT’s property is “indisputably” located in an SFHA and that Lexington’s policy clearly excludes coverage for property in such a zone. (Docket entry no. 210, pp. 2,12-14). Lexington alternatively seeks to reform the policy based upon mutual mistake so as to exclude coverage for personal property which it contends that neither party believed was insured. (Id., pp. 19-21). In the event that Lexington’s first two arguments are rejected and enforceable coverage is recognized, Lexington posits that AJT’s claim is contractually capped at $2,500.00 since its policy language limits coverage to $2,500.00 for personal property of others, and the personal property that was destroyed in the flood was owned by Quaker Maid and custom design. (Id., pp. 21-23).

AJT raises aseries of arguments in opposing Lexington’s motion for total or partial summaiy judgment. First, AJT maintains that flood loss coverage exists since Lexington improperly engaged in “post-claim underwriting” by waiting until after AJT presented its claim to conduct its underwriting analysis in order to deny coverage on the ground that the property is in an SFHA. (Docket entry no. 189, ¶7; Docket entry no. 226, pp. 18,21-23 and exhibit A, p.7). Second, AJT asserts that the language of endorsement #001 and endorsement #004 creates an ambiguity as to whether flood loss coverage is available to AJT, which ambiguity must be construed in AJT’s favor and resolved by finding coverage. (Docket entry no. 226, pp. 10-11, 20-21,24-27). Third, because Lexington’s representative conducted an inspection in March 2006 and concluded that AJT’s property was located in a CX zone, AJT submits that Lexington is estopped from denying coverage based upon a post-claim finding that the property is in an SFHA. (Docket entry no. 189, ¶5; Docket entry no. 226, pp. 14-15). Last, AJT asserts that there are triable issues of fact regarding the $2,500.00 property coverage limit allegedly applicable to property owned by Quaker Maid and custom design inasmuch as AJT, Quaker Maid and custom design are affiliated entities. (See, deposition of Paul Bocan on 10/26/11, p. 12,14, Docket entry no. 224). Those arguments will be addressed ad seriatim.

II. DISCUSSION

(A) STANDARD OF REVIEW

Summary judgment is appropriate “[ojnly where there is no genuine issue as to any material fact and it is clear that the moving party is entitled to judgment as a matter of law.” Dailey v. A. W. Chesterton, Inc., 37 A.3d 1175, 1179 (Pa. 2012). “On this critical question, the party who brought the motion has the burden of proving that no genuine issue of fact exists.” Stimmler v. Chestnut Hill Hospital, 602 Pa. 539, 554, 981 A.2d 145, 154 (2009). In making that determination, “we view the record in the light most favorable to the non-moving party, and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party.” Barnett v. SKF USA, Inc., 38 A.3d 770, 776 n. 6 (Pa. 2012).

“Generally, the proper construction of a policy of insurance is a matter of law which may properly be resolved by a court pursuant to a motion for summary judgment.” Safe Auto Insurance Company v. Berlin, 991 A.2d 327, 331 (Pa. Super. 2010); Nationwide Mut. Inc. Co. v. Esgro, 2011 WL 2294247, at * 5 (Lacka. Co. 2011). When deciding an insurance coverage issue by way of a motion for summary judgment, “we must review the record in the light most favorable to the non-moving party, granting it the benefit of all reasonable inferences and resolving all doubts in its favor.” Bishops, Inc. v. Penn National Insurance, 984 A.2d 982, 989 (Pa. Super. 2009); Erie Insurance Exchange v. Soroka, 2011 WL 2516797, at * 4 (Lacka. Co. 2011), aff’d, no. 1086 MDA 2011 (Pa. Super. Mar. 8, 2012). As with all motions for summary judgment, a party may obtain a judgment with respect to an insurance coverage issue only where there is no genuine issue as to any material fact and it is clear that the moving party is entitled to judgment as a matter of law. Ross v. Foremost Insurance Company, 998 A.2d 648, 651 (Pa. Super. 2010).

(B) POST-CLAIM UNDERWRITING

AJT advocates the recognition of a proscription against “post-claim underwriting” in Pennsylvania, and submits that Lexington is foreclosed from denying coverage based upon an underwriting determination that it first conducted after AJT presented its flood loss claim. AJT cites Northwestern Mutual Life Insurance Company v. Babayan, 2004 WL 1902516 (E.D.Pa. 2004) as the sole authority for adopting a post-claim underwriting ban in Pennsylvania. (Docket entry no. 226, pp. 21-23). Lexington has not specifically addressed the concept of post-claim underwriting in its original and supplemental briefs that it has filed in support of its motion for summary judgment. (Docket entry nos. 210, 229).

Underwriting is “the process, fundamental to the concept of insurance, of deciding which risks to insure and which to reject in order to spread losses over risks in an economically feasible way.” Hailey v. California Physicians’ Service, 158 Cal. App. 4th 452, 465, 69 Cal. Rptr. 3d 789, 799 (2008). The risk assessment task of underwriting is typically conducted prior to the issuance of an insurance policy “to allow the insurer to ascertain the probability of its incurring liability for any loss that the insured might sustain and, therefore, whether it wishes to assume the risk of that loss.” Cady & Gates, “post-claim underwriting,” 102 W.Va.L.Rev. 809, 812 (2000). Post-claim underwriting occurs when an insurer “wait[s] until a claim has been filed to obtain information and make underwriting decisions which should have been made when the application [for insurance] was made, not after the policy was issued.” Lewis v. Equity Nat. Life Ins. Co., 637 So.2d 183, 186 (Miss. 1994). Commentators who have condemned the practice of post-claim underwriting have argued that it enables the insurer to commence “[a] n investigation and assessment of the risk presented by the insured...only after the insurer is confronted with the prospect of contract performance” and to “marshal its resources to discover any historical minutiae related to the insured that might serve as an arguable basis” for “a posthoc rationale for rescission” of the policy. Cady & Gates, supra, at 810. Jurisdictions which have found post-claim underwriting to be violative of an insurer’s duty of good faith have reasoned:

It is patently unfair for a claimant to obtain a policy, pay his premiums and operate under the assumption that he is insured against a specified risk, only to learn after he submits a claim that he is not insured, and, therefore, cannot obtain any other policy to cover the loss. The insurer controls when the underwriting occurs.... If the insured is not an acceptable risk, the application should be denied up front, not after a policy is issued. This allows the proposed insured to seek other coverage with another company since no company will insure an individual who has suffered serious illness or injury.

Lewis, 637 So.2d at 189 (emphasis in original); Hailey, supra (same).

In the Babayan decision cited by AJT, the insurer denied Babayan’s claim for disability benefits on the ground that she failed to disclose certain medical conditions on her insurance application. Relying upon the Mississippi Supreme Court holding in Lewis and the West Virginia law review article quoted above, Babayan argued that her insurer’s review of her application and corresponding denial of her claim constituted post-claim underwriting. Babayan, supra, at * 16-17. In declining to accept Babayan’s proposition, the federal district court stated:

While there might be local precedent that supports Babayan’s contention that Pennsylvania courts can consult the scholarship of other jurisdictions in deciding these issues, the inescapable conclusion is that no Pennsylvania law forbade [the insurer] from conducting post-claim underwriting. As a federal court exercising its diversity jurisdiction and interpreting state law, the court believes that it would be imprudent to graft Mississippi law onto the circumstances in order to empower Babayan to assail post-claim underwriting where it is unclear whether Pennsylvania courts even would permit her arguments.

Id., at* 17.

Babayan appealed the trial court ruling and asserted that the United States Court of appeals for the third circuit “should predict that the Pennsylvania Supreme Court would conclude that ‘post-claim underwriting’ may constitute bad faith.” Northwestern Mutual Life Insurance Company v. Babayan, 430 F.3d 121, 137-138 (3d Cir. 2005). The appellate court noted that the insurer in Lewis “admittedly failed to perform any underwriting on the policy until after the insured filed her claim,” and that “[a] subsequent decision interpreting Lewis...made a distinction between post-claim underwriting and post-claim investigation of eligibility.” Id., at 138 n. 23. The third circuit observed “that the concept of ‘post-claim underwriting’ itself is nebulous, particularly because it is difficult to draw a distinction between post-claim eligibility investigation and post-claim underwriting.” Id., at 138. Finding that “it is not bad faith to conduct a thorough investigation into a questionable claim,” the court similarly rejected Babayan’s argument and concluded that “Babayan’s concept of ‘post-claim underwriting’ would usurp this general principle and prevent insurers from engaging in post-claim investigations, even in the face of incontrovertible evidence that an insured made a clear misrepresentation.” Id.

No state or federal court in Pennsylvania has recognized, or even analyzed, the validity of a “post-claim underwriting” theory in the context of a property damage claim. But even assuming arguendo that such a doctrine is cognizable in this Commonwealth, it is clearly inapplicable in this case. Those jurisdictions which recognize post-claim underwriting as a prohibited practice apply it only to situations where “an insurer simply fails to perform any actual underwriting until after a claim has been made.” Harper v. Fidelity & Guaranty Life Insurance Company, 234 P.3d 1211, 1221 (Wyo. 2010) (citing Lewis, supra.) Instantly, Lexington did not fail to conduct any underwriting prior to the flood on June 26, 2006. On the contrary, Lexington had an underwriting inspection of the property completed in early March 2006, almost three months prior to the flood and AJT’s resultant claim.

The underwriting analysis in March 2006 erroneously concluded that AJT’s property was located in a CX zone, whereas Lexington’s subsequent investigation of AJT’s flood loss claim determined that the property was situated in an SFHA. Since an underwriting examination of the property was actually conducted more than two months prior to the flood, Lexington’s post-claim investigation of the proper flood zone classification did not constitute improper post-claim underwriting. See, Babayan, 430 F.3d at 138-139. Thus, it is unnecessary to predict whether the Pennsylvania Supreme Court would prohibit post-claim underwriting and regard that practice as bad faith conduct by a property insurer since the uncontroverted facts of this case do not support a claim of post-claim underwriting.

(C) INSURANCE POLICY CONSTRUCTION

AJT next contends that Lexington’s policy is ambiguous with regard to the existence of flood insurance coverage, as a result of which Lexington’s motion for summary judgment should be denied. “The interpretation of an insurance contract regarding the existence or nonexistence of coverage is generally performed by the court.” Donegal Mutual Insurance Company v. Baumhammers, 595 Pa. 147, 154-155, 938 A.2d 286, 290 (2007); Penn-America Ins. Co. v. Peccadillos, Inc., 27 A.3d 259, 264 (Pa. Super. 2011), app. denied, 34 A.3d 832 (Pa. 2011); AJT Properties, LLC v. Pennsylvania Lumbermens Mut. Ins. Co., 2009 WL 1904103, at *4 (Lacka. Co. 2009). Insurance policies are contracts, and as such, are governed by the rules of contract interpretation. Miller v. Poole, 2012 WL 1980647, at * 2 (Pa. Super. 2002). The goal of insurance contract interpretation is “to ascertain the intent of the parties as manifested by the terms used in the written insurance policy.” Erie Insurance Exchange v. Conley, 29 A.3d 389, 392 (Pa. Super. 2011); Esgro, supra, at *6.

Where the language of the insurance policy is clear and unambiguous, a court is required to give effect to that language. Allstate Fire & Casualty Insurance Company v. Hymes, 29 A.3d 1169, 1172 (Pa. Super. 2011), app. denied, 2012 WL 1739017 (Pa. 2012); Pennsylvania Lumbermens Mut. Ins. Co., supra, at * 3-4. However, if the policy provision is ambiguous, it must be construed in favor of the insured and against the insurer as the drafter of the policy which controls coverage. Conley, supra; Genaeya Corp. v. Horco National Insurance Company, 991 A.2d 342, 346 (Pa. Super. 2010). Policy language is ambiguous “if it is reasonably susceptible of different constructions and capable of being understood in more than one sense.” Miller, supra, at * 3; Petrochko v. Nationwide Mutual Insurance Company, 15 D. & C. 5th 312, 319 (Lacka. Co. 2010), aff’d, 38 A.3d 917 (Pa. Super. 2011). Ambiguity “is not a question to be resolved in a vacuum,” and insurance contract terms may be deemed “ambiguous if they are subject to more than one reasonable interpretation when applied to a particular set of facts.” Madison Construction Company v. Harleysville Mutual Insurance Company, 557 Pa. 595, 606, 735 A.2d 100, 106 (1999); Hymes, supra.

An insurance provision is not rendered ambiguous merely because the parties do not agree upon its proper construction. Donegal Mutual Insurance Company v. Raymond, 899 A.2d 357, 361 (Pa. Super. 2006); HARIE v. Lycoming County Housing Authority, 58 D. & C. 4th 321, 343 (Lacka. Co. 2001), aff’d, 809 A.2d 1096 (Pa. Cmwlth. 2002). Nor should the court “distort the meaning of the language or resort to a strained contrivance in order to find an ambiguity.” D’Adamo v. Erie Insurance Exchange, 4 A.3d 1090, 1096 (Pa. Super. 2010), app. denied, 611 Pa. 656, 26 A.3d 483 (2011); Petrochko, supra at 319. Rather, “[wjhen analyzing an insurance policy, a court must construe words of common usage in their natural, plain and ordinary sense.” D’Adamo, supra (quoting Continental Casualty Company v. Pro Machine, 916 A.2d 1111, 1118 (Pa. Super. 2007)).

It is undisputed that paragraph “l.g.l)” of Section B of the policy entitled “Exclusions” states that Lexington “will not pay for loss or damage caused directly or indirectly by...[f]lood, surface water,...overflow of any body of water, or their spray, all whether driven by wind or not.” (LXU 00156-157). As noted above, endorsement #001 further provides that any insurance coverage for “[f]lood is excluded at locations wholly or partially within Special Flood Hazard Areas (SFHA), areas of 100-year flooding, as defined by [FEMA].” (LXU 00175). Endorsement #004 affords coverage for water flowing or seeping through foundations, floors, walls or openings and provides liability limits of $1,000,000.00 for damage caused by “flood, meaning rising water,...rising (including the overflowing or breaking of boundaries) of...rivers,...streams and other similar bodies of water....” (LXU 00178).

Relying upon the report of its insurance underwriting expert, Mr. Akos Swierkiewicz, AJT posits that the foregoing policy provisions and endorsements create ambiguities relative to the existence of flood insurance coverage. Mr. Swierkiewicz states that “endorsement #004 includes coverage which would be excluded under l.g.l)” of section B “exclusions” set forth in the policy. (Docket entry no. 26, exhibit A, p. 6). With respect to the express exclusion in the declarations page and endorsement #001 for flood loss occurring in an SFHAzone, Mr. S wierkiewicz proposes that a post-claim email from Lexington’s claims adjuster to Eastern Risk’s underwriter on July 12, 2006 demonstrates “[t]he ambiguity of policy no. 1177937.” (Id., p. 7). In that e-mail, Lexington’s adjuster indicated, and Eastern Risk’s representative confirmed, that “ [i] f only 1 location is listed, and the location is in a 100 yr. flood zone..., it would seem that the flood coverage provided by endorsement [#004] would never be available to the insured [AJT].” (Id.).

Notwithstanding Mr. Sienkiewicz’s proposed construction of Lexington’s policy, it is well settled that “the interpretation of an insurance policy is a question of law for the court.” Executive Risk Indemnity. Inc. v. Signa Corp., 987 A.2d 1170, 1172 (Pa. Super. 2009); Continental Casualty Company, 916 A.2d at 1118 (Pa. Super 2007). The absence or existence of an ambiguity in a contract is likewise an issue of law for the court to decide. International Diamond Importers. Ltd. v. Singularity Clark, L.R, 40 A.3d 1261, 1278 (Pa. Super. 2012). Parol evidence may be considered only if the court first declares the policy language to be ambiguous, such that it is necessary for the trier of fact to review such extraneous evidence in order to resolve what the parties had intended by the ambiguous provision. Id.; Betz v. Erie Insurance Exchange, 957 A.2d 1244, 1253 (Pa. Super. 2008), app. denied, 606 Pa. 659, 995 A.2d 350 (2010).

The provisions of Lexington’s policy and endorsements #001 and #004 are clear, unequivocal and reconcilable and effect may be given to the language of each provision. Paragraph “l.g.l)” of section B of the policy generally excludes coverage for damage caused directly or indirectly by flood or overflow of any body of water. Mr. Swierkiewicz is correct that the general provision in paragraph “l.g.l)” is superseded by endorsement #004 which specifically provides coverage of $1,000,000.00 for damage caused by flood, including rising water from the overflow of rivers, streams and other similar bodies of water. See, Trombetta v. Raymond James Financial Services, Inc., 907 A.2d 550, 560 (Pa. Super. 2006) (“... the specific controls the general when interpreting a contract.”). However, as per the plain language of the declarations page and endorsement #001, such flood loss coverage is afforded only if the insured property is not wholly or partially located within an SFHA zone. Lesko v. Frankford Hospital-Bucks County, 609 Pa. 115, 123-124, 15 A.3d 337, 342 (2011) (“In determining the intent of the contracting parties, all provisions in the agreement will be construed together and each will be given effect”).

Consequently, the unambiguous language of the policy and endorsements furnishes flood loss coverage of $1,000,000.00 to an insured, provided that the property in question is not situated in an SFHA (100 year flood plain). At the time that the Lexington policy was purchased, and during the entire policy period prior to June 26, 2006, AJT and Lexington operated under the belief that AJT’s warehouse was located in a CX zone (500 year flood plain). Absent the application of factually supported estoppel principles, the written provisions of Lexington’s policy and endorsements are not reasonably susceptible of being understood as furnishing flood loss coverage for property in an SFHA. See, Trizechahn Gateway, LLC v. Titus, 601 Pa. 637, 653, 976 A.2d 474, 483 (2009) (when determining whether contract language is ambiguous and reasonably susceptible of different constructions, “[t]he ‘reasonably’ qualifier is important: there is no ambiguity if one of the two proffered meanings is unreasonable.”). Since no ambiguity exists, it would be inappropriate to consider parol evidence of a post-claim email communication between Lexington and Eastern Risks. See, Miller, supra, at * 2 (parol evidence is admissible only where an ambiguity is present and extrinsic proof if necessary to clarify or resolve the ambiguity). Therefore, there is no merit to AJT’s claim that the policy is ambiguous relative to flood insurance coverage in an SFHA zone. What remains to be addressed, however, is whether Lexington is estopped from denying coverage based upon its underwriting investigation in March 2006 which concluded that AJT’s property is in a CX zone.

(D) ESTOPPEL

Two months after the insurance policy was issued to AJT, Lexington commissioned a survey of AJT’s property for underwriting purposes. During that “flood exposure” survey in March 2006, AJT advised the inspector, ISO, that the property had been flooded in September 2004 when the Lackawanna River overran its banks and that AJT’s warehouse had four inches of water in the first floor at that time. AJT further informed ISO that “[w]hen a flood warning is issued, stock is stored on pallets or put in trailers and removed from the area.” (LXU00074). ISO noted in its report that AJT’s building “is located 80’ from the banks of the Lackawanna River.” (Id.).

Based upon its review and survey of the property, Lexington’s inspector issued a report dated March 3,2006 which concluded “[t]hat flood zone is CX,” i.e., beyond the 500 year flood plain. (LXU00070). ISO’s survey findings and recommendations were forwarded to AJT. (Bocan depo., pp. 99-100; Tarapchak depo., pp. 287-289). ISO’s conclusion that AJT’s property was not located in an SFHA zone was consistent with an earlier FEMA “Standard Flood Hazard Determination” that was made by LSI Flood Services on May 27, 2004. (Id., pp. 56-57, 98, 103, defendants’ exhibit no. 21). Prior to the flood on June 26, 2006, no survey had found that 40 Poplar Street was in an SFHA. In fact, when the owner of AJT, custom design and Quaker Maid asked VIST about the SFHA exclusion noted on the Lexington policy, he was advised that it did not apply to AJT. (Tarapchak depo., pp. 62-64, 66, 100-101, 284-285, 289).

AJT submits that since it relied upon Lexington’s underwriting conclusion that the property was not in an excluded SFHA, Lexington is estopped from denying coverage based upon post-claim inspections revealing that the property is located in a 100 year flood plain. Lexington asserts that AJT cannot succeed with its estoppel claim because it cannot establish that AJT reasonably relied upon some promise by Lexington in making a decision to take or forego certain action. (Docket entry no. 210, pp. 17-19). Citing 40 P.S. §1843, Lexington also argues that it cannot be liable for the actions of ISO and eastern risks in connection with the property survey in March 2006. (Docket entry no. 229, pp. 7-8).

To establish equitable estoppel, AJT must prove: (1) negligent misrepresentation of some material fact; (2) made with reason to know that the other party would rely upon it; and (3) inducement of the other party to act or fail to act to its detriment because of justifiable reliance on the negligent misrepresentation. Boyd v. Rockwood Area School District, 907 A.2d 1157, 1168 (Pa. Cmwlth. 2006), app. denied, 591 Pa. 717, 919 A.2d 959 (2007). Under the equitable doctrine of estoppel, “[wjhere...parties proceed in good faith reliance upon the other parties’ contractual obligations, the doctrine will preclude the other parties from denying their obligations.” Sullivan v. County of Bucks, 92 Pa. Cmwlth. 213, 230-231, 499 A.2d 678, 688 (1985), app. denied, 516 Pa. 623, 532 A.2d 21 (1986). The doctrine of estoppel may be invoked against an insurer with respect to an existing insurance contract, but it cannot create an insurance contract where none existed. Donovan v. New York Cas. Co., 373 Pa. 145, 149, 94 A.2d 570, 572 (1953); Allstate Insurance Company v. Warner, 50 D. & C. 3d 383, 388 (Adams Co. 1988) (“Equitable estoppel, which is used to preclude a person from asserting or denying a claim, requires reasonable reliance on Allstate’s misrepresentation that insurance coverage was in place for the Chevrolet.”). As the Supreme Court of Pennsylvania observed more than seventy years ago, “[t] he cases in Pennsylvania and elsewhere that recognize the estoppel theory in insurance contract cases are all cases where some contractual relationship existed between the parties.” Antone v. New Amsterdam Casualty Co., 335 Pa. 134, 138, 6 A.2d 566, 568(1939).

The summary judgment materials submitted by the parties confirm that there are triable issues of fact as to whether Lexington is equitably estopped from denying flood insurance coverage based upon the SFHA exclusion. There is evidence in the summary judgment record that (a) Lexington’s representative negligently misrepresented in March 2006 that AJT’s property was not in an SFHA, and (b) that Lexington should have known that AJT would reasonably rely upon that finding. See, Bortz v. Noone, 556 Pa. 489, 501, 729 A.2d 555, 561 (1999) (with a negligent misrepresentation claim, as opposed to a fraudulent misrepresentation claim, the speaker need not know that the spoken words are untrue, but must have failed to make a reasonable investigation into the accuracy of the representation). The designated corporate representative for Lexington’s own underwriter has admitted that it would be “unusual” for a property to be classified as situated in a CX zone (500 year flood plain) if it is located within 100 feet of a river and had suffered a flood two years earlier when that river overran its banks. (Groeneveld depo., p. 139). If Lexington had conducted a proper survey in March 2006 and had informed AJT that its property was in an excluded SFHA, AJT may have opted to purchase the SFHA insurance which Eastern Risks was authorized to offer for a higher 5% deductible. (See, Groeneveld depo., p. 177). Only a jury should decide the factual issue of whether AJT would have acquired flood insurance for an SFHA property if Lexington’s inspector had not negligently concluded and represented to AJT that the property was in a CX zone.

There are genuine issues of material fact with respect to AJT’s detrimental and justifiable reliance upon the alleged negligent misrepresentation in March 2006 that the property was in a CX region. Compare, Shannopin Mining Company v. State Workmen’s Insurance Fund, 124 Pa. Cmwlth. 364, 374, 556 A.2d 488, 493 (1989) (holding that insurance fund was not estopped from denying coverage for worker’s compensation claims and stating that “[tjhere being no detrimental reliance, we decline to apply the equitable doctrine of estoppel.”), app. denied, 525 Pa. 591, 575 A.2d 120 (1990). In insurance contract litigation, “[tjhe doctrine of estoppel is based upon the principle that a person is held to a representation made or a position assumed, where otherwise inequitable consequences would result to another who, having the right to do so under all these circumstances of the case, has in good faith relied thereon.” Antone, 335 Pa. at 140, 6 A.2d at 569. In light of the factual disputes relative to AJT’s reasonable reliance upon the only pre-flood inspection that was conducted on behalf of Lexington, the doctrine of equitable estoppel precludes Lexington from securing summary judgment based upon the SFHA exclusion in the declarations page and endorsement #001. See e.g., Florida Municipal Insurance Trust v. Village of Golf, 850 So.2d 544, 548 (Fla. 4th DCA 2003) (insurer was estopped from denying coverage based upon pollution exclusion in policy since insured was prejudiced by insurer’s negligent investigation of crop damage claim before suit was filed); Bituminous Casualty Corp. v. Balwin, 196 Va. 1020, 1024, 86 S.E.2d 836, 838 (1955) (insurer, whose agent placed coverage for coal mine operators on April 28, was estopped from declining insurance coverage on May 23 for May 22 injury, based upon its inspector’s report on May 12 that mine operation was hazardous and an uninsurable risk).

(E) POLICY REFORMATION BASED UPON MUTUAL MISTAKE

Lexington alternatively argues that even if flood insurance coverage is found to exist, the policy should be reformed to exclude coverage for personal property based upon the parties’ mutual mistake. Lexington contends that it is uncontroverted that AJT “never requested that the Lexington policy include insurance coverage for personal property” and that “Lexington never agreed to provide insurance coverage for personal property.” (Docket entry no. 210, p. 20). AJT’s brief in opposition does not address Lexington’s mutual mistake argument.

Reformation of a contract is an equitable remedy that is sparingly granted and “presupposes that a valid contract between the parties was created but, for some reason, was not properly reflected in the instrument that memorializes the agreement.” Erie Telecommunications, Inc. v. City of Erie, 853 F.2d 1084, 1091 (3d Cir. 1988); AJT Properties, supra, at *3. A mutual mistake will afford a basis for reforming a contract “only where both parties to a contract are mistaken as to existing facts at the time of execution,” and the party attempting to reform the contract “show[s] the existence of the mutual mistake by evidence that is clear, precise and convincing.” Zurich American Insurance Company v. O’Hanlon, 968 A.2d 765, 770 (Pa.Super. 2009); AJT Properties, supra. Clear and convincing evidence “is defined as testimony that is so clear, direct, weighty and convincing as to enable the trier of fact to come to a clear conviction, without hesitance, of the truth of the precise facts and issue.” Kimock v. Jones, 2012 WL 2308178, at * 5 (Pa. Super. 2012).

Alexander J. Tarapchak and custom design’s controller, Paul Bocan, handled the insurance needs for AJT, custom designs and Quaker Maid and participated in the insurance discussions with VIST. (Tarapchak depo., p. 57). Tarapchak specifically requested insurance coverage for AJT’s warehouse and its contents, including the personal property of custom designs and Quaker Maid. {Id., pp. 57, 80-81, 104-105). Tarapchak also requested that AJT, Custom design and Quaker Maid be listed as insureds on the Lexington policy, {Id., p. 106), and that the personal property to be covered “would be personal property of everybody; of AJT, CDM [Custom Designs], Quaker Maid.” {Id., p. 79). Bocan similarly testified that he required that the Lexington policy provide coverage for personal property. (Bocan depo., p. 46). More importantly, the plain language of Lexington’s policy reflects that intent and expressly states that it covers both real and personal property. {Id., pp. 93, 107-108, Plaintiff’s exhibit no. 27).

Hence, Lexington has not identified clear, precise and convincing proof that Lexington and AJT both believed that the policy did not afford coverage for personal property. The testimony of Mr. Tarapchak and Mr. Bocan confirms that AJT requested personal property coverage and that the language of the policy provided such coverage. As a consequence, Lexington has not demonstrated its clear right to reformation of the policy, so as to exclude personal property coverage based upon the parties’ alleged mutual mistake.

(F) PROPERTY DAMAGE COVERAGE LIMITATION

Lexington also requests partial summary judgment and seeks to limit AJT’s personal property claim to coverage of $2,500.00. Lexington relies upon the policy provision which extends coverage to “[pjersonal property of others in your care, custody or control,” but further provides that “[t]he most [Lexington] will pay for loss or damage under this extension is two thousand five hundred (2,500.00) dollars at each described premises.” (LXU 00166-167). As the party seeking to restrict coverage based upon that provision, Lexington bears the burden of proving the applicability of that coverage limitation. Ace American Insurance Company v. Underwriters at Lloyds and Companies, 939 A.2d 935, 940 (Pa. Super. 2007), aff’d, 601 Pa. 95, 971 A.2d 1121 (2009).

The summary judgment materials that have been submitted by the parties do not reflect that Lexington’s policy defines the word “you” when referencing the insured(s) under the policy, nor does the record otherwise indicate who is included or excluded by that term. Compare, Berlin, 991 A.2d at 333 (PA. Super 2010) (fire department did “not qualify as one of those covered under the policy’s definition of “you, your, yourself.”); Insurance Company of Evanston v. Bowers, 758 A.2d 213, 221-222 (Pa. Super. 2000) (minor bicyclist in treatment corporation’s custody as a delinquent juvenile was not an insured under corporate policy’s definition of that term). As noted above, AJT, custom designs and Quaker Maid are all solely owned and operated by Alexander J. Tarapchak. Custom design’s controller, Paul Bocan, performed the accounting for all three entities and represented them in selecting their insurance coverages. (Bocan depo., pp. 10, 12, 26, 29, 33, 95-96). From 2002 to 2006, Mr. Bocan’s salary as controller was paid by custom designs, but from 2006 to 2010, he was paid by Quaker Maid. (Id., p. 11). In his deposition testimony, Mr. Bocan referred to AJT, custom designs and Quaker Maid collectively as “the company.” {Id., pp. 19-20).

The summary judgment record does not clearly establish that the $2,500.00 limitation applicable to the personal property “of others” governs AJT’s claims for damage to custom design’s equipment and Quaker Maid’s inventory. See, Leggett v. National Union Fire Insurance Company of Pittsburgh, 844 A.2d 575, 577 (Pa. Super. 2004)(“Leggett was employed by High Safety Consulting Services, Ltd., an affiliated company of the policy holder, High Industries, Inc. We agree with the highly regarded trial judge...that the National Union policy covers Leggett in this accident in that he was acting within the scope of his duties.”), aff’d, 583 Pa. 62, 874 A.2d 1159 (2005). Absent a policy definition stating that AJT is the lone insured under the Lexington policy, it is not clear that AJT’s claim for damage to the contents of its warehouse is subject to the $2,500.00 personal property coverage limitation. Accordingly, Lexington’s motion for partial summary judgment will also be denied. An appropriate Order follows:

ORDER

And now, July 26, 2012, upon consideration of the motion for summary judgment of defendant Lexington Insurance Company, the exhibits and memoranda of law submitted by the parties, and the oral argument of counsel on May 31, 2012, and based upon the reasoning set forth in the foregoing memorandum, it is hereby ordered and decreed that the motion for summary judgment of defendant Lexington Insurance Company is denied.

      . Quaker Maid is an operating company that is engaged in the bus - ness of manufacturing kitchen cabinetry, and custom design is the holding company that owns the equipment which is utilized by Quaker Maid to manufacture cabinets. (Tarapchak depo., pp. 11-12,266-267). AJT owns the Poplar Street warehouse where custom design’s equipment is located, and Quaker Maid manufactures its kitchen cabinetry and maintains its inventory at that site. (Id., pp. 12-13). Alexander J. Tarapchak is the President and sole owner of AJT, Quaker Maid and custom design. (Id., pp. 10, 14,265-267,271).

      . The Federal Emergency Management Agency (FEMA) creates maps of special flood hazard areas (SFHA), “which are defined as areas of land that would be inundated by a flood having a one percent chance of occurring in any given year.” Zimmerhanzel v. Green, 346 S.W.3d 721, 723 (Tex. App. 2011). An SFHA is commonly known as a “100 year flood plain” since it represents an area where flooding is anticipated to occur every 100 years. AJT, supra, at * 2. (See also, Groeneveld depo., pp. 81 -82, exhibit 16). Prior to securing insurance coverage with Lexington, AJT had received a FEMA “Standard Flood Hazard Determination” from LSI flood services dated May 27,2004 which concluded that AJT’s property was not located in an SFHA. (Bocan depo., pp. 56-57, 98, 103, defendants’ exhibit no. 21).

      . A zone is classified as “CX” if it represents “[a]n area that is d - termined to be outside the 100 and 500 year flood plains.” (Groeneveld Depo., p. 80, exhibit 16 at p. 2). By determining that AJT’s property is located within a CX zone, ISO concluded that the probability of a flood occurring was less than once in every five hundred years (500 year flood plain). AJT Properties, supra, at * 2.

      . Following the post-claim report by Lexington’s inspector, Urban Engineers, Inc., based upon the August 15, 1980 FEMAmap, LSI flood services and ISO amended their earlier reports and concluded that AJT’s property is in an SFHA. (Docket entry no. 210, exhibits P-Q).

      . In the only other reported Pennsylvania case mentioning post-claim underwriting, a federal district court made a passing reference to a former insurance regulation governing post-claim underwriting in connection with long term care insurance policies in Pennsylvania. Former section 89.908(d), 31 Pa. Code, provided that “[a]n insurer or other entity engaged in the sale of long-term care insurance may not issue a policy or certificate until the insurer or other entity applies its underwriting standards and has determined the policyholder to be an acceptable risk.” Schneider v. Unum Life Insurance Company, 149 F.Supp.2d 169, 187-188 (E.D.Pa. 2001). That provision has since been repealed and presumably replaced by 31 Pa. Code §89a. 110 entitled “Prohibition against post claims underwriting.” Section 89a. 110 requires “[applications for long-term care insurance policies” to “contain clear and unambiguous questions designed to ascertain the health condition of the applicant,” and “[i]f the medications listed in the application were known by the insurer, or should have been known at the time of application, to be directly related to a medical condition for which coverage would otherwise be denied, the policy or certificate may not be rescinded for that condition.” 31 Pa. Code §89a.110(a)-(b).

      . In the “opinions” portion of his report in which Mr. Swierkiewicz expresses opinions “to a reasonable degree of professional certainty,” he does not include the above referenced statements concerning his proffered interpretation of the insurance policy. Instead, Mr. Swierkiewicz simply sets forth his opinions that “[u]nderwriting by Eastern Risks, on behalf of Lexington, fell outside industry custom and practice” and that “[c]laim handling by Lexington fell outside industry custom and practice, resulting in an unreasonable decision to decline [the] claim for the loss or damage caused by the flood on or about June 26, 2006.” (Docket entry no. 26, exhibit A, pp. 12-13). Although Mr. Swierkiewicz has opined that those entities were negligent in their underwriting and claim handling, AJT has not advanced a negligence claim against Lexington or Eastern Risk. Compare, Pennsylvania Lumbermens Mut. Ins. Co., supra, at * 7 (AJT asserted contract and negligence claims against insurer and broker after flood damage claim was denied); Argenta v. A. J. Lupas Insurance Agency, 104 Lacka. Jur. 430, 443-444 (2003) (negligence claims against insurer and agent for failure to timely procure adequate insurance coverage), aff’d, 881 A.2d 876 (Pa. Super. 2005).

      . Even if the email of July 12,2006 were to be considered, it merely concludes that the flood coverage provided by Endorsement #004 was not available if the property was located within a 100 year flood plain due to the express exclusion for an SFHA zone contained in the declarations page and endorsement #001. Such a construction is in conformity with the clear language of the policy and endorsements.

      . Section D of the “common policy conditions” granted Lexington the right to “[m]ake inspections and surveys at any time” relative to the property’s “insurability and the premiums to be charged.” (LXU00148). The policy also authorized Lexington to “[g]ive [the insured] reports on the conditions we find” during the inspection and to “[r]ecommend changes.” (Id.).

      . As per the policy language referenced in n. 8, supra, ISO made recommendations concerning the storage and handling of flammable liquids and solvents in the warehouse and the installation of sprinklers in the paint spray booths. (LXU00068-00070). Although the inspector concluded that the insurable “risk is good,” it further stated that it “would change to excellent if recommendations are corrected.” (LXU00070).

      . Pennsylvania has also adopted the related doctrine of promissory estoppel embodied in section 90 of the restatement (second) of contracts which states that “[a] promise which the promissor should reasonably expect to induce action or forbearance on the part of the promissee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise.” Pennsy Supply, Inc. v. American Ash Recycling Corp., 895 A.2d 595, 606 (Pa. Super. 2006), app. denied, 589 Pa. 722, 907 A.2d 1103(2006).

      . Lexington has not established that it is immune from civil liabi - ity for ISO’s survey and finding based upon the insurance consultation services exemption in 40 P.S. §1843. Section 1843(a) of the insurance consultation services act provides that “[t]he furnishing of, or failure to furnish, insurance consultation services related to, in connection with or incidental to a policy of insurance shall not subject the insurer...to liability for damages from...loss occurring as a result of any act or omission by any person in the course of such services.” 40 P.S.§ 1843(a). Insurance consultation services are defined by the act as “consultation, inspection, advisory or related services performed by an insurer, its agents, employees or service contractors incident to an application for insurance.” 40 P.S.§1841. However, §1843(c) expressly states that the immunity provisions do not apply “unless the insurer furnishes the insured with written notice of the provisions of this act,” which notice must be provided “by the insurer at the time the policy is issued or written and at each subsequent renewal thereof.” 40 P.S. § 1843(c). There is absolutely no indication in the summary judgment record that Lexington ever provided the statutory notice required by § 1843(c) for the immunity protection of the act to apply. As a result, Lexington is not entitled to immunity under 40 P.S. §1843 for the negligent misrepresentation(s) by ISO and Eastern Risks. See, Pennsylvania Lumbermens Mut. Ins. Co., supra, at * 7 (denying insurer’s motion for summary judgment based upon 40 P.S. § 1843(a) absent proof that insurer had furnished the insured with the required statutoiy notice).


source: Caselaw Access Project

author: ALEJANDRO, J.,

license: Public Domain

text:
    Allen v. Daniels.

      Michael F. Barret, for plaintiff.

      Benjamin A. Post, for defendant.
    June 27, 2012
   ALEJANDRO, J.,

On May 19, 2009, Rolan Allen (plaintiff) commenced a medical malpractice action against numerous health care providers; to wit: Michael A. Daniels, M.D. (defendant), Albert Einstein Healthcare Network, Germantown Community Health Services and Albert Einstein Medical Center. In his complaint, plaintiff alleged, inter alia, that defendant performed an unnecessary medical procedure, which caused a permanent urethral injury and lifelong problems related to urinary incontinence. After a five-day trial, the jury disagreed with plaintiff’s claims and found in favor of defendant. Thereafter, plaintiff filed a post-trial motion requesting a new trial. The denial of said motion by the undersigned trial judge led to plaintiff’s instant appeal.

FACTUAL AND PROCEDURAL HISTORY

Based on the evidence presented at trial, it is reasonable to infer that the jury considered the following relevant facts when rendering its verdict:

Since 2000, plaintiff treated with defendant for a condition diagnosed as a benign prostatic hyperplasia (hereinafter “BPH”), or an enlarged prostate gland, which was constricting the channel through which his urine exits the body. Generally, the modalities to treat BPH, (i.e., to shrink or remove excess prostate tissue), consists of medication, anon-invasive office procedure, and/or surgery.
Plaintiff contends that defendant offered him another alternative to treat his condition: “Transurethral Microwave Thermotherapy” (hereinafter “TUMT”), a procedure that uses microwave energy to remove the excess prostate tissue restricting urine flow. On October 5, 2007, plaintiff underwent the TUMT procedure to address his prostatic hyperplasia. Prior to the procedure, defendant again explained the TUMT procedure, the risks, and the treatment alternatives available to plaintiff. Satisfied, plaintiff signed the informed consent form, which outlined the explanation provided. Plaintiff, however, did not want a catheter inserted during the procedure and defendant acquiesced to his request. Of note, plaintiff testified that he was taking numerous medications, including but not limited to: medication for abi-polar disorder; Haldol; Tegretol; Cogentin; Metformin (for diabetes); Stenolol; Sinopril; Lodipine; Tonormin; Aspirin for blood pressure; Vitolimin for high triglycerides; Avodart for enlarged prostate; and a multivitamin.
Because plaintiff did not have a catheter following the procedure, he was instructed to drink as much water as possible and that he could not leave until he urinated. After he was able to urinate a small amount, plaintiff was discharged from defendant’s office without a catheter.
Plaintiff testified that afterwards he went to a convenience store for lunch. He described feeling an urgency to urinate while waiting for his food order and did so in the parking lot, where only a few drops came out but some relief was attained.
Later that evening, plaintiff was unable to urinate and went to Chestnut Hill Hospital emergency room, where medical personnel inserted a catheter to relieve his bladder. Plaintiff testified that he recalled discussing with a triage person that he was experiencing a high level of pain. He was discharged that evening with an inserted catheter.
On October 11, 2007, plaintiff had his first post-procedure visit with defendant, who removed the inserted catheter that had been placed at Chestnut Hill Hospital six (6) days earlier.
Still unable to urinate normally, plaintiff returned to Chestnut Hill Hospital on October 18,2007, and another catheter was inserted. This catheter was subsequently removed by defendant.
During a third visit to defendant on October 30, 2007, plaintiff was taught how to self-catheterize whenever he was unable to empty normally his bladder.
Plaintifftestifiedthathe continued to experience pain, particularly to his left testicle and that both testes had become swollen. Plaintiff was admitted into Presbyterian Hospital on October 31, 2007, where he remained hospitalized'for approximately two days, and received morphine for his pain.
On November 14,2007, plaintiff began treatment with Dr. Ginsberg, who found a hole in plaintiff’s urethra. Plaintiff testified that since undergoing the TUMT procedure, he is unable to urinate normally; has to react swiftly to the urge to urinate; has difficulty controlling the flow of urine and at times must relieve himself in a bathtub; and to avoid embarrassment, he wears pads to absorb any urine that dribbles out after urinating. Flomax was prescribed for his urinary problems.

Prior to the commencement of trial, oral argument was heard on the parties ’ numerous motions in limine, including, inter alia, the motions which are the subject of this appeal; to wit: Plaintiff’s motion to preclude the introduction of evidence and testimony concerning plaintiff’s informed consent (which was denied); and defendant’s motion to preclude any references to diagnostic testing frequency; billing records, charges for office visits and procedures; and the cost for leasing and/or purchasing the equipment used to perform the TUMT procedure. This motion was granted and plaintiff was precluded from offering a portion of defendant’s deposition testimony, wherein he testified that the machine used to perform the TUMT procedure costs approximately $40,000 and is used only for the microwave treatment.

In response to counsel’s inquiry regarding the ruling allowing evidence of plaintiff’s informed consent form, this trial judge stated:

It means that Dr. Daniels can use the informed consent with regard to saying I told him all the risks involved, including — I don’t know if this is going to be part of it — including that we might have to put a catheter after the procedure, we may not, because that’s part of the contested issue.

On October 28, 2011, the jury found in favor of defendant.

On November 4,2011, plaintiff filed a post-trial motion seeking a new trial, arguing that the consent forms were erroneously admitted into evidence and that the testimony regarding the consent forms was prejudicial to plaintiff and swayed the jury’s decision against him; and that error was also committed in granting defendant’s motion in limine.

On February 16, 2012, this trial judge heard oral argument on the post-trial motion. By order dated February 21, 2012, plaintiff’s post-trial motion was denied.

On February 23, 2012, pursuant to Pennsylvania Rule of Civil Procedure (Pa.R.C.P.) 227.4(2), Defendant filed a praecipe to enter judgment upon the verdict.

On February 23, 2012, plaintiff/appellant filed the instant appeal.

ISSUES

In response to an order issued on March 7, 2012, in accordance with Pennsylvania Rules of Appellate Procedure (Pa.R.A.P.) 1925(b), plaintiff on March 14, 2012, filed of record and served onto this trial judge a concise statement of errors complained of on appeal; to wit:

1. Whether the court abused its discretion and/or committed an error of law by permitting Michael A. Daniels, M.D., to introduce evidence, documentation and testimony concerning informed consent in a medical negligence case at the time of trial resulting in an unfair trial and improper verdict for the defendant, thereby warranting a new trial?
2. Whether the court abused its discretion and/ or committed an error of law by precluding Rolan Allen from introducing evidence, documentation and testimony regarding Dr. Daniels’ costs for leasing and/ or purchase of equipment used to perform the TUMT procedure and Dr. Daniels’ billing records and charges for office visits, procedures and the TUMT procedure resulting in an unfair trial and improper verdict for the defendant thereby warranting a new trial?

LAW AND DISCUSSION

As noted, plaintiff contends that this trial judge made erroneous and prejudicial rulings regarding the two referenced motions in limine. This trial judge opines that the rulings were correct and, further, that no abuse of discretion or error of law occurred when denying the post-trial motion and plaintiff’s request for a new trial.

Clearly, a court may order a new trial as to any or all of the issues presented by a written post-trial motion filed by any party if the grounds for relief were raised “in pre-trial proceedings or by motion, objection, point for charge, or by request for findings of fact or conclusions of law.” Pa.R.C.P. 227.1 (a), (b). A trial judge’s order granting a new trial is an effective instrumentality for seeking and achieving justice in those instances where the original trial, because of taint, unfairness, or error, produces something other than a just and fair result, which, after all, is the primary goal of all legal proceedings. Harman ex rel. Harman v. Borah, 562 Pa. 455, 464, 756 A.2d 1116, 1121 (2000), app. den., 567 Pa. 762, 790 A.2d 1017 (2001) (quoting Dornon v. McCarthy, 412 Pa. 595, 597, 195 A.2d 520, 522 (1963)); see Claudio v. Dean Mach. Co., 574 Pa. 359, 368, 831 A.2d 140, 145 (2003), rearg. den., 2003 Pa. LEXIS 556 (Pa. Apr. 11, 2003) (the purpose of Rule 227.1(b) “is to provide the trial court with an opportunity to review and reconsider its earlier rulings and correct its own error”).

The appellate court, when reviewing a trial court’s decision to grant or deny a motion for new trial, must examine “the trial court’s underlying decision as to whether a mistake was made.” Morrison v. Dep’t. of Pub. Welfare, 538 Pa. 122, 133, 646 A.2d 565, 571 (1994). The trial court, therefore, must determine whether a mistake involving factual, legal, or discretionary matters was made at trial. Harman, 562 Pa. at 466, 756 A.2d at 1122; Morrison, 538 Pa. 133, 646 A.2d at 571. If the trial court admits to any mistake(s), “it must determine whether the mistake was of a sufficient basis for granting a new trial.” Harman, 756 A.2d at 1122. The mistake must have produced more than a harmless error and not be due to “some irregularity” occurring during trial or whether “another trial judge would have ruled differently.” Id. “[T] he moving party must demonstrate to the trial court that prejudice was suffered as a result of the mistake.” Id.

In addition, appellate review requires a determination of “whether the trial court abused its discretion in ruling on the request for a new trial.” Harman, 562 Pa. at 468, 756 A.2d at 1123 (citing Morrison, 538 Pa. at 131, 646 A.2d at 570). An abuse of discretion exists when the trial court has rendered a judgment that is manifestly unreasonable, arbitrary or capricious, has failed to apply the law, or was motivated by partiality, prejudice, bias, or ill will. Harman, 562 Pa. at 468, 756 A.2d at 1123; Whyte v. Robinson, 617 A.2d 380, 382 (Pa. Super. 1992) (“a new trial may not be granted merely because the evidence conflicts and the jury could have decided for either party”). The scope of review of atrial court’s discretion is limited to the “specific reasons for its ruling on a request for a new trial.” Harman, 562 Pa. at 468, 756 A.2d at 1123.

This trial judge opines that no mistake involving factual, legal, or discretionary matters was committed at trial and, therefore, a new trial is not warranted. Reliance was made, in part, upon the Pennsylvania Rules of Evidence (Pa.R.E.), which govern court proceedings. These rules provide, in general, that all relevant evidence is admissible, unless otherwise provided. Pa.R.E. 402. Relevant evidence is defined as evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence. Pa.R.E. 401. Although relevant, evidence may be excluded if its probative value is outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury. Pa.R.E. 403. The admission of evidence is within the sound discretion of the trial court and a trial court’s rulings on the admission of evidence will not be overturned absent an abuse of discretion or misapplication of law. Schuenemann v. Dreemz, LLC, 34 A.3d 94, 100 (Pa. Super. 2011).

Informed Consent

In his first appellate argument, plaintiff contends that evidence regarding the informed consent forms was not relevant to his prima facie claim of medical malpractice because a matter involving a strict informed consent claim requires proof of a battery, wherein a claim of medical negligence does not. Plaintiff further posits that the testimony and evidence regarding plaintiff’s consent, which he contends was elicited and introduced ad nauseam by defendant’s counsel, caused unfair prejudice, confusion of the issues, and/or misled the jury. Plaintiff asserts that the prejudice suffered was further aggravated when this trial judge allowed the jury, upon request during deliberation, to review the consent forms. Notwithstanding these arguments, it was plaintiff’s principal contention that the TUMT procedure was not indicated and that defendant should never have performed this procedure on him.

Although the doctrine of informed consent is not an issue in this matter, a brief mention of this doctrine is required. Pennsylvania law requires a physician to “obtain informed consent from a patient before performing a surgical or operative procedure.” Montgomery v. Bazaz- Sehgal, 798 A.2d 742, 748 (Pa. 2002) (citing). Specifically, the informed consent doctrine provides that:

[P]hysicians [are] to provide patients with material information necessary to determine whether to proceed with the surgical or operative procedure or to remain in the present condition. We have on several occasions defined the nature of this “material information.” We have stated that the information provided by a physician must give the patient a true understanding of the nature of the operation to be performed, the seriousness of it, the organs of the body involved, the disease or incapacity sought to be cured, and the possible results. Thus, a physician must advise the patient of those material facts, risks, complications and alternatives to surgery that a reasonable person in the patient’s situation would consider significant in deciding whether to have the operation.

Montgomery, supra, 568 Pa. at 583, 798 A.2d at 748. Without the consent of the patient, the performance of a surgical procedure would amount to assault or a battery. Id.

As stated, plaintiff’s claim of negligence centered primarily on the contention that plaintiff was not a candidate for the TUMT procedure and, therefore, defendant was negligent in having had plaintiff undergo the procedure. Plaintiff emphatically argued that this was not an informed consent case; it was a negligence matter.

Undisputedly, evidence and argument pertaining to plaintiff’s consent to undergo the TUMT procedure arose on several occasions during trial. For instance, in the opening statement, defendant’s counsel stated to the jury that the TXJMT procedure was done appropriately and that it was “the decision of the patient.” He further stated that:

You’re going to see that there were consent forms involved, and you’re going to see that there was communication and collaboration with Mr. Allen in the hope of getting him off at least some of the medication that was now being used for his prostate.

In addition, during the cross-examination of plaintiff’s expert witness, Michael Palese, M.D., plaintiff’s TXJMT procedure consent form was published to the jury, and Dr. Palese was questioned regarding the medical alternatives, risks, and implications of TXJMT.

On cross-examination, plaintiff admitted to signing two consent forms and having been explained by defendant the reasons for the procedure, the alternative treatments of his prostatic hyperplasia condition, and the implications of the procedure.

On direct examination, defendant testified, in general terms, to the explanation he routinely gives to his patients, including plaintiff, regarding the risks of and alternatives to the TXJMT procedure. Defendant further testified that his reasons for doing the TXJMT procedure on plaintiff were to correct his BPH condition and to reduce or eliminate plaintiff’s dependency on medications for his urinary problems.

Defendant further testified that plaintiff had been his patient for many years. During the course of care, defendant had discussed with plaintiff numerous treatment options for his urinary problems and the limitations of these treatment options in light of his complex medical history. Defendant argues that the fact that he explained the risk and alternative of the TUMT procedure to plaintiff was relevant and critical to the issue of whether the TUMT procedure was medically appropriate or indicated for plaintiff’s care. Defendant asserts that the evidence regarding the consent forms was not intended to show that plaintiff signed these documents or to establish that he assumed the risk of the procedure. Rather, this testimony was relevant and necessary for the jury’s full understanding of the care rendered and for its determination of whether defendant was in fact negligent in suggesting, prescribing, and performing the TUMT procedure, evidence which clearly addresses plaintiff’s main argument in this case.

At the close of evidence, the following jury instruction was given:

Now, you have heard evidence regarding several consent forms. Simply because something is a risk of a procedure and can happen without negligence does not mean that a doctor is not negligent when the harm occurs. The question is whether in these instances the injuiy occurred because of the negligence — because of the negligence as I have defined it. When signing a consent form, a patient does not consent to or assume the risk of an injury due to malpractice or the negligence by his physician.

Of note, neither party lodged an objection to this charge, nor requested an additional charge with respect to the informed consent issue.

While plaintiff argues that prejudicial error was committed in allowing the use of the informed consent forms, case law does not support his argument. In Lomax v. Thomas Jefferson Univ. Hosp., 24 Phila. 224 (Pa. C.P. 1992), aff’d, 627 A.2d 208 (Pa. Super. 1993), app. den., 535 Pa. 675, 636 A.2d 634 (1993), the appellant argued that the testimony and evidence regarding the informed consent form was irrelevant because Ms. Lomax “did not at anytime make an issue of lack of informed consent.” Id. at 237. The trial judge therein opined (and the appellate court affirmed) that the consent form was relevant because it allowed the jury to get a “complete picture” of the case, particularly in determining whether or not perforations of the bowel were a recognized risk of the procedure performed. Id.

Further, to prevent any confusion as to the purpose and relevance of the consent form, the trial court therein, as did the trial judge herein, instructed the jury that the admissibility of the consent form:

[Djoesn’t mean the defendant was given permission to be negligent just because she signed a form indicating that she was advised what the risks were. Whether the defendant was negligent or not is for you to determine apart from all this and based on the evidence in the case....

Id. at 238.

In this trial judge’s opinion, defendant introduced the issue of consent to negate plaintiff’s charges against him— that is, that the TUMT procedure was medically necessary. In this trial judge’s opinion, the issue of consent and the consent forms were pertinent to the jury’s understanding of the “complete picture” of the progressive treatment and care provided by the defendant to plaintiff as part of their long-term patient-physician relationship. Defendant testified that he was concerned with plaintiff’s dependency on numerous medications for his physical ailments. It was his opinion that the TUMT procedure would correct the BPH condition and reduce plaintiff’s dependency on some of those prescriptive medicines. Evidence of the informed consent form was, therefore, relevant to demonstrate defendant’s explanation of and the need for the procedure, as well as to indicate the gravity of plaintiff’s medical condition, the expectation that numerous medications taken by plaintiff would be reduced, and to rebut plaintiff’s assertion that the TUMT procedure was unnecessary. Whatever marginal prejudicial effect, if any, cast upon the jury’s minds by the consent forms, was addressed by the express jury instruction given; i.e.; that despite signing an informed consent form, plaintiff “does not consent to or assumes the risk of an injury due to malpractice or the negligence by his physician.” Consequently, this trial judge opines that this argument is without merit.

Precluded Evidence

In his second appellate issue, plaintiff argues that this trial judge erroneously precluded evidence and testimony concerning defendant’s billing records and charges for office visits, as well as the costs of leasing and/or purchasing the equipment used to perform the TUMT procedure. Specifically, plaintiff claims that the aforesaid information was relevant and probative to the credibility of defendant, particularly, to the monetary motivation associated with performing the allegedly unnecessary TUMT procedure.

Plaintiff’s allegations are of medical malpractice. To prove his claim, he must present a preponderance of evidence to prove: (1) a duty owed by defendant to him, the patient; (2) a breach of that duty; (3) as a result of the breach he suffered damages; (4) and his injuries were the outcome of that harm. See Grossman v. Barke, 868 A.2d 561, 566 (Pa. Super. 2005), app. den., 585 Pa. 697, 889 A.2d 89 (2005). In this trial judge’s opinion the mere cost of the TUMT equipment and even defendant’s billing practices, without more, is clearly not relevant to his breach of the standard of care claim.

Notwithstanding, plaintiff relies on Maravich v. Aetna Life & Casualty Co., 504 A.2d 896, 898 (Pa. Super. 1986), for the proposition that negligence may be established by evidence of motive to commit the alleged negligent act. In Maravich, the court held that “where it is disputed whether a person has done a certain act, evidence is admissible... to show the existence of a motive on his part to do it.” Id. The plaintiffs-insured, Mr. and Mrs. Maravich, sued their insurer, Aetna Life & Casualty, to recover on a fire insurance policy. The jury found that the fire had been set intentionally by Mr. Maravich. Id., 504 A.2d at 897-98, 350 Pa. Super. 392. Having the burden to prove that the insured caused the fire, Aetna was permitted to introduce evidence that the jury could legitimately infer “that the insured had burned or caused to be burned his own property.” Id. at 898. “Although proof of motive was not essential, the existence of a motive was relevant and was a part of the circumstantial evidence to be considered by the jury.” Id., As part of its legal theory, Aetna introduced “evidence of statements made by [Mr.] Maravich that he had sustained large gambling losses and was in debt because of them.” Id. The appellate court affirmed the judgment of the trial court. Id. at 908.

This trial judge opines that plaintiff’s reliance on the holding in Maravich is misplaced; and that the legal judgment employed in Maravich, does not apply here. Maravich involved a claim of an intentional act of arson in pursuit of insurance recovery. Here, the issue is whether defendant was negligent in prescribing and performing an allegedly unnecessaiy medical procedure. While plaintiff attempted to relate the cost of defendant’s medical equipment and charges for office visits to the claim that the procedure was unnecessary, and that defendant needed to recoup the costs of medical equipment involved in the procedure, this trial judge opines that this argument is too speculative to be allowed.

The issue herein is whether the defendant breached a duty of care owed to Plaintiff by recommending an allegedly unnecessary TUMT procedure. Any evidence of the costs for leasing and/or purchasing the TUMT equipment is not only irrelevant to whether the defendant breached the standard of care required, and is also highly prejudicial to the defendant and purely speculative. To imply that defendant performed the TUMT procedure solely for financial gain — presumably to pay off the new TUMT — without proof, beyond the evidence of the actual cost of the equipment and defendant’s billing financial records, is highly speculative, unfair, and prejudicial to defendant and would mislead the jury from the actual issue of the case; to wit: whether defendant was liable for a breach in the medical standard of care. See Pa. R.E. 403. This rule also provides that even if this evidence was relevant, it still may be excluded since its probative value is outweighed by the danger of unfair prejudice, confusion of the issue, or misleading to the juiy. Pa.R.E. 403.

Based upon the analysis made herein, this trial judge opines that no error of law occurred in denying the introduction of evidence and testimony concerning defendant’s billing records and charges for office visits, as well as the costs for leasing and/or purchasing the TUMT equipment. Further, this ruling did not constitute an abuse of the court’s discretion but rather was one made on sound reasons.

CONCLUSION

Based on the foregoing analysis, this trial judge is of the opinion that no mistake of fact, errors of law, or abuse of discretion occurred in permitting evidence regarding the informed consent forms, nor in precluding evidence concerning defendant’s billing records, office charges, and the costs for leasing and/or purchasing the equipment used to perform the TUMT procedure. Therefore, this trial judge respectfully requests that this appeal be dismissed and that the order denying plaintiff’s motion for post-trial relief be affirmed.

      . On February 4,2011, the parties entered into a stipulation whereby Albert Einstein Healthcare Network, Germantown Community Health Services and Albert Einstein Medical Center were dismissed as party defendants.

      . N.T. 10/25/2011 at 18:4-7.

      . N.T. 10/24/2011 at 93:2-94:21; 10/25/2011 at 97:6-19.

      . N.T. 10/24/2011 at 95:14-17.

        . Id. at 95:12-96:7.

      . N.T. 10/25/2011 at 80:2-23.

      . Id. at 82:3-6.

      . Id. at 17:6-25.

      . Id. at 31:1-5.

      . Id. at 31:6-12.

      . Id. at 31:1-11.

      . Id. at 31:14-32:5.

      . N.T. 10/25/2011 at 34:19-35:1.

      . Id. at 33:1-34:7.

      . Id. at 82:11-18.

      . Id. at 82:21-83:17.

      . Id. at 83:14-21.

      . Id. at 83:22-84:3.

      . Id. at 34:17-35:1.

      . Id. at 40:1-8,40:22-23.

      . N.T. 10/24/2011 at 133:13-14.

      . N.T. 10/25/2011 at 41:16-17,43:6-8.

      . Id. at 44:14-15.

      . Id. at 46:6-17.

      . Id. at 47:4-24.

      . Id. at 44:14-45:1

      . Control number 19-11100619.

      . Control number 58-11100758.

      . N.T. 10/24/2011 at 16:7-14.

      . N.T. 10/28/2011 at 2:8-19.

      . “...[T]he prothonotary shall, upon praecipe of a party;...(2) enter judgment when a court grants or denies relief but does not itself enter judgment or order the prothonotary to do so. Pa.R.C.P. 227.4(2).

      . N.T. 10/24/2011 at 68:15-21.

      . Id at 66:25-67:11.

      . Id. at 182:21-184:8.

      . N.T. 10/25/2011 at 79:13-14,79:22-23,80:16-81:6.

      . N.T. 10/25/2011 at 124:19-126:3, 155:4-156:4,157:9-21.

      . Id. at 129:13-21.

      . N.T. 10/26/2011 at 123:10-21; 131:12-132:25.

      . N.T. 10/27/2011 at 3:22-4:19.

      . N.T. 10/25/2011 at 2011, 129:13-21.

      . N.T. 10/26/2011 at 123:10-21.


author: NEALON, J.,

text:
    Commonwealth v. Richards.

      Maridare L. Hayes and Patrida Lafferty, for plaintiff.

      Frank W. Nocito, for defendant.
    October 12, 2012
   NEALON, J.,

In anticipation of the trial scheduled to commence on October 15, 2012, the commonwealth filed a “Motion in limine to introduce evidence of other crimes, wrongs or acts pursuant to rule 404(b)” on October 9, 2012, and defendant filed his response to that motion in limine on October 11, 2012. Following defendant’s arrest for aggravated indecent assault, indecent assault and endangering the welfare of children, the commonwealth seized various items from defendant’s residence, including a pornographic DVD entitled “Not the Bradys XXX.” The commonwealth seeks to introduce that DVD into evidence pursuant to Pa.R.E. 404(b)(2) which provides that “[e]vidence of other-wrongs, or acts may be admitted for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity or absence of mistake or accident.” The commonwealth submits that the DVD is admissible under rule 404(b)(2) to establish that defendant possessed the “sexual intention” to commit aggravated indecent assault and indecent assault of two minors who were eight years old and five years old at the time of the alleged offenses.

According to the commonwealth, the DVD at issue depicts a fictional family modeled after “The Brady Bunch” which was featured in the 1970’s American sitcom bearing that name. The DVD portrays adult actors playing the roles of the parents and children of a blended family comparable to “The Brady Bunch.” Although the pornographic DVD depicts the step-siblings engaging in sexual activity, neither parent participates in any sexual conduct with the other parent or their children. (Commonwealth’s motion in limine, ^10-12(a)-(i)).

The Commonwealth argues that “defendant’s possession of this video is clearly indicative of his state of mind or intent at the time he had inappropriate contact” with the two minors. (Id., ¶13). Noting that “the subject video is not ‘child pornography,” defendant counters that it lacks probative value inasmuch as the adult actor playing the father role does not “engage in any physical contact with any of the adult actors who play the Brady children.” (Defendant’s response, pp. 2-3). Defendant further asserts that any putative relevance is outweighed by its potential for prejudice since the pornographic DVD “can only serve to smear defendant, and is the type of bad character or propensity evidence which rule 404 is designed to exclude.” (Id., p. 4).

Under Pa.R.E. 404(b)(1), evidence of “other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show action in conformity therewith.” See, Com. v. Chmiel, 2003 WL 25287182, at *55 (Lacka. Co. 2003), aff'd, 585 Pa. 547, 889 A.2d 501 (2005), cert. denied, 549 U.S. 848 (2006). The rationale for this exclusionary rule is concern “that jurors might convict a defendant because they perceive defendant has a bad character or propensity to commit crimes,” Com. v. Reese, 31 A.3d 708, 723 (Pa. Super. 2011). Nevertheless, evidence of other crimes, wrongs or bad acts “may be admissible in special circumstances where the evidence is relevant for some other legitimate purpose and not merely to prejudice the defendant by showing him to be a person of bad character.” Com. v. Cascardo, 981 A.2d 245, 250 (Pa. Super. 2009), app. denied, 608 Pa. 652, 12 A.3d 750 (2010). Those special circumstances include instances where the evidence is “admitted for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity or absence of mistake or accident.” Pa.R.E. 404(b)(2). Therefore, such evidence may be admissible as proof of the intent element of the crime(s) charged. See, Com. v. Dargan, 72 Pa. D.&C. 4th 395, 402 (Lacka. Co. 2005) (evidence of defendant’s uncharged drug delivery shortly before his arrest for possession with intent to deliver (PWID) was admissible to establish intent element of PWID), aff’d, 897 A.2d 496 (Pa. Super. 2006), app. denied, 591 Pa. 671, 916 A.2d 1101(2007). However, evidence of other crimes, wrongs or bad acts may so be admitted under rule 404(b)(2) “in a criminal case only upon a showing that the probative value of the evidence outweighs its potential for prejudice.” Pa.R.E. 404(b)(3).

As noted above, the commonwealth contends that the “Not the Bradys XXX” DVD is admissible to demonstrate defendant’s intent to sexually assault the minor victims in this case. In Com. v. Seiders, 531 Pa. 592, 614 A.2d 689 (1992), the prosecution sought to admit evidence of the defendant’s prior convictions for indecent assault and endangering the welfare of children in a subsequent action in which the defendant was charged with sexual offenses, indecent assault and endangering the welfare of children based upon his alleged sexual molestation of a six year old girl. The trial court and the Superior Court reasoned that evidence of the defendant’s prior pedophilic conduct “was relevant to the issue of intent...to show that [defendant] intended to sexually assault the instant victim.” Id., at 531, 535 Pa. at 592, 596, 614 A.2d at 691. On appeal, the Supreme Court of Pennsylvania observed:

Determination of the relevancy of evidence offered at trial requires a two-step analysis. It must be determined first if the inference sought to be raised by the evidence bears upon a matter in issue in the case, and, second, whether the evidence renders the desired inference more probable than it would without the evidence.”

Id (emphasis in original). In reversing the trial court and granting the defendant a new trial, the Supreme Court held that the proffered evidence lacked the requisite probative value since “[ijntent is not an element of the offenses with which [defendant] was charged.” Id.

The commonwealth posits that the pornographic DVD is relevant to the aggravated indecent assault and indecent assault charges in that it “is clearly indicative of [defendant’s] state of mind or intent at the time he had inappropriate contact” with the two minors. However, intent is not an element of the offense of aggravated indecent assault, 18 Pa.C.S. §3125(a), aggravated indecent assault of a child less than thirteen years of age, 18 Pa.C.S. §3125(b), or indecent assault of a child less than thirteen years of age, 18 Pa.C.S. §3126(a)(7). Accord, Seiders, supra. Since the commonwealth is not required to prove defendant’s intent or state of mind to secure convictions for aggravated indecent assault and indecent assault of minors, the pornographic DVD is not probative of any element of the crimes charged in this case.

Moreover, even if the commonwealth was obligated to establish defendant’s intent in order to convict him of the offenses charged, the conduct portrayed in the DVD does not bear sufficient correlation to the alleged criminal activity in this case. It is undisputed that the father figure in the DVD does not participate in any sexual activity with any adult or child. In fact, the DVD does not portray any adult engaging in conduct with a fictional child which would arguably constitute aggravated indecent assault, indecent assault or endangering the welfare of children.

In Com. v. Impellizzeri, 443 Pa. Super. 296, 661 A.2d 422 (1995), app. denied, 543 Pa. 725, 673 A.2d 332 (1996), the prosecution similarly sought to introduce pornographic videotapes and magazines that the police had seized from the defendant’s home. The prosecution argued that the materials featured anal sex and were relevant to the defendant’s charges of rape and involuntary deviate sexual intercourse for binding a woman’s limbs together and forcibly subjecting her to vaginal and anal intercourse. The trial court admitted the evidence after it found that the defendant’s “possession of the [materials], indicating an interest in anal sex, makes the allegation that anal sex occurred more probable.” Id., at 312, 661 A.2d at 430, (443 Pa. Super. 296). The Superior Court disagreed and in holding that the pornographic materials were “not sufficiently probative,” stated:

While on one hand recognizing that evidence of a sexual nature may have probative value in a sexual assault case, we cannot on the other hand confer blanket probative value on all sexual materials in all cases. In some instances, materials found in an accused’s possession might very well be probative of an issue in a case. For instance, if the publication sought to be admitted here had depicted women being tied up and subjected to anal intercourse against their will, it may have been probative of whether [defendant] forced his victim to commit those same acts.
Further, if there had been allegations that [defendant] had shown the magazine to the victim or in any way used the magazine during his attack on her, the probative value of the evidence would be more obvious. However, as the prosecutor herself commented in this case, one’s mere possession of a pornographic magazine does not tend to establish guilt in the case of rape.
* * *
We specifically disagree with the trial court’s conclusion that [defendant’s] possession of the publication, which may have indicated an interest in anal sex, made the allegation that forcible anal sex had occurred more probable. The magazine was not sufficiently probative on the issue of forcible or consensual sex and therefore should not have been admitted.

Id., at 313-314, 661 A.2d at 431.

The necessary parallel between defendant’s charges and the “Not the Bradys XXX” DVD is likewise absent in this case. The DVD does not depict a father figure engaging in sexual contact with a minor. Any nexus between the content of the DVD and the criminal conduct allegedly committed by defendant is far too attenuated. As such, its proffered probative value does not outweigh its potential for prejudice. See, Pa.R.E. 404(b)(3). Consequently, for the reasons set forth above, the commonwealth’s motion in limine will be denied.

And now, October 12,2012, upon consideration of the “notice of commonwealth’s motion in limine to introduce evidence of other crimes, wrongs, or acts pursuant to rule 404(b)” and defendant’s response thereto, and based upon the reasoning set forth above, it is hereby ordered and decreed that the commonwealth’s motion in limine to introduce evidence of other crimes, wrongs or act pursuant to rule 404(b) is denied.

      . According to defendant, five months prior to the filing of the instant charges, his ex-wife provided the “Not the Bradys XXX” DVD to her divorce lawyer to determine whether it should affect defendant’s visitation rights with respect to their children. The defense represents in its submission “that Mr. Richards’ weekend visitations with their children continued after Mrs. Richards’ discovery of the pornography, without objection by Mrs. Richards.” (Id., p. 2).