author: TUMOLO, Member,

text:
    In re Anonymous No. 132 D.B. 88

      Disciplinary Board Docket no. 132 D.B. 88.
    January 5, 1990
   To the Honorable Chief Justice and Justices of the Supreme Court of Pennsylvania:

TUMOLO, Member,

Pursuant to Pennsylvania Rule of Disciplinary Enforcement 208(d), the Disciplinary Board of the Supreme Court of Pennsylvania submits its findings and recommendations to this honorable court with regard to the above-captioned petition for discipline.

PROCEDURAL HISTORY

Respondent is an [ ] County attorney who was admitted to the practice of law in 1956. His only previous disciplinary infraction was an informal admonition in April 1986. That resulted from the slow handling of an estate, but there was no loss of money to any client.

On December 29, 1988, the Office of Disciplinary Counsel filed a two-count petition for discipline. That petition alleged the following rules violations:

(A) Rule 1-102(A)(4) — conduct involving dishonesty, fraud, deceit, or misrepresentation;

(B) Rule 1-102(A)(6) — conduct adversely reflecting an attorney’s fitness to practice law;

(C) Rule 6-101(A)(3) — conduct involving neglect of a legal matter entrusted to an attorney;

(D) Rule 7-101(A)(l) — failure ,to seek the lawful objectives of his client through reasonably available means permitted by law;

(E) Rule 7-101(A)(2) — failure to carry out a contract of employment entered into with a client for professional services;

(F) Rule 9-102(A) — all funds of clients paid to a lawyer or law firm, other than advances for costs and expenses, shall be deposited in one or more identifiable bank accounts maintained in the state in which the law office is situated, and no funds belonging to the lawyer or law firm shall be deposited therein;

(G) R.P.C. 1.3 — a lawyer shall act with reasonable diligence and promptness in representing a client;

(H) R.P.C. 1.15(a) — a lawyer shall hold property of clients or third persons, that is in a lawyer’s possession in connection with their representation, separate from the lawyer’s own property;

(I) R.P.C. 1.15(b) — upon receiving funds or other property in which a client or third person has an interest, the lawyer shall promptly notify the client or third person. A lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and, upon request by the client or third person, shall promptly render a full accounting regarding such property.

(J) R.P.C. 8.4 — it is professional misconduct for a lawyer to engage in conduct involving dishonesty, fraud, deceit, or misrepresentation.

Hearing Committee [ ], chaired by [ ], and with members [ ] and [ ] conducted a hearing on May 15, 1989. The parties presented a stipulation of facts which was amplified slightly by the hearing committee in its recommendation to the board. The stipulated facts bind both parties. See Disciplinary Board Rule 89.131.

With regard to charge 1 the hearing committee found violations of rule 1-102(A)(4); rule 1-102(A)(6); rule 9-102(A); rule 1.15(a); rule 1.15(b); and, rule 8.4(c). With regard to charge 2, the hearing committee found violations of rule 1-102(A)(4); rule 1-102(A)(6); rule 9-102(A); rule 1.15(a); and, rule 8.4(c). ,

On October 6, 1989, the hearing committee filed its report and recommendation, and with a thorough consideration of the stipulations and dispositional witnesses recommended to the board that respondent be suspended for two years.

On October 18, 1989 the petitioner filed a brief on exceptions. Aside from some grammatical corrections petitioner accepted the findings of fact and conclusions of law made by the hearing committee, but took exception to the hearing committee’s recommendation for a two-year suspension, contending that the discipline should be for a minimum of three years in the event the board found that respondent cooperated in the investigation, and a disbarment in the event the board found this mitigation was simply “damage control.”

On October 26, 1989, respondent filed a brief on exceptions, requesting that pursuant to section 89.202(a)(2) of the Disciplinary Board Rules that certain additional findings of fact which were offered by respondent should have been accepted by the hearing committee. Respondent also contended that he had not violated the “Escrow Rules” i.e., rule 9-102(A) and rule 1.15(a). But the main thrust of respondent’s exceptions were that the hearing committee had made inaccurate references in its discussion (not in its findings of fact) to various misrepresentations respondent made to clients, and that this error lead to an overly severe recommendation for discipline.

Oral argument was heard before a panel of the board on December 6, 1989, and the matter was adjudicated before the entire board on December 8, 1989.

FINDINGS OF FACT

The board finds the facts to be as set forth by the committee, but supplemented in accord with Disciplinary Board Rule 89-202(a)(2) as will be hereinafter set forth:

(1) Respondent, [ ], Esq., was admitted to practice law in the Commonwealth of Pennsylvania in 1956, with his current office located at [ ].'

(2) On or about April 10, 1985, [A] met with respondent concerning respondent representing him in a personal-injury action.

(3) [A] was injured on March 16, 1985, while using a posthole digger on the property of his neighbor, [B]. [A] received medical treatment at the cost of $3,969.40. Respondent agreed to represent [A] for a 40-percent contingency fee.

(4) On or about March 10, 1987, respondent filed a writ of summons on [A’s] behalf against [B] and the [C] Company, the manufacturer of the posthole digger used by [A], in the Court of Common Pleas of [ ] County, and on May 13, 1987, he filed a complaint in civil action against both parties.

(5) In early June 1987, respondent negotiated a settlement with defendants’ insurance carriers by which [A] was to receive $8,000 from [D] Insurance Company, which insured the [C] Company; and $1,000 from [E] Insurance Company, which insured [B].

(6) Shortly thereafter, [A] met with respondent and signed a settlement agreement, prepared by respondent, in which [A] agreed that:

(a) he accepted $9,000 to settle his claims arising from the March 16, 1985 accident; and,

(b) respondent would receive $3,600 as his attorney’s fee.

(c) [A] was to receive $5,400 out of which respondent would pay to [A’s] medical providers the following sums:

(i) $2,140 to [F] Surgical Associates;

(ii) $76 to [G] Radiology;

(iii) $222.75 to [G] Hospital;

(iv) $300 to [G] Anesthesia; and,

(v) $1,230.65 to [G] Hospital.

The balance and any savings affected by the creditors reducing the amount owed to them was to be paid to [A].

(7) On or about June 10, 1987, respondent received a check from [D] Insurance Company, dated June 10, 1987, in the amount of $8,000 made payable to [A] and respondent which they then endorsed.

(8) On June 10, 1987, respondent deposited this check into his [H] Bank Account, no. [ ], denominated “[Respondent], Attorney at Law, Client Account.” Of the $8,000, respondent was entitled to receive $3,200 as his fee, and he was entrusted to maintain inviolate the balance of $4,800 on [A’s] behalf in his client account.

(9) From June 10, 1987 to June 16, 1987, respondent failed to maintain the $4,800 inviolate. On June 10, 1987, the same day he deposited the check, respondent issued two checks in the amount of $2,000 payable to respondent and one check in the amount of $4,233.31 payable to [I]. The checks cleared the client account on June 12/and June 16, respectively, leaving an account balance of $809.07 on June 16, 1987. No other check cleared related to the client [A’s] legal matter.

(10) As a result of the foregoing, respondent had thereby misappropriated $3,990.93 of the $4,800 of the client [A’s] funds which were entrusted to respondent. As of June 16,1987, there was a balance of $809.07 in respondent’s client fund.

(11) On or about June 18, 1987, respondent received a check from [E] Insurance Company dated June 17, 1987, in the amount of $1,000 made payable to [A] and respondent which was then endorsed by both parties.

(12) On June 18, 1987, respondent deposited the said check into his client account. Of the $1,000, respondent was entitled to a fee of $400 and he was entrusted to maintain inviolate the balance of $600 in his client account.

(13) As a result of the deposited $1,000 check on June 18, 1987, respondent was then entrusted to maintain inviolate $5,400 on the client [A’s] behalf.

(14) By letter dated August 14, 1987, respondent sent [A] a check in the amount of $1,130.60 drawn on his client account. According to the letter and the check, the amount represented partial settlement of the funds due [A].

(15) On numerous occasions from June 18 until August 17, 1987, the balance of respondent’s client account was substantially less than the $5,400 entrusted to him on behalf of the client [A]. From June 18 until July 1, 1987, the balance was $559.07. From July 14, 1987 until July 23, 1987, the balance was always less than $5,400.

(16) As a result of the check in the amount of $1,130.60 clearing respondent’s client account on August 17, 1987, respondent was then entrusted to maintain inviolate $4,269.40 on [A’s] behalf.

(17) On or about November 18, 1987, respondent sent [A] a check for $1,220.60 dated November 18, 1987, drawn on [I’s] “Attorney at Law, Client Account” at [J] Financial.

(18) From August 17, 1987 until November 18, 1987, the balance of respondent’s client account was consistently less than the $4,269.40 still entrusted to him. The only time the balance in respondent’s client account was as much as. the $4,269.40 was from September 10 through September 29, 1987. On November 16, 1987, the account balance was a negative $11.17.

(19) As a result of respondent forwarding to [A] a check in the amount of $1,220.60, on or about November 19, 1987, respondent was then entrusted to maintain inviolate $3,048.80 on [A’s] behalf.

(20) By an October 24, 1988 letter, respondent’s attorney, [K], sent [A’s] current attorney, [L], respondent’s check for $3,388.80, which included the $3,048.80 of [A’s] funds still entrusted to respondent.

(21) From about November 18, 1987 until at least June 30, 1988, the balance of respondent’s client account was almost always less than the $3,048.80 still entrusted to respondent on [A’s] behalf, and thereafter the $3,048.80 remained misappropriated until at least October 24, 1988, when respondent’s counsel sent [A’s] attorney the aforementioned check for $3,388.80.

(22) Between November 18, 1987 and June 30, 1988, the only time the balance in respondent’s client account was as much as $3,048.80 was from March 10 until March 14,1988, and from May 5 until May 10, 1988. From April 11, 1988 until May 2, 1988, the account had a negative balance.

(23) From June 10, 1987, when respondent deposited the $8,000 check of [A’s] settlement funds into his client account, until October 24, 1988, when respondent’s attorney, [K], sent [A’s] attorney respondent’s check for $3,388.80, respondent failed to disburse any of the entrusted funds to [A’s] medical providers despite numerous requests from representatives of the said medical providers and representatives of the collection agencies that he do so. However, $920.60 or the original entrustment due to the medical creditors was paid directly to [A] by check on November 18, 1987.

(24)Based upon respondent’s failure to maintain [A’s] funds inviolate, he thereby misappropriated said funds.

Charge. 2

(25) As a result of respondent’s deposit of the $8,000 check on [A’s] behalf into his client account on June 10, 1987, described in charge 1, respondent was then entrusted to maintain inviolate $4,800 on [A’s] behalf.

(26) On June 11, 1987, respondent deposited a check in the amount of $1,000 he received on behalf of his client [M] into his client account. Of that amount, respondent was entitled to receive $400 as a fee. He was entrusted to maintain inviolate the balance of $600.

(27) As a result of the deposit of the $1,000 check into his client account, on June 11, 1987, respondent was entrusted to maintain inviolate $5,400 on behalf of [Á] and [M].

(28) Between June 11, 1987 and June 17, 1987, six checks totaling $8,733.31 cleared respondent’s client account, including the checks for $2,000 and $4,233.31 described in paragraph 9, supra, none of the checks pertaining to [A’s] or [M’s] legal matters. Upon these checks clearing on June 17, 1987, the available balance was reduced to $309.07.

(29) As a result of respondent’s deposit of the $1,000 check on [A’s] behalf into his client account on June. 18, 1987, respondent was entrusted to maintain a balance of $6,000 on behalf of [A] and [M]. On June 18, a check in the amount of $750, payable to respondent, cleared his client account. The available balance was thereby reduced to $559.07 and remained so until July 1, 1987.

(30) On July 1,1987, respondent deposited into his client account a check in the amount of $13,500 he received regarding a settlement of a wrongful death claim concerning [N]. Of that amount, respondent was entitled to receive $2,700 as his fee and the attorney representing [N’s] other parent was also entitled to receive $2,700 as his fee. Respondent was entrusted to maintain a balance of $8,100.

(31) As a result of the deposit of $13,500 check into respondent’s client account, on July 1, 1987, respondent was entrusted to maintain inviolate $14,100 on behalf of [A], [M], and [O]. The available balance in respondent’s client account was $12,055.90 at that time.

(32) Respondent issued a check in the amount of $3,028.50 dated July 10, 1987 made payable to [O], regarding the [N] matter, which cleared on July 13, 1987.

(33) As a result of the check clearing respondent’s client account on July 15, 1987, respondent was entrusted to maintain inviolate $11,071.50 on behalf of [A], [M] and [O]. The available balance in respondent’s client account was $2,028.48.

(34) On July 24, 1987, respondent deposited into his client account a check in the amount of $66,254.55 he received on behalf of a client, [P]. A check in the amount of $750, made payable to Dr. [Q], regarding [P], cleared respondent’s client account on July 14, 1987, 10 days before the [P] proceeds were deposited. Of the $66,254.55, respondent was entitled to receive $16,563.63 as his fee. He was entrusted to maintain inviolate the balance of $48,940.92.

(35) As a result of the deposit of the $66,254.55 check into respondent’s client account on July 24, 1987, respondent was entrusted to maintain inviolate $60,012.42 on behalf of clients [A], [M], [O] and [PJ.

(36) Subsequently, respondent issued the following checks from his client account:

(a) A check in the amount of $383, dated July 27, 1987, payable to [R] Funeral Home, regarding the [N] matter, which cleared on July 30, 1987;

(b) A check in the amount of $600, dated July 27, 1987, payable to [M], representing the balance of the entrusted funds owed to [M], which cleared on July 30, 1987;

(c) A check in the amount of $460, dated July 27, .1987, payable to [S], regarding the [N] matter, which cleared on July 31, 1987;

, (d) A check in the amount of $250, dated July 30, 1987, payable to [T], regarding [P], which cleared on July 31, 1987; and

(e) A check in the amount of $500 dated July 30, 1987, payable to [U], regarding [P], which cleared on July 31, 1987.

(37) As a result of these checks clearing respondent’s client account on July 31, 1987, respondent was entrusted to maintain inviolate $57,819.42 on behalf of [A], [O] and [P]. The available balance was $46,320.03.

(38) On August 5, and August 14, 1987, respondent deposited $6,400 and $4,000, respectively, of his own funds into his client account to replenish part of the deficit of client funds.

(39) By check in the amount of $48,190.92, dated August 6, 1987, payable to [P], which cleared respondent’s client account on August 14, 1987, respondent paid [P] the balance of the entrusted funds owed to her.

(40) Respondent’s deposit into his client account of $6,400 of his own funds on August 5, 1987 enabled his check for $48,190.92 to clear his client account on August 14, 1987.

(41) As a result of the check clearing respondent’s client account on August 14, 1987, respondent was entrusted to maintain inviolate $9,628.50 on behalf of [A] and [O], The available balance in respondent’s client account was $6,229.11.

(42) On August 17, 1987, the following checks cleared respondent’s client account:

(a) A check in the amount of $1,130.60 dated August 14, 1987, payable to [A]; and

(b) A check in the amount of $4,228.50, dated August 13, 1987, payable to [V], by which respondent paid the balance of the entrusted funds regarding the [N] matter.

(43) As a result of these checks clearing respondent’s client account on August 17, 1987, respondent was entrusted to maintain $4,269.40 on [A’s] behalf. The available balance in respondent’s client account was $370.01.

(44) On September 10,1987, respondent deposited a check in the amount of $10,000 he received on behalf of his client [W] into his client account. Of that amount, respondent was entitled to receive $3,333.33 as his fee. Respondent was entrusted to maintain inviolate the balance of $6,666.67.

(45) As a result of the deposit of the $10,000 check into respondent’s client account on September 10, 1987, respondent was entrusted to maintain inviolate $10,936.07 on behalf of [A] and [W]. The available balance in respondent’s client account was $8,769.92.

(46) On September 21, 1987, and September 29, 1987, respondent deposited $1,000 and $1,500, respectively, of his own funds into his client account to replenish part of the deficit of client funds.

(47) On September 30, 1987, respondent’s check in the amount of $6,666.67 dated September 28, 1987, payable to [W] cleared his client account. The check was initially presented for payment on September 29, 1987. The check was returned on September 30, 1987, because the funds were frozen pending the clearing of the item by which those funds were deposited thereto. Respondent’s check for $6,666.67 cleared his client account on September 30, 1987, only because of respondent’s deposit therein of the total of $2,500 of his own funds, described in paragraph 46, supra.

(48) Following clearance of that check from respondent’s client account on September 30, 1987, respondent was still entrusted to maintain inviolate $4,269.40 on [A’s] behalf. The available balance of respondent’s client account was $53.25.

(49) From September 30, 1987 through November 18, 1987, the balance in respondent’s client account was always less than $4,269.40 entrusted to respondent on behalf of [A].

(50) On November 18, 1967, respondent sent [A] the check in the amount of $1,220.60 (drawn on Attorney [Fs] account), which reduced to $3,048.80 the amount of [A] funds still entrusted to respondent.

(51) On November 25,1987, respondent deposited a check in the amount of $3,000 he received on behalf of his client [X] into his client account. Of that amount, respondent was entitled to receive $1,200 as the fee. He was entrusted to maintain inviolate the balance of $1,800 in his client account.

(52) As a result of the $3,000 deposit into respondent’s client account, on November 25, 1987, respondent was entrusted to maintain inviolate $4,848.80 on behalf of [A] and [X]. The available balance in respondent’s client account' was $3,005.33.

(53) On December 9, 1987, respondent’s check in the amount of $1,800 dated December 9, 1987, payable to [X], which represented the balance of the entrusted funds owed to [X], clear his client account.

(54) As a result of that check clearing respondent’s client account on December 9, 1987, respondent was entrusted to maintain inviolate $3,048 on behalf of [A]. The available balance in respondent’s client account was $8.81 and remained so until January 4, 1988.

(55) On January 4, 1988, respondent deposited $750 he received on behalf of his client, [Y], into his client account. Of that $750 respondent was entitled to receive $150 as his fee, and was entrusted to maintain inviolate the balance of $600.

(56) Ás a result of the deposit of $750 into respondent’s client account, on January 4, 1988, respondent was entrusted to maintain inviolate $3,648.80 on behalf of [A] and [Y]. The available balance in respondent’s client account was $602.52 and the available balance remained below $3,648.80 until March 10, 1988.

(57) On March 10, 1988, respondent deposited a check in the amount of $4,000 he received on behalf of his client [Z] into his client account. Of that amount, respondent was entitled to receive $1,775 as his fee and was entrusted to maintain inviolate the balance of $2,225.

(58) As a result of the $4,000 deposit into respondent’s client account on March 10, 1988, respondent was entrusted to maintain inviolate $5,873.80 on behalf of [A], [Y] and [Z]. The available balance in respondent’s client account was $4,112.87.

(59) On March 29, 1988, the available balance in respondent’s client account had decreased to $1,565.34 by respondent issuing various checks, none of which related to these three clients.

(60) On March 29, 1988, respondent deposited a check in the amount of $1,000 he received on behalf of his client [AA] into his client account. Of that amount, respondent was entitled to receive $400 as his fee and was entrusted to maintain inviolate the balance of $600.

(61) As a result of the $1,000 deposited into respondent’s client account on March ■ 29, 1988, respondent was entrusted to maintain inviolate $6,473.80 on behalf of [A], [Y], [Z] and [AA]. The available balance was $2,535.34.

(62) On March 31, 1988, réspondent’s check in the amount of $2,225 dated March 30, 1988, payable to [Z], which represented the balance in the entrusted funds owed to [Z], cleared his client account.

(63) As a result of the check clearing respondent’s client account on March 31, 1988, respondent was entrusted to maintain $4,248.80 on behalf of [A], [Y] and [AA]. The available balance in respondent’s client account was $131.91.

(64) From March 31, 1988 until May 2, 1988, the account balance remained below $131.91. In fact, the account had a negative balance from April 11, until May 2, 1988 when respondent deposited $750 of his own funds to replenish part of the deficit of client funds. On May 5, 1988, respondent deposited an additional $3,000 of his own funds to replenish part of the deficit of client funds, which increased balance to $3,703.62.

(65) During May 1988, respondent issued the following checks from his client account:

(a) A check in the amount of $600 dated May 4, 1988, payable to [AA], representing the balance of the entrusted funds owed to [AA], which cleared on May 10, 1988;

(b) A check in the amount of $600 dated May 4, 1988, payable to Mr. and Mrs. [Y], representing the balance of the entrusted funds owed to [Y], which cleared on May 26, 1988.

(66) These two checks cleared respondent’s client account only because of respondent’s deposit therein of the total of $3,750 of his own funds.

(67) As a result of these checks clearing respondent’s client account on May 26, 1988, respondent was entrusted to maintain inviolate $3,048.80 on behalf of [A]. The available balance in respondent’s client account was $451.62.

(68) From May 26,1988 until at least June 30, 1988 the balance of respondent’s client account remained below $451.62. From June 1 until June 6, 1988, the available balance was $87.98. From June 6, until at least Juñe 30, 1988, the available balance was $7.98.

(69) From June 10, 1987 until at least June 30, 1988, respondent issued numerous checks from his client account for personal business expenses in excess of earned fees.

(70) Some of the checks written on respondent’s client account were for various businesses including [BB], where respondent’s wife would have her hair cut, to [CC], where respondent purchased cigarettes and soda pop, [DD] Grocery Store, all of which were admitted misappropriations or mispayments from respondent’s escrow account. (Transcript of disciplinary hearing at 100-1, May 15, 1989).

(71) Although the petition for discipline contains two charges, this matter arose out of a single complaint to petitioner.

(a) [A] was the only client to complain to petitioner concerning this matter.

(b) The allegations of charge II are based upon information voluntarily provided to petitioner by respondent.

(72) All of respondent’s clients have received all of the funds due them.

(73) Respondent greatly cooperated with petitioner in its investigation of this matter and petitioner’s audit of respondent’s account.

(74) Respondent’s cooperation and candor greatly facilitated petitioner’s investigation and prosecution of this matter.

CONCLUSIONS OF LAW

Charge I

(1) The board adopts the finding of the hearing committee with regard to a violation of rule 1-102(A)(4) — conduct involving dishonesty, fraud, deceit, or misrepresentation. The evidence clearly shows that respondent failed to maintain inviolate the funds entrusted to him by his client, [A], from June 1987 until late October 1988, and that he misappropriated [A’s] funds. Respondent failed to disburse any of the entrusted funds owed to [A’s] medical providers, directed to said medical providers or to any collection agency acting on behalf of the said medical providers, as he had agreed to do, despite numerous requests from representatives of the providers and their collection agencies that he do so. Respondent also failed to return the balance of entrusted funds he received in June 1987, on [A’s] behalf, to [A] until late October 1988. All of this was done despite numerous requests from the client [A] regarding respondent’s handling of his funds.

(2) The board adopts the finding of the hearing committee for a violation of rule 1-102(A)(6) — conduct that adversely reflects on fitness to practice law. Respondent’s failure to take any action over the 16 months when he was in control of the client’s funds, in regards to the client’s medical expenses and bills, reflects an inability to exhibit the fitness required to practice law in the Commonwealth of Pennsylvania.

(3) The board finds that there is no violation of rule 9~102(A) — requiring all funds of clients paid to a lawyer or law firm, other than advances for costs and expenses, are to be deposited in one or more identifiable bank accounts maintained in the state in which the law office is situated, and no funds belonging to the lawyer or law firm shall be deposited therein; except funds reasonably sufficient to pay bank charges and funds belonging in part presently or potentially to the lawyer or law firm. The facts show that respondent did deposit all of the funds into the required account. His removal of those funds without authorization of the client constitutes a different disciplinary rule violation, and we are not persuaded that his subsequent redeposit of funds into his client account to make up for previously created shortfalls mandates a violation of that part of this rule which states “no funds belonging to the lawyer or law firm shall be deposited therein.” That interpretation would make it impossible for a lawyer to undo an injustice to his client without further violating the disciplinary rules. The board does not consider this technical lack of a violation of this rule to be significant, since there is a violation of rule 1.15(a) dealing with the same subject matter.

(4) The board adopts the finding of the hearing committee that there is a violation of rule 1.15(a) — funds-held by a lawyer on behalf of clients or third persons shall be kept in a separate account maintained in the state where the lawyers office is situated or elsewhere, with the consent of the client or third person. This rule requires that the funds of the client be “kept in the client or trustee account,” and under the facts presented, those funds clearly were not kept in the account. Any previous problem with the wording of rule 9-102(A) was in fact cured by rule 1.15(a). Consequently there is no great significance to respondent not violating rule 9-102(A).

(5) The board adopts the finding of the hearing committee that there is a violation of rule 1.15(b) — a lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and upon request by the client or third person shall promptly render a full accounting regarding such property. Respondent here was repeatedly requested to account for the funds and their whereabouts, and for his failure to properly disburse them. Therefore, respondent wrongfully withheld [A’s] funds and wrongfully failed to inform [A] of how his account and funds were being handled.

(6) The board finds that rule 8.4(c) — engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation — was violated with regard to [A] when the client requested the status of his case, and was told by respondent that the matter was being taken care of. At the time that respondent made this misrepresentation to his client, he knew that the funds were misused.

Charge 2

(1) The board adopts the finding of the hearing committee that there is a violation of rule 1-102(A)(4) — engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation. Respondent admittedly failed to keep inviolate funds entrusted to him by eight clients in addition to the client [A] during the time period of June 1987, to late May 1988. Therefore, he also misappropriated these additional client’s funds.

(2) The board adopts the finding of the hearing committee that there is a violation of rule 1-102(A)(6) — engaging in conduct that adversely reflects on his fitness to practice law. Respondent’s commingling of the funds of the nine different clients as well as his failure to respond to the request of client [A] to account for the whereabouts and handling of his funds displays a pattern of fraudulent and dishonest conduct which reflects on respondent’s moral fitness and his fitness to practice law.

(3) As previously set forth under charge 1, the board finds no violation of rule 9-102(A), but does adopt the finding of the hearing committee that there is a violation of rule 1.15(a).

(4) The board adopts the finding of the hearing committee that there is a violation of rule 8.4(c) — engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation. This relates to the unauthorized removal of money from clients. It does not relate to any misrepresentations to any of the clients involved in strictly charge 2.

DISCUSSION

Although the board has some differences from the findings of fact and conclusions of law made by the committee, the essential offending conduct is not in dispute. The matter before us, as it was before the committee, is the proper discipline to be imposed. Both petitioner and respondent have done well in presenting to the board the various disciplines imposed in client conversion cases. While there is no per se rule a review of the cases seems to make the format for disposition simply this: when there is a conversion of a client’s funds some form of public discipline will be imposed, which will vary depending on the mitigating or aggravating circumstances of the particular case. Office of Disciplinary Counsel v. Ewing, 496 Pa. 35, 436 A.2d 139 (1981); Matter of Green, 470 Pa. 164, 368 A.2d 245 (1977); Office of Disciplinary Counsel v. Lewis, 493 Pa. 519, 426 A.2d 1138 (1981); and, Office of Disciplinary Counsel v. Hermann, 475 Pa. 560, 381 A.2d 138 (1977).

Unquestionably when the unauthorized conversion of client funds is aggravated with misrepresentation, the discipline imposed is more severe. Office of Disciplinary Counsel v. Kanuck, 517 Pa. 160, 535 A.2d 69 (1987) (five-year suspension); Office of Disciplinary Counsel v. Lucarini, 504 Pa. 271, 472 A.2d 186 (1983) (disbarment); Office of Disciplinary Counsel v. Knepp, 497 Pa. 396, 441 A.2d 1197 (1982) (disbarment). However, this record in no way supports misrepresentations to clients other than [A]. The committee did not make this finding of fact, but in its discussion does refer to misrepresentations to clients in the plural. The committee, in its discussion, clearly intended to convey that there were numerous misrepresentations to numerous clients. Petitioner did not charge respondent with client misrepresentations. And, the record is completely devoid of any misrepresentation to any client, other than [A]. The limited nature of the representation made to [A] when that client asked the status of medical creditor payments, was that “1 am taking care of it.” In fact, no client lost any money. The record supports respondent’s exception on this point.

Therefore, the offending conduct is a misappropriation of client funds which continued for a period of 16 months.

Mitigating factors are found in that:

(1) Respondent’s disciplinary history contains only an informal admonition in 33 years of practice;

(2) Respondent undoubtedly saved the disciplinary system time and expense by forthrightly presenting to the Office of Disciplinary Counsel the infractions in which he had engaged. In fact, there was only one complainant ([A]), with the other infractions being revealed by respondent voluntarily (see Matter of Leopold, 469 Pa. 384, 366 A.2d 227 (1976)); and,

(3) Respondent has enjoyed a good reputation in the legal community and with the public at large.

In the dispositional hearing before the committee, [EE], Esq., a former judge and now a practitioner in [ ] County, testified as to respondent’s good reputation both among the judiciary and his fellow lawyers. [FF] and [GG] testified as to respondent’s good reputation in the public. While the board has limited differences with the committee which reviewed this matter, those differences actually are what sustain the committee’s recommendation for discipline.

The grievous nature of the offense is that respondent converted client funds to his own use, and this continued for a significant period of time. Because the record does not support misrepresentations to clients as described by the committee in its discussion, the board finds that the committee’s recommendation on discipline is appropriate and supported by precedent. A knowing misappropriation, without aggravating circumstances, and the same mitigation as shown here, will result in a two-year suspension. In In re Anonymous no. 50 D.B. 87, 3 D.&C. 4th 627, the misappropriation lasted for almost the same length of time as here; the money was used for the same purposes; and, the mitigation was substantially the same. Certainly, the court is consistent in holding that each case of conversion of funds is evaluated individually. Office of Disciplinary Counsel v. Lucarini, 504 Pa. 271, 471 A.2d 186 (1983). But here our de novo review, which alters some facts and conclusions made by the hearing committee, results in the board coming to the same dispositional recommendation.

RECOMMENDATION

The board unanimously recommends to the Supreme Court of Pennsylvania that respondent be suspended for a period of two years, and that he be ordered to pay the cost of these proceedings.

Ms. Heh. and Mr. Stoelker did not participate in the adjudication.

ORDER

And now, June 4, 1990, upon consideration of the report and recommendation of the Disciplinary Board dated January 5, 1990, the petition for review and the answer thereto, the petition for review is denied, and it is hereby ordered that [respondent] be and he is suspended from the bar of this Commonwealth for a period of two years, and he shall comply with all the provisions of rule 217, Pa.R.D.E. It is further ordered that respondent shall pay costs to the Disciplinary Board pursuant to rule 208(g), Pa.R.D.E.

Mr. Justice Larsen did not participate in this matter.


source: Caselaw Access Project

author: LAVELLE, P. J.,

license: Public Domain

text:
    PennDOT v. Houtz

      John V. Rovinsky, for appellee.

      William G. Schwab, for appellant.
    December 9, 1988
   LAVELLE, P. J.,

This case comes before us as an apparent appeal from a license revocation. Actually, it is an appeal from the reinstatement of a license revocation.

Peter R. Houtz, appellant, was convicted of a violation of 75 Pa.C.S. §1543 in operating a motor vehicle while his license was under suspension. The Pennsylvania Department of Transportation sent Houtz official notice on April 8, 1986 of the revocation of his motor vehicle privileges for six months. Houtz appealed, and a hearing was scheduled, continued to November 14, 1986, and then again to December 2, 1986. Both continuances were requested by Houtz.

On December 2, 1986, Houtz withdrew the appeal. The prothonotary of Carbon County did not notify the Commonwealth of the withdrawal of the appeal. However, counsel for the appellant at that time claims that he sent notice of the withdrawal to PennDOT by regular mail.

On August 3, 1988, the Commonwealth wrote to this court asking for a status report on the case. In response the Carbon County prothonotary, on August 8, 1988, served on the Commonwealth a copy of the docket entries indicating the withdrawal of the appeal on December 2, 1986. On August 27, 1988, PennDOT reinstated its previously ordered six-month revocation of operating privileges.

Houtz then filed the instant petition for appeal. Houtz argues that PennDOT waited too long to reinstate the revocation and that Houtz has relied on that delay to his detriment. He notes that he relocated his residence during the delay and would not have done so had he known that his license would be revoked. He also changed jobs and indicated that he will be unable to commute to work if the revocation stands.

PennDOT argues that (1) this court does not have jurisdiction to hear this appeal, and (2) if this court does have authority to hear this appeal, PennDOT should not be chargeable with the delay in this case.

We agree with PennDOT that we lack jurisdiction.

The case of Commonwealth, Department of Transportation v. Yarbinitz, 97 Pa. Commw. 169, 508 A.2d 641 (1986) delineates the parameters of a trial court’s jurisdiction in license suspension appeals:

“The function of the trial court in an appeal from a license suspension, is to determine the validity of the suspension. Department of Transportation, Bureau of Traffic Safety v. Quinlan (citation omitted). Once the identity of the party whose license is suspended is established and the grounds for the suspension are found to be proper, the trial court’s inquiry is ended.” Yarbinitz, at 171, 508 A.2d at 642.

Here Houtz does not challenge the validity of his license revocation. Rather, he attacks PennDOT’s authority to administratively reinstate a valid revocation on the basis that PennDOT allegedly delayed some 20 months. Neither Pennsylvania statutory law nor case law allows the common pleas court to be a forum for such a challenge.

We hold, therefore, that the common pleas court has no authority to review the reinstatement of the revocation or suspension of a motor vehicle operator’s license.

Accordingly, we enter the following

ORDER OF THE COURT

And now, December 9, 1988, the appeal of Peter R. Houtz from the revocation of his driving privileges for six months is quashed for lack of jurisdiction, and the six-month revocation of his motor vehicle privileges is hereby reinstated.


author: REED, JR., J.,

text:
    In re Sale of Certain Real Property in the Township of Middletown at Upset Sale, September 28, 1987

      Hans Edward Solum Jr., for petitioner.

      James P. Gannon, for respondent.
    August 13, 1990
   REED, JR., J.,

This case comes before üs by petition of Alice S. Benham to set aside tax claim sale.

The facts germane to this case are as follows.

Alice S. Benham is co-executrix of the estate of Grant J. Benham, deceased. Darlington Limited Partnership was a limited partnership in which Mr. Benham was the sole general partner. By reason of his death on March 17, 1983 and by provisions of his will, Alice Benham, his wife, succeeded in his interests and became the sole general partner of the Darlington Limited Partnerships.

The partnership was the record owner of four parcels of land, in Middletown Township, Delaware County. The petition to set aside tax claim sale concerns only one parcel, identified as folio no. 2013-02.

On or about September 28, 1987, the Tax Claim Bureau of Delaware County held a sale of the property. Petitioner, Mrs. Benham, asserts lack of actual or constructive notice to set aside the sale. After hearing held June 11, 1990, both parties submitted memoranda in support of their positions. At the hearing, the bureau presented evidence supporting their position of compliance with the notice requirements of 72 P.S. §5860.602(e)(2). The statute provides in pertinent part:

“If return receipt is not received from each owner pursuant to the provisions of clause (1), then, at least 10 days before the date of sale similar notice of the sale shall be given to each owner who failed to acknowledge the first notice by United States first class mail, proof of mailing, at his last known post office address by virtue of the knowledge and information possessed by the bureau by the tax collector for the taxing district making the return and by the county office responsible for assessments and revisions of taxes. It shall be the duty of the bureau to determine the last known post office address known to said collector and county assessment office.”

According to the evidence submitted by the bureau, notice of public tax sale was sent by certified mail restricted delivery on August 28, 1987, pursuant to the statute. The notice was returned marked “Moved, left no address.” On or about August 26, 1987 advertisements were published in the News of Delaware County, Daily Times and the Legal Journal. A deputy sheriff posted the property on September 4, 1987. A record notice was sent by ordinary U.S. mail on September 18, 1987 pursuant to the statute. Proof of mailing was returned to the bureau marked “no longer at this address.” Thereafter the bureau conducted a telephone directory search which revealed the number was not published.

The bureau did not make reasonable efforts to locate the owner of this parcel of land. It has been held “where a taxing authority intends to conduct a sale of real property because of non-payment of taxes, it must notify the record owner of property by personal. service or certified mail, and where the mailed notice has not been delivered because of an inaccurate address, the authority must make a reasonable effort to ascertain the identity and whereabouts of the owner(s).” Rossi v. Indiana County Tax Claim Bureau, 90 Pa. Commw. 255, 259, 494 A.2d 526, 528 (1985), quoting Tracy v. County of Chester, 507 Pa. 288, 489 A.2d 1334 (1985). The Tracy court implicitly overruled the principle that the bureau has no statutory duty to search out and find taxpayers liable for real estate taxes. The bureau, however, does not have a duty to follow up statutory notice with endless searches in street and telephone directories. Dawson v. Susquehanna County Tax Claim Bureau, 64 Pa. Commw. 106, 438 A.2d 1067 (1982).

The statute provides for two types of notice prior to a tax sale, publication notice and personal notice. A notice of public sale was sent to Darlington Limited Partnerships, 7 Allison Drive, Cherry Hill, N.J. by certified mail August 28, 1987, and was returned marked “Moved, left no address.” On September 18, 1987, the bureau mailed by first class mail a second notice to the same Cherry Hill address. This mailing was also returned, marked “No longer at this address.”

It has been held that a “County Tax Claim Bureau, when faced with fact that notice of tax claim sale on two parcels of property located in township had been returned unclaimed, was required to try and locate property owners before automatically mailing second notice to same address and, by failing to do so, was without authority to effect a valid tax claim sale to individuals in question.” Rossi v. Indiana County Tax Claim Bureau, 90 Pa. Commw. 255, 494 A.2d 526 (1985).

According to the evidence submitted, the bureau did conduct a telephone directory search, however we are unable to determine the precise date of this search. The summary of the bureau’s activities regarding this parcel of land is a dated list of the sequence of events culminating with the sale. The telephone directory investigation is listed immediately following the mailing of the record notice and is not dated. Hence, we must assume the search was conducted after the second notice was mailed. Therefore, we find that the standard set forth in Rossi has not been met.

No evidence was submitted to indicate that the bureau made any inquiry to the Tax Collector regarding a current address for petitioner. Petitioner asserts, and we agree, that if the bureau did make an inquiry it would have revealed letters dated March 29, 1984 from the tax collector to Darlington Limited Partnership c/o Alice Benham, 48 West Forge Road, Glen Mills, Pa. By letter dated September 19, 1984, the school district mailed a notice of delinquent real estate taxes to James P. Gannon, Esq., attorney for Mrs. Benham. “Recognizing . . . that in reality the Tax Claim Bureau, the county assessment office and the local tax collector, are all merely parts of one system of local tax administration, we have held that the last post office address known to the tax collector and the county assessment office, although unknown to the Tax Claim Bureau is the owner’s Tast known post office address’ to which the bureau must send notice.” In re Return of Tax Sale by Indiana County Tax Claim Bureau v. Clawson and Emmanuel, 39 Pa. Commw. 492, 395 A.2d 703 (1979).

It is true Mrs. Benham did not notify the tax collector or anyone else of her change of address. However, we recognize that the statute imposes duties not on owners but on the agencies responsible for sales. Hence, the inquiry is not to be focused on the neglect of the owner, which is often present in some degree, but on whether the activities of the bureau comply with the requirements of the statute. In re Return of Tax Sale by Indiana County Tax Claim Bureau v. Clawson, supra.

The constitution requires due process including reasonable notice before any appropriation of private property. Mrs. Alice Benham’s due process rights have been violated. Hence, we find that Alice S. Benham did not receive actual or constructive notice and the bureau is in violation of 72 P.S. 5860.602(e)(2). As a result, this sale is void and petitioner is granted the opportunity to pay the delinquent real estate taxes.

ORDER

And now, August 13, 1990, after hearing in open court on June 11, 1990 and review of memorandums submitted, it is hereby ordered and decreed that the tax sale for the property identified as folio no. 2013-02 is set aside.


author: TUMOLO, Chairman,

text:
    In re Anonymous No. 108 D.B. 89
    Disciplinary Board Docket no. 108 D.B. 89.
    April 19, 1990
   To the Honorable Chief Justice and Justices of the Supreme Court of Pennsylvania:

TUMOLO, Chairman,

Pursuant to Pennsylvania Rule of Disciplinaiy Enforcement 208(d), the Disciplinary Board of the Supreme Court of Pennsylvania submits its findings and recommendations, to this honorable court with regard to the above-captioned petition for discipline.

PROCEDURAL HISTORY

Respondent is 39 years old and was admitted to the practice of law on November 2, 1977.

On July 5, 1988, the United States Attorney filed a criminal information with the U.S. District Court for the [ ] District of Pennsylvania charging respondent with three counts of failure to file timely federal income tax returns in violation of 26 U.S.C. §7203 as a result of respondent’s failure to timely file returns for the years 1982, 1983, and 1984.

On January 5, 1989, the U.S. Magistrate, sitting without a jury, found respondent guilty on all three counts.

On February 10, 1989, the magistrate sentenced respondent to pay the costs of prosecution, a fine of $1,000, and placed respondent on probation for three concurrent periods of two years.

On May 18, 1989, the Honorable [A], Chief Judge of the U.S. District Court for the [ ] District of Pennsylvania, suspended respondent from practice before the [ ] District Court pursuant to local rules 301.1 and 301.2.

On June 18, 1989, the Supreme Court of Pennsylvania entered a rule, pursuant to rule 214(d)(1), Pa.R.D.E., directing respondent to show cause why he should not be placed on temporary suspension as a result of his criminal conviction.

By order dated October 11, 1989, the Supreme Court of Pennsylvania temporarily suspended respondent from the practice of law in the Commonwealth of Pennsylvania and directed that respondent’s conviction be referred to the Disciplinary Board pursuant to rule 214(f), Pa.R.D.E.

On November 15, 1989, the petition for discipline was referred for hearing to Hearing Committee [ ], consisting of [ ].

On February 22, 1990, the panel conducted its hearing.

On March 22, 1990, the committee filed its report in which it accepted the recommendation of the Office of Disciplinary Counsel for a three-month suspension retroactive to the date when the temporary suspension issued by the Supreme Court of Pennsylvania became effective.

Neither the Office of Disciplinary Counsel nor respondent filed any exceptions.

The matter came before the board on April 5, 1990.

FINDINGS OF FACT

There being no exceptions filed by either party, and based on the board’s independent review of the entire record, the board adopts those as the findings of fact in the case as follows:

(1) Respondent, [ ], is an attorney admitted to practice law in the Commonwealth of Pennsylvania, having been admitted on November 2, 1977, Attorney Registration no. [ ], who resides at [ ].

(2) At the time of the instant charges, respondent was working as the county tax claim solicitor for [ ] County and as a certified public accountant performing some tax work and estate planning for clients. In addition, he had a small general legal practice. At the same time, he was serving without pay as the president of [B] Inc., a non-profit corporation which was formed to obtain a minor league baseball club for the [ ] area.

(3) Since his suspension from the practice of law, respondent has continued to work as a CPA and as a paralegal for an attorney, [C], whose office is located in [ ], Pa.

(4) Respondent’s current registered office address for the practice of law is [ ].

(5) On or about July 5, 1988, the U.S. Attorney, [ ] District, filed a criminal information with the U.S. District Court for the [ ] District of Pennsylvania, indexed to no. CR [ ], charging respondent with three counts of failure to file a timely federal income tax return, in violation of 26 U.S.C. §7203, as a result of respondent’s failure to file federal income tax returns for the years 1982, 1983 and 1984.

(6) On or about July 22, 1988, respondent pleaded not guilty to the criminal charges, but waived his right to a jury trial and consented to be tried before a magistrate.

(7) Respondent was tried before the Honorable [D], U.S. Magistrate, from December 13, 1988 to December 16, 1988.

(8) By memorandum dated January 4, 1989, and filed on January 5, 1989, the magistrate found respondent guilty beyond a reasonable doubt of all three counts in the information.

(9) On or about February 10, 1989, respondent was sentenced to pay the cost of prosecution and a fine of $1,000 without imprisonment; further, respondent was placed on probation for three concurrent periods of two years. Respondent was also ordered to pay a special assessment in the amount of $25 pursuant to 18 U.S.C. §3011 on count III.

(10) By order dated May 18, 1989, the Honorable [A], Chief Judge of the U.S. Court for the £ ] District of Pennsylvania, suspended respondent from practice before the [ ] District Court pursuant to the requirements of local rules 301.1 and 301.2.

(11) By order dated June 18, 1989, the Supreme Court of Pennsylvania entered a rule pursuant to rule 214(d)(1) of the Pennsylvania Rules of Disciplinary Enforcement directing respondent to show cause why he should not be placed on temporary suspension as a result of his criminal conviction.

(12) On or about October 11, 1989, the Supreme Court of Pennsylvania temporarily suspended respondent and referred this matter to the Disciplinary Board.

(13) In addition to the criminal liabilities, it was determined that the tax deficiencies-were due and owing in the following amounts: $4,633 for calendar year 1982 based upon a gross income of $43,272; $9,989 for calendar year 1983 based upon a gross income of $63,682; and $5,945 for calendar year 1984 based upon a gross income of $48,850. The total amounted to $20,567.

(14) Since his conviction, respondent has placed the sum of $40,000 into a special escrow account with the IRS so that the IRS can determine the final liability due and owing for those tax years. It is anticipated that this sum shall be more than sufficient to pay all past tax deficiencies.

(15) Since 1984, respondent has filed timely federal, state and local tax returns. He is presently deficient in his Pennsylvania income tax, but is working out a payment plan with the Department of Revenue.

(16) Respondent became interested in obtaining a minor league baseball club for the [ ] area in the late 1970s.

(17) Respondent, at his personal great expensb, and for no remuneration whatsoever, worked for 10 years to bring minor league baseball back to the [ ] area, which effort succeeded in the purchase by a local authority of the [E] which were then moved to the [ ] area and renamed the [F].

(18) The club is affiliated with the [G] Baseball Club, [ ] level.

(19) Respondent testified that during the 10 years, he raised funds for a feasibility study, hired architects to design a stadium, obtained financing from a variety of sources for the construction of the stadium, the purchase of the baseball club, and prosecuted a lawsuit up to the U.S. Supreme Court when the prior owner refused to perform under a contract for the sale of the [E]. -

(20) Numerous witnesses attested to respondent’s character, describing his selflessness, altruistic spirit, civic devotion, and general integrity. The panel found these witnesses to be credible.

(21) Respondent himself testified to the effect which his quest has had on his personal life, causing his marriage to end in divorce.

(23) Respondent further testified to the fact that he did not realize that the failure to file an income tax return was a crime under the federal statute.

(24) Respondent testified that while he was working with a local CPA firm in the [ ] area, it was not uncommon that returns were not filed on a timely basis.

(25) Respondent testified that because of his intense involvement — almost to the point of obsession — with obtaining a baseball club, he put everything else in his life aside, including filing his tax returns.

(26) Respondent’s efforts are well documented, and the opinion of the U.S. Circuit Court of Appeals, [ ] Circuit, is set forth in respondent’s exhibit 2.

(27) Since his conviction, respondent has cooperated fully with the government in making restitution.

(28) Respondent never intended to evade his tax liability.

(29) The attorney who represented respondent in his criminal proceeding, [H], Esq., testified that he believes the probation period will be reduced because of the extensive cooperation by respondent.

(30) [H] testified that despite the criminal conviction, [respondent] is a credit to both the profession and his community.

(31) Other witnesses testified to the fact that respondent is still regarded as a local hero rather than as a convicted criminal.

(32) Since his suspension, respondent has complied with all of the requirements of the suspension, including notification of his then-existing clients.

(33) Since his suspension, respondent has continued to maintain his contact with the law by working as a paralegal for attorney [C] and the panel finds him fit to practice law.

CONCLUSIONS OF LAW

The board concurs with the finding of the hearing committee that the evidence does not support a violation D.R. 1-102(A)(4) — conduct involving dishonesty, fraud, deceit, or misrepresentation; nor does the evidence support a violation of D.R. 1-102(A)(5) — conduct prejudicial to the administration of justice.

Likewise, the board concurs in the finding of the Hearing Committee that the evidence does support a violation of D.R. 1-102(A)(6) — conduct which adversely reflects on respondent’s fitness to practice law.

DISCUSSION

Respondent did not file timely federal income tax returns for the years 1982,1983, and 1984. In each of those years, he had obtained extensions for purposes of filing, but had gone well beyond the allotted time, having filed all three returns on May 29, 1986, after he had been contacted by agents of the IRS.

Respondent was found guilty beyond a reasonable doubt of having willfully failed to file the three federal income tax returns. While an element of the offense is clearly intentional conduct, it does not involve, nor does the federal criminal prosecution show any evidence of fraud, dishonesty, deceit, or misrepresentation. In re Anonymous No. 20 D.B. 77, 14 D.&C. 3d 123 (1978). Further, the record shows that respondent cooperated with the government, escrowing $40,000 with the IRS until a final determination of taxes, penalties and interest could be made. There is no conduct adverse to the administration of justice. In re Anonymous No. 19 D.B. 79, 14 D.&C. 3d 799 (1980).

Certainly, however, the intentional failure to timely file tax returns does adversely reflect on respondent’s fitness to practice law. In this case, respondent is an attorney, a certified public accountant, and has taught tax law at the University of [ ]. All three of these capacities mandate that he either knew or should have known of the necessity of filing timely tax returns. His license to practice law mandates that respondent.do what the law requires. In re Anonymous No. 18 D.B. 78, 14 D.&C. 3d 759 (1980).

In mitigation, respondent was able to clearly establish that he is a substantial contributor to the community within which he lives. He engaged in an untiring and uncompensated effort over a period of more than 10 years to bring [ ] baseball to the [ ] community. Encompassed in that effort was his planning and seeing to the development of a new stadium. The economic and general community improvements as a result of his efforts are to be congratulated. The hearing committee put it well in its recommendation to the board by stating:

“The respondent now comes before us a fallen hero, a figure from a Greek tragedy. That he is regarded as a home-town hero for returning baseball is his triumph; that we, this panel, must now pass on him for violations of the Code of Professional Responsibility is his tragedy.”

What discipline is appropriate given these facts?

That respondent’s return to the practice of law will not adversely prejudice the bar or the public’s perception thereof is beyond question based on the record before us. The testimony and written recommendations from outstanding members of the bar in the [ ] community attest to respondent’s excellent reputation as a legal practitioner and as a contributing member of that community. While respondent’s actions are not condoned, he is admired and respected, and aside from this transgression has a blemish-free disciplinary history.

And finally, there is nothing to suggest on this record, in light of respondent’s short suspension, that he does not remain fully competent to practice law.

RECOMMENDATION

The board unanimously recommends to the Supreme Court of Pennsylvania that respondent, [ ], be suspended from the practice of law for a period of three months, retroactive to the date of his temporary suspension by the court. It is further recommended that respondent be ordered to pay the posts of prosecution in this matter.

Mr. Brown and Ms. Heh did not participate in the adjudication.

ORDER

And now, June 28, 1990, upon consideration of the report and recommendation of the Disciplinary Board dated April 17, 1990, it is hereby ordered that [respondent] be and he is suspended from the bar of this Commonwealth for a period of two years retroactive to February 10, 1989, and he shall comply with all the provisions of rule 217, Pa.R.D.E. It is further ordered that respondent shall pay costs to the Pisciplinary Board pursuant to rule 208(g), Pa.R.D.E.


author: RUBRIGHT, J.

text:
    Henninger v. Allstate Insurance Co.

      Ronald R. Pettish, for plaintiff.

      John E. Freund III, for defendant.
    August 24, 1990
   RUBRIGHT, J.

Plaintiff commenced this action against defendant seeking unde-rinsured motorist benefits. His claim arises out of an accident which occurred on November 30, 1986, when he was struck by an automobile operated by Robert J. Kendricks. As a result of the accident, plaintiff suffered bodily injury, and Travelers Insurance Company, Kendricks’ insurer, paid the $50,000 policy limit as well as first-party medical and wage-loss benefits to plaintiff. It has been stipulated by counsel that, if this court determines that plaintiff is covered under defendant’s policy, the damages would equal or exceed $15,000, which is the amount of underinsured benefits available under the policy.

Plaintiff claims that he is an insured under an Allstate policy issued to his parents, Harold and Marie Henninger. Defendant has denied coverage on the basis that plaintiff does not reside with his parents and is not, therefore, an insured under the policy. A non-jury trial was held on August 8, 1990, at which time the court heard evidence on the issue of plaintiff’s residence at the relevant time.

At trial, it was established that plaintiff’s parents, Harold and Marie Henninger, reside at 616 West South Street, Mahanoy City, Pennsylvania. On April 4, 1986, plaintiff and his fiance purchased a house located at 607 West Penn Street, Shenandoah, Pa. Shortly after settlement on that property, plaintiff had a telephone installed and changed his mailing address to the West Penn Street address. At that time, plaintiff did not intend to move into the Shenandoah home until after his wedding which was set for April 1987. The house was fully furnished when it was purchased but was in need of painting and minor repairs. After plaintiff and his fiance purchased the house, plaintiff occasionally slept there if he was working late, either in the house or at his employment. All of plaintiff’s clothing and other personal property remained in Mahanoy City until after plaintiff’s release from the hospital when he moved to Shenandoah due to his immobility.

Plaintiff admitted that after he was struck by Kendricks, he gave the investigating police officer and the hospital emergency room personnel the West Penn Street address. His reason for doing so was never explored.

Carl Meckert, a claims representative for Allstate, testified as to telephone conversations he had with plaintiff and his parents during his investigation of plaintiff’s claim. He stated that when he spoke with plaintiff’s mother on January 16, 1987, she stated that plaintiff had purchased a home and was living there at the time of the accident. Plaintiff’s mother denied any recollection of that conversation. Mr. Meckert spoke with plaintiff on January 29, 1987, and was told that, at the time of the accident, he was in the process of moving to Shenandoah but divided his time between Shenandoah and Mahanoy City almost equally. Finally, Mr. Meckert spoke with plaintiff’s father on February 3, 1987. He was told that, at the time of the accident, plaintiff stayed in Mahanoy City during the week but usually stayed in Shenandoah on weekends. Plaintiff’s father testified that he had told Mr. Meckert that plaintiff lived in Mahanoy City but worked on the Shenandoah house on weekends.

The insurance policy issued to plaintiff’s parents provides in Part II - Uninsured and Underinsured Motorists Insurance, as follows:

'Persons Insured

“(1) You and any relative who resides in your household,,

“(2) Any person while occupying your insured auto, and

“(3) Any other person who is legally entitled to recover because of bodily injury to you, a relative who resides in your household, or an occupant of your insured auto.”

Therefore, in order to be entitled to underinsured motorists coverage, plaintiff must have been residing in his parents’ household at the time of the accident. “Resident” or “reside” is defined in the insurance policy as “the physical presence in your household with the intention to continue living there.”

In Krager v. Foremost Insurance Company, 304 Pa. Super. 390, 450 A.2d 736 (1982), the Superior Court wrote as follows:

“The courts of this Commonwealth have historically recognized the classical definitions of the words domicile and residence. Domicile being that place where a man has his true, fixed and permanent home and principal establishment, and to which whenever he is absent he has the intention of returning.

“Residence being a factual place of abode. Living in a particular place, requiring only physical presence.

“Though the two words may be used in the same context, the word resident as used in the policy, without additional words of refinement, i.e. permanent, legal, etc. would carry the more transitory meaning.” 304 Pa. Super at 393-4, 450 A.2d at 738. The definitions of residence and domicile enunciated in Krager were again relied upon in the context of liability insurance in Amica Mutual Insurance Company v. Donegal Mutual Insurance Company, 376 Pa. Super. 109, 545 A.2d 343 (1988).

Having evaluated the evidence presented at the trial in light of the recognized definition of residence in cases involving liability insurance, we conclude that plaintiff did reside in his parents’ household at the time of the accident. Although he may have intended to move to Shenandoah in April 1987, and occasionally slept at the Shenandoah house before the accident, the evidence establishes that his physical presence or “residence” was at his parents’ home in Mahanoy City at the time of the accident. It was at their home that he kept his belongings, ate most of his evening meals, and slept the majority of the time. The fact that plaintiff intended to reside in Shenandoah some four months later is not pertinent to the issue of his residence at the time of the accident. See Amica Mutual Insurance Company v. Donegal Mutual Insurance Company, supra.

Having concluded that plaintiff resided in the named insured’s household at the time of the accident, the court enters the following

ORDER OF COURT

And now, August 24, 1990, upon careful consideration of the evidence presented at non-jury trial, the court finds that plaintiff is entitled to underin-sured motorists coverage under policy no. 0 08 290367 issued by defendant and it is hereby ordered that judgment shall be entered in favor of plaintiff and against defendant.


author: MILLER, J.,

text:
    Bechard v. Reichart

      Louis J. Stack, for plaintiffs.

      Joseph F. Kulwicki III, for defendants.

      July 31, 1990
   MILLER, J.,

Must defendants who file a cross-claim in an action originally brought by plaintiffs before a district justice indicate thát they are appealing both cases in order to preserve the right to raise the counterclaim in common pleas court?

DISCUSSION

Plaintiffs were the tenants of defendants under a written lease for residential property. Plaintiffs moved out, and asked for, but never received back, their security deposit. They filed suit before a district justice asking for judgment against defendants, the landlords, in the amount of the security deposit. We assume the theory was a breach of contract theory for failure to return the security deposit.

Defendants, believing that plaintiffs had done damage to the property, filed their own claim under Pa.R.C.P.D.J. 315. The district justice, as was required by the rules, held a hearing on both complaints at the same time. He then entered a judgment, in writing, on a single piece of paper, but with paragraphs. He first entered judgment in favor of plaintiffs in the amount of the security deposit. In the next paragraph he entered judgment on the counterclaim in favor of defendants in a small amount.

The district justice then went on and deducted from plaintiffs’ judgment, the larger of the two judgments, the amount of the judgment on defendants’ counterclaim, to arrive at “a net judgment” for plaintiffs.

Defendants then filed an appeal but captioned the case in the names of the original plaintiffs against the original defendants. They did not include a caption of their claim. The appeal to this court was taken properly and timely.

Plaintiffs filed a complaint with the prothonotary in the amount of the security deposit. Defendants filed an answer containing their counterclaim. Plaintiffs filed preliminary objections in the nature of a demurrer alleging that defendants failed to appeal the judgment entered on their counterclaim and asking that the counterclaim be stricken.

We do not think a demurrer is a proper way to raise this issue. We think plaintiff’s, objection is in the nature of res judicata and should be raised by a motion for summary judgment. Nonetheless, in order to resolve this matter without additional proceedings we will dispose of this matter on the merits.

In Burr v. Callwood, 374 Pa. Super. 502, 543 A.2d 583 (1988), landlords filed a suit before a district justice to recover rents and possession. The tenants filed a complaint against the landlord seeking damages for breach of implied warranty of habitability and intentional infliction of emotional distress. A single hearing was held but two separate judgments were entered. In the landlord’s initial complaint a money judgment was entered in favor of the landlord. On the claim brought by the tenants there was no money judgment, for the district justice found in favor of the landlords, the defendants, on the counterclaim. Two separate judgments were entered and a standard notice was sent on each judgment informing the parties that they had a right of appeal.

The tenants filed an appeal on the initial complaint of the landlords against them. At no time did they appeal the adverse judgment entered on their claim against the landlords. When the suit reached common pleas they then filed a counterclaim for breach of implied warranty of habitability and intentional infliction of emotional distress.

The Superior Court held, in the clearest of language, that:

“[I]n order to preserve the issues raised in the counterclaim, the defendant must file an appeal from the adverse judgment entered on the counterclaim. ” Burr, supra, (emphasis in original)

“More importantly, the rules of procedure regulating appeals from district justices clearly treat the decisions entered at the district justice level as separate judgments, and require the countérclai-mant at the district justice level to appeal the adverse judgment entered on the counterclaim in order to preserve the issues raised on the counterclaim for appeal. Pa.R.C.P.D.J. 1004(c). . . .’’Burr, supra.

. “The rule clearly treats the judgments entered on the two cross-complaints as separate judgments; the rule requires any party who wishes to challenge an adverse judgment to appeal that judgment. The rule makes no mention of any circumstances where a separate notice of appeal is not required. A party who wishes to challenge the findings made in reaching the adverse judgment must file a notice of appeal from that judgment.

“Here the appellants were counterclaimants in the action before the district justice. They failed to file a notice of appeal from the adverse judgment entered on their claim. Thus, they failed to preserve that claim for appeal, and the judgment became final.” Burr, supra.

We respectfully disagree with the Superior Court that the rule treats judgments entered on two cross-complaints as separate judgments. We do not think Pa.R.C.P.D.J. 1004 covers all of the possible situations nor takes into account another rule that seems to be equally applicable.

For instance, Pa.R.C.P.D.J.1004 does not cover a situation where an appellant appeals from the judgment on the appellee’s complaint much less indicates what happens tó the appellant’s counterclaim when that happens. Pa.R.C.P.D.J. 1004(c) deals only with when the appellant appeals from the judgment on his own complaint or on both complaints and only then mandates what the appellee shall do. It makes no mention of what the appellant must do, nor the effect on the appellant, of taking or not taking, an.appeal from the original complaint, the cross complaint or both complaints.

Against that backdrop of obvious incompleteness we must consider the effect of Pa.R.C.P.D.J. 315(c) which seemingly obligates the district justice to find, where there is a cross-claim, a money judgment for either the plaintiff or the defendant “but not for both.” The rule then obligates the magistrate to deduct the lesser judgment from the greater judgment and that becomes the money judgment for one of the parties.

Therefore, we do not think Burr v. Callwood, supra, covers all possible situations nor does it dispose of the effect of Pa.R.C.P.D.J. 315(c) when read with Pa.R.C.P.D.J. 1004.

Here the district magistrate followed Pa.R.C.P. D.J. 315 and entered judgment in favor of plaintiffs against defendants for the net difference between the respective amounts he found were due and owing.

ORDER

And now, July 31, 1990, plaintiffs’ preliminary objections in the nature of a demurrer are dismissed. Plaintiffs shall file a reply to defendants’ counterclaim within 20 days from the date of this order.

      . We do not have the original papers so we do not know the exact amount of defendants’ counterclaim. If the same counterclaim now being made before us was made before the district justice then defendants did not receive much of the counterclaim they made.

      . In our case only one notice was sent covering both claims.


author: HESS, J.,

text:
    Borough of West Fairview v. Hess

      Thomas E. Brenner, for plaintiff.

      Christopher Houston, for defendants.
    January 30, 1989
   HESS, J.,

We are asked to revisit the Borough of West Fairview and its suit instituted against former borough auditors, Peggy Hess, Donna Kindness, Vicki Judy, and Christine Zimmerman. On May 4, 1988, we dismissed plaintiff’s count II on the grounds that the borough cannot pursue a contract claim against the auditors because they are public officers. See Borough of West Fairview v. Peggy Hess, Vicki Judy, Donna Kindness, and Christine Zimmerman, 38 Cumberland L.J. 521 (1988). Defendants have now moved for summary judgment on count I, the remaining count, contending that the auditors are protected by official and governmental immunity. In addition, defendants assert the statute of limitations and that plaintiff failed to give defendants the requisite notice of suit. Because we previously discussed, in detail, the facts of this case, we will succinctly recapitulate them here. Defendants were elected borough auditors for various years between 1982 and 1985. They failed to discover that the borough secretary, Bonnie Kapp, an additional defendant in this suit, misappropriated $78,000 during that period. The borough filed a complaint against the auditors averring, inter alia, that the auditors negligently performed their duties by not discovering the missing funds and thereby preventing further loss.

A motion for summary judgment may properly be granted only:

“[I]f the pleadings, depositions, answers to interrogatories and admissions on file, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Pa.R.C.P. 1035(b).

It is not the court’s function to decide issues of fact, but solely to determine whether there is an issue of fact to be tried. Thorsen v. Iron and Glass Bank, 328 Pa. Super. 135, 476 A.2d 928 (1984). The primary issue in this case is whether the auditors are immune from suit by the borough pursuant to the Political Subdivision Tort Claims Act, 42 Pa.C.S. §8541 et seq. We find that they are. Section 8541, governmental immunity generally, states:

“Except as otherwise provided in this sub-chapter, no local agency shall be liable for any damages on account of any injury to a person or property caused by an act of the local agency or an employee thereof or any other person.”

The definitional section of Chapter 85, 42 Pa.C.S. §8501, defines a governmental agency as, “Any Commonwealth agency or any political subdivision or municipal or other local authority, or any officer or agency of any such political subdivision or local authority. ” (emphasis supplied) Thus, the auditors, as officers, are government agencies for the purpose of the Tort Claims Act. Consequently, they cannot be personally liable for loss of property occasioned by their negligence unless an exception to immunity is applicable.

Plaintiff asserts that this case falls under the exception of paragraph 8542(b)(2), which provides that liability may be imposed when the loss is suffered as a result of “the care, custody or control of personal property of others in the possession or control of the local agency.” Plaintiff’s interpretation strains the aforesaid language to obtain a meaning clearly not intended. We have found no case discussing the meaning of this section in relation to an auditing function, but the plain language of the exceptions indicates that the General Assembly intended to impose liability for losses incurred when a local agency has actual physical control, or the ability to control the subject property. Here, the auditors had no such control. Their function was merely to review the revenues and expenditures of the borough. It is not alleged, nor is it provided in the Borough Code, 53 P.S. §45101 et seq., that the auditors could ever possess or control borough funds. Accordingly, we find that the acts of the auditors are not subject to this exception and that they are protected by governmental immunity.

Plaintiff argues that such a finding runs afoul of the purpose for enacting the Tort Claims Act. Plaintiff contends that the act was intended to protect municipalities from suffering losses due to its acts and those of its employees and officials. According to the borough, our decision allows it to suffer a $78,000 loss at the hands of an act that was intended to protect it. Though this argument has some appeal, the language of the Tort Claims Act is broad, such that it provides immunity regardless of who suffers the loss. It does not limit immunity as against any particular plaintiffs. Accordingly, we grant summary judgment in favor of defendants on count I, plaintiff being precluded from recovery, as a matter of law.

ORDER OF COURT

And now, January 30, 1989, defendants’ motion for summary judgment as to count I of plaintiff’s complaint is granted.


author: D’ALESSANDRO, J.,

text:
    Boatin v. Metcalf

      Steven M. Kramer, for plaintiff.

      Denise A. Kuhn, for defendant.
    August 10, 1990
   D’ALESSANDRO, J.,

This opinion is written in support of this court’s order of May 3, 1990, granting defendant Ann Metcalf’s motion for summary judgment. For the reasons stated herein, this court granted defendant’s motion for summary judgment.

Plaintiff Boatin was in the business of renting his automobile to Pennsylvania driver’s license permit-tees for driver’s license road-testing purposes at the Island Road Examination Point in Philadelphia, Pennsylvania. Defendant Corporal Ann Metcalf, a state police officer, was the supervisor at the Island Road Examination Point. Over a period of time, a series of disputes arose between Boatin and various personnel stationed at the Island Road facility. On May 6, 1987, an automobile accident involving Boa-tin’s car occurred at the road test site. Driver license examiner Armand Faraglia was injured as a result of the collision.

Corporal Metcalf investigated the accident and listed Boatin’s car as the cause of the accident. She further informed Boatin that his car would not be accepted at the examination point until the steering mechanism was inspected. Boatin lodged an internal complaint against Metcalf on May 12, 1987. Lieutenant Tyree C. Blocker, commanding officer of the criminal investigation section of Troop “K,” Philadelphia, was assigned to investigate the complaint.

Lieutenant Blocker interviewed Corporal Metcalf as part of his investigation. Corporal Metcalf was “on duty” at the time of the interview. Metcalf told Blocker that she suspected another rental vehicle owner, Schwam, was splitting profits with Boatin even though Boatin was not at that point renting his own car, because Schwam feared that Boatin might do him bodily harm. Blocker’s report indicated that Corporal Metcalf believed that Mr. Boatin was “extorting” money from Mr. Schwam and that she believed Mr. Schwam was giving Mr. Boatin money under “the threat of bodily harm.” The word “ex-tor ting” was Blocker’s word and was used to sum up what Metcalf had told him.

Plaintiff Boatin originally filed suit in the United States District Court for the Eastern District of Pennsylvania. This suit, alleging federal and constitutional causes of action, was dismissed on all but two counts. On the two counts, the jury returned verdicts against Boatin and in favor of defendants. On June 22, 1988, Boatin filed the instant action against Metcalf in state court alleging libel and slander. This court granted summary judgment in favor of Metcalf and against Boatin.

Summary judgment should be granted where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Williams v. Pilgrim Life Insurance Company, 306 Pa. Super. 170, 452 A.2d 269 (1982). Summary judgment should not be granted unless the case is free from doubt. Weiss v. Keystone Mack Sales, 310 Pa. Super. 425, 456 A.2d 1009 (1983). All doubts as to the existence of a genuine issue of material fact must be resolved against the moving party. Public Utility v. Thornburgh, 62 Pa. Commw. 88, 434 A.2d 1327 (1982). It is against this standard that we review the instant motion for summary judgment.

The Commonwealth of Pennsylvania and its officials acting within the scope of their duties are immune from suit except where specifically waived. 1 Pa.C.S. §2310. When sovereign immunity is specifically waived “[a] claim against the Commonwealth and its officials and employees shall be brought only in such manner and in such courts and in such cases as directed by the provisions of Title 42. ...” 1 Pa.C.S. §2310.

“Commonwealth parties” may be sued only if the claim is one for negligence and fits within one of the nine enumerated categories under 42 Pa.C.S. §8522(b)(l) through (9) which serve as exceptions to the general rule of sovereign immunity. 42 Pa.C.S. §8501. A Commonwealth party is “[a] Commonwealth agency and any employee thereof, but only with respect to an action within the scope of his office or employment.” 42 Pa.C.S. §8501.

The Pennsylvania State Police is a “Commonwealth agency” under 42 Pa.C.S. §8501. 75 P.S. §250 et seq. Corporal Metcalf is an employee of the Pennsylvania State Police and is therefore an employee of a “Commonwealth agency.” Thus, Corporal Metcalf is protected under the blanket of sovereign immunity unless Boatin’s claim falls within one of the enumerated, and quite limited, exceptions to sovereign immunity.

A review of the exceptions under 42 Pa.C.S. §8522(b)(l) through (9) indicates that the instant libel and slander action does not fall within one of the enumerated exceptions. In fact, these exceptions are available where the acts'.which cause injury were negligent and damages would be available but for sovereign immunity. 42 Pa.C.S. §8522. The instant action is clearly based on an intentional tort rather than on any negligence of a Commonwealth party. Since the complaint does not sound in negligence and is not within the enumerated exceptions, sovereign immunity bars the suit.

Because Corporal Metcalf is. an employee of a Commonwealth agency and said agency, the Pennsylvania State Police, is immune from suit except in nine enumerated circumstances, and plaintiff’s action does not fall within one of those nine exceptions, this court granted defendant Metcalf’s motion for summary judgment.


author: HILL, J.,

text:
    Rivera v. The Philadelphia Theological Seminary of St. Charles Borromeo Inc.

      Jeffrey M. Stopford, for plaintiff.

      Walter A. McClatchy, for garnishee.
    August 30, 1990
   HILL, J.,

This garnishment action was commenced by plaintiff, Concepcion L. Rivera, who holds a judgment against Our Lady of Lourdes Catholic Church. The garnishee, First State Insurance Company, is the excess insurance carrier for the Archdiocese of Philadelphia, with respect to any judgment greater than $500,000. First State is a Delaware corporation with its principal office located in Boston, Massachusetts. It has no office within the Commonwealth of Pennsylvania.

On October 4, 1989, plaintiff served a writ of execution by adult resident of Massachusetts on an employee of the mail room of First State’s office in Boston. On March 6, 1990, First State filed preliminary objections on the grounds that service was ineffective and venue improper.

Service of Process

Plaintiff contends that service was proper because it was made in accordance with Pa.R.C.P. 3112(b)(2) which permits substituted service by competent adult on an out-of-state garnishee. In the alternative, plaintiff urges the court to disregard any defect in service which does not affect the “substantial rights of the parties.” Pa.R.C.P. 126.

Service in a garnishment proceeding is governed by rule 3111(a) which provides as follows:

“The writ shall be served by the sheriff upon the garnishee in the manner prescribed by rule 402(a) except as otherwise provided by rules 3112 and 3113. The sheriff shall furnish the garnishee with an additional copy of the writ for each defendant. If the garnishee served was not named in the writ he shall be added as a garnishee and return made accordingly.” Pa.R.C.P. 3111(a). (emphasis supplied)

Rule 3112, the exception referred to in rule 3111, provides as follows:

“Rule 3112. Service of the Writ upon Garnishee. Real Property of Defendant in Name of Third Party.

“(a) The sheriff shall execute the writ against real property of the defendant, title to which is recorded in the name of a third party, by serving the third party as garnishee and noting upon the writ a description of the real property and a statement that he has levied upon defendant’s interest therein.

“(b) The plaintiff shall have the right of service upon the garnishee

“(1) in any other county by having the sheriff of the county in which the writ is issued deputize the sheriff of the other county where service may be had, or

“(2) outside the state by having any competent adult serve the garnishee personally and file an affidavit thereof in the action.

“(C) If the garnishee cannot be served as provided in rules 3111(a) or 3112(b), he shall be served by (1) posting a copy of the writ on a public part of the property and (2) handing a copy of the writ to the person in actual possession of the property or, if no one is in actual possession, by sending the garnishee a copy of the writ together with an inventory of the property attached, by registered mail directed to his last known address or, if no address is known and an affidavit to that effect is filed, by publication in such manner as the court by special order shall direct.” Pa.R.C.P. 3112. (emphasis supplied)

At issue is the proper interpretation of rule 3112(b)(2) which permits substituted service by competent adult outside the Commonwealth. Research indicates that this matter has not been decided by an appellate court of this state.

First State contends that rule 3112, and in particular rule 3112(b)(2), is limited to cases involving real properly of defendant, title to Which is recorded in the name of a third party, citing Rivera v. Philadelphia Theological Seminary of St. Charles Borromeo, 1 D.&C. 4th 106 (1988) (hereinafter “Rivera I”).

Rivera I, decided by the undersigned, involved plaintiff’s attempt to collect from Our Lady of Lourdes’ primary insurance carrier, Zurich Insurance Company. Zurich was based in Illinois with a local office in Pittsburgh, Pennsylvania. In Rivera I, service of the writ of execution was made by a competent adult on an employee in Zurich’s office in Illinois.

This court sustained Zurich’s preliminary objections on grounds that service was ineffective under rules 3111 and 3112. Specifically, this court found that the exception relied on by plaintiff, rule 3112(b)(2), was limited to cases involving real property.

Instantly, plaintiff argues that this court’s prior holding in Rivera I was “inventive.” Plaintiff’s memorandum contra preliminary objections of garnishee, First State Insurance Company, at 5. Plaintiff urges this court to reconsider its prior holding and find that although rule 3112(a) is limited to real property, rule 3112(b) is not so limited and permits substituted service by a competent adult in ány case involving an out-of-state garnishee.

Plaintiff supports her position with various rules of statutory construction, namely, that: (1) the absence of any reference to real property within the text of rule 3112(b) indicates the drafters’ intent that the rule is not so limited; (2) the title of rule 3112, “Service of the Writ upon Garnishee. Real Property of Defendant in Name of Third Party,” suggests two separate areas, the former referring to subsection (b) and the latter to subsection (a); and (3) the language of rule 3112(b) is unambiguous and nothing in its plain meaning limits its scope to real property.

After an extensive review of the applicable rules, this court declines to interpret rule 3112 as urged by plaintiff and finds that rule 3112(b)(2) permits substituted service by competent adult only in cases involving real property.

Rules 3111, 3112 and 3113 governing service in a garnishment proceeding must be read within the framework of the rules governing the “Enforcement of Money Judgments for the Payment of Money.” Pa.R.C.P. 3101 et seq.

Rule 3108(a)(5) provides as follows:

“(a) Service of the writ shall be made by the sheriff in the case of. . .

“(5) real property of the defendant, title to which is recorded in the name of a third party, by levy and attachment as provided by rule 3112;. . Pa.R.C.P. 3108(1)(5).

Rule 3108(a)(5) refers to “rule 3112” as a whole without limiting its reference to “rule 3112(a).” In this court’s opinion, had it been the drafters’ intent that only subsection (a) of rule 3112 apply to real property, the reference within rule 3108(a)(5) would have indicated as much. Plaintiff would have this court ignore the plain meaning of rule 3108(a)(5) which unequivocally provides that rule 3112 as a whole applies in the very limited circumstance where real property is held of record in the name of a third party.

Also, to interpret rule 3112(b) as permitting substituted service generally would make the rule internally inconsistent. Subsection (c) of rule 3112, which refers to service by “posting a copy of the writ on a public part of the property,” can only be read as applying to cases involving real property, even though “real property” is not specifically mentioned. The fact that subsections (a) and (c) of rule 3112 apply to real property, compels a conclusion that subsection (b) is limited to real property as well.

In this court’s opinion, the Supreme Court intended to create this limited exception permitting substituted service on an out-of-state garnishee only where the judgment creditor seeks to attach real property located within the Commonwealth. In such a case, the court’s jurisdiction is derived from the location of the real property within the state. Thus, the due process rights of the out-of-state garnishee are not violated. See 9 Goodrich-Amran 2d §3112(b): 1.

If rule 3112(b) is interpreted, as urged by plaintiff, to permit any competent adult to serve a writ of execution on a resident of State A as a garnishee, it could force the garnishee to appear in Pennsylvania regardless, for example, of whether there was long-arm jurisdiction or not. It would afford less protection to an out-of-state resident as a garnishee than that same party would receive had that party been the defendant in the underlying case. The interpretation of rule 3112(b) urged by plaintiff would have the far-reaching effect of permitting a judgment holder to attach out-of-state property and to force an out-of-state garnishee to answer to the garnishment proceedings in the Commonwealth regardless of whether the courts of this Commonwealth have any jurisdiction over the garnishee or the property involved.

Admittedly, the facts in the instant case are not as compelling since the courts of this Commonwealth have jurisdiction over an out-of-state insurance company by virtue of its doing business in the Commonwealth and the existence of minimum contacts within the state.

However, this court cannot interpret rule 3112(b) as permitting a judgment holder to command the presence of an out-of-state garnishee and to attach property located anywhere in the United States without regard for the jurisdiction of the court or the due process rights of the out-of-state resident. Accordingly, this court concludes that rule 3112 as a whole applies where real property is involved and, therefore, substituted service instantly was ineffective.

Plaintiff argues that by limiting rule 3112 to real property the court severely hinders the ability of a judgment holder to attach defendant’s property located within the Commonwealth but outside the county of judgment because the only rule permitting deputized service outside the county of judgment is rule 3112(b)(1). Plaintiff contends that in any case where real property, is not involved, a judgment holder will be forced to transfer the judgment to the county where the property is located, but rule 3103(b) does not even require plaintiff to do that much. This rule provides as follows:

“A writ issued by the prothonotary of the county in which judgment was entered originally . . . may be directed to the sheriff of any county within the Commonwealth.” Pa.R.C.P. 3103(b)

In other words, rule 3103(b) eliminates the need for deputized service or transfer of the judgment since it permits a writ of execution to be directed to the sheriff of any county within the Commonwealth for service without going through the transfer procedure.

Plaintiff further argues that limiting rule 3112(b) to real property has the effect of depriving plaintiff of any means to serve an out-of-state garnishee thereby creating “a massive exception to protect out-of-state garnishees, including out-of-state insurers, from all garnishment proceedings under all circumstances, except those limited to real property.” Plaintiff’s memorandum at 6. This, she argues, is contrary to the Supreme Court’s intent to favor the public interest. See Pa.R.C.P. 128(e).

In limiting rule 3112(b) to real property, it is not this court’s intent to permit an out-of-state garnishee to avoid its contractual obligations. Rather, in enforcing these contractual obligations, it is essential that a plaintiff comply with the proper procedures given the uncertain interest which a garnishee may have in a particular underlying action and the lack of any notice or opportunity to be heard prior to attachment.

Moreover, plaintiff is not without a means to enforce her judgment since she can transfer the judgment to Massachusetts and pursue attachment there; that this may require the added assistance of Massachusetts counsel, notwithstanding.

Also, in her memorandum contra preliminary objections.of garnishee, First State Insurance Company, plaintiff suggests that she could serve First State in Pennsylvania through the Insurance Commissioner or Secretary of State in Harrisburg. Apparently, plaintiff does not favor this option either, arguing that if she were to direct the writ for service in Harrisburg venue would lie in Dauphin County thereby inconveniencing plaintiff.

When a writ is directed from the county of judgment to the garnishee county for service under rule 3141(b), the garnishee has the option of venue in either the county where the writ was issued (i.e. the county of judgment) or in the county to which directed. Thus, if plaintiff directs the writ to the Sheriff of Dauphin County for service, she does risk First State’s election of venue in Dauphin County. This court is not to be persuaded by inconvenience to plaintiff in light of the Supreme Court’s obvious intent to give the garnishee the option of venue.

Plaintiff urges this court to overlook any errors in service and declare service of the writ of execution on October 4, 1989, effective. Plaintiff cites as authority rule 126 which provides:

“The rules shall be liberally construed to secure the just, speedy and inexpensive determination of every action or proceeding to which they are applicable. The court at every stage of any such action or proceeding may disregard any error or defect of procedure which does not affect the substantial rights of the parties.” Pa.R.C.P. 126.

Plaintiff claims that since she could have effectively served First State by serving the writ upon the Insurance Commissioner under the authority of 40 Pa.C.S. §1006.13, the substantial rights of the parties would not be affected by declaring service effective. In the court’s opinion, this is total nonsense. Accordingly, garnishee’s preliminary objections to service on October 4, 1989, are sustained.

Venue

Garnishee claims that proper venue for garnishee to attach or defend the writ of execution is in Massachusetts. Since this court has found that plaintiff’s method of service in Massachusetts was ineffective, the issue of venue is moot.

ORDER

And now, August 30, 1990, upon consideration of First State Insurance Company’s preliminary objections, it is hereby ordered that said preliminary objections are sustained.

      . Substituted service is service other than personal service within the jurisdiction; it includes service by publication, by mail to the last known address or by personal service outside the state. See Black’s Law Dictionary 1282 (1979).

      . Plaintiff, however, did not appeal from this court’s decision in Rivera I.

      . A plaintiff seeking to enforce a judgment against an out-of-state defendant would be required to transfer the judgment to the defendant’s state (hereinafter “sister state”) and proceed under that state’s foreign judgment enforcement statute. Under such statutes, before a foreign judgment is enforced in the sister state, the court of the sister state must determine whether the foreign judgment is entitled to be given full faith and credit. See e.g., 42 Pa.C.S. §4306.