author: DJERASSI, J.,

text:
    Deutsche Bank National Trust Co. v. Gardner

      Brett L. Messinger, Brian J, Slipakoff, Courtenay R. Dunn and Kassia Fialkoff, for appellant.

      Michael S. Gardner, pro se defendant.
    March 26, 2015
   DJERASSI, J.,

This appeal reviews whether defendant Michael Gardner was given legal notice of the right to rescind a mortgage refinance under the Truth in Lending Act (“TILA”). Answering in the negative, we found an affirmative defense precluded foreclosure on Gardner’s residential property by plaintiff Deutsche Bank National Trust Company (“Deutsche Bank”), successor to the original lender, Ameriquest Mortgage Company (“Ameriquest”).

Gardner lives in a residence he owns at 9887 Verree Road, Philadelphia, PA. In June 2003, he signed a mortgage on his home and borrowed $140,000 from Ameriquest. In January 2005, Gardner and Ameriquest refinanced in the amount of $185,400, adding $45,400 to the loan. A second mortgage was signed. At closing Ameriquest gave Gardner a federal H-8 Form to advise Gardner of his rescission rights.

At the early stages of the economic downturn in October 2007 and facing economic pressure, Gardner applied to rescind the refinance agreement and stopped repaying the loan. He learned he had not been given correct disclosure of his rescission rights, and this had taken place at a time when Ameriquest’s mortgage practices were coming under national scrutiny. Hundreds of actions had been filed against Ameriquest under the TILA, and Gardner added his own complaint in the U.S. Court for the Eastern District of Pennsylvania. Gardner’s action to enforce his rescission rights for the refinance loan was transferred and consolidated with an ongoing TILA class action against Ameriquest in the U.S. Court for the Northern District of Illinois. When this class action settled, Gardner waived his direct TILA claims against Ameriquest and kept the right to defend himself against mortgage foreclosure. Gardner also preserved his right to assert an affirmative defense based on inadequate notice.

Among other issues, we conclude that an ambiguous rescission notice following a mortgage refinance is a valid affirmative defense against residential mortgage foreclosure. We agree with the reasoning of the U.S. court of appeals for the third circuit in Porter v. Mid-Penn Consumer Discount Co., 961 F.2d 1066 (3d Cir. 1992).

I. STATEMENT OF THE CASE

On January 12, 2008, Deutsche Bank, trustee for Ameriquest, filed this mortgage foreclosure action against Michael Gardner. This case was in limbo for five years until the federal class action settled.

A bench trial took place on April 14, 2014. Gardner represented himselfpro se. Findings of fact and conclusions of law were entered on April 28, 2014. Among the points: 1) Deutsche Bank had standing as an Ameriquest trustee to bring this mortgage foreclosure action, though Deutsche Bank did not record its assigned interest in Gardner’s mortgage until after its complaint was filed; 2) Ameriquest did not comply with the TILA requirements, and therefore, Gardner’s affirmative defense was valid and prevented foreclosure; 3) Gardner was entitled to rescind his refinance loan, but only up to the $45,400 which was added during the refinance, and so was not permitted to rescind the original $140,000 loan; and 4) Gardner’s home remains mortgaged to Deutsche Bank under terms of the first mortgage in the amount of $140,000.

We incorporate our findings and conclusions following trial. Deutsche Bank filed post-trial motions on May 8, 2014. These were denied on September 3,2014, but denial was vacated, and a new order was entered on September 5, 2014, which stated in pertinent part:

On additional review, plaintiff’s post-trial motions are denied without prejudice to any in personam cause of action by plaintiff Deutsche Bank National Trust Co. to recover $45,000 plus interest paid to defendant dated January 21, 2005. Time relating to potential cause of action shall accrue only after final judgment in this case.

Deutsche Bank noticed this appeal on September 24, 2014, and has filed a timely Rule 1925(b) Statement.

II. ISSUES ON APPEAL

Deutsche Bank raises the following issues: (1) the court erred by concluding that Ameriquest provided inadequate rescission notice under the TILA; (2) the court erred by concluding that Gardner had timely rescinded the refinance loan; (3) the court erred by failing to provide a means for Deutsche Bank to recover the rescinded amount and misapplied equity; (4) the court erred by denying mortgage foreclosure; (5) the court erred by admitting an authenticated H-8 Form into evidence; and (6) the court erred by permitting Gardner to participate in oral argument as pro se counsel.

A. Deutsche Bank Did Not Provide Appropriate Disclosure Forms Under The Truth In Lending Act.

First, we found that Deutsche Bank, through its predecessor, Ameriquest, violated TILA notice requirements by giving Gardner an H-8 Form when an H-9 Form was required. Deutsche Bank argues that an H-8 Form provides sufficient notice, even though the H-9 Form was specifically drafted and designated for use in mortgage refinance agreements.

As a general matter, the TILA at 15 U.S.C.A. § 1601(a) protects consumers from unscrupulous lenders who use fraudulent or confusing practices to take advantage of borrowers. With some exceptions, creditors must make disclosures, including: (1) the identity of the creditor; (2) the amount financed; (3) the finance charge; (4) the annual percentage rate; (5) the sum of the amount financed and the finance charge; (6) the number, amount, and due dates or period of payments scheduled; (7) the total sale price; and (8) explanations and definitions of these terms. 15 U.S.C. § 1638; 12 C.F.R. § 226.18.

In addition, the TILA provides a “cooling off’ period to give borrowers a chance to rescind a loan transaction within three days of closing. The statute provides that lenders must “clearly and conspicuously” disclose the borrower’s rescission rights by providing the correct disclosure rescission forms promulgated by the Federal Reserve Board. 15 U.S.C.A. § 1635. These regulations require lenders to deliver two copies of the model forms found at 12 C.F.R. § 226.1. These include notice concerning: (1) retention or acquisition of a security interest in the borrower’s principal dwelling; (2) a borrower’s right to rescind the transaction; (3) procedures that borrowers must follow to exercise their right to rescind, including use of a special pre-printed form that designates the address of the lender’s place of business; (4) the effects of rescission; and (5) the date the rescission period expires. 12 C.F.R. § 226.23(b).

When the lender gives the borrower proper rescission notice, the borrower only has three days to rescind the loan. If notice is inadequate, then the borrower has three years to rescind. 15 U.S.C. §1635(f); 12 C.F.R. § 226.23(a)(3).

Two different forms contain rescission rights for mortgages — the H-8 and H-9 Forms. The H-8 Form lays out a borrower’s rescission rights for a new mortgage. The H-9 Form lays out a borrower’s rescission rights for a mortgage refinance loan where the same lender is involved. The model H-8 Form, concisely cited at 12 C.F.R. § 226.23, App. H, states in relevant part:

H-8-Rescission Model Form (General)
NOTICE OF RIGHT TO CANCEL
Your Right to Cancel
You are entering into a transaction that will result in a [mortgage/lien/security interest] [on/in] your home. You have a legal right under federal law to cancel this transaction, without cost, within three business days from whichever of the following events occurs last:
(1) the date of the transaction, which is_; or
(2) the date you received your Truth in Lending disclosures; or
(3) the date you received this notice of your right to cancel.
If you cancel the transaction, the [mortgage/lien/ security interest] is also cancelled. Within 20 calendar days after we receive your notice, we must take the steps necessary to reflect the fact that the [mortgage/lien/ security interest] [on/in] your home has been cancelled, and we must return to you any money or property you have given to us or to anyone else in connection with this transaction.
You may keep any money or property we have given you until we have done the things mentioned above, but you must then offer to return the money or property. If it is impractical or unfair for you to return the property, you must offer its reasonable value. You may offer to return the property at your home or at the location of the property. Money must be returned to the address below. If we do not take possession of the money or property within 20 calendar days of your offer, you may keep it without further obligation.

In comparison, the model H-9 Form, concisely cited at 12 C.F.R. § 226.23, App. H, states in relevant part:

H-9 — Rescission Model Form (Refinancing with Original Creditor)
NOTICE OF RIGHT TO CANCEL
Your Right To Cancel
You are entering into a new transaction to increase the amount of credit previously provided to you. Your home is the security for this new transaction. You have a legal right under federal law to cancel this new transaction, without cost, within three business days from whichever of the following events occurs last:
(1) the date of this new transaction, which is_; or
(2) the date you received your new Truth in Lending disclosures; or
(3) the date you received this notice of your right to cancel.
If you cancel this new transaction, it will not affect any amount that you presently owe. Your home is the security for that amount. Within 20 calendar days after we receive your notice of cancellation of this new transaction, we must take the steps necessary to reflect the fact that your home does not secure the increase of credit. We must also return any money you have given to us or anyone else in connection with this new transaction.
You may keep any money we have given you in this new transaction until we have done the things mentioned above, but you must then offer to return the money at the address below.
If we do not take possession of the money within 20 calendar days of your offer, you may keep it without further obligation.

(Emphasis added).

The material difference between these forms is the addition of the term “new transaction” in the H-9 Form. Critically, the H-9 Form assures the borrower that if the “new transaction” is cancelled, “[the new transaction] will not affect any amount that you presently owe... as your home is the security for that amount.”

No Pennsylvania cases have decided whether absence of this language in the H-8 Form gives rise to an affirmative defense based on inadequate rescission notice, so we turn to federal law in our jurisdiction. Within the third circuit, the inquiry is whether a TILA rescission notice is subject to more than one clear reading. If it is, the notice is inadequate, and the time to rescind is extended to three years. Porter v. Mid-Penn Consumer Discount Co., 961 F.2d 1066, 1077 (3d Cir. 1992); see also Bowmer v. Novastar Mortgage Funding Trust, Series 2006-1, 711 F.Supp.2d 390, 401 (E.D. Pa. 2010) (extending rescission period to three years where finance disclosures were unclear). “Under both TILA itself and Regulation Z, the test is whether the form of notice...constitutes a clear notice of the Debtor’s right to rescind the loan.” In re Cruz, 441 B.R. 23, 29 (Bankr. E.D. Pa. 2004). The key is to assure refinance borrowers that their first mortgage in not threatened by rescission of their second mortgage. The H-9 Form accomplishes this clearly; the H-8 Form that Gardner received does not. Id. at 30 (finding a hybrid H-8 and H-9 disclosure form was inadequate because it failed to clearly state that rescission of a mortgage refinance did not affect the entire loan).

Analogous Pennsylvania statutory policies in the mortgage foreclosure area enforce similar protections for residential mortgage borrowers. For example, the Loan Interest and Protection Law, Act 6 of 1974, 41 P.S.§101, et seq., grants homeowners the right to cure mortgage defects prior to foreclosure. Under 41 P.S. § 403, lenders must provide specific disclosures that explain borrower rights if there are procedural defects in pre-foreclosure notice. Improper notice under Act 6 may be fatal to a mortgage foreclosure claim. See Wells Fargo Bank N.A. v. Spivak, 104 A.3d 7, 16 (Pa. Super. 2014), reargument denied (Jan. 8,2015) (internal citations omitted) (“Act 6’s notice requirements are consistent with its comprehensive statutory scheme...designed to avoid foreclosures and its broader purpose to offer homeowners with residential mortgages a measure of protection from overly zealous residential mortgage lenders”); see also In re Smith, 866 F.2d 576, 578 (3d. Cir. 1989) (applying Pennsylvania law to hold that lender did not carry out required disclosures under Act 6).

Another example is Act 91 of 1983,35 P.S. § 1680.401, et seq., which created the Homeowner’s Emergency Mortgage Assistance Program. Act 91 requires lenders to use a special model disclosure form. 35 P.S. § 1680.403c(b) (1). A lender’s tender of a complete disclosure form under Act 91 is an important procedural step to enforce a mortgage foreclosure, and non-compliance may give rise to an affirmative defense, though failure to do so is not a jurisdictional bar. See Beneficial Consumer Discount Co. v. Vulanan, 77 A.3d 547, 550 (Pa. 2013).

Similar policy interests to protect unwary borrowers apply in this case. The H-9 Form clearly tells mortgage refinance borrowers that their existing first mortgage is unaffected by timely rescission of a second mortgage. The H-8 Form used by Ameriquest does not.

B. Defendant Michael Gardner’s Rescission Request Was Timely Under The TILA.

When a lender fails to make all material disclosures, the TILA extends time for rescission to three years. Under 15 U.S.C.A. § 1635(a), borrowers have no more than three days to rescind, assuming all disclosures are correct. When these disclosures are inadequate, the time is extended to three years. 15 U.S.C.A. § 1635(f)(i)(l)(B).

Gardner and Ameriquest entered into their refinance agreement in January 2005. Gardner filed his rescission application in October 2007 within the three year period.

C. Equitable Relief Is Appropriate And Reasonably Applied.

Having found that Gardner has the right to rescind, this court employed equitable remedies authorized by Pennsylvania law and the TILA to get the parties to the status quo ante as closely as possible under the first mortgage.

Court may employ equitable remedies in mortgage foreclosure actions. See Green Tree Consumer Disc. Co. v. Newton, 909 A.2d 811, 816 (Pa. Super. 2006) (courts have equity powers in foreclosure actions); see also, e.g., Goodwin v. Rodriguez, 554 A.2d 6,8 (Pa. 1989) (discussing the historical development of equitable remedies in mortgage foreclosure). Moreover, violation of federal consumer lending procedures are subject to state remedies in equity. Union Nat. Bank of Little Rock v. Cobbs, 567 A.2d 719, 723 (Pa. Super. Ct. 1989) (consumer permitted to raise bank’s non-compliance with the Veteran’s Affairs Lenders Handbook as an equitable defense to bank’s mortgage foreclosure claim); Fleet Real Estate Funding Corp. v. Smith, 530 A.2d 919, 923 (Pa. Super. Ct. 1987) (consumers may raise an equitable defense to foreclosure action based on non-compliance with HUD guidelines).

Equitable remedies are similarly authorized under TILA regulations. The Federal Reserve Board’s Official Staff Interpretation of Regulation Z affirms that courts may modify rescission procedures to suit the equities of a given case without affecting the substantive rights of the borrower or the equitable powers of the court. See 12 C.F.R. § 226, Supp. I, Subpt. C. Further, when the right to rescind is disputed, Regulation Z directs courts to decide whether the right to rescind exists. Courts may then use equitable remedies to enforce obligations if the right ro rescind is affirmed. Id.

At post-trial motions, error was claimed on grounds we left open the question of Gardner’s repayment of his $45,400 refinance loan from Ameriquest. On September 5, 2014, this was corrected when we entered a post-trial order stating in part:

On additional review, plaintiff’s post-trial motions are denied without prejudice to any in personam cause of action by plaintiff Deutsche Bank National Trust Co. to recover [$45,400] plus interest paid to defendant dated January 21,2005. Time relating to statute of limitations for such potential cause of action shall accrue only after final judgment in this case.

Deutsche Bank now claims this is insufficient because Gardner’s repayment is not secured by an in rem lien. Because this refinance loan is not part of the first mortgage as explained by the H-9 Form itself, we enforced the first mortgage as close to its original terms as possible. And we granted Deutsche Bank extended time to file suit against Gardner personally for the now unsecured $45,400 loan. Federal courts in our jurisdiction have entered similar equity orders to remedy TILA violations, even relieving in one case a borrower’s obligation to repay altogether. In re Melvin, 75 B.R. 952, 960 (Bankr. E.D. Pa. 1987) (court granted rescission of mortgage transaction, removed lender’s security interest, and reduced lender to an unsecured claim in amount of mortgage loan); see also Gill v. Mid-Penn Consumer Disc. Co., 671 F. Supp. 1021, 1026 (E.D. Pa. 1987), aff’d sub nom. Dixon Gill v. Mid-Penn Consumer Disc. Co., 853 F.2d 917 (3d Cir. 1988) (holding that a creditor’s failure to comply with a valid rescission obviated the consumer’s obligation to repay any outstanding balance on the loan).

Reasonable equitable remedies were applied to restore a loan relationship without a homeowner’s losing his house after a lender’s violation of refinance rescission notice.

D. Defendant Successfully Asserted The Affirmative Defense Of Rescission.

Deutsche Bank claims mortgage foreclosure should have been granted because it proved its prima facie case. Gardner successfully raised rescission based on improper TILA disclosures. This is an affirmative defense which was raised in new matter, and so mere prima facie proof was not enough to for Deutsche Bank to prevail.

E. The Content Of The H-8 Disclosure Form Was Admissible.

Deutsche Bank claims error by the admission of an unsigned copy of an H-8 Form. This form contains the same rescission language given to Gardner by Deutsche Bank’s predecessor, Ameriquest.

Deutsche Bank argues the form should have been precluded for lack of authenticity under Pa. R. Evid. 901(a). This rule is inapplicable, though, because the H-8 Form actually admitted was a reliable copy of a genuine loan document draft that includes identifying information such as the applicable loan number, the name and contact number of the lender, Gardner’s own name and address, the refinance date, and the Philadelphia address of the refinanced mortgage property.

Deutsche Bank’s issue is more appropriately analyzed under the best evidence rule. Pa. R. Evid. 1001 and 1002. The admission of the contents of a document is permitted only when the document itself is an “original.” Com. v. Lewis, 623 A.2d 355, 357-58 (Pa. 1993). Here, Deutsche Bank is claiming the unsigned H-8 Form cannot be an original because it is unsigned. The flaw is that the H-8 Form, though unsigned, is itself an original. It is an original of exactly what Gardner said it was at trial — an unsigned draft H-8 Form prepared by Ameriquest for Gardner’s January 2005 closing.

If relevant, the content of this unsigned H-8 Form is admissible. We found it was relevant because it was probative to the issues at trial and no evidence was presented that the unsigned draft H-8 Form differed in any material respect from the unavailable signed version.

F. The Court Properly Conducted Oral Argument At Trial.

Deutsche Bank claims we erred by allowing Gardner to make factual allegations without being sworn in as a witness. More specifically, the complaint is that Gardner’s answers to court questions during closing argument were testimonial.

While a civil litigant also has the right to represent himself pro se under 42 Pa. C.S.A. § 2501, his credibility is determined by traditional fact-finding criteria. This is because bench and jury trials are governed by the same rules. Pa. R.C.P. 1038(a).

We were mindful of the line between admissible evidence and argument. The record reflects this during closing argument and preceding phases of the trial.

III. CONCLUSION

Judgment should, respectfully, be affirmed for all the reasons explained here.

      . 15 U.S.C. §1601 et seq.

      . This order contained a typo, erroneously listing the rescinded amount as $45,000 instead of $45,400

      . Title 12, Chapter II, Subchapter A, Part 226 (Reg. Z-Truth in Lending), Subpart C § 226.18

      . Title 12, Chapter II, Subchapter A, Part 226(Reg. Z-Truth in Lending), Appendix H §226.23

      . Title 12, Chapter II, Part 226 (Reg. Z-Truth in Lending), Subpart C, § 223(b)(1)

      . Title 12, Chapter II, Part 226 (Reg. Z-Truth in Lending), Subpart C, § 223(a)(3)

      . H-8 is found at Title 12, Chapter II, Part 226 (Reg. Z- Truth in Lending), Appendix H § 226.23 (Rescission Model Form, Generally)
      H-9 is found at Title 12, Chapter II, Part 226 (Reg. Z-Truth in Lending), Appendix H §226.23 (Rescission Model Form, Refinancing with Original Creditor).


source: Caselaw Access Project

author: LOVECCHIO, J.,

license: Public Domain

text:
    Commonwealth v. Girardi

      C.P. of Lycoming County,
    No. CR-1977-2014

      Melissa Kalaus, for Commonwealth.

      Don Martino, for defendant.
    April 1, 2015
   LOVECCHIO, J.,

By information filed December 12, 2014, defendant is charged with numerous counts arising out of his alleged sexual assaults on a minor female. At the time of the alleged sexual assaults, the child C.R. was approximately seven (7) years old. As part of an omnibus pretrial motion filed on January 5, 2015, defendant contends that C.R. is not competent to testify.

A hearing on defendant’s competency motion was held before the court on March 23, 2015.

In general, a witness is presumed competent to testify and the burden falls on the objecting party to prove the witness is not competent. Pa. R. E. 601 (a); Commonwealth v. Harvey, 812 A.2d 1190, 1199 (Pa. 2002). When the witness is a child, the presumption still applies that the court must conduct an inquiry to determine whether the child has the ability: (1) to perceive the occurrence with a substantial degree of accuracy; (2) to remember the event being considered; (3) to understand and communicate intelligent answers about the occurrence; and (4) to be mindful of the need for truthfulness. Commonwealth v. Anderson, 552 A.2d 1064, 1067-68 (Pa. Super. 1998).

Prior to a child witness testifying, he or she must be examined for competency. Commonwealth v. Delbridge, 855 A.2d 27, 39 (Pa. 2003). “A competency hearing of a minor witness is directed to the mental capacity of that witness to perceive the nature of the events about which he or she is called to testify, to understand questions about that subject matter, to communicate about the subject at issue, to recall information, to distinguish fact from fantasy and to tell the truth.” Commonwealth v. Hutchinson, 25 A.3d 277, 290 (Pa. 2011), quoting Delbridge, 855 A.2d at 45.

The capacity of young children to testify has always been a concern as their immaturity can impact their ability to meet the minimal legal requirements of competency. Common experience informs us that children are, by their very essence, fanciful creatures who have difficulty distinguishing fantasies from realities; who when asked a question want to give the ‘right’ answer, the answer that pleases the interrogator; who are subject to repeat ideas placed in their heads by others; and who have limited capacity for accurate memories.

Delbridge, 855 A.2d at 39-40.

As well, the testimony of children may be impacted by the issue of taint. The Pennsylvania Supreme Court recognized the susceptibility of children to suggestion and fantasy and held that a child witness can be rendered incompetent to testify where unduly suggestive or coercive interview techniques corrupt or taint the child’s memory and ability to testify truthfully about that memory. Id. at 35; see also Commonwealth v. Judd, 897 A.2d 1224, 1228-1230, (Pa. Super. 2006), appeal denied, 912 A.2d 1291 (Pa. 2006).

As this court noted in Commonwealth v. Whitney, 94 — 2010 (Lycoming County, November 17, 2010): “A child’s testimony can be tainted regardless of whether or not a conscious effort is being made to achieve this. The developing mind of a child is vulnerable to taint. Taint could include suggestive or leading questions; pressure to answer in a way most desirable to parents/caregivers, adult and authority figures; and information absorbed from simply being the center of questions and speculation from an individual in the child’s environment.”

In reviewing a claim of taint, the court is directed to consider different factors including the age of the child, whether the child has been subject to repeated interviews by adults in positions of authority, and the existence of independent evidence regarding the interview techniques utilized. Commonwealth v. Moore, 980 A.2d 647, 652 (Pa. Super. 2009).

Determining a child’s competency to testify in a sexual assault case is of critical importance not only to the parties but to the judicial system as a whole. The court cannot and will not ignore its obligation with respect to such. It is incumbent on the court to thoroughly and comprehensively test the intelligence and capacity of a young child who comes before it in these types of cases, to accurately relate a series of events. The child must understand and have the intelligence to understand his or her obligation to speak the truth. The child must have the mental capacity at the time of the occurrence in question to observe and register the occurrence. The child must have a memory sufficient to retain an independent recollection of the observations made. The child must have the ability to translate into words the memory of those observations, and finally the child must have the ability to understand and respond to simple questions of the occurrence. Shanks, Evaluating Children Competency to Testify: Developing a Rational Method to Assess a Young Child’s Capacity to Offer Reliable Testimony in Cases Alleging Child Sex Abuse, 58 CLEV. ST. L. REV. 575, 583 (2010).

“The salient questions are whether the child can observe and register what happened, whether she has memory sufficient to retain an independent recollection of the events, whether she has the ability to translate into words the memory of those observations, and whether she has the ability to understand and respond to simple questions about the occurrence.” Id. at 584 — 585.

Further, “the evaluation must be based on a realistic assessment of the child’s developmental maturity and her ability to provide reliable information about the events that are alleged in the criminal action.” Id. at 597.

With these principles in mind, the court took testimony from the child’s mother and the child during the competency hearing. The purpose in taking the testimony from the mother was to gather information about the child to utilize during the interview of the child. This information provided the court with a background to determine the child’s personal, academic and social development.

The court then conducted a searching inquiry into the relevant factors regarding the child’s competency. The court concludes, after evaluating and considering all of the factors, that the child is competent to testify and that her recollection of the events at issue has not been tainted.

Beyond just knowing the difference between truth and lies, the child demonstrated an understanding of the meaning of the truth and lies and, equally as important, how the telling of a lie could not only impact her negatively, but also others. She related experiences from the past and/or experiences relating to events which she was taught were true and distinguished between what was true and not true. The court utilized different scenarios including but not limited to, what might happen if she told a lie about the court and on the other end of the spectrum, where Goldilocks might have slept. She was clearly able to comprehend the impact of her words not only on herself but on others.

There was no doubt that the child had the mental capacity to understand questions that were asked of her and to communicate about the subject at issue. Numerous questions were asked by the court regarding numerous different things, events or issues. The child demonstrated an ability to understand the question and then communicated a reasoned response. Indeed, she presented herself as quite intelligent for her age, very articulate and had what appeared to the court to be a proficient grasp of the English language. With respect to the events about which she was being called to testify, while there were some minor inconsistencies, the court attributes those to human nature and perhaps even perception issues. It did not at all appear to the court that the child was simply reciting a version of events that she was taught. While the court, both personally and professionally, recognizes that children can learn and actually relate detailed and/or complicated stories without those stories being necessarily true, the court’s charge in this case was not to determine the veracity of what she alleged.

A competency evaluation charges the court with determining whether the minor can distinguish fact from fantasy. It was evident to the court that the child had the cognitive abilities to organize the past events in her mind, to relate those events as they actually occurred to her, and to differentiate those facts from any type of fantasy. Indeed, the court “cross-examined” the child with respect to certain matters and the child responded with reasoned explanations.

One issue arose with respect to the child recalling an event in which she observed a theater production in town. She apparently went to the production with the assistant district attorney and perhaps another member of the district attorney’s staff. She indicated that she actually went with defendant’s attorney who had a bow in his head and perhaps was wearing a different colored bowtie. It was clear that this event never occurred. She was detailed in her explanation and certain that it occurred. The court does not interpret this, however, as expressing fantasy versus fact. The court interprets this as the child mistaking the identity of the person that she was with or saw. It was a Christmas event and there were individuals dressed in bowties and hair bows.

Under all of the circumstances, the court concludes that the child is competent to testify.

ORDER

And now, this 1 st day of April 2015, following a hearing, the court finds that the minor child C.R. is competent to testify against defendant in these matters.


text:
    Commonwealth v. Kiess

      C.P. of Lycoming County,
    No. CR-1790-2014

      Martin Wade, for Commonwealth.

      Richard Roberts, for defendant.
    April 1, 2015
   LOVECCHIO, J.,

Defendant is charged by information filed on November 21,2014 with operating a watercraft under the influence of alcohol, endangering the welfare of children, and related counts.

On July 4,2014 at approximately 10:15 p.m., defendant is alleged to have been operating a motor boat on the West Branch of the Susquehanna River. It is alleged that he was under the influence of alcohol at the time, thus endangering the welfare of two minor children who also were occupants of the boat. Defendant’s BAG is alleged to have been .145%.

Defendant filed an extensive omnibus pretrial motion on January 15,2015. Defendant’s omnibus pretrial motion raises five separate issues. First, defendant contends that there was insufficient probable cause to arrest him. Second, defendant asserts that the HGN results cannot be utilized to establish probable cause. Third, defendant alleges that the portable breath test (PBT) results cannot be utilized to establish probable cause. Fourth and fifth, defendant contends that the Commonwealth cannot utilize either the HGN or PBT results at trial.

In an order dated February 9, 2015, following a conference, the court denied defendant’s second claim with respect to utilizing the HGN results with respect to the probable cause determination. Pursuant to Commonwealth v. Weaver, 76 A.3d 562 (Pa. Super. 2013), aff’d mem., 105 A.3d 656 (Pa. 2014), the court specifically rejected the assertion that law enforcement cannot rely upon the results of an HGN test when assessing probable cause to an arrest.

Defendant’s fourth and fifth claims regarding the admissibility of the HGN and PBT results were also disposed of in the February 9, 2015 order. Defendant’s claims were conceded by the Commonwealth. The Commonwealth will not reference or utilize the HGN or PBT results at trial.

A hearing and argument on defendant’s remaining two claims, consideration of the PBT results for probable cause and the existence of probable cause, was held before the court on March 18, 2015.

Water Conversation Officer (WCO) Anthony Beers of the Pennsylvania Fish and Boat Commission testified on behalf of the Commonwealth. On July 4, 2014, he and WCO Kyler were patrolling the West Branch of the Susquehanna River near the Hiawatha boat dock.

At approximately 10:15 p.m., they were located in the middle of the channel observing boating traffic. It was the Fourth of July. The local fireworks were ending, the boating traffic was abnormally high, there was a high volume of boats, many boats were traveling upstream from the fireworks toward river lots, and the water conditions were choppy with varying size and number of wakes.

WCO Beers observed a small white vessel traveling upstream without the required 360 degree visibility stem light. He approached the boat to further investigate and noticed that there was a “weak stem light.” A flashlight had been fashioned on a pole at the back of the boat. The light contraption, however, did not meet the 360 degree visibility requirement. Accordingly, he initiated a stop of the boat.

WCO Beers identified defendant as the operator. WCO Beers came in close proximity to defendant. WCO Beers noticed the strong odor of an alcoholic beverage coming from defendant. Defendant’s eyes were also red, glassy and bloodshot. Near the stem of the boat, he observed what appeared to be more than one empty aluminum beer can. As well, defendant indicated that he last drank “an hour before.”

Because the water conditions were worsening (very choppy, a lot of wakes, inconsistent wakes, fairly turbulent) and because of the instability of boats in general on the water as well as the presence of passengers on defendant’s boat, WCO Beers decided only to administer an HGN standard field sobriety test.

WCO Beers has extensive training and experience in DUI investigations and the administering of standard field sobriety tests including but not limited to HGN’s and PBT’s. Based upon this extensive training and experience, he is of the opinion that HGN tests are the “most reliable.”

WCO Beers brought defendant aboard his boat to administer the HGN. WCO Beers described the procedure in detail and how the test was administered to defendant. Pre-test questions were asked and answered, general instructions were provided to defendant and the test was administered while both WCO Beers and defendant were seated. According to the results, there were six clues, three on each eye including a lack of smooth pursuit, distinct and sustained nystagmus at the maximum deviation, and the onset of nystagmus prior to 45 degrees.

On cross-examination, WCO Beers agreed that the conditions for administering the HGN were not ideal in light of the water conditions but maintained that the results were nonetheless indicative of impairment.

WCO Beers opined, following the HGN test, that defendant was operating the boat under the influence of alcohol to the extent defendant was incapable of safe operation. He decided then to administer the PBT.

The PBT device was an Aleo-sensor III. This device is an approved pre-arrest breath-testing device as required under 28 Pa. Code §§5.101-5.104 (relating to equipment to determine blood alcohol content under, among others, the Fish and Boat Code). 44 Pa. Bull. 100 (January 4, 2014). The PBT result, .145, verified alcohol consumption. On cross-examination, WCO Beers testified that the PBT device was last calibrated in the spring of 2014. He also testified that the traceability time period as recommended was 20 minutes from the last drink. He testified that he complied with such because defendant indicated that he last drank over an hour ago. He further testified that he utilized the PBT results to determine the presence of alcohol, not necessarily the amount, and he maintained that for these purposes it was quite accurate.

Following the PBT and based upon all of the other observations as testified to by WCO Beers including the HGN results, he placed defendant under arrest for suspicion of DUI.

Defendant argues that, considering all of the circumstances, there was insufficient probable cause to arrest him. He contends that none of the factors relied upon by WCO Beers were reasonably trustworthy. He asserts that there was no evidence of poor operation of the boat or “bad boating”; no evidence of him stumbling, swaying or being unable to walk normally; and no evidence of him slurring his speech or not responding properly to questions. Defendant argues as well that WCO Beers failed to inquire into innocent explanations with respect to his allegedly bloodshot or glassy eyes. Defendant argues that WCO Beers failed to determine how much defendant drank or exactly how long ago. WCO Beers also failed to determine the exact number of empty cans or how much beer, if any, was in each can.

With respect to the HGN, defendant argues that it was not reasonably trustworthy because of the water conditions and the circumstances under which it was administered. With respect to the PBT, defendant argues that it was not reasonably trustworthy, because it was not recently calibrated.

The Commonwealth contends, on the contrary, that the facts as presented were entirely sufficient to establish probable cause. Moreover, the Commonwealth asserts that defendant argues for a probable cause standard far more rigorous than established by law. The Commonwealth contends that the probable cause standards are not one of exactitude or that of ruling out all possible explanations. The Commonwealth further alleges that even innocent facts may justify probable cause.

The court will first address defendant’s argument that the PBT results cannot be utilized in the determination of probable cause.

The evidence in support of probable cause need not be admissible at trial. Weaver, 76 A.3d at 567. Moreover, both statutory and case law support the utilization of PBT results in determining probable cause. 75 Pa. C.S.A § 1547 (k); Commonwealth v. Semuta, 902 A.2d 1254, 1260 (Pa. Super. 2006). The only condition of such is that the officer must use a device approved by the department. 75 Pa.C.S.A §1547(k). Defendant has not provided any legal authority which supports his position that in order to be considered for probable cause, the PBT needs to be calibrated. Accordingly, defendant’s claim with respect to this issue shall be denied.

The court will now turn to defendant’s probable cause argument. The court agrees with the Commonwealth’s assertion that defendant misapprehends the probable cause standard. The measure of probable cause is neither one of exactitude nor one where all other possibilities need to be ruled out.

Probable cause exists if the facts and circumstances within the knowledge of the police officer at the time of the arrest are sufficient to justify a person of reasonable caution in believing the suspect has committed or is committing a crime. Commonwealth v. Goldsborough, 31 A.3d 299, 306 (Pa. Super. 2001). The court must view the totality of the circumstances as seen through the eyes of a trained officer, and not as an ordinary citizen would view them. Commonwealth v. Nobalez, 805 A.2d 598, 600 (Pa. Super. 2002). It is only the probability of criminal activity that is the standard of probable cause. Commonwealth v. Thompson, 604 Pa. 198, 985 A.2d 928, 931 (2009). Probable cause exists when criminality is one reasonable inference; it need not be the only inference. Commonwealth v. Smith, 979 A.2d 913, 919 (Pa. Super. 2009), quoting Commonwealth v. El, 933 A.2d 657, 661 (Pa. Super. 2007). It is the facts and circumstances within the personal knowledge of the police officer that frame the determination of the existence of probable cause. Commonwealth v. Lawson, 454 Pa. 23, 27, 309 A.2d 391, 394 (1973); Commonwealth v. Galendez, 27 A.3d 1042, 1046 (Pa. Super. 2011 )(en banc). Finally, and as noted previously, the HGN and PBT results are admissible to support probable cause. 75 Pa.C.S.A. §1547(k)(PBT); Weaver, supra (HGN).

WCO Beers had extensive training and experience in investigating and determining whether individuals operating boats were doing so under the influence of alcohol. He had extensive training as well in administering both HGN and PBT tests in “wet labs” (controlled settings), as well as in the field. Based upon his training and experience, and in spite of whatever limitations may have been present in connection with the HGN and PBT testing procedures in this case, he was of the opinion that they could be relied upon in establishing probable cause.

At the time WCO Beers placed defendant under arrest for suspicion of DUI, he knew the following: defendant was operating a watercraft with at least two minors in a high traffic area with questionable water conditions without the required stem light; defendant had red, bloodshot and glassy eyes; there was an odor of an alcoholic beverage coming from the defendant; defendant admitted that he had drank alcohol one hour previously; there were “more than one” empty beer cans in the boat; there were six clues on the horizontal gaze nystagmus (HGN) test, which in WCO Beers’ training and experience indicated an 80% or better probability that defendant’s BAC was above .08; and the PBT test result of .145 confirmed the presence of an alcoholic beverage.

Clearly, the totality of these factors constituted sufficient probable cause to arrest the defendant for boating under the influence.

ORDER

And now, this day of April 2015 following a hearing and argument, the court grants in part and denies in part defendant’s omnibus pretrial motion. The Commonwealth is precluded from utilizing the HGN and PBT results as evidence during the trial in this matter. Defendant’s motions to preclude the court from considering the HGN and PBT results in connection with the probable cause determination are denied. Finally, the defendant’s motion to suppress based upon WCO Beers allegedly not having sufficient probable cause to arrest the defendant is denied.


author: ANDERSON, J.,

text:
    Quality Carriers Inc. v. ECM Energy Services Inc.

      C.P. of Lycoming County,
    No. 14-02,241
    March 30, 2015
   ANDERSON, J.,

Before the court are cross motions for summary judgment, filed on January 20, 2015, by plaintiffs and on February 12, 2015, by defendants. Argument on the motions was heard March 23,2015.

The underlying action is a complaint in declaratory judgment whereby plaintiffs (hereinafter “QC”) seek a declaration that defendants (hereinafter “ECM”) have a duty to defend and an obligation to indemnify QC in a lawsuit brought against QC by one Richard Shearer and his wife. In the instant motions, the parties agree that there are no disputes of fact, only the legal issue of contract interpretation, and ask this court to declare whether or not ECM has that duty and obligation.

In its capacity as a broker, QC entered an agreement with ECM in its capacity as a motor carrier, whereby ECM provides transportation services for customers of QC. Richard Shearer, a track driver, is an employee of ECM and has brought an action against QC, alleging that the negligence of a QC employee led him to be injured while he was working for ECM. The parties agree this work was pursuant to the agreement between ECM and QC. QC now seeks indemnity under Section 8 of the above-mentioned agreement, which provides as follows:

Carrier shall defend, indemnify, and hold Broker harmless from and against all loss, liability, damage, claims, fines, costs or expenses, including attorney’s fees, arising out of or in any way related to (i) the performance of services pursuant to this agreement and (ii) the performance or breach of this agreement by Carrier, its employees, or independent contractors working for Carrier (collectively, the “claims”), including, without limitation, claims for or related to, personal injury (including death), property damage, and Carrier’s possession, use, maintenance, custody or operation of the equipment. Carrier’s liability under this Section 8 shall not be limited in any way by the insurance coverage required under Section 9, below.

See plaintiff’s complaint at paragraph 9. ECM objects that Section 481(b) of the Workmen’s Compensation Act provides immunity from QC’s claim. Section 481(b) provides as follows:

§ 481. Exclusiveness of remedy; actions by and against third party; contract indemnifying third party
(b) In the event injury or death to an employe is caused by a third party, then such employe, his legal representative, husband or wife, parents, dependents, next of kin, and anyone otherwise entitled to receive damages by reason thereof, may bring their action at law against such third party, but the employer, his insurance carrier, their servants and agents, employees, representatives acting on their behalf or at their request shall not be liable to a third party for damages, contribution, or indemnity in any action at law, or otherwise, unless liability for such damages, contributions or indemnity shall be expressly provided for in a written contract entered into by the party alleged to be liable prior to the date of the occurrence which gave rise to the action.

77 P.S. Section 481(b)(emphasis added). Based on this language, the court in Bester v. Essex Crane Rental Company, 619 A.2d 304, 308 (Pa. Super. 1993), held that an indemnification clause must “contain plain language which would avoid the employer’s protection from double responsibility which is afforded by the Workmen’s Compensation Act” and that “in order for an employer to be held liable in indemnification for injuries to its own employees caused by the negligence of the indemnitee there must be an express provision for this contingency in the indemnification clause.” The court went on to specify that “[i]n order to avoid the ambiguities which grow out of the use of general language, contracting parties must specifically use language which demonstrates that a named employer agrees to indemnify a named third party from liability for acts of that third party’s own negligence which result in harm to the employees of the named employer. Absent this level of specificity in the language employed in the contract of indemnification, the Workmen’s Compensation Act precludes any liability on the part of the employer.” Id. at 309 (emphasis added). The court found that the following language was not sufficiently specific:

The Lessee [Russell] shall defend, indemnify and hold forever harmless Lessor [Essex] against all loss, negligence, damage, expense, penalty, legal fees and costs, arising from any action on account of personal injury or damage to property occasioned by the operation, maintenance, handling, storage, erection, dismantling or transportation of any Equipment while in your possession. Lessor shall not be liable in any event for any loss, delay or damage of any kind of character resulting from defects in or inefficiency of the Equipment hereby leased or accidental breakage thereof....

Id. at 306.

Bester was cited with approval in Bethlehem Steel Corp. v. MATX, Inc., 703 A.2d 39 (Pa. Super. 1997). There, the following language was held to be sufficient “to overcome the bar of the Workmen’s Compensation Act”:

The Company [Bethlehem Steel] assumes no obligation to furnish to the Contractor [MATX] any tools, equipment or materials for the performance of the Work except as may be expressly provided herein. If the Contractor or its subcontractors or the employees, representatives, agents or invitees of any of them shall make use of any other tools, equipment or materials, with or without the consent of the Company, such tools, equipment or materials shall be accepted in “as is” condition, without any warranty whatsoever, express or implied, and the Contractor shall indemnify and save harmless each of the Bethlehem Companies from and against all loss or liability in respect of any damage, destruction, injury or death arising from the use of such tools, equipment or materials as well as in respect of any failure of the same to be suitable for the intended purpose.
The Contractor shall indemnify and save harmless each of the Bethlehem Companies from and against all loss or liability for or on account of any injury (including death) or damages received or sustained by the Contractor or any of its subcontractors or any employee, agent or invitee of the Contractor or any of its subcontractors by reason of any act or omission, whether negligent or otherwise, on the part of any of the Bethlehem Companies or any employee, agent or invitee thereof or the condition of the Site or other property of any of the Bethlehem Companies or otherwise. The Contractor shall further indemnify and save harmless each of the Bethlehem Companies from and against all loss or liability for or on account of any injury (including death) or damages received or sustained by any person or persons by reason of any act or neglect on the part of the Contractor or any of its subcontractors or any employee, agent or invitee of the Contractor or any of its subcontractors, including any breach or alleged breach of any statutory duty which is to be performed by the Contractor hereunder but which is or may be the duty of any of the Bethlehem Companies under applicable provisions of law....

Id. at 41-42.

In the instant case, the language used in the indemnification clause does not expressly state that ECM agrees to be liable for injury to its own employees caused by the negligence of QC. QC nevertheless argues that such intent can be inferred, citing Village Beer & Beverage, Inc. v. Vernon D. Cox & Co., 475 A.2d 117, 121 (Pa. Super. 1984), which held that “the court will adopt an interpretation which under all the circumstances ascribes the most reasonable, probable, and natural conduct of the parties, bearing in mind the objects manifestly to be accomplished.” Village Beer did not involve an indemnification clause and the application of the Worker’s Compensation Act, however. As was held in Shumosky v. Lutheran Welfare Services of Northeastern PA, Inc., 784 A.2d 196, 203 (Pa. Super 2001), “permissible inferences from words of general import cannot establish an express assumption of potential liability. Hershey Foods Corp. v. General Electric Service Co., 422 Pa. Super. 143, 619 A.2d 285 (Pa. Super. 1992). ‘The intent to indemnify against claims by employees of the alleged indemnitor must clearly appear from the terms of the agreement. ’ Bethlehem Steel, supra. An asserted indemnification provision must be carefully scrutinized and strictly construed. Gerard [v. Penn Valley Constructors, Inc., 495 A.2d 210 (Pa. Super. 1985)].” Thus, the court may not infer intent to indemnify where it is not expressly stated. The agreement at issue here does not provide for the sought-after indemnification.

ORDER

And now, this day of March 2015, for the foregoing reasons, plaintiff’s motion for summary judgment is denied; defendant’s motion for summary judgment is granted. Declaratory judgment is hereby entered in favor of defendants and against plaintiffs.

      . The court wishes to note that the agreement itself provides that it shall be governed by and construed under the laws of the state of Delaware, and that exclusive venue for any action arising from or related to the agreement shall be Wilmington, Delaware and the state or federal courts located therein. See plaintiff’s motion for summary judgment, Exhibit C. Counsel have provided no explanation as to their apparent choice to waive this requirement.

      . According to the complaint in that case, the employee of QC directed a truck to back up into a certain spot and in doing so, caused the truck to hit Shearer, causing bodily injury.

      . Bester was an employee of Russell Construction, which leased a crane from Essex. The negligence of an Essex employee was alleged by Bester to have caused him injury while he was using the crane, working for Russell.

      . The court notes that QC’s argument, that intent to indemnify should be inferred because ECM “had complete control of the equipment, choice of employees, and performance” and “[t]he parties could not have contemplated that plaintiffs would be liable for ECM’s own chosen employee injuring another chosen ECM employee while performing as independent contractors under the agreement”, is misplaced. Shearer alleges that he was injured by a QC employee, not an ECM employee.