author: MOTTO, J.,

text:
    Isaac v. Jameson Memorial Hospital

      C.P. of Lawrence County,
    no. 11238 of 1999 C.A.

      Richard J. Schubert, for plaintiffs.

      James W. Kraus and Kathryn M. Kenyon, for defendant Jameson Memorial Hospital.

      James A. Woods, for defendant Bassaly.
    November 15, 2002
   MOTTO, J.,

Before being admitted to Jameson Memorial Hospital, Catherine Isaac executed a Sterilization Consent Form authorizing her doctor, Rifaat Bassaly, to tie her fallopian tubes. This procedure was to be done when the doctor delivered her child by caesarian section.

Mrs. Isaac reported to the hospital on November 21, 1997 and signed an “acknowledgement” for the childbirth delivery. At that time, Mrs. Isaac declined to sign an acknowledgment for the tubal ligation. Later, when Mrs. Isaac was in labor, she did sign an acknowledgment for the tubal ligation, but she later orally withdrew that consent by her communication to a hospital nurse. Nurse Fronius duly noted that oral withdrawal of consent in the nursing notes to Mrs. Isaac’s chart.

Soon thereafter, Dr. Bassaly delivered Mrs. Isaac’s child and tied her tubes. The hospital claims Mrs. Isaac had changed her mind yet again, but Mrs. Isaac maintains that she did not. Seemingly, Dr. Bassaly performed the tubal ligation without any knowledge of Mrs. Isaac’s withdrawal of consent. There were no problems in or complications arising from the childbirth.

According to Mrs. Isaac, she first realized that her tubes had been tied only after she had been discharged for some time.

Plaintiffs filed suit against both Dr. Bassaly and Jameson Hospital. Count I is by Mrs. Isaac against Dr. Bassaly; Count HI, also by Mrs. Isaac, is against Jameson Hospital. Counts II and IV are both for loss of consortium by Mr. Isaac and are respectively against Dr. Bassaly and Jameson Hospital.

Jameson Hospital filed a motion for summary judgment as to Count II. The motion for summary judgment was orally argued and both sides have submitted briefs.

Jameson’s brief argues that an action for lack of formal consent can only be successfully brought against a physician and cannot be properly brought against a hospital.

The most pertinent parts of Count II are in paragraph 18 and read as follows:

“(a) In that this defendant did not sufficiently supervise, train, and/or continually educate its agents, servants, staff, physicians, nurses, medical personnel and/or employees with regard to the appropriate procedures pertaining to documenting and/or communicating the informed consent of patients prior to medical treatment and/or surgical procedures[.]
“(b) Failing to provide agents, servants, staff, medical personnel, and/or employees to document and/or communicate [each of] the informed consent private medical treatments and/or surgical procedures [.]
“(c) Failing to adopt appropriate procedures for documenting and/or communicating the [lack of] informed consent of patients prior to medical treatments and/or surgical procedures; and/or,
“(d) Failing to properly and timely document patients consent and/or refusal to consent to a procedure and/or treatment prior to administering that treatment and/or performing that procedure; and/or,
“(e) Neglecting to properly alter, amend and/or remove plaintiff Catherine Isaac’s rescinded consent; and/or,
“(f) Disregarding, ignoring and/or not sufficiently acting upon the plaintiff’s desires; and/or,
“(g) Failing to properly and timely communicate the wishes, request and/or desires of plaintiffs regarding then-decision not to consent to the tubal ligation procedure, as recommended by defendant, Rifaat Bassaly M.D.; and/ or,
“(h) Concealing from plaintiff, Catherine Isaac, the fact that a tubal ligation was to be performed and/or had been performed; and/or,
“(i) Failing to exercise due care in the examination, supervision, treatment and/or general care of plaintiff, Catherine Isaac, with respect to preventing the tubal ligation by defendant, Rifaat Bassaly, M.D. when they knew she had not consented to that procedure; and/or,
“(j) Failing to fulfill the expectations of the plaintiff with respect to documenting and communicating the patients [lack of] informed consent prior to the performance of a surgical procedure, when plaintiffs relied upon this defendant’s medical trust, knowledge and skill.” Complaint, paragraph 18. (emphasis added)

These excerpts make it clear that Mrs. Isaac is not bringing an action against the hospital based solely on a lack of informed consent, but rather on the theory that a negligent handling of the withdrawal of her consent resulted in negligent treatment. What is alleged is a lack of due care by the hospital, and due care would, according to the plaintiffs, necessarily exercising reasonable care to prevent a surgical procedure from occurring in contravention of Mrs. Isaac’s wishes.

The action sounds in corporate negligence and for vicarious liability for professional negligence. For vicarious liability to lie, the plaintiffs would need to establish that Nurse Fronius was negligent in the performance of her professional duties resulting in harm to Mrs. Isaac. This would be so because a principal is liable to third parties for all negligent acts or malfeasances of the agent without knowledge of or authorization by the principal, as long as the act in question occurred within the scope of the agent’s employment. Travelers Casualty & Surety Co. v. Castegnaro, 565 Pa. 246, 772 A.2d 456 (2001). Relating to vicarious liability of a hospital due to the negligence of a nurse, see Vorhees v. Trustees, University of Pennsylvania, 33 Phila. 302 (1997); Phila. County Rpts. Lexis 16 (1997). Summary judgment was denied (in part) because a hospital could be held liable for the professional negligence of a nurse in Radbill v. Chambersburg Hospital, 46 D.&C.3d 431 (1986); Pa.D.&C. Lexis 269 (1986).

On the other hand, under corporate negligence liability would run directly from the hospital to the patient based upon the policies, action or inaction of the institution itself. Welsh v. Bulger, 548 Pa. 504, 513, 698 A.2d 581, 585 (1997).

When a hospital fails to ensure a patient’s safety and well-being, Pennsylvania courts will impose liability. Whittington v. Episcopal Hospital, 768 A.2d 1144 (Pa. Super. 2001). This desire to protect individuals has led to the adoption of the doctrine of corporate negligence if it did not fulfill any of the following duties:

“[1] a duty to select and retain only competent physicians;
“[2] a duty to oversee all persons who practice medicine within its walls as to patient care; and
“[3] a duty to formulate, adopt and enforce adequate rules and policies to ensure quality care for the patients.” Rauch v. Mike-Mayer, 783 A.2d 815, 827 (Pa. Super. 2001). For a prima facie case, the plaintiff would have to demonstrate here that:

(1) the hospital (including its staff) fell short of the standard of care;

(2) the hospital had actual or constructive notice of the acts or omissions which created the harm; and

(3) that such conduct was a substantial factor in bringing about the harm. Id. at 827.

With the knowledge of the withdrawal of consent being imparted to Nurse Fronius and that knowledge being constructively attributed to Jameson Hospital resulting in harm, all of the three factors have been represented. Indeed, the failure of a nurse to report information to a doctor can contribute to the liability of the hospital even where the doctor himself is not found to be liable. Vorhees v. Trustees, University of Pennsylvania, supra.

Consequently, both respondeat superior and corporate negligence are legal theories of recovery both viable at this point. At the very least, issues of fact exist as to the role of Jameson in responding to plaintiff’s change of mind relative to having a surgical procedure performed. Accordingly, defendant’s motion for summary judgment must be denied.

ORDER

And now, November 15,2002, in accordance with the opinion of even date herewith, it is ordered, adjudged and decreed that the motion of defendant Jameson Hospital for summary judgment is denied.


source: Caselaw Access Project

author: KUHN, P.J.,

license: Public Domain

text:
    Himmelreich v. Adams Abstract Associates

      C.P. of Adams County,
    no. 92-S-1145.

      Charles I. Himmelreich, for plaintiffs.

      Mark K. Emery and Helen L. Gemmill, for defendant.
    January 24, 2002
   KUHN, P.J.,

Plaintiffs, Mark and Lisa Himmelreich, initiated this action against defendants, Adams Abstract Associates and Penn Title Insurance Company in December 1992. There has been a tortured procedural history which is not particularly pertinent to the issues now before the court. Suffice it to say that plaintiffs filed their fourth amended complaint on December 20,1999. The complaint had been pared to five counts, specifically, negligence (Count I), fraud (Count II) and violation of the Unfair Trade Practices and Consumer Protection Law (Count III) against Adams, and breach of contract (Count IV) and bad faith (Count V) against Penn.

Adams filed a motion for summary judgment on February 28, 2001. Because no reply was filed to the motion, on March 28, 2001, Adams filed a motion to grant defendant Adams Abstract Associates’ motion for summary judgment as it is unopposed by plaintiffs. Within several days, plaintiffs filed answers to both motions. Both motions are now before this court for disposition.

LEGAL STANDARD

Our appellate courts have frequently set forth the standard for summary judgment as follows:

“Pennsylvania law provides that summary judgment may be granted only if those cases in which the record clearly shows that no genuine issues of material fact exist, and that the moving party is entitled to judgment as a matter of law. . . . The moving party has the burden of proving that no genuine issues of material fact exist.... In determining whether to grant summary judgment, the trial court must view the record in the light most favorable to the non-moving party and must resolve all doubts as to the existence of a genuine issue of material fact against the moving party... . Thus, summary judgment is proper only when the uncontroverted allegations in the pleadings, depositions, answers to interrogatories, admissions of record, and submitted affidavits demonstrate that no genuine issue of material fact exists, and that the moving party is entitled to judgment as a matter of law. ... In sum, only when the facts are so clear that reasonable minds cannot differ, may a trial court properly enter summary judgment____” Rauch v. Mike-Mayer, 783 A.2d 815, 821 (Pa. Super. 2001). (citations omitted)

However, upon the filing of a motion for summary judgment the non-moving party cannot be idle. If the non-moving party has the burden of proof at trial on an essential issue and fails to adduce sufficient evidence on that issue in response to the motion, the moving party is entitled to judgment as a matter of law. Jackson v. City of Philadelphia, 782 A.2d 1115, 1119 (Pa. Commw. 2001).

With this standard in mind, the record reveals the following background.

STATEMENT OF FACTS

On September 13,1991, plaintiffs purchased property located at 120 Bittle Road, Littlestown, Adams County, Pennsylvania at a tax sale in a case docketed at 91-S-982. The property was formerly owned by Robert E. and Jacquelyn N. Foster. On November 12, 1991, a decree confirming the sale was entered and on December 23, 1991, the court authorized distribution of the sale proceeds.

After the tax sale was complete, plaintiffs attempted to obtain a $25,000 mortgage from the Adams County National Bank (ACNB) to pay off the prior mortgage with ACNB on the real estate and to cover other expenses related to the purchase of the property. ACNB required either an attorney’s certificate of title or title insurance as a condition of mortgage approval. Plaintiffs selected Adams to perform this service because they were familiar with Susan White, one of Adams’ employees. Adams is an abstract company that provides title insurance as an agent for Penn.

Plaintiffs were eager to move into their new home and requested that closing be held January 2, 1992. However, because the deed unto plaintiffs was only recorded on December 31,1991, the title search was delayed and settlement was postponed until January 3, 1992.

During the title search, Ms. White became aware that the record of the tax sale did not reveal a receipt that Mr. Foster had received notice of the tax sale by certified mail.

At settlement, Ms. White reviewed the title insurance policy written through Penn with plaintiffs and specifically, the noted exception of any possible claim Mr. Foster may file. The policy was written as an “Owner’s policy” meaning that it would cover the alleged value of the property at $94,000 rather than a “Lender’s policy” which limited coverage to the amount of the mortgage to ACNB. As part of the settlement, plaintiffs executed an owners affidavit at the bottom of which, in different print, was a notation “that they received a copy of Penn Title Insurance Company, report of title, and that they are aware of exceptions to said policy.”

On January 15,1992, the Fosters filed a petition nunc pro tunc in the Court of Common Pleas of Adams County at docket number 91-S-982 asking that the tax sale be set aside and asking that ejectment proceedings initiated against them by plaintiffs be stayed. The sole issue raised in the petition was the alleged lack of notice of the tax sale to Mr. Foster. By order of the same date, a stay was entered and a hearing scheduled. In response to this petition, plaintiffs asked that Adams and/or Penn provide legal counsel to help them defend their interest in the property. Adams advised plaintiffs to make a claim with Penn. Penn, in turn, refused to provide such representation and plaintiffs were therefore forced to hire their own counsel. Subsequently, on March 9, 1993, the Court of Common Pleas of Adams County upheld plaintiffs’ interest in the property. An appeal to the Commonwealth Court was denied.

LEGAL DISCUSSION

In its motion for summary judgment, Adams alleges that plaintiffs have failed to adduce sufficient evidence to proceed on any of the three counts filed against it. Based upon the following analysis, this court grants the motion.

Count I — Negligence

Plaintiffs allege that at settlement on January 3,1992, they were advised by Adams that a copy of the Penn policy would be received within several days. They claim that despite demands for a copy, none was received until August 23, 1993, after the Fosters’ appeal to Commonwealth Court was dismissed.

Under Count I, plaintiffs allege that Adams had the following duties and breached those duties as follows:

“(57) Adams Abstract had a duty to:
“(a) Immediately deliver a complete copy of the title insurance policy to the Himmelreichs after the January 3, 1992 closing;
“(b) Immediately deliver a complete copy of the title insurance policy to the Himmelreichs after repeated request for the policy by the Himmelreichs;
“(c) Accurately represent at the closing on January 3, 1992, the matters which would be covered and excluded from coverage under the terms of the title insurance policy;
“(d) Accurately represent at the closing the nature and content of the documents which Adams Abstracts directed and induced the Himmelreichs to sign;
“(e) Accurately represent the value of the insurance policy;
“(f) Accurately represent whether or not any title insurance policy was necessary; and
“(g) Provide to the Himmelreichs at the closing on January 3, 1992, a complete listing of the exceptions or exclusions in the title insurance policy.
“(58) Adams Abstract breached its duty to the Himmelreichs by:
“(a) Failing and refusing to deliver a complete copy of the title insurance policy to the Himmelreichs after the January 3, 1992 closing;
“(b) Failing and refusing to deliver a copy of the title insurance policy to the Himmelreichs even after repeated request by the Himmelreichs for a copy of the policy;
“(c) Delivering a copy of the title insurance policy to the bank and misrepresenting to the Himmelreichs that no policy had been issued;
“(d) Misrepresenting the nature and extent of the coverage in the title insurance policy by representing that all claims against the Himmelreichs’ title to and interest in the property would be covered by the insurance policy unless the claims were specifically excluded from coverage; ...
“(g) Misrepresenting the value of the title insurance policy by representing that all legal costs, fees and expenses of litigation to protect the title to and interest in the Himmelreichs’ property would be covered under the policy;
“(h) Misrepresenting the nature and extent of the exclusions in the title insurance policy by representing that any claims arising at case no. 91-S-982 in the Court of Common Pleas of Adams County, Pennsylvania were not excluded from coverage;
“(i) Misrepresenting that ACNB required a title insurance policy when Adams Abstracts knew or had reason to know that no such policy was ever required; and
“(j) By directing and inducing the Himmelreichs to execute documents;
“(i) Which were never fully explained to the Himmelreichs;
“(ii) Which the Himmelreichs had no time to read, and were not given the time to read; and
“(iii) Which were incorrect and inaccurate in light of the fact that Adams Abstracts knew of the ejectment proceedings and knew that the Himmelreichs were not in full possession of the residence.”

Adams argues that plaintiffs’ claim for negligence must be dismissed because plaintiffs have failed to adduce facts tending to prove that Adams breached a recognized duty to them, or that plaintiffs suffered damages resulting from a breach of that duty. Negligence is proved by (1) a duty or standard of care; (2) a breach of that duty or standard; (3) proximate causation; and (4) actual damages. Himmelreich v. Adams Abstract, 42 ACLJ 157, 161 (1998), citing Carlotti v. Employees of General Electric Federal Credit Union No. 1161, 717 A.2d 564, 567 (Pa. Super. 1998).

Adams first maintains that plaintiffs have produced no evidence establishing the relevant standard of care. Adams argues that expert testimony is necessary to establish Adams’ negligence, and that plaintiffs have failed to produce such testimony. Id. Plaintiffs reply that, although it may be necessary to provide expert testimony at trial, it is not required in order to overcome a motion for summary judgment, especially where significant factual issues remain in the case.

Before one can breach a duty to another, that duty must be recognized. This court finds that plaintiffs have not sufficiently established the standard of care that a title insurance agent owes to persons in plaintiffs’ position. Under Pennsylvania law, a title insurance agent is defined as one “who on behalf of the title insurer performs the following acts, in conjunction with the issuance of a title insurance report or policy:

“(1) determines unsurability and issues title insurance reports or policies, or both, based upon the performance or review of a search, or an abstract of title; and
“(2) performs one or more of the following functions:
“(i) collects or disburses premiums, escrow or security deposits or other funds;
“(ii) handles escrow, settlements or closings;
“(iii) solicits or negotiates title insurance business; or
“(iv) records closing documents.” 40 P.S. §910-24. Therefore, one of the functions of a title insurance agent is to handle a real estate closing as was done in this case. Furthermore, a title insurance agent must hold a valid certificate of qualification issued by the Insurance Department. 40 P.S. §910-24.1. However, our research fails to reveal any Pennsylvania statutory or case law providing further guidance with regard to the duties of a title insurance agent during closings.

As noted above, plaintiffs allege that Adams owed certain duties to them which were breached. However, plaintiffs have not identified an expert nor an expert report which arguably demonstrates that Adams, as an agent for Penn and as a title abstractor, was obligated to such duties.

In Storm v. Golden, 371 Pa. Super. 368, 538 A.2d 61 (1988), the plaintiff alleged that her former attorney breached duties owed to her as part of a real estate transaction. Defendant moved for nonsuit because of the plaintiff’s failure to produce expert testimony. The Superior Court rejected plaintiff’s contention that expert testimony was unnecessary because of the simplicity of the real estate transaction. The court noted that,

“As a general rale, our Supreme Court has held that ‘expert testimony is necessary to establish negligent practice in any profession.’... Although such a general statement is not a concrete pronouncement as to any one profession, it exhibits a recognition that when dealing with the higher standards attributed to a professional in any field a layperson’s views cannot take priority without guidance as to the acceptable practice in which the professional must operate.
“Generally, the determination of whether expert evidence is required or not will turn on whether the issue of negligence in the particular case is one which is sufficiently clear so as to be determinable by laypersons or concluded as a matter of law, or whether the alleged breach of duty involves too complex a legal issue so as to warrant explication by expert evidence....
“Here, the underlying question of whether legal malpractice occurred revolves around a lawyer’s duty and responsibility in connection with representing a client in a real estate transaction. We do not agree with appellant’s assertions that the sale of real estate is an elementary and non-technical transaction which requires only simple common sense.... At issue is not the simplicity of the transaction but the duty and degree of care of the attorney. Whether an attorney failed to exercise a reasonable degree of care and skill related to common professional practice in handling a real estate transaction is a question of fact outside the normal range of the ordinary experience of laypersons.” 371 Pa. Super, at 375, 377, 538 A.2d at 64-65. (citations omitted)

Substitute the term “title insurance agent” or “title abstractor” for “attorney” and the standard is clear; expert testimony must be produced in order for plaintiffs to sustain their cause of action for negligence. Despite concluding that expert testimony is necessary we are inclined not to grant summary judgment as to Count I solely because an expert has not yet been identified. There is suggestion that to do so would constitute an abuse of discretion. Wolloch v. Aiken, 756 A.2d 5 (Pa. Super. 2000). As noted, plaintiffs do have an obligation to respond to the motion for summary judgment and to produce evidence which raises factual issues. The record reveals disputes as to what was said and done at settlement. Despite the fact that this case has been in litigation nine years, the court has not been advised whether Adams has served expert interrogatories upon plaintiffs. A pretrial conference has not been held and neither discovery deadlines nor a trial date has been set. It may be that an expert, once produced, could describe a duty consistent with plaintiffs’ contention, thereby making their factual allegations regarding breach of that duty a jury question. Therefore, it would seem premature to grant the motion on the absence of expert testimony at this time.

Adams also argues that plaintiffs have not been able to demonstrate a causal connection between Adams’ alleged negligent conduct and plaintiffs’ claimed damages. Plaintiffs set forth their alleged damages in paragraph 66 of their complaint as:

“(a) Costs, fees and expenses to hire legal counsel to litigate all of the claims filed at case no. 91-S-982;
“(b) Out-of-pocket costs and expenses for preparing for and attending the hearings and trials in case no. 91-S-982, and in the related matters;
“(c) Loss of work and work time related to preparing for and attending hearings and trials in case no. 91-S-982 and in the related matters;
“(d) Costs, fees and expenses in defending against all of the claims instituted by Mrs. Foster or in which Mrs. Foster was a party;
“(e) Damages occurring while defending the action at 91-S-982 including:
“(i) the loss of use of the property at 120 Bittle Road; and
“(ii) damages to the property at 120 Bittle Road not otherwise covered by the Himmelreichs’ homeowners’ policies;
“(j) Costs, fees and expenses to purchase a title insurance policy which allegedly does not cover the damages sustained in this action;
“(k) Costs, fees and expenses to purchase a title insurance policy which was not required by ACNB but only by Adams; and
“(1) Costs, fees and expenses of this action, both current and future, together with additional lost time and wages, all of which would not have been incurred by the Himmelreichs but for Adams and Penn’s failure and refusal to pay for each of the items set forth above.”

Before discussing the damages issues in detail, it may be appropriate to digress momentarily. Stated briefly by Adams but ignored by plaintiffs is the fact that plaintiffs bought the subject property at the tax sale together with whatever defects or title problems may have existed. The purchase was not contingent upon good and marketable title or on mortgage financing. They were obligated on the purchase unless the tax sale was overturned and set aside. Their obligation existed before they approached Adams. In fact, their deed was recorded before Adams conducted a title search. One wonders how plaintiffs could have suffered any damages at the hands of Adams when the potential for the Fosters to raise title defects and the corresponding need to defend those challenges existed before Adams was even approached in this matter.

With this in mind, we find it helpful to group the allegations of negligence (assuming them to be true) to determine what, if any, damages could have been caused.

First, there are allegations that Adams failed to give plaintiffs a copy of the title insurance policy. (|58a, b.) Plaintiffs agree that they can identify no damages were incurred as a result of these allegations.

Second, there is allegation that Adams gave ACNB a copy of the policy while advising plaintiffs that one had not been issued. (j[58c.) We find no item of damage related to that allegation.

Third, they allege that Adams misrepresented that ACNB required a title insurance policy. (¶581.) In fact, a bank representative did advise plaintiffs they needed either an attorney’s title certificate or title insurance. Thus, they needed to incur the expense of one or the other. The only itemized damage which relates to securing title insurance is the cost of title insurance, if any, over the cost of an attorney’s certificate of title. However, plaintiffs chose Adams to perform the service not vice versa. Adams is a title insurance agency and not a law office. No legal logic or duty would require Adams to decline plaintiffs’ request for services.

Fourth, they allege that Adams misrepresented the nature of the coverage by stating that all claims against title would be covered by the policy unless excluded, that claims which could be raised by the Fosters were not excluded, and that all cost of litigation to protect their title would be covered under the policy. (¶5811, d, g.) However, that allegation can hardly be considered a misrepresentation because both Adams and Penn agree that if a claim is not excluded it would be covered. Here, the dispute is whether the Fosters’ claim was excluded. None of the damages plaintiffs allege relate to the issue of whether the Fosters’ claim was excluded except the cost of the current litigation. Absent a statutory or contractual duty, one is not entitled to attorneys’ fees in the current litigation. Likewise, one is not entitled to reimbursement for one’s time and wage loss incurred in prosecuting the litigation.

Finally, plaintiffs allege that Adams was negligent for directing them to execute the settlement documents without them being fully explained or without plaintiffs having time to read the documents while knowing that the Fosters had possible claims against the property. (J[58j.) Interestingly, it was plaintiffs who pushed for settlement within days and then insisted they could only stay for one hour. With this background, they now allege that they were rushed into signing documents without full explanation. Despite the fact we have little sympathy for persons who put themselves in such a situation and then blame others for their plight, a careful examination of plaintiffs’ alleged damages fails to indicate that any such expenses were caused by them signing the settlement documents.

Therefore, the court concludes that even if plaintiffs could establish a duty owed them by Adams and a breach of that duty, they cannot legally establish that any of their alleged damages legally flowed from that breach.

Count II — Fraud

Under Count II, plaintiffs allege that Adams misrepresented the need for title insurance coverage, the extent of the coverage and the exclusions. Adams argues that summary judgment is appropriate because plaintiffs fail to demonstrate evidence sufficient to establish the elements of fraud; specifically that they misrepresented the need for title insurance or the nature of the policy provided.

As stated recently in Kit v. Mitchell, 771 A.2d 814, 819 (Pa. Super. 2001),

“To succeed in a fraud case, a plaintiff must establish the following elements... (1) a representation; (2) which is material to the transaction at hand; (3) made falsely, with knowledge of its falsity or recklessness as to whether it is true or false; (4) with the intent of misleading another into relying on it; (5) justifiable reliance on the misrepresentation; and (6) the resulting injury was proximately caused by the reliance.’... These elements must be proven by clear and convincing evidence.” (citations omitted)

One of the difficulties presented in this case is to ascertain what material representations plaintiffs allege that Adams made which were false. Adams’ motion for summary judgment specifically avers that plaintiffs failed to produce evidence of misrepresentations of the need for title insurance and the nature of the policy provided. Plaintiffs produced no evidence to the contrary. We have been presented with no specific utterance upon which to determine whether a statement was material or false. It is clear that depositions were taken of plaintiffs, Ms. White, Mr. Mummert and Adams’ owner, Linda Moose. Adams attached relevant portions to support their motion. Plaintiffs certainly had the same opportunity to support their position but failed to do so. Rather, the only portion of the record which supports plaintiffs’ claim of fraud is the averments in the complaint. For this reason alone, the court could dismiss Count II.

Plaintiffs aver that Adams misrepresented the bank’s requirement to have title insurance. The record fails to reveal any statement made by Adams as to the need for title insurance or that plaintiffs relied on that statement. As noted above, the bank advised plaintiffs what was needed. According to Mr. Himmelreich, they could have used bank’s counsel but declined to do so and instead approached Adams.

Plaintiffs further aver that Adams misrepresented the extent of the coverage. Again, the record fails to reveal any statement made by Adams that was contrary to the coverage provided. The complaint avers the misrepresentation to be that the policy would cover all claims not excluded. The only claim at issue is the one by the Fosters. Plaintiffs acknowledge receiving a copy of the report of title at settlement which expressly excepted “Possible outstanding interest of Robert E. Foster; sold out at Tax Claim Bureau sale held September 3, 1991.” They also acknowledge that these exceptions were read by Ms. White at settlement while they read along. The petition filed by the Fosters to set aside the tax sale alleged that only Mr. Foster was not given proper notice of the sale. Although Mrs. Foster joined in the petition, she made no claim that she did not receive notice. She joined primarily as a party to stay ejectment from the premises. Although plaintiffs’ brief argues Adams represented that the policy would issue with no exclusion for Mrs. Foster, in fact, the record fails to demonstrate that any claim by Mrs. Foster was excepted from coverage. Therefore, plaintiffs fail to show that Adams made a misrepresentation of existing fact.

Adams also argues that there is no legal nexus between the alleged fraud and the damages claimed. For the same reasons set forth above under Count I, we agree.

Before passing on this issue, we take a brief historical side trip to show that plaintiffs were warned to clarify their fraud claim.

On October 28, 1999, this court issued an opinion on Penn’s preliminary objections to plaintiffs’ second amended complaint. In that opinion, because of the confusing nature of the allegations, this court ordered plaintiffs to “re-plead and clarify” Count IX of that complaint in which they alleged that Penn committed fraud. Himmelreich v. Adams Abstract, 42 ACLJ at 165. Within Count IX, plaintiffs had alleged that Adams, acting as agent for Penn (¶113) misrepresented the necessity and requirement for title insurance (¶116), misrepresented what was included and excluded in the policy (¶116) and then deleted the exclusion relating to 91-S-982. Plaintiffs claim that based upon these representations, they justifiably and reasonably believed they were covered under the policy for any claim raised by the Fosters. Plaintiffs failed to re-plead Count IX, as directed. Nevertheless, plaintiffs use similar language to make many of the same allegations in Count II of the fourth amended complaint. Therefore, this court’s earlier ruling that Count IX was “confusing” is equally applicable to Count II presently. When plaintiffs alleged that they were led to believe that any claim by the Fosters would be covered and that the exclusion for claims by the Fosters had been deleted from the policy we wrote, “[I]f the exclusion was deleted it would mean that coverage existed for the claim and that no misrepresentation has been made by the defendants. The confusion which this inconsistency generates is such that the court is unable to clearly understand what plaintiffs are alleging.” Id. at 165. The same can be said again. Our Superior Court has recognized the frustration which arises from inconsistent and confusing pleadings when it stated:

“A purpose behind the rules of pleading is to enable parties to ascertain, by utilizing their own professional discretion, the claims and defenses that are asserted in the case. This purpose would be thwarted if courts, rather than the parties, were burdened with the responsibility of deciphering the cause of action from a pleading of facts which obscurely support the claim in question. Parties ought not be allowed to delegate their duties under the Rules of Procedure to our courts.” Himmelreich v. Adams Abstract, 42 ACLJ at 165, citing Krajsa v. Keypunch Inc., 424 Pa. Super. 230, 236, 622 A.2d 355, 357 (1993).

Plaintiffs still fail to clarify their allegations of fraud.

Count III — UTPCPL

Under Count III, plaintiffs are alleging violation of the Unfair Trade Practices and Consumer Protection Law, 73 P.S. §201-1 et seq. The UTPCPL permits private civil actions to be filed where a person purchases goods or services primarily for personal, family or household purposes and suffers an ascertainable loss as a result of an act or practice declared unlawful under the statute. 73 P.S. §201-9.2. Specifically, plaintiffs claim to have purchased services (to obtain title insurance) and goods (namely the title insurance policy). They claim to have been misled by Adams regarding the requirement to purchase title insurance and the coverage and suffered losses as a result thereof. Clearly, the purchase of title insurance in connection with the purchase of a residence qualifies as far as “personal, family or household purpose.” Unlawful acts are those acts described in 73 P.S. §201-2(4)(I)-(xii). 73 P.S. §201-3.

Despite some suggestion to do so in prior opinions (43 ACLJ at 166), plaintiffs’ complaint does not set forth which statutory “unfair or deceptive acts” they allege were committed by Adams. Nevertheless, the court feels safe in concluding that plaintiffs are proceeding under section 201-2(4)(xv) (knowingly misrepresenting that services are needed if they are not needed) and section 201-2(4)(xxi) (engaging in any other fraudulent or deceptive conduct which creates a likelihood of misunderstanding). Each of these sections is aimed toward preventing fraudulent conduct.

Fraud has not been defined in the UTPCPL but case law holds that it is the equivalent of commonlaw fraud, Booze v. Allstate Insurance Co., 750 A.2d 877 (Pa. Super. 2000); Sewak v. Lockhart, 699 A.2d 755 (Pa. Super. 1997); Hammer v. Nikol, 659 A.2d 617 (Pa. Commw. 1995); Prime Meats Inc. v. Yochim, 422 Pa. Super. 460, 619 A.2d 769 (1993), alloc. denied, 538 Pa. 627, 646 A.2d 1180 (1994).

The reasoning used and conclusion reached as to Count II (fraud) would equally apply to this count.

Accordingly, the attached order is entered.

ORDER

And now, January 24, 2002, the motion for summary judgment filed by defendant, Adams Abstract Associates, is granted. The complaint against said defendant is hereby dismissed.

      . Defendant Adams argues that its motion for summary judgment should be granted because plaintiffs failed to comply with the Rules of Civil Procedure. Adams is correct in stating that pursuant to Local Rules 1035.3 and 211, plaintiffs were required to file a responsive brief within 20 days after service of Adams’ brief in support of its motion for summary judgment. Pursuant to Local Rules, plaintiffs’ brief was due on or before March 20, 2001. Plaintiffs filed their answer to Adams Abstract’s motion for summary judgment on March 30, 2001, and subsequently filed their brief in opposition to Adams’ motion for summary judgment on April 2, 2001. While the court has noted plaintiffs’ failure to comply with the Local Rules, we will not grant defendants’ motion for summary judgment on this basis alone. Local Rule 210 suggests possible sanctions for failure to comply with Rule 211. We note that Rule 210(d) provides that the court may “enter such order as the interest of justice requires.” Under these circumstances, it would not be in the interest of justice to grant Adams’ motion for summary judgment based solely on plaintiffs’ tardiness. Plaintiffs are reminded, however, that the court may impose sanctions in the future for continued failure to comply with Local Rules.

      . In 1983 our Supreme Court in Standard Venetian Blind Co. v. American Empire Insurance Co., 503 Pa. 300, 469 A.2d 563 (1983), rejected the notion that one who fails to read unambiguous coverage provisions of an insurance contract can avoid its terms. That decision expressly rejected the concept that an agent has a duty to explain exclusions or limitations in an insurance policy.


author: WETTICK JR., J.,

text:
    Appeal of Cornerstone Television Inc.

      C.P. of Allegheny County,
    no. GD98-19070.

      Joseph L. Luciana III, for Cornerstone Television.

      Jack Finnegan, for Wall Borough.

      Isobel Storch, for East Allegheny School District.

      Terrence F. McVerry, for Allegheny County.
    December 13, 2001
   WETTICK JR., J.,

This litigation involves a real estate tax exemption claim raised by a nonprofit corporation which owns a television station that it uses for broadcasting religious programs. The taxing bodies raise two arguments in support of their claim that the property is not exempt: (1) under applicable state legislation, the property does not qualify for tax-exempt status and (2) the state and federal constitutions bar the legislature from giving tax-exempt status to property used for religious programming. As I will discuss in part I of this opinion, under applicable state legislation, the property is exempt. As I will discuss in part II of this opinion, political subdivisions have no standing to challenge the constitutionality of provisions of state legislation granting tax exemptions.

I.

Cornerstone Television Inc. filed an application with the Allegheny County Board of Property Assessment, Appeals and Review for a real estate tax exemption for property used within the Borough of Wall for television broadcasting of religious programming. The application was denied by the board on the ground that the property does not qualify for exemption under state legislation. Cornerstone filed an appeal to this court.

The matter was assigned to me for a non-jury trial. The parties agreed that evidence would be submitted through depositions and affidavits.

The evidence establishes that Cornerstone is a nonprofit corporation. It was established for the “purpose of bringing glory to almighty God by promulgating the gospel of Jesus Christ and the truths of the Holy Bible.” Brief of Cornerstone in support of appeal at 2. It carries out this purpose primarily through television broadcasts of religious programming.

Over 95 percent of Cornerstone’s broadcasting time is devoted to religious programming. According to Cornerstone’s evidence, approximately 2.8 million persons watch its religious programming. Cornerstone’s broadcasting activities are financially supported primarily through donations from its viewing audience. Each month approximately 4,000 persons make donations to Cornerstone.

Under section 204(a)(3) of the General County Assessment Law, 72 P.S. §5020-204(a)(3), the legislature has exempted from local taxation all institutions of charity “founded, endowed, and maintained by public or private charity.” The Institutions of Purely Public Charity Act (Act of November 26,1997, PL. 508, no. 55,10 P.S. §371 et seq. (Act 55)), section 5 (10 P.S. §375), sets forth the criteria for institutions of purely public charity. Subsection (a) of section 5 states that an institution which meets the criteria set forth in subsections (b), (c), (d), (e), and (f) shall be considered to be “founded, endowed and maintained by public or private charity.” Thus, institutions which meet the criteria set forth in subsections (b)-(f) of section 5 of Act 55 will be exempt from local taxation under section 204(a)(3) of the General County Assessment Law.

Under section 375(b), the institution must advance a charitable purpose; under subsection (c), the institution must operate entirely free from private profit motive; under subsection (d), the institution must donate or render gratuitously a substantial portion of its services; under subsection (e), an institution must benefit a substantial and indefinite class of persons who are legitimate subjects of charity; and under subsection (f), the institution must relieve the government of some of its burden. Each subsection describes the manner in which these five criteria may be satisfied.

The taxing bodies are not challenging Cornerstone’s contention that the evidence establishes that Cornerstone advances a charitable purpose, operates entirely free from private profit motive, donates or renders gratuitously a substantial portion of its services, and benefits a substantial and indefinite class of persons who are legitimate subjects of charity. However, it is the position of the taxing bodies that Cornerstone does not relieve the government of some of its burden.

The taxing bodies contend that the activities of Cornerstone cannot, be deemed to reheve government of some of its burden because a government cannot be involved in promoting religion. The difficulty with this argument is that under section 375(f)(5), the criterion that an institution must relieve the government of some of its burden is satisfied if the institution:

“(f)(5) Advances or promotes religion and is owned and operated by a corporation or other entity as a religious ministry and otherwise satisfies the criteria set forth in section 5.”

In summary, Cornerstone correctly states that its real estate, which is used for religious broadcasting, is tax-exempt under section 204(a)(3) of the General County Assessment Law if it can establish that it is an institution of charity “founded, endowed, and maintained by public or private charity.” Under Act 55, it is an institution of charity founded, endowed, and maintained by public or private charity if it meets the criteria set forth in subsections (b)-(f) of section 5. The evidence supports its position that it has met the criteria set forth in subsections (b)-(f). Consequently, Cornerstone’s property is tax-exempt under section 204(a)(3) of the General County Assessment Law.

II.

The taxing bodies raise two constitutional challenges to the provision of Act 55 granting a tax exemption upon a showing that the institution advances or promotes religion and is owned and operated as a religious ministry.

The taxing bodies’ first constitutional challenge is based on the establishment clause of the First Amendment of the United States Constitution which prohibits government from making laws that give preferential treatment to religious activities. In support of their position, the taxing bodies rely primarily on two cases: Texas Monthly Inc. v. Bullock, 109 S.Ct. 890 (1989) (an action brought by a publisher of a nonreligious publication which successfully challenged a sales tax exemption provided by the Texas legislature for religious publications) and Haller v. Commonwealth, Department of Revenue, 556 Pa. 289, 728 A.2d 351 (1999), (in an action brought by taxpayers who publish and purchase books, the Supreme Court of Pennsylvania ruled that a tax exemption for religious publications violates the establishment clause).

The second challenge is based on the Pennsylvania Constitution. The taxing bodies raise the following argument: Article VIII, Section 2(a)(v) of the Pennsylvania Constitution permits the General Assembly to exempt from taxation only those nonprofit entities that are “institutions of purely public charity.” Case law holds that an institution cannot be an institution of “purely public charity” within the meaning of Article VIII, Section 2(a)(v), unless it relieves the government of some of its burden. Hospital Utilization Project v. Commonwealth, 507 Pa. 1, 487 A.2d 1306 (1985). Government does not advance or promote religion so an entity performing this activity does not relieve the government of some of its burden. Consequently, the provision of Act 55 granting a tax exemption to an institution upon a showing that the institution advances or promotes religion is an unconstitutional grant of an exemption to an entity that has not qualified as a purely public charity under Article VIII, Section 2(a)(v).

While Cornerstone sets forth arguments in opposition to the taxing bodies’ claim that legislation granting a tax exemption to nonprofit institutions that provide religious programming violates the Pennsylvania and United States Constitutions, it contends that I should not address the merits of these constitutional challenges because political subdivisions of a state lack standing to raise constitutional challenges to state legislation describing those properties and activities that may be taxed.

There are three separate issues that Cornerstone may be raising through the defense that the taxing bodies lack standing to pursue these constitutional challenges: (1) a failure to meet the general standing requirement of an injury-in-fact; (2) the absence of any constitutional protections under the Fourteenth Amendment; and (3) the lack of power to raise challenges under the Pennsylvania Constitution to state legislation.

1.

Under well-established case law, a party has no standing to obtain judicial resolution of a claim unless that party has an interest in the subject matter which is substantial, immediate, and direct. The party raising the claim must show that there is a harm to an interest of that party caused by the matter of which the party complains. Pittsburgh Trust for Cultural Resources Inc. v. Zoning Board of Adjustment, 145 Pa. Commw. 503, 511, 604 A.2d 298, 303 (1992); Wm. Penn Parking Garage Inc. v. City of Pittsburgh, 464 Pa. 168, 346 A.2d 269 (1975).

It is not clear that the taxing bodies have suffered an injury. A substantial argument may be made that only taxpayers are harmed by legislation that unlawfully ex-eludes certain properties from tax rolls. A taxing body is not harmed because it sets a millage rate that takes into account any properties that the legislature has excluded from taxation. See Hazleton v. Hazleton Area School District, 442 Pa. 477, 276 A.2d 545 (1971) (a municipal corporation may not maintain an action to protect the rights of its resident taxpayers where the litigation does not affect the municipal corporation directly); Township of Upper Moreland v. PennDOT, 48 Pa. Commw. 27, 409 A.2d 118 (1979) (township cannot sue to challenge expenditures of the Department of Transportation on the ground that they are contrary to the Pennsylvania Constitution; the power to sue or be sued is not a mandate for the township to sue as a representative of its citizens — aggrieved citizens harmed by unlawful expenditures can assert their own claims).

The argument of the taxing bodies is that they have obligations that are mandated by the Pennsylvania Constitution and/or the General Assembly; it is more difficult for these bodies to perform these obligations if they are unable to impose taxes to the full extent provided for under the constitution. Consequently, they are proper parties to raise the claims.

For purposes of this opinion, I will assume that there is direct harm to an interest of each taxing body resulting from legislation that unconstitutionally exempts property from taxation and, thus, the taxing bodies have standing under the injury-in-fact standing requirement.

2.

The taxing bodies’ federal constitutional challenge to the provisions of Act 55 which grant a tax exemption to institutions that advance or promote religion is brought under the Fourteenth Amendment to the United States Constitution and based on the establishment clause of the First Amendment which prohibits government from making laws that provide preferential treatment to religious activities. See Haller v. Commonwealth, supra, 556 Pa. 289, 728 A.2d 351. This challenge is without merit because there is an established body of case law holding that the provisions of the federal constitution do not apply to state legislation defining relationships between the state and the instrumentalities that the state has created to fulfill its governmental obligations.

The federal case law is summarized in the recent opinion of the United States District Court for the Southern District of New York in City of New Rochelle v. Town of Mamaroneck, 111 F. Supp.2d 353 (S.D.N.Y. 2000). In that case, the issue was whether a municipality had standing to challenge on federal constitutional grounds an ordinance promulgated by an adjacent municipality as the result of a dispute over a proposed shopping development. Although the district court found that the plaintiff (New Rochelle) had sufficiently alleged an injury-in-fact or such a personal stake in the outcome of the litigation as to warrant invocation of the court’s jurisdiction, it ruled that New Rochelle could not maintain a claim under the federal constitution:

“It has long been the case that a municipality may not invoke the protections of the Fourteenth Amendment against its own state. See City of Newark v. New Jersey, 262 U.S. 192,196,43 S.Ct. 539, 61 L.Ed. 943 (1923). A municipality is thus prevented from attacking state legislation on the grounds that the law violates the municipality’s own rights. See e.g., City of New Orleans v. New Orleans Water-Works Co., 142 U.S. 79, 89-91, 12 S.Ct. 142, 35 L.Ed. 943 (1891); Hunter v. City of Pittsburgh, 207 U.S. 161, 28 S.Ct. 40, 52 L.Ed. 151 (1907). Moreover, while municipalities or other state political subdivisions may challenge the constitutionality of state legislation on certain grounds and in certain circumstances, these do not include challenges brought under the due process or equal protection clauses of the Fourteenth Amendment. See e.g., Rogers v. Brockette, 588 F.2d 1057 (5th Cir.), cert. denied, 444 U.S. 827, 100 S.Ct. 52, 62 L.Ed.2d 35 (1979) (local school district had capacity to challenge constitutionality of state statute under supremacy clause); San Diego Unified Port District v. Gianturco, 457 F. Supp. 283 (S.D. Cal. 1978), aff’d, 651 F.2d 1306 (9th Cir. 1981), cert. denied, 455 U.S. 1000, 102 S.Ct. 1631, 71 L.Ed.2d 866 (1982) (political subdivision can challenge constitutionality of state legislation under supremacy clause). This is because ‘a municipal corporation, in its own right, receives no protection from the equal protection or due process clauses vis-á-vis its creating state.’ South Macomb Disposal Authority v. Township of Washington, 790 F.2d 500, 505 (6th Cir. 1986) (citing City of Moore v. Atchison, Topeka & Santa Fe Railway Co., 699 F.2d 507, 511-12 (10th Cir. 1983); Delta Special School District No. 5 v. State Board of Education, 745 F.2d 532, 533 (8th Cir. 1984); and others). The due process and equal protection clauses ‘have not been interpreted as limitations on the internal political organization of a state.’ Id.
“In South Macomb, the Sixth Circuit addressed the question of whether a municipal corporation could sue another township within the same state on the ground that the township imposed certain waste disposal permitting requirements in violation of the municipal corporation’s right to due process and equal protection. Applying the same reasoning that has led federal courts to bar municipalities from bringing due process and equal protection claims against their own states, the Sixth Circuit concluded:
“[T]he Fourteenth Amendment simply does not prescribe guidelines and impose restriction upon one political subdivision vis-á-vis another political subdivision. The relationship between the entities is a matter of state concern; the Fourteenth Amendment protections and limitations do not apply. Id. (emphasis added)” 111 F. Supp.2d at 364.

The law is also summarized in the recent opinion in the United States Court of Appeals for the Tenth Circuit in Branson School District RE-82 v. Romer, supra, 161 F.3d at 628, where the court, in ruling that a political subdivision has standing to bring a constitutional claim against its creating state based on the supremacy clause, recognized that this was an exception to the general principle.

“It is well-settled that a political subdivision may not bring a federal suit against its parent state based on rights secured through the Fourteenth Amendment. See City of Moore, Oklahoma v. Atchison, Topeka & Santa Fe Ry. Co., 699 F.2d 507, 511-12 (10th Cir. 1983) (rejecting an equal protection challenge against a state statute because ‘political subdivisions of a state lack standing to challenge the validity of a state statute on Fourteenth Amendment grounds’); see also, United States v. Alabama, 791 F.2d 1450, 1455 (11th Cir. 1986); South Macomb Disposal Auth. v. Township of Washington, 790 F.2d 500, 504-505 (6th Cir. 1986); Town of Ball v. Rapides Parish Police Jury, 746 F.2d 1049, 1051 n.1 (5th Cir. 1984); Village of Arlington Heights v. Regional Trans. Auth., 653 F.2d 1149, 1152-53 (7th Cir. 1981); City of New York v. Richardson, 473 F.2d 923, 929 (2d Cir. 1973).”

Also, see Housing Authority of Kaw Tribe of Indians of Oklahoma v. City of Ponca, 952 F.2d 1183 (10th Cir. 1991) (“Since the city complied with the state legislature’s prescription, its actions are sanctioned by the legislature. The authority, as a state agency, cannot therefore void the city’s actions based on an assertion of a constitutional right inherent in the agency. We thus conclude that a political subdivision of a state may not challenge the validity of a fellow political subdivision under the Fourteenth Amendment unless such action is expressly authorized the creating state.” Id. 1189-90 (citations omitted)); Village of Arlington Heights v. Regional Transportation Authority, 653 F.2d 1149 (7th Cir. 1981) (municipalities cannot challenge the validity of a state statute under the Fourteenth Amendment because they are creatures and instrumentalities of the state); South Macomb Disposal Authority v. Township of Washington, 790 F.2d 500, 505 (6th Cir. 1986) (equal protection and due process clauses “have not been interpreted as limitations on the internal political organization of a state”); and Atlantic Coast Demolition & Recycling Inc. v. Board of Chosen Freeholders of Atlantic County, 893 F. Supp. 301, 315 (D. N.J. 1995) (“In other words, municipalities may assert claims against the creating state under the supremacy clause, but not under other substantive constitutional guarantees.”).

The Pennsylvania appellate courts also construe the federal constitution in this fashion.

In School District of Philadelphia v. Pennsylvania Milk Marketing Board, 683 A.2d 972 (Pa. Commw. 1996), the school district, a consumer organization, and an individual filed a petition for review of an order issued by the Pennsylvania Milk Marketing Board pursuant to Pennsylvania’s Milk Marketing Law which fixed minimum wholesale prices for milk in milk market area 1, including prices charged to schools. The petitioners asked the Commonwealth Court to declare that the Milk Marketing Law was unconstitutional and to direct the Milk Marketing Board to permit minimum wholesale prices for school milk to be fixed by market forces. The school district alleged that as a result of the Milk Marketing Law, the school district spent an additional one million dollars per year to purchase milk to serve its students. In footnote 5 of its opinion, the Commonwealth Court ruled that a school district has no rights under the federal constitution to assert against the state:

“The Attorney General of Pennsylvania, who has intervened in this matter, asserts that the school district lacks the capacity to make this challenge on the ground that a school district has no rights under the federal constitution which it may assert in opposition to the will of the Commonwealth, its creator.... While we agree that this is an accurate statement of the law, the remaining petitioners may raise the challenge, and have done so. Thus the school district’s ability to assert this issue is of no consequence.” 683 A.2d at 975-76 n.5. (citations omitted)

In Commonwealth, Dept. of Environmental Resources v. Borough of Carlisle, 16 Pa. Commw. 341, 347, 330 A.2d 293, 297 (1974), the court ruled that the Borough of Carlisle and the Carlisle Borough Sewer System Authority could not raise a constitutional challenge based on the federal constitution to an order entered by the Department of Environmental Resources restricting new connections to the sewage system of the Borough of Carlisle because the federal constitution does not restrain a state legislative body’s control over a municipal corporation which it has created to exercise the governmental powers of the state:

“The order by the DER in the instant case was nothing more than [an] exercise of state power over its agency, the Borough of Carlisle, to regulate sewage treatment within the borough. And, as stated in Hunter [v. City of Pittsburgh, 207 U.S. 161 (1907)], such action is unrestrained by any provision of the Constitution of the United States.”

Also, see Penn-Delco School District v. Schukraft, 95 Pa. Commw. 619, 625-26, 506 A.2d 956, 960 (1986) (citations omitted) (“Appellant’s third contention is that the district has been denied equal protection of the laws as guaranteed by the Fourteenth Amendment to the federal constitution by virtue of the district’s being denied the opportunity to collect its own taxes as home rule charter municipalities are allowed. This argument is also without merit. A school district, as an agency of the Commonwealth or a quasi-municipal corporation created by the Commonwealth for the sole purpose of administering the Commonwealth’s system of public education, has no rights under the federal constitution which it may assert in opposition to the will of the Commonwealth, its creator.”); and Philadelphia Facilities Management Corp. v Biester, 60 Pa. Commw. 366, 389-90, 431 A.2d 1123, 1135 (1981) (citations omitted) (“a municipal corporation, being a creature of the state, cannot invoke federal constitutional protections against legislative acts of its sovereign, the state”).

In summary, I should not consider whether a state law that grants tax exemptions to institutions that advance or promote religion violates the Fourteenth Amendment to the United States Constitution because a political subdivision of a state does not have any Fourteenth Amendment protections with respect to state legislation addressing thp manner in which the political subdivision shall conduct its affairs. Compare Haller v. Commonwealth, Department of Revenue, supra, where taxpayers raised a constitutional challenge to Pennsylvania’s sales tax exemption for certain sales of religious publications.

3.

The next issue is whether under Pennsylvania law, political subdivisions have the legal power to raise constitutional challenges to state legislation that are based on the Pennsylvania Constitution. In order to do anything, a political subdivision needs to show that it has been given the authority to do so.

While there is no legislation which expressly states that the power given to a political subdivision, to sue or be sued in connection with the collection of taxes, extends to lawsuits challenging the constitutionality of state legislation excluding types of property or services from taxation, the taxing bodies contend that this authority is implied. I do not find this argument to be persuasive.

Political subdivisions are creatures of the state and the authority of the legislature over their powers is supreme. A political subdivision has no inherent powers and may do only those things that the legislature has placed within its power to do. Denbow v. Borough of Leetsdale, 556 Pa. 567, 576, 729 A.2d 1113, 1118 (1999); In re Appeal of the Borough of Ambridge, 53 Pa. Commw. 251, 253, 417 A.2d 291, 292 (1980). The power of taxation lies solely in the General Assembly; political subdivisions have no inherent power of taxation. No political subdivision has any power or authority to collect a tax absent a grant or delegation of the power to tax from the General Assembly. SEPTA v. Board of Revision of Taxes, 777 A.2d 1234 (Pa. Commw. 2001); Mastrangelo v. Buckley, 433 Pa. 352, 250 A.2d 447 (1969). Political subdivisions are “administrative arm[s]” of the legislature created to carry out the legislature’s directives. Petition of Granat, 139 Pa. Commw. 376, 381, 590 A.2d 849, 852 (1991). The legislature would riot have delegated to an administrative arm that it created to carry out its directives, the power to challenge the constitutionality of these directives. Thus, once the legislature has enacted legislation which provides that the power to tax given to a political subdivision does not extend to certain types of property or services, this is the end of the matter with respect to what the political subdivision may tax.

This conclusion as to legislative intent does not insulate from state constitutional challenges legislation exempting charitable institutions from the payment of local real estate taxes any more than legislation granting other exemptions to charitable institutions. To the contrary, this ruling, that the local taxing bodies have no authority to raise constitutional challenges to Act 55, places claims for exemptions furnished to charitable institutions from local taxes (72 P.S. §5020-204(a)(3)) based on Act 55 on the same footing as claims for exemptions from state taxes based on Act 55 — for example, the exclusion from the state sales tax furnished to any charitable institution (72 P.S. §7204(10)). In each instance, there is no taxing body or governmental office that the legislature has authorized to raise constitutional challenges to its legislation.

In City of Pittsburgh v. Commonwealth of Pennsylvania, 112 Pa. Commw. 188, 535 A.2d 680 (1987), aff’d, 522 Pa. 20, 559 A.2d 513 (1989), the City of Pittsburgh and Richard S. Caliguiri, individually and as mayor of the city, requested the court to declare unconstitutional a section of the Local Tax Enabling Act that prevented the City of Pittsburgh from collecting a wage tax from nonresidents working within the city who have paid a similar tax to the political subdivisions where they reside. The city contended that its residents bore an unconstitutionally unfair tax burden by reason of these statutory provisions and, thus, the state legislation violated the uniformity clause of the Pennsylvania Constitution, the equal protection clause of the United States Constitution, and Sections 1 and 2 of Article IX of the Pennsylvania Constitution.

The Commonwealth Court upheld the state’s preliminary objection raising the city’s lack of standing to assert federal or state constitutional protections against the Commonwealth:

“This court has held that inasmuch as a municipality is merely a creature of the sovereign created for the purpose of carrying out local government functions, the municipality has no standing to assert the claims of its citizens against the Commonwealth.... Here, the thrust of the petition for review is that the citizens of Pittsburgh are being disadvantaged by the allegedly unfair and discriminatory provisions of the challenged statutes. There is no allegation that the city’s local government functions have been adversely affected by the allegedly unequal tax structure. . . . We conclude that the city’s cause of action against the Commonwealth is barred and the respondents’ demurrer in that regard must be sustained.” 112 Pa. Commw. at 191-92, 535 A.2d at 682. (citations omitted)

Also, see Marriott Corp. v. Board of Assessment Appeals of Montgomery County, 63 Pa. Commw. 622, 628, 438 A.2d 1032, 1035 (1982). (“If the vested rights claim be regarded as a constitutional one, it is barred because a municipal corporation cannot invoke constitutional protections against its sovereign, the state.”)

In Chartiers Valley Joint Schools v. Allegheny County Board of School Directors, 418 Pa. 520, 211 A.2d 487 (1965), four school districts and numerous taxpayers contended that a school reorganization act violated various provisions of the Pennsylvania Constitution. The majority opinion did not consider the claim that the school districts lacked standing to sue because the taxpayers had standing to raise the constitutional challenges. In a concurring opinion, Mr. Justice Cohen considered the “unwarranted appearance of the school districts”:

“How is it that the school district, the creature of the legislature, given life for the sole purpose of carrying out the legislature’s duty to provide education in the manner directed by the legislature, can attack the legislature’s directions for discharging its duty? Certainly the legislature has not given the school district the duty of making sure that the legislature acts constitutionally. And the school district has no powers that are not either expressly conferred upon it by the legislature or implied from the nature of its duties.
“Moreover, the school district is not an elector or a taxpayer or an entity that can claim an injury arising from unlawful delegation or discriminatory classification or impairment of contracts. It has no constitutional rights which the legislature can impair.” Id. at 548,211 A.2d at 502. (emphasis in original)

The appellate courts have recognized one exception in which constitutional challenges may be raised to state legislation — where the state legislation is preventing political subdivisions or elected officials of a political subdivision from fulfilling their governmental functions.

In DeFazio v. Civil Service Commission of Allegheny County, 562 Pa. 431, 756 A.2d 1103 (2000), the sheriff of Allegheny County contended that legislation requiring sheriffs of second class counties to abide by certain hiring and promotion practices and limiting political activities of the sheriff’s employees violated the Pennsylvania Constitution. Defendants challenged the sheriff’s standing, apparently on the ground that the legislation limited the activities of the sheriff’s employees, and not those of the sheriff himself; thus, the sheriff had no direct substantial interest in his claim of unconstitutionality and therefore did not have standing to bring the action. The Pennsylvania Supreme Court, citing only the case law governing “injury-in-fact” principles of standing, ruled that the sheriff of Allegheny County had standing because a sheriff has a substantial interest in the management and operation of his or her office and these interests are clearly affected by this legislation.

In Harrisburg School District v. Hickok, 762 A.2d 398 (Pa. Commw. 2000), a school district challenged the constitutionality of the Education Empowerment Act which authorized the Secretary of Education to place control of the school district in a Board of Control. The court stated that the school district had standing to challenge the constitutionality of its creator’s actions:

“In this case, the Harrisburg School District is certainly affected because other than levying taxes, the affairs of operating the school district have been taken away from it. As in DeFazio, because the Harrisburg School District has a substantial, direct and immediate interest in the outcome of this matter, it has standing to bring this action....
“[For enforcement of legislation, t]he true party in interest is the government official who implements a law.” Id. at 404 n.6.

In the present case, there is no claim that the provision of Act 55 granting tax exemptions to institutions that advance or promote religion and meet the other criteria of Act 55 will significantly interfere with the taxing bodies’ ability to manage their affairs. Thus, the taxing bodies have no authority to raise constitutional challenges based on Article VIII, Section 2(a) of the Pennsylvania Constitution.

ORDER

On December 13, 2001, upon consideration of Cornerstone Television Inc.’s appeal from the decision of the Board of Property Assessment, Appeals and Review and following a nonjury trial, it is ordered, adjudged, and decreed that the property of Cornerstone Television Inc. that is the subject of the appeal is exempt from taxation.

      . The constitutional challenge is raised under the Fourteenth Amendment to the United States Constitution which applies the establishment clause of the First Amendment to state governments. See Haller v. Commonwealth, Department of Revenue, 556 Pa. 289, 290 n.2, 728 A.2d 351, 351 n.2 (1999).

      . Article Vm, Section 5 states that laws exempting property from taxation, other than property enumerated in Article VIII, shall be void.

      . A taxing body has standing to challenge a property owner’s exemption claim, by taking the position that legislation does not exempt this property from taxation, because the legislature has imposed on each taxing body a duty to tax any property that it is authorized to tax under an Act of the General Assembly.

      . There is a single exception: most federal courts permit a political subdivision to raise against the state the claim that under the supremacy clause of the United States the political subdivision must comply with federal legislation that conflicts with state law. See Branson School District RE-82 v. Romer, 161 F.3d 619, 627-30 (10th Cir. 1998), and cases cited therein. (The rationale for the exception is that the dispute is not between the political subdivision and the state as to how the political subdivision should conduct its affairs; the issue, instead, is whether the political subdivision must follow federal law or state law.)

      . Previously, the school district had instituted a lawsuit in United States District Court for the Eastern District of Pennsylvania (School District of Philadelphia v. Pennsylvania Milk Marketing Board, 877 F. Supp. 245 (E.D. Pa. 1995)), which raised constitutional challenges to the milk pricing scheme. The federal district court ruled that “[a] creation of the state cannot challenge its maker’s decisions on constitutional grounds.” Id. at 251. It cited Pennsylvania appellate court case law and rulings of federal district courts applying Pennsylvania law to support the statement that “Pennsylvania courts have consistently ruled that a school district has no rights under the federal constitution to assert against the state.” Id. at 250.

      . In Community Options Inc. v. Board of Assessment, Appeals and Review, 764 A.2d 645 (Pa. Commw. 2000), alloc. granted, 567 Pa. 719-33, 786 A.2d 991 (2001), the taxing bodies raised challenges based on Article VIII of the Pennsylvania Constitution to provisions of Act 55 granting a tax exemption to institutions operating free from private profit motive which provide services government would otherwise be obligated to provide, where government funds are the sole source of the institution’s revenue. I ruled that these provisions did not violate the Pennsylvania Constitution. The Commonwealth Court reversed my decision. It ruled that I should not have considered whether the property qualified for a statutory exemption under Act 55 without first finding that the property met the constitutional definition of a “purely public charity” under the standards set forth in Hospital Utilization Project v. Commonwealth, supra, 507 Pa. 1, 487 A.2d 1306, and its progeny. In the Community Options litigation, the property owner never questioned the standing of the taxing bodies to raise constitutional challenges to Act 55.


author: PAPALINI, J.,

text:
    Mundy v. Lake Mountain Co.

      Marc Rosenberg, for plaintiffs.

      Hugh Emory, for defendants.
    November 23, 2001
   PAPALINI, J.,

Plaintiffs Eileen Mundy and Kenneth Mundy have filed an appeal of our order of July 13, 2001, granting defendants’ petition to transfer venue to Carbon County, Pennsylvania.

I. FACTUAL HISTORY

(1) On May 18, 2000, plaintiffs filed a complaint against defendants in the Court of Common Pleas of Philadelphia County, alleging that on February 19,1999, plaintiff Eileen Mundy was a business invitee at “Big Boulder” and Jack Frost Mountain in The Poconos, Carbon County, Pennsylvania. On that date, plaintiff was attempting to snowtube down a snowtubing chute, when one of defendants’ employees forcefully and negligently pushed her down the mountain, causing her snowtube to careen out of control and into a tree. She suffered serious bodily injuries.

(2) The defendants filed preliminary objections contesting jurisdiction in Philadelphia County. After discovery was taken establishing that the defendants did business in Philadelphia, Judge Quiñones Alejandro overruled the preliminary objections on November 10,2000.

(3) On April 4, 2001, defendants filed a petition to transfer venue to Carbon County on the basis of forum non conveniens.

(4) After reviewing the petition and plaintiffs’ answer thereto, on July 13, 2001, we granted the petition, and ordered the case transferred to Carbon County.

(5) Plaintiffs filed a motion for reconsideration. On July 30, 2001, we amended our order of July 13, 2001, to provide that the costs of transfer should be borne by defendant, but otherwise denied reconsideration.

(6) Plaintiffs filed a timely appeal.

II. DISCUSSION

We granted defendants’ motion to transfer venue on the basis of forum non conveniens.

Pa.R.C.P. 1006(d)(1) provides:

“For the convenience of parties and witnesses the court upon petition of any party may transfer an action to the appropriate court of any other county where the action could originally have been brought.”

We acknowledge that the plaintiffs’ choice of forum was required to be given great deference by us. Scola v. AC & S Inc., 540 Pa. 353, 657 A.2d 1234 (1995).

Moreover, the defendants had the burden of proving its challenge to the selected forum. Walker v. Ohio River Company, 416 Pa. 149, 205 A.2d 43 (1964); Shears v. Rigley, 424 Pa. Super. 559, 623 A.2d 821 (1993).

A transfer of venue was appropriate if defendants proved that the forum selected by plaintiffs, Philadelphia, was oppressive or vexatious to them. Cheeseman v. Lethal Exterminator Inc., 549 Pa. 200, 701 A.2d 156 (1997).

In the case at bar we considered the following factors:

(1) Plaintiffs are residents of Valley Stream, New York, near Long Island, which is located over 100 miles from Philadelphia.

(2) All of the defendants have their offices in Carbon County.

(3) The courthouse for Carbon County is in Jim Thorpe, which is 20 miles from the Big Boulder ski area, and the commute takes approximately 30 minutes.

(4) Philadelphia is approximately 100 miles from the ski area and the travel time, including Center City parking, is approximately five times longer, assuming no untoward morning delays on the Pennsylvania Turnpike (of which there are, in fact, many).

(5) The accident occurred in Carbon County.

(6) Plaintiff signed a “Snowtubing release from liability” in Carbon County. In that release she agreed “that all disputes arising under this contract and/or from [their] use of the facilities at Big Boulder ski area or Jack Frost ski area, shall be litigated exclusively in the Court of Common Pleas of Carbon County. .. .”

(7) In Churchill Corp. v. Third Century Inc., 396 Pa. Super. 314, 321-22, 578 A.2d 532, 536 (1990), the court said:

“A Pennsylvania court should decline to proceed with the cause when the parties have freely agreed that litigation shall be conducted in another forum and where such agreement is not unreasonable at the time of htigation.... An agreement is unreasonable where its enforcement would, under all circumstances existing at the time of litigation, seriously impair plaintiff’s ability to pursue its cause of action.”

(8) Except for the testimony of plaintiff, evidence, written and testimonial, regarding the release and the circumstances under which it was signed, and whether it was “freely agreed,” are in or about Carbon County.

(9) Only two potential witnesses live in the Philadelphia area: two of four members of the Big Boulder ski patrol who attended to plaintiff at the scene and transported her to the hospital, live in West Chester, PA.

(10) Plaintiff was initially treated at Geisinger Medical Center, located near Wilkes-Barre, PA.

(11) Plaintiff received no medical treatment thereafter in or near Philadelphia, PA.

(12) Plaintiff has alleged not just passive negligence but an active tort on the part of an unidentified employee of the defendants.

(13) Big Boulder has identified 22 employees who were working the tubing hill on the date in question, and a supervisor, all who may be called as witnesses. All reside in the vicinity of Big Boulder; none reside in Philadelphia or any surrounding county.

(14) Those employees would have to miss excessive periods from work if they had to travel to Philadelphia for the trial. They could be on-call to come to the courthouse in Jim Thorpe.

(15) All written reports and documents are in Carbon County.

(16) A view of the premises may be required.

We also found that plaintiffs offered no evidence that Philadelphia County would be a more convenient forum for anyone but their attorney. We concluded that trial in Philadelphia would be oppressive and vexatious to the defendants.

Accordingly, we properly granted defendants’ motion for a change of venue on the grounds of forum non conveniens and transferred the case to Carbon County.