author: THOMSON JR., P.J.,

text:
    Sichler v. General Accident Insurance Company of America

      C.P. of Pike County,
    no. 802-Civil-1995.

      Irwin P Schneider, for plaintiff.

      William P. Leeson, for defendant.
    November 24, 1999
   THOMSON JR., P.J.,

FINDINGS OF FACT

The plaintiffs were covered by an insurance policy provided by General Accident Insurance Company of America as of June 22,1993. The policy carried liability limits up to $300,000. On or about June 22,1993, plaintiff, George Sichler Jr., was involved in an automobile accident. The victim of the automobile accident filed a summons and complaint with this court on October 22, 1993. The Sichlers notified General Accident that they were served with a complaint through their insurance agent, NGL Insurance Group.

A copy of the summons and complaint was faxed to General Accident on November 5, 1993. Then on December 6, 1993, General Accident received a notice of default from NGL Insurance Group against the plaintiffs in this case. On January 31,1994, General Accident discovered that the default judgment was entered in the underlying case and then instructed defense counsel to defend the claim. Defense counsel retained by General Accident entered an appearance and filed a petition to open the default judgment on February 8,1994. The court entertained the petition and entered an order on March 23, 1994 denying the petition. The matter was appealed and denied.

CONCLUSIONS OF LAW

(1) In considering a motion for summary judgment, the court must examine the record in a light most favorable to nonmoving party, resolving all doubts as to the existence of genuine issue of material fact in favor of nonmoving party. Tom Morello Const. Co. v. Bridgeport Federal, 280 Pa. Super. 329, 421 A.2d 747 (1980).

(2) Under Pennsylvania law, insured need not show both ill will and recklessness to recover in bad faith for denial of claim; rather, degree of recklessness required to succeed on such claim and affect rises to level of improper purpose on the part of insurer. Klinger v. State Farm Mutual Auto Insurance, 895 F. Supp. 709. (M.D. Pa. 1995).

(3) Plaintiff must show that defendant did not have reasonable basis for denying benefits under the policy and that defendant knew or recklessly disregarded its lack of reasonable basis in denying the claim. Terletsky v. Prudential Property and Casualty Insurance Company, 431 Pa. Super. 108, 649 A.2d 680 (1994), allocatur denied, 540 Pa. 641, 659 A.2d 560 (1995).

(4) Recklessness had to rise to a more culpable level beyond gross negligence. Polselli v. Nationwide Mutual Fire Insurance Co., 23 F.3d 747 (1994).

(5) “Bad faith” on part of insurance company is any frivolous or unfounded refusal to pay proceeds of a policy; it is not necessary that refusal be fraudulent. Black’s Law Dictionary 7th ed. at 134.

DISCUSSION

The narrow question presented before this court to decide is whether the insurance company’s action or in this case inaction rose to the level needed to establish “bad faith.”

“Bad faith” on the part of an insurance company is any frivolous or unfounded refusal to pay proceeds of a policy; it is not necessary that the refusal be fraudulent. Furthermore, the insured need not show both ill will and recklessness to recover in a bad faith claim. Rather, the degree of recklessness required to succeed on such a claim and affect rise to improper purpose. Also, the plaintiff need only to show that defendant did not have a reasonable basis for denying the benefits under the policy, and that defendant knew or recklessly disregarded its lack of reasonable basis in denying the claim. The courts further hold that reckless behavior had to rise to a more culpable level beyond gross negligence.

In the present situation, the insurance company was supposed to represent their clients in defending against the underlying claim. This representation in defending against the underlying claim should be viewed as a benefit under the policy. The defendant became aware of the underlying claim on or about November 5, 1993, when it received a summons and complaint from this court. At this time, defendant took no action to defend against the claim for its clients. This at best can be seen as inadvertence, error or negligence. Again, on December 6,1993, defendant received a notice of a default judgment entered against its clients for the underlying claim. However, again they failed to take any action. This may be viewed as gross negligence. In fact, it was not until January 31, 1994 when defendant finally took action to defend against the underlying claim. They petitioned the court on February 8, 1994 to open the file and this was denied. Defendant’s behavior towards this petition underlying claim is well beyond gross negligence. In fact, there is genuine questions of material fact of when defendant first became aware of the underlying claim, and whether there was an improper purpose in not defending against underlying claim. When combining all of the above actions together, it is clear that only a jury can decide whether the defendant recklessly disregarded its duty to defend against the claim, and if this disregard rose to the level of improper purpose and beyond gross negligence, which proves bad faith.

ORDER

And now, November 24, 1999, upon consideration of defendant General Accident Insurance Company of America’s motion for summary judgment, briefs filed thereto, argument held thereon, the motion for summary judgment is hereby denied.


source: Caselaw Access Project

author: MOTT, J.,

license: Public Domain

text:
    Burchfield v. M.H.M. Partnership

      C.P. of Bradford County,
    no. 95CV000219.

      David B. Keeffe, for plaintiff.

      John M. Mulcahey, for defendants.
    September 24, 1999
   MOTT, J.,

This wrongful death and survival action was brought by the above named plaintiff as a result of an apartment building fire that occurred on February 15, 1994. The decedent died of carbon monoxide intoxication suffered during the fire. All the defendants have filed motions for summary judgment. The defendants claim that the plaintiff is not entitled to relief under either the wrongful death or survival portions of 42 Pa.C.S. §8301 et seq. (commonly and hereafter referred to as the Wrongful Death and Survival Act) or 20 Pa.C.S. §§3371-73.

A party may move for summary judgment after the relevant pleadings are closed, if, after the completion of discovery relevant to the motions, the party who bears the burden of proof at trial has failed to produce evidence essential to submit the case to a jury at trial. Pa.R.C.P. 1035.2. Our standard in determining whether to grant such a motion is well settled. We must resolve all doubts against the moving party and examine the record in a light most favorable to the non-moving party. Merriweather v. Philadelphia Newspapers Inc., 453 Pa. Super. 464, 471, 684 A.2d 137, 140 (1996). Summary judgment can only be granted in cases where it is clear and free from doubt that the moving party is entitled to judgment as a matter of law. Id.

First, we must consider the plaintiff’s claims for damages under the survival portion of the Wrongful Death and Survival Act. In a survival action, a decedent’s estate sues on behalf of the decedent, upon claims the decedent could have pursued but for her death. Frey v. Pennsylvania Electric Company, 414 Pa. Super. 535, 539, 607 A.2d 796, 798 (1992). The action is brought by the administrator of the estate in order to recover loss the estate suffered as a result of the tortious conduct of another. Kiser v. Schulte, 538 Pa. 219, 226, 648 A.2d 1, 4 (1994). In a survival action the personal representative of the estate may recover damages for the decedent’s pain and suffering, for the loss of the decedent’s gross earnings from the date of injury until death, and for the loss of the decedent’s future earnings for the period of the decedent’s life expectancy, less the probable costs of the decedent’s maintenance. Id. at 226-27, 648 A.2d at 4.

Initially, we note that where there is no evidence that the decedent was conscious at any time from the time of injury until the time of death, an award of damages for pain and suffering is unwarranted. Nye v. PennDOT, 331 Pa. Super. 209, 214, 480 A.2d 318, 321 (1984). In the present matter, the plaintiff and the defendants rely upon expert opinions in expressing their views regarding whether or not the decedent was conscious at any time from the time of injury until the time of death. The report of the defendants’ expert is included in the record, and in this report their expert concludes that the decedent “was with medical certainty unconscious and with very high probability (almost certainty), dead at the time the f[i]re broke out.” (Exhibit 1, p. 3, attached to defendants’ motion for summary judgment.) (emphasis added) The plaintiff, on the other hand, has not provided an expert report. The plaintiff simply states in an affidavit that his expert opines that carbon monoxide had produced unconsciousness “early on.” (Plaintiff’s affidavit, p. 4, attached to plaintiff’s submission in opposition to defendants’ motion for summary judgment.) Moreover, the plaintiff does not assert in this affidavit that even this limited opinion is held with the requisite degree of medical certainty. Pennsylvania Rule of Civil Procedure 1035.3 makes clear that the party opposing a motion for summary judgment may not rest upon the mere allegations and denials in his pleadings. Rather, he must identify evidence in the record controverting the evidence cited in support of the motion, or that establishes the cause of action that the motion asserts has not been made out. He may even supplement the record to do so. Here, the plaintiff did neither. He has not pointed to any evidence in the record, and he has not supplemented the record with any additional evidence after the motion for summary judgment was filed, which creates any doubt as to whether the decedent was conscious at any time from the time of injury until the time of death. Merriweather, supra at 464, 684 A.2d at 137. In face of the fact that the defendants have submitted an expert opinion expressed with medical certainty on this issue, and the fact that the plaintiff (who bears the burden of proof at trial) has failed to submit any expert opinion which actually contradicts the defendants’ expert, and which is rendered with the requisite degree of certainty, it is evident that the plaintiff has failed to produce evidence essential to submit this claim to a jury. Pa.R.C.P. 1035.2. Thus, we conclude that even viewing the evidence in a light most favorable to the plaintiff, there is no genuine issue of material fact concerning whether the decedent was conscious at any time from the time of injury until the time of death. Merriweather, supra at 464, 684 A.2d at 137. Therefore, the motion for summary judgment will be granted on the claim for the decedent’s pain and suffering.

We must now consider whether the plaintiff has produced evidence sufficient to require submission of the claim for the decedent’s loss of future earnings to a jury at trial. Pa.R.C.P. 1035.2. The record before us establishes that the decedent had not been employed since the 1960s. (Deposition of Romayne Ann Popadich, p. 7.) The decedent’s only source of income since the early 1970s was the receipt of alimony. (Deposition of Michael Burchfield, pp. 3,7,30-31.) The defendants, relying upon Slavin v. Gardner, 274 Pa. Super. 192, 195-96, 418 A.2d 361, 363 (1979) (quoting Smail v. Flock, 407 Pa. 148, 154, 180 A.2d 59, 61 (1962)), contend that these alimony receipts do not constitute earnings in that alimony is not the product of intellectual or bodily labor in a business or profession. The plaintiff, on the other hand, asserts that these alimony receipts make up the decedent’s earning power because the alimony represents the economic value of the decedent’s noneconomic contribution to the marriage as a homemaker, thereby equating to intellectual or bodily labor. We agree with the plaintiff. While we have found no appellate authority ruling on this precise issue, it is a well settled principle of family law that the contributions of a spouse as a homemaker have economic value in relation to the social and economic partnership of marriage, and that, in making equitable distribution in a divorce proceeding, a court must consider those contributions. Drake v. Drake, 555 Pa. 481, 493, 725 A.2d 717, 723 (1999); 23 Pa.C.S. §3502(a)(7). Furthermore, in a divorce proceeding alimony can only be awarded where the court finds that alimony is necessary, and, in making that determination, the court must consider the spouse’s contributions as a homemaker and whether she lacks sufficient property, including the property distributed to her in equitable distribution, to provide for her reasonable needs. 23 Pa.C.S. §3701(b) (12) and (16). Moreover, Pennsylvania law permits sources other than actual wages to be included in the calculation of loss of earning capacity. In Murdoch v. Commonwealth, 110 Pa. Commw. 74, 78, 531 A.2d 1164, 1166 (1987), the court ruled that social security and veteran benefits are products of intellectual and physical labor. See also, Krakar v. Don Stewart Trucking Inc., 323 F. Supp. 157, 159 (1971) (the court held that in accordance with Pennsylvania law, retirement pension and social security benefits may be introduced as evidence of loss of future earning power). Alimony receipts are similar in nature to these benefits. Thus, alimony receipts are a proper measure of damages in a survival action. We also find support for this conclusion in the following secondary source: “In the comparatively few cases in which the matter has been directly presented, the courts have uniformly held that the decedent’s income from a pension, retirement plan payments, social security benefits, and other receipts of like nature, were to be considered, along with other relevant factors, in substantially the same manner as actual earnings in the calculation of pecuniary loss for the purpose of determining the recovery.” 81 A.L.R.2d 949. (emphasis added) Thus, we rule that alimony receipts represent the decedent’s earning power, and, therefore, that a genuine issue of material fact exists concerning the loss of the decedent’s future earnings through the period of her life expectancy. As a result, summary judgment is not warranted on this claim.

Next, we must address the plaintiff’s claims for damages under the wrongful death portion of the Wrongful Death and Survival Act. In contrast to the survival action, the wrongful death action is not a decedent’s cause of action. Frey, supra at 539, 607 A.2d at 798. A wrongful death action may be brought only by specified relatives of a decedent to recover their own damages, and not as beneficiaries of the estate. Id. Wrongful death damages are established for the purpose of compensating the surviving spouse, children or parents of a decedent for pecuniary loss they have sustained as a result of the death of the decedent. Kiser, supra at 226, 648 A.2d at 4. This action is designed to deal with the economic effect of a decedent’s death upon these specified family members. Frey, supra at 540, 607 A.2d at 798. Damages recoverable in a wrongful death action include the present value of contributions the decedent would have rendered to the family had she lived, as well as funeral and"medical expenses. Kiser, supra at 226, 648 A.2d at 4.

We turn now to the defendants’ assertion that the plaintiff suffered no pecuniary loss as a result of the decedent’s death. We point out that the purpose of 42 Pa.C.S. §8301 is to compensate specified relatives (surviving spouse, children or parents) of a decedent for pecuniary loss they suffer as a result of the decedent’s death. One such loss is the deprivation of the part of the earnings of the decedent which those relatives would have received from her had she lived. Berry v. Titus, 346 Pa. Super. 376, 381, 499 A.2d 661, 664 (1985). Thus, a child bringing a wrongful death action is required to demonstrate that he suffered pecuniary loss. Id. (citing Manning v. Capelli, 270 Pa. Super. 207, 211, 411 A.2d 252, 255 (1979)). In the present matter, the plaintiff testified that his parents divorced when he was 7 years old. (Deposition of Michael Burchfield, p. 7.) After the divorce, and during his remaining minority years, the plaintiff lived with his father, and he was financially supported by his father only. (Id., pp. 7,12.) It is also evident from the record that the plaintiff has been financially independent throughout his adult life. (Id., pp. 12-14.) Additionally, the plaintiff has brought forth no evidence or documentation which demonstrates that the decedent provided any financial support to the plaintiff during his minority years subsequent to the divorce, or during his majority years. These facts fairly parallel the facts in Manning, in which the court held that an emancipated and financially independent adult child of the decedent, who had not lived with the decedent since she was eight months old, and who had never since that time received financial support from the decedent, was not entitled to share in the distribution of settlement proceeds of a wrongful death action because the said adult child had suffered no pecuniary loss. Manning, supra at 214, 411 A.2d at 256. The plaintiff in the matter before us is likewise an emancipated and financially independent adult child. The plaintiff, now 33 years of age, received no financial support from the decedent during his adult life, and hence, did not suffer any pecuniary loss in this regard as a result of the decedent’s death. Thus, no genuine issue of material fact exists upon the plaintiff’s claim for damages allegedly resulting from the loss of contributions to him from the decedent. Quite simply, the plaintiff has never received any part of those earnings in the past.

The plaintiff is also claiming pecuniary loss for the deprivation of the services of guidance, emotional support, love and companionship he asserts were present in his relationship with the decedent. (Plaintiff’s affidavit, pp. 1-2.) In Spangler v. Helm’s New York-Pittsburgh Motor Express, 396 Pa. 482, 485, 153 A.2d 490, 492 (1959), our Supreme Court held that such things as the loss of companionship, comfort, society, guidance, solace, and protection are recoverable damages in a wrongful death action. An adult, if damaged by such loss of services, may recover, as well as a minor. Gaydos v. Domabyl, 301 Pa. 523, 532, 152 A. 549, 553 (1930). The individual affected by such a death need not reside at the same home or under the same roof as the decedent. Id. at 529, 152 A. at 551. However, in order for pecuniary loss to result from such a deprivation of services, a child must have received such services from a parent with such reasonable frequency as to lead to an expectation of the future enjoyment of those services. Id. at 529, 152 A. at 551. Pecuniary loss has been defined to be the destruction of a reasonable expectation of pecuniary advantage to be received from the decedent. Id. at 530, 152 A. at 552. Looking at the record here, we note that the plaintiff stated during his testimony that the last time he saw the decedent was in either 1980 or 1981. (Deposition of Michael Burchfield, p. 12.) The plaintiff testified that, from the time he graduated from high school until the time of the fire, he had communicated with the decedent by phone and letter only. (Id., p. 13.) The plaintiff also stated that he only had phone contact with the decedent “on a sporadic basis.” (Plaintiff’s affidavit, p. 2.) Furthermore, the plaintiff testified that he did not attend the decedent’s funeral. (Deposition of Michael Burch-field, p. 21.) Thus, being ever mindful that we must resolve all doubts against the moving party and examine the record in a light most favorable to the nonmoving party, we, nevertheless, find that the plaintiff has failed to produce evidence sufficient to prove that he had actually received services from the decedent with such frequency as to lead to a reasonable expectation of the future enjoyment of those services. Merriweather, supra at 471, 684 A.2d at 140. As a consequence of this, and of his failure to establish his receipt of any contributions from the decedent’s income, the plaintiff has failed to produce evidence sufficient to establish that he has suffered any pecuniary loss as a result of the decedent’s death. Therefore, the evidence is insufficient to submit these claims to a jury at trial. Pa.R.C.P. 1035.2. As such, we must grant the defendants’ motion for summary judgment on these claims.

We must now entertain the plaintiff’s claim for damages resulting from the decedent’s funeral and estate administration expenses. Reasonable funeral and administration expenses of a decedent’s estate are a proper item of damages in a wrongful death action brought by the administrator of the estate. Pezzulli v. D’Ambrosia, 344 Pa. 643, 649, 26 A.2d 659, 662 (1942); 42 Pa.C.S. §8301(d); see Migias v. United States, 167 F. Supp. 482, 487 (1958). The plaintiff, who is the administrator of the decedent’s estate here, has set forth evidence which demonstrates that the decedent’s estate incurred expenses in connection with the decedent’s funeral and estate administration. Therefore, summary judgment is not warranted on this claim.

Finally, we must consider the claim for damages for medical expenses incurred. The plaintiff has not demonstrated that any medical expenses were incurred between the time of the decedent’s injury and her death. In fact, there is no dispute that the decedent did not survive the fire, and that her body was found in the apartment building after the fire was extinguished. Because no medical expenses were incurred, the decedent’s death had no economic effect upon the plaintiff in this regard. Frey, supra at 540, 607 A.2d at 798. Therefore, we find that there are no genuine issues of material fact on this claim. Thus, the defendants’ motion for summary judgment must be granted as it relates to this claim.

Accordingly, we enter the following:

ORDER

And now, September 24,1999, in accord with the opinion filed this date, the defendants’ motion for summary judgment is granted in part and denied in part as follows:

(1) The motion is granted on the claim for the decedent’s pain and suffering, on the claim for the plaintiff’s loss of financial support from the decedent, on the claim for the plaintiff’s loss of the decedent’s services, and on the claim for medical expenses. As a result, on those claims judgment is entered in favor of the defendants and against the plaintiff.

(2) In all other respects, the motion is denied.

      . Loss of the decedent’s gross earnings from the date of injury until death is not in issue here because there is no dispute that the decedent did not survive the fire and that her body was found in the apartment building after the fire was extinguished.

      . We point out that the issue of loss of future earnings is closely associated with additional issues here pertaining to longevity. After perusal of the record, it is apparent that the life expectancy of the decedent’s ex-husband and the life expectancy of the decedent form the basis for additional genuine issues of material fact that are in dispute.

      . The holding in Manning is based upon the Act of April 15,1851, P.L. 669, §19, as amended, 12 P.S. §1601, the Act of April 26, 1855, P.L. 309, §1, as amended, 12 P.S. §1602, and the Act of Mayl3,1927, P.L. 992, no. 480, § 1, as amended, 12 P.S. § 1604. The Wrongful Death and Survival Act, 42 Pa.C.S. §8301 et seq., is substantially a reenactment of these.

      . We note that granting summary judgment in favor of the defendants on this claim will not create a harsh result in that the issue of the loss of the decedent’s future earnings may be presented at trial under the survival action. A wrongful death action and a survival action are properly brought together; however, damages are cumulative and are not meant to overlap or result in duplication of damages. Kiser v. Schulte, 538 Pa. 219, 227, 648 A.2d 1, 4 (1994) (citing Pezzulli v. D’Ambrosia, 344 Pa. 643, 26 A.2d 659 (1942)).

      . The record indicates that the plaintiff graduated from high school in 1983, served in the U.S. Navy from 1984 to 1988, lived in New Jersey from 1989 to 1990, and lived in Florida from 1990 until the time of the fire.

      . The decedent’s funeral and administration expenses are included in schedule H (funeral expenses, administrative costs, miscellaneous expenses) as a deduction on the decedent’s inheritance tax return. (Exhibit A, attached to plaintiff’s submission in opposition to defendants’ motion for summary judgment.)


author: WETTICK, J.,

text:
    Hines v. Marcinik

      C.P. of Allegheny County,
    no. GD96-2637.

      R. Bruce Carlson, for plaintiffs.

      Leo Gerard Daly, for defendant McKeesport Housing Authority.
    October 18, 1999
   WETTICK, J.,

Plaintiffs’ first amended complaint raises a section 1983 claim against McKeesport Housing Authority. The Housing Authority’s preliminary objections seeking dismissal of this claim are the subject of this opinion and order of court.

Minor plaintiffs were allegedly harmed by exposure to lead-based paint while occupying leased premises owned and controlled by defendants other than the Housing Authority. The Housing Authority had no involvement with the property at the time plaintiffs entered into the lease and began occupying the premises.

Immediately prior to the tenancy of plaintiffs, the property was occupied by tenants for approximately two years under the section 8 rental program of the McKeesport Housing Authority. During the period that the property was leased under the section 8 program, the Housing Authority was obligated under federal legislation and implementing HUD regulations to inspect the premises for hazards from lead-based paint and to insure that the hazards were eliminated as far as practicable.

Plaintiffs contend that the defective paint surfaces to which plaintiffs were exposed existed at the time the section 8 tenants occupied the premises and that these conditions would have been eliminated if the Housing Authority had properly inspected the premises while they were occupied by the section 8 tenants. Plaintiffs contend that they are intended beneficiaries of the federal requirement of mandated inspections for defective paint surfaces. Consequently, they are entitled to bring a section 1983 action based on the Housing Authority’s failure to comply with these HUD regulations.

In the case of Wilson v. Bucci, 39 D.&C.4th 382, 147 P.L.J. 69 (1998), I ruled that violations of the Federal Lead-Based Paint Poisoning Prevention Act, the housing inspection provisions of section 8 of the United States Housing Act of 1937, 42 U.S.C. §1437f (Supp. 1998), and regulations promulgated under the authority of these two laws may be enforced through a private action for money damages brought under section 1983. In that case, the premises were occupied by plaintiffs pursuant to a section 8 lease.

In the present case, the issue raised by the Housing Authority’s preliminary objections is whether plaintiffs who were not participants in the section 8 program may bring an action under section 1983 for the Housing Authority’s alleged breach of its duty to inspect that occurred while the premises were part of the section 8 program.

In Wilson, I followed case law which held that section 8 tenants may bring a section 1983 action because the following criteria is met: Section 8 tenants are the intended beneficiaries of the legislation and implementing regulations. The legislation and implementing regulations impose requirements that are sufficiently specific to be within the competence of the judiciary to enforce. The legislation and implementing regulations create mandatory directives. There is not an explicit provision within the legislation forbidding recourse to section 1983. A private cause of action is not inconsistent with the regulatory scheme.

When I apply this criteria to the present case, I reach the same result. The only prong that may be different is whether tenants who do not occupy the premises pursuant to a section 8 lease are intended beneficiaries of the legislation and the implementing regulations.

As to this issue, I find to be persuasive the ruling of the Court of Appeals for the Third Circuit in Davis v. Philadelphia Housing Authority, 121 F.3d 92 (3d Cir. 1997). In that case, the Third Circuit addressed the same issue.

“These facts present us with the central question we must address: whether successor tenants, who move into an apartment that is no longer part of a federal housing program yet are injured as the result of an alleged breach of duty that occurred while the apartment was part of the program, are arguably within the class of persons that congress intended to benefit under the federal statute at issue. Put another way, are the Davis’s rights arguably within the ‘zone of interests’ intended to be protected by congress under the Lead Act?” Id. at 95. (footnote omitted)

The court held that successor tenants are beneficiaries of the legislation because the legislative history of the Lead Paint Act focused on the need for the permanent removal of lead-based paint hazards. The goal of the legislation was to ensure that children were not constantly exposed and re-exposed to harms associated with lead-based paint poisoning. The court said that two of the primary purposes of the Lead Paint Act are to permanently eliminate lead-based paint hazards from the nation’s housing and to protect America’s children from lead-based paint poisoning. Consequently, there was a close correlation between the interests of the successor tenants and the purposes intended to be served by the statutory provisions. Id. at 99-101.

The Housing Authority argues that the Davis opinion does not advance plaintiffs’ position. It relies upon the following language:

“When the question is whether any plaintiffs are entitled to relief under a statute which does not expressly provide the relief which is sought, the question is properly framed as whether a cause of action can be implied. The court must in that case decide whether a newly-fashioned remedial structure should be made available to a class of litigants not expressly entitled to relief under the statute.
“In contrast, when there already exists a cause of action prescribing a particular remedy for a defined class of persons and the question is simply whether a particular plaintiff is also entitled to that relief, the question is properly addressed as one of standing. In such a case, the inquiry focuses on whether the plaintiff is the proper person to press the claim.
“Id. [Bowman v. Wilson, 672 F.2d 1145,] at 1151 n. 10 [(3d Cir. 1982)]. (citations omitted) In the present action, the district court dismissed the Davis’s claim against the Housing Authority solely on its conclusion that the Davises did not have standing because their interests ‘are not consistent with the purposes implicit in the statute at issue.’ Davis, 1996 WL 377189, at *3 [(E.D. Pa. July 3, 1996)]. Accordingly, we need not reach the separate question of whether the Lead Act provides the Davises, as successor tenants, with a cause of action against the Housing Authority for its alleged breach of duties.” Davis, 121 F.3d at 94-95.

While I have some difficulty understanding this quoted section, I believe that the court is saying that because the lower court dismissed the case solely because of a lack of standing, it is not deciding whether any tenants, including section 8 tenants, may bring a lawsuit to recover damages under section 1983. It is only deciding whether or not a successor tenant is prevented from raising the section 1983 causes of action that a section 8 tenant may be permitted to raise.

Furthermore, even if the Davis case is addressing a narrower issue, I find to be persuasive the conclusions of the court that Congress intended that lead-based hazards be permanently removed in that period of time during which the property was part of a federally-funded housing program. Consequently, there is a close correlation between the interests of the successor tenants and the purposes to be served by the legislation and accompanying regulations referred to in my Wilson opinion. Consequently, I am extending the Wilson ruling to successor tenants injured as a result of breaches of duty that occurred while their leased premises were part of the section 8 program.

For these reasons, I enter the following order of court:

ORDER

On October 18,1999, it is hereby ordered that the preliminary objections of the McKeesport Housing Authority are overruled.


author: LOUGHRAN, P.J.,

text:
    Erie Insurance Exchange v. Stafford

      C.P. of Westmoreland County,
    no. 1803 of 1999.

      Dennis J. Slyman, for plaintiff.

      Dale S. Douglas and Claudia C. Nolf, for defendant.
    November 9, 1999
   LOUGHRAN, P.J.,

The parties have submitted to this court a declaratory judgment action for decision upon an issue as to whether the defendant, under the insurance policy in question, has limited or full tort coverage. The facts which have been stipulated to by the parties, are those that are contained in the complaint and admitted answer which can be summarized as follows:

(1) On October 16,1996, and for some period prior to that, the defendant, Juliet M. Stafford, who is an adult individual, resided with her boyfriend, Brian K. Kardos, at 521 Church Street, Herminie, Pennsylvania. The defendant and Brian K. Kardos were not married. Brian K. Kardos also resided with his parents in Hutchinson, Pennsylvania.

(2) While the defendant and Brian K. Kardos resided at the above referenced residence, there were two motor vehicles utilized by them while occupants of the residence referred to above. One vehicle was a 1990 Pontiac Sunbird; the other vehicle was a 1988 Chevy Corsica. Both vehicles were insured under an Allstate policy.

(3) The 1990 Pontiac Sunbird was owned solely by Brian K. Kardos, which automobile was covered by said Allstate policy with a limited tort selection.

(4) The 1988 Chevy Corsica was jointly owned by Brian K. Kardos and the defendant, Juliet M. Stafford, which vehicle was also insured under the same Allstate policy, in which that jointly owned vehicle was also covered with limited tort protection.

(5) While both vehicles were insured under the Allstate policy, the policy itself only listed Brian K. Kardos as the named insured, even though the jointly owned automobile of Brian K. Kardos and the defendant, Juliet M. Stafford, was listed as an insured vehicle under the Allstate policy, which had limited tort.

(6) Under the said Allstate auto policy, referred to above, both vehicles, namely the 1990 Pontiac Sunbird owned solely by Brian K. Kardos and the 1988 Chevy Corsica, co-owned by Brian K. Kardos and Juliet M. Stafford, were covered by limited tort election.

(7) On or about October 17,1996, the defendant, Juliet M. Stafford, was involved in a two-car automobile accident, in which she alleges to have suffered personal injuries and for which a separate action has been filed at no. 5770 of 1988, in the Court of Common Pleas of Westmoreland County, Pennsylvania. The other vehicle involved in that accident was insured by the Erie Insurance Exchange. At the time of the referred-to accident, the defendant, Juliet M. Stafford, was driving the 1990 Pontiac Sunbird, solely owned by Brian K. Kardos, which had limited tort coverage.

It is the argument of the plaintiff, Erie Insurance Exchange, that the defendant, Juliet M. Stafford, while not named as a “named insured” under the Allstate insurance policy, nevertheless, is an “insured” under the said policy, since she was an owner of a motor vehicle insured by the Allstate policy.

It is Erie Insurance Exchange’s contention that not being named as a “named insured,” does not alter the circumstances that the defendant, Juliet M. Stafford, is an “insured” under the Allstate policy in view of the fact that she is a co-owner of a vehicle insured by the Allstate Insurance Company and bound by the limited tort option.

The defendant did not make any election concerning tort options (or any other election) when the Allstate policy was purchased by Brian K. Kardos, Allstate’s named insured. Defendant contends that, due to the lack of a familial relationship between Allstate’s named insured and defendant, and because defendant made no elections under the Allstate policy at the time it was purchased by Brian K. Kardos, defendant is deemed to be covered by full tort.

The plaintiff herein asserts that this issue is governed by the provisions of the MVFRL as appear more fully in 75 Pa.C.S. § 1705(b)(2):

“Section 1705 Election of tort options
“(b) Application of tort options
“(2) The tort option elected by a named insured shall apply to all insureds under the private passenger motor vehicle policy who are not named insureds under another private passenger motor vehicle policy. In the case where more than one private passenger motor vehicle policy is applicable to an insured and the policies have conflicting tort options, the insured is bound by the tort option of the policy associated with the private passenger motor vehicle in which the insured is an occupant at the time of the accident if he is an insured on that policy and bound by the full tort option otherwise.”

The defendant contends that the defendant is not a named insured on the policy and is not an insured within the definition of the MyFRL, 75 Pa.C.S. §1705(f), which states:

“Section 1705 Election of tort options
“(f) Definitions. — As used in this section, the following words and phrases when used in this section shall have the meanings given to them in this subsection unless the context clearly indicates otherwise:
‘Insured. ’ Any individual residing in the household of the named insured who is:
“(1) a spouse or other relative of the named insured; or
“(2) a minor in the custody of either the named insured or relative of the named insured.
‘Named insured. ’ Any individual identified by name as an insured in a policy of private passenger motor vehicle insurance.”

It is clear that the policy does not identify the defendant by name as an insured. It is also clear that the defendant was neither a spouse nor relative of the named insured, Brian K. Kardos, and, accordingly, does not fall within the definitions of an insured under the MVFRL. As the defendant is not an insured by definition, section 1705(b) is not applicable. Accordingly, the defendant was not bound by the limited tort election of Brian K. Kardos and the defendant is therefore deemed to be covered by the full tort option.

Accordingly, an order will be entered declaring the defendant to be covered by the full tort option.

ORDER

And now, to wit, November 9,1999, after review and careful consideration of the within matter, it is hereby ordered, adjudged and decreed that the defendant, Juliet M. Stafford, is entitled to coverage under the full tort option in the above declaratory judgment action.


author: CHESLOCK, J.,

text:
    Nunez v. Meckes

      C.P. of Monroe County,
    no. 2617 Civil 1995.

      Thomas J. Foley, for plaintiff.

      Richard A. Polacheck, for defendant.

      Melissa Rudas, for additional defendant.
    October 15, 1999
   CHESLOCK, J.,

Plaintiffs commenced this action by filing a writ of summons on September 21, 1995 for injuries sustained as a result of an automobile collision. On October 30, 1995, plaintiffs filed a complaint. Defendant Claude Meckes filed an answer with new matter on March 15, 1996. On April 2,1996, plaintiffs filed a response to defendant’s answer and new matter. Plaintiffs filed a motion to compel punitive damages discovery on July 21, 1999 and a memorandum of law in support thereof on September 29,1999. Defendant filed a response to said motion on August 19, 1999 and an opposing brief on October 1,1999. On October 4,1999, oral argument was heard before this court.

On October 3,1993, the plaintiffs and defendant were involved in an automobile collision. Allegedly, the motor vehicle being operated by plaintiff, Javier Nunez, was stopped in order to make a left-hand turn. The motor vehicle operated by the defendant drove into the rear of plaintiffs’ vehicle. Defendant was charged with numerous violations of the Pennsylvania Motor Vehicle Code and pled guilty to the charge of driving while intoxicated (75 Pa.C.S. §3731(a)(4)) on April 24, 1994.

Plaintiffs had served punitive damages interrogatories and document requests upon the defendant. Defendant objected to such discovery because no court order has been issued pursuant to Pa.R.C.P. 4003.7. This motion to compel punitive damages discovery followed.

According to Rule 4003.1, “a party may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action . . . Pa.R.C.R 4003.1(a). Thus, the first issue this court must decide is whether punitive damages may be awarded for injuries caused by intoxicated drivers.

Punitive damages are for “torts that are committed willfully, maliciously, or so carelessly as to indicate wanton disregard of the rights of the party injured.” G.J.D. by G.J.D. v. Johnson, 552 Pa. 169, 713 A.2d 1127 (1998), quoting Thompson v. Swank, 317 Pa. 158, 159, 176 A.2d 211 (1934). The purpose of punitive damages is to deter and punish egregious behavior. G.J.D., 552 Pa. 169, 713 A.2d 1127. Under Pennsylvania law, punitive damages may be awarded for injuries caused by an intoxicated driver.

Here, the record reveals that the defendant was intoxicated at the time of the accident. Plaintiffs are entitled to bring a claim for punitive damages based on this fact. It logically follows that the plaintiffs are entitled to punitive damages discovery.

According to Rule 4003.7 of the Pennsylvania Rules of Civil Procedure, a party may obtain information concerning the wealth of a defendant in a punitive damages claim only upon order of court setting forth appropriate restrictions as to the time of the discovery, the scope of the discovery, and the dissemination of the material discovered. Pa.R.C.P. 4003.7.

Accordingly, we enter the following order:

ORDER

And now, October 15,1999, plaintiffs’ motion to compel punitive damages discovery is granted with the following restrictions:

(1) Defendant has 30 days to answer the discovery.

(2) Defendant must provide full and complete responses to the plaintiffs’ punitive damages interrogatories and document requests regarding financial worth.

(3) The information produced during such discovery is not to be disseminated to individuals or entities not directly involved with proceedings before this court.

      . Any reference to “the defendant” throughout this opinion refers to Claude M. Meckes only.

      . Defendant was charged with driving under the influence (75 Pa.C.S. §3731(a)(l) and (4)), careless driving (75 Pa.C.S. §3714) and driving at an unsafe speed (75 Pa.C.S. §3361). The charges relating to driving under the influence (75 Pa.C.S. §3731(a)(l) and (4)) were held over, and a criminal information was filed against defendant in the Court of Common Pleas of Monroe County.

      . Defendant also contends that plaintiffs’ motion should be denied because plaintiffs have failed to establish a record to substantiate a claim for punitive damages or to allow the introduction of blood alcohol content at the trial. This argument is without merit. “It is not ground for objection that the information sought will be inadmissible at the trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence.” Pa.R.C.P. 4003.1(b). At this point in the proceedings, we are simply deciding whether certain information is discoverable. Whether defendant’s blood alcohol content or other evidence of defendant’s intoxication is admissible at trial is an issue to be decided at a later date.

      . “Relevant evidence” is evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more or less probable than it would be without the evidence. Pa.R.E. 401.

      . In Focht v. Rabada, 217 Pa. Super. 35, 268 A.2d 157 (1970), the Pennsylvania Supreme Court held that evidence of driving while under the influence of intoxicating liquors may constitute a sufficient ground for allowing punitive damages under appropriate circumstances. In addition, a plaintiff is permitted to seek an award of punitive damages against the estate of a deceased tort-feasor who was intoxicated at the time of the motor vehicle accident when the conduct that is attempted to be deterred in others is driving while intoxicated. Schwab v. Bates, 12 D.&C.4th 162 (1991).


text:
    Hametz v. Schmitt

      C.P. of Monroe County,
    no. 2358 Civil 1999.

      Mark S. Love, for plaintiff.

      Kathleen A. Walsh, for defendant Schmitt.

      Jennifer Harlacher Sibum, for defendant estate.
    June 16, 1999
   CHESLOCK, J.,

Plaintiff commenced this action on March 19, 1999 by filing a complaint against defendant. On April 22, 1999, defendant filed preliminary objections to plaintiff’s complaint and praeciped the case for argument. Plaintiff filed a brief in opposition to the preliminary objections on April 29, 1999. Arguments were heard on June 7, 1999. We are now ready to dispose of this matter.

A demurrer is a preliminary objection asserting that the pleadings fail to set forth a cause of action upon which relief can be granted. Sutton v. Miller, 405 Pa. Super. 213, 592 A.2d 83 (1991). When considering a demurrer, the court must accept as true all well pleaded facts set forth in the complaint, as well as all reasonably deducible inferences. Lazor v. Milne, 346 Pa. Super. 177, 499 A.2d 369 (1985). A demurrer will only be granted when the complaint has clearly failed to state a claim upon which relief can be granted. Rutherfoord v. Presbyterian-University Hospital, 417 Pa. Super. 316, 612 A.2d 500 (1992). With these standards in mind, we shall now consider defendant’s preliminary objections in the nature of a demurrer.

Defendant argues that plaintiff’s claim for punitive damages should be dismissed in the nature of a demurrer. In the instant case, defendant contends that the actions of the deceased do not demonstrate an entitlement to punitive damages. Plaintiff asserts that sufficient facts have been pled to warrant a claim for punitive damages.

In Pennsylvania, “in order to impose punitive damages, the wrongful conduct must be outrageous.” Trotman v. Mecchella, 421 Pa. Super. 620, 625, 618 A.2d 982, 985 (1992). “Conduct is outrageous when it is ‘malicious, wanton, reckless, willful or oppressive.’ ” Id., quoting Rizzo v. Haines, 520 Pa. 484, 555 A.2d 58 (1989). “Such conduct must show the actor’s evil motive or reckless indifference to the rights of others.” Id., quoting Feld v. Merriam, 506 Pa. 383, 485 A.2d 742 (1984).

In Schwab v. Bates, 12 D.&C.4th 162 (1991), the court had to consider whether punitive damages should be assessed against the estate of the alleged deceased tort-fea-sor. Plaintiff was injured by defendant in an automobile accident. Defendant was intoxicated and subsequently died. “[R] eco very of [punitive] damages against the estate of a deceased defendant should be permitted if there are sound policy reasons to do so.” Id. at 163. The Schwab court held “that a plaintiff is permitted to seek an award of punitive damages against the estate of a deceased tort-feasor when the conduct that is attempted to be deterred in others is driving while intoxicated.” Schwab, 12 D.&C.4th at 168. The court permitted a claim for punitive damages in an “attempt to deter conduct that, if deterred, will without question save many innocent lives.” Id. at 167:

This court finds the reasoning enunciated in Schwab v. Bates persuasive. An imposition of punitive damages against the estate of a deceased tort-feasor could have a deterrent effect upon others. Plaintiff’s request for punitive damages is appropriate considering the allegations that the deceased defendant was intoxicated at the time of the accident and was traveling in plaintiff’s lane of travel. Defendant’s preliminary objection in the nature of a demurrer to the punitive damage claim is dismissed.

Accordingly, we enter the following order:

ORDER

And now, June 16, 1999, defendant’s preliminary objection in the nature of a demurrer is hereby dismissed. Defendant is directed to file a responsive pleading within 20 days of the date of this order.


author: LEVIN, J.,

text:
    Butler v. Provident Mutual Life Insurance Co.

      C.P. of Philadelphia County,
    no. 9901-0780.

      Kenneth A. Jacobsen and Bruce E. Gerstein, for plaintiffs.

      Laurence Z. Shiekman, for defendants.
    February 11, 1999
   LEVIN, J.,

Before this court are plaintiffs’ motion for preliminary injunction and all responses thereto. On February 1, 1999, the court heard argument on the merits of plaintiffs’ motion. For the reasons stated below, the court grants plaintiffs’ motion and enjoins defendants from filing any documents with the office of the secretary of the Commonwealth of Pennsylvania to effectuate Provident Mutual Insurance Company’s plan to convert from a mutual insurance company to a stock life insurance company and from taking any further action to implement the plan of conversion until after the court conducts a full hearing and issues an order to take such action.

INTRODUCTION

On January 11,1999, plaintiffs, policyholders in Provident Mutual Insurance Company, filed a class action complaint on behalf of themselves and all other Provident policyholders containing six counts and prayers for declaratory, injunctive and monetary relief. Plaintiffs’ complaint arises out of Provident’s plan to convert from a mutual insurer to a stock insurer. Under the plan, policyholders’ membership rights “will be exchanged for membership rights in Provident Mutual Holding Company” while policyholders’ contract rights will be held in the stock life insurance company. (Policyholder information statement at 12.)

Plaintiffs contend that the plan will harm them because they “lose their right to have their insurer operated solely for their benefit and to receive insurance at cost... [because] they will become customers of a stock company which seeks to maximize the profit it can make from policyholders for the benefit of its owners, the stockholders.” (Plaintiffs’ complaint at 10.) Plaintiffs additionally argue that their membership rights in the mutual holding company are worthless because the plan prohibits the mutual holding company from making any distributions or payments to policyholders. Most troubling to the plaintiffs, however, is that after the conversion, members no longer have an “exclusive claim” on the surplus of the company because it will be transferred to the stock life insurance company which is owned by the stockholders of the stock holding company rather than the policyholders. Thus, plaintiffs believe they are entitled to a proportionate share of the value of the company.

Specifically, plaintiffs claim that defendants (1) violated Pennsylvania’s corporate statutes because the statutes do not permit a mutual holding company; (2) breached their fiduciary duties because the plan entrenches and enriches the board of directors at the expense of adequately and fairly compensating policyholders for their interests; (3) violated Pennsylvania corporate statutes because the plan fails to provide to members who object to the plan the right to dissent and obtain fair value for their interests; and (4) breached their fiduciary and common-law duties of disclosure because the policy information statement contains material misrepresentations and omits material information and overall is misleading and deceptive.

Defendants respond by asserting that plaintiffs are not entitled to any proportional share of the value of the company because the policyholders own the assets mutually — not individually — and their interests are contingent — not present. Similarly, defendants argue that policyholders will be in the same position after conversion as they were before conversion. That is, policyholders will continue to have no ownership or other rights to the surplus, the right to vote for directors, and the right to receive policy dividends and death benefits. Defendants additionally argue that the plan is permitted by Pennsylvania’s Business Corporation Law and the Mutual Insurance Company Conversion Act and that the policyholder information statement fully and fairly discloses the nature and terms of the conversion so that policyholders can make a full and informed decision on whether to approve the plan.

After discussing the legal standard it will apply to plaintiffs’ motion, the court will address whether plaintiffs’ motion meets this standard.

DISCUSSION

A. Applicable Law

The court should grant plaintiffs’ motion if plaintiffs carry their burden to establish the following five elements: “(1) relief is necessary to prevent immediate and irreparable harm [which] cannot be compensated by damages; (2) greater injury will occur from denying the injunction than from granting it; (3) the injunction will restore the parties to the status quo as it existed [before] the alleged wrongful conduct; (4) the alleged wrongful conduct is manifest; and (5) [plaintiff’s] right to relief is clear.” Anglo-America Insurance Co. v. Molin, 547 Pa. 504, 513, 691 A.2d 929, 933 (1997); Cappiello v. Duca, 449 Pa. Super. 100, 105, 672 A.2d 1373, 1376 (1996).

“The primary purposes of a preliminary injunction are to preserve the status quo and prevent imminent and irreparable harm which might occur before the merits of the case can be determined.” Berger v. West Jefferson Hill School, 669 A.2d 1084, 1085 (Pa. Commw. 1995). (footnote omitted) Thus, “[a] preliminary injunction cannot serve as a judgment on the merits since by definition it is a temporary remedy granted until that time when the party’s dispute can be resolved.” In re Appeal of Little Britain, 651 A.2d 606, 611 (Pa. Commw. 1994). Finally, the grant or denial of a preliminary injunction has no effect on whether a final permanent injunction will ultimately be issued. Berger, 669 A.2d. at 1086.

B. Conclusions of Law

We conclude that preliminary injunction should issue because the policyholder information statement omits material information, fails to fully and fairly address whether the conversion is in the best interests of policyholders, is misleading on material facts and, taken as a whole, does not enable the policyholder to make an informed decision on whether to approve or disapprove the plan. Thus, we determine, preliminarily, that policyholders did not have sufficient information to make an informed vote when they approved the plan on February 9, 1999. Thus, the defendants should be enjoined from effectuating the plan because it is not the product of an informed policyholder vote.

Below, we identify a number of material omissions and partial disclosures and briefly explain why we believe they are material to a policyholder’s decision to approve or disapprove the plan. These omissions and partial disclosures include, but are not limited to, the following:

(1) Failure to disclose to policyholders that Morgan Stanley and/or PriceWaterhouse Coopers concluded that full demutualization was better for current policyholders than the partial conversion contemplated by the plan. This disclosure would provide the proper context for policyholders to evaluate the board’s conclusion that the conversion is in the “best interest of policyholders.”

(2) Failure to inform policyholders why Morgan Stanley was not asked to compare Provident’s plan with other demutualization alternatives in order to determine which was better from a point of view. Revealing this fact would enable policyholders to evaluate the basis of the board’s decision to approve the plan.

(3) Failure to fully describe the subscription rights that full demutualization gives to policyholders. Having ventured to explain full demutualization, the policy information statement should adequately explain what policyholders would receive under the alternatives to partial conversion and how that differs from what policyholders will receive from the plan. This allows policyholders to evaluate the board’s conclusion that the conversion is in the policyholders’ best interests.

(4) Failure to discuss the material factors Morgan Stanley relied on in reaching its opinion. Without this information, policyholders cannot sufficiently evaluate Morgan Stanley’s opinion.

(5) Failure to explain that Provident cannot be acquired in a hostile takeover. This disclosure would fully explain the degree of control policyholders have over Provident. The policyholder information statement emphasizes that policyholders will have overall control of the enterprise. But this statement is misleading because nominations of members for election to the board requires the greater of 7,500 members or 2.5 percent of the members of the corporation, a formidable task. This information is material because the policyholder information statement discloses that the policyholders’ ability to control the board of directors protects against the risks associated with the conversion.

Having identified some of the deficiencies of defendants’ disclosure, we will address the elements of a preliminary injunction.

1. Immediate and Irreparable Harm

Provident’s material omissions and misleading statements immediately and irreparably harmed the policyholders’ ability to make an informed vote. This harm cannot be compensated through damages because it is nearly impossible to quantify the harm associated with an uninformed vote. In addition, the court believes that an injunction is the best means to achieve full and fair disclosure.

2. Greater Injury

The balance of injury in this case tips precipitously toward the plaintiffs. Once the articles of incorporation are filed, plaintiffs effectively lose their ability to choose the structure of the company. This choice is important because, under the alternatives to the plan, plaintiffs could receive valuable subscription rights or cash payments in exchange for their membership interests. The defendants, by contrast, temporarily lose their ability to implement the plan. Furthermore, as stated in the policyholder information statement, Provident “has not formulated any plans at this time to raise capital.” While the court recognizes the monetary burden imposed upon the defendants by the delay, we are not persuaded that this harm outweighs the harm done to the plaintiffs. The court will decide, after a full hearing, whether to vacate the February 9 vote and require the defendants to redo and recirculate the policyholder information statement. However, at this juncture, we are not prepared to make such an order.

3.Status Quo

The injunction maintains the status quo because it does not annul the February 1, 1999 vote, or require the defendants to redo and recirculate the policyholder information statement. The injunction does not eviscerate Provident’s efforts at preparing and implementing the conversion. Instead, it delays the conversion’s consummation until the court can hold a full hearing.

4.Wrongful Conduct Is Manifest

As indicated by our description of the policyholder information statement’s deficiencies, Provident precluded policyholders from making an informed decision to approve or disapprove the plan.

5.Right to Relief Is Clear

Plaintiffs’ right to relief is clear because we have preliminarily determined that defendants breached their fiduciary duty to act in the policyholders’ best interests when they submitted to policyholders an information statement that does not enable the policyholder to make an informed vote. “Officers and directors shall be deemed to stand in a fiduciary relation to the corporation, and shall discharge the duties of their respective positions in good faith with that diligence, care and skill which ordinarily prudent men would exercise under similar circumstances.” Seaboard Industries Inc. v. Monaco, 442 Pa. 256, 261 n.1, 276 A.2d 305, 308 n.1 (1971) (quoting from Business Corporation Law, Act of May 5, 1933, P.L. 364, art. IV, section 408, as amended, 15 P.S. §1408 *Supp. 1970). In addition, it is “axiomatic that directors and officers of a corporation are jointly as well as severally liable for mismanagement, willful neglect or misconduct of corporate affairs_” Id. at 263,276 A.2d at 309. The directors owed a duty to the policyholders to disclose material information about the conversion so that the policyholders could make an informed decision. We have preliminarily determined that the directors and Provident failed in this regard and thus they should be enjoined from implementing the plan of conversion.

For the foregoing reasons, the court preliminarily enjoins the defendants from implementing the plan of conversion until a full hearing is held to address the court’s concerns about the policyholder information statement, and until the parties have a full opportunity to brief Provident’s transaction entitles policyholders to dissenters’ rights.

ORDER

And now, February 11, 1999, upon consideration of plaintiffs’ motion for preliminary injunction and all responses thereto, it is hereby ordered as follows:

Plaintiffs’ motion for preliminary injunction is granted.

Defendants are enjoined from filing any documents related to Provident Mutual Insurance Company’s plan of conversion with the office of the secretary of the Commonwealth of Pennsylvania and from taking any action to effectuate the plan of conversion until ordered by this court after a full hearing.

      . The six counts are: I. Fundamental unfairness; II. Unfair self-dealing; III. Failure to provide dissenters’ rights; IV. Failure to disclose dissenters’ rights; V. Violation of duty of disclosure; and VI. Misrepresentation.

      . Under Provident’s plan of conversion, Provident Mutual converts from a single mutual insurer corporation to three interrelated corporations. These three corporations are: (1) a holding company (entitled Provident Mutual Holding Company and purportedly a Pennsylvania nonstock corporation); (2) a stock corporation (entitled Provfirst American Corporation and purportedly a Pennsylvania stock corporation); and (3) a stock life insurance company (entitled Pmvfirst American Life Insurance Company and purportedly a Pennsylvania stock life insurance company).
      The stock corporation, Pmvfirst American Insurance Corporation, will own all the voting stock of the stock life insurance company, Provfirst American Life Insurance Company, thereby becoming a subsidiary of Provident Holding Company. The holding company will own at least a majority of the voting stock of the stock corporation. The minority voting authority of the stock corporation will be vested in the shareholders of Pmvfirst Life. (Policyholder information statement at 8.)

      . According to Provident, membership rights include the right to vote, and the right to any surplus which would remain after insolvency, winding-up or liquidation of Provident Mutual. (Id. at 12.)

      . Provident defines contract rights as the right to receive benefits as specified in members’ policies or contracts and the right to dividends. (Id.)

      . Plaintiffs allege that at the end of 1997, Provident had a statutory surplus of $374 million. (Plaintiffs’ complaint at ¶31.)

      . On February 9,1999, Provident policyholders voted overwhelmingly to approve the plan with 57,402 policyholders approving the plan, 6,834 voting against the plan and 38 abstaining.

      . The amount of proof plaintiffs must proffer to sustain their burden is unclear. Compare Wolf v. Baltimore, 250 Pa. Super. 230, 378 A.2d 911 (1977) (stating that plaintiff must demonstrate prima facie the elements of a preliminary injunction) with Three County Services Inc. v. Philadelphia Inquirer, 337 Pa. Super. 241, 246, 486 A.2d 997, 1000 (1985) (stating that “petitioner has a heavy burden of proof’).
      Appeals courts review a trial court’s decision to grant or deny a preliminary injunction under the standard of review of whether the trial court had “reasonable grounds” to support its decision to issue the injunction. School District of Wilkinsburg v. Wilkinsburg Education Association, 542 Pa. 335, 340, 667 A.2d 5, 7 (1995).

      . The same information should be divulged with respect to PriceWaterhouse Coopers LLP actuarial opinion.

      . Additionally, denying the injunction prevents the plaintiffs from possibly obtaining valuable dissenters’ rights. The court has not decided whether policyholders are entitled to dissenters’ rights. Preliminarily, we believe Provident’s plan qualifies as a share exchange under 15 Pa.C.S. §1931(d). Thus, plaintiffs may be entitled to dissenters’ rights under Pa.C.S. §1571 if they are not within the exception of section 1571(b)(2)(i). Because the parties have not fully briefed whether policyholders’ memberships are converted solely into the memberships of the new corporation, we are unable to rule whether plaintiffs are entitled to dissenters’ rights. This injunction gives the parties the right to fully brief this issue.


author: SALUS II, J.,

text:
    Skoogfors v. Haverstick-Borthwick Co.

      C.P. of Montgomery County,
    nos. 93-23217, 93-23226, 93-25271, 93-23272, 93-21683 and 94-17018.

      Steven E. Angstreich, for plaintiffs Spungen.

      Arthur Hankin, for plaintiffs Skoogfors.

      Michael O’Hayer, for defendant Haverstick-Borthwick.

      John Patrick Kelley, for defendant Facilities Resource Management.

      Ronald E. Hurst, for defendant Bryn Mawr.

      Steven G. Bardsley, for defendant With & Mactavish.

      Tracey M. McDevitt, for defendant Dugan Inc.

      Joseph F. Van Horn Jr., for dedenfant Frei and Sons.

      Joseph P. Connor III, for defendant McLeod Floors.

      January 13, 2000-
   SALUS II, J.,

SUMMARY

This is a motion in limine filed by the defendants to preclude evidence concerning medical diagnoses rendered by the plaintiffs’ expert, Michael LeWitt M.D. In these suits, the plaintiffs allege that they sustained a number of health problems as a result of their exposure to chemicals used during renovation work at Bryn Mawr College. The renovation work took place in the Great Hall in Thomas Library, commencing in December 1991 and concluding in May 1992. Following the alleged exposure, the plaintiffs sought medical attention from Dr. LeWitt, who diagnosed each plaintiff as having toxic chemical encephalopathy. Generally speaking, TCE refers to a pathologic or abnormal condition in the central nervous system that is associated with exposure to chemicals at toxic levels. In the defendants’ motion in limine, the defendants argue that Dr. LeWitt’s diagnoses and his methodology used in rendering his diagnoses are not generally accepted in the medical community. As such, the defendants argue that Dr. LeWitt should be precluded from testifying, and any causation evidence that is derived from Dr. LeWitt’s diagnoses should be barred. A hearing on the motion in limine was held before this court, commencing on December 6, 1999 and concluding on December 13, 1999. Based on evidence and testimony introduced at the hearing, this court concludes that Dr. LeWitt’s diagnoses of TCE, and any testimony or evidence based on these diagnoses, are not admissible at trial.

PENNSYLVANIA LAW ON SCIENTIFIC EXPERT TESTIMONY

At the outset, it is important to clarify the defendants’ objections to Dr. LeWitt’s diagnoses of TCE, and the role of the trial court in addressing these objections. As the plaintiffs point out, most of the defendants’ objections go to the credibility of Dr. LeWitt and the weight to be given to his testimony. Ordinarily, questions of credibility of a witness and the weight of his testimony are for the jury to resolve. See Foflygen v. Allegheny General Hospital, 723 A.2d 705, 711 (Pa. Super. 1999). Where evidence involves complex scientific testimony, however, most laypersons lack the required training to assess the validity of the testimony and underlying methodology. In addition, a scientific expert’s credentials can overcome a layperson’s willingness to scrutinize the expert’s testimony. Therefore, the Superior Court has held that scientific methodology and conclusions must be evaluated by the court to ensure that “what might appear ... to be science is not in fact speculation in disguise.” Blum v. Merrell Dow Pharmaceuticals Inc., 705 A.2d 1314, 1325 (Pa. Super. 1997), appeal granted, _ Pa. _,* 735 A.2d 1267 (1999). According to the Superior Court:

“The judge in considering admissibility does not decide whether the proposition or theories are true or false. Rather the judge as gatekeeper decides whether the expert is offering sufficiently reliable, solid, trustworthy science. The question is: is the science good enough to serve as the basis for the jury’s findings of fact, or is it dressed up to look good enough, but basically so untrustworthy that no finding of fact can properly be based upon it.” Blum, 705 A.2d at 1322.

In the instant case, the condition known as TCE, and the methodology involved in making its diagnosis, are subject to debate by allergists, immunologists, toxicologists, neurologists, psychiatrists and occupational physicians. First, many medical professionals disagree as to whether the basis of TCE is immunological, neurological or psychological. Second, medical experts disagree on whether TCE is synonymous with or distinct from other medical conditions and phenomena. Third, medical professionals disagree as to which professionals are qualified to make a diagnosis of TCE. Fourth, medical experts disagree as to the proper method for rendering a diagnosis of TCE. Based on the foregoing, this court cannot agree with the plaintiffs that the credibility and weight of Dr. LeWitt’s diagnoses of TCE should be within the sole province of the jury. Testimony by a qualified expert does not become admissible scientific evidence simply because it is uttered by that expert. See Blum, 705 A.2d at 1323. Since the evidence at issue is complex medical testimony, the admissibility of Dr. LeWitt’s testimony is governed by principles established in Blum. As a result, it is appropriate and necessary for this court to review causation evidence from Dr. LeWitt before it is put in front of the jury.

REVIEW OF DR. LeWITTS DIAGNOSES

In Blum, the Superior Court established a two prong analysis for determining whether scientific evidence of causation is admissible under Pennsylvania law. First, the proponent must show that the causal relationship is generally accepted in the medical community. Blum, 705 A.2d at 1322; see also, Checchio v. Frankford HospitalTorresdale Division, 717 A.2d 1058, 1060 (Pa. Super. 1998). Second, the proponent must show that the methodology used to reach the expert’s conclusions is accepted by the medical community as good science. Blum, 705 A.2d at 1322; see also, Checchio v. Frankford Hospital-Torresdale Division, 717 A.2d 1058, 1060 (Pa. Super. 1998). Following this analysis, this court has concluded that neither criteria is met in this case. Therefore, this court concludes that Dr. LeWitt’s diagnoses of TCE, and any evidence based on or related to his diagnoses, are inadmissible.

a. Causal Relationship Between the Plaintiffs’ Alleged Exposure and Their Symptoms

The plaintiffs have provided no evidence that the medical community currently accepts the existence of a causal relationship between their symptoms and the type of chemical exposure alleged to have taken place at Bryn Mawr College. First, there is no consensus in the medical community, as to whether TCE is even a disease, or a disease related to chemical exposure. Second, even if TCE is generally accepted as a disease related to chemical exposure, existing research on TCE does not support a causal relationship in this case. This court understands that some studies link chemical exposure to a condition known as TCE. Nevertheless, the implications of these studies are limited in scope — they do not imply that TCE may be caused by exposure to every known chemical or combination of chemicals. In this case, there is no literature before this court that shows a generally accepted causal relationship linking exposure to the combination of chemicals used at Bryn Mawr College with the plaintiffs’ symptoms. This is the relationship that needs to be established. It is not enough that the plaintiffs cite studies linking adverse health effects with human exposure to chemicals, without any attempt to contrast the conditions in those studies with the facts in the instant case. As a result, this court cannot admit Dr. LeWitt’s testimony or any evidence based on such testimony.

b. Methodology Used in Making Diagnoses of TEC

After a review of expert reports and expert testimony from both sides, this court concludes that the methodology used by Dr. LeWitt in rendering his diagnoses of TCE is not accepted by the medical community as good science. According to the reports and testimony introduced at the hearing, the proper diagnosis of TCE entails the review of: (1) objective evidence of toxic exposure, (2) objective physiological evidence of a disability or disease, and (3) a differential diagnosis to eliminate possible alternative causes of the symptoms. According to his own testimony, Dr. LeWitt rendered his diagnoses of TCE without any of the above elements. First, Dr. LeWitt did not have information on chemical dosage, which would enable him to determine whether the plaintiffs were exposed to chemicals at toxic levels. Second, Dr. LeWitt observed no physiological evidence of a disability or disease. Third, Dr. LeWitt did not complete a differential diagnosis that ruled out alternative causes of the plaintiffs’ symptoms.Dr. LeWitt’s failure to complete a differential diagnosis is of particular concern, since many facts were available to him that suggest alternative causes for the plaintiffs’ symptoms.

Dr. LeWitt’s diagnoses of TCE were based on two criteria: (1) “temporality,” which is the relationship between the time of the alleged exposure and the time when the symptoms occurred; and (2) “biological plausibility,” which is a reasonable theory or hypothesis that an exposure to something might cause a particular effect. In addition, Dr. LeWitt testified that he .used results from neuropsychological testing (NPT) to make his diagnoses of encephalopathy. This court is persuaded by the defendants’ experts that Dr. LeWitt’s methodology is not generally accepted as good science. According to Dr. Snyder, temporality and biological plausibility, without more, cannot serve as the basis for concluding causation. In addition, Dr. LeWitt has not properly established biological plausilbility. As stated earlier, Dr. LeWitt had no objective evidence of a toxic exposure and no objective physiological evidence of a neurologic disorder. Therefore, the only way Dr. LeWitt could hypothesize any causal relationship would be through complete speculation. Lastly, NPT is not generally accepted in the scientific community as a rehable method for diagnosing an encephalopathy when there is no other objective evidence of an encephalopathy. As a result, Dr. LeWitt’s diagnoses of TCE were based on a methodology that is not generally accepted by the scientific community as good science.

CONCLUSION

The trial judge must be careful not to trespass over the domain which our judicial system reserves exclusively for the fact-finder. Nevertheless, the trial judge must balance this caution with his or her duties as the gatekeeper of evidence. When the court is confronted with scientific or medical evidence, that evidence may stand firmly on good science, or it may be strung together by controversial principles and sketchy methodology. This court concludes that Dr. LeWitt’s diagnoses of TCE fall into the latter category. The condition known as TCE is subject to debate by medical experts who question whether it is even a bona fide disease. They debate whether the basis of TCE is neurological or psychological. Furthermore, the causal relationship specifically alleged in this case has not been supported by medical literature or any objective evidence of toxic exposure or neurologic damage. This court cannot allow the jury’s findings of fact to be supported by such evidence. Therefore, any evidence of Dr. LeWitt’s diagnoses of TCE, and any causation evidence that is based on his diagnoses, must be precluded.

ORDER

And now, January 13, 2000, based on the findings in this court’s opinion sur motion in limine, it is hereby ordered and decreed that the defendants’ motion in limine is granted. The plaintiffs and plaintiffs’ witnesses are precluded from arguing, making reference to, or testifying about any diagnosis of toxic chemical encephalopathy, toxic exposure, multiple chemical sensitivity, or any causal relationship that attributes one or more of the plaintiffs’ symptoms to chemical exposure.

      . Although the plaintiffs’ complaints vary, they generally claim to be hypersensitive to normal everyday levels of airborne substances, including vehicle exhaust, perfumes, aftershaves, paints, cleaning agents and scented products such as soaps, lotions, shampoos and cat litter. See e.g., deposition of Anne Skoogfors, 7/30/96, at 86-87, 99-100. This sensitivity allegedly causes various reactions, including heart palpitations, sore throats and fogginess. See e.g., deposition of Anne Skoogfors, 7/30/96, at 86, 102. In addition, the plaintiffs complain of chronic symptoms and suffering that includes headaches, blurred vision, shortness of breath, fatigue, memory loss, depression, lack of coordination, dizziness, mental anxiety, anguish, annoyance, inconvenience, humiliation, embarrassment, incapacity to perform usual daily activities, loss of life’s pleasures, and inability to live life as it was before the alleged injury. See e.g., complaint of Leif and Anne Skoogfors, filed 1/20/93, at 6.

      . Defendants’ motion in limine at 4.

      . In his discussion of TCE, Dr. Herman Staudenmayer, a psychologist, states in his report:
      “We don’t know what to call it.

        “It can’t be defined.
      “It can’t be diagnosed.
      “Responsible scientific disciplines tells [sic] us it does not qualify as a disease or as a syndrome.
      “It has no consistently identified biologic mechanism of action.
      “It is based on toxicological and physiological rationale that is implausible.
      “It is inconsistent with the laws of chemistry and physics.
      “For these reasons, it is best to think of ‘environmental illness,’ ‘multiple chemical sensitivity’ or ‘toxic chemical encephalopathy’ as a phenomenon rather than a disease.” Report of Herman Staudenmayer Ph.D. 8/31/98, at 5.
      In addition, Dr. Abba I. Terr, an allergist and immunologist, states in his report:
      “The term ‘toxic chemical encephalopathy’ used in this case is a synonym for ‘multiple chemical sensitivities....”
      “The MCS phenomenon has been extensively studied and critiqued by a number of clinical and scientific investigators in recent years. These investigations show that patients diagnosed with MCS do not suffer an organic illness, but in many, if not most, cases, the symptomatology is consistent with underlying psychiatric disease unrelated to chemical exposure. Several national medical specialty societies have published reviews and position statements to the effect that MCS is not a recognized disease and that the methods used in diagnosis are unscientific.” Report of Abba Terr M.D. 8/24/98, discussion paragraphs 7-8. (references omitted)

      . Dr. Jack W. Snyder states in his report:
      “Current biomedical literature does not offer a plausible, testable biologic theory, hypothesis, or mechanistic explanation by which inhalation of agents such as those found in Great Hall during the 1992 renovation could initiate cell processes that, in turn, could produce the plaintiffs’ persistent complaints or NPT results.” Report of Jack W. Snyder M.D., J.D., Ph.D. 7/28/98, paragraph (4)(a)(i). (emphasis added)
      In addition, Dr. Staudenmayer testified he was not aware of any studies documenting adverse chronic neurologic symptoms from a chemical exposure history as short as five and one half months..N.T. 12/9/99, at 39. The plaintiffs have failed to provide any literature to rebut these assertions.

      . Objective evidence of exposure includes evidence of inhalation, absorption or ingestion of the chemical in measurable quantities, as well as data regarding the dosage and duration of exposure. See report of Jack W. Snyder M.D., J.D., Ph.D. 7/28/98, paragraph 5; affidavit of Abba I. Terr M.D. 8/27/98, at 4.

      . Objective physiological evidence that supports a diagnosis of TCE includes evidence of ataxia, tremors, abnormalities of the electroencephalogram (EEG), hallucinations, involuntary eye movements, cerebral atrophy, impaired hearing, impaired speech, impaired vision, and structural abnormalities revealed by MRI scans. See report of Jack W. Snyder M.D., J.D., Ph.D. 7/28/98, paragraph 3(b).

      . Differential testing or diagnoses are procedures routinely used to rule out other physical or psychological causes of a patient’s symptoms. See report of Abba Terr M.D. 8/24/98, discussion paragraph 2; report of Herman Staudenmayer Ph.D. 8/31/98, at 6.

      . N.T. 12/8/99, at 35, 42. At the hearing, Dr. Terr testified, “neither I nor Dr. LeWitt nor anybody in the world as far as I know, actually knows what levels of chemicals were present there and whether these chemicals were present at a dose that would be capable of causing brain damage . . . .” N.T. 12/7/99, at 54. Since this information is lacking, Dr. Terr concluded that Dr. LeWitt’s diagnoses of TCE were unreliable. N.T. 12/7/99, at 53-54.

      . According to Dr. LeWitt, when he sent the plaintiffs to a neurologist for neurologic testing, the neurologist found no objective findings of neurologic injury in any of the plaintiffs. N.T. 12/8/99, at 60. Dr. LeWitt also ordered a physical examination for at least one patient, and the patient tested normally for vision, hearing and pulmonary function. N.T. 12/8/99, at 30-31. Despite these test results, Dr. LeWitt diagnosed the patient as having. TCE. N.T. 12/8/99, at 32.

      . N.T. 12/8/99, at 66. For example, Dr. LeWitt testified that he did not rule out the possibility that the plaintiffs’ symptoms were caused by endogenous depression. N.T. 12/8/99, at 66.

      . This court is troubled by a number of facts that suggest alternative causes of the plaintiffs’ symptoms. One plaintiff, Anne Skoogfors, had pre-existing psychiatric problems that were ongoing during Dr. LeWitt’s examination of her. N.T. 12/8/99, at 40. Based on a psychiatric consult ordered by Dr. LeWitt, Ms. Skoogfors was diagnosed with anxiety and depression N.T. 12/8/99, at 40. Dr. LeWitt did not testify with any certainty that he considered this when diagnosing Ms. Skoogfors with TCE. N.T. 12/8/99, at 40. Nevertheless, he testified that depression prompts patients to complain about problems with memory, concentration and ability to focus. N.T. 12/8/99, at 41. Another plaintiff, Allyn Bensing, was experiencing a marital breakup that started at or around the time of her alleged exposure. N.T. 12/10/99, at 19, 55. Prior to this breakup, Ms. Bensing had gone through two divorces, the second of which coincided with the death of her newborn child. N.T. 12/10/99, at 55-56. Dr. Frattaroli testified trial these experiences can be very serious psychological stressors. N.T. 12/10/99, at 56. Another plaintiff, Charlotte Love, was not employed or regularly present at Thomas Hall until after the renovation work was completed. N.T. 12/8/99, at 49-50. Renovation work was completed in May 1992. Ms. Love, however, did not start working at Thomas Hall until September 1992. N.T. 12/8/99, at 50. Since there is no evidence that solvents were used during Ms. Love’s employment at Thomas Hall, there are questions as to whether her symptoms are associated with chemical exposure. Lastly, there is evidence that some or all of the plaintiffs consulted each other and discussed their symptoms, raising the possibility that the symptoms stemmed from hysterical contagion or other psychological phenomena. N.T. 12/9/99, at 74. These facts suggest that the plaintiffs’ symptoms could be the result of psychological and/or psychiatric problems. Therefore, this court is not persuaded that psychological and psychiatric factors were sufficiently ruled out.

      . N.T. 12/8/99, at 61-62.

      . N.T. 12/8/99, at 72. According to Dr. LeWitt, he used the NPT results to make his diagnosis of an encephalopathy. N.T. 12/8/99, at 72. He further concluded that this encephalopathy was related to toxic exposure to chemicals based on the plaintiffs’ experiences at Thomas Hall. N.T. 12/8/99, at 72.

      . N.T. 12/6/99, at 32. According to Dr. Snyder, temporality and biological plausibility only make up part of a causation analysis. N.T. 12/6/99, at 14. There are a number of criteria that must be evaluated in order to establish causation in a particular case, including a dose-response relationship, evidence from animal studies and persistency of symptoms when the causal agents are removed. N.T. 12/6/99, at 18-23.

      . N.T. 12/6/99, at 35. According to Dr. Snyder, Dr. LeWitt has not offered any testable theory by which he could explain how the plaintiffs sustained injury to their central nervous systems. N.T. 12/6/99, at 35.

      . N.T. 12/6/99, at 52-54. The record indicates that the use of NPT results in diagnosing TCE is untrustworthy for a number of reasons. First, NPT procedure is not standardized and varies in every study, making it difficult to review literature in which NPT is used in cases of TCE. N.T. 12/6/99, at 53. In addition, NPT procedure and results are capable of being manipulated by both the test subject and the test administrator, as Dr. Lewitt himself indicated. N.T. 12/8/99, at 70. Lastly and most importantly, NPT results can be impacted by the presence of conditions unrelated to neurologic function such as psychiatric problems like anxiety and depression. N.T. 12/8/99, at 70, N.T. 12/9/99, at 92, 103-104. For these reasons, NPT has been accepted only as a confirmatory test for TCE and only when other objective evidence of TCE has been presented to the diagnostician. N.T. 12/6/99, at 54.