author: NEALON, J.,

text:
    Shala v. Ryan

      June 15, 2001
    C.P. of Lackawanna County,
    no. 98-CV-4049.

      John L. Jenkins and Carl J. Poveromo, for plaintiffs.

      Allan H. Starr, for defendants Ryan, Harrison and Hahn.

      Mark T. Perry, for defendants Adukaitis and Curry.

      David J. Felicio, for defendants Geisinger Medical Center and Penn State Geisinger Clinic.
   NEALON, J.,

Three of the Geisinger physician defendants in this medical malpractice case have presented a petition to transfer venue from Lackawanna County to Montour County based upon the doctrine of forum non conveniens. Since the petitioners have not met their Cheeseman burden of demonstrating that the plaintiffs’ chosen forum is oppressive or vexatious to the defendants, the request to transfer this action to Montour County pursuant to Pa.R.C.P. 1006(d)(1) will be denied.

I. FACTUAL BACKGROUND

Plaintiffs, Patrick F. Shala and Maureen Shala, commenced this wrongful death and survival action on August 25, 1998, against two Schuylkill County pediatricians, Bernard C. Adukaitis D.O. and Thomas A. Curry M.D., t/d/b/a Penn State Geisinger Pediatrics (formerly Schuylkill Pediatrics), and three Montour County physicians, Michael E. Ryan D.O., Reid Harrison M.D. and Thomas Hahn M.D., who were affiliated with the Geisinger and Penn State Geisinger medical centers and health systems, (referred to collectively as “Geisinger,”) which are also named as defendants. The Shalas, who are residents of Schuylkill County, maintain that their 8-year-old daughter, Megan, was treated by Dr. Adukaitis and Dr. Curry at their Schuylkill County clinics between July 10, 1996 and August 27, 1996, at which time they misdiagnosed Megan’s candidal pneumonia and sepsis as infectious mononucleosis. The Shalas further contend that Dr. Adukaitis and Dr. Curry referred Megan Shala to Geisinger in Danville where Drs. Ryan, Harrison and Hahn mistakenly treated her for juvenile rheumatoid arthritis and a urinary tract infection on August 9, 1996, and August 23, 1996. As a result of the defendants’ alleged failure to timely recognize and treat Megan Shala’s true medical condition, she died on August 28, 1996, from acute hemorrhagic candidal pneumonia and sepsis, hemorrhagic gastris with ulceration and candida colonization, hepatic steatosis and acute renal failure which were attributable to an underlying autoimmune disease. (See plaintiffs’ amended complaint, ¶¶23-44.)

After defendants’ prehminary objections to the original and amended complaints were ultimately resolved, (see docket entry nos. 31, 37-38, 41, 45-46), a scheduling conference was conducted before Judge Trish Corbett on January 5,2001, at which time various deadlines were imposed for the completion of discovery and exchange of expert reports. (Id., no. 50.) On January 12,2001, new defense counsel entered their appearance on behalf of Dr. Ryan, Dr. Harrison and Dr. Hahn. (Id., nos. 51-52.) Several weeks later, Dr. Adukaitis and Dr. Curry filed a petition to have this matter listed as a protracted case pursuant to Lacka. Cty. R.C.R 214.5, and on February 1, 2001, this action was designated as a protracted case. (Id., nos. 53-54.)

By notice dated February 7, 2001, the court administrator assigned this protracted case to the undersigned and scheduled a case management conference for March 30, 2001. At the conclusion of that conference, an order was entered scheduling this matter for trial on March 11, 2002, and establishing new deadlines for the completion of discovery and the filing of motions. On that same date, Drs. Ryan, Harrison and Hahn, filed the instant petition to transfer venue to Montour County under Pa.R.C.P. 1006(d)(1). (Id., nos. 61-63.)

The petitioners have presented the affidavits of Dr. Ryan and Dr. Hahn in support of their contention that venue should be transferred to Montour County for the convenience of the parties and witnesses. In their affidavits, Dr. Ryan and Dr. Hahn attest that they reside and practice medicine in Montour County and provided treatment to the decedent in that county only. Drs. Ryan and Hahn posit that they will be unable to fulfill their professional and administrative obligations with regard to patient care and education of residents if this matter is tried in Lackawanna County, but may partially attend to those responsibilities during trial recesses if this case is litigated in Montour County. (See petition to transfer venue, exhibits B and C, ¶¶3-9.) Dr. Ryan and Dr. Hahn further assert that “trial in Montour County could provide far easier access to evidence” since “the medical records, witnesses, policies, procedures and other evidence integral to [their] defense in this case are all located in Montour County.” (Id., ¶10.) Although the petitioners do not identify those pivotal witnesses by name or the hardship presented to them by testifying in Lackawanna County, Drs. Ryan and Hahn submit that “conducting this trial in Lackawanna County would cause extreme hardship for [them], [their] patients,... colleagues and ... medical residents with whom [they] work.” (Id., ¶12.)

The Shalas counter that Drs. Ryan, Harrison and Hahn have not met the heightened burden of proof articulated in Cheeseman v. Lethal Exterminator Inc., 549 Pa. 200, 701 A.2d 156 (1997), to successfully transfer venue under Rule 1006(d)(1). The Shalas note that all of the relevant records and documents are portable such that they would be as accessible in a Lackawanna County courtroom as they would be in Montour County. Additionally, the Shalas’ “counsel has agreed to travel to Montour County, Schuylkill County or any other county that any specific defendant may elect for any depositions, any other discovery matter or any other pretrial matters that could take place outside of Lackawanna County.” (See plaintiffs’ memorandum of law in opposition, pp. 8-9.) Last, inasmuch as this case is scheduled to commence trial in less than nine months, the Shalas maintain that they will be unduly prejudiced if the Montour County defendants’ petition is granted and a new and conceivably later trial date subsequently established by the transferee forum. Following the parties’ submission of their memoranda of law and the completion of oral argument on June 1,2001, this matter became ripe for disposition.

n. DISCUSSION

(A) Standard of Review

A trial court has considerable discretion in deciding whether to transfer venue based on forum non conveniens, and absent an abuse of discretion, its decision will not be disturbed on appeal. Kummer v. St. Joseph Regional Health Network, 2001 WL 614888, *1, ¶5 (Pa. Super. 2001); Cooper v. Nationwide Mutual Insurance Co., 761 A.2d 162, 164 (Pa. Super. 2000). An abuse of discretion occurs when the judge misapplies the law or exercises judgment in a manner that is manifestly unreasonable or the result of bias, prejudice or ill will. Hoose v. Jefferson Home Health Care Inc., 754 A.2d 1, 3 (Pa. Super. 2000); Johnson v. Henkels & McCoy Inc., 707 A.2d 237, 239 (Pa. Super. 1997). If the trial court does not hold the defendant to the proper burden, it commits the equivalent of an abuse of discretion. Kummer, supra at ¶5; Johns v. First Union Corp., 777 A.2d 489, 491 (Pa. Super. 2001).

(B) Forum Non Conveniens Standard

Pursuant to Pa.R.C.P. 2179(a)(2), a civil action may be brought against a corporation or similar entity in any county where it regularly conducts business. Since Geisinger maintains several medical facilities and clinics within Lackawanna County, see Osterholzer v. Penn State Geisinger Clinic, 100 Lacka. Jur. 89,90 n.1 (1998), venue is appropriate in this forum with regard to Geisinger. Moreover, Pa.R.C.P. 1006(c) provides that “[a]n action to enforce a joint or joint and several liability against two or more defendants,. .. may be brought against all defendants in any county in which the venue may be laid against any one of the defendants under the general rules [governing venue].” Hence, by virtue of Geisinger’s business activities in Lackawanna County, venue in this case is technically proper as to all defendants in this jurisdiction.

Nevertheless, Pa.R.C.P. 1006(d)(1) states that “[f]or 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.” A plaintiff’s choice of forum “is given great weight and a defendant has the burden in asserting a challenge to the plaintiff’s choice of venue.” Kummer, supra at ¶5. For that reason, the Supreme Court of Pennsylvania has reminded the lower courts “that the plaintiff’s choice of forum should rarely be disturbed by the grant of a Rule 1006(d)(1) petition.” Cheeseman, supra at 212, 701 A.2d at 162. Rather, a petition to transfer venue should be granted only if the defendant meets its burden of demonstrating, with detailed information on the record, that the plaintiff’s chosen forum is oppressive or vexatious to the defendant. Cheeseman, supra at 213, 701 A.2d at 162; Johns, supra a^5.

In Cheeseman, “the Supreme Court of Pennsylvania cited with approval its earlier holding in Scola [v. AC&S Inc., 540 Pa. 353, 657 A.2d 1234 (1995)], clarified its potentially misleading dicta in Okkerse v. Howe, 521 Pa. 509, 556 A.2d 827 (1989), and reaffirmed that Scola had reversed German v. AC&S Inc., 430 Pa. Super. 497, 635 A.2d 159 (1993), rev’d, 540 Pa. 353, 657 A.2d 1234 (1995), and overruled Incollingo v. McCarron, 416 Pa. Super. 419, 611 A.2d 287 (1992).” Osterholzer, 100 Lacka. Jur. at 92. In the process, the Cheeseman court “set a stringent standard which parties seeking transfer of venue on the basis of forum non conveniens must meet,” Rummer, supra at ¶7, and held: “the defendant may meet its burden of showing that the plaintiff’s choice of forum is vexatious to him by establishing with facts on the record that the plaintiff’s choice of forum was designed to harass the defendant, even at some inconvenience to the plaintiff himself, [citation omitted] Alternatively, the defendant may meet his burden by establishing on the record that trial in the chosen forum is oppressive to him; for instance, that trial in another county would provide easier access to witnesses or other sources of proof, or to the ability to conduct a view of premises involved in the dispute. But, we stress that the defendant must show more than that the chosen forum is merely inconvenient to him.” Cheeseman, supra (reversing the transfer of litigation from Philadelphia County to Bucks County even though all of the parties, fact witnesses and treating physicians resided in Bucks County and none of the tortious acts occurred in Philadelphia County).

Under the Cheeseman analysis, allegations by a defendant that no significant aspect of the case involves the chosen forum and that it would be more convenient to litigate the action in another jurisdiction are not sufficient to establish that the selected forum is “oppressive or vexatious.” Cooper, 761 A.2d at 165; Hoose, 754 A.2d at 4. Therefore, the trial court should not afford any weight to the fact that the plaintiff is a nonresident of the forum [s]he has chosen since “the issue of residency is irrelevant” to a petition to transfer venue. Cheeseman, supra at 212 n.6, 701 A.2d at 162 n.6. Nor may a court consider its own “private and public interest factors,” such as docket congestion and convenience to the court since “[t]he convenience to the court is not mentioned in Rule 1006(d)(1) and is not an appropriate consideration for a Rule 1006(d)(1) inquiry.” Id. at 212, 701 A.2d at 161; Johnson, 707 A.2d at 239.

In the wake of Cheeseman, the Superior Court has vacated several lower court holdings by concluding that the petitioners failed to demonstrate the level of oppressiveness necessary to warrant a transfer of venue. See e.g., Cooper, 761 A.2d at 166 (finding that trial court erred in transferring venue from Philadelphia County to Pike County and noting that “[wjhile this court does not doubt that litigating this case in Philadelphia County will be inconvenient for [defendant], mere inconvenience is insufficient to transfer venue from [plaintiff’s] chosen forum.”); Hoose, 754 A.2d at 5 (holding that lower court improperly transferred venue from Philadelphia County to Delaware County where the defendants resided and maintained their principal offices, the plaintiff had been treated, and his medical records were located and remarking that “we stress that there is a vast difference between a finding of inconvenience and one of oppressiveness”). In fact, there is only one reported case in which an appellate court has upheld a transfer of venue based upon the Cheeseman standard. See Dulaney v. Consolidated Rail Corp., 715 A.2d 1217, 1218-19 (Pa. Super. 1998) (court did not abuse its discretion in transferring action from Philadelphia County to Allegheny County since the accident occurred in Ohio, the plaintiff, his medical providers and all of the witnesses resided in Ohio, West Virginia or western Pennsylvania, and the plaintiff worked out of defendant’s Allegheny County office).

Although Drs. Ryan and Hahn do not contend that the Shalas’ choice of forum was designed to harass them, they do advance several arguments why Lackawanna County should be regarded as a vexatious situs for this trial. First, the petitioners assert “that there is no nexus to Lackawanna County in this case” such that “[t]he citizens of Lackawanna County have no interest in the present litigation” whereas, in contrast, “the citizens of Montour County have a strong public interest in litigating this case in Montour County” since the medical care at issue occurred there. (See defendants’ memorandum of law in support, p. 5.) However, the Supreme Court has previously held that “[cjlaims by the defendant in its petition that no significant aspect of the case involves the chosen forum ... do not amount to a showing that the chosen forum is oppressive or vexatious.” Cheeseman, supra at 214, 701 A.2d at 162. Compare Kummer, supra at ¶3 (Eakin, J., dissenting) (“[t]he more attenuated the nexus between venue and relevant happenings, the more inherent the vexatiousness.”). Thus, the fact that Lackawanna County does not have any connection with, or interest in, this case does not justify a transfer of venue.

Second, Dr. Ryan and Dr. Hahn aver that “they will have to travel extensively to get to the [Lackawanna County] courthouse” which will compromise their ability to perform their professional duties which, in turn, will result in extreme hardship for their patients, medical residents and colleagues. Although the petitioners do not quantify the “great distance” that they will be forced to travel, (see defendants’ memorandum of law in support, p. 5), internet resources reflect that it will take approximately one hour, 24 minutes for the Geisinger defendants to travel 74.6 miles to the Lackawanna County Courthouse while the Schuylkill County parties will be able to complete the same trip in one hour, 20 minutes. (See www.MapQuest.com;www.Expedia.com.) Unlike the defendants and witnesses in Dulaney, supra, Drs. Ryan and Hahn will not be required to travel more than 300 miles from one comer of the state (Allegheny County) to the other (Philadelphia County) in order to attend trial. Rather, their commute will be comparable to the 64 mile distance from Berks County to Philadelphia County which was found not to be oppressive in Kummer.

Moreover, if this action is transferred to Montour County, it will actually increase the Schuylkill County parties’ commute, albeit marginally, to one hour, 23 minutes since the Schuylkill County to Lackawanna County trip involves the use of interstate highways, while the Schuylkill County to Montour County excursion does not. (Id.) Additionally, with respect to the purported burden imposed upon the petitioners’ patients and residents by a Lackawanna County trial, the Superior Court has previously held that “it is the oppressiveness suffered by the witnesses, not their patients or clients, that must be demonstrated on the record to succeed in transferring venue of this case.” Hoose, 754 A.2d at 4. Accord, Cooper, 761 A.2d at 166.

As to the Geisinger physicians’ claims that a trial in Montour County will provide easier access to witnesses and other sources of proof, the petitioners have failed to identify those putative witnesses by name, nor have they described the proffered testimony to be provided by those witnesses. It is incumbent upon the party seeking a transfer of venue to “clearly specify the key witnesses to be called and [to] make a general statement of what their testimony will cover.” Petty v. Suburban General Hosp., 363 Pa. Super. 277, 285, 525 A.2d 1230, 1234 (1987). In Johnson, supra, the Superior Court concluded that a change of venue was not appropriate since the petitioners “did not provide the trial court with the names of any witnesses who would suffer hardship should trial continue in Philadelphia, nor any affidavits from these alleged witnesses attesting to that fact.” Johnson, 707 A.2d at 240. Accord Kummer, supra at ¶7. Furthermore, the Shalas’ counsel has agreed to conduct depositions and discovery in Montour and Schuylkill Counties, thereby mitigating any pretrial inconvenience to the defendants.

Literally translated, the Latin phrase “forum non conveniens” means “inconvenient forum.” See Kinney System Inc. v. Continental Insurance Co., 674 So.2d 86, 88 n.1 (Fla. 1996). However, in the post-Cheeseman era, only the most extreme instances of inconvenience will warrant the transfer of venue under Rule 1006(d)(1). The petitioners simply have not satisfied their burden of demonstrating, with detailed information on the record, that the Shalas’ choice of forum is oppressive or vexatious to the defendants. The trial of this case in Lackawanna County will also ensure that the litigants will be provided with prospective jurors who have no familiarity or association with the parties in this case. See Osterholzer, 100 Lacka. Jur. at 93-94 (noting “that Geisinger is the single largest employer in the proposed transferee forum, Montour County” and concluding that a trial in Lackawanna County will “obviate any possible compromise of [plaintiffs’] ability to fairly and effectively challenge Geisinger, its administration, policies and institutional conduct”). Consequently, the petition to transfer venue from Lackawanna County to Montour County will be denied.

ORDER

And now, June 15, 2001, upon consideration of the “petition to transfer venue pursuant to Pa.R.C.P. 1006(d)(1) of defendants, Michael E. Ryan D.O., Reid Harrison M.D. and Thomas Hahn M.D.,” the memoranda of law submitted by the parties, and the oral argument of counsel on June 1, 2001, and based upon the reasoning set forth in the foregoing memorandum, it is hereby ordered and decreed that the petition of defendants, Michael E. Ryan D.O., Reid Harrison M.D. and Thomas Hahn M.D., to transfer venue from Lackawanna County to Montour County is denied.

      . Dr. Harrison was a resident in training at Geisinger at the time he treated Megan Shala and reportedly is no longer associated with Geisinger. (See defendants’ memorandum of law in support of petition to transfer venue, p. 2 n.l.) Dr. Harrison has not produced an affidavit indicating whether it would be more burdensome for him to litigate this case in Lackawanna County as opposed to Montour County.

      . Based upon its clarification of the forum non conveniens standard in Cheeseman, the Supreme Court reversed a series of decisions in which the trial courts had transferred venue under Rule 1006(d)(1) and directed that those rulings be reconsidered in accordance with the revised criteria. See Johnson, 707 A.2d at 241 (Cirillo, P.J.E., concurring and dissenting) (collecting and citing 21 remanded cases); Osterholzer, 100 Lacka. Jur. at 93 n.2 (collecting and citing five additional remanded cases).

      . Even if the petitioners had produced more compelling evidence of inconvenience and hardship, their belated request to change venue would nevertheless be denied since the trial date is less than nine months away and a transfer of venue at this late stage could result in delay and prejudice to the litigants. See Graham v. Laidlaw Transit Inc., 44 D.&C.4th 493, 498 (Allegheny Cty. 2000) (although defendant demonstrated that plaintiff’s chosen forum was oppressive, a motion to transfer venue, which was filed six months before the scheduled trial date, was denied on the grounds that “[tjhese plaintiffs should not be made to suffer the likely delay resulting from transferring this case to Erie County when the trial of their case here in Allegheny County is nearly upon us.”).


source: Caselaw Access Project

author: BLACK, J.,

license: Public Domain

text:
    Maurer v. Wanamaker

      C.P. of Lehigh County,
    no. 99-C-3193.

      John N. Zervanos, for plaintiffs.

      Leigh C. McCardle, for defendant Wanamaker.

      July 31, 2001

      Paul E. Smith, for defendant Northwestern Lehigh School District.

      William J. Ferren, for defendant Shipwash.
   BLACK, J.,

ORDER

Now, July 25,2001, upon consideration of the motion of defendant Northwestern Lehigh School District for summary judgment and plaintiffs’ response thereto, and after oral argument, it is ordered that said motion is hereby granted, and summary judgment is entered in favor of defendant Northwestern Lehigh School District against plaintiffs.

OPINION

This opinion is submitted in support of my order of July 25, 2001, granting the motion of defendant Northwestern Lehigh School District for summary judgment in its favor. The school district contends in its motion that plaintiffs’ claims against the district are barred by the doctrine of governmental immunity under the Political Subdivision Tort Claims Act, 42 Pa.C.S. §8541, et seq. Although there are certain exceptions to the bar of governmental immunity under the Act, I have concluded that none of these exceptions applies in the instant case.

This is a wrongful death and survival action brought by the parents of Christopher Maurer, who suffered fatal injuries in an automobile accident on November 16,1998. The decedent was a passenger in an automobile operated by defendant Emily Ann Wanamaker along Holbens Valley Road in Lynn Township, Lehigh County, Pennsylvania. Wanamaker lost control of the vehicle she was operating, causing it to leave the roadway. Plaintiffs allege that their son’s death was caused by Wanamaker’s negligence in failing to maintain control over her vehicle and also by negligence on the part of defendant Kyle Reed Shipwash, who was the driver of another vehicle that had passed the Wanamaker vehicle shortly before the accident.

The decedent and both individual defendants were students at Northwestern Lehigh High School. At the time of the accident they were traveling from the high school to a home for senior citizens. Their purpose was to assist two other students, Michelle Striegel and Beth Zellner, who were passengers, in completion of their senior project. Completion of a senior project was a required part of the school curriculum. This particular project involved organizing a group to assist residents of the home in a recreational therapy session, including making crafts. To carry out the project Striegel and Zellner were responsible for arranging transportation to the senior citizen home.

Plaintiffs have joined Northwestern Lehigh School District as a co-defendant on theories of negligent entrustment and vicarious liability. In response to the school district’s claim of immunity from suit, plaintiffs argue that their causes of action fall within the exception to governmental immunity for tortious conduct in “[t]he operation of any motor vehicle in the possession or control of the local agency.” 42 Pa.C.S. §8542(b)(l).

THE LEGAL STANDARD

The standard for reviewing a summary judgment motion is well established.

“Summary judgment is appropriate only in those cases where the record clearly demonstrates that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. . . . The reviewing court must view the record in the light most favorable to the non-moving party, resolving all doubts as to the existence of a genuine issue of material fact against the moving party.” Basile v. H & R Block Inc., 563 Pa. 359, 365, 761 A.2d 1115, 1118 (2000). (citations omitted)

Under Pa.R.C.P. 1035.2, a party responding to a motion for summary judgment has a significant burden. If the record on which the motion is submitted does not contain sufficient evidence of facts essential to the non-moving party’s cause of action or defense, the non-moving party must produce such evidence by way of affidavit, admissions, answers to interrogatories or depositions. As the Pennsylvania Supreme Court stated in Ertel v. Patriot-News Co., 544 Pa. 93, 100, 101-102, 674 A.2d 1038, 1042 (1996), cert. denied, 519 U.S. 1008, 117 S.Ct. 512, 136 L.Ed.2d 401 (1996):

“Allowing non-moving parties to avoid summary judgment where they have no evidence to support an issue on which they bear the burden of proof runs contrary to the spirit of Rule 1035....
“Thus, we hold that a non-moving party must adduce sufficient evidence on an issue essential to his case and on which he bears the burden of proof such that a jury could return a verdict in his favor. Failure to adduce this evidence establishes that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law.”

THE SCHOOL DISTRICT’S IMMUNITY

It is undisputed that the school district is a “local agency” under the Act, and that as such it is generally immune from suit for negligence. 42 Pa.C.S. §8541. However, this immunity is not absolute. A local agency will be liable for negligent misconduct if the following three conditions are met: “(1) damages would be otherwise recoverable under common law or statute, 42 Pa.C.S. §8542(a)(l); (2) the injury was caused by the negligent act of the local agency or an employee acting within the scope of his official duties, 42 Pa.C.S. §8542(a)(2); and (3) the negligent act of the local agency falls within one of eight enumerated categories. 42 Pa.C.S. §8542(b).” White v. School District of Philadelphia, 553 Pa. 214, 217, 718 A.2d 778, 779 (1998). One of the eight enumerated categories allowing for liability is the motor vehicle exception referred to above.

Plaintiffs’ case against the school district fails to meet any of these three conditions as a matter of law. With regard to the first condition, the record does not support a finding that the school district was negligent in entrusting the student drivers, Wanamaker and Shipwash, with vehicles or in allowing them to drive. The district did not supply any vehicles to Wanamaker or Shipwash; these students operated automobiles provided by their own families. Both Wanamaker and Shipwash were licensed to drive by the Commonwealth of Pennsylvania, and nothing in the record suggests that the school district knew or should have known that they were incompetent drivers.

As for the claim of vicarious liability, it is basic tort law that a defendant cannot be held liable for the negligence of another on a theory of respondeat superior unless the tort-feasor was the defendant’s servant or employee acting within the scope of his employment. A master/servant or employ er/employee relationship exists where one party is engaged to act on behalf of another party, referred to as the principal; and the principal has the right to control the details of the agent’s performance. Here there is no evidence of such a relationship. Wanamaker and Shipwash were merely students of the school district. They were never engaged to act on behalf of the district. The students running the project, Striegel and Zellner, not the school district, were responsible for arranging transportation to the project location. Thus, there is no common law or statutory basis for the school district to be held vicariously liable for the alleged negligence of Wanamaker or Shipwash.

Plaintiffs have also failed to meet the second condition, namely that the accident was caused by the negligent act of the local agency or “an employee thereof acting within the scope of his office or duties____” 42 Pa.C.S. §8542(a)(2). An employee is defined in the Act as “[a]ny person who is acting or who has acted on behalf of a government unit whether on a permanent or temporary basis, whether compensated or not____” 42 Pa.C.S. §8501.

Plaintiffs contend that Wanamaker and Shipwash were acting on behalf of the school district while driving themselves and their fellow students from the school to the senior citizens home for the school-approved service project. However, although Striegel and Zellner had to complete the project as a curriculum requirement, all the students involved were acting for their own benefit, not for the benefit of the school district. A student does not become an employee or agent of the school district merely because he or she is traveling to classes or to other school-sponsored activities, whether the activities are required or not.

This was the conclusion reached by the Commonwealth Court in Capuzzi v. Heller, 125 Pa. Commw. 678, 687, 558 A.2d 596, 600 (1989). There a student was driving from his high school to a vocational school during school hours, when he engaged another student driver in an automobile race. During this race, the first student driver failed to stop for a red traffic light and collided with another vehicle, causing the death of the driver of this vehicle. A wrongful death and survival action was brought against the vocational school to which the students were driving, as well as both student drivers and others. The plaintiffs in Capuzzi advanced the same theories that plaintiffs are advancing here: first, that the school had negligently entrusted the two students with responsibility for driving themselves to the vocational school; and second, that at the time of the accident the students were agents of the school district such that the district could be held vicariously liable for their actions. The Commonwealth Court upheld the grant of summary judgment in favor of the vocational school on the basis of governmental immunity. The court concluded that neither the negligent entrustment claim nor the vicarious liability claim could proceed against the school because the students were not agents or employees of the school. The court stated:

“Appellants provide us with no appellate authority supporting the proposition that an employment relationship between a school and one of its students arises out of the mere fact that the student drives himself to school either with the school’s express permission or with its knowledge of his intent to do so and with acquiescence. In the absence of such authority we refuse to conclude that an employment relationship exists between the vo-tech school and that student under these circumstances.

“The real thrust of the appellants’ complaint as to the vo-tech school is that it was negligent in permitting incompetent and uninsured student drivers to drive themselves and other students to school. As previously noted, recovery under this theory of negligence is not permitted under the vehicle exception.” Capuzzi v. Heller, at 687, 558 A.2d at 600.

In a similar case, Davies v. Barnes, 94 Pa. Commw. 145, 503 A.2d 93 (1986), the Commonwealth Court also rejected a negligent supervision claim against a vocational school on the ground of governmental immunity. In that case a student was killed while a passenger in a vehicle driven by another student. The two students had taken a car from a shop class in which they were enrolled. The students had been working on the car as part of a class project. The family of the deceased student asserted a claim against the school on the theory that the school had failed to adequately supervise the student’s activities. The plaintiffs asserted that this claim was cognizable under either the motor vehicle or real property exceptions to governmental immunity. The Commonwealth Court declined to apply either exception, refusing to equate a student with an employee. The court stated:

“Clearly, in order for this section to be applicable to the case before us, there must be an allegation that the vehicle was operated by a school official. Since it is undisputed that the car in question was driven by a student at the time of the accident, we must reject appellants’ argument.” Davies, at 148, 503 A.2d at 95.

In the instant case plaintiffs argue that the school district received benefits from the students’ senior project in two ways. First, if its students do not meet curriculum requirements, which include the senior project, the school district could lose state funding. Second, the school district receives community goodwill from the project itself. These are collateral benefits, however. They do not create an agency relationship. There is no evidence that Wanamaker and Shipwash were motivated in any way by a desire either to prevent the school district from losing grant moneys or to improve the school’s goodwill in the community.

Under plaintiffs’ reasoning, any student who drives an automobile to school is acting on behalf of the school district because if the student did not attend class, he or she would not meet curriculum requirements and the school would then lose grant money as well as community goodwill. This line of reasoning is unrealistic. It confuses incidental benefits to the school with the actual motivations of the student drivers.

The fact that two of the student passengers were required to complete the project does not lead to a different conclusion. The “Project Introduction” prepared by the school district to explain the senior project requirement states that the development and implementation of the project “is designed to develop in each student or group of student, [sic] the ability to apply, analyze, synthesize and evaluate information and communicate significant knowledge and understanding of a topic.”

Thus, the school district itself in its materials acknowledges that a student’s participation in the program is for a student’s own benefit. The introduction does not mention anything about preserving state grants or creating goodwill in the community. The record does not support an inference that Wanamaker or Shipwash were acting on behalf of the school district by assisting other students in completing their required senior project.

Finally, plaintiffs have failed to meet the third condition, namely that the act of the local agency must fall within one of eight enumerated categories in 42 Pa.C.S. §8542(b). Plaintiffs rely on the motor vehicle exception, pursuant to which a local agency may be held liable for negligence in “[t]he operation of any motor vehicle in the possession or control of the local agency.” 42 Pa.C.S. §8542(b)(l). However, the vehicles operated by Wanamaker and Shipwash were not “in the possession or control of’ the school district. Therefore, the motor vehicle exception does not apply.

Our Supreme Court has held that exceptions to governmental immunity under 42 Pa.C.S. §8542(b) are to be construed narrowly. Thus, in White v. School District of Philadelphia, 553 Pa. 214, 218, 718 A.2d 778, 779 (1998), the court stated:

“Because the legislature expressed its clear intent to insulate political subdivisions from tort claims,... Pennsylvania courts must apply narrowly the exceptions to governmental immunity, including this ‘motor vehicle’ exception.” See also, Love v. City of Philadelphia, 518 Pa. 370, 373-74, 543 A.2d 531, 533 (1998); Mascaro v. Youth Study Center, 514 Pa. 351, 361, 523 A.2d 1118, 1123 (1987).

As noted above, Wanamaker and Shipwash were driving vehicles provided by their own families, not the school district. No teacher or employee of the school district was present in either of the vehicles. Thus, it is not possible to conclude that either of these vehicles was in the possession or control of the school district.

Plaintiffs argue that the school district had control over the development and implementation of senior projects in that students were required to meet with a faculty ad-visor on a regular basis to develop the project; the project was reviewed and approved by an advisory committee; and participating students were required to obtain parental permission slips and to submit the names of participating students, identifying those students who would act as drivers. Plaintiffs also argue that the district exercises control over student drivers by requiring students who desire to drive to school to obtain permission from the school and to abide by driving policies contained in the Student-Parent Handbook. This handbook provides;

“[Djriving a car to school is a privilege which will be withdrawn upon improper use of cars by students driving to school as stipulated in the signed application.”

The application referred to lists several bases for suspension of a student’s driving privileges, primarily because of improper actions on school property such as speeding or reckless driving or loitering.

However, although the district has the right to regulate the conduct of its students while they are on school property or while they are participating in school functions, this does not make the students into employees of the district. The Commonwealth of Pennsylvania issues drivers’ licenses and regulates the operation of motor vehicles on the streets and highways of the Commonwealth. But that does not make every licensed driver a Commonwealth employee.

The accident in this case occurred on a public road a substantial distance from the school, and no school employee was present. There is no evidence that the school district exercised control over the details of performance by the student drivers. Plaintiffs have not cited any legal authority requiring the school district to provide transportation to the project site. Since the concept of “control” as used in the motor vehicle exception is to be construed narrowly, there is simply no basis for me to conclude that the Wanamaker and Shipwash vehicles were in the control of the school district at the time of the accident.

In this case, as in Capuzzi, the students were driving recklessly from the high school to a destination approved by the school for a curriculum-related activity. In each case one of the automobiles ended up in an accident resulting in a death. Since the Commonwealth Court declined to impute liability to the school district in Capuzzi, I cannot impute liability to the school district in this case.

CONCLUSION

For the reasons stated, plaintiffs have not met any of the three requirements for the school district to be liable under the Political Subdivision Tort Claims Act. They have not established a viable claim for damages under common law or statute; they have not established that the accident resulted from a negligent act of the local agency or an employee acting within the scope of his official duties; and they have not established that the accident resulted from the operation of a motor vehicle in the possession or control of the school district. Therefore, the school district’s motion for summary judgment must be granted.

      . Plaintiffs’ response to motion of defendant Northwestern Lehigh School District for summary judgment, exhibit 4.

      . Plaintiffs’ response to motion of defendant Northwestern Lehigh School District for summary judgment, exhibit 15.


author: HERRON, J.,

text:
    Cohen v. McLafferty

      June 15, 2001

      Lawrence M. Stein, for plaintiffs.

      Michael Fishbein, for defendant.
   HERRON, J.,

Plaintiffs Craig A. Cohen and Lawrence M. Stein have filed a motion for summary judgment and a motion for sanctions. For the reasons set forth in this opinion, the court has granted the motion for summary judgment and denied the motion for sanctions.

BACKGROUND

The court has set forth the background in this matter twice previously in Cohen v. McLafferty, July 2000, no. 923 (C.P. Phila. Sept. 29, 2000) (Herron, J.), and McLafferty v. Cohen, September 2000, no. 3321 (C.P. Phila. May 10,2001) (Herron, J.). For the sake of brevity, we will now set forth only those facts relevant to the motions.

From May 1, 1993 until April 1, 1997, plaintiffs and defendant David P. McLafferty practiced law together as partners in the firm of McLafferty, Cohen & Stein. Complaint at ¶3; answer at ¶3. The terms of the partnership were set forth in a general partnership agreement dated May 1, 1993 and signed by the three parties. Motion for summary judgment at ¶¶2-3; defendant’s response at 1.

After the partnership’s dissolution in April 1997, the parties became embroiled in a dispute over the distribution of post-dissolution contingency fees. The first provision in the agreement that addresses this topic is paragraph 8.02(g)(iii):

“[Fjifty percent of the remaining balance [after the deduction of certain costs and expenses] shall be paid to the partnership to be distributed as partnership property by the liquidator as provided in paragraph 8.02(b) hereof and 50 percent of the remaining balance shall be paid directly to the handling attorney.” Plaintiffs’ summary judgment memorandum, exhibit A at ¶8.02(g)(iii).

Under paragraph 8.02(b), in turn, funds remaining after the repayment of creditors, loans and capital contributions were to be divided “in accordance with the partnership shares as set forth in paragraph 3.01 (a).” Id. at ¶8.02(b).

While agreeing that the handling attorney in question was entitled to an immediate 50 percent, the parties disputed the manner of allocation prescribed by paragraph 3.01(a), which reads as follows:

“(a) With respect to the profits or losses sustained in each fiscal year, the allocation of profits and losses shall be as follows:
Craig A. Cohen 33 1/3%
David P. McLafferty 33 1/3%
Lawrence M. Stein 33 l/3%”

Plaintiffs’ summary judgment memorandum, exhibit A at ^3.01(a). According to McLafferty, paragraph 3.01(a), when read in conjunction with the remainder of the agreement, dictates that the non-handling attorneys divide the second 50 percent between the two of them. Defendant’s response at 4. The plaintiffs dispute this interpretation, arguing that the second 50 percent should be divided among all three attorneys like other partnership profits. Motion for summary judgment at ¶17.

The plaintiffs have filed a motion for summary judgment, asking the court to find that their interpretation of the agreement is the correct one and to issue a declaratory judgment accordingly. In addition, the plaintiffs have filed a motion for sanctions. In this second motion, the plaintiffs contend that McLafferty’s preliminary objections to the plaintiffs’ complaint, which the court overruled in Cohen v. McLafferty, July 2000, no. 923 (C.P. Phila. Sept. 29, 2000) (Herron, J.), were filed in bad faith, warranting an award of attorneys’ fees.

DISCUSSION

Because the agreement unambiguously states how post-dissolution fees are to be divided, the plaintiffs are entitled to summary judgment. The motion for sanctions, however, is without merit and is denied.

I. The Agreement Is Unambiguous and the Plaintiffs ’ Motion for Summary Judgment Must Be Granted

If parties disagree as to the meaning of a contract’s terms, a court should attempt to interpret the contract using standard rules of interpretation. Banks Engineering Co. Inc. v. Polons, 561 Pa. 638, 644 n.4, 752 A.2d 883, 886 n.4 (2000). In general, “a clear and unambiguous contract provision must be given its plain meaning unless to do so would be contrary to a clearly expressed public policy.” Insurance Co. of Evanston v. Bowers, 758 A.2d 213, 220 (Pa. Super. 2000) (citing Antonovich v. Allstate Ins. Co., 507 Pa. 68, 76, 488 A.2d 571, 575 (1985)).

Under Pennsylvania law, a contract is ambiguous “when a contract provision is reasonably susceptible to more than one meaning,” West Conshohocken Restaurant Assocs. Inc. v. Flanigan, 737 A.2d 1245, 1248 (Pa. Super. 1999). (citation omitted) A court must not “distort the meaning of the language or resort to a strained contrivance in order to find an ambiguity.” Madison Construction Co. v. Harleysville Mutual Insurance Co., 557 Pa. 595, 606, 735 A.2d 100, 106 (1999) (citing Steuart v. McChesney, 498 Pa. 45, 53, 444 A.2d 659, 663 (1982)). See also, Tuthill v. Tuthill, 763 A.2d 417, 420 (Pa. Super. 2000) (“[t]he fact that the parties have different interpretations of a contract does not render the contract ambiguous”). If no ambiguities are found, the court may regard the interpretation of the contract as a question of law. Lapio v. Robbins, 729 A.2d 1229, 1232 (Pa. Super. 1999).

An examination of the agreement itself reveals no ambiguities as to the division of post-dissolution fees. The 50 percent of net fees not paid to the handling attorney is to be distributed “in accordance with the partnership shares as set forth in paragraph 3.01(a).” Plaintiffs’ summary judgment memorandum exhibit. A at ¶[8.02(b). Paragraph 3.01(a) states that each partner has a one-third share in the partnership. Id. at ^3.01(a). These provisions are not “reasonably susceptible to more than one meaning.” Thus, the terms of the agreement mandate that the 50 percent of net post-dissolution fees not paid immediately to the handling attorney be distributed to all three partners in one-third shares.

McLafferty contends that the agreement includes a latent ambiguity, which is defined as an ambiguity that “arise[s] from extraneous or collateral facts that render the meaning of a contract uncertain, although the contract language appears clear and unambiguous as written.” Sunbeam Corp. v. Liberty Mutual Insurance Co., 740 A.2d 1179, 1185 (Pa. Super. 1999). (citation omitted) According to McLafferty, the latent ambiguity in the agreement arises from the parties’ goal of equal treatment for all partners, which conflicts with the unequal division of fees put forward by the plaintiffs:

“The entire partnership agreement is based on equality and unanimity. However, plaintiffs would have this court believe that the plain meaning of the general partnership agreement is unambiguous and that the handling attorney should receive approximately 67 percent of any post-dissolution contingent fees and the two remaining attorneys should each receive approximately 16.6 percent. This is a very inequitable distribution with the handling attorney receiving a disproportionately large amount of the fee. This construction is latently ambiguous and the defendant should be allowed to advance his parol evidence that the true intention of the parties was to have 50 percent go to the handling attorney and the remaining 50 percent be divided equally among the remaining two partners.” Defendant’s summary judgment memorandum at 6.

In support of this broad objective of partner equality, the defendant highlights six provisions of the agreement in which all partners were treated equally. Id. at 7.

Even if McLafferty states the parties’ intention of equality accurately, it does not create a latent ambiguity in the agreement. It is clear that the parties intended for the handling attorney to be accorded some special financial consideration for managing cases. Indeed, Mc-Lafferty’s own proposed distribution scheme includes its own inequality, as the handling attorney would receive 50 percent of fees while the two. other partners would receive only 25 percent each. As a result, there is no ambiguity in the agreement and the court adopts the plaintiffs ’ interpretation of the post-dissolution fees provision as its own.

II. Because the Plaintiffs Cannot Show That McLafferty Filed the Objections in Bad Faith, the Motion for Sanctions Must Be Denied

In their motion for sanctions, the plaintiffs argue that they are entitled to attorneys’ fees and costs because the objections, ruled on nearly nine months ago, constituted a “bad faith abuse of process.” Motion for sanctions at ¶12. Under 42 Pa.C.S. §2503(9), a litigant is entitled to counsel fees if “the conduct of another party in commencing the matter or otherwise was arbitrary, vexatious or in bad faith.” Each of these terms has been narrowly defined as follows:

“An opponent’s conduct has been deemed to be ‘arbitrary’ within the meaning of the statute if such conduct is based on random or convenient selection or choice rather than on reason or nature. An opponent also can be deemed to have brought suit ‘vexatiously’ if he filed the suit without sufficient grounds in either law or in fact and if the suit served the sole purpose of causing annoyance. Finally, an opponent can be charged with filing a lawsuit in ‘bad faith’ if he filed the suit for purposes of fraud, dishonesty, or corruption. By imposing these strict definitional guidelines, the statute serves not to punish all those who initiate legal actions which are not ultimately successful or which may seek to develop novel theories in the law. Such a rule would have an unnecessarily chilling effect on the right to bring suit for real legal harms suffered. Rather, the statute focuses attention on the conduct of the party from whom attorney’s fees are sought and on the relative merits of that party’s claims.” Thunberg v. Strause, 545 Pa. 607, 615-16, 682 A.2d 295, 299-300 (1996). (citations omitted) (emphasis added) See also, Township of South Strabane v. Piecknick, 546 Pa. 551, 559-60, 686 A.2d 1297, 1301 (1996) (“[w]e do not believe the intent of the rule permitting the recovery of counsel fees is to penalize all those who do not prevail in an action”).

The plaintiffs contend that McLafferty’s bad faith in filing the objections can be inferred from the flawed nature of the objections themselves. In the objections, McLafferty asserted the following:

“McLafferty was a resident of Montgomery County and had not been served by the sheriff of that county, making personal service on him in Philadelphia ineffective.

“The Philadelphia Court of Common Pleas did not have personal jurisdiction over McLafferty because he was not a resident of Philadelphia and no event giving rise to the plaintiffs’ cause of action took place in Philadelphia.

“The court did not have equitable jurisdiction in this matter because the plaintiffs had other ‘equitable remedies at law’ available to them.”

McLafferty did not cite a single case in his supporting memorandum and relied exclusively on the bare language of four Pennsylvania Rules of Civil Procedure.

In overruling the objections in Cohen v. McLafferty, July 2000, no. 923 (C.P. Phila. Sept. 29, 2000) (Herron, J.), the court characterized McLafferty’s arguments as “baseless,” “frivolous,” and “preposterous.” Slip op. at 4, 7. The court stands by its earlier assessment. It cannot, however, conclude that McLafferty’s actions were rooted in fraud, dishonesty, or corruption, as is required to award attorneys’ fees for bad faith conduct. Cf. Miller v. Nelson, 768 A.2d 858, 861-62 (Pa. Super. 2001) (affinning award of attorneys’ fees where plaintiff was advised repeatedly that his lawsuit was barred by the doctrine of immunity and that his suit had no legal basis or possible chance of success but engaged in a “relentless legal crusade” in pursuit of his claims); In re Estate of Liscio, 432 Pa. Super. 440, 447, 638 A.2d 1019, 1022 (1994) (affirming award of attorneys’ fees for bad faith because the offending party’s claim had “no reasonable possibility of success, coupled with her prolonging litigation and unnecessarily delaying distribution of the estate, as well as costing the estate thousands of dollars in attorney fees”). As a result, the plaintiffs’ motion for sanctions is denied.

CONCLUSION

The plaintiffs’ motion for summary judgment is granted, while their motion for sanctions is denied.

ORDER

And now, June 15,2001, upon consideration of plaintiffs Craig A. Cohen and Lawrence M. Stein’s motion for summary judgment and motion for sanctions, defendant David P. McLafferty’s responses thereto, the respective memoranda, all other matters of record, and in accordance with the memorandum opinion being filed contemporaneously with this order, it is hereby ordered and decreed as follows:

(1) The motion for summary judgment is granted;

(2) In furtherance of the liquidation of the partnership McLafferty, Cohen & Stein, any and all contingent fees received after the termination of the partnership on April 1,1997, shall be treated in accord with paragraphs 3.01, 8.02(b) and 8.02(g) of the partnership agreement;

(3) The post-dissolution handling attorney shall receive 50 percent of the net recovery proceeds;

(4) The remaining 50 percent of the net recovery proceeds shall be treated as partnership property and divided equally among McLafferty, Cohen and Stein pursuant to paragraphs 8.02(b)(v) and 3.01; and

(5) The motion for sanctions is denied.

      . Making specific citations to the motion and McLafferty’s answer thereto for background purposes is complicated by McLafferty’s ongoing aversion to filing answers to the plaintiffs’ motions.

      . Opinion available at http://courts.phila.gov/cpcvtcomp.htm.

      . Opinion available at http://courts.phila.gov/cpcvtcomp.htm.

      . Whether a contract is ambiguous is a question of law to be determined by the court. Juniata Valley Bank v. Martin Oil Co., 736 A.2d 650, 662 (Pa. Super. 1999) (citing Hutchinson v. Sunbeam Coal Corp., 513 Pa. 192, 200-202, 519 A.2d 385, 390 (1986)).

      . McLafferty concedes that paragraph 3.01(a) directs equal distributions to all three partners. See defendant’s summary judgment memorandum at 7 (“paragraph 3.01(a) provides that each partner shall have an equal 33 1/3 percent share in the profits and losses of the partnership”).

      . Conversely, “[ajmbiguities may be patent, appearing on the face of a contract and arising from defective, obscure, or insensible language.” Sunbeam Corp., 740 A.2d at 1185. (citation omitted)

      . These provisions are paragraph 2.2 (limitations on loan liability); paragraph 3.01(a) (division of partnership profits and losses); paragraph 4.01 (contributions for partnership losses); paragraph 4.04(a) (unanimity of consent for decisions requiring partnership approval); paragraph 8.02 (equal division of liquidator fees); and paragraph 8.02(b) (equal division of partnership assets upon winding up).

      . The aim of section 2503(9) “is to sanction those who knowingly raise, in bad faith, frivolous claims which have no reasonable possibility of success, for the purpose of harassing, obstructing or delaying the opposing party.” In re Estate of Liscio, 432 Pa. Super. 440, 446, 638 A.2d 1019, 1022 (1994).

      . The definition of “bad faith” stated in Thunberg applies to all of a litigant’s actions and not only the initiation of a lawsuit. Pennsylvania State Police, Bureau of Liquor Control Enforcement v. Benny Enterprises Inc., 669 A.2d 1018, 1022 (Pa. Commw. 1995) (citing Springfield Township v. Gonzales, 158 Pa. Commw. 664, 632 A.2d 1353 (1993)).

      . Nowhere in the objections did McLafferty dispute the plaintiffs’ contention that he had been served personally in Philadelphia County in compliance with the rales governing service. In addition, McLafferty did not file a motion for reconsideration of the objections. In his response to the motion for sanctions, however, McLafferty now asserts that he was not personally served. Defendant’s response to motion for sanctions at 1.

      . This argument was distinct from McLafferty’s argument challenging venue.

      . Opinion available at http://courts.phila.gov/cpcvtcomp.htm.


author: NALITZ, J.,

text:
    Allied Electrical Supply Co. v. Roberts

      C.P. of Greene County,
    A.D. no. 182, 2000.

      August 16, 2001

      Stephen Backer, for plaintiff.

      Paul Walsh, for defendant.
   NALITZ, J.,

Plaintiff has requested post-trial relief from the verdict of the jury. It raises two issues, but because of our disposition of the first we need not consider the second. Plaintiff argues that it was error not to declare a mistrial when the issue of insurance was injected into the trial. For the reasons set forth below, we agree. Plaintiff is Allied Electrical Supply Company, hereinafter known as Allied, and the defendant is Craig T. Roberts, i/a/t/a Greene County Pottery Works, hereinafter known as Roberts. Allied and Roberts each rented approximately one-half of a commercial building on East High Street in Waynesburg, Pennsylvania. On March 18, 1998, after Allied’s normal business hours, but while Roberts was still in his shop, a fire broke out in the building. The fire trapped Roberts in the rear of his store in a room with an outside door which was locked. Fortunately, passersby noticed the smoke and heard Roberts’ calls for help, and were able to break open the door and extricate him. The building was a total loss. Allied, or its subrogee insurer, brought suit against Roberts for loss of inventory and for the loss caused by the interruption of its business. The parties stipulated as to damages and the matter came to be heard by a jury on the issue of liability only.

On the morning of the second day of this two-day trial, counsel for Roberts called one Fred Simpson. Mr. Simpson occupied a unique position. He was apparently the last customer to call at the Pottery Works that day, at about 4:30 p.m., and was also one of the firefighters who responded to the emergency call at about 6 p.m. He was on the first engine to arrive at the scene and was the second man on the first hose to enter the building. After Simpson described his observations during both of his visits, and his actions at the fire scene, the following exchange occurred.

“Q. [Mr. Walsh, Roberts’ counsel]: Did you ever talk to Attorney Barker [Allied’s trial counsel] about this case?

“A. Yes, Mr. Barker telephoned me and I spoke to him on the phone. And when I spoke to him on the phone I don’t remember the day, and I don’t recall if he identified himself as the attorney for the insurance company for Allied Electric.” (NT 315-16.)

During the recess which followed Mr. Simpson’s testimony, both counsel approached the bench. The colloquy was not recorded, but it seems that the conversation included Roberts’ counsel’s remarks that the question about Mr. Simpson’s contact with Allied’s counsel was designed to suggest to the jury that Allied had failed to call a witness with information that would be valuable to the jury’s understanding of the events of March 18, 1998. In our recollection, plaintiff’s counsel did not specifically request a mistrial at this point. Instead, we discussed a curative instruction. Following the recess, the jury heard the testimony of Richard Brugger, Robert’s expert. Mr. Brugger was the last witness called. The attorneys delivered their closing arguments, the jury was instructed (including a charge that the fact of insurance was irrelevant to the issues before them) (NT 393) and then excused to begin its deliberations. Only after the jury was excused did Allied move for a mistrial. Roberts argues that this sequence constitutes a waiver by Allied of the prejudicial effect of the mention of insurance, citing Dilliplaine v. Lehigh Valley Trust Company, 457 Pa. 255, 322 A.2d 114 (1974), requiring a timely objection by trial counsel to errors that occur in the course of a trial. We do not read Dilliplaine quite so narrowly. The alleged error occurred midmoming and the motion for a mistrial occurred midafternoon on the same day. We do not consider this slight delay to be untimely.

If the motion was timely, should it have been granted? “As a general rule in a trespass action the fact that a defendant is insured is irrelevant and ... is so prejudicial that it calls for the withdrawal of a juror....” Deeney v. Krauss, 394 Pa. 380, 382, 147 A.2d 369, 370 (1959). This general rule is subject to many exceptions. The courts consider whether the reference was ambiguous and whether the insurance mentioned applied to a specific party, Phillips v. Schoenberger, 369 Pa. Super. 52, 534 A.2d 1075 (1987); whether the reference to insurance was intentional, Trimble v. Merloe, 413 Pa. 408, 197 A.2d 457 (1964); and whether the moving party can demonstrate prejudice, Gatto v. Kisloff, 437 Pa. Super. 328, 649 A.2d 996 (1994).

In this case, there is no suggestion the remark was intentionally elicited. Everybody agrees it was not and Mr. Simpson’s mention of insurance was not responsive to the question he was asked.

Many of the cases affirm the trial court’s denial of a mistrial in these circumstances because of the ambiguity of the reference. It is often difficult to tell which party is insured; e.g. Phillips v. Schoenberger, supra; Fleischman v. Reading, 388 Pa. 183, 130 A.2d 429 (1957). There was no ambiguity here; the jury learned-that Allied’s insurance carrier was interested in the case to the point where it retained an attorney to prosecute the action against Roberts. Our courts have long recognized that jurors are aware almost everyone has automobile insurance, indeed the law requires it. Sackson v. Finlayson, 6 D.&C.2d 514 (1956); 75 Pa.C.S. §1701 et seq. Likewise, it is common knowledge that most people and businesses have fire insurance. It is obviously the business of insurance companies to investigate and adjust losses and the fact that an insurance company might be involved in the background of a court case arising from a fire or automobile accident would surprise no one. But we do not believe it is common knowledge that fire insurance companies often pursue their subrogation rights against those whom they perceive to be responsible for the fire. This was not some reference to an insurance adjuster for one of the parties at the fire scene as occurred in Dolan v. Carrier Corporation, 424 Pa. Super. 615, 623 A.2d 850 (1993), where the jury might have assumed that the investigator was inspecting the damage to begin the process of settling with the insured. Here was a reference to insurance which informed the jury that: (1) Allied’s loss was insured; (2) Allied had been paid for its loss; and (3) Allied’s insurance carrier was trying to recover that payment from Roberts, who it deemed responsible for the fire. Furthermore, the company was not identified with a nameless adjuster at a distant and bygone fire scene, but was incarnate before the jury in the person of Allied’s trial counsel, the same person who called Roberts as on cross-examination.

Having determined that the reference to insurance was unintentional, but direct and unambiguous, we next consider whether it was prejudicial to Allied. Obviously, there is no way to know whether Allied’s cause was in fact damaged by Mr. Simpson’s statement because there is no way to review the jury’s deliberations. In these situations we must decide how the improper influence would likely affect a typical juror.

“[I]t has been widely recognized that the test for determining the prejudicial [impact] of an extraneous influence is an objective one. In order to determine whether an extraneous influence is prejudicial, a trial judge must determine how an objective, typical juror would be affected by such an influence.” Carter by Carters. U.S. Steel Corp., 529 Pa. 409, 420, 604 A.2d 1010, 1016 (1992).

Weighing Mr. Simpson’s staterhent from this perspective, we cannot escape the conclusion that it indelibly impacted this trial. In our opinion, a typical juror would be swayed by the knowledge that Allied had been made whole, that an insurance company, which exists to collect premiums with which to pay claims, was attempting to reimburse itself above what it had collected in premiums to recover from a man who had lost his business and almost his life. We are supported in this opinion by Pa.R.C.P. 2002(d), which permits a subrogee to pursue a claim in the name of the insured alone.

“Furthermore, when suit is commenced in the name of the insured alone, the cause of action will be pleaded as though there were no subrogation. The pleading will contain only the statement of the cause of action against the defendant and the damages claimed. There will be no reference to insurance, to payments made thereunder, or to subrogation.” Hillworth v. Smith, 425 Pa. Super. 17, 22, 624 A.2d 122, 124 (1993).

Here, Mr. Simpson’s statement had the effect of forcing Allied to proceed in this case as though Pa.R.C.P. 2002(d) was not available to it. We believe justice requires that Allied and its subrogee have the opportunity to pursue its claim with the benefit of all the relevant Rules of Civil Procedure. For the same reason, we believe our curative instruction was inadequate. Probably any curative instruction would have been inadequate under the circumstances. We cannot force a party to proceed without the protection of a specific rule of civil procedure, which was promulgated for use in precisely this kind of situation, and then cure the problem by instructing the jury to forget what it heard and decide the case as though no subrogation existed. It is too much to ask of a jury.

The motion of Allied Electrical Supply Company for post-trial relief is granted and it is awarded a new trial.

ORDER

And now, August 16, 2001, the court grants the motion of Allied Electrical Supply Company for post-trial relief and awards it a new trial. The prothonotary is directed to list this case on the next available pretrial conference list.

      . Although Carter dealt with a newspaper article that the jurors read, or might have read, the test is still the same. Whether the juror read it in a newspaper or heard it in court, it was still both prejudicial and irrelevant.


author: SCHAEFFER, S.J.,

text:
    Knoblauch Inc. v. Singer

      January 29, 2001
    C.P. of Berks County,
    no. 99-12199.

      Edwin L. Stock, for plaintiff.

      David M. Kozloff, for defendants.
   SCHAEFFER, S.J.,

On January 12, 2001, plaintiff appealed the judgment entered in the above-captioned matter in favor of the defendants, Henry D. Singer and Bernard R. Singer d/b/a Northgate Business Center and against plaintiff Knoblauch Inc.

This dispute arises over a 5 percent real estate broker’s commission that plaintiff alleges it is entitled to pursuant to an agreement between the defendants and the plaintiff on account of the sale of four parcels of property at Northgate Business Center, Muhlenberg Township, Berks County, Pennsylvania, to Yeager Supply Inc.

Plaintiff, Knoblauch Inc., is a Pennsylvania professional corporation and licensed real estate broker under the Pennsylvania Real Estate Licensing and Registration Act, with its office located at 619 Walnut Street, Reading, Berks County, Pennsylvania.

Defendants, Henry D. Singer and Bernard R. Singer d/b/a Northgate Business Center, are adult individuals who have their business address at Singer Equipment Company, 3030 Kutztown Road, Reading, Berks County, Pennsylvania, and are partners in the partnership known as Northgate Business Center.

Plaintiff began this action on October 17,1990, by the filing of its complaint. Defendants filed their answer with new matter on January 14, 1991. Plaintiff filed its reply on January 24,1991. Pursuant to stipulation of counsel, the court granted plaintiff leave to file an amended complaint alleging that plaintiff is a licensed real estate broker under the Pennsylvania Real Estate Licensing and Registration Act, which defendants admitted; defendants were not required to file an answer. Plaintiff filed its amended complaint on August 22, 1991, seeking damages for breach of contract and, alternatively, for damages on quantum meruit.

A jury trial commenced on My 11, 2000. On My 13, 2000, the court directed a verdict in favor of the defendants and against the plaintiff on both counts of plaintiff’s complaint. Plaintiff timely filed its motion for post-trial relief and praeciped the motion for argument court on November 6, 2000. The matter was rescheduled and the court heard argument on November 15, 2000. On December 13, 2000, the court denied plaintiff’s post-trial motion. Plaintiff timely filed its appeal to the Superior Court.

In its statement of matters complained of on appeal, plaintiff asserts:

“(1) The court erred/abused its discretion when it determined that the contract between plaintiff Knoblauch Inc. and defendants Henry D. Singer and Bernard R. Singer, doing business as Northgate Business Center, was an illegal contract and therefore not enforceable and directed a verdict in defendants’ favor on Knoblauch Inc.’s breach of contract claim.
“(2) The court erred/abused its discretion when it concluded that plaintiff Knoblauch Inc. had not proved its quantum meruit claim with sufficient specificity to permit the claim to be submitted to the jury and directed a verdict in defendants’ favor on plaintiff’s quantum meruit claim.
“(3) The court erred/abused its discretion when it refused to grant a directed verdict in favor of plaintiff Knoblauch Inc. despite the fact that plaintiff proved with certainty that defendants breached their contract with Knoblauch Inc. and owed Knoblauch Inc. the sums sought at trial.”

At the close of all the evidence, the trial judge may direct a verdict upon the oral or written motion of any party. Pa.R.C.P. 226(b). In deciding a motion for a directed verdict, the court must view the evidence presented in the light most favorable to plaintiff and determine whether plaintiff failed to prove his case as a matter of law. Ravin Inc. v. First City Co., 692 A.2d 577, 582 (Pa. Super. 1997).

Plaintiff first asserts that it was error for the court to determine that the contract was illegal and therefore not enforceable. We disagree. The Pennsylvania Supreme Court, in American Association v. Casualty Reciprocal, 527 Pa. 59, 588 A.2d 491 (1991), states that “whenever it appears that the enforcement of a contract would violate public policy, the court should dismiss the proceedings of its own motion ... the courts of this Commonwealth will not be used to enforce contracts which violate public policy; such contracts are void and the law will have nothing to do with them.” Id. at 68, 588 A.2d at 496. (emphasis in original) “As a general rule, an agreement which violates a statutory provision, ‘or which cannot be effectively performed without violating [a] statute, is illegal, unenforceable, and void ab initio.’ ” Watrel v. Commonwealth, Dept. of Education, 88 Pa. Commw. 1, 5, 488 A.2d 378, 381 (1985) (citation omitted), aff’d, 513 Pa. 61, 518 A.2d 1158 (1986).

Plaintiff asks this court to enforce a listing agreement without a termination date. We find that this would violate public policy. Joel Knoblauch is a licensed real estate broker, licensed by the State of Pennsylvania. (Notes of testimony, July 12, 2000, p. 93.) He was a licensed real estate broker at the time the agreement at issue was entered into. Id. Knoblauch was aware of the real estate regulations governing his profession; in fact, he testified that back in 1986, he sent a confirming letter to the defendants after a discussion about commissions because “that was in accord with the real estate regulations which say if you have an oral discussion about commissions, you should confirm it in writing.” Id. at pp. 98-99.

A principal purpose of the Real Estate Licensing and Registration Act, 63 PS. §§455.101-455.902, is “to protect buyers and sellers of real estate, the most expensive item many persons ever buy or sell, from abuse by persons engaged in the [real estate] business.” Kalins v. Commonwealth, State Real Estate Commission, 92 Pa. Commw. 569, 577, 500 A.2d 200, 203 (1985). RELRA establishes rules and regulations governing the profession of real estate brokers and provides for fines and penalties for violations of the Act. The law requires that RELRA be “liberally construed to effect [its] object.” Kalins at 577, 500 A.2d at 203, citing 1 Pa.C.S. § 1928(c). We found as a matter of law that RELRA applied to the present case and should be used to determine the validity and legality of the February 7, 1989 agreement between plaintiff and defendants.

It is the licensed real estate broker’s obligation, under RELRA, to put a definite termination date in any listing. Under section 455.604 of RELRA, it is a prohibited act to fail “to specify a definite termination date that is not subject to prior notice in any listing contract.” 63 RS. §455.604(a)(10). RELRA does not define what constitutes a “listing contract.”

We find the document in question is a “listing contract.” Black’s Law Dictionary, 943 (7th ed. 1999) defines, under real estate “listing,” also termed “listing agreement,” five types of listings: exclusive-agency, general, multiple, net and open listing. A listing is generally defined as “an agreement between a property owner and an agent, whereby the agent agrees to try to secure a buyer or tenant for a specific property at a certain price and terms in return for a fee or commission.” An open or general listing agreement allows rights to be given to more than one agent at a time and obligates the owner to pay a commission when a specified broker makes a sale.

We found that, to form a “listing contract,” all that was required was that a real estate broker and the owner of the property form an agreement in which the owner places the property with the broker who, in turn and in prospect for a commission, agrees to attempt to find a buyer. At the time the February 7, 1989 agreement for the five percent commission was signed, Henry Singer informed Knoblauch that the asking price for the property was $750,000, but that Singer required a net price of $650,000 after all fees and realtor commissions were paid. (N.T., pp. 132-33.) Following these instructions, Knoblauch attempted to secure Yeager Supply as a buyer of the property by quoting a price of “close to a million dollars.” Id. at p. 231. Knoblauch made repeated attempts to market the property and Yeager Supply was not the only potential buyer to whom he was trying to sell Singer’s property. Id. at pp. 323-26.

We liberally construed RELRA to effect its purpose. The writing describing the arrangements in this case, the February 7,1989 agreement, between Henry Singer and Joel Knoblauch for a five percent commission in the event of the conclusion of the sale of Singer’s lots with Knoblauch’s prospect, Yeager Supply (plaintiff’s exhibit 6), fit the definition of a “listing contract” and brings it under RELRA. While it can be characterized as an open listing agreement, it is a “listing contract” nonetheless. We decide this as a matter of law.

Further, a licensed real estate broker knows a listing agreement when he sees, or in this case, writes one. Joel Knoblauch himself established by his admissions that exhibit 6 is a listing. Knoblauch called Henry Singer and asked him if he could have a listing for two more names [the two new prospects, Yeager Supply and Cumberland Management] and Singer agreed. (Notes of testimony, 7/11/00, pp. 42-43.) Then Knoblauch hand-delivered, to Singer, plaintiff’s exhibits 6 and 7. Id. Knoblauch, in response to the question of whether the only two prospects he had in February of 1989 that he had registered with Northgate were Cumberland Management and Yeager Supply, testified that “[t]hey were the two new listing contracts.” Id. atp. 157. Knoblauch, a licensed real estate broker, referred to the agreements entered into in February 1989 as listings on at least two occasions. We will not permit him to retract his admissions in order to try to get this court to enforce an illegal agreement. Also, we will not buy the argument that there was no termination date in exhibit 6 because it was Henry Singer who failed to write one in. It was Knoblauch’s duty to do so, not Singer’s.

Appellant next alleges that it was error or an abuse of discretion to conclude that it did not prove its quantum memit claim with sufficient specificity to permit the claim to be submitted to a jury. This argument is without merit.

Quantum memit is an equitable remedy. Feingold v. Pucello, 439 Pa. Super. 509, 512, 654 A.2d 1093, 1094 (1995). A cause of action in quasi-contract for quantum memit, a form of restitution, is made out where one person has been unjustly enriched at the expense of another. Mitchell v. Moore, 729 A.2d 1200, 1202 n.2 (Pa. Super. 1999), citing Feingold, supra at 512, 654 A.2d at 1095. Therefore, a claim of quantum memit raises the issue of whether a party has been unjustly enriched, and in order to prove such a claim, a party must successfully prove the elements of unjust enrichment. Id. The elements necessary to prove unjust enrichment are: (1) benefits conferred on defendant by plaintiff; (2) appreciation of such benefits by defendant; and (3) acceptance and retention of such benefits under such circumstances that it would be inequitable for defendant to retain the benefit without payment of value. Mitchell, supra at 1203.

Before we addressed the merits, we noted that plaintiff and defendants’ relationship was based on a series of written agreements. Where such an express contract exists on the very issue of commission, no quantum memit/ unjust enrichment recovery is permitted. Coldwell Banker Phyllis Rubin Real Estate v. Romano, 422 Pa. Super. 319, 329-30, 619 A.2d 376, 381-82 (1993).

Plaintiff failed to establish the correct measure of damages to sustain its claim for unjust enrichment. The correct measure is the benefit conferred on the defendant, not the cost to the plaintiff. Plaintiff failed to establish the value of the benefit conferred on the defendants. It asserts that the rate of five percent of the gross sale price set forth in the written contract between the parties could have been considered as a proper measure of the value of the plaintiff’s services by the jury had the issue been presented to the jury. This is not the proper measure of damages in a claim for unjust enrichment.

Further, we found that the plaintiff had unclean hands, which would preclude an equitable remedy. The whole point of RELRA is to avoid precisely the sort of situation Knoblauch brings to the court. In the case of Feingold v. Pucello, 439 Pa. Super. 509, 654 A.2d 1093 (1995), the Superior Court began its analysis of that case by noting that the plaintiff, a personal injury attorney, came to the court “with hands smudged by the ink which should have been used to sign his fee agreement.” In Feingold, the attorney sued his client in quantum meruit for a contingency fee for work on the client’s case. The Superior Court held that Feingold’s abject failure to comply with Pa.R.C.P. 202, which required attorneys to state their contingency fee in writing before or within a reasonable time after commencing representation, precluded any equitable recovery. Id. at 512, 654 A.2d at 1095.

By analogy, we found that Knoblauch’s hands were likewise smudged with the ink that should have been used to put a definite termination date in his listing agreement with the defendants. Under RELRA, this prohibited act potentially subjects him to the possible suspension or revocation of his professional license or registration certificate or for the imposition of fines not exceeding $1,000, or both. Section 455.604(a). We found that he was not entitled to the remedy of quantum meruit because of his own conduct.

Therefore, we found that appellant could not recover on quantum meruit for four reasons:

“(1) it could not recover because the relationship between the parties was based on a series of written agreements;
“(2) it could not recover because it failed to sustain its burden of proving the proper measure of damages for unjust enrichment;
“(3) it could not recover by trying to use an illegal contract to show the value of services rendered; and
“(4) it could not recover because of unclean hands on the part of the licensed real estate broker who failed to put a definite termination date in the listing contract in violation of RELRA.”

Finally, appellant asserts that the court erred by not granting a directed verdict in favor of plaintiff despite the fact that it proved with certainty that defendants breached their contract and owed Knoblauch Inc. the sums sought at trial. The court did not grant the motion for a directed verdict on the breach of contract claim because we determined, as a matter of law, that the contract was illegal and void ab initio, for the reasons previously stated.

For the foregoing reasons, we respectfully request that the Superior Court affirm the judgment entered in this matter.

      . The 120 day time limit for the court’s decision, provided for under Pa.R.C.P. 2227.4(l)(b), was waived by agreement of the parties, and the prothonotary was directed not to enter judgment in this matter until the court rendered its decision on the post-trial motion.

      . This rule was in effect at the time of suit, and later rescinded because it duplicated Rule 1.5(b) of the Rules of Professional Conduct.


text:
    Mogilyansky v. Sych

      January 4, 2001

      Andrew G. Gay, for plaintiff.

      Stefan Richter, for defendants.
   HERRON, J.,

Defendants Svetlana Sych, Yvegeny Sych and Russian Market Inc. have filed preliminary objections to the amended complaint of plaintiff Alexander Mogilyansky. In response, Mogilyansky has filed a praecipe to overrule the objections. For the reasons set forth in this opinion, the court is issuing a contemporaneous order overruling the objections.

BACKGROUND

On August 14,2000, Mogilyansky filed the complaint, which includes counts arising from Yvegeny and Svetlana’s alleged mismanagement of Market. The defendants filed the objections on September 13, but did not file a corresponding motion to determine the objections until November 2. In the interim, the plaintiff filed the praecipe on October 17.

DISCUSSION

Philadelphia Civil Rule *1028 requires that a party raising preliminary objections file a copy of the objections with the motion court 30 days of filing the objections with the prothonotary. Phila.C.R. * 1028(A). If a party does not comply with this requirement, the responding party may file a praecipe in the motion court asking that the objections be overruled. Phila.C.R. * 1028(B).

There is no case law addressing the standard to be applied in evaluating a praecipe filed under Philadelphia Civil Rule *1028(B). However, the Pennsylvania Supreme Court has outlined the test to be used when pleadings are untimely:

“When a party moves to strike a pleading, the party who files the untimely pleading must demonstrate just cause for the delay. It is only after a showing of just cause has been made that the moving party needs to demonstrate that it has been prejudiced by the late pleading.” Peters Creek Sanitary Authority v. Welch, 545 Pa. 309, 314-15, 681 A.2d 167, 170 (1996). In the absence of any other compelling authority, the court believes it appropriate to adopt this test for situations where a party fails to file objections in the motion court in a timely manner.

Here, the defendants did not file the objections in the motion court until November 2,20 days after such a filing was required and 16 days after the praecipe was filed. In addition, the defendants do not claim to have just cause for the delay in filing the objections in the motion court. As a result, the court is issuing a contemporaneous order overruling the objections.

ORDER

It appearing to the court that the preliminary objections filed herein were not filed with the clerk of the motion court within the time required by Phila.C.R. *1028, in accordance with the memorandum opinion being filed contemporaneously with this order, the said objections are hereby overruled and the objecting party is hereby granted the right to plead over within 20 days after notice of this order.

      . Prior to 2000, this rule directed that a court “shall overrule the preliminary objections and order the objecting party to answer within 20 days of the date of the court’s order.” Because this provision has been deleted, it is unclear under what conditions a court should overrule preliminary objections based on a failure to file in the motion court.

      . Moreover, the objections were not filed with the prothonotary until after the expiration of the 20-day pleading period set forth in Pa.R.C.P. 1026(a).

      . Indeed, the defendants ignore the praecipe and their own delinquency completely in the objections and the accompanying memorandum.


author: AMMERMAN, J.,

text:
    DellAntonio v. DellAntonio

      March 20, 2001
    C.P. of Clearfield County,
    no. 92-329-SD.

      Thomas M. Bianco, for plaintiff.

      James A. Naddeo, for defendant.
   AMMERMAN, J.,

Joseph DellAntonio (Father) is requesting that this court modify his child support payment from the current obligation of $3,800 per month to $1,800 per month. The parties are the parents of three children ages 16, 15 and 12, who reside with Mother. Both parents are successful professionals in their respective fields. Initially, it is noted that in a petition to modify a support order, the petitioner carries the burden of proving by competent evidence that a material and substantial change of circumstances has occurred since the entry of the original support order. Palmatier v. MacCartney, 365 Pa. Super. 300, 529 A.2d 518 (1987). In the instant case, Father does not argue that there is a substantial change of circumstances since the entry of the original support order and, consequently, this court would deny his request. However, Father does take issue with (1) the determination of the “reasonable needs” of the children and (2) the parents’ ability to pay. Although these questions were addressed during the original support proceedings, this court shall address the issues now.

Child support is generally determined through application of the guidelines promulgated in Pa.R.C.P. 1910.1 et seq. However, in cases where the parties’ combined monthly income exceeds $15,000, supplemental analysis is required. Specifically, Rule 1910.16-2(e)(2), High income child support cases, provides:

“When the parties’ combined net income exceeds $15,000 per month, child support shall be calculated pursuant to Melzer v. Witsberger, 505 Pa. 462, 480 A.2d 991 (1984). The presumptive minimum amount of child support shall be obligor’s percentage share of the highest amount of support which can be derived from the schedule or the chart for the appropriate number of children and using the parties’ actual combined income to determine obligor’s percentage share of this amount. The court may award an additional amount of child support based on the remaining combined income and the factors set forth in Melzer.”

Therefore, the court must apply the support guidelines and additionally conduct a Melzer examination. Rule 1910.16-3 sets forth the basic child support obligation for parents with a combined net monthly income of $15,000 at $3,480. Therefore, the court will use this statutory guide as a baseline when considering the obligation warranted in the present case.

The fundamental requirements of child support, as stated by our Supreme Court in Conway v. Dana, 456 Pa. 536, 540, 318 A.2d 324, 326 (1974), and as are stated in Melzer, 505 Pa. at 468, 480 A.2d at 994, are here reiterated, “In the matter of child support we have always expressed as the primary purpose the best interest and welfare of the child .... Support, as every other duty encompassed in the role of parenthood, is the equal responsibility of both mother and father. Both must be required to discharge the obligation in accordance with their capacity and ability.”

Pursuant to the court’s observation of the purpose of child support, the Melzer court also admonished that our courts had “never established an orderly method for the calculation of support awards” and set forth a four-step method. The first step requires a court to determine the reasonable needs of the children. “Reasonable needs” are based on the particular circumstances of the case and include the needs, custom and financial status of the parties. That court observed that parents have an obligation to share with their children the benefit of their financial achievement. Melzer at 470, 480 A.2d at 995.

In the case currently before this court, Mother provided a detailed list of the monthly expenses incurred to satisfy the reasonable needs of these children, which totals $8,277. The court carefully considered these expenses and the relevant case law. While it is true that Mother simply divided the monthly expenses by fourths and attributed three-fourths of all expenditures to the children, there is a logical basis for this. In Shutter v. Reily, 372 Pa. Super. 251, 539 A.2d 424 (1988), the court held that a portion of reasonable mortgage payments as well as property taxes, insurance costs and utility fees are necessary and inescapable costs of maintaining a household and providing a sufficiently safe home for a child and can be considered in determining child support obligations. However, that court did not state the appropriate portion and instead said that “[t]he proportion of these expenses that should be allocated to the child’s reasonable needs will, of course, depend upon the county guideline formulas, as well as the sound discretion of the trial court.” Shutter, 372 Pa. Super. at 262, 539 A.2d at 429.

In the instant case, this court finds such a division appropriate under the circumstances. The Mother has custody of three children and she is obligated to provide for them in the lifestyle that the parents’ incomes allow. Because there are three children, a larger house is needed, the bills are proportionally higher and expenses multiply accordingly. While it may not always be true that one child would be responsible for half of a mortgage or half of the monthly utility bills, in families with several children this proposition is more likely. As previously discussed, Mother must keep a larger house and incur additional expenses simply because she is caring for three children. While Father argues that this approach inflates the children’s “reasonable” needs, he does not thereafter give an alternative formula for the court to employ. The court concludes that in consideration of the above analysis, the lifestyle that these young adults are accustomed to, and in observance of the financial ability of each parent, this court finds these expenses to be reasonable under the facts of this case.

The second step is to determine the respective abilities of the parents to support their children. As previously mentioned, both of these parents are successful in their respective fields. Mother is a dentist with her own practice and father is a business entrepreneur. As determined by a review of the parties’ recent federal income tax forms, Mother’s net monthly income is $8,872.60 and Father’s net monthly income is $8,750. However, the inquiry into the ability to pay does not stop here. The court must also consider the parties’ property, earning capacity and any other factor which contribute to income. The court has long recognized that income tax numbers can be legally manipulated to give the appearance of lower income. See Flory v. Flory, 364 Pa. Super. 67, 71-72, 527 A.2d 155, 157 (1987) (trial court erred in using father’s reported income as federal income tax law permits deductions which may not reduce a parent’s disposable income). Furthermore, Father is the sole shareholder in two S corporations. In order to calculate income available for support where a payor owns his own business, the court must consider actual available financial resources. Calabrese v. Calabrese, 448 Pa. Super. 166, 173, 670 A.2d 1161, 1165 (1996). “Otherwiseput, ‘cashflow’ ought to be considered and not federally taxed income.” Id. With these guidelines in mind, the court must determine the actual cash flow available to these parents.

According to Father’s statement of assets and liabilities Father has a net worth of $2,704,364 as of December 2000. The court will consider this value in determining Father’s child support obligation.

Father urges the court to conclude that his net after-tax income, excluding depreciation but including his retirement contribution, is $10,355.08 per month. (Defendant’s brief, p. 7.) After a review of the documents submitted by Father regarding his financial status and employing the statutory rules above listed, the court finds this number to be sufficiently accurate for inclusion in the Melzer formula.

Mother’s monthly disposable income, as determined from a review of her financial records, is $8,872.66.

Once the court has determined the reasonable needs of the children and the parent’s available income, the third step the court must undertake is a calculation to determine each parent’s total support obligation. This formula is as follows:

Mother’s income available for
Mother’s total support (IAS) children’s support ------------------x needs
obligation = Mother’s IAS + Father’s IAS
Father’s income available for
Father’s total support (IAS) children’s support ------------------x needs
obligation = Father’s IAS + Mother’s IAS

In this case, the calculation produces the following result: Mother’s total support obligation:

Mother’s total $8.872.66 x children’s needs
obligation = ($8,872.66 + $10,355.08)
$8.872.66 x $8,277
$19,227.74
.461451 x$8,277=$3,819.43
Father’s total $10.355.08 x children’s needs
obligation = ($10,355.08 + $8,772.66)
$10.355.08 x $8,277
$19,277.74
.538549 x $8,277=$4,457.57

Therefore, according to the Melzer formula, Mother is obligated to provide $3,819.43 per month in child support and Father is obligated to provide $4,457.57.

Finally, once the parent’s total support obligation has been defined, the court must determine what portion of that obligation may be offset by support provided directly to the children. There is no claim or testimony in this matter regarding support provided directly to any of the children, so this fourth step is unnecessary.

Although the court recognizes that the support obligation of Father could at this time be increased, it is the determination of this court that maintaining the current order is more appropriate under the circumstances.

ORDER

Now, March 20,2001, pursuant to Melzer and the foregoing analysis, it is the order of this court that defendant’s petition to modify child support be and is hereby dismissed.

      . Petitioner’s exhibit 10.