author: CHESLOCK, J.,

text:
    Galante v. Damiani
    C.P. of Monroe County,
    no. 827 Civil 1999.

      Kevin P. Foley, for plaintiff.

      Joanne Kelhart, for defendant.
    September 21, 1999
   CHESLOCK, J.,

Plaintiff commenced this action by filing a complaint on February 4, 1999 to recover damages for personal injuries sustained in a motor vehicle accident. On March 7,1997, plaintiff was stopped in a line of traffic on Chipperfield Drive, heading toward Route 611 in Stroudsburg, Monroe County, Pennsylvania. Plaintiff’s vehicle was rear-ended by a vehicle operated by defendant Barbara Damiani, who alleges that she was stopped in the same lane of traffic when her vehicle was rear-ended by a vehicle operated by defendant Smith. Defendant Smith’s vehicle pushed defendant Damiani’s vehicle into the plaintiff’s vehicle.

On March 19, 1999, defendant Smith filed an answer and new matter to plaintiff’s complaint. Plaintiff filed an answer to defendant’s new matter on March 23,1999. Plaintiff served interrogatories and requests for production of documents on the defendant. Defendant served incomplete responses. As a result, on May 12, 1999, plaintiff filed a motion to compel defendant to provide full and complete discovery. Plaintiff filed a motion to make the rule absolute on June 18, 1999. On June 21, 1999, this court entered an order requiring the defendant to provide full and complete answers to plaintiff’s interrogatories and document requests. In July, plaintiff issued subpoenas to Dawn Migliacci, an Erie Insurance claims adjuster, and the records custodian of Erie Insur-anee Group. On August 2, 1999, plaintiff filed a motion to compel discovery and/or sanctions and attorneys’ fees and costs. Defendant filed an answer to the rule to show cause for the compelling of discovery on August 20, 1999. In addition, defendant filed a motion to quash subpoenas on My 23,1999 and a brief in support thereof on August 24,1999. On July 28, plaintiff filed an answer to defendant’s motion to quash subpoenas. Plaintiff filed a brief in opposition of the motion to quash on September 1, 1999. Oral argument was heard before this court on September 7, 1999. We are now ready to dispose of the outstanding motions.

In this matter, there is mutual distrust and a blatant struggle between opposing counsel on numerous issues. First, plaintiff argues that defendant has deliberately failed to provide all of the discovery as ordered by this court, including witness statements, photographs, claims adjuster’s activity logs and the declaration page in effect at the time of the accident. Plaintiff goes so far as to state that defendant is intentionally withholding such items “in an attempt to concoct a sham defense at trial.” Defendant’s response to interrogatories specifically refers to an insurance declaration page that has not been produced. On this basis, the plaintiff believes that the de-fendánt is withholding other documents that have been requested. In addition, based on defendant Damiani’s deposition testimony, plaintiff believes that defendant is in possession of additional tape-recorded “statements.” Furthermore, defendant has given pictures of two of the three vehicles involved in the accident to plaintiff. Plaintiff insists that a picture of the third vehicle must be in existence and defense counsel is withholding it.

Defense counsel has stated numerous times that such evidence does not exist and therefore cannot be produced:

“(1)1 know what your problem is. You think that something has been withheld from you and its [sic] hasn’t. There are documents that have been provided to you. We are going to argue about that in court, I guess, if you think, for some reason, you haven’t been provided with those things.” (See deposition of David K. Smith Jr., July 28, 1999, pp. 9-10.) (emphasis added)
“(2) There are no statements.” (See deposition of David K. Smith Jr., July 28, 1999, p. 13.) (emphasis added)
“(3) Plaintiff is seeking sanctions against the defendant for information that quite simply does not exist.” (See defendant’s brief in opposition to the motion for sanctions.) (emphasis added)

In addition, defense counsel, during oral argument, expressly told this court that such information does not exist. Furthermore, in a sworn affidavit, Dawn Migliacci states:

“I have provided and have searched for all statements handwritten, tape-recorded or otherwise and have determined that there are no such statements missing of any of the parties to the action as set forth above.” (See affidavit, dated August 19, 1999, ¶3.) (emphasis added)
“Copies of any and all photographs, the place where same were involved in the accident have been provided to defense counsel and have beenforwarded to plaintiff’s counsel.” (See affidavit, dated August 19, 1999, ¶4.)
“I have requested a copy of the declaration page and attach the following to my affidavit of the available coverage for David K. Smith.” (See affidavit, dated August 19, 1999, ¶6.)

Second, plaintiff contends that defendant failed to respond to plaintiff’s inquiries regarding the taking of defendant Smith’s deposition. Plaintiff also contends that defendant has intentionally attempted to delay these proceedings by ignoring plaintiff’s requests for deposition dates and discovery requests. Plaintiff’s counsel had unilaterally scheduled depositions on July 28, 1999 because defense counsel allegedly failed to return phone calls or respond to letters regarding such scheduling. Defense counsel claims that plaintiff had knowledge of defense counsel’s prior commitments on July 28, 1999.

In addition, plaintiff desires to depose Dawn Migliacci and Erie Insurance Group’s record custodian. Defendant is against such depositions. This will be further addressed in this opinion.

Furthermore, we note that plaintiff has not complied with the Monroe County Local Rules of Court in that she has failed to file a brief or memorandum of law setting forth the legal authorities which she has relied upon within fifteen days prior to argument court. (See Monroe County Rules of Civil Procedure ¶¶210 and 211.) In such a case, Rule 211 provides this court with the authority to grant or deny the relief at issue. We have thoroughly reviewed the file and have denied plaintiff’s relief on other grounds.

With the above background facts in place, we will discuss each motion separately.

PLAINTIFF’S MOTION FOR SANCTIONS

Plaintiff asks this court to enter an order pursuant to Rule 4019(a)(l)(i), (iii), (vii) and (viii) and Rule 4019(c) of the Pennsylvania Rules of Civil Procedure precluding the defendant from entering any defense at the trial including presenting testimony, cross-examining witnesses or presenting evidence. Rule 4019 sets forth sanctions and allows a court, on motion, to make an appropriate order for sanctions if: (1) a party fails to serve answers, sufficient answers or objections to written interrogatories under Rule 4005; (2) a person . . . fails to answer, answer sufficiently or object to written interrogatories under Rule 4004; (3) a party, in response to a request for production or inspection made under Rule 4009, fails to respond that inspection will be permitted as requested or falls to permit inspection as requested; or (4) a party or person otherwise fails to make discovery, or to obey an order of court respecting discovery; (5) etc. Pa.R.C.P. 4019(a)(l)(i), (iii), (vii) and (viii).

Section (c)(2) allows a court to enter an order “refusing to allow the disobedient party to support or oppose designated claims or defenses, or prohibiting him from introducing in evidence designated documents, things or testimony, or from introducing evidence of physical or mental condition.” Pa.R.C.P. 4019(c)(2). In addition, the court may enter any “such order with regard to the failure to make discovery as is just.” Pa.R.C.P. 4019(c)(5).

The imposition of sanctions and the severity of sanctions are a matter that falls within the sound discretion of the trial court. Croydon Plastics Co. Inc. v. Lower Bucks Cooling & Heating, 698 A.2d 625 (Pa. Super. 1997); Taylor v. City of Philadelphia, 692 A.2d 308 (Pa. Commw. 1997). In exercising its discretion, the court must strike a balance between the procedural need to move the case to a prompt disposition and the substantive rights of the parties. Id.; Poulos v. PennDOT, 133 Pa. Commw. 322, 575 A.2d 967 (1990).

This action was filed in February. In six months, depositions of two of the defendants and a witness have been taken and documentary discovery has been exchanged. We cannot agree that the defendant has intentionally delayed this matter. In addition, we cannot impose sanctions for failure to comply with discovery requests when the information requested does not exist. Furthermore, plaintiff’s counsel has made some serious accusations regarding the defense counsel’s alleged concealment of evidence without substantial proof. For the foregoing reasons, we will not impose sanctions against the defendant. Plaintiff’s motion for sanctions is denied.

PLAINTIFF’S MOTION FOR ATTORNEY’S FEES AND COSTS

Plaintiff contends that she is entitled to reasonable attorney’s fees and costs associated with having to bring this matter before the court and/or defend the defendant’s motion to quash plaintiff’s subpoenas pursuant to Pa.R.C.P. 4019 and/or 42 Pa.C.S. §2503(6) and (7). Pa.R.C.P. 4019 permits the court to grant attorney’s fees and expenses for five reasons: (1) failure to make admissions; (2) failure of deposing party to attend deposition; failure of deposing party to subpoena a witness; (4) the granting of a motion for sanctions; and (5) filing a motion or making an application for the purpose of delay or in bad faith. Pa.R.C.P. 4019(d), (e), (f), (g) and (h). This matter does not fall within any of the above grounds.

Furthermore, pursuant to 42 Pa.C.S. §2503(6) and (7), reasonable counsel fees are awarded as “sanctions against another participant for dilatory, obdurate or vexatious conduct during the pendency of a matter.” 42 Pa.C.S. §2503(6) and (7). (emphasis added) We do not believe that defense counsel’s actions meet this standard. Plaintiff’s motion for attorney’s fees and costs is denied.

PLAINTIFF’S MOTION TO COMPEL DISCOVERY

Plaintiff asks this court to enter an order compelling the defendant to produce copies of the declaration page in effect at the time of the accident, copies of all photographs, witness statements and claims adjuster’s activity logs. Pennsylvania Rule of Civil Procedure 4003.1(a) provides that:

“[A] party may obtain discovery regarding any matter, not privileged which is relevant to the subject matter involved in the pending action, whether it relates to the claim or defense of the party seeking discovery or to the claim or defense of any other party, including the existence, description, nature, content, custody, condition and location of any books, documents, or other tangible things and the identity and location of persons having knowledge of any discoverable matter.” Pa.R.C.P. 4003.1(a). (emphasis added)

Moreover, “It is not grounds for objection that the information sought will be inadmissible at the trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence.” Pa.R.C.P. 4003.1(b).

It has always been the policy of this court to liberally allow the free exchange of discoverable materials in an effort to expedite litigation and to adhere to the spirit of the discovery rules. However, in this case, defense counsel has stated numerous times in depositions, in her brief in opposition to plaintiff’s motion for sanctions, and in oral argument before this court that the information plaintiff requests, such as the photographs and witness statements, does not exist. These are very bold statements for an officer of the court to make if, in fact, such information does exist and is being withheld. We find no reason to believe that defense counsel is being less than truthful regarding the existence of this information. Defense counsel cannot produce information that does not exist and we cannot compel her to do so. Plaintiff’s motion to compel is denied.

DEFENDANT’S MOTION TO QUASH SUBPOENAS

In July of 1999, plaintiff’s counsel issued subpoenas and notices of depositions for July 28,1999. A subpoena was issued to Dawn Migliacci and to the records custodian of records of Erie Insurance Company. Both subpoenas are identical. Ms. Migliacci and the records custodian were not witnesses to the collision.

According to the defendant, Rule 4003.2 sets forth the limitations upon discovery of insurance information:

“A party may obtain discovery of the existence and terms of any insurance agreement under which any person carrying on an insurance business may be liable to satisfy part or all of a judgment which may be entered in the action or to indemnify or reimburse for payments made to satisfy the judgment. Information concerning the insurance agreement is not by reason of such disclosure admissible in evidence at trial. ” Pa.R.C.P. 4003.2. (emphasis added) Plaintiff is already in possession of such information and thus the depositions are not necessary.

Defendant is misinterpreting the Pennsylvania Rules of Civil Procedure. A party may obtain discovery regarding any matter, not privileged which is relevant to the subject matter involved in the pending action. See Pa.R.C.P. 4003.1, supra. Furthermore, Rule 4003.3, pertaining to the scope of discovery of trial preparation material, states that “a party may obtain discovery of any matter discoverable under Rule 4003.1, supra, even though prepared in anticipation of litigation or trial by or for another party, or by or for that other party’s representative, including his . . . insurer. Pa.R.C.P. 4003.3. (emphasis added) A party is not precluded from discovering information in addition to the insurance agreement from an insurance company.

This court has grappled with the decision of whether to allow the depositions. It is apparent that a partial motive of the plaintiff is to verify the representations set forth by defense counsel. Defendant contends that plaintiff’s need for verification will not lead to the discovery of admissible information. We agree with the defendant on this contention. However, in her capacity as a claims adjuster, Ms. Migliacci conducted an investigation regarding the accident, took photographs and conversed with the plaintiff prior to attorneys being retained. Ms. Migliacci’s testimony is relevant to facts surrounding the accident and is calculated to lead to the discovery of admissible evidence.

With regards to the subpoena of the records custodian, “a party may obtain discovery . . . including the existence, description, nature, content, custody, condition and location of any . . . documents . .. .” Pa.R.C.P. 4003.1. The most qualified person to testify regarding such documents is the records custodian. Defendant’s motion to quash is denied. Plaintiff has a technical right to depose Ms. Migliacci and the records custodian.

As a final note, this court takes issue with the dynamics between counsel. It is a sad state of affairs when a statement taken under oath, e.g. an affidavit, carries no more veracity and reliability than words uttered at a cocktail party. This court finds the lack of trust, cooperation and professional courtesy which has plagued counsel in this case even more disturbing. A courtroom is a place of justice. It should not be transformed into a forum for resolution of personal vendettas between officers of the court.

Accordingly, we enter the following order:

ORDER

And now, September 21, 1999, plaintiff’s motion for sanctions is denied. Plaintiff’s motion for attorney’s fees and costs is denied. Plaintiff’s motion to compel discovery is denied. Defendant’s motion to quash subpoenas is denied.

      . This opinion deals with issues between the plaintiff and defendant Smith only. No further mention of defendant Damiani will be made.

      . Defendant Damiani testified: “I believe the Erie Insurance Company called me on the phone sometime after the accident, long time after the accident. I don’t even remember when it was. Somebody from Erie Insurance called me and taped my conversation with them.” (See deposition transcript of Barbara Ann Damiani, July 29, 1999 at p. 12.)

      . Rule 4019 sets forth other reasons for the imposition of sanctions. Because plaintiff has not raised these as grounds for sanctions on the facts of this case, they will not be discussed.

      . The declaration page in effect at the time of the accident has been referred to in the record. In her affidavit, Ms. Migliacci has stated: “I have requested a copy of the declaration page_” Defendant shall promptly turn over a copy of said declaration page to the plaintiff once it has been retrieved, if she has not done so.

      . Plaintiff stated: “The deposition of Dawn Migliacci, if nothing else, would verify the accuracy of defendant’s counsel’s representation to plaintiff’s counsel and the court in regards to the accuracy and complete response for request for production of documents.” (See plaintiff’s answer to defendant’s motion to quash subpoenas, ¶6.)


source: Caselaw Access Project

author: FORNELLI, P.J.,

license: Public Domain

text:
    PennDOT v. Longstreth

      C.P. of Mercer County,
    no. 1999-821.

      Chester J. Karas Jr., for PennDOT.

      Robert J. Tesone, for defendant/petitioner.
    October 28, 1999
   FORNELLI, P.J.,

This matter comes before the court on William E. Longstreth’s appeal from the Commonwealth of Pennsylvania, Department of Transportation, Bureau of Driver Licensing’s notice of license suspension. For the reasons set forth herein, Longstreth’s appeal will be sustained.

Longstreth, a Pennsylvania resident, was sent notice by the department dated March 8, 1999, which stated:

“Section 1581 of the Vehicle Code requires the department to treat certain out of state convictions as though they had occurred in Pennsylvania. Therefore, as a result of the department receiving notification from Ohio of your conviction on 01/07/1999 of an offense which occurred on 11/24/1998, which is equivalent to a violation of section 3731 of the Pennsylvania Vehicle Code, Driving Under Influence, your driving privilege is being Suspended for a period of 1 Year(s), as mandated by section 1532B of the Vehicle Code.
“The effective date of suspension is 04/19/1999,12:01 a.m.”

The stated authority for the suspension of Longstreth’s driving privileges is the driver’s license compact, 75 Pa.C.S. §1581. The legislature enacted section 1581 into law on December 10, 1996, and Pennsylvania thereby entered into the compact with all other jurisdictions legally joining therein.

Article III of the compact entitled “Reports of conviction” sets forth the following:

“The licensing authority of a party state shall report each conviction of a person from another party state occurring within its jurisdiction to the licensing authority of the home state of the licensee. Such report shall clearly identify the person convicted, describe the violation specifying the section of the statute, code or ordinance violated, identify the court in which action was taken, indicate whether a plea of guilty or not guilty was entered or the conviction was the result of the forfeiture of ball, bond or other security and shall include any special findings made in connection therewith.” 75 Pa.C.S. §1581.

Article IV states the effect of a conviction reported in accordance with article m of the compact, and provides in pertinent part:

“(a) The licensing authority in the home state, for the purposes of suspension revocation or limitation of the license to operate a motor vehicle, shall give the same effect to the conduct reported, pursuant to article III of this compact, as it would if such conduct had occurred in the home state in the case of convictions for:
“(2) driving a motor vehicle while under the influence of intoxicating liquor or a narcotic drug or under the influence of any other drug which renders the driver incapable of safely driving a motor vehicle;” 75 Pa.C.S. §1581.

Upon receipt of the notice of license suspension from the department, Longstreth filed the instant appeal in accordance with 75 Pa.C.S. § 1550(a). In his petition for appeal from the order of the department, Longstreth asserts that the suspension of his operating privileges is improper for the following reasons:

“(1) the report from Ohio was technically deficient under the compact and under the decisional law of the Commonwealth of Pennsylvania;
“(2) the purported one-year suspension by the department would not give Longstreth’s conviction the same effect as if the conviction had occurred in the Commonwealth of Pennsylvania because Longstreth would have been an ARD candidate facing as little as a 30 day suspension for the equivalent offense in Pennsylvania;
“(3) since Longstreth’s Ohio offense led to a three month suspension of operating privileges in Ohio, a one-year suspension by the department would constitute an unauthorized multiple consecutive license suspension by two states in violation of Longstreth’s double jeopardy and due process rights;
“(4) Longstreth’s conviction in Ohio on January 7, 1999, for an offense which occurred on November 24, 1998, was not an equivalent violation of 75 Pa.C.S. §3731; and
“(5) the compact violates the Constitution of Pennsylvania, and in particular, Longstreth’s rights to due process of law in that it imposes a substantially greater penalty for an out-of-state conviction than for an equivalent Pennsylvania offense.” Petition for appeal from the order of the Department of Transportation suspending license to operate motor vehicle, pp. 2-3.

The first issue for the court’s consideration is whether the report from Ohio was technically deficient under the compact, 75 Pa.C.S. §1581. Longstreth argues that the Ohio report did not conform to the requirements of article III of the compact in that the report did not contain the requisite information necessary to suspend his operating privileges in Pennsylvania.

At hearing on this matter, the department introduced into evidence a certified copy of the report received by the department from the licensing authority of the State of Ohio. The Ohio report identified Longstreth as the person who committed an offense on November 24,1998, and listed January 7,1999 as the date of conviction. The report further described the reason of conviction as “DUI — alcohol/liquor,” and identified the court as that of Trumbull County.

Longstreth contends that the report from Ohio is deficient in two critical respects: (1) the report did not specify the section of the statute, code or ordinance violated; and (2) the report did not indicate whether a plea of guilty or not guilty was entered or whether the conviction was the result of the forfeiture of bail, bond or other security. As such, Longstreth argues that the report is not in compliance with the mandates of article III of the compact.

Article III of the compact entitled “Reports of conviction” clearly dictates that any report of conviction from a party state “shall” contain the following information: (1) the identity of the person convicted; (2) a description of the violation, including the section of the statute, code, or ordinance violated; (3) the identity of the court in which the person was convicted; and (4) an indication of the plea or of whether the conviction resulted from a forfeiture of security. Mazurek v. PennDOT, 111 A.2d 23, 25 (Pa. Commw. 1998). The use of the word “shall” in article III of the compact is mandatory. Id.

In the case at bar, the report from Ohio did not contain the second and fourth requirements. Pennsylvania law is clear that where the report of conviction fails to include the requisite information, any attempted suspension of operating privileges by the department is improper. Rouse v. PennDOT, 732 A.2d 35 (Pa. Commw. 1999); McCann v. PennDOT, 728 A.2d 1009 (Pa. Commw. 1999); Sweet v. PennDOT, 724 A.2d 1004 (Pa. Commw. 1999); Mazurek, supra; Staples v. PennDOT, 718 A.2d 892 (Pa. Commw. 1998); Emmett v. PennDOT, 718 A.2d 891 (Pa. Commw. 1998); and Hook v. PennDOT, 718 A.2d 381 (Pa. Commw. 1998).

The department acknowledges that the report from Ohio did not contain all of the information required by article III of the compact. However, the department argues that the amendment to section 1584 of the Vehicle Code by the General Assembly on December 21, 1998, alleviates any shortcomings in this regard. The amendment added a second sentence which specifically deals with omissions from reports received by party states. Section 1584 provides as follows:

“Section 1584. Furnishing of information to other states

The Department of Transportation of the Commonwealth shall furnish to the appropriate authorities of any other party state any information or documents reasonably necessary to facilitate the administration of articles IE, IV and V of the compact. The omission from any report received by the department from a party state of any information required by article III of the compact shall not excuse or prevent the department from complying with its duties under articles TV and V of the compact.” 75 Pa.C.S. (emphasis added)

With the amendment to section 1584, the department asserts that it was under an obligation to suspend Long-streth’s operating privileges for one year, despite the fact that the report from Ohio omitted certain information. Longstreth disagrees. In his supplemental petition for appeal, Longstreth contends that the amendment to section 1584 improperly alters the uniformity of wording and contractual agreement between Pennsylvania and other participating jurisdictions who have enacted the compact. Longstreth argues that such an amendment constitutes an unauthorized and unpermitted attempt by the legislature to unilaterally modify the compact.

Upon review of this matter, the court finds that section 1584 is ineffectual in addressing the lack of information in the Ohio report. There are a number of reasons for this conclusion. First, section 1532(b)(3) of the Vehicle Code sets forth the authority by which the department can suspend an operator’s license for an out-of-state offense. In so doing, this section states:

“(b) Suspension.—
“(3) The department shall suspend the operating privileges of any driver for 12 months upon receiving a certified record of the driver’s conviction of section 3731 (relating to driving under influence of alcohol or controlled substance) or 3733 (relating to fleeing or attempting to elude police officer), or substantially similar offenses reported to the department under article III of section 1581 (relating to driver’s license compact), or an adjudication of delinquency based on section 3731 or 3733....” (emphasis added)

The sole authority of the department to suspend the operating privileges of a Pennsylvania resident for an out-of-state offense is in accordance with section 1532(b)(3). This section only permits a suspension where a report is received pursuant to article III. Since the content requirements of any such report are specifically set forth in article III, a report cannot be considered to have been received unless it meets all of the explicit reporting requirements set forth therein. Section 1532(b)(3) makes no reference whatsoever to section 1584. Thus, section 1584 has no impact on the grant of authority to the department to suspend for an out-of-state offense.

Second, the court finds the amendment to section 1584 constitutes an impermissible attempt by the legislature to unilaterally modify the compact. The Commonwealth Court discussed the issue of interstate compacts at some length in Aveline v. Pennsylvania Board of Probation and Parole, 729 A.2d 1254, 1257 (Pa. Commw. 1999), where the court considered the interstate compact for the supervision of parolees and probationers, and provided as follows:

“In general, interstate compacts are multi-state agreements made with congressional consent which arise when two or more states enact essentially identical statutes governing an area of mutual state concern that transcends state lines. . . . The terms of an interstate compact normally contain the obligations of the states, provisions for enactment and amendment, clauses vesting some authority with the promulgation of uniform application of the compact, and procedures for termination or withdrawal. ... Because interstate compacts are agreements enacted into state law, they function simultaneously as contracts between the states and as statutes within those states, and must be interpreted as both.” (citations omitted) (footnotes omitted)

The Aveline court further declared that “[c]ompacts have the characteristics of contracts because the enactment of the compact terms as part of an enabling statute by one state is viewed as an offer. The offer may be accepted through the enactment of statutes, including the same compact terms by another state.... As with other contracts, the contract clause of the United States Constitution protects compacts from impairment by the states.” Id. at 1257 n.10.

Accordingly, the Commonwealth court in Aveline stated that “[t]his means that upon enacting a compact, it takes precedence over the subsequent statutes of signatory states and, as such, a state may not unilaterally nullify, revoke or amend one of its compacts if the compact does not so provideId. (emphasis added) See also, Delaware River Port Authority v. Commonwealth of Pennsylvania, State Ethics Commission, 137 Pa. Commw. 170, 585 A.2d 587 (1991) and Nardi v. Delaware River Port Authority, 88 Pa. Cmwlth. 558, 490 A.2d 949 (1985) (Delaware River Port Authority, being created by interstate compact, in an instrumentality of both Pennsylvania and New Jersey and neither creator state can unilaterally impose additional duties, powers or responsibilities upon the authority).

In its brief in support of operating privilege suspension, the department argues that the amendment to 75 Pa.C.S. §1584 was not an attempt to unilaterally alter the terms of the compact, but was simply designed to address the manner in which the department administers its obligations under the compact. The department contends that said amendment merely affects how the compact is applied to Pennsylvania motorists, and does not change, alter or amend the compact itself. Such an argument is devoid of merit.

In the case at bar, the amendment to 75 Pa.C.S. §1584 constitutes an unequivocal attempt by the legislature to unilaterally nullify and/or alter the notice provisions of the compact. Such an amendment is neither contemplated nor permitted by the compact.

Therefore, as the legislature was without authority to alter the compact, the amendment to section 1584 is a legal nullity. If the General Assembly had desired to enact legislation independent of the compact, which provided for the suspension of operating privileges as a result of out-of-state offenses, it could have chosen to do so. However, where the license suspension is based upon the compact, there must be compliance thereto.

Thus, the court rejects the department’s claim that section 1584 lessens and/or revokes the requirements for reporting an out-of-state conviction. Since the report from Ohio failed to include the requisite information in accordance with article III of the compact, the department was without basis to suspend Longstreth’s operating privileges, and Longstreth’s appeal will be sustained.

Hence this order:

ORDER

And now, October 28, 1999, it is hereby ordered and decreed since the report from Ohio, as a party state to the driver’s license compact, failed to include the requisite information in accordance with article III of the compact, the Department of Transportation was without authority to suspend the operating privileges of William E. Longstreth, and Longstreth’s appeal is therefore sustained.

      . Ohio is a party state having enacted the driver’s license compact on My 1,1987. See Ohio Rev. Code Ann. §4507.60 (Baldwin 1999).

      . This section provides as follows:

        “Section 1550. Judicial review

        “(a) General rule. — Any person who has been denied a driver’s license, whose driver’s license has been canceled or whose operating privilege has been recalled, suspended, revoked or disqualified by the department shall have the right to appeal to the court vested with jurisdiction of such appeals by or pursuant to title 42 (relating to judiciary and judicial procedure). The appellant shall serve a copy of the petition for appeal, together with a copy of the notice of the action from which the appeal has been taken, upon the department’s legal office.

      . We also find meritless the department’s claim that the amendment to section 1584 was needed because the department has no control over the information it receives from party states such as Ohio. Article VII of the compact provides that the administrators of the compact from each state “shall have the power to formulate all necessary and proper procedures for the exchange of information,” and that the administrator from each state “shall furnish to the administrator of each other party state any information or documents reasonably necessary to facilitate the administration of the compact.” 75 Pa.C.S. §1581, article VII(a) and (b). In addition to article VII, Ohio has a specific statute which states that “the bureau of motor vehicles shall furnish to the appropriate authorities of any other party state any information or documents reasonably necessary to facilitate the administration of articles HI, IV, and V of the compact set forth in section 4507.60 of the Revised Code.” Ohio Rev. Code Ann. §4507.62 (Baldwin 1999).

      . The court also notes that 75 Pa.C.S. §1584, as amended, has a problem with its title. Section 1584 is entitled “Furnishing of information to other states.” However, the December 21, 1998 amendment to section 1584 deals with information received from other party states. Article III, Section 3 of the Pennsylvania Constitution provides:
      “No bill shall be passed containing more than one subject, which shall be clearly expressed in its title, except a general appropriation bill or a bill codifying or compiling the law or a part thereof.” (emphasis added) Under Article m, Section 3 a tide is constitutional if it puts a reasonable person on notice of the general subject matter of the act. In re Condemnation by PennDOT, 511 Pa. 620, 626, 515 A.2d 899, 902 (1986). A title need not be an index or synopsis of an act’s contents. Id. If a title is to be declared unconstitutional, it must be shown either that: (1) the legislators and the public were actually deceived as to the act’s contents at the time of passage, or (2) that the title on its face is such that no reasonable person would have been on notice as to the act’s contents. The amendment to section 1584 is clearly misleading, and does not give notice that it also deals with reports received from party states.

      . The reporting requirements of article III are an integral part of the compact. Only where the reporting state sufficiently identifies the individual, describes the violation including the section of the statute, code, or ordinance violated, and identifies the court with the resulting disposition, can a determination be made whether the offense is substantially similar. Without such information, there would be no means to make any such comparison, and suspensions could be imposed for an unknown variety of offenses.


author: WALLACH MILLER, J.,

text:
    LaVigne v. Wise
    C.P. of Monroe County,
    no. 3898 Civil 1998.

      William A. Watkins, for plaintiff.

      Barbara H. Beringer, for defendant.
    September 29, 1999
   WALLACH MILLER, J.,

Plaintiff, Marcel LaVigne, and defendant, Joan Wise, were married among white sand beaches and sparkling Caribbean waters on December 6, 1996 in St. Ann’s Parish, Jamaica. Prior to the wedding, plaintiff gave defendant a diamond engagement ring. About six weeks after the wedding, the couple separated and Wife filed a complaint under the Divorce Code requesting a civil annulment alleging she was induced into the marriage by fraud and that plaintiff had a sexually transmitted disease. Plaintiff did not oppose the annulment, which was entered by decree of the Honorable Elizabeth Ehrlich of the Court of Common Pleas of Berks County, Pennsylvania on December 31, 1997.

Plaintiff, former Husband, has commenced this action by filing a complaint on July 7, 1998 alleging that defendant is wrongfully in possession of his personal property, to wit: one diamond ring and one wedding band, and despite his demands that she return them, she hasn’t. Count II alleges her wrongful retention of these rings resulted in an unjust enrichment to her and a detriment to the plaintiff in an amount slightly exceeding $8,000.

Defendant filed an answer on July 20, 1998 claiming the rings were a gift to her from the plaintiff and denying that she was in any way wrongfully withholding his property. Furthermore, in her answer she attached a receipt for the diamond ring showing its value at $4,600.

Plaintiff filed a motion for summary judgment on July 6,1999 agreeing that the diamond was worth $4,600. He further alleged that there were no issues of material fact involved and he was entitled to summary judgment as a matter of law. Defendant filed an affidavit in support of her motion wherein she included a copy of the receipt for the wedding ring showing its value at $799. She also attached a copy of the master’s report in annulment as well as the decree granting the annulment.

Both parties filed briefs, and we heard oral argument on this motion on September 7, 1999. We are now prepared to dispose of plaintiff’s motion for summary judgment.

The issues raised in this case are a first impression for this court, and after extensive research, perhaps for the Commonwealth of Pennsylvania as well. Under Pennsylvania Rule of Civil Procedure 1035.2, summary judgment is appropriate where no genuine issues of material fact as to a necessary element of the cause and action have been raised. The rule provides, in part, as follows:

“After the relevant pleadings are closed, but within such time as not to unreasonably delay trial, any party may move for summary judgment in whole or in part as a matter of law:
“(1) Whenever there is no genuine issue of any material fact as to a necessary element of the causes of action or defense which could be established by additional discovery or expert report, or
“(2) if, after the completion of discovery relevant to the motion, including the production of expert reports, an adverse party who will bear the burden of proof at trial has failed to produce evidence of facts essential to the cause of action or defense which in a jury trial would require the issues to be submitted to a jury.”

Summary judgment should be granted only in the clearest of cases, where the right to it is free and clear from doubt. Pennsylvania Gas and Water Co. v. Nenna and Frain Inc., 320 Pa. Super. 291, 467 A.2d 330 (1983); Weiss v. Keystone Mack Sales Inc., 310 Pa. Super. 425, 456 A.2d 1009 (1983). The party moving for summary judgment has the burden of demonstrating that no genuine issue of material fact exists and that he or she is entitled to summary judgment as a matter of law. Thompson Coal Co. v. Pike Coal Co., 488 Pa. 198, 412 A.2d 466 (1979).

In this case, the material facts are not in dispute. Particularly, there is no dispute that plaintiff gave an engagement ring to the defendant some time prior to December 1996. There is no dispute that the parties were then married and plaintiff gave defendant a wedding ring. There is no dispute that they lived together approximately 40 days in Monroe County and soon thereafter defendant sought and was granted an annulment.

Our research uncovers that the gift of an engagement ring is subject to implied conditions, and if those conditions were not met, the law requires the rings return if the marriage did not take place. Lindh v. Surman, 702 A. 2d 560 (Pa. Super. 1997). In this case, Mr. Lindh gave an engagement ring to Ms. Surman and later changed his mind and called off the wedding. Notwithstanding his cold feet, the court held that the ring was a conditional gift and he should be given the ring or its worth by Ms. Surman. Here, plaintiff argues that since the annulment voids the marriage, he is entitled to the rings.

The effect of an annulment is declarative of an existing status; it does not create a new relationship or sever a prior one. Faivre v. Faivre, 182 Pa. Super. 365, 128 A.2d 139 (1956). A decree of annulment in reality does not annul the marriage, as it does not speak only from the date of the annulment, it declares that the marriage was void ab initio — from the very beginning. It does not create a new status, but, on the contrary, affirms that there has been no change in status. A nullity in law cannot be measured by degrees; it is absolute, implying that the thing had no legal existence. A decree in annulment is no more than a declaratory judgment, judicially determining with certainty and finality that there never was a valid marriage. Commonwealth ex rel. Knode v. Knode, 149 Pa. Super. 563, 27 A.2d 536 (1942).

Here, the parties actually did get married, and at that time the condition was met and defendant vested in the gift of the rings. However, as set forth above, the legal effect of an annulment makes the wedding a non-event, and any rights stemming therefrom are divested and void. The effect of the annulment returns the parties to that state they were in prior to the marriage — in this case, they were engaged. However, we can infer from defendant’s actions requesting the annulment that she no longer wishes to be engaged to the plaintiff.

A civil annulment is a rarity in the Commonwealth these days. Research among the annals of Pennsylvania case law did not uncover anything specifically on point, however, our brethren in Ohio have dealt with this issue and as such, this is where we find precedent.

In Zsigmond v. Vandemberg, (1995 Ohio App. Lexis 5855), the Appellate Court of Ohio held that where a marriage between the engaged parties does occur but was subsequently annulled, the court may interpret this to mean that the marriage never occurred and may order the return of engagement gifts on the theory that they were conditional on the marriage and should be returned to the donor upon the termination of the relationship. The court further noted that state courts have generally held that an engagement ring is considered a conditional gift, made in contemplation of marriage, and that when the condition of marriage is not fulfilled, the donee is required to return the ring to the donor unless the donor expressly tells the donee that she can keep it. In Zsigmond, the court ordered a big-screen television valued at over $2,000, which was given in contemplation of marriage, to be returned to the donor following the annulment of the marriage.

In the case we have before us, the rings were given in contemplation of marriage, and the record does not reflect any express promise by plaintiff to defendant with respect to the rings. As such, plaintiff is entitled as a matter of law to the return of the rings or their value.

While this court commiserates with defendant in light of her vicissitudinary situation, she has raised no material issues of fact. Accordingly, we enter the following order.

ORDER

And now, September 29, 1999, plaintiff’s motion for • summary judgment is granted.


author: GORDON, J.,

text:
    Franks v. Brownstein

      Nancy G. Rhoads, for plaintiff.

      Francis J. McGovern, for defendant.
    October 20, 1999
   GORDON, J.,

This is an action for medical malpractice for the alleged failure to diagnose the plaintiff’s kidney disease. This suit was brought by the plaintiff, Kenneth Franks Jr., seeking damages from the defendant, his doctor, Bernard Brownstein M.D. After a trial before this court and a jury, the jury returned a verdict in favor of the defendant. The plaintiff filed timely post-trial motions requesting a new trial. The post-trial motions were subsequently denied.

Factually, Franks had been a patient of Brownstein since March 1979 when he was 5 years old. Brownstein was the primary care physician in Franks’ HMO. In March 1990, Franks went to see Brownstein because he was experiencing hair loss. After a series of approximately 40 tests all returned normal, Brownstein diagnosed Franks with early male pattern baldness. In August 1990, Franks went to Brownstein because of genital herpes and secondary bacterial infection. He was prescribed medication for this condition. Approximately six months later Franks went to Brownstein because he had been experiencing a penile discharge and difficulty urinating for approximately one month. He was diagnosed with non-specific urethritis as a result of the herpes and prescribed antibiotics. In May 1991, Franks again went to Brownstein, this time complaining of itchy eyes, nasal discharge, sneezing and running nose. He was diagnosed with an allergy and given a prescription medication for the head symptoms. He also complained again of dysuria for which Brownstein prescribed a different antibiotic. Four months later, in September 1991, Franks went to see Brownstein to get a tuberculosis test that was needed for work. He was scheduled to return in three days for results of that test, but did not keep that appointment. Franks returned on October 9, 1991, again because of genital redness. Brownstein diagnosed a fungal infection and prescribed antifungal medication. In November 1991, Franks returned with complaints of head congestion, swollen face, dry and sore throat. He was prescribed allergy medication and Brownstein recommended a humidifier for the dry air in his home. When Franks returned three months later in February 1992 complaining of the same symptoms, Brownstein questioned him about the medication and humidifier and Franks informed him that neither had been purchased or used. Brownstein made the same diagnosis and again recommended that Franks take the antihistamine and get a humidifier for the dry air in his home.

On November 10, 1992, Franks was admitted to the emergency room at Germantown Hospital and a biopsy of the kidney revealed end-stage renal disease, requiring dialysis and a kidney transplant.

Franks avers that Brownstein breached his duty of care in failing to diagnose his kidney disease as early as February 1991 and had such diagnosis taken place, effective early treatment would have reduced the need for a transplant. After the jury’s verdict, Franks appealed alleging that this court abused its discretion with the following two rulings:

“(a) Precluding plaintiff’s expert nephrologist from testifying because the expert report was presented beyond the trial management deadline; and
“(b) Precluding plaintiff from offering impeachment evidence from a medical text during cross-examination of defendant’s expert.”

STANDARD OF REVIEW

The standard for reviewing a trial court’s determination that a new trial should not be granted is whether the trial court clearly and palpably abused its discretion or committed an error of law that impacted the jury’s verdict. Walsh v. Kubiak, 443 Pa. Super. 284, 661 A.2d 416 (1995); Melso v. Sun Pipe Line Co., 394 Pa. Super. 578, 576 A.2d 999 (1990), appeal denied, 527 Pa. 667, 593 A.2d 842 (1991).

An abuse of discretion requires more than a mere error in judgment. The trial court’s ruling must be either manifestly unreasonable, or based on prejudice, bias, ill will or partiality. Simmons v. Simmons, 723 A.2d 221, 222-23 (Pa. Super. 1998) (citing Spitzer v. Tucker, 404 Pa. Super. 539, 591 A.2d 723 (1991), appeal denied, 530 Pa. 645, 607 A.2d 255 (1992)).

I. Expert Not Allowed To Testify Because Report Offered Beyond Deadline

In order to determine if preclusion of the plaintiff’s expert is grounds for a new trial under the standard of review cited above, we must answer three questions and in the following order:

“(1) Would allowing the plaintiff’s expert to testify have been incurably prejudicial to the defendant?
“(2) If not incurably prejudicial, was precluding the expert an abuse of discretion by this court?
“(3) If an abuse of discretion did occur, was the error harmful?”

First, as historical background, Philadelphia County and the First Judicial District of Pennsylvania is one of the busiest court districts in the nation. In 1992 there were 43,752 pending civil cases. As a result, new reduction strategy procedures were designed for the efficient disposition of the pending civil docket. Part of the procedure included a case management order. The case management order starts out with a stem note to the attorneys that failure to comply with requirements may have a serious adverse effect on the case. Further, requests for continuances of deadlines set out in a trial management order are carefully scmtinized and usually granted only upon a showing of extreme impact on the case or otherwise unavoidable and extenuating circumstances. See also, Pa.R.C.P. 4003.5(b).

The trial management order in the present case, issued by the Honorable William J. Manfredi, was filed April 17, 1997 and required the plaintiff to submit all expert reports no later than July 31, 1997. The plaintiff appeals this court’s denial of testimony of an expert whose report was not presented until September 27,1997, one month before trial was scheduled to begin. The plaintiff offered no credible extenuating circumstances why the report was submitted two months after the deadline. The defendant’s objection based on prejudice from delay was sustained.

Although plaintiff’s analysis of the case law regarding last minute expert testimony is applicable in some instances, this case is not one of those moments. The use of a trial management order is not simply to provide a framework for the convenience of the parties and their attorneys, but also to achieve an efficient administration of justice in an overburdened judicial system. The plaintiff had a burden to meet in showing this court that something other than a lack of diligence was why a second expert was not identified between April 17 and July 31, 1997. No tenable offer of necessity was provided. In fact, when asked, plaintiff’s counsel answered that testimony of the plaintiff’s expert nephrologist was important in order to rebut the testimony of the defendant’s expert nephrologist. However, upon motion by the plaintiff, the defendant’s expert nephrologist report was also denied because it was outside the time frame of the trial management order. Further, there was nothing in the plaintiff’s expert report that rebutted the causation factors of the defendant’s expert report.

Second, assuming, arguendo, that any prejudice was curable, the next question is whether the decision of the trial court to preclude the report and testimony was an abuse of discretion. The Superior Court has stated that the rule “specifically provides that the presiding court must balance the facts and circumstances of each case to determine the prejudice to each party.” McDaniel v. Merck, Sharp & Dohme, 367 Pa. Super. 600, 615, 533 A.2d 436, 444 (1987) (quoting Feingold v. SEPTA, 512 Pa. 567, 573, 517 A.2d 1270, 1273 (1986)). Furthermore, the court should consider factors such as surprise, ability to cure, disruption of the efficient flow of the trial and bad faith. There is no absolute red line rule as to when or what sanctions should be imposed for failure to complete discovery of expert reports and witnesses under Rule 4003.5. Id. It becomes a question of discretion for the trial judge.

This court ruled that the expert reports received after the case management deadline of both plaintiff and defendant were excluded. The decision of this court survives both the balancing test outlined above and the standard of review for abuse of discretion in that there was no misapplication of the law nor any bias or partiality.

Third, the last question is necessary only if this court had determined that an abuse of discretion occurred. Whether there was harmful error must dictate the granting of a new trial, despite any abuse of discretion.

The plaintiff’s expert nephrologist begins his report by stating that the report addresses the following areas in response to the plaintiff’s specific request:

“(1) What procedures and treatment was [sic] necessitated by the renal failure[?]
“(2) What treatment and monitoring will be necessary in the future as a result of Ken’s conditional
“(3) What is the projected cost of these[?]
“(4) What limitations and complications can be expected[?]
“(5) Can Ken suffer any pain with his future condition[?]
“(6) How is Ken’s life expectancy is [sic] affected[?]”

Each of the questions addressed above by plaintiff’s expert goes to the issue of damages. Such testimony, no matter how riveting and credible, did not impact the jury’s verdict as the issue of damages was not considered. Upon the first question on the jury sheet, the jury answered no as to whether Brownstein was negligent.

Question number 3 which asked the jury to assess damages was not reached and, therefore, had this court abused its discretion in precluding the expert from testifying, such abuse was harmless error.

II. Cross-Examination of Expert Using Medical Text

The plaintiff avers that the trial court committed error when it would not let the defendant’s expert be impeached using an authoritative text that was in contradiction to the expert’s testimony. However, the defendant’s expert stated that he did not consider the treatise an authority in the field. Under such circumstances, proper authenticating grounds must be laid prior to impeaching an expert with a medical text. McDaniel v. Merck, Sharp & Dohme, 367 Pa. Super. 600, 533 A.2d 436 (1987).

During trial, the plaintiff’s attorney cross-examined the defendant’s medical expert, Dr. Gilbert Grossman, on the duty of care. In attempting to set a foundation for impeachment of his testimony, plaintiff’s counsel asked a series of questions regarding the authoritativeness of a particular text. The expert would not agree that the text was an authority in the medical community but stated that it was an accepted text in the field. In fact, Dr. Grossman testified that not only did he not consider the text an authority, but that he had not personally used it as a reference tool for years. N.T. 10/29/97 p. 42.

Although an expert’s opinion can be tested or impeached with authoritative works, proper foundation must be presented to show that, in fact, the expert considers the text authoritative. In the case of Wheeling-Pittsburgh Steel Corporation v. Commonwealth of Pennsylvania, 51 Pa. Commw. 393, 414 A.2d 776 (1980), an expert witness on air quality was cross-examined regarding a particular article from the American Bar Association’s Natural Resource Section. When the expert testified that he did not consider the article authoritative, the court indicated that counsel could not use the article for impeachment purposes. The Commonwealth Court agreed stating “An expert witness may be cross-examined on a work that he or she relied on in forming an opinion and on any work the witness recognizes as authoritative in the field.” Id. at 395, 414 A.2d at 777 (citing Brannon v. Lankenau Hospital, 254 Pa. Super. 352, 385 A.2d 1376 (1978)).

The court went on to state that where neither of the above tests are met, then reference to, or use of, the material during cross-examination is improper unless there is some other evidence that the work is authoritative. Id. In McDaniel, supra at 621-22, 533 A.2d at 447, the Superior Court stated:

“It is also proper to show that an expert is unfamiliar with the literature in a particular field.... Alternatively, as long as appellant has produced her own expert to verify that the particular publications are authoritative in the field, an expert witness may be tested by reference to those publications.” (citing Evanuik v. University of Pittsburgh Western Psychiatric Institute and Clinic, 234 Pa. Super. 287, 338 A.2d 636 (1975)).

The purpose of impeachment in the present case was to affect the credibility of the witness and to show that the expert’s conclusions were contrary to the prevailing medical view. However, the plaintiff had other means available for which to authenticate the treatise as an authority and chose not to do so. We believe we gave plaintiff’s counsel ample opportunity to have Dr. Grossman authenticate the text. Counsel’s attempt to have him concede the book was an accepted authority in the field met with repeated unsuccess. After the third attempt, this court sustained the defendant’s objection and terminated the questioning in this area.

It is within the trial court’s discretion to determine the point at which further cross-examination would be unproductive. Downey v. Weston, 451 Pa. 259, 301 A.2d 635 (1973). After the expert thrice denounced the text as authoritative, this court determined it was time for plaintiff to move along, and so ruled.

Based on the foregoing, the plaintiff did not meet the burden of showing an abuse of discretion or misapplication of the law and therefore his request for a new trial was denied.

      . The defendant was ordered to submit all expert reports by August 31, 1997. The one expert who was allowed to testify for the defendant submitted a report on August 21, 1997, in advance of the defense deadline.

        . Harrison’s Text on the Principles of Internal Medicine.


author: GARDNER, P.J.,

text:
    Erie Insurance Exchange v. Karoly
    C.P. of Lehigh County,
    no. 96-C-0892.

      Marvin O. Schwartz, for plaintiff.

      Edward R. Eidleman, for defendants.

      April 9, 1999
   GARDNER, P.J.,

This matter is before the court on the motion for summary judgment on behalf of Peter J. Karoly, Joseph Pulcini Jr., Michele R. Killian, and Peter J. Karoly & Associates, filed November 2,1998. Oral argument was held December 11,1998, and March 12 and 15, 1999. For the reasons expressed below, we deny the motion.

This is an action for fraud by plaintiff insurance company against defendant attorneys in connection with the settlement of an underinsured motor coverage claim resulting from a motor vehicle accident.

On May 1, 1993, Dean Stern was operating a motorcycle owned by Kimberly J. Catón, who was riding as a passenger. The motorcycle collided with a vehicle driven by Lorraine Semmel. Unfortunately, Miss Catón was killed in the accident and Mr. Stem was injured.

At the time of the accident, the motorcycle was insured by plaintiff with an underinsured motorist coverage of $100,000 per person. The policy included an exhaustion clause which provided that when a claim involved an underinsured motorist claim, plaintiff would not pay benefits until all other policies had been exhausted. The policy also provided that in the event of a fraudulent claim, plaintiff would not make any payment for the accident.

Plaintiff contends that defendant Karoly committed fraud in a telephone conversation with Hugh Gallagher, a claims adjuster of plaintiff, prior to December 16,1993. At that time, defendant Karoly allegedly represented to Mr. Gallagher that CNA Insurance Company, the insurance carrier for Lorraine Semmel, had agreed to settle Mr. Stem’s claim. Defendant Karoly then demanded the underinsured motorist benefits under the insurance policy carried by plaintiff.

Plaintiff also contends that on April 18,1994, Mr. Stem executed an underinsured motorist release in favor of plaintiff, and that on April 28,1994, Mr. Stern executed a joint tort-feasor release in favor of Lorraine Semmel. Plaintiff alleges that defendant Pulcini instmcted his secretary Michele Killian to forward the documents. Defendant’s contend that both documents were sent to plaintiff and neither release was sent to CNA.

Plaintiff alleges that defendants represented that CNA had settled the case by payment of its full $300,000 policy limit: $225,000 to the Catón estate and $75,000 to Mr. Stem. Thereafter, on May 2, 1994, plaintiff sent defendant Karoly a check for $100,000 in settlement of the underinsured motorist claim.

Plaintiff avers that in June 1994, defendant Karoly contacted CNA and demanded that CNA tender the policy limits. CNA refused and indicated it never agreed to settle the claims. Plaintiff alleges that defendants did not inform plaintiff that CNA refused to tender the policy limits. Plaintiff contends that defendants committed fraud by representing to plaintiff that CNA had settled the claim against Lorraine Semmel by tendering its policy limits when, in fact, CNA had not.

In their motion, defendants contend that they are entitled to summary judgment because there is no genuine issue of material fact as to whether fraud occurred, because the exhaustion clause was satisfied and because plaintiff has not established damages. We disagree.

To deny coverage under an insurance policy based upon a misrepresentation, the insurer must establish: (1) that the representation was false, (2) that the subject matter was material to the risk, and (3) that the person making the statement knew it to be false or made the representation in bad faith. Tudor Insurance Company v. Township of Stowe, 697 A.2d 1010 (Pa. Super. 1997).

In this case, defendants contend that Leslie K. Romas-co, a claims adjuster for CNA, offered to settle the claims against Lorraine Semmel during a telephone conversation. Thus, defendants contend that they believed a settlement had been reached and, therefore, they contacted plaintiff and advised plaintiff of the settlement. Defendants contend that at most their representation to plaintiff was a mistake, but was not fraudulent.

However, plaintiff contends that Miss Romasco denies that the conversation occurred and denies that she offered to settle the claim on behalf of CNA. (Notes of Testimony of Leslie Romasco, September 10, 1998, pp. 114,123,131-32,135.) Thus, there is a genuine issue of fact as to whether defendants’ representation that a settlement had occurred was false and whether defendants knew that the representation was false or whether they were merely mistaken. Accordingly, summary judgment is not appropriate on plaintiff’s claim for fraud.

Next, we turn to defendants’ claim that the exhaustion clause of the insurance policy was not violated. Defendants contend that the exhaustion clause of the Catón insurance policy did not require Mr. Stern to settle with CNA as a precondition for the settlement of his underinsured motorist claim with plaintiff. Therefore, defendants contend that it is irrelevant that Mr. Stem did not actually settle his claim against Lorraine Semmel until June 12, 1996, two years after plaintiff paid its under-insured motorist benefits to Mr. Stern.

An exhaustion clause is a condition precedent which precludes an insured from recovering underinsured motorist benefits unless his damages exceed the maximum liability coverage provided by the liability carriers of other drivers involved in the accident. However, an exhaustion clause does not bar an insured who settles his claim against the tort-feasor’s liability carrier for less than policy limits from recovering underinsured motorist benefits, provided the underinsured motorist carrier is credited the full amount of the tort-feasor’s liability coverage against the insured’s damages. Boyle v. Erie Insurance Company, 441 Pa. Super. 103, 656 A.2d 941 (1995).

More simply stated, if an insured settles a claim against a third-party’s liability coverage for less than the policy limits, the underinsured motorist carrier may apply the full amount of the liability coverage to the insured’s damages before the underinsured motorist carrier is obligated to pay benefits. If the insured’s damages do not exceed the full amount of the liability coverage, the underinsured motorist carrier is not obligated to pay benefits.

However, while the insured is not obligated to settle his claim for the full policy limits to satisfy an exhaustion clause, the insured is required to actually settle his claim before a claim may be made for underinsured motorist benefits. In Boyle, supra, the Superior Court of Pennsylvania held that an exhaustion clause is a “threshold requirement” which must be satisfied before recovery of underinsured motorist benefits could be had. See also, Kelly v. State Farm Insurance Company, 447 Pa. Super. 214, 668 A.2d 1154 (1995); Chambers v. Aetna Casualty and Surety Company, 442 Pa. Super. 155, 658 A.2d 1346 (1995).

Defendants contend that settlement of an insured’s claim against the liability carrier is not actually necessary to satisfy a condition precedent exhaustion clause. Defendants rely on Leon v. Nationwide Insurance Company, 25 Phila. 557 (C.P. Philadelphia 1993), aff’d, 434 Pa. Super. 675, 640 A.2d 479 (1993), to support their argument.

The Leon decision could be interpreted to find that an exhaustion clause is satisfied, even if no settlement with the liability carrier actually occurred, provided that the under-insured motorist carrier is given credit against the insured’s claim for damages for the entire amount of the liability coverage. However, this interpretation of the Leon case is contrary to the subsequent, well-reasoned decisions of the Superior Court of Pennsylvania which have held that an exhaustion clause is a “threshold requirement.” Boyle, supra; Kelly, supra; Chambers, supra. Moreover, the Leon decision is a decision of the Court of Common Pleas of Philadelphia County which was affirmed by the Superior Court without explanation.

Accordingly, we are constrained to follow the more recent cases of the Superior Court which have found that an exhaustion clause is satisfied only after the actual settlement of the underlying liability claim. Id. For all the foregoing reasons, summary judgment is inappropriate.

Finally, we turn to defendants’ contention that summary judgment should be granted as to all of plaintiff’s claims because plaintiff cannot establish damages. Defendants argue that because Mr. Stem eventually settled his claim against CNA on June 12, 1996 for the exact amount that defendants represented CNA had settled for in 1993, plaintiff would have been obligated to pay Mr. Stem underinsured motorist benefits in 1996. Therefore, defendants contend that plaintiff was not prejudiced by paying Mr. Stem benefits on May 2,1994 and that plaintiff can establish no damages. Additionally, defendants argue that plaintiff cannot establish sufficient evidence of outrageous conduct to support an award of punitive damages.

As discussed above, under the Catón policy, plaintiff is not obligated to pay benefits if a fraudulent claim is made. Thus, if plaintiff can establish at trial that defendants did in fact commit fraud, plaintiff would be entitled to recover the amounts previously paid to Mr. Stem. Moreover, if plaintiff establishes that defendants committed fraud, plaintiff could recover punitive damages. McClellan v. Health Maintenance Organization of Pennsylvania, 413 Pa. Super. 128, 144, 604 A.2d 1053, 1061 (1992), alloc. denied, 532 Pa. 664, 616 A.2d 985 (1992).

Furthermore, even if plaintiff cannot establish that it was entitled to deny coverage, if plaintiff can establish that the exhaustion clause was not satisfied when plaintiff paid benefits to Mr. Stern on May 2, 1994, plaintiff could recover damages for its lost interest between May 2, 1994 and the time when plaintiff was actually obligated to pay benefits. Accordingly, summary judgment is not appropriate.

ORDER

Now, April 9,1999, upon consideration of the motion for summary judgment on behalf of Peter J. Karoly, Joseph Pulcini Jr., Michele R. Killian, and Peter J. Karoly & Associates, filed November 2, 1998, upon consideration of the briefs of the parties, after oral argument held December 11,1998, and March 12 and 15,1999, and for the reasons expressed in the accompanying opinion, it is ordered that the motion for summary judgment is denied.

      . The motion for summary judgment was previously granted in favor of defendant Killian, and defendant Killian was dismissed as a party to this lawsuit by order of the undersigned entered December 11, 1998 by agreement of the parties.