source: Caselaw Access Project

author: TYLWALK, P.J.,

license: Public Domain

text:
    Auman v. Erie Insurance Co.

      C.P. of Lebanon County,
    No. 2011-00922

      Edward J. Coyle, for plaintiffs

      Stephen L. Banko, for defendant Erie Insurance Company.

      Henry F. Canelo, for defendant Consolidated Insurance Services, Inc.
    Aug. 7, 2014
   TYLWALK, P.J.,

1. Pursuant to Pa.R.C.P. No. 1035.2, a party may move for summary judgment when the evidentiary record reveals that the moving party is entitled to judgment as a matter of law.

2. Summary judgment may be granted only in cases where the right is clear and free from doubt. The moving party has the burden of proving the nonexistence of any genuine issue of material fact. The court is required to view the record in the light most favorable to the nonmoving party and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party.

3. Where the non-moving party bears the burden of proof on an issue, he may not merely rely on his pleadings or answers in order to survive summary judgment; rather, he must present depositions, affidavits, or other acceptable documents that show the existence of factual issues for the jury’s consideration.

4. The court ruled that the plaintiffs had come forth with sufficient evidence to indicate the existence of factual disputes which precluded the entry of summary judgment on the count for breach of contract.

5. In order to establish a claim under the Unfair Trade Practices Law, a plaintiff must prove that the defendant was engaged in unfair methods of competition and unfair or deceptive acts or practices and that the transaction between the plaintiff and defendant constituted trade or commerce within the meaning of the Unfair Trade Practices Law.

6. The insurance industry is a trade or commerce within the coverage of the Unfair Trade Practices Law.

7. Under Pennsylvania law, only malfeasance, the improper performance of a contractual obligation, raises a cause of action under the Unfair Trade Practices law.

8. An insurer may be held liable only if there are fraudulent misrepresentations in order to sell a policy or some other form of misfeasance; an insurer is not liable for a simple failure to perform, which amounts to nonfeasance.

9. The court stated that the essence of plaintiffs’ claim is that defendant failed to perform its duty to update the coverage as construction costs increased over time and that this failure to perform constitutes nonfeasance, not malfeasance of defendant’s alleged duties. Consequently, there is no cause of action under the Unfair trade Practices Law and the court granted summary judgment on this claim.

10. An expert witness is a witness who possesses knowledge not within ordinary reach or understanding, and who, because of this knowledge, is specially qualified to address a particular subject. An expert may offer an opinion on a subject which is so distinctly related to some science, profession, business or occupation, that it is beyond the understanding of the average layperson.

11. The primary purpose of expert testimony is to assist the trier of fact in understanding complicated matters. Necessity is fundamental to the admissibility of opinion evidence. If the facts can be fully and accurately described to the fact-finder, who, without special knowledge or training, is able to estimate the bearing of those facts on the issues in the case, then the opinions of witnesses are inadmissible because they are unnecessary in the search for truth.

12. Although the court agreed that there are many situations in which expert testimony is necessary to sustain a cause of action asserted by an insured against an insurance agent, it did not believe that this case is one since the issues are simply whether defendant agreed to keep the plaintiffs’ coverage abreast with the rise in construction and other replacement costs and, if so, whether it was negligent for failing to do so. Consequently, the court denied defendant’s motion for summary judgment on plaintiffs’ count for negligence.

ORDER OF COURT

And now, this 7th day of August, 2014, upon consideration of the motion for summary judgment of Consolidated Insurance Services, Inc., it is hereby ordered that said motion is granted, in part, and denied, in part as follows:

1. The motion for summary judgment with regard to plaintiffs’ claim for breach of contract in Count Two of the complaint is denied.

2. The motion for summary judgment with regard to plaintiffs’ claim for violation of the Unfair Trade Practices and Consumer Protection Law in Count Five of the complaint is granted.

3. The motion for summary judgment with regard to plaintiffs’ claim for negligence in Count Six of the complaint is denied.

Before us is the motion for summary judgment submitted by defendant Consolidated Insurance Services, Inc. (“consolidated”). The pleadings and the record provided by the parties reveal the following facts relevant to our resolution of this motion.

Plaintiffs William F. Auman, Jr. and Carole M. Auman (“the Aumans”) purchased their home at 720 Kimmerlings Road, Lebanon in April 1978. At that time, they purchased a homeowner’s insurance policy for the property from defendant Erie Insurance through a local insurance agent, Reist Insurance Agency (‘Reist”). The Declaration Page of the policy states: “AUTOMATIC ADJUSTMENT OF COVERAGE WAS APPLIED TO DWLG” (Complaint, Exhibit “B”) The policy also provides:

Right and duties — conditions — Section 1, paragraph (3) Automatic adjustment of coverage amounts
This policy provides you with a guard against the effect of inflation in construction costs.
We will keep track of costs and at the next policy period we will adjust the amount of your building coverage if necessary. Adjustments in other coverages (Other structures coverage and personal property coverage) will also be made proportionately. Your premium will be adjusted at each policy period to reflect any change in the amount of insurance.
During the policy period, if there is an increase in construction costs and a loss occurs, we will reflect the increase in the amount of insurance before making payment. There will be no charge for this additional coverage.
However, if for any reason other than inflation or construction costs, the amount of your insurance on your home becomes inadequate, or if you made substantial improvement to your home and failed to notify us to increase the amount of your insurance, the amount of insurance shown on the declarations will be the full amount available should a loss occur.

(Plaintiffs’ brief in opposition to consolidated’s motion for summary judgment, Exhibit “A” at p. 12) At the time of the fire, the declarations page of the policy indicated that the “amount of insurance” for the Aumans’ dwelling was $150,500. (Complaint, Para. 21; plaintiffs’ brief in opposition to consolidated’s motion for summaiy judgment, Exhibit “A” at p. 12)

Consolidated’s motion for summaiy judgment avers consolidated came into existence when its owners purchased Reist in 1986. However, documents filed with the Pennsylvania Department of State, Bureau of Corporations, reflects that Reist’s name had been changed to consolidated in 1984, two years earlier. The Aumans renewed the policy and paid their annual premiums through 2010. The complaint avers that the annual premiums increased during the years the policy was in effect.

The Aumans allege that on October 18, 2010, their home and personal property were severely damaged by fire. Erie determined that the loss was a covered event under the policy and an Erie Claims Adjuster, Deborah Enck, inspected the property in order to assess the damage and determine the value of the personal property which was lost. The post-fire estimate for replacement cost of the home was $201,816.81. However, Eriepaid only $150,500 to the Aumans. The Aumans allege that they relied on the 1978 coverage evaluation and the coverage adjustment provision to ensure that they had adequate coverage but that consolidated failed to establish and adjust the replacement cost coverage to ensure full compensation in the event of a total loss and that they were left severely underinsured.

The Aumans brought this lawsuit alleging causes of action in breach of contract, violation of the unfair trade practices and consumer protection law and negligence against consolidated. Consolidated has filed a motion for summary judgment, claiming that “consolidated had nothing to do with the writing of the policy, the interpretation of the policy, or any aspects of the amount of money paid out by Erie.” (Motion for summary judgment, Para. 15) This motion is presently before us for resolution.

Pursuant to Pa.R.C.P. No. 1035.2, a party may move for summary judgment when the evidentiary record reveals that the moving party is entitled to judgment as a matter of law:

Rule 1035.2. Motion
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 cause 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.

Pa.R.C.P. No. 1035.2. The note to Rule 1035.2 provides, in part that:

The evidentiary record may be one of two types. Under subparagraph (1), the record shows that the material facts are undisputed and, therefore, there is no issue to be submitted to a jury.
Under subparagraph (2), the record contains insufficient evidence of facts to make out a prima facie cause of action or defense and, therefore, there is no issue to be submitted to a jury. The motion in this instance is made by a party who does not have the burden of proof at trial and who does not have access to the evidence to make a record which affirmatively supports the motion. To defeat this motion, the adverse party must come forth with evidence showing the existence of the facts essential to the cause of action or defense.

Pa.R.C.P. No. 1035.2 — Note.

Summary judgment may be granted only in cases where the right is clear and free from doubt. Marks v. Tasman, 589 A.2d 205 (Pa. 1991). The moving party has the burden of proving the nonexistence of any genuine issue of material fact. Thompson Coal Co. v. Pike Coal Co., 412 A.2d 466 (Pa. 1979). The court is required to view the record in the light most favorable to the nonmoving party and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party. Davis v. Pennzoil, 264 A.2d 597 (Pa. 1970).

Where the non-moving party bears the burden of proof on an issue, he may not merely rely on his pleadings or answers in order to survive summary judgment; rather, he must present depositions, affidavits, or other acceptable documents that show the existence of factual issues for the jury’s consideration. DeWeese v. Anchor Hocking Consumer and Indus. Products Group, 628 A.2d 421, 427 Pa. Super. 47 (Pa. Super. 1993) With these general principles in mind, we now examine the defendant’s specific contentions as to summary judgment.

Count Five — Breach of Contract

The Aumans allege that they entered into a contract with Reist to obtain full replacement coverage for their home. They allege that consolidated owed them that obligation as it is, in essence, the same entity as Reist. They allege that consolidated breached this contractual duty by:

(1.) failing to properly advise and provide them with the appropriate insurance benefits for their dwelling, personal property and other damages;
(2.) failing to keep track of building and construction costs and adjust the amount of the dwelling coverage; and
(3.) failing to review the Auman’s dwelling coverage and adjust the amount of coverage accordingly.

(Complaint, Paras. 54-56).

Consolidated argues that the only contract in this matter was between the Aumans and Erie and that there is no evidence of a written or oral contract between the Aumans and consolidated. It argues that the only evidence that the Aumans can present in this regard is that Carole Auman recalls speaking with someone she believes was associated with consolidated, but is unable to recall the details, time, reason for, or substance of that conversation. Consolidated explains that it is likely that this conversation was with a representative of Reist, which was in business for eight years after the initial policy was issued, and that any other conversations were with an adjuster from Erie. Consolidated claims that it is entitled to the entry of summary judgment since there is insufficient evidence to establish the existence of a contract between the Aumans and itself.

The Aumans counter that consolidated has merely continued the same business which had formerly been conducted under the Reist name. In opposition to the motion, they have produced numerous Exhibits indicating that the business’s name was changed to consolidated in 1984, two years prior to the alleged sale. Exhibit “1” to plaintiffs’ response to motion for summary judgment contains a “business entity filing history” submitted to the Pennsylvania Department of State. On that form, consolidated indicates its “entity creation date” as “9/15/78” (when the insurance agency was being operated under the Reist name). (Plaintiffs’ response to motion for summary judgment, Exhibit “1”) That form indicates the “current name” of the business as “Consolidated Insurance Services, Inc.” (Plaintiffs’ response to motion for summary judgment, Exhibit “1”) Exhibit “1” also contains a copy of the articles of amendment — business, filed on June 29, 1984, and certified by the Pennsylvania Department of State, for “Consolidated Insurance Services, Inc.” The application for amendment of articles which was submitted to the corporation bureau indicates that the corporate shareholders of “Miller-Reist Associates, Inc.” had adopted a resolution to amend the name to “Consolidated Insurance Services, Inc.” in 1984. (Plaintiffs’ response to motion for summary judgment, Exhibit “1”) The amendment of the corporate name was approved and evidenced by a certificate of amendment issued by the department of state on June 29,1984. (Plaintiffs’ response to motion for summary judgment, Exhibit “1”)

The Aumans have also provided a copy of consolidated’s response to the following Interrogatorries:

21. Commencing with the date of the policy’s inception and October 18, 2010, did defendant, Consolidated Insurance Services, Inc. consider itself an agent of the plaintiffs or an agent of Erie Insurance Company, Erie Property & Casualty Company, Erie Insurance, Erie Insurance Group, and/or Erie Insurance Exchange?
RESPONSE: Objection, answering defendant is unable to properly respond to this interrogatory as it is unclear what is meant by the term “agent.” Without waiving said objection, when the policy was written in 1978 the agency was named Reist insurance agency, in 1986, Reist became Consolidated Insurance Services, Inc. Consolidated sells homeowners policies from various insurers along with Erie.
28. Did defendant or its representatives ever undertake to evaluate whether plaintiffs homeowners insurance coverage was sufficient to folly compensate plaintiffs in the event of atotal loss? If so, state each such undertaking by identifying the date, manner of communication, and the name of the agency representative who performed such an evaluation.
RESPONSE: During their initial request for homeowners insurance.

(Plaintiffs’ response to motion for summary judgment, Exhibit “3”)

The Aumans contend that Consolidated (which was known as Reist at the time) was acting as an independent agent and/or broker when the Aumans orally procured its services in 1978 and that Consolidated has acknowledged in its reeponse to Interrogatory No. 28 that it undertook the initial evaluation of the home in 1978 which was used to determine the initial level of coverage for the policy. They view this as an admission on the part of Consolidated that it was the entity which existed in 1978 at the inception of the contractual relationship alleged to have existed between these parties. They explain that Consolidated, in its capacity as an independent agent (Consolidated’s response to Interrogatory No. 21), entered a contractual relationship with the Aumans when it agreed to see that the Aumans were adequately covered for replacement value of their property. They argue that Reist’s name change to Consolidated in 1984 and the alleged sale in 1986 did not create a new entity, and that Consolidated merely continued Reist’s business, including the undertaking to see that the Aumans’ policy provided sufficient coverage of their property.

We believe that the Aumans have come forth with sufficient evidence to indicate the existence of factual disputes which preclude the entry of summary judgment on the count for breach of contract. The parties do not differ as to the undertaking to obtain adequate replacement coverage in 1978, but do dispute whether that obligation continued throughout the duration of the policy renewals. Consolidated’s Response to Interrogatory No. 28 indicates that it undertook the initial obligation in 1978, suggesting that it is the same entity. There is no evidence to suggest that Reist’s business and undertakings were affected by its 1984 name change.

We believe that the question of whether Consolidated is a successor to Reist is a question of fact that will have to be decided at trial. It is unclear whether any responsibility, if it continued beyond the initial evaluation of the property, was assumed by the new owners of Consolidated until the time of the fire in 2010 as we have been given no information as to the terms of that transaction. Consolidated has provided no evidence that Reist ceased to exist in 1986 and that it did not simply continue that business after the sale. Clearly, Consolidated continued some portion of the prior business as it renewed the Auman’s policy and accepted premiums after 1986. Thus, we will deny Consolidated’s request for summary judgment on this count.

Violation of Unfair Trade Practices and Consumer Protection Law

In Count Five, the Aumans allege that Consolidated violated the Unfair Trade Practices and Consumer Protection Law, 73 P.S. §201-1 et seq (“Unfair Trade Practices Law”) by:

(a) Engaging in fraudulent conduct which created the likelihood of confusion or misunderstanding on the part of the plaintiffs regarding the insurance benefits to which it was entitled — to wit, falsely assuring the plaintiffs that the coverage they provided would automatically adjust to ensure that they were fully covered;
(b) Engaging in deceit by misrepresenting the terms and condition of coverage to plaintiff;
(c) Failing to extend and pay for coverages provided for in the policy;
(d) Failing to properly keep track of construction costs and adjust the policy accordingly;
(e) Failing to make payment in full for losses that were insured by replacement value coverage;
(f) Failing to properly value and pay the replacement cost of the dwelling loss;
(g)Failing to properly value and pay the replacement cost of the personal property loss;
(h) Failing to properly value and pay the debris removal coverage;
(i) Failing to properly value and pay the trees, shrubs, plants and lawns, replacement coverage;
(j) Advertising and promoting the benefits the its (sic) coverage adjustment feature to improperly induce plaintiffs into purchasing said coverage when Consolidated had no intention of providing reasonable benefits;....

(Complaint, Para. 73 (a)-(j)

Consolidated claims that the evidence fails to demonstrate any violation of the Unfair Trade Practices Law on the part of Consolidated, as the record is devoid of any evidence of deceptive acts or practices. It argues that the only evidence in this regard which has been produced by the Aumans is the following:

(1) Mrs. Auman recalls speaking to a woman named Sheila at Consolidated but cannot recall the substance of any conversations, how often she spoke with the woman or when the conversations took place;
(2) Mr. Auman cannot recall ever speaking to anyone from Consolidated or having received any correspondence from Consolidated.

The Aumans argue that Consolidated has violated this law by failing to adhere to the duties of an independent insurance agent, which includes the failure to comply with its promise secure the adequate insurance coverage for the loss of the Aumans’ home.

In order to establish a claim under the Unfair Trade Practices Law, a plaintiff must prove (1) the defendant was engaged in unfair methods of competition and unfair or deceptive acts or practices, and (2) the transaction between the plaintiff and defendant constituted “trade or commerce” within the meaning of the Unfair Trade Practices Law. 73 P.S. §201-3. The following definitions, which are relevant to the allegations of the complaint, are provided in Section 201-2:

§ 201-2. Definitions
(3) “Trade” and “commerce” mean the advertising, offering for sale, sale or distribution of any services and any property, tangible or intangible, real, personal or mixed, and any other article, commodity, or thing of value wherever situate, and includes any trade or commerce directly or indirectly affecting the people of this Commonwealth.
(4) “Unfair methods of competition” and “unfair or deceptive acts or practices” mean any one or more of the following:
(xxi) Engaging in any ... fraudulent or deceptive conduct which creates a likelihood of confusion or of misunderstanding.

73 P.S. §201-2.

Clearly, the insurance industry is a “trade” or “commerce” within the coverage of this Law. However, we agree with Consolidated that the Aumans have failed to allege or produce any evidence of unfair competition or deceptive trade practices as defined by Section 201-2.

At the time of the fire, the policy clearly stated that the amount of coverage for the Aumans’ home remained at $150,500, the same amount provided in 1978. (Complaint, Para. 21) Thus, there was no representation that the coverage had been adjusted at any time.

Under Pennsylvania law, only malfeasance, the improper performance of a contractual obligation, raises a cause of action under the Unfair Trade Practices law. Caplan v. Fellheimer, Eichen, Braverman & Kaskey, 5 F. Supp. 2d 299 (E.D.Pa. 1998). An insurer may be held liable only if there are fraudulent misrepresentations in order to sell a policy or some other form of misfeasance; an insurer is not liable for a simple failure to perform, which amounts to nonfeasance. Aetna Cas. And Sur. Co. v. Ericksen, 903 F. Supp. 836 (M.D.Pa. 1995). For example, an insurer’s failure to fulfill its contractual duty to defend its insured was considered nonfeasance, rather than malfeasance, and was thus not actionable. Caplan v. Fellheimer, Eichen, Braverman & Kaskey, supra.

The Aumans have failed to produce any evidence to substantiate this cause of action. They allege that Consolidated undertook an obligation to see that their insurance policy provided adequate coverage for the replacement of their home in the event of a loss such as that which occurred in the fire. Their allegations fall short of any fraud involved in the sale of this policy. The essence of their claim is that Consolidated failed to perform its duty to update the coverage as construction costs increased over time. This failure to perform constitutes nonfeasance, not malfeasance of Consolidated’s alleged duties. As such, there is no cause of action under the Unfair Trade Practices Law and we must grant summary judgment on this claim.

Negligence

Consolidated argues that the Auman’s negligence count should be dismissed, as the Aumans have failed to produce expert evidence to support this claim. The Aumans first point to Consolidated’s status as an independent agent and note the duty of an independent agent to their customers:

... it is the law that where an insurance agent or broker promises, or gives some affirmative assurance, that he will procure or renew a policy of insurance under such circumstances as to lull the ‘insured’ into the belief that such insurance has been effected, the law will impose upon the broker or agent the obligation to perform the duty which he has thus assumed.
A plaintiff acquires a cause of action against his broker or agent where the broker ‘neglects to procure insurance, or does not follow instructions, or if the policy is void or materially defective through the agent’s fault....’ The broker, in cases of default, is liable ‘to the same extent as the insurer would have been liable had the insurance been properly effected....

(Plaintiffs brief in opposition to motion for summary judgment, citing Al’s Cafe, Inc. v. Sanders Ins. Agency, 820 A.2d 745, 749 (Pa. Super. 2013). It is their position that no expert testimony is necessary to establish a breach of this duty. After careful consideration of this issue, we agree.

An expert witness is a witness who possesses knowledge not within ordinary reach or understanding, and who, because of this knowledge, is specially qualified to address a particular subject. Bergman v. United Services Automobile Association, 742 A.2d 1101 (Pa. Super. 1999). An expert may offer an opinion on a subject which is “so distinctly related to some science, profession, business or occupation, that it is beyond the understanding of the average layperson.” Id. The primary purpose of expert testimony is to assist the trier of fact in understanding complicated matters. Id. Necessity is fundamental to the admissibility of opinion evidence. Id. If the facts can be folly and accurately described to the fact-finder, who, without special knowledge or training, is able to estimate the bearing of those facts on the issues in the case, then the opinions of witnesses are inadmissible because they are unnecessary in the search for truth. Id.

Consolidated contends that a similar situation was before the trial court in Randazzo v. National Penn Insurance Company, 2011 Phila. Ct. Com. Pl. Lexis 363, aff’d 60 A.3d 848 (Pa. Super. 2012). In that case, the plaintiff sued insurers and two insurance agents alleging negligence and negligent misrepresentation for failing to ensure that his property was adequately covered and for failing to increase coverage to the amount plaintiff had requested. The agents moved for summary judgment on the basis that plaintiff had failed to produce expert evidence. In response, the plaintiff asserted that no expert opinion was necessary to support the claims. The trial court addressed this issue:

Instantly, defendants are licensed insurance ... agents affiliated with the insurance companies. As such, defendants have a general duty to exercise the skill and knowledge normally possessed by members of the insurance profession and a failure to do so will render the company/agent liable for any loss of coverage....
However, when either scientific, technical, or other specialized knowledge beyond that possessed by a lay person will assist the trier of fact of (sic) to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training or education may testify thereto in the form of an opinion.... Plaintiff concedes that he does not have an expert who will testify on his behalf, but contends none is needed.
This motion judge disagrees and opines that the testimony of an expert is essential to aid the jury in understanding the complexities of the insurance practice and policies; and determining the facts in issue, the duty owed by defendants to plaintiff, the alleged breach of said duty, the adequacy of insurer’s investigation of claim, and the actual loss incurred since the knowledge and assessment of these facts are beyond that possessed by laypersons.
In addressing whether expert testimony was required in a bad faith action against an insurer, the Bergman Court stated that although insurance is not so highly technical a field that the public cannot understand at least the general nature of an insurer’s responsibilities, courts have held that expert testimony on the issue of an insurer’s duty of care is necessary where a plaintiff questions the adequacy of an insurer’s assessment of plaintiff’s insurance needs.
Here, in his complaint, plaintiff alleges that defendants breached their duty by, inter alia, failing to use due care in investigating his insurance needs and failing to obtain the coverage that a reasonably prudent insurance agent would have obtained under the circumstances. This allegation alone requires expert testimony, which plaintiff has failed to engage. Further, when considering plaintiff’s negligence claim, a fact-finder would be charged with the responsibility of comparing defendants’ investigation of plaintiff’s insurance needs to that the assessment of the average insurance agent and insurance agency would have provided. Such an assessment is well beyond a layperson’s knowledge. Where defendants’ conduct is being judged by the acceptable insurance investigation standard/practices in the insurance industry, plaintiff must produce an expert to establish the required standard and the alleged deviation from said standard.

Randazzo v. National Penn Insurance Co., supra at 7-11 (emphasis in original, citations omitted).

Although we agree that there are many situations in which expert testimony is necessary to sustain a cause of action asserted by an insured against an insurance agent, we do not believe that this case is one. It is true that the Aumans allege negligence on the part of Consolidated for its failure to abide by the obligation it allegedly undertook to assess the Auman’s insurance needs and to see that they were adequately insured. In establishing this claim, the Aumans need not establish the standard practice of agents in the insurance industry in determining the needs of their clients and how Consolidated failed to comply with those standard practices. Instead, this is a case of malfeasance. Consolidated makes no claim that it took any action whatsoever in this regard, but instead claims that it had no duty to do so. We believe that expert testimony is unnecessary to educate the jury under these facts. The issues are simply whether Consolidated agreed to keep the Aumans’ coverage abreast with rise in construction and other replacement costs and, if so, whether it was negligent for failing to do so.

      . Counts Two, Five and Six, respectively.

      . The Aumans explain that “[i]n the insurance industry there are both captive insurance agents and independent insurance agents. Captive agents are agents that sell the products of only a single company. Independent agents are agents that typically sell the products of several different insurers. Consolidated Insurance Services, Inc., by its own admission of dealing with multiple insurers in its interrogatories (see Exhibit 3, consolidated’s answer to plaintiffs’ first set of interrogatories, Interrogatory Number 21), is not a captive agent but is instead an independent agent. (Plaintiffs’ brief in opposition to consolidated’s motion for summary judgment at p. 4).


author: FOX, J,

text:
    Criswell v. Atlantic Richfield Co.

      Robert E. Paul, for appellant.

      Lauren E. Burke, Edmund K. John and George D. Bruch, Jr., for appellee Sunoco, Inc. (R&M).

      Maureen Rowan, for appellee Atlantic Richfield Co.
    Sept. 22, 2014
   FOX, J,

FACTS and PROCEDURAL HISTORY

The above named plaintiffs appeal this court’s orders of May 27,2014, granting motions for summary judgment filed by moving defendants, Atlantic Richfield Company and Sunoco, Inc. The orders were made final by settlement of the remaining claims on June 3,2014. Plaintiffs brought this suit alleging that Earl Criswell developed lung cancer as a result of exposure to asbestos-containing products manufactured and/or supplied by numerous entities during his lifetime. Two of those entities are moving defendants. Following discovery, moving defendants filed motions for summary judgment which were both granted by this court. This appeal followed.

DISCUSSION

This court properly granted Sunoco’s motion for summary judgment because plaintiff has not established exposure or causation under the Jones Act. The Jones Act provides that “[a]ny seaman who shall suffer personal injury in the course of his employment may, at his election, maintain an action for damages at law, with the right of trial by jury.” 46 U.S.C. app. § 688(a). While defendant contends that plaintiff’s claim under the Jones Act is invalid because any claim must be sought solely under the Longshoremen & Harbor Worker’s Act, 33 U.S.C. § 30104, this court does not need to examine this issue because plaintiff’s claim is submitted and argued solely under the Jones Act. Under the standards of the Jones Act, plaintiff has failed to establish exposure.

In order to establish causation in an asbestos claim under the Jones Act, a plaintiff must show that he was exposed to each individual defendant’s product and the product was a substantial factor in causing the injury he suffered. Lindstrom v. A-C Prod. Liab. Trust, 424 F.3d 488, 492 (6th Cir.2005); citing Stark v. Armstrong World Indus., Inc., 21 F. App’x 371, 375 (6th Cir.2001).). In other words, a plaintiff must come forward with admissible evidence sufficient for a reasonable jury to find that plaintiff was exposed to respirable asbestos in an amount sufficient to cause the disease. Lindstrom supra. A plaintiff also must prove negligence on the part of the premises owner. Here plaintiff does not establish exposure or negligence.

Plaintiff’s evidence is really nothing more than a speculative argument. Plaintiff proves that Criswell sailed on moving defendants vessels, the vessels had asbestos on them, and Criswell occasionally worked upon or near equipment that may have contained or been insulated with asbestos because there was a “high heat application.” Plaintiff then concludes that Criswell must therefore have been exposed to asbestos in amounts sufficient to cause the disease. This is speculative testimony alone is not enough to establish exposure.

For example, when asked Criswell admitted that he has no special training in identifying asbestos by sight. See Dep at p 531. Criswell was also unable to look at dust and determine whether it contained asbestos. Id. Yet, when testifying in connection with exposure from moving defendant Atlantic Richfield, plaintiff testified that he believed the steam lines he worked on were covered in asbestos “because it’s a very serious thing to have pipes that are not covered with some type of asbestos, especially if it’s high pressure or high temperature.” Id. at 590.

When testifying in connection with moving defendant Sunoco, Criswell admitted he did not personally handle insulation material. Id. at 1132. He admitted he didn’t know if the insulation material contained asbestos. Id. at 1166. Criswell further admitted that he did not see any writing on the old material that were removed, and that his only basis for believing the replacement components contained asbestos was their high heat application. Id. at 1170.

The type of testimony is precisely the type of testimony that is too speculative to be accepted by this court. In Samarin v. GAF Corporation, 391 Pa. Super. 240, 571 A.2d 398 (1989), alloc. denied, 524 Pa. 629, 574 A.2d 71 (1990), the Superior Court held that evidence of a materials’ high heat application is insufficient to support the conclusion that the product contained asbestos. The Superior Court further held that “without more facts, it is not reasonable for the trial court to infer that the products must have contained asbestos because they were heat resistant.” Id. at 403. See also Bushless v. GAF Corp., 585 A.2d 496 (Pa. Super. 1990). Here, plaintiff is relying on high heat application without further evidence just as in the aforementioned cases. Therefore summary judgment is proper.

In response to moving defendants’ summary judgment motions, plaintiff filed a memo that largely had nothing to do with the issues raised by moving defendants, and instead merely listed cases that applied to general asbestos issues, similar to a treatise. The only real argument plaintiff argues in response to the motions is that it is general knowledge that moving defendants’ ships contained asbestos. Again, such statements, without more evidence, are not enough to defeat summary judgment.

Further, under the Jones Act, plaintiff needs to produce evidence to show the employer’s negligence played any part in causing the injury. Richards v. Dravo Corp., 249 Pa. Super. 47, 56, 375 A.2d 750, 755 (1977). Plaintiff has failed to produce evidence to meet this standard. In plaintiff’s largely off topic response to the motions for summary judgment, the only argument pertaining to this issue is that the negligence standard is relaxed under the Jones Act similar to the FELA standard applicable to railroad workers without pointing to actual evidence of negligence. Therefore, since plaintiff has failed to establish exposure or causation, summary judgment in favor of moving defendants was proper and should be affirmed.


author: MAIER, J.,

text:
    Renzulli v. Renzulli

      Joyce Ullman, for plaintiff.

      Keith S. Grube, Thomas D. Kenny, Debra G. Speyer and Kenneth W. Richmond, for defendants.
    Oct. 15, 2014
   MAIER, J.,

I. FACTS AND PROCEDURAL HISTORY

After receipt of the Superior Court Opinion, this court unsure of the specific action required of the trial court by the Superior Court Opinion, seeks to clarify items not previously included in the trial court opinion. As indicated, the trial court did not make finding of credibility for all of the witnesses in the above case, and will endeavor to do so in this Supplemental Opinion.

This action to quiet title was initially tried in the Philadelphia Court of Common Pleas before the undersigned judge, and concluded on August 13,2012. At that time the trial court concluded that plaintiff, Geraldine Renzulli, was not credible, and had intentionally sought to circumvent government foreclosure and tax lien procedures to evade the forfeiture of the property located at 1830 East Passyunk Avenue, Philadelphia, PA. The court also found, based on the evidence and testimony, that between 1980 and 2001 the property changed hands six times without ever being placed in plaintiff, Geraldine Renzulli’s name, although she did collect rents and resided in the property. The trial court found in favor of defendants, Frederick Renzulli and Kristin Renzulli, and entered judgment on their counterclaim action in ejectment. All other counterclaims were denied; to wit, on attorney fees, conversion, and unjust enrichment.

Plaintiff, Geraldine Renzulli, filed a post trial motion on August 22, 2012, which was denied by the court on October 2, 2012. On October 31, 2012, plaintiff filed a timely notice of appeal, upon which the court issued a Pa. R.A.P. 1925 (b) order. Plaintiff/appellant, Geraldine Renzulli, filed a voluminous 1925 (b) Statement of Errors Complained of on Appeal, alleging, inter alia, that the court had abused its discretion and misapplied its equitable powers with respect to the doctrine of “unclean hands.”

To the contrary, the trial court as fact finder heard the evidence and simply did not believe the plaintiff had done ought but attempt to evade penalties that the government had imposed to curb the drug trade in Philadelphia, and that plaintiff came to the court with “unclean hands.”

II. THE SUPERIOR COURT OPINION

On appeal the Superior Court has instructed in its June 17, 2014 opinion, Superior Court Docket No. 3148 EDA 2012, that the judgment of the trial court be reversed and that “the case is remanded for proceedings consistent with this adjudication.” The essence of the Superior Court Opinion appears to be that the doctrine of unclean hands is not applicable to this case because the government was not a party, and, did not seek foreclosure during trial, and that determinations of credibility needed to be made with respect to the defendants and other witnesses. It is undisputed that olaintiff, Geraldine Renzulli, and her grandchild, Frederick Renzulli, and his spouse, Kristin Renzulli, the defendants are the sole parties to this action. The Superior Court opines that defendants, Frederick Renzulli and Kristin Renzulli, would be unjustly enriched if they were to be awarded title to the property, because Geraldine has been residing there, and according to her maintaining the property while collecting rents.

There was no evidence presented concerning the amount of the rents collected by plaintiff, nor was testimony presented that the rents were not used by plaintiff to defray the expenses for the upkeep of the property, during her twenty five year occupancy of the property. Plaintiff testified that she paid $10,000.00 to her husband John A. Renzulli to buy out his interest in the property when they separated, Contrary to this, her son Fred Renzulli testified that he paid John A. Renzulli, his father, $10,000.00 not for any interest in the property, but rather to keep his father from harassing his mother, Geraldine Renzulli.

The trial court now seeks clarification of the Superior Court Opinion, which appears to order the trial court to create a constructive trust, in favor of plaintiff/appellant, Geraldine Renzulli, even though she sought to defraud the U.S. government.

The trial court failed to make clear that plaintiff was credible when testifying that the purpose of the various family transfers of the title to the property was to prevent the lawful seizure of the property by the U.S. government, as evidenced by plaintiffs continued testimony in that regard even after the trial court’s criminal warning given to plaintiff during her testimony. However, it is equally clear that she was not credible when she testified that everyone knew the property belonged to her, since the defendants are asserting a right to the property and are seeking ejectment of plaintiff.

The property title question was first raised in this case by the testimony of two witnesses who testified that the property was titled to the then husband of the plaintiff, John Renzulli, as a result of several automobile transfers. While the trial court finds this testimony not credible, it did not make a ruling as there was no other testimony concerning the ownership of the property at the time that transfer occurred, and therefore, did not appear to the trial court relevant in the matter then before the court. The testimony, including that of plaintiff was that John Renzulli expected to be convicted of various drug offenses by the U.S. government and the title was then transferred to various family members to avoid the seizure and sale by the U.S. government resulting from those drug convictions. All of the other testimony presented at trial was credible.

A constructive trust is an equitable remedy that may be applied in quiet title actions to prevent unjust enrichment, and, it appears to be the opinion of the Superior Court here that defendants would be unjustly enriched were they to be found to have title to the property.

According to the opinion of the Superior Court, defendant/appellees did not pay any consideration for the property. Rather, they had an equitable duty to hold it for Geraldine in the form of a constructive trust. The Superior Court has opined that appellant did not operate with unclean hands as to the appellees because the federal government was not involved in the quiet title action. The trial court now seeks clarification of the Superior Court Opinion as set forth below.

III. DISCUSSION SEEKING CLARIFICATION OF SUPERIOR COURT OPINION

It is important to note that the plaintiff waited until the threat of confiscation was removed to initiate this action. Plaintiff was credible when she indicated the reason for the multiple transfers were to hide the property from the U.S. government to thwart the potential confiscation of the property. The action for quiet title is an equitable action and the trial court found that it was simply not equitable to reward a person who admitted several times that the purpose of previous transfers was to hide the property in question from the lawful activities of the federal government. Indeed, the trial court on one occasion even gave the plaintiff warnings that she may be committing a criminal act in pursuing her case, but the plaintiff chose to continue testifying. Therefore, it seems contrary to the public policy of imposing strict sanctions for drug dealing for the plaintiff to now acquire property that has been protected from confiscation by an elaborate shell game of title transfers.

IV. CONCLUSION

Certainly, if the purpose of the Superior Court’s Opinion requires this court to create a constructive trust in favor of the plaintiff, and award the property to plaintiff, who admitted to hiding title to the property to avoid a lawful confiscation by the federal government based on illegal drug activity, the trial court will issue that order. If that is not the intent of the Superior Court Opinion in light of this Supplemental Opinion, then the trial court will follow the determination of the Superior Court. The trial court will await further instructions as to the crafting of its new order based upon the trial, the trial court’s opinions, the Superior Court Opinion, and the requested Clarification of the Superior Court Opinion. Clarification is respectfully requested.


author: GREEN, J.,

text:
    Zamsky v. Dodge

      C.P. of Delaware County,
    No. 2011-002637

      Jerome M. Chaven, for appellant.

      Martin S. Haber and Candidus K. Doughterty, for appellee.
    Nov. 5, 2014
   GREEN, J.,

— Barbara Zamsky, Dodge Premier, Inc., and Premier Platform Tennis, Inc. filed the instant appeal following a June 30, 2014 order granting Jeffrey Sherman’s motion for summary judgment. Appellants’ “statement of errors complained of pursuant to order the 28th day of July 2014” ostensibly parallels Jeffery Sherman’s motion for summary judgment and provides, in relevant part, as follows:

1. The court was in error. The aforesaid motion for summary judgment stated at 11, “Dodge and Anthony retained the services of Sherman, to act as their attorney and assist with the formation of Premier, LLC. Complaint ¶ 24.”
2. The court was in error[.] The aforesaid motion for summary judgment omitted informing the court that discovery has not been completed.
3. The court was in error[.] The aforesaid motion for summary judgment omitted informing the court that the argument of defendant Jeffery Sherman, that his services were as a facilitator only, omits the information that defendant Jeffery Sherman was paid $1500 by check dated 1/13/09 with Dodge Corp. on the memo line.
4. The court was in error. The aforesaid motion for summary judgment omitted informing the court that despite defendant Sherman’s assertion that all electronic records were lost, one e-mail from defendant Sherman came into plaintiffs’ possession by reason of being transmitted on plaintiffs computer.
5. The court was in error. The aforesaid motion for summary judgment omitted informing the court that defendant Jeffrey Sherman was listed on the records of the Department of State of the Commonwealth of Pennsylvania, business entity filing history, as President of PPT LLC, on the date of the formation of the LLC, December 24, 2008 and continued being shown on the business entity filing history as President of PPT LLC, on the records of Department of State of the Commonwealth of Pennsylvania, until at least March 10, 2011.
6. The court was in error. The aforesaid motion for summary judgment admits at Paragraph 26. “Appellants can conceivably maintain a claim of conspiracy against Sherman only, if his alleged conduct was other than as a lawyer for his clients.”
7. The court was in error. The aforesaid motion for summary judgment was granted as to Count I conspiracy. The facts in the various paragraphs of Count I specifically allege the defendants including defendant Sherman conspired to acquire the business of plaintiff Premier Platform Tennis Inc., took confidential and proprietary information as to customers, collected accounts receivable, withdrew funds from the bank account of plaintiff DPI, took equipment and other assets without permission or consent of any authorized party.
8. The court was in error. The aforesaid motion for summary judgment was granted as to Count I conspiracy as the movants counsel for defendant Sherman advised the court, because there was a release of two co-defendants; Dodge and Anthony, there could not be a conspiracy of one, that is defendant Sherman alone.
9. The court was in error. The aforesaid motion for summary judgment was granted as to Count II conversion by agent. The facts in the various paragraphs of Count II specifically allege Dodge while still an officer and an employee of plaintiff PPT Inc. and DPI with the assistance of Anthony and Sherman formed defendant PPT LLC; further acting, in concert with misappropriated assets of the plaintiffs herein.
10. The court was in error. The aforesaid motion for summary judgment was granted as to Count III unfair competition. The facts in the various paragraphs of Count III specifically allege all of the defendants including defendant Sherman, conspired to acquire the business of the plaintiffs PPT Inc. and DPI took and used business and proprietary information of plaintiffs PPT Inc. and DPI, engaged in deceptive selling practices using the name of plaintiff Premier Platform Tennis Inc., and used forms, cards and other material similar to that used by PPT Inc.
11. The court was in error. The aforesaid motion for summary judgment was granted as to Count IV defendant david dodge violation of fiduciary duties. The facts in the various paragraphs of Count IV specifically allege that from and after May 1, 2008, defendant David Dodge — in concert with the other named defendants (Anthony and Sherman) converted took and misappropriated assets of the plaintiffs herein.
12. The court was in error. The aforesaid motion for summary judgment was granted as to Count VI defendants tortious interference plaintiffs business relations. The facts in the various paragraphs of Count IV specifically allege that the engagement/employment of defendant Dodge by Plaintiffs was never terminated and that he, in concert with the other defendants, including defendant Sherman, willfully solicited customers and suppliers of plaintiffs for his and their own purposes.
13. The court was in error. The aforesaid motion for summary judgment was granted as to Count VII unjust reinrichment. The facts in the various paragraphs of Count VII specifically allege that defendant Dodge in concert with the other named defendants including defendant Sherman took and misappropriated assets of the plaintiffs.
14. The court was in error. The aforesaid motion for summary judgment was granted as to Count VIII. The facts in the various paragraphs of Count VIII specifically allege that the paragraphs 1 through 58 of the complaint were incorporated in Count VIII by reference and defendant Dodge, in concert with the other named defendants, including defendant Sherman took including [sic] and misappropriated assets of the plaintiffs.
15. The court was in error. The aforesaid motion for summary judgment was granted as to Count IX. The facts in the various paragraphs of Count IX specifically allege defendant Dodge in concert with the other named defendants including defendant Sherman took and misappropriated assets of the plaintiffs.

Appellants’ statement of errors complained of pursuant to order the 28th day of July 2014 further provides that the trial court “was in error as to not giving full impact to the following issues of fact”:

1. Defendant Jeffrey Sherman was President of PPT LLC for a period of almost three (3) years.
2. Defendant Jeffrey Sherman has not presented facts of proof that he is still not the President of PPT LLC.
3. Defendant Jeffrey Sherman was the responsible party in the docketing statement of the department of revenue.
4. Defendant Jeffrey Sherman has not presented facts of proof that he is still not the responsible party in the docketing statement of the department of revenue.
5. The release of defendants Dodge and Anthony has not been finalized by an agreement as required by the divorce court.
6. Such agreement prepared in accordance with the directions of the court is required to that [sic] provide the case shall continue against defendant Jeffrey Sherman and defendant PPT LLC.
7. The discovery of defendant Jeffrey Sherman has not been completed.
8. Defendant Jeffrey Sherman [sic] refusal to produce electronic and hard copy records claiming all such records were “lost” subjects Jeffrey Sherman to all adverse inferences under the doctrine of spoliation.
9. Defendant Jeffrey Sherman cannot assert there can be no conspiracy, if defendants Dodge and Anthony are released, based on the concept that there can be no conspiracy of one, where defendant PPT LLC is not released and remains as one (1) of two (2) defendants, along with defendant Jeffrey Sherman.
10. Defendant PPT LLC was included in the notes of testimony attached to defendant’s motion for summary judgment as being a party to the case going forward.

Appellants, Barbara Zamsky, Premier Platform Tennis, Inc. and Premier Platform Tennis, A Division of Dodge Premier, Inc., instituted suit against defendants David Dodge, Christine Anthony, Jeffrey Sherman and Premium Platform Tennis, LLC (“Premier LLC”). Barbara Zamsky and David Dodge were married on or about May 14,1998 and separated in May of 2008. During the marriage, Zamsky and Dodge formed Premier Platform Tennis, Inc. (“Premier Corporation”)- Premier Corporation was in the business of building and maintaining platform tennis courts. Zamsky was the sole owner of Premier Corporation; however, Dodge was primarily responsible for the business operations of Premier Corporation. Following the Zamsky/Dodge separation, Zamsky retained control of Premier Corporation.

Defendants Dodge and Anthony ultimately formed Premier Platform Tennis, Inc. (“Premier LLC.”). Premier LLC, was also engaged in the business of building and maintaining platform tennis courts. Dodge and Anthony retained Sherman, an attorney, to form and register Premier LLC. In connection with the services provided by Sherman, Sherman’s business address was listed in the formation papers of Premier LLC, for initial tax purposes. Appellants alleged Dodge and Anthony held themselves out as president and vice president of Premier LLC, respectively, and operated the business of Premier LLC.

Appellants’ claims against Jeffrey Sherman, Esquire are based on the contention that Sherman, the attorney who was retained by Dodge and Anthony to form Premier LLC., acted in concert with Dodge and Anthony to convert assets of appellants including customer lists, trade secrets, sources of supply and confidential information from appellants. The following claims were asserted against Sherman: conspiracy (Count I), conversion by agent (Count II), unfair competition (Count III), violation of fiduciary duties (Count IV), tortious interference with business relations (Count VI), unjust enrichment (Count VII), accounting (Count VIII) and violation of uniform trade secrets act (count IX).

It was alleged that Sherman was the president and sole officer of Premier LLC. Attorney Sherman was, at one time, listed as president of Premier LLC, in the Pennsylvania Department of State, Corporations Bureau’s records. The listing was erroneous and caused by a technical error and not by or through any conduct of Sherman. The erroneous listing was ultimately corrected. See Letter dated August 15, 2011 from Pennsylvania Department of State to Sherman, attached to defendant Sherman’s motion for summary judgment as Exhibit “C”. As such, the department of state records do not support the contention that Sherman was the president and sole officer of Premier LLC.

Premier LLC. was organized by M. Burr Keim Company as a straw organizer. The paperwork maintained by M. Burr Keim Company during the organization process identified Sherman as the attorney for Premier LLC. See Exhibit “E” to defendant Sherman’s motion for summary judgment. The formation paperwork submitted by M. Burr Keim Company did not identify Sherman as the president. Rather it identified Sherman as the individual “responsible for initial tax reports.” See Exhibit “E” to defendant Sherman’s motion for summary judgment.

When the error in the department of state records was discovered, M. Burr Keim Company further confirmed in a letter that Sherman was never identified as the President of Premier LLC. and the listing by the department of state was in error. See Exhibit “F” to defendant Sherman’s motion for summary judgment. Additionally, Anthony and Dodge both executed affidavits affirming Sherman was never the president of Premier LLC. See Exhibits “G” and “H” to defendant Sherman’s motion for summary judgment. Anthony and Dodge further affirmed that Sherman was not an officer of Premier LLC., had no ownership interest, was never paid as employee and only provided legal advice and assistance regarding the formation of Premier LLC. Anthony testified all payments to Sherman were for legal services. Finally, the dissolution paperwork for Premier LLC. was completed by Anthony and only identified Anthony as an officer. See Exhibit “Q” to defendant Sherman’s motion for summary judgment.

On or about August 30, 2013, Jeffery Sherman filed a motion for summary judgment. Summary judgment is appropriate only when the record clearly shows 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 nonmoving party and resolve all doubts as to the existence of a genuine issue of material fact against the moving party. Only when the facts are so clear that reasonable minds could not differ can a trial court properly enter summary judgment. Hovis v. Sunoco, Inc., 64 A.3d 1078, 1081 (Pa. Super. 2013) (quoting Cassel-Hess v. Hoffer, 44 A.3d 80, 84-85 (Pa. Super. 2012)).

Even in the light most favorable to the nonmoving parties, the record revealed no genuine issues of material fact. As such, Sherman was entitled to judgment as a matter of law. The claims raised against Sherman must fail as they originate from the erroneous contention that Sherman had a personal interest in Premier LLC. or as was acting in a way other than as counsel of record attempting to form a legal entity. Appellants asserted the following claims against Sherman: conspiracy (Count I), conversion by agent (Count II), unfair competition (Count III), violation of fiduciary duties (Count IV), unjust enrichment (Count VII), accounting (Count VIII) and violation of uniform trade secrets act (count IX).

The claims for conspiracy were based on the contention the defendants acted in concert to acquire the business of Premier Corporation including confidential information consisting of customer’s names and addresses, customer lists, sources of supply and trade secrets and used the confidential and propriety material of Premier Corporation for their benefit. The alleged conduct by Sherman which purportedly formed the basis for this theory of relief are the legal services he provided to his clients, Dodge and Anthony, in the formation and registration of the Premier LLC. There is no issue of fact that Sherman benefited personally in any way from the formation and registration of Premier LLC. or participated in any way in the business of Premier LLC. The record before this court revealed that Anthony, at all times, was the sole member and held all interests in Premier LLC. The listing with the Pennsylvania Department of State, Corporations Bureau identifying Sherman as the president of Premier LLC. was a technical error caused by the Pennsylvania Department of State not by Sherman. It was ultimately corrected by the Pennsylvania Department of State. There is no basis for appellants’ contention Sherman was the president of Premier LLC. or was acting other than as a lawyer.

Appellants also asserted claims against Sherman characterized as conversion by agent (Count II), unfair competition (Count III), violation of fiduciary duties (Count IV), tortious interference with appellants’ business relations (Count VI), unjust enrichment (Count VII), accounting (Count VIII) and violation of uniform trade secrets act (Count IX). These claims may best be described as torts which are contingent upon (1) the involvement of Sherman in the business operations of Premier LLC. and/ or (2) a personal stake or interest by Sherman in Premier LLC. The record before this court revealed no such personal interest in Premier LLC and was devoid of any evidence Sherman was involved in the actual business of Premier LLC. Rather, it is apparent that Sherman simply provided legal services to Anthony and Dodge, specifically regarding the formation and registration of Premier LLC.

Appellants’ claim for conversion by agent is based on the contention Dodge, as president or employee of Premier Corporation and Dodge Premier, beginning in May 2008, misappropriated assets including: confidential and proprietary information, equipment, assets and other funds. Conversion is the deprivation of another’s right of property in, or use or possession of a chattel, without the owner’s consent and without lawful justification. Shonberger v. Oswell, 530 A.2d 112, 114 (1987) (citing Stevenson v. Economy Bank of Ambridge, 197 A.2d 721, 726 (1964)). There is no support for allegations that Sherman participated in any alleged misappropriation of confidential or proprietary information or other assets of appellants.

Furthermore, there is a “ban on conspiracies in the attorney-client context” and no conspiracy can exist where an attorney’s advice or advocacy is for the benefit of his client, rather than for the attorney’s sole personal benefit. Heffeman v. Bochetto & Lentz, 189 F.3d 405, 413 (3d Cir., 1999). A lawyer is not liable to a plaintiff if his. involvement was to advance the interests of the lawyer’s client, Thompson Coal Co. v. Pike Coal Co., 412 A2d. 466, 472 (Pa. 1979); Smith v. Griffiths, 476 A.2d 22, 27 (Pa. Super. 1984). There is no active participation in a conspiracy when a lawyer provides advice and assistance at the behest of his client, does not hold any stake in this client’s activities greater than a professional interest and, therefore, does not personally profit from the alleged improper conduct of the client. Aetna Electroplating Co., Inc. v. Jenkins, 484 A.2d 134, 137 (Pa. Super. 1984) (allegations insufficient to substantiate claim for concerted tortious activity involving attorney and client where attorney acted in accordance with instructions of his client.) There is no basis for appellants’ contention that Sherman was the president of Premier LLC. or was acting as anything other than as a lawyer. The record is clear that Sherman’s involvement was restrained to the formation and registration of Premier LLC.

The claim for unfair competition is based on the contention Dodge and Anthony engaged in deceptive practices using trade secrets and confidential information of appellants to solicit customers and prospective customers. To establish a case of “unfair competition,” it must be shown that another, by simulation of labels, imitation of packages, deceptive selling practices, the use of complainant’s containers, misleading advertising, or other means has attempted to trade on complainant’s business reputation. Stroehmann Bros. Co. v. Manbeck Baking Co., 331 Pa. 96, 200 A. 97 (1938). Again, the record does not support the contention that Sherman engaged in deceptive selling practices or otherwise engaged in conduct to trade on Premier Corporation’s business reputation, goodwill or to use Premier Corporation’s trade secrets or confidential information in the solicitation of customers.

Appellant’s claim that the grant of summary judgment on the violation of fiduciary duties claim was improper. In support thereof, appellants posit that “the facts in the various paragraphs of Count IV specifically allege that from and after May 1,2008, defendant David Dodge — in concert with the other named defendants (Anthony and Sherman) converted took and misappropriated assets of the plaintiffs herein.” The elements of agency are: “the manifestation by the principal that the agent shall act for him, the agent’s acceptance of the undertaking and the understanding of the parties that the principal is to be in control of the undertaking.” Scott v. Purcell, 490 Pa. 109, 117, 415 A.2d 56, 60 (1980), quoting Restatement (Second) of Agency § 1, Comment b (1958); see also Reid v. Ruffin, 503 Pa. 458, 463, 469 A.2d 1030, 1033 (1983). “Agency results only if there is an agreement for the creation of a fiduciary relationship with control by the beneficiary.” Smalich v. Westfall, 440 Pa. 409, 413, 269 A.2d 476, 480 (1971). The burden of establishing an agency relationship rests with the party asserting the relationship. Scott, 490 Pa. at 117 n. 8, 415 A.2d at 61 n. 8. “An agency relationship is a fiduciary one, and the agent is subject to a duty of loyalty to act only for the principal’s benefit.” Sutliff v. Sutliff, 515 Pa. 393, 404, 528 A.2d 1318, 1323 (1987), citing Restatement (Second) of Agency §387 (1958). Thus, in all matters affecting the subject of the agency, the agent must act with the utmost good faith in furthering and advancing the principal’s interests, including a duty to disclose to the principal all relevant information. See Sylvester v. Beck, 406 Pa. 607, 610-11, 178 A.2d 755, 757 (1962); eToll, Inc. v. Elias/Savion Adver, Inc., 811 A.2d 10, 21 (Pa. Super. 2002). Appellants failed to prove a fiduciary relationship with Sherman. Sherman was hired by Anthony and Dodge to form and register Premier LLC.

The claim for tortious interference with business relations rests on the allegation that Dodge and Anthony solicited customers of Premier Corporation for the benefit of Premier LLC. and attempted to divert customers of Premier Corporation to Premier LLC. The elements of tortious interference with business relations are (1) a contractual or prospective contractual relation, (2) the purpose or intent to harm the existing or prospective relation, (3) the absence of privilege or justification on the part of the defendant, and (4) actual damage to plaintiff as a result of defendant’s conduct. Pawlowski v. Smorto, 403 Pa. Super. 71, 78, 588 A.2d 36, 39 (1991). This claim fails as the only alleged conduct by Sherman that forms the basis this theory of recovery is formation and registration of Premier LLC. for his clients, Dodge and Anthony.

Appellants’ claim for unjust enrichment is based on the contention that Dodge took, converted and misappropriated assets of appellants. An unjust enrichment claim is a quasi-contract theory of liability. Salvino Steel & Iron Works v. Fletcher & Sons, 580 A.2d 853, 856 (Pa. Super. 1990). A cause of action for unjust enrichment arises only if defendant was wrongfully enriched by receiving a benefit conferred by plaintiff. Styer v. Hugo, 619 A.2d 347, 350 (Pa. Super. 1993). A successful unjust enrichment claim depends on proof that defendant wrongfully secured or passively received a benefit that would be unconscionable for defendant to retain. Salvino, 580 A.2d at 856. There is no support for the contention Sherman received any benefit from appellants’ business or was ever in possession of any of the confidential information or assets Appellants contended were misappropriated.

Similarly, the claim asserted by appellants for an accounting must fail as a matter of law because Sherman was not in possession of appellants’ money or property. An accounting is an equitable remedy, the right to which arises generally from the defendant’s possession of money or property which, because of some particular relationship between himself and the plaintiff, the defendant is obligated to surrender. Holland v. Hallahan, 211 Pa. 223, 60 A. 735 (1905); Shenango Furnace Co. v. Fairfield Tp., 229 Pa. 357, 78 A. 937, 943 (1911); Crennellv. Fulton, 241 Pa.572, 88 A. 783, 785 (1913). The record was devoid of any averments that Sherman possessed money or property belonging to appellants.

Finally, the claim for a violation of the Pennsylvania Uniform Trade Secrets Act, 12 Pa. C.S. Sections 5301, et seq. is based on alleged misappropriation of trade secrets from appellants by defendant Dodge. Appellants failed or were simply unable to identify what, if any, trade secret or secrets were allegedly misappropriated, or point to the alleged conduct by Sherman that constituted such a misappropriation. Appellants’ claim for a violation of the Pennsylvania Uniform Trade Secrets Act, is based on alleged misappropriation of trade secrets from appellants by defendant Dodge. The Act defines a trade secret as follows:

Information, including a formula, drawing, pattern, compilation including a customer list, program, device, method, technique or process that: (1) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use. (2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

12 Pa. Cons. St. § 5302. A party misappropriates a trade secret when, inter alia, he or she “acquires knowledge of another’s trade secret in circumstances giving rise to a duty to maintain it confidentiality and then discloses or used that trade secret without the other’s consent.” Bimbo Bakeries USA. Inc. v. Botticella, 613 F.3d 102, 110 (3d Cir. 2010). The record lacks any support for the claim that Sherman acquired knowledge of Appellants’ trade secrets under circumstances giving rise to a duty to maintain their confidentiality. Additionally, there were no allegations that Sherman used a trade secret of Appellants without Appellants’ consent.

It is apparent that attorney Jeffrey Sherman simply provided legal services to Anthony and Dodge regarding the formation and registration of Premier LLC. The record before this court revealed that Sherman had no personal interest in Premier LLC. and that Sherman was never involved in the actual business enterprise of Premier LLC.

For the aforementioned reasons, the trial court respectfully requests that its decision be affirmed.

      . An order granting co-defendants, David Dodge and Christine Anthony’s, motion for summary judgment was also entered on June 30, 2014 but it is not the subject of an appeal.

      . An order granting co-defendants, David Dodge and Christine Anthony’s, motion for summary judgment was entered on June 30,2014 but is not the subject of the instant appeal.

      . On March 21, 2013, in the Court of Common Pleas of Delaware County, Pennsylvania, 2009-003403, a settlement agreement addressing equitable distribution in the Zamsky/Dodge divorce proceeding was placed on the record. (Motion for summary judgment pursuant to Rule 1035 for dismissal of claims against defendants, David Dodge and Christine Anthony and Monetary Sanctions against, plaintiff Barbara Zamsky, ¶ 4.) The relevant portion of that transcript provided as follows:

        “Any issues regarding business debt that can be resolved through a civil suit against the business entity that took over the business from Mrs. Zamsky’s prospective she will address those issues at that time. The case itself is just going to be going forward against Mr. Sherman and the business entity itself. She will be releasing through Mr. Charen’s office . .. Mr. Dodge and Christine Anthony as defendants from that litigation.” (Exhibit B, p.286, line 19 — p. 287, line 4, motion for summary judgment pursuant to Rule 1035 for dismissal of claims against defendants, David Dodge and Christine Anthony and Monetary Sanctions against, plaintiff Barbara Zamsky,)

      . Platform tennis is an outdoor court game played with paddles and a rubber ball on a raised and fenced wooden floor that is smaller than a tennis court. The American Heritage Dictionary of the English Language 1387 (3d ed. 1996).


author: O’REILLY, J.,

text:
    Schalles v. Pennsylvania Liquor Control Board

      C.P. of Allegheny County,
    No. SA 13-001147
    Nov. 10, 2014
   O’REILLY, J.,

I.Preliminary Matters

This matter involves the appeal by Vem M. Schalles t/a T’s Circus Bar (Licensee or the “Bar”) of the action taken by the Pennsylvania Liquor Control Board (“Board”) in denying renewal of Licensee’s Liquor License on November 6,2013.

Licensee’s appeal was filed on November 8, 2013. I conducted a de novo trial on March 26, 2014. At that trial the complete record of testimony and exhibits were submitted as respondent Exhibit 4. No other evidence was submitted to me. Thereafter, the record of that trial was transcribed and counsel filed excellent and able briefs in support of their contending positions.

The facts show that on November 6, 2013 the Board denied renewal of the Bar’s license and that an opinion in support of the renewal would be issued if an appeal was filed. An appeal was filed and a 52 page, undated opinion was issued with Conclusions of Law wherein the Board said:

1. Licensee received the requisite notice of Licensing’s objections to its renewal application and of the date, time, and place of the hearing held in this matter.
2. Section 470 of the Liquor Code [47 P.S. § 4-470] vests in the Board the authority to refuse renewal of a restaurant liquor license.
3. As of the date of the hearing, Licensee had accrued fifteen (15) adjudicated citations.
4. Testimony and police reports were provided for nine (9) police incidents since June 2011, involving fights, drugs, and disorderly operations.
5. Licensee failed to provide sufficient timely corrective measures to address all its citations and incidents at the hearing.
6. Licensee breached his CLA with the Board.
7. Licensee filed a late renewal application.
8. Licensee has abused the privilege of holding a license.
9. Restaurant Liquor License No. R-9633 was not renewed effective June 1, 2013.

In his brief, counsel for the Board and the Board in its findings, asserts that there are approximately 14 adjudicated citations, approximately seven incidents of disturbances at or immediately adjacent to the Bar that warrant the non-renewal. Testimony and police reports were provided for several of the police incidents involving fights, drugs, and disorderly operations. In addition, the Board claims that Licensee failed to provide sufficient timely corrective measures to address all of its citations and incidents at the hearing, breached his CLA with the Board, filed a late renewal application and has abused the privilege of holding a license.

Upon de novo review, the Court of Common Pleas may exercise its statutory discretion to make findings of fact and conclusions of law, and to sustain, alter, change or modify any action of the PLCB, whether or not it makes findings which are materially different from those found by the Board. Goodfellas, Inc. v. Pennsylvania Liquor Control Board, 921 A.2d 559 (Pa. Cmwlth. 2007). A trial court may issue a ruling different from that issued by the PLCB, even if the court’s findings of fact are identical to those issued by the PLCB, as long as the trial court’s decision is supported by substantial evidence. Pennsylvania Liquor Control Board v. Bartosh, 730 A.2d 1029 (Pa. Cmwlth. 1999).

II. FACTS

By way of background, the Bar has been owned and operated by Licensee Vem Schalles for about thirty years. He is a life-long resident of Swissvale, lives two blocks from the bar, and has owned various area businesses. Licensee has been involved in the community for many years. He takes senior citizens on trips and is involved with local baseball teams. The Licensee caters events for the senior group in Swissvale, area churches, baby showers and funeral homes. The Bar has been RAMP certified since 2002. Licensee had a partner in the business for several years but Licensee took over all operations about 12 years ago. Except for the most recent ones, there have been no citations since 2003. The Bar is located at 7526 Center Street, Swissvale, Pittsburgh Pennsylvania.

Renewal of a liquor license is not automatic and the Board has the authority to refuse to renew a license for any of the reasons set forth in 47 P.S. §4-470 (a.l). U.S.A. Deli, Inc. v. Pennsylvania Liquor Control Board, 909 A.2d 24 (Pa. Cmwlth. 2006), appeal denied, 929 A.2d 647 (Pa. 2007) (TABLE). However, when considering the manner in which the licensed premises is being operated, and any activity occurring off-premises, the Board may consider “whether any substantial steps were taken to address the activity occurring on or about the premises.” 47 P.S. §4-470(a.l). Although the licensee is required to take substantial affirmative measures to prevent misconduct, a licensee is not required to do everything possible to prevent criminal activity on the premises, act as its own police force or close its business. I.B.P O.E. of West Mount Vernon Lodge 151 v. Pennsylvania Liquor Control Board, 969 A.2d 642, 651 (Pa. Cmwlth. 2009).

The Board has concluded that the shuttering of the Bar is warranted. However, the evidence does not prove that the Bar is a nuisance bar or a problem establishment that needs to be closed to protect the community. The following incidents do not warrant the non-renewal of the Bar’s liquor license.

On June 4,2011, Officer Justin Keenan of the S wissvale Police Department issued a citation for public intoxication to an intoxicated individual that he observed exiting the Bar and walking to the municipal parking lot. However, Officer Kennan did not see this individual enter the Bar or see him consuming alcoholic beverages at the Bar. In fact, the testimony established that the Bar’s doorman refused to permit the individual to enter the Bar because he was visibly intoxicated.

The incident on March 16,2011, involved a tip given to the Swissvale Police that an individual with an outstanding warrant for arrest was at the Bar. After being arrested and searched, an officer found small amounts of marijuana and cocaine and the individual was charged with possession. However, the officer testified that he had no evidence that the individual obtained the drugs in the Bar or that he sold drugs in the Bar. The licensee testified that he did not know the individual and had never seen him in the Bar. This incident provides no support for the action of the Board in not renewing the license.

On September 20, 2011, a woman reported that she had been hit by a beer bottle in the Bar. The woman presented at the police station with a bloody nose covered in a substance later determined to be potpourri. After investigating, Lt. Matthew Lisovich determined that the woman had been struck with a bucket of potpourri at the Bar. However, the police were unable to identify the assailant and no charges were filed. This incident provides no support for the action of the Board in not renewing the license. What I also find interesting is that Lt. Lisovich testified that when the victim was at the police station immediately after the incident, and she received a text on Twitter message from her assailant (N.T. 42).

Given this information, I find it strange that Lt. Lisovich would later say there was no arrest because “they were unable to identify the actor/assailant” (N.T. 46).

On May 15,2012, a report was generated for an incident of theft and/or an altercation that allegedly occurred on May 10, 2002 at the Bar. The Board did not produce the alleged victim at the hearing and the delay in reporting the incident undermines its reliability. This incident provides no support for the action of the Board in not renewing the license.

On January 6, 2012, an incident occurred involving an alleged assault between the Bar’s doorman and a patron in the municipal parking lot. The doorman was charged with simple assault but the disposition of the case was not known. This incident provides no support for the action of the Board in not renewing the license.

Another incident occurred on November 25, 2012 where the Swissvale police had to separate two people who were yelling and pushing each other in the municipal parking lot next to the Bar. However, no evidence was presented to show that those people had been patrons of the Bar. I find no evidence that the bar had any connection to this incident.

On December 29, 2012 a woman exited the Bar and began punching the driver’s side of a vehicle. Aman exited shortly thereafter and the two began fighting and punching each other. Both were charged with simple assault and disorderly conduct and the female was also charged with criminal mischief. However, no evidence was presented to prove that the patrons were intoxicated or that they had been over-served in the Bar. Like the other incidents, this matter does not support the Board’s determination of non-renewal.

The final two incidents occurring on January 21, 2013 and March 4, 2013 were disturbances that had nothing to do with the Bar. One involved a robbery at another establishment and the other involved a car stolen off of the street. These disturbances referred to by the Board were incidents where the Swissvale Police asked the Licensee to provide external video footage which had nothing to do with the operation of the Bar and he was unable to do so. As to whether this was a breach of the CLA, the Licensee claims they were minor and unintentional. I find that this incident has no connection to the Bar and can form no basis for the Board’s non-renewal.

The Bar has never been cited or charged with sales to minors, sales to visibly intoxicated persons or sales after hours. It has never been cited for loud music, noisy or disorderly operations or for any violation affecting the public peace or safety.

At the administrative hearing, Licensee testified that the Bar uses security cameras, a scan device to verify the authenticity of photo IDs and a metal detection wand device in support of his commitment to responsible alcohol service. The Board contends that Licensee failed to meet with the chief of police on a monthly basis as specified by the CLA. However, Licensee testified that he made every effort to comply. He attempted to contact the chief by telephone and in person but received no response. Finally, he resorted to calling 911 to get the chief to acknowledge his meeting requests. Since June 2013, licensee has met monthly with the assistant chief of the Swissvale Police.

At the aforesaid trial the Board offered the transcript of the administrative hearing that was held by a hearing examiner on August 20, 2013. It offered no additional witnesses or evidence before me. There were Exhibits attached to the hearing transcript denominated as B-l through B-9. Exhibit B-4 entitled opinions and orders from office of administrative law Judge for the citation numbers identified in the objection letter (Exhibit B-2). Also attached to that transcript as Exhibits B-6 through B-9, are four police reports. The Board relied for its determination on the aforesaid documents as well as the case of Two Sophia’s, Inc. v. PLCB, 799 A2d 917 (Pa. Cmwlth. 2002) for the proposition that such transcript is admissible. It also relies on First Ward Republican Club v. PLCB, 11 A.3d 38 (Pa. Cmwlth. 2010) for the proposition that certain police reports, which are hearsay, may be admitted as business records, if properly authenticated.

With respect to the latter point, counsel for the Bar has objected to the admission of such reports and contends they do not qualify as business records. This is with respect to Board Exhibits 6 through 9. Counsel for the Bar argues that police officer Lt. Lisovich, the proffered “Authenticator” of the reports, did not attest to the official copy or provide a certificate verifying that he had custody of the originals. Counsel relies on Kinard Entertainment, Inc. v. Pennsylvania Liquor Control Board, No. 24 C.D. 2012 (Pa. Cmwlth. 2012), where the court found that police reports are inadmissible under the business record exception to the hearsay rule if the proffering officer was not the officer who responded to the events described therein, he was not responsible for preparing or reviewing the information contained in them, and neither he nor a subordinate was responsible for maintaining them. Lt. Lisovich’s testimony did not establish for certain that he even reviewed the police reports before testifying. However, in the First Ward Republican Club case, the Commonwealth Court held that a police report may be authenticated by any witness who can provide sufficient information relating to the preparation and maintenance of the record to justify the presumption of trustworthiness. Lt. Lisovich did say that he “supervised” the preparers of the reports.

For further consideration is the extent to which police reports are really dispassionate, unbiased reports of business activity worthy of the trustworthiness reposed in records made in the regular course of business. The reports offered herein are advocative and are written with knowledge that they will be used against an individual who has been arrested or otherwise subject to government sanction. Finally, that such reports may be “admissible” does nothing with respect to the “weight” that the fact finder may assign to such reports.

It is also noteworthy that in First Republican Club the court re-iterated the standard which the trial court should apply, to wit, — “A trial court reviewing a decision of the Board not to renew a liquor license hears the matter de novo, and may sustain, alter, modify, or amend the Board’s order even when it is based upon the same evidence presented before the Board” citing Philly International Bar v. Pa. Liquor Control Board, 973 A.2d 1, 3 (Pa. Cmwlth. 2008). The foregoing standard relates back to 1998 when our Supreme Court, in PLCB v. Richard E. Craft American Legion Home Corporation, 717 A.2d 276 (Pa. Cmwlth. 1998) first articulated it and opined that the trial court, hearing the matter de novo “could sustain, alter change or modify a penalty imposed by the Board even based on the same evidence”. Such is the holding of Philly International Bar, supra, as well. However, in 2013, the Commonwealth Court, in Becker’s Cafe Inc. v. PLCB, 67 A.3d 885 (Pa. Cmwlth. 2013) explained the limitations on the trial court. That is, within the scope of its de novo trial, a trial court may only affirm or deny the action of the Board and could not alter or modify. Analysis of Becker’s Cafe Inc. shows that both the Licensee and the Board appealed the trial courts imposition of an “early closing” condition on the renewal of the license. The Board had denied renewal based on various incidents that happened at the bar, located in the Bottoms of McKees Rocks Borough. The trial court ordered renewal of the license but imposed an early closing condition. On appeal, the Commonwealth Court sustained the trial court’s order of renewal but reversed its imposition of the early closing condition. The court based its ruling on the language of the statute which authorizes the trial court at 47 P.S Sec 4.464 “to either sustain or over-rule the action of the Board and either order or deny the issuance of the new license on the renewal or transfer of the license to the applicant.”

However, even if these 4 reports are received, they are worthy of little weight. First, Exhibit 6 does not even involve this licensee but rather JR’s Bar nearby. Exhibit 7 involves a stolen set of car keys from a patron of both JR and this licensee but does not implicate either in the theft. Exhibit 8 involves a shoving match between two females in the nearby municipal lot but does not implicate the licensee. Finally, Exhibit 9 involves a fight between a woman and a man in the same municipal parking lot. The woman was observed to leave the licensee, walk into the parking lot and punch a parked van as well as the operator thereof. None of this implicates the licensee.

After analysis, I wonder why these reports were even offered. Their probative value is non-existent.

III. Analysis

After an analysis of the record and testimony, I find that the Bar is committed to operating in an orderly manner and to selling alcoholic beverages in a responsible manner. After consideration of the entire record and arguments of the parties, I found substantial evidence to warrant the renewal of Licensee’s restaurant liquor license. The Board is directed to renew the license.

So ordered: