author: WETTICK, J., PER CURIAM.

text:
    Walters v. UPMC Presbyterian Shadyside

      June 20, 2013

      William R. Caroselli, for plaintiffs.

      John C. Conti, for defendant UPMC Presbyterian Shadyside.

      Paula A. Koczan, for defendant Maxim Healthcare Services, Inc.

      David P Helwig, for defendant Medical Solutions, L.L.C., d/b/a/ Medical Solutions.
   WETTICK, J.,

— The preliminary objections of UPMC Presbyterian (“UPMC”) and Maxim Healthcare Service, Inc. (“Maxim”) seeking dismissal of each count within the plaintiffs’ first amended complaint are the subject of this opinion and order of court.

In their first amended complaint, plaintiffs allege the following: From March 2008 to May 2008, David Kwiatkowski worked at UPMC Presbyterian Hospital as a radiologic technician. Maxim, an agency that specializes in placing temporary and permanent personnel in healthcare jobs, was Kwiatkowski’s employer, and Maxim placed Kwiatkowski at UPMC.

On May 7, 2008, a UPMC hospital employee observed Kwiatkowski enter an operating room, lift his shirt, put a syringe in his pants, and exit the room. UPMC determined that a syringe containing fentanyl, a Schedule II narcotic, was missing, having been replaced by a syringe containing a different liquid.

UPMC personnel confronted Kwiatkowski, and three empty syringes with fentanyl labels were found on his person. Also, an empty morphine syringe was discovered in his locker, and fentanyl and opiates were present in his urine.

Beginning on or around May 7, 2008, as a result of the above-described incident, UPMC no longer allowed Kwiatkowski to work at UPMC.

Both UPMC and Maxim knew or should have known that Kwiatkowski, without intervention, would continue to engage in the same conduct to satisfy what appeared to be an addiction to controlled substances. They both knew or should have known that the conduct which UPMC observed would be detrimental to the health and wellbeing of patient who come into contact with Kwiatkowski at healthcare facilities. Yet, neither UPMC nor Maxim took steps that would prevent kwiatkowski from working at other healthcare facilities.

After departing from UPMC, Kwiatkowski worked at seven different hospitals between May 2008 and April 30, 2010. Thereafter, on or about May 24,2010, Kwiatkowski began working at Hays Medical Center in Hays, Kansas. By the time he began his employment at Hays Medical Center he was infected with hepatitis C.

Thomas D. Walters (“plaintiff’), while a patient at Hays Medical Center, was administered medication through a syringe that had previously been diverted, used, infected, refilled, and replaced by Kwiatkowski. Plaintiff tasted positive for hepatitis C on July 31, 2012 and on August 1,2012. Plaintiff did not know, and could not have known by the exercise of due diligence, of the cause of his disease until the middle of July 2012, at which time Kwiatkowski’s behavior was publicly known.

If I read the first amended complaint broadly, it supports a finding that UPMC and Maxim were the only entities with knowledge of Kwiatkowski’s addiction and his use of controlled substances until the New Hampshire Department of Health and Human Services announced on July 13, 2012 that more than thirty persons associated with Exeter Hospital Cardiac Catheterization Laboratory (where Kwiatkowski worked after he left Hays Medical Center) had been infected with the same strain of hepatitis C as Mr. Kwiatkowski’s strain.

At all relevant times, UPMC was a “registrant” under the Controlled Substance Act (21 U.S.C. §823) because it is licensed to possess, administer, dispense, and distribute controlled substances. A registrant must comply with 21 C.F.R. §1301.76(b) which reads in part as follows:

(b) The registrant shall notify the Field Division Office of the Administration in his area, in writing, of the theft or significant loss of any controlled substances within one business day of discovery of such loss or theft. The registrant shall also complete, and submit to the Field Division Office in his area, DEA Form 106 regarding the loss or theft....

Plaintiffs allege that UPMC never complied with this reporting requirement.

I. UPMC’S PRELIMINARY OBJECTIONS

The first amended complaint raises three counts against UPMC: count I-common law negligence, count II-negligence per se, and count Ill-punitive damages. I will initially consider the preliminary objections to count II.

COUNT II-NEGLIGENCE PER’SE (UPMC)

Plaintiffs base their negligence per se cause of action on UPMC’s alleged noncompliance with 21 C.F.R. §1301.76(b) which requires a registrant to provide notice in writing to the Drug Enforcement Administration of the theft or significant loss of any controlled substances within one business day of the discovery of such theft or loss.

If the doctrine of negligence per se applies, the duty and breach of the duty are established by showing that UPMC failed to comply with the notice requirements of 21 C.F.R. §1301.76(b).

The doctrine applies only if a purpose of the statute or regulation is to protect the interests of a group of people, as opposed to the general public Minnich v. Yost, 817 A.2d 538, 541 (Pa. Super. 2003); Campo v. St. Luke’s Hosp., 755 A.2d 20, 25 (Pa. Super. 2000).

In J.E.J v. Tri-County Big Brothers/Big Sisters, Inc., 692 A.2d 582 (Pa. Super. 1997), the court states that “in analyzing a claim based on negligence per se, the purpose of the statute must be to protect the interest of a group of individuals, as opposed to the general public...” {Id. at 585), and ruled that the plaintiffs’ “negligence per se argument must fail” because J J. and his parents were in no way affiliated with Tri-County. Id. at 586.

No provisions within the Controlled Substances Act or the regulations promulgated thereunder suggest that the scheme created by this legislation and regulations was designed to provide any protections other than to the public at large. Plaintiffs are members of a group of people harmed by the diversion of controlled substances. But there is nothing in the legislation or accompanying regulations suggesting that drug diversion by healthcare employees and its risks to patients are specific subjects that the Controlled Substances Act addressed.

The findings and declarations supporting the enactment ofthe Controlled Substances Act (21 U.S.C. §801) include the finding that the illegal importation, manufacture, distribution, possession, and improper use of controlled substances have a substantial and detrimental effect on the health and general walfare of the American people. The interest to be protected from the regulation’s registration requirement is to protect the public interest in the legitimate use of controlled substances and to inhibit the pernicious consequences to the public’s health and safety of illegitimate use. Bonds v. Tandy, 457 F.3d 409, 414 (5th Cir. 2009). Congress drafted the CSA to “combat drug abuse and control of legitimate and illegitimate traffic and controlled substances.” Gonzales v. Oregon, 546 U.S. 243 (2006). Section 21 U.S.C. §823(b) protects the interests of the public in the legitimate use of controlled substances. Peckens v. Rite Aid of West Virginia, Inc., 2011 WL 2938454, *3 (N.D.W.V. 2011) (citing Bzdzuich v. United States Drug Enforcement Admin., 76 F.3d 738, 742 (6th Cir. 1996)).

In summary, plaintiffs cannot recover by showing only that UPMC failed to comply with the notice requirements of 21 C.F.R. § 1301.76(b) and that this noncompliance caused the harm described in plaintiffs’ first amended complaint because these reporting requirements are intended to protect the interests of the general public.

COUNT I-COMMON LAW NEGLIGENCE (UPMC)

Count I of plaintiffs’ first amended complaint is a common law negligence claim against UPMC.

The primary issue raised through the preliminary objections of UMPC is whether UPMC owed a duty of care to a patient, unknown to UPMC, receiving treatment in a hospital in Hays, Kansas, more than two years after Kwiatkowski’s departure from UPMC.

Plaintiffs correctly state that the allegations in their first amended complaint will support a finding that UPMC did not exercise reasonable care, and UPMC’s conduct created a risk that plaintiff would sustain the harm which he, in fact, sustained Thus, the initial question that I consider is whether under Pennsylvania case law, a showing, in all instances, of a failure to exercise reasonable care and causation is sufficient to plead a cause of action in negligence If the answer is “no” (and it is “no”), the second question is under what circumstances is such a showing sufficient to establish negligence?

These questions, and other questions raised in UPMC’s preliminaiy objections, were considered in the recent opinion of the Pennsylvania Supreme Court in Seebold v. Prison Health Services, Inc., 57 A.3d 1232 (Pa. 2012).

Seebold is a negligence action brought by a corrections officer at a state correctional institution. The defendant is Prison Health Services, Inc. (“PHS”), which provided medical services to inmates.

The plaintiff’s duties included strip-searching inmates before and after they received visitors. Unbeknownst to the plaintiff, approximately twelve inmates whom the plaintiff strip-searched were infected with MRSA, a contagious bacterial infection. As a result of the plaintiff’s contact with these inmates, she became infected with MRS A. Id. at 1234.

The Seebold complaint alleged that PHS’s staff knew or should have known that the twelve inmates were infected and owed a duty of reasonable care to the staff and inmates at the correctional institution to warn them of and protect them from acquiring the MRSA infection from those inmates. The complaint describes a fact situation in which the PHS staff failed to detect the infection or to give notice to the plaintiff, and its failure to do so caused the plaintiff’s injuries. Id.

The common pleas court sustained the defendant’s preliminary objections seeking dismissal based on the ground that PHS did not owe a duty to exercise reasonable care to protect the health of a staff member; the PHS owes a duty to exercise reasonable care only to its patients. Id.

The Pennsylvania Superior Court reinstated the action It stated that case law imposes a duty upon physicians who treat a patient with a communicable disease to protect the wellbeing of third persons since the patient’s health already has been compromised. These third persons consist of specifically identifiable persons most likely to contract a contagious skin disease. This is a narrow class of highly foreseeable plaintiffs and does not support an extension of the duty to the public at large Id. at 1236-38.

The Pennsylvania Supreme Court reversed and remanded for reinstatement of the common pleas court’s order on the ground that PHS physicians did not owe a duty of care to the plaintiff.

The court in Seebold (with Justice McCafferty dissenting) ruled in favor of the defendant because it did not recognize a general duty that applies across the board to avoid causing physical harm to any and all persons. It, instead, ruled that a defendant may owe a duty of care to warn one category of persons and not another where the defendant has identified a risk of harm to both categories. Liability is limited to the category of persons to whom a duty was owed.

The Seebold opinion looked to the case law permitting a negligence claim to be brought against physicians by persons who were not patients of the physicians. The case law, as described in Seebold, provided that such claims will be dismissed in the absence of a court-created, new affirmative duty. Furthermore, “in this landscape, the Court has previously adopted the default position that, unless the justifications for and consequences of judicial policymaking are reasonably clear with the balance of factors favorably predominating, we will not impose new affirmative duties.” 57 A.3d at 1245.

In determining whether to impose a new affirmative duty, the court stated: “Generally however, there is no duty to protect or rescue someone who is at risk on account of circumstances the defendant had no role in creating.” (Citations omitted.) Id. at 1246.

The Superior Court appears to have relied primarily on DiMarco v. Lynch Homes-Chester County, Inc., 583 A.2d 422 (Pa. 1990), and Troxel v. A.I. DuPont Institute, 675 A.2d 314 (Pa. Super. 1996), in reinstating the action. See the January 25, 2011 order of court of the Pennsylvania Supreme Court granting the petition for allowance of appeal at 13 A.3d 461 (Pa. 2011):

ORDER

PER CURIAM.

And now, this 25th day of January, 2011, the Petition for Allowance of Appeal is granted. The issues, as stated by petitioner, are:
a. Does a physician have a duty to a third party with whom he has no doctor/patient relationship when he negligently diagnoses his patient, an inmate, as not having a contagious disease?
b. Does a physician have a duty to warn third parties who may come into contact with an inmate with a contagious disease that the inmate has a contagious disease to tell the third parties and how to avoid contracting the infectious disease from the linmate?
c. Did the Superior Court impermissibly expand the holding of this court in DiMorco v. Lynch Homes-Chaster Country, Inc., 525 Pa. 558, 588 A.2d 422 (199[0])?
d. Did the Superior Court impermissi-bly expand its own decision in Troxel v. A.l. DuPont Institute, 450 Pa. Super. 71, 675 A.2d 814 (Pa. Super. 1996) app’l den. 546 Pa.668, 685 A.2d 547 (1996) to require that a physician warn third parties where previously the Superior Court had limited that duty to only advise a patient how to avoid spreading the infectious disease that he or she had?

In DiMarco, the patient was a blood technician who was exposed to hepatitis B. The defendant-physicians advised her that if she remained symptom-free for six weeks, she could be sure she did not have the disease. Based on that advice, she and her boyfriend refrained from sexual relations for eight weeks and, upon observing that she remained symptom-free, resumed such relations. Thereafter, both the technician and her boyfriend were diagnosed as suffering from hepatitis B. The boyfriend filed suit against the physicians treating his girlfriend claiming they were negligent in failing to warn his girlfriend that she could infect her boyfriend by having relations with him within six months of her exposure. The Pennsylvania Supreme Court in a 4-3 split ruled that the boyfriend had stated a cause of action.

In Troxel, the Superior Court allowed a third-party non-patient to bring a negligence action against a medical doctor who failed to advise his patient of the dangers of spreading her disease to the unborn children of others, including the third-party plaintiff.

In Seebold, the Pennsylvania Supreme Court ruled that the Superior Court’s decision in Seebold impermissibly expanded the Pennsylvania Supreme Court’s holding in DiMarco and the Superior Court’s own decision in Troxel. The Seebold court stated that DiMarco and Troxel, even if correctly decided, dealt only with the obligation of a physician to give advice to his or her own patient. These cases cannot be relied upon as establishing that a physician has a duly to take affirmative steps to directly advise third-party non-patients in a prison environment or elsewhere. The court said that DiMarco and Troxel do not hold and cannot be fairly read to hold that a doctor’s duty to third persons includes conveying information to third persons (i.e., persons outside the doctor-patient relationship). Id. at 1243.

Seebold criticized the plaintiff for downplaying the nature of the duty in DiMarco and Troxel (doctor’s duty to accurately advise a patient) and for focusing too closely on the foreseeability of harm to third parties resulting from the absence of protective measures.

The Seebold Court limited DiMarco and Troxel to a physician’s duty to accurately advise a patient regarding the patient’s communicable disease. The duty “was not to identify, seek out provide information to, or otherwise take affirmative steps outside the physician-patient relationship to protect third-party non-patients.” Id. at 1243. At 1243 n.16, the court stated that on the subject of legal duties most scholars conclude “there is generally no duty to protect or rescue where the defendant has not engaged in risk-causing conduct; and that the no-duty precept is subject to exceptions in special circumstances where the defendant may be said to have an affirmative duty.”

The Seebold court stated that Emerich v. Phila. Center for Human Dev., Inc., 720 A.2d 1032 (Pa. 1998), is the only decision in which the Supreme Court has imposed such a duty on a healthcare professional to convey information (i.e., a warning) to an at-risk third party.

In Emerich, the patient advised his counselor during a therapy session that his former girlfriend was returning that day to the apartment where the patient and former girlfriend had lived to retrieve her clothing and that he was going to kill her if he found her removing her clothing from the apartment. On that day, she returned to the apartment, and he killed her. The estate of the former girlfriend brought a lawsuit based on the counselor’s failure to properly warn the victim and others, including the police, that the patient presented a clear and present danger of harm to the victim. The controlling issue was whether the law should impose a duty on a mental healthcare professional to warn a person who is not a patient of imminent harm. In its opinion, the court stated: “...[i]n determining the existence of a duty of care, it must be remembered that the concept of duty amounts to no more than ‘the sum total of those considerations of policy which led the law to say that the particular plaintiff is entitled to protection’ from the harm suffered. Thus, recognition of a duty is in essence one of policy considerations.” Id. at 1039 (citations omitted). The court concluded that it is reasonable to impose a duty on a mental health professional to warn a third-party of an immediate, known and serious risk of potentially lethal harm. For the duty to be imposed, there must be the existence of a specific and immediate threat of serious bodily injury that has been communicated to the professional. The threat must be made against a specifically identified or readily identifiable victim, and the professional should have determined under the standards of the mental health professional that the patient presents a serious danger of violence to the third party. The court found this duty arises out of the special relationship between a mental health professional and the patient who has communicated to the professional a specific and immediate threat of serious bodily injury. In this instance, the professional bears a duty to exercise reasonable care to protect the third party by warning the third party of such danger. Id. at 1039-41.

The Seebold opinion, 57 A.3d at 1244, limited the reach of Emerich to its facts:

The only decision in which the Court has imposed a duty upon a healthcare professional to convey information {i.e., a warning) to an at-risk third party is Emerich, which is unique in many respects and has been expressly cabined by the Court. As PHS and its amici have related, there is no targeted threat of imminent violence here; the Court has stressed that Emerich is so limited, see Emerich, 554 Pa. at 227, 720 A.2d at 1041; Witthoeft, 557 Pa. at 353, 733 A.2d at 630; and thus, Emerich cannot reasonably serve as a springboard for the imposition of new and broader duties upon healthcare providers vis-a-vis third-party non-patients.

In deciding whether the PHS staff owed a duty of care to a corrections officer, the Seebold Court considered its prior opinion in Estate of Witthoeft v. Kiskaddon, 733 A.2d 623 (Pa. 1999). In the Witthoeft case, Ms. Myers had been a regular patient of the defendant, a licensed physician whose practice of medicine was limited to ophthalmology. The physician had performed an examination of Ms. Myers that revealed her visual acuity was sufficiently poor as to require the physician by statute to report the test results to the Department of Transportation. The physician failed to inform Ms. Myers that she was not legally authorized to drive a motor vehicle in Pennsylvania and failed to report the results of the examination to PennDOT. Subsequently, while driving, Ms. Myers struck a bicyclist, resulting in the bicyclist’s death. Id. at 624-25.

The estate of the bicyclist brought an action against the physician for failure to report the patient’s poor vision to the Department of Transportation. The trial court and the Superior Court granted the physician’s preliminary objections in the nature of a demurrer. Id. at 625. The Pennsylvania Supreme Court affirmed.

The Supreme Court initially addressed the issue of whether the reporting legislation creates a private right of action. The court concluded that it did not do so because the General Assembly has not so expressly provided and because there is no statutory language to imply the same. Id. at 627-28.

The Witthoeft court next considered the plaintiff’s reliance on DiMarco as establishing a common law duty to the plaintiff. It distinguished DiMarco on the ground that the present case involved a diagnosis of poor vision, “certainly not a communicable disorder or a disorder of imminent threat to health” and “a condition of which the patient is well aware.” Id. at 628. Thus, the policy justifications which supported the DiMarco decision are notably absent in the Witthoeft case.

The Witthoeft court, after distinguishing DiMarco, discussed Crosby by Crosby v. Sultz, 592 A.2d 1337 (Pa. Super. 1997), which it found to be instructive. In Sultz, the plaintiffs suffered injuries when struck by a motor vehicle operated by Jackson. The plaintiffs asserted that Jackson’s diabetes caused him to sustain a temporary lapse of consciousness, which resulted in the accident. The plaintiffs sued Dr. Sultz who had been treating Jackson for his condition. The court found that even if Dr. Sultz had a duty to disclose Jackson’s name to the Department of Transportation, if could find “no logical connection between that obligation and a duty of care to the [plaintiffs]. The [plaintiffs] were not foreseeable victims of Dr. Sultz’s actions or inactions” and “to discount the important element of foreseeability here is effectively to overrule well-established and precedential tort law, as well as to extend liability limitlessly to treating physicians vis-a-vis third-party victims.” Crosby, 592 A.2d at 1345 (emphasis in original).

The Witthoeft court made the following ruling:

Having considered these cases, we agree with the Superior Court that the issue in the present matter is more akin to Crosby than to the situation in DiMarco. It may be reasonably foreseeable that a patient exposed to an infectious and communicable disease will injure a third party unless property informed to prevent the spread of the disease. However, we believe that if is an unreasonable extension of the concepts of duty and foreseeability to broaden a physician’s duty to a patient and hold a physician liable to the public at large within the factual scenario of this case. This is especially true where, as here, Dr. Kislcaddon did not cause or aggravate a medical condition that affected the patient’s driving and the patient was necessarily aware of her medical condition.
Appellants’ decedent is simply not a foreseeable victim that this court will recognize. We will not stretch foreseeability beyond the point of recognition for to do so will be to make liability endless. To allow liability in this case would be to make physicians absolutely liable for the various acts of their patients. This we will not countenance.

733 A.2d at 630.

In Seebold, the court clarified its position concerning foreseeability in Witthoeft, stating that Witthoeft could not be read to suggest that foreseeability was entirely lacking under the circumstances, namely that a vision-impaired driver would have an accident. The court explained that the statement that the plaintiff’s decedent was not a foreseeable victim “does not suggest that the court believed that it was unforeseeable that an accident might occur. Rather, the context reveals the Court was prioritizing other policy factors over such obvious foreseeability.” 57 A.3d at 1249 n. 25.

At n. 26, the Seebold court discussed the foreseeability requirement as follows:

Foreseeability, of course, remains a factor in duty assessments undertaken by Pennsylvania courts unless and until the matter is raised, preserved, and reconsidered on developed advocacy. Our point above is that it is not necessarily a dominant factor, as Appellee’s arguments suggest.

In summary, what I conclude from Seebold is (1) foreseeability is not necessarily the critical factor in deciding whether UPMC shall be liable to plaintiffs for UPMC’s failure to report; (2) since UPMC did not create the risk (but only failed to prevent the harm), UPMC is not liable to third persons whom it never treated in the absence of a court-created duty; (3) the default position would avoid the creation of a new duty unless the court is able to see with reasonable clarity the results of the decision and to determine with reasonable certainty that the change will serve the best interests of society; and (4) the case law which permits recovery where there is no relationship between the plaintiff and the defendant must be narrowly constructed because of the Supreme Court’s “stated concern about imposing liability upon healthcare providers without limits.” 57 A.3d at 1240.

The analysis in Seebold provides a context for the application of the five factors set forth in Althaus v. Cohen, 756 A.2d 1166, 1169 (Pa. 2000), which should be balanced in determining whether a duty should be imposed. The factors are: (1) the relationship between the parties; (2) the social utility of the actor’s conduct; (3) the nature of the risk imposed and foreseeability of the harm incurred; (4) the consequences of imposing a duty upon the actor’s conduct; and (5) the overall public interests in the proposed solution.

In this case, plaintiffs contend that the factors favor plaintiffs’ position because UPMC is being asked only to comply with a reporting requirement, a burden that can be easily met; thus, UPMC should be liable to all persons who were exposed to Kwiatkowski. The difficulty with that argument is that it ignores inevitable employee error. In all likelihood, UPMC, as an institution, intends to comply with federal regulations. However, there will never be 100 percent compliance because of employee error. Thus, the question to be resolved is whether UPMC should be exposed to potentially limitless liability because of simple employee error.

It is my reading of the case law that the answer is “no.” The default position articulated in Seebold is that a court should decline to impose new affirmative duties of care and should be especially reluctant to recognize a duty of care where liability to third parties is open-ended and the possible financial impact on the healthcare provider is limitless. The case law imposes on UPMC only a duty to protect its patients from harm caused by their coming into contact with Kwiatkowski; there is no appellate court case law which supports plaintiffs’ contention that UPMC owed a duty of care to plaintiffs with whom UPMC shared no relationship.

II. PRELIMINARY OBJECTIONS-MAXIM

COUNT IV-NEGLIGENCE (MAXIM)

Plaintiffs describe Maxim as a provider of staffing services to healthcare facilities." Plaintiffs’ negligence claim is based on Maxim’s failure to report Kwiatkowski’s theft, use and/or diversion of controlled substances to any state, federal, or other governmental agency. Plaintiffs allege that Maxim knew or should have known that without intervention Kwiatkowski would continue to engage in the theft of controlled substances while employed at other healthcare facilities. I agree.

However, I also agree with Maxim that it had no duty to plaintiffs to report any information received from UPMC regarding Kwiatkowski’s theft of drugs.

Maxim did not possess, administer, dispense, or distribute controlled substances. It did not supervise Kwiatkowski while he was working at UPMC. Maxim’s activities were not covered by the regulatory scheme implemented to combat drug abuse.

Plaintiffs do not offer any guidance as to when or to whom Maxim should have reported what it had learned, apparently from UPMC. Plaintiffs do not explain why Maxim would be expected to report what UPMC-as an entity that possesses, administers, dispenses, and distributes controlled substances-is required to report under federal and state laws.

For these reasons, I am dismissing plaintiffs’ negligence causes of action against Maxim.

ORDER OF COURT

On this 20th day of June, 2013, it is hereby ordered that UPMC’s preliminary objections seeking dismissal of counts I, II, and III and Maxim’s preliminary objections seeking dismissal of count IV are sustained, and all claims raised against UPMC Presbyterian Shadyside and Maxim Healthcare Services, Inc. are dismissed.

      . Plaintiffs, pleading in the alternative, also allege that UPMC was Kwiatkowski’s employer.

      .1 recognize that UPMC and Maxim will be disputing the allegations that they knew Kwiatkowski was likely to harm others in the future and that they took no steps to prevent him from working at other hospitals. However, at the preliminary objection stage of the proceedings, I must assume that the facts are as alleged in the first amended complaint.

      . Plaintiffs also base their negligence per se count on alleged violations of other regulations imposing a duty on registrants to guard against theft and diversion of controlled substances. However, violations of these regulations did not cause plaintiff’s injuries.

      . Plaintiffs are not contending that the Controlled Substances Act and its accompanying regulations create a private cause of action. What they do contend is that tort law recognizes a duty owed to the plaintiffs.

      .1 reject UPMC’s contention that this case is governed by J.E.J v. Tri-County Big Brothers/Big Sisters, Inc., supra. In that case, Big Brothers allegedly failed to comply with legislation requiring suspected child abuse to be reported to a law enforcement agency or child protective agency. Subsequently, the person who should have been reported molested another child. The Superior Court dismissed the plaintiffs’ complaint against Big Brothers.

        J.E.J. does not govern the present case because the court’s opinion stated that the only harm to be prevented by the statute was to protect children who are in some way connected to the persons who, in the course of their employment, come into contact with abused children.

      . The Superior Court did not issue an opinion. Consequently, I rely on the Supreme Court’s description of the Superior Court’s memorandum opinion.

      . A determination of whether to impose affirmative common law duties as a predicate to civil liability is a matter of law. Seebold, 57 A.3d at 1243.

      . Footnote 3 of plaintiffs’ brief in opposition to UPMC’s preliminary objections to plaintiffs’ amended complaint states that at Hays Medical Center alone, approximately 475 patients were potentially exposed to Kwiatkowski’s hepatitis C during his four months of employment and that at Exeter Hospital in New Hampshire, where Kwiatkowski worked after his time at Hays, up to 3,300 patients were potentially exposed to Kwiatkowski’s hepatitis C, and at least 32 patients have been identified as infected.

      . If the very recent opinion of the Superior Court of New Hampshire upon which plaintiffs rely (Rohveer v. Exeter Hospital, 2012-CV-781) had been a Pennsylvania common pleas court opinion, it would have been reversed by the Pennsylvania appellate courts based on the case law upon which I have relied.


source: Caselaw Access Project

author: HIGGINS, J.,

license: Public Domain

text:
    Stillwater Lake Civic Association, Inc. v. McGinley

      July 2, 2013

      John B. Dunn, for plaintiff

      Michael D. Collins, for defendant
   HIGGINS, J.,

— This matter was commenced on August 30, 2011 when defendants Patrick McGinley and Mary McGinley (hereinafter collectively referred to as “McGinley”) appealed a district magistrate judgment entered in favor of plaintiff Stillwater Lake Civic Association, Inc. (hereinafter referred to as “Stillwater”) in the amount of $5,895.61 for unpaid dues, fees, fines and costs. After Stillwater filed its complaint on September 27, 2011, McGinley filed a pro se answer on October 17, 2011. On May 24, 2012, attorney Michael D. Collins filed a praecipe for entry of appearance. The next day a non-binding arbitration was held and an award of $9,063.50 was entered in favor of Stillwater. On June 25, 2012, attorney Collins filed a notice of appeal from award of arbitrators. Thereafter, on January 7, 2013, attorney Collins filed a motion for leave to amend answer, plead new matter and counterclaim (“motion”). On February 4,2013, attorney George R. Hludzik withdrew his appearance and attorney John B. Dunn entered his appearance on behalf of Stillwater. An answer to McGinley’s motion was filed by attorney Dunn on February 28, 2013. The court heard oral arguments from the parties on March 4, 2013 and we are now prepared to dispose of the motion.

Rule 1033 of the Pennsylvania Rules of Civil Procedure states:

A party, either by filed consent of the adverse party or by leave of court, may at any time change the form of action, correct the name of a party or amend his pleading. The amended pleading may aver transactions or occurrences which have happened before or after the filing of the original pleading, even though they give rise to a new cause of action or defense. An amendment may be made to conform the pleading to the evidence offered or admitted.

Pa. R.C.P. 1033. “Pleadings may be amended at the discretion of the trial court after pleadings are closed, while a motion for judgment on the pleadings is pending, at trial, after judgment, or after an award has been made and an appeal taken therefrom.” Capobianchi v. BIC Corp., 666 A.2d 344, 346 (1995) (Citation omitted). The granting of leave to amend the pleadings is within the sound discretion of the trial court. Debbs v. Chrysler Corporation, 810 A2d 137 148 (Pa. Super. 2002) (citation omitted). Such discretion is broad and will only be reversed upon a showing of a clear abuse of discretion. Id. Our courts have established a policy that amendments to pleadings will be liberally allowed to secure a determination of cases on their merits. E.O.J., Inc. v. Tax Claim Bureau, 780 A.2d 814 (Pa. Cmwlth. 2001) (citation omitted). However, amendment is prohibited “where it is against a positive rule of law, or where the amendment will surprise or prejudice the opposing party.” Capobianchi, supra 666 A.2d at 346 (citations omitted). The prejudice must be more than mere detriment to the other party. Id.

If the amendment contains allegations which would have been allowed inclusion in the original pleading, then the question of prejudice is presented by the time at which it is offered rather than by the substance of what is offered. The possible prejudice, in other words, must stem from the fact that the new allegations are offered late rather than in the original pleading, and not from the fact that the opponent may lose his case on the merits if the pleading is allowed....

Id at 346-347 (emphasis in original) (citation omitted).

In addition, a party may not amend a pleading if the amendment adds a new cause of action after the running of the statute of limitations. Romah v. Hygienic Sanitation Co., 705 A.2d 841, 857 (Pa. Super. 1997). “Anew cause of action arises if “the amendment proposes a different theory or a different kind of negligence than the one previously raised or if the operative facts supporting the claim are changed.” Id. (citation omitted). “[Djenial of a petition to amend, based on nothing more than unreasonable delay, is an abuse of discretion.” Capobianchi, supra at 347 (citation omitted). “The timeliness of the request to amend is a factor to be considered, but... only insofar as it presents a question of prejudice to the opposing party, as by loss of witnesses or eleventh hour surprise.” Id. (citation omitted).

Instantly, McGinley requests to amend their answer, which would change admitted responses to denials; plead new matter and add a counterclaim. The proposed counterclaim contains a request for declaratory judgment to determine the rights of the parties from various legal documents. Specifically, McGinley claims that Stillwater lacks standing to enforce certain conditions, covenants and restrictions which bear directly on Stillwater’s lawsuit. Stillwater, on the other hand, opposes the proposed amendment. It argues that McGinley seeks to directly contradict admissions made heretofore in verified pleadings. Stillwater claims prejudice, therefore, it asks this court to deny McGinley’s motion.

First, we will consider McGinley’s request to change the admissions contained in their answer. Stillwater argues that McGinley cannot make admissions and then, under the guise of amending a pleading, reverse the admissions. A review of McGinley’s answer filed on October 17,2011 indicated that they denied several averments without averring any new or additional facts. The answer denied specific averments made in Stillwater’s Complaint and demands proof at the time of trial. However, one averment was admitted. Stillwater averred that; “[t]he predecessor in title to the Defendants, intended that the Covenants run with the land. The Covenants are also equitable servitudes which bind the lot.” Stillwater’s complaint at ¶ 6. McGinley’s answer to this averment is “Admitted.” The newly proposed “Amended Answer” to paragraph 6 seeks to deny the averment and demands strict proof at trial. In addition, the proposed “Amended Answer” claims that the averments in paragraph 6 are “so vague or ambiguous as to unintelligible.”

In regard to admissions, the Pennsylvania Supreme Court has stated that “[ajdmissions of this type, i.e. those contained in pleadings, stipulations, and the like, are usually termed ‘judicial admissions’ and as such cannot later be contradicted by the party who has made them.” Rizzo v. Haines, 520 Pa. 484, 506, 555 A.2d 58, 69 (1989) (citation omitted). Judicial admissions are deemed true, however, they must be a clear and unequivocal admission of fact. John B. Conomos, Inc. v. Sun Co., Inc., 831 A.2d 696 (Pa. Super. 2003). “Judicial admissions are limited in scope to factual matters otherwise requiring evidentiary proof, and are exclusive of legal theories and conclusions of law.” Id. 831 A.2d at 713, (citation omitted).

The majority of McGinley’s answers filed on October 17, 2011, specifically deny or claims that Stillwater’s allegations contain conclusions of law to which no response is required. However, in McGinley’s original answer, they admit the averments contained in paragraph 6. We believe this answer constitutes a judicial admission. Therefore, McGinley cannot, under the guise of amending their answer, attempt to contradict this admission. Kaiser v. Western States Administrators, 702 A.2d 609, 613 (Pa. Cmwlth. 1997). The remainder of McGinley’s answer contains specific denials of factual averments or alleges that the averments contains theories or conclusion of law. Therefore, we will permit McGinley to amend their answer to Stillwater’s complaint, except for paragraph 6 which we have determined is a judicial admission.

Next, Stillwater argues that the affirmative defenses which were not raised in their answer are waived.

A party waives all defenses and objections which are not presented either by preliminary objection, answer or reply, except a defense which is not required to be pleaded under Rule 1030(b), the defense of failure to state a claim upon which relief can be granted, the defense of failure to join an indispensable party, the objection of failure to state a legal defense to a claim, the defenses of failure to exercise or exhaust a statutory remedy and an adequate remedy at law and any other nonwaivable defense or objection.

Pa. R.C.P. 1032(a). Instantly, the proposed new matter raises the defenses of res judicata, collateral estoppel, breach of good faith and fair dealing, breach of duty of upkeep of planned community, laches and unclean hands. Since these defenses were not presented by preliminary objection, answer or reply, they are deemed waived. Similarly, the inclusion of a demurrer (that the complaint fails to state a cause of action) in the proposed new matter are waived for failing to initially present these issues by preliminary objection.

Finally, McGinley asks this court to allow them to file a counterclaim in the nature of a declaratory judgment action. McGinley alleges that Stillwater lacks standing to enforce the conditions, covenants, and restrictions on their property. Essentially McGinley seeks to have this court determine the rights of the parties from the legal documents filed on record in this matter.

The Pennsylvania Superior Court has stated that pleading may be amended “after pleadings are closed,... at trial, after judgment, or after an award has been made and an appeal taken therefrom. ” Newcomer v. Civil Service Commission of Fairchance Borough, 515 A.2d 108, 111 (Pa. Cmwlth. 1986) (citing Biglan v. Biglan, 479 A.2d 1021, 1025-26 (Pa. Super. 1984) (emphasis in original). Since amendments are to be liberally permitted in order to allow full development of a party’s theories and averments, we will allow McGinley to amend their answer for a fair and just determination of the issues in this matter, including the filing of a counterclaim in the nature of a declaratory judgment action. However, McGinley may not raise the issue which we have deemed waived whether by failure to plead in new matter or by preliminary objection (demurrer) or any pleading which we have determined is a judicial admission.

In light of the foregoing, we enter the following order.

ORDER

And now, this 2nd day of July 2013, after oral argument and upon consideration of defendant’s motion for leave to amend answer, plead new matter and counterclaim and the response thereto, it is hereby ordered that defendant’s motion is granted subject to the holdings set forth in our opinion herein.


author: GORBEY, J,

text:
    Stark v. Stark

      July 3, 2013-

      Christine Pfau-Laney, for plaintiff.

      Julie M. Cooper, for defendant.
   GORBEY, J,

OPINION SUR APPEAL

Procedural History

Tonia Stark (wife) and Mark A. Stark (husband) first became involved in this support matter on January 28, 2013, when wife filed a complaint for support for one child. On January 29, 2013, she filed an amended complaint for spousal support. An interim order for support of one child was issued on February 25, 2013, effective January 28. (N.T. 3) There was no order for spousal support because husband had questioned wife’s entitlement. (N.T. 4) A hearing was held on April 3, 2013 and a subsequent order issued on April 10 sustained husband’s position that wife was not entitled to spousal support. On May 9, 2013, wife filed an appeal to the Superior Court from the April 10 order. On May 10, 2013, wife filed a motion for reconsideration which was denied on May 14, 2013.

Factual History

Wife left the marital residence on January 23, 2013. (N.T. 5) She contends that her motivation for leaving was husband’s controlling nature, his violent proclivities, and his use of pornography. She reported that he would distract her so that she could not speak on the telephone to her family, demanding instead attention to him. (N.T. 7, 9) She described an occurrence in which her daughter and son were involved in a physical altercation over a video game while husband laughed and egged her son on to hit his sister. She described one occasion on which husband pulled her hair. She complained also that he insisted to her that she should want to kiss him and spend time with him. She believed that he also tried to control her weight, telling her she was too thin and she should eat. (N.7) She presented no details as to the use of pornography. Husband credibly denied her allegations, asserting that she spoke for hours on the phone with her family, that the altercation between the children was a sibling fight over a toy, that the hair-pulling episode was during a tender moment, and was really only a playful tug. His objection was her being on the telephone and ignoring him when he arrived home from work. (N.T. 11 -12) He also told the court that she was bipolar, which she corroborated, and that her spending of marital funds was out of control. (N.T. 20,30) He does not want a divorce or separation. (N.T. 13-14)

The parties have two children, a fifteen year old daughter and a seventeen year old son. The son resides with Husband and the daughter resides with wife.

Husband has worked at K & W Tire Company for fifteen years. He makes a weekly gross of $692.31 and has medical coverage for himself at a cost of $14.84 per week. His net is $2,500 per month, and his current expenses exceed that figure. The children have medical coverage through CHIP. (N.T. 20)

Wife works part-time at a school as a library assistant and a cafeteria aide. When she works at the former job she makes $10.20 per hour; the latter pays her $8.89 an hour. She works 20 hours a week. (N.T. 18). She worked previously only when first married as a receptionist/ secretary at between $10 and $11 per hour. (N.T. 19) She has workers with disability health insurance. (N.T. 20) She has a problem with her feet. Foot surgery was performed in February of 2013 and a second surgery will be performed in June. She cannot work for six weeks after surgery. (N.T. 15-16)

The parties have three credit cards with a cumulative balance of $15,000, almost all of which was charged by wife. (N.T. 22) Husband is paying off the debt, with the help of a credit counseling agency. (N.T. 23) The parties live in a house owned by husband’s parents and pay $420 a month in rent. The parties’ church has been helping them with their utilities. Additionally, because of their marital difficulties and at the specific request of wife, husband voluntarily enrolled in a thirteen week counseling program in Philadelphia, which costs him $100 per week in tuition and travel. (N.T. 13, 26) Wife now denies value in the program. (N.T. 13)

The court’s order of April 10,2013 sustained husband’s appeal and denied wife’s entitlement to spousal support. It entered a four tiered order: a) Effective as of the filing date, husband was to pay $237.94 in monthly support, based on a net monthly income to husband of $2538.89 net and a net monthly income partially imputed to wife in the amount of $1426.14; b) effective April 3, 2013, husband was to pay $245.98 per month in child support and alimony pendente lite, based on a net monthly income to husband of $2538.89 and a net monthly income partially imputed to wife in the amount of $1426.14; c) effective June 6, 2013, husband was to pay $1138.67 in child support and alimony pendente lite. This was based on Husband’s monthly net income of $2,538.89, and zero income for plaintiff for seven weeks after her foot surgery; d) effective August 1, 2013, husband was to pay $245.98 in child support and alimony pendente lite for plaintiff. Order based on plaintiff’s imputed earnings of $1426.14 per month (400 per week gross) and husband’s earnings of $2538.89 monthly.

Wife’s imputed earnings were calculated based on $ 10.00 per hour, slightly less than her current hourly salary as a library aide extrapolated over a 40 hour work week.

ISSUES

1. Whether wife is entitled to spousal support when she described why she left the marital home in both generalities and in three specific complaints that the court found to be ambiguous and non-credible.

2. Whether additional income could be imputed to wife when she worked a twenty hour week as a school library and cafeteria aide, was a high school graduate, had taken college equivalency classes, played piano proficiently and whose husband’s income and her part-time income could not cover the expenses of two residences, in each of which a child also resided

ANALYSIS

Plaintiff presented seven issues for appeal in her 1925(B) statement, but basically she has only two specific complaints. The first is that the court erred in denying her entitlement to spousal support and the second is that the court erred in imputing income to her. Her other issues, which deal with deviation from the guidelines and miscalculation of the support amounts, actually boil down to the court’s use of the imputed income figure.

The preliminary issue is whether she had adequate legal reason for voluntarily leaving the marital home without her husband’s consent. A wife, seeking support following a nonconsensual voluntary move from the marital home has the burden of proving that her husband’s conduct justified the leaving. McKolanis v. McKolanis, 644 A.2d 1256, 1257 (Pa. Super. 1994) If she cannot provide an adequate justification, her right to support is defeated. Myers v. Myers, 592 A.2d 339, 341 (Pa. Super. 1991) The phrase “adequate cause for leaving” is not subject to exact definition, but must be considered on the facts of each case. (McKolanis at 1258) Also, the reasons for leaving must be specific and not expressed in generalities. Van Wagenen v. Van Wagenen, 74 A.2d 740 (Pa. Super. 1950)

After review of the testimony of the parties and the relevant law, the court concludes that wife did not have adequate legal reason for leaving the marital residence, certain of wife’s complaints about husband’s behavior was offered in generalities. She asserted that husband controlled her, telling her that he wants her to kiss him and spend time with him, calls her names and makes her feel stupid. More detail would be needed for the court to reasonably determine whether wife was justifiably troubled by these behaviors. Other of her testimony was presented in more detail, such as her description of an altercation between her son and daughter wrestling over physical custody of a video game. She said that her husband was laughing and urging the son on to physically hurt his sister. Husband, during his testimony, described the situation as one of those things that take place between siblings squabbling over a possession. Even as wife described it, that is precisely the characterization the court would place upon it. Wife also contended that her husband controlled her and wouldn’t let her use the telephone to speak with her family. But she also said that his method of control was distraction in order to maintain her attention on him. Husband reported that she that she talked to her family for hours on the telephone. The court rejects this scenario as showing abusive behavior, but rather sees it as a situation in which husband comes home from a full day of work and finds his wife on the telephone and non-responsive to him and remarks upon his displeasure. Wife also reported an incident in which husband pulled her hair. Husband reported the incident as a playful tug made while they were lying together on the sofa. The court finds wife’s interpretation of such events to be non-credible, presented with a gloss of over-dramatization and finds husbands testimony to be more credible than wife’s. Additionally, husband voluntarily became involved in a series of therapy sessions at a substantial expense of time and money. He went to the course at the specific urging of wife. Wife complained that the course was insufficient, although she had not informed husband of her conclusion and let him continue despite her negative attitude. Husband wants to maintain the marriage; wife is unhappy and wants to leave. This may be a marriage on the road to divorce, but the court does not find that Wife’s testimony proves that husband’s behavior is at a level which made wife’s existence unbearable and reasonably triggered her leaving. Wife is not entitled to spousal support.

Wife complains further that the court erred in deviating from the guidelines in all of its calculations at the various tiers. But the court did not deviate. The real issue is not whether the court erred in calculating wife’s support obligation; the issue is whether the court erred in imputing an earning capacity and then calculating the support obligation by use of the guidelines using that imputed earning capacity.

An imputed income is permitted under Pa. R.C.P. 1910.16-2(d)(4), which says:

(4) Earning Capacity. If the trier of fact determines that a party to a support action has willfully failed to obtain or maintain appropriate employment, the trier of fact may impute to that party an income equal to the party’s earning capacity. Age, education, training, health, work experience, earnings history and child care responsibilities are factors which shall be considered in determining earning capacity. Determination of what constitutes a reasonable work regimen depends upon all relevant circumstances including the choice of jobs available within a particular occupation, working hours, working conditions and whether a party has exerted substantial good faith efforts to find employment.

Wife is holding down jobs as a cafeteria aide and a library aide at a local school, at hourly rates of $8.89 and $10.20 respectively. She baby-sits during the summer for $ 125 a week, when the other jobs are unavailable. Wife has a high school diploma and has taken college equivalency courses. When she worked full-time prior to the birth of her children, she was a secretary/receptionist. She also has the ability to play the piano with some proficiency, since she has on occasion played for the Lancaster conservatory of music. She suffers from bi-polar syndrome, but presented no medical evidence on if or how that might affect her ability to work on a regular basis.

The court finds that wife has voluntarily and willfully refused to work at appropriate employment. While her part-time schedule may have been satisfactory to the parties while the family income was used to support one household, now there are two households, each with a child. Husband’s income did not magically expand to support the expenses of two households upon separation, nor was there any allegation by wife that she cannot hold a full-time job. In fact, her testimony indicates that she believes herself to be capable of full-time work, since she requested additional hours from the school. She was told time would not be available until the next year, but she looked no further for additional work. There are no small children at home who demand her attention all day. Wife has testified to no limits on her ability to work full-time, except for her foot surgery, which the court considered in its order. In short, the only thing standing in wife’s way to extra money is her own negative decision. Since wife has expended no effort to obtain a full-time job, her decision to do so can be termed a willful failure. Thus the court is permitted to impute to her the income that a full-time position would provide and finds that plaintiff has an earning capacity of $ 1426.14 per month.

The court used that figure in calculating husband’s support obligation, making such modifications as called for by the facts of the split custody and wife’s surgeries. The final calculations are appropriate in relation to the guidelines, and there is no calculation error or deviation.

CONCLUSION

Based on the above, the court finds the order of April 10,2013 to be accurate and appropriate in all of its aspects and maintains it as the current order of court.

      . Wife has requested and received alimony pendente lite, for which defendant has no entitlement defense. The disadvantage to plaintiff is that APL is subject to income tax and is counted as part of her income, while spousal support is not.


author: ZULICK, J,

text:
    Mountain Manor Development Co., LP v. Monroe County Board of Assessment Appeals

      June 11, 2013

      Francis J. Hoegen, for plaintiff.

      Mark Love, for defendant Monroe County Board of Assessment Appeals.

      Christopher Brown, for defendant East Stroudsburg Area School District.
   ZULICK, J,

— The Monroe County Board of Assessment Appeals and the East Stroudsburg Area School District (board/district) have filed a petition to quash this real estate tax assessment appeal. The appeal was filed on November 8,2012. The petition to quash was filed on January 24,2013. Although the appeal states that it was filed by Mountain Manor Development Company, L.P., (Mountain Manor L.P.) it was actually filed by Mountain Manor Inn, Inc., Mountain Manor, Inc., Mountain Manor Estates, Inc. and Holjak IH, Company, Inc. (Mortgagees) who jointly hold a mortgage on the property. The Mortgagees contend that they are the attorney-in-fact for Mountain Manor L.P. pursuant to a power of attorney in the mortgage instrument. See mountain manor development company’s answer to respondents’ joint petition to quash appeal, ¶5. The mortgagees admit that they do not have legal title to the property.

The mortgagees have attached their mortgage as exhibit 1 to their answer. Id. They allege that the owner of the property, Mountain Manor L.P., is in default of its payment obligations under the mortgage. Id. The mortgagees contend that they have the right to pursue this appeal, even though they do not have legal title to the property, for two reasons. Their first argument is that as a mortgagee, they are an equitable owner of the property. The second is that they are Mountain Manor L;P.’s attorney-in-fact due to a power of attorney found in the mortgage.

A closer look at the mortgagees’ second argument reveals that the power of attorney in the mortgage does not authorize the mortgagees’ filing of this appeal. It has been a fundamental principle that powers of attorney are strictly construed and the grant of special powers is not to be enlarged unless this is clearly intended. Schenker v. Indemnity Insurance Company of North America, 340 Pa. 81, 16 A.2d 304 (1940); Campbell v. Foster Home Association, 163 Pa. 609, 30 A. 222 (1894). Nevertheless, it has also been held that “the rule of strict construction will not be allowed to defeat the very purpose of the agency,” and “[wjhere the agent has authority to exercise discretion his exercise thereof will bind the principal.” Cordon’s Estate, 278 Pa. 153, 156-57, 122 A. 234, 235 (1923). See also Nuzum v. Spriggs, 357 Pa. 531, 55 A.2d 402 (1947). Estate of Reifsneider, 531 Pa. 19, 22, 610 A.2d 958, 960 (Pa., 1992).

The mortgagees rely upon paragraph 13(d)(1) of the mortgage as authority for their appeal of the property tax assessment. That paragraph provides as follows:

13. Remedies

Upon the happening of any one or more of said Events of Default...Mortgagee may forthwith undertake any one or more of the following:
...(d) Take such other action to protect and enforce Mortgagee’s rights hereunder and the lien hereof, and under the Note, as Mortgagee deems advisable, including but not limited to:
...(3) Based on this paragraph, which shall constitute a power of attorney from Mortgagor to Mortgagee coupled with and (sic) interest, Mortgagee’s filing as the attomey-in-fact for Mortgagor an assignment of declarant rights and special declarant rights from Mortgagor to Mortgagee or its assigns, at Mortgagee’s sole option.

Mortgage, exhibit 1, Mountain Manor L.P.’s answer.

The mortgagees contend that this language in the mortgage authorizes them to file “this tax assessment appeal as the attorney-in-fact” for Mountain Manor, L.P. Mortgagee’s brief, unnumbered page 5. The board/district respond that the power of attorney means only what it says; that the mortgagees have the right to assign declarant rights.

I find that this power of attorney does not authorize the filing of this appeal. The grant of authority from Mountain Manor L.P. in the mortgage says nothing about the right to challenge a tax assessment appeal. If this power was granted, it would have been easy for the parties to have said so. 20 Pa. C.S.A. §5602 (22) and §5603 (u) provide that a power of attorney which authorizes the agent “to pursue tax matters” shall mean that the agent may “protest and litigate tax assessments.” Id. §5603(u). Strict construction of the actual language in the mortgage does not authorize the mortgagees to prosecute this tax assessment appeal.

The mortgagees also contend that they have the right to pursue this appeal in their own right. The Consolidated County Assessment Law, 53 Pa.C.S.A. §8801 et. seq. (CCAL) applies to counties of the fourth class, which is Monroe County’s designation. Id. Section 8801 (b). The CCAL provides in 53 Pa.C.S.A. §8844(c)(l) that:

Any person aggrieved by any assessment, whether or not the value thereof shall have been changed since the preceding annual assessment, or any taxing district having an interest in the assessment, may appeal to the board for relief...

Following an appeal to the board, any appellant, property owner or affected taxing district may appeal the board’s decision to the court of common pleas. 53 Pa.C.S.A. §8854.

The mortgagees contend that they are a “person aggrieved” by the assessment of these properties because the owner, Mountain ManorL.P., has not paid the mortgage in more than one year, the real estate taxes are delinquent, and the property which is subject to the mortgage has fallen into disrepair. They cite the need to challenge the assessment of the properties to preserve the equity in the property.

The board/district opposes the mortgagees’ standing to pursue this appeal because they do not have an ownership interest in the property and are not subject to taxation for the property.

The Pennsylvania Supreme Court held in Appeal of Baltimore and O.R.R, 175 A.2d 841 (Pa. 1961), that the owner of an equitable title in land could be taxed, and by implication, could challenge an assessment. There, the B & O Railroad appealed a tax although it did not own the property. Blue Knob appealed to the court from the assessment of taxes upon the ski lodge. The Commonwealth Court held that the lease gave Blue Knob possession and sufficient indicia of ownership of the ski lodge to justify the tax assessment and the appeal.

The West Newton Borough owned property which was the subject of the appeal in Filbern Manor Apartments v. Board of Assessment Appeals, 589 A.2d 279 (1991), appeal denied, 529 Pa. 626, 600 A.2d 541 (1991). The Borough leased the property for a 99-year term to Filbern Manor with the understanding that the lessee would build low-income housing on the tract. Tax assessments for the property were issued to Filbern Manor, and Filbern Manor paid the taxes. The Commonwealth Court held that that the lessee was the owner of the leasehold improvements, and was therefore the owner of the “taxable property” for purposes of the appeal. The court later commented on this holding as follows:

Summarized, Blue Knob and Filbern Manor decisions stand for the proposition that the tenant with a long-term leasehold interest in public property is taxable “on the theory that he either owns the fee or something equivalent.”

In re West Allegheny School District, 797 A.2d 414, 417-418 (Pa. Cmwlth. 2002).

The court continued this line of decisions in the case of In re West Allegheny School District, 797 A.2d 414 (Pa. Cmwlth. 2002). There, the court held that the holder of a seven-year commercial sub-lease that obligated the sub-lessee to pay the real estate taxes had standing to challenge a tax assessment. The court stated that the sub-lessee was “the ‘owner’ of a non-freehold, possessoiy interest in the taxable property for a term of years, something less than legal or equitable ownership, but ownership assessment levied against property it possessed under an executory agreement of sale with the owner, the Commonwealth of Pennsylvania. The court held that the railroad was the proper subject of taxation because it had equitable title and possession.

In Marcus Hook Development Park, Inc. v. Board of Assessment Appeals of Delaware County, 449 A.2d 70, 73 (Pa. Cmwlth. 1982), Marcus Hook Development leased acreage from the Borough of Marcus Hook. Marcus Hook Development filed an appeal of the tax imposed upon the Borough for the property. The Commonwealth Court held that the borough was the owner of the property and the proper party to appeal an assessment:

Here the borough is the real owner, as owner of record and beneficial owner as well. MHD, as lessee, although obligated by lease to pay the taxes to or on behalf of the borough, does not, by virtue of that lease provision, become the taxpayer in the place of the borough.

Id. at 73.

The Marcus Hook court noted that “(t)he Pennsylvania Supreme Court has consistently interpreted the real estate tax laws to tax the real owner, North Philadelphia Trust Co. v. Heinel Bros., Inc., 172 A. 692 (Pa. 1934), which need not be the record owner, but may be the equitable owner, Baltimore and Ohio Railroad Appeal, 405 Pa. 349, 175 A.2d 841 (1961)” Id.

Later cases broadened the concept of an “owner” entitled to challenge a tax assessment. The Commonwealth Court allowed standing for a commercial tenant in In re Blue Knob Recreation, Inc., 551 A.2d 9 (Pa. Cmwlth. 1988), appeal denied, 522 Pa. 597, 562 A.2d 321 (1989). There, Blue Knob Recreation, Inc. built a ski lodge on land leased from the Commonwealth. Blue Knob was assessed for the value of the ski lodge, nonetheless for the purposes of Section 518.1.” Id. at 418 (footnotes omitted). See also West Mifflin Area School Dist. v. Board of Property Assessment, 802 A.2d 687, 690 (Pa. Cmwlth. 2002) (subtenant has standing).

Here the mortgagees argue that they have an “equitable interest” in the subject property by virtue of their recorded mortgage, which gives them standing for this appeal. The mortgagees have cited no cases granting standing in a tax assessment appeal to a mortgagee. In the line of cases discussed above, standing was upheld for parties with an ownership interest in the land. Ownership may have been through equitable title or possession of property under a lease agreement that required the tenant to pay the real estate taxes.

Pennsylvania law recognizes that mortgages, although involving a conveyance, act as security interests or liens. See In re State Tax on Foreign-Held Bonds, 15 Wall. 300, 82 U.S. 300, 322-23, 21 L.Ed. 179 (1872) (“Though in form a conveyance, [a mortgage] was both at law and equity a mere security for the debt. That such is the nature of a mortgage in Pennsylvania has been frequently ruled by her highest court.”). Pines v. Farrell, 577 Pa. 564, 574, 848 A.2d 94, 100 (Pa. 2004). Mortgages are merely security interests for the payment of money, performance or other collateral. E.g., Winthrop v. Arthur W. Binns, Inc., 160 Pa. Super. 214, 50 A.2d 718, 719 (1947). “A mortgage is only a lien or incumbrance on the land mortgaged, and that the mortgagee has no estate in the land.” In re State Tax on Foreign-Held Bonds, supra 82 U.S. at 314 (“[I] n Pennsylvania ...); In re City of Philadelphia, Fortieth Ward, 63 A.2d 42, 43 (Pa. 1949) (“[A] mortgage is both in law and in equity only a security for the payment of money and passes no title to the land. The mortgagor is the owner of the land.”). Pines v. Farrell, supra at 99.

Here the mortgagees do not have an ownership interest in the property. The mortgagees are not obligated by a lease or agreement to pay the taxes on the property. There is no allegation that the mortgagees have commenced a foreclosure action. There is also no allegation that the mortgagees have paid any of the owner’s delinquent taxes. The mortgagees are not in possession of the property. Whether the mortgagees’ interest will mature into an ownership interest is dependent upon the outcome of future actions or omissions by the owner of the property. If a mortgagee is generally given the right to challenge an assessment, the outcome may be adverse to the interests of the owner, who will then be legally obligated to pay the assessment as modified.

It is true that under circumstances such as those that exist here, a mortgagee may be the party who pays delinquent taxes on a property, but until the security interest develops into something more closely akin to an ownership interest, the mortgagee is not “a person aggrieved by an assessment.”

ORDER

And now, this 11th day of June, 2013, following consideration of the joint petition to quash appeal filed by the Monroe County Board of Assessment Appeals and the East Stroudsburg Area School District and the parties’ briefs and arguments, it is ordered that:

1. The petition to quash the appeal is granted.

2. This appeal is dismissed.

      . Pennsylvania adopted a statutory regulation of powers of attorney in 1982 at 20 Pa.C.S.A. §5601 et. seq. Section 5601 now provides that In addition to all other powers that may be delegated to an attorney-in-fact, any or all of the powers referred to in section 5602(a) (relating to form of power of attorney) may lawfully be granted in writing and, unless the power of attorney expressly directs to the contrary, shall be construed in accordance with the provisions of this chapter.


author: SNITE, J,

text:
    Naids v. Keystone Eye Assoc Associates, LLC

      June 7, 2013 —

      Daniel S. Bernheim and Matthew R. Skolnik, for plaintiff.

      Eric C. Milby and Stuart R. Lundy, for defendants Sharon Huber, Mary DeFrancisco, Leo Santamarina, John Siliquini Jr, Dennis Slochower and Keystone Eye Associates, LLC.
   SNITE, J,

In 2004 John Siliquini, M.D. and former partner JoannaFisher, M.D. of Siliquini, Fisher & Associates merged with defendant Dennis Slochower, M.D. and plaintiff Richard Naids, M.D. of Northeastern Eye Associates to form Keystone Eye Associates. Doctor Fisher subsequently sued Keystone Eye Associates including suing Doctors Slochower, Naids, and Siliquini for disputes arising out of her departure from Keystone Eye Associates. Defendants now ask for the removal of Alan Frank, Esquire, counsel for plaintiff Doctor Naids, pursuant to Rule 1.9(a) of the Professional Rules of Conduct, due to Mr. Frank’s representation of defendant Doctor Siliquini in a 2006 partnership dispute with Doctor Fisher.

Rule 1.9(a) of the Rules of Professional Conduct provides as follows:

A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in...a substantially related matter in which that person’s interest are materially adverse to the interests of the former client unless the former client gives informed consent.

While Doctor Siliquini understood Doctor Fisher’s complaints against Doctors Slochower and Naids and Keystone Eye Associates, he did not agree that Doctor Fisher’s complaints were egregious enough to rise to the level of departure from the partnership. While Doctor Siliquini was a named defendant, he remained somewhat sympathetic to Doctor Fisher’s complaints.

As Doctor Fisher’s suit progressed, Doctor Siliquini became worried about the finances and bookkeeping of Siliquini, Fisher & Associates. Although there had been a merger, Siliquini, Fisher & Associates kept some separate financial holdings until a complete “winding-up” of the former association. He believed that Doctor Fisher had and was misappropriating funds from the SiliquiniFisher bank account. This caused Doctor Siliquini to seek separate representation against plaintiff Doctor Fisher. Doctor Naids suggested Mr. Frank. Mr. Frank was hired by Doctor Siliquini and proceeded to serve pre-complaint discovery on Doctor Fisher.

Mr. Frank claims that the varying roles of the parties and attorneys in the two disputes of Fisher v. Keystone Eye Associates and Siliquini v. Fisher would not preclude him from representing plaintiff Doctor Naids in the instant action.

However, the court accepts Doctor Siliquini’s averments that Mr. Frank was privileged to his private thoughts and concerns about the operation of Keystone Eye Associates including his private thoughts concerning the strengths and weaknesses of other partners including Doctors Slochower and Naids. The court also accepts Doctor Siliquini’s averments that Mr. Frank appeared to have access to both Doctor Slochower and the firm accountant Alan Roomberg, now both defendants in the present action. Mr. Frank’s role in pursuing Doctor Fisher for the Fisher-Siliquini dispute was seen by Doctors Slochower and Naids as compatible in the case against Doctor Fisher. Furthermore, the court notes that Keystone Eye Associates paid Mr. Frank’s bills during his representation of Doctor Siliquini in the Fisher-Siliquini dispute.

The court reiterates that the prior action and the present action involve a substantially related matter involving the same types of causes of action, the same parties, and similar if not identical allegations. Additionally, the background information Mr. Frank learned through his representation of Doctor Siliquini in the Fisher Siliquini dispute is substantially similar to the instant action and involves the same issues to be litigated in the present case.

The court is also not moved by Mr. Frank’s argument that Doctor Siliquini is incapable of, or refuses to, articulate specific instances wherein Doctor Siliquini can clearly demonstrate that he will be harmed by Mr. Frank’s representation of plaintiff Doctor Naids. First, Mr. Frank’s previous access to privileged thoughts of the people involved in the present action greatly disturbs the court. Second, there is absolutely no way Doctor Siliquini can be forced to air in public in this preceding his private attorney client conversations. (There is specifically one instance that is particularly troubling to the court where Mr. Frank asked Doctor Siliquini in his deposition conducted to decide this motion about some legal irregularities that Doctor Siliquini disclosed to Mr. Frank during his representation. Clearly, Doctor Siliquini cannot be questioned on this issue in discovery or at trial.) The purpose of a disqualification proceeding is not for a client to disclose eveiything communicated to his attorney.

The court fully understands the difference in what occurred years ago in the Fisher versus Keystone Eye Associates dispute in which Mr. Frank was not counsel for a party, and in the Siliquini versus Fisher preliminary litigation in which Mr. Frank was Doctor Siliquini’s counsel. The differences are not persuasive due to existence of “deep background” privileged communications that did occur.

The court also does not find persuasive plaintiff’s argument that defendant Doctor Siliquini waived a conflict by not taking action sooner. The court wanted to act on the instant motion earlier, but to do so would have put plaintiff at a severe disadvantage due to the ongoing and immediate action required in the emergency motion for injunctive relief.

The purpose of a disqualification proceeding is to determine whether it is appropriate for Mr. Frank to now be counsel for Doctor Siliquini’s adversary. As such, the court finds that Mr. Frank’s representation of plaintiff doctor in the present action is not appropriate and he must be disqualified as plaintiff’s counsel.

ORDER

And now, this 7th day of June, 2013, upon consideration of plaintiff’s petition for preliminary injunction, and any response in opposition thereto, it is hereby ordered that said preliminary injunction is denied without further hearing and without prejudice.

It is further ordered that the order dated June 4, 2013 scheduling a hearing for June 18, 2013 is vacated.

      . A hearing was listed for June 18, 2013 in contemplation of, inter alia, an orderly transition of Doctor Naids departure from Keystone Eye Associates originally scheduled to occur on August 9, 2013. Plaintiff Doctor Naids accelerated his departure date to May 31, 2013 triggering additional supplements to the original injunction filings. Immediate concerns of the parties were addressed by phone conferences held on Wednesday May 29, 2013 and Tuesday June 4, 2013 which lead to partial agreement by the parties. The court did not wish to act on further requests at that time. The court is now of the opinion that plaintiff’s remaining preliminary injunction requests are essentially requesting the court to walk the parties through dissolution. This court refuses to do so.