author: SHEPPARD JR., J.,

text:
    Terra Equities Inc. v. First American Title Insurance Co.

      C.P. of Philadelphia County,
    March Term 2000,
    no. 1960.

      Robert Fiebach and Jennifer M. McHugh, for plaintiffs.

      Eugene J. Maginnis, for defendant.
    August 2, 2000
   SHEPPARD JR., J.,

Defendant First American Title Insurance Company, has submitted both a petition to dismiss on the grounds of forum non conveniens and preliminary objections to the complaint. For the reasons set forth in this memorandum opinion, this court has issued a contemporaneous order denying the petition to dismiss and overruling the preliminary objections.

FACTS

On April 22, 1993, Commerce Limited Partnership no. 9219 entered into a lease agreement (original lease) with Irving Baker under which Commerce agreed to lease real property in Orange County, Florida (premises). The original lease also included a provision allowing Commerce to exercise an option (original option) to expand the premises to include an adjoining parcel (expansion area). It was recorded on March 10, 1994.

First American issued a title policy to Commerce to insure Commerce’s leasehold and the original option in the premises and the expansion area, with an effective date of March 10, 1994. Under the policy, First American was to insure against loss or damage up to $400,000 incurred by Commerce due to:

“(1) Title to the estate or interest described in schedule A being vested other than as stated therein;

“(2) Any defect in or lien or encumbrance on the title;

“(3) Unmarketability of the title;

“(4) Lack of a right of access to and from the land.” Policy at 1.

The policy includes the following provisions regarding the defense and prosecution of actions:

“(a) Upon written request by the insured and subject to the options contained in section 6 of these conditions and stipulations, [First American], at its own cost and without unreasonable delay, shall provide for the defense of an insured in litigation in which any third party asserts a claim adverse to the title or interest as insured, but only as to those stated causes of action alleging a defect, lien or encumbrance or other matter insured against by this policy....

“(b) [First American] shall have the right at its own cost, to institute and prosecute any action or proceeding or to do any act which in its opinion may be necessary or desirable to establish the title to the estate or interest, as insured, or to prevent or reduce loss or damage to the insured.” Policy conditions and stipulations at ¶4.

The policy also includes an option endorsement, which states that:

“With respect to the option to purchase described in schedule B, the option to purchase is hereby incorporated into schedule A of the policy as an interest insured thereby vested in the insured and [First American] insures against loss or damage sustained or incurred by the insured by reason of:

“(a) The unenforceability of the right to exercise the option to purchase except to the extent that such unenforceability or claim thereof is based on the failure of the insured to have fulfilled the terms and conditions of the option.

“(b) The priority over the option to purchase of any conveyance made of the fee simple estate in the land or of any liens or encumbrances created therein after the date of policy, excepting those liens or encumbrances created or consented to by the insured or created by statute in favor of or for the benefit of governmental bodies or public utilities including without limitation real estate taxes, special assessments, demolition liens, drainage liens and water liens.”

On August 3, 1994, soon after the issuance of the policy, Commerce and Baker executed an amended lease agreement. This amended lease agreement was recorded on August 15, 1994. On January 27, 1995, Baker and Commerce entered into a second amendment to the original lease. The second amended lease, recorded on April 6, 1995, included an option under which Commerce could demand that Baker convey the premises and the expansion area to Commerce or its designee within 60 days for $350,000. Sometime thereafter, Commerce sought to purchase the premises and the expansion area by exercising the option.

When obstacles to the purchase of the premises and the expansion area arose, Baker and Commerce agreed on May 4,1995 that Commerce would begin to pay rent for the expansion area under the terms of a restated lease as of June 1, 1995. Although the restated lease has not been produced, Commerce asserts that it grants Commerce exclusive possession of the expansion area. Commerce further asserts that it became the equitable owner of the expansion area as of that date and retained the option allowing it to purchase the expansion area at any time during the term of the restated lease. Under the restated lease Baker did not retain a right to grant easements in the premises or expansion area to others, and, in the event that Commerce exercised the option, Baker was required to convey good and marketable title, free and clear of all encumbrances.

In conjunction with the sale of certain property near the expansion area, and without prior notice to Commerce, Baker granted Brightway Builders Inc. a storm water drainage easement giving Brightway the right to enter the expansion area and make use of a Commerce-built retention pond for storm water run-off and drainage. According to this easement, which was recorded on May 17,1996, Baker and any future assignees of Baker are responsible for the maintenance of the retention pond for Brightway’s benefit.

On June 26,1997, Commerce gave Baker notice of its intent to purchase the expansion area and set July 15, 1997 as the closing date for the sale. However, due to the encumbrance placed on the expansion area by the easement, the closing did not take place. Commerce asserts that Brightway entered the expansion premises sometime in December 1997 in order to perform construction work on the storm water retention pond to make it suitable for Brightway’s storm drainage needs.

Commerce filed suit (Baker suit) in Florida’s Circuit Court for the Ninth Judicial Circuit for Orange County against Baker and Brightway on February 23,1998 seeking damages and specific performance under the lease agreement, the amended lease agreement, the second amended lease and the restated lease. In the Baker suit, Commerce further sought a declaratory judgment to declare the easement invalid and to quiet title to the expansion area. Commerce also asked for damages for breach of contract and for trespass.

Commerce sent notice to First American of its claim relating to the easement across the expansion area on December 1, 1997. On March 9, 1998, Commerce provided First American with the basis of its claim, asserting that it had sustained damages as a result of the unenforceability of the option and the priority of the easement over the option. Commerce also provided First American with a copy of Commerce’s complaint in the Baker suit and asked that First American pay costs and legal fees associated with those counts of the complaint seeking to determine the validity of the easement.

First American responded on March 18, 1998, refusing to cover the costs of the litigation. First American based its denial on the fact that it was not aware of any claim that the easement had priority over the option, although it appears that this is precisely the position taken by Brightway in the Baker suit. Over the next year and one-half, Commerce and First American exchanged correspondence relative to the Baker suit, without any success at resolving the dispute. Commerce claims that, to date, it has incurred in excess of $90,000 in fees and expenses in attempting to clear title to the expansion area.

On March 17, 2000, Terra Equities Inc., Charles McDonald, trustee and Martin E. O’Boyle Sr., plaintiffs, filed this complaint against First American alleging a breach of contract and bad faith. In the complaint, the plaintiffs seek damages in excess of $50,000, together with attorneys’ fees, punitive damages, interest and costs.

First American filed preliminary objections on May 15, and plaintiffs have responded. First American filed the petition to dismiss on venue grounds on June 15, and plaintiffs have responded in opposition. Both matters are ripe for determination.

DISCUSSION

I. The Petition To Dismiss on the Basis of Forum Non Conveniens Should Be Denied

Defendant relies on 42 Pa.C.S. §5322(e), which statute permits Pennsylvania courts to dismiss a matter when the “interests of substantial justice” call for the case to be heard in a forum outside Pennsylvania. For the present analysis, Pa.R.C.P. 1006, which governs changes of venue within the Commonwealth, must also be discussed. This is because both section 5322(e) and Rule 1006 are derived from the common-law doctrine of forum non conveniens, and both authorities are applied in the same way in cases involving this issue. Jones v. Borden Inc., 455 Pa. Super. 110, 114, 687 A.2d 392, 394 (1996); Shears v. Rigley, 424 Pa. Super. 559, 564, 623 A.2d 821, 824 (1993).

Granting a petition to dismiss for forum non conveniens requires, first, that there be an alternative forum available to the plaintiff. Farley v. McDonnell Douglas Truck Services Inc., 432 Pa. Super. 456, 462, 638 A.2d 1027, 1030 (1994). If this is established, the defendant has the burden of demonstrating that the plaintiff’s choice of forum is vexatious or oppressive. Dulaney v. Consolidated Rail Corp., 715 A.2d 1217, 1219 (Pa. Super. 1998).

A. The Availability of an Alternative Forum

Under Pennsylvania law, a court may not dismiss a complaint on the ground of forum non conveniens “when such a decision results in the plaintiff being unable to institute an action elsewhere.” Farley, 432 Pa. Super, at 463, 638 A.2d at 1030. A trial court that fails to consider the availability of an alternative forum will be found to have abused its discretion, Jones, 455 Pa. Super, at 115, 687 A.2d at 394, although “[a] stipulation made by a defendant that he or she will submit to service of process and not raise the statute of limitations as a defense has been accepted by the courts as eliminating the concern regarding the availability of an alternative forum.” Id., 455 Pa. Super, at 116, 687 A.2d at 395.

In this matter, First American has agreed to submit to Florida jurisdiction and will waive defenses related to the timeliness of the action, provided that the plaintiffs reinstate the action in Florida within 45 days of dismissal by the court. However, First American’s offer is illusory. While Florida law permits a person to bring a civil claim against an insurer based on a failure to settle claims in good faith, a claimant is required to give the Florida Department of Insurance and the insurer 60 days notice of the violation. Fla. Stat. ch. 624.155 (2000). This renders First American’s offer to waive defenses meaningless since the 60-day waiting period would prevent the plaintiffs from reinstating the action in Florida within 45 days of dismissal.

If First American were to extend the waiting period or to waive objections to any statute of limitations restrictions specifically, an alternative forum for this matter indeed exists. However, without such a concession, it is necessary to examine Florida statutory law and civil procedural rules to determine whether Florida serves as an alternative forum.

Plaintiffs do not argue that Florida is unavailable as an alternative forum, and it appears that Florida could serve such a function: Fla. Stat. ch. 48.183 would grant Florida courts jurisdiction over First American, while Fla. Stat. ch. 624.422 addresses service of process on an insurance company. In addition, the statute of limitations in Florida for breach of contract actions is four years, Fla. Stat. ch. 95.11(3)(k), removing it as a concern in this matter. Thus, Florida constitutes an alternative forum in this matter.

B. The Vexatious and Oppressive Test

In evaluating a petition to dismiss on the grounds of forum non conveniens, “[a] plaintiff’s choice of forum is given great weight and a defendant has the burden in asserting a challenge to the plaintiff’s choice of venue.” Shears, 424 Pa. Super, at 564, 623 A.2d at 824. See also, Goodman by Goodman v. Pizzutillo, 452 Pa. Super. 436, 445, 682 A.2d 363, 367 (1996) (stating that a “party seeking a change of venue bears a heavy burden of justifying the request...”). This burden is increased when a plaintiff has chosen to litigate in his or her home forum. Page v. Ekbladh, 404 Pa. Super. 368, 372-73, 590 A.2d 1278, 1280 (1991). Because Pennsylvania is the home state of Terra (the lead plaintiff) and Commerce, this court should give the plaintiffs’ choice of forum appropriate deference.

To sustain a motion to dismiss for forum non conveniens, a petitioner must show that the proceedings would be vexatious or oppressive:

“[T]he defendant may meet its burden of showing that the plaintiff’s choice of forum is vexatious to him by establishing with facts on the record that the plaintiff’s choice of forum was designed to harass the defendant, even at some inconvenience to the plaintiff himself.... Alternatively, the defendant may meet his burden by establishing on the record that trial in the chosen forum is oppressive to him; for instance, that trial in another county would provide easier access to witnesses or other sources of proof, or to the ability to conduct a view of premises involved in the dispute. But, we stress that the defendant must show more than that the chosen forum is merely inconvenient to him.” Cheeseman v. Lethal Exterminator Inc., 549 Pa. 200, 213, 701 A.2d 156, 162 (1997).

The defendant’s burden requires a demonstration of claimed hardships on the record, Jones, 455 Pa. Super, at 115, 687 A.2d at 394, although there is no necessity for an evidentiary hearing on a petition. Cheeseman, 549 Pa. at 213 n.8, 701 A.2d at 162 n.8.

As evidence of vexatiousness or oppressiveness, a petitioner must provide a court with the names of witnesses who are to be called, a general statement of what their testimony will cover and what hardships the witnesses would suffer. Johnson v. Henkels & McCoy Inc., 707 A.2d 237, 240 (Pa. Super. 1997). See also, Petty v. Suburban General Hosp., 363 Pa. Super. 277, 285, 525 A.2d 1230, 1234 (1987) (stating that “[i]f a party has merely made a general allegation that witnesses will be necessary, without identifying them and indicating what their testimony will be the application for transfer will be denied”); Hoose v. Jefferson Home Health Care Inc., 754 A.2d 1, 5 (Pa. Super. 2000) (stressing that “there is a vast difference between a finding of inconvenience and one of oppressiveness”). Furthermore, a defendant’s claims “that no significant aspect of the case involves the chosen forum, and that litigating in another forum would be more convenient... do not amount to a showing that the chosen forum is oppressive or vexatious.” Cheeseman, 549 Pa. at 214, 701 A.2d at 162.

First American has cited a number of burdens that it urges make litigating in Pennsylvania vexatious and oppressive: (a) the policy was issued by the Florida office of First American and delivered to Commerce in Florida, (b) the premises and expansion area are in Florida, (c) Florida has an interest in regulating insurance policies covering land located in the state, (d) the Baker suit has been brought in Florida, (e) the offenses alleged occurred in Florida, (f) the witnesses and evidence relevant to this case are in Florida, and thus possibly outside the subpoena power of a Pennsylvania court, (g) Florida law, which First American claims governs this case, is better interpreted by a Florida court, and (h) proceeding in a Pennsylvania court will open complex conflict of laws issues.

A number of these burdens are not, in fact, burdens, but rather considerations that would have been relevant under the now defunct public and private interests test. Among these are the place of issuance and delivery of the policy; Florida’s interest in regulating insurance policies; and the location of the alleged offenses. Because these factors have no bearing on whether Pennsylvania constitutes a vexatious and oppressive forum, they cannot be controlling.

Difficulties arising from out-of-state witnesses and evidence must be specifically raised by the moving party. Petty, 363 Pa. Super, at 285, 525 A.2d at 1234. Here, First American has supplied an affidavit from Rotkowitz stating that:

“(5) Most, if not all of the witnesses and evidence to the occurrences alleged in the complaint herein are located and reside in Florida.

“(6) Most, if not all, of the employees and former employees of First American who are witnesses to the occurrences alleged in the complaint herein are located and reside in the state of Florida.... Transporting these witnesses from Florida for trial in this action would be a considerable expense.”

The affidavit makes no mention of the number of witnesses required or what their testimony will cover. In the absence of such details, First American cannot be said to have met the requisite burden.

First American points out that the Baker suit is before the Circuit Court for the Ninth Judicial Circuit in Orange County, Florida. However, First American goes no further, leaving to conjecture why a tangentially related case in which First American is not a party contributes to the current forum’s being vexatious and oppressive. Moreover, the fact that the premises and expansion area are located in Florida is irrelevant in that this is an action for breach of insurance contract and not a real estate dispute. As a result, the location of the property is not controlling.

Finally, First American argues that bringing the case in a Florida court will avoid a conflict of laws issue. However, because all correspondence relating to the alleged breach was addressed to Commerce’s counsel in Philadelphia, the plaintiffs assert that the contract breach took place, at least in part, in Pennsylvania. Consequently, a transfer to Florida will not avoid the conflict of laws question, and such a dispute should not impact on the venue issue.

In summary, First American has failed to meet the heavy burden of showing that the plaintiffs’ choice of forum is vexatious or oppressive. As a result, the petition must be denied.

II. The Preliminary Objections Should Be Overruled

In support of its demurrer, First American makes three essential arguments in the preliminary objections:

(1) Commerce has not suffered any actual loss, as required before recovery can be permitted under a title insurance policy;

(2) To the extent that Commerce has suffered actual loss, the actual loss suffered is not covered by the policy; and

(3) Even if Commerce has suffered actual loss covered by the policy, First American has no obligation to cover actions prosecuted by Commerce to secure title to the expansion area.

Under either Florida or Pennsylvania law, First American has failed to satisfy the burden necessary to sustain the preliminary objections.

A. No Actual Loss or Damage

The defendant’s primary argument is that the policy is an indemnification policy for which the “plaintiff is bound to show actual loss sustained before there can be a recovery.” Pennsylvania Company for Insurances on Lives and Granting Annuities v. Central Trust and Savings Company, 255 Pa. 322, 326, 99 A. 910, 911 (1917). See also, Goode v. Federal Title and Insurance Corp., 162 So.2d 269, 270 (Fla. Dist. Ct. App. 1964). First American has asserted that, because Commerce cannot show actual loss, the plaintiffs are not entitled to recover under the policy.

In contrast to the narrow interpretation suggested by First American, the term “actual loss” has been construed liberally by both Florida and Pennsylvania courts. See Fifth Mutual Building Society of Manayunk’s Appeal, 317 Pa. 161, 165, 76 A. 494, 495 (1935) (holding that “when the insured gets a bad title, or the policy has been otherwise breached, the covenant of the insurer has not been fulfilled, and there is a liability. A liability having attached, the only thing that remains is to ascertain its extent in terms of dollars”) (emphasis in original); Narberth Building & Loan Association v. Bryn Mawr Trust Co., 126 Pa. Super. 74, 190 A.2d 149 (1937); Shada v. Title & Trust Co. of Florida, 457 So.2d 553 (Fla. Dist. Ct. App. 1984); Holinda v. Title & Trust Co. of Florida, 438 So.2d 56 (Fla. Dist. Ct. App. 1983).

Plaintiffs have implied that the “actual loss” necessary to maintain their claim arises from: (1) the expansion area is worth less encumbered by the easement than unencumbered; (2) plaintiffs have incurred significant costs in attempting to clear title to the properties; (3) Baker has violated his obligation to grant Commerce exclusive use of the expansion area; and (4) Brightway has trespassed on the property and has undertaken construction to make the expansion area more conducive to its own needs. Given the operative pleading and applying the above guidelines it is difficult to conclude that Commerce has suffered no damage. The preliminary objection on this ground should be overruled.

B. Loss Not Covered By Policy

Similarly, the court cannot dismiss the complaint based on First American’s claim that the language of the policy requires Commerce to exercise or to attempt to exercise the option before it can claim it has sustained any damages under the policy. In addition to the court’s concern that such an interpretation could put Commerce in an untenable position, the policy itself does not support such a reading. Thus, First American has failed to meet the burden necessary to require this court to dismiss the complaint on this basis.

C. No Suit To Defend

First American points to section 4 of the conditions and stipulations of the policy, which, it claims, does not require coverage of actions prosecuted by Commerce to secure title to the expansion area. However, the defendant’s position in this regard is not persuasive. Under Florida law, a company insuring title has “a duty under its contract to cure the defects [in title] and its failure to do so entitles the [insured party] to damages.” Shada, 457 So.2d at 556. See also, Endruschat v. American Title Insurance Co., 377 So.2d 738, 742 (Fla. Dist. Ct. App. 1979) (stating that the position supported by the defendant would “ignore duly recorded restrictions and play Russian roulette with the surrounding property owners to see whether they will legally enforce the restrictions”). This affirmative duty suggests strongly that this objection should be overruled.

Although there is no Pennsylvania law on this precise issue, treatises recognize that a title insurer’s duty to quiet title will arise when there are “present in the facts and circumstances of the case some indicia that the encumbrance with which the policyholder is concerned is a genuine cloud on his title.” 9 Appleman, Insurance Law and Practice §5214, pp. 87-88 (acknowledging that “a title insurer has a duty to take necessary steps to relieve against defects in the title, which duty arises when it is notified of the existence of a defect”). Further, an insured party is entitled to attorneys’ fees incurred in removing a defect, “even though no suit is commenced against the insured due to the defect.” Couch on Insurance 3d §185:86.

This court finds instructive the case of Summonte v. First Am. Title Insurance Co., 436 A.2d 110 (N.J. Super. Ct. Ch. Div. 1981), in which First American issued a title insurance policy with language almost identical to that used in the policy. In analyzing the language of that policy, the New Jersey court concluded that “after the company had received notice of the title defect. . . and no litigation had commenced requiring a defense, the insurer was obliged to remove the defect.” 436 A.2d at 115-16. (citations omitted) In sum, this court cannot conclude that Pennsylvania law would serve as a bar to the plaintiffs’ action.

For these reasons, this court will issue a contemporaneous order which denies the petition to dismiss and overrules the preliminary objections.

,ORDER

And now, August 2, 2000, upon consideration of: (a) defendant First American Title Insurance Company’s preliminary objections to plaintiffs’ complaint and plaintiffs’ response and (b) defendant’s petition to dismiss on the grounds of forum non conveniens and plaintiffs’ response, the pertinent respective memoranda and all matters of record, and based on the memorandum opinion being filed contemporaneously with this order, it is hereby ordered that: (a) defendant’s preliminary objections are overruled, and (b) defendant’s petition to dismiss on the grounds of forum non conveniens is denied.

      . Commerce is a Pennsylvania limited partnership with Terra Equities Inc. the lead plaintiff, as general partner, and Charles McDonald, trustee and Martin E. O’Boyle Sr. as limited partners.

      . The venue petition will be discussed first in this memorandum opinion.

      . Although First American argues that Florida is a more appropriate forum, it does not speak directly to Florida being available as an alternative forum.

      . Fla. Stat. ch. 48.193 grants jurisdiction over entities “operating, conducting, engaging in, or carrying on a business or business venture in [Florida] or having an office or agency in [Florida],” as well as any person “breaching a contract in [Florida] by failing to perform acts required by the contract to be performed in [Florida].” Even in the absence of First American’s submission to jurisdiction, it admits in its brief that the policy was issued and delivered in Florida.

      . In Florida, service of process on a licensed insurance company is made on the insurance commissioner and treasurer. The court has inferred that First American is an insurance company licensed in Florida.

      . Given the fact that actions contributing to the breach are alleged to have occurred as recently as 1999, this court feels comfortable that the statute of limitations would not be an obstacle to prosecuting this claim in Florida.

      . In the past, Pennsylvania courts allowed defendants unable to meet the vexatious and oppressive test to use a balancing test based on private and public factors, as adopted in Okkerse v. Howe, 521 Pa. 509, 556 A.2d 827 (1989). However, current case law requires, “before any transfer of venue may be granted, that the defendants establish on the record that litigation in Philadelphia would be oppressive or vexatious.” Cheeseman, 549 Pa. at 211, 701 A.2d at 161. See also, Johnson v. Henkels & McCoy Inc., 707 A.2d 237, 239-40 (Pa. Super. 1997) (stating that Pennsylvania courts may not use the “ill-advised” private and public interest test and that the Pennsylvania Supreme Court has declared the test “improper”).

      . In reality, then, non conveniens is a misnomer.

      . In analyzing insurance policies, Pennsylvania courts are to “apply the law of the state having the most significant contacts or relationships with the particular issue.” Caputo v. Allstate Insurance Co., 344 Pa. Super. 1, 5, 495 A.2d 959, 962 (1985). While it appears that Florida law would govern the policy, such a determination should be reached only after each side has presented arguments as to which state’s law should govern and why. Because neither party has briefed the choice of law issue, it would be premature for the court to reach a conclusion on that topic. Consequently, this opinion references both Pennsylvania and Florida law when addressing substantive matters.

      . Furthermore, the plaintiffs have indicated a willingness to take the deposition of Rotkowitz, the only First American witness it anticipates, in Florida. Plaintiffs also claim that all necessary documentation has already been attached to the complaint.

      . To bolster its Florida law argument, First American cites Blessing v. American Title & Insurance Co., 121 So.2d 455 (Fla. Dist. Ct. App. 1960). Notwithstanding that court’s holding, First American’s use of Blessing is unconvincing, as the harsh logic of Blessing has been repudiated. In both Holinda and Shada, the courts specifically considered the holding of the Blessing court, 438 So.2d at 57; 457 So.2d at 556, and declined to follow that earlier decision.

      . Interpretation of an insurance policy is a matter of law to be decided by the court. Curbee Ltd. v. Rhubart, 406 Pa. Super. 505, 509, 594 A.2d 733, 735 (1991); Jones v. Utica Mutual Insurance Co., 463 So.2d 1153, 1157 (Fla. 1985). In interpreting an ambiguity, an insurance policy should be liberally construed in favor of the insured party. Techalloy Co. v. Reliance Insurance Co., 338 Pa. Super. 1, 6, 487 A.2d 820, 823 (1984); U.S. Fidelity & Guar. Co. v. Romay, 744 So.2d 467, 471 (Fla. Dist. Ct. App. 1999). This requires the court to maximize the coverage provided under the insurance policy in question. Penn-Air Inc. v. Indemnity Insurance Co. of North America, 439 Pa. 511, 517, 269 A.2d 19, 22 (1970); Union-Am. Insurance Co. v. Maynard, 752 So.2d 1266 (Fla. Dist. Ct. App. 2000).

      . If First American’s logic is to be followed, before Commerce acquires the expansion area, it is not entitled to coverage from First American because Brightway has not asserted the easement against Commerce as the owner of the expansion area. On the other hand, if Commerce purchases the expansion area, First American could then argue that Commerce acquired title with notice of the easement, thus precluding coverage.

      . According to the option endorsement, Commerce is entitled to coverage under the policy for damages sustained due to the unenforceability of the option, the priority of an encumbrance over the option or any defect in the expansion area title. The policy became effective March 10,1994 and continues to be effective so long as Commerce “retains an interest in the land,” policy conditions and stipulations at paragraph 2, implying that any inability to enforce or interference with the option or defect in the expansion area title any time after that date will trigger coverage under the policy. In addition, the option endorsement specifically covers encumbrances created after the date of the policy.

      . As set forth in the court’s opinion, the policy in question provided that “The company shall have the right at its own cost to institute and without undue delay prosecute any action or proceeding or to do any other act which in its opinion may be necessary or desirable to establish the title to the estate or interest as insured, and the company may take any appropriate action under the terms of this policy, whether or not it shall be liable thereunder, and shall not thereby concede liability or waive any provision of this policy.” 436 A.2d at 115.


source: Caselaw Access Project

author: BATTLE, P.J.,

license: Public Domain

text:
    Nolan v. Newtown Township
    C.P. of Delaware County,
    no. 99-1020.

      Marc B. Kaplan, for plaintiff.

      Sheryl A. Brown and Bruce A. Irvine, for defendant.
    June 29, 2000
   BATTLE, P.J.,

Newtown Township enacted an ordinance, number 1998-4, on November 23, 1998. The ordinance contains a section entitled “purpose.” This section indicates that the township was in the process of revising its comprehensive plan, zoning ordinance, and subdivision ordinance. The “purpose” section further stated that pending the adoption of the comprehensive plan and the revised ordinances, the board of supervisors “recognizes that continuing development in the township could defeat the purpose of the ordinance revisions. Under the circumstances, the board of supervisors finds that it is in the public interest to suspend certain subdivision and land development approvals.” The ordinance thereafter provided that no parcel or tract of land located within the township could be subdivided into smaller parcels for development. The ordinance further provided some exceptions to the subdivision prohibitions. Finally, the ordinance provided that the prohibition on subdivisions would automatically terminate at the expiration of a period of 18 months, unless the board of supervisors enacted a further ordinance to change the termination date.

The plaintiff, James A. Nolan III, filed a petition for the appointment of a board of view pursuant to section 502(e) of the Pennsylvania Eminent Domain Code (26 P.S. §1-502(e)). Mr. Nolan alleged in his petition that he is the owner of a 50.97-acre tract of land and a 44-acre tract of land, both located within Newtown Township. Mr. Nolan further alleged that those tracts of land are located within the township’s R-l zoning district, which permits development of single-family detached dwellings on lots which contain 60,000 square feet. Mr. Nolan also alleged in his petition that he intended to develop the subject parcels, had a sketch plan prepared, but was prohibited from proceeding with development because of the aforesaid ordinance. Therefore, Mr. Nolan alleged that a taking had occurred.

Newtown Township filed preliminary objections to the petition for the appointment of a board of view. Essentially, the preliminary objections allege that there has been no compensable injury to Mr. Nolan.

Preliminary objections in eminent domain cases serve a broader purpose than in other cases and are appropriate vehicles to resolve legal and factual issues. See In re Condemnation by PennDOT of Right of Way for Legislative Route 169, 41 Pa. Commw. 168, 398 A.2d 1076 (1979); Perfection Plastics Inc. Appeal, 28 Pa. Commw. 396, 368 A.2d 917 (1977). An objection to the appointment of a board of viewers on the ground that the petitioner’s claim is not compensable is properly raised by preliminary objection. Legislative Route 169, supra.

Newtown Township argues that its ordinance imposing the moratorium on development is a valid exercise of its regulatory powers. Certainly, there is no question to the contrary. Counsel for Newtown Township cites the case of Naylor v. Township of Hellam, 717 A.2d 629 (Pa. Commw. 1998), appeal pending. Our Commonwealth Court held that a moratorium on development was authorized under the Municipalities Planning Code and such an ordinance is a valid and reasonable exercise of a municipality’s power. The question in the case at bar is not whether the ordinance is valid, but whether the ordinance constitutes a de facto taking of Mr. Nolan’s properties. “A de facto taking occurs when an entity clothed and vested with power of eminent domain substantially deprives property owners of use and enjoyment of their property; the owners must establish in such a proceeding that deprivation of their property was the direct and necessary consequence of the actions of the entity ... Elser v. PennDOT, 651 A.2d 567, 570 (Pa. Commw. 1994). The United States Supreme Court has held that just compensation is required to be provided to the landowner even when the regulation at issue is temporary in nature. First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, 482 U.S. 304 (1987). Our Pennsylvania Commonwealth Court has noted that for purposes of determining whether a de facto taking has occurred, the question is not whether the property owners have been substantially deprived of the current use of the property, but whether the property owners have been deprived of all potential uses, including the highest and best uses of the property. See Miller and Son Paving Inc. v. Plumstead Township, 680 A.2d 5 (Pa. Commw. 1996).

Certainly, the township ordinance has prevented Mr. Nolan from proceeding with subdivision plans for his properties. He has been deprived of the beneficial use and enjoyment of his property. Therefore, the preliminary objections must be denied. A board of view should be appointed. Of course, because Mr. Nolan’s use and enjoyment of his property have been substantially affected by the ordinance at issue, does not necessarily mean that Mr. Nolan should be compensated to the same extent as if his property was 100 percent taken by the township. The use and enjoyment of his property have been affected for a period of 18 months. Therefore, the board of view must determine, based upon all of the circumstances of the case, the extent of the value of the temporary taking.

ORDER

And now, to wit, June 29, A.D. 2000, it is hereby ordered and decreed that the preliminary objections filed on behalf the Newtown Township are hereby denied.

The following persons are appointed to the board of view:

(1) Joseph F. Mulcahy Jr., Esquire, Attorney

(2) Joseph N. Yastoria, Engineer

(3) Andrew L. Mozino, Real Estate Agent


author: HORAN, J.,

text:
    Cumberland v. Owens-Corning Fiberglas Corp.
    C.R of Butler County,
    no. 91-248 M.

      Craig E. Coleman, for plaintiffs.

      John L. Vitsas and Joseph Silvaggio, for defendants.
    February 7, 2000
   HORAN, J.,

Presently before the court for consideration are two motions for summary judgment, to wit, motions by Owens-Illinois Inc. and George V. Hamilton Inc. The motion of Owens-Illinois is unopposed by plaintiffs, and, therefore, is granted. The motion of Hamilton, for the reasons set forth below, is granted.

FACTS

According to his deposition testimony of May 6,1992, plaintiff Marshall Cumberland had worked at the Armco Steel Plant in Butler, Pennsylvania, from October 1964 through the date of the deposition. For his first six months at the plant, Mr. Cumberland worked as a laborer in the open hearth, cold mill, continuous mill, pickle department, stainless finishing section, the hot mill and slab mill. (Deposition of Marshall Cumberland at 20-21.) From 1965 through the date of his deposition, Mr. Cumberland worked in “2 Aisle,” or the continuous mill and pickle department, as a cleanup man, scrap man, feeder, coder man, sheer man and welder. (Dep. of Cumberland at 23-25.) These jobs entailed work throughout the plant, in proximity to the furnaces, steam lines, and water lines. Specifically, as a scrap or cleanup man, he worked in the “pickle house.” (Dep. of Cumberland at 31.) Mr. Cumberland testified that the steam lines in the pickle house were covered with asbestos pipe insulation. He further testified that he leaned against the asbestos covering on the steam lines when working on them. (Dep. of Cumberland at 31-33.)

Mr. Cumberland also provided testimony relative to his specific job duties for the above-identified jobs. When he worked in cleanup and as a scrap man, he was responsible for emptying scrap boxes, shoveling, sweeping and emptying garbage barrels around the department. (Dep. of Cumberland at 25-26.) As a feeder, he fed coils into a coiling unit. As a coder man, he was responsible for operating the coder, and, as such, would have control over the speed of the unit. As a sheer man, he would “cut the welds out a coil.” Finally, as a welder, Mr. Cumberland indicated that he made welds. (Dep. of Cumberland at 26.)

Plaintiffs submitted deposition testimony of several employees of John R. Ellison and Sons, a pipe-fitting contractor that put pipe valves, fittings and insulation on furnace and steam lines at Armco. These employees identified Kaylo block and pipe insulation as asbestos insulation that was used at Armco. Further testimony was offered that Ellison obtained their insulation materials from defendant Hamilton. One such employee, Thomas E. Ellison, testified that in his capacity as a truck driver for Ellison, he picked up Kaylo insulation at Hamilton’s place of business which he then delivered to the Butler Armco plant.

Although there is evidence that defendant Hamilton supplied asbestos-containing products to Butler Armco, there is no evidence of Mr. Cumberland’s identification of specific asbestos-containing products by name or such products supplied by defendant Hamilton, such as Kaylo. Mr. Cumberland did not indicate that he was exposed to, or breathed, dust created from the installation or removal of pipe or steam line covering. Moreover, no evidence was produced that Mr. Cumberland specifically worked in the vicinity of Ellison employees during his tenure at Armco.

LEGAL STANDARD

In Samarin v. GAF Corp., 391 Pa. Super 340, 571 A.2d 398 (1989) the Superior Court reiterated the standard of review governing a motion for summary judgment:

“A motion for summary judgment may properly be granted only ‘if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.’ Pa.R.C.P. 1035(b). . . . In passing upon a motion for summary judgment the court must examine the record in the light most favorable to the non-moving party.... It is not part of the court’s function to decide issues of fact but solely to determine whether there is an issue of fact to be tried____Any doubt must be resolved against the moving party.... The court, in ruling on a motion for summary judgment, must ignore controverted facts contained in the pleadings. . . . The court must restrict its review to the material authorized by Rule 1035 to be filed in support of and in opposition to the motion for summary judgment and only those allegations that are uncontroverted.” Id. at 346, 571 A.2d at 401-402, citing Washington Federal Savings and Loan Association v. Stein, 357 Pa. Super. 286, 288, 515 A.2d 980, 981 (1986). (citations omitted)

The Samarin court then added that:

“Once a motion for summary judgment is made and is properly supported, however, the non-moving party may not simply rest upon the mere allegations or denials in his or her pleadings. Pa.R.C.P. 1035(d). In such a case, Rule 1035(d) requires that ‘by affidavits or as otherwise provided in this rule, [the non-movant] must set forth specific facts showing that there is a genuine issue for trial.’ The purpose of Rule 1035(d) ‘is to assure that the motion for summary judgment may “pierce the pleading” and to require the opposing party to disclose the facts of his claim or defense. ’ Roland v. Krayco Inc., 355 Pa. Super. 493, 501, 513 A.2d 1029, 1034 (1986) (quoting Goodrich-Amram 2d §1035(d):5 at 460 (1976)) (emphasis added by Roland court), appeal denied, 517 Pa. 599, 535 A.2d 1058 (1987). Thus, once the motion for summary judgment has been properly supported, the burden is upon the non-movant to disclose evidence that is the basis for his or her argument resisting summary judgment. Id. at 501, 513 A.2d at 1034.” Samarin, supra at 346-47, 571 A.2d at 402. (footnotes omitted)

In Godlewski v. Pars Manufacturing Co., 408 Pa. Super. 425, 597 A.2d 106 (1991), the Superior Court explained that:

“It is clear that if a defendant is the moving party, he may make the showing necessary to support the entrance of summary judgment by pointing to materials, which indicate that the plaintiff is unable to satisfy an element of his cause of action. See Eckenrod v. GAF Corp., [375 Pa. Super. 187, 544 A.2d 50 (1988)] (wherein, by approving grants of summary judgment on motions that were based upon the failure of the plaintiffs to satisfy an element necessary of their case, we impliedly utilized this principle); Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (wherein the Supreme Court considered the language of F.R.C.P. 56(c), which is similar to that set forth in Pa.R.C.P. 1035(b) and explicitly indicated the same).” Id. at 431-32, 597 A.2d at 109-110. (emphasis in original)

The standard of review for a motion for summary judgment based upon a lack of product identification in an asbestos exposure case has been further refined. In Fiffick v. GAF Corp., 412 Pa. Super. 261, 603 A.2d 208 (1992), the Superior Court reiterated that standard:

“In an asbestos exposure case, summary judgment is properly entered in favor of a defendant when the plaintiff is unable to produce evidence from which a jury can find that the defendant’s products were the cause of the plaintiff’s injuries. In Eckenrod v. GAF Corporation, 375 Pa. Super. 187, 544 A.2d 50 (1988), allocatur denied, 520 Pa. 605, 533 A.2d 968 (1988), the Superior Court said:

“In order for liability to attach in a products liability action, plaintiff must establish that the injuries were caused by a product of the particular manufacturer or supplier. Berkebile v. Brantly Helicopter Corp., 462 Pa. 83, 337 A.2d 893 (1975). Additionally, in order for a plaintiff to defeat a motion for summary judgment, a plaintiff must present evidence to show that he inhaled asbestos fibers shed by the specific manufacturer’s product. Wible v. Keene Corp., no. 86-4451 slip op. (E.D. Pa. August 19, 1987) [available on Westlaw, 1987 W.L. 15833]; Anastasi v. Pacor Inc., no. 6251 (C.P. Phila. Co. March 8, 1983); aff’d, 349 Pa. Super. 610, 503 A.2d 44 (1985). Therefore a plaintiff must establish more than the presence of asbestos in the workplace; he must prove that he worked in the vicinity of the product’s use. Pongrac v. Consolidated Rail Corp., 632 F. Supp. 126 (E.D. Pa. 1985).

“Id. at 191, 544 A.2d at 52. See also, Bushless v. GAF Corp., 401 Pa. Super. 351, 357, 585 A.2d 496, 499 (1990); Samarin v. GAF Corp., supra, 391 Pa. Super. at 351, 571 A.2d at 404.” Fiffick, supra at 265, 603 A.2d at 210.

The Eckenrod court concluded by succinctly stating that “[w]hether a plaintiff could successfully... defeat a motion for summary judgment by showing circumstantial evidence depends upon the frequency of the use of the product and the regularity of plaintiff’s employment in proximity thereto.” Eckenrod, supra at 192, 544 A.2d at 53, citing Schmidt v. Johns-Manville Corp., no. 80-3339 slip op. (D.Md. November 30, 1982).

LEGAL ANALYSIS

In opposition to defendant Hamilton’s motion for summary judgment, plaintiffs rely on plaintiff Marshall Cumberland’s testimony as summarized above. Mr. Cumberland testified with respect to the various positions he held at Armco and the specific job duties which those positions entailed. He further testified that he worked around steam and pipe lines covered with asbestos insulation and that he came into physical contact with insulation on the steam lines. Mr. Cumberland, however, could not specifically identify any asbestos-containing product or any co-worker who worked in his vicinity that could do the same.

Plaintiffs also rely upon answers to interrogatories submitted by defendant Owens-Illinois in unrelated cases. These answers indicate that the Owens-Illinois product known as Kaylo was an asbestos-containing product manufactured in the time period during which Mr. Cumberland worked at the Armco plant.

Plaintiffs also submitted the deposition testimony of Paul W. Hayes, an employee for Hamilton from 1950 through 1979. Mr. Hayes held various positions with Hamilton, including salesman, sales manager, secretary, and vice-president. Mr. Hayes stated that Hamilton marketed the asbestos-containing Kaylo product manufactured by Owens-Illinois. He further stated that the distribution of Kaylo began in 1950 and continued throughout his tenure with Hamilton. Mr. Hayes also indicated that Kaylo was supplied to contractors in western Pennsylvania during that time period. (Dep. of Paul W. Hayes at 14-19, 26.)

In further opposition to Hamilton’s motion, plaintiffs presented the deposition testimony of several employees of J.R. Ellison and Sons, a contractor which performed pipefitting and installation at Armco. These employees identified Kaylo block and pipe insulation material as being used at the Butler plant. One of these employees was Thomas E. Ellison, a truck driver for Ellison in the mid 1960s. In this capacity, he picked up materials from supply houses, including defendant Hamilton. He further testified that Ellison purchased asbestos-containing products, including Kaylo, from Hamilton. Moreover, Mr. Ellison stated that while he was a truck driver, he personally picked up Kaylo insulation at Hamilton which was used at the Butler Armco plant. (Dep. of Thomas E. Ellison, 3/2/90 at 14, 29-30.)

Although Mr. Cumberland was unable to specifically identify any asbestos-containing product, there is evidence that the Owens-Illinois Kaylo product contained asbestos and was used at the Butler Armco plant during the time period in which plaintiff Marshall Cumberland worked there. There is also evidence that defendant Hamilton was a supplier of Kaylo during Mr. Cumberland’s tenure. However, plaintiffs have not offered any evidence that Mr. Cumberland worked in the vicinity of Kaylo’s use, either through his own testimony or circumstantially through the testimony of a co-worker or Ellison employee. Notwithstanding the deposition testimony of Ellison employees who identified the presence of Kaylo at Butler Armco, there is no evidence that Mr. Cumberland worked in the proximity of those employees with any frequency or regularity.

As defendant Hamilton correctly argues in its brief, the mere presence of a supplier’s products at a job site is insufficient to defeat a motion for summary judgment. Pongrac v. Consolidated Rail Corp., supra. Circumstantial evidence of a plaintiff’s exposure to an asbestos-containing product may defeat a motion for summary judgment, but only if such evidence meets the standard set forth in Eckenrod v. GAF Corp. 375 Pa. Super. 187, 544 A.2d 50 (1988). Whether a plaintiff can defeat such a motion through circumstantial evidence “depends upon the frequency of the use of the product and the regularity of plaintiff’s employment in proximity thereto.” 375 Pa. Super, at 192, 544 A.2d at 53. In the Eckenrod decision, notwithstanding the plaintiff’s occasional exposure to asbestos, the court affirmed a grant of summary judgment, noting that there “[was] no evidence, however, as to the regularity or nature of [plaintiff]’s contact with asbestos.” Id. The Eckenrod court further noted that there was no testimony that the plaintiff worked with asbestos supplied by the defendant and that “[t]he mere fact that [defendants’] asbestos products came into the facility does not show that the [plaintiff] ever breathed these specific asbestos products or that he worked where these asbestos products were delivered.” Id.

In the case at bar, the circumstantial evidence is insufficient to create a genuine issue of material fact that plaintiff Marshall Cumberland was injured as a result of exposure to asbestos-containing products supplied by defendant Hamilton. There is no testimony, either from Mr. Cumberland or from any Armco co-worker or Ellison employee, that Mr. Cumberland worked with any regularity in proximity to Kaylo or any other asbestos-product supplied by Hamilton. Based upon the evidence or lack thereof, and upon the case law cited above, defendant Hamilton is entitled to summary judgment.

Accordingly, we enter the following:

ORDER

And now, February 7, 2000, it is hereby ordered that: the motions for summary judgment of Owens-Illinois Inc., and George V. Hamilton Inc., are granted.


author: FORD, J.,

text:
    Parkland School District v. Parkland Educational Personnel Support Association

      C.P. of Lehigh County,
    no. 1998-C-0936.
    C. Steven Miller, for petitioner.

      Charles L. Herring, for respondent.
    March 28, 2000
   FORD, J.,

On December 28,1999, we entered an order granting a petition to review and vacate a labor arbitration award under the Pennsylvania Public Employee Relations Act, 43 P.S. §§1101.101-1101.2301. We explain the reasons for our decision in this opinion.

We set forth the factual and procedural history which was submitted to us by the parties for the July 12, 1999 argument that we conducted on this petition. We believe that what is set forth below is not disputed by the parties.

The petitioner is the Parkland School District which is a third class school district located in Lehigh County, Pennsylvania. It is subject to the provisions of the Public School Code of 1949, as amended, 24 P.S. §§1-[ XXX-XX-XXXX ].

The respondent is the Parkland Educational Personnel Support Association/ESPA/PSEA/NEA. It is an employee organization for the public employees of the district.

The district and the association are parties to a collective bargaining agreement which was effective July 1, 1995 through June 30, 1998. It is the interpretation of a provision of the agreement, article 18, which is at issue here. The relevant portion of article 18 reads:

“Article 18

“Position vacancies . ..

“Section 2. Full-time custodial, maintenance and six-hour cafeteria positions shall be posted for a period of five working days. The employee with the most district-wide seniority who applies shall be awarded the position, providing the person has received the highest rating in the interview for the position, as determined by the supervisor, with the employee’s right to file a grievance.”

Article 21 of the agreement provides for arbitration of grievances under section 903 of PERA, 43 P.S. §1101.903.

We also set forth article 3 of the agreement:

“Article 3

“Management clause

“Section 1. It is understood and agreed by the parties hereto, unless otherwise provided in this agreement that the association recognizes the prerogatives of the district to operate and manage its affairs in all respects in accordance with its responsibilities and in accordance with its power and authority.

“Section 2. Statutory savings clause — Nothing contained herein shall be construed to deny or restrict to any employee such rights as he/she may have under the Public Employee Relations Act, Act 195, or the Local Agency Law.”

A notice, dated July 1, 1996, was posted by the district, with a job description, seeking applicants for a custodian “A” position. The notice was directed to all district employees.

In response to the notice, six district employees, who were association members, applied for the position. One individual, Gary Greenawalt, withdrew his name from consideration. The other five applicants were interviewed for the position by an interviewing committee of the district. The interviewing committee used a system whereby a higher score for a candidate in comparison to another represented a higher rating for that first candidate. The ratings assigned by the committee to the applicants were: Diane Weslosky-167, Raymond Sommerville-164, James Schick-161, Terry Messinger-119, and Ronald Leaser-52.

The applicant with the most seniority was Terry Messinger.

After the interview process was completed, the district decided that none of the applicants was qualified for the position and all applicants were rejected. The applicants were duly advised of this by letter from the district. The notification letters were dated August 19, 1996.

On September 30,1996, the association filed a grievance alleging that the district’s rejection of the applicants violated article 18. The association classifies the grievance as a “group grievance” although the identity of the group is not specified. The grievance was denied by the district. The association requested arbitration on December 19, 1996.

The arbitration was held on March 16, 1998 before Patrick McFadden, arbitrator. In the arbitration, Diane Weslosky, the person with the highest interview score but lower seniority than others, was identified as the grievant. The arbitrator entered an award on March 24, 1998. The arbitrator sustained the grievance and directed the district to offer the next available custodian “A” position to the grievant. An opinion dated March 24,1998 accompanied the decision granting the grievance.

On April 23, 1998, the district filed its “petition for review and application to vacate arbitrator’s award” with this court.

An argument was held on the petition on July 12,1999. The matter was fully briefed by the parties.

On December 28, 1999, we entered our order granting the petition and vacating the award of the arbitrator. We indicated in the order that the district “is at liberty to fill the position of custodian ‘A’ according to its normal, mandated procedures in accord with the collective bargaining agreement of 1995-1998.”

The association filed its notice of appeal to the Commonwealth Court of Pennsylvania on January 6, 2000.

This matter was submitted to us on the record which was developed before the labor arbitrator. We did not supplement that record in making our review.

The standard for our review of the labor arbitration award was recently set forth by the Pennsylvania Supreme Court in State System of Higher Education (Cheyney University) v. State College University Professional Association (PSEA-NEA), 560 Pa. 135, 743 A.2d 405 (1999).

In State System of Higher Education, the Supreme Court made an exhaustive review of prior decisions on the role of a reviewing court on a challenge to a labor arbitration award. The Supreme Court then set forth a uniform standard to eliminate irregularity among the courts of the Commonwealth based on differing interpretations of decisions prior to State System of Higher Education. We now engage in the review process mandated by the Supreme Court.

First, we are obligated to render great deference to the arbitrator’s decision in light of the many benefits that arbitration provides the parties to a collective bargaining agreement. We have given that deference and we have looked for any reasonable interpretation of the contract language to support the decision of the arbitrator.

We next considered whether an exception exists in this case to the deference or finality which is normally accorded to the arbitrator. It is our conclusion that the exception, which is meant to apply in a small minority of cases, exists here. We reach this conclusion after the two-pronged analysis described in State System of Higher Education.

First, we must determine whether the issue of this employment position is properly defined within the terms of the collective bargaining agreement. It is. Article 18 specifically addresses custodial positions. In other words, the issue of whether the district properly addressed the filling of a custodial position was properly before the arbitrator.

The second prong requires that we analyze whether the arbitrator’s interpretation of the relevant portion of the agreement, article 18, “can rationally be derived from the collective bargaining agreement.” State System of Higher Education at p. 413. As the Supreme Court stated, “a court will only vacate an arbitrator’s award where the award indisputably and genuinely is without foundation in, or fails to logically flow from, the collective bargaining agreement.” State System of Higher Education at p. 413. This is where the decision and reasoning of the arbitrator fail.

Article 18 mandates that the employee applicant “with the most districtwide seniority” get the position “providing the person has received the highest rating in the interview for the position, as determined by the supervisor.”

If Diane Weslosky had the most seniority among the applicants and the highest score, the district would have no discretion. In such a situation, the district would have to award the position to her. Unfortunately for Ms. Weslosky, she lacked one of the prerequisites for the position. She did not have the most seniority among those vying for the position. Thus, the clear language of article 18 does not mandate that the district award the custodian “A” position to Diane Weslosky. The district chose not to award the position to her. This comports with an acceptable exercise of discretion vested in the district under article 3, management clause, by which the association indicates its recognition of “the prerogatives of the district to operate and manage its affairs in all respects in accord with its responsibilities and in accordance with its power and authority.”

The arbitrator concluded that article 18 required the district to offer the position to Diane Weslosky. The decision of March 24, 1998 explains the thinking of the arbitrator in reaching that result. With due respect to the arbitrator, the explanation he offers demonstrates a distortion of the clear meaning of article 18 to achieve a result that he deemed desirable. There is no rational basis in the language of article 18 to justify the conclusion of the arbitrator that the district must offer the position to Diane Weslosky.

It is apparent from the decision of the arbitrator that he finds the agreement that the parties reached in article 18 to be distasteful. He reveals his dissatisfaction with the article in the following language:

“However, when reviewing this article [18], the undersigned [arbitrator] is troubled by certain applications thereof.

“(1) Under the letter of the language, if the grievant and one other district employee would have submitted application and the other employee had one-day more seniority, regardless of how high the grievant scored, the district could reject the grievant for the position.

“(2) Had all the district eligible bargaining unit employees applied, and it were determined that none were even remotely qualified for the position and all scored extremely low, the district by the letter of the language would still be compelled to award the position to the most senior applicant if he/she obtained the highest rating, even though they may be not remotely qualified.

“(3) In the same context, if one employee were to apply for a vacant position, they would automatically be the most senior and receive the highest rating.

“(4) Under the current issue, had the grievant been the lone applicant, she would have been awarded the position.” (March 24, 1998 decision of arbitrator, p. 14 of 16 unnumbered pages.)

After expressing applications of the agreement that are unsettling to him, the arbitrator explains why he entered the award directing the district to offer the position to Diane Weslosky.

“Therefore, we must conclude that when the grievant [Diane Weslosky] obtained the highest rating under the provisions of article no. 18, the other four district applicants were thereby disqualified and therefore no longer eligible, consequently granting the grievant [Diane Weslosky] the most districtwide seniority and highest rating.” (March 24, 1998 decision of arbitrator, p. 15 of 16 unnumbered pages.)

There is no reasonable reading of article 18 which justifies this conclusion reached by the arbitrator. Rather, article 18 only mandates that the employee “with the most districtwide seniority” be awarded the position if she “has received the highest rating in the interview for the position.” While the grievant, Diane Weslosky, received the highest rating, she did not have the most seniority. Accordingly, the district was justified in declining to offer her the position.

An acceptance of the reasoning of the arbitrator requires that the court turn a blind eye to the clear language of article 18 of the agreement. In accord with the standard established by the Pennsylvania Supreme Court, we must conclude that the arbitrator’s interpretation of article 18 is not rationally derived from the collective bargaining agreement. Accordingly, the district’s decision not to award the position to any of the five applicants was a legitimate exercise of its discretion.


author: GARDNER, P.J.,

text:
    Miers Johnston Printing Corp. v. Bucks County Bank and Trust Co.

      C.P. of Lehigh County,
    no. 1992-C-2442.

      Stuart L. Hall, for plaintiff.

      Kimberly L. Russell, for defendant.
    June 22, 2000
   GARDNER, P.J.,

This matter is before the court on the petition to strike and/or open judgment filed by plaintiff Miers Johnston Printing Corporation. In its petition, plaintiff seeks to either strike or open our order dated May 21, 1999. That order granted defendant Bucks County Bank and Trust Company’s motion to enter judgment of non pros filed July 12, 1995, and dismissed plaintiff’s complaint and amended complaint. For the reasons expressed below, we deny the petition.

In this lawsuit, plaintiff seeks damages in the amount of $338,000 plus interest, costs and reasonable attorney’s fees for defendant bank’s use and occupation of premises owned by plaintiff, but occupied by defendant bank as the result of a default on a loan from the bank by a former tenant of the premises. Plaintiff seeks lost rental value of its building (including the property taxes and insurance payments) and the cost of cleaning up debris and toxic materials left behind when the tenant turned over the building.

This matter is before the court on remand from the Supreme Court of Pennsylvania. We originally granted defendant’s within motion to enter judgment of non pros by our order and bench opinion of December 1, 1995. Our decision was based on the grounds that plaintiff exhibited a lack of due diligence by failing to proceed with this litigation with reasonable promptitude, on the grounds that there was no compelling reasons for the delay, and on the grounds that the delay caused prejudice to the adverse party.

Regarding the prejudice, we relied upon Penn Piping Inc. v. Insurance Company of North America, 529 Pa. 350, 356, 603 A.2d 1006, 1009 (1992) for the proposition that in cases involving a delay for a period of two years or more, the delay will be presumed prejudicial for purposes of any proceeding to dismiss for lack of activity on the docket. We found that a period in excess of two-and-one-half years elapsed between the time plaintiff filed its reply to new matter on February 3, 1993 and filed its motion for summary judgment on September 18, 1995. We found that during that period, the record reflects no substantial action taken by plaintiff in this case.

On February 12, 1997 our decision was affirmed by the Superior Court of Pennsylvania. On April 22, 1998 in a two-sentence per curiam order, the Supreme Court of Pennsylvania, in no. 145, Middle District appeal docket 1997, vacated our December 1, 1995 order and remanded the case “for reconsideration in light of Marino v. Hackman and Jacobs v. Halloran.

The Supreme Court in Jacobs abandoned the two-year presumption of prejudice announced in Penn Piping, supra, and required there to be actual prejudice in order to dismiss a case for inactivity. Accordingly, the within matter was remanded for a determination whether defendant experienced actual prejudice as a result of the delay.

In Jacobs v. Halloran, supra, the Supreme Court of Pennsylvania announced a three-part test. The Supreme Court stated that to dismiss a case for inactivity, pursuant to a defendant’s motion for non pros, there must first be a lack of due diligence on the part of the plaintiff in failing to proceed with reasonable promptitude. Second, the plaintiff must have no compelling reason for the delay. Finally, the delay must cause actual prejudice to the defendant. 551 Pa. at 355, 710 A.2d at 1101.

On May 21,1999 we held oral argument based upon a joint stipulation of agreed upon facts which was filed November 6, 1998. Immediately after oral argument in open court, on the record and in the presence of counsel for the parties, we dictated an order and bench opinion granting defendant’s motion for non pros for reasons articulated in that opinion, which we incorporate here.

Because the Supreme Court vacated our December 1, 1995 order in its entirety, not just the prejudice prong, we concluded that it was appropriate to revisit each prong of the three-prong test.

First, we extensively reviewed both the docket and non-docket activity and concluded that plaintiff failed to proceed with reasonable promptitude. (This was similar to our original analysis and conclusion in our first order and bench opinion of December 1, 1995, which is also incorporated here.)

Second, we concluded that plaintiff had failed to produce a compelling reason for the delay. We stated “in this regard, plaintiff points only to the negligence of local counsel in failing to promptly file the motion for summary judgment, which was forwarded by Boston counsel for that purpose. Plaintiff offers no reason or justification for local counsel’s failure beyond the bare assertion of that failure. As noted by the Superior Court in its memorandum opinion, bare allegations of counsel’s negligence, without more, will not mandate a second day in court. Alston v. Philadelphia Electric Company, 337 Pa. Super. 46, 57, 486 A.2d 473, 478 (1984).” Bench opinion of May 21, 1999, p. 7.

Third, we concluded that the delay caused defendant actual prejudice. We incorporate our detailed analysis on this point here. Briefly, we concluded that the former senior vice-president and former administrative vice-president of defendant bank each left his employment with defendant’s successor bank in 1995. We determined that there are no employees currently at the successor bank who were responsible for handling or monitoring defendant’s loan relationship with plaintiff’s tenant, the tenant’s subsequent bankruptcy proceedings, and the events which ultimately led to the instant litigation.

We concluded that the oral depositions of these two vice-presidents reflected a lack of memory on all but the most general details of these transactions, which occurred eight years ago and earlier. The Supreme Court in Jacobs indicated that fading memories may prejudice a party. We stated “we find that under the circumstances of this case, the delays in bringing this matter to trial, attributable to plaintiff, caused memory loss to such an extent as to create actual prejudice to defendant. Specifically, defendant is unable to reconstruct a defense as a result of plaintiff’s delays from 1993 to 1995. Had plaintiff acted promptly at that time, this case would have proceeded to trial in that time frame, at a time when additional bank employees and other witnesses could have been identified and their testimony preserved, and at a time when the memories of the two presently existing witnesses would have been sharper and clearer.” Bench opinion of May 21, 1999, pp. 8-9.

Initially we note that, although plaintiff styled its request as a petition to strike or open a judgment, it is really a motion to reconsider our order of May 21, 1999 granting defendant’s motion for non pros a second time. Plaintiff advances only two arguments in support of its petition.

First, plaintiff argues that our conclusion that plaintiff failed to produce a compelling reason for the delay (the second prong) is not supported by the record. Second, plaintiff argues that our conclusion, that the delay caused defendant actual prejudice (the third prong) is not supported by the record.

Here plaintiff has filed a petition to strike and to open the judgment of non pros. Under Pa.R.C.P. 3051 this is the proper method to obtain relief from a judgment of non pros. However, plaintiff’s petition fails to allege, and the record fails to establish, the elements of either a motion to strike or a motion to open a judgment.

Moreover, plaintiff’s arguments are invalid. Concerning prong two, plaintiff argues that our conclusion, quoted above, that “[pjlaintiff offers no reason or justification for local counsel’s failure beyond the bare assertion of that failure,” is incorrect.

In paragraph 3 of its petition, plaintiff argues that “Miers/Johnston outlined in great and exacting detail in the January 22, 1996 affidavit of Michael O’Neill, (tab 5 of the index of previously filed affidavits) the unsuccessful multitude of efforts made by Miers/Johnston to have its local counsel file the summary judgment motion, thus showing the reason for any delay.”

The affidavit asserts a number of unsuccessful efforts made by plaintiff’s Boston, Massachusetts attorney, Michael J. O’Neill, Esquire, to request its local counsel, Carmen C. Marinelli Jr., Esquire, to file a motion for summary judgment which had been forwarded by Boston counsel to Mr. Marinelli. However, nowhere in this affidavit, nor anywhere else in the record, is a reason or justification advanced or provided for Mr. Marinelli’s failure to file the document, much less a reason sufficiently valid to justify the delay.

Plaintiff does not establish that Mr. Marinelli’s office burned down, that his file was stolen, that Attorney Marinelli suffered a calamitous illness, or any other reason for local counsel’s failure, beyond the bare assertion of that failure. Plaintiff is equally chargeable with local counsel’s delay, as it is chargeable with house counsel’s delay, or the delay of any of plaintiff’s lawyers. Plaintiff erroneously assumes that if the delay is the fault of co-counsel (local counsel), but not house counsel (Boston counsel), then the delay is not attributable to plaintiff. However, plaintiff must establish that the delay of any and all of its counsel was justifiable, which plaintiff has failed to do.

Concerning prong 3 (where we concluded that plaintiff’s delay caused defendant actual prejudice) plaintiff contends, in paragraph 7 of its petition,

“(7) The 1999 depositions of defendant’s main witnesses (Mr. Mitstifer and Mr. Slimmer) are not relevant to the issue of whether defendant was prejudiced nearly four years earlier. Nevertheless, the deposition transcripts show that the witnesses’ memories are such that defendant would not even be prejudiced as of 1999, let alone 1995.” We disagree.

First, our review of the 1999 depositions support our conclusion expressed in the May 1999 bench opinion that Mr. Slimmer and Mr. Mitstifer have a lack of memory on all but the most general details of these transactions which occurred eight years ago and earlier. For example, in his deposition Mr. Slimmer testified that he had no specific recollection about any conversations he had regarding this case, except for one conversation he had with a woman, whom Mr. Slimmer believed was the daughter of the owners of Miers Johnston.

Mr. Slimmer testified that he had a vague recollection of this conversation, because it was “a very tense conversation.” He remembered the woman was alleging that the bank owed Miers Johnston money for back rents and was responsible for the remainder of the lease, taxes and repairs, and that the woman was very adamant.

Other than this one conversation, Mr. Slimmer testified he had no specific recollection about any other conversations, correspondence, requests to answer discovery questions, requests for production of documents, or anything about this case.

On cross-examination, plaintiff’s counsel presented Mr. Slimmer with specific letters, copies of which originally had been sent to Mr. Slimmer. Even after reviewing the letters, Mr. Slimmer had no recollection of ever receiving them, though he acknowledged that it appeared they were sent to him.

In the other deposition, Mr. Mitstifer testified that he had no recollection of any conversation with anybody who worked for Miers Johnston, its attorneys or of any correspondence in this case. He had a vague recollection of the complaint and some of the allegations contained in it, as he remembered reviewing it.

Mr. Mitstifer had no recollection about any meetings or conversations with any of the bank’s attorneys about it. He did not remember answering any discovery or being asked to produce any documents. He had no recollection of signing the verification attached to the bank’s answer to plaintiff’s complaint.

On cross-examination, Mr. Mitstifer did recollect a few things. However, his memory was limited. First, after review of a letter, a copy of which originally had been sent to Mr. Mitstifer, he remembered the bank may have made an offer to settle, but could not remember any specifics.

Second, after review of another letter, he remembered that some of the property of Spectra Corp. was auctioned off. However, he had no memory of the particular auction, except that he was there to insure that things went smoothly.

Next, Mr. Mitstifer had no recollection of signing or preparing the affidavit which he gave in this matter. However, he did not feel that there was anything untrue or inaccurate about its contents.

The last item plaintiff’s counsel had Mr. Mitstifer examine was a letter from defendant’s counsel, a copy of which had been sent to Mr. Mitstifer. He had some recollection of receiving it, but he recalled nothing else about the letter.

Accordingly, contrary to plaintiff’s assertion, the deposition transcripts do show that the witnesses’ memories are such that defendant is prejudiced as of 1999.

We also reject plaintiff’s contention that the 1999 depositions of the two vice-presidents are not relevant to the issue of whether defendant was prejudiced nearly four years earlier. As noted above, we concluded in the May 1999 bench opinion that plaintiff’s delays from 1993 to 1995 caused Mr. Slimmer and Mr. Mitstifer to have memory loss to such an extent that defendant is now unable to reconstruct a defense. We concluded that had plaintiff acted promptly in 1993, the case could have proceeded to trial at that time, and additional bank employees and other witnesses could have been identified and their testimony preserved, and the memories of the two vice-presidents would have been sharper and clearer.

The 1999 depositions are relevant to establish that there is a current memory loss which prevents the reconstruction of a defense. If plaintiff had not delayed the progress of the case for two years, the case would have proceeded to trial much earlier at a time when their memories would have been clear enough to establish a defense. Therefore, the current memory loss of these witnesses is relevant.

We have now thoroughly reviewed these matters three times (in the bench opinion of December 1, 1995, the bench opinion of May 21, 1999, and in the within opinion). Further review of the matter by this court, as sought in plaintiff’s petition, would be pointless.

For all the foregoing reasons, we deny plaintiff’s petition to strike or open the judgment.

ORDER

Now, June 22, 2000, upon consideration of the petition to strike and/or open judgment filed by plaintiff, upon consideration of defendant’s response to plaintiff’s petition to strike and/or open judgment, and for the reasons expressed in the accompanying opinion, it is ordered that the petition is denied.

      . 551 Pa. 369, 710 A.2d 1108 (1998).

      . 551 Pa. 350, 710 A.2d 1098 (1998).

      . Richard Slimmer.

      . Richard Mitstifer.

      . See the January 27, 1999 deposition of Richard Mitstifer filed April 30, 1999 as exhibit 2 to the third supplemental memorandum of law in support of defendant’s motion to enter judgment of non pros, and the January 27, 1999 deposition of Richard Slimmer filed April 30,1999 as exhibit 1 to the third supplemental memorandum of law in support of defendant’s motion to enter judgment of non pros.

      . A petition to strike is in the nature of a demurrer directed to defects in the record and, if the record is self-sustaining, the judgment cannot be stricken. Resolution Trust Corporation v. Copley Qu-Wayne Associates, 546 Pa. 98, 683 A.2d 269 (1996).

      . The elements of a petition to open a judgment of non pros are to (1) establish the prompt filing of the petition to open; (2) reasonably explain the delay that caused the entry of judgment; and (3) state sufficient facts to establish a cause of action against the defendants. Simmons v. Luallen, 738 A.2d 1018, 1021 (Pa. Super. 1999); Pa.R.C.P. 3051.

      . Although plaintiff does not argue the point in its petition, Michael J. O’Neill states in paragraph 20 of his January 22, 1996 affidavit that during a July 18,1995 telephone status conference that the undersigned “stated that the motion for summary judgment [which plaintiff’s counsel indicated he would be filing] would take care of the motion for judgment of non pros. It was my clear understanding based on the judge’s statement that, upon our filing of the motion for summary judgment, the non pros motion would be moot.” Plaintiff filed its motion for summary judgment on September 18, 1995.
      The undersigned does not recollect stating to counsel at the July 18, 1995 status conference that the filing of a motion for summary judgment by plaintiff would render moot defendant’s motion for non pros. Moreover, the notes of the undersigned of that status conference do not reflect such a statement. In addition, the status conference order of the undersigned dated July 18, 1995 and filed July 25, 1995 does not state that.
      On the contrary, the status conference order states, “it is further ordered that the Lehigh County civil calendar control supervisor shall schedule all summary judgment motions, and defendant Bucks County Bank and Trust Company’s motion to enter judgment of non pros for a single consolidated argument in November 1995.” This is contrary to plaintiff’s assertion that the filing of a summary judgment motion would render it unnecessary to argue the motion for non pros.

        Moreover, in the absence of an actual order, a party cannot create a court order by filing an affidavit stating that the judge said something which might constitute a court order.
      In addition, on at least three occasions plaintiff waived the argument that the undersigned said on July 18,1995 that a summary judgment motion would render moot a non pros motion. First, plaintiff waived that argument by not filing a response to defendant’s motion for non pros. Second, plaintiff waived the argument by not raising it in oral argument on that motion on December 1, 1995. Third, plaintiff waived the argument by not raising the argument in its within petition to strike or open.
      Finally, the Superior Court of Pennsylvania in its memorandum opinion of February 12,1997 (reversed on other grounds) considered and rejected plaintiff’s contention that the filing of plaintiff’s motion for summary judgment rendered moot defendant’s motion for non pros.