author:
SHEERER, Member,
     SAIDIS, Member,

text:
    In the Matter of Steele

      Disciplinary Board Docket no. 34 D.B. 1997.
    June 25, 2005
   To the Honorable Chief Justice and Justices of the Supreme Court of Pennsylvania:

SHEERER, Member,

Pursuant to Rule

218(c)(5) of the Pennsylvania Rules of Disciplinary Enforcement, the Disciplinary Board of the Supreme Court of Pennsylvania submits its findings and recommendations to your honorable court with respect to the above-captioned petition for reinstatement.

I. HISTORY OF PROCEEDINGS

On September 26, 2003, petitioner, Charles Ellis Steele, filed a petition for reinstatement to the bar of the Supreme Court of Pennsylvania. Petitioner was disbarred on consent by order of the Supreme Court of Pennsylvania dated October 28, 1998. This disbarment was made retroactive to April 12, 1997. On November 24, 2003, Office of Disciplinary Counsel filed a response to petition for reinstatement and took the position that insufficient time had passed since petitioner’s disbarment to allow for reinstatement.

A reinstatement hearing was held on March 17,2004, before Hearing Committee 4.15 comprised of Chair Ronald H. Heck, Esquire, and Members Joseph E. Ahornare, Esquire and Carol S. Mills McCarthy, Esquire. Petitoner was represented by Robert H. Davis Jr., Esquire. Petitioner offered the testimony of 12 witnesses, as well as his own, and provided letters of support and character confirmation.

Following the submission of briefs by the parties, the Hearing Committee filed a report on July 6, 2004, and recommended that petitioner be reinstated to the practice of law.

This matter was adjudicated by the Disciplinary Board at the meeting of September 27,2004.

II. FINDINGS OF FACT

The board makes the following findings of fact:

(1) Petitioner was born in 1950 and was admitted to the practice of law in Pennsylvania in 1982. He resides at 6231 White Cloud Rd., Leechburg, PA 15238.

(2) On December 20,1996, following a jury trial, petitioner was convicted of 11 counts of mail fraud for overcharging clients in the amount of $10,300. He was further convicted of four counts of obstruction of justice for allowing inaccurate records to be produced in response to a grand jury subpoena.

(3) On March 25, 1997, petitioner was sentenced to 33 months imprisonment for each of the counts, to be served concurrently, and three years supervised release at each count, to be served concurrently.

(4) Petitioner was ordered to make restitution in the total amount of $81,329.57. A lump sum of $40,000 was to be paid within 30 days of the date of the order. The remainder was to be paid in monthly installments of not less than $1,145 beginning 30 days after petitioner’s release from incarceration.

(5) Petitioner served his incarceration and completed his supervised release on September 29, 2002. He has made consistent progress in making payments of the restitution imposed upon him by the court. As of the date of the hearing, petitioner still owed approximately $71,000.

(6) Upon his return from incarceration, petitioner sought out work and has supported his family and made restitution payments.

(7) Petitioner has been employed in a variety of positions, including legal clerkships, labor negotiator, writing and teaching, assembly line worker, educational and fundraising consultant and “headhunter.” He applied for many kinds of jobs from fast food worker to census taker.

(8) Petitioner initiated contacts with Professor Robert Taylor of Duquesne University, who teaches ethics at that institution. Petitioner now gives presentations to professional responsibility classes at Duquesne and Widener University regarding his misconduct.

(9) Petitioner teaches college-level courses at Penn State University and the University of Phoenix. These courses include constitutional law, school law, organizational management and introduction to psychology.

(10) Petitioner has an ongoing business called Wingspan Consulting Group, which was formed in September 2002. This group designs and teaches courses to school districts related to the Health Insurance Portability and Accountability Act, sexual harassment, and the Family Educational Rights and Privacy Act.

(11) Petitioner is involved in various community activities, such as the local high school music activities and the firemen’s association. His affiliation with these groups has included the handling of large sums of cash. Petitioner has also served on the local zoning board and his township’s Long Range Planning and Recreation Committees.

(12) Twelve witnesses testified on behalf of petitioner. These witnesses were each leaders in their respective professions, businesses or the community. Among these witnesses were:

(a) Andrew Waszyn is a United States Probation Officer and supervised petitioner for three years upon his release from prison. Mr. Waszyn found petitioner to be very remorseful. Mr. Waszyn recommended that petitioner be released from probation despite the fact that petitioner was unable to pay full restitution at the time. Mr. Waszyn believes petitioner will continue to make payments and remain a law-abiding citizen.

(b) Michael Betts, Esquire, is an attorney who offered petitioner a paralegal position shortly after petitioner was released from prison. Mr. Betts found petitioner’s legal work to be of the highest quality. Mr. Betts supports petitioner’s re-admission and has talked to members of the community who feel the same.

(c) Professor Robert Taylor of Duquesne University has taught law for 25 years. Petitioner contacted him regarding talking to his professional responsibility classes about his conviction. Professor Taylor received permission from the law school for petitioner to address his senior classes and stands behind petitioner in his rehabilitation efforts. Over the past four years, petitioner has spoken to approximately 800 law students about his experiences.

(d) Karen Gokay, Esquire, is the director of human resources for the Berks County Intermediate Unit in Reading, Pennsylvania. Ms. Gokay worked as an associate attorney for petitioner from 1993 until 1996 and testified on petitioner’s behalf at his criminal trial. Ms. Gokay hired petitioner to perform non-legal consulting work after his release from prison. She recommended petitioner to her colleagues as a consultant with no reservations. Ms. Gokay knows many persons in Pennsylvania who know of petitioner and his conviction. All persons with whom she has spoken are very supportive of petitioner regaining his law license.

(e) Chester Kent, Esquire, is associate executive secretary of the Tri-State Area School Study Council at the University of Pittsburgh. He has known petitioner for many years and was a client of petitioner. He has talked to a large number of petitioner’s former clients, school personnel and education lawyers about petitioner’s desire to be reinstated as a lawyer. Mr. Kent did not encounter anyone who was opposed to petitioner’s reinstatement.

(13) In addition to live witnesses, many character letters were submitted in support of petitioner’s reinstatement.

(14) Petitioner testified on his own behalf.

(15) Petitioner expressed sincere remorse for his criminal misconduct.

(16) Petitioner’s imprisonment was a very humbling and difficult experience for him. His mother died while he was incarcerated and this event caused him substantial personal pain.

(17) During his imprisonment, petitioner’s wife, who suffers from Crohn’s Disease, was forced to return to work as a teacher, after 14 years as a stay-at-home mother to three children.

(18) Petitioner’s family struggled financially, as well as emotionally, during this time. Petitioner’s oldest son, who was a teenager, developed depression and rebelled against his mother.

(19) Petitioner was diagnosed with prostate cancer in 2002 and has been dealing with that disease.

(20) Petitioner currently owes approximately $71,000 in restitution, has unpaid debts, a child in college and no steady stream of income, despite the different jobs he holds.

(21) Petitioner does not yet earn a substantial income from Wingspan Consulting Group, although he works many hours preparing materials and marketing the products.

(22) Petitioner nevertheless intends to pay his restitution.

(23) Petitioner fulfilled his required Continuing Legal Education credits for reinstatement.

(24) Petitioner keeps apprised of the law by reviewing advance sheets and doing internet research. He reviews a variety of legal cases in preparation for teaching his college courses.

(25) If reinstated, petitioner intends to practice education law in western Pennsylvania. He has already been approached by a school district to apply for the solicitor position. He may also consider practicing criminal law as a defense lawyer.

III. CONCLUSIONS OF LAW

(1) The misconduct for which petitioner was disbarred is not so egregious as to preclude immediate consideration of his petition for reinstatement.

(2) Petitioner has demonstrated by clear and convincing evidence that he possesses the moral qualifications, competency and learning in the law necessary to practice law in the Commonwealth of Pennsylvania.

(3) Petitioner has demonstrated that his resumption of the practice of law within the Commonwealth will be neither detrimental to the integrity and standing of the bar or administration of justice nor subversive of the public interest.

IV. DISCUSSION

This matter comes before the Disciplinary Board on a petition for reinstatement filed by Charles Ellis Steele. Petitioner was disbarred on consent by order of the Supreme Court of Pennsylvania dated October 28, 1998, and made retroactive to April 12,1997. Petitioner bears the burden of proof by clear and convincing evidence that he is qualified for re-admission. Pa.R.D.E. 218(c) (3)0).

Petitioner’s request for reinstatement following disbarment is initially governed by the standard set forth by the Supreme Court of Pennsylvania in Office of Disciplinary Counsel v. Keller, 509 Pa. 573, 506 A.2d 872 (1986). As a threshold matter, the board must determine whether petitioner has demonstrated that his breach of trust was not so egregious that it precludes him from reinstatement.

Petitioner was found guilty of 15 federal felony counts, II of which were mail fraud and four of which were obstruction of justice. The mail fraud counts involved inflating bills to 11 separate clients. These clients were school districts represented by petitioner. The obstruction of justice counts involved the submission of false documents to the U.S. Attorney’s office for submission to a federal grand jury.

While very serious in nature, this misconduct is not so egregious as to preclude consideration of petitioner’s request for reinstatement. In re Perrone, 565 Pa. 563, 777 A.2d 413 (2001) (Attorney Perrone’s conviction of theft by deception, tampering with public records or information, securing execution of documents by deception, and unsworn falsification to authorities was not egregious enough to prohibit consideration of the reinstatement petition); In re Verlin, 557 Pa. 47, 731 A.2d 600 (1999) (Attorney Verlin’s conviction of criminal conspiracy, perjury, false swearing, and theft by deception was not egregious enough to prohibit consideration of the reinstatement petition).

Having concluded that petitioner’s misconduct is not so egregious as to preclude reinstatement, the board must now determine whether petitioner has met his burden of proving by clear and convincing evidence that his resumption of the practice of law at this time would not have a detrimental impact on the integrity and standing of the bar, the administration of justice or the public interest, and that he has the moral qualifications, competency and learning in the law required for admission to practice law in Pennsylvania. Pa.R.D.E. 218(c) (3)(i). In order to make this determination, the board must consider the amount of time that has passed since petitioner was disbarred, as well as his efforts at rehabilitation. In re Verlin, 557 Pa. 47, 731 A.2d 600 (1999).

Petitioner has been without a license to practice law for approximately seven and a half years. While this amount of time may appear on its face to be insufficient to dissipate the taint of petitioner’s misconduct, a closer evaluation of petitioner’s disbarment period suggests that it was a time of successful qualitative rehabilitation for petitioner.

Petitioner served his prison sentence, continuously paid restitution, worked diligently at obtaining employment in order to support his family and pay his obligations, established a business, developed a solid reputation in that business, did volunteer work for his community and maintained and expanded his legal knowledge. Petitioner has shown through these actions a genuine desire to right his wrongs and contribute in a positive way to society. Additionally, and importantly, petitioner expressed sincere remorse for his past actions. He is not afraid to speak of his experience in the criminal system in order to help others avoid his mistakes. Petitioner voluntarily asked to give presentations to law school ethics classes in order for law students to benefit from his experiences.

Numerous witnesses, in addition to petitioner’s statements, helped establish that he has accepted his wrongdoing and is remorseful. Many impressive witnesses support petitioner’s reinstatement and have no reservations about his resumption of the practice of law in Pennsylvania.

Considering all of the above facts, the board is persuaded that petitioner has demonstrated that he has engaged in a qualitative period of rehabilitation during his disbarment. Petitioner has met his burden of proving that he has the moral qualifications, learning and competence to practice law and his resumption of the practice of law will not have a detrimental impact on the integrity and standing of the bar, the administration of justice or the public interest. The board recommends that the petition for reinstatement be granted.

V. RECOMMENDATION

The Disciplinary Board of the Supreme Court of Pennsylvania recommends that petitioner, Charles Ellis Steele, be reinstated to the practice of law.

The board further recommends that, pursuant to Rule 218(e), Pa.R.D.E., petitioner be directed to pay the necessary expenses incurred in the investigation and processing of the petition for reinstatement.

Board Members Teti, Saidis, Newman and Brown dissented and would recommend reinstatement be denied.

Board Member Nordenberg did not participate in the September 27,2002 adjudication.

DISSENTING OPINION

SAIDIS, Member,

January 10, 2005 — I would deny Mr. Steele’s petition for reinstatement.

In Office of Disciplinary Counsel v. Keller, 509 Pa. 573, 579, 506 A.2d 872, 875 (1986), the Supreme Court stated:

“The primary purpose of our system of lawyer discipline is to protect the public from unfit attorneys and to maintain the integrity of the legal system ....”

When reinstatement is sought by a disbarred attorney, the threshold question must be whether the magnitude of the breach of trust would permit the resumption of practice without a detrimental effect upon “the integrity and standing of the bar or the administration of justice, or subversive of the public interest.” Pa.R.D.E. 218(c)(3)(i).

Mr. Steele’s conduct is not so egregious as to prevent reinstatement in the future. The issue is whether sufficient time has passed since Mr. Steele’s disbarment.

Mr. Steele’s criminal conduct led to his conviction of 11 counts of mail fraud and four counts of obstruction of justice. He was sentenced to 33 months incarceration and three years probation. Mr. Steele was ordered to make restitution of the $81,329.57. Mr. Steele failed to recognize his wrongdoing as evidenced by the memorandum opinion entered June 7, 1999, by Senior District Judge Cohill. Although given opportunity for input into a payment plan for the restitution order, Mr. Steele objected to the restitution plan’s procedure by motion and by letter. Mr. Steele pursued an appeal and on December 12, 1997, his convictions were affirmed by the Third Circuit, rehearing was denied and his attempt to gain certiorari from the Supreme Court and the rehearing thereon were both denied.

Mr. Steele’s mail fraud and obstruction of justice convictions involved public funds. The clients defrauded were school districts. The primary source of the funding for school districts is real estate taxes imposed upon each homeowner in the school district and funds received from the Commonwealth. The funds were meant to educate our young people. The victims of Mr. Steele’s crimes (all the taxpayers of the school districts he defrauded) cannot be overlooked.

Although ordered to pay a total of $81,329.57 in restitution, including a lump sum payment of $40,000 by May 12,1997, Mr. Steele did not comply with the order. The lump sum remains unpaid and $73,028 of restitution remains outstanding, with only $8,301 paid.

This case is compounded by Mr. Steele’s high profile practice. He represented school districts around the Commonwealth (Erie, Harrisburg, Pittsburgh, Allentown and seemingly everywhere in between). His wrongdoing received widespread media attention, calling into question lawyers’ integrity throughout the Commonwealth.

As noted by the Supreme Court in In re Verlin, 557 Pa. 47, 731 A.2d 600 (1999), Verlin’s disbarment for eight years is not an extremely lengthy period of time. Similarly, in In re Greenberg, 561 Pa. 154, 749 A.2d 434, 437 (2000), re-admission was denied after eight years. The court felt, based on the severity of Greenberg’s misdeeds, reinstatement after eight years of disbarment reinforced the public’s perception that lawyers are greedy and dishonest. The court concluded that reinstatement would tarnish the legal profession and weaken the public trust, especially given the deliberate misconduct.

The issue was succinctly stated by the court:

“The operative question is, if the public knew of petitioner’s transgressions, would the fact that he was able to resume practicing law after a mere eight years of disbarment adversely affect the public’s perception of the legal profession? We believe it would.”

By comparison, in In re Perrone, 565 Pa. 563, 111 A.2d 413 (2001), criminal charges stemmed from Perrone’s filing a false and misleading fee petition, which requested payment for legal services purportedly provided to indigent defendants in the City of Philadelphia. Perrone was charged with theft by deception, tampering with public records, securing execution of documents by deception and unsworn falsification to authorities. Perrone received concurrent criminal sentences of two years and five years probation. Perrone, at the time of his first request for reinstatement, had made complete restitution in the amount of $130,000. His actions were committed deliberately and solely for his own personal profit. Mr. Perrone’s initial petition for reinstatement was denied.

“In light of the circumstances, it is clear that Perrone’s dishonest actions have gravely damaged both the legal profession and the public trust in the legal system. Given the severity of Perrone’s misdeeds, allowing him to be reinstated after less than eight years of disbarment would only reinforce the public’s perception that lawyers are greedy and deceitful. . . . Therefore, as we believe that allowing Perrone to resume the practice of law, at the present time, would have a detrimental effect on the integrity and standing of the bar and on the administration of justice and would subvert the public interest, the petition for reinstatement is denied.” Id., 777 A.2d at 417. (footnote omitted)

The similarities between the Steele and Perrone cases are unmistakable. They involve deliberate misconduct committed solely for personal profit. The conduct involved the illegal payment of public funds to the lawyer. Both were ordered to pay restitution. At the time of his petition for reinstatement, Perrone had paid all restitution. Mr. Steele has made but a feeble effort. Mr. Perrone served probation and Mr. Steele’s conduct resulted in incarceration for 33 months and three years probation.

Mr. Steele’s conduct, while perhaps no more reprehensible than Perrone’s, resulted in incarceration, it was well-publicized throughout the Commonwealth of Pennsylvania and a large, outstanding balance on the restitution order remains due to public school districts. If the public knew of Mr. Steele’s transgressions and he was authorized to resume the practice of law after less than eight years, I am of the opinion that his reinstatement would adversely affect the public’s perception of the legal profession.

Board Members Teti, Newman and Brown join in this dissent.

ORDER

And now, June 24, 2005, a rule having been issued upon Charles Ellis Steele pursuant to Rule 218(c)(6), Pa.R.D.E., on March 24, 2005, to show cause why an order denying reinstatement should not be entered, upon consideration of the responses filed, the rule is discharged and the petition for reinstatement is hereby granted.

Pursuant to Rule 218(e), Pa.R.D.E., petitioner is directed to pay the expenses incurred by the Disciplinary Board in the investigation and processing of the petition for reinstatement.

      . It should be noted that the Disciplinary Board at its September 27,2004 meeting has recommended Mr. Perrone for reinstatement 11 years after disbarment.


source: Caselaw Access Project

author: FRIEDMAN, 1,

license: Public Domain

text:
    Friedman v. Hershey Foods Corporation

      Robert E. Mielnicki, for plaintiff.

      David J. Porter, for defendants.
    June 1, 2005
   FRIEDMAN, 1,

FACTUAL AND PROCEDURAL HISTORY

Plaintiff has appealed from this court’s order dated February 11, 2005, in which we granted defendants’ “Motion for judgment on the pleadings pursuant to Pa.R.C.P. 1034 and motion for judgment on admission [sic] pursuant to Pa.R.C.P. 1037(c)” and dismissed plaintiff’s complaint with prejudice.

Plaintiff commenced this action by filing his complaint on September 7,2004. In it, he alleged that, beginning in 1994, he “started ingesting Hershey’s chocolate syrup with milk as apart of his diet. The plaintiff only ingested Hershey’s chocolate syrup, and kept a food diaty of his food intake.” (Complaint ¶5.) He alleged that “[sjtarting on or about 1997, the plaintiff was admitted to Forbes Regional Hospital with infected lungs, difficulty breathing and shortness of breath. The cause of the illness was unknown at that time.” (Complaint ¶6.) Plaintiff then alleged that he suffered other physical and psychological illnesses and hospitalizations. He alleged that “[t]hese problems continued until October 31,2000, when plaintiff stopped drinking milk with Hershey’s syrup” (complaint ¶14), and that in the years 2001 and 2002 his condition continued to improve. He alleges that in “November 2002, he obtained an expert opinion from Dr. Raymond Singer Ph.D., a neurotoxologist, after reviewing the studies and plaintiff’s history, that an additive from Hershey’s syrup, namely xanthan gum, was the cause of his health and mental problems.” (Complaint ¶19.) Plaintiff alleges that he purchased all of his Hershey’s syrup from defendant Giant Eagle.

Plaintiff’s complaint contains four counts:

• Count I — Strict products liability against defendant Hershey.
• Count II — Breach of warranty against defendant Hershey.
• Count III — Negligence against defendant Hershey.
• Count IV — Stream of commerce liability against defendant Giant Eagle.

Defendants filed an answer and new matter on October 25, 2004. In their new matter, they asserted, inter alia, the bar of the statute of limitations, estoppel, and waiver. Defendants averred that plaintiff had filed a separate action against Paul J. McArdle, Esq., alleging legal malpractice based on McArdle’s refusal to file a complaint against Hershey for harm suffered by plaintiff from ingesting xanthan gum in Hershey’s chocolate syrup. Defendants averred that one of plaintiff’s allegations in that case, regarding when he discovered the possible connection of xanthan gum with his lung problems, was inconsistent with his allegations in this case. Defendants also aver in their answer and new matter that McArdle subsequently sued plaintiff claiming defamation, and that plaintiff admitted in his answer, new matter and counterclaim to McArdle’s complaint that he believed that his breach of warranty claim “had no chance of success.” (Answer and new matter at GD 04-8669, ¶69.)

In his reply to new matter, which was filed on January 3, 2005, plaintiff contends, inter alia, that the statute of limitations was tolled until his condition “was verified by expert reports that contradicted his doctors and previous attorney’s report, which was November 27,2002.” (Reply to new matter ¶3.) He also avers that his comments in the complaint regarding the breach of warranty claim having “no chance of success” were misinterpreted by defendants, since “Plaintiff was pro se when filing his complaint, and said paragraph is an opinion of law, not a statement of fact.” (Reply to new matter ¶4.)

On December 29, 2004, both of the defendants filed a “Motion for judgment on the pleadings pursuant to Pa.R.C.P. 1034 and motion for judgment on admission pursuant to Pa.R.C.P. 1037(c).” Defendants raised several grounds for judgment in their favor, including plaintiff’s failure to file a reply to new matter and the bar of the statute of limitations based on plaintiff’s statements pertinent to the discovery rule in the prior related litigation.

We entered judgment in favor of defendant based upon plaintiff’s factual averments in this action and in the related case of Friedman v. McArdle. In the earlier case, plaintiff averred that “Mr. McArdle undermined and destroyed the case by not filing the complaint in a timely fashion.... Product liability cases must be filed within two years of the date of discovering the problem, which was October 31, 2000, by me or November 2000 by a lung specialist who treated me. Mr. McArdle obviously knew the case was worthless after November 2002.” (Amended complaint at AR 03-7432, ¶6, filed 1-5-04.) Plaintiff cannot now be heard to say that he did not discover the cause of his injury until November 27, 2002, when he received his expert report, and that the statute of limitations therefore expired on November 27, 2004, so that the commencement of this case on September 9, 2004, was timely.

The discovery rule was discussed in Ingenito v. AC & S Inc., 430 Pa. Super. 129, 633 A.2d 1172 (1993):

“The ‘discovery rule’ is an exception to the rule which arises from the inability of an injured person, despite the exercise of due diligence, to know of the injury or its cause. ... In creeping diseases cases, it has been held, the statute of limitations begins to run when the injured person ‘knows, or reasonably should know: (1) that he has been injured, and (2) that his injury has been caused by another party’s conduct.’ ... ‘A court presented with an assertion of applicability of the “discovery rule” must, before applying the exception of the rule, address the ability of the damaged party, exercising reasonable diligence, to ascertain the fact of a cause of action.’... ‘The standard of reasonable diligence is an objective or external one that is the same for all individuals.’ . . . ‘We evaluate the plaintiff’s conduct in terms of what he should have known at a particular time by following a course of reasonable diligence. If a party has the means of discovery within his power but neglects to use them, his claim will still be barred. ’... A plaintiff does not need to know that he has a cause of action, or that he has suffered an injury due to another party’s wrongful conduct. ‘[Ojnce [aplaintiff] possesses the salient facts concerning the occurrence of his injury and who or what caused it, he has the ability to investigate and pursue his claim.’... A diligent investigation may require one to seek further medical examinations as well as competent legal representation.” 430 Pa. Super. at 133-34, 633 A.2d at 1174-75. (citations omitted)

We granted defendants’ motion not because of plaintiff’s prior legal conclusions as to his former attorney having missed the statute of limitations, but because of plaintiff’s prior factual assertions regarding the date when he suspected the Hershey’s syrup was causing his repeated lung problems, as well as the date when a lung specialist also thought the connection was a possibility.

In support of their motions, defendants cited the case Ackler v. Raymark Industries Inc., 380 Pa. Super. 183, 551 A.2d 291 (1988). In Ackler, an employer’s motion for summary judgment was granted and the employee’s claim for an asbestosis injury was dismissed on the grounds that it was time-barred. The employee in Ackler had signed a workmen’s compensation petition on August 19,1981, stating that he was suffering from asbestosis and had scarring of the lungs, and specifying when and how he was exposed to asbestos. The employee subsequently filed an action against his employer and several asbestos manufacturers in common pleas court on December 21, 1983, more than two years after the signing of the workmen’s compensation petition. The Superior Court concluded that the lower court properly dismissed the case as having been brought beyond the two-year statute of limitations. It concluded that the employee could “not now be heard to complain at this date that he did [not] know, or have reason to know, on August 19, 1981, that he had been injured and his injury had been caused by another party’s conduct.” 380 Pa. Super. at 195, 551 A.2d at 297.

In the instant case, plaintiff alleged in a prior lawsuit, the one against his former attorney, that the connection between Hershey’s chocolate syrup and his lung ailment was suspected by him by October 31, 2000, and by his lung specialist in November 2000. He cannot change those factual allegations and claim that he did not discover the connection until he received an expert report in November 2002. The court properly entered judgment in favor of defendants based on the bar of statute of limitations.

      . The actual order signed granted defendants’ motion for judgment on admission.

      . Friedman v. McArdle, AR 03-7432.

      . One of the issues raised in the motion was plaintiff’s failure to timely file a reply to new matter. After the filing of the motion, plaintiff did file a reply to new matter. We did not reach the issue of the timeliness of the reply.


author: JAMES, J,

text:
    Knorr v. Knorr

      Theodore R. Laputka, for plaintiff.

      Susan M. Hill, for defendant.
    October 5, 2005
   JAMES, J,

This matter is before the court to consider plaintiff’s petition for special relief to set aside postnuptial agreement. Plaintiff filed a divorce complaint on November 12, 2004, and filed this petition concerning the postnuptial agreement on November 29,2004. This court conducted a hearing regarding the petition to set aside the postnuptial agreement on March 28,2005. After the hearing, this court ordered the parties to attempt to amicably resolve this matter. If they could not, they were directed to notify the court and to file briefs, after which this court would render a decision. The parties could not amicably resolve this issue, and the matter is ready for decision.

The parties were married on October 13, 1994, and they separated on November 5, 2004. This was the second marriage for each party. Their first child was bom on December 20, 1994. A second child was born three years later. On January 11, 1995, approximately three weeks after plaintiff gave birth to the parties’ first child, she went to defendant’s attorney’s office to discuss estate planning issues and, apparently, a postnuptial agreement. Plaintiff does not recall the postnuptial agreement. Nothing was signed at that meeting. The parties met again with defendant’s attorney to discuss the same documents on February 21,1995. No documents were signed at that time. Several months later, on July 20, 1995, the parties signed a postnuptial agreement at the defendant’s attorney’s office. Plaintiff does not recall signing the postnuptial agreement. Plaintiff was unrepresented by counsel at all times.

The postnuptial agreement obligated the defendant to make plaintiff one-half tenants by the entireties owner of one of his corporations. He never did so. Although there is a notation in the corporation’s stock certificate ledger that a certificate was transferred to plaintiff and defendant on July 27, 1995, no certificate was found. Defendant did not produce the stock book at a January 26, 2005 deposition although subpoenaed to do so. He found the stock book two days before the March 28,2005 hearing. Defendant never acknowledged plaintiff as co-owner in any tax filings or other documents subsequent to 1995. Eventually, said corporation became worthless. It had been valued at $92,000 by defendant in his financial disclosure in the postnuptial agreement.

The postnuptial agreement also obligated the defendant to transfer a home (the subsequent marital abode) to tenants by the entireties ownership with plaintiff. The home was valued at $250,000 with a $100,000 mortgage in 1995. The deed was never delivered to plaintiff nor recorded. It was apparently signed by defendant and notarized by defendant’s attorney’s real estate specialist on July 21, 1995. However, it remained in defendant’s attorney’s file. Neither plaintiff (nor plaintiff’s divorce attorney) ever saw the signed deed until the date of the hearing on March 28, 2005. Defendant did not produce the deed at a January 26, 2005 deposition although subpoenaed to do so. In the interim since 1995, defendant re-mortgaged the premises described in the proposed deed to plaintiff.

The postnuptial agreement reflected defendant’s net worth at $1,673,314, largely consisting of stock, real estate and business interests. Plaintiff’s net worth was placed at $42,500, consisting of a car, jewelry and furniture. Interestingly, defendant’s asset disclosure form is handwritten and signed by him. Plaintiff’s asset disclosure form is typed and signed by her. In essence, the post-nuptial agreement provided plaintiff with her rights in the corporation and the real estate in exchange for her waiver of all other marital rights, including but not limited to estate rights, alimony and support and property rights, except regarding property placed in joint ownership during the marriage.

The issue is whether or not the postnuptial agreement is rescindable because of failure of consideration or breach of contract. This court finds that there was both a failure of consideration and a breach of contract. Plaintiff’s consideration consisted of waiving her financial marital rights. Defendant’s primary contractual consideration was his promise to transfer to plaintiff, “contemporaneously” with the signing of the agreement, one-half interest in the corporation and the real estate. Neither the stock nor the real estate was transferred, contemporaneously or by the time the parties separated in 2004. Nor does it appear that defendant ever attempted or intended to transfer the stock or real estate. No stock certificate was ever found. As late as 2003, defendant stated on his tax returns that he, himself, was the sole owner of the stock, with no mention of plaintiff.

The deed may have been signed by defendant in 1995, but it was never delivered to plaintiff, nor recorded, nor attempted to be delivered or recorded. Defendant is a businessman who refinanced the same real estate after 1995. During the refinancing process, he must have known and noticed that plaintiff was not a record owner of the real estate and that the deed was not delivered or recorded. Still, he chose not to effectuate its delivery.

“[DJelivery of the deed is necessary to render it legally operative. Herr v. Bard, 355 Pa. 578, 580-82, 50 A.2d 280, 281 (1947). Whether there has been delivery depends on the intention of the grantor as shown by his words and action and by circumstances surrounding the transaction. Abraham v. Mihalich, 330 Pa. Super. 378, 379-81, 479 A.2d 601, 602 (1984). Conditional delivery or a delivery in escrow of a deed is not a delivery to the grantee. Stephenson v. Butts, 187 Pa. Super. 55, 58-60, 142 A.2d 319, 321 (1958).” Atiyeh v. Bear, 456 Pa. Super. 548, 560, 690 A.2d 1245, 1251 (1997).

In this case, there was no attempt to deliver the deed or the stock to plaintiff. Thus, defendant breached his executory obligations under the contract.

Moreover, since defendant did not fulfill his promise to make plaintiff co-owner of the stock and real estate, almost a decade passed without plaintiff participating as co-owner of the corporation and the real estate, both of which are now either worthless or differently encumbered, i.e., re-mortgaged. The consideration that she was entitled to receive for her promise to forgo certain marital rights is now different than promised. The corporation is worthless. The real estate is re-mortgaged. If she had been part owner of the stock and real estate over the last decade, the machinations of the corporation and real estate may have been different. Thus, it would be pure speculation to determine the present value of the consideration which plaintiff was promised 10 years ago. The consideration has failed totally as defined by the Restatement (First) of Contracts §274:

“Failure of consideration as a discharge of duty.
“(1) In promises for an agreed exchange, any material failure of performance by one party not justified by the conduct of the other discharges the latter’s duty to give the agreed exchange even though his promise is not in terms conditional. An immaterial failure does not operate as such a discharge.
“(2) The rule of subsection (1) is applicable though the failure of performance is not a violation of legal duty.”

Thus, rescission is the applicable remedy since there is a breach of contract, failure of consideration and impossibility to perform the contract as intended a decade ago.

“[I]f the contract becomes impossible of performance, the relation ends, and the money advanced can be recovered back (Hudson v. West, 189 Pa. 491[, 42 A. 190]; Lieb v. Painter, 42 Pa. Super. 399; Paxton Lumber Co. v. Panther Coal Co., 83 W.Va. 341[, 98 S.E. 563]), and the same is true if the right to rescind arises because of failure to perform by the other party: Crossgrove v. Himmelrich, 54 Pa. 203. There are cases which have recognized the rule that, in the absence of an express provision to the contrary, if the act to be performed is necessarily dependent on the continued existence of the specific thing, the perishing thereof before time of performance, without the fault of the promissor, as by an act of God, public enemy or the law, will excuse the contractor on the ground of an implied condition in this regard, and further deliveries by the vendor will be excused: Dixon v. Breon, 22 Pa. Super. 340; 12 A.L.R. 1274, note.” William F. Mosser Co. v. Cherry River Boom & Lumber Co., 290 Pa. 67, 72, 138 A. 85-88 (1927).

The Pennsylvania Superior Court has set forth a five-prong analysis to determine if rescission is appropriate:

“In resolving this dispute, we begin with a recitation of various principles of law germane to the case at bar: First, the task of interpreting a contract is generally performed by a court rather than a jury, Walton v. PNB, 376 Pa. Super. 329, 545 A.2d 1383 (1988); Second, where a contract is executory on both sides (as was the case here), the party seeking the legal enforcement of the stipulations of the other party must show a compliance with his own. In other words, that which is first to be performed must be done or tendered before the party who is to do it can sustain a suit against the other, 17AAm.Jur.2d, §§609, 470 (‘in the case of a concurrent condition, there is no liability until the condition is performed or occurs.’); Third, it is the general rule that where no time is agreed upon for the completion of a contract, it must be completed within a reasonable time under all the circumstances, 8 P.L.E. Contracts, §245; 17AAm.Jur.2d, §§202, 479; Fourth, where contractual promises or covenants are mutual and dependent, the failure of one party to perform authorizes the other to rescind the contract, 17A Am.Jur.2d, §§570, 574 (Interdependence of contractual provisions, in which a material breach occurs by one party, entitles the other party to rescind); and Fifth, what is a reasonable time within which to exercise the right of rescission, when the facts are undisputed, is a question of law to be determined by the court, 8 P.L.E. Contracts, §319.” Francis Gerard Janson P.C. v. Frost, 422 Pa. Super. 36, 41, 618 A.2d 1003, 1006 (1993). (emphasis in original)

In this case, this court finds that the contract is an ex-ecutory contract on the part of the parties. Plaintiff acted, i.e., waived her marital rights via the contract itself. Defendant failed to execute his promises under the contract. The stock and real estate were supposed to be transferred “contemporaneously” but, in fact, were never transferred. Thus, plaintiff is authorized to rescind the post-nuptial agreement. She has done so within a reasonable time since it was only after the parties’ separation that she realized what had occurred. She took action immediately.

“The purpose of equitable rescission is to return the parties as nearly as possible to their original positions where warranted by the circumstances of the transaction. Fichera v. Gording, 424 Pa. 404, 227 A.2d 642 (1967).” Gilmore v. Northeast Dodge Co. Inc., 278 Pa. Super. 209, 216, 420 A.2d 504, 507 (1980). In this case, the parties’ original position can only be established as if the contract had not existed. The contract must be rescinded.

ORDER

And now, October 5, 2005, the court finds and orders that the postnuptial agreement dated July 20, 1995, is rescinded and is void.

      . Plaintiff also asserts that the postnuptial agreement is unenforceable because it “did not include full and fair disclosure at the time of its execution.” However, there was no evidence of lack of full and fair disclosure.


author: MOSCHETTA, J,

text:
    UNUM Life Insurance Company of America v. Carlins

      Templeton Smith Jr., for plaintiff.

      William S. Schweers Jr., for defendant.

      October 11, 2005
   MOSCHETTA, J,

I. FINDINGS OF FACT

A. Findings of Fact Not in Dispute

(1) Plaintiff, UNUM Life Insurance Company of America, is a corporation existing under the laws of the State of Maine. Its principal office is located at 2211 Congress Street, Portland, Maine.

(2) Defendant, Leslie A. Carlins, is an individual residing at 6902 Spruce Street, Finleyville, Washington County, PA. Prior to July 7,1998, Carlins was employed as a registered nurse in the intensive care unit of the University of Pittsburgh Medical Center.

(3) At all relevant times, Carlins was insured under a disability insurance policy, identified as policy no. ********, which was provided by UNUM through Carlins’ employer.

(4) The policy provides benefits to insureds who are “disabled” as that term is defined in the policy.

(5) The policy sets forth the following criteria on page LTD-BEN-1 for determining whether an insured individual is “disabled” and may thus be entitled to benefits under the policy:

“You are disabled when UNUM determines that:
“You are limited from performing the material and substantial duties of your regular occupation due to your sickness or injury; and, if applicable, you have a 20 percent or more loss in your indexed monthly earnings due to the same sickness or injury.
“After 24 months of payments, you are disabled when UNUM determines that due to the same sickness or injury, you are unable to perform the duties of any gainful occupation for which you are reasonably fitted by education, training or experience ...
“REGULAR OCCUPATION means the occupation you are routinely performing when your disability begins.”

(6) The policy, on page LTD-CLM-2 further provides:

“WHAT HAPPENS IF UNUM OVERPAYS YOUR CLAIM?
“UNUM has the right to recover any overpayments due to:
“ — fraud
“ — any error UNUM makes in processing a claim; and
“ — your receipt of deductible sources of income.
“You must reimburse us in full. We will determine the method by which the repayment is to be made.
“UNUM will not recover more money than the amount we paid you.”

(7) Carlins submitted a short-term/long-term disability claim form to UNUM, pursuant to the policy, alleging a disability as of July 7, 1998, and further alleging that her last day worked was July 6, 1998.

(8) By letter dated March 3, 1999, UNUM informed Carlins that her request for disability benefits had been approved, and that benefits would be paid beginning with the first day following the policy’s elimination period, which was January 5, 1999. The letter further explained that UNUM would pay Carlins a lump sum for the period from January 5, 1999 through March 4, 1999, and thereafter would send her monthly payments. The letter also enclosed a form upon which Carlins was to indicate her preference with regard to the reduction of disability benefits to account for potential Social Security Disability benefits. The form, executed by Carlins on March 8, 1999, provided as follows, in relevant part:

“I agree to reimburse UNUM immediately in full for the amount of any overpayment regardless of option chosen.”

(9) Via letter dated October 11,2000, which explained UNUM’s rehabilitation program, UNUM reminded Carlins that her eligibility for ongoing benefits would continue to be objectively assessed whether or not she participated in rehabilitation efforts.

(10) Via letter dated December 5, 2000, UNUM informed Carlins that it had concluded a review of her disability claim and had determined that, based upon the Supplemental Statement and Functional Capacity Estimate forms completed by Carlins’ physician, Carlins was capable of performing the material and substantial duties of a registered nurse, and was thus not “disabled” as that term is defined in the policy. The letter also advised Carlins of her appeal rights under the policy.

(11) Carlins appealed UNUM’s denial of her disability claim via letter dated December 15, 2000.

(12) Via letter dated December 20, 2000, UNUM informed Carlins’ attorney that the additional material he had submitted in support of Carlins’ claim was insufficient to warrant a reversal of the decision to deny that claim. The letter further stated that Carlins’ file had been forwarded to UNUM’s Quality Review Unit for an impartial review, as required by ERISA.

(13) Via letter dated March 16,2001, UNUM notified Carlins’ attorney that it had reviewed its denial of benefits under the policy and concluded that such denial was appropriate, as a medical review revealed no support for a finding of disability throughout the duration of her claim. The March 16, 2001 letter further explained that UNUM’s decision was based upon a review of Carlins’ file by a physician and the results of surveillance of Carlins conducted during November 2000.

(14) Between the time it commenced disability payments to Carlins and December 10, 2000, when it discontinued such payments pursuant to the terms of the policy, UNUM had paid Carlins a total of $37,503.40.

(15) Via letter dated April 3,2001, Recovery Specialist Elise Coffin of UNUM’s Financial Recovery Unit demanded that Carlins reimburse UNUM the $37,503.40 worth of benefits that UNUM had paid her.

(16) The policy imposes the following limitations on claim-related legal actions by Carlins against UNUM:

“You can start legal action regarding your claim 60 days after proof of claim has been given and up to three years from the time proof of claim is required, unless otherwise provided under federal law.”

(17) The policy contains the following time limitation on the submission of proof of claim:

“Written notice of a claim should be sent within 30 days after the date your disability begins. However, you must send UNUM written proof of your claim no later than 90 days after your elimination period.”

(18) The Disability policy provides the following elimination period:

“Your elimination period is the later of:
“ — 180 days [from the date of your disability]; or
“ — the date your short-term disability payments end, if applicable.”

(19) Carlins did not receive any short-term disability payments under the policy. Accordingly, her elimination period ran for 180 days from July 7,1998, the date upon which she claimed to have become disabled, and ended on January 3,1999.

(20) Pursuant to the provision of the policy quoted in paragraph 17 above, Carlins was required to file her proof of claim no later than 90 days after January 3, 1999 (March 4, 1999). (Plaintiff actually filed her proof of claim on July 10, 1998.)

(21) Pursuant to the provision of the policy quoted in paragraph 16 above, Carlins had three years from March 4,1999 (March 4,2002) to file a legal action with regard to her claim.

(22) Carlins did not commence any legal action regarding her claim within three years of March 4, 1999 and is, therefore, foreclosed from challenging UNUM’s denial of benefits.

(23) To date, Carlins has failed to repay the $37,503.40 demanded by UNUM.

B. Stipulation As to Issue To Be Decided

The parties have stipulated to the following:

The sole issue before the court in this case is whether the provision, in the long-term disability insurance policy issued by plaintiff UNUM to Carlins, that “UNUM has the right to recover any overpayments due to . . . any error UNUM makes in processing a claim” entitles UNUM to recover the benefits it paid to Carlins for the period January 5, 1999 through December 10, 2001.

II. CONCLUSIONS OF LAW

The court makes the following conclusions of law:

(1) Because the policy is contained in a written agreement between the parties, its terms must be construed against UNUM, the party that prepared the contract. Ormond Realty v. Ninnis, 341 Pa.Super. 101, 105, 491 A.2d 169, 172 (1985); Central Transportation v. Board of Assessment Appeals of Cambria County, 490 Pa. 486, 417 A.2d 144 (1980).

(2) In construing an agreement, the court must interpret it as a whole, giving words their ordinary meaning. Pines Plaza Bowling Inc. v. Rossview Inc., 394 Pa. 124, 125, 145 A.2d 672, 676 (1958). Because UNUM does not define the term “processing a claim” (although the policy does contain definitions of other terms), the court must interpret those words giving them their ordinary meanings. Merriam-Webster defines the word “process” as follows:

“a to subject to a special process or treatment (as in the course of manufacture) b (1): to subject to or handle through an established usually routine set of procedures <process insurance claims> (2): to subject to examination or analysis <computers process data> c : to work (hair) into a conk.”

Notably, the term “process insurance claims” is so common, widely accepted and understood, that Merriam-Webster uses it to illustrate appropriate usage of the word “process.” Further, the ordinary meaning of “process” as it is used in that phrase is “to subject or handle through an established usually routine set of procedures. ” (emphasis added) Thus, the court interprets the term “processing a claim” in the context of the policy as referring to the procedural, administrative series of steps UNUM takes as a matter of course in handling claims for benefits, not the variable, substantive, individually tailored steps it may take on a case-by-case basis, such as surveillance of claimants, telephone calls to claimants’ physicians, and research on claimants’ particular medical conditions.

(3) The Pennsylvania Supreme Court has held: “[wjhere the language of a contract is contradictory, obscure, or ambiguous, or where its meaning is doubtful, so that it is susceptible of two constructions, one of which makes it fair, customary, and such as prudent men would naturally execute, while the other makes it inequitable, unusual, or such as reasonable men would not be likely to enter into, the interpretation which makes a rational and probable agreement must be preferred. If one construction would make it unreasonable while another would do justice to both parties, the latter will be adopted.” New Charter Coal Co. v. McKee, 411 Pa. 307, 315, 191 A.2d 830, 834-35 (1963). (citations omitted) (emphasis in original) (footnote omitted) With this principle in mind, the court concludes that an application of plaintiff UNUM’s reading of the policy term requiring the policyholder to compensate UNUM for errors made in “processing a claim” would be inequitable, unusual, and irrational. According to plaintiff’s definition, a policyholder would be responsible for paying UNUM back if, after UNUM deemed the policyholder disabled and disbursed years worth of monthly benefits, UNUM suddenly and unilaterally decided the policyholder was not disabled after all, and that its original determination of disability was erroneous because it has not investigated the disability claim thoroughly enough and/or its employees had not done an adequate job confirming the policyholder’s disability. Such a reading of the policy language would not only create an inequitable result for the policyholder, but also defies logic in that it might, well cause a disincentive for insurers to thoroughly and accurately investigate disability claims. If UNUM had intended for the provision in question to require policyholders to repay benefits for its own lack of thoroughness in investigating claims, it could have easily included language to express such intent. If defendant had known that she might be required to pay UNUM back under these circumstances, she might have sought out a disability insurance policy from a different carrier. In any case, she would have been unlikely to enter into an agreement with UNUM.

(4) Defendant’s reading of the policy language at issue, on the other hand, makes the agreement much more rational and probable and also does justice to both parties. It is highly more likely that the parties both understood an “error in processing a claim” to mean what defendant proposes it means: an administrative or clerical error, such as a benefit check sent in the amount of $15,000 instead of $1,500. Thus, we adopt defendant’s interpretation of the relevant policy language.

VERDICT

And now, October 11,2005, the court enters a verdict for defendant, Leslie A. Carlins, and against plaintiff, UNUM Life Insurance Company of America.


author: CULLEN, J.,

text:
    Lawrence v. Kunkle

      Aaron J. Freiwald, for plaintiff.

      Craig A. Stone, for defendant Kunkle.

      Karen E. Minehan, for defendant Lancaster Regional Medical Center.

      James W. Saxton, for defendant Midstate Orthopedics.
    September 28, 2005
   CULLEN, J.,

The preliminary objections filed by Eíerbert L. Kunkle Jr., M.D. challenge the sufficiency of plaintiff’s claim for punitive damages in Count II of the complaint. For the reasons stated below, the preliminary objections will be overruled.

PROCEDURAL AND FACTUAL BACKGROUND

On April 5, 2005, plaintiff, Robert Lawrence, filed a complaint against Herbert L. Kunkle Jr., M.D., Midstate Orthopedics and Lancaster Regional Medical Center seeking damages for what he alleges was improper medical treatment.

According to the complaint, on July 4,2004, plaintiff was cleaning a window at his home when the glass broke causing a laceration of his right hand. (Complaint, ¶9.) Bleeding severely, plaintiff went to the emergency room at Lancaster Regional Medical Center where he was told by an emergency room physician that he likely had tendon or vascular injuries that would require treatment by a hand specialist. (Id. at ¶¶10-12.) Plaintiff was further informed that he would be prepared for immediate surgery. (Id. at ¶13.)

Defendant was contacted to examine plaintiff and observed an eight to 10-centimeter laceration of the volar radial aspect of plaintiff’s right wrist, exposed tendons and some patch loss of sensation in the first web space of the dorsum. (Id. at ¶¶14-16.)

At the time plaintiff was seen by defendant, plaintiff did not have medical insurance, and defendant was aware of this from his discussion with the emergency room physician. (Id. at ¶¶17-18.) Defendant told plaintiff that plaintiff would have to wait for surgery until he obtained medical insurance. (Id. at ¶19.) Plaintiff’s injury was sutured and wrapped in a dressing, and he was discharged. (Id. at ¶20.) Plaintiff was seen by defendant again on July 14, 2004, at which time plaintiff was placed in a wrist brace and referred to another physician. (Id. 01¶¶21-23.)

Plaintiff alleges that he suffered nerve damage, muscle wasting and various other personal injuries due to defendant’s failure to provide proper treatment and to perform surgery in a timely manner. (Id. at ¶¶ 24-25,27, 30.)

In Count II, plaintiff incorporates his prior allegations and asserts that defendant knew that delaying surgery due to plaintiff’s lack of medical insurance would increase the probability that plaintiff would be left with permanent neurologic and functional deficits, and that plaintiff’s premature discharge from the hospital would subject him to unreasonable and avoidable risk of future injury. (Id. at^36-37.) Plaintiff contends that such conduct on defendant’s part was conscious, deliberate, reckless and outrageous. (Id. at ¶35.)

On June 13, 2005, defendant, Herbert L. Kunkle Jr., M.D., filed preliminary objections to Count II of the complaint captioned “Recklessness” on the ground that the allegations of the complaint are insufficient to support the claim for punitive damages set out in that count. Plaintiff filed a response to the preliminaiy objections on June 30, 2005.

The parties filed briefs in support of their respective positions, and the matter was thereafter referred to the court for resolution.

DISCUSSION

Defendant’s sole objection is that the allegations of the complaint are insufficient to establish a claim for punitive damages.

The law to be applied in ruling on preliminary objections challenging the legal sufficiency of a complaint is clear.

A court should sustain preliminary objections in the nature of a demurrer only where:

“the complaint is insufficient to establish the pleader’s right to relief. . . . For the purpose of testing the legal sufficiency of the challenged pleading a preliminary objection in the nature of a demurrer admits as true all well-pleaded, material, relevant facts,... and every inference fairly deducible from those facts.... The pleader’s conclusions or averments of law are not considered to be admitted as true by a demurrer.

“Since sustaining the demurrer results in a denial of the pleader’s claim or dismissal of his suit, a preliminary obj ection in the nature of a demurrer should be sustained only in cases that clearly and without a doubt fail to state a claim for which relief may be granted.... If the facts as pleaded state a claim for which relief may be granted under any theory of law then there is sufficient doubt to require the preliminary objection in the nature of a demurrer to be rejected.” Willet v. Pennsylvania Medical Catastrophe Loss Fund, 549 Pa. 613, 619, 702 A.2d 850, 853 (1997) (quoting County of Allegheny v. Commonwealth of Pennsylvania, 507 Pa. 360, 372, 490 A.2d 402, 408 (1985)).

When doubt exists as to “whether a demurrer should be sustained, [the] doubt should be resolved in favor of overruling it.” Mahoney v. Furches, 503 Pa. 60, 66, 468 A.2d 458, 462 (1983). (citation omitted)

With respect to the issue of punitive damages, the Supreme Court has recently summarized the law as follows:

“Punitive damages may be awarded for conduct that is outrageous, because of the defendant’s evil motive or his reckless indifference to the rights of others. ... As the name suggests, punitive damages are penal in nature and are proper only in cases where the defendant’s actions are so outrageous as to demonstrate willful, wanton or reckless conduct— The purpose of punitive damages is to punish a tort-feasor for outrageous conduct and to deter him or others like him from similar conduct. . . . Additionally, this court has stressed that, when assessing the propriety of the imposition of punitive damages, [t]he state of mind of the actor is vital. The act, or the failure to act, must be intentional, reckless or malicious.” Hutchison ex rel. Hutchison v. Luddy, 582 Pa. 114, 121-22, 870 A.2d 766, 770 (2005). (citations omitted)

“[A] punitive damages claim must be supported by evidence sufficient to establish that (1) a defendant had a subjective appreciation of the risk of harm to which the plaintiff was exposed and that (2) he acted, or failed to act,... in conscious disregard of that risk.” Id. at 124, 870 A.2d at 772.

Accepting as true the allegations of the complaint, as it must in ruling on the preliminary objections, the court concludes that plaintiff has adequately set forth a claim for punitive damages.

The complaint alleges that when defendant examined plaintiff in the emergency room, he told plaintiff that he would have to wait to have surgery until he obtained medical insurance. Defendant failed to provide appropriate and necessary treatment because of plaintiff’s lack of insurance even though defendant knew that delaying surgery would create the probability that plaintiff would suffer permanent neurologic and functional deficits and that the delay would subj ect plaintiff to unreasonable and avoidable risk of future injury.

If proven at trial, these facts could establish conscious, deliberate and outrageous conduct on defendant’s part and a reckless indifference to his patient’s rights and welfare which could support an award of punitive damages. Accordingly, defendant’s preliminary objections will be overruled.

ORDER

And now, September 28,2005, upon consideration of the preliminary objections of defendant, Herbert L. Kunkle Jr., M.D., and the arguments of counsel, it is ordered that the preliminary objections are overruled.

Defendant is granted 20 days from the date of this order to answer the complaint.


text:
    Commonwealth v. Rudolph

      Marc A. Werlinsky, for appellant.

      Marc I. Rickies, for appellee.
    September 18, 2005
   CEPPARULO,/.,

I. INTRODUCTION

The Pennsylvania Department of Transportation has appealed from this court’s order of July 6,2005, sustaining Timothy Rudolph’s appeal of a one-year suspension based on a violation and conviction in the jurisdiction of New Jersey for driving while intoxicated (DWI). This opinion is filed pursuant to Pennsylvania Rule of Appellate Procedure 1925(a).

II. PROCEDURAL BACKGROUND AND FINDINGS OF FACT

By letter bearing mail date March 10,2004, the Commonwealth of Pennsylvania, Department of Transportation (PennDOT) notified Rudolph that his driving privilege was suspended for one year, effective April 4,2004, as a result of his conviction in New Jersey for DWI. Rudolph was arrested for DWI in New Jersey on August 6, 1988, and was convicted there on January 11, 2005. Rudolph appealed the suspension of his Pennsylvania driver’s license and a hearing was held before this court on July 6,2005. At that hearing PennDOT and Rudolph agreed that the Driver’s License Compact of 1996 (the Compact) was not adopted until December 10, 1996. Using the date of arrest as the operative date for applicability of the Compact, this court issued an order sustaining Rudolph’s appeal since the Compact, under which PennDOT was proposing to suspend Rudolph’s license, was clearly not adopted as of the date of Rudolph’s arrest (August 6, 1988). PennDOT now appeals from that order.

III. ISSUES

PennDOT raises one issue on appeal: whether this court erred by sustaining Rudolph’s appeal and “disregarding” Schrankel v. PennDOT, 562 Pa. 337, 755 A.2d 690 (2000) in determining the relevant date for assessing whether the Compact and Pennsylvania’s subsequent license suspension are valid, concluding instead that the “date of arrest” rule of Lepko v. PennDOT, 873 A.2d 47 (Pa. Commw. 2005) and Woods v. PennDOT, 873 A.2d 55 (Pa. Commw. 2005) controls.

IV. ANALYSIS OF ISSUES

The Driver’s License Compact of 1996, contained in 75 Pa.C.S. §1581 et seq., controls when a Pennsylvania driver is convicted of DUI in another state that has legally joined the Compact. Specifically, article IV of the Compact reads as follows:

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

New Jersey is a party state to the Compact. See N.J.S.A. §39:5D-1 et seq. Thus, a conviction for DWI in New Jersey is to be given “the same effect” as it would have if a DUI had occurred in Pennsylvania for purposes of license suspension.

Pennsylvania’s DUI law was contained in 75 Pa.C.S. §3731 until February 2004. Effective February 1, 2004, 75 Pa.C.S. §3731 was repealed and replaced by 75 Pa.C.S. §3802. 75 Pa.C.S. §3804 addresses the way in which punishment under the new section 3802 is to be implemented. 75 Pa.C.S. §3804(e)(l)(ii) provides that “[t]he department shall suspend the operating privilege of an individual under paragraph (2) upon receiving a certified record of the individual’s conviction of or an adjudication of delinquency for:... (ii) an offense which is substantially similar to an offense enumerated in section 3802 reported to the department under article III of the Compact in section 1581 (relating to Driver’s License Compact).” 75 Pa.C.S. §3804(e)(2) provides that “[suspension under paragraph (1) shall be in accordance with the following:... (iii) There shall be no suspension for an ungraded misdemeanor under section 3802(a) where the person is subject to the penalties provided in subsection (a) and the person has no prior offense.” 75 Pa.C.S. §3804(e)(2)(iv) says that:

“(iv) For suspensions imposed under paragraph (l)(ii), notwithstanding any provision of law or enforcement agreement to the contrary, all of the following apply:
“(A) Suspensions shall be in accordance with subchapter D of chapter 15 (relating to the Driver’s License Compact).
“(B) In calculating the term of a suspension for an offense that is substantially similar to an offense enumerated in section 3802, the department shall presume that if the conduct reported had occurred in this Commonwealth then the person would have been convicted under section 3802(a)(2).”

Act 24 amended 75 Pa.C.S. §1586, which is the section of the Compact providing that out-of-state offenses for DUI are to be treated as substantially similar to the Pennsylvania offense of DUI. The amended section 1586 simply substitutes “3802” for “3731,” as the number of the Pennsylvania statute that contains the DUI offense. The substitution was necessary because, as previously noted, Act 24 repealed 75 Pa.C.S. §3731 and replaced it with 75 Pa.C.S. §3802. Further, section 21(2) of Act 24 provides that “[t]he repeal of... 75 Pa.C.S. §3731 shall not affect offenses committed prior to February 1,2004, or civil or administrative penalties imposed as a result of those offenses.”

In determining whether the Compact applies, and thus whether Rudolph’s New Jersey arrest and conviction should result in the suspension of his Pennsylvania driving privileges, it is necessary first to determine whether the date of his arrest or the date of his conviction should be utilized as the relevant date. Because he was arrested for conduct that occurred years before the adoption of the Compact, and convicted after the DUI law was changed to reflect the adoption of the Compact, the distinction is crucial. PennDOT argues that Lepko, supra, and Woods, supra, deal with different issues than those in the present case, and that the date of conviction is the relevant date for determining whether the Compact applies. However, Lepko and Woods clearly held that the date of the DWI in the foreign state determines the applicability of the Compact’s suspension provision. Because the suspension of Rudolph’s Pennsylvania driving privilege is based on an out-of-state offense and conviction, the suspension would be dictated by the Compact if the Compact was in effect on August 6,1988, the date of the offense. However, by agreement, both parties acknowledge that the Compact’s enactment was on December 10,1996, and there was, therefore, no Compact in effect when Rudolph was arrested. Both Lepko and Woods dictate that the date of conduct is the determinative date for application of the Compact and Rudolph is not, therefore, subject to suspension. A brief review of the facts in Lepko and Woods may help to explicate the reasoning used in the case sub judice.

In Lepko, the appellant was arrested and convicted for DWI in New Jersey. His arrest took place on September 17,2003, and he was subsequently convicted on December 4, 2003. In a letter dated February 3, 2004, Lepko was notified of the suspension of his driving privileges in Pennsylvania. Lepko appealed the suspension arguing that the date of PennDOT’s letter was the operative date and this court issued an order denying his appeal. Lepko in turn appealed the order, arguing that this court improperly applied 75 Pa.C.S. §1581 by refusing to apply the new DUI statute which would not have required a license suspension as it was a first offense. In an opinion that was affirmed and adopted by the Commonwealth Court of Pennsylvania, this court reasoned that allowing the date of a suspension letter or the date of conviction to determine which version of the DUI law to apply would not only be unsupported by the law, but would also produce disparate and unjust results for similarly situated drivers. Using the date of the offense is the only means of ensuring consistent application of license suspensions to out-of-state DUI convictions.

Woods presented a similar situation and this court applied the Lepko standard, maintaining that the date of Woods’ conduct determined the legality of his license suspension. In Woods, the appellant was notified by mail of the suspension of his Pennsylvania driving privileges after he was convicted of DWI in New Jersey. A first-time offender, Woods was arrested inNew Jersey on December 20,2003, and convicted there on March 25,2004. The suspension was based on an out-of-state offense and conviction, and therefore governed by the Compact, which dictated the suspension of his Pennsylvania driving privileges. Woods appealed the suspension, arguing that because his license suspension was not initiated by PennDOT until after the effective date of the new DUI law, his case was governed by the new law and carried no license suspension. This court found, as in Lepko, that the date of the offense determined the applicability of the Compact. Because Woods’ conduct occurred before the law was changed, it is governed by the old law, resulting in a license suspension.

Applying the same date-of-offense rule established in Lepko to the case sub judice, Pennsylvania cannot suspend Rudolph’s driver’s license based on his DWI arrest on August 6,1988. Because the Compact did not exist at the time of the offense, PennDOT was not entitled to suspend his license based on the New Jersey DWI conviction, which occurred 16 years later. Allowing the conviction date to determine the applicability of the Compact invites chaos and potential manipulation of the system. Conviction dates are often within the driver’s control and are, at the least, prone to manipulation. Continuing a case once or twice might result in the application of a new, more favorable law. Consider for instance, if the Compact was in full force and effect in 1988 and was later repealed in 2005. Would PennDOT really contend under that set of facts that Mr Rudolph would not be subject to penalty? As we opined inLepko and Woods, a lawyer representing a first-time DWI defendant in New Jersey shortly before February 2004, would, under the rule of law being propounded herein by PennDOT, potentially be guilty of malpractice if that lawyer did not take every available opportunity to continue the case beyond the start date for the newly enacted Compact provision. The immutability of the incident date results in a fairer, clearer, more predictable application of the Compact and its effect on Pennsylvania drivers.

PennDOT cites Schrankel, supra for the proposition that the Compact is triggered at the date of conviction, which in this case occurred after the Compact’s enactment. However, in Schrankel, the Supreme Court of Pennsylvania said:

“In reviewing the Compact as a whole, it is clear that it requires that the out-of-state authorities report convictions to the licensing state pursuant to article III, and that article IV dictates what effect such conviction will have in the home state. Indeed, the Compact captions article III, ‘Report of Conviction’ and article IV, ‘Effect of Conviction.’ Further, the Compact at article III quite succinctly states that authorities ‘shall report each conviction’ to the home state. It is only after the report of conviction is received in the home state that the authorities, pursuant to article IV, look to the conduct involved to assess what effect that such conduct shall have in the home state.” Id., 562 Pa. at 340, 755 A.2d at 691. (emphasis supplied)

Because the proposed suspension of Rudolph’s Pennsylvania driving privilege was based on an out-of-state offense and conviction, the suspension is governed by the Compact. Article IV of the Compact clearly mandates that Pennsylvania give the same effect to out-of-state conduct as it would if the conduct had occurred in Pennsylvania. See PennDOT v. McCann, 78 Bucks Cty. L.Rep., 274 (April 14, 2005). The relevant conduct in Rudolph’s case was driving under the influence in New Jersey on August 6, 1988. If the Compact were enacted on that date, we would be obligated, for purposes of suspending Rudolph’s driver’s license, to treat the situation as though Rudolph had been arrested for driving under the influence in Pennsylvania on August 6, 1988, and subsequently convicted of DUI in Pennsylvania on January 11, 2005. Had Rudolph been arrested and convicted in Pennsylvania, section 21 of Act 24 would preserve PennDOT’s ability to suspend his driver’s license under the old law, 75 Pa.C.S. §3731.

As is obvious from the above discussion, the only way Pennsylvania may suspend a Pennsylvania driver’s license for conduct that occurs out-of-state is by application of the Compact. Without a Compact in place, not only would Pennsylvania never be officially notified of conduct occurring out-of-state, but even if it were notified, its power to take official action would be non-existent absent the power to suspend granted in the Compact for conduct occurring out-of-state. Using the date of the DWI offense as the applicable date, PennDOT obviously had no authority on August 6, 1988, to suspend a Pennsylvania driver’s license issued to a Pennsylvania resident when that resident engaged in out-of-state conduct which was similar to conduct which in Pennsylvania would have resulted in a suspension. While that Pennsylvania driver would, upon conviction, lose driving privileges in the state where the offensive conduct occurred, that was the only penalty legally permissible until passage of the Compact. Since there is no dispute that the Compact became effective on December 10, 1996, there should also be no dispute with a holding that PennDOT had no authority to suspend a Pennsylvania driver’s license for conduct occurring out-of-state on August 6,1988.

As we reasoned in McCann, supra, using the date of the DUI offense as the applicable date is the only means of ensuring consistent application of license supervision to out-of-state DUI convictions, and because the statutory language in Pennsylvania supports using the date of conduct as the applicable date, Rudolph is subject to Pennsylvania law as it stood on August 6,1988. The law in effect at that time, or the absence of it, mandates that PennDOT is without authority to suspend Rudolph’s Pennsylvania driver’s license today.

V. CONCLUSION OF LAW

The foregoing represents the reasons for this court’s order of July 6, 2005.

      . On appeal, PennDOT asserts four issues; (1) that this court erred in sustaining Rudolph’s appeal where PennDOT met its burden of proof and Rudolph failed to raise a “cognizable defense,” (2) that this court erroneously disregarded Schrankel, supra, which PennDOT asserts stands for the proposition that the Compact “is properly applied where a Pennsylvania licensee is convicted after that Compact’s enactment of an offense that occurred before the Compact’s effective date,” (3) that this court erred in concluding that Lepko, supra and Woods, supra control. PennDOT asserts that those decisions are “inapplicable to the circumstances pertaining to Rudolph’s suspension,” (4) finally, PennDOT requests the opportunity to argue “any other issue” that may be raised by this court. See statement of matters complained of on appeal, paras. 1-4. These issues are consolidated above for convenience.

      . This court authored the trial court opinions in both Lepko and Woods. Each case dealt with the same issue of first impression, which was the operative date in the foreign state for applicability of the Compact. PennDOT argued, in each case, that it was not the date of the conviction but was, instead, the date of the offending conduct in New Jersey.


author: KOPRIVA, J,

text:
    Newton v. M&B Lumber Inc.

      Suzanne Bigelow-Cherry, for plaintiffs.

      Ronald P Carnevali Jr., for defendants.

      August 18, 2005
   KOPRIVA, J,

PROCEDURAL HISTORY

Plaintiffs commenced this action by filing a writ of summons April 1, 2004. A complaint followed on July 2, 2004. Defendants filed their answer and new matter July 27, 2004, followed by plaintiffs’ reply to new matter August 12,2004. Defendants filed amotion for summary judgment, May 3,2005, along with their brief, followed by plaintiffs’ supporting documents relative to summary judgment filed May 24, 2005. Plaintiff filed his opposition brief May 25, 2005. We now proceed to disposition.

FACTUAL HISTORY

Plaintiff-decedent worked as a truck driver and provided additional labor to M&B Lumber’s sawmill. The tractor-trailer truck driven by plaintiff-decedent was owned, titled and insured in his name. He went to the sawmill to work on his truck on April 5,2003. That same day, he attempted to clear a logjam in a chipper machine within the sawmill. Defendant Warren Leland Walk Jr. observed plaintiff-decedent striking a stuck log with another log in an attempt to clear the jam. He advised plaintiff-decedent to stop. Walk turned off the chipper machine and attempted to remove the lid which weighs approximately 60 pounds, composed of one-quarter inch steel. The lid slipped from his hands, struck plaintiff-decedent in the head, causing fatal injuries.

As a result of this incident, defendant submitted an employer’s report of occupational injury or disease to the workers’ compensation insurance carrier, the State Workers’ Insurance Fund (SWIF). Pursuant to a notice of workers’ compensation denial May 8, 2003, SWIF denied workers’ compensation benefits. Plaintiff-decedent’s personal representatives did not contest the denial of his workers’ compensation benefits.

DISCUSSION

The filing of a motion for summary judgment is governed by Pennsylvania Rule of Civil Procedure 1035.2 as follows:

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

The party who brings the motion has the burden of proving that no genuine issues of fact exist. All doubts as to the existence of a genuine issue of material fact are to be resolved against the granting of summary judgment. Penn Center House Inc. v. Hoffman, 520 Pa. 171, 176, 553 A.2d 900, 903 (1989). The ultimate inquiry in deciding a motion for summary judgment is whether the admissible evidence in the record, when considered in the light most favorable to the non-moving party, fails to establish a prima facie case. Liles v. Balmer, 389 Pa. Super. 451, 454, 567 A.2d 691, 692 (1989). In deciding whether a prima facie case is established, the court must resolve all doubts against the moving party. Hayward v. Medical Center of Beaver County, 530 Pa. 320, 324, 608 A.2d 1040, 1042 (1992).

An entry of summary judgment may be granted only in cases where the right is clear and free of doubt. Musser v. Vilsmeier Auction Co. Inc., 522 Pa. 367, 370, 562 A.2d 279, 280 (1989). The non-moving party must demonstrate that there is a genuine issue for trial and may not rest on averments in its pleadings. Davis v. Resources for Human Development Inc., 770 A.2d 353, 357 (Pa. Super. 2001). It is the court’s function in a summary judgment to determine only if there is a genuine issue of material fact — not to determine the facts. Washington Federal Savings and Loan Association v. Stein, 357 Pa. Super. 286, 289, 515 A.2d 980, 981 (1986).

Workers ’ Compensation Act/ Independent Contractor

Defendant argues that plaintiff-decedent was on his employers’ premises and engaged in the furtherance of this employers’ business at the time of his death. Therefore, they reason, plaintiff-decedent and his legal representatives, heirs, and assigns are subject to the exclusive remedy provisions of the Workers’ Compensation Act and cannot recover against defendant in a civil action.

Plaintiff claims that defendant’s argument assumes that the decedent was an “employee.” Plaintiff maintains that the decedent was not an “employee” but an “independent contractor” truck driver.

To decide whether summary judgment is appropriate we must first look to whether plaintiff-decedent was an employee or independent contractor.

Whether a person is an employee or an independent contractor is a question of law. Sarver Towing (Wausau Insurance Co.) v. W.C.A.B. (Bowser), 736 A.2d 61 (Pa. Commw. 1999). One who is an “independent contractor” is not an employee within the meaning of the definition of “employee” in the Workers’ Compensation Act. Id. “Independent contractor” is not defined in the Workers’ Compensation Act, therefore the courts of this Commonwealth have applied the following test to determine if one qualifies as an independent contractor:

“In determining whether a relationship is one of employee-employer or independent contractor, certain factors will be considered which, while not controlling, serve as general guidance to the court. These factors include: the control of the manner that work is to be done; responsibility for result only; terms of agreement between the parties; the nature of the work or occupation; the skill required for performance; whether one employed is engaged in a distinct occupation or business; which party supplies the tools; whether payment is by the time or by the job; whether the work is part of the regular business of the employer, and the right to terminate the employment at any time.

“Lynch v. W.C.A.B. [(Connellsville Area School District)], 123 Pa. Commw. 299, [302,] 554 A.2d 159, 160 (1989)____Paramount for our consideration among these factors is the right of an individual to control the manner that another’s work is to be accomplished. Id., 554 A.2d at 160 . . . .” Cited in Morin v. Brassington, 871 A.2d 844, 850 (Pa. Super. 2005).

Characteristic of an employee relationship is the master controlling not only the result, but the way in which work is done, whereas in an independent contractor relationship the person engaged in work has exclusive control over the manner of performance and is responsible only for the results. Rodgers v. P-G Publishing Co., 194 Pa. Super. 207, 166 A.2d 544 (1960).

Co-defendant Walk’s deposition states (1) plaintiff-decedent never had a set schedule (he worked at his own pace to get 40 hours per week), (2) he had the liberty to work when he wanted, (3) he never turned in log books (unlike the other workers), (4) if plaintiff-decedent only had 20 hours of driving and that was all he wanted to do for a week, that was all he was required to do, (5) Walk never discussed what his job responsibilities were: “Brad just did what he wanted to do,” (6) plaintiff-decedent made a list of what he did and the hours he worked (other employees had time cards), and (7) plaintiff-decedent was paid mostly by the load he delivered.

Based upon Walk’s deposition, this court finds that plaintiff-decedent operated as an independent contractor and had exclusive control over the manner of performance of his tasks and was responsible and paid only for his results. We find no genuine issue of fact regarding the status of plaintiff-decedent’s work relationship with defendants.

Since plaintiff-decedent acted as an independent contractor, his legal representatives, heirs, and assigns are not subject to the exclusive remedy provisions of the Workers’ Compensation Act and can attempt to recover against defendant in a civil action.

Accordingly, we enter the following:

ORDER

And now, August 18, 2005, it is hereby ordered, directed and decreed:

(1) Defendant’s motion for summary judgment is denied and dismissed.

(2) Bradley Gross was an independent contractor at the time of his death, his death is not covered by the Workers’ Compensation Act, and defendant is precluded from asserting that he was an employee at trial.

(3) A status conference is set for Wednesday, September 21, 2005, at 3:30 p.m.

      . There is some discrepancy as to whether the machine was completely stopped or was still winding down when the lid was removed.

      . 77 Pa.C.S. §481.