Pennsylvania Litigation Blog : Pennsylvania Litigation Lawyer & Attorney : Barley Snyder Law Firm : Serving Lancaster, Reading, York, Chambersburg

By Order and Opinion dated November 16, 2006, Judge Stephen Linebaugh of the York County Court of Common Pleas, in the case of Sprague v. Long and Foster Real Estate, Inc., Civil Docket No. 2005-SU-3028-Y01, held in favor of Defendants, transferring this real estate dispute from York to Lancaster County, the county in which the real property is located.

Plaintiff sued Defendants who include the home sellers, the home inspection company as well as Long & Foster Real Estate, Inc., which has offices located in both York and Lancaster Counties. This is a real estate disclosure action that also includes allegations of misrepresentation and claims under the Pennsylvania Unfair Trade Practices and Consumer Protection Law. Plaintiff sought, amongst other things, rescission of the contract.

Plaintiff argued that venue was appropriate in York County because Long & Foster has three offices located in York, although none of those particular offices were involved in the litigation. Certain Defendants filed preliminary objections on the basis of improper venue.

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In 2006, the Superior Court of Pennsylvania and the Commonwealth Court of Pennsylvania issued decisions that may dramatically effect an injured party’s right to now recover economic (only) loss damages from “facility owners” in receipt of notices through Pennsylvania’s One Call Act and their failures to properly comply with the Act, and, “other professionals,” that are “in the business of supplying information” that provide false or inaccurate information when acting in compliance with the Act. The theory of recovery may differ between facility owner and a party that is a provider of information largely depending upon the status of the injured party and privity of contract or agreement, although the end result is the same--i.e., an aggrieved party may now be permitted to seek recovery for losses that are  purely economic that might otherwise have previously been precluded pursuant to the economic loss doctrine. 

The law, however, is far from settled. In fact, re-argument has been granted in that matter decided by Superior Court, now withdrawn and awaiting decision. Nevertheless, the cases are interesting from the standpoint of demonstrating both the courts trend of perhaps expanding the scope of recoverable economic damages, generally, where the actions sound in tort rather than contract law where privity of contract can not be established and more directly relating to actions maintained pursuant to the One Call Act. 

In the matter Excavation Technologies, Inc. v. Columbia Gas Company of Pennsylvania, (Pa. Super 2006)(re-argument granted - awaiting decision), the Superior Court permitted an excavator to seek recovery from a facility owner, and in this case, a utility company, for economic loss damages where a utility company allegedly marked several lines improperly, and, in some instances not at all. The utility company argued the excavator was precluded from maintaining an action because all of the damages were economic only and sounded only in tort, thus, were precluded pursuant to the economic loss doctrine where no privity of contract could be established. 

In its original holding, the Superior Court, relying upon Bilt-Rite Contractors, Inc. The Architectural Studio, 581 Pa. 454, 866 A.2d 270 (2005), reasoned that where information is negligently supplied by one in the business of supplying information, such as an architect, design professional, or in the instant action, a utility company, and where it is foreseeable that the information supplied will be relied upon by third persons, even absent privity of contract, a party may be held accountable for their consequences of a negligent failure to perform services in a competent fashion. The Court indicated that a duty exists to provide information accurately because parties justifiably rely upon information received from services required and provided pursuant to the One Call Act, and in fact, it is in the public’s interest for reporting companies to report accurately, the Court held that companies required to comply with the One Call Act are subject to negligent misrepresentation claims. 

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Most people think, mistakenly, that “joint bank accounts” held with others creates equal ownership interests of funds deposited within the accounts. As a result, most people think, mistakenly, that they possess equal rights to the use of funds within the accounts. As a practical matter, one party’s misuse of funds most frequently does not result in litigation because: folks willing to create joint accounts with others typically open joint or multi-party accounts because of a close relationship built on trust and even where one party may abuse that trust, there may often be reluctance to bring a legal action because of the relationship. 

There are, however, a myriad of scenarios that would give rise to one aggrieved party’s desire to bring a legal action to recover monies used improperly from the account by another ranging from the amount of money at issue, a falling out of the relationship, use of money in manner not contemplated by the parties, i.e., money earmarked for the present or future care of a loved one but used for another’s personal gain--and the list goes on and on. 

When a legal action is instituted to recover monies improperly used from a joint account, Pennsylvania’s Multiple Party Account Act, 20 Pa.C.S. § 6301 et seq., provides the answers to important questions, and the most important question of all, who does the money really belong to? The Multiple-Party Account Act provides that: “A joint account belongs, during the lifetime of all parties, to the parties in proportion to the net contributions by each to the sum of the deposit, unless there is clear and convincing evidence of a different intent.”

The answer to the $64,000 question of “who’s money is it” is, simply provided by the Act--each party, in the amounts of their contribution to the account, over the life-time of the account. So, just because a party can use the money in a joint account, remember, they may not be able to.  

    

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The U.S. Court of Appeals for the Third Circuit recently issued a decision that draws a line in the sand for purposes of the First Amendment.   Montanye v. Wissahickon School District, 2007 WL 541710 (3d Cir. Feb. 22, 2007).  The court makes clear that the First Amendment does not cloak all conduct with protection.  Not every action is constitutionally protected just because someone intends to express an idea.  An effort to convey a particular message must be proven and the likelihood that others would understand the message must be great.

Montanye was a ninth-grade teacher who was concerned about the mental health of one of her students.  When the student expressed suicidal thoughts, Montanye shared her concern with the student's mother and even attended some therapist sessions with the student (with the permission of the student and her mother because the student would only go if her teacher accompanied her).

The school district, upon learning about this, was worried about the propriety of the Montanye's interactions with the student.  After a hearing, it issued a letter, which the teacher said was a "constructive discharge letter."  Among other things, it instructed Montanye that, if she "engages in any conduct outside the school or outside her status of a teacher with any student or parent, she is to notify the school and advise the parent that she is doing so strictly in her personal capacity."

Montanye filed a lawsuit, claiming that her right to expressive conduct under the First Amendment was violated and that the federal Rehabilitation Act was violated.  She alleged that what she did amounted to protected speech and that the school wanted to chill her speech and punish her for assisting special education students.

The federal trial court dismissed her claims, and the appellate federal court affirmed.  Both claims were dismissed for the same reason.  That is, while Montanye's actions might have involved a "kernel of expression", her actions in assisting the student were not "expressive or communicative."   Montanye argued that her speech and conduct was constitutionally protected because it concerned a matter of great public importance in that she was helping the student achieve a healthy life and giving her educational and emotional support.  But the court rejected the argument, explaining that it was insufficient to convey a particularized message or to be understood as conveying such a message.

This case is a victory for schools (and employers, generally), which might have some trepidation about taking action they believe to be best for fear of treading upon First Amendment rights.  However, practically speaking, how it will play out in the halls of our schools remains to be seen.

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The race to the courthouse can be a defining moment. 

In Shon v. Karason, 2007 WL 901763 (Pa. Super. Mar. 27, 2007), a patient filed a medical malpractice claim against his podiatrist and the podiatrist's employer.  When a certificate of merit was not filed against the health-care providers within the timeframe required by the Pennsylvania Rules of Civil Procedure, the providers filed a praecipe for entry of judgment of non pros.  The praecipe was filed at 1:26p.m. on July 11, 2007.  At 3:39p.m. (2 hours and 13 minutes later), the plaintiff filed a certificate of merit as to the podiatrist.  Judgment of non pros was entered by the prothonotary upon the praecipe, but the prothy did not docket the praecipe until the next day, July 12.  This effectively put the plaintiff out of court at the trial level because the trial court denied the plaintiff's request to open the judgment.

The case went up on appeal to the Superior Court of Pennsylvania.  One of the arguments that the plaintiff made was that his certificate was timely because it was filed the day before the prothy docketed the praecipe.  The court rejected the argument, as the trial court also did.  It explained that  the prothy has no choice but to enter judgment upon a praecipe that is filed before a certificate of merit is filed (or a motion for more time to file a certificate).  Therefore, the pertinent time is when the praecipe was filed, not when the praecipe was docketed.

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The Department of Environmental Protection provided two new guidance documents to assist in the implementation of the Chesapeake Bay Tributary Strategy.  The following is a link to DEP's website which has links to the two new policies:  http://www.depweb.state.pa.us/chesapeake/cwp/view.asp?a=3&Q=442886&chesa

The first new policy relates to DEP's implementation plan for sewage facilities planning.  The plan for sewage facilities planning is significant in that it directs municipal governments and permittees to design for compliance with new cap loads for nitrogen and phosphorus as well as zero net load increases beyond the current design flow of existing systems.   Facilities will need to perform an alternatives analysis for all alternatives identified in  sewage facilties planning for compliance with applicable water quality standards, including the NPDES permit limits to be placed in NPDES permits issued within the Bay watershed going forward.  This requirement will apply to existing base plans as well as new land development plans.  The policy does not spell out the terms by which existing POTWs should handle the long term requirement for the purchase of credits, which together with the limited number of credits currently availibility, causes some concerns about the adequacy of planning and potential problems with compliance.  The policy also sets out new information regarding the credits to be obtained by retiring existing on-lot systems.  The Department also forshadowed the possibility of regulating the TP and TN loadings from on-lot systems which are currently exempt under the existing policy.

The second new policy relates to NPDES permitting, it breaks down the five phase implementation schedule DEP has adopted.  This first phase is already underway.  Phase 1 addressess the largest 168 treatment plants located in the Bay watershed.  The compliance deadline for these facilities is 10/1/2010, though the Department has indicated in the policy that it intends to negotiate Consent Order and Agreements with faclities that can not meet that deadline, however, the plan is to wait until non-compliance occurs, rather than address the issue at the permitting stage.  Clearly there are real risks associated with this approach from the perspective of the permittees.  Each of the next four phases address increasingly smaller facilities and extends the compliance deadline through 10/1/2013.

Barley Snyder has assisted its clients in negotiating one of the first nutrient trades to be approved by the DEP and has also represented two clients in appeals to the Environmental Hearing Board relating to DEP's December 20, 2006 directive to submit plans for compliance with DEP's proposed effluent loads, as addressed in correspondence from the Department and the draft NPDES permits which were issued in January 2007.  The December 20 letters directed the 168 largest facilities to submit plans for compliance with the new cap loads within 180 days of the date of the letters.  Those plans are due in late June.  

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In Pennsylvania, we elect our judges.  Necessarily, then, persons who would be judges must mount electoral campaigns.  The content of such campaigns, however, is not entirely up to the person running for office.  Persons running for judicial office are bound by a judicial code of ethics promulgated by the Pennsylvania Supreme Court.  Canon 7(B)(1)(c) of the Code of Judicial Conduct states that candidates for judicial office:

should not make pledges or promises of conduct in office other than the faithful and impartial performance of the duties of the office; [or] make statements that commit or appear to commit the candidate with respect to cases, controversies or issues that are likely to come before the court[.]

Canon 7 seeks to balance several interests, including the electorate's right to know where a candidate stands on any given issue, a candidate's right to communicate his or her views to the electorate, and the institutional integrity of the judicial system.  Does Canon 7 provide judicial candiates with sufficient guidance?  When the standard is whether a statement might "appear to commit the candidate" with respect to an issue likely to come before the court, I'd say the guidance is minimal -- any statement at all could be said to "appear to commit the candidate" on some issue or another.

Apparently, I am not alone in finding Canon 7 to be a bit ambiguous.  According to Peter Jackson at centredaily.com, the Pennsylvania Family Institute was interested in hearing the views of judicial candidates and, to that end, mailed a questionnaire to 120 judicial candidates across the state:

Only 19 people responded.  And many of them declined to answer individual questions, indicating they they were concerned about violating ethical rules, especially if they became a judge and failed to step down from a case involving an issue on which they had spoken out.

Obviously, the case of the PFI questionnaire provides only anecdotal evidence, but, for what it is worth, that evidence suggests that judicial candidates may not find Canon 7 to be perfectly clear regarding the extent to which they may communicate with the public on issues of substance.  In any event, we need not rely on anecdotal evidence -- the PFI, along with six judicial candidates in Lancaster County, have sued the Judicial Conduct Board and staff attorneys for the Disciplinary Board alleging that Canon 7 amounts to an unlawful abridgement of candidates' First Amendment rights.

The Judicial Conduct Board briefly responded to the suit:

Joseph A. Massa Jr., chief counsel for the Judicial Conduct Board, said the rules clearly let judicial candidates take public stands on political issues. For example, they may declare that they oppose abortion or support the death penalty, he said.

"But they can't say that, in any case that comes before (them), regardless of the evidence ... that they will (rule) in a preordained manner," Massa said.

Maybe it's just me, but Massa's example seems just plain wrong under Canon 7.  If a judicial candidate publicly states opposition to abortion, does Massa really believe that the statement might not "appear to commit the candidate" on the issue of abortion?  In any event, Massa's example -- which was intended as an example of political speech "clearly" permitted under the Code -- aptly illustrates the ambiguity confronting judicial candidates in Pennsylvania.  Now, a federal court will determine whether that ambiguity unconstitutionally burdens a judicial candidate's First Amendment rights.

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TEDCO Construction Company was hired to do construction work at a site across the street from St. Paul Cathedral in Pittsburgh.  During the course of construction, TEDCO's pile driver allegedly caused structural damage to buildings on St. Paul's property, which were insured by Church Mutual Insurance Company.  St. Paul's notified Church Mutual of the damage and Church Mutual retained engineering firm WJE to inspect the properties and prepare a report. 

In litigation between St. Paul's, TEDCO and other defendants, one defendant sought production of WJE's report.  Church Mutual resisted production on the grounds that the report constituted work product of a non-testifying expert, which is not discoverable under Rule 4003.5(a)(3).  The defendant moved to compel on the basis that Rule 4003.5(a)(3)  protects the work product of a non-testifying expert only to the extent the expert has been retained "by another party" to the litigation.  Because Church Mutual was not a "party" to the case, defendant reasoned, the rule was inapplicable.  Church Mutual responded that, although it was not a party, the expert's work product should be shielded because Church Mutual functioned as "a representative of plaintiff, employing an expert on plaintiff's behalf for purposes of litigation which plaintiff was expected to commence against third parties." 

The court rejected Church Mutual's agency argument based on its conclusion that Church Mutual's interests "do not necessarily coincide with plaintiff's interests because of the possibility of a dispute between plaintiff and Church as to what is covered by insurance and the amount of money the insurance company should pay."  The court expressly noted that the case before it was "very different" than a case in which an insurer assumes responsibility for claims brought by or against its insured.

Bottom Line:  In cases where an insurer does not formally assume responsibility for litigating claims, an insured cannot treat expert reports prepared for the insurer as though they were prepared for the insured.  Although the court in TEDCO noted that there was a coverage dispute between St. Paul's and Church Mutual, it is not entirely clear whether -- or why -- the absence of such a dispute would alter the result.  Rule 4003.5(a)(3) protects the reports of non-testifying experts only when prepared for a party and the existence of a coverage dispute between an insured and its insurer does not strike me as determinative of whether the insurer is a party to litigation.  I suppose Church Mutual's agency theory would be strengthened in the absence of a coverage dispute, but it is far from clear that even a strengthened agency argument would be sufficient to render Church a party for purposes of the Rule.  The better practice is to assume that reports prepared by an insurer will be discoverable in an action involving the insured absent a formal assumption of responsibility for defending or prosecuting the claims at issue.

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Willis W. Berry, Jr. is a judge of the Court of Common Pleas for Philadelphia.  Judge Berry is running for a seat on your state Supreme Court.  So are Emanuel F. Wiggins-Hughes and Milford Pedigree Jenkins II, but you won't find their names listed on the ballot -- they are aliases adopted by Berry when he purchased certain apartment properties in Philadelphia.  Why aliases?  Well, Berry explains that he "put the properties in other names because he wanted to hide his assets in case he was sued." And that's just the tip of this iceberg.  Philly.com reports:

Using the phony names, Berry paid $14,500 for a building on West Venango Avenue, $3,000 for a run-down rowhouse on North 15th Street, and $1,500 for a dilapidated building on North Stiles Avenue.

Berry said he considered his transactions "straw" purchases. He said he had bought the properties while a struggling lawyer in private practice.

"I didn't have no malpractice insurance," he said. "Nobody sued me for nothing, [but] I was in private practice. We got by by the skin of our teeth."

Phillips said Berry's instinct was understandable but his method misguided.

While straw transactions are common, she said, "the problem is that the straw party didn't exist."

Okay, perhaps we can forgive Berry Wiggens-Hughes Pedigree Jenkins for concealing his identity.   After all, no one likes to have assets discovered in litigation.  And what of it, anyway.  It's not like he's a slumlord likely to be sued over the condition of his buildings or injuries they might cause.  What's that?  You don't say:

Some of Berry's apartments, where tenants have complained about mice and roaches, have a history of code violations. Others are worse - dilapidated, dangerous eyesores that residents say are a blight on their neighborhoods. Among them:

A four-story apartment building at 1435 Poplar St., which Berry bought from a city agency, promising to fix it up. Fourteen years later, it sits empty and crumbling, with pigeons roosting in its rafters and a pile of trash where its front steps used to be. After questions from The Inquirer, the city recently declared the building "imminently dangerous."

At Erie and Sydenham, mice dart about inside an empty rowhouse. Boards and plastic tarps cover some of its windows. The yard - used as a stash by drug dealers, neighbors say - is littered with debris, shards of glass, and a soiled diaper thrown against a fence.

On North 15th Street, a hollowed-out building owned by Berry sticks out in a row of freshly renovated homes. Its splintered front door is held in place with a chain threaded through a hole where the doorknob should be.

Neighbors weary of living beside the squalor of Berry's buildings say he has ignored their complaints.

Well, at least Judge Berry Wiggens-Hughes Pedigree Jenkins is an ethical slumlord.  What?  Uh-oh:

For years, Philadelphia Common Pleas Court Judge Willis W. Berry Jr. has been using his judicial office and staff to help run his real estate business, according to interviews and copies of the judge's correspondence.

A leading expert on legal ethics - who happens to be an adviser to Berry's campaign for state Supreme Court - says that's wrong.

"Oh, boy," lawyer Samuel C. Stretton said when told of Berry's practices. "You can't do that.

*   *   *

According to records and interviews, Berry has been using his court staff to collect rent, make repairs, and process leases and other paperwork.

And other than that, he'd make a fine Pennsylvania Supreme Court Justice.

Kudos to Nancy Phillips of Philly.com for a terrific series of investigative reports.  Simply brilliant work.  As for Berry Wiggens-Hughes Pedigree Jenkins, one can think of bars somewhat more fitting than that of the state Supreme Court.

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