by Mark Bauman | Mar 20, 2023 | Commercial Litigation & Corporate Law, Legal News
In Zimmerman v. Harrisburg Fudd I, L.P., 2009 Pa.Super. 202 (2009), the Pennsylvania Superior Court, in interpreting the Contractor and Subcontractor Payment Act (CASPA), permitted plaintiff (contractor) to recover post-judgment interest, penalties, attorney’s fees and expenses from collecting the money plaintiff was owed from defendant (owner).
Plaintiff and defendant entered into an agreement requiring plaintiff to install improvements to the wall and floor of a new restaurant being built by defendant. After not being paid for four months after submitting an invoice, plaintiff brought a breach of contract action against defendant. At arbitration, the parties stipulated to an award in favor of plaintiff and against defendant for the amount of the contract claim, plus statutory interest, penalty, and attorney fees as provided for by CASPA. Plaintiff subsequently entered the arbitration award and executed on the judgment. Defendant filed a claim for exemption from the execution which was denied by the trial court. An emergency motion to stay the execution was subsequently filed by defendant and was denied by the trial court. The denial of the emergency motion to stay the execution was denied and appealed to the Superior Court. While on appeal, plaintiff was paid by a garnishee of defendant.
The Superior Court affirmed the trial court’s denial of defendant’s motion for an emergency stay of execution and plaintiff subsequently filed a motion to recover statutory interest from the date of the arbitration award to the date they were paid by garnishee, the statutory penalty under CASPA, attorney fees and expenses incurred in the post-award proceedings. The trial court denied this motion and plaintiff appealed to the Superior Court.
The Superior Court held that the trial court abused its discretion because Section 505 of CASPA mandates that payment of statutory interest be paid and a penalty of 1% per month must be paid if payment is made after twenty days of delivery of the invoice. Additionally, CASPA provides for attorney fees to be paid to the prevailing party in any proceeding to recover any payment under CASPA. The Superior Court held that plaintiff was the prevailing party because the arbitrators awarded plaintiff the entire amount of their claim.
The Superior Court held that plaintiff is entitled to attorney fees and expenses for those attorney fees and expenses incurred during the post-award period during which plaintiff incurred expenses to defend against, inter alia, defendant’s claim for exemption, defendant’s motion for an emergency stay and related appeal, and the instant appeal. It remanded the case to the trial court with instructions to conduct a hearing to determine a reasonable amount of attorney fees and expenses incurred by plaintiff.
by Mark Bauman | Mar 20, 2023 | Legal News, Other News
In a per curiam opinion, the Superior Court of New Jersey, Appellate Division, affirmed the Law Division decision refusing to allocate proceeds following a settlement after a decision from a non-binding arbitration award which specifically allocated funds for medical expenses paid by Medicare.
In Ilse Theresa Jackson v. Hudson Court, LLC, et al., 2010 WL 2090036 (NJ Super. 2010), plaintiff sued several defendants as a result of a trip and fall. In her Complaint, she sought damages for permanent bodily injury and disability, pain and suffering, emotional distress and economic losses, including medical expenses paid by Medicare. The case was referred to nonbinding arbitration wherein the arbitrator awarded plaintiff $85,000. Of that award, the arbitrator specifically earmarked $30,000 as funds in satisfaction of the Medicare lien. Thereafter, the case settled for $85,000; however, plaintiff sought a court ordered allocation of the settlement proceeds and specifically requested that no portion of her personal injury settlement be attributable to her medical expenses. The Law Division denied plaintiff’s request and plaintiff appealed.
In her appeal, plaintiff argued that the collateral source rule (N.J.S.A. 2A:15-97) bars recovery by Medicare beneficiaries of medical expenses. She interpreted the statute to prohibit recovery of any benefits paid by a “source other than a joint tortfeasor.” Thus, she argued that “no plaintiff should be obligated to reimburse Medicare-covered expenses from money recovered as a result of a personal injury claim because otherwise Medicare beneficiaries would have to satisfy Medicare liens using funds awarded for pain and suffering, or for lost wages.” The Appellate Division disagreed with plaintiff holding that the collateral source rule does not apply to reimbursable benefits paid by Medicaid, nor Medicare. Citing to, Lusby ex rel. Nichols v. Hitchner, 273 N.J. Super. 578, 590 (App.Div. 1994). The Appellate Division further pointed out that plaintiff’s settlement, as allocated by the arbitrator, included a specific amount attributable for medical expenses, and thus, the lien would not unjustly be satisfied from her non-economic award.
by Mark Bauman | Mar 19, 2023 | Commercial Litigation & Corporate Law, Legal News
In The Herrick Group & Associates, LLC v. K.J.T., L.P., Civil Action No. 07-CV-00628, U.S. Magistrate Judge Timothy R. Rice held that defendant (seller) did not prove the existence of an oral agreement to modify a written agreement of sale with plaintiff (purchaser).
In this action, during a four-day trial, evidence was presented regarding which party was responsible for a failed real estate transaction involving the sale of Washington Towers, a $6.5 million dollar commercial property in the business district of Reading, Pennsylvania.
Plaintiff alleged that defendant attempted to conceal the loss of the building’s commercial tenants and also failed to secure plaintiff’s oral agreement to address the loss of rental income plaintiff planned to receive as part of its purchase. Defendant countered that there was an oral modification to the agreement of sale which guaranteed lease payments from two commercial tenants who had prematurely terminated their leasehold prior to closing. Defendant sought the forfeit of plaintiff’s $325,000 deposit and liquidated damages.
In entering judgment for plaintiff, the Court set forth the law requiring that an oral contract modifying a prior written contract prohibiting non-written modifications must be proved by clear, precise, and convincing evidence. Brinich v. Jencka, 757 A.2d 388, 399 (Pa.Super. 2000). The Court reasoned that defendant failed to meet this burden and noted that all prior modifications to the agreement of sale were in writing, and it also indicated that correspondence between the parties revealed that the guaranteed lease payments were one of several options which were the subject of negotiations for which the parties never came to a final agreement. Thus plaintiff was entitled to a return of their $325,000 deposit.
by Mark Bauman | Mar 19, 2023 | Legal News, Other News
On July 22, 2008, U.S. District Judge James M. Munley of the Middle District of Pennsylvania issued an opinion in Grosek v. Pather Transportation, Inc. requiring the Defendant to produce documents related to punitive damages in the discovery phase of litigation before a determination was made that punitive damages are warranted.
In Grosek, The Defendants sought a Protective Order pursuant to Federal Rule of Civil Procedure 26(c) which would have prevented Plaintiff from conducting any discovery on the Plaintiffs’ financial condition until a jury concluded that punitive damages are warranted in the case. Defendants also argued that their financial condition cannot be relevant until a determination has been made that punitive damages are appropriate.
In declining to issue the Protective Order, the Court reasoned that “Defendants have demonstrated no prejudice which would occur from allowing discovery” and also noted that “the weight of authority requires a Defendant to disclose his financial condition in pretrial discovery when punitive damages are required.” The Court distinguished those cases cited by Defendants on the basis that they stand for the proposition that discovery is not permitted in determining whether a defendant has the means to satisfy a judgment. The Court also directed the parties to enter into a confidentiality agreement which would protect the disclosure of the financial condition of Defendants.
by Mark Bauman | Mar 18, 2023 | Commercial Litigation & Corporate Law, Legal News
In TCPF Limited Partnership v. Skatell, 2009 Pa.Super. 112 (2009) the Pennsylvania Superior Court held that when a commercial landlord confesses judgment for the “entire unexpired balance of the Term of Lease”, but the landlord miscalculates the amount due and thus requests less than the full unexpired balance, the landlord may not attempt to amend his complaint to recover the full amount.
A confession of judgment is an arrangement in which a debtor agrees in advance to allow judgment to be entered against him in favor of his creditor without litigation for money which the debtor owes. A warrant of attorney is the writing in which a debtor allows his attorney to confess judgment on his behalf.
In Skatell, two officers of an incorporated entity which owned a Quiznos sandwich shop signed an individual guaranty in which they pledged the full and prompt payment of all rent. As the Court opinion states, “The guaranty contained a warrant of attorney and confession of judgment provision enabling” the landlord “to bring an action to confess judgment against Altmiller and Skatell for all or any sums due.” Furthermore, the guaranty “contained language allowing for the successive exercises of the warrant of attorney until all obligations of Altmiller and Skatell under the lease had been discharged.” In June 2006, the entity that owned the sandwich shop defaulted on its obligations under the lease.
The landlord invoked the right to accelerate the rent and other charges for the entire unexpired balance of the term of the lease and calculated that amount as $65,196.21. The landlord then sought confession of judgment of that amount and the trial court entered confession of judgment. Shortly after this entry of judgment, the landlord “discovered that it had calculated only a portion of the unexpired balance of the term of the lease, from June of 2006 through September of 2007, and not the entire lease term.” In August of 2007, the Landlord requested to amend his complaint in confession of judgment to increase the amount of judgment to $203,420.45, which represented the entire unexpired balance of the term of the lease from June of 2006 through September of 2010. On October 25, 2007, the trial court denied this request.
On appeal, the Landlord argued that Pennsylvania Rule of Civil Procedure 1033 allows for liberal amendments to pleadings. The Superior Court held, however, that under PA case law “an amendment will not be permitted where it is against a positive rule of law.” Capobianchi v. BIC Corp., 446 Pa.Super. 130, 666 A.2d 344, 346 (1995). The positive rule of law the court found here was in B. Lipsitz Co. v. Walker, 361 Pa.Super. 238, 522 A.2d 562, 566 (1987), appeal granted, 515 Pa. 617, 531 A.2d 426 (1987). The Court in that case held that “severable portions of a debt can be sought to be collected with the use of a single warrant of attorney as each become[s] due; provided, of course, the instrument is not used to collect the same portion of the debt already confessed.” The Court therefore did not interpret the portion of the individual guaranty mentioned above “allowing for the successive exercises of the warrant of attorney until all obligations of Altmiller and Skatell under the lease had been discharged” in favor of the landlord where the landlord sought to confess judgment a second time for the same debt. The Court also cited Pennsylvania Rule of Civil Procedure 2953 and 2953(a) in demonstrating that the successive exercises of the warrant of attorney must be for separate sums.
by Mark Bauman | Mar 18, 2023 | Legal News, Other News
The Superior Court of Pennsylvania overturned an order for summary judgment on appeal to the extent that it nullified a reservation of rights clause contained in a release signed by appellant. In Maloney v. Prendergrast, appellant’s suit centered primarily on the treating physician negligently failing to disclose a lesion on the right scapula of the appellant’s decedent from a 1988 x-ray. Appellant executed a joint tortfeasor release with appellees which provided that, in acceptance of an amount of money paid, appellant released appellees from further liability. However, there was a provision regarding the treating physician that reduced his liability based on a pro rata share of legal responsibility or legal liability for which each appellee was found to be liable. Appellees filed for summary judgment asserting that the language of the release operated to insulate them from liability so that all claims against them should be dismissed. The trial court agreed. On appeal, appellant asserted that a reservation of rights provision in the release only discharged the medical facilities from direct liability while preserving issues of vicarious liability against them and that the treating physician was not so insulated.
The court followed the Uniform Contribution Among Tortfeasors ACT (UCATA), 42 Pa.C.S.A § 8326 contract law principles in finding in favor of appellants. Section 8326 of the Act provides that discharge of one joint tortfeasor does not operate to discharge the other(s) unless so specified in the release. The words of the release specifically and comprehensively effectuate the discharge of all listed health care providers save the treating physician by encompassing any and all acts capable of incurring either direct or indirect liability which extinguished all of appellant’s claims against appellees other than that of the treating physician.
The law pertaining to releases is well settled: “it is axiomatic that releases are construed in accordance with traditional principles of contract law, fundamental to which is the directive that, ‘the effect of a release must be determined from the ordinary meaning of its language.'” Clark v. Philadelphia College of Osteopathic Medicine, 693 A.2d 202, 207 (Pa. Super. 1997), appeal dismissed as improvidently granted, 557 Pa. 487, 734 A.2d 859 (Pa. 1999) [**7] (citing Buttermore v. Aliquippa Hosp., 522 Pa. 325, 561 A.2d 733, 735 (Pa. 1989)). Moreover, Pennsylvania contract law prescribes that, “an interpretation will not be given to one part of the contract which will annul another part of it.” Capek v. Devito, 564 Pa. 267, 767 A.2d 1047, 1050 (Pa. 2001). Further, Pennsylvania contract law, recognizing that the intention of the parties is paramount in any interpretive effort, explains that the court should adopt a construction “which under all circumstances ascribes the most reasonable, probable, and natural conduct of the parties, bearing in mind the objects manifestly to be accomplished.” Tuscarora Wayne Mutual Ins. Co. v. Kadlubosky, 2005 PA Super 402, 889 A.2d 557, 563 (Pa. Super. 2005).
Here, the trial court’s interpretation not only annuls a major portion of the Release, but ignores the express objective of the settlement, that is, to limit further litigation while not forestalling it completely. Accordingly, the court vacated the summary judgment order and remanded for further proceedings consistent with the court’s opinion.
