2008 Pa. Super. 297

Decided: December 31, 2008

The Pennsylvania Superior Court holds that an negligent misrepresentation is not an occurrence, and that economic loss is not property damage.

 

Background:  First National Bank claimed that the Maiers participated in a fraud on the Bank. The Bank represented creditors of the Anthonys, secured by a home they owned. The Anthonys sold the home to the Maiers for $650,000, and the Bank agreed to forego its interest in a balance larger than that. The Bank then learned that the Maiers paid the Anthonys $200,000 for “personal property”, which was actually worth much less, in order for the Anthonys to receive some cash. Although “intentional misrepresentation” and “conspiracy” counts were held, by the trial court, as not covered by the Erie homeowners' policies issued to the Maiers, because one count claimed "negligent misrepresentation," the trial court held that the policies should cover the Bank’s lawsuit.

 

Holding: On appeal, the Pennsylvania Superior Court holds that the gist of the action of the Bank’s lawsuit is conspiracy and fraud. While the Anthonys made have had a relationship, and resulting duty, to the Bank, the Maiers could only be held liable for intentional conduct. The Bank’s allegations are that the Maiers affirmatively knew of the incorrect price and intended the Bank to rely upon the misrepresentation to the Bank's detriment. Although these allegations are generally labeled as "negligent misrepresentation," they actually go to specific and intentional actions and results. Therefore, the allegations do not constitute an "occurrence" as required by the policy. Further, the alleged economic loss on the transaction does not constitute "loss of use" of the property, the only damage that could possibly bring this under the coverage of the policies, as “property damage” to tangible property. The only "damage" is the Bank's release of its lien on the property.

 

Any questions regarding this case can be directed to Paul Walker at 717-441-7061 (pwalker@tthlaw.com).

 

____Pa. Cmwlth ___ No. 1039 C.D. 2007 (11-19-08)

 

Kyu Son Yi, Vetenarian, petitioned for review of an adjudication of a State Board of Veterinarian Medicine (Board) revoking his license to practice veterinarian medicine on the basis of malpractice and inadequate patient-record keeping. In rendering the adjudication, the Board rejected the substance of the prosecution’s expert testimony, and instead used their own knowledge as veterinarians to make findings of fact critical to their adjudication. The Commonwealth Court looked at whether in rendering adjudication, an agency’s use of facts not placed on the record but known to the professional members of the agency’s governing board is an appropriate exercise of the agency’s expertise. In rendering its Opinion, the Board acknowledged that since the Board members had expertise in veterinarian medicine, they utilized this expertise to draw conclusions without other expert testimony. The Commonwealth Court found this was improper. It noted that an agency may use its expertise to evaluate evidence, but that such expertise is limited to drawing inferences from the facts of record. An agency may not use its specialized knowledge as a substitute for evidence. An Agency’s administrative expertise does not relieve the agency of the obligation to make factual findings supported by the substantial and legally credible evidence. 

 

Any questions regarding this case can be directed to James J. Dodd-o, (610) 332-7000 (jdoddo@tthlaw.com).

2008 Pa. Super. 280

Decided: December 12, 2008

The Pennsylvania Superior Court holds that consumption of alcohol by a vehicle driver did not take him outside the scope of employment, thus precluding a third party tort suit by another employee passenger. Workers compensation was the exclusive remedy.

 

Background:   Klinger and Kerr sustained injuries in a single car accident in Maryland. The vehicle was owned by Boiler Erection and both were employees. Both had been drinking. All three were Pennsylvania domiciled. Kerr was the passenger, and in addition to filing for workers compensation benefits, filed a third-party tort claim against Klinger and Boiler Erection. A workers compensation referee determined Kerr was acting within the scope of his employment. Klinger withdrew his workers compensation claim before any determination of eligibility was made. Employers was Boiler Erection’s liability insurer and filed a declaratory judgment action. The trial court granted Employers motion (that it did not have a duty to defend or provide coverage to either Klinger or Boiler Erection) only to the extent that the workers compensation exclusion in the policy applied to preclude duplicate recovery of damages paid by workers compensation.   

 

Holding:  On appeal, Kerr argued that as Klinger had been drinking, in violation of company policy, he was outside the scope of employment. The Superior Court found both Kerr and Klinger to have been acting within the scope of employment. Kerr failed to also prove that Klinger's intoxication was the cause in fact of the accident, and that even if proved, it would operate only to preclude recovery of workers' compensation benefits, and would not necessarily take Klinger outside the course and scope of his employment. Kerr's sole remedy for the injuries he sustained is workers' compensation benefits under the Act, and the exclusivity provision of the Act immunizes Klinger from liability. disposes of the coverage issue, since the policy excludes coverage where coverage is available from the insured's workers' compensation carrier.

 

Any questions regarding this case can be directed to Paul Walker at 717-441-7061 (pwalker@tthlaw.com).

 

A-98 September Term 2007

Decided December 23, 2008

 

Holding: A surprisingly large award of $500,000 to a minor plaintiff and her mother did not shock the conscious, and the Appellate Division overstepped its bounds in reevaluating all evidence and reducing the judgment to $50,000.

 

In a personal injury matter stemming from a low-impact car accident, a jury awarded the minor plaintiff and her mother $500,000. The minor plaintiff claimed back injuries, the extent and permanency of which were contested by the defendant's expert. The trial court denied the defendant's request for a new trial, stating that although the verdict was surprising, it did not shock the conscience. Upon appeal, the Appellate Division reduced the award, finding it excessive when compared to settlements and judgments in "thousands of garden-variety lumbar strains and sprains." The Supreme Court granted cert and unanimously determined that the Appellate Division erred in two ways: it failed to evaluate the matter in the light most favorable to the plaintiff, and it overstepped its bounds by weighing the evidence anew and substituting its determination for that of the jury. The original award was reinstated.

 

404 N.J. Super. 82

Decided December 9, 2008

 

Holding: The trial court erred by determining as a matter of law that the plaintiff's injury was permanent where the experts disagreed on that point.

 

In a personal injury matter involving a back injury, experts for the plaintiff and the defendant presented testimony regarding the severity of the injury. The trial court, at the request of the plaintiff's counsel, determined as a matter of law that a herniated disc constituted a permanent injury, based in part on Pardo v. Dominguez, 382 N.J. Super. 489 (App. Div. 2006), where the Appellate Division held that a herniated disc was sufficient to satisfy the verbal threshold for the purposes of summary judgment. Therefore, the jury was not permitted to decide whether the plaintiff had suffered a permanent injury and ultimately returned a verdict in the amount of $250,000. Upon appeal, the Appellate Court reversed and remanded, finding that the trial court read Pardo too broadly, and that whether an alleged injury is permanent is a question of fact for the jury to decide where the parties' experts presented conflicting testimony.

 

If you have any questions, or wish to discuss this case, please contact Joseph F. Kulesa at (610) 332-7009 or jkulesa@tthlaw.com 

 

No. 1707, September Term, 2007, filed December 3, 2008. Opinion by Matricciani, J.

 

Facts:  Passenger was injured on an escalator owned and operated by Washington Metropolitan Area Transit Authority (“WMATA”). Passenger sued WMATA in the Circuit Court for Prince George’s County for negligence. A jury awarded the passenger $51,781.95 for past medical expenses and $300,000.00 for non-economic damages. WMATA filed a motion for judgment notwithstanding the verdict, or alternatively, for a new trial, remittitur, or a conformation of the judgment to the statutory cap pursuant to the Maryland Tort Claims Act, Md. Code (1984, 2004 Repl. Vol., 2008 Supp.), § 12-101 et seq. of the State Government Article (“SG”). Following a hearing on the motion, the Circuit Court granted WMATA’s motion to reduce the verdict but denied its motion otherwise. WMATA appealed the portions of the its motion that the court denied, and the passenger cross-appealed the court’s reduction of her jury award.

 

Held:    Affirmed. As “an instrumentality and agency” of the State under Md. Code (1977, 2008 Repl. Vol.), § 10-204(4) of the Transportation Article, WMATA enjoys limited immunity from suit for proprietary functions it performs under the Maryland Tort Claims Act. SC 12-104(a)(2) of that Act provides that “[t]he liability of the State and its units shall not exceed $200,000 to a single claimant for injuries arising from a single incident or occurrence.” Although the act does not define the term “unit”, the Court of Appeals has used language suggesting that units are indeed agencies. The Circuit Court, therefore, did not err in reducing the passenger’s award.

 

No. 2356, September Term, 2007, filed January 6, 2009. Opinion by Wright, J.

 

Facts: This is a lead based paint claim filed in the Circuit Court for Baltimore City. The Plaintiffs have filed counts for negligence and violation of Maryland’s Consumer Protection Act. At the close of discovery, the Defendant filed a Motion for Summary Judgment, which was granted. At the time the Plaintiffs moved into the property, it was owned by Mildred Thompkins. However, Ms. Thompkins failed to pay taxes on the property and it was purchased at a tax sale by Hard Assets, LLC. The Defendant is a principal with Hard Assets. Hard Assets purchased the tax lien and thereafter obtained title, but did not intend to lease the property nor were they aware that the Plaintiffs lived at the property. However, at a later date, they learned that the Plaintiffs were residing at the property and informed them they needed to vacate. Hard Assets subsequently filed a petition for warrant of restitution and the Plaintiffs were forcibly removed from the property. The Motion for Summary Judgment was based on contentions that Hard Assets did not lease the property to the Plaintiffs; that the Defendant was a member of Hard Assets which was a limited liability company and that he had no knowledge of the alleged tort; and finally, that they could not be held liable for violation of the Consumer Protection Act.

 

Held:    Affirmed. The principal of Hard Assets cannot be held liable under the provisions of Maryland’s limited liability act. The act by its very terms indicates “no member shall be personally liable for the obligations of the limited liability company, whether arising in contract, tort or otherwise, solely by reason of being a member of the limited liability company”. The Defendant cannot be held liable under the CPA, as well. In order to prevail under the CPA, the violation must take place at the time the consumer enters into the lease. Furthermore, the CPA applies to material misstatements and admissions at the inception of the lease, rather than during the term of the lease. At the time the Plaintiff executed the lease for the property, Hard Assets did not own the property. At not time did Hard Assets intend to lease the property to the Plaintiffs, they did not collect rent from the Plaintiffs, and upon learning that they were living there, asked them to leave. Finally, the Defendant cannot be held liable on the negligence claim as there is not evidence that he was an operator of the property as defined by the Baltimore City Housing Code. An operator is any person who has charge, care or control of a building, or part thereof, in which dwelling units or rooming units are let or offered for occupancy. There was no evidence that the Defendant ever intended to rent the property and upon learning that the Plaintiffs were residing there, asked them to move voluntarily, and when they refused to, instituted legal action to remove them from the property.