Defense Digest

Marshall Dennehey Is Happy To Celebrate Our Recent Appellate Victories:

Quinn Construction, Inc. v. RC Dolner LLC, was successfully defended on appeal by Chuck Craven (Philadelphia) in the United States Court of Appeals for the Third Circuit. The case involved a subcontractor's pursuit of payments and penalties from a general contractor under Pennsylvania's Contractor and Subcontractor Payment Act. The principal focus of the appeal was on the subcontractor's claim that it was owed interest in excess of the contract rate and penalties under the Act. During the pendency of the appeal, a settlement was reached to eliminate minor sub-issues. The successful appeal defense strategy pointed out that the trial court's finding that the general contractor was not subject to the attorneys' fees, interest or penalty provisions in the Act because it acted in good faith when it withheld payments for "deficiency items," as the term is defined under the statute, was unassailable and that the subcontractor was not a "substantially" prevailing party, even though it secured a judgment against the general contractor.

Vogt v. Liberty Mutual fire Insurance Co., was successfully prosecuted on appeal by Chuck Craven (Philadelphia) in the Superior Court of Pennsylvania. The appeal involved a multi-pronged attack against a trial court's refusal to grant relief from a judgment which was entered by counsel for an underinsured motorist claimant on an arbitration award in excess of the policy limits. Because the arbitration was meant to resolve the amount of damages inflicted by the tortfeasor and not the amount of the insured's payment from the insurer, the insurer promptly paid its limits after the arbitrators rendered their award. Claimant's attorney, however, proceeded to enter judgment and to pursue payment in excess of the policy limits. When the trial court refused to strike or open the judgment, an appeal was taken to the Superior Court, which was persuaded to grant relief. After reversing the trial court's order denying the insurer's petition to open, the Superior Court sternly rued, "As the Order denying the petition to strike the judgment is reversed, the $ 75,000 judgment for appellee, which is blatantly at odds with appellant's $15,000 liability limit under the UIM insurance coverage, must be vacated as it is a nullity due to the improper service and the court's failure to allow appellant to file an answer to the petition to confirm. Moreover, the Order confirming the arbitration award must be vacated and appellant must then be permitted to file its answer to the petition."

North Pocono School Dist v. EI Associates was successfully handled on appeal by Michael J. Panichelli (Philadelphia). The plaintiff school district sued an architect and contractors for alleged defects in the design and construction of a school building. The school district's claims were dismissed on the basis of a release, which the plaintiff argued was inapplicable because it was executed before the defects in question were discovered. The dismissal of the claims was affirmed on appeal by the Commonwealth Court on the ground that the release contemplated and covered claims that might accrue or be discovered in the future.

Quinn v. Wyoming Valley Hospital – Health Care System was successfully handled on appeal by John J. Hare (Philadelphia). This case involved, among other things, the question of whether the trial court erred in charging the jury on "substantial factor" causation rather than on "factual cause." The plaintiff claimed that an instruction on "factual cause" would have been the accurate statement of the law in Pennsylvania and that the trial court’s use of the "substantial factor" instruction warranted a new trial because it confused the jury. The Superior Court rejected this claim and upheld the defense verdict. First, the court emphasized that, although the plaintiff took the "factual cause" charge directly from the Pennsylvania Suggested Standard Jury Instructions (Civil) No. 3.25, "Factual Cause" (2003), our Supreme Court has never adopted the Pennsylvania Standard Jury Instructions. Rather, the Pennsylvania Standard Jury Instructions exist only as a reference material available to assist the trial judge and trial counsel in preparing a proper charge. The Superior Court also emphasized that, unless and until the Supreme Court holds otherwise, Pennsylvania courts continue to utilize a "substantial factor" standard for the determination of legal causation.

Mazzeo v. Barnegat Board of Education was successfully prosecuted on appeal by Walter F. Kawalec, III (Cherry Hill). In this case, the Appellate Division reversed an order of the Law Division which had enforced a settlement against the defendant Board of Education. The parties had been negotiating towards a settlement of their dispute, which arose from the plaintiff's employment with the defendant. Tentative terms had been reached but were never formally adopted by the Board. The trial judge concluded that a settlement was, nevertheless, reached and ordered the defendants to comply with the agreement. On appeal, the Appellate Division reversed. It held that formal voting is required in order for the municipal body to manifest its intent to agree to the terms of the settlement and found that plaintiff's counsel repeatedly recognized that requirement. Absent formal approval, the court held, no assent to the terms were manifest and no agreement was enforceable.