admin. law - laches - delay + prejudice

McCarthy and Associates v. Bureau of Professional and Occupational Affairs – Cmwlth. Court – April 16, 2021 – memorandum opinion**

 

Held: Three-year unexplained delay in imposing a penalty on individual principal of now defunct accountancy firm rather than the firm itself was enough to establish undue delay and prejudice and properly invoke doctrine of laches against BPOA.

 

From the opinion--

Undue delay - “Delay in the administrative process, especially in the area of professional licensing, has become a serious concern for all involved, and this Court has not and will not condone or excuse improper delays,” especially when “the petitioner [] has [] met [its] burden of proving prejudice.” Jackson v. State Real Estate Commission, 456 A.2d 1169, 1170-71 (Pa. Cmwlth. 1983). 

It is clear that the defense of laches is available as a defense in an administrative disciplinary action. However, it is equally clear that for the defense of laches to apply, more than mere passage of time must be shown. It is required that the person asserting the defense show harm or prejudice resulting from the delay. As an affirmative defense, the petitioner has the burden of proving the delay and the resultant prejudice. 

Id. at 1170.

In Fumo v. Insurance Department, 427 A.2d 1259, 1263 (Pa. Cmwlth. 1981), this Court referred to a delay of three years in instituting license disciplinary action as “seemingly dilatory conduct.” Likewise, in Fumo v. State Real Estate Commission, 481 A.2d 1257, 1259 (Pa. Cmwlth. 1984),7 in commenting on a three- year lapse of time in commencing license revocation proceedings, this Court stated that “we certainly do not condone what appears to be an inordinate delay.” Pursuant to this case law, we conclude that the three-year passage of time from when the prosecutorial branch of the Department of State obtained information that enabled it to readily verify Petitioner’s noncompliance with the CPA Law, to when it issued the Rule to Show Cause on behalf of the Commonwealth, constituted a sufficient period of delay for purposes of laches. 

There are no findings of fact or explanation of record that could reasonably account for the delay. In its brief, the Board simply notes the administrative division within the Department of State. . . . Standing alone, the internal operational affairs amongst the divisions within an administrative body, their interactive features, and the process through which administrative enforcement actions are pursued cannot excuse the delay. If it could, then, conceivably, there would be no such thing as undue delay in the law of laches in disciplinary actions because most—if not all—of enforcement-related administrative agencies are separated and parsed along the lines of investigatory, prosecutorial, and adjudicatory functions. 

Therefore, we conclude that Petitioner has established that there was undue delay in this disciplinary action, and the dispositive issue ineludibly becomes whether Petitioner sustained the prejudice necessary to bar the Board’s disciplinary action against its license. 

Prejudice - Petitioner was placed in the uncanny situation of defending a disciplinary proceeding in circumstances where it was entirely unclear who or what entity will be legally responsible for the civil penalty and, should it not be paid, who or what entity will bear the legal repercussions. . . . The Commonwealth instituted a disciplinary action against Petitioner’s accountancy firm license at a time when it was defunct and had ceased operations for approximately three years, having foregone its license for out-of-business status. For all intents and purposes, at least in this licensing matter, Petitioner was effectively “dissolved,” to borrow a term from corporate law. Indeed, in its January 23, 2020 order, when the Board “levie[d] a civil penalty of $1,000.00 against the accounting firm certificate and license of Petitioner, License Number AF054824,” (Board’s decision at Final Order), that license was extinguished and did not exist for over four years. As such, Petitioner was placed in the uncanny situation of defending a disciplinary proceeding in circumstances where it was entirely unclear who or what entity will be legally responsible for the civil penalty and, should it not be paid, who or what entity will bear the legal repercussions. . . . We believe that Petitioner has established prejudice because he was forced to defend a disciplinary proceeding where a civil penalty was imposed on a defunct accountancy firm license in a pseudo-like fashion, whereupon the Board basically attempted to “pierce the corporate veil” and hold Petitioner’s principal liable for civil penalties in his individual and personal capacity for conduct that he committed in his capacity as a corporate officer. See The Village at Camelback Property Owners Association, Inc. v. Carr, 538 A.2d 528, 532 (Pa. Super. 1988) 

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**An unreported, non-precedential Commonwealth Court case can be cited for its persuasive value but is not binding precedent.  See 210 Pa. Code § 69.414(b) and Pa. R.A.P.  3716

civil procedure - writ of summons - duty to diligently try to serve writ of summons in timely manner

Gussom v. Teagle – Pa. Supreme Court – March 25, 2021

 

Held: A trial court has the discretion to dismiss a complaint when a plaintiff fails to offer proof that she diligently attempted to serve process on a defendant in a timely manner and there is no evidence to indicate that the defendant had actual notice of the commencement of the action in the relevant time frame, regardless of whether the plaintiff acted or failed to act intentionally. 

From the opinion:

The Pennsylvania Rules of Civil Procedure allow a plaintiff to commence a civil action by filing either a praecipe for a writ of summons or a complaint. Pa.R.C.P. 1007. The Rules require a plaintiff to serve the defendant with original process within 30 days after the issuance of a writ or the filing of a complaint. Pa.R.C.P. 401(a). If the plaintiff does not effectuate service within that time period, she can praecipe for reissuance of the writ or reinstatement of the complaint. Pa.R.C.P. 401(b)(1). So long as the plaintiff files her writ or complaint before the expiration of the statute of limitations applicable to her cause of action, the original filing, as well as any subsequent reissuances or reinstatements, tolls the statute of limitations. 

“In the seminal case of Lamp v. Heyman, 366 A.2d 882 (Pa. 1976), this Court sought to end abuses of process by plaintiffs who tolled the statute of limitations by filing a writ of summons, had the writ repeatedly reissued, and deliberately failed to notify the defendant of the pending litigation.” McCreesh v. City of Philadelphia, 888 A.2d 664, 665 (Pa. 2005). “This process, while technically compliant with the Rules of Civil Procedure, nonetheless defeated the purpose of the statute of limitations, which is to protect defendants from stale claims.” Id. Thus, in Lamp, this Court held that “a writ of summons shall remain effective to commence an action only if the plaintiff then refrains from a course of conduct which serves to stall in its tracks the legal machinery he has just set in motion.” Lamp, 366 A.2d at 889. This “Lamp rule” applies equally to actions commenced by way of the filing of a complaint. 

We refined the Lamp rule in Farinacci v. Beaver County Industrial Development Authority, 511 A.2d 757, 759 (Pa. 1986), holding that “Lamp requires of plaintiffs a good- faith effort to effectuate notice of commencement of the action.” In addition, Farinacci clarified that: (1) the plaintiff carries an evidentiary burden of proving that she made a good-faith effort to ensure that notice of the commencement of an action was served on the defendant, McCreesh, 888 A.2d at 672; and (2) “[i]n each case, where noncompliance with Lamp is alleged, the [trial] court must determine in its sound discretion whether a good-faith effort to effectuate notice was made[,]” Farinacci, 511 A.2d at 759.

This Court’s most recent decision in the Lamp-line of cases is McCreesh, supra. In McCreesh, the Court expressed that when plaintiffs’ improper actions in serving original process put defendants on actual notice of the commencement of actions, trial courts should “dismiss only those claims where plaintiffs have demonstrated an intent to stall the judicial machinery or where plaintiffs’ failure to comply with the Rules of Civil Procedure has prejudiced defendant.” McCreesh, 888 A.2d at 674. 

In the present matter, the Superior Court affirmed a trial court order that dismissed a plaintiff’s complaint based upon the plaintiff’s failure to serve timely her complaint upon the defendant despite the fact that the plaintiff’s actions did not amount to intentional conduct. This Court granted allowance of appeal to address whether the Superior Court’s decision conflicts with Lamp and its progeny. For the reasons that follow, we answer this question in the negative. More specifically, consistent with the Superior Court’s decision, we hold that a trial court has the discretion to dismiss a complaint when a plaintiff fails to offer proof that she diligently attempted to serve process on a defendant in a timely manner and there is no evidence to indicate that the defendant had actual notice of the commencement of the action in the relevant time frame, regardless of whether the plaintiff acted or failed to act intentionally. Because the Superior Court reached the correct result in this matter, we affirm that court’s judgment. 

 

consumer protection claims not barred by econ. loss or gist of action doctrines - 3d Cir.

Earl v. NVR, Inc. – 3d Cir. – March 5, 2021 – reported decision

 

Held:  Pa. state consumer protection claims about a residence and its condition are not barred either by the economic loss doctrine or the gist of action doctrine, overruling Werwinski v. Ford Motor Co., 286 F.3d 661 (3d Cir. 2002), which “no longer accurately reflects the state of Pennsylvania law with regard to” those doctrines.

 

Economic loss doctrine –

 

“The Pennsylvania Supreme Court has still not weighed in directly on the applicability of the economic loss doctrine to the UTPCPL. It has clarified, however, that though the economic loss doctrine is “well-established” in Pennsylvania, the common law rule gives way if there is a “statutory basis to impose liability for economic losses,” such as when a statute “provide[s] a private cause of action for economic losses.” Excavation Techs., Inc. v. Columbia Gas Co. of Pa., 985 A.2d 840, 842-43 (Pa. 2009). The UTPCPL does just that. It permits plaintiffs to recover for “any ascertainable loss of money or prop- erty, real or personal.” 73 Pa. Cons. Stat. § 201-9.2 (emphasis added). 

The Pennsylvania Superior Court has extended this logic in considering the eco- nomic loss doctrine’s relationship to the UTPCPL in two decisions that have directly undermined the basis for our holding in Werwinski: Knight v. Springfield Hyundai, 81 A.3d 940 (Pa. Super. Ct. 2013) and Dixon v. Nw. Mut., 146 A.3d 780 (Pa. Super. Ct. 2016). In the absence of binding Pennsylvania Supreme Court authority, “[t]he rulings of intermediate appellate courts must be accorded significant weight and should not be disregarded absent a persuasive indication that the highest state court would rule otherwise.” U.S. Underwriters Ins. Co. v. Liberty Mut. Ins. Co., 80 F.3d 90, 93 (3d Cir. 1996). Both Knight and Dixon must be granted due deference. . . . .

..... We acknowledge and appreciate the concern raised by the Court in Dixon, and in so doing have determined that it is now appropriate to set aside our holding in Werwinski with respect to the economic loss doctrine’s application to UTPCPL claims. 

Gist of action doctrine – 

The gist of the action doctrine provides that “an alleged tort claim against a party to a contract, based on the party’s actions undertaken in the course of carrying out a contractual agreement, is barred when the gist or gravamen of the cause of action stated in the complaint, although sounding in tort, is, in actuality, a claim against the party for breach of its contractual obligations.” Dixon, 146 A.3d at 788 (quoting Bruno v. Erie Ins. Co., 106 A.3d 48, 53 (Pa. 2014) (footnotes omitted)). . . .

If read expansively, the doctrine could plausibly be understood to bar the instant action, given the existence of a contract between Earl and NVR involving the purchase and construction of the Home. Earl’s complaint is not primarily premised upon the terms of the contract, however, but on the marketing and representations that induced her to enter into the contract in the first instance, as well as statements made to her by agents of NVR during the homebuilding process. Knight is once again illustrative for our purposes, as the Court encountered a similar set of facts and determined the gist of the action doctrine did not apply: 

Although she purchased the vehicle pursuant to the contract, the alleged representations by Appellees occurred prior the signing of any contract. Furthermore, the above false advertisements, statements, and assurances are rendered unlawful by sections 201–2(4)(v), (vii), (ix), (xi), and (xxi) of the UTPCPL. These are not masked claims for breach of contract; the gist of the action here is in tort, and the contract is collateral to the matters alleged. As such, the gist of the action doctrine did not warrant the dismissal of Knight's UTPCPL claims. Knight, 81 A.3d at 951 (internal citations omitted). 

While the allegations here and in Knight both sound in fraud rather than negligence, in Dixon the Superior Court determined that even UTPCPL claims grounded in negligence may not be barred by the gist of the action doctrine: 

Deceptive conduct ordinarily can only take one of two forms, either fraudu- lent or negligent. As noted above, the pre–1996 catchall provision covered only fraudulently deceptive practices. The broadening of the UTPCPL so as to not require fraud therefore ipso facto makes negligent deception, e.g., neg- ligent misrepresentations, actionable under the post–1996 catchall provision. Dixon, 146 A.3d at 790. The Dixon Court consequently allowed the plaintiff’s claims there to go forward, and both Dixon and Knight thus suggest that the gist of the action doctrine should not preclude liability under the UTPCPL where the contract is collateral to any allegedly deceptive conduct, as has been alleged in this case. We therefore hold that the gist of the action doctrine does not bar Earl’s UTPCPL claim from going forward. 

 

 

 

 

 

 

 

 

 

 

default judgment - opening - timeless - justifiable excuse for delay - factual dispute - necessity for hearing

City of Philadelphia v. Wake – Cmwlth. Court – March 12, 2021 – reported decision

 

http://www.pacourts.us/assets/opinions/Commonwealth/out/397CD19_3-12-21.pdf?cb=1

Held: Where there is a factual dispute about when a party got notice of judgment execution proceedings on party’s petition to open judgment, a court must hold a hearing to resolve the factual dispute. 

Opening – necessary element of proof -- The party seeking to open a default judgment must establish three elements: (1) the petition to open must be promptly filed; (2) the default can be reasonably explained or excused; and (3) there is a meritorious defense to the underlying claim. McCoy v. Pub. Acceptance Corp., 305 A.2d 698, 700 (Pa. 1973). Failure to satisfy any one element will result in the petition to open default judgment being denied. Id. “[T]he trial court cannot open a default judgment based on the ‘equities’ of the case when [the defendant] has failed to establish all three of the required criteria.” Seeger v. First Union Nat’l Bank, 836 A.2d 163, 167 (Pa. Super. 2003) (some internal quotation marks omitted). 

Timeliness -- As to the first requirement, “[t]he timeliness of a petition to open judgment is measured from the date that notice of the entry of the default judgment is received. The law does not establish a specific time period within which a petition to open a judgment must be filed to qualify as timely.” Castings Condo. Ass’n, 663 A.2d at 223 (internal citation omitted). “[T]he court must consider the length of time between discovery of entry of the default judgment and the reason for delay.” U.S. Bank Nat’l Ass’n for Pa. Hous. Fin. Agency v. Watters, 163 A.3d 1019, 1028 (Pa. Super. 2017) (emphasis added) (citing Myers v. Wells Fargo Bank, N.A., 986 A.2d 171, 176 (Pa. Super. 2009)). 

Length of delay -- “In cases where the appellate courts have found a ‘prompt’ and timely filing of the petition to open a default judgment, the period of delay has normally been less than one month.” U.S. Bank N.A. v. Mallory, 982 A.2d 986, 995 (Pa. Super. 2009) (holding 82-day delay between notice of default judgment and petition to open default judgment did not constitute prompt filing); see also Pappas v. Stefan, 304 A.2d 143, 146 (Pa. 1973) (holding 55-day delay between notice of default judgment and petition to open default judgment did not constitute prompt filing); Am. Vending Co. v. Brewington, 432 A.2d 1032, 1036 (Pa. Super. 1981) (holding two and one-half-month delay between when defendants notified of default judgment and petition to open default judgment did not constitute prompt filing); Schutte v. Valley Bargain Ctr., Inc., 375 A.2d 368, 371 (Pa. Super. 1977) (holding 47-day delay between resolution of confusion regarding claims and petition to open default judgment did not constitute prompt filing); cf. Alba v. Urology Assocs. of Kingston, 598 A.2d 57, 58 (Pa. Super. 1991) (holding petition to open default judgment filed 14 days after default judgment entered constituted prompt filing). 

Justifiable excuse -- As to the remaining requirements to open a default judgment, a petitioner must establish a justifiable excuse in the delay of filing a responsive pleading leading to the default. Alba, 598 A.2d at 58. “Whether an excuse is legitimate is not easily  answered and depends upon the specific circumstances of the case.” Castings Condo. Ass’n, 663 A.2d at 223-24. The petitioner “must [also] plead an arguable meritorious defense sufficient to justify relief if proven.” Id. at 224. 

Timeliness of Petition in case at bar – There was a factual dispute about when appellants got notice of the default judgment. The trial court determined that 83 days elapsed between when the notice of entry of default judgment was filed and when Appellants filed the Petition to Open.. Appellants submit, however, that they learned of the entry of the default judgment only seven days before they filed the Petition. Without conducting a hearing to resolve the factual dispute as to when Appellants received notice of the default judgment, appears to have disregarded Appellants’ assertions that they did not receive earlier notice of the default judgment and measured the time solely from the date of the entry of the judgment until the filing of the Petition, ultimately concluding that the alleged delay resulted in the filing not being a “prompt” filing. 

Such an analysis is not consistent with the case law discussed above, which requires consideration of when Appellants discovered the filing of the entry of default judgment. Thus, we must conclude that the trial court erred in failing to consider the time between discovery of the entry of judgment and the filing of the Petition when determining whether the Petition was timely. A remand for a hearing to resolve factual disputes regarding Appellants’ discovery of the entry of default judgment, therefore, is necessary. 

Justifiable Excuse for Delay – improper service of writ of execution --  Appellants contend that their delay in responding to the writ of execution was based upon the City’s failure to comply with the rules of service of original process according to Pa. R.C.P. Nos. 402 and 424. Thus, a remand is also necessary to resolve factual disputes regarding the authority of the person who was served to accept service on behalf of Appellants and to consider whether Appellants established a justifiable excuse. 

Where the party seeking to open a judgment asserts that service was improper, a court must address this issue before considering any other factors. Cintas Corp. v. Lee’s Cleaning Servs., Inc., 700 A.2d 915, 919 (Pa. 1997) (citations omitted). “If valid service has not been made, then the judgment should be opened because the court has no jurisdiction over the defendant and is without power to enter a judgment against him or her.”1 Id. 

Generally, “[a] sheriff’s return setting forth that original process was served is conclusive and immune from attack as to the facts stated therein of which the sheriff presumptively has personal knowledge.” In re Monroe Cnty. Tax Claim Bureau, 91 A.3d 265, 272 (Pa. Cmwlth. 2014 Conversely, “whether service was made on an agent or person-in-charge can be challenged because most of the facts regarding the nature of the responsibilities of the person served are not within the sheriff’s personal knowledge.” Id. If a party wishes to challenge the sheriff’s return on this basis, extraneous evidence can be used to challenge the return. Id. 

 

 

 

UC - late appeal - presumption of receipt of notice of determination rebutted - breakdown in admin. process - misdirection by UCSC

Bashinsky v. UCBR – Cmwlth. Court – 2-24-21 – reported decision

 

Held: Claimant’s act of contacting the UC Service Center, as evidenced by record of “Live Chat,” was evidence that he did not received the UCSC notice of determination and rebutted the presumption of receipt of the notice.

The Board’s finding the claimant received a notice of determination on the date alleged “is not supported by substantial evidence.” There was “no entry in the claim record indicating that a notice of determination was mailed” on the date claimed by the Department. In addition, the Board’s credibility determination [concerning claimant’s testimony of non-receipt] is an insufficient basis for denying nunc pro tunc relief. 

This is not a case where the claimant made an after-the-fact assertion that he did not receive a notice of determination. Claimant’s act of initiating the LiveChat session with the UCSC and asking whether there was “[a]ny update on my claim?,” is itself evidence that he had not received the notice because, if he had, there would have been no reason for him to contact the Service Center.

Moreover, the UC representative’s statement to claimant in the Live Chat that his claim was undergoing an adjudication process was “incorrect information” and showed a breakdown in the administrative process.  The representative knew that the claim had already been denied, and the representative failed to notice claimant of the appeal deadline, which was three days after the Live Chat. Instead, the representative “provided Claimant with misdirection. . . .[i]nstead of responding to Claimant’s specific request for an update on his claim.”

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This case is also reported in the PLAN Legal Update  http://planupdate.blogspot.com/, which is searchable and can be accessed without a password.

 

 

 

 

Housing - Sec. 8 - medical marijuana

Cease v. Housing Authority of Indiana County – Cmwlth. Court – February 19, 2021 – reported decision – (2-1) 

Petition for allowance of appeal denied Sept. 14, 2021

https://www.pacourts.us/assets/opinions/Supreme/out/74WAL2021%20-%20104893193146422235.pdf?cb=1

 

Held:  Housing Authority and trial court erred in denying Sec. 8 Housing Choice Voucher application of disabled veteran with valid permit under state law to “obtain and use medical marijuana to treat her conditions.” The denial was based solely on her use of that drug, which remains an illegal substance under federal law. 

 

The court remanded the matter to the Housing Authority to do what federal law, the QHWRA, 42 USC sec. 13661, “mandates and establish fair and reasonable standards for determining in what circumstances admission to Section 8 housing is prohibited for an applicant who is legally using medical marijuana under state law, and to apply those standards with respect to the applicant’s individual circumstances when determining her eligibility for Section 8.”

 

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From the opinion:

 

 

Federal law does not outright require barring an application based on an applicant’s use of a controlled substance, but rather requires that a housing authority “shall establish standards” in such circumstances, 42 USC sec. 13661 (b)(1)(A).  [T] here is a difference between “shall establish standards that prohibit admission” and “shall prohibit admission.” Otherwise, the term “establish standards” is entirely meaningless.” Compare the provision concerning sex offenders, which states that a housing authority “shall prohibit admission” of such an offender. 

 

In other words, for purposes of Section 13661(b)(1)(A), the Authority must establish standards for determining when and on what basis admission is prohibited for a Section 8 housing applicant who the Authority determines is illegally using a controlled substance. See Nation v. Trump, 818 F. App’x 678, 679-80 (9th Cir. 2020) (“QHWRA requires that owners of federally-assisted housing establish certain occupancy standards pertaining to illegal drug use for residents. See generally 42 U.S.C. §§ 13661-62.”).  

 

Such standards must take into account factors such as the nature of the substance, i.e., whether it is clearly unlawful or in an unclear legal state such as that involved here; the reason for such use; whether it is being used in accordance with legal requirements; other factors concerning the applicant’s background, including behavior during any prior residence in federally subsidized housing; and the presence or absence of any prior criminal record. The different conclusion by a lower federal court in Michigan is not binding here. 

 

The applicant “possesses a valid Pennsylvania Medical Marijuana Identification Card authorizing her to legally obtain and use medical marijuana under medical supervision, and the Authority does not dispute that she has a valid medical basis for her use and that it is properly prescribed and supervised.

 

Consequently, we find the term “illegally using a controlled substance” to be ambiguous here where her use is prohibited by the federal government but permitted under state law. Criminal law is primarily a matter for the states to determine within their own jurisdictions. “Federalism, central to the constitutional design, adopts the principle that both the National and State Governments have elements of sovereignty the other is bound to respect.” Arizona v. United States, 567 U.S. 387, 398 (2012). As the Pennsylvania Supreme Court recently observed: 

 

[T]he core principle of federalism recogniz[es] dual sovereignty between the tiers of government.” See United States v. Davis, 906 F.2d 829, 832 (2d Cir. 1990) (“The states and the national government are distinct political communities, drawing their separate sovereign power from different sources, each from the organic law that established it. Each has the power, inherent in any sovereign, independently to determine what shall be an offense against its authority and to punish such offenses.”). In enacting the [Pennsylvania Medical Marijuana Act], the Pennsylvania Legislature proceeded pursuant to its independent power to define state criminal law and promote the health and welfare of the citizenry.  Gass v. 52nd Jud. Dist., 232 A.3d 706, 714 (Pa. 2020). Consequently, “while possession and use of marijuana remains illegal under federal law even for medical purposes, . . . the federal [CSA] does not (and could not) require states to enforce it.” Id. at 714. 

 

Dissent –  McCullough

 

The Majority goes to great lengths to explain why Congress’s use of the phrase “shall establish standards that prohibit” in section 13361 of the federal Quality Housing and Work Responsibility Act (QHWRA), means a Public Housing Authority (PHA) has “flexibility” to decide whether to admit an illegal drug user (as defined in the federal Controlled Substance Act (CSA)) into a Section 8 housing program. By avoiding the rules of statutory interpretation, the Majority assigns to the phrase “shall establish standards that prohibit” a meaning that Congress plainly did not intend. 

 

The Majority also disregards some very basic constitutional and jurisprudential concepts to arrive at the desired conclusion that Mary Cease (Cease), a user of medical marijuana, is not “illegally using a controlled substance” under the QHWRA. The fact that Pennsylvania’s Medical Marijuana Act (MMA) legalizes the use of medical marijuana in limited situations is immaterial to the disposition of this case. The CSA (which illegalizes medical marijuana as a Schedule I drug) applies here because the QHWRA is a federal statute. 

I disagree with the Majority’s interpretation of section 13661 of the QHWRA. To me, it is abundantly clear that PHAs have no discretion to admit persons who engage in the illegal use of drugs, as defined in the governing federal law. Rather, PHAs are required to deny admission to Section 8 housing if the PHA determines that the applicant or any household member is currently engaging in illegal use of drugs.  

The Majority’s position simply cannot be reconciled with the Supremacy Clause of the United States Constitution, which dictates that the federal law prevails over state law. The Supremacy Clause prevents this Court from applying the Pennsylvania MMA to discern the meaning of “illegally using a controlled substance.” 

child abuse - founded report based on ARD - right to admin. hearing

J.F. v. DHS – Pa. S.Ct.  February 17, 2021

 

Majority - http://www.pacourts.us/assets/opinions/Supreme/out/J-48-2020mo%20-%20104689937127731600.pdf?cb=1

Dissent - http://www.pacourts.us/assets/opinions/Supreme/out/J-48-2020do%20-%20104689937127731607.pdf?cb=1

 

In the absence of another appropriate forum to challenge DHS’s adjudication of child abuse in a recorded evidentiary hearing, a named perpetrator in a report designated as “founded” based upon the perpetrator’s voluntary entry into an accelerated rehabilitative disposition is entitled to an administrative hearing. We therefore affirm the Order of the Commonwealth Court. 

 

consumer protection - UTPCPL - strict liability - no state of mind requirement - Pa. S.Ct.

Gregg v. Ameriprise Financial – Pa. S. Ct. – February 17, 2021

 

Majority – Wecht, joined by Donohue, Dougherty and Mundy.

In 1999, Gary and Mary Gregg sought the expertise of Robert A. Kovalchik, a financial advisor and insurance salesperson for Ameriprise Financial, Inc. Engaging in what the trial court would later conclude to be deceptive sales practices, Kovalchik made material misrepresentations to the Greggs to induce them to buy certain insurance policies. The Greggs ultimately sued Ameriprise Financial, Inc., under Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (“CPL”), 73 P.S. § 201-2(4)(xxi). The Greggs’ complaint also asserted, inter alia, common law claims for negligent misrepresentation and fraudulent misrepresentation. 

Both the trial court and the Superior Court concluded that the Greggs were not required to prevail on the common law claims of fraudulent misrepresentation or negligent misrepresentation in order to succeed on their CPL claim. Gregg v. Ameriprise Fin., 195 A.3d 930, 936 (Pa. Super. 2018). Applying Commonwealth v. TAP Pharm. Products, Inc., 36 A.3d 1197 (Pa. Cmwlth. 2011), rev’d on other grounds, 94 A.3d 350 (Pa. 2014), the Superior Court held that the test for deceptive conduct under the CPL is whether the conduct has the tendency or capacity to deceive, without regard to the actor’s state of mind. Gregg, 195 A.3d at 939. 

A strict liability standard applies to the Greggs’ CPL claim. A plain language analysis of the relevant statutory provision leads inexorably to the conclusion that deceptive conduct under the CPL is not dependent in any respect upon proof of the actor’s state of mind. The Superior Court’s holding is consistent not only with the plain language of the CPL, but also with our precedent holding that the CPL is a remedial statute that should be construed broadly in order to comport with the legislative will to eradicate unscrupulous business practices. See Commonwealth by Creamer v. Monumental Props., Inc., 329 A.2d 812, 817 (Pa. 1974). Accordingly, we affirm. . . . .

The addition of “deceptive” to describe the type of conduct barred by the catch-all provision of the CPL expanded that provision beyond fraudulent conduct. In particular, in the context of consumer protection, “deceptive conduct” had acquired a peculiar and appropriate meaning prior to the 1996 amendment. As we have explained, the CPL is based upon the Federal Trade Commission Act (“FTCA”) and the Lanham Act. Id. at 818 (observing that parts of the CPL are identical to the FTCA and that the “Lanham Act’s similarity to the [CPL] is likewise strong”). Under the FTCA, deception is a broader concept of misconduct than common law fraud, and requires no proof of the actor’s state of mind. See, e.g., Montgomery Ward & Co. v. FTC, 379 F.2d 666, 670 (7th Cir. 1967) (rejecting the argument that deceptive advertising required proof of intent: “whatever Wards’ intentions were in the advertising, they are not controlling in the determination of its deceptiveness”). Rather than being premised upon intent, 

misrepresentation that has the tendency or capacity to deceive is a deceptive act under federal law. Id. (“Actual deception, proved by deceived consumers, is not necessary: the likelihood of deception or the capacity to deceive is the criterion by which the advertising is judged.”); see also Removatron Int’l Corp. v. FTC, 884 F.2d 1489, 1496 (1st Cir. 1989) (explaining that a deceptive representation depends upon the impression created by the representation, rather than its truth or falsity). 

 Dissent – Todd, Saylor, and Baer

http://www.pacourts.us/assets/opinions/Supreme/out/J-31-2020do%20-%20104690395127765002.pdf?cb=1

In Commonwealth v. Golden Gate National Senior Care, 194 A.3d 1010 (Pa. 2018), our Court held that Section 201-2(4)(xxi) of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law1 (“CPL”) prohibits all “deceptive conduct” in a consumer transaction, i.e., all conduct which has “the capacity or tendency to deceive.” I agree with the majority that this holding should be reaffirmed. Additionally, I agree that Section xxi can be invoked in either a public enforcement action brought by the Attorney General, or in a private action such as the one brought by Appellees in the case at bar. However, on the core question before us, I disagree that the General Assembly, when it amended Section xxi in 1996 to add the prohibition against “deceptive conduct” in the conduct of  consumer transactions for goods and services, intended to impose strict liability. Therefore, I must respectfully dissent. 

 

 

 

 

 

 

 

 

 

 

UC - late appeal - duty of prompt examination - delay - limited duty of claimant to update address

 

Byrd v. UCBR – Cmwlth. Court  - en banc - February 4, 2021 – unreported memorandum decision**

This case has unusual facts but contains some language that might be generally helpful to claimants.

It involves a 2012 UC claim on which DLI paid > $6k in benefits. However, the worker/appellant denies ever having applied for benefits, since she was working during the relevant time period. There may be an identity theft issue in the case.

In 2017 – five years after the claim was open and paid – the Department sent worker a series of notices that raised quesetions about her eligibility. Worker never respond to the notices, because she did not receive them, having moved a number of times since 2012. She eventually found out about the case when DLI entered a  lien against her. She then appealed that decision, which was rejected as being late.

The court reversed, granting her the right to appeal beyond the legal time limits, because 

1. the Department violated its duty to promptly examine claims, sec. 501 (c), 43 P.S. sec. 821 (c).
2. there was no presumption that the worker received the Department’s notice of determination, given that it was sent to an incorrect address

Duty of prompt examination of UC claims – delay in issuing determination

Section 501 of the UC Law provides that the Department shall promptly examine each application for benefits. . . 43 P.S. § 821(a) & (b) (italics added).
Here, the Department conducted no examination of the 2012 UC claim other than its 2012 verification of Claimant’s 2011 separation of employment from one employer and its 2017 questionnaire to Employer. . . . . [T]here is no indication that . . . Claimant’s last employer, was provided with notice of her alleged claim for UC benefits as required by Section 501(b) of the UC Law. Thus, there is no indication in the record that the Department attempted to verify Claimant’s alleged separation from Employer in 2012, or at any other time prior to mid-2017. Further, the record contains no explanation by the Department for its five-year delay in pursuing its examination of the claim. 

Nunc pro tunc appeals - Nunc pro tunc relief allowing a UC claimant’s untimely appeal may be permitted where the delay in filing the appeal is the result of extraordinary circumstances involving fraud, administrative breakdown, or non-negligent conduct of the claimant or a third party. Mountain Home Beagle Media v. Unemployment Comp. Bd. of Rev., 955 A.2d 484 (Pa. Cmwlth. 2008); see also Rude v. Unemployment Comp. Bd. of Rev. (Pa. Cmwlth., No. 184 C.D. 2010, filed Sept. 20, 2010), slip op. at 3-4, 2010 Pa. Commw. Unpub. LEXIS 640, at *5 (unreported) (citing Cook v. Unemployment Comp. Bd. of Rev., 671 A.2d 1130 (Pa. 1996) and Mountain Home Beagle Media). Negligence by an administrative official may be equivalent to fraud for purposes of justifying nunc pro tunc relief. Rude. . . . (citing Stana v. Unemployment Comp. Bd. of Rev., 791 A.2d 1269 (Pa. Cmwlth. 2002)).  Here, Claimant contends the Department was negligent by reason of its five-year delay in issuing the notices of determination. As a result, because Claimant had moved multiple times in the interim, the Department did not provide the requisite notices of its determinations, having mailed them to the wrong address. We agree. 

Leavitt, J. – concurring – no duty of claimant to update address after her claim period has ended

Section 501(e) of the UC Law requires a party to appeal after a notice “was mailed to his last known post office address.” 43 P.S. §821(e) (emphasis added). A fair reading of Section 501(e) suggests that a claimant who has an open claim for unemployment benefits may not raise non-receipt of a determination as an excuse for filing an untimely appeal if she failed to notify the Department of her new address. 

However, it is a bridge too far to read the term “last known post office address” to signify a mandate that any person who ever interacted with the unemployment compensation system must keep the Department informed of every address change after benefits have ceased, by virtue of the claimant’s return to the workplace, or have been exhausted. It is evident when looking at other statutes that the legislature knows how to impose a duty to report address changes when it wishes. . . . .T]he Unemployment Compensation Law imposes no such duty on an individual who once applied for unemployment benefits. When there is no duty, there can be no negligence. . . . For this reason alone, the Board erred in holding that Claimant was in any way negligent for not updating her address with the Department five years (or more) after she ceased to collect unemployment benefits. 

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**An unreported, non-precedential Commonwealth Court case can be cited for its persuasive value but is not binding precedent.  See 210 Pa. Code § 69.414(b) and Pa. R.A.P.  3716

 

drivers license - suspension - extraordinary delay between conviction and suspension

Commonwealth, Dept. of Transportation v. Middaugh – Pa. S.Ct. – January 20,2021

 

Majority         http://www.pacourts.us/assets/opinions/Supreme/out/J-7-2020mo%20-%20104664745125444695.pdf?cb=1

Concur           http://www.pacourts.us/assets/opinions/Supreme/out/J-7-2020cdo%20-%20104664745125444731.pdf?cb=1

Dissent   http://www.pacourts.us/assets/opinions/Supreme/out/J-7-2020do%20-%20104664745125444810.pdf?cb=1

 

 

Held: 

Trial court upholding driver appeal affirmed. In reaching its holding, the court relied on Gingrich v. PennDOT, 134 A.3d 528 (Pa. Cmwlth. 2016), which set forth the following rule for situations where the delay is attributable to a court clerk rather than PennDOT: 

[W]here . . . a licensee is able to demonstrate all of the following: [(1)] a conviction that is not reported for an extraordinarily extended period of time; [(2)] the licensee has [no further violations of the Vehicle Code] for an extended period; and [(3)] prejudice, it may be appropriate for common pleas to grant relief. 

Id. at 535. Applying the standard, the trial court found that the 28-month delay was extraordinary, Appellee did not have any further violations during that period, and Appellee had demonstrated he would be prejudiced by the lateness of the suspension, particularly in view of his medical condition and the impact a suspension would have on it. 

 

res judicata (claim preclusion) and collateral estoppel (issue preclusion)

In re Coatesville Area School District – Pa. S.Ct. – January 19,2021 

http://www.pacourts.us/assets/opinions/Supreme/out/J-72-2020mo%20-%20104664752125446022.pdf?cb=1

 

This is a tax assessment case, not really relevant to legal aid practice, but it contains a nice summary of the doctrine of res judicata (claim preclusion) and collateral estoppel (issue preclusion).

 

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Res judicata – literally, a thing adjudicated – is a judicially-created doctrine. See Estate of Bell, 463 Pa. 109, 113, 343 A.2d 679, 681 (1975). It bars actions on a claim, or any part of a claim, which was the subject of a prior action, or could have been raised in that action. See R/S Financial Corp. v. Kovalchick, 552 Pa. 584, 588, 716 A.2d 1228, 1230 (1998); Balent v. City of Wilkes-Barre, 542 Pa. 555, 563, 669 A.2d 309, 313 (1995). This Court has explained that 

[r]es judicata, or claim preclusion, prohibits parties involved in prior, concluded litigation from subsequently asserting claims in a later action that were raised, or could have been raised, in the previous adjudication. The doctrine of res judicata developed to shield parties from the burden of re-litigating a claim with the same parties, or a party in privity with an original litigant, and to protect the judiciary from the corresponding inefficiency and confusion that re-litigation of a claim would breed. 

Wilkes ex rel. Mason v. Phoenix Home Life Mut. Ins. Co., 587 Pa. 590, 607, 902 A.2d 366, 376 (2006) (citation omitted); see also R/S Financial, 552 Pa. at 588, 716 A.2d at 1230 (“The purposes of the rule are the protection of the litigant from the dual burden of relitigating an issue with the same party or his privy and the promotion of judicial economy through prevention of needless litigation.” (quoting Foster v. Mut. Fire, Marine & Inland Ins. Co., 544 Pa. 387, 404, 676 A.2d 652, 661 (1996))).

Four elements common to both actions, sometimes termed the “four identities,” see, e.g., Estate of Tower, 463 Pa. 93, 100, 343 A.2d 671, 674 (1975), must be present for res judicata to apply: “an identity of issues, an identity of causes of action, identity of persons and parties to the action, and identity of the quality or capacity of the parties suing or being sued.” In re Iulo, 564 Pa. 205, 210, 766 A.2d 335, 337 (2001) (citing Safeguard Mut. Ins. Co. v. Williams, 463 Pa. 567, 574, 345 A.2d 664, 668 (1975)). 

Collateral estoppel is similar in that it bars re-litigation of an issue that was decided in a prior action, although it does not require that the claim as such be the same. For example, if, in a breach of contract action, the defendant asserts that the contract is invalid because of fraud, but the contract is ruled valid and the defendant is found liable, in a future lawsuit against the same party alleging a separate breach of the same contract the defendant is precluded from asserting the invalidity of the contract based on fraud. SeeRESTATEMENT (SECOND) OF JUDGMENTS §27, cmt. a, illus. 2 (1982). 

Collateral estoppel will only apply where: the issue is the same as in the prior litigation; the prior action resulted in a final judgment on the merits; the party against whom the doctrine is asserted was a party or in privity with a party to the prior action; and the party against whom the doctrine is asserted had a full and fair opportunity to litigate the issue in the prior action. See Rue v. K-Mart Corp., 552 Pa. 13, 17, 713 A.2d 82, 84 (1998). In some renditions, courts add a fifth element, namely, that resolution of the issue in the prior proceeding was essential to the judgment. See, e.g., Office of Disciplinary Counsel v. Kiesewetter, 585 Pa. 477, 484, 889 A.2d 47, 50-51 (2005). 

Collateral estoppel is premised on practical considerations that overlap substantially with those of res judicata. These include avoiding the “cost and vexation” of repetitive litigation, conserving judicial resources, “and, by preventing inconsistent decisions, encourage[ing] reliance on adjudication.” Id. at 484, 889 A.2d at 51.