employment - wages/hours - time spent on security screening is compensable under state wage/hour law

In re Amazon.com, Inc.  – Pa. Supreme Court – reported decision on certified question from 6^th Circuit - July 21, 2021

 

Majority https://www.pacourts.us/assets/opinions/Supreme/out/J-76-2020mo%20-%20104839808140967303.pdf?cb=2

dissent https://www.pacourts.us/assets/opinions/Supreme/out/J-76-2020do%20-%20104839808140911397.pdf?cb=1

dissent https://www.pacourts.us/assets/opinions/Supreme/out/J-76-2020do1%20-%20104839808140963694.pdf?cb=1

 

Contrast the U.S. Supreme Court decision in Integrity Staffing Solutions v. Busk, 574 U.S. 27 (2014). In Busk, the high Court ruled that time spent by Amazon warehouse workers in Nevada going through the same security screenings the employees in the present case were subjected to was not compensable under the federal FLSA. 

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We answer herein two certified questions from the United States Court of Appeals for the Sixth Circuit: (1) whether time spent on an employer’s premises waiting to undergo, and undergoing, mandatory security screening is compensable as “hours worked” within the meaning of the Pennsylvania Minimum Wage Act1 (“PMWA”)?; and (2) whether the doctrine of de minimis non curat lex,2 as described in Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946), applies to bar claims brought under the PMWA? Our reply to these questions is that time spent on an employer’s premises waiting to undergo, and undergoing, mandatory security screening constitutes “hours worked” under the PMWA; and there exists no de minimis exception to the PMWA. 

1 43 P.S. §§ 333.101-333.115.
2 Literally translated, this Latin phrase means: “The law does not concern itself with trifles.”. It is frequently referred to in legal vernacular simply as “de minimis.” Id. Pursuant to this principle, “courts disregard trivial  matters that serve merely to exhaust the court's time.” Bailey v. Zoning Board of Adjustment of the City of Philadelphia, 810 A.2d 492, 504 n.20 (Pa. 2002).

 

employment - EMT - licensure - misstatement of fact on application - Dept. discretion as to penalty

Hynes v. Dept. of Health -  Cmwlth. Court – September 17, 2020 – unreported memorandum decision**

 

Held: Ever though applicant for EMT certificate admittedly failed to disclose a 20+ year-old convictions on his application, it was error for the Department of Health to deny his application and revoke his certification, because:

 

• “there is no material relevance between the convictions and his present ability to perform EMT duties
• Age of convictions – “Importantly, the conduct in question occurred 25 years ago”
• In spite of applicant’s conduct, the Dept. had discretion about the mature of the disciplinary action against applicant
• The Department “committed a manifestly unreasonable exercise of judgment” in revoking EMT certification, given applicant’s mitigating evidence

 

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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

 

UC - referee decision - re-opening - good cause - written request

Massie v. UCBR – Cmwlth. Court – June 1, 2021 – reported decision

https://www.pacourts.us/assets/opinions/Commonwealth/out/902CD20_6-1-21.pdf?cb=1

 

 

Held: It was error for the referee to re-open a case after an initial hearing, at which only the claimant appeared, where the employer had a post-hearing oral (voicemail), pre-decision communication with the referee but did not

            - submit a written notice asking for the case to be re-opened

            - set out reasons for failure to attend that constitute “proper cause”

all of which is required by 34 Pa. Code sec. 101.24(a).

 

Reopening - The regulation at 34 Pa. Code §101.24(a) does not authorize a referee to reopen the record on her own motion. “Agencies and their agents have only those powers that are conferred on them by the legislature in their enabling statute or authorized regulations.” County of Allegheny Orphans’ Court/ v. UCBR, 220 A.3d 730, 736 (Pa. Cmwlth. 2019) The “authority to reopen the record and further develop the evidence in the interest of justice is not afforded to a referee.” Id. Rather, that authority has been conferred solely on the Board. Moreover, even assuming that a voicemail message constituted an “implicit” request to reopen the record, the request did not satisfy the regulation at 34 Pa. Code §101.24(a). A request to reopen the record “shall be in writing” and must explicitly recite the party’s good cause for missing the hearing.  The voicemail message in this case satisfies neither requirement. 

Willful misconduct/voluntary quit - It was error for the Referee to reopen the record sua sponte. County of Allegheny Orphans’ Court, 220 A.3d at 736. Further, “the referee is not the ultimate fact-finder to whom discretion in developing an adequate record may be implied.” Id. The Board has this responsibility. The Referee exceeded his authority in reopening the record on his own initiative. The Board erred in not limiting the record to the evidence admitted during the initial hearing, at which only the claimant appeared and gave evidence, none of which supported a factual finding that the claimant voluntarily quit his job or committed willful misconduct. 

UC - sec. 402 (e.1) - drug policy - marijuana prescription

Jack Lehr Electric v. UCBR – Cmwlth. Court – June 8, 2021 – reported opinion

https://www.pacourts.us/assets/opinions/Commonwealth/out/913CD20_6-8-21.pdf?cb=1

 

 

Held:  Claimant not disqualified under sec. 401(e.1) of the UC Law, 43 P.S. 802(e.1), even though he failed an employer drug test, where 

-claimant had a valid marijuana prescription and  patient ID card 

- claimant did not ingest marijuana while at work

- ER provided evidence that claimant was under the influence of marijuana while at work

- ER drug policy provides that “proper use” of prescription drugs is “exempt” from ER drug policy

 

tax sales - notice - due process - jurisdiction to order/confirm sale

In re Judicial Tax Sale – Lackawanna County – Cmwlth. Court – May 10, 2021

Held: Where there is evidence that proper notice of a tax sale was not given, or where there is doubt that it was given, failure to comply with additional reasonable efforts under 72 P.S sec. 5860.607a to give notice of tax sale deprives a court, ab initio, of jurisdiction to consider or order a judicial sale of property on account of non-payment of taxes.  Noncompliance with the law’s notice requirements under sec. 607a “is a jurisdictional defect that can void a judicial sale” – which defect can be raised at any time.

From the opinion:

Fundamental rights at issue – 

“Given the fundamental rights at issue when the government sells private property for nonpayment of taxes and the critical role compliance with the Law’s reasonable notice requirements plays in protecting those fundamental rights, Ms. Brown’s arguments that noncompliance with the Law’s requirements is a jurisdictional defect that can void a judicial sale are persuasive and supported by our caselaw. As we held in Manu, “[f]ailure to strictly comply with the service requirement[s] deprives the court of jurisdiction to authorize a sheriff’s sale.” 76 A.3d at 605-06. This is because “[s]trict compliance with the service requirement protects the procedural due process rights of all interested parties to notice and an opportunity to be heard and guards against deprivation of property without substantive due process of law.” Id. at 606 (emphasis added); see also Fraisar, 892 A.2d at 77 (“The rules governing service . . . [are] to ensure notice . . . .”). In cases where, as here, the sale of property is directed by the court of common pleas it is important for that court to “make ‘an independent inquiry’ regarding . . . strict compliance with the service requirement[s],” Manu, 76 A.3d at 605, in order to confirm that it has jurisdiction. . . .Further, the confirmation of proper service and notice is crucial in judicial sales because the statute of limitations to challenge such sales is a mere six months, as opposed to the six-year limitations period available to challenge upset tax sales. Absent jurisdiction, common pleas lacked the authority to approve the judicial sale of the property in the first instance.

Purpose of tax collection law is not to deprive citizens of their property

We must be cognizant that the purpose of the Law is to ensure the collection of taxes, not to deprive citizens of their property. Rinaldi, 22 A.3d at 315. These provisions “were never meant to punish taxpayers who omitted through oversight or error . . . to pay their taxes.” In re Return of Sale of Tax Claim Bureau, 76 A.2d 749, 753 (Pa. 1950). Our Supreme Court has stated that, over time, “taxing authorities have lost sight of the fact that it is a momentous event under the United States and the Pennsylvania Constitutions when a government subjects a citizen’s property to forfeiture for the non-payment of taxes.” Tracy v. Cnty. of Chester, Tax Claim Bureau, 489 A.2d 1334, 1339 (Pa. 1985) (emphasis added). “It is a fundamental provision of both our state and federal constitutions that no person shall be deprived of property except by the law of the land or due process of law,” which requires notice and an opportunity to be heard. Hess v. Westerwick, 76 A.2d 745, 748 (Pa. 1950). Such notice must be reasonable under the circumstances. Id. 

The General Assembly has established, via the Law, what notice is reasonably required prior to selling a property at tax sale. These notice requirements are mandatory and must be strictly construed. Mfrs. & Traders Tr. Co. v. Luzerne Cnty. Tax Claim Bureau, 56 A.3d 36, 39 (Pa. Cmwlth. 2012). One of these mandatory requirements is a tax claim bureau’s obligation to make reasonable efforts to find an owner pursuant to Section 607.1 when mailed notice is returned or when there is doubt that the owner received such notice. 

UC - voluntary quit - unjust accusations, abusive treatment, use of profanity

Spectrum Community Services, Inc. v. UCBR – Cmwlth. Court – May 24, 2021 – unreported memorandum decision**

Claimant held to have had necessitous and compelling reason to quit her job, where her employer had unjustly accused her of dishonesty and addressed her in abusive and profane manner over a period of time.

From the opinion –

Under Section 402(b) of the UC Law, “[w]here a claimant has voluntarily quit employment, in order to obtain benefits, [the claimant] must show that [the claimant] left [his or her] employment for necessitous and compelling reasons.” Collier Stone Co. v. UCBR., 876 A.2d 481, 484 (Pa. Cmwlth. 2005). Here, it is undisputed that Claimant voluntarily left her employment. Thus, the burden is on Claimant to show that she had a necessitous and compelling reason to do so. Latzy v. UCBR, 487 A.2d 121, 123 (Pa. Cmwlth. 1985). 

To satisfy this burden, Claimant must demonstrate that: “(1) circumstances existed which produced real and substantial pressure to terminate employment; (2) such circumstances would compel a reasonable person to act in the same manner; (3) the claimant acted with ordinary common sense; and (4) the claimant made a reasonable effort to preserve [her] employment.” Brunswick Hotel & Conf. Ctr., LLC v. UCBR, 906 A.2d 657, 660 (Pa. Cmwlth. 2006). Whether a claimant had necessitous and compelling reasons for terminating his employment is a question of law subject to review by this Court. Wise v. UCBR., 111 A.3d 1256, 1261 (Pa. Cmwlth. 2015). 

“Mere dissatisfaction with one’s working conditions does not constitute cause of a necessitous and compelling nature for terminating one’s employment.” Brunswick Hotel, 906 A.2d at 660. Likewise, “[p]ersonality conflicts, absent an intolerable work atmosphere, do not amount to a necessitous and compelling cause for leaving one’s employment.” Wert v. Unemployment Comp. Bd. of Rev., 41 A.3d 937, 940 (Pa. Cmwlth. 2012). However, the Court has recognized that “abusive conduct” may constitute a necessitous and compelling reason to voluntarily quit. First Fed. Sav. Bank v. UCBR., 957 A.2d 811, 816 (Pa. Cmwlth. 2008). This includes being called names or being “subject to criticism and ridicule from [a superior] that was uncalled for and incorrect.” Id. at 817. Similarly, an accusation of dishonesty or theft can serve as a necessitous and compelling reason to justify voluntarily quitting. Arufo, 391 A.2d at 45. Even “a single accusation, if the circumstances surrounding the incident warrant, may produce sufficient pressure to terminate employment that would compel a reasonable person to act.” Sol Neft Sports v. UCBR, 610 A.2d 539, 541 (Pa. Cmwlth. 1992) (emphasis omitted). 

In addition to the above cases, the Court relied heavily on Arufo v. UCBR, 391 A.2d 43 (Pa. Cmwlth. 1978) and Indiana Univ. of Pa. v. UCBR, 202 A.3d 195 (Pa. Cmwlth. 2019)

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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

MDJ appeals - proof of service of notice of appeal - dismissal

Kelley v. Harr – Pa. Super. – May 4, 2021 – non-precedential decision**

http://www.pacourts.us/assets/opinions/Superior/out/J-A02032-21m%20-%20104765738134426335.pdf?cb=1

 

Held: Court refused to reinstate Plaintiff’s appeal, which was dismissed when defendant/appellee filed praecipe for dismissal when plaintiff/appellant failed to file proof of service of notice of appeal in this civil, non-LT case.

 

MDJ Rule 1005(B) requires an appellant to file “proof of service of copies of the notice of appeal. . . within 10 days after filing the notice of appeal.” Appellant failed to do so.  MDJ Rule 1006 provides a mechanism for an appellee to have the appeal stricken “upon praecipe, for failure to file a proof of service: ‘Upon failure of the appellant to comply with Rule 1004A or Rule 10056, the prothonotary shall, upon praecipe of the appellee, mark the appeal stricken from the record." Pa.R.C.P.M.J.D. 1006. 

 

However, Rule 1006 also allows the Court of Common Pleas to reinstate the appeal "upon good cause shown." Id. In this usage, "good cause" "require[s] an appealing party to proffer some legally sufficient reason for reinstating the appeal." Slaughter , 636 A.2d at 1123 (citing Anderson v. Centennial Homes, Inc., 594 A.2d 737, 739 (Pa.Super. 1991)). Appellant filed to provide such proof. Pro se status, without more, is not good cause.

 

Moreover, appellant here did not provide any record evidence of actually having served the notice of appeal, regardless of the failure to provide proof of any such service.

 

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**An unreported, non-precedential Superior Court case decided after May 1, 2019, may be cited for its persuasive value, but it is not binding precedent.  See 210 Pa. Code 65.37(B).

 

 

 

 

federal courts - motion to proceed anonymously

Jane Doe v. College of New Jersey – 3d Cir. – May 18, 2021

https://www2.ca3.uscourts.gov/opinarch/202469p.pdf

 

Motion to proceed anonymously denied.

 

From the opinion –

 

We turn to the non-exhaustive, multi-factor test we employed in Doe v. Megless, Doe v. Megless, 654 F.3d 404, 408 (3d Cir. 2011) where we asked whether the plaintiff presented a reasonable fear of severe harm meriting an exception to “the public’s common law right of access to judicial proceedings.” 654 F.3d at 408 (citation omitted); see Fed. R. Civ. P. 10(a) (“The title of the complaint must name all the parties[.]”). The factors in favor of anonymity include: 

(1) the extent to which the identity of the litigant has been kept confidential; (2) the bases upon which disclosure is feared or sought to be avoided, and the substantiality of these bases; (3) the magnitude of the public interest in maintaining the confidentiality of the litigant's identity; (4) whether, because of the purely legal nature of the issues presented or otherwise, there is an atypically weak public interest in knowing the litigant's identities; (5) the undesirability of an outcome adverse to the pseudonymous party and attributable to his refusal to pursue the case at the price of being publicly identified; and (6) whether the party seeking to sue pseudonymously has illegitimate ulterior motives. 

Megless, 654 F.3d at 409 (citation omitted). The factors advising against anonymity include: 

(1) the universal level of public interest in access to the identities of litigants; (2) whether, because of the subject matter of this litigation, the status of the litigant as a public figure, or otherwise, there is a particularly strong interest in knowing the litigant's identities, beyond the public's interest which is normally obtained; and (3) whether the opposition to pseudonym by counsel, the public, or the press is illegitimately motivated. 

Id. (citation omitted). 

 

 

Pa. Consumer Protection Law - right to jury trial

Senter v. Mr. Rooter of Pittsburgh – Pa. Superior Court – April 27, 2021 – unreported memorandum decision**

 

In dictum in n. 3, the Court calls into question the validity of its own prior decision in a 2017 case, holding that a plaintiff under the state consumer protection law, 73 P.S. sec. 201-1 et seq., does not have a right to a jury trial.

 

Here’s what the Court said in n. 3:

 

The trial court reasoned that a plaintiff has no right to a jury trial on a UTPCPL claim, citing Krishnan v. Cutler Group, Inc., 171 A.3d 856 (Pa. Super. 2017). . . .However, the relevant statement in Krishnan appeared in a three-paragraph quotation of the trial court’s opinion, which also addressed other issues. See Krishnan, 171 A.3d at 863, quoting Trial Ct. Op. at 1-2 (“There being no right to a jury trial under the UTPCPL, the court scheduled the jury trial on [Appellees’] common law claims to begin[.]”). The remainder of the Krishnan opinion presented no discussion on the accuracy of this statement. 

Our review of the UTPCPL and relevant decisional law reveals no such authority, for the principle that a UTPCPL claim may not be presented to a jury. Indeed, several decisions by this Court have implicitly approved — by not addressing the propriety of — the presentation of a UTPCPL claim to the jury. See, e.g. Berg v. Nationwide Mut. Ins. Co., 189 A.3d 1030, 1034 (Pa. Super. 2018) (jury found UTPCPL violation, but this Court vacated trial court’s finding of bad faith), appeal granted in part and affirmed on other grounds, 235 A.3d 1223 (Pa. 2020) (plurality); Bennett v. A.T. Masterpiece Homes at Broadsprings, LLC, 40 A.3d 145, 149 (Pa. Super. 2012) (affirming jury finding of UTPCPL violation); Neal v. Bavarian Motors, Inc., 882 A.2d 1022, 1032 (Pa. Super. 2005) (affirming jury finding of UTPCPL violation, but remanding for trial court to recalculate award of attorneys’ fees). Nevertheless, neither party has challenged the bifurcated nature of the trial. 

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**An unreported, non-precedential Superior Court case decided after May 1, 2019, may be cited for its persuasive value, but it is not binding precedent.  See 210 Pa. Code 65.37(B).

 

 

UC - employer contribution tax rate

Rothrock Motor Sales v. UC Tax Services – unreported, memorandum decision** – Cmwlth. Court – April 27, 2021

 

Note: This decision is being posted to the UC listserv, because it shows how an employer’s UC contribution tax rate is  calculated.

Held: Court affirmed denial of employer appeal of it UC contribution tax rate, due to employer’s failure to comply with DOLI wage reporting requirements

Under Section 301(a)(1) of the Law, an employer’s tax contribution is calculated by multiplying the employer’s taxable wages paid during a fiscal year by the tax rate assigned by the Department. 43 P.S. § 781(a)(1). Taxable wages are determined by wage reports submitted by employers to verify their employee wages paid during the fiscal year. Section 304 of the Law, 43 P.S. § 784; 34 Pa. Code § 63.52. The Department’s regulations require that wage reports be filed through the UC Management System (UCMS), a Department-run electronic filing system. 34 Pa. Code § 63.52(e). The filing date of a report is the date of receipt by UCMS. Id. § 63.52(f). Payments are to be made concurrently with each report. Section 305 of the Law, 43 P.S. § 785. An employer’s tax contributions are held in a reserve account established and maintained by the Department. Section 302 of the Law, 43 P.S. § 782.

An employer’s tax rate is calculated based on “employer experience,” or its history and regularity of filing reports and paying tax contributions. Employers with high employer experience are eligible for a reduced tax rate; employers with less experience, or employers that fail to either timely file reports or pay tax contributions, are assigned a standard tax rate. See generally Section 301.1 of the Law, 43 P.S. § 781.1.

Employers that qualify for an adjusted tax rate under Section 301.1 of the Law are further categorized into Group 1, 2, or 3, with Group 3 having the most experience. Id. § 781.1(b)(1). An employer retains its group designation once classified under Section 301.1(b)(1); however, it must still meet the requirements of that group to qualify for an adjusted tax rate.  A Group 3 employer must make tax contributions for at least one quarter in each of the four fiscal years prior to the tax rate’s effective date. Id. Simply put, high employer experience, accrued by timely reporting and accurate payments, results in a lower tax rate in the next fiscal year, while insufficient experience results in the standard tax rate. 

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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

 

 

 

UC - fault overpayment - finding required on claimant's state of mind - effect of receipt of UC Handbook

Harris v. UCBR – Cmwlth. Court – March 17, 2021 – precedential – reported decision

http://www.pacourts.us/assets/opinions/Commonwealth/out/401CD20_3-30-21.pdf?cb=2

 

Held: UCBR erred in finding claimant was guilty of a fault overpayment, since the Board did not make any finding about the claimant’s state of mind and did not establish gross negligence on the part of claimant.

 

Fault - Section 804(a) of the Law provides that “[a]ny person who by reason of his fault has received any sum as compensation under this act to which he was not entitled, shall be liable to repay . . . a sum equal to the amount so received by him and interest.” Under Section 804(b) of the Law, 43 P.S. § 874(b), where the compensation is issued or received due to no fault of the claimant, recoupment of funds is deducted from future compensation, if any, as opposed to imposing a fault overpayment. 

The word “fault” in Section 804(a) means “an act to which blame, censure, impropriety, shortcoming, or culpability attaches.” Fugh v. Unemployment Comp. Bd. of Rev., 153 A.3d 1169, 1174 (Pa. Cmwlth. 2017) (quoting Daniels v. Unemployment Comp. Bd. of Rev., 309 A.2d 738, 742 (Pa. Cmwlth. 1973)).  Negligence alone is not sufficient to establish fault. Id. at 1176-77. Rather, fault is demonstrated by a showing of knowing recklessness or gross negligence. Id. at 1176. The Board or Referee must make findings concerning an actor’s state of mind in order to establish fault. Castello v. Unemployment Comp. Bd. of Rev., 86 A.3d 294, 298 (Pa. Cmwlth. 2013). [emphasis added] An actor’s intent may be ascertained through circumstantial evidence, however. See Cochran v. Cmwlth., 450 A.2d 756, 759 (Pa. Cmwlth. 1982). 

Gross negligence - The Pennsylvania Supreme Court recently defined the concept of gross negligence in Feleccia v. Lackawanna College, 215 A.3d 3 (Pa. 2019). The Feleccia Court explained, “gross negligence involves more than a simple breach of the standard of care (which would establish ordinary negligence), and instead describes a ‘flagrant’ or ‘gross deviation’ from that standard.” Id. at 21. Importantly, however, the Court noted that “gross negligence does not rise to the level of the intentional indifference or ‘conscious disregard’ of risks that defines recklessness, but it is defined as an ‘extreme departure’ from the standard of care, beyond that required to establish ordinary negligence, and is the failure to exercise even ‘scant care.’” Id. at 20. 

Gross negligence is not established where the claimant shared his PIN # with his daughter two years before he was mailed UC Handbook did not alone established gross negligence. Claimant had no reason to think to rescind his information from his daughter, even if he looked at the UC Handbook and saw the warning. Claimant did not learn of the daughter’s fraud until 2016 or 2017, at which time he participated in several investigations against her. The Board makes a significant leap from the mailing of the UC Handbook to gross negligence without showing exactly how Claimant’s deviation from the standard of care was gross.

Under the Board’s interpretation, every claimant who receives a UC Handbook in the mail commits gross negligence if they violate its terms. This absurd result reveals the difficulty in squaring the Board’s argument with the present facts. Accordingly, while we held in the substantial evidence section that the lack of testimony concerning the UC Handbook and Claimant’s awareness did not preclude the Board’s findings of fact, we conclude it is fatal to the Board’s showing of gross negligence. The fact that Claimant should have been aware of the UC Handbook’s restrictions does not, without more, necessarily constitute gross negligence. As a result, we conclude the Board erred as a matter of law in determining Claimant’s actions constituted gross negligence and in imposing a fault overpayment. 

 

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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.

 

 

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) 

++++++

 

**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.