eNotes: Liability – April 2024 – Pennsylvania

SIGNIFICANT CASE SUMMARIES

Pennsylvania Case Summaries

Ivy Hill Congregation of Jehovah’s Witnesses v. Dep’t of Human Servs.
Pennsylvania Supreme Court
No. 65 MAP 2022

Decided: February 13, 2024

Commonwealth Court erred by disregarding prior rulings and violating the coordinate jurisdiction rule.

Background

The Supreme Court of Pennsylvania considered whether the Commonwealth Court violated the coordinate jurisdiction rule in dismissing a Petition filed under the Declaratory Judgments Act. The Petition was filed by Ivy Hill Congregation of Jehovah’s Witnesses (“Ivy Hill”). “Elders” of Ivy Hill sued the Pennsylvania Department of Human Services (“DHS”) and asked the Commonwealth Court to issue summary relief declaring, as a matter of law, that the Elders are exempt from Pennsylvania’s mandatory reporting of known or suspected child abuse, including child sexual abuse. Pennsylvania’s clergy mandatory reporting law has an exception which applies when a clergy member learns of the child abuse under circumstances that require him or her to keep the information secret or confidential. Ivy Hill argued that under the tenets of its religion, Elders are required to keep sensitive information from its congregation members private, therefore falling within this exception.

DHS filed Preliminary Objections to the Petition for summary relief, asserting: (1) the Petition should be dismissed because Ivy Hill lacked standing, in that it failed to allege it has been aggrieved or that there is an actual controversy between the parties; (2) the Petition should be dismissed because Ivy Hill failed to join indispensable parties, including law enforcement officials (e.g. the Attorney General) who are responsible for investigating and prosecuting individuals who fail to report; (3) Count I of the Petition should be dismissed because Ivy Hill failed to exhaust its administrative remedies; (4) Count I of the Petition should be dismissed because the requested relief will not terminate the alleged uncertainty regarding future enforcement actions; and (5) Count II of the Petition should be dismissed because it lacked merit.

Holding

The Commonwealth Court overruled DHS’s objections, but also denied Ivy Hill’s Petition for summary relief (“Ivy Hill I”). Observing that there “is no evidentiary record at this juncture concerning matters such as the doctrine and organization of Jehovah’s Witnesses upon which to make such a determination,” the Commonwealth Court held that Ivy Hill’s right to relief was not clear. Thereafter, DHS filed an Answer and New Matter to Ivy Hill’s Petition, and the parties proceeded to discovery. Ultimately, the Commonwealth Court dismissed the lawsuit, holding that there was no actual controversy raised by the lawsuit, since DHS had never brought any legal action against Ivy Hill related to mandatory reporting. The Commonwealth Court added that DHS is not the proper enforcement agency to take legal action against Ivy Hill. The Commonwealth Court thus effectively held that Ivy Hill sued the wrong party (“Ivy Hill II”).

Ivy Hill appealed to the Supreme Court, arguing that the Commonwealth Court erred in holding it did not have jurisdiction to address the Petition, and, further, that the Commonwealth Court’s decision dismissing the Petition conflicted with its decision in Ivy Hill I, thus violating the coordinate jurisdiction rule. Upon review, the Supreme Court found it evident that the Commonwealth Court’s decision violated the coordinate jurisdiction rule. As discussed above, the Court in Ivy Hill II concluded that DHS was not a proper Defendant because the record “does not establish that DHS opposes, has sued, or threatened to sue,” because DHS “cannot even initiate litigation,” and because “imminent and inevitable litigation” requires the presence of “antagonistic claims.” Departure from the coordinate jurisdiction rule “is allowed only in exceptional circumstances such as where there has been an intervening change in the controlling law, a substantial change in the facts or evidence giving rise to the dispute in the matter, or where the prior holding was clearly erroneous and would create a manifest injustice if followed.” As the Supreme Court found no reason to depart from the coordinate jurisdiction rule, it remanded the case to the Commonwealth Court for further proceedings.

Questions about this case can be directed to Taryn Vender at (570) 825-4794 or tvender@tthlaw.com.

Aloia v. Diament Bldg. Corp.
Pennsylvania Superior Court
No. 1621 EDA 2023

Decided: March 11, 2024

Following recent precedent, in this unpublished decision, the Superior Court held that the statute of repose related to construction projects applies to UTPCPL claims, and Plaintiffs’ claims were time barred, as the occupancy permit issued for the subject structure was record evidence of lawful construction.

Background

The home at issue in this matter was built in 2006 by Defendant, with an addition and finished basement competed in 2007. Certificates of occupancy were issued for both. Plaintiffs, a married couple, were not the original owners, but purchased the home in 2016 from a foreclosure sale. Plaintiff husband, who works in commercial construction, was aware of the issues with stucco systems in newly constructed homes in the area. Prior to Plaintiffs’ purchase of the home, they spoke with Defendant, who attested to the quality of the work in constructing the property.

Plaintiffs purchased the home in 2016. In Fall of 2018, Plaintiffs began to experience moisture and water infiltration at the home. Plaintiffs filed suit in 2021. After Preliminary Objections, the operative Complaint set forth one count alleging a violation of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (“UTPCPL”). In Defendant’s Answer and New Matter, it pled the statute of repose as an affirmative defense. After Plaintiffs filed a Reply to the New Matter, Defendant filed a Motion for judgment on the pleadings, seeking dismissal based on the statue of repose. The Trial Court granted the Motion and dismissed the matter with prejudice. Plaintiffs timely appealed.

On appeal, Plaintiffs argued that the statute of repose was not applicable because Defendant’s alleged building code violations made the construction of the home “unlawful.” Plaintiffs also argued that the certificate of occupancy was not the triggering event for the statute of repose, as construction continued at the residence after the certificates were issued. Plaintiffs lastly argued that the statute of repose did not apply to their claims raised under the UTPCPL, which alleged fraud based on Defendant’s statements concerning the quality of the construction.

Holding

The Superior Court, reviewing the Trial Court’s ruling for error of law, affirmed the Trial Court’s Order granting Defendant’s Motion for summary judgment. Citing its recent decision in Johnson v. Toll Bros., the Superior Court held that the occupancy permit constituted evidence of record that the construction was lawfully completed. Even taking the later issued certificate of occupancy after the addition and basement were completed in 2007, the statute of repose period expired on February 20, 2019. As it was uncontested that the case commenced on March 5, 2021, the statue of repose barred Plaintiffs’ claims as a matter of law. The Superior Court likewise rejected Plaintiffs’ arguments that the issuance of a certificate of occupancy is not the triggering event for the statute of repose.

Lastly, the Superior Court rejected Plaintiffs’ argument that the statute of response does not apply to claims raised under the UTPCPL, which alleged fraud based on Defendant’s statements regarding the quality of the construction. The Court found that the statute of repose applied to the UTPCPL claims because they arise out of the allegedly defective construction of the residence.

Questions about this case can be directed to Laura Daube at (717) 441-3955 or ldaube@tthlaw.com.

D’Amico v. Covanta Holding Corp.
Pennsylvania Superior Court
No. 692 EDA 2023

Decided: February 28, 2024

Trial Court gave misleading instructions to the jury on whether owner retained sufficient control over independent contractor’s work to be liable, entitling owner of premises to a new trial.

Background

This case arises out of an accident that occurred on December 19, 2017 during work performed by Sirk Mechanical Services, Inc. Covanta contracted with Sirk to perform work at Covanta facilities. Plaintiff, Justin D’Amico, a welder for Sirk, was injured on the job when a tarping station catwalk fell off a forklift and landing on him causing serious injuries. The accident occurred because another Sirk employee, who was not properly trained as a forklift operator, lifted the catwalk with a forklift at Plaintiff’s request without properly securing it to the forklift.

At trial, multiple fact and expert witnesses testified concerning the accident and Covanta’s control over the work Sirk was performing at the facility. While there was evidence that Covanta imposed safety requirements on Sirk, and that Covanta could order work to stop if safety precautions were not being met, there also was evidence presented that Covanta exercised greater control over the manner in which Sirk did its work on the job. The Trial Court instructed the jury, in part, that “a land owner is subject to liability if an owner retains in control over the manner in which the work is done on its premise[s]. One who entrust[s] work to be done by the contractor, but retains control for any part of work is subject to liability . . . .” The Trial Court denied Covanta’s request for a clarifying jury instruction on the law that retaining some authority over safety and enforcing safety requirements is not sufficient to impose liability for injuries caused by an independent contractor. The jury found in favor of the Plaintiff, determining that Plaintiff was 27% negligent and Covanta was 73% negligent.

Holding

Generally, a property owner who hires an independent contractor to work on its property is not liable for acts or omissions of the contractor or its employees. An exception to this rule of nonliability exists under Section 414 of the Restatement (Second) of Torts, which provides that one who entrusts work to an independent contractor, but who retains control of any part of the work, is subject to liability for physical harm to others for whose safety the employer owes a duty to exercise reasonable care. The property owner’s retention of a general right to order work stopped or resumed, to inspect the contractor’s work, to make suggestions or recommendations, or to prescribe alterations, does not constitute retention of control sufficient to permit it to be held liable for injuries caused by its independent contractor. Rather, the property owner is liable only if it retains control over the method, manner, or operative detail of doing the work, to the degree that the contractor is not free to do the work in its own way.

The Appellate Court held that the Trial Court committed reversible error in its instructions to the jury on whether Covanta retained sufficient control over Sirk’s work such that it could be liable for Sirk’s negligence. The jury charge completely omitted any instruction on whether the retention of some authority over safety and enforcement of safety requirements can constitute the kind of retention of control sufficient to find liability. Without any instruction on this issue, the jury charge was misleading, prejudicial and inaccurate, as it instructed that any control over any part of the work was sufficient for liability.

Questions about this case can be directed to Randy Burch at (610) 332-7025 or rburch@tthlaw.com.

Country Pools & Spas, Inc. v. Erie Ins. Exch.
Pennsylvania Superior Court
No. 375 WDA 2023

Decided: February 27, 2024

Insurance carrier had no duty to defend unjust enrichment action against its insured because the underlying claims were contractual in nature and not an “accident” or “occurrence” contemplated or covered by the provisions of the insurance policy.

Background

Erie Insurance appealed the Trial Court’s Order denying its Motion for summary judgment and compelling it to defend and indemnify its insured, Country Pools, in an underlying lawsuit that was filed by Ty and Carissa Schott (“the Schotts”), pursuant to a commercial general liability policy issued by Erie. By way of background, the Schotts’ Complaint set forth claims against Country Pools for unjust enrichment, violating the Home Improvement Consumer Protection Act (“HICPA”), and violating the Unfair Trade Practices and Consumer Protection Law (“UTPCPL”). Specifically, the Schotts alleged that Country Pools refused to refund a portion of their deposit; failed to include certain contractual provisions mandated by HICPA; and knowing misrepresented services by engaging in fraudulent and deceptive conduct in violation of the UTPCPL.

Erie moved for summary judgment in the declaratory action on the basis that the allegations in the underlying action did not constitute an “occurrence” or “accident” under the policy, which as mentioned above was denied by the Trial Court. On appeal, the Superior Court interpreted the language of the policy and took notice of the fact that intentional acts are not “occurrences.”

Holding

The Superior Court ultimately held that because the policy provided no coverage over the Schott action, Erie was entitled to summary judgment. In reaching its decision, the Court found that the claims against Country Pools were not accidental, but were contractual in nature and based on intentional conduct by Country Pools, which could not be considered an occurrence under the policy. The Court also noted that the purpose and intent of such an insurance policy is to protect the insured from liability for essentially accidental injury to the person or property of another, and not for the purpose of providing coverage for disputes between parties to a contractual undertaking.

Questions about this case can be directed to Danielle Vols at (570) 825-6890 or dvols@tthlaw.com.

Watson v. Baby Trend, Inc.
Pennsylvania Superior Court
No. 2356 EDA 2022

Decided: January 12, 2024

Lawsuit against car-seat manufacturer was not properly venued in Philadelphia County where direct sales to Philadelphia consumers constituted .002 percent of the company’s total sales.

Background

This case arose out of the tragic death of an infant who fell asleep in a car seat manufactured by Baby Trend, Inc., and died from asphyxiation. The parents of the child, who resided in Bucks County, Pennsylvania, brought suit in Philadelphia against Baby Trend.

Baby Trend, Inc. is a California-based company. Venue discovery showed that roughly 99.5 percent of its sales were to “big-box” retailers. Its total direct-to-consumer sales made up less than 1 percent of its business. Baby Trend did not maintain any offices, salespersons or employees in Philadelphia. It was not registered in Philadelphia and did not hold any licenses there. Baby Trend made 23 total direct consumer sales to Philadelphia residents in 2021, comprising approximately .0018 percent of its total business. Given its lack of connection to Philadelphia County, Baby Trend moved to have venue transferred to Bucks County, which the Trial Court granted.

Holding

The Superior Court held that Baby Trend’s direct sales to Philadelphia residents were de minimis and purely incidental. Such sales were not essential to Baby Trend’s business objective of being a wholesaler of juvenile items to retail chains. Plaintiffs cited no authority for the proposition that the “big box” retailers’ sales of Baby Trend’s products should be deemed part of Baby Trend’s business activities in Philadelphia. The Superior Court confirmed that Baby Trend had no control over further sales once it sold its products to retailers. As such, and particularly when coupled with Baby Trend’s lack of any physical presence in Philadelphia through which Baby Trend accomplished its business objectives, Baby Trend did not have continuous, habitual or regular contacts with Philadelphia County. The transfer of venue to Bucks County was thus affirmed.

Questions about this case can be directed to William Novick at (610) 332-7029 or wnovick@tthlaw.com.