Justia Pennsylvania Supreme Court Opinion Summaries

Articles Posted in Business Law

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In 2015 the Pittsburgh City Council passed and Mayor William Peduto (collectively, “the City”) signed the Paid Sick Days Act (“PSDA”) and the Safe and Secure Buildings Act (“SSBA”). Plaintiff-appellees (collectively, “Challengers”) filed suit seeking declaratory and injunctive relief, challenging the PSDA’s and SSBA’s validity on the basis that the HRC precluded the City from imposing the burdens those ordinances entailed upon local employers. The Allegheny County Court of Common Pleas considered the challenges to both laws, and found, in separate decisions issued within four days of each other, that both ordinances were ultra vires as impermissible business regulations pursuant to Section 2962(f) of the Home Rule Charter and Optional Plans Law (“the HRC”). The Pennsylvania Supreme Court was asked to consider whether these ordinances ran afoul of the qualified statutory preclusion of local regulations that burden business. The Court held that the PSDA did not exceed those limitations, but that the SSBA did. View "Pa. Rstrnt & Lodging v. City of Pittsburgh" on Justia Law

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At the times relevant to this litigation, the appellants, Baer Buick GMC and Grata Chevrolet (“Dealers”), and the appellee, General Motors, LLC, were parties to dealer sales and service agreements, per which Dealers sold and serviced vehicles manufactured by General Motors. Under the contractual terms, Dealers committed to performing repairs required by limited warranties extended by General Motors upon sales with no additional charge to customers (albeit that the projected cost of such repairs was factored into the purchase price for new vehicles). General Motors was then required to reimburse Dealers in accordance with a Service Policies and Procedures Manual (the “SPPM”). Through the SPPM, General Motors agreed to pay dealers at large for labor during warranty work under either of two options, denominated “Option A (Retail Rate) and Option C (CPI-based).” Option C, apparently, was the preferred option among dealers for labor reimbursement. General Motors’ standard reimbursement policy for parts installed in connection with warranty repairs was to pay one hundred and forty percent of the dealers’ costs. Apparently, both labor reimbursement alternatives, Options A and C, were initially made available to all dealers regardless of whether they sought reimbursement for parts under the standard contractual methodology or invoked an alternative rate, presumably under a governing regulatory statute. In 2012, however, General Motors instituted a policy effectively rendering any dealer pursuing an alternative reimbursement methodology for calculating warranty parts reimbursement ineligible for contractually-based Option C reimbursement for labor. Dealers, along with several other franchise dealers, lodged a protest with the State Board of Vehicle Manufacturers, Dealers and Salespersons (the “Board”), claiming that General Motors violated Section 9(a)(3) of the Board of Vehicles Act by contractually changing the manner in which it reimbursed dealers for warranty labor, when Dealers had merely exercised their statutory rights concerning reimbursement for warranty parts. They also challenged General Motors’ ability to impose a surcharge on dealers that elect the statutory retail reimbursement rate for warranty parts but not labor. In response, General Motors contended that nothing in the Act guaranteed dealers the right to participate in Option C, which was purely a matter of contract. After review, the Pennsylvania Supreme Court affirmed the order of the Commonwealth Court as it related to Section 9(a), and reversed as concerned Section 9(b.4)(1)(i). View "General Motors, LLC v. St Brd/Vehicle Manufacturer" on Justia Law

Posted in: Business Law, Contracts

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In this premises liability case, John Stapas sued Giant Eagle and related entities (collectively Giant Eagle) for injuries he sustained at a GetGo convenience store. At the time of the incident, Stapas was 17 years old and worked full-time as a busboy and dishwasher at a restaurant, earning $8.25 per hour plus $14.00-$20.00 per shift in tips. In 2007, Stapas went to GetGo after his restaurant shift. At GetGo, he was talking to his friend, Crystal Stogden, who worked the night shift there. Minutes after Stapas arrived, a customer exiting the store held the door open for Brandon McCallister to enter. McCallister had been banned from patronizing that GetGo location. McCallister, who appeared intoxicated, started arguing with Stogden about his ban. Stapas was not initially involved in the argument. After about one minute, Stapas intervened to attempt to diffuse the argument and protect Stogden and another female employee, LaToya Stevens. Eventually, Stapas, McCallister, Stogden, and Stevens exited the store into the parking lot area. Outside the store, McCallister’s friend was waiting for him. Stapas told Stogden to get back inside the store, and Stevens remained outside. McCallister continued screaming at the employees as Stapas followed him to his vehicle, insisting that he leave. As they approached McCallister’s car, McCallister initiated a physical fight with Stapas. During the fight, McCallister pulled out a gun, which he had concealed on his person, and shot Stapas four times. Stapas missed six weeks of work while recovering from the injuries, and he continued to have daily stomach pain from the shooting. In this appeal by allowance, we consider whether Giant Eagle was required to object to the jury’s verdict awarding future lost wages to preserve its challenge to the verdict, which Giant Eagle labeled as a weight of the evidence challenge in its post-trial motion. The Pennsylvania Supreme Court concluded that an objection to a jury’s verdict premised on trial errors, correctable before the jury is discharged, must be raised before the jury is discharged. Accordingly, the Court reversed the Superior Court’s order awarding Giant Eagle a new trial on damages. View "Stapas. v. Giant Eagle" on Justia Law

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In November 2014, officers from the Pennsylvania State Police, Bureau of Liquor Control Enforcement (Bureau) conducted an investigation regarding underage persons present inside appellee Jet-Set Restaurant, LLC (Jet-Set), a licensed establishment located in Reading, Berks County. Bureau officers identified four underage females inside Jet- Set. The officers observed three of the four females enter Jet-Set after providing a doorman with identification that showed they were underage. Bureau officers also observed one of the females purchase a bottle of beer inside Jet-Set and another one of the females consume two bottles of beer purchased by another customer. Bureau officers subsequently learned one of the females had been inside Jet-Set before. The Bureau cited Jet-Set for: (1) permitting minors to frequent the premises in violation of Section 4-493(14) of the Liquor Code (frequenting count); and (2) furnishing alcohol to underage minors in violation of Section 4-493(1) of the Liquor Code, 47 P.S. 4-493(1) (furnishing count). The Bureau appealed the dismissal of the frequenting count, but both the Pennsylvania Liquor Control Board and the Berks County Court of Common Pleas affirmed the dismissal on the basis that “frequent” means “to visit often or to resort to habitually or to recur again and again, or more than one or two visits” and the Bureau had not established a violation based on the isolated occurrence observed by Bureau officers in November 2014. The Pennsylvania Supreme Court granted discretionary review to determine whether the definition of “frequent” set forth in Appeal of Speranza, 206 A.2d 292 (Pa. 1965) continued to apply to Section 4-493(14) of the Liquor Code, 47 P.S. 4-493(14), in light of subsequent amendments to the statute. The Court concluded Speranza still controlled and, accordingly, affirmed the order of the Commonwealth Court. View "Pa. St. Police v. Jet-Set Restaurant, LLC" on Justia Law

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Appellant SCF Consulting, LLC lodged a civil complaint against Appellee, the law firm of Barrack, Rodos & Bacine, in the common pleas court. Appellant averred that it had maintained a longstanding oral consulting agreement with the law firm, which the firm purportedly breached in 2014. According to Appellant, the arrangement was for the solicitation of institutional investors to participate in securities class actions, and remuneration was to be in the form of a two-and-one-half to five-percent share of the firm’s annual profits on matters “originated” by Appellant’s principal or on which he provided substantial work. Appellant claimed the consulting agreement qualified as an express exception to the anti-fee-splitting rule for an employee “compensation or retirement plan, even though the plan is based in whole or in part on a profit-sharing arrangement.” Alternatively, Appellant argued Appellee’s attempt to invoke public policy as a shield was an “audacious defense” which, if credited, would perversely reward the law firm by allowing it to profit from its own unethical conduct. The county court agreed with Appellee’s position concerning both the nonapplicability of the exception to Rule 5.4(a)’s prohibition and the unenforceability of the alleged agreement. The Pennsylvania Supreme Court concluded the ultimate outcome of this case might turn on factual findings concerning Appellant’s culpability, or the degree thereof, relative to the alleged ethical violation. The Court held only that the contract cause of action was not per se barred by the purported infraction on Appellee’s part and, accordingly, the county court’s bright-line approach to the unenforceability of the alleged consulting agreement should not have been sustained. View "SCF Consulting, LLC. v. Barrack Rodos & Bacine" on Justia Law

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In 1998, in order to pursue a real estate investment and development project, Lynn and Connie Hanaway, T.R. White, Inc. (“T.R. White”), and several others formed a limited partnership, Sadsbury Associates, L.P. (“Sadsbury”). The Hanaways were among several limited partners of Sadsbury, while T.R. White served as the general partner. In 2002, acting independently from Sadsbury, T.R. White contracted for options to purchase two separate tracts of land. In 2005, prompted by the success of Sadsbury, the partners of Sadsbury formed The Parkesburg Group, LP (“Parkesburg”) in order to implement a new residential development project involving two tracts of land. T.R. White served as Parkesburg’s general partner, and the Hanaways were among several limited partners. Parkesburg’s limited partnership agreement gave T.R. White broad discretion to carry out its duties. Pursuant to the express terms of the agreement, T.R. White, as the general partner, controlled “the business and affairs of the Partnership.” The crux of this dispute concerned Parkesburg’s sale of the land to a newly formed limited partnership, Parke Mansion Partners (“PMP”). The Hanaways filed a six-count complaint against T.R. White, PMP, Parkesburg, and Sadsbury, alleging T.R. White, as general partner, breached Parkesburg’s limited partnership agreement. They viewed the sale of the Parkesburg tracts to PMP as a sham, executed to freeze them out of Parkesburg. The issue presented for the Pennsylvania Supreme Court’s review centered on the applicability of the implied covenant of good faith and fair dealing to a limited partnership agreement formed pursuant to Pennsylvania’s Revised Uniform Limited Partnership Act (“PRULPA”). The Superior Court reversed the trial court’s order, which had granted partial summary judgment in favor of Parkesburg’s general partner and against two of its limited partners. The Supreme Court reversed the Superior Court’s order in relevant part, holding that the implied covenant of good faith and fair dealing was inapplicable to the Pennsylvania limited partnership agreement at issue, which was formed well before the enactment of amendments that codified such a covenant. View "Hanaway v. Parkesburg Group" on Justia Law

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No fiduciary duty arises in a consumer transaction for the purchase of a whole life insurance policy based upon the advice of a financial advisor where the consumer purchasing the policy does not cede decision -making control over the purchase to the financial advisor. In 1995, Bryan Holland, a financial advisor for IDS Life Insurance Corporation, made an unsolicited telephone contact, a "cold call," to Eugene and Ruth Yenchi. At a subsequent meeting and for a fee of $350, Holland presented the Yenchis with a financial management proposal containing a notice that it had been prepared by "your American Express financial advisor" (Holland) and that "[alt your request, your American Express financial advisor can recommend products distributed by American Express Financial Advisors and its affiliates as investment alternatives for existing securities." The Proposal offered the Yenchis a number of general recommendations, including that they monitor monthly expenses, consolidate their debt, consider various savings plans, consolidate current life insurance policies into one policy, review long-term care coverage, keep accurate records for tax purposes (medical expenses and charitable contributions), transfer 401(k) funds into mutual funds, and continue estate planning with an attorney and their financial advisor. The Yenchis implemented some of these recommendations. In 2000, the Yenchis had their portfolio independently reviewed. Through this process, they were advised that Holland’s recommendations would be financially devastating to the Yenchis. In April 2001, the Yenchis sued Holland and his company, American Express Financial Services Corporation, American Express Financial Advisors Corporation, and IDS Life Insurance Company. The Yenchis' asserted claims of negligence/willful disregard, fraudulent misrepresentation, violation of the Uniform Trade Practices and Consumer Protection Law ("UTPCPL"), bad faith, negligent supervision, and breach of fiduciary duty. Of relevance here, with respect to the breach of fiduciary duty claim, the trial court held that no fiduciary relationship was established between the Yenchis and Holland because the Yenchis continued to make their own investment decisions. The Pennsylvania Supreme Court concluded that, consistent with its jurisprudence, no fiduciary duty arose in such a situation. Consequently, the Court reversed the Superior Court's decision to the contrary. View "Yenchi v. Ameriprise Financial" on Justia Law

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Morrison Informatics, Inc. (the “Company”) filed a petition for Chapter 7 Bankruptcy relief in September 2009. In May 2011, the Company and two shareholders, who also were officers of the corporation, commenced a civil action in the court of common pleas against Members 1st Federal Credit Union, Mark Zampelli, and Scott Douglass. In the ensuing complaint, the Company and the Shareholders asserted that, beginning sometime after January 2005 and continuing into 2009, the Company’s finance manager, Zampelli, had colluded with a Credit Union relationships officer, Douglass, to embezzle Company funds. The complaint advanced claims against the Credit Union, Zampelli, and Douglass variously sounding in fraud, conversion, civil conspiracy, and negligence. The question this case presented for the Supreme Court's review concerned whether a federal bankruptcy trustee could be substituted as a plaintiff in a civil action previously commenced by the debtor in bankruptcy in a Pennsylvania state court, although the statutory limitations period expired prior to the attempted substitution. "Although we recognize that the interests of a debtor and a trustee may diverge in some respects, we find it most important that trustees’ interests are derivative, and accordingly, they generally cannot assert any greater rights as against defendants than debtors could have in the first instance." The Supreme Court departed from the Superior Court’s focus on the continued “existence” of the Company after the initiation of insolvency proceedings, and the Court rejected a strict rule foreclosing a relation-back approach to substitution of a bankruptcy trustee for a debtor. Instead, the Court held that relation back in favor of a federal bankruptcy trustee was appropriate, at least where the trustee has acted in a reasonably diligent fashion to secure his or her substitution, and there is no demonstrable prejudice to defendants. View "Morrison Info. v. Members 1st FCU" on Justia Law

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Appellant Lower Merion Township was a township of the first class. Article IV of its municipal code required every person engaging in a business, trade, occupation, or profession in the Township to pay an annual business privilege tax calculated as a percentage of gross receipts. Appellees Fish, Hrabrick, and Briskin (“Lessors”) each own one or more parcels of real estate in the Township that they rent to tenants pursuant to lease agreements. The Township notified Lessors that, for every such parcel, they were obligated to purchase a separate business registration certificate and pay the business privilege tax based on all rental proceeds. Lessors sought a declaratory judgment stating that, pursuant to the Local Tax Enabling Act (the “LTEA”), the Township’s business privilege tax could not be applied to rental proceeds from leases and lease transactions. Lessors did not challenge the validity of Article IV generally. Rather, they observed that the LTEA’s general grant of power in this regard is subject to an exception stating that such local authorities lack the ability to “levy, assess, or collect . . . any tax on . . . leases or lease transactions[.]” Lessors argued their real property rental activities fell within the scope of this exception. The trial court granted the Township's motion, denied the Lessors' motion and dismissed the complaint. A divided Commonwealth Court reversed, but the Supreme Court agreed with the trial court's judgment, reversed the Commonwealth Court and reinstated the trial court's order dismissing the complaint. View "Fish v. Twp of Lower Merion" on Justia Law

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In this matter, Appellants John and Kathy St. John challenged the Superior Court’s decision to affirm a declaratory judgment order finding Pennsylvania National Mutual Casualty Insurance Company (“Penn National”) liable for a judgment against its insured LPH Plumbing and Heating under a commercial general liability (CGL) insurance policy in effect from July 1, 2003 to July 1, 2004. The Supreme Court granted review to determine whether, under the facts of this case and the policy language at issue, Penn National was instead liable for the judgment against its insured under a separate policy of CGL insurance as well as a companion umbrella policy in effect from July 1, 2005 to July 1, 2006. Furthermore, the Court also considered whether the multiple trigger theory of liability insurance coverage (adopted by the Supreme Court in "J.H. France Refractories Co. v. Allstate Ins. Co.," 626 A.2d 502 (Pa. 1993)), within the context of asbestos bodily injury claims applied in this case, where property damage was continuous and progressive, to trigger coverage under all policies in effect from exposure to the harmful condition to manifestation of the injury. After review, the Supreme Court affirmed all aspects of the lower court’s decision finding that coverage was triggered under the policy in effect from July 1, 2003 to July 1, 2004, when property damage became reasonably apparent, and declining to apply the multiple trigger theory of liability insurance coverage. View "PA Natl Mut Casualty v. St. John" on Justia Law