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DAUPHIN COUNTY BAR ASSOCIATION BY J. THOMAS MENAKER v. AUGUSTUS F. MAZZACARO (01/29/76)

decided: January 29, 1976.

DAUPHIN COUNTY BAR ASSOCIATION BY J. THOMAS MENAKER, TRUSTEE AD LITEM, PLAINTIFF-APPELLEE,
v.
AUGUSTUS F. MAZZACARO, A/K/A A. "GUS" MAZZACARO, DEFENDANT-APPELLANT



COUNSEL

George W. Gekas, Melman, Gekas & Nicholas, Harrisburg, for appellant.

J. Thomas, Menaker, Harrisburg, for appellee.

Jones, C. J., and Eagen, O'Brien, Roberts, Pomeroy and Nix, JJ. Manderino, J., did not participate in the consideration or decision in this case. Nix, J., concurs in the result. Roberts, J., filed a dissenting opinion.

Author: Pomeroy

[ 465 Pa. Page 547]

OPINION OF THE COURT

This is an appeal from a final decree of the Court of Common Pleas of Dauphin County, enjoining Augustus F. Mazzacaro, a licensed casualty adjuster, from representing tort claimants in pursuing damage claims against tort-feasors or their insurers for personal liability and property damages.*fn1 The injunction was sought by the Dauphin County Bar Association against appellant on the grounds that such third-party*fn2 representation exceeds appellant's authority under the Public Adjuster Act, Act of April 25, 1921, P.L. 276, § 1, as amended, 40 P.S. § 301, and constitutes unauthorized practice of law within the meaning of the Act of July 12, 1935, P.L. 708, § 1, 17 P.S. § 1610. We agree and affirm the decree below.

The nature of Mazzacaro's challenged practice may be briefly stated. As part of his casualty adjustment practice, Mazzacaro has solicited the claims of injured parties against alleged tort-feasors who are insured, or their insurers. For a contingent fee of ten to twenty per cent of any resultant settlement, Mazzacaro investigates the accident, estimates the dollar amount of damages sustained, writes a demand letter to the party from whom

[ 465 Pa. Page 548]

    recovery is sought and attempts to negotiate a settlement. Mazzacaro insists that this representation is undertaken on the assumption that liability exists and that all that is at stake is agreement on the amount of damages; he states that when the alleged tort-feasor or insurer contests liability, he voluntarily withdraws his services and recommends that a lawyer be consulted. Significantly, when such withdrawal occurs, Mazzacaro receives no compensation from the claimant. Mazzacaro contends that his representation of third-party claimants under the above-described circumstances is authorized by his public adjuster's license, issued pursuant to the Public Adjuster Act, Act of 1921, supra, 40 P.S. §§ 301, 302. In the alternative, he asserts that since his representation of the injured person is predicated on the assumption of liability by the person against whom the claim is made, it does not involve the exercise of legal judgments or the practice of law. Lastly, appellant urges that we reverse the decree below on the ground that the statute proscribing the unauthorized practice of law is unconstitutionally vague, and therefore, unenforceable. We find no merit in these contentions.

I.

Mazzacaro has been licensed by the Pennsylvania Insurance Commission as a "public adjuster". Public Adjuster Act, supra, § 3, 40 P.S. § 302. The scope of his authority under this license is controlled by the definition of "public adjuster" as set forth in Section 301 of the statute:

"The term, 'public adjuster,' as used in this act, shall include every person, co-partnership, association, and corporation advertising, soliciting business, or holding himself or itself out to the public, as an adjuster of claims for losses or damages arising out of policies of insurance, surety, or indemnity upon property, persons, or insurable business interests within

[ 465 Pa. Page 549]

    this Commonwealth, and receiving any compensation or reward for the giving of advice or assistance to the assured in the adjustment of claims for such losses, or who for compensation or reward, whether by way of salary or commission or otherwise, directly or indirectly, solicit business, investigate or adjust losses, or advise the assured with reference to claims for losses, on behalf of any other person, partnership, association, or corporation engaged in the business of adjusting losses."

Appellant reads this provision as defining two types of public adjusters -- (1) those who adjust "claims for losses or damages arising out of policies of insurance . . . upon property [or] persons . . ."; and (2) those who for compensation give "advice or assistance to the assured in the adjustment of claims . . ." (emphasis supplied). Because third-party claimants seek to recover claims arising out of policies of insurance, appellant urges that the ...


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