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CANADA DRY BOTTLING CO. WILLIAMSPORT v. JOHN L. MERTZ AND INTERNATIONAL ARTWARE CORP. (03/23/79)

decided: March 23, 1979.

CANADA DRY BOTTLING CO. OF WILLIAMSPORT, INC.,
v.
JOHN L. MERTZ AND INTERNATIONAL ARTWARE CORP., APPELLANTS



No. 179 October Term 1978, Appeal from Order of the Court of Common (Civil Action, Law) Pleas of Lycoming County, filed Sept. 28, 1977, and signed and dated Sept. 28, 1977; No. 75-1883

COUNSEL

Lester L. Greevy, Jr., Williamsport, for appellants.

Norman M. Lubin, Williamsport, for appellee.

Cercone, Spaeth and Lipez, JJ. Lipez, J., files a concurring and dissenting opinion.

Author: Spaeth

[ 264 Pa. Super. Page 482]

This is an appeal from a judgment in a trespass action in the amount of $10,108.60.

On May 3, (or 4) 1973 -- the date is sometimes stated one way, sometimes the other -- one John N. Jones was killed when the automobile he was driving collided with an automobile driven by appellant John L. Mertz. Jones was employed by appellee, and at the time of the accident was acting in the course of his employment. His widow presented a workmen's compensation claim, on behalf of herself and her five minor children, which appellee referred to its compensation carrier, Pennsylvania Manufacturers' Association Insurance Company. The compensation agreement is not of record; however, the testimony indicates that it was agreed that compensation should be paid as follows: up to August 11, 1989, at the rate of $100 a week; from August 12, 1989, through October 15, 1991, $90 a week; and from October 17, 1991, until the widow remarried or died, $76.50 a week. (The amount of the weekly payments was to decrease as the children became 18 years old.) (Record at 124a-125a)

In the meantime, the widow on behalf of herself and her children brought a wrongful death and survival action against appellant Mertz and his employer, appellant International

[ 264 Pa. Super. Page 483]

Artware Corp. Her counsel negotiated a settlement for $125,000-$120,000 being alloted to the wrongful death action, and $5,000 to the survival action -- and on April 24, 1974, the Court of Common Pleas of Luzerne County, in which the action had been filed, approved the settlement. (Record at 64a-69a) The petition for approval of the settlement is not as clear as it might be, but when read in the light of the testimony, it discloses the following facts. Pennsylvania Manufacturers' pro rata share of the counsel fee on the settlement was $37,500-$36,000 for the recovery in the wrongful death action, and $1,500 for the recovery in the survival action. This fee, however, was not to be paid to the widow's attorney as a lump sum but instead at the rate of $30 a week from April 10, 1974, to March 24, 1998 (1,250 weeks at $30 = $37,500). (Record at 94a, 160a-162a)

On June 2, 1975, appellee brought the action that is now before us; the action is in trespass, and seeks two distinct recoveries, which will be discussed in a moment.

On April 14 and June 20, 1977, the action was tried by a judge sitting without a jury. On July 8, 1977, the judge found: that the accident in which Jones was killed and appellee's automobile destroyed was the result of appellant Mertz's negligence; that at the time of the accident Mertz was acting in the course of his employment with appellant International Artware; that the fair market value of appellee's automobile was $2,200; and that in consequence of the accident, appellee's workmen's compensation insurance premiums were increased a total of $7,908.60. The judge concluded that Mertz's negligence "was a substantial fact in causing" those damages (Record at 35a); he therefore entered an order in appellee's favor in the amount of $10,108.60. Appellants filed exceptions. On September 20, 1977, these were dismissed, and final judgment was entered. This appeal followed.

The appeal does not challenge the propriety of the award of $2,200 for the destruction of appellee's automobile; the only issues argued concern the propriety of the award of $7,908.60 for the increase in appellee's workmen's compensation

[ 264 Pa. Super. Page 484]

    insurance premiums. In their brief appellants have defined these issues as follows: 1) that the lower court "erred in finding [that the payments of $30 a week] were not counsel fees," Appellant's Brief at 7; 2) that with respect to appellee, the settlement of the wrongful death and survival actions "amount[ed] to an accord and satisfaction", Appellant's Brief at 9; and 3) that the lower court erred in finding that appellee "had no reasonable means of avoiding or negotiating the increase of insurance premiums, and were the premiums properly calculated?" Appellant's Brief at 12.

We shall not consider the second of these issues; it has been waived, for appellants did not raise it in their exceptions to the lower court's findings and order. See Pa.R.Civ.P. 1038(d); cf. Leopold v. Davies, 246 Pa. Super. 176, 369 A.2d 868 (1977). We might also decline to consider the first and third issues. Appellants' brief has no section entitled "Statement of Questions Involved." Pa.R.App.P. 2115 states: "The statement of the questions involved must state the question or questions in the briefest and most general terms . . . . This rule is to be considered in the highest degree mandatory, admitting of no exception; ordinarily no point will be considered which is not set forth in the statement of questions involved or suggested thereby." Where defects in an appellant's brief are "substantial", we have quashed the appeal on that basis alone. Commonwealth v. Sue Wyant, 254 Pa. Super. 464, 386 A.2d 43 (1978); Commonwealth v. George Scott, 237 Pa. Super. 160, 346 A.2d 359 (1975). Nevertheless, since the first and third issues have been addressed in appellants' brief, and in reply, in appellee's, we shall consider them.

With respect to the first issue raised by appellants: As we understand appellants' argument, it is as follows: When a carrier, such as Pennsylvania Manufacturers', recognizes an obligation to pay a workmen's compensation claim in installments -- such as the widow's claim here -- it must set up a reserve to cover the claim. In computing the amount of the reserve, the carrier may not take into account the

[ 264 Pa. Super. Page 485]

    counsel fee due the attorney who represented the claimant in the claimant's action against a third party. Here, however, Pennsylvania Manufacturers' did take into account the counsel fee. Accordingly, it set up too large a reserve, and that resulted in its increasing appellee's workmen's compensation insurance premiums more than they should have been increased.

Before this argument is considered from a legal point of view it may be useful to consider whether it is factually accurate.

It is possible to read the opinion of the lower court as saying that the argument is not factually accurate. In particular, Finding of Fact No. 4 says that ...


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