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filed: May 24, 1988.


Appeal from Judgment Entered October 18, 1984 in the Court of Common Pleas of Montgomery County, Civil No. 81-2141.


Jeffrey L. Pettit, Philadelphia, for appellant (at 2859) and appellee (at 2958).

James D. Crawford, Philadelphia, for appellant (at 2958).

William H. Pugh, IV, Norristown, for appellees (at 2859).

Cirillo, President Judge,*fn* and Cavanaugh, Brosky, McEwen, Del Sole, Beck, Tamilia, Kelly and Johnson, JJ. Cavanaugh, J., files a dissenting opinion. McEwen, J., files a concurring and dissenting statement. Beck, J., files a concurring and dissenting opinion in which Del Sole, J., joins.

Author: Cirillo

[ 375 Pa. Super. Page 5]

This is an appeal from an order of the Court of Common Pleas of Montgomery County dismissing defendant Lankenau Hospital's post-trial motion for judgment notwithstanding the verdict or, in the alternative, for a new trial, and plaintiff Dr. Pavle Paul's motion for removal of nonsuits. Paul had brought suit against Lankenau because of his termination as a research scientist in August of 1980 for removing five small refrigerators from the hospital. Because we believe that the trial court properly upheld the jury verdict for Dr. Paul based on estoppel, properly granted a non-suit on the counts involving the public policy exception to the at-will employment doctrine, intentional infliction of emotional distress, and implied contract, but improperly nonsuited Dr. Paul on his defamation claim, we affirm in part and reverse in part.

In reviewing the grant or denial of judgment n.o.v., we, as the reviewing court, must determine whether there was sufficient competent evidence to sustain the verdict, granting the verdict winner the benefit of every reasonable inference which can reasonably be drawn from the evidence, and rejecting all unfavorable testimony and inferences. Judgment n.o.v. may be granted only in a clear case where the facts are such that no two reasonable minds could fail to agree that the verdict was improper. Ingrassia Constr. Co. v. Walsh, 337 Pa. Super. 58, 61, 486 A.2d 478, 480 (1984), allowance of appeal denied.

Dr. Pavle Paul received his education and medical degree from the University of Belgrade School of Medicine. He immigrated to this country in 1962; at that time he was hired by Lankenau Hospital for its research department. Although he was not licensed to practice medicine, he was a member of Lankenau's medical staff from 1965 until his termination in August of 1980. Paul did not have a written contract of employment, although medical staff by-laws did exist, and at the time of his termination, Paul was engaged

[ 375 Pa. Super. Page 6]

    in several projects which had received or were to receive research grants.

During the time he was employed by Lankenau, Paul began to collect and to ship to Yugoslavia discarded hospital equipment. He did so with the knowledge and permission of supervisory employees at Lankenau. These shipments were authorized by one Raymond Stafford, purchasing manager, until his departure from the hospital in 1979. Stafford was replaced by James Vitale as director of material management. Paul continued his practice of collecting discarded equipment and supplies; although he had little contact with Vitale, his relations with the other supervisory employees remained unchanged.

The dispute which eventually led to the termination of Paul's employment arose around five refrigerators that he removed from a basement storeroom. Paul claimed that he had received permission from David D'Urbanis, a storeroom supervisor, to remove the refrigerators. Lankenau contended that the removal was unauthorized, and presented evidence to that effect. Lankenau claimed that it was upon the unauthorized removal of the five refrigerators that it requested Paul's resignation. Paul was informed that failure to resign would result in possible prosecution. Paul resigned.

Paul then filed suit against Lankenau. His complaint contained nine counts sounding in various tort and contract theories, including defamation, wrongful discharge, intentional infliction of emotional distress, and estoppel. The trial court nonsuited Paul on all counts except for Count IV, which was based upon an estoppel argument. That count went to the jury with four special interrogatories:

Do you find that plaintiff Pavle Paul had permission from David D'Urbanis to take the refrigerators from Lankenau Hospital?

Do you find that it was reasonable for plaintiff to rely on permission from David D'Urbanis to take the refrigerators from Lankenau Hospital and that plaintiff fully satisfied any duty that he may have had to inquire

[ 375 Pa. Super. Page 7]

    whether the refrigerators were of no further use to the hospital?

Do you find that plaintiff Pavle Paul resigned voluntarily from his employment at Lankenau Hospital?

Do you find that defendant Lankenau Hospital acted reasonably and believed in good faith that plaintiff Pavle Paul had taken the refrigerators without permission?

The jury found for the plaintiff, answering the first two interrogatories in the affirmative, and the last two in the negative. The trial, which had been bifurcated, then proceeded to the damages phase. The jury awarded Paul $410,000; the trial court remitted the award to $128,000, the amount Paul would have earned from the time of his termination to the date of the jury verdict.

Both parties filed post-trial motions -- Paul for a removal of the nonsuits as to the other eight counts of his complaint, Lankenau for judgment notwithstanding the verdict or for a new trial on Count IV. The motions were denied, and both parties appealed. A panel decision of this court was filed on December 27, 1985, and would have affirmed the decision of the trial court. Lankenau petitioned this court for reargument; Paul sought allocatur from the Pennsylvania Supreme Court. After a conference between parties, it was decided that this court would hear both appeals on reargument in the interest of a uniform disposition of the issues. Paul withdrew his petition for allocatur, and reargument was granted both parties.

Lankenau claims that this court's en banc decision in Banas v. Matthews International Corp., 348 Pa. Super. 464, 502 A.2d 637 (1985), should control, and that Paul's claim of estoppel was improperly presented to the jury. Because we find that Paul did indeed make out a claim for estoppel, and that, unlike the employee in Banas, Paul showed both a promise and reasonable reliance upon that promise, we find that Banas does not control here.

Count IV of Dr. Paul's complaint was in assumpsit and claimed that: "defendant Lankenau Hospital had established for at least fifteen years a consistent policy of

[ 375 Pa. Super. Page 8]

    permitting plaintiff to remove medical equipment and supplies that were of no further use to the defendant without threat to his employment status. Plaintiff was entitled to rely, and did rely, on said policy . . . ." The complaint describes the nature of Dr. Paul's reliance. At no time does it ever use the term "equitable estoppel." Yet for some reason the trial court affixed this legal term of art to the doctor's claim. Equitable estoppel or estoppel in pais is a defense used to preclude a person from denying or asserting a claim. Its elements are: (1) misleading words, conduct, or silence by the party against whom the estoppel is asserted; (2) reasonable reliance on the misrepresentation by the party seeking to assert the estoppel; and (3) no duty of inquiry on the party seeking to assert estoppel. Stolarick v. Stolarick, 241 Pa. Super. 498, 509, 363 A.2d 793, 799 (1976).

A plaintiff may assert that a defendant is estopped from raising a particular defense. In Commonwealth ex rel. Gonzalez v. Andreas, 245 Pa. Super. 307, 369 A.2d 416 (1976), this court applied the doctrine of equitable estoppel to foreclose a putative father from denying paternity. The defendant had married a woman who was pregnant with another man's child. During the marriage he treated the child as if he were her natural father. After separation from his wife, the defendant claimed that he did not owe the child any duty of support because he was not her father. To prove his claim, he offered blood test results which conclusively demonstrated that he was not the child's father. The superior court held that he was estopped from introducing proof of this defense. The court stated that the defendant had indicated by his conduct that he was the child's father. Id., 245 Pa. Superior Ct. at 312, 369 A.2d at 418. The child had reasonably relied on this representation in that he had extended love and affection to the defendant. Therefore, the defendant was precluded from raising lack of paternity as a defense to the support action. The court concluded that "equitable estoppel applies to prevent a party from assuming a position or asserting a right to another's disadvantage inconsistent with a position previously

[ 375 Pa. Super. Page 9]

    taken." Id., 245 Pa. Superior Ct. at 311, 369 A.2d at 418.

Equitable estoppel may also be pled as an affirmative defense. In Stolarick, the holder of a right of re-entry upon a parcel of land brought a petition for declaratory judgment seeking interpretation of certain deed provisions. The defendants argued that the plaintiff was estopped from raising her claim because she had misled the defendants into believing that she had no interest in the land. 241 Pa. Super. at 509, 363 A.2d at 799. The court recognized that estoppel may be pled as an affirmative defense but decided that the elements were not supported by the facts of the case. Id.

Thus, equitable estoppel is not an independent cause of action. It may be used as an affirmative defense or a plaintiff may use it to preclude a defense from being raised. It may prove useful during litigation, but it is ancillary by nature. Though it may aid a party in recovering upon his legal theory, it may not serve as a substitute for such a theory.

The doctrine of promissory estoppel is an outgrowth of equitable estoppel but the two are separate and distinct principles. Promissory estoppel, unlike its equitable cousin, may serve as an independent cause of action. Cardamone v. University of Pittsburgh, 253 Pa. Super. 65, 74, 384 A.2d 1228, 1233 (1978). The doctrine allows courts to enforce promises unsupported by consideration in order to remedy a manifest injustice. Id. The cause of action is made out where the asserted promise is such that: (1) the promisor should reasonably expect to induce a definite action or forbearance on the part of the promisee; (2) it actually induces such action or forbearance; and (3) injustice can be avoided only by its enforcement. Id.

As noted above, when a defendant relies on equitable estoppel, the doctrine will usually be employed as an affirmative defense. Straup v. Times Herald, 283 Pa. Super. 58, 69, 423 A.2d 713, 719 (1980). The defendant in such a case

[ 375 Pa. Super. Page 10]

    will generally assert that even if the plaintiff's claims are true, he is barred from recovery because of the estoppel. In Pennsylvania, an affirmative defense must be specifically raised in the pleadings or it is waived. Id.; see Pa.R.C.P. 1030, 1032. However, a plaintiff who attempts to recover upon a promise on the basis of estoppel need not attach any particular label to his claim. Straup, 283 Pa. Super. at 70, 423 A.2d at 719. The issue is preserved for appellate review as long as the plaintiff's basic contention involves a promise and reasonable and detrimental reliance. Id.

Dr. Paul articulated such a claim in his complaint, at trial, and on appeal. Though he failed to distinguish equitable from promissory estoppel, Straup demonstrates that this is a common failing. We see no reason, then, to deny him relief on the grounds that he has confused his theories of estoppel.

We are more concerned with Footnote 12 in Banas, supra. In that case, an employee was terminated for making a personal item on company time. An employee handbook distributed to employees allowed them to make personal items with the permission of their supervisors. Although the plaintiff in that case had ostensibly received permission, he was terminated for violation of company policy, that is, for making a grave marker for personal use. Id. 348 Pa. Super. at 485, 502 A.2d at 648. In Footnote 12, this court discussed the question of promissory estoppel as applicable to the case:

The trial court instructed the jury that a "contract by estoppel" might be found if the jury concluded that appellant had received permission to make the grave marker. The court may have had the doctrine of promissory estoppel in mind when it gave its instruction. While our courts have applied that doctrine when consideration for a promise is absent, . . . the doctrine does not provide a basis for relief when, as is the case here, a promise is absent. It has been suggested that the doctrine of promissory estoppel may provide a basis for an employee's recovery for commitments made in an employee handbook . . . .

[ 375 Pa. Super. Page 11]

We are not persuaded by the suggestion. Recovery on the theory of promissory estoppel, is ordinarily limited to recovery of amounts lost and expended in reliance on the promise, . . . in order to place the plaintiff in the position he would have occupied had the promise never been made . . . . In addition, the question arises whether any reliance on the asserted promise was justified. If the employer has placed no limit on its freedom of action, the promise would seem illusory only.

Id., 348 Pa. Superior Ct. at 486 n. 12, 502 A.2d at 648 n. 12 (citations omitted). Neither Banas, nor its footnote, have any applicability here.

In Banas, the employee had exceeded the scope of his permission. The employee made a grave marker in his employer's shop and placed it on a grave in a cemetery without purchasing it through the cemetery, a customer of the employer. This was a conflict with Banas's duty to the employer. In the present case, the jury found that Paul had permission to take the material in question, and they could have concluded that he originally intended to utilize that equipment for a charitable purpose which provided neither benefit to him nor harm to his employer.

In addition to this factual distinction, we find that Banas differs intrinsically from the instant case. This court stated in Banas that the fact that the jury found that the employee had permission from a supervisor to make a personal item made no difference to the outcome of the case. The employee had based his claim upon a handbook. This court held that that handbook could not constitute a promise upon which he could have reasonably relied because it did not include an explicit just cause provision. "Given the jury's verdict, we may take it as fact that Campbell did give permission. But that fact is irrelevant. Appellant's handbook nowhere provided that an employee would be dismissed only if the facts warranted it. If the handbook had contained, if not expressly at least by clear implication, a just cause provision, then appellee's claim might have merit."

[ 375 Pa. Super. Page 12]

    find that the trial court erred in failing to grant Lankenau's motion for judgment n.o.v.

The final requirement for recovery under Cardamone, is a showing that injustice can be avoided only by enforcement of the promise. Cardamone, 253 Pa. Super. at 74, 384 A.2d at 1233. Paul has satisfied that requirement. The jury found that Lankenau Hospital did not act in good faith. Further, it revolts both logic and common sense, as well as one's sense of justice, that an employee can be discharged for exercising the permission given to him by an employer. The at-will employment doctrine provides that an employer may discharge, for any reason whatsoever, an employee who has no contract for a set period of employment for any reason whatsoever. That doctrine was designed to allow employers freedom in operating a business. We do not see the need to transform it into an implement through which the employer can fashion snares for the unsuspecting employee. To allow employers who already have the benefit of the at-will employment doctrine to terminate their employees for exercising permission given to them would be to allow an abuse of power. The situation is too similar to shooting fish in a barrel.

An examination of Dr. Paul's claims centers on the question of whether the trial court properly granted Lankenau's motion for nonsuits on the public policy, intentional infliction of emotional distress, defamation, and implied contract counts. A non-suit may be entered only where the facts absolutely establish the absence of liability, and any conflicts in the evidence must be resolved ...

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