Corson, K. v. Della Croce, D. ( 2016 )

J-A05025-16
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
KATHLEEN CORSON IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellee
v.
DAVE DELLA CROCE
Appellant No. 1086 EDA 2015
Appeal from the Order Entered March 31, 2015
In the Court of Common Pleas of Philadelphia County
Civil Division at No(s): 120500102
BEFORE: OLSON, J., OTT, J., and STEVENS, P.J.E.*
MEMORANDUM BY OTT, J.: FILED JUNE 07, 2016
Dave Della Croce appeals from the order entered on March 31, 2015,
in the Court of Common Pleas of Philadelphia County, granting Kathleen
Corson’s motion for sanctions regarding a delay by Della Croce’s insurer in
the payment of $50,000.00 in settlement. Della Croce claims such sanctions
were waived by agreement in order to allow for delays in investigating
Medicare lien issues. Specifically, Della Croce raises six issues in this timely
appeal. Three of the six questions presented address applicability of the
waiver of sanctions pursuant to Pennsylvania Rule of Civil Procedure 229.1.
The remaining three questions address claims of error in the trial court’s
findings of fact. None of the questions presented address the central aspect
____________________________________________
*
Former Justice specially assigned to the Superior Court.
J-A05025-16
of the trial court’s ruling that the sanctions were applied to a time when
Della Croce admits no Medicare lien issues existed. After a thorough review
of the submissions by the parties, relevant law, and the certified record, we
affirm.
On May 7, 2012, Corson instituted the underlying personal injury
lawsuit by filing a complaint alleging she tripped and fell due to a defect in
the sidewalk at a location owned by Della Croce. Pursuant to a case
management order, the matter was placed in the August 2014 Trial Pool.
The case was then placed in the September 2014 Trial Pool. See Docket.
However, the parties settled the lawsuit on September 3, 2014, and the trial
court was so informed. See Docket.
A General Release and Settlement Agreement (Agreement) was signed
by Corson on September 11, 2014. Relevant to this appeal, the matter
settled for consideration of payment of $50,000.00. Agreement, 9/11/2014,
¶ 1. Additionally, the parties agreed to waive
any penalty or sanction pursuant to Philadelphia Court Rule,
should settlement funds be received later than twenty (20) days
from the date of receipt by Defendant’s insurance carrier.
Id. at ¶ 9. Although the local Philadelphia Court Rule is not specifically
referred to, the argument appears to reference Phila.R.C.P. 229.1. In
relevant part, Phila.R.C.P. 229.1 states:
(C) The Releasing Party and Released Party may agree in writing
to modify or waive any of the provisions of this rule.
-2-
J-A05025-16
(D) A Released Party shall have twenty (20) calendar days from
receipt of an executed release within which to deliver the
settlement funds to the Releasing Party or its counsel.
Phila.R.C.P. 229.1 (C), (D).1
As noted, the Agreement was signed by Corson on September 11,
2014. The record does not reveal when the signed Agreement was received
by Della Croce’s counsel. Sometime prior to December 3, 2014,
approximately three months after the settlement agreement was signed,
Corson’s counsel inquired of Della Croce’s counsel regarding the status of
the $50,000 settlement check. On December 3, 2014, Della Croce’s counsel
sent an email in return stating,
My carrier confirmed with me the check was sent on November
26. We still haven’t received it, but of course as soon as I do, I
will let your office know. I will ask tomorrow for proof of
mailing. Chris[2] and I missed each other today.
See Attachment, Corson’s Reply to Della Croce’s Response to Motion to
Enforce Settlement, 1/21/2015. Counsel for Corson sent email inquiries
regarding the settlement funds again on December 8 and December 22,
2014. See id. These inquiries went unanswered.
On January 7, 2015, counsel for Corson filed the motion to enforce
settlement that is the subject of this appeal. On January 8, 2015, counsel
____________________________________________
1
Paragraph (F) details what sanctions are available. There is no dispute
over Paragraph (F).
2
The certified record does not positively identify “Chris.” From context, it
appears that “Chris” is most likely an adjuster.
-3-
J-A05025-16
sent an email to counsel for Della Croce informing him of that fact.
Della Croce’s counsel responded:
I agree it’s taken too long, but my client can’t escape Medicare
compliance. I know you forwarded the lien letter, but they have
to do their own compliance check. The other thing, the adjuster
who authorized settlement since left the company and did not
leave any of the file materials (or tell anyone), but that’s not
your problem. I am told the check has finally been authorized,
but until I see it, I don’t want to tell you I have it.
That said, I think the motion is inappropriate. Rule 229.1
sanctions were waived in the release. In fact, we discussed it,
and I told you we had a history of Medicare not being timely with
us. For that reason, and others, I have to oppose the motion.
My hope is the check arrives shortly and makes this moot.
Id., Email, 1/8/2015.
The certified record reveals the settlement check was received by Della
Croce’s counsel on January 9, 2015, and subsequently forwarded to counsel
for Corson. However, the motion for enforcement of the settlement was not
withdrawn. The trial court determined that the settlement check was not
delivered within 20 days of the executed release, as provided for by
Phila.R.C.P. 229.1 and awarded 4.75% interest on $50,000.00 from
December 7, 20143 to January 8, 2015 as well as $500.00 in attorney’s fees.
Initially, we note, “It is well-established that the enforceability of
settlement agreements is determined according to principles of contract
law.” McDonnell v. Ford Motor Co., 643 A.2d 1102, 1105 (Pa. Super.
1994) (citation omitted). Additionally,
____________________________________________
3
We note that December 7, 2014 was a Sunday.
-4-
J-A05025-16
[O]ur standard of review of a trial court’s grant or denial of
a motion to enforce a settlement agreement is plenary, as
the challenge is to the trial court’s conclusion of law. We
are free to draw our own inferences and reach our own
conclusions from the facts as found by the trial court.
However, we are only bound by the trial court’s findings of
fact which are supported by competent evidence.
Hannington v. Trustees of Univ. of Pennsylvania, 809
A.2d 406, 408 (Pa. Super. 2002) (citations and quotations
marks omitted).[4]
Casey v. GAF, 828 A.2d 362, 267 (Pa. Super. 2003).
We will address Della Croce’s claims regarding Rule 229.1 together.
As noted above, the appellant’s brief claims the trial court erred in failing to
apply Pa.R.C.P. 229.1. However, the Agreement makes no mention of either
the Pennsylvania Rules of Civil Procedure, in general, or Pa.R.C.P. 229.1,
specifically. Rather, the Agreement only generally mentions a waiver of
penalty or sanction that might be available under Philadelphia Court Rules,
without mentioning any specific provision under the Philadelphia Court
Rules. Although Della Croce lists three questions 5 regarding the application
of Pa.R.C.P. 229.1, none of these questions specifically appears under
relevant headings in the argument section of appellant’s brief. Instead,
Della Croce has provided a general argument regarding the enforceability of
____________________________________________
4
Harrington was abrogated on other grounds by Reutzel v. Douglas, 870
A.2d 787 (Pa. 2005).
5
Questions 1, 2, and 3 of the Question Presented. See Appellant’s Brief, a
4-5.
-5-
J-A05025-16
a Rule 229.1(C) provision, waiving sanctions for late delivery of settlement
funds.
We could find the issues waived for failure to follow appropriate
Appellate Rules of Procedure, however, we will address the general question
of the applicability of Pa.R.C.P. 229.1 (Rule).
Here, Della Croce essentially argues the waiver of sanctions pursuant
to the Rule was knowing and the terms of the Rule are clear. Accordingly,
Della Croce asserts the trial court erred in imposing sanctions in
contradiction to the agreed upon terms of the Agreement. We agree with
Della Croce that Rule 229.1 (both Philadelphia and Pennsylvania versions)
specifically allows the parties to waive any portion of the Rule. Della Croce
also asserts that the Agreement contained the waiver of sanctions to allow
for delays in obtaining relevant Medicare lien information even though not
specified in the Agreement. Corson does not contradict this and we have no
reason to doubt this assertion. However, this does not end the discussion.
Della Croce has neglected to address both the fact that the trial court
awarded sanctions only for that period which Della Croce has admitted there
were no longer any Medicare lien issues, and the trial court’s concerns with
the actual misrepresentations made by Della Croce’s insurer regarding
delivery of the settlement funds. Our review of the certified record leads us
to conclude it was this unexplained delay and the misrepresentation that led
to the imposition of sanctions.
-6-
J-A05025-16
The certified record reveals that the Agreement was signed by Corson
on September 11, 2014 and presumably delivered to Della Croce shortly
thereafter. Without a formal waiver of sanctions, Della Croce would have
been required to pay the settlement within 20 days of receipt of the signed
Agreement. This would have made payment of the funds due sometime
near the first week of October, 2014.
However, a written waiver was signed, and there is no indication in the
certified record that Corson or her attorney did not understand the general
terms of that waiver. Nowhere in the email correspondence between
Corson’s and Della Croce’s counsel is there an indication of surprise at the
existence of the waiver clause. Rather, what was disputed was the
reasonable duration of the waiver.
Sometime prior to December 3, 2014, almost two months after the
signing and delivery of the Agreement, Corson had still not been paid.
Accordingly, Corson’s attorney sent an inquiry to Della Croce’s counsel. On
December 3, 2014, Della Croce’s counsel replied, indicating the insurer had
sent the settlement check on November 26, 2014. This is important for a
number of reasons. First, it appears from the record no check was sent by
Della Croce’s insurance company on that date. Corson’s counsel inquired
twice more after being told “the check is in the mail” and received no replies
thereto. Second, and more importantly, the gist of Della Croce’s current
argument is that the settlement check could not be issued until the insurer
-7-
J-A05025-16
had determined the status of any Medicare lien. However, in his brief, Della
Croce states CMS (Centers for Medicare and Medicaid Services) informed the
parties by letter dated November 4, 2014, there were no Medicare liens.6
Nonetheless, six weeks passed between the date the check was first
reported to have been sent and the date the check was sent and delivered to
Corson. Ultimately, it is this period of time and the misrepresentations
surrounding this time that led to the imposition of sanctions. Della Croce
argued and continues to argue that payment of the settlement funds was
delayed due to Medicare considerations.7 However, Della Croce has
admitted in both the response to Corson’s Motion to Compel Delivery of
Settlement Funds, and in his appellant’s brief, that the insurer had
information regarding the non-existence of a Medicare lien by November 14,
2014, at the latest. Accordingly, we must agree with the trial court that this
____________________________________________
6
Della Croce refers to page 154a of the reproduced record for a copy of that
letter. Unfortunately, no copy of the letter is to be found in the certified
record, but all parties agree to the existence of the letter and its substance.
In the reply to the motion to compel, Della Croce makes reference to a
November 14, 2014 letter from CMS. Whatever the proper date, it is clear
that Della Croce admits that the relevant information was supplied to the
insurer well before the settlement check was tendered.
7
The trial court found this argument to be disingenuous in that a statement
indicating no Medicare lien existed was sent to Della Croce along with the
signed Agreement. This is incorrect. The certified record reveals Corson
sent a statement indicting there were no child support liens to be
considered. No information regarding Medicare liens accompanied
transmission of the Agreement.
-8-
J-A05025-16
argument is disingenuous. Essentially, after literally telling Corson “the
check is in the mail,” Della Croce then asked Corson to simply accept as a
fact that the insurer was diligently working to overcome Medicare hurdles,
despite having received notice from an independent service (CMS) that no
Medicare lien existed.
Della Croce argues that the purpose of including the sanctions waiver
language found in Paragraph 9 of the Agreement was to account for delays
incurred due to investigating Medicare issues. Appellant’s brief quotes from
correspondence faxed to Corson’s counsel on September 4, 2014, confirming
this reasoning.
…as we discussed, due to the Medicare issues surrounding your
client’s claim, the settlement funds may be delivered later than
the twenty (20) days as set forth in the Philadelphia County Rule
229. …[Y]ou have agreed to waive that 20 day Rule.
Appellant’s Brief at 7.8 Additionally, Section E of Appellant’s brief is titled:
The Plain Intent Of The Release Was To Provide Della Croce With
Additional Time To Serve The Settlement Funds Due To The
Need To Confirm The Absence Of A Medicare Lien And The Trial
Court Made Three Separate Errors In Its Findings Of Fact.
Appellant’s Brief at 21.
The trial court imposed sanctions upon Della Croce for the failure to
promptly deliver settlement funds from December 7, 2014 to January 9,
____________________________________________
8
The September 4, 2014 correspondence is also not found in the certified
record. We remind counsel to include all relevant documents in the certified
record.
-9-
J-A05025-16
2015. The facts as developed in this matter demonstrate there were no
Medicare issues left unresolved in this time-period. Pursuant to Della
Croce’s own argument, the paragraph 9 sanctions waiver was only intended
to apply to delays caused by Medicare issues. Additionally, the
misrepresentations made to Corson on December 3, 2014, regarding the
timely delivery of the settlement funds followed by silence in the face of
subsequent inquires by Corson only serves to highlight the egregious nature
of the failure to promptly deliver what was owed. Accordingly, we find no
error in the trial court’s imposition of sanctions and attorney’s fees regarding
this period.
In the remaining three claims, Della Croce argues the trial court erred
in finding: (1) the necessary Medicare documentation was provided by
Corson with the signed release, (2) Della Croce only raised the issue of a
Medicare lien in December 2014, and (3) the settlement funds were issued
by the insurer only because of Corson filing the motion to enforce.9
We agree with Della Croce regarding the first and third issues. We
have already noted that the information provided by Corson with the signed
Agreement indicated there were no child support liens to be accounted for,
not Medicare liens. See Footnote 6, supra. Also, the timeline of this matter
____________________________________________
9
These issues correspond to question 4, 5, and 6 of Della Croce’s Questions
Presented. These questions were not separately addressed in the argument
section of the appellant’s brief, but were, as noted above, included in Section
E of Della Croce’s arguments.
- 10 -
J-A05025-16
as reflected through the certified record indicates while the settlement funds
were not delivered to Corson until after the motion had been filed, the
insurer issued the check prior to the motion being filed. Accordingly, it
cannot be fairly stated that the certified record supports the statement that
the check was issued in response to the motion to enforce. Nevertheless,
neither of these misstatements have any effect on the relevant reasons
supporting the imposition of sanctions. The salient facts, as we have already
determined, were, the delivery of the CMS document in early to mid-
November confirming there were no Medicare issues; the misrepresentations
by the insurer that the check was in the mail by late November, along with
the inference that the insurer had determined there were no outstanding
Medicare issues; the continued silence from the insurer and Della Croce’s
counsel regarding the status of the owed settlement funds; and the
continued reliance on a claim that outstanding Medicare issues held up
payment, notwithstanding the fact that such issues had already been
resolved.
Regarding the second issue, we agree that the certified record reveals
that the initial concerns regarding the waiver of sanctions were to allow for
the resolution of Medicare issues. However, the trial court is also correct
that during the relevant time-period, from the beginning of December, when
Corson was told the check was in the mail, to the beginning of January,
when the issue of the motion to enforce was raised, there was no mention of
- 11 -
J-A05025-16
continuing Medicare issues. As noted above, Della Croce has never
produced any evidence of ongoing Medicare issues.
Accordingly, Della Croce is entitled to no relief on his claims of error
regarding the trial court’s findings of fact.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 6/7/2016
- 12 -