WICK STREIFF MEYER O’BOYLE & SZELIGO, PC LEGAL UPDATE

FALL 2002 ISSUE

TO PROMOTE AWARENESS OF LEGAL ISSUES, THIS NEWLETTER PROVIDES A GENERALIZED DISCUSSION OF SEVERAL TOPICS WHICH REFLECT RECENT LEGAL DEVELOPMENTS. THIS PUBLICATION IS NOT INTENDED TO PROVIDE LEGAL ADVICE FOR A PARTICULAR FACTUAL SITUATION. WE WOULD BE HAPPY TO HEAR FROM WEB SITE READERS.

FALL 2002 ISSUE

COUNTY NURSING HOMES CAN BE LIABLE FOR NEGLECT

State and local governments have broad immunity from private lawsuits. While many exceptions to state and local governmental immunity exist, the exceptions tend to be narrow and technical. Governmental immunity not only protects government agencies, it can also extend to government officials, employees, and volunteers. But where a county-owned nursing home is operated by a private corporation, the county's governmental immunity does not protect the private corporation from suits for its negligence.

The family of an elderly woman who died after suffering severe neglect in a county nursing home sued the private company that contracted with the county to run the home. Noting that its contract with the county gave the private company control of the nursing home and required that it "ensure that the facility was properly staffed, equipped, trained and prepared to deliver care to the residents," the Pennsylvania court ruled that the private corporation was an independent contractor and was not operating as part of the county government. Refusing to extend governmental immunity to private individuals or corporations who contract to provide services for government entities, the court found that where a private corporation acts for profit and exercises independent management control it is subject to suits for its negligence.

Any private company considering a business venture of any kind with a government entity or agency must assume that it will not enjoy governmental immunity. Before anyone injured by a governmental activity assumes that governmental immunity applies, he or she should thoroughly review the actual identity of the parties involved. When independent contractors act on behalf of government, immunity disappears.

LANDLORDS AND UNFAIR TRADE PRACTICES

The Pennsylvania Unfair Trade Practices and Consumer Protection Law prohibits unfair methods of competition and unfair or deceptive practices in the conduct of any trade or commerce. A person who leases or purchases goods or services "primarily for personal, family or household purposes and thereby suffers any ascertainable loss of money or property" as a result of an unfair or deceptive practice may bring a private action to recover damages. The court may award up to three times the actual damages sustained and may award the consumer his or her reasonable attorney's fees. The Act is broadly interpreted by the courts to effect its purpose of protecting consumers from unfair or deceptive business practices.

A Pennsylvania court recently decided that the Act can be used by a tenant against a landlord who deceptively refuses to refund a residential real estate security deposit. Where a landlord knowingly misrepresents to departing tenants that they owe their security deposit to cover necessary repairs and labor, that fraudulent conduct violates the Act. In such lawsuits, courts are entitled to determine whether the landlord or the tenant is believable. If a landlord's retention of a security deposit is found to be based on false statements about the existence and extent of damage to the rental unit, the landlord can be held liable for triple damages and attorney's fees.

To best protect their interests, landlords and tenants should always photograph any evidence of damages at the time the tenant moves in as well as when the tenant moves out.

CHILD AND SPOUSAL SUPPORT IN PENNSYLVANIA

In Pennsylvania, a parent's obligation to pay child support is calculated according to statewide guidelines. The guidelines establish a "basic support obligation" per child, calculated from the combined net incomes of both parents, taking into consideration economic trends and costs of living. The parent with less custodial time must pay his or her share of the basic support obligation to the parent who has more custodial time. In cases of equally split custody, the parent who earns more money pays a reduced basic support obligation to the parent who earns less. The Pennsylvania support guidelines are reviewed and revised periodically under the supervision of the Pennsylvania Supreme Court.

Once child support is determined, the court considers any requests for spousal support or temporary alimony, generally called "alimony pendente lite" ("APL"). The higher earning parent's spousal support/APL obligation is based on a simple mathematical calculation. More complex rules address how to calculate the payment of spousal support by custodial parents. If the higher earning parent has most of the custodial time, he or she is entitled to receive child support from the lower earning parent but may have to pay spousal support/APL to the lower earning parent. Special consideration is given to the receipt of Social Security benefits payable for children and the day-care and medical expenses incurred by the custodial parent.

If the parents' combined income is more than $15,000 net per month ($180,000 per year), the guidelines are only a starting point for a child support order. The reasonable needs of the children of high-income parents are taken into special consideration in a Melzer analysis--named for a Pennsylvania court case that set the standards for all high-income child support cases. The history of spending, the financial status of the parents, and the amount of money the parents can actually afford to spend on their children are reviewed in a Melzer calculation, and an amount of child support, sometimes well over a guidelines calculation, is required.

The Pennsylvania Supreme Court recently held that the Melzer analysis applies to child support only, and that spousal support/APL must be mathematically calculated. Although deviations for exceptional circumstances can be made, the supreme court emphasized that the lower courts must make the standard calculation to determine spousal support/APL.

Any parent facing a Melzer child support analysis should be prepared to provide the court with detailed credit-card and checkbook records and to respond to the court's inquiries regarding the children's reasonable needs. Trips, tuition, tutoring, music lessons, special activities or memberships, travel, and entertainment for children of well-to-do parents may be included by the court in "reasonable needs." In setting spousal support/APL obligations, the courts will no longer focus on the recipient spouse's needs but, instead, will simply apply the mathematical formula.

Parties in high-income cases should review their spousal support/APL orders and consider requesting a modification to take advantage of this new focus.

JAIL SENTENCE FOR ANIMAL ABUSE

A man who shot a dog was sentenced to jail under Pennsylvania's mandatory sentencing for crimes involving firearms. Shooting an animal is a crime if the shooting is "malicious." "Malice" is defined by the law as "hardness of heart, cruelty, recklessness and a mind regardless of social duty." Unless a person is defending himself, another person, or his livestock from attack, shooting a dog is considered malicious and is a crime.

Whenever any crime involves the use or possession of a firearm or other deadly weapon, the sentencing judge must "enhance" or increase the sentence simply because a firearm was used. While aggressive, trespassing, or barking dogs are an annoyance and sometimes even a threat, reporting the problem to the police and dog wardens is far preferable to engaging in gunfire. Without evidence that the dog was an imminent threat, anyone who chooses to shoot a dog can wind up in jail.

MIRANDA GOES TO SCHOOL

Pennsylvania law authorizes county judges to appoint school police officers. These school police officers, who are paid and supervised by the school districts, have the power to arrest and charge students with crimes. They are obliged to promptly turn students over to the local police following any arrest. Because school police officers have the power to arrest and detain students, the Pennsylvania Supreme Court found that they may also have the obligation to give Miranda warnings.

The court held that a 16-year-old student, who was questioned for 25 minutes by 3 uniformed school police officers regarding a serious incident of vandalism, was entitled to Miranda warnings. Those warnings include a reminder of the constitutional right to remain silent, a suggestion that the suspect secure counsel, and a warning that anything the suspect says can and will be used in court.

In finding that uniformed school police officers must give detained students Miranda warnings, the supreme court acknowledged that school teachers and administrators must be free to question and discipline unruly students. But noting that the appointment of uniformed school police officers has created a different kind of school employee, the court likened school police to local police and found that students detained by school police officers are in a coercive setting where constitutional warnings must precede any interrogation.

When school police officers investigating wrongdoing are not inclined to arrest students and turn them over to the local police, they should consider having a teacher or an administrator speak to the student first. No Miranda warnings need be given by teachers or administrators, and in-school discipline penalties may be sufficiently broad to adequately punish students involved in certain misconduct. Whenever an arrest by the local police is contemplated, school police officers should lead the investigation and include full Miranda warnings in their questioning of a suspected student to insure that the student's statements will be admissible in future court proceedings.

HAZARDS OF HAZING

A University of Pittsburgh student suffered renal failure, seizures, and hypertension requiring three weeks of hospitalization and kidney dialysis due to injuries caused by protracted "paddling" during his fraternity initiation. A Pennsylvania court ruled that the student can sue the fraternity's chapter advisor.

Given the tragic history of death and serious injuries following fraternity initiations, the court found that national fraternities, local chapters, and all individuals involved in fraternity administration are potentially liable for students' injuries. However, unless the injured student can show actual knowledge or actual failure to act by each individual defendant, his or her claims may fail. Because the injured student in the case before the court proved that the local advisor did not exercise sufficient supervision and control over the local chapter, the court permitted the student's claims against the local advisor to go to trial.

Hazing and abusive initiation practices are not limited to fraternities. They are encountered by students in sports, at camps, and in high schools. Groups, schools, coaches, administrators, and fraternities must not only issue policies banning hazing but must also take affirmative steps to prevent it. Individuals and groups found to be aware of hazing can be held legally responsible to those injured by this illegal practice.

PEST CONTROL CONTRACT RULED UNFAIR

A Pennsylvania court recently found that the terms of a pest control company's contract could not prohibit a private lawsuit by a homeowner. The homeowner claimed that he and his family were severely and permanently injured by the pest control company's negligent application of pesticides in and around their home. After the faulty extermination services were completed, the homeowner and his family relocated from the home and claimed that the extensive toxic damage to the home was permanent.

In hiring the pest control company, the homeowner had signed the company's standard contract. The reverse side of the contract form included a clause that required all disputes to be resolved by arbitration rather than by lawsuit. In arbitration, a panel of lawyers or lay persons chosen by the parties or by the court holds a hearing and issues a decision. Some arbitration procedures are final and binding; others permit appeals. The pest control company's contract arbitration clause prohibited the arbitrators from awarding any damages at all.

The court first noted that Pennsylvania law generally favors arbitration clauses since arbitration is a speedy, fair process for settling claims. However, the court expressed serious concerns that the pest control company's contract too severely limited the arbitrators' power by prohibiting them from awarding any damages. Since the contract controlled a commercial transaction in which "ultra-hazardous pesticides have been applied in a residential setting," the court ruled that it would be unconscionable and against public policy for the homeowner and his family to lose their right to recover any damages for their personal injuries.

Where a preprinted contract includes burdensome terms in an inconspicuous part of the contract, courts are empowered to set aside those terms. Businesses seeking to enforce tough contract terms should take care to secure customers' specific agreement to such terms by including additional signature lines or otherwise memorializing the customer's clear agreement.

Customers should always take the time to read all of the terms of a contract before signing. While courts will sometimes void unfair terms of preprinted contracts, consumers are better assured of protection by reading and striking out unacceptable terms. The inclusion of an arbitration clause can prevent costly formal litigation, but contractual agreements to arbitrate must be drafted carefully to protect the rights of all parties and to create a fair process.