Pennsylvania Law Monitor : Pennsylvania Lawyer & Attorney : Stark & Stark Law Firm : Yardley, Philadelphia, New York, New Jersey

An Owner's Manual For Your Divorce is a 10 part podcast series presented by Joseph D. Visco, member of Stark & Stark's Divorce group. The series is intended to assist you in understanding the general process of a divorce from the initial discussions with your spouse to the post divorce follow-up.

The second installment will focus on how to select an attorney. Mr. Visco recommends using the three "C's" approach in the selection process. The three C's focus on the competency, cost and chemistry you have with your attorney. You can download a copy of the installment notes here. (PDF)

You can download the second installment here. (2.2 MB)

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The Pennsylvania Inheritance Tax is paid by the personal representative of the decedent’s estate or by the transferee (the person receiving the inheritance).  The Inheritance Tax is imposed on the value of the decedent’s estate transferred to beneficiaries. Specified deductions may be taken in determining taxable estate values.

The Inheritance tax is calculated as a percentage of the value of the assets transferred, which percentage is determined by the relationship of the heir to the decedent at the decedent’s date of death. The current tax rates are as follows:  4.5% for transfers to direct descendents (lineal heirs- children grandchildren, etc.); 12% for transfers to siblings; and 15% for transfers to other heirs. Property passing to a spouse, or from a child twenty-one years of age or younger by a parent is taxed at a rate of 0%.

Transfers to governmental entities are exempt. In addition, transfers of property to be used exclusively for religious, charitable, scientific, literary or educational purposes and transfers to qualified veteran organizations are also exempt.

Inheritance Tax payments are due upon the death of the decedent and become delinquent nine months after the decedent’s death. If the Inheritance Tax is paid within three months of the decedent’s death, a 5% discount is allowed.

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Bruce Springsteen has been named by the husband in a New Jersey divorce as the party with which his wife "committed adultery ... at various times and places too numerous to mention." So why does the Boss need to be dragged into what appears will be an ugly and protracted divorce?

New Jersey, like Bucks County, Pennsylvania, requires a spouse to establish a sufficient reason under the law to allow a divorce to occur.  Simply asking for a divorce is not sufficient.  The reason, or "grounds" for the divorce must be set forth in the initial filing of the divorce complaint.  As is true in Bucks County, the grounds for divorce in New Jersey can either be "fault" or "no-fault."

Historically, in New Jersey the only no-fault grounds required spouses to live separate and apart in different habitations for 18 or more consecutive months with no reasonable prospect of reconciliation.

Most people don’t want to wait 18 months.  So how can they get divorced sooner?  Traditionally, in those cases, the filing party must file a fault based divorce complaint.  The most common fault based grounds have been: extreme mental or physical cruelty; desertion; and, every aggrieved spouse’s obsession, adultery.  Furthermore, under the current law in New Jersey and Bucks County, Pennsylvania, if a party files and requests a divorce on the ground of adultery, then the individual who the spouse allegedly committed adultery with must be identified as well as the time, place and circumstances of the acts.  New Jersey even requires the spouse making the allegation to serve the divorce complaint on the third party.

However, in January, 2007, Governor Corzine signed into law the most recent grounds for divorce in New Jersey: irreconcilable differences.  The new ground allows for a divorce after irreconcilable differences have caused the breakdown of the marriage for a period of six months and there is no prospect of reconciliation.  This new no-fault ground allows the parties to get a divorce without placing blame on one party for the failure of the marriage and does not require them to live separate and apart for a year and a half.

Further, in Pennsylvania and many states, if a divorce can be granted on no-fault grounds then the divorce must be granted on no-fault grounds. So again, why was Springsteen named in another couple’s divorce?

Although most divorce practitioners avoid or even refuse to advance fault based grounds, practitioners who do raise adultery claims do so either because they succumbed to the demands of a spouse who want their pound of flesh from the offending spouse, or because they believe pleading and/or establishing adultery will somehow give them an advantage in the divorce.  Or perhaps they are just looking for publicity at the Boss’ expense.

The only legitimate reason to reveal such salacious and personal details would be if establishing the adultery gives the non-offending party a legal advantage.  The New Jersey Supreme Court recently addressed the role adultery is to have in a party’s request for alimony.  The New Jersey Supreme court held that adultery is irrelevant to alimony except in two narrow instances: 1) cases in which the fault has affected the parties’ economic life, and; 2) cases in which the fault so violates societal norms that continuing the economic bonds between the parties would confound notions of simple justice.  The former may be considered in the calculation of alimony and the latter in connection with the initial determination of whether alimony should be allowed at all.

It is the exceptional case which can meet either of the enumerated standards set forth by the New Jersey Supreme Court.  The inclusion of adultery as a grounds for divorce, whether filed in New Jersey, or Bucks County, Pennsylvania, rarely serves a legitimate purpose and usually only ramps-up hostility and animosity in an already inflamed proceeding.  It is wise counsel who avoids creating sparks in a tinder box.

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A. Christopher Florio, Shareholder and Co-Chair of Stark & Stark's Community Associations group, will present a seminar entitled Legal Issues in Age Restricted Communities at the 2009 Pennsylvania & Delaware Valley Community Associations Institute and Apartment Association of Greater Philadelphia's annual conference. The conference will be held Wednesday April 29, 2009 at the Valley Forge Convention Center in King of Prussia, Pennsylvania.

Mr. Florio's seminar will be speaking about living in age restricted communities, and the legal issues that are peculiar to age restricted communities in Pennsylvania. You can access additional conference information, a full list of the convention seminars, and registration information here.
 

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Stark & Stark recently obtained a $910,000 settlement on behalf of a 75-year-old man and a 74-year-old woman who were killed in the Lehigh Valley area in an automobile accident.  The estates were represented by Ed Shensky, John Cordisco, and Tyler Tomlinson members of Stark & Stark’s Accident & Personal Injury group.

The driver, Ronald Whitman, ran a red light and killed the couple.  Mr. Whitman, who was driving a truck with an overweight load, claimed that his brakes did not work.  After two years of litigation, Mr. Whitman plead guilty to two counts of vehicular homicide and is currently in prison

The lawsuit named as Defendants, Ronald Whitman, Sr., Houser Construction Services, Inc., Eastern Industries, Balfour Beatty Infrastructure, Inc., Balfour Beatty Construction, LLC., Lesher Mack Sales & Service, Inc., and JL Hartley, Inc.

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The fallout from the scandal arising from the conduct of Luzerne County Common Pleas Judges Mark Ciavarella, the former President Judge, and Judge Michael Conahan is expanding.  Earlier this year Judges Ciavarella and Conahan pled guilty to charges of corruption.  Specifically, the Judges pled guilty to charges that they took $2.6 million in payments from the former owner of juvenile detention centers.   

On April 2, the FBI seized 79 Uninsured and Underinsured (UM/UIM) case files from the Luzerne County Courthouse.  This seizure is part of the FBI’s investigation into allegations that the Court’s procedures to appoint  neutral arbitrators in these matters led to case fixing.

Most recently, on April 7, the Pennsylvania Supreme Court invoked its’ rarely used King’s Bench authority to review a $3.5 million dollar defamation verdict.  The original trial was presided over by Judge Ciavarella without a jury.  “The Supreme Court’s exercise of its king’s bench power is done very rarely. It’s done only when the Court sees some issue of great public importance that needs to be addressed” according to a spokesman for the Administrative Office of Pennsylvania Courts who was quoted in the Philadelphia Inquirer.

The extent of this scandal is not yet known. For example, my associate,  Joseph Visco, and I are currently investigating a domestic relations case in which a spouse may have received hundreds of thousands of dollars less then they were entitled to in a property settlement dispute presided over by Judge Ciavarella. I will continue to keep the readers of this blog informed on this and other related cases. Should you have questions regarding this case, or other cases of legal malpractice, please feel free to contact me at 267.907.9600.

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Typically, attorneys and clients faced with an adverse non-Final Order of a trial Court are presented with two quite unsatisfactory choices in deciding how to proceed.  The first option is to wait until the disposition of a case to appeal the Order, and the second is the rarely successful course of Moving the trial Court for permission to appeal an Interlocutory Order.  Many practitioners are unaware that there is an entire third class of Orders in Pennsylvania which are neither Interlocutory nor Final, and which may be immediately appealed to a higher Court.  This narrow class of Orders – the Collateral Order – present practitioners with an opportunity to bypass the procedure for certifying an Interlocutory Order for Appeal and proceed directly to an Appellate Court.

The Collateral Order Doctrine existed in Pennsylvania common law well before the adoption of Pa.R.A.P. No. 313, codifying the doctrine.  An Interlocutory Order will be deemed a Collateral Order, and thus immediately appealable as of right, if the Order itself is “separable and collateral to the main cause of action,” where “the right involved is too important to be denied review” and where “if review is postponed  .  .  .  the claim will be irreparably lost.”  All three prongs of the Rule’s test must be met in order to secure a proper Collateral Appeal and overcome Quashal.  The Courts of the Commonwealth have traditionally guarded the Collateral Order Doctrine jealously, narrowly interpreting each prong of the Collateral Order test in order to prevent Collateral Orders from swallowing the general Rule that non-Final Orders are not appealable.

Most recently, Appellate Rule 313’s “separable and collateral” language has been interpreted by the Pennsylvania Supreme Court to mean that review of the Order itself does not require analysis of the merits of the underlying claim.  Ben v. Schwartz, 729 A.2d 547 (Pa. 1999).  In Ben, the Pennsylvania Supreme Court considered an appeal where the Appellant asserted statutory privilege in a State Bureau’s investigative files.  While disclosure of allegedly privileged information may have a significant impact of the likelihood of one party prevailing in an action, a Court’s ruling concerning a privilege is unlikely to go to the merits of a case, and thus is a matter that is “separable and collateral” deserving immediate Appellate Review.

The second prong of the Collateral Appeal test, concerning the importance of the right which a prospective Appellant desires to safeguard cannot be underestimated.  It is this prong which most permits the Appellate Courts to narrow the Collateral Appeal doctrine on policy grounds and for the purpose of enforcing the line between Interlocutory Orders and Collateral Orders.  The most successful claims to review under the doctrine will touch upon rights of Constitutional import, such as First Amendment Free Speech clause claims, statutory rights and privileges, such as rights to nondisclosure of information protected under HIPAA and FERPA, and rights founded in the common law with “deep historical roots” and which reflect broad public policy, such as the attorney-client privilege. 

The third prong of the test will also tend to narrow the class of Orders subject to Collateral Appellate Review.  Non-Final Orders which meet the first two prongs of the Collateral Order test, but which do not present the possibility of an irreparable and irreversible error on the part of the lower Court will be denied review as Collateral Appeals.  Once again, the most fertile ground for Collateral Appeals will be found in the realm of statutory and common law privileges, and Orders affecting Constitutional Rights where there is a strong policy against prior restraint, as in Free Speech cases.  Collateral Orders can most effectively be analogized as the proverbial “bell that cannot be un-rung,” and practitioners will do well to emphasize and support their arguments in response to Motions to Quash and in the Appellate Brief itself that the harm of the lower Court’s error is of such a class that allowing the Order to stand until the resolution of the case-in-chief will render the later appeal both fruitless and meaningless.

As many practitioners reading this article may have concluded, the prospect of a Collateral Appeal will often arise during the Discovery process, where the Court enters an adverse Discovery Order and the client wishes to preserve rights in that context.  One would expect that Collateral Appeals will become more common as Legislatures and Courts seek to expand rights founded in privacy and privileges against disclosure, and as computer use obscures the line between personal and business affairs.  To meet these new challenges in practice, attorneys must be aware of the Collateral Appeal Rule, the Collateral Appeal Doctrine, and have a working knowledge of the many Pennsylvania Appellate Rules in order to successfully pursue a Collateral Appeal.

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Joseph D. Visco, and Megan E. Smith, members of Stark & Stark's Divorce Group, and Robert D. Strochak, Ph.D., ABPP, Child Custody Expert, will present a free divorce seminar Saturday May 2, 2009. The seminar will take place at the Hampton Inn in Yardley, Pennsylvania from 9:00 - 11:00 AM.

The seminar will cover topics including the difference between legal custody and physical custody, a discussion on shared custody/partial custody, visitation rights, custody evaluations, Bucks County divorce procedures, how to determine the best interests of the child, a discussion on the Tender Years Doctrine and relocation & modification of custody orders. The seminar is free to the public, however, registration is required. Please contact Kelly at 267.907.9600 or by email at kelly@stark-stark.com to reserve your space.
 

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A downturn in an industry can often highlight the least productive of a company’s employees at a time when it also becomes necessary to run a much leaner operation in order to remain in business. As an employer, you may be tempted to reduce the compensation of particular employees in order to maintain overall financial viability. At the same time, you should also be mindful that a reduction in compensation that constitutes a “substantial reduction” can give an employee a “necessitous and compelling” cause to voluntarily terminate employment without waiving the employee’s eligibility for unemployment compensation.

There is no bright line in Pennsylvania that gives an employer clear guidance as to what constitutes a “substantial reduction” in pay – in fact, cases applying the “substantial” reduction test have been clear in stating and restating only that there is no numerical test defining what constitutes “substantial,” and that each and every Unemployment Compensation Claim asserting a necessitous and compelling cause for voluntary separation in response to a reduction in compensation will be measured by its own facts and circumstances. What is clear is that the Courts do not want to give employers a hard numerical “safe harbor,” which would likely encourage employers to reduce employee compensation by the full allowable amount regardless of the facts and circumstances of each case, advantaging management over employees in the ongoing battle over compensation.

Ultimately, the overwhelming majority of Unemployment Compensation Claims cases are won or lost at the Unemployment Compensation Board of Review level. This means that it is vital that an employer meticulously and regularly document position-specific employee duties, individual employee performance and compensation arrangements in order to establish a factual record supportive of the employee’s position at a Review Hearing. Although the law in Pennsylvania regarding “substantial reduction” in employee compensation is unclear, when it becomes necessary to reduce employee compensation, an employer can take preemptive countermeasures to put a company in the most favorable position to avoid the negative aspects of a successful Unemployment Compensation claim against the company.  

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Before purchasing or renewing your automobile insurance you should understand the coverages you are buying. Your policy will list on the “Declarations” page the types of coverages you have and the dollar amount of the coverage but it will not explain in any detail what that coverage means to you and why it is in your policy. The purpose of this article is to provide you with that information so that you can make intelligent choices the next time you renew or purchase automobile insurance coverage. Each month we will address a different coverage issue.

In this first installment we will look at the coverage in your policy that is called “Bodily Injury” or “Liability”

This is coverage that is mandatory in Pennsylvania. It covers any person or persons that you may injure if you are involved in an accident. In other words it is that amount of money that your insurance company will pay to any person injured in an accident caused by you or anyone insured under your policy. The mandatory minimum coverage in Pennsylvania is $15,000. The premium you will be charged will vary depending on the amount of coverage that you purchase. Some insurance companies sell this coverage as a “single” limit and others will sell this coverage with split limits. A single limit policy is a policy that will pay up to the amount of your coverage for any one accident. For example if you have a $100,000 single limit policy your insurance company will pay up to $100,000 total to all people who may be injured in the accident. On the other hand some policies are sold with split limits. Your policy may read that your coverage is $100,000 / $300,000. That means that your insurance company will pay up to $100,000 per injured party with a maximum payout of $300,000 per accident. Of course, the more coverage you purchase, the higher your premium will be.

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This blog is part of an ongoing series discussing the Pennsylvania Mechanics’ Lien Law. For more information on Mechanics' Liens in Pennsylvania, click here.

If you’re in the Contracting business, you know well that performing professional work and keeping your customer happy is only half of what is required to maintain a financially healthy business.  The other half of the Contracting business is the challenge of getting paid for good work already performed, after you have paid suppliers and met payroll, and when your attention has turned to new jobs needed to keep you in business.  For Subcontractors, unscrupulous General Contractors compound the problem of getting paid for good work already completed when they withhold funds allocated to your work long after the work has been accepted and paid for by the owner.  Too often, an unscrupulous General Contractor will take advantage of its ability to “squeeze” a Subcontractor, knowing that the Subcontractor may accept reduced payment in order to meet its operating expenses. 

Most Contractors and Subcontractors are familiar with Mechanics’ Liens to ensure payment by an owner of General Contractor, however, Mechanics’ Liens are not always an effective and efficient means to force payment.  Often, the property will be sold or a General Contractor paid in full by an Owner before a Contractor or Subcontractor files a Lien limiting the effectiveness of the Lien.  In addition, Mechanics Liens, though a valuable tool, limit the Claimant’s recovery to the value of the work performed, and do not allow an aggrieved party to seek an amount which reflects the costs of grossly delayed payments by an Owner or General Contractor.   

In a perfect world, owners would pay Contractors on time, and Contractors would pay Subcontractors on time and in full.  Although Pennsylvania isn’t a perfect world, in 1994 the Pennsylvania Legislature made life for Contractors and Subcontractors a bit easier by enacting the Pennsylvania Contractor/Subcontractor Payment Act. (“the Act”)  The Act provides for adherence to payment deadlines to encourage fair dealing among parties to all commercial Construction Contracts, as well as residential Construction Contracts with six (6) or more units simultaneously under construction in the Commonwealth.  In addition, the Legislature provided a “Hammer” for Contractors and Subcontractors in the form of statutory authorization for a Court or Arbitrator to award interest and penalties on payment amounts which are withheld by Owners or Contractors which do not reasonably relate to deficiencies in the work performed.  The interest and penalties under the Act are each calculated at the rate of 1% of the wrongfully withheld payment per month.  For example, if an owner wrongfully withholds payment for the period of one (1) year, a Contractor is entitled to interest in the amount of 12% of what is withheld, as well as penalties in the amount of 12%, for a total of 24% of the amount wrongfully withheld by the Owner or General Contractor. 

Additionally, if a claim is brought pursuant to the Act and a Contractor or Subcontractor is a “substantially prevailing party,” the Act entitles the Contractor or Subcontractor to an award of attorneys’ fees.  Beware, however, that a “substantially prevailing party” under the Act can be either the Plaintiff or Defendant – if a Contractor or Subcontractor brings a claim under the Act for payment which a Court later determines is reasonably related to deficiencies in the work, the Court can then award attorneys’ fees to an Owner or General Contractor who rightfully refused to pay in full.  

In short, the Contractor/Subcontractor Payment Act provides a valuable tool to ensure prompt payment in full for Contractors and Subcontractors which perform good work for Owners and General Contractors in the Commonwealth.  Waiving the “Hammer” of interest, penalties, and attorneys’ fees under the Act can motivate a slow paying Owner or unscrupulous General Contractor to reconsider the decision to withhold payment in full without good cause.

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When you select your auto insurance coverage in Pennsylvania, we recommend that you choose Full Tort coverage instead of Limited Tort coverage.

With Limited Tort, you basically give up the right to receive compensation for pain and suffering if you are injured in a car accident in Pennsylvania.  There are very few exceptions to this rule.  If you have never been injured in an auto accident, you may not appreciate the pain and suffering that a person may experience.  Most people select Limited Tort because it saves them a few dollars on their insurance.

With Full Tort, you are allowed to seek money for your pain and suffering due to any injury you receive in an auto accident if you are not at fault.  While Full Tort may cost a little more money, it makes sense to pay this for your well being and peace of mind.

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Any time you give someone money or property, you may be subject to paying a gift tax.  The federal government has established guidelines for gift tax exemptions for all money or property transferred. For the year 2009, a person can gift up to $13,000 (the amount is adjusted yearly for inflation) in money or property to another person without triggering any gift tax consequences.

In order for the government to consider a transfer of money or property a “gift”, the “gift” must meet several requirements. First, the gift must be gratuitous in nature.  Second, the gift must be complete and voluntary. This means that you must give up complete control of the gift and do so under your own free will (not pursuant to a court order, etc.). Finally, the gift must be tangible in nature (an exchange of services does not qualify as a gift).

As long as the gift is kept at or under $13,000 (for the year 2009), there are no adverse tax consequences to you by giving the gift. In addition, the annual limit for a gift is on a per person basis, which makes annual gifting even more advantageous. For instance (assuming the $13,000 gift tax exemption for 2009 applies), a couple with two children can gift $52,000 ($13,000 to each child by each parent) each year to their children free of estate and gift tax.   

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