Com. v. Corban Corp.

• Decision Date: 04 October 2006
• Parties: COMMONWEALTH of Pennsylvania, Appellant, v. CORBAN CORPORATION, d/b/a Encor Coatings, Inc., Appellee. Commonwealth of Pennsylvania, Appellant, v. William R. Condosta, Appellee.
• Court: Pennsylvania Superior Court

909 A.2d 406

COMMONWEALTH of Pennsylvania, Appellant, v. CORBAN CORPORATION, d/b/a Encor Coatings, Inc., Appellee.

Commonwealth of Pennsylvania, Appellant, v. William R. Condosta, Appellee.

Superior Court of Pennsylvania.

Argued April 5, 2006.

Filed October 4, 2006.

Roy A. Manwaring, Asst. Dist. Atty., Erie, for Com., appellant.

Steve N. Goudsouzian, Easton, for Corban, appellee.

Sara Hogan, Bethlehem, for Condosta, appellee.

Eric G. Preputnick, Erie, Harrisburg, for Dept. of Labor and Industry, Amicus Curiae.

BEFORE: STEVENS, GANTMAN, and KELLY, JJ.

OPINION BY GANTMAN, J.:

¶ 1 The Commonwealth of Pennsylvania appeals from the final order¹ of the Northampton Court of Common Pleas entered in two criminal cases against Appellees, Corban Corporation d/b/a Encor Coatings, Inc. ("Corban") and William R. Condosta ("Condosta"). The order granted Corban's and Condosta's motions to dismiss the criminal charges against them for numerous offenses arising from their failure to maintain Workers' Compensation Insurance, pursuant to 77 P.S. § 501. Specifically, the Commonwealth asks us to determine whether the trial court erred when it dismissed the charges, based upon the expiration of the general two-year statute of limitations set forth in 42 Pa.C.S.A. § 5552. We hold that the dismissed offenses were subject to the five-year statute of limitations of 77 P.S. § 1039.12, not the two-year statute of limitations of 42 Pa. C.S.A. § 5552. Accordingly, we reverse and remand for further proceedings.

¶ 2 The relevant facts and procedural history of this appeal are as follows. On December 7, 2000, Elmer Kennedy, III was working for Corban as a forklift operator and hard laborer. When Mr. Kennedy entered a building at the Corban facility, sparks made contact with his clothing and ignited. (N.T. Hearing (Motion to Dismiss), 1/18/05, at 11). Mr. Kennedy sustained serious burns to his back, which required protracted medical treatment.

¶ 3 Subsequently, Mr. Kennedy hired an attorney to pursue Workers' Compensation benefits to mitigate the significant financial burden he incurred as a consequence of his work injury. Mr. Kennedy completed and submitted the paperwork required to make a claim for Workers' Compensation benefits. His claim, however, was denied due to Corban's lack of Workers' Compensation Insurance coverage on December 7, 2000.

¶ 4 Lehigh County Insurance Fraud Task Force initiated an investigation of Corban's Workers' Compensation Insurance coverage to determine the extent of the corporation's infractions. An investigator with the Bureau of Workers' Compensation verified that Corban had no Workers' Compensation Insurance coverage on December 7, 2000, the date of Kennedy's injury. The investigation revealed Corban had failed in the past to maintain Workers' Compensation Insurance coverage.

¶ 5 Mr. Mark Grandinetti, the insurance agent who was responsible for procuring Corban's insurance, testified at the preliminary hearing. Mr. Grandinetti testified that Condosta was the contact person at Corban. Mr. Grandinetti dealt solely with Condosta regarding any and all Workers' Compensation Insurance issues for Corban's business.² Mr. Grandinetti testified that, according to his business records, Corban had allowed its Workers' Compensation Insurance coverage to lapse on numerous occasions for extended periods of time, beginning in 1995, for failure to pay premiums. Mr. Grandinetti also confirmed that Corban had no Workers Compensation Insurance coverage on December 7, 2000, the date of Mr. Kennedy's accident.

¶ 6 On September 21, 2004, the Lehigh County Insurance Fraud Task Force filed a criminal complaint asserting seven counts of third-degree felony charges, under 77 P.S. § 501(a)(1), against Corban and Condosta for failing to maintain Workers' Compensation Insurance during the following periods:

November 1, 2000 through November 30, 2000

December 1, 2000 through December 22, 2000

June 18, 2002 through June 30, 2002

July 1, 2002 through July 31, 2002

August 1, 2002 through August 31, 2002

September 1, 2002 through September 9, 2002

June 1, 2000 through July 17, 2003³

(See Criminal Complaint, filed 9/21/04, at 2-2.)

¶ 7 On April 1, 2005, Corban and Condosta filed separate omnibus pretrial motions, in which each objected to the timeliness of the Commonwealth's criminal complaints on the ground that the two-year statute of limitations set forth in 42 Pa.C.S.A. § 5552 had expired. Specifically, they argued that the offenses as charged occurred before September 10, 2002. Therefore, the Commonwealth's criminal complaint, filed on September 24, 2004, was untimely filed beyond the two-year limitations period.

¶ 8 On July 22, 2005, the trial court granted the motions to dismiss, based upon the two year statute of limitations contained in 42 Pa.C.S.A. § 5552. On August 12, 2005, the Commonwealth filed a notice of appeal. On August 19, 2005, the court ordered the Commonwealth to file a concise statement of matters complained of on appeal, pursuant to Pa.R.A.P. 1925(b). The Commonwealth timely filed its Rule 1925(b) statement on August 25, 2005.

¶ 9 On appeal, the Commonwealth raises three issues for our review:

WHETHER THE TRIAL COURT ERRED AS A MATTER OF LAW IN FAILING TO APPLY THE FIVE (5) YEAR STATUTE OF LIMITATIONS CONTAINED AT 77 P.S. § 1039[.]12 TO THE CRIMINAL CHARGES FILED AGAINST THE DEFENDANTS?

WHETHER THE TRIAL COURT ERRED AS A MATTER OF LAW IN APPLYING THE TWO (2) YEAR STATUTE OF LIMITATIONS CONTAINED AT 42 Pa.C.S. § 5552 TO THE CRIMINAL CHARGES FILED AGAINST THE DEFENDANTS?

WHETHER THE TRIAL COURT ERRED AS A MATTER OF LAW IN DISMISSING THE CRIMINAL CHARGES FILED AGAINST THE

DEFENDANTS PURSUANT TO 42 Pa.C.S. § 5552?

(Commonwealth's Brief at 4).

¶ 10 The interpretation and "application of a statute is a question of law that compels plenary review to determine whether the court committed an error of law." Commonwealth v. Williams, 871 A.2d 254, 262 (Pa.Super.2005). Where the date of discovery of criminal acts is unrebutted, the issue of whether the statute of limitations for prosecution has run is a question of law for the trial judge. Commonwealth v. Hoffman, 263 Pa.Super. 442, 398 A.2d 658, 661 (1979). "As with all questions of law, the appellate standard of review is de novo and the appellate scope of review is plenary." In re Wilson, 879 A.2d 199, 214 (Pa.Super.2005) (en banc).

¶ 11 The Commonwealth argues the five-year statute of limitations contained in the Workers' Compensation Act, at 77 P.S. § 1039.12, applies to the charges filed against Corban and Condosta for failing to maintain the requisite Workers' Compensation Insurance. The Commonwealth contends it should be able to prosecute any criminal acts committed by Corban and Condosta since September 21, 1999, five years before the criminal complaint was filed. The Commonwealth maintains the statute of limitations in Section 1039.12 applies to the prosecution of criminal violations of the Workers' Compensation Act. The Commonwealth concludes the court erred in dismissing the charges against Corban and Condosta, based upon the expiration of the general two-year limitations set forth in 42 Pa. C.S.A. § 5552. We agree.

¶ 12 This case involves the interpretation and application of Section 501 of Pennsylvania's Workers' Compensation Act, which provides in relevant part:

§ 501 Insurance of payment of compensation by employer; appeal from denial of exemption; effect of failure to insure; penalty; remedies for failure to secure payment

(a)(1) Every employer liable under this act to pay compensation shall insure the payment of compensation in the State Workmen's Insurance Fund, or in any insurance company, or mutual association or company, authorized to insure such liability in this Commonwealth, unless such employer shall be exempted by the department from such insurance. . . .

* * *

(b) Any employer who fails to comply with the provisions of this section for every such failure, shall, upon conviction in the court of common pleas, be guilty of a misdemeanor of the third degree. If the failure to comply with this section is found by the court to be intentional, the employer shall be guilty of a felony of the third degree. Every day's violation shall constitute a separate offense. . . . It shall be the duty of the department to enforce the provisions of this section; and it shall investigate all violations that are brought to its notice and shall institute prosecutions for violations thereof. . . .

* * *

77 P.S. § 501(a)(1), (b). The specific statute of limitations provision upon which the Commonwealth relies is contained within Pennsylvania's Workers' Compensation Act and reads:

§ 1039.12 Limitations for prosecutions of offenses

A prosecution for an offense under this act must be commenced within five years after commission of the offense.

77 P.S. § 1039.12 (emphasis added).

¶ 13 The general statute of limitations section upon which Corban and Condosta rely is found in Chapter 55, Limitation of Time, Subchapter C. Criminal Proceedings, and provides:

§ 5552 Other offenses

(a) General rule—Except as otherwise provided in this subchapter, a prosecution for an offense must be commenced within two years after it is committed.

* * *

42 Pa.C.S.A. § 5552(a). This subsection operates as a default two year statute of limitations for criminal offenses generally. Id. Nevertheless, even Section 5552 contains exceptions, such as:

§ 5552 Other offenses

* * *

(c) Exceptions— If the period prescribed in subsection (a) . . . has expired, a prosecution may nevertheless be commenced for:

(1) Any offense a material element of which is either fraud or breach of fiduciary obligation within one year after discovery of the offense by an aggrieved party or by a person who has a legal duty to represent an aggrieved party and who is himself not a party to the offense, but in no case shall this paragraph extend the period of limitation otherwise applicable by...