Juban v. Schermer

• Citation: 751 A.2d 1190
• Parties: Julia JUBAN a/k/a Julia Jubon, Executrix of the Estate of John Hepak v. William C. SCHERMER, Holland Metro Inc. Realtors, Coldwell Banker, Froelich Realtors and Dee C. Steinheiser and Elaine Steinheiser, His Wife. Appeal of William C. Schermer, Appellant.
• Decision Date: 05 May 2000
• Court: Superior Court of Pennsylvania

751 A.2d 1190

Julia JUBAN a/k/a Julia Jubon, Executrix of the Estate of John Hepak v. William C. SCHERMER, Holland Metro Inc. Realtors, Coldwell Banker, Froelich Realtors and Dee C. Steinheiser and Elaine Steinheiser, His Wife.

Appeal of William C. Schermer, Appellant.

Superior Court of Pennsylvania.

Argued November 17, 1999.

Filed May 5, 2000.

James R. Fryling, Erie, for appellant.

Eugene J. Brew Erie, for Steinheiser, appellee.

Before DEL SOLE, FORD ELLIOTT, and TAMILIA, JJ.

FORD ELLIOTT, J.:

¶ 1 Before us is an order denying appellant William C. Schermer's ("Schermer's") petition to assess damages and retain bond, filed after this court affirmed a declaratory judgment entered in Schermer's favor. Because we find that § 7538 of the Declaratory Judgments Act, 42 Pa.C.S.A. § 7532-7541, ("DJA") authorizes a petition to assess damages based on a declaratory judgment, we reverse and remand. A brief review of the factual and procedural history of this case follows.

¶ 2 Julia Juban, a/k/a/ Julia Jubon ("Juban"), on behalf of her late father, entered into two competing Articles of Agreement for the Sale of Real Estate, one with Dee C. Steinheiser and Elaine Steinheiser for $95,000, and the other with Schermer for $90,000. Juban, who had transferred title to the property to Steinheisers on or about July 25, 1997, brought an action for declaratory relief, asking the court to determine which of the two agreements was valid. Following a non-jury trial, the court declared valid the Schermer agreement. Both Juban and Steinheisers filed exceptions to the trial court's decree nisi in favor of Schermer. The court denied the exceptions and entered its decree nisi as a final order on March 30, 1998.

¶ 3 On April 21, 1998, Steinheisers filed an appeal to this court. In response, Schermer filed a motion to set a bond hearing pursuant to Pa.R.App.P. 1733.¹ In his motion, Schermer claimed that Steinheisers refused to allow Schermer to inspect the property, of which they retained possession, and that Steinheisers had leased part of the property to an individual who was farming the leased parcel. (R.R. at 26a.) The court ordered Steinheisers to post bond or pay cash security in the amount of $50,000 and further ordered Steinheisers not to encumber the land or make physical alterations to the land and its fixtures, including the fence. (R.R. at 29a.) Steinheisers did not post bond, however,² and also allegedly removed trees, removed a portion of the fence, and allowed 27 acres of the 60-acre parcel to be farmed. (R.R. at 30a-31a; notes of testimony, 5/22/98 at 9-10.)

¶ 4 On December 22, 1998, this court affirmed the trial court's judgment in favor of Schermer. Steinheisers then transferred possession of the land to Schermer on February 12, 1999, and on February 16, 1999, Schermer filed the petition underlying this appeal. In his petition, Schermer claimed that Steinheisers had caused damage to the property by removing trees and allowing cultivation of approximately 27 acres of the land. Schermer also claimed that Steinheisers had received benefits in the form of the fair rental value of the home, land, and buildings and in the receipt of oil and gas royalties since they took possession on July 27, 1997. (R.R. at 30a-31a.) Steinheisers filed preliminary objections in the nature of a demurrer. The trial court denied Schermer's petition by order entered March 24, 1999 "because no case law authority exists that would allow a damage claim in a declaratory judgment action." (R.R. at 39a.) This timely appeal followed.

¶ 5 Our standard of review is well established:

When reviewing an order granting preliminary objections in the nature of a demurrer, an appellate court applies the same standard employed by the trial court: all material facts set forth in the complaint as well as all inferences reasonably deducible therefrom are admitted as true for the purposes of review. The question presented by the demurrer is whether, on the facts averred, the law says with certainty that no recovery is possible. Where any doubt exists as to whether a demurrer should be sustained, it should be resolved in favor of overruling the demurrer.

Jackson v. Garland, 424 Pa.Super. 378, 622 A.2d 969, 970 (1993) (citations omitted).

¶ 6 The issue before us asks us to determine whether the DJA allows a damage claim subsequent and supplemental to the entry of a declaratory judgment. The parties cite the same two cases in support of both of their positions; Kelmo Enterprises v. Commercial Union Ins., 285 Pa.Super. 13, 426 A.2d 680 (1981), disapproved on other grounds, Standard Venetian Blind Co. v. American Empire Ins. Co., 503 Pa. 300, 469 A.2d 563 (1983)

; and Mueller v. State Police Headquarters, 110 Pa. Cmwlth. 265, 532 A.2d 900 (1987). We find neither case dispositive of the issue.

¶ 7 In Kelmo, this court addressed the issue whether the trial court erred when it awarded attorneys' fees and costs to an insured who brought a declaratory judgment action to establish his insurer's duty to defend. We concluded that such an award was appropriate where the insurer's refusal to defend was unreasonable and in bad faith. Kelmo, 426 A.2d at 685. Thus, while Kelmo lends support to Schermer's position, it is not dispositive because both its facts and its holding are distinguishable.

¶ 8 In Mueller, a prisoner sought both mandamus and declaratory relief, claiming that Department of Corrections officials violated their duty to file or investigate criminal complaints after Mueller alleged criminal conduct on the part of several corrections officers. The Commonwealth Court addressed the issue whether a prisoner seeking a declaratory judgment as to his rights under a Department of Corrections Administrative Directive and as to the legal effect of certain actions by Department personnel could also seek an assessment of compensatory and punitive damages under the Act. Mueller, 532 A.2d at 905. Finding that assessment of compensatory and punitive damages was outside the scope of the DJA, the Commonwealth Court held that the Act did not allow such a claim for damages. Id.

¶ 9 We find Mueller both factually and procedurally distinguishable because Mueller made claims for damages before the court determined whether he was entitled to declaratory relief. As a result, Mueller was not claiming damages based on a declaration of rights in his favor. We also find Mueller distinguishable because that court did not discuss the applicability of § 7538 of the Act, discussed infra and relevant to this case, to Mueller's claim for damages.

¶ 10 We agree with the Mueller court, however, that "[t]he purpose of the Declaratory Judgments Act ... is to afford relief from uncertainty and insecurity with respect to legal rights, status and other relations." Mueller, 532 A.2d at 905, citing Fidelity Bank v. Pennsylvania Turnpike Commission, 498 Pa. 80, 444 A.2d 1154 (1982). We also agree that the Act describes the power of courts of record under the Act as "the power to declare rights, status, and other legal relations whether or not further relief is or could be claimed." 42 Pa.C.S.A. § 7532. Nevertheless, the legislature has also declared that the Act is to be remedial and is to be liberally construed. 42 Pa.C.S.A. § 7541. Additionally, the Act provides for supplemental judicial relief based on a declaratory judgment or decree. 42 Pa.C.S.A. § 7538. We set forth the relevant portion of that section:

§ 7538. Applications for relief

(a) General rule.—Judicial relief based on a declaratory judgment or decree may be granted whenever necessary or proper, subject to Chapter 55 (relating to limitation of time). If an application for supplemental relief is deemed sufficient the court shall, on reasonable notice, require any adverse party whose rights have been adjudicated by a previously entered declaratory judgment or decree to show cause why further relief should not be granted.

Id.

¶ 11 We have found only one Pennsylvania appellate case tangentially addressing the issue whether this section allows a party whose rights have been established by declaratory judgment to file a subsequent and supplemental application for damages based on the declaratory judgment. In Philadelphia Manufacturers Mut. Fire Ins. Co. v. Rose, 364 Pa. 15, 70 A.2d 316 (1950), an insurer and insured sought a declaration as to their respective rights under a policy of fire insurance when fire partially destroyed one of the insured's buildings. The trial court found that the policy did not cover the partially destroyed building, and the insured filed exceptions; however the en banc court did not address the insured's exceptions, concluding that a declaratory judgment proceeding was not an optional substitute for an action of assumpsit. Id. at 21, 70 A.2d at 318.

¶ 12 The supreme court reversed, however, because the legislature had recently amended the DJA to allow a party to seek declaratory relief even where the controversy was susceptible of relief though a general common law or equitable remedy. Id. at 70 A.2d at 319, citing 12 P.S. § 836 (repealed). Noting that declaratory judgments were frequently used to determine coverage in insurance cases, the supreme court opined that regardless of the form of the declaration, whether for insurer or insured, the declaration would end the controversy. Id. at 70 A.2d at 320. According to the supreme court, "The proceeding should not be dismissed because in one contingency it may be necessary, either by supplementary proceedings in this case or by independent action, based on what may be adjudicated in this case, to determine the amount of the damage payable." Id., citing 12 P.S. § 838³ (emphasis added).

¶ 13 While we recognize that this statement in Rose is dictum, we are mindful that "when presented with an issue for which there is no clear precedent, our role as an intermediate appellate court is to resolve the issue as we predict our Supreme Court would do." State Farm...