Step Plan Serv. Inc. v. Koresko
| Decision Date | 22 February 2011 |
| Citation | 12 A.3d 401 |
| Parties | STEP PLAN SERVICES, INC., Wayne Bursey, Benistar Admin. Services, Inc., Benistar Insurance Group, Inc., Benistar 419 Plan Services, Inc., Appellantsv.John J. KORESKO, V, Lawrence Koresko, Koresko and Associates, P.C., Koresko Financial, L.P., Penn–Mont Benefit Services, Inc., Capitas Financial, LLC, Anderson, Kill & Olick, P.C., Virginia I. Miller, Lawrence S. Fischer, Community Trust Company, Lowell Gates, Arrow Drilling Company, Inc., Nestor Garza Sanchez & Daniels, Manuel Sanchez and John Daniels.Step Plan Services, Inc., Wayne Bursey, Benistar Admin. Services, Inc., Benistar Insurance Group, Inc., Benistar 419 Plan Services, Inc.,v.John J. Koresko, V, Lawrence Koresko, Koresko and Associates, P.C., Koresko Financial, L.P., and Penn–Mont Benefit Services, Inc., and Capitas Financial, LLC and Anderson, Kill & Olick and Virginia I. Miller, c/o Anderson, Kill & Olick, and Community Trust Company and Lowell Gates and Arrow Drilling Co., Inc., and Nestor Garza, and Sanchez and Daniels, Manuel Sanchez and John Daniels.Appeal of John J. Koresko, V, Lawrence Koresko, Koresko and Associates, P.C., Koresko Financial, L.P. and Penn–Mont Benefit Services, Inc. |
| Court | Pennsylvania Superior Court |
OPINION TEXT STARTS HERE
Ira Silverstein, Philadelphia, for Step Plan.Edward M. Dunham, Robert L. Byer, Philadelphia, for Anderson, Kill & Olick and Miller.Steven D. Johnson, Philadelphia, for Capitas.John J. Koresko, Bridgeport, for Koresko Defendants.Richard B. Morrison, Philadelphia, for Travelers Property & Casualty.BEFORE: BOWES, GANTMAN, and KELLY, JJ.OPINION BY GANTMAN, J.:
STEP Plan Services, Inc., Wayne Bursey, Benistar Admin. Services, Inc., Benistar Insurance Group, Inc., Benistar 419 Plan Services, Inc. (collectively “STEP”) and John J. Koresko, V, Lawrence Koresko, Koresko and Associates, P.C., Koresko Financial, L.P., and Penn–Mont Benefit Services, Inc. (collectively “Koresko–Defendants”) have filed separate appeals from the order entered in the Philadelphia County Court of Common Pleas, which enforced a prior settlement agreement. We affirm.
The trial court opinion set forth the relevant facts and procedural history of this case as follows:
[STEP] is a fiduciary and plan sponsor of the Step Plan [ & ] Trust, a multiple employer supplemental benefit plan and trust. The claims in this case revolve around an allegedly “unlawful scheme” by [d]efendants to remove [STEP] as a competitor and to wrongfully gain a competitive advantage over plaintiffs.
After a four year blitzkrieg of motion practice, trial in this matter was scheduled to begin on November 3, 2008. With the trial date fast approaching, the parties met with a mediator in an attempt to settle the matter. After two days of mediation, the parties reached an agreement to settle. The parties signed two preliminary term sheets reflecting the settlement, one on September 25, 2008 and one on September 30, 2008. On October 29, 2008, the [c]ourt, having been advised of the settlement by the parties, marked the case settled, discontinued and ended.
After the parties reached the settlement but prior to any distribution of proceeds ..., a group of [STEP] Plan's alleged creditors, the Cahaly Creditors, filed an action in Massachusetts to attach the settlement proceeds to satisfy a judgment obtained in Massachusetts. The United States District Court for the District of Massachusetts granted a [preliminary] injunction on November 21, 2008, enjoining [payment of] the proceeds of this litigation to ... [STEP] for a period of six months. 1 As a result of the Massachusetts Court's injunction, Defendants Virginia Miller, Esq., and Anderson Kill & Olick filed the instant Motion to Enforce Settlement.
The Koresko–Defendants present a number of complaints on appeal. We begin with their sixth and final issue, in which the Koresko–Defendants challenge subject matter jurisdiction by incorporating their arguments from their appeal docketed at No. 420 EDA 2009, which included:
(1) STEP's complaint in this case consisted fundamentally of compulsory counterclaims that should have been raised in earlier suits in other jurisdictions and were therefore precluded under Federal Rule of Civil Procedure 13(a) from being asserted and re-litigated in the current case.
(2) STEP's claims against the Koresko–Defendants for defamation, commercial disparagement, tortuous interference, abuse of process, and malicious prosecution in the current case are subject to federal preemption under ERISA, because they are state law claims that arose out of the federal cases associated with a plan regulated by ERISA (“Employee Retirement Income Security Program”).
(3) STEP's current action was a “strike suit” brought in retaliation against the Koresko–Defendants because they had previously represented parties who sued STEP for breaches of fiduciary duties in connection with certain welfare benefit plans STEP administered.
(4) STEP's claims in this case were barred by collateral estoppel, res judicata and the law of the case doctrine, as demonstrated by a prior decision involving the same parties, where the court suggested the Koresko–Defendants' litigation efforts against STEP were substantially justified.
(5) STEP is a foreign corporation that failed to properly register in Pennsylvania, and 15 Pa.C.S.A. § 4141 suspended its right to sue, leaving STEP with no standing to sue in state court when it commenced the current action. STEP could not later cure its lack of standing by subsequent corporate registration. Likewise, STEP failed to establish falsehoods, causation or damages as a result of the Koresko–Defendants' prior actions. Thus, STEP did not properly plead a Dragonetti Act claim.
(6) Under any theory of recovery, the statute of limitations had run on STEP's claims.
Essentially, the Koresko–Defendants' attacks on subject matter jurisdiction consist of two main theories: preemption and lack of standing to sue.
In their preemption argument, the Koresko–Defendants staunchly insist STEP's claims constituted compulsory counterclaims under the federal rules and the conduct asserted in STEP's case falls squarely within the ambit of ERISA and is integrally related to ERISA. As such, STEP's allegations are preempted by federal law and subject to exclusive federal jurisdiction.
The Koresko–Defendants' “standing” argument is a bit more complicated but rests mainly on STEP's lack of compliance with 15 Pa.C.S.A. § 4141 (). Specifically, the Koresko–Defendants contend STEP had no capacity to sue in state court absent the certificate of authority required of foreign corporations, where none of the STEP plaintiffs was a registered corporation when STEP initiated the suit. The Koresko–Defendants insist STEP's subsequent application for a certificate of authority, while the case was pending, did not cure the defect. For these reasons, the Koresko–Defendants aver any settlement in the case was invalid because STEP had no right to come to court for relief. The Koresko–Defendants complain the court should have addressed these matters long before the case edged toward settlement. Instead, the court improperly allowed the case to proceed to the point where the Koresko–Defendants' insurer felt compelled to settle. The Koresko–Defendants conclude the court's lack of subject matter jurisdiction and STEP's lack of standing to sue renders the settlement agreement void ab initio. 3
In their remaining issues, the Koresko–Defendants challenge Travelers' authority to settle the case and later intervene in the settlement enforcement proceedings. Specifically, the Koresko–Defendants contend Travelers filed a declaratory judgment action in federal court to determine if it had a duty to defend or indemnify the Koresko–Defendants in STEP's action. The Koresko–Defendants maintain that Travelers, by virtue of initiating the declaratory judgment action, was judicially and equitably estopped from exercising any authority to settle STEP's case.
Similarly, the Koresko–Defendants insist Travelers failed to establish a substantial or legally cognizable interest to permit it to intervene in the proceeding to enforce the settlement agreement at issue. The Koresko–Defendants reason the court presumed Travelers' obligation to defend and indemnify, which was still pending in the federal declaratory judgment action. In so doing, the court is said to have impermissibly interfered with the jurisdiction of the federal court. In short, the Koresko–Defendants submit Travelers' participation in the settlement enforcement proceeding now under review was superfluous and unauthorized. The Koresko–Defendants conclude the court erred in granting Travelers' the right to intervene in the settlement enforcement proceeding.4 For the following reasons, we reject all of the Koresko–Defendants' challenges to the court's authority to uphold the settlement agreement at issue.
“Subject matter jurisdiction relates to the competency of a court to hear and decide the type of controversy presented.” Commonwealth v. Bethea, 574 Pa. 100, 113, 828 A.2d 1066, 1074 (2003), cert. denied, 540 U.S. 1118, 124 S.Ct. 1065, 157 L.Ed.2d 911 (2004). See also 42 Pa.C.S.A. § 931(a). “The trial court has jurisdiction if it is competent to hear and determine controversies of the general nature of the matter involved sub judice.” Bernhard v. Bernhard, 447 Pa.Super. 118, 668 A.2d 546, 548–49 (1995).
Issues pertaining to jurisdiction are pure questions of law, and an appellate court's scope of review is plenary. Questions of law are subject to a de novo standard of review. Any issue going to the subject matter jurisdiction of a court or administrative tribunal to act in a particular matter is an issue the parties cannot waive by agreement or stipulation, estoppel, or waiver. In...
To continue reading
Request your trial
-
Babcock & Wilcox Co. v. Am. Nuclear Insurers
...actions when there is a dispute regarding whether the insurer has a duty to defend and/or indemnify....Step Plan Servs., Inc., v. Koresko, 12 A.3d 401, 419 (Pa.Super.2010) (internal quotation marks and citations omitted). Thus, in Brugnoli v. United National Insurance Co., we held: [A] liab......
-
De Lage Landen Financial Serv. Inc. v. Floors
...the title to the telephone equipment to be leased by Rasa at the time of formation of the contract. See Step Plan Servs., Inc. v. Koresko, 12 A.3d 401, 410 (Pa.Super.Ct.2010) (quoting Hart v. Arnold, 884 A.2d 316, 333–35 (Pa.Super.Ct.2005)). As to HP's argument regarding unilateral mistake,......
-
Angino v. Wells Fargo Bank, N.A., CIVIL NO. 1:15-CV-418
...party's financial situation as result of bank failure does not excuse performance on contract)." Step Plan Servs., Inc. v. Koresko, 12 A.3d 401, 412-13(Pa. Super. Ct. 2010). In this case, the Anginos attempt to assert that the change in their fiscal position gives them some form of affirmat......
-
I.K. v. Sch. Dist. of Haverford Twp.
...at most accepted a revoked offer and the District-offeree's ability to accept that agreement lapsed. See Step Plan Services, Inc. v. Koresko, 12 A.3d 401, 408–09 (Pa.Super.Ct.2010). Because no enforceable contract would exist in this event, the District's promissory estoppel claim survives.......
-
Chapter 5
...at the operative facts and not the nomenclature placed on the action by the lawyers.”). Pennsylvania: Step Plan Services, Inc. v. Koresko, 12 A.3d 401 (Pa. Super. 2010). But see: First Circuit: Prime Tanning Co. v. Liberty Mutual Insurance Co., 750 F. Supp.2d 198 (D. Me. 2010). [253] Commer......
-
CHAPTER 6 Duty to Defend and Insured Litigation
...at the operative facts and not the nomenclature placed on the action by the lawyers.”). Pennsylvania: Step Plan Services, Inc. v. Koresko, 12 A.3d 401 (Pa. Super. 2010). But see: First Circuit: Prime Tanning Co. v. Liberty Mutual Insurance Co., 750 F. Supp.2d 198 (D. Me. 2010). [33] See: Co......