Zitelli v. Dermatology Educ. and Research Foundation
| Decision Date | 08 November 1993 |
| Citation | 633 A.2d 134,534 Pa. 360 |
| Parties | , 87 Ed. Law Rep. 157 John A. ZITELLI, M.D., Appellant, v. DERMATOLOGY EDUCATION AND RESEARCH FOUNDATION, a Nonprofit Corporation, and the University of Pittsburgh, a Nonprofit Corporation, Appellees. |
| Court | Pennsylvania Supreme Court |
Henry E. Rea, Jr., Brandt, Milnes, Rea & Wise, Pittsburgh, for appellant.
Jon Hogue, Mollica, Murray & Hogue, Pittsburgh, for appellees.
Before NIX, C.J., and LARSEN, FLAHERTY, ZAPPALA, PAPADAKOS, CAPPY and MONTEMURO, JJ.
John A. Zitelli (Zitelli) appeals from an order of the Superior court vacating a decree of the Court of Common Pleas of Allegheny County which awarded Zitelli $1,226,292.00 from a deferred compensation plan. The issue involved in this appeal is whether the Superior Court erred in vacating the decree and finding that Zitelli was not entitled to any of the monies in a deferred compensation account. For the reasons set forth below, we reverse in part and affirm in part.
Zitelli is a physician and surgeon who specializes in Mohs Surgery. 1 He is one of a very limited number of physicians in the United States who specialize in this type of surgery. In 1980, Zitelli accepted a position at the University of Pittsburgh to join a newly formed Department of Dermatology within the University's School of Medicine and to teach Mohs surgery in the Medical School.
The dermatology department that Zitelli joined upon his arrival at the University was transformed into a clinical practice plan in 1981, and became known as the Dermatology Education and Research Foundation (DEAR). DEAR was incorporated as a non-profit corporation in 1981, and was one of a number of clinical practice plans in existence at the University. Clinical practice plans were developed by the University so that competitive salaries could be paid to University physicians, and so that the University could attract the highest qualified physicians. The practice plans were used as a method to supplement physician member income. Under the practice plans, all of the teaching physicians in a department would form a corporation to treat private patients. The income derived from the private patient practice would then be available both to supplement the overall income of the doctors in that specific practice plan, as well as to provide additional funds for educational and research projects with that Department.
As an employee of the University and DEAR, Zitelli's salary was subject to the guidelines and regulations of the University. The University's Guidelines provide that
Provided that the individual's obligations to the School are met, the salary of a member of the faculty may be supplemented with income from professional services; the amount shall not exceed an amount equal to the base, and the income from these professional services will also provide the fringe benefits that accrue to the supplemental salary. These provisions are to be approved by the Chairman and the Dean.
Thus, under the Guidelines, a physician could double his base salary with practice plan income.
Zitelli's first year salary at DEAR was $37,000. In addition to this base salary, Zitelli also received a supplement of $18,375 in his first year at DEAR. His University approved salary and supplement for his remaining years at DEAR was as follows:
Year Salary Supplement
1981"82 $ 60,000 $ 36,000
1982"83 70,000 58,500
1983"84 102,500 102,400
1984"85 109,675 109,674
1985"86 114,062 114,062
1986"87 143,520 143,520
His increase in salary over the years was largely due to the revenues he produced for DEAR. Because of the vast number of Mohs surgeries he performed, Zitelli was the major revenue contributor to DEAR.
As Zitelli's case load and resultant generation of income continued to increase, the possibility of developing a deferred compensation plan for Zitelli was discussed. The deferred compensation plan was intended to supplement Zitelli's income, and to entice him to remain as a member of the Medical School faculty.
Contributions to a deferred compensation plan for Zitelli were made in 1982-83, 1983-84, 1984-85, and 1985-86. The amount of contributions each year, respectively, were $30,000, $50,000, $80,000 and $650,000. For the years 1986-87, no contributions were made to the account, but, according to Zitelli, a $410,000 payment had been approved.
In 1987, largely because of disagreements surrounding the deferred compensation account, Zitelli left the employment of DEAR. After his departure, Zitelli filed this action in equity against DEAR and the University seeking to obtain the amounts deposited in the deferred compensation account, the $410,000 which he claimed should have been deposited in the account, and severance pay which he claims was agreed upon by the board of directors of DEAR. DEAR, contrarily, contends that Zitelli is not entitled to any of the deferred compensation contributions because the payments far exceed the University's guidelines for acceptable salaries. Any payments in excess of the guidelines require University approval, which DEAR claims was not received in the instant case. Additionally, DEAR claims that Zitelli abused his position as a member of DEAR in his attempt to assure himself of the contributions. Finally, DEAR filed a counterclaim seeking to recover damages as a result of Zitelli's creation of leases for equipment from Zitelli's children to DEAR, and as a result of Zitelli's lease of an automobile with DEAR funds.
The trial judge, after several days of testimony, decided that Zitelli was entitled to receive the value of his deferred compensation plan, and that a $400,000 withdrawal from the plan after Zitelli's departure from DEAR was unauthorized. 2 The trial court also determined that the $410,000 contribution for the years 1986-87 was not approved, and that, therefore, Zitelli was not entitled to it. The trial court denied Zitelli's claim for severance pay on the basis that there was never a valid agreement in that regard. Finally, the trial court denied DEAR's counterclaim based on its finding that DEAR did not present sufficient evidence in support thereof.
On appeal, the Superior Court vacated the decree of the chancellor and determined that Zitelli was not entitled to any of the money in the deferred compensation account, or the $410,000 contribution for the years 1986-87. 409 Pa.Super. 219, 597 A.2d 1173. The Superior Court also approved the $400,000 withdrawal from the plan, and ordered that the plan be dissolved and the funds be available for the use of the Medical School. The severance pay claim by Zitelli was also denied by the Superior Court. Finally, the Superior Court found for DEAR on its counterclaim, and awarded the amount attributable to the lease of equipment to DEAR from Zitelli, paid for by DEAR, to be reimbursed to DEAR, and awarded any expense attributable to the lease of Zitelli's car to be reimbursed to DEAR.
On March 11, 1992 Zitelli's Petition for Allowance of Appeal was granted by this court. Although both Zitelli and DEAR raise numerous issues in their Statements of Questions Involved, the main issue for us to decide can be simply stated as whether the Superior Court abused its discretion in vacating the decree of the trial court, and in ordering that the deferred compensation plan be dissolved and that the funds be made available for the use of the University.
Initially, we note that in a civil action in equity wherein the Chancellor has made findings of fact and conclusions of law, our power of review is limited. The findings of the Chancellor will not be reversed unless it appears that he has clearly abused his discretion or committed an error of law. Frowen v. Blank, 493 Pa. 137, 425 A.2d 412 (1981). Furthermore we have held that
Where credibility of witnesses is important to the determination, the Chancellor's findings are entitled to particular weight because of his opportunity to observe their demeanor. Where a reading of the record reasonably can be said to reflect the conclusions reached by the Chancellor, a reviewing court may not substitute its judgment for that of the Chancellor. A reviewing court, however, is not bound by findings which are without support in the record or have merely been derived from other facts. (citations omitted).
Id. 493 Pa. at 142, 425 A.2d at 415.
Instantly, the Chancellor made 101 findings of fact and 13 conclusions of law. He determined that the first two contributions to the deferred compensation account were adequately approved by the requisite people. He further concluded that the remaining contributions were approved by Dr. Eaglestein and Zitelli and were adequately disclosed to DEAR and the University. As such, the Chancellor concluded that DEAR and the University were equitably estopped from denying Zitelli the benefits of the plan.
On review, the Superior Court determined that certain of the Chancellor's conclusions of law were erroneous. Specifically, the Superior Court held that the Chancellor erroneously concluded that the procedure utilized to approve the deferred compensation plan was sufficient. The Superior Court found that since the idea of a deferred compensation "plan" was never officially approved by DEAR and the University of Pittsburgh, Zitelli was not entitled to any of the money in the plan. The Superior Court found that DEAR and the University approved the first two deferred compensation contributions for Zitelli, but nevertheless found that Zitelli was not entitled to the money because the "deferred compensation plan" itself was never officially approved. The remaining contributions to the account, according to the Superior Court, were never approved and therefore Zitelli was not entitled to them.
After a careful review of the voluminous record in this case, we conclude that the Superior Court was correct in denying Zitelli the contributions...
To continue reading
Request your trial
-
Ruth F. v. Robert B.
...an act differently than the manner in which another was induced by word or deed to expect." Zitelli v. Dermatology Education and Research Foundation, 534 Pa. 360, 370, 633 A.2d 134, 139 (1993). The doctrine has been widely invoked "to prevent the denial, repudiation or questioning of divisi......
-
Becker v. Bank of N.Y. Mellon Trust Co.
...(Pa. 1983)). Accord Kirleis v. Dickie, McCamey & Chilcote, P.C., 560 F.3d 156, 165 (3d Cir. 2009) (citing Zitelli v. Dermatology Educ. & Research Found., 633 A.2d 134, 139 (Pa. 1993)). Equitable estoppel"arises when a party 'intentionally or through culpable negligence induces another to be......
-
Stonehedge Square Ltd. Partnership v. Movie Merchants, Inc.
...from doing an act differently than the manner in which another was induced by word or deed to expect." Zitelli v. Dermatology Educ. & Res., 534 Pa. 360, 370, 633 A.2d 134, 139 (1993). It may be where the party asserting estoppel established by clear, precise and unequivocal evidence (1) tha......
-
Liberty Towers Philly, LP v. Am. Tower Corp., CIVIL ACTION NO. 18-CV-4357
...detriment." Kirleis v. Dickie, McCamey & Chilcote, P.C., 560 F.3d 156, 165 (3d Cir. 2009)(quoting Zitelli v. Dermatology Educ. & Research Foundation, 534 Pa. 360, 633 A.2d 134, 139 (Pa. 1993)). In this case, although Plaintiff does not specify which type of estoppel it is raising in Count I......