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UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

____________

No. 10

- 4456

____________ In re: LEMINGTON HOME FOR THE AGED

OFFICIAL COMMITTEE OF UNSECURED CREDITORS, ON BEHALF OF TH E ESTATE OF LEMINGTON HOME

FOR THE AGED, Appellant

v. ARTHUR BALDWIN; LINDA COBB; JEROME BULLOCK; ANGELA FORD; JOANNE ANDIORIO; J.W. WALLACE; TWYLA JOHNSON; NICOLE GAINES; WILLIAM THO MPKINS; ROY PENNER; MELODY CAUSEY; JAMES SHEALEY; LEONARD R. DUNCAN; RENEE FRAZIER; CLAUDIA ALLEN; EUGENE DOWNING; GEORGE CALLOWAY; B. J. LEBER; REVEREND RONALD PETERS

___________
On Appeal from the United States District Court for t he Western District of Pennsylvania (D.C. Civil Action No. 2

- 10

- cv

- 00800 ) District Judge: Honorable Arthur J. Schwab

___________ Argued July 11, 20112 Before: SLOVITER

, FUENTES and VANASKIE,

Circuit Judges

.
( Opinion Filed Septem ber 21, 2011 )

Robert S. Bernstein, Esq. Kirk B. Burkley, Esq. Nicholas D. Krawec, Esq. Argued Krawec Bernstein Law Firm, PC 707 Grant Street Suite 2200, Gulf Tower Pittsburgh, PA 15219

- 0000 Counsel for Appellants

Mark R. Hamilton, Esq. Argued Phil ip J. Sbrolla, Esq. Cipriani & Werner 650 Washington Road Suite 700 Pittsburgh, PA 15228

Todd M. Raskin, Esq. Mazan ec, Raskin & Ryder 100 Franklin’ s Row 34305 Solon Road Cleveland, OH 44139 Counsel for Appellee Arthur Baldwin

Suzanne B. Merrick3 Th omas, Thomas & Hafer 301 Grant Street One Oxford Centre, Suite 1150 Pittsburgh, PA 15219

- 0000 Counsel for Appellee James Shealey

__________ _

O RDER AMENDING OPINION

___________
VANASKIE, Circuit Judge

. IT IS NOW ORDERED the above captioned case be amend ed as follows:

Footnote 5 shall now read:

The District Court erroneously held that the presumption of the business judgment rule is overcome only by evidence of gross negligence. The District Court cited a Delaware Supreme Court case which held that “ under the business judgment rule director liability is predicated upon concepts of gross negligence.” Aronson v. Lewis , 473 A.2d 805, 812 (Del. 1984) (overruled on other grounds). Pennsylvania, however, recognizes directors’ and officers’ liability for n egligent breach of fiduciary duty. See, e.g.

, Wolf v. Fried , 373 A.2d 734, 735 (Pa. 1977) (“[E]ven in the absence of fraud, self

dealing, or proof of personal profit or wanton acts of omission or commission, the directors of4 a corporation may be held pers onally liable where they have been imprudent, wasteful, careless and negligent and such actions have resulted in corporate losses.”)

. Of course, a

non

- profit corporation may restrict the circumstances under which a director may have personal liability for negligent acts by adoption of an appropriate by

- law, see 15 Pa. C.S. § 5713(a), in which event a director may be liable for a breach of fiduciary duties or a failure to perform the duties of the office only if “the breach or failure to perform constitutes self

dealing, willful misconduct or recklessness.” 15 Pa. C.S. § 5713(a)(2). While the Home adopted an appropriate by

- law, there is a genuine dispute of fact as to whether alleged breaches of fiduciary duties con stituted self

dealing. Moreover, there i s no comparable statutory limitation of liability for the officers of

a non

- profit corporation. Thus, a trial is required on the claims against Causey and Shealey on the question of whether they failed to exercise “such care, including reasonable inquiry, skill and diligence, as a person of ordinary prudence would use under similar circumstances.” 15 Pa. C.S. § 5712(c).

s / Thomas I. Vanaskie Circuit Judge DATED: October 20, 2011 P DB/cc: All Counsel of Record