Court Opinion

ID: 2814945
Source: CourtListenerOpinion
Date Created: 2015-07-07 19:12:23.009343+00
Date Added: 2024-06-11T12:39:52.474392
License: Public Domain

J-E04001-14

                              2015 PA Super 146

SELECTIVE WAY INSURANCE COMPANY                 IN THE SUPERIOR COURT OF
                                                      PENNSYLVANIA
                         Appellant

                    v.

HOSPITALITY GROUP SERVICES, INC.;
HOSPITALITY GROUP SERVICES, INC.,
T/D/B/A RAMADA INN; HOSPITALITY
GROUP SERVICES, INC. T/D/B/A
RAMADA OF LIGONIER; AND
HOSPITALITY GROUP SERVICES, INC.
T/D/B/A/ RAMADA OF HISTORIC
LIGONIER; ROGER N. ALMS; ROSE M.
ALMS AND TERRI NEMCHECK,
INDIVIDUALLY AND AS
ADMINISTRATRIX OF THE ESTATE OF
SEAN M. NEMCHECK, DECEASED

                         Appellee                     No. 1430 WDA 2013

                  Appeal from the Order August 8, 2013
          In the Court of Common Pleas of Westmoreland County
                   Civil Division at No(s): 3543 OF 2012

BEFORE: GANTMAN, P.J., FORD ELLIOTT, P.J.E., BENDER, P.J.E.,
        PANELLA, J., DONOHUE, J., SHOGAN, J., MUNDY, J., OLSON, J.,
        and OTT, J.

DISSENTING OPINION BY MUNDY, J.:                       FILED JULY 07, 2015

      I conclude the instant appeal is moot and not subject to an exception

to our rule that “courts generally will not decide a moot case because the

law requires the existence of an actual controversy.” Assoc. of Pa. State

Coll. and Univ. Faculties v. Pa. Labor Relations Bd., 8 A.3d 300,

305 (Pa. 2010). I, therefore, respectfully dissent.
J-E04001-14

       On March 18, 2014, during the pendency of this appeal, Appellees,

Hospitality Group Services, Inc. and related parties (Hospitality Group), filed

a bad faith claim against Appellant, Selective Way Insurance Co. (Selective).

Subsequently, the parties settled the underlying liability action brought by

Appellee, Terri Nemcheck, Executrix, and entered a praecipe to settle and

discontinue on July 17, 2014. Selective’s declaratory judgment action, and

the instant appeal based thereon, therefore, was rendered moot.

              [Insurer] effectively acquiesced to [declaratory
              judgment] decrees with regard to [insured
              defendants] by virtue of its execution of the non-
              waiver agreement and eventual settlement with the
              plaintiffs. Therefore, no effect could be given to our
              resolution of [Insurer’s appeal from the declaratory
              judgments] if we were to render one and it is moot.

Erie Ins. Exch. v. Claypoole, 673 A.2d 348, 354 (Pa. Super. 1996).

       The Majority recognizes the consequential mootness of this appeal but

concludes that an exception to the mootness doctrine applies.1 The Majority

cites our precedent identifying three exceptions.

              Appellate courts in this Commonwealth have
              recognized three exceptions, permitting decision on
              an issue despite its mootness: “1) the case involves
              a question of great public importance, 2) the
              question presented is capable of repetition and apt to
              elude appellate review, or 3) a party to the
              controversy will suffer some detriment due to the
              decision of the trial court.” In re D.A., 801 A.2d
              614, 616 (Pa. Super. 2002) (en banc) (citations
              omitted).
____________________________________________
1
  President Judge Emeritus Ford-Elliott, in her dissenting opinion, does not
address the mootness issue.

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Majority Slip Opinion at 7-8.2            The Majority concludes that the third

exception applies in this case, as Selective could be collaterally estopped

from challenging the trial court’s statute of limitations ruling, rendered in its

declaratory judgment action, in Hospitality Group’s pending bad faith case.

____________________________________________
2
  I acknowledge that Our Court has consistently listed the cited exceptions
as three distinct bases to review a mooted claim. See e.g. Orfield v.
Weidndel, 52 A.3d 275, 278 (Pa. Super. 2012), In Re D.A., supra. I
believe our listing of the third exception as an independent basis for review
is at variance with our Supreme Court’s articulation of the available
exceptions to the mootness doctrine. Rather, our Supreme Court articulates
two exceptions, treating the existence of some detriment suffered by a party
as an additional aspect of the class of exceptions where an issue is likely to
recur but escape review.

              This Court has repeatedly recognized two exceptions
              to the mootness doctrine: (1) for matters of great
              public importance and (2) for matters capable of
              repetition, which are likely to elude review. See
              Rendell v. State Ethics Com'n, 603 Pa. 292, 983
              A.2d 708, 719 (2009). Moreover, we have found
              this exception applicable where a case involves an
              issue that is important to the public interest or
              where a party will suffer some detriment
              without a court decision.         Com., Dept. of
              Environmental Protection [v. Cromwell Twp.,
              Huntingdon, Cnty], 32 A.3d [639,] 651–652 [(Pa.
              2011)].

Pilchesky v. Lackawanna Cnty, 88 A.3d 954, 964-965 (Pa. 2014)
(emphasis added). Accordingly, the fact that a party may suffer some
detriment is relevant only where the issue is first deemed capable of
repetition and likely to evade review. To hold otherwise, in my view risks
creating an exception that could subsume the rule. Nevertheless, regardless
of which articulation of the exception we employ, I conclude, for the reasons
noted infra, that its application in this case is unwarranted.

                                           -3-
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Id. at 12. The Majority concludes this is sufficient detriment to trigger the

exception. Id. at 12-13.

              Initially, we note that case law discussing the third
              exception to the mootness doctrine expressly
              requires only that a party “will suffer some detriment
              due to the trial court’s decision,” which can be
              “collateral legal consequences of the court order.”
              In re L.Z., 91 A.3d 208, 212 (Pa. Super. 2014) (en
              banc) [], appeal granted on other grounds, 96 A.3d
              989 (Pa. 2014).

Id. at 10 (emphasis by Majority omitted, current emphasis added).

       Instantly, Selective will not suffer detriment from the trial court’s

decision so much as from its own election to settle the Nemcheck Action. As

noted by Nemcheck, “the issue will elude appellate review in this case only

because Selective has chosen to moot the issue.” Nemcheck’s Supplemental

Brief on the Issue of Mootness at 1-2. As a sophisticated party, Selective

was well aware of the collateral implications of its decision to settle. 3

Further, the settlement agreement is not before us, and we have no way of

evaluating the terms of the agreement or how such collateral implications

were weighed by the respective parties in their decision to settle on those

terms. It was well within the rights and capabilities of the parties, as part of
____________________________________________
3
  As noted by the Majority, Hospitality Group’s bad-faith complaint, the
settlement agreement, and parties’ correspondence is not part of the
certified record in this case. Majority Slip Opinion at 8, n.3. In its brief,
Selective acknowledges its counsel discussed the collateral impact of the
settlement on the bad faith claim with Hospitality Group’s counsel,
demonstrating it was well aware of the ramifications of the settlement it
voluntarily entered. Selective’s Supplemental Brief on the Issue of Mootness
at 11.

                                           -4-
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the settlement, to waive the collateral estoppel effect of issues in the

declaratory judgment case. They could have agreed to reserve Selective’s

right to litigate the statute of limitations issue in Hospitality Group’s

collateral bad faith case but chose not to do so.          Whether applicable as a

defense, or offensively to preclude a defense,4 the doctrine of collateral

estoppel can be waived if not asserted.           See Pa.R.C.P. 1030, 1032.    “Res

judicata and collateral estoppel are affirmative defenses which must be

pleaded in an answer as new matter.              Pa.R.C.P. 1030.   A defense not so

raised is waived. Pa.R.C.P. 1032.” Hopewell Estates, Inc. v. Kent, 646

A.2d 1192, 1194 (Pa. Super. 1994).

       The Majority’s decision to invoke an exception to the mootness

doctrine on these facts allows Selective to “have its cake and eat it too.”

The decision to review the moot issue essentially changes the terms of the

settlement agreement relative to its effect on collateral matters and the

____________________________________________
4
              “Under the doctrine of collateral estoppel, … the
              second action is upon a different cause of action and
              the judgment in the prior suit precludes relitigation
              of issues actually litigated and necessary to the
              outcome of the first action. … [A] litigant … may …
              use collateral estoppel offensively in a new suit
              against the party who lost on the decided issue in
              the initial case.”

In re Stevenson, 40 A.3d 1212, 1222 (Pa. 2012) (internal quotation
marks, citations, and footnote omitted). “A judgment is deemed final for
purposes of … collateral estoppel unless or until it is reversed on appeal.”
Shaffer v. Smith, 673 A.2d 872, 874-875 (Pa. 1996) (citations omitted).

                                           -5-
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need for the respective parties to expend additional resources in proceeding

with this appeal.      I conclude, under the facts of this case and Selective’s

voluntary acquiescence in its current position, that no exception to our

prohibition against deciding moot issues applies.      See Easton Theatres,

Inc. v. Wells Fargo Land and Mortg. Co., 449 A.2d 1372, 1373 (Pa.

1982) (holding willful inaction by party to maintain the status quo pending

appeal, precludes party from invoking exception to subsequent mootness of

appeal); Consolidation Coal Co. v. Dist. 5, United Mine Workers of

America, 485 A.2d 1118, 1124 (Pa. Super. 1984) (holding, “[w]hen a party

attempts to bring a claim arising out of a cause of action that was previously

settled, that claim is merged in the previous agreement of settlement”)

(citation omitted); Weney v. W.C.A.B (Mac Sprinkler Systems, Inc.),

960 A.2d 949, 954-955 (Pa. Cmwlth. 2008) (applying res judicata, where

claimant in workers’ compensation case entered into stipulation to add an

injury to original review hearing, to bar subsequent claim and review hearing

for an additional injury that could have been included in the stipulation),

appeal denied, 971 A.2d 494 (Pa. 2009).5

       For these reasons, I would dismiss the instant appeal as moot.

____________________________________________
5
  Although Commonwealth Court opinions do not bind this Court, we may
consult them for their persuasive value. Petow v. Warehime, 996 A.2d
1083, 1088 n.1 (Pa. Super. 2010), appeal denied, 12 A.3d 371 (Pa. 2010).

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