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.
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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).
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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.
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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.
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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
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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.
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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
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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).
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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.
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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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