J-A06016-15


NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

DENNIS MILSTEIN                                     IN THE SUPERIOR COURT OF
                                                          PENNSYLVANIA
                          Appellee

                     v.

THE TOWER AT OAK HILL
CONDOMINIUM ASSOCIATION AND
LOWER MERION TOWNSHIP

APPEAL OF: THE TOWER AT OAK HILL
CONDOMINIUM ASSOCIATION

                                                         No. 1355 EDA 2014


                 Appeal from the Order Entered March 26, 2014
             In the Court of Common Pleas of Montgomery County
                       Civil Division at No(s): 2004-27339
-------------------------------------------------------------------------------------

LOWER MERION TOWNSHIP AND                           IN THE SUPERIOR COURT OF
DENNIS MILSTEIN                                           PENNSYLVANIA



                     v.

THE TOWER AT OAK HILL
CONDOMINIUM ASSOCIATION

                          Appellant                      No. 1356 EDA 2014


                Appeal from the Order Entered March 26, 2014
            In the Court of Common Pleas of Montgomery County
                     Civil Division at No(s): 2013-13285


BEFORE: PANELLA, J., OTT, J., and JENKINS, J.

MEMORANDUM BY OTT, J.:                                     FILED JUNE 18, 2015
J-A06016-15



     In this consolidated appeal, The Tower at Oak Hill Condominium

Association (“Tower”) challenges the order entered on March 26, 2014, in

the Court of Common Pleas of Montgomery County, that (1) denied Tower’s

motion to strike the discontinuance, without prejudice, of Count I of Dennis

Milstein’s Fourth Amended Complaint, filed at Docket No. 2004-27339

(“Milstein action”), and (2) denied Tower’s motion to stay or dismiss the

action instituted by Lower Merion Township (“Township”), filed at Docket No.

2013-13285 (“Township action”). Based upon the following, we affirm the

portion of the order that denied Tower’s motion to strike discontinuance, and

we quash the appeal as to the portion of the order that denied Tower’s

request for a stay of the Township action.

     Briefly, the underlying case involves lengthy litigation over water

runoff onto Milstein’s property. Milstein’s action sought actual damages and

injunctive relief against Tower, and actual damages against the Township.

Zurich American Insurance Company (Zurich), Tower’s insurer, responded to

the Milstein action. Tower maintains that the discontinuance without

prejudice of Count I of the Fourth Amended Complaint in the Milstein action

— an equity claim for injunctive relief — resulted in prejudice to Tower that

requires the trial court to strike the discontinuance.   Specifically, Tower

claims the discontinuance caused the loss of its insured defense by Zurich

and the services of its Zurich-appointed attorney, Lisa Bellino Apelian,

Esquire, and allowed Milstein the opportunity to intervene in the Township



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action and file another equity claim for injunctive relief outside the Zurich

policy. On appeal, Tower claims the trial court abused its discretion by (1)

“finding that a non-party, [Zurich], ‘would not defend the Tower for Count I

of   the   Fourth     Amended       Complaint,’”   (2)   “refusing   to   strike   the

discontinuance of Count I of the Fourth Amended Complaint in the Milstein

action,” (3) “ruling that Tower had the ‘burden’ of establishing that a non-

party, Zurich, was legally obligated to provide a defense and indemnity for

equity claims against the Tower as a prerequisite to a striking of the

Discontinuance,” and (4) “refusing to enjoin the Township action.”1 Tower’s

Brief at 4-5.

       The trial court succinctly summarized the background of this case as

follows:

             In 2004, property owner Dennis Milstein initiated suit
       against the Tower at Oak Hill Condominium Association and
       Lower Merion Township, docketed at No. 2004-27339 (the
       “Milstein Action”). In his Fourth Amended Complaint, Milstein
       alleged that his residence had been damaged as a result of
       floods and mudslides caused by inadequacies in the water
       drainage system of the neighboring Tower at Oak Hill
       Condominium Association (the “Tower”), which is situated at the
       top of a hill on which Milstein’s residence occupies the lower
____________________________________________


1
  Tower timely complied with the order of the trial court to file a Pa.R.A.P.
1925(b) statement. We further note some issues Tower raised in this appeal
are in direct response to the trial court’s Rule 1925(a) opinion, and are
properly before this Court. See Commonwealth v. Poncala, 915 A.2d 97,
98 (Pa. Super. 2006) (holding appellant will not be penalized for failure to
include in the Pa.R.A.P. 1925(b) statement an issue that could not be known
until court filed its Rule 1925(a) opinion).



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     slope. Milstein filed six counts against the Tower, one in equity
     and five in law. In addition, Milstein filed six counts against
     Lower Merion Township, alleging that the Tower’s storm drainage
     network was connected to piping that received water from an
     inlet owned by the Township, and that the water collected on the
     inlet passed through Tower’s drainage network and thus
     contributed to the damage to Milstein’s property.

           At the time of the Milstein Action, the Tower had a general
     commercial liability insurance policy with Zurich American
     Insurance Company. As such, Zurich provided legal counsel to
     the Tower to defend the claims against it that were at law, i.e.,
     Counts II through VI. However, Zurich notified the Tower via
     multiple reservations of rights letters that it would not defend
     the Tower for Count I of the Fourth Amended Complaint since
     the applicable insurance policy did not cover claims in equity. As
     such, the Tower obtained counsel Robert Mulhern to represent it
     specifically for the equity action.

           On May 31, 2013, Lower Merion Township filed a separate
     action against the Tower by way of a complaint docketed at
     No. 2013-13285 (the “Township Action”), alleging therein that
     the Tower violated the Deed of Easement that they executed
     with the Association’s predecessors in title. Specifically, the
     Township alleges that the Tower refused, despite repeated
     demands, to repair piping utilized by the Township for storm
     water runoff within its easement on the Tower’s property. The
     piping, alleges the Township, is in a dangerous condition, posing
     a risk of injury to nearby persons, in addition to soil erosion and
     damage to nearby Mill Creek Park. As such, the Township
     requests a mandatory injunction requiring the Tower to make all
     necessary repairs to the piping.

           The 2004 Milstein Action was litigated thoroughly for years
     and settlements between the parties were reached. Milstein
     settled all counts against the Township, and also settled for
     $225,000 the five counts of his complaint that were for
     monetary damages against the Tower. In addition, Milstein
     discontinued the remaining count against the Tower, which was
     the count in equity, Count I. Thereafter, the Tower filed a
     motion to strike the discontinuance of Count I of the Milstein
     Action and to schedule that matter for trial immediately. The
     Tower also requested that the Township Action be dismissed or
     stayed.

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            Thereafter, Milstein filed a petition to intervene in the
      Township Action. In its proposed complaint and motions, Milstein
      sought (1) a mandatory injunction requiring the Tower to make
      and have all necessary repairs to and replace all broken pipes in
      the Tower Water System, within thirty days of the court’s order;
      (2) an injunction restraining and enjoining the Tower from
      further flooding Milstein’s property with water from the Tower;
      and (3) an award of attorney fees and costs; (4) an award of
      punitive damages; and (5) such other relief against Tower that
      the court deems proper.

      Oral argument on both Milstein’s petition to intervene and the
      Tower’s motion to compel depositions and documents was held
      on February 11, 2014. This court later granted Milstein’s petition
      to intervene in the Township Action and denied the Tower’s
      motion to compel.

      Thereafter, on March 10, 2014, this court held a hearing on the
      Tower’s motion to strike the discontinuance and stay Civil Action
      2013-13285, the Township Action, which this court later denied
      by order dated March 26, 2014. …

Trial Court Opinion – Milstein Action [Docket No. 2004-27339], 6/30/2014,

at 1–3; Trial Court Opinion – Township Action [Docket No. 2004-27339],

6/30/2014, at 1–3.

      Tower’s first three issues challenge the trial court’s denial of Tower’s

motion to strike the discontinuance of Count I of Milstein’s Fourth Amended

Complaint, and we address them together.

      Pennsylvania Rule of Civil Procedure 229(c) states, in relevant part:

“The court … may strike off a discontinuance in order to protect the rights of

any party from unreasonable inconvenience, vexation, harassment, expense,

or prejudice.”   Pa.R.C.P. 229(c). The standard of review is abuse of




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J-A06016-15



discretion. Fancsali v. University Health Center, 761 A.2d 1159, 1162

(Pa. 2000). In this regard, we note:

       When the trial court reaches a conclusion calling for the exercise
       of its discretion, the party complaining on appeal has a heavy
       burden. It is not sufficient to persuade the appellate court that
       it might have reached a different conclusion under the same
       factual situation. “An abuse of discretion is not merely an error
       of judgment, but if in reaching a conclusion the law is overridden
       or misapplied, or the judgment exercised is manifestly
       unreasonable, or the result of partiality, prejudice, bias or ill-will,
       as shown by the evidence or the record, discretion is abused.”

Id. at 1162 (citations omitted) (emphasis added).

       Initially, Tower contests the trial court’s finding “that Zurich would not

defend Tower for Count I of the Fourth Amended Complaint.” 2 Tower’s Brief

at 31. Tower continues:

       To the contrary, at all times material, (1) Zurich represented
       that it would provide an insured defense for all of the claims in
       the Milstein Action, including the Injunction Claim in Count I of
       the Fourth Amended Complaint, and (2) Zurich in fact provided
       the insured defense throughout the Milstein action, as Attorney
       Apelian at all times represented Tower in the Milstein Action as
       to all claims, including the Count I Injunction Claim.

Id. at 31–32. Tower also challenges the trial court’s finding that Tower had

the “burden” to establish that Zurich would have indemnified Tower in the




____________________________________________


2
  Trial Court Opinion – Milstein Action [Docket No. 2004-27339], 6/30/2014,
at 2; Trial Court Opinion – Township Action [Docket No. 2004-27339],
6/30/2014, at 2.




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J-A06016-15



event that an injunction was issued in the Milstein action. Tower’s Brief at

48. In this regard, the trial court wrote:

      The Tower argues, without supporting legal authority, that
      Zurich American Insurance Company, the general liability
      insurance company for the Tower, is legally obligated to provide
      a defense and indemnity for equity claims against the Tower.
      But because the Tower is not able to sustain its burden of proof
      that it was entitled to insurance coverage, its petition to strike
      the discontinuance should be denied.

Trial Court Opinion – Milstein Action [Docket No. 2004-27339], 6/30/2014,

at 4–5 (footnote omitted); Trial Court Opinion – Township Action [Docket

No. 2004-27339], 6/30/2014, at 4–5. Tower maintains the issue of whether

Zurich had a duty to indemnify Tower in the event that Milstein was

successful in obtaining relief on the Count I injunction claim was not ripe,

and would have been determined in a post-judgment action between Tower

and Zurich. See Tower’s Brief, at 49.

      In 2004, when Tower was served with Milstein’s suit, Tower made an

insurance claim against its insurer, Zurich. Zurich responded to the claim on

October 26, 2004, stating, in pertinent part:

      Zurich American Insurance Company and the attorney assigned
      to represent The Tower at Oak Hill Condominium Association will
      fully defend the complaint under this policy. However, the
      Petition for Mandatory Injunction does not make any claim for
      “property damage”, “bodily injury”, “personal injury” or
      “advertising injury”. Therefore, it does not meet the definition of
      “suit” in the policy and we cannot respond to that portion of this
      action. It is our understanding that the association’s attorney
      Robert M. Mulhern will respond to that portion of the action, at
      your cost.



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       On reviewing the Complaint, you will note in Count One the
       plaintiff makes a claim in equity which states a claim for
       injunctive relief, already addressed in the Petition. The policy
       does not apply to this count and Mr. Mulhern will handle this
       portion of the complaint, at your cost.

                                           ****

       Based upon the above listed insuring agreement, exclusions, and
       definitions, it is the position of Zurich American Insurance
       Company that this policy does not apply to the allegations
       presented in the Petition for Mandatory Injunction, or in Count
       One or Count V of the complaint. Zurich American Insurance
       Company will not pay any award, verdict, or judgment entered
       against The Tower at Oak Hill Condominium Association based
       on the Petition for Mandatory Injunction or Count One of the
       complaint. Consequently, The Tower at Oak Hill Condominium
       Association could become required to satisfy any such verdict.
       We will, however, continue to defend and indemnify based on
       the allegations in Counts 2, 3 and 4 of the complaint.

       Therefore, you have chosen to retain your own attorney, Robert
       M. Mulhern, at your own expense, to advise you and to protect
       your interests not covered by this policy. Zurich American
       Insurance Company and the attorney designated to represent
       you will cooperate with that counsel.

Letter from Zurich to Tower, 10/26/2004, at 5–6.     Zurich sent three more

similar letters, on February 1, 2011,3 January 22, 2013,4 and June 3, 2013.



____________________________________________


3
 The February, 2011 letter is dated “February 11, 2011” on the first page
and includes a header on the succeeding pages with the date “February 1,
2012.”
4
  The January, 2013 letter is dated “January 22, 2013” on the first page and
includes a header on the succeeding pages with the date “January 23,
2013.”




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J-A06016-15



The letters contained nearly identical language and reiterated Zurich’s

position.

       In each letter, Zurich disclaimed coverage for Count I of Milstein’s

Fourth Amended Complaint on the grounds that the policy did not cover

claims in equity for injunctive relief. Furthermore, Zurich’s letters confirmed

that Tower had retained Robert Mulhern, Esquire, “at your own expense, to

advise you and to protect your interests not covered by this policy.” Letters

from Zurich to Tower, 10/26/2004, at 6; 2/1/2011, at 6; 6/3/2013, at 7;

see also Letter from Zurich to Tower, 1/22/2013/, at 7. Therefore, contrary

to Tower’s assertions, the Zurich correspondence does not state it will

defend      Tower   against    all   claims    raised   by   Milstein.   Rather,   the

correspondence states it will defend against only those claims that fit

coverage definitions. The correspondence acknowledges Tower has retained

its own counsel to represent its interests regarding the equitable claims.

       Tower contends that “over nine years of litigation, only [Lisa Bellino]

Apelian actively litigated the Count I Injunction Claim on Tower’s behalf,”5

and that “Mulhern, who is a transactional condominium lawyer, never took

any such action.” Tower’s Brief at 33. However, while Tower downplays the

role of its counsel, the certified record reflects that Mulhern or another
____________________________________________


5
 On November 12, 2004, Apelian entered her appearance for Tower in the
Milstein action.




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member of Steven L. Sugarman & Associates was involved to represent

Tower during the course of the Milstein action.6

       In addition to Zurich expressly disclaiming coverage under the policy

for Count I of Milstein’s Fourth Amended Complaint, and Tower retaining its

own counsel for the equity claim in Count I, any obligation Zurich had to

defend Tower from the equity claims ended when Milstein’s legal claims were

settled.    See Erie Insurance Exchange v. Transamerica Insurance

Company, 533 A.2d 1363, 1368 (Pa. 1968) (“If the complaint filed against

the insured avers facts which would support a recovery that is covered by

the policy, it is the duty of the insurer to defend until such time as the claim

is confined to a recovery the policy does not cover.”).

       In sum, we find Tower’s claim that the discontinuance caused the loss

of its insured defense on the equity claim in Count I is belied by Zurich’s
____________________________________________


6
  On November 4, 2004, prior to Zurich’s appointment of Apelian, Scott R.
Reidenbach of the Sugarman law firm argued against Milstein’s first Motion
for Injunctive Relief, filing an Answer with New Matter in response to the
Injunction Motion, a memorandum of law, and appearing in the trial court on
the Motion. See N.T., 11/4/2004.

     Kevin Kelly of the Sugarman firm appeared with Lisa Bellino Apelian at
the November 3, 2011 mandatory injunction hearing. See N.T., 11/3/2011.
We note the court instructed that one attorney was to participate, id. at 27,
and Apelian litigated the motion, with Kelly present.

       Steven Sugarman and Mulhern were present on June 3, 2013 via
conference call when the Settlement Agreement was placed on the record in
the trial court. See N.T., 6/3/2013.




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J-A06016-15



correspondence, which never promised representation or indemnity on

anything but the legal claims set forth against Tower in the Milstein action.

Tower cannot have lost its insured defense for Count I of the Milstein action

where Tower never had representation provided by Zurich for the equity

claim in Count I. Furthermore, Tower accepted Zurich’s position, and had its

own counsel for representation at various hearings where injunctive relief

was at issue.   Finally, when the legal claims settled, Zurich no longer had

any obligation to represent Tower on Count I of the Milstein action.

Accordingly, we conclude the record supports the trial court’s findings that

Zurich “would not defend the Tower for Count I of the Fourth Amended

Complaint” and that Tower was not “able to sustain its burden of proof that

it was entitled to insurance coverage.”

      Next, we address Tower’s contention that the trial court abused its

discretion in refusing to strike the discontinuance of Count I of the Milstein

action. Specifically, Tower asserts the trial court should have considered:

      … Tower was subject to an unjust disadvantage because it lost
      its insured defense, and its Zurich-appointed attorney Apelian
      who represented Tower for the previous nine years, due to the
      Discontinuance (which resulted in there being no “suit” pending),
      such that when the same claims were re-filed in a later-filed
      action, Tower was without its attorney and its insured defense,
      causing the Discontinuance to be inherently prejudicial to
      Tower’s ability to mount a defense. On this basis alone, the Trial
      Court abused its discretion in refusing to strike the
      Discontinuance. Beyond that issue, in refusing to strike the
      Discontinuance, the trial court refused to consider, inter alia, the
      following relevant factors that must be considered under a Rule
      229(c) analysis:


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J-A06016-15



         The nine (9) year period during which the Milstein action was
          pending;

         The significant time and expense spent litigating the Milstein
          Action, the significant discovery that was taken in that action,
          and the significant motion practice in that action;

         The fact that the Township Action was filed to avoid the effect
          of a dispositive ruling in the Milstein Action that Milstein was
          not entitled to a permanent injunction;

         The “real world” consequences to Tower of the loss of an
          insured defense and the attorney (Apelian) who had litigated
          all aspects of the Milstein action, including the Injunction
          Claim, for the past nine years; and;

         The loss of a substantial right of Tower, in that the
          Discontinuance denied Tower the ability to make a claim for
          insurance coverage in the event Milstein was successful in
          obtaining an injunction under Court I.

Tower’s Brief, at 34–35.7

       In reviewing this claim, we are mindful that “[t]he causes which will

move the court to withdraw its assumed leave and set aside the

discontinuance … usually involve some unjust disadvantage to the defendant

or some other interested party[.]” Fancsali, supra, 761 A.2d at 1162.

       Moreover, we note:

       To determine whether opposing parties are in fact prejudiced by
       a discontinuance, our courts have considered, inter alia, the
       length of time for which the case has been pending, the effort
       and expense those parties have incurred in discovery, and the

____________________________________________


7
  We note the trial court was fully aware of Tower’s position and all relevant
considerations, which Tower presented during oral argument on the motion
to strike the discontinuance. See N.T., 3/10/2014.



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       disadvantage imposed by the passage of additional time on the
       parties’ ability to litigate the claim.

Marra v. Smithkline Beecham Corp., 789 A.2d 704, 706–707 (Pa. Super.

2001), appeal denied, 815 A.2d 1042 (Pa. 2003) (quotations and case

citations omitted). If the passage of additional time does not disadvantage a

party, and the labor in the discontinued litigation is applicable to a

substantially similar new suit, the parties will not suffer prejudice. See id.

at 707.

       Here, Tower’s claim of prejudice in the loss of its insured defense must

be analyzed in light of whether Tower had an insured defense for the

equitable claim in Count I of the Milstein action. While Tower may have had

an expectation of an insured defense for Court I, as discussed, Zurich made

no promise to Tower on anything but the legal claims and had no duty to

Tower after the legal claims against Tower were settled. Tower did not lose

what it did not have in the first place.           Further, although Tower argues

prejudice in that it lost a potential claim for insurance coverage in the event

Milstein was successful in obtaining an injunction, Tower accepted Zurich’s

position that the insurance coverage under the policy did not extend to the

equity claim in Count I of the Milstein action and had its own counsel

involved throughout the Milstein action for the equity claims.8

____________________________________________


8
  Milstein notes in his brief that in May, 2013, shortly before Milstein filed the
voluntary discontinuance on June 13, 2013, Tower filed a declaratory
judgment action:       Tower at Oak Hill Condominium Association v.
(Footnote Continued Next Page)


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      With regard to the bullet items listed by Tower, there is no claim that

discovery from the Milstein action cannot be applied to the Township action.

Furthermore, Tower has asserted the “dispositive ruling” regarding Milstein’s

2011 request for injunctive relief as a defense in preliminary objections to

Milstein’s complaint filed in the Township action. Accordingly, based on our

careful review, we detect no abuse of discretion in the trial court’s conclusion

that Tower would not be prejudiced by the discontinuance.

      Lastly, Tower argues the trial court abused its discretion in refusing to

stay or enjoin the Township action based on lis pendens.          However, we

conclude this aspect of the appeal must be quashed.9

      Precedent establishes that orders granting or denying a motion for

stay are non-appealable interlocutory orders. Commonwealth v. Morris,

771 A.2d 721, 728–729 (Pa. 2001); Farmers First Bank v. Wagner, 687

A.2d 390, 391–392 (Pa. Super. 1997); Richardson Brands, Inc. v.

Pennsylvania Dutch Co., 592 A.2d 77, 80 (Pa. Super. 1991); Grimme

                       _______________________
(Footnote Continued)

Zurich American Insurance Company, C.C.P. Philadelphia, May Term
2013, No. 12983). See Milstein’s Brief at 31.
9
  In this case, this Court issued rule to show cause orders as to why the
appeal should not be quashed because it involves a request for a stay, or
transferred to the Commonwealth Court because it involves the Township of
Lower Merion. See Order, 1355 EDA 2014, 5/27/2014; Order, 1356 EDA
2014, 5/21/2014. Tower responded to the orders, and this Court discharged
the rule to show cause orders. However, this Court advised the parties that
“the issue may be revisited by the panel to be assigned to this case.” Order,
1355 EDA 2014, 7/8/2014; Order, 1356 EDA 2014, 7/8/2014.



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Combustion, Inc. v. Mergentime Corp., 560 A.2d 793, 794 (Pa. Super.

1989).   Therefore, we quash Tower’s appeal from the portion of the trial

court’s order refusing to stay the Township action.

      Based on the foregoing, we affirm that portion of the trial court’s order

that denied Tower’s motion to strike the discontinuance.              We quash the

appeal from that portion of the trial court’s order that refused to stay the

Township action.

      Order   affirmed    as   to   the    denial   of   Tower’s   motion   to   strike

discontinuance; appeal quashed as to the denial of Tower’s request for a

stay of the Township action.

Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 6/18/2015




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