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23 ELR 20119 | Environmental Law Reporter | copyright © 1993 | All rights reserved Fallowfield Development Corp. v. StrunkNos. 89-8644; 90-4431 (E.D. Pa. April 7, 1992)The court holds that landowners' summary judgment motions in response to residential developers' actions pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), the Resource Conservation and Recovery Act (RCRA), the Pennsylvania Hazardous Substances Control Act (HSCA), and common law theories, are precluded by the existence of a genuine issue of material fact as to whether hazardous waste has been removed from the property. The court also denies a counterclaim alleging that the developers' actions were the proximate cause of the landowners' injuries, since causation must be determined by the jury. The developers alleged that the landowners withheld information about the presence of hazardous waste on the property when they sold the land to the developers. The court first holds that the landowners did not meet their burden of proving the absence of a continuing violation and, thus, a genuine issue of material fact exists as to whether hazardous waste remains on the property. The court rejects the landowners' request for summary judgment on the developers' attorneys fees claim under the HSCA, because the Act's relevant language applies to continuing violations; a condition which is still at issue. The court also denies summary judgment on the strict liability claim and holds that the credibility of the parties' expert witnesses must be assessed by the jury. The court, differentiating between recission based on misrepresentation and recission based on the mutual intent of the parties, holds that cases in the former category are equitable and allow the court flexibility in determining the proper form of relief. Since recission based on misrepresentation is at issue, the court denies defendants' request for summary judgment. The court also holds that the developers' claim for punitive damages survives a summary judgment attack, because punitive damages are recoverable in an action for fraud. Finally, the court holds that whether plaintiffs' actions were the proximate cause of defendants' injuries must be decided by a jury. [A previous decision in this litigation is published at 21 ELR 21404.] Counsel for Plaintiffs Counsel for Defendants Hutton, J.; Plaintiffs, Fallowfield Development Corp. and E. J. Callaghan and Co., Inc. (respectively "Fallowfield" and "Callaghan"), brought this action pursuant to the Comprehensive Environmental Response Compensation Act of 1976 ("CERCLA"), 42 U.S.C. § 9601(14), the Resource Conservation and Recovery Act of 1976 ("RCRA") as amended by the Solid Waste Disposal Act Amendments of 1980, 42 U.S.C. §§ 6901-6992k, the Pennsylvania Hazardous Substances Control Act ("HSCA"), Pa.C.S.A. tit. 35, § 6020.103 (Purdon's Supp. 1990) and various common law theories. The defendants, Leonard M. Strunk and Betty R. Strunk (the "Strunks"), brought a counterclaim against Fallowfield and Callaghan alleging, inter alia, conspiracy to wrongfully dishonor a letter of credit issued by Bryn Mawr Trust Company (the "Bank"). Presently before this Court are the Strunks' Motion for Partial Summary Judgment on Counts III, V, VII, and XI of the Second Amended Complaint; Fallowfield and Callaghan's Motion for Partial Summary Judgment on the Counterclaim; and the Bank's Motion for Summary Judgment on the Complaint in the third-party action. For the following reasons, the Strunks, Fallowfield and Callaghan and the Bank's respective motions will be DENIED. The Strunks owned a tract of land of approximately 314 acres located in Chester County, Pennsylvania (the "Property") from 1943 until 1988. During that time, Leonard Strunk, an entrepreneur/inventor, conducted scientific experiments and research and development activities in a laboratory he maintained on the Property. He also operated a chainsaw manufacturing business on the Property. On December 11, 1987, Fallowfield and Callaghan entered into an Agreement of Sale (the "Agreement") with the Strunks to purchase the Property. Fallowfield and Callaghan intended to use the land for residential development. The Agreement contained the following representation: (a) the property has never been used as a sanitary landfill site or a hazardous waste disposal site and the property is free of hazardous, toxic or carcinogenic substances or other pollutants. This provision was to "survive closing or termination of this Agreement." Fallowfield and Callaghan allege that in 1989 they discovered a large number of bottles buried in a ditch near the outskirts of the Property. They aver that this deposit of bottles was the result of Leonard Strunk's disposal of chemicals and other waste by burial on the Property. One such occasion, which is alleged to have occurred in the late 1970's, Leonard Strunk purportedly removed labels from bottles of chemicals with the help of his wife, Betty Strunk, and then directed two of his employees, Michael McWilliams and Timothy Rau, to dig a trench, crush the deposited bottles with a bulldozer, and cover the trench with dirt. During this particular burial, the chemicals in the trench began to smoke and emit a foul sulphur-like odor. Nevertheless, the two employees completed the burial of the chemical substances. Fallowfield and Callaghan further claim that the Strunks never informed them of the aforesaid disposal activities. They claim that they first became aware of the existence of the buried waste after settlement on the Property when the Pennsylvania Department of Environmental Resources and the Pennsylvania Attorney General's Office investigated the disposal activities and discovered the disposal site. When the waste was discovered on the Property, Fallowfield and Callaghan, as owners of record, were compelled by state and federal environmental laws to initiate an investigation and cleanup. Fallowfield and Callaghan engaged RMC Environmental Services ("RMC") to evaluate the site and test the waste samples recovered from the site. RMC analyzed soil samples taken at several locations in the waste pile. Their testing revealed that the samples did contain hazardous waste. RMC's analysis of approximately seven bottles of samples removed from the site revealed in three of the bottles the presence, inter alia, of various metals and H[2]S (hydrogen sulfide) in solutions of low and high ph. The conclusion of RMC was that three bottles contained toxic and carcinogenic substances that are defined as hazardous waste pursuant to CERCLA, 42 U.S.C. § 9601(14), as implemented by 40 C.F.R. 261.3, and Pa.C.S.A. tit. 35, § 6020.103 ("HSCA") (Purdon's Supp. 1990). The Strunks denied any knowledge of the presence of these glass bottles. Based upon these findings Fallowfield and Callaghan filed a Complaint on December 4, 1989. On January 25, 1990, the Strunks filed a Motion to Dismiss, or in the Alternative, to Sever and Stay Certain of Plaintiff's Claims. By Memorandum and Order dated April 23, 1990, this Court granted in part and denied in part the Strunk's [23 ELR 20120] motion. On May 1, 1990, Fallowfield and Callaghan filed an Amended Complaint pursuant to the April 23, 1990 Order. Leonard Strunk suffered a stroke in October 1989. As a result he suffers from aphasia. His condition is permanent and irreparable. An Arizona state court declared Leonard Strunk incompetent on May 15, 1990. In re the Guardianship of Leonard M. Strunk, No. 90-00797 (Superior Court of Arizona). The Strunks claim that the stroke is directly attributable to the unlawful action of Fallowfield, Callaghan and Bryn Mawr Trust. On July 5, 1990, the Strunks initiated a third-party action against the Bank, Strunk v. Bryn Mawr Trust, Civil Action No. 90-4431, averring that the Bank failed to make the payments required in the letter of credit securing a note payable ("Letter of Credit") issued by Fallowfield and Callaghan in consideration for the Property. Upon the discovery of the hazardous waste, Fallowfield and Callaghan allegedly ceased payment upon the promissory note, prompting the Strunks to present a sight draft to the Bank seeking payment under the Letter of Credit. The Chester County Court of Common Pleas temporarily granted plaintiffs, Fallowfield and Callaghan, an ex parte order restraining the Strunks from collecting on the Letter of Credit. Nevertheless, after a hearing, the Chester County Court of Common Pleas dissolved the injunction holding that the plaintiffs, Fallowfield and Callaghan, failed to show a likelihood of success on the merits. See Fallowfield v. Strunk, No. 89-04509 (Chester County Court of Common Pleas, August 21, 1989). The Bank requested and received from Fallowfield and Callaghan a commitment to defend and indemnify the Bank (the "Indemnification Agreement") if it is found to have wrongfully refused to pay on the Letter of Credit. By Memorandum and Order dated January 14, 1991, this Court consolidated Fallowfield and Callaghan's action with the Strunks' third-party action. On February 8, 1991, this Court dismissed Count VI of Fallowfield and Callaghan's Complaint and denied Fallowfield and Callaghan's Motion for Summary Judgment and Motion for Sanctions. Leave to file an Amended Complaint was granted on December 30, 1991. The purpose of summary judgment is to avoid a pointless trial in cases where it is unnecessary and would only cause delay and expense. Goodman v. Mead Johnson & Co., 534 F.2d 566, 573 (3d Cir. 1976), cert. denied, 429 U.S. 1038 (1977). When considering a motion for summary judgment, this Court shall grant such motion "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). When reviewing a motion for summary judgment, this Court will resolve all reasonable doubts and inferences in favor of the nonmoving party. Arnold Pontiac — GMC, Inc. v. General Motors Corp., 700 F. Supp. 838, 840 (W.D. Pa. 1988). The inquiry into whether a "genuine issue" of material fact exists has been defined by the Supreme Court as whether "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). "As to materiality, the substantive law will identify which facts are material." Id. The Supreme Court articulated the allocation of burdens between a moving and nonmoving party in a motion for summary judgment in Celotex Corp. v. Catrett, 477 U.S. 317 (1986). The Court held that the movant had the initial burden of showing the court the absence of a genuine issue of material fact, but that this did not require the movant to support the motion with affidavits or other materials that negated the opponent's claim. Id. at 323. The Court also held that Rule 56(e) requires the nonmoving party to "go beyond the pleadings and by her own affidavits, or by the 'depositions, answers to interrogatories, and admissions, on file,' designate 'specific facts showing that there is a genuine issue for trial.'" Id. at 324 (quoting Fed.R.Civ.P. 56(e)). The Supreme Court further elaborated on the type of evidence that the nonmoving party is required to adduce in order to withstand a motion for summary judgment: We do not mean that the nonmoving party must produce evidence in a form that would be admissible at trial in order to avoid summary judgment. Obviously, Rule 56 does not require the nonmoving party to depose her own witnesses. Rule 56(e) permits a proper summary judgment motion to be opposed by any of the kinds of evidentiary materials listed in Rule 56(c), except the mere pleadings themselves, and it is from this list that one would normally expect the nonmoving party to make the showing to which we have referred [a genuine issue of material fact]. 1. The Strunks' Motion for Partial Summary Judgment The Strunks seek summary judgment on Counts III, V, VII, IX and XI of the Second Amended Complaint. Count III is brought pursuant to § 7002(a)(1)(A) of RCRA, which provides that a citizen may commence a civil action against any person "who is alleged to be in violation of any permit, standard, regulation, condition, requirement, prohibition, or order which has become effective under [RCRA]." Count V, seeks attorneys' fees and costs under the citizen suit provision of HSCA. Count VII alleges that the activity engaged in by the Strunks was ultrahazardous and therefore seeks to hold the Strunks strictly liable for the cost of cleaning up the Property. Count IX seeks partial recision of the contract for the purchase of the Property on the grounds that plaintiffs relied on Leonard Strunk's fraudulent misrepresentation that no hazardous waste was buried on the Property. Finally, Count XI seeks punitive damages. The Strunks claim that expert testing has established that the soil and water of the former Strunk farm no longer indicates the presence of hazardous waste in concentrations posing an environmental threat. The Strunks contend that all of the bottles containing hazardous waste were excavated and removed from this site and, therefore, the violations of RCRA are not ongoing. Therefore, the Strunks argue that partial summary judgment should be granted dismissing plaintiffs' claims for injunctive relief and damages under RCRA, HSCA and the state law theories of strict liability for engaging in an ultra-hazardous activity, fraudulent misrepresentation, and punitive damages. With respect to Count III, the Strunks argue that any violation of RCRA were not continuing, and therefore summary judgment must be granted. This argument was addressed by the Court in its April 23, 1990 Memorandum. In that Memorandum, this Court held that a RCRA "violation continues until proper disposal procedures are put into effect, or the hazardous waste is cleaned up." (Memorandum at 22). The Supreme Court made clear in Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Foundation, Inc., 108 S. Ct. 376 (1989), that good-faith allegations of continuing violations form the basis for an action pursuant to RCRA, subject to the requirement of Rule 11 of the Federal Rules of Civil Procedure, that pleadings based upon good-faith belief must be formed after reasonable inquiry. Id. at 385. The Court went on to note that on summary judgment the defendant may challenge the veracity of the good-faith allegations. The defendant bears the burden of establishing that the plaintiff's good-faith allegations of continuing violations under RCRA were sham and raised no genuine issue of fact. If the defendant fails to make such a showing after the plaintiff offers evidence to support the allegation, the case proceeds to trial on the merits, where the plaintiff must prove the allegations in order to prevail. In this case, the defendants allege that the only hazardous waste found on the property was contained in three (3) unbroken bottles which were removed from the site. Plaintiffs, however, note that twelve (12) additional samples were removed from the site by the Department of Environmental Resources (DER). Plaintiffs contend that the DER's analyses of these bottles show the presence of hazardous waste. Moreover, the plaintiffs claim that the trench from which the bottles were removed contained numerous broken bottles, the contents of which had spilled into the ground as a result of Leonard Strunk's instructions to his employee to run over the bottles with a bulldozer prior to burying them. Thus, removing the bottles may not result in a complete clean-up of the contaminated soil. Summary judgment cannot be granted on Count III because there is a genuine issue of material fact as to whether the hazardous waste on the property has been removed. If the effects of the hazardous waste remain in the soil and/or groundwater, then an ongoing RCRA violation [23 ELR 20121] is indicated. Accordingly, summary judgment on Count III is DENIED. Count V seeks attorneys' fees and expenses pursuant to HSCA. HSCA, like RCRA, applies to continuing violations. The Court explained in its April 23, 1990 Memorandum that the analysis with respect to the "to be in violation" language of RCRA is equally applicable to the language in HSCA. Because of the nature of an improper disposal of hazardous waste, the waste continues to infect the environment until cleaned up or the proper disposal protections are in place." (Memorandum at 40). Here, having found that a factual issue remains regarding the continuing presence of waste on the Property, plaintiffs' Motion for Summary Judgment on Count V is DENIED. (c) Count VII: Strict Liability Count VII seeks to hold the Strunks strictly liable for the clean-up costs incurred as a result of their allegedly ultra-hazardous activities. The Court explained in its Memorandum of February 8, 1991 that Pennsylvania has adopted the ultrahazardous doctrine found in the Restatement (Second) of Torts. (Memorandum at 24). In ascertaining whether an activity is ultrahazardous or abnormally dangerous, the Court will look to the factors stated in § 520 of the Restatement (Second) of Torts as follows: (a) the existence of a higher degree of risk of some harm to the person, land or chattels of others; (b) likelihood that the harm that results from the activity will be great; (c) inability to eliminate the risk by the exercise of reasonable care; (d) extent to which the activity is not a matter of common usage; (e) inappropriateness of the activity to the place where it is carried on; and (f) extent to which its value to the community is outweighed by its dangerous attributes. The defendants look toward authority from states other than Pennsylvania for the proposition that the operation of a landfill for disposal of wastes is not an abnormally dangerous activity warranting the imposition of strict liability: Bagley v. Controlled Environment Corp., 503 A.2d 823, 826 [16 ELR 20606] (N.H. 1986), and Ewell v. Petro Processors of Louisiana, Inc., 364 So. 2d 604 (La. App. 1st Cir. 1978). Neither of these cases, however, apply the Restatement (Second) analysis which is the law of Pennsylvania. It is true that under the Restatement (Second) the relevant "inquiry is not on the hazardous substance's dangerous propensities, but on the defendant's activities with regard to the substance," Amcast Indust. Corp. v. Detrex Corp., 779 F. Supp. 1519, 1544 (N.D. Ind. 1991). This does not mean, however, that the Court will not consider the nature of the substances involved and their common uses. Indeed, the Restatement (Second) provides for such consideration in the first, second, fourth and fifth factors of § 520. Here, the defendants argue that the operation of an entire landfill is not ultrahazardous and, therefore, the burial of a small quantity of hazardous waste cannot be ultrahazardous. However, the degree of risk involved in operating a landfill might vary greatly depending on the nature of the material introduced. It is unrefuted that handling the materials at issue involves a high degree of risk, and that it is likely that the harm which would result from a release of the substances would be great. Whether the material was released in sufficient quantity to pose a hazardous condition, and whether the defendants are responsible for the release if one did indeed occur, remain questions for a jury to determine. The parties' expert witnesses are in disagreement concerning the first question and contradictory evidence has been presented concerning the latter question. The deposition testimony of Timothy Rau and James McWilliams affirm that they buried the materials on the Property at the direction of Leonard Strunk. This testimony is directly refuted by the affidavit of Leonard Strunk in which Mr. Strunk denies any knowledge of the buried waste. Thus, issues of credibility remain which must be resolved by a jury. Anderson, 477 U.S. at 248. Accordingly, defendants' Motion for Summary Judgment on Count VII is DENIED. Count IX seeks recision of the Agreement between Fallowfield and Callaghan and the Strunks for the purchase of the Property. The plaintiffs argue that rescission [sic] of an agreement to purchase real property is an appropriate remedy under Pennsylvania law where the buyer can show: (1) a representation was made as to a statement of fact; (2) the representation was untrue and the seller knew it to be untrue; (3) the representation was made for the purpose of inducing the buyer to act upon it; (4) the buyer was induced to act upon it; and (5) the buyer did so act to his injury. Dr. Joseph v. Zambelli, 139 A.2d 644, 648 (Pa. 1958). The Strunks argue that they are entitled to summary judgment on Count IX since there were no hazardous, toxic or carcinogenic substances or other pollutants remaining on the Property. The Strunks contend that Fallowfield and Callaghan have sold a portion of the land, and that the Bank has estimated the value of the remaining 200 acres to be $ 2.1 million. Thus, the Strunks maintain, the plaintiffs argue that no material misrepresentation existed in the agreement to purchase the property. Additionally, the Strunks contend that recision is impossible in this case, since the plaintiffs have sold a portion of the property. The Strunks' first contention will not support summary judgment, since the Court has determined that a genuine issue of material fact exists as to the continued presence of hazardous waste on the Property. The Strunks next argue that the plaintiffs would be unable to return to the status quo ante since they no longer have title to the entire Property. The plaintiffs argue, nevertheless, that "partial recision" would be an appropriate remedy. The Strunks contend that under Pennsylvania law, partial recision is impermissible. Recision based upon misrepresentation must be distinguished from recision based upon the mutual intent of the parties which operates as a principle of legal construction. The Strunks argue that the Third Circuit held in Erie Telecommunications Inc. v. Erie, 853 F.2d 1084 (3d Cir. 1988), that partial recision is not permitted under Pennsylvania law. This case, however, involved mutual recision and not misrepresentation. The remedy of restitution and recision for contracts made through misrepresentation are equitable in nature. In a [sic] equitable action, the court's flexibility in shaping a [sic] appropriate relief can be conditioned upon restoration, restitution, or recision of the contract, or some combination thereof. 12 Williston §§ 1529-1530. Restatement of Contracts (Second) § 481. Therefore, the Strunks' Motion for Summary Judgment as to Count IX is DENIED. (e) Count XI — Punitive Damages The Strunks contend that they are entitled to summary judgment on Count XI which seeks punitive damages for the tort of fraudulent inducement. First, the defendants argue that an action to recover in tort cannot be maintained in this case because the plaintiffs' claim is one essentially arising in contract. The defendants note that in Glazer v. Chandler, 200 A.2d 416 (Pa. 1964), the Pennsylvania Supreme Court held: to permit a promise to sue his promisor in tort for breaches of contract inter se, would erode the usual rules of contractual recovery and inject confusion into our well-settled forms of actions. Most Courts have been cautious about permitting tort recovery for contractual breaches and we are fully in accord with this policy. The holding of Glazer, however, is inapplicable to the present case. Glazer involved a claim for the tort of inducing breach of contract or refusal to deal. This tort "is defined as inducing or otherwise causing a third person not to perform a contract with another, or not to enter into or continue a business relation with another, without privilege to do so." Id. at 417. The Pennsylvania Supreme Court explained that where "the allegations and evidence only disclose that defendant breached his contracts with plaintiff, and that as an incidental consequence thereof plaintiff's business relationships with third parties have been affected, an action lies only in contract for defendant's breaches, and the consequential damages recoverable, if any, may be adjudicated only in that action." Id. at 417. Here, however, the action is for the tort of fraud. Under Pennsylvania law, "Fraud consists of anything calculated to deceive, whether by single act or combination, or by suppression of truth, or suggestion [23 ELR 20122] of what is false, whether it be by direct falsehood or by innuendo, by speech or silence, word of mouth, or look or gesture." Delahanty v. First Pennsylvania Bank, N.A., 464 A.2d 1243, 1251 (Pa. Super 1983). "Punitive damages are recoverable in an action for fraud." Shanks v. Alderson, 582 A.2d 883 (Pa. Super. 1990); Hess v. Hess, 580 A.2d 357 (Pa. Super. 1990). Therefore, the defendants' argument will not support summary judgment. The Strunks' second argument that there are no hazardous, toxic or carcinogenic substances or other pollutants on the property also fails. The Court has determined that a genuine issue of material fact exists as to the continued presence of hazardous waste on the Property. Accordingly, the Strunks' Motion for Summary Judgment as to Count XI is DENIED. 2. Fallowfield and Callaghan's Motion for Summary Judgment and Bryn Mawr Trust Company's Motion for Summary Judgment The Strunks brought a counterclaim against Fallowfield, Callaghan and filed a separate action against Bryn Mawr Trust Company as third-party defendant. The gravamen of these claims is that Fallowfield, Callaghan and the Bank conspired to deprive the Strunks of payments owing under the letter of credit issued by the Bank and payable to the Strunks. In paragraphs 27 through 30 of Count I of the Amended Counterclaim, the Strunks assert that as a result of this non-payment Leonard Strunk suffered a stroke. In Count II of the Amended Counterclaim the Strunks assert a claim for loss of consortium. Fallowfield and Callaghan seek summary judgment on Counts I and II of the Amended Counterclaim arguing that the Strunks cannot produce any expert testimony establishing that Leonard Strunk's stroke occurred as a result of any conduct by the alleged conspirators. Similarly, the Bank seeks summary judgment on paragraphs 27 through 30 of Count I of the Complaint, asserting a claim for Mr. Strunk's [sic] physical and emotional injuries and punitive damages, and Count II seeking to recover for loss of consortium. The Bank and Fallowfield and Callaghan assert that at the deposition of the Strunks' expert witness, Martin D. Mollen, M.D., the expert conceded on cross-examination that he could not be certain that Leonard Strunk's stroke was a result of the "stresses" that he allegedly suffered. The doctor opined that it is possible that Leonard Strunk's condition was caused by these "stresses," but he could not establish causation with a reasonable degree of medical certainty. Such an opinion amounts to mere speculation and is insufficient as a matter of law to establish causation. Martin v. Johns-Manville Corp., 508 Pa. (1985); Lanza v. Poretti, 537 F. Supp. 777 (E.D.Pa. 1982). The Strunks argue that Dr. Mollen has prepared two reports, each of which state that the wrongful dishonoring of the Letter of Credit was a substantial contributing factor to Leonard Strunk's stroke. The Strunks argue that under Pennsylvania law, "proximate cause . . . may be established by evidence that a defendant's negligent act or failure to act was a substantial factor in bringing about the harm inflicted upon a plaintiff." Jones v. Montefiore Hospital, 431 A.2d 920, 923 (Pa. 1981). Thus, the issue of whether the alleged actions of the Bank and Fallowfield and Callaghan were a proximate cause of Mr. Strunk's medical condition is a determination that must be made by a jury. In a personal injury action, Pennsylvania law requires the plaintiff to prove proximate causation by proffering expert medical testimony demonstrating with a reasonable degree of medical certainty that the defendant's action was a cause of the plaintiff's injuries. Pirches v. General Acci. Ins. Co., 511 A.2d 1349, 1352 (Pa. Super. 1986). The substantiality of the defendant's action as a causative agent to the plaintiff's injuries is a question for the jury. Id. Here, the Strunk's expert will testify that the actions of the Bank and Fallowfield and Callaghan were factors contributing to Mr. Strunk's stroke. Whether this testimony will ultimately prove credible is a determination that must be left to the jury. Therefore, the Motions for Summary Judgment of the Bank and Fallowfield and Callaghan are DENIED. The Bank also seeks summary judgment in its favor on the Strunks' claim for punitive damages. The Bank argues that the Strunks have failed to produce any evidence tending to establish that the Bank acted in an outrageous manner. It is well settled in Pennsylvania that a bank issuing a letter of credit is required to remain "independent" of the parties to the underlying transaction. Intraworld Industries, Inc. v. Girard Trust Bank, 336 A.2d 320, 323 (Pa. 1975). A claim for punitive damages can be maintained only where the defendant has acted outrageously or with bad motive or reckless indifference. Chambers v. Montgomery, 192 A.2d 355 (Pa. 1963). Here, the Strunks argue that the Bank was improperly motivated in dishonoring the Letter of Credit. The Strunks argue that the bad faith of the Bank can be inferred from circumstances surrounding the incident, the testimony of Bank officials regarding the impairment of collateral, the language and circumstances of the Indemnification Agreement between Fallowfield, Callaghan and the Bank, and the actions of Bank officials. The Bank's argument that the Strunks' punitive damages claim is found solely upon the testimony of certain Bank officials is erroneous. Accordingly, the Bank's Motion for Summary Judgment on the claim for punitive damages is DENIED. AND NOW, this 7th day of April, 1992, upon consideration of the Strunks' Motion for Partial Summary Judgment on Counts III, V, VII, and XI of the Second Amended Complaint and Fallowfield and Callaghan's response thereto; Fallowfield and Callaghan [sic] Motion for Partial Summary Judgment and the Strunks' response thereto; and Bryn Mawr Trust's Motion for Summary Judgment and the Strunks [sic] response thereto, IT IS HEREBY ORDERED: (1) The Strunks' Motion for Partial Summary Judgment is DENIED; (2) Fallowfield and Callaghan's Motion for Summary Judgment is DENIED; and (3) Bryn Mawr Trust Company's Motion for Summary Judgment is DENIED. 23 ELR 20119 | Environmental Law Reporter | copyright © 1993 | All rights reserved |