Justices Hold First Argument Session of '04

Also on the docket Monday is an appeal of a Superior Court decision holding that the Uniform Commercial Code does not preclude a claim under a successor liability theory against a corporation that had purchased the assets of a troubled company from a bank.



In Continental Insurance Co. v. Schneider Inc., PICS Case No. 02-1588 (Pa. Super. Oct. 21, 2002) Orie Melvin, J. (17 pages), the court sent the case against Vanadium Enterprises Corp. back to the Allegheny County trial court, which had granted summary judgment on the basis that Section 9504 of the UCC precluded the Continental Insurance Co.’s successor liability claim against Vanadium.



Continental had sought $12 million in retrospective premiums from Vanadium, which purchased the non-real estate assets of companies belonging to Schneider Inc. for $15 million.



Writing for the unanimous Superior Court, Orie Melvin said that although the UCC does provide certain protections to secured creditors, there is no language in Section 9504 of the law that would bar judicial inquiry into the propriety of the transaction.



After reviewing the UCC, the court said that “a sale pursuant to Section 9504 of the UCC does not, as a matter of law, preclude a creditor claim against the purchaser based upon successor liability.”



This case is scheduled second on the court’s docket Monday. Presenting arguments for the appellants, including Vanadium, is Manning James O’Connor II of Evans Portnoy Quinn O’Connor in Pittsburgh. Steven W. Zoffer and Joseph S.D. Christof II of Pittsburgh’s Dickie McCamey & Chilcote will present arguments for Continental, the appellee.

Zoning Law

On Tuesday, the justices will consider when a lessee may ask a local government to subdivide property it does not technically own.



In Guido v. Township of Sandy, PICS Case No. 02-1583 (Pa. Commw. Oct. 17, 2002 Doyle, S.J. (18 pages), the Commonwealth Court ruled that an individual who leased a portion of a land parcel could not exercise his option to purchase the property where the remaining portion would not comply with the minimum lot size requirement of the applicable zoning ordinance.



In granting allocatur, the Supreme Court limited its review to the question of whether “a leasehold interest with an option to purchase creates a property interest in the lessee sufficient to support a subdivision under the terms of the Pennsylvania Municipalities Planning Code.”



According to lower court opinions, DuBois Dutch LLC wished to subdivide a property in Clearfield County on which it operates a restaurant. The company holds the property under a lease that includes an option to buy the land.



Reversing a trial judge, the Commonwealth Court concluded 2-1 that a party holding a leasehold interest with an option to purchase could not pursue the subdivision.



The lessees’ appeal will be heard fifth on the docket.



Toni M. Cherry of Gleason Cherry & Cherry in DuBois will present arguments for DuBois Dutch, the appellant. Appearing for the appellee, John A. Guido, is Anthony S. Guido of Hanak Guido & Taladay in DuBois.

Pension Offset