Schmitt, E. v. State Farm Auto Insurance

S
J-A06023-20

                                    

2021 Pa. Super. 5

    EDWARD J. SCHMITT, INDIVIDUALLY            :   IN THE SUPERIOR COURT OF
    AS ADMINISTRATOR OF THE ESTATE             :         PENNSYLVANIA
    OF DANIELLE N. LUTEMAN,                    :
    DECEASED                                   :
                                               :
                       Appellee                :
                                               :
                v.                             :
                                               :
    STATE FARM MUTUAL AUTOMOBILE               :
    INSURANCE COMPANY AND STATE                :
    FARM FIRE & CASUALTY COMPANY               :
    AND GARY J. ROOT & GARY J. ROOT            :
    AGENCY,                                    :
                                               :
                       Appellants              :      No. 1767 EDA 2019

                   Appeal from the Order Entered May 23, 2019
              In the Court of Common Pleas of Montgomery County
                        Civil Division at No(s): 18-06583


BEFORE:      STABILE, J., KING, J., and STEVENS, P.J.E.*

OPINION BY KING, J.:                                FILED: JANUARY 11, 2021

        Appellants, State Farm Mutual Automobile Insurance Company and

State Farm Fire & Casualty Company (“State Farm”) and Gary J. Root and the

Gary J. Root Agency, appeal from the order entered in the Montgomery County

Court of Common Pleas, granting partial summary judgment in favor of State

Farm on its counterclaim for declaratory relief, and granting partial summary

judgment in favor of Appellee, Edward J. Schmitt, as administrator of the

estate of Danielle N. Luteman, Deceased, on two counts of his amended

complaint seeking declaratory relief. For the reasons that follow, we quash

____________________________________________


*   Former Justice specially assigned to the Superior Court.
J-A06023-20


the appeal as interlocutory and unreviewable at this time.

      On November 14, 2011, Danielle Luteman was driving her Toyota

Corolla on Route 422 in Upper Providence Township. Ms. Luteman’s boyfriend,

Michael Taylor, occupied the front passenger seat. At some point, Mr. Taylor

reached over and grabbed the steering wheel from Ms. Luteman. The vehicle

left the road, struck a guardrail, and flipped over, killing Ms. Luteman. At the

time of the accident, Ms. Luteman lived with her grandparents, the Schmitts.

Appellee, Mr. Schmitt, as administrator of Ms. Luteman’s estate, filed a

complaint seeking a declaratory judgment that underinsured motorist (“UIM”)

benefits were available under three separate State Farm insurance policies:

(1) a personal auto policy issued to Ms. Luteman (“Luteman Auto Policy”); (2)

a personal auto policy issued to the Schmitts (“Schmitt Auto Policy”); and (3)

a personal umbrella policy issued to the Schmitts (“Schmitt Umbrella Policy”).

Appellee also sought compensatory damages.

      Upon stipulation between the parties, Appellee filed an amended

complaint on August 14, 2018. In the amended complaint, Appellee raised

seven counts: Count I—declaratory judgment that Appellee is entitled to

receive UIM benefits under the Luteman Auto Policy; Count II—compensatory

relief in the form of UIM benefits under the Luteman Auto Policy; Count III—

declaratory judgment that Appellee is entitled to receive UIM benefits under

the Schmitt Auto Policy; Count IV—compensatory relief in the form of UIM

benefits under the Schmitt Auto Policy; Count V—declaratory judgment that


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Appellee is entitled to receive UIM benefits under the Schmitt Umbrella Policy;

Count VI—compensatory relief in the form of UIM benefits under the Schmitt

Umbrella Policy; and Count VII—negligence against Gary Root and the Gary

Root Agency (person/entity who sold the State Farm insurance policies to the

Schmitts and Ms. Luteman) seeking compensatory damages, as an alternative

claim if the court decided Appellee is not entitled to recover UIM benefits under

any of the policies.

      In response, State Farm filed an answer, new matter, and counterclaim

seeking a declaratory judgment that State Farm is not obligated to pay UIM

benefits to Appellee under any of the three policies. Appellee filed a reply to

State Farm’s new matter and an answer to its counterclaim on October 5,

2018. On January 24, 2019, State Farm filed a motion for summary judgment

on its counterclaim and as to Counts I-VI of the amended complaint.           On

February 22, 2019, Appellee also filed a motion for summary judgment on

Counts I-VI of the complaint, as well as a response in opposition to State

Farm’s summary judgment motion. On April 1, 2019, State Farm responded

to Appellee’s summary judgment motion. The court conducted oral argument

on the competing summary judgment motions on April 29, 2019.

      On May 23, 2019, the court entered summary judgment in favor of State

Farm on its counterclaim for declaratory judgment on Count I, determining

that State Farm has no obligation to pay UIM benefits to Appellee under the

Luteman Auto Policy, and on the corresponding claim for compensatory


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damages at Count II. The court also entered summary judgment in favor of

Appellee for declaratory judgment on Counts III and V of the amended

complaint, finding Appellee is entitled to recover UIM benefits under the

Schmitt Auto Policy and Schmitt Umbrella Policy.

     State Farm filed a notice of appeal on June 20, 2019. On June 24, 2019,

the court ordered State Farm to file a concise statement of errors complained

of on appeal, per Pa.R.A.P. 1925(b). State Farm subsequently complied.

     On July 8, 2019, Appellee filed an application in this Court to quash State

Farm’s appeal, arguing, inter alia, the court’s May 23, 2019 summary

judgment order is interlocutory because it left unresolved the remaining

compensatory damages claims at Counts IV and VI of Appellee’s amended

complaint.    On July 22, 2019, State Farm filed an answer to Appellee’s

application to quash, conceding that the trial court’s summary judgment order

left the compensatory damages claims outstanding. State Farm maintained

the court’s order was immediately appealable, however, under Pa.R.A.P.

311(a)(8) (stating appeal may be taken as of right and without reference to

Rule 341(c) from order that is made final or appealable by statute, even

though order does not dispose of all claims and of all parties). State Farm

alleged that pursuant to the Declaratory Judgments Act at 42 Pa.C.S.A. §

7532, the court “affirmatively or negatively declare[d] the rights” of the

parties, so the court’s ruling was immediately appealable under this statute.

(See State Farm’s Answer to Appellee’s Application to Quash, filed 7/22/19,


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at ¶6). On August 2, 2019, this Court denied Appellee’s application to quash

without prejudice to his right to raise the issue again in his appellate brief.

      State Farm raises the following issues for our review:

         Did the trial court err when it determined that the “Family
         Car Exclusion” contained in the State Farm Auto Policy was
         unenforceable and as a result declared that [Appellee] was
         entitled to recover underinsured motorist benefits under the
         State Farm Auto Policy?

         Did the trial court err when it ruled that the State Farm
         Personal Liability Umbrella Policy was governed by the
         provisions of the Pennsylvania Motor Vehicle Financial
         Responsibility Law and that, therefore, the Family Car
         Exclusion contained in that policy was unenforceable as
         well?

         Did the trial court err in granting summary judgment to
         [Appellee] with respect to State Farm’s contention that the
         injuries sustained by [Appellee’s] decedent were not caused
         by the acts of an “owner or driver” or an “owner or operator”
         of an underinsured motor vehicle as is required by the
         insuring clause of both the State Farm Auto Policy and the
         State Farm Personal Umbrella Policy?

         Assuming, arguendo that the trial court was correct in its
         ruling that the Family Car Exclusions in the policies did not
         apply and that the injuries sustained by [Appellee’s]
         decedent were caused by the acts or omissions of the
         “owner or driver” or the “owner or operator” of an
         underinsured motor vehicle, did the trial court nevertheless
         err in declaring that [Appellee] is entitled to recover
         underinsured benefits under the auto policy and the
         personal umbrella policy when no determination has yet
         been made in the litigation with respect to:

            (a) Whether the alleged underinsured motorist was
            negligent;

            (b) Whether there was comparative negligence on
            the part of [Appellee’s] decedent which was greater
            than any negligence on the part of the alleged

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             underinsured motorist; and

             (c)   The amount of damages?

(State Farm’s Brief at 4-5).

        As a preliminary matter, we must address Appellee’s application to

quash the appeal as interlocutory because “the appealability of an order

directly implicates the jurisdiction of the court asked to review the order.”

Knopick v. Boyle, 

189 A.3d 432

, 436 (Pa.Super. 2018) (internal citation

omitted).    As a general rule, appellate courts have jurisdiction only over

appeals taken from a final order. In re Bridgeport Fire Litigation, 

51 A.3d 224

, 229 (Pa.Super. 2012). A final order is one that disposes of all the parties

and all the claims; or is entered as a final order pursuant to the trial court’s

determination under Rule 341(c). Pa.R.A.P. 341(b)(1), (3). An appeal may

also be taken from “an order that is made final or appealable by statute or

general rule, even though the order does not dispose of all claims and of all

parties.” Pa.R.A.P. 311(a)(8).

        Section 7532 of the Declaratory Judgments Act provides, in relevant

part:

          Courts of record, within their respective jurisdictions, shall
          have power to declare rights, status, and other legal
          relations whether or not further relief is or could be claimed.
          … The declaration may be either affirmative or negative in
          form and effect, and such declarations shall have the force
          and effect of a final judgment or decree.

42 Pa.C.S.A. § 7532.

        In Bolmgren v. State Farm Fire and Cas. Co., 

758 A.2d 689

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(Pa.Super. 2000), the appellee brought an action against State Farm for a

declaration of coverage under a homeowner’s policy and for damages.

Specifically, Counts I-III of the appellee’s amended complaint sought relief in

the form of declaratory judgment, and Count IV sought damages, attorney’s

fees, interest and costs. Following competing motions for summary judgment,

the court granted summary judgment in favor of the appellee on Counts I-III.

State Farm appealed. As a prefatory matter, this Court considered whether

the appeal was properly before us, where the damages claim in Count IV of

the amended complaint remained outstanding.

      In addressing whether the appeal was proper under Rule 311(a)(8) by

way of the Declaratory Judgments Act, this Court explained:

         Although the Act provides that the declaration shall have the
         “force and effect of a final judgment or decree,” this partial
         adjudication does not become appealable merely because it
         is cast in the form of a declaratory judgment. Appellee’s
         complaint in this matter, although captioned a declaratory
         judgment, sought ordinary civil relief and remedies in the
         form of a declaration of coverage and damages.1 Her
         request for further relief, in the form of damages, has yet to
         be determined. Because an appeal will not lie from an
         interlocutory order, the present appeal must be quashed.

            1 It is the nature of the order at issue that dictates
            whether it is final and appealable. In this case, the
            order is not final since it does not dispose of the claim
            of damages raised in the complaint, in addition to the
            request for declaratory judgment.          This case is
            different than that in Redevelopment Authority of
            Cambria County v. International Insurance Co.,
            [

685 A.2d 581

(Pa.Super. 1996), appeal denied, 

548 Pa. 649

, 

695 A.2d 787

(1997)]. In that case the
            complaint sought relief in the form of declaratory
            judgment that Erie and International owed a duty to

                                      -7-
J-A06023-20


            defend and to indemnify the Authority in an action
            filed by a third party. In that case, the order was final
            because the trial court’s determination that Erie had a
            duty to defend the third party claim effectively ended
            the litigation. Here, in addition to the declaration of
            rights, the trial [c]ourt was asked to award damages
            under the policy. Under these circumstances, the
            [trial] court is required to address this request.
            Without doing so, the order is not final.

Id. at 691

(emphasis in original).

      This Court has repeatedly applied Bolmgren when discussing the

appealability of orders that resolve declaratory judgment claims but leave

other claims outstanding. See, e.g., Bombar v. West American Ins. Co.,

932 A.2d 78

, 85-86 (Pa.Super. 2007) (holding that trial court’s initial January

19, 2005 order granting summary judgment on declaratory judgment count

of complaint was not final and appealable, where that order did not determine

amount of damages for remaining bad faith claim; appeal from later December

30, 2005 order resolving outstanding bad faith claim was proper); Cresswell

v. Pennsylvania Nat. Mut. Cas. Ins. Co., 

820 A.2d 172

, 176 n.2 (Pa.Super.

2003) (determining trial court’s initial December 20, 2001 order granting

partial summary judgment in favor of appellee on declaratory judgment claim

was interlocutory and unappealable, where court’s order left unresolved

additional bad faith claim; trial court’s later order of May 28, 2002, which

disposed of sole remaining bad faith claim, was final and appealable); Moore

Motors, Inc. v. Beaudry, 

775 A.2d 869

, 870 (Pa.Super. 2001) (per curiam)

(quashing appeal from order granting appellees’ motion for partial summary


                                      -8-
J-A06023-20


judgment as interlocutory and unappealable; although court granted

summary judgment in favor of appellees on all nine counts of appellants’

amended complaints, and on count I of appellees’ counterclaim seeking

declaratory judgment, court’s order left unresolved counts II and III of

appellees’ counterclaim; holding “absent an express determination of finality

under Rule 341(c), the dismissal of a complaint with the concomitant dismissal

of only one count of a multi-count counterclaim is interlocutory and

unappealable.   …    To hold otherwise would permit the kind of piecemeal

litigation that the Supreme Court specifically tried to eliminate when it enacted

Rule 341”).

      Simultaneous to this Court’s continued application of Bolmgren, our

Supreme Court has issued a line of cases also dealing with the appealability

of orders resolving declaratory judgment claims, beginning with Nationwide

Mut. Ins. Co. v. Wickett, 

563 Pa. 595

, 

763 A.2d 813

(2000). In Wickett,

our Supreme Court explained that under Section 7532, “an order in a

declaratory judgment action that either affirmatively or negatively declares

the rights and duties of the parties constitutes a final order.”

Id. at 604, 763

A.2d at 818.    Consequently, the Court held that an order sustaining the

preliminary objections in the nature of a demurrer of some defendants in a

declaratory judgment action, and dismissing those defendants from the case,

was a final, appealable order, even though claims against other defendants

remained outstanding.


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     In Pennsylvania Bankers Ass’n v. Pennsylvania Dep’t of Banking,

597 Pa. 1

, 

948 A.2d 790

(2008), the Court limited the breadth of Wickett.

In that case, certain banks filed a complaint against the Pennsylvania

Department of Banking asserting different theories for declaratory relief,

including several constitutional claims. The Commonwealth Court, which had

original jurisdiction in the case, sustained the Department of Banking’s

preliminary objections in the nature of a demurrer regarding some of the

banks’ claims.   Our Supreme Court quashed the appeal as interlocutory,

distinguishing Wickett as follows:

        The Banks…argue that the Commonwealth Court’s order
        constitutes a final, appealable order pursuant to Wickett.
        We find Wickett distinguishable, however, for the following
        reasons. In Wickett, the trial court’s order put certain
        defendants out of court by dismissing all of the plaintiff’s
        claims against them. In so doing, the order prevented the
        plaintiffs from obtaining any relief against these parties. It
        would therefore be appropriate in this context to
        characterize the trial court’s order as a final order under 42
        Pa.C.S. § 7532 because it, in essence, declared that the
        plaintiffs did not have any viable theory of recovery against
        such defendants.

        In contrast…, the Commonwealth Court’s order in this case
        did not dismiss any party, but merely narrowed the scope
        of the Banks’ declaratory judgment action, which raised
        alternative theories of relief. Because the Banks might still
        obtain the relief they are seeking based on one of the
        remaining constitutional theories, the Commonwealth
        Court’s order sustaining the [Department of Banking’s]
        preliminary objections has no certain effect upon the
        ultimate relief to which the Banks may be entitled. Thus,
        we find that the Commonwealth Court’s order in this case
        did not declare the parties’ rights within the meaning of 42
        Pa.C.S. § 7532, and therefore, it is not a final order under
        Wickett.16

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           16 Notably, the intermediate appellate courts have
           limited Wickett to contexts where at least one party
           has been dismissed from the case. See Wimer v. Pa.
           Employees Benefit Trust Fund, 

868 A.2d 8

, 13
           (Pa.Super. 2005), aff’d, 

939 A.2d 843

(Pa. 2007)
           (finding Wickett applies when a complaint is
           dismissed and the plaintiffs are put out of courts);
           Consolidation Coal Co. v. White, 

875 A.2d 318

, 325
           (Pa.Super. 2005) (holding an order is only final under
           Wickett when there is “no conceivable legal theory
           under which Appellants could prevail”); 

[Creswell, supra

] (granting partial summary judgment was not
           a final order under Wickett because one claim
           remained); Independ. Oil & Gas Ass’n of Pa. v. Pa.
           Pub. Util. Comm’n, 

804 A.2d 693

, 701 (Pa.Cmwlth.
           2002) (determining that Wickett does not apply
           unless the plaintiffs are put out of court).

                                 *     *      *

        For the reasons outlined above, we conclude that the
        Commonwealth Court’s order in this case, which sustained
        the [Department of Banking’s] preliminary objections in the
        nature of a demurrer with respect to some, but not all, of
        the Banks’ constitutional claims, is not a final, appealable
        order. Our conclusion today is not only informed by our
        well-established policy of avoiding piecemeal litigation, it
        also recognizes that such an order does not represent an
        affirmative or negative declaration of the parties’ rights
        within the meaning of 42 Pa.C.S. § 7532 because alternate
        avenues of relief can still be pursued against the same
        parties in the courts below.

        Accordingly, we quash the instant appeal as interlocutory.

Pennsylvania Bankers Ass’n, supra at 

15-17, 948 A.2d at 799-800

(some

internal footnotes omitted).   See also United States Organizations for

Bankruptcy Alternatives, Inv. v. Department of Banking (“USOBA”),

611 Pa. 370

, 

26 A.3d 474

(2011) (quashing appeal from Commonwealth


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Court’s order striking two provisions of Debt Management Services Act (“Act

117”) as unconstitutional; Commonwealth Court did not address several of

USOBA’s arguments and did not ultimately decide whether USOBA was

entitled to full relief originally requested, which remains available via USOBA’s

alternate arguments; essentially, Commonwealth Court simply narrowed

scope of USOBA’s declaratory judgment action, without ultimately deciding

case; Department of Banking appealed order which, in light of USOBA’s

original challenge to Act 117, granted USOBA only partial declaration of

parties’ rights, status, or legal relations).

      Most recently in the Wickett line of cases, our Supreme Court

summarized these holdings in Pennsylvania Manufacturers’ Assoc. Ins.

Co. v. Johnson Matthey, Inc., 

647 Pa. 85

, 

188 A.3d 396

(2018), stating:

         This Court last expounded upon the appealability of an order
         declaring the rights of parties in 

[USOBA, supra

]. In that
         decision, the Court provided a rather straightforward two-
         part test for appellate courts to apply when considering
         whether an order declaring the rights of parties is final and
         appealable: (1) what is the effect of the lower court’s
         decision on the scope of the litigation; and (2) what practical
         effect does the court’s decision have on the ultimate
         outcome of the case. … If the order in question merely
         narrows the scope of the litigation and does not resolve the
         entirety of the parties’ eligibility for declaratory relief, then
         the order is interlocutory and not immediately appealable.

Pennsylvania Manufacturers, supra at 

90, 188 A.3d at 399-400

(quashing

appeal as interlocutory where Commonwealth Court entered order that

effectively denied appellant’s claim for declaratory relief but left unresolved

appellee’s related but broader counterclaim for declaratory relief; as order on


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appeal does not resolve parties’ competing claims for declaratory relief but

merely narrowed dispute, order is not appealable at this time).      See also

Titeflex Corp. v. National Union Fire Ins. Co. of Pittsburgh, PA, 

88 A.3d 970

(Pa.Super. 2014) (holding order declaring that appellant-insurer had duty

to defend appellee-corporation in underlying actions was appealable because

order resolved declaratory judgment action for all practical purposes; only

conclusion left for trial court to reach was amount of indemnification, which

could not be made until underlying actions were completed; once trial court

determined that insurer had duty to defend, underlying actions could

continue; thus, this case is analogous to Redevelopment Authority, and not

subject to limitation on Wickett announced in Pennsylvania Bankers

Ass’n).

      Instantly, Appellee raised seven counts in his amended complaint.

Counts I, III, and V sought a declaratory judgment that Appellee is entitled to

benefits under the Luteman, Schmitt, and Schmitt Umbrella policies,

respectively.   In Counts II, IV, and VI, Appellee sought compensatory

damages in the form of benefits to be awarded under each of the policies. In

Count VII, Appellee brought a negligence claim against Gary Root and the

Gary Root Agency, as an alternative claim for relief if the court denied relief

on all other counts. State Farm filed a counterclaim seeking a declaratory

judgment that Appellee is not entitled to UIM benefits under any of the three

policies.


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      The parties subsequently filed opposing motions for summary judgment.

The court entered summary judgment in favor of State Farm on its

counterclaim for declaratory judgment on Count I, determining State Farm

does not owe Appellee UIM benefits, or damages sought in Count II, under

the Luteman Auto Policy. The court also granted summary judgment in favor

of Appellee for declaratory judgment on Counts III and V, deciding Appellee

is entitled to UIM benefits under both the Schmitt Auto Policy and Schmitt

Umbrella Policy.   However, the court did not address Counts IV and VI of

Appellee’s amended complaint regarding compensatory damages under the

Schmitt Auto Policy and Schmitt Umbrella Policy, respectively.

      As the trial court’s order appears to have resolved all of the claims for

declaratory relief, State Farm insists the appeal is properly before us under

Section 7532 and the Wickett line of cases. Nevertheless, our courts have

seemed to rely on Wickett and its progeny to decide an order is immediately

appealable in scenarios where a trial court’s order in a declaratory judgment

action either completely dismissed a defendant from the case, see, e.g.,

Wickett, supra

, or in the context of whether a duty to defend/indemnify

existed, and the underlying action could not go forward until resolution of the

declaratory judgment claims, see, e.g., 

Titeflex, supra

. Neither of those




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situations is similar to the instant case.1

       Rather, the procedural history of this case is nearly indistinguishable

from Bolmgren. Similar to the plaintiff in Bolmgren, Appellee’s amended

complaint sought ordinary civil relief and remedies in the form of a declaration

of coverage and damages. Like in Bolmgren, the court resolved Appellee’s

declaratory judgment claims upon the parties’ competing motions for

summary judgment. As well, the trial court left unresolved Appellee’s claims

related to damages.2 Under these circumstances, and in light of our well-

established policy of avoiding piecemeal litigation, we agree with Appellee that

State Farm’s appeal is interlocutory, and we quash the appeal. 3           See

____________________________________________


1 But see Pennsylvania Services Corp. v. Texas Eastern Transmission,
LP, 

98 A.3d 624

, 626 n.1 (Pa.Super. 2014), appeal denied, 

631 Pa. 749

, 

114 A.3d 1041

(addressing merits of appeal from declaratory judgment action
where non-declaratory judgment claims remained pending; noting that order
declaring rights of parties immediately appealable under Section 7532). In
Pennsylvania Services Corp., this Court did not conduct an analysis
regarding either the Bolmgren or Wickett lines of cases. Rather, this Court
merely stated in a footnote that the appeal was proper under Section 7532.
See

id. 2

The court’s determination that State Farm is liable for UIM benefits under
the Schmitt Policy and Schmitt Umbrella Policy rendered moot Appellee’s
alternative claim for relief in Count VII.

3    We recognize the Supreme Court’s statement in Pennsylvania
Manufacturers that “if the order in question merely narrows the scope of the
litigation and does not resolve the entirety of the parties’ eligibility for
declaratory relief, then the order is interlocutory and not immediately
appealable.” Pennsylvania Manufacturers, supra at 

91, 188 A.3d at 400

.
Nevertheless, the Court did not expressly comment on the present scenario
before us, where all declaratory judgment claims are resolved but non-



                                          - 15 -
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Bolmgren, supra

. See also 

Creswell, supra

; 

Moore, supra

.

       Appeal quashed. Panel jurisdiction is relinquished.

Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 1/11/21




____________________________________________


declaratory relief claims remain outstanding. We decline to extrapolate from
this statement, issued in the context of a different procedural posture than
the case before us, whether the Supreme Court intended to overrule the
Bolmgren line of cases.

                                          - 16 -

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