Porat, M. v. Temple University

J-A26032-22
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
DR. M. MOSHE PORAT : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
:
v. :
:
:
TEMPLE UNIVERSITY - OF THE :
COMMONWEALTH SYSTEM OF :
HIGHER EDUCATION AND :
RICHARD M. ENGLERT :
___________________________ :
DR. M. MOSHE PORAT :
:
:
v. :
:
:
TEMPLE UNIVERSITY - OF THE :
COMMONWEALTH SYSTEM OF :
HIGHER EDUCATION :
:
:
APPEAL OF: TEMPLE UNIVERSITY - :
OF THE COMMONWEALTH SYSTEM :
OF HIGHER EDUCATION : No. 2350 EDA 2021
Appeal from the Order Entered November 4, 2021
In the Court of Common Pleas of Philadelphia County Civil Division at
No(s): 190404754,
210401182
M. MOSHE PORAT : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
:
v. :
:
:
TEMPLE UNIVERSITY - OF THE :
COMMONWEALTH SYSTEM OF :
HIGHER EDUCATION :
:
Appellant : No. 1278 EDA 2022
J-A26032-22
Appeal from the Order Entered November 4, 2021
In the Court of Common Pleas of Philadelphia County Civil Division at
No(s): 210401182
BEFORE: BOWES, J., KING, J., and PELLEGRINI, J.*
MEMORANDUM BY PELLEGRINI, J.: FILED MARCH 16, 2023
Temple University - of the Commonwealth System of Higher Education
(Temple) appeals from the order entered in the Court of Common Pleas of
Philadelphia County (trial court) granting the motion for summary judgment
of M. Moshe Porat, Ph.D. (Dr. Porat) on his complaint for breach of contract
seeking injunctive relief. The complaint sought an order directing Temple to
advance his litigation expenses pursuant to its By-Laws. Temple argues that
it was entitled to discontinue payment of attorneys’ fees and expenses at its
sole discretion pursuant to an Affirmation and Undertaking (Undertaking)
between the parties and there is no independent requirement under the By-
laws to provide such advancement. We reverse and remand.
We take the following factual background and procedural history from
the trial court’s January 31, 2022 opinion and our independent review of the
certified record.
____________________________________________
* Retired Senior Judge assigned to the Superior Court.
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I.
A.
Dr. Porat was the Dean of Temple’s Fox School of Business (Fox School)
from 1996 to 2018. Pursuant to the Fox School By-Laws, Dr. Porat served as
its Chief Executive Officer and Chief Academic Officer. The U.S. News & World
Reports (USNWR) ranked the Fox School’s MBA program number one in the
country between 2015 and 2018.
In January 2018, Temple discovered that Dr. Porat and other Fox School
employees under his leadership had knowingly provided false information to
USNWR that resulted in the ranking for multiple years. After Temple notified
USNWR, Fox School lost its ranking and USNWR listed the program as
“unranked.” According to Dr. Porat, in January 2018, Attorney Michael
Schwartz (Attorney Schwartz) of Troutman Pepper was his “advisor.”
In February 2018, Temple retained the services of the law firm of Jones
Day to conduct a comprehensive review of Fox School’s rankings data and
processes. On July 9, 2018, Jones Day completed its investigation and
concluded that Fox School had intentionally submitted false information,
faulting Dr. Porat for his leadership failures. Temple President Richard M.
Englert immediately announced the removal of Dr. Porat from his position as
Dean of Fox School.
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B.
After the announcement, the Association of Advanced Collegiate Schools
of Business and the Pennsylvania Attorney General’s Office contacted Temple
to begin their own investigations. In response to requests for employee
interviews, Temple’s counsel provided approximately ten Fox School
employees, including Dr. Porat, with a draft Undertaking and Common
Interest/Joint Defense Agreement (JDA) providing legal representation for the
investigations.
On September 5, 2018, Attorney Schwartz contacted Temple’s counsel,
Attorney Catherine M. Recker (Attorney Recker), about his representation of
Dr. Porat. She described the substance of the Undertaking and JDA to him,
but he did not ask any questions about them, instead acknowledging Dr.
Porat’s willingness to sign. On September 7, 2021, Attorney Schwartz
requested a copy of the Undertaking and JDA so that he could discuss them
with Dr. Porat. On September 14, 2021, Attorney Schwartz was provided a
copy of the signed Undertaking.
The Undertaking memorialized, in pertinent part, that Dr. Porat
“retained. . . counsel to represent [him] in connection with matters related to
the. . . falsification of rankings data (the ‘Proceedings’),” that he was
requesting Temple advance him all reasonable attorneys’ fees and expenses
related thereto, that he would cooperate with the investigation and that he
acted honestly, in good faith and in a manner he reasonably believed was in
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Temple’s best interest at all times and without committing any malfeasance
or misfeasance. Pursuant to the Undertaking’s terms, Temple could
“discontinue the advancement of legal fees and expenses on [Dr. Porat’s]
behalf in its sole discretion and for any reason.” (Undertaking, at 1).1
On October 31, 2018, Attorney Schwartz sent Attorney Recker the first
invoice seeking advancement of fees and costs. Temple paid that and
subsequent invoices for legal services provided by Troutman Pepper, including
its January 2021 invoice. However, when Troutman Pepper sent the February
2021 invoice, Temple, for the first time, questioned payment. On March 14,
2021, Temple advised Attorney Schwartz that “Temple is evaluating all its
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1 As the United States Court of Appeals for the Third Circuit has observed:
Indemnification and advancement are related but distinct avenues
by which a business entity pays for an individual’s legal expenses.
In both, the corporation pays the legal expenses of the officer,
director, or other employee when that individual is accused of
wrongdoing in the course of performing duties to the corporation.
For indemnification, the corporation reimburses the individual for
his or her legal expenses once he or she has been successful in
the underlying proceeding on the merits or otherwise. For
advancement, on the other hand, the corporation pays legal
expenses on an ongoing basis in advance of the final disposition
of the lawsuit, provided that the individual must repay the amount
advanced if it turns out he or she is not entitled to be
indemnified—i.e., he or she is not successful on the merits or
otherwise in the underlying lawsuit.
Aleynikov v. Goldman Sachs Grp., Inc., 765 F.3d 350, 358-59 (3d Cir.
2014) (citations omitted).
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options” with respect to the advancement of Dr. Porat’s legal fees and costs
pursuant to the 2018 Undertaking. (Complaint, at ¶ 36); (Answer, at ¶ 36).
On March 23, 2021,2 another of Dr. Porat’s attorneys, Stephen G.
Harvey (Attorney Harvey),3 sent correspondence to Temple in which he
observed that Temple previously had paid Dr. Porat’s attorneys’ fees pursuant
to the Undertaking, under which Temple could stop payment at its discretion.
However, he requested an advancement of Dr. Porat’s legal fees and costs
pursuant to Section 8.4 of Temple’s By-Laws, which he contended foreclosed
Temple from not advancing counsel fees. Temple’s counsel responded that
Dr. Porat was not entitled to an advancement pursuant to the By-Laws
because he was not a trustee or officer of Temple and thus did not qualify as
a “representative” as defined in Section 8.1. On April 1, 2021, Temple notified
Dr. Porat that it was discontinuing the advancement of his legal fees under
the Undertaking effective April 9, 2021.
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2 On April 19, 2019, Dr. Porat filed a defamation action against Temple related
to the July 2018 announcement regarding his removal as Dean (Defamation
Action). On March 23, 2021, Dr. Porat filed a motion to stay the Defamation
Action pending resolution of the criminal action in which he stated that the
United States’ Attorney’s Office intended to criminally indict him. On April 16,
2021, Dr. Porat was indicted and charged with conspiracy and wire fraud. On
May 12, 2021, the trial court stayed the Defamation Action in its entirety
pending the outcome of Dr. Porat’s criminal case.
3 Attorney Harvey was retained to request the advancement of the attorneys’
fees and expenses denied Troutman Pepper. (See Harvey Correspondence,
3/23/21, at 1).
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C.
Dr. Porat filed a Complaint against Temple for breach of contract and
injunctive relief, arguing that it violated Article VIII of the By-Laws by
discontinuing the advancement of legal fees and costs related to litigation
stemming from his employment with Temple (the Advancement Action).
Temple filed an Answer, New Matter and Counterclaims in which it stated that
the monies were not owed under the terms of the Undertaking. It further
sought to recover the fees already advanced to Dr. Porat and other monies
expended due to his fraudulent actions (the Counterclaims). Dr. Porat filed a
motion to stay the Counterclaims filed by Temple seeking reimbursement until
the conclusion of the criminal matter, as well a motion for summary judgment
in the Advancement Action.
Then began a flurry of motions regarding whether Counterclaims filed
by Temple should be stayed. This resulted in a flurry of orders that are not
relevant except for the trial court’s order of October, 4, 2021 granting Dr.
Porat’s request to lift the stay of his Advancement Action claims and
maintaining the stay in his Defamation Action and Temple’s Counterclaims.
The trial court further ordered Temple to respond to Dr. Porat’s motion for
summary judgment in the Advancement Action within fifteen days.
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On October 14, 2021, Temple appealed the October 4, 2021 order,
arguing the stay order should be reviewed as a collateral order4 since it was
contrary to Pennsylvania law and the principles of fundamental fairness.
While its appeal was pending, Temple filed an answer to the motion for
summary judgment and on November 4, 2021, after a hearing, the trial court
granted Dr. Porat’s motion for summary judgment holding that he was entitled
to advancement of expenses for several alternative reasons. It noted that
under the provisions of Article VIII of the By-laws, officers and employees who
were representatives of Temple were entitled to advancement of fees for any
action brought against them while serving in those capacities. It went on to
find that he was a Temple officer while serving as Fox School Dean, or in the
alternative, he certainly was an officer of “another enterprise,” i.e., Fox
School.
It then ordered Temple to: (1) “pay the unreimbursed legal fees and
expenses incurred to date by Dr. Porat in the federal criminal action;” (2) pay
future invoices for Dr. Porat’s federal criminal defense in full unless Temple
found any portion to be unreasonable, in which case it was to pay the portions
it did not dispute; and (3) make reasonable attempts to resolve any disputes
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4 “A collateral order is an order separable from and collateral to the main cause
of action where the right involved is too important to be denied review and
the question presented is such that if review is postponed until final judgment
in the case, the claim will be irreparably lost.” Pa. R.A.P. 313(b).
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over the invoices’ reasonableness and to otherwise submit the disputes to a
master for resolution.5
Temple timely appealed the November 4, 2021 order and has complied
with the trial court’s order to file a statement of errors complained of on
appeal. See Pa. R.A.P. 1925(b). On December 8, 2021, this Court granted
Dr. Porat’s motion to quash Temple’s appeal of the October 4, 2021 order as
interlocutory.
On appeal, Temple challenges the trial court’s grant of summary
judgment on four bases: (1) the trial court lacked jurisdiction to rule on the
summary judgment motion because of the pending appeal of the October 4,
2021 order; (2) the court misinterpreted the University’s By-Laws by
concluding that Dr. Porat was an “officer” or “representative” entitled to
mandatory advancement; (3) the court erred as a matter of law in finding that
the Undertaking was not determinative of the parties’ rights and obligations;
and (4) the trial court erred in denying its request to take limited discovery
focused on the issues raised in Dr. Porat’s summary judgment motion.
____________________________________________
5On November 29, 2021, a federal jury convicted Dr. Porat of conspiracy and
wire fraud for his central role in the rankings scandal. On March 11, 2022,
Dr. Porat was sentenced to a term of fourteen months’ incarceration, three
years’ probation and a $250,000.00 fine. His appeal to the Third Circuit Court
of Appeals remains pending.
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II.
We begin with Temple’s challenge to the trial court’s jurisdiction to enter
the order on appeal. Citing to Wexford Science & Tech., LLC v. City of
Pittsburgh Zoning Bd. of Adjustment, 260 A.3d 316, 328 (Pa. Cmwlth.
2021) and Rule of Appellate Procedure 1701(c), Temple contends that the trial
court lacked jurisdiction to decide the motion for summary judgment while the
appeal of the court’s October 4, 2021 stay order was pending because the
remaining proceedings were “tightly intertwined” with the stay order.
Temple’s Brief at 52. Acknowledging that we quashed its appeal from that
order as interlocutory, Temple nonetheless argues that the trial court should
not have proceeded and was without jurisdiction to decide the summary
judgment motion.6
Rule 1701(a) directs as a general matter that “after an appeal is taken.
. . the trial court. . . may no longer proceed further in the matter.” Pa.R.A.P.
1701(a). However, Rule 1701(b) provides, in pertinent part, that after an
appeal is taken a court may “[p]roceed further in any matter in which a non-
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6 “As a general rule, only final orders are appealable, and final orders are
defined as orders disposing of all claims and all parties.” Am. Indep. Ins.
Co. v. E.S., 809 A.2d 388, 391 (Pa. Super. 2002); see also Pa. R.A.P. 341(a)
(“[A]n appeal may be taken as of right from any final order of a government
unit or trial court.”). Generally, we can only address the merits of an appeal
taken from “(a) a final order or an order certified as a final order; (2) an
interlocutory order [appealable] as of right; (3) an interlocutory order
[appealable] by permission; or (4) a collateral order.” Commerce Bank v.
Kessler, 46 A.3d 724, 728 (Pa. Super. 2012).
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appealable interlocutory order has been entered, notwithstanding the filing of
a notice of appeal. . . .” Pa. R.A.P. 1701(b)(6).7
Pursuant to Rule 1701(c), “when a party has appealed from a collateral
order, the trial court retains jurisdiction to continue to act on those parts of
the case that are unrelated to the collateral matter that is the subject of the
appeal.” Commonwealth v. McClure, 172 A.3d 668, 698-99 (Pa. Super.
2017) (emphasis added); see also Wexford, 260 A.3d at 328, n.7 (“But,
when the remaining proceedings in the trial court are ‘tightly intertwined’ with
the collateral matter that is on appeal, the trial court may not take any action
on those intertwined matters until the appeal is concluded.”) (quoting
McClure, 172 A.3d at 699).
We agree with the trial court that it had jurisdiction to consider Dr.
Porat’s motion for summary judgment pursuant to Rule 1706(b)(6) because
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7 Rule 1701(b) also provides the following exceptions, which are not argued
to be applicable here. The trial court may: (1) “[t]ake such action as may be
necessary to preserve the status quo, correct formal errors in papers relating
to the matter, cause the record to be transcribed, approved, filed and
transmitted, grant leave to appeal in forma pauperis, grant supersedeas, and
take other action permitted or required by these rules or otherwise ancillary
to the appeal or petition for review proceeding”; (2) “[e]nforce any order
entered in the matter, unless the effect of the order has been superseded. . .
.”; (3) grant reconsideration of the order which is the subject of the petition
if a timely motion for reconsideration is filed and the trial court enters a timely
order expressly granting reconsideration; (4) “[a]uthorize the taking of
depositions or the preservation of testimony where required in the interest of
justice”; and (5) “[t]ake any action directed or authorized by an appellate
court.” Pa. R.A.P. 1701(b)(1)-(5).
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the October 4, 2021 order was a non-appealable interlocutory order. The
order was not a collateral order pursuant to Rule 313, nor was it “tightly
intertwined” with the motion for summary judgment, rendering Wexford
inapplicable.
Temple also relies on Weise v. Goldman, 323 A.2d 31 (Pa. Super.
1974), for the proposition that the trial court was not permitted, in the first
instance, to decide if the October 4, 2021 order was interlocutory, thereby
allowing it to proceed pursuant to Rule 1701(b)(6). Weise was decided before
the enactment of Rule 1701(b)(6), and the subsequent case law has made
clear that a trial court is permitted to proceed if it determines that the order
is interlocutory, without the appellate court making such a ruling in the first
instance. See Mahonski v. Engel, 145 A.3d 175, n.3 (Pa. Super. 2016)
(“Although the trial court continued to resolve Appellants’ claims while an
appeal was pending in this Court, the trial court was not divested of its
jurisdiction upon the filing of this notice of appeal as Appellant sought review
of a non-appealable interlocutory order.”); Commonwealth v. Calloway,
675 A.2d 743, 747 (Pa. Super. 1996) (finding, pursuant to Rule 1701(b)(6),
that trial court had jurisdiction to enter an order after appeal from
interlocutory order had been filed).
Based on the foregoing, the trial court had jurisdiction to decide the
summary judgment issue after Temple appealed the interlocutory October 4,
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2021 order. We now turn to substantive arguments regarding Dr. Porat’s
counsel fees, which he contends were payable under Temple’s By-Laws.
III.
As a preliminary matter, we observe that non-profit corporations like
Temple are statutorily authorized to adopt by-laws providing for mandatory
advancement of litigation expenses for “representatives” who are sued for
alleged wrongful acts they deny. See 15 Pa.C.S. § 5745.8 An “[a]dvancement
action is a summary proceeding” in which the scope is limited to determining
“the issue of entitlement according to the corporation’s advancement
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8 The Associations Code provides:
Expenses (including attorneys’ fees) incurred in defending any
action or proceeding referred to in this subchapter may be paid by
a nonprofit corporation in advance of the final disposition of the
action or proceeding upon receipt of an undertaking by or on
behalf of the representative to repay the amount if it is
ultimately determined that he is not entitled to be indemnified by
the corporation as authorized in this subchapter or otherwise.
Except as otherwise provided in the bylaws, advancement of
expenses shall be authorized by the board of directors.
15 Pa.C.S. § 5745 (emphasis added). The Code defines “representative” as
follows:
When used with respect to an association, joint venture, trust or
other enterprise, a person occupying the position or discharging
the functions of a director, officer, partner, manager, trustee,
fiduciary, employee or agent, regardless of the name or title by
which the person may be designated. The term does not imply
that a director, as such, is an agent of a corporation.
15 Pa.C.S. § 102.
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provisions and not to issues regarding the movant’s alleged conduct in the
underlying litigation.” Kaung v. Cole Nat’l Corp., 884 A.2d 500, 509 (Del.
2005) (footnotes omitted).
In reviewing a trial court’s interpretation of by-laws, we “must use the
same rules applicable to the interpretation of statutes, contracts and other
written instruments.” Purcell v. Milton Hershey Sch. Alumni Ass’n., 884
A.2d 372, 379 n.10 (Pa. Cmwlth. 2005) (citation omitted).9 To interpret a
contract, “the entire contract should be read as a whole. . . to give effect to
its true purpose.” Commonwealth v. UPMC, 129 A.3d 441, 464 (Pa. 2015)
(citation omitted). It is well-settled that a contract “must be construed in
accordance with the terms of the agreement as manifestly expressed, and the
accepted and plain meaning of the language used, rather than the silent
intentions of the contracting parties, determines the construction to be given
the agreement.” Sw. Energy Prod. Co. v. Forest Res., LLC, 83 A.3d 177,
186 (Pa. Super. 2013) (citation omitted).
When construing agreements involving clear and unambiguous
terms, this Court need only examine the writing itself to give effect
to the parties’ understanding. This Court must construe the
contract only as written and may not modify the plain meaning
under the guise of interpretation.
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9“This Court is not bound by decisions of the Commonwealth Court. However,
such decisions provide persuasive authority, and we may turn to our
colleagues on the Commonwealth Court for guidance when appropriate.”
Petow v. Warehime, 996 A.2d 1083, 1089 (Pa. Super. 2010), appeal denied,
12 A.3d 371 (Pa. 2010) (citation omitted).
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Id. (citations omitted).
Furthermore, “a word used by the parties in one sense is to be
interpreted as employed in the same sense throughout the writing in the
absence of countervailing reasons such as thwarting the intent of the
government.” UPMC, 129 A.3d at 464 (citation omitted).
A.
Temple contends that the provisions of the By-Laws under which Dr.
Porat is seeking advancement of fees are not enforceable because the
Undertaking provided that Temple had the absolute discretion to discontinue
Dr. Porat’s advancement payments. It argues that the trial court’s order
renders the Undertaking a legal nullity.
Dr. Porat counters that the Undertaking is a separate agreement that
does not preclude a request for mandatory advancement of counsel fees under
Article VIII of the By-Laws. He asserts that the Undertaking granted Temple
the right to cease advancement paid pursuant to the Undertaking at its
discretion, but this did not include the right to deny payment to him under
Section 8.4 of the By-Laws. He maintains that the By-Laws mirror the
language of 15 Pa.C.S. § 5746(a) and speak directly to a situation in which an
individual has separate rights to advancement under more than one contract.
It is undisputed that the Undertaking provided Dr. Porat with “advance
reasonable and customary attorney’s fees and expenses associated with”
Attorney Schwartz’s representation in the Proceedings. (Undertaking, at 1).
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Pursuant to the Undertaking’s unambiguous terms, Dr. Porat “expressly
agreed and understood that the University may discontinue the advancement
of legal fees and expenses on [his] behalf in its sole discretion and for any
reason.” (Id.).
However, Section 8.5 of the By-Laws, titled “Supplementary Coverage,”
provides in pertinent part:
The indemnification and advancement of expenses provided by or
granted pursuant to this Article VIII shall not be deemed
exclusive of any other rights to which an individual seeking
indemnification or advancement of expenses may be
entitled under the Act or any bylaw, vote of the disinterested
Trustees, agreement or otherwise, both as to action in his or
her official capacity and as to action in another capacity while
holding that office.
(University By-Laws, at § 8.5) (emphases added);10 see 15 Pa.C.S. § 5746(a).
While the Undertaking was an agreement to advance counsel fees, the
trial court found that it was an additive remedy to the mandatory
advancements provided for under this provision of Temple’s By-Laws. This
conclusion is consistent with the By-Laws, which specifically state that an
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10 While we observe that Subsection (A) of Section 8.5 provides that no
indemnification may be made to a party to the extent “the act or failure to
act giving rise to the claim for indemnification is determined by a court to have
constituted self-dealing, willful misconduct, or recklessness[,]” as stated
previously, indemnification is paid after the conclusion of litigation, while the
advancement at issue here is paid on an ongoing basis while the litigation is
pending, with the understanding that the individual will pay the money back
if he is unsuccessful. See Aleynikov, 765 F.3d at 358. Therefore, subsection
A is not relevant to our review.
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individual’s mandatory right to advancement under the By-Laws is not
exclusive to any other right. In other words, the By-Laws specifically
contemplated that a party may have different advancement rights under more
than one agreement.
Pursuant to the Undertaking’s unambiguous terms, Temple could and
did cease paying advancement under the Undertaking at its discretion.
However, it was still required to comply with the equally unambiguous terms
of the By-Laws that required advancement if the individual was one of the
persons denominated as entitled to advancement and indemnification. We
agree with the trial court that just because Temple exercised its right to cease
payment under the Undertaking, it could not absolve itself of its duty to pay
advancement under Sections 8.4 and 8.5 of the By-Laws, which expressly
provided for advancement even if there are other sources from which counsel
fees could be advanced.
Next, we consider whether Dr. Porat was entitled to advancement of
counsel fees under Temple’s By-Laws.
B.
Several provisions of the University By-Laws govern the indemnification
and advancement of counsel fees. Section 8.2 of the By-Laws regarding
indemnification for third party and derivative actions provides:
The University shall indemnify any Trustee, officer, employee
or agent of the University who was or is a representative of
the University and who was or is a party (which includes giving
testimony or similar involvement) or is threatened to be made a
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party to any threatened, pending or completed action or
proceeding, whether civil, criminal, administrative or
investigative, formal or informal (including an action or
proceeding by or in the right of the University), by reason of the
fact that he or she was or is a representative of the
University, against expenses (including reasonable
attorneys’ fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him or her in
connection with the action or proceeding. If a representative is
not entitled to indemnification for a portion of any liabilities to
which he or she may be subject, the University nonetheless shall
indemnify him or her to the maximum extent permitted by law
and this Article for the remaining portion of the liabilities.
(University By-Laws, at § 8.2) (emphasis added).
Section 8.1 defines “representative” for the purposes of Article VIII:
[A]ny Trustee or officer of the University or an individual serving
at the request of the University as a director, officer, partner,
fiduciary, or trustee of another domestic or foreign corporation for
profit or not-for-profit, partnership, joint venture, trust, or other
enterprise.
(Id. at § 8.1).11
Section 8.4 specifically deals with the advancement of fees during the
pendency of the litigation of the covered party. It provides:
The University shall pay expenses (including reasonable attorneys’
fees) actually and reasonably incurred in defending any action or
proceeding referred to in Section 8.2 in advance of the final
disposition of the action or proceeding upon receipt of any
undertaking by or on behalf of the representative to repay the
amount if it is ultimately determined that he or she is not entitled
to be indemnified by the University as authorized in this Article
VIII or otherwise.
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11This definition of “representative” is much more limited than the definition
contained in the Associations Code. See footnote 8, infra.
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(Id. at § 8.4) (emphasis added).
Temple first contends that Dr. Porat is not entitled to advancement of
counsel fees under the University By-Laws because those provisions only
apply to high-ranking officers listed in Section 7.1 of the By-Laws.12 It
acknowledges that the Board may appoint other officers, but argues there is
no evidence that the Fox School Dean was a position with “officer” status or
that Dr. Porat was otherwise made a University officer.
We agree that the trial court erred in finding that Dr. Porat was a Temple
officer entitled to advancement of counsel fees. Because the definition of
“officer” provided in Section 7.1 applies to Section 8.1, and Dr. Porat is not
the “Chair of the Board, a Vice-Chair of the Board, a President, a Secretary[,]
a Treasurer[,]. . . Vice President[], a Provost, [or] a University Counsel,” he
is not a defined officer of Temple entitled to advancement of fees. “Dean” is
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12 Section 7.1 of the University By-Laws provides that:
The officers of the University shall include a Chair of the Board, a
Vice-Chair of the Board, a President, a Secretary and a Treasurer.
The officers also may include one or more Vice Presidents, a
Provost, a University Counsel, one or more Assistant Secretaries,
one or more Associate or Assistant Treasurers, and such other
officers as the Board may determine from time to time. The same
person may hold any number of offices. Except as otherwise
provided in these Bylaws, the Board may appoint officers at any
meeting of the Board. Except for the Chair and Vice-Chair of the
Board and the President, upon appointment by the Board, all
officers shall serve at the pleasure of the President, subject to
consultation with the Board.
(University By-Laws, at § 7.1).
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simply not one of the enumerated positions set forth in the University By-
Laws. While the Board is entitled to denominate other positions or individuals
as “officers,” there is nothing in the record that reflects the Board did so in
this instance. The trial court erred in holding that Dr. Porat was entitled to
advancement of fees based on its incorrect conclusion that he was an “officer”
within the meaning of Section 8.2.
However, that does not end our inquiry. The trial court alternatively
found that Dr. Porat, as Dean, was a “representative” under Section 8.1
because even “if Dr. Porat was not an officer of the University. . . he would be
an officer of ‘another enterprise’, that being Fox School of Business.” (Trial Ct.
Op., 1/31/22, at 15). Even assuming that Dr. Porat is a Temple employee,
who served as Fox School Dean at the request the University, and that the
Fox School is an “enterprise,”13 Dr. Porat still does not meet the requirements
of Section 8.1 to be a “representative.” Under that section, Fox School must
be an “other enterprise,” separate and apart from the University.14 (University
By-Laws, at § 8.1).
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13Black’s Law Dictionary defines “enterprise” as “[a]n organization or venture,
esp. for business purposes.” See Enterprise, Black’s Law Dictionary (11th ed.
2019).
14 Fox School has its own By-Laws that mainly involve the manner in which
the University consults with the Fox School faculty, participates and is
consulted about the affairs of the Fox School. The Fox School’s By-Laws were
originally approved by the President in 2002, and in 2019, were revised and
approved by an assembly of Fox School faculty members. Temple does not
(Footnote Continued Next Page)
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The types of organizations denominated under Section 8.1 all involve a
separate governing structure from that of the University, namely, “another
domestic or foreign corporation for profit or not-for-profit, partnership, joint
venture, trust, or other enterprise.” (University By-Laws, at § 8.1). The
individual serving is not serving as a director, officer, trustee or fiduciary of
the University but is serving as an officer, trustee or fiduciary of another,
different organization. For example, an employee serving as a “director” or
“trustee” of “another” for-profit or non-profit board would have to be
nominated to the board of that organization in accordance with its articles of
incorporation or by-laws. Similarly, an “officer” would have to be appointed
according to the by-laws of that for-profit or non-profit. As to “enterprise,”
____________________________________________
suggest those By-laws were not validly promulgated or that the President does
not have the power to appoint the Dean. If a Fox School By-Law or action
pursuant to those By-Laws conflicts with University Policies, by-laws and
collective bargaining agreements, the By-Law or action is superseded.
“University Policies” refers to any action taken by the Temple University Board
of Trustees or the President of Temple University. (See generally Fox School
By-Laws, Article I).
Regarding Fox School governance, the By-Laws provide that the University
President “appoints the Dean of the Fox School. . . in conformance with such
Dean Search Guidelines as the President may from time to time promulgate.”
(Id., Article II.C). The Dean is accountable to the President and must follow
all University Policies and directions. (Id., Article II.D). The Dean of the Fox
School is its chief executive officer and the chief academic officer and is
responsible for supervising the budget and administration pursuant to
University Policies. (Id., Article II.E, F & H). The Dean also may appoint,
subject to University Policies, associate deans, assistant deans, and other
academic and administrative personnel. (Id., Article II.H).
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which is the catchall of business organizations, the individual serving in some
fiduciary capacity is governed by the internal or contractual rules under which
that enterprise operates. In all cases, they are not the articles, by-laws, or
internal or contractual rules of Temple.
What is clear, then, is that as Dean of the Fox School, Dr. Porat is not
serving some “other enterprise.” Fox School is not separate and apart from
Temple, but is merely one of its constituent parts that is, per its own by-laws,
subject to the direction and control of the President and Board of Trustees of
the University. Accordingly, Dr. Porat does not fall within any of terms under
the definition of “representative” in Section 8.1 and is not entitled to
advancement of costs under Section 8.2.15
Order reversed. Case remanded. Jurisdiction relinquished.
____________________________________________
15 Temple also argues that Dr. Porat’s federal court conviction requires that
he pay back any money advanced to him. The trial court did not address the
University’s entitlement to recapture counsel fees when it granted summary
judgment, having stayed Temple’s counterclaim seeking reimbursement. This
issue is waived on appeal because Temple failed to raise the issue of the
propriety of the trial court staying of that counterclaim in its Rule 1925(b)
statement. Even if it had raised that issue and we decided it in its favor, the
result would be the same as the result here - remanding the case to consider
Temple’s counterclaim. Temple also claims that the trial court erred in
prematurely granting summary judgment without allowing necessary
discovery. We need not address that issue because of the way we have
resolved this appeal.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 3/16/2023
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