Elizabeth Milling Co. v. Andrews, R.

J-A07036-16; J-A07037-16

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

ELIZABETH MILLING COMPANY, LLC, IN THE SUPERIOR COURT OF
SMITHDON, L.P. A PENNSYLVANIA PENNSYLVANIA
LIMITED PARTNERSHIP, AND MIKE
ADAMS

v.

ROBERT N. ANDREWS AND SANDRA H.
ANDREWS

APPEAL OF: ROBERT N. ANDREWS

No. 599 WDA 2015

Appeal from the Order April 2, 2015
In the Court of Common Pleas of Allegheny County
Civil Division at No(s): GD-13-017997

ELIZABETH MILLING COMPANY, LLC, IN THE SUPERIOR COURT OF
SMITHDON, L.P. A PENNSYLVANIA PENNSYLVANIA
LIMITED PARTNERSHIP, AND MIKE
ADAMS

v.

ROBERT N. ANDREWS AND SANDRA H.
ANDREWS
Appellants
No. 622 WDA 2015

Appeal from the Order April 2, 2015
In the Court of Common Pleas of Allegheny County
Civil Division at No(s): GD-13-017997
J-A07036-16; J-A07037-16

ELIZABETH MILLING COMPANY, LLC, IN THE SUPERIOR COURT
SMITHDON, L.P. A PENNSYLVANIA OF
LIMITED PARTNERSHIP, AND MIKE PENNSYLVANIA
ADAMS

Appellant

v.

ROBERT N. ANDREWS AND SANDRA H.
ANDREWS

No. 650 WDA 2015
651 WDA 2015
Appeal from the Order Entered April 2, 2015
In the Court of Common Pleas of Allegheny County
Civil Division at No(s): GD 13-017997

BEFORE: BOWES, J., MUNDY, J., and JENKINS, J.

MEMORANDUM BY JENKINS, J.: FILED JULY 15, 2016

Following a trial, a jury found Robert Andrews breached an asset

purchase agreement and awarded Elizabeth Milling Company, LLC and Mike

Adams (collectively, together with Smithdon, L.P., “Adams”) $400,000.00.

The jury also found Adams breached a land installment contract, which the

parties had entered at the same time as the asset purchase agreement and

which required Adams to pay monthly installments to Robert and Sandra

Andrews. The trial court ordered the land returned to the Andrews, that the

$167,000.00 held in escrow be delivered to the Andrews, and that Adams

pay an additional $252,983.36 for the sums due under the land installment

contract. The trial court did not award the Andrews counsel fees following

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the breach of the land installment contract.1 After consideration of various

post-trial motions, the trial court granted Adams a new trial on damages.

Both parties filed notices of appeal. We affirm the order granting a new trial

as to damages and denying the remaining post-trial motions. We reverse

the order addressing the motion for payment of escrow account funds to

defendants and payment by plaintiffs of all outstanding sums due to

defendant pursuant to the land installment contract to the extent it denied

the request for reasonable attorney fees. We affirm the order addressing

the motion for payment of all outstanding sums in all other respects. We

will remand to the trial court for proceedings consistent with this opinion.

The trial court set forth the factual background as follows:

This case grows out of an asset purchase agreement
(“APA”) entered into on September 19, 2011 between the
Plaintiff, Elizabeth Milling Company, [LLC, (a limited
liability company organized by Plaintiff[] Mike Adams,)]
and the Defendant, Robert Andrews, the sole proprietor of
a business operating as Elizabeth Milling Company.
Elizabeth Milling Company (“EMC”) packages and sells ice
melt products in bags and buckets for use on sidewalks
and driveways. Pursuant to the agreement, Elizabeth
Milling Company, LLC (“[EMC] LLC”) purchased the assets
of EMC including goodwill, equipment, and inventory. The
agreement was signed by Adams as sole member of EMC
LLC and by Andrews as sole proprietor of EMC. The
Defendant, Sandra Andrews, did not sign the APA.

The business of EMC was conducted on two pieces of real
estate, one in Smithton, PA and one in Donora, PA. The
____________________________________________

1
The jury also found Adams breached a contract to purchase inventory from
Andrews and awarded $718,985.90 in damages for this breach.

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J-A07036-16; J-A07037-16

Plaintiff, SmithDon, a limited partnership organized by
Adams, and Defendants, Robert Andrews and Sandra
Andrews[,] entered into a real estate installment land
contract whereby SmithDon agreed to buy and the
Andrews agreed to sell the Smithton and Donora premises
for $1,340,000.00 payable over ten years at 6 percent
interest resulting in payments of $14,000.00 per month.

Following the closing on the transaction on September 19,
2011, sales of EMC’s products collapsed for both the 2011-
2012 and 2012-2013 winter seasons. The parties contest
the cause of this sales collapse. [Andrews] assert[s] that
the local area experienced the warmest winter in 40 years
and the fourth mildest winter on record in 2011-2012
thereby undermining the need for the purchase of salt
product by the public. [Adams] assert[s] that EMC’s
primary customer ceased making purchases from EMC
because of the availability of similar product at more
competitive pricing and superior servicing levels from a
local competitor. [Adams] asserts that [Andrews] failed to
disclose the existence of this competitor and/or its
competitive advantages before the closing on the sale.[2]

Opinion, 7/24/2015, at 2-3 (hereinafter “1925(a) Opinion”).

Adams filed a complaint against Robert and Sandra Andrews, which

was later amended. The amended complaint alleged a breach of contract

claim, a fraudulent inducement claim, a rescission claim, a negligent

misrepresentation claim, and a tortious interference claim. Amended

Complaint at ¶¶ 30-92. Robert and Sandra Andrews filed counterclaims.

Robert Andrews filed a counterclaim for breach of the APA and a conversion

counterclaim for failure to pay the balance due for the purchase of inventory,

and Sandra and Robert Andrews filed a breach of the land installment
____________________________________________

2
Adams also alleged Andrews submitted false information on tax returns.

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contract counterclaim.3 Answer to Amended Complaint and New Matter at

¶¶ 101-142.

Prior to trial, the trial court granted summary judgment in favor of

Sandra Andrews and dismissed the amended complaint with prejudice as to

her alone. Order, 1/13/2015. In addition, the trial court granted Robert

Andrews’ motion for summary judgment as to the negligent

misrepresentation claim and the tortious interference claim. Order,

1/14/2015. It deferred a ruling as to the rescission claim. Id. The trial

court denied summary judgment as to the breach of contract and fraudulent

inducement claims. Id.

Following a trial, the jury found Andrews breached the full disclosure

provision of Section 4.10 of the APA;4 found Adams suffered damages in the
____________________________________________

3
Sandra and Robert Andrews also filed actions in ejectment, in
Westmoreland and Washington Counties, to recover possession of the real
estate. Adams filed motions to stay the actions in ejectment. The actions
were stayed, with a condition that Adams pay into an escrow account the
monthly amount due.
4
Section 4.10 of the APA provides:

Full Disclosure: Neither this Agreement, nor any
schedule, exhibit, list, certificate or other instrument or
document delivered to Buyer pursuant to this Agreement
by or on behalf of Seller, contains any untrue statement of
a material fact or omits to state any material fact required
to be stated herein or therein or necessary to make the
statement, representations, or warranties and information
contained herein or therein not misleading. Seller has not
withheld from Buyer disclosure of any event, condition, or
fact which Seller knows, or has reasonable ground to
(Footnote Continued Next Page)

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amount of $400,000.00 as a result of the breach; and found Andrews did not

intentionally or with reckless indifference make untrue statements of

material fact or omit disclosure of a material fact in order to fraudulently

induce Adams to purchase the business. The jury further found Adams

breached the land installment contract and breached the contract to

purchase inventory. The jury awarded Andrews $718,985.90 for the breach

of the contract to purchase inventory. As agreed to by the parties, the trial

court issued orders as to the damages resulting from the breach of the land

installment contract. The court ordered the land be returned to Robert and

Sandra Andrews, that money being held in escrow be paid to the Andrews,

and that the additional payments due under the contract be paid to the

Andrews. Order, 3/10/2015; Order, 4/2/2015.

Adams raises the following issues on appeal:

A. Whether the court is empowered to mold the verdict to
add damages for breach of contract to make the record
accord with the uncontroverted facts and the verdict speak
the truth[?]

B. Whether [Adams is] entitled to a new trial based upon
an erroneous verdict slip and special jury interrogatories[?]

C. Whether [Adams is] entitled to a new trial on damages
on grounds that the trial court erred in charging the jury
on mitigation[?]

_______________________
(Footnote Continued)

know, may materially adversely affect the Purchased
Assets or the operations of the business.

Plaintiff’s Amended Complaint, at Exh. A., Asset Purchase Agreement at 5.

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D. Whether the trial court erred in granting summary
judgment in favor of defendant Sandra Andrews and
dismissing her as a defendant with respect to [Adams’]
claims[?]

E. Whether the trial court erred in ordering return of
escrow payments and sums due under the land installment
[contract] and/or refusing [Adams’] cross motion or
maintaining the status quo ante pending appeal[?]

Adams’ Appellant Brief at 4 (unnecessary capitalization omitted).

Andrews raises the following issues on appeal:

1. Where liability and damages were hotly contested, the
court made no error of law, fact or discretion at trial and
there is clear evidence that the jury verdict was a
compromise which the trial judge failed to analyze, did the
judge commit an error of law by granting a new trial as to
damages?

2. Where there are rational explanations for the jury’s
calculation of the damages awarded to [Adams], did the
trial judge commit an error of law by granting a new trial
as to damages without considering those rational
explanations?

3. Where the contract provided for an award of attorney
fees to the party prevailing in effort to enforce the
contract, did the judge commit an error of law in refusing
to award attorney fees to [the Andrews] who prevailed on
their breach of contract counterclaim.

Andrews’ Appellant Brief at 3.

A. Damages

The parties first dispute whether the trial court erred when it ordered a

new trial on the issue of damages and whether the trial court erred in

refusing to mold the verdict.

Damages in a breach of contract action should place the aggrieved

party “as nearly as possible in the same position [it] would have occupied

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J-A07036-16; J-A07037-16

had there been no breach.” Ely v. Susquehanna Aquacultures, Inc., 130

A.3d 6, 10 (Pa.Super.2015) (quoting Helpin v. Trustees of Univ. of

Pennsylvania, 10 A.3d 267, 270 (Pa.2010)). An aggrieved party may

recover all damages, provided “(1) they were such as would naturally and

ordinarily result from the breach, or (2) they were reasonably foreseeable

and within the contemplation of the parties at the time they made the

contract, and (3) they can be proved with reasonable certainty.” Id.

(quoting Helpin, 10 A.3d at 270). Further, “a party who suffers a loss due

to the breach of a contract has the duty to make reasonable efforts to

mitigate his losses.” Portside Investors, L.P. v. N. Ins. Co. of N.Y., 41

A.3d 1, 15 (Pa.Super.2011) (quoting Bafile v. Borough of Muncy, 588

A.2d 462 (Pa.1991)). “The burden to prove this duty to mitigate is placed

on the party who actually breaches the contract; the breaching party must

show how further loss could have been avoided through the reasonable

efforts of the injured party.” Id. (quoting Pontiere v. James Dinert, Inc.,

426 Pa.Super. 576, 627 A.2d 1204 (1993)).

The trial court provided the following reasoning for granting a new trial

as to damages:

Following trial, the parties filed post-trial motions.
[Adams’] principal argument in post[-]trial motions was
that the jury’s determination that Adams suffered only
$400,000.00 in damages as a result of Andrews’ breach of
the APA bore no reasonable relationship to the actual
damages suffered, and was not supported by the evidence
presented at trial. [Adams] assert[s] that the jury was
presented with undisputed evidence that [Adams]
purchased EMC on September 19, 2011 upon payment of

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$400,000.00 “cash” hand money and $2,300,000.00 in
proceeds from the loan from Dollar Bank and promissory
note signed by Adams in the amount $200,000.00.
Additionally, [Adams] incurred additional debt by way of
$1,000,000.00 line of credit and a $100,000.00 bridge
loan in order consummate the transaction. All of the debt
and loans described above were guaranteed and
collateralized by property owned by Adams. Adams
presented testimony which did not appear to be materially
rebutted by Andrews that nearly all of the above cash and
debt was expended in an effort to maintain the business.
As such, [Adams] contends that these monies are proper
damages as they were lost as a result of Andrews’ breach
of the APA.

Specifically, Adams asserted that his actual losses included
the $400,000.00 hand money paid at closing, the balance
due on the term loan from Dollar Bank in the amount of
$2,069,008.00, the line of credit balance in the amount of
$980,000.00, and the bridge loan in the amount of
$100,000.00 for a total of $3,540,008.00. These sums
were asserted as items of direct and consequential loss
suffered by [Adams]. Additionally, Adams testified that he
failed to receive his scheduled $180,000.00 per year salary
from September, 2011 through January, 2015 (Adams did
receive $98,357.00 in salary during that time frame,
resulting in a deficiency of $506,643.00). While perhaps
not directly relevant to his asserted damages, Adams
presented evidence that he was compelled to withdraw
from his retirement account in the amount of $317,336.00
and that when he left his law practice he earned
approximately $220,000.00 per year. Adding Adams’s
business financing losses to his lost salary revenue, results
in a total direct and consequential damages claim in the
amount of $4,046,651.00.

The testimony and evidence presented at trial as to these
issues was materially unchallenged except to the extent
that Andrews proposed that some of Adams’s losses were
not a function of Andrews’s breach of the contract, but
rather Adams’s mismanagement of EMC after Adams
purchased it, and/or as a natural consequence of
dramatically warmer winters and its impact upon
customers’ demand of EMC’s ice melt products. Andrews’s
arguments in this respect are not lost on the [c]ourt. It is

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for this reason that the [c]ourt did not grant [Adams’s]
Motion to Mold the Verdict to reflect damages in the
amount of $4,046,651.00. While Adams has established a
prima facie case for breach of contract damages in that
amount, Andrews is entitled to a set-off for any diminution
in value of the business as a result of the then-
unanticipated unseasonably warm winters of 2011-2012
and 2012-2013 (if any) and/or consequences of Adams’s
mismanagement of the business (if any) that the jury
concludes affected the value of EMC.

Frankly, I cannot do more than guess as to how the jury
might calculate, or otherwise arrive at, a quantification of
diminution in the value of the EMC business with respect to
these issues. Given the evidence presented at trial many
different calculations could be made resulting in a great
many possible final damages awards. In order to sustain
the jury’s verdict in this case, however, I would have to
conclude that the jury properly found that Adams’s claimed
losses of $4,046,651.00 should be reduced by exactly
$3,646,651.00 – in order to arrive at the $400,000.00
verdict award that jury did. It is entirely conceivable that
the jury might have selected that number, $3,646,651.00,
as a set-off diminution in the value of the business caused
by natural seasonal fluctuation in sales or Adams’
mismanagement (if any), just as it might have selected
any one of many other numbers from $0.00 to
$4,046,651.00 as an appropriate set-off. But what is
remarkable, and in my judgment coincidental to the point
of unacceptable improbability, is that when one subtracts
$3,646,651.00 from Adams’s claimed $4,046,651.00 in
damages, to arrive at a damages value of $400,000.00
one also, coincidentally, arrives at the precise amount of
money that Adams provided as hand money at the time of
closing. This personal “cash” contribution at the time of
closing, standing alone, bears absolutely no reasonable
relationship to Adams’s actual damages in this case. The
jury could not have properly arrived at the conclusion that
Adams’s hand money at closing was the appropriate
measure of damages yet it appears that is exactly what
the jury did, and this [c]ourt cannot countenance such a
suggestion. In order to sustain the jury’s verdict, the
[c]ourt would have to conclude that the jury determine
that the actual value of the EMC business was properly

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reduced because of either unseasonably warm weather
and/or by Adams’ mismanagement by exactly
$3,646,651.00, thereby resulting in a damage award of
$400,000 - an amount that is, purely coincidentally, the
identical amount of Adams’ hand money at closing.

While it is not the prerogative of this [c]ourt to second-
guess the judgment of a jury, where it is evident to the
[c]ourt that the jury mistook its responsibility or
misapplied the law, it is the obligation of this [c]ourt to
attempt to rectify that error. It is plain to this [c]ourt that
the jury, while undoubtedly doing its very best to arrive at
an appropriate damages calculation in a fairly complicated
business transaction, somehow determined that Adams
was entitled only to his $400,000.00 hand money payment
at closing as a result of Andrews’ breach of contract.

Accordingly, the only reasonable interpretation of the
jury’s $400,000.00 award is that the jury misapplied the
law with respect to contract damages and awarded Adams
only the hand money he delivered to Andrews at closing
and ignored the other items recoverable by Adams as a
result of Andrews’ breach of the APA.

[Andrews] argues that compromise verdicts are a reality of
litigation and are not only tolerated, but, at times,
condoned by the [c]ourts. There is, however, in this case,
no actual evidence or reason to believe that the jury’s
verdict constituted a “compromise” verdict of any kind.
We have no insight at all into the thinking of the jury. To
the extent we can make any guess, we can look only to
the available evidence presented at trial and observe that
the jury’s verdict, coincidentally, happens to be identical to
the amount of hand money paid by Adams at the time of
closing. Moreover, while “compromise verdicts” are
tolerated by the [c]ourt, they are more appropriately
tolerated only in personal injury claims where damage
valuations are necessarily less objectively quantifiable. In
a breach of contract case, it is the obligation of the fact
finder to make a reasoned assessment of the evidence
supporting quantifiable damages presented at trial. It is
evident to the undersigned that such did not occur in this
case. As a result, the verdict shocks the court’s
conscience, and a new trial as to damages is warranted.

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1925(a) Opinion at 5-9.

We first address Andrews’ claim that the trial court erred in awarding a

new trial for damages. This Court has stated the following regarding our

standard of review of an order granting a new trial:

Trial courts have broad discretion to grant or deny a new
trial. The grant of a new trial is an effective
instrumentality for seeking and achieving justice in those
instances where the original trial, because of taint,
unfairness or error, produces something other than a just
and fair result, which, after all, is the primary goal of all
legal proceedings. Although all new trial orders are subject
to appellate review, it is well-established law that, absent a
clear abuse of discretion by the trial court, appellate courts
must not interfere with the trial court’s authority to grant
or deny a new trial.

Harmon v. Borah, 756 A.2d 1116, 1121-22 (Pa.Super.2000) (internal

citations and quotation marks omitted).

Andrews argues that the jury was permitted to reach a compromise

verdict in this case. Andrew’s Appellant Brief at 22-23.

“Compromise verdicts are verdicts where the fact-finder is in doubt as

to the defendant’s liability vis-à-vis the plaintiff’s actions in a given suit but,

nevertheless, returns a verdict for the plaintiff in a lesser amount than it

would have if it was free from doubt.” Morin v. Brassington, 871 A.2d

844, 852-53 (Pa.Super.2005).

Compromise verdicts are most common in personal injury verdicts.

See Morin, 871 A.2d at 853. Andrews, however, argues compromise

verdicts are also permissible in contract cases. He relies on Morin, which

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applied the compromise verdict law to a contract case. In Morin, the

parties entered into a contract in which the plaintiff would work for the

defendant at the defendant’s sporting goods store. 871 A.2d at 847. In

return for managing the store, the defendant would pay the plaintiff when

the defendant retired from his other job. Id. The plaintiff alleged the

defendant breached the contract because he failed to pay him. Id. The trial

court found the defendant breached the contract, but did not award all

damages sought. Id. at 847-48. The plaintiff alleged he worked 40 hours a

week for 52 weeks a year, for 11 years, with no time off. Id. at 852. The

trial court awarded damages for 30 hours per week, for 48 weeks per year.

Id. This Court affirmed the verdict, stating:

The trial court was able to ascertain the fact of damages
from the evidence presented in this case but not the exact
amount of damages. It was certain from the evidence
presented at trial that Morin used a substantial portion of
his time working at Brassington’s store throughout the
11[-]year period. However, given the nature of their work
relationship, Morin’s work hours were not supervised or
recorded in a typical fashion, and, consequently, they were
not susceptible of being proven with any degree of
exactitude. Therefore, drawing reasonable inferences from
the evidence presented, the trial court arrived at an
intelligent estimate of the damages suffered by Morin as a
result of Brassington’s breach of the oral contract. This
action was proper, inasmuch as the trial court could not
fully credit the testimony of Morin, who claimed that he
worked continuously for Brassington for 11 years without
time off. See, e.g., J.W.S. Delavau, Inc. [v. Eastern
Am. Trans. & Warehousing, Inc.], 810 A.2d [672,] 685-
86 [Pa.Super.2002]; see also [Frank Burns, Inc. v.]
Interdigital Comm. Corp., 704 A.2d [678,] 682
[Pa.Super.1997]; see generally Spang & Co. v. U.S.
Steel Corp., []545 A.2d 861 ([Pa.]1988) (discussing

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broad discretion of trial court to fashion fair estimate of
damages in contract cases where specific amount of
damages cannot be determined accurately). Thus, we are
satisfied that the trial court did not abuse its discretion.

Morin, 871 A.2d at 853 (emphasis deleted).

Andrews also relies on Campana v. Alpha Broad. Co., 361 A.2d 708

(Pa.Super.1976) and O’Neill v. Atlas Auto Fin. Corp., 11 A.2d 782, 783

(Pa.Super.1940). Campana upheld a compromise verdict where the

appellant breached an employment contract and the jury awarded the

appellee half the amount he requested. 361 A.2d at 710. The court ruled

that the verdict was not unreasonably low and also noted that the appellant,

not the appellee, challenged the amount. Id. The court also noted that

whether appellee could have earned more money, i.e., done more to

mitigate his damages, was in dispute. Id. Similarly, O’Neill involved a

contract for professional services where this Court found the jury properly

reached a compromise verdict, reasoning:

An examination of the record discloses a number of
conflicts in the evidence bearing upon these issues, but it
also discloses that plaintiffs adduced sufficient competent
evidence to take each issue to the jury. They were
submitted in a manner concerning which no complaint is
made in the assignments. The verdict was evidently a
compromise over the inclusion or rejection of certain items
claimed by plaintiffs and the reasonableness of some of
their charges, but the matters at issue were exclusively for
determination by the jury. We find no error upon this
record which would justify the granting of a new trial with
respect to these items.

O’Neill, 11 A.2d at 783.

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This Court recently issued a decision in Ely v. Susquehanna

Aquacultures, Inc., 130 A.3d 6 (Pa.Super.2015). In Ely, the plaintiff

signed a two-year employment contract with the defendant to serve as the

defendant’s vice president. Id. at 9. The defendant terminated the plaintiff

mid-contract, and paid no further wages or benefits. Id. The jury found the

defendant breached the employment contract and found the plaintiff

mitigated his damages, but awarded less than the amount of wages minus

the mitigation. Id. at 10. This Court upheld the compromise verdict,

reasoning:

[The plaintiff] argues that [the defendants] did not offer
evidence to contradict his $79,539.83 in alleged damages.
Therefore, according to [the plaintiff], the jury was
required to award that amount upon finding [the
defendant] in breach of the employment contract. [The
plaintiff] argues the lesser amount does not put him in the
position he would have been in absent the breach, in
accordance with Helpin. Given the state of the record,
however, we cannot conclude the jury’s compromise
verdict constitutes an injustice that “stands forth like a
beacon.” Frank Burns, Inc., 704 A.2d at 682. Isolano
described several significant and costly mistakes that
occurred at [the defendant] under [the plaintiff’s]
management. Possibly, the jury issued a compromise
verdict based on its belief that [the plaintiff’s] mistakes did
not warrant termination but did warrant a lesser damages
award in his favor. Compromise verdicts, as we noted
above, are favored in the law. We discern no basis for
disturbing the jury’s verdict in this case.

Id. at 13.

Unlike Ely and the cases relied on by Andrews, which involved services

performed or employment contracts, here the contract in dispute was for the

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purchase of a business. In the cases relied on, there was a dispute about

the services performed, or the hours worked. Here, the jury found Appellee

breached the APA by breaching the full disclosure provision. This caused

Adams to purchase a business he would not have purchased, or to purchase

a business for more money than he would have paid if the breach had not

occurred.

Further, unlike the cases relied on by Andrews, here there is no

quantifiable explanation for the jury’s verdict. The jury properly could have

concluded that Adams would have purchased the company, for a lesser

price, even if he had known the information Andrews failed to disclose. The

jury could have determined that any damages amount should have been

reduced based on evidence of the unseasonably warm winters or Adams’

alleged mismanagement. In addition, the jury was not required to award all

alleged consequential damages. The “compromise” reached by the jury,

however, was not based on any damages evidence presented. Rather, as

the trial court explained, it is “coincidential to the point of unacceptable

improbability” that the jury used the evidence presented to determine that

Adams would have suffered $400,000.00 in damages, which also equals the

amount Adams paid in cash at the time of closing. It is not possible to

reconcile the damages evidence presented with the jury’s $400,000.00

damages award. Applying the abuse of discretion standard applied to orders

granting a new trial, we find the trial court acted within its discretion and did

not err in granting a new trial as to damages.

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Adams argues that, rather than granting a new trial as to damages,

the trial court should have molded the verdict and awarded the

$4,046,651.00 in damages sought by him.

A trial judge has the power to mold a verdict. Krock v. Chroust, 478

A.2d 1376, 1380 (Pa.Super.1984) (citing Fish v. Gosnell, 463 A.2d 1042

(Pa.Super.1983)). The power, however, is limited:

[T]he verdict to be molded must manifest a clear intent on
the part of the jury. Where the intention of the jury is far
from obvious, the verdict should be returned to the jury for
further deliberations or a new trial should be granted.
House of Pasta, Inc. v. Mayo, []449 A.2d 697, 701
([Pa.Super.]1982). “The power to mold or more precisely
amend a jury’s verdict is merely a power to ‘make the
record accord with the facts, or to cause the verdict to
speak the truth.’” Id. quoting Standard Pennsylvania
Practice (Rev.Ed.) Ch. 27, § 72. If the trial judge must
assume facts which cannot be discerned from the verdict,
then the verdict should not be molded. May v. Pittsburgh
Railways Co., [] 224 A.2d 770, 772 ([Pa.Super.]1966).

Id.

Here, Adams presented evidence to support a damage calculation that

would place him in the position he occupied before entering the contract.

However, the jury could have determined that Adams would have entered

the contract, but paid less for the business, or could have reduced the

damages award based on the unseasonably warm weather or the alleged

mismanagement. Further, the jury was not required to believe that Adams

suffered all the consequential damages he claimed resulted from the breach.

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The trial court, therefore, did not have sufficient facts to determine what the

jury decided, and did not abuse its discretion in refusing to mold the verdict.

B. Verdict Slip and Interrogatories

Adams alleges the trial court should have awarded a new trial because

the verdict slip and jury special interrogatories were erroneous. Adams’

Appellant Brief at 30-32.

The parties disagreed about whether the rescission jury instruction

should only include rescission for fraud, or whether rescission was also

proper if the jury found a breach of contract occurred. The trial court

issued the following instruction as to rescission, which provided that

rescission was proper if the jury found fraud or found the party was

mistaken as to a material fact that induced him to enter the contract:

[R]escission of a contract means that one party has a right
to undo a contract and to seek to put the parties in the
position they occupied before the contract was created. A
party is permitted to rescind a contract if the party seeking
rescission was mistaken as to an essential fact that
induced that party to contract and the other party knew or
had reason to know that the first party was so mistaken;
or the party seeking rescission was induced to enter the
contract by the fraud of the other party, provided the fraud
was to a material part of the contract; or the party seeking
rescission relied on a material misrepresentation by the
other party, even if the misrepresentating party was
ignorant as to the truth or falsity of the representation.

N.T., 1/26/2015, at 1140. The verdict slip submitted to the jury, however,

only asked whether the contract should be rescinded if the jury found a

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fraudulent inducement occurred.5 If the jury did not find Andrews

fraudulently induced Adams to enter the contract, then the verdict slip

instructed the jury to skip the rescission question. Neither party objected to

the structure of the verdict slip.6 Because he failed to object to the verdict

slip submitted to the jury, Adams waived his challenge to the verdict slip.

See Pa.R.C.P. 227.1(b)(1) and (2) (issues are waived for purposes of post-

trial relief unless the issue was specifically raised during pre-trial or trial

proceedings).

C. Mitigation Jury Instructions

Adams next claims the trial court erred when it issued the mitigation of

damages jury instruction. Adams’ Appellant Brief at 32-33.

This Court applies the following standards to review jury instructions:

In examining jury instructions, our scope of review is
limited to determining whether the trial court committed a
clear abuse of discretion or error of law controlling the
outcome of the case. Error in a charge is sufficient ground
for a new trial if the charge as a whole is inadequate or not
clear or has a tendency to mislead or confuse rather than
____________________________________________

5
Following the verdict slip question related to fraudulent inducement, No. 3,
the verdict slip stated, “If you answered Question 3 ‘yes,’ go to Question 4;
otherwise go to question 7.” The question regarding rescission was question
5.
6
During deliberations, the jury asked the following questions: “If we vote
breach of contract, what happens next to the contract?” and “Does it make
it null and void?” Following discussion with counsel, the trial court
responded: “You should follow the [c]ourt’s instructions and read and follow
the instructions on the verdict slip.” N.T., 1/26/2015, at 1166-68.

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clarify a material issue. Error will be found where the jury
was probably [misled] by what the trial judge charged or
where there was an omission in the charge. A charge will
be found adequate unless the issues are not made clear to
the jury or the jury was palpably misled by what the trial
judge said or unless there is an omission in the charge
which amounts to a fundamental error. In reviewing a trial
court’s charge to the jury[,] we must look to the charge in
its entirety. Because this is a question of law, this Court’s
review is plenary.

Passerello v. Grumbine, 87 A.3d 285, 296-97 (Pa.2014) (quoting Quinby

v. Plumsteadville Family Practice, Inc., 907 A.2d 1061, 1069–70

(Pa.2006)).

During the jury instructions, the trial court read the following jury

instruction regarding mitigation:

In this case, [Adams] had the sole opportunity to guide
and manage Elizabeth Milling Company at all times
subsequent to September 19, 2011. If you find that
[]Andrews breached the agreement for asset purchase but
that the value of the company has declined due solely to
mismanagement on the part of [] Adams, you may reduce
[Adams’] damages accordingly.

N.T., 1/26/2015, at 1142-43. During the charging conference, the trial

court stated that it was not its practice to include argument in its jury

instructions. The court, however, included the first line of the instruction,

i.e., “[i]n this case, the plaintiff, []Adams, had the sole opportunity to guide

and manage Elizabeth Milling Company at all times subsequent to

September 19, 2011,” which Adams claims was argument. In its 1925(a)

opinion, the trial court noted that it was not its usual practice to include the

language contained in the first line, and it believed it inadvertently did so

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here. 1925(a) Opinion, at 11. The trial court, however, noted that the

sentence, even if argumentative, was “in all material respects factually

unrebutted by [Adams].” Id. The trial court found no prejudice or harm

occurred by stating the sentence to the jury. This was not an abuse of

discretion.

D. Grant of Summary Judgment for Sandra Andrews

Adams next argues the trial court erred when it granted Sandra

Andrews’ motion for summary judgment. Adams’ Appellant Brief at 33-35.

When reviewing an order granting or denying summary judgment, this

Court “may disturb the order of the trial court only where it is established

that the court committed an error of law or abused its discretion.” Murphy

v. Duquense Univ. of the Holy Ghost, 777 A.2d 418, 429 (Pa.2001)

(quoting Capek v. Devito, 767 A.2d 1047, 1048, n. 1 (Pa.2001)). Further,

In evaluating the trial court’s decision to enter summary
judgment, we focus on the legal standard articulated in the
summary judgment rule. Pa.R.C.P. 1035.2. The rule states
that where there is no genuine issue of material fact and
the moving party is entitled to relief as a matter of law,
summary judgment may be entered. Where the non-
moving party bears the burden of proof on an issue, he
may not merely rely on his pleadings or answers in order
to survive summary judgment. “Failure of a non-moving
party to adduce sufficient evidence on an issue essential to
his case and on which it bears the burden of proof . . .
establishes the entitlement of the moving party to
judgment as a matter of law.” Young v. PennDOT, []
744 A.2d 1276, 1277 ([Pa.]2000). Lastly, we will view the
record in the light most favorable to the non-moving party,
and all doubts as to the existence of a genuine issue of
material fact must be resolved against the moving party.

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Pennsylvania State University v. County of Centre, []
615 A.2d 303, 304 ([Pa.]1992).

Murphy, 777 A.2d at 429.

Adams argues that Sandra and Robert Andrews were partners by

operation of law based on their marriage and that Sandra is not insulated

from liability because the business was a sole proprietorship. Adams’

Appellant Brief at 34. Adams notes that Sandra was required to sign the

Land Installment Contract, the Memorandum, and a marital waiver related to

two documents. Id.

The trial court stated:

[Adams] argue[s] that because EMC was a sole
proprietorship as opposed to a corporation, Sandra
Andrews’s mere spousal legal interest, an undivided 50
percent ownership interest in the company, somehow
supports a cause of action against Ms. Andrews. [Adams],
himself, points out in his post-trial brief that Sandra
Andrews signed only four documents, the land installment
contract, the memorandum, and two marital waivers
related to the bill of sale for inventory and the bill of sale
and assignment. There has been no argument advanced
that Ms. Andrews breached any terms or conditions of any
of these documents and there is no evidence that Ms.
Andrews made any other affirmative claims or
representations upon which any theory of breach of
contract or misrepresentation could be advanced. For
these reasons, the grant of summary judgment in favor of
Ms. Andrews was appropriate.

1925(a) Opinion at 11-12.

There is no evidence Ms. Andrews participated in the alleged failure to

disclose, made any misrepresentation, or committed any other breach of

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contract. The trial court did not err in granting Sandra Andrews’s summary

judgment motion.

E. Return of Escrow Payments and Sums Due Under the Land
Installment Contract

Adams claims that, because the jury found Andrews breached the APA,

Adams was entitled to all consequential losses as a result of that breach,

including money spent on the land installment contract. Adams’ Appellant

Brief, at 36. He maintains the APA and the land installment contract were

not separable. Id.

The trial court found:

[Adams] assert[s] that the [c]ourt erred in granting
release of escrow funds and that the trial court erred in
ordering payments of sums due under the land installment
contract, which [Adams] now assert[s] is void, ab initio,
given the jury’s finding of [Andrews’] breach. [Adams’]
agreement with [Andrews] pursuant to the land
installment contract was an independent contractual
obligation outside the scope of the APA. [Adams] did not
present evidence materially challenging the [Andrew’s]
position that [Adams] was in breach of the land installment
contract, as [Adams] could not do so. [Adams] did not
make payments due under the land installment contract,
and was thereby in breach of the contract. Execution on
the property subject to the land installment contract was
stalled only as a result of the [c]ourt ordered stay entered
in light of the pendency of the contract claims between the
parties related to the APA. The jury’s findings with respect
to the APA might, possibly, have impacted the appropriate
resolution of the land installment contract claims then
pending. For instance, moneys owed under the land
installment contract, may very well have been properly
awarded by the jury as consequential damages associated
with [Andrews’] breach of the APA.

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At the close of the trial, however, there can be no question
that the jury found that [Adams] was in breach of the land
installment contract and that the amounts due under the
contract exceeded the available escrow funds. There is no
legal basis to deny [Andrews] payments of the escrow
moneys that are available in partial satisfaction of the jury
verdict award in his favor with respect to the land
installment contract. As noted in this Court's Order, if
Plaintiff succeeds in obtaining a subsequent damages trial,
Plaintiff may very well assert these obligations as
consequential damages flowing from Defendant's breach of
the APA, but the instant finding of liability under the land
installment contract, and the release of the available
escrow funds is entirely warranted.

1925(a) Opinion at 12-13.

The land installment contract is a separate contract, which does not

mention the asset purchase agreement. Further, the land installment

contract states that “[t]his Contract contains the entire agreement and

understanding among the parties with respect to the sale of the Real Estate

and supersedes any and all prior oral or written agreements among the

parties.” Amended Complaint at Exh. B, at 10. The trial court did not err in

awarding Andrews the escrow payments and additional payments due under

the land installment contract.

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F. Attorney Fees

Robert and Sandra Andrews argue the trial court erred when it did not

award counsel fees related to Adams’ breach of the land installment

contract. Andrews’ Appellant Brief at 54-56.

Section 14(a) of the land installment contract provides: “Each party is

entitled to recover its reasonable attorney fees, costs, and expenses incurred

by reason of enforcing any right hereunder, including the expenses of

preparing any notice of delinquency, whether or not any legal action is

instituted.” Amended Compliant, at Exh. B, Land Installment Contract at 9.

Andrews maintains the trial court did not have the discretion to refuse

the award of attorney fees. Andrews’ Appellant’s Brief at 54-56. The trial

court did not address this issue in its 1925(a) opinion. The attorney fees

provision of the land installment contract states a party “is entitled,” to its

reasonable attorney fees and is not discretionary. See McMullen v. Kutz,

985 A.2d 769, 775 (Pa.2009) (finding each party responsible for their own

attorney fees unless “unless there is express statutory authorization, a clear

agreement of the parties or some other established exception” and finding

language stating a breaching party “shall” be responsible for the payment of

fees expressed a clear agreement of the parties). Because Adams breached

the agreement, the trial court erred in failing to award Andrews his

reasonable attorney fees associated with enforcing the land installment

contract.

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Order granting a new trial as to damages and denying all other post-

trial motions affirmed. Order addressing the motion for payment of escrow

account funds to defendants and payment by plaintiffs of all outstanding

sums due to defendant pursuant to the land installment contract reversed to

the extent it denied the request for reasonable attorney fee. The order

addressing the motion for payment of all outstanding sums due affirmed in

all other respects. Case remanded. Jurisdiction relinquished.

Judge Mundy joins the memorandum.

Judge Bowes files a concurring/dissenting memorandum.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 7/15/2016

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