J -S27033-17
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
RONALD ANGLE, JR., C/O SHARON IN THE SUPERIOR COURT OF
ANGLE, PENNSYLVANIA
Appellee
v.
MATTHEW AND ARLENE SMITH,
Appellants No. 1934 EDA 2016
Appeal from the Judgment Entered August 31, 2016
in the Court of Common Pleas of Northampton County
Civil Division at No.: C -48 -CV -2014 6431
BEFORE: GANTMAN, P.J., OTT, J., and PLATT, J.*
MEMORANDUM BY PLATT, J.: FILED MAY 05, 2017
Appellants, Matthew and Arlene Smith, appeal from the judgment'
entered against them and in favor of Appellee, Ronald Angle, Jr., c/o Sharon
Angle, in the amount of $7,740.19. We affirm of the basis of the trial court
opinion.
* Retired Senior Judge assigned to the Superior Court.
' Appellants purported to appeal from the order denying their post -trial
motions, before judgment was entered. On August 23, 2016, this Court
ordered Appellants to file a praecipe to enter judgment. On August 31,
2016, Appellants filed the praecipe, and we treat the appeal as timely filed
after the final judgment was entered. See Pa.R.A.P. 905(a)(5). We have
amended the caption accordingly.
J -S27033-17
The trial court opinion fully and correctly sets forth the underlying
facts and procedure of this case. (See Trial Court Opinion, 7/25/16, at 2-
13). Therefore, we have no reason to re -state them here.
However, for the reader's information, we provide the following
condensed recitation, which we take from the trial court's opinion and our
review of the certified record. On February 28, 2009, the parties entered
into an installment contract for the sale of certain real estate. Pursuant to
the contract's terms, Appellants, who lived on the property, agreed to
purchase it for $149,500.00, by paying $1,370.34 per month, plus ten
percent interest, for twenty years. (See Agreement, 2/28/09, at
unnumbered page 1 ¶ 2). Appellants also made a $7,500.00 down
payment. They were buying the property in "as i[s]" condition, and were
responsible for the timely payment of all taxes, municipal charges, and
insurance premiums related to the property. (Id. at unnumbered page 2 ¶
5; see id. at ¶ 4). Appellants were required to keep the property in good
condition, and were not to make substantial alterations without prior written
consent. (See id. at ¶ 6).
In January 2013, Appellee entered into a consent agreement and order
with the Pennsylvania Department of Banking. The consent agreement
stated that the installment contract's ten percent interest rate exceeded the
allowable interest rate of five and a quarter percent. As part of the consent
agreement, Appellee agreed to amend the installment contract to bring it
-2
J -S27033-17
into compliance with Pennsylvania law. Thereafter, he amended the
Agreement, but Appellants refused to sign it because "they didn't want the
banking department heckling them and bothering them." (N.T. Trial,
1/12/16, at 29).
Appellants, who continued to reside on the property, failed to pay the
2013 property taxes in the amount of $2,271.19, or to make any
rental/purchase payments for the period of June 2013 through September
2013, for a total of an additional $5,481.36. Appellants vacated the
property in October 2013. On October 15, 2013, Appellee received a letter
from Appellants' counsel offering to pay $7,500.00 in full satisfaction of the
matter. Upon receiving the letter, Appellee called counsel's office, and left a
message that he accepted the offer, and sent the acceptance in writing. On
October 24, 2013, Appellee received another letter from counsel stating that
the prior letter contained an error and that Appellants had intended to offer
only $500.00 in settlement, not the amount previously offered.
On July 10, 2014, Appellee filed a complaint against Appellants for
breach of contract on the basis of the settlement agreement. An arbitration
hearing on the complaint was held on June 16, 2015, and the panel found in
favor of Appellants, and against Appellee. Appellee appealed to the trial
court, and, on October 30, 2015, filed an amended complaint adding a count
for quantum meruit, alleging that Appellee conferred a benefit on Appellants
by allowing them to live on the property in June, July, August, and
-3
J -S27033-17
September of 2013, without paying the rental/mortgage or the taxes. The
trial court held a non -jury trial on January 12, 2016, and, on January 21,
2016, the court filed a verdict in favor of Appellee and against Appellants, in
the amount of $7,740.19, plus costs and interest. Appellants filed post -
verdict motions that the court denied on May 24, 2016. Appellants timely
appealed.2' 3
Appellants raise three issues for this Court's review:
A. [Whether Appellee is] entitled to an award based on the
breach of contract in the amount seven thousand five hundred
and no/100 ($7,500.00) dollars?
B. [Whether] the installment sales agreement [is] void
pursuant to the Department of Banking consent agreement and
order in that it was noncompliant with the laws of the
Commonwealth of Pennsylvania set forth in the consent
agreement and order?
2 Appellants filed a timely statement of errors complained of on July 15,
2016, pursuant to the trial court's order. The court filed an opinion on July
25, 2016. See Pa.R.A.P. 1925.
3
Appellants raised seventeen alleged errors in their Rule 1925(b) statement.
(See Appellants' Concise Statement of [Errors] Complained of on Appeal
Pursuant to Pa.R.A.P. 1925(b), at unnumbered pages 1-3). This does not
comply with the purpose of the Rule. See Burgoyne v. Pinecrest
Community Ass'n., 924 A.2d 675, 678 n.1 (Pa. Super. 2007) ("The Rule
1925(b) statement must be detailed enough so that the judge can write a
Rule 1925(a) opinion, but not so lengthy that it does not meet the goal of
narrowing down the issues previously raised to the few that are likely to be
presented to the appellate court without giving the trial judge volumes to
plow through.") (citation omitted).
-4
J -S27033-17
C. [Whether Appellee is] entitled to the amount of seven
thousand seven hundred forty and 19/100 dollars on the basis of
count II of quantum meruit?
(Appellants' Brief, at 12) (some capitalization omitted).4
After a thorough review of the record, the briefs of the parties, the
applicable law, and the well -reasoned opinion of the trial court, we conclude
that there is no merit to any of the issues Appellants have raised on appeal,
and that the trial court properly found in favor of Appellee. (See Trial Ct.
Op., at 16-40) (finding: (1) Appellants offered to settle matter when counsel
sent settlement letter to Appellee; (2) Appellee accepted offer; (3) there was
consideration; (4) Appellants breached settlement agreement; (5) Appellee
presented clear and convincing evidence that he suffered damages beyond
amount offered by settlement agreement; (6) Appellants' testimony was not
credible; (7) Appellee's testimony was credible; (8) original sales agreement
was valid where illegal interest provision did not defeat primary purpose of
agreement; (9) even if there was no settlement contract, Appellee is entitled
to relief under theory of quantum meruit where Appellants received the
4
We could deem Appellants' first two issues waived because they provide no
pertinent discussion or legal authority. (See Appellants' Brief, at 12-16);
see also Commonwealth v. Johnson, 985 A.2d 915, 924 (Pa. 2009), cert.
denied, 562 U.S. 906 (2010) ("[W]here an appellate brief fails to provide
any discussion of a claim with citation to relevant authority or fails to
develop the issue in any other meaningful fashion capable of review, that
claim is waived.") (citation omitted). However, because we affirm on the
well -reasoned and thorough decision of the trial court, we decline to do so.
-5
J -S27033-17
benefit of living on property for months without paying rent or taxes).
Accordingly, we affirm on the basis of the trial court's opinion.
Judgment affirmed.
Judgment Entered.
J seph D. Seletyn, Es .
Prothonotary
Date: 5/5/2017
-6
L
Circulated 04/25/2017 03:55 PM
IN THE COURT OF COMMON PLEAS OF NORTHAMPTON COUNTY
COMMONWEALTH OF PENNSYLVANIA
CIVIL DIVISION - LAW
RONALD ANGLE JR. No.: C-48-CV-2014-6431
C/0 SHARON ANGLE,
Plaintiff,
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PENNSYLVANIA RULE OF APPELLATE PROCEDURE
1925(a)STATEMENT
AND NOW, this 25th day of July, 2016, the court issues the following
statement:
On June 24, 2016, Defendants Matthew and Arlene Smith
(collectively, the "Smiths'') filed a timely Notice of Appeal to the Superior
Court of Pennsylvania from the verdict entered in favor of Plaintiff Ronald
Angle Jr., c/o Sharon Angle (''Angle'') on January 21, 2016.1 On July 15, we
received the Smiths' Concise Statement of Errors Complained of on Appeal.
1
Our review of the docket in this matter indicates that judgment has not been
entered. See Civil Docket, Angle v. Smith et el., No. C-48-CV-2014-6431 (C.P.
Northampton Co. Jul. 25, 2016). Procedurally, a party cannot appeal an order until
it has been entered "upon the appropriate docket in the lower court." Pa. R.A.P.
No. 301(a)(1). Therefore, becausethe Smiths did not have judgment entered prior
to the Smiths filing this appeal, we respectfully submit that their appeal should be
quashed. See Johnson the Florist, Inc. v. Tedco Constr. Corp., 657 A.2d 511 (Pa.
Super. 1995) (stating that there is no authority for Superior Court to review the
merits of an appeal in light of a refusal by the parties to enter judgment).
R-221a
For the reasons that follow, we respectfully suggest that the Smiths'
appeal lacks merit and should be dismissed.
BACKGROUND
I. Anole's Breach of Contract Action
On July 10, 2014, Angle commenced this action by filing a complaint
as power of attorney on behalf of her son, Ronald Angle, Jr. See Complaint
at ,i 2, Angle v. Smith et al., No. C-48-CV-2014-6431 (C.P. Northampton Co.
Jul. 10, 2014) ("Angle Complaint"). The Smiths are the former residents of
a property located at 1364 Jacobsburg Road, Wind Gap, Northampton
County, Pennsylvania (the "Property"). See Angle Complaint at ,i 3. Ronald
Angle, Jr. and Ronald Angle, Sr. ("Mr. Angle") (collectively, the "Angles") are
the title owners of the Property. See Angle Complaint at ,i 6.
Through the complaint, Angle brought an action for breach of contract,
alleging that the Smiths, through their attorney, made a written settlement
offer of $7,500 to settle a dispute related to the Smiths' failure to make
monthly payments and pay property taxes for the Property. See Angle
Complaint at ,i,i 12. Angle averred that she accepted this offer through a
telephone call and by written correspondence, but that the Smiths had
breached the contract by falling to remit the settlement offer. See Angle
Complaint at ,i,i 21.
The Smiths responded to Angle's complaint by denying Angle's
averments in support of the action for breach of contract. See Answer and
2
R-222a
New Matter, Angle v. Smith et al., No. C-48-CV-2014-6431 (C.P.
Northampton Co. Sept. 2, 2014) ("Smith Answer"). Additionally, through
their New Matter, the Smiths asserted that they were not liable for payments
under the Agreement because 1) the Agreement was declared illegal by the
Department of Banking, and is therefore unenforceable; 2) all monies owed
under the Agreement were discharged in the Smiths' bankruptcy action;
3) the Agreement was illegal and unenforceable because Angle never
provided the Smiths with a seller's disclosure agreement; and 4) a contract
was not created by the settlement offer of $7,500 because the Smiths'
attorney did not have authority to offer $7,500 and the conveyance of the
$7,500 offer was the result of a mistake. See Smith Answer.
II. Arbitration
On June 16, 2015, the parties appeared before a panel of arbitrators.
See Praecipe for Arbitration, Angle v. Smith et al., No. C-48-CV-2014-6431
(C.P. Northampton Co. Jan. 29, 2015). Following the arbitration hearing,
the arbitrators entered judgment in favor of the Smiths, and against Angle.
See Award, Angle v. Smith et al., No. C-48-CV-2014-6431 (C.P.
Northampton Co. Jun. 16, 2015). On September 8, 2015, Angle filed a
Notice of Appeal from the arbitrators' judgment. See Notice of Appeal from
Award of Arbitrators, Angle v. Smith, No. C-48-CV-2014-6431 (C.P.
Northampton Co. Sept. 8, 2015). Additionally, on October 30, 2015, Angle
amended the Complaint to include a count for quantum meruit, alleging that
3
R-223a
Angle conferred a benefit to the Smiths by allowing them to live at the
Property in June, July, August, and September of 2013. See Amended
Complaint at~ 22, Angle v. Smith et al., No. C-48-CV-2014-6431 (C.P.
Northampton Co. Oct. 30, 2015) ("Angle Amended Complaint"). Further,
Angle alleged that the Smiths were liable under a theory of quantum meruit
because they unjustly appreciated the benefit by failing to pay the taxes and
mortgage of the Property. See Angle Amended Complaint at ~~ 23-24. The
Smiths responded on January 7, 2016, by filing an Answer and New Matter
to Angle's Amended Complaint. See Answer and New Matter to Amended
Complaint, Angle v. Smith et al., No. C-48-CV-2014-6431 (C.P.
Northampton Co. Jan. 7, 2016) ("Answer Am. Comp."). Through their
Answer, the Smiths denied all of Angle's assertions in the quantum meruit
count. See Answer Am. Comp.
III. Non-Jury Trial
On January 12, 2016, this matter was assigned to the Honorable
Michael J. Koury, Jr. from the Northampton County's Non-Jury Trial List.
See generally Transcript of Proceedings of Jan. 12, 2016, Angle v. Smith,
No. C-48-CV-2014-6431 (C.P. Northampton Co. Mar. 31, 2016) ("N.T.").
Angle and Mr. Angle testified regarding Angle's claims, and Arlene Smith
("Mrs. Smith") testified on her own behalf. See generally N.T.
4
R-224a
A. Ronald Angle, Sr. s Testimony
Mr. Angle testified that on February 28, 2009 he entered into an
installment land contract with the Smiths for the Property. See id. at 16;
see also N.T. at 18, P. Ex. 1, Agreement, Angle v. Smith et al., No. C-48-CV-
2014-6431 (C.P. Northampton Co. Mar. 31, 2016) ("Sales Agreement").
Through the Sales Agreement, the Smiths agreed to purchase the Property
for $149,500, with a $7,500 down payment, a ten percent Interest rate, and
monthly payments of $1,370.34 for a twenty year period. See N.T. at 18;
Sales Agreement at ~ 2. After the twenty year period, if the Smiths made
payments in accordance with the Sales Agreement, they would receive the
deed to the Property with a clear and marketable title. See N.T. at 15. In
addition to monthly payments, the Sales Agreement specified that the
Smiths were buying the Property in an "as is" condition, and were
responsible for the timely payment of all taxes, municipal charges, and
insurance premiums related to the Property. See id. at 19.
In January of 2013, Mr. Angle entered into a Consent Agreement and
Order with the Pennsylvania Department of Banking. See id. at 20; see also
N.T. at 20, P. Ex. 2, Consent Agreement and Order dated Jan. 13, 2013,
Angle v. Smith et al., No. C-48-CV-2014-6431 (C.P. Northampton Co. Mar.
31, 2016)("Consent Agreement"). The Consent Agreement noted that the
Sales Agreement included provisions which violated Pennsylvania law. See
Consent Agreement at~~ 23, 24, 28. Specifically, the Consent Agreement
5
R-225a
noted that the interest payment of ten percent in the Sales Agreement
exceeded the five and a quarter percent allowable interest rate under the
Loan Interest and Protection Law. See Consent Agreement at~ 36; see also
41. P.S. §301. As part of the Consent Agreement, Mr. Angle agreed to re-
execute or amend the Sales Agreement to bring it into compliance with
existing law within thirty days. See Consent Agreement at ~ 22. Following
the issuance of the Consent Agreement, Mr. Angle testified that he contacted
his attorney to alter the terms of the Sales Agreement pursuant to the
Pennsylvania Department of Banking's requests in the Consent Agreement.
See id. at 24. Mr. Angle's attorney amended the Sales Agreement as
requested, and sent the the amended Sales Agreement to the Smiths for
their review and signature. See id. at 24; see also N.T. at 24, P. Ex. 3,
Sales Agreement, Angle v. Smith et al., No. C-48-CV-2014-6431 (C.P.
Northampton Co. Mar. 31, 2016) ("Amended Sales Agreement").
Additionally, Mr. Angle claimed that he personally delivered the Amended
Sales Agreement to the Smiths prior to the thirty date deadline in the
Consent Agreement. See N.T. at 29. Mr. Angle recalled that the Smiths
refused to sign the Amended Sales Agreement because "they didn't want the
banking department heckling them and bothering them." Id.
On February 26, 2013, Mr. Angle received a letter from the Smiths
stating that they were advised by their attorney, John Molnar, Esq.
("Attorney Molnar"), to avoid making changes to the Sales Agreement due to
6
R-226a
the Smiths' pending bankruptcy case. See id. at 30; see also N.T. at 30, P.
Ex. 4, Letter dated Feb. 26, 2013, Angle v. Smith et al., No. C-48-CV-2014-
6431 (C.P. Northampton Co. Mar. 31, 2016)("Smith Ltr."). However, the
Smiths did not notify Mr. Angle, or ask to execute the Amended Sales
Agreement, following their discharge from bankruptcy. See id. at 31. Mr.
Angle recalled that the Smiths vacated the Property in late 2013 following a
few months during which they failed to make monthly payments. See id. at
32. On cross-examination, Mr. Angle admitted that he did not execute a
seller property disclosure statement at the time the original Sales Agreement
was executed, and that he did not send the Smiths thirty days written notice
of the Smiths' late payments prior to the Smiths vacating the Property. See
id. at 33-34.
B. Mrs. Angle's Testimony
Angle testified that she was responsible for managing the monthly
payments from the Smiths related to the Property. See id. at 39. On April
19, 2013, Angle received an agreement of sale from Mrs. Smith proposing
that Mrs. Smith's mother would mortgage the amount the Smiths owed the
Angles under the Sales Agreement. See id. at 36; see also N.T. at 36, P. Ex.
6, Smiths' Agreement of Sale, Angle v. Smith et al., No. C-48-CV-2014-6431
(C.P. Northampton Co. Mar. 31, 2016). However, Angle testified that the
Property was never transferred to Mrs. Smith's mother pursuant to Mrs.
Smith's proposal. See N.T. at 38.
7
R-227a
Shortly thereafter, Angle noted that the Smiths did not make their
monthly payments to Angle for the months of June, July, August, or
September of 2013. See id. at 39. Angle contacted Mrs. Smith in June of
2013 concerning the Smiths1 failure to make the monthly payments. See id.
at 40. Mrs. Smith indicated that they were using the monthly payment
money to improve the Property in an attempt to receive a new mortgage for
the Property. See id. However, Mrs. Smith informed Angle that the Smiths
would pay Angle the past amounts due even if they did not qualify for a new
mortgage on the Property. See id. The Smiths ultimately vacated the
Property in October of 2013 without compensating Angle for the four months
of unpaid monthly payments, totaling $5,481.36, or the taxes for the
Property in 2013, totaling $2,271.19. See id. at 41, 47; see also N.T. at 47,
P. Ex. 10, County, School District, Township, and Fire Hydrant Tax Receipts,
Angle v. Smith et al., No. C-48-CV-2014-6431 (C.P. Northampton Co. Mar.
31, 2016).
On October 15, 2013, Angle received a letter from Attorney Molnar
stating that he did not believe the Sales Agreement was valid, but that the
Smiths were prepared to offer $7,500 in full satisfaction of the matter. See
id. at 41-42; see also N.T. at 41, P. Ex. 7, Letter dated Oct. 15, 2013, Angle
v. Smith et al., No. C-48-CV-2014-6431 (C.P. Northampton Co. Mar. 31,
2016) ("Molnar Ltr. 111). Following receipt of the letter, Angle placed a
telephone call to Attorney Molnar1s law office and informed his secretary that
8
R-228a
she accepted the $7,500 settlement offer. See id. at 43. Angle was
informed that Attorney Molnar would return her telephone call. See id. at
43-44. Angle never received a telephone call from Attorney Molnar. See id.
at 43-44. The following day, Angle wrote a letter to the Smiths accepting
the $7,500 settlement offer. See id. at 44; see also N.T. at 44, P. Ex. 8,
Letter dated Oct. 16, 2013, Angle v. Smith et al., No. C-48-CV-2014-6431
(C.P. Northampton Co. Mar. 31, 2016) ("Angle Ltr."). Angle addressed this
letter to the Smiths at the Property address because Angle did not know the
Smiths' new address. See id. at 44-45. However, Angle believed this letter
would reach the Smiths via the U.S. Postal Service. See id. at 44-45.
On October 24, 2013, Angle received a second letter from Attorney
Molnar, stating that the previous letter contained an error, and that the
Smiths intended to offer Angle $500 rather than $7,500 in settlement for the
alleged unpaid monthly payments. See id. at 45; see also N.T. at 45, P. Ex.
9, Letter dated Oct. 24, 2013, Angle v. Smith et al., No. C-48-CV-2014-6431
(C.P. Northampton Co. Mar. 31, 2016) ("Molnar Ltr. 2"). Angle testified that
she would not have accepted the Smiths' settlement offer of $500. See id.
at 46.
C. Mrs. Smith's Testimony
Mrs. Smith testified that the Smiths entered into the Sales Agreement
for the Property with Angle because previous financial difficulties limited
their ability to purchase a home. See id. at 64-65. Mrs. Smith confirmed
9
R-229a
that, under the Sales Agreement, the Smiths would make monthly payments
of $1,370.34, purchase the Property in "as is" condition, and pay all of the
real estate taxes associated with the Property. See id. at 64-65. Further,
through Mrs. Smith's previous experience as a real estate agent, Mrs .Smith
confirmed that she was familiar with the purpose of a Seller's Disclosure
Statement, but did not receive a Seller's Disclosure Statement or request
one from Angle at the time the Sales Agreement was executed. See id. at
56, 66.
The Smiths resided at the Property for approximately four years. See
generally N.T. During this time period, Mrs. Smith testified that they
expended approximately $5,000 improving the Property. See id. at 56.
Mrs. Smith recounted that the improvements included replacing drywall and
flooring, renovating a bathroom, converting part of the basement into a
bedroom, and removing a dilapidated deck. See id. at 56.
On December 31, 2012, the Smiths filed a petition in bankruptcy. See
id. at 66-67; see also N.T. at 66, P. Ex. 11, Bankruptcy Petition, Angle v.
Smith et al., No. C-48-CV-2014-6431 (C.P. Northampton Co. Mar. 31,
2016). Through the Smith's Bankruptcy Petition, the Smiths acknowledged
that they intended to reaffirm the debt associated with the Sales Agreement
following their discharge from bankruptcy. See N.T. at 68; see also
Bankruptcy Petition at 42. The Smiths received a bankruptcy discharge on
April 19, 2013. See N.T. at 58, D. Ex. 2, Bankruptcy Discharge, Angle v.
10
R-230a
Smith et al., No. C-48-CV-2014-6431 (C.P. Northampton Co. Mar. 31,
2016). Through their Bankruptcy Discharge, the Smiths acknowledged that
they had given up discharge protection in relation to the Sales Agreement by
signing a reaffirmation agreement. See id. at 71.
In January or February of 2013, Mrs. Smith met with Mr. Angle at his
attorney's office. See id. at 57. Mrs. Smith denied that Mr. Angle presented
her with a copy of the Amended Sales Agreement, but brought a letter with
her to the office stating that the Smiths were not accepting the Amended
Sales Agreement required by the Pennsylvania Department of Banking. See
id. at 57, 72; see also Smith Ltr. Mrs. Smith testified she prepared this
letter at Mr. Angle's request, because, due to the Smiths' pending
bankruptcy, she did not believe she could alter the Sales Agreement without
bankruptcy court approval. See id. at 57. Further, Mrs. Smith testified that
she did not receive an accounting, as required by the Consent Agreement,
from the Angles following the creation of the Consent Agreement. See id. at
56.
In approximately April of 2013, Mrs. Smith ordered two appraisals of
the Property in an attempt to transfer the Property to her mother. See id. at
53-54. Mrs. Smith testified that the appraisals valued the Property at a
lower value than the Smiths owed the Angles under the Sales Agreement.
See id. at 54. Following the appraisals, Mrs. Smith contacted Mr. Angle to
ask if he would sign a new agreement for a lower principle amount. See id.
11
R-231a
Mrs. Smith recounted that Mr. Angle did not agree to this proposal. See id.
at 55. Subsequently, Mrs. Smith asked Mr. Angle if he would be willing to
"reconsider the PA Department of Banking's new contract." Id. Mrs. Smith
claimed Mr. Angle refused to revisit the Amended Sales Agreement because
"it was not worth it for him to hold a note at that interest rate." Id. At that
point, Mrs. Smith informed Mr. Angle that she would make plans to vacate
the Property. See id. at 54, 63.
Mrs. Smith admitted that she did not make a monthly payment to
Angle in April, July, or August of 2013. See id. at 50, 52. However, Mrs.
Smith claimed that she paid municipal property taxes for the Property in
April of 2013. See id. at 55. Ultimately, Mrs. Smith testified that she
vacated the Property in early September of 2013. See id. at 50
Regarding the settlement offer, Mrs. Smith clarified that she intended
to offer $500, rather than $7,500 as a settlement offer to the Angles. See
id. at 59. Mrs. Smith reasoned that it would be easier to make a peace
offering with the Angles than to continue with legal proceedings. See id. at
59-60. However, Mrs. Smith claimed that she never received Angle's
October 16, 2013 letter accepting the $7,500 settlement offer, and was only
notified of the error in the settlement offer when she received a copy of the
October 15, 2013 letter from Attorney Molnar's office. See id. at 60.
12
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IV. Post-Trial Motions
On January 21, 2016, the court filed an Order of Court entering
judgment in favor of Angle, and against the Smiths, in the amount of
$7,740.19 plus costs and interest. See Order of Court dated Jan. 21, 2016,
,Angle v. Smith, No. C-48-CV-2014-6431 (C.P. Northampton Co. Jan. 21,
2016) ("Jan. 2016 Order"). On February 1, 2016, the Smiths filed a timely
Motion for Post-Trial Relief from the Jan. 2016 Order. See Motion for Post
Trial [sic] Relief, Angle v. Smith, No. C-48-CV-2014-6431 (C.P. Northampton
Co. Feb. 1, 2016). On March 9, 2016, the court filed an Order of Court
directing the parties to file briefs relating to the Smith's Post-Trial Motions.
See Order of Court dated Mar. 9, 2016, Angle v. Smith, No. C-48-CV-2014-
6431 (C. P. Northampton Co. Mar. 9, 2016). The Smiths filed a brief in
support of their Post-Trial Motion on April 18, 2016. See Defendants' Brief in
Support of Post Trial [sic] Motions, Angle v. Smith, No. C-48-CV-2014-6431
(C.P. Northampton Co. Apr. 18, 2016) ("Smith Brief"). Angle filed a brief
opposing the Smith's Post-Trial Motion on May 2, 2016. See Plaintiff's Brief
in Opposition to Defendant's Post-Trial Motion, No. C-48-CV-2014-6431 (C.P.
Northampton Co. May 2, 2016). The court denied the Smiths' Post-Trial
Motion on May 24, 2016. See Order of Court dated May 24, 2016, Angle v.
Smith, No. C-48-CV-2014-6431 (C.P. Northampton Co. May 24, 2016).
13
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V. The Smiths' Aooeal
On June 21, 2016, the Smiths filed a Notice of Appeal to the Superior
Court of Pennsylvania. See Notice of Appeal, No. C-48-CV-2014-6431 (C.P.
Northampton Co. Jun. 21, 2016). On appeal, the Smiths assert that:
1. The Trial Court erred in finding favor (sic] and entering
judgment for Plaintiff, Ronald Angle, Jr. c/o Sharon Angle, in
regard to the above captioned case.
2. The Trial Court erred in finding in favor of the Plaintiff and
against Defendants in the amount of Seven Thousand Seven
Hundred Forty and 19/100 ($7,740.19) Dollars.
3. From the amount of the Judgment being Seven Thousand
Seven Hundred Forty and 19/100 ($7, 740.19) Dollars it is
believed by the Defendants that the Court found in favor of
the Plaintiff and against the Defendants on the theory of
quantum meruit which was set forth in the Plaintiff's Amended
Complaint.
4. The Trial Court erred in not considering that the
Installment Sale Agreement was void as declared by the
Department of Banking pursuant to a Consent Agreement and
Order of January 18, 2013.
5. The Trial Court erred in failing to consider that under the
Installment Sales Agreement, the Plaintiff received the sum of
Seven Thousand Five Hundred and 00/00 ($ 7,500.00)
Dollars of liquidated damages pursuant to paragraph 10 of
the Installment Sales Agreement. This Honorable Court erred
in not taking that payment into account.
6. Further, the Trial Court erred in failing to consider that
under paragraph ten of the aforesai7 [sic] agreement the
monies were received and accepted as liquidated damages.
7. The Trial Court erred in calculating the amount due for
quantum meruit and failing to consider that the payments in
the amount of One Thousand Three Hundred Seventy and
34/100 ($1,370.34) Dollars per month were for both principal
14
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and interest. In fact, the interest was, according to the
Department of Banking, was [sic] excessive.
8. The Trial Court erred in failing to consider that the Plaintiff
never gave any notice to Defendants pursuant to paragraph
10 relative to any defaults.
9. The Trial Court erred in failing to consider the fact that the
Defendants did improvements and repairs to the property to
the benefit of Plaintiff. As a result, this Honorable Court failed
to consider this fact in awarding an amount for quantum
meruit.
10. The Trial Court erred in failing to consider the fact that
Plaintiff refused to provide them with a new contract pursuant
to the Department of Banking after the Defendants were
discharged from bankruptcy.
11. In the event that any real estate taxes were included in
the amount of the Verdict, the Defendants aver that the Trial
Court erred in including any real estate taxes in that amount.
12. The Trial Court erred in failing to consider the fact that the
Plaintiff did not establish a fair market value for the rent of
the subject premises. Without establishing a value for the
rent of the subject premises the Verdict could not be
calculated as to what is owed under a theory of quantum
meruit.
13. The Trial Court erred in failing to consider the fact that the
Plaintiff was not in compliance with the provisions of the
Consent Agreement and Order of the Department of Banking.
14. The Trial Court erred in failing to consider payments that
the Defendant made to Plaintiff after bankruptcy.
15. The Defendants assume that that Trial Court entered a
Judgment in the amount of Seven Thousand Seven Hundred
Forty and 19/100 ($7,740.19) Dollars on the basis of
quantum meruit. If the Defendants were incorrect from that
assumption based on the amount entered in the Judgment,
the Defendants file these post trial [sic] motions with respect
to Count I in regard to the averments contained in the
Answer and New Matter concerning Count I.
15
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16. The Trial Court erred in not accepting the proposed
findings of fact as set forth in the Trial Memorandum with
accompanying Findings of Fact of Smith.
17. The Defendants preserved all issues set forth in the Post
Trial Motion, Brief in Support of Post Trial [sic] Motions and
accompanying Statement of Case.
Defendants' Concise Statement of Matters Complained of on Appeal Pursuant
to PA.R.A.P. 1925(b), Angle v. Smith et al., No. C-48-CV-2014-6431 (C.P.
Northampton Co. Jul. 15, 2016) ("Concise Statement").
DISCUSSION
I. Standard of Review
In reviewing a verdict entered after a non-jury trial, the Pennsylvania
Superior Court's standard of review is limited to determining "whether the
findings of the trial court are supported by competent evidence and whether
the trial judge committed error in any application of the law." See Wyatt
Inc. v. Citizens Bank, 976 A.2d 557, 564 (Pa. Super. 2009) (quoting Wilson
v. Transp. Inc. Co., 889 A.2d 563, 568 (Pa. Super. 2005). Additionally, the
"findings of fact of the trial judge must be given the same weight and effect
on appeal as the verdict of a jury" and the appellate court will "consider the
evidence in a light most favorable to the verdict winner." Id. Further, the
verdict of the trial court will only be reversed "if its findings of fact are not
supported by competent evidence in the record or if its findings are
premised on an error of law.'' Id. Here, our holding involved questions of
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fact and law. As discussed below, because the Verdict was based upon our
credibility determinations and competent evidence in the record, it should be
affirmed.
II. Breach of Contract
To successfully maintain a cause of action for breach of contract, a
party must establish: (1) the existence of a contract, including its essential
terms; (2) a breach of duty imposed by the contract; and (3) resultant
damages. See Hart v. Arnold, 884 A.2d 316, 332 (Pa. Super. 2005) (citing
Gorski v. Smith, 812 A. 2d 683, 692 (Pa. Super. 2002)) (additional citations
omitted). Additionally, the moving party must establish a causal connection
between the breach of duty imposed by the contract and the resultant
damages. See Logan v. Mirror Printing Co. of Altoona, Pa., 600 A.2d 225
(Pa. Super. 1991). Once a party proves breach of contract, that party is
entitled to recover the damages it suffered, provided that the damages were
of a type that would naturally and ordinarily result from the breach of duty
imposed by the contract. See Ferrer v. Trustees of Univ. of Pa., 825 A.2d
591 (Pa. 2002). To sustain this burden, a plaintiff must prove the above
facts by a preponderance of the evidence. See Snyder v. Gravell, 666 A.2d
341, 343 (Pa. Super. 1995).
A. It was not an error of law to enter judgment in favor of Angle
and against the Smiths under a breach of contract claim.
In the Smiths' Concise Statement, errors one, two, and fifteen, the
Smiths argue that the court erred by entering judgment in favor of Angle
17
R-237a
and against the Smiths under Angle's breach of contract claim. As stated
above, in order to succeed on a breach of contract claim, a plaintiff must
show 1) the existence of a contract; 2) a breach of duty imposed by the
contract; and 3) resultant damages. See Hart, 884 A.2d at 332. We find
that Angle has presented sufficient and reliable evidence for every element
necessary to prove her breach of contract claim beyond a preponderance of
the evidence and support the verdict. Therefore, we disagree.
i. Valid Contract
First, we find that Angle presented credible evidence that a valid
contract existed between Angle and the Smiths. The elements that must be
present to give rise to a valid, enforceable contract are 1) offer;
2) acceptance; and 3) consideration, or a meeting of the minds. See
Schreiber v. Olan Mills, 627 A.2d 806, 808 (Pa. Super. 1993). An "offer" is
"a manifestation of a willingness to enter into a bargain, so made as to
justify another person in understanding that his assent to that bargain is
invited and will conclude it.'' O'Brien v. Nationwide Mutual Ins. Co., 689
A.2d 254, 258 (Pa. Super. 1997) (additional citations omitted). Once an
offer has been made, an acceptance can be found where an offeree agrees,
unconditionally, to the terms of the offeror's proposal. See United
Mercantile Agencies, Inc. v. Stotsky et al., 182 A. 788, 788 (Pa. Super.
1936). Finally, underlying all contracts, there must be a bargained-for
consideration, "defined as a benefit to the party promising, or a loss or
18
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detriment to the party to whom the promise is made." Schrieber, 627 A.2d
at 808.
Here, Angle introduced a letter written by Attorney Molnar, conveying
a settlement offer from the Smiths, dated October 15, 2013. See Molnar
Ltr. 1. As the Smiths' attorney, Attorney Molnar was required to receive
express authority from the Smiths in order to convey this settlement offer.
See Reutzel v. Douglas, 870 A.2d 787, 793 (Pa. 2005). The letter provides,
in relevant part: "[n]otwithstanding my advice to the contrary, my clients
are willing to offer Seven Thousand Five Hundred and 00/100 Dollars
($7,500) as full satisfaction in regard to this matter. This letter is offered for
settlement purposes and is made without prejudice. 11
N .T. at 41-42. The
contents of the letter are clear, and manifest a willingness to enter into an
offer. Therefore, we find that the October 15, 2016 letter from Attorney
Molnar to the Angles constitutes an offer. See O'Brien, 689 A.2d at 258.
While Mrs. Smith testified that she did not grant Molnar the express
authority to convey $7 ,500 as a written settlement amount, we did not find
Mrs. Smith's testimony credible in this respect. Angle testified credibly that
Mrs. Smith promised to remit all of her missing payments, and based upon
Angle's calculations, a settlement offer of $7,500 would be reasonable to
cover the Smiths' unpaid taxes and monthly payments. See N.T. at 47.
Therefore, because we believe that Molnar had the express authority to
convey this written settlement amount, this letter serves as a valid offer.
19
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The evidence also shows that Angle accepted the offer. Angle testified
that, upon receipt of the of the October 15, 2013 letter, she "called the John
Molnar Law Office and I spoke with the secretary and I said that I had
received the settlement letter and that I would be accepting this offer and
they told me that John Molnar would call me back." N.T. at 43. Angle's
conversation with Attorney Molnar's secretary did not alter the terms of the
offer, and therefore, assuming Attorney Molnar received the message,
constituted a valid acceptance of the Smiths' settlement offer. See United
Mercantile Agencies, Inc. v. Slotsky et al., 182 A. 788, 788 (Pa. Super.
1936). Further, assuming arguendo, that Attorney Molnar did not receive
the message from Angle accepting the offer, Angle accepted the offer by
mailing a letter to the Smiths, accepting the Smiths' terms on October 16,
2013. See N.T. at 36; Angle Ltr.; see also Bruner Co. v. Standard Lumber
Co., 63 Pa. Super. 283 (1916) (holding that the acceptance of an offer is
complete where the offeree places an acceptance letter in the mail);
Restatement, Contracts§§ 29, 66 (finding acceptance of an offer by mail is
sufficient to constitute a binding agreement). Although Angle testified that
she was aware that the Smiths no longer resided at that address, she
testified, credibly, that she did not have the Smiths' forwarding address, but
that she believed that the U.S. Postal Service would forward the letter to the
Smiths' new address. See N.T. at 44-45. In Pennsylvania, the "mailbox
rule," i.e., Angle's action in placing a prepaid, properly addressed letter in
20
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the mail, raises a rebuttable presumption that the mailed item was received.
See Breza v. Don Farr Moving & Storage Co., 828 A.2d 1131, 1135 (Pa.
Super. 2003). While Smith testified that she did not receive Angle's letter
accepting the settlement offer, "the presumption under the mailbox rule is
not nullified solely by testimony denying receipt of the item mailed." Id.
(holding appellant's mere assertion that notice was not received, absent
corroboration, is not sufficient to overcome mailbox rule presumption).
Therefore, we find that either of these methods of acceptance were valid,
and that Angle established her acceptance of the settlement offer by a
preponderance of the evidence.
Finally, the last element in analyzing whether the settlement offer was
valid is whether there was consideration underlying the agreement. Here,
the consideration is properly viewed as the discharge of the Smiths' unpaid
rent and property taxes. Angle's$ 7,740.19 calculation of the Smiths'
liability for unpaid rent and property taxes is approximately the same
amount as the $7,500 settlement offer, and clearly constitutes a bargained
for exchange. See N.T. at 41, 47; see also Schrieber, 627 A.2d at 808.
Therefore, we find that the discharge of this liability properly constitutes
consideration, and thus, with the finding that there was a legitimate offer
and acceptance, constitutes a valid contract for the purposes of analyzing a
breach of contract claim.
21
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ii. Breach of a Duty Owed by the Contract
The terms of the settlement offer were clear. The Smiths would pay
Angle $7,500, and their debt for unpaid rent and property taxes would be
extinguished. See Molnar Ltr. 1. Therefore, their refusal to honor the
agreement following Angle's acceptance constituted the breach. Further, the
Smiths presented an October 24, 2013 letter from Molnar which states that
"[t] he letter that I forwarded to you of October 15, 2013 contained an error.
The amount is five hundred and 00/100 Dollars ($500) that my client is
offering. Enclosed you will find a revised letter bearing the same date."
Molnar Ltr. 2. As discussed above, we believe that the Smiths initially
authorized Molnar to make a $7,500 settlement offer. However, even if, as
the letter claims, the Smiths did not intend for Molnar to offer $7,500 in
their initial settlement offer, Pennsylvania does not recognize unilateral
mistake as a valid basis for rescinding a settlement offer once it is accepted
by the opposing party. See Kraemer v. Schaeffer, 751 A.2d 241, 246 (Pa.
Super. 2000). Angle accepted the Smiths' settlement offer of $7,500 on
October 15, 2013. Therefore, the Smiths were not able to rescind the
settlement offer, alleging a mistake, on October 24, 2013. As the Smiths
have not paid the $7 ,500 as their settlement offer promises, they have
breached the contract.
22
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iii. Damages
In a breach of contract claim, the plaintiff is also required to prove
resultant damages from the breach of the contract. Damages for breach of
contract should place a plaintiff in "as nearly as possible in the same position
[it] would have occupied had there been no breach." He/pin v. Trustees of
Univ. of Pennsylvania, 10 A.3 267, 270 (Pa. 2010). Further,
[t]he determination of damages is a factual question to be
decided by the fact-finder. The fact-finder must assess the
testimony, by weighing the evidence and determining its
credibility, and by accepting or rejecting the estimates of
damages given by the witnesses.
Although the fact-finder may not render a verdict based on sheer
conjecture or guesswork, it may use a measure of speculation in
estimating damages. The fact-finder may make a just and
reasonable estimate of the damage based on relevant data, and
in such circumstances may act on probable, inferential, as well
as direct and positive proof.
Omicron Systems, Inc. v. Weiner, 860 A.2d 554, 564-565 (Pa. Super. 2004)
(citing Judge Technical Services, Inc. v. Ciancy, 813 A.2d 879, 885 (Pa.
Super. 2002)) (additional citation omitted).
Here, as discussed above, Angle presented sufficient and credible
evidence to prove by a preponderance of the evidence that the Smiths
breached a settlement offer promising to pay Angle $7,500. However, Angle
also submitted evidence that the Smiths owed the Angles $5,481.36 for
unpaid monthly payments, and $2,271.19 for unpaid taxes. See N.T. at 41,
47. While we could have enforced the $7,500 settlement offer set forth in
the October 15, 2013, we relied instead on Angles'$ 7,752.55 calculation of
23
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damages to craft our verdict. As our verdict of$ 7, 740.19 approximately
calculates Angle's damages under either of the measures that Angle
presented, we submit that we did not err in calculating damages. See
Omicron, 860 A.2d at 564-565. Further, because we found that Angle
proved by a preponderance of the evidence that the Smiths breached the
contract, we respectfully suggest that the Smiths' claims that we erred be
dismissed.
B. The court did not err by finding that the Sales Agreement was
valid or by failing to consider that Angle did not give the
Smiths notice under the Sales Agreement.
In the Smiths' Concise Statement, errors four and eight, the Smiths
argue that the court erred by finding that the Sales Agreement was valid and
by failing to consider that Angle did not give the Smiths notice under the
provisions of the Sales Agreement. Contrary to the Smiths' assertions, the
court agreed with the Smiths' allegation that the original Sales Agreement
was void as declared by the Consent Agreement. Therefore, all provisions of
the Sales Agreement, including the provision requiring notice to the Smiths,
have been rendered void and unenforceable by either party.
i. Void Sales Agreement
The legal classification of a contract with illegal provisions depends
mainly upon the weight of the illegal provision. Where contracts contain
illegal provisions, they can still be enforced by the non-drafting party,
omitting the illegal provision, so long as the omission of the illegal provision
24
R-244a
does not defeat the primary purpose of the bargain. See Restatement
(Second) of Contracts§ 184 (1979). Conversely, "an agreement which
violates a provision of a statute, or which cannot be performed without
violation of such provision, is illegal and void." Dippel v. Brunozzi, 74 A.2d
112, 114 (Pa. 1950). "A declaration that a contract is void nullifies all
aspects of the agreement." Restatement (Second) of Contracts § 7 cmt. a.
An essential aspect of a void contract is that it lacked legal existence from
the moment of inception, and therefore any later judicial declaration that the
contract is void clarifies, rather than alters, the relationship of the
contracting parties. See id.
Here, the Smiths entered into the Sales Agreement with the Angles in
February of 2009. See Sales Agreement. An important provision of the
Sales Agreement was the agreement that Smiths would pay ten percent
interest on the loan of $149,500 over the course of twenty years. See Sales
Agreement. On January 18, 2013, the Angles signed the Consent
Agreement with the Department of Banking and Securities. See generally
Consent Agreement. Under the Consent Agreement, the Angles agreed to
the allegations contained within the Consent Agreement. See Consent
Agreement at ~ 46. In paragraph 24(d) of the Consent Agreement, the
Department of Banking and Securities allege that the ten percent interest
rate under the Sales Agreement violated 41 P.S. § 301, which capped the
interest rate at five and a quarter percent. See Consent Agreement at
25
R-245a
~ 24(d). As the ten percent interest rate is clearly an essential term in the
Sales Agreement, the allegations in the Consent Agreement deemed the
Sales Agreement void as of January 18, 2013. See Dippel, 74 A.2d at 114.
Further, because the finding that a contract is void "nullifies all aspects of
the agreement" after January 18, 2013, Angle was not required to give the
Smiths thirty days' notice of a default under the provisions of the Sales
Agreement. See Restatement (Second) of Contracts§ 7 cmt. a.; see also
Sales Agreement at ~ 10. Therefore, because we found the Sales
Agreement void, and therefore all provisions of the Sales Agreement
unenforceable, we respectfully suggest that we did not err by failing to
consider that the Sales Agreement was void and that Angle did not comply
with paragraph ten of the Sales Agreement. Therefore, the Smiths' alleged
errors, four and eight, should be dismissed.
C. The trial court did not err by failing to consider the
terms of the Consent Agreement and Order of the
Department of Banking
In the Smiths' Concise Statement, errors ten and thirteen, the Smiths
argue that the court erred by failing to consider that Angle refused to abide
by the terms and provisions of the Consent Agreement. See Concise
Statement at ~ 13. Specifically, the Smiths argue that we erred by failing to
consider that Angle did not provide the Smiths with a new contract as
required by the Consent Agreement. See Concise Statement at ~ 10.
However, while the Smiths argue that we erred, these allegations relied on
26
R-246a
our determination of contested issues of fact. We submit that we accurately
applied the law and determined there was competent evidence to support
our decision. See Wyatt Inc. v. Citizens Bank, 976 A.2d 557, 564 (Pa.
Super. 2009) (quoting Wilson v. Transp. Inc. Co., 889 A.2d 563, 568 (Pa.
Super. 2005). Therefore, we disagree with the Smiths' contentions.
i. Credibility Determination
First, in alleged error ten, the Smiths allege that we "erred in failing to
consider the fact that Plaintiff refused to provide [the Smiths] with a new
contract pursuant to the Department of Banking after the [Smiths] were
discharged from bankruptcy. See Concise Statement at~ 10. As the
testimony of the parties differed with regards to whether the Angles
presented the Smiths with a new Sales Agreement, our decision depended
on the credibility of the parties' testimony. "It is well-established that the
credibility of witnesses is an issue to be determined by the trier of fact."
woods v. Cicierski, 937 A.2d 1103, 1105 (Pa. Super. 2007). The appellate
courts have determined that the trier of fact is in the best position to judge
the credibility of witnesses, and therefore the appellate courts will "respect a
trial court's findings with regard to credibility and weight of the evidence
[after a bench trial] unless the appellant can show that the court's
determination was manifestly erroneous, arbitrary and capricious[,] or
flagrantly contrary to the evidence." J.J. Deluca Co., Inc. v. Toll Naval
27
R-247a
Assocs., 56 A.3d 402, 410 (Pa. Super. 2012) (internal quotation marks
omitted).
Following the Consent Agreement, the Angles were required to amend
the Sales Agreement for the Property within thirty days of the Consent
Agreement to bring it into compliance with the Department of Banking's
regulations. See Consent Agreement at ,I 42. Mr. Angle testified that he
remedied the problem, and presented the Amended Sales Agreement to the
Smiths for their review within the thirty day time period. See N.T. at 28-29.
Mr. Angle recounts that the Smiths refused to sign the Amended Sales
Agreement because "they didn't want the banking department heckling them
and bothering them." Id. at 29. Further, Mr. Angle recounted that the
Smiths told him they wanted to keep the existing Sales Agreement because
they wanted to amend the mortgage through Mrs. Smith's mother. See id.
Contrary to Mr. Angle's testimony, Mrs. Smith testified that Mr. Angle
had never presented her or her husband with the Amended Sales
Agreement. However, Angle presented evidence in the form of a Jetter from
Mrs. Smith, dated February 26, 2013, stating that Attorney Molnar had
advised the Smiths not to make any changes to the Sales Agreement due to
their pending bankruptcy. See N.T. at 57; see also Smith Ltr. Further, the
Smiths' own brief in support of their post-trial motion alleges that Angle
asked the Smiths to sign a revised contract during that time period. See
Smith Brief at 8. Therefore, we found that in relation to the Amended Sales
28
R-248a
Agreement, Mr. Angle's testimony was credible, and Mrs. Smith's testimony
was not credible.
Further, while the Smiths argue that we should have considered that
Angle was required to present them with the Amended Sales after they were
discharged from bankruptcy, Angle was not required to do so. Mr. Angle
testified credibly that he presented the Amended Sales Agreement to the
Smiths and they refused to sign it. See id. at 29. The Smiths sent a letter
to Mr. Angle stating that they could not make any changes to the contract
due to the pending bankruptcy. See Smith Ltr. Mrs. Smith testified that she
did not believe she could enter into the Amended Sales Agreement without
first receiving approval from the bankruptcy court. See N.T. at 57. While it
is a general rule that amendments to pre-existing contracts made during a
pending bankruptcy violate the automatic stay provision of 11 U.S.C.
§ 362(a)(S), the bankruptcy court has the discretion to effectuate an
amendment to a contract where a debtor proves that circumstances support
that decision. See Graziani v. Randolph, 887 A.2d 1244, 1246-(Pa. Super.
2005). However, neither of the Smiths testified that they sought the
required approval from the bankruptcy court. See generally N .T. Based
upon this evidence, we found that the Smiths were presented with the
Amended Sales Agreement within the thirty day time period and concluded
that the Smiths rejected Angle's attempts to bring the Sales Agreement into
compliance with the Consent decree. Therefore, because we believe that the
29
R-249a
Smiths were presented with the Amended Sales Agreement, we respectfully
submit that the Smiths' claim that we erred by failing to consider that Angle
did not present the Smiths with the Amended Sales Agreement is meritless.
ii. The Smiths did not present any evidence that Angle
was not in compliance with the provisions of the
Consent Agreement.
Second, in alleged error thirteen, the Smiths allege that we "erred by
failing to consider the fact that [Angle] was not in compliance with the
provisions of the Consent Agreement and Order of the Department of
Banking." See Concise Statement at ,i,i 13. While the Smiths have not
elaborated why they believe that Angle was not in compliance with the
Consent Agreement, we believe that they are asserting that Angle was not in
compliance with provision forty-two of the agreement, which required Angle
to 1) re-execute or amend the Sales Agreement within thirty days to bring it
into compliance with the Department of Banking's rules and regulations; and
2) provide a full accounting to each buyer no less than once a year.
As discussed above, we found that Mr. Angle created an Amended
Sales Agreement to comply with the provisions of the Consent Agreement,
and presented it to the Smiths prior to the thirty day time limit. See N.T. at
29. Further, while the Smiths may argue that Angle was not in compliance
with the Consent Agreement because they did not receive an accounting
from the Angles, the Smiths vacated the Property in October of 2013, less
than one year after the Consent Agreement was created. See id. at 56.
30
R-250a
Because the Consent Agreement only requires the full accounting once a
year, the Smiths cannot validly claim that Angle did not abide by the
Consent Agreement by failing to produce a full accounting within a nine
month time period. Therefore, because the Smiths did not produce any
credible evidence that Angle did not abide by the terms of the Consent
Agreement, it is axiomatic that we could not have erred by failing to
consider Angle's breach of these terms. Therefore, we respectfully submit
that the Smiths' alleged error thirteen should be dismissed.
III. Quantum Meruit
Assuming arguendo, that Angle's claim for breach of contract fails
because the settlement offer does not constitute a valid contract, we find
that Angle's claim for quantum meruit also succeeds. Quantum Meruit is a
claim that a plaintiff can pursue when a claim "sounding in breach of express
contract is not available." Zawada v. Pa. Sys. Bd. of Adjustment, 140 A.2d
335, 338 (Pa. 1958). Quantum meruit is essentially a claim for unjust
enrichment, which "implies a contract [and] requires the defendant to pay to
the plaintiff the value of the benefit conferred." Durst v. Milroy, 52 A.3d
357, 360 (Pa. Super. 2012). In a quantum meruit action, the plaintiff must
prove: (1) [the] benefits conferred on defendant by plaintiff;
(2) appreciation of such benefits by defendant; and (3) acceptance and
retention of such benefits under such circumstances that it would be
inequitable for defendant to retain the benefit without payment of value.
31
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See id. The application of the doctrine depends on the particular factual
circumstances of the case at issue. Schneck v. K.E. David, Ltd., 666 A.2d
327, 328 (Pa. Super. 1995).
"In determining If the doctrine applies, the focus is not on the intention
of the parties, but rather on whether the defendant has been unjustly
enriched." Id. To recover under a quantum meruit cause of action, the
plaintiff must demonstrate that the defendant either wrongfully, or
passively, received a benefit that it would be unconscionable for the
defendant to retain. See Limback Co., LLC v. City of Philadelphia, 905 A.2d
567, 575 (Pa. Commw. 2006). Further, "[w]here unjust enrichment is
found, the law implies a quasi-contract which requires the defendant to pay
to plaintiff the value of the benefit conferred. In other words, the defendant
makes restitution to the plaintiff in quantum meruit." Lackner v. Glosser,
892 A.2d, 34 (Pa. Super. 2006) (quoting AmeriPro Search, Inc. v. Fleming
Steel Company, 787 A.2d 988, 991 (Pa. Super. 2001)).
A. It was not an error of law to enter judgment in favor of Angle
and against the Smiths under the theory of quantum meruit.
In the Smiths' Concise Statement, errors one, two, three, and twelve,
the Smiths argue that the court erred by entering judgment in favor of Angle
and against the Smiths under the theory of quantum meruit. Based upon
the record before the court, it is respectfully submitted that it was not an
error of law to enter judgment in the amount of $7,740.19 in favor of Angle
on the basis of quantum merutt.
32
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Through the Sales Agreement and Mr. Angle's testimony, Angle proved
that the Angles conferred a benefit in the form of home ownership upon the
Smiths. Due to previous financial difficulties, Mrs. Smith acknowledged that
the Smiths could not have afforded to purchase a home without the Sales
Agreement offered by Angle. See N.T. at 63-64. Following the admissions
in the Consent Agreement which rendered the Sales Agreement void, the
Angles conferred a benefit on the Smiths by allowing them to continue to
reside in the Property without a formal agreement. The Smiths appreciated
this benefit by residing in this Property for a period of four months without
paying property taxes or monthly payments for the Property. See id. at 41,
47. When confronted with the missing monthly payments in June of 2013,
Mrs. Smith promised Angle that she would remedy all of the missing
payments. See id. at 40. The Smiths did not honor Mrs. Smith's promise to
Angle. See id. at 41, 47. Angle demonstrated that the Smiths appreciation
of this benefit was unjust because the Smiths wrongfully received four
months of free housing from the Angles. See Umback, 905 A.2d at 575.
Therefore, because Angle has proven the benefit of housing conferred on the
Smiths by Angle, the appreciation of the benefit of free housing by the
Smiths, and the acceptance and retention of the free housing under unfair
circumstances, we respectfully submit that we did not err in finding in favor
of Angle on the quantum meruit count. As such, we respectfully submit that
the Smiths alleged errors, one, two, three, and twelve, should be denied.
33
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B. The court did not err in calculating the Smiths' liability to
Angle under the theory of quantum meruit.
In the Smiths' Concise Statement, the Smiths allege through errors
five, six, seven, nine, eleven, and fourteen that the court erred in calculating
the Smiths' liability to Angle under the theory of quantum meruit. Based
upon the record before the court, we disagree.
The Pennsylvania Superior Court reviews a challenge to the calculation
of damages under an abuse of discretion standard. See Liss & Marion, P.C.
v. Recordex Acquisition Corp., 937 A.2d 503, 516 (Pa. Super. 2007), aff'd,
983 A.2d 652 (Pa. 2009). When reviewing an award of damages, the
Pennsylvania Superior Court is mindful that:
[t] he determination of damages is a factual question to be
decided by the fact-finder. The fact finder must assess the
testimony, by weighing the evidence and determining its
credibility, and by accepting or rejecting the estimates of
damages given by the witnesses.
Although the fact-finder may not render a verdict based on sheer
conjecture or guesswork, it may use a measure of speculation in
estimating damages. The fact-finder may make a just and
reasonable estimate of the damages based on relevant data, and
in such circumstances may act on probable, inferential, as well
as direct and positive proof.
Id. at 514 (internal citations omitted).
i. Liquidated Damages Under the Sales Agreement and
Home Improvements
Through alleged errors, five, six and nine, the Smiths allege that we
erred by failing to consider that that the Smiths expended money in relation
to the Property in calculating damages. Specifically, the Smiths alleged that
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we failed to consider that Angle retained the Smiths' $7,500 down payment
on the Property as liquidated damages under the Sales Agreement, and that
the Smiths expended $5,000 in home improvements to the Property while
they resided there. See Concise Statement at ~~ 5, 6, 9. We disagree with
the Smiths contention that we should have considered these elements in
calculating liability under a theory of quantum meruit.
As discussed above, a plaintiff's success under a theory of quantum
meruit requires the defendant to pay to plaintiff the value of the benefit
conferred. See Lackner v. Glosser, 892 A.2d, 34 (Pa. Super. 2006) (quoting
AmeriPro Search, Inc. v. Fleming Steel Company, 787 A.2d 988, 991 (Pa.
Super. 2001)). We could not find any case law to support the Smiths'
contention that previous monetary expenditures by the Smiths related to the
Property should be deducted from the calculation of the value of the benefit
the Smiths received by living in the Property for four months without making
their monthly payments or paying taxes. Additionally, while the law
supports a tenant's recovery for improvements made to the property of
another through a claim for quantum meruit, the Smiths did not bring a
claim or counter-claim against Angle to recover these expenditures in
quantum meruit. See generally Chesney v. Stevens, 644 A.2d 1240, 1243-
44 (Pa. Super. 1994) (stating that tenant can recover for home
improvement made to landlord's property).
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Further, assuming arguendo, that Angle's award under the theory of
quantum meruit should be reduced by the amount of the down payment
and/or home improvements, the Smiths did not present sufficient evidence
at the time of trial for the court to adjust Angle's award accordingly. Mrs.
Smith claimed to have made $5,000 In home improvements to the Property.
See N.T. at 56. However, as discussed above, we did not find Mrs. Smith's
testimony credible. Mrs. Smith provided no corroborating evidence in the
form of receipts for the home improvements, or pictures from which Mrs.
Smith's testimony could be corroborated. See generally id. Additionally, the
fact that Mrs. Smith testified that the two appraisals of the Property valued
the home at a lesser value following the Smiths' alleged improvements, than
the price at which the Smiths purchased the Property, supports the
contention that Mrs. Smith did not accurately calculate the amount the
Smiths spent to improve the Property. See id. at 54. Further, the Smiths did
not present any evidence regarding the Angles' retention of the $7,500 down
payment after the Sales Agreement was rendered void. See generally id.
Therefore, because case law does not require that an award in quantum
meruit consider outside expenditures, and because the Smiths did not
provide credible evidence of the outside expenditures they believe should be
included in the calculation of damages, we respectfully submit that we did
not err, and that the Smiths' alleged errors, five, six, and nine should be
denied.
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ii. Monthly Payments and Real Estate Taxes
Through alleged errors seven and eleven, the Smiths claim that we
erred in calculating the amount due to Angle under the theory of quantum
'
meruit by including real estate taxes in the verdict and by failing "to consider
that the payments in the amount of [$1,370.34] per month were for both
principal and interest. In fact, the interest was, according to the
Department of Banking was (sic] excessive." See Concise Statement at
~~ 7, 11. However, we carefully calculated the amount due based upon
Angle's success on the quantum meruit claim by assessing the testimony,
determining that Angle's testimony was credible, accepting Angle's
calculations that the fair rental value for the Property approximated
$1,370.34, and by crediting the course of conduct of the parties following
the declaration that the Sales Agreement was void in January of 2013. See
Liss & Marion, P.C. v. Recordex Acquisition Corp., 937 A.2d 503, 516 (Pa.
Super. 2007), aff'd, 983 A.2d 652 (Pa. 2009). Therefore, we disagree with
the Smiths' assertions.
As discussed above, following the Consent Agreement of January 18,
2013, the provisions of the Sales Agreement were void and could not be
enforced against the Smiths. However, Angle testified that the Smiths
continued to make the monthly payments of $1,370.34 in February, March,
April, and May of 2013. See N.T. at 39. Mrs. Smith verified that she
continued to make payments in this amount, and also stated that she paid
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taxes related to the Property in April of 2013. See id. at 50-52. As the
finder-of-fact we were entitled to weigh this testimony, and we determined
that Mrs. Smith's course of conduct in abiding by the terms of the Sales
Agreement, even alter it had been rendered void, set the fair market value
for rental payments at $1,370.34. Additionally, because Mrs. Smith paid
taxes related to the Property in April of 2013, we inferred that Mrs. Smith
accepted that, as it had been under the Sales Agreement, she was required
to pay the taxes associated with the Property. Therefore, because we
calculated damages by assessing the testimony, weighing the evidence and
determining its credibility, and by accepting or rejecting the estimates of
damages given by the witnesses, we submit that we properly calculated the
damages owed to Angle under the theory of quantum meruit. See Liss &
Marion, 937 A.2d at 516. Thus, we respectfully submit that the Smiths'
alleged errors, seven and eleven, should be denied.
iii. Payments Following Bankruptcy
Finally, through alleged error fourteen, the Smiths allege that we erred
by failing to consider payments that the Smiths made to Angle alter they
were discharged from bankruptcy. As the testimony of the parties differed
with regards to the amount of monthly payments the Smiths remitted to
Angle following their discharge from bankruptcy, our decision depended on
the credibility of the parties' testimony. "It is well-established that the
credibility of witnesses is an issue to be determined by the trier of fact."
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Woods v. Cicierski, 937 A.2d 1103, 1105 (Pa. Super. 2007). The appellate
courts have determined that the trier of fact is in the best position to judge
the credibility of witnesses, and therefore the appellate courts will "respect a
trial court's findings with regard to credibility and weight of the evidence
[after a bench trial] unless the appellant can show that the court's
determination was manifestly erroneous, arbitrary and capricious[,] or
flagrantly contrary to the evidence." J.J. Deluca Co., Inc. v. Toll Naval
Assocs., 56 A.3d 402, 410 (Pa. Super. 2012) (internal quotation marks
omitted).
Here, Angle testified that the Smiths resided in the Property without
making monthly payments in June, July, August, and September of 2013.
See id. at 41, 47. Further, Angle testified that the Smiths did not pay the
taxes associated with the Property in 2013. See id. Pursuant to Angle's
recollection, the Smiths vacated the Property in October of 2013. See id.
Conversely, Mrs. Smith testified that she did not remit monthly payments to
Angle in May, July, or August of 2013. See id. at 50, 52. Additionally, Mrs.
Smith claimed that she vacated the Property in the first week of September.
See id. at SO. Besides their testimony, neither party presented evidence
that corroborated the months that the Smiths did not remit payments, or the
month that the Smiths vacated the property. See generally id. However,
based upon our prior findings that the testimony of Mrs. Smith was not
credible, and that the testimony of Angle was credible, we are inclined to
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believe Angle's timeline of events. Through the course of the trial, Mrs.
Smith presented a series of statements that were contradicted by previous
evidence, and we do not believe that she presented truthful evidence
concerning how the Smiths left the Property, and the timeline under which
they vacated the Property. Therefore, because we find that Angle's
testimony to be credible, which provides that the Smiths remitted only one
payment following their discharge from bankruptcy was credible, our
calculation based upon a credibility determination should not be disturbed on
appeal. See J.J. Deluca, 56 A.2d at 410. Thus, we respectfully submit that
we did not err by failing to consider payments that the Smiths made to
Angle after they were discharged from bankruptcy, and request that the
Smiths' alleged error fourteen, be denied.
CONCLUSION
For the reasons set forth above, we respectfully suggest that the
Smiths' appeal lacks merit and should be dismissed.
BY THE COURT:
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