J-A12019-17
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
DANIEL P. WUKICH, DANIEL J. : IN THE SUPERIOR COURT OF
WUKICH, TAMMY L. WUKICH, QUEST : PENNSYLVANIA
HEALTHCARE DEVELOPMENT, INC., :
QUEST REALTY PARTNERSHIP, :
AMERICAN PORTABLE MEDICAL :
SERVICES, INC., LOYALHANNA :
HEALTH CARE ASSOCIATES, :
WILLIAM PENN HEALTH CARE :
ASSOCIATES, ALLSTAR THERAPIES, : No. 1212 WDA 2016
INC., ALLSERVE THERAPIES, INC., A :
LA CARTE SUPPORT SERVICES, INC., :
EXPRESS MOBILE DIAGNOSTIC :
SERVICES, LLC, DANAN :
HEALTHCARE CONSULTING GROUP, :
INC. :
:
Appellants :
:
:
v. :
:
:
PENN SECURITY BANK AND TRUST :
CO., CRAIG BEST, GREG MISTERMAN
Appeal from the Judgment Entered September 28, 2016
In the Court of Common Pleas of Westmoreland County
Civil Division at No(s): No. 13CI01193
BEFORE: OLSON, SOLANO, and RANSOM, JJ.
MEMORANDUM BY RANSOM, J.: FILED AUGUST 08, 2017
In this lender liability action, Appellants appeal from the judgment
entered September 28, 2016, following a non-jury trial resulting in a verdict
in favor of Appellees, Penn Security Bank & Trust Co. (“Penn Security”) and
two of Penn Security’s principals, Craig Best and Greg Misterman. We
affirm.
J-A12019-17
The facts and procedural history are as follows. In August 2007,
Appellants Loyalhanna and William Penn entered into a loan agreement with
NexTier Bank for an aggregate principal amount of $9,300,300.00 (“NexTier
Loan Agreement”). Pls. Amended Compl., 10/18/2013, at ¶ 19. The
NexTier Loan Agreement and promissory note were executed by Appellant
Daniel J. Wukich, President of Appellant Quest Healthcare and sole general
partner of Loyalhanna and William Penn, along with Appellants Daniel P. and
Tammy Wukich, Quest Healthcare, American, and Allstar Therapies as
guarantors. Id. at ¶¶ 19-21.
In 2011, Appellants Daniel J. and Daniel P. Wukich sought financing for
a new business venture with Appellee Penn Security Bank based on their
previous knowledge and relationship with Appellee Craig Best, Penn Security
Bank Chief Executive Officer (CEO). Id. at ¶ 24. To finance the
construction of a new assisted living facility, Appellants wanted to use their
William Penn property as collateral. Trial Ct. Op. (TCO), 4/13/2016, at 2.
However, Appellants would first have to pay off the outstanding mortgage
loan held by NexTier Bank. See id. Under the terms of the NexTier Loan
Agreement, early payoff of the mortgage would result in a “hefty
prepayment penalty.” Id.1
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1
Specifically, the NexTier loan agreement provided in relevant part that “any
Prepayment arising out of refinancing through another lending source other
than Lender of principal shall be subject to a prepayment fee of three (3%)
percent of any Prepayment during years 1 through 5 of the Loan Term, two
(Footnote Continued Next Page)
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According to Daniel J. Wukich, Appellee Best had the idea that Penn
Security could issue a personal loan in an amount sufficient to pay off the
NexTier loan, using a structure that might avoid the prepayment penalty.2
The idea was that the prepayment penalty might be avoided if the NexTier
loan was paid off by unnamed borrowers, rather than by a third party lender
such as Penn Security directly. See id. at 2-3. In February 2011, Appellee
Greg Misterman, Penn Security Executive Vice President (VP), prepared a
memorandum entitled Loan Presentation Summary for the Penn Security
Board of Directors, which described a loan structure in which the bank would
lend $7,100,000.00 to an affiliate, which in turn would enable the Wukiches
to pay off the remaining balance/principal of the NexTier Loan. The board
memorandum stated that this “structure is being used to avoid a significant
prepayment penalty.” Mem., 2/15/2011, at 4 (“board memorandum”).
On April 26, 2011, Appellants executed the Penn Security Loan
Agreement (“Agreement”). At trial, Appellee Misterman recalled giving his
_______________________
(Footnote Continued)
(2%) percent of any Prepayment during years 6 through 12 of the Loan
Term and one (1%) of any Prepayment during the remainder of the loan
term.” Pl. Amended Compl. at ¶ 22 (quoting NexTier Loan Agreement ¶ 5
and Promissory Note ¶ E, 8/31/2007).
2
The Wukiches had an extended history of conviviality and partnership with
Penn Security Bank, from which both parties benefitted. Appellee Craig Best
helped Wukich obtain financing in 2007 to pay off a balloon payment on a
separate mortgage and Wukich became a stockholder in Penn Security.
Wukich was instrumental in Best’s ascension to President/Chief Executive
Officer of Penn Security. Trial Ct. Op., 4/13/2016, at 5.
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opinion that the penalty might be avoided. Trial Ct. Op., 4/13/2016, at 3.
Misterman denied promising on Penn Security’s behalf to take care of the
penalty if it was imposed by NexTier. Misterman also denied discussing the
prepayment penalty at closing. Id. at 3. None of their discussions were
incorporated into the final Penn Security loan closing documents. Id. The
primary purpose of the Agreement was for Appellants to borrow
$7,100,000.00 from Penn Security to enable Appellants to embark on a new
project, i.e. the assisted living facility. See id.
On April 29, 2011, Daniel J. Wukich used the Penn Security loan to pay
off the NexTier loan’s principal balance of $7,121,628.69 in full. See id. at
6. Thereafter, a court entered a declaratory judgment in favor of NexTier
Bank and against Appellants for the prepayment penalty that was owed
($206,448.32), plus attorney’s fees, costs, and interest.3
In 2013, Appellants filed suit against Appellees, Penn Security Bank,
Best, and Misterman, asserting joint and several liability for fraud, negligent
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3
On July 18, 2011, NexTier Bank filed a complaint in the Butler County
Court of Common Pleas for a declaratory judgment against Appellants for
the prepayment penalty that was owed ($206,448.32), plus attorney’s fees,
costs, and interest. See NexTier Bank, N.A. v. Loyalhanna Health Care
et al., No. A.D. 11-10911 (CCP Butler Cty. 2011). On November 21, 2012,
the Butler County court found in favor of NexTier Bank and entered a
judgment as a matter of law against Appellants for the prepayment penalty,
plus costs of litigation and interest. See Pl. Amend. Compl., 10/18/2013, at
¶¶ 35-36. This Court affirmed the judgment. See NexTier Bank, N.A. v.
Loyalhanna Health Care et al., 1994 WDA 2012 (Pa. Super. Ct. July 17,
2013) (unpublished memorandum).
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misrepresentation, promissory estoppel, and common law indemnification
arising out of Best and Misterman’s oral representations regarding the
prepayment penalty that allegedly induced Appellants to enter into the
Agreement. See Pls. Amended Compl., ¶¶ 38-67. In December 2015, a
nonjury trial was held.4 In April 2016, the court rendered a verdict in favor
of Appellees. See TCO, 4/13/2016, at 7-8.
Appellants timely filed a post-trial motion seeking judgment
notwithstanding verdict (JNOV) or in the alternative, a new trial. Their post-
trial motion was denied. The court subsequently issued an amended
opinion. See TCO, 7/28/2016, at 1.
Appellants timely appealed and filed a court-ordered 1925(b)
statement. The trial court issued a 1925(a) opinion, incorporating its earlier
decisions. See 1925(a) Opinion, 9/12/2016.5
On appeal, Appellants raise the following seventeen issues:
1. The [c]ourt erred in denying [Appellants] a jury trial when
several of their claims related to the individual liability of
[Appellees] Misterman and Best, and the alleged waiver of the
[Appellants’] constitutional right to a jury only applied to
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4
The lower court denied Appellants’ request for a jury trial, finding that they
had waived the right to a jury trial under the terms of the loan agreement.
5
Initially, Appellants appealed on August 10, 2016, from the order denying
this post-trial motion. This Court directed Appellants to provide proof that
judgment was entered on the trial court’s verdict. Appellants timely
complied. Accordingly, we deem this appeal timely. See Minich v. City of
Sharon, 472 A.2d 706, 707 (Pa. Super. 1984).
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claims against the Bank.
2. In its written [o]pinion, the [c]ourt failed to address
[Appellants’] causes of action and elements for negligent
misrepresentation, promissory estoppel, and indemnification,
focusing instead on [Appellants’] fraud claim alone.
3. The representations and promises of the expert [Appellees]
concerning the prepayment penalty, upon which [Appellants]
reasonably relied, caused [Appellants] to incur liability and
expenses which they would not have incurred but for
[Appellees’] conduct.
4. Consequently, [Appellees] are liable, at common law, under
theories of negligent misrepresentation and estoppel, and are
liable to indemnify [Appellants] for the losses they have
incurred due to [Appellees’] broken promises.
5. The [c]ourt’s failure to consider whether [Appellees] were
liable for negligent misrepresentation, promissory estoppel, or
common law indemnification, the elements of which are
different than those required to prove fraud, is an error
entitling [Appellants] to a new trial.
6. The [c]ourt erred in applying the parol evidence rule to
exclude or disregard extrinsic evidence of [Appellees’]
promises to take responsibility if NexTier imposed the
prepayment penalty.
7. The [c]ourt erred in ignoring the internal Penn Security
memorandum, which was provided to the Bank’s Board of
Directors, which stated that the Penn Secuirty loan was being
utilized to avoid the significant prepayment penalty. (Trial
Exhibit 5, p. 4.)
8. The [c]ourt erred in concluding that any discussions about the
prepayment penalty were mere good faith expressions of
advice and opinion, where Penn Security’s own internal
memorandum indicated that the loan was used to avoid the
prepayment penalty, where the evidence established [that
Appellees] were experts upon whom [Appellants] could rely,
and where counsel for [Appellees], on behalf of those
[Appellees], stipulated that it would require a bank to know
whether a prepayment penalty could be avoided.
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9. The [c]ourt erred in concluding that the final Penn Security
loan closing documents were integrated agreements.
10. The [c]ourt erred by ignoring and/or failing to consider
evidence and testimony that the [Appellees] did not give
[Appellants] an opportunity to review the loan documents
before the closing, and instead represented again that the
prepayment penalty would be avoided or taken care of by the
[Appellees] Bank [sic], who committed, at a minimum, fraud
in the execution or negligent misrepresentation (which was
not addressed by the [c]ourt).
11. The [c]ourt erred in ignoring the final letter from NexTier
Bank, which indicated that the amount owed, including the
prepayment penalty, exceeded $7.3 million.
12. The [c]ourt erred in concluding that the total payoff
amount of the NexTier loan, including the prepayment
penalty, was $7,121,628.69, as this was contrary to the
evidence presented by [Appellants], which was not
controverted by [Appellees].
13. The [c]ourt erred in concluding that [Appellants] were
required to approach or notify [Appellees] immediately upon
being sued by NexTier in order to recover, and by ignoring, in
any event, [Appellants’] testimony that they did believe [that]
they advised [Appellees] upon being sued by NexTier through
their former in-house counsel.
14. The [c]ourt erred in concluding that the primary purpose of
the financing from Penn Security was not to avoid the
prepayment penalty, where all evidence suggested that
avoiding the prepayment penalty was a significant purpose of
the loan, where the uncontroverted evidence showed that
[Appellants] had several options from banks with similar or
better financial terms, and where the person in charge of the
project for [Appellants], with the authority to choose the bank
(Daniel P. Wukich) testified that the only reason he selected
the [Appellee] Bank over the other lenders was because of its
representations regarding the prepayment penalty.
15. The [c]ourt erred by ignoring uncontroverted testimony
that [Appellees] Best and Misterman would cause [Appellee]
Bank to take care of the prepayment penalty if it was
assessed by NexTier, notwithstanding the [Appellees’]
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representations.
16. The [c]ourt erred in concluding that the Penn Seucirty loan
proceeds were sufficient to cover the principal and interest on
the NexTier loan, as well as the prepayment penalty.
17. The [c]ourt erred in placing undue reliance on the self-
serving testimony of [Appellee] Craig Best regarding his
statements of ‘opinion,’ where the uncontroverted evidence
and admission of the [Appellees], in writing, was that the loan
was being utilized to avoid a significant prepayment penalty,
thus making his self-serving testimony incredible per se.
Appellants’ Br. at 27-30 (reciting issues presented in Appellants’ 1925(b)
statement).
It is well-established that a 1925(b) statement “must be ‘concise’ and
‘coherent’ such that the trial judge may be able to identify the issues to be
raised on appeal, and the circumstances must not suggest the existence of
bad faith.” Jiricko v. Geico Insurance Company, 947 A.2d 206, 211 (Pa.
Super. 2008). Where the statement is so incoherent, confusing, or
redundant that it impairs appellate review, issues in the statement are
deemed waived. Jiricko, 947 A.2d at 213. “Specifically, this Court has held
that when appellants raise an ‘outrageous’ number of issues in their 1925(b)
statement, the appellants have ‘deliberately circumvented the meaning and
purpose of Rule 1925(b) and ha[ve] thereby effectively precluded appellate
review of the issues [they] now seek to raise.’” Id. (quoting Tucker v. R.M.
Tours, 939 A.2d 343, 346 (Pa. Super. 2007) (quoting Kanter v. Epstein,
866 A.2d 394, 401 (Pa. Super. 2004) (finding issues waived where concise
statement was “anything but concise”).
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We caution appellants against presenting voluminous and redundant
issues on appeal. In their brief, Appellants effectively reorganized these
issues into five arguments, divided with an appropriate number of
subheadings, and effectively reduced a number of the redundant issues.
See Pa.R.A.P. 2119 (“The argument shall be divided into as many parts as
there are questions to be argued[.]”). Here, the trial court has not indicated
that its ability to review the issues presented was impeded by Appellants’
lengthy statement. Accordingly, we decline to find waiver and will proceed
to address the questions in the order presented in their arguments. See
Appellants’ Br. at 4-5. However, the issues not raised in Appellants’
argument section of the brief are deemed waived for lack of development.
Pa.R.A.P. 302, 2101.6
Appellants have referenced standards of review for both JNOV and a
new trial. See Appellants’ Br. at 3. We will evaluate Appellants’ issues
based on the specific request for relief included in the relevant analysis.
See Irwin Union Nat. Bank & Trust Co. v. Famous, 4 A.3d 1099, 1103
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6
We will address the issues raised in their arguments in the following order:
(1) whether Appellants’ waived their right to a jury trial; (2) whether the
evidence established their claims for promissory estoppel, negligent
misrepresentation, and common law indemnification; (3) whether the court
erred in rendering its legal conclusion that the agreement was fully
integrated agreement and whether the parol evidence rule applied; (4)
whether the court failed to consider certain evidence; and (5) whether the
court properly assessed the weight of Best’s testimony. See Appellant's Br.
at 5-6. After careful review, we deem issues eight and thirteen waived.
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(Pa. Super. 2009) (noting that “[w]hen deficiencies in a brief hinder our
ability to conduct meaningful appellate review, we may dismiss the appeal
entirely or find certain issues to be waived”) (citing Pa.R.A.P. 2101).
Our standard of review is well-settled:
Our appellate role in cases arising from non-jury trial verdicts is
to determine whether the findings of the trial court are
supported by competent evidence and whether the trial court
committed error in any application of the law. The findings of
fact of the trial judge must be given the same weight and effect
on appeal as the verdict of a jury. We consider the evidence in a
light most favorable to the verdict winner. We will reverse the
trial court only 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. However, [where] the issue ... concerns a
question of law, our scope of review is plenary.
The trial court's conclusions of law on appeal originating from a
non-jury trial are not binding on an appellate court because it is
the appellate court's duty to determine if the trial court correctly
applied the law to the facts of the case.
Stephan v. Waldron Elec. Heating and Cooling LLC, 100 A.3d 660, 664–
65 (Pa. Super. 2014) (quoting Wyatt, Inc. v. Citizens Bank, 976 A.2d
557, 564 (Pa. Super. 2009) (internal citations omitted)). Although the trial
court does not provide a detailed legal analysis in its opinion, “this Court
may affirm a decision of the trial court when it is correct on any legal ground
without regard to the ground upon which the trial court relied.” Williams v.
Wade, 704 A.2d 132, 135 (Pa. Super. 1997).
First, Appellants seek a new trial based on the allegation that the trial
court erred in denying their constitutional right to a jury trial. According to
Appellants, the jury trial waiver in the Agreement with Penn Security Bank
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did not necessarily apply to the claims asserted against Appellees Best and
Misterman individually. Appellants also contend that it is not certain
whether their claims arose out of the Agreement so as to implicate the
waiver. See Appellants’ Br. at 11-12 (citing in support PA. CONST. Art. 1, §
6).
In response, Appellees argue that the jury trial waiver in the
Agreement applied to Penn Security and its agents for all claims arising from
the oral statements made during the course of negotiations prior to
execution of the Agreement. See Appellees’ Br. at 40 (citing in support
persuasive authority from the Third Circuit, Tracinda Corp. v. Daimler
Chysler AG, 502 F.3d 212, 225 (3d Cir. 2007), holding: “[W]hen a valid
contractual jury trial waiver provision applies to a signatory corporation, the
waiver also applies to nonsignatory directors and officers seeking to invoke
the waiver as agents of the corporation.”).
Here, the trial court found that the jury trial waiver applied equally to
claims against Penn Security and its agents because Appellees Best (as CEO)
and Misterman (as VP) were acting on behalf of and in their capacity as
agents of Penn Security when the acts underlying the causes of action arose.
See 1925(a) Opinion, 9/9/2016, at 2. Our standard of review is as follows:
The interpretation of any contract is a question of law and this
Court's scope of review is plenary. Moreover, we need not defer
to the conclusions of the trial court and are free to draw our own
inferences. In interpreting a contract, the ultimate goal is to
ascertain and give effect to the intent of the parties as
reasonably manifested by the language of their written
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agreement. When construing agreements involving clear and
unambiguous terms, this Court need only examine the writing
itself to give effect to the parties' understanding. This Court
must construe the contract only as written and may not modify
the plain meaning under the guise of interpretation.
Stephan, 100 A.3d at 665 (quoting Humberston v. Chevron U.S.A., Inc.,
75 A.3d 504, 509–10 (Pa. Super. 2013) (internal quotation marks and
citations omitted)).
An agency is created when the principal deliberately and specifically
grants an agent express authority as to certain matters. Walton v.
Johnson, 66 A.3d 782, 786 (Pa. Super. 2013). The prima facie
demonstration of agency “is the notion that the agent has authority to alter
the principal's relationships with third parties, such as binding the principal
to a contract.” Basile v. H & R Block, 761 A.2d 1115, 1121 (Pa. 2000).7
“The burden of establishing an agency relationship rests with the party
asserting the relationship.” eToll, Inc. v. Elias/Savio Advert., Inc., 811
A.2d 10, 21 (Pa. Super. 2002) (quoting Basile, 761 A.2d at 1120) (citation
omitted).
Here, Penn Security manifested an intention for Best and Misterman to
act as its agents by giving Best and Misterman the authority to negotiate the
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7
See also RESTATEMENT (SECOND) OF AGENCY § 12: Agent as Holder of Power
(“An agent or apparent agent holds a power to alter the legal relations
between the principal and third persons and between the principal and
himself.”).
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loan terms on Penn Security’s behalf. Best executed the contract thereby
binding Penn Security. See Basile, 761 A.2d at 1121. In this case,
Appellants’ claims arise from Best and Misterman’s alleged
misrepresentations during their exercise of apparent authority to act on
behalf of Penn Security. Accordingly, the trial court correctly found that the
individual Appellees were acting as agents of Penn Security.
Moreover, “[i]t is well-settled that the right to a jury trial may be
waived either by conduct or by express statement.” Eighth N.-Val, Inc. v.
William L. Parkinson, D.D.S., P.C., Pension Trust, 773 A.2d 1248, 1256
(Pa. Super. 2001) (citations omitted). Here, the Agreement contained the
following provision in bold font in clear and conspicuous language:
17. WAIVER OF JURY TRIAL. Each of the Borrowers and each of
the Entity Guarantors and William Penn irrevocably waive all and
any right any of them may have to a trial by jury in any action,
proceeding, or claim of any nature regarding the Term Loan, any
of the documents executed in conjunction with the Term Loan or
any transaction contemplated in any such documents. Each of
the Borrowers and each of the Entity Guarantors acknowledge
that the foregoing waiver is knowing and voluntary.
Trial Exhibit 8, Agreement ¶ 17.
Here, the court found that the purpose of the loan was to secure
financing for a new facility by using the William Penn property as collateral.
In order to pledge that property as collateral, Appellants needed to prepay
the NexTier loan. Therefore, prepayment of the loan was a transaction
contemplated by the parties in entering into the Agreement. Accordingly,
the court did not err and a new trial is not warranted.
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Next, we proceed to address issues two, three, four, and five.
Appellants contend that the court erred in failing to consider their causes of
action for promissory estoppel, negligent misrepresentation, and
indemnification. See Appellants’ Br. at 13. In their brief, Appellants’
argument is divided into three subparts. Essentially, they argue that the
evidence presented was sufficient to support each claim. See id. at 13-19.
In response, Appellees contend that the trial court’s factual findings
were sufficient to dispose of Appellants’ claims. See Appellees’ Br. at 13-29.
The trial court declined to address Appellants’ claims individually; it
found that there was simply no basis upon which Appellees should be liable
to Appellants. See TCO, 4/13/2016, at 7; TCO, 7/28/2016, at 4. The trial
court has failed to prove a “reasoned basis” for its decision. See Cooke v.
Eq. Life Assur. Soc. of U.S., 723 A.2d 723, 727 (Pa. Super. 1999)
(declining to remand to trial court to prepare an opinion providing a
reasoned basis for the court’s decision where such reasoning is not fatal for
our review). “Ordinarily, the remedy for non-compliance with the Pa.R.A.P.
1925(a) is a remand to the trial court with directions that an opinion be
prepared and returned to the appellate court.” Gibbs v. Herman, 714 A.2d
432, 435 (Pa. Super. 1998) (quotation omitted).
The record in this particular case is sufficient for appellate review and
in the interests of judicial economy, we shall address the merits of
Appellants’ arguments. See Gibbs, 714 A.2d at 437 (affirming the trial
court’s decision despite noncompliance with Pa.R.A.P. 1925(a)). As noted
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previously, this Court may affirm the trial court’s decision to a deny a new
trial on any proper legal ground. Williams, 704 A.2d at 135.
In order to prevail on any of these claims, Appellants needed to
establish that the evidence more likely than not would enable the factfinder
to find all of the necessary elements of the causes of action were established
by a preponderance of the evidence. Samuel-Bassett v. Kia Motors
America, Inc., 34 A.3d 1, 34-35 (Pa. 2011). We will address each of
Appellants’ claims individually.
In order to maintain an action in promissory estoppel, the
aggrieved party must show that 1) the promisor made a promise
that he should have reasonably expected to induce action or
forbearance on the part of the promisee; 2) the promisee
actually took action or refrained from taking action in reliance on
the promise; and 3) injustice can be avoided only by enforcing
the promise. As promissory estoppel is invoked in order to avoid
injustice, it permits an equitable remedy to a contract dispute.
Crouse v. Cyclops Indus., 745 A.2d 606, 610 (Pa. 2000) (citation
omitted); see also RESTATEMENT (SECOND) OF CONTRACTS § 90.
Appellants argue that Appellees should be estopped from denying that
their oral promises induced Appellants to enter into the Agreement. See
Appellants’ Br. at 15-16. Appellants alleged that they were told by Appellee
Best that “Penn Security would ‘take care of [the prepayment penalty]’ and
make it right.” Id. Appellants alleged that “promises made by Best and
Misterman to pay any prepayment penalty incurred in connection with the
NexTier loan” constituted “a contract in that the promise was supported by
the consideration of [Appellants] entering into the [Agreement] and
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executing guarantees and mortgages.” Id. at ¶ 61.8
The trial court found Appellants to be “experienced, sophisticated,
business-savvy, entrepreneurs who were determined to find financing to
build a new assisted living facility.” TCO, 7/28/2016, at 3. The court found
that Appellees testified credibly that the “creative suggestion and opinion
about the way in which the prepayment penalty might be avoided was just
that – an idea or contrivance that may or may not work.” Id. Moreover,
the court found that “[Appellants] understood it as such, and took a
calculated business risk, when they moved forward with the Penn Security
loan.” Id. Further, the court found the testimony regarding the discussions
“vague and contradictory.” TCO, 4/13/2016, at 4. The trial court concluded
that the representations were not misstatements of fact intended to induce
Appellants to borrow money from Penn Security Bank or to act to their
detriment. TCO, 4/13/2016, at 6-7.
Based on the evidence presented and the trial court’s findings,
Appellants failed to establish the elements necessary to support a cause of
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8
Appellants’ claim is akin to a claim of fraud in the inducement. The trial
courts commonly apply the parol evidence rule to bar the admission of
extrinsic evidence of an oral promise made prior to or contemporaneous with
an Agreement that allegedly induced a party to enter into it when the court
finds that the agreement was fully integrated. See Kehr Packages, 710
A.2d at 1174-75; see also Hart v. Arnold, 884 A.2d 316, 340 (Pa. Super.
2005) (“The rationale for this rule of law is that a party cannot justifiably
rely upon prior oral representations and then sign a contract containing
terms that refute the alleged prior oral representations.”).
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action for promissory estoppel. Specifically, Appellants failed to prove that
the alleged promise was reasonably expected to induce reliance or that
Appellants took action based on the purported promise. Accordingly, we
discern no legal error or abuse of the trial court’s discretion in dismissing
this claim.
Appellants’ negligent misrepresentation claim also fails.
Negligent misrepresentation requires proof of: (1) a
misrepresentation of a material fact; (2) made under
circumstances in which the misrepresenter ought to have known
its falsity; (3) with an intent to induce another to act on it; and
(4) which results in injury to a party acting in justifiable reliance
on the misrepresentation. …[T]he misrepresentation must
concern a material fact and the speaker need not know his or
her words are untrue, but must have failed to make a reasonable
investigation of the truth of these words. Moreover, like any
action in negligence, there must be an existence of a duty owed
by one party to another.
Milliken v. Jacono, 60 A.3d 133, 141 (Pa. Super. 2012) (emphasis in
original) (citations omitted), aff'd, 103 A.3d 806 (Pa. 2014), as modified on
reconsideration (Nov. 12, 2014).
The trial court made the following findings: (1) the alleged
misrepresentations were not material to the 2011 Penn Security loan
transaction; (2) Misterman specifically encouraged Appellants to seek legal
counsel on this issue for a more definitive answer; (3) Appellants were
familiar with prepayment penalty provisions based on past experiences; (4)
Appellants took a calculated business risk when they moved forward with the
terms of the loan; and (5) what actually induced Appellants to enter into the
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Agreement with Penn Security was a burning desire to finance their new
venture, not their desire to avoid the prepayment penalty. TCO, 4/18/2016,
at 7; TCO, 7/28/2016, at 3, 7.
Based on the trial court’s findings, Appellants failed to establish by a
preponderance of the evidence the elements necessary to sustain a cause of
action for negligent misrepresentation. In particular, the court found that
Appellants did not establish by a preponderance of the evidence that the
alleged misrepresentations induced them to enter into the Agreement.
Accordingly, we discern no abuse of the trial court’s discretion or error of law
in dismissing this claim.
Appellants’ claim for indemnification also fails. In order to assert a
right to indemnification, the party must generally establish an underlying
right to indemnification. See McClure v. Deerland Corp., 585 A.2d 19, 22
(Pa. Super. 1991) (noting that such a right includes the legal issue of the
scope of the indemnification agreement). An action for indemnity is an
action at law for damages based on breach of contract. Id. at 23 (citing
Allegheny Plastics v. Stuyvesant Ins. Co., 200 A.2d 775 (1964)).
Appellants’ indemnification claim is based on Wukich’s own testimony
that Best said he or Penn Security would “take care” of the prepayment
penalty. See Appellants’ Br. at 18. The court found Best’s testimony more
credible than Wukich’s and noted that Wukich conceded on cross-
examination that he never discussed the penalty with Best. See TCO,
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4/13/2016, at 3-4. Based on the trial court’s findings, the purported oral
promise of indemnity was not credible. Moreover, we find that Wukich’s
self-serving testimony does not establish an implied oral agreement for
indemnity and that Appellants presented no evidence of a written
indemnification agreement to support their claim. See McClure, supra.
Accordingly, we discern no legal error or abuse of the trial court’s discretion
in rejecting this claim.
Next, we will address issues six and nine. Appellants present a single
argument with regard to these issues in their brief. First, they contend that
the trial court erred in finding the final Penn Security loan closing documents
fully integrated. See Appellants’ Br. at 19. They argue that Appellees failed
to meet their burden in showing that the Agreement was fully integrated at
trial. See id. at 20 (citing in support Kehr Packages, Inc. v. Fidelity
Bank, Nat. Ass'n, 710 A.2d 1169, 1173 (Pa. Super. 1998)). Second,
Appellants suggest that the court erred in applying the parol evidence rule.
See id. According to Appellants, parol evidence was admissible “to explain
and supplement a written agreement where such evidence shows the writing
in question was not intended to, or did not state the entire agreement
between the parties.” See id. at 19-20.
[O]ur standard of review regarding a challenge to the
admissibility of evidence is very narrow; we will only reverse a
ruling of the trial court if there is an abuse of discretion or error
of law. The parol evidence rule states that, absent fraud,
accident, or mistake, parol evidence of a prior or
contemporaneous oral agreement is not admissible to alter,
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vary, modify, or contradict terms of a contract which has been
reduced to an integrated written instrument.
Kehr Packages, 710 A.2d at 1172 (internal citations omitted).
“[B]efore the parol evidence rule is applied, the court must determine,
as a matter of law, whether the writing at issue is an integrated agreement.”
Kehr Packages, 710 A.2d at 1173 (citation omitted). “A written contract is
‘integrated’ if it represents a final and complete expression of the parties'
agreement.” Id. at 1173. To determine if an agreement is a final
expression, the court must assess the text to determine the completeness of
the written agreement that the oral statement purportedly modifies. See id.
at 1173-74.
[W]e are mindful that typically, in cases such as this, ‘where the
cause of action rests entirely on an alleged oral understanding
concerning a subject which is dealt with in a written contract, it
is presumed that the writing was intended to set forth the entire
agreement as to that particular subject.’ Gianni v. R. Russell
& Co., Inc., 126 A. 791 (Pa. 1924) (landmark case discussing
parol evidence rule). Further, it is well established that parol
evidence of a contemporaneous oral agreement is inadmissible if
the subject of such agreement would naturally and normally
have been included in the writing between the parties. Gemini
Equipment [v. Pennsy Supply, 595 A.2d 1211, 1215 (Pa.
Super. 1991)], (stating that ‘parol evidence is not admissible to
show an agreement which normally is found in the written
instrument.’). Therefore, if the written agreement and the
alleged oral agreement ‘relate to the same subject-matter and
are so interrelated that both would be executed at the same
time, and in the same contract, the scope of the [oral]
agreement must be taken to be covered by the writing.’ Gianni,
126 A. at 792.
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Kehr Packages, 710 A.2d at 1174 (emphasis added).9
Although Appellees requested application of the parol evidence rule
several times, the record indicates that the trial court denied Appellees’
motions and declined to apply the parol evidence rule. See, e.g., Notes of
Testimony (N.T.), 12/4/2015, 409. 10 Contrary to Appellants’ contention, all
testimonial and documentary evidence appears to have been factored into
the trial court’s decision. Thus, we reject the premise of Appellants’
allegation of error.
Here, the court’s ruling was not based on application of the parol
evidence rule, but rather on a credibility assessment of the extrinsic
____________________________________________
9
In Kehr Packages, the bank appealed from the entry of a judgment in
favor of the plaintiffs for breach of contract, promissory estoppel, negligent
misrepresentation, and tortious interference with a contract arising out of an
alleged oral agreement made during the course of settlement of a credit
agreement. Kehr Packages, 710 A.2d at 1171-72. On appeal, the bank
argued that the evidence concerning an oral agreement or modification
made during the course of settlement was barred by the parol evidence rule.
Id. at 1172. The parties signed multiple interrelated documents at the time
of settlement and the final agreement did not contain an integration clause.
Notwithstanding, the Superior Court found the credit agreement in that case
was a fully integrated contract because the contents of the alleged oral
agreement and credit agreement “relate to the same subject-matter and are
greatly interrelated.” Id. This Court reversed the trial court since the
alleged oral promise was “the type of thing that would natural and normally
have been contained in the written [c]redit [a]greement.” Id. at 1174.
10
Appellees filed two pre-trial motions in limine to preclude testimony
barred by the parole evidence rule, which the trial court denied. In addition,
Appellees moved to dismiss all claims based on the parol evidence rule after
the evidence was presented at trial. See N.T., 12/4/2015, at 405-409.
Throughout, it was Appellees position that the Agreement constituted a final
expression of Penn Security’s obligations in the loan transaction.
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evidence offered in support of a collateral legal obligation created by an oral
promise. The court found the parol evidence not credible to support a
separate, legally enforceable oral promise to cover the prepayment penalty.
See TCO, 4/13/2016, at 6.
Nevertheless, Appellants argue that the court erred in finding the
Agreement fully integrated because the Agreement does not contain an
integration clause and references other loan documents.11 Appellants’
argument is without merit because it is well-established that the absence of
an integration clause does not preclude the trial court from finding an
agreement to be fully integrated. See Kehr Packages, 710 A.2d at 1173
(reasoning that an agreement need not contain an integration clause if the
written instrument represents the final expression of the parties’
agreement).
Here, the trial court found that “the final written loan agreement
between Penn Security and [Appellants] contains no mention of NexTier’s
prepayment penalty, and this agreement embodies the entire agreement of
the parties.” TCO, 4/13/2016, at 7. Here, the Agreement clearly manifests
the intentions and obligations of both parties by specifying, inter alia, the
____________________________________________
11
Notably, Appellants do not assert that the Agreement fraudulently omitted
any term, such as the alleged promise to cover the prepayment penalty,
from the Agreement, nor do they assert that this omission was a mistake.
Specifically, Appellants claim that the court failed to consider the board
memorandum. See Appellants’ Br. at 20-21. We address this claim, infra.
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amount of the term loan, calculation of interest, payment provisions, and
Appellants’ obligations. Applying the Kehr Packages test summarized
above, the court did not err in finding the Agreement fully integrated.
Furthermore, although the trial court did not apply the parol evidence
rule to exclude evidence, it would have been proper to do so. In this case,
the alleged oral promise to “cover” a prepayment penalty of over
$200,000.00 would naturally and normally have been incorporated into the
terms of the loan and the parties’ integrated Agreement. See Kehr
Packages, 710 A.2d at 1174. Thus, pursuant to Kehr Packages, the parol
evidence rule was applicable. Accordingly, Appellants are not entitled to
relief and we affirm the denial of a new trial on this ground. See Williams,
704 A.2d at 135.
Next, we will address issues seven, ten, and fourteen, in which
Appellants claim that they are entitled to a new trial based on the allegations
that the court failed to consider various pieces of evidence. See Appellants’
Br. at 21-23.
In issue seven, Appellants contend that the court failed to consider the
memorandum to Penn Security’s board of directors. The memorandum
proposed a complicated loan structure and then stated “[t]his structure is
being used to avoid a significant prepayment penalty.” See Appellants’ Br.
at 23 (citing Trial Ex. 5, p. 4). According to Appellants, this memorandum
evidenced that the purpose of the loan agreement was to avoid the
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prepayment penalty.
This memorandum was prepared two months before execution of the
Agreement for the purpose of informing Penn Security’s board about the
proposed loan transaction. The memorandum did not establish any
independent legal obligation of Penn Security to Appellants. Because the
court found that any legal obligations were established by the fully
integrated Agreement, the court did not err in failing to consider the board
memorandum to the extent that it related to matters addressed in the final
written Agreement entered into by the parties. See Kehr Packages, 710
A.2d at 1174-75.
Contrary to Appellants’ argument, the trial court found that “the
primary purpose of the new financing was to finance the new project, not to
avoid a fee.” See TCO, 4/13/2016, at 7. Even if the memorandum was
admissible to explain certain terms of the parties’ Agreement, the
memorandum itself is not binding on Penn Security or Appellants in any
manner. Thus, we defer to the findings of the trial court and we discern no
abuse of discretion.
In issue ten, Appellants assert that the court failed to consider
evidence that they did not have an opportunity to review the loan
documents before closing. Appellants’ Br. at 22 (citing N.T. at 80-83). They
maintain that such evidence supported their claim for fraud in the execution.
See id.
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Our review of the record reveals that Appellants mischaracterize the
notes of testimony cited in their brief. Misterman testified that the loan
documents were redrafted several times. See N.T. at 81. Misterman
forwarded the final version for Appellants to review prior to closing. See id.
He testified that Appellants “were in a hurry to close, [Penn Security and its
officers] were trying to accommodate their schedule.” See id. The actual
closing lasted approximately two hours. Id. at 83-84. Misterman also
denied promising to take care of the NexTier penalty at closing. See id. at
85-86. According to the factfinder:
[Appellants] were moving full steam ahead, and Daniel J.
admitted that even if they had been advised by lenders that they
would have to pay the penalty in order to pay off the existing
NexTier loan, they still would have gone ahead with the new
project.
See TCO, 4/13/2016, at 5-6 (noting that Appellants had also obtained
building permits prior to securing the necessary financing).
Based on our review of the record, Appellants had sufficient time to
review the loan closing documents. As a matter of law, Appellants bore the
risk of any mistake resulting from their failure to include alleged oral
statements at closing into the final agreement.12 Accordingly, no relief is
due.
____________________________________________
12
See, e.g., Step Plan Services, Inc. v. Koresko, 12 A.3d 401, 411 (Pa.
Super. 2010) (quoting RESTATEMENT (SECOND) CONTRACTS § 154: When A Party
Bears the Risk of a Mistake).
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In issue fourteen, Appellants contend that the court failed to consider
testimony regarding the loan options Appellants had discussed with other
banks before entering into the Agreement with Penn Security. See
Appellants’ Br. at 22 (citing N.T. at 295-296). Appellants suggest that they
entered the Agreement with Penn Security based on an alleged arrangement
to avoid the prepayment penalty, despite their “other options.” Their
argument is unconvincing in light of the factfinder’s conclusion that
Appellants decided to work with Penn Security based on their relationship
with Best. See TCO, 4/13/2016, at 5 (“When [Appellants] were frustrated in
their attempts to work with NexTier on obtaining financing for the new
project, they turned to Best, who they had kept apprised of the situation.”).
As the trial court’s findings are supported by the record, see, e.g., N.T. at
201, we discern no abuse of discretion. Accordingly, no relief is due.
Next, we will address issues eleven, twelve, and sixteen. Appellants
combined these issues under a single subheading in their brief, in which they
assert that the trial court erred in concluding that the Penn Security loan of
$7,121,628.69 was sufficient to cover the principal amount and the
prepayment penalty. See Appellants’ Br. at 23. Appellants claim that they
are entitled to relief in the form of JNOV or, in the alternative, a new trial.
See id.
In reviewing the trial court’s denial of JNOV, we must consider all of
the evidence admitted to decide if there was sufficient competent evidence
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to sustain the verdict, drawing all inferences in a manner favorable to the
verdict winner. See V-Tech Services, Inc. v. Street, 72 A.3d 270, 275
(Pa. Super. 2013) (“If any basis exists upon which the [court] could have
properly made its award, then we must affirm the trial court's denial of the
motion for JNOV. A JNOV should be entered only in a clear case.”) (citations
omitted)).
The trial court acknowledged that it had made a numerical mistake in
its opinion dated June 28, 2016,13 however, the court reasoned that this was
harmless error and noted that “this fact is inconsequential in the overall
scheme of things.” Trial Ct. Op., 7/28/2016, at 1, 3. We agree. Moreover,
Appellants make no effort to explain how a contrary finding would affect the
verdict on any specific claim. Thus, Appellants are not entitled to relief.
Accordingly, we affirm the trial court’s denial of JNOV and a new trial.
Finally, we will address Appellants’ fifteenth and seventeenth issues,
which they discuss under a single argument heading in their brief. See
Appellants’ Br. at 23-24. Appellants contend that the court erred in “in
____________________________________________
13
The correct payoff amount was indicated in a letter NexTier Bank sent to
Appellants dated March 29, 2011. See Trial Ct. Op., 7/28/2016, at 2. The
correct payoff amount for the notes and loan, including the penalty, was
$7,334,198.75. See id. The trial court adhered to its prior ruling on the
basis that the $7.1 million loan from Penn Security was relatively close to
the amount of principal amount due, $7,121,628.69, before the prepayment
penalty was imposed. See id. at 2-3 (noting that this amount was “only a
few dollars short (in relative terms) of the proceeds” of the Penn Security
loan).
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placing undue reliance on the self-serving testimony of Craig Best” and
request relief in the form of a new trial. See id. Our standard of review to
a challenge based on the weight of the evidence is as follows.
A new trial will be granted on the grounds that the verdict is
against the weight of the evidence where the verdict is so
contrary to the evidence it shocks one's sense of justice. An
appellant is not entitled to a new trial where the evidence is
conflicting and the finder of fact could have decided either way.
Betz v. Erie Ins. Exch., 957 A.2d 1244, 1252 (Pa. Super. 2008) (citations
and quotation marks omitted).
Ordinarily, ‘[i]t is well established that the credibility of
witnesses is an issue to be determined by the trier of fact. On
appeal this Court will not revisit the trial court's determinations
... regarding the credibility of the parties. Thus, [an] argument,
which would require this Court to revisit and essentially reverse
the [trial court] on his credibility determinations, provides no
grounds for relief.’
Stephan v. Waldron Elec., 100 A.3d 660, 667 (Pa. Super. 2014) (quoting
Woods v. Cicierski, 937 A.2d 1103, 1105 (Pa. Super. 2007)).
In this section, Appellants merely contend that the court improperly
weighted Best’s testimony. The only contradictory evidence they point to is
the board memorandum, which we have addressed supra. As discussed
above, it is not the role of the appellate court to weigh credibility of the
evidence presented at trial on appeal. Stephan, 100 A.3d at 667. We defer
to the findings in the court’s ruling as they are supported by the record and
therefore, they will not be disturbed. Accordingly, no relief is due.
Judgment affirmed.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 8/8/2017
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Wukich, D. v. Penn Security Bank
Combined Opinion