J-A28026-17
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
WILLIAMS PONTIAC COMPANY AND : IN THE SUPERIOR COURT OF
BRUCE L. SANFT : PENNSYLVANIA
:
Appellant :
:
v. :
:
:
PATRIOT BUICK PONTIAC GMC, : No. 1459 EDA 2017
INC. :
:
:
BRUCE L. SANFT :
:
v. :
:
:
PATRIOT BUICK PONTIAC GMC, :
INC. :
Appeal from the Judgment Entered April 3, 2017
In the Court of Common Pleas of Montgomery County
Civil Division at No(s): No. 06-17613,
No. 06-18948
WILLIAMS PONTIAC COMPANY AND : IN THE SUPERIOR COURT OF
BRUCE L. SANFT : PENNSYLVANIA
:
v. :
:
:
PATRIOT BUICK PONTIAC GMC, INC. :
:
Appellant : No. 1964 EDA 2017
:
:
BRUCE L. SANFT :
:
v. :
:
J-A28026-17
PATRIOT BUICK PONTIAC GMC, INC. :
:
:
Appeal from the Judgment Entered April 3, 2017
In the Court of Common Pleas of Montgomery County
Civil Division at No(s): 06-17613,
06-18948
BEFORE: GANTMAN, P.J., PANELLA, J., and DUBOW, J.
MEMORANDUM BY PANELLA, J. FILED JULY 03, 2018
In these consolidated cross-appeals, the parties appeal the judgment
entered in the Court of Common Pleas of Montgomery County, which awarded
Appellee/Cross-Appellant, Patriot Buick Pontiac GMC, Inc. (hereafter
“Patriot”), judgment of $21,219.09, plus interest. We affirm the judgment in
favor of Patriot. But we remand for the limited purpose of calculating and
awarding prejudgment interest in favor of Patriot.
The relevant facts and procedural history of this case are as follows.
Appellants/Cross-Appellees, Williams Pontiac Company and Bruce L. Sanft
(collectively, “Appellants”), signed a contract with Jason Owens and Chad
Helmer to act as executive managers of the Williams Pontiac Company’s car
dealership. Under the terms of the contract, Owens and Helmer were given
control over the day-to-day operations of the business, including procurement
of new vehicles and financing. The contract reflected the parties’ intention for
Owens and Helmer to eventually purchase the dealership. Completion of
certain prerequisites, including the purchase of an associated Nissan
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dealership by a separate entity, were to be concluded prior to the execution
of a sale agreement.
Owens and Helmer formed Patriot, a Pennsylvania corporation, in
anticipation of the sale. The parties extensively negotiated and signed the
Asset Purchase Agreement, which included, among other things, Patriot’s
purchase of customer lists, new cars, certain used cars, accessories, shop
equipment, and assignable leases. The agreement specifically excluded from
the sale any Nissan assets, and money in Williams Pontiac Company’s bank
accounts. The parties also signed a non-compete agreement, and Patriot
issued a promissory note to pay Appellant Sanft an additional $200,000.00 on
top of the sale price, disbursed in 60 monthly installments.
One week before closing, Owens and Helmer provided Appellants with a
trial balance sheet reflecting the value of Williams Pontiac Company’s vehicles
and parts. That balance sheet showed, among other things, trade-in vehicles
valued at $1,021,289.00, accounts receivable at $689,329.08, and the
company bank balance at $165,233.00. On March 7, 2006, the day of closing,
Owens and Helmer provided an updated balance sheet, which all parties
agreed to use to determine the relevant asset values. The updated balance
sheet reflected trade-ins valued at $982,671.51, accounts receivable at
$434,405.78, and a bank balance of $459,493.77. The parties settled on an
amount owed by Patriot to Appellants at closing as $1,647,247.20, which
included $401,363.25 to be paid by the General Motors Acceptance
Corporation (“GMAC”), a vehicle financing company, as part of a financing
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arrangement agreed to by all parties. The parties also agreed to offset the
total by $8,720.68. Thus, Patriot paid Appellants $1,237,163.27 in cash and
bank notes at closing.
Following closing, Appellants claimed they had not received the GMAC
payment, and requested counsel for Patriot make inquiries as to its
whereabouts. After doing so, counsel for Patriot determined the payment had
already been deposited in Appellants’ corporate bank account at the time of
closing, and was thus part of the $459,493.77 bank balance Appellants
retained.
In response, Appellants challenged counsel’s representation that the
GMAC deposit was part of the previously delivered bank balance. Unable to
resolve the dispute, Appellants filed a complaint, arguing Patriot breached its
contract by failing to pay the $401,363.25 still owed as part of the final cost.
The complaint also averred fraudulent misrepresentation, negligent
misrepresentation, conversion, and unjust enrichment, and requested
judgment for $501,347.77, comprised of the remaining contract costs, plus
alleged discrepancies in operating expenses, inventory valuation, and
corporate stock tax. Appellant Sanft also filed a separate complaint for
confession of judgment, claiming Patriot defaulted on its separate promissory
note to pay him a total of $200,000.00 divided into monthly installments after
the sale. Judgment by confession was entered for $208,500.30 on Appellant
Sanft’s complaint.
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Patriot filed preliminary objections, which the court denied. Patriot then
filed an answer, responding to Appellants’ claims, asserting its own
counterclaims, and asking for partial summary judgment. Patriot also filed a
motion to strike or reopen the judgment entered in Appellant Sanft’s favor,
and requesting consolidation of the two complaints filed against it. The court
granted the motion for consolidation, denied the motion for partial summary
judgment, and ordered the judgment previously entered in favor of Appellant
Sanft stricken without prejudice.
The parties proceeded to a five-day bench trial. At the conclusion of
trial, the court ordered the parties to submit a post-trial statement and
proposed findings of fact and conclusions of law, in lieu of presenting closing
arguments to the court. On January 4, 2017, the court set forth its findings of
fact and conclusions of law, ultimately finding in favor of Patriot. Afterward,
the parties filed post-trial motions. The court denied and granted these in part,
and entered judgment in favor of Patriot for $21,219.09. Appellants filed a
notice of appeal, and Patriot filed a notice of cross-appeal.
Preliminarily, we note Appellants raise eleven issues in their appellate
brief. Issue selection is a key hallmark of appellate advocacy. Justice Robert
H. Jackson warned of the dangers of this shotgun approach many years ago:
Legal contentions, like the currency, depreciate through
overissue. The mind of an appellate judge is habitually receptive
to the suggestion that a lower court committed an error. But
receptiveness declines as the number of assigned errors
increases. Multiplicity hints at a lack of confidence in any one. Of
course, I have not forgotten the reluctance with which a lawyer
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abandons even the weakest point lest it prove alluring to the same
kind of judge. But experience on the bench convinces me that
multiplying assignments of error will dilute and weaken a good
case and will not save a bad one.
Ruggero J. Aldisert, J. “Winning on Appeal: Better Briefs and Oral Argument,”
at 130 (2d ed. 2003) (quoting Robert H. Jackson, “Advocacy Before the United
States Supreme Court,” 37 Cornell L.Q. 1, 5 (1951)). This “much quoted”
advice, unfortunately, “often ‘rings hollow’….” Commonwealth v. Robinson,
864 A.2d 460, 480 n.28 (Pa. 2004) (citing Ruggero J. Aldisert, J. “The
Appellate Bar: Professional Competence and Professional Responsibility–A
View From the Jaundiced Eye of the Appellate Judge,” 11 Cap. U.L. Rev. 445,
458 (1982)). But its importance cannot be overstated. See, e.g., Jones v.
Barnes, 463 U.S. 745, 751-752 (1983) (“Experienced advocates since time
beyond memory emphasized the importance of winnowing out weaker
arguments on appeal and focusing on one central issue if possible, or at most
on a few key issues.”); Howard v. Gramley, 225 F.3d 784, 791 (7th Cir.
2000) (“[O]ne of the most important parts of appellate advocacy is the
selection of the proper claims to urge on appeal. Throwing in every
conceivable point is distracting to appellate judges, consumes space that
should be devoted to developing the arguments with some promise, inevitably
clutters the brief with issues that have no chance … and is overall bad appellate
advocacy.”); Aldisert, supra at 129 (“When I read an appellant’s brief that
contains more than six points, a presumption arises that there is no merit to
any of them.”)
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Nevertheless, we proceed by evaluating Appellants’ arguments
according to the following standard of review:
Our appellate role in cases arising from nonjury 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 the 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.
Allegheny Energy Supply Co., LLC v. Wolf Run Min. Co., 53 A.3d 53, 60-
61 (Pa. Super. 2012) (citation and quotation marks omitted; brackets and
ellipses in original). Also, the trial court, as the finder of fact, is free to believe
“all, part[,] or none of the evidence presented.” Ruthrauff, Inc. v. Ravin,
Inc., 914 A.2d 880, 888 (Pa. Super. 2006) (citation omitted). “Issues of
credibility and conflicts in evidence are for the trial court to resolve; this Court
is not permitted to reexamine the weight and credibility determinations or
substitute our judgment for that of the factfinder.” Id. (citation and internal
quotation marks omitted).
In their first issue, Appellants claim the $459,493.77 bank balance
relinquished to Appellants’ control at closing was in addition to the
$1,647,247.20 purchase price. Appellants aver they would not have sold the
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business if they realized the bank balance included $401,363.25 of the final
purchase price. Appellants point to the decrease in value of the assets between
the valuation sheet from February 28, 2006, and the March 7, 2006 closing
checklist the parties agreed to use, as evidence that the purchase price was
too low. Alternatively, Appellants argue even if the parties did not intend for
the bank balance to supplement the purchase price, then Patriot still owes
$401,363.25, as Patriot only paid $1,237,163.27 in cash and promissory notes
if the bank balance is excluded. Appellants conclude this Court must reverse
the trial court’s finding in favor of Patriot on the breach of contract claim. We
disagree.
Contract interpretation is a question of law; therefore, this Court is not
bound by the trial court’s interpretation. See Kraisinger v. Kraisinger, 928
A.2d 333, 339 (Pa. Super. 2007). “In construing a contract, the intention of
the parties is paramount and the court will adopt an interpretation which under
all circumstances ascribes the most reasonable, probable, and natural conduct
of the parties, bearing in mind the objects manifestly to be accomplished.”
Charles D. Stein Revocable Trust v. General Felt Industries, Inc., 749
A.2d 978, 980 (Pa. Super. 2000) (citation omitted).
In determining the intent of the parties to a written agreement,
the court looks to what they have clearly expressed, for the law
does not assume that the language of the contract was chosen
carelessly.
When interpreting agreements containing clear and unambiguous
terms, we need only examine the writing itself to give effect to
the parties’ intent. The language of a contract is unambiguous if
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we can determine its meaning without any guide other than a
knowledge of the simple facts on which, from the nature of the
language in general, its meaning depends. When terms in a
contract are not defined, we must construe the words in
accordance with their natural, plain, and ordinary meaning. As the
parties have the right to make their own contract, we will not
modify the plain meaning of the words under the guise of
interpretation or give the language a construction in conflict with
the accepted meaning of the language used.
On the contrary, the terms of a contract are ambiguous if the
terms are reasonably or fairly susceptible of different
constructions and are capable of being understood in more than
one sense. Additionally, we will determine that the language is
ambiguous if the language is obscure in meaning through
indefiniteness of expression or has a double meaning. Where the
language of the contract is ambiguous, the provision is to be
construed against the drafter.
In re Jerome Markowitz Trust, 71 A.3d 289, 301 (Pa. Super. 2013)
(citation omitted). When a contract is found to be ambiguous, “extrinsic or
parol evidence may be considered to determine the intent of the parties.” Z &
L Lumber Co. of Atlasburg v. Nordquist, 502 A.2d 697, 700 (Pa. Super.
1985) (citations omitted). “While unambiguous contracts are interpreted by
the court as a matter of law, ambiguous writings are interpreted by the finder
of fact.” Kripp v. Kripp, 849 A.2d 1159, 1163 (Pa. 2004) (citation omitted).
To establish a cause of action for breach of contract, a plaintiff must
show: the existence of the contract, including its essential terms; a breach of
duty imposed by the contract; and resultant damages. See McShea v. City
of Philadelphia, 995 A.2d 334, 340 (Pa. 2010).
To prove their breach of contract claim, Appellants presented evidence
of a written contract to sell their business for $1,647,247.20. See Complaint,
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filed 1/25/07, Asset Purchase Agreement, at 1-22. Appellant Sanft testified
that $401,363.25 of the purchase price was to come from an agreement
Owens and Helmer made on behalf of Patriot with GMAC, where GMAC would
lend the money against the value of certain used cars. See N.T., Trial,
10/17/16, at 76. Appellant Sanft testified the GMAC money was to be directly
wired into the company bank account relinquished to him at closing. See id.,
at 78. Appellant Sanft averred he believed the deposit would occur after
closing, because Owens and Helmer were not supposed to apply for GMAC
financing against used cars while in their capacity as executive managers. See
id., at 146. He testified he did not realize at the time of closing that the
anticipated deposit from GMAC was already reflected in the company’s bank
account. See id., at 77. He testified he would not have agreed to the
$1,647,247.20 final purchase price if he knew the GMAC deposit was already
in the bank account, since he expected to make over 2.1 million dollars from
the sale. See id., at 81.
On cross-examination, Appellant Sanft admitted the executive manager
agreement specifically allowed Owens and Helmer to borrow against cars
using GMAC financing. See id., at 147; Complaint, filed 1/25/07, Management
Agreement, at 4. Further, Appellant Sanft acknowledged that under this
financing arrangement, Patriot accepted all of the liability for the used cars.
See N.T. Trial, 10/18/16, at 6-7. And Appellant Sanft admitted he received
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the GMAC deposit in his bank account.1 See id., at 13; N.T. Trial, 10/17/16,
at 200. Counsel for Patriot introduced a document Appellant Sanft signed,
stating he had been paid for all of the assets purchased under the contract.
See N.T., Trial, 10/18/16, at 17. Finally, Appellant Sanft conceded the cash
in the bank account was not part of the Asset Purchase Agreement. See id.,
at 20. Nevertheless, Appellant Sanft testified, “everybody agreed” he would
be “walking away with 2.1 million dollars” after closing. N.T., Trial, 10/17/16,
at 81.
Based on the foregoing, we agree with the trial court that Appellants
failed to prove a breach of duty imposed by the contract occurred here. The
contract expressly excluded the assets in the bank from the purchase price.
See Complaint, filed 1/25/07, Asset Purchase Agreement, at 5. The contract
required Patriot to relinquish the bank balance to Appellants’ control. Patriot
did so. Appellant Sanft himself conceded Patriot delivered him exclusive
access to the bank account, as required by the contract. Appellant Sanft also
admitted the bank balance was left out of the listed purchase price.
Appellants’ claim that the bank balance was an integral part of the
agreement is belied by the terms of the contract. Also, Appellant Sanft’s
testimony concedes the GMAC payment was deposited into the bank account,
____________________________________________
1 The bank balance, which was introduced into evidence by a printout of the
deposits and withdrawals on the account, actually reflects a GMAC deposit of
$390,829.14. The shortfall is due to the twice-counted value of a
SmartAuction car erroneously credited to Patriot. The trial court’s order
reflects a credit to Appellants for this discrepancy.
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as the parties agreed. See N.T., Trial, 10/18/17, at 13; N.T., Trial, 10/17/16,
at 200. Thus, Appellants have failed to prove a breach of duty imposed by the
contract, and are due no relief on this issue.
Appellant’s second breach of contract issue regards an alleged shortfall
in Patriot’s payment for the parts inventory. Appellants maintain the difference
between the parts inventory reflected on the balance sheet provided at closing
and the excluded value of the Nissan parts was $133,112.25. Appellants
contrast this to the parts inventory column on the Asset Purchase Agreement’s
closing checklist, which reflects a final cost of $82,305.61 after Patriot chose
not to buy certain obsolete parts. Appellants demand $33,715.00, which they
assert is the difference between the parts and accessories Patriot retained,
and what Appellants were paid for those parts.
The terms of the Asset Purchase Agreement state that at the time of the
sale, Patriot was obligated to buy from Appellants all of the parts purchased
since October 1, 2004, when Owens and Helmer began acting as executive
managers. See Complaint, filed 1/25/07, Asset Purchase Agreement, at 4.
Patriot had the option to purchase parts stocked before October 1, 2004. See
id. The agreement compels the parties to use the GM Franchisor Parts
restocking guide to determine the value of the parts. See id. The agreement
also includes the following provision: “If at Closing, Buyer and Seller cannot
agree on the value of the GM Franchisor Parts they shall engage an
independent inventory service. The cost of the inventory service shall be
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shared equally by Buyer and Seller.” Id., at 9-10. The contract directed the
inventory, if commissioned, to be taken the Saturday before the closing date.
Here, the parties engaged an independent inventory service, Straub’s
Inventory Control, Inc. Straub’s conducted the inventory on Sunday, March 5,
2006, two days before closing. The inventory service valued all the parts the
company owned at $99,397.24. Patriot elected not to buy $17,091.63 of those
parts stocked before October 1, 2004, for a total of $82,305.61 in parts
purchased. This number is reflected on the closing checklist, and in the final
purchase price.
Appellants’ bald allegation that the book value of the parts was actually
$133,112.25 is irrelevant. The contract explicitly provides for settlement of
discrepancies in the value of parts by an independent inventory service.
Appellants do not contend that Straub’s was not an independent inventory
service, but rather that the value of the parts increased by over $30,000
between when Straub’s conducted its inventory two days before closing, and
when the trial balance sheet was printed. However, under the terms of the
contract, the valuation from the inventory service is the final assessment.
Consequently, Appellants are due no relief on this claim.
Appellants’ third claim challenges the trial court’s finding that the
operating loss for the Williams Pontiac Company was $30,154.76 for the first
week of March 2006. Appellants’ ninth claim argues the court failed to apply
their suggested offsets to Patriot’s counterclaims. Simply, Appellants ask us
to reweigh the evidence presented at trial about the company’s operating
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losses and Appellants’ offsets, and instead find in their favor. As stated above,
we will not substitute our judgment for that of the trial court in its capacity as
the fact-finder. See Ruthrauff, Inc., 914 A.2d at 888.
Appellants next advance a claim that the trial court improperly admitted
hearsay evidence on the basis of the business records exception.
With regard to the admissibility of evidence,
a trial court has broad discretion … and is not required to exclude
all evidence that may be detrimental to a party’s case. Such
rulings on the admission of evidence will not be overturned by this
Court absent a conclusion that the law has been overridden or
misapplied, or the judgment exercised is manifestly unreasonable,
or the result of partiality, prejudice, bias or ill-will, as shown by
the evidence or the record.
Schuenemann v. Dreemz, LLC, 34 A.3d 94, 102 (Pa. Super. 2011) (citations
omitted).
Rule 803 of our Rules of Evidence concerns the business record
exception to the hearsay rule and provides, in pertinent part, as follows.
The following are not excluded by the rule against hearsay,
regardless of whether the declarant is available as a witness:
…
(6) Records of a Regularly Conducted Activity. A record
(which includes a memorandum, report, or data compilation in
any form) of an act, event or condition if:
(A) the record was made at or near the time by – or
from information transmitted by – someone with
knowledge;
(B) the record was kept in the course of a regularly
conducted activity of a “business,” which term includes
business, institution, association, profession, occupation,
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and calling of every kind, whether or not conducted for
profit;
(C) making the record was a regular practice of that
activity;
(D) all these conditions are shown by the testimony of
the custodian or another qualified witness, or by a
certification that complies with Rule 902(11) or (12) or with
a statute permitting certification; and
(E) the opponent does not show that the source of
information or other circumstances indicate a lack of
trustworthiness.
…
Pa.R.E. 803(6).
Mary Ritter, Patriot’s financial comptroller and Williams Pontiac
Company’s former bookkeeper, testified at trial. She told the court she used
a car dealership bookkeeping system referred to as “Reynolds and Reynolds,”
where she tracked all of Patriot’s incoming and outgoing financial transactions.
See N.T., Trial, 10/25/16, at 16. Ritter testified she created a record of these
transactions within the Reynolds and Reynolds system, which Patriot
introduced as Defense Exhibit 25. See id. Ritter authenticated these
documents as business records, testifying she had personal knowledge of each
transaction and recorded these contemporaneously as her regular practice in
the ordinary course of business. See id., at 22. She also testified the records
could not be changed, once entered into the Reynolds and Reynolds system.
See id., at 23. Thus, the court properly admitted Defense Exhibit 25 as a
business record.
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To the extent Appellants challenge the record’s support for Defense
Exhibit 25, that contention goes to the weight of the evidence, not its validity
as a business record. Appellants did not preserve any claim regarding the
weight of the evidence in their Rule 1925(b) statement. Accordingly, it is
waived. See Lineberger v. Wyeth, 894 A.2d 141, 148 (Pa. Super. 2006)
(“An appellant’s failure to include an issue in his Rule 1925(b) statement
waives that issue for purposes of appellate review.”)
Appellants next contest the court’s dismissal of their negligent
misrepresentation claim pursuant to the economic loss rule and the gist of the
action doctrine. Additionally, Appellants challenge the trial court’s dismissal of
their unjust enrichment claim. Neither claim has merit.
“Pennsylvania law generally bars claims brought in negligence that
result solely in economic loss.” Gongloff Contracting, L.L.C. v. L. Robert
Kimball & Associates, Architects and Engineers, Inc., 119 A.3d 1070,
1076 (Pa. Super. 2015) (citation omitted). And Pennsylvania courts have long
recognized the gist of the action doctrine, which operates to keep breach of
contract and negligence claims as separate and distinct causes of action. See
Pittsburgh Const. Co. v. Griffith, 834 A.2d 572, 581-582 (Pa. Super. 2003).
In essence, the doctrine draws a line between tort actions, which are based
upon breaches of duties imposed as a matter of social policy, and contract
actions, which are based upon breaches of duties imposed by mutual
consensus. See id., at 582. The doctrine’s purpose is to preclude a plaintiff
from recasting ordinary breach of contract claims into tort claims. See id. The
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application of the doctrine is an issue of law. See eToll, Inc. v. Elias/Savion
Advertising, Inc., 811 A.2d 10, 15 (Pa. Super. 2002).
“A claim for unjust enrichment arises from a quasi-contract. A quasi-
contract imposes a duty, not as a result of any agreement, whether express
or implied, but in spite of the absence of an agreement, when one party
receives unjust enrichment at the expense of another.” Stoeckinger v.
Presidential Financial Corp. of Delaware Valley, 948 A.2d 828, 833 (Pa.
Super. 2008) (citation and internal quotation marks omitted). “[W]e may not
make a finding of unjust enrichment … where a written or express contract
between parties exists.” Mitchell v. Moore, 729 A.2d 1200, 1203 (Pa. Super.
1999) (citation omitted).
Appellants present an ordinary breach of contract claim, premised on
the existence of a written contract. Despite best efforts, Appellants’ indelicate
attempts to shoehorn that claim into various other legal theories for relief are
unavailing. Appellants failed to present meritorious claims for either negligent
misrepresentation or unjust enrichment. As such, the trial court properly
dismissed both claims.
Appellants also contest the trial court’s decision to grant Patriot’s
motions for compulsory nonsuit on Appellants’ claims for intentional
misrepresentation and conversion.
A court may enter a compulsory nonsuit on any and all causes of action
if at the close of the plaintiffs’ case against the defendant on liability, the court
finds the plaintiffs have failed to establish a right to relief. See Pa.R.C.P.
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230.1(a)(b). “On appeal, entry of a compulsory nonsuit is affirmed only if no
liability exists based on the relevant facts and circumstances, with
[Appellants] receiving the benefit of every reasonable inference and resolving
all evidentiary conflicts in [their] favor.” Baird v. Smiley, 169 A.3d 120, 124
(Pa. Super. 2017) (citations and internal quotation marks omitted).
Intentional misrepresentation occurs when a party makes
(1) a representation; (2) which is material to the transaction at
hand; (3) made falsely, with knowledge of its falsity or
recklessness as to whether it is true or false; (4) with the intent
of misleading another into relying on it; (5) justifiable reliance on
the misrepresentation; and, (6) the resulting injury was
proximately caused by the reliance.
Bortz v. Noon, 729 A.2d 555, 560 (Pa. 1999) (citation omitted). Meanwhile,
conversion is “the deprivation of another’s right of property in, or use or
possession of, a chattel, or other interference therewith, without the owner’s
consent and without lawful justification.” HRANEC Sheet Metal, Inc. v.
Metalico Pittsburgh, Inc., 107 A.3d 114, 119 (Pa. Super. 2014) (citations
and internal quotation marks omitted).
Even giving Appellants the benefit of every reasonable inference, neither
claim has merit. Appellants wholly failed to prove Patriot made a material
misrepresentation, because the bank account balance was not material to the
Asset Purchase Agreement. Further, Appellants did not prove intent to
mislead. Likewise, Appellants’ conversion claim fails. Appellants expressly
gave consent to the transfer of the dealership when they signed the Asset
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Purchase Agreement. Thus, the court properly entered nonsuit on these
frivolous claims.
Finally, Appellants, as well as Patriot in its cross-appeal, claim the court
erred by failing to award prejudgment interest on their claims.
We review the trial court’s denial of prejudgment interest for abuse of
discretion. See Cresci Const. Services, Inc. v. Martin, 64 A.3d 254, 258
(Pa. Super. 2013). “[A] court has discretion to award or not award
prejudgment interest on some claims, but must or must not award
prejudgment interest on others.” Id. (citation omitted). Prejudgment interest
is a matter of right where the amount may be determined from the contract.
See Ely v. Susquehanna Aquacultures, Inc. 130 A.3d 6, 15 (Pa. Super.
2015). “If the breach consists of a failure to pay a definite sum in money or
to render a performance with fixed or ascertainable monetary value, interest
is recoverable from the time for performance on the amount due less all
deductions to which the party in breach is entitled.” Id., at 16 (quoting
Restatement (Second) of Contracts § 354 (1981)) (emphasis added).
Here, the court found Appellants were entitled to breach of contract
damages against Patriot in the following amounts: $11,745.00, for the value
of a SmartAuction car erroneously credited to Patriot; $30,154.76, for
operating losses incurred in the week before closing;2 and $4,401.00, for
____________________________________________
2 Patriot raises one other issue in its cross-appeal: whether it can be held liable
for the operating loss debt in the first week of March 2006, incurred by Owens
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capital stock tax. Additionally, the court found Patriot owed Appellant Sanft
$157,693.32, after Patriot breached its agreement to pay Sanft $200,000.00
as consideration for signing the non-compete clause in the Asset Purchase
Agreement. Based on these findings, Patriot owed Appellants $203,994.08.
However, the court determined Appellants also breached the Asset
Purchase Agreement. Appellants owed Patriot $163,296.95 for accounts
receivable, discussed above, and $61,916.22 for used cars paid for in the
Asset Purchase Agreement that were not delivered, for a total of $225,213.17.
Because Appellants were deemed jointly and severally liable for this amount,
the court offset the award by the money Patriot owed Appellants, for a total
of $21,219.09 owed to Patriot.
Because Appellants are not entitled to any net award after their losses
are offset, they are consequently ineligible for interest or attorney’s fees.
____________________________________________
and Helmer as part of the management agreement. Patriot cites to RKO-
Stanley Warner Theatres, Inc. v. Graziano, 355 A.2d 830 (Pa. 1976), for
the proposition that a promoter cannot incur liability on behalf of an
anticipated corporation, unless the corporation later expressly adopts those
obligations.
Here, Patriot has done precisely that. The Management Agreement is threaded
with language in anticipation of the Asset Purchase Agreement. By turn, the
Asset Purchase Agreement specifically makes the buyer, Patriot, responsible
for decisions made and obligations incurred by the managers under the
Management Agreement. See Complaint, filed 1/25/07, Asset Purchase
Agreement, at 1, 2, 4, 5, 7, 16, and 18. Thus, the court properly found Patriot
liable for the operating loss debt incurred under the Management Agreement.
See Trial Court’s Findings of Fact/Conclusions of Law, filed 1/4/17, at 16.
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J-A28026-17
Patriot, as the judgment winner in a breach of contract dispute, is entitled to
prejudgment interest. See Ely, 130 A.3d at 15.
Accordingly, we affirm the judgment entered in favor of Patriot. But we
remand for the limited purpose of calculating and awarding prejudgment
interest in favor of Patriot.
Judgment affirmed. Case remanded for computation and awarding of
prejudgment interest. Jurisdiction relinquished.
Judge Dubow joins the memorandum.
President Judge Gantman concurs in the result.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 7/3/18
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