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NON-PRECEDENTIAL DECISION – SEE SUPERIOR COURT I.O.P. 65.37
DE LAGE LANDEN FINANCIAL : IN THE SUPERIOR COURT OF
SERVICES, INC. : PENNSYLVANIA
:
v. :
:
DAMIAN GIANCOLA, DVM, LLC d/b/a :
WESTERVILLE VETERINARY CLINIC :
AND DAMIAN GIANCOLA, : No. 3078 EDA 2018
:
Appellant :
Appeal from the Judgment Entered September 13, 2018,
in the Court of Common Pleas of Chester County
Civil Division at No. 2017-11462-CT
BEFORE: SHOGAN, J., MURRAY, J., AND FORD ELLIOTT, P.J.E.
MEMORANDUM BY FORD ELLIOTT, P.J.E.: FILED DECEMBER 16, 2019
Damian Giancola, DVM, LLC, d/b/a Westerville Veterinary Clinic, and
Damian Giancola appeal from the September 13, 2018 judgment entered in
favor of De Lage Landen Financial Services, Inc. (hereinafter, “DLL”) in the
amount of $54,871.78, following the trial court’s September 6, 2018 order
granting DLL’s motion for summary judgment.1 After careful review, we
affirm.
1 Appellants purport to appeal directly from the September 6, 2018 order
granting summary judgment in favor of DLL, but the appeal properly lies from
the entry of judgment. The record reflects that judgment was entered on the
docket on September 13, 2018, and thus, we have amended the caption
accordingly.
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This matter involved a dispute over a lease agreement for veterinary
diagnostics equipment. The relevant facts and procedural history of this case,
as gleaned from the certified record, are as follows: Damian Giancola is an
authorized agent of Damian Giancola, DVM, LLC, which does business as
Westerville Veterinary Clinic in Westerville, OH (collectively, “appellants”).
DLL is a finance company that, among other things, provides financing to
businesses for the leasing of commercial equipment. IDEXX, who was not a
party to the underlying action, is a company engaged in the development and
manufacture of diagnostic equipment routinely used in veterinary practice to
determine chemistry, hematology, endocrinology, urinalysis, and other test
results. On May 21, 2015, appellants entered into a diagnostic agreement
with IDEXX to lease veterinary diagnostic equipment that IDEXX
manufactured. (See “IDEXX Diagnostic Agreement,” 5/21/15, attached as
Exhibit A to “[Appellants’] Brief in Opposition to [DLL’s] Motion for Summary
Judgment,” 8/20/18.) As part of this agreement, IDEXX agreed to award
appellants one reward “point” for each diagnostic profile performed using the
leased IDEXX equipment, equal to $1, with all amounts being credited toward
appellants’ monthly lease payment. (Id. at ¶¶ 2-3.) To finance the lease of
this equipment, appellants entered into a 72-month equipment lease
agreement with DLL that commenced on June 30, 2015. (See Equipment
Lease Agreement, 5/21/15, attached as Exhibit A to Complaint, 12/7/17.)
Contemporaneous with the execution of this lease agreement, appellant
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Damian Giancola executed a personal guaranty, wherein he unconditionally
guaranteed payment to DLL of any amount due under the lease. From March
2017 until December 2017, appellants failed to make monthly payments to
DLL.
On December 7, 2017, DLL filed a complaint against appellants for
breach of contract, breach of guarantor, and quantum meruit, alleging that
appellants were in default and that $54,871.78 was due under the terms of
the lease agreement and guaranty. (See Complaint, 12/7/17 at ¶¶ 13-18.)
On February 19, 2018, appellants filed an answer and new matter, alleging,
inter alia, that “DLL financial solutions partner (aka IDEXX), the company
who handles the monthly lease payments, made accounting errors on the
amounts owed by [appellants] to [DLL] and upon information and belief will
provide the parties with an accurate, updated invoice.” (See “[Appellants’]
Answer to Complaint with New Matter,” 2/19/18 at ¶ 9.) DLL filed its reply to
appellants’ answer and new matter on March 7, 2018. Discovery requests
were exchanged to which each party responded. Thereafter, on July 6, 2018,
DLL filed its motion for summary judgment. Appellants were granted an
extension and filed a timely response to DLL’s motion for summary judgment
on August 20, 2018. As noted, the trial court entered an order on
September 6, 2018 granting DLL’s motion for summary judgment. On
September 13, 2018, the trial court entered judgment in favor of DLL in the
amount of $54,871.78. In reaching this decision, the trial court reasoned that,
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[DLL] has provided a copy of [appellants’] payment
history as support for its Motion. [Appellants] have
provided no evidence to counter that payment history
except an assertion that there were “problems” with
the application of the IDEXX points. This assertion
is based on a single invoice which [appellants]
were told to ignore because it was sent in error.
With regard to the amount claimed for attorney’s fees,
that amount is based on the agreement between
[DLL] and its counsel. Finally, a review of
[appellants’] Answer and New Matter reveals that with
the exception of a denial of the amount due, no valid
defense was asserted.
Trial court order, 9/6/18 at ¶ 1 n.1 (emphasis added).
On October 5, 2018, appellants filed a timely notice of appeal.
Appellants and the trial court have complied with Pa.R.A.P. 1925.
Appellants raise the following issues for our review:
I. Did the [trial] court commit an abuse of
discretion or error of law in concluding that
summary judgment was proper while discovery
was ongoing and not all necessary parties
joined?
II. Did the [trial] court commit an abuse of
discretion or error of law in concluding that
there were no issues of material fact in dispute?
III. Did the [trial] court commit an abuse of
discretion or error of law in concluding
[appellants] provided no evidence to counter
the payment history provided by [DLL]?
Appellants’ brief at 6.2
2We note that Issue III was not raised in appellants’ Rule 1925(b) statement.
However, as this claim is intrinsically intertwined with that raised in Issue II,
we decline to find wavier and elect to address these issues concurrently.
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Our standard of review of a trial court’s order granting summary
judgment is well settled:
A reviewing court may disturb the order of the trial
court only where it is established that the court
committed an error of law or abused its discretion. As
with all questions of law, our review is plenary.
In evaluating the trial court’s decision to enter
summary judgment, we focus on the legal standard
articulated in the summary judgment rule. The rule
states that where there is no genuine issue of material
fact and the moving party is entitled to relief as a
matter of law, summary judgment may be entered.
Where the non-moving party bears the burden of
proof on an issue, he may not merely rely on his
pleadings or answers in order to survive summary
judgment. Failure of a non-moving party to adduce
sufficient evidence on an issue essential to his case
and on which it bears the burden of proof establishes
the entitlement of the moving party to judgment as a
matter of law. Lastly, we will view the record in the
light most favorable to the non-moving party, and all
doubts as to the existence of a genuine issue of
material fact must be resolved against the moving
party.
JP Morgan Chase Bank, N.A. v. Murray, 63 A.3d 1258, 1261-1262
(Pa.Super. 2013) (citations and internal quotation marks omitted); see also
Pa.R.C.P. 1035.2.
Appellants first argue that the parties were not given a reasonable
opportunity to complete discovery and that the order granting DLL’s motion
for summary judgment was premature because “discovery was ongoing and
not all necessary parties were joined.” (Appellants’ brief at 11.) The record
belies this contention.
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In Pennsylvania, “parties must be given reasonable time to complete
discovery before a trial court entertains any motion for summary judgment[.]”
Reeves v. Middletown Athletic Assoc., 866 A.2d 1115, 1124 (Pa.Super.
2004) (citation omitted). Pennsylvania Rule of Civil Procedure 1035.2 governs
motions for summary judgment and provides, in relevant part, as follows:
After the relevant pleadings are closed, but within
such time as not to unreasonably delay trial, any party
may move for summary judgment in whole or in part
as a matter of law
(1) whenever there is no genuine issue of any
material fact as to a necessary element of
the cause of action or defense which
could be established by additional
discovery or expert report, or
(2) if, after the completion of discovery
relevant to the motion, including the
production of expert reports, an adverse
party who will bear the burden of proof at
trial has failed to produce evidence of
facts essential to the cause of action or
defense which in a jury trial would require
the issues to be submitted to a jury.
Pa.R.C.P. 1035.2 (emphasis added).
This court has unequivocally stated that the purpose of Rule 1035.2 “is
to eliminate cases prior to trial where a party cannot make out a claim or
defense after relevant discovery has been completed; the intent is not to
eliminate meritorious claims prematurely before relevant discovery has been
completed.” Burger v. Owens Illinois, 966 A.2d 611, 618 (Pa.Super. 2009)
(citation omitted). “The adverse party must be given adequate time to
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develop the case and the motion [for summary judgment] will be premature
if filed before the adverse party has completed discovery relevant to the
motion.” Id.
Here, our review of the record supports the trial court’s determination
that no further discovery was necessary or ongoing at the time it entered its
September 6, 2018 order granting summary judgment in favor of DLL. (Trial
court order, 9/6/18 at n.1; see also trial court opinion, 11/27/18 at 2-3.)
The record reflects that nearly five months elapsed between the date
appellants filed their answer and new matter to DLL’s complaint (February 19,
2018) and the date DLL filed its motion for summary judgment (July 6, 2018).
During this time-period, DLL timely responded to all of appellants’ discovery
requests and appellant did not file any motions or send any correspondence
to DLL suggesting that the discovery was deficient or that additional responses
were needed.
The record further reflects that appellants failed to amend their answer
and new matter to include a claim against IDEXX nor attempted to file a third
party or joinder complaint against IDEXX. Appellants also failed to serve a
subpoena on IDEXX or otherwise request any additional discovery of which
IDEXX might have in its possession. Appellants now contend, after the fact,
that DLL’s subsequent responses on June 28, 2018 were “unsatisfactory” (see
appellants’ brief at 10, 14-15), but fail to explain why they believe DLL would
be in possession of additional documents pertaining to the “IDEXX Diagnostic
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Agreement,” to which DLL is not a party. As discussed more fully below,
appellants’ contention that it has a viable claim against IDEXX with respect to
its application of award points under the “IDEXX Diagnostic Agreement” has
no bearing on its liability to DLL under the terms of the equipment lease
agreement and personal guaranty. Accordingly, appellants’ first claim of trial
court error must fail.
Appellants next argue that the trial court abused its discretion in
concluding that there existed no genuine issues of material fact with respect
to appellants’ liability under the equipment lease agreement. (Appellants’
brief at 15.) Appellants contend that at the time the trial court entered an
order granting summary judgment in favor of DLL, there existed two primary
unresolved issues of material fact: (a) whether IDEXX properly applied the
award points to appellants’ account; and consequently, (b) what was the
proper amount appellants owed to DLL under the terms of the lease. (Id. at
16-18.) Appellants further contend that the trial court “committed an abuse
of discretion or error of law in concluding [appellants] provided no evidence
to counter the payment history provided by [DLL].” (Id. at 19.) We disagree.
“Pennsylvania has adopted the [Uniform Commercial Code (UCC)] to,
inter alia, “simplify, clarify and modernize the law governing commercial
transactions.” De Lage Landen Fin. Servs., Inc. v. Rozentsvit, 939 A.2d
915, 919 (Pa.Super. 2007) (citation omitted). Here, the record reflects that
the May 21, 2015 Equipment Lease Agreement appellants entered into with
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DLL expressly invoked Article 2A of the Pennsylvania UCC and provided that
the lease agreement constituted a finance lease as defined by statute. (See
Equipment Lease Agreement, 5/21/15 at § 8; see also 13 Pa.C.S.A.
§ 2A103(a).) Pursuant to Section 2A407, in this type of lease “the lessee’s
promises under the lease contract become irrevocable and independent upon
the lessee’s acceptance of the goods.” 13 Pa.C.S.A. § 2A407(a).
Section 2A407 further states that the lease agreement “is not subject to
cancellations, termination, modification, repudiation, excuse or substitution
without the consent of the party to whom the promise runs.” Id. at
§ 2A407(b).
Instantly, the lease agreement contained the following provision,
commonly referred to in the lease finance industry as a “hell-or-high water”
clause:3
Your Lease obligations are absolute, unconditional and
are not subject to cancellation, reduction,
right-of-recoupment, setoff or counterclaim.
Equipment Lease Agreement, 5/21/15 at § 1, ¶ 3.
Upon review of the record in the light most favorable to appellants, the
non-moving party, we find that the trial court did not abuse its discretion in
3 A “hell-or-high-water” clause is defined as a clause “requiring the lessee to
continue to make full rent [or lease] payments to the lessor even if the thing
leased is unsuitable, defective, or destroyed.” Black’s Law Dictionary 729
(7th ed. 1999). This court has upheld a “hell-or-high-water” lease provision
in a suit to recover payments due under a lease. See U.S. Leasing Corp. v.
Stephenson Equip., Inc., 326 A.2d 472, 473 (Pa.Super. 1974).
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concluding that there existed no genuine issues of material fact in this case.
The record reflects that appellants do not dispute entering into the equipment
lease agreement with DLL, accepting and using the leased IDEXX equipment,
or failing to make timely payments to DLL under the terms of the agreement.
Any grievances appellants have with regard to the miscalculation of the award
points credited toward its monthly lease payment, pursuant to the separate
diagnostic agreement they entered into with IDEXX, does not constitute a valid
defense to the their unconditional obligation to make payments to DLL
pursuant to the lease agreement and personal guaranty. Contrary to
appellants’ contention, the record further supports the trial court’s
determination that “with the exception of [invoice number 56840542, which
was sent in error and later corrected], [appellants] point to no other
‘accounting errors’ and have provided no evidence to counter [DLL’s] payment
history.” (Trial court opinion, 11/27/18 at 2; see also Letter from DLL,
11/22/17, attached as Exhibit D to “[Appellants’] Brief in Opposition to [DLL’s]
Motion for Summary Judgment,” 8/20/18.) Accordingly, we discern no abuse
of discretion on the part of the trial court in granting DLL’s motion for summary
judgment in this matter. Therefore, we affirm the trial court’s September 13,
2018 judgment.
Judgment affirmed.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 12/16/19
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