J-A12006-22
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
ALUMISOURCE CORPORATION : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellant :
:
:
v. :
:
:
KANTNER IRON & STEEL, INC. AND : No. 764 WDA 2021
JOHN M. TOTH :
Appeal from the Order Entered June 2, 2021
In the Court of Common Pleas of Westmoreland County
Civil Division at 5664 of 2014
ALUMISOURCE CORPORATION : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
:
v. :
:
:
KANTNER IRON & STEEL, INC. AND :
JOHN M. TOTH :
: No. 807 WDA 2021
Appellants :
Appeal from the Judgment Entered July 1, 2021
In the Court of Common Pleas of Westmoreland County
Civil Division at 5664 of 2014
BEFORE: MURRAY, J., McCAFFERY, J., and COLINS, J.*
MEMORANDUM BY MURRAY, J.: FILED: MAY 23, 2022
At 764 WDA 2021, Alumisource Corporation (Appellant) appeals from
the denial of post-trial motions challenging the $300,000 verdict favor of John
____________________________________________
* Retired Senior Judge assigned to the Superior Court.
J-A12006-22
M. Toth (Toth or Mr. Toth) for Appellant’s breach of its consulting agreement
(CA) with Toth.1 At 807 WDA 2021, Toth and Kantner Iron & Steel, Inc.
(Kantner) (collectively, Defendants), appeal the $341,869.07 judgment
entered in favor of Appellant for Defendants’ breach of a right-of-first-refusal
agreement (ROFRA) involving Defendants’ sale of scrap aluminum to
Appellant. Toth has filed a cross-appeal at that docket number. Upon careful
review, we affirm the judgments at both dockets.
Factual History
Appellant operates an aluminum processing facility in Monessen,
Pennsylvania. Appellant purchases scrap aluminum, and after processing and
purifying the aluminum, sells the resulting shredded aluminum to aluminum
product producers. N.T., 6/22/20, at 21-23. At all relevant times, Toth owned
____________________________________________
1 Appellant appealed from the June 3, 2021, order denying the parties’ post-
trial motions. However, an appeal properly lies from judgment entered
following the disposition of post-trial motions. U.S. Bank, N.A. v. Pautenis,
118 A.3d 386, 388 n.2 (Pa. Super. 2015). Our review discloses judgment was
entered against Defendants on the verdict against them for violating the
ROFRA. We have amended the caption accordingly. Although the denial of
post-trial relief on the CA verdict was not reduced to judgment as required by
Pa.R.A.P. 301, in the interests of judicial economy, we “regard as done that
which ought to have been done.” McCormick v. N’eastern Bank of Penna.,
561 A.2d 328, 330 n.1 (Pa. 1989); see also Croydon Plastics Co., Inc. v.
Lower Bucks Cooling & Heating, 698 A.2d 625, 628-29 (Pa. Super. 1997)
(“Were we to quash an appeal from an order which, except for entry of
judgment, is otherwise final, we would expend judicial resources in the
decision to quash, one of the parties would inevitably praecipe the
prothonotary to enter judgment, and a subsequent appeal would be permitted
to follow.” (citation omitted).
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Kantner and EMF Development Corp. (EMF), two businesses that sell scrap
metal. N.T., 6/25/20, at 610.
During the fall of 2010, Appellant’s president, Gabriel Hudock (Hudock
or Mr. Hudock), sought to purchase an aluminum shredder (shredder) to meet
increased demand for aluminum. N.T., 6/22/20, at 23-32, 34-35, 63. After
receiving a quote of $1,450,000.00 for a new American Pulverizer shredder,
Appellant entered into negotiations with Toth for the purchase of a used model
of the same shredder. Id. at 33-35.
The trial court explained:
Between April and June of 2011, Mr. Hudock and Mr. Toth
negotiated for the sale of the shredder, in addition to a proposed
agreement in which Mr. Toth would offer [Appellant] a right of first
refusal to purchase aluminum scrap from his two scrapyards. The
initial agreed price to be paid by [Appellant] was [] 2 million
dollars.
After seeking financing[, Appellant] was only able to finance
75% of the purchase price, leaving a deficit of $500,000.00 of
financing; Mr. Toth offered to finance the remaining balance. Mr.
Toth and Mr. Hudock met on April 11, 2011 to discuss the
agreements further; Mr. Hudock presented Mr. Toth with a draft
[ROFRA], a draft Bill of Sale encompassing the two million dollar
agreement, and a draft [CA]. Mr. Hudock testified to his belief
that the [CA] was designed to provide the $500,000 in financing
by Mr. Toth. Mr. Hudock further testified that upon receiving the
drafts and discussing them with his counsel, Mr. Toth requested a
$500,000 judgment note or loan schedule in place of the
consulting agreement.
Upon further negotiations with PNC Bank, PNC agreed to
finance the entire two million-dollar transaction. As the entire
agreement was financed, Mr. Toth agreed to drop the purchase
price to $1,900,000.00. As negotiations continued, Mr. Toth
requested a copy of the proposed ROFRA on April 14, 2011, from
Tom Adamek, [Appellant’s] Chief Operations Officer. Mr. Toth
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returned the draft to Mr. Adamek with changes made by counsel
on May 5, 2011. Mr. Toth sent Mr. Hudock an email stating,
“Gabe, I cleaned up the changes you wanted and took off the draft
wording. I will get it signed and sent to you Thursday. Thanks,
John.” The revised ROFRA was attached. A further June 9, 2011,
email from Mr. Toth to Mr. Hudock stated, “Gabe, the envelope
will be at the office at Johnstown with originals. You or Keith can
pick up. Please get me one signed copy back. Thanks, John.”
Attached to that email was a copy of the ROFRA agreement,
executed by Mr. Toth and witnessed.
Upon receiving this email, Mr. Hudock emailed Mr.
Toth on June 9, 2011, as follows: “John, as you know, we
agreed that the right of refusal would apply to all the yards
owned by you, not just Kantner Iron Metal. I would like
the agreement to reflect our intentions. Thanks, Gabe.”
Mr. Toth replied: “Gabe, you’re getting a bit paranoid.
Read paragraph 1. It gives you the right of refusal for all
of John Toth’s existing facilities. I can’t give you any more
than that. John.” Mr. Hudock subsequently signed the
ROFRA on June 13, 2011, witnessed by Tom Adamek, and
Mr. Adamek sent him a copy of the executed ROFRA.
Approximately one week later, Mr. Toth indicated to Mr.
Hudock that he had not received the executed copy from
[Appellant], and Mr. Hudock assured Mr. Toth that he would send
an employee with a physical copy. Gray Gallo, an [employee of
Appellant], testified that Mr. Hudock gave him an envelope to give
to Mr. Toth and that he recalls doing so. Testimony from Mr. Toth
indicates that he did not bring up the executed agreement again
after this time, and an email to Mr. Toth dated March 15,
2012, included a copy of the executed ROFRA.
… [T]he ROFRA period extended for a term of thirty-six (36)
months, from June 9, 2011, to June 9, 2014. [Appellant] is the
identified buyer and [] Toth and Kantner are defined as “seller.”
Under the ROFRA, [Appellant] is provided the right of first
refusal to purchase “aluminum materials” from “any and
all of Seller’s existing facilities.” Specifically, Seller agrees to
provide [Appellant] with any third-party bona fide offer to
purchase aluminum materials, at which time [Appellant] is
provided four (4) hours to accept or reject the offer.
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Mr. Hudock testified that for the first two (2) years of the
contract term, the parties apparently complied with the ROFRA as
written, and each consummated purchase was documented in a
Purchase Order. Mr. Hudock also described a summary of
documents received from Defendants which showed sales records
to other companies, including competitors of [Appellant,] during
the period of the ROFRA. He testified that these sales were not
offered to [Appellant] and [Appellant] would have been interested
in these sales if they had been offered pursuant to the ROFRA.
* * *
Regarding the [CA], … Mr. Hudock testified that he never
requested that Mr. Toth actually become a consultant for
[Appellant]. [Mr. Hudock] testified, however, that he did
sign the [CA] at Exhibit D. He stated he believed the contract
was aborted by oral agreement and/or the final agreement of sale
for the shredder.
Trial Court Opinion, 1/15/21, at 2-6 (citations omitted, emphasis added). At
trial, Hudock further testified that in a December 12, 2012, email, Toth offered
to sell Appellant “irony” aluminum. See N.T., 6/22/20, at 83; Exhibit 11.
According to Hudock, this was the first offer under the ROFRA from Toth to
Appellant. Id. at 84.
Procedural History
On November 14, 2014, Appellant filed a complaint against Defendants
in Westmoreland County, Pennsylvania, alleging breach of the ROFRA (the
ROFRA case). Complaint, Westmoreland County Docket No. 5664 of 2014.
On April 6, 2018, in Somerset County, Pennsylvania, Toth filed a
complaint alleging breach of his consulting agreement with Appellant and for
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unjust enrichment (the CA case).2 Complaint, Somerset County Docket No.
188 of 2018. Appellant filed an answer and new matter demurring to Toth’s
complaint in the CA case, and further asserting Toth’s contract action is barred
by the statute of limitations. On July 17, 2018, Appellant filed a motion for
judgment on the pleadings in the CA case. Motion, 7/17/18. On November
9, 2018, the Somerset court granted in part and denied in part Appellant’s
motion. The court concluded Toth sufficiently pled a prima facie cause of
action for breach of the CA. Somerset Court Opinion, 11/9/18, at 9. The
Somerset court further stated:
[The court] find[s] the [CA] is an installment contract that
contemplates periodic payments of $100,000.00 on April 15 of the
years 2012, 2013, 2014, 2015 and 2016.FN Following this, it is
apparent that, applying the four-year statute of limitations for
causes of action based on contracts, the payments for the years
2012 and 2013 are outside the limitations period and are time-
barred. The payments due in 2014, 2015, and 2016 are
actionable if the [CA] was still in effect during those times. It is
this point [Appellant] address[es] in [its] second argument,
discussed below.
FN [Appellant] dedicated much of its Reply … [to] discussing the
doctrine of “continuous contracts” and how, due to the fixed date
of periodic payments in the Agreement, the doctrine is
inapplicable in the instant matter. [The court] generally agree[s]
with [Appellant] on this limited point. However, from [Toth’s]
Brief, and from representations made at oral argument on the
[motion for judgment on the pleadings, the court] believe[s
Toth’s] primary argument is rather that the [CA] is an installment
contract, which invokes a distinct set of principles, namely that
each failure to pay an installment is a separate breach and cause
____________________________________________
2 Toth subsequently withdrew his unjust enrichment claim.
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of action, with a separate, concomitant, four-year limitations
period.
[Appellant] asserts, and [Toth] admits, that the parties did not
communicate after July 2013. Answer and New Matter ¶ 32; Reply
to New Matter ¶ 32. [Appellant] argues that, because all
communication, and thus all possibility of service, ceased in July
2013, the contract should be treated as terminated as of that date,
and the limitations period would have begun then, ending in July
2017. [Appellant’s] Rely Brief [at] 5-7. …
Somerset Court Opinion, 11/9/18, at 6-7 (footnote and quoted citations in
original, some citations omitted).
Applying our Supreme Court’s decision in Crouse v. Cyclops
Industries, 745 A.2d 606 (Pa. 2000), the Somerset court concluded:
[T]aking [Toth’s] allegation that “[he] has performed for and
provided [] all required services to [Appellant]” as true, under our
standard of review, and that a provision in the [CA] states that
“[t]he services … may be rendered by [Toth] without any direct
supervision by the Company,” [the court] do[es] not find, as a
matter of law, that the failure of communication between [Toth]
and [Appellant] after July 2013 unequivocally terminated the
contract. At the very least, discovery is warranted on the issues
of [Toth’s] reasonable diligence in discovering whether [Appellant]
intended to pay [Toth] for his services, what services, if any, were
provided, and whether communication between the parties after
July 2013 was necessary or contemplated in order to keep the
[CA] valid and in effect.
Somerset Court Opinion, 11/9/18, at 8 (citations omitted).
Thereafter, the CA case was transferred to the Westmoreland County
Court of Common Pleas (the trial court) in accordance with Pa.R.C.P. 213.1
(Coordination of Actions in Different Counties). On October 23, 2019, the trial
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court consolidated the ROFRA case and the CA case at docket number 5446
of 2014. Trial Court Order, 10/23/19.
From June 22-26, 2020, the trial court held a bench trial on the
consolidated cases. Regarding the ROFRA case, the trial court determined:
(1) the ROFRA constitutes an enforceable contract, see Trial Court Opinion,
1/15/21, at 15; (2) Toth breached the ROFRA, see id.; and (3) Appellant
sustained damages of $224,501.07 plus prejudgment interest, see Trial Court
Order, 1/15/21, ¶¶ 1-2. Regarding the Somerset case, the trial court entered
a verdict in favor of Toth. The trial court determined: (1) Appellant’s CA with
Toth constituted an enforceable installment contract, see Trial Court Opinion,
1/15/21, at 18; (2) Appellant breached the CA, see id. at 20; and (3) Toth
sustained damages of $300,000 plus prejudgment interest, see id. at 21.
Appellants filed a notice of appeal at 764 WDA 2021 (the CA case).
Defendants filed a cross appeal at 807 WDA 2021. The parties have complied
with Pa.R.A.P. 1925(b) at both dockets.
Preliminarily, we recognize:
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.
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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) (ellipses and brackets in original; citation and quotation
marks omitted). “[T]he trial court acts as the factfinder in a bench trial and
may believe all, part or none of the evidence presented.” Ruthrauff, Inc. v.
Ravin, Inc., 914 A.2d 880, 888 (Pa. Super. 2006). “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 determination or substitute
our judgment for that of the factfinder.” Id. (citation and quotation marks
omitted).
Appellant’s Appeal at 764 WDA 2021
(The CA Case)
Appellant presents the following issues for our review:
1. Whether Toth’s claim for breach of a purported [CA] is barred
by the statute of limitations where Toth did not file his
complaint until more than four years after [Appellant] failed to
make multiple annual payments allegedly owed to Toth under
the agreement, explicitly repudiated the purported agreement,
and Toth severed all communication and relations with
Appellant[?]
2. Whether the trial court erred in finding [Appellant] liable for
failing to make annual payments allegedly due under the
purported [CA] in April of 2014, 2015 and 2016, where Toth
had admittedly severed all communications and relations with
[Appellant] during those years, there is no evidence that Toth
performed any consulting services for [Appellant] at any time,
and the trial court improperly reversed the parties’ respective
burdens of proof by concluding that Toth had proved his breach
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of contract claim because the trial court was “not convinced
that Toth did not perform the minimum requirements” under
the [CA?]
3. Whether the trial court erred in failing to find that the doctrines
of waiver, estoppel and/or laches bar Toth’s claim for payments
ostensibly due under the [CA] in April of 2014, 2015 and 2016,
where Toth had admittedly severed all communications and
relations with [Appellant] and forgot about the [CA] during
those years, did not assert an alleged right to payment despite
[Appellant’s] explicit repudiation of the [CA] in 2012 and 2013
until he filed his complaint in 2018, at which point [Appellant’s]
case had been pending in the trial court for 3.5 years, and Toth
made no mention of the [CA], including in verified discovery
responses in 2015, even though a year ostensibly remained on
the term of the [CA] at the time[?]
4. Whether the trial court erred in refusing to modify its award of
$397,500 in damages and interest to Toth for payments
ostensibly due under the purported [CA], where such an award
greatly exceeds any appropriate measure of contract damages
or amount arguably supported by the evidence, unconscionably
provides Toth a windfall for damages he did not actually suffer
and [Appellant] has been greatly prejudiced by Toth’s years of
silence and delay in asserting his alleged contractual rights[?]
5. Whether the trial court erred in awarding Toth prejudgment
interest as of right and in an amount greater than necessary to
fully compensate Toth[?]
Appellant’s Brief at 3-5 (emphasis in original).
Issue 1
Appellant first challenges the trial court’s determination that Toth’s
claim is not barred by the statute of limitations. Id. at 21. Appellant claims
it expressly repudiated the CA in 2012 “and again in 2013, and all
communications and relations between the parties were entirely terminated
after July of 2013.” Id. According to Appellant, Toth’s cause of action accrued
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no later than August 2013; consequently, the action is barred by the four-
year statute of limitations. Id. (citing, inter alia, 42 Pa.C.S.A. § 5525(a)).
Appellant further disputes the trial court’s analysis of the Somerset
court’s decision regarding the CA case. Appellant states,
[t]he Somerset [c]ourt did not hold that Toth’s claim for payments
allegedly due in 2014, 2015 and 2016 was timely. To the
contrary, the Somerset [c]ourt acknowledged [Appellant] set forth
a “sound” basis to conclude the [CA] was terminated as of July
2013, but was reluctant to dismiss the entire claim at the pleading
stage….
Id. at 24. Appellant asserts it repudiated the CA by failing to tender payment
in 2012 and 2013, and by Hudock’s response, “I don’t know what you’re
talking about,” when Toth requested payment. Id. (citation omitted).
Appellant posits:
Even assuming arguendo that the [c]onsulting [a]greement was
not effectively repudiated, the statute of limitations was triggered
when Toth refused to communicate with [Appellant] after July of
2013, completely terminating the parties’ relationship and with it
their purported contract.
Id. at 27. Appellant also claims Toth did not act with due diligence. Id. at
27-28.
Our Supreme Court described our scope and standard of review as
follows:
Our scope of review with respect to whether judgment n.o.v. is
appropriate is plenary, as with any review of questions of law. Our
standard of review when examining the lower court’s refusal to
grant a judgment n.o.v. is whether, when reading the record in
the light most favorable to the verdict winner and granting that
party every favorable inference therefrom, there was sufficient
competent evidence to sustain the verdict. Although we accord
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deference to a trial court with regard to its factual findings, our
review of its legal conclusions is de novo. The trial court’s
determination regarding the scope of the term “actual damages”
under the Law constitutes a legal conclusion and issues of
statutory interpretation present this Court with questions of law
for which our standard of review is de novo, and our scope of
review is plenary.
Bailets v. Pa. Tpk. Comm’n, 181 A.3d 324, 332 (Pa. 2018) (citations
omitted).
To prove breach of contract, a plaintiff must prove that a contract
existed; it was breached; and damages resulted from the breach. Liss &
Marion, P.C. v. Recordex Acquisition Corp., 983 A.2d 652, 665 (Pa. 2009).
The statute of limitations for an action asserting breach of contract is four
years. See 42 Pa.C.S.A. § 5525(a). The limitation period is “computed from
the time the cause of action accrued.” Fine v. Checcio, 870 A.2d 850, 857
(Pa. 2005). “[A] cause of action accrues when the plaintiff could have first
maintained the action to a successful conclusion.” Id.
The parties do not dispute the existence of a contract, i.e., the CA. The
CA provided in relevant part:
1. [Toth] shall, as more fully set forth below in this Paragraph 1,
assist [Appellant] in developing aluminum market intelligence and
analyses in furtherance of [Appellant’s] business strategic
initiatives and goals.
More specifically, [Toth] agrees to share aluminum industry
related information generally available in the public domain, as
well as other information, including but not limited to general
pricing formulae, hedging strategies, potential supplier/customer
contacts, and the like; provided however, no such information
shall be provided if the release thereof would violate a non-
competition or other proprietary agreement to which [Toth] is
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bound. [Toth] will assist [Appellant] in identifying, structuring,
and developing strategic data relating to the aluminum industry.
[Toth] will be available on request, with appropriate notice,
to meet with [Appellant’s] Management/professional advisors,
potential customers, investors and capital sources, and strategic
partners.
The services described in this Paragraph 1 may be rendered by
[Toth] without any direct supervision by [Appellant] and at such
time and place in such manner (whether by conference,
telephone, letter or otherwise) as [Toth] and [Appellant] may
reasonably determine.
See N.T., 6/24/20, at 393 (Defense Exhibit D (CA)) (emphasis added).
Appellant claims repudiation of the CA. Appellant’s Brief at 24. The
Pennsylvania Commercial Code provides:
When either party repudiates the contract with respect to a
performance not yet due the loss of which will substantially impair
the value of the contract to the other, the aggrieved party may:
(1) for a commercially reasonable time await performance by the
repudiating party; or
(2) resort to any remedy for breach (section 2703 or 2711), even
though he has notified the repudiating party that he would await
performance by the latter and has urged retraction; and
(3) in either case suspend his own performance or proceed in
accordance with the provisions of this division on the right of the
seller to identify goods to the contract notwithstanding breach or
to salvage unfinished goods (section 2704).
13 Pa.C.S.A. § 2610.
Where a claim accrues from “anticipatory repudiation or breach,” the
breaching party must have expressed “an absolute and unequivocal refusal to
perform or a distinct and positive statement of an inability to do
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so.” Andrews v. Cross Atlantic Capital Partners, Inc., 158 A.3d 123, 130
(Pa. Super. 2017) (en banc) (quoting Harrison v. Cabot Oil & Gas Corp.,
110 A.3d 178, 184 (Pa. 2015)).
At trial, Toth testified: “The [CA] calls that I be paid a hundred thousand
dollars a year annually beginning on April 5, 2012, continuing to April 5,
2016.” N.T., 6/24/20, at 393. Toth testified he complied with the CA:
I did all I could for [Hudock]. He had to ask me. I wasn’t required
to provide anything to him. He had to let me know what he
wanted.
* * *
I met him any time he called to have a meeting. And I would have
met with him and had any meeting he wanted to have, go any
place he wanted me to go.
* * *
… In fact, I started to send him pricing formula [sic] from metal
conversions, and I sent it a couple times. Then he told me in a
phone conversation, you know, it’s nice you’re sending that, but I
already get that, I really don’t need that. So I stopped sending it.
Id. at 548-49. Toth attempted to advise Appellant regarding procedures and
practices for as-is and recovery basis purchases: “I did. I attempted to.
Sometimes they just didn’t want to listen to you.” Id. at 550. Toth confirmed
he made himself available throughout the entire consulting period. Id.
Toth testified he requested payment on the CA after the first year of the
ROFRA:
[Hudock] simply said, I don’t know what you’re talking about. And
I said, Gabe, you know what I’m talking about, I’m talking about
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the [CA] we signed last year. … He acted like he didn’t know
what I was talking about.
Id. When Hudock requested a copy of the agreement, Toth could not find his
copy. Id. at 551. Toth testified he asked for payment the second year, and
periodically mentioned the agreement to Hudock. Id. Hudock would respond,
“Show me what you’re talking about, I don’t know what you’re talking about.”
Id.
Toth indicated he consulted with Appellant’s employee, Keith Miller
(Miller), regarding “[s]hredder disassembly, shredder installation, shredder
this, shredder that. [Miller] must have had some kind of work involved with
putting a shredder in. I really don’t know what his job was.” Id. at 432.
According to Toth, following the sale of the shredder to Appellant, he received
telephone calls from Appellant’s employee, Gary Gallo (Gallo): “[Gallo] was
calling for consulting in place on matter of the shredder, how to put the
shredder in.” Id. at 485. Toth also stated he had “consulting calls” with
Hudock. Id.
Our review discloses no statement or action by Appellant or Toth
repudiating the CA. Hudock’s nonpayment and response, “I don’t know what
you’re talking about,” see id. at 550, falls short of an “absolute and
unequivocal” refusal to perform, or a distinct and positive statement of an
inability to do so. Andrews, 158 A.3d at 130. Further, we cannot conclude
Toth’s cause of action accrued in July 2013, when the parties’ communications
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ceased. Toth confirmed he made himself available throughout the consulting
period. N.T., 6/24/20, at 550. The trial court explained:
While the relationship of the parties certainly deteriorated,
[Appellant] presented no affirmative evidence to show an
unequivocal repudiation of the [CA], and so it cannot meet its
burden of showing the same in a way which would begin the tolling
of the [s]tatute of limitations in July of 2013.
Trial Court Opinion, 6/3/21, at 2. As we agree with the trial court, Appellant’s
first issue fails.
Issue 2
Appellant next challenges the sufficiency of the evidence underlying the
trial court’s finding that Appellant owes the 2014, 2015 and 2016 payments
under the CA. Brief for Appellant at 29. Appellant asserts the damages award
“is not based on any services rendered by Toth, but rather merely on his
testimony that he was available to provide services during that time period.”
Id. (emphasis in original). According to Appellant, the CA did not require
mere availability and “only requires payment when services are rendered.”
Id. Appellant argues: “The ‘services’ contemplated by the [CA] include
sharing aluminum industry information and assisting in identifying,
structuring, and developing strategic data.” Id. at 29-30. Although the CA
requires Toth “will be available on request,” Appellant claims “availability” in
and of itself is not a “service” under the agreement. Id. at 30. Appellant
directs our attention to the lack of evidence regarding services Toth rendered
in 2014, 2015 and 2016. Id.
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Appellant acknowledges: “While it is technically true that Toth’s phone
records reflect calls from January 1, 2011, through December 31, 2014, they
do not in fact evidence anything like a ‘continued stream’ of communication
after July 2013.” Id. at 32. Appellant acknowledges Toth placed three phone
calls to Gallo on December 12, 2014. Id. However, Appellant argues Gallo
had not been employed by Appellant for over a year by that date. Id.
Appellant emphasizes the lack of communication between Toth and Appellant
after July 2013. Id. at 32-33.
As set forth above, the CA expressly required Toth “be available on
request[.]” See N.T., 6/24/20, Defense Exhibit D. At trial, Toth testified he
consulted with Appellant’s employees, responded to questions from
Appellant’s employees, and remained available throughout the term of the
contract. N.T., 6/24/20, at 548-50. The trial court reasoned:
Toth [] testified that he did provide guidance to [Appellant’s]
employees regarding operation of the shredder and the aluminum
market, especially during the initial process of the sale and
movement of the shredder. Toth presented into evidence phone
records which show a continued stream of phone correspondence
with [Appellant] and its employees, even past the time in July of
2013 whe[n] he ceased selling materials to [Appellant]. Looking
at the evidence in sum, the [c]ourt is not convinced that [] Toth
did not perform his minimum requirements under the contract,
and so the [c]ourt finds the contract was breached by [Appellant].
Trial Court Opinion, 1/15/21, at 21. The trial court’s findings are supported
by the record and its reasoning is sound. As “the fact-finder is free to
believe all, part, or none of the evidence, and to assess the credibility of the
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witnesses,” we cannot grant Appellant relief on its second issue. Berg v.
Nationwide Mut. Ins. Co., 235 A.3d 1223, 1228 (Pa. 2020).
Issue 3
Appellant next challenges the trial court’s failure to apply the doctrines
of waiver, estoppel and/or laches to bar Toth’s breach of contract action.
Appellant’s Brief at 34. Appellant relies on Toth’s testimony that Appellant
“failed and outright refused to make the first payment allegedly due in April
2012.” Id. Toth did not enforce his right to payment until April 2018. Id.
Appellant states, “[d]uring this period, [Appellant] specifically asked Toth if
there were any other agreements between the parties, aside from the ROFRA,”
and Toth did not disclose the CA. Id. at 35. According to Appellant, Toth
mislead and prejudiced Appellant through “his years of silence and inaction[.]”
Id. at 38. Appellant asserts it could have mitigated the prejudice and
damages had Toth disclosed or asserted his CA claim earlier. Id. Appellant
argues the doctrines of waiver, estoppel and laches are designed to address
this situation. Id.
The doctrines of waiver and estoppel are defenses to a breach of
contract claim:
Waiver is the voluntary and intentional abandonment or
relinquishment of a known right. Waiver may be established by a
party’s express declaration or by a party’s undisputed acts or
language so inconsistent with a purpose to stand on the contract
provisions as to leave no opportunity for a reasonable inference
to the contrary.
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MetroClub Condo. Ass’n v. 201-59 N. Eighth St. Assocs., L.P., 47 A.3d
137, 154 (Pa. Super. 2012) (citation omitted). Estoppel is “a doctrine
sounding in equity, [which] recognizes that an informal promise by one’s
words deeds, or representations which leads another to rely justifiably thereon
to his own injury or detriment ....” Novelty Knitting Mills, Inc. v. Siskind,
457 A.2d 502, 503 (Pa. 1983).3
The trial court found “[a]t no point did [Appellant] present any evidence
which would indicate a clear an unequivocal action on the part of [] Toth
waiving his rights under the consulting agreement.” Trial Court Opinion,
6/3/21, at 3.
There was no inducement or misdirection regarding the CA on the
part of Toth directed at [Appellant]—rather, [Appellant] knew of
and had possession of the [CA] at all times. In fact, [Appellant]
is the sole party asserting that the [CA] is relevant to its
contractual claims, yet [Appellant] did not produce the [CA] in
discovery. “A court may deprive a party of equitable relief where,
to the detriment of the other party, the party applying for such
relief is guilty of bad conduct relating to the matter at issue.”
Terraciano v. Dept. Of Transp., Bureau of Driver Licensing,
753 A.2d 233, 237 (Pa. 2000). As such, laches and estoppel are
inapplicable here.
____________________________________________
3 Laches is an affirmative defense to an equitable claim. Fulton v. Fulton,
106 A.3d 127, 131 (Pa. Super. 2014) (doctrine of laches is an equitable bar
to the prosecution of stale claims and is “the practical application of the maxim
that ‘those who sleep on their rights must awaken to the consequence that
they have disappeared.’”). Laches is not a defense to an action at law. See
Leedom v. Spano, 647 A.2d 221, 228 (Pa. Super. 1994) (recognizing laches
was not a proper defense to action at law). Consequently, laches is not a
defense to Toth’s action at law for breach of contract.
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Trial Court Opinion, 8/9/21, at 3-4. The record supports the trial court’s
determination.
Rather than waiving his rights under the CA, the record reflects Toth
repeatedly requested Appellant’s compliance, and remained available
throughout the CA’s term to consult. See N.T., 6/24/20, at 548-50. Further,
the record reflects no informal promise, words, deeds, or representations by
Toth on which Appellant relied to its detriment. Rather, Toth repeatedly
requested payment and brought this action as to the 2014, 2015 and 2016
payments within the statute of limitations. See id. Because competent
evidence of record supports the trial court’s determination, we cannot grant
Appellant relief on its third issue. See Bailets, 181 A.3d at 332.
Issue 4
Finally, Appellant claims the evidence does not support the award of
damages incurred after 2013. Appellant’s Brief at 40. Relying on Toth’s
testimony that he “had forgotten about” the CA, Appellant asserts the parties
litigated the ROFRA during this timeframe, “acting as if no CA existed.” Id.
at 41. Appellant argues it could have mitigated its damages by seeking
declaratory relief or utilizing Toth’s services during this time period. Id.
Appellant argues there is no evidence Toth rendered any consulting services,
or that he was “available” for consultation after severing communications with
Appellant. Id. According to Appellant, even if Toth had communicated with
Appellant in 2014, there is no evidence to support an award of damages
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thereafter. Id. at 42. “Thus, Toth’s damages should be reduced by $200,000,
or by $100,000 at a minimum, with a commensurate reduction in pre-
judgment interest.” Id.
Contrary to Appellant’s claim, the record supports the damages awarded
for breach of the CA in 2014, 2015 and 2016. As the trial court explained,
Toth testified that he did hold himself available during the period
of the consulting agreement to provide on demand consulting
services to [Appellant]. … [] Toth testified that he did provide
guidance to [Appellant’s] employees regarding operation of the
shredder and the aluminum market, especially during the initial
process of the sale and movement of the shredder. Toth
presented into evidence phone records which show a continued
stream of phone correspondence with [Appellant] and its
employees, even past the time in July of 2013 where he ceased
selling materials to [Appellant]. Looking at the evidence in sum,
the [c]ourt is not convinced that [] Toth did not perform his
minimum requirements under the contract, and so the [c]ourt
finds the contract was breached by [Appellant].
Trial Court Opinion, 1/15/21, at 21. We agree with and adopt the trial court’s
reasoning. See id.
Regarding the award of prejudgment interest, we review the award for
an abuse of discretion. Cresci Constr. Servs. v. Martin, 64 A.3d 254, 258
(Pa. Super. 2013). An abuse of discretion is more than a mere error in
judgment; rather, it requires a finding that the trial court overrode or
misapplied the law, or that the decision was manifestly unreasonable or the
result of bias, prejudice, partiality, or ill-will as evidenced by the
record. Kraisinger v. Kraisinger, 34 A.3d 168, 175 (Pa. Super. 2011).
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Pennsylvania has followed the Restatement (Second) of Contracts
§ 354, which provides:
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.
Krishnan v. Cutler Group, Inc., 171 A.3d 856, 874 (Pa. Super. 2017)
(quoting Restatement (Second) of Contracts § 354)). The comments to
Section 354 state: “Unless otherwise agreed, interest is always recoverable
for the non-payment of money once payment has become due and there has
been a breach. … The sum due is sufficiently definite if it is ascertainable
from the terms of the contract….” Restatement (Second) of Contracts § 354
cmt. c; accord Krishnan, 171 A.3d at 874.
Our review discloses the CA definitively set the amount due for Toth’s
consulting services, and the annual dates for payment. The trial court
properly awarded Toth prejudgment interest at the statutory rate for each of
Appellant’s breaches of the CA (2014, 2015 and 2016).
Toth’s Cross-Appeal at 807 WDA 2021
(The CA Case)4
Toth presents the following issue:
Whether the trial court erred in concluding Toth waived his ability
and rights to request that [the] trial court modify the decision of
the Somerset County Court barring portions of Toth’s claims under
the [CA] due to the statute of limitations because [Appellant]
____________________________________________
4 Toth’s cross-appeal in the CA case is argued at Issue E in Defendants’ brief.
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fraudulently concealed the existence of the CA and the alleged
relationship between the CA, ROFRA and an Agreement of Sale
(“AOS”)?
Defendants’ Brief at 5 (some capitalization omitted).
Toth claims the trial court erred in concluding he waived his right to
request modification of the Somerset Court’s decision, “as a result of
[Appellant’s] fraudulent concealment of the existence and the alleged
relationship of the CA, ROFRA and the [Agreement of Sale (AOS)] during
discovery.” Defendants’ Brief at 50. Specifically, Toth alleges Appellant’s
fraudulent concealment of the CA to toll the statute of limitations to his claims
regarding breaches of the CA in 2012 and 2013. Id. at 54. According to Toth,
the Somerset Court’s decision was unappealable as an interlocutory order, and
under the coordinate jurisdiction rule, the decision barring his claims for 2012
and 2013 became the law of the case. Id. at 50-51.
Toth claims Appellant first raised the relationship between all of the
parties’ agreements during trial. Id. at 51. Toth acknowledges “the trial court
correctly concluded that the three agreements were in fact wholly separate
agreements despite [Appellant’s] argument that all three agreements were
related.” Id. at 52. However, Defendants argue,
[g]iven its position, [Appellant] should have not only disclosed but
should have supplied the CA in its discovery response.
[Appellant’s] failure to disclose the alleged relationship between
the CA and the ROFRA and its failure to produce the CA in
response thereto, during discovery, was a fraudulent concealment
of the CA, which caused Toth to relax his pursuit of his claims
under the CA. If Toth had been provided a copy of the CA at that
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time, which was within the statute of limitations for that claim,
Toth would have pursued those claims under the CA.
Id. Thus, Toth claims the statute of limitations should have been tolled
regarding his claims under the CA. Id. at 54-55.
This Court has addressed fraudulent concealment as follows:
Where, “through fraud or concealment, the defendant causes the
plaintiff to relax his vigilance or deviate from his right of inquiry,”
the defendant is estopped from invoking the bar of the statute of
limitations. Moreover, defendant’s conduct need not rise to fraud
or concealment in the strictest sense, that is, with an intent to
deceive; unintentional fraud or concealment is sufficient. Mere
mistake, misunderstanding or lack of knowledge is insufficient
however, … and the burden of proving such fraud or concealment,
by evidence which is clear, precise and convincing, is upon the
asserting party.
Rice v. Diocese of Altoona-Johnstown, 255 A.3d 237, 248 (Pa. 2021)
(quoting Molineux v. Reed, 532 A.2d 792 (Pa. 1987) (citations and quotation
marks omitted)). However, “even affirmatively misleading acts do not estop
a defendant from invoking the statute of limitations if the party has failed to
act with reasonable diligence.” Rice, 255 A.2d at 249 (citation omitted).
Instantly, the trial court determined:
Fraudulent concealment cannot apply where, as here, the party
asserting the concealment was aware of the thing that is alleged
to have been concealed. It is undisputed [] Toth was aware at all
times of the Consulting Agreement. He has made no assertion
that [Appellant] caused him to relax his vigilance or deviate from
his right of inquiry into the facts. There is thus no practicable way
for [] Toth to assert that [Appellant] was engaging in any form of
concealment ….
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Trial Court Opinion, 6/3/21, at 12 (citation and quotation marks omitted). We
agree with and adopt the reasoning of the trial court. See id. Accordingly,
no relief is due.
Defendants’ Appeal at 807 WDA 2021
(The ROFRA Case)
In their cross-appeal, Defendants present the following issues:
A. (1) … [W]hether the trial court erred by finding that an
ambiguity existed as to any term in the written ROFRA such that
the parties intended to include the aluminum sales of EMF
[Development Corporation (“EMF”)] facilities?
(2) Whether the trial court erred in failing to apply the
equitable remedy of reformation to the [ROFRA,] where the trial
court found an ambiguity and a mutual mistake in the written
ROFRA and found that the parties intended that the ROFRA include
the sales of Aluminum of EMF … facilities?
B. Whether the trial court erred by failing to recognize and follow
well established corporate law and corporate formalities in
awarding damages against [Defendants] arising solely from EMF’s
failure to offer its aluminum for sale to Appellant, when EMF is a
non-party to the ROFRA and a non-party to the action?
C. Whether the trial court abused its discretion in failing to
conclude that the ROFRA was repudiated and thereafter whether
the trial court also erred in concluding that the doctrine was not
legally applicable to this type of contract, thus failing to apply the
doctrine of anticipatory repudiation?
D. Whether the trial court erred in awarding damages and/or
prejudgment interest computed from the date the ROFRA was
signed rather than upon the dates upon which [Appellant] suffered
an actual loss?
Defendants’ Brief at 5 (Issue A subsections renumbered).
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Issue A (1)
Defendants first claim the trial court erred in concluding the ROFRA
contained an ambiguity. Defendants’ Brief at 22. Defendants challenge the
court’s interpretation of the ROFRA provisions so as to apply to all facilities
owned by Toth, including EMF. Id. at 22-23. Upon finding an ambiguity,
Defendants argue, the court erred in not correcting the ambiguity and the
parties’ mutual mistake by reforming the ROFRA. Id. at 23.
In support, Defendants argue Toth could not bind EMF, a separate
entity, to the terms of the ROFRA, or force EMF to offer its assets for sale. Id.
at 24. According to Defendants, “EMF can be made a party only by the
application of the equitable doctrine of reformation of the contract to include
EMF as a party.” Id. at 25. Defendants further claim mutual mistake by the
parties. Id. at 26. Defendants assert that given the mutual mistake, the trial
court erred by not reforming the ROFRA. Id. Defendants argue they cannot
be legally subject to damages for EMF’s breach, and the entire action must fail
because Appellant failed to join EMF as an indispensable party. Id. at 27, 30.
Established law provides that
[d]etermining the intention of the parties is a paramount
consideration in the interpretation of any contract. The intent of
the parties is to be ascertained from the document itself when the
terms are clear and unambiguous. However, … where
an ambiguity exists, parol evidence is admissible to explain or
clarify or resolve the ambiguity, irrespective of whether
the ambiguity is created by the language of the instrument or by
extrinsic or collateral circumstances.
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We first analyze the contract … to determine whether an ambiguity
exists requiring the use of extrinsic evidence. A contract is
ambiguous if it is reasonably susceptible of different constructions
and capable of being understood in more than one sense….
Hutchison v. Sunbeam Coal Corp., 519 A.2d 385, 389-90 (Pa. 1986)
(citations and quotation marks omitted). “While unambiguous contracts are
interpreted by the court as a matter of law, ambiguous writings are interpreted
by the finder of fact.” Ins. Adjustment Bureau, Inc. v. Allstate Ins. Co.,
905 A.2d 462, 469 (Pa. 2006). “Under ordinary principles of contract
interpretation, the agreement is to be construed against its drafter.” Id. at
468.
Here, the ROFRA stated:
Seller hereby grants to Alumisource the right of first refusal to
purchase aluminum materials, including but not limited to, UVC,
aluminum siding, aluminum clips, aluminum extrusions,
aluminum heat and cast aluminum from any and all of Seller’s
existing facilities during the term of this Agreement.
N.T., 1/15/21, Exhibit 1 (ROFRA); see also id. at 54-55 (Hudock quoting the
ROFRA). The ROFRA defined “Seller” as Toth and Kantner, collectively. N.T.,
Exhibit 1.
The trial court concluded the ROFRA’s reference to “any and all of
Sellers’ existing facilities” is ambiguous, stating:
Here, it is clear that the term “any and all of Seller’s existing
facilities” is ambiguous and indefinite, as it is not explained
anywhere within the four corners of the contract what
facilities fall within this categorization. Parol evidence is thus
required to clarify which facilities Toth is required to include in his
offers to Alumisource.
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Trial Court Opinion, 6/3/21, at 13-14 (emphasis added). We agree with and
adopt the trial court’s conclusion that the ROFRA is ambiguous as to the scope
of “seller’s existing facilities.” See id.
Mindful of our standard of review, the record evidence establishes that
when the parties executed the ROFRA, Hudock was aware of two scrap yards
owned by Kantner and one (EMF) owned by Toth. N.T., 6/22/20, at 52. After
receiving the signed ROFRA, Hudock emailed Toth for clarification of the
“existing facilities,” stating:
[A]s you know, we agreed that the right of refusal would apply to
all the yards owned by you, not just Kantner Iron Metal. I would
like the agreement to reflect our intentions….
Id., Exhibit 15; see also id. at 52 (Hudock’s testimony quoting Exhibit 15).
Toth responded:
“Gabe, you’re getting a bit paranoid. Read paragraph 1. It gives
you the right of refusal for all of John Toth’s existing facilities. I
can’t give you any more than that. John.
Id. at 53 (quoting response from Toth). In interpreting “Seller’s existing
facilities,” the trial court found:
Parol evidence in the form of the emails between Mr. Toth
and Mr. Hudock … is helpful in clarifying the intention of the
parties. It is undisputed that Mr. Toth’s facilities at the time of
contracting were exclusively Kantner and EMF, although this is not
made known through the plain language of the ROFRA. The emails
directly address this issue, with Mr. Hudock requesting
confirmation that the ROFRA pertains to all yards owned by Mr.
Toth, not just Kantner. Mr. Toth replies in the affirmative,
admonishing Mr. Hudock for being “paranoid.” This exchange,
taken together with the language of the ROFRA, shows a clear
meeting of the minds on all terms of the contract, including the
inclusion of EMF as one of “Seller’s existing facilities.” …
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Trial Court Opinion, 1/15/21, at 13-14. As the record supports the trial court’s
interpretation, and we discern no abuse of discretion or error. See Bailets,
181 A.3d at 332.
Defendants also failed to establish a “mutual mistake” which would
invalidate the ROFRA or compel reformation.
Mutual mistake will afford a basis for reforming a contract. Mutual
mistake exists, however, only where both parties to a contract
[are] mistaken as to existing facts at the time of execution.
Moreover, to obtain reformation of a contract because of mutual
mistake, the moving party is required to show the existence of the
mutual mistake by evidence that is clear, precise and convincing.
Zurich Am. Ins. Co. v. O’Hanlon, 968 A.2d 765, 770-71 (Pa. Super. 2009)
(citations omitted). Here, Defendants failed to establish both parties were
mistaken as to facts when they executed the ROFRA. Defendants at best
established their mistaken belief as to the scope of the ROFRA. Because
Defendants’ claim of mutual mistake is not supported by clear and convincing
evidence, reformation of the ROFRA was not warranted. See id.
Defendant’s assertion that Appellant failed to join EMF as an
indispensable third party likewise fails. An indispensable party is one whose
“rights are so connected with the claims of the litigants that no decree can be
made without impairing or infringing upon those rights.” Sprague v. Casey,
550 A.2d 184, 189 (Pa. 1988) (citations omitted). See also Commercial
Banking Corp. v. Culp, 443 A.2d 1154, 1156 (Pa. Super. 1982) (“A person
is a necessary and indispensable party only when his rights are so connected
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with the claims of the litigants that no decree can be made without impairing
his rights.”). “If no redress is sought against a party, and its rights would not
be prejudiced by any decision in the case, it is not indispensable with respect
to the litigation.” Orman v. Mortgage I.T., 118 A.3d 403, 406 (Pa. Super.
2015) (citation omitted).
Appellant did not seek redress against EMF. Further, Defendants failed
to demonstrate EMF’s rights would be prejudiced by any decision of the trial
court, including the judgment against Defendants. Consequently, this issue
fails. See id. In summary, viewing the evidence in a light most favorable to
Appellant, as required by our standard of review, Defendants are not entitled
to relief as to Issue A. See Bailets, 181 A.3d at 332.
Issue B
Defendants argue the trial court improperly failed to apply corporate law
and formalities when it awarded damages for sales of aluminum by EMF, a
nonparty to the ROFRA and related legal proceedings. Defendants’ Brief at
35. Defendants claim the evidence “fails to support a finding that Toth owns
any facilities or aluminum individually.” Id. at 36-37. According to
Defendants, the trial court misapplied this Court’s decision in PNC Bank v.
Kerr, 802 A.2d 634 (Pa. Super. 2002), in concluding “that by Toth’s signature
to the ROFRA, Toth [wa]s binding himself to obligate EMF’s facilities and assets
to the ROFRA.” Defendants’ Brief at 37. Defendants challenge the court’s
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failure to recognize that a corporation’s assets are not the property of its
shareholders. Id. at 35-36. Defendants assert:
The trial court disregards all legally applicable corporate principles
by imposing liability on [Defendants]. … EMF is a corporation
and, even though Toth owns the shares of EMF, this does not
make Toth the owner of EMF’s facility or assets, rather than EMF….
Id. at 36. According to Defendants, the trial court erred in holding Defendants
liable for EMF’s actions or inactions, as they do not have authority to bind EMF
or pledge assets owned by EMF under the ROFRA. Id. at 37.
Defendants further argue there is no basis for piercing EMF’s corporate
veil. Id. at 39. Defendants assert Appellant “neither pled nor presented
evidence that would permit the court to pierce the corporate veil of EMF to
hold Toth personally liable for damages arising from EMF sales.” Id.
Defendants claim the trial court should have found mutual mistake and
reformed the ROFRA to include EMF. Id. at 40.
As discussed above, there is no merit to Defendants’ claim for
reformation of the ROFRA based on mutual mistake. Appellant did not seek
damages from EMF, or attempt to pierce the corporate veil based on EMF’s
nonperformance. As the trial court determined:
The doctrine against piercing of the corporate veil in a contract
context generally means that “the breach of the contract is the
breach of a promise made by the corporation, and not the breach
of any promise extended by the corporate officer. It follows that
only the corporation may ordinarily be held liable for contract
damages.” Loeffler v. McShane, 439 A.2d 876, 879 (Pa. Super.
1988). This doctrine is inapplicable to the present situation,
however, where EMF was not a contracting party, but instead
Defendant Toth was a contracting party under the ROFRA. A
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discussion of corporate formalities is irrelevant where Defendant
Toth personally held himself out as liable under the ROFRA
regarding sales of all of his presently existing scrap facilities….
Trial Court Opinion, 6/3/21, at 7. We agree. Thus, we affirm on the basis of
the trial court’s reasoning with respect to Defendants’ Issue B. See id.
Issue C
Defendants next argue the trial court improperly failed to conclude the
ROFRA was repudiated. Defendants’ Brief at 40. Defendants rely on a
December 11, 2012, aluminum specification sheet Appellant provided, setting
the terms under which Appellant would agree to purchase aluminum in future
offers. Id. at 41. Defendants explain:
The evidence reveals Kantner packaged aluminum under the ISRI
standards and sold on a gross weight basis and Tube City, a third
party, regularly purchased [Kantner’s] aluminum on this gross
weight basis. On the other hand, [Appellant’s] specification sheet
dictated to [Kantner] that Alumisource would only purchase
aluminum in the future on a recovery basis, which involved
unilateral deductions from the price by [Appellant]. Therefore,
[Appellant] was not matching the terms offered to [Kantner].
Id. at 41-42 (citations omitted). Further, Defendants claim Appellant
repudiated the ROFRA in a June 2013 phone conversation. Id. at 42. In that
conversation, Appellant indicated it would never agree to purchase loads on
the terms of the third-party offers presented by Defendants. Id.
The trial court found no merit to Defendants’ claim:
Defendants can point to no evidence showing an “absolute and
unequivocal refusal to perform” on the part of [Appellant].
Defendants point to a “specification sheet” as alleged evidence of
this repudiation[;] however this assertion is belied by the follow-
up email from an [Appellant] representative specifically
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requesting more offers. Plaintiff’s Exhibit “23,” Defendants’
Exhibit “EE.” Defendants also point to a July 2013 phone call
between Mr. Hudock and Mr. Toth[;] however the testimony at
trial regarding the phone call reflects nothing which comes close
to constituting an unequivocal refusal. TR. P. 126-129….
Trial Court Opinion, 6/3/21, at 9. Again, the record evidence supports the
trial court’s determination.
At trial, Hudock testified Toth offered advice about how Appellant should
pay less, and buy aluminum on a gross basis, rather than a recovery basis.
N.T., 6/22/20, at 124-25. Hudock explained:
[L]ook, [Toth] can’t tell me how to run my business. We have to
agree to each load as it comes in. There’s no two loads—it’s like
a fruit salad. Aluminum comes in all types of grades and
specifications. You can’t buy it in most cases as-is.
Id. at 125. Hudock testified that some purchases were made on a recovery
basis, others were not. Id. at 127.
What I told Toth during the call is we … gave him a price and had
to make deductions because it was over a certain allotment. I
think we may have bought it with a 2 percent acceptance rate.
But if it exceeded that, we had bona fide support that we had to
take deductions. We can’t pay for metal that’s not there.
Id. at 128. When asked whether Toth said he would no longer sell aluminum
to Appellant, Hudock responded: “It’s my understanding he was upset. I
think we made a significant adjustment and paid him back what he was
concerned about.” Id. at 12.
This evidence, viewed most favorably to Appellant, supports the trial
court’s determination that Defendant did not repudiate the ROFRA.
Accordingly, we cannot grant relief on Issue C. See Andrews, 158 A.3d at
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130 (to establish an anticipatory repudiation or breach, the breaching party
must have expressed “an absolute and unequivocal refusal to perform or a
distinct and positive statement of an inability to do so.”).
Issue D
Defendants next challenge the trial court’s calculation of damages and
pre-judgment interest from the date the ROFRA was signed, rather than from
the date when Appellant suffered actual loss. Defendants’ Brief at 47.
“[P]re-judgment interest may be awarded when a defendant holds
money or property which belongs in good conscience to the plaintiff, and the
objective of the court is to force disgorgement of his unjust
enrichment.” Kaiser v. Old Republic Ins. Co., 741 A.2d 748, 755 (Pa.
Super. 1999) (citation and quotation marks omitted). “The fairest way for a
court is to decide questions pertaining to interest according to a plain and
simple consideration of justice and fair dealing.” Linde v. Linde, 220 A.3d
1119, 1150 (Pa. Super. 2019) (citation omitted).
While the general rule is that a successful litigant is entitled to
interest beginning only on the date of the verdict, it is nonetheless
clear that pre-judgment interest may be awarded “when a
defendant holds money or property which belongs in good
conscience to the plaintiff, and the objective of the court is to force
disgorgement of his unjust enrichment.” Dasher v. Dasher, …
542 A.2d 164, 164-65 (Pa. Super. 1988) (quoting Sack v.
Feinman, 489 Pa. 152, 164, 413 A.2d 1059, 1065 (1980)). Pre-
judgment interest in such cases is a part of the restitution
necessary to avoid injustice. Dasher, at 165.
Kaiser, 741 A.2d at 755.
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At trial, Appellant presented the expert testimony of James Fellin
(Fellin). Fellin explained his detailed calculation of prejudgment interest,
which the trial court adopted. See Trial Court Opinion, 6/3/21, at 10. Fellin
testified, “we calculated the interest on the lost gross profits by year[.]” N.T.,
6/22/20, at 197. Fellin subsequently recalculated the interest “as of June 30,
2020[.]” Id. at 198. In his expert report, Fellin calculated interest at the
statutory rate, stating, “All losses are deemed to have occurred midway
through the year/period.” Expert Report of Fellin, Exhibit 7 n.2, Attachment
1 n.2. As the record does not support Defendants’ claim of improper
calculation of pre-judgment interest, Defendants are entitled to relief on Issue
D.
For the reasons discussed above, we affirm the trial court’s judgment in
favor of Toth in the CA case, and in favor of Appellant in the ROFRA case.
Judgments affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 5/23/2022
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