Erie Insurance Exchange v. United Services Auto

J-A22040-22

                                   2022 PA Super 207


    ERIE INSURANCE EXCHANGE A/S/O              :   IN THE SUPERIOR COURT OF
    BATES COLLISION, INC. JAMES                :        PENNSYLVANIA
    MYERS, ANITA MORGAN, LOSSIE                :
    AUTO SERVICE, AND BENEDICTINE              :
    SISTERS OF ERIE, INC.                      :
                                               :
                       Appellant               :
                                               :
                                               :   No. 1482 WDA 2021
                v.                             :
                                               :
                                               :
    UNITED SERVICES AUTOMOBILE                 :
    ASSOCIATION                                :
                                               :
                                               :
                v.                             :
                                               :
                                               :
    BATES COLLISION, INC.,                     :

             Appeal from the Judgment Entered November 12, 2021
    In the Court of Common Pleas of Erie County Civil Division at No(s): No.
                                  12888-18


BEFORE:      OLSON, J., DUBOW, J., and COLINS, J.*

DISSENTING OPINION BY DUBOW, J.:                     FILED: December 6, 2022

        I write to address whether the trial court properly granted summary

judgment to USAA on Erie’s claim of promissory estoppel, the sole cause of

action asserted by Erie. Based on the following analysis, I would conclude

that the court erred in granting summary judgment to USAA because an

element of promissory estoppel, i.e., reasonableness of reliance on the


____________________________________________


*   Retired Senior Judge assigned to the Superior Court.
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promise made, must be determined by a trier of fact. Accordingly, I conclude

the trial court erred as a matter of law and would reverse the order granting

summary judgment to USAA.

      The Majority aptly detailed the underlying facts in its Opinion so I

reiterate only the following. After the parties performed a joint fire inspection,

fire investigators for both Erie and USAA acknowledged that the cause of the

fire originated with the BMW. Erie’s fire inspector indicated that it needed to

do a “destructive investigation” of the BMW to determine exactly what within

the BMW caused it to combust. As a result, Erie asked USAA to “wrap” and

preserve the BMW and inform it of the preserved BMW’s location so it could

conduct further investigation. USAA informed Erie that the BMW was stored

at Insurance Auto Auction (“IAA”), a salvage yard. USAA’s representative and

expert indicated they would request that IAA “wrap and preserve” the BMW.

Letter from Jurado to Erie, 2/23/17. No other communication about the BMW

occurred until Erie attempted to schedule the invasive inspection and learned

that the IAA had sold the BMW as scrap.

      As a result, Erie filed its Complaint as subrogee of Bates Collision and

its other insureds affected by the fire, asserting only one count against USAA:

promissory estoppel. See Complaint, filed 11/9/18. In the complaint, Erie

contended that it had relied on USAA’s promise that it would request that IAA

secure, wrap, and preserve the BMW and, but for USAA’s promise, Erie “would

have done so at its own expense and/or filed a legal action to require [USAA]

to do so.” Complaint, 11/9/18, at ¶ 24. Erie further noted that as a result of

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USAA’s failure to preserve the BMW as promised, Erie “is unable to pursue a

claim against the manufacturer of the vehicle, the owner of the vehicle or

anyone else” to recoup its losses as subrogee. Id. at ¶ 25.

        Discovery ensued and both Erie’s and USAA’s representatives and

specialists provided deposition testimony regarding, inter alia, the standard

course of preservation of evidence in fire cases. USAA’s fire analyst stated

that she and the other fire investigators at the joint inspection understood

that the BMW would be preserved for future inspection.1 IAA’s owner testified

that he would not have preserved the property without a specific document

from USAA as the owner of the BMW. USAA admitted that it did not provide

the necessary documentation to IAA to preserve the vehicle.2

        On May 5, 2021, Erie filed a motion for summary judgment.        USAA

subsequently filed a cross-motion for summary judgment. On November 12,

2021, the trial court, after characterizing Erie’s cause of action as one for

negligent spoliation of evidence, granted USAA’s motion for summary

judgment relying, as the Majority here does, on Pyeritz.3

        With respect to the promissory estoppel cause of action actually raised

in the Complaint, the trial court stated only the following:
____________________________________________


1Deposition of Alisa Marie Breneman, 12/3/20, at 87, 90-93, 97, 102, 113,
146.

2   Deposition of Frank Jurado, 12/5/19, at 165.

3 Pyeritz v. Commonwealth, 32 A.3d 687, 692 (Pa. 2011) (defining
“spoliation of evidence” as “the non-preservation or significant alteration of
evidence for pending or future litigation.”).

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      Assuming arguendo that [Erie’s] “equitable” cause of action
      “sounding in promissory estoppel” could be recognized as a valid
      cause of action in Pennsylvania, and whether a duty to preserve
      said evidence arose from promissory estoppel or tort, the
      calculation of damages is an essential feature of any claim
      attempting to hold a third party accountable for spoliation of
      evidence. Accordingly, proving damages in a claim for third-party
      spoliation of evidence is fraught with many of the same valuation
      problems that litigants are likely to confront in other types of
      actions such as promissory estoppel involving spoliation of
      evidence.

      . . . A trier of fact, in the instant case, would have to speculate
      as to the nature of the missing evidence and the effect it might
      have in the underlying action, rendering the fact of harm and
      causation uncertain and incapable of reducing to damages,
      thereby creating the potential for arbitrary and inconsistent
      results.

Tr. Ct. Op., entered 11/12/21, at 14-15.

      In affirming the trial court, the Majority here adopts the trial court’s

reliance on Pyeritz, and its mischaracterization of the claim pled in the

Complaint as one sounding in spoliation of evidence. Erie did not assert a

cause of action for spoliation of evidence; it asserted a claim for promissory

estoppel. Pyeritz did not address a claim of promissory estoppel at all, as

the Majority’s discussion of the case shows, and that case is, therefore,

irrelevant to Erie’s claim.

      I, thus, turn to the propriety of the trial court’s grant of summary

judgment on Erie’s promissory estoppel claim, mindful of our standard and

scope of review and the following legal precepts.




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      We reverse an order granting summary judgment only where the trial

court committed an error of law or abused its discretion. Pappas v. Asbel,

768 A.2d 1089, 1095 (Pa. 2001). Our scope of review is plenary. Id. In

addition, “[w]e 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.” Id. “Only where there is no

genuine issue as to any material fact and it is clear that the moving party is

entitled to a judgment as a matter of law will summary judgment be entered.”

Id.

      “[T]he doctrine of promissory estoppel is invoked to avoid injustice by

making enforceable a promise made by one party to the other when the

promisee relies on the promise and therefore changes his position to his own

detriment.”   Crouse v. Cyclops Indus., 745 A.2d 606, 610 (Pa. 2000).

Promissory estoppel generally sounds in contract law as it permits an equitable

remedy to an otherwise unenforceable binding agreement. Id. at 610. “To

maintain a promissory estoppel action, a claimant must aver the following

elements: (1) the promisor [here, USAA] made a promise that it should have

reasonably expected would induce action or forbearance on the part of the

promisee [Erie]; (2) the promisee [Erie] actually took action or refrained from

taking action in reliance on the promise; and (3) injustice can be avoided only

by enforcing the promise.” Sullivan v. Chartwell Inv. Partners, LP, 873

A.2d 710, 717–18 (Pa. Super. 2005).         See also Restatement (Second)


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Contracts § 90(1) (1981) (providing that “[a] promise which the promisor

should reasonably expect to induce action or forbearance on the part of the

promisee or a third person and which does induce such action or forbearance

is binding if injustice can be avoided only by enforcement of the promise. The

remedy granted for breach may be limited as justice requires.”).

      The promisor is affected only by reliance which he does or should
      foresee, and enforcement must be necessary to avoid injustice.
      Satisfaction of the latter requirement may depend on the
      reasonableness of the promisee’s reliance, on its definite and
      substantial character in relation to the remedy sought, on the
      formality with which the promise is made, on the extent to which
      the evidentiary, cautionary, deterrent and channeling functions of
      form are met by the commercial setting or otherwise, and on the
      extent to which such other policies as the enforcement of bargains
      and the prevention of unjust enrichment are relevant.

Restatement (Second) of Contracts § 90 (1981) (Comment B). The

reasonableness of the promisee’s reliance is a determination to be made by a

trier of fact. Lobolito, Inc. v. North Pocono School Dist, 755 A.2d 1287,

1292 (Pa. 2000).

      Here, the trial court made no determinations as to the reasonableness

of Erie’s reliance on USAA’s promise to secure, wrap and preserve the BMW

prior to granting USAA’s motion for summary judgment and denying Erie’s

motion for summary judgment.         As noted by the Lobolito Court, the

reasonableness of the reliance is a material issue of fact to be made by a trier

of fact. For this reason, summary judgment is not appropriate.

      Moreover, it is well-settled that courts will generally determine damages

only after promissory estoppel has been established, and then damages will

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J-A22040-22


be based on the amount of money the promisee expended or lost in reliance

on the promise. See id. at 1293 n.10 (Pa. 2000) (citing Banas v. Matthews

Int'l Corp., 502 A.2d 637, 648 n. 12 (Pa. Super. 1985) (under promissory

estoppel, a promisee’s recovery is ordinarily “limited to recovery of the

amounts lost and expended in reliance on the promise”)).

     Here, Erie did not indicate what amount of money it expended or lost in

reliance on USAA’s promise to preserve the BMW as evidence, but the

determination of damages is not an element of promissory estoppel. Rather,

it is the remedy to be determined after a fact-finder determines that the

elements of promissory estoppel have been shown, i.e., the promisor made a

promise upon which it knew the promisee would rely, the promisee reasonably

relied, and injustice can be avoided only by enforcing the promise. Thus, in

addition to erring in granting summary judgment to USAA, the trial court erred

in discussing damages at all.

     Accordingly, I would reverse the trial court’s grant of USAA’s motion for

summary judgment. For these reasons, I dissent.




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