National Recovery Systems v. Perlman ( 1987 )

BECK, Judge:

This appeal presents the issue of whether an order denying a motion to enforce an alleged settlement agreement is appealable. We find that it is not, and therefore quash this appeal.

On September 19, 1985, appellant National Recovery Systems filed an action in assumpsit to recover $18,000 which appellee Allen Perlman had allegedly borrowed and failed to repay. Appellee filed preliminary objections which were argued and subsequently denied. On December 26, 1985, appellee filed an answer and new matter to appellant’s action. The case was then scheduled to be heard by an arbitration panel on May 21, 1986.

Prior to the hearing date, however, the parties exchanged correspondence regarding settlement. Appellant claims that in that correspondence, appellee offered appellant the sum of $9,000.00 in full and final settlement of the suit, to be paid within ten days after appellant’s acceptance of the settlement offer. Appellant avers that he accepted this settlement offer and a binding contract arose. Appellee, on the other hand, claims that appellant’s purported acceptance added the condition of payment within ten days and was therefore no more than a counteroffer, which appellee did not accept.

On May 9, 1986, appellant filed a motion to enforce the alleged settlement agreement, which the trial court denied. Appellant filed a timely appeal of the trial court’s order. Appellee then moved to quash the appeal as being interlocutory in nature.

We agree with appellee that the denial of a motion to enforce a settlement agreement is non-appealable. We therefore quash this appeal.

This is not the first time that this court has considered whether an order denying enforcement of an alleged settlement agreement is appealable. In Darabant v. Atwood Home Builders, Inc., 281 Pa.Super. 153, 421 A.2d 1194 (1980), this court dismissed an appeal from an order striking a settlement agreement and placing the case on the trial list. The court in Darabant found that such an order was neither a final order from which an appeal could be taken pursuant to Pa.R.App.P. 341, nor was it one of the appeal-able interlocutory decrees from which an appeal is authorized by Pa.R.App.P. 311. Id., 281 Pa.Super. at 155, 421 A.2d at 1195. The court did not consider, however, whether or not the order was appealable under the doctrine first enunciated in Cohen v. Beneficial Industrial Loan Corporation, 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949), and adopted by Pennsylvania in Bell v. Beneficial Consumer Discount Co., 465 Pa. 225, 348 A.2d 734 (1975).

We therefore consider whether an order denying enforcement of a settlement agreement is appealable under the Cohen doctrine.

Under Cohen, an order is considered final and appealable if (1) it is separable from and collateral to the main cause of action; (2) the right involved is too important to be denied review; and (3) the question presented is such that if review is postponed until final judgment in the case, the claimed right will be irreparably lost.

Pugar v. Greco, 483 Pa. 68, 73, 394 A.2d 542, 545 (1978).

The trial court’s order in the instant case is separable from and collateral to the main cause of action. The order disposed of the issue of whether the purported settlement agreement was enforceable, a matter separable from the merits of appellant’s claim in assumpsit. We assume arguendo that appellant’s right to enforcement of the settlement agreement is a right too important to be denied review. However, we do not find that the question of the validity of a settlement agreement is “such that if review is postponed until final judgment in the case, the claimed right will be irreparably lost.” Pugar v. Greco, 483 Pa. at 73, 394 A.2d at 545.

The right appellant is asserting in this action is the right to the benefit of what appellant alleges is a valid settlement agreement. The primary benefit of such an agreement is, of course, the avoidance of the time, expense, and other burdens incidental to proceeding to trial on the underlying assumpsit claim. While our quashing this appeal has the effect of requiring appellant to proceed to trial on the underlying claim, it does not affect in any way appellant’s right to the benefits of his settlement agreement. Appellant is free to raise the issue of the validity of the settlement agreement on appeal from the judgment on the underlying claim, or in a collateral action. If the settlement agreement is determined to be valid, appellant will have the right to recover from appellee the damages caused by appellee’s breach of the agreement, including the time, expense, and other burdens of proceeding to trial.

It was this availability of later review that persuaded our Supreme Court in Pugar v. Greco to hold that an order denying parties’ leave to appeal an arbitration award until they had paid the costs of arbitration as required by local rule was not appealable under the Cohen standard. Appellants challenged the rule on the grounds that requiring them to pay the costs of arbitration before being permitted to appeal the award to the court of common pleas deprived them of their right to a jury trial. Our Supreme Court said:

The order of the trial court is, indeed, collateral to the basic liability question, and it does involve a right too important to be denied review. The order does not, however, adversely affect a claimed right which will be irreparably lost if review is postponed. Although appellants must in the first instance pay the required amount of costs and fees they do not thereby lose their right to question the validity of the fee payment as a condition to their right to trial de novo either at the termination of this proceeding or in a collateral action. The issue is neither waived nor mooted by the inability of appellants to appeal at this stage. Appellants are not “out of court”, either on the merits of the automobile accident claim or on the right to jury trial question. Upon payment of the fee and costs appellants’ appeal from the adverse arbitrators’ award will proceed in the customary manner. If they or either of them should not succeed in that de novo trial, the alleged error in requiring the payment of the $60 fee as a condition of the ability to have a jury trial can be raised on appeal in the normal course, along with any other assignments of error. If, however, either appellant or both should prevail in their trial de novo, they will not be precluded from seeking the return of the fee from the court, for the ruling on the fee payment will have become a final adverse ruling from which an appeal would then lie. Alternatively, they might choose to proceed by a collateral action. While either method may be more cumbersome for them than it would be if this court were to reach and decide the merits on this present appeal, each alternative would comport with our policy of discouraging a multiplicity of appeals in a single case, or, as it has sometimes been put, the policy of precluding “piecemeal determinations and the consequent protraction of litigation.” McGee v. Singley, 382 Pa. 18, 114 A.2d 141 (1955).

Pugar v. Greco, 483 Pa. at 75, 394 A.2d at 545-546 (emphasis added) (footnote omitted).

We quash this appeal because the order here does not meet the requirements for appealability under the Cohen doctrine. We also wish to state our growing conviction that our approach to the appealability of orders under Cohen needs to be re-examined. As stated by Judge Del Sole, in a dissenting opinion in Zarnecki v. Shepegi, 532 A.2d 873, 881 (Pa.Super.1987) (Del Sole, J., dissenting):

The present state of the law in this area is confusing to say the least. Our appellate courts have held that the failure to immediately appeal one of these misnomered ‘final and appealable orders’ results in a loss of the right to have the trial court action later reviewed. See Mineo v. Tancini, 349 Pa.Super. 115, 502 A.2d 1300 (1986), Fidelity Bank v. Duden, 361 Pa.Super. 124, 521 A.2d 958 (1987); (dissenting opinion by Del Sole, J.). This in and of itself invites cautious counsel, when faced with the difficult question of determining whether or not an order is appealable, to take an immediate appeal, delay the litigation at the trial level and further burden the appellate courts of Pennsylvania.

We are of the opinion that both the bench and bar would be better served by a return to the strict definition of a final order given in Pugar v. Greco: “one which usually ends the litigation, or alternatively, disposes of the entire case,” 483 Pa. 68, 73, 394 A.2d 542, 545 (1978), at least as to one party to the suit.

Appeal quashed.

OLSZEWSKI, J., files a dissenting opinion.