L. Vignetti v. Borough of Munhall and Munhall Sanitary Sewer Municipal Authority ( 2017 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Linda Vignetti, Pat Ramicone :
and Computer Goo Roos, Inc., :
Appellants :
:
v. : No. 571 C.D. 2016
: Argued: April 4, 2017
Borough of Munhall and :
Munhall Sanitary Sewer :
Municipal Authority :
BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge
HONORABLE P. KEVIN BROBSON, Judge
HONORABLE MICHAEL H. WOJCIK, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY PRESIDENT JUDGE LEAVITT FILED: June 9, 2017
Linda Vignetti, Pat Ramicone, and Computer Goo-Roos, Inc.
(collectively, Property Owners) appeal an order of the Court of Common Pleas of
Allegheny County (trial court) enforcing a settlement agreement between Property
Owners and the Munhall Sanitary Sewer Municipal Authority (Sewer Authority).
Property Owners contend the trial court erred in enforcing the settlement
agreement because the parties never agreed to the terms of the settlement release.
For the reasons that follow, we affirm the order of the trial court.
Property Owners own a building located in Munhall Borough,
Allegheny County.1 Since August 9, 2007, the building’s basement has
experienced periodic flooding. Property Owners engaged the Chiurazzi Law
1
Linda Vignetti and Pat Ramicone are co-owners of Computer Goo-Roos, Inc., a retail
establishment located on the first floor of the building. Above the store are four apartments.
Vignetti and Ramicone each occupy one apartment; the remaining two are leased.
Group to represent them. On July 10, 2009, Property Owners initiated an action
against Munhall Borough (Borough), seeking equitable relief and damages for
property loss and bodily injury alleged to have been caused by the Borough’s
negligent maintenance of its storm water and sewer systems. The complaint was
later amended to add the Sewer Authority as a defendant.2 Thereafter, the parties
engaged in discovery for nearly three years; the case was listed for trial and
continued numerous times.
On May 4, 2015, while the parties were still engaged in discovery, the
Sewer Authority’s insurance carrier sent an email to Property Owners’ counsel,
Adam Vahanian, Esquire, offering a settlement of $35,000. Vahanian Deposition,
Ex. 1; R.R. 260a. The email stated the offer would be open for ten days. Id. On
May 14, 2015, Vahanian responded by email that his clients “accept[ed] the Sewer
Authority’s $35,000 offer in full and final settlement of their claims.” Id. Property
Owners executed a settlement sheet setting forth how the settlement would be
shared with counsel, for his fees. On September 3, 2015, Vahanian emailed
Property Owners a copy of a release, which they refused to execute.
On October 23, 2015, the Sewer Authority petitioned the trial court to
enforce the settlement. The trial court issued a rule to show cause why the
settlement agreement should not be enforced. Property Owners offered their
depositions and deposed Vahanian on the issue.
2
The Sewer Authority was added as a defendant due to an agreement of sale between the
Borough and the Sewer Authority by which the Borough transferred its liabilities in its sewer
system to the Authority, but retained ownership and maintenance of the surrounding catch
basins. Supplemental Reproduced Record at 3b-30b (S.R.R. __).
2
Property Owner Linda Vignetti testified that she told Vahanian that
they were not willing to release Sewer Authority from making repairs to their
building:
[Counsel]: ... And as a result of the discussion that you had at
your building with Mr. Vahanian, you made it clear to him that
there would be no settlement unless the repairs were made by
the Authority, is that correct?
[Vignetti]: Absolutely. Absolutely. I would not – [a]nd I said,
“If there is no repairs, there is no settlement.”
Vignetti Deposition at 62-63; R.R. 340a-41a. Further, she testified that she was
not informed that her agreement to settle for $35,000 would include a general
release:
[Counsel]: ... [P]rior to September 3, 2015, did Mr. Vahanian
ever tell you that those terms were in there? And what I mean
by “those terms” is that you would be releasing all rights that
you would have against the Sewer Authority?
[Vignetti]: No.
[Counsel]: And did he tell you that they would not be
performing the repairs that you wanted performed?
[Vignetti]: No.
Id. at 25; R.R. 304a.
Property Owner Pat Ramicone also testified that Vahanian never
communicated the terms of the release to Property Owners:
[Counsel]: … [A]fter you read [the release], what reaction did
you have to it?
[Ramicone]: I’m not signing this.
[Counsel]: Why?
3
[Ramicone]: It was – It was beyond – It was totally against any
of our interests.
[Counsel]: Why is that?
[Ramicone]: Between the things we had discussed with
[Vahanian], and things we assumed would still be available to
us, we were signing away all our rights for the rest of our lives
for [$]35,000.
[Counsel]: Did you – did you authorize [Vahanian] to enter into
negotiations for that type of release on your behalf?
[Ramicone]: For those type of terms?
[Counsel]: Yes.
[Ramicone]: No.
[Counsel]: Did you ever agree to those terms?
[Ramicone]: I never knew about the terms.
Ramicone Deposition at 7-8; R.R. 378a-79a.
Vahanian’s testimony painted a different picture. He conceded that
although he may not have used the term “release,” he believed his clients
understood that by agreeing to a payment of $35,000, the Sewer Authority would
be released from any additional liability. On cross-examination, Vahanian testified
as follows:
[Counsel]: When you conveyed the settlement offer to your
clients, [Property Owners,] whether it be the first time or at any
time thereafter before it was accepted, did you tell your clients
that the settlement offer was a payment of money in exchange
for a full release of liability against the authority?
[Vahanian]: I probably didn’t use those exact words. I have
discussed settlement with my clients numerous times for
months probably leading up to [Sewer Authority’s] offer. I
think they were aware of what it meant to settle a case; and I
don’t know if I used the terms, as you put them, $35,000 in
4
exchange for a full and final release against the [Sewer
A]uthority; but the offer I conveyed was – I would have said
something along the lines of $35,000 to settle the case with the
understanding that based on numerous conversations with my
client [sic] that they understood what that meant.
Vahanian Deposition at 14; R.R. 196a (emphasis added).
At his deposition, Vahanian also testified about an email exchange
which led him to believe Property Owners understood that the settlement included
a full release of the Sewer Authority’s liability. On May 14, 2015, Property
Owners sent an email to Vahanian that stated:
Our only contention is, if we do this; and we remain w[ith] just
the [B]orough; what if the [B]orough shows it is the [S]ewer
[A]uth[ority] after all from prior knowledge, etc.
Id., Ex. 2; R.R. 261a. Vahanian testified as follows:
[Counsel]: Was [the May 14th email] – did that confirm your
understanding that your clients knew if they accepted the
[Sewer A]uthority’s settlement offer of $35,000 that they could
not pursue the [Sewer A]uthority any further?
[Vahanian]: That was my understanding.
Id. at 19; R.R. 201a. Later in the deposition, Vahanian reiterated that he believed
Property Owners understood that a release was a part of the settlement terms:
[Counsel]: …[F]rom your numerous discussions with [Property
Owners], did you understand that they understood if they
accepted the [Sewer A]uthority’s monetary offer of settlement,
that the authority would be off the hook for everything they
were claiming?
[Vahanian]: Absolutely without question.
Id. at 64; R.R. 246a.
5
After a review of the record, the trial court granted the Sewer
Authority’s petition to enforce the settlement agreement. Property Owners filed a
motion for reconsideration, which the trial court denied.
On April 8, 2016, Property Owners appealed to this Court, and the
Sewer Authority responded with a motion to quash the appeal. The motion states
that the trial court’s order to enforce the settlement was not a final appealable
order. This Court ordered that the Sewer Authority’s motion to quash be decided
along with the appeal on the merits and directed the parties to address the
appealability of the trial court’s order in their principal briefs. The matter is now
ready for disposition.
Collateral Order
We first address the appealability of the trial court’s order enforcing
settlement. As a general rule, only final orders are appealable. A final order is one
that “disposes of all claims and of all parties” or is expressly “entered as a final
order” by a trial court. Pa. R.A.P. 341(b). The purpose of limiting appeals to
orders that are final is “to prevent piecemeal determinations and the consequent
protraction of litigation.” Brophy v. Philadelphia Gas Works and Philadelphia
Facilities Management Corporation, 921 A.2d 80, 86 (Pa. Cmwlth. 2007).
The collateral order doctrine provides an exception to the general rule.
It allows appeals of orders “which address claims of right ‘separable from, and
collateral to, rights asserted in the action, too important to be denied review and
too independent of the cause [of action] itself to require that appellate
consideration be deferred until the whole case is adjudicated.’” Rae v.
Pennsylvania Funeral Directors Association, 977 A.2d 1121, 1125 (Pa. 2009)
6
(quoting Cohen v. Beneficial Industry Loan Corporation, 337 U.S. 541, 546
(1949)).
The collateral order doctrine is codified in Rule 313 of the
Pennsylvania Rules of Appellate Procedure, and it states:
(a) General rule. An appeal may be taken as of right from a
collateral order of an administrative agency or lower court.
(b) Definition. A collateral order is an order separable from
and collateral to the main cause of action where the right
involved is too important to be denied review and the question
presented is such that if review is postponed until final
judgment in the case, the claim will be irreparably lost.
Pa. R.A.P. 313. “Thus, an immediate appeal is permitted under the collateral
order rule where: (1) the order 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 if review is postponed until final judgment, the claim
will be irreparably lost.” Brophy, 921 A.2d at 87. Because the collateral order
rule is an exception to the general rule that only a final order may be appealed, it
is interpreted narrowly. Each prong must be clearly satisfied for appellate
jurisdiction to lie. Consistent with these principles, we consider whether the trial
court’s order to enforce a settlement is one that satisfies the three elements of a
collateral order.
The first element requires the order in question to be separable from
and collateral to the main cause of action. We have explained that “[w]here
review of the order at issue does not implicate or affect the merits of the
underlying dispute, it is separable from and collateral to the main cause of
action.” Township of Worcester v. Office of Open Records, 129 A.3d 44, 55 (Pa.
Cmwlth. 2016).
7
Property Owners argue that the order meets this element because the
underlying action concerns the negligent maintenance of Borough storm water
runoff and sewer systems, whereas the order appealed involves enforcement of a
purported settlement with the Sewer Authority. The Sewer Authority responds
that the order is not separable from the main cause of action because the order to
enforce settlement was based, at least in part, upon the lack of evidence to support
Property Owners’ case against the Sewer Authority and, thus, is inextricable from
the merits of the underlying case.
We disagree with the Sewer Authority. A settlement agreement, by
its nature, is not an adjudication of the merits of a claim, but an agreement to
avoid litigation by compromise. A party may settle a case for reasons that have
nothing to do with the merits of a case such as, for example, the cost of litigation.
Accordingly, the order enforcing the settlement is separable from and collateral to
the underlying claim of negligence.
A collateral order must also involve a right too important to be
denied review. To satisfy this second prong, “it is not sufficient that the issue be
important to the particular parties … [r]ather, the issue must involve rights deeply
rooted in public policy going beyond the particular litigation at hand.” Spanier v.
Freeh, 95 A.3d 342, 346 (Pa. Super. 2014) (internal citations omitted).
Property owners assert the second prong is satisfied and, in support,
direct us to Geniviva v. Frisk, 725 A.2d 1209 (Pa. 1999). In Geniviva, the trial
court denied a motion to approve a settlement between the executor of an estate
and the attorney who represented the executor. The attorney appealed the denial,
and the Superior Court quashed the appeal sua sponte for the stated reason that
the appeal was interlocutory and not collateral.
8
On further appeal, the Supreme Court analyzed the trial court’s
denial of the settlement under Rule 313 of the Pennsylvania Rules of Appellate
Procedure. The attorney had argued that his right to avoid trial on account of a
settlement agreement was sufficiently important under Rule 313 because it
advanced the public policy favoring the voluntary resolution of disputes. The
Supreme Court rejected this contention, noting that “[a]ny efficiencies gained in
reduced trial litigation would be at the expense of increased appellate litigation.”
Geniviva, 725 A.2d at 1214. Ultimately, for other reasons, the Supreme Court
affirmed the Superior Court’s conclusion that the order did not involve a claim of
sufficient import to satisfy the second requirement of a collateral order.
Property Owners assert Geniviva is distinguishable. Geneviva
presented the opposite scenario, i.e., the denial of a motion to enforce settlement
and allowing litigation to continue. By contrast, the order in question will deprive
Property Owners of their right to litigate against the Sewer Authority, which is an
interest “deeply rooted in public policy.” Id. The Sewer Authority responds that
orders “deeply rooted in public policy” are those that implicate constitutional
rights. See, e.g., Melvin v. Doe, 836 A.2d 42, 50 (Pa. 2003) (holding that free
speech is a right too important to be denied review). There is no such claim here.
We disagree with the Sewer Authority’s overly narrow view of the
second prong. The Pennsylvania Constitution provides that “[a]ll courts shall be
open; and every man for an injury done him in his lands, goods, person or
reputation shall have remedy by due course of law….” PA. CONST. art. 1, §11.
Forfeiture of the right to pursue a legal claim is of sufficient import to warrant
immediate appellate review.
9
Finally, a collateral order must involve a claim that will be
irreparably lost if review is postponed until final judgment. “[A]n order is not
immediately appealable unless it can be said that denial of immediate review
would render impossible any review whatsoever of the appellant’s claim.”
Beltran v. Piersody, 748 A.2d 715, 718 (Pa. Super. 2000).
Property Owners contend that if they cannot immediately appeal the
order enforcing settlement, they will lose their right to proceed against the Sewer
Authority. In support, they cite to National Recovery Systems v. Perlman, 533
A.2d 152 (Pa. Super. 1987). In National Recovery, the trial court denied a motion
to enforce settlement where the parties disputed the validity of the settlement
agreement. The Superior Court quashed the appeal, finding that the order was not
collateral because the appellant’s claim was not irreparably lost. The Superior
Court acknowledged that quashing the appeal had the practical effect of requiring
appellant to proceed to trial; however, the appellant’s right to the benefit of the
purported settlement agreement was not wholly lost. The Superior Court
explained that
[a]ppellant 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.
Id. at 153.
Again, National Recovery presents the opposite scenario, i.e., the
refusal to enforce a settlement agreement. Property Owners argue that National
Recovery supports their position. Under the trial court’s order, they forfeit their
10
right to pursue claims against the Sewer Authority while they litigate against the
Borough.
The Sewer Authority responds that postponing review of the trial
court’s order to enforce settlement will not be detrimental to Property Owners.
Their litigation against the Borough could result in a full award of all of Property
Owners’ alleged damages; therefore, they would have no need to pursue their
appeal of the trial court’s enforcement of the settlement.
If review is denied, Property Owners’ right to pursue the Sewer
Authority and the Borough as joint tortfeasors in a single proceeding will be lost.
The trial court’s order granting enforcement of settlement can be appealed after the
disposition of Property Owners’ claims against the Borough.3 However, they will
lose the opportunity to pursue their negligence claims against the Sewer Authority
and the Borough in a single proceeding.4 In a case where there is an issue as to
which of two defendants is liable, separating the claims to be tried against each
defendant individually could be detrimental to Property Owners’ case.
Although close, we conclude the prerequisites for an appealable
collateral order under Pa. R.A.P. 313 are met and deny the Sewer Authority’s
motion to quash. Accordingly, we turn to the merits of Property Owners’ appeal.
3
See Rush v. Philadelphia Newspapers, Inc., 732 A.2d 648, 651 (Pa. Super. 1999) (noting that
when a trial court does not certify an order granting summary judgment in accordance with Pa.
R.A.P. 341(c), “an appellant must wait to file his appeal until after an order disposing of all
claims or all parties has been issued.”).
4
This is a factor a trial court may consider in deciding whether to certify an order as final under
Pa. R.A.P. 341(c). See Pa. R.A.P. 341; Williams v. Anderson Equipment Company, (Pa. Super.,
No. 1454 W.D.A. 2013, filed October 7, 2014) (unreported). Property Owners did not petition
the trial court for certification.
11
Petition to Enforce
On appeal,5 Property Owners assert that the trial court erred in
granting the Sewer Authority’s petition to enforce settlement because there was no
“meeting of the minds” on the terms of the release. The trial court, in granting the
Sewer Authority’s petition to enforce settlement, stated as follows:
The record consists of the Petition, an Answer, and three
depositions (Linda Vignetti, Pat Ramicone, and Adam
Vahanian (initial counsel for [Property Owners] in the
underlying action)). I find that the record supports a finding
that the claims against the [Sewer Authority] were settled for
$35,000. An email dated May 14, 2015 from the [P]roperty
[O]wners to Attorney Vahanian states, “[w]e trust your gut, (no
matter how little it is). We are willing to go forth with your
recommendation regarding the sewer auth. (kisses and
admiration from you are okay at a later time []).” Vahanian
Dep. Ex. 2. Thereafter, Linda Vignetti and Pat Ramicone
signed a Settlement Sheet showing the settlement amount (as to
[Sewer Authority] only) of $35,000. The Settlement Sheet
includes a statement that [Property Owners] acknowledged the
above settlement terms. Vahanian Dep. Ex. 3.
Trial Court Memorandum and Order, 1/27/2016, at 1; R.R. 104a.
Settlement agreements are enforced according to the principles of
contract law. Pulcinello v. Consolidated Rail Corporation, 784 A.2d 122, 124 (Pa.
Super. 2001). The sine qua non of an enforceable contract is a meeting of the
5
“When reviewing a trial court’s decision to enforce a settlement agreement, our scope of review
is plenary as to questions of law, and we are free to draw our own inferences and reach our own
conclusions from the facts as found by the court.... However, we are only bound by the trial
court’s findings of fact which are supported by competent evidence.... The prevailing party is
entitled to have evidence viewed in the light most favorable to its position.... Thus, we will only
overturn the trial court’s decision when the factual findings of the court are against the weight of
the evidence or its legal conclusions are erroneous....” Bennett v. Juzelenos, 791 A.2d 403, 406
(Pa. Super. 2002) (citations omitted).
12
minds. This means there must be a “concurrence of both parties to the agreement
[and] … there must be a meeting of the minds on all terms of the contract.” City of
Erie v. Fraternal Order of Police, Lodge 7, 977 A.2d 3, 12 (Pa. Cmwlth. 2009)
(citation omitted).
Property Owners acknowledge that they authorized settlement in the
amount of $35,000 for damages based on their claims against the Sewer
Authority.6 However, they contend that they did not agree to a general release of
claims against the Sewer Authority, including their right to pursue claims for
repairs and personal injury. The Sewer Authority responds that Property Owners
understood that the $35,000 settlement would release the Sewer Authority from all
claims arising out of the initial complaint. That Property Owners are dissatisfied
with their legal representation does not invalidate the settlement agreement.
The pertinent question is whether the Settlement Sheet is complete
and released the Sewer Authority from any liability. The language of the release
states, in pertinent part:
In consideration of the payment set forth above, [Property
Owners] hereby completely release[ ] and forever discharge[ ]
[Sewer Authority] from any and all past, present and future
claims, demands, obligations, actions, causes of action,
wrongful death claims, rights, damages, costs, losses of
services, expenses and compensation of any nature whatsoever,
whether based on a tort, contract or other theory of recovery,
6
Following several discussions with Vahanian regarding the Sewer Authority’s $35,000
settlement offer, Property Owners granted express authority to Vahanian in an email dated May
14, 2015, with the subject “sewer auth[ority] offer.” Therein, Property Owners wrote:
We trust your gut, (no matter how little it is). We are willing to go forth with
your recommendation regarding the sewer auth. (kisses and admiration from you
are okay at a later time []).
Vahanian Dep. Ex. 2; R.R. 261a.
13
which the [Property Owners] now ha[ve], or which may
hereafter accrue or otherwise be acquired, on account of, or
may in any way grow out of, or which are the subject of the
Complaint, Amended Complaint, and all related pleadings,
including, without limitation, any and all known or unknown
claims for bodily and personal injuries to [Property Owners], or
any future claim of [Property Owners’] representatives or heirs,
which have resulted or may result from the alleged acts or
omissions of the [Sewer Authority] as set forth in the
Complaint and any amendment thereto or thereof in the Civil
Action.
Release Agreement at 1; R.R. 63a (emphasis added). The Release Agreement is
clear, but it has not been signed by Property Owners.
Vahanian communicated with Property Owners by email. In one
email, Property Owners seemed to understand the risk of settling with one of the
two defendants. Their email stated:
Our only contention is, if we do this; and we remain w[ith] just
the [B]orough; what if the [B]orough shows it is the [S]ewer
[A]uth[ority] after all from prior knowledge, etc.
Vahanian Deposition, Ex. 2; R.R. 261a (emphasis added). Nevertheless, later in
the same email, Property Owners granted Vahanian express authority to settle
based on his legal recommendation. Id.Subsequently, on June 5, 2015, Property Owners executed a
settlement sheet setting forth the final payment amounts and settlement terms.
Vahanian Deposition, Ex. 3; R.R. 262a.7 The record also shows that Vahanian
7
Property Owners subsequently executed an amended settlement sheet on July 14, 2015.
Vahanian Deposition, Ex. 4; R.R. 263a-64a. The terms of the settlement between Property
Owners and the Sewer Authority remained the same. The subsequent settlement sheet merely
removed language stating Property Owners were pleased with the services they received from
counsel who represented them prior to Vahanian.
14
informed Property Owners that the language of the release was being negotiated
and would be included in the settlement with the Sewer Authority. This is
evidenced in an email from Property Owners to Vahanian dated June 17, 2015.
Therein, Property Owners wrote:
I know you spoke of a multiple page disclaimer (?) from [Sewer
Authority], would you please forward a copy for us to review.
(is this the hold back for payment to us?)
Id., Ex. 7; R.R. 272a (emphasis added). This establishes that at some date prior to
June 17, 2015, Vahanian relayed to Property Owners that a multiple page
disclaimer, i.e., release, would be forthcoming as a term of the settlement
agreement.
This Court will overturn a trial court’s decision enforcing settlement
only where the factual findings of the court are against the weight of the evidence.
Bennett, 791 A.2d at 406. The deposition testimony of Vahanian and
accompanying email evidence support the trial court’s finding that Property
Owners understood that the settlement released the Sewer Authority from further
liability in the matter. We cannot say, therefore, that the evidence does not support
the trial court’s order.
Conclusion
For the reasons set forth above, we affirm the trial court’s order
enforcing settlement.
______________________________________
MARY HANNAH LEAVITT, President Judge
Judge McCullough did not participate in the decision in this case.
15
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Linda Vignetti, Pat Ramicone :
and Computer Goo Roos, Inc., :
Appellants :
:
v. : No. 571 C.D. 2016
:
Borough of Munhall and :
Munhall Sanitary Sewer :
Municipal Authority :
ORDER
AND NOW, this 9th day of June, 2017, the Motion to Quash Appeal
filed by the Munhall Sanitary Sewer Authority in the above-captioned matter is
hereby DENIED. The order of the Court of Common Pleas of Allegheny County
dated March 18, 2016 is AFFIRMED.
______________________________________
MARY HANNAH LEAVITT, President Judge