Ducas, M. v. Pinecrest Development ( 2021 )

J-A01010-21
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
MICHAEL J. DUCAS, WILD PINES : IN THE SUPERIOR COURT OF
ENTERPRISES, LLC., AND WILD : PENNSYLVANIA
PINES MANAGEMENT, INC :
:
Appellant :
:
:
v. :
: No. 1160 EDA 2020
:
PINECREST DEVELOPMENT CORP., :
Appeal from the Judgment Entered June 12, 2020
In the Court of Common Pleas of Monroe County Civil Division at No(s):
No. 2010-07014
BEFORE: BENDER, P.J.E., OLSON, J., and STRASSBURGER, J.*
MEMORANDUM BY BENDER, P.J.E.: Filed: May 6, 2021
Michael J. Ducas (“Ducas”), Wild Pines Enterprises, LLC (“WPE”), and
Wild Pines Management, Inc., (collectively “Appellants”), appeal from the
judgment entered on June 12, 2020, in favor of Appellee, Pinecrest
Development Corp. (“PDC”), after a non-jury trial on Appellants’ breach of
contract and unjust enrichment action.1 After careful review, we affirm.
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* Retired Senior Judge assigned to the Superior Court.
1 Appellants purport to appeal from the April 29, 2020 order denying their
motion for post-trial relief; however, an appeal properly lies from the entry of
judgment following the trial court’s disposition of post-trial motions. See
Fanning v. Davne, 795 A.2d 388 (Pa. Super. 2002). Although Appellants’
notice of appeal was filed prematurely in the instant matter, final judgment
was entered on June 12, 2020; hence, the notice of appeal relates forward to
that same date. See Pa.R.A.P. 905(a)(5). See also Drum v. Shaul
Equipment and Supply Co., 787 A.2d 1050, 1052 n.1 (Pa. Super. 2001)
(Footnote Continued Next Page)
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The trial court provided the following summary of the relevant facts and
procedural history in this matter:
[PDC] is the developer corporation of the Pinecrest Lake
Development (“Pinecrest”), located at Sullivan Trail, Pocono Pines,
Monroe County, Pennsylvania. Pinecrest was planned to consist
of several sections, including: (a) the hotel parcel; (b) the middle
section, comprising 441 lots (76 for townhomes, 365 for single
family homes); (c) 24 Lake Villa lots; (d) 16 Boy Scouts lots; (e)
[the] 200[-]acre nature preserve; (f) [the] golf course and golf
course lots; (g) the cemetery; (h) the swim complex; and (i) the
lake.[2] [Appellants’] claim against [PDC] seeks the return of
deposit monies paid to Edward Carroll[, president of PDC,] and
the payment of monies allegedly loaned to [PDC] for the purpose
of increased development. [Appellants] commenced with their
lawsuit on or about July 20, 2009, by the filing of their complaint
in Lackawanna County, Pennsylvania. The matter was transferred
to Monroe County, Pennsylvania[,] for improper venue.
Edward Carroll [(“Carroll”)], at all times relevant, was the sole
shareholder of [PDC] and its president. Carroll has not been
named as a defendant in this matter and was not called as a
witness. Nevertheless, a series of transactions between Carroll
and … Ducas[] are at issue in this case. In May of 2003, Ducas
and Carroll entered into an agreement of sale (“First Stock Sale
[Agreement]”) for 1,000 shares of voting and 9,000 shares of non-
voting stock in [PDC,] in exchange for the payment of …
$1,500,000.00[]. [PDC] was not a party to this agreement.
Ducas paid deposits in the sum of $255,000.00 to Carroll, but
ultimately defaulted on the agreement.
On February 6, 2004, Ducas and Carroll entered into another stock
agreement (“Second Stock Sale [Agreement]”) for Carroll’s same
stock. Although full payment had yet to be received, closing was
held on February 13, 2004, at the law offices of Gregory Pascale,
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(noting that entry of final judgment during the pendency of an appeal is
sufficient to perfect appellate jurisdiction).
2Ducas is the owner of WPE. On July 26, 2002, WPE purchased Wild Pines
Golf Club, LLC, located in Pinecrest, after the golf course was foreclosed upon.
See N.T. Trial, 4/17/19, at 62-63; Plaintiffs’ Exhibit 3, U.S. Marshall’s Deed.
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where Carroll transferred the stock to Attorney Pascale, who held
the stock in escrow. From the closing up until default in or around
October 2005, Ducas held himself out as [PDC] President,
although he had no authority to do so.[3] In addition to the
deposits previously paid, Ducas executed a promissory note for
the remainder of the original agreed[-]upon price, the amount of
… $1,355,000.00[,] payable in sixty days. On April 30, 2004,
Carroll and Ducas entered into an extension of the February 13,
2004[] promissory note, acknowledging that Ducas … paid an
additional … $337,090.00[,] and extending the deadline for final
payment on the Second Stock Sale [Agreement] until June 30,
2004. The extension agreement provided that Ducas would pay
all hotel costs and franchise application fees, and he agreed that
“all deposit monies shall be kept by the seller if purchaser is not
able to satisfy the obligation under the terms of the contract.”
Ultimately, Ducas defaulted on the agreement.
In October of 2004, Ducas, … Carroll[,] and Brendon … entered
into a third agreement for the sale of [PDC] stock (“Third Stock
Sale [Agreement]”), where Ducas agreed to purchase all
outstanding shares of [PDC] stock in exchange for …
$3,958,000.00[]. In this agreement, [PDC] was a limited party
for a specific purpose. In furtherance of the agreement, Ducas
paid … Carroll deposits totaling … $404,180.00[].
Pursuant to the Third Stock Sale [Agreement], in the event Ducas
should default[,] the “seller shall retain his ownership of the stock
together with all other consideration previously paid or pledged to
the seller by the purchaser or corporation under this
agreement….” Upon Ducas’ default, [PDC] agreed to execute a
non-interest bearing promissory note in the aggregate amount of
… $1,536,000.00[]. Additionally, [PDC] agreed to pay Ducas the
unreimbursed amounts he expended for the development of
Pinecrest subdivision and hotel site, not to exceed … $191,093.63
(“Ducas Incremental Payoff”), and [to] grant a mortgage upon the
middle section of lots, as security for repayment of the promissory
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3 Brendon Carroll (“Brendon”), at all relevant times, held the positions of vice
president and chief operating officer of PDC. Brendon testified that he has
been managing PDC’s day-to-day operations since 1994, and that Ducas did
not take over PDC’s operations in 2004. Moreover, during the period of 2003-
2005, Brendon stated that Ducas did not hold the title of PDC’s president, nor
did he authorize Ducas to enter into any contracts on PDC’s behalf. N.T. Trial,
4/26/19, at 6-7, 13-15, 20-21.
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note, payable to Ducas at the closing on the sale of each lot in
payments of … $3,614.12[] per lot, plus an incremental sum equal
to the Ducas Incremental Payoff divided by … 425[]. Ducas was
unable to complete his obligations and responsibilities pursuant to
the Third Stock Sale [Agreement] because Sovereign Bank
refused to loan him money, which it had previously agreed to lend.
Ducas did not make a demand of [PDC] for the note or mortgage
provided [for] under the Third Stock Sale Agreement.
Prior to entering into the Third Stock Sale Agreement, while Ducas
held himself out to be President of [PDC], he expended monies for
the development of Pinecrest and the hotel site. Although he had
no corporate authority to do so, Ducas entered into a licensing
agreement with Hawthorn Suites Gold Resort on July 7, 2004.
However, he placed the franchise in the name of his sister, not in
[PDC’s] name.[4] Then[,] in August of 2004, Ducas—again[,] with
no corporate authority to do so—entered into an agreement of
sale with Westminster for certain lots in Pinecrest.[5] The
Westminster contract required additional engineering work, which
required the expenditure of additional monies. In total[,] Ducas
spent … $362,394.63[,] in anticipation of [PDC’s] acquiring the
benefits from the Hawthorn and Westminster contracts. He then
spent an additional … $79,000[] procuring the franchise from
Hawthorn after the Third Stock Sale did not close. Ducas
possesses no note, loan agreement[,] or other agreement
evidencing a loan with [PDC].
In addition to the amounts expended by Ducas for development
of the Pinecrest subdivision and hotel[,] Ducas also expended …
$151,700.00[] for [PDC’s] operational expenses. This money was
paid to Pinecrest Lake Companies, Inc.[6] However, there is no
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4 Ducas testified that the licensing agreement was between Hawthorn Suites
and PDC for the purpose of building a Hawthorn Suites hotel in Pinecrest. The
license was placed in his sister’s name, however, as she was going to be the
president of the hotel. The hotel was never built. See N.T. Trial, 4/17/19, at
61-62.
5We glean from the record that Westminster is a subsidiary of Pinecrest Lake
Companies, Inc., discussed infra.
6 Pinecrest Lake Companies, Inc., is a separate and distinct corporate entity
from PDC and is wholly owned by Brendon Carroll. See N.T. Trial, 4/17/19,
at 156; N.T. Trial, 4/26/19, at 10-11.
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evidence [that] Pinecrest Lake Companies, Inc., paid any money
to [PDC]. Additionally, compensation for operating expenses of
[PDC] are not referenced in any of the agreements executed by
Ducas.
On December 22, 2005, [Appellants] entered into an agreement
of sale with [PDC] (“Final Agreement”), where [PDC] was to
purchase [Appellants’] golf course operations[, Wild Pines Golf
Club,] in exchange for payment of … $12,000,000.00[]. On or
about March 31, 2008, the parties terminated their agreement
(“Termination of Final Agreement”). The termination agreement
provided that “this termination shall not relieve buyer’s obligation
to repay Michael J. Ducas any monies owed.” At the time of
execution, Carroll, on behalf of [PDC], and Ducas agreed the
amount owed was “to be determined.” However, no
determination was ever made by the parties.
After Sovereign Bank refused to close on the financing of Ducas’
acquisition of [PDC], Ducas and Ducas Enterprises, LLC[,] filed a
breach of contract action against Sovereign, seeking in excess of
… $20,000,000.00[] in damages. Ducas and Ducas Enterprises,
LLC, received a gross settlement from Sovereign Bank in the
amount of … $3,000,000.00[].
Trial Court Opinion (“TCO I”), 12/30/19, at 2-6 (unnecessary capitalization
omitted).
Instantly, Appellants filed a complaint alleging breach of contract or, in
the alternative, unjust enrichment against PDC, in which they seek the return
of deposit monies paid to Carroll totaling $404,180.00, as well as repayment
of monies allegedly loaned to PDC for development and operational costs
totaling $411,394.63. PDC filed an answer and new matter, which it
subsequently amended. After the court’s granting of several continuances, a
two-day, non-jury trial was held on April 17 and 26, 2019. At trial, Appellants
presented Ducas and Attorney Pascale as witnesses, and Brendon testified for
PDC. The trial court took the matter under advisement and, after careful
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consideration of the testimony and evidence presented, it issued an order
dated December 12, 2019, finding in favor of PDC and against Appellants.
Appellants subsequently filed a motion for post-trial relief,7 which was denied
by the court. On June 12, 2020, after Appellants’ filing of a praecipe with the
prothonotary, judgment was entered in accordance with the December 12,
2019 decision.
On May 18, 2020, Appellants filed a notice of appeal, followed by a
timely, court-ordered Pa.R.A.P. 1925(b) concise statement of errors
complained of on appeal. Appellants now present the following issues for our
review:
A. Whether the learned trial judge erred when she concluded that
the [Third Stock Sale A]greement … dated October 1, 2004[,]
and the [T]ermination [of Final A]greement dated March 31,
2008[,] did not provide for reimbursement of monies paid by
Ducas in the event that Ducas was unable to obtain financing?
B. Whether the learned trial judge erred in concluding that [PDC]
was not required to reimburse Ducas for monies expended for
[its] operating expenses and the development of Pinecrest?
C. Whether the learned trial judge erred when it concluded that
[PDC] was not unjustly enriched by monies spent by Ducas on
its behalf?
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7 The trial court found Appellants’ motion to be “technically untimely,” but
elected to address the merits in the interest of “fairness and substantial
justice,” as it determined a mere single-day delay would not cause undue
prejudice to PDC, and PDC failed to properly object to the untimely filing. Trial
Court Opinion (“TCO II”), 4/30/20, at 2 (citing Pa.R.C.P. 227.1(c)(2); Arches
Condominium Ass’n v. Robinson, 131 A.3d 122 (Pa. Cmwlth. Ct. 2015)
(recognizing that Rule 227.1(c)(2) is not jurisdictional in nature, but merely
procedural); Caldwell v. City of Philadelphia, 517 A.2d 1296 (Pa. Super.
1986) (stating the court has the discretion to determine an untimely post-trial
motion, absent objection and prejudice to the opposing party)).
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Appellants’ Brief at 5.
We apply the following standard of review to a non-jury trial verdict:
Our appellate role in cases arising from non[-]jury 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.
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) (citation and quotation marks
omitted; brackets and ellipses in original). The trial court, as the
finder of fact, is free to believe “all, part or none of the evidence
presented.” Ruthrauff, Inc. v. Ravin, Inc., 914 A.2d 880, 888
(Pa. Super. 2006) (citation omitted). “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 fact
finder.” Id. (citation and internal quotation marks omitted).
Gamesa Energy USA, LLC v. Ten Penn Center Associates, L.P., 181 A.3d
1188, 1191-92 (Pa. Super. 2018).
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Preliminarily, Appellants explain that their claim is broken down into two
parts: (1) seeking reimbursement of deposits in the amount of $404,180.00;8
and (2) seeking reimbursement of monies loaned to PDC for operating
expenses and for the development of its subdivision and hotel, totaling
$411,394.63.9 Appellants’ Brief at 17. Their breach of contract claim is based
on paragraph 2.5 of the Third Stock Sale Agreement, which they allege
provides for reimbursement to Ducas for deposit monies paid, as well as for
monies he expended for the development and operation of PDC. Paragraph
2.5 states, in relevant part:
In the event the Sovereign secondary closing does not occur on
or before November 30, 2004[,] and the cash payments as
required by subparagraphs 2(b) and (c) have not been timely
made in full on or before November 30, 2004, then (i) [the s]eller
shall retain his ownership of the stock together with all other
consideration previously paid or pledged to the seller by the
purchaser or corporation under this agreement, and (ii) the seller
and corporation shall be relieved of all obligations under this
agreement, except that the corporation shall execute a non-
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8 The record reflects that Ducas paid the following deposits to PDC:
$15,000.00 on 5/01/2003; $40,000.00 and $100,000.00 on 6/30/2003;
$100,000.00 on 7/01/2003; and $107,000.00 on 10/01/2004. Ducas also
made one payment to Titan Custom Homes in the amount of $42,180.00 on
2/20/2004. These payments total $404,180.00. See Plaintiffs’ Exhibits 23-
29. See also N.T. Trial, 4/17/19, at 77-78 (Ducas’ testifying that the check
made payable to Titan Custom Homes was a deposit he made on behalf of
Carroll for a home that Carroll was purchasing in Florida, and that the deposit
was intended to be credited towards Ducas’ purchase of PDC).
9 Appellants presented documentation at trial reflecting a total of $386,388.00
in payments, which Ducas claims to have made directly to PDC for its
operational expenses, as well as payments totaling $25,006.00, purportedly
made on behalf of PDC for the development of Pinecrest and the hotel. See
Plaintiffs’ Exhibits 9-22, 30-35.
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interest bearing promissory note (the “Ducas Note”) in the
aggregate amount of $1,536,000 (the “Ducas Payoff”) plus
unreimbursed amounts expended by [the] purchaser for
development of the Pinecrest subdivision and hotel site[,] not to
exceed $191,093.63 (“Ducas Incremental Payoff”)[,] and grant a
mortgage (the “Ducas Mortgage”) as security for repayment of the
Ducas Note upon the middle section…[,] payable to the purchaser
at the closing on the sale of each lot in payments of … $3,614.12[]
per lot[,] plus an incremental sum equal to the Ducas Incremental
Payoff divided by 425 (the “Ducas Lot Release Price”).
Id. at 21-22 (quoting Plaintiffs’ Exhibit 5, Third Stock Sale Agreement, at 2
¶2.5) (unnecessary capitalization omitted).
Appellants further aver that PDC confirmed its agreement to reimburse
Ducas in paragraph 4 of the Termination of Final Agreement, which provides:
4. Notwithstanding anything in this agreement to the contrary set
forth herein, this termination shall not relieve [PDC’s] obligation
to pay Michael J. Ducas any monies owed to Michael J. Ducas by
PDC[.] To be determined.
Id. at 22 (quoting Plaintiffs’ Exhibit 7, Termination of Final Agreement ¶4
(single page)).10 Appellants state that the amount “to be determined” was
intended to include deposit monies, as well as operational expenditures and
monies paid to third parties on behalf of PDC. Id. at 23 (citing N.T. Trial,
4/17/19, at 91). As the trial court discerned, however, no such determination
of an amount owed was ever made by the parties. TCO I at 6.
We now turn to the merits of Appellants’ first two issues, which we
address together herein for ease of disposition. First, Appellants assert that
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10We note that the words “to be determined” were not included in the original,
typed draft of the termination agreement but, rather, are handwritten in the
margin of the document, adjacent to paragraph 4, and appear to be initialed
by Carroll and Ducas. See id.
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the trial court erred in finding that the Third Stock Sale Agreement did not
provide for reimbursement of the deposit monies paid by Ducas, in the event
he was unable to obtain financing. Appellants’ Brief at 20. They contend that
the purpose of paragraph 2.5 was to provide for repayment by Carroll to Ducas
over a period of time, and that PDC would secure the repayment with a
mortgage. Id. at 22 (citing N.T. Trial, 4/17/19, at 36) (referencing Attorney
Pascale’s testimony regarding the terms of paragraph 2.5). They further
allege that the repayment terms of paragraph 2.5 include the reimbursement
of deposit monies. Id. at 24-25 (citing N.T. Trial, 4/17/19, at 79) (noting
Ducas’ testimony that the Third Stock Sale Agreement between Ducas and
Carroll would carry forward $336,000 in deposits previously paid by Ducas).
See also id. at 26 (citing Plaintiffs’ Exhibit 29) (indicating an additional
deposit made by Ducas on October 1, 2004, in the amount of $107,000).
We observe, however, that in support of their claim, Appellants merely
point to contradictory and self-serving testimony. They fail to include any
legal analysis and are essentially asking this Court to re-weigh the evidence
and substitute our judgment for that of the fact-finder, which we cannot and
will not do. See Commonwealth v. Rodriguez, 141 A.3d 523, 525 (Pa.
Super. 2016). Thus, to the extent Appellants contest the trial court’s finding
that paragraph 2.5 of the Third Stock Sale Agreement did not provide for the
reimbursement of Ducas’ deposit monies, we deem this issue waived. See
Pa.R.A.P. 2119(b).
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Nevertheless, even if Appellants’ claim was not waived, we would
conclude that this issue lacks merit. As the trial court so aptly opined:
[W]e find that the claimed deposit money damages, amounting to
… $404,180.00[], are not recoverable in this action. According to
Thompson v. Peck, [181 A. 597 (Pa. 1936),] only a person
against whom a cause of action exists can be liable or sued
therefor. [Id. at 598.] The attempted transactions resulting in
[Appellants’] alleged damages occurred during the years 2003-
2005, and are based on three agreements, two of which were
solely executed between … Ducas and … Carroll, a non-party.
[Appellants] have presented no credible evidence that the deposit
monies from these two agreements were utilized by or on behalf
of [PDC], nor have they presented credible evidence that [PDC]
was a party to these transactions, that … Carroll and [PDC] acted
in concert as one and the same entity, thus breaching the
corporate veil,[11] nor that [PDC] assumed any liabilities or
obligations to pay money damages on Carroll’s behalf. In fact,
[Appellants’] sole possible argument to claim the deposit fund is
through the interpretation of the contractual language presented
in the Third Stock Sale [Agreement].
When a contractual interpretation arises from a disputed term
among the parties, the court may interpret such language as a
matter of law. Pops PCE TT, LP v. R&R Restaurant Group,
LLC., … 208 A.3d 79 ([Pa. Super.] 2019). The primary goal of
contractual interpretation is to effectuate the intent of the parties.
Driscoll v. Arena, … 213 A.3d 253, 259 ([Pa. Super.] 2019)
(citing N.E.A. Cross, Inc. Nat’l Fuel Gas Supply Corp., … 600
A.2d 228, 229 ([Pa. Super.] 1991), appeal denied, … 608 A.2d 31(Pa. 1992)[)]. However, where contractual language is “[c]lear
and unequivocal, its meaning must be determined by its contents
alone.” Id. According to Shepard v. Temple Univ., [948 A.2d
852 (Pa. Super. 2008),] “[a] contract contains an ambiguity if it
is reasonably susceptible of different constructions and capable of
being understood in more than one sense.” [Id. at 857] (citing
Murphy v. Duquesne University, … 777 A.2d 418, 429-30 [(Pa.
2001))]. Looking at the contractual language in the Third Stock
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11 “[A] corporation shall be regarded as an independent entity even if its stock
is owned entirely by one person.” Lumax Industries, Inc. v. Aultman, 669
A.2d 893, 895 (Pa. 1995).
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Sale [Agreement], we find the parties’ intent is unambiguous[;]
thus[,] we effectuate the parties’ intent by reading the contract in
its clear and plain language.
The Third Stock Sale [Agreement] attempted a global agreement
between … Carroll, Brendon … (sellers), and Ducas (buyer), with
[PDC] included in merely a limited capacity…. [See Plaintiffs’
Exhibit 5.] Looking at the plain language of the contract, we find
that the [Third Stock Sale Agreement], upon [Ducas’] default,
requires [PDC] to execute a promissory note in the sum of …
$1,536[,000], as well as pay out “unreimbursed amounts
expended by [the] purchaser for the development of Pinecrest”
not to exceed … $191,093.63[]. [Id. at 2 ¶2.5 (unnecessary
capitalization omitted).] However, the plain language of the
contract does not incorporate into that sum deposit monies paid
by Ducas to Carroll. Rather, the parties only discuss
reimbursement for expenditures related to the development of the
Pinecrest subdivision and hotel site. In fact, the Third Stock Sale
[Agreement] explicitly states, contrary to [Appellants’] argument,
that the deposit monies shall be retained by Carroll: “In the event
the Sovereign secondary closing does not occur on or before
November 30, 2004 … [the] seller shall retain … all other
consideration previously paid or pledged to the seller by the
purchaser….” Id. [(brackets and unnecessary capitalization
omitted; emphasis added by the trial court)].
We find that [Appellants] are not entitled to recover the deposit
money damages claimed in the amount of … $404,180.00[].
[Appellants] have presented no credible evidence to show that
[PDC] ever assumed any of … Carroll’s alleged debts, and … Carroll
is not a party to this lawsuit. Furthermore, the one contract
presented to this [c]ourt, in which … Carroll and … Ducas and
[PDC] are all parties, explicitly excludes the Ducas deposits from
other possible reimbursements to Ducas made by [PDC].
Therefore, for reasons of lack [of] due process to … Carroll, we
cannot and will not determine whether he is entitled to the Ducas
deposits. However, we do find that for the reasons detailed above,
the claimed money damages related to the deposits between
Ducas and Carroll may not be recovered by [Appellants] through
breach of contract….
TCO I at 7-10. We would deem the trial court’s findings to be well-supported
by the record, and we would discern no error of law.
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Next, Appellants claim the trial court erred in finding that PDC’s failure
to reimburse Ducas for monies that he paid “on behalf of [PDC] for expenses
related to its operations and the development of its subdivision and hotel[,]”
did not constitute a breach of the Third Stock Sale Agreement. Appellants’
Brief at 28. They contend that such expenditures were clearly intended as a
loan to be repaid under the terms of the Third Stock Sale Agreement, and that
paragraph 2.5 specifically provided for such repayment. Id. at 29-30. In
support of their argument, Appellants rely on a series of checks, which they
allege establish that Ducas made payments totaling $197,138.63, for the
development of the Pinecrest subdivision and hotel site, and that he “loaned”
PDC $214,256.00, to pay its operating expenses. Id. See also Plaintiffs’
Exhibits 9-22, 30-35. Appellants claims are wholly without merit.
Additionally, Appellants argue that the trial court’s decision is based on
the erroneous finding that Ducas assumed control of PDC for a period of time
without authorization to do so. Appellants’ Brief at 30. To the contrary, they
contend that Ducas was authorized to act on behalf of PDC with regard to the
development of the Pinecrest subdivision and hotel site; however, their
argument is merely supported by contradictory, self-serving testimony. See
id. at 30-31 (citing N.T. Trial 4/17/19, at 27, 70-71 (referencing Attorney
Pascale’s and Ducas’ testimony that Ducas was the sole shareholder and
president of PDC for several months, beginning on February 13, 2004)). Thus,
to the extent Appellants claim the trial court erred in finding Ducas was not
authorized to enter agreements on behalf of PDC, we deem this issue to be
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waived. See Rodriguez, 141 A.3d at 525 (recognizing that we cannot and
will not re-weigh the evidence and substitute our judgment for that of the
fact-finder).
The trial court provided the following detailed explanation of its findings
in favor of PDC regarding Appellants’ claim for reimbursement of operational
expenditures and monies purportedly loaned to PDC in furtherance of its
development:
We now turn to [Appellants’] second claim for money damages in
the amount of … $411,394.63[], which … Ducas claims he loaned
to [PDC]. Although … Ducas alleges the payments he made to
[PDC] were merely a loan, [Appellants] have presented no
credible evidence to substantiate that claim though [sic] the
presentation of loan documents, terms of interest, notes, checks
indicating a loan, etc. Nevertheless, [Appellants] argue that
according to contractual language in the Third Stock Sale
[Agreement], read in concert with the Termination of Final Sale,
… Ducas is entitled to be reimbursed for any monies expended and
unreimbursed in the development of the Pinecrest subdivision and
hotel. For the following reasons, we disagree.
It has been recognized that a breach of contract is a non-
performance of any contractual duty of immediate performance or
the violation of an obligation, engagement[,] or duty. See
Johnson v. Fenestra, Inc., 305 F.2d 179 (3[d] Cir. 1962). In
this matter[, Appellants] allege [PDC] breached the Third Stock
Sale [Agreement] and Termination of Final Sale, by failing to
reimburse … Ducas for loans made in furtherance of the
development of [the] Pinecrest subdivision and hotel. To sustain
such an allegation, [Appellants] are required to prove the four
elements for breach of contract: (1) the existence of a contract
between [the p]laintiff and [the d]efendant, (2) the essential
terms of the contract, (3) the breach of a duty imposed by the
contract, and (4) the damages resulting from the breach.
Mancini v. Morrow, … 458 A.2d 580 ([Pa. Super.] 1983).
Additionally, although a civil action for money lent can be brought,
it is [the p]laintiff’s burden to prove by a preponderance of the
evidence that a loan was made and not repaid. Lee v. Potter, …
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251 A.2d 697 ([Pa. Super.] 1969). We find [Appellants] failed to
meet their burden that the payments made by … Ducas were
intended as a loan to be repaid under the terms of the contracts.
First[,] we … acknowledge that the Third Stock Sale [Agreement]
states, that upon default, [PDC] would pay Ducas “unreimbursed
amounts expended by [him] for development of [the] Pinecrest
subdivision and hotel site[,] not to exceed $191,093.63 ([‘]Ducas
Incremental Payoff[’]).” … As we previously addressed…, we find
that the language of this provision of the Third Stock Sale
[Agreement] is clear and unambiguous…. Therefore, we use the
plain language of the contract to effectuate the intent of the
parties.
We note that according to a plain reading of the … clause [cited]
above, … Ducas is entitled to less than half of the damages he is
seeking. Following this agreement, [Appellants] have presented
no credible evidence that Ducas would ever be entitled to more
than … $191,093.63[]. For that reason, we find [Appellants’]
possible damages are capped at that contractually[-]stated
amount.
However, even assuming the cap on damages, we find
[Appellants] are not entitled to the money they seek, as the
investments … Ducas undertook fell outside the scope of the
“development of Pinecrest subdivision and hotel site”
as required under the contract. First…, in paragraph 2.5 of the
Third Stock Sale [Agreement], … the parties imagined Ducas
would be reimbursed for money related to [the] Pinecrest
subdivision and hotel site development[. T]hey made no mention
of operating expenses. Furthermore, [Appellants] have provided
this court with no credible evidence showing that the money Ducas
allegedly paid to Pinecrest Lake Community was ever used to
benefit [PDC]. For these reasons, the damages claimed by Ducas
involving alleged operational cost damages cannot be considered
by this court from a breach of contract … standpoint.
Second, [PDC] has produced credible evidence that the remaining
damages sought by [Appellants] involving payments by Ducas
were made without corporate authority and for his own benefit,
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outside of the contract.[12] As such[,] the payments were not
made for the “development of [the] Pinecrest subdivision and
hotel site,” but rather for Ducas’ own purpose. We find that given
the lack of evidence that Ducas ever initiated a loan with [PDC],
and evidence revealing his personal gain from investing in the
unauthorized corporate transactions involving Hawthorn Suites
Golf Resort and Westminster, [Appellees] are not entitled to
recover the money Ducas expended through the means of breach
of contract….
As indicated above, although Ducas was at the time a certified
public accountant and knowledgeable in business affairs, he failed
to produce any evidence of a loan agreement, interest or
repayment terms, or even notations on his checks to substantiate
his claim. Once again, we reiterate that it is the plaintiff’s burden
to prove by a preponderance of the evidence that a loan was made
and not repaid. Lee…, … 251 A.2d [at] 697…. In this case, the
vast majority of the checks were issued by Ducas[,] during the
time in which he was attempting to purchase the controlling stock
in Pinecrest. We find this evidence compelling[] and revealing of
Ducas’ intent to invest in his business, so as to profit from the
benefits of the franchise he set up with Hawthorn Suites Gold
Resort and [the] sales agreement he executed with Westminster,
not intended as a loan to be repaid. In fact, the issue of a loan
was not brought up until Ducas realized he would be unable to
purchase the controlling share in Pinecrest he desired. Although
[Appellants] attempt to use the contractual language from the
Third Stock Sale [Agreement] and the Termination of Final
[Agreement] to indicate the acknowledgment of a loan, we are not
convinced.
Furthermore, the unauthorized nature of the transactions that …
Ducas undertook when he was acting as [PDC’s] president,
although he did not possess the corporate authority to do so,
coupled with contractual evidence that Ducas was pursuing such
risk personally, reveals to this court that expenses related to the
franchise agreement with Hawthorn Suites Golf Resort and
Westminster fell outside the parties’ reimbursement clause in the
Third Stock Sale [Agreement]. According to the April 30, 2004[]
____________________________________________
12 On cross-examination, Ducas admitted that he intended to use the
agreement of sale between PDC and Westminster as part of the collateral for
his Sovereign loan, which he needed in order to close on his deal with Carroll
for the purchase of the PDC stock. N.T. Trial, 4/17/19, at 101-02.
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extension of the Second Stock Sale [Agreement] between Ducas
and Carroll, Ducas agreed to pay all franchise application fees and
all other fees associated with the hotel. In furtherance of that
agreement, when Ducas did begin [the] application with Hawthorn
Suites Golf Resort, he [named] his sister, not [PDC,] as the
franchise owner. We find such evidence reveals that the
investment Ducas expended into the Hawthorn Suites Golf Resort
was that of a personal nature, and fell outside the subsequently
written Third Stock Sale [Agreement] reimbursement clause. For
these reasons, [Appellants] are not entitled to reimbursement for
money expended toward the acquisition of a franchise with
Hawthorn Suites Golf Resort.
Similarly, Ducas engaged in an unauthorized sale agreement with
Westminster for personal benefit. According to Ducas’ testimony,
under the agreement, he was responsible to pay for engineering
fees to obtain the approvals necessary to create and finalize the
lots in Pinecrest that were to be conveyed. We find that this was
not a loan, but [an] investment expenditure to move forward with
his anticipation of acquiring [PDC’s] stock and financially
benefitting from the sale to Westminster.
TCO I at 10-14 (unnecessary capitalization and citation to record omitted).
We deem the trial court’s findings to be supported by the record, and we
discern no error of law.
In addition to Appellants’ reliance on the Third Stock Sale Agreement,
they also claim the trial court erred in finding PDC was not obligated by the
Termination of Final Agreement to repay any monies to Ducas. They attack
the trial court’s conclusion, as a matter of law, that the Termination of Final
Agreement was not a valid, enforceable agreement. Appellants’ Brief at 26.
Specifically, Appellants argue that the trial court erred in characterizing the
provision in paragraph 4 regarding repaying Ducas as a mere “agreement to
agree.” Id. We remain unconvinced that the trial court’s decision should be
overturned.
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The court concisely explained its reasoning for finding that Appellants’
claims are not separately recoverable through the clause at issue in the
Termination of Final Agreement:
[Appellants] are unable to sustain their burden of proving the
existence of an enforceable contractual clause in the Termination
of Final Agreement, where [the] parties never reached a meeting
of the minds. In order to succeed in a breach of contract action,
[Appellants] must first prove by a preponderance of the evidence
the existence of the contract that [PDC] allegedly breached. See
Mancini … 458 A.2d at 580…. To form a contract, “there must be
a ‘meeting of the minds,’ whereby both parties mutually assent to
the same things, as evidenced by an offer and its acceptance.”
Mountain Properties, Inc. v. Tyler Hill Realty Corp., … 767
A.2d 1096, 1101 ([Pa. Super.] 2001) (citing Schreiber v. Olan
Mills, … 627 A.2d 806, 808 ([Pa. Super.] 1993)). The parties in
this case executed the Termination of Final Agreement on March
31, 2008, which stated in part that “this Termination shall not
relieve Buyer’s obligation to repay Michael J. Ducas any monies
owed.” However, at the time of execution, … Carroll, corporate
officer on behalf of [PDC], and Ducas amended the language to
include that the amount owed was “to be determined.” Both
initialed the handwritten change, signifying acceptance. No
agreement was ever reached as to what monetary obligation, if
any, was owed to … Ducas.
While we recognize it may at first appear that the parties formed
a contract—there is evidence the parties negotiated the clause at
issue, came to an agreement, and accepted that agreement by
initialing the handwritten change of terms—the clause upon which
[Appellants] rely in the Termination of Final Agreement is
ultimately nothing more than an agreement to agree. “An
agreement to agree is incapable of enforcement….” Highland
Sewer & Water Auth. v. Forest Hills Mun. Auth., 797 A.2d
385, 390 (Pa. C[mwlth]. 2002) (quoting Onyx Oils & Resins,
Inc. v. Moss, … 80 A.2d 815, 816 ([Pa.] 1951)). Under such
circumstances, it is not for the court to imply contractual terms.
See Highland Sewer & Water Auth., 797 A.2d at 390 (citing
Upsal Street Realty Co. v. Rubin, … 192 A. 481 ([Pa.] 1937)[)].
We find that because the parties in the instant case refrained from
providing essential contractual terms, and instead merely
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indicated a desire to determine possible monies owed in the
future, the clause at issue is unenforceable.
TCO II at 12-13. We discern no abuse of discretion or error of law.
Moreover, we note that Appellants blatantly misconstrue the court’s
holding. The trial court did not deem the entire Termination of Final
Agreement to be unenforceable but, rather, it held that “the clause upon which
[Appellants] rely in the Termination of Final Agreement is … nothing more than
an agreement to agree.” TCO II at 13 (emphasis added). Generally,
[a]n agreement is an enforceable contract wherein the parties
intended to conclude a binding agreement and the essential terms
of that agreement are certain enough to provide the basis for
providing an appropriate remedy. If the essential terms of the
agreement are so uncertain that there is no basis for determining
whether the agreement has been kept or broken, there is not an
enforceable contract.
Linnet v. Hitchcock, 471 A.2d 537, 540 (Pa. Super. 1984) (citations
omitted). See also Restatement (Second) of Contracts § 33, comments a, b.
Here, the Termination of Final Sale Agreement was entered between
Appellants and PDC for the purpose of terminating the Final Agreement
regarding PDC’s purchase of Appellants’ Golf Course. Paragraph 4 simply
provides that the termination shall not relieve PDC of its obligation to
reimburse Ducas for any monies it owes him, and the handwritten notation
indicates that the parties agreed the amount owed is “to be determined.” The
relevant clause lacks, however, the essential terms of a contract by which this
Court could determine whether a breach of that contract has occurred. See
Linnet, 471 A.2d at 540. There is no specification as to what type of
payments are to be included in the calculation of the amount owed, the time
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frame during which any such reimbursement shall be made, or the manner in
which the monies are to be repaid. We agree with the trial court that the
clause at issue is nothing more than an agreement to determine possible
monies owed to Ducas in the future. Accordingly, we uphold the trial court’s
decision that Appellants’ claims for reimbursement for monies expended by
Ducas are not recoverable via a claim of breach of the Termination of Final
Agreement.
Finally, Appellants argue that the trial court erred in finding that they
failed to establish unjust enrichment. They specifically attack the court’s
conclusion that monies paid by Ducas were made without corporate authority.
Appellants’ Brief at 18, 33. They counter that Ducas was, in fact, authorized
to act on PDC’s behalf, relying solely on the testimony of Ducas and Attorney
Pascale. Id. at 35. Additionally, Appellants attack the trial court’s
determination that the monies expended by Ducas were for his own benefit.
They claim that a benefit was clearly conferred upon PDC by virtue of the
monies expended on its behalf for operating expenses and the development
of its property, and that if Ducas had not expended monies to maintain PDC’s
operations when it did not have sufficient cash flow, PDC would have had to
cease operations. Id. at 18-19. In support of their argument, Appellants
merely point to Ducas’ testimony and copies of checks, which they contend
represent payments made to PDC solely for its benefit—not for Ducas’ benefit.
Id. at 35. They conclude that the trial court “totally ignored the overwhelming
evidence presented at trial[,]” in reaching its decision, and that it would be
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inequitable for PDC to retain these benefits without repaying Ducas. Id. at
18-19, 36.
We observe that Appellants include little legal analysis in support of their
claims. Instead, they primarily endeavor to dispute the trial court’s findings
of fact, pointing to contradictory and self-serving testimony. See id. at 33-
36. Again, Appellants fail to appreciate that this Court cannot re-weigh
evidence and substitute its judgment for that of the fact-finder. See Gamesa
Energy USA, 181 A.3d at 1192. See also Gutteridge v. J3 Energy Group,
Inc., 165 A.3d 908, 914 (Pa. Super. 2017) (stating that this Court will respect
a trial court’s findings with regard to the credibility and weight of the evidence
“unless the appellant can show that the court’s determination was manifestly
erroneous, arbitrary and capricious[,] or flagrantly contrary to the evidence”)
(quoting J.J. DeLuca Co. v. Toll Naval Associates, 56 A.3d 402, 410 (Pa.
Super. 2012)). “The test is not whether this Court would have reached the
same result on the evidence presented[] but[,] rather, after due consideration
of the evidence the trial court found credible, whether the trial court could
have reasonably reached its conclusion.” Gutteridge, 165 A.3d at 916. We
deem the trial court’s finding in favor of PDC regarding Appellants’ unjust
enrichment claim to be clearly supported by the evidence that the trial court
found credible.13
____________________________________________
13The trial court expressly found Ducas’ testimony lacked all credibility. See
TCO II at 9.
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The trial court opined:
Throughout the instant action, [Appellants] have misunderstood
the unjust enrichment doctrine and, as such, have improperly
presented back-door attempts at claims rooted in breach of
contract. Unjust enrichment is reserved as an equitable doctrine,
not designed as a substitute for a failed tort claim.1 To that end,
all money damages that are subject to the parties’ Third Stock
Sale Agreement are not recoverable under the theory of unjust
enrichment, including any reimbursements found to be covered
by the Ducas [Incremental] Payoff (unreimbursed amounts
expended for the development of [the] Pinecrest subdivision and
hotel site, not to exceed … $191,093.63[]).
1 See Sevast v. Kakouras, …. 915 A.2d 1147, 1153 n.7
([Pa.] 2007) (“An action based on unjust enrichment is
action which sounds in quasi-contract or contract implied in
law.”); see also Stoeckinger v. Presidential Fin. Corp.
of Delaware Valley, 948 A.2d 828, 833 (Pa. Super. 2008)
(“A quasi-contract imposes duty, not as a result of any
agreement, whether express or implied, but in spite of the
absence of an agreement, when one party receives unjust
enrichment at the expense of another[.]”).
Given the allegations presented to this court, the only two
seemingly viable unjust enrichment claims available to
[Appellants] are recovery for [PDC’s] operational expenses
allegedly paid by [Ducas] to third party, Pinecrest Lake
Companies, and the alleged loan Ducas provided directly to [PDC]
or to contractors working toward [PDC’s] alleged benefit, not
otherwise covered by the terms of the Third Stock Sale
Agreement[,] as there was inadequate evidence presented to
show that the monies provided were expended for the
development of [the] Pinecrest subdivision and hotel site.
[Appellants] bear the burden of proving by a preponderance of the
evidence each element of their unjust enrichment claim,
including: (1) benefits were conferred on one party by another;
(2) such benefits were appreciated by the recipient; and (3)
benefits were accepted and retained under such circumstances
that it would be inequitable for the recipient to do so without
payment of their value. Discover Bank v. Stucka, … 33 A.3d 82[Pa. Super.] 2011). [Appellants] have failed their burden as to
both possible claims for distinctly different reasons. Regarding
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[Appellants’] first claim, they argue that operational monies
expended on behalf of [PDC] were funneled through a separate
and distinct company, Pinecrest Lake Companies. However, they
have presented no credible evidence to demonstrate that any of
the monies given in the form of checks payable to Pinecrest Lake
Companies were ever conferred upon [PDC], either directly or
indirectly. Regarding [Appellants’] second claim, we found in our
prior opinion any monies expended by [Appellants] were the result
of an investment intended for the personal benefit of … Ducas.
While [PDC] may have been a passive third[-]party beneficiary, it
was not inequitable or unjust for [PDC] to retain such benefits
without payment of their value. Therefore, and for the following
reasons[,] we find [Appellants] are not entitled to recover under
the theory of unjust enrichment.
Concerning [Appellants’] claim to alleged operational expenses,
[their] sole evidence that the checks paid to Pinecrest Lake
Companies conferred any benefit to [PDC] rests in the testimony
of … Ducas. “In a non[-]jury trial, the trial court is the finder of
fact and the sole judge of credibility.” Costa v. City of
Allentown, 153 A.3d 1159, 1168 (Pa. C[mwlth]. 2017) (citing In
re Funds in the Possession of Conemaugh Twp.
Supervisors, … 753 A.2d 788, 790 ([Pa.] 2000)). The trial court
is free to reject even uncontradicted testimony, should they find
it is lacking credibility. Id. (citing D’Emilio v. Bd. of
Supervisors, Twp. of Bensalem, … 628 A.2d 1230, 1233 ([Pa.
Cmwlth.] 1993)). As indicated in our December 30, 2019 opinion,
we find the testimony of … Ducas lacks all credibility. As such,
[Appellants] presented no credible evidence supporting a link
between Pinecrest Lake Companies and [PDC], indicating that
they were operating as one in the same entity. Likewise,
[Appellants] presented no credible evidence that any money
received by Pinecrest Lake Companies was ever used to benefit
[PDC].
As such, [Appellants] have failed their burden to establish by a
preponderance of the evidence the first element necessary for
their unjust enrichment claim. Therefore, we find, based on the
credibility of the testimony and evidence presented before us that
… [Appellants] cannot recover the alleged money damages for the
checks paid to Pinecrest Lake Companies amounting to …
$151,070.00[].
Next[,] we examine [Appellants’] second possible unjust
enrichment claim, recovery for damages amounting to …
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$260,324.63[]—the difference between the second lump sum
damages from [Appellants’] complaint [($411,394.63)] and the
aggregate total paid to Pinecrest Lake Companies
[($151,070.00)]. For the reasons articulated in our December 30,
2019 opinion, we find that the monies expended by [Appellants]
through checks payable to [PDC] or to contractors for the alleged
benefit of [PDC], do not fall under the terms of the Third Stock
[Sale] Agreement, as they fall outside the scope of monies
expended for the “development of Pinecrest subdivision and hotel
site.”[14] Similarly, as we found in our previous opinion and
explain in more detail in our breach of contract analysis…, such
expenditures by [Appellants] are not covered under the parties’
Termination [of Final] Agreement. Accordingly, it is appropriate
for [Appellants] to attempt recovery through an unjust enrichment
action. However, for the reasons below, [Appellants] are unable
to meet their burden.
Given the testimony and evidence of the checks presented to this
court, we find that [Appellants] conferred a benefit on [PDC].
However, the primary question surrounding a claim for unjust
enrichment remains. “[T]he most significant element of the
doctrine is whether the enrichment of the defendant is unjust. The
doctrine does not apply simply because the defendant may have
been benefited as a result of the actions of the plaintiff.” Braun
v. Wal-Mart Stores, Inc., … 24 A.3d 875, 896 ([Pa. Super.]
2011), aff’d … 106 A.3d 656 ([Pa.] 2014) (quoting Styer v. Hugo,
… 619 A.2d 347, 350 ([Pa. Super.] 1993)[(emphasis in original)]).
“Whether the doctrine applies depends on the unique factual
circumstances of each case….” Discover Bank, 33 A.3d … at 88
(quoting Stoeckinger, 948 A.2d … at 833). Looking at the factual
circumstances surrounding this matter, … Ducas’ actions were
self-serving, unauthorized transactions amounting to a failed
investment. As such, we do not find that the enrichment of [PDC]
was unjust.
The facts of the instant matter are unique[] and require an
assessment of the totality of the circumstances…. Ducas was in
____________________________________________
14See TCO I at 13-14 (noting that the unauthorized nature of the transactions
Ducas undertook while acting as president of PDC, without authority to do so,
coupled with contractual evidence that Ducas was pursuing such risk
personally, reveals to the court that the expenses related to the franchise
agreement with Hawthorn Suites Golf Resort and Westminster fell outside the
parties’ reimbursement clause in the Third Stock Sale Agreement).
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the process of attempting a series of private stock sales with
[PDC’s] primary shareholder, … Carroll, to purchase the
controlling shares of [PDC]. While the sale was still pending, …
Carroll, president of [PDC], went to jail and Ducas assumed
control of [PDC] without any authorization. As an unauthorized
corporate officer, Ducas proceeded to make unauthorized
expenditures using his personal funds to benefit his own
investment interest[s] in [PDC]. To that end, Ducas engaged in
activities, such as expending money developing [PDC’s] land into
an appropriate site for a franchise opportunity with Hawthorn
Suites Gold Resort. He then proceeded to list his sister as owner
of the franchise, instead of [PDC]. Under such circumstances, it
is clear to this court that although [PDC] may have received some
ancillary benefit from [Appellants’] actions, the retention of such
benefit without compensation to [Appellants] is not unjust.
[Appellants] have failed their burden to establish by a
preponderance of the evidence the third and final element
necessary for their unjust enrichment claim. Therefore, we find
based on the credibility of the testimony and evidence presented
before us in this action, [Appellants] cannot recover the alleged
money damages amounting to … $260,324.63[].
TCO II at 6-11 (unnecessary capitalization and citations to record omitted).
After careful review, we discern no abuse of discretion or error of law.
Accordingly, we affirm the judgment entered on June 12, 2020, in favor
of PDC and against Appellants.
Judgment affirmed.
Judge Strassburger did not participate in the consideration or decision
of this case.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 5/6/21
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