Kouzoupis Jewelry v. Zikos, G. ( 2017 )

J. A10005/17
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
KOUZOUPIS JEWELRY, SA, : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellant :
:
v. :
:
GEORGE ZIKOS AND ZIKOS JEWELERS, :
INC., :
:
Appellees : No. 2456 EDA 2016
Appeal from the Judgment Entered August 3, 2016
In the Court of Common Pleas of Bucks County
Civil Division at No.: 2011-00122
BEFORE: DUBOW, J., SOLANO, J., and FORD ELLIOTT, P.J.E.
MEMORANDUM BY DUBOW, J.: FILED JUNE 08, 2017
Appellant, Kouzoupis Jewelry, SA, appeals from the August 3, 2016
Judgment entered in the Bucks County Court of Common Pleas after a bench
trial. We affirm.
The relevant facts, as gleaned from the certified record and the trial
court’s Pa.R.A.P. 1925(a) Opinion, are as follows. From 1992 until 2008,
Appellee George Zikos (“Mr. Zikos”) owned and operated a retail jewelry
store in Mykonos, Greece.1 Mr. Zikos purchased jewelry from several
vendors in Greece, including Appellant beginning in 1992.2 Over the years,
1
At the time of trial, Mr. Zikos resided in New Hope, Pennsylvania. Mr.
Zikos owned and operated Zikos Jewelers, Inc., as a Pennsylvania
Corporation with a principal place of business in New Hope, Pennsylvania.
J. A10005/17
Appellant’s salesman would bring jewelry to a Zikos shop, and Mr. Zikos
would pick out items to purchase and sell in his store. After delivery of the
jewelry, Appellant would send an invoice addressed to Mr. Zikos personally,
and Mr. Zikos would provide postdated checks to pay the cost of the jewelry.
Mr. Zikos allegedly provided several personal checks in exchange for the
jewelry, but the bank dishonored some of the checks due to insufficient
funds.
On January 5, 2011, Appellant filed a Complaint in the Bucks County
Court of Common Pleas alleging nonpayment of checks and fraud across 27
different transactions with Appellees Mr. Zikos and Zikos Jewelers, Inc.,
between 2003 and 2008. Appellant sought €91,000 from Appellees for
failing to pay for various items of delivered jewelry and to cover the
dishonored checks allegedly given as payment for the jewelry.
Following a bench trial on January 12, 2016, the trial court concluded
that Appellant lacked standing because Efrosini Kouzoupi, Appellant’s Vice
President, was the recipient and holder of the checks and had never
assigned them to Appellant. Each of the dishonored checks was made
payable to Efrosini Kouzoupi personally, rather than Appellant. Each of the
2
Kouzoupis Jewelry, SA, is a Greek company with offices in Athens, Greece.
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dishonored checks was from Mr. Zikos’s personal account to Efrosini
Kouzoupi. As a result, the trial court entered a verdict in favor of Appellees.3
Appellant filed a Post-Trial Motion on February 16, 2016. On August 3,
2016, the trial court entered Judgment by Praecipe.4
On August 4, 2016, Appellant filed a timely Notice of Appeal. Both
Appellant and the trial court complied with Pa.R.A.P. 1925.
Appellant presents the following issue for our review:
Whether the [t]rial [c]ourt committed reversible error in finding
that the [A]ppellant did not have the standing necessary to sue
the [A]ppellee on the payment promises represented by the ten
(10) dishonored checks in the possession of the [A]ppellant’s
vice-president in consideration for the jewelry it had sold to the
[A]ppellee on credit?
Appellant’s Brief at 2.
We review an order following a bench trial with the following principles
in mind:
3
After Appellant rested, the trial court granted Appellee Zikos Jewelers’
demurrer to the evidence since Appellant’s evidence showed that (1) Mr.
Zikos personally signed and issued all of the dishonored checks in his own
name rather than Zikos Jewelers, and (2) each of Appellant’s invoices
indicated Mr. Zikos personally as the customer rather than Zikos Jewelers.
The trial court entered a verdict in favor of Zikos Jewelers. N.T. Trial,
1/12/16, at 69, 77-78.
4
The trial court stated that it never received Appellant’s Post-Trial Motion,
although it acknowledges the docket indicates its filing on February 16,
2016. As a result, the trial court never ruled upon Appellant’s Post-Trial
Motion within 120 days and Appellant thereafter sought entry of Judgment
upon Praecipe pursuant to Pa.R.C.P. No. 227.4(1)(b) in order to appeal the
Judgment.
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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 law. The findings of the
trial judge in a non-jury case must be given the same weight
and effect on appeal as the verdict of a jury, and the findings will
not be disturbed on appeal unless predicated upon errors of law
or unsupported by competent evidence in the record.
Furthermore, our standard of review demands that we consider
the evidence in a light most favorable to the verdict winner.
Levitt v. Patrick, 976 A.2d 581, 588-89 (Pa. Super. 2009) (citation and
quotation omitted).
“[A]ll actions shall be prosecuted by and in the name of the real party
in interest…[.]” Pa.R.C.P. No. 2022. “To possess standing to litigate an
action, a party must demonstrate a substantial interest in the subject matter
of the litigation, and that interest must be direct and immediate as opposed
to being a remote consequence.” Pennsylvania School Boards Ass’n,
Inc. v. Zogby, 802 A.2d 6, 15 (Pa. Cmwlth. 1999). See also Pa.R.C.P. No.
1028(a)(5).
A check is a negotiable instrument. 13 Pa.C.S. § 3104(f). The holder
of a negotiable instrument is “the person in possession of a negotiable
instrument that is payable either to the bearer or to an identified person that
is the person in possession[.]” 13 Pa.C.S. § 1201(b)(21)(i). A negotiable
instrument “is transferred when it is delivered by a person other than its
issuer for the purpose of giving to the person receiving delivery the right to
enforce the instrument.” 13 Pa.C.S. § 3203(a).
The trial court addressed Appellant’s standing as follows:
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Here, Ms. Efrosini Kouzoupi[], a person not a party to the suit, is
the holder of the checks in dispute. Ms. Kouzoupi[] not only had
physical possession of the checks, but the checks were also
made out directly to her. [Appellant] is not the payee on any of
the checks involved in this case. While checks are negotiable
instruments and are therefore able to be assigned to someone
other than the holder, the checks here were not transferred by
Ms. Kouzoupi[], as she did not deliver them or otherwise assign
them to [Appellant] for the purpose of giving the company the
right to enforce the checks.
Therefore, Ms. Efrosini Kouzoupi[], not [Appellant], is the holder
of the checks in issue because the checks were never actually
assigned to the company, even if the proceeds of them [were]
intended to be at some point. In fact[,] Ms. Kouzoupi[] testified
that she attempted to deposit the checks into her personal
account but they bounced or were not honored. At trial, Ms.
Kouzoupi[] testified that her practice was to deposit checks
received from jewelry purchasers into her personal account,
which is what she attempted to do in this case. Her testimony
made it clear that while she may have intended to give
[Appellant] the proceeds she realized from the checks had they
cleared, they never cleared and she never had any proceeds to
give to [Appellant] and she never gave the checks to
[Appellant]. Therefore, [Appellant] does not have a substantial,
direct, or immediate interest in the subject matter of the
litigation. Because of that, Ms. Kouzoupi[] is the only person
who is empowered [to] resolve the dispute about the checks.
Trial Court Opinion, dated 10/18/16, at 4 (citation omitted).
We agree with the trial court’s analysis. Each check Mr. Zikos issued
was made payable to Efrosini Kouzoupi personally. Mr. Zikos issued no
checks made payable directly to Appellant. Ms. Kouzoupi, Appellant’s Vice
President, personally held all of the dishonored checks in question when she
testified at trial by video. Appellant presented no evidence showing that Ms.
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Kouzoupi had assigned or transferred the checks to Appellant. 5 As a result,
Efrosini Kouzoupi was the “real party in interest” and Appellant lacked
standing in this matter.
The trial court’s findings are supported by competent evidence and we
discern no error in the trial court’s application of law. We affirm on the basis
of the trial court’s October 18, 2016 Opinion.
The parties are instructed to attach a copy of the trial court’s October
18, 2016 Opinion to all future filings.
Judgment affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 6/8/2017
5
Efrosini Kouzoupi testified that, pursuant to standard business practices in
Greece, such deals were executed personally by the company’s
representatives and that she would eventually transfer the money to
Appellant from her personal account. N.T. Trial, 1/12/16, at 30-31.
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IN THE COURT OF COMMON PLEAS OF BUCKS COUNTY, PENNSYLVANIA
CIVIL DIVISION
KOUZOUPISJEWELRY, SA No. 2011-00122
vs.
GEORGE ZIKOS and
ZIKOS JEWELERS, INC.
OPINION
This is an appeal by Plaintiff, Kouzoupis Jewelry, SA (hereafter, "Plaintiff')
of a verdict entered in favor of Defendants, George Zikos and Zikos Jewelers
(hereafter, "Defendant"), dated February 4, 2016.
BACKGROUND
On January 5, 2011, Kouzoupis Jewelry, SA filed a complaint against
George Zikos and Zikos Jewelers, Inc. seeking recovery for Defendant's alleged
failure to pay for jewelry and honor checks given in payment for the jewelry, as
well as alleging fraud in the purchasing of the jewelry and delivery of the checks.
After a series of pleadings and other pre-trial proceedings that are not
relevant to this appeal a non-jury trial was held on January 12, 2016. At that
time the parties agreed that the court would be applying Pennsylvania law to the
case as opposed to Greek law. N.T. 01/ 12/ 16, p. 4. The parties also agreed that
the Plaintiffs case would proceed based solely on the issue of the checks. N.T.
01/ 12/ 16, p. 4.
On January 13, 2016, we entered a verdict in favor of both defendants on
the record in open court. Although the docket indicates that a Motion for Post-
Trial Relief was filed by the Plaintiff on February 16, 2016, none was ever received
by the undersigned, none is in the Court file maintained by the Prothonotary and
none was scanned into the Prothonotary's imaging system as of the writing of
this Opinion. Ultimately on August 3, 2016 a Praecipe for Judgment on the
verdict was filed and Judgment was entered.
The plaintiff filed a notice of appeal on August 4, 2016. We entered an
order on August 8, 2016, for the Plaintiff to file a concise statement of matters
within twenty-one (21) days.
1
STATEMENTOF MATIERS COMPLAINEDOF ON APPEAL
On August 25, 2016, Plaintiff timely filed a concise statement of matters.
In the statement of matters, the Plaintiff " .. .identifies the errors in only general
terms because Plaintiff cannot readily discern the basis for the Decision rendered
by the Honorable James M. McMaster announced orally in open court ... where
1) no reasons in support of the Decision were given at the time of its
pronouncement; and 2) no written reasons thereafter filed in support of the
Decision prior to the appeal of this matter." The enumerated statement of
matters are outlined below, verbatim:
1. To the extent that this Court's Decision relied upon it, the Court abused
its discretion and/ or erred as matter of law in not finding and/ or
concluding that Kouzoupis Jewelry, SAwas not the property party-plaintiff
in this matter.
2. To the extent that this Court's Decision relied upon it, the Court abused
its discretion and/or erred as a matter of law in not finding and/or
concluding that Plaintiff had not met its burden of proof with respect to its
claim(s) in this matter.
3. To the extent that this Court's Decision relied upon it, the Court abused
its discretion and/ or erred as matter of law with respect to its findings
and/or conclusions regarding witness credibility in this matter.
4. To the extent that this Court's Decision relied upon it, the Court abused
its discretion and/ or erred as a matter of law in finding and/ or concluding
that Plaintiff made any admissions against its interest with respect to any
material facts and/or issues in this matter.
5. To the extent that this Court's Decision relied upon it, the Court abused
its discretion and/ or erred as a matter of law in finding and/ or concluding
that Defendant had met its burden of proof with respect to any of its
affirmative defenses and/ or that any such defense(s) totally barred by
Plaintiffs right to any recovery in this matter.
6. To the extent that this Court's Decision relied upon it, the Court abused
its discretion and/or erred as a matter of law in considering and/or
accepting any objections or challenges by Defendant to Plaintiffs evidence
that were either waived by Defendant and/or sua sponte raised by the
Court.
DISCUSSION
In entering the verdict, we decided that because the checks were payable
from the individual defendant to a person other than Plaintiff who was not a
party to the suit, we could not find that the Plaintiff had any right to bring the
2
action on the checks. Since that was the only action the Plaintiff pursued at the
trial we had no choice but to enter a verdict in the Defendants' favor.
The only real issue is whether Plaintiff is the holder of the checks in dispute
in this case and therefore a proper plaintiff with standing.
Under the Pennsylvania Commercial Code, a "negotiable instrument" is an
"unconditional promise to pay a fixed amount of money that is payable to bearer
at the time it is issued or first comes into possession of a holder, is payable on
demand or at a definite time; and does not state any other undertaking or
instruction by the person promising payment to do any act in addition to the
payment of money." 13 Pa.C.S.A. § 3104(a)(l-3). A check is a negotiable
instrument. 13 Pa.C.S.A. § 3104(f).
Further, a "holder" is defined as "the person in possession of a negotiable
instrument that is payable either to the bearer or to an identified person that is
the person in possession." 13 Pa.C.S.A. § 1201(b)(21).Negotiable instruments
may be transferred from a holder to another person or entity when the
instrument "is delivered by a person other than its issuer for the purpose of
giving to the person receiving delivery the right to enforce the instrument." 13
Pa.C.S.A. § 3203(a).
In George v. Pennsylvania Public Utility Comm'n, the Pennsylvania
Commonwealth Court outlined the general requirements for standing under
Pa.R.C.P 1028(a)(5):
Thereare three requirements for a party to have standing to litigate
an issue: the party must have a substantial interest in the subject
matter of the litigation; the interest must be direct; and the interest
must be immediate and not a remote consequence . . . . A
'substantial' interest is an interest in the outcome of the litigation
which surpasses the common interest of all citizens in procuring
obedience to the law. A 'direct' interest requires a showing that the
matter complained of caused harm to the party's interest. An
'immediate' interest involves the nature of the causal connection
between the action complained of and the injury to the party
challenging it and is shown where the interest the party seeks to
protect is within the zone of interests sought to be protected by the
statute or the constitutional guarantee in question .... Both the
immediacy and directness requirements primarily depend on the
causal relationship between the claimed injury and the action in
question.
George v. Pennsylvania Public Utility Comm'n 735 A.2d 1282, 1286 (Pa
Cmwlth.Ct. 1999). Further, "[d]amageor legal injury is essential to a right to sue
3
in an action at law." Sixsmith v. Martsolf, 413 Pa. 150, 154, 196 A.2d 662, 664
(1964).
Here, Ms. Efrosini Kouzoupis, a person not a party to the suit, is the holder
of the checks in dispute. Ms. Kouzoupis not only had physical possession of the
checks, but the checks were also made out directly to her. Plaintiff is not the
payee on any of the checks involved in this case. While checks are negotiable
instruments and are therefore able to be assigned to someone other than the
holder, the checks here were not transferred by Ms. Kouzoupis, as she did not
deliver them or otherwise assign them to Plaintiff for the purpose of giving the
company the right to enforce the checks.
Therefore, Ms. Efrosini Kouzoupis, not Plaintiff, is the holder of the checks in
issue because the checks were never actually assigned to the company, even if
the proceeds of them was intended to be at some point. In fact Ms. Kouzoupis
testified that she attempted to deposit the checks into her personal account but
they bounced or were not honored. At trial, Ms. Kouzoupis testified that her
practice was to deposit checks received from jewelry purchasers into her
personal account, which is what she attempted to do in this case. N.T. 01/ 12/ 16,
p. 30-31. Her testimony made it clear that while she may have intended to give
Plaintiff the proceeds she realized from the checks had they cleared, they never
cleared and she never had any proceeds to give to Plaintiff and she never gave
the checks to Plaintiff. Therefore, the Plaintiff does not have a substantial, direct,
or immediate interest in the subject matter of the litigation. Because of that, Ms.
Kouzoupis is the only person who is empowered resolve the dispute about the
checks.
CONCLUSION
For the above reasons, the Kouzoupis Jewelry, SA's appeal should be
quashed or denied.
BY THE COURT
DATE
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