Semian, G. v. Kneph, LLC d/b/a Realty Network ( 2022 )

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
GEORGE SEMIAN : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellant :
:
:
v. :
:
:
KNEPH, LLC D/B/A REALTY : No. 1692 MDA 2021
NETWORK GROUP :
Appeal from the Order Entered February 25, 2021
In the Court of Common Pleas of Lackawanna County
Civil Division at No: 2012-00442
BEFORE: BENDER, P.J.E., STABILE, J., and STEVENS, P.J.E.*
MEMORANDUM BY STABILE, J.: FILED: SEPTEMBER 14, 2022
Appellant, George Semian (“Semian”), appeals from the February 25,
2021 order entered in the Court of Common Pleas of Lackawanna County
awarding damages to Appellee, KNEPH, LLC d/b/a Realty Network Group
(“KNEPH”). Semian contends that the trial court erred in granting partial
summary judgment in favor of KNEPH on July 15, 2020, and that the trial
court committed evidentiary errors and rendered a decision against the weight
of the evidence when it awarded $130,306.51 in damages to KNEPH in its
February 25, 2021 order. Upon review, we affirm.
Our review of the record informs the following factual and procedural
background of this case.
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* Former Justice specially assigned to the Superior Court.
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KNEPH entered into an asset purchase agreement (“the Agreement”) in
March 2011 with Semian and Gress Real Estate, Inc.. Per the terms of the
Agreement, KNEPH purchased the business assets of Semian and Gress. The
Agreement included a noncompete provision under which Semian agreed he
would not engage in a similar real estate business for four years. On May 31,
2011, KNEPH terminated Semian’s employment.
On January 20, 2012, Semian filed a complaint for declaratory judgment
in which he indicated that he planned to engage in real estate transactions
due to economic hardship and economic necessity. In response, KNEPH
notified Semian that it intended to commence litigation and seek injunctive
relief if Semian associated with another firm.
On January 21, 2015, KNEPH filed an answer and counterclaim in which
it requested that the court enter injunctive relief and order Semian to comply
with the noncompete agreement. KNEPH alleged six counts of breach of
contract relating to Semian’s breach of the Agreement and several other
agreements, including an exclusive affiliation agreement, a nondisclosure and
noncompetition agreement, and various loan agreements. In response,
Semian denied all KNEPH’s claims.
On November 2, 2018, KNEPH served discovery requests on Semian,
including requests for production of documents, interrogatories, and requests
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for admission.1 In accordance with the Pennsylvania Rules of Civil Procedure,
responses to requests for production and answers to written interrogatories
are to be served within thirty days after service. Pa.R.Civ.P. 4009.12(a) and
Pa.R.Civ.P. 4006(a)(2), respectively. With regard to requests for admissions,
the rules provide that requests for admission are deemed admitted “unless,
within thirty days after service of the request . . . the party to whom the
request is directed serves upon the party requesting the admission an answer
verified by the party or an objection, signed by the party or by the party’s
attorney.” Pa.R.Civ.P. 4014(b).
On January 14, 2019, in light of Semian’s failure to respond to the
discovery requests, KNEPH filed a motion to compel in which it cited Rule
4014(b) as the basis for deeming the requests for admission admitted and
asked the court to order Semian to serve responses to the requests for
production and answers to interrogatories. By order entered the same day,
the court granted KNEPH’s motion and directed Semian to serve discovery
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1 In the requests for admission, KNEPH asked that Semian admit, inter alia,
that at the time the parties signed the Agreement, Semian warranted the
accuracy of his company’s books and records; that the Agreement placed
value on the goodwill of the company; that he did not advise KNEPH of
removal of funds from an escrow account or the inclusion of false information
in the Agreement; that he had violated obligations as a licensed real estate
broker; that he misappropriated funds from the client escrow account or the
company’s operating accounts; that he was aware that removing escrow funds
violated regulatory restrictions and Pennsylvania law; and that he damaged
the goodwill of the company by misappropriating funds. Requests for
Admission Nos. 3-10.
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responses within 20 days, “[t]ime being of the essence.” Order, 1/14/19, at
1.
On March 14, 2019, with the discovery requests still unanswered despite
the court’s January 14, 2019 order, KNEPH filed a motion for partial summary
judgment. KNEPH asserted that Semian’s failure to respond to KNEPH’s
requests for admission resulted in the matters being deemed admitted, thus
entitling KNEPH to partial summary judgment on liability with respect to
Counts I through IV and Count VI of KNEPH’s counterclaims.2
The trial court conducted a hearing on KNEPH’s motion for partial
summary judgment on October 29, 2019. By order entered on July 15, 2020,
the court granted the motion and entered summary judgment on liability in
favor of KNEPH on Counts I through IV and Count VI of its counterclaims. The
court also scheduled a hearing for November 9, 2020 on the issue of damages.
Order, 7/15/20, at 1.
Following the November 9, 2020 hearing, the court received proposed
findings of fact and conclusions of law from the parties. By order entered on
February 25, 2021, the court awarded damages to KNEPH totaling
$130,306.51.3 Semian filed a timely appeal to this Court. The appeal was
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2 The motion did not seek relief on Count V, which related to a $500 loan.
3 The court awarded $17,000 for failure to repay loans, $12,100 for breach of
the Agreement related to failure to disclose misappropriation of escrow funds,
and $101,206.51 for breach of the Agreement for failing to disclose
(Footnote Continued Next Page)
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quashed as one not taken from a final order. Following the trial court’s
November 17, 2021 order disposing of the remaining matters, Semian timely
filed the instant appeal and now asks us to consider the following issues:
1. Did the trial court err in granting a partial motion for summary
judgment against [Semian] based on the fact that the law on
requests for admissions has liberal standards for withdrawal of
an admission and, further, the “admissions” were actually legal
conclusions and not facts, which is not permitted under the
rules of civil procedure?
2. Did the trial court err and/or abuse its discretion in permitting
the use of spreadsheets as support of damages was permitted
over objection, when the underlying supporting documentation
was not turned over in discovery despite requests for the same,
rendering all damages too speculative under the law?
3. Is the trial court’s decision against the weight of the evidence
as there was no evidence which ties $100,000 to KNEPH since
Mark DeStefano is not a party to this case?
4. Did the trial court err in permitting Helen Lavelle or a
representative of the Lavelle Strategy Group to testify when
the person and/or agent was never disclosed in discovery,
despite a continuing obligation to do so under the rules of civil
procedure, and which ultimately created an unfair surprise?
Semian’s Brief at 5.
In his first issue, Semian argues the trial court erred by granting partial
summary judgment against him based on Pa.R.Civ.P. 4014’s directive that
requests for admissions are deemed admitted if not answered within thirty
days. As this Court has explained:
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misappropriation of escrow funds and inclusion of false information that
required KNEPH to rebrand the company. Order, 2/25/21, at 1-2.
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When reviewing a grant of summary judgment, the appropriate
scope and standard of review are as follows:
In reviewing an order granting summary judgment, our
scope of review is plenary, and our standard of review is the
same as that applied by the trial court. Our Supreme Court
has stated the applicable standard of review as follows: [A]n
appellate court may reverse the entry of a summary
judgment only where it finds that the lower court erred in
concluding that the matter presented no genuine issue as to
any material fact and that it is clear that the moving party
was entitled to a judgment as a matter of law. In making
this assessment, we view the record in the light most
favorable to the nonmoving party, and all doubts as to the
existence of a genuine issue of material fact must be
resolved against the moving party. As our inquiry involves
solely questions of law, our review is de novo.
Harris v. NGK North American, Inc., 19 A.3d 1053, 1063 (Pa. Super. 2011)
(quoting Jones v. Levin, 940 A.2d 451, 453 (Pa. Super. 2007) (internal
citations omitted)).
Again, Rule 4014(b) provides, in pertinent part, that each matter of
which an admission is requested “is admitted unless, within thirty days after
service of the request, . . . the party to whom the request is directed serves
upon the party requesting the admission an answer verified by the party or
an objection, signed by the party or by the party’s attorney[.]” Here, KNEPH
served requests for admissions on November 2, 2018. Semian did not file
answers or objections to the requests. Therefore, the requests were deemed
admitted on December 2, 2018.
In accordance with Rule 4014(d), “[a]ny matter admitted under this rule
is conclusively established unless the court on motion permits withdrawal or
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amendment of the admission.” However, Semian did not file a motion seeking
withdrawal or amendment of the admissions, even after KNEPH filed a motion
to compel on January 14, 2019, seeking responses to outstanding requests
for production of documents and interrogatories and citing Rule 4014(b) as
the basis for deeming the requests for admission admitted.
Although the court granted the motion to compel that same day and
ordered Semian to answer the outstanding discovery requests within twenty
days, Semian did not comply and did nothing with respect to the requests for
admissions. Two months later, on March 14, 2019, KNEPH filed its motion for
partial summary judgment, seeking a determination of liability based on Rule
4014 because the requests for admission were deemed admitted.
In the response to the motion Semian filed four and a half months later,
Semian denied that the requests for admission were deemed admitted,
contending answers to the requests were provided on April 26, 2019, and
further suggesting the requests called for legal conclusions. Semian’s Answer
to KNEPH’s Motion for Partial Summary Judgment, 7/29/19, at ¶ 16. However,
Semian did not explain how responses filed on April 26, 2019 somehow acted
to override the provisions of Rule 4014(b), which resulted in the unanswered
requests being deemed admitted as of December 2, 2018. Nor did he identify
which of the 29 requests for admission supposedly called for conclusions of
law. Moreover, Semian never filed a motion asking the court to withdraw the
admissions, instead seemingly suggesting—without citing any authority—that
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filing an answer to the motion for partial summary judgment served as a viable
substitute.4
In its Rule 1925(a) opinion, the trial court addressed the grant of partial
summary judgment on the issue of liability, explaining that “[f]ailure to
respond to a request for admission deems the facts contained within the
request admitted by the party from whom the admission was sought.” Rule
1925(a) Opinion, 2/9/22, at 14 (citing Richard T. Byrnes Co. v. Buss
Automation, Inc., 609 A.2d 1360, 1367 (Pa. Super. 1992)). In Byrnes, this
Court recognized that “if the party from whom the admissions were sought
fails to respond, by either answering or objecting thereto, within the
established time frame, that party runs the risk of having those facts deemed
admitted.” Id. at 1367 (citing Innovate, In. v. United Parcel Service,
Inc., 418 A.2d 720 (Pa. Super. 1980)). As was the case in Byrnes, where
the party chose to ignore the rule, the trial court properly granted summary
judgment because a party’s failure to respond to the requests for admission
resulted in “the facts as set forth in the request for admissions [being]
conclusively binding on him” because he chose not to file an answer to the
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4 In his brief filed with this Court, Semian complains that three of the 29
requests for admission (Nos. 6, 7 and 10) called for legal conclusions.
However, when he untimely served responses nearly five months after the
requests were deemed admitted, he did not object to any requests as calling
for conclusions of law. See Semian’s Answer to KNEPH’s Motion for Partial
Summary Judgment, 7/29/19, at Exhibit 1. Moreover, we agree with KNEPH’s
assertion that the remaining admitted requests were sufficient to support the
grant of summary judgment. See KNEPH’s Brief at 24.
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request for admission or file objections to the request. Id. at 1364 (quoting
Innovate, 418 A.2d at 723).
Likewise, in the case at bar, Semian failed to respond or object
to any requests for admission until seven (7) years after the
requests were made.[5] [Semian] believes that the requests
should be withdrawn as KNEPH waited until Semian reapplied and
regained his real estate license to continue litigating the case.
However, this is not sufficient reason for failing to respond to or
object to the admissions, as the rule clearly states. Accordingly,
the Motion for Partial Summary Judgment was properly decided
and [Semian’s] appeal from the Order is not supported by the
record before the Court.
Rule 1925(a) Opinion, 2/9/22, at 14.
Finding no error in the trial court’s grant of partial summary judgment
on liability, we affirm the court’s July 15, 2020 order. Semian’s first issue
fails.
In Semian’s remaining issues, he challenges the trial court’s rulings on
evidentiary matters. We review a trial court's evidentiary decisions under an
abuse of discretion standard. Hassel v. Franzi, 207 A.3d 939, 950 (Pa.
Super. 2019).
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5 Clearly, the trial court’s reference to requests going unanswered for seven
years was an inadvertent error. As the court’s opinion correctly reflects,
KNEPH sought partial summary judgment based on Semian’s failure to
respond to discovery requests, including the requests for admission, “for over
five (5) months, despite a court order compelling [Semian] to comply[.]”
Rule 1925(a) Opinion, 2/9/22, at 11-12. Semian opposed the motion, in part
based on its contention that the documents were to be submitted within
thirty days “even though there was nothing done on the case for seven (7)
years prior thereto.” Id. at 12.
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In his second issue, Semian argues that the trial court erred or abused
its discretion by permitting, over objection, the use of spreadsheets rather
than tax returns in support of KNEPH’s damages claims. He contends the
supporting documentation was not provided in discovery despite requests for
same, thereby rendering damages evidence too speculative. KNEPH counters
that tax returns were irrelevant because the evidence that was presented was
not speculative but was properly admitted, and “was produced in discovery,
relevant, prepared in the ordinary course of business, and properly
authenticated.” KNEPH’s Brief at 14.
The trial court agreed with KNEPH and rejected Semian’s challenge,
noting KNEPH met its burden and established a proper method of measuring
damages.
Through the testimony presented at the damages hearing, where
the witnesses were subject to cross-examination, KNEPH
submitted and presented sufficient evidence to prove damages as
awarded by the court. First, Mark DeStefano, a managing
member for the legal entity KNEPH testified to various loans paid
on behalf of Semian. He also submitted a spreadsheet that
detailed the dates, amounts, and loans that were specifically paid.
Specifically, the document was titled a Transaction Report, and
was prepared in the ordinary course of business, to document the
loans paid out on behalf of Semian. Additionally, DeStefano
provided an email between him and Semian outlining the
advancement of an $11,500 loan and that this would be the final
advancement to Semian, to which Semian replied to the effect
that he agreed to that position. In total, the testimony and
documents showed that KNEPH advanced loan payments in the
amount of $17,000. We submit that the record of testimony and
evidence submitted by KNEPH supports the findings of the court
relative to damages.
Rule 1925(a) Opinion, 2/9/22, at 15-16 (with minor alterations).
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We find no abuse of discretion on the part of the trial court in accepting
KNEPH’s and DeStefano’s documents and testimony as sufficient evidence of
damages. Semian’s second issue fails.
In his third issue, Semian contends the trial court’s attribution of a
$100,000 loan from DeStefano to KNEPH is against the weight of the evidence
because DeStefano is not a party and there is nothing to tie the loan to any
losses by Semian. While he phrases the issue in terms of weight of the
evidence, his brief addresses the issue in terms of being too speculative to
support the award of damages.
The trial court rejected Semian’s contentions, explaining that upon
discovery of missing escrow funds for which Semian was criminally charged,
KNEPH “issued checks or entered into settlement agreements with all clients
that had discrepancies related to escrow funds.” Rule 1925(a) Opinion,
2/9/22, at 16. The court recounted DeStefano’s testimony at the November
9, 2020 hearing during which he provided a detailed list of the missing escrow
funds totaling $12,100, evidence not adequately refuted by Semian at the
hearing. Id. at 16-17. DeStefano also described the rebranding efforts
KNEPH undertook, working with the Lavelle Strategy Group, to distance itself
from Semian and his criminal conduct. Over Semian’s objection, DeStefano
presented evidence of the $100,000 loan he used to pay for the rebranding
effort. As the court explained:
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DeStefano was able to show that each invoice was paid on behalf
of KNEPH. The various invoices from Lavelle Strategy Group
totaled $101,206.51, an amount in excess of the $100,000 loan
DeStefano took out to help re-brand the company. The invoices
were submitted to the court at the damages hearing and a
representative from Lavelle Strategy Group testified and
confirmed the amounts paid. As such, KNEPH has met their
burden and established a proper measure of evidence to sustain
the damages award in the amount of $130,306.51 and accordingly
the order on damages as entered by the court was properly based
upon a method of determining damages that was supported by
the record of testimony and evidence[.]
Id. at 17 (with minor alterations). We find no abuse of discretion in the trial
court’s disposition of Semian’s challenge to Stefano’s testimony regarding his
loan and his efforts on behalf of KNEPH as a managing member of the
company.6
In his fourth issue, Semian asserts trial court error for permitting Helen
Lavelle to testify because she was not disclosed as a witness in discovery. The
trial court explained:
KNEPH addressed this issue and stated that it would have provided
a list of witnesses in accordance with a schedule provided by the
court, and a scheduling order was never issued. Additionally,
KNEPH asserted that since summary judgment was previously
granted [on liability] a pretrial conference was never held and the
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6 Acknowledging that Semian phrased his third issue as one involving weight
of the evidence, “[w]e note that a true weight of the evidence challenge
concedes that sufficient evidence exists to sustain the verdict.” Armbruster
v. Horowitz, 744 A.2d 285, 286 (Pa. Super. 1999) (internal citation and
quotations omitted). Further, “[a]n allegation that the verdict is against the
weight of the evidence is addressed to the discretion of the trial court.”
Commonwealth v. Widmer, 744 A.2d 745, 751-52 (Pa. 2000). Again, we
find no abuse of discretion on the part of the trial court. Semian would not be
entitled to relief even assuming his third issue implicated weight of the
evidence principles.
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court went right into the damages issues. . . . In support of his
appeal on this issue, as set forth in his Rule 1925 filing, Semian
has submitted no case law stating that Lavelle should not have
been allowed to testify at the damages hearing. . . . [T]he court
was within its discretion to allow Lavelle to testify at the damages
hearing even though she was not on a witness list. Finally, Semian
was not prejudiced as he was still afforded an opportunity to
cross-examine the witness as well as question her on the evidence
she provided.
Id. at 18-19 (with minor alterations).
KNEPH acknowledges that Semian did cite two cases in his appellate
brief that addressed preclusion of witness testimony and recognized that
witness preclusion is a drastic sanction. However, “the two cases cited in
[Semian’s] appellate brief actually hold that it was reversible error for the trial
court to exclude the testimony of witnesses that had not been disclosed.”
KNPEH’s Brief at 42. Quoting one of those cases, KNEPH recognized that “[i]t
has been held repeatedly . . . that whether an undisclosed witness shall be
permitted to testify is discretionary with the trial court and the trial court
should not preclude testimony in the absence of prejudice.” Id. at 45 (quoting
Feingold v. Southeastern Pennsylvania Transp. Auth., 488 A.2d 284,
288 (Pa. Super. 1985)).
As KNEPH argues, Semian cannot credibly claim to have been surprised
by Lavelle’s testimony in light of the fact the Lavelle Group’s invoices were
produced in discovery. Id. at 45. Moreover, even if there was error in
admitting her testimony, the error was harmless because her testimony was
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cumulative of the testimony of other witnesses, including DeStefano. Id. at
46-47.
We agree. Finding no abuse of discretion on the part of the trial court
for permitting Lavelle’s testimony, we shall not disturb the court’s ruling.
Semian is not entitled to relief on his fourth issue.
Finding no error in the trial court’s grant of summary judgment or abuse
of discretion in its evidentiary rulings, we affirm the court’s February 25, 2021
order awarding damages to KNEPH.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 09/14/2022
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