United Environmental Group, Inc. v. GKK McKnight, LP ( 2017 )

J-A24021-17 & J-A24022-17 & J-A24023-17
2017 PA Super 399UNITED ENVIRONMENTAL GROUP, INC., IN THE SUPERIOR COURT
OF
PENNSYLVANIA
Appellant
v.
GKK MCKNIGHT, LP, A PENNSYLVANIA
LIMITED PARTNERSHIP, GKK CAPITOL,
LLC, A PENNSYLVANIA LIMITED LIABILITY
COMPANY, GOLDEN OIL COMPANY, A
PENNSYLVANIA CORPORATION, AND KEHM
OIL COMPANY, A PENNSYLVANIA
CORPORATION
No. 1956 WDA 2016
Appeal from the Judgment Entered November 30, 2017
In the Court of Common Pleas of Allegheny County
Civil Division at No(s): GD 10-010292
UNITED ENVIRONMENTAL GROUP, INC., IN THE SUPERIOR COURT
OF
PENNSYLVANIA
Appellant
v.
GKK MCKNIGHT, LP, A PENNSYLVANIA
LIMITED PARTNERSHIP, GKK CAPITAL,
LLC, A PENNSYLVANIA LIMITED LIABILITY
COMPANY, GOLDEN OIL COMPANY, A
PENNSYLVANIA CORPORATION, AND
KEHM OIL COMPANY, A PENNSYLVANIA
CORPORATION
No. 294 WDA 2017
Appeal from the Judgment Entered November 30, 2017
In the Court of Common Pleas of Allegheny County
Civil Division at No(s): GD 10-010292
J-A24021-17 & J-A24022-17 & J-A24023-17
UNITED ENVIRONMENTAL GROUP, INC., IN THE SUPERIOR COURT
OF
PENNSYLVANIA
v.
GKK MCKNIGHT, LP, A PENNSYLVANIA
LIMITED PARTNERSHIP, GKK CAPITAL,
LLC, A PENNSYLVANIA LIMITED LIABILITY
COMPANY, GOLDEN OIL COMPANY, A
PENNSYLVANIA CORPORATION, AND
KEHM OIL COMPANY, A PENNSYLVANIA
CORPORATION
APPEAL OF: GOLDEN OIL COMPANY AND
KEHM OIL COMPANY
No. 55 WDA 2017
Appeal from the Judgment Entered November 30, 2017
In the Court of Common Pleas of Allegheny County
Civil Division at No(s): GD 10-010292
UNITED ENVIRONMENTAL GROUP, INC., IN THE SUPERIOR COURT
OF
PENNSYLVANIA
v.
GKK MCKNIGHT, L.P., A PENNSYLVANIA
LIMITED PARTNERSHIP, GKK CAPITAL,
LLC A PENNSYLVNIA LIMITED LIABILITY
COMPANY, GOLDEN OIL COMPANY, A
PENNSYLVANIA CORPORATION, AND
KHEM OIL COMPANY, A PENNSYLVANIA
CORPORATION
APPEAL OF: GKK MCKNIGHT, L.P. AND
GKK CAPITOL, LLC
No. 82 WDA 2017
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J-A24021-17 & J-A24022-17 & J-A24023-17
Appeal from the Judgment Entered November 30, 2017
In the Court of Common Pleas of Allegheny County
Civil Division at No(s): GD 10-01-010292
BEFORE: BENDER, P.J.E., MOULTON, J., and SOLANO, J.
OPINION BY SOLANO, J.: Filed: December 15, 2017
This is an action by United Environmental Group, Inc. for damages
relating to environmental remediation services that it performed at property
on McKnight Road in Ross Township, Allegheny County, the former site of a
gas station. There are two groups of defendants: (1) GKK McKnight, LP, a
Pennsylvania limited partnership, and GKK Capital, LLC, a Pennsylvania
limited liability company (together, “GKK”); and (2) Golden Oil Co., a
Pennsylvania corporation, and Kehm Oil Co., a Pennsylvania corporation
(together, “Golden”). Following a jury trial, United obtained a judgment in
its favor against all defendants. At Docket Nos. 1956 WDA 2016 and 294
WDA 2017, United appeals from that judgment because it failed to include
all of the elements of recovery that it sought. At Docket No. 55 WDA 2017,
Golden cross-appeals from the judgment in favor of United. At Docket No.
82 WDA 2017, GKK cross-appeals from the rejection of its cross-claim
against Golden. We vacate the judgment at Nos. 1956 WDA 2016 and 294
WDA 2017 and remand for further proceedings. We affirm the judgment at
Nos. 55 WDA 2017 and 82 WDA 2017.
Golden owned the gas station at the Ross Township property until
2007, when it sold the property to GKK. There were several underground
tanks on the property that were used to store gasoline, and, prior to the
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sale, Golden asked United, a company that excavates tanks and does
environmental cleanup for gas stations, to submit quotes for the removal of
the tanks on the property.
Golden and United had done business in the past. At trial, United’s
president, Stephen Klesic, testified to United’s longstanding business
relationship with Golden and its president, George Kehm:
[Q] . . . How long has [United] done work for Mr. Kehm and his
companies? You said about 30 years?
A Over 30 years, it was in the early ’70s – or late ’70s early,
’80s.
Q Do you recall how many projects or jobs you’ve done in
that time period for him?
A From service calls to tank installations to tank removals,
probably over a thousand.
Q And how did these jobs typically start? Who arranged
them?
A We would either get a call from Mr. Kehm or his secretary,
Kathy. If it was a service call, you know, usually in the
morning between 6 and 7:00 a.m., we were in, George
[Kehm] was in, Kathy was in. We’d get a call because he’s
checking with his stations and there was a problem at one
of the stations that needed maintenance. If it was
something other than a general maintenance issue, we
may get a fax, hey, we have facility operations inspections
which are required by PADEP [the Pennsylvania
Department of Environmental Protection], they are to be
done every three years. And we would get a fax, hey,
these inspections are up for our facility and we need to do
them and get them scheduled.
Q And how were you typically paid for these jobs?
A We were typically paid in 30 days or less.
Q From your invoice?
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A From my invoices.
Q When you sent an invoice from [United], did it typically
have an interest rate on it?
A Yes, our invoices were zero percent discount zero days,
net ten, and then a one-and-a-half percent 30 days — or
interest per month.
N.T., 5/11/15, at 56-57. Simply stated, after thirty days, United would
charge 1.5% interest per month on the balance. Id. at 58.
Kehm testified that United typically would invoice Golden for its
services, and Golden would pay United and obtain reimbursement from
Pennsylvania’s Underground Storage Tank Indemnification Fund, a fund
established by the Commonwealth to assist with the removal of underground
petroleum storage tanks. See N.T., 5/11/15, at 102-03.1 Since 1994,
Kehm had been involved in about fifty remediations that involved the Tank
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1
This Court discussed the Tank Fund in Wagner v. Erie Ins. Co., 801 A.2d
1226 (Pa. Super. 2002), aff’d, 847 A.2d 1274 (Pa. 2004) (per curiam
order):
In 1989, Pennsylvania enacted the Storage Tank and Spill
Prevention Act (“STSPA”), 35 P.S. §§ 6021.101–6021.2104,
which included creation of the Underground Storage Tank
Indemnification Fund [(“Tank Fund”)], 35 P.S. §§ 6021.704-708.
The purpose of the Fund was to make “payments to owners,
operators and certified tank installers of underground storage
tanks who incur liability for taking corrective action or for bodily
injury or property damage caused by a sudden or nonsudden
release from underground storage tanks and for making loans to
owners as authorized by this act.”
Id. at 1228 (footnote and some citations omitted). Klesic testified that
Golden sometimes would request reimbursement from a third party other
than the Tank Fund. N.T., 5/12-13/15, at 73.
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Fund, and he testified that he had never had the Fund deny reimbursement.
Id.
Paragraph 10 of the August 2007 agreement for sale of the property
from Golden to GKK provided as follows:
Seller’s Expenses: Seller shall be responsible for cost of deed
preparation and all matters of title clearance. Seller shall also be
responsible for bringing the Property into compliance with the
applicable Pennsylvania Department of Environmental
Protection’s Underground [Storage Tank] (UST) regulations for
site closure.
Ex. C. at ¶ 10 to United’s Fourth Am. Compl., 2/29/12. Closing on the sale
of the property occurred in August or September of 2008, and around that
same time, Kehm directed United to submit its quote for removal of the
tanks to Jonathon Kamin, GKK’s manager. The quote estimated a cost of
$13,567 to remove the storage tanks and any contaminated material and to
fill the resulting hole with uncontaminated soil. In pertinent part, the
estimate provided, “This work will be handled on a Time & Material basis,
while all costs associated with the removal of the contaminated material
should be covered under [the Tank Fund] with a $5,000 deductible per
release, it is ultimately the owner[’]s responsibility for these additional
expenses.” Ex. A to Fourth Am. Compl., 2/29/12. The estimate did not
include an integration clause. GKK signed the estimate next to the word
“Accepted.” Id. Although the signature is not dated, GKK apparently signed
on September 22, 2008. See N.T., 5/11/15, at 82.
United began work the next day and almost immediately discovered
contaminated soil. N.T., 5/11/15, at 83. United promptly notified GKK,
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Golden, the Pennsylvania Department of Environmental Protection (“DEP”),
and the Tank Fund, in order to initiate a formal claim for reimbursement.
Id. at 83. During the course of remediation, United discovered additional
storage tanks that had to be removed. Id. at 87. According to United, GKK
and Golden directed United to perform the work needed to remediate the
contamination that it found and represented that its invoices would be paid.
Id. at 70-72.
In this connection, Golden’s counsel cross-examined Klesic of United
regarding the basis for its claim against Golden (which counsel personalized
in his questions by referencing Golden’s president, Kehm) and whether
United contended that it was suing under the remediation contract that
Klesic (for United) had signed with Kamin of GKK:
Q. Do you know what contract you are suing Mr. Kehm under?
A. It is my understanding that that contract, as it is there, was
with Mr. Kamin. Mr. Kehm had guaranteed the cleanup of the
site to Mr. Kamin, and then subsequently ordered me to,
basically, do whatever is necessary to keep Mr. Kamin happy and
clean up the property.
Q. Just to be clear, you are not suing Mr. Kehm under this
contract?
A. It is a supplement to that contract.
N.T., 5/12/15, at 4-5. Klesic did not otherwise elaborate.
United completed remediation in 2010, and the DEP approved United’s
remediation work in 2012. N.T., 5/11/15, at 118-19. United sent invoices
for its remediation work to GKK, Golden, or (in most cases) both of them.
The invoices totaled $350,000. GKK tendered payment of $17,390.55. GKK
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requested reimbursement from the Tank Fund, but because GKK failed to
timely submit a claim, GKK’s request for reimbursement was denied on
June 10, 2009. N.T., 5/11/15, at 108-10.2 GKK asked the Tank Fund’s
executive director to review the denial, but the Tank Fund reaffirmed its
decision. Id. at 112. GKK missed the deadline to further appeal the Tank
Fund’s decision. N.T., 5/12-13/15, at 103.
Meanwhile, on June 30, 2009, Golden paid United $100,000 as partial
payment for the cleanup of the property, which left approximately $230,000
of unpaid invoices. N.T., 5/11/15, at 129. Golden’s check included a
notation that it was “paid under protest.” When asked about this notation,
Klesic (United’s president) testified:
[Q:] What did you take the “paid under protest to mean”?
A [Golden] felt that the [Tank Fund] should be paying for the
cost of cleanup on this as did I because per the regulations
and the guidance, it should have been covered. We
provided documentation to refute the claims.
N.T., 5/11/15, at 115. Klesic later explained:
A My understanding was [that the $100,000 check] was a
partial payment on the cleanup for the McKnight Road site.
And that if [GKK] was successful in the appeal with the
fund and the fund decided to pay, if they paid us for that
work, we would reimburse the portion back to [Golden], or
there was a letter written to [Golden] that he could
submit[.]
____________________________________________
2
The Tank Fund said it also denied reimbursement because “a prior release
was reported by the DEP and no release of liability was granted.” N.T.,
5/11/15, at 109.
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Id. at 116. The last four invoices for the remediation were sent only to GKK
because Golden indicated it would pay no more invoices. N.T., 5/11/15, at
101.
At trial, however, Golden’s president, George Kehm, testified that it
was Golden’s responsibility to pay for the remediation:
[Q. by GKK’s counsel]. . . . Golden Oil entered into a contract
with GKK McKnight for the purchase of the McKnight property; is
that correct?
A. That is correct.
Q. And in a deposition you gave in this case, you stated it was
Golden Oil’s responsibility to pay for the cleanup costs?
A. That is correct.
Q. Is that still your understanding?
A. That is still correct. I'll tell you why. It was so that [the Tank
Fund] paid these 50 other accounts or 50 odd accounts and
always paid them. So why wouldn’t they pay this one?
N.T., 5/12-13/15, at 146. Kehm stood by his deposition testimony in which,
when asked, “what was your understanding of your responsibility with the
underground storage tanks and transferring this property to GKK,” he
responded: “I informed them that it was my responsibility. It is the law
that I have to be responsible for it. . . .” Id. at 151-52.
Eventually, United sued both GKK and Golden for the balance due on
its invoices. In its fourth amended complaint (“Complaint”), it asserted
claims for breach of contract, unjust enrichment, continuing services, and
damages under the Contractor and Subcontractor Payment Act (“CASPA”),
73 P.S. §§ 501–516. The contract claim was based on the written contract
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between GKK and United (Exhibit A to the Complaint) and several invoices
and other documents in which GKK or Golden authorized United’s work.
United’s Fourth Am. Compl., at ¶ 29. United alleged:
Despite repeated demands for payment and repeated
promises for payment, Defendants have failed and refused to
pay the full amounts due on the contract as set forth on the
invoices, and as summarized by the Statement of Past Due
Account attached hereto as Exhibit “B”, and there remains due
and owing the amount of $180,093,40 plus interest of
$40,510.74 through May 11, 2010 for a total of $220,804.14 as
of May 11, 2010 plus further interest as provided by agreement
and practice, and costs as provided by law.
WHEREFORE, Plaintiff demands joint and several judgment
against all Defendants in the amount of Two Hundred Twenty
Thousand Six Hundred Four Dollars and 14 Cents ($220,604.14)
plus further interest as provided by agreement and practice, and
costs as provided by law.
Id. at ¶ 30 & Ad Damnum Cl. In Count IV, which alleged the CASPA claims,
United averred that it was “a contractor that performed construction work in
accordance with a contract with the Defendants,” but it did not specifically
identify the contract. United alleged that its invoices for its work had not
been paid. Id. at ¶¶ 46-52. United continued:
53. As a result of the Defendants’ failure to timely pay Plaintiff
for work performed and invoiced (less the prior amounts paid to
Plaintiff by the Defendants and less the amounts paid to Plaintiff
by USTIF), the Defendants owe interest at one percent (1%) per
month as required by the agreement with Plaintiff, and a
statutory penalty of one percent (1%) per month as required by
the terms of the Pennsylvania Contractor and Subcontractor
Payment Act (“CASPA”)[,] 73 P.S. §501, et[] seq.
54. As a result of the above averments, Plaintiff asserts its right
to receive:
(a) Full payment of its invoiced amounts, less the prior
partial amounts paid to Plaintiff; and,
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(b) Interest at one percent (1%) per month; and,
(c) Statutory penalty at one percent (1%) per month of
the wrongfully withheld amounts as required by the terms of
CASPA; and,
(d) Plaintiff’s reasonable attorney fees as allowed by the
terms of the Pennsylvania Contractor and Subcontractor
Payment Act (“CASPA”)[,] 73 P.S. § 501, et[] seq.
Id. at ¶¶ 53-54.
Golden filed an answer and counter-claim that contended that Golden
paid $100,000 to United under false pretenses. Golden’s Answer, New
Matter, and Countercl. to Fourth Am. Compl., 4/2/12, at 16. At trial, Golden
clarified the scope of that counter-claim through its cross-examination of
Klesic. In his testimony, Klesic acknowledged that the Tank Fund had
accused United of billing for unnecessary work on several projects and was
refusing to reimburse United for that reason. N.T., 5/12-13/15, at 15-17.
Klesic said that he notified Kehm that the Tank Fund was making false
accusations, but not the substance of those accusations. Id. at 43-44. As a
result of the Tank Fund’s assertions, United had cash flow issues and asked
Golden to pay the $100,000. Id. at 40-41. According to Klesic, Kehm was
aware of rumors “throughout the industry” about United’s problems, but
United did not notify Kehm of the details. Id. at 40-41, 44. Klesic denied
telling Kehm that United would repay the $100,000; rather, Klesic insisted
that United would repay whatever amount the Tank Fund reimbursed, as
United would not “get paid twice for the same work.” Id. at 42. In sum,
Golden accused United of inducing it to pay on the false understanding that
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the Tank Fund would provide reimbursement. Golden also contended that
United breached an agreement to return the money. Id.
GKK also filed an answer denying liability. In addition, it filed a cross-
claim against Golden. GKK’s Answer, New Matter, and Cross-cl. to Fourth
Am. Compl., 4/3/12, at ¶¶ 62-67. The cross-claim contended that, under
Golden’s written agreement to sell the property to it, Golden was responsible
for bringing the property into compliance with state regulations. Id. at ¶¶
63, 66. GKK contended that if United were to prevail, GKK was entitled to
indemnification and contribution from Golden. Id. at ¶ 67.
On September 19, 2014, United filed its pretrial statement. United’s
Pretrial Statement, 9/19/14, R. 613a. In that statement, United
summarized the damages it sought on each of its four claims:
Recap of Amounts Claimed (Excluding Costs & Attorney Fees):
Principal through date Initial $180,093.40
Complaint Filed [Count] I
Principal for Continuing 50,287.54
Services [Count] III
TOTAL PRINCIPAL OWED $ 230,380.94
Under Contract
Interest Owed through
November 2014
Contract Rate of 1½% $382,913.66
Counts I & III
CASPA Interest Rate $311,936.98
of 1%
CASPA Penalty of 1% 311,936.98
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Total CASPA Amount $623,873.96
Count IV
Id. at 11, R. 623a. The claimed damages (the sum of the three amounts
shown in bold type) total $1,237,168.56. See id.
On May 11, 2015, prior to trial, the court considered several motions
in limine. One of those was a motion by Golden and GKK to strike United’s
CASPA claim.3 GKK reasoned that because all defendants tendered
payments in various amounts, CASPA did not apply. Golden argued that
because it was not the property’s owner, as defined by CASPA, it was not
liable under CASPA. After reviewing the motion, the trial court stated that it
would “hold this motion in abeyance until the testimony, but suggested to
the parties that this particular issue may be better suited to be argued post-
verdict.” N.T., 5/11/15, at 12, R. 843a. All counsel agreed to “that sort of
bifurcation.” Id. The trial court and the parties have characterized the trial
court’s decision to hold the CASPA motion in abeyance until after trial as a
decision (or a “stipulation”) to postpone consideration of all CASPA issues
until after trial. See, e.g., Trial Ct. Op. at 3; United’s Brief at 30
(characterizing it as a “stipulation”); GKK’s Brief at 8. As a result, no party
submitted any evidence to the jury on any issue under CASPA.
A jury trial was held on the breach of contract issues from May 11 to
May 13, 2015. United’s opening statement stressed that an award of
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3
Not every motion in limine was filed and this appears to have been an oral
motion, but the court, in its ruling, summarized the arguments made by GKK
and Golden. N.T., 5/11/15, at 11.
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interest on any damages for breach of the remediation contract was
important: “The interest is important to plaintiff because it had to borrow
money, and had to pay its employees, its vendors and subcontractors at the
disposal site who provided services for this project. These people have all
been paid by the plaintiff.” N.T., 5/11/15, at 40. The interest that accrued
on the unpaid amounts was developed extensively via testimony and
exhibits.
During trial, the court entered a nonsuit on United’s unjust enrichment
and continuing services claims. United’s counsel closed with the following
argument, in part: “We are asking that you get the Plaintiff paid for the rest
of his work, the rest of the Plaintiff's work that was promised to the Plaintiff,
and award the Plaintiff a requested amount, which is $230,380.94, plus the
interest on the invoices against the Defendants.” N.T., 5/12-13/15, at 213.
On May 13, 2015, the jury found that GKK breached its contract with
United and awarded United $158,000 on its claim against GKK. Jury Verdict,
5/13/15, at 1 (Questions 1-2). The jury also found that the two Golden
companies breached a contract with United and awarded United total
damages of $75,000 on its claim against those companies. Id. at 2
(Questions 5-8).4 Together, these damage awards totaled $233,000. Id. at
2 (Question 9). By awarding this amount, the jury did not award United the
$382,913.66 in contractual interest that United had sought to recover. The
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4
The jury awarded $37,500 against Golden Oil and $37,500 against Kehm
Oil.
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jury found in favor of United on Golden’s counterclaim against it. Id. at 3
(Questions 10-11). The jury also found that Golden was not liable to GKK
“as a result of the sales agreement” between Golden and GKK. Id. at 1
(Question 3).
After the jury reached its verdict, the court held a short argument
regarding GKK’s motion to strike the CASPA claim and then ordered the
parties to file briefs. N.T., 5/12-13/15, at 239-40. No party submitted
additional evidence to the trial court.
On May 22, 2015, United filed a post-trial “motion to complete the
verdict”5 and a brief addressing United’s CASPA claims and GKK’s cross-
claim. United asked the court to award it interest, penalties, and attorneys’
fees under CASPA and argued that it had fulfilled all of the statutory
requirements for that recovery. United’s Post-Trial Brief on CASPA, 5/22/15,
at 3-4. United’s brief presumed that because the jury found breaches of
contract, it was necessary only for it to establish that it fulfilled CASPA’s
other statutory requirements; United did not identify or otherwise discuss
the written or oral agreement that formed the basis for its CASPA claim.
See id. at 2-7. Also, United claimed that the defendants neglected to ask
the jury to resolve GKK’s cross-claim against Golden, and, because the
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5
In light of the hybrid nature of the trial proceedings (jury and non-jury),
the titling of United’s motion is questionable. See Sands v. Andino, 590
A.2d 761, 764 (Pa. Super.) (explaining: “it was procedurally impossible for
a verdict to have been entered in the action against [the defendant] because
the case was tried before a judge sitting without a jury[, and in] such
instances, the trial court renders a decision, not a verdict” (emphases in
original)), appeal denied, 600 A.2d 1259 (Pa. 1991).
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cross-claim was omitted from the jury slip, it “should be treated as a waiver
of Defendants’ jury trial rights with regard to this Cross-Claim.” United’s
Mot. to Complete the Verdict, 5/22/15, at ¶¶ 5-6. United contended that the
testimony and documents necessary for resolving the cross-claim were in
the record and that the court should enter judgment on the cross-claim in
favor of GKK and against Golden. Id. at ¶¶ 8-9.
GKK moved for judgment notwithstanding the verdict or for a new trial
on the basis that Golden was liable to GKK. Golden also filed a motion for
judgment notwithstanding the verdict on the basis that there was no written
contract between Golden and United and United’s invoices could not form
the basis for any contract action.
The court did not rule on any of these post-trial motions within 120
days, but no party praeciped for entry of judgment after 120 days elapsed.
See Pa.R.C.P. 227.4.6 About six months after the jury’s verdict, on
November 17, 2015, United, without leave of court, filed a supplemental
brief on the CASPA issues. Relying on Paragraph 10 of the agreement of
sale, the supplemental brief asserted that Golden was an “owner” of the
property for purposes of CASPA. The brief also asserted that Golden
“retained and exercised the supervisory rights of an owner by approving”
United’s invoices and work, as well as by making a partial payment to United
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6
We note that Pa.R.C.P. 1038(c) states that the “trial judge shall render a
decision within seven days after the conclusion of the trial except in
protracted cases or cases of extraordinary complexity.”
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of $100,000 for the remediation work. United’s Supp. Brief on CASPA,
11/17/15, at 3.
On January 19, 2016, United filed a motion to supplement its CASPA
damages claim to include post-verdict damages, a request for oral
argument, or, alternatively, leave to file a supplemental reply brief to the
post-trial briefs filed by GKK and Golden (which were filed in May of 2015).
On February 2, 2016, Golden objected to the request for additional briefing.
The docket reflects no filings for the next eight months. On October 6,
2016, the court ordered oral argument and directed GKK and Golden to file
briefs in opposition to United’s briefs; GKK and Golden both complied.
On December 1, 2016, in three separate orders, the court denied all
defendants’ post-trial motions, as well as United’s “Motion to Complete the
Verdict.” In a memorandum opinion, the court agreed with Golden that
there was “slight evidence in this case to conclude that Golden [was]
obligated to have payments to [United] pursuant to any written contract.”
Trial Ct.’s Mem. Op., 12/2/16, at 3. The court opined that United’s CASPA
claim against Golden was based on Paragraph 10 of the sales agreement
between Golden and GKK for the property. Id. The court reasoned that
because the jury, in Question 3 on the verdict sheet, found that Golden did
not breach the sales agreement, it “would seem to preclude any finding that
Golden . . . should be liable to [United] under CASPA.” Id. The court also
stated that United failed to prove that Golden qualified as a contractor under
CASPA. Id. at 4-5.
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The trial court did not opine on whether there was contractual support
for United’s CASPA claim against GKK. Instead, it held that the CASPA claim
against GKK failed because the jury awarded United only $158,000, rather
than the $1,237,168.56 that United had demanded prior to trial, meaning
that United was not a “substantially prevailing party.” Trial Ct.’s Mem. Op.,
12/2/16, at 5-6.7 The court also reasoned that the jury’s combined verdict
of $233,000, is “near equivalent” to United’s alleged damages of
$230,380.94. Id. at 5.8 The trial court explained:
Quite apart from the jury’s failure to award other aspects of the
remedy sought by [United], the rejection of the claim for interest
suggests a significant limitation by the jury of [United’s] claim.
[United] had stressed the value of the contractual interest from
its opening remarks, asserting that six years of interest was due
and that “[t]he interest is important because [United] had to
borrow money and pay its employees, its vendors and
subcontractors at the disposal site who provided services for this
project” [(quoting United’s opening argument at N.T., 5/11/15,
at 40)]. Yet, the jury elected not to award interest.
Trial Ct. Op. at 5-6. The court also opined that the jury’s refusal to award
interest to United on its breach of contract claim “repudiated a fundamental
aspect” of that claim, which the court described as “relief more in the nature
____________________________________________
7
As noted above, United claimed total damages of $230,380.94 on its
breach of contract and continuing services claim. United’s Pretrial
Statement, 9/19/14, at 11, R. 623a. United claimed contractual interest of
$382,913.66, and additional CASPA damages of $623,873.96.
8
We note that the damages awarded actually exceeded the requested
amount, because the court granted a non-suit for the continuing services
claim, for which United had requested damages of $50,287.54.
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of a verdict for unjust enrichment.” Id. at 6.9 The court stated that United
did not substantially prevail on that issue. Id. at 6.
On December 12, 2016, United filed another post-trial motion seeking
judgment notwithstanding the verdict on its CASPA claims. In United’s view,
the jury found that Golden was liable for a breach of contract, and it did not
matter if the contract was written or oral. United’s Post-Trial Mot.,
12/12/16, at 5. Thus, United reasoned, the court erred by concluding there
was “slight” evidence of a “written contract.” Id. at 3 (referencing Trial Ct.’s
Mem. Op., 12/2/16, at 3). United contended that the court improperly relied
on Paragraph 10 of the sales agreement between GKK and Golden as a basis
for United’s breach of contract claims against Golden. Id. at 5. Instead,
United insisted, its contract claims were based on GKK’s and Golden’s
representations to United and their “signed approval” of United’s invoices.
Id. United reiterated that the jury’s verdict slip confirms the existence of a
contract between United and GKK and United and Golden. Id. at 5-6.
Golden filed a brief in opposition, contending, among other things, that
United’s December 12, 2016 post-trial motion was untimely. GKK filed a
motion to strike United’s second post-trial motion on that same basis.
Before the court ruled on United’s December 12, 2016 post-trial
motion, United filed a notice of appeal on December 28, 2016 (docketed in
this Court as No. 1956 WDA 2016). On January 3, 2016, the trial court
____________________________________________
9
As previously noted, the court had a granted nonsuit on United’s claim for
unjust enrichment.
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denied United’s second post-trial motion. On January 9, 2016, Golden filed
a cross-appeal (docketed in this Court at No. 44 WDA 2017); GKK filed a
cross-appeal on January 11, 2016 (docketed at No. 82 WDA 2017).
United filed praecipes to have the court enter judgment in favor of
United and against all defendants with respect to the jury’s verdict. The
praecipes did not address the cross-claim for indemnification and
contribution by GKK against Golden; neither GKK nor Golden asked the court
to enter judgment on the cross-claim. The court subsequently entered
judgment as set forth in the praecipes.
On January 26, 2017, United moved to have the court enter judgment
on a verdict supposedly rendered on December 1, 2016, when the court
denied United’s motion to complete the verdict. The court granted the
motion on February 3, 2017, and entered judgment against United and in
favor of all defendants on United’s CASPA claims. The order did not enter
judgment on GKK’s cross-claim for indemnification and contribution against
Golden. United filed an appeal from that judgment on February 15, 2017
(docketed in this Court at No. 294 WDA 2017), and we later consolidated
that appeal with United’s earlier appeal.
On February 27, 2017, the trial court issued another opinion that
substantially repeated the reasoning in its December 1, 2016 memorandum
opinion. With respect to GKK’s motion for judgment notwithstanding the
verdict, the court stated that the jury apparently ruled in favor of United on
the claim against GKK because it “conclud[ed] that Defendants benefitted
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from [United’s] work.” Trial Ct. Op., 2/27/17, at 7. With respect to GKK’s
cross-claim against Golden for indemnification under Paragraph 10 of the
sales agreement, the court stated that the jury’s rejection of that claim in its
verdict may have been based on its conclusion that Golden’s $100,000
payment to United may have satisfied its obligation to GKK. Id. at 7-8.
On April 19, 2017, the trial court issued one more opinion pursuant to
Rule 1925(a) of the Rules of Appellate Procedure. The court incorporated its
opinion of February 27, 2017, but added a “further observation” that it
would be error to rule on a CASPA claim “without first holding a hearing and
arriving at a determination as to whether a defendant’s withholding of
payment was a good faith withholding for perceived deficiencies.” Trial Ct.
Op., 4/19/17, at 3. The court added that the jury’s rejection of United’s
claim for interest “would seem to have answered to a great degree the
question of whether payments had been appropriately withheld.” Id.
On November 28, 2017, recognizing that the parties overlooked
entering judgment on the cross-claim at No. 82 WDA 2017, this Court
ordered the parties to file a praecipe for judgment with the trial court. The
parties complied on November 30, 2017. Under Pa.R.A.P. 905(a)(5), the
previously filed notices of appeal are treated as if filed following the entry of
judgment. The appeals and cross-appeals therefore are now properly before
this Court.
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NOS. 1956 WDA 2016 AND 294 WDA 2017
(UNITED’S APPEAL)
United raises the following issues:
1. Where the jury found that each of the defendants were liable
under a breach of contract theory, did the trial court err in
denying plaintiff CASPA interest, penalties, and attorneys’ fees
based upon its determination that there was “slight evidence” of
a written contract?
2. Did the trial court err in determining that it was an
indispensable predicate to a CASPA claim for interest and
penalties that a claimant be a “substantially prevailing party”?
3. Where the plaintiff recovered all of its contractual,
compensatory damages in the total jury verdict amount of
$233,000, did the trial court err in concluding that the plaintiff
was not a “substantially prevailing party”?
4. Where the parties agreed and stipulated that the CASPA
Claims, including a claim for interest under CASPA, would be
taken up by the trial court after a jury trial, did the trial court err
in conflating CASPA interest with contract interest, and relying
on the absence of a jury verdict for contractual interest as a
basis to determine that plaintiff was not a “substantially
prevailing party”?
5. Where the trial court granted a motion for nonsuit on plaintiffs
unjust enrichment claim and the jury was not charged regarding
such claim, did the trial court err in denying plaintiffs CASPA
Claims by concluding that the jury’s award was “in the nature of
a verdict for unjust enrichment” [(quoting Trial Ct. Op., 12/2/16,
at 6)]?
6. Did the trial court err in failing to award statutorily mandated
CASPA interest, penalties and attorneys’ fees to plaintiff?
United’s Brief at 4.10
____________________________________________
10
Although United raises six issues, it presents three arguments in its
appellate brief. See Pa.R.A.P. 2119 (“The argument shall be divided into as
many parts as there are questions to be argued”).
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All of United’s issues relate to the trial court’s denial of is claims for
post-trial relief under CASPA. The standard of review from an order
resolving a post-trial motion follows:
Our standards of review when considering motions for a
directed verdict and judgment notwithstanding the verdict are
identical. We will reverse a trial court’s grant or denial of a
judgment notwithstanding the verdict only when we find an
abuse of discretion or an error of law that controlled the
outcome of the case. Further, the standard of review for an
appellate court is the same as that for a trial court.
There are two bases upon which a judgment
[notwithstanding the verdict] can be entered; one, the movant is
entitled to judgment as a matter of law and/or two, the evidence
is such that no two reasonable minds could disagree that the
outcome should have been rendered in favor of the movant.
With the first, the court reviews the record and concludes that,
even with all factual inferences decided adverse to the movant,
the law nonetheless requires a verdict in his favor. Whereas with
the second, the court reviews the evidentiary record and
concludes that the evidence was such that a verdict for the
movant was beyond peradventure.
Shiflett v. Lehigh Valley Health Network, Inc., ___ A.3d ___, ___, 2017
WL 5184429, *12 (Pa. Super. 2017) (citation omitted). We add that “the
trial judge is mandated to develop a complete record and to file a
comprehensive opinion detailing the specific reasons relied upon in reaching
his decision.” Ellingsen v. Magsamen, 486 A.2d 456, 458 (Pa. Super.
1984).
In addressing United’s claims, we are faced with a fundamental
problem regarding how this case was tried. United’s claims do not fall within
the normal contemplation of a motion for post-trial relief following a jury
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trial. United never presented its CASPA claims to the jury in this case, and it
therefore is not seeking relief from an adverse jury verdict.
Based on the trial court’s decision to put off a ruling on the defendants’
motion to dismiss the CASPA claims until after the jury trial, United takes
the position that it did not have to present its CASPA claims before the jury,
as all parties stipulated to defer them until post-trial proceedings. Although
we have difficulty interpreting the trial court’s ruling on the motion to
dismiss in that way, there now appears to be agreement among the parties
and the trial court that there was a decision to defer litigation of the CASPA
issues until after the jury trial, and we therefore accede to that common
understanding of what occurred. But that means only that the parties
agreed to waive their right to try the CASPA claims before the jury.
Following that waiver, the CASPA claims still had to be tried somewhere,
but we can find no indication that a trial of the CASPA claims ever occurred
before any factfinder.
The parties apparently contemplated that there would be a trial of the
CASPA claims before the court (after the jury rendered its verdict) —
perhaps on the basis of evidence presented before the jury that would be
supplemented by any additional evidence that the parties presented to the
court after the jury was discharged. But the parties presented no evidence
to the trial court after the jury was discharged; they presented arguments
and briefs, but no evidence. And at no point did the trial court make any
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factual findings or conclusions of law that would comprise a non-jury
decision on the CASPA claims.
CASPA is an intricate statute. We explained its purpose in Prieto
Corp. v. Gambone Const. Co., 100 A.3d 602 (Pa. Super. 2014):
CASPA is a comprehensive statute enacted in 1994 to cure
abuses within the building industry involving payments due from
owners to contractors, contractors to subcontractors, and
subcontractors to other subcontractors. The underlying purpose
of CASPA is to protect contractors and subcontractors and to
encourage fair dealing among parties to a construction contract.
The statute provides rules and deadlines to ensure prompt
payments, to discourage unreasonable withholding of payments,
and to address the matter of progress payments and retainages.
Under circumstances prescribed in the statute, interest, penalty,
attorney fees and litigation expenses may be imposed on an
owner, contractor or subcontractor who fails to make payment to
a contractor or subcontractor in compliance with the statute.
100 A.3d at 607 (citation and brackets omitted). Each of the various
remedies afforded by the statute is subject to specified requirements of
proof. Under Section 5, late payment may entitle a contractor to interest at
a rate of 1% per month (an annual 12% interest rate), but only if the
payment was made at least seven days after delivery of the invoice. 73 P.S.
§ 505; see John B. Conomos, Inc. v. Sun Co., Inc. (R&M), 831 A.2d
696, 710 (Pa. Super. 2003), appeal denied, 845 A.2d 818 (Pa. 2004).
Under Section 12(a), a claimant may recover an additional penalty of 1%
per month (another 12% per year) if the payment was withheld wrongfully,
but such recovery requires a determination that the owner did not withhold
payment in good faith. 73 P.S. § 512(a); see, e.g., Waller Corp. v.
Warren Plaza, Inc., 95 A.3d 313, 319 (Pa. Super. 2014); Ruthrauff, Inc.
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v. Ravin, Inc., 914 A.2d 880, 891 (Pa. Super. 2006), appeal denied, 962
A.2d 1197 (Pa. 2008). Under Section 12(b), the claimant may also recover
attorneys’ fees and expenses, but only if the claimant is a “substantially
prevailing party in any proceeding to recover any payment under this act.”
73 P.S. § 512(b); see, e.g., Imperial Excavating & Paving, LLC v.
Rizzetto Const. Mgmt., Inc., 935 A.2d 557, 564 (Pa. Super. 2007);
Zavatchen v. RHF Holdings, Inc., 907 A.2d 607, 609 (Pa. Super. 2006),
appeal denied, 917 A.2d 315 (Pa. 2007). These are factual issues that
require proof. There are no findings establishing whether they were or were
not proven here.
The trial court apparently tried to dispense with United’s CASPA claims
as a matter of law. With respect to the claim against Golden, it held that the
claim failed because there was “slight evidence” of “any written contract”
between Golden and United. Trial Ct. Op., 2/27/17, at 4. The meaning of
this aspect of the trial court’s decision is unclear. To the extent that the
court held that there could be no recovery absent proof of a “written
contract,” the court erred. Section 2 of CASPA defines a “construction
contract” under which there may be recovery as “[a]n agreement, whether
written or oral, to perform work on any real property located within this
Commonwealth.” 73 P.S. § 502 (emphasis added). A written contract
therefore is unnecessary. The court’s reference to “slight evidence” also is
problematic. Existence of a contract need only be proven by a
preponderance of the evidence, and the trial court’s reference to “slight
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evidence” does not establish that a contract was not proven. We note that
the jury found that Golden breached a contract with United — an aspect of
the verdict that the trial court declined to overturn. Though the court
described that aspect of the verdict as a finding of unjust enrichment, see
Trial Ct. Op. at 6, United’s claim of unjust enrichment had been taken from
the jury by a nonsuit during trial, making the trial court’s description
incorrect. As we hold in the next segment of this memorandum, the jury’s
finding of a contract breach by Golden is supported by the evidence.11
With respect to United’s CASPA claim against GKK, the trial court held
that United could not recover unless it was a “substantially prevailing party”
and said that United’s relatively small recovery in relation to the $1.2 million
United initially claimed meant that United did not have that status. Trial Ct.
Op., 2/27/17, at 6-7. But although a claimant must be a “substantially
prevailing party” to recover attorneys’ fees and expenses under Section
12(b) of CASPA, 73 P.S. § 512(b), that status is not a prerequisite to
recovery of interest or penalties under the statute’s other sections. In
addition, we have explained that “prevailing party” status is not entirely
____________________________________________
11
Golden argues that there was no contract on which United could recover
under CASPA because the statute covers only construction contracts and
United performed its work as a remediation consultant, not a construction
contractor. Golden also argues that Golden was not an “owner” subject to
the statute. Under CASPA, an “owner” is “[a] person who has an interest in
the real property that is improved and who ordered the improvement to be
made”; an “improvement” includes “[t]he erection, alteration, demolition,
excavation, clearing, grading or filling of real property”; and a “construction
contract” is an agreement “to perform work on any real property.” 73 P.S.
§ 702. The trial court made no findings regarding Golden’s status under
these definitions.
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dependent on the amount of damages awarded and is dependent on the trial
court’s exercise of discretion. See J.J. DeLuca Co. v. Toll Naval Assocs.,
56 A.3d 402, 418 (Pa. Super. 2012); Zavatchen v. RHF Holdings, Inc.,
907 A.2d at 610-11. Here, whether United is a prevailing party may depend
on whether it ultimately succeeds on its other CASPA claims.
Because the trial court erred in holding that United’s CASPA claims are
foreclosed as a matter of law, we reverse and remand the CASPA issues for
further proceedings. On remand, the trial court must determine whether
United proved any of its CASPA claims. Because the only evidence
presented by United was that presented to the jury, the court must
determine whether the terms of the parties’ “stipulation” to have the CASPA
claims determined after the jury was discharged permits it to decide those
claims on the basis of the record presented during the jury trial. If not, the
court must determine whether the stipulation permits United to still present
evidence or whether the record is closed.
Once the state of the record is resolved, the court must assess the
evidence to determine whether United is entitled to recover on its claims for
interest, penalties, and attorneys’ fees under the statute. Assessment of
United’s claim for interest requires the trial court to determine the scope of
United’s contracts with Golden and GKK in light of the jury’s verdict
awarding only limited damages against each defendant for breach of
contract; whether payments were made late under Section 5 of CASPA
depends on findings resolving which invoices each defendant was
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contractually obligated to pay, when it was obligated to pay them, and in
what amount. Assessment of the claim to penalties under Section 12(a)
requires consideration of each defendant’s good faith, to the extent that
issue has been preserved by the parties. To address these issues, the trial
court may direct that the parties file proposed findings of fact and
conclusions of law. The court should make findings supporting its decision.
See Ellingsen, 486 A.2d at 458.12
NO. 55 WDA 2017
(GOLDEN’S CROSS-APPEAL)
The verdict sheet asked the jury to decide whether the Golden
defendants, Golden Oil and Kehm Oil, each breached a contract with United.
The jury answered “Yes” to both questions and awarded $37,500 in damages
from each of them, for a total of $75,000.
The Golden defendants raise the following issues:
1. As a matter of fact, is there any evidence to support the jury’s
finding that [United] entered into a contract with Golden Oil
Company and/or Kehm Oil Company?
2. As a matter of law, can Golden Oil Company and Kehm Oil
Company be liable under a contract based purely on solicitous
statements and actions that were meant to be helpful and do not
themselves constitute a contract when there is already a written
contract between other parties covering the transaction?
Golden’s Brief, 55 WDA 2017, 6/16/17, at 5.
____________________________________________
12
In light of our disposition, we need not consider the other issues raised by
United. See Eckell v. Wilson, 597 A.2d 696, 697 (Pa. Super. 1991),
appeal denied, 607 A.2d 253 (Pa. 1992).
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We review an order denying a post-trial motion for judgment
notwithstanding the verdict for an abuse of discretion or error of law.
Shiflett, ___ A.3d at ___, 2017 WL 5184429 at *12. We add that
“[q]uestions of credibility and conflicts in the evidence are for the [fact-
finder] to resolve and the reviewing court should not reweigh the evidence.
If there is any basis upon which the jury could have properly made its
award, the denial of the motion for judgment n.o.v. must be affirmed.”
Braun v. Wal-Mart Stores, Inc., 24 A.3d 875, 891 (Pa. Super. 2011) (per
curiam) (citation omitted), aff’d, 106 A.3d 656 (Pa. 2014), cert. denied,
136 S. Ct. 1512 (2016).
Though framed as two issues, Golden really presents one argument:
that there was no evidence of a contract between United and Golden.
Golden notes that, although United provided Golden with a price quote for
remediation before Golden sold the gas station property to GKK, Golden
never accepted or signed any quote. Rather, after GKK bought the property,
GKK — not Golden — signed the remediation contract with United. Golden
adds that United was not a signatory to its contract to sell the property to
GKK and there was no testimony or evidence that United was a third-party
beneficiary of that sale agreement.
United contends that the jury found that there was an oral contract
based on Kehm’s statements that it was Golden’s responsibility to pay for
remediation and on the $100,000 payment to United that Kehm authorized
under protest. United argues that the prior course of dealing between it and
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Golden shows that it conducted remediation projects at Golden’s request on
a “handshake basis.” United’s Brief, 7/17/17, at 24. United referenced
testimony that Kehm, Golden’s president, orally directed Klesic, United’s
president, to clean up the property and keep GKK happy. Id. at 25 (quoting
N.T., 5/12-13/15, at 5, 71).
Golden responds that none of Kehm’s statements establish an oral
contract. Golden argues that “it is legally impossible to have an oral
agreement that covers the same work as a written agreement,” Golden’s
Brief at 23, and cites Walker v. Saricks, 63 A.2d 9 (Pa. 1949), for the
proposition that “[a]ll preliminary negotiations, conversations and verbal
agreements are merged in and superseded by the subsequent written
contract . . . [which] constitutes the agreement between the parties,
[whose] terms cannot be added to nor subtracted from by parol evidence.”
United, according to Golden, has not established that Pennsylvania law
permits it to have a written contract with GKK and an oral contract with
Golden for the same work.
Generally —
An 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). “Parties may, by subsequent oral agreement, modify a written
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contract which they previously have entered into. The new contract thus
agreed upon is a substitute for the original one in so far as it alters,
modifies, or changes it.” Wagner v. Graziano Const. Co., 136 A.2d 82, 84
(Pa. 1957) (citation omitted); accord Consol. Tile & Slate Co. v. Fox, 189
A.2d 228, 230 (Pa. 1963) (modification of a contract “may be established by
parol evidence showing either an express agreement or actions necessarily
involving the alterations” (citation omitted)).
“It is well settled that in the case of a disputed oral contract, what was
said and done by the parties as well as what was intended by what was said
and done by them are questions of fact for the jury.” Solomon v. Luria,
246 A.2d 435, 438 (Pa. Super. 1968). In Prieto, we addressed whether the
record established an oral contract between the parties and explained:
[T]he question of whether an undisputed set of facts establishes
a contract is a matter of law. It is also well settled that in order
for an enforceable agreement to exist, there must be a “meeting
of the minds,” whereby both parties mutually assent to the same
thing, as evidenced by an offer and its acceptance. It is equally
well established that an offer may be accepted by conduct and
what the parties do pursuant to the offer is germane to show
whether the offer is accepted. In cases involving contracts
wholly or partially composed of oral communications, the precise
content of which are not of record, courts must look to the
surrounding circumstances and course of dealing between the
parties in order to ascertain their intent. We must, therefore,
look to the parties’ course of conduct to ascertain the presence
of a contract.
Prieto, 100 A.3d at 609 (citation omitted).
The plaintiff in Prieto was a general contractor, and the defendant
was a subcontractor specializing in the construction of curbs. Prieto, 100
A.3d at 605. The parties had worked together for eight years on 198 jobs.
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Id. The parties’ usual custom was that the contractor would ask the
subcontractor for a bid, the subcontractor would fax a proposal to the
contractor, the contractor would respond with a purchase order, and the
subcontractor would begin work. Id. Citing this course of conduct, the
subcontractor successfully sued for breach of four oral contracts, and the
contractor appealed to this Court with a challenge to the sufficiency of the
evidence for those oral contracts. Id. at 605, 608-09. We held that the
contractor’s argument that the evidence of an oral contract was deficient
was “belied by Appellant’s partial payment of some of the instant invoices,
thus evidencing acceptance.” Id. at 610.
Our opinion in Prieto discussed a similar factual pattern in Boyle v.
Steiman, 631 A.2d 1025 (Pa. Super. 1993), appeal denied, 649 A.2d 666(Pa. 1994). The plaintiffs in Boyle were the administrators of the estate of
a private investigator. They sued a personal injury attorney for breaching
an oral contract by failing to pay fees for investigating “various personal
injury cases.” Rejecting the defendant’s challenge to the sufficiency of the
evidence of an oral contract, we stated:
Instantly, the evidence presented by the [plaintiffs] was more
than sufficient to meet their burden of proving the existence of
an oral contract between the [investigator] and the [defendant].
The administrators’ testimony reveals that the [defendant] would
contact the [investigator] or the administrators with personal
injury cases and these cases would be investigated and results
of the investigations would be submitted to the [defendant]
together with a bill. The [defendant] then paid every bill
submitted to him. This course of dealing continued until 1983
when the [defendant] began to fail to pay some of the bills
submitted to him by the [investigator]. Thus, the evidence
presented by the administrators was sufficient to meet their
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burden of establishing the existence of an oral contract for
investigative services between the parties. Additionally, the
evidence established a course of dealings between the parties
that proved that the [investigator] expected to be paid for his
investigative services and was not accepting the investigation
assignments on a contingency basis as alleged by the
[defendant]. Finally, the [defendant’s] own testimony establishes
the existence of an oral contract between the parties for
investigative services and that these services were provided by
the [investigator] on all of the disputed bills.
Boyle, 631 A.2d at 1033-34.
Here, the evidence was sufficient to establish a contract between
Golden and United. The parties had a longstanding business relationship
based on informal contacts. Golden’s president, George Kehm,
acknowledged that Golden had responsibility for remediation of the gas
station site, N.T., 5/12/15, at 144, and Golden paid United for some of its
remediation services. The jury could find that this evidence established a
contractual relationship.
It is true that United also contracted with GKK for remediation
services. But that contract stated that, although it was anticipated that the
Tank Fund would reimburse United, the site’s owner was responsible for
expenses not reimbursed by the Tank Fund. Ex. A to Fourth Am. Compl.,
2/29/12. The contract did not specify whether the payor would be United or
Golden. No one disputes that, although United’s contract was with GKK,
United invoiced both GKK and Golden, and each company paid some of
those invoices. Golden’s payments were consistent with a thirty-year history
between Golden and United, including “a lot of work” in which the parties
dealt “on handshakes.” N.T., 5/12/15, at 147; cf. Prieto, 100 A.3d at 609-
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10. Kehm testified that the Tank Fund had reimbursed fifty other
remediation projects, and so he anticipated the Tank Fund would also pay in
this one. Id. at 146. The jury heard the parties’ testimony about their
course of conduct and appeared to reconcile the two contracts by finding
that Golden and GKK each was responsible for a portion of the outstanding
debt to United, thus avoiding duplicate obligations. We cannot say that the
jury erred in reaching this conclusion.
For all these reasons, we conclude that the record was not so clear as
to require us to order entry of judgment notwithstanding the verdict in favor
of Golden and adverse to United, and we affirm the trial court’s decision not
to do so.
NO. 82 WDA 2017
(GKK’S CROSS-APPEAL)
GKK contends that the trial court erred in declining to enter judgment
notwithstanding the verdict on its cross-claim against Golden. Its appeal
presents the following issues:
Whether the trial court erred, as a matter of law, in denying
[GKK’s] post-trial motion for judgment NOV, as the agreement
of sale was clear and unambig[u]ous[.]
Whether the trial court erred as a matter of law, as the
agreement of sale required Golden Oil to indemnify GKK for any
and all work to bring the subject property into compliance with
the applicable DEP UST regulations for site closure[.]
Whether the trial court erred as a matter of law in denying GKK’s
post trial motion for a new trial[.]
GKK’s Brief, 82 WDA 2017, 6/16/17, at 3.
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The standard of review for an order denying a post-trial motion for
judgment notwithstanding the verdict is to determine whether there was an
abuse of discretion or error of law. Shiflett, ___ A.3d at ___, 2017 WL
5184429 at *12.
GKK’s cross-claim sought indemnity from Golden if GKK were held
liable to United:
66. Should [United] prevail on its claim for damages, as set forth
in its Fourth Amended Complaint, which are alleged to have
arisen from bringing the Property into compliance with the [Tank
Fund’s] regulations and other environmental regulations, Golden
Oil Company is liable for any and all amounts alleged to have
been due and owing.
67. GKK . . . ha[s] denied and continue to deny that it is liable to
[United] upon any theory as set forth in its Fourth Amended
Complaint. Should [United] be entitled to recover from [GKK],
although it is denied that [United] is so entitled, then [GKK is]
entitled to indemnification and/or contribution from Golden Oil
Company for the total amounts claimed. . . .
GKK’s Answer, New Matter and Cross-cl. to Fourth Am. Compl., 4/3/12, at
¶¶ 63-67.13 The cross-claim turns on Paragraph 10 of Golden’s agreement
to sell the gas station property to GKK, which said that Golden “shall . . . be
responsible for bringing the Property into compliance with the applicable
Pennsylvania Department of Environmental Protection’s Underground Tank
Storage (UST) regulations for site closure.” Ex. 1 to GKK’s Answer, New
Matter and Cross-cl. to Fourth Am. Compl., 4/3/12.
GKK’s Kamin testified as to his interpretation of Paragraph 10:
____________________________________________
13
The record does not reflect that Golden filed a reply in response to GKK’s
cross-claim, but no party has alleged that Golden’s failure to reply is an
admission that it should indemnify GKK.
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That paragraph is a paragraph which notes what expenses the
seller will be responsible for and the paragraph states that the
seller, that’s Golden Oil Company, shall also be responsible for
bringing the property into compliance with the applicable
Pennsylvania Department of Environmental Protection
Underground Tank Storage (UST) Regulations for site closure.
N.T., 5/12/15, at 89; id. at 90. In GKK’s view, Paragraph 10 is
unambiguous and obligated Golden to be responsible for cleaning up the
property. GKK’s Brief, 82 WDA 2017, at 17, 19.
Golden’s Kehm similarly testified that he believed it was Golden’s
responsibility to pay for cleanup costs. N.T., 5/12/15, at 146-47.
Nevertheless, Golden argues that Paragraph 10 “does not say anything
about Golden Oil making payments to GKK or to [United].” Golden’s Brief,
82 WDA 2017, 7/17/17, at 20. In Golden’s view, the language “vaguely
identifies a responsibility for bringing the property into compliance.” Id.
Golden asserts that “words of ‘general import’ such as unspecific terms
providing for indemnification for ‘all claims’ or ‘any and all liability’ —
including language calling for indemnity ‘to the fullest extent permitted by
law’” are insufficient to establish a claim for indemnification. Id. at 22
(citations omitted). Golden contends that an agreement for indemnification
must express “such an intent beyond doubt.” Id. Golden also argues that
United was GKK’s consultant, Golden entered no contract obligating it to pay
United for unnecessary work, and GKK waived the claim against it by failing
to learn that United was overcharging the Tank Fund. Id. at 21.
The trial court observed that “[t]he jury was presented with the
question of whether [Golden] was liable to GKK as a result of the sales
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agreement and the jury answered that it did not find [Golden] liable and
awarded no damages to GKK as to that claim.” Trial Ct. Op. at 7. The trial
court reasoned:
The indemnification sought by GKK is based upon that sales
agreement. Having found generally that [Golden] was not liable
to GKK under that agreement, the fact that the jury determined
that [Golden] was not liable under the specific indemnification
provision or had satisfied his obligations thereunder would seem
necessarily to follow.
The jury may rationally have concluded that [Golden]’s
payment to [United] satisfied the obligations of [Golden] to GKK.
Id. at 7-8. As noted above, the jury awarded $158,000 to United for its
breach of contract claim against GKK and a total of $75,000 against the two
Golden companies, for an award totaling $233,000. The trial court
concluded that because the verdict did not shock its sense of justice,
judgment notwithstanding the verdict was unwarranted. Id. at 8. We
agree.
GKK is correct that the plain language of Paragraph 10 made Golden
responsible for remediation costs. Following the heading “Seller’s
Expenses,” the paragraph states that Golden “shall . . . be responsible” for
expenses associated with complying with DEP regulations for tank removal.
Golden’s president, as well as one of GKK’s managers, testified that this
phrase meant that Golden was responsible for paying for the cleanup costs.
N.T., 5/12/15, at 89-90, 146-47.
But the jury heard testimony that it was GKK that retained United to
do the remediation work and that once remediation costs climbed above
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United’s original estimate, both GKK and Golden approved payment of
United’s invoices. Just as the evidence permitted the jury to conclude that
Golden’s course of conduct gave rise to contractual obligations to United, so
too could the jury have concluded that the conduct of GKK and Golden after
they signed the sale contract altered their agreement for payment of
United’s work. In addition, the jury heard testimony from the defendants
that some of the invoices that were approved may have not been for work
that was essential to the remediation project and so was outside the scope
of the work covered by Paragraph 10.
In the end, it is evident that the jury rendered a compromise verdict
that held GKK and Golden equally responsible for United’s bills. It heard
testimony that GKK had paid United $17,390.55 and Golden had paid
$100,000 before trial, and it found that the amount that remained owing to
United totaled $233,000; the jury thus priced the total cost of United’s
performance under the contract at approximately $350,000. The jury held
GKK liable for $158,000 of the $233,000 balance due, which would make
GKK’s total payment to United $175,390.55 ($17.390.55 + $150,000). It
held Golden liable for $75,000, which would make Golden’s total payment
$175,000 ($100,000 + $75,000). The jury may have concluded that its
verdict against Golden for $75,000 satisfied the remainder of Golden’s
obligation under Paragraph 10 and that by ordering Golden to pay that
amount directly to United, there was no need to have Golden make a
payment to GKK.
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Compromise verdicts are favored in the law. As we stated in Ely v.
Susquehanna Aquacultures, Inc., 130 A.3d 6 (Pa. Super. 2015), appeal
denied, 136 A.3d 982 (Pa. 2016):
Compromise verdicts are verdicts where the fact-finder is in
doubt as to the defendant’s liability vis-à-vis the plaintiff’s
actions in a given suit but, nevertheless, returns a verdict for the
plaintiff in a lesser amount than it would have if it was free from
doubt. Compromise verdicts are favored in the law. Although
more commonplace in negligence cases tried before juries, such
verdicts are equally appropriate in contract cases tried before
the bench.
130 A.3d at 10-11 (quoting Morin v. Brassington, 871 A.2d 844, 852-53
(Pa. Super. 2005)). Here, the jury’s verdict resulted in GKK receiving less
payment from Golden toward the total cost of United’s work than the
amount to which GKK claims it is entitled. We perceive no basis to disturb
the jury’s compromise verdict. See id. We therefore hold that GKK is not
entitled to relief on this issue.
In sum, at Docket Nos. 1956 WDA 2017 and 294 WDA 2017, we
reverse the order denying United’s motion for post-trial relief, vacate the
court’s decision adverse to United, and remand for further proceedings
consistent with this memorandum. At Docket No. 55 WDA 2017, we affirm
the denial of Golden’s motion for judgment notwithstanding the verdict. At
Docket No. 82 WDA 2017, we affirm the order denying GKK’s motion for
judgment notwithstanding the verdict.
Orders resolving post-trial relief affirmed in part and reversed in part.
Trial court’s decision on United’s CASPA claim vacated. Case remanded for
further proceedings consistent with this opinion. Jurisdiction relinquished.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 12/15/2017
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