Kelly, R. v. The Carman Corp. ( 2020 )

J-A01044-20
2020 Pa. Super. 35
RONALD KELLY AND PATRICE KELLY, : IN THE SUPERIOR COURT OF
AS ASSIGNEES OF BBK TAVERN, : PENNSYLVANIA
INC. D/B/A THE PRINCETON :
TAVERN, BY AND THROUGH ITS :
AUTHORIZED REPRESENTATIVE :
JOHN BELL :
:
:
v. : No. 2273 EDA 2018
:
:
THE CARMAN CORPORATION AND :
SERGIUS B. CARMAN :
:
:
APPEAL OF: THE CARMAN :
CORPORATION
Appeal from the Order Entered June 26, 2018
In the Court of Common Pleas of Philadelphia County Civil Division at
No(s): 04825 July Term, 2013
RONALD KELLY AND PATRICE KELLY, : IN THE SUPERIOR COURT OF
AS ASSIGNEES OF BBK TAVERN, : PENNSYLVANIA
INC., D/B/A THE PRINCETON :
TAVERN, BY AND THROUGH ITS :
AUTHORIZED REPRESENTATIVE, :
JOHN BELL :
:
Appellant :
: No. 2274 EDA 2018
:
v. :
:
:
THE CARMAN CORPORATION AND :
SERGIUS B. CARMAN :
Appeal from the Order Entered June 26, 2018
In the Court of Common Pleas of Philadelphia County Civil Division at
No(s): 4825 July Term, 2013
J-A01044-20
BEFORE: NICHOLS, J., MURRAY, J., and COLINS, J.*
OPINION BY COLINS, J.: FILED FEBRUARY 12, 2020
Ronald Kelly and Patrice Kelly (collectively, “the Kellys”), as assignees
of BBK Tavern, Inc. (“BBK”), doing business as The Princeton Tavern, by and
through its authorized representative John Bell, appeal from the order of
June 26, 2018, that: entered a judgment notwithstanding the verdict
(“JNOV”) in favor of The Carman Corporation (“CC”) and Sergius B. Carman
(“Mr. Carman”) (collectively, “Carman”) as to negligence; and ordered a new
trial to determine the amount of damages to be awarded for the sole
remaining claim of breach of contract by CC only. CC cross-appeals from
the same order, which also denied all other issues and claims raised in
Carman’s post-trial motions. We affirm.
CC “was an insurance broker. BBK obtained insurance through [CC]
beginning in 2007. John Bell was the manager of BBK from 2007 through
2010.” Trial Court Opinion (“TCO”), No. 2274 EDA 2018, filed March 6,
2019, at 4 (citations to the record omitted).
[In] 2009, the Kellys . . . filed a civil complaint against numerous
defendants averring that, on May 23, 2007, Michael Siuma, while
driving under the influence of alcohol, collided with the Kellys’
vehicle, thus seriously injuring the driver, Mr. Kelly. The Kellys
averred that, prior to driving, Mr. Siuma consumed alcohol at the
Princeton Tavern and, in fact, he was served alcohol after he was
visibly intoxicated. The Kellys presented negligence claims
against Mr. Siuma with regard to his operation of the motor
vehicle, negligent entrustment claims with regard to [Marie]
____________________________________________
* Retired Senior Judge assigned to the Superior Court.
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Siuma, and claims under “the Dram Shop Act”3 with regard to all
remaining defendants, including BBK[ (“the Dram Shop
Action”).]
3 47 P.S. §§ 4–493, 4–497.
Kelly v. Siuma, 34 A.3d 86, 87 (Pa. Super. 2011) (some footnotes
omitted).
Bell sat with Mr. Carman and showed him the paperwork from
the [D]ram [S]hop [Action] sometime in 2009, not long after
Mr. Bell received the papers. N.T., 2/13/2018, at 175-76. . . .
Mr. Bell mentioned the [D]ram [S]hop [Action] to attorney
David Lehman, who was doing tax work for BBK. [Id.] at 185-
86. Mr. Bell communicated to Mr. Lehman that he had[ not]
heard anything and he wished for Mr. Lehman to call [CC] “as an
attorney to make sure that everything was okay.” [Id.] at 186.
In June of 2010, Mr. Lehman spoke with [Sherry] Sapienza[, an
employee of CC]. N.T., 2/12/2018, at 221. Ms. Sapienza
informed Mr. Lehman that [CC] was in receipt of the formal
complaint against BBK in the [D]ram [S]hop [Action]. [Id.] at
222-23. Mr. Lehman informed Mr. Bell of his communication
with [CC]; Mr. Bell’s understanding was that “everything was
okay, and that the coverage was fine, and that it was being
taken care of.” N.T., 2/13/2018, at 186.
TCO, No. 2274 EDA 2018, filed March 6, 2019, at 4 (some formatting).
“On July 26, 2010, Attorney Gregory Kowalski, who represented the
Kellys in the [D]ram [S]hop [A]ction, spoke with Ms. Sapienza regarding the
unanswered complaint[.]” TCO, No. 2273 EDA 2018, filed May 8, 2019, at
5. Having received no answer from BBK in the Dram Shop Action, “on
August 4, 2010, the Kellys provided an Important Notice of Intent to Enter
Default Judgment against them. On August 25, 2010, the Kellys filed [a]
praecipe[] to enter judgment by default against BBK[.]” Kelly, 34 A.3d at
87.
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“On September 14, 2010, twenty days after the Entry of Default
Judgment, [the Kellys’] counsel faxed to [CC] a filed copy of the Complaint
in [the Dram Shop Action but] did not advise [CC] that a default judgment
had been entered.” Id. at 88. “On or about September 15, 2010, [CC]
forwarded the [Kellys’] Complaint to RCA Insurance Group, the third party
administrator for State National Insurance Company, Inc. [(“SNIC”)], the
insurance company for [BBK[]].” Id. “On September 23, 2010, while
beginning the process of opening a file on behalf of [BBK[]], [RCA Insurance
Group] pulled a copy of the Civil Docket Report and discovered the entry of
the default judgment against [BBK[]].” Id.
On October 8, 2010, BBK[] filed a petition to open the default
judgment . . . In its petition to open, BBK[] . . . specifically
denie[d] serving alcoholic beverages to Michael Siuma while
visibly intoxicated on or about May 23, 2007. . . .
By order entered on December 9, 2010, the trial court denied
BBK[]’s petition to open the default judgment.
Id. at 87-88, 91.
On December 20, 2010, Mr. Bell signed an affidavit12 which
indicated that Mr. Bell did not know of or understand the nature
of the default judgment from the [Dram Shop Action] until late
September 2010. N.T., 2/13/2018, at 227, 239. Mr. Bell’s
affidavit indicated that Mr. Bell was aware that SNIC intended to
withdraw their coverage for the [D]ram [S]hop [Action] through
a declaratory judgment action. Mr. Bell’s affidavit also indicated
that Mr. Bell was aware that BBK would likely be left with no
insurance coverage if the [D]ram [S]hop [Action’s] default
judgment remained and SNIC won their declaratory judgment
action.
12 Defense Exhibit D-26.
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[The Kellys’] expert Barbara Sciotti [later] testified as an
insurance claims professional with respect to the reporting of
insurance claims. N.T., 2/14/2018, at 123. Ms. Sciotti testified
that the injury in the instant case resulted from the stipulated
default judgment entered against BBK. N.T., 2/12/2018, at 172-
73.
* * *
On March 29, 2012, BBK’s attempt to open the default judgment
in the [D]ram [S]hop [Action] was exhausted. [Kelly, 34 A.3d
86 (affirming denial of BBK’s petition to open the default
judgment); Kelly v. Siuma, 42 A.3d 294 (Pa. filed March 29,
2012) (denying petition for allowance of appeal).] On
September 18, 2012, BBK’s insurer, SNIC, obtained a
declaratory judgment that it owed no duty to defend or
indemnify BBK in the [D]ram [S]hop [Action]. According to [the
Kellys’] counsel [in the current action], on November 9, 2012, a
damages hearing was held before the Honorable
Sandra Mazer Moss regarding a stipulated judgment in the
[D]ram [S]hop [A]ction. N.T., 2/13/2018, at 15-17. On
January 10, 2013, the Kellys, as plaintiffs in the [Dram Shop
Action], stipulated with BBK that judgment should be entered
against BBK for $5,000,000 (five-million dollars). On
January 17, 2013, Judge Moss entered a $5,000,000 (five-
million dollar) judgment against BBK in the [Dram Shop Action].
BBK then assigned its rights in the instant matter against
[Carman] to the Kellys. N.T., 2/12/2018, at 15[,] 18.
* * *
On August 2, 2013, [the Kellys] initiated this negligence and
breach of contract action by a writ of summons against [CC],
The Carman Group, Inc., The Carman Group, LLC, and
[Mr.] Carman.
TCO, No. 2274 EDA 2018, filed March 6, 2019, at 1, 3-5 (some footnotes
omitted) (some additional formatting).
On November 5, 2013, the Kellys filed their original complaint in the
instant case, and, on January 9, 2014, they filed an amended complaint,
averring as follows:
19. As a result of the careless, negligence, breach of contract
and other culpable conduct of the Defendants, . . . [SNIC]
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refused to indemnify BBK . . . for liability resulting from the
[Dram Shop Action]. . . .
Count I
Plaintiffs v. Defendants
...
24. The Defendants negligently failed to timely notify [SNIC] of
the [Dram Shop Action] and BBK[’s] request for indemnity and
defense. . . .
27. As a result of the negligence of the Defendants, a default
judgment was entered in the [Dram Shop Action].
28. By reason of the aforesaid carelessness, negligence and/or
recklessness of the Defendants as hereinbefore alleged, BBK . . .
suffered financially to its detriment as the insurance coverage
which it had paid for did not cover indemnity and defense in the
[Dram Shop Action] and forced BBK . . . to enter into a
stipulated judgment with [the Kellys] in the amount of Five
Million Dollars for which it is liable. . . .
Count II
Plaintiffs v. Defendants
...
34. As a direct and proximate result of the Defendants’
aforesaid material breach, BBK . . . suffered financially to its
detriment as the insurance coverage which it had paid for did not
cover indemnity and defense in the [Dram Shop Action] and
forced BBK . . . to enter into a stipulated judgment with [the
Kellys] in the amount of Five Million Dollars for which it is now
liable.
Amended Complaint, 1/9/2014, at ¶¶ 19, 24, 27-28, 34.
[O]n March 23, 2015, the Honorable Marlene Lachman denied
Defendants’ motion for summary judgment which asserted [the
Kellys’] claims were time-barred by the statute of limitations.
. . . The Superior Court granted a motion to quash Defendants’
appeal of Judge Lachman’s denial of summary judgment. Kelly
v. Carman Corporation, No. 1276 EDA 2015, order (Pa.Super.,
July 1, 2015) (order granting application to quash appeal).
TCO, No. 2273 EDA 2018, filed May 8, 2019, at 2 n.4.
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On August 1, 2016, the first trial in the instant case commenced
before the Honorable Kenneth Powell. N.T., 8/1/2016, at 1.
[The Kellys’] counsel, Steven Mezrow, represented to Judge
Powell that Judge Moss found [the Kellys’] $5,000,000 (five-
million dollar) default judgment “reasonable and appropriate.”
[Id.] at 14. [The Kellys’] counsel argued to Judge Powell that
damages were already set in the instant case at $5,000,000
(five-million dollars) due to the judgment from the underlying
case:
MR. MEZOW [sic]: I don’t quite understand. . . . This
case is one in which there has been, as a result of the
conduct of [CC], a judgement [sic] has been entered by a
judge of this jurisdiction in the amount of 5 million dollars.
That is the damages. That is set. Once they find liability,
the damages are what they are. We sited [sic] to you the
Supreme Court case. It is axiomatic that in a common law
tort action, the tortfeasor is liable for all injuries caused by
the negligence or other unlawful conduct.
THE COURT: You are asking for the damages?
MR. MEZOW [sic]: I am going to ask for the Court to
enter it. The jury should say: Is there liability? The
damage is set at 5 million. The Court should say the
damages are a matter of record. It is filed by a judge.
Judge Sandra Mazier [sic] Moss filed a judgement [sic]
against BBK as a result of the conduct of there being no
insurance and a default being entered.
THE COURT: Your case is going to be exactly what they
said it is. Essentially what they didn’t do.
MR. MEZOW [sic]: We agree and we are done. I want to
discuss we think the judgement [sic] of record is the
damages. You don’t now reassess that.
THE COURT: I didn’t understand what you are going to
get damages [sic]. There is a 5 million dollar piece out
there and a default judgement [sic] has been upheld by
the Superior Court. That is entered by another judge of
the same jurisdiction. There are no other damages.
[Id.] at 26-27.
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[Carman] argued to Judge Powell that damages should be
limited to the underlying policy limit of $1,000,000 (one-million
dollars), and that [the Kellys] should not be permitted to
mention $5,000,000 (five-million dollars), let alone recover it.
[Id.] at 29-30. Judge Powell responded “[t]here is no
permission to mention it.” [Id.] at 30. Judge Powell reiterated
that evidence regarding the $5,000,000 (five-million) judgment
would not be allowed in. [Id.] at 32.
* * *
On August 2, 2016, Judge Powell declared a mistrial. N.T.,
8/2/2016, at 3-4.
* * *
Before th[e trial c]ourt, [the Honorable M. Teresa Sarmina,] in
2018, [the Kellys’] counsel indicated that Judge Moss had held a
hearing on the merits regarding the $5,000,000 (five-million
dollar) damages award and had issued an order for judgment
against BBK “for a specific dollar amount” after a hearing on the
merits. N.T., 2/12/2018, at 14. [The Kellys’] counsel indicated
that “[i]t should be a two, three-day trial. Damages are set.”
[Id.] at 15. [Carman’s] counsel countered that “[w]hat [the
Kellys’] counsel represented is not anything as to what occurred.
There is no ruling that damages are set.” [Id.] at 17.
[Carman’s] counsel indicated that Judge Powell ruled that [the
Kellys] could not mention the $5,000,000 (five-million dollar)
judgment, but never said that damages were established. [Id.]
at 21. [Carman’s] counsel indicated that Judge Moss was
unaware that [the] Kelly[s] had released BBK of liability before
the stipulated judgment in the [D]ram [S]hop [Action]. [Id.]
[Carman’s] counsel indicated that Judge Lachman denied
[Carman’s] motion for summary judgment based on several
issues, including statute of limitations, without an opinion. [Id.]
at 23-24.14
14While no opinion was filed when [Carman’s] motion for
summary judgment was denied, the [c]ourt did file an
opinion when the decision was appealed to Superior Court.
...
[The trial c]ourt ruled that the $5,000,000 (five-million dollar)
judgment could not be mentioned in opening statements, and
that the issue would be given more attention by the [c]ourt
later. [Id.] at 25.
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TCO, No. 2274 EDA 2018, filed March 6, 2019, at 2, 5-7 (some additional
formatting).
At a jury trial, Attorney Lehman testified that he notified Sapienza of
the Dram Shop Action prior to the entry of the default judgment. N.T.,
2/12/2018, at 221.
Mr. Carman testified that he “worked as a producer for [CC], soliciting
business and getting new accounts, and became the face of [CC] to these
clients.” TCO, No. 2273 EDA 2018, filed May 8, 2019, at 4 (citing N.T.,
2/13/2018, at 138). He further “testified that if BBK had any insurance
claims they were to call him and he would be the one responsible for
protecting BBK’s interests.” Id. (citing N.T., 2/13/2018, at 138-40).
Bell testified that Mr. “Carman told him that he would be the person to
contact if there were any questions or concerns about insurance or claims”
and that he “started a business relationship with Mr. Carman as a result of
this representation” by buying insurance for BBK “through [CC] beginning in
2007.” Id. (citing N.T., 2/13/2018, at 167, 171-72). Additionally, Bell
testified that “BBK paid premiums [CC], with Mr. Carman telling Mr. Bell
when payments were due and personally picking them up.” Id. (citing N.T.,
2/13/2018, at 172-73). Bell further testified that he notified Sapienza and
Mr. Carman of and went through the paperwork from the Dram Shop Action
with both of them prior to the entry of the default judgment. N.T.,
2/13/2018, at 175-76, 184-85. He continued that he did not learn of the
default judgment from the Dram Shop Action until late September 2010 and
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that, “[u]p until that time, [he] did not know or understand the nature and
meaning of a default judgment.” Id. at 239.
In addition, Attorney Kowalski testified that he notified Sapienza of the
Dram Shop Action, after BBK had failed to answer the complaint and before
filing the praecipe to enter default judgment:
I told her we had litigation pending for a dram shop case, which
is a case against a bar who serves an openly intoxicated patron.
I identified the bar. I identified all the defendants in the case.
I had the complaint in front of me on my computer. I gave her
the docket number, which is the docket number of this case.
I gave her the date of the incident, the date of loss. And
I explained to her that the case had been proceeding for a
significant period of time, that we had deadlines that are
approaching that will be expiring, that the case will move
without . . . their lawyers, and I explained to her the significance
of the injuries.
Id. at 282-83. Moreover, Attorney Kowalski authenticated the
documentation from the Dram Shop Action assigning BBK’s rights in any
litigation against CC to the Kellys. N.T., 2/14/2018, at 6-7. The assignment
documentation was then moved into evidence as Exhibit P-21.
At the close of the Kellys’ case, “[n]onsuit was granted as to
defendants Carman Group Inc. and Carman Group[.]” TCO, No. 2274 EDA
2018, filed March 6, 2019, at 1 n.2 (citing N.T., 2/15/2018, at 6).
The jury found [CC] negligent, and that [CC]’s negligence was a
factual cause of harm to BBK. N.T., 2/16/2018, at 175. The
jury found that [Mr.] Carman was negligent, and that his
negligence was a factual cause of harm to BBK. [Id.] The jury
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also found that there was an oral contract between BBK and
[CC], that [CC] breached this contract, and that this breach was
a cause of harm to BBK. [Id.] at 175-76.[1]
* * *
On February 26, 2018, both [the Kellys] and [Carman] filed
post-trial motions. Additional post-trial motion replies and briefs
were filed . . . [Carman] argued in a post-trial brief that the
$5,000,000 (five-million dollar) stipulated default judgment in
the [D]ram [S]hop [Action] is the harm and injury for the instant
case. [Carman’s] 4/17/2018 Brief in Support of [Carman’s]
Motion for Post-trial Relief at 20.
On June 8, 2018, at a post-trial hearing, [Carman’s] counsel
indicated that [Carman] were not present for and had nothing to
do with the [D]ram [S]hop [Action]. N.T., 6/8/2018, at 8.
[Carman’s] counsel indicated that the underlying case did not
involve [Carman] and that [Carman] “weren’t there, they
weren’t invited to be there.” [Id.] at 11. [Carman’s] counsel
indicated that [Carman] “never had a chance to contest
damages” in the [D]ram [S]hop [Action]. [Id.] at 19.
TCO, No. 2274 EDA 2018, filed March 6, 2019, at 2, 5, 7.
In an order dated June 25, 2018, and entered on June 26, 2018,
“upon consideration of [Carman’s] post-trial motions, and the responses
thereto, th[e trial c]ourt found the negligence claims time-barred by the
statute of limitations[,] entered [JNOV] for [Carman,]” and “ordered a new
trial as to the issue of damages, on the sole remaining claim for breach of
contract.” Id. at 2-3.
On July 23, 2018, CC filed a timely notice of appeal, assigned Docket
Number 2273 EDA 2018. No notice of appeal was filed on behalf of
Mr. Carman. On July 23, 2018, the trial court entered an order to file a
____________________________________________
1 Mr. Carman was not found liable for breach of contract.
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concise statement of errors complained of on appeal pursuant to Pa.R.A.P.
1925(b), and, on August 13, 2018, CC complied.2 On May 8, 2019, the trial
court entered its opinion for No. 2273 EDA 2018.
On July 24, 2018, the Kellys also filed a timely notice of appeal,
assigned Docket Number 2274 EDA 2018. On August 14, 2018, the Kellys
filed the following statement of errors complained of on appeal:
[The Kellys] by and through their attorneys, Pansini & Mezrow
hereby file the following Concise Statement of Matters
Complained of on Appeal in the above matter, pursuant to Pa.
R.A.P. 1925(b):
1. Whether the trial court committed an error of law or
abuse of discretion when it ruled that the instant matter
was a claim for “professional negligence”.
2. Whether the trial court committed an error of law or
abuse of discretion when it ruled that [the Kellys’]
negligence claims in this matter were brought after the
statute of limitations for said claims had expired.
3. Whether the trial court committed an error of law or
abuse of discretion when the [trial c]ourt denied [the
Kellys’] motion to enter judgment in the amount of
$5,000,000.00 against [Carman].
4. Whether the trial court committed an error of law or
abuse of discretion when it ruled that the $5,000,000.00
judgment in the underlying action Kelly, et al. v. BBK
Tavern, Inc., Phila.C.C.P. May Term, 2009, No. 3424 is
____________________________________________
2 In its concise statement of errors complained of on appeal, CC confirmed
that it was the only defendant appealing and that Mr. Carman was not
appealing, stating: “The July 23, 2018 Order was incorrectly directed to
‘Appellants THE CARMAN CORPORATION and SERGIUS B. CARMAN.’
The only Appellant is The Carman Corporation.” Concise Statement of Errors
Complained of on Appeal, 8/13/2018, at 1 n.1 (emphasis in original).
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not the [Kellys’] damages as this is a judgment entered
against them by a court of law.
5. Whether the trial court committed an error of law or
abuse of discretion by failing to follow the coordinate
jurisdiction rule with respect to the Honorable
Kenneth Powell’s ruling that damages are set at
$5,000,000.00.
6. Whether the trial court committed an error of law or
abuse of discretion in failing to enforce the $5,000,000.00
judgment entered by the Honorable Sandra Mazer Moss.
7. Whether the trial court committed an error of law or
abuse of discretion in by [sic] ruling that [Carman] were
entitled to due process where damages were already
entered in a court of law against BBK Tavern, Inc.
The Kellys’ “Statement of Matters Complained of,” 8/14/2018, at 1-2. On
March 6, 2019, the trial court entered its opinion for No. 2274 EDA 2018.
Issues Presented for Our Review
The Kellys3 now present the following issues for our review:
A. Whether the [t]rial [c]ourt erred where this action was
filed within the two-year statute of limitations for negligence
causes of action.
i. Whether as no actual injury was inflicted until [SNIC]
disclaimed coverage in September, 2012, a corresponding
right to institute a suit for damages did not arise until that
time period and thus no negligence cause of action accrued
until September, 2012.
ii. Whether the [t]rial [c]ourt erred in ruling this case is
claim is a “professional negligence” cause of action.
____________________________________________
3 Although this action is before us as a cross-appeal, in their respective
briefs, the Kellys refer to themselves as “Appellants,” and Carman refers to
themselves as “Appellees.” Accordingly, we have chosen to list and to
address the Kellys’ appellate challenges first, even though the Kellys’ appeal
was assigned a later docket number than CC’s appeal. See Pa.R.A.P. 2136.
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iii. Whether the [t]rial [c]ourt erred when it ruled that [the
Kellys’] negligence claims in this matter were brought after
the statute of limitations for said claims had expired in
derogation of the Coordinate Jurisdiction Rule and the Law
of the Case Doctrine.
B. Whether the [t]rial [c]ourt erred as the $5,000,000.00
judgement entered by the court against BBK [] in the [D]ram
[S]hop [A]ction are the damages in the instant action.
i. Whether the [t]rial [c]ourt erred as after the hearing,
Judge Moss communicated and ordered that the five
million dollars was fair and reasonable and the [c]ourt
would enter judgment against BBK[.]
ii. Whether the [t]rial [c]ourt erred when it ruled that the
$5,000,000.00 judgment in the [Dram Shop Action] is not
the [Kellys’] damages as this is a judgment of record
entered against them by a court of law.
iii. Whether the [t]rial [c]ourt erred by failing to follow the
Coordinate Jurisdiction Rule and Rule of the Case Doctrine
with respect to the Honorable Kenneth Powell’s Ruling that
damages are set at $5,000,000.00.
iv. Whether the [trial [c]ourt erred where the $5,000,00.00
judgment fixes the amount of damages in this case.
The Kellys’ Brief at 6-7 (trial court answers omitted).
CC now presents the following issues for our review:
[1]. Whether the [$5,000,000] consent judgment and
assignment of same was invalid?
[2]. Whether [CC was] entitled to JNOV on [the Kellys’] breach
of contract claim because [the Kellys] failed to present any
evidence of damages?
[3]. Whether [CC was] entitled to JNOV because [the Kellys]
failed to establish standing at trial?
[4]. Whether [CC was] entitled to JNOV on [the Kellys’] breach
of contract claim?
[5]. Whether in an alternative to JNOV, [CC was] entitled to a
new trial to present precluded evidence.
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CC’s Brief at 2-4 (trial court’s answers omitted).
Negligence
The Kellys first contend that the trial court improperly granted JNOV
on their negligence cause of action, because the current “action was filed
within the two-year statute of limitations for negligence causes of action[,]”
“[a]s no actual injury was inflicted until [SNIC] disclaimed coverage in
September, 2012, a corresponding right to institute a suit for damages did
not arise until that time period and thus no negligence cause of action
accrued until September, 2012.” The Kellys’ Brief at 30.
Our standards of review when considering motions for a directed
verdict and [JNOV] are identical. We will reverse a trial court’s
grant or denial of [JNOV] 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 [JNOV] 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.
Reott v. Asia Trend, Inc., 7 A.3d 830, 835 (Pa. Super. 2010) (citations
and internal brackets omitted).
Limitations periods are computed from the time the cause of
action accrued. 42 Pa.C.S. § 5502(a). Generally, “a cause of
action accrues, and thus the applicable limitations period begins
to run, when an injury is inflicted.” Wilson v. El-Daief, 600 Pa.
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161, 964 A.2d 354, 361 (2009). “Once a cause of action has
accrued and the prescribed statutory period has run, an injured
party is barred from bringing his cause of action.” Fine[ v.
Checcio], 870 A.2d [850,] 857 [(Pa. 2005)].
In re Risperdal Litigation, No. 22 EAP 2018, 2019 WL 6139189, at *5 (Pa.
November 20, 2019).
In Pennsylvania, a cause of action for negligence is controlled by
the two-year statute of limitations set forth in 42 Pa.C.S[.]
§ 5524(2).[4] . . . [L]ack of knowledge, mistake or
misunderstanding do not toll the running of the statute of
limitations. It is the duty of the party asserting a cause of action
to use all reasonable diligence to properly inform himself of the
facts and circumstances upon which the right of recovery is
based and to institute suit within the prescribed period.
Cappelli v. York Operating Co., 711 A.2d 481, 484–85 (Pa. Super. 1998)
(en banc) (citations and internal brackets and quotation marks omitted).
In the context of an assignee’s action against an insurer for breach of
its obligation to represent in good faith the rights of the insured, the
Supreme Court of Pennsylvania held that “the fact of entry of the judgment
itself against the insured constitutes a real damage to him because of the
potential harm to his credit rating[.]” Gray v. Nationwide Mutual
Insurance Co., 223 A.2d 8, 10 (Pa. 1995). This Court has also found that,
____________________________________________
4 Whether the current cause of action is considered “professional negligence”
or “ordinary negligence” is irrelevant for determining the statute of
limitations, see the Kellys’ Brief at 36-39, as the statute of limitations for
both is two years. See Ford v. Oliver, 176 A.3d 891, 900 n.13 (Pa. Super.
2017); Wachovia Bank, N.A. v. Ferretti, 935 A.2d 565, 571, 574 (Pa.
Super. 2007) (professional negligence action must be commenced within
two-year statute of limitations); Murray v. University of Pennsylvania
Hospital, 490 A.2d 839, 841 (Pa. Super. 1985) (two-year statute of
limitations is applicable to actions for professional negligence).
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where an insurer has denied coverage to a defendant in an underlying case
and the defendant assigned its rights against the insurer to the plaintiff, who
brought an action against the insurer, “the entry of judgment” in the
underlying case is “significant.” Barr v. General Accident Group
Insurance Co. of North America, 520 A.2d 485, 489 (Pa. Super. 1987).
This Court reached that conclusion partially based on Gray’s recognition
“that entry of judgment constitutes a real harm because of the potential
effect on the insured’s credit rating[,]” as well as “factors such as damage to
reputation and loss of business opportunities as real harm suffered by entry
of judgment.” Id.
Additionally, a statute of limitations does not toll while a plaintiff
“pursue[s] post-trial remedies” or “while an appeal of the underlying action
are pending.” Robbins & Seventko Orthopedic Surgeons, Inc. v.
Geisenberger, 674 A.2d 244, 248 (Pa. Super. 1996).
In the current action, judgment was entered against BBK on
August 25, 2010. This entry of judgment constituted real damage to BBK as
soon as it was entered for the reasons given in Gray, 223 A.2d at 10, and
Barr, 520 A.2d at 489. Accordingly, this entry of default judgment was the
moment that injury was inflicted on BBK and that its right to institute and to
maintain a suit arose. Risperdal, No. 22 EAP 2018, 2019 WL 6139189, at
*5; Cappelli, 711 A.2d at 484. The statute of limitations period was not
tolled while the petition to open the default judgment and the appeals
therefrom were pending. Robbins, 674 A.2d at 248.
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Consequently, the two-year statute of limitations period began to run
on August 25, 2010, and, ergo, was ended by August 27, 2012.5 The
current case was initiated by writ of summons on August 2, 2013, almost a
year late. TCO, No. 2274 EDA 2018, filed March 6, 2019, at 1.
However, an exception exists where the statute of limitations will toll if
the potential plaintiff is unable to ascertain or to discover the occurrence of
the injury. See Pocono International Raceway, Inc. v. Pocono
Produce, Inc., 468 A.2d 468 (Pa. 1983).
In Pennsylvania, the occurrence rule is used to determine when
the statute of limitations begins to run . . . An exception to this
rule is the equitable discovery rule which will be applied when
the injured party is unable, despite the exercise of due diligence,
to know of the injury or its cause. Pocono[,] 468 A.2d [at] 471
. . . Lack of knowledge, mistake or misunderstanding, will not
toll the running of the statute. Id.
Robbins, 674 A.2d at 246–47.
According to Bell’s affidavit and testimony, he did not know of the
default judgment in the Dram Shop Action until “late September 2010.”
TCO, No. 2274 EDA 2018, filed March 6, 2019, at 4 (citing Exhibit D-26;
N.T., 2/13/2018, at 227, 239). Even assuming that Bell, as manager of
BBK, was unable, despite the exercise of due diligence, to know of the
default judgment as soon as it occurred and was not made aware of it until
____________________________________________
5 August 25, 2012, was a Saturday; the next business day thereafter was
August 27, 2012. 1 Pa.C.S. § 1908 (“Whenever the last day of any . . .
period shall fall on Saturday or Sunday, . . . such day shall be omitted from
the computation”).
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September 30, 2010, as the latest possible date in September 2010, the
negligence action still would have been barred by the two-year statute of
limitations as of October 1, 2012.6 See Cappelli, 711 A.2d at 484;
Robbins, 674 A.2d at 246-47; TCO, No. 2274 EDA 2018, filed March 6,
2019, at 4 (citing Exhibit D-26; N.T., 2/13/2018, at 191, 227, 239). Again,
the current case was initiated by writ of summons on August 2, 2013, ten
months late. TCO, No. 2274 EDA 2018, filed March 6, 2019, at 1.7
Finally, the Kellys contend that “the trial court erred when it ruled that
[their] negligence claims in this matter were brought after the statute of
limitations for said claims had expired in derogation of the coordinate
jurisdiction rule and the law of the case doctrine[,]” because “[t]wo different
judges of concurrent jurisdiction rejected [Carman’s] legal argument that the
statute of limitation would bar [the Kellys’] claims.” The Kellys’ Brief at 40
(unnecessary capitalization omitted).
____________________________________________
6September 30, 2012, was a Sunday; the next business day thereafter was
October 1, 2012. Id.
7 The trial court had decided to be generous with BBK and find that there
was no proof that Bell and, in turn, BBK knew about the entry of default
judgment against BBK until Bell’s affidavit dated December 20, 2010. TCO,
No. 2274 EDA 2018, filed March 6, 2019, at 15. However, even if this later
date were considered the beginning of the statute of limitations period, the
Kellys’ “cause of action for negligence against [Carman would still have
been] time-barred as of December 20, 2012. Thus, as [the Kellys’] instant
action was commenced in [August] 2013 it is untimely.” Id.
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“The law of the case doctrine is comprised of three rules[.]” Mariner
Chestnut Partners, L.P. v. Lenfest, 152 A.3d 265, 282 (Pa. Super. 2016).
The first two rules are inapplicable to the current appeal, as they concern
proceedings following a prior appeal in same case. According to the
germane third rule, “upon transfer of a matter between trial judges of
coordinate jurisdiction, the transferee trial court may not alter the resolution
of a legal question previously decided by the transferor trial court.” Id.
(quoting Commonwealth v. Starr, 664 A.2d 1326, 1331 (Pa. 1995); citing
Zane v. Friends Hospital, 836 A.2d 25, 29 (Pa. 2003)).
Within this doctrine lies the directive that “judges sitting on the
same court in the same case should not overrule each other’s
decisions,” otherwise known as the “coordinate jurisdiction rule.”
Commonwealth v. Daniels, 628 Pa. 193, 104 A.3d 267, 278
(2014). . . . Only in exceptional circumstances, such as “an
intervening change in the controlling law, a substantial change in
the facts or evidence giving rise to the dispute in the matter, or
where the prior holding was clearly erroneous and would create
a manifest injustice if followed,” may the doctrine be
disregarded. [Starr, 664 A.2d] at 1332.
Id.
The Kellys did not include this claim in their statement of errors
complained of on appeal pursuant to Pa.R.A.P. 1925(b), reproduced above in
its entirety. “Issues not included in the Statement and/or not raised in
accordance with the provisions of this paragraph (b)(4) are waived.”
Pa.R.A.P. 1925(b)(4)(vii). Accordingly, the Kellys’ claim that their cause of
action for negligence is saved by the law of the case doctrine, which includes
the coordinate jurisdiction rule, is waived. See Commonwealth v.
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McCandless, 880 A.2d 1262, 1268 (Pa. Super. 2005) (en banc) (“a law of
the case claim is subject to waiver”).
Consequently, the trial court did not abuse its discretion nor make an
error of law by granting JNOV on the Kelly’s cause of action for negligence
against Carman, as the limitations period had run prior to the initiation of
the current case. Risperdal, No. 22 EAP 2018, 2019 WL 6139189, at *5;
Reott, 7 A.3d at 835.8
____________________________________________
8 CC’s challenge as to whether the Kellys established that CC owed BBK a
duty beyond procuring an insurance policy appears to relate only to the
Kellys’ cause of action for negligence. CC’s Brief at 52-62. The case heavily
relied upon by CC in support thereof, Wisniski v. Brown & Brown
Insurance Co. of PA, 906 A.2d 571 (Pa. Super. 2006), cited in CC’s Brief at
52-53, 57-59, 61-62, involved a negligence action, not a breach of contract.
Id. at 575. Moreover, “a legally recognized duty that the defendant conform
to a standard of care” is an element of a negligence claim and not of a
breach of contract claim. Reason v. Kathryn’s Korner Thrift Shop, 169
A.3d 96, 101 (Pa. Super. 2017) (quoting Estate of Victor Newell v.
Montana West Inc., 154 A.3d 819, 822 (Pa. Super. 2017)); compare id.
(elements of negligence) with Meyer, Darragh, Buckler, Bebenek & Eck,
P.L.L.C. v. Law Firm of Malone Middleman, P.C., 137 A.3d 1247, 1258
(Pa. 2016) (elements of breach of contract).
Preliminarily, we note that this appellate claim was not included in CC’s
statement of questions involved, CC’s Brief at 2-4, and “[n]o question will be
considered unless it is stated in the statement of questions involved or is
fairly suggested thereby.” Pa.R.A.P. 2116(a).
However, even if this question had been included in CC’s statement of
questions involved, as we conclude that the Kellys’ negligence claim was
barred by the statute of limitations, this issue is now moot, and we need not
address it. See CC’s Brief at 52-62.
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Damages
Next, the Kellys contend that that “the $5,000,000.00 judgment
entered by the court against BBK” in the Dram Shop Action constitutes “the
damages in the instant action.” The Kellys’ Brief at 43. The Kellys add that
“the trial court erred by failing to follow the coordinate jurisdiction rule and
rule of the case doctrine with respect to the Honorable Kenneth Powell’s
ruling that damages are set at $5,000,000.” Id. at 56.
The trial court had found that “it was clear error to set damages before
trial based solely on the settlement amount from the [Dram Shop Action]
which involved different parties.” TCO, No. 2274 EDA 2018, filed March 6,
2019, at 9. The trial court additionally believed that it was not bound by
Judge Powell’s “discussions” before the first trial, because “the clear error
exception to the coordinate jurisdiction rule” applies. Id. at 8-9.
[I]t is well-established law that, absent a clear abuse of
discretion by the trial court, appellate courts must not interfere
with the trial court’s authority to grant or deny a new trial.
* * *
Thus, when analyzing a decision by a trial court to grant or deny
a new trial, the proper standard of review, ultimately, is whether
the trial court abused its discretion.
* * *
We must review the court’s alleged mistake and determine
whether the court erred and, if so, whether the error resulted in
prejudice necessitating a new trial. If the alleged mistake
concerned an error of law, we will scrutinize for legal error.
Once we determine whether an error occurred, we must then
determine whether the trial court abused its discretion in ruling
on the request for a new trial.
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ACE American Insurance Co. v. Underwriters at Lloyds and Cos., 939
A.2d 935, 939 (Pa. Super. 2007) (citations omitted).
Preliminarily, pursuant to our review of the record, we find nothing in
the notes of testimony from the first trial indicating that Judge Powell
explicitly stated that damages in the current action must be $5,000,000 or
anything else about damages already being established. First, after
Carman’s counsel contended that it “would be prejudicial to our client should
[the Kellys] be allowed to mention 5 million dollars and let alone recover[,]”
Judge Powell answered, “There is no permission to mention it.” N.T.,
8/1/2016, at 30. Shortly thereafter, Carman’s counsel confirmed that the
Kellys “are not allowed to bring in evidence of the 5 million dollar
judgment[,]” and Judge Powell replied, “Right.” Id. at 32. Accordingly, His
Honor only ruled that the $5,000,000 judgment could not be mentioned
during trial. We find no additional rulings by Judge Powell on the issue of
the applicability of the $5,000,000 default judgment from the Dram Shop
Action to the question of damages in the current action. See generally id.
As there was no prior ruling by a trial judge of coordinate jurisdiction, the
law of the case doctrine is inapplicable. Mariner Chestnut, 152 A.3d at
282.
Assuming the law of the case doctrine were applicable, we would agree
with the trial court, TCO, No. 2274 EDA 2018, filed March 6, 2019, at 8-9,
that the doctrine could be “disregarded” in this case, because the “the prior
holding was clearly erroneous and would create a manifest injustice if
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followed[.]” Mariner Chestnut, 152 A.3d at 282. We find the case of
Brakeman v. Potomac Insurance Co., 344 A.2d 555 (Pa. Super. 1975),
to be instructive. In Brakeman, id. at 555, the appellant was involved in a
motor vehicle collision with David Baker. Baker’s insurance company
asserted that the notice of the collision that it received from Baker was
“unduly late” and “refused to defend the claim against Baker.” Id.
The appellant filed suit against Baker . . . and . . . a verdict in
the sum of Ten Thousand ($10,000.00) Dollars, the exact
amount of the Baker’s insurance coverage, was directed by the
lower court, by agreement of the parties, and without actual
trial. . . . [T]he [insurer] did not participate in that action.
Id. at 555-56. The appellant “brought suit directly against [Baker’s insurer]
to recover the amount of his verdict against the insured.” Id. at 556. After
a jury found that the notice of the collision was not “unduly late,” a verdict
of $10,000 was entered, equal to the amount awarded in the underlying
action. Id. The insurer had “contested . . . the reasonableness of
settlement” in the underlying case, noting that the facts of the accident,
including damages, “were never proven in any judicial forum.” Id. at 559.
Instead, the settlement figure in the underlying matter had been “reached
solely by virtue of the fact that it was the maximum of the insurance
coverage enjoyed by the alleged tortfeasor insured.” Id. On appeal, this
Court held that the question of damage “may be litigated by the insurer in
the instant case.” Id. (citing Martinique Shoes, Inc. v. New York
Progressive Wood Heel Co., 217 A.2d 781 (Pa. Super. 1996)). The
Supreme Court of Pennsylvania affirmed this Court’s decision and agreed
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that the insurer should be allowed to litigate the amount of damages.
Brakeman v. Potomac Insurance Company, 371 A.2d 193 (Pa. 1977).
Analogously, the current action also stems from a motor vehicle
collision, where the injured party – here, the Kellys -- sued those responsible
for the collision – including BBK. Compare Brakeman, 344 A.2d at 555-
56, with TCO, No. 2274 EDA 2018, filed March 6, 2019, at 4 (citing N.T.,
2/14/2018, at 20-21), and Kelly, 34 A.3d at 87. The insurance company of
a defendant in the underlying suit – i.e., BBK’s insurer, SNIC -- likewise
refused to provide coverage after receiving late notice. Compare
Brakeman, 344 A.2d at 555, with TCO, No. 2274 EDA 2018, filed March 6,
2019, at 5, and Kelly, 34 A.3d at 88. Similarly, a judgment -- the
$5,000,000 -- was entered in the underlying litigation by agreement of the
parties to that matter, without an actual trial. Compare Brakeman, 344
A.2d at 556, with TCO, No. 2274 EDA 2018, filed March 6, 2019, at 3 (citing
N.T., 2/12/2018, at 15, 18; N.T., 2/13/2018, at 15-17). Also like
Brakeman, 344 A.2d at 556, no one affiliated with the defendant’s
insurance was a party to the underlying suit, but a second action was
brought to recover the damages awarded in the underlying suit. TCO, No.
2274 EDA 2018, filed March 6, 2019, at 1, 3. Albeit that Brakeman
involved a second lawsuit against an insurance company that refused to
provide coverage, 344 A.2d at 556, while the current appeal involves a
second lawsuit against an insurance broker whose inactions precluded the
insurance company from providing coverage, TCO, No. 2274 EDA 2018, filed
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March 6, 2019, at 1, we find this distinction immaterial, as both cases
involve allegations that a defendant’s choices barred an insured from
receiving an insurance payment. Compare Brakeman, 344 A.2d at 555,
with, e.g., TCO, No. 2274 EDA 2018, filed March 6, 2019, at 3-5 (citing
N.T., 2/12/2018, at 221-23; N.T., 2/13/2018, at 175-76, 184-86), and TCO,
No. 2273 EDA 2018, filed May 8, 2019, at 5 (citing N.T., 2/13/2018, at 280-
89). Brakeman and the current action otherwise continue their parallels as
the defendants in both contested the reasonableness of the judgment
awarded in the underlying case, because the amount of damages was never
proven in any judicial forum but was merely the result of a settlement
agreement that did not involve the party actually being asked to pay the
settlement figure. Brakeman, 344 A.2d at 555-56, 559, with TCO, No.
2274 EDA 2018, filed March 6, 2019, at 3, 6-7 (citing N.T., 8/1/2016, at 29-
30; N.T., 2/12/2018, at 15, 18; N.T., 6/8/2018, at 8, 11, 19).
As the facts and procedural history of Brakeman correspond so
readily to those of the current appeal, we must follow the this Court’s
conclusion of Brakeman, 344 A.2d at 559 (citing Martinique, 217 A.2d
781), and the Pennsylvania Supreme Court’s affirmance thereof, 371 A.2d
192, and we therefore hold that CC must be allowed to litigate the question
of damages.
Consequently, where (1) a judgment had been entered in an
underlying case, (2) the amount of the judgment in the underlying case was
not established by evidence of record, and (3) a second case is initiated
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against a defendant who was not involved in the underlying case but whose
actions or inactions resulted in the denial of insurance coverage to a
defendant in the underlying case, the defendant from the second case has
the right to challenge the amount of damages awarded in the second case;
in other words, the amount of the judgment in the underlying case is not
automatically set as the damages in the second suit. See Brakeman, 344
A.2d at 555-56, 559 (citing Martinique, 217 A.2d 781), aff’d, 371 A.2d
193.9
____________________________________________
9 When the federal court has applied Pennsylvania law to similar factual and
procedural situations, it has reached the same result. See Ultramed, Inc.
v. Beiersdorf-Jobst, Inc., 98 F. Supp. 2d 609, 611 (M.D. Pa. 1998) (“if no
notice is given, an indemnitee has the burden of justifying the payment of
damages by offering against the indemnitor in a second action practically the
same evidence relied on to establish the case against the indemnitee in the
first action, as well as the reasonableness of the settlement” (citing
Martinique, 217 A.2d 781); ergo, where the defendant “received no notice
of the initial action or the settlement,” the “defendant will have the
opportunity to dispute . . . the amount paid”); Daily Express, Inc. v.
Northern Neck Transfer Corp., 490 F. Supp. 1304, 1307 (M.D. Pa. 1980)
(where indemnitee settles a claim against him, “he assumes the risk in an
action against the indemnitor of proving . . . that the amount of settlement
was reasonable” (citing Martinique, 217 A.2d 781)).
“We may use decisions from other jurisdictions ‘for guidance to the degree
we find them useful and not incompatible with Pennsylvania law.’” Newell,
154 A.3d at 823 n.6 (quoting Trach v. Fellin, 817 A.2d 1102, 1115 (Pa.
Super. 2003) (en banc)).
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In conclusion, we find that the trial court did not abuse its discretion
by granting a new trial on the issue of damages on the sole remaining claim
of breach of contract by CC. ACE, 939 A.2d at 939.10
Breach of Contract
CC contends that the Kellys failed to establish any of the elements
required for a breach of contract claim and that the trial court should have
granted JNOV on this cause of action, as well. CC’s Brief at 46-48, 52-57,
63-66.11
It is well-established that three elements are necessary to plead
a cause of action for breach of contract: (1) the existence of a
contract, including its essential terms[;] (2) a breach of the
contract; and, (3) resultant damages. Additionally, it is
____________________________________________
10 As we find that a new trial on damages is warranted, we need not address
CC’s assertion that the trial court in the current case should have held that
the $5,000,000 judgment from the Dram Shop Action was invalid, because it
was “created contemporaneously with [the] assignment[] containing a
release and covenant not to execute.” CC’s Brief at 41. Assuming, for
argument’s sake, that we were to address this question, we would note that
CC has provided us with no precedential Pennsylvania law to support its
allegation that post-assignment, stipulated judgments must be rejected “due
to their tendency to foster fraud and collusion.” Id. at 41-42 (citing cases
from the federal District of New Jersey and from Connecticut and Texas state
courts).
Moreover, any challenge by CC to the excessiveness of a potential damages
award on remand is premature. See id. at 43-44 (citing Ammon v.
McCloskey, 655 A.2d 549 (Pa. 1995); Gray, 223 A.2d 8; Cowden v.
Aetna Casualty and Surety Co., 134 A.2d 223, 229 (Pa. 1957)).
11Our standard of review for the grant or denial of JNOV remains the same.
Reott, 7 A.3d at 835.
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axiomatic that a contract may be manifest orally, in writing, or
as an inference from the acts and conduct of the parties.
Meyer, Darragh, Buckler, Bebenek & Eck, P.L.L.C. v. Law Firm of
Malone Middleman, P.C., 137 A.3d 1247, 1258 (Pa. 2016) (citations and
internal quotation marks omitted).
According to CC: (1) the Kellys provided no evidence or insufficient
evidence of an oral contract between BBK and CC; (2) CC was not required
to provide any service beyond procuring the insurance policy with SNIC,
meaning no breach occurred; and (3) the Kellys failed to present any
evidence of damages. CC’s Brief at 46-48, 52-57, 63-66.
The Existence of a Contract
First, we consider whether the evidence of record established all of the
essential elements of a contract. Meyer, 137 A.3d at 1258.
Before a contract can be found, all of the essential elements of
the contract must exist. Therefore, in determining whether an
agreement is enforceable, we must examine whether both
parties have manifested an intent to be bound by the terms of
the agreement, whether the terms are sufficiently definite, and
whether consideration existed. If all three of these elements
exist, the agreement shall be considered valid and binding.
Cardinale v. R.E. Gas Development LLC, 74 A.3d 136, 140 (Pa. Super.
2013) (quoting Johnston the Florist, Inc. v. TEDCO Construction Corp.,
657 A.2d 511, 516 (Pa. Super. 1995) (en banc)).
Bell testified that Mr. Carman, in his capacity as an agent of CC, told
Bell that he would be the person to contact if there were any questions or
concerns about insurance or claims. TCO, No., 2273 EDA 2018, filed May 8,
2019, at 4 (citing N.T., 2/13/2018, at 167, 171-72). Mr. Carman testified
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that, when a customer had an insurance question or claim, they were to call
him and he would be the one responsible for protecting the customer’s
interests. Id. (citing N.T., 2/13/2018, at 138-40). This evidence
established that the parties orally manifested their intent to agree to the
sufficiently definite terms that Mr. Carman was to be BBK’s direct contact for
insurance claims and that he would protect BBK’s interests after being
notified of a claim. Meyer, 137 A.3d at 1258; Cardinale, 74 A.3d at 140;
TCO, No. 2273 EDA 2018, filed May 8, 2019, at 16.
Additionally, pursuant to our review of the record, we concur with the
trial court that --
[t]here was evidence that consideration was bargained for in the
exchange of this promise. There was testimony [from Bell and
Mr. Carman] that Mr. Carman solicited for new business and
accounts, and offered to serve as the direct and personally
responsible contact at [CC] to gain BBK’s insurance business.
[Bell also testified that] Mr. Carman did gain BBK’s insurance
business, and BBK paid premiums to [CC], with Mr. Carman
telling Mr. Bell when payments were due and picking them up
directly.
TCO, No. 2273 EDA 2018, filed May 8, 2019, at 16; see also id. at 4
(summarizing Bell’s and Mr. Carman’s testimony) (citing N.T., 2/13/2018, at
138-40, 167, 171-73). Having thereby established that consideration
existed, all three of the elements needed to find a contract therefore existed,
and the agreement between BBK and CC was properly considered valid and
binding. Cardinale, 74 A.3d at 140.
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A Breach of the Contract
Next, we consider whether a breach of this contract occurred. Meyer,
137 A.3d at 1258. CC argues that it was not required to provide any service
beyond procuring the insurance policy for BBK with SNIC; it continues that,
since it obtained said policy, it did not breach any contract with BBK. CC’s
Brief at 52-57. We disagree. Both Bell and Mr. Carman testified that
Mr. Carman, while serving as CC’s agent, told Bell that he would handle any
insurance claims for BBK and that he would protect BBK’s interests. N.T.,
2/13/2018, at 138-40, 167, 171-73; TCO, No., 2273 EDA 2018, filed May 8,
2019, at 4. Thus, their agreement went beyond merely obtaining an
insurance policy but also included Carman protecting BBK’s interests after
being notified of a claim. Failure to do so therefore would constitute a
breach of this agreement.
Multiple witnesses testified that they informed CC’s agents about the
Dram Shop Action against BBK: Bell testified that he notified both Sapienza
and Mr. Carman, N.T., 2/13/2018, at 175-76, 184-85; Attorney Lehman
testified that he notified Sapienza, N.T., 2/12/2018, at 221; and Attorney
Kowalski testified that he not only notified Sapienza but provided her with
detailed information about the Dram Shop Action, N.T., 2/13/2018, at 282-
83. As the trial court acknowledged, there was copious testimony that
“Mr. Carman failed to act as the responsible, direct contact at [CC] for BBK’s
insurance claim, and failed to protect BBK’s interests after being notified of
BBK’s claim.” TCO, No. 2273 EDA 2018, filed May 8, 2019, at 16; see, e.g.,
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N.T., 2/13/2018, at 239 (Bell’s testimony about his lack of awareness or
understanding of the default judgment in the Dram Shop Action until late
September 2010), 282-83 (Attorney Kowalski’s testimony about the
progression of the Dram Shop Action); Exhibit D-26 (Bell’s affidavit); see
also Kelly, 34 A.3d at 87-88, 91 (history of entry of default judgment in
Dram Shop Action). Thus, by failing to do what its agent promised it would
do, CC breached its contract with BBK. Meyer, 137 A.3d at 1258.
Resultant Damages
As for the last element of a breach of contract claim, resultant
damages, id., CC urges this Court to determine that “the trial court should
have granted [CC] JNOV on [the Kellys’] breach of contract claim because
[the Kellys] failed to present any evidence of damages.” CC’s Brief at 46.
After a thorough review of the record and the briefs of the parties, we
concur with the findings of the trial court:
There was evidence of real damages from this breach of contract
in the entry of judgment against BBK. [The Kellys], as assignees
bringing an action against an assignor’s insurance broker,
satisfied any requirement to prove real damages with evidence
of the stipulated default judgment entered against BBK. [See
N.T., 2/12/2018, at 15, 18.] While the rulings of a prior judge
. . . prevented [the Kellys] from putting evidence or testimony of
the amount of the $5,000,000 (five-million dollar) stipulated
default judgment before the jury, [the Kellys] have made a
record of damages. [N.T., 8/1/2016, at 30, 32. The Kellys’]
expert Barbara Sciotti testified that BBK suffered a default
judgment in the [D]ram [S]hop [Action]. [N.T., 2/12/2018, at
172-73; N.T., 2/14/2018, at 123. The Kellys] established that
this default judgment resulted from [Carman’s] breach of
contract. Thus, there was a sufficient basis for an inference of
real, actual damages. At the post-trial stage, th[e trial c]ourt
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ordered a new trial, only as to damages, to allow [the Kellys] to
prove their [amount of] damages and to allow [CC] to challenge
[the Kellys’] proof.
TCO, No. 2273 EDA 2018, filed May 8, 2019, at 17.12
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12 We acknowledge that the trial court’s grant of a new trial on damages
relied greatly on Shiflett v. Lehigh Valley Health Network, Inc., 174
A.3d 1066 (Pa. Super. 2017) (“Shiflett I”), which has subsequently been
reversed by the Supreme Court of Pennsylvania. 217 A.3d 225 (Pa. filed
September 26, 2019) (“Shiflett II”).
Nevertheless, we note that the basis for Supreme Court’s reversal in
Shiflett II is inapplicable to the current appeal, because the current appeal
has a different procedural posture to Shiflett II. Unlike in Shiflett II, the
jury never entered a damage award in the current case. Consequently, the
“general-verdict rule” from Halper v. Jewish Family & Children’s
Services, 963 A.2d 1282 (Pa. 2009), discussed in Shiflett II, 217 A.3d at
226, is irrelevant to the current matter, and a new trial on damages hence
has not been waived.
Additionally, the portion of Shiflett I relied upon by the trial court was not
rejected by the Supreme Court in its opinion and is supported by other,
extant case law. The trial court quoted Shiflett I for the principle that “[a]
court has discretion to hold a new trial solely on the issue of damages if: ‘(1)
the issue of damages is not ‘intertwined’ with the issue of liability, and (2) ...
the issue of liability has been ‘fairly determined.’ ” TCO, No. 2273 EDA
2018, filed May 8, 2019, at 17 (quoting Shiflett I, 174 A.3d at 1092). For
this rule, Shiflett I, 174 A.3d at 1092, had quoted Mirabel v. Morales, 57
A.3d 144, 152 (Pa. Super. 2012), and cited to Kiser v. Schulte, 648 A.2d 1,
7–8 (Pa. 1994); Troncatti v. Smereczniak, 235 A.2d 345, 346 (Pa. 1967);
Kraner v. Kraner, 841 A.2d 141, 147 (Pa. Super. 2004); Lambert v. PBI
Industries, 366 A.2d 944, 955–57 (Pa. Super. 1976), all of which are still
valid law. In addition, the trial court referenced Shiflett I for the following
concepts: “‘[L]iability is not intertwined with damages when the question of
damages is readily separable from the issue of liability.’ The liability issue
has been ‘fairly determined’ when liability has been found ‘on clear proof’
under circumstances that would not cause the verdict to be subject to
doubt.” TCO, No. 2273 EDA 2018, filed May 8, 2019, at 17-18 (quoting
Shiflett I, 174 A.3d at 1093). For these concepts, Shiflett I had quoted
Mirabel, 57 A.3d at 152 n.8, and Lambert, 366 A.2d at 956, both of which,
as mentioned above, are still valid law.
(Footnote Continued Next Page)
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* * *
The Kellys thereby established the existence of an oral contract
between BBK and CC, that CC breached said contract, and that damages
resulted from that breach and therefore fulfilled the elements of a cause of
action for breach of contract by CC. Meyer, 137 A.3d at 1258.
Standing
CC next states that the trial court “should have granted” JNOV in its
favor, because the Kellys “failed to establish standing,” maintaining that the
Kellys “failed to present any evidence at trial of the existence of the alleged
assignment.” CC’s Brief at 48, 51.13 CC continues that “[t]he mere fact that
[the Kellys] pleaded that they are the purported assignees of [BBK] and
attached the purported (redacted) Assignment Agreement to their [amended
complaint] only goes to the sufficiency of the pleading.” Id. at 50.14
(Footnote Continued) _______________________
For these reasons, we hold that the trial court’s decision in the instant action
to grant a new trial was not affected by Shiflett II.
13 The Kellys’ counsel does not contest that an effective assignment is
possible, admitting that, in such circumstances, “the assignee stands in the
shoes of the assignor and assumes all of his rights.” CC’s Brief at 49 (citing
Smith v. Cumberland Group, Limited, 687 A.2d 1167, 1172 (Pa. Super.
1997)); see also Bayview Loan Servicing LLC v. Wicker, 163 A.3d 1039,
1045 (Pa. Super. 2017) (“[w]here an assignment is effective, the assignee
stands in the shoes of the assignor and assumes all of his rights”), aff’d, 206
A.3d 474 (Pa. 2019).
14Our standard of review for the grant or denial of JNOV remains the same.
Reott, 7 A.3d at 835.
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However, the Kellys’ counsel from the Dram Shop Action, Attorney
Kowalski, testified in the current action and authenticated the assignment
documentation. N.T., 2/14/2018, at 6-7. The assignment documentation
was then moved into evidence as Exhibit P-21. CC offered no rebuttal
evidence. CC’s assertion that there was no evidence of the assignment thus
is belied by the record.
New Trial as Alternative to JNOV
CC urges this Court to grant a new trial so that it can present
additional evidence. CC’s Brief at 66.15
CC provided no citations to the Rules of Evidence, to case law, or to
any other supporting authority for this issue; CC’s last appellate challenge is
thus waived. Pa.R.A.P. 2119(a) (argument shall include citation of
authorities); see also, e.g., Commonwealth v. Spotz, 18 A.3d 244, 281
n.21 (Pa. 2011) (without a “developed, reasoned, supported, or even
intelligible argument[, t]he matter is waived for lack of development”); In
re Estate of Whitley, 50 A.3d 203, 209 (Pa. Super. 2012) (“The argument
portion of an appellate brief must include a pertinent discussion of the
particular point raised along with discussion and citation of pertinent
authorities[; t]his Court will not consider the merits of an argument which
fails to cite relevant case or statutory authority” (internal citations and
____________________________________________
15Our standard of review for the grant or denial of a new trial remains the
same. ACE, 939 A.2d at 939.
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quotation marks omitted)); Lackner v. Glosser, 892 A.2d 21, 29-30 (Pa.
Super. 2006) (explaining appellant’s arguments must adhere to rules of
appellate procedure, and arguments which are not appropriately developed
are waived on appeal; arguments not appropriately developed include those
where party has failed to cite any authority in support of contention).
Assuming arguendo it were not waived, CC’s contention that the trial
court erred by precluding it from presenting evidence of BBK’s contributory
negligence is moot, because the Kellys’ negligence claims were barred by
the statute of limitations, making contributory negligence no longer an issue.
CC’s Brief at 67. CC next argues that the trial court erred by precluding it
from presenting evidence challenging Bell’s credibility, including evidence of
BBK’s other legal matters, such as proof that BBK did not file tax returns
between 2007 and 2009 and had let its liquor license lapse while continuing
to operate. Id. at 67-68. Nevertheless, even if the trial court erred in
precluding this evidence, the error was harmless, because none of the
elements of the surviving breach of contract claim were established
exclusively through Bell’s testimony. See TCO, No. 2273 EDA 2018, filed
May 8, 2019, at 4, 16 (citing N.T., 2/13/2018, at 138-40) (Mr. Carman
corroborated Bell’s testimony); N.T., 2/12/2018, at 221 (Attorney Lehman
testified that he notified CC, even if Bell’s testimony about notifying CC
himself were disregarded); N.T., 2/13/2018, at 282-83 (Attorney Kowalski
testified that he notified CC, even if Bell’s testimony about notifying CC
himself were disregarded). Finally, CC maintains that the trial court erred by
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precluding it from presenting testimony from SNIC’s coverage counsel and
retained defense counsel, who would have stated that SNIC was willing to
defend BBK and to entertain settlement if the Kellys agreed to set aside the
default judgment and to litigate the case on the merits. CC’s Brief at 68-69.
Nonetheless, CC’s brief is unclear – and this Court cannot discern – what CC
hoped to establish with this testimony16 and, thus, whether it was relevant
and therefore admissible. See Pa.R.E. 402 (“All relevant evidence is
admissible, except as otherwise provided by law. Evidence that is not
relevant is not admissible.”).
Conclusion
In conclusion, the trial court did not err nor abuse its discretion when
it entered JNOV in favor of Carman as to negligence, denied JNOV as to
breach of contract, and ordered a new trial as to damages for the sole
remaining claim of breach of contract by CC. Reott, 7 A.3d at 835; ACE,
939 A.2d at 939. Thus, we affirm the trial court’s order of June 26, 2018.
Order affirmed.
____________________________________________
16While the proposed testimony from SNIC’s counsel could possibly be about
the Kellys’ failure to mitigate damages, CC never explicitly makes that
argument in its brief, and this Court is “neither obliged, nor even particularly
equipped, to develop an argument for a party. To do so places the Court in
the conflicting roles of advocate and neutral arbiter.” Commonwealth v.
Brown, 196 A.3d 130, 185 n.21 (Pa. 2018) (quoting In re S.T.S., Jr., 76
A.3d 24, 42 (Pa. Super. 2013)).
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 2/12/20
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