Hatchigian, D. v. Stein & Troiani ( 2020 )

J-A15013-20
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
DAVID HATCHIGIAN : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellant :
:
v. :
:
STEIN & TROIANI, A PROFESSIONAL :
CORPORATION :
:
Appellee : No. 3315 EDA 2019
Appeal from the Order Entered October 23, 2019
In the Court of Common Pleas of Montgomery County
Civil Division at No(s): No. 2013-04105
BEFORE: LAZARUS, J., KING, J., and STRASSBURGER, J.*
MEMORANDUM BY KING, J.: FILED OCTOBER 16, 2020
Appellant, David Hatchigian, appeals pro se from the order entered in
the Montgomery County Court of Common Pleas, denying his motion for
sanctions, in this breach of contract dispute. We affirm.
The facts and procedural history of this case are as follows:
…[Appellant] filed a complaint in Philadelphia County
alleging [Appellee] undertook to represent him for an appeal
but failed to provide legal services sufficient to warrant the
$1,000.00 non-refundable minimum fee. [Appellant]
attached to this complaint the engagement letter signed by
both parties which stated that [Appellant] “agreed to give
[Appellee] a $1,000.00 non-refundable retainer/minimum
fee” as a payment to “review the case and possibly assure
[Appellant’s] representation in this matter.” [Appellee]
reviewed [Appellant’s] files and ultimately declined to
represent him in the appeal, due in part to low chance of
success. When [Appellee] subsequently requested the non-
____________________________________________
* Retired Senior Judge assigned to the Superior Court.
J-A15013-20
refundable minimum fee for review of [Appellant’s] case,
[Appellant] responded with a letter requesting that the non-
refundable retainer be returned in full or in part, due to his
feeling that [Appellee] “had not read the file in sufficient
depth.” During oral argument on the motions in limine,
[Appellant] stated on the record that “[t]here is no
misunderstanding that I understood the contract reads
nonrefundable… What I’m saying is I didn’t read it when I
signed the contract.”
[Appellant’s] Philadelphia County action against [Appellee]
was transferred to Montgomery County via Court Order
following [Appellee’s] filing of preliminary objections. The
parties proceeded to arbitration in 2016, where the
arbitration panel made an award in favor of [Appellee].
[Appellant] appealed the arbitration award and filed a
complaint in Montgomery County on April 25, 2016, which
asserted two counts entitled “Breach of Contract” and
“Breach of Fiduciary Duty.”
The parties appeared for a one-day jury trial on August 19,
2019, and after jury selection [but before trial began], the
parties agreed to settle. In an on-the-record exchange, the
terms of the settlement were memorialized, with [Appellant]
agreeing to resolve the case in return for [Appellee] paying
him the $1,000.00 fee and dropping his counterclaim. The
parties also agreed that [Appellee] would draft a release and
that [Appellee] would have no obligation to send a check
until [Appellant] signed and returned to [Appellee] both the
release and order to settle, discontinue, and end the case.
Specifically, [Appellant] accepted the settlement on the
record during the following exchange:
The [c]ourt: We discussed this jury charge, and the
[c]ourt has worked out a resolution on this case; is
that right? I’m asking the parties. [Appellant], I’m
asking you, [Appellant], you agreed to resolving
this case for a thousand-dollar fee that you paid
counsel?
[Appellant]: Yes.
The [c]ourt: And we’ll reduce this to a release and
eventually an order to discontinue and end this case.
-2-
J-A15013-20
Once the release is signed, [Appellee], you’re going to
send him a check for the thousand dollars. That ends
this case.
[Appellant]: Yes.
The [c]ourt: And there will not be any further actions
followed arising out of the cause of action that you
originally filed.
[Appellant]: Correct. I agree.
The [c]ourt: As well, the counterclaim will be dropped.
[Appellee]: Yes, Your Honor. I just have one thing to
say to the semantics. I’m going to send a release and
an order to settle for [Appellant] to sign. Once I
receive both documents, originals, back, that’s when
the check will be sent out.
The [c]ourt: All right. So you understand the check
doesn’t go out until you sign the release.
[Appellant]: Pardon me?
The [c]ourt: The check will not go out until you
sign the release and the order to settle and end
the case.
[Appellant]: Right.
The [c]ourt: Discontinuing the case, both of them.
[Appellant]: After I sign the release –
The [c]ourt: And the order to settle.
[Appellee]: Then I’ll send you a check.
The [c]ourt: Then he’ll send you the check.
[Appellant]: After I sign –
The [c]ourt: So you have to get both of those back to
-3-
J-A15013-20
him.
On August 26, 2019, [Appellee] provided [Appellant] with a
release and order to settle. [Appellant] replied to [Appellee]
on September 3, 2019, stating that he found the release
“not acceptable” and that he would not sign the release until
after he received settlement funds. On September 26,
2019, [Appellant] filed a “Rule 229.1 Motion for Sanctions
for Failure to Deliver Settlement Funds,” alleging that
[Appellee] had wrongfully withheld settlement funds and
requesting that this [c]ourt impose sanctions in the form of
invalidation of the settlement, interest running from the
twenty-first day of the date of delivery of the settlement
funds, and $500 in attorney’s fees and costs associated with
said motion. On October 3, 2019, [Appellee] filed a
response in opposition, alleging that [Appellant] had failed
to meet the terms and conditions of the settlement by failing
to sign and return the release or order as agreed in open
court on August 19, 2019. This [c]ourt denied [Appellant’s]
Motion for Sanctions in an Order dated October 23, 2019.
[Appellant] filed a timely Notice of Appeal on October 24,
2019.
(Trial Court Opinion, filed November 26, 2019, at 1-4) (emphasis in original)
(internal citations and footnote omitted). The court ordered Appellant on
November 1, 2019, to file a concise statement of errors complained of on
appeal, per Pa.R.A.P. 1925(b); Appellant complied on November 6, 2019.1
Appellant presents the following issues on appeal:
Whether any authority exists requiring a settling party to
execute a specific release or a release improperly naming a
nonparty.
Whether the motion to invalidate under subdivision (d)(1)
____________________________________________
1 The order denying Appellant’s motion under Rule 229.1 was a final and
appealable order. See generally Wright v. Lexington & Concord Search
and Abstract LLC, 26 A.3d 1134, 1136 n.1 (Pa.Super. 2011).
-4-
J-A15013-20
of Rule 229.1 should have been granted irrespective of the
court’s decision regarding sanctions under subdivision
(d)(2) and this case reinstated.
Whether the requested sanctions should now be granted
given that all preconditions to payment have now been
satisfied.
(Appellant’s Brief at 4).2
Appellant argues the trial court erred in denying his motion for sanctions
under Pa.R.C.P. 229.1, where Appellee failed to send Appellant the agreed-
upon settlement funds. Appellant contends he refused to sign Appellee’s
original release because it included Appellant’s wife, a non-party to this action.
Appellant maintains Appellee failed to submit a corrected version of the
release to Appellant in a timely fashion, thereby discharging Appellant from
his obligation to execute the release. Appellant insists that the parties’ failure
to execute a finalized release did not form a valid basis for denying sanctions
under Rule 229.1, because Appellee failed to submit a corrected release.
Appellant notes that Appellee failed to execute the signed release Appellant
sent to him on February 25, 2020.
Appellant further asserts that he offered Appellee the alternative option
of waiving the release and “accepting release by discontinuance, i.e.,
accepting a signed Praecipe to ‘Settle, End and Discontinue’ in exchange for
____________________________________________
2 Appellant failed to raise his third issue on appeal in his Rule 1925(b)
statement. Therefore, it is waived. See Commonwealth v. Castillo, 585
Pa. 395, 888 A.2d 775 (2005) (explaining general rule that issues not raised
in Pa.R.A.P. 1925(b) statement will be deemed waived for appellate review).
-5-
J-A15013-20
payment of the settlement funds.” Appellant claims that a discussion
concerning his offer to sign the praecipe in lieu of a modified release was
somehow omitted from the notes of testimony. Alternatively, Appellant
submits the court should have granted his request to invalidate the settlement
agreement, regardless of its decision concerning sanctions, and should have
rescheduled the instant matter for a trial on the merits. Appellant concludes
this Court should grant him sanctions under Rule 229.1, or vacate the trial
court’s October 23, 2019 order and remand for trial. We disagree.
“Our standard of review of a trial court’s grant or denial of a motion to
enforce a settlement agreement is plenary, as the challenge is to the trial
court’s conclusion of law.” Casey v. GAF Corp., 828 A.2d 362, 367
(Pa.Super. 2003), appeal denied, 577 Pa. 684, 844 A.2d 550 (2004). While
we are free to draw our own inferences and reach our own conclusions from
the court’s factual findings, we are bound by those findings of fact when
competent evidence exists to support them. Id.
Rule 229.1 governs delivery of settlement funds and allows sanctions
for failure to deliver funds. Pa.R.C.P. 229.1. The Rule reads in relevant part
as follows:
Rule 229.1. Settlement Funds. Failure to Deliver.
Sanctions
(a) As used in this rule,
“defendant” means a party released from a claim of liability
pursuant to an agreement of settlement;
-6-
J-A15013-20
“plaintiff” means a party who, by execution of a release
pursuant to an agreement of settlement, has agreed to
forego a claim of liability against a defendant. The term
includes a defendant who asserts a counterclaim;
“settlement funds” means any form of monetary exchange
to a plaintiff pursuant to an agreement of settlement, but
not including the annuity or future installment portion of a
structured settlement.
(b) The parties may agree in writing to modify or waive
any of the provisions of this rule.
(c) If a plaintiff and a defendant have entered into an
agreement of settlement, the defendant shall deliver the
settlement funds to the attorney for the plaintiff, or to the
plaintiff if unrepresented, within twenty calendar days from
receipt of an executed release.
* * *
(d) If settlement funds are not delivered to the plaintiff
within the time required by subdivision (c), the plaintiff may
seek to
(1) invalidate the agreement of settlement as permitted by
law, or
(2) impose sanctions on the defendant as provided in
subdivision (e) of this rule.
(e) A plaintiff seeking to impose sanctions on the
defendant shall file an affidavit with the court attesting to
non-payment. The affidavit shall be executed by the
plaintiff’s attorney and be accompanied by
(1) a copy of any document evidencing the terms of the
settlement agreement,
(2) a copy of the executed release,
(3) a copy of a receipt reflecting delivery of the executed
release more than twenty days prior to the date of filing of
the affidavit,
-7-
J-A15013-20
(4) a certification by the attorney of the applicable interest
rate,
(5) the form of order prescribed by subdivision (h), and
(6) a certification by the attorney that the affidavit and
accompanying documents have been served on the
attorneys for all interested parties.
(f) Upon receipt of the affidavit and supporting
documentation required by subdivision (e), the defendant
shall have twenty days to file a response.
(g) If the court finds that the defendant violated
subdivision (c) of this rule and that there is no material
dispute as to the terms of the settlement or the terms of the
release, the court shall impose sanctions in the form of
interest calculated at the rate equal to the prime rate as
listed in the first edition of the Wall Street Journal published
for each calendar year for which the interest is awarded,
plus one percent, not compounded, running from the
twenty-first day to the date of delivery of the settlement
funds, together with reasonable attorneys’ fees incurred in
the preparation of the affidavit.
Pa.R.C.P. 229.1.
Additionally, settlement agreements are contracts, and courts employ
contract principles when interpreting settlement agreements. Kramer v.
Schaeffer, 751 A.2d 241, 245 (Pa.Super. 2000). A fundamental rule in
construing a contract is to ascertain and give effect to the intent of the
contracting parties. Kmart of Pennsylvania, L.P. v. MD Mall Associates,
LLC, 959 A.2d 939, 943 (Pa.Super. 2008), appeal denied, 602 Pa. 667, 980
A.2d 609 (2009).
Instantly, in addressing Appellant’s issues on appeal, the trial court
-8-
J-A15013-20
reasoned:
All…of [Appellant’s] issues complained of on appeal
generally allege error in this [c]ourt’s denial of his “Rule
229.1 Motion for Sanctions for Failure to Deliver Settlement
Funds.” As for his first allegation of error specifically,
[Appellant] questions whether “any authority exists
requiring a settling party to execute a [specific] release…”
Of significance, nowhere in its Order of October 23, 2019
denying the motion for sanctions did this [c]ourt further
order that [Appellant] must execute the specific version of
the release sent by [Appellee]. The scope of the Order was
narrower than [Appellant] appears to allege in his concise
statement, merely denying [Appellant’s] request to impose
sanctions on [Appellee]. In any event, the record above
clearly establishes that [Appellant] agreed to a settlement,
and nowhere – either at trial or in subsequent orders – has
this [c]ourt ordered that Appellant must execute any
particular version of a release.
[Appellant’s] second…issue[] on appeal touch[es] more
directly on the question of whether this [c]ourt was bound
to invalidate the settlement or grant other sanctions. In his
motion for sanctions, [Appellant] specifically cites Rule
229.1 as his authority for such a request. However,
[Appellant’s] allegations of error lack any merit, as this
[c]ourt has no authority to either invalidate the settlement
or impose sanctions under Pa.R.C.P. 229.1.(d) where
[Appellant] has not proven [Appellee] failed to deliver funds
“within the time required by subdivision (c).” In other
words, for Pa.R.C.P. 229.1(d) to apply, [Appellee] must
have failed to deliver settlement funds “within twenty
calendar days from receipt of an executed release.”
Pa.R.C.P. … 229.1(c) (emphasis added). In this case,
[Appellant] himself made it impossible for [Appellee] to
have violated Pa.R.C.P. 229.1(c), as [Appellant] never
returned an executed release to [Appellee]. Thus, this
[c]ourt did not err in finding that [Appellant] was not
entitled to relief under Pa.R.C.P. 229.1(d), as [Appellee] had
no obligation to deliver settlement funds in the absence of
an executed release.
Even outside of the plain language of Pa.R.C.P. 229.1,
[Appellant] had agreed on the record at trial to a procedure
-9-
J-A15013-20
in which [Appellee] would not be required to send
settlement funds until receipt of a signed release:
[Appellee]: Yes, Your Honor. I just have one thing to
say to the semantics. I’m going to send a release and
an order to settle for [Appellant] to sign. Once I
receive both documents, originals, back, that’s when
the check will be sent out.
The [c]ourt: All right. So you understand that the
check doesn’t go out until you sign the release.
[Appellant]: Pardon me?
The [c]ourt: The check will not go out until you
sign the release and the order to settle and end
the case.
[Appellant]: Right.
In this case, [Appellant] agreed to settlement terms and
agreed that [Appellee] would have no obligation to send him
settlement funds until and unless he received a signed
release from [Appellant].3 [Appellant] cannot now argue
that this [c]ourt improperly refused to invalidate the
settlement or impose sanctions, when his own refusal to
execute the release barred him from remedies reserved for
those who have been wrongfully denied settlement funds
only after executing a release. Thus, [Appellant’s] own
actions made Pa.R.C.P. 229.1(d) inapplicable to him, and
this [c]ourt did not err in denying his motion for sanctions.
3 [Appellee] stands ready to release the $1,000.00
retainer fee upon the signing of the general release
and had earlier agreed to strike the wife’s name as a
signor on said release in a conference on October 18,
2019.
(Trial Court Opinion at 6-7) (emphasis in original) (internal citations and
footnote omitted). We agree with the trial court’s analysis. Here, both the
plain language of Pa.R.C.P. 229.1 and Appellant’s on-the-record agreement
- 10 -
J-A15013-20
dictate that Appellant must sign and return a release to Appellee before
Appellee delivers the settlement funds. See Pa.R.C.P. 229.1; Kmart of
Pennsylvania, L.P., supra. At the time Appellant filed his motion for
sanctions, however, Appellant had failed to sign and return the release. Thus,
the court properly denied Appellant’s motion for sanctions. See Casey,
supra. Accordingly, we affirm.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 10/16/20
- 11 -