Sam Mannino Ent. v. Anadarko Petroleum Corp. ( 2021 )

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
SAM MANNINO ENTERPRISES, INC. AND IN THE SUPERIOR COURT
SAM MANNINO ENTERPRISES, LLC OF PENNSYLVANIA
D/B/A INVESTORS FIRST CAPITAL
Appellants
v.
ANADARKO PETROLEUM CORPORATION,
INC.
Appellee No. 1123 MDA 2020
Appeal from the Order Entered July 21, 2020
In the Court of Common Pleas of Centre County
Civil Division at No: 2016-4245
BEFORE: STABILE, J., KUNSELMAN, J., and STEVENS, P.J.E.*
MEMORANDUM BY STABILE, J.: FILED: OCTOBER 29, 2021
Appellants, Sam Mannino Enterprises, Inc. and Sam Mannino
Enterprises LLC, d/b/a Investors First Capital, appeal from the July 21, 2020
order entering summary judgment in favor of Appellee, Andarko Petroleum
Corporation, Inc (“Andarko”). We affirm.
The trial court found the following facts:
This matter originates from [Andarko’s] decision in 2015 to
establish a rail project in Pennsylvania in order to ship waste water
used in hydraulic fracturing (“fracking”) to treatment facilities in
Ohio, and subsequently return the water for reuse via the same
method. [Appellants] owned approximately thirty (30) tanker rail
cars and sought to lease these tankers to [Andarko]. [Appellants’]
contact with [Andarko] was Chad Bruinooge, and the two parties
conducted preliminary negotiations over e-mail and phone
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* Former Justice specially assigned to the Superior Court.
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beginning in spring of 2015. In the first correspondence between
the parties in April 2015, Bruinooge explained to [Appellants] that
rail leases are ‘very difficult to sell to upper management’ and that
[Andarko] ‘may not make a deal.’ In a September 3, 2015, email,
Bruinooge writes ‘…let’s discuss the possibility of reaching a
potential deal … we are very close to presenting this to upper
management ….’ In an email to [Appellants] dated October 5 th,
2015, Bruinooge states ‘I have received the go ahead to move
forward setting up our rail program …’ and that Bruinooge needed
a formal proposal from [Appellants]. [Sam Mannino (“Mannino”),
principal of Appellants], responded by stating he would provide a
proposal as soon as possible, and offered to let Bruinooge inspect
the rail cars. [Mannino] sent an abbreviated term sheet to
Bruinooge, which [Mannino] later conceded in this litigation did
not contain detail sufficient to make it a formal lease. [Mannino]
corresponded with Andarko’s local representative, Abbie Allison,
who instructed [Mannino] that it needed to execute a Master
Services Agreement (‘MSA’), as all entities doing business were
required to do, before proceeding with the lease agreement. On
October 19, 2015, [Mannino] had an email exchange with Ms.
Allison about the prospect of becoming an approved vendor in
Andarko’s system, and that [Mannino] knew becoming an
approved vendor was an issue separate and apart from the lease
agreement. On October 20th, 2015, Bruinooge traveled to Altoona
to inspect the rail cars with [Mannino] and Larry Salone (‘Salone’),
during which Bruinooge allegedly stated to Salone that he would
take the rail cars
Bruinooge stated in an email to Salone on October 22 nd,
2015, ‘[o]nce all of the setup is done getting Sam [Mannino] into
our system and able to do work we will be able to execute the
contract through the supply chain group.’ On November 9th,
2015, [Andarko] requested that [Appellants] execute the MSA;
however, on November 10th [Appellants’] agent Keith McClellan
emailed Ms. Allison and Erin Kee, requesting significant changes
to the MSA. Bruinooge sent another email on December 3 rd,
stating that he now had permission to execute all contracts related
to setting up [Andarko’s] rail program. On December 14th,
[Mannino] emailed Bruinooge, the relevant portion of the
exchange occurred as follows:
[t]he first group of approx. 20 cars is ready for you
now and the balance will be ready in early January.
However, we need to get the agreements in place
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first. Please let me know how we can move this
process forward so we can wrap this lease up
before the end of the year.
[Appellants] submitted [their] version of the MSA on December
22nd, acknowledging that it was a separate agreement from the
potential lease agreement. Mr. McClellan requested a combined
version of both agreements, with the hope to finalize the deal that
day, from [Andarko] on January 8th, 2016, and the parties
acknowledge this was the last proposal exchanged by either party.
On January 14th, 2016, Bruinooge responded to an email from
[Mannino] stating that corporate management was uncomfortable
with the negotiation positions taken by [Appellants], and that the
commercial team would further evaluate [Mannino’s] company
before executing any lease contract. On March 8th, 2016,
Bruinooge informed [Mannino] in an email that [Andarko] would
not be engaging in business with [Appellants] at the present time,
effectively ending all negotiations. In response to this rejection,
[Mannino] emailed [Andarko’s] agent Erin Kee, alleging that
[Appellants] had spent approximately $200,000 refurbishing the
rail cars for [Andarko], in addition to asserting claims for breach
of contract and suggesting she review the emails and respond to
him with a settlement offer. It is indisputable that the repair work
referenced was related to damage the cars received while in the
care of a prior lessee, Rocky Mountain Transportation, and that
such repairs were necessary in order to lease the cars to anyone,
including [Andarko]. It is also undisputed that [Appellants were
the parties] who leased the rail cars in question to Rocky Mountain
Transportation, and also filed litigation against the same to
recover the cost of repairs for said damage. Ms. Kee responded
to [Mannino] on March 10th, 2016, reiterating that an agreement
was never reached, and that [Mannino] was aware that any final
agreement would come from management and not Bruinooge or
any other agent.
Trial Court Opinion, 7/17/20, at 1-4 (record citations omitted; emphasis in
original).
Appellants filed their complaint on November 11, 2016. The trial court
consolidated this case with Centre County docket number 2017-3105 (we
dispose of the companion appeal at number 3105 at appellate docket number
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1124 MDA 2020). Andarko answered Appellants’ complaint on April 11, 2017.
The parties proceeded through discovery and Andarko filed a motion for
summary judgment on February 14, 2020. The trial court granted that motion
on July 17, 2020. This timely appeal followed.
Appellants raise four assertions of error:
I. Did the trial court erred [sic] in finding that there was no
issue of material fact as to whether an implied contract
existed between the parties, where plain established facts
showing there was a meeting of the minds on the key
elements of a rail lease existed[?]
II. Did the court err in finding that there was no genuine issue
of material fact as to whether [Appellants] reasonably relied
upon a promise made by [Andarko]?
III. Did the court err in granting [Andarko’s] motion for
summary judgment when it did not view presented facts in
a light most favorable to [Appellants]?
IV. Did the court err in finding that there was no issue of
material fact as to whether Chad Bruinooge, agent of
[Andarko], had authority to bind or obligate [Andarko], or
whether [Andarko] acted reasonably upon relying on Chad
Bruinooge’s authority to obligate or bind [Andarko] to a
contract with [Appellants]?
Appellants’ Brief at 10.
Appellants’ assertions of error challenge the trial court’s entry of
summary judgment. Rule 1035.2 of the Pennsylvania Rules of Civil Procedure
authorizes a motion for summary judgment “whenever there is no genuine
issue of any material fact as to a necessary element of the cause of action or
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defense which could be established by additional discovery or expert report.”
Pa.R.C.P. No. 1035.2.1
When considering a motion for summary judgment, the trial
court must take all facts of record and reasonable inferences
therefrom in a light most favorable to the non-moving party. In
so doing, the trial court must resolve all doubts as to the existence
of a genuine issue of material fact against the moving party, and,
thus, may only grant summary judgment “where the right to such
judgment is clear and free from all doubt. On appellate review,
then,
an appellate court may reverse a grant of summary
judgment if there has been an error of law or an abuse
of discretion. But the issue as to whether there are no
genuine issues as to any material fact presents a
question of law, and therefore, on that question our
standard of review is de novo. This means we need
not defer to the determinations made by the lower
tribunals.
To the extent that this Court must resolve a question of law, we
shall review the grant of summary judgment in the context of the
entire record.
Summers v. Certainteed Corp., 997 A.2d 1152, 1159 (Pa. 2010) (internal
citations and quotation marks omitted). An issue of fact is material where its
resolution could affect the outcome of the case. Pielago v. Orwig, 151 A.3d
608, 610 (Pa. Super. 2016). The trial court should not permit an issue to go
to the jury if the verdict would require “conjecture, surmise, guess or
speculation.” Davis v. Wright, 156 A.3d 1261, 1273 (Pa. Super. 2017). “A
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1 Appellant did not respond to the motion. The trial court disposed of
Andarko’s motion on the merits rather than enter summary judgment under
Rule 1035.3(d) (“Summary judgment may be entered against a party who
does not respond.”).
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plaintiff cannot survive summary judgment when mere speculation would be
required for the jury to find in plaintiff’s favor.” Id.First, Appellants argue there is a material dispute of fact as to whether
the parties formed a contract implied in fact. “The consideration necessary to
establish a valid contract, express or implied in fact, must be an act, a
forbearance, or a return promise, bargained for and given in exchange for the
promise.” Thomas v. R. J. Reynolds Tobacco Co., 38 A.2d 61, 63 (Pa.
1944).2
A contract implied in fact can be found by looking to the
surrounding facts of the parties' dealings. Offer and acceptance
need not be identifiable and the moment of formation need not be
pinpointed. Restatement (Second) of Contracts § 22(2) (1981).
Implied contracts ... arise under circumstances which, according
to the ordinary course of dealing and the common understanding
of men, show a mutual intention to contract.
Ingrassia Const. Co. v. Walsh, 486 A.2d 478, 483 (Pa. Super. 1984).
Regarding the evidence of mutual intention, we discern no error in the
trial court’s decision. As referenced above, Bruinooge sent an email on April
27, 2015—early in the negotiations—that final assent to a contract would
come, if at all, from Andarko’s corporate management, and that long term rail
leases were “difficult to sell to upper management.” Andarko’s Motion for
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2 We note that Thomas addressed contracts implied in fact and the distinct
doctrine of contracts implied in law. Appellants have alleged a contract implied
in fact, and we confine our analysis accordingly. In their brief, Appellants
appear to blur the distinction between these two doctrines. Appellant’s Brief
at 26.
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Summary Judgment, 2/14/20, at Appendix p. 244. In a September 3, 2015,
Bruinooge reiterated that he was “very close to presenting this option to upper
management,” thus confirming that upper management would make the final
decision. Id. at Appendix p. 253. On October 5, 2015, Bruinooge emailed
Mannino that he “received the go ahead to move forward setting up our rail
program,” and that he needed a “formal proposal” from Appellants. Id. at
Appendix p. 293. On October 12, 2015, Bruinooge referred Mannino to Abbie
Allison, Andarko’s supply chain representative, to work with Mannino on
setting up a Master Services Agreement (“MSA”), which was a precursor to
entering a lease agreement. Id. at ¶ 52 and Appendix p. 309.
While Bruinooge personally inspected the rail cars on October 20, 2015,
and allegedly said, “I’ll take them,” subsequent emails from Mannino clearly
indicate his understanding that the parties’ contract was not finalized. A
November 10, 2015 email exchange between Allison and Mannino reveals
Allision explaining the need for execution of the MSA prior to execution of the
lease agreement, and Mannino responding that he would “start the process.”
Id. at Appendix, p. 363. Later that day, Appellants requested revisions to the
MSA. Id. at Appendix, p. 366. Bruinooge emailed Mannino on November 21,
2015, to ask, “how are things progressing?” Id. at Appendix p. 391. In that
same email, Bruinooge posed a question that once again confirmed that he
was not the decision maker: “Whose shop is the paperwork in now?” Id.Bruinooge emailed Mannino on December 3, 2015, that he received
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permission to execute contracts, and that Andarko would begin site
preparation. Id. at Appendix p. 393. But the contracts were never executed.
In Mannino’s December 14, 2015 email to Bruinooge he asked what he could
do to finalize the lease agreement before the end of the year. Id. at Appendix
p. 395-96. The parties continued to exchange revised proposals until
Bruinooge’s March 8 2016 email to Mannino stating that Andarko’s upper
management would not proceed with the lease agreement. Id. at Appendix
p. 433.
This record, construed in a light most favorable to Appellants as the
nonmoving party, does not reflect the mutual intention necessary to establish
an implied contract. Rather, the record demonstrates that the parties were
working toward the formation of a written lease agreement and would proceed
with Andarko’s lease of railcars from Appellant only when the required MSA
and written lease agreement were executed. Andarko terminated negotiations
before the written agreements were executed, and therefore no contract was
formed.3 For the foregoing reasons, we conclude the trial court did not err in
finding no material issue of fact as to the formation of an implied contract.
In its second argument, Appellants claim the trial court erred in granting
summary judgment on their claim of promissory estoppel.
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3 Given our conclusion that no material issue of fact exists as to the formation
of an implied contract, we need not address Andarko’s reliance on the Statute
of Frauds (13 Pa.C.S.A. § 2A201) to bar an implied contract for the lease of
goods.
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The doctrine of promissory estoppel permits a claimant to
enforce a promise in the absence of consideration. To maintain a
promissory estoppel action a claimant must aver the following
elements: (1) the promisor made a promise that [it] should have
reasonably expected would induce action or forbearance on the
part of the promisee; (2) the promisee actually took action or
refrained from taking action in reliance on the promise; and (3)
injustice can be avoided only by enforcing the promise.
Sullivan v. Chartwell Inv. Partners, LP, 873 A.2d 710, 717–18 (Pa. Super.
2005); see also, Restatement (Second) of Contracts, § 90.
Appellants base this argument on emails from Bruinooge, and therefore
they argue that Bruinooge was an agent with authority to bind Andarko with
his promises.4
An agency relationship may be created by any of the
following: (1) express authority, (2) implied authority, (3)
apparent authority, and/or (4) authority by estoppel. […]
Apparent agency exists where the principal, by word or conduct,
causes people with whom the alleged agent deals to believe that
the principal has granted the agent authority to act. […].
The basic elements of agency are the manifestation by the
principal that the agent shall act for him, the agent’s acceptance
of the undertaking and the understanding of the parties that the
principal is to be in control of the undertaking. The creation of an
agency relationship requires no special formalities. The existence
of an agency relationship is a question of fact. The party asserting
the existence of an agency relationship bears the burden of
proving it by a fair preponderance of the evidence. In establishing
agency, one need not furnish direct proof of specific authority,
provided it can be inferred from the facts that at least an implied
intention to create the relationship of principal and agent existed.
[…]
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4 Appellants have blended their second and fourth arguments into one. We
conduct our analysis accordingly.
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Where an agent exceeds his authority, and this is known or
should be known by the principal, an agency may be created by
apparent authority as to such acts; but in such instances the
relation of the principal and agent is already established for some
purposes.
V-Tech Servs., Inc. v. St., 72 A.3d 270, 278–79 (Pa. Super. 2013).
“Although a third party cannot rely on the apparent authority of an agent to
bind a principal if he has knowledge of the limits of the agent’s authority,
without such actual knowledge, the third party must exercise only reasonable
diligence to ascertain the agent’s authority.” Bolus v. United Penn Bank,
525 A.2d 1215, 1222 (Pa. Super. 1987).
Appellants’ promissory estoppel claim rests on their assertions that,
given Bruinooge’s statement that Andarko would move forward with the lease
agreement, Appellants did not pursue other opportunities to lease their tanker
cars while the Andarko negotiations were ongoing. Appellants do not claim
they received and turned down any requests from any other party to lease
their rail cars, they simply did not pursue opportunities. As explained above,
the parties formed no express or implied contract. Appellants were therefore
free to pursue other leasing opportunities but received no specific proposals
and chose not to pursue any in hope that the Andarko negotiations would
come to fruition. Whether Appellants could have pursued and consummated
a lease with a third party is a matter of speculation, and therefore not a basis
upon which Appellants can avoid entry of summary judgment.
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The record also reflects that Mannino emailed Andarko upon termination
of negotiations that Appellant’s spent almost $200,000.00 refurbishing rail
cars in anticipation of the lease agreement. Appellant’s Motion for Summary
Judgment, 2/14/20, at ¶ 83 and Appendix p. 433. Mannino acknowledged at
his deposition that the repairs to the rail cars needed to be done before they
could be leased to any lessee. Id. at ¶ 84 and Appendix p 141. Mannino
testified that the repairs were necessary due to damage caused by a prior
lessee, with whom Appellants were in litigation. Id. at Appendix p. 149-52.
In any event, the repairs were not a change in position in reliance on a promise
from Bruinooge and/or Andarko.
Appellants’ assertion of Bruinooge’s agency, which rests on his apparent
authority, also fails. An assertion of apparent authority fails where the party
asserting agency had actual knowledge of the alleged agent’s lack of authority.
Bolus, 525 A.2d at 1222. As we explained in detail above, the record reflects
that Appellants had actual knowledge from very early in the negotiations that
approval of a deal would come from Andarko’s corporate management and
not Bruinooge. Even after Bruinooge wrote, on December 3, 2015, that he
received permission to execute the contracts, Mannino’s emails reveal his
understanding that Bruinooge made no binding promises on behalf of
Andarko.
To summarize the foregoing, Appellants’ agency claim fails, as
Appellants had actual knowledge of Bruinooge’s lack of authority. Attendant
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to that, there is nothing in the record to support a finding that Andarko made
a promise on which Appellants could have reasonably relied. Further, there is
no evidence that Appellants took action or refrained from taking action based
on any promise or perceived promise from Andarko. The trial court did not
err in finding no material issue of fact as to Appellants’ promissory estoppel
claim.
Appellants’ remaining argument is that the trial court failed to view the
facts in the light most favorable to them, as the nonmoving party. Appellants
did not develop this argument in a specific section of their brief. Rather, it
was interspersed throughout the brief. Likewise, we have explained
throughout this memorandum our reasons for finding no trial court error.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 10/29/2021
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