Eichelberger, N. v. Azemar, M.

J-A17027-17
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
NEIL EICHELBERGER IN THE
SUPERIOR
COURT OF
PENNSYLVANIA
Appellant
v.
MARK AZEMAR AND ALLENTOWN REFRIGERATED
TERMINALS, INC., G & H INTERNATIONAL TRADERS,
INC., OREFIELD COLD STORAGE & DISTRIBUTION
CENTER, INC., OCS TRANSPORT INCORPORATED, OCS
TRANSPORT SERVICES, INC., UNIQUE BROKERAGE,
INC., SEL, INC., HAZLETON MACARONI COMPANY,
INC., ANGUS BRANDS, INC., DYNASTY MARKETING,
INC., SCHNITZEL FOODS, INC., CREAM VALLEY, INC.,
AND TALYANO FOODS, INC.
____________________________________________
MARK AZEMAR
v.
NEIL EICHELBERGER AND ALLENTOWN REFRIGERATED
TERMINALS, INC., G & H INTERNATIONAL TRADERS,
INC., OREFIELD COLD STORAGE & DISTRIBUTION
CENTER, INC., OCS TRANSPORT INCORPORATED, OCS
TRANSPORT SERVICES, INC., UNIQUE BROKERAGE,
No. 3543 EDA
INC., SEL, INC., HAZLETON MACARONI COMPANY,
2016
INC., ANGUS BRANDS, INC., DYNASTY MARKETING,
INC., SCHNITZEL FOODS, INC., CREAM VALLEY, INC.,
TALYANO FOODS, INC. AND OCS II
APPEAL OF: NEIL EICHELBERGER
Appeal from the Judgment Entered November 14, 2016
In the Court of Common Pleas of Lehigh County
Civil Division at No(s): 2014-C-1098, 2014-C-4015
J-A17027-17
BEFORE: GANTMAN, P.J., RANSOM, J., and PLATT, J.*
MEMORANDUM BY RANSOM, J.: FILED SEPTEMBER 20, 2017
Appellant, Neil Eichelberger, appeals from the judgment entered
November 14, 2016, in which the trial court granted declaratory relief to
Appellee, Mark Azemar, and money damages in his favor against Allentown
Refrigerated Terminals, Inc. (“ART”) in the amount of $342,364.00; G&H
International Traders, Inc. (“G&H”) in the amount of $828,207.00; and SEL
Inc. in the amount of $490,434.00.
In July 1989, Appellee merged his company, G&H, into Appellant’s
company, ART. Notes of Testimony, 6/1/16 at 10-11. After the merger,
ART was the parent company, and G&H was the subsidiary. Id. The parties
subsequently entered into an Employment Agreement that contained an
express covenant not to compete. Eichelberger Dep., 6/26/15, 50:14-18.
In April 1990, Appellant established Orefield Cold Storage & Distribution
Center, Inc. (“OCS”). Id. at 46:9-17. Like ART, OCS was a cold storage
business. Id. at 56:7-16.
Under two agreements entered into in 1989 and 1991, Appellee had
the right to purchase up to 50% of ART. Id. at 27:20-23, 28:2-4. In the
1991 Agreement, Appellee was given the right to acquire 50% ownership in
OCS, and restated his right to purchase up to 50% of ART. Id. at 60:5-10,
61:6-15. We affirm.
____________________________________________
*
Retired Senior Judge assigned to the Superior Court.
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From 1989 to 2013, ART and the Companies never paid distributions
to Appellee although the Companies were profitable in that period. Id. at
33:22-25, 34:2-13. From 1991 to 2013, Appellee made payments to the
Companies. Id. at 102:5-8. The Companies’ bookkeepers never kept
records of Appellee’s payments, and Appellant had no documentation of
Appellee’s payments. Id.
Appellant never notified Appellee that he was in default under the
1989 or 1991 Agreements. Id. at 100:20-23. The 1990-91 financial report
of the Companies showed that Appellee was 50% owner of OCS and had
loaned $477,500 to the Company. Id. at 130:22-25, 131:2-4. From 1991
to 2013, tax returns were prepared annually. Both federal and state tax
returns reported that Appellant was the majority shareholder of ART and
that Appellant and Appellee were 50% shareholders of the other Companies.
Id. at 88:18-24, 89:2-13.
In 2012, Appellant organized OCS II to engage in the cold storage
business. Id. at 359:4-25, 360:2-25, 361:2-17. In April 2014, Appellant
filed a Praecipe for Writ of Summons. On April 11, 2014, Appellant filed a
Complaint seeking declaratory and equitable relief. In response, Appellee
filed an Answer, New Matter and Counterclaim. Neither party demanded a
jury trial.
In December 2014, Appellee filed a separate Complaint and demanded
a jury trial. The cases were subsequently consolidated. In October 2015,
the court denied Appellant’s Motion for Summary Judgment. Appellant then
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filed a motion to strike the jury demand, which was denied in part and
granted in part. In November 2015, Appellee filed a motion to disqualify
Judge Reichley. The motion was denied but Judge Reichley granted a joint
request for recusal. In December 2015, Appellant filed a second motion to
strike the jury demand. In March 2016, Appellant’s motion was denied.
In June 2016, following trial, the jury entered a verdict by answering
special verdict questions, and the trial court entered a Molded Verdict and
Order. Appellant and Appellee both timely filed Motions for Post-Trial Relief.
In July 2016, the trial court entered an Amended Molded Verdict Order and
entered Declaratory Judgment in favor of Appellee. The trial court entered
judgment in favor of Appellee against ART in the amount of $342,364.00,
G&H International Traders Inc. in the amount of $828,207.00, and SEL Inc.
in the amount of $490,434.00.
Thereafter, the parties timely filed post-trial motions. Following
briefing and argument, an order was entered in October 2016, denying all
post-trial motions. In November 2016, the parties timely filed cross-appeals
from the trial court’s denial of their respective motions for post-trial relief.
Appellee withdrew his cross-appeal. In December 2016, the trial court filed
a 1925(a) statement but did not order a 1925(b) statement.
On appeal, Appellant presents the following issues for our review:
A. Did the trial court err as a matter of law or abuse its
discretion in denying Neil Eichelberger’s Motion to Strike Jury
Trial Demand, particularly considering (i) there was no
demand for jury trial ever filed in No. 2014-C-1098, and (ii)
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the predominantly equitable nature of the parties’ claims and
requests for relief?
B. Should judgment notwithstanding the verdict have been
entered in Eichelberger’s favor against Mark Azemar on the
latter’s claims to stock ownership in Orefield Cold Storage &
Distribution Center, Inc., Allentown Refrigerated Terminals,
Inc., and the other companies, given Azemar’s conclusively
binding admissions at trial that he had breached and voided
the underlying contracts, thereby rendering incorrect as a
matter of law the jury’s “No” answer to Special Verdict
Question No. 1 (“Has Neil Eichelberger proven that Mark
Azemar breached the 1989 and 1991 agreements?”)?
C. In the alternative, should judgment notwithstanding the
verdict have been entered in favor of Eichelberger and against
Azemar on the latter’s claims regarding stock ownership in
Orefield Cold Storage & Distribution Center, Inc., Allentown
Refrigerated Terminals, Inc. and the other companies, given
there was no evidence whatsoever that any of the monies
paid by Azemar to any of the companies was treated as
anything other than loans, which Mr. Azemar never contested
or disputed for over 20 years?
D. In the alternative to Questions B and C above, was the jury’s
answer of “No” to Special Verdict Question No. 1 (“Has Neil
Eichelberger proven that Mark Azemar breached the 1989 and
1991 agreements?”) so contrary to the evidence and shocking
to the conscience as to warrant a new trial?
E. Did the trial court err as a matter of law or abuse its
discretion and thereby substantially prejudice Neil
Eichelberger’s case, by (i) limiting the testimony of the
companies’ accountants, David Miller, CPA and Christopher
Wills, CPA, to rebuttal and impeachment of Mark Azemar, (ii)
limiting Miller’s and Wills’ testimony concerning the
companies’ financial statements and their loan ledgers to the
issue of whether Mark Azemar had received notice of those
documents, (iii) prohibiting the admission as exhibits of the
financial statements and the loan ledgers, and (iv) instructing
the jury that the testimony of Christopher Wills, CPA
regarding shareholder loan balances set forth in Orefield
financial statements was not offered and may not be
considered for the truth of those numbers?
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Appellant’s Brief at 6-7.
Appellant first asserts that the trial court improperly denied his motion
to strike the jury demand. According to Appellant, Appellee failed to timely
demand a jury, and his demand was not appropriate in a case involving
equity issues.1
In any action in which the right to jury trial exists, that right
shall be deemed waived unless a party files and serves a written
demand for a jury trial not later than twenty days after
service of the last permissible pleading. The demand shall
be made by endorsement on a pleading or by a separate writing.
Pa.R.C.P. 1007.1(a) (emphasis added).
The trial court reasoned as follows:
The last permissible pleading in the First Case was the Reply To
New Matter And Counterclaim filed by the Interested Parties on
August 26, 2014. That pleading contains a Certificate of Service
indicating that it was mailed on August 26, 2014, so we can
reasonably infer that it was served within five calendar days, a
reasonable time for first class mail. Thus, the date of service
appears to be around August 31, 2014. [Appellee] had twenty
days from August 31, 2014, or until approximately September
19, 2014, to demand a jury. We consider his demand for jury
trial filed in the Second Case to be effective as to the First case
when the two cases were consolidated on January 26, 2015.
Trial Court Opinion, 3/10/16 at 10.
____________________________________________
1
In April 2014, Appellant first filed complaint No. 2014-C-1098, at which
time he did not file a jury demand. In December 2014, Appellee filed a
second complaint and with it demanded a jury trial. In January 2015, both
cases were consolidated.
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Nevertheless, Appellant asserts that Appellee’s failure to demand a
jury in the first case renders any subsequent request untimely. However, a
party will not be denied a jury trial due to an untimely demand under Rule
1007.1. The rule’s requirements are not mandatory in nature and allow for
exceptions. Dauphin Deposit Bank and Trust Co. v. Pifer, 556 A.2d 904,
906 (Pa. Super. 1989). Our Supreme Court has stated “there is no inherent
prejudice in proceeding to trial by jury as opposed to trial before a judge.”
Id. at 907, (citing Commonwealth v. Morales, 494 A.2d 367, 374 (Pa.
1985); Commonwealth v. Bonacurso, 455 A.2d 1175 (Pa. 1983)).
Here, the trial court reasoned:
[Appellee’s] failure to file a written demand for jury trial by
September 19, 2014 appears to fall into the category of “error or
defect of procedure” referred to in Rule 126.[2]
In the case of Selck-Minnerly Group Inc. v. Mathews Intern
Corp., 13 Pa. D & C.3d 149 (1980), the Court of Common Pleas
of Allegheny County state: “[W]e should not deny the right to a
jury trial to a party who has not knowingly waived this right in
the absence of prejudice to an adverse party or inconvenience to
the court.” Id. at 151 (emphasis added). The court in Selck
went on to state:
. . . the Pennsylvania Supreme Court did not exclude rule
1007.1 from the provisions of Pa.R.C.P. 126 which permits
the court at any stage of any action to disregard any error
or defect of procedure which does not affect the
____________________________________________
2
[T]he rules shall be liberally construed to secure the just, speedy and
inexpensive determination of every action or proceeding to which they are
applicable. The court at every stage of any such action or proceeding may
disregard any error or defect of procedure which does not affect the
substantial rights of the parties. Pa.R.C.P. 126.
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substantial rights of the parties and Pa.R.C.P. 248 which
permits the court to extend the time prescribed by any
rule of civil procedure for the doing of any act. Id.
We have no evidence indicating that [Appellee] knowingly
waived his right to a jury trial.
The phrase “prejudice to an adverse party” contained in Selck,
supra appears to be consistent to the phrase “affect the
substantial rights of the parties” contained in Rule 126.
Therefore, we now turn to an analysis of the effect to [Appellant]
in granting [Appellee] a jury trial and whether doing so would
affect the substantial rights of [Appellant] and/or the interested
parties.
[As of] March 7, 2016 [,] the procedural posture of the Subject
Cases include[d] the following: 1) [Appellant] did not file the
Motion To Strike until six and a half months after [Appellee’s]
Jury Trial Demand was filed and only eight days prior to the trial
date before Judge Reichley; 2) [Appellant] knew, as of January
28, 2015 when the Subject Cases were consolidated by Judge
Reichley’s Order, that there was a jury trial demand in the
Subject Cases[;] 3) the Pre-Trial Conference and Trial before the
undersigned have not been scheduled yet; 4) the Pre-Trial
Conference and Trial before the undersigned will not be
scheduled without coordination of dates with all counsel, as is
the undersigned’s usual practice; 5) the Pre-Trial Conference and
Trial before the undersigned will not be held for at least a few
months into the future because of the Court’s already full Court
schedule, thus providing all parties with adequate time to
prepare...
Based on the above analysis, we find that the substantial rights
of [Appellant] and the Interested Parties will not be affected, nor
will [Appellant] or the Interested Parties be prejudiced...
Trial Court Opinion 3/10/16 at 10-11.
Appellant also contends that Appellees’ claims are predominantly
equitable and, thus, not entitled to a jury trial. Here, the trial court stated
as follows with regards to Appellant’s equitable claims:
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The Subject Cases contain multiple causes of action, some of
which are legal, and some of which are equitable, in nature. A
right to jury trial exists as to all legal claims pled in a case
commenced with a legal claim. When a case is commenced with
an equitable claim, legal claims pled in response thereto are
typically deemed incidental to the equitable claim and no right to
a jury trial exists. [Appellant] maintains that all of the causes of
action set forth in his Complaint are equitable in nature, since
both Counts seek a declaratory judgment and, thus, do not
entitle any party to a jury trial. . . .
However, this analysis cannot stop with the issue of whether the
initial claim is legal or equitable. The Subject Cases were
commenced by [Appellant’s] Complaint containing two counts
seeking declaratory judgments. While a declaratory judgment is
equitable in nature, it may involve issues of fact.
Usually in declaratory judgment actions, the parties stipulate to
findings of facts or the Court makes findings of fact from
evidence presented or a combination of the two. Once the
findings of fact have been made, the Court determines any
conclusions of law and the appropriate relief that reasonably
flows from those findings of fact. Typically, we do not see juries
decide facts in a declaratory action.
A reading of [Appellant’s] Complaint, especially at paragraphs 8
through 43, reveals that [Appellant] asserts that certain
agreements exist or existed between the parties, were modified,
and were breached by [Appellee]. These allegations raise
questions of fact. Whether the issues are couched as ownership
of stock or breach of contract, issues of fact are involved. A
review of the applicable portions of the Declaratory Judgment
Act, 42 Pa.C.S.A. § 7531, et. seq. (“Act”) is necessary.
The Act states in pertinent part:
§ 7532 General scope of declaratory judgment
Courts of record, within their respective jurisdictions, shall
have power to declare rights, status, and other legal
relations whether or not further relief is or could be
claimed. Id.
§ 7533 Construction of documents
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Any person interested under a deed, will, written contract,
or other writings constituting a contract, or whose rights,
status, or other legal relations are affected by a statute,
municipal ordinance, contract, or franchise, may have
determined any question of construction or validity arising
under the instrument, statute, ordinance, contract, or
franchise, and obtain a declaration of rights, status, or
other legal relations thereunder. Id.
That declaratory judgments are available:
1.) Before or after there has been a breach of contract.
§7534
2.) To obtain a declaration of rights or legal relations
with respect to the administration of a trust or estate
of a decedent, infant or insolvent. §7535
§ 7536 Enumeration not exclusive
The enumeration in section 7533 (relating to construction
of documents) through 7535 (relating to rights of
fiduciaries and other persons) does not limit or restrict the
exercise of the general powers, conferred in section 7532
(relating in general scope of declaratory remedy), in any
proceeding, where declaratory relief is sought, in which a
judgment or decree will terminate the controversy or
remove an uncertainty. Id.
§ 7539 Issues of fact
(a) General rule –Relief may be granted under this
subchapter notwithstanding the fact that the purpose
or effect of the proceeding, in whole or in part, is to
resolve or determine a question of fact.
(b) Jury trial – When a proceeding under this
subchapter involves the determination of an issue of
fact, such issue may be tried and determined in the
same manner as issues of fact are tried and
determined in other civil actions in the court in which
the proceeding is pending. Id. (emphasis added)
The Act specifically excludes the following from declaratory
judgment relief:
1.) actions involving divorce or annulment;
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2.) proceedings within the exclusive jurisdiction of a
tribunal other than a court, i.e., an administrative
agency; or
3.) appeals from orders of tribunals (42 Pa.C.S.A.
§7541).
The Act does not appear to specifically include or exclude the
types of claims and issues involved in the Subject Cases. But, a
declaratory judgment action is an appropriate claim under the
Act in the Subject Cases because a resolution of the Subject
Cases will terminate the controversy. At the same time, the
Subject Cases clearly involve issues of fact. Since issues of fact
are tried and determined in other civil actions by juries, it follows
that jury can decide the issues of fact in the Subject Cases.
...
The Note of the Civil Procedural Rules Committee following Rule
16013 provides in pertinent part:
The existence of a right to a jury trial on disputed issues of
fact will be a matter of determination in each action where
only declaratory relief is sought. If the right is claimed and
disputed, the court must determine the question on the
basis of the nature of the cause of action, the right to be
enforced and the “other civil action” which would be
brought to enforce it if declaratory judgment did not exist.
[This rule] states that when an action involves the
determination of an issue of fact it shall be tried “in the
same manner as issues of fact are tried and determined in
other civil actions.” Since some “other civil actions” are
tried by jury and some are tried without jury, the language
is not helpful.
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3
Pa.R.C.P. 1601 Action for Declaratory Relief Alone. Jury Trial. Waiver
(a) A plaintiff seeking only declaratory relief shall commence an action
by filling a complaint captioned “Action for Declaratory Judgment”.
The practice and procedure shall follow, as nearly as may be, the
rules governing the civil action.
(b) If the right to trial by jury of disputed issues of fact exists in such
an action, it shall be deemed waived unless demanded in the time
and manner provided by Rule 1007.1.
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[In] an action brought only for declaratory relief, the right
to jury trial must be determined as though the appropriate
“other civil action” had been brought. For example, if, in
the absence of declaratory judgment, the cause of action
would be enforced by an action in assumpsit for money
damages, with a constitutional right to trial by jury, that
right would exist as to any issues of fact if an action for
declaratory judgment were brought with respect to that
cause of action, whether or not the money damages were
claimed. Rule 1601(a) provides that the practice and
procedure shall follow the Equity Rules, but that is only “as
nearly as may be.” The Rule does not and could not annul
or impair a right to trial by jury. Id.
The Subject Cases began with a Complaint containing counts
pursuant to the Act and allegations which involve issues of fact.
While the Act does not explicitly involve the issues of
modification or breach of contract, it also does not exclude them.
There is underlying action here, so the only facts to be
determined arise from the allegations set forth in [Appellant’s]
Complaint. [Appellant] could have pled the same facts and have
requested damages, but he chose equitable relief instead. This
does not change the underlying factual issues that must be
resolved. Therefore, a right to jury trial on the issues of fact in
[Appellant’s] Complaint exists.
Having made this determination, we turn to the question of
whether there is a right to jury trial for [Appellee’s] Counterclaim
and Complaint. A reading of [Appellee’s] Counterclaim and
Complaint reveals that [Appellee] complains about the same
relationships, agreements, transactions, occurrences and events
as those which are the subject to [Appellant’s] Complaint. In
light of this relationship between the pleadings filed by the
parties, the right to jury trial on issues of fact extends to
[Appellee’s] Counterclaim and Complaint. To the extent
[Appellee] raises any additional allegations of fact to
[Appellant’s], justice and judicial economy require that a jury
decide all issues of fact related to the Subject Cases. To do
otherwise, would risk inconsistent verdicts and possible res
judicata issues.
So as a practical matter, how should the trial proceed? A
specific example of a Pennsylvania Court applying these
principles is the Court of Common Pleas of Allegheny County in
Wheeling-Pittsburg Steel Corp. v. Alexander & Alexander,
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Inc., 36 Pa. D. & C.3d 605, 607 (PA. Com. Pl. 1984). In that
case, the jury answered interrogatories and the trial judge then
entered an order pursuant to the declaratory judgment
provisions of the Judicial Code (42 Pa.C.S., et seq.), and Rules
1601, 1602, et seq., of the Rules of Civil Procedure…Id. “In
respect to the complaint in assumpsit, the jury answered
interrogatories to the effect that both [Alexander and Alexander
(“A&A”)] and [CAN Financial Corporation (“CAN”)] had breached
their contractual obligations to plaintiff.” Id....
Based upon the above analysis, the proper procedure for the
Subject Cases is what might be called hybrid jury/non-jury trial
with one evidentiary record from which the jury decides all
issues of fact as well as legal claims and the Court fashions the
appropriate equitable relief from the jury’s findings. . .
Trial Court Opinion at 3-8. The trial court’s analysis is sound and supported
by the record. Accordingly, we adopt the trial court’s reasoning as our own.
Thus, no relief is due.
Appellant’s second issue challenges the trial court’s order denying
JNOV.4 Appellant contends that the jury’s answer to Special Verdict
Question one was incorrect, due to Appellee’s admissions at trial.
Our standard of review of the denial of JNOV is well-settled:
Appellate review of a denial of JNOV is quite narrow. We may
reverse only in the event the trial court abused its discretion or
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4
Appellee’s assertion that this issue is waived is incorrect. At the close of
the case Appellant moved for a nonsuit. Notes of Testimony, June 2, 2016
at 263; see Youst v. Keck’s Food Service, Inc., 94 A.3d 1057, 1071 (Pa.
Super. 2014) (“to preserve the right to request a JNOV post-trial, a litigant
must first request a binding charge to the jury or move at trial, for a
directed verdict or a compulsory nonsuit at trial.”)(quoting Thomas
Jefferson Univ. v. Wapner, 903 A.2d 565, 570 (Pa. Super. 2006)).
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committed an error of law that controlled the outcome of the
case. Abuse of discretion occurs if the trial court renders a
judgment that is manifestly unreasonable, arbitrary or
capricious; that fails to apply the law; or that is motivated by
partiality, prejudice, bias or ill-will.
When reviewing an appeal from the denial of a request for
[JNOV], the appellate court must review the evidence in the light
most favorable to the verdict[-]winner and give him or her the
benefit of every reasonable inference arising therefrom while
rejecting all unfavorable testimony and inferences… Thus, the
grant of a judgment n.o.v. should only be entered in a clear case
and any doubts must be resolved in favor of the verdict[-
]winner. Furthermore, [i]t is only when either the movant is
entitled to judgment as a matter of law or the evidence was such
that no two reasonable minds could disagree that the outcome
should have been rendered in favor of the movant that an
appellate court may vacate a jury’s finding.
Phillips v. Lock, 86 A.3d 906, 919 (Pa. Super. 2014) (citing Empire
Trucking Co. v. Reading Anthracite Coal Co., 71 A.3d 923, 932 (Pa.
Super. 2013)).
Special verdict question one asks: “Has [Appellant] proven that
[Appellee] breached the 1989 and 1991 agreements?” Verdict Slip 6/3/16.
The trial court reasoned:
From the evidence presented at trial, [a] reasonable jury could
find that [Appellee] substantially complied with the 1989 and
1991 agreements and/or that [Appellant] waived the strict terms
of those agreements through his various actions, such as
accepting payments from [Appellee], representing [Appellee] as
a fifty percent (50%) owner, and in not declaring [Appellee] in
default of those Agreements.
Trial Court Opinion, 10/14/16 at 4. We agree. Thus, we discern no abuse of
discretion in the court’s denial of JNOV.
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In his third issue, Appellant contends that JNOV should have been
entered against Appellee, as there was no evidence that the monies paid by
Appellee were treated as anything other than loans. As previously stated,
JNOV is granted only when no two reasonable minds could disagree on the
outcome. Phillips, 86 A.3d at 919. Here, the trial court determined that
there was sufficient evidence that the monies paid into the Companies were
both loans and buy-in payments. See Trial Court Opinion at 10.
Furthermore, the trial court reasoned that:
Questions of fact are for a jury to decide. The evidence
presented at trial could have led a reasonable jury to conclude,
from years of tax returns indicating that [Appellee] was a fifty
percent (50%) owner and representations by [Appellant] and the
Companies to the banks, that [Appellee] had acquired fifty
percent (50%) of the shares. The testimony of [Appellee] and
his expert, Paul Pocalyko, could have led a reasonable jury to
decide that [Appellee’s] payments were made under and as
anticipated by, the 1989 and 1991 agreements and that a
number of payments made to [Appellee] by the Companies were
loan repayments for which [Appellee] could have re-invested in
the Companies. Furthermore, sufficient evidence was presented
at trial to lead a reasonable jury to conclude that [Appellant] was
the person who controlled the Companies. Similarly, a
reasonable jury could conclude that any payments made [by]
[Appellee] after December 31, 1999 were buy-in payments
establishing his fifty percent (50%) ownership in the Companies.
Therefore, judgment notwithstanding the verdict will not be
entered in favor of [Appellant] and against [Appellee] on
[Appellee’s] claims regarding stock ownership in Orefield Cold
Storage & Distribution Center, Inc.[,] Allentown Refrigerated
Terminals, Inc.[,] and the other Companies.
Trial Court Opinion, 10/14/16 at 9-10. We agree and adopt this analysis as
our own. Accordingly, Appellant is not entitled to JNOV.
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Next, Appellant argues that he is entitled to a new trial because the
jury’s answer of “no” to Special Verdict Question No. 1 is contrary to the
weight of the evidence. Appellant’s Brief at 4. We disagree.
Our review of challenges to the weight of the evidence is
extremely limited. We will respect the trial court’s findings with
regard to credibility and weight of the evidence unless it can be
shown that the lower court’s determination was manifestly
erroneous, arbitrary and capricious, or flagrantly contrary to the
evidence. Additionally, this Court’s review of a weight of the
evidence claim is a review of the trial court’s exercise of
discretion in weighing the evidence, not of the underlying
question of whether we believe that the verdict is, in fact,
against the weight of the evidence.
Wytiaz v. Detrick, 954 A.2d 643, 645 (Pa. Super. 2008) (citation
omitted).
A new trial based on weight of the evidence issues will not be
granted unless the verdict is so contrary to the evidence as to
shock one’s sense of justice; a mere conflict in testimony will not
suffice as grounds for a new trial. Upon review, the test is not
whether this Court would have reached the same result on the
evidence presented, but, rather after due consideration of the
evidence found credible by the [jury], and viewing the evidence
in the light most favorable to the verdict winner, whether the
court could reasonably have reached its conclusion. Our
standard of review in denying a motion for a new trial is to
decide whether the trial court committed an error of law which
controlled the outcome of the case or committed an abuse of
discretion.
Elliott v. Ionta, 869 A.2d 502, 504 (Pa. Super. 2005) (citation omitted).
In the instant case the trial court did not commit an error of law or an
abuse of discretion. As previously stated, there was evidence presented at
trial to support the verdict, as such it does not “shock the conscience.”
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Appellant’s final claim challenges the trial court’s limitation of the
accountants’ testimony. This Court has held that “[a] trial court’s rulings on
evidentiary questions are controlled by the discretion of the trial court and
[an appellate] [c]ourt will reverse only for clear abuse of that discretion.”
Hall v. Jackson, 788 A.2d 390,401 (Pa. Super. 2001) (quoting
Commonwealth v. Vierao, 659 A.2d 1024, 1028 (Pa. Super. 1995)). In
the instant case, Miller and Wills’ testimony was inadmissible hearsay. The
trial court reasoned as follows:
David Miller, CPA and Christopher Willis, CPA are accountants for
the Companies. The admissibility of Miller’s and Wills’ testimony
is governed by Pennsylvania Rule of Evidence 803, Exceptions to
the Rule Against Hearsay - - Regardless of Whether the
Declarant Is available as a Witness. Pennsylvania Rule of
Evidence 803(6), Records of a Regularly Conducted Activity,
states, in pertinent part:
A record (which includes a memorandum, report, or data
compilation in any form) of an act, event or condition if,
(A) the record was made at or near the time by – or
from information transmitted by – someone with
knowledge;
(B) the record was kept in the course of regularly
conducted activity of a “business”, which term
includes business, institution, association,
profession, occupation, and calling of every kind,
whether or not conducted for profit;
(C) making the record was a regular practice of that
activity;
(D) all these conditions are shown by the testimony of
the custodian or another qualified witness, or by a
certification that complies with Rule 902(11) or (12)
or with a statute permitted certification; and
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(E) neither the source of information nor other
circumstances indicate a lack of trustworthiness.
Moreover, in U.S. Bank, N.A. v. Pautenis, 118 A.3d 386 (Pa.
Super. 2015), the Superior Court stated the following concerning
the business record exception to the hearsay rule:
As long as the authenticating witness can provide sufficient
information relating to the preparation and maintenance of
the records to justify a presumption of trustworthiness for
the business records of a company, a sufficient basis is
provided to offset the hearsay character of the evidence.
Id., 118 A.3d at 4001, quoting Boyle v. Steiman, 429 Pa.
Super. 1, 631 A.2d 1025, 1032-33 (1993) (internal
citations omitted), appeal denied, 538 Pa. 663, 649 A.2d
666 (1994).
Further, in Bell Atlantic-Pennsylvania, Inc. v. Pennsylvania
Public Utility Commission, 763 A.2d 440 (PA. Commw. 2000).
rearg. den. (2001), vacated on other grds nom MCI World
Com, Inc. v. Pennsylvania Public Utility Commission, 577
Pa. 294, 844 A.2d 1239 (2004), the Commonwealth Court stated
as follows:
With respect to the factual support for the PUC’s key
findings that Bell continues to control over 90% of the
local business market and nearly 100% of the local
residential market, the evidentiary source is PUC access-
line reports based on industry data. The PUC position as
to the admissibility of such source is supported by the
Records of Regularly Conducted Activity hearsay exception.
Pa.R.E. No. 803(6) defines that hearsay exception as
follows:
A…report, record or data compilation, in any form, of
acts, events or conditions, made at or near the time by,
or from information transmitted by, a person with
knowledge, if kept in the course of a regularly
conducted business activity…unless the sources of
information or other circumstances indicate a lack of
trustworthiness…
The factual sources do fall within that description and
comply with the further criteria of Rule 803(6) in that its
concept of business certainly includes the
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telecommunications industry, and the record presents no
indication of lack of trustworthiness.
Contrary to Bell Atlantic –Pennsylvania, Inc., the Subject
Cases present a genuine issue of trustworthiness as to the basis
for the testimony of Miller and Wills. The testimony of Miller and
Wills is relevant to the issue of notice to [Appellee] of the
content of those documents and his failure to question,
complain, act or otherwise communicate about those documents.
Furthermore, the documents prepared by Miller and Wills are
relevant because they consist of tax returns prepared from
information taken from the business records of the Companies.
However, the tax returns cannot be used as substitutes for the
business records because the tax returns were not prepared in
the ordinary course of business, and could contain incorrect
information. They, therefore, lack trustworthiness under Pa.R.e.
No. 803(6). Also, the accountant’s records do not constitute
business records of [Appellee] or [Appellant] as defined by the
business record exception of the Pennsylvania Rules of Evidence.
The business records that no longer exist cannot be substituted
with the accountant’s documents that were ostensibly prepared
from those records.
Additionally, Miller and Wills were not designated by [Appellant],
or any party, as expert witnesses. Rather, they were identified
as fact witnesses and, therefore, expert opinion testimony from
them is inadmissible. This [c]ourt permitted the testimony of
Miller and Wills for limited purposes. This [c]ourt precluded
them from testifying: 1) to the non-existent Companies’ records;
2) that the Companies’ records were accurately reflected in the
accountants’ records; and 3) that the financial statements and
loan schedules which the accountants prepared were accurate.
This [c]ourt’s ruling precluded Miller and Wills from speculating
about the accuracy of the Companies’ business records. Those
records were not maintained, prepared or audited by Miller or
Wills and no longer exist. The financial statements and loan
ledgers prepared by Miller and Wills were properly ruled
inadmissible because the documents were, not in fact, based on
the Companies’ records maintained in the ordinary course of
business, lacked foundation, and are inadmissible hearsay.
This [c]ourt did permit Miller and Wills to testify regarding the
financial statements, loan schedules and Federal Tax Returns
and, further, permit the publication of those documents to the
jury. [Appellant] failed to prove that the financial statements
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and loan schedules were accurate or reliable. [Appellant] did not
suffer any unfair prejudice that would warrant a new trial.
Therefore, this [c]ourt did not err in: 1) limiting the testimony of
David Miller, CPA and Christopher Wills, CPA to rebuttal and
impeachment of [Appellee]; 2) in limiting Miller’s and Wills’
testimony concerning the Companies’ financial statements and
the loan ledgers to the issue of whether [Appellee] received
notice of said documents; and 3) in prohibiting the admission as
exhibits of the financial statements and the loan ledgers.
Therefore, a new trial is not warranted due to any of these
issues.
Additionally, this [c]ourt did not err in instructing the jury that
the testimony of Christopher Wills, CPA regarding shareholder
loan balances set forth in Orefield financial statements are not
offered or to be considered for the truth of those numbers.
Trial Court Opinion at 5-8. We discern no abuse of discretion in the trial
courts limitation of testimony.
Judgment affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 9/20/2017
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