Overlook Road Farm v. Aqua Pennsylvania

J-A11023-16
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
OVERLOOK ROAD FARM COMPANY AND IN THE SUPERIOR COURT OF
L. WILLIAM KAY, III PENNSYLVANIA
Appellants
v.
AQUA PENNSYLVANIA, INC., F/K/A
PHILADELPHIA SUBURBAN WATER
COMPANY
Appellee No. 1847 EDA 2015
Appeal from the Order Entered June 9, 2015
In the Court of Common Pleas of Chester County
Civil Division at No(s): 11-106690
BEFORE: SHOGAN, J., LAZARUS, J., and MUNDY, J.
MEMORANDUM BY MUNDY, J.: FILED JUNE 28, 2016
Appellants, Overlook Road Farm Company and L. William Kay, III,
appeal from the June 9, 2015 order denying their motion for post-trial relief
following the entry of a verdict in favor of Appellee, Aqua Pennsylvania, Inc.
(Aqua), in Appellants’ breach of contract action.1 After careful review, we
affirm.
____________________________________________
1
We note the certified record does not reflect that any party filed a praecipe
for entry of judgment in this matter.
[A]n appeal generally lies from judgments entered
following the disposition of post-trial motions.
Mackall v. Fleegle, 801 A.2d 577, 580–581 (Pa.
Super. 2002). However, in the interests of justice
and to promote judicial economy an appellate court
may “regard as done that which ought to have been
(Footnote Continued Next Page)
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We summarize the procedural and factual background of this case as
follows. In a prior action, Appellants sued Aqua to recover sums allegedly
due in connection with certain water line easements on Appellants’ property.
The parties resolved the case by entering a comprehensive settlement
agreement (the Agreement) in November of 2007. The Agreement first
provided for Kay to grant a permanent easement for certain existing water
lines to Aqua and to execute attendant documentation, and Aqua was
obligated to pay Overlook $37,500.00 within five days of the compliance
with this portion of the Agreement. Id., Exhibit A at 1-2, ¶¶ 1, 2.2 Relative
to an additional easement Aqua wished to obtain, the agreement provided as
follows.
3. Aqua shall pay to [Appellants] an
additional sum of $37,500 within five (5) business
_______________________
(Footnote Continued)
done” and proceed in the matter. See McCormick
v. Ne. Bank of Pa., 522 Pa. 251, 561 A.2d 328, 330
n.1 (1989) (holding that although an order
dismissing appellants’ motion for post-trial relief was
not reduced to judgment, in the interests of judicial
economy the Supreme Court could “regard as done
that which ought to have been done” and proceed
with the appeal)….
Grossi v. Travelers Personal Ins. Co., 79 A.3d 1141, 1145 n.1 (Pa.
Super. 2013), appeal denied, 101 A.3d 103 (Pa. 2014). We opt to do so
here, and shall proceed to the merits of the appeal.
2
This portion of the Agreement was duly performed and is not a subject of
Appellants’ instant breach of contract action.
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days of Pulte Homes, Inc. (“Pulte”)[3] at no cost or
expense to Aqua executing documents granting Aqua
a permanent easement for the area described in the
Grant of Easement dated February 29, 2001 and
recorded at Book 4992 Page 0418 in the Office of
Recorder of Deeds of Chester County (“Grant of
Easement”) as including portions of Tax Parcels 30-
05-0118-00, 30-05-0128-01 and 30-05-0120-06,
Pennsylvania and occupied by two existing water
wells, a Wellhead Protection Area within 150 feet of
those wells, and related equipment and water lines
(the “Well Easement”). Kay hereby releases and
terminates all rights he has or may have to
terminate the Well Easement pursuant to paragraph
4 of the Grant of Easement.
…
7. … Each party has freely entered into this
Agreement after fully reviewing the terms and
consulting with its respective counsel, and fully
understands that the Agreement represents a full
and final compromise of all matters noted above, for
the express purpose of precluding forever any future
suits arising out of those matters.
8. This Agreement contains the entire
agreement of the parties with respect to the
settlement of the Action and the disputes between
them, and supersedes any prior discussions,
negotiations, agreements or understandings. No
party is relying on any representation of the other
party that is not expressly set forth herein.
Id., Exhibit A at 2-4, ¶¶ 3, 7, 8.
____________________________________________
3
The property described in paragraph 3 of the Agreement was under
contract for sale from Appellants to Pulte at the time of the Agreement.
Pulte was not a party to the initial litigation and is not a signatory to the
Agreement.
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On September 30, 2011, Appellants filed a complaint against Aqua,
alleging it breached the settlement agreement by failing to arrange for the
execution of the easement referenced in paragraph 3 of the Agreement, and
failing to tender the payment thereunder. Id. at 2-3, ¶¶ 6, 7. Aqua filed an
answer and new matter on April 13, 2012. The matter proceeded to
arbitration, resulting in an arbitration award in favor of Aqua, from which
Appellants appealed to the trial court on July 2, 2012. On January 22, 2013,
Aqua filed a motion in limine, seeking to bar the introduction of parol
evidence at trial to explain the terms of the disputed contract provisions. On
December 2, 2013, the trial court granted Aqua’s motion in limine,
restricting evidence of Aqua’s obligation to make payment to Appellants
under paragraph 3 of the Agreement to the “four corners of the Settlement
Agreement.” Trial Court Order, 12/2/13, at 1. On July 15, 2014, the trial
court denied Appellants’ various outstanding discovery and sanctions
motions, ruling as follows.
At argument, [Appellants’] counsel conceded that
[Appellants’] sole remaining theory for relief is that
[Aqua] had interfered with [Appellants’] efforts to
obtain an easement from Pulte Homes, Inc., in
breach of [the] Agreement []. [Aqua’s] counsel
argued that [Appellants’] Complaint failed to allege
this theory. Having reviewed the Complaint, we
agree. Therefore, there is no basis upon which to
permit [Appellants] to pursue the requested
discovery.
Trial Court Order, 7/15/14, at 1 n.1.
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The case proceeded to a bench trial on February 11, 2015. At trial,
the parties stipulated that Pulte never granted Aqua the permanent
easement referenced in paragraph 3 of the Agreement. N.T., 2/11/15, at 3.
At the conclusion of the trial, the trial court issued a verdict in favor of Aqua.
Appellants filed a motion for post-trial relief on February 26, 2015,
challenging the trial court’s December 2, 2013, and July 15, 2014 orders and
asserting the trial court should have granted Appellants leave to amend their
complaint. The trial court denied Appellants’ motion for post-trial relief on
June 9, 2015. Appellants filed a notice of appeal on June 19, 2015.4
On appeal, Appellants raise the following questions for our review.
1. Whether the trial court erred in granting
[Aqua’s] Motion In Limine barring [Appellants] from
presenting parol evidence at the trial[?]
2. Whether the trial court erred in denying
[Appellants’] Motion to Compel [Aqua’s] full and
complete responses to [Appellants’] Interrogatories
Nos. 16 and 18[?]
3. Whether the trial court erred in failing to
permit the oral motion of [Appellants] to amend its
Complaint to clarify its breach of contract claim
and/or to conform to the evidence adduced in
discovery[?]
Appellants’ Brief at 3-4.
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4
Appellants and the trial court have complied with Pennsylvania Rule of
Appellate Procedure 1925.
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In their first issue, Appellants contend the trial court abused its
discretion in granting Aqua’s motion in limine. Id. at 13. We review this
issue with the following principles in mind.
A motion in limine is used before trial to obtain a
ruling on the admissibility of evidence. Northeast
Fence & Iron Works, Inc. v. Murphy Quigley
Co., Inc., 933 A.2d 664 (Pa. Super. 2007). “It gives
the trial judge the opportunity to weigh potentially
prejudicial and harmful evidence before the trial
occurs, thus preventing the evidence from ever
reaching the jury.” Commonwealth v. Reese, 31
A.3d 708, 715 (Pa. Super. 2011) (en banc). A trial
court’s decision to grant or deny a motion in limine
“is subject to an evidentiary abuse of discretion
standard of review.” Id.Questions concerning the admissibility of
evidence lie within the sound discretion of the
trial court, and we will not reverse the court’s
decision absent a clear abuse of discretion.
Commonwealth Financial Systems, Inc. v.
Smith, 15 A.3d 492, 496 (Pa. Super. 2011)
(citing Stumpf v. Nye, 950 A.2d 1032, 1035–
1036 (Pa. Super. 2007[2008])). “An abuse of
discretion may not be found merely because an
appellate court might have reached a different
conclusion, but requires a manifest
unreasonableness, or partiality, prejudice,
bias, or ill-will, or such lack of support so as to
be clearly erroneous.” Grady v. Frito–Lay,
Inc., 576 Pa. 546, 839 A.2d 1038, 1046 (Pa.
2003).
Keystone Dedicated Logistics, LLC v. JGB
Enterprises, Inc., 77 A.3d 1, 11 (Pa. Super. 2013).
In addition, “to constitute reversible error, an
evidentiary ruling must not only be erroneous, but
also harmful or prejudicial to the complaining party.”
Winschel v. Jain, 925 A.2d 782, 794 (Pa. Super.
2007) (citing McClain v. Welker, 761 A.2d 155,
156 (Pa. Super. 2000)).
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Parr v. Ford Motor Co., 109 A.3d 682, 690-691 (Pa. Super. 2014) (en
banc), appeal denied, 123 A.3d 331 (Pa. 2015), cert denied, 136 S. Ct. 557(2015).
Appellants claim parol evidence should have been permitted to explain
an ambiguity in the Agreement relative to whose responsibility it was to
secure the permanent easement from Pulte referenced in paragraph 3 of the
Agreement. Appellants’ Brief at 13. “When a contract is silent as to a
material term, the court must permit parol evidence concerning that issue,
even where the contract has an integration clause. At a minimum, the
parties’ contract is ambiguous as to which party was responsible for
obtaining the easement at issue.” Id. The trial court, however determined
that all material terms to the Agreement were present and there was no
ambiguity. Trial Court Opinion, 7/11/15, at 3.
“The enforceability of settlement agreements is
determined according to principles of contract law.”
Kramer v. Schaeffer, 751 A.2d 241, 245 (Pa.
Super. 2000). “Because contract interpretation is a
question of law, this Court is not bound by the trial
court’s interpretation.” Stamerro v. Stamerro, 889
A.2d 1251, 1257 (Pa. Super. 2005) (citation
omitted). “Our standard of review over questions of
law is de novo and to the extent necessary, the
scope of our review is plenary as [the appellate]
court may review the entire record in making its
decision.” Id. (citation omitted).
Ragnar Benson, Inc. v. Hempfield Twp. Mun. Auth., 916 A.2d 1183,
1188 (Pa. Super. 2007)
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The fundamental rule in interpreting the meaning of
a contract is to ascertain and give effect to the intent
of the contracting parties. The intent of the parties
to a written agreement is to be regarded as being
embodied in the writing itself. The whole instrument
must be taken together in arriving at contractual
intent. Courts do not assume that a contract’s
language was chosen carelessly, nor do they assume
that the parties were ignorant of the meaning of the
language they employed. When a writing is clear
and unequivocal, its meaning must be determined by
its contents alone.
Only where a contract’s language is ambiguous
may extrinsic or parol evidence be considered
to determine the intent of the parties. A
contract contains an ambiguity if it is
reasonably susceptible of different
constructions and capable of being understood
in more than one sense. This question,
however, is not resolved in a vacuum.
Instead, contractual terms are ambiguous if
they are subject to more than one reasonable
interpretation when applied to a particular set
of facts. In the absence of an ambiguity, the
plain meaning of the agreement will be
enforced. The meaning of an unambiguous
written instrument presents a question of law
for resolution by the court.
Murphy v. Duquesne Univ. of the Holy Ghost,
565 Pa. 571, 777 A.2d 418, 429–30 (2001) (citations
and quotation marks omitted) (emphasis added).
Ramalingam v. Keller Williams Realty Grp., Inc., 121 A.3d 1034, 1046
(Pa. Super. 2015).
A contract is not ambiguous if the court can
determine its meaning without any guide other than
a knowledge of the simple facts on which, from the
nature of language in general, its meaning depends;
and a contract is not rendered ambiguous by the
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mere fact that the parties do not agree upon the
proper construction.
Metzger v. Clifford Realty Corp., 476 A.2d 1, 5 (Pa. Super. 1984)
(citation omitted).
Instantly, as noted, Appellants claim that a material term, i.e., who
bore the responsibility for obtaining the grant of a permanent easement
from Pulte, is missing from the Agreement. Appellants’ Brief at 13.
Therefore, Appellants assert that parol evidence was admissible to discern
the parties’ intent with regard to that term, and said parol evidence would
have established that Aqua bore the responsibility to obtain the easement.
Id. at 13-14.
It must be understood that only Aqua knew what it
wanted/needed with regard to the language of the
easement as this was an easement that Aqua
wanted/needed in order to have access to water
wells on the subject property. Thus, the trial court
should have determined that common sense
dictated, and the only fair reading of the parties’
contract included, the obligation of Aqua to obtain
the easement.
Id.
The trial court determined that the Agreement simply imposed an
obligation upon Aqua to pay Appellants if a grant of a permanent easement
was obtained from Pulte. Trial Court Opinion, 7/11/15, at 3.
That the agreement is silent as to who is obligated to
obtain the easement on Aqua’s behalf is of no
moment. Either party or a nonparty could have
obtained the easement for Aqua. Had the parties
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intended for Aqua to be saddled with this
responsibility, they could have easily said so. …
[Appellants] state conclusively that a material term
is absent without explaining how the Settlement
Agreement is impossible to understand or enforce in
its absence.
Id.
We agree. Viewing the Agreement as a whole, Paragraph 3 is fully
understandable as written. There is nothing in the language or the
attendant circumstances to suggest that an additional provision, requiring
the grant of easement to be obtained from Pulte, was intended to be part of
the Agreement. Rather, the Agreement merely triggered Aqua’s obligation
to pay Appellants whenever such grant of easement was executed. After
all, Pulte was not a party to the Agreement and was not thereby bound to
execute anything. That, in negotiating the terms of the Agreement, the
parties may not have anticipated a failure to obtain the grant of a permanent
easement from Pulte does not constitute an ambiguity. See Metzger,
supra. Absent an ambiguity in the Agreement, we conclude the trial court
did not abuse its discretion in granting Aqua’s motion in limine, precluding
parol evidence to interpret the Agreement. See Ragnar Benson, Inc.,
supra; Parr, supra. Accordingly, Appellants’ first issue affords them no
relief.
Appellants next claim the trial court erred in denying their motion to
compel Aqua to fully respond to discovery requests and for their motion for
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sanctions. Appellants’ Brief at 15. “Our standard of review when
determining the propriety of a discovery order is whether the trial court
committed an abuse of discretion.” Bensinger v. Univ. of Pittsburgh Med.
Ctr., 98 A.3d 672, 682 (Pa. Super. 2014), quoting Berg v. Nationwide
Mut. Ins. Co., 44 A.3d 1164, 1178 n.8 (Pa. Super. 2012), appeal denied,
65 A.3d 412 (Pa. 2013) (citation omitted). “[A]s a general rule, discovery is
liberally allowed with respect to any matter, not privileged, which is relevant
to the cause being tried.” Pa.R.C.P. 4003.1.
Specifically, Appellants contend the discovery sought, i.e., evidence of
Aqua’s efforts to obtain the grant of easement from Pulte, was relevant to its
breach of contract claim. Appellants’ Brief at 15. Appellants assert the
Agreement, as with any contract, included an implied covenant of good faith
and fair dealing, which they claim Aqua breached by placing “obligations on
Pulte in the proposed easements that went far beyond obtaining the simple
easement that was needed and, therefore, among other actions, interfered
with obtaining the easement.” Id. at 15-16. As noted in the discussion of
Appellants’ first issue however, the trial court determined that the
Agreement did not impose a duty upon Aqua to obtain the grant of
easement from Pulte.5
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5
The trial court also justified its denial of Appellants’ discovery motions
based on its determination that Appellants “had not sufficiently alleged this
theory [of a breach of an implied duty of good faith] in their complaint.”
Trial Court Opinion, 7/11/15, at 4. It is this finding that underlies
(Footnote Continued Next Page)
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As explained in the following, the duty of fair dealing cannot be used
to introduce a condition not explicit in the underlying contract itself.
[T]he Commonwealth has accepted the
principle in Restatement (Second) of Contracts § 205
that “[e]very contract imposes upon each party a
duty of good faith and fair dealing in its performance
and its enforcement.” Kaplan v. Cablevision of
PA, Inc., 448 Pa.Super. 306, 671 A.2d 716, 721–22
(1996). …
The Commonwealth has also developed in
common law what has come to be referred to as the
doctrine of necessary implication. This Court in
Daniel B. Van Campen Corp. v. Bldg. & Constr.
Trades Council of Phila., 202 Pa.Super. 118, 195
A.2d 134 (1963), described the principle as follows:
The law is clear that “In the absence of an
express provision, the law will imply an
agreement by the parties to a contract to do
and perform those things that according to
reason and justice they should do in order to
_______________________
(Footnote Continued)
Appellants’ third issue, faulting the trial court for failing to permit them to
amend their complaint to conform to the evidence. Appellants’ Brief at 17.
In light of our disposition of Appellants’ second issue on substantive grounds
based on the terms of the Agreement, we need not address the trial court’s
determination of the adequacy of Appellants’ pleading. Additionally, from
our disposition of Appellants’ first two issues, it is apparent that amendment
of the complaint to more clearly articulate a theory based on the implied
duty of good faith dealing would not overcome the clear terms of the
Agreement as discussed above.
Furthermore, we agree with the trial court that the certified record
reveals no request by Appellants for leave to amend the complaint, or an
action by the trial court foreclosing such a request prior to the entry of the
verdict. Accordingly, there is no determination by the trial court for us to
review. Appellants raised the issue on the record for the first time in their
post-verdict motion, which was insufficient to preserve the issue for appeal.
“Issues not raised in the lower court are waived and cannot be raised for the
first time on appeal.” Pa.R.A.P. 302(a).
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carry out the purpose for which the contract
was made and to refrain from doing anything
that would destroy or injure the other party’s
right to receive the fruits of the contract.
Accordingly, a promise to do an act necessary
to carry out the contract must be implied.” [8
P.L.E., Contracts, § 140.]
Id. at 136–37. … In the absence of an express
term, the doctrine of necessary implication may act
to imply a requirement necessitated by reason and
justice without which the intent of the parties is
frustrated.
The duty of good faith and the doctrine of
necessary implication apply only in limited
circumstances. Implied duties cannot trump the
express provisions in the contract. See,
Kaplan, 671 A.2d at 720 (“The court may apply the
doctrine of necessary implication [to] imply a
missing term … only when … it is abundantly clear
that the parties intended to be bound by such
term.”). Unequivocal contractual terms hold a
position superior to any implied by courts, leaving
implied covenants to serve as gap filler. … As this
obligation of good faith is tied specifically to and is
not separate from the [express] duties a contract
imposes on the parties, it cannot imply a term not
explicitly contemplated by the contract. Both the
implied covenant of good faith and the doctrine of
necessary implication are principles for courts to
harmonize the reasonable expectations of the parties
with the intent of the contractors and the terms in
their contract.
John B. Conomos, Inc. v. Sun Co., Inc. (R&M), 831 A.2d 696, 705-707
(Pa. Super. 2003) (some quotation marks, citations, and footnote omitted;
emphasis added), appeal denied, 845 A.2d 818 (Pa. 2004).
Because Appellants’ claim for breach of contract premised on Aqua’s
failure to deal in good faith is dependent on a duty we have held is not
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explicitly provided for in the Agreement, the sought after discovery was not
relevant to Appellants’ cause of action. See Pa.R.C.P. 4003.1; John B.
Conomos, Inc., supra. Accordingly, we discern no abuse of discretion by
the trial court in denying Appellants’ discovery motions. See Bensinger,
supra.To summarize, we conclude the trial court committed no error of law in
determining the Agreement was not ambiguous, and that the Agreement
imposed no duty upon Aqua to obtain the permanent easement from Pulte.
Consequently, we discern no abuse of discretion by the trial court in entering
its December 2, 2013, and July 15, 2014 orders, granting Aqua’s motion in
limine, and denying Appellants’ discovery motions, respectively. We further
conclude Appellants did not preserve any issue relative to the trial court’s
purported denial of leave to amend their complaint to conform to the
evidence. Accordingly, the trial court’s June 9, 2015 order is affirmed.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 6/28/2016
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