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DAVIS COOKIE COMPANY v. THOMAS WASLEY (11/21/89)

filed: November 21, 1989.

DAVIS COOKIE COMPANY, INC., APPELLANT,
v.
THOMAS WASLEY, APPELLEE. THOMAS WASLEY, APPELLEE, V. DAVIS COOKIE COMPANY, INC., APPELLANT



Appeal from the Order July 12, 1988 in the Court of Common Pleas of Clarion County, Civil No. 217 of 1988. Appeal from the Order Entered November 25, 1988 in the Court of Common Pleas of Luzerne County, Civil No. 1017-C-1988.

COUNSEL

Avrum Levicoff, Pittsburgh, for appellant.

Blythe H. Evans, Jr., Wilkes-Barre, for appellee.

Cirillo, President Judge, and Kelly and Hester, JJ.

Author: Kelly

[ 389 Pa. Super. Page 114]

In these consolidated appeals we address two significant procedural issues regarding permissive counterclaims under Pa.R.C.P. 1031.

First, we are called upon to determine whether the Luzerne County trial court abused its discretion in failing to grant allowance to amend an answer with new matter to assert a permissive counterclaim under Pa.R.C.P. 1033. We quash this appeal as having been taken improvidently from an interlocutory and unappealable order.

Second, we are called upon to determine whether the Clarion County trial court erred granting dismissal on the

[ 389 Pa. Super. Page 115]

    basis of the pendency of a prior action in another county in which the cause of action alleged as the basis of the complaint could have been, but was not, asserted as a permissive counterclaim. We vacate the order dismissing the complaint and remand with instructions.

Facts and Procedural History

Since the early 1950's, appellant, Davis Cookie Co. (Davis Cookie), has had a license from Archway Cookies, Inc. to bake and sell "Archway" cookies in Pennsylvania. In 1987, Davis Cookie and appellee Thomas Wasley (Wasley) negotiated a franchise agreement memorialized by a written letter of intent. Wasley made deposits toward the franchise fee agreed in the amount of $5,247.60. Later, however, he decided not to follow through with the franchise agreement. The dispute between the parties arises from Wasley's withdrawal.

Wasley desires return of his deposit. Davis Cookie contends that under the terms of the agreement the deposit was not refundable, and that Wasley is also liable for liquidated damages under the terms of the agreement in the amount of an additional $5,247.60. Substantively, we are presented with a relatively straightforward and uncomplicated contract case. It was not destined to remain so.

On March 7, 1988, Wasley filed an action against Davis Cookie in Luzerne County seeking return of its deposit. In its answer and new matter, pursuant to Pa.R.C.P. 1030, Davis Cookie responded to Wasley's complaint by asserting that under the clear terms of the letter of intent signed by the parties the deposit was not refundable. Davis Cookie declined to present a counterclaim under Pa.R.C.P. 1031, for liquidated damages in Wasley's Luzerne County action.

On March 30, 1988, Davis Cookie filed an action against Wasley in Clarion County seeking liquidated damages for Wasley's alleged breach of the franchise agreement. Wasley

[ 389 Pa. Super. Page 116]

    asserted the ancient defense of lis alibi pendens*fn1 by preliminary objections. The trial court sustained the objections and dismissed the suit on July 12, 1988. Davis Cookie filed timely notice of appeal.

Despite its expressed preference for pursuing its breach of contract action in Clarion County, and the prospect of eventual success on appeal from the order dismissing its Clarion County action, Davis Cookie proceeded to move to amend its answer and new matter in the Luzerne County action, pursuant to Pa.R.C.P. 1033, to assert its claim for liquidated damages as a permissive counterclaim in Wasley's action for return of its deposit. Wasley opposed the motion. The trial court denied the motion, opining that Davis Cookie had created its own procedural difficulties and that the trial court was disinclined to exercise its discretion to extricate Davis Cookie from a mess of its own making. Davis Cookie again filed timely notice of appeal.

Davis Cookie's separate appeals were consolidated for argument before this Court. On appeal, Davis Cookie contends that because it was privileged under Pa.R.C.P. 1031 to decline to present its permissive counterclaim for liquidated damages in Wasley's Luzerne County action, the trial court erred in dismissing its Clarion County action on the basis of Wasley's asserted lis alibi pendens defense. Davis Cookie also contends that the trial court in Luzerne County abused its discretion in denying its motion to amend

[ 389 Pa. Super. Page 117]

    its answer to assert a counterclaim under Pa.R.C.P. 1033. We reverse the dismissal, and quash the appeal of the order denying allowance to amend.

I. Appeal from Denial of Allowance to Amend

In Gabriel v. O'Hara, 368 Pa. Super. 383, 534 A.2d 488 (1987) and Barr v. General Accident Group Ins., 360 Pa. Super. 334, 520 A.2d 485 (1987), this Court held that order denying complainant's allowance to amend pursuant to Pa.R.C.P. 1033 to add a new cause of action arising from the same transaction or occurrence, effectively put the complainant out of court on the claims, and were therefore final and appealable. The instant case, though also involving an appeal from an order denying allowance to amend under Pa.R.C.P. 1033, is nonetheless materially distinguishable.

In Gabriel and Barr the effect of the order denying allowance to amend under Pa.R.C.P. 1033 was to preclude the complainant from complying with the compulsory joinder rule of ...


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