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12/12/97 RONALD E. CROUSE v. CYCLOPS INDUSTRIES AND

December 12, 1997

RONALD E. CROUSE, SR. AND ALIQUIPPA FORGE, INC.
v.
CYCLOPS INDUSTRIES AND COMBINED CYTEMP SPECIALTY STEEL DIVISION OF CYCLOPS INDUSTRIES, APPELLANTS



Appeal from the Judgment entered June 28, 1996, Court of Common Pleas, Allegheny County, Civil Division at No. GD 92-9847. Before JIULIANTE, J.

Before: Tamilia, Johnson and Brosky, JJ. Opinion BY Johnson J.

The opinion of the court was delivered by: Johnson

OPINION BY JOHNSON J.:

Filed December 12, 1997

In this appeal, we are asked to determine whether a promissory estoppel claim involving a steel manufacturer's alleged promise to outsource some of its business to a certain forging facility is barred by the statute of limitations under 42 Pa.C.S. § 5525. The trial court entered judgment in favor of the forging facility, Ronald E. Crouse, Sr. and Aliquippa Forge, Inc. (collectively "Aliquippa Forge"), on Aliquippa Forge's promissory estoppel cause of action. The steel manufacturer, Cyclops Industries and the Combined Cytemp Specialty Steel Division of Cyclops Industries (collectively "Cytemp"), now appeal. Because we conclude that the four-year statute of limitations applies to this cause of action and that this period expired prior to the commencement of this action, we reverse.

Cytemp owned a dormant facility for forging steel in Aliquippa, Pennsylvania. Mr. Crouse, who was engaged in the steel business, expressed an interest to Cytemp in purchasing this facility as a complement to his existing operations. After some negotiation, the parties agreed to a purchase price on the contingency that Mr. Crouse acquire financing within six months. In preparing the business plan necessary to obtain financing, Mr. Crouse learned that he needed a letter from Cytemp indicating that Cytemp would consider outsourcing some of its conversion work to the new forging facility, Aliquippa Forge Inc.. In a letter dated January 12, 1987, Cytemp's president, John Buser stated that:

Cytemp is willing to commit to have Aliquippa Forge Inc. forge an average of 3 to 4 hundred thousand pounds per month on the Aliquippa facility provided price and delivery are competitive and the quality meets our requirements. Please be aware that we can not, and do not, guarantee a uniform flow in either quantity or type of forging to be done.

We look forward to working with you in developing a mutually beneficial business relationship and hope to be sending you our first lot of material in the near future.

N.T., January 30, 1996, at 51.

On January 31, 1987, Mr. Crouse and Cytemp executed an agreement of sale for the land and buildings of the facility and a separate agreement of sale for the equipment and machinery. Neither agreement referred to the outsourcing of conversion work described in Buser's January 12, 1987 letter. However, both agreements contained the following integration clause:

This Agreement and the exhibits attached hereto represent the entire understanding of the parties and supersede all prior written or oral agreements or understandings between the parties with respect to the transaction contemplated hereby. This agreement may be amended only in writing signed by both parties hereto.

N.T., January 30, 1996, at 60.

Aliquippa Forge commenced business operations in June 1987, and in September 1987, Cytemp ordered 291,969 pounds of conversion work from Aliquippa Forge. These amounts did not meet the quantities described in Mr. Buser's letter. Although Aliquippa Forge never received any complaints from Cytemp regarding the quality of the work performed, no other orders were made. Aliquippa Forge ceased doing business in February 1991.

On August 5, 1992, Aliquippa Forge commenced an action against Cytemp asserting causes of action for breach of contract, fraud, and promissory estoppel. In response, Cytemp pleaded the defense of the statute of limitations. Although the trial court was not persuaded, Cytemp preserved this defense in its motions for a compulsory nonsuit and for a directed verdict. The trial court then granted Cytemp's motion for a compulsory nonsuit with respect to the claim of fraud; however, it denied Cytemp's motions with respect to the claims of breach of contract and promissory estoppel. These causes of action were submitted to the jury, which granted recovery only on the promissory estoppel claim. Subsequently, both parties filed timely motions for post-trial relief: Cytemp alleged, in part, that the claims against it were barred by the statute of limitations, and Aliquippa ...


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