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ADP, Inc. v. Morrow Motors

March 26, 2009


Appeal from the Judgment May 6, 2008, In the Court of Common Pleas of Beaver County, Civil Division at No. 10352-2006.

The opinion of the court was delivered by: Popovich, J.



¶ 1 Appellant Morrow Motors, Inc., t/d/b/a Morrow Ford, appeals the entry of summary judgment in the amount of $131,340.60 in favor of Appellee ADP, Inc. We reverse.

¶ 2 A review of the record discloses that the parties entered into a Master Service Agreement (hereinafter known as the MSA or the Agreement). Under the terms of the MSA, Appellee was to provide computer software and associated equipment that facilitated inventory management services for Appellant's automobile dealerships. The length of the Agreement was for a period commencing with the date it was signed on March 27, 1998, and continued until all Schedules*fn1 were completed, which translated into an expiration date of September 20, 2006 (e.g., Schedule 68004129- Appellant's contract to purchase equipment, software, and/or services from Appellee-commenced on September 20, 1999, and terminated eighty-four months later, i.e., September 20, 2006). Stated otherwise, Appellant was obligated to utilize Appellee's computer services for a fixed term set forth in the Agreement, as that term was extended pursuant to the Schedules. Therefore, when Appellant notified Appellee that it was terminating the MSA on March 24, 2005, Appellee filed a complaint alleging that Appellant was in default, which entitled Appellee to an early termination fee. See Appellee's Amended Complaint, 3/31/06, at ¶ 9.

¶ 3 In reply, Appellant denied entering into any Schedules extending the term of the MSA. See Appellant's Amended Answer and New Matter, 5/4/07, at ¶ 3. Appellant also alleged that it was not in default when it gave Appellee notification of not renewing the equipment lease agreements (Schedules) and the MSA. Further, Appellant asserted that the MSA and Schedules both expired in accordance with their provisions in June of 2005- the point in time when Appellee recovered "all its leased equipment (upon which the software and other computer programs were resident)," and Appellee's repossession foreclosed Appellant's exposure to liability. See Appellant's Amended Answer and New Matter, 5/4/07, at ¶¶ 15, 16.

¶ 4 After the exchange of additional pleadings, Appellee filed a motion for summary judgment resulting in a money award, which, upon Appellant's reconsideration petition, was reduced by the trial court to $131,340.60. Appellant filed a notice of appeal but no Pa.R.A.P. 1925(b) statement was ordered by the trial court. Appellant raises two issues for our review, the first of which states: "The [trial c]court committed an error of law in granting the Motion for Summary Judgment. Genuine issues of material fact necessary for the determination of the subject of this action exist, and the [trial c]court improperly granted summary judgment." See Appellant's brief, at 4.

Our standard of review on an appeal from the grant of a motion for summary judgment is well-settled. A reviewing court may disturb the order of the trial court only where it is established that the court committed an error of law or abused its discretion. As with all questions of law, our review is plenary.

In evaluating the trial court's decision to enter summary judgment, we focus on the legal standard articulated in the summary judgment rule. Pa.R.C.P. 1035.2. The rule states that where there is no genuine issue of material fact and the moving party is entitled to relief as a matter of law, summary judgment may be entered. Where the non-moving party bears the burden of proof on an issue, he may not merely rely on his pleadings or answers in order to survive summary judgment. Failure of a non-moving party to adduce sufficient evidence on an issue essential to his case and on which he bears the burden of proof establishes the entitlement of the moving party to judgment as a matter of law. Lastly, we will review the record in the light most favorable to the non-moving party, and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party.

Shepard v. Temple University, 948 A.2d 852, 856 (Pa. Super. 2008) (quoting Murphy v. Duquesne University, 565 Pa. 571, 777 A.2d 418, 429 (2001)). We shall now assess Appellant's contention that the trial court erred in granting Appellee's motion for summary judgment given the existence of genuine issues of material fact as to whether the parties could modify the MSA by means other than the written consent of the parties. See MSA, 3/27/98, at ¶ 21A.*fn2 In support thereof, Appellant produced the affidavit of its controller Diane Housholder, which states, as herein relevant:

1. I was employed by [Appellant] (["]Ron Lewis Automotive Group") as controller in April 2003.

2. In April 2003, I contacted [Appellee] in an effort to minimize [Appellant's] ongoing expenses related to the [.] MSA.

3. I was thereafter informed by [Appellee's] representatives that [Appellant] should compose and forward a notice of cancellation to [Appellee] concerning the unwanted equipment or services, that the same would be processed, honored and even that the cancellation desired could be retroactively applied.

4. On April 30, 2003, Tom Cochran, Executive Vice President of [Appellant] forwarded written notification to [Appellee's] Dealer Service Division that [Appellant] was canceling certain monthly maintenance services retroactive to May 1, 2003. A copy of the notice of termination dated ...

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