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Agostinelli v. Edwards

Superior Court of Pennsylvania

August 20, 2014

LINDA AGOSTINELLI, Appellant
v.
JAMES C. EDWARDS, JON D. EDWARDS, AND LETWO VENTURES, LLC., JAMES C. EDWARDS AND JON D. EDWARDS,
v.
EDWARD D. AGOSTINELLI, SR., AND LINDA AGOSTINELLI, AND JCE, INC.,

Argued April 1, 2014

Appeal from the Order of the Court of Common Pleas, Centre County, Civil Division, No(s): 2006-3286 and 2006-4444. Before GRINE, J.

William I. Arbuckle, III, State College, for appellant.

William L. Higgs, Mountain Top, for appellees.

BEFORE: DONOHUE, ALLEN and STABILE, JJ. OPINION BY DONOHUE, J.

OPINION

Page 696

DONOHUE, J.

Appellant, Linda Agostinelli (" Mrs. Agostinelli" ), appeals from the order entered on June 14, 2013 by the Court of Common Pleas of Centre County following proceedings on remand from this Court. After careful review, we affirm in part and vacate in part.

The relevant facts and procedural history in this case are as follows. Dr. James Edwards (" Dr. Edwards" ) and Mrs. Agostinelli's husband, Edward Agostinelli (" Mr. Agostinelli" ), were friends who had previously collaborated on several investments. On May 3, 2000, Mrs. Agostinelli, Dr. Edwards, and his brother, Jon Edwards (" Jon" ), formed LETWO Ventures, LLC (" LETWO" ) for the purpose of buying and developing property for the Barnbridge residential development (" Barnbridge" ). LETWO's operating agreement assigned a 50 percent interest to Mrs. Agostinelli and

Page 697

a 25 percent interest each to Dr. Edwards and Jon.

A few years into the project, Dr. Edwards and Jon (collectively " the Edwardses" ) discovered tat capital funds were missing from LETWO. On August 31, 2006, the Edwardses filed suit against Mr. and Mrs. Agostinelli (together " the Agostinellis" ) claiming breach of fiduciary duty, fraud, misrepresentation, breach of contract, and conversion. On November 16, 2006, the Agostinellis filed their own suit against the Edwardses. On December 5, 2007, the trial court consolidated the two lawsuits.

On June 4 and 5, 2009, the trial court held a non-jury trial and on January 5, 2010, the trial court conducted a hearing on damages. On June 17, 2010, the trial court entered an opinion and verdict finding, inter alia, that the Agostinellis improperly converted certain LETWO funds to their benefit, but that they had not committed fraud. Trial Court Opinion and Verdict, 6/17/10, at 4-11. The trial court also determined that the Agostinellis had personally benefitted from their conversion of LETWO funds. Id. at 7, 11. The trial court found that LETWO had $480,693.48 in assets and that Mrs. Agostinelli was entitled to 50 percent of those assets, or $240,346.74. Id. at 12. The trial court further found that the Edwardses had a combined capital account of $283,239.89 and that the Agostinellis had a negative capital account of $186,224.92, which represented the amount of money they converted from LETWO. Id. The trial court ruled that the Agostinellis would have to contribute that $186,224.92 plus an additional monetary capital contribution of $141,619.94 for a total contribution of $327,844.86 in order to even out Mrs. Agostinelli's capital account with the Edwardses' capital account. Id. The trial court then credited the Agostinellis with $240,346.74, Mrs. Agostinelli's 50 percent interest in LETWO, bringing the amount of damages that the trial court required them to pay LETWO to $87,498.12. Id. The trial court also ordered the Agostinellis to pay Dr. Edwards $28,247.16 and Jon $17,075.59, but denied the Edwardses' claims for punitive damages. Id. at 13-14.

On June 28, 2010, the Edwardses and Agostinellis both filed motions for post-trial relief. On October 29, 2010, the trial court issued a new opinion and order finding that, inter alia, the Agostinelli's had to make a monetary capital contribution of $283,239.89, as opposed to the $141,619.94 provided for in the June 17, 2010 opinion and order, in order to even out her capital account with the Edwardses. Trial Court Opinion and Order, 10/29/10, at 10. Thus, the trial court determined that after adding that $283,239.89 to the $141,619.94[1] that the Agostinellis converted from LETWO, the Agostinellis owed LETWO $424,859.83. Id. After crediting Mrs. Agostinelli with her 50 percent interest in LETWO ($240,346.74), the trial court ordered the Agostinellis to pay LETWO $184,513.09.[2] Id. at 10, 12. Additionally,

Page 698

the trial court terminated Mrs. Agostinelli's interest in the company having credited her with her 50 percent interest. Id. at 9-10, 12.

On November 8, 2011, Dr. Edwards and Jon filed a motion for reconsideration of the October 29, 2010 opinion and order. On November 17, 2010 the trial court expressly granted reconsideration, but affirmed the October 29, 2010 opinion and order on January 17, 2011.

On January 31, 2011, the Edwardses appealed to this Court and on February 10, 2011, the Agostinellis filed a cross-appeal. A panel of this Court reversed the trial court's decision, concluding, inter alia, that Mr. Agostinelli (but not Mrs. Agostinelli) had committed fraud and that the trial court should have awarded the Edwardses six percent simple interest per annum on the funds that the Agostinellis converted. Agostinelli v. Edwards, 223 MDA 2011, 6-17 (Pa. Super. March 12, 2012) (unpublished memorandum). Additionally, the panel determined that the trial court should not have required Mrs. Agostinelli to make a monetary capital contribution to LETWO. Id. at 20-24. The panel also upheld the trial court's termination of Mrs. Agostinelli's interest in LETWO. Id. at 24-26. Notably, the Edwardses never challenged the trial court's decision to credit Mrs. Agostinelli with her 50 percent interest in the company. The panel remanded the case for further proceedings " consistent with this decision and for award of simple interest on conversion damages." Id. at 29.

On remand, the trial court held an evidentiary hearing on May 9, 2012, wherein the court heard evidence on damages arising from Mr. Agostinelli's fraud and the appropriate calculation of simple interest on the conversion damages. Following this evidentiary hearing, on February 7, 2013, the trial court, inter alia, determined that Mrs. Agostinelli would not receive credit for her 50 percent interest in LETWO because she had personally benefitted by converting LETWO funds. Trial Court Opinion and Order, 2/7/13, at 5-6. As a result, the trial court awarded damages to LETWO in the amount of $226,174.92,[3] but did not require her to make a monetary capital contribution to LETWO. Id. at 6-7.

On February 21, 2013, the Edwardses filed a motion for reconsideration of the February 7, 2013 order. On March 8, 2013, the Agostinellis filed a combined motion to reopen the record and motion for reconsideration of the February 7, 2013 order. That same day, and within the 30 days during which the trial court had jurisdiction to do so, the trial court expressly granted the Agostinelli's motion for reconsideration. Subsequently, on March 14, 2013, the Edwardses filed a motion to strike the Agostinellis' motion to reopen the record and motion for reconsideration in which the Edwardses attacked the Agostinellis' motion for reconsideration as an untimely post-trial motion. See Plaintiffs' Motions to Strike Defendants' Motion to Reopen the Record and Motion for Reconsideration of the February 7, 2013 Order, 3/14/13, at ¶ ¶ 2-3. The trial court held a hearing on these motions on March 25, 2013.

On June 14, 2013, the trial court entered an opinion and order in which it held:

As a preliminary matter, [the Edwardses'] motion to strike [the Agostinellis'] motion to reconsider and reopen as untimely under [Rule] 227.1 is denied. Rule 227.1 provides for post-trial relief 'after trial.' Pursuant to its plain language,

Page 699

the rule does not apply to evidentiary hearings, like the post-remand damages hearing in this case, that fall short of a full trial. See Newman Dev. Group of Pottstown, LLC v. Genuardi's Family Markets, Inc., 617 Pa. 265, 52 A.3d 1233 (Pa. [2012]).

Trial Court Opinion and Order, 6/14/13, at 2. The trial court also increased the amount the Agostinellis were required to pay LETWO to $278,237.15,[4] again without requiring Mrs. Agostinelli to make a monetary capital contribution. Id. at 4-5. The trial court did not alter its original order to the extent that Mrs. Agostinelli was not credited with her interest in LETWO. On July 12, 2013, Mrs. Agostinelli filed the instant appeal from the June 14, 2013 order. On August 20, 2013, the trial court ordered Mrs. Agostinelli to file a statement of errors complained of on appeal pursuant to Pennsylvania Rule of Appellate Procedure 1925(b)(1). On September 6, 2013, ...


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