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SLT Holdings, LLC v. Mitch-Well Energy, Inc.

Superior Court of Pennsylvania

August 23, 2019

SLT HOLDINGS, LLC, JACK E. MCLAUGHLIN AND ZUREYA A. MCLAUGHLIN, Appellees
v.
MITCH-WELL ENERGY, INC. AND WILLIAM E. MITCHELL, JR., AN INDIVIDUAL, Appellants

          Appeal from the Order Dated August 8, 2018 In the Court of Common Pleas of Warren County Civil Division at No(s): A.D. 626 of 2013

          BEFORE: BENDER, P.J.E., DUBOW, J., and FORD ELLIOTT, P.J.E.

          OPINION

          BENDER, P.J.E.

         Mitch-Well Energy, Inc. ("Mitch-Well") and William E. Mitchell, Jr., an individual ("Mr. Mitchell") (collectively "Appellants") appeal from the August 8, 2018 order, which granted the petition for attorneys' fees and costs filed by SLT Holdings, LLC ("SLT"), Jack E. McLaughlin and Zureya A. McLaughlin ("the McLaughlins") (collectively "Appellees"), and awarded Appellees reasonable attorneys' fees and costs in the amount of $8, 383.40.[1], [2] We affirm.

         This matter stems from a dispute over two oil, gas, and mineral ("OGM") leases regarding two parcels located in Warren County. The underlying action was commenced on November 19, 2013, with Appellees' filing of a complaint in equity against Appellants. Summary judgment was granted in favor of Appellees on January 8, 2018. Pending the decision on its motion for summary judgment, Appellees filed a motion for sanctions against Appellants, seeking recovery under Pa.R.C.P. 4019(d) for fees and costs incurred as a result of Appellants' failure to respond truthfully to Appellees' request for admissions. On November 29, 2017, the trial court heard argument on both the summary judgment motion and the motion for sanctions. The court deferred ruling on the motion for sanctions until after the issuance of its opinion regarding summary judgment. Summary judgment was entered in favor of Appellees on January 9, 2018.

By order of January 10, 2018, the court granted [Appellees'] motion for sanctions and gave them twenty days to file their petition for attorneys' fees and costs. The motion for sanctions concerned a request for admissions that [Appellees] had served on [Appellants]. [Appellants] denied every request for an admission. The most important facts that [Appellants] denied were that they made no payments to [Appellees] for approximately 13 years. The leases … required minimum payments even if no oil or gas was produced. [Appellees] hoped that if [Appellants] admitted to not making payments, then [Appellees] could prove that they breached the lease agreements, and [Appellees] could move for summary judgment without ever having deposed [Mr. Mitchell]. [Appellees] represented that because [Appellants] denied all of the requests for admissions, [Appellees] had to take the deposition of [Mr. Mitchell]. During the deposition, [Mr. Mitchell] conceded the facts that [Appellees] had previously asked [Appellants] to admit. He also conceded that [Appellants] were in error when they denied the relevant requests for admissions. It was [Appellees'] position that [Appellants'] wrongful denial of the requests for admissions forced [Appellees] to incur the costs of[] the deposition, the motion for sanctions, and the petition for attorneys' fees and costs. Counsel for [Appellees] represented that he worked 27.7 hours on relevant tasks at the agreed-upon rate of $300 per hour. The total is $8, 383.40. Of that amount, $73.40 is costs and the rest[] is attorney[s'] fees. Counsel included a table with individual line items in [Appellees'] petition. Attached to the petition are heavily redacted invoices and an affidavit signed by counsel.
[Appellants] filed a response to the petition with several arguments, including one which duplicates matters raised in the instant appeal. [Appellants] claimed that the Rule of Civil Procedure governing sanctions for denials of requests for admission that are subsequently proven true only allows sanctions after a trial or hearing. Pa.R.C.P. 4019(d)….

Trial Court Opinion ("TCO"), 11/5/18, at 2-3 (unnecessary capitalization omitted).

         Following argument on Appellees' petition for attorneys' fees and costs, the trial court issued an order on August 8, 2018, granting the petition and awarding Appellees reasonable attorneys' fees and costs in the amount of $8, 383.40. On August 27, 2018, Appellants filed a timely notice of appeal, followed by a timely, court-ordered Pa.R.A.P. 1925(b) concise statement of errors complained of on appeal. Herein, Appellants present the following issues for our review:

1. Did the [t]rial [c]ourt abuse its discretion in awarding counsel fees as a sanction for [Appellants'] denial of requests for admissions where SLT was granted summary judgment without trial?
2. Did the [t]rial [c]ourt abuse its discretion when it awarded counsel fees as a sanction for the denial of requests for admissions as SLT was never required to prove the truth of the facts denied because of the entry of summary judgment in favor of SLT Holdings?
3. Did the [t]rial [c]ourt err in failing to hold an evidentiary hearing for sanctions and attorney[s'] fees where the non[-]moving party had filed a response to the petition for attorney[s'] fees and costs?

Appellants' Brief at 4.

         "It is well-settled that the specific sanctions imposed under Pa.R.C.P. 4019 for violation of discovery rules are left to the sole discretion of the trial court." Christian, 686 A.2d at 5 (citing Sun Pipe Line Co. v. Tri-State Telecommunications, Inc., 655 A.2d 112, 122 (Pa. Super. 1995)). Therefore, we apply an abuse of discretion standard when reviewing an order granting or denying a motion for sanctions pursuant to Rule 4019(d). See id. "An abuse of discretion is not merely an error of judgment. It requires a showing of manifest unreasonableness, partiality, ill-will, or such lack of support as to be clearly ...


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