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US Coal Corp. v. Dinning

Superior Court of Pennsylvania

October 29, 2019

US COAL CORPORATION, AND GRATIAN YATSEVITCH, III Appellants
v.
BRIAN RAY DINNING, STEPHEN DINNING, DAVID LYNN DINNING, D.L. DINNING CO., LLC, FBR CAPITAL MARKETS & CO., FBR & CO., AK COAL RESOURCES, INC., FORMERLY KNOWN AS SOLAR FUEL COMPANY, INC., AND AK STEEL CORPORATION Appellees

          Appeal from the Order Entered June 20, 2018 In the Court of Common Pleas of Somerset County Civil Division at No: 587 Civil 2013

          BEFORE: PANELLA, P.J., STABILE, and McLAUGHLIN, JJ.

          OPINION

          STABILE, J.

         Appellants U.S. Coal Corporation ("US Coal") and Gratian Yatsevitch, III ("Yatsevitch"), appeal from the June 20, 2018 order awarding sanctions and rendering final the trial court's previous grant of summary judgment in favor of Appellees, Brian Ray Dinning ("Brian"), Stephen Dinning ("Stephen"), David Lynn Dinning ("David"), D.L. Dinning Co., LLC ("D.L. Dinning", and, collectively with David and Stephen and exclusive of Brian, the "Dinning Parties"), FBR Capital Markets & Co. and FBR & Co. (collectively "FBR"), [1] AK Coal Resources ("AK Coal"), Inc., f/k/a Solar Fuel Company, Inc. ("Solar Fuel"), and AK Steel Corporation ("AK Steel," and, collectively with AK Coal and Solar Fuel Company, "AK"). We affirm.

         Appellants filed their complaint on October 17, 2013, alleging various causes of action, including breach of contract, promissory estoppel, unjust enrichment, fraud, and negligent misrepresentation. On October 4, 2017, the trial court granted the summary judgment motions of all Appellees on Appellants' causes of action, and found in favor of AK on an indemnity counterclaim. The October 4, 2017 order reserved ruling on the amount of AK's damages. On February 20, 2018, AK filed a petition for attorneys' fees. On March 27, 2018, the trial court conducted a hearing on attorneys' fees and a motion for sanctions filed by the Dinning Parties. On June 4, 2018, the trial court entered a judgment of $152, 770.13 in favor of AK. On June 20, 2018, the trial court awarded $7, 222.32 in sanctions to the Dinning Parties. The trial court designated the June 20, 2018 order as "a final order in this matter." Order, 6/20/18. Appellants filed their notice of appeal on July 7, 2018.

         The complaint arises out of a business transaction whereby AK acquired a company then known as Solar Fuel. Brian and David owned Solar Fuel and wished to sell it. In pursuit of that goal, in October of 2010, Brian contacted Yatsevitch, an investment banker. Yatsevitch in turn contacted FBR, an investment-banking firm. FBR advised Yatsevitch that its client, AK, had an interest in buying Solar Fuel. AK and U.S. Coal[2] considered a joint venture whereby the companies would acquire Solar Fuel. In August of 2011, Brian informed Yatsevitch that AK would not pursue the joint venture with U.S. Coal. Subsequently, in October of 2011, AK agreed to acquire Solar Fuel without the involvement of Yatsevitch or U.S. Coal, for 36 million dollars (the "Solar Fuel Sale"). On October 3, 2011, prior to consummating the Solar Fuel Sale, U.S. Coal executed a release (the "Release"). Brian, serving as in-house counsel for U.S. Coal, executed the Release on behalf of U.S. Coal at the direction of Yatsevitch. Yatsevitch Deposition, 3/24/15, at 182. The Release was central to the trial court's grant of summary judgment in favor of AK. The trial court also found no enforceable oral agreement regarding the right of Yatsevitch and/or U.S. Coal to receive compensation from the Solar Fuel Sale.

         Before we address the merits of Appellants' arguments, we must consider whether we have jurisdiction over anything other than the order awarding sanctions to the Dinning Parties. Appellees note that the October 4, 2017 order disposed of all claims and parties. The only remaining issue from the parties' pleadings after October 4, 2017 was the amount of AK's award, which the June 4, 2018 order resolved. The only outstanding issue after June 4, 2018 was the Dinning Parties' motion for sanctions, which the trial court resolved on June 20, 2018. Appellants filed their notice of appeal on July 7, 2018, within the 30-day appeal period of the award of sanctions to the Dinning Parties but untimely as to all other orders. Thus, unless the June 20, 2018 order was the final appealable order in this matter, our jurisdiction is limited to a review of the award of sanctions granted in that order.

         Appellees cite Old Forge School Dist. v. Highmark, Inc., 924 A.2d 1205 (Pa. 2007), in which our Supreme Court held that a petition for sanctions and/or attorney fees was a separate matter over which the trial court retained jurisdiction after the parties appealed the final order on the merits. In that case, the Commonwealth Court, exercising original jurisdiction, entered an order sustaining preliminary objections and dismissing a complaint on February 7, 2006. Id. at 1206. The defendant filed an application for attorney's fees, pursuant to 42 Pa.C.S.A. §§ 2503(7) and 2503(9)[3] ten days later, on February 17, 2006. Id. at 1209. The plaintiff appealed the dismissal of the complaint without awaiting resolution of the fee application. Id. The Commonwealth Court entered an order granting the defendant's application for fees while the merits appeal was pending. Id. On appeal from the order granting the fee application the plaintiff, citing Pa.R.A.P. 1701(a), [4] argued the Commonwealth Court lacked jurisdiction to award fees, given the prior pending appeal on the merits. Id. at 1210. The Supreme Court disagreed, holding that the order dismissing preliminary objections was final and appealable, and that the fee petition was a separate matter for purposes of Rule 1701. Id. at 1211. In general, therefore, a fee petition is "connected to, but separate from, the underlying action." Id.[5]

         Pursuant to Old Forge, the June 4, 2018 order was final and appealable, as it disposed of AK's counterclaim, the only claim remaining from the parties' pleadings. The Dinning Parties' sanctions motion was a separate matter under the Old Forge analysis. The instant case is distinct however, in that the trial court in disposing of the Dinning Parties' fee petition, expressly designated the June 20, 2018 order as final. This case is also distinct from Old Forge in that the Dinning Parties' fee petition was pending prior to the June 4, 2018 order, which otherwise disposed of all claims and parties, whereas in Old Forge the fee petition was filed after the final order on the merits.

         We observe that the trial court, on June 20, 2018, continued to have jurisdiction over the entire case, inasmuch as fewer than thirty days had passed since the June 4, 2018 order and no party had filed an appeal. See 42 Pa.C.S.A. § 5505. Appellants, in apparent reliance on the trial court's designation of the June 20, 2018 order as final, filed this appeal within thirty days of June 20, 2018. We conclude that the June 20, 2018 order in effect modified the June 4, 2018 final order pursuant to § 5505, and that Appellants' notice of appeal was timely as to all issues. Old Forge permits a fee petition to proceed as a separate matter under Rule 1701, but no party has cited any case that requires a fee petition to proceed as a separate matter.[6] Nor has any party argued that the trial court was prohibited from modifying the June 4, 2018 order to resolve the pending fee petition. We therefore proceed to address the merits of all of Appellants' assertions of error.

         Appellants' brief includes five argument sections, each of which challenges the trial court's entry of summary judgment in favor of Appellees.[7] A motion for summary judgment is appropriate after the pleadings are closed and "whenever there is no genuine issue of any material fact as to a necessary element of the cause of action or defense which could be established by additional discovery or expert report[, ]" or, after the completion of discovery, when the party bearing the burden of proof "has failed to produce evidence of facts essential to the cause of action or defense which in a jury trial would require the issues to be submitted to a jury." Pa.R.C.P. No. 1035.2(1), (2). We review the trial court's order as follows:

Our scope of review ... [of summary judgment orders] ... is plenary. We apply the same standard as the trial court, reviewing all the evidence of record to determine whether there exists a genuine issue of material fact. We view 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. Only where there is no genuine issue as to any material fact and it is clear that the moving party is entitled to judgment as a matter of law will summary judgment be entered.
Motions for summary judgment necessarily and directly implicate the plaintiff's proof of the elements of his cause of action. Summary judgment is proper if, after the completion of discovery relevant to the motion, including the production of expert reports, an adverse party who will bear the burden of proof at trial has failed to produce evidence of facts essential to the cause of action or defense which in a jury trial would require the issues to be submitted to a jury. Thus a record that supports summary judgment will either (1) show the material facts are undisputed or (2) contain insufficient evidence of facts to make out a prima facie cause of action or defense and, therefore, there is no issue to be submitted to the jury. Upon appellate review we are not bound by the trial court's conclusions of law, but may reach our own conclusions. The appellate Court may disturb the trial court's order only upon an error of law or an abuse of discretion.

Alexander v. City of Meadville, 61 A.3d 218, 221 (Pa. Super. 2012).

         Appellants' first assertion of error is that, contrary to the trial court's findings, they produced sufficient evidence of a breach of the Release by AK.[8]Appellants' Brief at 14. In essence, Appellants argue that they expected to receive compensation in exchange for executing the release, and that AK has not paid them. The Release, executed on October 3, 2011 between U.S. Coal and AK, noted a prior letter of intent ("LOI") between them, and expressed the "parties desire to document termination of such discussions and release and waive any claims, rights or relationship that may exist." Release, 10/3/11, at ¶ 1.[9] The Release also acknowledges the parties' receipt of consideration. Id. at ¶ 2. The Release is governed by Ohio law. Id. at ¶ 4. It states that it is the parties' entire agreement, and that alterations or amendments must be in writing. Id. at ¶ 6(a), (b).

         Appellants argue that the Release is ambiguous as to their right to compensation, and that they did not in fact receive compensation for entering the Release. Appellants cite one sentence in the Release stating that "as a condition to closing a transaction that will be beneficial to U.S. Coal or its shareholders, [AK] is requiring that this Agreement be duly executed." Release, 10/3/11, at ¶ 1. Because the nature of this transaction is unspecified, and because Appellants allegedly never received any valuable consideration in exchange for the Release, Appellants argue that interpretation of the Release required the admission of parol evidence and fact finding by a jury. We disagree.

         "Under Ohio law, "[a] release, or compromise agreement, is a particular kind of contract, and, like other contracts, requires a definite offer and an acceptance thereof *** [and] must be the result of a meeting of the parties' minds in order to be binding." Indus. Heat Treating Co., Inc. v. Indus. Heat Treating Co., 662 N.E.2d 837, 843 (Ohio Ct. App. 1995). "A release of a cause of action for damages is ordinarily an absolute bar to a later action on any claim encompassed within the release." Haller v. Borror Corp., 552 N.E.2d 207, 210 (Ohio 1990). The parties' intent governs the interpretation of a release. Whitt v. Hutchinson, 330 N.E.2d 678, 682 (Ohio 1975). Where a writing purports to be the parties' entire agreement, the parol evidence rule operates to bar any extrinsic evidence that contradicts or supplements the terms of the writing. Bellman v. Am. Int'l Grp., 865 N.E.2d 863, 857 (Ohio 2007).

The parol evidence rule states that absent fraud, mistake or other invalidating cause, the parties' final written integration of their agreement may not be varied, contradicted or supplemented by evidence of prior or contemporaneous oral agreements, or prior written agreements. Despite its name, the parol evidence rule is not a rule of evidence, nor is it a rule of interpretation or construction. The parol evidence rule is a rule of substantive law which, when applicable, defines the limits of a contract. […]
The parol evidence rule, as is now universally recognized, is not a rule of evidence but is one of substantive law. It does not exclude evidence for any of the reasons ordinarily requiring exclusion, based on the probative value of such evidence or the policy of its admission. The rule as applied to contracts is simply that as a matter of substantive law, a certain act, the act of embodying the complete terms of an agreement in a writing (the 'integration'), becomes the contract of the parties. The point then is, not how the agreement is to be proved, because as a matter of law the writing is the agreement. Extrinsic evidence is excluded because it cannot serve to prove what the agreement was, this being determined as a matter of law to be the writing itself. The rule comes into operation when there is a single and final memorial of the understanding of ...

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