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HomeMy WebLinkAbout2015-3146THE TINSMAN GROUP, INC., : IN THE COURT OF COMMON PLEAS OF Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA V. : CIVIL ACTION TRI-STATE GARDEN SUPPLY,.: INC. d/b/a GARDENSCAPE, Defendant :. No. 2015-03146 CIVIL TERM IN RE: OPINION PURSUANT TO PA. R.A.P. 1925 OLER, S.J., August l4, 2018. In this civil case, Defendant has appealed from an order denying its petition to open a default judgment.' The bases of the appeal have been expressed in a statement of errors complained of on appeal as follows: 1. The trial Court abused its discretion and erred as a matter of law in entering its June 6; 2018 Order of Court denying. Defendant's Petition to Open Default Judgment in the following particulars. a) The Court erred as a matter of law in failing to determine that counsel for the Plaintiff/Respondent effected a fraud upon the Defendant/Petitioner as a party, and a fraud upon the Court by counsel's actions on August 2, 2017 when said counsel misrepresented relevant, pertinent, settled and applicable case law in contending that the trial Court during the August 2, 2017 Default Judgment hearing and/or following said hearing during ex parte transactions with the Court that damages in the aggregate sum of $183,983.83 should be entered by the Court within its Default Judgment Order, without the necessity of proving the contended damages at a separate hearing subsequent to the hearing of August 2, 2017. b) The Court erred as a matter of law in failing to determine that counsel for the PlaintifflRespondent effected a fraud upon the Defendant/Petitioner as a party, and a fraud upon the Court by counsel's actions on August 2, 2017 when said counsel misrepresented relevant, pertinent and applicable case law in contending that the trial Court during the August 2, 2017 Default Judgment hearing and/or following said hearing. during ex parte transactions with the Court that exemplary damages in the aggregate sum of $73,837.34 should be entered by the Court within its Default Judgment Order, without the necessity of proving the contended damages at a separate hearing subsequent to the hearing of August 2, 2017; c) The Court erred as a matter of law and abused its discretion in the circumstances of the instant case in failing and/or refusing to grant Defendant's Petition to Open Default Judgment when the facts set forth in Defendant's said Petition and 'Defendant's Notice of Appeal, filed July 3, 2018. testimony adduced at the June 5, 2018 hearing clearly evidenced that counsel for the Plaintiff/Respondent committed a fraud upon the Court and Petitioner in presenting or transmitting to the Court a "Proposed Order" without service of said Proposed Order on counsel for the Defendant/Petitioner at or following the hearing on August 2, 2017 and in failing to abide by Rule of Professional Conduct, Rule 3.3 Candor Toward Tribune § d which required counsel for Plaintiff/Respondent to inform the Court of material facts that would have enabled the Court to deny entry of said damages of $183,983.83 when Plaintiff/Respondent had not plead specific damages in its Complaint - d) The Court erred as a matter of law and abused its discretion in the circumstances of the instant case in failing and/or refusing to grant Defendant's Petition to Open Default Judgment when the facts set forth in Defendant's said Petition and testimony adduced at the June 5, 2018 hearing clearly evidenced that counsel for the Plaintiff/Respondent committed a fraud upon the Court and Petitioner by not representing the content and facts outlined in the letter from counsel of the Defendant/Petitioner dated June 27, 2017 outlining the reasons why counsel for the Defendant/Petitioner would be out of town on August 2, 2017 and further outlining how Answers to the interrogatories would be promptly forthcoming at the hearing on August 2, 2017 and in failing to abide by Rule of Professional Conduct, Rule 3.3 Candor Toward Tribune § d which required counsel for Plaintiff/Respondent to inform the Court of material facts that were available to counsel for the Plaintiff/Respondent and would have enabled the Court to deny entry of said damages of $183,983.83 when Plaintiff/Respondent had not plead specific damages in its Complaint? This opinion in support of the order appealed from is written pursuant to Pennsylvania Rule of Appellate Procedure 1925(a). STATEMENT OF FACTS This action was commenced by a complaint filed on June 8, 2015.3 The complaint alleged that Defendant was in the business of producing, transporting and distributing various garden products, that Plaintiff had served Defendant as an independent sales representative, and that Defendant had failed to fully pay commissions due to Plaintiff for procuring sales of Defendant's products.4 During the course of the litigation, Plaintiff filed a Motion To Compel Discovery Responses and for Sanctions, alleging that Defendant had not timely responded to its 2 Defendant's Concise Statement of Matters Complained of on Appeal, filed July 13, 2018, 3 Plaintiffs Complaint, filed June 8, 2015. ° Id. 2 interrogatories and request for production of documents.s An order was thereafter entered by the Honorable M.L. Ebert, Jr., compelling the discovery within 20 days; with a caveat that Defendant's failure to comply could result in the imposition of sanctions." On May 15, 2018, Plaintiff filed a motion for sanctions, alleging that Defendant had not complied with the order compelling discovery and requesting relief, inter alia, in the form of a default judgment.' By an order dated May 22, 2017, a hearing was scheduled for August 2, 2017.8 Shortly before the hearing,9 a motion for continuance was filed by Defendant citing, inter alia, difficulties involved in gathering materials to respond to the discovery requests and a vacation of counsel that coincided with the hearing date.lo In the absence of a grant of the continuance request,' 1 the hearing proceeded without Defendant or its counsel. At this hearing, the court questioned Plaintiff's counsel as to the recovery amount being sought by Plaintiff,12 and Plaintiff's counsel responded that Plaintiff's records indicated approximately $73,837.34 in unpaid commissions and that Pennsylvania's Sales Representative Act authorized double damages, reasonable costs and attorney's fees where the nonpayment was willfu1.13 Plaintiffs counsel further noted that Plaintiff was requesting additional attorney's fees in connection with Plaintiffs motion to compel discovery, motion for sanctions, and appearance at the s Plaintiff s Motion To Compel Discovery Responses and for Sanctions, filed April 18, 2017. 6 Order of Court, dated April 19, 2017. plaintiffs Motion for Sanctions with Entry of Default Judgment against Defendant Pursuant to Pa. R.C.P. 4019, filed May 15, 2017. 8 Order of Court, dated May 22, 2017, 9 As indicated in an earlier opinion in this case, "the Motion for Continuance was received at the Prothonotary's office on the morning of July 31, 2017, but was not entered on the record until approximately 4:00 P.M. on August 01, 2017, due to a procedural defect in Defendant's Motion." Opinion and Order of Court, at 6 n.2, dated September 28, 2017 (Ebert, J.). i0 Defendant's Motion for Continuance, docketed August 1, 2017. " Order of Court, dated August 2, 2017 (denial of Defendant's motion for continuance). 12 N.T. 2, Hearing, August 2, 2017. 13 N.T. 3-5, Hearing, August 2, 2017. 3 hearing then being held, in the amount of $1,470.00, as well as mileage expenses of Plaintiff's representative at the hearing, in the amount of $205.00.14 In addition, Plaintiffs counsel secured the admission into evidence of an exhibit relating to her firm's attorney's fees,15 and requested that Defendant's counterclaim in the case be dismissed.i6 At the conclusion of the hearing, Judge Ebert asked Plaintiffs counsel to prepare a proposed order "that you thunk covers all of these various topics."n' The following order was thereafter issued by Judge Ebert: AND NOW, this 2ud day of August, 2017, upon consideration of the Plaintiffs Motion for Sanctions and Entry of Default Judgment Pursuant to Pa. R.C.P. 4019, and it appearing that Defendant has failed to comply with the Order of this Court of April 19, 2017, and Defendant having failed to appear at the hearing on August 2, 2017, in contravention of the Order of Court dated May 22, 2017, it is hereby ordered that Plaintiff s Motion for Sanctions with Entry of Default Judgment is GRANTED. Judgment is entered in favor of Plaintiff, The Tinsman Group, Inc_, and against Defendant, Tri-State Garden Supply, Inc_, d/b/a Gardenscape on Counts I through IV of Plaintiffs Complaint in the amount of $183,753.78 as follows: Unpaid commissions -- 2013 through 2015: $73,837.34 Prejudgment interest at statutory rate of 6% since January 2015 : $11,075.60 Exemplary damages pursuant to 43 P.S. § 1475(a): $73,837.34 Attorney's fees to Abom & Kutulakis, LLP: $16,169.73 Attorney's fees paid to Schoenberg Finkel Newman & Rosenberg,LLC: $8,833.77 TOTAL $ 183,753.78 It is further ordered that judgment is entered in favor of Plaintiff, and against Defendant on Defendant's Counterclaim. It is further ordered that Defendant shall pay to Plaintiff the amount of $230.05, representing the cost of mileage for Plaintiffs representative, Timothy Bellows, to appear at the August 2, 2017, hearing pursuant to Pa_ R.C.P. 4019(g)(1).'$ This order was entered on the docket on August 3, 2017. 14 N.T. 4, Hearing, August 2, 2017. 'S N.T. 5-6, Plaintiff s Ex. 1, Hearing, August 2, 2017. 16 N.T. 4, Hearing, August 2, 2017. " N.T. 5, Hearing, August 2, 2017. '$ Order of Court, dated August 2, 2018 (footnote omitted). 4 Defendant then filed a motion for reconsideration and vacation of the court's order,14 to which Plaintiff filed a response in opposition.20 However, the court did not rule upon Defendant's motion within 30 days of the entry of the order in question. Thereafter, on September 28, 2017, Judge Ebert issued an order, docketed on September 29, 2017, accompanied by an opinion, formally denying the motion .2' From this order Defendant filed an appeal on Monday, October 30, 2017, to the Pennsylvania Superior Court .22 In the appeal, in a statement of errors complained of on appeal, Defendant argued, inter alia, that Plaintiffs counsel had been aware that Defendant would be requesting a continuance of the August 2, 2017, hearing,23 that the court erred in "simply taking allegations proffered by Plaintiff's counsel as to the amounts of alleged commissions and the right of Plaintiff to be awarded the aggregate amount without providing proof thereof after a trial of the issues of the case,"24 that "the calculation of damages formulated by Plaintiffs counsel was never pled nor produced or claimed until apparently for the first time on August 2, 2017,"25 and that, "[a]dditionally, the award of Attorney's fees without the ability of Defendant to contest the reasonableness of the same was also entered in error by this Honorable Court ."26 Defendant further contended on its .appeal that "[t]he Trial Court erred in simply accepting the damages in the aggregate, and in the specifics presented by Plaintiffs Counsel without requiring Plaintiff to prove damages at trial .„,27 19 Defendant's Motion for Reconsideration/Motion To Vacate Order of Court Dated August 2, 2017, filed August 11, 2017. 20 Plaintiff's Response in Opposition to Defendant's Motion for Reconsideration/Motion To Vacate, filed August 15, 2017. ” Opinion and Order of Court, dated September 28, 2017. 22 Defendant's Notice of Appeal, filed October 30, 2017. 23 Defendant's Concise Statement of Matters Complained of on Appeal, TI, filed November 17, 2017. 24 Defendant's Concise Statement of Matters Complained of on Appeal, 12(b), filed November 17, 2017. 2s Defendant's Concise Statement of Matters Complained of on Appeal, 12(b), filed November 17, 2017. 2s Defendant's Concise Statement of Matters Complained of on Appeal, ¶2(b), filed November 17, 2017. 27 Defendant's Concise Statement of matters Complained of on Appeal, 13, filed November 17, 2017. 5 On the appeal, in the Superior Court, Plaintiff filed a motion to quash Defendant's appeal as untimely.28 This motion, while conceding that Defendant's appeal from the order entered on September 29, 2017, was timely,29 contended that this order was a nullity in a jurisdictional sense and that the 30 -day appeal period from the properly appealable judgment entered on August 3, 2017, had expired without being tolled and without an appeal having been taken.311 PIaintiff's motion was granted by the Superior Court on March 26, 2018, and Defendant's appeal was quashed .31 It does not appear that a petition for allowance of appeal from the quashal was filed. On April 6, 2018, Defendant filed in this court a Petition To Open Default Judgment with respect to Judge Ebert's order entered on August 3, 2017, which it had unsuccessfully appealed.32 This petition argued the merits with respect to the sanction imposed by Judge Ebert, and added these paragraphs: 19. Alternatively, [Defendant] herein asserts that counsel for the [Plaintiff] effected a fraud upon the [Defendant], as a party, and a fraud upon the Court by counsel's actions on August 2, 2017 during the hearing of August 2 and whatever ex parte action was undertaken by Respondent's counsel following the adjournment of the hearing on August 2, 2017 at 9:25 a.m., which necessarily included the presentation to the Court of the Proposed Order which the Court thereupon signed. 20. Counsel for Petitioner effected a fraud on the Court, as well as a fraud on the Petitioner as follows: a. In representing to the Court at the hearing on August 2, 2017 that damages in the amount of $73,837.34 were due and payable to the (Plaintiff], when during the course of litigation no such information, calculation or demand had been made for a specific amount of damages (Commissions Due); and b. In representing to the Court that the awarded damages for the alleged unpaid commissions and doubling of the commissions as punitive 28 Appellee's Motion To Quash Appeal as Untimely, filed February 2, 2018, No. 1686 MDA 2017 (Pennsylvania Superior Court). 29 Appellee's Motion To Quash Appeal as Untimely, 134, filed February 2, 2018, No. 1686 NIDA 2017 (Pennsylvania Superior Court). 30 Appellee's Motion To Quash Appeal as Untimely, filed February 2, 2018, No. 1686 MDA 2017 (Pennsylvania Superior Court). " Order, filed May 7, 2017, No. 1686 MDA 2017 (Pennsylvania Superior Court). 32 Defendant's Petition To Open Default Judgment, filed April 6, 2018. 6 damages under the Pennsylvania Sales Representative Act were improper when counsel knew, or should have known, that [Plaintiff] had alleged only general damages in excess of $50,000.00 and not specific damages, and as required by relevant and pertinent case law as set forth in the Superior Court cases KUstiekiewicz and Kina, Supra. c. Presenting or transmitting to the Honorable Judge a "Proposed Order" without service of said Proposed Order on counsel for the [Defendant] as required by Pa.R.C.P. No. 440(a)(1) so as to permit [Defendant's] counsel to forward an objection to the Court of the content of said proposed Order; and d. Counsel for the [Plaintiff] violated Rules of Professional Conduct, Rule 3.3 Candor Toward the Tribunal, Subsection (d) which is as follows: "(d) In an ex parte proceeding, a lawyer shall inform the tribunal of all material facts known to the lawyer that will enable the tribunal to make an informed decision, whether or not the facts are adverse"; specifically by failing to inform Judge Ebert of the principles of law set forth in the Krystlekiewicz and King cases, supra, which holdings required that a trial be held on the issue of damages." Judge Ebert having retired from the Cumberland County bench to assume the duties of Cumberland County District Attorney, the case was assigned by the Court Administrator to the undersigned senior judge. A Rule was issued upon Plaintiff to show cause why the relief requested should not be granted,34 and a response in opposition to the petition was filed by Plaintiff on May 16, 2018.35 The response included an attachment in the form of an August 2, 2017, letter from Plaintiff's counsel to Defendant's counsel, enclosing "a copy of [her] correspondence of August 2, 2017 to Judge Ebert regarding the above -captioned matter, together with a Proposed Order and supporting documents, which was requested of [her] at the [August 2] hearing.i36 The response also sought attorney's fees on behalf of Plaintiff, stating that "[t]he Petition to Open Default Judgment is a transparent attempt to circumvent the 33 Defendant's Petition To Open Judgment, I¶19-20, filed April 6, 2018. 34 Rule To Show Cause, dated April 30, 2018. 31 Plaintiffs Response in Opposition to Defendant's Petition To Open Default Judgment, filed May 16, 2018. 36 Plaintiffs Response in Opposition to Defendant's Petition To Open Default Judgment, Ex. A, filed May 16, 2018. 7 appellate court's decision to quash Petitioner's untimely appeal, and [Plaintiff] has spent considerable time and resources defending against [Defendant's] ' attempts to avoid responsibility for judgment entered against it.07 A. hearing on Defendant's petition to open was held on June 5, 2018. Unfortunately, Defendant has failed to pay for the notes of testimony from this proceeding to be transcribed; however, neither the evidence nor the argument at the proceeding led the court to conclude that Plaintiffs counsel committed a fraud upon Judge Ebert or Defendant. Counsel was not required to argue the opposing party's case for a continuance or otherwise; she fairly presented her client's position, and she responded responsibly to the court's request for a proposed order. Following the hearing, the court issued the following order, from which Defendant has appealed: AND NOW, this a day of June, 2018, upon consideration of Defendant's Petition To Open Default Judgment, and following a hearing held on June 5, 2018, the petition is denied. [Plaintiff's] request for attorney's fees is also denied.38 DISCUSSION Statement of law. Several principles of law are pertinent to the present case. First, the disposition of a petition to open judgment is within the sound discretion of the trial court. Seeger v. First Union National Bank, 2003 PA Super 417, 836 A.2d 163; Brady Township v. Ashley, 17 Pa. Cmwlth. 226, 331 A.2d 585 (1975). Second, it is well settled that a petition to open judgment is not a permissible vehicle to challenge an appealable monetary judgment entered as a discovery sanction. Livolsi v. Crosby, 344 Pa. Super. 34, 495 A.2d 1384 (1985). Third, under the doctrine of res judicata, claims are precluded "that were actually litigated or could have been litigated in a prior action." EI-Hewie v Bergen County, 348 " Plaintiffs Response in Opposition to Defendant's Petition To Open Default Judgment, ¶39, filed May 16, 2018. 3s Order of Court, dated June 6, 2018. 8 Fed. Appx. 790, 794 (3d. Cir. 2009); see Matternas v. Stehman, 434 Pa. Super. 255, 642 A.2d 1120 (1994). This doctrine has been applied to a judgment entered as a discovery sanction. Fox v. Gabler, 534 Pa. 185, 626 A.2d 1141 (1993). The doctrine would not be rendered inapplicable merely because (a) the attempt to relitigate a final judgment occurs within the same case as the judgment,39 (b) the judgment's finality resulted from a quashal of an appeal ,40 or (c) the judgment was not viably contested .41 Fourth, the law -of -the -case doctrine, although not absolute in its preclusive effect,42 has been described as follows by the Pennsylvania Supreme Court: The law of the case doctrine refers to a family of rules which embody the concept that a court involved in the later phases of a litigated matter should not reopen questions decided by another judge of that same court or by a higher court in the earlier phases of the matter.... The various rules which make up the law of the case doctrine serve not only to promote the goal of judicial economy ... but also operate (1) to protect the settled expectations of the parties; (2) to insure uniformity of decisions; (3) to maintain consistency during the course of a single case; (4) to effectuate the proper and streamlined administration of justice; and (5) to bring litigation to an end. Commonwealth v. Starr, 541 Pa. 564, 574, 664 A.2d 1326, 1331 (1995) (citations omitted). This doctrine, as so described, includes Pennsylvania's traditional coordinate - jurisdiction rule, whereby "judges of coordinate jurisdiction sitting in the same case should not overrule each others' decisions." Id. at 573, 664 A.2d at 1331. Application of law to facts. In the present case, upon consideration of the history recited above and the evidence and argument presented at the hearing on June 5, 2018, the court was not persuaded that the advocacy of Plaintifrs counsel on behalf of her 39 "So long as a judgment stands unreversed and unappealed from it may not be questioned in any other case.... Since the foregoing is true as to the erect of a judgment in a subsequent proceeding, it is, a fortiori, applicable in the proceeding in which it was entered." Devlin v. Piechoski, 374 Pa. 639, 643, 99 A.2d 346, 348 (1953) (citations omitted). 40 See Dunham v. Temple University, 288 Pa. Super. 522, 432 A.2d 993 (1981) (doctrine of res judicata applied with respect to judgment entered for failure to comply with local timeliness rule); cf. DiJoseph v. Twp. of Abington, 1985 WL 4285 (E.D. Pa 1985) ("It may well be that the defendants are entitled to invoke the doctrine of res judicata as a bar to the present case" based on an appeal quashed as untimely). 41 "So long as a judgment stands unreversed and unappealed from it may not be questioned in any other case. And the circumstance that there was no legal contest in reaching the judgment does not impair its effect." Devlin v Piechoski, 374 Pa. 639, 643, 99 A.2d 346, 348 (195 3) (citations omitted). 42 See Commonwealth v. McCandless, 2005 PA Super 280, 880 A.2d 1262 (2005). 9 client in any way constituted a fraud upon either Judge Ebert or Defendant. The court was, on the contrary, constrained to conclude, as- contended by Plaintiff, that Defendant's petition to open represented an impermissible "attempt to circumvent the appellate court's decision to quash Petitioner's untimely appeal." In this context, Defendant's petition was incompatible with the proscription against utilizing a petition to open to challenge an appealable monetary judgment entered as a discovery sanction, the doctrine of res judicata, and the doctrine of the law of the case. Amy L. Owen, Esq. 2 West High Street Carlisle, PA 17013 Attorney for Plaintiff William J. Cisek, Esq. 1162 Elk Street P.O. Box 310 Franklin, PA 16323 Attorney for Defendant 10 BY THE COURT, J � esley Oleor., S.J.